Where are the Marxists?

John Quiggin wonders where the Marxian economists have gone.

I don't think Marxist economics per se will shed much light on the economics of the current crisis. Marx did not, I think, intend to create a complete and detailed analysis of how capitalism works, nor have his successors pursued such a project. OTOH, one could very well say that Keynes was a capitalist economist heavily influenced by Marx, and Keynesian economics is itself Marxism applied to capitalism. Keynes didn't get it all right (neither did Darwin, Einstein or Heisenberg), but he got enough right to be to economics what Darwin et al. were to science.

The fundamental issue is not really economic. Keynes described, and we (at least those of us who read him) already understand the current crisis in broad terms: it's an almost paradigmatic case of conflation of risk and uncertainty, and the massive transfer of effective demand from the working and professional-managerial middle classes to the capitalist class. We have massive unemployment because industry can't easily shift employment from production of mass-market commodities to ultra-luxury commodities for the tiny capitalist minority, and also because in the face of uncertainty, members of the capitalist class are hoarding their wealth to compete in the now sharper struggle for power within the capitalist class.

The deeper issues are social and political.

I keep seeing liberal and progressive economics blogs give us laundry lists of things we "should" do, all of which make perfect sense according to Keynesian economics. It seems not just correct but obviously correct that these "shoulds" are required if capitalism is to retain what little positive social and political morality it ever had. We knew six decades ago what we should do, we actually did many of those things, and they were successful. Given that Keynes is not just correct but obviously correct, and given that the entire capitalist west successfully ran their economics (more or less) along Keynesian lines for almost thirty years, we must ask: why did the capitalist class abandon Keynesian demand-side economics for classical supply-side economics? If we don't understand at a deep level why we abandoned Keynesian capitalism, we don't have a hope of restoring it.

I see Marx's chief contribution as the understanding that social change is not an ideal process, a process of coming up with new and better ideas, ideas that are adopted and rejected on their abstract merits. Social change is rather a material process, an interaction between physical, material forces (and the thoughts that people actually think are most definitely physical, material properties of our material brains). Marx was, perhaps unfortunately, more a philosopher than a scientist, and his conception of historical materialism is primitive, and substantially incorrect in places. (I can't remember the specifics, but I've seen interpretations that communism is a "science" in the sense of a systematic philosophy, not an empirical discipline conducted according to the scientific method.) Still, if even the charlatan Freud deserves credit for at least persuading the world that psychology could be a science (and he does), the more intellectually honest Marx deserves credit for saying that social development is a material process and can be studied scientifically.

Marx's contributions to historical materialism have been developed — perhaps again unfortunately — mostly by humanities academics, politicians and revolutionaries, rather than scientists. Not to knock any of these endeavors, or those who pursue them, but philosophy is not science, and revolution is the bastard child of desperation and expediency: necessary in some cases, but hardly conducive to the rigorous and dispassionate self-scrutiny required for effective scientific investigation.

Still, one can draw some straightforward conclusions directly from Marx. Most obviously, no abstract quality of an idea can ever act directly as a causal force for that idea's adoption (or rejection) in society. For an idea to be adopted socially, a group of people must actively understand and believe the adoption of their idea is in their interest (and it doesn't hurt if the idea actually is in their material interest), and they must organize and act to implement that idea.

You can tell me we "should" do this, and we "ought" to do that, and I can even rationally understand that you're correct, but unless you tell me in whose interest the idea is, and how they're going to organize and act to implement the idea, you're just building castles in the clouds. (It should be pretty clear right now that simply voting for the Democratic party is not a plan for actually restoring Keynesian capitalism or its underlying moral values.)

Looking more deeply, we can see deep parallels between "Marxian" dialectical materialism and Darwinian biological evolution. The mechanisms are very different, of course (and Darwin himself still counts as a genius even though he did not discover the most important mechanisms of biological selection). Indeed one can clearly see that biological evolution is a material process. More importantly it is essentially a dialectic between the "contradictory" forces of heritable variation and natural selection.

We can extend that paradigm to social and political evolution. First, social selection seems to operate not at a scientific level, but at a moral level. Classical economics is only partly a scientific attempt to understand economic behavior; it is as well (as Keynes himself noted) a theology to justify a set of moral values underlying Randian laissez faire capitalism. (I think we cannot overestimate the impact of Atlas Shrugged as a "rallying point" for those who shared Rand's moral values.) Second, both natural and artificial selection are negative processes: ideas no less than genes are selected not for but against. Therefore any idea available to variation that is not selected against will persist and spread. And therefore we can conclude that — whatever the mechanisms of variation, heritability and selection — Randian moral values were not selected against. Furthermore, some of the moral values that found expression in the particular Western implementation (half-assed as it might be) of Keynesian economics were selected against.

We do not need more "good ideas". Well, we always need good ideas, but we already have a whole store of good ideas that are not being implemented, and coming up with even more new and better ideas is not our immediate task of the highest priority. What is more important is to apply both our understanding and our will to intentionally selecting ideas. And since selection is an essentially negative process, we must select against "bad" ideas, ideas that do not further our interests, especially our material, economic interests. Right now, the selection pressure of liberals and progressives is serving at best only to slow the adoption of "bad"* Randian moral values.

*Ideas that work against my own material interests and those of (I hope) most of my readers.

The "problem" is that if the people actually develop the will and power to perform this selection, if they develop this will more than intermittently to temporarily and minimally alter society only in conditions of incredible hardship, then they'll go all the way to revolution and eliminate the privilege of the capitalist class. There's no middle ground: if they do not develop this will more than intermittently, we will continue to cycle between prosperity and catastrophe.

Keynes has adequately explained the economics of the current crisis. But only Marx shows us the political and social way out.

Atheist Unity Convention

PZ Myers and Hemant Mehta are pushing for an atheist "Unity Convention". Good for them, I suppose, but I personally don't think it's all that great an idea. More importantly, I wouldn't attend such a conference, and if I were a member of an atheist organization, I wouldn't vote to subsume our group's yearly convention for a unity convention.

First, I personally am well and deservedly despised by many in the atheist community. There are a lot of atheists who don't just disagree with me, who don't just think I'm a giant asshole, but consider me a disgrace not only to atheism but to humanity in general. I'm not complaining — the feeling is more-or-less mutual — but why would I want to hang out for a whole weekend with people who actively and passionately hate me? And why would they want to hang out with me?

Atheists as a whole do not have any shared interests, only a very broad and statistically vague disbelief in a personal god. Even naturalist atheists as a whole have no shared interests, only a somewhat narrower and more precise epistemic privilege for science... and there are already plenty of scientific conferences.

There's not just a lack of shared interests, but a lot of mutual contempt. The "appeasers" don't just disagree with the "shit-disturbers", they despise them. (I can't think of anything more nauseating than PZ Myers cuddling up with Chris Mooney.) The atheist communists despise the atheists Randians, and vice-versa, likewise with the skeptical atheists and the woo-woo Buddhists.

A "Unity Convention" would simply see members of the various atheist groups hanging out with each other, with a little bit of worthless ecumenical tokenism. At worst such a convention will be full of very heated controversy — which would seem to defeat the purpose of a convention specifically designed to show our unity — at "best" it would devolve to the lowest common denominator, an endless repetition of, "Do you believe in god? No? Great! Me neither!" Yeah, good times.

There's nothing wrong with these deep conflicts, conflicts that go past disagreement into real enmity. Atheism is not a moral or ethical position, and there's no objective truth to any moral or ethical position. Substantive ethical differences are not the same as disagreements about scientific truth; there's a degree of ethical difference where there's no appropriate response other than enmity. The Randians and Communists, for example, both believe the other promotes bullshit propaganda to literally enslave humanity; they are agreed only that god talk is an inappropriate way to do so.

(Keep in mind that enmity does not mean violence. The accommodationists and the confrontationalists despise each other, but they don't want to kill each other, and there's no reason to believe they would. Enmity is different too from factionalism: enmity arises from substantive ethical differences; factionalism from blind loyalty. Enmity only superficially resembles factionalism in that both tend to create emotions of hostility. And even factionalism usually represents an underlying substantive ethical/political division; even in factions within a religion, the differences in apparently meaningless scriptural interpretations follows from a more substantive ethical difference.)

If the goal is just to get as many atheists together to just stand in the same place, then it would seem easier and more effective to organize a "Million Atheist March". I have no desire to spend a whole weekend actually talking to some of the doofuses and fucktards in the atheist community (to be fair, I can't see those who think I'm a doofus and a fucktard wanting to spend a weekend talking to me either) but I could be persuaded to spend an afternoon hanging out in the general vicinity of the doofuses.

(The capitalist media would probably ignore such a march, but "A Million Atheists Kiss Ass at Unity Convention" doesn't smell like news, and it would be difficult to see how the purpose of unity would be served by the headline, "Controversy Breaks Out at Atheist 'Unity' Convention.")

If y'all want to go to a Unity Convention, knock yourself out: I'm not going to stop you. But I won't go. If it happens, I hope it'll be successful, in the same sense that I hope a guy falling from a building will be miraculously saved by a passing truck full of pillows. But likewise I don't expect it to end well.

Economics as theology

It must have been due to a complex of suitabilities in the doctrine [of classical economics] to the environment into which it was projected. That it reached conclusions quite different from what the ordinary uninstructed person would expect added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue. That it was adapted to carry a vast and logical superstructure, gave it beauty. That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress, and the attempt to change such things as likely on the whole to do more harm than good, commended it to authority. That it afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority.

— John Maynard Keynes

via Brad DeLong

Unemployment

Economist and former Clinton Labor Secretary Robert Reich believes unemployment is likely to stay high:

• Double-dip recession (10%): Recession deepens, unemployment rises
• Stalled recovery (20%): Unemployment remains high
• Jobless recovery (40%): Already-employed workers work more hours; unemployment remains high
• Solid recovery (20%): Some jobs created, but mainly overseas; American unemployment remains high
• Strong recovery (10%): American jobs created, but more people start looking for jobs; nominal unemployment remains high

Reich notes that the Democrats' electoral success in the mid-term elections next year will depend not on the facts — Reich believes that no matter how you slice it, we'll be looking at 10% nominal unemployment — but rather on how the Democratic party manages public perception of those facts. You'll excuse me, I hope, if I'm not terribly confident in the Democratic party's ability to do so. Obama and the Democrats pulled off a last-minute squeaker against the party of the Worst. President. Ever. and Obama was running behind until the financial system flew into the side of the mountain just before the election. I think it's very likely that the Democrats will not just lose seats (which always happens) but might actually lose their majority in one or more houses of congress. And with the new 60 vote requirement in the Senate, even losing one or two seats there will block even a capitalist-friendly Keynesian recovery, much less any progressive gains.

Health care reform isn't going to help the Democrats. Even if they manage to pass a bill before the mid-terms, it won't be a progressive victory until it's actually implemented, and a hostile congress can very easily gut the implementation. (The easy way is to structure eligibility so that the working poor somehow never manage to qualify, or are required to sacrifice too much of their "disposable income" (the income that creates economic demand) and then paint the program as a give-away to the lazy and idle.

It's not so much that communists such as myself want to see more suffering among the people and the working class. It's more that, under dialectical materialism, such suffering is virtually inevitable. The government is run by the capitalist ruling class: conflicts within the class will reach a point where the interests of the people are the first sacrificed. This will go on until either the people themselves being demanding their own interests — and enforcing those demands or until some demagogue organizes them for the interests of a new ruling class.

The new communism

Since time immemorial a minority has set itself up as a ruling class. Their justification has always been: "Let the naturally superior rule and judge, to the benefit of both the superior and the inferior." Putting aside the question of what constitutes "natural" superiority, we can see with our own eyes that every minority rule, on whatever basis they asserted their own superiority, has in the end driven the ruled into suffering, despair and ruin. This suffering is not the result of the sadism of the ruling class or their hostility to the ruled, but rather because like the battles of the gods in the Hindu Vedas, when the rulers compete against each other, it is the ordinary person who ruined, ruined not just without mercy but without any more consideration than a mouse incinerated by an atom bomb.

Today's suffering and ruin is no exception. We are suffering today from not only the material poverty caused by unemployment, but also by lacking a fundamental human need: the need to be useful and valuable to one another. We are suffering today from the loss of what little material and financial wealth the capitalist ruling class has deigned to allow us to accumulate, for our own security and a buttress against starvation, illness and old age. And we are suffering not because the capitalist ruling class has declared war on the working ruled class, but because of a titanic struggle within the capitalist class, a struggle in which we are at best pawns, and at worst nonentities. The capitalist class is not presently hostile to the working class, they are simply indifferent to our suffering. And this indifference should cause us more rage than active hostility. The capitalist class cares more for animals — they show animals more mercy and pity — than they do for the human beings of the working class.

And why "should" they care? If we in the the working class will not stand up for ourselves, for our own needs, for our own wants, for our own desires, why should anyone in the capitalist class stand up for them? And if we do stand up for ourselves, we will no longer be ruled, justly or unjustly. And that must be our goal, from no higher motive than self-preservation, to rule ourselves as a community of people understanding that working for our mutual benefit makes everyone better off.

But do we not even now rule ourselves? Isn't the United States a democracy? No, we do not rule ourselves, and no, the United States is not a democracy in anything but name. The United States is ruled by the capitalist class; the people have at best a voice in which faction of that class exercises the limited power of official government.

Can anyone become a representative, a senator, a president? Of course not: without the active assistance of the capitalist class to accumulate a fortune for campaigning (itself simply transferred to other capitalists, the owners of the media) an ordinary person cannot be elected to any official position more powerful than garbage commissioner. Even those who claw themselves onto the bottom rungs of state power in a capitalist "democracy" can rise only if they demonstrate their value to the capitalist class.

Do you even personally know who represents you? Do you know your representative or senator in the United States congress? Do you know the state legislator who represents you? At best, a few working people know their representative in the city government, but many do not. More importantly, does your representative know you? Does she care about you? When you personally are suffering, does she suffer too from empathy and fellow feeling? The answer to all these questions is "no". To your representative, you are nothing more than a point on a graph, and the only property she cares about is whether you'll choose her faction over her opponent's. She does not work for your benefit; her only consideration is for causing you slightly less suffering than her opponent will, or appearing to cause less suffering.

We have at least a tiny little bit of "democratic" control over state power. If we do not like one faction of the capitalist class and their representatives, we can, if we work really hard, choose another. If George Bush and the Republican party do not suit us, we can take away their state power and give it to Obama and the Democratic party. But we do not have even this minuscule control over economic power. No matter how much we might disapprove of how Bill Gates spends his economic power, no matter how detrimental to our own interests his use of "his own" money, we cannot even transfer that power to Warren Buffett. Our own interests, our own feelings, our own benefits: none of these are even relevant to the use of economic power.

(Remember that one objection to even the limited democracy we have now was that the king and the nobility owned their official political power, and they were entitled to use that power arbitrarily and without formal consideration for the interests of the ruled.)

This absolute, unconditioned right to exercise economic power is justified by the supposed sanctity of property. But is property really sacred? Of course not. Your property, what you need and use for your very survival, can be taken away at the whim of the capitalist class. Property is what we hold and use for survival and well being, and what the working class holds and uses — our homes, our labor, our jobs — can be arbitrarily taken from us as the whim of the bank, the landlord, or the employer. The "sanctity" of property rights means that who have no property — the working class — therefore have no rights. We own only our own lives, our own labor power, and at the end of the day we are free only to exercise that right by choosing between submission and starvation.

But we are not our property, and we have a third choice: we can choose to rebel against the ruling class, to refuse to submit, and to take by force what is morally ours: not just our lives and our labor power, but our labor itself. And we can work not for our own selfish benefit, our own gain at another's loss, but our mutual benefit, where we all gain together, as befits the deeply social and empathic species that is humanity.

The choice is ours alone. It is not by any means certain that the workers or the masses of ordinary people are suitable for anything but misery, poverty and slavery. If so, we will indeed always be miserable, impoverished slaves. But if not, it is definitely certain that we can escape slavery only through our own efforts: freedom, liberty and the unimaginable wealth and good life we now know how to create will be ours not through the sufferance of any faction of the ruling class, but only by our own determined efforts against the violent opposition of those who would enslave us. We can choose only between taking freedom, or having it forever denied us.

Antiterrorism

I wish that, just once, some terrorist would try something that you can only foil by upgrading the passengers to first class and giving them free drinks.

— Bruce Schneier

The great divide

Robert Reich says,

As long as income and wealth keep concentrating at the top, and the great divide between America's have-mores and have-lesses continues to widen, the Great Recession won't end -- at least not in the real economy.

Indeed. I doubt those at the top will voluntarily give up their income and wealth, nor their privilege to continue concentrating it, no matter how bad life gets for those of us on the bottom. We will, at the end of the day, have to take it from them.

Capitalism and abstract ownership

Abstract or "absentee" ownership, especially abstract ownership of capital, is an externality to markets: it contradicts a fundamental assumption of "free" market economics. Capital ownership as an externality is largely ignored not just by Randian (Chicago/"freshwater") economists, but also Keynesian ("saltwater") economists. Economists assume that if there's an economic case for the allocation of capital to an endeavor, capital will be allocated to that endeavor. Because the capitalist class is internally competitive, and because they are largely rational (either by intelligence or selection), this assumption is often at least partially met; the externality of ownership is often mostly irrelevant. However, under certain circumstances, the externality dominates economic behavior; in all circumstances, the externality biases economic behavior to some degree.

To understand and justify this assertion, let me first define my terms.

Abstract ownership is ownership is ownership (in the common, intuitive sense) without physical possession and use, in contrast to concrete ownership, ownership with physical possession and use. I physically possess my car (it's in my driveway; I alone have the keys), and I am its sole user. I therefore hold concrete ownership of my car. My landlord, however, does not physically possess my apartment — indeed he cannot usefully physically possess it — therefore his ownership is abstract. Additionally, he borrowed money from the bank; until the loan is paid back, the bank still abstractly owns the money even though my landlord "physically" possesses and uses it; this abstract ownership entitles the bank (and its shareholders) to collect interest. Furthermore, I have deposited money in the bank, which the bank has loaned to my landlord; my abstract ownership of that money obligates the bank to pay interest to me.

Capital is labor time expended in the present instrumentally for a benefit in the future. When Acme construction built my apartment building, labor time had to be expended at that time to collect and fabricate the materials and assemble them into a house. All that labor time had to be paid for at the time the house was built: the workers who built the house needed to eat then, not now (when I myself am deriving benefit from the house), and all the people who worked directly or indirectly to feed those workers needed to be paid to sacrifice their immediate consumption then, not now.

Abstract ownership entitles the owner to collect economic rent for the use of the object owned. In a truly free market (or a market that strongly resembled a truly free market) the rent (price) would fall to the cost of creating, maintaining and reproducing the object owned, including the owner's administrative time. In a truly free market, then, abstract ownership should be just another job. But we know empirically that abstract ownership is not just another job: abstract owners of capital consume or control orders of magnitude more labor hours than they contribute. Indeed it is often the case that abstract owners of capital consume orders of magnitude more labor hours than an ordinary worker while doing no work whatsoever. Therefore we must conclude either that the derivation of our microeconomic conclusion that prices always fall to cost is fallacious, or that one of the assumptions of that derivation is not applicable to the real world. The derivation is not fallacious, so there must be an assumption that does not hold.

It doesn't matter what "natural" (not intentionally imposed by human beings) barriers exist to the abstract ownership of capital. Microeconomic theorems prove only that it will take more or less time to overcome those natural barriers and achieve sufficiently wide distribution of abstract ownership of capital to reduce its price to its cost. Even if that time was on the order of a millennium, we should see over just decades a trend towards wider distribution of abstract ownership of capital and a decrease in the rent collected by its owners. However, the observable trend is (on the whole) towards the concentration of capital into fewer hands, and an increase in the rent collected by its owners.

There is a small short-term, local, and individual selection pressure against saving for capital formation and therefore indirect selection for immediate consumption. This selection pressure is large enough that non-human animals — whose evolution is driven by extremely short-term selection pressures — do not engage is large-scale capital formation; their capital formation is limited to very small-scale endeavors such as beavers' dams or birds' nests, or endeavors that have accumulated over tens or hundreds of millions of years (and very narrow specialization), such as beehives, anthills, and termite mounds.

Human beings, however, by virtue of our big brains, can overcome short-term, local and individual selection in favor of longer-term, global and social selection. We can "think our way past" some selection pressures and away from a local "fitness" maximum to a higher global maximum. The vast and (at an evolutionary time-scale) instantaneous social and economic progress we have made as a species is overwhelming evidence that our ability to overcome local selection pressure is not merely present but enormously powerful. Achieving an optimally efficient distribution of capital ownership — defined as a distribution that causes the price of capital to be at its cost — should be not just possible but inevitable.

Point out any natural (non-human) obstacle to the efficient distribution of capital, and I'll show you a strategy to overcome it. I'm not that smart: if I can do it, anyone else can. Anyone who successfully implements an idea should be able to transmit that idea to everyone: the idea, by virtue of its very success, should become ubiquitous. Take, for instance, economy of scale: owning a small amount of capital isn't very beneficial, but owning a large amount of capital is disproportionally beneficial. This natural barrier is easily overcome by creating a social group that pools its individually small savings into a large enough size to be mutually beneficial to the members of the group. Indeed this is precisely the idea behind the mutual fund.

The only explanation for capital ownership to be distributed not just sub-optimally but the complete opposite of an optimally efficient distribution must be the presence of some externality. Moreover, this externality must not be natural (nature has never shown an ability to out-think human beings) but rather artificial, imposed by human beings.

Abstract ownership requires social coercion. I can physically protect my car by myself, by locking it and holding the key, but my landlord cannot physically protect my apartment: the whole point of renting it to me is to let me use it. (Likewise, Avis cannot physically prevent me from stealing a rental car: their whole business consists of giving me the key and physical possession of the car.) My landlord must necessarily depend on the social construction of law and custom that enables him to demand that the sheriff, who has a gun, to coercively evict me from my apartment if I fail to pay the rent.

The primary means that the capitalist class uses the socially constructed basis of enforcement of abstract ownership is indirect: law and custom in a capitalist society strongly protects the capitalists ownership of capital, but does not protect a worker's ownership of his or her actual labor; it protects only his ownership of his labor power. Without access to socially accumulated capital, an individual worker cannot use his own labor to survive, therefore the pressure of immediate necessity forces him to relinquish physical ownership of his actual labor in return for physical ownership of his labor power. Therefore, possession of actual labor must be guaranteed abstractly, or it doesn't exist. But capitalist governments do not guarantee abstract ownership of labor. The differential enforcement of abstract property rights constitutes a coercive externality on the market for capital ownership, making it un-free.

Does differential enforcement constitute coercion? It seems unobjectionable that some form of coercion is justifiable and socially acceptable in a "free" society: few people — even few anarchists or libertarians — would object to the socially constructed coercive prohibition against one person hitting another on the head and taking his stuff. In other words, physical ownership unobjectionably warrants a degree of supporting abstract ownership. But what if our social construction protects only blue-eyed people against forcible theft? If you have blue eyes and anyone (blue- or brown-eyed) hits you on the head and takes your stuff, the police will, with substantial efficacy, track down the perpetrator, recover your stuff, and discourage the perpetrator from repeating his objectionable behavior. If, however, you have brown eyes and someone hits you on the head and takes your stuff, the police will do nothing. These conditions seem obviously objectionable, but the objectionable behavior of the police here is itself not coercive; we are not arguing that they should not be coercive at all (we do want police protection against theft), we're arguing they do not act coercively when coercion is warranted: it's clearly the differential in differential coercion that's objectionable. This counter-argument renders invalid the argument that non-coercive behavior is by definition never objectionable. There might be other good arguments that the government should not protect a worker's ownership of his own actual labor, but it's invalid to argue that it is never objectionable for a government — even a minarchist government — to refuse to act coercively.

The effect of differential enforcements of abstract property rights is that under laissez faire capitalism, the ordinary worker has zero surplus to accumulate. Zero multiplied by many years and/or many bodies is zero: ordinary workers simply cannot become capitalists. The "selection pressure" against accumulation is not just short-term and local, it's long-term and global.

But of course the Keynesian "revolution" of the 1940s-1970s overcame this objection: some of workers' ownership of their surplus labor (the difference between their actual labor and the cost of their labor power) was protected by the government. And indeed millions of workers used this surplus to propel themselves and their children into the professional-managerial middle class and in general caused a much wider distribution of capital, actually lowering its price nearer to its cost.

It took the big capitalists almost thirty years to reverse this distribution. Their primary mechanisms were first to "pick off" the smaller accumulations of capital in cyclical downturns. For example, when housing prices fall, the homeowner loses her entire down payment before the bank loses any of its debt: anyone who is forced by circumstances to sell her house in a cyclical low loses all her capital, while the bank loses none.

The second method was outright theft — enabled again by differential enforcement of abstract ownership — of workers' accumulated capital, accumulated mostly in pension plans.

The third method was the creation of consumer debt. Increased consumption was necessary (and desirable) to drive increased production and increased productive efficiency, but there were two primary methods to do so. First, we could have socially created "front loaded" demand: just give individual workers more money, and make that money deflationary to encourage its use in consumption. But instead the capitalist class loaned the workers the money, cheaply at first, until a person's standard of living depended on massive amounts of debt. Once the standard of living is established, the capitalist class (who owns the debt) can raise interest rates to expropriate upper-working and lower-middle class accumulated capital.

Accumulating debt rather than capital is not economically irrational. It is economically and physically reasonable to expect almost endlessly rising income as we continue to make economic production more physically efficient (more goods for fewer hours). Accumulating debt is not even politically irrational: the government was for thirty years willing and able to prevent the capitalist class from manipulating the finance system to use debt to transfer capital; more than a generation of success is reasonable warrant for continued confidence.

Remember: while accumulating debt (to drive the economy in the short term) the working and middle classes were also accumulating capital (to make capital allocation more efficient in the long run). The working and middle classes were acting rationally, both economically and politically, balancing short-term and long-term benefits. While some people (sadly myself included) acted shortsightedly, on the whole we did not fail to accumulate capital, our capital was stolen from us. And it was stolen from us because the capitalist class regained control of the government; they were successful because we underestimated the determination and will of the capitalist class to regain the vast power they controlled before the Great Depression.

Will the health care bill destroy the conservative movement?

Nathan Newman thinks the health care bill will destroy the conservative movement "[b]ecause trying to repeal it will tear the movement apart and it will be the platform to destroy conservative anti-tax politics."

Nonsense.

The Randian/Soylent Green faction of the capitalist ruling class hated social security too, and that didn't destroy their movement. The Randian faction doesn't need either social security or universal health care to go away, they need it to not expand, and to the extent that it does expand, the expansion needs to be under the direct control of the capitalists, not the government. They're not sadistic, they're just indifferent to the well-being of the people.

Their primary goal is to preserve and enhance their power and privilege as a ruling class. The health care bill as it exists today does little to diminish their power and privilege, and may (as Robert Reich notes) actually enhance it. Their goal, which is largely complete, is to destroy Keynesian economics (and its advocates in the Democratic party), which supports the economic demand of the working and middle classes.

Liberals and progressives — even smart ones — are just as capable of wishful, magical thinking as any Christian.

Krugman and health care

Paul Krugman considers health care reform "a disappointing, flawed bill — and that it’s also a progressive triumph."

Krugman is correct at least that we should pass the bill — it's better than nothing, and a smaller-than-expected gain is acceptable in a sense that a smaller-than-expected loss (e.g. the 2006 Iraq war funding debacle) never is. But other than that, it's hardly a progressive "triumph"; it shows merely that progressives are not losing as quickly as they might. It's the fourth quarter, we're down by 14, and we settled for a field goal. Yeah, I won't give up the 3 points, but this is not how to win the game.

The problem isn't that the Democrats tried and failed to get real health care reform, the problem isn't even that they blinked in a tough situation. The problem is that they did not fight. The Democrats didn't get the health care reform they won, they got the health care "reform" the Republican party let them have, "reform" that consolidates the power of the capitalist class to control health care and use it, like profit, rent and interest, to extract surplus value from the population.