| They "awaken us to the reality of the time bomb that has stopped ticking — it has exploded," The Sowetan newspaper said in an editorial. "Africans are pitted against each other ... fighting for a bigger slice of the mineral wealth of the country. In the end the war claims the very poor African -- again." |
The murder of over 30 striking miners in South Africa, by South African police, brings back memories of the Ludlow mine massacre in the United States back in 1914.
The Ludlow mine was owned by Rockefeller, who sent in his goons to put down a strike by workers who had been demanding better working conditions. Rockefeller's security men ended up killing about 25 people and eleven of them were children. Rockefeller is universally lauded as one of history's great capitalists, who built his fortune "on his own." But it also rests on blood spilled by others.
This is the dark side of capitalism. Murdering workers as a means to enforce discipline? Work on our terms and you die.
While no one was killed last year, the widespread police brutality against OWS protesters is in the same vein, it was just non-lethal. However, getting thrown in jail as a consequence of protesting rampant and legalized criminality by the financial sector also seems pretty harsh. Or how about the current "Pussy Riot" trial in Russia. Three young girls dance in a church with silly costumes, protesting Vladimir Putin and they face seven years in jail???
History always comes back to the same reality: it's the "haves" versus the "have nots" and the haves will always win. There have only been brief periods in human history where the have nots got a fair shot, and it ain't now.
38 comments:
This is not capitalism seeing as individual rights are being violated. Here in the US, where competition is being distorted is yet another example of how we do not live in a capitalistic society, but rather one where laws can be enforced to help those who currently reside in power at the expense of those looking to compete.
I very much dislike how capitalism is being misrepresented, but I do agree that it is shameful that these atrocities still go on.
Capitalism is the elevation or prioritization of capital above all else. Killing sriking workers to protect the mine, its owners and profits does not fall within the definition of capitalism? It's extreme, and it violates other laws and societal conventions (repsect for life, etc), but is it not just an example of the prioritization of capital over labor/people?
Capitalism is all about private ownership, capital and profits. All else is secondary. There are laws in most countries that make it illegal to harm other human beings, however, more and more we see those laws subjugated, however brutally, to the needs of capitalists to protect their own interests.
Oh bloody hell, this might as well have been posted by Tom Hickey. Why not just comment on the incident in South Africa? Why must bring completely irrelevant class warfare garbage? No miners are getting shot in America. You cannot compare the two.
Under capitalism, the labor market is treated as a commodity market and workers are considered commodities. Capitalism is amoral, and there is no room in it as an economic system for morality. Morality must be imposed from without through laws to which capitalists are subject and institutional rules that modify laissez-faire. Capitalists will obviously do their best to structure those laws and rules in their favor, i.e., to allow and even encourage exploitation, along with rentiers who gain wealth from extraction.
Capitalism is incompatible with liberal democracy, which requires a liberally educated electorate rather than just a compliant work force, and free people rather than people dependent on their work, and therefore owners of capital, for sustenance.
This is why we have mostly mixed economies today, and the trend on the part of controllers of financial and non-financial capital to make the system as close as possible to laissez-faire as possible by getting government out of their way economically but using government to control the work force politically, as well as to extend their reach externally through empire.
Just read history.
Sam: "Oh bloody hell, this might as well have been posted by Tom Hickey. Why not just comment on the incident in South Africa? Why must bring completely irrelevant class warfare garbage? No miners are getting shot in America. You cannot compare the two."
Mike said, no one has been killed yet, but that is not completely true. Look at what happened in Anaheim recently. It would be more correct to say that no one who is white has been killed yet. There is already massive political repression and intimidation going on even against people who are solidly middle class, which makes up most of Occupy, and there have been a whole lot of wounded, some seriously, like ex-Marine Scott Olson, who was out there on the line again last night in Oakland.
What I find interesting by following Occupy Marines, Navy, etc., is how many vets who put their asses on the on the line in Iraq and Afghanistan are appalled by what they have encountered on returning to the US, and they are pushing back in an organized way, often on the front lines here. It makes a mockery of what they were fighting for. I did the same thing after getting out of the service during Vietnam, during which time I had come to realize what the war was really all about.
Last Saturday in Anaheim, California, police on routine patrol killed an unarmed person of color (Manuel Diaz), shooting him in the back in broad daylight. As a crowd of concerned neighbors gathered at the site to demand justice, they in turn were attacked by heavily armed police, who were recorded on video firing rubber bullets and pepper balls at close range into the crowd, which included women and children. In the ensuing chaos, an unrestrained police dog charged the crowd, mauling two people. Although police claim this was an accident, neighborhood witnesses disagree. Witnesses further report that, even as the events were still unfolding, police offered to buy footage from people's cell phones, apparently to cover up the incident. Later that same night, Anaheim PD shot and killed another person under suspicious circumstances. This is at least the sixth "officer-involved" shooting in Anaheim this year alone.
Everywhere is Anaheim
by OccupyWallStreet — The revolution continues worldwide!
"Capitalism is all about private ownership, capital and profits. All else is secondary. There are laws in most countries that make it illegal to harm other human beings, however, more and more we see those laws subjugated, however brutally, to the needs of capitalists to protect their own interests."
I agree with the first statement, but one would have to include individual rights to this concept of private ownership. My life, skills, labor, and mind are my property which no other has the right to violate. Without accepting this, then all other forms of ownership come into threat which could lead to the unraveling of the system in itself.
I also agree that these laws are being subjugated, but this is not an inherent characteristic of a capitalistic system that treats human capital just as importantly as every other. Where the problem lies is when laws are created or changed to favor certain forms of capital over other. This is more a flaw of a the legal framework that views physical capital and financial capital as more important than the individual.
In this understanding, killing striking workers would be a violation in the same way as destroying a mine. Both are unacceptable. It is not capitalism that is causing leaders to be used in this destructive way, but their personal ignorance and/or corruption.
In the Rockefeller example, he should have been punished severely to the point where it places his livelihood under a great threat. He had no right to violate the worker's capital (their lives).
It would be much appreciated if I could get a critique of this line of thinking.
Is thinking of a human life as an incredibly valuable form of capital fundamentally flawed? Shouldn't this form of capital be respected under law in the same way as the others? Wouldn't laws that undermine human capital be fundamentally inconsistent with capitalism? If so, wouldn't the problems lie in legislature not capitalism?
Is thinking of a human life as an incredibly valuable form of capital fundamentally flawed?
Labor is not capital under capitalism. It is a commodity. The labor market is treated as a commodity market. That is the issue.
Non-financial capital is the fixed capital resources (capital goods and RE) resulting from investing financial capital at risk in the expectation of future reward commensurate with the risk. Land is now generally lumped together with capital goods as non-financial capital. Financial capital is funding available for investment.
Labor is a separate factor of production that is not lumped in with capital. It is treated as a commodity resource like energy and material used to produce finished goods, both capital good and consumer goods.
"The labor market is treated as a commodity market. That is the issue."
Why do you think in these terms? I see labor (the individual) as being more akin to capital seeing as humans can be productive in themselves where commodities cannot be.
Perhaps relatively low skilled labor can be held in this esteem, but the individual has the ability to improve their being on their own where a commodity clearly cannot.
"Labor is a separate factor of production that is not lumped in with capital. It is treated as a commodity resource like energy and material used to produce finished goods, both capital good and consumer goods."
Labor in itself can be viewed as a finished good. At birth, our capacity to survive nevermind create still needs to be developed. This process renders a person much more than just a commodity.
Maybe it is inappropriate to lump humans strictly into a classification with capital, but I find it just as inappropriate to place it with commodities.
As a worker do you consider yourself a commodity? I sure do not.
In studying the USSR, I see this view of humans as commodities as being more prevalent given the level of state control, lack of freedom, and individual rights.
If you agree with this, than surely this perception cannot be one that is merely attributable to capitalism. In either case, I think it comes down to the level of control exerted over the individual. Regardless of where this control resides from, the state or private entities, once humans are deprived of the ability to make a living on their own, they become more susceptible to commoditization.
Rafael, you can look at it anyway you like. I am just saying how laissez-faire looks at it. Moreover, the business lobby in the US has been able to incorporate this into the institutional rule, and it is trying to extend this influence further as we write by attacking public unions and public employment.
The capitalists' dream is a labor market made up solely of individuals who do not cooperate or even communicate with each other, since they know that this tends to undermine labor bargaining power, which is necessary for labor to be a pure commodity. Moreover, they do their to undermine the social safety net as much as they can to make workers dependent on business for sustenance. Financial capital also does all it can to curtail govt money creation so that workers will be dependent on private credit, thereby creating debt serfs.
If you agree with this, than surely this perception cannot be one that is merely attributable to capitalism
Capitalism is restrained in mixed economies that are social democracies by the govt through voters demanding that their elected representatives rein in the freedom of capital to exploit and control workers. Capitalists and rentiers complain that this amounts to socialism and will result in totalitarian communism taking over in the US.
"I am just saying how laissez-faire looks at it."
Whose version of laissez-faire? Certainly not mine, seeing as individual rights are paramount to a my understanding of such a system.
"Moreover, the business lobby in the US has been able to incorporate this into the institutional rule, and it is trying to extend this influence further as we write by attacking public unions and public employment."
This in itself is inconsistent with Capitalism and more closely related to Corporatism.
"The capitalists' dream is a labor market made up solely of individuals who do not cooperate or even communicate with each other, since they know that this tends to undermine labor bargaining power, which is necessary for labor to be a pure commodity."
Again, I consider myself an aspiring successful capitalist (self employed) and this could not be further from my dream. If anything, I wish for people to develop their skills even more. This will inevitably empower them, but in doing so they will have the ability to do incredible things for society. This is my dream purely for self reasons. By having people aspire to succeed, it increases the chances that I will live in a much better world going forward.
To marginalize a worker's ability to better themselves by interfering with social interactions for the sole purpose of reducing their bargaining power is incredibly short sighted. That could potentially devolve into an inferior society full of dependence. As a long term thinking capitalist, this is more of a nightmare than a dream.
"Moreover, they do their to undermine the social safety net as much as they can to make workers dependent on business for sustenance. Financial capital also does all it can to curtail govt money creation so that workers will be dependent on private credit, thereby creating debt serfs."
Again, this has more to do with the government's failure to do its job. It would have been one thing to never have promised the safety net in the first place, but seeing as the government did, it is their duty to uphold these promises. If anything, we chose to have a society that employs a social safety net to remove the worst case scenario from the table. This in itself fosters a risk taking that can be worked into a capitalistic society. If we find a better way of removing that worst case scenario, then even better! It is something to aspire to.
Your last point is another failure of government to act in its role on societies behalf. The United States is a currency issuer. The US can never go bankrupt. The idea is ridiculous. Yet, politicians including both political presidential candidates fail to inform the public of this! Instead, it sickens me to think that they actually argue economic situations that could never forcefully come into existence! This is government incompetence not an inherent flaw in Capitalism. If the private financial interests have captured the government, then we live in a corporatist society.
"Capitalism is restrained in mixed economies that are social democracies by the govt through voters demanding that their elected representatives rein in the freedom of capital to exploit and control workers. Capitalists and rentiers complain that this amounts to socialism and will result in totalitarian communism taking over in the US."
Clearly, this is not working in the US seeing as we have politicians who are perhaps purposely misleading the public on our monetary possibilities. We have a society that has something that resembles market tendencies, but to say that this is still a Capitalist society is a stretch. Think about this fall's elections. Are these really choices? I don't want to vote for either. I would rather have Mike Norman run for president, or Edward Harrison, Stephanie Kelton. As a young man it really is disheartening that I won't be able to vote for one person who understands how our monetary system works.
Sam,
Suggest (even as a thought experiment) check out how things often breakdown along class/equality vs "fairness" lines within humanity.
There is something up there...
rsp,
Whose version of laissez-faire? Certainly not mine, seeing as individual rights are paramount to a my understanding of such a system.
Laissez-faire (free market) means NO govt intervention in economic matters. Rights are political, legislated and enforced by law.
Your view is your view. It's not what is is understood by "capitalism" in political economy.
Under free market capitalism, prices would be set freely and supply and demand allowed to reach their point of equilibrium without intervention by the government. Productive enterprises would be privately owned, and the role of the state limited to protecting the rights to life, liberty, and property.
Wikipedia
Capitalism along with govt intervention is a mixed economy and markets are not free but regulated.
"Whose version of laissez-faire? Certainly not mine, seeing as individual rights are paramount to a my understanding of such a system."
This comment was in response to your your view of the commoditization of labor being inherent in capitalism. An oppressive entity would need powers that violate individual rights in order to succeed in forcefully reducing labor into a commodity. This is inconsistent with free market capitalism as one can see in the definition you have provided.
"Capitalism along with govt intervention is a mixed economy and markets are not free but regulated."
As I've stated above, the US is clearly not a capitalist system, but instead a mixed economy. There is no disagreement here in that respect. In actually, I think capitalism is a utopian idea in its truest form.
The problems that we have discussed are more readily caused by government capture rather than free markets. You can see examples where certain private sector entities will use the capitalistic traits of this economy to compete in becoming incredible wealthy and powerful only to then turn and alter laws to limit future competition.
In a capitalist economy, profits are sought after, but incredibly difficult to keep seeing as low barriers to entry will allow new entrances to compete for them by driving down prices.
For a powerful entity the question than becomes, is it less costly to compete or to pay off law makers in order to induce them to pass favorable legislation that will curb competition.
I am not arguing in favor of capitalism because I can't ever see this as actually happening. What I am arguing is that if we are to have a mixed economy, the populace should be made aware that many of our problems can be solved if the government worked more fairly. This government could start by speaking more truthfully about how the monetary system actually operates seeing as society decided that they should be in charge of it.
Could you imagine the type of conversations that could be fostered? I attempt to have them now with my family and friends, only to be rejected because these ideas are being contradicted by our own government. This
Nice summary:
"Clearly an improvement in miners’ living conditions is essential. How can we demand clean air from our cars at the expense of the health of those who mine the platinum that makes it possible?
Share prices will fall more if these actions are taken. But they have already fallen lots, and we can have no sympathy with those who profit from workers’ misery and death. They should have invested with more concern for decency and ethics in the first place.
So we will watch this unfolding of what I believe is a key turning point in South African mining and politics. And refrain from share purchase in Africa and other places where there is blatant exploitation."
http://ithinkmining.com/2012/08/18/more-on-south-african-platinum-mine-deaths/
Defintion
"Under free market capitalism, prices would be set freely and supply and demand allowed to reach their point of equilibrium without intervention by the government. Productive enterprises would be privately owned, and the role of the state limited to protecting the rights to life, liberty, and property."
"Rafael, you can look at it anyway you like. I am just saying how laissez-faire looks at it. Moreover, the business lobby in the US has been able to incorporate this into the institutional rule, and it is trying to extend this influence further as we write by attacking public unions and public employment."
To be more clear, by the definition you provide, the latter two statements are inconsistent with one another.
To be more clear, by the definition you provide, the latter two statements are inconsistent with one another.
Yes because we have a mixed economy. Business interests are always lobbying for purer capitalism in the name of "free markets." What this means for labor is being put in a position to have to accept the offered wage. This is treating labor as a commodity rather than as an equal factor. More correctly the close to the bottom of the scale that one proceeds the more that labor is treated as commodity, and the closer to the top on gets, the more monopoly power that labor garners, hired management being considered labor — although I am sure that top management considers itself as capital rather than labor and their compensation as capital investment.
Man, when perfected, is the best of animals, but when separated from law and justice, he is the worst of all.
— Aristotle, Politics, I.1253a31
Tom I couldn't agree more.
"Business interests are always lobbying for purer capitalism in the name of "free markets."
The truth in this statement is infuriating because it destroys the ideals of capitalism. Throughout the crisis capitalism has been demonized for the very things it works to ensure against. Yet, unless someone studies the essence of capitalism closely one would be tricked into thinking that free markets are the problem. This shifts the public's focus away from the abusive entities who have successfully lobbied the government in curbing competition. These markets (as seen in big finance) are anything but free.
In doing so, labor is disadvantaged as fewer firms come into existence that would ended up competing for their services. Labor and class mobility slows markedly as it becomes extremely risky and costly to start an enterprise on your own. Even the cost of educating oneself "formally" becomes onerous seeing as elevated unemployment rates create massive risks in finding a job that will offset the costs.
In a sense, by reducing the pace of class mobility, abusive lobbies have created the conditions necessary to accelerate the commoditization of lower skilled labor as you have described so eloquently. This is one of the flaws of having a captured government in a corporatist economy.
@ Rafael
Agree.
Man, when perfected, is the best of animals, but when separated from law and justice, he is the worst of all.
— Aristotle, Politics, I.1253a31
It pains me to read this quote because of how much potential is being wasted around the world due to this economic malaise. If we only always respected the law and justice, while being intellectually honest with one another, we could all be made better off. That is why it is so incredibly short sighted to circumvent these protections in order to gain in the short run.
With that said, I am still incredibly optimistic for the future because of the amazing talent I see in my generation.
Rafael this is the same point of view of those who defend that the soviet union wasn't true socialism.
The problem is ideals don't match with reality because you always have humans standing in the middle.
I can empathise with your ideals, I can empathise with 'socialist' ideals as well. Both are looking for human progress and evolving, and I'm a progressist above anything else (I mean I believe in and want human progress and evolution).
But reality is we have dysfunctional individuals 'breaking' the path to progress undermining coexistence and society. Some of these dysfunctional individuals (probably 'produced' by evolution and variability) will prevent any realization of ideals in a practical way.
So this is way 'capitalist' (or corporatists, or psychopaths) will try to 'commodificate' the labour market instead of considering it more akin to a form of capital 8what it should, and the most important way of capital). Indeed we have seen a push up in this way for a long time, from the creation of obedient wage-slaves at colleges without any sort of critical thinking to the production of mechanical 'consumers' by marketing methods and mass psychology.
Indeed we have seen a degradation of human capital and it still is going on.
"But reality is we have dysfunctional individuals 'breaking' the path to progress undermining coexistence and society. Some of these dysfunctional individuals (probably 'produced' by evolution and variability) will prevent any realization of ideals in a practical way."
I agree. In considering myself a progressist as well, I have an interest in attempting to understand why an individual would look to impede on this human evolution.
"from the creation of obedient wage-slaves at colleges without any sort of critical thinking to the production of mechanical 'consumers' by marketing methods and mass psychology."
This angers me because many of my closest friends and former colleagues knowingly succumb to this way of life without making any attempt to change their situations. They openly admit to resigning themselves to a sub-par existence because individual progress seems too difficult. On top of this, they are satisfied in deriving their thoughts by outside influences rather than reasoning for themselves. This is intellectual laziness.
Both groups are at fault for this relative degradation of human capital.
Raphael: This angers me because many of my closest friends and former colleagues knowingly succumb to this way of life without making any attempt to change their situations. They openly admit to resigning themselves to a sub-par existence because individual progress seems too difficult. On top of this, they are satisfied in deriving their thoughts by outside influences rather than reasoning for themselves. This is intellectual laziness.
Some of my frields who are business owners and politically pretty far on the left complain that they would like to compensate their employees better but cannot do it and remain competitive especially in a world in which workers in developed countries are competing against large companies taking advantage of economies of scale and workers in emerging countries where worker compensation (wages and benefits) and protections-safety net are so much lower than the US. This is a race to the bottom if left to free market competition.
"Some of my frields who are business owners and politically pretty far on the left complain that they would like to compensate their employees better but cannot do it and remain competitive especially in a world in which workers in developed countries are competing against large companies taking advantage of economies of scale and workers in emerging countries where worker compensation (wages and benefits) and protections-safety net are so much lower than the US. This is a race to the bottom if left to free market competition."
In terms of the wage disparities, the price of labor in emerging markets are being suppressed artificially. In China, the currency is pegged to the US dollar. This (aside from other factors) contributes in aiding companies who are able to take advantage of this monetary policy. Unfortunately, your friends must compete with them in order to produce at similar costs. The markets really are not free in any case.
As for benefits, I can't understand why companies are left to bare the cost when you have a monetary sovereign who could implement a program that would transfer these liabilities onto its balance sheet. Certainly this would help businesses immensely in bringing down the cost of labor which would allow them to hire at an increased rate. This would involve fiscal policy which is badly needed anyways as the private sector works to reduce their debt levels that they incurred during the bubble years. This in itself would increase demand and hiring as debts are drawn down.
We can acknowledge that these economic systems include markets that are not really free because we prefer a proactive government. Yet, leaders then refuse to allow the government to engage in economic activities that would be extremely beneficial relative to the current reality out of some misplaced fear that the US is going to go bankrupt.
Labor worldwide is clearly getting the short end relative to capital in the fiscal and monetary policy department.
We live in a world full of mixed economies where governments intervene immensely when setting economic policy; yet here in the US wages as a share of GDP are at an all time low in an era of record profits. Some where along the way competition for profits is being hindered because these huge profits should in theory be a signal for new entrances in markets.
What's happening as labor gets commoditized globally is that workers are not only feeling wage pressure, but firms are less willing to contribute to benefits and coordinating lobbying efforts to reduce the bargaining power of labor, contributions to pension funds and the safety net, and worker protections liked OSHA. This is therefore a race to the bottom with workers in general being isolated as individuals and being pitted against each other by coordinated efforts of firms, e.g., through lobbying organizations like the US Chamber of Commerce and ALEC, and now super-PACs in the US.
The neoliberal doctrine of free markets, free trade, and free capital flow is resulting in a system in which workers have no more influence over their market price than bananas, which is exactly the plan of capitalists, who are just "maximizing shareholder value" as they are supposed to be doing. No one is at fault.
It is a breakdown of the capitalistic system that is built into it, as it chokes off demand, tends toward monopoly and reduces the rate of profit on production, thereby encouraging rent-seeking. It is not by accident that finance capital over overtaking industrial capital. It's become more profitable.
"workers in general being isolated as individuals and being pitted against each other by coordinated efforts of firms, e.g., through lobbying organizations like the US Chamber of Commerce and ALEC, and now super-PACs in the US."
"The neoliberal doctrine of free markets, free trade, and free capital flow is resulting in a system in which workers have no more influence over their market price than bananas,"
If your first statement is true (I agree) than your second statement must be false. If entities are allowed to lobby the government for economic favoritism, than the government is enacting economic policy. We allow the US government to engage in fiscal and monetary policy. As a result, we do not have free markets, free trade, or free capital flows. We have regulated markets, regulated trade, and regulated capital flows.
A regulated market and economic interference by the government is inconsistent with capitalism.
As for your last statement I would be in complete agreement if you stated that this is a breakdown of a mixed economy.
In order to blame capitalism for today's current economic predicament, we would need to live in a capitalist economy first. We clearly do not.
Evidence, as seen in today's world, suggests that a mixed economy where government has the ability to influence economic matters lends itself to economic favoritism and regulatory capture.
I would rather argue this point, seeing as capitalism only exists in theory in today's world.
Raphael, "free markets, free trade and free capital flows" is a "neoliberal doctrine," or should I say "dogma" that sounds good but fails on inspection of how it actually being used as a rhetorical device to get legislation, regulation and government favors that tilts the playing field away from fair markets and fair trade, and skews use of international capital flow toward rent-seeking. It's just a con job that plays on the meaning of "freedom."
Tom,
Believe me this irony is not lost on me. To game the system of a mixed economy in order to gain from favorable legislation by the government sickens me when the reasoning in favor of it involves "free markets."
Then when things go badly these actors blame the "evils of capitalism" or the "evils of government".
Free markets nor governments are inherently evil. They both can be used in a capacity that creates good in the world.
It is up to us as individuals to respect one another when we decide to coordinate. This means that we need to abide by a code of law that we deem to be fair. Once this breaks down, all systems can be used to slow down human progress.
This brings me back to Aristotle.
"Man, when perfected, is the best of animals, but when separated from law and justice, he is the worst of all."
— Aristotle, Politics, I.1253a31
The 'Class War' Speech by Prof. Noam Chomsky
http://www.youtube.com/watch?v=49J47OU2Rd8
Rafael how do we break the vicious circle?
Right libertarians say that more laisez faire will fix it all. But that's non-sense from a logical point of view: if the owners of capital (capitalists) are pushing this agenda (usually rigging governing institutions and laws) giving them more power through more free market does not seem the logical solution.
The problem is the break down of social fairness represented by the failure of governing institutions and legal systems. Until citizens seize power again and try to push for repairing institutional arrangements and social contracts we are screwed either way (more interventionism or more laissez-faire). And then an other cycle will probably begin because fundamentally we haven't fixed the issue: "out-of-control" individuals disrupting any sort of social coordination.
Mr. Chomsky's speech reinforced the follow.
"Under free market capitalism, prices would be set freely and supply and demand allowed to reach their point of equilibrium without intervention by the government. Productive enterprises would be privately owned, and the role of the state limited to protecting the rights to life, liberty, and property."
Someone may interpret this and suggest that capitalism works to limit the role of the state. My interpretation couldn't be further away from this view point. In reading this definition, the state has the MOST important task of protecting individual rights to life, liberty, and property. Capitalism cannot exist without an entity that can fulfill this role with great virtue. Seeing as humans are capable of both good and evil, I do not see this system as being possible. Capitalism is a utopian theory especially now seeing as we live in a global society which would require global coordination in determining and enforcing the equal rights for all individuals. Without this, markets can be distorted in one region of the world which by definition destroys the ideals of free competition everywhere. This system doesn't exist now and I highly doubt will ever exist in the future without humans changing profoundly.
"Right libertarians say that more laisez faire will fix it all. But that's non-sense from a logical point of view: if the owners of capital (capitalists) are pushing this agenda (usually rigging governing institutions and laws) giving them more power through more free market does not seem the logical solution."
I completely agree Leverage. To promote laisez faire would be for the government to continue with this same institutional structure. The libertarian view is a noble from my understanding. The problem is how would it be possible to arrive at their desired vision from THIS societal starting point. There is no start over button that will allows us to reorganize ourselves in the most ideal way.
"The problem is the break down of social fairness represented by the failure of governing institutions and legal systems. Until citizens seize power again and try to push for repairing institutional arrangements and social contracts we are screwed either way (more interventionism or more laissez-faire)."
Completely agree.
"And then an other cycle will probably begin because fundamentally we haven't fixed the issue: "out-of-control" individuals disrupting any sort of social coordination."
Has history ever gone through a period of time where these individuals ceased to exist? These characteristics do not solely reside in the most powerful. I have seen these types of people while studying at my university, thought out my working experience, and sports teams. In the past, I have even witnessed glimpses of this disruptive behavior in myself.
"Rafael how do we break the vicious circle?"
I do this by being a force of good in the world and that starts with developing my intellect.
In reading accounts of the past, it always strikes me how much the world progresses regardless of whatever interference ails it at the time. I have a feeling that the future will be incredibly bright. Even the present shocks me when I encounter truly incredible people innovating and thinking in mind-blowing ways. Even this conversation with Tom and yourself has given me immense confidence. Can you tell that I am an extremely optimistic person?
Adam Smith's The Wealth of Nations is still the most quoted economics book. Smith presents a very simple model of capitalism that is still the basis of the capitalistic model. In the abstract, it sounds good, but even Smith recognized, as Chomsky says, that the state has the role of defending it territory, preserving law and order, and enforcing the rule of law wrt life, liberty and property. He also recognized the need for public investment in public goods that the private sector is either unable or unwilling to provide, such as infrastructure, without which commerce is at a disadvantage.
At the time Smith wrote, England was in the transition from the late feudalism of manorial system to a capitalistic industrial economy based on manufacturing, where the factory was replacing the manor. Until this point, government has been in control of the state including the land and the economy. His emphasis was on reducing the role of the state in order to allow competition among free agents. That, of course, was a huge advance over the system that had been in place globally for millennia.
However, at the time that Smith wrote society was much less complex than it has become and capitalism was still craving out its niche in the traditional economy, which was still chiefly agricultural of necessity. The age of invention and discovery was still in its infancy.
To compare Smith's world, the context in which he thought and wrote to our own is simply myopic. They bear little resemblance. even at that time, there was a great deal of unequal distribution of wealth, education, and access. The idea that there would be free competition among the agents of the factors of production was a stretch even then. Now its is just bonkers.
We have to deal with the context of today's world, which is very different from Smith's and also very different from the developers of neoclassical economics built on Smith's basic model and increasingly formalized but not changed essentially.
In the first place,the assumptions are simply not applicable so the models are not representational. Secondly, there is no way to undo hundreds of years of tradition, convention, law, precedent, and so forth, in country like the US, owing to vested interests, which would just hijack the project for their advantage, so that in reality there would be even less freedom other than in name only.
Tom thank you for that insight. I agree.
It is much easier to argue in favor of an institutional set up without providing a plan as to how to get something as complex as society to that point from here.
Then one would have to provide a way of protecting this ideal vision from those who seek to hijack such a project.
"He also recognized the need for public investment in public goods that the private sector is either unable or unwilling to provide, such as infrastructure, without which commerce is at a disadvantage."
What would Adam Smith think of our present government's unwillingness to provide public investment in public goods? It is almost as if neither the public nor the private sector feel the need to invest in such things in our present economic system. Now this is myopic!
"Some of my frields who are business owners and politically pretty far on the left complain that they would like to compensate their employees better but cannot do it and remain competitive especially in a world in which workers in developed countries are competing against large companies taking advantage of economies of scale and workers in emerging countries where worker compensation (wages and benefits) and protections-safety net are so much lower than the US. This is a race to the bottom if left to free market competition."
This should provide much clarity. Mr. Pettis is a great analyst.
http://globalpublicsquare.blogs.cnn.com/2012/08/29/dont-get-hung-up-on-the-renminbi/
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