Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Economics Page 50 of 98

The Panama Papers Leak

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On April 5, 2016

49 Comments

You’ve probably read about it already. A Panamian law firm had its files leaked, and they reveal how rich people store money offshore to avoid taxes. In some cases legally, in some cases illegally, and, in pretty much all cases, unethically.

This is why we can’t have nice stuff: The rich simply don’t want to pay for a decent society. They just want to be filthy rich.

There are all sorts of additions to that, but that is the essence.

There is no such thing as a good society in which to live that is not relatively egalitarian. Of course, you can all be equal in poverty, but strangely enough, unless it’s desperate poverty, those people tend to be happy. Moving to the cities to get involved with China’s “economic miracle” meant an actual decrease in happiness. When the Chinese government tries to close traditional villages, the villagers often fight, and by that I don’t mean “protest,” I mean crack skulls and even, on occasion, actually fight the army and win.

Rich people caused the financial crisis, got bailed out, then insisted that poor people had to be punished for it.

If you want a good society, you keep the rich poor.

The other rule is that no one gets to opt out of anything which matters. The rich and powerful must use the same schools, airplanes, security, health care, roads, and military service as everyone else.

An absolutely fair draft, a medical system where better care cannot be bought by money or forced by power, where the children of the rich go to the same universities and schools as the poor will be a good society. A society where everyone uses public defenders chosen by lottery is a society with a fair justice system

Why? Because this forces the rich ensure that those schools, hospitals, and so on, work.  And no, your average billionaire is not subjecting his wife to a TSA porno scan and pat down. TSA agents only get to pull aside and molest hotties who aren’t part of the .1 percent.

One of the ways we will know that governments are finally serious about inequality is when they brutally crack down on tax evasion. It isn’t that hard to do, despite what everyone says. I’ve worked in a major financial institution; money going in and out of the country is examined, data is sent to authorities, etc. This stuff can be tracked easily, structuring is easy to detect, and a few criminal sentences (not fines) in high security prisons would make the point nicely.

If you make your money in country X, you pay taxes there. Money is a public utility. If you want to take it out of the country, the government acting for the people has the right to make that difficult, and indeed, tax it again or limit it.

Cyrptocurrencies like blockchain are, in part, a way for ordinary people to move money out of countries just like rich people do. This is a corrupt solution to a real problem: Our elites are corrupt, so we want to have the same right to be as corrupt as them–instead of insisting the corruption end.

There is no war but class war. The rich understand this, they have always understood it.

You keep the rich poor and weak, or they will eat you alive. Then they’ll kill you. The death toll from the 2008 financial collapse is in the millions, by any reasonable modeling of its consequences.

This is about your life, your death, and how well you live.

You should probably make it about the rich’s life, death, and how well they live.

Reasonable accommodations (a la Corbyn or Sanders) will be made. If they are not, unreasonable accommodations will be made. The rich will die or suffer in the same numbers as the poor.

But as a percentage, there just aren’t that many rich.

Too bad.

Update: Clinton supported the Panama free trade deal.

Here’s what Sanders said at the time:

Then, why would we be considering a stand-alone free trade agreement with this country?

Well, it turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in off-shore tax havens.  And, the Panama Free Trade Agreement would make this bad situation much worse.

Each and every year, the wealthy and large corporations evade $100 billion in U.S. taxes through abusive and illegal offshore tax havens in Panama and other countries.

According to Citizens for Tax Justice, “A tax haven . . . has one of three characteristics: It has no income tax or a very low-rate income tax; it has bank secrecy laws; and it has a history of non-cooperation with other countries on exchanging information about tax matters.  Panama has all three of those. … They’re probably the worst.”

Mr. President, the trade agreement with Panama would effectively bar the U.S. from cracking down on illegal and abusive offshore tax havens in Panama.  In fact, combating tax haven abuse in Panama would be a violation of this free trade agreement, exposing the U.S. to fines from international authorities.

In 2008, the Government Accountability Office said that 17 of the 100 largest American companies were operating a total of 42 subsidiaries in Panama.  This free trade agreement would make it easier for the wealthy and large corporations to avoid paying U.S. taxes and it must be defeated.  At a time when we have a record-breaking $14.7 trillion national debt and an unsustainable federal deficit, the last thing that we should be doing is making it easier for the wealthiest people and most profitable corporations in this country to avoid paying their fair share in taxes by setting-up offshore tax havens in Panama.

Vote Clinton! She’ll make sure your job gets sent overseas and that the rich don’t pay tax.

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Will Capitalism Be Replaced By Something Better?

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On April 2, 2016

30 Comments

The short answer is: “Who knows?”

The longer answer is “probably not,” simply because we have such a mess coming down the road in terms of climate change, resource exhaustion, imperial collapse, and so on.

But the answer isn’t “No.”

The answer is that it is possible. Not likely, but not so unlikely as to be a write off not worthy of consideration.

Far better systems can be thought up, I believe. I believe it’s even possible those systems would work with human nature well enough to be viable (a.k.a., are not utopian, in the impossible sense).

I also think they are our best alternative.

Wait? What?

Yeah. I think the odds are less than even that we pull it off, but I also think it is our best chance.  Sometimes the best bet you’ve got just isn’t a very good bet. We either fix the way our economic system works (how we turn resources into goods and services) and our political system works (how we make group choices) or we could go extinct. Better case scenarios involve billions of deaths and amazing amounts of suffering.

Of course, dividing the problem in two is wrong. Capitalism isn’t “just” an economic system.  The great mistake of the social sciences was changing from “political economics” to “economics.” Capitalism is a political choice, but it’s also how we make most of our group choices.

The right is right. Ideas matter, and the ideas on the ground during a crisis are important.  We’ve got a lot of crises ahead of us. That is bad, but it is also our hope. Setting up to win those crisis points is what matters. The neoliberals won the last one (the financial crisis), but no one wins them all.

It would be good if we had some radical options on the floor which would also make most of humanity better off, provide for freedom, and so on.

So figure out what you want to replace capitalism (or how it can be radically fixed); and do look seriously at the political system. Democracy is not going to be immune from the fallout (nor is the sort of one-party state China runs.)

We can create a better world, but that doesn’t mean we will. It’s up to us, to humanity, in the largest sense.

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The End of the Age of Oil

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On March 31, 2016

41 Comments

Has the last oil boom ended?

Electric cars will be cheaper to own than conventional cars by 2022, according to a new report.

The plummeting cost of batteries is key in leading to the tipping point, which would kickstart a mass market for electric vehicles, Bloomberg New Energy Finance (BNEF) analysts predict.

This is very good news for the world, and though the technology is certainly not carbon neutral, it is better than oil, the energy used to charge the battery can be kept relatively clean. Once upon a time, that energy was coal and other conventional energy sources, but coal is now more expensive than solar, and the price of solar is continuing to drop.

While this is good for the world, it’s going to be very, very bad for many countries. The oilarchies’ days are numbered. I will state right now that I doubt that Saudi Arabia’s monarchy will survive this.  Countries that are heavily reliant on oil, especially expensive oil, are going to be in trouble. The same is true of natural gas.

All resource booms end. Eventually resources are replaced. Once there was a huge rubber boom in Brazil: Then we learned how to make synthetic rubber.

We might get one more oil boom, but that’s it.

So: Alberta oil sands oil? Done. The Alberta-dominated Conservatives damaged terribly the Canadian manufacturing sector during the last oil boom by refusing to acknowledge that the high Canadian dollar affected manufacturing sales, but the good days won’t be coming back to Alberta.  It’s possible that Alberta has a key resource which will boom in the future of which I’m not aware (entirely possible), but if it doesn’t, Alberta’s high-flying days are done.

Go down your list of major oil exporters and look at the prices they need per barrel to make a profit. A lot of them are going to have to reduce production of the most expensive wells. This process will continue for years. Saudi oil production costs per barrel are under $10, but the price they require to keep their society running is much higher.

Cheap energy is an economically good thing. But the effects of dislocation will be immense.

Unfortunately, while this is great news for the environment, it is all too late to stop runaway climate change. Methane locked into land and ocean will be released now. It is too late, we have passed the point at which the process of global warming became self-reinforcing. It is now a vicious cycle and cannot be stopped by simply reducing carbon emissions.

Whoops!

We knew this would be the case, and we decided not to do anything about it. Let no one tell you otherwise.

A large amount of the world is going to become essentially uninhabitable due to heat. Climate change will change rainfall patterns and many areas will experience a decrease in agricultural productivity. Combined with aquifer depletion, conventional agriculture will take a huge hit.

This is a fixable problem. We can grow ten times as much food as standard agriculture in small, intensely cultivated plots, even indoors. We will have cheap energy. The remaining oil can be used for fertilizer until we have better solutions.

The next problem is water. Large parts of the world will not have enough fresh water. Water reclamation, desalinization, and other technologies around water are key here.

Geopolitically, there will be water wars. Watch nations where major rivers cross borders, and the up-river nations will want to take “more.” Canada, which has most of the world’s lakes, is in great danger from America, who will want that water in amounts and at prices for which we should not settle. Meanwhile, the US may drain the Great Lakes faster than they are replenished.

The mass migrations of this period will make the current “immigration crisis” look tame. It will be worse even than it is for the countries taking the biggest groups now (none of which are European).

Sea stocks are collapsed already, and will collapse past commercial fishing viability. Essentially, all the fish you eat will be “farmed.” Ocean acidification has killed the Great Barrier Reef, but the greater risk is that the ocean’s ability to absorb carbon may effectively end.

Combined with our continued deforestation, the lack of carbon fixing capacity, along with these various vicious cycles, could lead to a runaway climate change worse than virtually all the models I’ve seen are predicting.

If we had sense, we would be transitioning from conventional to intensive agriculture NOW (well, ok, 15 years ago minimum). We have spare workers–we do not have a spare Amazon. If we had sense, we would pay Brazilians and other mass deforestors more to stop what they’re doing than they get from continuing. We must mass-reforest, and re-wild land, and do so NOW.

This is also to avoid collapse of the biosphere, an event which is within the realm of possibility. If such a collapse occurs, humanity will go with it.

Our continuing reliance on very non-competitive markets to create what we need in time may wind up dooming our race. Markets are great and useful in this situation, but market support (such as was used for decades to create the computer industry) can jumpstart industries, cutting years to decades off the time it takes for prices and costs to drop sufficiently for mass adoption.

However, in general, the way we do Capitalism is going to have to change. Capitalism may need to be replaced with something better, but even if it continues the vast waste must end. The doctrine of planned obsolesence, for example, must go.

A world where we aren’t constantly producing crap we either never needed in the first place or wouldn’t need if we allowed engineers to design products to last will be a much nicer place to live, anyway. Yes, there’s a lot of work to be done to mitigate the coming disasters, but there is so much work going on which shouldn’t be done at all that we would most likely wind up working less and living better.

Those who survive, anyway.

The Age of Oil is coming to end. Did it last 20 years too long? Is the Age of Humanity also to end?

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Stopping Deflation? Dead Easy. So Why Isn’t It Being Done?

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On March 27, 2016

26 Comments

As with many problems we face today, this is a solved problem.

About half of the New Deal can be summed up as “wage and price supports.” The post-war economic paradigm in the West was also about making sure prices and wages rose.

Avoiding deflation, by the way, is mostly about ordinary people’s income. If you don’t want deflation, make sure ordinary people are getting more money, faster than inflation and that they’re spending it.

Oh, there’s a bunch of other stuff, most of which comes down to: “Don’t let any oligopolies or monopolies form without subjecting their prices to close control.” That means both “not too high” and “not too low.” Think classic regulated utilities.

“You will charge enough to pay your employees well, keep the infrastructure in good shape, and make five percent a year. No more, no less.”

(Five percent is an example, other (lowish) numbers can be used.)

We have, or are flirting with, deflation right now because we refuse to give ordinary people money in a way which makes them think they can afford to spend it.

We allow inflation in the worst possible areas, like housing and rental prices in cities with jobs, and luxury goods, but that’s pretty much it.

If you let fixed costs have inflation above income increases, then everything else is going to have to suffer deflation, because it is discretionary. Gotta eat and have a warm place to sleep, first.

If a government wanted to end inflation, it could be done easily enough.

First, you go back to progressive taxation on corporations and rich people, without loopholes, based on, “If you earn the money in our country you pay tax on it here.” Yes, there will be attempts at dodging (especially by multinationals); yes, there are ways to deal with them.

Then you spend the money in a way that produces local jobs and creates a tight market.

Here’s your dead simple idea: Every building in your country must be at least energy neutral, and all the energy infrastructure must be made “smart” so this can be done properly.

Financially, your central bank says, “We will accept “energy savings bonds at 98 percent,” thus creating a market for it.  Your government offers the loans. Your mortgage guarantee authority says, “We won’t guarantee any mortgage for a building which is not, at least, energy neutral.”

If you can grow some big ones, larger industrial countries must even slap a tariff on things like solar panels, so the manufacturing is done at home. The actual refitting of buildings, of course, can’t be offshored.

Lots and lots of jobs. A tight market. Raises for people in the building trades. A boom.

There are plenty of other ideas like this, because there are plenty of other things that need to be done.

The direction must be long term. It would take a long time to refit all of America’s building stock. Companies can invest in that, because they know it will still be going on in ten years. Likely longer.

Now, for this stuff to work, you must understand that high, progressive taxation is necessary. All that money will end up in a corporation or rich person’s pocket eventually. The government then takes it back and recirculates it. (Yes, MMT people, we could just print the money and forget the wealth effect, but that’s a terrible idea because oligarchies are terrible societies in which to lie.)

You should also go hard on monopolies and oligopolies (start with the app stores, which charge 30 percent–but that’s another article).

The point is simple enough: there’s a lot of stuff we should be doing, and doing that stuff would end deflation if we were serious about it. It would also make the economy a lot better for ordinary people.

This has been another episode of “how to do policy.” I remind readers that good policy is easy, and that I don’t write about it often because the problem is not good policy ideas, or how to fix our problems (we know how to fix most of them), but that our current political-economic organization does not want to implement policy that helps the majority of people if doing so will upset current concentrations of money and power.

Some sectors can die, yes (coal now, oil in the next 15 years), but the structure cannot change.

So, if you’re British, figure out how to get Corbyn elected in the face of the endless propaganda against him. If you’re in the US, Bernie is your (current) best bet. In general, figure out how to overthrow your current systems, which includes the people running them, and how to do it in such a way that there isn’t a counter coup. (This is a larger question than just electing a leader, as the UK’s Labor Party and media are currently at pains to teach Britons.)

We’ve blown the incremental change chance. Revolution will now be necessary. In some countries, it will be largely peaceful. In others, it will be stopped and stagnation will continue until destruction.

And in still others, it will be the guillotine.

Those who make peaceful rev…well, you know the rest.

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Pure Utilitarianism and Capitalism

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On March 5, 2016

8 Comments

Hilary Clinton recently tweeted the following.

On the face this is unexceptional. A business exists to do certain things, and employees are hired to contribute towards those actions. We hire an employee because we think they will do a good job.

Except that in our current system, we distribute goods through money, and most of how we distribute money is through corporations. You have a good life if you have a good job, pretty much. There are exceptions and they are exceptions.

Hilary has also said that she doesn’t favor a $15/hour minimum wage.

This is what happens when you think of people as assets. Some people don’t deserve $15/hour because they don’t “add enough value.”

But they are still people, and they still need to eat, sleep in a warm place, and have the occasional bit of entertainment.

They have value that cannot be reduced to their economic utility.

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If we had a society where everyone lived well whether they had a job or not, then we could make pure utilitarian arguments about employment. But when employment is required for people to be able to live decently, or even live at all, such arguments lead to treating huge masses of people as disposable, and consigning them to awful lives.

Again, this might be ok if we lived in a scarcity society, but we don’t. We produce enough food to feed everyone, we have the ability to house everyone, and so on. This would be especially true if we would dump the doctrine of planned obsolescence and produce goods meant to last pretty close to forever.

There are other arguments, of course, like “What is utility?”, bolstered by findings that blacks, say, get half the interviews as whites with identical resumes. Those are important arguments, but they pale next to, “Everyone should have a decent life, and that shouldn’t be contingent on whether they can make money for a billionaire.”

The economy and corporations exist to serve people, not the other way around. When they do not do so, the problem lies with them. This is not a subsistence farming community, it is not, “You work, you eat.” We’d be better off, in fact, if a lot of the work we are doing wasn’t done, because so much of it does more damage than good, even if it does generate a “profit.”

The core of any decent system of ethics, and thus of any political and economic order, is Kant’s maxim that people are ends, not means. When you forget that, you inevitably descend into monstrosity.

Stopping Donald Trump at the Convention

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On March 4, 2016

11 Comments

So, this is the plan. All the major candidates stay in the race, strategic is encouraged, and if Donald doesn’t have the majority of delegates at the convention, only a near-majority (because, don’t kid yourself, he’ll be close), they’ll vote for someone else.

If Clinton took the nomination from Sanders using super-delegates, well, that would cause a lot of Sanders supporters to refuse to vote for her.

But if Republicans do this, there will very likely be riots and the Democratic nominee will almost certainly win the ensuing election. I wouldn’t be surprised if Trump ran a third-party campaign.

The Republican establishment response to this has been more than tone-deaf. Using Romney to attack Trump?NeoCons writing a letter claiming he’d be bad for foreign policy?  (Worse than them?)

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All they are proving is that they don’t get it. They’re saying that the shitty world they and the Democrats have created is acceptable to them, and telling people to vote for Trump.

This has been brewing for a long time. I’ve warned since I started blogging that the US had set up the conditions for a hard man of the right or left, or a man on horseback. People wouldn’t put up with a shit economy forever. And because the right is stronger in the US, it seems likely to be Trump instead of Bernie.

And if Trump does fail this time? Doesn’t much matter. He’s shown how to do it. Someone else will.

The US economy sucked before the financial crisis.

It fell off a cliff after that and never recovered for ordinary people. Bush’s economy was trash, yes, but a lot of people got to participate in the housing bubble until it crashed. The current property bubbles are elite ones in a few cities like New York and San Francisco. The stock market, which is one of the best bull markets in history, is not something most ordinary people had much skin in (no, your pension or 401K does not cut it).

People WILL NOT TOLERATE this.

Last time the US got FDR. This time… not likely to be so lucky.

(Note: Also, “Wall Street going nuclear on Trump.” Yeah, that’ll convince people not to vote for him. Because he opposed free trade? These people are so disconnected from street reality they might as well live on Neptune.)

 

 

How Much Property Is Ethical?

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On March 1, 2016

7 Comments

Mine. It’s mine. No one has the right to take anything from me. That’s theft.

It’s mine.

Property rights. What a mess.

In this age of oligarchy, the question of how much a few people, or corporations can own, or can control, is thrown into highlight again.

The novelist and priest Father Andrew Greeley used to write that the poor were not poor because the rich were rich. By the end of his career in the mid 2000’s, he was railing against greed as one of the seven deadly sins.

Property, taken widely to include money, is control. It confers the right to decide how both resources and people will be employed. It confers the right to choose a large chunk of social direction. For instance, under Jobs and Cook, Apple is a fiefdom; so long as the company stays solvent, it decides how a great deal of the activity of the best and brightest is spent. iPhones and Apple’s other innovations are great, but one can certainly imagine scenarios in which Apple employees’ time was better spent.

A more clear-cut case comes in the case of CitiBank, or any of the big banks and brokerages. These people have a LOT of money, and they control a huge chunk of the world’s resources and people–directly and indirectly. They do far more harm than good.

Property is the right to choose how resources, including people, are deployed.

Allowing private individuals and large groups to have large amounts of property is a decision to allow them to control large numbers of people and resources.

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It may be justified if they make the world a better place. It is hard to justify if they don’t. We may like what Jobs, or Cook, or Musk have done (or add your favorite tycoon, and yes, I know all of those are problematic), while admitting that most billionaires and large corporations are a pox on the world economy, restricting innovation and free enterprise; crushing wages and strangling growth until they get their share. Few will defend Monsanto or most pharmaceutical companies, most large banks or brokerages, more American health insurers, large agriculture, and so on.

Those who do defend them are generally either on the payroll or have been trained in the ethical discipline of economics, which is meant to justify concentrations of wealth and capital.

Justice Brandeis famously noted that America could have great concentrations of wealth, or democracy, but not both. Jefferson said he feared banks more than standing armies as an enemy of liberty, which is a radically strong statement if you think about it for two seconds.

It is worth understanding that our definition of property, which is historically close to maximal, is a historical, and pre-historical, outlier. In many hunter-gatherer bands, if you want something another person has, you admire it, and they hand it to you. The idea that one could own ideas, and disallow other people from using them is something which would have struck most of humanity, for most of history, as insane.

And it is not so long ago that land which was not being used could be taken by anyone who would use it productively, be damned whoever owned it on paper. You could not leave resources unused, this was considered anti-social; even evil.

Property is entirely a social construction, and for most of history, justifications for the concept of property came down to, “We got here first, so it is ours,” and, “It is to everyone’s benefit that we use it.”

Capitalism is the bestest system ever, and therefore, the inequality it mandates is acceptable. People who have more money deserve it because they work harder, and are superior people who make superior decisions. Other people wouldn’t work at all if they didn’t have to, they must be compelled by Marx’s whip of hunger, or they’d sit on their lazy asses. If they are poor, they must not work hard enough, possess poor character, are stupid, and don’t make good decisions. They haven’t followed the approved steps.

They do not DESERVE money.

The actual value of money is almost entirely a social artifact. A dollar’s value, what it can buy or what opportunities it makes available in the US, is not located in any individual or in small groups, but in society as a whole; in many cases, this value was created by decisions made and work done by individuals long dead. (For the full argument, read “It’s Not Your Money.”)

But at the end of the day, this is the bottom-line truth:

Property is what society says it is.

What you can own and how much you can have of it, and when it is taken away, is entirely a social decision.  It is the acquiescence of your neighbours, in the broadest sense, which allows you to keep what you have–especially when it grows to include far more than your dwelling, tools, clothes, and the land on which you actually work.

Libertarianism is an attempt to take a socially granted license to use resources which are primarily a result of society’s efforts, not yours, and say that it is an intrinsic, individual human right.

But you did not train the workers you employ. You did not raise them or bear them. You did not educate them. You did not build the roads you use. And so on. The value, the advantage, of living in an advanced society is having access to all the infrastructure and institutions you did not build.

Let us bring this back to ethics.

To create a good society, that work is all necessary. It’s necessary that we build institutions, that we have infrastructure, that we support scientists (all the key research and inventions which created the internet were publically funded, for example).

It is also necessary that the people who are making the decisions are making good decisions. Bankers were making bad decisions. When they lost their money, it should have stayed lost. They weren’t harmed, like GM, by a crisis caused by other people, they were wiped out by a crisis of their own creation.

For a society to run well, we must be able to say, “You are not using society’s resources and people well, therefore, we are going to take away your ability to command so much of society’s resources.”

The larger we expand the sphere of property, as with intellectual property and the right to patent genetic codes, the more we say, “Only person X can make decisions about what to do with these resources.” We had better be damn certain that that one person, or corporation, or whoever owns these resources, is at least making good decisions, and ideally making better decisions than would be made if those resources had stayed in the commons, available for use by many.

And when we give a very few individuals and corporations the right to control a plurality or majority of our resources, locking out virtually everyone else from real decision-making beyond the anemic level of “consumer” and the neutered level of “voter,” we had, again, best be sure that those few people are making better decisions, for everyone, than would be made if a larger number of people had control over those resources and were making the decisions.

In short, if oligarchs want to control what people do, they need to make a strong case that their stewardship creates better results than those arising from people making these decisions themselves.

This is a rather high bar, and the genius of capitalistic ideology is that it’s not usually understood this is the case which must be made. Instead we are told, “Everyone is free to sell their labor,” as if that is freedom. Freedom to make your own decisions means not needing to work for someone else, and having the resources available to do what you want.

Freedom is not possible if you spend your life working for others when you’d rather not, knowing that, if you don’t, you will lose your shelter, go hungry, be without health care, and probably eventually die from lack of resources.

Freedom is the ability to choose what you do from a range of meaningful choices. The choice to work for Oligarch A or Oligarch B is not a meaningful choice.

Maximal property definitions and maximal acceptance of property concentration, deprive most of the population of their freedom. It is that simple.

They also show a vast distrust of the people, suggesting that if people had resources they would use them badly. This argument has been made by every tyrant since the beginning of agriculture: “I know better, and I will not lead by choice, but by coercion.”

The choice to starve if you don’t work for an oligarch is not much of a choice.

A sane property definition allows people to own the resources they need to do their work and take care of themselves and any dependents. Larger concentrations of property, meant for big projects, are necessary, but they must not be allowed to balloon in oligarchical control of politics and economy.

And I will suggest to you that this is both a much nicer world to live in and a more vibrant one. A world in which we are not slaves, but have freedom, will burst with creativity and projects. A world where ideas can be used by anyone will be a world in flower.

If you want freedom, look hard at property. The larger the sphere of property, and the more it is concentrated, the narrower most people’s world will be.

 

The Kindergarten Ethics We Need

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On February 28, 2016

36 Comments

When I first started blogging, some 13 years ago, I blogged about sophisticated matters. Economic theory, military theory and practice. Lots and lots of charts.

As time went by, I noticed that these posts, even when they did well, were not what my readers needed. Most of my readers were not at the level of maturity and reasoning that allowed sophisticated policy posts to be useful to them.

Their problems were deeper; they were ethical and moral problems. My readers seemed unable to reason from first principles, they did not understand the relation of ethics to politics and politics to economics. The first principles they did have were axioms whose results, if too many people followed them, would create widespread suffering.

They had grown up crooked. Their adult lives had made them more crooked. They did not think, they engaged their prejudices.

There is no point in sophisticated analysis of how to be kind to large numbers, if people prefer something over kindness.

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As a result, I started descending the ladder of reasoning. I found that I had to explain that killing civilians was worse than killing soldiers, and that killing less people was preferable to killing more people. I had to explain the difference between ethics and morality. I had to explain why and how they had grown up twisted.

I found myself trying to teach, in effect, versions of the Golden Rule. That which is hateful to you, do not do to your neighbour, do unto others as you would have them do unto you. Be kind. Kindness is the best policy.

I came to understand that the sages, from Confucius to Buddha to Hillel to Jesus, taught these rules–these simple rules–because they met people where they were. This is the level of teaching people require. Most, I fear, are not capable of learning even this, not innately, but because they have been twisted by their upbringing.

If you want some econo-speak, variations of the Golden Rule produce strong positive externalities and when enough people in a society use the Golden Rule and unite to take away the ability of predators to do harm, that society prospers.

The Ancient Greek version is as follows.

When old men plant trees in whose shade they will never sit, a society is great.

All economic theories are ethical theories. They are theories about how one OUGHT to act. Under capitalism, one should react to profit and price signals, and seek to maximize personal “utility,” for example, while living in a manner which deprives one of the ability to meet ones own needs.

This is an ethical theory. It is not scientific, it is based on axioms which can’t be proved, and which are highly questionable (people aren’t rational, don’t maximize utility, and I’ve yet to encounter a useful definition of “utility” which isn’t circular).

It is about HOW people should live.

As such, economics is also a political theory. Capitalism requires a great deal of executive and legislative work to set up, starting with depriving most people of capital. You probably don’t believe me, because you were never taught history properly, but this is well understood by sociologists who study capitalism. Start by reading Karl Polanyi’s “The Great Transformation.” This process happened both at home, and in great waves of imperialism which disrupted and impoverished much of the world.

All political theories are ethical theories. People OUGHT to have rights and those rights are inalienable. Legitimacy comes from the people’s consent, or it comes from God. A person who gets there first owns what was there. We should be able to own more than we can use. We should obtain the goods required for our survival from the market (not true for most of history.) A man or corporation who files a patent or copyright should have exclusive use of that creation. Corporations should shield their owners from liability.

These are prescriptive statements. They are ethical propositions about how the world should run.

All politics and economics, boiled down, is either OUGHTS, technical details about how to get to those oughts, or moralizing about why these oughts and means are good, and why other systems’ oughts and means are bad.

What we have today in the West is a mishmash of systems, with neo-liberal capitalism and representative democracy as the foremost. Some areas have technocratic bureaucracy as their foremost value, like the EU and Singapore.

You can throw in words like “enlightenment values” and “humanism” as well.

It’s hard to disentangle all this. So many different ideologies have been created and so many of them still have strong influence on us.

So I’m going to simplify. Cut through the knot.

Greed, selfishness, and pride, combined with tribal identity.

You love your child, yes? You would let a hundred people die to save your child?

You are a monster.

Most other people would.

They are monsters.

You would kill for your group. They would kill for their group. Your group may be a religion, a nation, an ethnicity, a neighbourhood, or a wide variety of other associations or identities.

You are a monster.

You work to make sure your child has a “competitive advantage” over other children. Those parents work to make sure their child has a “competitive advantage over your child.”

You are monsters.

In every way, your needs and wants are more important than anyone else’s. Then your family’s. Then your friends.

This worked when humans lived in bands or even smaller tribal societies. This included almost everyone, and it allowed an easy apportionment of work. “Feed yourself and your family then everyone else.” (Though, in fact, the nuclear family wasn’t usually prioritized in hunter-gatherer bands.)

It sort of worked in agricultural societies, but only sort of. Which is why you have the above sages with their various golden rule variants.

It doesn’t work in the modern world. The interconnections are too dense. You affect too many other people. Societies have too much violent and coercive power.

The sheer volume of negative externalities created by a culture of “me first” and of meanness overwhelm the positive externalities, creating vast hell-zones. It doesn’t matter whether we’re talking about most of Sub-Saharan Africa, Bangladesh, most of India, all the Chinese who hate the new economy and loved their villages, the inner cities of America, or the exurban wastelands, or the hopeless neighbourhoods in London or Paris which occasionally riot.

They are all overwhelmed by this “me first, my family second, my friends next, my identity only after all that, and fuck everyone different.”

It is impossible to overstate the damage “me first” has done to the world. It includes all the damage that will be done by climate change, imperialism, and vast amounts more.

To be sure, the so-called altruists have done great harm. But when you liquidate entire chunks of the population, you aren’t an altruist in fact, only in rhetoric. Just as capitalism, properly understood, has not proved to be the best system for most people in the world.

I’m going to tell a slightly perverse story. When I was a child, I read a science fiction military story which was half fantasy. The protagonist has a vision in which he bombs a city from orbit, and sees that his child is in that city.

The protagonist is determined to avoid that war if possible, but he is not determined not to bomb his own child. He says, “Were I to decide whether or not to bomb a city based on whether my own child was there, I would be a monster indeed.”

So let us come down to our first axiom:

Your life is not worth more than anyone else’s. Your pain does not hurt worse than anyone else’s.

Some time back there was a book called All I Really Need to Know I Learned in Kindergarten.

This is kindergarten level ethics we are dealing with here. This is what is broken–the stuff you should have learned when you were five and had reinforced as you grew up.

  • Don’t hurt other people.
  • Share your toys.
  • Don’t take more than your share.

And if someone doesn’t live by those rules, what do you do? You give them a time out. During that time out, you don’t torture them, you don’t allow the other kids in time-out to beat them or rape them. Instead you try to help them so that after the time-out, they won’t do it again.

Perhaps everyone in the world should just sit down and for one day, heck, one hour, just not hurt anyone else. Just do nothing.

You can get rich, you can get famous, you can get what you want by being a mean and violent bastard. Let us not pretend otherwise. But the knock-on effects of doing that, for everyone else, are terrible. True democracy will happen when the population is ethical enough, and willing enough, to simply not allow this. “No, no, off to your time-out you go.”

This will be sneered at as Utopian. No doubt it is. But this is the Pole Star, the guiding light you aim towards. The closer you sail to it, the closer you come to some semblance of a world worth living in for the majority of people.

If we do not aim for this, we may solve some temporary problems for a temporary period, but there will be no remotely stable good society.

Everyone’s life has equal value to yours. Everyone’s pain is equal to yours.

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