Seeds of its own destruction

by niamh on March 31, 2012

John Lanchester has an interesting and thoughtful essay on the continuing relevance of many of Marx’s ideas in the current issue of the London Review of Books. He calls himself an ‘empiricist’, meaning someone who takes seriously evidence about how the world as we know it works. He notes that Marx would consider his perspective ‘philosophically and politically entirely invalid’. But he argues that ‘Marx was extraordinarily prescient. He really did have the most astonishing insight into the nature and trajectory and direction of capitalism’. I’m with Lanchester on all these points. His novel Capital  (set in London) is one of the most enjoyable of the recent crop of crisis fiction, and his non-fiction Whoops! is genuinely informative. Here are some of his reflections – there is much  more in the essay itself:

Three aspects which particularly stand out here are the tribute he pays to the productive capacity of capitalism, which far exceeds that of any other political-economic system we’ve ever seen; the remaking of social order which accompanies that; and capitalism’s inherent tendency for crisis, for cycles of boom and bust…

We have at the moment this monstrous hybrid, state capitalism – a term which used to be a favourite of the Socialist Workers Party in describing the Soviet Union, and which only a few weeks ago was on the cover of the Economist to describe the current economic condition of most of the world. This is a parody of economic order, in which the general public bears all the risks and the financial sector takes all the rewards – an extraordinarily pure form of what used to be called ‘socialism for the rich’. But ‘socialism for the rich’ was supposed to be a joke. The truth is that it is now genuinely the way the global economy is working…

He foresaw the development of a proletariat who did most of the world’s work and a bourgeoisie who in effect owned the fruits of their labour. The fact of the proletariat being in the developing world, in effect shoved out of sight of the Western bourgeoisie, does nothing to disprove that picture – an ‘external proletariat’, it’s sometimes called…

The most obvious mistake in his version of the world is to do with class. There is something like a classic Marxian proletariat dispersed through the world. But Marx foresaw that this proletariat would be an increasingly centralised and organised force: indeed, this was one of the reasons it would prove so dangerous to capitalism…  But there is no organised global conflict between the classes; there is no organised global proletariat. There’s nothing even close. The proletariat is queuing to get into Foxconn, not to organise strikes there…

There are lots of different capitalisms and it’s not clear that a single analysis which embraces all of them as if they were a single phenomenon can be valid…Pretty much everyone lives longer and enjoys better health. If that is true, can it be true that capitalism consistently and reliably immiserates? Can it be true that the system is destructive, if people who live under it quite simply live longer?

He saw how capitalism would transform the surface of the planet and impact on the life of every single person alive. There is, however, a crack or flaw close to the heart of his analysis. Marx saw the two fundamental poles of economic, and social and political, life as labour and nature. He didn’t see these two things as static; he used the metaphor of a metabolism to describe the way our labour shapes the world and we in turn are shaped by the world we have made. So the two poles of labour and nature don’t stay fixed. But what Marx doesn’t allow for is the fact that nature’s resources are finite…

As Marx wrote, towards the end of the first volume of Capital, ‘man is distinguished from all other animals by the limitless and flexible nature of his needs.’ Limitless needs we see all around us and they’ve brought us to where we are, but we’re going to have to work on the flexible part.

{ 87 comments }

1

Hidari 03.31.12 at 2:15 pm

You left out the most interesting bit.

‘We also need to face the fact that the world is heading towards ever greater consumption of and demand for resources on the part of everybody. Everybody simultaneously. That fact is capitalism’s most deadly opponent. To give just one example in relation to one resource only, the American average consumption of water is one hundred gallons per person per day. There isn’t enough fresh water on the planet for everyone to live like that.

So the question is whether capitalism can evolve new forms, in the way it has so far managed to do, and come up with property and market-based mechanisms which deflect the seemingly inevitable crisis that will ensue, or whether we need some entirely different social and economic order. The irony is that this order might in many respects be like the one Marx imagined, even if he saw a different route to getting there.’

Socialism or economic collapse?

Discuss.

2

JW Mason 03.31.12 at 2:36 pm

The proletariat is queuing to get into Foxconn, not to organise strikes there…

You think this somehow contradicts Marx? Really?

3

JW Mason 03.31.12 at 2:37 pm

(oh, sorry, Google Reader didn’t make it clear that was Lanchester, not niamh. I blame the system.)

4

Kaveh 03.31.12 at 2:37 pm

To me the most obvious question is whether the existing economic and political system can handle the externalities of CO2 emissions. Mere scarcity, like his example of water use, doesn’t threaten the economic order.

5

christian_h 03.31.12 at 3:01 pm

Yeah I’m with JW in finding Lanchester’s … ruminations on the working class entirely unconvincing.

6

hartal 03.31.12 at 3:03 pm

“Pretty much everyone lives longer and enjoys better health. If that is true, can it be true that capitalism consistently and reliably immiserates?”

A new kind of immiseration may well be the consequence of people living longer, living after breakdowns in mental functioning or bodily functions. As Guy Brown has shown, the demographic of the really aged (85-100 years old) is set to explode. Without regenerative medicine, the quality of people’s lives over their entirety may well deteriorate. We will need to enhance ourselves via biotechnology just to keep the quality of life from falling, as Allen Buchanan has suggested.

But a technological solution will not likely suffice to address the environmental crisis. The fundamental problem is that the present stock of greenhouse gases is overwhelmingly the responsibility of the rich Western world, and it is thus falls on them to radically reduce their present flow of greenhouse gases and subsidize the costs of radical reductions in the poor world.

7

Tom T. 03.31.12 at 3:05 pm

Water seems like a strange example to use, since conflicts over its use don’t play out in ways that reflect on capitalism. They’re intergovernmental, as between American states or Middle Eastern nations, or they’re regulatory, as between farming interests and environmental interests. And while Americans may indeed use a hundred gallons a day on average, I would venture to guess that none of them are buying that water from private, capitalist entities.

8

Hidari 03.31.12 at 3:15 pm

Sorry I wrote: ‘Socialism or economic collapse?’

This should of course have been ‘Socialism or ecological collapse’.

Leading to economic collapse.

9

bob mcmanus 03.31.12 at 3:18 pm

Thank you for the linked article.

7) One function of the state in state or welfare capitalism is to reproduce labor power, at labor’s expense, so as to assist capital accumulation.

10

bob mcmanus 03.31.12 at 3:32 pm

7b) Oh, and to maybe start a controversy, I haven’t studied Marx himself deeply, but prefer his followers and disciples.

For instance, I found David Harvey’s book on 2nd Empire Paris, Capital of Modernity? much more useful for understanding Marxism than his book on Capital

You do need a lot of those though, carefully selected.

11

chris 03.31.12 at 3:38 pm

To give just one example in relation to one resource only, the American average consumption of water is one hundred gallons per person per day. There isn’t enough fresh water on the planet for everyone to live like that.

What does “consumption” include here? Showers and toilet flushing? Or is it some kind of industrial uses or irrigation being amortized over the population? I certainly don’t consume in the ordinary sense of the word, i.e. ingest, more than one or two gallons, if that (even counting the water content of other beverages, soups, and so forth, which is fair enough).

If you’re counting water that becomes slightly soiled as “consumed”, then obviously there doesn’t have to be that much water in the world — the same water can be used, treated, and reused several times in a day, with the right water and sewer facilities. And there’s a good deal of room for efficiency improvements that don’t even begin to cut into standard of living as ordinarily understood.

Of course, longer-term solutions could also include desalination, or using salt or other non-potable water for some of the things we presently use fresh water for; there’s lots of *water* on the planet, just most of it isn’t grade A drinkable fresh water. Washing your car with drinkable water is nuts (or more precisely, going to all the effort to purify water until it is safely drinkable only to use it up washing a car is nuts), unless water is so cheap that you haven’t bothered developing the infrastructure to deliver cheaper nondrinkable wash water in parallel with your too-valuable-to-waste drinking water.

12

hartal 03.31.12 at 4:02 pm

From the NYT book review of Diamandis new book Abundance:

“Diamandis and Kotler have written a frequently interesting and sometimes uplifting book. There are a number of ideas in “Abundance” that even devoted followers of technological trends may find new and reifying. The authors’ tutorial on the declining costs of solar panels and power storage, for instance, makes a nearly airtight case for clean energy’s imminent economic and environmental effects. And did you know that robotic surgeons — first developed for soldiers during battle, now used to help with knee-replacement surgeries — may be adapted to perform simple and urgent procedures in developing countries where doctors are scarce? Or that “vertical farms” within cities have a real potential to provide vegetables and fruits to local consumers on a mass scale? I didn’t.
Especially encouraging here is how the authors’ vision for the world’s poor — better medical care, clean water, more food, more education, all possible with the various technological tools we now have or soon will have — adds up to a deeply humanistic case.”

13

Tim Wilkinson 03.31.12 at 4:15 pm

the tribute he pays to the productive capacity of capitalism, which far exceeds that of any other political-economic system we’ve ever seen

?

We see then: the means of production and of exchange, on whose foundation the bourgeoisie built itself up, were generated in feudal society. At a certain stage in the development of these means of production and of exchange, the conditions under which feudal society produced and exchanged, the feudal organisation of agriculture and manufacturing industry, in one word, the feudal relations of property became no longer compatible with the already developed productive forces; they became so many fetters. They had to be burst asunder; they were burst asunder.

Into their place stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class.

So the bourgeoisie and bourgeois institutions gained ascendancy by default, because the nascent technical advances to which we owe the various advertised benefits of 19-20th century production demanded greater centralisation than ‘feudal’ relations permitted, and the bourgeoisie were able to step into the breach.

The induction-from-a-single-case praise of ‘capitalism’ and its benefits (which doesn’t even manage to be based on ‘post hoc ergo propter hoc’) occurred a recent-ish CT discussion of the benefits of big pharma. In that discussion, IIRC: (1) it was agreed by all sides that invention is not dependent on ‘capitalist’ organisation, and (2) no-one seemed able to gainsay the observation that innovation (roll-out of of inventions) in medicine is dependent on profit seeking corporations only insofar as they are, contingently, the only game in town.

14

Tim Wilkinson 03.31.12 at 4:18 pm

occurred a recent-ish CT discussion -> occurred in microcosm in a recent-ish CT discussion

15

bob mcmanus 03.31.12 at 5:00 pm

11,12: Oh all the wonderful things we could do, almost immediately,

…if only the politics allowed.

Meanwhile, last I heard, if we don’t reverse trends by the end of the decade, we will warm up 6 degrees by the end of the century.

Meliorists, moderates, optimists, social democrats, liberals are killing the world.

16

The Raven 03.31.12 at 5:18 pm

It’s been obvious for decades that there are too many people for humans on earth to live well. Humans can become better in their use of resources, but none of it matters if they don’t control their population.

Resource limitations were not something that Marx thought about: he was in the end a product of his times, and his times were vastly optimistic. Marx dissented from “Victorian” ideals of social order, but not Victorian ideals of progress.

I think Marx’s and, especially, Marxists other failing had to do with analyzing human society on a single axis: he failed to recognize that people had other needs than the economic and, hence, personal and national loyalties could trump class loyalties. Again, this was an error typical of broadly synthetic thinkers of his time: vast theories based on a single idea were the norm then.

17

geo 03.31.12 at 6:36 pm

OP: He calls himself an ‘empiricist’, meaning someone who takes seriously evidence about how the world as we know it works.

So what should someone who does not “take seriously evidence about how the world as we know it works” call him/herself?

(Please, no smartass replies like “a creationist” or “a neoclassical economist.” I want the name of a philosophical position that, in principle, ignores evidence about how the world as we know it works. Otherwise, calling oneself an “empiricist” is just a self-compliment.)

18

Doctor Memory 03.31.12 at 7:04 pm

geo: the word you are searching for (with perhaps not too much seriousness) is “theorist”.

You are of course correct that everyone flatters themselves to be, at the end of the day, an empiricist. A quick perusal of even this very comment thread should disabuse anyone of the idea that everyone who thinks this to be so is correct in their self-assessment.

19

J. Otto Pohl 03.31.12 at 7:05 pm

Geo:

Wouldn’t an idealist be the opposite of an empiricist?

20

christian_h 03.31.12 at 7:05 pm

The Raven (16.): I think Marx’s and, especially, Marxists other failing had to do with analyzing human society on a single axis

Totally wrong, both for Marx, and for marxists. Unless by “Marxists” you mean “”a handful of marxists I carefully selected to be guilty of this error” – I don’t know any who made it, but I’m sure they exist, even outside the liberal imagination.

And no, there is no problem of human overpopulation.

21

christian_h 03.31.12 at 7:12 pm

Calling someone an empiricist usually means more than simply taking empirical experience of reality seriously, no? Otherwise everyone is an empiricist (well of course Dr. Memory is the only actual one, the rest of us at best strive to be ;)). I’d never call myself an empiricist since my understanding is it relies on questionable assumptions about the nature of reality (especially social reality), the possibility (or lack thereof) of theory to shape our understanding of reality etc.

22

Josh G. 03.31.12 at 7:25 pm

bob mcmanus: “Oh, and to maybe start a controversy, I haven’t studied Marx himself deeply, but prefer his followers and disciples.

That seems a pretty backward way to do things. Marx himself had a lot of valuable insights, some of which are still relevant today. His “followers and disciples” – that is to say, those who elevated his writings to the status of Holy Writ – ranged from starry-eyed idealists to mass murderers. Once you accept someone else’s beliefs as The Way Things Are, you’re far less likely to produce valuable and unique insights of your own. Marx should be read as one part of a well-rounded curriculum of philosophy and political economy, not taken as some kind of secular Gospel.

23

William Eric Uspal 03.31.12 at 7:29 pm

re: empiricism — Marx’s command of empirical fact is undeniable. Capital is literally thick with them. His most interesting contemporary followers likewise know the facts — think of Doug Henwood sifting through NBER data. However, the core of Capital, as I understand it, is the reconstruction and “immanent critique” of the logic of capitalism in the very same terms used by his contemporaries and predecessors in political economy. The picture presented by Adam Smith — a utopian picture, as David Graeber might have it, since its descriptive dimension obscures other practices, and its normative dimension obscure but quite important — is shown to be riddled with contradictions, and subject to a self-generated dynamic on account of these contradictions.

Hence where Lanchester falters is his claim that Marx adopted an extrinsic standpoint. Perhaps the early, humanist Marx did so, mounting an emancipatory critique on the basis of a positive conception of human nature, but Capital’s standpoint is intrinsic to the society of capital.

I think Lanchester is right to identify a tendency in empiricism towards spurious naturalization of the status quo, but historicization is not unique to Marx (there’s Nietzsche and Foucault, for instance.)

24

William Eric Uspal 03.31.12 at 7:33 pm

25

christian_h 03.31.12 at 7:42 pm

His “followers and disciples” – that is to say, those who elevated his writings to the status of Holy Writ – ranged from starry-eyed idealists to mass murderers.

It’s amusing to see [anti-communist] holy writ quoted in a post ostensibly arguing against it. On a related note, upon reading Eagleton’s “Why Marx was right” I repeatedly had the feeling that he may be unfairly representing the anti-marxist critique – but then I see people actually argue against marxism (in person or on blogs like this) and I notice, no, he is in fact exceedingly kind in his presentations of anti-marxist criticism. (Not all of it, of course, but the vast majority.)

26

js. 03.31.12 at 7:42 pm

geo: the word you are searching for (with perhaps not too much seriousness) is “theorist”.

You are of course correct that everyone flatters themselves to be, at the end of the day, an empiricist.

1. Classically, the contrast class for empiricists would be rationalists. And rationalism and empiricism are equally theoretical frameworks that aim to explain phenomena and in particular how one can reliably gain knowledge of the world.

2. It’s simply not true that everyone flatters themselves to be an empiricist. While empiricism was and is the dominant strain in Anglo-American, it never gained much of a foothold in Germany. Marx, or for that matter Kant, meant something quite specific (and might say, not at all unreasonable) when they rejected empiricism.

27

Doctor Memory 03.31.12 at 7:46 pm

christian_h: of course I flatter myself so, but I think I already covered why I might well be wrong. :)

28

geo 03.31.12 at 7:55 pm

Otto @ 19: Yes, of course in textbooks and introductory philosophy courses “idealist” is standardly opposed to “empiricist.” But would a self-designated idealist (or a conscientious philosophy teacher) accept this as an accurate description of the distinction: “An empiricist is one who takes evidence about the world seriously, and an idealist is one who does not”?

William @23: Can you explain what an “imminent critique” is, preferably in terms more informative than “instrinsic to the society of capital”?

29

geo 03.31.12 at 8:01 pm

js @26: Does rationalism not”take seriously evidence about how the world as we know it works”? If it does, then how is it distinguished from empiricism?

30

William Timberman 03.31.12 at 8:23 pm

Geo’s somewhat tongue-in-cheek point is well taken, but it seems to me that the only opposition to empiricism with any claim to originality originates either in religion or in the arts.

Whenever the managerial class speaks ex cathedra of the real world, I invariably find myself wincing. Fools that they are, our masters will always be able see what’s already there, and their well-compensated ministers of extrapolation will always be as smug as they are bored. Anticipating what arises out of nothing requires a different sensory apparatus, and different standards of measurement.

Those making the claim that we’re past the point in history where we can be surprised have always been well-compensated, yet they always seem to be looking in the wrong direction until well after the train runs over them. Shouldn’t we at least wonder why that is?

31

The Raven 03.31.12 at 8:25 pm

christian_h, #20. Wasn’t that, exactly, what broke the Second International during World War I? Nationalism trumped class solidarity. And then Russian nationalism trumped Communist internationalism in Stalinism. And then US nationalism trumped class solidarity after World War II. And now nationalism, sexism, and racism are trumping class solidarity in the USA.

Not only is it a common mistake of Marxists, it’s a mistake that has been made over and over again, with dire consequences.

Whatever leftist ideology finally takes–if one does–it must have a different theoretical basis: the 19th-century analysis of Marx has failed the task.

Then again, someone who imagines that, somehow, humans are going to reduce their use of the resources of the earth sufficiently to survive happily without reducing their population does not seem to me very firmly attached to reality.

32

Chris Bertram 03.31.12 at 8:26 pm

Idealist isn’t the opposite of empiricist, because you can be both, as Berkeley was. Empiricism is a view in epistemology; idealism is a view about ontology.

33

js. 03.31.12 at 8:27 pm

geo:

I think Lancaster’s conflating a couple of different things. On the one hand, he says this, which is basically right:

He didn’t think that you could gain access to the truth by gleaning bits of data from experience, ‘data points’ as scientists call them, and then assembling a picture of reality from the fragments you’ve accumulated.

Marx is actually particularly hard case on this sort of question (compared to say, Descartes, or Kant, or Hegel), but if someone is rejecting empiricism, the idea is precisely that the evidence of the senses (“the data of experience”) is by itself insufficient to gain knowledge or understanding of the world. But the stress here is on by itself insufficient. It’s pretty weird to jump from this to either the paraphrase from Niamh that you quote, or to what JL himself says:

I, on the other hand, am an empiricist. That’s not so much because I think Marx was wrong about the distorting effect of underlying ideological pressures; it’s because I don’t think it’s possible to have a vantage point free of those pressures, so you have a duty to do the best with what you can see, and especially not to shirk from looking at data which are uncomfortable and/or contradictory.

Huh? Of course Marx would agree that you can’t have some pure neutral vantage point. Of course, he is interested in looking closely at and trying to understand how the world around him actually works. The point is simply that in addition to the data of experience, you’re going to need a conceptual apparatus (categories of understanding) that can’t themselves be supplied by or built out of the evidence of the senses.

34

bob mcmanus 03.31.12 at 8:40 pm

Marx himself had a lot of valuable insights

He didn’t have insights, he created basic tools, like, for instance, the 11th Thesis on Feuerbach. These tools have been used by millions, and by thousands brilliantly, and are still being used today. They are, or should be, used to change the world.

After 1848, Marx knew he needed better tools. For what? For who? Intellectuals?Das Kapital is not an analysis of Capitalism in order to create a better kinder Capitalism.

It starts though, with the 11th Thesis, and the Manifesto. Those are the necessary existential positions, and probably all that are really needed. The fast-food worker doesn’t need Poulantzas. The intellectual needs Poulantzas, in order to follow behind the fast-food worker, yelling:

Revolution Now!

Does that mean “blood in the streets?” I can’t say no, or not now. I can’t. Because I don’t think that’s my call. The other “Marxists” can tear down the barricades, betray the cell, stand in the way, urge restraint, caution, preparation, reform.

But what “Revolution Now” means fills libraries and current conversations and city parks. It is a theory and a praxis. It is a subjectivity and a performance.

Of course, David Harvey. I liked Carchedi a lot. tiqqun and TC. Ellen Meiksins (sp) Wood. All the shelves of classics. Currently reading Banaji.

35

mpowell 03.31.12 at 9:51 pm

I think the global proletariat point is interesting, but I think Lanchester is also missing a big key here. If you look at the GDP/capita of China and India over the last 30 years it is clear that half the world’s population is only now experiencing an industrial revolution (and there are plenty more people elsewhere who haven’t experienced it yet). Marx was surely mistaken about how the proletariat would respond to capitalism, but at the same time, capitalism hasn’t finished the work of bringing the productive capacity of a substantial portion of the world’s population well above subsistence level living. Unfortunately, it seems likely that we will face resource constraints before this process is really finished which will introduce a whole new dynamic which will work itself out in ways that are not clear to me.

36

Matt 03.31.12 at 10:08 pm

If there are any historical examples of political arrangements that offer hope for the climate crisis, I’m all ears. Nominally communist China is now by far the world’s largest emitter of CO2, at more than 50% greater than the USA. If their current trajectory continues for even 3 more years China will easily emit more CO2 than the USA and EU combined.

The most likely outcome seems to be that the world will speed off the cliff and that climates that were historically normal before the 20th century will vanish for at least thousands of years. Will it mean human population collapse? Quite possibly, but maybe not. When I read Planet of Slums I was struck by how much degrading misery people can survive. You can live in a tiny shack soaked by a filthy body of water that you use without distinction for cooking, washing, and defecation, and yet still live long enough to have multiple children. Like rats, dogs, and pigeons, humans are among the last vertebrate survivors standing when they overtax and homogenize ecosystems.

Will the survivors even resent their ancestors’ destruction of so much that was irreplaceable? I can’t summon much wrath about the 18th century colonists who turned eastern American forests into stumps and ashes, though they were wasteful on a scale that would make even a 1950s logger of old growth forests blush. I feel wronged by the (presumably) anthropogenic extinction of the North American megafauna, but only in a diffuse and bloodless way. I don’t feel visceral disgust over the destruction of the saber toothed cats the way I do over the poaching of endangered big cats in the present day. A century from now, when many of those big cat species are extinct, someone of my age may likewise feel only a slight twinge that the snow leopard (and perhaps snow itself) are gone. Only the people who remember what it was like before can get really angry, and we’ll die off eventually.

37

purple 03.31.12 at 10:25 pm

The proletariat is queuing to get into Foxconn, not to organise strikes there…

First, there is a labor short in Chinese manufacturing now.

Second, there are plenty of strikes in China.

38

JW Mason 03.31.12 at 10:27 pm

<i.The most likely outcome seems to be that the world will speed off the cliff and that climates that were historically normal before the 20th century will vanish for at least thousands of years. Will it mean human population collapse? Quite possibly, but maybe not.

Don’t forget the possibility of the “Venus syndrome” — a runaway greenhouse effect that boils the oceans and sterilizes the plant. James Hansen, fwiw, thinks this is the likely outcome if we fully exploit the world’s fossil fuel reserves.

It seems to me that the great filter is a strong argument that the choice facing us is socialism or extinction.

39

JW Mason 03.31.12 at 10:28 pm

(italics fail — comment was supposed to begin with a quote from Matt@36.)

40

christian_h 03.31.12 at 10:46 pm

The Raven (31.): I think you are confused. The examples you mention refer to political mistakes by people defining themselves as marxists (well in some cases anyway, most European social democrats in 1914 were either explicitly non-marxist, or “revisionists” who had dumped the core of marxist thought). But this has absolutely nothing to do with what you claimed earlier – that marxism explains social phenomena along a “single axis” and weren’t or aren’t aware of ideologies like nationalism. That’s just total nonsense. it’s of course true that marxists (well most of us anyway) consider ideologies like nationalism as, in the final analysis, being determined by the material realities of production and reproduction of society, but that doesn’t mean we ignore its existence.

41

Matt 03.31.12 at 11:06 pm

Don’t forget the possibility of the “Venus syndrome”—a runaway greenhouse effect that boils the oceans and sterilizes the plant. James Hansen, fwiw, thinks this is the likely outcome if we fully exploit the world’s fossil fuel reserves.

Yes, that is a non-trivial possibility. Personally I am a pessimistic optimist, or an optimistic pessimist, in that I believe people actually will take strong action against CO2 after the consequences are everywhere in-your-face problems of everyday life, as they likely will become later this century. Of course this would be too little, too late to actually stabilize climate in pre-20th century patterns but it would preclude burning every last fossil scrap and heading straight for the Venusian End of Days.

“Socialism or extinction” implies socialist environmental forbearance that seems pretty thin from history and current events. The best model is Cuba: good life spans and literacy despite small CO2 emissions and nominal GDP per capita. Before its collapse the former Soviet Union had CO2 emissions per capita greater than those of the present day EU. Nominally communist China is by far the world champion of emissions, and even its per-capita emissions are now higher than EU member states such as Italy, Spain, and France.

42

niamh 03.31.12 at 11:19 pm

The debate about methodological differences is interesting, but not one that I’m particularly engaged with myself at the moment (other than to note that of course all analysis or interpretation presumes a theoretical framework; Marx was greatly impressed by the empirical political economists of his time; he believed that his form of immanent critique and dialectical thinking had unmasked their assumptions and revealed how the dynamics of change truly worked; and the evidence that Lanchester summarizes here makes these claims problematic).
What I’m more interested in at the moment are two other points.
One is the ecological limits of modern production methods and of consumption patterns in the developed world, which is very hard to take as seriously as we clearly should.
The other is the question of what the sources of resistance might be to the pervasiveness of ‘capitalism’, when we have globalized production systems and where financial interests are not only socially underwritten but appear to have learned virtually nothing from the current crisis.
No alternative model is realistically available, and as he notes, living conditions broadly conceived have improved for most people on a global scale through engaging with markets. So we are talking about ameliorating the terms and conditions of capitalism. The scope of political contestation varies hugely cross-nationally: as he notes, there is not just one flavour of capitalism.
But he also wants to try to assess the bigger picture, on the scale Marx wanted to view it on. Protest in China, as he notes, is often violent, but is sporadic and short-lived; unions everywhere have been weakened. There is no effective means of generating cross-national mobilization to match the cross-national span of production and finance, and effective transnational regulation is weak at best. Western consumer protest power can be effective, but it is sporadic and selective and has a limited effective life.

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JW Mason 03.31.12 at 11:22 pm

“Socialism or extinction” implies socialist environmental forbearance that seems pretty thin from history and current events.

I should have spelled out the thought. What I mean is that it seems like we can say with some confidence that any dynamic, progressive civilization based on competition and growth, will exhaust the resources of its planet (or destroy itself by war) long before it is capable of expanding beyond the planet. (It seems to me that the Great Filter argument is practically dispositive on this point, though obviously other people, including the guy who formulated it, don’t see it that way.) So I think that human survival will require an end to competition between capitals and to competition between states. In that sense, something like socialism is a necessary condition for a sustainable civilization. But of course that doesn’t imply that any given society with some socialist features is more sustainable than one without them.

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bob mcmanus 04.01.12 at 1:29 am

No alternative model is realistically available, and as he notes, living conditions broadly conceived have improved for most people on a global scale through engaging with markets. So we are talking about ameliorating the terms and conditions of capitalism.

Famous last words of the Weimar Republic. The theory of crisis is a necessary part of Marxism, theoretical and empirical. This thing will crash and burn.

I am aware of the personal or reputational consequences of my rhetorical stance without any sense of heroism or martyrdom. That is not what it is about.

I am also aware of the plausible path to radical change: crisis, final and total discrediting of social democrats and liberals; move to the right and ascendancy of fascists; war and unspeakable horror, socialism from the ruins; repeat, optimistically, in a helical pattern. This is of course not to be wished for, no matter the bitterness. Resistance is futile, though comforting. It is to be prevented, in the only way possible.

Pessimism may be inevitable but fatalism is immoral. Calling for and acting toward the “unrealistic alternative” is both absurd and the only sane reaction.

Revolution. Now.

“Patience and irony are the two trump-cards of the Bolshevik” …La Guerre est finie

45

engels 04.01.12 at 2:20 am

Lanchester’s definition of empiricism makes it a bit hard to see why any sane person would not be an empiricist.

I like Lanchester too but I don’t think this article is one of his best. Meghnad Desai did this better anyway.

46

Kaveh 04.01.12 at 3:28 am

@45 What other of his articles did you like? I thought his article on video games, “Is it Art?”, was truly splendid.

47

Neville Morley 04.01.12 at 9:10 am

I think water use is a better example than is being credited; it isn’t coincidence that the word ‘rivals’ comes from the Latin rivales, meaning people who occupy land next to one another along a river bank. Conflict over water rights is pretty well inevitable in any region where water is at any time in the year a scarce resource – which now includes the UK. That’s not to say that the problem is necessarily exclusively bound up with capitalism (not even when you’re dealing with privatised water companies) – but I find it difficult to comprehend the causes and consequences of e.g. maintaining a flourishing market-garden industry in southern Spain, let alone all those golf courses on the Riviera, without reference to the dynamics and contraditions of capitalist accumulation within a globalised economy.

48

Andrew F. 04.01.12 at 4:08 pm

Wouldn’t the price mechanism resolve many (though not all and not some of the more serious) of these predicted ecological constraints?

I’m also a bit puzzled by the idea that scarcity plays no role in Marx’s theory, or that human beings are going to need to work on being “flexible” in their needs, or that human beings are in aggregate without any sense of limit to the availability of options to meet those needs.

As to the water example, in areas where water is less available, American municipalities will set constraints on usage. In areas where water is abundant and clean at the source – New York City is in this category – they’ll set fewer or no constraints.

49

Omega Centauri 04.01.12 at 5:45 pm

Andrew: In my experience the price mechanism has a very high future discount rate wrt predicited supply shortages. Take the case of oil, where an important source of adaptability comes from vehicle choice: if gasoline is cheap today, but might spike in a couple of years, SIVs and pickups sell like hotcakes. The market does seem to simply extrapolate current prices forward in time when making decisions in the present. Water isn’t as easy to discuss, because rather than being a global problem, it is a collection of local and regional problems.

50

Sebastian 04.01.12 at 6:05 pm

“capitalism’s inherent tendency for crisis, for cycles of boom and bust…”

I almost always read this in critiques of capitalism, but I never understand what they are comparing it to. My read of history is even allegedly static cultures/organization systems have a pretty large inherent tendency for crisis. And a lot of the non-capitalist organization systems seem to have a pretty large inherent inflexibility when faced with crisis. I guess I’m just asking whether or not that sentence is intended to reflect a “tendency for crisis” much larger than other systems, or is it that it has a tendency for crisis of approximately the same magnitude as other systems but which in capitalism is described by whatever….

51

Random Lurker 04.01.12 at 6:45 pm

Four points:

a) The article gives such an abstract and vague description of Marx’s theories, that I’m not sure we are really discussing “Marxism” or a much more vague “non-moderate leftism”;
b) On the “empiricist” point, it seems to me that Lanchester really meant “positivist”, since “empiricism” is such a wide term that could mean anything (including dialectic materialism).
c) With regards to the ecological limits to consumption, it seems to me that the usual solutions, like carbon taxes, stricter regulations etc. fall short of “socialism”, unless you use the far right definition of socialism that implies that, for example, USA up to the 80s and western europe today are socialist states (on the bright side, this definition implies that socialism is the most succesful economic paradigm ever).
d) On the question wether capitalism is the only possible system, I think that the present crisis could be construed as a Marxist crisis of overproduction, since it seems that the economy could generate enough demand only trough an increase of debt (private or public) in the last decades. If nobody comes out with a real solution for the crisis, I think we can expect a nasty radicalization of politics in the future, as Bob says in 44.

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Random Lurker 04.01.12 at 6:52 pm

@ Sebastian 51
I think that, for Marx, all social systems are bound to crises (thats the point of his theory of history), but in particular for capitalism he says that economic “crises of overproduction” (that are IMHO what we would call crises of demand) are endogenous, that is capitalism causes the crisis, instead of just not being able to cope with some external event. In short Marx says that a capitalist system near to equilibrium necessariously goes in crisis of demand, as opposed to the common view that capitalism goes in crisis when it goes in an excessive disequilibrium.

53

Peter T 04.02.12 at 8:09 am

There’s lots of limits. One Tom Murphy pointed out is that, as energy used on the surface of the earth ends up as heat, continued growth along the lines of the last century make the planet uncomfortably hot in around 300 years (not so long in civilisational terms). It’s in his blog:

http://physics.ucsd.edu/do-the-math

So yes, it’s socialism or bust.

Andrew F’s point on the price mechanism misses the point that prices are internal to a socio-economic system. For all practical purposes, the environment IS the system, hence unpriceable (you can’t price your own life – if you sold it what would you do with the proceeds?).

54

reason 04.02.12 at 2:10 pm

I think it worth doing an extended quote from Hartal @12 here:

“From the NYT book review of Diamandis new book Abundance:

“Diamandis and Kotler have written a frequently interesting and sometimes uplifting book. There are a number of ideas in “Abundance” that even devoted followers of technological trends may find new and reifying. The authors’ tutorial on the declining costs of solar panels and power storage, for instance, makes a nearly airtight case for clean energy’s imminent economic and environmental effects. And did you know that robotic surgeons — first developed for soldiers during battle, now used to help with knee-replacement surgeries — may be adapted to perform simple and urgent procedures in developing countries where doctors are scarce? Or that “vertical farms” within cities have a real potential to provide vegetables and fruits to local consumers on a mass scale? I didn’t.
Especially encouraging here is how the authors’ vision for the world’s poor — better medical care, clean water, more food, more education, all possible with the various technological tools we now have or soon will have — adds up to a deeply humanistic case.” “

mmm…. So where is my flying car and my domestic robot then? Somehow, wonderful technical inventions get locked away and used to enrich small elites not to provide for the world’s poor who don’t live much differently than the world’s poor did in the middle ages – except their oppressors have much more sophisticated weapons.

I like here to tell my great little anecdote that I guess may ring a bell with John Quiggin if he reads this thread. In Australia, when I was young, there was a TV series called “The Inventors”. One inventor had discovered a change to the design of razors, so that conventional razor blades worked better, safer and lasted longer. Everybody – said wonderful, until he marketing expert had his say. He asked the inventor whether he wanted to produce the invention himself? No, said the inventor. Then said the marketing expert, you will get offered money for the invention, so that the product never gets produced. All the money in the industry comes from selling razor blades. The last thing they want is for them to last longer.

Naturally, I never saw this product on the market.

Markets just don’t work like the fairy tale version.

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OutOfTheBox 04.03.12 at 3:38 am

Ok — here’s the solution. You guys ready? Note: This re-frames the debate, so don’t be surprised when I use definitions for things like ‘capitalism’ and ‘socialism’ that you are not familiar with… this post fortunately or unfortunately will require reflection prior to response.

Step 1) I’ll first claim that there are five political forces that exist prior to any social contract, theory of justice or ethics, or concept of ideal government. These five forces are (a) self-interest (b) altruism (c) political ambition (c) foreign ambition and (d) resource-over-use. PROOF: All five forces can be shown to exist mechanically in nature (using selfish-gene theory and/or evolutionary game theory… and a living example is Weaver Ants in Africa) while concepts like justice, ethics, social contract etc require much more from its participants — some degreee of consciousness, free-will and analytical thinking in order to (A) perceive the situation (B) Act to change it using (C) idealized principles and values such as justice, etc. THE POINT IS: This insight constrains theories of justice, ethics, social contracts — it forces us to deal with the objective fact of the five forces first… (just as DNA mechanics must live within physical laws) — and so, as you will see, justice, ethics, etc end up being much smaller problems to be argued about within the context of objective constraints from the five forces.

Step 2) Next I’ll claim that all five forces, if left unchecked, can destroy a society… (a) anarchy, (b) unsustainable governemnt debt and government-induced inflation (c) tyranny (d) invasion and (e) environmental collapse. This tells us that a good government is one that caps all these forces and a bad government is one that allows any one of these forces to run amok.

Step 3) The good news is that once these forces are capped, we can then harness them for social good — much like a river once dammed can then be harnessed to produce power. We see three examples in the real world…. (a) capping self-interest via property rights allows us to harness self-interest via capitalism, using sound money for transparency of value, as judged by the individual. The counter-intuitive result is “freedom through regulations” (b) we’ll skip for now, (c) capping political ambition via limited positions of power and harnessing it via representative democracy (elections and free speech) — giving us the counter-intuitive result: “Power through serving” (d) capping foreign ambition via a strong military and dipomacy giving us the counter-intuitive “Peace through Strength”. and (e) which we’ll skip for now.

Step 3) I skipped examples (b) capping altruism and (e) capping resource-overuse because we aren’t doing those two properly yet. There’s is a healthy movement (as mentioned in this thread) to cap resource over-use via “cap and trade” — but that MUST be done on a global scale to address global resource issues… and that’s only going to be possible if we have a world that is much more united philosophically… that’s where (b) comes in — capping altruism. That’ll be our ‘step 4’

Step 4) At first glance, capping altruism seems silly — why would we-the-people want to cap an individual’s desire to help others at their own expense? Well… we wouldn’t… a bunch of generous individuals in society is a good thing. It’s only in the presence of representative democracy that individual altruism can go to far — as it get voted into governemnt, and then corrupted by greed (false altruism). The counter-intuitive solution is to do to ‘good intentions in goverment’ what we did to ‘selfish intentions in individuals’ — we cap it and then harness it. In this case the cap takes the form of spending limits and regulation restrictions. And the harnessing comes from forcing government to prioritize its budget (instead of just having a budget). The transparenccy that comes from forcing government to prioritize the budget harnesses political correctness (the desire to appear better than we are) the same way capitalism harnesses greed. In short we’re forcing all the good intentions in government to compete for limited resources (money) in a transparent “priority marketplace” — which forces results to matter. Philosophers may recognize this as scalar consequentialism.

Step 5: Big conclusion: Marx was right that capitalism wasn’t the end-point, but he was wrong that something replaces it. The progressive ideal is indeed an economy powered by colective generosity, but it doesn’t replace capitalism, it replaces government’s social spending. I call this economy ‘Charityism’ — the precise mirror image of capitalism. It’s a competitive constantly improving charitable economy where good ideas chase limited money, powered by a society’s collective good intentions. Currently it’s only theoretical.

If anyone would like to work with me, I’m looking for co-authors for several papers. You can contact me at rickrad [at] me.com

Get it? If not, I apologize for explaining it insufficiently… feel free to ask clarifying questions.

56

mclaren 04.03.12 at 5:23 am

…the productive capacity of capitalism, which far exceeds that of any other political-economic system we’ve ever seen…

This is of course provably false.

Q: Which social-economic system produced a larger and more accurate encyclopedia: the capitalist system used by Encyclopedia Britannica, or the non-capitalist open-source peer production system used by Wikipedia?

Q: Which social-economic system produced a more stable and more efficient operating system: the capitalist system used by Microsoft to produce Windows, or the non-capitalist open-source peer production system used by Linux?

Q: Which social-economic system produced better overall patient health outcomes and covered a wider range of the population with health care: America’s capitalist health care system, or the universal socialized single-payer system used by the rest of the developed world?

Q: Which social-economic system produced a better educated population for the mass of humanity: capitalist private for-pay schools as used prior to 1852, or tax-funded universal compulsory mass education as was implemented after 1852?

…And the list goes on.

Now to pre-emptively debunk the lies in advance. Lie number one: Wikipedia takes donations, therefore it uses capitalism. That’s a lie and it’s easy to prove, since Wikipedia does not pay the vast majority of its contributors and the bulk of monies donated go to pay for things like servers. Moving on to the next lie: some Linux contributors are paid members of large corporations, therefore Linux is a capitalist operation. That’s an obvious and easy-to-debunk lie, since the cost of Linux is free (don’t even bother to cite Red Hat, since you’re paying for support there) and the vast majority of people who contribute to the Linux code base get no money whatever for they do. Moving on to the next lie: universal single-payer medical care systems like France’s or Germany’s are just as capitalist as America’s since doctors and nurses get paid, etc. That’s a foolishly ignorant lie, since in France, Germany and the other universal single-payer health care systems, the government sets the prices and controls what doctors make, etc. That’s not traditional capitalism nor anything akin to traditional capitalism — it’s much closer to a communist-style command economy, so unless you think you can convince anyone that the USSR’s soviet economy was traditional capitalism, take that lie on down the road because you’re making a fool of yourself. And now to debunk pre-emptively the final lie: compulsory mass education was begun in 1642 in Massachusetts, not 1852. Once again that’s a lie, since 1852 is the start of the first compulsory universal attendance law.

At present, we observe anarcho-syndicalist style open source peer production driving capitalism into the sea wherever it appears, from free services like craigslist to open source robotics platforms. Capitalism simply cannot compete, and is dying out.

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reason 04.03.12 at 7:38 am

mcClaren @56

Yes IP is a big problem with modern capitalism – perhaps THE big problem – but open source is something different again. It is a co-operative system, where in return to providing part of the infrastructure, firms gain access to external software cheaper. But (I have used linux at home) it is still too clunky for home use (not due the applications or user interface – I’ve used open office, firefox and thunderbird in both Windows and Linux – but due to system maintenance and application installation).

And the medical systems in France and Germany are not socialist (the doctors and nurses own their own equipment, are somewhat independent as to how they run their practices and are free to open and close businesses as they like). The UK has a largely socialist system.

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reason 04.03.12 at 7:49 am

OutofTheBox
I thought you started very well, and then lost me with this “Charityism” concept (not to mention the dreaded “sound” money idea – not that I’m for “unsound” money – it’s just the idea is loaded with lousy connotations). I think the problem with an excess of charity lies in an other place than budget considerations – it lies with the destruction of incentive and creation of a dependency culture AND with the threat from point (e) resource depletion (after all a budget is just a reflection of limited resources).

59

faustusnotes 04.03.12 at 8:09 am

Also mclaren, Linux is shit. And isn’t it a copy of a private product (Unix)?

60

Peter T 04.03.12 at 11:01 am

On productivity, I was struck by the productivity of what we would regard as primitive farming – often as high or higher than modern commercial farming if you compare the ratio of inputs to outputs. But not its scaleable, does not generate an exportable or easily-seizable surplus, and is dependent on an intimate local knowledge, so not readily transferable. Capitalism seems not so much productive as enormously good at maximising transferable output.

On Linux and other stuff, surely the model that has worked for centuries is the community of professionals, which is not capitalist. It’s on these communities that most innovation and most knowledge production and replication rests (to be clear, I’d include artisans – skilled tradespeople – under professionals).

And Linux at home works well for me – more stable than Windows, just as easy to use, better support and no viruses.

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Katherine 04.03.12 at 12:26 pm

Examples of large-scale co-operative-style/membership-based businesses:

Building Societies/Mutual Societies
John Lewis
Waitrose
The Co-operative Group (ish)
Large law firms (again, ish)

By rambling point being that there are alternatives to capitalist production that are relatively successful. The consistent downside is that they are more expensive, since being co-operative/membership based, they treat their members/employees quite well. Compare the prices in Asda (part of Walmart) to The Co-Op, for example.

Actually, it’s not a point so much as an observation for a Tuesday afternoon. If anyone else wants to run with it and tell me why co-ops are brilliant/rubbish – please do.

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OutOfTheBox 04.03.12 at 1:07 pm

@Reason — thank you for your post. So I lost you around step 4… well, just consider the parallels between the five forces…

Self Interest could lead to anarchy, but if you cap self-interest via property rights, you force everyone (greedy or not) to trade instead of steal, and you get capitalism. But forcing people to trade doesn’t create a marketplace… you also need money (capital) — a way for the markeplace to make value transparent.

The mirror image of capitalism is this:

Altruism could lead to out-of-control government spending, debt, and inflation (as good intentioned people vote for government to be helpful, and greedy people jump in pretending to have good intentions)… but if we cap government spending via spending caps, we will force the competition over government money to be fierce, and if we force government to prioritize the budget, not just have a budget, we will make that competition transparent. And in the light of transparency, politicians will be forced to prioritize good intentions above greedy, and good results above poor results. This transforms government spending into a “priority marketplace” (scalar consequentialism) that constantly improves its ability to help people in society who need help most.

This “mirror image of capitalism” is an economy… (ideas chasing limited money) so we need a name, and I chose ‘Charityism’ since it’s an economy that pursues social justice.

BTW… this dual-economy model (I believe) passes Rawl’s “veil of ignorance” test, as well as his stability test. We end up with a government that pursues maximum freedom and maximum social justice at the same time.

I’s kind of an ‘ah-ha’ thing… once it clicks everything makes sense… until it does it doesn’t…

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OutOfTheBox 04.03.12 at 1:22 pm

@reason — I forgot to address the specific questions you raised about (A) an excess of charity weakening incentives and creating a dependency culture and (B) the long-term threat of resource over-use

My answer to (A) is that charityism is the only way to restore healthy incentives and eliminate the dependency culture. Libertarians would argue that good intentions have no business in governement for the reasons you mentioned. But my point is that we have no choice… the good intentions are there because people have the right to vote. So the question is, what do we do about them? I say we “cap and prioritize” — you see, entitlement, it turns out, is expensive to maintain… and it’s inefficient. But entitlement requires a PROMISE — and under a spending cap + priorized budget system, big promises are no longer possible. It’s all about priorities now…. and so, just as we see capitlaism get better and better at creating products people want, charityism will get better and better at giving people what they need — and usually that will be short-term assistance and education. Charityism is what replaces entitlement spending.

Now regarding your point B — the ‘global resource over-use’ problem — that can only be solved by majorities around the world agreeing to do with less… that’s the ultimate negotiation and it requires a world that has properly capped and harnessed the first four forces…. In other words, we need to learn the lessons of financial sustainability before we can solve the issue of environmental sustainability. We have to solve opportunity equality (social justive / distributive justive) before we can voluntarily ‘distribute less’.

Side note: Technology will help us be more efficient with the resources we have, but it will not help us use less… using less (by choice) is a political process that requires great maturity and discipline.

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OutOfTheBox 04.03.12 at 1:31 pm

@Katherine — co-ops are awesome and clearly have a place within a capitalist system. They can tap into both the self-interest and the altruism that exists.

However, the question is, could co-ops replace capitlaism and “run the world” — the answer is no.

Capitalism gets a bad rap for being powered by greed, but the truth is, capitalism is what we get when we stop the worst form of greed — criminal greed. That’s what property rights are — a limit on greed. Capitalism says “if you want more than your share, you need to trade with others — focus on others.”

If you want an economy based on good intentions, you need to harness good intentions where they are plentiful — abundant — overflowing — and that’s inside the government. Cap good intentions there (see my previous posts) and you can harness them.

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Random Lurker 04.03.12 at 3:19 pm

@OutOfTheBox
You claim that your five forces are natural forces, then you say that the natural outcome of “altruism” is to overextend government and create deficit (I strongly doubt that Weaver Ants have problems with national deficits). Don’t you see the contradiction? It seems to me that you project the present political discourse (leftish parties being for “altruism” and “big government”) on nature.

Also, I don’t think that private property represents a “limit” on greed, since there is no theoric limit to the amount of private property one could horde.

66

Tim Wilkinson 04.03.12 at 4:02 pm

Andrew F – 1. Wouldn’t the price mechanism resolve many…of these predicted ecological constraints?

2. I’m also a bit puzzled by the idea…that human beings are in aggregate without any sense of limit to the availability of options to meet those needs.

3. in areas where water is less available, American municipalities will set constraints on usage.

1. No, because
2. In the ‘aggregate’, as a sum of uncoordinated (e.g. market) actors, they lack an effective way of manifesting such a ‘sense’. Which is why
3. The solution actually proposed is an example of coordination by means of centralised policy.

(BTW John Lanchester appeared on an edition of BBC Radio 4’s ‘Analysis’, on the topic of money, the other night, explaining about the barter economy we used to have and how the double coincidence of wants problem gave rise to the need for money. The programme went on with someone saying that ‘moneyless’ accounting began to supersede transactions in coin, bullion or kind in the C13 among the great merchants of Florence et al.)

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engels 04.03.12 at 4:33 pm

Kaveh (#46) — eg. —

Tax. There’s a thing. Murdoch, or rather News Corp, doesn’t pay much of it. In the course of Neil Chenoweth’s investigations he found that News Corp’s tax bill declined from 30 cents in the dollar in 1984 to nine cents in the dollar in 1986, and stayed below ten cents in the dollar for the entire decade from 1989. The savings in the decade to 1997 were over a billion pounds’ worth of unpaid tax. This isn’t because News Corp gets some special tax rate; they pay tax at the same rate as every other company. Rather it’s because of the effort and ingenuity which goes into moving money between networks of trusts and offshore entities in order to minimise the company’s liability for tax. Between 1992 and 1997 News Corp declared profits of A$5.8 billion in Australia, under Australian accounting rules; profits of A$3 billion in the US, under SEC accounting rules; and paid tax consistent with having earned profits of A$1 billion. ‘In those six years alone the News Corp accountants had moved A$4.8 billion of income past the tax authorities in Britain, the United States and Australia.’ And then Chenoweth has found, looking at the accounts, that the company’s profits, declared in Australian dollars, were A$364,364,000 in 1987, A$464,464,000 in 1988, A$496,496,000 in 1989 and A$282,282,000 in 1990. The odds that such figures were a happy coincidence are 1,000,000,000,000 to one. That little grace note in the sums is accountant-speak for ‘Fuck you.’ Faced with this level of financial wizardry, all the ordinary taxpayer can do is cry ‘Bravo l’artiste!’

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OutOfTheBox 04.03.12 at 8:00 pm

@Random Lurker, Good challenges — thank you.

RL Says: You claim that your five forces are natural forces, then you say that the natural outcome of “altruism” is to overextend government and create deficit (I strongly doubt that Weaver Ants have problems with national deficits). Don’t you see the contradiction? It seems to me that you project the present political discourse (leftish parties being for “altruism” and “big government”) on nature.

OOTB Responds: I make it clear that altruism is not a social danger until the appearence of representative democracy. That altruism exists first in nature without causing problems of no importance. e.g Rawls’ veil of ignorance allows for participants designing a fair society to be aware of economic laws… I am simply stating that the existance of altruism in a society is one of those laws and must be dealt with if your ideal society includes representative democracy

RL says: Also, I don’t think that private property represents a “limit” on greed, since there is no theoric limit to the amount of private property one could horde.

OOTB responds: I am not suggesting that private property eliminates greed, but it certainly limits it. In your mind you are allowed to be as greedy as you want, but if private property laws are enforced, you are not allowed to lie, cheat or steal to get what you want — you are forced to do mutually beneficial trades with voluntary participants.

Side note: The five forces model also exposes a new understanding of greed. The existance of force 2 makes it possible for force 1 to be greedy. The existance of force 3 makes it possible for force 2 to be greedy, and so on. Proof: If you’re all alone in the world, only force 1 exists and there’s nobody to call you greedy. Add a second person in the world, and it’ll be in their self-interest to call you generous if you share, and greedy if you don’t — so then we have force 2. Add a few more people, and force 3, political ambition, now exists (along with the possibility of altruism to make government go too far in the name of good intentions, taking too much is greed). Add in other groups (force 4, foreign ambition) and those other groups will call your group greedy for having too much. Get a whole lotta people filling up the planet (force 5) and it’s the earth who will call humanity greedy. Why is this important? Because precision is our friend. Notice that we’re not using any simplifying assumptions here… it’s the precision of the line-drawing which creates the simplicity of this model.

.

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mclaren 04.04.12 at 12:24 am

Faustusnotes claims “Linux is shit.” Better tell all the world’s largest companies to stop using it, then, because Linux is what runs the world’s servers. Apache running on Linux is the default platform for servers worldwide.

OutOftheBox asserts: “Capitalism gets a bad rap for being powered by greed, but the truth is, capitalism is what we get when we stop the worst form of greed—criminal greed.” This is merely a version of the “no true Scotsman” fallacy, and refutes itself. Viz., the present form of capitalism isn’t real capitalism, it’s a distorted version of capitalism. But the exact same argument was made by diehard Marxist-Leninists about the USSR’s brutal and subhuman system: “The USSR isn’t real Marxism, it’s a distorted version of Marxism.”

Since such vacuous logical fallacies contain no possible method for disconfirming them, they are self-refuting. Any assertion which can never be refuted (in this case because any possible capitalist system a critic points to, the defender claims “isn’t true capitalism”) is semantically void and thus not even an argument.

Reason claims (without providing any evidence): “And the medical systems in France and Germany are not socialist (the doctors and nurses own their own equipment, are somewhat independent as to how they run their practices and are free to open and close businesses as they like). “

Let’s cite some hard numbers and cold facts: in France a routine doctor’s visit costs $31 — in America the same routine doctor’s visit costs $151. In Germany a routine doctor’s visit costs $22. In Canada a routine doctor’s visit costs $15.

In America, a CT scan costs $1800. In France, the exact same CT scan using the exact same machine costs $212. In Germany, the exact same CT scan using the exact same machine costs $319. In the Netherlands, the exact same CT scan using the exact same machine costs $258.

In America, a dose of the drug Lipitor costs $334. In France, the same dose of the same drug Lipitor costs $53. In Germany, the same dose of the same drug costs $48. In the Netherlands, the same dose of the same drug costs $63.

I await with bated breath the elaborate incoherent and highly convoluted explanation for why American health care costs orders of magnitude more for the same services and same drugs compared to the rest of the developed world — an explanation which will, of course, conveniently ignore the fact that the governments of France and Germany and Spain and the Netherlands regulate prices and absolutely will not pay more than a fixed amount set by those governments for various services and drugs.

That is not a free capital market, and efforts to claim that it is anything like a free capital market are so disingenuous as to be beneath contempt.

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faustusnotes 04.04.12 at 1:19 am

mclaren, is Linux based on Unix or not?

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OutOfTheBox 04.04.12 at 1:19 am

@Mclaren, I agree that a ‘no true scottsman’ style “logic” is nonsense… however I was making no such claim. I believe capitalism exists to the degree that property rights are protected and money is trustworthy… and it’s impossible to protect property rights fully and it’s impossible to have competely trustworthy money. So I’ll make a nice strong assertion for you: Even the most minimal degree of capitalism you could possibly imagine does — to that same minimal degree — fight against greed… for whatever degree of capitalism exists, it necessarily includes *some* concept of property right, even if severely undermined… but to the degree that property right exists, no greedy person can take what is mine — and that’s a restriction on greed.

If you read my first post above carefully, you will see that I am proposing a mixed economy as the ideal… what’s different about my proposal is that the other side of the mix is competitive market-driven scalar consequentialism — the mature form of socialism.. different enough from socialism as we now understand it to deserve a new name, so I call it ‘charityism’ — a competitive charitable economy where ideas for spending governemnt money are forced to compete in a capped & prioritized budget, thus making results (social justice) politically important.

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Peter T 04.04.12 at 8:58 am

faustusnotes

I believe Linux is based on Unix which is based on Pascal which came out of the universities in the 70s as an alternative to Cobol and Fortran. My belief is picked up while playing early D&D with the computer PhDs in the mid 70s, so maybe Google is a better source.

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reason 04.04.12 at 9:14 am

OutofTheBox @63

“So the question is, what do we do about them? I say we “cap and prioritize”—you see, entitlement, it turns out, is expensive to maintain… and it’s inefficient. But entitlement requires a PROMISE —and under a spending cap + priorized budget system, big promises are no longer possible. It’s all about priorities now…. and so, just as we see capitlaism get better and better at creating products people want, charityism will get better and better at giving people what they need—and usually that will be short-term assistance and education. Charityism is what replaces entitlement spending.”

Sorry, I disagree with about the WHOLE of that paragraph. I’m a citizen’s income man (I prefer to call it national dividend). One of the reasons I think it good is that it solves the problem (insecurity) in the most efficient way, with the least deleterious effects on incentives. In fact I think it gives people the most freedom to find their own solutions. I don’t think entitlements are unfundable, I don’t think promises (which is all contracts are) are an issue. And I don’t like the feeling of charity (however packaged) unreliably and abitrarily deciding who gets what (it is too emotional and unsystematic). Sorry, I’m your enemy not you friend on this.

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reason 04.04.12 at 9:18 am

mclaran
Sorry,
I don’t quite understand what the cost of a particle service (controlled via what is effectively single payer mechanisms) has to do with whether the provision is socialist or capitalistic.

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reason 04.04.12 at 9:21 am

oops
particle should be particular.

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Random Lurker 04.04.12 at 10:18 am

@OutOfTheBox 68

Re: property and greed. I think that you are very wrong about what property and greed are. For example, suppose that we live in a weird world where property doesn’t exist. You want a chair, so you go to the house where the chairmaker lives and just take a chair from the house without paying him (because it isn’t HIS chair). Then, when you deposit the chair in the house where you live, you feel greedy and you choose to horde a lot of chairs (since money doesn’t exist here). But when you are back in the house where you live with two additional chairs, you find that the first chair is no more there, because I took it to the house where I live, without even telling you, since it wasn’t YOUR chair.
In fact in such a world it wouldn’t even be possible to be greedy, because greed is the desire to increase one’s property, which only is possible if property exists.
Now I think that some rudimental notion of ownership exists “naturally” (i.e. genetically) in human mind, and that property laws are an extension of it; however property laws deal on specific ways to infringe property, like theft, not on the desire to hoard property, which is greed: If you hoard a lot of apples, because you are greedy, and I steal one of your apples and I ate it because I’m a glutton (that is, you sin by Avarice, I sin by Gluttony), property laws restrict my gluttony, not your greed.
(note: self interest is something very different from greed).

Re: Altruism in democratic states. I think that your idea is that, in democratic nations, “generosity” through welfare is a problem because it causes big deficits. However:
1) Big deficits per se are not a problem, in fact are the solution to the problem of economic crises, that are crises of demand;
2) At least in some versions, “leftish” politics of big government are not supposed to be altruistic, since the idea is that the poorer maiority snatches resourches from a wealthier minority, so the maiority is supposed to act in its self interest;
3) Also, a closed society (i.e. without import and exports) cannot consume “in excess”: for example I can for sure eat more tomatoes that I can pay, but I can’t eat more tomatoes than the existing tomatoes in the world. As a consequence, a society can never consume in excess (if we exclude short lived excess consumption of renowable resources, that lead to an extiction of the resource itself, the extiction of the resource is what makes those bursts short lived), it can only have distortions in the way it redistributes the consumption internally. In this sense, “natiional deficits” for welfare are not a consequence of excessive altruism but a “patch” to the problem caused by very unequal distribution of wealth – a consequence of greed if any (since this debt is bought in the form of treasuries by the people that hoarded the money in the first place, who also collect interest payments on the public debt).

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OutOfTheBox 04.04.12 at 2:41 pm

To Reason @73

Your proposal is an specific case of my general solution, however, it’s an unstable one.

A government with a budget of $X could decide to use that budget by paying out a national dividend / citizens income — except that politicians being politicians, they wouldn’t…. they would start to make exceptions — sometimes for good reasons (the rich need less) and sometimes for bad reasons (I want to pay back those who contributed to my campaign).

All I’m proposing here is that government budgets should be capped and prioritized… the cap forces the competition to be fierce and the end result to be sustainable. The prioritized budget increases the political power to good intentions & good results and reduces the political power of bad intentions and poor results.

The only way for a national dividend to be sustainable is under the control of a benevolent dictator — and that may be an appropriate transatory step in resource-rich countries trying to break out of their immature economies… but it’s not the end-point of mature governmnment (in my view)

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reason 04.04.12 at 3:14 pm

Who decides on the cap and that it is appropriate? I think is chasing a non-problem. Inflation is the problem to worry about, not the national debt. There is plenty of evidence that democratic societies will do something about debts and about inflation – they are certainly no worse than autocracies on that score.

And your arguments about exceptions etc – no the policy doesn’t see any exceptions or inclusions just an argument about how high it should be. The rich need less is no argument – look at the net effect and just tax them more. Social security is mucked around like you suggest. The problem is get it on the books in the first place.

I honestly don’t see how your suggestion is different that what happens in functional democracies – the problem in the US is that the democracy is non-functional.

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reason 04.04.12 at 3:20 pm

random lurker @77

Substantially agree, well expressed.

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OutOfTheBox 04.04.12 at 3:20 pm

To Random Luker @76

Regarding property and greed: A world with living beings but without property is conceptually impossible because the existance of living beings implies at least one form of property — each living thing’s own life. So in order to have an imaginary world without property, you would have have to accept that it’s morally ok for me to kill you for no reason / any reason whatsoever. That is the pre-social-contract imaginary world… “solitary, poor, nasty, brutish, and short”. My point is, self-preservation in your imaginary world would naturally lead to alliances… social contract… property… government…military…democracy…and eventually to charityism. I’m not saying charityism exists a-priori, I’m saying the existance of self-interested life necessarily eventually leads there, and property rights are an early step.

Regarding altruism: I agree that altruism is not the only force that causes budget deficits — self-interest and greed (i agree they are different) of voters on the receiving end, self-interest and greed of politicians, and many other factors play a role. But you cannot deny that when governemnt goes too far, it is almost always “in the name of good intentions” — Hitler, Stalin, Democrat, Republican — doesn’t matter the party the ideology or the reason.. political correctness (especially in democratic republic which is the context we’re talking about) forces politicians to express anything and everything they do in *some* kind of ethical cloak.

My point is… a good government needs a mechanism by which most ethical endeavours have the best possible chance at winning the political debate and the less-ethical endeavours have as little chance as possible. But how is that possible when we-the-people can’t agree on what’s right and wrong? Well… we need a system that is smarter than any one person… and my proposal (at least for government spending) is to harness altruism by forcing congress to prioritize the budget — that’s all. It’s a simple idea, but it’s as big as capitalism — it’s the precise mirror image

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reason 04.04.12 at 3:22 pm

OutOfTheBox correction to my post @78

… Social security is NOT mucked around like….

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reason 04.04.12 at 3:33 pm

OutOfTheBox
P.S.

It should have occured to you by now, and the name should be a hint, that an extreme version of the “national dividend”, would indeed make it a residual. i.e. The more efficient the rest of the government is, the higher it would be. (P.S. I don’t actually like this because of the reality of the business cycle.) The name could affect the debate!

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OutOfTheBox 04.04.12 at 3:49 pm

To Reason @79 — I think you mean to praise Random Lurker @76, not my reply to you at 77, right?

To Reason @81 — Social Security has all kinds of exceptions and bonuses for different scenarios… it began as something for widows only once the past their life expentancy… and if you consider social programs overall, Obama’s healthcare reform would qualify as ‘mucking around with’, absolutely.

To Reason @82 — Milton friedman’s negative income tax was suppose to be like a national dividend — replacing all other social programs. However as soon as the politicians got ahold of it, htey started implimenting it as an *additional* social program, and Milton Friedman turned against it… so you see, we need a deeper, more structural reform that respects a politician’s need to muck with exceptions, but forces only the best exceptions to win.

To Reason @78 —

Who decides the cap? Well, sustainability is one way to box it in… we have to decide to use less than we have on average (same thing we need to do with the environment eventually). A more precise cap might be to allow government to grow with population + inflation. That keeps the purchasing power the same, but reduces the government as a percentage of the economy over time. We end up with two econmies (capitalism and charityism) each growing by population, inflation and their own productivity — one economy generates wealth… the other pursues social justice.

Inflation vs debt: which is the real problem? They are tied together… currencies get inflated when debt gets out of control. Some libertarians say the gold standard would eliminate inflation… but until you get government debt under control, countries can’t stay on the gold standard.

Can democracies keep things under control?: Yes they can, but only by instituting caps on their spending… some are learning the hard way (greece, spain, etc), some are naturally more restrained (nordic countries)… some are in-between (U.S.)… But once a cap exists (e.g. Germany is moving that direction) then it’s a question of priorities. Prioritizing the budget, therefore, is the next logical step so the best intentions and best results win.

How is my proposal (Charityism) different than how the U.S. operates now? It’s different three ways — (1) capped budget (2) prioritized budget (3) two sandboxes (two economies) so both sides have an economy that respects their values, ideals etc — capitalism is set free to maximize wealth and liberty (no more mandates, only regulations) and charityism is ignited to pursue social justice.

Is the US’s problem that its democracy is dysfunctional? My claim is that our dynfunctional political system is a symptom of the deeper philosophical debate we’re having on this thread. Eqality vs Freedom…. social justice vs individual rights… My claim is that charityism + capitalism is the answer, and once it achieves critical mass, we will solve a huge number of problems, and move on to the next round of issues (abortion, foreign policy, gay rights, environmental issues, etc)

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reason 04.05.12 at 7:24 am

Milton Friedman’s negative income tax was never implemented. What Milton Friedman said as he got older and more dominated by the Libertarian movement he helped to spawn is irrelevant.

I see absolutely no reason why a government should decide that a particular ratio of government to private sector nominal spending is correct for all time. To take a limiting case – imagine the singularity happens so the value of a labour hour tends to zero as capital accumulates. Should people possessing no capital then be forced to starve?

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reason 04.05.12 at 7:28 am

And as for the gold standard (yuck!) don’t you realise how costly it is (hint by pushing up the value of a commodity it introduces two extra costs – one the opportunity cost of not being able to use the commodity for what it is useful for – two the cost of finding and extracting it. Then think about what happens when its price starts to rise. People will speculate in it – i.e. start hoarding it. When that happens less of it will circulate and it will become even more valuable – rewarding precisely those people who are causing the problem. But then anyone who reads history should know all of this. Why are some people so blind?)

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reason 04.05.12 at 7:35 am

“Inflation vs debt: which is the real problem? They are tied together… currencies get inflated when debt gets out of control. “

Not in a liquidity trap they aren’t.

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OutOfTheBox 04.05.12 at 7:40 pm

@reason

I think we’re getting lost in the weeds… my larger point is that:

(A) self-interest without the cap of property rights leads to out-of-control individuals (e.g. crime and anarchy) and self-interest capped by property rights, aided by trustworthy money leads to capitalism — an economy that pursues wealth.

and

(B) good-intentions in a democracy without spending caps/mandate caps leads to out-of-control government (structural deficit, debt, inflation) and good intentions in a democracy with spending caps/mandate caps with the aid of a prioritized budget leads to charityism — an economy that pursues social justice.

I don’t expect to convince you (Reason) but I hope some other people reading this thread get it — I belive it’s the future.

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