Moon of Alabama Brecht quote
May 29, 2005

Social Welfare Models And a Revolution

There are political turmoils in France, hidden behind the dis-affirmation of the European constitution, and in Germany now open in the campaigns for the federal election.  In the United States the discussion about Social Security and about the election of judges, who are committed to a pre-Roosevelt state, are extensive.

All these arguments are results of economical problems in these developed countries a decade after three billion "new capitalists" in developing countries entered the global market place.

Central to the discussions, though sometimes hidden, is the role of the state in social welfare - defined as health care, education and unemployment and retirement safety. There are three models for the role of the state in these fields.

  • In the first model the state keeps mostly out of social welfare programs and lets them organizes privately within some regulations. Social welfare is restricted to emergency care and to prevent starvation and homelessness. It is payed for by taxes.

  • The second model describes societies where social welfare is organized by law, but is not financed by taxes. Employees and employers pay for mandatory health care, unemployment insurance and social security to dedicated system in capped percentages of individual wages.

  • 'All included' welfare states of the third kind finance welfare through taxes. Self employed and people living from capital gains do pay into the system via general taxes as anybody else does and are also entitled to social benefits through these systems like anybody else.
  • The first model can be found in a pure form in the United States before Roosevelt and will exist again if Bush II finishes his program. Such state will have the lowest state share of GDP (< 20%) and the biggest differences between rich and poor. Labor costs (Wal-Mart) and tax levels are already low. The second model is the the current Continental-European one, with a tax share of some 35% of GDP and medium difference between rich and poor. Taxes are modest, but labor costs are high as they include health insurance and social security costs. The third model is practiced in Scandinavia with a 50% state share of GDP and tax financed social welfare for all.

    With many developing states entering the global market place, the competitiveness of the developed states is in question. To erect a new factory global businesses are looking for law and order, low taxes on capital gains, low wage cost and a highly educated and healthy workforce.

    In a "race to the bottom" all developed states have lowered taxes on capital gains and by now diminished these as a factor of competitiveness. This leaves wage costs and work force quality as the main competition factor between developing and developed countries.

    The United States tries to solve the competition problem by privatizing more of education costs, social welfare cost and the associated risk, while at the same time pumping up consumption by lowering taxes. (Where social welfare is still part of labor contracts, companies are trying to cut it back through negotiations or do socialize the costs through chapter 11 procedures as United Airlines does now and GM and Ford will do next year.) This leads to a society with high, and growing, disparities and to huge state deficits.

    It is questionable if a nation with this model can keep its long-term competitiveness as the competition factors education, workforce health and social peace are degrading in such an environment.

    The Continental-European countries (France and Germany) have so far attempted to avoid any change. They still finance social welfare mostly through wage related payments. This leads to low competitiveness and high unemployment rates. As their social welfare systems are financed through wages, the payment to these systems have to be increased when unemployment is high, leading to even less competitive wage costs. This spiral is unsustainable.

    These states are now in huge political struggles about the right way to go. Neoliberal forces (and "the money") on the political right desires an "American model", lowering the level of social welfare and thereby its costs, while the left wants to stick to a general welfare state. Nobody wants to call for higher taxes. The center is paralyzed and everybody is avoiding a decision.

    The Scandinavian countries have, for now, solved the problem without diminishing their welfare state. They did lower their taxes on capital gains too, but they increased income and consumption taxes. The income taxes are highly progressive with the top rates around 56% and value added consumption taxes are up to 25%.

    The distance between the poorest and the richest groups is very low compared to the U.S. and lower than in Continental-Europe. If you want to earn, and keep, millions per year as CEO, it is probably not the place to be. At the same time your children and you, like everyone, are entitled to very good free health care and a free and excellent education systems. As wage costs do not include welfare costs these states are internationally competitive. The Scandinavian countries do have low unemployment rates and balanced budgets. Their model is, for now, sustainable.

    Personally (I live in Germany), I would have to pay higher taxes in a Scandinavian like environment. But for these I would receive more security and a peaceful social environment - my personal preference. So my hope is for the France and Germany elites to see the advantages of the Scandinavian model and to steer their countries and Europe into that direction. My petition is: Please change the wage financed social systems into tax financed and increase income and consumption taxes to balance the budget. If promise to do this, you will get my support and my vote.

    For the United States a Scandinavian like model would be a revolution like the New Deal was around 1935. Revolutions only come, when the failure of the society and its leading elites are highly visible. Like in the early 1930s America is well on the path for the huge failures of recent political choices to become obvious to everyone. Thereafter comes the revolution.

    Posted by b on May 29, 2005 at 04:11 PM | Permalink

    Comments

    There are other aspects to the model which are generally overlooked. For example, I don't see why there should be a required correlation between the level of social security and how difficult it is to discharge an employee or to incorporate or to get various business permits. My impression is that the most serious impediment to economic growth in Europe is not salaries/taxes at all, but cumbersome state bureaucracies and the ill effects of state subsidized mega-corporations.

    Posted by: citizen k | May 29, 2005 6:01:45 PM | 1

    Your numbers are off. The 20% number for the US is only for federal taxation (and that is actually high - 18% is the number I've seen cited lately); state and local governments add another 11%. Other numbers are: UK - 38%, DE - 39%, FR - 45%, SE - 52%. For DE, FR, and US you have to add 3-4% to get expenditures, since those countries are running (big) budget deficits these days.

    Posted by: Tom DC/VA | May 29, 2005 6:03:13 PM | 2

    The bind that the European countries find themselves in is characterised by the EU referendum in France. A 'mixed' economy; that is one where a sizeable chunk of GDP is diverted to the benefit of citizens by way of education health and welfare, cannot hope to compete on the allegedly level playing field which the abolition of tarifs and duties creates. The inevitable result is that mixed economies will lose the bulk of their safety nets, but I wonder if anyone is really prepared for the next stage.
    Democracies are hopelessly inefficient places to run a business since corporations are continuously having to deal with whining nimby's, environmentalists, unions and health and safety experts. Obviously if the western economies want to compete against China long term they will have to develop the same sort of repressive regimes. Are you ready for that? It's coming, just take a look at BushCo's roughshod treatment of the constitutional guarantees most US citizens took for granted.

    But we haven't got there by accident neither is it as the French like to term it some sort of Anglo-Saxon disease. Many of the developed countries which have the most free market policies were originally 'leaders' in social safety nets. I live in one such country which used to pride itself on being the first country to give women the vote, introduce an age pension and have state funded free health care. Now it has less safety nets than the UK. The true irony is that these changes weren't made by some neo-conservative crooked right wingers. The bulk of these changes were introduced by the Labour Party which had always been the biggest supporter of social welfare policies.
    A conservative party would never have been able to turn the clock back like this but when the 'leftish' party does the people have nowhere to go. Ultimately they become disillusioned and vote for the right wing parties who then finish the job off with a vengeance. Unfortunately this is what will probably happen in Europe. The French will elect a leftist government that will push through 'reforms' that the conservatives would never get away with and in Germany voters angered by what the social democrats have done will elect the christian democrat party that will be even worse.

    How does this happen? It's our fault really. We became complacent and let the the sleek careerist types take over our trade unions and then our leftist parties. Politics is essentially boring when everything appears to be going OK and normal people stay away from them. That means that the main chancers and greedheads infiltrate the system.
    Most of us saw that protectionism was contributing to misery in the developing world but we were probably thinking of Africa, Latin America and India when we wanted developing countries to get fair access. The greedheads weren't though and as soon as some western countries deregulated it wasn't difficult to create scenarios where developed counties would end up between a rock and a hard place if they didn't 'reform' . Unemployment is a major issue in Europe and the US and people are prepared to sacrifice a great deal if it means their children will be able to work and belong to the economy. But if you asked them they probably wouldn't rate employment so highly if they knew that many of the employed people in a reformed economy will be substantially worse off than unemployed in an unreformed economy.
    The choice is never quite that stark plus of course some people do get better off under a new economy, just not many of em, so a great number of voters think that 'It can't happen to me" and take a chance that it will be the neighbors kids who are going to end up working on call for the minimum wage.

    Until people start caring about their neighbors again we will be played off against each other and fall further into a world of dog eat dog and despair.

    Posted by: Debs is dead | May 29, 2005 6:12:19 PM | 3

    @Tom - you are right - my numbers are quite "general" and in all cases are rounded federal numbers. This was to make the point and therefore I tried to keep the wording vague. Maybe that's bad rhetoric - sorry.

    On the deficit addition. Deficits that do finance investments are not bad, if the investment over time pays off the interest and principal. I would argue that Germany still is investing into the east german infrastructure on a rate higher than three percent and that this may pay off, while the US is 'investing' into conquering Iraq and this will most probably not pay off.

    Thanks for your comment - this piece is dearly to me.

    Posted by: b | May 29, 2005 6:41:05 PM | 4

    great post, bernhard! i also agree with the scandinavian model.

    Posted by: lenin's ghost | May 29, 2005 6:54:29 PM | 5

    "A conservative party would never have been able to turn the clock back like this but when the 'leftish' party does the people have nowhere to go. Ultimately they become disillusioned and vote for the right wing parties who then finish the job off with a vengeance"
    Debs: indeed, and I'm mightily pissed off by all this. If people had some senses, they'd vote for an ever leftier party, and if everything else fails, there's the classical eons-old option, that Jefferson mentioned, watering the tree of liberty with the blood of tyrants, or basically taking torches and pitchforks and terminating the entire politicians and billionaires classes. By looking at the French now, you'd think they actually shot Chirac and that some marixst-leninist Commune has effectively taken over Paris. Since they're as far from this as they were 2 weeks ago, they're in for a major hangover in the next weeks and months.
    Oh, and Chirac is an absolute moron for not using the single one argument that would have embarassed the hard-core leftists, which is "George Bush wants to see the EU Constitution fail".

    Posted by: CluelessJoe | May 29, 2005 7:33:36 PM | 6

    I still think the "oui" faction should have marketed a "the global economy calls for downsizing the governing class" and advocating a massive firing of unneeded top level government bureaucrats.

    They should have also put up posters of bush in the flight suit saying "The world only needs ONE superpower, vote non or else."

    Posted by: citizen k | May 29, 2005 7:49:31 PM | 7

    b - it is inportant to include the state and local numbers, especially in the US because the US states provide a significant amount of the country's social services. It is also important to note that while US federal taxation has been declining over the past 4 years, state and local taxation has been increasing. Without using total taxation you are making an apples to oranges comparison. No economist uses only federal numbers when making international comparisons.

    I think there is some danger in citing the "Scandinavian Model" as a blueprint for other countries. Those 4 countries are homogenous internally (Finland somewhat less so), and they all score very high on measures of trust and anti-corruption. They are also small and probably perceive themselves as outsiders who have to work smarter than the larger countries. I think that to apply the Scandinavian model elsewhere, one would also have to instill their values into the receiving country's population. While this might be relatively easy in Bavaria, it would probably be very hard in Sicily, at least in the near future.

    Posted by: Tom DC/VA | May 29, 2005 8:47:01 PM | 8

    If I were living in France I suspect I would vote non even if it were what BushCo wants, which in the long run it isn't. Essentially this is the French saying "A plague on all your houses" somewhat pointless but neccessary for the soul. There will be no mass uprising anywhere in the developed world until people get so gutted that they realise 'united we stand divided we fall' at a visceral level. In someways the 20th century Power of the ordinary man arose from arrogance and hubris of governments that used conscription to treat their citizens as cannon fodder. The conscripts were taught first hand that if they work together they can overcome any obstacle particularly if that obstacle is reinforced by greed. Greed is a relatively weak motivator in comparison to survival or even ideals. Maybe the current crop of legislators in the US have forgotten this but you can be sure the smarties that pay them won't have so I believe it is unlikely we will see true conscription of the masses anytime soon.
    Nothing much will change until ordinary people understand they have more in common with each other than they do with their leaders. In WW1 men who had been trying to kill each other for months climbed out of their trenches at Xmas and Germans shook hands with Frenchmen and Brits, whilst in Turkey, Muslim Turks shook hands with Aussies, Kiwis, Canadians and Brits and swapped tobacco. After that the ruling classes in all of these countries were gone because the soldiers recognised the common humanity in each other. They went home and in most cases they forced the changes to their society that our current mob of overpaid corrupt and hubris sodden legislators are repealing.

    Posted by: Debs is dead | May 29, 2005 9:19:37 PM | 9

    why does that not work now***could it be that there are some mindcontrol programs at work in USA?

    Posted by: rapt | May 29, 2005 9:45:36 PM | 10

    b have you instituted a program here to delete any text containing fword? post went poof and it is not appreciated

    Posted by: rapt | May 29, 2005 9:48:34 PM | 11

    Reminded me of Ashcroft

    Posted by: rapt | May 29, 2005 9:50:24 PM | 12

    I believe the actual gdp taken in taxes in the US (feds) is 16% and it is now the lowest since the 1950s.

    Some states are raising taxes, but mostly the states are raising fees and getting revenue through law inforcement. You know, drunk driving, click it or ticket type shit. Thats how states are funding police and courts.

    The rethug state legislatures are screwing the states up also. Michigan is a mess. Former gov John Engler screwed it up bad and term limited rethug legislatures are a joke. It is pure politics just like DC with no intent to help the masses. They have no institutional memory and kick out shitloads of bad legislation.

    Also b, I do like the Scandy model, but I would take the French or German.

    Posted by: jdp | May 30, 2005 12:03:12 AM | 13

    When ppl talk in GDP's and statistics they are using the language of the oppressor. Economics is not and can never be a science in the way that maths or physics is as it is a totally subjective construct used by the powerful and power hungry to justify their ends. As soon a particular statistic; be it unemployment or inflation or numbers of one legged dwarf transvestites in after school daycare, becomes an indicator for decision making that statistic has lost both its relevance and its objectivity.
    The first thing that any project manager who has been assigned the task of 'fixing the problem' that the statistic indicates, will do is 'check' that statistic's collection and collation. In other words the ground rules will be changed to ensure that as positive an outcome as possible is reflected in future numbers. On the rare occasions where this is not possible our esteemed leaders will inform us that this statistic is now irrelevant, for whatever reason. I'm sure many others here have had similar experiences to mine working in large organisations be they government bodies, corporations or even international agencies (the OECD is my favorite they are master of this BS) where statistics are the lifeblood of the daily deceptions we get paid to practise. Have a look at Mazlow's hierachy of needs and you'll see that the really important things that human beings live for cannot be accurately measured quantitatively. Qualitative issues are generally more valued by humans but since economists can't measure this (not for want of trying either) they ignore this part of the human psyche. This leads us to the Non vote in France where all the pundits are nonplussed by the result and accuse the electorate of a lack of rationality when it is these so called experts lack of cognitive ability which has lead them to believe they can convince everyone to vote for a pig in a poke.

    Posted by: Debs is dead | May 30, 2005 1:07:09 AM | 14

    I now live in France but obviously can't vote here.

    I wasn't familiar enough with the issues to have a strong opinion either way; I felt sympathetic to the oui mostly because I see the EU as an anti-US counterweight.

    One thing I did get out of the campaign is that France appears to have the most whining, spoiled brattish Left I've ever seen.

    Almost makes me miss the Democrats.

    Posted by: Lupin | May 30, 2005 1:55:56 AM | 15

    Debs...I am with you.
    Quote:
    I wonder if anyone is really prepared for the next stage.
    ***
    I don't know what the next stage is going to be but I feel strongly it's not going to be funny at all.
    Logic tells me so and history comes to mind. I am not happy to leave this kind of "state of the affairs" to my children and grandchildren...not really.
    Even if they are to get rich and benefit in this "new order"...I don't want them to live in “ third world country” alike with bodyguards and all kinds of security systems and armed cars and fear for their lives daily because of course all those “losers” will come for their piece anyway...and my children don't want it too...maybe cause they are still young haha
    Having lived all my young life in “communist” system that I hated and having experienced during Milosevic’s years “ first accumulation of capital (previously state owned wealth) in few hands” I really never wanted to be one of the “few” bloody rich.
    Lot of them of course lost their lives in mafia alike battles. I even felt very bad to be better of then most of the others who had straggled to survive in 1993. I couldn’t find anything to be proud of in that situation. I had to leave Serbia cause that new situation wasn’t what I wanted to live or what I wanted for my children.
    And now this…

    Posted by: vbo | May 30, 2005 2:10:47 AM | 16

    Actually, Germany always was quite competitive in export markets. After several rounds of reform Germany is now in an excellent position with respect to exports. Its share of world export is far above its share of world population, it usually has a trade surplus with China. Exporting companies are profitable. Talk about lack of German national competitiveness is yesterday's discussion.

    The main issue in Germany nowadays is internal demand, though a lot of politicians and journalists haven't noticed yet.

    The most efficient way to boost demand would be financial support to those people most likely to spend it, the poorer wage earners, the jobless and their families.

    Posted by: khr | May 30, 2005 3:08:00 AM | 17

    A lot of the calls for "reform" seem to come from the ideological free-marketers that control the op-ed pages in the business press. However, they hold it an article of faith that this "reform" is a good thing and don't justify it.

    Unfortunately, I didn't get the memo on this one, and my economic readings are insufficient to explain to me why in fuck their little laissez-faire fantasy would be a good idea. I assume that my lack of understanding is due to excessive readings of commies like Galbraith, Smith and Heilbroner, not to mention that little regarded economic thinker Marx. Does anyone know who the prophet of laissez-faire is?

    Posted by: Colman | May 30, 2005 3:15:22 AM | 18

    Rapt: not a problem for me.

    Posted by: Colman | May 30, 2005 3:16:10 AM | 19

    The ECB reports that German wages are too flexible(!) giving Germany an advantage over Spain and some other European countries:
    http://www.fr-aktuell.de/ressorts/wirtschaft_und_boerse/wirtschaft/?cnt=682270&

    Posted by: khr | May 30, 2005 3:27:01 AM | 20

    When ppl talk in GDP's and statistics they are using the language of the oppressor.
    Certainly GDP is a pretty crappy measure, but the all statistics is nonsense line is defeatist rubbish.
    Economics is not and can never be a science in the way that maths or physics is as it is a totally subjective construct used by the powerful and power hungry to justify their ends.
    As are philosophy and religion. And science if you do it right. Economics can study how systems will work: how you set them up is your problem. As a case in point: economics shows that laissez-faire capitalism is pretty much guaranteed to concentrate wealth in the hands of a small number of people. If you don't want that to happen, don't choose laissez-faire capitalism as the way you organise your society. The misuse of economics, and its poor current state of development is not an indictment of economics, it's an indictment of bad economics.
    As soon a particular statistic; be it unemployment or inflation or numbers of one legged dwarf transvestites in after school daycare, becomes an indicator for decision making that statistic has lost both its relevance and its objectivity.
    You're right: life span, birth survival rates, hours worked, educational attainment, all these things are irrelevant once they're measured.

    Your attack on economics is equivalent to attacking all philosophy because you know that Ayn Rand was a hack justifying the abuses of the US establishment.

    We're really bad at economics still, though I think we're getting better and I think that when it washes out laissez-faire will be generally held to be a stupid way of setting up an economy. It goes against our basic instincts and has (I think) to be dishonestly justified in terms of them. Notice the form of the American Dream: being filthy rich is ok in the US because anyone can become filthy rich there. The fantasy of equal opportunity is used to undermine the normal, instinctual, universal primate reaction against unfairness.

    Posted by: Colman | May 30, 2005 3:32:08 AM | 21

    @Coleman - Does anyone know who the prophet of laissez-faire is? - von Mises, Rothbard and a misunderstood Hayek.

    My take: Excellent economic models but with the wrong conclusions derived from them. Also misinterpretated by most neo-lib forces.

    Posted by: b | May 30, 2005 3:33:48 AM | 22

    khr, there is a sustained attack against the European model. I think that it is because that model must not be seen to work. If it does, how does one justify the destruction wrought on society by the right-wing revolutions? The right and the libertarians encourage the crime and social breakdown that they constantly whine about. If you tell a young poor man in the disadvantaged suburbs who has watched his mother struggle just to feed him and his siblings for the last fifteen years that he is responsible for himself, that society has no obligation to help him, that his being unable to get a job is his fault, that he is a waster, what the fuck do you think he is going to do? Preach a policy of might makes right, every man for himself, what you can take is yours and you will get exactly the increases in crime and alienation that we get.

    If you benefited from the Thatcher and Reagan programs you need some way to avoid taking responsibility for the consequences. Pretending that the alternative models can't work seems like a good one.

    Posted by: Colman | May 30, 2005 3:41:34 AM | 23

    b, rather like Adam "we need the capitalists, but don't trust the thieving buggers an inch" Smith?

    Posted by: Colman | May 30, 2005 3:43:10 AM | 24

    So do you suppose the campaign against the EU in France had covert CIA backing similar to what went on in the Ukraine last fall?

    Posted by: kelley b. | May 30, 2005 7:09:00 AM | 25

    @Colman you miss the point entirely, it is not the statistics like birth rate that become meaningless but the interpretation put on them by economists that makes them irrelevant. Lets take birth rate. What should be a simple enough statistic on it's own it means nothing apart from x children were born in a particular time and in a particular place. Once 'interpreted' by an economist that statistic will be used a part of the measure of the health of a society. Usually (but not always) a high birthrate will signify that an economy is successful. People are reproducing in greater numbers than they are dying so by definition the market is growing and the economy is 'expanding'. Politicians start watching the birthrate to use it as indicator of both the immediate health of the economy and its future development. The gatherers of statistics who learn very quickly that in a modern democracy the messenger gets shot, therefore do everything they can to make sure that statistic stays up. The first thing they will do is trawl through their systems and ensure that no births are being missed. They will find hospitals that haven't been entering data in correctly and they will find a statistician that will estimate the percentage of unreported births likely in a society similar to theirs and then factor that in. If there is a statistic for over reported births or a percentage of double counted births that won't be factored in as no one wants to shoot themselves in the foot! The next year even if nothing has actually happened to increase the birthrate it will have had a statistical increase. Now the bureaucrats have the breathing room to really do the job. They convince their masters that more people would have children if it weren't so expensive. The state subsidizes the cost of childbirth and as a result a few more people do have children but more importantly lots of expectant mothers from the economy next door come into this economy to give birth cause its cheaper. True they take the bulk of the kids out again afterwards but thats a win win situation. The first economy gets its increased birthrate without the full infrastructure costs of education and welfare. The second economy benefits by getting its child birth costs subsidised by economy one. The only losers are the mugs in economy one who are paying for this and getting no real benefit but what the hell they'll never work it out.
    I have seen this sort of scam time and time again with all sorts of statistics in all sorts of economic systems. It isn't bad economics its the nature of economics and the danger of trying to express qualitative matters as a quantity.
    I believe the last nobel prize winner in economics (or maybe a scientist winner whose theories were much prized by economicists) won for a theory that said you only have a recession if enough people believe you are having a recession. In other words its all BS just lie and spin and apply all that mass psychology to the fools. Another way of saying the emperor has no clothes.

    Posted by: Debs is dead | May 30, 2005 7:10:26 AM | 26

    TUC attacks working hours 'myths'.

    The TUC also argues that excessive hours undermine economic performance. Despite working longer than most other EU members, Britain ranks only tenth in terms of productivity per hour.

    Posted by: Colman | May 30, 2005 7:14:39 AM | 27

    DiD, that is just an example of bad economics. If your point is that all economics is bad, then I have not missed the point at all: you are simply saying that all biology is bad because people often abuse the methods and results of biology.

    Economic ideology is dangerously silly. Applying simple economic models to complex real world problems is dangerously silly if you don't allow for the errors introduced. Arguing that all economics is an evil plot because politicians are dangerously silly is not a good argument.

    The problem with the sort of economics you're talking about is that they don't even try to deal with the qualitative issues. They ignore them in favour of the easily measured.

    Posted by: Colman | May 30, 2005 7:22:31 AM | 28

    Laissez Faire Prophets: Milton Friedman / The Chicago Boys / Pinochet / Regan / Maggie Thatcher would be my timeline

    Greg Palast is an interesting Journalist to read on all this as he studied undercover for a period with the chicago boys - see 'the best democracy money can buy' second edition.

    Amazing Book.

    Posted by: drunk as a rule | May 30, 2005 8:19:47 AM | 29

    Kelley B: That's actualy what I've been wondering since a long time.
    I have no doubt that many of the anti-EU leaders and parties throughout Europe are actively helped when not funded by the US. Now, it would be kind of funny to check if some alleged hard-core leftists aren't really working for "the enemy". I would be delighted to see a human scum like Fabius - basically a guy who should be in jail right now instead of parading on TV shows - being exposed as such a traitor.
    Let's not forget that many hard left movements, including terrorist ones, were manipulated by the CIA throughout the 70s, notably in Italy, where both the right-wing terrorists behind the Bologna station bombing and the goons from the Red Brigade were both pawns, puppets, the goal being that Italy should be kept in unstability to crush any hope of aving a loosely leftwing alliance ever winning an election.

    Posted by: Clueless Joe | May 30, 2005 8:31:13 AM | 30

    From the review of Friedman's "Capitalism and Freedom".

    This is a new edition of Milton Friedman's classic 1962 capitalist manifesto. As such, it was ignored, spurned and hated for decades by the intellectual, post-Keynesian establishment.
    How do people this stupid manage to live? What in hell does this guy think intellectual means? How could Friedman be anything but an intellectual? Did he hate himself?

    Posted by: Colman | May 30, 2005 8:39:37 AM | 31

    There were certainly mutterings about some of the anti-EU parties here in earlier referendums, and one of the anti-treaty parties this time will be Sinn Fein, which is strongly backed by US interests. When they're not robbing banks of course.

    Posted by: Colman | May 30, 2005 9:10:16 AM | 32

    @ kelly b.

    If you want to know how to beat a regime that controls the mass media, the judges, the courts, the security apparatus and the voting stations, the young Belgrade activists are for hire.

    I think this is just what we need. I would like to know how to contact those folks.

    Posted by: dan of steele | May 30, 2005 9:18:16 AM | 33

    Chirac must resign

    Please pass that link on and ask your French friends to support it.

    Posted by: Jérôme | May 30, 2005 9:20:31 AM | 34

    Dam colman, your on a roll here.

    I still go back to my old model of "elite theory" for all current policies. We have government in the US by rhe elite, for the elite, to protect the elite and preserve elite capital.

    All fiscal decisions and current law, ie tort reform, medical malpractice, asbestos legislation is all for the elite to protect themselves against the masses. Bill Frist father ad family own one the largest hosipital corps in the US. You best believe hes protecting the inheritance.

    We must get back to a FDR model of social safety net and fairness.

    Posted by: jdp | May 30, 2005 9:23:43 AM | 35

    I still go back to my old model of "elite theory" for all current policies. We have government in the US by rhe elite, for the elite, to protect the elite and preserve elite capital.
    I won't disagree with you about the US at this time. However, I think there is an extra element you're forgetting: many of the people who push against the more socialist models also need to see other people being poor to feel good about being rich.

    The difference between a champagne socialist (like me!) and the Republican-type crowd is that we want everyone to be able to afford champagne if they want, whereas they only like the taste of champagne because other people can't afford it. They need the downtrodden to feel good about themselves.

    We must get back to a FDR model of social safety net and fairness.
    Ironically, they'd probably do better under that model in the long term, but they lack any sense of the long term.

    Posted by: Colman | May 30, 2005 9:40:09 AM | 36

    Lupin: One thing I did get out of the campaign is that France appears to have the most whining, spoiled brattish Left I've ever seen.

    They remind me of Nader voters in the US.

    Posted by: citizen k | May 30, 2005 11:06:27 AM | 37

    Friedman is an illustration of the rule that you don't have to be smart to be an intellectual. Hayek, on the other hand, was smart if unbearably shallow. His brilliance was in his writing style which conveys an impression of rebellion against stodgy and fallacious orthodoxy, while moving fast enough to disguise its total lack of any substance other than than malice.

    Some critic pointed out once that Hayek saw the Cheka as an inevitable result of a community day care center. Of course, he didn't really have qualms about secret police in general. Torture in the name of economic freedom is easy to bear - from Chicago.

    Posted by: citizen k | May 30, 2005 11:16:11 AM | 38

    Why have social democratic institutions become so easy to target for resentment? I'm reassessing my dismissal of Al Gore's government "reinvention". Part of what makes people susceptible to rightist propaganda is that in daily life the paternalism, authoritarianism, and cumbersome machinery of the state is a constant irritant. Furthermore, the lack of transparency (that poor misused word) which protects bureaucrats from oversight also protects the citizenry from knowledge of tradeoffs. Certainly in the US the public has lost all sense that someone has to be paid to fix streets, build bridges, and teach schools. They think this all falls from the sky.

    Posted by: citizen k | May 30, 2005 11:23:11 AM | 39

    I would have voted no on the EU constitution if I was French. Can you imagine the poison pills contained in an 400+ page constitution? Yikes! Even the World Socialist Website said to vote no on the constitution.

    The French may not like me as an American, but I admire their stubborness and willingness to stand up for themselves.

    Posted by: la | May 30, 2005 11:53:51 AM | 40

    The "crisis of legitimation" account for declining respect for the welfare state says, in part, elites have a diminishing need for domestic social institutions because the globalization of capital less and less requires of the state the kinds of social spending needed to sustain a competitive workforce at home. Hence, the ideological justifications for dismantling the welfare state include the rhetoric of the state as jejune nanny and "irritant" to the "people." Deregulation of the Great Society programs during the Carter years began the first attack on welfare statism. The second attack, culminating w/ the Contract for America, aimed for the New Deal.

    The justifications offered for privatization, liberalizatin, etc. are largely ideological.

    Posted by: slothrop | May 30, 2005 12:13:27 PM | 41

    Random thoughts:

    Yes, the Left often reminded me of Naderites.

    French % of participation shames Americans. Shame shame shame.

    The most intelligent campaign I ever saw. Short, clever before/after spots on FR3, good debates, intelligent ads (as opposed to moronic miseading soundbites in the US) I wish we had campaigns like this in the US.

    Fuck a narrow interpretation of the 1st Amendment; we should force the networks to surrencer control of our airwaves, ban paid ads and instead replace them with that kind of coverage.

    I'm not sure if the French voted "right" but the process was a sterling example of what true Democracy should be.

    Shame on the US of A.

    Posted by: Lupin | May 30, 2005 1:34:52 PM | 42

    Slothrop: Just because the right makes up something doesn't mean it is false. The "social democrats" have lead us to this stage because they have cast citizens as mass consumers of government, not as participants or stakeholders of any sort. I have dealt with both US and French bureaucracies and although I have had good experiences, they are generally efficient generators of resentment. The success of Chirac La Pen and Bush depends a great deal on mobilizing this resentment. Arguments that we need more government are going to stumble here unless the left can generate a more compelling view of how government should operate. Unfortunately, that will mean many comfortable sinecures will be endangered and that is unpalatable to many of our established social democrats on both sides of the Atlantic.

    Posted by: citizen k | May 30, 2005 2:56:23 PM | 43

    Just because the right makes up something doesn't mean it is false.
    No, though it's a pretty good starting position.
    The "social democrats" have lead us to this stage because they have cast citizens as mass consumers of government, not as participants or stakeholders of any sort.
    I know there's several things wrong with that statement, but I'm not sure I can articulate them. It's late. I'm not convinced it's the social democrats doing the casting. Casting people as consumers isn't really their thing.
    Unfortunately, that will mean many comfortable sinecures will be endangered and that is unpalatable to many of our established social democrats on both sides of the Atlantic.
    Now this I can agree with.

    Posted by: Colman | May 30, 2005 3:28:17 PM | 44

    The "crisis of legitimation" account for declining respect for the welfare state says, in part, elites have a diminishing need for domestic social institutions because the globalization of capital less and less requires of the state the kinds of social spending needed to sustain a competitive workforce at home.
    First, I'm worried that I more or less know what you're saying here, and I'm doubly worried that I almost agree with you. Say instead that the free-marketers believe that they don't require a competitive workforce at home and I'll go with it. I think they're wrong.

    Posted by: Colman | May 30, 2005 3:32:40 PM | 45

    I disagree "social democracy" ever pointed to a future in any way inimical to monopoly capitalism. The alternative history of welfare statism, beginning with Bismarck, demonstrates how the welfare state was (and is decreasingly) crucial to concentrated accumulation. Offe, Habermas, O'Connor and many others have explained this history. An excellent study: Berkowitz, Edward; McQuaid, Kim (1988). Creating the Welfare State: The Political Economy of Twentieth-Century Reform. 2nd. ed. New York: Praeger.

    In any case, what is first needed is to critically unravel the discourse of "big government" so people know government is no weird reification arising to fetter the interests of business and citizens alike; rather, people need to understand how government has consistently been utilized by elites in the interests of accumulation rather than the distribution of resources to the "people." In a cruder, but necessary formulation, people need to be persiastently reminded the government is not of/by people, but corporations.

    Posted by: slothrop | May 30, 2005 3:36:16 PM | 46

    The free marketers have a truly Marie Antoinette level understanding of how the economy works. They laid the groundwork for the current Donald Trump theory that all economic growth emanates from white guys in suits striding around and demanding results and Wall Streets theory that finance is the engine of production. That's why they have contempt for science and infrastructure and so on. Slothrop probably thinks that they are right: the economic system allows finance to simply push all those costs down below their level. I think that they are making the same mistake that rentiers have made throughout history and that Wall Street will get run over by India and China assuming we don't have an environmental catastrophe first.

    Slothrop - the intentions of Bismark and friends ran into the intentions of Jaures and Debs and Reuther and the result is not clearly in service of one or the other. The puppet masters pull the strings, but the puppets don't always obey.

    Posted by: citizen k | May 30, 2005 4:14:03 PM | 47

    Damn living in a different time zone than the rest of the world makes discussion difficult. It's sparrow fart here. If I have demonstrated bad economics Colman perhaps you you enlighten with an example of good economics. I know none. The Keynsian model did eventually come apart. All economic theories imply some sort of central planning that reduces everyone to the lowest common denominator and drags decision making away from the communities effected by the decision into the orbit of some preening egocentric.

    Posted by: Debs is dead | May 30, 2005 4:21:00 PM | 48

    The social invention of corporations is critical to understanding and improving the world, but the idea that corporations have replaced people is exactly the type of insanity that stymies progress. I know some who have interlocking corporations, and I gaaaranteeee that the person runs the show, not the corporation.

    But corporate reality 101 remains: corporations are fictitious persons. Real persons retain corporate enhanced power, and suck up the increased harvest, but with less transperancy, no liability, and precious little accountability. Saying the corporations are the problem is the suckers' play.

    Posted by: razor | May 30, 2005 4:30:43 PM | 49

    Damn living in a different time zone than the rest of the world makes discussion difficult
    Yes it does. You end up issuing challenges to people who have no brain function whatsoever left.
    If I have demonstrated bad economics Colman perhaps you you enlighten with an example of good economics.
    Can't think of any right now: they'd involve increasing my supply of sleep. However, good economics would include a large disclaimer about why the model being used was wrong, how wrong it was, what aspects of real life weren't being included, and how to take them into account.
    All economic theories imply some sort of central planning that reduces everyone to the lowest common denominator and drags decision making away from the communities effected by the decision into the orbit of some preening egocentric.
    Except, in theory, those of the extreme free-marketers. Did you really mean to say central planning there?

    Posted by: Colman | May 30, 2005 4:40:56 PM | 50

    I'm with razor.
    The problem with corporations is that they are human entities with limited accountability. Little absolute monarchs.
    The solution is to democratise the corporation, in particular its board of directors into a body appointed by society and not management.
    Getting there is a 500 year project, but one that flows most naturally from the West's political heritage. The biggest problem is that it demands that citizens become more active in running themselves. This would be a cultural change away from consumerism to politics.


    Posted by: Scott McArthur | May 30, 2005 4:55:06 PM | 51

    Lookit. It's always easy to say things are complicated. Shit. With respect to the benefits of the welfare state for monopoly capitalism, the history is replete w/ ex.: from the 1886 SC decision granting corporations 14th Am. protection to corporate signoff on Wallace's New Deal, to the Lochner decision to the Great Society rollback, etc. It's a matter of public record. Even razor can read the history, I think.

    Posted by: slothrop | May 30, 2005 5:01:49 PM | 52

    The problem is not corporations. There's nothing wrong with corporations that couldn't be fixed by making directors of corporations accountable for illegal acts of the corporation. The problem is simple: one law for the rich, one for the poor. You think that if Mom and Pop down the street have a little corporation they can get away with anything? Not a hope. If they're rich enough they can be convicted repeatedly of all sorts of crimes and not pay any penalty. That's the problem.

    Well, that and the silly American interpretation of legal personhood.

    Posted by: Colman | May 30, 2005 5:05:22 PM | 53

    for myself. i feel a deep melancholy about all the models. sometimes i think we are not a fit species for any other species to live with. we are like hud(the paul newman character) in martin ritt's film of the same name

    the politcal leaderships are either incomptent or corrupt. their leaders included the much sainted vaclav havel are so self involved & mythomaniac as to be worthless men at the end of the day

    nelson mandela is the only figure in 20th century history who posessed a higher morality & he can do fuck all with the mess that is south africa

    che guevara as a working economist would have been an interesting figure from what we can read from the small amount of his economic writings & speeches

    social democrats are ironically enough what stalin presumed them to be. in our age - there is little fundamental difference between the elected members of the elites. when there exists a man or woman of substance - & yes they exist - they are soon isolated & marginalised from the primary discourse & they are incapable of changing the terrible thrusts of history

    we in the west have lived well precisely because those in the 'undeveloped' countries suffer. that has always been the axis of evil & reamains so. what has happened in our time is that a sizeable populations in the nation states essentially also live in the third world. existing as they do without any real equality of opportunity. & the situation worsens & worsens at a rate that is frightening in its velocity

    i see the results of the velocity in my work everyday & it is clearly worsening

    what america has brough to the table recently is illegality & immorality at a level unparalled in recent history except for that moment of nazi germany. in the post war period so many countries have been vilated & violated at a level it is hard to imagine a return to anything normal. latin america at the moemnt seems to be giving it a try & i hope for her & her people but the psychosis of the american empire worries me intensely about developments there & whether they can be sustained without destabilisation occurring again

    here in europe - the nature of the permanant poor - of an underclass that is growing each decade has not been confronted. it seems that some people do not matter. it seems they do not matter at all

    whole swathes of europe including britain have enormous underclasses. underclasses that as in america - do not ever feature in the public face of the country. because they do not 'succeed' - they do not exist

    & this cruelty - is as citizen k clear in leopolds pathological hatred & neglect in the congo but we can say he was buffoon & madman who had a unique possibility to articulate his madness

    what becomes unliveable - becomes impossible - is in the first world war - the slaughterhouse - which elites create to reduce their populations. to reduce generation after generation of hope;

    nazi germany became the model of what can people live with & it seems they can live with a great deal. a population 'protected' & in fear will permit - an'other' to be extinguished & they came so close to doing it - we must always remember that - then they were able to declare what was essentially a race war against the slavic people - that was a war of anhilation. in this moment men became monsters

    & instead of turning away from that abyss after the war we have reproduced it. all wars have been race wars. they have all been wars of anhilation. man does not worry if millions of people die - because they have since 1945 - many millions but because they are black, brown yellow or red - they have not touched the moral core of nations

    then those nations have to target people within their borders. this they do with neglect. & yes the right does not possess a monompoly on that neglect. the left in the west has either turned its head or lost itself in endless circles unable to fight back in a meaningful way

    again i would use australia - what has happened in that country in the last ten years ought to be cause of national shame but the contrary is the truth - they are proud of their indecency & relect & reelect the same cruel & incompetent leaderships

    in truth they hate the people

    they always have

    & that has not been confronted. never has. we are units & some of us are less than that. our privlege is not to live in the centre of the storm as the permanant poor are - but that storm is collecting greater & greater amounts of peopl in its number

    what has been required since bai yar, since dachau or auschwitz was intelligent leadership - was a reassesment of the role of societies & should have been the greatest warning against absolutes. the opposite has been the case. absolutism of every form is becoming attractive. mostly when it is a lie. especially when it is a lie

    those better angels of our nature i do not see them. i hear them - yes - say in the efforts of a hersh, a fisk or a pilger but they themselves would accept they are mad in the blakean sense. they are not normal - they are exceptional in their care for truth - but they are rare. very rare

    the narratives otherwise are so impoverished. so banal in their retelling

    i will tell a little history - i was in the leadership of a maoist group & in 1971 or 72 - our groups was visited in he university by the new zealand poet/docker rewi alley who was an official spokeman for china & he had come to tell the comrades - the story of lin piao. the death of lin piao. how one heroic telephone operator, to a heroic chauffer, to a heroic mongolian peasant with a shotgu had ended the life of this soviet revisionist who had been in cahhots with the russians since the beginning. in any cas in the middle of this story i started to laugh & laugh very loudly because it was as unbelievable as it was untruthful. we were in an agora of perhaps 700 people & i was the only one laughing. i thought that one had to use lies at certain times in the interests of the greater cause but in this moment i understood finally that lies were the death of us. i knew my expulsion was a breath away

    & i told my comrades - why do they have to lie & why do they have to repeat the lies they told the gneration of my father & mother & the lies their fathers were told. they were telling lies that were indecent in their transparency

    but the left, or the extreme left did not have a monopoly in this lie telling. the culture is rich with lies. it prefers them to the truth. & as i gro older i see & witness & horror at the truth

    our lies cover the crimes of our rulers & the lies they tell hide the massacres & the neglect that inform them. we hope simply that we will not be the next in line

    & now in this historical period i feel the profoundest fear - because i do not sense the truth. here & in my populations - yes there are questions - often very good questions - but a complete absence of answers. & i am amongst that number

    i admit that i support almost blindly the socialist experiments of cuba of vietnam because that is where i see the better angels of our nature - in changiong the material conditions of ordianry people. pulling the people away from ignorance

    in the west i witness a feel nothing other than the terrible avalanche of both neglect & ignorance

    i wish i would be more optimistic but it is not within me. i love the country i live in - i try to fight for her but i resemble each day more don quixote

    Posted by: remembereringgiap | May 30, 2005 5:12:47 PM | 54

    The solution is to democratise the corporation, in particular its board of directors into a body appointed by society and not management.

    For a first step I would be happy when the board would be elected by the shareholders instead of the managers. That CEOs can influence who sits on the board that controls them is perverted and needs to be changed urgently.

    In Germany half of the board members of big companies do go to unions but the chief of the board has the deciding vote. Not that it really changed much. Union members on the board have often agreed to company strategies that proved catastrophic. I would not hope for a better outcome if 'society' would vote for board members.

    I am all for a market based system when the rough edges of gread are are counterbalanced by state regulations and stiff personal penalties for fraud. There is no better system for allocating recources.

    I don´t care why Bismarck introduced social security in Germany - he did and it worked out well. He probaly did it to maximize profits but there was enough pressure to make sure that a maximum of profits could only be reached with social security.

    You don´t have to make the rules yourself. You 'only' have to take care that a maximum profit will be reached when people follow the rules you want to apply. The rules than will be established.

    So let me ask the folks here - are you unionized?

    Posted by: b | May 30, 2005 5:15:57 PM | 55

    R'giap, I was just thinking you were due to tilt at some windmills in this thread.

    what has been required since bai yar, since dachau or auschwitz was intelligent leadership - was a reassesment of the role of societies & should have been the greatest warning against absolutes.
    I'll join you on my donkey for this particular tilt. We could form a donkey cavalry.

    Posted by: Colman | May 30, 2005 5:18:56 PM | 56

    b, no I'm not unionised. I'm an evil capitalist. Possibly I'm a benign entrepreneur. Not sure really. My wife isn't either, but she is definitely an evil capitalist, being an accountant in a practice dealing with "high-net worth individuals".

    Posted by: Colman | May 30, 2005 5:21:41 PM | 57

    Actually I did mean to say central planning because despite their claims to the contrary the 'free marketeers' do support central planning but just their sort of central planning. A classic example is the dereugulation of the labour market. They pass laws at central government level which prohibit what they like to call the 'monopoly of labor' laws that prevent secondary boycotts ie one group of workers taking industrial action in support of another, at the same time as they ensure there are absolutely no impediments to the monopoly of capital. Monopoly of capital is best demonstrated in the classic Hertz/ Avis model where two major players allegedly competing against each other have reach a point of nearly unspoken collusion. Other smaller competitors pick up the crumbs but really since they don't have the buying power of the big 2 they aren't really a threat occassionally another corporation will sneak a seat at the table but that generally only occurs when a politician doesn't do what they are paid to do. I am composing this on an Intel system perhaps you are responding on an AMD but do we really know that they weren't built in the same Chinese prison?

    Posted by: Debs is dead | May 30, 2005 5:22:55 PM | 58

    You don´t have to make the rules yourself. You 'only' have to take care that a maximum profit will be reached when people follow the rules you want to apply. The rules than will be established.
    Which would be the problem really. What rules to set?

    Debs is Dead made a point earlier that I missed:


    A 'mixed' economy; that is one where a sizeable chunk of GDP is diverted to the benefit of citizens by way of education health and welfare, cannot hope to compete on the allegedly level playing field which the abolition of tarifs and duties creates. The inevitable result is that mixed economies will lose the bulk of their safety nets...

    This is far from obvious to me.

    Posted by: Colman | May 30, 2005 5:23:52 PM | 59

    DiD, what are you in favour of?

    Posted by: Colman | May 30, 2005 5:27:17 PM | 60

    colman

    yes but perhap i am the donkey. when i was a friend of the ira i visited derry belfast & some of the counties. i could not believe the unspeakbale poverty. this was in the 70's.

    how has the 'economic miracle' affected the greater number of people? are the beneficiaries of that miracle spread all over ireland. i am ignorant now about ireland - perhaps i was then. i remember in europe in the 70's to the 9o's wherever you were you could finid irish companions who at that time were the real europeans often speaking 3 or 4 languages out of necessity. & as an innocent i could never tell the difference between a bricklayer & a trinity man. beacue ireland did not function there were so many irish people here & in italy & in germany or trieste everywhere. because of the 'miracle' - has that changed too?

    there was an irish bar in the early 80's in rue montmartre that was a university for many people from many nations - there was knowledge but there was also humour

    today i feel no humour at all

    Posted by: remembereringgiap | May 30, 2005 5:27:29 PM | 61

    You say in perfect orthodoxy "rather, people need to understand how government has consistently been utilized by elites in the interests of accumulation rather than the distribution of resources to the "people and that's just not true. Elites try to use government for their interests, and being elites, they usually win. But the civil rights movement in the US defeated elites - or some elite faction - and utilized government itself. Labor movements, the women's movement, the Vietnam anti-war movement, the effects of the GI bill and state colleges, and the rise of social democracy in Europe are all real and significant.The non-elites are not helpless victims, waiting for the final crisis and the reforms of social democracy are not just palliatives - they actually change how people live.

    Posted by: citizen k | May 30, 2005 5:31:08 PM | 62

    yes but perhap i am the donkey. when i was a friend of the ira i visited derry belfast & some of the counties. i could not believe the unspeakbale poverty. this was in the 70's.
    This was of course the point of the civil rights movement that got hijacked by the nationalists. Catholics were terribly discriminated against in the North.
    how has the 'economic miracle' affected the greater number of people? are the beneficiaries of that miracle spread all over ireland.
    Most people are better off, but the income spread has widened. We currently suffer from a very small party of rabid free-marketers forming the tail that wags a much larger populist party in coalition. It's annoying, and the increase in relative poverty is a predictable result.

    Lots of our emigrants have returned, and of course they all complain that Ireland has changed, and they preferred it before they left.

    We still have some humour left, despite the increase in wealth.

    Posted by: Colman | May 30, 2005 5:33:45 PM | 63

    colman

    i'm glad that one of us possesses humour

    the indictement here is that some of our hlm's, our banlieus are uncannily like the conditions of belfast 40 years ago & i know france does not have monoploy on this level of marginalisation

    put simply, the elites do not care & they have torn the living heart out of the communities, creatinf form of inertia that lead to the death of communities that has been the case of so many towns in britain & in australia

    Posted by: remembereringgiap | May 30, 2005 5:43:59 PM | 64

    the elites do not care
    They don't even know. They choose not to, and it is an easy choice to make.

    Posted by: Colman | May 30, 2005 5:48:36 PM | 65

    @Coleman
    OK firstly an economy that 'wastes' money on unecessary education like college degrees in the semiotics of disney cartoons or keeping unproductive old people alive longer will not be able to compete with an economy that doesn't. Things will cost more because those 'excesses' will be added into the running costs of that community. I like most others would rather live in the society that let people study what they were interested in and cared about it's old people but if another society that had none of these virtues is allowed to 'dump' it's produce on the first society that first society will likely go under. The solution? Well it seems to me that the playing field is not level so communities (not countries) should be able to add a tax on to goods produced in communities that don't have free education for example. If community A spends 10% of its wealth on education and b 3% then a 7% tarif should be added. This money would then go to pay for education (or health or welfare or 'democracy') in the area in community b where the goods came from. You laugh after my previous diatribes against this sort of statistical collation and collection. But I'm talking about a model where these interactions occur at a very low level where people know how many kids are at school cause they walk past the class every day or how many people are born cause they see the children playing in the street.
    It would be difficult to implement initially but what a great challenge. I believe in a state that has some non-negotiables like freedom from harassment or disadvantage because of who you are or what you believe in but decisions about what happens in a community are mostly made within the community not imposed from outside. You know even your worst enemy thinks he's right. most people want to do the right thing and will do the right thing if given the opportunity. I realise that flies in the face of the sort of dog eat dog devil take the hindmost ethos of individualism that most people in the west have been indoctrinated into. Generally however if people can do the right thing they will. They are always going to be sociopaths and those people will be attracted to the centre of large organisations no matter what the philosophy, therefore the only solution must be to ensure that no one person has more power than over what directly effects them and that others effected by that power can hold the person directly responsible. It's a lot easier to lie to 10 million people than your next door neighbor.
    Well you asked...

    Posted by: Debs is dead | May 30, 2005 5:59:56 PM | 66

    Thanks DiD. I find that these discussions get so bogged down in negatives that they stop making sense. I'll read that tomorrow morning. You should still be up at that stage.

    Posted by: Colman | May 30, 2005 6:20:26 PM | 67

    @Colman Fine talk to you in the am. rest well.

    Posted by: Debs is dead | May 30, 2005 6:26:23 PM | 68

    Corporations are the solution as well. Corporations are tools that socially organize people to accomplish things that otherwise could not be accomplished. In a way a corporation is a claim that ordinary people can have power.

    From the internet, "Corporations in the American Colonies" by Joseph S. Davis, from "Essays in the Earlier History of American Corporations" Harvard University Press, 1917.

    "'In fact,' says a keen student of English and American history, "the whole advance of English discovery, commerce, and colonization in the sixteenth and early seventeenth centuries was
    due not to individuals, but to the efforts of corporate bodies."(2*) It was a corporation to which Sir Walter Raleigh, in 1587, entrusted the colonization of Virginia. The first permanent
    English settlements, both in Virginia and in New England, were made on the initiative and at the expense of corporations modelled after the contemporary joint stock compares for foreign
    trade. For over a century before the Revolution the colonies of Connecticut and Rhode Island were each governed by a "Governor and Company," incorporated by charter from the English crown. The colony of Georgia was founded, and for twenty years had its
    destinies directed, by a group of charitable English gentlemen who constituted a typical English eleemosynary corporation."

    "Some bodies which had long exercised corporate powers, moreover, were recognized as corporations "by prescription" in view of their long existence as such, even though they could show no specific grant.(6*) There were also certain groups which were deemed corporations by the common law without express grant of corporate powers; such were
    the "Parishioners or Neighbors in a Parish, Village or Town, & the Church Wardens of every Parish."(7*) Even in the case of corporations "by prescription" or "at the common law" the assent of the king was held to be implied. Neither class, however,
    formed an important one among seventeenth and eighteenth century corporations; and the dictum of Lord Coke pronounced in 1612, that "none but the King alone can create or make a corporation,"(8*) was quoted as substantially accurate throughout
    this period."

    Noteworthy is the role of beneficial purposes, and community role, in corporations from their origins, as well as the claim that this COLLECTIVE form of the Corporation was critical to England's success, and came into modern form around 1600 -1700, before its post modern no accountability, 14th amendment form, which has reached absurd levels today.

    People are the problem. The tool can be controlled.

    Posted by: razor | May 30, 2005 7:31:24 PM | 69

    I said "crude" rhetoric needed. Simplify. reduce. oversimplify. for the common good, you know.

    I'm aware some gains by the good people. Interesting, civil rights too can be argued, and should, as benefit to elite accumulation. The only instance I can presently think of in which legislation posed some threat to elites is legal standing extended to individuals during regulatory (like FCC) proceedings.

    Posted by: slothrop | May 30, 2005 7:31:37 PM | 70

    And I'd certainly argue "women's movement, the Vietnam anti-war movement" are hardly good examples of confrontations against bourgeois institutions.

    Posted by: slothrop | May 30, 2005 7:34:49 PM | 71

    That's 'cause, dear slothrop, you have been bamboozled by false certainty. Surely it's the case that the New Deal was good for the US upper classes and even supported by some of them. But it was also so bitterly opposed that the Mellon family attempted to organize a military coup. Why is that? Shouldn't all of the elite have been snapping their fingers at the help to break out some more champagne? For my part, I don't care whether the women's movement or the Vietnam war protests were confrontations against bourgeois institutions or excuses to skip work - oppression of women and blowing up indochina are bad things and lacking a masterkey to what events lead to what results, I can only endorse opposition to the bad and proposition of the good. You can explain to the potential victims that the anti-lynching movement was merely an exercise in elite accumulation.

    Posted by: citizen k | May 30, 2005 7:55:46 PM | 72

    I'm merely pointing out the "counterhegemony" must in any event include an insistence that "people" and "business" are often polar opposites and government so often represents interests of the private over the public. Of course, citizen k, matters are more complicted. But disarming the giugantic obfuscation of "big governnment" requires similar simplification.

    BTW. Bourgeois feminism hurt more than helped, imo.

    Posted by: slothrop | May 30, 2005 8:22:46 PM | 73

    I never heard the Mellon coup scenario.

    I'm inspired by Habermas' Crisis of Legitimation. I think he nails the problems of the welfare state.

    Posted by: slothrop | May 30, 2005 8:30:00 PM | 74

    I don't think the "government works for the rich until there is a revolution" story will sell anything positive. The "we can make government work fairly and cheaply" story is more marketable if you can explain in broad strokes how. Of course, you might argue that it can't be done at all given the economics of capitalism. But I'm not convinced that that theory is either correct or the basis for any effective political action.

    Posted by: citizen k | May 30, 2005 10:27:04 PM | 75

    That's 'cause, dear slothrop, you have been bamboozled by false certainty.


    Well, educate him there, Citizen K.


    The enlightenment of Comrade Slothrop will be highly amusing, time intensive, and costly, I am sure CK.

    Perhaps the membership could form a joint-stock company, and finance this venture privately.

    But if I were you, I would seek government funding.


    Posted by: Groucho | May 30, 2005 10:37:13 PM | 76

    OK firstly an economy that 'wastes' money on unecessary education like college degrees in the semiotics of disney cartoons or keeping unproductive old people alive longer will not be able to compete with an economy that doesn't. Things will cost more because those 'excesses' will be added into the running costs of that community.
    Is that true? You're assuming that the nasty economy doesn't have its own ways of 'wasting' money, and you're assuming that keeping old people alive has no economic value. The US wastes far more money on pointless military spending and its massively inefficient health system than any of the European economies.

    If you're basing competition on numbers like GDP, then both keeping old people alive and going to college are productive activities, boosting GDP.

    Now, if you're talking about producing stuff at low cost, you need to concentrate on doing stuff that the low cost economies don't have the infrastructure for or that can only be produced locally. I'm with the point of view that you can't run a technological society on a feudal model: it just won't work. The infrastructure of people studying Disney semiotics is required for the development of high technology.

    I agree with Slothrop in so far as the welfare state is good for the advance of capitalism. I just don't think this is a bad thing, because I don't see any better way of arranging things.

    Posted by: Colman | May 31, 2005 2:16:17 AM | 77

    the only solution must be to ensure that no one person has more power than over what directly effects them and that others effected by that power can hold the person directly responsible
    And this always seems to be the problem to me. How do you stop large organisations growing? How do you prevent the widget makers banding together? Neither communities nor economies are steady state. They always change into something else. How do you prevent this?

    Posted by: Colman | May 31, 2005 2:20:17 AM | 78

    I agree with Slothrop in so far as the welfare state is good for the advance of capitalism. I just don't think this is a bad thing, because I don't see any better way of arranging things.

    I don't think its a bad thing because it is good for the people who get the welfare and the people who live in a more humane society.

    Posted by: citizen k | May 31, 2005 3:58:29 AM | 79

    "Is that true? You're assuming that the nasty economy doesn't have its own ways of 'wasting' money, and you're assuming that keeping old people alive has no economic value. The US wastes far more money on pointless military spending and its massively inefficient health system than any of the European economies."
    @Colman
    It does but the corporations paying tax for the military get considerable bang for their buck. The rest is born by the citizenry. The US pays considerably less for resources such as oil etc than other countries do AND as it is becoming more expensive to do business things are moving offshore. Eventually the economy like that of most 'developed nations' will be nothing more than the low paid providing services to the super rich. We are in a period of transition. It could take another 20 years for the last bit of US production to go down the gurgler but it will and not just heavy industry either. All the new technology jobs are disappearing faster than new ones are being created. If you haven't been touched by this yet I congratulate you on your good fortune. If you are in retail or services wonder where the customers will come from. I'm not trying to be negative or 'black' about this I am just reporting on what I have seen in a lot of developed and undeveloped nations since the early '80's.
    Some japanese salaryman theorist wrote an incredible treatise about the development of senior management in transnational corporations as those corporations grow. The boss in the new foreign outposts is usually the nationality of the home corporation. After a time a national from the country that the outpost is in takes over. Then the outposts are managed by the best person available from anywhere in the organisation. Eventually even the head office of the original corporation is run by the best person for the job and preferably of a different nationality than the original corp. Why? because the first loyalty in any transnational must be to the corporation. Now in the US most corporations are still run by US citizens. That won't continue and whatever vestiges of loyalty to their nation the current crop of robber barons possess will soon be gone. When that happens the only role I can conceive of for the citizenry is as connon fodder for the corporations interests. Venezuela thinks it's gonna sell it's oil to another corp! Well we'll just fire a few mill to the bottomless pit of greed known as congress, straighten out Rupert to get the serfs onside and go and take the oil offa those greasy latinos.
    Yes it's is bleak and doesn't have to happen but it will only be stopped if ordinary people everywhere hang tough. Most countries have been/are going through this and the reason we have let it happen is that ordinary people are either too busy trying to eat or hating some mob on the other side of the world too much to work out who the real enemy is. Contrary to popular belief the democrats/social democrats/ labor party/wont fix it either. They are just too compromised. Neither will a revolution. Revolutions just create Stalins. We have to find a way to stick together around the world and develop a strategy that isn't dependant on the usual suspects. I continually wrack my brains on this and have a couple of inklings but certainly don't claim to have the answer.
    Somehow (to deal with your second point) people have to create a mechanism that either prevents any organisation from getting too large or if that can't be done eg economies of scale for medical research or somesuch, large organisations have to be held directly and immediately responsible for their actions. And no I'm not talkin a zillion petty regulations. That has been proven not to work.
    Now I realise you can continue to drag bits of what I'm saying out and pick on holes in it if that is your want. You can call me idealistic or sophomoristic or plain crazy but in the end if people continue to allow themselves to hold on the jingoistic crap that we have been doing we're truly stuffed. And if we are well it's happened to every other dominant species on this planet who the hell are we to think we're better. But we could do it if we really worked it and didn't all let our need to be correct get in the way.
    we may have more time than I feel we do but that doesn't really help since chances are we'll just procrastinate that away.

    Posted by: Debs is dead | May 31, 2005 6:01:52 AM | 80

    The expression "organized or state-regulated capitalism" refers to two classes of phenomena, both of which can be attributed to the advanced stage of the accumulation process. It refers, on the one hand, to the process of economic concentration-the rise of national and, subsequently, of multinational corporations-and to the organization of markets for goods, capital, and labor. On the other hand, it refers to the fact that the state intervenes in the market as functional gaps develop. The spread of oligopolistic market structures certainly means the end of competitive capitalism. But however much companies broaden their temporal perspectives and expand control over their environments, the steering mechanism of the market remains in force as long as investment decisions are made according to criteria of company profits. Similarly, the supplementation and partial replacement of the market mechanism by state intervention marks the end of liberal capitalism. Nonetheless, no matter how much the scope of private autonomous commerce of commodity owners is administratively restricted, political planning of the allocation of scarce resources does not occur as long as the priorities of the society as whole develop in an unplanned, nature-like manner-that is, secondary effects of the strategies of private enterprise. In advanced-capitalist societies the economic, the administrative, the legitimation systems can be characterized, approximately and at a very general level, as follows.

    The Economic System. During the sixties, various authors, using United States as an example, developed a three-sector model based on the distinction between the private and the public sectors; According to the model, private production is market-oriented, one sub-sector still being regulated by competition while the other determined by the market strategies of oligopolies that tolerate a "competitive fringe." By contrast, in the public sector, especially in the armaments and space-travel industries, huge concerns have arisen whose investment decisions can be made almost without regard for the market. These concerns are either enterprises directly controlled by the state or private firms living on government contracts. In the monopolistic and the public sectors, capital-intensive industries predominate; in the competitive sector, labor-intensive industries predominate. In the monopolistic and public sectors, companies are faced with strong unions. In the competitive sector workers are less well organized, and wage levels are correspondingly different. In the monopolistic sector, we can observe relatively rapid advances in production. In the public sector, companies do not need to be rationalized to the same extent. In the competitive sector, they cannot be.

    The Administrative System. The state apparatus carries out numerous imperatives of the economic system. These can be ordered from two perspectives: by means of global planning, it regulates the economic cycle as a whole; and it creates and improves conditions for utilizing excess accumulated capital. Global planning is limited by the private autonomous disposition of the means of production (for the investment freedom of private enterprises cannot be restricted) and positively by the avoidance of instabilities. To this the fiscal and financial regulation of the business cycle, as individual measures intended to regulate investment and demand-credits, price guarantees, subsidies, loans, secondary redistribution of income, government contracts guided by business-cycle policy, indirect labor-market policy, etc.-have the character of avoidance strategies within the framework of goals. This system is determined by a formulistically demanded adjustment between competing imperatives of steady growth, stability of the currency, full employment, and balance of foreign trade.

    While global planning manipulates the boundary conditions of decisions made by private enterprise in order to correct the market mechanism with respect to dysfunctional secondary effects the state actually replaces the market mechanism whenever it creates and improves conditions for the realization of capital:

    -through "strengthening the competitive capability of the nation" by organizing supranational economic blocks, securing international stratification by imperalist means, etc.;
    -through unproductive government consumption (for example, armaments and space exploration);
    -through guiding, in accord with structural policy, the flow of capital into sectors neglected by an autonomous market;
    -through improvement of the material infrastructure (transportation, education, health, recreation, urban and regional planning, housing construction, etc.);
    -through improvement of the immaterial infrastructure (general promotion of science, investments in research and development, provision of patents, etc.);
    -through heightening the productivity of human labor (general system of education, vocational schools, programs for training and re-education, etc.);
    -through relieving the social and material costs resulting from private production (unemployment compensation, welfare, repair of ecological damage).

    Improving the nation's position in the international market, government demand for unproductive commodities, and measures for guiding the flow of capital, open up or improve chances capital investment. With all but the last of the remaining means this is indeed a concomitant phenomenon; but the goal is to increase the productivity of labor and thereby the "use value capital (through provision of collective commodities and through qualification of labor power).

    The Legitimation System. With the appearance of functional weaknesses in the market and dysfunctional side effects of the steering mechanism, the basic bourgeois ideology of fair exchange collapses. Re-coupling the economic system to the political-which in a way repoliticizes the relations of production--creates increased need for legitimation. The state apparatus no longer, as liberal capitalism, merely secures the general conditions of production (in the sense of the prerequisites for the continued existence the reproduction process), but is now actively engaged in it. It must, therefore-like the pre-capitalist state-be legitimated, as though it can no longer rely on residues of tradition that have been undermined and worn out during the development of capitalism. Moreover, through the universalistic value-systems of bourgeois ideology, civil rights-including the right to participate in political elections-have become established; and legitimation can be disassociated from the mechanism of elections only temporarily and under extraordinary conditions. This problem is resolved through a system of formal democracy. Genuine participation of citizens in the processes of political will-formation, that is, substantive democracy, would bring to consciousness the contradiction between administratively socialized production and the continued private appropriation and use of surplus value. In order to keep this contradiction from being thematized, then, the administrative system must be sufficiently independent of legitimating will-formation.



    Habermas, from Legitimation Crisis

    Posted by: slothrop | May 31, 2005 10:57:06 AM | 81

    The welfare state is a historical formation necessary for accumulation and whose legitimation must be detached as much as possible from democracy. Rather, legitimation of private/public means of production is problematically sustained by ideology.

    Posted by: slothrop | May 31, 2005 11:10:40 AM | 82

    "Humane" society? That's a joke, right?

    To say the welfare state is a good thing misses the point entirely. Much more vast redistribution of resources is possible than ever permitted by the legitimating function of welfare statism. Unquestionably, you are the one "bamboozeled" citizen k. I'm surprised you do not understand the structural goals of the welfare state. Very surprised. Maybe devil's advocacy on your part.

    Posted by: slothrop | May 31, 2005 11:31:10 AM | 83

    Yes it's more humane. Try reading Engels "Working Class in England" or Agee "Praise of Famous Men" and compare to Blairite UK or even Bushite US. Of course there is still monumental injustice, but I don't buy either that vastly juster redistribution is in fact possible in the short term or that the potential dawn of that great day justifies more people starving on the side of the road.
    Where is that grand redistribution going to come from?

    Furthermore, I think that you fall into a trap by assuming that the "purpose" of the welfare state in the minds of state planners is the same as the function of the welfare state in actual life. Certainly one could make a good argument e.g. that the creation of the German middle class provided a constituency for both the Kaiser and Fuhrer, but that's a depressing line of thought, maybe too depressing to consider and there is a counter argument that the (by historical terms) prosperous, tolerant, and human Germany of today is created by the presence of this middle class and all those superstructural rules dismissed by Habermas.

    Posted by: citizen k | May 31, 2005 12:31:47 PM | 84

    Habermas was for the EU constitution, if I remember correctly ;)

    CitizenK: I won't really disagree with you about the good of welfare state, though as slothrop says it could be far better. Yet I don't think it's correct to compare Blair's UK with Dickens'. Basically, in mid-19th, we had a national capitalism bent on exploiting its own people first of all. Nowadays, we have a global capitalism. So, yes, people in UK have it better now than in the 1830-1850s - which arguably was the worst period in the entire history of the island if you consider the well-being of the entire population. But that's mostly because the system has reduced its preying on Englishmen and is now busily exploiting Asians and killing Africans through its economic policies. If you look globally at the well-being of the average human on Earth, I'm not sure it's better than 150 years ago - in fact, I'm pretty sure it's now even worse than it was 10.000 or even 2.000 years ago.

    Posted by: CluelessJoe | May 31, 2005 2:08:31 PM | 85

    Problem is DiD, that if the world you're suggesting isn't possible, if we can't stop organisations happening (what do you do with the mafia) then we're going to have put ourselves at the mercy of the type of bastard that subverts markets and glories in totalitarianism. The cure could end up being much worse than the disease. I don't know how to make your solution work, so I can't endorse it.

    Posted by: Colman | May 31, 2005 3:18:10 PM | 86

    IF the masses in the world are worse off THEN it is because the successes of the indicted have provided the resources for the population explosion. Credit where credit is due.

    But, this is all dead end thinking. It is not so much a change is gonna come as change is already here as it was back when people couldn't step into the same river twice. So as the kids say these days, whadda you gonna do about it?

    Posted by: razor | May 31, 2005 3:25:22 PM | 87

    Clueless Joe:Basically, in mid-19th, we had a national capitalism bent on exploiting its own people first of all.

    Not really. Clive was 1750s, a famine in Bengal in the late 1700s killed 10 million, the great mutiny was 1857 or so.How do you think British textiles managed to outcompete india? Lower prices and better quality? There's a spinning wheel in the Indian flag for a good reason. I won't say that todays UK is significantly nicer in its foreign policy, but it's way past its prime in terms of extracting loot from the rest of the world.

    Posted by: citizen k | May 31, 2005 8:44:20 PM | 88

    "Where is that grand redistribution going to come from?"

    380 or so billionaires. throw the oligarchs in jail. expropriate the expropriators. give me the job, I'll do it.

    based on the UN report on poverty, half or more of the world's population suffers extraordinary hardship which the most menial contribution of western gdp could fix.

    about habermas: I'm not thrilled in the least by his oldage conservatism. Seems his applications are not as bold as his justifications.

    Posted by: slothrop | May 31, 2005 9:30:33 PM | 89

    Slothrop, finding the money is not the problem. There's just that little question of getting it.

    Posted by: citizen k | May 31, 2005 11:08:15 PM | 90

    At the risk of joining a conversation just as it's ending, the more important problem with taking a billionaire's money is that the money only has value in a system that supports and promotes billionaires. If you take his or her money, where do you then deposit it? And who will allow you to spend it?

    Posted by: rug | Jun 1, 2005 5:01:44 AM | 91

    You transfer the money - via taxes in my world, via some other mechanism in Slothrop's (I believe pitchforks may be involved) - to the less well off via public works and direct payments. We call it the welfare state. It promotes fairness you see.

    Unbridled capitalism is inherently unfair: by it's structure it tends to concentrate wealth in the hands of a small number of people, generally those who started off with any advantage at all. It takes small advantages and magnifies them. The billionaire isn't that rich because he's millions of times better than the shop worker. He just needed to be a bit smarter and a bit luckier and a bit more personable and maybe work a bit harder. And that's assuming a perfect model of rational, honest free-market capitalism where entrepreneur saints obey the laws of society and don't form monopolies or exploit their positions.

    Money has value in any system that allows you to swap money for services or goods. Valuing billionaires is not a necessary condition.

    The bizarre idea that if you have money you must deserve it is a justification for the rich as much as Victorian views of savages in Africa being a lower class of animal was a justification of white privilege.

    Posted by: Colman | Jun 1, 2005 5:26:23 AM | 92

    Eeeek. I typed it's. I'm going to banish myself from the Internets now.

    Posted by: Colman | Jun 1, 2005 5:29:13 AM | 93

    Colman--you 'aving a go, mate?

    It were my choice, we'd all be working in co-operatives.

    Posted by: Rug | Jun 1, 2005 8:24:23 AM | 94

    I was a millionaire once. In Italy.

    Posted by: Rug | Jun 1, 2005 8:57:54 AM | 95

    hgj

    Posted by: | Mar 10, 2007 11:07:02 PM | 96

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