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

The Kindergarten Ethics We Need

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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Practical Theoretical Ethics


  1. Some Guy

    “It is wisely ordained by nature, that private connexions should commonly prevail over univeral views and considerations; otherwise our affections and actions would be dissopated and lost, for want of a proper limited object.

    Thus a small benefit done to ourselves, or our near friends, excites more lively sentiments of love and approbation than a great benefit done to a distant commonwealth: But still we know here, as in all the senses, to correct these inequalities by reflection, and retain a general standard of vice and virtue, founded chiefly on a general usefulness”

    David Hume

  2. But then [he pointed out nitpickily], the (Brad) deLongian argument about shipping working class jobs overseas doing some good for a lot of people becomes a little more valid, doesn’t it?

  3. Ian Welsh

    Sure. But there were other ways to do the same thing that didn’t require sacrificing the American working and lower middle class.

    Here’s the FACT, which I know many people have a hard time understanding, but the 3rd world grew faster under the old regime (which allowed tariffs) than it did under neoliberalism. Read “Bad Samaritans” for the full exposition.

    The choice wasn’t between two shitty alternatives, the choice was between a good alternative and a bad alternative. A large number of 1st worlders did not have to suffer so the 3rd world could do better

    As for Brad deLong, well, he’s a nice guy, but he has terrible judgment in economics, getting to the right place only after running thru all the wrong places, to paraphrase Churchill’s saying about Americans.

    And here’s another fact, Chinese who moved to the cities are less happy than those who stayed in the villages.

    We did them what favor?

  4. Steeleweed

    We are born alone.
    We die alone.
    In between, the most valuable thing we will ever have is each other.
    Isn’t it ironic that the most important question was posed by a murderer:
    “Am I my brother’s keeper?”
    The late Richie Havens sang:
    “We are all alone
    Each one his own.
    We are all alone…together”

  5. The Tragically Flip

    In my experience, there’s even a more fundamental problem with most people’s ability to think rationally & coherently. The frequency on which one encounters just terrible and obvious fallacy ridden arguments (particularly on the right I must say) speaks to this.

    This is not usually some kind of clever sophistry where you have to think carefully to spot the trick, but just banal reasoning errors that should have been too embarrassing to the writer to have written them if they knew they were deliberately making dishonest arguments.

    I know there’s a good deal of psychology on motivated reasoning and so forth that can account for how people can make and believe transparently flawed arguments, but still, it’s discouraging to see it so rampant in every quarter.

    Since people like examples, here’s a regular: A huge percentage of people seem to think that if they can find some way in which someone they don’t like is a hypocrite, they have therefore neutralized some argument that person was making. Following this implied reasoning (it’s never stated explicitly because if it was the flaw becomes too apparent) – that would mean if Charles Manson says “Murder is wrong” this means murder is ok because he’s a hypocrite for saying it.

  6. Patricia

    Yes, thanks.

    In our era particularly, one is always complicit, no matter how methodically one acts in the belief of a golden rule over a lifetime. This makes it difficult to find a place to rest and one ends up weeping a great deal.

    “No justice, no peace” means very little if any peace even though an occasional modicum of peace is necessary for life.

    This reality is too hard for many.

  7. Dan H

    Excellent piece.

  8. Some Guy

    Mandos indirectly raises a good point, which is that Ian’s ‘we are the world’ rhetoric is frequently deployed as a tool of the globalist set and stands at odds with the nation state as one of the only effective defenders of the 99%.

    The question is what we owe to people we don’t consider part of our tribe. Do we have a duty to make their lives better (the ethics of duty and community), or simply a duty not to make their lives worse (the ethics of trade).

  9. Bruce Wilder

    I appreciate what Ian started out saying about many people not being ready for sophisticated analysis, not having basic reasoning templates, like proportionality, at hand.

    Utopian thinking is prone to two kinds of simplification (of which Ian would not be guilty) that kind of ruin it:
    1.) idealism cast as an extremity of purity;
    2.) automation of social mechanism, aka god

    The first — idealism as extreme purity — employs a powerful primitive of human moral sense, a moral instinct more basic than reflective reason. Purity and taboo are, no doubt, in our genes; they are in our philosophies and religions, too, but as metaphors that draw on that primitive power.

    Idealism as extreme purity also draws on one of our primitive instincts for analytic reason itself: the dichotomy. A and Not-A. Good and Evil. White and Black. “There are two kinds of people in the world . . . ”

    My point is that idealism as extreme purity draws upon powerful, primitive modes of understanding: things are pure or they are not, good or not.

    We can easily make the Perfect the Enemy of the Good, and form very unrealistic ideas of what we are trying to achieve, if we start to imagine that we can and should eat without shitting.

    The second I’ve called, automation or god — it is one of the most basic allergies to politics as ethics. Ethics are rules governing what we do. In a world of uncertainty, morality is hard: you can not know what the future consequences of what you do in a particular instance will be. The full ramifications into the future cannot be known. So, you can not act out of simple intent and an evaluation of actual and particular consequences. You must follow rules, which means formulating rules from (limited) experience and understanding.

    When the ancient Greeks began to elevate their own moral understanding, they gradually moved from thinking that people were the victims of fickle gods to understanding that people are the main causal agent in their lives, in their own fate. We call this insight, the Birth of Tragedy, and it is exemplified in the story of Oedipus, who impulsively killed his father and married his own mother, without knowing it, and could not bear to look upon his own moral culpability when he saw what he had done.

    Politically, the same tension shows up in the fear people have of a powerful, governing state and the necessity of finding the political will to manage that state. People want an automatic system, that will not require attention or a wilful manager, who may be corrupted and will make errors.

    Better to have a weak state, unable to do much than to have a great state capable of great wrongs. Better to have, say, a gold standard than to embrace the possibility of managing a currency.

  10. Tony Wikrent

    First, let me confess up front that I have not read Polanyi’s Great Transformation. (Fortunately, I was just looking at how to procure a copy, and the book is available in its entirety online,

    Ian, once again, I salute your wonderful ability to distill the essence of crucial philosophical issues. But for now, I cannot agree when you write, “It requires a great deal of executive and legislative work to set up capitalism, starting with depriving most people of capital.” My reading of what Alexander Hamilton accomplished is exactly the opposite: he managed to redirect and even create capital to allow the USA economy to begin industrializing. For example, having the new national government assume the debts of the states, then creating the market conditions in which the agglomerated debt could serve the function of capital.

    Which, of course, brings up the question: What do you mean by capital? Is it just the paper instruments (or, today, electronic records) of stocks, bonds, debentures, and so on?

    Or does capital included the means of production: the physical plant and equipment, the machinery, by which humanity changes and transforms raw materials in usable and/or marketable goods and services? If this latter, then the initial stage of capitalism in USA at least required a wide spread distribution of capital: as Henry Carey phrased it in the 1850s: having the loom and the anvil present at the side of the plow in every region and town of America. If so, then the concentration of capital in fewer and fewer hands most definitely, in my view, does not begin until after Morgan establishes itself in USA, leading to the trust building of the 1880s onwards.

    Or does capital mean the ability of the human mind to create the science and technology on which new machinery and equipment is based? If this is the case, then certainly there is still capital being created today, such as nano-technology and microelectronics. Or, to update Carey, we are now trying to get a high powered personal computer in the hands of every student and worker.

    And another question, therefore: when does capitalism begin? As a word, “capitalism” does not come into general use until the middle of the nineteenth century. Marx’s use of the word marks the first real meaningful application of the word, as a word. Which then begs the question: does this mean that capitalism did not really exist in 1787? And if capitalism did not exist at that point, then how does anyone claim that the USA was created as a “free market capitalist country” as conservatives and libertarians like to claim; or as an “exploitative capitalist system: as many leftists like to claim?

    Michael Hudson has pointed out that there were three distinct economic philosophies which developed in the West in the nineteenth century: the British system of Smith, Ricardo, and Malthus; the system or systems based on Karl Marx; and what used to be called the American School (of political economy), of which Henry Carey was the best known proponent. Hudson has written a handful of articles explaining how the economics profession has been purged of the American School because of its innate hostility to usury and rent. Largely under, of course, the patronage and promotion of usurers and rentiers.

    Given the discussion in this thread, it is striking how often in American School writings appear concepts similar to the Golden Rule, and an embrace of and empathy for the entire world. Some of Carey’s works, in particular, explicitly argued that the American School was the only humane and just alternative to the British system.

    Let me end by noting that the historical record regarding the American School is easily muddled because of slavery. But as Hudson explains in a few places, the American School / Hamiltonian impulse was hostile, often openly, to the agrarian slave system of the South. Indeed, one of Carey’s major books is The Slave Trade, Domestic and Foreign, 1853. Note the subtitle: “Why it exists, and how it may be extinguished.”

    Well, two more things: if Polanyi’s argument is indeed that capitalism required depriving most people of capital, it is ironic that he finished The Great Transformation during a two-year grant from the Rockefeller Foundation.

    And in case anybody is as confused as I did at first: Karl Polanyi was NOT a founding member of the Mont Pelerin Society. the major promoter of neo-liberalism after World War Two. It was his brother, Michael Polanyi. Another great irony.

  11. EmilianoZ

    If you follow this “be kind” mantra, you’ll soon find yourself at the bottom of the pile. As they say, nice guys finish last.

  12. Ian Welsh

    I find no irony in it, Tony. That’s who had the money, since it had been agglomerated.

    As for capital, I mean the means of production, which can include money at times. There is no question that in successive waves in England, where Capitalism was foremost, land and the means of production moved to fewer and fewer hands.

    The letting out system was nice, but it largely ended with industrialization. And even with letting out, capital was concentrated — the letters may have owned their looms, but the wool was brought to them. It was not /their/ wool.

    In America, because there is plenty of land (having been stolen from the natives, in effect) you do not see the great clearances until much later (post WWII, mostly, though there are some before that). But that is a consequence of successful Imperialism. You can sidestep a lot of rules if you’re stealing from other people.

    You, I have noticed, concentrate almost entirely on the American experience. Nothing wrong with that, but industrial capitalism did not start in America and the American experience, because it had those vast lands to expand into, is very different from most others. Even though England had its Empire, the Empire was over there. It had benefits, it helped, but it was not the same experience as America’s.

    In all cases an industrial proletariat had to be created. Again, because of vast waves of immigration, the US case here is not the same as the old world’s. Those people had already lost their land, though not necessarily their trade.

    You can see this in a particularly pure form, and more recently, in the USSR, where people were en-masse forced off the land and into cities and factories, at horrific cost to life and well-being.

    For that matter, the Chinese army has frequently been used force Chinese peasants off the land. They do not go willingly.

  13. Ian Welsh

    Nice and kind aren’t the same thing. FDR did more good than almost any other American president. He was kind, in general, but he was not nice.

    And he finished first.

  14. Patricia

    Niceness is a type of courtesy–if social lubrication is the extent of kindness, it means nearly nothing.

    Kindness doesn’t require naivete. The best of it is wise.

    Apparently ethics needs to be taught, and as thoroughly as we teach reading. Religion used to do it (for good and ill). We did not pick up the ball when religion faded from curricula.

  15. Tony Wikrent

    My knowledge of the world is quite lopsided toward the USA experience. I am conscious of it, and a bot trouble by it as well. Though I’m certain I’ve read more of world history than your average Joe, my ignorance of Asia, Africa, and South America is, I admit, abysmal. And every time I read about the Italian city states, I have to figure out anew who the Guelphs and the Ghibellines were. And I’m still confused about whether Oliver Cromwell was a good guy or bad guy.

  16. Indeed, yes, all economic and political theories are ethical theories. This is something I think about all the time, being old enough to remember when “good” had a shared definition, no matter how far short of it we fell, and it applied in every cranny.

    That changed with Reagan and his merry band of pirates: not only plutocrats, but pastors who worshipped the dollar no less. Now evil has been masquerading as good for decades. Children have been born, grown up and produced children under this greed-is-good regime.

    We Americans aren’t alone in it, of course; Thatcher did the same in England (I was there) and now Brussels spreads her signature brutalities through Europe and the world’s banksters and the U.S. military make sure no other spot’s left out.

    It seems to me that a public hunger for goodness began intensifying madly in the past few years, as the reality of the surrounding horror show became less possible to ignore. Books like “The Shock Doctrine” caught on in a huge way that wouldn’t have been possible sooner — and now, at last, truth-tellers like Pope Francis, Bernie Sanders and Elizabeth Warren have muscled onto the biggest stage there is.

    After these long, agonizing long years of deliberate deception, more and more people are waking up to what’s real and right, although plenty of confusion remains (as seen in any Republican presidential candidate and his supporters). We still need to go farther, surely MUCH farther than even our truth-tellers are going yet.

    When will somebody say that $15 an hour is an insult as long as others will add a fortune to their fortunes in that same hour? When will somebody say that the good things of the earth belong to us all? When will somebody say, “No fortunes until everybody has enough!”

  17. Ivory Bill Woodpecker

    “When will somebody say, “No fortunes until everybody has enough!”?

    When the majority of USAmericans realize that no matter how diligently and cleverly they work, they stand a better chance of becoming rich by winning the Publisher’s Clearing House Sweepstakes than by honest and clever work.

    When enough of us peasants think of ourselves as peasants–rather than as future millionaires, temporarily punked by that naughty minx, Dame Fortune.

    Who really wants to be equal, unless s/he has lost all hope of ever being superior?

    The System survives by spinning myths to keep that false hope alive, letting it come true just often enough to maintain the credibility of the myth (for example, po’ boy Clinton’s rise to the White House).

  18. Ivory Bill Woodpecker

    Not everything in the Bible is good. There are those obscene passages in Deuteronomy and Joshua in which God allegedly told the Israelites to slaughter Cannanites, even the children, and steal their land, to name just one example of ethical failure.

    I say “allegedly” because I don’t believe for one second that He actually ordered the violation of His own Commandments against murder and theft. While I believe that He inspired the Bible, it is plain to me that He did not edit it.

  19. Ivory Bill Woodpecker

    Sometimes I wish the Deity were less attached to the Prime Directive.

  20. tony

    Conquest is neither murder or theft. The god of Abraham is a war god, in the Old Testament he is often referred to as the Lord of Hosts. Jesus did not come to bring peace either. For Peter Turchin war serves as the uniting mechanism for a society. In the Bible, war is a punishment for sin. For the mystics I read, war serves the great evolutionary principle of life.

  21. Michael

    I think I love you Ian…

  22. Ian Welsh

    Depends on which mystics you read. Most of the ones I read consider war a crime in most cases.

  23. Indeed. This is why populism wins votes but does not solve problems.

    The way we discover ourselves to be is the result of instincts set both by our genetic and our nurtured inheritances. It is not our fault. But if we can lift these instincts out of the subconscious into the conscious then we may be able to act upon them and re-programme ourselves. Thus free will is the ability to prefer our principles to our instincts. As you say, most will not be able to manage this, and many are traumatised beyond repair, thereby setting the vicious circle in motion. Whereas the strong man stops the buck rather than passing it on to an innocent third party.

    The mistake most politicians and commentators make is to condemn the feelings and concerns of extremists along with their advocacy. In a democracy everyone is entitled to express an opinion no matter how extreme unless it incites others to violence and lawlessness, and to condemn someone for their genuine concerns is just as extreme as their opinion was the first place. The role of the moderate, centre politician is to respect those feelings, but then advocate policies which address the underlying causes without polarising society still further.

    I have probably given this link before, but if anyone missed it they may like

  24. Ivory Bill Woodpecker

    Those passages of the Bible to which Tony refers did not truly come from God, or else were misunderstood. Again, He did not edit it.

    For example, Jesus meant that He foresaw that His teachings would cause division. He did not like that prospect, but He recognized that it would happen.

    Conquest is murder and theft, on a grand scale. Anyone who thinks God would authorize that does not truly know Him, and that includes the Scripture writers who thought that.

    The Bible is precious, but it is neither factually nor ethically infallible, and must be read by the “inner light” of conscience, guided by the Holy Spirit.

  25. nihil obstet

    @ Tony Wikrent — ” the historical record regarding the American School is easily muddled because of slavery”. If slavery muddles a history or theory of American economics, it’s a very bad history/theory, because slavery was basic to the development of the American economy. “Depriving most people of capital” is how you get a labor force; when capital (here, the stolen land) is available to everyone, you have to legislate ways to keep people laboring for capitalists. In the so-called “New World” that was accomplished by slavery, with all the legislative and executive activity necessary. (We might note that when Russia faced a similar situation of land as the source of wealth and a sparse population, they doubled down on serfdom.) Without slavery, all the U.S. has to export is lumber and furs. In the early 19th c., the single greatest financial asset is slaves. Their value was the basis of trade and banking as well as agriculture. I don’t follow how one can argue that the growth of American capitalism didn’t depend on depriving people of capital when it depended on enslaving people who were by definition deprived of all possessions.

  26. shh

    Well, all this talk of gawd certainly does circle back to the point about politics etc. being about ethics rather neatly. It all begins with assumptions, whether genetic or affected and the lousy logic most people build to rationalize their dearly held emotional hubris is a distinct issue. Actually, most people don’t bother to make their own rationalizations, they just emote their way through existence, taking their beliefs at face value like an ill fitting off-the-rack suit, and hope they escape with their skin intact. A rather futile hope at that.

    But what I wanted to point out is that to act morally or ethically means that you cannot act at all given that there is no way to determine the totality of consequence from any action. It is wholly rational to order the scope of ones intent through ever widening circles, starting with me first.

    Ian, what I’m curious to know are your thoughts on the idea of agency. While I agree with most of your post, the idea that we as individuals can somehow influence the aggregate behaviors mystifies me. What agency drives the long arc of societal behaviors?

  27. tony

    I did say war is the result of sin. War being a terrible thing doesn’t actually change the argument,in fact it is necessary for it.

    The view of most scholars, as far as I can tell, is that Yahweh was the Israeli Divine Warrior archetype that eventually absorbed the traits of other gods. You have your truth, but I would find that a selective reading.

  28. Tony Wikrent

    to nihil obstet: ” If slavery muddles a history or theory of American economics, it’s a very bad history/theory, because slavery was basic to the development of the American economy.” Slavery was not basic to the development of industry in the North, most especially the development of metal working machine tools, the impetus for which comes entirely after the War of 1812 from the War Department’s requirement for firearms with interchangeable parts. And, again, there are two different versions of political economy contesting for dominance in the USA during the 1800s: the American School, which basically reflects Hamilton’s program for industrialization, and the British school, which basically reflects Jefferson’s veneration of the agrarian yeomanry. I think it is no coincidence that though the first commercial railroad is built in the south, it is the north where a complete railroad network is built.

    The patterns left by the two different versions of political economy are very clear by the time of the Civil War: just compare of the industrial capacity of the Union with that of the Confederacy. In The South Vs. The South: How Anti-Confederate Southerners Shaped the Course of the Civil War William W. Freehling summarizes the capacity of the border states, in comparison to the seceded states. Mind you, this is ONLY three border states he is writing about; the rest of the south is much less industrial>

    “While the Border South contained an impressive 37 percent of Slave South whites, it harbored a more impressive 50 percent of southern urbanization and industrialization. In 1860, the three largest Border South cities, Baltimore, St. Louis, and Louisville, contained more inhabitants than the fourteen largest Confederate cities. By gaining the border, the rebel nation would have doubled its factory capacity and bridged its most crippling industrial gap: the capacity to make and repair ships and railroads. Baltimore makes the point all by itself, for railroads had created this city’s wild growth almost all by themselves. Flour processing and shipbuilding had helped fuel the city’s 1840-60 boom. The Baltimore and Ohio Railroad, however, had primarily elevated Baltimore into the heady status of America’s third largest metropolis in 1860, behind only greater New York (including Brooklyn) and Philadelphia. (Baltimore was 25 percent larger than New Orleans, the Confederacy’s biggest city.) Other Atlantic Coast urban centers – New York, Boston, Philadelphia-skimmed more profits from railroad trade and from railroad financing. But Baltimore developed more extensive factories to fashion railroad tracks; trestles, bridges, cars, and locomotives. Baltimore needed more such infrastructure than its Atlantic Coast rivals, for the city had to conquer more miles and tougher geographic obstacles, particularly the western Virginia mountains, to create its railway to the West.

    “Baltimore’s railroad industries especially thrived in the Baltimore and Ohio Railroad shops around Mount Clare. In this sooty city within a city, the South’s densest center of employment, the Baltimore and Ohio Railroad manufactured parts for stations, tracks, and bridges hundreds of miles west. Baltimore’s specialized shops fashioned car wheels, car axles, car bodies, spark catchers, trestles, tracks, especially locomotives. The Baltimore and Ohio also became the prime customer for shops that turned out advanced factory tools. Denmead and Murray and Hazelhurst, for example, supplied castings for Abbott’s rolling mill, which supplied plates for the Monumental Locomotive Works, which used engines crafted by Bartlett-Hayward. Between 1848 and 1852, interlocking Baltimore and Ohio shops built not only 200 locomotives but also sixty bridges to span western Virginia rivers and mountains. Other Baltimore shops fashioned steamships, railroad stations, and engine houses.

    “The Confederacy desperately needed this beehive of tools and skills for crafting iron behemoths. Alone in the South, Baltimore had the capital, expertise, and tooling to remake the southern rails as fast as they wore out (or were blown up). So too, alone in the South, Baltimore had the resources to create ironclad vessels up to Yankee standards. Instead, this pivotal slave-holding city boosted the Union’s towering advantage.

    “The city became the Civil War hospital for Yankee railroads. Outside the Mount Clare shops, millions of pounds of iron railroad debris were piled as high as the factories, ready to be melted into iron sheets again, then refashioned to remake the latest exploded railroad bridge or ripped-up railroad track or expired locomotive. The Baltimore and Ohio bridge at Harpers Ferry, for example, five times demolished by guerrilla warriors, was five times operative again within a few weeks. Because of Baltimore’s shops, the Baltimore and Ohio constantly functioned as the main east-west supply line for Union armies.

    “In contrast, under the crushing Civil War tasks of moving gigantic quantities of food, troops, and military equipment. Confederate railroads succumbed faster than Confederate troops. By midwar, an aide to the Confederacy’s western commander lamented that “locomotives had not been repaired for six months, and many of them lay disabled.” The colonel knew “not one place in the South where a driving-wheel can be made, and not one where a whole locomotive can be constructed.” (Freehling, pp 61-62)”

    Second, if capital had to be concentrated to create capitalism, then what in the world was going on before the trusts were built? In his 1904 book, The Truth About the Trusts, financial reporter John Moody (yes, founder of Moody’s securities rating agency) included a graphic for most major industries, listing the smaller, local companies that had been bought up to create the various trusts in steel, sugar, farm equipment, smelting, flour milling, and so on. The book is at

    What is striking is that every major US city and many large towns had a highly diversified industrial economy, that looked. to me at least, pretty much self-sufficient for all but a few things. The industrial capacity to do almost anything existed in every single city, which to me is evidence of wide spread distribution of capital, at least capital in terms of machinery and human talent.

    “Without slavery, all the U.S. has to export is lumber and furs” simply is not true. Total exports in 182o were $52 million, of which $3 million was classified as “finished manufactures” and $10 million in “manufactured foodstuffs” (basically, butchered meat). In 1850, of $135 million in exports, $17 million is finished manufactures and $20 million in manufactured foodstuffs. In 1880, $824 million in exports, of which $93 million is finished manufactures and $193 million in manufactured foodstuffs. Those are the numbers in Series U 61-72 “Value of Merchandise Exports and Imports,” Historical Statistics of the United States, Colonial Times to 1957.

    My view is that it is a misleading simplification to talk about a monolithic “America capitalism” because doing so obscures the never ending struggle between what Veblen called the producer class and the leisure class, as well as between north and south. I would characterize the USA economy today not as capitalism, but as some bastardized variant, “financial capitalism” or “rentier capitalism” perhaps more accurately. But is it even capitalism? What kind of capitalism is it that concentrates financial capital, while dismantling the capital of its industrial base and relocating it in other countries?

    And these questions are not mere academic quibbles. They are loaded with weighty implications for whether or not you are going to look for, and identify, specific individuals and institutions as being responsible for perpetuating great wrongs. If there is a monolithic American capitalism which depended entirely on slavery and exploitation for its development over the past two and a half centuries, and its structure and nature was cemented in place by the Constitution, then what exactly is it that the Mont Pelerin Society or the Koch brothers have been hell bent to change these past few decades? Or are their activities and lawsuits and think tanks all just so much smoke and mirrors?

  29. nihil obstet

    @ Tony, I didn’t mean to imply that I think slaves were factory workers or machine tool manufacturers. The point is the value of the slaves as a basis of trade and finance, and particularly in the early days, as a source of foreign currency. Especially in the late years of the colonies and early years of the Republic, slaves constituted a major part of the wealth of the nation. Is there another country whose economic history or theory can be adequately described leaving out its largest asset class? What’s the point of that?

  30. Hugh

    Excellent. I can not emphasize enough the importance of realizing that both politics and economics are moral in nature. Modern economics treats the economy as an autonomous organism susceptible to scientific analysis, like a bacterium or a supernova. Hannah Arendt called such pseudo-scientific appeals scientificality.

    It would be tempting to call this false objectivity just a mistake, except that it so clearly benefits those who profess it and even more those whom they work for. The con at the heart of modern economics is that human agency, and in particular human responsibility is eliminated. Billionaires just are and represent particularly successful people. As such, their wealth is legitimate and any attempt to reduce it is theft and social engineering.

    When we drop the pretense of natural law and the identification of economics with disciplines like physice, we can return to the questions which really matter. We are not atomized individuals. We live in societies. Without those societies, most of us would not survive, and those who did would be reduced to the level of animals. So the first question is what kind of a society do you want? And in answering that question, you have to take into account that any restrictions you place on others they may turn around, if they are more numerous, and place upon you –in spades. So to restate this question, it comes down to what kind of society do you want and want others to want for you.

    We need to understand that each of us is actually two people: one social and one private. If your private beliefs conflict with the social norm, then the social norm prevails. But this does not mean, that you must give up your private beliefs. You can still have them and militate for their wider adoption. You just can’t inflict them on others. At the same time, our social norms should respect our private side and that each of us has a right to privacy. There will always be a tension between the social and the private, and the boundaries will likely change over time. But so what? Living is a dynamic process. We should be used to it.

    Once we understand that it is about what kind of a society we want to live in, other questions arise. How much is enough for each of us? How much is too much? At what point does someone’s amassing of what ultimately are our resources represent an unacceptable taking from the rest of us? When the moral and societal elements are given their rightful place in the discussion, it doesn’t take a lot to understand why modern economics and politics go to such lengths to excise any mention of them. Modern economics and politics are tools of the rich and elites whose purpose is to maintain their wealth and position at our expense. If morality is brought up, they have no defense. They lose. So they make sure it is never brought up. Problem solved.

  31. V. Arnold

    February 29, 2016

    I especially like your closing paragraph; it encapsulates the whole game.
    I would like to quote it elsewhere if I may.

  32. Hugh

    V. Arnold, feel free. It is yours to use as you wish.

  33. Tony Wikrent

    to nihil obstet: I certainly do not deny that slaves were the largest asset class in the USA economy in the first half of the 19th century. But does that fact help us at all in analyzing and understanding the development of transistors and semiconductors, and the economic boom that those inventions created? Or, apply it to another contemporary problem: does the fact that slaves were the largest asset class in the USA economy in the first half of the 19th century help us at all in analyzing and understanding the development of financial derivatives, the new forms of financial looting they allowed, and the financial and economic crashes which ensured in 2007-2008? Do we, for example, move closer to the truth by examining the family backgrounds of Wall Street executives for ties to slaveholders?

    Which is not to deny that at one important period in the development of the USA economy, slavery was the foundation of most wealth. But was it also the foundation of most wealth creation? Well, of course, you have to define wealth:

    “…what is wealth? Is it really hoards of cash, or stockpiles of precious metals? Consider: Why do we have computers now, when there were none 200 or 500 or more years ago? Certainly, 500 years ago, all the raw materials that go into making a computer were available. There was lots of silicon laying around, and there was a lot of petroleum, with which to make plastics, sitting in the ground. There was the same presence of germanium and silver, and copper, and whatever else is needed to make a computer, 500 years ago, as there is today. What is so different today that we can make computers now, but could not 500 years ago? The answer, of course, is knowledge – we first had to develop, acquire, and master, the various facets of science that allowed us to make use of those latent natural resources, then apply that science to actual physical processes of production, or what we call technology. So what wealth really is, is the human power of thinking: reason, investigation, hypothesizing, testing, figuring out why things are the way they are — and then figuring out how that new knowledge can be used to change the way things are.”

    Now, clearly, there can be two processes at work in an economy at the same time: one, the creation of wealth through the application of new knowledge a.k.a. science and technology; and two, the expropriation and accumulation of wealth through fraud and force–which Veblen called “barbarian prowess.” Two points, therefore. One: at some time, the creation of new wealth will change the nature of the economy. An economy once based on slavery, will no longer be based on slavery, but something else, for example. It might be called “wage slavery” or “primitive accumulation” or it might be called “innovation” or “mass consumption” or “consumer demand” or “aggregate demand.” Whatever, the nature of the economy will have changed. Once that happens, how useful is it to base your analysis on the former nature? Well, I suppose the answer depends to no small extent on who your elites are, and if they still have ties to the former economy. Or–and here is where I find the question of slavery useful for analysis today–in what ways have the beliefs and practices of the elites been informed and shaped by the previous economy, and what effect do those beliefs and practices have on the process of the new, emerging economy?

    Point two: it seems to me that the responsibility of political and economic elites and leaders, therefore, is to create and shape a system and environment of laws and regulations which encourages the creation of wealth through the application of science and technology, and discourages the expropriation and mere manipulation of wealth. I am currently listening to the audiobook 13 Bankers by Johnson and Kwak, and they describe the precise laws which were passed, and the precise individuals (such as Eugene Fama, Alan Greenspan and Robert Rubin), who created and promoted the Efficient Market fantasy, and unleashed the animal spirits of Wall Street. Through it all, I keep thinking: if someone had simply posed Alexander Hamilton’s one sentence test for the financial system: “Is private credit the friend and patron of industry?” (Federalist Number 15), all this crap would have been averted.

  34. nihil obstet

    @ Tony, I don’t mean to carry on. I admit I am not comfortable with the erasure of injustices from the history of how the country got rich, as though you have a moral issue that has nothing to do with economics, especially in a discussion of “ethics we need.” I do react to the notion that slavery “muddles” American economic philosophy and history rather than being a part of it. I’d suggest more thought on the concepts of what is and isn’t included in the classifications we use to understand our philosophy.

  35. Lisa

    ” 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.”

    Nailed it.

    Relating this and your other post, “how do I want to be treated, ok I will treat others like that” is one of the simplest algorithms around (as is ‘tit for tat’).

    But far too many (and all of neo-liberal economic thought) bases itself around:
    “Reward ME when I do well”. ‘I’m a good person and just need pats on the back and I will do the right things, if I do anything wrong it is an honest mistake’.

    “Punish THEM when they do wrong”. ‘They are lazy and evil, they have to be kicked all the time to do anything right, left up to themseves they will ALWAYS do the wrong thing and it is deliberate’.

    ‘THEM’ is defined in many ways, Abrahamic religions have ‘THEM’ as women (and gays). Catholics add Jews’ as THEM. US whites add blacks as ‘THEM. For neo-liberals THEM are anybody not rich.
    And so sadly on.

    The end result is always that THEM are systemically treated badly. Over and above the concept of innate ‘worthiness’ (or ‘goodness” or ‘sinfullness’) that I have brought up before, it is the way that THEM are supposed to be treated because they are supposedly innately different in their reactions.

    This is so ingrained in people’s heads that they very seldom can see it.

    The classic is when someone attacks a ‘THEM’ and that person then attacks them back the exact same way…oh my the howls of ‘unfairness’ and ‘bullying’ you get. Yet they have done the same thing…first.
    In their minds the THEM has to be treated with punishment because that is all they can respond to.
    In their minds they are ‘good people’ who need to be treated with pats on the back, not punishment.

    The classic and so well documented case of this was the whole ‘Gamergate’ issue, even more tragic because most of the perpatrators were actualy moderately intelligent..

    How do you break this? Well I have mentioned (and hope some have checked it out) the Australian Safe Schools initiative, getting to kids in primary school and teaching them some basic empathy. Though my mentions have been on its LGBTI initiatives they cover a whole range of anti-bullying measures by gender, race and religion.

    They have hit on one of the few things than can significantly change this ‘THEM’ attitude and though my personal leaning is towards leaving bullies bleeding on the ground (I was bullied for awhile), social exclusion actually works better.

    If you can teach empathy,
    *****more accurately teach them not to suppress natural empathy, ****
    then you will get major behavioural changes. Those who still try to attack ‘THEM’ get socially excluded and it is not long before the majority of bullies conform.

    It is simple, it is humane, it makes for better people (we cannot have too much empathy in this world) and it works.

    It creates a series of positive feedbacks, especially if this carries into that minefield of puberty. The naturally physically aggressive (usually but not always) male, there are aways some, realises he gets points for being a Hero, he is strong but looks after the weak. He gets pats on the back, and more female attention. He is secure, his best friend is gay his sister is a lesbian.

    Women, often the greatest victim of the ‘THEM’ attitude, see they can change things by (a) their own strength and (b) by seeing that there are guys who are Heros (and right now there are so damn few of them).

    And every woman loves a Hero. Because of that positive feedback other guys want to be a Hero as well. If they cannot be a physical Hero they can be a moral Hero or an intellectual Hero.
    Then there are the Heroines, maybe the strongest of all.

    And it all starts with a bit of basic empathy. I feel pain because you are in pain and I will help you stop that pain.

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