KCRWs Left Right & Center 11.28.08 SHOW
The Future of Capitalism: Which Way Now?
The Future of Capitalism: Which Way Now
Here’s that in-depth philosophical program you’ve been waiting for. Tony is truly over the top in his defense of capitalism; Bob brings up the nearly-verboten name of Karl Marx… Tony quotes Lord Byron…and the fireworks begin. Matt, while defending capitalism, says it’s time to rewrite the social contract, with certain guarantees of security in terms of health care and welfare, so the rest of the economy can do what it’s supposed to.. Bob defends the middle class; Arianna invokes Ayn Rand saying she would disapprove of the Wall Street orgy. Tony and Matt duke it out for awhile, too. It’s a heady show and a hell of a topic. This one’s worth hearing twice and quoting from. We really want to hear from you on this one.
As President-elect Obama's apparent choice for health and human services secretary and as White House health care czar, it is a fair guess that Tom Daschle's view on health care legislation may be decisive.
So it is worth reading his book "Critical: What We Can Do About the Health-Care Crisis," in which the gracious former Senate leader lays out without equivocation both the policy he recommends and the tactics for how to pass it.

Comments
Adam Smith's notion of
Finally, someone in a public forum invokes the name of one of the most important thinkers of the post-enlightenment age with an intent
For whatever reason, my original post seems to have appeared missing most of the original content I had lovingly typed up some six hours ago. I will assume that it is part of a state-sponsored effort to censor me, thus depriving a bewildered populace their sole opportunity to hear the TRUTH.
What I had wished to express was my appreciation for Mr. Scheer's unafraid and intellectually honest invocation of Karl Marx, a man who, at the very least as a critic of capitalism, should be considered essential reading. That the reaction this provoked was a torrent of obsolete fallacies designed to connect liberal social policy, or indeed democratic socialist policy with the horrors of the gulag is no surprise, but it is striking how feeble they are beginning to sound.
Marx remains relevant and remarkably prescient, though it doesn't take the herculean effort of actually reading the lengthy and rather soporific Das Kapital to know that a system that periodically must be saved from itself is not without serious flaws. It is my sincere hope that we can have an honest debate about these issues, a debate unencumbered by Cold War era orthodoxies, whether left or right. And no, my dear friends on the right, the matter is NOT settled. And yes, I know I shouldn't start sentences with "and."
I'm a long-time listener to the show, and Matt sounds like a great guy and a very competent host. But please, let's get real and find new name for the show.
"Left, Right and Center" is a joke- it's Orwellian.
When people are allowed to abuse language in such a way, then anything's possible. Today's show especially makes clear that what we have here is three Democrats and a Republican.
I would much rather listen to Matt and Tony debate with each other.
"Red Diaper Robert" is simply laughable. Laughable until you realize he's a 72 year old man who hasn't matured emotionally past the age of 14. He completely wastes almost half of each show with his half-baked adolescent rantings; refusing to step off the soapbox until he's finally shouted down by an exasperated Matt Miller, and he often uses his "end of show rant" simply(and cheaply) to take one last jab at Tony. Bob Scheer is a sad, silly man.
Arianna Huffington is a "Let Them Eat Cake" or "Let Them Take Mass Transit" Liberal- and a real airhead to boot. She adds absolutely nothing to the show. Who is this woman anyway, and what has she done? She's really the Paris Hilton of left wing politcs- she's politically famous for being politically famous, nothing more. I only know that she lives in a mansion and drives two Priuses. What to think about a woman who marries a gay man, then divorces him and takes all his money but keeps his name. I wonder what else she didn't take.
"Independant Progressive Blogosphere"?
What is that!? It sounds like a creature from an early Godzilla movie. Please stop abusing language this way and insulting that part of your audience in possesion of half a brain. Just admit that Arianna threw a huge wad of cash at KCRW and bought a slot for herself on the show-quid pro quo.
After listening to today's show I've finally realized why liberals love FDR- because he created poverty and poor people. And Liberals love both. Because they need them to justify big spending on Big Government which gives them political power to endlessly harp on us and order us around and make our lives miserable.
The Democrats have their financial crisis, their new FDR and they just can't wait till they get their new Depression.
In my comment above, I wrote that Obama's victory has emboldened some.
Well go and read Jeff's comment, immediately above mine and you can see that obviously I'm right.
He referred to Marx as "relevant and remarkably prescient"- yes that's what he did. He also referred to Bob Scheer as "un-afraid and intellectually honest". That's interesting. I have a four year old cousin who I love with all my heart, but he's pampered and spoiled and still walks around with a pacifier in his mouth. Sometimes I tease him by swiping it, whereupon he throws a tantrum- stomping and screaming like a little brat. I never realized that he was actually being "unafraid and intellectually honest". That's my bad.
Jeff pillories Tony Blankley for bringing up the Soviet Gulag, and writes that he wants to engage in debate "unencumbered by Cold War era orthodoxies".
Yes, let's just forget the past Jeff. Why would we want to remember Gulag, and the social policies that brought that about. Why should we discuss who is responsible for such things and what philosophies inspired them? Complete waste of time.
Why don't we just trade our "obsolete fallacies" for Marx's much more useful ones? Differences of opinion is so "old school"- partisan bickering must cease.
The Age of Obama is here. Unity is key.
It's time to shut up and get with the program
Jim,
Repeat as my last comment was largely cut off in posting
Jim,
I think you (and in fact everyone on the right) misunderstand those who claim Marx as an influence on their thinking. I claim that he is for me, and i will now explain why.
To believe that Marx made a basically sound critque of modern, highly concentrated capitalism (as opposed to the capitalism of Smith) is not to think he was necessarily right about its solution. Rather, i use a Marxian analytical framework to determine our current economic systems flaws and postulate my own remedy. Like Bob, Arianna and Matt, i want to save capitalism from itself.
If you can honestly say that you don't think the current system is in need of fundemental reform then i can say nothing more. What we have currently is in many respects, the worst of both worlds.
I'm amazed that someone as blinkered in their thinking as you actually listens to LRC but i'm certainly encouraged that you do. References to the Gulags are entirely misplaced. Try expounding on the horrors of Scandinavian social democracy instead. They don't seem to be on a collision course with totalitariaism. That is what those who you criticise admire. A system with many stable and working models.
Regarding Arianna's credentials. You may think she is an airhead, but as far as i'm aware they don't let too many airheads be president of the Cambridge (or Oxford) debating society. (But maybe you're part of the new breed of conservatives who consider academic credentials to be an elitist negative)
I hope you respond.
Ali C,
You understand precisely what I was meaning to convey.
Jim,
That you constantly resort to making ad hominem attacks says more about the weakness of your arguments than it says about anybody else. Constructive political discourse is not advanced by dogma, nor indeed by petulant behavior at the discovery that others may be so brazen as to hold a differing opinion.
At no point has Robert Scheer, nor indeed have I, expressed a belief in Marxism. I can confidently claim to appreciate Plato, Nietzsche, Kant, and many others without a rigid belief in every word written by any of them. The fact that Mr. Scheer is clearly influenced by Marx's critique of capitalism, and will say so publicly knowing what ire it will provoke in some makes him both intellectually honest (an uncontroversial statement by any reasonable measure) and somewhat courageous.
An example of the "obsolete fallacies" I referred to would go something like this: "Passing Universal Health Care would be to stand at the top of a slippery slope at the bottom of which is a secret policeman knocking at your door to take you away to a labor camp for believing in God." I'll gladly defer to Ali C, who already exposed this nonsense with a reality-based example, Scandinavia - and their films aren't half bad either.
Let me try this again. Adam Smith's notion of the "invisible hand" balancing the interests of investors in markets to the benefit of all is obsolete in the age of mathematical analysis of chaotic systems. Chaotic systems are those in which small, seemingly insignificant events can radically drive large, complicated systems to different levels of events and results, the "butterfly flaps its wings in China..." notion that so many popularly find attractive in describing remote weather or climate phenomena. That markets are chaotic can be illustrated with the example of Apple Corporation, enthusiasts generating in a garage what would morph to become a major player in the home-computer market. Events generated through entrepreneurial participation in markets is a hallmark of chaos because through entrepreneurial efforts, a new product or service comes essentially “out of nowhere” (from a market point of view) to dominate the market. Winners and losers result unexpectedly, fundamentally altering the circumstance from that that existed before the introduction event. This isn’t “balancing”, it’s destabilization in the sense that weather destabilizes farmers’ markets where irrigation isn’t available. But let me explain; this isn’t an advocacy to say that markets-philosophy should be abandoned, but that markets’ characteristics should be realized, and that markets “deserve” minimum regulation to the degree that is necessary to avoid their catastrophic collapse (derivative of catastrophe from chaos theory). As to whether they should also work to benefit society overall requires consideration above this minimum level.
Thus, the analysis of Karl Marx, a non-mathematician who realized the chaotic nature of markets, has greater relevance as to the necessity of market regulation than does Adam Smith. The popular denial of Marx’s work on the basis of his advocating the revolution of the proletariat has the effect of stunting debate in the role and regulation of markets, something that should be of considerable interest to those who seek to keep markets healthy as distributors of goods and services rather than use them to concentrate economic and political power. One of the best reads that any Capitalist can accomplish is Das Kapital, a far more appropriate application of intellectual effort than that required of Atlas Shrugged, the philosophical manifesto of the power crowd!
Robert Scheer seems to have the better hand on the necessities of a successful, capitalistic society. I’m sure this comes from his clearer understanding of history.
I haven't read The Wealth of Nations, but I would assume Adam Smith is spinning in his grave, watching ENRON and Phil Gramm and all the nonsense about derivatives and collateralized debt obligations -- basically any situation where people get something for nothing, and then cover their tracks. I expect he would say, "no, no, you don't get it at all!" He espoused meritocracy and the free market, not pro-business protectionism.
I haven't read Atlas Shrugged, but I would assume Ayn Rand is spinning in her grave, watching the derivative market fiasco. Her idea in that book seems to be that creative people should go on strike against their exploitive system, both for its unreasonable regulation of their work, and for its undervaluing of their contributions and confiscating their credit and profits. In other words, powerful people using the system to get something for nothing, producing wealth out of nothing, based on the contributions of others. Isn't this exactly what the derivative market tried to do?
While I found the show (and subsequent blogging) interesting, why does this type of discussion seem to dwell on 150 year-old perspectives? Why not move the discussion into a future for a capitalism INFORMED by the events of the past 150 years? Why not look more closely at tools governments have used to buffer the swings inherent in capitalism? or facilitate greater transparency to ensure that markets work better?
Why not consider one major development in the post-war era (even post 1960s era) - the development of a robust not-for-profit sector? Much of the current non-profit sector is driven by charitable foundations (and wealthy individuals) addressing a wide range of societal needs. It's probably fair to say that non-profits have been expanding into a growing vacuum left between traditional religious charities and a de-funded public sector.
Do we as a society want this sector to keep expanding? Are they doing work better handled by the public sector (and elected officials)? Are there good lessons to be learned from the past 40 years that point to more effective public-private partnerships to maximize societal benefit?
You write that I "misunderstand those who claim Marx as an influence on their thinking." I'm not sure what you mean. As I said, Bob Scheer spends a good chunk of each week's show spewing Marxist rhetoric. He began today's show praising Marx by name. You defend Scheer and in doing so freely admit that you use "a Marxian analytical framework to determine our current economic systems flaws and postulate my own remedy." Several others here in the comments section have put forth sentiments praising Marx. I'm saying that you're Marxists, or at least to a great degree influenced by Marx. Exactly what am I misunderstanding?
Sarah Palin, Joe the Plumber and others have called Obama out as a Marxist. For this they were pilloried in the press and the blogosphere- accused of playing the "politics of fear", engaging in thinly veiled racism and just all around hate mongering. Yet Obama's campaingn speeches were full of redistributionist, class warfare Marxist rhetoric. Obama's close friend and mentor, Bill Ayers, actually refers to himself as a "Communist with a small "c"." I wrote above, that Obama's election has emobledened some, and the comments on this thread, praising Marx and the European Social Democrats who stress their debt to Marx only prove my point. The fact that someone is Marxist or a fellow traveller, does not end the debate. Just stop hiding behind terms like "Progressive"- stop insulting our intelligence.
"If you can honestly say that you don't think the current system is in need of fundemental reform then i can say nothing more."
I never said that. I don't know what we should do. I'm not an econimist and won't pretend to have any great knowledge of higher economic principles. But that hasn't stopped me from running a successfull small business for the last several years. Anyway, a lot of people who get paid a lot of money to walk around pretending to know's going on have been proven completely clueless in recent weeks. As Tony has been repeating on every show these last few weeks: let's stop pretending we know exactly what happened and have just the right cure.
"References to the Gulags are entirely misplaced." ?
Really? Tens of millions dead and imprisoned as a direct result of the implementation of Marxist social and economic policy and we're just supposed to shut up about it? I know you'd like to forget it. Gulag state- terror and engineered famine-these are just some of the inconvenient truths of what your "Useful Fallacies" have wrought. You've railed at Bush for eavesdropping on terrorists, yet the likes of you would tap the phones of Joe the Plumber. No we're not going to shut up about it.
If you want Scandinavian social democracy then go to Norway. Stop trying to pull that crap here, and if you insist on doing it then be upfront about it and let the public know what model you're working towards. At least that way people can accept or reject it knowing full well what they're being offered without you sneaking it into place gradually and in subtle increments. And yes, the EU is on a crash course to totalitarianism- as a matter of fact they're just about already there.
"I'm amazed that someone as blinkered in their thinking as you actually listens to LRC but i'm certainly encouraged that you do."
You've announced here your grandiose desire to "save capitalism from itself" yet you accuse me of being "blinkered". That's really rich- yes, that's just delicious.
Yes Arriana's an airhead. A complete blow-hole. Hearing the sound of her voice is like hearing Little Miss Muffet sitting on her tuffet. You defend her against my slur by citing her credentials- not by citing any singlular accomplishment, simply her academic credentials. It's funny, but the last few years, whenever I engaged in political debate online or with my Democrat friends and was treated to rants full of hateful invective, insulting Bush as a hollow-headed simpleton and worse, and by extension insulting me as I had voted for him- its funny that my citing of his Yale degree and the fact that he's one of the few who are deemed physically fit and mentally qualified enough to recieve training as an Air Force jet fighter pilot- funny that this was never enough to vouch for his natural intelligence and innate abilities. It's funny that all of a sudden, credentials matter- yes it's simply hilarious. I'm basking in the irony.
Go ahead, defend Bob Scheer if you must. The man is a nut. And referencing Karl Marx while making a critique of American capitalism while broadcasting from a junior college radio station in the heart of the People's Republic of Santa Monica is not courageous. It's not even "somewhat courageous". Please.
PLEASE
There is something to be said about the chaotic nature of economic systems, but chaotic doesn't mean unstable, nor is it inherent in a chaotic system that it demands controls. The opposite conclusions are more likely to be true.
My point is, Lee, that Marx saw that markets and (thereby) capitalism are unstable and would not, as claimed by economic theorists like Adam Smith, distribute wealth effectively and efficiently (this doesn't mean we know what will do that!). Markets and capitalism without extra, regulating constraints inevitably lurch toward extremes, either to total domination by one or a small number of what we would call "fat cats" (or their corporate equivalents) or to utter collapse. I'm suggesting that one should consider studying Das Kapital as a means of understanding unfettered Capitalism so as to learn the places that regulation could be appropriately applied. Of course, there's lots of other works in economics and even mathematics that would help one to understand.
Marx's labor theory of value isn't the whole picture, but it is a good chunk of it. One would do better referencing it rather than relying on vague notions like the "invisible hand" in attempting to demonstrate the "natural" balancing of markets and economies. By the way, a system that is chaotic is by definition unstable and requires outside regulation. Sometimes psuedo stablilty may last a long time as, for example, in the Solar System's planetary orbits. Mathematicians and physcists have shown in recent years that the Solar System is unstable and will demonstrate that on scales of millinea. The psuedo-stable "life" of markets and economies aren't that long.
I'm appreciate your efforts to get us commentators beyond the same, tired old arguments about capitalism versus communism. My own attitude is that we, paraphrasing and modifying Gorbachef, require "a [captialism] with a face". I fall into arguing with the "free traders" because they don't see the relationship between unfetterd capitalsim and oppression. "Encounter a fanatical capitalist in some remote region and you'll find a slave nearby", is what I say. Slavery was quite an efficient system for distributing labor, and it required no compensation paid to the workers. Does that mean we should make a new application of it? No, there are reasons we limit capitalism, and many of these go far beyond simple economic arguments.
Yes, I hope to see the growth of the non-profit movement, but when the movement gets so large as to threaten traditional for-profit business, the hue and cry will be to limit it. Non-profits should consider organizing in anticipation of this. I would also like to see the growth of employee-owned businesses, another group that will have to learn to seek protection from the meddlings of Congress backed up by for-profit interests. I also hope for a repeal of the act that confers citizenship on corporations and desire to see certain critical areas designated as "non-profit" zones, maybe like healthcare as an example. There are lots of examples, despite the claims of a corporate press, where markets have failed (historical and present), and the providing of healthcare is a very obvious example.
Dear Mr. Hannity,
or rather, Jim (oops!),
If you have time to write such lenghty diatribes, than perhaps you can take a few minutes to bother justifying some of your assertions. You know, the particularly egregious ones lacking in any evidence or basis in the real world. You can start with "FDR created poverty." Hell, maybe you could explain what my affinity for Marx has to do with the President-elect, if anything (I'm not up for a cabinet position, if it makes you feel any better). I would also love the evidence, I'm assuming recently uncovered by yourself, that finally proves unequivocally that William Ayers is Obama's "close friend and mentor." Lastly, if you would, provide an example of EU totalitarianism, or at the very least a credible indicator of the potential for it.
Also, let me put your mind at ease about one particularly paranoid non sequitur of yours. I have no desire to tap the phone of "Joe the Plumber." I didn't care to hear what he had to say the first time.
And to revisit the gulag fallacy, you would be onto something if anybody was advocating authoritarian communism, or indeed advocating communism at all. That hasn't happened, and you don't advance debate by continually employing these straw men.
I have no more time for tired McCarthyism.
Tony Blankley had a psychoanalytical catharsis on the Nov 28th show.
Tony Blankley had a psychoanalytical catharsis on the Nov 28th show. When questioned about medical bankruptcy and Medicare issues, his superego failed to check the republican child (id) and shouted out: people will get sick and die like always, that is what he plans to do. WOW!!!! The wheels are really off the wagon, when you hear the id’s.
I’ll depart with a few words from the Master:
“Unheroic though bourgeois society is, it nevertheless needed heroism, sacrifice, terror, civil war, and national wars to bring it into being.”
Karl Marx
OR if you do not like that one try this tid-bit:
“At the present time, the system of protection is conservative, whereas the system of free trade is destructive: it dissolves old nationalities and pushes extreme antagonism between bourgeoisie and proletariat. In a word, the system of commercial freedom hastens the social revolution.”
Karl Marx
Read the Master
Jim, they're absolutely right. You're attacks tend to be ad hominem, and you speak from a position of relative ignorance and rhetorical soundbytes with relation to your knowledge of Marxist theory. Unfortunately, until you can better understand what you are attacking, a defense of your argument sounds hackneyed to any educated individual of economic theory.
I say this as an economist, and an economic historian, that has written papers on the trajectory of Western economic growth from the first industrial revolution through the great depression. I have studied both Adam Smith and Karl Marx, along with Schumpeter, Ricardo, John Stewart Mill, Milton Friedman, and other intellectual giants, all of whom shape the foundation of our economic principles today. Unfortunately, these other great thinkers have been brushed aside in favor of some oversimplistic Smith vs. Marx battle has become a call to arms for people to take positions on one side or another in this crude battle of good vs. evil. The real answer is that all of these thinkers had something to contribute. None of them was absolutely correct, but we can gain from each.
Jim, I know that credentials don't amount to much to you - a liberal education must mean that I'm just some sort of hippie elitest - so I'll also mention my accomplishments: I am an account manager for a global firm that consults almost all of the fortune 100. We have a presence in every continent, and manage multi-billion dollar interests for the world's largest firms. I am a capitalist, and agree with everyone on the LRC panel that capitalism has been the greatest engine for growth in the last few centuries, but that does not make it immune to faults, as with everything, it must evolve to manage the times we live in, or it will falter and cling to a fond memory of a past long gone.
I know it's bad manners to offer advice to someone that hasn't asked for it, but I'm going to do it anyway. Remember Dr. Suess's Green Eggs and Ham? Sometimes, a pretty simple book can have a profound message. Don't knock something till you've tried it, you might just learn that it has something to offer.
When others tell you that they can see a Marxian framework, you can try a different angle next time, maybe you can embrace that as something you may want to learn about.
Tony Blankly’s defense of capitalism in the way it has been practiced in this country for the past two centuries is so reductionist that it makes the grade-school “Adventures of Dick and Jane” read like Shakespeare’s “Romeo and Juliet”. He insists that the “high” American standard of living (of which a significant portion of U.S. citizens don’t truly share in) would have not been possible if not for a free market unfettered by government. Never mind the brutal appropriations of land originally owned by Native Americans, the heinous institution of slavery, or the ruthless exploitation of immigrant workers that has been going on for the past 125+ years. Never mind the federal government subsidies given to the banks, the corporate farms, the oil firms, the automotive companies, the telecommunications conglomerates, the iron and steel businesses, the railroads, etc., etc. ad nauseum. Never mind the convoluted laws, regulations and protections (usually enacted when no one else is paying attention) bought by those self-same industries from Washington, D.C.
Mr. Blankely became so indignant when Mr. Scheer accused him of agreeing to government intervention when it came to helping out giant industries and their CEOs but not for the people who toil for them. He may not appreciate the revealing of his true sympathies but it is EXACTLY the relationship that Mr. Blankely obviously favors.
If you want to read a lucid and revealing history of the American economic system, try “Gangs of America: The Rise of Corporate Power and the Disabling of Democracy” by Ted Nace. He reminds his readers that large corporations and capitalism are not synonymous phenomenon. In the beginning of this country’s history, corporations were tightly regulated in their setting up, their management, and in their longevity. It was in the middle of the nineteenth century that hardnosed businessmen became successful in manipulating government for their own self-centered aims, especially when it came to re-interpreting and carrying out the goals of The Fourteenth Amendment.No, Lee, I'm not confusing anything about the relationship between chaos and instability in mathematics or in economics. Instability is the instaneous characteristic of chaos and chaos is the general condition of instability. That's true in mathematics (in which I hold a degree), in physics, and in economics. Economists (those who study economics) have adopted chaos theory from mathematics as a means of understanding economics. Then has been ongoing for decades, so if you have any hope of understanding modern economics, you'll have to study chaos and instability and their direct relationship. If you don't want to accept this, that's fine with me; I'm ready to address other issues rather than continue along this line with you diverging from historically-established principles.
What wonderful show - Classic LRC; not to mention some terrific blogging.
I was however appalled by some of Tony’s comments. For me this is the problem with conservatism. There is a barely masked, completely unreasonable anxiety that the masses could be given more access to the pie. When ever there is any suggestion that this might be considered, out comes the fear mongering to the degree that even to discuss other philosophies such as Marxism, brings on references to the Gulag and statements that our freedoms will be encroached upon.
At one point Tony pronounced; “we have more health care than anyone else on the planet” Knowing Tony, I am sure that if he were asked to back up such a statement, he would have some convoluted, intellectual way of explaining his assessment. However, it sounded childish and petulant. And from everything that I have read, it is untrue.
Note to Tony: There seems to be a pattern here. First, you very carefully lay out your position. Then, at some point, you make some preposterous comment that forces me to question everything that you have previously said. I want to understand the conservative point of view and why we should espouse it. However, when you make such statements, your credibility goes out the window. You have such a good mind. And you have obviously had a wonderful, education. Why do I feel that at times you choose to use that good mind and education to support the insupportable?
Yes, as I recall, the first coporate charter wasn't issued (from the state of Delaware) until nearly fifty years after the War of Independence was over. Americans aren't taught the degree to which the War of Independence was a revolt against Crown-chartered corporations like the East India and Hudson's Bay corporations. It's true the Parliament imposed laws meant to raise tax monies in the American colonies, but some of those laws were drawn to assist in financing these corporations, and the conflict initially coalesced around the monopoly privileges allotted to these corporations. The experience was painful enough to delay the first state-initiated American charter for fifty years! It was only when Americans realized that the Crown would enforce these laws to the detriment of American life that revolt against the King was born.
The question that provided the basis for this discussion concerned the future of capitalism. It is an important question within which mention of Smith, Marx and even Ayn Rand seem entirely appropriate. Unfortunately, far too many of the postings that rely on either Smith or Marx seem to be coming from people who have obviously never read a word of either. Smith did not propose a system of business operating without control; he described a system in which individual greed would be controlled – unnoticed - by competition. He wrote of a mostly pre-industrial system, mostly free of monopoly and unions. It is not his fault that the world changed and we should not pretend that it has not. As for Marx: do I really have to mention that he is not to be blamed for Stalin?
Reality should tell all of us that those committed to perpetuating simple choices between purified systems, between capitalism and socialism, or (to borrow from Tony Blankley) gulags vs. universal health care, are postulating a choice that does not and will not exist.
We live in a mixed economy and we will continue to live in a mixed economy. The question about the future of capitalism must focus on whether we can achieve a mix that provides things like a good education, and decent basic health care, for everyone. At present, despite Tony Blankley’s breathtaking discovery that “we have more health care than any nation on earth,” we are a long way from achieving either of those goals. Isn’t it time we recognize that neither can be provided on the basis of markets?
A decision to build a society where every individual can achieve a good and appropriate education, and in which no family ever need fear ruin from the cost of health care, is not to suggest that we might usher in the end of history, but to express hope that we, in this country, can come closer to providing a framework for justice and equal access to meaningful liberty.
"Smith did not propose a system of business operating without control;..."
Of course not, Jim. He would have been ridiculed as an idiot if he had.
"...he described a system in which individual greed would be controlled – unnoticed - by competition", and there's the rub.
My reference to "the Invisible Hand" as representative of your second statement quoted above is a facetious one referencing Tony Blankley's use of the phrase referencing Smith (is that enough reference's in one sentence?). But for some time now, market systems have been recognized as chaotic in nature in that they are not self-regulating because they can become dominated by narrow interests rather than the overall interests of those that invest in them and that they can collapse. They have also demonstrated that they can be subject to influence by an initially insignificant event such as the small start-up that grows in a short period to completely dominate. Even market history shows that periods of psuedo-stability are succeeded by radical instability and collapse or monopoly dominance. We witness one now. Thus, the self-regulation of markets is a myth, and their regulation must generally come from outside regulators in order to get them to be stable over longer periods to the benefit of all. Even penny-anti pocker is a regulated activity; why shouldn't the game that is investing in the stock market not be?
I nearly spit out my diet soda when Tony intoned that people will "get sick and die, just like they used to."
More than anything else, we're witnessing the failure of regulation as a response to market complexity, since despite the pervasiveness of regulatory authority regulators not only failed to anticipate and prevent the current recession and financial-market convulsion but to a significant degree (as already noted) contributed to the major driving circumstances through short-sighted policies. We'd've been better off with the invisible hand.
Now that you've had your say, I will take it that I can leave this and go to other topics?
This has been a "chaotic" session where a discussion of popular ideas of well known but generally unread authors has resulted in a burst of namecalling, revering at least the public personas of Sarah Palin and "Joe the Plumber" (who was basically nothing claimed about him) and representing that emotional place in the political debate, as well as some well trained academic people who know more than I do about Economics and Chaos theory.
There shouldn't be any doubt that today's economy is unstable, basically a new world of globalism, new rising populations in Asia, contracting natural resources, the Reagan Bush era transfer and concentration of wealth in the wealthiest, an unparalleled US killing machine pushing the limits on what can be done with invasion and occupation as an instrument of national policy, and all sorts of social changes, consumerist materialism and high tech gadgetry. Blankley says that no one understands it, which doesn't mean we should stand helplessly by while the rich and powerful run roughshod. But he's right about the uncertainty we face.
Blankley's statement that "we can't afford health care for everyone so people need to get sick and die like they used to" is probably a decent statement of the conservative paradigm, certainly as it manifests itself in American politics. There is lots of progress but we can only afford it for a few. A Scandanvaian social democratic economy can spread some of that around, but would be a lot less fun at the top.
While Marx lived and was followed in a period when the world was viewed more mechanistically, so that people could assume that a "dictatorship of the proletariat" was the inevitable path to a just society, there is little doubt that his critique of abuses of wealth (as opposed to what to do with them) was valid in his time and this has persisted into ours. Scheer was also correct that a lot of success comes from siezing political power and gaming the system. One of the commenters mentioned Apple computer as this "butterfly effect" of entrepreneurism. The real economic winner was not Apple but Microsoft, which wholeheartedly pursued the path of making itself a monopoly, and when the Clinton Administration went after them, gave lots of money to Bush, whose Justice Department then made a favorable settlement. That's buying the government, which reached a modern summit during the Abramoff era. Preventing this is one challenge we certainly face. (Microsoft's owner then got into the non-profit charity business at the same time. How much good do we think the nonprofits and foundations will do, without resources to sustain the initiatives they try to seed?)And while one problem with regulation, as someone has mentioned, is that the regulators can never think of everything, a bigger problem with regulation is that regulation is too good an investment to keep the inordinantly wealthy from capturing it.
USSR people created "gulag abuses" butr these begin to turn into Guantanamo abuses as the powerful, particularly in time of anxiety, act ruthlessly against those who stand in the way of getting what they want. As the line between public and private violence merges with Blackwaters and other private security arms emerge, it is clear that we face large problems. The presence of an emotionally committed gun lobby, which got the Supreme Court to interpret an ambiguous constitutional provision in their favor, is another aspect of the future to consider.
So how do we prevent the concentrations of wealth, now institutionalized with multinational corporations that exceed the power of any legal or economic system to contain them, from pursuing short term self interest in ways that are ultimately destructive. Greenspan admitted that he expected more wisdom than he got. Why were we surprised? The economic system gets what it pays for, and often what it pays for is more short term feeding frenzy like we saw in subprime. Is this rational or irrational behavior? Or is it structural because we do not pay enough for system integrity?
More significant questions are how to involve more people in economic decision making, to prevent people from being emotionally vulnerable to the manipulations of consumerist materialism, and to involve them actively in something resembling citizenship in a global village.
Well, I guess I should have expected you to bluster with empty accusations. Whether you agree with the application of chaos or not, you seemed to have agreed in your last post that some sort of regulation is required under the present, economic circumstances in your last, long post. Given that for the moment that one or the other point of view is merely a matter of semantics, I can't see that you would want to pursue this further unless you possess some sort of perverse pleasure in blustering, so I suppose I can consider this exchange closed. Let's hope so!
Hello all,
I have just listened to the show and then read the comment line, whew! Thank you all for taking the time to contribute.
I will try again
Hello all,
I have just listened to the show and then read the comment line, whew! Thank you all for taking the time to contribute.
Without invoking Marx or Smith or anybody else. It seems to me that wealth is necessarily in the position to acquire more wealth and sort of snowball up into a corporate giant if unchecked by some other force. Obviously the more money I have to invest in any given enterprise the more likely it will succeed, especially if I make wise chooses as to what to invest in. If I can produce things people want then I will get wealthier and have more to invest.
It is also essentially obligatory to lobby government on behave of my business interests. This is legal therefore as a responsible corporate leader I need to hire smart people and pay them well to talk with government using all of the knowledge and resources they posses to influence legislation in the favor of my business.
We currently have an election process that really requires our representative to pay allot of attention to organizations that have the resources to help them fund their very expensive campaigns. The influence of money in our system is both provable and obvious. Spend a little time at http://www.opensecrets.org/ and you will see this proof.
80 percent of US citizens say our government is run by a few big interests looking out for themselves..
http://www.worldpublicopinion.org/pipa/articles/governance_bt/461.php?lb=brusc&pnt=461&nid=&id=
I don’t think you could find one in 1000 people who think we should have no regulations on business. History is fairly clear on this. Where people can enhance their own self-interest, even if it is dangerous or damaging to the greater population, someone will certainly do it. From Love Canal to Bhopal to Lehman brothers it is simply a reality of humanity that we are easily corrupted when given the opportunity.
Our representative republic was invented as a counteracting force to corruption and greed. By giving a large portion of the population the free ability to choose their representative it was thought to insure that government would represent voters needs along with the needs of business and capital.
Our government has at its foundation the desire to see the most people benefited by it as is possible and inherent in that is the responsibility for balancing power/wealth with the needs of the majority of the citizens. The economic crisis we are facing now does represent a break down of democracy in the favor of corporatism and we as citizens need to speak loudly and often in defense of our ability to have our needs represented.
Jim; I think you should get in touch with Amnesty International about those Gulags you know of in Scandinavia and the rest of Europe I think they need to know.Hearing Tony nattering on long after his turn was up reminded just how much conservatives hate to lose and how poor they are at it.
I would say that all participants overlooked some fundamentals.
I would say that all participants overlooked some fundamentals. The capitalist system is premised on strong, healthy competition. Historically, the role (some would say the ONLY role) of government in a capitalist system is to insure this competition; hence anti-trust regulation. That role has been radically suppressed over the past 30 years.
So when one looks at the plethora of bailouts, one should ask, “How were these companies allowed to get ‘too big to fail’”. Clearly if they are too large to fail, then they are anti-competitive and should have been broken up long before they reached this point.
Similarly, with health care, the issue is lack of competition. When one is suffering from a health issue, rarely is there time shop among competitors, nor is there the necessary information for “consumers” to base decisions upon. The nature of health care results in it being dispensed by “local monopolies”. And there’s nothing wrong with that. Over a century ago, America came to the realization that many capital intensive enterprises require distributions through local monopolies – water, sewer, electricity, etc - and implemented various oversight mechanisms to regulate them within the American capitalism framework. It is time that healthcare – especially emergency hospital care – fell under this same umbrella.
On a different point – the credit crisis – the world is undergoing a massive deleveraging. Over the past ten years or so
Starting last March I began a series of blogs that explored fundamental questions such as "what is money, really?" These blogs continued through the summer examining what might be considered as a new kind of economic theory (in which energy flow is the critical currency) and control of that economy via distributed hierarchical systems (strategic, tactical and logistical, operational). A new kind of capitalism emerges from that analysis.
More importantly, capitalism as practiced in the US and a good part of the developed world is doomed anyway. All economic activity depends on the flow of high-grade energy. We are beginning to realize this. But few people realize that the peak of oil production occurred in 2005 and that we have been on a plateau ever since. Moreover, the energy return on energy invested (i.e., how much energy do you need to use up getting the energy used by the economy?) has been steadily declining since the 1970s. Therefore the net energy available to do useful work has been declining even while we were expanding oil production. But the diminishing returns have finally caught up with us. The current economic crisis can be fully explained by this phenomenon, The debt crisis exists because we always thought that we would continue producing more wealth in the future. But with the peaking of energy and the declining EROEI this will not be the case. We will be producing less wealth in the future. We've been borrowing against that future and now it will not come (don't think alternative energy production is going to replace oil anytime soon). The debt bubble had to burst and there is no way to pay back either the principal or the interest.
We are on the threshold of either a complete collapse of civilization or a transformation to a new economics and social contract. It will require new institutions and new thinking. It would be a good idea to start doing that thinking sooner rather than later.
Question Everything
George
I am guessing he gets health care from the Washington Times. It would be interesting to find out how many people get health care from their jobs are against universal health care.
Somebody should have brought up to Tony that we have one of the worst infant mortality rates in the world.
I would love it if they would at least pick up guests from the right to sit in whenever Ariana is away(which is about half the time) which would at least make it ideologically even from time to time. Of course I know that won't happen since this is NPR from California so the preference is for a leftist echo chamber so at least you tolerate Tony.
An open discussion about how we as a society want to continue is exactly what we need. I think we need to remove the pro-military-America-must-dominate-consumerist frame and look at allot of possibilities that are not currently being considered.
An open discussion about how we as a society want to continue is exactly what we need. I think we need to remove the pro-military-America-must-dominate-consumerist frame and look at allot of possibilities that are not currently being considered.
We are facing the dwindling of the abundant resources that have fueled all of the growth in the industrial and information ages (Most of the high tech industry is depended on exotic and rare metals and minerals that are in short supply see Coltan or REE). Deeply connected to the dwindling resources are the environmental changes that have taken us out of the Holocene and into the Anthroprocene. Human agriculture has been possible because of a particularly calm and consistent climate era. Science is telling us this is changing, probably dramatically.
We need an economic environment that encourages research and innovation in the areas that actually matter to human life. I don’t think the sort of crony capitalism that we have been living with is up to this challenge. The problem with capitalism and communism is the tendency for a few people to gain power and then spend all of their effort to maintain it regardless of the consequences to the population, from tobacco companies to the military industrial complex to Stalin isn’t this obvious?
We are spending way to much of the remains of the Holocene on warfare and cheap consumer goods, we need to be spending our resources on healthy food production efficient housing and manufacturing, and implementing real energy solutions instead of trying to ring the last dollar out of twentieth century solutions.
The only way I see this as happening is if we the people take control of our democracy again and make our voices clear to our representatives. In almost every way our government is stuck in a system that supports the wealth/power structure that exists, to the detriment of most of us. (Spend some time at this site, which makes this point clear) It is true that we have been trickled on and that has given us a historically lavish lifestyle here in the US and in Europe. Of course the rest of the Americas and Africa have mostly received warfare and poverty in payment for their resources.
We could build a new economics system based on the real needs of people, one that encourages everyone to have ideas and input. The problem with our competition above everything model is that people with great things to contribute, but without the desire or emotional framework for fierce competition end up pushed aside and forgotten. Isn’t it possible for us to set our egos down for a little while and make a system that can process ideas on their merit rather then on who is the most driven to succeed?Yes. And name the new company "American Motors Corp." or something like that. Then start a big marketing campaign: "buy American cars."
People forget that Adam Smith wrote his "Wealth of Nations" in response to a system of government whereby the King gave sweetheart contracts to his cronies, allowing his supporters to grow rich ripping off the common people.
This is EXACTLY what the Republicans have been doing with their no-bid contracts with the Halliburtons of the world, with their SUV loopholes, and their "privatization" of the military.
What liberals like me are calling for is an end to the crony contracts, an end to the Republican thumb on the scale, an end to the top-level corruption that has been the hallmark of the Reagan-Bush era.
To suggest that it is somehow "socialist" to call for regulating business to prevent trillion-dollar frauds and the redistribution of wealth from the working class to criminal defense contractors is simply dishonest.
The government that governs best governs least, but after decades of mafia style financial policy, how can any sane person say that there is not a NEED for increased regulation of banks, government contracts, insurance, and energy industries?
What liberals are calling for is LAW AND ORDER in the white collar sector. Of course the gangster Republicans, grown fat off of ripping the rest of us off will resist arrest, but arrest them we must, and jail them, we will!
What gets lost in this discussion is the fact that the Republicans have been advancing anti-competitive policies such as no-bid contracts for the likes of Halliburton, subsidies for big oil companies, and allowing huge corporations to operate from behind foreign shell companies and thereby dodge tax liability.
Meanwhile, small businesses and individuals are strangled by a myriad of complex laws.
In Los Angeles, a few people attempted to start a fuel oil co-op, only to find they must meet onerous licensing requirements to past muster with no fewer than three government agencies. They ultimately had to scrap their plans. All they wanted to do is store food-grade vegetable oil for use as fuel in passenger vehicle diesel engines!
Compare this to the folks who packaged and resold sub-prime mortgage debt, causing the current financial crisis. They were able to conduct business with absolutely ZERO regulation.
Liberals like me are only asking for parity. How about this for a summation: businesses and individuals should enjoy equal protection under the law, and that includes exposure to liability under government regulation.
If you call that "socialism", I call your grasp of economics "idiocy".
I do realize there is already a company called "American Motors Corp."
This program really showed the very ugly underbelly of Tony vision of civilization, or the ‘other’ (not his) class. It appears that the 'ideal' for America can be found in Charles Dickens descriptions of 19th century England’s harsh brand of laissez faire capitalism (think of Scrooge as the middle class, Bob Cratchit as Tony’s working class bloke). Maybe Tony really believed Margaret Thatcher when she said that that there was no middle class. The occurrence or sustainability of a middle class without the aid of government regulation (especially through progressive tax policy) is about as likely in pure capitalism as finding an armadillo sitting on top of a fence post.
The early versions of the game Monopoly (AKA landlord, finance, etc.) set out to demonstrate this ultimate result of unrestrained capitalism – one person ends up owning EVERYTHING. Markets don’t do fairness.
Your metaphor of Monopoly is a useful one and I often use a casino with the role of gambling odds and chance to demonstrate the same thing.
But one person doesn't end up owning everything in capitalism as the market for exchange breaks down long before that and we have a collapse in investment asset prices as those with all the investment funds are forced to chase yield at the same time demand is constrained and contracting. That's when the game of Monopoly ends and we start again.
I would have to disagree that a middle class is created by progressive tax policy - it's created by defending the rights of private property and opening up access to capital. In other words, by defending open competition and reducing barriers to entry. Vested capital interests use politics to erect these barriers and create rules that protect existing wealth from those who wish to get wealthy. Progressive taxation on incomes works to their advantage and against those who wish to climb the ladder. In other words, progressive taxation works just fine for Buffett, Gates, Soros, etc. but not so well for the smart young entrepreneur who wants to start a successful business that will employ others.
21st century capitalism will eventually move towards wider participation through ownership of a piece of it. This can only happen when laws and open competition protect that ownership right. Small shareholders take the brunt of this, but labor also owns nothing but its embodiment as a cost of production. It doesn't even avoid the risks that its fixed contracts imply (see UAW).
It's time to think outside the box and focus on all the "heads we win, tails you lose" distortions of true free-market democratic capitalism. The "government" is quite often on the wrong side of this battle.