The Repubs won’t Douthat

by John Quiggin on January 13, 2014

Ross Douthat is something of a punchline in these [arts parts . But, as I’ve argued here, he’s just about the last member of the once-numerous class of committed Republican intellectuals, all the rest having either defected to the left (Bartlett, Frum, Lind, Ornstein, Sullivan and many others) or descended into hackery (Reynolds, Brooks, the whole of the AEI/Heritage/CEI thinktank network1). And, every now and then he writes something that raises important issues, at the cost of pointing up how hopeless his own program for Republican reform has become.

In this piece responding to the election of Bill De Blasio, Douthat tries to make a case that the Democratic Party won’t be able to take even the minimal steps needed to address the problem growing inequality (in both outcomes and opportunity). He starts with the obvious point that Obama came to office with a tax policy that could not possibly make a serious dent in the problem (repealing the Bush tax cuts for those with incomes over $250k) and proceeded to weaken it still further.

By itself this is pretty unimpressive. The fact that Obama is not a wild-eyed socialist, or even a traditional US liberal, but rather a moderate conservative may be a revelation in some Republican circles, but it is scarcely news to the rest of us.

Douthat’s more substantive claim is that the weakness of Obama’s tax policy is not a reflection of Obama’s own preferences but is dictated by the demands of the Democratic Party base. In Douthat’s telling, the base is dominated by socially liberal high-income earners who are absolutely resistant to any increase the taxes they pay.

This is a caricature, but most caricatures have some validity. As I’ve argued here, most people in the top 20 per cent of the income distribution, but outside the top 1 per cent, have done reasonably well in terms of income growth over the past thirty years, but have not, unlike the 1 per cent, been able to insulate themselves from the degradation of public services and the consequences of growing inequality.

Although only a minority of this group votes for the Democrats, their wealth and propensity to vote make them an important constituency. To have a plausible chance of political success, the Democrats need to convince at least some of this group that the benefits of living in a better society outweigh the costs of higher taxes.

But it’s important not to overstate this. Even if a more progressive tax program cost the Democrats some votes at the top of the income distribution, they could more than offset that by attracting middle and working class voters away from the Republicans, or simply by motivating them to vote.

It’s true, as Douthat says, that there is plenty of resistance to this program within the Democratic Party. But the once-overwhelming dominance of Wall Street and its advocates has been greatly weakened, notably because the financial lobby overwhelmingly supported Romney and shared his contempt for ‘the 47 per cent’. Unlike the situation in 2008, Wall Street is now clearly aligned with the Repubs.

And this is where the failure of Douthat’s own program (and the weaker versions proposed by other ‘reformers’ such as Levin and Ponnuru) becomes obvious. Douthat wants the Republican party to beat the Dems to the punch by offering an economic program that appeals to middle and working class voters. It’s patently obvious, however, that there is zero support for this program in any of the leading factions of the Republican Party, either among the leadership or in the activist base. There isn’t a single program benefitting the working class, from Social Security to the Earned Income Tax Credit to unemployment benefits to food stamps that can command the support of more than a handful of Republicans in Congress, and those few are likely to be driven out before long.

It seems clear, reading between the lines, that Douthat has already recognised this. As the NYT official Republican columnist, he faces some pretty big costs if he jumps ship (not to mention his tribal affiliation with conservative Catholicism). Still, I can’t see how he can go on pretending much longer.


  1. Some of these were always hacks, but we didn’t notice so much back in the day. 

{ 307 comments }

1

MPAVictoria 01.13.14 at 12:15 pm

“Some of these were always hacks, but we didn’t notice so much back in the day.”

I always knew Reynolds was a hack. And an asshole.

2

Z 01.13.14 at 1:19 pm

Even if a more progressive tax program cost the Democrats some votes at the top of the income distribution, they could more than offset that by attracting middle and working class voters away from the Republicans, or simply by motivating them to vote.

Are you convinced this is factually true, though? I mean, I would like it to be true but it seems not so easy to motivate a disintegrating working class to vote for their own economic interest.

3

Mao Cheng Ji 01.13.14 at 2:26 pm

“the Democrats need to convince at least some of this group that the benefits of living in a better society outweigh the costs of higher taxes”

Since about half of the federal budget is spent on various war-making endeavors and their consequences, I’m skeptical about the strength of correlation between higher taxes and living in a better society. And so might be other citizens. As a prerequisite someone would have to convince us that higher taxes indeed lead to a better society, as opposed to more fighter jets.

4

Marc 01.13.14 at 3:25 pm

Half of the “discretionary” budget is not the same as half of the total budget.

I think that we still have residual work to do on the idea that taxes are the price we pay for living in a civilized society. We are coming off a long time when taxes have been effectively demonized and the efficiency of government has been propagandized against. It’s also true that raising real money for things like education and social welfare will require a broader base than 1%. There is precedent; upper-middle class voters routinely approve tax levies for schools.

5

adam.smith 01.13.14 at 3:37 pm

I know this is marginal to your main point but:

all the rest having either defected to the left (Bartlett, Frum, Lind, Ornstein, Sullivan and many others)

is in accurate and waters down what “left” means. They have defected from the GOP, but I’m not even sure most of them have moved much leftwards – Sullivan probably, but I find his politics weird. But even if they have moved leftwards a little, David Frum and Bruce Bartlett are not on the left if that word is supposed to keep any meaning beyond party affiliation. They’re to the right of Obama, who you describe as a moderate conservative.

6

que_es 01.13.14 at 3:49 pm

Even if a more progressive tax program cost the Democrats some votes at the top of the income distribution, they could more than offset that by attracting middle and working class voters away from the Republicans, or simply by motivating them to vote.

Specifically to Z’s question in #2: One of the problems is that we’ve done a very poor job of connecting the fact of taxation to the potential for community benefit it can at least theoretically provide. Hence, most Americans don’t see what’s missing from the following analogy:

http://taxprof.typepad.com/.a/6a00d8341c4eab53ef019b03b4f220970d-800wi

7

Mao Cheng Ji 01.13.14 at 4:49 pm

Marc, it’s half of the total budget, by some (albeit somewhat creative) estimates. In any case, the assumption ‘more tax revenue = better society’ is far from self-evident. There are many ways to spend money. It’d make more sense to advocate for specific programs (and, perhaps, for cutting some other programs) than for higher taxation.

8

Plume 01.13.14 at 4:49 pm

The Dems are better than the Republicans on virtually every issue, but since the Republicans are full-on despicable, that’s not saying much. Dems are despicable-lite, and in recent years, provide no more than a speed bump in the way of the right-wing, Social Darwinist, Ayn Rand brigades.

(One could accurately say that the Dems’ campaign slogan should be, “We’re not as bad as the Republicans!!”)

The Dems won’t go on the offensive. They play endless defense, as if they carry the New Deal on the top of their horse-drawn carriages and are being chased by Republican marauders. Little by little, they toss parts of the New Deal to the barbarian horde chasing them, hoping it will stop them, distract them, at least slow them down for a moment or two. But it doesn’t. Rearguard doesn’t work, and the people know this.

Obama has governed to placate that horde as well, patterning all but a handful of programs after conventional conservative positions, governing clearly from the center-right. This has done nothing but force the Republicans even further right, because they must always remain on his flank.

One of the real low-points in this abject march to the right was his suggestion that we raise the minimum wage to $9.00 an hour. As if splitting the difference between near poverty and a bit less near poverty is a good idea — politically or ethically. For once, I’d love to see the Dems just go for it. Make the Big Ask. The Big Demand. The Republicans do. They constantly ask for their version of the moon and often end up close to it — to their extreme desires and desire for extremes.

The Dems are so careful and “practical,” they’ve lost their massive edge with young people, when they were sitting there for the taking after the election of 2009. Push for free college, for example, and you win an entire generation of young people to your party. Push for Medicare for all and you win half the electorate for more than a generation.

The Dems are too “practical” to do any of that, which is why they don’t hold the House, may lose the Senate this year, and have lost far too many state governments.

Go big or go home. You haven’t for a long, long time, which is why I voted for Jill Stein.

9

Lee A. Arnold 01.13.14 at 4:54 pm

Well, you can actually sell higher taxes to almost everyone in the U.S., if it is necessary and fair. This little-known fact seems to have been lost in the incessant chanting of the Republican mantra during the past few decades.

Luckily for us, the Republican Party is discombobulating, as predicted in these comment threads by yours truly, many years ago. It is a slow-motion discombobulation, and it has its temporary reversals and hurrahs for the Republicans, but still, it seems inevitable. Their basic problem is that supply-side Reaganomics is only half-true (at best), and their emotional attachment to it has set them onto a collision course with reality. It took 30 years, but it had to happen.

This allowed a two-part political strategy against the GOP: driving a wedge between the GOP and the electorate, and driving another wedge between the GOP leadership and their most reliable voters: 1. They need to attack Social Security and Medicare, and now, to attack steps to universal healthcare, (because market-based economic logic demands these attacks, by slowly stripping incomes away from the poorer folks, thus increasing inequality). This will start to drive a wedge between the Republicans and larger and larger portions of the electorate. So the GOP has had to rely upon personality contests and moral “gotchyas” to win the independent voters at the last minute before they walk into the voting booth. 2. The Republican leadership has been selling the Reagan fantasy to its most reliable voters, now called the Tea Party (more or less), and the Republicans need those voters to come out and vote, to win the elections. But, after winning those elections, the Republican leadership would rather be a bit more practical on the legislative side. This has driven a wedge between the Republican leadership and the Republican Party’s most reliable voters, the Tea Party, because the Tea Party are emotional purists, and they want blood. Now that voting districts have been gerrymandered (i.e. redrawn) at the state levels, the Republicans may still do well in the 2014 midterms, but this discombobulation is going to become ever more inescapable. As you may have noticed, there have already been mainstream Republican moves to delegitimatize the Tea Party, without the Tea Party hearing about it too much.

Two new wrinkles have come out of this: A) supply-side Reaganomics (and its current incarnation, the Romney “makers/takers” baloney) can be tied into the existence of a major “social cognitive bias”. This is a real disfunction which has no name yet, so, for want of a better term, I made it up myself: social cognitive bias. Political scientists have begun to discover it in opinion-polling data on left-right distinctions, and in studies of climate change skepticism. They more they learn of the science, the more they turn against it. The basic idea is that emotional group-identification can dominate the arguments from logic, intellectual ideas, and scientific discovery. It relies upon FUD: fear, uncertainty, and doubt. Also a large dose of resentment. It can happen on the left or the right, of course, but we seem to be in an era where the right has the worst case of it, and so emotional resentment at the possibility of free-riders on government has been extended to the “makers/takers” baloney, and to an accusation that climatologists are inventing the climate-change scare to get more science funding.

The other development is: B) in the last few years a few Republicans have started bailing-out of the whole Republican disaster, not necessarily defecting to the left or becoming Democrats, but going to stand at the side-lines and looking for other work. Including strategists and propagandists. This is now accelerating. In this light, I highly recommend a fascinating and revealing short article from The Atlantic last week, “The Agony of Frank Luntz” by Molly Ball, here:
http://www.theatlantic.com/politics/archive/2014/01/the-agony-of-frank-luntz/282766/
Some of the comments under that article are also very instructive.

“Inequality” is becoming a mainstream topic and this is likely to be reinforced by the publishing of Piketty’s book in English. If there is better economic growth in 2014, inequality will also be pushed a bit out of the public consciousness by reporters.

But inequality is also a long-term thing that has many possible causes from within capitalism, and from outside it, such as: 1. outsourcing and the trade deficit; 2. financialization of the economy and lessening consumption demand; 3. the “savings glut” and the drive for asset bubbles; 4. technological advance and capital-biased technological change; 5. “winner-take-all” conditions in computer and internet markets; 6. corporatization of most R&D and innovation; 6. unknown rate of innovation vs. exponential rates of resource depletion; 7. “rational inattention” (Christopher Sims), and other possible formal limits on brain capacity and education, in the face of logarithmically-increasing network complexity, Etc. etc.

So people who really want to have a lasting answer on this topic had better start doing their homework. Ross Douthat, this means you, too.

10

Plume 01.13.14 at 4:56 pm

It’s easy to confuse people on the costs of the war machine. Easy to hide where the money goes. I’ve seen estimates of one trillion a year, and estimates a bit more than half that much. The higher one takes into account things like the security state, which is more and more in the hands of the military, an obvious danger. We may think we’re immune to coups, but we would be wrong. We almost had a military coup during FDR’s tenure. Admittedly, it seemed a bit of a Keystone Cops affair, but it still almost happened.

And defense spending is just about the least productive on the planet. Roughly 1% of the population actually utilizes military hardware, for instance. Any logical and rational investment would have to include the vast majority of the nation in its utility, which is why a Green Tech Complex, rather than a Military-Industrial one, is the optimum. Create the former by radically shrinking the latter, etc. Throw in higher taxes for the rich, add several higher tax brackets, plus a financial transactions tax, and we can also go for free college and trade school to boot.

For once, just once, let’s do what is in the best interest of the public, not the private sector.

11

MPAVictoria 01.13.14 at 5:04 pm

“In any case, the assumption ‘more tax revenue = better society’ is far from self-evident.”

Eh, it seems pretty self-evident to me. High tax, high service nations are invariably better places to live for the vast majority of people than low tax, low service ones.

“There are many ways to spend money. It’d make more sense to advocate for specific programs (and, perhaps, for cutting some other programs) than for higher taxation.”

Why not both? Heck sign me up for drastically raising taxes on the rich AND slashing defence spending by 30% to 50%.

12

mds 01.13.14 at 5:06 pm

In Douthat’s telling, the base is dominated by socially liberal high-income earners who are absolutely resistant to any increase the taxes they pay.

The base in NYC made some extremely peculiar choices in the Democratic mayoral primary and the general election, then.

13

Plume 01.13.14 at 5:17 pm

mds,

Good point. The election of De Blasio is one of the few brights spots in recent years. Hopefully, a sign that our politics are moving out of the Reagan/Thatcher/Friedman/Rand sewer.

We’ll see.

14

mud man 01.13.14 at 5:23 pm

the benefits of living in a better society

Consistently radically undervalued on all sides. “Friends will get you through life without money better than money will get you through life without friends.”

15

Plume 01.13.14 at 5:32 pm

A talking point on the right that I see constantly is that the rich don’t have enough money in the aggregate to make higher taxes mean a thing.

While estimates vary, the richest 1% now brings in at least 20% of all income. Figuring out total national income is difficult, but it, again, is at least 8 trillion. There is plenty of taxable wealth at the top to make it matter.

(I suspect it’s much higher, as much is hidden.)

The super-rich get out of paying a ton in taxes. Off-shoring, carried interest, capital gains, etc. They pay less than 20% effectively. In the 30s, 40s, 50s and early 60s, their effective rate was in the 50-55% range. If we went back to those old rates, yes, conservatives, we’d have enough money to get rid of the deficits you claim to hate so much.

Of course, you hate taxation far more than you hate deficits. Sorry, but in order to lower or get rid of the latter, you need to increase the former.

16

Barry 01.13.14 at 5:35 pm

John Q: “Still, I can’t see how he can go on pretending much longer.”

It’s easy – he tells comforting lies (to himself and others) and is well-paid for an easy job.

17

Marc 01.13.14 at 5:47 pm

@7: And this is the fruit of the successful effort of the Republican party to make raising taxes taboo by claiming that government spending is intrinsically wasteful. You can wait for military spending to shrink, which could take forever, but a quicker path to more social spending may well be paying for it with tax increases.

And restricting tax increases to the > 400 K / year crowd does send a message that taxes are some plague to be minimized. Families who are making 150 K / year have a lot of income too, and they benefit from more social services as well. It’s progress that we can talk about tax increases at all, but there are good reasons for a broader base.

18

Mao Cheng Ji 01.13.14 at 6:02 pm

“And this is the fruit of the successful effort of the Republican party to make raising taxes taboo by claiming that government spending is intrinsically wasteful.”

The fact that government spending is not intrinsically wasteful does not imply that government spending can never be wasteful, and even harmful. Again, it seems silly to advocate for tax hikes without first defining priorities for the spending. It’s not logical and I’d be surprised if you managed to convince anybody.

19

MPAVictoria 01.13.14 at 6:07 pm

“Again, it seems silly to advocate for tax hikes without first defining priorities for the spending.”
And who exactly is doing that? Do you honestly think that John doesn’t have some policy ideas on what should be done with the extra money? DO you think Marc doesn’t

20

Plume 01.13.14 at 6:08 pm

@Marc 17

I think a better idea is to bring the tax brackets in line with reality. The 400K threshold is far lower than it was, adjusted for inflation, back in the 30s thru the 70s.

We have people making billions now. Keeping the top bracket at 250K or 400K is absurd in that light.

. . . .

I’d suggest the following (give or take):

500K — 40%
1 mil — 50%
10 mil- 60%
25 mil 70%
50 mil – 80%
100 mi – 90%
1 billion — 99%

Add a Robin Hood tax of .5% on all financial trades above 10K
Increasing to 1% on all trades above 250K.

Raise Capital Gains taxes to 40% on all net gains above 250K
Raise CG taxes to 50% on all net gains above 1 mil
Raise CG taxes to 75% on all net gains above 100 mil.

21

bob mcmanus 01.13.14 at 6:55 pm

Again, it seems silly to advocate for tax hikes without first defining priorities for the spending.

If I remember the justifications for the big income tax rate increases (I’m remembering four):

1) to replace tariffs (1913) and pay for WWI (1918)
2) basically fairness in 1932
3) to pay for WWII
4) Withholding in mid-80s
5) 1991-93 to reduce the deficit

US Taxation History

IOW, not targeted to specific spending, or for specific programs, but generally to increase the pool of common goods and gov’t income for spending to be determined later by democratic process

b) I think the best bet is for economists to work with the Piketty book or the Kaleckian profit equations and try to push the message that “tax increases create jobs and cause economic growth.” Something I think is empirically and theoretically true. I don’t think there is even a limit. Taxing at 100% and mailing checks back the same day will create tax-collecting jobs (etc) that finance themselves with increased aggregate demand.

c) Romer and Romer wrote a very pernicious paper.

22

hix 01.13.14 at 7:05 pm

Are catholics really Republicans? Whats the religious leaning of Democrats then. It cant be secular alone, the US is to religious to win any election like that and catholics are the kind of marginal minority that should be part of the big Democrats everyone beyond anglo-saxon mainstream camp no?

23

JW Mason 01.13.14 at 7:08 pm

Re taxes and public goods, I was interested to learn recently that Wicksell believed that in a democratic society, any new public expenditure, plus the required taxation, should require unanimous approval.

Sounds crazy, but it’s a logical extension of the Pareto principle to public goods — if a project offers net social benefit, then it must be possible to distribute the associated costs in such a way that every individual is better off. More relevant to this discussion: Wicksell, who was somewhere on the left politically, used as one of his main arguments for this proposal the idea that it would give working-class citizens a veto over wasteful military expenditure.

24

bob mcmanus 01.13.14 at 7:09 pm

Here’s the Wiki article on the history Estate Tax in US, roughly starting in progressive era

You can scroll down to “arguments in favor.” No mention of how it is to be spent.

Gov’ts “tax and spend” in that order. First we decide how big the commons should be, based on national wealth, income, and distribution and then after taxation, we decide how to spread government around.

25

TM 01.13.14 at 7:09 pm

The claim that Americans are averse to tax increases no matter what is an urban legend that keeps being repeated by hapless journalists and pundits. Arkansans, supposed to be the poster child of anti-tax sentiment, recently voted, by referendum, for raising the sales tax to pay for road maintenance. What is true is that there cannot be any kind of rational conversation about fair taxes in this country and that is due of course to pig money interests like Grover Norquist’s organization but also due to the incompetence of Democrats. In the Arkansas case, Democrats (then still in the majority) were willing to go along with the sales tax increase benefiting mainly the trucking industry, only to then be attacked by Republicans (who also went along with the sales tax) as the party of taxes. When you behave like a caricature, it makes it that much easier to be caricatured. Democrats could have insisted that those who actually cause the damage pay for the road maintenance but that would have required a minimum of backbone, which simply is nowhere to be found in that party. Republicans, I am sorry to say, have that backbone and that’s the difference, not the alleged anti-tax sentiment of the public.

26

Trader Joe 01.13.14 at 7:10 pm

@20 plume

When you count the phaseout of deductions, state taxes and the medicare surtax – nearly all income above about 500K is being taxed at 50% or more.

Yes, I understand that there are loopholes and other such tax structures that make the paid rate much lower, but this should be solved by simplfying the tax code – rather than the blunt instrument of rates. Rates alone simply drive more complex strategizing and rarely deliver the full benefit.

I expect with the combination of tax simplification and a relatively small bump in actual rates you wouldn’t really need the tax progressivity that the balance of your table implies.

27

mpowell 01.13.14 at 7:24 pm

Plume @ 40: Are you aware that the federal tax rate for income over $400K is now 39.6%? And that doesn’t include that additional 2.35% those earners will be paying in medicare or state/local income taxes. Higher brackets are an interesting proposal, but taxes on earned income in the US for higher earners are not really that low. Certain kinds of income can be hidden through a variety of legal tricks and this occurs at many different spots on the distribution (though most famously with hedge funds), but that’s not a marginal rate problem.

28

Marc 01.13.14 at 7:26 pm

@20: I’d note that the old tax code looked a lot like what you’re advocating, with the very high tax rates associated with very high marginal incomes. However, I’m questioning something much more basic: the idea that only the wealthy should be asked to pay more. There are certainly grounds for a progressive increase. But people making less also have a stake in the services that government can provide, and they can also contribute.

I vote for school levies and for candidates who advocate more public spending. I’d like to see a more robust safety net; affordable access to community colleges and state universities; much more R&D for things like renewable energy. These things are not free, and they are not gifts to be extracted as tribute from the wealthy. We can all pay for them – more if we make more, but these are things that we do collectively. I view it as a real problem if we make paying for public services a taboo thing.

29

Plume 01.13.14 at 7:44 pm

Yes, taxes on the rich are extremely low, effectively, and as a percentage. Extremely low in comparison with our own history, and side by side with the majority of the OECD nations. Very, very low.

America is nearly the most business-friendly and wealth-friendly of all the OECD nations — as far as taxes and regulations go. We have long been overly generous to our business owners and our wealthy in general. It’s not really debatable.

As for the old line, “Don’t raise rates, just simplify the tax code.” Well, we can do both. The conservative pitch is to do one, not both.

In short, we need to add tax brackets to come in line with what people actually make, and eliminate the potential for hiding monies, etc. Both. Not either/or.

As for making the working poor and the middle class pay more, too. Why? Inequality has skyrocketed, and the tax code is one of the best tools to undo much of that, short of dumping the whole system, which I favor. And it is also the case that we spend far, far more public funds on the wealthy and business interests than the working poor and middle class. It’s not even close.

Money spent on infrastructure, wars, keeping the shipping lanes open, R and D, the courts, protection of private property, etc. etc. . . . . is wildly in favor of the rich, and even moreso for the ultra-rich. And our school funding is based primarily on property taxes, which, again, means more money spent for rich kids than everyone else.

We have an obscenely unequal society. If we try to even out the tax bite, we only increase that inequality. We need to do the opposite.

30

Plume 01.13.14 at 7:55 pm

Another advantage of taxing the rich more:

Encourages investment in production, instead of bubbles/speculation.

Tax ownership at much higher levels, including capital gains, and you encourage reinvestment in workers and production overall. Our massive, deep reduction in taxation at the top coincides with a declining middle class, lower rank and file wages, heavy job losses, more bubbles bursting, etc. etc. And the economy overall performed much better when tax rates were much higher at the top.

Trickle down — which both parties embrace — has been an abject failure, based on a godawful lie.

31

Lee A. Arnold 01.13.14 at 8:07 pm

There have been a handful of studies that attempt to calculate the total tax rates for each quintile, including U.S. federal, state and local taxes, user fees, etc. It’s difficult, but it looks like the total tax rate is nearly flat, for the four upper quintiles.

32

JW Mason 01.13.14 at 8:16 pm

I recall back in 2003, in the wake of the last recession, New York state was facing a major budget shortfall. The legislature, including the Republican-controlled state Senate, passed a substantial and highly progressive income tax hike, over the governor’s veto. There were also significant sales tax increases at both the state and county level.

In that context, it was widely predicted that voters would be unwilling to approve the substantial additional property taxes for their school districts. I distinctly recall some early headlines — clearly written before the results came in — about voters rejecting school budgets in protest against tax increases. But in fact? 94 percent of school budgets were approved that year, close to a record.

33

Peter K. 01.13.14 at 8:25 pm

I pretty much agree with Lee Arnold @ 9. The Republicans are cocooning. The financial crisis and the election of Obama helped to create the astro-trufish Tea Party. Recent examples include the 2012 Republican primary and the government shutdown/debt ceiling clown show. What they have going for them is money and its influence in state politics, not to mention minority blocking maneuvers like the filibuster. Chief Justice Roberts has been fighting a rearguard action also.

Interesting that the Democrats pushed back by reforming the filibuster. (Also a bit of trivia: Golden Globe Award nominee Julia Louis-Dreyfus had her Vice President character push filibuster on the show Veep.)

34

Layman 01.13.14 at 8:42 pm

@27

” Overall effective Federal tax rates on the top 0.01 percent of earners have declined from about 70% in 1960 to about 35% in 2005, while effective rates for the middle class (the middle three quintiles) have remained constant over the same period.”

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates

Put another way, the tax cuts have all gone to the wealthy.

35

Metatone 01.13.14 at 8:43 pm

@9 Lee A. Arnold – that Luntz article was very interesting reading. It was kind of stark how someone who does (in some sense) spend a lot of time listening to “ordinary voters” can’t hear their actual problems…

36

Mao Cheng Ji 01.13.14 at 8:58 pm

Super-rich don’t pay taxes, but I don’t think this is US-specific. It’s just that super-rich don’t pay taxes. Or maybe in Russia they do, after the Khodorkovsky’s precedent, I don’t know. But that would be an exception.

37

Plume 01.13.14 at 9:12 pm

Mao Cheng 36,

True. But there has been a change in recent years. It used to be that the super-rich skated on their taxes but seemed to feel guilty enough to at least not brag about it. More and more, we’re hearing from billionaires who actually think they shouldn’t pay any taxes, because of the wonderful things they do for society. I read an article with one billionaire saying we should actually pay him to exist in this world, along with his fat cat friends, because they’re all so awesome.

It’s scary how much influence a truly odious person such as Ayn Rand wields from the grave. Not far behind her, the Ron Pauls, Von Mises, Murray Rothbards and company.

Despicable folk.

Of course, reading about the classical political economists tells us where they got a lot of that from. The way that Adam Smith, Steuart, Malthus, Nassau William Senior, Mill and Hume, etc. talked about the “peasants” and their “indolence,” it’s not hard to find the narrative line.

38

Walt 01.13.14 at 9:17 pm

That Luntz article is striking reading. The fact that Luntz is unable to understand the message the polls are telling him is a remarkable statement on how far out from reality the Republicans have become.

39

Ed Herdman 01.13.14 at 9:44 pm

Democrats are poorer than Republicans, by and large, so I wonder what John Quiggin is referring to there. Maybe he means there are some party stalwarts who are wealthy – I wouldn’t call them the “base,” by a traditional definition, but certainly a key part of the base. But you still get to the same point by just invoking the wealth of your average lawmaker ensconced in Capitol Hill – they certainly vote the interests of the wealthy, as a group, even where public polling would suggest political gains from doing otherwise.

So the world churns.

40

John Quiggin 01.13.14 at 10:49 pm

@Adam.Smith Bartlett is now well to the left of Obama, as is Lind. More to the point, what matters to the argument of the post is that all these people are now to the left of the entire Republican party, which means that they can’t be regarded as Republican intellectuals, even reformist Republican intellectuals.

@Ed H Reread the post: I’m talking about Douthat’s position, which I describe as a caricature

41

Peter K. 01.13.14 at 11:22 pm

Quiggin is right about Douthat. In my mind he and Brooks are being challenged to rationalize the right’s lunacy. It’s like their standing on two logs in a lake as the logs drift apart. They need to choose a log or fall into the water. The thing that keeps them going is their antipathy towards liberalism and the left and the desire to troll them. So there are two conflicting forces.

They want to champion morality and be able lecture people about it (about weed or abortions or gay marriage) and yet the libertarian tea baggy right is amoral. They don’t even want government to work at all! What kind of ethics is “might makes right”?

And the one popular governor who isn’t reflexively anti-Obama and accepted Medicaid funds acts like a “big government” bully. Will Brooks and Douthat discuss Christie?

42

Layman 01.13.14 at 11:26 pm

@28

People in the lower quintiles already do contribute. Everyone who works pays payroll taxes, to fund Social Security and Medicare. These taxes are regressive in nature, and the one for SS especially so since there is a cap on how much income is taxed.

Conservatives like to claim that their tax-cutting benefited the middle class and the poor, but the reality is that the lion’s share of the tax cuts went to the wealthy. Middle-class effective tax rates today are not lower than they have been historically, while those at the top of the income quintile are enjoying huge reductions in effective tax rates.

43

dn 01.14.14 at 12:51 am

Hix @22 – As I understand it, self-identified Catholics in the US skew Democratic; the more devoted they get, though, the more conservative they become. Regular attendance at Mass is a fairly strong predictor of partisan tilt among Catholics – a Republican tendency is prevalent among those who go to Mass at least once a week, a Democratic tendency among those who attend less frequently. This should be totally unsurprising, as it mirrors the general population: although most Americans are not avowedly secular or atheistic, the average American Christian’s politics tend to correlate not with professed sectarian ID but with actual Sunday morning habits (which are a better proxy for religious dogmatism in practice – you’re more likely to show up regularly if you actually believe your salvation depends on it).

Democrats also have strong support from non-Christian religious groups (particularly Jews, of course, but also Muslims since 9/11 – the latter went strongly for Bush in 2000 but abandoned the GOP after they found themselves unwelcome among the party’s white Christian base). The ugliness of the GOP’s racial politics drives black and Latino Christians into the Democratic party as well; it’s actually fairly common to see right-wing commentators gnashing their teeth over their party’s inability to attract conservative black churchgoers, completely unable to see just what it is that drives them away.

44

Matt 01.14.14 at 12:52 am

Douthat is not a policy guy, not really a thinker at all. He’s a feeler: his affiliation with the GOP is dressed up white nationalism (notice the way he uses the term “working class), and he feels his way towards interpreting any given cultural or political detail in those terms. Accordingly, he can never switch sides, given the pretty clear divide between the two parties on ‘the race question.’

45

Ed Herdman 01.14.14 at 1:36 am

@ John Quiggin: Done, you’re right, it’s not unclear there. Still, I don’t think it hurts to make more explicit that it is untrue “political wisdom” that the Democratic base is rich (or that the richest people in the country are Democrats, which is a similar-but-also-wrong trope).

46

Belle Waring 01.14.14 at 4:43 am

14: I’m kind of embarrassed now, because I thought that was about weed…reading my dad’s complete collection of The Fabulous Furry Franklin Brothers lied to me, apparently. Not about Thai stick, though, I was always like ‘Thai stick what the hell? Maybe it’s weed satay?!’ but then I finally went to Thailand when I was 24. Ooooooh. It was like that. Right.
re: tax rates, my grandfather, like many elderly people, was able to decide when to die. Not that it was entirely under his control, but he was at home under hospice care for many months, with round-the-clock caretakers and family members, and his extraordinarily faithful dog Dexter, who would not only sit at his feet while he sat in his leather recliner and watched the Yankees, but follow him to the bathroom 12 feet away, wait outside the door, and come back. (My grandfather, a life-long New Yorker, was morally permitted to be a Yankees fan. He was born in the Southampton Hospital. No backsies. One did have to root for the Yankees while watching games with him which was painful.) In any case, we were happy he was alive for one more Thanksgiving, and he might very well have died before Christmas, but hung on into the New Year and after his birthday in February for the year that the estate tax zeroed out for poor-policy-making reasons on the Bush administration’s part. Yes. On purpose. To do everyone a solid, or tell the government to fuck off or something. One occasionally hears rhetoric about euthanasia or the like from overheated estate tax opponents, but damn, this was like… I have what is commonly known as a ‘metric fuckton’ of cousins and did not get a free million dollars or anything, to be clear, but there was a strange effect when what money I did get went under the fat 0% line on the tax form. What even? The Bushies did it for bogus deficit accounting reasons but then it was really for real for a whole goddamn year. Some people must have made mad bank. Mad! The Obama remedy was not super-remedial, I think, effecting only estates over 3 mil? My tax attorney here teases me for being her least complaining (if also least on-the-ball) client. (The US taxes income earned abroad, like no other country in the world does.) I always tell her it’s because I support strong social services but she just laughs at me. I take it her daily, continuous interactions with the IRS don’t give her confidence that that’s how things are working out.

47

js. 01.14.14 at 5:47 am

I think Marc above makes a good point. Taking nothing away from the way in which the current tax regime benefits the ultra-rich at the expense of pretty much everyone else (and much much more so those below the upper middle class), there is something quite good about an overall high tax regime (which thereby would also levy high-ish taxes on the middle classes) undergirded by a very robust social service-providing state. Obviously, this right now seems rather pipe dreamish in the US. But in principle, it seems not bad at all. Also, isn’t this supposed to be how at least some Scandinavian countries work?

(I think this is what Marc was getting at. Apologies if I’m misrepresenting.)

48

Plume 01.14.14 at 6:21 am

js. 47,

Yes, the Scandinavian countries have higher taxes all around, much better services, such as free college, universal health care, etc. etc. They have higher social mobility than America as well, and less inequality. Longer, healthier lives, too. And they consistently see themselves as “happy,” whereas Americans typically score down on that metric.

It’s a bit easier to rationalize a less progressive tax system, if the society is less unequal. Right now in America, we have inequality at all time highs, corporate profits at all time highs, the concentration of wealth at the top at all time highs, while the percentage of GDP going toward rank and file wages (instead of profit) is at an all time low.

It’s not the time for a less progressive tax system. It’s the time for much more radical progressivity.

And, again, in America, our economic performance has always been better when taxes were high at the top. We seem to fall into recessions and depressions when rates are dropped. It encourages bubbles and speculation for one thing, and when money is hoarded at the top, demand falls overall. The rich are the least efficient generators of economic activity — the poor, working poor, working class being the most, etc.

49

Collin Street 01.14.14 at 6:40 am

People in the lower quintiles already do contribute. Everyone who works pays payroll taxes, to fund Social Security and Medicare. These taxes are regressive in nature, and the one for SS especially so since there is a cap on how much income is taxed.

Also, you know, they contribute through agreeing to and supporting that whole “private property” thing.

50

Mao Cheng Ji 01.14.14 at 7:39 am

@47 “Taking nothing away from the way in which the current tax regime benefits the ultra-rich at the expense of pretty much everyone else (and much much more so those below the upper middle class), there is something quite good about an overall high tax regime (which thereby would also levy high-ish taxes on the middle classes) undergirded by a very robust social service-providing state. Obviously, this right now seems rather pipe dreamish in the US. “

I think I know exactly what that ‘something’ is. It’s quite good for your feudal overlords, for the top 1%, who already accumulated $17 trillion worth of wealth, and keep going.

In the old days one working person could feed the family. Then it had to be two. And now two is not quite enough. That’s troublesome. If I am a billionaire, redistributing from better to do serfs to the staving ones sounds like the perfect solution. I’m certainly for it. Therefore, it’s not “pipe dreamish” at all; sounds like this is one solution that makes everybody happy.

51

Jacob McM 01.14.14 at 9:10 am

Can we stop throwing around serious accusations like “white nationalist” unless they’re justified? There are many many things wrong with Ross Douthat, but I’ve never gotten the impression he was sympathetic to white nationalism in any deep or meaningful sense. Words like “racist” and “fascist” have already been devalued thanks to their overuse; we don’t need to add more terms to that pile.

In addition to rendering the terms meaningless and impotent, the danger here is that people might start thinking along the lines of “Ross Douthat is a mainstream conservative columnist > Ross Douthat is supposedly a white nationalist > therefore, white nationalism is a mainstream and respectable option.”

52

que_es 01.14.14 at 10:50 am

Belle @46

Some people must have made mad bank. Mad!
Yes, and Yankees you say? George Steinbrenner died in that year of zero estate tax: 2010.

53

que_es 01.14.14 at 12:54 pm

Oops. Only the first line in the above comment was meant to be italicized. But one more point. Beginning in 2014, a taxpayer’s combined gifts and estate (at death) must exceed $5.34 million ($10.68 million for a married couple) in order to be subject to the federal Estate and Gift taxes. Those taxes now apply to far fewer than 1% of Americans.

54

Matt 01.14.14 at 1:58 pm

White nationalism, by various names, has been a mainstream and respectable option since our nation’s founding.

55

Mao Cheng Ji 01.14.14 at 2:51 pm

“dressed up white nationalism (notice the way he uses the term “working class), and he feels his way towards interpreting any given cultural or political detail in those terms. “

I got curious about the way he uses the term “working class” and I read the stupid NYT piece. But “working class” wasn’t there; “working class” is from JQ’s post. Am I missing something? If not, you owe me for wasting 3 minutes of my life.

56

mds 01.14.14 at 3:39 pm

Bartlett is now well to the left of Obama

Do you have any concrete examples of that? “Well to the left of policies that could make it through the Senate” might be more likely, given his acknowledgement of the administration’s difficulties with their stimulus package, but some illustrations would still be helpful.

57

Marc 01.14.14 at 4:33 pm

@47 Thanks, that was what I was getting at. I don’t see why the threshold for tax increases has to be set at 400 K income instead of 100 K, 150 K, 250 K ,etc. I agree with progressive taxation, but we’re playing into the games of the right by insisting that taxation is so toxic that it can’t be thought of as reasonable and desirable for even the upper middle class and the well-to-do (top 5% = 188K; 10% = 140K).

58

mpowell 01.14.14 at 5:17 pm

I’m looking at this table: http://www.econlib.org/library/Enc/MarginalTaxRates.html

And I know that the medicare/state income taxes for the US are not on there which bring a lot of filers above 50% marginal rates. Those are not out of line with western europe at all (or swedes, norway, etc). Am I missing something? Are there additional income taxes similar to medicare/state/local in the US that should be included? And note, I am talking about marginal tax rates. I don’t want to hear about overall average rates.

59

Lee A. Arnold 01.14.14 at 5:33 pm

I wonder whether the policy accent on marginal rates, over the last few decades, has been justified by the poor growth results. I can understand the logic that it would encourage rich investors to switch from one country to another, thus starting a beggar-thy-neighbor effect. But that would be more of a phenomenon of capital flight (and the resulting bubbles) rather than a confirmation of all the backboard equations that claimed it would be a good idea for solid growth.

60

John Quiggin 01.14.14 at 6:48 pm

“And note, I am talking about marginal tax rates. “

Effective marginal tax rates are typically much higher on low income earners facing benefit withdrawal. Rates of 60 to 70 per cent are common

http://www.urban.org/publications/1000117.html

So, if high marginal rates worry you, shifting the burden to high income earners is definitely the way to go.

61

Layman 01.14.14 at 7:11 pm

@mpowell,

If you’re going to add state and payroll taxes to the US top marginal rate (39%) to make it ‘not out of line with’ France (50%), you should probably also add VAT to the France number to be fair. I think you’ll find that the US rate is actually out of line with Western Europe.

62

Layman 01.14.14 at 7:14 pm

@Marc

Because the problem is income & wealth inequality driven in a large part by a multiple decade program of cutting taxes, largely for the benefit of high income people. If you want to reverse that, raising taxes on those with moderate incomes doesn’t make much sense.

63

js. 01.14.14 at 7:16 pm

I think I know exactly what that ‘something’ is. It’s quite good for your feudal overlords, for the top 1%, who already accumulated $17 trillion worth of wealth, and keep going.

Are you trolling, or are you actually this dumb?

64

js. 01.14.14 at 7:20 pm

And, again, in America, our economic performance has always been better when taxes were high at the top. We seem to fall into recessions and depressions when rates are dropped.

There’s no disagreement here. The question is whether at the same time it makes sense to try and normalize the idea that higher tax rates for the middle classes as well (again, much higher effective rates for the rich being treated as a given) are not necessarily bad, assuming that the state is delivering much more robust social services that these very classes (and also to those poorer).

65

bt 01.14.14 at 7:50 pm

I recall reading, but don’t remember where, that the high taxes after WW2 were combined with a lot of deductions that were designed to take ‘idle capital’ and to sort of force it into the economy. In order to get the deductions you had to ‘do things’, put up buildings, start companies and so on. And then you would have more employment, etc.

This was done, so I read, to force money out of mattresses / bank accounts and passive investments, and this we seen as an solution to the problem that a lot of people had been sitting on their money after the great depression, and the economy had a lot of idle capacity and slack demand.

Does anyone have any insight on this, is it even true?

There are some parallels in today’s economy with the wealthy more or less sitting on giant piles of cash, looking for safe, passive investments and creating one speculative bubble after another, and seemingly finding no good use for their cash. That’s what all these corporate stock buybacks indicate – When Apple spends cash to buy its stock back, that is like saying they cannot find any good productive use for the cash they have (god forbid anyone would get a raise).

66

bob mcmanus 01.14.14 at 9:54 pm

This was done, so I read, to force money out of mattresses / bank accounts and passive investments

Wearing my non-marxist hat:

Inflation also ran from 9.4% in July 1946 to to 8.9% in August 1948, with numbers over 15% much of the time. The Fed also ran double-digit inflation in 1942.

Read article today about the Fed following the Taylor rule but couldn’t achieve -3.0 rates, and the author was just terrified of inflation hitting 5%, so he concluded there was nothing to be done.

I think as far back as Smith versus Bentham, that capitalist saving and speculation has always been considered the problem. I believe Keynes and especially Kalecki emphasized it.

As a Kaleckian, I cringe at “underconsumption” or “deficient aggregate demand”

Workers consume their wages. If there is inadequate commodity consumption, that really means wages and wage share are too low.

Government pays for itself if it has to, see MMT or Chartalism.

Aggregate demand is worker consumption + fixed capital investment + and capitalist consumption. Since the first two essentially pay for themselves over the medium term, a shortfall in aggregate demand is entirely due to capitalist savings, i.e., finance and fictitious capital.

Wearing my social democratic hat, one main economic purpose of government is to force capital to “use it or lose it.” Instead of rewarding savings, I would tax them until they completely disappeared.

My Marxist half says, with mountains of evidence, that it won’t and likely can’t happen.

67

John Quiggin 01.14.14 at 10:47 pm

@62 Bear in mind that however you define “moderate” and “rich”, raising marginal tax rates for those on moderate incomes also increases total tax paid by the rich. Conversely,if you want those on high incomes to pay substantially more, you need to raise the marginal rate on a substantial part of their income, which means that the threshold has to be somewhere in the moderate range.

As an example, raising the marginal tax on incomes above $400 000 by 10 per cent only gets an extra $5k from someone on $450k (and nothing from someone on $400k). If the higher rate cuts in at $150k, the corresponding numbers are $30k and $25k.

68

Plume 01.14.14 at 11:11 pm

@bob mcmanus 66.

Put that Marxist hat back on for a moment, por favor.

We’re in a trap. A demand trap. And an ecological trap. Created by capitalism in the first place. It’s a bit like a drug pusher who gets everyone hooked but then can’t keep up the supply of drugs anymore.

As in, prior to capitalism, people were fine with much less, doing their own self-provisioning, growing their own food, supplementing that with hunting, fishing, small commodity production in the home, etc. The nascent capitalist movement realized this wasn’t going to do at all. Not only did they have to stop people from self-sufficiency and independence, so they would go to work in the factories; they had to convince them that they needed X new product and Y and Z (luxuries and comforts), so they’d go into the factories to pay for things they didn’t even realize they “needed” before. Cough cough.

The Perelman book talks about how the Irish weren’t too amenable to that for a long time, holding out against all those things they were being told they needed, and holding out from working for others in the face of endless accusations of indolence, etc. etc.

So the British did their best to prevent or destroy small farms, or letting of small plots, hunting and fishing by anyone but the rich, as they created more scarcity by exporting necessary food and other produce from Ireland to England.

Today, we lack “demand” because wages are too low for the rank and file. But we never should have allowed that trap in the first place. We can’t downsize and cut back on consumption now (in the aggregate), or the economy will collapse again and throw workers out into the streets. But we need to cut back on consumption and downsize because we can’t afford what we have right now and we can’t afford it ecologically.

Damned if we do, damned if we don’t.

If we make it out of this mess, I suspect future historians will look back and say, “The catastrophe of capitalism was one of the biggest missteps in our evolution from hunter gatherers to our current steady-state communalism. We lost several centuries in the quest for equality, justice and synergy with the planet, and lost a host of species we can never get back. It’s amazing that it took so long for the populace to wake up to the disaster under their noses.”

69

Matt 01.15.14 at 12:21 am

MCJ: I meant throughout his ouvre.

70

Lee A. Arnold 01.15.14 at 2:26 am

I think it is more likely that the ecological crisis was NOT caused by capitalism, although some capitalist techniques have accelerated it, and it appears to me that reducing inequality, by some amelioration of the capitalist logic, is a necessary part of the current solution to the ecological crisis. But it is easy to imagine a socialist system causing the same crisis.

That is because the real causes are population growth; pride, greed, & fear; ignorance of complex-systems dynamics; and perhaps the inability of most people to reason synthetically, which is very difficult to do properly, and is fraught with mistakes and embarrassments.

Widespread acceptance of the reality of the ecological crisis and the need to do something about it is very new. It is hard to find many examples of widespread, mainstream environmental thinking before the 1970’s, and that was just 40 years ago. Before then, there were conservation efforts for national parks and anti-litter campaigns. Then came the clean air and water acts, toxics inventories, etc.

Now we are moving quickly into awareness of our disastrous effects upon some basic biogeochemical cycles (carbon of course, but also nitrogen). The problem here is that the solutions are not easy, due to petro-based technological paths since the late 19th century, such as automotive vehicles and nitrogen fertilizers which have been hugely productive as long as we could ignore the downside.

Again, it is ignorance, and they would have been pursued under socialism.

Meanwhile part of the solution may come from private individual initiatives to develop other technologies, spurred on by personal and social ecological awareness, and enabled by government seed money. So capitalism is likely to be part of the solution.

71

Medoc 01.15.14 at 3:59 am

Re #8: “Go big or go home. You haven’t for a long, long time, which is why I voted for Jill Stein.”

Reminds one of the election of 2000 and the votes cast for Ralph Nader….. and of course the ensuing 8 years. Hard to beat the observation of Abraham Lincoln: ” Better to Remain Silent and Be Thought a Fool than to Speak and Remove All Doubt “

72

Plume 01.15.14 at 5:59 am

Lee A. Arnold 70,

Yes, it’s capitalism. Obviously. First off, no capitalism, no Industrial Revolution. At least not when it happened — if ever. Before capitalism, the economic system was tied to the land, land-based, primarily agricultural. Primitive accumulation, which was necessary for the transition to and expansion of capitalism, kicked people off their land and transformed us into industrial economies, centered in cities and away from agro. And where agro pollutes, capitalism exacerbated that as well, by initially destroying small farms and the letting of farms to small farmers. This led to factory farming, as well as migration to the cities.

Beyond that, capitalism is the first economic system in history to require a massive expansion in manufactured goods, global exports, ever increasing consumption, and ever increasing use of natural resources for production. It is the first to change completely over from “use value” to “exchange value.” Things were no longer made to order, on a small scale, for local populations. They were made, instead, to fill shelves across the globe and show a surfeit, a cornucopia of choices to consumers. Which led to massive waste.

No prior system created even a fraction of a fraction as much waste or pollution.

The logic of capitalism itself, its internal logic, its mechanics, leads to more. More. And more. There is never enough. More consumption, production, consumption, production, waste, pollution, waste and more waste. Previous systems were based upon “enough.” Make what you need, make it last, make only what you need and do that yourself as much as possible.

Honestly, I can’t see how anyone could possibly NOT get this about capitalism and its effects. To me, it’s just so blatantly obvious, it shouldn’t need repeating.

73

Plume 01.15.14 at 6:13 am

@Medoc 71,

Yes, your post does make one think of Lincoln’s adage.

Can’t blame Nader for Bush stealing the election with the help of the Supreme Court. Nor can you blame Nader for Clinton’s impact on Gore’s chances. Had he not had his scandal, had he not sold out with NAFTA, Glass-Steagall and his all too corporate-friendly economic policies, Gore would likely have won easily. On top of that, Gore was terrible in the debates, despite his greater intelligence and experience, and was soundly whipped by the mediocre Bush.

Beyond that, calling someone a fool for voting for Nader, as if we could all know the hell Bush would create? As if we knew that would lead to a Bush victory in the first place? We don’t get to take a trip into the future before we cast our votes.

And, sorry, but I’m sick and tired of voting for the less rotten of two rotten choices. I’m sick and tired of having little choice between the center-right Dems and the hard-right Republicans. Stein is an actual leftist, like me — though in many ways I’m to her left — and I can get behind the things she stands for. The Dems? No. Other than the fact they’re not as rotten as the Republicans.

Perhaps if Americans stopped voting LOTE, the Dems would get the message and stop trying to be Republican Lite. Perhaps if enough people vote principle over political expedience, we might just change things.

The real fools on those who keep pulling the lever for the Dems in hopes that they might just grow spines. That train left the station a long time ago.

74

Lee A. Arnold 01.15.14 at 4:00 pm

Yes, the “closing of the commons” (Adam Smith’s “primitive accumulation”) had (and still has) ecological effects. Yes, the clearance of the remaining rainforests in Sumatra, happening right this minute, is for the basest of economic reasons.

But wait: the extinction of the megafauna on all continents 12,000 years ago, by hunting/disease/climate change, did NOT cause the ecological crisis, by driving the humans into agriculture for food? Or, the resulting Agricultural Revolution 12,000 years ago did not start the ecological crisis, by clearing wildlands and promoting human population growth? Or, Western Christianity did not start the ecological crisis, by separating God from the creation, and putting the rewards for sinners not in this world, but in the next? (So you can do what you want, to this world?) Or, the Scientific Revolution, from Bacon through the remainder of the 17th and 18th centuries, did not start the ecological crisis, by institutionalizing the manipulation of nature, and directly setting up the necessary mindset for the Industrial Revolution?

“Honestly, I can’t see how anyone could possibly NOT get” that capitalism did NOT create the ecological crisis.

Capitalism is a symptom of the ecological crisis; it is a description of part of the ecological crisis, not its cause. The primary ur-text on this is still Lynn White Jr., “The Historical Roots of Our Ecological Crisis” (1967).
http://www.uvm.edu/~gflomenh/ENV-NGO-PA395/articles/Lynn-White.pdf
And there has been a lot more written since then.

To think ecologically you have to think synthetically as well as systematically. “Capitalism” doesn’t begin to cover the problem.

It is important to get this right, because, in order to move the entire economic system to the Kaleckian position on the economy (which really isn’t that large a move), it is ABSOLUTELY NECESSARY to vote for the lesser of two evils; then, not to stop there, but to push that stupid lesser evil in the correct direction. It is all we’ve got, right now.

For example, it is absolutely vital to vote for Democrats to keep the healthcare reform in place. Why? Because its logic will transform it rather quickly into a non-profit system. And why is that important? Not only to get everyone eventually covered, and to reduce the costs of healthcare: It will also change the public preference on other things, and defeat a pernicious belief that private capitalism must be pure and free. In other words, it also shows to more people a little bit more of what is going on, and changes their ideas and expectations about how to deal with the future, in other ways. And that is very important for dealing with the ecological crisis.

The question is not, whether we can change, but whether we will change FAST enough. As usual with humans, fear may be a primary motivator. People do not seem to know that many of the world’s basic food crops are at the limit of their productivity with regard to hot days. If greater heatwaves start to reduce crop productivity, then people are going to fear the loss of the food supply. If there are sudden heat spikes, there may be a violent panic. This could come a lot sooner than most people (even apparently many climatologists) realize. Like in 10 or 20 years?

75

Plume 01.15.14 at 6:06 pm

12,000 years ago? The agricultural revolution? Come on. This, of course, was isolated and sporadic for some time, centered primarily in the Fertile Crescent region. Its impact on the environment was less than negligible, given the population of the time, what was done, and the added benefit to the environment of additional plants and such. And until capitalism, there was no incentive to go big, to go factory-sized farming, and no incentive to buy stocks in this and make a global phenomenon.

Profit incentivizes over-production and massive waste, plus short cuts, poor resource management, pollution, etc. Get what you can now!! Again, you’re no longer growing the food you need. You’re growing the food you want in order to make profits. And if the company is owned from a distance — a phenomenon that exploded under capitalism — local impact is all but dismissed. You’re in New York, at corporate HQ, and you’re not going to care about the environmental impact in Costa Rica, etc.

I definitely agree with you about Christianity’s separation of god from creation, but you’d have to include Judaism in that as well. It was basically a death-knell for the earth, to write in “sacred” texts that man has dominion over it all, and that there is no divinity in nature, but only above it, etc.. But it’s a factor, not an economic system, and it took capitalism to fully focus and direct that deadly severance.

The Scientific Revolution? A tool used by capitalism, which no previous economic system could utilize to its extent. Not even close. Capitalism took everything global, destroyed the local, created a massive gap between ownership and worker, ownership and consumer, ownership and the earth. No longer were the owners a part of the community they controlled, as a general rule. They lived elsewhere and from a distance could rain down horrible damage on communities across the globe without feeling the slightest twinge of guilt.

Like your mention of the Christian (and Jewish) god being separate, so was the capitalist in his (or her office). At least under Feudalism, the lord of the manor saw the “peasants” every day, and there were unwritten laws going back centuries giving them certain rights, dozens of holidays and the commons — which capitalists complained about bitterly and eventually destroyed. The old saying, Don’t shit where you eat? Capitalism made that all too quaint.

I think you’re failing to see what a fundamentally radical break with the past happened with the rise and eventual dominance of the capitalist system. You’re not alone there. Because we all swim in capitalist soup, and know no other kind, this is an easy mistake to make — one that capitalists always counted on and still do.

76

Plume 01.15.14 at 6:07 pm

Sorry, #75 was in response to Mr Arnold and #74.

77

Marc 01.15.14 at 7:00 pm

@73: Bush did tremendous harm, and there were many factors that made it possible for Bush to get in office. Nader was one of those factors, and if he hadn’t been so reckless we would have avoided a series of catastrophes. Anyone who makes excuses for Nader and what he did, with the benefit of hindsight, is someone who disqualifies themselves from being taken seriously. We did an experiment where a leftist third party tipped an election to the right, and the consequences were horrific. People may not have known that this would have been the case at the time, but we do know now.

78

Plume 01.15.14 at 7:11 pm

Marc 77,

You sound like an authoritarian. Similar to Medoc. “We can’t possibly allow any other parties but the two corporatized money parties inflicting their damage on the American populace!!!”

Sorry, people who think like you “can’t be taken seriously.”

In short, 2000 was an anomaly. You can’t base all future election strategy on what occurred then, and I showed why.

Gore entered the race in the wake of Clinton scandals, and Clinton’s turn to the right, especially on economic matters. Trade. Glass-Steagull, etc. Gore himself was seen as boring, and in the debates, “prissy.” As mentioned, he was clearly the smarter man and had better policy ideas. But too many voters disliked what they saw, which had NOTHING to do with Nader.

Also, and this is key: Without the Supreme Court and Bush family malfeasance, Nader’s run wouldn’t have been even a slight issue. As in, Gore still would have won without Republican political collusion, voter suppression, purging of the voter roles, etc. etc.

And, Gore wimped out in the end. He didn’t push for total recounts. He let it go. He shouldn’t have. The election was clearly stolen.

Again, you can’t project that into the future and use it as a model for Third Party runs. That was then, this is now.

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bt 01.15.14 at 7:48 pm

Here’s the issue with complaining about ‘voting for the lesser of evils': It’s the only choice you have usually.

Just because Al Gore (or Obama) is not perfect, is NOT a reason to abstain, and let the WORSE one get elected. This was the argument of the Nader Voters: “The 2 parties are the same and they are corrupt. Vote for Nader”.

Leaving aside whether Nader cost Gore Florida, when you see how it turned out with Bush, you have to concede that the 2 parties are not the same at all. I’m not asking people to “like” the democrats – remember, the way US elections are set up, a 51% majority vote takes 100% of the office, and there is little room for a 3rd party to ever dent the system. So complain all you want about the democrats, they deserve it! But please people, vote for the lesser evil when the time comes, because when you don’t, the other guy gets the wheel.

My opinion is that liberals need to be more aggressive is at the democrat party level and push there, because it’s the only horse you’ve got. Look what dedication to the cause has done for the conservatives, in terms of them successfully turning the GOP in a direction that they wanted it to go. It always seems that the republicans are really good at setting a course and pounding away on it. Democrats, not so much.

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Plume 01.15.14 at 8:07 pm

bt 79,

I understand what you’re saying, and I appreciate your not adding “you’re a fool if you vote Third Party” or “You’re not to be taken seriously,” as Medoc and Marc did in their respective posts.

That’s no way to persuade others to one’s cause.

That said, I know full well that the Democrats are the better of the two parties. I think that’s abundantly clear. It’s just that the two parties are rotten, and make for rotten choices. So it’s really all about picking the one less rotten, and we should be able to do much better than that — even well shy of what we really need:

An entirely new economic system and real democracy, including the economy.

Plus, as long as people feel the necessity of voting Dem, because the GOP is so much worse, the Dems will continue to take “the base” completely for granted — as Obama has so far. Contrast that with the GOP which seems to be all about their base. Their base scares them into doing its bidding, for the most part. The Dem leadership isn’t afraid of their base in the slightest. They realize that base feels trapped, with nowhere else to go.

So the Dems in power can have it both ways:

1. Sell out to corporate interests, take their money, pay them back.
2. Throw enough crumbs to their various under-served constituencies so that they realize they have no other place to go.

#2 won’t upset those corporate interests in #1.

We can’t change this dynamic by doing the same thing each election. And notice that the Dems have moved further and further rightward over the last thirty to forty years, while “the base” has employed LOTE.

It’s not working.

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Lee A. Arnold 01.15.14 at 11:50 pm

@ Plume #75 — By around 4-5 thousand years ago, agriculture had increased the human numbers enough to populate the ancient empires, which, evidence suggests, suffered many repeated ecological disasters, such as soil erosion and depletion, river pollution, and pest and disease vectors due to loss of local biodiversity. Almost all of the ten plagues sent by God to deliver the Israelites from Pharaoh were ecological events: pestilence, boils, locusts, etc. The logic of environmental disasters started well before capitalism.

On the other hand, it is possible to argue (as many environmental economists have argued) that the profit motive in the market system has directed resource-use to be less wasteful. This has happened, of course, within the umbrella of “efficiency” of the fossil fuels, which, as it turns out, have grave ecological effects.

I think the two greatest ecological disasters of our own time are 1. species extinction and the loss of biological diversity, and 2. global warming. The first is directly related to human population growth and subsequent wildlife-habitat clearance and fragmentation. The second is caused by the use of fossil fuels. It is easy to imagine that capitalism might be doing just fine ecologically, if it weren’t for the increase in human numbers enabled by agriculture, and the use of fossil fuels.

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Lee A. Arnold 01.15.14 at 11:59 pm

I should add — This does not mean that we have to reduce the human numbers for ecological stability. We really do not know that sort of thing. And it could well mean that finance capitalism needs to be reformed to move toward equality for reasons of ecological stability, as well as obviously for social justice. — Just thought I’d add those, because someone always takes the wrong inference.

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Collin Street 01.16.14 at 12:25 am

It is easy to imagine that capitalism might be doing just fine ecologically, if it weren’t for the increase in human numbers enabled by agriculture, and the use of fossil fuels.

Could you sketch for me the sort of physical and cultural constraints that might make a capitalist polity stably refrain from both agriculture and the use of fossil fuels? I don’t see a path to the situation you describe [from any starting point I can imagine], and I don’t see a path keeping things there once they are.

84

Chris Warren 01.16.14 at 12:39 am

What on earth is a:

a wild-eyed socialist,

or is this just the imagination of a eyes-wired-shut Keynsian capitalist?

85

Chris Warren 01.16.14 at 1:20 am

As Bob Mcmanus said above:

I cringe at “underconsumption” or “deficient aggregate demand”

However, I prefer to merely point at underconsumption and encourage people to cringe at the underlying causes of underconsumption – the fact that all final consumption is funded by wage-labour and only balances with production when part of consumption is funded by IOUs.

The amount of IOU’s is now over 200 trillion.

[see: Wall Street Journal at
http://www.tinyurl.com/200-trillion ]

The other problem is the complete and continual impoverishment of wage-labourers since the 1970’s, evidenced by ILO data at: http://archive.is/X5q8b (fig 31.)

All this underpins a complete vindication of the Marxist analysis, despite quibbles from the past from the likes of wealthy Westerners such as Joan Robinson and etc.

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Lee A. Arnold 01.16.14 at 2:07 am

Collin Street #83: “Could you sketch for me the sort of physical and cultural constraints that might make a capitalist polity stably refrain from both agriculture and the use of fossil fuels? I don’t see a path to the situation you describe [from any starting point I can imagine], and I don’t see a path keeping things there once they are.”

I was just trying to pose a history of the world that did NOT happen: agriculture developed but did NOT lead to much population growth; a clean energy source was found BEFORE fossil fuels were used; — and so then, capitalism would be fine, ecologically: it is not necessarily the main ecological culprit.

In that alternative timeline, I think capitalism could still be blamed for creating political power and inequality.

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TH 01.16.14 at 2:15 am

“Douthat’s more substantive claim is that the weakness of Obama’s tax policy is not a reflection of Obama’s own preferences but is dictated by the demands of the Democratic Party base. In Douthat’s telling, the base is dominated by socially liberal high-income earners who are absolutely resistant to any increase the taxes they pay.”

Doesn’t that ignore the fact that the eventual, weakened policy was dictated by the Republican-controlled Congress, not the Democrat-controlled White House? And since we know the Republican base to be rather more dominated by high-income earners – both directly and indirectly – that seems to make more sense.

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Marc 01.16.14 at 2:56 am

I don’t think that liberals have to cater to every whim of radicals. A lot of this dialog presumes that liberals are supposed to cheerfully accept accusations from radicals that we’re corrupt sellouts and beg them to support liberal candidates. I disagree; the goals of everyone on the left are not the same, and there is room for legitimate disagreement.

The left coalition is the best place in our current politics for radicals and liberals to advocate for their policies, and despite our disagreements the hard right is very much both a huge threat and fundamentally opposed to both of our interests . Under these circumstances the “both parties are equally corrupt” line is both one that I strongly disagree with and one that I view as deeply destructive. So I’m going to contest it whenever I see it – because I pay attention to what actually happens in this political system and it’s because the stakes are so high. If radicals want to make inroads they need to elect mayors, win primaries, and convince a mass audience that their ideas are worth supporting (this was the reactionary republican route on the other side of the ledger.)

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Plume 01.16.14 at 6:41 am

Marc 87,

Under these circumstances the “both parties are equally corrupt” line is both one that I strongly disagree with and one that I view as deeply destructive. So I’m going to contest it whenever I see it – because I pay attention to what actually happens in this political system and it’s because the stakes are so high.

No one has suggested “both parties are equally corrupt.” Not sure where you’re getting that. I said both parties are rotten and corporatized, but that the Dems were clearly the better party of the two rotten parties. There was no talk of “equality” between them. I don’t see them as equal. But I see both as sorry choices for America, and both support a despicable economic system.

Kind of like a broken arm versus an amputation. Those two things are far from “equal” but they both suck.

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frank 01.16.14 at 2:26 pm

What about Josh Barro? He’s still fighting the good fight, I think.

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Plume 01.16.14 at 6:13 pm

Lee A Arnold,

You and I will obviously never agree on the impact of capitalism. But since you mentioned environmentalists, perhaps that’s one area where you might rethink your stance. It’s safe to say that no environmentalist, unlike he or she works for Exxon, is going to say that capitalism has been a net positive, in any way, shape or form.

For the environment, at least.

They know better. They know that no previous economic system required endless growth as its foundation. Which means more production, more consumption, more use and abuse of natural resources. And, no other previous economic system was based on production tied to the hope of future sales, rather than present day orders due to need, and need alone.

It’s a system that can’t escape from massive waste, if for no other reason than that. Add to this, its basis away from the community, away from local ecosystems, oftentimes thousands of miles away from its impact, and you get the perfect storm of indifference toward environmental impact in the name of profits.

Capitalism has a long, ugly history of exploitation of indigenous peoples for their resources and their forced labor. It turned this into a global machine and perfected it for profits. Massive loss of species life, natural resources and endless toxic dumping ensued and continues to escalate to this day. No other system in our history comes close to the destruction guaranteed under capitalism with its drive for profits and need for more and more and more.

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Lee A. Arnold 01.16.14 at 10:20 pm

Plume #89: “It’s safe to say that no environmentalist, unlike he or she works for Exxon, is going to say that capitalism has been a net positive, in any way, shape or form.”

Garret Hardin: “Sustainable development can be defended because an adult can continue to develop his or her intelligence without any growth in body weight.”

Paul Ehrlich: “A sensible strategy generally combines a mix of free-market and regulatory controls.”

Herman Daly: “In terms of specific economic theory, the paradigm policy for solving the allocation, distribution, and scale problems seems to me to be the tradable permits plan.”

(I don’t happen to agree about tradable permits, because I think they are too easily scammed by vested interests, but Herman Daly’s book Beyond Growth is without question a good book.)

John Muir was in favor of industrial development, as long as much of nature was saved alongside. (I don’t have a quotation from Muir.)

I think the problem is your idea of “endless growth”. There are different kinds of growth in that phrase: growth of population, growth of resource use, growth of paper finance. Let’s take them one at a time:

Global population growth appears to be leveling off by 2050–it may be too many people, but it isn’t “endless”.

Growth of resource use (including energy) can be slowed down and even reversed. Technological innovation might do the same things we want, with much less throughput.

Growth of paper finance is the problem. It has led to the 6-year economic crisis, and of course it is also enabling much ecological devastation. But it is NOT the definition of capitalism.

I take capitalism to mean some system of private initiative rewarded by profit, transacted through price markets. If you create something that uses less energy and less materials, it is usually profitable. If you raise organic crops and people prefer the better taste, it can be profitable. Capitalism should not have to cause more resource throughput.

Thus, destruction is not “guaranteed under capitalism”.

There are also small-scale resource-management forms, as described by Elinor Ostrom. She called them “common-pool resource institutions.” They can work for some site-specific environmental conditions, fisheries, forests, etc. But they cannot work for everything. There are global issues that can only be addressed at the global level.

So, we need: 1. individual profit motive to help reward innovation, 2. intermediate-sized common-pool resource institutions, and 3. global agreements.

That is why we should keep capitalism — and that is the meaning of the quote from Garret Hardin above. A “mixed economic system” is the ONLY way to go.

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Plume 01.16.14 at 10:46 pm

Lee A. Arnold 90,

You shifted the goal posts. Your quotes don’t support the contention that capitalism is actually better for resource use.

Please try again.

As for growth. Capitalism requires that we consumers purchase more and more goods, and more and different kinds of goods. This goes back to the earliest days when classical political economists called for the accelerated purchase of “comforts and luxuries” to make capitalism viable. Those goods are made to fall apart, break, die in order to get us to buy more. Those goods require more and more natural resources to make and more and more environmental destruction with each succeeding production cycle.

Walk into any Walmart or Target, for instance, and take a look at the shelves. Go into any grocery store and take a look at the shelves. Notice the packaging. The individual packaging. Notice the large number of items that won’t be sold. Where do they end up? In garbage heaps, in slums around the world, in various dumps around the globe.

Small items, individually packaged, in order to both provoke another purchase all too soon, and with the consequent waste, pollution and disposability factored in.

In order to make profits for capitalists, this has to go on and on and on, with greater and greater market penetration and share. More consumption, more profits, more production, more consumption, etc. etc. and round and round it goes.

New markets must be discovered, created, exploited. Capitalism collapses if it goes steady-state or shrinks. The whole thing is based upon debt and future sales. If you go steady state, that falls apart. Who is going to invest in something that stays the same or declines? And the only way to offset inflation is with growth and future growth and the prospect of future growth. No one is going to invest capital in something that doesn’t have that potential.

As for innovation. Profit is totally and completely unnecessary for that. The vast majority of innovation/inventions/new tech are the result of public sector R and D, funding and discovery. That includes the Internet, computers, GPS, touch screen tech and the majority of pharma, etc..

Profit is only necessary to attract investment of private funds in innovation, not for innovation itself. Given the fact that the public already bears the bulk of that, yet receives no direct reward for its burden — handing the results over to the private sector — we really should switch entirely to public sector. It’s a twofer. We’re already paying for the externalization of business costs, and businesses get to profit from that. We should keep it all in the commons.

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Lee A. Arnold 01.17.14 at 12:24 am

Plume #93: “Capitalism requires that we consumers purchase more and more goods, and more and different kinds of goods.”

No, you are NOT required to purchase more and more goods, nor are you required to purchase different kinds of goods. And some of the new goods you purchase could do things with LESS energy or less material resources than the old goods. There is no scientific law about this.

There is of course the law of entropy, but that actually says something a little different: It only limits an energy efficiency for a specific constitution of a concrete process. The law of entropy does not rule out the possibility of bettering efficiencies, by using new combinations of materials. Examples are legion: Of course there are many technologies that illustrate this, many social living arrangements that do this, and many, many examples from biological evolution.

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Lee A. Arnold 01.17.14 at 12:26 am

Plume: “Profit is only necessary to attract investment of private funds in innovation, not for innovation itself.”

I do not think so, again. I agree with you about the need for vastly more recognition of, and funding for, public basic R&D. But there is an enormous amount of innovation that comes after public R&D, and that works better by private initiative: delivery systems, synergistic technological combinations, secondary and tertiary business start-ups by entrepreneurs and workers who learn how to employ the innovations, etc. etc.

This is exactly the sort of branching network of ideas that is beyond prediction and rational calculation, and so a public-sector bureaucracy would just slow it down and make everybody frustrated and angry.

96

Lee A. Arnold 01.17.14 at 12:31 am

Plume: “Your quotes don’t support the contention that capitalism is actually better for resource use.”

Actually, the Ehrlich and Daly quotes say “sensible” and “paradigm”, by which I think Daly means in ALL of economic theory, since I believe he has studied socialism.

But the real question to you is the following:

BETTER THAN WHAT, EXACTLY?

(Sorry, I don’t do italics)

Because you haven’t laid out the system YOU want. So how can you say what is better? What is capitalism not better than? So next, why don’t you describe the system that will replace it. Describe it by the nuts and bolts, not by well-meaning platitudes.

Thus, in describing the new system, which you are now called upon to do, to prove that capitalism is “worse”, please do NOT give us another definition, such as “I don’t know, but the system must use less resources”, and do not say “Go read somebody else”, and do not give us fanciful metaphors about sharing-with-others, and do not describe a new system of paper credits that can’t be understood by anyone anyway (people already do not understand how money works), and do not bother trying to describe a new psychology that will inhere in our hearts and minds, once we are freed from the shackles of the capitalist oppressor.

In other words, tell us exactly what happens in this new system: when you go out the door to work, or how did you find the job, and how much you are paid, and what happens when you want to purchase something, and what is the process for you to adjust when a technological invention makes your job obsolete, and whether the inventor gets paid more than others, if he wants to be.

Tell us how all of this will work, without a bureaucracy or someone else checking up on you. Tell us how an ecological resource is maintained with any less bureaucracy under this new system, than the capitalist system.

Because the fact that many “environmentalists” say capitalism is inherently evil is called “argument from authority”. Most conservatives say universal healthcare will destroy the nation. I don’t believe either one, without proof.

There isn’t even much authority there. The authorities on ecological damage are ecologists (not environmentalists) and, now, climatologists. Go ask any of them about capitalism, and they are likely to say, “Not my subject matter, and I don’t really know.”

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Lee A. Arnold 01.17.14 at 1:19 am

Plume: “Go into any grocery store and take a look at the shelves. Notice the packaging. The individual packaging. Notice the large number of items that won’t be sold. Where do they end up? In garbage heaps, in slums around the world, in various dumps around the globe.”

Again, what is your proposed alternative? I am not saying there isn’t one, I have just never heard it: I am all in favor of buying locally, but for many items that may not be possible. There is bulk packaging, certainly: Costco and the rest. Should stuff just be in a pile? Should people be made to pre-order, so the stores don’t stock stuff that won’t be sold? Or should customers be required to travel to the point of manufacture?

Do you actually think most stores buy stuff that won’t be sold? I would think that is very rare. The stores try very hard to correct that at once. Why? Their profit motive. Almost all of what you see, usually gets sold.

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Collin Street 01.17.14 at 1:45 am

Growth of paper finance is the problem. It has led to the 6-year economic crisis, and of course it is also enabling much ecological devastation. But it is NOT the definition of capitalism.

It kind of is, you know. Capitalism isn’t just anything with markets, or it’d be called marketism or something. Capitalism requires capital, and capital isn’t just any sort of obligation, it’s anonymised, infinitely transferrable infinitely accumulatable. And you can’t have that without a finance market.

[the nature of "capital" -- the way it abstracts over the limitations of the underlying obligations it's created from -- is sitting right at the core of the problem, and the modern finance market's only possible precisely because capitalism transforms conventional quid-pro-quo exchanges into something different.]

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Lee A. Arnold 01.17.14 at 2:27 am

I didn’t mean the beginnings of paper finance, but its recent overgrowth. Here we come to Plume’s intuition that part of the problem is lack of distant knowledge. Big Finance, as sized and constituted now, may be intellectually incapable of investing in good small businesses: they don’t know how to find them, and they have run out of their own ideas, and so they turned to shoddy paper that was negotiable (i.e., subprime derivatives, which are negotiable, i.e. they could unload the paper on others). I doubt that the existence of finance capital itself is the main problem. It is the growth of finance capital beyond what is socially useful.

How did it get this way? (Dean Baker is very good on this stuff; see for example, The End of Loser Liberalism, which is a free download at CEPR.) Very specifically, recent policies have greatly increased inequality andthus fattened the pockets of the people at the top of the heap. They, in turn, consume proportionally less of their income than poorer folks. So they turned to invest the rest, but they have run out of good investment opportunities, and put it into shoddy paper, helping to pump up the paper markets. But it isn’t really that they have run out of investment opportunities: it is that they don’t have the time or brains to find good, real (i.e. non-financial) innovations and businesses other than extremely large corporate ones, who don’t need the cash either.

I drew a flow-picture of this process, in this series:
http://www.youtube.com/playlist?list=PLT-vY3f9uw3ADgyYqUVo2R8kxM4Agc3aw
It starts out with basic macro, with the notable addition of making finance an independent sector. This is very different than academic macroeconomics, where math models work almost as if finance were a nonexistent or neutral observer. But finance is not; it now has its own interior logic. The series gets down into the shadow banks’ logic around number 17.

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Chris Warren 01.17.14 at 2:31 am

As Collin Street noted;

Capitalism isn’t just anything with markets, or it’d be called marketism or something. Capitalism requires capital, and capital isn’t just any sort of obligation, it’s anonymised, infinitely transferrable infinitely accumulatable. And you can’t have that without a finance market.

This is exactly right. If capitalism accumulated more without markets then this is precisely what it would do.

Getting rid of capitalism (properly understood) may make markets far more efficient and relevant to society in general.

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Lee A. Arnold 01.17.14 at 3:44 am

Chris, Are we still going to use money?

If “no”, then how do new businesses start up? What do they do, or what do they say, to receive the required start-up material from other people?

If “yes”, where do the new business start-ups get the money from? And who judges their business-worthiness and their honesty?

Here is a picture of the origin of banks:

102

Lee A. Arnold 01.17.14 at 3:45 am

OH I forgot it inserts it in the column. Sorry! Crooked Timber never used to do that.

103

Chris Warren 01.17.14 at 4:51 am

Lee A Arnold

I don’t think anyone understands your question.

You can expand any economy, slave, fuedal, socialist simply by moving resources to a more highly valued employment.

This has nothing to do with capitalism. Do you really mean ‘money’ or IOUs?

Keyne’s told the MacMillan Committee the resources came from windfall profits. These exist in all forms of economy.

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Plume 01.17.14 at 4:53 am

Lee, I repeatedly talked about capitalism in comparison with all previous economic systems. I didn’t compare with future hypotheticals.

As for my own:

It’s a bit like Parecon, though different in many respects.

First, no money. No profit. No private ownership of the means of production. All means of production owned by the people, literally. Not by some stand-in political front, or junta, or any kind of representation. I mean, literally owned by the people, together. By law, under the Constitution. And called the commons. The only thing outside the commons is one’s home.

Parties are in fact illegal in this society. The Constitution sets this up. Sets up permanent prices and wages. We have a steady-state economy. Sets up total equality under the law. Sets up environmental guidelines that say food must be organically grown and sustainably produced, with a strong emphasis on very small and very local. Guidelines are implemented to prevent things from going beyond a certain size, ever.

Animals must be treated humanely. Energy, cleanup, transport all must be green, sustainable and renewable to the degree humanly, technologically possible. We start out with guidelines to prevent pollution. We don’t, as is our current situation, let “the markets” decide and then worry about the environmental catastrophes later. The society decides to keep its environment healthy. We don’t let private business owners go against our best interests. They no longer exist.

We have three or four tiers/levels for vocations. The names are unimportant and can be altered, but it would be something like apprentice, senior apprentice, teacher, senior teacher. The tiers are there to provide just enough incentive to keep learning, to expand one’s skills, while preventing all but minimal levels of hierarchy. From top to bottom, pay for work done is no greater than 4-1.

Pay is in the form of electronic digits. Debit cards. Every person has their own account. Every town their own. Every region. And the nation itself. We use the debit cards to pay for items produced for the common good (and account for them), with the production owned by all. No profits, no money is exchanged.

No taxes, no debt, no borrowing, ever. If a town needs a new hospital, a new school, they submit the request and it’s voted on. Direct, participatory democracy. The funding comes from unlimited digits, so there is never a scarcity of that, never a need to go into debt, never a worry about that funding. The only limitation is labor. If we have the people to build it, we build it, as long as it fits within Constitutional guidelines and wins democratic support.

National goals. Regional goals. Township goals. All work together, synergistically. Locales manage what is in their local jurisdiction. They are stewards for their community and what rests in that community. But ownership is societal as well. The community and the society at large own all production.

We produce what we need for each individual community, and hopefully a little more. We trade surplus when needed. But the vast majority of goods and services are locally produced and consumed. We set things up that way. Things from the outside, from other regions, are luxuries and bonuses, for the most part. We vote, as a community, to bring X, Y or Z in from other regions.

Civil servants are chosen by lottery and do a two-year or four-year stint. People can choose public service as a career, too. But the direction for their work comes from direct, participatory, democratic vote — at the local, regional and national levels. The same tier system applies to public service careers. One can move from the first to the fourth level, if one chooses. No one is forced out of their tier. But they have the choice to apply for “promotion.”

Retirement age is 60.

All schooling and training for trades and the arts is free. All public transport is free. All health care is free. Since the funding is unlimited, as mentioned above, there is never a lack of coverage for this. Simply by being a citizen, one can expect lifetime learning, health care, transport and full access to all cultural venues — which also are free. None of that is subject to “ability to pay.”

The basics are all covered. Everything we need to live a decent life is guaranteed. Working covers the extras, allows one to save for vacations outside this society, and extras for the home, etc. .

For starters . . .

Will add more tomorrow, if this thread is still open.

105

Plume 01.17.14 at 4:55 am

Sorry for the length of the above. Didn’t realize it was that long until I posted it.

If it provokes TLDNR . . . . please let me know. Can break it up into shorter posts, etc.

106

Lee A. Arnold 01.17.14 at 5:39 am

Chris Warren: “You can expand any economy, slave, fuedal, socialist simply by moving resources to a more highly valued employment.”

The question is, what your preferred decisionmaking apparatus to move that employment?

107

Chris Warren 01.17.14 at 6:09 am

Lee A Arnold

Why don’t you answer questions?

Different societies have different means for resourcing development. A landlord has every right to switch to farming if their income expectation is greater.

Capitalists misdirect resources because they move resources where they can best accumulate wealth other people have produced.

108

Lee A. Arnold 01.17.14 at 6:09 am

Plume, There is no profit, but there are wages. Why are there wages?

109

mattski 01.17.14 at 6:11 am

Pay is in the form of electronic digits. Debit cards. Every person has their own account. Every town their own. Every region. And the nation itself. We use the debit cards to pay for items produced for the common good (and account for them), with the production owned by all. No profits, no money is exchanged.

This seems completely incoherent to me.

No money is exchanged? Then of what use is a debit card and a personal account?

How is inflation avoided if electronic money is in virtually infinite supply?

And is it fair to say that your proposal could reasonably be called, “If Plume Was A Dictator”?

110

Lee A. Arnold 01.17.14 at 6:14 am

Chris, Sorry, I don’t understand. What is your question?

111

mattski 01.17.14 at 6:16 am

Chris Warren, what is the question you wanted Lee to answer?

112

mattski 01.17.14 at 6:17 am

Whoops.

113

Lee A. Arnold 01.17.14 at 6:21 am

Chris, Oh I see it, the question you asked is, “Do you really mean ‘money’ or IOUs?”

My answer is that money and IOU’s are just about the same thing. Money is just a standardized, negotiable IOU. In other words, a third party will accept it in return for some other good or service, and that IOU stays in circulation, because it can be used for all other transactions.

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Plume 01.17.14 at 6:23 am

Lee 108,

There are wages to compensate for work done in the system I describe, and those wages also help in accounting, prediction, resource allocation.

The system of capitalism, OTOH, injects something that has never been necessary for a fully functioning economy:

Profit. Profit is, in fact, a form of theft and totally unnecessary. It is derived primarily from the underpayment of wages. The more money ownership desires, the more grotesque the underpayment. Ownership takes the revenues generated by workers, due to their labor, and then redistributes just a portion back to the people who actually generated that revenue. He or she keeps the lion’s share, without having done but a tiny sliver of the work.

Notice how extraneous is profit. The workers don’t base their efforts on the amount of money the boss makes above and beyond his or her own salary. They could and would work just as hard if there were no boss, no owner, and no difference between their pay and anyone else’s. Actually, they’d likely work harder.

The vast majority of people don’t work for profit at all. They work for wages. What difference is it to them if their paychecks come from a non-profit, a co-opt or an Apple?

Anyone who says profit is necessary to our economy is either ignorant of the facts or shilling for ownership.

115

Chris Warren 01.17.14 at 6:29 am

Lee A. Arnold

My answer is that money and IOU’s are just about the same thing.

There’s your problem.

Workers wages are ONLY real money. Capitalists then introduce IOU’s to allocate resources, and even charge workers more should workers ever feel that they too would like some of this IOU stuff to give them access to a more equitable share of their own products.

116

Plume 01.17.14 at 6:29 am

Mattski 109,

You have an account. You fill your account with hours worked. You go into a store, select an item, and your card is debited electronically X amount for item purchased.

You work again. Get more digits on the card. And so on.

Again, most things don’t require any kind of debiting. As mentioned, school, health care, public transport, arts and culture venues all are free.

And, no, to your last question. My system being the opposite of a dictatorship. It’s full on, direct, participatory democracy. The people own the means of production. Literally. Not via representation by political parties, juntas, dictators. But they actually, really own all means of production and all funding in common.

One person, one vote, all with equal weight. No money to corrupt things. No political parties to be corrupted. No extra power based upon capital controlled. No capital, period.

Everyone is equal under the law. In this system, unlike our current system, money doesn’t make you more powerful than your neighbor, and the few can not possibly rule the many. There is no ruling class, period. Nor any classes at all.

117

Plume 01.17.14 at 6:42 am

As for inflation:

Prices and wages are locked in. Permanent. No inflation is possible.

Contrary to right-wing theory, it is not the money supply that dictates inflation. We learned that once and for all when the Fed printed 16 trillion dollars and flooded the markets with it in recent years. No uptick in inflation.

(Inflation has held pretty steady for more than thirty years.)

Inflation appears in the capitalist system when the consumer base receives a large boost in its buying power, its disposable income and acts on that boost. Given the fact that rank and file wages have gone down for the last forty years, almost without relief, that is no threat to us at the moment. If you expand the money supply at the top, for people who don’t spend nearly as much in this economy, in the here and now, inflation is not an issue.

It’s not the amount of money, it’s the distribution.

But my system isn’t capitalism. At all. You can throw out all of your preconceptions about it, if they go through a capitalist prism. IOW, you can’t assess this system using capitalist “logic.”

118

Lee A. Arnold 01.17.14 at 6:48 am

Plume #114: “There are wages to compensate for work done in the system I describe, and those wages also help in accounting, prediction, resource allocation.”

Why is the spread in wages 4 to 1? Why not 3 to 1, or 5 to 1?

119

Ed Herdman 01.17.14 at 6:52 am

Why can’t profit be shared amongst workers and understood as a premium paid by buyers for superlative product/service?

I’m not saying that this is the definition of profit that describes the situation today, but Plume is giving a very strict interpretation of what it is.

120

Plume 01.17.14 at 6:56 am

Lee,

It could be less or more. I think 4-1 is good, a sort of sweet spot. But it doesn’t have to be that. As long as there is a limit. An upper end. Orwell thought 10-1 fair. I think that’s too much hierarchy and inequality. This leads to pathologies within societies, unfair differences in quality of life, longevity, etc. etc. The bigger the gap, the worse the pathologies.

In our current system, the rich actually live longer and have healthier lives in the aggregate. Resources are allocated in order to do that. Most of the gains in longevity have gone to the upper socio-economic strata, for instance. And the top 20% richest people in the world consume 85% of its resources.

In my system, that kind of atrocity could never happen.

121

Lee A. Arnold 01.17.14 at 7:00 am

Chris Warren #115: “Workers wages are ONLY real money.”

Let’s say somebody invents a new thing, like nobody ever saw a clothes-washing machine before, and this guy invents the clothes-washing machine. And everybody else likes it. Now he is not a worker, he becomes the entrepreneur, and he hires other people as workers, to make the machines. Should he be allowed to make more money for inventing the clothes-washing machine, and do you call that “money”?

122

Lee A. Arnold 01.17.14 at 7:04 am

Plume #120 “As long as there is a limit. An upper end.”

Okay well suppose everybody at the upper-end wage #4 is washing clothes on rocks, just like everybody stuck at wages #1-3, and one of the #4 guys invents the clothes washing machine. And everybody else likes it. You are saying that he isn’t allowed to push the wage rate up to a new #5?

123

Plume 01.17.14 at 7:08 am

Ed 119,

But where do profits come from? They can’t happen if you have an equal exchange or a fair trade. There is no profit in that situation. Your payment for item X covers the cost of that item. All the cost. No surplus left over. And why should there be a surplus? If there is, then someone has lost in that exchange. In order to create that surplus, one side of the trade is paying more for the item than its worth.

But, again, the vast majority of the profit comes from the underpayment of wages for the value of production. If workers are paid their fair share in the first place, there is no profit left.

For example: in 2012, Apple made 41 billion in profits on roughly 156 billion in sales. They have a cash stockpile of roughly 160 billion now, in addition to those profits. That profit (and that stockpile) indicates at least two things:

1. They radically underpaid their workforce
2. They charged too much for their products.

#1 being the biggest item on that list.

Yes, at the very least, Apple should send back all of that 41 billion to workers. But we all know they won’t. They’ll send back some of it to shareholders, who do nothing regarding production. They have zero sweat equity in the company. And most shareholders are short-timers, picking up the stock, selling it off, in a matter of months.

At Foxconn, workers there make Apple products for 70 cents an hour, under working conditions that provoke them to suicide. Apple, obviously, made enough just in 2012 to pay them much more. Enough, really, to set them all up for life. Apple’s profits come from that massive underpayment.

This is one of the major reasons why capitalism is a sickness, a cancer and obscenely immoral. It actually encourages this sort of thing.

124

Plume 01.17.14 at 7:18 am

Lee 122,

Correct. You have to get out of the mindset that doing something good for society must entail a material award for just you and you alone. This is an interconnected world. You are a part of a community.

In this new system, the reward is a better overall society, where we all share in the innovations that come from it. Remember, that guy who invents such and such was educated in our system, for free. He or she received health care and training and public transportation and has access to cultural venues for free. He or she didn’t grow up in a vacuum. Why should it suddenly become just their reward alone?

Even in our capitalist system, workers, when asked, say they want to be appreciated and respected more than anything else. They don’t rate big material rewards at the top. The system I describe would emphasize this “natural” aspect much more, and create a climate of community, camaraderie, solidarity and cooperation. Those would be the things people aspire to. Not the personal accumulation of vast wealth. Since it wouldn’t be possible anyway, why would this be an issue? Why would you think people would really care about that?

Of course, if someone really did want to make their fortune, there is no restriction on emigration. They are free to leave and make their fortune elsewhere. No questions asked.

125

Lee A. Arnold 01.17.14 at 7:43 am

Plume #124, But it isn’t a material reward for just you and you alone. The purchase of the washing machine gives a material reward to others, because they no longer have to beat clothes on the rocks, and can have free time to do other things.

You also said there are wages to compensate for work done in the system. Yet the guy who invented the clothes washing machine did a lot of extra work. He had the idea, designed it, etc. He didn’t give up his other job, because he didn’t know if the thing would work. He risked the use of part of his lifetime.

Plus now, he has to get everybody in the country to vote on giving him the resources to make the thing. Because it is a national invention, it isn’t a local-use invention. So the other half-billion people need time to read up, to see if it is a good idea to allocate such a large amount of resources. And they will have lots of other reading to do, for all the other new inventions and buildings. There will be about a thousand new inventions and buildings on the voting ballot, every week.

126

Plume 01.17.14 at 7:44 am

In short, just as in our American system, no one invents anything ex nihilo. They stood on someone else’s shoulders, many someones, who stood on many someones before them. Vertically and horizontally integrated shoulders.

Part of the mentality created by capitalist propaganda is that “the boss” should be entitled to the vast majority of material rewards, even though his or her workforce did the vast majority of the work. So, that inventor, even if he or she was taught in public schools, uses public libraries, uses tools created by the public sector, got to school and libraries and work on public infrastructure . . . well, they should get the vast majority of the reward for what they did anyway.

Me me me me. What’s in it for me!! Look at what I did, all on my own, without anyone’s help, ever!!

127

Plume 01.17.14 at 7:57 am

Lee 125, sorry, no. We need to keep the tiers the same. Steady state. Prices set. Wages set. This will prevent recessions and depressions, bubbles and their bursting. We keep things so we produce to order, produce just what we need, plus a bit of surplus for trade, and no more.

Doesn’t matter if someone invents something new. Same salary. We don’t want to encourage endless invention of new consumer goods, anyway. We will be extremely picky and only allow things that are necessary and for the common good. We don’t produce competing consumer goods. We produce what we need and to order.

For instance: there won’t be 100 different toothbrushes all doing the same thing. Or deodorant. Or cereal. Local production, primarily, of what we need. Not competing products of the same.

So, if someone comes up with a washing machine that washes an extra shirt or two a few minutes faster? Sorry. No dice. It’s got to be something really important, really necessary and really innovative — as decided by the populace and in accord with the Constitution. Democratically.

There won’t be that huge number of inventions on the docket, because we won’t need them and we won’t encourage them. We will encourage ecology, sustainability, harmony with planet. And producing thousands of new products runs into major conflict with all of that.

128

Chris Warren 01.17.14 at 9:08 am

Lee A. Arnold

An inventor needs to receive a wage provided the inventions are socially useful.

This is cash.

There will be a period of natural profits until other entrants compete this down to zero.

This is not capitalism. A capitalist restricts entry and hires labour at wage rates which are lower than appropriate given the final consumption selling prices. In fact a capitalist will only invest if they expect the final selling prices are at this level. This then creates a economic crisis in the long run. It also means that other socially needed inventions are not pursued and the amount of actual invented products produced is less than optimum.

129

Ed Herdman 01.17.14 at 11:06 am

The emphasis on “fair trade” seems to me to be the Marxists’ case of blindness to externalities in a way perhaps inverted from that of the typical case against small-government advocates.

Profits allow people to vote with dollars for better programs over inferior ones, and this structuring effect need not be permanent. In a market that has reached perfect equilibrium, there will be no profit – everything would be fair trade. But so long as it takes an accumulation of capital to do useful things, profit-taking is useful to organize other efforts around better programs.

Why this should be the case isn’t hard to understand: If there are two people selling stuff, the person who is selling the inferior product still can’t be expected (normally) to sell below a fair trade. And you can bring that profit-taking by the second seller down to nothing if the other product and service reaches the same level of quality.

I note a difference between exploitative profit-taking (and it’s interesting that Marx is only able to ramp up the volume, with his concept of “superprofit” apparently his way of getting up on the highest table) and profits that have a useful organizing effect. In fact if we think of profits as being accrued not to individuals but to programs (i.e., ideas), it makes more sense. Of course this doesn’t mean that there aren’t problems with exploitative profit-taking or with the ignorance of resource constraints and other externalities.

130

Mao Cheng Ji 01.17.14 at 1:22 pm

It seems to me appropriation of the surplus-value is always exploitative, whether it’s spent on capitalist’s own consumption or on capital accumulation: expansion of capitalist’s own power.

Now imagine a coop. Everyone is compensated according to his/her contribution: no surplus-value, and therefore no profit. But this doesn’t preclude the coop members to agree to set aside a portion of their compensation to finance an expansion or modernization or whatever else a hypothetical capitalist would’ve done with his profit, in this situation. See: same positive effects, but without exploitation. I’m sure it’s not that simple, but this is the idea.

131

Manta 01.17.14 at 1:42 pm

MPAVictoria 01.13.14 at 5:04 pm

“Eh, it seems pretty self-evident to me. High tax, high service nations are invariably better places to live for the vast majority of people than low tax, low service ones.”

As far as I know, the US is a much better place to live than e.g. most nations in EU (and in the word in general): higher average income, higher median income, lower unemployment
http://en.wikipedia.org/wiki/International_Ranking_of_Household_Income

(I may be wrong though: I would welcome if some with more knowledge can give more informations)

So, on what do you base your claim?

132

Random Lurker 01.17.14 at 2:07 pm

@Ed Herdman 129
The problem is that Marx basically assumes that the markets are always at perfect equilibrium (this is IMHO implicit in both the LTV theory and the equalization of the rate of profit theory).*

As far as I can understand, for Marx profits arise by “underpaying workers” because “capitalists” have an oligopoly on the means of mass production, and this permanes even in conditions of market equilibrium (where market equilibrium means equilibrium among branches or companies, e.g. between housing and agriculture, or between Apple and Samsung).

*basically assumes in his equations: he didn’t believe that the market is permanently in equilibrium, but he tried to prove that disequilibrium is not the source of profits.

133

mattski 01.17.14 at 2:20 pm

Plume @ 116

My system being the opposite of a dictatorship. It’s full on, direct, participatory democracy. The people own the means of production. Literally. Not via representation by political parties, juntas, dictators. But they actually, really own all means of production and all funding in common.

First, if this is full on participatory democracy then you have no way of knowing if your rules will be embraced by ‘the people.’ So, I don’t see how you describe a set of specific rules and then claim this is ‘democracy.’

Second, “the people own the means of production” seems to me not a coherent idea. Take Lee’s example of the washing machine. Or take any instance of entrepreneurship. There is no incentive to invent anything without rewarding the risk inherent in the creative process. Nor does there seem any justice in telling an inventor, or any creative person for that matter, that they don’t enjoy some special rights vis-a-vis what they created. That seems fundamentally unfair to me, and I think most people would agree with me.

No money to corrupt things.

But you have stipulated electronic money.

@ 117: Prices and wages are locked in. Permanent. No inflation is possible.

How is a price arrived at? Who decides what the price of a consumer good? Sounds like the role of an elite ‘committee’. Not very democratic. You don’t seem willing to concede that there is a high degree of democratic justice in allowing prices to be determined by supply & demand.

Contrary to right-wing theory, it is not the money supply that dictates inflation.

I think what we have learned is more along the lines of this: when an economy is suffering from slack demand then inflation has trouble getting started regardless of the money supply. But there is a lot we don’t really understand about how the economy works. And I don’t see much recognition of the limits of our understanding coming from you, Plume.

But my system isn’t capitalism.

But it is yours, and thus not the result of any democratic process.

134

mattski 01.17.14 at 2:28 pm

Plume @ 124

You have to get out of the mindset that doing something good for society must entail a material award for just you and you alone.

In order for your system to work people need a new mindset. So, you are requiring a change in human nature. This is something you aren’t likely to get by issuing a demand for it. Human nature does in fact change, but I don’t see in you any insight into this process.

@ 127 So, if someone comes up with a washing machine that washes an extra shirt or two a few minutes faster? Sorry. No dice. It’s got to be something really important, really necessary and really innovative — as decided by the populace and in accord with the Constitution. Democratically.

So, Plume, speaking on behalf of everyone, says “no dice.” Sounds like a dictatorship to me.

135

Salem 01.17.14 at 3:00 pm

To my mind, the biggest problem with discussing with Plume is his anti-empiricism.

For example, when looking at the ecological damage caused by capitalism, it seems only fair to compare it to the ecological damage caused by communism. And both the USSR and (to a lesser extent) communist China had environmental records far worse than the capitalist West. Indeed, contra Plume, the problem of some faraway boss without local knowledge of the system is not unique to capitalism (and is in fact ameliorated by capitalism). But Plume doesn’t really care about this, because he cheerfully redefines those countries as “state capitalist.”

Of course the actually existing results of any system here on earth will never be as good as the imagined results of some fantasised system. But one’s fantasies say nothing about the world, and rather a lot about oneself. For example…

We don’t want to encourage endless invention of new consumer goods, anyway.

“We”, kimosabe? People buy consumer goods for their own good reasons, which Plume have no right to second guess. Moreover, they are one of the primary drivers of happiness and development. For example, 100 years ago, looking after a household was a full-time job, from which the invention of dishwashers, dryers, inexpensive clothes, etc, freed people (mostly women).

Moreover, new products are often seen as frivolous when they first appear, and only appeal to a minority. It’s only after time that their true value and usefulness is recognised. It should not be necessary that every new product appeals to a democratic majority. We don’t have to all eat the same breakfast cereal, as Plume also seem to think necessary – let everyone eat what they want to, for God’s sake, let there be choice!

Frankly Plume’s fantasies, like so many so-called “idealists”, strike me as totalitarian. He talks about “democracy”, but it seems to be a democracy with scant regards for the wishes, thoughts and desires of the actual people in it.

136

Lee A. Arnold 01.17.14 at 4:06 pm

Plume #104: “Guidelines are implemented… The society decides… while preventing all but… they submit the request and it’s voted on…”
#116: “It’s full on, direct, participatory democracy.”
#120: “It could be less or more. I think 4-1 is good, a sort of sweet spot. But it doesn’t have to be that.” #127: “We will be extremely picky and only allow things that are necessary and for the common good… It’s got to be something really important, really necessary and really innovative — as decided by the populace…”
________

This is a long ballot to vote on, and there will be another long ballot next week, and the week after, and every week. Or maybe every day. It looks to me that your utopia crashes into another version of what is sometimes called “the knowledge problem”.

I think your basic error is here, #127: “There won’t be that huge number of inventions on the docket, because we won’t need them and we won’t encourage them.”

No, I don’t think you can actually KNOW that. Future innovations are not finitely pre-statable — in other words, you cannot predict them. (Just like biological evolution.) Further, you cannot predict the social value or usefulness or consequences of these innovations, until they are up and running. And there are lots of them, in fact it looks like we are in an acceleration of really good ones, in addition to all the junk.

Consequently, your “guidelines” must be so general, as to admit a thousand new questions and exceptions weekly, or even daily.

And people have to vote on them: Does this one fit into the guidelines, does that one fit into the guidelines?

So, in your utopia, everybody has to vote on so much stuff that they may never leave the voting booth. But, they would never even make it into the voting booth, because they would have to spend all of their time in the library or on the internet, reading and studying the issues, to make good choices on the ballot, if they ever made it over to the voting webpage. But before that, they cannot possibly study that much stuff, because scientific knowledge has long outgrown the capacity of single brains.

So it looks like Mattski at #109 is correct, you will need a dictator.

137

Lee A. Arnold 01.17.14 at 4:08 pm

Chris Warren #128 “capitalist restricts entry”

I think you are talking about a “monopolist”. A “capitalist” need not restrict entry, although of course lots of them try to, when they are cowardly, greedy, and stupid.

138

Plume 01.17.14 at 4:48 pm

Mattski 133,

There is no entrepreneurship. It doesn’t exist. That exists in a capitalist-style society, and this isn’t that. You’re trying to critique this through the prism of capitalism, when that’s not applicable.

It’s like condemning certain chess moves based upon the rules of the game “Risk”.

And, sorry, there is nothing “democratic” in capitalism. Prices aren’t set by supply and demand. That’s a fairy tale. Prices are set in order to maximize profits for ownership while still encouraging maximum sales. They’re set by a extremely tiny minority of the population, whether the rest of the population likes it or not. Wages, too. Set by above, by the few, for the many below.

As for rules. I was asked what I would do. My alternative. Strange that when I provide it, I’m accused of being a dictator.

There has to be a start, somewhere, before that full on democracy can take place. There will be a constitution, voted on by all citizens. In my hypothetical, we would put the construction of the constitution up for discussion via the Internet, and hopefully millions of us would hash it out, craft a consensus and then millions would vote on it. A majority of that polity would decide. All further decisions are democratically derived as well, at the local, regional and national levels, with that constitution as guide.

Democracy, in this alternative, includes the economy. In our current system, it doesn’t. My hypothetical is infinitely better from a democratic point of view. It’s not close.

139

Plume 01.17.14 at 4:54 pm

salem 135,

There has never been a “communist state.” That would be an oxymoron. An impossibility. Communism being the absence of the state. And, please. Don’t try to pin me with some new alteration of the term. Read Chomsky, for instance. He’ll tell ya the same thing. The Soviet system was far from real socialism, much less communism.

I don’t try to contrast pollution coming from the various imperial empires because they all use the same basic system of capitalism.

Also, so now, you’re saying I have “no right” to be critical of our consumer society? Speaking of being “totalitarian”. You sound like the perfect state propagandist coordinator for the corporate powers that be.

“Why, it’s freedom and liberty, I tell ya, to keep buying garbage products we don’t really need, that fill our landfills, slums, waterways and pollute or air endlessly!! It’s freedom!! And no one is allowed to be critical of this waste and pollution or the con-game going on!! We won’t ALLOW it!!”

140

Tyrone Slothrop 01.17.14 at 5:01 pm

Interesting ideas, Plume. I had some questions about details:

I don’t see how the 4 pay grades survive long in a democracy, as those being paid less will likely vote to change the scale in their favor. No tax, borrowing, or debt, ever seems problematic in a democracy, too. Even if you inscribe it in the constitution, how is it enforced? If a community and/or higher level of civil organization wishes to deviate and implement such, how would they be prevented? By force? Expulsion? Imprisonment?

There also seems to be ample room for the Tyranny of the Majority to come into play. What if a community votes, in the majority, to ban homosexuals from their area? And back it to say that if one doesn’t like it, they’re free to go form their own community over there? Or similar votes against religious belief, ethnicity, sexual orientation, philosophies, etc?

If this cannot be done because of the constitution, who is enforcing it? How are appeals against its authority, or challenges to it, or desires to change its content, processed? For that matter, what structure of military and/or law enforcement is to be set up? And, if they are the only citizens to possess armaments, what checks and balances are to be implemented to prevent their abusing their status – even if it’s only to lean on other citizens and get them to spend their electronic money on that which the armed person so desires?

How are the religious beliefs of citizens to be addressed? Are churches allowed? What happens when any particular church/church sect anathemizes certain tenets of your society? What if local schools see their teachers primarily composed of enthusiastic Young Earth Creationists who wish to order their society in accord with the expected End of Days?

The world is filled with legal and illegal drugs. I’d be curious to hear what the status of such is to be in this polity, and, for that matter, how such as the medical profession are to be regulated. What happens if a doctor is unqualified and kills his patients through incompetence and/or neglect? Are there lawyers in this society? And how are damages to be addressed? Wrongs to be corrected?

141

Plume 01.17.14 at 5:01 pm

Mattski,

And about that change in mindset. You act as if our current mindset is “natural.” As if we were all born to be under the thumb of capitalism. This, despite our first 200,000 years on this planet living communally, with no profit, no money, no employer/employee/wage labor arrangements, and no private property.

The mindset that holds up private property, profits and wage labor, etc, as the norm, the natural, the “this is the way things are” . . . . that mindset was created, pushed and endlessly reinforced through two centuries of propaganda. It is an “acquired” taste, to put it in the most gentle of terms. We adapted to it. It’s not a biological norm.

My hypothetical, in a way, would just take us back to our beginnings. In a sense. And if anything could be called “human nature,” communal life would be it. Capitalism is the deviation, not communalism.

142

Ronan(rf) 01.17.14 at 5:02 pm

Plume. And libertarians will tell you there has never been true capitalism. Some things are politically impossible. Cest la vie

143

Plume 01.17.14 at 5:15 pm

Tryone 140,

The bases for this hypothetical alternative are the following:

Democracy
Social Justice
Equal Rights
Human Rights
Harmony with the planet
Sustainable living
No ruling class
No classes, period
Egalitarianism
Communalism
Cooperation

The constitution will protect minority rights and the egalitarian framework will minimize even the possibility of that being a problem.

Everyone will be considered equal under the law. All work will be valued equally. Labor itself will be the thing valued. There won’t be a hierarchy of jobs, beyond just the little bit needed to keep things moving.

Again, we’d throw it up to a vote. Two, three, four tiers. I don’t think it should be higher than four, because then you destroy one of the most important reasons for the alternative in the first place.

Yes, all religions are allowed. Political parties are banned. But religions are allowed. They, however, are subject to all laws. No exceptions or exemptions. Religious belief is no shield. And since all means of production are owned by all the people, the same goes for churches — in the sense that they can be limited in size.

In my hypothetical, keeping things small (and local, primarily) is essential in order to prevent centers of power from forming. At all. This society guards against that at all times. It is essential that each person retain their equality within the society, and that means that no large organizations may form, which could give more power to members of that organization, etc. That would include churches, mosques, synagogues, monasteries, etc.

144

Plume 01.17.14 at 5:19 pm

Ronan 142,

We definitely have actually existing capitalism. If you’re speaking of right-wing libertarians, they believe in a fairy tale capitalism, a fairy tale promulgated by Adam Smith, Steuart, Ricardo, Malthus, Mill, Hume, Locke, etc. etc. The classical political economists and their allies.

There is a difference between saying that unicorns don’t exist, and that a certain perfectly purebred breed of horses doesn’t exist — yet.

145

Plume 01.17.14 at 5:30 pm

As for drugs, etc.

America now has the largest incarceration rate in the world, and more than half of the inmates are there for drug-related crimes.

We have a minimum of crimes on the books via the constitution. Our system of guarantees for food, shelter, lifetime learning, health care, public transportation and cultural venues, etc. would radically reduce the “need” for anyone to sell drugs in the first place. In our society, no one who wants to work is denied the chance. There can be no “unemployment” unless that is one’s personal decision. Society creates work, for society, on behalf of society, so no one need go outside the system to find “black market” jobs.

There is also no cash. It doesn’t exist. Electronic digits are earned solely through work sanctioned by the polity, and those digits can only come from one source, owned in common. It would be next to impossible to form a black market because of that. You don’t get access to those digits without a legit job.

146

Plume 01.17.14 at 5:59 pm

Sorry, second and third paragraphs (145) refer to the alternative system, not present day America.

147

Tyrone Slothrop 01.17.14 at 7:46 pm

Thank you for the responses, Plume.

What I was trying to get at with my examples above goes more to the socio-cultural part of this new society, as opposed to the strictly economic, and which the others have been asking questions about. What would concern me the most is that your conception has several things that are absolutely forbidden, and yet is entirely contained within a structure operating at the purely democratic level. These two seem antipodal to me – if things are put to a simple majority vote, then they can be altered. And even if you frame total equality within the constitution, you are still going to have to spell out exactly how that is defined, and which, having been set down in words, will be [presumably] challengeable in a democratic system. That also mean decisions will [presumably] be appealable. Human society is not a steady state system, it is dynamic – and so when you say things can never be, I don’t see how that’s enforceable without using, well, force of some sort.

Furthermore, this problem is exacerbated by your preference for maintaining things at a small scale, as local as possible. If Community X is, more-or-less, self-sufficient, then if they majority vote to arrange their society in ways that go against the constitution, who is to gainsay that? They don’t need outside help to survive, or at least at the basic sustenance level, so why should they not do as they wish to? That constitution will have to be enforceable, and that means some higher level will require coerecive power – and the door is thus opened to hierarchies, concentrations (and abuses) of power. Human beings are a variegated lot, with endless differences and desires, and there will be memories of past institutions, political arrangements, religious constructs, etc., elements of which certain population centres may wish to reintroduce. If everything is left to a vote, your entire system is open to being radically altered unless you can enforce your centralized intent.

For instance, what’s to prevent someone from organizing a number of strong local youths to impose themselves upon a community? Use threats – of force, denial of services, ostracization, whatever – to intimidate other locals into providing them with their electronic cash, so that they don’t have to work but can reap the rewards of doing so? Or to recreate a local church hierarchy whose priests control the education process? Or who wish to build a local armament industry with the intent of offering “protection” to their neighbouring communities? Or what if people in Community X/State X want to offload their decision making process to others? With so many decisions reliant upon local voting procedures, your system will place time demands upon people they might find burdensome – not every vote will be deemed relevant enough to warrant an individual’s participation, nor worthy of taking the (considerable) time to inform themselves about – and so what if they willingly give their vote as “proxy” to another, even to set that figure up as a local authority? Authoritarians can be very efficient, especially in a society where people are free to work where and as they choose, and, hence, will be unorganized and inefficient at various levels or industries or trades that a sufficient number deem to be highly important of being better organized.

All of this is my way of wondering how this society, which is what you would wish to see, will be accepted piecemeal by several hundred million people. If things are to be enforced and/or forbidden, you’ll need coercive power to guarantee that, and that opens the door to the entire construct being changed into something that goes against the spirit of its foundational intent. I appreciate that you can hardly be expected to concoct a socio-econo-political system that covers every base, nor that your own preferences won’t be highly present in what you’ve created – but I wonder if you’ve sufficiently accounted for human nature, how people operate, and that, with what they see as the best of intentions, there will be hundreds of thousands, if not millions, of citizens whose understanding of, and desire for, how this society is intended to proceed will be different, sometimes radically different, from that of your own.

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Plume 01.17.14 at 8:23 pm

Tyrone 147,

First off, thank you for your questions, your very adult feedback, etc. Have posited this in other venues, and was met with some truly infantile and angry responses that baffled me. Why on earth should anyone get angry over alternative ideas? As if they’re some sort of threat to them? They aren’t. Capitalism has such a stranglehold over the world, I would think anger would be directed there, not toward something that doesn’t exist.

. . . .

There is a conundrum with any attempt at democracy, even our limited kind. If we open things up to majority vote, we could vote in someone or some party that would eliminate democracy itself. Some form of religious autocracy/theocracy could be voted in and then turn around and eliminate all further voting, for example.

So that constitution comes into play and sets up a framework for the greatest degree of “freedom” possible while at the same time preserving the egalitarian, democratic structure. There will be a lot of room to maneuver, just as long as one stays within the general framework and doesn’t try to destroy it. As in, you can go here, there, anywhere you want, just as long as you don’t pull down the walls themselves.

So, again, we would have laws to prevent the concentration of power in any form beyond the single voter’s. But all the voters together get to prevent any one voter or a group of those voters from bringing down the house. The concentration and consolidation of power is prevented by a constant rotation of representatives and civil servants. Chosen by lottery, without elections, no one can buy their way in, and everyone will know their time is limited. What they do can be undone by new rotations and current fellow reps, so it’s a waste of time to even try. As in, one can’t “build” a political power base. They won’t be there long enough for that, or to enjoy its fruits. And the constitution already sets up too many barriers for that.

The power to “enforce” this hopefully would seldom be needed. But if it is, again, the people rotate through those jobs, knowing they will be on the other end of the deal soon enough. There will be an underlying, perhaps subconscious realization of the golden rule in place. Unlike our system, you can’t be a permanent member of any “enforcement” mechanism. You take your turn and then go back home. A “Peace Corp” conception, in a way.

And, again, anyone can leave if they don’t like the set up. No questions asked. No repercussions. This society is a voluntary one. But if you decide to live here, you agree to the rules.

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mattski 01.17.14 at 9:09 pm

As for rules. I was asked what I would do. My alternative. Strange that when I provide it, I’m accused of being a dictator.

Plume, you were asked for your vision, your alternative to what we have today. You made a good faith attempt to provide us with an idea of what you are proposing. We (if I may presume to speak for others) thank you for that. Now, having shared your proposal you must be ready to receive criticism. Is that fair or not?

My main criticism–well, one of my main criticisms–of your vision is that it implies the need for authoritarian structures. You might not think so, but I do. And judging from some other comments I am not alone. And remember, this is a solidly left-leaning blog. Have you never been humbled by your failure to gain converts, even here?

And, sorry, there is nothing “democratic” in capitalism.

Nothing? You mean walking into a store and having a choice about what to spend my money on is not democratic? Having a choice about which news outlets to get my news from is undemocratic? Having a choice about which art, which music, which culture to patronize is undemocratic?

You have a rich track record of making rash, imprudent generalizations and yet you are surprised when some of the reactions you get are hostile. It doesn’t surprise me.

And about that change in mindset. You act as if our current mindset is “natural.” As if we were all born to be under the thumb of capitalism. This, despite our first 200,000 years on this planet living communally, with no profit, no money, no employer/employee/wage labor arrangements, and no private property.

Arguing about what is “natural” is a game for mugs. Better to focus on observable facts. Do you really believe that humanity left tribal, primarily agricultural life behind because of the malign influence of “alphas”? Or is it possible that industrialization brought some benefits that people in general found attractive and desirable? Do you enjoy a hot shower? Do you enjoy putting your food in a refrigerator? Do you enjoy dabbling on the internet?!

I am as appalled by modern society as the average progressive minded person. I want to see vast changes in the way we live, and I believe those changes are possible. I just don’t think the changes we want are going to be the result of your brand of analysis. I wouldn’t even say your system of beliefs rises to the level of a dispassionate, scientific analysis of where the human race is…

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Bruce Wilder 01.17.14 at 9:15 pm

“system”?

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bob mcmanus 01.17.14 at 9:35 pm

So we have Plume designing his Utopia and Mattski saying it just isn’t liberal enough to suit him.

Revolutionaries don’t do policy. They do politics and organization.

Why I am No Longer an Anarchist

Response to Why I No Longer an Anarchist

Or if they are nihilists or dadaists or trying to hit the mule with the 2×4 yell “Burn shit down and take their stuff” and explain ir is just a metaphor, like Sorel’s Myth of the General Strike versus Luxemburg’s plans for the General Strike.

Whatever. Carry on. Nobody put me in charge.

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bob mcmanus 01.17.14 at 9:44 pm

And yes after the revolution the assholes who know how to rule will take over, for better or worse, and push the inspirational and idealistic aside. In with the new boss.

You don’t get to rule. You just get to decide when it is bad enough to blow it all up.

If you want to rule, well, you’re doing it wrong and in the wrong place. Try one of the parties. And understand you will become an asshole.

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mattski 01.17.14 at 9:49 pm

bob,

“Revolutionaries” are expert in two distinct disciplines:

1) Masturbation
2) Telling others what to do

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mattski 01.17.14 at 9:53 pm

Whoops. Didn’t see bob @ 152.

Easy Cowboy.

155

bob mcmanus 01.17.14 at 9:55 pm

mattski,

“Liberals” are expert in their distinct disciplines

1) Telling idealists why their dreams are nightmares
2) Evading responsibility, current conditions are always somebody else’s fault
3) Making sure real change never happens
4) Blowing conservatives while claiming they’re mocking and criticizing them, see 2

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mattski 01.17.14 at 10:07 pm

bob, this almost feels like we’re on level ground together!

Re:

1) Someone has to do it.
2) Don’t think this is true. We’re all responsible. That’s why ‘human nature’ gets brought up by folks like me.
3) I would phrase it this way: Attempting to dissuade the general public from following people like yourself into a world of mayhem. (Broken windows & guillotines for starters.)
4) bob… you’re a character.

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Chris Warren 01.17.14 at 10:12 pm

Lee A. Arnold

No. You can only make capitalist profit in the long run, if entry is restricted. This includes excluding competition from public providers, the impact of trade marks and copyright and patents, and similar benefits from insider trading and corruption. The availability of IOU’s is monopolised by capitalists.

Once the standard conditions of free markets are truly met – all capitalist profit is competed away (although rents for naturally restricted productivity may persist).

You only get a sustainable economy and full employment when capitalist profits are eliminated and any windfalls go to the producer while markets adjust in response to an innovation.

Windfall profits and such rents are not capitalist profits. They are normal profits. They represent real value and fall to the actual producers of this value and in proportion to their contribution.

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Chris Warren 01.17.14 at 10:29 pm

Mao Cheng Ji


Now imagine a coop. Everyone is compensated according to his/her contribution: no surplus-value, and therefore no profit. But this doesn’t preclude the coop members to agree to set aside a portion of their compensation to finance an expansion or modernization or whatever else a hypothetical capitalist would’ve done with his profit, in this situation. See: same positive effects, but without exploitation. I’m sure it’s not that simple, but this is the idea.

In the abscence of corruption, cooperatives can make normal profits without leading to unemployment or cutting wages or hours worked.

Setting aside a portion of their compensation is “saving” and provided that investment is in equilibrium with this then, there will be no ratcheting imbalances such as under capitalism – CPI, debt, CAD, wages.

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roy belmont 01.17.14 at 10:55 pm

bobski-
People who go around making generalizations about other people are always wrong.
-
Maybe dn could give us an official religio-historical reason why the adolescence/young manhood of Jesus is entirely missing from the relatively intimate biographies of the Gospels.
Maybe the stories were you know edited a little?
And, in that light, let us here acknowledge the Albigensians, those last vestiges of directly inherited gnostic Christian faith and practice.

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Plume 01.17.14 at 11:10 pm

Mattski 149,

You think you’re “free” to choose, when you walk into a store? Really? You’re such an easy mark. I bet store owners just love you to death. What a rube.

You don’t have any say in what those choices are. None. Those choices are made for you by the wealthy. And most of those preselected “choices” you get to pick from? The same thing. They’re all the same thing. Produced under the same exploitation. Priced the same. With the same wages paid and the same ripoffs built in. You get to choose different packages and colors. Wow!! Freedom!!! But the goods themselves are essentially all the same.

And, sorry, but you’ve never demonstrated that I supposedly make “rash, imprudent generalizations.” But I did shred your ridiculous attempt to portray leftists as somehow automatically impractical, while you liberals are supposedly “sensible” and would make for great deck hands, getting that old boat a shore. As in, your little thought experiment was absolutely ludicrous.

Tell me, what have liberals done in the last forty years, but offer a lame speed bump in the face the right-wing onslaught? What exactly have you done that was so “practical” and useful, other than continuously offering up one more piece of the New Deal in exchange for what you thought might be a temporary truce in the battle to destroy it? Tell me what addition you’ve made to that corpus in the last forty years. You can’t. It doesn’t exist. Your heyday was four decades ago, and even then, without the pressure from your left, liberals wouldn’t have gotten much if anything passed.

Talk about “track records.” Yours is abysmal, oh practical and pragmatic one.

And, again, my system would be the opposite of “authoritarian,” whereas you support the essence of it with your love of capitalism. No economic system in history has spread or exported hierarchy and imperialism with so much “efficiency.” And, yes, it’s quite “practical and pragmatic” in the way it does this, in the way it creates apartheid, especially of the economic kind.

In short, Mattski, get over yourself. You’re not all that.

161

Mao Cheng Ji 01.17.14 at 11:13 pm

Chris Warren, yes, only I don’t think they make profit. Profit is (essentially) another word for the surplus-value. If everyone is compensated according to their contribution, then everything is distributed to the workers, and so there is no profit. It’s a non-profit. But of course if ‘contribution’ is defined in a weird enough way, someone might be getting 500 times more than someone else, and then it’s back to the usual, even without the profits. Or the coop people might be paying wages to some other people, non-members, and profiting from that (very typical for a kibbutz, for example). It’s a tricky world.

162

Ed Herdman 01.17.14 at 11:14 pm

Random Lurker @ 132:

Thanks, I think that helps clear up a source of wonderment I had.

Would anyone show a Marxist response to this, instead of riffing on Nietzsche? “And when you look into the asshole, the asshole becomes you.” I think that’s the quote.

163

Plume 01.17.14 at 11:20 pm

Chris 157,

Well said.

Great example would be health insurance. The private sector knows it couldn’t “compete” with a fully public, all non-profit alternative. Which is why it spent tens of millions to make sure it wasn’t even discussed during the run up to ACA.

Overhead in the private sector is just too huge. A public sector, non-profit good or service has a fraction as much. It can provide far greater value and perks at a much lower price, which is why the powers that be have made sure they exclude any kind of “public option” in pretty much every industry.

And, what a concept!! Receiving just compensation in proportion to one’s input. If this were done, if we had “fair wages,” capitalism would die. No longer could the bosses receive the lion’s share when they actually do but a fraction of the work. They’d have to actually work for a living instead.

We took a terrible turn when we even allowed this scenario. Compensation should never be based upon how much work you can get others to do for you, but the work you do yourself.

164

Ed Herdman 01.17.14 at 11:23 pm

Apologies to Chris Warren, I jumped the gun.

It’s too easy to get distracted by revolutionary accounts of economics:
“Electronic digits are earned solely through work sanctioned by the polity, and those digits can only come from one source, owned in common. It would be next to impossible to form a black market because of that. You don’t get access to those digits without a legit job.”
GEE SIR YOUR CIGARETTES ARE ENTICING BUT I DISDAIN BARTER

“Profit is (essentially) another word for the surplus-value.”
BECAUSE IT’S CONVENIENT FOR MY ARGUMENT

“Maybe dn could give us an official religio-historical reason why [patently offtopic baity nonsense of no import to the thread]“
Come on, Roy!

165

Plume 01.17.14 at 11:24 pm

Marx didn’t believe the markets were in perfect equilibrium. Far from it. But a lot of the neoclassical economists did and do. John Quiggin’s book, Zombie Economics, takes a look at that very same thing.

166

Plume 01.17.14 at 11:31 pm

Ed Herman 164,

Why would you need to resort to barter when wages are more than high enough, and prices more than low enough, for you to afford what you need?

Unlike in our current system, in my proposed alternative, wages and prices are set to benefit all citizens. Unlike capitalism, which sets wages and prices to benefit ownership, in my alternative they’re set to enable comfortable living, health and safety for the populace. They’re actually configured to do this. Society’s welfare is the goal. Not that of the business class, which does not exist in this alternative.

I think some of you are still viewing this through the prism of capitalism, and basing criticism from there. The same rules don’t apply. Incentives are totally different.

Use-value is paramount. Exchange-value is gone. Decisions are no longer made to enrich a tiny few. They’re made to radically improve quality of life for all citizens.

It’s as if you purposely leave all of that out of your critique. As if you think this alternative retains all the ugliness of capitalism without alteration.

It’s another world, not a tweaking of our current one.

167

bob mcmanus 01.17.14 at 11:47 pm

162: For the most part, Marxists are historical materialists, and analyze existing political economies for the purpose of overthrowing them, or deciding conditions aren’t yet right. They create no comprehensive systems and definitely don’t design Utopias. Theory is to inform almost immediate praxis, and then theory is adjusted according to results.

Marx famously and deliberately never said much about “after the Revolution.”

Michael Roberts is an actual Marxian economist.

168

Plume 01.17.14 at 11:56 pm

bob 167,

This is one of the reasons why it’s absurd to blame Marx, who died in 1883, for what Lenin and Stalin did, etc. Marx never created a blueprint for revolution. He was, indeed, far more interested in dissecting existing relations of production and seeing how they work and fit together.

He helped established the most rigorous analytical program ever when it comes to examining how capitalism works, what makes it tick, its internal contradictions and effects.

All the other schools fall short of its rigor, though I’d say the Keynesian school comes in second place.

Neoclassical analysis is laughable, primarily due to its basic role as cheerleader. I can always tell someone’s gullibility when they put down Marxian critique while holding up that of virtual officially sanctioned shills.

Mattski strikes me as someone blindly gullible, and I almost feel sorry for him. Not sure yet about his shilliness. But I’m leaning toward that view.

169

Chris Warren 01.18.14 at 12:18 am

Mao Cheng Ji

Yes there is ambiguity in the word profit. A few decades ago I would have presented your argument as well.

However, society generally expects that anyone should be able to profit from their own experiences, education, trials and errors, and labour. This is the basis of innovation.

Capitalists like to camouflage two meanings into one – eg combining money and IOU’s as supposedly the same thing!

Similarly with profit. There is self earned profit as shown by a Robinson Crusoe fable, which has no expropriation. Then there is profit achieved by expropriation.

Normal profits are just a representation of surplus product. Capitalist (and feudal) profits represent surplus value.

So the distinction between two types of profit is based on the difference between surplus product and surplus value.

However if people want to avoid the word profit entirely – this is understandable but there has to be some other terminology. There is similar ambiguity in the word capital.

170

Plume 01.18.14 at 12:28 am

Chris 169,

Well said. I generally use it in the capitalist sense when discussing capitalism. As the remainder after costs are deducted. As in, what is leftover after ownership, workforce and overhead have been covered. Revenues minus all overhead.

Apple made 41 billion in profits in 2012, and now has an additional cash pile of 162 billion, for instance.

171

bob mcmanus 01.18.14 at 12:36 am

Who among you, excepting Halasz, know of what I speak when I say “Walter Benjamin’s Angel?”

Let us talk about the subject

Almost all of us, like 99.99% of us, are bourgeois-liberal capitalist subjects, who see and can only see ourselves as self-commodifying objects of history and victims of Capital, the Patriarchy, Racism, Colonialism. We can only see Capital, the Patriarchy, etc and all we can do is describe analyze and understand it.

The proletariat, and maybe after Hardt and Negri, the post-Capitalist subject is both the object and agent of Capital etc. She says:” I, and no one else, created and am creating the Patriarchy right now” She becomes the subject of history but remains the object of history. She can only see backwards cannot see the future.

This is how one pictures the angel of history. His face is turned toward the past. Where we perceive a chain of events, he sees one single catastrophe which keeps piling wreckage upon wreckage and hurls it in front of his feet. The angel would like to stay, awaken the dead, and make whole what has been smashed. But a storm is blowing in from Paradise; it has got caught in his wings with such violence that the angel can no longer close them. This storm irresistibly propels him into the future to which his back is turned, while the pile of debris before him grows skyward. This storm is what we call progress.

The subject/object of history is the revolutionary subject. She tosses gasoline and matches in front of her on the debris with her back turned toward the future.

The subject of socialism does not yet and cannot yet exist, and we have no idea what she will see.

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Plume 01.18.14 at 12:47 am

Last comment for the evening:

My starting point is here. Our current system produced the following:

A median salary (in America) for individuals of roughly 27K. The richest 400 Americans averaging more than 300 million a year, and now controlling more wealth than the bottom 60% of the country combined.

The top 1% taking in roughly 20-25% of all income, while holding roughly 42% of all wealth.

One family, the Waltons, heirs to the Walmart fortune, holding more wealth than the bottom 40% combined.

The richest 20% in the world now consumes 85% of all resources. It’s estimated that if everyone lived like the average American, we’d need four entire earths to meet demand for natural resources.

Wages for rank and file (in America) falling or, at best, staying even for the last forty years.

__________

My alternative system starts with the premise that the above is unacceptable. It includes social justice, equal rights, human rights, equality under the law, full democracy, including the economy, free education for life, free health care for life, free public transport and access to cultural arts venues for life. It returns control to communities and the individual, all of whom have equal say and equal power in society. Included in those guarantees are the following: clean, safe water and food supplies, organic only farming practices, sustainable energy, agro, transport and cleanup.

No one who wants to work is denied the chance. There is no unemployment, unless one decides not to work.

To me, the guarantee of a massive increase in quality of life for the masses is worth the sacrifice of eliminating (for the few) the ability to get rich — especially in light of the fact that 1% or less of the population ever will. And we can’t have both.

We can’t have a thriving democracy, with a high standard of living for everyone, and have capitalism. We can’t have true democracy, including the economy, and have capitalism. We can’t have an egalitarian society, based upon 100% equality under the law and have capitalism at the same time. We can’t radically reduce, if not eliminate, hierarchies and inequality and have capitalism.

So, it’s a choice between two things:

1. A hierarchical society, based upon economic apartheid, with massive inequality, recurring recessions, depressions and bailouts, with massive waste and pollution built in . . . .

or

2. A radically democratic society, one based upon egalitarian principles, where everyone has equal say and power, and everyone is guaranteed work, safe food and water, lifetime education, health care and access to the fruits of society — without worrying about ability to pay.

Do you want a society set up to benefit the 1%? Or a society set up to benefit 100% of the population, with the acknowledged loss of privileges for the upper classes, which will no longer exist?

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Plume 01.18.14 at 12:49 am

Well, the really final comment, cuz I just read McManus.

Is that from his Illuminations? I have it here at home with me.

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bob mcmanus 01.18.14 at 12:55 am

Oh, and if the revolutionary subject sounds like a solipsist, that’s because we bourgeois individuals can’t understand the revolutionary subject, which is a collective subject, until we are burning shit down and taking their stuff along with her.

Most “solidarity” is bourgeois liberal identification of one sort of another, the narcissistic objectification of oneself, a wearing of a uniform and looking in the mirror.

“I’m so pretty”

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bob mcmanus 01.18.14 at 12:57 am

Theses on the Philosophy of History

Now I have to get back myself to The Construction of Racial Identities in China and Japan which is no fun.

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Hector_St_Clare 01.18.14 at 1:02 am

You’re never going to have a radical democratic society, Plume, even if such was desirable, which it isn’t. You can have democracy at the level of small units (worker’s cooperatives, local governments, etc.) but ultimately governments are always going to be run by one form of elite or another. The choice is between a society run by economic elites (capitalism) and one run by ideological elites (socialism, though you could have non-socialist variants on the same pattern).

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Hector_St_Clare 01.18.14 at 1:04 am

Re: All the other schools fall short of its rigor, though I’d say the Keynesian school comes in second place.

Sweezy’s “Monopoly Capital” is an attempt to hybridize Keynesianism with Marxism, actually. (He fully acknowledges that Keynesian tactics could in theory stabilize capitalism, but then goes on to argue that no capitalist society ever can or will go the full Keynes, because to do so would empower the working class to an intolerable degree).

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Cranky Observer 01.18.14 at 1:06 am

= = =
Nothing? You mean walking into a store and having a choice about what to spend my money on is not democratic? Having a choice about which news outlets to get my news from is undemocratic? Having a choice about which art, which music, which culture to patronize is undemocratic? = = =

There’s certainly a lot of truth there; _Red Plenty_ and all that. In fairness however Having worked for several fairly powerful consumer products firms I can report that you really have a lot less ‘choice’ than you think you do, and you can be manipulated a lot more easily than you think (me too for that matter and I’ve seen the sausagemaking). Breakfast cereal was mentioned upthread and that’s a good example: nothing has really changed since the FTC’s failed collusion case of the early 1970s. There are 2.5 firms that hold 95% of the cereal market and that dictate to grocery stores what you will see on the shelf, how, and when; and that used to flat-out own long stretches of the TV wasteland. You can try sending a market signal by purchasing one of those organic boutique cereals that have popped up since 2000, but if one of the big 2 didn’t actually create it (read the really fine print) they will buy out the maker within a year or two.

And that’s just a simple example. Things get really ugly in consumer electronics, durables, and home construction supplies. You as consumer are just that – the consumer. You do as you are told 85% of the time and that’s sufficient to maintain a corprocracy in which you have essentially no voice or choice.

Cranky

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godoggo 01.18.14 at 1:38 am

Or you could just buy your cereal at the 99 cent store. Cheaper that way, too.

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Lee A. Arnold 01.18.14 at 1:48 am

Chris Warren #157: “Once the standard conditions of free markets are truly met – all capitalist profit is competed away”

Exactly right. But then, if you as a worker save your money and lend it to, or invest it, in a business start-up to get a return on that money and/or some of the profit until such time as it is competed away, — then, at that very moment, you are by definition a capitalist. (And it is not necessarily environmentally damaging.) Your definition of “capitalism” appears to be “monopoly capitalism”. “Monopoly” is, in the standard econ textbooks, one of the main market failures that prevent free markets.

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mattski 01.18.14 at 2:02 am

Cranky,

I don’t think I’m terribly naive about the power of multi-national corporations, though I’m sure there is much I could learn. But the claim I was responding to was this,

And, sorry, there is nothing “democratic” in capitalism.

Where I live I have choices not just within stores but between stores. I can and do avail myself of locally produced breakfast cereal, eggs, milk, beer, coffee, chocolate, corn chips, vegetables, liquor and etc to speak only of food & drink. These local producers are privately owned and they play in the “capitalist” marketplace.

The extent to which large corporations reduce consumer choice and present a facade of variety shouldn’t be underestimated. But there too it ebbs and flows does it not? New players come into the market, sometimes they get bought out, sometimes they fold, sometimes they might survive for a time. Laws and regulations governing anti-trust also ebb and flow. The entire system remains in flux.

But some folks live in a world of absolutes, and that is imaginary.

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Bruce Wilder 01.18.14 at 2:14 am

CWOnce the standard conditions of free markets are truly met – all capitalist profit is competed away . . . You only get a sustainable economy and full employment when capitalist profits are eliminated . . . They are normal profits. They represent real value and fall to the actual producers of this value and in proportion to their contribution.

Shall I tell you what the theoretical standard condition for perfect competition in free markets is? It is no strategic behavior. Everyone behaves even more stupidly than is actually possible. This is the assumption from which you are projecting the shape of utopia.

183

Chris Warren 01.18.14 at 3:14 am

Lee A. Arnold

In the long-run, saving and investment either transfers existing resources or utilises unused resources. Presumably, the first to move will be the more marginal resources.

If there is free entry, then the new occupation will (at equilibrium) will only obtain the same premium as the resources remaining in their own previous occupation. This is a wage. The net effect, assuming no capitalism, is that real wages rise. There is no need for capital to accumulate itself.

Saving a sum of investment that then does something useful (ie productivity increase to fund wage increases) is not capital. Capital accumulates capital; in essence via falling factor shares going to labour. This is what the evidence shows.

This is the real definition of capitalism – and it does need monopoly or otehr countervailing tendencies to keep its so-called alternator running.

184

Lee A. Arnold 01.18.14 at 3:53 am

How can the net effect be a rise when it only obtains the same premium?

185

john c. halasz 01.18.14 at 4:06 am

@182:

Instrumental action occurs when. given any arbitrarily postulated end or purpose, it is a question of calculating the most efficient means toward achieving that end. Strategic action is instrumental action, when one or more of the means toward achieving its end is another agent. A moment’s reflection will observe, that as soon as strategic action is applied extensively and reflexively, it collapses upon itself: it becomes incalculably complex, since the anticipated behaviors of others must be held constant in any “strategic” calculation. Some other basis of social interaction and cooperation must be assumed or arrived at for strategic action to be applicable at all. Such are the explanatory limits of “pure” functionalism, (i.e. “nihilism”, abysmal cynicism, the eradication of all normative considerations).

“Perfectly competitive markets” is, of course, both a weirdly logically inverted basis for constructing any realistic economics and an impossibly absurd idea of any basis for social cooperation, whether functionally or normatively induced. But even so, the notion that profits would end up competed away and the notion that firms must arise on the basis of limiting competition follow from that model. And any “strategies” that would arise from such a basis must be derived from repressing, in order to hold “constant”, the strategic behavior or capacities of (potentially competing) others. That’s what “power” in one of its declensions is all about. Regardless of the costs to social cooperation and human ends. The repression of strategic behavior is neither a basis for utopian thinking, nor its critique. Rather its a means of gaining insight into the mess we’re in.

186

Bruce Wilder 01.18.14 at 4:39 am

its a means of gaining insight into the mess we’re in

A faulty means would be my point.

the notion that profits would end up competed away and the notion that firms must arise on the basis of limiting competition follow from that model

There’s an unexamined leap from “no strategic behavior” to “competition”, which makes no sense, but has become very convenient to the construction of neoliberal propaganda. I suppose it is the ol’ “invisible hand” notion that competitive strategic behavior can be self-defeating in ways that protect and promote a general or public interest; it is in these murky waters that “market failure” and self-regulating “markets” (aka self-regulating industry) swim, alongside such tired cliches as the bugaboo of “monopoly capitalism” (like competitive capitalism is such a perfect peach).

A moment’s reflection will observe, that as soon as strategic action is applied extensively and reflexively, it collapses upon itself: it becomes incalculably complex, since the anticipated behaviors of others must be held constant in any “strategic” calculation.

Which is why society’s functional social cooperation is accomplished through institutions, which resolve that complexity into the games people play. Constraints and enforced rules simplify the strategic interaction, and control of processes dampens variation into calculable risk. There’s no end of history of course, and institutions grow, age and are eroded and break down, like any physical mechanism. Capitalism is prone to crisis. Shocking!

187

Chris Warren 01.18.14 at 4:46 am

Lee A. Arnold

You have misunderstood.

Same premium means same across society NOT same across time.

If a bundle of resources move to a more productive site – remaining resources will adjust.

They will adjust until the gain (return or premium or increment or whatever) is equalised. As this adjustment is due to an increase in productivity – real wages must increase for all. If capitalists exist they may block this process to their own advantage.

If a disease or disaster damages productivity of a bundle of resources – some will move the other way and compete against the rest. Returns will fall – real wages must fall for all. If capitalists get into this process they will shift the burden disproportionately.

188

Plume 01.18.14 at 5:05 am

Bruce Wilder 186,

Capitalism is prone to crisis. Shocking!

Yes, more prone than any previous economic system. Which is yet another reason to dump it.

Here’s one of the all-time best explanations for why, from David Harvey. Animation by RSA:

189

Plume 01.18.14 at 5:09 am

So, Mattski,

Your conception of democracy boils down to this:

To buy or not to buy.

IOW, Hamlet at the Mall.

Sheesh! Only in America.

Man, you have very low standards, when it comes to democracy. Consumer choice? Rather the illusion of choice. That’s enough for you?

If capitalism were “democratic,” we’d all have a say in where the products on our shelves come from; how much they cost; how much workers make for producing them; their overall working conditions; the ingredients and the processes involved; the environmental impact; the waste created; trade relations with suppliers, etc. etc.

If capitalism were “democratic,” we’d get to decide whether or not we even want those products in our community, or those businesses. We would decide, democratically, what was produced, how it was produced, where it was produced, along with prices and wages and working conditions — at the very least. That wouldn’t be left up to bosses only. As in, a fraction of the population.

Your suggestion that consumer choice — rather the illusion of choice — is sufficient to call it “democratic” is straight out of the propertarian playbook. To be honest, I’ve never bumped into a “liberal” who believes it is even remotely “democratic.” The only people who push such an absurd idea, from my experience, are right-wingers, Ron Paul fans, right-wing libertarians in general. In short, capitalist cheerleaders.

No one with a clue as to the actual meaning of “democracy” would even think of suggesting capitalism is even compatible with it. They’d be too embarrassed.

190

bob mcmanus 01.18.14 at 5:23 am

I think I like 185 a lot, to the degree I understand it, but I’m either reading it differently than Wilder, or reading it wrong. Almost like poetry it is.

The repression of strategic behavior is neither a basis for utopian thinking, nor its critique. Rather its a means of gaining insight into the mess we’re in.

I’m trying. I suppose tactical moves remain possible?

When there’s no future, how can there be sin?
We’re the flowers in the dustbin
We’re the poison in your human machine
We’re the future, your future

191

Lee A. Arnold 01.18.14 at 5:23 am

Chris Warren, What are you calling the “premium”?

192

bob mcmanus 01.18.14 at 5:40 am

Giovanni Arrighi, Adam Smith in Beijing on some of the roots of contemporary China’s “Industrious Revolution”

Absolutely essential reading.

First, while the Leninist principle of the vanguard party was
retained, the insurrectional thrust of Leninist theory was abandoned.
In the deeply fragmented statal structure of warlord-GMD China
there was no “Winter Palace” to be stormed or, rather, there were to
many such palaces for any insurrectionary strategy to have any chance
of success. The insurrectional aspects of Leninist theory were thus
replaced by what Mao later theorized as the “mass line” – the idea
that the vanguard party ought to be not just the teacher but also the
pupil of the masses. “This from-the-masses-to-the-masses concept”
– notes Fairbank – “was indeed a sort of democracy suited
to Chinese tradition, where the upper-class official had governed
best when he had the true interests of the local people at heart and so
governed on their behalf.

Second, in seeking a social base the CCP gave priority to the
peasantry rather than to the urban proletariat-Marx’s and Lenin’s
revolutionary class. As the 1927 GMD’s massacre of Communist-led
workers in Shanghai had demonstrated, the coastal regions where the
bulk of the urban proletariat was concentrated were far too treacher­
ous a ground from which to challenge foreign domination and the
GMD’s hegemony over the Chinese bourgeoisie. Driven ever farther
from the seats of capitalist expansion by the Western trained and
equipped GMD armies, the CCP and the Red Army had no choice but
to thrust their roots among the peasantry of poor and remote areas.
The result was, in Mark Selden’s characterization, “a two-way
socialization process,” whereby the party-army molded the subaltern
strata of Chinese rural society into a powerful revolutionary force,
and was in turn shaped by the aspirations and values of these strata

193

Chris Warren 01.18.14 at 6:21 am

Lee A. Arnold

Huh?

Premium means more than compared to others (incl. previous). The premium is the difference.

Positive “gains”, “increments”, “profits”, “premiums”, “returns” are all based on positive changes.

You can probably mutually substitute any of these for any other.

194

mattski 01.18.14 at 12:17 pm

Your conception of democracy boils down to this: To buy or not to buy.

I never implied any such thing. And I do despair of having a rational conversation with you.

If capitalism were “democratic,” we’d all have a say in where the products on our shelves come from; how much they cost…

Well, we do have a say. It may not satisfy you, but it is a vote. Sorry if the world isn’t perfect.

We would decide, democratically, what was produced, how it was produced, where it was produced, along with prices and wages

You show very little awareness that your desires are in conflict with each other. You want the best, most nutritious, most earth-friendly products, for the lowest price AND you want the workers who produced these awesome products to be paid handsomely. Why, it’s like you want magic!

No one with a clue as to the actual meaning of “democracy” would even think of suggesting capitalism is even compatible with it.

So, people buying and selling freely, in a marketplace, is something people would never voluntarily want to do. And so on….

195

Lee A. Arnold 01.18.14 at 3:15 pm

Chris Warren #193, I know what the dictionary definition of “premium” is. My question is: In your two phrases,

“If there is free entry, then the new occupation will (at equilibrium) will only obtain the same premium as the resources remaining in their own previous occupation.” (#183)

and

“Same premium means same across society NOT same across time.” (#187),

what is this premium composed of? In ohter words, what are you referring to? In other words, how is it spoken of daily, by the people working at the business? In other words, how is it measured? Etc., etc. — In other words, What is the premium?

196

Plume 01.18.14 at 5:05 pm

Mattski,

So, people buying and selling freely, in a marketplace, is something people would never voluntarily want to do. And so on….

Yes, people may voluntarily want to do that. Sure. But that’s not “democracy” and has nothing to do with “democracy.” You sound very confused about the meaning of the word. Perhaps you might want to, oh, say, look it up? Or, failing that, go into any university, find Poli Sci professors and talk to them? They should be able to end your confusion.

You show very little awareness that your desires are in conflict with each other. You want the best, most nutritious, most earth-friendly products, for the lowest price AND you want the workers who produced these awesome products to be paid handsomely. Why, it’s like you want magic!

No. There is no conflict in my system along the lines you suggest. There is in capitalism, of course. Which is my point. But in the system I describe, unlike capitalism, wages aren’t derived from revenues. They come from an unlimited pool of electronic digits, owned in common. It doesn’t matter how much X store sells or makes on X products. No one cares in this system, because it’s not about making money or profit. There is no link between the successful sale of products and payment for labor done. No link. It’s 100% severed. You work, you get paid, and paid according to those preset wages I talked about earlier.

The goal isn’t to make more and more sales each quarter. The goal is to fill societal needs and nothing more. The goal with capitalism is to sell whatever you can, regardless of need or benefit to society, so ownership makes a lot of money.

Workers in capitalism are overhead, which is why they’re the first to go when a business falters. And because business owners want to make money for themselves, rather than fill societal needs, they don’t think twice about shipping jobs overseas or automating them out of existence.

See the difference?

In my system, societal need is king. Labor is what is valued. And use-value, not exchange-value is king.

So, yes, we can produce the finest, safest, healthiest products and services and keep wages high for everyone. There is no conflict.

197

Plume 01.18.14 at 5:07 pm

The above response is in reference to Mattski #194.

198

Plume 01.18.14 at 5:20 pm

Addendum,

And for those who might say, well, unlimited electronic digits is absurd . . . think for a moment about our current system with its 1000 trillion in derivatives. What could be more absurd than that, given the total GNP of the world being in the 60 trillion dollar range?

The capitalist system employs a kind of fictional, highly arbitrary conception of money as well, though people do become rich in the process of trading those fictions. There aren’t any real assets backing up that 1000 trillion, of course. And I’m not talking about gold, which is itself a representation of value. I’m talking about hard assets with actual use-value.

If some Star Trek alien being had the power to call in all of our notes on derivatives and their cousins, the whole thing would collapse.

In my system, we put the fiction to the best possible use for every single person in society, rather than just the top 1% or .001%, as with capitalism. And, unlike our current system, my alternative actually does back up the currency with labor value. Its distribution is tied to that.

Labor trumps capital in reality even in capitalism. In my alternative system, there is no capital. Labor stands alone, triumphant.

199

Bruce Wilder 01.18.14 at 6:27 pm

I was trying to imagine my self at the special after-Xmas returns desk at Sears, seeking to exchange Capitalism for Plume’s Special System, like it was the Lego Tower Bridge set and I wanted credit against an Xbox One, instead.

I can imagine all kinds of difficulties. Did they have Plume’s Special System in stock? The clerk isn’t certain. It’s the one, without Capital, Labor Triumphant — ring any bells?, I beg plaintively. It might not even be an issue, because I cannot seem to find my receipt. Plus, how is the clerk to confirm that I brought back all the pieces — they can’t take it back, without all the pieces.

200

Plume 01.18.14 at 6:42 pm

Bruce 199,

Ho ho ho, ha ha ha. You so funny.

Now, please tell me, as I asked before, and you ran from, what would you do to make a better system? Given that you and Mattski are masters of the practical and the pragmatic, that should be pretty easy.

And for bonus points: Maybe you can answer what Mattski runs from as well:

What have “liberals” done for the last forty years that’s so wonderful, other than play (the most ineffective) human speed-bump before the onslaught of the right?

Oh, practical, pragmatic one . . .

201

Tyrone Slothrop 01.18.14 at 7:01 pm

One of Plume’s ideas that I would be interested in pursuing the potential for is that of selecting the array of candidates available for office via a lottery – and presumably with single or, at most, dual term limits in place – in lieu of primaries or party leadership conventions, etc. Would you establish age and/or experiential requirements in order for an individual to be eligible for the lottery, or would you wish to encourage the chance for less-experienced, but perhaps more idealistic and enthusiastic youth to campaign for the office? Would the lottery be completely random, or would you demand an equal or proportionate representation by gender, ethnicity, income, etc? What are the trade-offs between eliminating professional politicians from the process and accepting inexperienced, possibly naive and incompetent individuals? Would the constant turnover and noviciate status render the elected candidates more susceptible to being dominated by the bureaucracy, or would their outside status allow them to negotiate the halls of the civil service with more initiative and flexibility? How could you allow corporations and interest groups their proportionately rightful access to the candidate’s ear while minimizing their potential for capturing the latter, either through promises of remuneration / employment / access after the term is over, or directly influencing them during their time in office?

Of course, merely establishing such a system would require some darn impressive politicking, but, assuming it could be done, would it actually prove a worthwhile change? Or one fraught with (un)foreseen perils?

202

Bruce Wilder 01.18.14 at 7:30 pm

When I pointed to unfortunate aspects of the experience of the French Revolution, you asked me for my program for 1789. I did not take that request seriously. I don’t take anything you’ve written seriously. How could I? You don’t propose much of anything, but good intentions, bolstered by manic self-regard.

I shouldn’t speak for mattski, with whom I often disagree, but I think we might both take the position that a realistic proposal for a wholly better system isn’t easy, and that’s the point. If you think it’s easy, you are missing something — missing rather a lot, in fact.

I agree with you that liberalism has not been effective in opposing the rise of the plutocracy. As neoliberalism, it has facilitated the dismantling the New Deal. There’s profound intellectual failure there, and, of course, corruption. Basic institutions — economic and political — institutions that framed stability and progress for 40 years or more, are failing just as surely as an old bridge, whose maintenance has been neglected and whose structural integrity remains unexamined. But, you don’t know anything about institutions or bridges. So, what good are your complaints and high-mindedness?

203

Plume 01.18.14 at 7:39 pm

Tyrone 201,

A lot of very good questions there.

First, no corporations exist. The means of production are owned entirely by the people. We establish limits on size for all institutions to further prevent consolidation of power and power centers, period.

The means of production exist solely for the benefit of the people. There is no production for the sake of money-making for the few — or anyone, for that matter. All production is based upon public need, public good, public benefit, and within the boundaries of environmental safety and sustainability. It is all geared toward the citizen and the worker, not the capitalist. He or she doesn’t exist, as capitalism doesn’t exist.

100% need-based, and it’s all about use-value.

Also, there are no political parties. They are all banned under the Constitution. It really is just “one person, one vote,” all of equal value.

Civil servants would also go under the tier system, as with any worker, anywhere. My suggestion is something like this:

Apprentice; senior apprentice; teacher; senior teacher. But the names aren’t important. Just the four steps and the maximum of 4-1 in wage differences.

Good question about ages. I was thinking 15 for voting, and 18 for public service rotation. We don’t want to disrupt one’s education, so public service would require at least the completion of high school, or an equivalent in trade school, cultural arts school, or rigorous testing in lieu of.

To give some flexibility for various situations, the rotations for public service could begin at any time from age 18 to 30. But must be met within that time frame. Exceptions given for this or that hardship. Serving as community rep would have a wider range: 18 – 35; regional rep 18-40; national rep 18-45. Experience would come from the stepping stone process from those three types:

Regional reps are drawn by lottery from among those who have served as local reps; national reps drawn from those who have served as regional. Something like that.

Maximum three tours total. But just one each for any of the three types.

204

Plume 01.18.14 at 7:47 pm

Bruce Wilder 202,

You asked me what I would do, but refuse to do the same when asked in return. And, no, I didn’t ask you for just 1789. I asked for then and now, since you made such an issue of the lack of practicality and pragmatics among revolutionaries.

And don’t flatter yourself. I don’t take you seriously, either. To me, you’re a pompous little prig on a bulletin board, who doesn’t have the courage of his own convictions, to the point of not even wanting to risk them in print. You’d rather take lame and unfounded pot shots at others instead.

Also, yes, I know a lot about institutions and bridges. I’m in my 50s, well educated, grew up just outside of DC and am well acquainted with a host of them.

In short, Bruce Wilder, get over yourself.

205

Tyrone Slothrop 01.18.14 at 8:20 pm

Thanks for your thoughts about my musings in regard to your own societal schematic, Plume: however, I was actually considering the potentials of implementing a lottery system as a reform of the existing American (or, really, any other liberal democratic country’s) political system. My apologies, as I wasn’t at all clear about that in what I wrote, and that I had intended it to apply to your proposal would naturally seem to carry over from our previous exchange. I’m curious about its feasibility for the here-and-now of a system in need of reforms.

206

Mao Cheng Ji 01.18.14 at 8:54 pm

Instead of a lottery system, you could give it some serious disadvantage, to discourage the careerists, opportunists, and power-hungry from applying. Like, paying the politicians the minimum wage and auditing their finances for possible conflicts of interests every year for the rest of their lives.

I haven’t thought it through, obviously (might be difficult to cover all the ground), but you get the idea. To make sure a public servant has no other incentive but the privilege to serve the public.

Maybe it has already been suggested; I haven’t read most of this thread. And a similar rule would do a lot of good for the medical profession, I think.

A lottery is a decent idea too. I think it was Lenin who said that any cooking lady can manage the state.

207

Plume 01.18.14 at 9:07 pm

Tyrone 205,

Yes, I think it would work really well in our currently existing system, too. It would rid us of bought and sold politicians and the need for payback.

No one would actually “run” for office. They would be selected from a pool and would do their time, like with the old draft, or Peace Corps, or something like that.

No more need for billions spent and the required payoff once in office. No more restriction on who can run. Our Congress is not “representative” in any real sense, being a millionaire’s club and filled with almost nothing but 1%ers and higher.

A lottery system would open things up to everyone, and help infuse a sense of civic duty in the populace. It would extend democracy to all comers, not just the ruling class. It seems more than likely this would have direct and massively positive effects on overall fairness, justice, accountability and responsiveness to the public at large.

208

Plume 01.18.14 at 9:08 pm

In short, it would be from the public, for the public. Instead of from the 1% or the .001%, for the same. Etc.

209

Chris Warren 01.18.14 at 9:50 pm

Lee A. Arnold

I do not quite get your question. However a simple example may help.

Just assume we have two different producers – one producing pots, and the other producing corn.

Also assume full employment and pots and corn exchange in equilibrium with their utilities so exchange ratios are stable.

Now if there is an innovation (manure becomes available) the productivity of corn producers goes up.

Some pot-makers will switch to corn-production.

The supply of pots will fall but the demand schedule for pots will not decrease, so price of pots will rise (normal good).

Pots will now be sold at a premium to previous prices.

And the income of corn-producers will also rise – their labour will now earn more than previously.

So the increased productivity is shared across society.

So as Isaid earlier:


They will adjust until the gain (return or premium or increment or whatever) is equalised.

We only need one extra condition – no accumulation by a private capitalists.

Once a capitalist intrudes – this process is blocked and, in a few generations, economic crisis erupts.

210

mattski 01.18.14 at 10:10 pm

Plume

Yes, people may voluntarily want to [buy and sell things in a marketplace]. Sure. But that’s not “democracy” and has nothing to do with “democracy.” You sound very confused about the meaning of the word.

Except I wasn’t attempting to define democracy. (You twit!) It was YOU who made the claim that market economics (capitalism) was incompatible with democracy. And just so you can go full No-True-Scotsman once again, your claim is soundly refuted by history.

No. There is no conflict in my system along the lines you suggest. … But in the system I describe, unlike capitalism, wages aren’t derived from revenues. … There is no link between the successful sale of products and payment for labor done. No link.

Then why have money at all? Did anyone ever say to you, “if wishes were horses?”

Here is a game anyone can play. Find the problem with this statement (helpful emphasis added):

The capitalist system employs a kind of fictional, highly arbitrary conception of money as well, though people do become rich in the process of trading those fictions. There aren’t any real assets backing up that 1000 trillion, of course.

So, Plume, when you say things like, “get over yourself,” I am quite confident that the Greek god of Irony gets a prodigious boner. And that, indeed, is what I am saying.

211

mattski 01.18.14 at 10:15 pm

Re filling public positions by lottery. This was practiced in Ancient Athens. See, for example, one of the greatest books of the 20th century, I.F. Stone’s, The Trial of Socrates.

212

Plume 01.18.14 at 10:23 pm

Mattski 210,

Nothing? You mean walking into a store and having a choice about what to spend my money on is not democratic? Having a choice about which news outlets to get my news from is undemocratic? Having a choice about which art, which music, which culture to patronize is undemocratic?

and

Where I live I have choices not just within stores but between stores. I can and do avail myself of locally produced breakfast cereal, eggs, milk, beer, coffee, chocolate, corn chips, vegetables, liquor and etc to speak only of food & drink. These local producers are privately owned and they play in the “capitalist” marketplace.

That’s you responding to my comment about capitalism not be democratic in the slightest. It’s difficult having rational discussion with someone who forgets his own posts.

213

Plume 01.18.14 at 10:27 pm

Mattski 210,

Tell me how there is a conflict in my system. Be specific. Suggesting my comments are filled with irony isn’t an argument or a demonstration.

I showed you why there is no conflict. Again, because, unlike capitalism, in my system, wages don’t come from revenues. They come from a pool of numerals without end, held in common. They aren’t used to increase one’s “wealth.” But as a marker for labor done and to be used as for the purposes of direct exchange and accounting. They have no “worth” outside the system and their worth is tied to that system, with price and wages set in stone.

214

Hector_St_Clare 01.18.14 at 10:31 pm

Re: A lottery system would open things up to everyone, and help infuse a sense of civic duty in the populace. It would extend democracy to all comers, not just the ruling class

I’d prefer a lottery to what we have now, but I’d really prefer rule by a vanguard party to either. Most people are neither qualified nor deserving or having a role in running the country. Their civic duty should be to obey what the vanguard tells them.

215

Plume 01.18.14 at 10:33 pm

A thought experiment.

Family X totals six people. Two adults, four children. The parents hand out numbers to the kids for chores done. Make your bed, you get five digits. Take out the trash, you get seven. etc.

The kids can accumulate those numbers and then exchange them for toys, food, movies, games, etc. The number of digits needed for goods and services is set beforehand.

The pool of numbers is infinite. Nothing limits their distribution other than chores done and the amounts set up in advance for each chore. The family owns those numbers in common. They don’t come from “sales.” They’re just managed and then distributed by the parents, according to work done.

This can easily be extended throughout an entire system, as long as there is agreement and it’s closed.

That’s the basic idea behind what I’ve written.

216

Hector_St_Clare 01.18.14 at 10:40 pm

Plume,

Your ‘family’ model presupposes the existence of parents. I.e. in this analogy, an authoritative state, that holds power based on an inherent right to rule, not based on the arbitrary whims of the kids. We don’t let children elect their parents, and we shouldn’t.

I like your family model, as I believe in rule by a vanguard party, but don’t you see that it completely undermines all your nattering nonsense about radical democracy?

217

Plume 01.18.14 at 10:51 pm

Hector 216,

Not really. Parents aren’t required to oversee distribution. The lottery, rotational civic duty, civil servants, community assemblies, full on democracy at the local, regional and national levels, etc. etc. takes the place of the parents.

218

Plume 01.18.14 at 10:53 pm

It is one big family, though. Just not in the sense of parents above, children below.

Society as one family, working toward the same goal, for that one family.

219

Plume 01.18.14 at 10:53 pm

Gotta run. G’day, all.

220

Hector_St_Clare 01.18.14 at 10:54 pm

If you don’t have people above and below (in the political sense), you can’t have a functioning society. I do not want society to be run by the Honey Boo Boo fan club.

221

Tyrone Slothrop 01.18.14 at 11:18 pm

The idea of candidate selection through lottery has an appeal that’s grown on me, and your inclusion of it, Plume, is its latest promotion that got me to typing. What’s of particular interest is that I’ve encountered support for it in discussions between those of the right, centre, and left of the political spectrum; an unhappiness with the process currently in place is seemingly pervasive, no matter the policies you want your representative to pursue. What’s more, even taking into account that the candidate spread would have to remain tied to geographic districts, a lottery system means that party would become (more) irrelevant – you could conceivably elect representatives from the across the ideological spectrum, including the otherwise surreal possibility of Texans sending a Marxist to Washington. Furthermore, if party bonds are sundered in this way, then the gathering together of coalitions large enough to pass proposed legislation would require some real give-and-take, some genuine outreach and bridge-building, and, ideally, come closer to representing the genuine will of the populace, rather than the self-interested intent of money-wielding business and special interest groups and their lobbyists.

It’s not a perfect solution, it would still be prone to capture by those forces, and discontent could (initially) be severe while districts get used to not being able to predict the political stance of the person they send to represent them – but IMO it’s got some real potentialities for an effective reform of a stalled and dysfunctional system.

222

Lee A. Arnold 01.19.14 at 1:27 am

Chris Warren #209: “Now if there is an innovation (manure becomes available) the productivity of corn producers goes up. Some pot-makers will switch to corn-production.”

No, if the productivity of corn goes up, pot makers will stay in pots. If the productivity of corn goes up, then more corn is produced by existing farmers, now there is a surplus of corn but demand for corn didn’t change, so the price of corn goes down. Pot-makers will not be switching to corn production; corn farmers will be switch to pot production.

223

mattski 01.19.14 at 2:03 am

Plume @ 212

It’s difficult having rational discussion with someone who forgets his own posts.

But I didn’t forget my posts. In fact, I checked them before responding to you. Are you familiar with Venn diagrams? Set theory? You made a claim about the exclusivity of democratic forms and capitalistic forms. You said they were not consistent with each other. So, in a Venn diagram that is two non-overlapping sets. Fair?

I gave examples of markets co-existing with democratic norms; that is, people freely choosing to participate in markets (because they see a benefit to doing so!) So, in a Venn diagram that is two overlapping sets. In making that stipulation, that it is possible to have markets and democratic norms, I am NOT limiting the definition of democracy to markets. Had I wished to do so I may have made some stronger claim. But I didn’t.

Once again, if you want to torture the English language you can argue that Ancient Athens wasn’t the birthplace of the democratic city-state. If you want to torture the English language you can argue that democracy has never existed on earth, and therefore how could it possibly have co-existed with market-based economies. But you would be doing so at the risk of your own credibility.

Although in my opinion, and I’m guessing Bruce would agree, it’s probably too late for that.

224

Plume 01.19.14 at 3:03 am

Mattski 223,

Speaking of torturing the English language. You did in this comment, as well as move the goalposts. To another field.

This is you at #149

[First, you quote me as saying:]

[Me:]“And, sorry, there is nothing “democratic” in capitalism.”

Nothing? You mean walking into a store and having a choice about what to spend my money on is not democratic? Having a choice about which news outlets to get my news from is undemocratic? Having a choice about which art, which music, which culture to patronize is undemocratic?

Notice here I’m not talking about democracy and markets existing side by side. I am clearly talking about the fact that capitalism itself is not “democratic.” Itself. Again, no talk about parallel existence or compatibility at this point. I said what is obvious and self-evident: Democracy is not an internal feature, element, or part of the capitalist system. It is completely external to that system, from the individual business right on out to the totality of the markets.

(Capitalism is, in fact, in obvious and self-evident conflict with democracy. They are at odds, obviously. Though, again, for #149, for our discussion up to that point, I had not yet added that.)

Your claim above is that capitalism itself is democratic, as exemplified apparently by the act of shopping and consumer choice. You then go on to torture the language further by throwing in a negative construction, which was not at issue. Suggesting that I said that shopping and consumer choice were “undemocratic” acts. No. They have nothing to do with democracy at all. It’s not that they are “undemocratic” or “anti-democratic.” They don’t involve democracy in any way, shape or form.

Again, you confused the terms, made a silly claim, and I called you on it. You then threw in all kinds of irrelevant nonsense, including Venn diagrams, in hopes that you could dazzle us with bullshit.

Stop digging.

225

mattski 01.19.14 at 3:38 am

Capitalism is, in fact, in obvious and self-evident conflict with democracy. They are at odds, obviously.

This might be obvious to you and a very tiny minority. It is not obvious to me and, I’d wager, the vast majority of people. The act of ‘voting’ with your dollars seems democratic to me. Perhaps you don’t see this.

I like having a choice between Cheerios or a locally produced organic cereal. I don’t even mind if the local producer makes a “profit.” Actually, I want the local producer to make a profit. I want the local producer to succeed.

Anyway, Plume, you may have impressed a few dyed-in-the-wool Marxists with your zeal. Other than that, probably not so much…

226

Plume 01.19.14 at 4:02 am

Mattski 225,

This might be obvious to you and a very tiny minority. It is not obvious to me and, I’d wager, the vast majority of people. The act of ‘voting’ with your dollars seems democratic to me. Perhaps you don’t see this.

This is what I referred to before. This points to your total confusion about what democracy actually means. And, again, you aren’t talking about democracy and capitalism coexisting. You’re actually saying that capitalism itself IS “democratic.”

As mentioned before: shopping and consumer choice have nothing to do with democracy. You’re not “voting” when you buy something. You’re exchanging currency for goods and services, and none of that entitles you to any say in what the business does, sells, pays, etc. etc.

Your dollars don’t buy you an actual vote in what products hit the shelves. That’s chosen — preselected — for you. Your dollars don’t give you any say in working conditions, wages, prices, sourcing, fair trade practices, adherence to treaties, ingredients, processing mechanics, etc. They don’t give you a say in how much pollution is produced or where it’s dumped. They don’t give you a say in how much waste is produced or where it’s dumped.

Did the consumers in West Virginia buy democratic control over the chemicals that poisoned their water systems? Did consumers in West Virginia buy a say in preventing these all too frequent environmental disasters? No.

In capitalism, the economy is never democratic. It can’t be and still be capitalism. We may put minimal democratic checks and balances on it from the outside, but the economic system itself has zero “democratic” aspects to it.

From the individual business on out, it’s a steep hierarchy, with bosses, with a fraction of the population calling the shots. The few ordering around the vast majority. Does that sound like “democracy” to you? Really? And you do as you are told as a worker in a business or you get fired. That business doesn’t put up its decisions for a vote. Nor do the markets in the aggregate. The wealthiest few call the shots.

We have a plutocracy, Mattski. Capitalism inevitably leads to that, and severe economic apartheid, without serious, rigorous checks and balances coming from outside the system.

227

Plume 01.19.14 at 4:12 am

To make a long story short:

I think you have confused what is sometimes done TO capitalism from the outside with “democracy” existing inside of capitalism itself. You are not alone in this error.

We have lived so long with “liberal democracies” having a capitalist engine, many people blur the two things together.

Democracy is a political system. Capitalism is an economic system. They aren’t the same. They don’t even share Venn spaces. Anything even remotely “democratic” comes from outside the capitalist system. Hopefully, that outside pressure reduces the natural “anti-democratic” nature of capitalism itself. And, yes, by definition, it’s anti-democratic. It’s based on autocratic rule from the top, at the individual level and in the aggregate.

(And I’m not talking about your shopping or consumer choices.)

Another possible point of confusion:

Individual business owners (autocrats) sometimes work together with other individual business owners (autocrats). They sometimes even “cooperate.” This leads some to think of that as something akin to “democracy.” But they leave out the workers, consumers and citizens all around the globe who are subservient to those autocrats and the system they rule in total. Cooperation among the pyramids isn’t democracy.

228

Plume 01.19.14 at 4:12 am

And, on that note, G’night, all.

229

SoU 01.19.14 at 4:40 am

re: democracy and capitalism

i have always understood the injunction of democracy to mean something along the lines of the leveling and equalization of power within a society.
i have always understood capitalism as a system that can only function in so far as individuals are permitted to accrue great imbalances of power – the profit motive, but also the fundamental relation between labor and capital, involve the extension rather than elimination of power imbalance.

sure, we can talk about the formal institutions that underpin both, and there are ways in which these institutions cooperate well with each other. but i believe that democracy, fundamentally, is not some stale check-list of political practices, but instead a moral and political impulse to break down patterns of exclusion and power hierarchies. democracy is the name for the project which works to expand the political space to more voices, and works against any systems that restrict who is included in that discursive space, whether that is formally by laws and such, or effectively in the manner of individuals possessing such an outsized level of power that their single voice can drown out that of many others.

how significant is the ‘democracy’ of choosing bargain over Bounty, when rupert murdoch can buy media empires in 3 different sovereign nations and craft them to spew their ideological message at the eyes and ears of hundreds of millions of individuals on a daily basis? i just don’t see the democratic gains of the former making up for the oligarchic effects of the latter.

230

Chris Warren 01.19.14 at 5:19 am

Lee A. Arnold

No, if the productivity of corn goes up, pot makers will stay in pots. If the productivity of corn goes up, then more corn is produced by existing farmers, now there is a surplus of corn but demand for corn didn’t change, so the price of corn goes down. Pot-makers will not be switching to corn production; corn farmers will be switch to pot production.

This is just so wrong, that there is no point in trying to explain.

231

Lee A. Arnold 01.19.14 at 9:01 am

Chris Warren, Productivity is output per unit input, right?

232

Chris Warren 01.19.14 at 9:23 am

Units of corn per hour, units of pots per hour.

233

Mao Cheng Ji 01.19.14 at 10:21 am

Come to think of it, a lottery system could turn out even more corrupt than the current one. In the current one, its corruption at least has some structure, but when a bunch of random people are bestowed with this huge power, it might quickly turn into an orgy of corruption. Today, buying representatives is a process with some rules, compromises, some limits; in a lottery system it’ll be a Turkish bazaar.

234

mattski 01.19.14 at 12:20 pm

Good morning, Plume.

You’re exchanging currency for goods and services, and none of that entitles you to any say in what the business does, sells, pays, etc. etc.

This is patently false. You don’t see it because for you it’s an all-or-nothing proposition. Lots and lots of businesses make earnest attempts to follow demand. Because it’s good business practice to do so. If my ‘certified organic’ granola starts outselling my non-certified product then–just imagine!–I may start increasing production of the certified stuff. This happens with blueberries and strawberries too…

Similar problem for you: What is democracy anyway? As Lee Arnold suggested, there is a mathematical problem of logistics in having nations (as opposed to very small groups of people) attempt to make decisions collectively. It becomes an absurdity.

Not only that, but have you considered the possibility that democracy itself is undemocratic? Seriously. What happens when people agree to elect a leader, and to give that leader power to make decisions which affect everyone else’s life? Is this some far-fetched paradox thought up by some ghoulish imagination? No, it’s actually reality. It’s the way democracy must work, because decisions don’t get made when everyone is free to continuously object.

So, yes, your head is in the clouds and that is why this debate isn’t terribly utilitarian.

235

Plume 01.19.14 at 3:05 pm

Mattski 234,

You said earlier that most people agree with you that capitalism is democratic, because, you know, SHOPPING!! Sorry, but if they understand the meaning of democracy, they won’t agree with you. At all. You might get some Ayn Rand, Milton Friedman, Von Mises and Ron Paul fans to agree. But that’s pretty much it, if they actually understand the meaning of “democracy.”

Thought experiment:

America is now a fully corporatized nation. There are no elections. There is no Congress or anyone in the White House. There are no democratic assemblies, anywhere. The country is fully privatized. The public sector no longer exists.

Can you have vast freedom of choice still, regarding where to spend your money as a consumer? Obviously, yes. In this fully privatized, fully corporatized nation, without a speck of “democracy,” you have corporations offering you a host of products and services, vying aggressively for your consumer dollar. In fact, you have even more choices now than you had under the previous regime — without any democratic checks or restraints. You have a veritable Babylon of markets and consumer choice. The nation has never bustled with so much variety for the consumer before.

Of course, caveat emptor is now an even greater feature in the deal. But your “freedom” to choose (as a consumer) has increased dramatically.

You, of course, have no say in what the corporations actually do, because there is no democracy in the land, though they lie to you and massage your gullibility by saying that, “Yes, we listen. Your dollars count.” But that’s just bullshit and anyone with a clue knows it.

236

Plume 01.19.14 at 3:17 pm

SoU 229,

Well said. Democracy is a space. It’s a place where we all share “ownership” in a sense. We all have a say in the direction of the nation. We all have a voice.

Capitalism, without checks and balances from the outside, is completely devoid of democracy. Because it is all about private ownership and private power. Private property. Top down decision making. Autocratic. Authoritarian. Created out of the destruction of the commons, using primitive accumulation methods, helped dramatically by the slave trade, indentured servitude, child labor, the forced expulsion of “peasants” from their lands, etc.

Businesses, unless they’re co-ops, unless workers run them, don’t put up their decisions to a vote. Workers don’t have a say in the matter. Ownership at the top decides. Workers implement those decisions for ownership. There is no equality of voice or power. Power resides with the few over the many, from the top down. Obviously. That’s not “democracy.”

This isn’t even debatable. Except to apologists with their heads in the clouds like Mattski. Except for the enablers of economic apartheid, those wide-eyed idealists who believe in the capitalist fairy tale first pushed by political economists like Adam Smith.

237

P O'Neill 01.19.14 at 3:43 pm

As if reading JQ, Douthat responds that Mike Lee and Marco Rubio will keep him with the Republicans for a while longer.

http://www.nytimes.com/2014/01/19/opinion/sunday/douthat-at-last-conservative-reform.html

238

Plume 01.19.14 at 4:14 pm

The essence of democracy is collective decision making. It’s complex, so there is more to it than that, of course. But that’s perhaps the key element.

Collective decision making.

In capitalism, you have collectives (workplaces) and the process of collectivization (workplaces and consumers), but the collective doesn’t make the decision. It implements the decisions made by those at the very top of the organization, the owners.

The few over the many.

That’s not democracy.

There is a left and a right collectivism. Essentially, the left-wing version has the collective decide for the collective, on behalf of the collective. The right’s version is basically the capitalist model. The collective has no say and implements the dictates of the bosses at the top. The collective does the bidding of ownership and acts for and on behalf of ownership.

The left’s version is the essence of democracy. The right’s its antithesis.

239

Hector_St_Clare 01.19.14 at 4:19 pm

Plume,

Just throwing this out there, and I agree with you that capitalism is evil, but getting rid of capitalism is not going to get rid of the expropriation of surplus value. As long as we live in a civilized society, we need a body to run thi ngs, build roads, fund scientific research, construct hospitals and schools, maintain public order, and guide the economy, and that body takes money to run. Socialism will replace the hand of the capitalist by the hand of the state, and hopefully it will be a much gentler hand. But the ‘no gods, no masters’ stuff is just an illusion, and a dangerous one.

Mattski is referring to the market, no capitalism: they’re two separate things. You can have a market economy without capitalism. Tito’s Yugoslavia is the classic example.

240

Plume 01.19.14 at 4:26 pm

Hector 239,

Mattski clearly was referring to capitalism. As is shown by our back and forth. He also talked about markets. But he specifically referred to capitalism and my comments using that exact word. If you do a “find” search in your browser, the word “capitalism” will pop up constantly throughout the debate.

And, yes, I know you can have markets outside of capitalism. You can also have them without democracy being in the picture, even remotely, as I showed in the thought experiment above. My point being that capitalism itself, standing on its own two feet, is not “democratic” in the slightest. It has nothing to do with democracy and actually is in conflict with democratic precepts.

Obviously. Again, as demonstrated above.

241

Lee A. Arnold 01.19.14 at 6:04 pm

Chris Warren #232: “Units of corn per hour, units of pots per hour.”

So if the units of corn per hour increases, then all the existing farmers grow more corn, right? This increases the supply of corn. If the supply of corn increases, but the market demand for corn does NOT increase, then the price of corn decreases. So corn farmers’ incomes decrease. Some farmers may eventually go out of business, because they don’t make enough income to cover their other expenses, while the remaining farmers must consolidate, i.e. get bigger. That is the theory of supply and demand, and that is the historical record of modern agriculture. So I don’t understand what you are writing.

242

Plume 01.19.14 at 6:21 pm

Mattski 234,

Wanted to return to this, because I found this a striking response to the following:

Me: You’re exchanging currency for goods and services, and none of that entitles you to any say in what the business does, sells, pays, etc. etc.

And your response:

This is patently false. You don’t see it because for you it’s an all-or-nothing proposition. Lots and lots of businesses make earnest attempts to follow demand. Because it’s good business practice to do so. If my ‘certified organic’ granola starts outselling my non-certified product then–just imagine!–I may start increasing production of the certified stuff. This happens with blueberries and strawberries too…

So, your dollar may eventually lead to a shift in production. Possibly. But have you, as a human being, been directly contacted by said company and asked to contribute directly, face to face? Do you get an equal say in what happens at that company, including the things mentioned? Are you a part of the decision-making process? You, as a human being, not your dollar. No. Did you also speak with, debate, hash out, come to some agreement about your wants and goals and dreams with other consumers? Did you meet with them in the public square and decide, collectively, where to go from there? No.

At the very best, your dollar is anonymous, faceless. The company doesn’t know who you are. You’re not even a number. They know your dollars, not you.

And what do your dollars “win” for you? Through an incredibly indirect and labyrinthine process, fully anonymous in its relationship to you, Mattski, the person, you might eventually “win” the awesome, earth-shattering chance to see more of Product X on the shelves. And what a great boon to all of humanity that means!!

Think of the epic goodness involved if your dollars push the makers of Old Spice to change from their usual green packaging to silver!!! You did that!!! Rather, your dollars did that!! And the world as we know it will never, ever be the same!!

243

Hector_St_Clare 01.19.14 at 6:41 pm

Plume,

I know, but Mattski wrongly conflates the two. His arguments, if true, explain why markets are democratic, not why capitalism is.

244

Plume 01.19.14 at 6:56 pm

Hector 243,

But are markets really democratic? In all previous economic systems, but especially with capitalism, they are controlled by elites, who operate, as mentioned, as autocrats — to one degree or another. They have their own little fiefdoms. They are the bosses. They don’t allow collective decisions — unless we’re talking about co-ops, etc. etc.

So, how is it possible for “the markets” to be democratic, when they are the sum total of all of those autocrats and their power and their decisions, large and small?

And, in all previous incarnations, including capitalism, the richest of those autocrats typically call the shots. We have a few “boss of bosses” controlling the show, aided by their puppets in governments across the globe, aided by trade orgs and banking orgs and so on.

I think when people say that “the markets” are democratic, they really mean theoretically; if we didn’t have the normal concentration of power at the top, they could be. But when in history have we escaped from that concentration of power at the top?

245

Hector_St_Clare 01.19.14 at 6:59 pm

Plume,

Again, Tito’s Yugoslavia was a market socialist economy. Businesses were run by worker’s cooperatives or by the state, and competed against each other in a market economy.

246

Plume 01.19.14 at 7:11 pm

I love the idea of worker co-ops. Mondragon is a great example.

http://www.mondragon-corporation.com/eng/

Another excellent source for ways to do this is Richard Wolff.

http://rdwolff.com/

Also, Gar Alperovitz.

http://www.garalperovitz.com/

247

Chris Warren 01.19.14 at 10:18 pm

Lee A. Arnold

Completely wrong at every point.

Who said:

but the market demand for corn does NOT increase

There is a shift along the demand curve.

See:

http://archive.is/xnigr

Just substitute pots for oranges and corn for apples.

Also if pots are used to store corn – things get more variable (you need more pots to complement increased corn)

There is also another trend for high surplus in one occupation (corn) to attract resources (from pots).

248

Chris Warren 01.19.14 at 11:13 pm

Hector_St_Clare

I don’t think this is really what you intended to say???

but getting rid of capitalism is not going to get rid of the expropriation of surplus value.

You are just piling confusion on top of confusion.

Getting rid of capitalism will abolish surplus value because it will abolish ‘wage-labour’.

There will still be co-operative labour and surplus product.

There is a difference between surplus-value and surplus product.

All explained earlier at #169?

249

Plume 01.19.14 at 11:22 pm

Chris 248,

Also, “expropriation” generally refers to the taking of private property by a public agency — in mixed systems.

I’m a bit confused by Hector’s sentence, too.

250

Lee A. Arnold 01.20.14 at 12:08 am

Chris #247: “shift along the demand curve.”

In your example (#209) the total amount of money spent by consumers on corn does not increase. The total amount of money spent by the consumers on corn is defined as the “demand”. The demand does not increase. At a lower price, they buy more quantity, but the demand (total amount of money) is the same. More quantity at a lower price is not an increase in demand. The market demand for corn does not increase, because that would be a shift of the demand curve.

This is a “shift ALONG the demand curve”, as you wrote. That is because in your #209 example the supply is increasing. The supply curve is shifting, along a static demand curve.

There is a difference between STATIC and SHIFTING supply and demand curves. Supply or demand does not increase or decrease, unless the entire curve shifts.

Higher productivity SHIFTS the entire supply curve, to the right. The price falls, as the shifting supply curve pushes the price/quantity crossing-point (i.e., the equilibrium point) DOWN the STATIC demand curve, to a higher quantity purchased. The demand curve does not shift. By definition, the demand stays the same (because it is the total amount of money spent by the consumer), The quantity at the same demand increases, because the price is lower.

So, slightly more corn is immediately purchased at the lower price. However, this new, higher quantity of corn purchased is entirely provided by the existing corn farmers whose productivity was just increased. It is their supply curve; it merely shifted to higher quantities supplied, at any price.

So there is no call for people to quit making pots and get into corn production. That is the meaning of the diagram: there is a new price and quantity, if the supply curve shifts (due to new productivity) but demand stays the same (i.e. the demand curve doesn’t shift).

Demand is NOT said to increase, here. We don’t usually say that “demand has increased” unless the whole demand curve shifts. The demand curve would shift for very, very different reasons — major reasons include: change in the population size, change in consumer spending ability, or change in their tastes for corn or corn-products.

Once again, you wrote in #209 that “Some pot-makers will switch to corn-production.” No, that is wrong. A rightward shift of the whole supply curve (due e.g. to greater productivity) will not cause pot-makers to switch into corn production, because the price is heading down the static demand curve, toward zero. There will be less and less money in increasing the supply of corn.

It will be smarter for pot-makers to stay in pot-making.

251

Chris Warren 01.20.14 at 1:13 am

Lee A. Arnold

That was just mumbo-jumbo.

In the example there was NO money.

If before the innovation the allocation of resources was stable, so that:

no pot maker would give up making pots instead of making 10 kg corn [The actual numbers don't matter]

If after an innovation, there will be some pot-makers who will give up pot-making if they can now make (say) 12 or 15 kg corn.

This is rational behaviour.

If, before the innovation, due to stability, no corn-producer would give up the opportunity to produce 10kg corn if they only gained 1 pot, then after the innovation, there is obviously no way they are going to give up 12 or 15 kg corn – just to get 1 pot.

252

mattski 01.20.14 at 1:41 am

But have you, as a human being, been directly contacted by said company and asked to contribute directly, face to face? Do you get an equal say in what happens at that company, including the things mentioned?

Invite EVERY member of the public in for a little face-to-face EVERY time your business needs a decision. Plume, I think you would make an EXTREMELY efficient manager!! Sounds like clockwork!

Hector makes an interesting distinction between “the market” and “capitalism.” Well, here is my perspective. The real world is made up of shades of gray. Words and classifications sometimes help us think, but not always. Ideas become hindrances when we make idols of them.

Even to draw a bright line between capitalism and socialism is not easy when we get right down to brass tacks. Because a market economy depends for its stability on the apparatus of the state. Private business needs the protection of law and its enforcement. This is why it is said, “there is no such thing as a ‘free market.'”

And what we have right now in America–despite the ascendancy of the Right–is a combination of capitalism (market economics) and socialism (the safety net, the welfare state.) Sure, the safety net is under attack by various douche-bags and monied interests. Well, we’re going to fight back against that assault. I just doubt that head-in-the-clouds utopianism is going to play much of a part in that fight because average people will find it more ridiculous than inspiring…

The real world is a matter of degrees.

253

Lee A. Arnold 01.20.14 at 1:44 am

If there is no money, then the supply and demand graph works in terms of barter. Then, the “price” is either corn per pots, or the other way, pots per corn. After the innovation in corn production, there is more corn per pots, or the other way, less pots per corn. No pot-maker will give up pot-making, because pots have become more valuable than corn.

The last pot that the farmer bought, BEFORE the one he didn’t buy, costs him nearly 10kg corn. After the productivity innovation, the last pot the farmer buys, cost hims 12kg corn. And he will have to pay it, if he wants to buy that last pot.

254

Lee A. Arnold 01.20.14 at 1:49 am

Mattski #252: “Invite EVERY member of the public in for a little face-to-face EVERY time your business needs a decision.”

This is another version of the “knowledge problem” which I pointed out in comment #136.

255

Plume 01.20.14 at 2:02 am

Mattski 252,

Me: But have you, as a human being, been directly contacted by said company and asked to contribute directly, face to face? Do you get an equal say in what happens at that company, including the things mentioned?

You:

Invite EVERY member of the public in for a little face-to-face EVERY time your business needs a decision. Plume, I think you would make an EXTREMELY efficient manager!! Sounds like clockwork!

Does it take practice for you to be this obtuse? Or does it just come naturally to you?

Come on. You made the claim that your shopping was a democratic act. You made that claim. I called you out on it, shredded your silly claim completely, with more words and effort than your ridiculous assertion deserved, and you lift out this one little part to reply to?

Of course I wouldn’t expect a business owner to invite every member of the public in for a tete a tete. Remember, I’m the one who said that capitalism isn’t democratic in the slightest and doesn’t function that way. It makes its decisions without your input at all, autocratically, which is my whole point. Sheeesh, man. Again, do you practice hard to be so clueless?

Now, instead of cherry picking one little bit of what I wrote, and responding stupidly to that piece even so, why don’t you deal with the central part of it, for a change?

As I demonstrated, you can have a corporatized America, all privatized, no democracy, no democratic institutions, assemblies, functions or processes, and still have your glorious access to a smorgasbord of consumer goods. You can have complete freedom of choice, even more than you have now, without democracy being anywhere in sight.

Do you still contend that the act of shopping is a democratic act? Do you still believe that capitalism is “democratic”?

256

Plume 01.20.14 at 2:11 am

Lee A. Arnold 254,

Mattski’s response to what I wrote is absurd. Read it (what I wrote) in context. It’s obvious I wasn’t suggesting that a business owner should ask all of his or her customers in for a brainstorming session, or to ask them how to run his or her business. I’m saying they don’t do this, and they don’t take input from those customers face to face, and those customers have no say in the matter, which is one of the many reasons why capitalism can’t be called “democratic.”

This was after Mattski claimed that his ability to shop is proof that capitalism is “democratic.”

I listed a host of other reasons why it’s not in this thread.

257

Chris Warren 01.20.14 at 2:13 am

Lee A. Arnold

The ratio of pots to corn will shift to a new equilibrium so that the utility gained by an hour pot-making equals the utility gained by an hour producing corn.

This will be in between the old and new.

Possibly 1.25 p = 8 c [the actual numbers do not matter]

258

Lee A. Arnold 01.20.14 at 2:43 am

Chris Warren #257: “The ratio of pots to corn will shift to a new equilibrium so that the utility gained by an hour pot-making equals the utility gained by an hour producing corn.”

Exactly. Because the utility is defined as “consumer satisfaction”. Utility of a good tapers off with more individual consumption of it, which is why the demand curve slopes downward.

259

Lee A. Arnold 01.20.14 at 2:49 am

Plume: #256: “It’s obvious I wasn’t suggesting that a business owner should ask all of his or her customers in for a brainstorming session, or to ask them how to run his or her business. I’m saying they don’t do this, and they don’t take input from those customers face to face, and those customers have no say in the matter, which is one of the many reasons why capitalism can’t be called ‘democratic.’ “

What you “call” it is not the issue. It appears to me that Mattski may be getting at the same criticism I have, which is that your utopia will have the same problem. Nobody has enough information to make your system work. In your utopia, you want public voting on decisions to reallocate resources to new uses. In #104 you wrote, “If a town needs a new hospital, a new school, they submit the request and it’s voted on. Direct, participatory democracy.” When I asked you (in #125) what would happen, then, when an inventor comes up with a innovation that would require the reallocation of resources? You replied “We don’t want to encourage endless invention of new consumer goods, anyway. We will be extremely picky and only allow things that are necessary and for the common good.” Well I think you lost most readers right there, for two reasons: 1) they won’t trust those judgement, because 2) they realize the countless number of decisions to make, in order to be that picky. There are going to be lots of innovations that suggest the common good, but are not required for the common good, clothes washing machines for example, and there are going to be lots of further improvements in those innovations, to make them better. There will be millions of decisions, endless voting ballots. How does everybody else learn all the information, the physics, chemistry, etc. to judge the soundness of the proposals in your new democracy?

260

Plume 01.20.14 at 3:26 am

Lee A. Arnold 259,

You seem to be looking at this from the point of view of our current system, instead of as a radical and total break from that system. That means we won’t be transferring the aggressive, fast-paced, hyped-up desires for endlessly new products and product upgrades.

This will be an escape from all of that and a complete severance from that environment.

Have you ever spent time on a commune? Or with people running a local food co-op? If you have, you will have noticed that the desires for ever increasing varieties of consumer goods and their constant upgrades aren’t a part of life there. It’s not an issue in need of constant voting, and no one has to keep up with endless petitions for new consumer goods. People are basically satisfied with what they have. If it’s healthy, sustainably produced, fair trade, green and there’s enough for everyone’s needs, they’re satisfied.

The whole idea behind the system I suggest is just that. That we are currently consuming and polluting our way ever closer to the destruction of the planet for good — at least for human life — and that if we don’t radically downsize, the earth is going to make the decision for us.

So, my idea is that we trade in the endless hustle and bustle of that endless growth in “new and improved!!!” consumer culture for a steady-state, clean, green, healthy and safe egalitarian society. And we include social justice, full on democracy and all the rest of the things I’ve been talking about.

In short, there won’t be much to vote on in the way you suggest, ever. People will grow much of their own food, share food with others, make their own clothes, if possible, and share this skill with others. Arts and crafts and artisanship will be taught and spread like wildfire. Life will be communal, not competitive. The atmosphere, unlike the atmosphere created by capitalists here, will promote satisfaction with “enough.” Ours currently promotes the idea that there is never enough.”

We won’t have privately held businesses, corporations, media bombarding us daily with endless messages to buy buy buy!!! There will be NO consumer culture in this new system. Right now, we have that wall to wall, without escape. In my system, we will have peace and harmony, wall to wall, at least to the degree possible.

And, again, if people prefer the capitalist/consumerist model, they are free to leave and go back to that. It sounds like you do. Which makes me wonder why you try to critique my hypothetical based upon the idea that it just wouldn’t work as a capitalist system.

Umm. Well, that’s half the point. It’s not meant to. It’s meant to be something absolutely, 110% different.

You can’t critique a chess match using rules for the game of Risk.

261

Lee A. Arnold 01.20.14 at 3:43 am

Plume #260: “You seem to be looking at this from the point of view of our current system, instead of as a radical and total break from that system.”

No, I am looking at it in terms of formal cognitive limitations of individuals, vs. the rate of possibly good innovations.

262

Plume 01.20.14 at 3:55 am

Lee A. Arnold 261,

But you are assuming that the rate of possibly good innovations will be similar to our present rate. It won’t be. We won’t be a greed-centered me me me culture. There is no profit. There is no capitalism.

Again, you’re not taking into account the total break with consumer, corporate, corporatized media culture. You’re not taking into account the formal ways to channel the good innovations we do want to include, which will actually exceed the capitalist system in number and organization.

Our entire educational, trade, artisan and crafts system will be geared toward the public good, instead of corporate research for corporate profits. Or, toward churning out obedient little capitalist worker bots. As a communal society, we’ll all be involved daily, on the front lines, instead of having to wait until some Bill Gates comes along.

And, again, there is a paradigm shift. Complete. Total. We severed ourselves from the idea of competitive battle and the lust for the accumulation of personal wealth and “stuff.”

We have other goals and dreams. Peace, equality, egalitarianism, health, longevity, knowledge for the sake of knowledge, etc.

It’s another world.

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Lee A. Arnold 01.20.14 at 4:04 am

The rate of good innovations could be greater under capitalism. There is no way to pre-specify that, one way or another.

This depends of the old concept of the utopian “New Man”, such as the “New Communist Man” or the “New Soviet Man”, after whose appearance the Soviet state was supposed to wither. You can also wish for a pony, as I think Belle once wrote.

It may be quicker to help to institute that psychological change by voting for the lesser of two evils and protecting the steps to universal healthcare.

264

Plume 01.20.14 at 4:22 am

No, Lee 263,

It doesn’t depend upon any such thing. No “new man” or “new woman” is required. Just the same old human beings we’ve always been, which is to say, extremely adaptive to changes in our environment.

We react to systems. When a new system comes online, totally replacing the previous one, we react to it. We change. We adapt.

Ever wonder why businesses and corporations spend so many billions of dollars on advertisements? Do they do it because they just like to make commercials? How do you think the total absence of wall to wall attempts to grab your dollars would impact people? Or the absence of those dollars?

How do you think universal healthcare for life, free education for life, free public transportation for life, green, safe, sustainable, organic food and the like would impact the populace?

This isn’t a reshuffling of the deckchairs on the Titanic. This is a whole new mode of transportation, heading in the other direction. Your critique assumes it’s the same.

265

SoU 01.20.14 at 4:30 am

@ Lee and mattski

i just want to note that it is really humorous how the knowledge problem is here charged as insurmountable under socialism, but there is no mention of the market perverting effects of similar knowledge problems within capitalism, which are surely quite as pervasive (we must all remember the first assumption of the arrow and debreau proofs of capitalism’s efficiency is a strong claim as to perfect knowledge by consumers – even teeny boppers!)

similarly, there was the claim that ‘oh, capitalism is actually quite democratic, you vote every time you buy – $’s are votes’ – then there was the claim ‘oh, under your socialism, there would be too many votes, too much democracy!’ …. so its innocuous and even laudable in the first, but DANGER WILL ROBINSON COGNITIVE OVERLOAD in the second?

i just don’t see how you can have both at once!

266

SoU 01.20.14 at 4:32 am

all of that is neither to defend nor criticize Plume’s plan for the new social order, only to note that your arguments against it are really, really bad, in so far as they spend so much time stepping on each others’ toes and have such an obvious status quo bias.

267

Plume 01.20.14 at 5:28 am

SoU 265,

Good points. You tackled the supposed “knowledge problem” quite well.

You’re right. If all of that voting causes cognitive overload, and dollars are supposed to represent votes . . . . well, we have a roughly 17 trillion dollar economy — and roughly 65 trillion worldwide. How on earth do they manage!!

Not to mention the 1000 trillion in derivatives, which I mentioned above. So, in Lee’s scenario, a new washing machine will wreck my system, but 1000 trillion (votes) in derivatives is just no big deal for capitalism.

(I know, I know. He wasn’t really saying just that washing machine would do it. But, you get the point.)

G’night, all.

268

Lee A. Arnold 01.20.14 at 7:58 am

SoU #265 — You will note that I never claimed that capitalism solves the knowledge problem. The problem of individual cognitive limits also makes consumer preferences in the market inadequate to solve problems of environmental degradation and social justice for workers, etc. My objection is specifically to the utopian proposal to get everybody in the polity to vote on reallocating resources for each and every innovation and and other creative changes. Much better to let private investors decide whether or not the risk may be worth it, let them produce the innovation and put it out on the market, and then let everybody else decide at that point whether they want to buy it or not. By comparison, running all creative personal ideas in front of a public voting system before you can do anything with them is preposterous.

269

Lee A. Arnold 01.20.14 at 8:20 am

SoU, To recap the whole argument as I see it, Plume claimed that capitalism is the cause of the ecological crisis (#68). I pointed out that it is more likely caused by population growth, hubris, and bad technology, but population is supposed to level off, and capitalism along with government R&D could also be the fastest route to good technology. So capitalism doesn’t necessarily have to cause environmental destruction. Plume said NO, the problem is capitalism, and I asked what he would put in its place. Plume then described a system (at #104). Unfortunately this system would greatly decrease the rate of possibly good innovations, because it makes the existing knowledge problem worse.

270

Mao Cheng Ji 01.20.14 at 8:33 am

What about this solution: freeze it, ban all the spontaneous innovations (except, perhaps, some specific socially approved attempts to resolve some specific issues), and adjust the standard of living to fit the current (and forever) technological level. No flying cars for you, fuhgeddaboudit. Learn to live within your means.

It’s not an obviously wrong idea, I must say.

271

Plume 01.20.14 at 3:45 pm

Lee A. Arnold 268,

My objection is specifically to the utopian proposal to get everybody in the polity to vote on reallocating resources for each and every innovation and and other creative changes. Much better to let private investors decide whether or not the risk may be worth it, let them produce the innovation and put it out on the market, and then let everybody else decide at that point whether they want to buy it or not. By comparison, running all creative personal ideas in front of a public voting system before you can do anything with them is preposterous.

What is preposterous is your suggestion that it’s as easy as all that in our current system. Inventors and innovators in our current system must jump through dozens of hoops before getting to production. And the issues don’t stop there. There are patent reviews, copyright issues, government approval reviews — for instance, FDA, for new drugs. There are legal formations for corporations, business permits, zoning permits, insurance issues and so on. Sometimes, even in our system, they must also fight through local protests, a la Walmart, when it seeks to open a new store. Or, coal companies when they seek to lop off mountain tops, etc. etc. Products are pulled from the shelves, after production, by the government, if they are found to be hazardous.

And you also make it sound like it’s easy to find investors and that everything happens in our current system instantaneously, rather than the slow, laborious process that occurs in reality. Even well-established tech firms take years to develop new products, and they have to go through endless internal reviews and checks as well.

You seem so determined to defend capitalism at any cost, you’re willing to overlook the complexity, the constant bottlenecks and slowdowns of our existing system, even within companies, not to mention with their local, state and federal interfacing.

And, this really baffles me: You continue to ignore my repeated mention that this new system is 100% publicly owned, for the public good. There is no private business or private entrepreneurship. This is a radical break from our privately owned, but mixed economy.

272

Plume 01.20.14 at 3:47 pm

Sorry for the formatting.

The correction:

My objection is specifically to the utopian proposal to get everybody in the polity to vote on reallocating resources for each and every innovation and and other creative changes. Much better to let private investors decide whether or not the risk may be worth it, let them produce the innovation and put it out on the market, and then let everybody else decide at that point whether they want to buy it or not. By comparison, running all creative personal ideas in front of a public voting system before you can do anything with them is preposterous.

What is preposterous is your suggestion that it’s as easy as all that in our current system. Inventors and innovators in our current system must jump through dozens of hoops before getting to production. And the issues don’t stop there. There are patent reviews, copyright issues, government approval reviews — for instance, FDA, for new drugs. There are legal formations for corporations, business permits, zoning permits, insurance issues and so on. Sometimes, even in our system, they must also fight through local protests, a la Walmart, when it seeks to open a new store. Or, coal companies when they seek to lop off mountain tops, etc. etc. Products are pulled from the shelves, after production, by the government, if they are found to be hazardous.

And you also make it sound like it’s easy to find investors and that everything happens in our current system instantaneously, rather than the slow, laborious process that occurs in reality. Even well-established tech firms take years to develop new products, and they have to go through endless internal reviews and checks as well.

You seem so determined to defend capitalism at any cost, you’re willing to overlook the complexity, the constant bottlenecks and slowdowns of our existing system, even within companies, not to mention with their local, state and federal interfacing.

And, this really baffles me: You continue to ignore my repeated mention that this new system is 100% publicly owned, for the public good. There is no private business or private entrepreneurship. This is a radical break from our privately owned, but mixed economy.

273

Plume 01.20.14 at 3:52 pm

Addendum:

In reality, there is no massive flood of new products and innovation in our current system. As mentioned, it is channeled through endless hoops for patents, copyright, review boards, local, state and federal licensing, legal formation of corporations, etc. etc.

Investors do lengthy reviews of new products before jumping in. They have their own bureaucratic hurdles to deal with internally, not to mention via government permits and regulations as well. This all take a LOT of time.

. . . .

In my hypothetical, we’re wall to wall public sector. We’re not, as currently configured, a tiny fraction of the work force, dealing with a huge private sector for all of the above.

(The Federal workforce, for example, has about a million fewer workers than it did in 1962, this despite the growth in population of roughly 140 million.)

We would actually have a distinct advantage in handling the onslaught, if it were to happen.

274

Plume 01.20.14 at 4:00 pm

And further:

In my hypothetical, we’re proactive. We don’t wait for Bill Gates. We meet in town councils, discuss what we need for our town, and then commission those things. There is no onslaught to deal with, because we get there first. We debate, hash out, reach consensus on, the needs of the community, the need to fix existing structures or add new things, and then we commission the work. We do this via democratic process.

Again, we don’t wait — or have to wait — for some Bill Gates to get an idea in his garage. We meet in a metaphorical garage weekly — or, if that’s too much, monthly — and we brainstorm regarding community needs.

We won’t ever, ever be overwhelmed by some onslaught of new innovation, because we go there first. And because we’re the innovators, the inventors, the review board (all in one, one for all) and can assign funding as well, the process is streamlined and faster than it would be in a capitalist system like America’s. It’s actually faster.

275

Lee A. Arnold 01.20.14 at 4:20 pm

No, I never said it was easy in the current system. You can start to work with a patent pending, however.

The rate of innovation seems to me to be impossible to measure, and again, I am not sure whether anyone knows whether it is slowing down or speeding up. It certainly appears to be speeding up in the areas of materials science, nanotech, biotech, and computation. Materials scientists, for example, are reporting new discoveries almost daily, and some of these may lead to environment-saving technologies. Here is another one today: http://www.sciencedaily.com/releases/2014/01/140119142450.htm

For another example, here is Science Daily’s link for their “solar energy” stories: the first page goes back only to the middle of December. Claiming that there is no massive flood of new knowledge would be wrong, and finding the best way to actualize them should NOT include getting everybody in the country to vote on each one.
http://www.sciencedaily.com/news/matter_energy/solar_energy/

I use the Science Daily top page for my browser startup. The amount and quality of stuff that is happening is amazing.

276

Plume 01.20.14 at 4:34 pm

Lee 275,

Do you see how my hypothetical could have an advantage over our current system, as described? Think about it.

Citizens meet weekly or monthly, discuss community needs, hash it all out, commission what needs to be done — proactively. They contain the innovators and inventors among them. They are a part of the hashing out process. They are both inventor and part of the review process. An equal part, with an equal say. Part of the review process and the funding decisions. All in one. No need to go through endless hoops after all of that, and citizens, as a matter of process, check for adherence with the Constitution plus regional* and federal goals and guidelines.

*My hypothetical gets rid of the states, opting instead for regions similar to those suggested below:

http://www.businessinsider.com/actually-there-are-11-americas-map-2013-11

http://colinwoodard.com/

277

Lee A. Arnold 01.20.14 at 6:05 pm

We already have it, and it is called “the patent office”. If you want to reform the process, there are already lots of people thinking about it, and there is a huge literature on the subject. Join into their conversation.

278

Plume 01.20.14 at 6:29 pm

Lee A. Arnold 277,

No. I don’t want to reform the process. I want to completely overturn the existing system and replace it, as described throughout this thread. Why do you think we should keep a system that you admit needs so much reform? That makes no sense, when other alternatives exist.

If you like, think about it in product terms. Why would you want to keep hacking away at incremental improvements of item X, with all of its attendant faults and contradictions, when you can just replace it with something far more beneficial, of much higher quality, in need of far, far less maintenance, and no “reforms”?

Why cling to a system with a direct, built-in opposition and enmity for “social justice,” believing you can somehow inject it into that system, bit by bit, when you can replace it with one that has “social justice” already built in?

The liberal project is this endless campaign to prop up and keep alive an unjust system, in hopes that liberals can eventually “get it right.” All the while the powers that be shut down or roll back the meager and rather lame “reforms” already (but o so temporarily) won by liberals. You are Sisyphus, pushing that boulder up the hill.

And you seem not to care that the very system you defend is the one blocking your attempts at reform. Its structure actually promotes this, requires this, and increases its own power and ability to block those reforms, through time, and cumulatively, etc.

In short, the system you defend owns the vehicle you require to make your reforms happen.

279

Lee A. Arnold 01.20.14 at 10:54 pm

In my opinion the future will NOT work without a plan that boosts BOTH capitalism AND socialism. The idea that they are diametrically opposed is old and useless. I think we must recognize that there are two basic things, very different basic things, and they are equals, as sources of growth:
http://www.youtube.com/watch?v=BXr5VjQ0OXE

In words, they are: 1. Individuals in transactions — the locus of the combination of specialization and the gains from trade (Capitalism & Markets), and

2. Groups reducing transactions costs — the locus of enabling those transactions, by ruling and costing the transactions properly to suit an environment. In fact this reduces the NEED for individual knowledge, and thus partly alleviates the knowledge problem (Institutions, both business and government).

As near as I can tell, the capitalists are wrong and the socialists are wrong. Each one needs the other one.

These are not only equal sources of growth, they are combined into an organic mechanism that we see repeated at every level of nature and society. Because this functional shape is also part of our cognitive structure, it is how concepts work, and so we see it mirrored in the outside, where things are indeed organized in this way.

The knowledge problem has never been solved, because we need BOTH sources of growth to be activated at the same time. We need to promote both capitalism and socialism. Individual transactions are always ruled under institutions, and institutions must enable the individual transactions.

280

Plume 01.20.14 at 11:33 pm

Lee A. Arnold 279,

You are assuming that we need growth and that growth is good. Both would be incorrect.

The earth won’t sustain continued growth. We’re already running up against its limits all over the world, and would have hit the wall a long time ago if not for our obscenely immoral levels of inequality.

As in, the richest 20% of the world consumes 85% of its resources. The World Wildlife Fund estimates we will need two entire earths to meet existing demands by 2030, if we’re still in this inequality paradigm. If we all consume like average Americans, however, we will need four entire earths.

Do you not see the problem?

Promoting capitalism means promoting economic apartheid, massive inequality and massive ecological damage. We need to dump capitalism, because it depends upon growth (Grow or Die) and the earth can’t sustain it. And we in the wealthy countries can’t really downsize as much as we need, because of the trap of capitalism. Downsizing would crash the economy and cause immense suffering and dislocation.

The answer is to get out of that trap, democratize the economy, go wall to wall commons and cut back to natural limits. We in the rich nations can then downsize radically without harm, and help the so-called “third world” up off the ground.

281

SoU 01.20.14 at 11:38 pm

Lee, i can’t help but get the sense that you are operating with a highly idiosyncratic definition of capitalism. which is of course your prerogative, but you can see why that might be the source of a lot of confusion and disagreement

282

Lee A. Arnold 01.21.14 at 12:43 am

Plume: #280: “You are assuming that we need growth”

Most people on the planet think they need growth. Their mistake and yours is to think that growth always needs more and more input of materials and energy. But innovations, in machine and materials, might enable growth that uses less input. There is no hard and fast rule about this. The historical evidence is that we have not had a long enough period to try to do better after the widespread acknowledgement of environmental destruction in the 1970’s. 30-40 years might not be enough time to turn a spaceship with 7 billion around. We don’t really know anything at all, so it is foolish to foreclose options.

283

Lee A. Arnold 01.21.14 at 1:14 am

SoU #281: “a highly idiosyncratic definition of capitalism”

Oh I am way out there. BUT I use the standard definition of “capitalism” that used by most people since the 19th century. Always use the standard definitions, unless you tell us so. Wikipedia: “Capitalism is an economic system in which trade, industry and the means of production are controlled by private owners with the goal of making profits in a market economy. Central characteristics of capitalism include capital accumulation, competitive markets and wage labor. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.”
http://www.youtube.com/watch?v=-MH7cKZ_kWc&list=PLCAE3CA6D964BFC8E&index=19

After that, I teased out the standard explanation of its motive force (which always boils down to, “specialization and the gains to trade”). Realized that this explanation omits market failure, inequality, and ecological destruction. Adopted the idea from communication theory that contexts are punctuations in discourse. Speculated that when we bring all transactions and relationships together, there would a set-intersection of all their contexts, i.e. a group central context of basic rules for everybody (in a certain setting) that would be actual. Identified the central context of this group with the economics concept of an “institution”. Studied in the economic theory of institutions that their function is to reduce transaction costs by rules and reducing uncertainties. The institution therefore saves time and energy, this therefore creates a surplus. It is a social and biological mechanism.

This surplus is added to the surplus from specialization and the gains from trade among the member in the group. So any group of any size always has two possible sources of surplus: the trades and the institution. ; In fact the shares look to be around 50/50, but we are unable to compute an accounting because a lot of trade institutional effects are branching N times through ecological networks into the future. (An obvious case in fact is the need for environmental protection, where the political requirement that we do cost-benefit analyses is a phony private corporate joke, because they will never include all the bad stuff.) It is the picture of our nescience too.

284

SoU 01.21.14 at 1:31 am

@283
sorry Lee, im gonna have to bow out. i followed the 1st paragraph, and i followed your youtube link, but was quickly lost after that. maybe it is on the definition of socialism that we differ? idk. i just don’t really understand the meaning of “We need to promote both capitalism and socialism” if we are speaking at the level of the macro-economy, because one of those is founded on private property and the profit motive and the other seeks to replace those with collective ownership of the means of production and democratic control of the allocation of the social surplus.
like, i get ‘mixed economy’ type arguments and if i had to guess i’d say that you are working in the David Soskice research programe here, which is one i much admire and all, but i don;t think any of this really gets beyond ‘varieties of capitalism’ and touches upon socialism.

285

Lee A. Arnold 01.21.14 at 3:31 am

A mixed economy for sure but I think the socialism part of it should go so far as to directly monetize the healthcare system, environmental protection, etc. There is no reason for the creation of money to be entirely the under purview of private bank lending. That goes way beyond any “variety of capitalism” that I have heard of.

286

Plume 01.21.14 at 5:31 am

Lee A. Arnold,

I think your definition of capitalism is far too vague, general and abstract. It rather conveniently makes it seem harmless and ignores its actual effects.

Basically, capitalism is the first economic system based almost entirely on the production of goods for future sale, without regard to locality or local need, with an emphasis on exchange value rather than use value. It’s the first to sell products for no other reason than to multiply capital for ownership.

It’s also the first system to sever itself from the land, from the local, from the community. With capitalism, the land, the local economy and the community become irrelevant. You can sell products anywhere, from a great distance, and impact is no longer a consideration, because ownership doesn’t live in the markets they control. It’s also the first to institutionalize wage labor, and got its start due to the primitive accumulation process aided by slavery, the expulsion of “the peasants” from the countryside (ending their ability to self-provide), the enclosure of the commons and so on.

This separation makes it so it matters not what the capitalist produces for sale. If a capitalist could sell shit on a stick and profit from it, they would. We know this given the long list of products which cause cancer, diabetes, obesity, destroy vast ecosystems, rain forests, etc. etc. And if you read the expose on Smithfield hams, you’d know we aren’t that far from the sale of shit on a stick.

It’s an obscene and immoral, despicable and unnatural system of widespread oppression and abuse. And you want to promote it, apparently.

287

Lee A. Arnold 01.21.14 at 7:51 am

These exertions do not seem to be gaining adherents. Perhaps instead you should write the actual new constitution, so then we can all vote on it?

288

Plume 01.21.14 at 8:21 am

Lee A. Arnold 287,

I’m not here to gain new adherents. Are you? I don’t see anyone agreeing with your take on things, either.

Especially your bizarre bit about monetizing the health care system or the EPA. That was definitely incoherent, and I don’t think you know what the word means.

G’night, all.

289

Ed Herdman 01.21.14 at 10:40 am

Plume is here to let us know that he has a schedule, and petty critical observations about consistency and the principledness of ad-hoc jenga towers of argument won’t dissuade him from taking his daily rest after a hard, honest day of sisyphean exertion! That “G’night, all” is a plank cast out daily to the weary shipwrecked right-liberals of Crooked Timber, a fresh start to gather your senses for the prospect of another day drinking salt water and treading water in argument with Plume.

290

Niall McAuley 01.21.14 at 11:46 am

In my utopian future, we will all spontaneously evolve golden tendrils in our hair and gain the ability to read each others minds. Deception will become impossible, crimes will be trivial to solve, and exploitation will be seen for what it is and stopped before it starts.

Also, I’ll have a house on Mars, an underground lair in a hollowed mountain and an atomic penknife made from ten-point steel.

291

Plume 01.21.14 at 5:47 pm

Ed Herdman 289,

I say G’night, all as a courtesy. A way to indicate that another response won’t be answered right away. In other forums I’ve frequented, not answering quickly provokes claims of “running away from combat,” etc.

Now, did your post make you feel good and smug and mighty, because you took silly pot shots at another poster, without ever offering your own ideas up for discussion?

That is the coward’s way out. Safe behind your bunker. Why not risk your own ideas in print, for a change? Or do you prefer being the lame sniper only?

292

Lee A. Arnold 01.21.14 at 7:03 pm

Not adherents for yourself, but for your utopia. You indicate this must be a radical break; no shoring up of the old system will do, it would be tainted by the poison of “capitalism”. Surely you have not engaged in this descriptive exercise to waste time. So how does it happen? Do you convince enough people, or do youu somehow gain power to impose the new system, and get rid of everyone who doesn’t agree?

293

Plume 01.21.14 at 7:22 pm

Lee A. Arnold 292,

I don’t expect it to ever happen, as much as I think it should. As much as I think 100% of the p0pulation would benefit greatly from it, if it happened.

I throw it out there primarily in hopes of expanding the realm of conversation, in hopes that this will expand the realm of the possible. Because I know, for a fact, that if you don’t ask for and don’t demand serious change, you’re going to get exactly what you did ask for. Nothing.

An analogy:

You’re an environmentalist. You’d love to protect all wildlife and wilderness areas, but you realize you have limits. You also realize that in any negotiation, your “ask” must be greater than what you hope to achieve, in practical terms. And you know that setting the Overton Window requires broad goals, and a kind of “shooting for the moon” rather than timidity.

So, you “ask” for the protection of 1 million acres of wilderness, hoping for a “compromise” at, say, at least 500,000. You realize that your “ask” moves the Overton Window and starts the conversation in a better place, with regard to your own goals.

The Dems, typically, at least in the last few decades, and especially now, wouldn’t do the above. They would set their ask to pre-negotiate with their estimate of the opposing side’s vision. Which would be no acres protected. The Dems would probably set the bar at, say, 100,000, with the allowance of private development, while hoping for 25,000, at least. They’d be lucky to get that.

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Lee A. Arnold 01.21.14 at 7:57 pm

So “expanding the realm of conversation” requires that we must accept your definition of “capitalism” and if I “do not see the problem” then I “apparently want to promote” an “obscene and immoral, despicable and unnatural system of widespread oppression and abuse”?

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Plume 01.21.14 at 8:42 pm

No. You obviously don’t except my definition and I don’t expect you to. And, yes, your continued defense of capitalism and your actual call that it needs to be promoted — you actually said it did — means you are promoting an “obscene and immoral, despicable and unnatural system of widespread oppression and abuse.”

From my point of view. That’s a given. We obviously differ on the meaning, the effects, the definition of capitalism. That was obvious more than a hundred posts before this one.

But should you expect me to argue as if I agree with your definition? That we start there and then go on?

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Chris Warren 01.21.14 at 9:35 pm

“Capitalism is an economic system in which trade, industry and the means of production are controlled by private owners with the goal of making profits in a market economy. Central characteristics of capitalism include capital accumulation, competitive markets and wage labor. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.”

I suppose Wikipedia is a reasonable starting point – for slow learners. To move one from this you need to apply a bit of intellect.

If: “Capitalism is an economic system in which trade, industry and the means of production are controlled by private owners “ then all of the so-called“Central characteristics of capitalism … capital accumulation, competitive markets and wage labor.” are subject to this “system” and serve its’ so-called goal which according to Wikipedia is “private owners … making profits”.

So why did Wikipedia fail to mention that making profits includes profit maximisation?

The Wikipedia text is a school-boy approach. How on earth does the fact that ” the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.” describe capitalism, when this happens within any market system – mercantile, market socialist, or even bartering.

Capitalists make bigger private profits when the parties to a transaction do not equally or fairly determine prices at which goods and services are exchanged.

This has always been known by anyone with an ounce of sense. Even Adam Smith noted that “But though in disputes with their workmen, masters must generally have the advantage” and “Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. “

He also noted: ” the rise of wages operates as simple interest does, the rise of profit operates like compound interest”.

So here is the real meaning of Adam Smith’s capitalism, private profits maximisation, unfair dealing with workers, and compounding profits. In fact everything that leads to a Global Financial Crisis.

Marx’s slightly different definition of capitalism was derived from Smith and others, but introduced a new concept “surplus value” which demonstrated more clearly how any why capitalism destroys its own society and leads to a final economic catastrophe once countervailing tendencies have been exhausted.

Those who peddle the Wikipedia definition are displaying their lack of knowledge and lack of respect for humanity.

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Plume 01.21.14 at 10:01 pm

Chris Warren 296,

Well said. Have you read Michael Perelman’s The Invention of Capitalism? He brings up those and similar quotes by Adam Smith and his cronies.

http://libcom.org/library/invention-capitalism-michael-perelman

I think the element of “primitive accumulation” is essential, and pretty much always overlooked in contemporary discussions of capitalism. It puts the lie to the supposed “voluntary” nature of capitalism’s ascendancy, as it was built instead on the backs of slaves, indentured servants, children, “peasants” and so on. It required the violent expulsion of future (forced) workers from lands formerly used to self-provision. It required the near eradication of the commons and a host of centuries-long traditions, such as dozens of holidays and the ability to share surpluses all around.

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Lee A. Arnold 01.22.14 at 1:55 am

No.

Chris Warren, surplus value can also come from both innovation and more efficient organization, so surplus value does not logically require exploitation of the workers. That comes from greed, and it happens a lot, but that doesn’t make it the moral structure of capitalism. Greed is a primary thing. It is not caused by something else, it takes advantage of that something else.

Plume, an historical development doesn’t always determine a logical conclusion (except maybe about history itself). Primitive accumulation is a horrible history (I read Perelman’s book the month after it went to paperback) but that does not determine the eternal moral structure of capitalism. Today, most people appear to think that individual creativity needs an investment strategy to allocate resources for the experiment as quickly as possible, and to reward the individual, if the individual wants it.

The problem of both of you is that you have defined “capitalism” as “plutocracy”, which the rest of us ALREADY KNOW has gone overboard. After thousands of words, you didn’t tell us one single thing we didn’t already know.

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Chris Warren 01.22.14 at 2:48 am

Lee A. Arnold

You have confused product with value.

Surplus “value” can come ONLY from exploitation.

Surplus “product” does not require exploitation – but then capitalists will restrict wages so that they receive expropriated surplus product.

Statements like:

does not logically require exploitation of the workers.

make no sense in a society which is built on the exploitation of workers and maximisation of profits through exploitation of workers.

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Lee A. Arnold 01.22.14 at 3:18 am

Chris Warren,

You are writing about the labor theory of value. But labor is not the only source of value.

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Chris Warren 01.22.14 at 3:39 am

Lee A. Arnold

Labour is the only source of commodity value.

Robinson Crusoe allocated his labour entirely based on how he valued his labour, and if you look at the amount of time he spent per occupation, this indicates exactly how much he valued each labour activity.

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Lee A. Arnold 01.22.14 at 4:32 am

Labor theory of value was implicit from Smith through Marx, though Marx started showing holes. Starting with Marshall, people have found several problems with it.

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Chris Warren 01.22.14 at 4:57 am

Lee A. Arnold

There is a veritable industry of attempts to find problems with Marx’s theory.

They are all either based on non-equilibrium, or argue against a labour theory that is not Marx’s socially necessary labour theory (eg Samuelson see pdf download at: http://tinyurl.com/kc2lbgq
).

Anyway – where does Marshall find problems with Marx’s theory?

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Collin Street 01.22.14 at 5:23 am

I don’t think it’s possible to have a non-greedy “capitalism” worthy of the name; I can’t see how you can take “greedy” off the properties of the capitalism-you-will-permit and not change its nature pretty significantly.

[real-world, of course, when we make changes, we change the thing a word points to rather than changing the word, because the latter way requires admitting that we were wrong...]

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Lee A. Arnold 01.22.14 at 6:04 am

Chris Warren,

I don’t know whether Marshall ever mentioned Marx. I know he wasn’t satisfied with the labor theory. Marshall pointed out that value would also be partly composed of utility and demand, thus taking things back to Aquinas and the scholastics.

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Martin Bento 01.22.14 at 7:05 pm

OK, let’s look at Marx’s argument for the LTV. First he distinguishes two kinds of value possessed by commodities: use-value, which is the value they gain from being useful for some purpose, but which is not directly comparable to other commodities that generally will be useful in different ways and for different reasons, and exchange-value, which is the value that is expressed when commodities are exchanged for one another or for money. These are two entirely different things: exchange value is not a function of use value, but of something else. He then argues that exchange value is exclusively the product of labor – the labor that went into the finished product, plus what went into the tools, extracting the raw materials, etc, and that the value this labor produces is a function of the time expended doing it (well, he says that the production of skilled labor is always some definite multiple of that of unskilled, so he can treat it all as unskilled for simplicity). He recognizes that this actual quantity can vary for identical commodities, so he doesn’t hold that a specific commodity is valued according to the specific labor time that went into it, but instead that all are valued according to the average – the average labor time socially necessary to produce such a commodity.

Then there is the question of what if labor is used to produce something that is not socially useful. Marx’s answer: that doesn’t count! Labor whose product is not useful does not count as labor. But if labor’s nature as labor and as a value-creating agent are contingent upon the product being useful, then the product’s exchange value is contingent on its being useful, and we are back to exchange-value being a function of use-value. Further if labor can either create value or not based on nothing to do with the nature of the labor, but rather with the nature of its product (whose usefulness may exist at the time of production but not later. It may become obsolete, in which case the labor that produced it gets converted to non-labor retroactively. I bet the workers would love that), then labor is not putting value into that product, at least not independently of other factors.

And of course Marx has absurdly oversimplified by treating utility as a binary proposition – the products of labor either are useful or they are not. However, usefulness is obviously a continuum. There are degrees of usefulness. However, if we recognize this, then the status of labor as labor and as value-creating agent is continuously modified according to the usefulness of the product. This is actually just icing to my argument – the argument stands even if usefulness is binary – but it becomes important when we trace the implications. However, I don’t know if this thread is going to be kept open, and I don’t know how much time I’ll have later, so I leave that aside for now.

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Chris Warren 01.22.14 at 9:37 pm

Martin Bento

Marx’s LTV only applies to commodities – exchange values.

The market determines exchange value – and labour adjusts.

Only use-values are capable of having exchange value.

While ‘value’ in general can be created by subjective whims, desires, and instincts, ‘exchange value’ on the market, at equilibrium, can only be represented by socially necessary labour.

When you act commercially, ie deal with wages, prices and profits, you are only exchanging commodities.

If you have a contiuum of usefulness, this says nothing about how much each will exchange for each. You need to know how much labour is needed to bring each to the market.

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