Capitalism is not in the US constitution


A little over a year ago, I was invited to lunch at a friend’s place and among the other guests were an Indian-American academic economist and his wife and mother. The discussion turned to politics (specifically the issue of net neutrality that was in the news at that time) and I found myself in disagreement with that family. At one point in the discussion, the economist said that his position was based on sound capitalist principles and he seemed to think that this clinched the argument. I replied that I was a socialist and that hence I did not have to accept the premises of his argument.

My statement went over big with his family and his mother said that I was in the wrong country, that the US was a capitalist country and if I could not accept it I should leave.

But of course, she is wrong. There is nothing in the US constitution that requires the US to be run on capitalist principles. And even if it did, there is nothing that says that you cannot seek to change it the way that the constitution can and has been be amended, though that of course would be hard to do.

Thom Hartmann had to provide a similar lesson to his readers when they took him to task for saying that business owners needed to pay their workers a living wage or do something else. They said that he was violating the basic principle that capitalism was intrinsic to the US system of government.

Hartmann responded:

“Sorry … the United States is not a capitalist country. We are a constitutionally limited, representative democratic republic. And you could argue that ever since the Supreme Court has decided that they really run the show, we are a constitutional monarchy, but we are not a capitalistic country. Capitalism is one of a whole bunch of different forms of economics that exist in the United States,” Hartmann reported.

Also, capitalism and constitutionalism don’t quite go together.

“The word ‘capitalism’ appears nowhere in our founding documents, nowhere in our Constitution,” Hartmann added.

What about the commenters’ assertion that running a business is a right? Perhaps only if the business operates on the barter system alone.

“I’ll wash your car, you mow my lawn,” Hartmann said. “But what happens if, as I wash your car, I break a window? Who do you appeal to? The court? Suddenly it’s not a free system anymore. In order for an economy to work beyond just wash car/mow lawn—and even with that—you have to have stable currencies, a stable banking system, a predictable and fair court system, actual rules … transportation … infrastructure … a criminal justice system to enforce the rules … all of which is paid for by We the People,” Hartmann explained.

One of the great benefits of the Bernie Sanders run for the presidency and the huge support he has garnered is that it has put to rest this idea that the US is inherently capitalist. It is true that one can question whether the democratic socialism that Sanders espouses is truly socialism or is merely a softer version of capitalism, but that is irrelevant. His unapologetic adoption of the socialist label has put it into the mainstream.

Hartmann produced a video elaborating on his argument in response to the criticisms he received as a service to those who, like me, hear this kind of argument made by people who should know better.

Comments

  1. lanir says

    Apologies if this seems not entirely on-topic. I tend to see this as part of a whole that’s become rather shaky lately in a really scary way.

    The history lessons about our form of government I received left me with the impression that the citizenry were intended to be able to change the government. Sure it’s difficult but it’s supposed to be possible. But before I was born the people in power had decided the citizenry no longer needed or deserved that right and began quietly working to destroy it. So now we have a country where Martin Luther King, Jr. was assassinated, white collar criminals run the financial industry and feel free to blow it up at regular intervals for their own profit, police sometimes use murder as a threat assessment technique in a literal shoot first and ask questions later way, and various acronym agencies in the government regularly abuse their power while asking themselves whether the public has any reasonable right to privacy at all as though the country has never debated the relative merits of freedom versus security before.

    None of these things, to my knowledge, have resulted in any meaningful legal action. All of them erode the ability to change. All of them, in the end, support pure capitalism and the idea that money is the only thing that matters. When people don’t understand these ideas they not only don’t notice that their rights are being taken away from them; they also become the howling mob empowering cynical, self-interested parties in taking away the rights of others.

  2. Menyambal says

    Excellent points, Mano. Thanks for an interesting post.

    Capitalism only really works for people who have capital to invest. The rest of us have gradually moved over to having debt, not capital. We are borrowing money from those who have it to invest, or at least have security enough to manage their debt in a way us getting-poorer people can’t. (The bible forbids lending at usury, and also condemns the love of money.)

    Along those lines, we’ve also drifted from a nation of independent farmers to being wage slaves to corporations. We talk of jobs as rights instead of as abominations, and ignore the fact that corporations are images of the beast. Conservatives talk like small businesses are the norm, anytime they can, but corporations are the norm, and are treated as living things, even though they have no heart, soul or conscience. They also have strong incentive to employ as few people as possible.

    Workers unions are criticized, but for the wrong reasons. This nation was founded as a people’s union – workers shouldn’t need unions, we are all in one. Wages, if we must work, should be set by the people.

    (Gun ownership is nowhere in the Constitution, either, and we can see how much that matters.)

  3. says

    sound capitalist principles

    LOL

    Like this: “We accept Marx theory of value as an underlying concept, and extend it by concluding that exploitation is the core of capitalism, but we’re OK with that.”
    I’m not saying that Marx is right about everything, but he’s right about some things and those are important; namely that in its most common form capitalism doesn’t depend on different rewards for different activities, it depends on rewards for who’s your daddy (inherited wealth) and getting rewarded for being wealthy, by being made more wealthy. Marx’ arguments aren’t unobvious, either, though he tries hard to obscure them. 😉
    And capitalists haven’t exactly refuted Marx, but they’ve tried. Consider the Austrian school’s argument about “opportunity costs” as an attempt to justify capitalists’ collecting disproportionate rent on their money. There are a lot of apologists for capitalism, but saying they are “sound” and “principled” is probably going too far.

  4. Reginald Selkirk says

    We rejected pure capitalism long ago. Pure capitalism means 5-year-olds working in coal mines. We decided we wouldn’t put up with that. We have all kinds of restrictions on how employers can treat employees.
    We don’t have pure socialism either. For the most part, the government does not control the means of production, it just regulates it. We have a “mixed economy.”

  5. says

    lanir@#1:
    To be fair, the US was constructed that way. It’s gotten worse but…

    Consider the founding fathers as a bunch of would-be oligarchs, land speculators, slave owners, rum smugglers, and tobacco smugglers, who started a rebellion because the crown was trying to tax their efforts. When the rebellion succeeded, they were such a self-aware bunch of crooks that they realized they’d be unhappy with any arrangement where one of the others had power, so they cooked up a mutually-distrusting power-sharing setup, then proceeded to disenfranchise everyone else who wasn’t male, white, and rich. In other words, the nascent USA was Trump-land. One of the first things the new government did was: put down a tax rebellion using overwhelming force to murder a bunch of citizens for doing what they just did themselves. Consider the debate between Madison and Jefferson not as a jousting match between great intellects but as a question about whether money controlled government, or the other way around. In either case, the old Soviet proverb applies: “Under our system of government, man exploits man. Under capitalism, it’s the exact opposite.”
    From the very beginning the US set itself up to be an imperial power – and was – lacking only the title and the means. As soon as the means came along, you had the US laying claim to all of North America and most of South. California, Texas, Louisiana, Alaska … Made an attempt at Canada…
    To top that off, the US’ economy was built on stolen technology and slavery, until we learned how to build our own technology, and wage-slavery and racial divisions replaced neck-chains and beatings. We use our massive military not as the Romans did, to smash and grab countries’ treasuries – but to aggressively export a weird version of “free market capitalism” which means, basically, we blow your shit up and you accept US corporate interests coming in, privatizing your government services, putting Starbucks all over the place, and embedding your population indirectly into the US Imperial Economy.

    President Trump will just be the final leveraged buyout.

  6. says

    Reginald Selkirk@#4:
    We decided we wouldn’t put up with that.

    To be fair: the miners decided we wouldn’t put up with that. Lots of miners had their heads crunched by goons working for capitalists. It nearly came to outright rebellion a number of times, and then the capitalists “saw reason” and oh, so graciously, granted a few things. Until they could export some parts of labor to Pakistan, where the kids make shoes for multimillionaires. They didn’t change their ways, they took advantage of the fluidity of capital to export some of the nastier bits. Take a look at Sebastiao Salgado’s photography if you need reminding.

    It takes a lot of mice, willing to defend the barricades, to bell the cat.

  7. says

    Re: Corporations as people. I once asked Exxon Mobil to marry me. I never got an answer. 🙁
    It was part of a project I never got around to – I wanted to do a blog called “unanswered letters” in which I wrote letters that I didn’t expect answers to.

    I understand why Exxon didn’t marry me. It’s probably because I didn’t buy gas from h* ever since the Valdez wreck. Or maybe h* thought I was just another “gold digger.” (sigh)

  8. Menyambal says

    As I understand it, the great state of Virginia twice went to war to be able to keep on keeping people as slaves. Part of the incentive for the revolt from England was that England was going to ban slavery. The American Civil War at least led to putting that reason into writing, in the secessionist documents.

    So yeah, the worst parts of capitalism were involved in the founding of this country. But there was some good stuff, too. And capitalism is not in the Constitution.

  9. laurentweppe says

    Like this: “We accept Marx theory of value as an underlying concept, and extend it by concluding that exploitation is the core of capitalism, but we’re OK with that.”

    No one is more Marxist than Capitalism’s zealots: the most instructive part of the video didn’t came from Thom Hartmann but from the second troll: Give everyone a living wage and prices will rise:

    Hartmann reacts by doing a quick supply-and-demand 101: but that’s not why his troll and so many other right-wingers are utterly convinced that prices will rise: the certainty that raising wages will cause the price to rise comes from the fact that many expect business owners to act like shitty landlords: wages increase, therefore the profit margins decrease, therefore the businesses owners increase the tributes rents prices to offset their own loss of income.

    This trolling is an involuntary confession: far from believing that business-owners are benevolent job-creators, the troll express a belief that the business class will seek to preserve its rent even when it goes against the most basic tenets of capitalism so deeply seated that he treats it as something as a basic fact of life (Jump from a bridge, you’ll crash bellow; increase the wages, the business lords will retaliate). Except instead of seething with rage, he basically advocates craven submission to the business owners he himself sees as parasites.

  10. says

    Laurentweppe@9:
    Yeah and the capitalists claiming that government printing more money is going to cause hyperinflation…. Uh… That never materialized.

    The rich are terrified of inflation, of course: it’s a means of re-levelling the playing field that damages proportionally to your wealth. If my accounts lose half their value I’m out a bunch of money but a billionaire goes “aughhhhhh I just lost $500 million!!!”

    The other reason inflation terrifies the rich is because it doesn’t care where your money is hidden. It’s kryptonite for the rich!

  11. says

    Addendum: another argument on the job creation front is:
    Then why does so much capitalism revolve around mergers and acquisitions that compact out “redundant” jobs?

    Arguing about economics is really interesting. I’m pretty sure most of the people talking about economics are pushing one dishonest agenda or another. Or they are ignorant. Or both.

  12. says

    Give everyone a living wage and prices will rise:

    If the rich didn’t stockpile their money, prices would be pushed down.

    Your move, capitalists!

  13. doublereed says

    I’m generally with @4 Reginald. You don’t even need to talk about socialism imo. Hell, Keynesian Economics is straight-up capitalism, but because it involves the government spending money people call it socialism.

    I think market-based economies are great for the things that they’re great for. And if there are problems then they should be regulated with sensible regulations that help society. And other things can solved with actual government control of resources and social safety nets and such.

    I sometimes think these vague ideologies of capitalism and socialism are bad ways to frame the conversation. Let’s just do what works best for the specific issue.

  14. doublereed says

    I mean when we get markets that properly compete for the benefits of consumers, employing a happy workforce, that’s awesome. So how should we regulate the markets so that capitalism works properly*. Because there are market failures for all sorts of things.

    *(Properly, of course, meaning that it works to the benefit of the people and society.)

    And when you frame it that way, we all know that liberal policies win.

  15. smrnda says

    I’ve been telling people recently (mostly when people argue that a business should have a right to discriminate based on religious beliefs or otherwise break the law, and that people who operate such business are having their ‘rights’ revoked) is that nowhere in the constitution or bill of rights is there any right to start or operate a business.

    On rising wages and higher prices (or unemployment) – assuming that is inevitable ignores so much, particularly that poor people (the ones who would be getting the wage increase) have a higher propensity to spend their money in their local economies. A reason for recent economic stagnation is weak consumer spending – too much wealth is concentrated at the top that the best money making strategy is concentrating ownership. Of course, as more workers are squeezed the problem only gets worse. If Wal-Mart pays its workers more money, they’ll probably get a decent chunk of it spent right in their own stores.

    The other mistake is that, from the narrow perspective of a business owner totally ignorant of macroeconomics, increasing wages only looks like cutting into profits. For a business owner, raising wages is a bad idea unless someone else does it first – ideally, the tight-fisted business owner wants to pay (proportionally) lower wages than others, so that the customers (who work for someone else) can spend more money at their low-paying business venture. Its similar to the free rider problem, and is one defense of raising minimum wages.

    Something necessary to keep in mind is just that the level of power between the capitalists and workers has become increasingly stacked in favor of capitalists, globalization and capital flight makes relocating businesses cheaper, and in the USA Citizens United put the government up for sale. The other problem is that we’re functioning in a system where, though technology makes labor increasingly less in demand, it’s still assumed that everybody should have to hold down a 40 hour a week job to make ends meet. The gains for technological progress are only really enjoyed by rich people, educated professionals whose jobs aren’t threatened by technology (or whose jobs are driving it) with everybody else experiencing increasing precarity. People who believe that capitalism will work without government intervention either believe that magic will happen and displaced workers will be employed (somehow) and retrained (by whom?) or else they just view them as disposable and not a problem.

    I keep in mind that people with similar educations as myself (I’ve worked as a data scientist) have helped the local store decide that it can save labor costs by giving workers fewer, less regular working hours where they are called in based on demand. Great for a small number, bad for more.

    So with all that, I think we just need a mincome and need to acknowledge that we can’t fault people who aren’t working if there really isn’t enough work to go around.

  16. says

    Smrnda makes a crucial point: the lower income wage-earner is going to put their money right back into circulation. Why hasn’t the government’s qualitative easing efforts, etc, done much for the economy? Because the new paper wealth was quickly captured by the banks, who sit on it. Between the super rich who are sitting on a significant part of the nation’s wealth and the banks, there is not enough money circulating at the bottom to make much difference.

    Under capitalism a rational rich person would see economic hard times at the opportunity to put lots of people to work, cheaply, building mansions and sportscars and stadiums — instead they also hunker down. So much for rationality; it’s well past time for people to stop the charade that capitalism is a rational economy.

    Every time I try to understand economics I am stunned at how little economists appear to understand. It doesn’t help that the landscape is littered with randian lackeys for the rich and neoliberal commentators for libertarianism – they add a lot of heat but not much light.

  17. Silentbob says

    My understanding is that the “unalienable rights” part of the Declaration of Independence was based on source material that included the right to “the means of acquiring and possessing property” (i.e. capital). According to Wikipedia

    Benjamin Franklin was in agreement with Thomas Jefferson in downplaying protection of “property” as a goal of government. It is noted that Franklin found property to be a “creature of society” and thus, he believed that it should be taxed as a way to finance civil society.

    So it’s Franklin’s fault! Bloody eighteenth century socialist! 😉

  18. lanir says

    @Marcus Ranum 5 & 11: Yeah… I’m probably a bit more ignorant about economics than I should be. Econ 101 insisted on telling me people buy things because every purchase makes them happy. Most ridiculous marketing BS I’d ever heard and the mental gymnastics the professor went through to try to justify it were utterly amazing (it’s not really “happy,” but… it’s happy). Much like religion, when proponents have to start by redefining all actions of a deity or market as “good” you can pretty much be certain you’re dealing with some nasty, thoroughly corrupt assholery. So it’s always interesting to get more information.

    Going through the “redundant” job thing currently, sort of. I’m a system engineer/admin and they’re replacing me with 20 people playing helpdesk in southern Asia. They won’t be able to accomplish even half of what I do on a regular basis. I’m being asked to train them, which those guys see as a bizarre (to me) exercise in documenting a step by step process for everything involved with my job. Pretty sure the actual goal is to introduce rampant inefficiency into the business and “accidentally” crater it so the whole company can be merged with another one owned by the same people.

  19. moarscienceplz says

    Silent Bob #18:
    I’m a big fan of Benjamin Franklin, but the cynic in me can’t help but note that he made himself a very rich man via printing and postal delivery, neither one of which requires owning a lot of property.

  20. Nick Gotts says

    Part of the incentive for the revolt from England was that England was going to ban slavery. – Menyambal@8

    Well this was certainly not about to happen – legal slavery was not ended throughout the British Empire until 1843* (and even then forms of exploitation scarcely distinguishable from it in practice continued), although there were fears among the colonists that the slave rebellions already happening in the Carribean could spread north, and that the British government might use the issue of slavery against them. I heartily recommend Simon Schama’s Rough Crossings: Britain, the Slaves, and the American Revolution, which focuses on the role of slaves who fought for the British, and their subsequent fate. This was mostly not a happy one, although many did at least escape from slavery. Some ended up in the British colony of Sierra Leone, where for the first time in the English-speaking world, black men – and even for a time some black women – had the right to vote (for a council with significant powers).

    *The Slavery Abolition Act of 1833 abolished it except in territories controlled by the East India Company, Ceylon, and St. Helena.

  21. EnlightenmentLiberal says

    To Marcus in 5 and elsewhere
    I don’t think that’s fair at all.

    I’m echoing what Silentbob said in 18.

    http://www.economist.com/blogs/lexington/2010/10/estate_tax_and_founding_fathers

    With Thomas Jefferson taking the lead in the Virginia legislature in 1777, every Revolutionary state government abolished the laws of primogeniture and entail that had served to perpetuate the concentration of inherited property.

    It was a bit more nuanced than that, and several of the founding fathers had very curious ideas, such as early forms of Georgism, to extreme forms of wealth redistribution.

    I’m not going to argue that they were commies, socialists, Marxists, whatever. I’m not going to argue that many of them were acting out of disinterested selfless desire to make the country into a great place for everyone. However, I don’t think you’re being fair at all to the political situation at that time. Libertarianism is a rather recent invention that post-dates the founding by a hundred years at least AFAICT.

    Even 100 years ago, it was a commonly held belief that steep inheritance taxes are a great thing that should be done.

    How far we have fallen as a culture.

    From the very beginning the US set itself up to be an imperial power

    Please. Ignoring the native Americans, that was quite a while in coming. The acquisition of several territories over 100 years later caused IIRC quite a debate in the congress about this very issue, and how this country should not hold territories like an imperialist nation. Yes, that side lost.

    To smrnda

    nowhere in the constitution or bill of rights is there any right to start or operate a business.

    Arguably the ninth.

  22. Nick Gotts says

    From the very beginning the US set itself up to be an imperial power – Marcus Ranum@5

    Please. Ignoring the native Americans, that was quite a while in coming. – EnlightenmentLiberal@23 [emphasis added]

    Refuted out of your own keyboard, I’d say. Ignore the native Americans, why? I’d guess you’d have no problem seeing 19th century European colonisation of Africa as imperialism.

  23. Nick Gotts says

    Further to #24, it’s worth noting that the pace of land theft from the American Indians was one of the issues between the British government (which wanted a pause) and the colonists.

  24. MMark says

    Interesting discussion – we’re talking about Atlas Shrugged in another thread and, like that book, I always thought socialism was something the young and naïve gravitated towards but grew out once they figured out the real world consequences.

    A better way to think about capitalism is to equate it with freedom – something the people who say the US is a capitalist country are probably doing unconsciously. Conversely, the more a government controls its people and their interactions, the more socialist a country becomes.

    Countries with freer societies and freer markets always economically outperform those countries with more government control – every country has some government control of economics, so let’s not start attacking a straw man, I’m talking in broad terms. The poor in the US live substantially better than the poor in countries like Venezuela. You can talk about whether Marx was right about this or that, but when you look at the history of freedom vs. the history of government control (in broad terms), its very clear which economic system benefits the most people.

    It’s so clear that I’m puzzled when otherwise smart, rational people profess to love socialism. I mean, don’t you want to help the poorest people around the world? Socialism is the last thing you’d want to give them, in my opinion.

  25. Nick Gotts says

    A better way to think about capitalism is to equate it with freedom

    Hahahahahahahaha! Good one!

    Oh, you were serious? Capitalism is most simply defined in economic terms: that production decisions are determined primarily by the search for private profit. It is compatible both with liberal democracy, and with various kinds of dictatorship – as a casual glance at history shows quite clearly. At a more sophisticated level of analysis, capitalism can be viewed as a world-system in which politics and economics are linked in complex ways, and one of the central features of which is profound inequality both within and between states – some of which constitute the “core” of the capitalist world-system (currently the USA, Canada, the EU and Japan) where the most technologically advanced and proifitable economic sectors are concentrated, others the “periphery” (Africa, Latin America, the former USSR except Russia, much of Asia), dependent mainly on raw materials and cheap labour, and the remainder the “semi-periphery” where there is a mix of activities (currently Russia, China*, possibly India, some of the smaller states of Asia, Australia). It is hard for a country in the periphery to advance into the core, but not impossible – what seems to be a permanent feature of capitalism is the division itself.

    Countries with freer societies and freer markets always economically outperform those countries with more government control

    Empirically false, of course. To give perhpas the most obvious current example, no country anywhere, at any time, has matched “Communist” China either in a decades-long period of rapid economic growth, or in lifting vast numbers of people out of poverty – despite the fact that it is a corrupt dictatorship and still, despite the reforms since the late 1970s, has a primarily state-run economy.

    The poor in the US live substantially better than the poor in countries like Venezuela.

    But considerably worse than in countries at a similar level of technological developoment but which deviate a lot further from “free markets” than the USA, such as Germany and Sweden. In terms of measures such as life expectancy and infant mortality, the USA hardly does better than Cuba. Moreover, Venezuela is very far from being socialist, despite the propaganda of both the Chavez government and its enemies: the majority of the economy remains in private ownership (much of it foreign), and government spending is a lower proportion of GDP than in rich European countries. Chavez was never able to change Venezuela’s heavy dependence on oil exports, and although serious errors by him and his successors, and deliberate economic sabotage by his opponents at home and abroad, have contributed to its current disastrous state, the main cause is the drastic fall in oil prices – just as the main factor behind Chavez’s earlier successes in reducing poverty was the high oil prices during much of his rule. Venezuela, like the rest of Latin America, remains stuck in the periphery of the capitalist world-system.

    It’s so clear that I’m puzzled when otherwise smart, rational people profess to love socialism.

    Can you give us some recent examples of such people? I’m a democratic socialist, but that means I advocate democratically-run collective ownership of the means of production, distribution and exchange, as the best means of constructing a global society that is both environmentally sustainable and provides everyone with a decent life (something at which capitalism is failing lamentably), not that I “profess to love socialism”. I think your problem is a profound ignorance of both politics and history, as clearly demonstated by your comment.

    *China might still be called “socialist” in some respects, because of the extent of state control of the economy – despite its moves toward permitting greater private ownership – but it has undoubtedly joined the global capitalist system, as its extensive trade with and investment in foreign capitalist countries shows.

  26. MMark says

    @Nick
    I hope you’ll indulge me, your comment seems fantastically incoherent and I’d like to unpack it a little. I’m supremely open to persuasion, and I’d like to hear a persuasive argument for socialism because I’ve not heard one to date.

    Hahahahahahahaha! Good one!
    Oh, you were serious? Capitalism is most simply defined in economic terms: that production decisions are determined primarily by the search for private profit.

    You mock my equating capitalism with freedom, but I don’t see anything in your definition which rebuts me. You’re misleading at best and lying at worst. In the US, individuals can start businesses or form corporations for any reason they’d like. People can start non-profit companies, charities, for-profit corporations, or ventures destined to lose money. The desire for profit is certainly a big reason people start a business, because it’s hard to sustain a business that loses money. As a result, absent further evidence I’m going to stand by my general definition, especially in light of what you have to say below.

    capitalism can be viewed as a world-system in which politics and economics are linked in complex ways, and one of the central features of which is profound inequality both within and between states

    The ways politics and economics are linked may be complex in your mind, but to me it is relatively simple. In a free/capitalist society the government exists to set the rules. If you want to start a bank, the government has mandated a set of rules you must follow. Ditto for almost every job or business – something as simple as shampooing hair in some regions requires extensive schooling (200 hours if I’m not mistaken). The government also sets rules for things like pollution which seek to minimise the effects of externalities.
    But within those set of rules, a free society allows its citizens to engage in whatever economic activity they wish; that society does not dictate. Given your definition of democratic socialism later on in your comment, it seems to me that the complexity would be astronomically higher in a society governed to your specifications.
    Additionally, to the extent there is inequality in a capitalist society, it is driven from the bottom up. Meaning that someone like Tim Cook is incredibly wealthy because of decisions he made, not decisions made for him by government. Inequality is also one of the enduring facets of socialist economies, but it is driven by the top down. Meaning that the government – the people decision who will engage in what economic activity – picks those people who are going to be fabulously wealthy, often as a result of political allegiance. Hugo Chavez’s daughter, as an example, managed to amass a fortune of something like a billion dollars entirely because she was his daughter.

    others the “periphery” (Africa, Latin America, the former USSR except Russia, much of Asia)

    You’re making my point here – the countries you have in parentheses above are all less free than the countries you describe as being in the “core”. Some in Africa and Latin America are fantastically oppressive.

    Empirically false, of course. To give perhpas the most obvious current example, no country anywhere, at any time, has matched “Communist” China either in a decades-long period of rapid economic growth

    This is also a lie – or a blind spot – one that your worldview will not allow you to see. Before I unpack this, let’s see what you have to say about China later on:

    but [China] has undoubtedly joined the global capitalist system, as its extensive trade with and investment in foreign capitalist countries shows

    I would dispute this characterisation of China as a capitalist country. The opening up of their economy has been widely publicised as it led to a period of what appears to be real growth for the country. But economists can’t really trust economic reports coming out of China, and much of their “success” is likely a mirage. The Soviet Union used to play up the amazing results of its various economic plans, and we all know what happened to them.
    Back to the idea that China lifted vast numbers of people out of poverty – this would seem to dispute that argument: https://en.wikipedia.org/wiki/Great_Chinese_Famine.
    If 43 million Americans had died of famine in a four year period, I’d be on the other side of this debate.
    The bottom line is, even if I were to grant that China represents a socialist economy which has performed better than capitalist economies, they would be the exception which proved the rule. Here’s the problem – in a capitalist society, you don’t need an “enlightened ruler” to tell people what to do. People will figure that out on their own, society just needs to let them do that. Where are all the other “enlightened rulers” of socialist economies bringing their people out of poverty?

    But considerably worse than in countries at a similar level of technological developoment but which deviate a lot further from “free markets” than the USA, such as Germany and Sweden.

    There’s two things here. One, I’m not making a distinction between free economies like the US and that of Germany. The category distinction I’m making is between free and oppressive societies: those of Cuba and Venezuela and (yes) China and Zimbabwe.
    Two, I notice you didn’t bring up countries like Greece or Italy or Portugal, whose overly generous welfare states have nearly crippled their economies.
    I’m going to completely ignore your argument about Venezuela, btw, for this reason: http://www.salon.com/2013/03/06/hugo_chavezs_economic_miracle/
    As recently as three years ago, David Sirota of Salon.com was arguing that the socialist Hugo Chavez had created an economic miracle in that country. That prediction didn’t serve him very well.

    I advocate democratically-run collective ownership of the means of production, distribution and exchange, as the best means of constructing a global society that is both environmentally sustainable and provides everyone with a decent life (something at which capitalism is failing lamentably)

    This is the heart of what I don’t understand about your worldview. If I’m reading this right – you’re not a fan of freedom. You don’t want people to be able to start and run businesses as they deem appropriate, you’d like the government to figure that out. In theory, this sounds like a laudable goal. But we don’t have to rely on theory in this case, there have been several dozen attempts to do what you’re describing, and none of them have been successful – depending on how you describe that word. If you describe it in terms of economic growth, freedom/capitalism is by far superior as both of our arguments have shown (yours inadvertently). There is a reason the iPhone – for example – wasn’t created in China. Through freedom, through trial and error, through the power of the free market, the US and other free economies around the world consistently and continually innovate and create more and better value for consumers. That is a process which no government body can match – or has been able to match.

    I’ll note something else about your argument. You couch it in Marxist terms – “means of production and distribution”. It is such a backward looking ideology. The means of production have been democratised, and will continue to be for the foreseeable future. 3D printing will make everyone, or almost everyone, a producer. Drones or driverless cars/trucks can make anyone a distributor. How does collective ownership compete with, or even address, this phenomenon?
    The internet and smart phones are democratising knowledge and creating opportunities for people that we couldn’t have fathomed two decades ago. Socialism – your brand of it anyway – appears to be stuck in the 19th century. I don’t quite know what to make of it.

    I’m honestly interested in your thoughts on what I’ve written. Until this political season I had no idea there was such a large socialist contingent in the Democratic Party and I’d really like to understand it.

  27. Dunc says

    As long as people continue to attempt to view the vast array of possible economic systems in simplistic, linear terms, with “capitalism” at one end and “socialism” at the other, they’re going to continue talking nonsense, no matter which end of their imaginary line they come at the problem from. At the very least, you need two axes – ownership form (private or public) and allocation mechanism (market or planning).

    “Capitalism” does not require free markets (mercantilism is undoubtedly capitalist, but has very “un-free” markets). “Socialism” does not preclude free markets (modern European social democracy has very free markets, yet is clearly socialist). If free markets are your thing (and I do agree that they have many advantages) then good for you, but that doesn’t actually tell you anything about where you should stand on the capitalist / socialist axis.

    One other thing:

    The means of production have been democratised, and will continue to be for the foreseeable future. 3D printing will make everyone, or almost everyone, a producer.

    Until you can 3D print food and potable water, this is rubbish. Also, 3D printers do not run on fresh and and sunshine – they need electricity, feedstocks, and sophisticated computers to control them, and specialised skills to programme them. None of those things have been sufficiently democratised to be able to support your claim.

  28. MMark says

    If free markets are your thing (and I do agree that they have many advantages) then good for you, but that doesn’t actually tell you anything about where you should stand on the capitalist / socialist axis.

    I’m working with Nick’s definition of socialism, which in my reading precludes the type of free markets you are describing. “Collective ownership of the means of production, distribution and exchange” doesn’t leave much room, as far as I can tell, for individuals to exhibit economic freedom.

    Until you can 3D print food and potable water, this is rubbish. Also, 3D printers do not run on fresh and and sunshine – they need electricity, feedstocks, and sophisticated computers to control them, and specialised skills to programme them. None of those things have been sufficiently democratised to be able to support your claim.

    My claim is a prediction, one that is based on what’s happening in the real world, today. I did not say that ALL production would be democratized, but of the two examples you give one of them literally falls, free, from the sky 🙂
    My point is – 100 years ago the knowledge, tools, or skill needed to produce what we consider today to be very basic items was concentrated into a few hands. Just a decade or two from now if you need an extra place setting for dinner you probably won’t have to go to the store. This democratization of production is going to have a profound positive impact on the economy – just as the democratization of knowledge has had in the past two decades. And I’m having trouble understanding how socialism negotiates these changes.

  29. Dunc says

    “Collective ownership of the means of production, distribution and exchange” doesn’t leave much room, as far as I can tell, for individuals to exhibit economic freedom.

    Well, I’m not Nick, so I’m not going to attempt to argue on his behalf, but “economic freedom” is a pretty vague term. Even so, I’m not sure how “[c]ollective ownership of the means of production, distribution and exchange” necessarily causes any problems. Collective ownership doesn’t absolutely require central planning – you could envisage a society in which individuals are free to use collectively-owned assets in whatever way they see fit, with little or no more regulation than currently exists to (e.g.) prevent me from setting up an oil refinery in my backyard. You would need some mechanism to resolve scheduling conflicts, but that’s hardly beyond the wit of man. As for collective ownership of the means of distribution and exchange – most civilised countries already have this, in the form of nationally-owned roads (and other transportation infrastructure), a post office, and a national currency managed by a central bank. Please tell me you’re not the sort of person who feels oppressed by the existence of the Post Office?

    of the two examples you give one of them literally falls, free, from the sky

    Many parts of the world are arid. That’s why access to safe drinking water is such an important issue.

  30. EnlightenmentLiberal says

    To Nick Gotts
    Man you’re an ass, and seemingly for no reason at all.

    Refuted out of your own keyboard, I’d say. Ignore the native Americans, why? I’d guess you’d have no problem seeing 19th century European colonisation of Africa as imperialism.

    For me, the word “imperialism” refers to one country ruling another country, often for extracting money from coerced labor or other unfair economic laws. The United States did not do that to the native Americans. The United States just killed them wholesale, genocide, and forced them off the land. Colonial? Perhaps. Genocide? Definitely. “Imperial power”? IMO, not really, no.

    To MMark

    The means of production have been democratised, and will continue to be for the foreseeable future. 3D printing will make everyone, or almost everyone, a producer.

    This is what ignorant fools believe.

    Just as a “for example”: 3d printers cannot, and very likely will never be able to print themselves in whole. In particular, the circuit boards.

    Another problem is what we might call “specialization of equipment”. While some things might be createable with a 3d printer (at inferior quality), it is also much more expensive to do so compared to equipment dedicated for a particular purpose.

    3d printed materials are often of inferior quality. Either look up the difference between “forged” and “cast”? You should. It would be instructive.

    And then there are limits to what materials can be 3d printed.

    And the input to a 3d printer needs to be heavily refined and processed and purified, which means we’l still need such massive centralized equipment.

    And there’s mining.

    The list goes on and on.

    This is the sort of naivety that I see out of anarchists like believers in the Venus Project and that other group whose name I thankfully forget. The entire belief system is a sham.

    Just a decade or two from now if you need an extra place setting for dinner you probably won’t have to go to the store.

    Taken with the intended meaning: Complete pipedream.

  31. MMark says

    @Enlightenment Liberal

    This is what ignorant fools believe.

    This is so interesting, I find the hostility to these ideas incredible (perhaps that’s how socialism will deal with them). I’m not making a claim about what 3D printing can do right now, I’m making a prediction about what 3D printing will be capable of in the future. I’m also not making a claim that 3D printing will obviate the need for other kinds of production. Perhaps I’m not expressing myself clearly, or you’re not giving my arguments a charitable reading.
    I will note, as a historical matter, there were quite a few people saying quite similar things about internet commerce 20 years ago. “It will never replace B&M stores”, “Nobody will want to use it” “There are limits to what it can do”, etc. While some of these points were and are still valid, they miss the forest for the trees. The internet has completed revolutionized many things about our economy, if not the economy itself.
    Driverless cars will likely have much the same influence – think about how much unused/inefficient capital is tied up in parked cars, or parking lots, or a myriad other things related to how we get around right now.
    So I’ll throw your naiveté claim right back at you. You’re fooling yourself if you think life in the US is going to be basically the same 30 years from now. In some ways I think it will be radically different.
    And to get back on topic – this type of innovation certainly wouldn’t have been possible under a socialist system like the one Nick describes.

  32. Dunc says

    You’re fooling yourself if you think life in the US is going to be basically the same 30 years from now. In some ways I think it will be radically different.

    Well, that’s certainly a pretty safe assertion…

    I’ve been around long enough to become quite sceptical about predictions of the future. Yes, technology can usher in some remarkable changes, but a lot of technologies which are predicted to do so never really pan out, and the ones that do usually do so in unexpected ways – ways which rarely match the utopian promises of their early boosters. Will life in the US be radically different in 30 years time? Almost certainly. Will it be anything like what anybody is currently predicting? Almost certainly not.

  33. EnlightenmentLiberal says

    You’re fooling yourself if you think life in the US is going to be basically the same 30 years from now.

    Never said that. Never said anything even remotely like that in this thread.

  34. Alan Smith says

    Capitalism, I believe, has economic models which describe how it operates. Long ago I memorized the name of one of the models, specifically, the “Solow model.”

    Are the models for other economic systems? I might as well get to the point. The Solow model as well as several other models of capitalism have as a required component a never ending increase in the herd of humans. The population can go down for a while, but the long-term slope must always be up. It seems to make it a Ponzi scheme.

    Are the mathematical descriptions of economic system that are not Ponzi schemes. The barter system would seem to qualify, but not likely to work in a modern society.

  35. Dunc says

    Sorry to dig up this old thread, but I’ve just read a very good article (from the excellent Model View Culture magazine / blog*) on some of the problems with the idea that 3D printing is going to resolve social and economic inequality:

    Questioning the 3D Printing Revolution

    Believing that technology is the solution to deeply-rooted socio-economic issues is problematic on numerous levels. Enabling people to create is merely a small part in a larger solution that’s needed to liberate the worker class from the entrenched system of production. It brings into question whether there is any distinction between the disruptive policy of maker/fabrication culture and Silicon Valley ideology itself, where they supposedly challenge existing hierarchies without altering the relations between the worker and the means of production. The fabrication revolution might equip people with the tools that have the radical potential to allow self-sustenance, but that condition won’t rise when everyone has a 3D printer, as manufacturers would have you believe. Instead, it will rely on envisioning a post-work society where the commodity-driven market has been upended, and people 3D print to create for the sake of creating instead of relying on that market to sustain.

    (* I can’t recommend Model View Culture highly enough to anybody who’s interested in how technology interacts with social issues.)

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