This socialist or communist doctrine of “class struggle” fails entirely to take into account the essential difference between the conditions of a status or caste society and those of a capitalistic society. FULL ARTICLE by Ludwig von Mises
Source link: http://archive.mises.org/13474/the-class-struggle/
The Class Struggle
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“In a status society the individual inherits his caste membership from his parents, he remains through all his life in his caste, and his children are born as members of it. Only in exceptional cases can good luck raise a man into a higher caste. For the immense majority birth unalterably determines their station in life.”
Let’s stipulate that this view is outmoded, and there are no strictly binding limits to the heights an individual might attain.
Let’s also acknowledge that there are in fact a few barriers to be surmounted. A child of privilege, even a relative village idiot such as a Dan Quayle or a George (W) Bush finds the commanding heights rather easy to capture. While a child of the coal country can’t even find a good school to attend until he or she is into his twenties. And that gifted student only emerges from it years later and riddled with debt. It’s hard to go scouting for a good school when your family can’t afford a computer, or even to keep its car running.
So there are in practise classes, albeit loose ones with some class motility. And the investor class has some natural disparity in goals with the working class. They would, for example, prefer to maximise profits over wage income. And so it would be natural that they see any attempts toward economic management from outside the firm as being meddling of the very worst sort. They are in the driver’s seat and want to remain there.
Demonstrably, they use their position and lobbying money to influence legislation in their favor. So when one disparages government regulation, one disparages those individuals.
Flailing against “the communists” and “the socialists” obfuscates these natural differences in orientation between owners of capital and sellers of labor. And paints the goals of employment seekers as being trifling, unimportant to the overall workings of the “economy”. The fact is, we do have a pie, one to be cut into many pieces. And the one percent among us get by far the biggest shares.
“In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1% of households had an even greater share: 42.7%.”
And this:
“So far there are only tentative projections — based on the price of housing and stock in July 2009 — on the effects of the Great Recession on the wealth distribution. They suggest that average Americans have been hit much harder than wealthy Americans. Edward Wolff, the economist we draw upon the most in this document, concludes that there has been an “astounding” 36.1% drop in the wealth (marketable assets) of the median household since the peak of the housing bubble in 2007. By contrast, the wealth of the top 1% of households dropped by far less: just 11.1%. So as of April 2010, it looks like the wealth distribution is even more unequal than it was in 2007.”
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
Let’s put this 36.1% share of total wealth into perspective. That exceeds the amount of wealth controlled by the bottom ninety percent of Americans as of 1998 (per Edward N Wolff, Recent Trends in Wealth Ownership, 1998).
So far, it does look as though the scales are tipped against the 90%, and in fact the 99%, in favor of the one percent.
The top tenth of the one percent do equally as well as against the bottom 9/10ths of the top one percent. That’s the way our current, government-led society is structured. So who is it, we should be asking, who really runs the government? If it’s the Great Unwashed Masses, how come they’re doing so badly?
Of course the bribed don’t run anything but indirectly through their need to be bribed.
“Flailing against “the communists” and “the socialists” obfuscates these natural differences in orientation between owners of capital and sellers of labor.”
Are you one of those idiots who takes the outcomes in a regulated market order for a free one? Well given your posting history… yeah, you are.
“The fact is, we do have a pie, one to be cut into many pieces. And the one percent among us get by far the biggest shares.”
Who gets the biggest pieces of the pie is not important. What is important is that by forcing the pie to be shared equally by everyone, we wouldl shrink the size of the pie such that everyone will get less pie and thus everyone will be worse off. All that making all the pieces of the pie equal will accomplish is to assuage the envious, and envy is the religion of the mediocre.
No one’s saying we need to measure out equal shares of pie for all. Let me clarify further.
Take all the cumbersome layers of regulation and redistributive intent inherent in maintaining a huge government apparatus… (with me so far?) … what is the net effect? Isn’t it to propel the money in actual circulation upward into the hands of the most fortunate of Americans? I don’t see the evidence that government is taking money from the rich and handing it out in any meaningful way. What they’re showering on the poor and out of work is comparative crumbs.
There are forty million of us now on food stamps. This is not the sign of an economy in balance. It’s a sign that the bottom economic levels are not being nourished by the way the system currently works. Whenever you exchange a good job for a poor job, or half a job, or no job, as millions of us have been doing, the lack of income does terrible things.
To call the victims of the current production slowdown merely envious is to do them an injustice. Is it your philosophy that everyone who loses his job deserves to be poor? I assure you, every one of those people is desperately trying to get back to work. But the job-creation myth driving your view of the world isn’t working for them. The money the rich save by not paying higher taxes isn’t creating any jobs.
We need a new model. And I’m thinking it’s one where emergency services have to be adequately funded.
” We need a new model. ”
Yes. How about abandoning the current interventionist model and replacing it with a free-market one?
“How about abandoning the current interventionist model and replacing it with a free-market one?”
Then those who get left off the merry-go-round will be free to starve. They don’t all own plots in which they can grow their own.
Those 27 million children being fed lunch on the School Lunch Program? I’m glad to have my taxes help them. And I’m not even Christian, just a fellow human.
Starvation has always been a feature of a command-and-control, communist, and socialist economies. Such famine, when not weather related (no political system can fix that problem), was always a result of price controls enacted under the guise to help the poor or a result of food redistribution practices, again, under the guise to keep the starving children fed. No free market system has generated any form of famine or poverty.
Fun fact, nearly 50% of those who are receiving a free school lunch are also obese.
There are about 60M kids between 0 and 15 years of age. So your number is roughly half the number of kids who attend school each day. You mean to tell me that half of all kids in the U.S. need to be fed via so-called public machinations?
Wow, as I live and breathe in my cloistered little world, things “out there” are dreadfully worse than I ever could have imagined.
“Starvation has always been a feature of a command-and-control, communist, and socialist economies.”
Starvation’s certainly a feature of poorly run economies, and those run by ideological zealots and despots.
But in terms of the particular brand of ideology, the same is also the case in anticommunist economies. Burma-Myanmar, for instance, is not command-and-control, it’s merely an extractive economy, with the peasantry being extracted from.
There are probably more people hungry now in Iraq, under our suzerainty, than there ever were under Saddam. One of the things he did right was to endeavor to ensure basic minimum standards. And the first thing we did to undercut that base of his popularity was to initiate sanctions, thinking his people would blame him for their subsequent miseries.
So there’s no all-inclusive rule. Certainly not price controls.
But here’s a perfect place to prove your thesis: India under the British Raj. India rarely ever had widespread famines before the British came to rule over them. Crop failures, sure. Every few years. But under local rule there was never widespread starvation.
Explain why it was that famines began with British rule, giving particular attention to price controls.
2. “Fun fact, nearly 50% of those who are receiving a free school lunch are also obese.”
The cheapest foods are those that are the most fattening. They’re made from the cheapest components, like cornstarch and glucose. They fill you up without providing nourishment.
There really is a hard and fast rule. There is a wonderful article here on Mises, Price Controls of the Ancient World, that demonstrates quite handily that centrally controlled economies consistently create famine when attempting to engage in controls over the pricing or production of food. As you noted, poorly run economies, which indicates central command. Free markets aren’t run by anyone.
“The cheapest foods are those that are the most fattening. They’re made from the cheapest components, like cornstarch and glucose. They fill you up without providing nourishment.”
This one you can blame purely on the command and control farm subsidy system. Corn, being the major source of the cornstarch you mentioned, is heavily subsidized and thus artifically made more preferrable to other food sources. Further, tarriffs have been erected to artifically raise the prices of competing goods. Elimination of subsidies and tarriffs would most assuredly shift preferences toward more nutritious foods as corn is expensive to cultivate and would likely fall out of market favor if farming subsidies were eliminated.
Just to counter-act the protection of the food supply argument you’ll likely bring out to attempt to justify farm subsidies, there aren’t subsidies for broccoli growers, for example, yet there isn’t a broccoli crisis. Oddly enough, unsubsidized foods have zero supply problems at all. The only issue is that the supply would increase, driving down costs, if subsidies were eliminated, making those healthy foods cheaper and affordable to the poor of our society. It’s the simple fact we are attempting to help the poor (one of the numerous arguments behind the farming subsidy system) that is driving them to low-quality foods.
Franklin: In a good year (2004) 13% of our population was food-insecure.
http://www.carseyinstitute.unh.edu/publications/FS_foodinsecurity.pdf
It’s worse now. 27 million kids don’t just qualify for free lunches, they eat them every school day.
http://health.kaboose.com/nutrition/school-lunch-menu.html
Note that much of the food being supplied is donated by the community.
Such programs actually subsidise capitalism, in that they allow employers to pay their help less than a living wage. Many qualifying families have at least one full-time worker earning wages. But it’s not easy feeding a family on eight bucks an hour. That would be $16,640 a year.
WalMart earns one billion each year in direct government subsidies, and probably another $1.5 billion in indirect subsidies, by paying so little its employees qualify for food stamps and other benefits. In return, we get low prices.
“The Democratic staff of the House Committee on Education and the Workforce estimated the breakdown of costs for one 200-employee Wal-Mart store:
* $36,000 a year for free or reduced school lunches, assuming that 50 families of employees qualify.
* $42,000 a year for Section 8 rental assistance, assuming that 3% of the store employees qualify.
* $125,000 a year for federal tax credits and deductions for low-income families, assuming that 50 employees are heads of households with a child, and 50 employees are married with two children.
* $108,000 a year for the additional federal contribution to state children’s health insurance programs, assuming that 30 employees with an average of two children qualify.
* $100,000 a year for additional Title I expenses, assuming 50 families with two children qualify.
* $9,750 a year for the additional costs of low-income energy assistance.
http://www.thirdworldtraveler.com/Corporate_Welfare/WalMart_Welfare.html
WalMart is the nation’s largest employer. They set the bar other employers attempt to get under.
Is there some mythological creature that represents this sleazeball (or those he works so hard for)? His every rotten program at gunpoint bringing on the horrible conditions that justify his next rotten program at gunpoint?
The little old lady who swallowed a fly is the only thing I can think of. FDR, maybe.
They don’t all eat them, Michael.
My wife happens to teach at the local middle school (in the USA), a few miles down the road. During summer school, there was something of a controversy, involving one enterprising little fellow who blessed me with a belly-laugh to last me weeks.
Title I funded one lunch box per child. To receive the paper box replete with cookie or candy bar, orange juice or milk, sandwich, carrots, and granola bar, a child required “disadvantaged” status designation. Oh, and not to worry your heart, there were scores of ways to be designated as such.
Nevertheless, teachers were required to watch for “cheaters”; they had to account for “one-per-child” distribution.
Not all the kids who “qualified” for the Title I lunch wanted it. Some used to bring in some snacks from home, ethnic dishes sometimes, or they’d just eat the candy bar, and skip the ham sandwich.
So in spite of the one box per child mandate, much of the foodstuff inside the box was neglected and tossed. More than you can imagine.
One African boy, bless his soul, born to Liberian refugees, created something of a black market.
They caught up with the little rascal and he shamefacedly had his parents summoned to the school as well, kindly folks that could still speak nary a word of English.
Apparently, depending on other kids’ likes and dislike, the enterprising 11-year old was brokering candy-bars for orange juices — well, usually not the candy bars, hardly any kid would part with that. But there was pent-up demand for orange juice vs. milk trades, chips for sodas, carrots for granola bars. And yes, some kids preferred the carrots.
In a short couple of weeks he had already become school yard’s chief broker. All the other Title I kids knew who to count on, who could route them to the preferred snack, who liked what, and who was willing to barter.
‘course it seemed harmless enough, but the boy had taken it one step further, he started to horde some of the stuff (stuff that was a hare’s breath away from being thrown in the trash bin) and began selling the originally unwanted extra sodas and chips for dimes.
When he was scolded, in front of his intimidated parents, he was alleged to have said, “But if I don’t sell, teacher throws away….”
Trade is in our blood. Nevertheless, along with my “attaboy” chuckle, I also have to wonder what that Liberian refugee learned from all this.
“There really is a hard and fast rule. There is a wonderful article here on Mises, Price Controls of the Ancient World, that demonstrates quite handily that centrally controlled economies consistently create famine when attempting to engage in controls over the pricing or production of food. As you noted, poorly run economies, which indicates central command. Free markets aren’t run by anyone.”
JM: Is this eternal rule based on any actual example? Can you describe a place and time where there were no controls on food production, and everyone was fed?
Franklin: Your tale of the Liberian kid is one of the few really good comments I’ve read here. He came from a land where there were no free lunches.
“a land where there were no free lunches”
That’s the Earth, you preening douchebag.
michael,
You really are funny. You say
” We need a new model. ”
to which I give you the ONLY new model – a free market and then you go ahead and reject it on non-existent grounds!!! How does an interventionist model become a “new” model when what we already have is an interventionist model?
Incidentally, you have already acknowledged (on another thread) that government intervention in the economy makes everyone worse off.
http://blog.mises.org/13433/the-illusion-fades/comment-page-1/#comment-708034
Why do you reject the only alternative to such government intervention?
In case you haven’t had the time to read my responses out there, could you please respond to them now? I’m waiting (with bated breath).
“Those 27 million children being fed lunch on the School Lunch Program? I’m glad to have my taxes help them”
Would you volunteer your time or money to help feed them asbsent the money being forcibly taken from you? I think that you’ve said elsewhere that you contribute to charity, so I presume that you would. Isn’t it, then, a matter of you wanting money taken from other people to fund the school lunch program?
“the burmese road to socialism” was coined by ne win, who governed from 1962 to 1988. he obviously didn’t think “socialism” needed a lexical makeover.
something called charity
michael ; )
Bala: I’m following your argument on intervention with great interest. Here it is:
“How does an interventionist model become a “new” model when what we already have is an interventionist model?
“Incidentally, you have already acknowledged (on another thread) that government intervention in the economy makes everyone worse off.
http://blog.mises.org/13433/the-illusion-fades/comment-page-1/#comment-708034
“Why do you reject the only alternative to such government intervention?”
So then, we conclude that the concept of intervention is always, in every conceivable case, the wrong approach to take.
Then the question is, why would one ever want to intervene in the workings of our own economy? Shouldn’t we just sit back, take no action and let whatever happens happen? That way world prices could just rise and fall by the workings of the Hidden Hand… and the peasants be damned. Market manipulations like the one we see in this year’s chocolate market would become the new norm. They’d become the standard route from wealth to hyper-wealth.
michael,
To sum it all up before I break down your response, you are blabbering.
” Then the question is, why would one ever want to intervene in the workings of our own economy? ”
I am unable to think of any reason other than the desire to rob and steal. The reason for wanting to steal and rob may be different, but the underlying reason for intervention is the desire to rob and steal.
” Shouldn’t we just sit back, take no action and let whatever happens happen? ”
Yes. I couldn’t agree more.
” That way world prices could just rise and fall by the workings of the Hidden Hand… ”
Once again, you are on the right track.
” and the peasants be damned. ”
Where did this come from? It is an arbitrary assertion that does not follow from your previous statements.
” Market manipulations like the one we see in this year’s chocolate market would become the new norm. ”
Oh!! I am not sure what you mean by the market manipulation in this year’s chocolate market. Please explain it and I will shortly show you how that too is an outcome of government intervention and how everyone is worse off as a result.
I think he’s talking about the complaints found in recent sterling examples of journalistic integrity and professionalism such as this piece.
I really ought to bookmark this one so that when October rolls around and the dire predictions for the chocolate market being predicted fail to materialize, we can say, “Oh, look, that example of a market failure never happened!” On the other hand, it won’t make a whit of difference to the well and truly indoctrinated.
Oh! And look what else that capitalist bastard is trying to do. Honestly, who does he think he is, trying to enslave the hapless workers in Africa and make them work for The Man? Everyone knows that the best way to keep people in Africa from starving is to send them aid, equitably distributed by selfless local government officials. Now he wants to trick them into selling food to the rest of the world? THEN WHAT WILL THEY EAT?!!! That dirty capitalist pig!
(And I sincerely hope that the sarcastic tone of the above was sufficient to make this parenthetical addition irrelevant.)
Scott: You ask a couple of questions I’d like to address:
“Would you volunteer your time or money to help feed them asbsent the money being forcibly taken from you? I think that you’ve said elsewhere that you contribute to charity, so I presume that you would. Isn’t it, then, a matter of you wanting money taken from other people to fund the school lunch program?”
I think a moral society should make a decision to feed the hungry within its domain, yes. And in fact, the United States has taken that decision. Most of us, me included, think it’s a good use of our money.
I also contribute to many of the local food banks, which are organized on a county basis. They are all privately run charities that help fill the gap. All are chronically short of funds.
2. Not sure what your point is about the current attempt to corner the world chocolate market. It may cause prices to rise, or it may fizzle. The Hunts tried, unsuccessfully, to corner the world silver market some years back. Lost a bundle at it.
3. “Oh! And look what else that capitalist bastard is trying to do. Honestly, who does he think he is, trying to enslave the hapless workers in Africa and make them work for The Man? Everyone knows that the best way to keep people in Africa from starving is to send them aid, equitably distributed by selfless local government officials. Now he wants to trick them into selling food to the rest of the world? THEN WHAT WILL THEY EAT?!!!”
Nice diatribe. Was this supposed to counter something I’ve said?
Much of West Africa’s chocolate is harvested by child slaves, sold by their parents into destitution. On the one hand, such parents are living in horrible circumstances, and can use the tiny sum of cash provided by selling a child. Life for the child in question is hell either way, whether or not he is sold.
Africa’s economic life has largely been ordered by a free market, with not much in the way of any positive result. Governments there are weak, as are the economies in consequence. The socialist economies of the seventies are mostly all long gone, and little improvement has resulted.
Again with the Free Market Africa. gfhhffhh. Slaves in a free market.
“Free” in “free market” doesn’t mean the powerful are free to do anything. That would describe Michael’s government:
http://www.youtube.com/watch?v=W1-eBz8hyoE
Do you think this human piece of excrement had visions there of a swinging Mussolini in his mind? (not that I advocate that, too messy, but it’s still amusing to ponder)
michael, that’s just plain wrong. Following decolonisation after WW2 just about every African economy was taken over by a new government formed from anti-colonial and usually Marxist inspired parties. State intervention has crippled Africa more than any other region, as it usually conspired with a particularly concerted effort to use the apparatus of the state to pillage and rape the economy to benefit the party in control, which was usually centred on a particular ethnic group. I cannot think of one country in the region where the price mechanism was allowed freely to allocate labour and capital under a limited government; on the contrary, the norm was gross and catastrophic regulation and control by corrupt and (relatively) uncorrupt governments alike.
” The fact is, we do have a pie, one to be cut into many pieces. ”
The fact is that we don’t have a pie. Whatever exists belongs to someone or the other. To treat the property of a number of individuals as a “pie” disguises the truth, which is that you want yourself or the gang of goons who have your approval to treat it as a pie, pool it together and cut it up as you think it should be done.
You are just using the 99% as a shield for your totalitarian tendencies.
Demonstrably, they use their position and lobbying money to influence legislation in their favor.
Absolutely. Inheritance and income taxes, workplace regulations and education subsidies are immense barriers to affordable family formation and upward mobility. Or did you really think all that stuff was for the benefit of the little guy?
It is also no coincidence that wealth has become increasingly concentrated after years of artificially low interest rates and a juiced-up money supply.
I think Micheal misinterprets the point this article is making. It is not suggesting that certain class distictions do’t exist under capitalism but instead is saying that any class distictions that do are caused by non-violent and voluntary trade as opposed to force as they would be under socialism, as they were under fuedalism.
It depends on what you mean by force, Jim. The word I would use is influence.
The plain fact is, large corporations can afford to have a full-time lobbying presence in Congress. Poor people in contrast have only a handful of left-leaning Democrats. And the scale of the lobbying effort has grown immensely over the past dozen years. So poor job seekers really don’t stand a chance. legislation is written by the powerful and well connected. Which is another way of saying, people with money.
I have no idea how anyone can imagine that our government is socialist. It gives lip service to the poor, but gives in on any meaningful legislation. The healthcare bill, for example, was written by the pharmaceutical and insurance lobbies, working in tandem. The only thing it did for people too poor to afford health insurance was require them to buy it under force of law, with money given to them by Congress.
Get the drift? The giveaway went directly from Washington into the pockets of two of our wealthiest lobbies. Po’ folk were merely the cutout used to make things look on the up and up.
Force as in violence against another individual(and the threat thereof), which I would say is being used by those lobbying corporations when they get themselves special privilages through regulation. I don’t believe in class warfare or any kind of “its us against them”.
Jim: To call influence “force” is to mangle the language. No one forces the politicians to take their money. They do so willingly and eagerly.
The alternative is to live ethically, and not get re-elected. Money rules current politics, and Washington is going to require a very thorough makeover.
I don’t see it happening until something basic collapses unexpectedly one day.
Influence is the cause (When corps lobby) and the force (the regulation) is the effect.
Jim: The correct conclusion, then, would be to say down with all the rules? Because rules imply force?
There would be no standardisation of weights and measures? No quality controls on tainted meat, bread cut with sawdust or sandy concrete? No recourse against the sale of shoddy equipment? Con games are now permitted under the laws of universal freedom?
I don’t think I’d want to do business in such a world. I’d rather try to return the country to a more representative form of government.
michael, only if you have read nothing could you go on to make up this garbage about free markets meaning no quality control. Government quality control is not the only kind of quality control that exists. And no libertarian or anarcho-capitalist endorses lying to people, something universally considered wrong.
And there is also not one anarcho-capitalist who looks at small government as a path to more of those things, because we know that there are alternatives to a huge state for ensuring people who do bad things are punished for them.
You constantly present reasons not to trust government, not to have any respect for the system, and yet you continue to believe it’s better to keep something relatively close to what we have. You don’t even take your own arguments seriously. I’m having deja vu hearing you go on about how the healthcare bill is just a corporatist garbage bill, but.. I think you probably still support it more than “doing nothing.”
regulatory capture. and yet you’ve still got an appetite for more regulation?
My defense of capitalism is as follows:
What is fairer than a mutually accepted trade between two people (whether of produce, land or labor)? Could it be fairer if a third party coerced one of them to accept less than he wants? Similarly, given many traders, what could be fairer than the overall process that results from supply & demand? Here too, each person retains the choice of what he will trade for what. Capitalism thus provides rewards based on contribution to production, as determined by the consumer.
It is true that liberty guarantees inequality. Consequently it is not wrong that with the division of labor, there is ever greater inequality of monetary outcomes, since some parties can now contribute to the gain of an ever increasing number of consumers. What is more important is that quality-of-life is not measured monetarily. When there is less death at childbirth, reduction of pain from disease, the elimination of starvation, and more entertainment, travel, availability of information, communication, etc., then the quality-of-life differentiation between rich & poor becomes smaller.
Some regret that rich people often have rich children, while overlooking that often a family goes from rags to riches, or riches to rags. Yet would we want it otherwise, when conscientious parents bequeath more to their children than do the indolent? Why would we discourage those who work to make a better life for their children?
Some people say they would prefer a lower standard of living, for the sake of greater equality. Yet I deny that in reality they would prefer the life of the colonists, where the wealthy had no running water, used outhouses, and took a month to cross the ocean. In those days the rich had perhaps 100 times the wealth of the poor, as contrasted with say 100,000 times the rich have today. Yet a starving man then had more to envy when he saw a wealthy man having a full meal, that anyone today can get at McDonalds.
All very good points. The only problem is that you say liberty will inevitably cause inequality. That would be equality of materials, but equality of materials neccesitates inequality of action and subjects one party to the coercion of another. Equality would consist of all having equal right to coerce each other or none having right to do so (excepting retaliatory use). Capitalism holds the later.
Jim, “liberty guarantees inequality” means that people will behave differently. Some will be smarter or will work harder, while others will choose to be less conscientious. It is true that some will gain more wealth than others, but that does not give them the right to coerce. Under a republic, it is not who is richer that matters, but what one does with the resources he has. Note that our largest industries are continually replaced by smaller ones.
Alright I gotcha. Inequality is in fact a positive good for without it we are slaves to a particular code. I was refering that the one who coerces is by no means “equal” to his victim.
And even in regards to material equality resources are much more spred among the populace now than they were before the liberals (the real ones) and capitalism.
The pie lies unguarded. For those of sufficient brainpower, the internet is an unbelievable frontier and global agora. How can it be the states have released their monopolies on communication, travel, and intellectual control. Large business associations, great religions, bands of criminals, leisure guilds, and many other powerful entities have both a great opportunity to increase and a great threat to lose their dominant positions. So do you.
Probably its happening due to a cynical belief by the US military that it will retain dominance no matter what reapportionment and individual empowerments occur. Even so, Carpe novus regnum.
To quote Ludwig von Mises,
The proof of the usefulness of the services rendered is that a sufficient number of citizens is ready to pay the price asked for them. There cannot be any doubt about the fact that the customers consider the services rendered by the bakeries useful. They are ready to pay the price asked for bread. Under this price the production of bread tends to expand until saturation is reached, that is, until a further expansion would withdraw factors of production from branches of industry for whose products the demand of the consumers is more intense. In taking the profit-motive as a guide, free enterprise adjusts its activities to the desires of the public. The profit-motive pushes every entrepreneur to accomplish those services that the consumers deem the most urgent.[4]
Why doesn’t this seem to apply to healthcare? (or maybe it does) Health insurance is at least partially to blame. Those that can afford insurance help drive up the price so that affordable healthcare is an “activity” only provided for those that have insurance. I would say that your portion of the pie DOES matter in quality of life.
The above statement from Ludwig suggests to me that ALL markets (including bread) has it’s exclusions, regardless of your individual actions or use of available resources. Using this same logic, I would argue that our resources are being squandered on Ipods , Spongebob boxers and entertainment, possibly at the expense of our health. Someone else’s conspicuous consumption leads to others not having adequate resources to sustain themselves. Survival instinct makes coercion inevitable for those that control resources. Those with fewer resources, and the same survival instinct, act in kind.
I don’t think people that feel need care about your mediocrity anymore than you care about theirs. What many of you call “coercion”, I call “compromise”. What else would you expect from a mass of self-interested, optimizers?
Government intervention and regulation is probably our most civil option for settling class conflict.
A good deal of trouble with the current healthcare system (before obamacare) is over regulation. Government intervention, because it neccesitates the threat of force, is not very civil.
Within the bubble of the capitalist society the proletariat currently tend to remain numbed to the urge to rise up; but in the global perspective, and given time, as the fight for primary wealth vis-a-vis natural resources increases and human labour is increasingly removed from the assembly line of production, the separation between the power holders and the people will progress.
Capitalism is founded on competition. By definition, there will be a winner and a lot of losers. Factoring in the human capacity for unlimited greed and its lust for power over others, it is only a matter of time before the Utopian capitalists and its supporters will be forced to decide where their survival alliances lay — with the plutocrats or the common people.
Marx may not have it entirely correct, but the suggestion that infinite capitalist growth can operate in a finite world is comically foolish. By default, Marx is, I suspect, more correct than others when time reveals the truth.
You confuse biological competition with catallitic competition. The fact that everyone wants shoes makes them easier, not harder, to obtain.
No, I am speaking of economic competition spurred on by our invasive, cultural propaganda where the game-plan is to acquire as much fiscal wealth as possible. Unfortunately, two big problems deform all economic models — greed, often insatiable, and pathological behaviour. I believe the hurdle is to find an economic paradigm that best limits the impact of such deforming forces.
Under capitalism, man exploits man. Under communism, it’s just the opposite. ~ John Kenneth Galbraith
As for the ‘pie’ I speak of, I am referring to the planet’s finite resources which is, by default, humanity’s primary wealth; a little reductionist thinking will lead one to confirm all production, mental or manual, is birthed from this finite resource pool.
the ussr was your experiment.
There is no propaganda, what people seek to acquire is based on their own individual desires that come from their humanity. Man will always desire more. This is why communism will without doubt fail all the time. This is why communists systems drive the worst greediest sorts to the top and you get to say every time that it wasn’t “true communism” because that’s not what you wanted.
But even if it’s not what you want, it’s exactly what your system leads to and there is no other path or way for it to go. Eugenics was one notion on how to make the system “better”, to change essential human nature. If “cultural propaganda” was such a powerful force then surely the USSR would have been able to make it’s people work better but it failed to change humans fundamental urges.
As for the matter of your “pie” I’ll point out that we have been using more and more of that pie for a long time, and your communists keep telling us we are going to run out but we just find more ways to exploit that which exists. Now you’ve got the green environmentalists out there talking about how we are ruining things so that you can force the pie to be as finite as you imagine.
And even if the pie is finite, you’re still wrong about the system for dividing it. The price system is the only reasonable way to manage scarce resources. Any other method leads to nothing good.
I’m pretty sure that “lust for power over others” is better served under socialism than uder a system of voluntary trade.
igby: You’re kind of a breath of fresh air around here.
“Marx may not have it entirely correct, but the suggestion that infinite capitalist growth can operate in a finite world is comically foolish.”
We will fairly quickly reach some of the limits to growth. The first is likely to be usable water. That lies, for instance, at the core of the disputes between Israel and its neighbors. In order to survive, Israel needs the Litani River, and has known such since the first invasion of Lebanon.
So what we will see as we approach these natural limits is more war. And in fact mutual predation is nature’s first recourse, when population growth exceeds available resources. We’re unlikely to obligingly lay down and starve without a fight.
But let’s go beyond that to see whether there is another natural outcome to economic growth. I would observe that there’s likely to ultimately be a single winner if you presume a zero-sum competition to corner the supply of available resource wealth. The outcome would be an autocratic monarchy, something like Imperial Russia before the angry serfs pulled it down.
And if under pure capitalism it is anything less then zero-sum, the outcome would be control of the world by an oligarchy: a class of winners.
To presume that pure capitalism in a context of near-total personal freedom (what they call ‘minarchy’ here) would result in a noncompetitive state of pristine autonomy and personal enjoyment of wealth, would be naive in the extreme. The human instinct is to dominate– of for no other reason than not to be dominated. One group will end up controlling the entire pie.
So do you. Apparently the idea never entered your head that if we don’t have enough of something, it might be profitable to make more.
Seattle: I made a living for many years by meeting demand. The only way to get ahead is to provide a service or product to satisfy an unmet need.
Many people don’t know that. I once visited a town in midland Michigan (Owosso) that was full of would-be entrepreneurs. This was back in the 1970s.
Guess what they all decided to do? There were only three kinds of store in the entire town: candle shops, waterbed stores and candle-and-waterbed stores.
So yes. The idea of providing a novel service did enter my head. And I found business to be both brisk and steady.
Michael Garvin, male prostitute.
with a taste for novelty. the mind boggles.
Then why, dare I ask, do you assume the pie is a fixed size? If you’re as much of an entrepreneur as you say then you should know first hand how wealth creation works.
I doubt seriously that Michael has been an entrepreneur. He is probably some grad student getting paid to troll this site by Brad DeLong or Paul Krugman. He clearly has way too much time on his hands. What a loser.
i hope they think they’re getting value. the quantity is there, but the quality…
Open debate and argument is essential, and the last thing this site can be allowed to become is one where people of dissenting views get hounded down and drowned out. That said, there’s something not right with michael. He’s a mouthpiece, he takes nothing in, just responds with more motherhood and apple pie that adds nothing. He should quit blogging and read some of the literature. Or just piss off back to Krugman’s site.
“Then why, dare I ask, do you assume the pie is a fixed size?”
The “pie” that we have to work with here at street level is in fact pretty much of a fixed size. Whenever someone pays you to perform a service or sell him a good, the dollar he offers transfers itself from his pocket to yours. There is no multiplication of dollars.
And we denominate wealth in dollars. No amount of fancy footwork can disguise the fact that when we study the economy we study the flow of dollars into and out of various hands. Every “money making machine” is an engine of wealth only in the sense that it enables you to transfer the dollars of other people into your own hands. You don’t “create” that wealth. You rearrange it.
It’s that kind of thing that makes people around here appear so crazy to normal folk.
I’ll take crazy if it’s in comparison to what you consider “normal folk.”
“Normal folk” if they really believe nominal dollar values equals wealth are fools. But I think contrary to what you say most people know better than that.
water insecurity is a tragedy of the commons. there’s never a shortage of perrier water or san pellegrino. perhaps marx can explain that, too.
Yes, Jim, regulation (among many other factors) causes healthcare cost to rise well above and faster than wages and inflation. Where is the free market incentive for insurers to reduce cost, assuming they could exercise that sort of influence over healthcare providers, without using some kind of force? How do you get people to pay for a mandatory treatment system, financed by a private, voluntary payment system without some kind of force? There is plenty of force in opposition to making the healthcare system more efficient. It’s obvious why private insurers can’t pay for everyone’s healthcare. It should be equally obvious why people oppose the free market solutions to make healthcare more efficient. Is it really that inconceivable that someone lacking economic force would employ political force?
The incentive for action is to make insurance premiums affordable relative to healthcare costs for the profit maximizing number of policy holders. The price for healthcare is based on negotiations between exclusive providers (regulatory barriers make most alternatives to a liscensed practitioner unavailable, and thankfully so) and a giant corporation with virtually unlimited resources. This economic force is countered with political force, initiated by us dumb folks that voted for President Obama.
What would you expect to happen differently? Insurers disregard the economic implications of their actions just the same as consumers, and with good reason for both.
If we truly had a world of voluntary trade, productivity and cooperation, there would be no debate about the virtues of Capitalism over Socialism. Social change precedes economic change. In the absence of greed, competition, selfishness and profit, we would probably choose a more Socialist economy. Our problem isn’t that we have chosen to corrupt the free market with government intervention. The problem is corruption. China’s newly found free market success will probably fail without equally progressive political reform. As hard as we try to separate economics from politics, we can’t.
Voluntary servitude is necessary under any economic system. Why would an educated, productive populace (which free marketeers purport to be the solution to personally unfavorable conditions) choose an imbalanced system of compensation?
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