An economic professor asked me, "But do you want this government having anything to do with the allocation of capital?"
Well, no. I don't want this government doing anything at all. This government exists as an organ of the capitalist ruling class, and the representatives and bureaucrats live in the context of a capitalist society: they, like everyone else, are competing in a life and death struggle for money and power. There are so many incentives for "corruption" (using official power for personal gain) that it seems a miracle that so many civil servants avoid corruption.
Instead, I want a democratic government in a communist context making decisions about the allocation of capital. A democratic government, as opposed to our present republican government, really is run by the people themselves, directly as far as direct democracy is practical, and otherwise by delegated, as opposed to trustee, representation. In a communist context, people are not locked into a life and death struggle for money, and economic power is not the essence of political power.
People like power, and I have no illusions that there will be struggles for power under democratic communism. I believe, however, that we can move the field of struggle for power away from economic power to something else, probably popularity. A person will become politically powerful to the extent that she gains the admiration, trust, and respect of the people. There will be demagogues, certainly, and the majority of people can, like any other group, make serious mistakes. But the power of a demagogue is much more transient and evanescent than the power of a capitalist, and the fundamental principle of democracy is not that the people are less prone to error than an elite, but rather that the mistakes of the people are preferable to the self-interest of an elite.
Sunday, November 03, 2013
Friday, November 01, 2013
Innovation
Under democratic communism (as I envision it) during the "socialist" phase*, an individual can become relatively wealthy. Perhaps BMW or Mercedes Benz wealthy, 5,000 square foot home wealthy: i.e. about as relatively wealthy as an upper-middle class professional today, but almost certainly not Bill Gates or Warren Buffet or Mark Zuckerberg wealthy. Thus, the very reasonable question that capitalist apologists** pose: "Under communism, where vast wealth is unavailable, would we lose the valuable innovations that people like Gates, Buffet, Zuckerberg, and others such as Steve Jobs, Larry Ellision***, etc. have given us?" We cannot know for certain until we try, but although there will certainly be differences, innovation need not cease under democratic communism.
Democratic communism is different from republican capitalism, so it is definitely the case that the kinds of innovation will differ between communism and capitalism. Obviously, any potential entrepreneur who requires the possibility of staggering wealth to create his innovation will not have that motivation under communism. More importantly, the general conditions of winner take all and innovate or die under capitalism will be greatly relaxed. Generally speaking, neither people nor firms will work as hard at something if it is no longer a matter of life and death. I expect that innovation under communism will occur at a much less frenetic pace as under 19th and 20th century capitalism.
*In the communist phase, the material conditions of society are developed to such a degree that relative wealth becomes as meaningless for ordinary people as relative access to air.
**I mean "apologist" in the neutral sense, as someone who argues for a position.
***The bias here towards technology entrepreneurs is partly due to my own history as a computer programmer.
But slower is not stopped. Even a cursory study of history shows that many people have contributed substantial innovations without the prospect of enormous wealth. Academic scientists and scholars have created numerous innovations, from relativity to educational methods to critical race theory, without the realistic possibility of enormous wealth. People sometimes act like the iPod sprang Athena-like from the head of Steve Jobs, but in reality Apple's innovative products are the work of many thousands of engineers and technicians — not to mention all the people supporting their efforts: even the most brilliant engineer is going to have a difficult time innovating if the bathrooms are filthy. I use many free software packages, not just prestige products such as Firefox, but a host of innovative and useful applications created by people who just wanted to see something cool in the world. Capitalists are just as prone to ethnocentrism as anyone else: they themselves are motivated by solely by wealth, so they tend to think that everyone is motivated solely by wealth. But of course people have a lot of different motives, and the urge to create is a basic human desire, and people will innovate even if there were no social incentives at all.
We also must look critically at the kinds of innovation that capitalism supports: capitalism supports only those innovations that have the potential of making some capitalists relatively wealthier, compared to each other and compared to the professional/managerial and working classes. This structure is problematic in a variety of ways. First, innovation is concentrated on private goods, and innovation in public goods either languishes or is actively blocked. Hence we have Viagra and Rogaine, but research on new antibiotics is practically nil. Innovations in health care financing are actively blocked, as demonstrated by the absolutely unnecessary tsuris over the PPACA, when the obvious answer — not even innovative anymore — is the expansion of Medicare. Second, innovations in what are more or less "naturally" public — non-exclusive, non-rival — goods require that we attempt to make them into private — exclusive, rival — goods. The most obvious example is copyright law. In the electronic age, movies and computer programs are "naturally" non-exclusive and non-rival; copyright law tries, by brute force, to make these goods exclusive and rival. Finally, some "innovations" focused on capitalist wealth, such as recent "innovations" in the financial system, have proven to be unmitigated social disasters, making everyone but a few vastly worse off, and nearly wrecking the global economy. There are many capitalist innovations that few would miss if their motivations were removed.
In contrast, communism stresses innovation in public rather than private goods. Allocation of capital under communism is directly democratic. Under capitalism, the entrepreneur must convince people who are already rich that her innovation will make them richer; under communism, the entrepreneur must convince citizens that her innovation will make them better off. Critics of communism thus must either "bite the bullet" and say that democracy itself is fundamentally evil or ineffective; they must say that what will garner the approval of a democratic majority is not best, or that citizens do not and cannot know what will make them better off. Assuming democracy is not an evil, then the objection of capitalist apologists is easily met: entrepreneurs will innovate along lines that will gain the approval of the majority, and the majority will innovations they do not want.
Finally, I want to reiterate a point that I've made many times earlier: communism cannot and will not actually happen until it is clear that capitalism itself has become a fetter on the means of production. Revolutionary ideology does not and cannot in good conscience advocate replace a system that is working, however imperfectly, with an untested system whose foundation is purely theoretical; not only is such advocacy morally wrong, its goal is practically impossible. As long as apologists and reformers can keep the system working, however imperfectly, they will not fall.* However, when the "innovations" of capitalism nearly always do not have the effect of increasing the public good but only maintaining the power and privilege of the capitalist ruling class, communists have the opportunity of introducing a newer, better paradigm of innovation.
*There is more scope for changing a merely imperfect system in the alternative mode of revolutionary change, "allopatric" revolution, similar to the concept of allopatric speciation in biological evolution.
Let me close with a quotation from J. S. Mill, from Principles of Political Economy:
Democratic communism is different from republican capitalism, so it is definitely the case that the kinds of innovation will differ between communism and capitalism. Obviously, any potential entrepreneur who requires the possibility of staggering wealth to create his innovation will not have that motivation under communism. More importantly, the general conditions of winner take all and innovate or die under capitalism will be greatly relaxed. Generally speaking, neither people nor firms will work as hard at something if it is no longer a matter of life and death. I expect that innovation under communism will occur at a much less frenetic pace as under 19th and 20th century capitalism.
*In the communist phase, the material conditions of society are developed to such a degree that relative wealth becomes as meaningless for ordinary people as relative access to air.
**I mean "apologist" in the neutral sense, as someone who argues for a position.
***The bias here towards technology entrepreneurs is partly due to my own history as a computer programmer.
But slower is not stopped. Even a cursory study of history shows that many people have contributed substantial innovations without the prospect of enormous wealth. Academic scientists and scholars have created numerous innovations, from relativity to educational methods to critical race theory, without the realistic possibility of enormous wealth. People sometimes act like the iPod sprang Athena-like from the head of Steve Jobs, but in reality Apple's innovative products are the work of many thousands of engineers and technicians — not to mention all the people supporting their efforts: even the most brilliant engineer is going to have a difficult time innovating if the bathrooms are filthy. I use many free software packages, not just prestige products such as Firefox, but a host of innovative and useful applications created by people who just wanted to see something cool in the world. Capitalists are just as prone to ethnocentrism as anyone else: they themselves are motivated by solely by wealth, so they tend to think that everyone is motivated solely by wealth. But of course people have a lot of different motives, and the urge to create is a basic human desire, and people will innovate even if there were no social incentives at all.
We also must look critically at the kinds of innovation that capitalism supports: capitalism supports only those innovations that have the potential of making some capitalists relatively wealthier, compared to each other and compared to the professional/managerial and working classes. This structure is problematic in a variety of ways. First, innovation is concentrated on private goods, and innovation in public goods either languishes or is actively blocked. Hence we have Viagra and Rogaine, but research on new antibiotics is practically nil. Innovations in health care financing are actively blocked, as demonstrated by the absolutely unnecessary tsuris over the PPACA, when the obvious answer — not even innovative anymore — is the expansion of Medicare. Second, innovations in what are more or less "naturally" public — non-exclusive, non-rival — goods require that we attempt to make them into private — exclusive, rival — goods. The most obvious example is copyright law. In the electronic age, movies and computer programs are "naturally" non-exclusive and non-rival; copyright law tries, by brute force, to make these goods exclusive and rival. Finally, some "innovations" focused on capitalist wealth, such as recent "innovations" in the financial system, have proven to be unmitigated social disasters, making everyone but a few vastly worse off, and nearly wrecking the global economy. There are many capitalist innovations that few would miss if their motivations were removed.
In contrast, communism stresses innovation in public rather than private goods. Allocation of capital under communism is directly democratic. Under capitalism, the entrepreneur must convince people who are already rich that her innovation will make them richer; under communism, the entrepreneur must convince citizens that her innovation will make them better off. Critics of communism thus must either "bite the bullet" and say that democracy itself is fundamentally evil or ineffective; they must say that what will garner the approval of a democratic majority is not best, or that citizens do not and cannot know what will make them better off. Assuming democracy is not an evil, then the objection of capitalist apologists is easily met: entrepreneurs will innovate along lines that will gain the approval of the majority, and the majority will innovations they do not want.
Finally, I want to reiterate a point that I've made many times earlier: communism cannot and will not actually happen until it is clear that capitalism itself has become a fetter on the means of production. Revolutionary ideology does not and cannot in good conscience advocate replace a system that is working, however imperfectly, with an untested system whose foundation is purely theoretical; not only is such advocacy morally wrong, its goal is practically impossible. As long as apologists and reformers can keep the system working, however imperfectly, they will not fall.* However, when the "innovations" of capitalism nearly always do not have the effect of increasing the public good but only maintaining the power and privilege of the capitalist ruling class, communists have the opportunity of introducing a newer, better paradigm of innovation.
*There is more scope for changing a merely imperfect system in the alternative mode of revolutionary change, "allopatric" revolution, similar to the concept of allopatric speciation in biological evolution.
Let me close with a quotation from J. S. Mill, from Principles of Political Economy:
I confess I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that the trampling, crushing, elbowing, and treading on each other's heels, which form the existing type of social life, are the most desirable lot of human kind, or anything but the disagreeable symptoms of one of the phases of industrial progress. It may be a necessary stage in the progress of civilization, and those European nations which have hitherto been so fortunate as to be preserved from it, may have it yet to undergo. It is an incident of growth, not a mark of decline, for it is not necessarily destructive of the higher aspirations and the heroic virtues; as America, in her great civil war, has proved to the world, both by her conduct as a people and by numerous splendid individual examples, and as England, it is to be hoped, would also prove, on an equally trying and exciting occasion. But it is not a kind of social perfection which philanthropists to come will feel any very eager desire to assist in realizing. Most fitting, indeed, is it, that while riches are power, and to grow as rich as possible the universal object of ambition, the path to its attainment should be open to all, without favour or partiality. But the best state for human nature is that in which, while no one is poor, no one desires to be richer, nor has any reason to fear being thrust back by the efforts of others to push themselves forward. (bk. IV, ch. VI sec. 2)
Sunday, October 27, 2013
Macroeconomics of democratic communism
Democratic communism uses Modern Monetary Theory. According to Modern Monetary Theory (MMT), the government creates and spends money whenever it needs to, and for whatever real goods and services it wants. It imposes taxes for two main purposes. The first is to give value to currency, and to spread the burden of its demand for real goods and services more broadly in society, and the second is to control inflation. Thus, unlike households, firms, and regional/local governments, the national government is not budget constrained: it cannot run out of money. The national government can, of course, demand so many goods and services from the citizenry as to substantially reduce their economic quality of life, and they can inject enough money into the system to cause inflation, but the government cannot run out of money itself.
Modern Monetary Theorists claim that this is not a normative or semi-normative claim. Instead, they believe MMT is what it means to have a fiat currency, and all the institutional apparatus of nation-states with their own currencies do is implement MMT in a more or less (usually more) opaque and undemocratic manner. Democratic communism makes MMT explicit and open.
The national government creates new money through several different channels. First, it creates money when it demands real goods and services directly for the general welfare of the nation (e.g. pays the armed forces or builds and maintains the interstate highway system). Second, it creates new money when it permits regions and localities to capitalize firms.* Third, as I mentioned earlier, the national government creates new money when it directly provides jobs, as it must to anyone who asks, at a wage sufficient to earn a dignified living.** Finally, the government bank creates new money when it loans money to firms and individuals.
*I suspect that it is inadvisable for the national government to directly capitalize any firm; any firm whose business is truly national in scope probably should be directly run by the national and/or regional governments.
**Jobs programs would probably be operated by local and regional/state governments, but these governments have no discretion as to whether or not to offer jobs, so the national government would probably pay for the jobs directly.
Similarly, there are several ways the national government takes money out of the system. First, obviously, there are direct progressive income taxes on individuals. Second, the national government collects a proportional rent on capital from firms it capitalizes. (The national government does not need to collect direct taxes from firms.) Third, the government collects rent on money loaned (i.e. interest).
Finally, the government can temporarily adjust the money supply by buying and selling bonds, and paying interest on those bonds. Under MMT, these bonds are not a source of revenue; the government is not "borrowing" money to fund its operations. Instead, government bonds just serve as a buffer for the supply of "high powered money" (i.e. cash and checking account money). When there is "too much" money in circulation, the government sells bonds at higher interest rates; when there is too little, the government lowers bond rates to induce people to exchange their bonds for currency. Because the government can always create new money, it can never default (fail to make timely interest payments) on bonds.
The question is not whether a modern national economy should operate in this way; as best we can figure out, this is how a modern economy actually operates. The question is whose hands are actually on these levers: private individuals, anarchically competing against one another and unaccountable to the people, or by the people themselves and institutions with clear and direct democratic control. Democratic communism sides firmly on the latter.
Modern Monetary Theorists claim that this is not a normative or semi-normative claim. Instead, they believe MMT is what it means to have a fiat currency, and all the institutional apparatus of nation-states with their own currencies do is implement MMT in a more or less (usually more) opaque and undemocratic manner. Democratic communism makes MMT explicit and open.
The national government creates new money through several different channels. First, it creates money when it demands real goods and services directly for the general welfare of the nation (e.g. pays the armed forces or builds and maintains the interstate highway system). Second, it creates new money when it permits regions and localities to capitalize firms.* Third, as I mentioned earlier, the national government creates new money when it directly provides jobs, as it must to anyone who asks, at a wage sufficient to earn a dignified living.** Finally, the government bank creates new money when it loans money to firms and individuals.
*I suspect that it is inadvisable for the national government to directly capitalize any firm; any firm whose business is truly national in scope probably should be directly run by the national and/or regional governments.
**Jobs programs would probably be operated by local and regional/state governments, but these governments have no discretion as to whether or not to offer jobs, so the national government would probably pay for the jobs directly.
Similarly, there are several ways the national government takes money out of the system. First, obviously, there are direct progressive income taxes on individuals. Second, the national government collects a proportional rent on capital from firms it capitalizes. (The national government does not need to collect direct taxes from firms.) Third, the government collects rent on money loaned (i.e. interest).
Finally, the government can temporarily adjust the money supply by buying and selling bonds, and paying interest on those bonds. Under MMT, these bonds are not a source of revenue; the government is not "borrowing" money to fund its operations. Instead, government bonds just serve as a buffer for the supply of "high powered money" (i.e. cash and checking account money). When there is "too much" money in circulation, the government sells bonds at higher interest rates; when there is too little, the government lowers bond rates to induce people to exchange their bonds for currency. Because the government can always create new money, it can never default (fail to make timely interest payments) on bonds.
The question is not whether a modern national economy should operate in this way; as best we can figure out, this is how a modern economy actually operates. The question is whose hands are actually on these levers: private individuals, anarchically competing against one another and unaccountable to the people, or by the people themselves and institutions with clear and direct democratic control. Democratic communism sides firmly on the latter.
Saturday, October 26, 2013
Starting a firm
So, you want to start a business under democratic communism. What do you do?
The first step is to deal with the bureaucracy, the civil service.
Please allow me to digress. The purpose of this exercise is to apply the theory of democratic communism to practical situations. So I want to talk briefly about the theory of the civil service bureaucracy under democratic communism.
Most people hate the thought of dealing with a bureaucratic civil service, but this hatred is mostly misplaced, and where it is well-placed, it is not because of the bureaucratic nature of the civil service, but because the present civil service is in the hands of the capitalist ruling class.
Most states' motor vehicle departments are entirely bureaucratic, but most people still manage to get drivers' licenses, and in many states (my own included), procedures have been streamlined and improved so that the process is relatively painless. A couple of years ago, my driver's license was stolen, and I spent only 25 minutes at the DMV getting it replaced. City planning is bureaucratic, and buildings still manage to get built. I attend a university, which includes a gigantic bureaucracy, and I still manage to get my financial aid, register for classes, and have my academic performance recognized and recorded. Sometimes bureaucracy becomes nightmarish, as in welfare, but that is always because the executive in our democratic republic (and often the legislature as well) is intentionally using the bureaucracy to prevent people from gaining certain benefits.
The only alternatives to a bureaucracy is official discretion, which leads to corruption, and a legal process, which puts even the most convoluted bureaucratic process to shame in its complexity, difficulty, and delay.
Democratic communism puts executive power in the hands of the people and their delegates, but puts structural checks on the power of the people. One check is an independent judiciary: no person may be deprived of life, liberty, or personal property without due process of law, but the judiciary steps in when things go wrong. The structural check on the power of the people is the civil service: the people must exercise their executive power through the agency of the civil service.
The essence of the civil service is that it operates by public, objective (consistently determinable), and universally applicable rules. The people exercise their executive power by defining and creating the rules that the civil service (which includes the police and the military) operate by. Operating by rules prevents the people from employing executive power arbitrarily or hastily. Rather than an impediment to the public good, the bureaucracy acts as an impediment to the unwise temporary majority, as well as the principle-agent problem that, while reduced, can never be completely eliminated.
Back to the problem. As I mentioned earlier, democratic communism is democratic. The actual processes and procedures used by individuals to start businesses are a matter of legislature, not fundamental principles, and are under the control of the people and their delegates, not some scholar such as myself. However, I do have a little experience in business administration, economics, political science, systems analysis, and finance, so I will speak not as an authority on democratic communism pronouncing ideology, but as a semi-expert in political-economic systems making practical suggestions. What follows is merely how I would structure the process.
First, the potential entrepreneur must apply for an economic analysis of her potential business from the civil service. The civil service evaluates the plan neutrally (those performing the analysis, for example, will not know the identity, and therefore the race, gender, ethnicity, religion, or anything else, of the entrepreneur. They then pass the recommendations to the appropriate democratic delegation (usually a municipal or regional/state delegation), which represents the entrepreneur and her neighbors, and at which the entrepreneur and any other constituent can speak. The people choose which business proposals to capitalize, and direct the civil service to capitalize them. Note that the power to capitalize a business is not an executive but a legislative power, i.e. the power to spend money, which falls under the discretion of the legislature and is subject to political, not bureaucratic, constraints.
If the people and their delegates do not fund the business, or if the entrepreneur does not want to ask them, there are alternatives.
Again, let me digress into theory.
There are two phases to communist development: the "socialist" phase and the "communist" phase. One core element of communist theory is that capitalism, i.e. the private ownership of the means of production, at a certain level acts not as a generative force but as "fetters" on the development of the means of production. Capitalism is more flexible than Marx thought, but I think he was correct in that there are structural limitations on the prosperity that capitalism can develop.
Hence, immediately after the fall of capitalism, the economy will need to grow past the bounds imposed by capitalism; this process constitutes the socialist phase. In this phase, people still need to make trade-offs between leisure and consumption, and between some level of risk and safety. In this phase, those who work more are permitted to consume more. There are still differences in nominal income. Unlike capitalism, however, no level of income or wealth by itself gives an individual any kind of economic power over others (other than the power to demand actual consumption).
At least in theory, when economic and political power can no longer be gained by exploiting workers and expropriating their surplus labor, after a certain level of development, the economy can grow faster and better than it can under capitalism, until enough prosperity has been developed such that the trade-off between work and leisure becomes irrelevant: there is enough social wealth that people can, by and large, simply do as they please.
Therefore, under socialism, which I am describing here, there are still financial incentives. Within reasonable limits (enforced by income and wealth taxes), the industrious, clever, hard-working, and, to a certain extent, lucky individual can consume more than a person who values leisure or immediately unprofitable work (such as writing a blog). No one lives in misery, no one has Bill Gates' or Warren Buffet's wealth, but within those limits there are still differences in income, wealth, and consumption, at least for a time.
Back to practice.
If the people capitalize a firm, and it goes bankrupt, the people just "lose" their capital. That's how investment works. Neither the entrepreneur nor any employee is personally liable for any losses, although the people may, of course, recover any physical capital.
If the people refuse to capitalize a business, the entrepreneur can borrow money from the government bank. Money borrowed from government bank to capitalize a firm becomes an obligation of the firm while it is operating, but if the firm goes bankrupt, it becomes a personal obligation of the entrepreneur, which cannot be discharged by personal bankruptcy. (How personal bankruptcy and repayment of individual loans operates is beyond the scope of this post.) The government bank, being part of the civil service, grants loans according to the rules mandated by the people and their delegates, but the people do not review individual loans.
Finally, the entrepreneur can make whatever agreements she wishes with other private parties to obtain capital or loans. Capital obtained privately is lost if the firm becomes bankrupt, and loans personally guaranteed by the entrepreneur can be discharged in personal bankruptcy.
This all sounds very "capitalistic," n'est pas? Well, to a certain extent, yes it is. There are is a good reason for the similarity, and there are substantial differences.
The reason for the similarity is that the socialist phase of communism has inherited the economy from capitalism. We have all of these structures and institutions in place, with a huge amount of practical experience in their operation and administration. While Lenin correctly notes that at a certain level we must literally smash capitalist institutions, we have to carefully distinguish between truly capitalist institutions, such as the democratic republic and individual official power, which must be thoroughly discarded, and merely technical institutions, which can be retained and transformed. I maintain (and will be happy to explain elsewhere) that charging rent for capital and interest for loans are, by themselves, (i.e. without the private ownership of the majority of money), technical institutions that can be co-opted by communism, just as capitalism co-opted (and communism, I believe, can co-opt) the feudal judiciary.
There are substantial differences. First, the majority of capital and loans are provided by the people and their delegates, not by private individuals. The people have the decisive advantage that the national government can arbitrarily create and destroy money, through spending, taxation, and the collection of economic rent. Private individuals simply cannot directly compete against the government; they can act productively only when, for some reason, the government fails or refuses to act. Second, employees have more practical freedom of action. They cannot, as under capitalism, be economically coerced; they always have the freedom to leave a job secure in the knowledge they can work directly for the government to provide the necessities of a civilized life. Similarly, because the political institutions are more democratic than in the capitalist republic, there is much less risk of wealthy individuals capturing the political process. Fourth, the people can, at their discretion, place whatever limits on income and wealth they choose. Because economic rent is inherent to the fact of the surplus value of labor, allocating this rent is an ineluctable element of every economy and cannot simply be ignored. Charging economic rent by the people is a necessary element of a socialist economy; the question is not whether, but how. Only after the productive forces have been perfect past the boundaries of capitalism can the notion of careful social management of the allocation of surplus labor be relaxed.
The first step is to deal with the bureaucracy, the civil service.
Please allow me to digress. The purpose of this exercise is to apply the theory of democratic communism to practical situations. So I want to talk briefly about the theory of the civil service bureaucracy under democratic communism.
Most people hate the thought of dealing with a bureaucratic civil service, but this hatred is mostly misplaced, and where it is well-placed, it is not because of the bureaucratic nature of the civil service, but because the present civil service is in the hands of the capitalist ruling class.
Most states' motor vehicle departments are entirely bureaucratic, but most people still manage to get drivers' licenses, and in many states (my own included), procedures have been streamlined and improved so that the process is relatively painless. A couple of years ago, my driver's license was stolen, and I spent only 25 minutes at the DMV getting it replaced. City planning is bureaucratic, and buildings still manage to get built. I attend a university, which includes a gigantic bureaucracy, and I still manage to get my financial aid, register for classes, and have my academic performance recognized and recorded. Sometimes bureaucracy becomes nightmarish, as in welfare, but that is always because the executive in our democratic republic (and often the legislature as well) is intentionally using the bureaucracy to prevent people from gaining certain benefits.
The only alternatives to a bureaucracy is official discretion, which leads to corruption, and a legal process, which puts even the most convoluted bureaucratic process to shame in its complexity, difficulty, and delay.
Democratic communism puts executive power in the hands of the people and their delegates, but puts structural checks on the power of the people. One check is an independent judiciary: no person may be deprived of life, liberty, or personal property without due process of law, but the judiciary steps in when things go wrong. The structural check on the power of the people is the civil service: the people must exercise their executive power through the agency of the civil service.
The essence of the civil service is that it operates by public, objective (consistently determinable), and universally applicable rules. The people exercise their executive power by defining and creating the rules that the civil service (which includes the police and the military) operate by. Operating by rules prevents the people from employing executive power arbitrarily or hastily. Rather than an impediment to the public good, the bureaucracy acts as an impediment to the unwise temporary majority, as well as the principle-agent problem that, while reduced, can never be completely eliminated.
Back to the problem. As I mentioned earlier, democratic communism is democratic. The actual processes and procedures used by individuals to start businesses are a matter of legislature, not fundamental principles, and are under the control of the people and their delegates, not some scholar such as myself. However, I do have a little experience in business administration, economics, political science, systems analysis, and finance, so I will speak not as an authority on democratic communism pronouncing ideology, but as a semi-expert in political-economic systems making practical suggestions. What follows is merely how I would structure the process.
First, the potential entrepreneur must apply for an economic analysis of her potential business from the civil service. The civil service evaluates the plan neutrally (those performing the analysis, for example, will not know the identity, and therefore the race, gender, ethnicity, religion, or anything else, of the entrepreneur. They then pass the recommendations to the appropriate democratic delegation (usually a municipal or regional/state delegation), which represents the entrepreneur and her neighbors, and at which the entrepreneur and any other constituent can speak. The people choose which business proposals to capitalize, and direct the civil service to capitalize them. Note that the power to capitalize a business is not an executive but a legislative power, i.e. the power to spend money, which falls under the discretion of the legislature and is subject to political, not bureaucratic, constraints.
If the people and their delegates do not fund the business, or if the entrepreneur does not want to ask them, there are alternatives.
Again, let me digress into theory.
There are two phases to communist development: the "socialist" phase and the "communist" phase. One core element of communist theory is that capitalism, i.e. the private ownership of the means of production, at a certain level acts not as a generative force but as "fetters" on the development of the means of production. Capitalism is more flexible than Marx thought, but I think he was correct in that there are structural limitations on the prosperity that capitalism can develop.
Hence, immediately after the fall of capitalism, the economy will need to grow past the bounds imposed by capitalism; this process constitutes the socialist phase. In this phase, people still need to make trade-offs between leisure and consumption, and between some level of risk and safety. In this phase, those who work more are permitted to consume more. There are still differences in nominal income. Unlike capitalism, however, no level of income or wealth by itself gives an individual any kind of economic power over others (other than the power to demand actual consumption).
At least in theory, when economic and political power can no longer be gained by exploiting workers and expropriating their surplus labor, after a certain level of development, the economy can grow faster and better than it can under capitalism, until enough prosperity has been developed such that the trade-off between work and leisure becomes irrelevant: there is enough social wealth that people can, by and large, simply do as they please.
Therefore, under socialism, which I am describing here, there are still financial incentives. Within reasonable limits (enforced by income and wealth taxes), the industrious, clever, hard-working, and, to a certain extent, lucky individual can consume more than a person who values leisure or immediately unprofitable work (such as writing a blog). No one lives in misery, no one has Bill Gates' or Warren Buffet's wealth, but within those limits there are still differences in income, wealth, and consumption, at least for a time.
Back to practice.
If the people capitalize a firm, and it goes bankrupt, the people just "lose" their capital. That's how investment works. Neither the entrepreneur nor any employee is personally liable for any losses, although the people may, of course, recover any physical capital.
If the people refuse to capitalize a business, the entrepreneur can borrow money from the government bank. Money borrowed from government bank to capitalize a firm becomes an obligation of the firm while it is operating, but if the firm goes bankrupt, it becomes a personal obligation of the entrepreneur, which cannot be discharged by personal bankruptcy. (How personal bankruptcy and repayment of individual loans operates is beyond the scope of this post.) The government bank, being part of the civil service, grants loans according to the rules mandated by the people and their delegates, but the people do not review individual loans.
Finally, the entrepreneur can make whatever agreements she wishes with other private parties to obtain capital or loans. Capital obtained privately is lost if the firm becomes bankrupt, and loans personally guaranteed by the entrepreneur can be discharged in personal bankruptcy.
This all sounds very "capitalistic," n'est pas? Well, to a certain extent, yes it is. There are is a good reason for the similarity, and there are substantial differences.
The reason for the similarity is that the socialist phase of communism has inherited the economy from capitalism. We have all of these structures and institutions in place, with a huge amount of practical experience in their operation and administration. While Lenin correctly notes that at a certain level we must literally smash capitalist institutions, we have to carefully distinguish between truly capitalist institutions, such as the democratic republic and individual official power, which must be thoroughly discarded, and merely technical institutions, which can be retained and transformed. I maintain (and will be happy to explain elsewhere) that charging rent for capital and interest for loans are, by themselves, (i.e. without the private ownership of the majority of money), technical institutions that can be co-opted by communism, just as capitalism co-opted (and communism, I believe, can co-opt) the feudal judiciary.
There are substantial differences. First, the majority of capital and loans are provided by the people and their delegates, not by private individuals. The people have the decisive advantage that the national government can arbitrarily create and destroy money, through spending, taxation, and the collection of economic rent. Private individuals simply cannot directly compete against the government; they can act productively only when, for some reason, the government fails or refuses to act. Second, employees have more practical freedom of action. They cannot, as under capitalism, be economically coerced; they always have the freedom to leave a job secure in the knowledge they can work directly for the government to provide the necessities of a civilized life. Similarly, because the political institutions are more democratic than in the capitalist republic, there is much less risk of wealthy individuals capturing the political process. Fourth, the people can, at their discretion, place whatever limits on income and wealth they choose. Because economic rent is inherent to the fact of the surplus value of labor, allocating this rent is an ineluctable element of every economy and cannot simply be ignored. Charging economic rent by the people is a necessary element of a socialist economy; the question is not whether, but how. Only after the productive forces have been perfect past the boundaries of capitalism can the notion of careful social management of the allocation of surplus labor be relaxed.
Friday, October 25, 2013
Democratic communism is democratic
In the comments to Standing on one foot, HH asks how democratic communism would actually work. It's a fair question, and before I answer it in more detail, I want to give a non-answer. Democratic communism is democratic, so the general answer to the question, "How does does X work?" is "How do you want it to work?" Democratic communism places the allocation of capital in the hands of a process that is as truly democratic, as completely in the hands of the people, as is physically possible. In contrast, a democratic republic by design takes a lot of important political power out of the hands of the people, sometimes in the name of "efficiency," but also explicitly because the people are not to be trusted. Democratic communism trusts the people, at least to make their own mistakes, in preference to the mistakes of a ruling class. If you don't like democracy in principle, if you don't trust the people, well, ok, but we would then have an ideological difference, not a practical difference. We can talk about our ideological differences elsewhere.
I'm going to answer HH's question in more detail, but that answer will be with my hat of bastard semi-expert* in economics, business administration, legal theory, and bureaucratic theory. Here, I'll talk with my hat of authority on my own theory of democratic communism, about the theory of the firm.
*More semi than expert.
I define here an "entrepreneur" as someone who wishes to create a new business entity, a firm. An "employee" is a person who wishes to join an already existing firm. Both are workers, those who create something that (hopefully) has value to society, and who justly deserve compensation, i.e. deserve to receive value from society. Although some might act completely alone, an entrepreneur will typically want to recruit employees to staff her business.
The first structural constraint on an entrepreneur is that she is not legally privileged at the firm just because she is the one who created the business. If she acquires privilege within the firm, it is by virtue of the employees giving her privilege. Entrepreneurial privilege must be earned, not assumed. I'll address the specific mechanisms by which entrepreneurs can earn privilege in a subsequent post.
The entrepreneur she is always in competition with the government, who employs anyone who wants a job, and pays a living, dignified wage, i.e. a wage sufficient to support a family with the basic civilized necessities. This gives both more and less freedome to an entrepreneur. The firm (not the entrepreneur, as I will discuss below) can pay employees as much or as little as it chooses, but it must compete with the government at that basic level.
Although the entrepreneur typically receives her capital — the money necessary to acquire physical capital and to pay herself and the firm's employees until revenue is realized — from the government, except in special cases (such as the creation and destruction of money), the government cannot forbid or prevent private individuals from doing what it itself does. If she cannot, through the appropriate means, get capital from government, she is free to seek private capital, and make any agreement she wishes to get that private capital. (J. S. Mill makes some convincing arguments for this side-by-side arrangement.)
The government does have an inherent advantage in creating new capital, though: the national government alone can create money, and no individual or group has privileged access to this newly created money. It is allocated either directly democratically or indirectly through democratically controlled and/or accountable institutions. Again: democratic communism is democratic: if you don't like how the government is allocating new capital, because you yourself are ineluctably part of the government, you are free change the rules in a democratic manner. If the majority of your fellow citizens agree with you, you will change the rules. If not, too bad for you.
In the next post I'll talk more directly about specific mechanisms whereby an individual can create a new business.
I'm going to answer HH's question in more detail, but that answer will be with my hat of bastard semi-expert* in economics, business administration, legal theory, and bureaucratic theory. Here, I'll talk with my hat of authority on my own theory of democratic communism, about the theory of the firm.
*More semi than expert.
I define here an "entrepreneur" as someone who wishes to create a new business entity, a firm. An "employee" is a person who wishes to join an already existing firm. Both are workers, those who create something that (hopefully) has value to society, and who justly deserve compensation, i.e. deserve to receive value from society. Although some might act completely alone, an entrepreneur will typically want to recruit employees to staff her business.
The first structural constraint on an entrepreneur is that she is not legally privileged at the firm just because she is the one who created the business. If she acquires privilege within the firm, it is by virtue of the employees giving her privilege. Entrepreneurial privilege must be earned, not assumed. I'll address the specific mechanisms by which entrepreneurs can earn privilege in a subsequent post.
The entrepreneur she is always in competition with the government, who employs anyone who wants a job, and pays a living, dignified wage, i.e. a wage sufficient to support a family with the basic civilized necessities. This gives both more and less freedome to an entrepreneur. The firm (not the entrepreneur, as I will discuss below) can pay employees as much or as little as it chooses, but it must compete with the government at that basic level.
Although the entrepreneur typically receives her capital — the money necessary to acquire physical capital and to pay herself and the firm's employees until revenue is realized — from the government, except in special cases (such as the creation and destruction of money), the government cannot forbid or prevent private individuals from doing what it itself does. If she cannot, through the appropriate means, get capital from government, she is free to seek private capital, and make any agreement she wishes to get that private capital. (J. S. Mill makes some convincing arguments for this side-by-side arrangement.)
The government does have an inherent advantage in creating new capital, though: the national government alone can create money, and no individual or group has privileged access to this newly created money. It is allocated either directly democratically or indirectly through democratically controlled and/or accountable institutions. Again: democratic communism is democratic: if you don't like how the government is allocating new capital, because you yourself are ineluctably part of the government, you are free change the rules in a democratic manner. If the majority of your fellow citizens agree with you, you will change the rules. If not, too bad for you.
In the next post I'll talk more directly about specific mechanisms whereby an individual can create a new business.
Monday, October 21, 2013
Standing on one foot
I was asked to explain democratic communism while standing on one foot. Here it is:
No one is subject to another's arbitrary, undemocratic, economic power. The rest is commentary.
The bourgeois revolutions of the late 18th and early 19th centuries implemented the idea of popular sovereignty: Political power, the power of the state to use violence, belonged to the people, not the king. Before, political power could be owned by individual people just like individual people today own cars and houses. The republic is not just a different kind of government structure, it is a different way of thinking about political power at the most fundamental level.
Democratic communism extends that way of thinking to economic power, the ownership of money, credit, and productive assets like factories and stores. These objects of economic power are to be owned not individually, but socially and democratically.
Communism does not abolish the notion of personal property. By definition, personal property does not allow the owner to exercise any kind of control over another person. That someone owns her house, her car, her furniture, and her savings for personal use does not give her any kind of control over anyone else. No one else needs her property to live or work.
Instead, communism abolishes the notion of absentee ownership, especially over land, labor, and capital. No one but the tenant, or the democratic state, can own the land; no one but the worker, or the democratic state, can own the means of production; and no one but the worker — not even the state — can own his labor.
Capitalism requires the "individual liberty" to have economic power over other people, and as best it can, protects this "liberty" from regulation, control, or abolition by popular government. Communism, perhaps counter-intuitively, is more individualistic than republican capitalism. Communism abolishes only the "liberty" to use economic means to infringe the liberty of others; it takes an unjust liberty away from a small group, the owners of capital, and restores a just liberty to a large group, the tenants and workers.
If the protection of property in the Fifth Amendment and Article 17 is interpreted as the protection of personal property, democratic communism is entirely compatible with the United States Bill of Rights and the the United Nations Universal Declaration of Human Rights*.
*Assuming a delegated democracy is considered to employ "equivalent free voting procedures" per Article 21, section 3.
The democratic commune protects economic liberty in three basic ways. First, it borrows from capitalism the institution of constitutionally protected individual liberties upheld by independent courts. To the political liberties guaranteed by the Bill of Rights, a communist constitution centralizes Article 23 of the Universal Declaration, guaranteeing the right to work without employment or wage discrimination at an living wage. Second, it uses the state's power to create money to capitalize businesses and employ people directly. It also uses the power to create money to directly capitalize businesses of any kind. If people have an alternative, it is much more difficult to control them using the threat of unemployment. Finally, it uses democratic legislation to regulate how businesses are run, ensuring worker — not government or capitalist — control of ordinary businesses. The commune also extends these means to regulate tenancy as well as employment, the other primary way capitalists exert economic power over workers.
Democratic communism does not forbid absentee ownership outright, nor must it do so; it merely regulates absentee ownership and provides alternatives. If some workers want to privately capitalize their business, if some individuals want to rent a house or apartment from a private individual, they are free to do so. The critical point under democratic communism is that individuals always have a public, democratic alternative to private contracts. They may vote themselves capital and housing, and control that capital and housing democratically.
Although people exercise democratic control of capital and housing, democratic communism does not offer a free lunch. Workers must pay for the capital they vote themselves by productively employing it; and tenants must pay to build and maintain the housing they vote themselves. Democratic communism merely gives people the legal right to work for what they themselves want; they need not submit their economic will to the arbitrary will of the owners of capital.
How to actually implement such a scheme is non-trivial. Implementation is very complicated and, to a large extent, must be negotiated socially. But it is useful, I think, to have a good understand of the general principles of democratic communism.
No one is subject to another's arbitrary, undemocratic, economic power. The rest is commentary.
The bourgeois revolutions of the late 18th and early 19th centuries implemented the idea of popular sovereignty: Political power, the power of the state to use violence, belonged to the people, not the king. Before, political power could be owned by individual people just like individual people today own cars and houses. The republic is not just a different kind of government structure, it is a different way of thinking about political power at the most fundamental level.
Democratic communism extends that way of thinking to economic power, the ownership of money, credit, and productive assets like factories and stores. These objects of economic power are to be owned not individually, but socially and democratically.
Communism does not abolish the notion of personal property. By definition, personal property does not allow the owner to exercise any kind of control over another person. That someone owns her house, her car, her furniture, and her savings for personal use does not give her any kind of control over anyone else. No one else needs her property to live or work.
Instead, communism abolishes the notion of absentee ownership, especially over land, labor, and capital. No one but the tenant, or the democratic state, can own the land; no one but the worker, or the democratic state, can own the means of production; and no one but the worker — not even the state — can own his labor.
Capitalism requires the "individual liberty" to have economic power over other people, and as best it can, protects this "liberty" from regulation, control, or abolition by popular government. Communism, perhaps counter-intuitively, is more individualistic than republican capitalism. Communism abolishes only the "liberty" to use economic means to infringe the liberty of others; it takes an unjust liberty away from a small group, the owners of capital, and restores a just liberty to a large group, the tenants and workers.
If the protection of property in the Fifth Amendment and Article 17 is interpreted as the protection of personal property, democratic communism is entirely compatible with the United States Bill of Rights and the the United Nations Universal Declaration of Human Rights*.
*Assuming a delegated democracy is considered to employ "equivalent free voting procedures" per Article 21, section 3.
The democratic commune protects economic liberty in three basic ways. First, it borrows from capitalism the institution of constitutionally protected individual liberties upheld by independent courts. To the political liberties guaranteed by the Bill of Rights, a communist constitution centralizes Article 23 of the Universal Declaration, guaranteeing the right to work without employment or wage discrimination at an living wage. Second, it uses the state's power to create money to capitalize businesses and employ people directly. It also uses the power to create money to directly capitalize businesses of any kind. If people have an alternative, it is much more difficult to control them using the threat of unemployment. Finally, it uses democratic legislation to regulate how businesses are run, ensuring worker — not government or capitalist — control of ordinary businesses. The commune also extends these means to regulate tenancy as well as employment, the other primary way capitalists exert economic power over workers.
Democratic communism does not forbid absentee ownership outright, nor must it do so; it merely regulates absentee ownership and provides alternatives. If some workers want to privately capitalize their business, if some individuals want to rent a house or apartment from a private individual, they are free to do so. The critical point under democratic communism is that individuals always have a public, democratic alternative to private contracts. They may vote themselves capital and housing, and control that capital and housing democratically.
Although people exercise democratic control of capital and housing, democratic communism does not offer a free lunch. Workers must pay for the capital they vote themselves by productively employing it; and tenants must pay to build and maintain the housing they vote themselves. Democratic communism merely gives people the legal right to work for what they themselves want; they need not submit their economic will to the arbitrary will of the owners of capital.
How to actually implement such a scheme is non-trivial. Implementation is very complicated and, to a large extent, must be negotiated socially. But it is useful, I think, to have a good understand of the general principles of democratic communism.
Saturday, October 19, 2013
Communism and altruism
It has been alleged (and I use the passive voice on purpose) that communism entails a kind of "radical altruism," which is ineluctably contrary to human nature. In the most direct form, communism is criticized because it entails that every individual completely abandon his or her own well-being for the "good of society." I'm skeptical that very many canonical communist thinkers have actually made this case outside of a purely revolutionary context, e.g. "The fear of death is the beginning of slavery,"* but even if they did, the idea of absolute altruism can be discarded while still keeping the core elements of communism: worker ownership of the means of production and the ideal economic society of "from each according to his ability, to each according to his need." The best justification for communism is not altruism but utilitarianism: communism produces the society that creates the greatest good for the greatest number. Thus, a moral or psychological critique of communism entails showing either that communism cannot be reasonably expected to create the greatest good, or that utilitarianism (instead of radical altruism) is philosophically or psychologically untenable. The first critique is beyond the scope of this post; I want to focus on the philosophical and psychological status of utilitarianism.
*variously attributed
The philosophical critique of utilitarianism falls into three categories*. First, utilitarianism requires a "felicific calculus," to use Bentham's phrase, which is overly simplistic or unnecessarily elaborate. This critique, while mostly accurate, does not address utilitarianism at a fundamental level. It's clearly possible to talk about utility in a consistent way: we can, for example, just ask people whether they are happy or unhappy. To say that it is difficult to measure utility does not say that we should not maximize utility if we could measure it perfectly, or maximize utility as best we can measure it. It might or might not be a valid critique that we cannot indirectly measure utility well enough to make utilitarianism useful, but it is simply invalid to say that because we cannot measure utility directly or perfectly that utilitarianism is fundamentally unsound.
*There are actually four, but the fourth consists of arguments based on one or more logical or rhetorical fallacies, such as defining utility narrowly or objectively (contradicting a fundamental premise of utilitarianism), arguing that utilitarianism is flawed just because it is different from something other than utilitarianism, or the ad hominem argument that utilitarianism fails because Bentham was an architect of capitalism and had some very stupid, horrible ideas.
The second critique is the "Omelas" critique: even if we could measure utility perfectly, there are (approximate) maxima of utility that profoundly violate our moral sensibilities. Ursula LeGuin's short story, "The Ones Who Walk Away from Omelas," is the canonical example. I have addressed this particular criticism earlier at greater length; one obvious counterargument is that we have no reason to believe — and many reasons to disbelieve — that there could possibly be any causal relationship between torturing a child and a happy society. It's possible that different laws of physics might render a society like Omelas meaningful, but our own moral intuitions, like our physical intuitions, were constructed by and are about this world.
Furthermore, utility is fundamentally subjective; a social structure that causes many people to have severe moral pain is by definition counter-utilitarian. If Omelas did not cause such severe moral pain, there would be none who walked away. Omelas therefore does not, even within the premises of utilitarianism, maximize utility.
The Omelas critique is fundamentally empirical, not logical. All variations of this argument make two premises. First, we have perfect information about what maximizes utility; second, based on that perfect information, the maximum of utility violates our moral intuitions. There are three counterarguments. First, we do not and cannot have perfect information; if things were different they would be different, and we are concerned with morality in this world, not some hypothetical possible world in which people have perfect information about utility. Second, there is no reason to believe that if we did have perfect information, the maximum of utility would actually violate our moral intuition; if such a case could could be proven in this actual world, we might reconsider utilitarianism, but, as best I can tell, such scenarios are entirely hypothetical, not real. Finally, even if we could determine conclusively that some maximum of utility actually did violate our moral intuition, perhaps it is our intuition that is defective, not utilitarianism. Again, we would have to thoroughly understand the trade-off between utility and our intuition in the real world to make a reasoned judgment.
The third critique is the psychological critique. According to utilitarianism, each individual should choose each of her individual actions based on what is best for all people, with her own personal utility a mostly insignificant residuum of that calculation. It seems readily apparent from introspection and common sense that not only do people not actually think this way, it is completely unreasonable to expect them to. A moral system has to be built on the psychology of people who live here now, and it would be presumptuous to discuss the morality of our descendants a thousand years hence, who might have a psychology compatible with our notions of utilitarianism. While utilitarianism does not demand that individuals completely ignore their own well-being, the diminution of their own utility to statistical insignificance comes pretty close. However, this is a fundamental misreading of Bentham's own work: although it is one legitimate way of understanding utilitarianism, it is not the only legitimate reading, and it is not how Bentham explicitly asks us to read the fundamental principle of utilitarianism.
Crucial to understanding utilitarianism is the fundamental impossibility of actually computing the greatest good for the greatest number. There are two problems with such a computation. First, it is computationally intractable. There are too many dimensions, one for each individual's desire; even if each individual had only 100 identifiable desires, we would have to solve 700 billion simultaneous equations to compute maximal utility. Furthermore, there are dynamic effects: changes in the world produce changes in our desires, in our subjective opinions about utility. Second, as noted above, we do not have very good measures of how our actions will affect other people's utility. Even if we could solve 700 billion simultaneous equations, we don't have the numbers to plug into the equations. If utilitarianism required that we perform a computationally intractable task without data, it would be an obvious failure. Fortunately, utilitarianism does not require such a task.
We cannot calculate for every decision which choice is best for everyone, but we can estimate which choices make the total utility better. We cannot maximize total utility, but we can increase total utility. And to do so, we need not, as individuals, ignore or minimize our own utility. We cannot consider our own individual utility to be a priori better than others', but each individual can consider himself an "expert" on what his own utility actually is. In the Introduction to A Manual of Political Economy, Bentham makes this point clear: "[W]ithout some special reason, the general rule is, that nothing ought to be done or attempted by government." Bentham argues that in the general case, total utility is best improved by each individual maximizing her own utility: "Generally speaking, there is no one who knows what is for your interest, so well as yourself—no one who is disposed with so much ardour and constancy to pursue it. . . . Each individual bestowing more time and attention upon the means of preserving and increasing his portion of wealth, than is or can be bestowed by government, is likely to take a more effectual course than what, in his instance and on his behalf, would be taken by government." Generally, Bentham asserts that we can just satisfy our own interests without worrying about computing the effects on total utility, and when we can make larger statistical calculations, those calculations are "special," not general. Bentham himself does not expect individuals to reduce their own interests to statistical insignificance, and indeed it is only in special cases that we need to consider statistical calculations at all.
Bentham is not contradicting himself. When I improve my own well-being without harming others, insofar as I can actually calculate, I am thereby increasing total utility. And, by and large, that is what civilized people actually do. If I want a hamburger, I just go get a hamburger. I am improving my own utility without, as best I can tell from our social agreements permitting the sale of hamburgers, harming others. And I do not harm others in satisfying my desire: if there is a line at Burger King, I don't bully my way to the front: it is unacceptable to improve my utility by getting my hamburger now by making others wait longer. I don't steal the hamburger; I work to earn the money and then pay for it. Some might assert that eating hamburgers in general harms total utility more than it satisfies our individuals' desire for hamburgers, but they have to prove "some special reason" why this is true, and in making their case, no individual's desires are a priori more important than any others. We have the goal of always improving total utility, and we move closer to that goal using the tools we actually have; there is no need to require tools we do not and (probably) cannot have.
A lot of people, myself included, think that this is precisely how a civilized, liberal society ought to work. Generally, we satisfy our own desires, not because our own desires are a priori more important than others, but because we are experts in our own desires, and generally, we can more effectively improve total utility by exercising our expertise than by any other means. We fulfill our own desires, as best we can tell, without harming others. When our desires come into fundamental conflict, we have to look to special reasons, which do not take any individual's or group's desires as a priori more important than any others. To the extent that we have "moral principles," we use these principles not as absolute truths, but empirical regularities that we believe improve total utility under conditions of uncertainty, risk, and hidden information, and we can change these principles when our understanding of reality, or reality itself, changes. Far from being psychologically radical, utilitarianism is completely ordinary social reasoning for many people.
Communism is in principle utilitarian. We may be mistaken, but communists believe that communism is the greatest good for the greatest number. We focus on workers because workers are the largest segment of society, because workers can improve both their own and others' utility without harming anyone, and because everyone can be a worker. The only utility communists seek to diminish is the utility of rentiers, and only to the extent that rentiers' utility is, by definition, gained at the diminution of workers' utility. I cannot think of a better utilitarian argument.
*variously attributed
The philosophical critique of utilitarianism falls into three categories*. First, utilitarianism requires a "felicific calculus," to use Bentham's phrase, which is overly simplistic or unnecessarily elaborate. This critique, while mostly accurate, does not address utilitarianism at a fundamental level. It's clearly possible to talk about utility in a consistent way: we can, for example, just ask people whether they are happy or unhappy. To say that it is difficult to measure utility does not say that we should not maximize utility if we could measure it perfectly, or maximize utility as best we can measure it. It might or might not be a valid critique that we cannot indirectly measure utility well enough to make utilitarianism useful, but it is simply invalid to say that because we cannot measure utility directly or perfectly that utilitarianism is fundamentally unsound.
*There are actually four, but the fourth consists of arguments based on one or more logical or rhetorical fallacies, such as defining utility narrowly or objectively (contradicting a fundamental premise of utilitarianism), arguing that utilitarianism is flawed just because it is different from something other than utilitarianism, or the ad hominem argument that utilitarianism fails because Bentham was an architect of capitalism and had some very stupid, horrible ideas.
The second critique is the "Omelas" critique: even if we could measure utility perfectly, there are (approximate) maxima of utility that profoundly violate our moral sensibilities. Ursula LeGuin's short story, "The Ones Who Walk Away from Omelas," is the canonical example. I have addressed this particular criticism earlier at greater length; one obvious counterargument is that we have no reason to believe — and many reasons to disbelieve — that there could possibly be any causal relationship between torturing a child and a happy society. It's possible that different laws of physics might render a society like Omelas meaningful, but our own moral intuitions, like our physical intuitions, were constructed by and are about this world.
Furthermore, utility is fundamentally subjective; a social structure that causes many people to have severe moral pain is by definition counter-utilitarian. If Omelas did not cause such severe moral pain, there would be none who walked away. Omelas therefore does not, even within the premises of utilitarianism, maximize utility.
The Omelas critique is fundamentally empirical, not logical. All variations of this argument make two premises. First, we have perfect information about what maximizes utility; second, based on that perfect information, the maximum of utility violates our moral intuitions. There are three counterarguments. First, we do not and cannot have perfect information; if things were different they would be different, and we are concerned with morality in this world, not some hypothetical possible world in which people have perfect information about utility. Second, there is no reason to believe that if we did have perfect information, the maximum of utility would actually violate our moral intuition; if such a case could could be proven in this actual world, we might reconsider utilitarianism, but, as best I can tell, such scenarios are entirely hypothetical, not real. Finally, even if we could determine conclusively that some maximum of utility actually did violate our moral intuition, perhaps it is our intuition that is defective, not utilitarianism. Again, we would have to thoroughly understand the trade-off between utility and our intuition in the real world to make a reasoned judgment.
The third critique is the psychological critique. According to utilitarianism, each individual should choose each of her individual actions based on what is best for all people, with her own personal utility a mostly insignificant residuum of that calculation. It seems readily apparent from introspection and common sense that not only do people not actually think this way, it is completely unreasonable to expect them to. A moral system has to be built on the psychology of people who live here now, and it would be presumptuous to discuss the morality of our descendants a thousand years hence, who might have a psychology compatible with our notions of utilitarianism. While utilitarianism does not demand that individuals completely ignore their own well-being, the diminution of their own utility to statistical insignificance comes pretty close. However, this is a fundamental misreading of Bentham's own work: although it is one legitimate way of understanding utilitarianism, it is not the only legitimate reading, and it is not how Bentham explicitly asks us to read the fundamental principle of utilitarianism.
Crucial to understanding utilitarianism is the fundamental impossibility of actually computing the greatest good for the greatest number. There are two problems with such a computation. First, it is computationally intractable. There are too many dimensions, one for each individual's desire; even if each individual had only 100 identifiable desires, we would have to solve 700 billion simultaneous equations to compute maximal utility. Furthermore, there are dynamic effects: changes in the world produce changes in our desires, in our subjective opinions about utility. Second, as noted above, we do not have very good measures of how our actions will affect other people's utility. Even if we could solve 700 billion simultaneous equations, we don't have the numbers to plug into the equations. If utilitarianism required that we perform a computationally intractable task without data, it would be an obvious failure. Fortunately, utilitarianism does not require such a task.
We cannot calculate for every decision which choice is best for everyone, but we can estimate which choices make the total utility better. We cannot maximize total utility, but we can increase total utility. And to do so, we need not, as individuals, ignore or minimize our own utility. We cannot consider our own individual utility to be a priori better than others', but each individual can consider himself an "expert" on what his own utility actually is. In the Introduction to A Manual of Political Economy, Bentham makes this point clear: "[W]ithout some special reason, the general rule is, that nothing ought to be done or attempted by government." Bentham argues that in the general case, total utility is best improved by each individual maximizing her own utility: "Generally speaking, there is no one who knows what is for your interest, so well as yourself—no one who is disposed with so much ardour and constancy to pursue it. . . . Each individual bestowing more time and attention upon the means of preserving and increasing his portion of wealth, than is or can be bestowed by government, is likely to take a more effectual course than what, in his instance and on his behalf, would be taken by government." Generally, Bentham asserts that we can just satisfy our own interests without worrying about computing the effects on total utility, and when we can make larger statistical calculations, those calculations are "special," not general. Bentham himself does not expect individuals to reduce their own interests to statistical insignificance, and indeed it is only in special cases that we need to consider statistical calculations at all.
Bentham is not contradicting himself. When I improve my own well-being without harming others, insofar as I can actually calculate, I am thereby increasing total utility. And, by and large, that is what civilized people actually do. If I want a hamburger, I just go get a hamburger. I am improving my own utility without, as best I can tell from our social agreements permitting the sale of hamburgers, harming others. And I do not harm others in satisfying my desire: if there is a line at Burger King, I don't bully my way to the front: it is unacceptable to improve my utility by getting my hamburger now by making others wait longer. I don't steal the hamburger; I work to earn the money and then pay for it. Some might assert that eating hamburgers in general harms total utility more than it satisfies our individuals' desire for hamburgers, but they have to prove "some special reason" why this is true, and in making their case, no individual's desires are a priori more important than any others. We have the goal of always improving total utility, and we move closer to that goal using the tools we actually have; there is no need to require tools we do not and (probably) cannot have.
A lot of people, myself included, think that this is precisely how a civilized, liberal society ought to work. Generally, we satisfy our own desires, not because our own desires are a priori more important than others, but because we are experts in our own desires, and generally, we can more effectively improve total utility by exercising our expertise than by any other means. We fulfill our own desires, as best we can tell, without harming others. When our desires come into fundamental conflict, we have to look to special reasons, which do not take any individual's or group's desires as a priori more important than any others. To the extent that we have "moral principles," we use these principles not as absolute truths, but empirical regularities that we believe improve total utility under conditions of uncertainty, risk, and hidden information, and we can change these principles when our understanding of reality, or reality itself, changes. Far from being psychologically radical, utilitarianism is completely ordinary social reasoning for many people.
Communism is in principle utilitarian. We may be mistaken, but communists believe that communism is the greatest good for the greatest number. We focus on workers because workers are the largest segment of society, because workers can improve both their own and others' utility without harming anyone, and because everyone can be a worker. The only utility communists seek to diminish is the utility of rentiers, and only to the extent that rentiers' utility is, by definition, gained at the diminution of workers' utility. I cannot think of a better utilitarian argument.
Saturday, September 21, 2013
Objections to communism
One advantage of going to college (and establishing a reputation as a reasonably intelligent, hard-working student) is that I get to hear the objections to my ideas from intelligent and well-educated people of good will. Good will is especially important: it's tedious and unproductive to talk to people who are simply enraged that I hold ideas different from their own. (The latter, sadly, characterizes much of the "discourse" on the blog, which is why I don't encourage comments. I can't remember a single instance here of a well-reasoned and well-intention objection to my primary ideas. [eta: there are some, but few.] The exceptions are typically people who generally agree with me; it's nice to know that I'm not completely alone, but it's vastly easier to learn from disagreement than agreement.)
I have heard a number of objections to "communism" in the course of my career. First, there are objections I mostly agree with; a workable communist system should, I think, address these concerns:
Second, there are objections I mostly disagree with; made by people who are well-intentioned, these objections require thoughtful rebuttal.
And, finally, there is the standard objection to revolution: However egregiously flawed the republican capitalist system, it is the system we have, with an enormous investment in making it (more or less) work; replacing it with a fundamentally different, relatively untried, system poses the risk of a catastrophic failure far worse than republican capitalism. I've written on this last topic at length. To sum up, I agree that we should not replace a system that is not in catastrophic failure; I disagree in that I see capitalism on the road to catastrophic failure; I'm convinced that even if capitalism does not fail catastrophically, radicalism strengthens and empower reformers.
I'll talk about these objections at greater length in future posts.
I have heard a number of objections to "communism" in the course of my career. First, there are objections I mostly agree with; a workable communist system should, I think, address these concerns:
- Communism, as traditionally defined, requires almost all individuals to be radically altruistic.
- Central planning cannot efficiently manage the complexity and interactivity of the large number of transactions necessary for managing a complex industrial economy.
Second, there are objections I mostly disagree with; made by people who are well-intentioned, these objections require thoughtful rebuttal.
- Entrepreneurs will not innovate without the incentive of private ownership.
- Individuals will not work hard without the potential obtaining enough wealth to become rentiers
- Government is philosophically and institutionally incompetent to manage the economy, in a fundamentally different sense than the complexity objection above.
- It is always more efficient to allocate capital at all levels by private decisions rather than public decisions.
And, finally, there is the standard objection to revolution: However egregiously flawed the republican capitalist system, it is the system we have, with an enormous investment in making it (more or less) work; replacing it with a fundamentally different, relatively untried, system poses the risk of a catastrophic failure far worse than republican capitalism. I've written on this last topic at length. To sum up, I agree that we should not replace a system that is not in catastrophic failure; I disagree in that I see capitalism on the road to catastrophic failure; I'm convinced that even if capitalism does not fail catastrophically, radicalism strengthens and empower reformers.
I'll talk about these objections at greater length in future posts.
Sunday, September 15, 2013
Leadership and the fall of Kerista
In my recently published paper that I linked to yesterday, I attribute the fall of Kerista primarily to their adoption of value of purity. I want to clarify a few points that I perhaps did not fully explain in the paper.
Every community is a complicated mix of personalities, institutions, customs, habits, and is embedded in a complex social and physical environment. Kerista was no exception. The most glaringly obvious feature of Kerista was that by the 1980s, Jud, the founder of the commune, had become a significant destructive force. Every few months, Jud would confront a target, usually a man from the Purple Submarine BFIC (to which he and I both belonged), and just hammer them until he left, or everyone was exhausted from the confrontation. It's clear that Jud was, by nature, kind of a dick. All right, a pretty big dick. If Jud hadn't been a big dick, the commune would definitely have lasted longer.
On the other hand, most leaders are dicks. A leader, by definition, is someone who is able to get followers to do what they wouldn't have done had they not been following that leader, i.e. to do what they naturally wouldn't have done. Everyone likes to think that followers and leaders alike are motivated by the mutual interest in the success of the organization. In this view, the leader just serves as kind of a "focus" for that mutual interest. People are not so much obeying the leader as obeying their own self-interest, which is furthered by the interest of the organization. (I.e. if the company does well, we all get paid and have nice stuff.) The leader just makes mutually beneficial behavior possible, and suppresses only internal cheating and free riding, which undermine mutual benefit. (See my perseveration on the drisoner's dilemma.)
But I have spent enough time as a follower and manager to know that the most effective leaders are those who go beyond this model, who can effectively use negative incentives (e.g. the desire to not get yelled at) to get more performance from even those among their followers who are acting on their own accord for the mutual benefit of the organization. An effective manager will find ways to get a good employees to work more and more intensely than they would were they motivated only by the expectation of mutual benefit. This feature of leadership is what makes it enormously difficult to be a leader. It's not enough to just yell at your employees or followers all the time; relying almost exclusively on negative incentives is worse than never using negative incentives at all. Followers can't just fear the leader; they have to respect and admire them too. And not only is there a fine line between too much and too little negative incentive, there's a dialectical relationship between the leader and the followers: they both affect each other, and how incentives play out in the organization.
This "crack the whip" leadership is deeply problematic at the analytical level. On the one hand, the leader's use of negative incentives is morally indefensible: it consists of getting followers to do things that really do not sufficiently benefit the followers, at least not materially. On the other hand, because motivation by negative reinforcement is possible, it happens, and organizations and institutions with effective leaders. i.e. those who can effectively use negative incentives, will out-compete those with less effective leaders. Regardless of any moral qualms about negative incentives, we would have to make deep changes in human psychology to eliminate them, and attempting to make deep changes in personal and social psychology, however morally justified those changes might be, usually results in catastrophe.
In one sense, Kerista fell because of the entrepreneur's dilemma. The entrepreneur's dilemma is well known to anyone who has worked in a lot of small businesses that intend to grow into large businesses (and has probably been discussed at length in the academic and popular literature): the leadership qualities that make an effective leader of a small business are very different from those that make an effective leader of a large business. To grow from a small business to a large business requires either a leader who can encompass both leadership styles, a leader who can relinquish control when the business becomes large enough, or an environment that facilitates ousting the small business leader. If none of those things happen, the small business will inevitably collapse when it gets too large. (Some businesses just stay small; however, if the leader wants it to grow large, he or she will keep trying to grow it, and become frustrated and irrational when it fails to grow, which will cause its collapse.)
Jud was manifestly effective at building a 20-30 person commune and keeping it together for about 20 years. When the commune became large enough and sufficiently economically successful, the qualities that made Jud an effective leader at the small scale made him a counter-productive leader at the larger level. Since Jud had considerable legitimacy as a leader, the culture of the commune could not easily replace his leadership. There's also the economic issue: the commune started really disbanding, I think, just when the computer business started to decline. People will tolerate a lot when they're working hard and making money; take away that economic success, and they get more critical of their social environment.
There are also other factors. Anecdotal evidence suggests that most people in the commune did not actually like polyfidelity, and did not like communal living. This dislike is difficult for me to understand because I really did like those aspects of Kerista. I don't think I'm particularly special; I think, perhaps, that there are many people like me, who would find communal polyfidelity itself rewarding and satisfying. But all of the people in Kerista (myself included) ended up in economically individualistic monogamous relationships even after Jud was ousted. No organization, culture, or institution can last long if it is at odds with the fundamental desires of its members. Without Jud more or less making people practice communal polyfidelity, the conflict between the members' desire for economic individualism and preferential dyadic relationships doomed the ideal of communal polyfidelity, and the commune justly disbanded.
All of these factors definitely contributed to the fall of Kerista. They may even be more important factors than the one I focused on in my paper: the toxic value of purity. However, I think my analysis of this value in the commune is important, for a number of reasons I'll discuss later.
Every community is a complicated mix of personalities, institutions, customs, habits, and is embedded in a complex social and physical environment. Kerista was no exception. The most glaringly obvious feature of Kerista was that by the 1980s, Jud, the founder of the commune, had become a significant destructive force. Every few months, Jud would confront a target, usually a man from the Purple Submarine BFIC (to which he and I both belonged), and just hammer them until he left, or everyone was exhausted from the confrontation. It's clear that Jud was, by nature, kind of a dick. All right, a pretty big dick. If Jud hadn't been a big dick, the commune would definitely have lasted longer.
On the other hand, most leaders are dicks. A leader, by definition, is someone who is able to get followers to do what they wouldn't have done had they not been following that leader, i.e. to do what they naturally wouldn't have done. Everyone likes to think that followers and leaders alike are motivated by the mutual interest in the success of the organization. In this view, the leader just serves as kind of a "focus" for that mutual interest. People are not so much obeying the leader as obeying their own self-interest, which is furthered by the interest of the organization. (I.e. if the company does well, we all get paid and have nice stuff.) The leader just makes mutually beneficial behavior possible, and suppresses only internal cheating and free riding, which undermine mutual benefit. (See my perseveration on the drisoner's dilemma.)
But I have spent enough time as a follower and manager to know that the most effective leaders are those who go beyond this model, who can effectively use negative incentives (e.g. the desire to not get yelled at) to get more performance from even those among their followers who are acting on their own accord for the mutual benefit of the organization. An effective manager will find ways to get a good employees to work more and more intensely than they would were they motivated only by the expectation of mutual benefit. This feature of leadership is what makes it enormously difficult to be a leader. It's not enough to just yell at your employees or followers all the time; relying almost exclusively on negative incentives is worse than never using negative incentives at all. Followers can't just fear the leader; they have to respect and admire them too. And not only is there a fine line between too much and too little negative incentive, there's a dialectical relationship between the leader and the followers: they both affect each other, and how incentives play out in the organization.
This "crack the whip" leadership is deeply problematic at the analytical level. On the one hand, the leader's use of negative incentives is morally indefensible: it consists of getting followers to do things that really do not sufficiently benefit the followers, at least not materially. On the other hand, because motivation by negative reinforcement is possible, it happens, and organizations and institutions with effective leaders. i.e. those who can effectively use negative incentives, will out-compete those with less effective leaders. Regardless of any moral qualms about negative incentives, we would have to make deep changes in human psychology to eliminate them, and attempting to make deep changes in personal and social psychology, however morally justified those changes might be, usually results in catastrophe.
In one sense, Kerista fell because of the entrepreneur's dilemma. The entrepreneur's dilemma is well known to anyone who has worked in a lot of small businesses that intend to grow into large businesses (and has probably been discussed at length in the academic and popular literature): the leadership qualities that make an effective leader of a small business are very different from those that make an effective leader of a large business. To grow from a small business to a large business requires either a leader who can encompass both leadership styles, a leader who can relinquish control when the business becomes large enough, or an environment that facilitates ousting the small business leader. If none of those things happen, the small business will inevitably collapse when it gets too large. (Some businesses just stay small; however, if the leader wants it to grow large, he or she will keep trying to grow it, and become frustrated and irrational when it fails to grow, which will cause its collapse.)
Jud was manifestly effective at building a 20-30 person commune and keeping it together for about 20 years. When the commune became large enough and sufficiently economically successful, the qualities that made Jud an effective leader at the small scale made him a counter-productive leader at the larger level. Since Jud had considerable legitimacy as a leader, the culture of the commune could not easily replace his leadership. There's also the economic issue: the commune started really disbanding, I think, just when the computer business started to decline. People will tolerate a lot when they're working hard and making money; take away that economic success, and they get more critical of their social environment.
There are also other factors. Anecdotal evidence suggests that most people in the commune did not actually like polyfidelity, and did not like communal living. This dislike is difficult for me to understand because I really did like those aspects of Kerista. I don't think I'm particularly special; I think, perhaps, that there are many people like me, who would find communal polyfidelity itself rewarding and satisfying. But all of the people in Kerista (myself included) ended up in economically individualistic monogamous relationships even after Jud was ousted. No organization, culture, or institution can last long if it is at odds with the fundamental desires of its members. Without Jud more or less making people practice communal polyfidelity, the conflict between the members' desire for economic individualism and preferential dyadic relationships doomed the ideal of communal polyfidelity, and the commune justly disbanded.
All of these factors definitely contributed to the fall of Kerista. They may even be more important factors than the one I focused on in my paper: the toxic value of purity. However, I think my analysis of this value in the commune is important, for a number of reasons I'll discuss later.
Saturday, September 14, 2013
And to no more settle for less than purity
I have been published!
"And to no more settle for less than purity: Reflections on the Kerista Commune." Praxis, 1.1: 58-73.
Check out the whole issue, where you'll read many good articles by my fellow students.
"And to no more settle for less than purity: Reflections on the Kerista Commune." Praxis, 1.1: 58-73.
Check out the whole issue, where you'll read many good articles by my fellow students.
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