By Seth Richardson
The specter of Karl Marx hovers over our land like the bony hand of death, and Bolsheviks creep among the hedgerows, waiting to drag us all kicking and screaming into Communism, or so Rush Limbaugh would have us believe. But is it true? And if it is, why would that be a bad thing?
That’s the subject of this debate. You are invited to participate by adding your thoughts and comments below.
Benjamin Tucker (1854 -1939), a noted American anarchist and writer and publisher of Liberty, an anarchist periodical, wrote the following in his 1886 essay “State Socialism and Anarchism: How far they agree, and wherein they differ.”
“First, then, State Socialism, which may be described as the doctrine that all the affairs of men should be managed by the government, regardless of individual choice.
Marx, its founder, concluded that the only way to abolish the class monopolies was to centralize and consolidate all industrial and commercial interests, all productive and distributive agencies, in one vast monopoly in the hands of the State. The government must become banker, manufacturer, farmer, carrier, and merchant, and in these capacities must suffer no competition. … The nation must be transformed into a vast bureaucracy, and every individual into a State official. … Individuals not being allowed to own capital, no one can employ another, or even himself. Every man will be a wage-receiver, and the State the only wage-payer. He who will not work for the State must starve, or, more likely, go to prison. All freedom of trade must disappear. … There would be no foundation of society upon a guaranteed equality of the largest possible liberty. Such liberty as might exist would exist by sufferance and could be taken away at any moment. Constitutional guarantees would be of no avail. There would be but one article in the constitution of a State Socialistic country: ‘The right of the majority is absolute.’”
This treatise on socialism and anarchy is one of the clearest and most succinct explications of the distinction between what we now call Communism (State Socialism) and classical Anarchism, many components of which make up modern Libertarianism.
One core principle of socialism is its belief that the only true value of goods is the value of the labor needed to produce them, as Adam Smith held in his famous treatise “The Wealth of Nations,” where he said, “Labour, therefore, is the real measure of the exchangeable value of all commodities. The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.”
Smith went on with his economic observations, but Marx and other socialists stopped at this, and claimed it as a guiding principle of socialism, of the way things ought to be, not, as Smith was observing, the way things actually are. The objection of socialism is not in the accumulation of capital, it is objection to who holds the capital and the means of producing it, and it is objection to the capitalist triumvirate of evil; interest, rent and profit, which Marxism holds to be usury on the part of the capitalist for the use of some commodity that has already been fully paid for by the labor of the proletariat.
The definition of socialism is a slippery one though, and it’s not amenable to singular definitions as each of the various branches and stages of socialism propose different models of the root concept of collectivism and government intervention in the markets. Nearly all versions of socialism however hold to the precept that civil justice cannot be realized without economic equality, and that it is the purpose of government to “level the playing field” in order to provide justice and equality for all.
The problem with all forms of socialism is that they seek to level the playing field by dragging everyone down to the lowest common denominator of economic equality through government force. Socialism is based on the faulty precept that in order for everyone to win in society, some must lose economically, and that therefore the individual competition of Smith’s “invisible hand” must be controlled and prohibited in order to provide justice for all, regardless of the cost to individual liberty and actual prosperity. Socialism holds that it is better that all suffer in egalitarian comradeship than that some obtain and enjoy a disproportionate share of common resources and capital.
Capitalism, on the other hand, holds to the precept that a rising tide lifts all ships, even the smallest and meanest dinghy, and that markets free of government regulation that serves the socialist cause of leveling the economic playing field will instead naturally lift the standard of living for all. The excesses of entrepreneurial capitalism provide opportunity and incentive for everyone to exercise the best in themselves in the hope of social advancement and economic prosperity, something socialism forbids per se. Further, capitalism recognizes that the right to private property and the added value in the process of accumulating and loaning capital for profit to others for the production of commodities and therefore the creation of wealth, ensures economic prosperity for all of society as well as securing individual liberty and happiness.
The divide between the two social forms appears to be an unbridgeable gulf based on core values that are mutually opposed: the socialistic principle that the needs of the many outweigh the needs of the few, and the capitalistic principle that preservation of individual liberty and encouragement of initiative best serves the needs of all.
So, what is it that President Obama promises us? Is the Democrat Left intent on establishing state socialism and making slaves of us all? Is the Constitution truly in peril? Or do the objectives of the Democrats only have the appearance of a shift towards socialism? If so, what is their true intent and purpose? Is the “social justice” movement thinly-disguised Marxism, or is it a well-meaning but misguided attempt at play-field leveling that will do more harm than good to our economy?
How far down the path of socialism can our society go before it finds itself inextricably on the slippery slope to communism, given that Marx describes socialism as an intermediate step between capitalism and communism wherein the “dictatorship of the proletariat” has not yet been perfected?
©2009 Altnews
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I suggest that a debate about the qualities of local leadership is quite likely to deteriorate into simple comparisons of personalities – not particularly elevating. However, a discussion of the relative local merits of representative democracy (our nominal local arrangement), direct democracy (I place TABOR in that category), and benevolent dictatorship would raise some interesting issues.
I moved here about five years ago from what many referred to as the “Peoples Democratic Republic of Montgomery County, Maryland,” a land of high taxes which nevertheless was fairly successful at delivering both bread and circuses in exchange for that money. I’m now in the land of low taxes, low cost of living, and a seemingly insatiable need to make government not only small, but totally ineffective. I suspect there is an approach somewhere between State (or County, or City) Socialism, and Anarchy that would allow local government to provide the services and regulation it should, without impinging unreasonably on the individual’s pursuit of success.
What would be the outlines of such an approach? Could we achieve it in Colorado Springs, given the provisions of the City’s Charter and the State Constitution? Are there achievable changes to those documents that would ease the transition? Is the end worth the effort in any case? Such a discussion would be more useful than ruminating on “visions” outside the constraints imposed by reality.
Gentlemen:
My mother grew up in DC, daughter of a cabinet apointee, and was on a first-name basis with Truman. The most important lesson she taught me was that all politicians are dishonest. “If you understand that,” she said, “you’ll never be disappointed, and you can be pleasantly surprised when you find one that appears to be honest.”
Yes, the problem is that governments are inherently corrupt, inefficient and wasteful. That’s why the smallest possible government is always the best government.
I don’t really think the Democrat party, or the Republican party is capable, as a party, of constructing complex conspiracies. But I do worry about bureaucrats and those with enormous power within government who are in positions to forwards sinister agendas, if not full-fledged conspiracies.
What’s happening in our schools is typical. It’s not a revolution with scruffy, unwashed and unshaven beret-wearing partisans waving AK-47′s around (although Che seems to be pretty popular with the uneducated proletariat who don’t know what sort of murderous monster he really was), it’s an insidious program of creeping socialism that saps the will and the strength of the country with the “death of a thousand cuts.”
The reason we don’t have leadership even in Colorado Springs is because people have become wary of leaders.
One of my readers, Dave, wanted to debate the subject of local leadership. He appears to be a historian of sorts and has quite a bit of knowledge about local politics and notable personalities. He was lamenting that we don’t have the General Palmers any more, and I think he’s right.
I offered to debate him, but being new to the area, I have no real knowledge of the local luminaries, so he declined the debate.
What I proposed to discuss was the philosophical side of leadership and why our country is turning more and more to “democratic” processes for the planning process of community decision making.
Coming from Boulder, where the Tyranny of the Majority is a very mature process, I was interested to delve into the psyche of Colorado springs in that regard. Perhaps Dave will joins us here. If not, perhaps we can discuss this a bit and perhaps I can extract something for its own post, so we can continue to delve into the problems associated with group “visioning” of community needs. Do we need another General Palmer? And if he appeared, would he be as respected and influential today? If not, why not?
Sorry Guffman, I should have said,
Government clearly made mistakes. They threw a ball which the financial institutions naively picked up.
What about that tiny cabal of corrupt government leadership who brought us to this point?
I think the whole bunch are screw ups. How about you?
Seth,
Maybe “canard” is too strong a word, but if I had a dollar for every time I’ve heard a Republican equate taxation with punishment, I might be able to afford to retire some day.
Re AIG retention bonuses: “The Constitution prohibits Congress from interfering with private contracts, and the current tempest in a teapot over a paltry 165 million dollars, in a climate where politicians bandy about the terms ‘billions’ and ‘trillions’ of dollars without so much as batting an eye, much less a single palpitation of the heart or flush of embarrassment, is asinine beyond belief.” Agreed. Retention bonuses should be a non-issue. They demagogue well, however (most recently from Republicans bleating, “What did the President know, and when did he know it?”). This is a Golden Parachute culture, in which CEOs routinely make 15,000 times (or whatever) as much as a line worker makes, in which 90-some percent of America’s wealth is controlled by less than 10 percent of the population, and as such the population is ripe for that kind of demagoguery. Again, this should be fertile ground for full-bore Socialist recruiting, but the energy isn’t there for it.
“…Or it would be asinine if it weren’t so darkly conspiratorial.” This LOOKS like a side issue. But bear with me….
There is a small but vocal minority of Leftists who sincerely believe that there is some combination of neoconservatives and evangelicals who are conspiring, through schemes like the Project for the New American Century and the invasion of Iraq, to establish a theocracy in the United States and bring on the Rapture through conflict in the Middle East. Had this wing of the Democratic Party gained power in 2004, Democrats all over the country would have been laughed out of office in 2006 (and rightly so), and Barack Obama would not be President. Now Rush Limbaugh seems to be leading “his” party down a similar path — Democratic agenda equals Socialist conspiracy. If the GOP puts the Limbaugh wing of the Party in control before the midterms, the GOP will get exactly what it deserves.
Conspiracy theories are fun as parlor games. Like the AIG bonuses they demagogue well. They are good fresh red meat for the masses who think “they” are out to get them. But they’re poison on a Party platform, because conspiracy theories make most Americans roll their eyes, and rightly so. Conspiracies are not the way the world works. One can always produce a simpler, more rational cause for any given situation than a conspiracy. And as to the Democrats = Socialists argument, I will attest that the Democratic Party is constitutionally incapable of a complex conspiracy. In general, the Left’s greatest talent lies in schisms, and the Democrats are no different. (At the Democratic National Convention last year, delegates repeatedly cited the famous Will Rogers quip about “an organized political party” to me with a sort of pride. “We’re not the lockstep party,” a delegate from Guam told me. It’s been this way since at least 1948, and it’s not likely to change any time soon.)
When Bush invaded Afghanistan in 2001, I realized that the only coherent voices of opposition on the Left were Garrison Keillor and Jon Stewart. That meant the Left was in deep trouble. When entertainers are your best spokesman, your movement is hollow. That’s where the Republican Party is today. The fact that Limbaugh is their most powerful voice shows the Party has nothing to offer.
“So, what should President Obama be focusing on right now? Public school reform and universal health care, or rebuilding our economy?” He has committed himself to doing it all. (“A President should be able to walk and chew gum at the same time.” I dearly love that quote.) We will do as much as we can in the time we have.
But all of this is a diversion from your real question:
“Is the Democrat Left intent on establishing state socialism and making slaves of us all?” No. Democratic leadership at present is smart and pragmatic. They are not going to bet a significant political advantage on a pie-in-the-sky possibility. (Such as a “dictatorship of the proletariat.” Or a “permanent Democratic majority.”)
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Skip,
Thanks for the history lesson.
I said, “…the concrete reality is that when the pursuit of happiness by a tiny cabal of technocrats (brought) the world to the point it’s at today (do you dispute that assertion?)…”
You said, “…The financial institutions clearly made big mistakes. They picked up the ball thrown by the government and ran way too far with it.”
I’ll take that as a “no.” Thanks.
Following are two quotes from Guffman:
As I understand it, the traders who engineered the global financial collapse broke no laws, so their actions should be exempt from government intervention, because it made them happy. Do I have that right?
Nice abstraction, but the concrete reality is that when the pursuit of happiness by a tiny cabal of technocrats brings the world to the point it’s at today (do you dispute that assertion?), government cannot just sit on its hands, if only for political reasons.
This makes a case starting from the middle of the financial collapse story. Let’s start from the beginning.
In the 1960s, when I bought my first house, you had to have a 20% down payment or you faced the dreaded mortgage insurance. This was about 20% of your mortgage payment which went to protect the lender rather than increasing your equity. We all saved our pennies to afford a house without the dreaded insurance payment. It was tough fighting that need for instant gratification.
Years later (the 1970s) our leaders realized many people could never own a house under these conditions. Never mind the fact they couldn’t afford a house under any conditions. No problem, home ownership was a measure of fairness, so they created the Community Reinvestment Act (CRA). It had nothing to do with community reinvestment and everything to do with getting unqualified owners into houses for fairness. It told lenders they had to make loans to people who were unqualified under prudent lending rules. The CRA had teeth because each lender had a CRA score which the government used in decisions to allow the lenders to expand their businesses. Low score, no expansion approval.
The lenders understood the loan risks, but the government removed their risk by requiring Fannie Mae and Freddie Mac to buy the risky loans. The government implicitly backed those loans.
It could have stopped at this point. The government would then have been clearly responsible for the disaster when it happened. However, about 50% of our mortgage loan industry is unregulated and outside of the Fannie, Freddie world. They realized they were loosing out and they moved to get into the game.
The development of these bad financial products is an interesting story. The companies realized this was risky business. There was a team of 10 to 12 mathematicians in one of the companies (I think it was Morgan Stanley) given the task of finding a way to spread the risk. Risk is normally managed by avoidance or spreading. The team developed their software by repeatedly testing it against the S&P rating software until they found a way to get a AAA rating (not a good idea). For this team it was a mathematical exercise, not a wealth making conspiracy. The team leader was interviewed recently (I think he lives in Canada now). He presently has nothing to do with the financial world and he didn’t make a bundle of money.
The leaders of these companies knew they had large risk and they needed to spread it. They did, clear around the world. With a AAA rating. This could have ended with those investors taking the beating. But we got into this “too big to fail” theory. That may or may not prove to be true. Only time will tell. But that is where we are going.
Perhaps the biggest failure was the investors who just believed what they were being told. Interestingly some knew better, but didn’t take any action to blow the whistle. They just avoided involvement. Bank of America was one. They weren’t into this until Merrill Lynch failed and the government arranged for BofA to buy Merrill. Now they have big problems with bad investments and bonuses. Of course they thought the government was backing their purchase of Merrill. Little did they know the government would turn on them and try to make them a poster child of the big, bad capitalist financial world.
The financial institutions clearly made big mistakes. They picked up the ball thrown by the government and ran way too far with it. Now they are paying for their actions, as they should. Whether they should by bailed out more or punished more is hard to say. In the meantime our leaders are just ducking and dodging as usual. I’m rooting for giving them a big slap down.
Interestingly the government is still using the CRA ratings of our lenders. Apparently they think fairness is still the good goal. Just a little less fairness, for awhile.
guffman,
Check this link to see that 37.8% of taxpayers have zero or negative tax liability.
http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=1973
Gentlemen:
Thank you for your cogent and erudite responses. They have been everything I had hoped for by way of reasoned and reasonable discourse.
As regards the bonuses paid to AIG employees, I have to agree with Glenn Beck. This is a nation of laws, and whatever else we may be facing in the future, we need to hold to our fundamental principles even when the stench fills our noses. These bonuses were valid contracts negotiated long before the government decided to bail AIG out. As Skip suggests regarding the current “acceptable compensation” level, if we can abrogate these contracts, there are no contracts that are then safe from Congress. That’s a cure worse than the disease by orders of magnitude. Giving our government authority to ex post facto punish individuals who got “too much money” is a dangerous leap down the slippery slope.
Had the government decided, as it should have, to allow AIG to fall into bankruptcy, the bonuses would have been in question and probably subject to a judge’s discretion. But the government decided to keep AIG solvent at the taxpayer’s expense, and this left the taxpayers holding the bag for valid enforceable contracts. The Constitution prohibits Congress from interfering with private contracts, and the current tempest in a teapot over a paltry 165 million dollars, in a climate where politicians bandy about the terms “billions” and “trillions” of dollars without so much as batting an eye, much less a single palpitation of the heart or flush of embarrassment, is asinine beyond belief. Or it would be asinine if it weren’t so darkly conspiratorial.
The AIG bonuses are the bread and circuses that the Emperor in Washington is sponsoring to the Plebeian masses to keep them occupied and involved in side issues and irrelevancies while behind the scenes, the government is printing amounts of cash that beggar the imagination, which is about to knock out whatever props are left under the US dollar, and which will inevitably and inescapably result in runaway inflation as soon as it hits the economy. Gold jumped something like $50 yesterday, and when gold makes such leaps, it means the dollar is in jeopardy.
If the government was really interested in righting wrongs, it would be shutting AIG down in an orderly fashion and paying off what debts it can, not propping up a company that is moribund through its own cupidity and stupidity.
Yes, it was the AIG Financial Products division that has damaged the world’s economy nearly beyond repair, but that’s no excuse. In this case, the sins of the unit must be visited upon the corporation.
AIG had a fiduciary duty to its customers to monitor ALL of its divisions and use prudence and best economic practices to protect it’s clients. It has not done so, and it is certainly civilly and very likely criminally liable, and it needs to disappear, as an object lesson to those who wrongly think that just because something isn’t “technically” illegal, they can do whatever they like, regardless of the actual consequences.
Fiduciary duty is about more than mere legality, it’s about paying honest and competent attention to the financial interests of your clients, and that includes not subjecting them to unnecessary risks without fully informing them. AIG’s Financial Services division failed to notify the holders of the Credit Default Swaps that they were improperly capitalized and that what started out as a non-catastrophic adjustment in the real estate market, something that happens with some regularity, would result in a default situation that AIG’s capital reserves could not cover.
If such actions are not criminal, they should be, but in any event, government should not be bailing out international banks that bought what turned out to be uninsured (or inadequately insured) real estate derivatives. Let the international banks take their losses for failing in THEIR fiduciary duty to their investors by way of due diligence.
In this I agree with Guffman when he says that a “tiny cabal of technocrats” have too much economic power. I think that this is where the government has authority and necessity to regulate. Not so much how they do business, so long as it’s ethical and not harmful to society, but more how much economic power any small group of businesses can be allowed to have. Diversification is necessary for a stable and strong economy, and government ought to be ensuring that cabals, cartels and monopolies cannot form in the first place, much less aggregate so much capital that they are “too big to fail.”
The economy is a strategic resource, and government needs to protect the economy in order to protect our nation. This provides all the legal justification needed for Congress to prohibit “cabals of technocrats” to the same degree it prohibits monopolies. Simply redefining the term “monopoly” to make “monopolistic practices” that, should they fail economically, would threaten the stability of the national economy, illegal would go a long way towards preventing any future cabalistic economic meltdowns. Government should also broadly define “insurance” as applied to financial products and subject any instrument that purports to protect against unanticipated losses to the rigid capitalization requirements of the insurance industry.
As for the course of the country, I weep for our nation. When our elected representatives are, like Robespierre, whipping up sentiments towards another Reign of Terror, suggesting that private citizens compensated according to a lawful contract ought to be committing suicide.
This is a nation of laws, and I for one will defend the rule of law as best I can. To that end, I call for impeachment of Senator Charles Grassley for unconscionable conduct unbecoming a United States Senator.
What sort of “fairness” can flow from such an atmosphere? How can our nation continue to hold its head up when our government is proposing unconstitutional bills of attainder to confiscate the lawful earning, ratified by the federal government as a part of the bailout payments?
Does it stink to high heaven? Yes, but our government must hold to the law and principle and stand by its own commitments, and when it chose to keep AIG solvent instead of forcing it into bankruptcy reorganization, which would have provided a lawful means to deal with such bonuses, it took the baby with the bathwater.
But let’s step aside from the bailouts and bonuses for a moment and look at the other parts of the Democrat agenda.
What does the Obama administration promise us by way of social entitlement programs, and how does it propose to fund such programs?
What I see is a hard(er) left turn towards an entitlement mentality and society, where people will expect government to provide prosperity and comfort without themselves actually having to produce any wealth. Massive public works programs do not create wealth, they drain it from the economy. Yes, they repair our infrastructure, but not through the creation of anything new, but rather through the redistribution of capital from those who do produce actual wealth to the government, which then spends it as “make work” projects that do little to disguise the welfare system that it is.
Our infrastructure does need repair, but the question no one wishes to ask is how and why our infrastructure has deteriorated to the point where such drastic emergency measures are required?
I maintain that it is the social entitlement atmosphere of our nation, beginning with the New Deal, that built the infrastructure but then diverted the maintenance and replacement funds that should have been saved up into social welfare and entitlement programs.
It is the very negligence of our representatives that has created this “opportunity” for Obama to create a newfangled “Civilian Conservation Corps” that is primarily intended to keep the proletariat working, so they don’t have time to sit and stew and foment revolution.
As for the “right wing canard” that “all taxation is punishment” that Guffman alludes to, I do not see any foundation for this assertion, either in political philosophy or factual truth.
Conservatives are not opposed to taxation, and the fact is that the top one percent of taxpayers in the US pay something like 49 percent of the total tax revenues received by the government. The problem is one of disproportionate taxation that has the intent only to redistribute wealth from one class to another, not to provide government services and benefits in reasonable proportion.
The founding principle of taxation in the US is that taxes are levied to provide services and infrastructure to the taxpayer in some reasonable proportion to the individual’s use of resources and services of government. Thus, it is reasonable to tax a business for improvements to the streets that serve his places of business, but it is unreasonable to require him to pay for a street clear across town in front of another new business development. Nexus is important. There must be some nexus to the impacts the business has upon society for the tax to be fair.
Taxing “the wealthy” in order to take their profits and give them to others by way of social welfare programs, out of proportion to what everyone pays for such social programs, is confiscatory and no better than outright theft. That is one of the major objections conservatives have to unfair increases in marginal tax rates on “the wealthy” that Obama is proposing.
The response of “the wealthy” is seen today in the reluctance of the major banks, who are now flush with cash, to lend that money to businesses. Those who have wealth do not wish to see it confiscated by Obama to fund social welfare programs, particularly not in this time of global economic crisis. Being wealthy, they can either literally or metaphorically stuff their cash into their mattresses and deny Obama the profits that he requires to meet the burden of his entitlement programs.
The calculus is quite simple: taxes are assessed on profits, not on principal, so if people don’t invest and make profits, there’s nothing to tax, and the “wealthy” can certainly afford to pull back and wait out One-Term Obama, because if he cannot resolve the financial crisis in his first term, he surely will not get a second.
That is the inevitable result of raising taxes on businesses to fund social welfare programs in any economy, and all the more so in an economy where businesses are already under great stress and simply cannot afford to fund Obama’s magnanimity.
So what does that leave the President? He can either manufacture money out of thin air, obligating our grandchildren’s grandchildren to a debt they cannot repay, or he can give up on his egalitarian “fairness” ideals and repair the economy first, and then see what can be done for the truly destitute. Everybody else will just have to buckle down, tighten their belts and get back to work rebuilding the economy.
So, what should President Obama be focusing on right now? Public school reform and universal health care, or rebuilding our economy?
Skip says: “There are good and bad ways to check things. Competition is a good check of Human Nature and Power.” Yes, it worked so well in the past few years to keep us from sliding into a worldwide economic crisis. “Government is a bad check, unless the activity is illegal (really illegal, not just something we don’t like)”: As I understand it, the traders who engineered the global financial collapse broke no laws, so their actions should be exempt from government intervention, because it made them happy. Do I have that right?
“When someone pursues happiness to the maximum extent of their ability, without ‘lie, cheat, and steal’, it is a good thing.” No argument there, but that is a huge qualifier. Did the traders who set up our lab experiment in pure, unregulated laissez-faire capitalism lie, cheat or steal? I honestly don’t know. If they didn’t — if they accomplished all this without lying, cheating or stealing — then apparently we have no grounds for complaint. Do I understand you correctly? “The problem we have is governments which assume the mandate to decide how much happiness an individual should pursue. That is absolutely not a task of government.” Nice abstraction, but the concrete reality is that when the pursuit of happiness by a tiny cabal of technocrats brings the world to the point it’s at today (do you dispute that assertion?), government cannot just sit on its hands, if only for political reasons.
“Unfortunately when we talk about ‘Power’ we are always talking about the negative use of power.” Power is rarely an issue until it is misused. “Most people could not give an example of a good use of ‘Power’.” That’s not an exercise most of us are called upon to perform, but most of us certainly could give examples. I’d start with the Berlin Airlift. We had the will and the means — the power — to assist the East Germans, and we acted accordingly. But good usage doesn’t change the basic facts about Power.
“President Obama has told us we are bad to pursue our happiness beyond the $250k per year level.” “Told us we are bad”? The absolute worst thing about the proposed 90 percent tax on some corporate bonuses is that it reinforces the right-wing canard that all taxation is punishment. Here I suspect we’re into the realm of the unbridgeable gulf between opposed values, so I’m happy to agree to disagree.
“A significant proportion of this country cares more about receiving $8 per week from the government than where we are between capitalism and socialism. Some say this number is approaching 40%.” “Some” say? Who, please?
Looks to me like we are all in violent agreement. A few different words perhaps.
So let me pick on a few things:
Seth says:
I agree that we are in uncharted waters here, but I disagree that “fairness” is or should be the guiding principle.
“Paternalism” may be it. Or perhaps “Nanny Statism.”
President Obama could not stand in front of the swooning California crowd and say “we need to screw you for Paternalism or Nanny Statism”. But he can stand there and say we need to screw you for Fairness. He does it and gets away with it. Fairness (whatever that is) should not be the guiding principle, but that is where we are.
Guffman said:
“Both capitalism and Socialism have inevitably been damaged by immutable forces, namely Human Nature and the nature of Power. Unchecked Human Nature will steal as much as it can, in pursuit of its own happiness (hi, Ayn); unchecked Power will seize as much Power as it can and will not give up Power willingly.”
The key word here is “unchecked”, and the key principle is how something is checked. There are good and bad ways to check things. Competition is a good check of Human Nature and Power. Government is a bad check, unless the activity is illegal (really illegal, not just something we don’t like).
Let’s look at the “immutable forces”.
The bad side of “Human Nature” can be defined by “lie, cheat, and steal” as understood in the Air Force Academy honor code. When this bad side is applied to the pursuit of happiness it must be opposed by every aspect of society; individuals, communities, and governments. When someone pursues happiness to the maximum extent of their ability, without “lie, cheat, and steal”, it is a good thing. There should be no checks on their endeavors, except competition (some one who wants to be even happier). The problem we have is governments which assume the mandate to decide how much happiness an individual should pursue. That is absolutely not a task of government.
The bad side of “Power” refers to how it is used. It may be legal power, but it is used in ways we deem wrong. Individuals can seek power for good reasons. I seek power to protect myself, my family, and my property. In this pursuit I seek as much power as possible and I will not give it up willingly. Unfortunately when we talk about “Power” we are always talking about the negative use of power. Most people could not give an example of a good use of “Power”. When power is used negatively we must work to oppose it in every possible way. We have a lot of work to do.
Let’s apply this to our present situation. President Obama has told us we are bad to pursue our happiness beyond the $250k per year level. Those who greet this with a big “YES” should beware. Next year you may be bad if you pursue happiness beyond the $100k level. That happens when you give power to those who “lie, cheat, and steal”.
Seth said:
Discussing where we are and which direction we are headed in the spectrum between capitalism and socialism is absolutely necessary, so that the people will have a clear view and understanding of where they are headed.
Oh that it were so. A significant proportion of this country cares more about receiving $8 per week from the government than where we are between capitalism and socialism. Some say this number is approaching 40%. When it passes 50% of the voters we have big trouble. We need a way to give people a clear view of the consequences of giving power to those who will give them money, any amount. Something like; if you keep voting for these people you are going to loose two of your three TVs, your second car, and the dish washer.
Guffman said:
As much as the AIG bonuses provoke a demand for a level playing field, we’re still a nation of capitalists, and I suspect we always will be.
Actually I completely agree with Guffman, but he used the phrase “AIG bonuses” which gives me the in to hit my current pet peeve about our leaders. The following is only tangentially related, but you’re free to click off.
I watched the whole House of Representatives committee hearing with the AIG CEO (Mr Liddy). I’m retired, so I have the time to subject myself to such torture. Mr Liddy is a class act. It would not have been long until I would have called a time out, explained to them that I had already answered the damn question six times, they had not bothered to listen, and were apparently too dumb to understand the answer.
Contrary to what our leaders are telling the country, AIG has many divisions which are healthy and are not involved in the current crisis. The crisis involves the Financial Products Division (FP). The FP Division handled the stupid products which caused all the mess. They screwed up. Those folks are gone and the task now is to clean up the mess.
AIG did not pay any PERFORMANCE BONUSES in 2008 in the FP Division. They didn’t deserve any bonuses, they screwed up big time. AIG made a big mistake when they developed a plan to clean up the FP mess. They created RETENTION BONUSES to keep the talent needed to perform the clean up. They should have called this anything except a bonus, perhaps Shutdown Pay. If you can’t understand the difference between a performance bonus and a retention bonus then you have no business having an opinion about AIG. Unfortunately our leaders go out of their way to not explain this difference. Some are just too dumb to understand it themselves.
I relate directly to the AIG situation. A number of years ago I had an Aerospace Contractor team which developed and operated several satellites for the government. The government decided to terminate our contract and transfer operation of the satellites to government employees. We were tasked to train the govies and make the transfer in nine months. We weren’t being fired, it was just one of those government decisions. We had a good team, but keeping them for nine more months was immediately difficult. A few were near retirement and would just work to the end and retire. A few didn’t think they had any good job prospects, so they would stick around. I was able to promise a few a job in another part of the corporation if they would stay. The rest immediately made a completely rational decision. They had families, needed an income, and wanted to do challenging work. Closing down a program wasn’t challenging work. They were going to be out-of-here ASAP. The only solution was Retention Bonuses. They weren’t of the magnitude of AIG, but as a percent of current pay they were pretty much the same. There was no way I could have shut down the program without those people, so every dollar was well invested. The government agreed completely and paid for it.
So what about our leaders in Congress?
They repeatedly returned to the question of why 11 people who received the Retention Bonuses had left AIG. They were unable to understand that the bonuses were paid when the people had completed their shut down tasks and were ready to leave AIG. They could not get it into their heads that if those people had left earlier, as they would have without the Retention Bonus, it would have cost the taxpayer more.
They repeatedly asked why AIG didn’t just hire new people for a lot lower salary. If you’ve never run a business everything is really simple. Our leaders did not care that we taxpayers would loose $320 billion if a new team did a 20% poorer job in the shutdown.
Early on one of our leaders asked for the names of the FP employees. Mr Liddy said he would provide the names if he was guaranteed confidentiality. He read a death threat against an employee and his family. Our leader would not guarantee confidentiality and Mr Liddy declined, bless him. At the end, the last questioner returned to the demand for names, with the same non-guarantee of confidentiality, and the same result. What a nut job.
There was more and more. Every American should be required to watch that hearing. It would seriously change the attitude of this country (I hope).
Sorry for veering off into another subject. I can’t stand the stupidity of our leaders. They are stirring this nation up when they should be providing adult leadership. Even President Obama made a point of how mad he is at AIG. That’s not the presidential leadership we need.
“Politics is the art of the possible.” – Otto von Bismarck
“A rising tide lifts all boats, but a falling tide lets you see who’s been swimming naked.” – found on the Internet
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It’s possible there has never been a better time for a national, indeed international, Socialist Awakening, but it’s not going to happen. Skip adduced many of the reasons upthread. There are others.
It’s easy to see the economic scandals of the past decade and the present international economic crisis as a sort of laboratory experiment in exactly the kind of pure laissez-faire capitalism Rand advocated. Traders at Enron, AIG et al. were essentially told, “Make as much money as you can, any way you care to.” And they did, and eventually the experiment got out of control and blew up the lab. (And the “scientists” in charge got away with it — even got nice bonuses for their efforts.) But it didn’t end there, because over many decades we had peddled that make-the-money ethos around the world. They bought it, and as our economy fell, much of the rest of the world fell with it.
And that’s a key reason Socialism won’t gain much traction today: international corporate capitalism has taken advantage of an immutable fact of Human Nature, which is greed. People WANT that make-the-money ethos to work, and over time they have lost incentives to look favorably on a true Socialist solution. There are generations of Chinese who aren’t in awe of Mao’s Long March. Generations of Russians don’t long for the good old Soviet days. Both societies are moving toward more open economic policies.
At the same time, there’s at least one generation of Americans, maybe more, who don’t share their forebears’ fears of the Hammer and Sickle. This is one reason the McCain/Palin charges of Socialism gained them nothing: while it’s still a bogeyman for old folks, lots of us have grown out of that. (The real problem with partisan use of “Socialist” is not that it’s intended to be pejorative. Demonizing the other side with “pejoratives” like “Communist” or “Nazi” generally reveals a dearth of ideas on the part of the name-caller. In this case “Socialist” essentially means, “The Left is evil, but the Right has nothing constructive to offer any more.”)
For those younger voters, then, the combination of the disastrous results of the Great Laissez-Faire Experiment and a more equable view of the “extreme” Left should have produced a political surge far to the left of Barack Obama. It didn’t, because in their secret hearts even the farthest-Left American Lefty wants to make as much money as (s)he can, by any means necessary, and Obama wasn’t threatening that status quo….
Both capitalism and Socialism have inevitably been damaged by immutable forces, namely Human Nature and the nature of Power. Unchecked Human Nature will steal as much as it can, in pursuit of its own happiness (hi, Ayn); unchecked Power will seize as much Power as it can and will not give up Power willingly.
Skip said, “We are moving toward our home grown version of something. We have no idea what it will be.” If Bismarck’s “art of the possible” applies, it will closely resemble what we’ve come to know the past 200-odd years, even if the changes are monumental. China’s new “mixed economy” is still unmistakably a totalitarian regime and will remain so. Putin continues the traditional Russian strong-man regime as the country eases into capitalism. The United States will do the same as it moves incrementally to the Left. “The slippery slope to Communism” is a fallacy (some slopes are slippery, some aren’t). The history of the ascendancy of Communist regimes is all about armed revolution, and that is not remotely possible in the 21st Century. That “tipping point” can’t happen. And “the dictatorship of the proletariat” is a doctrinaire-Communist pipe dream. It has never happened, and it never will, owing to those immutable human forces.
Seth says, “The divide between the two social forms appears to be an unbridgeable gulf based on core values that are mutually opposed: the socialistic principle that the needs of the many outweigh the needs of the few…”: Or the one. Mr. Spock knew that “rational self-interest” cannot be an absolute. “…and the capitalistic principle that preservation of individual liberty and encouragement of initiative best serves the needs of all:” Again, that can’t be an absolute. Individual liberty and encouragement of initiative is precisely what brought us to the point we’re at now. We’ve had a mixed economy for a long time, and a mixed economy is our only possible future. We can change the mix to a degree with additional regulation, but only to a degree.
As much as the AIG bonuses provoke a demand for a level playing field, we’re still a nation of capitalists, and I suspect we always will be.
Skip:
I agree that we are in uncharted waters here, but I disagree that “fairness” is or should be the guiding principle.
“Paternalism” may be it. Or perhaps “Nanny Statism.” But I think that “socialism” is the proper root term. The modifier is ambiguous however. Perhaps it’s Democratic Socialism, or Social Democracy but it has every appearance of being a system wherein the “wealthy” of the nation are going to be expected, and indeed forced to support the “middle class.” I see no evidence that Obama or anyone who works for him truly understands economics or the principles by which wealth is created and distributed, or if they do, they care only about political ideology, not economic stability.
What I see is ideology and payback. The latest “stimulus” bill was stuffed with earmarks and pork. It was a laundry list of just about every Democrat social entitlement and pork project that’s been proposed in the last 20 years all wrapped into one giant panic bill, not because it was necessary, but because it was achievable. Nancy Pelosi lead the charge to accomplish everything that could possibly be accomplished towards the Democrat agenda while the public is on its knees and has no will to resist.
But, it appears that things may be changing, and reenactments of the Boston Tea Party are becoming commonplace. Moreover, a group of centrist Democrats are taking heat from the ultra-left and the mainstream leftist media for stepping away from the far-left Democrat/Obama agenda.
If the term “socialism” is pejorative, it’s fully justified. I cannot agree that discussing the course of our nation and its relationship to socialism is valueless. One of the principle threats of socialism, as Marx outlined, is that it works insidiously, from within, until the trigger point is reached where open revolution seems likely to be successful. Discussing where we are and which direction we are headed in the spectrum between capitalism and socialism is absolutely necessary, so that the people will have a clear view and understanding of where they are headed.
Marxism works on the principle of the Big Lie. The Marxist dialectic calls for deliberate disinformation, lies and propaganda as a tactic to persuade the proletariat of the dangers of capitalism and the benefits of socialism. Tell a lie, tell it big, and keep telling it time and time again, unrelentingly and without ever addressing the criticisms of the misinformation being propagandized, using every form of distraction and evasion possible and eventually the lie will become the truth in the minds of the proletariat.
It is true that our government has many checks and balances to prevent the whims and caprices of the public from becoming policy, but even with all those protections, the system is not immune from subversion from within. The “boil the frog slowly” technique works with frogs, and it works with populations too, particularly when they are frightened and under economic stress.
Do I think that State Socialism (Soviet-style Communism) is foreseeable within my lifetime? No, of course not. But the more we teach our children to be dependent upon government for their safety and economic security (not prosperity), the farther down the slope we slip. So, it behooves us to resist any attempts to push us further down that slope, because like the environment, there is no way to tell exactly when the tipping-point will be reached.
In your final paragraph you cogently outline the danger we face in our immediate future. The problem as I see it is with the concept that people are entitled to a level “fair” playing field, and that the government has an obligation to provide it.
We must distinguish between legislation that seeks to level the playing field by taking from one group and giving to another, and regulation of financial markets to prevent harmful monopolies and aggregations of capital that, if a single company or small group of companies fail, can bring down the entire economy.
This is where our leaders failed us. It’s not the disparity of wealth between rich and poor that has brought us low. The standard of living of the poorest of the poor in this nation is orders of magnitude above that of the poor in other nations, including our neighbors in Mexico. Our children are not abandoned to pick scraps in garbage dumps or sit naked on a street where raw sewage runs in the gutters. Almost everyone in our country has a home or some kind of shelter, a source of food that prevents starvation, and the vast majority of the poor have many amenities that the poor of the Sudan would not dream of.
No, the problem is the centralization of wealth in ways that makes our economy vulnerable to the bad decisions of a very few people. It was a group of less than 300 people involved in creating and marketing the credit default swaps who are the proximate cause of this misery. They pandered “insurance” to international banks insuring the banks against a failure in the housing market without being subject to insurance regulations.
Credit default swaps were not considered to be “insurance” by the government, which was an enormous mistake. If the contract protects someone against a future unanticipated loss, it’s insurance and should be so regulated.
Insurance regulations are very strict, and require that insurance companies retain sufficient liquid capital to pay ALL potential claims against them. AIG wrote billions of dollars worth of unregulated insurance policies (CDS) and then when the call was put upon them to pay off the policies, they didn’t have enough capital to meet the obligations.
So the problem is not systemic with capitalism. When the economy was hot, the poor were being lifted up along with everyone else, and everybody was riding high on the tech, and then the housing bubble. Only when they burst did the clamor for social welfare programs emerge with vigor.
It’s not “business” that needs regulation, it’s the financial markets only, particularly focusing on insurance companies and banking, and the mortgage industry, which must be prohibited from securtizing mortgages and prohibited from moving mortgage investment outside the state in which the property is located. By decentralizing the mortgage industry, local banks and mortgage finance companies will flourish and be created to serve the need, and the investment will stay in the state. By regulating any form of insurance or agreement that looks or acts like insurance, to insure that such companies are neither too monolithic and are adequately capitalized, we can prevent another CDS debacle. By regulating international banking to ensure that US capital is not permitted to flow offshore to the point that our economy can be threatened by either politics or corruption in foreign countries, we can make the public trust the banking system again. thus bringing stability to the economy.
As for the rest of “business,” it need to be left alone, subject to existing regulation and oversight, to rebuild this nation and repay the unbelievable debt we’ve just saddled our grandchildren with.
We don’t need socialism or playing field leveling. We need a rising tide.
Skip,
Very well said.
The United States is never going to adopt socialism or communism. We are moving toward our home grown version of something. We have no idea what it will be. It has no guiding principles except “fairness”. We have given no serious thought to what we want to accomplish, but we seem to know we can do better.
The term socialism is presently an emotional pejorative used to label our journey to whatever. Use of the term does not imply that we are really moving toward true socialism, just toward something other than our past system of governance. Arguing the fine points of how our present course compares to true socialism is an academic exercise, enjoyed by some, which adds no value to our discussion.
Our form of government is totally unsuited to making huge revisions to our way of life. The founding fathers (and mothers) gave us a system highly resistant to rapid change, and rightly so. However, they weren’t so smart after all. They didn’t foresee the rise of 435 congressmen more interested in their own re-election than the good of the country. They didn’t foresee the creation of an elitist executive branch and an all knowing judiciary. They actually thought the three branches of government would create a balance. They never anticipated the three branches would join in an effort to gain control of political power.
As we stagger toward our future we have a government which creates laws to implement their most recent version of “fairness”. The fully predictable unintended consequences cause them to react with more laws which have more unintended consequences and on an on. Where we end up will only be known when the whole thing falls apart.
Neither socialism nor communism defines our future, but Ayn Rand’s book, Atlas Shrugged, may. Our leadership knows they must rely on the highly productive segment of our economy to produce the wealth to be “fairly” distributed to the rest. This is a difficult balancing act between destroying the highly productive segment and not properly catering to the rest. This is where our present form of government spells doom. Our 435 plus leaders have no ability to develop and consistently follow a plan (good or bad). We already see the failure coming with the economic stimulus. We create a rushed law to stimulate the economy, then react in horror at the unintended consequences of interfering with the economic system. Now we rush to tell business how to operate, and will be horrified again by the next unintended consequences. Business may have no choice but to tell government they quit, let the government take over and do whatever. Maybe our leaders should get ahead of this problem by immediately passing that law to make it a crime to stop working.
Atlas Shrugged had a happy ending. In our real world we have no guarantees.