Archives for category: Economics
Herbert Spencer’s Synthetic Philosophy, my set.

Is it possible to reduce the world population by 50%? Isn’t world over-population the cause of all the problems in the world?

…as answered on Quora:

Two questions, eh?

  1. Is it possible to reduce the world population by 50 percent?
  2. Isn’t world overpopulation the cause of all the problems in the world?

The answers are simple:

  1. Yes.
  2. No.

But there are complications:

  1. Many of the ways to decrease populations quickly, especially by half, are of the Thanos-or-worse variety. We do not want to decrease populations quickly. Gradually could be another story.
  2. As economist Theodore W. Schultz explained — and as Julian Simon demonstrated in a more daring and popular form — population is not the huge problem that neo-Malthusian alarmists say it is. Human beings, if they do not rely upon predation and parasitism, and have plenty of opportunities for market coöperation (trade), are what Simon calls “the ultimate resource.”

When we rely upon trade, we must be of service to one another. We engage in trade only when we expect to gain, that is, when both parties to an exchange expect to gain from it. I help you out if you help me. And the more trades occur, the more that competition for each others’ business hones our productivity. The more productive, the more advances in technique and technology we bring to the stock of civilization. This is progress.

Thomas Robert Malthus’s worry in his Principles of Population (1798) was that (a) the rate of agricultural advance would be outstripped by (b) the natural rate of human population growth. He was stumbling towards a modern conception of external economies, of the “market failure” focused on in neoclassical economics. That is where options seen by the individuals as in their best interest yields widespread effects not in the interest of people generally. (Malthus was arguing against the anarchist rationalist William Godwin and his belief that moral progress would lead to an ethical utopia of excellence everywhere.) Basically, the Malthusian fear is that people would be incentivized to reproduce at a socially dangerous rate. Reason would fail — in effect be upended by circumstance.

But Malthus had an interesting analytic mind, and he handled the problem with something more than a glib pessimism. He noted that these two diverging trendlines (agriculture expanding at an “arithmetic rate” versus population expanding at a “geometric rate”) were offset by other forces, at least on the reproduction trend line.

There were, he wrote, natural checks on reproduction rates, including famine and pestilence and infant death by malnutrition; and there were artificial checks, including sexual abstinence in several forms, most of which he regarded as moral, and some gruesome means, such as infanticide and abortion and eugenics. His worry was that populations would grow to bring misery, and also a rise in immorality out of perceived prudence. He rightly saw that crude measures of packing people in close together, as happened in cities, often breed plague and sexually transmitted diseases. And it is in his spirit — and often inspired by reading his treatise — that many modern prophets of doom have developed the popular anti-population mania. And theirs is indeed a harrowing philosophy, turning otherwise nice and smart folks into anti-humanist immoralists, praising horrific measures of (aack) mass death or (ugh) government repression. This sort of thing inspired the modern environmental movement, where you will find some folks advocating reducing humanity to “a size twice the population of bears.”

But all this misses the “miracle” of modernity: progress.

Malthus failed to see what Herbert Spencer saw in the early 1850s: coöperative humanity can indeed fight against the Malthusian trap, flipping the trend lines so that agriculture can grow exponentially more productive than the rate of population reproduction . . . and in turn spurring increased populations to be increasingly productive. The only thing we would have to give up? The militant, regimented means of social organization, instead embracing “industry.” Which in this case was the predecessor to the industrial recolution, the agricultural revolution. Spencer saw trends on Malthus’s agriculture forecast that would raise the line several orders of magnitude.

Interestingly, Spencer almost came up with the theory of natural selection in this work. But he only applied his notion of a ratcheting up of living standards by means of competitively coördinated coöperation to the social world, not to the long-term cycles of plant and animal descent. “Missed it by that much,” as Agent Smart said in Get Smart. It is for this reason that sociologist Jonathan Turner inverted the infamous “Social Darwinist” charge against Spencer: Darwin, really, was a “biological Spencerian.” Spencer spiffed up his approach a decade later, for the final section of his Principles of Biology. And in the process he gave us the turn of phrase “survival of the fittest.” Though it has been trendy (for a full century, actually) to look upon Spencer’s viewpoint as a ghastly exercise in cruel theoretics, Spencer was actually emphasizing peaceful coöperation and presenting humanity with a remarkably positive vision. J.D.Y. Peel, in his study of Spencer, said that the British philosopher-sociologist “out-Godwinned Godwin”! But Spencer did this not by hoping for a triumph of Reason, but by merely noticing the flourishing that is possible with distributed patterns of collaboration sans an over-arching plan.

The amazing thing? He was basically right.

Spencer was actually presaging what today’s more realistic economists and demographers understand perfectly well. And, what is more — less: today’s best researchers notice that as human societies get wealthier, the rate of reproduction goes down.

In Schultz’s terminology, parents swap “quantity of children” for “quality of children.” In mere agricultural societies, children can be productive in farm life and in resource extraction; in industrial societies, for people to be productive they have to decelop their skillsets more markedly, so parents opt to expend resources to “invest” in their children’s “human capital.” So, that old black magic of having scads of children ceases to increase the chances of family success, but, instead, tends to reduce it.

That is one big reason why people, today, tend naturally to produce fewer children than in the past.

One might think that this would be completely scuttled by the lowering of childhood death rates, but for a number of reasons, this does not appear to be the case.

And, yes, populations are indeed declining in the First World — and as the rest of the world catches up (and in my lifetime the poverty rate has declined markedly with the expansion of the extent of the market), the general reproduction rate will level off. In Europe, the white population is veering to the opposite-of-“Malthusian” trend: demographic collapse. In the United States, were it not for immigration and recent immigrants’ higher reproductive rates, America, too, would see population decline.*

Demographic collapse is actually probably going to be a bigger problem in the future than the “population explosion.” It is the implosion that would more likely destroy civilization.

But here we have another offsetting trend: technological progress.

The great heterodox genius Samuel Butler, not long after publication of Charles Darwin’s On the Origin of Species (1859) argued that the next form of evolution will be machine evolution. This was played for science-fictional interest in his dystopian romance (or is that utopian comedy?) Erewhon (1872), but now we are really seeing this kick into high gear, as we approach something like a social Singularity (see Ray Kurzweil).

About the time of Malthus, there arose the legendary “Ned Ludd,” who saw only devastation in the destructive creation of technological advance. And since then there have been worriers who see mainly the death of labor in “labor-saving devices.” And like Malthusianism, Luddism, if true, would have meant the death of free labor and our whole civilization a century ago. The opposite is the case: technological advance increases worker productivity, leading to a general increase in wealth and welfare. The “trouble” is, people have to adapt to the machines.

Perhaps the challenge of population decline will not be so bad, as machine evolution makes our lives better and better. Maybe, in Richard Brautigan’s poetic lines, we shall be “watched over by machines of loving grace.

The real challenge will be political.


* The downward trend line is exacerbated by welfare state interventions, and the high rate of abortions, too. But for this analysis I need not get into to it.



Additional thoughts:

I wonder if there is not a third major danger playing here besides Malthusian and Luddite, but the belief in scientific management of the human livestock, which inevitably buys into Malthusian and Luddite predictions, then uses untold cruelty to violently whip the human population towards a better condition. Our OP demonstrates it.

Timo, do you agree that there is this third strain and from whom do you think it originates?

Dennis Pratt, replying to my answer, May 30, 2018.

Yes. These are the intellectuals I call Social Galtonians, after Darwin’s cousin Francis Galton. There is a great irony embedded in this social engineering movement. Inspired by Darwin’s tough-minded biological theories, these scientists and activists invented eugenics. But it wasn’t natural selection they advocated, or even sexual selection (the two key concepts Darwin marshaled to help understand speciation), but, instead, the everyday concept that Darwin used to explain natural selection, by analogy: “artificial selection,” or breeding.

Basically, these people see the apex of advance in an elite that would engineer society for further advance. It is profoundly anti-Darwinian, really. They wanted to “take charge of evolution.” But Darwin was trying to explain spontaneous order, advance without Plan. The Social Galtonians wanted to Plan, in all-caps: PLAN.

And here we can see the contrast with the thinker usually called the major “Social Darwinist,” Herbert Spencer. His view was that in the course of super-organic evolution various interpenetraing and almost-indistinguishable institutions (like religion and The State) would diversify and integrate simutaneously. The state would get smaller to accommodate countervailing, offsetting institutions like religions and industrial organizations and markets and the like. That is not what happened, but he thought that was what needed to happen for the kind of progress that would work best for the greatest diversity of people.

And what was important and “Darwinian” about this was not the scope for “natural selection” (a factor in explaining man and society at every level) but the primacy of individual selection selection. Voluntary breeding.

The social engineers and eugenicists wanted to clamp down on this decentralized, distributed reproduction technique and replace it with top-down breeding. Artificial selection as a super-elitist activity justified by a mis-reading of evolutionary science.

So, Spencer was more Darwinian and less crude in his preference for sexual selection over anything like social engineering. The State should be peeled back to a limited role, not expanded to mimic the reductionist and naive view of organisms as top-down, total-conscious mechanisms.

The social engineers, of course, are hubristic. They make a huge error in their basic world view. But it “feels” scientific, to themjust as the maroons who wax enthusiastic over “the scientific consensus” get all the good feels from their mania.

It is scientism.

But it is not our current problem. Not really. For sentiment transformed eugenic-minded progressivism after the Hitler debacle into an incoherent welfare state-cum-churning state. And what dominates now, in combination with the feminist cult and cultural Marxism, is dysgenic. Policies leading to the cultivation of vast hordes of near-criminals and parasites.

That is hardly a Social Galtonian view, or Social Darwinist. It is its own satire.

The Hegelian dialectic as it spins society through the rinse-repeat cycle is something of an ironist.



The primary political reaction to the Darwinian challenge, then, comes down to this: how we conceive of responsibility in the management of human reproduction. Should folks be regarded as their own people, responsible for their own couplings and reproduction strategies (per sexual selection) or should they be treated as breeding stock (per artificial selection)?

The Progressive Era, with the rise of socialism and fascism, chose artificial selection, which led to the sterilization of “the unfit” and unwanted — and those perceived as dangerous. I have called this Societal Galtonianism. The old liberal idea was simply the Smithian “natural liberty” and Spencerian “Law of Equal Freedom” approach, where people were let alone to choose for themselves. Call this alternative Independent Adaptation.

So, which will be “the ultimate recourse”? Freedom and the division of responsibility, or force and social engineering?

But note that Independent Adaptation, which I obviously prefer, is now developing to a new level of sophistication, where the sexual selection of partners can be boutique and even commoditized. Instead of letting the ablest swimming sperm capture the egg immediately after an act of coition, now we enter a world where

  • fertilized eggs can be chosen for viability according to various criteria
  • eggs can be pre-selected
  • sperm can be pre-selected
  • DNA can be altered in pre-nates

which certainly will all have huge social consequences, making the “problem of children” all the more interesting.

The modern fear of the breeding stock approach led to a few famous dystopias, such as Aldous Huxley’s Brave New World, and many not-so-famous ones, such as the late J. Neil Schulman’s The Rainbow Cadenza. And in the world of open-source science fiction — that is, in ufology — the fear of humanity being reduced to breeding-stock status becomes a major cultural meme.

None of this expresses the core truth of our time, though.

In reaction against eugenic breeding programs of the Progressive Era, modern “liberals” and (post-modern) progressives have embraced the dysgenics of the unstable pairing of free sexual selection with tax-funded subsidy. This is our current paradigm, in which freedom and responsibility are kept separate. This is part of the dominance of left versus right politics, where the two flavors de-link freedom and responsibility issue by issue, and the compete in the political marketplace to set policy in an ad hoc way. It is quite messy, and we live under the chaos of freedom-without-responsibility and responsibility-without-freedom as the two option against which society constantly lurches in drunken sailor fashion.

Trouble is, the pure social engineering, totalitarian approach, which might be more culturally stable than our current kludgy dysgenic approach, strikes most people, including me, as horror-show repugnant. While the libertarian/responsibilitarian approach strikes most people, excluding me, as freaky unsettling.

So we will probably be stuck in the intelligentsia-approved compromise system until our civilization crumbles.

twv

Cultural diversity means conflict when the individuals and groups see themselves as competing for scarce resources in the Commons, and the access is a zero sum activity.

The meaning of said conflict is clear in the El Paso anti-immigrant shooting, in the group-righteous racism of intersectionalist hectoring, and . . . well, one could read about it in the pages of this book, Politics in Plural Societies, by Alvin Rabushka and Kenneth A. Shepsle, who begin their treatise listing ethnic conflict around the world.

“Outright killing frequently takes place,” is a typical topic sentence in the first chapter.

The key concept is that of “the plural society,” coined by J. S. Furnivall, who defined the concept as a mixed-group society “comprising two or more elements or social orders which live side by side, yet without mingling, in one political unit.”

Because of his training as an economist, Furnivall naturally focused on the economic aspects of the Dutch colony. Observing that each community possessed a distinct set of values incompatible with those of other cultural groups, he characterized the plural society as one lacking consensus or, in his terms, one without “common social demand.” To illustrate his point, Furnivall constructed the following example. The buying of cathedrals involves an expenditure of resources much like the purchase of groceries. In a homogeneous society, the purchase of a cathedral provides an indivisible “public good,” i.e., every citizen may benefit from its construction. In the plural society, however, the erection of a Chinese temple constitutes a “public bad” for Muslims; in a similar manner, Muslim mosques provide few or no benefits for Chinese. Therefore, in the plural society social demands often result in public expenditures with benefits for one community and opportunity costs for the others. The plural society thus isolates the demands of its separate communities, and fails to aggregate, in Furnivall’s terms, common social demand.
Furnivall points to the presence of separate ethnic demands as a basis for differentiating a plural society from its homogeneous counterpart.

Rabushka and Shepsle develop what is basically a familiar theory, a Classical Liberal Theory of Competing Interest Groups, the basic idea being that if you want diversity, you must have limited government — and if you want big government, you must possess or (more ominously, create) a monoculture.

And if you fail to create a monoculture, you will get violence.

There is a reason today’s “multiculturalists” are such hectoring, moralistic ideologues: they are trying, rather desperately, to create a monoculture, an ideological one. And that is why they tend to look upon their political opponents as “deplorables” — because they resist the multiculturalists’ creation of a utopian society based on left-moralism.

Drolly, “right-wing” nationalism and its relentless pushing of flag worship and patriotic rite amounts to much the same thing, if on a much more limited scale — after all, nation-building is what nationalists do, and its element of doctrinal monoculture (in America, anyway) is the major competitor to multiculturalism.

Furnivall’s major contribution lies in his observation that plural societies are qualitatively distinct from homogeneous ones, and that the different communities of the plural society can meet only in the marketplace. His insistence that outside force is required to maintain order implies that plural societies are inherently prone to violent conflict.

This should be familiar to anyone who has immersed themselves in the sociology of Spencer and Sumner, or of the less ideological conflict theorists. That it is not familiar to most folks today is largely the result of bad education all around.

twv

To members of a proud in-group, those in the out-group tend to look like Yahoos. Not Houyhnhnms.

The Quoran who asked the question, below, might not have been driving at what I took it to mean. The intention may actually have had something to do with economic systems, with “capitalism” as it has developed in “the West.” It never crossed my mind, as I wrote my answer, that it was not about the social science. But I should have guessed, for people often use “economics” as a description of some system.

Ayn Rand wrote of “the separation economics and State” while James Branch Cabell referred to “The Economics of Coth” (and others) when drolly recounting one of his better character’s decisions and rationales.

Cabell’s usage strikes me as more than merely forgivable, Rand’s does not. For one thing, when Cabell wrote, “economics” was still a fairly new term in an educated person’s lexicon. “Political economy” had served for over a century, and many economists wrote tomes in Cabell’s time calling the science “Social Economy.” For another, there is only one way to take Cabell’s construction, while Rand’s “economics” could mean either the science (it should not be subsidized) or “markets and the private property order.”

I write a lot comparing varying social systems of production, distribution and consumption on Quora. But here I stick to considerations of basic explanatory theory.

Why is western economics based on self-interest?

…adapted from an answer on Quora…

It isn’t.

Self-interest is a moral concept, and economists are supposed to be Wertfrei (value-free) social scientists — if on track of value.

You might say, “but economics is all about the results of people choosing according to their own values, thus all about choices dependent upon a kind of perceived or self-constructed interest.” And I reply, “well, OK, if you must — but it is just as much a science exploring other-interest, for these selves doing their choosing also value others, and their interests in others figure into their demand and supply curves just as much as does their self-regard.”

The truth is this: the logic of choice at the heart of subjective value and marginal utility and marginal rates of substitution and satisficing and all that is not egoistic . . . according to economists. And when they say that it is — as they sometimes do, in large part because they are not always good philosophers — they err.

The brilliant Jevonsian economist P. H. Wicksteed tried to make this clear when he argued that economists are not pushing a rationale of egoism when they develop their notion of a demand schedule or draw up indifference curves, nor negating altruism, either. What they apply, he argued, is a concept of non-tuism.

This is a coinage he offered to help explain what he regarded as the basic nature of trade: when a person economizes in his purchases and asks for the highest prices possible in his sales, he may do so for egoistic or altruistic reasons, but still works to maximize the interest of the transaction, either egoistic or altruistic, when he makes those trades. (Or when she makes her trades, for one of Wicksteed’s better examples was of a housewife deciding the basic economy of the household under her charge.) Non-tuistic interest is a worthwhile concept to try to understand: see Israel M. Kirzner’s The Economic Point of View: An Essay in the History of Economic Thought (1960), for a good treatment.

But even Wicksteed did not get it exactly right, for we do sometimes trade for others’ benefit, accepting a higher price for pencils from the blind man at the corner than at the Five and Dime.*

It helps to focus not on “interest” — which, as I assert above, has too moral a component — and not on “utility” — which is unduly abstract, and gets students confused. Concentrate, instead, on the specific uses to which a good may be put. Under the theory of Grenznutzen (border use) of the Austrian School economists (from which English-language economists got their term of art marginal utility), the various uses to which a fungible good may be put, and against which value is to be understood (as dependent upon the importance of the specific use the last unit of a good decided upon has to the economic actor), can be almost any mix of self-regarding and other-regarding purposes.

In my personal economy, my first gallon of clear water goes to drink, the second and third to food preparation, the fourth to cleaning myself, the fifth to my neighbor, the sixth to my dog, the seventh to washing the dog, the eighth to washing the house, the ninth to letting the neighbor’s cow to drink, and so forth.* All of these uses satisfy me, but several also satisfy others. Do you see how useless quibbling about whose interests are being served?

The economist does not usually inquire deeply about the egoism and altruism of the goals, or uses, that are the foci of the border use (Grenznutzen) that goes into explaining the formation of prices and the rates of exchange. Because such concerns are irrelevant to what economists are usually trying to explain.

Similarly, economists rarely fret about how a person forms the value scales which place the various uses to which goods are put into order. Not because they cannot be analyzed, but because they are mostly irrelevant to what economists do.

Who is concerned? Moralists, whose traditional and self-appointed job it is to get people to change their values.

But when moralists get worked up over whether choices on the market are “too egoistic” or “not altruistic enough,” they go too far if they also castigate all economic choice as selfish. And usually they descend into a very deep error.

The error was identified clearly by Austrian philosopher Alexius Meinong in his Ethische Bausteine (see Marie-Luise Schubert Kalsi, Alexius Meinong’s Elements of Ethics, 1996), where he explores the difference between subject and object, ego and alter. Of egoism and altruism, Meinong argued that, before any deep inquiry, one might think that “a value is egoistic if the subject is egoistic, altruistic if the alter is the subject. However, that this is not so can be seen in the fact that I myself have altruistic desires and valuations besides egoistic desires and valuations. Thus, no objection should be raised that there are altruistic and egoistic values for me. Then, the ego is subject of even altruistic values. But the altruistic nature of these values must be grounded on something other than the valu[ing] subject.”

The notion that economics is “based on self-interest” is actually a misguided philosophical complaint, and though I recommend Wicksteed and Kirzner and other economists to clear this up, it really is a philosophical error, and should be dealt with philosophically.


 * Yes, I am old. I like throwing around seemingly ancient examples.

N.B. In addition to the texts explicitly cited, above, one should consult


Reconsiderations

I have to confess to writing my Quora answers fairly hurriedly. It is obvious that some are better than others. This one was not great, rather poorly organized, with some sloppiness. The Meinong section should have been placed up a few paragraphs, and my problem with Wicksteed’s non-tuism is not adequately identified.

The issue lurking (as if Yog-Sothothery) behind the scenes, is this: in discussing market prices in terms of marginal utility we generally assume that the goods being traded are discrete and serve a specific set of needs, or wants. But sometimes we do trade “just to trade,” even though Adam Smith protested that he was unaware of much good being done in that vein. Human interaction is more complex than simple models can map, and, yes, the Austrian praxeological method of catallactic explanation is modeling, too. There is no way around models. There are just different sorts.

This complexity becomes clearer, amusingly enough, when you move away from mass markets and into murkier realms of barter markets, gift economies, plunder procedures, and straightforward cooperation in domestic and tribal contexts.

Much work must have been done in the manner I indicate, here, but I have not seen that work, especially amongst the Austrians.

Austrians, whose basic approach I apply to social science, are like today’s leftists in one sense, at least: just as leftists endlessly and obsessively and yammer about racism for the obvious reason that the fight against racism is the only good thing they have ever accomplished, Austrian economists grind their brand of marginal utility theory because it was, indeed, the best thing they ever accomplished. Expanding it into other domains is harder work. So that work is generally not done.

That being said, Austrians are least apt among market-oriented economists to get caught up in puerile charges of “egoism.” The self-interest notion, too, is rarely botched by Austrians in a crude way, though I do not see many in the tradition to take a deep interest in the processes by which individual actors construct and revise their own understandings of their interests.

Finally, it is indeed unfortunate that we have to deal with two quite distinct concepts of “interest”: the moral concept, in which one aims to provide an objective standard for one’s subjective (personal) value scale, and the catallactic concept, which is associated with (if not defined as) the price of loaned funds.

twv

Remember President Barack Obama’s annoying “You didn’t build that”?

Today I watched President Donald Trump “explain” how awful trade deficits are. In that explanation he basically said to China, “You didn’t build that.”

The line should still be familiar. Obama had purloined it from the lips of Senator Elizabeth Warren. With this argumentative gambit, these two politicians revealed themselves for what they are, demagogues out to fan the flames of resentment and entitlement. In trying to give to government the credit for the entrepreneurial accomplishments of businessfolk, they were honing an agenda: de-legitimize the achievements of the successful the better to take their wealth away.

But while Obama gave to government the credit for business successes, Trump gave America the credit for China’s.

His logic?

Trump said previous presidents had allowed China to get away with trade policies that disfavored the U.S. to such an extent that no future deal could be 50/50; then, that a deal had been made, but China changed it, so he put up the wall of high tariffs.

Next, Trump boasted of the huge increase in government revenues from his taxes, er, tariffs.

And then the kicker: “We rebuilt China because they got so much money” under freer trade.

That is how Trump had America take the credit for Chinese growth.

And he was more than implying that there is something wrong with Americans helping Chinese grow in this manner.

Trump seems not to understand that when people trade (it is not, really, countries trading) both sides gain. The farmers who support Trump can imagine selling more agricultural product had President Xi’s own protectionist measures been lower, and it is on the basis of those lost opportunities that Trump makes his pitch to American farmers. But it is Chinese consumers who have the greater cause to complain for past Chinese protectionism, for had Xi allowed more trade, China would have grown even faster. Because of all the exchanges. 

Like in all trade, neither side to a trade is irrelevant. China could with just as much justification take credit for American progress in all that past trade.

Every instance of which was an advance for both sides.

The Chinese built what they built, with American help. And could’ve built more had their government gotten out of the way.

And right now, with Trump’s high tariffs in place, American consumers will have to pay more for what we buy from China.

And elsewhere.

Trump is apparently trying to get Xi to take down his protectionist barriers by putting up American barriers. And if Trump succeeds, we do indeed all win. If he fails, we all lose. Meanwhile, we are hurting as much as the Chinese.

And what Trump is saying encourages resentment and economic superstition. So, even if he wins, what we may end up with is more resentment and a greater reservoir of protectionist sentiment in the American electorate.

And that almost guarantees disaster.

twv

Why isn’t corporatism talked about as an alternative to capitalism and socialism?

…an answer on Quora by Ethan Lee:

‘Corporatism’ is not an alternative to capitalism, it is capitalism. Albeit not free market capitalism, it is capitalism none the less. Calling X corporatist is just a cop out to avoid admitting that is in fact capitalism.

Capitalism = Private ownership over the means of production

Socialism = Worker ownership over the means of production

Is that exactly right? Workers can own the means of production in capitalism. 

I own my small business. There do exist workers’ cooperatives. And laborers’ pensions often own stock in companies, though most often not majority stock in any one company, and not in their own — which, since they invest at their own discretion, suggests that workers, generally, do not want to own the means of production. Only a few exceptional people do.

And, interestingly, under several of the socialist societies that have existed — the most prominent one, anyway, that called itself socialist, explicitly — small business was not exactly tolerated, was it? And workers did not own their factories, etc., the State did. And, further, it was industrial workers that were focused on: agricultural workers were despised, expropriated, and killed en masse. For “workers” owning “the means of production” was not the point of socialism, historically. Not really. It was “everybody” owning the means of production through a central planning office, through the State. Which in practice just means tyranny.

And I note that the socialists I know personally, and the ones I see on TV, do not seem much interested in workers as such, or the means of production as such. They are concerned with consumers, making sure that everyone can consume about the same amount of goods: equal access to healthcare, equal access to housing, equal access to iPhones, complete financial security for all, etc. Which suggests, once again, that “workers” is the reddest of red herrings. Socialism always comes back to a form of consumerism. State-supported and -enabled consumerism.

What “corporatism” means is not always clear, either. We have a lot of publicly* traded stockholders’ corporations in these United States, and they sure look like market institutions, and not a few are even basically operating within something like a free market. But many — though, once again, certainly not all — of the most successful are dependent for their success on government contracts (some of the biggest corporations are those within the ambit of the military-industrial complex) and, when the biggest fail (most recently in the financial sector) they are bailed out, at taxpayer expense. Further they are regulated in such a way that “just so happens” to protect established businesses from upstart competitors. This system is certainly not laissez faire, as stated in the answer, above. But its capitalist nature, while being there, is certainly open to some interrogation. What it looks like to me might best be called “producerism.” A form of it. Producerist arguments were dominant in 19th century support for protective tariffs, and they now dominate the government practice of regulation and bailouts.

Which should indicate my approach to free-market capitalism: it is consumerist-producerist . . . both. We produce to consumer, sure, but no consumer and no producer should really be given special favors. “Workers” and “business” do not compete so much as cooperate, and foisting a class narrative on their relations is a bad idea. They are just two special interests, and our rule of law should serve the general interest, not any specifically identified class or group. Neither consumer-oriented socialism nor worker-oriented socialism make sense, and corporatisms that focus on bolstering up specific industries for the sake of stability are not much better.

============

* Note that we call publicly traded stock companies “private” — our nomenclature sure must confuse the young.

Gustave de Molinari

The economist must not confound interest with selfishness, still less with the satisfaction of such needs as are purely material. It signifies rather the sum of the requirements of human nature, material as well as moral. A man does not impose upon himself the sufferings which are inseparable from effort, nor abstain from enjoying the fruits of his toil, for the sole purpose of satisfying selfish wants, whether present or future. Altruistic intention is a frequent and often the more powerful factor in determining labours or abstentions. Altruism includes the love of family and the race, of truth and justice; and its scope is only limited by that of the moral sentiment. Under its spur men have died for each other, a cause, even a cherished idea. There is no real warrant for the opposition between interest and duty, a contradiction that has been too often reiterated. Duty is no more than the obligation to act in conformity with justice, the criterion of which is the general and permanent interest of the species. The sense of justice — in other words the moral sense — naturally predisposes us to conform action to duty. This sense is, no doubt, distributed most unequally. Certain individuals find that obedience to its dictates yields a joy which outweighs any pain, and such men pursue duty at all costs and in face of every obstacle; others are less conscious of the stimulus. A sense of obligation is often disobeyed, but every lapse is followed by that feeling of pain which is called remorse. Finally, there are many persons whose moral sense, the sense of justice, is quite rudimentary; they commit every kind of injustice or immorality to satisfy their passions or vices, and are a menace to society and the race. Mere self-defence compels society to supplement such enfeebled sense of the obligations. It therefore imposes penalties, regulating their incidence in such a way that the amount of pleasure obtained by comitting an injustice is more than neutralised by the punishment which follows.

Society’s first duty is, therefore, to foster the sense of justice — the moral sense. And it is equally imperative to define the distinction between just and unjust, moral and immoral, since the hurt or benefit of society and the species is bound up with the opposition between these two ideas. The interests of the individual and the species are, in their regard, identical.

Gustave de Molinari

The Society of To-morrow: A Forecast of Its Political and Economic Organisation (1904)

from the Preface, third footnote (to the passage in the title on this page)

To believe that “deficits don’t matter” and “public debt is no problem” requires one to believe that government, and government alone, has solved the problem of scarcity.

Furthermore, governments have mastered this magic by doing the one thing that politicians most like doing: bestowing benefits on some constituents without immediately raising taxes on others.

Suspicious. Stretches the credulity, if you ask me. I have never been shown the mechanism how this could possibly work.

Most defenses of deficit spending are Keynesian, and Keynesian fiscal prescriptions only make sense on their own terms when counter-cyclical, that is, when deficit spending is parlayed in bad times to be offset by budget surpluses used to pay off debt in good times. But that no longer ever happens. If it ever did.

Politicians just get too few rewards from paying down debt.

So, as near as I can make out, the modern State’s “solving” of the “problem of scarcity” is not a solution at all, but is, instead, a con job. It depends wholly upon misdirection. As is so often the case, we come back to Bastiat’s “the seen and the unseen.”

The populace? Blind to it. But politicians and their pet economists? They squeak and take their politic soundings for mastery of flight.

Batty.

Cultic behavior is not limited to marginal groups.

Indeed, it has become increasingly clear in recent years that the social controls we associate with cults are the prime drivers (with interesting differences) of almost all center-dominant cultural organizations, institutions and movements.

Most people adopt center-dominant beliefs not because of the beliefs’ truth-values, but for pragmatic reasons and for signalling. Think of it as “innocence by association.”

We should expect nothing else.

And it is for this reason that whole cultures can lurch into extremely perverse directions, whether they be Aztec mass sacrifice, communist political centralism, or even dietetic “science” and eating habits.

My favorite modern example is usually deficit spending by governments and debt accumulation — often excused by half-adopted, half-assessed Keynesianism while being driven by very different but very obvious Public Choice factors.

twv

I asked a question about Menippean satire and the works of Jack Vance, in a Facebook discussion group, and in the conversation that followed I encountered this:

What is remarkable about this passage from a fellow Vancian is how easy it would be to satirize, in Menippean fashion.

But instead of doing so, I will just explain: the truth of the matter is almost precisely the opposite of the notions for which my interlocutor expresses certainty.

“We” do not destroy the environment to enrich the “1 percent.” This “1 percent” works mightily to fulfil our desires, and in the course of the process some damage is done to the “environment.” Trendy progressives — by which I mean “trendy anti-progress doomsayers” — never seem to understand how the world works. They seem to think that if the 1 percent goes about enriching themselves, we allow them to do that because we are suckers. Not quite. We allow them to invest, and to build businesses, so that those businesses can increase the quality of our lives. The dreaded Greenhouse gases do not come, primarily, from the recreational activities of the very rich. They come from all of our driving in automobiles, heating our domiciles, and eating meat. Sure, many people get rich providing us with cars and fuel, electricity and natural gas, and raising beef animals that fart up methane. It is because we engage in consumption that production is developed, and some people — serving vast hordes of consumers — get very rich.

Capitalism is mass production for the masses.

It is a defect of leftist thought that what leftists object to is the great successes of the most productive, not the real drivers of the market system, consumers.

I find it hysterical coming from folks who readily parrot Keynesian doctrine, since Keynesians fixate almost wholly on consumer spending as the driver of market activity. I think the actual implementation of capital is way more complicated than Keynesians think, but nevertheless I more than acknowledge the consumer sovereignty idea embedded (perhaps precariously) within Keynesian dogma.

But leftists and environmentalists and other responsibility-evaders must always shift blame for unfortunate social patterns away from themselves and onto the dreaded Rich.

I guess this allows them to justify their lust to tear away at other people. And because they do not see the integral role of entrepreneurs in markets, or recognize the symbiotic relationship of all market participants, including between “classes,” they eagerly attack one sector, in vulgar fashion, while inflicting harm more generally.

Then, of course, they blame the rich for not being more productive.

This general attitude is what I think of as a satirizable — and is satirized in some of the character types to be found in many of Vance’s best work, such as Wyst and Emphyrio.

It is not just the attitude that is bothersome, however. Also latent in my interlocutor’s sort of complaint is lack of recognition of a fairly basic truth: it is only the comparatively rich societies that find ways to make industry cleaner. America and Europe developed strategies for cleaning up industrial excess only after a level of wealth was reached, far in advance of what big polluters in India and China now possess.

This may be a sad truth, but it is a truth regardless.

Environmentalists so rarely recognize it.

And yet they often do so tacitly, by focusing their ire on First World polluters more than in China and Africa, for instance.

Pure comedy gold.

twv

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What would happen if the world stopped using money?

As Answered on Quora

Billions of people would die.

Without a medium of exchange and unit of account, coördination of capital would become utterly incoherent, and the established interdependence of the modern age would vanish.

Most people would become useless to others, unrewardable.

And violence would reign supreme, as there would be a scramble to capture existing resources. Economists would utter the words “consumption of capital” before they were placed against the wall and shot en masse.

Mass starvation, rioting, tyranny, and death would follow, and quickly. Progress would not merely halt, regress would set in. We would go back to a stone age. A few technological utopias may survive, but the cost would be extraordinary.

For billions and billions of people would die miserable, horrifying deaths.

And the population would reduce itself to something like twice the population of bears.

In the meantime, certain infrastructure elements, like nuclear power plants, might very well fail and poison the planet . . . that is, if the malign individuals who capture the nuclear arsenal do not usher in nuclear winter, first.