Saturday, April 28, 2018

PCR- Capitalism Works For Capitalists

I was very surprised about PCR's rant about capitalism, because it's as if nowadays its taboo to criticise it too much. We certainly don't want communism, but that doesn't meant to say we love capitalism all that much either, apart from the mom-and-pop small businesses. As Paul says, today's capitalism is non stop work 24/7, and now with machines going flat out 24 hours 365 days of the weak as well. This is the Protestant Work Ethic on steroids, all work with no rest or play.

Calvin's followers were puritans who led a simple life where displays of opulence were frowned upon. Calvin said that those who were saved were chosen by God before they were even born, so his followers asked him how do they know if they have been chosen, and he said, by how successful they were? So the Calvinists worked very hard and built up their businesses by plowing all their profits straight back in as they had no interest in being rich, and so modern capitalism had formed. Before that, people just earned what they needed to get by. It sounds great!

The modern way of life can destroy family life and friendships as people often spend so long at work. Mass immigration whacked up house prices meant that people ended up with huge mortgages just so they could get somewhere to live, and after that they become slaves to their work, petrified of losing their job. I guess we all want the new kitchens and bathrooms, the new car, and the expensive holidays, but is all the hours at work worth it, plus with the toll on our health?

Primitive life was certainly hard with its diseases and famines, and we definitely don't want to go back to that, but if your house ever burnt down everyone in your village would help you build a new one, and no one worried about losing their job, or getting their kids into the right schools so they don't get left behind in the rat race. People were were never lonely and were happier, but now one in ten people are on antidepressant drugs and many others take some kind of psychiatric medication, like sleeping pills and tranquillisers. It's big business for the pharmaceutical industry, the capitalist merry-go-round. 

PCR is the opposite of a neoliberal, he's socially slightly on the right, but economically slightly on the left.   KV


In a civilized country, such as Japan, the view enjoyed by an owner is part of his property rights, but not in barbaric America. A Gulf view is something that can be appropriated by an outside real estate speculator who puts up a four-story McMansion in front of a resident’s property. By blocking the view, the outside real estate speculator can transfer value that was in the resident’s property to his speculation.
Moreover, the activities of outside real estate speculators overdevelop the area and create congestion, which uses up residents time in travel and makes an evening out a traffic ordeal. Nothing is the same. Beach communities give up and die. They are replaced with commercial enterprises.
According to economic theory, which is essentially a cover for looting and theft, free markets bring resources to their most highly valued use. This is not science. It is an ideology. It only works if there are no external costs or, if there are, the costs are compensated to those on whom they are imposed.
But free market real estate speculation does not compensate any of the costs that it imposes on others. Indeed, a case could be made that the external costs of real estate speculation in south Walton county exceed the value of the speculations constructed. The value of the communities that are destroyed are not counted as an offset to the profits of the activities that destroyed the communities.
Not only have many existing properties lost their Gulf views and been devalued, not only have people lost time from their lives in traffic congestion, not only have people’s enjoyment of their properties been reduced by endless construction and party house noise, not only have people’s finances been impacted by massive increases in property taxes and wind insurance, reflecting the high values of the McMansion $20,000 weekly rentals and high density, not only are people impacted by the cost of sewage fees replacing their septic tanks and by the tax burden they must shoulder for widening the two-lane highways into four lanes in order to provide some semblance of hurricane evavuation for the overdeveloped areas of south Walton county, they are also impacted by experiencing the loss of their community. It is similar to losing one’s village or town to a wartime bombing attack. What you knew and was part of your life is gone.
Highway widening goes through the middle of many communities, essentially destroying them. A family that lived far back from the road now has traffic passing through the front yard.
All of these costs, and there are more, are imposed on existing peoples and communities by outside real estate speculators. The speculators do not, and never will, live in the communities that they destroy. They are only concerned with their profits, and these profits originate in the ability of the speculators to impose the costs of their projects on every one else.
Can you imagine the Chairman of the Federal Reserve Board, the Secretary of the US Treasury, the Chairman of the Securities and Exchange Commision all testifying before Congress that markets are self-regulating? Their testimony was just prior to the collapse of unregulated financial markets requiring trillions of newly printed dollars by the Federal Reserve to “save the system.” In their testimony ignorance spawned by ideology spoke through the mouths of these high public officers.
If markets are self-regulating, how is it possible for capitalists to impose their costs on third parties who do not share in the profits, but who experience enormous costs? If markets are self-regulating, how is it possible for real estate speculators to destroy entire communities?
Capitalism is a system whose costs in many instances exceed its benefits. It is often the case that capitalist profits owe their existence to the ability of capitalism to impose its costs on others. If the full costs of development in south Walton county had to be borne by the developers, much of the development would not take place.


Matt Franko said...

sounds like he's bitter the plantations got all cut up and sold off in parcels...

Andrew Anderson said...

So the Calvinists worked very hard and built up their businesses by plowing all their profits straight back in ... Kaivey

Proper public policy is what we should be interested in and public policy is largely a determinate of private behavior anyway; e.g. government-privileged private credit creation drives people into debt and is a major cause of the boom-bust cycle and economic injustice.

Btw, the Calvinist view that God knows the identity of EVERYONE who shall be saved before they are even born is unwarranted by Scripture though God certainly knows the identity of SOME who shall be saved, (e.g. Jeremiah) before they are born The rest of us should not presume that wealth or the lack of it indicates anything about one's spiritual condition.

Andrew Anderson said...

If markets are self-regulating, how is it possible for capitalists to impose their costs on third parties who do not share in the profits, but who experience enormous costs? Paul Craig Roberts

It's possible because those with equity, i.e. "capitalists", can leverage that equity via loans of what is, in essence due to government privileges for private credit creation, THE PUBLIC'S CREDIT BUT FOR PRIVATE GAIN.

If markets are self-regulating, how is it possible for real estate speculators to destroy entire communities? Paul Craig Roberts

Even assuming we had a genuine free market, which we don't, some limits on it are proper, e.g. no Hebrew family could permanently lose their farm, vineyard, orchard, etc. since it would automatically return to their ownership after 50 years or any year earlier if they could come up with the redemption price which was linearly proportional to the years remaining until the next 50 year Jubilee (see Leviticus 25).