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On Economic Justice

2013 February 21
by Ian Welsh

Who should get how much?

Who deserves how much money?

How do we decide?

It is, I believe, nonsense to say that deserve whatever we happen to earn.  The value of our money is not something which is reliant on us as individuals, but is based instead on the productive capacity of our society, something which individuals have almost nothing to do with.  Being born in America or Belgium is worth much more than being born in Nigeria or Bangladesh.  You didn’t choose your parents, you didn’t choose your upraising, you can’t be said to “deserve” much if anything as a result.

People whose parents are poor don’t get into university as much as those whose parents are wealthier, nor do they graduate as often.  Being lower on the socio-economic stratum reduces performance independent of ability, as the Spirit Level documents.  As the joke about George Bush ran, he was born on 3rd base and thought he hit a triple.  But the concept applies to so many of us.

Deserve is a very slippery word.

Perhaps we deserve more if we contribute more to society?  If this is the case then we can only look at, say, the bankers and brokers of Wall Street, Bay Street and Fleet Street and say “they don’t deserve their money”, because they damaged the world economic system, damage which caused many people to lose their homes, caused food inflation and hunger, and certainly led to many deaths and much suffering which would not have occured otherwise.  Financialization of the economy gave them great rewards at great cost to many of their fellow citizens.  And it required trillions of dollars to bail them out, and even after they were bailed out, the damage they did was not undone.

Only by the most debased principles can, say, bankers, be said to deserve their money, the same principle that lead Thucydides to write that the strong do as they will, and the weak suffer what they must.  The same principles that say anything someone can steal or take, they deserve.

Is that justice?  Does that create a society we want to live in?  As we have, more and more, come to believe that people deserve to keep whatever they make, however they make it (as evinced by the erosion of progressive taxation), has it made our societies better places to live?

And, to go back to the initial point about the value of money being social and not individual, does it make sense to say an individual “deserves” their money when most of what their money is worth is created by other people?

As I’ve said before, too many jobs today do harm, do evil, rather than good.  The health insurance industry in the US makes its money essentially by denying care.  Hydrocarbon companies actively stand in the way of stopping climate change.  Many food companies produce food which they know leads to diabetes, obesity and chronic disease.

These jobs, these industries, actively decrease the well-being of individuals and of society.  They decrease the real value of money, because money which cannot buy well-being is worse than worthless, it is actively harmful.

Who does more harm to society, someone on welfare, or a banker who contributed to the biggest financial crisis since the Great Depression?  Who deserves more?  I find it hard to say that the banker deserves more than the person on welfare, for he or she has done vastly more harm.  Perhaps the banker works harder, but is working harder to do harm so praiseworthy?  Is it worthy of reward?

No compassionate society can base distribution of money or goods entirely on contribution to society.  If we say that those who don’t contribute deserve nothing, we move quickly into dystopic territory, because someone who receives no goods, dies.  If we take the harm principle too seriously, we could easily move into a scenario where we would find the arguments for killing those who do harm overwhelmingly strong.  And make no mistake, those in power, private or powerful, can do more harm than almost any garden-variety criminal can.  Even a serial killer doesn’t kill as many people as a bad policy can.

Justice recognizes that so much of what we are, so much of what we do, is based on circumstances.  Humans are malleable, most people, under the wrong circumstances, will do the wrong thing.  Most people, under the right circumstances, will do the right thing, too. That does not mean that we can tolerate too much of the wrong thing, it does not mean we say “oh, they couldn’t help themselves”, it simply means that we put the emphasis on correction, not vengeance; it simply means that we are compassionate, as we would hope others would be compassionate to us.

So we give a good living to those who contribute little, we correct those who do harm, if necessary through criminal sanctions, but better by finding work for them where their talents can do good, not harm.  We do not allow major industries which do more harm than good.  We recognize that people do change, and someone who is not contributing as much as we might want right now may contribute more in the future.

Knowing that most of the value of money is not individual, that even the most rewarded are rewarded because of the society and times he lives in, we put a cap on rewards.

(Note: There is much more to say about economic justice.)

39 Responses
  1. February 21, 2013

    Thank you for writing this.

  2. February 22, 2013

    A friend and I were discussing health care and he said that health care is a basic right and that everyone is entitled to it. I have my doubts about that, historically it has been reserved for the rich, and I do not consider it a “right” at all. That does not mean that I do not believe we should have universal health care. We should. Not because everyone deserves it, but because a nation which calls itself “great” should provide it. It is what we as a nation should do. We should not give our citizens what they deserve, or what they want, we should provide them with what they need.

  3. David Kowalski permalink
    February 22, 2013

    Back in the early 1930s, Babe Ruth was publicly criticized for making more money than the President of the United States. Ruth replied, “I had a better year than Hoover did last year.” That was an example of bad policy causing a lot of harm. Well, the welfare recipient or the McDonald’s worker had a better year than the banker, certainly of late.

    Thanks, Ian.

  4. Jerome permalink
    February 22, 2013

    This is based off far too many false-premises, assumptions, and child-like notions of “justice” or “fairness.” It brings to mind the differences between informed and uninformed thought: a great example would be minimum wage.
    Children and the uninformed think that it would be “fair” to raise the minimum wage for everyone. For them, it is a simple equation: higher minimum wage means more people make more money. This is an absolute philosophy – one who argues for higher minimum wage will be hard-pressed to defend why their argument cannot be extended to $200/hr, or $1,000/hr, if it is an absolute good and does no harm. To admit that it is not feasible at such levels it to recognize the fatal flaw in external price controls.

    The informed will think a bit deeper: raising the minimum wage is in fact a very UNFAIR act. The employer is not making more money, so increased salary requirements necessarily mean a reduction in headcount and often an increase in workload. The least qualified individuals – especially the young – are the first to be fired and the last to be considered for new positions. Breaking into the workforce without job experience, which for teens has been best done through entry-level, low-paying jobs, becomes infinitely harder. For disadvantaged youths – among the most vulnerable members of our society – it becomes doubly so. Why take a chance on hiring a troubled teen when, for the same money, you can hire someone more qualified, due to lesser job availability and heightened demand?

    Another example, the health care mandate. In order to encompass more than simply FT workers, the affordable care act requires that employers provide health care for their workers putting in more than 30 hours a week, or pay dramatically excessive fines. The goal was to facilitate workplaces where the dramatic majority have health care. But to ignore the free market is to throw the most vulnerable into the gutter. Indeed, businesses have decided that, rather than pay excessive fines or provide expensive health care (remember, there is nothing to increase their profits – they cannot magically improve their margins with higher costs), they will instead REDUCE the hours for employees. Virtually all of the major fast-food chains, for example, have announced programs to do just that. The result of the “good intention” behind these external controls is that the young and disadvantaged who are desperately in need of these jobs will now take home smaller pay checks for fewer hours worked.

    It is popular these days to take our ire out on bankers, but remember that the responsibility for the crisis itself does NOT lie in corporate greed, or wall-street capitalism. NO private enterprise would lend money to unqualified individuals to invest in property when the chance of being repaid was virtually nil. In fact, it was people concerned with “justice” and “fairness” who were responsible for the laws *requiring* financial institutions to make countless billions of dollars in loans to these individuals, as well as to make trades on those loans and treat them as reliable securities. This terrible policy was pointed out countless times to its architects, eliciting the famous response of Barney Frank, then-chairman of the house financial services committee and perhaps the single person most responsible for our fiscal disaster, a response that would lead us down a path to a great recession mere years later: “I do not want the same kind of focus on safety and soundness [in the regulation of Fannie Mae and Freddie Mac] that we have in the Office of the Comptroller of the Currency and the Office of Thrift Supervision. I want to roll the dice a little bit more in this situation towards subsidized housing.”

    The terrible truth is this: many people have such a powerful need to feel righteous, fair and just that they will blindly pursue policies conveniently labeled as such for self-affirmation. The fact that they almost never critically examine the RESULTS of those policies is telling: the fervent support of “equality” and “justice” is not for the oppressed, but for the delicate self-image of the advocate him/herself, else they’d be concerned with the harm their policies had wrought.

    You mentioned that companies are standing in the way of fighting climate change. Why, exactly, is climate change bad? Critically think about it. Hasn’t the climate been changing since this planet existed? Is it truly rational to believe that the climate is at it’s natural state in stasis? If humans did not exist, would not the climate still continue to change? Doesn’t increased CO2 in our atmosphere dramatically improve life in 3rd world countries by massive documented increases in crop growth and biosphere at all levels? More food means more lives saved, more profits and a faster ascent out of 3rd-world status. Indeed, throughout history, cold periods have been documented with decreased productivity for humanity, and warm periods with growth. Those who wish for draconian methods to “prevent” or “stall” the world’s most naturally-occurring phenomenon (climate and its cycles) will do untold harm to third world countries, which are unable to meet strict pollution-reduction requirements and would lose entire industries and or valuable trade partners, either of which occurrence would plunge them back into economic dark-ages and result in many, MANY deaths.

    The greatest instrument in raising humans out of poverty, increasing standards of living and developing society has been the free market. That *is* justice.

  5. February 22, 2013

    When you see money as something more real than a simple human abstraction – i.e., believe in “Economic Man” – you usually end up with a creature like @Jerome.

    It’s hard to argue with such zero-sum logic on its own terms. Unless of course you have a more nuanced and sophisticated view of both economics and human nature (I’m sure Ian could provide a fine shredding – and it’s possible he’s putting one together as I write this.)

    As I find economics a very difficult field myself, I can only say that it is the tendency to “make real” this completely superfluous abstraction that money provides us as an economic mediator that triggers such black-and-white assessments of the worth of human activity (it is no accident that these same people tend to be “gold bugs,” as they have a profound need to suck the “abstractiveness” out of anything before it can be contemplated.) There may be other factors at play here, but the objectification, the materialization, of wealth has led to all sorts of human disaster – like the worship of progress and productivity (for some, a pyramid looks like a “wonder of the world,” for others, a blood-stained testament to human exploitation for no good reason whatsofuckingever,) or the search for, and accumulation of, “security” (like agriculture and its unfettered production, leading to Malthusian outcomes*).

    I’m trying not to ramble (an indication of how difficult this subject is for me,) but this also ties into our mechanistic application of “GDP” as a measure of national worth – the very creator of this yardstick warned that it is a perversion if human well-being were not held in as high a regard.

    *I am extending this idea to all resource depletion, not merely the inability to directly produce the amount of food necessary to a given population – technology, with the help of cheap energy, has made something of a joke of Malthusian starvation in modern times, but you just wait…

  6. BlizzardOfOz permalink
    February 22, 2013

    “The greatest instrument in raising humans out of poverty, increasing standards of living and developing society has been the free market. That *is* justice.”

    With all due respect, what a rancid, steaming pile of bullshit that is. The unicorn made of pixie dust that you call the “free market” probably has its purest real-world expression in feudalism. American-style capitalism, on the other hand, has always relied heavily on state regulation and direct intervention via infrastructure projects (Eerie Canal, Hoover Dam, etc).

    To re-state the above then, the “greatest instrument in raising humans out of poverty, increasing standards of living and developing society” has been the human mind. The discoveries of electricity, of the atom, of the transistor, have raised standards of living more, by orders of magnitude, than any “free” “market” ever has, or could. You might observe that every time someone’s life is rendered solitary, poor, nasty, brutish and short, by poverty, the potential for such transformative discoveries is destroyed along with it.

  7. February 22, 2013

    The greatest instrument in raising humans out of poverty, increasing standards of living and developing society has been the free market.

    There is no such thing as a “free market.” The all-holy Market Deity, now so fervently worshipped, is a fiction. The “free” market is propped up every which to Sunday by the government, as Jerome surely knows.

    Otherwise, thanks for the post, Ian. (P.S. The expression is, “Born on third base and thinks he hit a home run.”)

  8. BlizzardOfOz permalink
    February 22, 2013

    Money should not be a difficult subject to grasp at a high level. It’s a fiction, and at best a proxy for the real economy. The real economy is what matters, and that’s how people invest their labor. Bankers want you to think that money is what’s real, because they control the money supply and use it to control governments and societies in their (warped) interests.

    Suggest the clear truth that money is a fiction, and watch all “conservatives” and neoliberals (oligarchs and their banker marionettes) within earshot have an apoplexy.

  9. David Kowalski permalink
    February 22, 2013

    Sorry, Lisa Simeone, the original joke was by Ann Richards and Ian stated it as told. The joke must not have taken as Texans mysteriously chose W. for Governor and Americans made it close enough that the Supremes could choose him as President.

    One more comment on Jerome. The free market hit its high point in the U.S. during the period of the Long Recession between 1873 and 1898. The last five years of that era were spookily like our last five years, a recession that would not end complete with war fever.

    The last 30 or so years are also not a ringing endorsement for even limited free markets nor are the 1920′s. The policy in the U.S. has been an abject failure even without the important issues of social justice and human worth.

    I have suffered under the delusion that money is the sole arbiter of my worth for much of my life. It was not productive economically nor good for me personally and I think it is not so good for us as a society.

  10. DFS permalink
    February 22, 2013

    Y’all being trolled. The Barney Frank bit gives the game away.

  11. February 22, 2013

    David, holy shit, I never knew that. I’d always heard the “home run” thing. Okay, thanks, will adjust my quotation from now on. (But it just doesn’t — even though Ann Richards, god bless her — have the same ring!)

  12. February 22, 2013

    I tend to agree with author Iain M. Banks, that “Money is a sign of poverty”. Its entire purpose is to enforce power in a scarcity economy.

    “Who should get how much? Who deserves how much money?” That’s what the people with the guns, the police, and the armies get to decide.

  13. February 22, 2013

    I think mostly we muddle through without any dominant theory of justice. I mean, people talk about theories of justice plenty. People argue for this or that public policy based on them but I don’t think any of the theories really describes what we do. I don’t think any will.

    “Hey, look, there’s too many young black men in jail. Way too many. We need better policies.”

    There’s no real theory there. You either agree or you don’t.

  14. Alcuin permalink
    February 22, 2013

    The “free market” would not exist without the State. The only thing that saves Capitalism is the State. Period. End of discussion. What I think would be more useful is for people to get beyond this discussion about markets. Markets, as most people define them, are a means to extract “surplus” wealth. That kind of “market” did not exist in pre-capitalist societies. A dose of David Bollier would be a good antidote to all this crap about “free markets.” Ivan Illich and Karl Polanyi are also useful reads.

    @Tom Allen: right on!

  15. Alcuin permalink
    February 22, 2013

    @ David Kowalski:

    The Unknown Barry Switzer, in the December 14, 1986 edition of the Chicago Tribune, attributes the saying about being born on third base to Barry Switzer.

  16. David Kowalski permalink
    February 22, 2013

    @alcuin Barry Switzer apparently invented the quote but Jim Hightower applied it to George H.W. Bush in 1988 and was followed up by Llolyd Bentsen. Six years later, Ann Richards used the quote on George W. Bush (which was my own memory of it).

    Research shows this quote being attributed to Richards and being “misattributed” and both versions are right.

  17. Bruce Wilder permalink
    February 23, 2013

    I’d like to throw out a couple of observations I made in the last couple of days, which puzzled me, and seem, somehow, to relate to what’s been said in OP essay.

    I saw Obama’s science adviser on the PBS NewsHour the other night, in connection with Obama’s brain-mapping plan, and he touted genome-mapping, I think, as having paid back the public investment made at a rate of better than 40 to one, in private business opportunities. There ensued some discussion with the moderator, over whether, given such a rate of return, there was even any need for government intervention — if the return was that good, couldn’t private business be relied on to make such investments? This was coming from the affable moderator/interviewer playing devil’s advocate — there was no right-wing nut on the program to play he said/she said; it was just an interview with the science adviser. The science adviser had some blah, blah, of course, but it wasn’t particularly sharp. What puzzled me was that neither science adviser nor moderater showed much awareness that it 1.) might not be easy for a private entity to capture enough of the return to finance the investment, and 2.) to the extent that a private entity captures the return on investment in knowledge, it diminishes the value of that knowledge to society.

    In the same program, or another I saw, Attorney General Holder was shown touting some Justice Department initiative to protect the trade secrets and intellectual property (IP) of private business corporations, claiming that these secrets or property can be worth many millions of dollars, and confidently claiming, by implication, that it was worthwhile for the government to spend millions helping to protect those secrets. I wondered to my self whether Holder imagines the common wealth to be the sum of private wealth, including private wealth in IP.

    I’m not someone, who thinks that making “rent-seeking” into a simple-minded pejorative, a la public choice economics, did anything good for human understanding. But, there was a time, when the notion that the rentier was, arguably, something of an economic drone, was part of the common understanding. The great expansion of public education, from the 19th century onward, was financed largely out of property taxes, I assume, because it was understood that the general rise of educational level would flow through the economy broadly, to lodge, in part, in higher property values (in much the way that the value of a public investment in a road does, though with less location-specificity than a road); educated people might crowd into cities, earning higher incomes, but pay out much of those higher incomes in higher rents. Asking students to finance their educations with loans seems remarkably obtuse, given the way in which knowledge and education pay off, and how that pay off flows through a society.

    Ian focuses on the moral meaning of “deserve”, but against the background that economic income is far less a product of individual effort in isolation, than it is the context of the particular society and political economy in which the individual makes her effort. The “value of our money”, as he cleverly frames it, depends on the productivity of the society. It is a matter, I might venture, of the flow of mutually beneficial cooperation and, not just the exchange of value for value, but the calculated gift of public goods to add to the flow. And, the opposite is an economy of extraction, where the flow is stopped, to facilitate and concentrate private gain.

  18. Terry Mock permalink
    February 23, 2013

    Ian writes a thought provoking piece “On Economic Justice” and asks “Who should get how much? Who deserves how much money? How do we decide?” He then correctly concludes that, “Justice recognizes that so much of what we are, so much of what we do, is based on circumstances”. I think this post and the comments demonstrate that, given that circumstances vary widely, there is no way to create a simple effective formula for “economic justice”. Furthermore, based on historical facts, I would also add that any attempt at achieving ultimate “economic” justice without also considering “social” and “environmental” justice is doomed to failure.

    Designing a ‘Big Wheel’ for Civilization – Everyone who has ridden a tricycle understands the fact that three wheels are more stable than one or two. In fact, a three-legged stool gives greater stability than one with four (or more) legs when the surface on which the stool sits is not perfectly level.

    We also have learned that the simple balance of three applies not only to working with the laws of gravity, but to all aspects of life, hence the triple bottom line of sustainable development. What is harder to understand is why humans have so much difficulty applying this basic scientific fact through better balanced public and private policy…. http://www.triplepundit.com/2010/12/designing-big-wheel-civilization/

  19. February 23, 2013

    How do we attain economic justice? This has all been hashed out already, you just need to go to non traditional libraries to get your books. Or read this:

    http://www.infoshop.org/AnAnarchistFAQ

    (No idea why they insist on the cute bunnies but it is a very well written explanation of Anarchism.)

    It amuses me that American society gets nervously close to Anarchism every fifty or so years and then cowers away like a shy school girl to doom itself in whorish, depressed loneliness.

  20. Ronny permalink
    February 23, 2013

    Well written.

    I like to think of inequality as the result of concentrated power and wage rate as a result of how connected you are in the nexus of power.

    There will be no economic justice unless power is redistributed among the people. The Aristotelian balance between government, private entities and (global) citizens must be restored to tame the beast that is capitalism.

  21. February 23, 2013

    @Ronney, your comment screams of continued issues. When you redistribute power you still have powerful people who will eventually want to expand their power. What needs to be done is to get rid of the mechanisms of power so no one has, or can ever have, any power over anyone else.

  22. Celsius 233 permalink
    February 23, 2013

    @ Croatoan;
    What needs to be done is to get rid of the mechanisms of power so no one has, or can ever have, any power over anyone else.
    ~~~~~~~~~~~~~~~~
    That, quite literally, is not humanly possible, IMO.

  23. February 23, 2013

    @Celsius233 ; That, quite literally, is not humanly possible, IMO.
    ~~~
    As I said, you would need to read more on anarchism to know how it is possible. Power is acquired through hoarding of the commons by an individual or group.

    But I do not think the change will come about through force, a mistake that anarchists continue to make, but rather through a lengthy natural process of education through the stupidity of or efforts of trying to control the world.

  24. February 23, 2013

    @Terry Mock. Another three is “Liberty, Equality, Fraternity “.

  25. Alcuin permalink
    February 23, 2013

    @Croatan: Thank you for making the point that anarchists continue to believe that change will come about through force. Some anarchists, not all. In fact, I’d venture to say that a majority of anarchists don’t believe that change comes through the use of force. The noisy minority (mostly youthful) are the recipients of the attention of the mainstream media, which benefits from portraying anarchists as violent. Anarchism is a direct challenge to the power of the State and it is thus in the State’s best interest to portray anarchists as violence-prone trouble-makers. For the most part, that has worked very well – how often are anarchists ever portrayed as peaceful? No, they are always “bomb-throwers”, “glass-smashers”, “arsonists”, and such.

    Not many people take the time to go to the “non-traditional” libraries available to find out what anarchism really is and start applying those lessons to their personal belief systems. If they did, we wouldn’t have nearly as many people voting for the Lesser Evil. Or voting at all, for that matter. We’d have a lot more people working, every day, to ensure that economic justice prevailed, at every level of society, instead of voting for the tools of the capitalist class to retain their grip on power. Bruce Wilder wonders, “I wondered to my self whether Holder imagines the common wealth to be the sum of private wealth, including private wealth in IP (intellectual property)”. Stop wondering, Bruce. Holder doesn’t “imagine”; he believes. And he and his cohorts are doing everything possible to ensure that the commons continues to shrink, thus benefiting the capitalist class.

    Here’s another link for lurkers to graze upon – enjoy!

  26. February 23, 2013

    This is never off-topic. This film is short – one hour – and grimly engrossing. It is worth every minute of your time. There are not many things that can boast that.

    Watch ‘Obey’: Film Based on Chris Hedges’ ‘Death of the Liberal Class’

  27. Celsius 233 permalink
    February 23, 2013

    @ Croatoan
    February 23, 2013
    @Celsius233 ; That, quite literally, is not humanly possible, IMO.
    ~~~
    As I said, you would need to read more on anarchism to know how it is possible.
    ~~~~~~~~~~~~~~~
    That’s rather presumptive of you to say I’d need to read more about Anarchism/y.
    As Alcuin rightly says; most Anarchists are not violent. A myth perpetrated by the politicians and vested capitalists.
    To me it’s just another “ism” around which to form beliefs; now there’s something to investigate.

  28. February 23, 2013

    To me it’s just another “ism” around which to form beliefs; now there’s something to investigate.

    That certainly can be true, @Celsius233, but – at the risk of also sounding presumptious – it can also be more than that if one remains attentive. It’s dangerous to simply dump it into that barrel into which everything can be dumped.

  29. Celsius 233 permalink
    February 23, 2013

    ^ Oh dear; another point missed. Sigh…

  30. Wat permalink
    February 23, 2013

    I think productive capacity is now so great that we can afford to give everyone subsistence (food, water, shelter, medicine, education) just for having been born. This takes competition for subsistence out of the equation of life, which is a condition that prompts so much nastiness in people. Prices of commodities should be regulated so they do not get out of step with subsistence income. It is important to fund government to administer this, so it is crucial to elect officeholders whose interests are actually in line with the interest of the general population. To make sure corruption does not arise again as it has now, government should provide all political campaign financing for volunteer-signature-drive-validated candidates, no private financing should be allowed, from individuals, corporations, or unions. Election Day should be a national holiday, and voting should be compulsory, with a $20 fine for failure, with exceptions for extenuating circumstances (birth, injury, legit unavoidable business events, etc.) and conscientious objection (“freedom to not vote”). All campaign media coverage should be considered an unavoidable campaign contribution, and should be regulated to make sure no candidate receives disproportional coverage.

  31. February 23, 2013

    ^ Oh dear; another point missed. Sigh…

    I’m always happy to entertain the possibility – I certainly know that I can be thick-headed now and again. Perhaps you might not find it too tiresome to help me understand what I may have missed. (I certainly didn’t intend to be dismissive of the point you were trying to make – I was merely making an observation.)

  32. Celsius 233 permalink
    February 23, 2013

    @ Petro; no problem.

    Belief. A very interesting part of being human and little understood it seems.
    It likewise seems we want to question everything coming at us from the outside but are loath to explore the places/origins from which we come.
    Belief is such a huge part of our being, IMO.
    Most forums are about attacking or defending one belief against another.
    I see this as very relevant to most of the points made here and elsewhere.
    Belief; please leave home without it… ;)

  33. February 23, 2013

    I absolutely and completely agree, F451. :)

    As one who has been obsessively dedicated to eradicating belief in my own psyche as much as is humanly possible, I’m a tad more optimistic about the possibility than most people are. My assertions about that are more often that not met with… disbelief.

  34. February 23, 2013

    (And thanks for clarifying.)

  35. Ronny permalink
    February 24, 2013

    @Croatoan

    I think you are correct in pointing out that power accumulates over time, usually with positive feedback mechanism, i.e. people with power will accumulates more power.

    Perhaps anarchism is one of the ways to dissipate and/or eliminate this feedback mechanism. I will certainly check your links out ASAP.

    I gained quite a bit of insight regarding “Capital as power” from this paper that I read
    “Capital as power: Toward a new cosmology of capitalism “by Shimshon Bichler and Jonathan Nitzan available here.

    My problem with the current version of “capitalism” is the “fictitious capital” (Marx, M. Hudson) that produces “fictitious power”. Garbage derivatives on homes mortgages and corporations are counted as “capital”, yielding tremendous power to the institutions producing (underwriting) them.

    We live in a world where production of goods and “capital” is worshipped. With accumulation of “capital” on the hands of certain people, I personally think it is highly probable that there will be an accumulation of power.

    The issue of power balance has been explored since the Greek philosophers. What I am suggesting is a mechanism similar to Plato’s Republic’s check and recheck processes between the Executive, Legislative, and Judiciary to stop one entity from accumulating “too much” power.

    The next question is “Who watch the watchers?” and how will you ensure there is no collusion between those entities? I think that’s where Anarchism will come in.

  36. Alcuin permalink
    February 24, 2013

    @Ronny: I count myself among many on the Left who have never read Marx’s Capital. While I am familiar with the work of Bichler and Nitzan, I don’t see how anyone can fully appreciate any Marxist argument without having read the original. I’ll soon have a great deal of time on my hands and I intend to buy a copy of David Harvey’s A Companion to Marx’s Capital, The Limits to Capital, and, of course, volume 1 of Marx’s Capital. I’ll read Harvey’s Companion and consult Capital as I forge ahead. David Harvey also has a website with videos of his class lectures, a class he has been teaching for over 40 years, that I will also use to help me along.

    While I sympathize with your thoughts on the usefulness of anarchism, the subject is quite a bit more complex than you might think. There are a dizzying variety of “anarchisms” that will try your patience. Anarchism, like Marxism (and any other “ism” – thank you, Celsius 233) is a complicated subject. In your wanderings, it wouldn’t hurt to delve into the British enclosure movement – a movement, I dare say, that was the origin of Marx’s ideas about primitive accumulation. Have fun!

  37. Alcuin permalink
    February 24, 2013

    For those interested in Bichler and Nitzan, they have an archive of their work at York University.

  38. Ronny permalink
    February 24, 2013

    @Alcuin

    Thanks for the links and advices. That article was my first encounter with Bichler and Nitzan, didn’t know they have so many publications.

    I suppose a great deal of readings and reflections is in order.

  39. Arthur Carlson permalink
    February 26, 2013

    Kudos first to Ian for his articulate statement of the conundrum created by the contrast between ethics and the current social paradigm. It is basically descriptive whilst so many of the comments are prescriptive and, in my view, defensive when some of the realities are indefensible.

    @ Jerome; NO private enterprise would lend money to unqualified individuals to invest in property when the chance of being repaid was virtually nil. If that private enterprise generated revenues by promoting the transaction through fees and was able to largely insulate itself from the consequences of the probable default (a task at which some were successful and at which some failed spectacularly), then many, many private enterprise would innovate like crazy to do exactly that. And the rest of you examples are based on philosophical hypotheticals developed in ivory towers and suffer from the same flaw of logic; that one can identify a winner or loser in a scenario does not establish that the proposal makes for a society that is better off or worse. As you start this by creating a category of thought of the uninformed, I would suggest serious effort be made to ensure you are not of that group.

    @Bruce Wilder; I though you examples were very perceptive, but I think the deeper question is how do the rewards of new knowledge, invention, or creativity get directed in an economic system so that the income derived from these properties gets used to consume other products of the system, generating income sufficient to sustain the cycle of income/expenditure/income. Embedded in the idea of deserve Ian examines is the notion that income goes to a party in proportion to the benefit they provide so that the party will continue to generate that utility.

    @Croaton, Ronny, Petro, & Celsius 233; There is a presupposition in your comments cycle that the powerful and powerless and benefactors or victims of an unequal allocation of power; of the ability to influence or control matters around themselves. I am intrigued by the thesis that the powerful have their power because they have attracted the support of the less powerful and powerless; these latter giving this in exchange for having common cause with the powerful so that their exercise of power might deliver greater advantage than the party might obtain of their own. A simplistic example is the least powerful citizen of an OECD country versus a modestly powerful person in a failed nation of totalitarian state. I could cite various studies that support this thesis, but a more compelling case is made by the mathematics emerging from the study of networks and particularly the role of hubs in the development and stability of large-scale networks.

    It would be easy for me to quarrel with most of the points Ian makes, there is more than enough truth in them to conclude that they demand thorough exploration. I think that there is causality in activities and institutions that barely existed 30 and 60 years ago. What was perceptive mid-20th Century or before is next to worthless today. There is a pressing need to through out most of the assumptions integrated into established economic thought and to find new, more realistic assumptions upon which to base policy-driving models.

    I see Jerome, not as a sadly misinformed individual, but as one convinced of models and ideas that were compelling in 1950 but are flawed today, not because they were mistaken in 1950, but because today is nothing like 1950 in very fundamental ways.

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