Wednesday, June 28, 2017
Chris Dillow — Why libertarians should read Marx
Very good post. Of interest to all.
Marx was a libertarian of the left, that is, he was concerned with not only the individual but also the person.
As individuals, each human being is unique. Libertarians of the right emphasize this aspect.
As persons, all human beings are equal. Libertarians of the left emphasize this aspect.
Personhood is the basis of key tenets of liberalism — equality before the law and democracy as necessary for political freedom as the self-determination by a people. It is also the basis of equal rights and equal opportunity for self-development. It is fair to say that liberalism as an integrated social, political and economic theory hangs on the understanding of personhood relative to individuality and freedom.
Individual freedom needs to be tempered with personal freedom. All animals are free individually in the state of nature. Only humans are capable of personal freedom in society, and personal freedom is a necessary condition for living a good life in a good society fully.
Marx and Engels got that.
Stumbling and Mumbling
Why libertarians should read Marx
Chris Dillow | Investors Chronicle
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The bit they miss is when two individuals try to occupy the same space. That then requires a society to resolve the conflict peacefully.
The notions that matter then is respect for others. "How would you like it if..." and "After you."
Libertarianism of both strains is like driving on a road without any rules about how to deal with others fairly at the intersections.
Respect for others requires something more than 'property rights'.
Yet more evidence for my claim that marxists are just as stupid as libertarians:
"For him, capitalism – understood not as a market economy but one in which capital hired labour – was not a “natural” phenomenon but rather something that came into the world “dripping from head to foot, from every pore, with blood and dirt.” It was founded on theft and slavery "
Just take a moment to consider just how retarded this statement is. As if humans compensating other humans to accomplish tasks for themselves was something that was invented by "capitalism". The reality is actually quite the opposite as history amply demonstrates.
The 4 things that comprise the Marxist definition of Capitalist production (per wikipedia) are:
1: wage labor
2. markets
3. private property
4. profit seeking
Under this utterly sensible definition of capitlaism we can begin to see the reality. Capitalism has alwyas been with us. Its just human nature after all. There is no way to get rid of capitalism without a totalitarian state that outlaws just about all private activity and freedom. So instead of capitalism inventing wage labor as Marx says in this quote above, the 18th century theorists finally put a name on the historical evolution of human economic activity and that name is "capitalism".
Marx, the moron
Comment on Chris Dillow on ‘Why libertarians should read Marx’
There is political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics the scientific standards of material and formal consistency are observed.
Theoretical economics consists of four main approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― which are mutually contradictory, axiomatically false, materially/formally inconsistent, and which got the foundational economic concept profit wrong.
Marx, clearly, was NOT a scientist but a political agenda pusher. However, after the scientific triumphs of Copernicus, Kepler, Galileo, Newton, Laplace, Leibniz etcetera agenda pushing had to be dressed as science. This gave rise to what Feynman famously called cargo cult sciences.
What Marx did was sociology, history, storytelling, prophesy and agenda pushing. He had NO idea how the monetary economy works because he never figured out what profit is.* That is rather bad for an economist but what is worse is that After-Marxians did not spot and rectify Marx’s blunders in the past 130+ years.
What we actually have is the pluralism of provable false theories. Walrasianism, Keynesianism, Marxianism, Austrianism look antagonistic on the surface but have one essential thing in common: they are all fake science.
Egmont Kakarot-Handtke
* See ‘Profit for Marxists’
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2414301
And one more thing about wage labor.
Wage labor is by far the most fair and sensible way to organize society to accomplish large tasks. As our basic lessons about MMT teach us. The Govt can either conscript people to accomplish a task like filling out the ranks of the military, or it can pay a wage and let people freely decide whether that wage is worth the costs of joining the military.
Govts used to enforce taxes in kind, so communities owed amounts of grain or bales of wool or whatever. But this is a terrible way to provision the Govt. The values of these change all the time wrt to not only their past selves but wrt to each other. So we evolved a much more sensible way to organize the complex process of public provision. Currency taxation and free wage labor (as in people are free to choose to work for the Govt or not).
Or from the private sector POV we can talk about the legal requirements that serfs had to work for their lord a fixed number of days per week. Serfs had to provide horses and carts and tools etc to the feudal lords so that the Lord's crops could be harvested and sold (for a profit of course, like I said capitalism is just human nature). One of the radical changes of the industrial and scietific revolutions was for this historical process to change to money contracts. This allowed all of the economic and social beenfits of specialization and the labor market as we know them today, helping to vastly speed the process of revolution and the enormous improvments in standards of living and social equality.
So far from money wage labor being a great evil, its been the great revolutionary and emancipator of the working class.
Auburn says...
I buy foreclosed houses, fix them up and either rent them or sell them for a profit.
If wage labour is so great, why aren't you making a living that way?
Because he has organization and management skills ...
Because Bob, in the same way that not everyone can be in the 1% and only half the population can ever be above average, not everyone can be self employed. And if everybody cant be self employed in a 1 man operation like I am, then by definition some people will have to work for others. And if people have to work for others, the best way to accomplish that end is to have a free wage labor system where people arent coerced into working for other people against their will. (Note: read coerce in this context as actual Govt legal coercion not the type of coercion that can be said to be faced by workers because otherwise they would starve).
Obviously this brings up all the normal complaints and pay equity, working conditions, labor rights vs mgmt or ownerhsip rights etc, but none of these things would be absent in a non-free wage labor system. In any system humans design that impacts many people there will be issues of fairness, distribution, power, equality etc, these are human nature issues and not issues of the specific socioeconomic organization model.
Thanks for the kind words Franko, but an organization of 1 hardly requires much skill to manage!
Oh and one more thing Bob. I make way more money doing this than I would working for somebody else. I know this because I used to work for someone else doing the same thing I do now and instead of me just getting a share of their surplus, I get the whole surplus myself. What an evil capitalist I am.
What is your excuse for denying anyone ownership?
One very important belief that Adam Smith and Karl Marx both shared was that human progress is predicated on the accumulation of capital.
To have a free wage labour system you need a 'no deal' option. Which is where the Job Guarantee comes in. Labour then becomes free to those social entrepreneurial operations pursuing non-competitive social activities.
Neil-
I agree absolutely with your position on the necessity of the JG offer to "free" labor in your definition or use of the word, but I just want to make clear that I was using free in the sense of No-direct, legal coercion as was the case for the serfs and other various indentured servants like we had before the modern system of free wage labor (free of legal govt coercion).
Bob-
"What is your excuse for denying anyone ownership?"
What does this mean? Are you saying that by me buying the foreclosed house at the highest price, and then working 1000 - 1500 hours and spending $20K - $40K on new material in order to take the house from unlivable nightmare to fully renovated and beautiful and then rent that basically new home at below market rates (for example my brother bought an identical 1000 sq ft ranch home right next to one of mine and remodeled it almost identically and he's getting $1600 a month but I only asked for $1500) makes me the bad guy here?
Are you really saying this because if you are then I honestly dont know how to answer your question. But maybe this isnt what you meant and Im just interpreting your question incorrectly, and so I hope to get some help on what it is you really meant. Thanks
One very important belief that Adam Smith and Karl Marx both shared was that human progress is predicated on the accumulation of capital.
Right, and the same thing can be said about land in a primarily agricultural age. Land was the dominant means of production at that time.
The question is cui bono? and on what basis?
The basis is institutional.
Who is making the institutional arrangements and to whose benefit?
Based on what rationale? If any, since violence and the threat of violence is not a rationale.
To have a free wage labour system you need a 'no deal' option. Which is where the Job Guarantee comes in. Labour then becomes free to those social entrepreneurial operations pursuing non-competitive social activities.
The logic next step.
But don't stop there, or they'll be baaaaak.
What does this mean? Are you saying that by me buying the foreclosed house at the highest price, and then working 1000 - 1500 hours and spending $20K - $40K on new material in order to take the house from unlivable nightmare to fully renovated and beautiful and then rent that basically new home at below market rates (for example my brother bought an identical 1000 sq ft ranch home right next to one of mine and remodeled it almost identically and he's getting $1600 a month but I only asked for $1500) makes me the bad guy here?
Are you really saying this because if you are then I honestly dont know how to answer your question. But maybe this isnt what you meant and Im just interpreting your question incorrectly, and so I hope to get some help on what it is you really meant. Thanks
As Michael Hudson notes, there is a difference between productive investment in property improvement and land rent. It's the land rent that is the issue rather than risk-taking and return on investment.
This means that the returning on productive investment must be distinguished from land rent in asset appreciation.
And remember that the legal Govt coercion wasnt just for the serfs, part of thhe deal for the feudal lords in Europe through most of the middle ages (fucking feudalism thanks ironically to a tax law change made by the emperor Diocletian in the late 3rd century CE that effectively made tax exempt all internal estate business so the rich started to set up the own mini self contained economies to save on the general sales tax, this was the very beginnning of the collapse of centralized state power that led to fall of the Roman Empire and the beginning of the dark ages of feudalism aka the normal state of tribal human affairs) was that they must provide soldiers and later knights from their feudal populations. And the feudal lords were responsible for outfitting and training their own squadrons, and if they didnt meet their responsibilities, the King would give their land and titles to somebody else. if thats not a coercive tax in kind then I dont know what is.
And like just about all the rest of Human liberal progress, this eventually resulted in the feudal lords eventually angling to kill the system as it become more profitable to run the estate as a biz and just pay the Govt money to hire other people. After all, how many rich guys want to leave their sweet ass country estates to go possibly get killed on a miserable battle field hundreds of miles from their homes and sometimes counties?
But hey, who needs to know about history and how we got here. Capitalism is evil after all.
Ahh, the last paragraph above isnt clear enough:
"And like just about all the rest of Human liberal progress, this eventually resulted in the feudal lords eventually angling to kill the system as it become more profitable to run the estate as a biz and just pay the Govt money to hire other people. After all, how many rich guys want to leave their sweet ass country estates to go possibly get killed on a miserable battle field hundreds of miles from their homes and sometimes counties? "
While you probably cant guess from this poor paragraph, I meant to imply here that unfortunately our history has been that the so-called bourgeois group of upper middle class people got most of the legislation passed on our modern liberal values. Mainly because voting was restricted to land owning males in the early modern period, so it wouldnt be realistic for the working, non-voting class to have voted themselves more rights. They mostly got trickle down rights after the upper middle class people made it happen for themselves first.
The pursuit of power: Europe 1815 to 1914 by Richard Evans is a good book about the socio-economic and political evolution of Europe during that period.
Auburn,
I was as well.
One of the crystal clear findings from Beveridge's "Full Employment in a Free Society" is that the majority of the problems are caused by the "Free Society" bit.
Free choice causes chaos (in the systemic sense) and containing that so everything works while retaining as much freedom as possible is a heck of a challenge.
Beveridge wrote that in 1944 after seeing the effects of the 2nd World War and the horrors of Totalitarianism. Sadly we're no nearer solving the problems he noted 70 years later.
Quite Right Neil.
Hhow does that saying go? "you can have resilience or efficiency but not both" or something like that. I think the idea was that a single hierarchical entity can be more efficient than a distributed collection of different entities, but the single entity is more vulnerable to collapse because its not distributed and diversified.
Just one of the many paradoxes in the universe.
Auburn,
If not everyone can be self-employed, how many can be owners in a typical small business (2-50 workers), medium sized business (50-500), or larger (500+) ?
Not everyone would choose the ownership route, but they should have the option.
However, first things first is a JG. With that mechanism in place, experiments with worker-owned businesses can begin.
"If not everyone can be self-employed, how many can be owners in a typical small business (2-50 workers), medium sized business (50-500), or larger (500+) ?"
NObody can answer this question. Thats because the answer depends. It depends on how much profit and revenue a given number of people can generate. IF 2 people can generate $1 trillon in revenue and $500 billion in profit, that amount of money can support a great many "owners" but in the real world 2 people cannot generate as much revenue and profit as 500 people simply because 2 people can never do the same amount of work as 500.
If 2 people can only generate $10K in revenue and $5K in profit well then they wouldnt be able to support even themselves let alone multiple other "owners".
"Not everyone would choose the ownership route, but they should have the option."
Sorry but I am not obligated to share my ownership privileges with my workers. Its something I may do if my morality and financial case can be made, but for the Govt to tell me that I cant be the sole owner of my small biz would be insanely intrusive and I would vote for a republican before I ever voted for someone who had this craziness in their political platform. As for public companies, all workers already have the option to become owners of their company by buying stock. So Im not sure what would need to be changed about that specific arrangement.
"Not everyone would choose the ownership route, but they should have the option."
They do. Set up as a freelancer or get together with people and form a co-operative or other option. It's very easy to do.
Under the correct competitive environment and with regulators enforcing anti-trust vehemently the rate of profit will drop to near zero and capitalists will simply earn a wage based upon their addition to the process.
The reason it doesn't work at the moment is because labour has no alternative. When there is both an employer of last resort and a producer of last resort, capital has to add value to the process by investment, innovation and automation or their income rapidly disappears to the competition.
In reality we haven't seen what a truly capitalist system can do yet, because we never got around to euthanising the rentiers.
@ Auburn
Liberalism was bourgeois "liberalism" as a social, political and economic instittution, meaning freedom of the ownership class to exploit the underclasses and expropriate their labor and enclose the commons.
Slave-owner and breeder Thomas Jefferson saw no contradiction in piously writing all men are created equal while also owning slaves. It gets even worse from there.
"Just take a moment to consider just how retarded this statement is. As if humans compensating other humans to accomplish tasks for themselves was something that was invented by "capitalism". The reality is actually quite the opposite as history amply demonstrates."
Humans were not and are not compensated for their labor. They were at the time of Marx deprived of their means of sustenance and compelled by force to labor for sufficient food to survive. It was an affair with an established body-count underneath it.
Workers today are also not compensated for their labor. They are compensated for their marginal product, not what they actually produce. If they were profits would be minimal to non-existent.
With liberalism the choice is between fascism as the totalitarian corporate state as one extreme or totalitarian communism at the other. We've already seen the later and now the former is unfolding before our eyes.
We also got to the the totalitarianism of the market after the UK enacted the New Poor Law in 1834. Peasants were forcibly commoditized in work-houses to ensure markets could function unimpeded by social resistance. Capitalism is, ultimately, the freedom to be reduced to a disposable thing. Individuality is suppressed in the name of more efficient accumulation.
Things are f-ed up materially because we have stupid/unqualified leadership...
In reality we haven't seen what a truly capitalist system can do yet, because we never got around to euthanising the rentiers.
Hardly the only problem.
A reason that there will never be true competition in a truly capitalistic system is economies of scale. This alone leads to asymmetries that undermine perfect completion and where there is imperfect competition there is economic rent.
There has never been a truly "free market" with perfect competition and it is as idealistic as any of the utopia. But the economic liberals keep arguing that any problem with capitalism is owing to the intrusion of government on the free market process.
But even without government intrusion in markets, economies of scale would result in oligopoly.
Recall that profit is a residual after costs, including cost of organization (management) and risk weighted return on capital, which is approximately equal to the real interest rate plus the risk premium. There is no basis in cost of production for profit. Profit is the residual between cost of bringing a product to market and the market price. It is owners' share just for being an owner without contributing anything.
NObody can answer this question. Thats because the answer depends. It depends on how much profit and revenue a given number of people can generate.
The simplest rule of thumb is a business that is making a profit. If that is the case, will the business go bust if that profit is shared with the workers? Would it go bust because the business is managed democratically instead of hierarchically?
The answer should be: not necessarily.
A business that is losing money will not survive regardless of its internal organization.
Sorry but I am not obligated to share my ownership privileges with my workers.
You'll do what the law requires you to do. Besides, I didn't ask if you approve of the idea, I asked if it's possible. Marxists believe it is possible to erase the distinction between employer/employee.
Also, the Marxian definition of private property is not synonymous with personal property.
Auburn Parks said...
The 4 things that comprise the Marxist definition of Capitalist production (per wikipedia) are:
1: wage labor
2. markets
3. private property
4. profit seeking
Under this utterly sensible definition of capitlaism we can begin to see the reality. Capitalism has alwyas been with us. Its just human nature after all. There is no way to get rid of capitalism without a totalitarian state that outlaws just about all private activity and freedom. So instead of capitalism inventing wage labor as Marx says in this quote above, the 18th century theorists finally put a name on the historical evolution of human economic activity and that name is "capitalism"
Let's talk about reality. This is reality:
1: wage labor
https://anticap.files.wordpress.com/2016/11/12065.png
2. markets
http://www.cnbc.com/id/26945972
3. private property
http://taxprof.typepad.com/.a/6a00d8341c4eab53ef01a3fce2488c970b-580wi
4. profit seeking
http://stumblingandmumbling.typepad.com/.a/6a00d83451cbef69e2017c343aa22d970b-pi
No wonder Auburn Parks is so enthusiastic about capitalism. He might be just a two-bit capitalist, but he is still a capitalist. Ka-ching!
What I fail to see is why the rest of us should be as enthusiastic as he is. But that's perhaps because we are retarded. Human nature, or something.
Oh, capitalism is good:
Marikana killings
https://www.google.com/search?q=marikana+massacre
https://en.wikipedia.org/wiki/Marikana_killings
Dhaka 2012 fire
http://wpmedia.news.nationalpost.com/2012/11/bangladesh-factory-fire01.jpg?w=940&h=626
https://en.wikipedia.org/wiki/2012_Dhaka_fire
Ludlow Massacre
https://en.wikipedia.org/wiki/Ludlow_Massacre
Banana massacre
https://en.wikipedia.org/wiki/Banana_massacre
Anti-union violence
https://en.wikipedia.org/wiki/Anti-union_violence
Peterloo Massacre
https://en.wikipedia.org/wiki/Peterloo_Massacre
Paris Commune
https://en.wikipedia.org/wiki/Paris_Commune
Everything is good, provided a bunch of parasites don't need to work to make a buck, eh, Auburn?
Just one more:
Auschwitz III - Monowitz
http://www.scrapbookpages.com/Poland/Auschwitz/MonowitzHistory.html
Lotsa money to be made. Capitalism is good.
God, there's something tragically funny and fascinating in this business.
As if humans compensating other humans to accomplish tasks for themselves was something that was invented by "capitalism".
Interview: Joshua Oppenheimer, director 'The Look of Silence'
Australian Broadcasting Corporation. Broadcast: 06/08/2015. Reporter: Tony Jones
http://www.abc.net.au/lateline/content/2015/s4288632.htm
Life and death in Apple’s forbidden city
In an extract from his new book, Brian Merchant reveals how he gained access to Longhua, the vast complex where iPhones are made and where, in 2010, unhappy workers started killing themselves
Brian Merchant
Sunday 18 June 2017
https://www.theguardian.com/technology/2017/jun/18/foxconn-life-death-forbidden-city-longhua-suicide-apple-iphone-brian-merchant-one-device-extract
The day when three NASA astronauts staged a strike in space
Michael Hiltzik
http://www.latimes.com/business/hiltzik/la-fi-mh-that-day-three-nasa-astronauts-20151228-column.html
If there's a God, I have to thank him Auburn Parks and I don't live in the same country. Frankly, I can't imagine a meeting between us ending well.
"A reason that there will never be true competition in a truly capitalistic system is economies of scale."
That's what your anti-trust regulators are for. Once you get to oligopoly stage you have two choices - break them up to maintain competion (with the efficiency loss there), or nationalise (with the efficiency loss there).
There is always a trade off between efficiency and resilience. The trick is to keep the power output at the peak of the curve - not get to one end.
" It is owners' share just for being an owner without contributing anything."
It is the owners share for organising the operation - the wage of the capitalist.
I don't buy the 'interest rate' argument. There are no interest rates. Just a risk calculation. That is factor into the size of the wage. You get a bigger wage if the risk pays off.
"Would it go bust because the business is managed democratically instead of hierarchically?"
Generally it does. Even in functional co-operatives and partnerships they create a management board as the size grows. Power is delegated to managing partners. If they don't the system is overwhelmed by the exponential growth of the communication pathways.
I have the largest equal wage co-operative in Europe just down the road. I'm quite familiar with its management structure.
Magpie do you advocate for a JG or a UBI?
"It is the owners share for organising the operation"
Marx people value organization and management skills at zero.... because they don't have them... look at Venezuela...
Everywhere Marxism went in ends up f-ed up materially.... you guys are conflating non material issues with material issues when you bring up "Marxism"...
You're conflating Philosophy with Material Science...
Magpie, isn't China (where the iPhone slave factory is) Marxist/Commie ?
"Would it go bust because the business is managed democratically instead of hierarchically?"
Generally it does.
In an otherwise capitalist system that is institutionally biased. Non-profits work because they are privileged institutionally.
In addition, there is no single way to organize the difference between hierarchical and consensual organizations. There are lots of options, from the strict chain of command system of militaries to completely consensual organization of some communes, which in my experience can work on a limited scale but I have not seen it scaled and most attempts of which I am aware did not work very successfully very long.
I have the largest equal wage co-operative in Europe just down the road. I'm quite familiar with its management structure.
How large is it?
Most businesses are small, aren't they? They don't make the news or sell shares.
Management becomes part of a worker's role. For those who want nothing to do with management, by all means take a traditional wage position. Workers earning a large salary are likely to be content, workers earning minimum wage are likely to want a better deal.
@Bob
I answered your question about reform in the other discussion. :-)
@Magpie
Your posts are not showing up in the RSS feed. Strange...
Bob said...
Your posts are not showing up in the RSS feed. Strange...
Shit happens, I guess. :-)
Tom Hickey
Your profit theory is false and because of this your whole economic theory is false and as a consequence all your policy proposals are worthless/counterproductive. For details see:
Profit and stupidity
http://axecorg.blogspot.de/2017/06/profit-and-stupidity.html
Economists: scientists or political clowns?
http://axecorg.blogspot.de/2017/06/economists-scientists-or-political.html
Egmont Kakarot-Handtke
Don't blame the messenger.
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