Posted on February 28, 2011 by Benjamin David Steele
This video is an explanation of the type of issue I often consider. Listening to it, it got me thinking about why this needs to be explained.
Going by the data I’ve seen, this explanation seems obvious. I honestly can’t see any other convincing explanation. Yes, some rich people are deserving, but many aren’t deserving of being as rich as they are or aren’t any more deserving (in terms of talent, intelligence, ambition, etc) than many less advantaged people.
So, why doesn’t this seem obvious to many conservatives? What keeps them from seeing it? I suspect many refuse to seriously consider the data because it contradicts their beliefs and assumptions. That is understandable. If they get all their news from Fox News, Wall Street Journal, and right-wing talk shows, they probably never (or, at least, very rarely) would even come across any data that contradicts their beliefs and assumptions. That is sad, but understandable.
Still, I doubt that this explains it all. There has to be many conservatives who are familiar with the data and yet still support the rich having advantages. Why?
Is it just team sports mentality, just rich people defending other rich people that they personally identify with as being part of their group? That makes sense psychologically. Poor people do the same thing, although less effectively since they less power.
Another explanation is that some people believe that, despite inequality being morally wrong or less than perfect, is still better than the alternative. Maybe it’s a belief that the egalitarian vision is dangerous. It’s better to have an imperfect system than to risk its destruction by trying to improve it. Certainly, some conservatives do believe this, but I find it a bit too convenient that they many rich conservatives just so happen to support the analysis that benefits them personally.
Yet another explanation is that some people are just cynical. They have theirs. Fuck everyone else. They are on top of the wall and so they kick the ladder away to ensure no one can challenge their position of power. I wonder about this. How many conservatives are this cynical? Or, if not quite this cynical, how many conservatives are to varying degrees motivated by cynicism?
I don’t ask this as a way to dismiss all conservatives and all rich people. I genuinely want to understand what motivates people, want to understand why inequality keeps growing in this country. I can’t believe it’s a mere accidental side effect of an otherwise moral system. There is a class war going on, but I don’t know how many people even see it. For those who don’t see it, what is their incentive in remaining blind to the suffering of others?
“A source of mild entertainment amid the financial carnage has been watching libertarians scurrying to explain how the global financial crisis is the result of too much government intervention rather than too little. One line of argument casts as villain the Community Reinvestment Act, which prevents banks from “redlining” minority neighborhoods as not creditworthy.Another theory blames Fannie Mae and Freddie Mac for causing the trouble by subsidizing and securitizing mortgages with an implicit government guarantee. An alternative thesis is that past bailouts encouraged investors to behave recklessly in anticipation of a taxpayer rescue.
“There are rebuttals to these claims and rejoinders to the rebuttals. But to summarize, the libertarian apologetics fall wildly short of providing any convincing explanation for what went wrong. The argument as a whole is reminiscent of wearying dorm-room debates that took place circa 1989 about whether the fall of the Soviet bloc demonstrated the failure of communism. Academic Marxists were never going to be convinced that anything that happened in the real world could invalidate their belief system. Utopians of the right, libertarians are just as convinced that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along.
“To which the rest of us can only respond, Haven’t you people done enough harm already?We have narrowly avoided a global depression and are mercifully pointed toward merely the worst recession in a long while. This is thanks to a global economic meltdown made possible by libertarian ideas. I don’t have much patience with the notion that trying to figure out how we got into this mess is somehow unacceptably vicious and pointless—Sarah Palin’s view of global warming. As with any failure, inquest is central to improvement. And any competent forensic work has to put the libertarian theory of self-regulating financial markets at the scene of the crime.”
Posted on October 11, 2010 by Benjamin David Steele
I was having a discussion with an anarcho-capitalist who was moderate rather than ideological. It was quite refreshing. Most of the anarcho-capitalists I’ve met have been extremely ideological.
I myself am persuaded by both anarcho-primitivism and progressivism. I think civilization is problematic, but as long as civilization exists I consider it morally optimal to seek the greatest good for the greatest numbers while preventing as many problems as possible. I’m unpersuaded by the idolization of enlightened selfishness and the monetization of human life.
Here is a video this person shared with me to present his anarcho-capitalist view:
Here are two of my responses:
– FIRST RESPONSE –
He is right about the problems of government building logging roads and selling trees at below market cost. Derrick Jensen discusses that issue. Ownership does increase short-term responsibility. A company will want to ensure its profits are maintained in the near future, but this becomes less certain in terms of decades & completely uncertain in terms of generations.
Also, this video leaves out some important issues.
Big businesses want big governments. Big businesses don’t want anarchistic markets that they can’t control or reliably predict and they don’t want anarchistic societies with populations that aren’t controlled where protesters can shut down factories and an unrestrained population can start revolutions.
People who advocate ownership rights in terms of capitalism too often ignore the non-capitalist ownership rights of indigenous people. Big business wants big government to deal with unruly indigenous people who think they have a right to the land their people have lived on for centuries. Big businesses are too often fine with colluding with the genocide or displacement of the indigenous. Sometimes they don’t even need big govt to do this since there are examples of big business hiring mercenaries or local goons to kill or scare away the indigenous.
Anarcho-capitalism might benefit small businesses, but it would never benefit big businesses. Big businesses have immense power. If big businesses didn’t like big govt, they could easily use their power to decrease the size of govt. But big business types such as the Bush family want the big govt. The Bush family is even personal friends with Saudi royal family which rules one of the most oppressive big governments in the world. There is no incentive for a big business owner to help create a truly free market where they have to fairly compete. If competition existed, then businesses would be forced to decrease in size and wealth would no longer be concentrated. These big business types like having their wealth and power. They would never willingly give it up just for some noble ideals of a free market.
– SECOND RESPONSE –
We seem to both agree that the extreme examples of corruption and oppression as seen with concentrated power isn’t human nature. However, I take it a step further in saying all modern civilization is contradictory to human nature.
Maybe I’m less critical of statism and progressivism simply because I’m equally critical of all modern systems of social, political and economic organization. My cynicism makes me have lower standards and more moderate expectations. I’m more accepting of the failings of our society because I just assume that one kind of failure or another is inevitable with civilization as we know it. Or maybe, as someone who feels like a failure at life, I feel it would be hypocritical to be too judgmental of the failure of others. I have a strong sense of sympathy for human imperfection.
Anyway, I had some thoughts that I wondered how you would respond to.
Not all costs and benefits can be monetized, but capitalism (whether free market or not) almost entirely by design excludes anything that can’t be monetized. This is less of a problem with small communities. Hunter-gatherer tribes, for instance, were more widely spread apart so the actions of one community were less likely to impact other tribes. Similarly, early small agricultural communities caused less large-scale problems. But in todays world of industrialization and globalism, impacts are non-local and the human mind isn’t evolved to understand or care about non-local impacts or the strangers elsewhere impacted. I don’t see how a free market can solve this problem inherent to the limits of human nature.
Some costs and benefits are collective such as fire prevention. A private for-profit company couldn’t solve this problem nor could you get everyone to voluntarily agree to a single solution. A collective solution has to be forced on all because the dangers and costs of fires, especially wildfires, impact everyone in a community. A fire can spread from house to house and from community to community. Fires don’t know property boundaries. If not for government, who would bear the costs and implement collective action to do control burns and watch over vast areas of wilderness to spot fires before they spread?
Also, what about long-term costs and benefits such as with local ecosystems? And what about the extremely non-local costs and benefits of the entire biosphere? Pollution doesn’t know property boundaries or national boundaries. We all collectively share the same water and air and we share even many of the same food sources such as seafood. The challenge with environmental costs and benefits is that they’re usually only seen after decades or centuries. A problem prevented may have no short term benefits, but if not prevented it may have massive long-term costs.
As an example, the President Carter helped create the EPA. The reason it was created was because there was little monetary incentive for companies to solve the problems of pollution and environmental destruction. Much of the costs were invisible to everyday experience. Even scientists didn’t know all the potential problems with pollution, but they knew enough that prevention was the wise course despite there being no immediate and apparent benefits. One of the pollutants decreased was lead and the benefits to this weren’t seen for decades. It was only until recent research that scientists could see that the decrease of lead helped to vastly decrease the violent crime rate. No one could’ve predicted this, but problems like this need to be prevented for the very reason we don’t understand them. It’s the precautionary principle.
This issue is complicated with the inherent conflict between transnational corporations and local communities. What monetarily benefits a company such as mining often doesn’t benefit the local community. And the costs of the companies actions may not be seen until years or decades after the company has moved it’s business elsewhere or maybe even has gone out of business. Who is responsible for those costs?
When indigenous people experiences diseases introduced by foreigners… when the water supply is polluted or the wildlife scared away causing the indigenous to be no longer able to sustain their traditional lifestyle… when industrialism leads to poor health because of pollution and malnutrition, who is responsible for the costs to individuals and communities? How does a free market monetize the costs and benefits that are collective and long-term?
I’m reminded of an example that Derrick Jensen used. He was describing this particular community that was established before there was a large federal government and when people mostly solved their own problems. The first settlers killed and scared off the Native Americans living there. The people who live there and own the land are the descendants of the people who stole the land originally. The same Native Americans still live in the area among the people who still possess their stolen land, the people who are descendants of those who killed their ancestors and destroyed their way of life. The creation of such an ownership class is inherently built upon violence and sustained through oppression. All of that violence and oppression happened before big govt.
This story has been repeated a million times around the world. Right now as I write there are indigenous people being exploited and oppressed often by big business or sometimes by small business owners that settled on the homeland of the indigenous. Early settles used the principle of property rights to steal land because they believed/rationalized that he who makes use of the land has the right to the land. This was based on the concept that land in it’s natural state is worthless. This bias continues to this day. We are only beginning to understand the value of health ecosystems to ensuring water and air is clean, things we normally take for granted without considering the costs and benefits.
All these problems I speak of have their origins at the beginning of civilization. The problems of pollution and environmental destruction, malnutrition and disease became apparent the moment people left behind the hunter-gatherer lifestyle and formed permanent villages which became city-states which became states which became empires which became our present industrialized globalism. Indigenous people have perfectly healthy teeth until they are civilized and start eating a grain and sugar based diet. Capitalism or statism then offers the solution of dentistry, but capitalism and statism are part of the social condition that caused the problem in the first place. That relates to wildfires as well. We have to control nature in order to build stable societies and economies, but that control leads wildfires to become larger than they would ever have become naturally. So, once again, businesses or governments have to create solutions for the problem created by the entire system. All of civilization is the solving of problems that civilization created and every solution creates further problems.
So, the fundamental problem is civilization itself. The human species and human communities, ecosystems and the biosphere didn’t evolve under the conditions of civilization. Civilization has only existed for a few thousand years. Civilization has developed faster than evolution can happen. This has led to the extinction of massive numbers of species and the destruction of massive numbers of cultures.
The further problem is that civilization has created massive concentrated populations which are in themselves unnatural and which preclude natural solutions. We humans are a clever species, but it’s our cleverness that gets us into trouble. We like to think of ourselves as rational creatures, but fundamentally we are driven by the same non-rational impulses as any animal. The difference is that no other species has ever had the power to destroy nearly all life on the planet.
I don’t see how free markets or any other human idea can solve all these problems without just causing more problems… as history has proven. As has been said before, when you find yourself in a hole, the first thing you should do is stop digging. But how do we stop? Civilization is built on continual progress or else the whole house of cards might fall down. We collectively as a species have to keep running just to stay in place. Solution? We don’t even understand the problem. We are the problem or are at least inseparable from the problem. Any solution will have to be a complete transformation of how humans operate on a collective level, but such a solution could never be predicted just as we have never been able to predict any of the problems we’ve created. So, all we can do is cross our fingers and hope for the best.
I feel frustrated when someone offers up something like the free market. The striving for freedom won’t save us. The problem is that we aren’t free. We are embedded and enmeshed in, intertwined with and integral to the entire world. We aren’t free of anything. The very idea of freedom is one of those many abstractions that keeps us trapped in the Iron Cage of rationality, the bureaucratization of humanity… costs and benefits, ideologies and systems, improvement and progress. It’s not that any given idea is wrong. Free markets, for example, sound wonderful. What frustrates me is the mindset that constantly creates more ideas to be forced on humanity, on reality, on all the world around us. We think that if we just find the right idea or principle, the right method or framework then the the problems will be solved… but the fundamental problems of civilization are never solved… or at least not so far.
Maybe you don’t share my frustration. Maybe you have more hope in solutions despite the all the failings of history. I realize most people don’t see the world as I do. I just don’t see anything changing until something forces humans to change. I’m not filled with hope.
I wish more people understood this very basic view of nature and the biosphere that supports all life and all civilization.
Species are going extinct and ecosystems are being destroyed at fast rates. I’ve looked at the data before and it’s impossible to really comprehend. There is nothing more important than the biosphere and yet there is nothing that humans treat so badly. People tend to only look at nature in terms of the worth that can be gained by destroying it, but few consider the worth of not destroying nature.
If we don’t collectively start acting according to the precautionary principle, we will inevitably destroy ourselves and possibly most of the biosphere as well. This isn’t an exaggeration. It’s hard to comprehend and most people would rather ignore the problem in hopes it will go away, but sadly reality doesn’t conform to our wishes.
There are still large numbers of people denying man-made global warming despite all the scientific research and despite the consensus of scientists and scientific organizations around the world. When ever I see someone denying the most basic facts of science, I just want to punch them in the face. I don’t get it. Will the average person only wake up when we’re on the brink of extinction? We really need to improve science education in this country and around the world. The only problem bigger than mass destruction of nature is the mass ignorance of the average person.
The following is a good analysis of the failure of ‘free market’ advocates to truly understand the problems of how external costs get placed upon third parties (in terms of our present corporatist/fascist/inverted-totalitarian system, this means pviatized profits and socialized costs).
Posted on September 6, 2010 by Benjamin David Steele
I wanted to post the following comment because it clarifies a basic confusion that most political debate suffers from. It’s a simple and yet very important distinction.
“It is a part of right-wing dogma that anyone who supports a welfare state and government intervention in the economy is a socialist. Unfortunately for the right-wingers such a statement shows thier lack of understanding of what socialism actually means. Socialism vs. Capitalism is about who in a society controls the means of production. Free Enerprise vs. Planning is about how goods and services are distributed. Socialism does not necessarily mean Planning and Capitalism does not necessarily mean Free Enterprise. Capitalism Market Socialism (co-op based market economy) and State Capitalism (what fascists generally trend towards, and also what the USSR and it’s satellite states were de facto) are both very much possible. Partly this misconception is because the welfare states of Europe have come to be called “socialist” even though they are just highly regulated capitalist economies; no, Sweden is not socialist.”
Posted on August 30, 2010 by Benjamin David Steele
I never thought about Henry David Thoreau in terms of libertarianism, but obviously some of his views pointed in the direction of libertarianism or even some form of anarchism.
I noticed a glaring ommission in the portrayal. Thoreau was a liberal libertarian who argued for egalitarianism and later inspired civil rights leaders such as Ghandi and Martin Luther King jr. Also, I’ve never seen any example of Thoreau defending property rights as do conservative libertarians. When he moved to Walden, he lived on someone elses property (Emerson’s property as I remember which Emerson had inherited from his wife). He did his own work as he was very industrious and knowledgeable, but he was perfectly fine with receiving gifts of goods he needed and borrowing tools.
“Near the end of March, 1845, I borrowed an axe and went down to the woods by Walden Pond, nearest to where I intended to build my house, and began to cut down some tall, arrowy white pines, still in their youth, for timber. It is difficult to begin without borrowing, but perhaps it is the most generous course thus to permit your fellow-men to have an interest in your enterprise. The owner of the axe, as he released his hold on it, said that it was the apple of his eye; but I returned it sharper than I received it.”
Thoreau had some anti-statist tendencies for sure, but this wasn’t based on his feeling territorial about the home he built or protective of his private property. He apparently wasn’t even bothered by minor acts of theft.
“I was never molested by any person but those who represented the State. I had no lock nor bolt but for the desk which held my papers, not even a nail to put over my latch or windows. I never fastened my door night or day, though I was to be absent several days; not even when the next fall I spent a fortnight in the woods of Maine. And yet my house was more respected than if it had been surrounded by a file of soldiers. The tired rambler could rest and warm himself by my fire, the literary amuse himself with the few books on my table, or the curious, by opening my closet door, see what was left of my dinner, and what prospect I had of a supper. Yet, though many people of every class came this way to the pond, I suffered no serious inconvenience from these sources, and I never missed anything but one small book, a volume of Homer, which perhaps was improperly gilded, and this I trust a soldier of our camp has found by this time.”
Watching this video helped me to articulate the difference between the two wings of libertarianism. A conservative libertarian tends to argue for rights in terms of capitalist terminology (e.g., property rights and contractual rights). And a liberal libertarian tends to define capitalism in terms of civil rights. This shows a difference of priority. Conservative libertarians are more accepting of hierarchical power and liberal libertarians prefer egalitarianism (liberalism being the common thread between libertarianism and anarchism).
“I am convinced, that if all men were to live as simply as I then did, thieving and robbery would be unknown. These take place only in communities where some have got more than is sufficient while others have not enough.”
Posted on August 29, 2010 by Benjamin David Steele
Here is a very good analysis and criticism of anarcho-capitalism. I’ve made pretty much the exact same arguments, but this video offers precise real world examples to back up these arguments.
Info from below the video on YouTube:
I read this article in the original magazine but I see that you have to pay online. Fucking capitalist!!! Sorry.
http://www.jstor.org/stable/4017690
The opening comment asked about the issue of what if corporations want a state government. The whole argument of anarcho-capitalism rests on the belief that state governments corrupt capitalism and that corporations as we know them wouldn’t exist without state governments.
I think this is a moot point in that corporations and state governments develop together. Both are simply related forms of centralized power and hierarchical organization. The only type of capitalism that is even close to anarchism is bartering which is only found (as an economic system) in pre-industrial tribal societies. However, what made those pre-industrial tribal societies work was two factors:
1) They didn’t have to compete with industrialized nation states.
2) They were traditional communities probably with traditional theocratic political systems.
These societies wouldn’t fit the utopian vision of a modern anarcho-capitalist who wants to implement the Enlightenment ideals of classical liberalism. These tribal societies are egalitarian to some extent for the simple fact they were small close-knit communities and so they could operate according to direct democracy or community councils.
My point is that we moderns wouldn’t recognize these societies as being capitalist in any aspect. And, for damn sure, a modern corporation or anarcho-capitalist DRO couldn’t be run according to the traditional theocracy of a pre-industrial tribal society. Modern capitalism goes hand in hand with modern statism. It’s just a fact. I realize that an-caps would prefer it not to be so, but it doesn’t change the facts.
In the forum thread, the first response was of course a Stefan Molyneux devotee telling the person to read Molyneux’s holy books and all would be revealed. The person who started the thread said the following:
I’ve listened to it in audiobook when I first started getting into stateless capitalism. i should check it out again. But i don’t remember him covering the subject of business actually WANTING a governement.
I’m not talking about DRO’s becoming governments. That is highly improbable for many reasons that have been explained countless times.
I remember stef saying that once violence is out of the equations, life will work “however the hell people want them to work”.
Now if big business “wants it to work” with a government that they set up. What’s preventing them? DROs?
I really don’t see why it’s improbable that a DRO might become a government other than the fact that a society based on DROs is itself highly improbable (that is assuming the DROs lived up to anarcho-capitalist ideals of non-aggression). But, ignoring that, this commenter brings up the same point again which no one in the thread has yet answered. What if states don’t force themselves on corporations and instead corporations choose to create states?
This is sort of like the conundrum of a democratic country like Germany leading to an un-democratic leader like Hitler. What if people freely want to give up their freedom? Similarly, what if corporations freely want to givt up some of their freedom for the stability and security of a state? What if a free market doesn’t actually benefit big businesses? Why would big businesses support anarcho-capitalism if it decreased their profit? Also, in landlord anarcho-capitalism, what if the landless peasants decided to end their contracts and take the land for themselves or create a new government? Most governments that exist were once created or supported by the masses. If the masses rose up, how would the anarcho-capitalist feudal landlord non-aggressively maintain his power and property?
One other commenter countered such criticisms with the following:
the examples and theory have to do with societies that have simply rejected the previous form of government, not by accepting anarchy for the NAP. This is why the business leaders that remain are still reaching for the gun.
Morality is the reason for Anarcho-Capitalism, not utility. As Stef and the Mises and Libertarians try to point out; the moral solution is also the most efficient solution as well.
Violence is not a reason for having a government, it is the reason to not have one.
His first point is that it doesn’t count because the corporations didn’t accept anarchy despite no government keeping them from accepting anarchy. Isn’t that the point of the criticism? Why would a wealthy and powerful corporation ever choose anarchy? He tried to avoid the criticism by somehow arguing real world examples don’t count.
His second point that the moral values are noble even if they contradict reality. That is the same kind of argument a Christians make. Religious fundamentalists argue that teaching abstinence is worthy even though it fails in the preventing of teen sex, teen pregnancy, and teen STDS. Religious fundamentalists argue that making abortions illegal is the morally correct action even though countries with illegalized abortions have higher rates of abortions. The sentiment is that if somehow we could change all of society and culture to fit some specific set of beliefs then the world would be a better place. Sure. Every true believer says that. Every utopian dreamer thinks his vision is worthy. So what? Reality is still reality.
Basically, people like this would prefer to live in a dream without violence than a reality with violence. It sounds nice. The only problem is that dreams don’t feed your belly. Nor do dreams protect your family from threats.
Posted on August 27, 2010 by Benjamin David Steele
In this video, there was one particular point about Germany that stood out. Germany is 1/5 the size of the US and yet has the second highest trade surplus in the world (after China). They’ve accomplished this while having higher rate of unionization and higher pay. Interestingly, the US economy was also doing better when unionization and pay was higher in the US.
Unions in the US are considered socialists even though they represent the working class. In Germany, it’s required for worker representation to be half of board members of companies. In Germany, the industrial and financial sectors are highly regulated keeping jobs from being outsourced and ensuring main street benefits rather than just wall street. According to conservative ideology, this kind of socialist practices and union power should destroy the economy and destroy innovation and yet the complete opposite is the result.
This seems to support Noam Chomsky’s arguments. Chomsky thinks the world would be a better place if workers had more power to influence the companies they work for and influence the economy they are a part of. As a socialist liberal, Chomsky genuinely believes it’s good to empower the average person. It would appear Germany has done exactly this and has become immensely successful by doing so.
Most Americans, I suspect, believe we’re losing manufacturing because we can’t compete against cheap Chinese labor. But Germany has remained a manufacturing giant notwithstanding the rise of East Asia, making high-end products with a workforce that is more unionized and better paid than ours. German exports came to $1.1 trillion in 2009 — roughly $125 billion more than we exported, though there are just 82 million Germans to our 310 million Americans. Germany’s yearly trade balance went from a deficit of $6 billion in 1998 to a surplus of $267 billion in 2008 — the same year the United States ran a trade deficit of $569 billion. Over those same 10 years, Germany’s annual growth rate per capita exceeded ours.
Germany has increased its edge in world-class manufacturing even as we have squandered ours because its model of capitalism is superior to our own. For one thing, its financial sector serves the larger economy, not just itself. The typical German company has a long-term relationship with a single bank — and for the smaller manufacturers that are the backbone of the German economy, those relationships are likely with one of Germany’s 431 savings banks, each of them a local institution with a municipally appointed board, that shun capital markets and invest their depositors’ savings in upgrading local enterprises. By American banking standards, the savings banks are incredibly dull. But they didn’t lose money in the financial panic of 2008 and have financed an industrial sector that makes ours look anemic by comparison.
The above video reminds me of another video I watched a few weeks back.
The author in this second interview is comparing the US to Europe, but he specifically talks about Germany. He also mentions the importance of unionization in Germany and he puts it in the context of their quality education system. German students are taught to understand politics and the role of unions. Also, students are taught real trade skills and taught the importance of unions in protecting trades.
As Hartmann points out, the middle class in the US has been become an endangered species. The author agrees in saying that US society only helps the plutocratic rich and even disadvantages the average rich person. There actually is more entrepreneurship in ‘socialist’ Europe than in the ‘capitalist’ US. One thing that helps small businesses in some European countries is single payer which lowers business costs. Of course, ‘socialist’ Obama simply ignored single payer during the health care debate. What right-wingers in the US don’t understand is that ‘socialism’ helps both the workers and small business owners… whereas ‘capitalism’ (as practiced in the US) helps only big businesses while hurting both workers and small business owners.
Here is another interview with the author in the second video:
Why is it useful to compare ourselves to the Germans?
Germany has the highest degree of worker control on the planet since the collapse of the Soviet Union. When I saw German labor minister Günther Horzetzky in April of 2009, he said “Our biggest export now is co-determination.” He meant that other European countries were coming up with versions of it.
How did Germany become such a great place to work in the first place?
The Allies did it. This whole European model came, to some extent, from the New Deal. Our real history and tradition is what we created in Europe. Occupying Germany after WWII, the 1945 European constitutions, the UN Charter of Human Rights all came from Eleanor Roosevelt and the New Dealers. All of it got worked into the constitutions of Europe and helped shape their social democracies. It came from us. The papal encyclicals on labor, it came from the Americans.
[ . . . ]
Thomas Friedman’s “flat world” theory predicts that in the future, all countries will be competing on an equal playing field — paving the way for highly-populated countries to dominate the world economy. Do you agree with him?
How does he explain the existence of Germany? What country has the highest exports in the world today? It’s the country with the highest wage rates and union restrictions. Germany has become more of a power, not less of a power as the world has become more global. Our problem isn’t competing with China, it’s competing with Germany in China. We’re so focused on China all the time, and low-wage assembly stuff, that we’re missing what’s going on. It’s Germany that’s going in and selling stuff in China that we ought to be selling that would hold down the trade gap between the U.S. and China. It’s not China’s fault; it’s Germany’s. But no one wants to talk about that. Because that would raise questions about the whole U.S. model: Why is this high-wage country beating us? Why are the European socialists beating us? It’s too subversive an idea so we don’t allow in the discourse.
I decided to add one other comparison. I had recently perused some of the book The Spirit Level by Wilkinson and Pickett, and I had mentioned it in a post last month (Mean Bosses & Inequality). After posting all the above, I thought I should look at the data on wealth disparity and social problems in order to see if Germany does better than the US.
There apparently were problems with social disruption after reunification which led to some social problems, but the restructuring that followed decreased over time the income inequality and social problems (similar to what post-war restructuring did to improve Japanese society). Presently, Germany has less than half of the income inequality seen in the US (Germany having income equality that is about average for Europe and the US having high income inequality similar to countries such as Singapore and Israel). The US has a much higher average income than Germany, but because most of US wealth belongs to the upper class whereas most of the German wealth belongs to the middle class. Also, Germany has high social mobility and the US has low social mobility (most wealth coming from privilege and inheritance)… which is interesting to put in context of Americans working on average more hours and have less vacation time than Germans.
What this means in terms of social problems is that Germany has lower rates and the US higher rates of the following: mental illness, imprisoned per capita, drug use, homicides, infant mortality, obesity, teen pregnancy, and children’s experience of conflict (“reported fighting, bullying and finding peers not kind and helpful”, p. 139). And Germany has higher rates and the US has lower rates of the following: UNICEF index of child wellbeing, longer life expectancy, happiness, and recycling.
In The Spirit Level, the authors point out one particular impact this has on children. They write (pp 116-7), “when we first looked at data on children’s aspirations from a UNICEF report on childhood well-being, we were surprised at its relationship to income inequality.” They continue:
More children reported low aspirations in more equal countries; in unequal countries children were more likely to have high aspirations. Some of this may be acounted for by the fact that in more equal societies, less-skilled work may be less stigmatized, in comparison to more unequal societies where career choices are dominated by rather star-struck ideas of financial success and images of glamour and celebrity.
In more unequal countries, we found a larger gap betwen aspirations and actual opportunities and expectations. If we compare… maths and reading scores in different countries… it is clear that aspirations are higher in countries where educational achievement is lower. More children might be aspiring to higher-status jobs, but fewer of them will be qualified to get them. If inequality leads to unrealistic hopes it must also lead to disappointment.
Gillian Evans quotes a teacher ta an inner-city primary school, who summed up the corrosive effect of inequality on children:
These kids don’t know theyr’e working class; they won’t know that until they leave school and realize that the dreams they’ve nurtured through childhood can’t come true.
I brought this up because it’s another comparison of US and Germany. Going by the data (UNICEF – Child poverty in perspective), German children are about twice as likely to aspire to low skilled work. Most people probably think lack of aspiration for greater opportunities means lack of opportunities or lack of seeking out opportunities, but the data shows a very different picture.
In the US, children have a lot of aspiration and yet have less opportunity to fulfill that aspiration (because of income inequality and low rate of social mobility).
In Germany, children have less aspiration and yet are more likely to achieve further beyond the socio-economic status they were born into.
This goes against commonsense. Americans like to believe we live in a meritocracy, like to believe that if you dream big enough anything is possible. However, this has a dark side in that idolizing the wealthy leads American society to demonize the poor. To be working class in America and never striving to better yourself means that you aren’t living up to your potential and therefore are in some sense a failure. To be working class in Germany, on the other hand, is considered worthy. The American ruling elite told average Americans that working class jobs were undesirable and so sent most of our manufacturing jobs overseas, but Germany maintained it’s manufacturing jobs and through unionization made sure those jobs had good benefits.
Sadly, the American Dream will forever remain a dream for most Americans… and yet few Americans seem to understand why the American Dream has been dying.
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Since posting all the above, I noticed an article about the relationship between economic growth and income distribution, specifically why inequality undermines sustainable growth:
Posted on August 17, 2010 by Benjamin David Steele
How can rightwingers (whether libertarians, objectivists, or social conservatives) defend local small businesses like mom & pop stores while simultaneously defending transnational big businesses like Wal-Mart?
It’s interesting that Medaille describes the internal functioning of a monopolistic corporation as being like a socialist state in that they decrease competition & having very controlled planning. Many rightwingers love both big businesses and the military which combined as the military-industrial complex form the largest manifestation of socialism in the US and possibly in the world.
In this interview, Medaille pointed out that a corporate charter originally prohibited political involvement. He also pointed out (as did Thom Hartmann in another video) that the original Boston Tea Party was a protest against a corporation and against a government that was giving tax cuts to the rich. Medaille said something I had never heard before: ”Jefferson and Madison both wanted an amendment as part of the bill of rights which prohibited the formation of corporations.” Why don’t we hear conservatives and constitutionalists mention this part of history? And why do most of the people supporting today’s Tea Party movement seem ignorant of the history of the Boston Tea Party? I don’t know if Tea Party supporters are more ignorant than the average American, but you’d think they’d at least be informed about the history of the Boston Tea Party which supposedly is the inspiration of their movement.
All of this reminds me of another issue of concern in the founding and development of American society. The founding fathers idealized a professional political class which would act as a disinterested aristocracy. They hoped that this political class would be disinterested in that they’d be independently wealthy enough so as to not be directly involved in business affairs. They thought it was dangerous for powerful people to be simultaneously involved in both politics and capitalism. They wanted a political class that didn’t favor any group but instead was able to dispassionately make decisions for the good of all.
I was listening to an interview on the radio last night. It was about a legal battle that happened a couple centuries ago in the US. A man joined the Shakers and took his children with him, but his wife didn’t want to join the Shakers. She sought to get a divorce and get her children back. At the time, it was hard for a woman get a divorce. She did finally succeed and it set an important precedent.
The history of this incident was interesting, but I was more just fascinated by the Shakers themselves. I’m already somewhat familiar with them. My great grandfather was raised in a Shaker orphanage and some years ago I visited a Shaker village. Of course, there were all kinds of religious communities in early American history, but there are several things that make the Shakers stand out in my mind.
They believed in abstinence and in not bringing more children into the world, but they did have orphanages where they took in other people’s children and where the children of new members were raised. They believed living a simple life. They farmed together and lived together, men on one side of the hall and women on the other side. They believed in equality which was impressive for the time. Women were considered equal to men and blacks were considered equal to whites. At the time of the legal incident, the Shakers had as their leader a woman. She was the most powerful woman in the US. Most women had no rights at all, but she was the head of a national organization which was quite powerful and wealthy. The Shakers were more than a century ahead of the rest of the country when it came to civil rights.
Here is the interesting part. They lived a communal life and so were socialists. Christians from the beginning have always been attracted to socialism, from early Christian communities (which valued equality like the Shakers did) to Catholic monasteries. However, in America, we always like to think of socialism as being alien to our culture. But Shakers were as American as any other group. Many like to say that socialism can’t work and it’s true the Shakers have mostly died out by now, but that is mostly because they didn’t have children which creates a minor problem in sustaining the Shaker lifestyle. In their heyday, they were wealthy and this partly came about because new members gave all their money and property to the Shakers. Still, the Shakers didn’t merely live off of the wealth of new members.
They were a very successful community. They were leaders in the field of agriculture. They were technologically innovative and they produced some of the best seeds in the entire US which other farmers would buy from them. Even though they were socialists among themselves, they were capitalists within larger society. They didn’t merely isolate themselves.
I just thought this was interesting. The example of the Shakers goes against the assumptions of conservatives, libertarians and objectivists. Socialism and capitalism are seen as opposed, but China has proven that this is not the case even on the level of global markets. Socialism and capitalism not only weren’t opposed but seemed to operate in balance within the Shaker community. How could socialists living in a commune be among the greatest technological innovators of their time? It goes against everything most Americans believe… and yet such a community did exist.
Also, they didn’t just produce innovative technology and high quality seeds. They also produced very skilled people. As I said, my great grandfather was raised by Shakers. He learned how to care for plants. When he left the Shakers, he got a job as the head groundskeeper on the estate of a very wealthy family. A child raised by the Shakers was better educated and better prepared to be successful than most Americans were in the past. My great grandfather came from a poor family which is why he was given to the Shakers to be raised. Many poor children today in the US would be lucky if Shaker orphanages were still around.
In conclusion, I’d just like to say that Glenn Beck can put that in his pipe and smoke it.
