I am either, nuts, or...

[Cheezy the Wiz]

The kibbutzim are dying out. People don't choose to live in them any longer. The other, you say they have to have individual rewards instead of community rewards. I don't see a refutation of my point here.

Well community rewards are individual rewards. What matters is making them feel like individual rewards. It doesn't even have to be a lot, merely enough to make someone feel as if they've gotten back what they put into it. I don't see why something like communal farming is inherently lacking in that department. For something like a kolkhoz, where the "collective" nature of it is not really evident (a place where the above "return" I described very seldomly happened), yeah, you might be able to choke their comparative lack of productivity up to not receiving enough of a reward for their efforts to feel worth it - most of their product went very far away and didn't sell for much, despite the shortage of things. But for your example of Plymouth colony, I can't help but feel that there is something external or unsaid that influenced that moved them to change their habits, or that influenced their harvest. The benefits of their work would have been readily at-hand, not sent off a thousand miles to be part of some giant food basket that the whole country took from. I mean, communal work is nothing new, the Amish have been doing it for centuries, as did most frontier towns.

As for the kibbutzim, people are leaving them for a variety of reasons, none of which constitute a failure on their part as communities. Not only were they driven by socialist motives, but also religious and social ones (the kibbutzim were historically the first line of defense against fedayeen attacks after independence, as well as their incredibly prominent role in 1947-8), and by the early '80s neither of those was particularly necessary for Israel. Also, kibbutzim were driven by the frontier mentality characteristic of early Zionism; they were founded by settlers in a world far away from their own, you didn't find these Lithuanian and Spanish Jews forming these kibbutzim in their home countries.

Because they can. They get the work they pay for. And if their workers are desperate enough, maybe a little more.

So they knowingly reduce the productivity of their workforce?

Many employees do make enough. But it depends on the skills and the demand for the skills.

Above you just said that they don't.

And no, some make enough. Most don't. Most don't make enough to afford health insurance or put their children through college. Most of those most probably even struggled to make rent this month.

Is there a large volume of well-paid, affluent people? Absolutely. Are they anything approaching a majority? Most certainly not.

I'm not debating the morality or justice of your cause. Only whether or not it will actually work. You have to show me it working. Because I just don't believe it.

Capitalism was once unproven as well. I don't know that socialism will work. But I do know that capitalism is evil enough to give socialism a fair shot, and that things cannot continue on like this. Not for people like me.

 

[innonimatu]

Has true libertarianism even been tried anywhere? Do we have examples of it working.. or not working?

About "true libertarianism", have a laugh with this! It mocks libertarianism very, very well.

 

[lovett]

The service sector now moves most of the wealth and provides most jobs, but people's wants of services are fickle, planning too often goes wrong.

Given your entire argument rests on this proposition - that demand for services is more variable than that for manufactured good, which is disastrous for capitalism - do you have any evidence for it? Why would socialism be a better system for dealing with variable demand?

Aside from this being a misquote of Traitorfish, yes I do. I don't see how you can not. It's a truism. 400 people control more wealth than the next 150 million in our country alone. And it is even worse in other countries. You know where it isn't? Places where socialist policies have taken root in various forms.

It is certainly not a truism. In fact, i'm somewhat perplexed that you believe it to be the case; it appears to be false. After a little searching I was able to find this book on income distribution in America in 1798. Conveniently, it attempt to predict income distribution in 1798 by projecting backwards from 1850s, 1860s and 1870s. The author argues that income inequality was roughly similar in both periods. He finds that inequality in pre-civil war America was significantly greater than it is now; on page 60 he explicitly concludes that inequality then was 'significantly larger than at the present time'. He find the Gini co-efficient on income then to be about 0.71. Currently, it is 0.45. He finds that even in the most equal areas, the rural northeast, a Gini co-efficient of around 0.55 obtained. Unless you think that the civil war involved massive re-distribution of wealth, I think we can plausibly conclude that America in the 1880s was significantly less equal than America today.

 

[Cutlass]

Well community rewards are individual rewards. What matters is making them feel like individual rewards. It doesn't even have to be a lot, merely enough to make someone feel as if they've gotten back what they put into it. I don't see why something like communal farming is inherently lacking in that department. For something like a kolkhoz, where the "collective" nature of it is not really evident (a place where the above "return" I described very seldomly happened), yeah, you might be able to choke their comparative lack of productivity up to not receiving enough of a reward for their efforts to feel worth it - most of their product went very far away and didn't sell for much, despite the shortage of things. But for your example of Plymouth colony, I can't help but feel that there is something external or unsaid that influenced that moved them to change their habits, or that influenced their harvest. The benefits of their work would have been readily at-hand, not sent off a thousand miles to be part of some giant food basket that the whole country took from. I mean, communal work is nothing new, the Amish have been doing it for centuries, as did most frontier towns.

As for the kibbutzim, people are leaving them for a variety of reasons, none of which constitute a failure on their part as communities. Not only were they driven by socialist motives, but also religious and social ones (the kibbutzim were historically the first line of defense against fedayeen attacks after independence, as well as their incredibly prominent role in 1947-8), and by the early '80s neither of those was particularly necessary for Israel. Also, kibbutzim were driven by the frontier mentality characteristic of early Zionism; they were founded by settlers in a world far away from their own, you didn't find these Lithuanian and Spanish Jews forming these kibbutzim in their home countries.

But that's really my point. You can discus and dissect reasoning all you want. But in the end you come to the choices people make, for whatever reason. And I don't see where people are choosing that type of community. Handfuls of people here and there, certainly. But never very many.

So they knowingly reduce the productivity of their workforce?

I think a lot of that has to do with the mentality of the labor-management conflict. There's a psychology on both sides. There are good bosses. But there are many bad ones. And the bad ones like to believe they are screwing over labor. And will sometimes blind themselves to the negative effects of that.

Above you just said that they don't.

And no, some make enough. Most don't. Most don't make enough to afford health insurance or put their children through college. Most of those most probably even struggled to make rent this month.

Is there a large volume of well-paid, affluent people? Absolutely. Are they anything approaching a majority? Most certainly not.

But the thing is, in the developed nations, most people have done OK. I mean, the reason that even liberalism is dead in the US is that so few people see the need for it. And they don't see the need for it because they aren't doing that badly.

Now this changes over time. But even now, in bad times, most people are doing alright. Or good enough to not rock the boat in any case.

You can't project the trouble you are having onto the experience of most of the people in the country. They aren't seeing the same world that you are.

Capitalism was once unproven as well. I don't know that socialism will work. But I do know that capitalism is evil enough to give socialism a fair shot, and that things cannot continue on like this. Not for people like me.

But capitalism essentially evolved in place. It wasn't imposed, it grew. Socialism isn't growing. And you can't blame all of that on the actions of conservatives to suppress it. Even in places where it is a valid political choice, it is not winning. Only a minority of people are choosing it.

 

[innonimatu]

So why do corporations work?

I really think we should drop that "farm" argument and get back to this one which Cheezy pointed out. What is the difference between working for a corporation and working for, say, a cooperative? The sole official difference is who gives the orders and for what reasons. And the reality is that the process of selecting who runs a corporation has little to do with ownership already.

As for failure, yes, cooperatives can fail. So can private corporations or individual businesses. Ultimately it always depends on who happens to be heading it and on the circumstances in which it operates. Or are we arguing that capitalism, supposedly through its structure of ownership, is always more efficient at choosing people to positions of power that any other more - shall we say - democratic arrangement? Then we'd have to face the hard question of why most states in the world evolved towards democratic institutions, away from property-based voting rights, for example. Shouldn't that have caused them to collapse as failures, and be taken over by the imperial, autocratic states?

It fact, I'll say that anyone arguing that communism can't work because community efforts are doomed to fail is in fact also arguing that democratic states can't work because they're... democratic! And the reality absolutely contradicts that argument. No form of democracy that I know is perfect, but they do work in the sense of providing stable institutions for states to function. And states are the most complex stable communities created by humans. To argue that this can't work is absurd! We can argue over specifics of communitarian, democratic institutions, which are better and which are failures, we can argue about they size, their scope, but we know they can be done because we are already doing them. And there is no reason to assume that they can only be done on a state-wide level: not only do present day states range from the very small to the continental-sized, but there is a also very long history of communitarian institutions prior to the modern states, which did work.

 

[Cutlass]

It is certainly not a truism. In fact, i'm somewhat perplexed that you believe it to be the case; it appears to be false. After a little searching I was able to find this book on income distribution in America in 1798. Conveniently, it attempt to predict income distribution in 1798 by projecting backwards from 1850s, 1860s and 1870s. The author argues that income inequality was roughly similar in both periods. He finds that inequality in pre-civil war America was significantly greater than it is now; on page 60 he explicitly concludes that inequality then was 'significantly larger than at the present time'. He find the Gini co-efficient on income then to be about 0.71. Currently, it is 0.45. He finds that even in the most equal areas, the rural northeast, a Gini co-efficient of around 0.55 obtained. Unless you think that the civil war involved massive re-distribution of wealth, I think we can plausibly conclude that America in the 1880s was significantly less equal than America today.

Without getting into the rest of your argument, the Civil War did massively redistribute wealth. Because it destroyed most of the wealth of the South and particularly the plantation owners.

 

[Cheezy the Wiz]

It is certainly not a truism. In fact, i'm somewhat perplexed that you believe it to be the case; it appears to be false. After a little searching I was able to find this book on income distribution in America in 1798. Conveniently, it attempt to predict income distribution in 1798 by projecting backwards from 1850s, 1860s and 1870s. The author argues that income inequality was roughly similar in both periods. He finds that inequality in pre-civil war America was significantly greater than it is now; on page 60 he explicitly concludes that inequality then was 'significantly larger than at the present time'. He find the Gini co-efficient on income then to be about 0.71. Currently, it is 0.45. He finds that even in the most equal areas, the rural northeast, a Gini co-efficient of around 0.55 obtained. Unless you think that the civil war involved massive re-distribution of wealth, I think we can plausibly conclude that America in the 1880s was significantly less equal than America today.

Why does their measure only consider property holders? Most people didn't own property in 1800.

And yes, there was a massive redistribution of wealth during the Civil War. It was called Emancipation. Four million enchattled "property" became people again. Huge plantations were destroyed in the process. The entire South was wrecked, and Northern companies moved into to rebuild it, kind of like what we did/are doing to Iraq.

EDIT: Crosspost!

 

[Cheezy the Wiz]

But that's really my point. You can discus and dissect reasoning all you want. But in the end you come to the choices people make, for whatever reason. And I don't see where people are choosing that type of community. Handfuls of people here and there, certainly. But never very many.

And yet they have before.

But the thing is, in the developed nations, most people have done OK. I mean, the reason that even liberalism is dead in the US is that so few people see the need for it. And they don't see the need for it because they aren't doing that badly.

So explain European social democracy then.

Now this changes over time. But even now, in bad times, most people are doing alright. Or good enough to not rock the boat in any case.

You can't project the trouble you are having onto the experience of most of the people in the country. They aren't seeing the same world that you are.

That's right, many of them are worse off than me, because I have an education and don't make minimum wage. Many of them are also on the exact same page as me; or were you not paying attention since September?

But capitalism essentially evolved in place. It wasn't imposed, it grew. Socialism isn't growing. And you can't blame all of that on the actions of conservatives to suppress it. Even in places where it is a valid political choice, it is not winning. Only a minority of people are choosing it.

I'm not going to list the socialist influences on our society (or the progressions socialists said would happen), because the list would be too great. Needless to say, we've moved forward since 1750.

I really think we should drop that "farm" argument and get back to this one which Cheezy pointed out. What is the difference between working for a corporation and working for, say, a cooperative? The sole official difference is who gives the orders and for what reasons. And the reality is that the process of selecting who runs a corporation has little to do with ownership already.

As for failure, yes, cooperatives can fail. So can private corporations or individual businesses. Ultimately it always depends on who happens to be heading it and on the circumstances in which it operates. Or are we arguing that capitalism, supposedly through its structure of ownership, is always more efficient at choosing people to positions of power that any other more - shall we say - democratic arrangement? Then we'd have to face the hard question of why most states in the world evolved towards democratic institutions, away from property-based voting rights, for example. Shouldn't that have caused them to collapse as failures, and be taken over by the imperial, autocratic states?

It fact, I'll say that anyone arguing that communism can't work because community efforts are doomed to fail is in fact also arguing that democratic states can't work because they're... democratic! And the reality absolutely contradicts that argument. No form of democracy that I know is perfect, but they do work in the sense of providing stable institutions for states to function. And states are the most complex stable communities created by humans. To argue that this can't work is absurd! We can argue over specifics of communitarian, democratic institutions, which are better and which are failures, we can argue about they size, their scope, but we know they can be done because we are already doing them. And there is no reason to assume that they can only be done on a state-wide level: not only do present day states range from the very small to the continental-sized, but there is a also very long history of communitarian institutions prior to the modern states, which did work.

All excellent points! I've been trying to draw that parallel for people for years. The argument for democracy in politics is identical to the argument for democracy in economics. A dispute with one is a dispute with the other. It's really a sad testament that the popular mind has forgotten that economics is political.

On that note, I'll prod you once again to finish that history of economic cycle in WH!

 

[lovett]

Without getting into the rest of your argument, the Civil War did massively redistribute wealth. Because it destroyed most of the wealth of the South and particularly the plantation owners.

And yes, there was a massive redistribution of wealth during the Civil War. It was called Emancipation. Four million enchattled "property" became people again. Huge plantations were destroyed in the process. The entire South was wrecked, and Northern companies moved into to rebuild it, kind of like what we did/are doing to Iraq.

EDIT: Crosspost!

Yes. Which Is why I mention that inequality in the most equal areas of the USA was greater than it is today across the US. The destruction of the plantation owners wealth in terms of emancipation presumably made the South more equal, but there is no reason to believe it made the North more equal. And the North alone was considerably less equal in 1870 than it, or the USA as a whole, is today.

Why does their measure only consider property holders? Most people didn't own property in 1800.

Data constraints, I assume. He sometimes considers non-property holders, sometimes not. However, I am sure you will not suggest that considering non-property holders as well would make a society appear more equal.

 

[innonimatu]

Given your entire argument rests on this proposition - that demand for services is more variable than that for manufactured good, which is disastrous for capitalism - do you have any evidence for it? Why would socialism be a better system for dealing with variable demand?

Because it can easily do away with the one thing to which capitalism chains itself: the notion that only profit justifies doing anything.
Controlling profits, planning for profit, is relatively easy in an industrial society. Far more so that in an agricultural one, which (imho) explains why capitalism came into being precisely with the industrial revolution, not before. The environment enabled this technique of decision making where profit could be used to judge allocation of limited resources.

But it's no longer so with services. And precisely because the "service economy is too volatile to plan effectively. Take any of the internet-based services, for example. Multimillion-dollar businesses can pop up in a couple of years, and then collapse in a couple more. About the modern uncertainty of service businesses I really don't think I have to give any more explanations - there are examples are all around. This variability means that the owners of capital are no longer making informed decisions on what they do: they just throw it around in the hope of hitting something big - remember the dot-com bubbles? More stock market trading was supposed to fix those uncertainties in investment, to reduce risk in this modern era of (more that any time before) "creative destruction" - that was the justification for deregulation - it failed.
It also means that there are indeed services which would have demand, but not at the price points which would pay an expected profit+risk premium under capitalist reasoning. In which case capitalist reasoning will let people stand idle, instead of employing them.

And then there's also the ridiculous thing, the wasteful thing, in that some (many? increasingly more?) services are being rationed for the sake of profit which needed not be rationed. Profit as a way of keeping tabs on the use of limited physical resources were a useful expedient. Profit as a way of allocating modern immaterial services often require creating artificial scarcity (ever heard of the "knowledge economy"?) in order to attribute a value to a product. That is economically wasteful.

Finally, in a service economy the money flows become much more complex, as people can change their spending habits more easily. With the past rising productivity much of what is consumed today is optional, more that at any other stage in history, and thus subject to our own individual whims whims and to the ever-changing fashions. money changes hands faster and there is no small set of "catch-all" basics where that flow can be monitored and controlled.

All this makes both soviet-style central planning and the regulatory state role in capitalist planning impossible to achieve. The easy way out was do admit failure and "deregulate" while presenting that as an improvement- it was indeed an inevitability and there is no going back to the old regulations. I mean, we can enact the old regulations again, I just don't think they'd work. That's part of the despair of people trying to figure out an exit for the present crisis. The solution for this deregulation was to lend&pretend - create demand with what was effectively "new money" and let that new money be slowly circulated into profits, without any real concern for an eventual repayment of loans, thereby fulfilling the profit requirement of the capitalist logic. The profits got accumulated, the debt piled up, new money got created only to be "sterilized", parked as profit. Everything was stable again... except that debt was supposed to pay interest, and the increasing cost of servicing that interest eventually breaks the whole game!

Obvious way out: zero interest rate. Which is the point we are at now - the US went that way, Europe is pretending it won't but in the end it probably will. Which effectively means: giving away money to whomever wants it - whomever could get a loan, which eventually became "everybody" in order to keep the economy running. As some conservatives complain - socialism! Hidden socialism, ashamed socialism, apparently irrational socialism in that it serves the purpose of preserving an ability to accumulate profits which (given the new willingness to keep creating money on demand) are now themselves meaningless. Except that profits are not meaningless. They are the ideological foundation of control, of power. Managers are supposed to ensure that profits are made. Owners are supposed to demand and get profits. If it was acknowledged that the notion of profit already became economically meaningless their authority would be nullified, some other form of authority, some other justification, would have to replace it. Which means... they might themselves get replaced in the confusion of such transition - interesting times and all that. No wonder governments are desperate...

Well, this gets us where we are now, it still doesn't explain in what way socialism - what kind of socialism - could provide an exit for the crisis. But I've already written too much today. And frankly, I still haven't settled on a preferred version myself. One think I do believe is that the very economic notion of profit has outlived its usefulness and a solution to this crisis will have to replace it. Not necessarily do away with accounting or money, but do away with profit as the measure of, the criteria for, what gets or not gets done.

It's really a sad testament that the popular mind has forgotten that economics is political.

True, true! But I think that point will finally be driven home over these next few years.

On that note, I'll prod you once again to finish that history of economic cycle in WH!

Thanks for the encouragement, but I admit that I'm afraid to get into the more recent history. I just don't thing I know enough about it to be comfortable writing such pieces. And it's too diverse to sum up in a short text! It would have to be separated, perhaps into several different viewpoints. I keep hoping that someone else () will do one!

 

[amadeus]

Aside from this being a misquote of Traitorfish, yes I do. I don't see how you can not. It's a truism. 400 people control more wealth than the next 150 million in our country alone.

The top 400 have a net worth of $1.27 trillion. That is out of $53.1 trillion for everybody in the U.S.

Now, I emphasized net worth because it's an important point: the bottom 50% do have wealth, but they also have debt, and the debt skews the statistic.

And it is even worse in other countries.

Which countries? I want to know how to respond, not yet challenging your statement.

You know where it isn't? Places where socialist policies have taken root in various forms.

Which places? Same reason as above.

But don't act like you're for the equitable distribution of wealth.

I'm not, and make no pretense about doing so. I'm saying that Marx was wrong.

 

[MantaRevan]

I'm unsubbing this, because I don't see anything good coming out of it.

 

[Traitorfish]

When the Pilgrims first settled in the area that would become Massachusetts, most of the people were a small and cohesive community with values aimed at the good of the community. They had collective farming. They starved. Later on the farms were divided into separately owned plots. The labor effort that went into the farming was hugely increased.

Even though they risked death by starvation, even though they had watched friends and family die of starvation, people did not work nearly as hard for the community than they worked for themselves.

That's a pretty powerful lesson.

Not really. History is littered with ill-conceived utopian projects, and all they tell us is "don't put your trust in ill-conceived utopian projects", which isn't some much powerful as obvious. Marx's entire conception of history hinges on a rejection of any tranhistorical "nature" in favour of an historically specific "species-being", and that means rejecting a Bakuninian saintliness as much as a Hobbesian beastliness.

Also, I'm given to understand that the Massachusetts Bay colony was, firstly, largely populated by urban artisans who knew bugger all about agriculture (same problem faced by the Diggers back in England), and, secondly, organised as something more like a joint-stock company than a commune, so it doesn't even tell us very much about utopian communes, just about bone-headed English puritans who think that you can pray your way to prosperity.

When you have community rewards for effort instead of individual rewards for effort, you get a lot less effort. Quite possibly so little effort that survival itself is at stake. You need a way to motivate the slackers.

In what sense is the potential for such motivation absent in a communistic society- or, indeed, necessarily present in a capitalistic one? If the last few years have made anything clear, it's that providing a motivation to make money is in no sense the same thing as providing a motivation to do so socially productive work. There's no self-evident equivalence between "work hard and well = be well rewarded" and "acquire money = you now have money".

It is certainly not a truism. In fact, i'm somewhat perplexed that you believe it to be the case; it appears to be false. After a little searching I was able to find this book on income distribution in America in 1798. Conveniently, it attempt to predict income distribution in 1798 by projecting backwards from 1850s, 1860s and 1870s. The author argues that income inequality was roughly similar in both periods. He finds that inequality in pre-civil war America was significantly greater than it is now; on page 60 he explicitly concludes that inequality then was 'significantly larger than at the present time'. He find the Gini co-efficient on income then to be about 0.71. Currently, it is 0.45. He finds that even in the most equal areas, the rural northeast, a Gini co-efficient of around 0.55 obtained. Unless you think that the civil war involved massive re-distribution of wealth, I think we can plausibly conclude that America in the 1880s was significantly less equal than America today.

Yet again, what does income distribution have to do with the concentration of capital?

 

[lovett]

Because it can easily do away with the one thing to which capitalism chains itself: the notion that only profit justifies doing anything.
Controlling profits, planning for profit, is relatively easy in an industrial society. Far more so that in an agricultural one, which (imho) explains why capitalism came into being precisely with the industrial revolution, not before. The environment enabled this technique of decision making where profit could be used to judge allocation of limited resources.

But it's no longer so with services. And precisely because the "service economy is too volatile to plan effectively. Take any of the internet-based services, for example. Multimillion-dollar businesses can pop up in a couple of years, and then collapse in a couple more. About the modern uncertainty of service businesses I really don't think I have to give any more explanations - there are examples are all around. This variability means that the owners of capital are no longer making informed decisions on what they do: they just throw it around in the hope of hitting something big - remember the dot-com bubbles? More stock market trading was supposed to fix those uncertainties in investment, to reduce risk in this modern era of (more that any time before) "creative destruction" - that was the justification for deregulation - it failed.
It also means that there are indeed services which would have demand, but not at the price points which would pay an expected profit+risk premium under capitalist reasoning. In which case capitalist reasoning will let people stand idle, instead of employing them.

And then there's also the ridiculous thing, the wasteful thing, in that some (many? increasingly more?) services are being rationed for the sake of profit which needed not be rationed. Profit as a way of keeping tabs on the use of limited physical resources were a useful expedient. Profit as a way of allocating modern immaterial services often require creating artificial scarcity (ever heard of the "knowledge economy"?) in order to attribute a value to a product. That is economically wasteful.

Finally, in a service economy the money flows become much more complex, as people can change their spending habits more easily. With the past rising productivity much of what is consumed today is optional, more that at any other stage in history, and thus subject to our own individual whims whims and to the ever-changing fashions. money changes hands faster and there is no small set of "catch-all" basics where that flow can be monitored and controlled.

All this makes both soviet-style central planning and the regulatory state role in capitalist planning impossible to achieve. The easy way out was do admit failure and "deregulate" while presenting that as an improvement- it was indeed an inevitability and there is no going back to the old regulations. I mean, we can enact the old regulations again, I just don't think they'd work. That's part of the despair of people trying to figure out an exit for the present crisis. The solution for this deregulation was to lend&pretend - create demand with what was effectively "new money" and let that new money be slowly circulated into profits, without any real concern for an eventual repayment of loans, thereby fulfilling the profit requirement of the capitalist logic. The profits got accumulated, the debt piled up, new money got created only to be "sterilized", parked as profit. Everything was stable again... except that debt was supposed to pay interest, and the increasing cost of servicing that interest eventually breaks the whole game!

Obvious way out: zero interest rate. Which is the point we are at now - the US went that way, Europe is pretending it won't but in the end it probably will. Which effectively means: giving away money to whomever wants it - whomever could get a loan, which eventually became "everybody" in order to keep the economy running. As some conservatives complain - socialism! Hidden socialism, ashamed socialism, apparently irrational socialism in that it serves the purpose of preserving an ability to accumulate profits which (given the new willingness to keep creating money on demand) are now themselves meaningless. Except that profits are not meaningless. They are the ideological foundation of control, of power. Managers are supposed to ensure that profits are made. Owners are supposed to demand and get profits. If it was acknowledged that the notion of profit already became economically meaningless their authority would be nullified, some other form of authority, some other justification, would have to replace it. Which means... they might themselves get replaced in the confusion of such transition - interesting times and all that. No wonder governments are desperate...

Well, this gets us where we are now, it still doesn't explain in what way socialism - what kind of socialism - could provide an exit for the crisis. But I've already written too much today. And frankly, I still haven't settled on a preferred version myself. One think I do believe is that the very economic notion of profit has outlived its usefulness and a solution to this crisis will have to replace it. Not necessarily do away with accounting or money, but do away with profit as the measure of, the criteria for, what gets or not gets done.

So succinctly, and correct me if I'm wrong, your argument appears to be:

1) The modern economy is based on the supply of services.
2) Demand for services is much more volatile than that for manufactured goods.
3) Capitalism depends on stable, predictable demand to allow for planning.
4) Because of 1) and 2) stable, predictable demand no longer exists.
5) Because of 4) and 3) capitalism no longer works.
6) Socialism can accommodate volatile demand.
7) Socialism would work.


If this is the correct interpretation of your argument (or something close) I can't say I find it particularly convincing. I explicitly asked you to justify 2) and you haven't really done so. You have told me there are examples of volatile service industries and I don't really deny that. But manufacturing businesses seem easily as volatile; the mobile phone business springs to mind and the rapid changes there over the past few decades. The transformative impact of business's like Ford or IBM in transport and computing seem to speak of potential volatility in manufacturing industries. A priori, this claim does not seem especially plausible. Many service industries seem positively pedestrian; I imagine hairdressers and plumbers have gotten rather good at predicting demand for their services over a medium timeframe. What these examples are is anecdotal, and the way to defeat anecdotes is with data. Given that a priori there seem no particular reason to believe service industries are more volatile than manufacturing industries, unless you supply some data your argument appears unsound. Namely, we have no reason to believe 2) and therefore no reason to believe 4) and 5).

Moreover, as you say you do not explain why socialism would be better able to accommodation volatility than capitalism. You say that capitalism fails because it requires the prediction of profits to motivate economic action, but you do not say why socialism would succeed. And I need help here; I cannot re-construct any plausible reasoning you might be using. If there is massive volatility in the demand for services, I do not see why socialist co-operatives would be better able to plan for and react to that volatility. That an organization is run by its workers does not magically make that organization prescient (does it?); the factors to which you attribute the failure of capitalism do not seem to lead to the success of socialism.

Yet again, what does income distribution have to do with the concentration of capital?

Quite a lot actually, especially in socialist thought. In capitalist economies income is (partly) derived from investment of capital and thus one of the observable consequences of the proposition that capital was less concentrated in the 1880s then today would be that income was more equal in the 1880s then today. The fact that it was not implies that capital is not more concentrated today than in 1880.

Now capital is a somewhat vague term the meaning of which differs depending on who you ask. However, I'd argue that income is inequality is the single best measure of capital concentration, especially if we include human capital in our 'capital' category. Wealth is another decent proxy, and the book I linked to runs the numbers again in respect to that. The author finds that wealth inequality between 1798 and 1980 to have been roughly constant. It has fluctuated, but with no clear trend. This is not much confirmation of the theory that capital will accumulate, especially given the great fall in income inequality.

If you have any other measures which contradict this, feel free to offer them. However as far as I can see this particular claim that both you and Cheezy have made stands falsified. That isn't disastrous; nothing normative regarding Socialism follows from the fact that the US has become more equal since 1880. However, it does pay to check your facts.

 

[kochman]

What is means is that when you allow conservatives to run economic policy in capitalist countries, they will do so much damage to it that nothing can stop it from melting down. And heroic measures after heroic measures still may not be enough to protect the nations from conservatism.

Um... Europe has been dominated by liberal politicians for decades... so, what are you talking about?
Congress is usually dominated by liberals in the USA over the past decades... when all this debt was acruing. Mix & match of liberal and conservative presidents.

So, who is to blame?

 

[Cutlass]

Um... Europe has been dominated by liberal politicians for decades... so, what are you talking about?
Congress is usually dominated by liberals in the USA over the past decades... when all this debt was acruing. Mix & match of liberal and conservative presidents.

So, who is to blame?

Does it really? Much of Europe has bee trying to roll back social programs for decades. Socialism, as such, is nearly as extinct in Europe as it is in the US.

Now I grant you that the common run of conservatives in Europe are rarely as conservative as the Republicans are now. But that is not the same thing as calling them liberals.

As for the US, we haven't had a liberal majority in either house of Congress since Carter was president. And the so called "liberal wing" of the Democratic party now is more conservative than most of the conservative wing was in the 70s.

There has been a steady tracking to the right on a broad range of issues in the US since 1980. And it has effected almost every area of what the government does. The only "leftward trend" in American politics is that the bigotry and official discrimination against gays is largely eroding. Other than that issue, conservatism is winning across the board. Just look at how many Democrats accept policies that even Reagan would not have tried to force through. Like the Bush tax cuts.

 

[kochman]

Does it really? Much of Europe has bee trying to roll back social programs for decades. Socialism, as such, is nearly as extinct in Europe as it is in the US.

Now I grant you that the common run of conservatives in Europe are rarely as conservative as the Republicans are now. But that is not the same thing as calling them liberals.

As for the US, we haven't had a liberal majority in either house of Congress since Carter was president. And the so called "liberal wing" of the Democratic party now is more conservative than most of the conservative wing was in the 70s.

There has been a steady tracking to the right on a broad range of issues in the US since 1980. And it has effected almost every area of what the government does. The only "leftward trend" in American politics is that the bigotry and official discrimination against gays is largely eroding. Other than that issue, conservatism is winning across the board. Just look at how many Democrats accept policies that even Reagan would not have tried to force through. Like the Bush tax cuts.

You're using fuzzy semantics now.

Decades of rolling back socialism in Europe? Not really.

Even the more liberal "conservatives" in Europe have only recently been making gains really... on a wide scale. An election here or there doesn't matter... the trend over the last decades, when this debt was structured and spent, was in highly liberal times.

Democrats, the liberal party, have had tons of congressional majorities. I know you argue this away by saying that most dems are conservatives, but that just isn't accurate.
I can't subscribe to situations like that.

 

[warpus]

I really think we should drop that "farm" argument and get back to this one which Cheezy pointed out. What is the difference between working for a corporation and working for, say, a cooperative? The sole official difference is who gives the orders and for what reasons. And the reality is that the process of selecting who runs a corporation has little to do with ownership already.

As for failure, yes, cooperatives can fail. So can private corporations or individual businesses. Ultimately it always depends on who happens to be heading it and on the circumstances in which it operates. Or are we arguing that capitalism, supposedly through its structure of ownership, is always more efficient at choosing people to positions of power that any other more - shall we say - democratic arrangement? Then we'd have to face the hard question of why most states in the world evolved towards democratic institutions, away from property-based voting rights, for example. Shouldn't that have caused them to collapse as failures, and be taken over by the imperial, autocratic states?

It fact, I'll say that anyone arguing that communism can't work because community efforts are doomed to fail is in fact also arguing that democratic states can't work because they're... democratic! And the reality absolutely contradicts that argument. No form of democracy that I know is perfect, but they do work in the sense of providing stable institutions for states to function. And states are the most complex stable communities created by humans. To argue that this can't work is absurd! We can argue over specifics of communitarian, democratic institutions, which are better and which are failures, we can argue about they size, their scope, but we know they can be done because we are already doing them. And there is no reason to assume that they can only be done on a state-wide level: not only do present day states range from the very small to the continental-sized, but there is a also very long history of communitarian institutions prior to the modern states, which did work.

That is all very well put. I am not a communist by any means, but I agree with a lot of what you just said.

I do not trust any business that answers to a group of shareholders and so has profit as its main motive.

 

[Cheezy the Wiz]

Many service industries seem positively pedestrian; I imagine hairdressers and plumbers have gotten rather good at predicting demand for their services over a medium timeframe.

As far as restaurants go (which is something I certainly know more than a few things about), the only way this could be equated would be with catering; apart from that, demand is almost completely unpredictable. We try to gauge this year's sales based on what sales were like last year on a given date (and then extrapolate how much product to order or prep beforehand, how much labor to schedule, et al), but all of that is extremely volatile. I've seen days that were supposed to be slow become incredibly busy for absolutely no reason, and what is expected to be a very busy day fall flat on its face. When either of those happen, the best you can do is try to react quickly, either getting on the phone to try and get more people in there, or sending people home, depending on the situation. After that is the problems of product movement!

 

[Antilogic]

You're using fuzzy semantics now.

Decades of rolling back socialism in Europe? Not really.

Even the more liberal "conservatives" in Europe have only recently been making gains really... on a wide scale. An election here or there doesn't matter... the trend over the last decades, when this debt was structured and spent, was in highly liberal times.

Democrats, the liberal party, have had tons of congressional majorities. I know you argue this away by saying that most dems are conservatives, but that just isn't accurate.
I can't subscribe to situations like that.

So we are on the same page, I have gone back and actually looked at each Congress since 1981, and have listed below the number of times Democrats control both houses, Republicans control both houses, and the time when it was mixed. Here are the results:

Dems - 6
Reps - 5*
Mixed - 5*

*I counted the 107th as mixed even though the Republicans had majority control of the House--the Senate switched between Democratic and Republican majorities during the 107th's tenure. Arguably, 6/6/5 might be a better call.

Looks pretty balanced to me. Since 1981, we have had 3 Republicans and 2 Democratic presidents, control split 20-11 years. Republicans have an edge here (and have had an edge in years of White-House control, appointing of justices, etc. since WW2).

Furthermore, your argument is highly disingenuous because it only looks at half of the contributing factors to debt. Tax cuts have significantly reduced the revenues to the government and are the #1 contributor to the situation we are in now. And those are largely attributed to the Republican Party, with or without some Democrats supporting them.

Your last paragraph is just ridiculous--you can't subscribe to the idea that parties and their compositions shift through time? Or are you actually suggesting that the Democrats are a 'liberal' party (which is a term that is woefully undefined in this debate)? Are you being serious?



EDIT: While others may unsubscribe, please keep the Cutlass v. Socialist argument going. Quite fascinating.