Ok, I read back through that a few times and realized I was in a pretty funky mood when I wrote it so lets revisit some ideas. First I am not really sure that we have reached the point where it has outlived its purporse. Case in point, if you take the GDP of the US and evenly distribute it around you wind up with everyone having about 30k a year. Not bad money but, not great money. For capitalisim to really outlive its usefullness I think that number needs to get to the point where general living costs for everyone is around the same rate as tax is today.
30k is probably a good water mark for enough money to live comfortably. You won't be driving a new car every 2 years or living in the really nice section of town. But you certainly arn't going to starve and if you have a little sense of self denial you won't be head over heels in debt. However, 30k for everyone in the USA represents pretty much 100% of all value being produced in the economy. This means everyone would be working to make sure everyone has the same things. Meaning some people would be doing things that are more valuable than someone else. That is one of the fundamental short commings of communisim. It just dosn't allow for the desire of people to distinguish themselves from each other.
So for a system to exist where you remove money from the need to survive IE provide basic life (not welfare) provisions across the board, the cost to society as a whole needs to represent a reasonable fraction of all value being produced. Current Welfare costs percentages would be a good place to start as to what we could sustain, they may also serve as a good mark for what we cannot exceed. In order to do that we need to be a couple of magintudes more productive per capita without a corresponding increase in cost of living. This is really not that crazy an idea if you consider the recent growth in per capita production through the past century or so. If you compare productivity levels of an average worker from pre industrilized economies with that of today you see an exponential growth curve.
The problem is that while the growth curve of productivity has been exponential, the purchasing power that has come along with that growth has been much smaller. If you are talking what I could buy 100 years ago with my present sallary it would seem fantastic. However there was much in that day and age that we take for granted that was not available at any price then. So this increase in productivity came with a corresponding increase in the costs of living. Cars, Airconditioning, better health care/drugs all cost a great deal of money. Money that was not being spent before. So while you made more you had more to spend it on and in many cases they were not luxuries but things which really did and do improove the quality of life. The car beats the snot out of the horse, Refridgiration beats an ice box and Viagra beats ground up rhinocerous horn etc etc etc....
Even so the power of the individual to purchase luxury items has greatly increased. To the point where owning multiple cars/houses/pleasure crafts etc represent items for the average person rather than just the wealthy. The gap in expected life span between the average person and the wealthy has also closed to almost negligible. So if we continue down this track and reach the point where the equivalent of 30k distibution to everone only represented roughly what it costs for welfare we will be at a point where we need to reconsider capitalisim as our main means of distinguishing ourselves from each other.
The reason I was able to consider that we have already reached that point is because I am not sure that 30k today is what basic survival should cost. I think to some extent we have inflated costs to deal with our increased productivity. IE we have created a sink for the money rather than allowing a large gap to grow between the average persons needs and the amount of money they have to spend. If goods are worth nothing (ie represent no significant cost) then you can't pay someone responsible for making them very much. Probably the best example of that these days is food. Farmers are paid to grow less food because otherwise they would flood the market to such an extent that farming would cease to be economically viable. Yet under those circumstances the cost of a basic need like food would plummet. Granted without a means to keep the farmers farming (no incentive if they can't make enough money) then sooner or later there is so litte food produced that the pendulum swings the other way. The problem is of course that such a swing is known as a famine and they are pretty damn nasty. What that dosn't change is that for the first time in history we possess the means to produce insanely cheap plentifull food but not a system of economics which can sustain it. Isn't that Ironic... don't you think ? To add insult to injury due to that lack we have to pay those incentives with tax money which inflates our cost indirectly as we are the ones that pay the taxes in the first place. So not only does food not cost as little as possible it costs us more besides to maintain the higher costs. So in short we pay more in taxes to keep food prices higher.
The real kicker there ? In a capitalist system that insane state of affiars actually makes sense as the option of farming ceasing to be an economically viable endeavor would lead to massive starvation as a means of ballancing the equation so that it was economically viable. I suppose in a way all this has been about my gut feeling that there has got to be a better way.
Housing is another good example. With the advent of the two income home, income per household has skyrocketed since the 50's. Logically if per household income roughly doubled you would think that the percentage of cost represented by housing would essentially half. In otherwords if housing cost 50% of your household income before it should cost 25% after it doubled. Well point in fact, housing cost roughly 30% of average household income in the 50's and it costs roughly 30% of houshold income in naughty aughts. This is because people started buying larger houses (as just owning a house was no longer a means of distinguishing yourself) and houses started costing more because people had more money to buy them with.
So in part the cost of living today is inflated from its true value. Right now I think you could make an argument that the cost of a comfortable living is a function of GDP evenly distributed. Perahps I will go track down enough numbers to prove or disproove that idea. But what that would mean is that no matter how high average income rose the cost of an average living would still be essentially 100% of GDP evenly distributed. Meaning that we could never escape that fact without altering our system of economics. This is not to say that the quality of life represented by that comfortable living would not increase, far from it ( we live better today than we did in the 80's and better then than in the 50's ). However the bell curve still exists and we have a very poor system of providing for those that wind up with the short smelly end of the stick. Of course we all like to think we can end up on the other end of the curve and enjoy having more than we need. Mathmatically though that is as impossible as it is to eliminate those at the smelly end with the current system of apportioning the basic need of survival (money).
So while in the end I don't think we are ready to change to another system of economics, I also don't think the true cost of a comfortable living really costs as much as our entire GDP evenly distributed. As for what it really costs... I imagine to find that you have to go back and look at things like the increase in the cost of housing, the onset of over production of food and other similar indications of artificially inflated prices with regards to basic needs (cars come to mind).
ahhh perhaps another time. For now I am tired and have rambled on long enough. Later
Sunday, July 10, 2005
Sunday, June 19, 2005
On the fundamental inequality of Capitalisim.
Well that title might be heresey of the first order from a born and raised American. But I must say for the last few years I have struggled with a problem I percieve with our principle system of economics which also serves largely as the foundation of our society.
First off, I claim no special qualifications to make such assertions as I am about to embark on. I have done no "research" into the issue, and have no real intention of doing so. However the idea that capitalisim has inherrent flaws of inequality is hardly a new idea. Afterall the flaws of capitalisim serve as the basis of Karl Marx's arguments in favor of communisim. The question is whether or not the flaws are large enough that the system is doomed to fail, or whether or not we can ever reach a state of affairs where the flaws become problematic. I am not really sure the lack of equality is a 'problem' per say. I actually tend to think of it more as a function of the system. One which is not inherently good or bad. It simply is a part of it. An unavoidable part. This is not to say this facet of capitalisim may not proove to be a problem in the long run. Indeed if this facet of its nature is probably theone most likely to make it as unacceptable to some future society as the concept of "the devine right of kings" is to democracies. As for whether or not I think we have reached that point ? Guess you will have to read on to find out.
The title of this post is "on the inequality of Capitalisim". By that I do not mean that there is inequality in some capitalisim, like say perhaps American, or European, but that capitalisim itself is founded and based on inequality. As to why I make this statement ? Let us deconstruct the "American Dream". This is at its simplest the concept in our society that says if you work hard you will be rewarded. That anyone can rise to any hights from any beginings. It is the social embodiment of America as the land of equal opportunity. Today we do not think much of it but in times past the concept that someone, anyone, could rise 'above their means' was largely considered to be out of the ordinary in an established society. But it is this simple beliefe which assures us of inequality. It also assures us that those who are most capable will rise to the top. IE merit will be rewarded. Thus while we must have inequality for the system to work, the system will ensure that those who deserve the most have the most. The most being whatever it is that you desire. Good meet bad... bad meet good.
So why does equal opportunity make for a system of inequality? Well consider it by way of analogy. To say equal opportunity is about equality is like saying a sports leauge is about every one winning. The idea of a sports leauge where everyone wins is pretty silly, afterall if no one looses then why play the game? Just like in sports where you must have a winner and a loser so to the same logic applies in a capitalisitic economy. In sports there is nothing wrong with loosing. And I am not convinced there is anything wrong with losing in capitalisim. That does not mean there are no losers. Just like only one team can be crowned a champion so to can only one person achieve the epitome of success. For arguments sake let us use the occupation CEO of a fourtune 500 company as the epitome of success in the American Dream. There are only 500 fourtune 500 companies thus only 500 offices that allow someone the position which I have just decided to declare the epitome of success. Now no matter how hard the 240 million some odd of us in this nation work there can only be 500 of us that will achieve this goal. Pick your own target and it always will be the case. Put into more general terms what I am saying is that only a very very very small few can reach the highest hights. In a pure and idealistic capitalistic society this is acceptable because that few will be those who did the most to earn it.
Sports are simply an abstraction of this concept. One which represents the pure ideal of the system and one in which it can be kept largely isolated from the realities of the world. That is why people get so upset when breaches of that purity are exposed. Like Steroid use, doping, corked bats, drugged horses, rigged fights etc... People watch sports because by and large we firmly believe that those who earn it will be rewarded. The sport itself does not matter, the means of determining who is better is irrelevant to the idea that those who demonstrate superiority will be recognised and rewarded with success. Now lets invert that. We also assume that means whoever comes in dead last did the least and as such deserve no recognition for their efforts and certainly no reward. However, regardless of whether or not those at the top or those at the bottom arrive fairly at their destinations it is a function of the system that there will be a champion and someone who is last. There is no means by which you will have more than one champion at the end of a baseball season and no means by which you will not have someone who ends in last place no matter how well all the teams play.
Now, by and large we don't mind when those that work hard in real life are rewarded. Afterall merit is a damn fine means by which to apportion scarce goods, Yet we also tend to forget that for every person who reaches the top there is also somone that must reach the bottom. For in a system that ranks people there is and always will be a bottom. Now as I have said I am not sure this is a 'problem' in such that it should not be the case. However it is a function of the system to determin not only who is at the top but who is at the bottom and as such it is a system of inequality. Capitalisim is based and founded on determining the inequality of the people engaged in it. Considering human nature and our desire to distinguish ourselves from each other it is not difficult to see why it is such a succesfull system of economics .
So where does this become something that bothers me? I don't think I have said anything profound. I am sure there are entire books written about this very fact to which I am reffering and no doubt I have this perception largely becasue I have been exposed to numerous people who have said/written something similar... such is the joy of a decent education. Where it begins to bother me is that the system is not one which works in a vacume for each individual. In order for you to succeed someone else must fail to succeed. Since success is largely measured by money that means for you to succeed someone must be denied money or in otherwords access to the basic medium of exchange for goods in our society. If someone is unsuccessfull enough they starve, become homeless etc...
Now, I am not suggesting something so simple as a one to one correspondence between those who succeed and those who fail. However at the same time I think it is easy to realize the current state of affairs isn't like a test in a classroom where it is possible for every one to make an A. It is more like a grading curve applied in place of the absolute system. There is no set formulae for success becasue it is determined entirely by what everyone is doing around you and thus whoever is doing the best sets the curve for the rest of us. This is what I mean when I say in order for someone to succeed someone has to fail. Thus equal opportunity is not a concept of equality. It is more like a game of muscial chairs. Everyone has an equal opportunity to sit in a chair, but not everyone can becasue there are always fewer chairs than people trying to sit in them.
Now in muscial chairs someone who is left standing faces no problems because of this. But in reality those who fail to find a seat can face real problems of survival and their reasons for not finding a seat can be just as arbitrary as playing a game of muscial chairs where a chair is removed specifically so someone does not have a seat. Now in a situation where such basic needs as food, shelter and clothing etc are truly scarce I have no problems with this state of affairs. Life ain't fair and I am not suggesting that we try to make it so. For the record, if you hadn't figured it out yet, Life isn't fair. But when a homeless person can die of exposure when there are thousands if not millions of goods sitting on shelves which could save their life is in a word appalling. That someone could starve in a nation where massive amounts of unused food is thrown into the garbage on a daily basis is unacceptable.
Capitalisim has been successfull. So completely and extrodinarilly successfull that it may well have managed to do something many thought impossible. It may have succeeded in placing us in a state of affairs where it has outgrown its usefullness. If that is true I am sure Karl Marx would be dancing a jig if he were around to see it. This is not to say I think Communisim is the answer, far from it actually, but he is the only ready example that comes to mind of someone who concieved of a state of affairs where capitalisims negatives would outweigh its usefulness. In concept this takes a very very very odd state of affairs from the standpoint of history. It takes a very propserous state of affiars to reach such a point. I contend that we have or are well on our way to reaching such a state of affairs.
So how successfull are we ? How prosperous is life in the western world. Well, by and large the only other concept of a time of plenty that approaches modern day western culture to my thinking would be "The Garden of Eden". If you want to read something that places our current position of well being into perspective go Read Greg Easterbrook's book called "The Progress Paradox". While I don't agree with everything he has to say I think he does an admirable job of showing just how successfull we really are right now.
The problem is that such a level of success has put us in a situation where we face untennable situtaions like people who can starve while as a nation we are facing an epidemic of obesity. I mean really stop and think about that for a moment. I mentioned overexposure and again stop and really think about what it means that those people often die withen a mile or less of a store that sells the items that could have saved their life. Hell they probably died withen a few yards of shelter that if they had been allowed to sleep inside it would have saved their lives. All in all When there isn't enough to go around it is an acceptable state of affairs that some will have to go lacking. In a time of plenty it is asinine and ultimately unaccepable. A better solution must be found. However, I think so long as we cling to capitalisim we are fated to maintain a system which has this state of affairs as an inherent flaw. So sooner or later we must somehow implement a system of economics to which the basic necessities of life are not attached as a measuring stick.
Not real sure how that can be done... guess I will have to think more about that. I have some rather vauge notions that the blending of capitalisitic ideas and those of communisim is the direction that the answer lies... and I have a vauge argument in my head that says if you look at the western world and slowly recovering nations of the USSR you see the process of hammering out how to do this underway at this very moment being undertaken from the direction of both extremes... ie communisim merging to capitalisim, and capitalisim merging to communisim. I also have a notion that there is a looming problem with the general world wide adoption of capitalisim because if and when the world in general reaches the point where there are those left out in the cold because of the inherent inequality of the system rather than becasue of real scarcity it is not something that will be lived with.
First off, I claim no special qualifications to make such assertions as I am about to embark on. I have done no "research" into the issue, and have no real intention of doing so. However the idea that capitalisim has inherrent flaws of inequality is hardly a new idea. Afterall the flaws of capitalisim serve as the basis of Karl Marx's arguments in favor of communisim. The question is whether or not the flaws are large enough that the system is doomed to fail, or whether or not we can ever reach a state of affairs where the flaws become problematic. I am not really sure the lack of equality is a 'problem' per say. I actually tend to think of it more as a function of the system. One which is not inherently good or bad. It simply is a part of it. An unavoidable part. This is not to say this facet of capitalisim may not proove to be a problem in the long run. Indeed if this facet of its nature is probably theone most likely to make it as unacceptable to some future society as the concept of "the devine right of kings" is to democracies. As for whether or not I think we have reached that point ? Guess you will have to read on to find out.
The title of this post is "on the inequality of Capitalisim". By that I do not mean that there is inequality in some capitalisim, like say perhaps American, or European, but that capitalisim itself is founded and based on inequality. As to why I make this statement ? Let us deconstruct the "American Dream". This is at its simplest the concept in our society that says if you work hard you will be rewarded. That anyone can rise to any hights from any beginings. It is the social embodiment of America as the land of equal opportunity. Today we do not think much of it but in times past the concept that someone, anyone, could rise 'above their means' was largely considered to be out of the ordinary in an established society. But it is this simple beliefe which assures us of inequality. It also assures us that those who are most capable will rise to the top. IE merit will be rewarded. Thus while we must have inequality for the system to work, the system will ensure that those who deserve the most have the most. The most being whatever it is that you desire. Good meet bad... bad meet good.
So why does equal opportunity make for a system of inequality? Well consider it by way of analogy. To say equal opportunity is about equality is like saying a sports leauge is about every one winning. The idea of a sports leauge where everyone wins is pretty silly, afterall if no one looses then why play the game? Just like in sports where you must have a winner and a loser so to the same logic applies in a capitalisitic economy. In sports there is nothing wrong with loosing. And I am not convinced there is anything wrong with losing in capitalisim. That does not mean there are no losers. Just like only one team can be crowned a champion so to can only one person achieve the epitome of success. For arguments sake let us use the occupation CEO of a fourtune 500 company as the epitome of success in the American Dream. There are only 500 fourtune 500 companies thus only 500 offices that allow someone the position which I have just decided to declare the epitome of success. Now no matter how hard the 240 million some odd of us in this nation work there can only be 500 of us that will achieve this goal. Pick your own target and it always will be the case. Put into more general terms what I am saying is that only a very very very small few can reach the highest hights. In a pure and idealistic capitalistic society this is acceptable because that few will be those who did the most to earn it.
Sports are simply an abstraction of this concept. One which represents the pure ideal of the system and one in which it can be kept largely isolated from the realities of the world. That is why people get so upset when breaches of that purity are exposed. Like Steroid use, doping, corked bats, drugged horses, rigged fights etc... People watch sports because by and large we firmly believe that those who earn it will be rewarded. The sport itself does not matter, the means of determining who is better is irrelevant to the idea that those who demonstrate superiority will be recognised and rewarded with success. Now lets invert that. We also assume that means whoever comes in dead last did the least and as such deserve no recognition for their efforts and certainly no reward. However, regardless of whether or not those at the top or those at the bottom arrive fairly at their destinations it is a function of the system that there will be a champion and someone who is last. There is no means by which you will have more than one champion at the end of a baseball season and no means by which you will not have someone who ends in last place no matter how well all the teams play.
Now, by and large we don't mind when those that work hard in real life are rewarded. Afterall merit is a damn fine means by which to apportion scarce goods, Yet we also tend to forget that for every person who reaches the top there is also somone that must reach the bottom. For in a system that ranks people there is and always will be a bottom. Now as I have said I am not sure this is a 'problem' in such that it should not be the case. However it is a function of the system to determin not only who is at the top but who is at the bottom and as such it is a system of inequality. Capitalisim is based and founded on determining the inequality of the people engaged in it. Considering human nature and our desire to distinguish ourselves from each other it is not difficult to see why it is such a succesfull system of economics .
So where does this become something that bothers me? I don't think I have said anything profound. I am sure there are entire books written about this very fact to which I am reffering and no doubt I have this perception largely becasue I have been exposed to numerous people who have said/written something similar... such is the joy of a decent education. Where it begins to bother me is that the system is not one which works in a vacume for each individual. In order for you to succeed someone else must fail to succeed. Since success is largely measured by money that means for you to succeed someone must be denied money or in otherwords access to the basic medium of exchange for goods in our society. If someone is unsuccessfull enough they starve, become homeless etc...
Now, I am not suggesting something so simple as a one to one correspondence between those who succeed and those who fail. However at the same time I think it is easy to realize the current state of affairs isn't like a test in a classroom where it is possible for every one to make an A. It is more like a grading curve applied in place of the absolute system. There is no set formulae for success becasue it is determined entirely by what everyone is doing around you and thus whoever is doing the best sets the curve for the rest of us. This is what I mean when I say in order for someone to succeed someone has to fail. Thus equal opportunity is not a concept of equality. It is more like a game of muscial chairs. Everyone has an equal opportunity to sit in a chair, but not everyone can becasue there are always fewer chairs than people trying to sit in them.
Now in muscial chairs someone who is left standing faces no problems because of this. But in reality those who fail to find a seat can face real problems of survival and their reasons for not finding a seat can be just as arbitrary as playing a game of muscial chairs where a chair is removed specifically so someone does not have a seat. Now in a situation where such basic needs as food, shelter and clothing etc are truly scarce I have no problems with this state of affairs. Life ain't fair and I am not suggesting that we try to make it so. For the record, if you hadn't figured it out yet, Life isn't fair. But when a homeless person can die of exposure when there are thousands if not millions of goods sitting on shelves which could save their life is in a word appalling. That someone could starve in a nation where massive amounts of unused food is thrown into the garbage on a daily basis is unacceptable.
Capitalisim has been successfull. So completely and extrodinarilly successfull that it may well have managed to do something many thought impossible. It may have succeeded in placing us in a state of affairs where it has outgrown its usefullness. If that is true I am sure Karl Marx would be dancing a jig if he were around to see it. This is not to say I think Communisim is the answer, far from it actually, but he is the only ready example that comes to mind of someone who concieved of a state of affairs where capitalisims negatives would outweigh its usefulness. In concept this takes a very very very odd state of affairs from the standpoint of history. It takes a very propserous state of affiars to reach such a point. I contend that we have or are well on our way to reaching such a state of affairs.
So how successfull are we ? How prosperous is life in the western world. Well, by and large the only other concept of a time of plenty that approaches modern day western culture to my thinking would be "The Garden of Eden". If you want to read something that places our current position of well being into perspective go Read Greg Easterbrook's book called "The Progress Paradox". While I don't agree with everything he has to say I think he does an admirable job of showing just how successfull we really are right now.
The problem is that such a level of success has put us in a situation where we face untennable situtaions like people who can starve while as a nation we are facing an epidemic of obesity. I mean really stop and think about that for a moment. I mentioned overexposure and again stop and really think about what it means that those people often die withen a mile or less of a store that sells the items that could have saved their life. Hell they probably died withen a few yards of shelter that if they had been allowed to sleep inside it would have saved their lives. All in all When there isn't enough to go around it is an acceptable state of affairs that some will have to go lacking. In a time of plenty it is asinine and ultimately unaccepable. A better solution must be found. However, I think so long as we cling to capitalisim we are fated to maintain a system which has this state of affairs as an inherent flaw. So sooner or later we must somehow implement a system of economics to which the basic necessities of life are not attached as a measuring stick.
Not real sure how that can be done... guess I will have to think more about that. I have some rather vauge notions that the blending of capitalisitic ideas and those of communisim is the direction that the answer lies... and I have a vauge argument in my head that says if you look at the western world and slowly recovering nations of the USSR you see the process of hammering out how to do this underway at this very moment being undertaken from the direction of both extremes... ie communisim merging to capitalisim, and capitalisim merging to communisim. I also have a notion that there is a looming problem with the general world wide adoption of capitalisim because if and when the world in general reaches the point where there are those left out in the cold because of the inherent inequality of the system rather than becasue of real scarcity it is not something that will be lived with.
Friday, June 17, 2005
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