Socializing Political Power and Socializing Capital

This is a summary of an interesting post by Larry Hamlin over at the Barefoot Bum.

I think many of us forget, or at least take for granted, the profoundly radical nature of democracy. We know we have freedom of speech, religion, association, etc and of course, we can vote. We cannot be deprived of our life or liberty without due process. In a fundamental sense, democracy is the socialization of political power.  Political power is simply the ability to use human and natural resources to some specific end. One aspect of political power is that societies have to concentrate that power to accomplish anything. Simply directing a group of people to dig a well is an example of the concentration of power. Traditionally, at least until the last several hundred years, individuals owned political power. Those who owned the greatest concentration were called warlords, emperors, kings, or priests. People took this for granted, since after all, who else should own the political power than the person who could directly use it and had “earned” it. One characteristic of privately owned political power was that the owner could employ it, in a sense, arbitrarily. A king could kill you, order someone else to kill you, place you in jail, take your land or wife, make you his slave. He might treat you nicely and fairly, but this would be his whim. It is not to say that every act a king might do was always wrong, per se. It might be to the benefit of the society if  the king ordered you dead or if he ordered you to jail. The king might have fantastic ideas about agriculture or science and might do much for the poor and desperate–all of these actions require the concentration of political power.  Because the king owned the political capital, he could exercise his power purely on his whim to his benefit. It was only through blind luck that any leader might happen to use this power to the collective benefit of society.

But with the development of democracy this picture changed. The radical aspect of democracy is that it socialized political capital. This means that we divide all political capital among all citizens. No one person or group arbitrarily controls what others can and cannot do. The state, through legal and constitutional frameworks, controls all acts of coercion–and we control the state.  Although we take this form of government for granted today, it was not obvious in the seventeenth and eighteenth century that democracy was either “good”, efficient, wise, or workable. We praise our founding revolution, but we had many privileges, not the least of which was our relative isolation and connection with the English enlightenment. The French Revolution, so easy to critique (much of it justified) faced serious problems, including a recalcitrant  nobility and continuing wars in Europe and an entrenched feudal culture. The French nobility was typical of much of Europe. These private owners of political power were not going to give up their privileges without a fight.

I think we face the same situation today in regards to economic capital. A society needs to concentrate economic capital in the same way and for the same reasons that it needs to concentrate political capital (in many cases, they both are equivalent). Economic capital tends to concentrate in private hands in the same way that political capital tends to concentrate in private hands. Our economy functions only to the extent that those who own the capital and means of production can make a profit (a promise of a greater concentration of capital.) In other words, much of our economy is tied to the arbitrary whims of the capitalists. There is no reason that we could not socialize capital in the same way we socialize political power. It might not happen this decade or even this century. I suppose it might never happen, but I believe it will and some day people will look upon the private ownership of capital as a quaint relic of the past in the same way we look upon the private ownership of political power today. The arguments against socializing capital are similar to the ones employed 300 years ago against socializing political power. The arguments in favor of socializing capital are similar to those for socializing political power.

Stop the presses! People misunderstand what the government spends on welfare!

Here is an analysis and a pie graph showing what we spend in different areas of the federal budget. I am amazed at how misinformed so many people are concerning welfare spending. Polls show that people believe that welfare spending is a much larger proportion of our budget than it is. The spending on the cliched “lazy, drug using, and booze swilling” poor people amounts to about 8% of our budget. Even assuming that poor people waste or misuse some of the welfare they receive, the significant portion is still spent on cheap food staples, crappy emergency room medical care, and substandard, vermin and crime infested housing in the poor inner cities and rural communities. In other words, poor people, with very little help from us, are just trying to survive. Capitalism always produces a subclass of poor; calling them lazy (and as a corollary, the non-poor virtuous) is just a game to justify leaving them there.

The “poor are lazy” is a cultural meme that has existed since people first formed cities thousands of years ago. Another meme is the notion that the poor should be our hardest working, most virtuous and temperate citizens and when they are not they are vilified. The cruel irony is that while a huge proportion of our fellow citizens are the direct beneficiaries of specific policies (welfare, New Deal, higher taxes for the rich, unionism, increased job safety and regulation) that brought them into the middle class, too many increasingly want to shut down the very programs (now labeled socialistic) that helped them. This effectively closes the door on those left behind (the minorities and the rural poor).  However, the financial meltdown of the last few years has given lie to both the notion that an unregulated “free” market economy will always lead to a “rational” and fair distribution of wealth or that the wealthy capitalist class has anyone’s interest at heart but their own.

misunderstand

Ayn Rand on Wikiality. Stephen Colbert’s Hilarious Wikipedia like site.

Stephen Colbert has a wikipedia type site.  Hilarious!

Here is his take on the queen of greedy, selfish, whiny honorable free-market capitalism. Although it is satire (but not as much you might think) it astutely outlines Rand’s  crap she just makes up to justify her many psychotic preferences philosophy which is still widely influential in conservative free market economic circles.

H/T Barefoot bum

Racheting Diet, Day 5, 232.5 Target 232.5, Rule 1

Back to target weight, but still employing rule 1 (which puts a real, but very limited restriction on calories.) Using just rule 1 might allow me to lose about a half a pound per day. I have to stick to this rule until I drop below 232.5 (which creates a new target weight.)

What Americans think they know about government spendings

Tom Schaller over at fivethirtyeight.com looks at some polls that question what Americans believe about government spending.

He says:

I don’t know about randomly-selected Americans, but I do know that undergraduates in my POLI 100 classes tend to think the government spends more on defense than it does and less on Medicare and Social Security than it does. In surveys, the median American thinks that we spend about 20 percent of the federal budget on foreign aid, and would like that amount reduced to about 10 percent–when, in fact, actual spending amounts to less than one percent. This may explain why some Americans foolishly believe that tort reform will solve our health care cost problem or that eliminating earmarks will eliminate our deficit problem, even though they will not. I know I’m going to sound like an elitist, but the fact of the matter is that most Americans have a very weak grasp of how the government raises revenues and what it spends those monies on.

This has frustrated me for a long time. McCain built his campaign on the theme of significantly cutting the deficit by cutting earmarks which are nearly, proportionally speaking, non existent.  What we spend on the poor is significantly outweighed by what we spend on our two wars and the middle class or for that matter on maintaining huge banking establishments. We need to increase overall consumer demand which will force an increase in government spending. It does not follow that we should spend our money on anything. We could start by ending our two wars, pass a comprehensive health care bill, provide extensive jobs stimulus, break up the banks, and end some of our more egregious subsidies to the middle class. We can certainly afford to increase taxes on the wealthiest Americans. But we can’t do that if people honestly believe our problems are earmarks and foreign aid.

Diet day 4, 234 using rule 1

Now I am fluctuating up, still within the standard of error. Rule one is along the lines of a minimal diet. No seconds, and no snack after dinner and no conventional fast food.

I am supposed to add rules (making the diet more onerous) each day that I am above the target. I think I will employ the meta rule and limit the max rules to 2 for each pound over. Since I am up one and a half pounds, I will employ a max of 3 rules. I have to drop to 232 to lose one rule and to a max of 231 to lose all the three rules (but more likely I will have to get down to around 230 or so.

My other goal is to try to develop a habit of just eating a little less and not be so frantic to lose weight fast.

note: I obviously did not eat enough to actually gain one and a half pounds (around 5100 extra calories.) Either my scale just fluctuates or I did on water. I think it is more my scale.

Would a libertarian economist regect any suggested centralized government action? Does a bear poop in the woods?

To listen to conservative libertarian economists, government is a cesspool of inefficiencies. They often argue that every government agency or initiative constitutes a massive fail. Public schools? Nope, they have done no good. EPA? Sorry, they stifle economic innovation. Taxes? Always bad. Post Office? What a joke. Governmental run health care? People don’t actually deserve adequate health care and besides, the government would ruin it in any case.

It is easy to find flaws in any big endeaver. Schools are not perfectly efficient nor is the Post-Office an effective profit making machine. I am sure that the HCB will be flawed. But conservative economists are comparing the reality of large groups with a pie in the sky vision of what could be if only the Federal Reserve and FDR had never existed.

Pretend, for a moment, that we live in a nation called Randville with an absolutist free-market system. Randvillians expect and take it for granted that all economic initiatives derive from the interplay of private corporations, businesses, and individuals. Suppose though, in this society, the roads are crappy to the point of being unusable. For decades, this problem has flummoxed the citizens of Randville. Although, everyone agrees that it is to the objective benefit of all economic interests if the roads were usable, nothing seems to change. The cost of doing business keeps going up as the roads get worse. Eventually, though, the free-market Randvillian economists discover the source of the problem. They blame it on some obscure law passed decades earlier by a misguided, though minuscule, federal government which attempted to regulate the way roads were made.  The minuscule government is now gone as is the regulation in question,  but the perceptive Randvillian economists understand that all regulations have a desultory effect on economic growth that can last decades after said regulation is appealed.

But there is a radical in Randville. This radical suggests that it might be helpful for a centralized authority to make the roads, without regard for but with input from the various interests. They suggest that if every economic interest give a small, but proportional, bit of money, they could build roads that would help everyone.

The Randvillian economists rise up in protest. They point out how most bureaucratic entities are inefficient. They argue that special interests will take over and they hear rumors that the central entity might build good roads in poor neighborhoods, effectively distributing wealth from those who happen to have it the good to those exploited to the point of desperation the bad. They argue that because there is no incentive to make a good road because there is no profit, the workers and managers will produce a lousy product. What is worse, is that the central entity will hire unemployed laborers to help make the roads. Why, the Randvillian economists ask, should a worker even want to a real job when they know a government job is waiting for them? What’s more, the road builders might well build a six lane highway from point A to point B when a four lane road is better. How could a central committee know what the economic interest should be? That the road currently from A to B is a muddy rut is of no concern for the pristine and intellectually pure economists.

Supporters of the road building initiative hold town-hall meetings which turn into raucous events. Concerned citizens scream at the proponents of the centralized road building committee “How dare you take my muddy rut and try to replace it with socialized asphalt?” “How dare you try to control nearly 100% of our nation’s economy?”

Well the anti-road building argument wins out. To this day, the citizens praise each other for their fight against big government. They still scratch their heads complaining about the roads while the Randvillian economists still publish their policy papers on that regulation from oh so many decades earlier.