Wednesday, December 26, 2007

The Relevance of an Old Nemesis - as Even Older Ones Return

Over on the Lifeboat Foundation discussion list, Ben Goertzel, a rising star in artificial intelligence theory, expressed skepticism that we could keep maintaining a "modern large-scale capitalist representative democracy cum welfare state cum corporate oligopoly" for much longer.

Something will have to give, under the weight of contradictions, Ben thought. Indeed, this complex civilization does seem to be under a lot of stress, right now.

You folks might find interest my reply:

THE UNLIKELINESS OF A POSITIVE SUM SOCIETY

Today’s “modern large-scale capitalist representative democracy cum welfare state cum corporate oligopoly” works largely because the systems envisioned by John Locke and Adam Smith have burgeoned fantastically, producing synergies in highly nonlinear ways that another prominent social philosopher -- Karl Marx -- never imagined. Ways that neither Marx nor the ruling castes of prior cultures even could imagine.

Through processes of competitive creativity and reciprocal accountability, the game long ago stopped being zero-sum (I can only win if you lose) and became prodigiously positive-sum. (We all win, though I'd still like to win a little more than you.) (See Robert Wright's excellent book "Non-Zero".)

Yes, if you read over the previous paragraph, I sound a lot like some of the boosters of FIBM or Faith In Blind Markets... among whom you'll find the very same neocons and conspiratorial kleptocrats who I accuse of ruining markets! Is that a contradiction?

Not at all. Just as soviet commissars recited egalitarian nostrums, while relentlessly quashing freedom in the USSR, many of our own right-wing lords mouth "pro-enterprise" lip service, while doing everything they can to cheat and foil competitive markets. To kill the golden goose that gave them everything.


nonzero1The problem is that our recent, synergistic system has always had to push uphill against a perilous slope of human nature. The Enlightenment is just a couple of centuries old. Feudalism/tribalism had uncountable millennia longer to work a selfish, predatory logic into our genes, our brains. We are all descended from insatiable men, who found countless excuses for cheating, expropriating the labor of others, or preserving their power against challenges from below. Not even the wisest of us can guarantee we'd be immune from temptation to abuse power, if we had it.

Some, like George Washington, have set a pretty good example. They recognize these backsliding trends in themselves, and collaborate in the establishment of institutions, designed to let accountability flow. Others perform lip-service, then go on to display every dismal trait that Karl Marx attributed to shortsighted bourgeois "exploiters."

Indeed, it seems that every generation must face this ongoing battle, between those who "get" what Washington and many others aimed for -- the positive-sum game -- and rationalizers who are driven by our primitive, zero-sum drives. A great deal is at stake, at a deeper level that mere laws and constitutions. Moreover, if the human behavior traits described by Karl Marx ever do come roaring back, to take hold in big ways, then so might some of the social scenarios that he described.

SHOULD WE -- SERIOUSLY -- HAVE A FRESH LOOK AT OLD KARL MARX?

Do you, as an educated 21st Century man or woman, know very much about the controversy that transfixed western civilization for close to a century and a half? A furious argument, sparked by a couple of dense books, written by a strange little bearded man? Or do you shrug off Marx as an historical oddity? Perhaps a cousin of Groucho?

Were our ancestors - both those who followed Marx and those who opposed him - stupid to have found him interesting or to have fretted over the scenarios he foretold?

I often refer to Marx as the greatest of all science fiction authors, because -- while his long-range forecasts nearly all failed, and some of his premises (like the labor theory of value) were pure fantasy -- he nevertheless shed heaps of new light and focused the attention of millions upon many basics of both economics and human nature. As a story-spinner, Marx laid down some "if this goes on" thought-experiments that seemed vividly plausible to people of his time, and for a century afterwards. People who weren't stupid. People who were, in fact, far more intimate with the consequences of social stratification than we have been, in the latest, pampered generation.

As virtually the inventor of the term "capitalism," Marx ought to be studied (and criticized) by anyone who wants to understand our way of life.

What's been forgotten, since the fall of communism, is that the USSR's 'experiment' was never even remotely "Marxism." And, hence, we cannot simply watch "The Hunt For Red October" and then shrug off the entire set of mental and historical challenges. By my own estimate, he was only 50% a deluded loon -- a pretty good ratio, actually. (I cannot prove that I'm any better!) The other half was brilliant (ask any economist) and still a powerful caution. Moreover, anyone who claims to be a thinker about our civilization should be able to argue which half was which.

Marx's forecasts seem to have failed not because they were off-base in extrapolating the trends of 19th Century bourgeois capitalism. He extrapolated fine. But what he never imagined was that human beings might intelligently perceive, and act to alter those selfsame powerful trends! While living amid the Anglo Saxon Enlightenment, Marx never grasped its potential for self-criticism, reconfiguration and generating positive-sum alternatives.

A potential for changing or outgrowing patterns that he (Marx) considered locked, in stone.

Far from the image portrayed by simplistic FIBM cultists, we did not escape Marx's scenarios through laissez-faire indolence. In fact, his forecasts failed - ironically - because people read and studied Karl Marx.

HUMAN NATURE ALWAYS CONSPIRES AGAINST ENLIGHTENMENT

The-Zero-Sum-Society-9780465085880This much is basic. We are all descended from rapacious, insatiable cheaters and (far worse) rationalizers. Every generation of aristocrats (by whatever surface definition you use, from soviet nomenklatura, theocrats, or royalty to top CEOs) will come up with marvelous excuses for why they should be allowed to go back to oligarchic rule-by-cabal and “guided allocation of resources” (GAR), instead of allowing open competition/cooperation to put their high status under threat. Indeed, those who most stridently tout faith in blind markets are often among the worst addicts of GAR.

In particular, it is the most natural thing in the world for capital owners and GAR-masters to behave in the way that Karl Marx modeled. His forecast path of an ever-narrowing oligarchy -- followed ultimately by revolution -- had solid historical grounding and seemed well on its way to playing out.

What prevented it from happening - and the phenomenon that would have boggled poor old KM - was for large numbers of western elites and commonfolk to weigh alternatives, to see these natural human failure modes, and to act intelligently against them. He certainly never envisioned a smart society that would extend bourgeois rights and social mobility to the underclasses. Nor that societies might set up institutions that would break entirely from his model, by keeping things open, dynamic, competitive, and reciprocally accountable, allowing the nonlinear fecundity of markets and science and democracy to do their positive-sum thing.

In his contempt for human reasoning ability (except for his own), Marx neglected to consider that smart men and women would actually read his books and decide to remodel society, so that his scenario would not happen. So that revolution, when it came, would be gradual, ongoing, moderate, lawful, and generally non-confiscatory, especially since the positive sum game lets the whole pie grow, while giving bigger slices to all.

In fact, I think the last ninety years may be partly modeled according to how societies responded to the Marxian meme. First, in 1917, came the outrageously stupid Soviet experiment, which simply replaced Czarist monsters with another clade of oppressors, that mouthed different sanctimonious slogans. Then the fascist response, which was a deadly counter-fever, fostered by even more-stupid European elites. Things were looking pretty bleak.

THE ENLIGHTENMENT STRIKES BACK

Only then this amazing thing that happened - especially in America - where a subset of wealthy people, like FDR, actually read Marx, saw the potential pathway into spirals of crude capital formation, monopolization, oppression and revolution... and decided to do something about it, by reforming the whole scenario away! By following Henry Ford's maxim and giving all classes a stake -- which also meant ceding them a genuine share of power. A profoundly difficult thing for human beings to do,

Those elites who called FDR a “traitor to his class” were fools. The smart ones knew that he saved their class, and enabled them to enjoy wealth in a society that would be vastly more successful, vibrant, fun, fair, stable, safe and fantastically more interesting.

I believe we can now see the recent attempted putsch by a neocon-kleptocrat aristocratic cabal in broad but simple and on-target context. We now have a generation of wealthy elites who (for the most part) have never read Marx! Who haven’t a clue how chillingly plausible his scenarios might be, if enlightenment systems did not provide an alternative to revolution. And who blithely assume that they are in no danger, whatsoever, of those scenarios ever playing out.

Shortsightedly free from any thought or worry about the thing that fretted other aristocracies -- revolution -- they feel no compunction or deterrence from trying to do the old/boring thing... giving in to the ancient habit... using influence and power to gather MORE influence and power at the expense of regular people, all with the aim of diminishing the threat of competition from below. And all without extrapolating where it all might lead, if insatiability should run its course.

What we would call “cheating,” they rationalize as preserving and enhancing a natural social order. Rule by those best suited for the high calling of rulership. Those born to it. Or Platonic philosopher kings. Or believers in the right set of incantations.

REVENGE OF THE DARKSIDE LORDS

Whatever the rationalizations, it boils down to the same old pyramid that failed the test of governance in nearly 100% of previous civilizations, always and invariably stifling creativity while guiding societies to delusion and ruin. Of course, it also means a return to zero-sum logic, zero-sum economics, zero-sum leadership thinking, a quashing of nonlinear synergies... the death of the Enlightenment.

Mind you! I am describing only a fraction of today’s aristocracy of wealth or corporate power. I know half a dozen billionaires, personally, and I’d wager none of them are in on this klepto-raid thing! They are all lively, energetic, modernistic, competitive and fizzing with enthusiasm for a progressive, dynamic civilization. A civilization that’s (after all) been very good to them.

They may not have read Marx (in this generation, who has?) But self-made guys like Bezos and Musk and Page etc share the basic values of an Enlightenment. One in which some child from a poor family may out-compete overprivileged children of the rich, by delivering better goods, innovations or services. And if that means their own privileged kids will also have to work hard and innovate? That's fine by them! Terrific.

When the chips come down, these better billionaires may wind up on our side, weighing the balance and perceiving that their enlightened, long range self-interest lies with us. With the positive-sum society. Just the way FDR and his smart-elite friends did, in the 1930s... while the dumber half of the aristocracy muttered and fumed.

We can hope that the better-rich will make this choice, when the time comes. But till then, the goodguy (or, at least with-it) billionaires are distracted, busy doing cool things, while the more old-fashioned kind -- our would-be lords -- are clustering together in tight circles, obeying 4,000 years of ingrained instinct, whispering and pulling strings, appointing each other to directorships, awarding unearned golden parachutes, conniving for sweetheart deals, and meddling in national policy...

...doing the same boring thing that human beings will always do -- what you and I would be tempted to do -- whenever you mix un-curbed ego with unaccountable privilege, plus a deficit of brains.

==See more on The Economy: Past, Present and Future

36 comments:

B. Dewhirst said...

I very much enjoyed all of the above, even where I differ with your analysis.

I hope you'll agree, though, that Capitalism is not definitionally the best possible system. Indeed, I'm not certain that all you ascribe to Captialism really belongs under that heading! (But I shan't bore you with quibbling.)

I suspect we'd agree that any proposed system would have to be presented openly, vetted by vigorous debate, tested on a small scale, etc before it was implemented... but there isn't any fundamental reason why we can't do better than Capitalism! (Indeed, as an evolved solution to a problem, there are doubtless 'planned' alternatives which will be far more efficient, just as jets are faster than birds and lasers potentially brighter than angler fish.)

Here is a candidate post-capitalist (but not post-sparsity, nor centrally planned!) economic system I ran across just the other day:

http://en.wikipedia.org/wiki/Participatory_economics

(I think you'll approve of the explicit inclusion of transparency as a corrective mechanism!)

David Brin said...

Very cogently spoken and I find nothing to disagree with.

Except that this may be a function of terminology. There is "big C" capitalism, which is associated with megalithic corporations that have immortal and overwhelming rights of immunity from accountability, while insulating narrow controlling elites from responsibility for long range effects. This is the thing that most critics of capitalism seem to be pointing at.

It is only one version of "small c" capitalism, which does not necessarily mean "small business". But it does mean the GENERAL process of gathering voluntary investment "capital" from a range of sources (savings, profits, pension funds etc) and using that capital to invest in new means of producing innovative goods and/or services more efficiently than others, in an environment propelled by competition.

This latter, more general version, does not have to include many of the corporatist flaws perceived by critics. Moreover, when they make assumptions, it loses them credibility, because they seem to be demanding that we throw out the baby with the bath water.

At its essence, capitalism is one of the four core methodologies of the Enlightenment. The unleashing of competitive markets, not only for goods and services but capital formation. (The other three are democracy, science, and justice, all of which also leverage human competitiveness for the good of all.)

Do-gooders who preach against competitiveness have had 4,000 years to show that preaching can work. It never has. Nor has socialism.

(Though when certain socialistic TOOLS, like universal education and health care, are applied you can profoundly improve the effectiveness of markets, democracy, science etc, by providing a feedstock of superior consumers, producers, citizens and researchers. In fact, the debate should not be BETWEEN left and right, but over what left and right-handed tools are good for.)

Note that Marx - who brilliantly unveiled for us the basic patterns of capital formation -- was nevertheless completely unable to see that the Enlightenment could make markets etc positive sum. His Labor Theory of Value was the most zero-sum assumption imaginable.

and it was dopery-depressing beyond belief. Thank God human beings were capable of much more.

Michael said...

I generally agree with this analysis, but I don't think that I agree with

"Marx's forecasts seem to have failed not because they were off-base in extrapolating the trends of 19th Century bourgeois capitalism. He extrapolated fine.".
and
"His forecast path of an ever-narrowing oligarchy -- followed ultimately by revolution -- had solid historical grounding and seemed well on its way to playing out."

Best to temper Marx with De Tocqueville, an aristocrat who saw a very different trend, one towards greater equality as comfortable and equal cogs in an all-powerful state (a vision echoes by Nietzsche in his conception of the "last man", and still later by Kafka), all freedom and individuality destroyed in the name of Democracy (because the common people like liberty, but like equality more and will gradually ratchet things from the former towards the later without aristocrats to resist them).

I would also bring up John Holt when discussing "a smart society that would extend bourgeois rights and social mobility to the underclasses." Marx lived in a society that did this, if one treats the underclasses as individuals, but when the underclasses are treated collectively there have been very few such societies that were not frontier societies, and we certainly haven't had one for over a century. Public schooling drives a stake through the heart of that possibility.

It's also worth noting that "Marxist" revolutions happened precisely in the societies where Marx didn't expect them, e.g. societies at primitive stages of development, and not in the advanced societies like Germany and the US where he most expected them. OTOH, what happened in Germany could be said to be very close to what Marx actually predicted in some respects.

By the way, why do these good billionaires think that private space travel is a good investment and a good use of their money? African poverty, clean energy, and biotech seem so much more important, to name just three things.

matthew said...

@ Michael -
Positive Sum Game!
Why not work on priviatization of space travel AND mitigate African povery AND develop better energy sources AND invest in biotech. Progress on one front you mentioned can (and will!) have synergestic effects on the others.
When a genius who was child from some refugee camp invents a better solar cell using GM cells to deposit Si on a substrate that had to be grown in a microgravity environment, then you will see! Synergy.

David Brin said...

Michael, you appear to be conflating two things.

Marx’s extrapolation of a gradual consolidation of power by a capitalist aristocracy was founded in observation that the same kind of consolidation has occurred again and again, almost everywhere humans rose above scratch agriculture.

The only difference between all of those other elite power grabs and Marx’s extrapolated end game, was that the bourgeois-capitalist elite would be doing something very useful along the way -- stealing labor-value from the proletariat and turning it into production capital. Unlike earlier, feudal lords, these final stage capitalists would create all of the production facilities. And Marx (unlike Lenin and Stalin) actually deeply respected that! Then once capital was formed, the last veneer of owners could simply be swept aside by workers who did not need capital formers anymore.

This fantasy was wrong on about twenty levels (e.g. we now know that tertiary capital is NEVER “finished forming” and thus “capitalists” of one sort or another will be needed, forever.)

Where he was dead on - historically, was that elites will conspire to grab power and then use it to grab more. That is human nature. Anyone who denies that is either a utopian or a moron... or at least bears a pretty steep burden of proof.

In contrast, Nietzsche and Spengler and their ilk were simply romantic psychopaths. Their fantasies bore no relation to actual history, actual human nature, or any social pattern that has ever existed, or ever will. No human society has ever used democracy in the way that you describe. I suppose it’s possible. I explore those avenues in The Transparent Society. But all evidence shows that any enlightenment-based democracy will also worship eccentricity, not sameness.

Sameness is a bore. And fear of boredom comes to the forefront, when Maslowes other needs are all fulfilled.

Your contempt for public schooling is based upon the notion that machinery of mass education crushes creativity. You seem to be saying this despite living in the most incredibly creative society of all time. Cognitive dissonance! Yes, most of the people to emerge from those schools are NOT creative! So? Was the majority ever? At least they can contribute more than their ancestors ever could. They can contribute COMPETENCE. (Picture the ‘betas” of Brave New World.)

Um, where are you going to get enough genius-level teachers to give every kid a slot at Summerhill?

Holt thought the right formula could (inexpensively) challenge all kids to become alphas. I have taught in one of his schools! And while they were lovely, they were also filled with kids whose parents already knew they had alphas. When the methodology is extended to those not already on that track, it fails.

Finally, um, with respect Michael, who are you to tell Elon Musk or Jeff Bezos how to spend money they got by honestly selling us absolutely terrific and wondrous goods and services? I may despise the parasites and would-be lords who give capitalism a bad name, but THESE guys are poster boys for the good side of that fantastic cornucopia-Force!

Anyway. We NEED another method for allocating capital to bold ventures, other than the governmental, corporate and market systems, all of which have very timid risk-horizons. There is a place for men and women, who have already proved their genius, and sheer guts, to apply the power of whim.

Anyway, Elon may be right. We may need a lifeboat, if we screw up this world. And he’s the guy giving us the electric car, too! So give him a break. ;-)

Russell said...

Re space: "Always mount a scratch monkey."

Re FIBM: Who ever said that markets are blind? Smith said that markets have a giant invisible friend, but not that he was blind.

Re power: powerful people never give up their power voluntarily. They are forced to do so by the powerless allying themselves with whichever power faction is willing to share power with them. Please read A History of Wealth and Poverty, previously in print as "Centuries of Economic Endeavour" by John P. Powelson http://tqe.quaker.org/wealth-and-poverty

Re competition: indeed, you are correct, David. Capitalists want to buy from competitive markets and sell as a monopoly. Market monopolies are hard to sustain. Government monopolies are everywhere. Our federal government is a monopoly and our state governments are competitive with each other. If monopolies are bad, then the federal government is the worst. Looking to it to save us from monopolies is just renaming the problem.

Nate said...

Russel: Comparing the federal government to a corporate monopoly is simplistic and inaccurate. A company's only responsibility (currently) is to its stockholders and the bottom line. The government is (in theory) responsible to all the citizens of the country. While our government has been corrupted by secrecy and money and the destruction of institutions, it's still not really the same thing as a corporate monopoly.

Dr Brin: I think you have something with your comments about aristocrats who don't know revolution. The closest thing many of the current aristocrats have dealt with is the '60s, which was largely nonviolent, and not aimed at most aristocrats. Though there were a large group of people who lost special privileges in the '60s, especially in the South, and many of the other people currently in charge seem to have been permanently scarred and re-fighting the battles against the "dirty fucking hippies" of their imagination. (Probably most upset because on most counts, the hippies were right)

One consideration I've had about that is non-violent protests. Without the threat of violence, it's much easier for the elites and aristocrats to ignore and minimize the protesters, because there's no threat to them or their social order. Millions of people protested the War in Iraq before it began, but were pretty much universally ignored by the media and politicians and aristocrats. Bush and his cronies were going to invade Iraq, by hook or by crook. So no matter how many people waved signs in the streets, they weren't any threat to the kleptocrats plans or themselves.

As to the fate of modern large-scale capitalist representative democracy cum welfare state cum corporate oligopoly continuing, it can't. We're running into environmental and resource limits already. Not to mention the many problems we've created on our own, in large part to the corporate oligarchy. Hopefully that's the part that we quit maintaining, since it's a lot of the reason we're having trouble maintaining the other two. And its goals are directly opposite to the other two, as well.

I wonder what you think of some of Paul Krugman's work, Dr Brin. For example, here. He praises FDR, much like you do, but he calls for more direct partisanship, rather than trying to build bridges. Though partisanship is about parties, not about individuals, so I guess what the two of you are advocating isn't that far apart. Krugman is big on universal health care, for many reasons. I happen to agree with most of them. The biggest reason, for me? Waste. Just like how we should have excellent public schools, we should guarantee health care for everyone, because we can't be sure where the potential for genius or world changing invention is going to come from, so we should do our best to create opportunity for everyone. The way I figure it, besides the obvious benefits to individuals of being healthy and able to understand civilization, it would boost civilization by a lot, too.

Carl said...

Marx got it wrong, pure and simple. The inegalitarian trends he saw were despite capitalism, not because of capitalism.

The flood of desperate paupers who filled the workshops of the day were the result of the enclosure movement. Descendents of feudal lords were converting their overlordships over landed peasants into what we recognize as modern land ownership.

Land ownership is a fixed sum game. This is why Marxism has always proven more popular in old-line agrarian societies than in modern capitalist societies.

Adam Smith predicted the increase in equality that we experience today. He pointed out that as capital increases, the price on capital (interest, profits) decreases. This results in a higher fraction of industrial production going to the workers vs. the capitalists.

The prediction came true.

Jonathan said...

Russell said:
"Re space: 'Always mount a scratch monkey.'"

Huh?

Personally, I make it a policy never to mount a monkey, especially one that's scratching. I'm just not into that whole interspecies thing...

B. Dewhirst said...

Carl, the ghost of Bakunin and I have a bone or two to pick with you if you think this is 'equality'...

Leaving aside the global situation, where over 1/6th of the worlds population are living in -absolute- poverty, and the externalities mentioned above, there is still the question of whether C(c)apitalism encourages or discourages an equalitable distribution of the pie. Depending on methodology the numbers vary, but I'm sure you've heard that the top 1% of the world's wealthy own/control 40% of the wealth. That is as undemocratic and unequal

Now, if everyone started with equal opportunity at birth, one might say they got there by their own bootstraps... however, wealth at that level is highly stratified and becoming increasingly so.

Though the situation has doubtlessly improved since the Enlightenment, we're witnessing the growth of a new noble class. (Consider how many of the present and recent past American Presidential candidates have some connection by blood or marriage to that top 1%, to past politicians-- Romney's father was a governor, Clinton's husband a President, Bush's father a President, Gore's father a Senator, etc etc.

Not equal by far.

Carl said...

B. Dewhirst: compared to the feudal order that preceded capitalism, yes, we are incredibly more equal.

As for the currently huge an unacceptable wealth gap, it is unclear to me that this gap is inherent in capitalism. While governments have some progressive redistribution policies in place, they also have subsidies to the rich in place.

The very process that Adam Smith described -- plentiful capital vs. investment opportunities -- was later damned by John Maynard Keynes as the source of depressions. Since FDR's day, the government has been fighting mightily to provide the rich with ample investment opportunities.

It is not by accident that today Republicans favor Keynesian policies more than Democrats. Should governments run balanced budgets, and workers save for their own retirements, the return on conservative investments would plummet.

If the capital markets weren't so overregulated, it would be possible to fund some real competition for Bill Gates and other super-rich.

Anonymous said...

Nate: One consideration I've had about that is non-violent protests. Without the threat of violence, it's much easier for the elites and aristocrats to ignore and minimize the protesters, because there's no threat to them or their social order

As a protester, you don't win either way. Back when the neo-cons ruled Ontario there were many mass protests against government policies*. The first day of the protests things were peaceful, and the conservative commentators all said that bringing their kids to a peaceful rally proved the protesters weren't serious. The next day there was a bit of violence: a couple of protesters hit a car with their picket signs. (The car had driven through a legal picket line, hitting a picketer and sending them to hospital.) This "descent into violence" 'proved' that the protesters weren't rational and could be ignored.


*Like non-competitively selling public assets to private interests, under a cloak of "business secrecy" that means we still don't know who made how much money.

David Brin said...

Russell, government was invented (in its modern form) in order to create a new, professional elite, to counter the old ones. Siccing elites against each other is a major Enlightenment method. Railing against the federal government is silly. Right now, we are far more under threat from other directions. we need the professionals, right now. And to be wary of them.

FIBM: “Blind” markets means they are not guided by an overall intent or plan. Socialism is derided because central planners cannopt possibly be wiser, in the allocation of efforts and resources, than the quasi-random action of supply and demand, distributed among the largest possible number of well-informed decision-makers.

The face-off between the Soviet and US economies supposedly proved this case... and it did... to a large degree. Certainly the Chinese Communist Party believed so, swerving and transforming themselves, with dazzling agility, into the party of sino-capitalism. But things are far more complicated than they seem.

For one thing, the Soviet commissars also failed because they were oppressive assholes, very little different from czarist thugs. We tend to assume that this is part and parcel of socialism. But the Swedes might disagree.

Secondly - the versions of “capitalism” practiced Japan and China are not free-wheeling and market-ruled. Considerable amounts of GAR is done, allocating resources by state fiat, or by consensus command by industrial councils of high CEOs. Both countries are able to GAR their way into pretty successful export-driven success... over periods of a decade ior two, at a time.

The partial crash of Japan in the 1990s (which I predicted, among the very few who did) showed Adam Smith chuckling. Small cabals of smart top Garmeisters WILL inevitably hit a wall of their limitations -- as F. Hayek pointed out, insufficient knowledge will always plague even the best managers. So will the diseases of preconception, delusion and group think.

Still, while American libertarians and CEO golf buddies chortled, and prattled about FIBM, they ignored the fact that our “blind market” system is run very similarly to Japan and China. A similar clade of top executives, of similarly limited size and similar inbreeding, does much of our allocating and investing. The small size of this band of oligarchs is inherently and fundamentally counter to the basic premise of Smithian market processes. But - like every other oligarchy - they find excuses and rationalizations for shutting down informatiuon flows, reducing consumer choice and siphoning off what isn’t theirs...

...even as evidence piles up that they are doing a really, really bad job, overall! Worse, in fact, than the state-centered oligarchs of China and Japan, who, at least, operate under some imperatives of noblesse oblige. If our own oligarchs were smart and honest, they would either drop their hypocritical cant about FIBM and admit that they are GAR lords...

... or else they would see that their ultimate best-interest will lie with a truly open society.
One that maximizes the number and knowledge of fully empowered decision-makers and market players, allowing the positive sum game to keep lifting all boats. And they would then take their chances as to who gets to “win” next year’s positive sum game.


Nate: do not under-rate the power of civil disobedience, the somewhat angrier cousin of non-violence. CD is immensely powerful, as shown by both Ghandi and King. And our courts know very well the difference between CD and full-scale violence. Acts of CD are “honored” with carefully scaled punishments that deter grumblers, bu will not deter those who feel a passionate injustice and who are willing to pay a day or week in jail, in exchange from the media attention that might rouse the public. Study up on it. We’ll know they are really getting ready to clamp down when either CD starts ramping up or when they start trying to up the penalties.

Nate: market-enlightenment CAN adapt to a changing world. One of government’s jobs is to tweak the market incentive curves so that the market takes into account costs that are longer term, e.g. stealing resources that future generations will need, or poisoning their air. “Blind” markets will NOT take these things into account. Those who prattle this are - in effect - jabbering a zealous catechism.

We have eyes! If we see reefs ahead, we need to steer the ship!

These meddlings should be as simple as possible and clearly consistent, with as little micro-managing as possible. A flat carbon tax would shift our markets toward better responsibility toward the future and the planet, without choosing too many winners or losers. The markets would then adapt.

FIBMers hate this. But most of them are corporatist GARites who just resent moving the locus of elite market biasing from their golf course to a government study group.

Nate: While I like Krugman, I disagree totally with him over tactical priorities. I want health care fixed. But I need our present Civil War Part II to be over, first, so that we return to being PSYCHOLOGICALLY a forward-looking nation, once again. In order to do that, the Know-Nothings must not just be defeated, but routed, trounced, devasted and driven OUT of control of one of our major parties.

Dig it. I see this as partly a fight over the Republican Party. If the nation utterly rejects the neocons, then decent Dole/Goldwater types can reclaim control over the GOP and drive the neocons into well-deserved exile. If that happens, then America can go back to negotiating HOW to face the future - whether to use this market tool or that interventionist one - instead of fighting over WHETHER to face tomorrow.

Anonymous said...

Old Adam Smith got a lot right, including his opinions on profits and prices:

"Our merchants and master-manufacturers complain much of the bad effects of high wages on raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people." (p.113)

And concerning 'those who live by profit':

"The interest of the proprietors of land is inseparably connected with the general interest of the society. So also is that of those who live by wages, but the interest of those who live by profit has not the same connection with the general interest of society." (p.286)

"The plans and projects of the employers of stock regulate and direct all the most important operations of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not , like rent and wages, rise with the prosperity, and fall with the declension, of the society. On the contrary, it is naturally low in rich, and high in poor countries. The interest of this third order, therefore, has not the same connection with the general interest of the society as that of the other two. Merchants and master manufacturers are, in this order, the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of the public consideration. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of the society, their judgement, even when given in the greatest candour (which it has not been upon every occasion), is much more to be depended upon with regard to the former of these two objects, than with regard to the latter...

The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." (p.288)

Michael said...

"Your contempt for public schooling is based upon the notion that machinery of mass education crushes creativity. You seem to be saying this despite living in the most incredibly creative society of all time. Cognitive dissonance!"

Look at Athens. That was a few tens of thousands of random people!
Per-capita its creativity DWARFED ours. Look at the creative output that a few hundred thousand literate Englishmen produced in the 17th century. Shakespeare, Newton, etc.
or just look at this
http://www.newscientist.com/article.ns?id=dn7616
http://www.isteve.com/2003_QA_with_Charles_Murray_on_Human_Accomplishment.htm

Are you really calling De Tocqueville a "romantic psychopath"?

"Um, where are you going to get enough genius-level teachers to give every kid a slot at Summerhill?"

Sudbury type schools barely use teachers, and aren't that different from Summerhill.

As for Summerhill requiring alpha kids.
http://www.tubmanfreeschool.org/links.htm

Elon gets lots of points for Tesla motors. I'm just wondering "why space?". If he was the only one, it would make some sense, but he's not and it doesn't.

Michael said...

Michael: aside from the sheer issue of the dream that space is, I'll just note that if we ever achieve seriously affordable space travel - which will invariably lead to eventual space colonization, if only by dreamers - we might finally have non-zero-sum land ownership.

Zechariah said...

Athenian teachers diddled their students. I'd rather avoid that. And I'm not convinced they were more creative than we are. Seriously, how are you measuring this? Does each play, poem, statue and structure have a certain number of creativity points attached to be divided among the populace? If so, are you counting the slave populace in either of the two examples you cited?

Anyway, I think I had plenty of encouragement to be creative in High School, both officially (write a poem or short story) and unofficially (have you seen the trouble some guys go through to ask out a girl in an innovative way? or the trouble the girl will go through to turn him down in an innovative way?)

And if any of you plan to send your spawn to a private school, I hope you arm them with extra tough skin, because at my workplace we're merciless to the kids who went to catholic or montessori schools. "You didn't know *insert factoid here*? I guess they must not have covered that at the FANCY SCHOOL! ha ha."

Jonathan said...

I still want to know what the frak a "scratch monkey" is, why I should mount one, and where exactly such mounting should be (on the wall of my den? If so, I'll need a little lead time - have to build a den first).

And what does "mounting a scratch monkey" have to do with space, anyway?

Michael said...

Michael: I see continent shattering 9/11 as a more likely consequence of affordable space travel. I sincerely think that space-oriented views of the future generally suffer from not appreciating the amounts of energy involved in space travel.

Zechariah: I didn't say Athens was better, just more creative. If you don't agree with me that they were more creative that's fine, but frankly I think you are unable to appreciate how new those ideas they discussed were back then. The 17th century English didn't have slavery and institutional pedophelia, but I also think that our society is MUCH better than theirs. Still, they were blatantly MUCH more creative than we are per capita, and especially per-educated-capita.

B. Dewhirst said...

Jonathan:

google says:
http://www.acme.com/jef/netgems/scratch_monkey.html

wrt Athens:

The short-lived Athenian miracle seems to have come about for two reasons... one, they hit upon new ways of knowing which were very powerful (and whose successors are firmly ingrained in the Enlightenment) and two, a community of well-educated people was free (and encouraged) to talk amongst themselves.

Contrary to the traditional Capitalist thesis of the lone genius, creativity is often the product of a group of people working together, bouncing ideas off of each other, etc. (This, I feel, is one of the reasons Marx felt the Dictatorship of the Proletariat would be so productive, so innovative... though I feel he ascribed to nature something which was nurture.)

wrt Capitalism as the Enlightenment's baby:

The Enlightenment had three (or arguably four) children: Capitalism, Socialism, and Anarchism. (Some would add Fascism, but I agree with our host-- it was/is romantic Wagnerian proto-neocon nonsense which was/is a reaction -against- the enlightenment.)

David Brin said...

Seems a good moment to suggest a look at one of my essays... my book review of Jared Diamond's book COLLAPSE.

http://www.davidbrin.com/collapse.html

Mark what Arnold Toynbee said about the necessity of a society nurturing its "creative minority" -- a crucial element of civilization.

Look, I am a huge admirer of Periclean Athens... or, at least, of Pericles himself. But it is with open eyes to their imperialism, brutality, racism, slave-holding and all that. Most of the things that the Platonists derided democracy for, they indulged-in, in spades. Their mob-like swerves culminated in allowing their wave of "neocons" - led by Alcibiades, drawing them into a debilitating and disastrous foreign war...

Yes, they were astonishingly creative... but count the number of men involved and it really was only a few hundred, same as during the Italian Renaissance. What seems to make a "renaissance" is sudden emergence from darkness. It is not only the creative surge, but the comparison with what came before. And after.

For anyone to look at America from 1942 to 1999... and not see a similar surge, a similar explosion of creativity, only shows myopia that comes from living far too close to the observed. Never has there been anything remotely like it. Pick an art, pick a science, pick a hobby or passtime. There isn't one that did not skyrocket. Indeed, many were re-invented or rediscovered, amid a frenzy to find something others had missed.

Indeed, the problem isn't just one of romanticizing the past and denigrating one's own time. The very SUCCESS of our own renaissance helps to mask it! Because of the natural (and also romantic) tendency to downgrade anything that the masses participate in. Hence nobody marvels at an airplane, anymore. They would have (and once did) when flight was limited to the brave and the rich.

Just have a glance at commercial art... advertising... which is where the vast majority of trained artists now make their living. They have too! There are TOO MANY ARTISTS for even a fraction to make a living the old fashioned way, off rich patrons and churches. (Was that better? Really?) We are all so spoiled, drenched in excellent and creative images, that we seldom stop and LOOK at the ads and such, noticing that much of it is skilled beyond anything artists of the past could have achieved.

(And that leaves out the NEXT layer! The amateurs. OMG what another surge that is.)

Skilled, but is all of it INSPIRED? Well, of course not. Duh. You find that only at the apex. So? Nowadays, if a kid at ANY social level shows artistic or musical talent, there's a double-digit % chance he or she will get attention and some training.

No, the issue is something else. Is American civilization turning its back on its "creative minority" in a glorification of dullardness and rejection of change? I'd hate to see later historians say "this is when that renaissance started grinding to a halt."

Doug said...
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Doug said...
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Anonymous said...

The idea behind "mounting a scratch monkey" is related to the idea that its a really good idea to have a backup of anything critical, such as important data, civil infrastructure, and, in the context of space, the human race. "Don't put your eggs all in one basket" is a related meme.

Life has all but been extinguished, as far as science can tell, multiple times by meteors, giant volcanic eruptions, and other events that made the planet pretty much uninhabitable. Should such an event happen right now, we'd be out of luck. If we can get a firm foothold in space, whether it be self-supporting colonies on other planets, or some sort of Schismatrix scenario of space habitats and asteroid mining, then we'll have redundancy in case of a megadeath event. (Now whether the Terrans would do anything to delete the backup out of spite in such a scenario is another story.)

If nothing else, space opens up a huge amount of resources, if speculations are correct. The debris field between Mars and Jupiter probably contains more valuable elements than the crust of the Earth, and the Kupier belt more water than the oceans, not to mention other volatiles such as methane and ammonia. Who knows how much stuff is in the Oort Cloud?

Before we can access these riches, though, we have to figure out how to get out of this gravity well on a budget. Personally, I'm in favor of a space elevator or three, but we'll need a more economic people and material rocket in order to build one anyway.

So, yeah, Bezos et al researching cost-effective (and possibly eventually profitable) rocketry moves us in the right direction towards "mounting a scratch monkey."

Brother Doug said...

Interesting discussion I tend to agree with Brin. Japan despite its collapsed economic bubble is still the world’s largest producer of cars under a guided capitalism. I think the important thing to realize is that The CEO of Toyota even said that if it was up to him he would produce every Toyota in Japan because it was more profitable there than any ware else. This despite no oil, imported iron and raw materials, higher worker salaries and higher land costs. In Japan majority shares of all the major corporations are owned by government pension funds. That sounds a lot like what Marx predicted.

Brother Doug

B. Dewhirst said...

Doug, I agree, and would add:

Also, all this business with Alan Greenspan et al. mucking with the economy to try to stave off recession/depression/stagflation and the other nasty little symptoms of the business cycle, smack of nothing quite so much as planning. Big corporations are of a scope with nothing other than small (or medium) states... and insofar as they have a business plan, they are "small" planned economies.

The real rub comes when you don't like who is doing the planning. (After all, Greenspan was never elected, and CEOs are nominated from their elite-- the new feudalism, and we the new serfs.)

adiffer said...

I don't know that we are glorifying dullards. What I don't see is a gut feel that we really are involved in a positive sum game. I mention this to others on occasion and they think I am guilty of wishful thinking. How can things be that easy, they say? I say the game isn't THAT easy because it's still possible to loose if you play stupidly (mostly blindly) but they don't see it (oddly enough). 8)

My consolation is that our collaboration networks don't really need everyone to see the big picture. Our 'renaissance' will manage well enough if they don't do anything too stupid.

yah, yah... 8)
Time to hunt more ostriches.

sedicious said...

Health Care vs. Civil War Part II

I see this as less about tactics than about marketing. Krugman appears to be trying to appeal to a different audience than Brin, and for his audience health care is the much more resonant issue. Rather than pose them as competitors in meme-space, why can't they be allies? Are the health care mess and the Culture War not both symptoms of the same underlying pathology? Is Krugman really saying health care can be fixed without winning the culture war—or is he saying, as I read it, that the way to get disillusioned millions of voters onto the enlightenment side of the fence is by telling them it's about health care?

The Guy said...

At the end of Rudy Rucker's "Master of Time and Space" everyone on Earth has one wish granted, the resulting collapse of the economy forces humans into a diaspora of relationships. Come to think of it, a lot of Rudy's stories end like that.

The point is that, like Marx, Rudy has pushed the envelope past what in physics we might think of as a phase transition. Does our society contain such hidden phase transitions? Events like the great depression may be evidence of such and anyone involved in the early technocrat movement certainly planned on it being so, as do many Marxists.

However your point about the adaptability of the human agent is most salient here. To what degree does our adaptivity form concentric stability around potential transitions? Effectively parasitising just such transitions.

The positive sum gains of investing in exponentially empowering technology has been proven by the last 300 year's explosion in information technology. Does this procedure have sufficient momentum to overcome both the ingrained social inertia of the world's welfare states and the individual's tendency to hoard beyond all reasonable need or desire? One interesting set of behaviors which might make me think so is the continued existence of open source projects such as www.reprap.org or the Champaign-Urbana Community Wireless Network. In their own manner these are actually systems parasitic upon the current architecture but they contribute in an ongoing process to the expanse of personal empowerment regardless of rank while also insuring technological progress.

David Brin said...

I never meant to diss Krugman or health care. While it is as antural as apple pie for a contrarian like me to find fault with many aspects of Michael Moore's somewhat dishonest screed, I am not stupid enough to imagine that almost anything wouldn't be better than our present corrupt system. Clearly, the utter failure of the market - in this case - requires assertive action by the nation as a whole.

But I just don't see those motivated by health care needing encouragement to vote, in 2008! We do not need to fight that battle. What we need is to convert several million ostriches to vigorous (if temporary) alliance with us, in saving the nation... and for many millions of other Republicans to sit, sullenly, at home. To do that will require Democrats who are willing to speak to issues like national security, fiscal responsibility and lawfulness.

See an example:
http://massaforcongress.com/index.asp
This is the type of guy who the dems should be pushing in every gerried gopperhole. Yes, none of you live near Rochester. Still. Send him a few bucks, if you like. Say I sent you!

Phase transitions are scary, Guy. The singularity gives me shivers. And I know more about it than most. We REALLY need the Enlightenment tuned up, to deal with it... but that's the rub. Enlightenment boldness will also bring the singularity faster.

Doug S. said...

Wow, it seems Eric Massa has raised $110,653 through ActBlue...

Ron Davison said...

Thanks for the recap and analysis. I enjoyed it.

It seems odd to me that one of the things overlooked in the reports on the death of communism is that capitalism, too, died sometime in the last century.

To me, it seems like the real issue has to do with a shift in the limit to progress. Marx thought capital was vitally important - just had a different idea about how it ought to be allocated and created. But what happens to capitalists and communists when the limit to progress shifts from capital to knowledge work? The same thing that happened to the landed aristocracy when capital emerged as the new limit to progress shifted from land to capital during the Enlightenment.

reason said...

Ron...
I hope you don't me saying I think you have it wrong with the knowledge economy. David mentioned the singularity - I don't think the "knowledge economy" can take us that far. You see there is a fundamental limit, the capacity of the human brain. To train an expert takes an ever increasing time, and his expertise has an ever decreasing half-life. We need to leverage the human capacity for understanding enormously or humanity will be overwhelmed by its own knowledge. We already are talking of a web that is data rich and information poor. There is a great danger of that situation becoming worse, of attention and understanding becoming absolute limiting factors. I'm not convinced that the knowledge worker is the owner of the future, I've already had to reinvent myself often enough, thanks. (And do you know how soul destroying it is to create useful niche interfaces with short half-lives - that get replaced eventually with something cheaper and far better?) We need a world that humans can find a place in, not just super-intelligent machines. I'm not sure I know what that future will look like (at the moment we have an unholy mess) but I have hope we can work it out.

B. Dewhirst said...

Reason, working within this larger metaphor...

Knowledge-workers aren't the owners of the future... they are its proletariat.

David Galiel said...

Whilst we thoughtfully push back the know-nothing hordes on our right flank, we must not be oblivious to the growing threat of know-nothings to our left.

In fact, the growing ranks of self-identifying "progressive" youth alienated from the rigid religions of their youth seem all too eager to latch onto new ideologies with the same blind, blindered, authoritarian zealotry as the classic religionists they reject.

Worthy liberal values such as enfranchisement, feminism, diversity and opposition to tyranny-by-majority are perverted, distorted beyond recognition into hateful, antagonistic, divisive, exclusionary, vengeful, authoritarian and vigilantist cadres that tolerate no dissent.

This threat from the neo-Puritans should not be casually dismissed. They share with many on the Far Right a disdain for, if not outright rejection of, free speech, democratic republicanism, rule of law, evidence-based policymaking, science and reason - and, most importantly, an understanding that shared, free society necessarily includes compromise and moderation among differing, often competing interests and opinions.

The neo-Puritans are doing to small-d democrats what the Tea Party has done to big R Republicanism - undermining it from within, turning it inwards and divorcing it from reality.

What ails us as a society, if not as a civilization, is an anti-reason counter-Enlightenment whose roots are not in free-marketism so much as they are in anti-moderation.

pulnimar said...

"In contrast, Nietzsche and Spengler and their ilk were simply romantic psychopaths. Their fantasies bore no relation to actual history, actual human nature, or any social pattern that has ever existed, or ever will."

I do not know who Spengler is. However:

Patterns exist within humans that are not social. Instinctual variations* do exist. The one you'd be most familiar with other than the social would be the self-preservational, in that economics partially encompasses it (labor, purchasing, etc... ultimately boil down to the individual's decisions).

Nietzsche, while obviously aware of the larger social sphere, was, like you and Marx, ultimately speaking through his primary instinct. Though for him it was the sexual (e.g. http://4.bp.blogspot.com/-eQMVflmWdFE/Tl7MpDwP0OI/AAAAAAAABmQ/cR1aYMJGeGk/s1600/thewhippic.jpg).

I'm not going to defend his statements, I'm just going to say that it is improper to analyze them solely from the social, and thus to stereotype them as psychopathic romanticism. By doing so you miss out on the kinds of human nature that is described, at least in part, by them. Sure, throw out all of his social projections, but don't be so naive as to throw out his thoughts on human nature. Because while incomplete, they are likely no more incomplete than your thoughts on human nature.

I wouldn't compare Nietzsche's most famous writings to Marx, but they are likely comparable to the Unabomber manifesto.

* - I've really only seen them described by enneagram of personality typologists, and in the products of J.P. Guilford's Structure of Intellect model.

A brief discussion of the variants:
http://www.enneagraminstitute.com/articles/nartinstvar.asp