Saturday, August 22, 2015

Branko Milanovic — Did socialism keep capitalism equal?

I think that one should keep these three channels separate. In my forthcoming book, unlike Albuquerque Sant’Anna, I do not do an empirical analysis of the three channels, but just mention them, and see them as one of the contributory factors to the Great Levelling. I do not think that they were the only factor (no more than I see the accelerated technological progress, or globalization, as the sole factors behind the inequality reversal since the 1980s). Actually, I argue (but I am not going to give away the whole story here in a blog) that the Great Levelling was driven by the political forces emphasized by Piketty (war destruction, high taxation, hyperinflation) as well as by the benign forces emphasized by Kuznets (increase in the education level combined with a reduction in the education premium, aging of the population and thus greater demand for redistribution, end of the transfer of labor from rural to urban areas). There is a way that they can be “reconciled” but for that you will have to buy the book next year.

Here I want however to bring to the fore the work which looks at the whole issue somewhat differently, and does this in a sense from a very global perspective. Indeed Communism, was a global movement. It does not require much reading of the literature from the 1920s to realize how scared capitalists and those who defended the free market were of socialism. After all, that’s why capitalist countries militarily intervened in the Russian Civil War, and then imposed the trade embargo and the cordon sanitaire on the USSR. Not a sort of policies you would do if you were not ideologically afraid (because militarily the Soviet Union was then very weak). The threat intensified again after the World War II when the Communist influence through all three channels was at its peak. And then it steadily declined so much that by mid-1970s, it was definitely small. The Communist parties reached their maximum influence in the early 1970s but Eurocomunism had already expunged from its program any ideas of nationalization of property. It was rapidly transforming itself into social democracy. The trade unions declined. And both the demonstration effect and the fear of Soviet Union receded. So capitalism could go back to what it would be doing anyway, that is to the levels of inequality it achieved at the end of the 19th century. “El periodo especial” of capitalism was over.
A factor but not the only factor.

Neoliberals ("capitalists") are linear and categorical thinkers rather than reflexive (adjustment to feedback) and dialectical (oppositional) thinkers. They don't get that socialism arose historically as a reaction to capitalism and that neoliberalism is now provoking a similar reaction globally.

Global Inequality
Did socialism keep capitalism equal?
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace


Schofield said...

David Sloan Wilson, the sociobiologst, makes teo interesting statements in his new book "Does Altruism Exist?" The first statement is:-

"Selfishness beats altruism within groups." Altruistic groups beat selfish groups. everything else is commentary."

The second statement is:-

"Evolution has no foresight."

In other words Nature automatically corrects without thinking the selfish excesses of ideologies like NeoLiberalism by human beings moving to support the more mutualistic values of Democratic Socialism and when the latter becomes corrupted by the excesses of autocratic leadership the pendulum swings back again. In plainer words human beings are bivalent loving to dominate but hating being dominated all of which is resolved over time by an automatic wave movement as outlined above.

Random said...

Schofield, what the hell are you talking about? Crazy stuff. "Nature"??

Schofield said...

Try reading the book you might learn something including less arrogance!

Ignacio said...

"human beings are bivalent loving to dominate but hating being dominated"

Yep, this can be seen more clearly on childs. Socialization is used to tame this behaviour, as if we all acted like this we would not be able to live in society, and we would fail (as humans cannot survive on their own Robinson Crusoe little fantasy libertarian isles).

But at some points in history one trend dominates the other (we are coming from hyper-individualism one, started decades ago). Also is ofc, not universal, and there can be competing systems/groups. And some societies are more collectivists than others (although that may be context dependant and them being at different parts of the cycle).

What is apparent is that this cyclic natures is hastening due to higher information transfer.

Anonymous said...

I heard of one study where two babies are placed in an empty room: the general behaviour was to smile at each other, coo, enjoy each other's company, communicate. Then a toy was placed between them. Most of the time one ended up clocking the other one with it, as a struggle for posssession ensued …!

Anonymous said...

.... with the babies, racial characteristics including skin pigmentation were not an issue – they still generally either communicated well, or struggled for possession. With adults, the 'toy' can become more than physical: either an emotion ('hate' where one racial group tries to destroy another – no clear thinking involved) or a concept (where the group involvement is ideology – once again illogical in the context of 200,000 years of evolution); or the gratification of some 'I' or group of 'I's (always in contradistinction to the 'soul' of the individual, group or nation). Therein lies the psychology of the future.

All seeking contentment (4.6B of them in this world; the formulae extant all relating to either physical, emotional, mental or personal gratification – no wonder it is a struggle!). When the baby cries, it is wet, hungry, uncomfortable: when everything is just right, it is content and smiles, plays, stretches, exercises. Nobody teaches it how to do that. It doesn't have to have a reason to smile.

I wonder if we are still like that? When possession of something that is outside the baby eclipses the contentment already existing inside the baby, it all goes downhill from there!

Simple conclusion: if the need for contentment arise from within, then the best place to look for it is ….... (?) After 200,000 years on the road – duh???????

Peter Pan said...

Is contentment another term for 'failure to thrive'?

Peter Pan said...

In my experience, avoidance is a strategy that helps me achieve contentment. By minimizing that which I find stressful or unpleasant, I find myself in a situation that is more amenable to contentment.