Capitalism: the cause of and solution to all life's problems

[Rounin Ryuuji]

It also helped that, for a generation, the traditional elite was knocked flat. (It's hard to imagine now, but in the 1960s companies were run by non-owners. How we got robber barons back is a long and sad story.)

Do you happen to have any good recommendations for reading on this? I would love to have a better understanding of the historical processes at work. I had understood that the rights of workers were stronger during this period, but I did not know things had progressed to that extent, and that they then regressed as far as they have now.

About 14% of our total trade is with China. That seems like a special case. Are we "exploiting China"? We've helped make them a manufacturing powerhouse, whose growth rate has been over 10% annually for 35 years, a rate of growth far faster than our own. Per capita income has risen from $224 to $8200. China used to be starving poor and pundits left and right assumed it would be poor forever. Now they worry about Chinese domination. A lot of countries dream of being "exploited" to that extent.

Napoleon, I think it was, remarked that China, in his own time, was a proverbial sleeping giant. I think the potential was long there — China was once a centre of the world economy, so it's only natural to suppose that it could be again. I am concerned about authoritarianism there, of course, but, considering the factors involved and the retroactively unsurprising collapse of the Japanese boom (from what I've learnt of Japan, it has some very unsustainable ideas about work culture, for one, that are likely, I think, to exhaust any population), it really isn't all that surprising looking backwards.

[zompist]

It also helped that, for a generation, the traditional elite was knocked flat. (It's hard to imagine now, but in the 1960s companies were run by non-owners. How we got robber barons back is a long and sad story.)

Do you happen to have any good recommendations for reading on this? I would love to have a better understanding of the historical processes at work. I had understood that the rights of workers were stronger during this period, but I did not know things had progressed to that extent, and that they then regressed as far as they have now.

Well, you could start with my own page:

http://zompist.com/liberalism.html

This has the basic facts and figures, and points you to some further reading.

[Torco]

Travis, scandinavia isn't market socialism. It's social democracy, which is nice and all but is not clear can exist without our highly exploitative system of international division of labour.

On the question of value, I'm totally against using that word as a synonym for price: price is influenced by value, but also by many other things. Even if one is to be a capitalist and sincerely believe in economics as a science, it is too naive to believe those two things are the same.

At the same time, not every socialist idea is a great one. There really are big, gaping problems with centralism, and when you throw in authoritarianism you really do get a worse dystopia. Socialists need to address these concerns, not just assume that everyone will be nicer this time around.

Yes, it's kinda unfair that everyone always says "Last time you killed millions of people!" Or it would be, if the same people don't bring up (say) slavery or the British Empire to condemn capitalism. Sorry, but killing millions of people should put your ideology on the defensive.

I agree! but socialism, way I and your interviewee use it at least, does not mean, precisely, "whatever socialists believe". and also it doesn't mean the soviet union. I personally tend to be defensive of it cause its heart was, I feel, in the right place, but socialism as an idea is no more married to it than is democracy to the french revolutionary terror or the modern world to napoleon. The soviet union was pretty dystopian, no questions there: then again, so is the us for anyone who's not well off, and at that time particularly so was germany and japan, but also china, romania, indonesia, the philippines, india, etc. around the time it was started we had here the massacre of santa maría, a literal army formation mowing down two thousand, well, proletarians. at least the soviets were trying something better. Capitalism is pretty comfortable for well off americans, or for the french, but look at it from the point of view of a russian peasant, or a woman from burkina faso.

Of course, the atrocities of the soviet union are something that's fair enough to mention in a discussion of socialism: the people partial to the ancien regime also mentioned the terror to bonapartists, democrats and secularizers. I'd love socialism to be implemented peacefully, ideally through broad democratic consensus. the problem is, the people with the money and the power won't let you. Like, I don't enjoy being all like CIA this and US troops that and american-backed fascists and the rest of it but... It's kinda true.

I'm not a convinced Leninist, though, I don't love one party states: the problem the leninists are trying to solve is that if you have just whatever party pops up participate, the gringos and euros are going to fund the crap out whoever they can to oust you: the only way I see you getting democratic socialism in a world where money and global imperalism exist is if some of the center countries like france or the us or something were to get a big enough chunk of its economy under worker control, enough to exert counter-influence in the electoral front. Unless you're like the US itself, even if enough people came to believe in socialism enough to ignore a gorillion dollars being spent in propaganda they can always just invade you. You know they'll invade you're Irak, but even if you're france, I'm not so very sure. So the only solution they find is what they call dictatorship of the proletariat. (btw this isn't my interpretation, Lenin wrote a bunch about imperalism.)

But I'm not so sure, myself. I'm not against the argument that revolutions and post-revolutionary authoritarian governments can end up being on balance a good thing even if bad things happen during them (I'm kind of a bonapartist, I think? and anyway I'd say that the vietnamese, chinese and bolivians live better now than they would in a world where their revolutions hadn't happened), but I hope there's a better way. The allende experiment, for example, would probably not get such a vigorous antiimperialist response right now as it got in the seventies, and the US empire is, thank god, on the wane. the EU is also a lot nicer than colonial france was to vietnam. or belgium to the congo. It got easier to start liberal revolutions after the first try, too.

[MacAnDàil]

The USSR was awful in its dictatorship and its handling of the economy. Same goes for Khmer Rouge and PCR etc.

I think the main defense of communism is threefold:

1° Some countries have managed to become more democratic (e.g. Nepal in 2008, where the monarchy was abolished), or at least no less democratic (e.g. Cyprus), under communists.

2° In contrast to fascism, the main ideologues are not the dictators: while Lenin and Stalin did some theorising, the main and original ideologues of communism are still Marx and Engels, who were activists with faults but no dictators.

3° The central idea ('more power to the workers') is not awful, so the worst parts can be reformed out of the ideology.

[Ares Land]

Travis, scandinavia isn't market socialism. It's social democracy, which is nice and all but is not clear can exist without our highly exploitative system of international division of labour.

Exploitation of cheap labor doesn't allow social democracy, it's actually a major threat to it.
In effect it holds standards of living back by allowing employers to shop around.
In the long run, it kills economic growth and destroys industrial capacity.

Generally, social democracies fared a lot better when outsourcing was less practical.

In response to various comments: the general panic about AI is completely unwarranted. Marketers are ridiculously overhyping it, and pundits have found a new line of work in rehashing old 1930's SF stories, but AI is nowhere near able to replace us. The current problems with AI isn't that it's taking over but that it's certainly not working as advertised, and that generally we're wasting money on it.

I don't think automation causes unemployment either. (There's not even a correlation between technological advances and unemployement). If anything, we're working harder than before!

[Raphael]

I don't think automation causes unemployment either. (There's not even a correlation between technological advances and unemployement). If anything, we're working harder than before!

Isn't that to some extent a case of fewer people working harder and more people being unemployed?

[Travis B.]

Travis, scandinavia isn't market socialism. It's social democracy, which is nice and all but is not clear can exist without our highly exploitative system of international division of labour.

I know that Scandinavia is social democratic, which should have been obvious from what I have written here. I just mention it as being the best system that has existed for an extended period of time (various revolutions being too short-lived and chaotic to be properly assessed).

On the question of value, I'm totally against using that word as a synonym for price: price is influenced by value, but also by many other things. Even if one is to be a capitalist and sincerely believe in economics as a science, it is too naive to believe those two things are the same.

Agreed.

At the same time, not every socialist idea is a great one. There really are big, gaping problems with centralism, and when you throw in authoritarianism you really do get a worse dystopia. Socialists need to address these concerns, not just assume that everyone will be nicer this time around.

Yes, it's kinda unfair that everyone always says "Last time you killed millions of people!" Or it would be, if the same people don't bring up (say) slavery or the British Empire to condemn capitalism. Sorry, but killing millions of people should put your ideology on the defensive.

I agree! but socialism, way I and your interviewee use it at least, does not mean, precisely, "whatever socialists believe". and also it doesn't mean the soviet union. I personally tend to be defensive of it cause its heart was, I feel, in the right place, but socialism as an idea is no more married to it than is democracy to the french revolutionary terror or the modern world to napoleon. The soviet union was pretty dystopian, no questions there: then again, so is the us for anyone who's not well off, and at that time particularly so was germany and japan, but also china, romania, indonesia, the philippines, india, etc. around the time it was started we had here the massacre of santa maría, a literal army formation mowing down two thousand, well, proletarians. at least the soviets were trying something better. Capitalism is pretty comfortable for well off americans, or for the french, but look at it from the point of view of a russian peasant, or a woman from burkina faso.

The difference between the oppression associated with big-C Communism and the Reign of Terror is that every instance of democratic centralism has been markedly oppressive by its very nature whereas democracy has shown itself to be the least oppressive system that has survived for an extended period so far, even if there have been quite a few cases of substantial oppression (e.g. slavery, Jim Crow, colonialism) that have existed in spite of it.

[Travis B.]

Travis, scandinavia isn't market socialism. It's social democracy, which is nice and all but is not clear can exist without our highly exploitative system of international division of labour.

Exploitation of cheap labor doesn't allow social democracy, it's actually a major threat to it.
In effect it holds standards of living back by allowing employers to shop around.
In the long run, it kills economic growth and destroys industrial capacity.

Generally, social democracies fared a lot better when outsourcing was less practical.

It should be noted that in market socialism, as opposed to social democracy, the threat of having one's job outsourced does not even exist, as it would require workers to democratically consent to outsourcing their own jobs.

[Ares Land]

Thanks to this thread, I finally got around to starting Piketty's new book. It's of genuine interest for conworlding as well as he goes exploring inequality in various eras and countries.

His proposal for participative socialism looks promising.

I'll be glad to report on it (but it'll be a while. It's heavy enough to go bash capitalist's skull when you're done reading.)

[mèþru]

I think outsourcing is actually on the whole a good thing. It brings capital to third world countries. I don't think donations from co-op would ever give that kind of money. Plus there's nothing about co-ops that make them any more averse to exploitation or imperialism - rejecting these things only make sense in the long term economic interests of countries, not individuals who cannot expect returns in their own lifetime from building up poor nations.

The idea of natural common interest of all workers in the world or class consciousness is a myth. This is one of the reasons why Chavez eventually nationalised so much of Venezuela's industry - he tried worker co-ops and saw that co-ops have no incentive to act more morally than any other company.

[MacAnDàil]

It may depends on the particular case, but does it generally bring 'capital' or exploitation? When a multinational builds a factory in Bangladesh, who benefits the most, the multinational or the Bangladeshi workers? It's only when the poor country takes control of large parts of the whole production process, like in China, does the poor get richer. And even there, it's much more the elite that's benefiting, even if the poor are getting richer too.

Class consciousness is possible but not inherently natural, and likely less easy than local or national consciousness. Local consciousness should be the easiest (and preferable to national consciousness for the possible links with eating locally for example), but it is harder in this globalised world.

Co-ops won't solve all the ills of the economy, but they're at least more democratic, so by their very nature they're solving one major problem.

[Travis B.]

It may depends on the particular case, but does it generally bring 'capital' or exploitation? When a multinational builds a factory in Bangladesh, who benefits the most, the multinational or the Bangladeshi workers? It's only when the poor country takes control of large parts of the whole production process, like in China, does the poor get richer. And even there, it's much more the elite that's benefiting, even if the poor are getting richer too.

Agreed completely; for the poor to truly benefit they need to take control of production themselves, but even with out that, poor countries taking control of production at least has the potential to uplift the poor to a degree.

Class consciousness is possible but not inherently natural, and likely less easy than local or national consciousness. Local consciousness should be the easiest (and preferable to national consciousness for the possible links with eating locally for example), but it is harder in this globalised world.

National consciousness and local consciousness are often opposed to one another, and I agree, local consciousness is preferable over national consciousness. I would also surmise that local consciousness is more compatible with class consciousness and that national consciousness is directly opposed to class consciousness.

Co-ops won't solve all the ills of the economy, but they're at least more democratic, so by their very nature they're solving one major problem.

Co-ops eliminate the exploitation of the workers by the capitalists, because by their very nature the workers are their own bosses and owners of their own enterprises and share the profits of their enterprises amongst themselves (aside from whatever taxes are levied by the state), and they largely eliminate the making of decisions which are unnecessarily detrimental to their own workers (e.g. laying them off and exporting their jobs). They are thus preferable to capitalist enterprises, whether in the first world or the third.

[Ares Land]

I think outsourcing is actually on the whole a good thing. It brings capital to third world countries. I don't think donations from co-op would ever give that kind of money. Plus there's nothing about co-ops that make them any more averse to exploitation or imperialism - rejecting these things only make sense in the long term economic interests of countries, not individuals who cannot expect returns in their own lifetime from building up poor nations.

On the whole, yes, globalization did bring benefits overall and allowed for the development of third world countries.
I think, however, that said devopment could haved skipped the 'Victorian sweatshop' bit.

It's interesting to see who benefitted too. Developing countries did, the 10% did, the 1% even more so. But for the rest of us got no benefit at all from the economic growth of the last 30 years. Well, actually, some of us benefitted a little, and others were net losers.
Generally industrial regions were ravaged.

(I'm originally from the industrial coast of Northern France, and the results of outsourcing are scary! Many people just went straight from working class exploitation to unemployment without any interval of middle-class prosperity. Keeping in mind that this is France, a country that manged to remain moderately egalitarian.)

As economics predict, outsourcing is a mutually advantageous proposition - but the thing is, in essence a minority just bagged the benefits.
My point is, far from making social democracy possible, it actually undermined it.

There's of course the environmental cost to consider -- and essentially the carbon footprint of container ships has been completely disregarded.

Of course what's done is done and trying to go back is a terrible idea... but we still can take a good look at the last 30 years and think of how it could have been handled better, if only to prepare for the future.

[mèþru]

I kind of need to take a break from this thread lest I spend all year arguing economics :p

[Travis B.]

Arguing that outsourcing is preferable to social democracy or market socialism within the first world is essentially stating that a marginal benefit to workers in the third world (and a much greater benefit to the 1%, be it in the first world or the third) at a great detriment to workers in the first world is preferable over a significant benefit, especially in the case of market socialism, to workers in the first world at the expense of both the 1% (because, in social democracy they are heavily taxed and their ability to exploit their workers is restrained to a degree, and especially in the case of market socialism, as then they may not even exist) and workers in the third world (because jobs are not exported to them). I personally cannot sympathize with this position myself. I would rather one group of workers have a great benefit and the 1% not benefit than another group of workers have a marginal benefit and the 1% have a great benefit.

[Ares Land]

The benefit to the poorest, worldwide isn't marginal, though:

http://piketty.pse.ens.fr/files/ideologie/pdf/G0.5.pdf

Legend: The 50% lowest income worldwide have experienced an important growth of their purchasing power between 1980 and 2018 (between +60% and +120%), the 1% highest income worldwide an even stronger growth (between +80% and +240%), on the other hand intermediate revenues have experienced a more limited growth. To summarize: inequalities decreased between the bottom and the middle of the worldwide income distribution, and increased between the middle and the top.

In other words, everyone benefited and so mèþru is essentially right... But the 1% benefited disproportionately.

(From an environmental perspective though... I'm not sure we came out ahead. I'm not terribly happy about the way this essentially enabled Chinese authoritarianism to look like The Way of the Future (TM). And of course it essentially destroyed social-democracy, with IMO dire consequences ahead.)

(*) But the devil is in the details. It was a net loss for some!

[rotting bones]

Regarding the third world: I have previously argued that looking at development in monetary terms is bogus. I won't inflict the same argument on you again. I only have one question: Have you read zompist's recommendation, Galbraith's The Predator State, and if so, do you think Galbraith is a far-left loony when it comes to the third world? This is a serious question. Gilbraith's message is not anti-capitalist like, say, Chomsky's.

Regarding co-ops: While I support co-ops under democratic socialism, I want to add a reminder that just having a market with co-ops is not sufficient to create jobs by popular demand rather than profitability. There is no reason to think that this won't reproduce many of the other dynamics of capitalist competition including artificial scarcity.

There is also a rhetorical problem with co-ops. Every time you bring up co-ops, the religious right parrots the line that since the Mondragon Corporation was founded by a Catholic priest, this proves that solidarity is only possible on religious terms. Therefore, we must ban abortion and essentially split the world into "civilizational" theocracies if we want to take power back from the wealthy.

I agree that this argument is nonsense, but that doesn't matter. Under capitalism, demand is expressed by the wealthy. If the wealthy want to spread religion, then voting for religion might create more opportunities in the short term even for co-ops. Compare the spread of Islamic fundamentalism from Saudi Arabia.

Regarding technology: I am in favor of technology. It is a great help if revenue generated by automated production makes everyone richer. Whether it does is a political question, not a scientific, technological or cultural one.

[Travis B.]

(From an environmental perspective though... I'm not sure we came out ahead. I'm not terribly happy about the way this essentially enabled Chinese authoritarianism to look like The Way of the Future (TM). And of course it essentially destroyed social-democracy, with IMO dire consequences ahead.)

Stuff like this is why I am not fond of Third World-ism. I hear arguments that Third World countries ought to be enabled to continue to destroy the environment while developed countries make some attempt to slow down their destruction of the environment in order to "catch up" with developed countries, arguments to which I am opposed as we need to stop the destruction of the environment ASAP, globally, and I honestly am unsympathetic with any supposed right to "catch up" in that light. Likewise, Third World-ism seems to downplay the importance of liberal democracy, something to which I am opposed, as many of the leading Third World countries are less liberal than most developed countries or are even outright autocratic.

[rotting bones]

In reality, while many third world countries are autocratic, they are also incompetent to the extent that it balances out. For example, in India, citizens fear to enter politics because they are afraid of being killed. At the same time, it is much easier to steal things that you need. This is very obvious in the realm of intellectual properties. Copyright laws basically don't exist. If you don't want to steal, many of the local political leaders will really help you out if you ask them by getting you money and jobs. They won't dismiss you as Nietzschean untermensch. They will probably expect you to return the favor by attending their political rallies.

PS. Those political leaders get their resources by being connected to local crooks. I don't know to what extent similar practices exist in developed countries. Needless to say, these third world practices are horrible and I don't support them.

[Ares Land]

Regarding the third world: I have previously argued that looking at development in monetary terms is bogus. I won't inflict the same argument on you again. I only have one question: Have you read zompist's recommendation, Galbraith's The Predator State, and if so, do you think Galbraith is a far-left loony when it comes to the third world? This is a serious question. Gilbraith's message is not anti-capitalist like, say, Chomsky's.

No, I haven't; though rereading a summary and zompist's review, there doesn't seem to be anything in Galbraith I disagree with!

China's development, for instance, is very much real! And it has very real limits; I mentioned some. China's definitely not an example to follow. But I suppose it's better to live under a totalitarian government and have a bit of money, than just getting the totalitarian government and no money at all. Better China than North Korea.

(But, again, given that it's always been pretty clear that the 1% have been bagging a disproportionate share of the profit, it's pretty scandalous that everyone's been letting them get away with it.)