Tuesday, May 31, 2016

Rent seeking

Lobbyists Are Behind the Rise in Corporate Profits.

This is a phenomenon that is not peculiar to capitalism: a worker-owned firm has just as much incentive to lobby for favorable (in one sense or another) regulations as a capitalist-owned firm.

Just another reason why I don't like "market socialism."

Monday, May 30, 2016

Economics and moral philosophy

I'm on record as not liking market socialism. To clarify a bit, market socialism is probably a barely tolerable transitional stopgap in the move away from capitalism, but we should push quickly for an alternative. Furthermore, I do not think "central planning" — even if such a concept were coherent, which it's not, as I will discuss later — is the only alternative to markets. But before I talk about alternatives, Let me digress and talk about moral philosophy.

Markets are as much a moral social construction as they are a technical economic social construction; indeed the supposed pragmatic technical benefits are a post hoc rationalization; markets really rest on a moral foundation. And the morality of markets is clear: there are people who are industrious, thrifty, clever, people who take initiative, people who conform to corporate culture, people who follow certain rules (and break others): these people are good, and society should reward them just because* rewarding is what we do for good people. Similarly, there are people who are indolent, profligate, dull, etc.: these people are bad, and society should punish them just because punishing is what we do for bad people.

*i.e. we do not reward them to encourage people to be good; if rewards do act as incentives, that's all well and good, but the moral function of reward is not as an incentive, but as something intrinsic to goodness.

As Corey Robin has often argued, there is also the moral status of power. People do not want to be good (else there would be no difference between the desirable and the good), so they must be forced to be good. Since ordinary people must be forced to virtue, there must be a ruling class of people who do the forcing. This class is comprised not necessarily of people who are themselves good (although they might be good), but rather those who are energetic and effective at forcing virtue on the general population. Indeed, although the ruling class will often judge its own members (often on arbitrary or sometimes sadistic standards), the ruling class must be above the judgment of the people. If we hold that the desirable and the good are fundamentally in conflict, then it is difficult to imagine a different social organization to promote virtue and discourage vice.

Markets entail both of these moral views. Among the people, those who are industrious, thrifty, etc., i.e. good, are economically rewarded, while those who are indolent, profligate, etc., i.e. bad, are economically punished with poverty and deprivation. Moreover, entry into the ruling class is possible for a person with the forceful and effective personality necessary to gain great wealth, and exit from the ruling class is possible for those who fail to maintain their monetary or economic wealth, especially from the depredations of their peers.

I will go so far as to argue that if we are going to hold these two ideas, that we should reward virtue and punish vice, again just because that's what we do about virtue and vice, and that virtue and desire are fundamentally in conflict, capitalism, not only the market but the private ownership of the means of production, is the best way of having a virtuous society.

Thus there are two broad classes of arguments against capitalism: first to controvert the previous paragraph and say that while we should reward virtue and punish vice, and that there must be a de facto ruling class to compel virtue, but that capitalism is not the best way to do that. As noted above, I don't buy that argument, but if you want to make it, good luck to you; I'd love to hear it.

The second class is to reject these ideas, that we should not reward virtue and punish vice or that desirability and virtue are not fundamentally in conflict, that the most virtuous society is also the most desirable, and thus people do not have to be fundamentally forced to be good.

Such a view necessarily entails that we hold ideas like "lazy people deserve as much of the social product as industrious people," and like "people are 'naturally'* good." This is a big philosophical bullet to bite, but I think we must bite it.

*Before you get your knickers in a knot, please note the scare quotes around 'naturally'.

Sunday, May 29, 2016

Thoughts on market socialism

The first challenge in talking about market socialism is determining what precisely we mean by "market." In one sense, any time individuals have choices, and the exercise of those individual choices in the present has an effect on the options available in the future, we have a market. Since every kind of socialism worthy (IMnsHO) of the name wants to maximize human freedom, and an essential part of the maximization of freedom is that the exercise of that freedom should have an effect on society, all forms of socialism include markets. Thus, to be non-vacuous, market socialism must embed a more specific definition of "market."

We could define markets thus: We have firms and households. Households give tokens (money) to firms and receive goods and services; firms give tokens to households in return for labor. Firms that are more or less "efficient" at collecting tokens grow or decline; households that are more or less "efficient" at collecting tokens consume more or less of the social product.

We can add a lot more moving parts, but I think this definition captures an important sense of the market. (The above, of course, is not the only logically possible definition of markets. If you have an alternative definition, feel free to offer it in comments.)

At the social level, we don't have to micromanage everything: all we need to do is measure and manage the tokens. The whole point of markets is let the system "self-manage."

But just the broad definition above fails to resolve the fundamental contradiction of markets: at the individual level, markets entail that households and firms have an incentive to maximize "profits"*; at the social level, we want to use competition to minimize profits. Every household and firm wants to maximize its own profit and minimize everyone else's. This contradiction is not just perversity: it seems built into the whole concept of the market at the most basic level.

*We can broadly define "profit" and "efficiency" as the ratio of goods and services consumed to labor provided. Only households are profit-seeking in this sense; a firm is just a collection of households (or representatives of those households); these households use the firm to maximize their own profit. Depending on the social system, there might or might not be within-firm competition for profits, but by definition there is always between-firm competition for profits.

If we could impose market competition completely exogenously, markets might work. But, as Lenin argued in The State and Revolution, politics is endogenous. The households at firms that are "profitable" gain more economic power, which inevitably translates to power not only over the production of goods and services, but also power over the social systems in which firms produce goods and services. And if we structure the market give people an incentivize profit maximization, we are by definition giving people an incentive to avoid the competition that would reduce their profits.

This is not just me saying that no system is immune to perversity: the perversity is built right into the market model: the individual and social goals are exactly the opposite. And it's not really a "dialectical" relationship, because the individual profit-maximization incentive creates intentional action, whereas no individual has an incentive to encourage competition.

Radical democracy (as opposed to capitalist republicanism, which is at best weak tea and at worst a sham) might create some individual incentive to impose competition and make markets work. But still we have the collective action problem. A profitable firm, regardless of how it's run, has a concentrated incentive, its profits, can can act with unity to preserve those profits. In contrast, the incentives for maintaining competition are diffuse: no individual voter has very much at stake. A democracy is harder to hack than a republic, but nothing is unhackable, and where there's an incentive to hack, hacking will happen.

Worse yet, I'm just talking about setting prices for goods and services: things get even more dicey when we try to use markets for capital allocation.

I would have to see a much more detailed exposition (more detailed and thorough than the Wikipedia article) to buy market socialism.

Saturday, May 28, 2016

The hammer of the state

Perhaps the word "rant" in the title of A rant on socialism, authoritarianism, and welfare was not enough of a clue, but the post was not intended as a thorough exploration of the role of the state and the obligation to work. Since the post has been cited by LK (On the Value of Work in a Social Democracy) and has attracted a couple of comments, let me be a little more expository.

First, by "the hammer of the state," I simply mean ordinary state coercion, with "state" in the Weberian sense of the institution with a monopoly on the use of coercion. I've lifted the colorful metaphor from Nathan Burney's The Illustrated Guide to Law. I don't like to sugarcoat ideas or use too many euphemisms (unless they're funny or ironic): when the state uses force, it's force, i.e. violence. I don't like to bury the use of violent force under layers of abstraction, until it takes on the character of natural law. Violence is always a choice actual human beings make in actual, concrete social situations. If we're going to use violence, let us look it squarely in the face.

Second, I didn't mean that literally everyone must work. As noted in the post, people should retire, and people who are completely disabled shouldn't work. We can add to that list small children: based on my cursory and intermittent amateur reading on educational science, we should not try to push children to learn to read before about age 7. Of course, after about age 7, school is a child's work, and they should work. And finally, if someone wants to live in the forest and live on roots and bark and berries, well, good for them; we don't have to force such people to take paying, socially useful jobs.

Also, most people want to work, both because when it is not forcibly degrading or pointless, most people enjoy working, and because it is rational to work in a cooperative society and gain the benefits of cooperation.

Finally, I am directing my ire not so much at lazy slackers, but rentiers, people who live off the work of others by virtue of ownership of the means of production. Those people are the ones who should really fear the hammer of the state.

Friday, May 27, 2016

What is Marxism?

Chris Dillon has an interesting article: Bad Arguments against Marxism. Quite aside from the actual content, Dillon says, "You might object here that my Marxism is idiosyncratic. Certainly, it owes more to the Marx described by Jon Elster than to the one portrayed by Leszek Kolakowski. But frankly my dear, I don’t give a damn." But Dillon misses a crucial point: everyone's Marxism is in some sense idiosyncratic.

The problem with "Marxism" (and similar terms such as socialist or communist) is that there really isn't anything that actually "is" Marxism. Marxism is a genetic or self-identifying label: if your work or ideas derive from Marx's, then you're a Marxist; if you call yourself a Marxist, then you are a Marxist. Pretty much every mainstream sociologist and anthropologist is a Marxist. There are some restrictions: if you want to call yourself a Marxist, and almost all other people who call themselves Marxists don't buy it, then the label probably won't stick. But people who call themselves Marxists (which I myself do only with great reluctance) are a pretty pluralistic group.

In a sense, calling yourself a Marxist is like calling yourself an American: I call myself an American because I was born here, I've lived here all my life, and my beliefs and preferences were shaped in no small part by the predominant culture. But the label does not constrain my beliefs: I can believe literally anything at all (save that I don't want to call myself an American) and I would still be an American. The label refers to nothing ideologically essential.

One could create statistical measures of what Marxists believe, as one could create statistical measures of what Americans believe, but those measures would not define Marxism: they would be posterior measures, not prior definitions.

First, it is more useful to talk about socialism rather than Marxism for the same reason that nobody calls physicists "Newtonists," and evolutionary biologists don't like being called "Darwinists": the label encourages an undue reliance on the work of a single author, however seminal. Although they offered groundbreaking insights that are still in use today, Newton was mistaken on many points, Darwin was mistaken, and similarly, Marx was mistaken (or some now disagree with him). But so what? Newton, Darwin, and Marx were not prophets. Moreover, people who follow in Newton's, Darwin's, and Marx's tradition, who employ their insights, disagree about many important points. This is as it should be.

Second, it is not just pointless but pernicious to talk about socialism as some political-economic system with a particular essential (but arbitrarily designated) definition. To do so creates a false dichotomy: all we have is capitalism and socialism (if you're neither capitalist nor socialist, you're nothing at all), and socialism is bad because reasons, therefore capitalism. It's a move designed to defend capitalism without actually defending capitalism.

It is more useful to talk about socialism not as some specific system but as a project. Socialism is first a project to engage in radical criticism of capitalism, i.e. to carefully and ruthlessly (i.e. without sentimentality or fear) examine capitalism at its roots, at the private ownership of the means of production. Socialism is second a project to imagine a society that functions for the benefit of the people, all the people, and not for the benefit of some elite. The rest is commentary.

But, oh! what commentary! Just within the above constraints, there is vast disagreement. Do we impose socialism from above with a vanguard party seizing state power? Do we let it "bubble up" from below? Is socialism inevitable — all we have to do is wait, and it will spontaneously emerge — or does socialism require definite, intentional action? Given that capitalists will defend capitalism to the death, how far should we go to oppose it?

How do we deal with macroeconomic issues in a national and global economy? Should we industrialize further or deindustrialize? What importance should we place on specifically material well-being? Are washing machines, air-conditioners, computers, synthetic insulin, and (relatively) painless dentistry worth having in the first place? Should all live in small self-sufficient rural communes?

How do we deal with discrimination based on race, sex, sexual orientation, gender identity, national origin, and religion discrimination? How about religious extremism? How do we deal with ordinary crimes, such as rape and murder?

All we can do is engage in the social process of criticism and argumentation to wrap our heads around all these issues. People will disagree, dominant ideas will change, and if we finally do end capitalism, at least our grandchildren will have a rich, albeit internally contradictory, body of thought to employ in solving concrete problems.

Sunday, May 22, 2016

Seven Rules for Running a Real Left-Wing Government

Seven Rules for Running a Real Left-Wing Government

There are actually more than seven rules:

  1. It’s Not You, It’s China (or, the World System)
  2. Don’t Run Your Economy on Resources
  3. Your First Act Must Be a Media Law
  4. Take Control of the Banking Sector
  5. Who Is Your Administrative Class?
  6. Take Control of Distribution and Utilities
  7. Reduce Your Vulnerability to the World Trade System
  8. Be Satisfied with What You Can Grow and Make
  9. Obey the Laws of Purges

The last is the most important. On the one hand, the bourgeoisie will do anything to maintain or regain power: murder, torture, slavery, rape: no atrocity is beyond them. This utter amorality is not license for revolutionaries to emulate it: brutality cannot be defeated by brutality. However, the power of the bourgeoisie can be utterly broken without atrocity, in part by simply making their atrocities clear. For example,

Assume Obama was really a left-winger. He gets into power in 2009, and he really wants to change things. He needs to take out the financial elite: Wall Street and the Big Banks.

They’ve handed him the opportunity. Here’s part of how he does it: He declares all banks involved in the sub-prime fraud racket (all of the big ones most of the small ones) conspiracies under RICO.

He then says that all the individual executives’ money are proceeds from crime and confiscates it. (This is 100 percent legal under laws as they exist). He charges them, and they are forced to use public defenders.

They are now powerless. This is the second law of purges: Anyone you damage, you must destroy utterly. If you take away half their power, and leave them half, they will hate you forever and use their remaining power to destroy you.

Destroy them utterly, but with justice. No murder, no torture, not even show trials. One critical weakness of the bourgeoisie is that they depend on popular legitimacy, so the letter of the their own law, interpreted reasonably, can be used against them. Were the bourgeoisie were to write their interests explicitly and directly into law, they would compromise their legitimacy. They must depend on extra-legal measures to maintain their power under their own legal system.

(Note that the bourgeoisie is actually working to make the law more explicitly in line with their own interests, and they are making substantial progress: the Trans Pacific Partnership is a notable example. But this project is self-defeating: as the law becomes more explicitly protective of bourgeois power, the bourgeoisie, and the concept of law itself, loses popular legitimacy.)

The first law of purges is to do it all at once and then stop; otherwise, you risk creating a climate of fear and paranoia, which will undermine your project. Hard to do. You have to get it almost exactly right the first time. Still, it's doable: the first purge is basically political; any subsequent adjustments can be traditionally legal.

All of this will make many readers uneasy. It seems “mean.”

Get out of the game. You aren’t fit for it. This is all mean. Millions of people die every year and millions more are ruined by the current system. If you’re in this game to win it, rather than feel good about yourself, you will have to play real power politics by the actual rules of the game.

Too many left-wingers try to play by what they think the rules are. “We have a fair election every X years and the losers accept the result and don’t sabotage the winner (or do a coup).”

Those aren’t the real rules. If the right is really losing, they will cheat and cheat massively. They will think nothing of running death squads, making a deal with the US to support guerrillas, and so on.

Thursday, May 12, 2016

The Democratic party cannot be reformed

I see a lot of people looking at Bernie Sanders' campaign and thinking that his support shows the Democratic party might be reformed to become a true (or at least better) progressive, pro-worker party.

Ain't gonna happen.

Bernie Sanders won't win the nomination, If Sanders wins the nomination, he won't beat Trump: the neoliberal elite would rather have Trump than Sanders. And even if Sanders were somehow to become President, he wouldn't be able to actually do anything. (None of these arguments are reasons not to vote for Sanders.)

The retribution will be obviously facilitated if Clinton wins, and especially severe if Clinton loses to Trump: Sanders and his supporters will be blamed for the loss.

In 2019 and 2023, no one of Sanders' caliber will run against Trump or Clinton. The neoliberal wing of the Democratic party will get its shit together and make damn sure that no Sanders can even run, much less win. Anyone who supports Sanders now will be squeezed out of any meaningful role in the Democratic party. The neoliberal elite has too much power, and they're not going to give it up without a fight.

The only way to defeat neoliberalism is to defeat it all at once worldwide. It is certainly possible to defeat neoliberalism locally, but if a locality makes inroads against neoliberalism, it will be co-opted (Podemos) or brutally crushed (Syriza).

The neoliberal elite will retain its grip until the system fails catastrophically. The question is not how to defeat or even ameliorate neoliberalism politically: that train left the station in 1980. The question is: when neoliberalism fails catastrophically, who will pick up the pieces? The race is on between fascism and communism, and fascism is winning.

Happily, I don't expect to live until 2024.