I.
A spectre is haunting Europe. Several spectres, actually. One of them is the spectre of communism. The others are literal ghosts. They live in abandoned mansions. Sometimes they wail eerily or make floorboards creak. If you arrange things just right, you might be able to capture them on film.
Or at least this must have been the position of the founders of the Fabian Society, Britain’s most influential socialist organization. In 1883, ghost hunters Frank Podmore and Edward Pease spent the night at the same West London haunted house, looking for signs of the paranormal. As the night dragged on without any otherworldly visitations, they passed the time in conversation and realized they shared an interest in communist thought. The two agreed to meet up again later, and from these humble beginnings came one of the most important private societies in the history of the world.
Before the Fabians, communism was a pastime of wild-eyed labor activists promising bloody revolution. The Society helped introduce the idea of incremental democratic socialism – not just in the sense of Bernie Sanders, but in the sense of the entire modern welfare state. In the process, they pretty much invented the demographic of champagne-sipping socialist intellectuals. Famous Society members included George Bernard Shaw, Muhammed Ali Jinnah, Jawaharlal Nehru, and Tony Blair; Fabian ideas were imported wholesale into the economic policies guiding newly-independent India, Nigeria, Egypt, Syria, among others.
I became interested in the Fabians after reading Kerry Vaughn’s excellent essay on the early neoliberal movement. I’m tempted to say “on the early neoliberal conspiracy”, choosing that not because any of what they did was secret – it wasn’t – but because it seems like the only term that describes their efficiency. A small group of people who wanted to change the world founded an organization, garnered influence in a bunch of little ways, thought strategically and acted with discipline. And after decades of work they got into positions of power and successfully changed the world, shifting the economic consensus from state socialism to free(er) markets.
And the Fabians seem like the same story, told in reverse. A small group of idealists, thinking strategically and acting with discipline, moved democratic socialism from the lunatic fringe to the halls of intellectual power. If aspiring generals study Alexander the Great and Napoleon, surely aspiring intellectual movements should study the neoliberals and the Fabians. Kerry’s essay on neoliberalism was great, but I really wanted to know how the Fabians progressed from failed ghost hunters to puppetmasters controlling half of the twentieth century.
Edward Pease’s The History Of The Fabian Society (Amazon, Project Gutenberg) seemed like a promising starting point, since it was written by one of the Society’s founders and top officials. Pease turns out to be an engaging writer with a good sense of humor. His book, however, is a bit puzzling. It paints a Fabian Society which is chronically disorganized and which kind of hilariously bumbles into global power despite itself. I am not sure how much this reflects reality and how much this reflects Edward Pease’s personal external locus of control and/or weird theory of history – but if you want a story about sinister socialist conspirators using their genius to upend the existing order, this isn’t really it.
Still, it was informative, funny, and not totally absent of practical applications, so below I include some discussion and interesting passages.
II.
After the original ghost hunt, Pease and Podmore met again in a few other situations and eventually got some people together to found The Fellowship Of New Life, agreeing:
That an association be formed whose ultimate aim shall be the reconstruction of Society in accordance with the highest moral possibilities
Later fleshed out as:
OBJECT: The cultivation of a perfect character in each and all.
PRINCIPLE: The subordination of material things to spiritual
FELLOWSHIP: The sole and essential condition of fellowship shall be a single-minded, sincere, and strenuous devotion to the object and principle.
Under these auspices, they gathered a collection of upper-middle-class bureaucrats whose names sounded kind of like C.S. Lewis villains, like Hubert Bland and Percival Chubb, who agreed to meet monthly and discuss how to achieve their goals. Soon the political discussions started to crowd out the more philosophical ones, and so the politically-minded Fellows branched off to form their own society. Since they believed that Communists should avoid talk of violent revolution and instead bide their time working within the system, they named themselves the Fabian Society after Roman general Quintus Fabius Maximus, famous for his delaying tactics. According to one of their pamphlets:
For the right moment you must wait, as Fabius did most patiently, when warring against Hannibal, though many censured his delays; but when the time comes you must strike hard, as Fabius did.
(Pease adds that “It has been pointed out by Mr. H.G. Wells, and by others before him, that Fabius never did strike hard”)
They gradually settled into a routine. Every fortnight, the Society would sponsor a lecture, sometimes by a member, sometimes by a guest, on some aspect of communism. Afterwards there would discussion and socializing (the type where you make friends, not the type where you nationalize industries). Pease notes that not only did this educate people, but the existence of a fortnightly activity kept people connected to the movement and the other members, and made them more likely to stick around and get engaged in other ways.
Sometimes the lectures would include or be replaced by debates among members on aspects of communist thought or policy. Once again, the apparent primary objective of learning ended up being overshadowed by a secondary benefit: all of the Fabians became excellent debaters. This became very important when the organization began fielding candidates for local government. According to George Bernard Shaw, “It was in that way that Bradlaugh, for instance, graduated from being a boy evangelist to being one of the most formidable debaters in the House of Commons. And the only opponents who have ever held their own against the Fabians in debate have been men like Mr. Levy or Mr. Foote, who learnt in the same school.”
When a lecture was particularly successful, the Fabians would turn it into a traveling tour. During this period British intellectual life was pretty centered in London, and when that city’s intellectual stars would go give lectures in Manchester or Liverpool, they could fill theaters. Pease describes one trip in 1890, where a half-dozen or so prominent Fabians went on a tour of North Britain:
The lectures, except for a few days during the contest at Eccles, were extremely well reported, and even the ‘Manchester Guardian’ (the ‘Daily News’ of the manufacturing districts) came out with an approving leader. The audiences throughout the campaign steadily increased and followed the lectures with close and intelligent attention. In particular the members of Liberal working men’s clubs constantly declared that they had never heard ‘the thing put so straight’ before, and complained that the ordinary party lecturers were afraid or unwilling to speak out. Men who frankly confessed that they had hesitated before voting for the admission of our lecturers to their clubs were enthusiastic in welcoming our message as soon as they heard it. The vigorous propaganda in the manufacturing districts of the S.D.F. branches has been chiefly carried on by means of outdoor meetings. Its effect upon working-class opinion, especially among unskilled labourers, has been marked and important, but it has entirely failed to reach the working-men politicians who form the rank and file of the Liberal Associations and Clubs, or the ‘well-dressed’ Liberals who vaguely desire social reform, but have been encouraged by their leaders to avoid all exact thought on the subject.”
But by far the most important activity of the Fabians were their pamphlets. They got into this almost by accident. Pease says the first pamphlet was written by W.L. Phillips, whom he frankly describes as “a house-painter, the only genuine working man in our ranks”. The Fabians liked it and agreed to finance 2,000 copies. It discussed who the Fabians were, why they thought capitalism was bad, and how socialism was going to be better. Pease describes it as asserting that “we had with considerable courage set out to reconstruct society, and we frankly confessed that we did not know how to go about it.” The message was not a hit.
This was when the Society experienced its great stroke of luck. Three of the greatest writers and intellectuals of the era joined the movement: George Bernard Shaw in September 1884, Annie Besant in April 1885, and Sidney Webb that May.
Shaw was one of history’s most famous authors and playwrights. He was charismatic, shockingly prolific, and also had a talent for organizing things and getting people to agree with him.
Besant was described by Pease as “then notorious as an advocate of Atheism and Malthusianism, [and] the heroine of several famous law cases” – by which he was referring to attempts to censor her for writing about birth control, feminism, and other topics. She was well-known and beloved by the lower classes, and a fiery speaker who was good at riling up an auditorium.
Webb was a sort of 19th-century Ezra Klein, taking advantage of the first stirrings of statistics as a science to make himself an authoritative-sounding wonk. He was also an amazing writer, though more in the sense of viral popularizations of facts and explanations than in the Shaw sense of revolutionizing literature.
It wouldn’t quite be right to say the Society took advantage of these people’s talents; it might be more accurate to say nobody could stop them. Shaw, especially, sort of waltzed into the Society, took it over by force of personality and obviously being better than anyone else, and started churning out pamphlets as fast as everyone could print them. They, and four lesser lights who also helped with the pamphlet writing, became known as the seven Fabian Essayists. With their skills, the Fabian Pamphlets started catching on – to the point where, by 1891, a hundred thousand copies had been distributed and they more or less shaped the man in the street’s concept of socialism.
Webb’s work in particular helped give the Fabian Society an extra role – that of the modern think tank. Under his lead, quantitatively-minded Fabians queried various government records departments to try to collect and publicize numbers that would be useful in making the case for socialism – facts about how much of the wealth capitalists were keeping to themselves, how many poor people there were, what their conditions were like. Pease says that “The statistical facts were at that time practically unknown. They had to be dug out, one by one, from obscure and often unpublished sources” and so “at this period the Society had a virtual monopoly in the production of political pamphlets in which facts and figures were marshalled in support of propositions of reform in the direction of Socialism.”
By 1900, all of these projects were big successes, and the Society began to consider expansion. They encouraged the creation of branch societies in different towns and countries, and student societies in various universities. Pease was generally unimpressed with how these worked out. He felt experience had proven most of the people based outside London to be intellectually second-rate and without much to contribute. As for student societies, there was so much churn as students came and left after four years that he didn’t think anything useful ever happened there.
He was a little more optimistic about some other projects, including a lending library for socialist books, an office that gave legal advice to workers or other people having socialism-related legal disputes, and an effort to found a university studying items of interest to Fabians (which became the London School of Economics). And above all, he was impressed with the Fabians’ project to intervene in local politics. Although the Society was too small to field national-level candidates, it did impressive work filling up school boards, minor bureaucracies, and sub-city-level local councils with Fabian socialists. This wasn’t just an issue of campaigning. It was an issue of talent development. Some well-spoken well-educated person would go to the local Fabian meeting in North Whatevershire, and get noticed, and some veteran would approach him and say that North Whatevershire had an unusually reactionary or vulnerable council, and had he ever considered himself for the seat? And he would say of course not, what, me a politician, that’s crazy. And the veteran would encourage him, and walk him through the process of registering for an election, and give him advice on the minimal amount of campaigning necessary at this level, and then a few months later he’d be a councillor. Again, the Fabians did this partly because they cared what happened on tiny villages’ school boards, but also partly because the school board members of today are the people running for higher offices tomorrow, and if you can get someone’s foot in the door and get them to start learning the ropes of politics, you’re in a really good place.
There were a few other things. Occasionally they would hold conferences. Sometimes they would meet up with socialists from other countries or parties and try to sign accords. They had various worthy intellectual projects, including putting out lists of what books people should read to learn about socialism, or donating socialism-related books to the local library. But these were always a small part of their work. The core of the Fabian strategy was lectures, debates, talent cultivation, and – above all – really well-written pamphlets.
III.
Why was the Fabian Society so successful?
By “so successful”, I mean that the Fabians’ manifesto basically reads like a description of the average modern democracy’s public policies. A set of Fabian demands called the True Radical Programme included an 8-hour workday, women’s suffrage, paying MPs a salary, capital gains tax, public education, school lunches, and railroad nationalization. Keep in mind that they called it the True Radical Programme because it was supposed to be more radical than various other groups’ Radical Programmes. They considered these totally insane fringe demands. And they got them all.
We can debate how important the Fabian Society was in this. Certainly they seem to have picked a winning horse, been on the right side of history, et cetera. But people at the time thought the Fabian Society was important. It became famous (or infamous, depending on your political leaning) and heavily associated with exactly these sorts of topics. If at least a small portion of their success can be attributed to them, how?
Pease makes it very clear he doesn’t think it was because they were especially competent or hard-working. The Society had a hands-off supply to getting new members; if you wanted to be a member, you could apply, and get a sponsor, and eventually someone would probably vote on your membership – but there weren’t recruitment drives or anything. They were equally clueless about money; whenever they had any, it was usually because it fell into their laps by coincidence, usually random rich people giving them donations. Pease, who doesn’t seem to find money very interesting, never mentions whether the Society charges dues or not; if it did, they seem to have been minimal. In 1886, he lists the Society’s total annual budget as £35, which I think corresponds to about £3500 today. Through much of the Society’s history, its meetings took place in members’ houses or in whatever random places people could get for cheap. There was constant discussion of “maybe if we made an effort to get more money we could promote socialism more effectively”, but nobody seems to have ever done anything about it. It wasn’t an ideological issue – nobody was refusing to participate in the degenerate capitalist system or anything. They just don’t seem to have been very good at doing things. Someone would mention raising more money, they would form a committee to look into the issue, and the committee would get bored and wander off.
Even when the Fabians managed to throw something together, it always had a sort of doddering-eccentric-British-gentry air about it, like nobody was really that concerned with whether or not it accomplished anything. Pease describes the Fabians’ first big convention, where experts were invited to lecture the delegates on the issues of the day: “The most successful paper was by a strange gentleman whom we had taken on trust as a Socialist, but who turned out to be an enthusiast on the subject of building more harbors.”
The Society’s members tended to be strange people, mercurial and hard to keep on task. Occasionally they would get distracted and forget about communism entirely, running off to worry about art or philosophy or ghost-hunting or something. One of the group’s most influential leaders, Annie Besant, dropped out almost overnight to join a cult, move to India, study ESP, adopt a young child whom she claimed was the Messiah, and after many complicated twists of fate become President of the Indian National Congress. This kind of thing was always happening to the Fabians, and it really got in the way of the cause.
So why was the Fabian society so successful? Pease identifies several factors.
First, it was (arguably) the first Socialist organization in Britain. Pease thinks this is important not just because it got first mover advantage, but because it didn’t have to justify itself to anyone:
The Fabian Society has never had to seek acceptance by the rest of the Socialist movement. At any later date it would have been impossible for a relatively small middle-class society to obtain recognition as an acknowledged member of the Socialist confraternity. We were thus in a position to welcome the formation of working-class Socialist societies, but it is certain that in the early days they would never have welcomed us.
Second, it lucked into getting a couple of bona fide geniuses:
The second and chief reason for the success of the Society was its good fortune in attaching to its service a group of young men, then altogether unknown, whose reputation has gradually spread, in two or three cases, all over the world, and who have always been in the main identified with Fabianism. Very rarely in the history of voluntary organisations has a group of such exceptional people come together almost accidentally and worked unitedly together for so many years for the furtherance of the principles in which they believed. Others have assisted according to their abilities and opportunities, but to the Fabian Essayists belongs the credit of creating the Fabian Society…It was this exceptional group of leaders, all intimate friends, all loyal to each other, and to the cause they were associated to advocate, and all far above the average in vigour and ability, that in a few years turned an obscure drawing-room society into a factor in national politics.
Third, the Fabians were bourgeois in every sense of the word. They knew how to move around in bourgeois society and get it to work for them. Pease talks about how (for him) one of the highlights of the Fabian Conference was how well-designed the stationery was:
It also, by the way, showed off our pretty prospectus with the design by Crane at the top, our stylish-looking blood-red invitation cards, and the other little smartnesses on which we then prided ourselves. We used to be plentifully sneered at as fops and arm-chair Socialists for our attention to these details; but I think it was by no means the least of our merits that we always, as far as our means permitted, tried to make our printed documents as handsome as possible, and did our best to destroy the association between revolutionary literature and slovenly printing on paper that is nasty without being cheap. One effect of this was that we were supposed to be much richer than we really were, because we generally got better value and a finer show for our money than the other Socialist societies.
I used to be upset when charitable and activist organization would have really nice offices with lots of art on the wall, call in expensive catered lunches to their events, and hire a bunch of graphics design and PR people to make everything look perfect. Wasn’t this excessive? Shouldn’t they be spending their money and energy on the cause? Pease argues no. There were hordes of unwashed socialists standing on soapboxes raving about Revolution. The Fabians’ comparative advantage was looking respectable. For a cause like socialism, where an important part of the battle is moving it into the Overton Window, handing out really well-designed stationery was important activism in and of itself.
Fourth, the Fabians accepted their role as the Socialist Society For Middle Class People as a valuable part of the overall socialist ecosystem. They refused to condemn themselves as exclusionary, or worry they were too bourgeois to have a right to speak, or feel guilty for not having better representation of poor people. They seemed to be working from a model where middle-class and working-class people had different mores and interests, and combining both of them into one society would just make everybody angry and unhappy. Pease explicitly understood that the working class societies had things they were better at and should focus on (like mass politics and riling up the base) and the Fabian Society had other things it was better at and should focus on (like think-tank-style white papers on the benefits of socialism). He also explicitly understood that an important part of having a socialist society was the social aspect – come for the politics, come back because you like the company or you’re looking for someone to date or whatever. At this point there wasn’t much social mixing of British classes, and there wasn’t really a script for having a group that was half upper-middle-class and half workmen. Because the Fabians got so many of their advantages from being bourgeois, they wanted to protect that status at all costs.
Regret has been sometimes expressed, chiefly by foreign observers, that the Society has maintained its separate identity. Why, it has been asked, did not the middle-class leaders of the Society devote their abilities directly to aiding the popular organisations, instead of “keeping themselves to themselves” like ultra-respectable suburbans?
If this had been possible I am convinced that the loss would have exceeded the gain…the Fabians were not suited either by ability, temperament, or conditions to be leaders of a popular revolutionary party. Mrs. Besant with her gift of splendid oratory and her long experience of agitation was an exception, but her connection with the movement lasted no more than five years. Of the others Shaw did not and does not now possess that unquestioning faith in recognised principles which is the stock-in-trade of political leadership: and whilst Webb might have been a first-class minister at the head of a department, his abilities would have been wasted as a leader in a minority. But there was a more practical bar. The Fabians were mostly civil servants or clerks in private employ. The methods of agitation congenial to them were compatible with their occupations: those of the Social Democrats were not. Indeed in those days no question of amalgamation was ever mooted.
Fifth, the Fabians protected a sort of middle-class-liberal atmosphere of intellectual freedom and what Pease referred to as an inability to take themselves seriously – not in the sense of not being committed, but in the sense where they would laugh at anyone who seemed too pompous or too certain of anything. Pease seems to have thought that the lower classes’ lack of a liberal education and likely religious upbringing made them susceptible to a dogmatic orthodox Marxism marked by witch-hunts to weed out revisionists. Most British intellectuals wouldn’t have been willing to put up with such a climate, and so wouldn’t have been able to get into socialism. The Fabian Society provided an alternative space where the sort of open debate that intellectuals and middle-class people take for granted was available and encouraged:
The Social Democrats of those days asserted that unquestioning belief in every dogma attributed to Marx was essential to social salvation, and that its only way was revolution, by which they meant, not the complete transformation of society, but its transformation by means of rifles and barricades; they were convinced that a successful repetition of the Commune of Paris was the only method by which their policy could prevail. The Fabians realised from the first that no such revolution was likely to take place, and that constant talk about it was the worst possible way to commend Socialism to the British working class. And indeed a few years later it was necessary to establish a new working-class Socialist Society, the Independent Labour Party, in order to get clear both of the tradition of revolutionary violence and of the vain repetition of Marxian formulas. If the smaller society had merged itself in the popular movement, its criticism, necessary, as it proved to be, to the success of Socialism in England, would have been voted down, and its critics either silenced or expelled.
Also:
The case for this project was based, strange to say, not on any history but on the Marxian analysis of the origin of the value of commodities, and no man who did not understand this analysis, or pretend to understand it, was fit to be called a “comrade.” The economic reasoning which “proved” this “law” was expressed in obscure and technical language peculiar to the propagandists of the movement, and every page of Socialist writings was studded with the then strange words “proletariat” and “bourgeoisie.”
Lastly, the whole world, outside the socialist movement, was regarded as in a conspiracy of repression. Liberals (all capitalists), Tories (all landlords), the Churches (all hypocrites), the rich (all idlers), and the organised workers (all sycophants) were treated as if they fully understood and admitted the claims of the Socialists, and were determined for their own selfish ends to reject them at all costs. Although the Fabian propaganda had no doubt had some effect, especially amongst the working-class Radicals of London, and although some of the Socialist writers and speakers, such as William Morris, did not at all times present to the public the picture of Socialism just outlined, it will not be denied by anybody whose recollections reach back to this period that Socialism up to 1890 was generally regarded as insurrectionary, dogmatic, Utopian, and almost incomprehensible.
“Fabian Essays” presented the case for Socialism in plain language which everybody could understand. It based Socialism, not on the speculations of a German philosopher, but on the obvious evolution of society as we see it around us. It accepted economic science as taught by the accredited British professors; it built up the edifice of Socialism on the foundations of our existing political and social institutions: it proved that Socialism was but the next step in the development of society, rendered inevitable by the changes which followed from the industrial revolution of the eighteenth century. It is interesting after twenty-five years to re-read these essays and to observe how far the ideas that inspired them are still valid, and how far the prophecies made have been fulfilled.
Sixth, the Fabians tried to be a “big tent”. Aside from having room from people who weren’t orthodox Marxists, they generally avoided purges and purity tests. This wasn’t always easy for them. Just as they were reaching the big time, Britain got involved in the Boer War. Some of the Fabians were patriots who wanted to support the British cause; others thought the British government was evil and reflexively sided with its enemies, and a few even had various principles, some of which sound really weird to modern ears, for example this supposedly-socialist opinion:
As for South Africa, “however ignorantly [our] politicians may argue about it, reviling one another from the one side as brigands, and defending themselves from the other with quibbles about waste-paper treaties and childish slanders against a brave enemy, the fact remains that a Great Power, consciously or unconsciously, must govern in the interests of civilisation as a whole; and it is not to those interests that such mighty forces as gold-fields, and the formidable armaments that can be built upon them, should be wielded irresponsibly by small communities of frontiersmen. Theoretically they should be internationalised, not British-Imperialised; but until the Federation of the World becomes an accomplished fact we must accept the most responsible Imperial federations available as a substitute for it”
All of this threatened to tear the Society apart, with various parties demanding that people be expelled for supporting the war or for opposing it. Against this, the veterans of the Society, including Pease, Webb, and Bernard Shaw, insisted upon the policy that anyone who mouthed agreement with the Principles of the Society – a short document containing only the broadest possible statements about socialism – was a member in good standing. When they finally got a resolution passed officially declaring that the Fabians had no position on the Boer War, Pease described it as “saving the Society”. The same happened during World War I and even various peacetime elections, usually with Labour supporters trying to make Labour membership a condition of Fabian membership. All such resolutions were quashed mercilessly by the Fabian leaders except one – the entire female membership of the Society threatened to walk en masse unless the Society enforced conformity with belief in women’s suffrage. The leadership grudgingly agreed.
Seventh, the Fabians’ namesake long-term outlook gave them an important role in cultivating talent, and some of the norms and assumptions of their organization seemed to work well for this. Pease says several times that “Socialists are born, not made”. He didn’t expect forceful action – recruitment campaigns, branch organizations, or the like – to have any effect. Instead, he favored a soft touch. Have the sort of intellectual atmosphere that talented people would be attracted to. Gradually draw them in with interesting social and intellectual activities. Once they’re attached, get them in on the first rung of some ladder or other – local politics, informal debate, small-time pamphlet writing. Have a few geniuses around who can recognize other geniuses. Then have positions to put people in once they’re worthy of it – whether it’s the lecture circuit, the propaganda business, or a university for them to teach at.
The value of the plan for a propagandist society is largely this, that experience shows that people can only work together efficiently when they know each other. Therefore in practice political and many other organisations find it necessary to arrange garden parties, fêtes, picnics, teas, and functions of all sorts in order to bring together their numbers under such conditions as enable them to become personally acquainted with each other. In times of expansion the Fabian Society has held dinners and soirées in London, many of which have been successful and even brilliant occasions, because the new members come in crowds and the old attend as a duty. When new members are few these entertainments cease, for nothing is so dreary as a social function that is half failure, and a hint of it brings the series to an end. But a Summer School where members pass weeks together is far more valuable in enabling the leaders and officials to find out who there is who is good as a speaker or thinker, or who is a specialist on some subject of value to the movement. Moreover, gatherings of this class attract those on the fringe of the movement, and many of our members have come to us through attendance at the school. Apart from the direct interests of the Society, a School of this character is valued by many solitary people, solitary both socially, such as teachers and civil servants, who are often lonely in the world, and solitary intellectually because they live in remote places where people of their way of thinking are scarce.
It’s hard to say how many of these points were responsible for Fabian success, and how many were just random policies that didn’t change anything. But it doesn’t look like many of them were secrets of success. Most of these seem to have been widely adopted by the best modern nonprofits. I don’t know to what degree the Fabians originated these strategies, or whether they’re just natural optima that many successful organizations tend to converge on.
IV.
To finish, I do want to focus on the historical-inevitability angle. Whatever the Fabians’ other advantages, they arose at a really good time to be a socialist thinker. There was a sort of feeling in the air that socialism was the wave of the future, that there were literally no good arguments whatsoever against it, that you were either an intellectual (in which case it was obvious that socialism was better) or you were just so thoughtless that you had never even considered the matter at all (in which case you were motivated by things like prejudice or desire to hold on to your ill-gotten wealth). Pease describes the overwhelming consensus:
Socialism succeeds because it is common sense. The anarchy of individual production is already an anachronism. The control of the community over itself extends every day. We demand order, method, regularity, design; the accidents of sickness and misfortune, of old age and bereavement, must be prevented if possible, and if not, mitigated. Of this principle the public is already convinced: it is merely a question of working out the details. But order and forethought is wanted for industry as well as for human life. Competition is bad, and in most respects private monopoly is worse. No one now seriously defends the system of rival traders with their crowds of commercial travellers: of rival tradesmen with their innumerable deliveries in each street; and yet no one advocates the capitalist alternative, the great trust, often concealed and insidious, which monopolises oil or tobacco or diamonds, and makes huge profits for a fortunate; few out of the helplessness of the unorganised consumers.
This is a really blunt way to put it. Do we want society to be total chaos? Or do we want to organize it and figure out how to make it run better? The latter? Okay, you’re a socialist.
The Fabians loved debating, so you would think at some point they would debate capitalists. But Pease seems far from convinced that capitalists had any arguments, or were even the sort of people who could debate. Although he is familiar with the great economists – Adam Smith, John Stuart Mill, David Ricardo – he thinks of them as proto-Socialists or at least neutral, and is fond of quoting an apparently pro-Communist passage from Mill’s “Political Economy”:
If the choice were to be made between Communism with all its chances, and the present state of society with all its sufferings and injustices, if the institution of private property necessarily carried with it as a consequence that the produce of labour should be apportioned as we now see it almost in inverse proportion to labour, the largest portions to those who have never worked at all, the next largest to those whose work is almost nominal, and so in descending scale, the remuneration dwindling as the work grows harder and more disagreeable until the most fatiguing and exhausting bodily labour cannot count with certainty on being able to earn even the necessities of life; if this or Communism were the alternative, all the difficulties, great or small, of Communism would be but as dust in the balance.
I’m not sure whether Pease believed that a capitalist intellectual was a contradiction in terms, but he certainly didn’t expect to meet any or think they had anything interesting to say. Indeed, the one time he does bring up some people having arguments against socialism, they sound bizarre and totally unlike anything a modern person might possibly say:
When the Society was formed the Malthusian hypothesis held the field unchallenged and the stock argument against Socialism was that it would lead to universal misery by removing the beneficent checks on the growth of the population, imposed by starvation and disease upon the lowest stratum and society.
I don’t know if this was an echo chamber effect or if this was just how the late 19th century worked. I think the latter is at least possible. Remember, everyone (including the capitalists) expected communist countries to have stronger economies, even as late as the 1950s. The idea of coordination problems was almost unknown; the concept of prices as useful signals was still in its infancy. And the possibility that communism could lead to totalitarianism was almost inconceivable; for Pease these concepts are basically exact opposites, and it took Orwell to even jam the concept of “totalitarianism” in the public consciousness in a useful way. If you don’t have any of those concepts or ideas, how do you argue against socialism? I don’t know if anyone in Pease’s day had really solved that problem.
Not only were there no good arguments for capitalism, but the arguments for socialism were much more convincing. The standard communist rhetoric talks about capitalists paying for a factory, workers working in the factory, and capitalists getting most of the money despite putting in none of the work. This rings kind of hollow nowadays. Modern communists rail against Elon Musk – but everyone knows Elon Musk is brilliant and works 80+ hour weeks. You can be upset that lower-level SpaceX employees don’t get paid enough, but “why does Elon Musk deserve to get any money?” is a question with a bunch of really obvious answers. Venture capitalists are generally smart people who founded their venture capitalist firms and make inspired guesses as to where to direct resources. And it’s hard to create a broad coalition against stockholders from people who may themselves have some money in stocks for retirement. You can make arguments for why all these people deserve less than they get – but they don’t hit home the way they must have in Pease’s day.
In Pease’s day, the Marxist model fit like a glove. Some businessman would go to some lord with an ancestral pension of thousands of pounds and ask for money to set up a factory. The lord (or more likely his steward) would sign off on it, the factory would be built, a little of the money would go to the businessman, but most of it would go back to the lord who was living on a country estate hunting foxes somewhere. Whatever you think of our current system, the system in Pease’s day wore its inequality on its sleeve in a way ours doesn’t. And the slogans of the Fabian Society and of its working-class comrades were things like “No money without work!” and “Put the rich to work!” – very compelling but less applicable to Elon Musk, Bill Gates, or most of the modern crop of capitalist figureheads. For Pease, “income inequality” would not really be a sensible term; it was kind of assumed that worrying about the differences between high-income people and low-income people was a distraction toward them uniting against their real enemy: people who didn’t work at all but had all the money anyway.
All of this came together into a feeling that socialism was so self-evident that arguing for capitalism was absurd. This led to a perspective where there was a battle between the right and rational way of organizing society (socialism) versus the entrenched forces who wanted to keep power but admitted they had no justification besides force and self-interest. Modern communism’s descent from its 19th century predecessors explains a lot about its mindset.
And so the Fabians, despite their nominal commitment to waiting, were supremely sure that victory was near:
When the Liberal Party was crushed at the election of 1895 we thought that its end had come in England as it has in other countries. Conservatism is intelligible: Socialism we regarded as entirely reasonable. Between the two there seemed to be no logical resting place. We had discovered long ago that the working classes were not going to rush into Socialism, but they appeared to be and were in fact growing up to it. The Liberalism of the decade 1895-1905 had measures in its programme, such as Irish Home Rule, but it had no policy, and it seemed incredible then, as it seems astonishing now, that a party with so little to offer could sweep the country, as it was swept by the Liberals in 1906.
Tell me this doesn’t sound like a leftist journalist on Twitter talking about the Democrats while promising that the “progressive moment” is just around the corner. I notice the Fabian Society is still around and that their motto is “The future of the Left since 1884”. It sounds weird to me. Maybe a little too reminiscent of the claim that “fusion power is the future, and always will be”. The Fabians named themselves after a guy who was famous for his patience, but surely even they have to be getting a little bit tired.
Your reflections on the evolution of socialism are fascinating, and something I really wish I could get… where, anywhere at all.
Great post!
I was sure I was going to get to the end of that and you were going to point out the parallels to the Yudkowsky/Lesswrong/AI/rationality community…
An original plan for this post was going to be comparing the neoliberals, the Fabians, and the AI safety movement. I still might write that one.
Right now although the AI safety movement is great, LW/rationality seems much worse than the Fabians, in that we don’t really have any kind of organization. I think this is sort of what Ray is getting at in https://www.lesswrong.com/posts/s6aqtrFeySP4TrKvJ/thoughts-on-the-reach-patreon . Having good weekly meetings seems like a bare minimum, and until recently we didn’t (there was a separate group around that did rationality meetups, but they didn’t really interact with the rest of the community)
This seems sort of cyclical. I was living in Oakland and Berkeley when the Bay Area meetups got started, and for a while — until late in 2011 or thereabouts, I think — there was a pretty good chance that you’d run into some of the community’s leading lights if you went to the Berkeley meetup. But after a while the OG rationalists started socializing through parties and private dinners and informal hangouts, and the Berkeley meetup was abandoned to newbies, wannabes, and annoying people. It fizzled out a year or so later; the South Bay one, which drew from a different social scene, hung on a while longer but eventually it did too.
Now I get the impression that there’s some kind of revival going on, but I don’t live in the East Bay anymore and I’m kind of jaded about the community anyway.
With all this talk of fledgling British committees, I kept expecting a reference to Life of Brian or Monty Python.
Any Bay Areans want to share gossip about what “weird-the-way-Solstice-2011-was-weird” refers to?
NYC, not the Bay Area. I don’t think Raymond means anything more than he said:
I think by weird he just meant new; taking initiative.
Here are some songs, if you want to judge how weird they are, but I think that’s not the point.
uhhhhh no.
And yes, Elon earns way too much. So do all the billionaires. Bezos is the richest man on the planet. Amazon paid $0 dollars in taxes last year. We are full steam ahead towards neo feudalism. We have worse inequality now than we did at the height of the gilded age. 60% of the US population couldn’t afford a $500 emergency.
Why?
These companies (with the exception of Tesla) would not exist without him, meaning he is the sole indispensable person in their creation and development and just about any level of compensation that they can afford and he chooses is justifiable.
That doesn’t have anything to do with Bezos or Musk owning shares in their companies worth billions. Wealth is not the same thing as income unless it’s in the form of cash.
So your contention is that Elon is just that much more productive than the average worker? Maybe that is because he treats his workers like crap; leaving them permanently disabled and unable to work while under reporting injuries. All of the wonderful things he does come at a high cost to his employees.
I simply don’t buy that without for him we wouldn’t have solar panels, electric cars, and batteries. And him and Bezos fighting over who can go to mars first is exactly the kind of thing that would have been better off kept in house at NASA.
I really don’t have the time or the emotional energy to come back to a flame war all day. Maybe I’ll check back tomorrow but if there is like 30 comments I’m not going to bother.
If there is anyone who has the distinction of “CEO who really is that productive”, it’s him. Not only did he found the company, but he has basically revolutionized the electric car industry by spending the vast majority of his time camped out in the factory working on engineering the cars to be better. There is no single other person who comes close to the importance of the company.
“And him and Bezos fighting over who can go to mars first is exactly the kind of thing that would have been better off kept in house at NASA.”
NASA has failed at this for decades. They wasted 25 years on a space shuttle program that everyone knew wouldn’t work but which got through anyway for purely political reasons. SpaceX was able to cut their launch costs to a fraction of NASA’s after being in the field for just a few years. Is there ever any point at which you’re allowed to see the government screwing something up and try to do it yourself?
SpaceX was able to cut their launch costs to a fraction of NASA’s after being in the field for just a few years.
And if NASA hadn’t been footling around making all those obviously dumb mistakes for a quarter of a century but SpaceX had to do all the spadework themselves, how long and how much would it have taken them?
This is really veering into “What did NASA and the space programme ever do for us?” (here, have a listicle, everyone loves listicles!) and part of the hamstringing has been the “why should we spend all this money on dumb space exploration when the tax dollars could be going to fix pressing problems here on earth?”
SpaceX is a commercial venture that can go bust if it doesn’t work out, and people won’t complain about the waste of money because it’s a private, commerical venture. NASA was under the cosh of “purely political reasons” because it was government agency funded out of the public purse. But if SpaceX had to do all their own “how the heck do we know this won’t work until we try it”, then I think we’d have a longer, more expensive effort than “it only took them a couple of years, proof that private business is the best at innovation”.
Don’t mind me, I remember the moon landing and have the remnants of a romantic view of NASA’s heyday. Kids these days, if it’s not instantaneous teleportation to Alpha Centauri, they think it’s rubbish! 😀
@Deiseach
According to my learnings, NASA was good early on because it was early in its lifecycle. Now it has grown bureaucratized and moribund. Give SpaceX fifty years, and it too will become this way, probably.
SpaceX’s technological heritage comes more from the USAF and the commercial satellite communications industry than from NASA. And with NASA having dug so many holes in the wrong places and seduced so many people to fill those holes with wasted dreams, it’s not clear than SpaceX wouldn’t have had an easier time of it in the NASA-free alternate history.
If SpaceX lasts 50 years, it will still be under the whip of being a company that can go bust.
NASA does not have that whip, and basically cannot.
What does SpaceX use that’s NASA-derived?
– Their stages are RP-1 fuelled. The space shuttle program is a mix of solid-fuel boosters and liquid hydrogen. RP-1 was used for Saturn first stage.
– Deep-cryo isn’t a NASA thing (it’s a nobody except SpaceX thing, as far as I could find).
– The reuse profiles are completely different. Thermal tile tech might come in handy for second stage reuse, but that hasn’t happened yet (and BFR looks like it’ll take a pure powered-landing approach).
– The computers aren’t rad-hardened, instead they use redundant consumer grade hardware (https://space.stackexchange.com/a/9446).
– The next gen raptor engines use a method that’s previously only been used in prototypes (and even the US one was from the Air Force, not NASA)
– Even on the software front they’ve had to invent better simulation software than what was state of the art (because unlike cost-plus based contractors they lose money every time they catch a flaw in the physical testing stage instead of through software tools).
The lineage of Space X’s tech really has little to do with NASA’s last 30-40 years, and more to do with everyone else’s investment in traditional rocket technology (including pre-space-shuttle-NASA, but that’s a while back now).
SpaceX can go bust, but that won’t happen just because it isn’t profitable (I believe that is the case already). It can only happen if it is so unprofitable that it eats all of Elon Musk’s PayPal money.
> It can only happen if it is so unprofitable that it eats all of Elon Musk’s PayPal money.
It (and Tesla) already did. Initially, Musk set hard limits on how much he was willing to invest in the companies. During the early bad years when SpaceX seemed unable to launch a rocket that doesn’t blow up and Tesla had early issues, both were simultaneously doing so badly that they desperately needed extra cash, and Musk ended up disregarding the limits, putting nearly his entire fortune in them, split into two. He talks about this in some interview, how rationally at this point he should have let one of the companies die to make sure at least one of them survives, or if worst comes to pass he doesn’t just go broke, but he couldn’t make the choice. After that SpaceX started succeeding in launches and became wildly cash-flow positive as their launch manifest started growing, and he sold some of his personally held stock so he’s no longer 100% in his two companies.
No, my contention is that he’s the least dispensable person for these companies.
I don’t buy that either – but I do believe we wouldn’t have SpaceX, Solar City, and (probably) Tesla even though he didn’t found that one. Like I said, he’s the most irreplaceable person in the formation of these companies.
Owning SpaceX is a risk. The company could go bankrupt. Do the employees want a large portion of their wealth tied up in one company? While I think the employees might like to own a small piece of the company – and many of them probably do per whatever agreement they made with SpaceX – I also think they probably appreciate making a steady paycheck even in the months the company isn’t profitable and knowing their capital/savings aren’t at risk if the company doesn’t make it.
To me, what’s fair is whatever mutually agreeable terms Elon Musk and SpaceX employees come to. For some, that probably includes an X% ownership stake in the company, for others, just a steady paycheck.
EDIT: Hmmm, there was a comment here by Simon_Jester that’s no longer here. That comment is what I was responding to.
That is, however, a highly unusual state of affairs. Most companies are run by extremely well paid suits that are the very definition of fungible. Proof: Stocks hardly ever even twitch when they are replaced.
Extremely well paid by the standards of us mere mortals, yes, but those guys aren’t billionaires — the type of CEO that gets hired by a large company and replaced when they don’t work miracles might command a salary in the low seven figures, but they’re not going to control a significant share of company stock.
This seems to beg the question. If the argument is “we wouldn’t have these results without Musk being a billionaire,” then we need some way of confirming that in the kind of world where Musk doesn’t become a billionaire by inventing PayPal, these things don’t get done.
It’s hard to run that controlled experiment, because we do live in that kind of world, one where the vast majority of the available capital to pour into doing truly exciting things (electric cars, space programs, etc) is in the hands of a small number of people. Because, again, neo-Gilded Age levels of wealth and income inequality.
In the kind of world where the government taxes PayPal heavily enough that he people running it become merely multi-millionaires, and where we don’t have a huge “keep government out of my everything” movement, maybe we’d have more innovative launch vehicles (the thing SpaceX has concretely done) and the beginnings of a Mars program (which SpaceX aspires to). Certainly, NASA had no shortage of proposals to work with on that front.
The money did empirically get eaten up by the Space Shuttle, and once the Space Shuttle was ongoing there was little or no hope of NASA being given the chance to say “this is a bust, let’s develop a capsule-based replacement (sic transit gloria Constellation, sic transit gloria Ares).” Because there wasn’t going to be money for such things in a political system where one party has been promoting austerity in both boom times and crunch times ever since the 1980s in an attempt to shrink down government to where it can be drowned in a bathtub.
But that happened under the same conditions of the world economy that the socialists and social-democrats-willing-to-put-up-with-tame-capitalism have been criticizing for the past 30-40 years. It is not, as such, a disproof of the prediction “you know, we should have a more heavily taxed economy where we don’t end up with billionaires personally controlling such a huge chunk of the wealth, so that we can have more of the cool things people want.”
NASA has had no shortage of proposals to work with on that front, for fifty years. We started to see results about five years after a guy with a billion dollars of his own money took on the challenge.
If you change the rules so that people who e.g. found and run Paypal, are only allowed to be “merely multi-millionaires”, then we don’t need to access an alternate history to know what that looks like. NASA tells us that the wonderful proposals that went into this round of powerpoint slides won’t turn into ten- or eleven-figure failed dreams like all the others. Elon Musk can’t afford to found SpaceX, nor Bezos or Allen their versions, but they can be investors when a consortium of publicly-traded aerospace firms decide to build a better commercial launch system (as defined by very serious men in suits). Which winds up looking like all the others; cheaper than NASA’s but in no way capable of opening the high frontier.
Or see smartphones. Very serious men in suits work for a decade to give us the official smartphone of corporate America and the military-industrial complex – the Blackberry. Then a guy with a billion dollars of his own money rolls out the iPhone.
So there’s an approach that delivers spectacular results in multiple fields, if and only if you have a guy who can invest a billion dollars of his own money. And there’s an approach that involves men in suits very seriously administering other people’s money, that gives us the Blackberry and the Atlas and the powerpoint slides that are as close as NASA is ever going to get to Mars without hitching a ride. And, sure, we can’t prove that if we tax away all the billionaires, the approach that never works will eventually start working. But I know which way I’m going to bet, and I want my world to be the one with the billionaires in it.
I’m willing to let you have the other world, and working to make that possible.
If building rockets was a reasonable investment, rather than a vanity project that succeeded more or less by chance, then why couldn’t PayPal do it? Why had it to be done with Musk’s personal wealth?
He didn’t do it with his personal wealth, his company did it.
Because people disagree about what a reasonable investment is? I mean if you were on the Paypal board, it’s pretty clear you’d vote against it (even in hindsight, you regard the whole thing as a crapshoot).
If you were an investor in Paypal, you’d be pretty pissed that an online payments company is starting to do something completely unrelated to what you bought in the first place. And you wouldn’t be wrong (why would the company leadership be any good at it?).
But I think John’s characterization that it was one dude with his own money is a bit misleading. SpaceX did in fact raise money repeatedly with various institutional investors, just the kinds of investors that have the stomach for positive-expected-value-but-80%-chance-of-failure projects. But the people investing in those funds are still very much 1%-ers, just not billionaires, and would see a lot of their wealth taxed away under any proposal to raise revenues, so his broader point remains.
The same way that the Google board, a search engine provider, voted against going into the email business, the satellite maps business, the mobile phone OS business, or the self-driving cars business? Oh wait, they didn’t.
It also received lots of government subsides, if I recall correctly.
Isn’t part of normal people pension schemes also invested in these high-risk funds?
And anyway, even if there is a case for %1-ers, it does not follow that there is a case for billionaires.
Because it usually isn’t a reasonable investment to make with other people’s money. And when it occasionally is, the kind of rockets you get aren’t nearly as good as the ones you can sometimes get when you spend your own money.
This is a principle-agent problem, manifest as the dark side of “Nobody ever got fired for choosing IBM”.
If you’re an agent charged with spending other people’s money to build rockets, there is a known, safe market for rockets: launching commercial communications satellites. And there is a known, safe way for building rockets that will be acceptably profitable when sold to that market: making incremental improvements to the modified ICBMs that were used to launch the last generation of commercial communications satellites.
If you are that agent, and you do this, it will work and you will get paid and you will keep your job – whether that’s as a bureaucrat in a socialist or nigh-socialist utopia, or as a millionaire CEO in a capitalist-ish realm.
If you hire a bunch of people who have mostly never built rockets and task them with using new low-cost manufacturing techniques which have never been used in rockets, and then try to roll in reusability that failed the only time it was tried in a high-profile rocket, it might work or it might not. If it works, you get laudatory stories written about you in the trade press, but there isn’t much room for your job to get better than it already is. Particularly if we’re assuming that vast fortunes are to be taxed away for the public good.
If it doesn’t work, you get fired and you never get a job half as good as the one you just lost. Maybe if your employers were New Soviet Men it wouldn’t work that way, but they aren’t and it does.
If it’s your money, and if you can keep the profits when the plan works, then sometimes you can justify taking the risk. And for that matter, if you’re the agent of someone with their own money, he can sometimes offer enough reward and enough cover in the case of failure to shift the balance and favor the riskier approach. Which, if it works out, lowers the bar for everyone else who might want to climb on the high tail of the risk/reward curve.
IBM itself invested in lots of crapshoot endeavors: GMR hard drives, Watson, quantum computers, memristors, etc., and so did Google (green energy, quantum computers, AlphaGo, self-driving cars, etc.), and historically AT&T (transistors, information theory, Unix, etc.).
Maybe there is something peculiar about the rocket industry that discourages significant corporate-funded basic research, but your arguments seem to explain too much as they would apply to anything else that I listed here, and even if there really was a case for rockets, then it seems that it does not really generalize to other fields.
Rockets, or at least orbital launch vehicles, can’t be built by a handful of nerds in a modest laboratory for a seven-figure budget. Something like the old Lockheed “Skunk Works”(*) was about the limit of what a bureaucracy can tuck away in an allowed-to-fail corner, and even that only under ideal conditions.
And if the Skunk Works had been tasked with producing an orbital launch vehicle, at the right time under ideal circumstances, that might have been within its reach. 1993 was too late, alas, and we’ve never seen anything like that since. The bureaucrats have failed; the bliionaires are still in the game.
* Before they made the name official, which broke the magic
Google is an advertising company as much, if not more, than a search engine company. This matters when trying to understand their behaviour:
– Ad-financed email was already a thing by the time google got into the game (Yahoo and Hotmail both predate it). It had a team of a dozen people by the time it was public in 2004 (not exactly rocket-launching budget).
– Google maps was built on top of technologies and talent from acquisitions.
– Android was an aquisition. It was largely a defensive play to avoid iOS dominance leading to an ecosystem where Google’s advertising wouldn’t reach mobile users.
– Self-driving cars is the odd-man out, but there are dozens of companies competing in that field and no one’s been successful yet, so it’s unclear whether it’s a counterexample yet (plus there’s evidence that Google is being much more legal-risk averse with their self-driving cars, so they may well be hobbling themselves to some extent).
The idea that “if only NASA had as much money as spacex to spend on launch vehicles, they might have succeeded” is objectively wrong, simply because NASA has spent more money on launch vehicle development every single year that SpaceX has been active.
The development costs of SLS alone will be more than every penny SpaceX has ever spent, and it is a gigantic boondoggle, that will be obsolete before it launches real payloads. They have spent more that a billion building a launch mount that will only ever get used once, and just started building another that will likely be just as expensive, mostly because it’s not actually a spacecraft development program, it’s a jobs program meant to pony up support for a few senators.
The fundamental reason why corporations/private money succeeds where government fails is that good governance is so very rarely in the interest of those doing the governing. The entire idea of capitalism is to make it so that improving society provides outsized personal benefits for those doing the improving, to the point where it makes sense to take personal risk to do so.
Unless you can describe how your favored brand of organizing a society does better when you assume that every person in the leadership is pushing their personal self-interest, I am so very not interested in what you are pushing.
I’m not at all confident that we’re doing an adequate job here differentiating between things like “NASA failed because bureaucracies can’t take risks in doing R&D” and things like “NASA failed because they were being directed to do the wrong things.”
SLS is a boondoggle in large part because it’s built around the assumption of using shuttle-derived hardware for a mission completely different than anything the shuttle was designed for, when the shuttle itself contained some pretty boondoggle-riffic requirements.
The space shuttle, in turn, was a boondoggle in part because the Air Force expected buy-in on how it was to be used; it was *not* somehow a foregone conclusion that this would be the case.
We get boondoggles for intrinsic structural reasons. But I can’t shake the feeling that we’re not treating seriously the question: “If we lived in a world where more decisions about what to do with billions of dollars were made by sober men in suits who only make millions, and less by genius playboy billionaire philanthropists who do things because they feel like it, what reasons would we have for thinking that the genius playboy billionaire philanthropists couldn’t make the system work?”
Because I bet we’d have reasons. We’d be asking “well, why wouldn’t they just blow the money on yachts or spend it on largely the same kind of charities anyone else might fund?” Answer: quite a few of them do. We’d be asking “well, where’s the incentive to do things that are unprofitable and in our society get done through taxation?” Answer: basically it comes down to whether there’s a particular way for a rich person to feel good/glorious by doing something big with their money. For some of our problems that may be enough. For others? No.
A very specific historical path brought us to where we are, one where the old Soviet space program is dead, the old American space program was dragged face-first through a gradually expiring program that in effect wasted its time without giving it the chance to develop something better, and only the corporate programs are able to compete. To what extent is this truly inevitable?
@Simon_Jester
The statement “NASA failed because those stupid politicians are in charge” is only meaningfully different from “NASA failed” if you have a plan for permanently getting rid of stupid politicians. Your calculation for the expected return of money spent on NASA vs. any alternative has to account for the fact that NASA is ultimately run by stupid politicians.
NASA has frequently been directed to do the right thing, or at least a right thing. See, for example, the Space Exploration Initiative. Mission statement: Construct a space station in Low Earth Orbit, establish a permanent human presence on the Moon, send astronauts to explore Mars.
But whatever NASA is directed to do, is subject to the absolute constraints, “…without laying off any of the people who work for NASA or its contractors now, without diminishing the power or prestige of any its senior bureaucrats”. That is why it fails, or rather why its successes become rarer and more expensive at each step, until. And the reasons why this constraint are imposed, are common to most any arrangement of bureaucrats working with Other People’s Money.
As cassander notes, if you’ve got a plan for how to have NASA not be subject to these absolutely overriding and absolutely crippling constraints, that would be great.
Otherwise, while you are right that there are alternate universes where we’d be left with only speculation as to whether e.g. enthusiastic billionaires might be able to avoid this trap, we are fortunate enough to live in the universe where we can look and see, and actually compare the track records of billionaires and bureaucrats.
I’m not sure how damning your top 1% stocks statistic is since that’s about how much they own of wealth in general, but I’ve edited the sentence to clarify.
It matters because if you think companies being profitable is good for the whole of society and not just the rich it makes poor working conditions, stock buybacks, and other things that hurt poor people seem worthwhile because it just benifits average joe who owns the stock.
Stock buybacks hurt poor people? How does that work?
If a company is disgorging cash, then it suggests that there’s a lack of internal investment opportunities in the company itself and so they’re simply kicking the money outward . . . but some of that money could just as easily be funneled to workers in the form of bonuses as opposed to share buybacks. The only reason it doesn’t is because shareholders hold institutional power over the firm’s top governance, while the employees who make up the firm typically don’t – they’re just there to work or at best manage it.
Right, ok, I though this was a more direct form of harm than “failing to help as much as possible”.
I also thought stock buybacks were being singled out as opposed to other mechanisms by which stockholders are compensated (like dividends).
Dividends pretty consistently incentivize stockholders to optimize corporate governance for long term stability, so they can keep getting dividends. Long term stability tends to indirectly benefit workers, and discourages corporate practices that a “fly-by-night” company that fully intends to be gone in ten years might not indulge in.
Conversely, stock buybacks CAN (may not always) incentivize stockholders to maximize the cash held by the corporation in the short term, so that they can get the cash and sell while the stock values are high, then reinvest the cash. Being a strict revenue-maximizer, as opposed to a “maximize stability subject to the constraint of revenue greater than X”-er, can result in companies making decisions that are bad for workers or for society at large.
Thus, it is reasonable to single out buybacks as more likely to harm workers, or society at large, than dividends.
When companies participate in stock buy backs they increase the return on their stockholder’s investments. This means if a time comes when there is a profitable investment option and they want to raise capital for it their stock offering will appeal to the tiny subset of people who like making money. If they pay that money out to their workers as you suggest the next time an investment opportunity comes along the only people it will appeal to are the employees.
If anyone has a complaint against buybacks it would be bondholders who see the increased chance of default for no benefit.
But both dividends and buybacks are by board decision. Maybe there’s a psychological thing here, but a one-time dividend seems like it’d be much less “stable” than an ongoing series of stock buybacks at regular intervals.
But I guess the stock-buyback approach is used for distributing one-time windfalls (and dividends aren’t, much), so the mechanism, while technically neutral on the short/long term question, gets that association.
Yeah. Among other things, dividends are typically written into the terms on which a stock is purchased because otherwise it makes it hard to accurately value the stock. Knowing that a stock pays predictable dividends changes a lot about how much money it’s worth, and investors usually prefer to deal in commodities (like stock certificates) whose value is semi-stable and responds predictably to changing economic circumstances.
> 60% of the US population couldn’t afford a $500 emergency.
I bet at least half of those 60% could afford to create a $500 emergency fund if they had more financial discipline. To imply that it is not their own fault that they don’t have this emergency fund is insulting to those who have that discipline and patronizing to those who don’t have it.
> I bet at least half of those 60% could afford to create a $500 emergency fund if they had more financial discipline.
Yes, about half of people will be below average. This is politically relevant why?
How can it be someone’s own fault if they don’t have financial discipline? Is financial discipline really something you can gain through sheer force of will?
Not sure I understand your model. I save money because I viscerally don’t like to spend money, not through some especially virtuous exertion on my own part. Presumably, people without financial discipline are constitutionally different from me and like to shop more than they like to save.
It is *possible* to change one’s own tastes, e.g. to learn to enjoy eating lentils and hate eating cupcakes for the sake of losing weight — but from what I’ve seen it’s really difficult and takes a long time, and you need to *want* to improve for a long time to make it happen. It’s not reasonable to expect large majorities of people to do this.
If it isn’t, nothing is.
Plenty of people are working as much as they can for as high a rate as they can find at their skill level and have trouble meeting their bills. Hard to fault them for not saving.
For many others, they enjoy a standard of living that leaves no margin for safety more than they dislike the risk of such situation. That’s their option, but it should be the option of those who would enjoy this higher standard but choose to go without on occasion in order to avoid burdening others when they inevitably have unexpected need to be judicious in their aid or even concern.
Maybe all these desires are no more vicious or virtuous than each other, simply balancing presets in a deterministic manner, but inasmuch as moral arguments have any effect, different arrangements can be condemned or justified on different grounds. To wit, spend less than you make, people.
Yah, I guess if you think shaming people is an effective way to change their behavior. I personally haven’t found that it is, though.
There’s also the question of how much people are willing/capable of putting up with. Like if you’re working 12 hour days and still can’t afford to go out on weekends, the maybe you decide life isn’t worth living. Probably better for someone to live slightly beyond their means than give up entirely. And you definitely can’t shame people into not getting depressed.
Well, I read your argument as rather stronger than that; if something is not someone’s fault, then presumably there is no way for them to change it. Shame, education, example, whatever. All determinism–in which case don’t bother telling me not to shame them, I can’t help it 😉
Like I said, there are definitely poor it is hard to fault for living on the edge. There are also those who take the easy way out and trap themselves in debt because they think they deserve the best, right away.
And anyway, plenty of enjoyment can be wrung out of life without spending money on it, or even just spending a little. Library, park, pack of cards at a friend’s, second hand CD’s, etc.
How so? What do you think shaming is for?
There will always be a minority of people who will engage in some behavior despite being shamed for it, but this does not mean that shaming is ineffective as a tool for the majority.
@Randy M:
No, I even pointed out in my initial comment that there’s a way to change it…just that the way is so godawful difficult that if you aggregate the problem over millions of people you can be sure that only a small minority will be able to actually change it.
Right. So the questions that come to my mind are: why did the latter group think they deserve the best, and is there an effective way to convince them otherwise?
Some people find that stuff appealing, some don’t. Kind of hard to second guess what people find worthwhile in life. Also kind of hard to change what oneself finds worthwhile in life (though, as I mentioned, not completely impossible).
@vV_Vv:
Just because a tool is intended for a purpose does not logically imply that it is effective for that purpose.
Can you give me some reason to believe it is an effective tool for the majority? What I’m saying is that in my experience it is not.
Shame only works when the person being shamed cares about the opinion of the person doing the shaming — and even then, the shamed has the option of no longer caring rather than changing their behavior.
That’s a valuable question, and there’s probably some anti-capitalist sentiment here that’d I agree with. Savings and frugality are denigrated since spending helps the economy in the short term, and politicians and business leaders are focused on the next election cycle or financial report.
Advertising is an industry built largely on manufacturing needs rather than meeting needs, and it saturates our culture.
Ties with family and faith are severed in pursuit of progress, leaving people striving for meaning in acquisition and comparison.
Perhaps that whole post WWII-prosperity via being the last industrial nation standing has given a false sense of what normal is.
Social media exacerbates the feelings of envy as half the fun of having new things/experiences is posting pictures of how happy they make you to your friends.
Globalization increases the opportunities for non-westerners through off-shoring and immigration, with some gains going to the western consumer but not necessarily commensurate with the losses.
Instinctual fears of being an outcast probably leads to the “fear of missing out” if not on board with the latest innovations, causes anxiety when paired with an increasing rate of technological progress.
And of course the rent is too damn high.
Whoever pays the piper… I won’t say boo about what someone enjoys or how they pay for it if there are no negative externalities. If going clubbing every week means someone else has to pay for your emergency room bills or retirement, then they are going to have some guess of their own about whether that was worth it.
@Randy M: I do think there’s some merit to what you’re saying, in that there are some people who would probably never be able to save up money for emergencies, regardless of how much they’re making. I’ve personally known people making six figures a year who’ve ended up bankrupt and destitute because they spent money at a much faster rate than they were making it. The fact that they were able to spend that much money that quickly is absolutely mind-boggling to a poor grad student like me, but it’s clear that the problem lied with their psychological makeup, not with their salary. They could’ve been making fifty times as much and probably still wouldn’t have fared much better in the long run (as evidenced by the multitude of lottery winners and celebrities who’ve blown through tens or hundreds of millions within a matter of years).
That said, I doubt that 60% of the American population or even 30% of the American population are simply broke as a result of bad spending habits. If they’re unemployed or they’re only making $8/hour, that probably won’t leave a lot of money left over after taking care of basic necessities. I also don’t think it’s fair to hold poor people to extreme standards of frugality; if they can only save up money by living a Spartan lifestyle with no amenities or comforts or entertainment, then I don’t think you can reasonably argue “they’re just too impulsive, it’s their own damn fault for not having discipline” when they fail to do so. There’s a difference between blaming people for having poor impulse control, and blaming people for not having exceptionally good impulse control. “You’d be able to break out of poverty if you just were a perfect robot who worked 60 hours a week, and also lived in a run down apartment with no heating or insulation or power, and also behaved like an ascetic monk who never went out to eat or got drinks with friends or went to the movies or watched TV or played video games,” even if it’s technically true (and there are probably cases where it is, and just as many where it isn’t), is not a valid prescriptive argument in my eyes.
As an argument as to whether something in society should be changed somehow–be it economic policy, educational focus, usury laws, welfare, less regulation, I don’t know–the fact that it’s possible for someone to spend less isn’t necessarily indicative of everything being just fine. May not even be relevant.
As to personal advice, though? Every time. If you are in debt or borrowing money to cover everyday expenses, change that asap, and if you can’t change the income, cut the outflow, even unto spartan levels.
As to moral culpability, that can probably be adjudicated on a case by case basis, but isn’t terribly relevant to anyone’s practical course of action.
That’s not what is being claimed. A hypothetical temporary cash shortfall, or even a real temporary cash shortfall, is not what the word “broke” means in common usage. Neither is a permanent condition of living paycheck to paycheck.
The pedantically literal definition of “broke” is “has absolutely no money whatsoever”, and most people who couldn’t come up with $400 on short notice will still have a few bucks in their pocket.
The colloquial definition of “broke”, is that one’s total financial assets are inadequate to sustain one’s pre-broke economic activities, with things like illiquid investments and next week’s paycheck considered as financial assets. As is the sort of social credit where, when you miss a payment, they don’t immediately repossess your car because they know you’ll probably scrape together the money in a few weeks and almost certainly won’t go on the run.
It is quite possible that being short $400 at the wrong time could lead to one’s becoming broke, but that’s going to be a subset of the people facing actual $400 shortfalls, not the total of people who couldn’t meet a hypothetical such shortfall.
The problem is that raising the personal pragmatic advice is at most unhelpful and at worst actively counterproductive to addressing the broader question of “is this how society ought to work, in this, which is surely the Silver Age of civilization if not the Golden, compared to what came before?”
It is reasonable to look at the marvelous wealth of our civilization compared to all its predecessors and wonder “Why the hell can’t we get off our asses and solve global warming? Why are people still starving? Why do we have one or two rich countries that will withhold vital medicine from people for being poor, when others don’t? Why do we still have children who are consistently beaten and abused by their parents? Why, with all our knowledge, do we not have these problems solved?” And, having identified why we have not solved these problems already, it would be reasonable to advocate, y’know, doing what is necessary to solve them.
…
We’re not ancient Greeks. We’re smart enough to understand behavioral economics and political science. To know that if disasters strike our polis, it probably wasn’t purely due to our having so much less arete than our neighboring states that our sinful selves incurred the wrath of the gods while they flourished.
No, we were probably making some specific object-level error of policy, not just being insufficiently virtuous compared to our revered ancestors. And object-level errors can be fixed… but only if we actually concentrate on solving them, not on finding the “arete explanation” for why the problem hasn’t solved itself.
…
It’s kind of like how if we want to single out the problem “nerds are systematically bullied in high school,” it is true but super unhelpful to start talking about that one guy you knew in high school who played D&D and was on the debate team. You know, the one who constantly trolled and harassed and insulted everyone around him until even the kindly nonviolent types wanted to stuff him in a locker.
Because talking about that one boy, and not the dozens of other bullied nerds at your school and the thousands more around the nation, is kind of a digression. Not only that, it’s a digression that mentally leads people in a direction that biases them against solving an overarching problem.
True, but unnecessary and in context arguably unkind.
I don’t believe that has been identified, nor do I believe any it is reasonable to advocate “doing what is necessary” without a decent analysis of costs and likelihood for success.
The original post I responded to asserted that a lack of discipline cannot be a person’s fault, which implied that spending habits are out of a individual’s control. I oppose this sentiment as it is either trivially true about every facet of one’s life, or a harmful myth.
Maybe this is all a digression when discussing how the secret to Fabian success, but when talking about why few Americans have savings, the facts that, for any given income level, many people are capable of holding onto some cash, and the difference often comes down to different attitudes and priorities is, imo, a fair response.
It’s a digression, perhaps, if the ratio is 1:dozens, but not if the ratio is more like 1:1. In that case it is unlikely that it is entirely down to chance, and there is a good reason to assume the latter 1 can learn from the former.
One issue I see here is that you seem to be taking as an article of faith that all those problems are “solvable” AND that we’ve “identified why we have not solved [them] already. Out of those, I can see the “withold vital medicine from people for being poor” as one that’s actually demonstrably solvable by the example of it being solved in other countries, but for others, I’m not so convinced.
For instance, looking at “why are people still starving,” is it the case that it’s solvable? It seems to me that the default state of humanity is large proportions of the population starving, and that the proper question to ask is “why is such a low proportion of the population starving compared to what is historically normal?” That doesn’t mean it’s not solvable, but it does mean that we shouldn’t be so arrogant as to believe that it is or that we’ve figured out the way to solve it. Even in the realm of sciences with random controlled trials, people have come to incorrect conclusions; in fixing societal problems, we don’t even have the luxury of RCTs or replication.
That said, perhaps some such arrogance is good; there was no good reason to believe that we could get to the Moon, but we did. But such arrogance can also have downsides: there was no good reason to believe that we could create a perfectly equal society with communal ownership of all property, and attempts at those turned out probably a lot worse than if they hadn’t been attempted.
Well sure, talking about that one nerd who deserved it isn’t helpful, but if one can use that as a means to convey concrete actionable advice that most nerds in most situations could take to make them less likely to be bullied, or to suffer less from the same bullying, that’s actually quite helpful.
Because, again, it’s an article of faith that the “overarching problem” of nerds being bullied can be “solved” for some meaningful meaning of the word “solved,” and even if it were possible, it’s an open question as to how to solve it and how long the solution could take. But a particular nerd who is being bullied might be able to take action right now that alleviates his suffering.
Again, that’s not to say that attempts to “solve” such problems in a societal level shouldn’t be undertaken. But putting all your faith in the unproven existence of a solution to the problem – or even that some particular proposed solution would actually solve the problem rather than make it 100x worse – to the detriment of individually helpful advice seems like a poor allocation of resources.
The average real income of developed societies at present is about twenty to thirty times what the global average was through most of history. So figure your $8/hour people are making ten or fifteen times what the average person lived on through most of history.
I think that demonstrates how far from an objective fact your “basic necessities” is.
@DavidFriedman: As lvlln mentioned, large percentages of the population were literally starving for most of human history. And the fact that the vast majority of people are no longer literally starving is certainly something to celebrate – in fact, it’s a truly enormous improvement over the first few hundred millennia of human existence, and I absolutely don’t want to understate that. Nonetheless, that alone does not mean that everyone’s basic necessities are being met. If someone can’t afford to pay their rent on a salary of $8/hour (as is the case in plenty of major American cities, where cost of living has risen at a far higher rate than wages), then it doesn’t really matter if they’re making fifteen times what a medieval peasant made, I still wouldn’t consider their basic needs to be fulfilled.
Certainly, the standard left-liberal answer of raising the minimum wage is a short-sighted solution that does nothing to fix the underlying problems. For that matter, I’m not even sure that the underlying problems can be fixed right now. As lvlln suggested, this may very well be the best we can manage at our current level of economic and technological development. But even if that’s the case, it’s still lamentable that there are people out there whose basic needs aren’t being met, often (though not always) for reasons largely or wholly beyond their control. I don’t think that anyone deserves to live in poverty, and I don’t see much value in saying that desperately poor people wouldn’t be so poor if they just had better spending habits (or worked more hours, or had the ambition to find a job that paid more, or whatever other reason people find to blame the poor for their own circumstances).
I don’t doubt that there are some individuals who need to be told to spend less/save more/work more/be more ambitious, but when you generalize that sentiment to poor people in general (or “at least half of [60% of the U.S. population],” as Emanuel Rylke said), then it ceases to be useful advice and instead comes off more as a sweeping condemnation of the impoverished, rooted at best in Just World Fallacy and at worst in blatant classism.
People who are literally starving die. Some people in the past died of starvation, but most didn’t, which is why people are still around.
My point is that “basic needs” is either a meaningless concept or one satisfied at a very much lower income than you imagine. Thus when you say “pay their rent” you are implicitly assuming a model of how much housing people have which is a great deal more generous than what most people in the past survived under. Similarly for food. I don’t see how something can be a “basic need” if people can survive without it.
I had a blog post some time back, in the context of an argument with the “bleeding heart libertarians,” where I tried to offer an objective definition of basic needs and then estimate the cost:
My conclusion was about $500/year. My calculations start with the bit I just quoted, a good deal of the way down a very long post.
I offered a tentative definition above of what it means for someones basic needs to be fulfilled. What is your alternative definition?
@DavidFriedman @LadyJane David Friedman’s $500/year number is not far off the World Bank’s number of $1.90/day ($700/year).
It does seem possible to survive on that in the US. Obviously, at a much lower than median standard of living, but that budget still would allow for a (old) smartphone (WiFi service only) or a (used) laptop and Internet access (perhaps not at home). Which represents a substantial win vs. all of history before AD 2000.
I’m curious what you (both) think of Charles Murray’s proposal for a UBI to replace existing social welfare systems. (I suppose David you’re against it on principle, but what’s your opinion of it as an alternative to the status quo?)
@Dave92F1:
The idea of scrapping all government policies justified as helping poor people and replacing them with a demogrant makes some sense. But Murray’s figure is $10,000/year for all adults, which works out to about 2.5 trillion dollars a year.
That’s about 2/3 of the total federal budget. Freeing up that much requires you to eliminate all of Social Security, medicare, unemployment compensation, plus state welfare expenditure, leaving a lot of people, including everyone on social security, worse off, so I don’t think it is a viable proposal.
@DavidFriedman: Saying that much of the pre-modern population was “literally starving” was an overstatement on my part. “Suffering from nutritional deficiencies and at frequent risk of starvation” would be a better descriptor. (Though to the best of my knowledge, famines with massive death tolls (i.e. events where >1% of the population, and in some cases >10% of the population, died off as a result of food shortages) were common or at least not particularly uncommon in medieval times. From my very limited research, some of the worst famines resulted in 25-33% of the population dying off, which isn’t quite enough to say that most of the population starved, but isn’t that far off either.)
Using your definition as a template, I’d define ‘basic needs’ as “enough food and shelter of sufficient quality that their lack would not significantly reduce your life expectancy, result in serious long-term health problems, or stifle physical and/or mental development – on a consistent enough basis that they were not frequently at immediate risk of falling below that threshold.” If a Sri Lankan slum dweller grew up with enough food and shelter to survive to adulthood, but they’re 5 inches shorter and 15 IQ points less intelligent than average because of nutritional deficiencies, and they have visible deformities and chronic health problems because their homes were filled with harmful chemicals, and it’s only because of luck or charity that they’ve managed to avoid starving or freezing to death, then I wouldn’t consider their basic needs to have been met. (Of course, there are some people who’d define ‘basic needs’ as narrowly as “enough resources to not immediately die of starvation and exposure,” and others who’d define it as broadly enough to include healthcare and education and access to modern amenities and communications technology. But just because people disagree about precisely where to draw the line doesn’t mean that the whole concept is worthless or nonsensical.)
Also, while I don’t doubt that there are parts of the world where people can live off $700/year, I’m skeptical of the idea that it would be feasible within the U.S., and I’m almost certain that it definitely wouldn’t be possible here in New York City. And if people lack the resources to leave their current city/state/country of residence and move somewhere cheaper, then it doesn’t really matter what the global average is. (There may very well be homeless people in this country who manage to do it, but that’s why I think we have to take consistency into account; if a third or a fifth or even a tenth of the people living on $700/year in the U.S. end up dying of starvation and exposure, then I wouldn’t say that it’s enough for people to reliably live on here.)
@Dave92F1: In theory, I think Universal Basic Income is a great idea, and I also think it’s compatible with all but the most firmly minarchistic or anarchistic branches of capitalist libertarianism: It’s less redistributive than the current welfare system, it would require a much less complicated and less expensive bureaucracy, it would encourage entrepreneurship (people would be more likely to attempt their own business ventures if they had a reliable source of income to fall back on), and it would allow us to do away with the economically destructive minimum wage, thus alleviating a massive burden on both low-wage workers and small business owners. (Libertarian economist Milton Friedman actually proposed a similar idea with his proposal of a ‘negative income tax.’ This idea was later used as the basis for the Earned Income Tax Credit system, which has been tremendously beneficial to low-income earners like myself.)
I also think that UBI is inevitable in the long run, at least if capitalism continues to remain the dominant economic system (which I would greatly prefer) and if automation continues to develop at its current rate (which I view as a massive net gain for humanity, despite the short-term problems it would cause). In fact, I’m fairly certain that even if the government doesn’t implement it, the corporations eventually will; businesses may one day be able to survive without workers, but by definition, they will never be able to survive without customers. The only other real alternative (other than full state socialism, which I consider extremely undesirable) is a program that would provide jobs for every citizen, but that seems a lot less efficient, since the majority of those jobs probably wouldn’t be producing any real value.
In practice, however, implementing UBI at present would pose a number of complications. There are a lot of concerns that it would be prohibitively expensive, and while the typical counter-argument is that it would actually save money in the long run by massively cutting down on the bureaucratic costs required to maintain the welfare system in its current bloated state, I’m honestly not sure how the math works out. David Friedman pointed out that implementing a $10k/year UBI would require the government to immediately dissolve all other welfare/social security programs in their entirety, including retirement and disability programs. (Of course, there are other places the government could reallocate money from, such as military spending and corporate welfare, both of which seem like better choices to me. Unfortunately, there doesn’t currently seem to be much political will to do so, at least not among actual policymakers.) I do think one possible solution would be to have a somewhat lower federal UBI than the proposed $10k figure, while also having state and local governments make up the difference by providing their own UBIs to residents, in order to account for the disparities in cost of living between different parts of the country.
The argument was that it’s their own fault they don’t have the money, not that it’s their own fault they don’t have financial discipline. But fault is not very relevant to this conversation anyway: regardless of whether we blame them for it, the sort of people we’re talking about can be relied on to piss away however much additional money we decide to redistribute to them, leaving them still unable to meet a $500 emergency without borrowing some more.
Yeah, those horribly irresponsible poor people. Like this guy. https://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
So a guy admits to making somewhere between $50-100,000 a year for multiple years and he can’t come up with $400 is some indictment of capitalism and not at all his own fault?
I hate these stories. First, he makes way more than me per year. Yes he lives somewhere more expensive than me (which he notes was his choice), but he had totally predictable major expenses and he beats my salary by 2-3 times. And you know what? I’m probably less stressed and happier for my choices than he seems to be with his (and yes I could handle even a $1000 dollar surprise expense without touching a credit card or changing my spending, and yes I do have student loans I’ve been paying at faster than required rates). For a breakdown of how to live within one’s means in a more expensive city, here’s a good example with very specific spending numbers.
I don’t consider people less frugal than me as bad people, but it seems pretty clear their extra spending isn’t making them happier than I am. In fact the lack of safety net seems to cause the opposite while the hedonic treadmill hits with the spending. And if we gave him more money or debt forgiveness, would he be happier and start saving? Or would his spending rise again to meet the new income? I submit being unable to have savings at even 6 figures implies the latter. I don’t have to feel any animus towards that writer (and I honestly don’t! I know and love plenty of people who are also irresponsible with their money, that doesn’t make them bad people.), but I don’t think complaining about lack of income or the expensiveness of certain goods/services is the right answer. The right answer is to learn how not spend money beyond your means. High spending is not necessary for happiness, and subsidizing high spending doesn’t in my experience seem to help happiness either.
I’m reading it now; I had some sympathy for him–not being able to sell his house because of the co-op board (like a hoa, I assume?) could vet potential buyers. Then there’s college, which is stupidly expensive but…. still kind of hard to fault people for, I guess. He seems to derive a lot of ego from having daughters with prestigious degrees and careers–well, that all that status doesn’t come cheap, although it doesn’t sound like they actually paid it.
It reads like a lot of bills in their lives were unexpectedly higher then he’d assumed, which sucks, but wasn’t unavoidable.
Still, it’s a good article for touching on a number of relevant factors, like the high, and possibly intentionally obscured, cost of servicing debt, college, & housing; and how it kind of sucks to start a career in the middle of a technological or social revolution (novelist in his case).
It does remind me of the discussion a couple weeks ago about wwc complaints and how the way of life they lament losing was an anomaly of a particular period of time that is rapidly fading. Apparently middle class professionals are not immune.
If the one is the direct cause of the other, then this is a distinction without a difference.
Please re-read the comment to which I was replying:
You may take my remark as being directed equally at the person who originally said this. Though “not necessary” would have been more precise on my part than “not very relevant”– the main point still being that, regardless of anyone’s views about desert, if someone says “we need more redistribution, look at all these people who couldn’t meet a $500 emergency”, it matters a bit to the argument if we have reason to believe that they still wouldn’t be able to under your favorite redistribution scheme.
As for fault, at some level the distinction between having (or not having) X, and the things you did or qualities you possess which cause you to have or not have X, needs to be a distinction with a difference, if we’re going to avoid an explanatory infinite regress– unless we’re going to do away with the idea of desert and fault altogether. (OK, you may have earned your good financial judgment by courageously saving the people in a burning building in your previous life– but what makes you think you deserved to be courageous?)
Yeah, it’s always easy to kick down. Poor people don’t deserve a TV, or clothes, or food, or to have kids. Get out of your bubble and meet some of the working poor in this country. If 60% of this country is just lazy bastards why is it only a problem in this country? The rest of the OECD isn’t nearly as bad off.
Well someone isn’t familiar with the statistics, the average US household has more cars, TVs and sq ft of housing than the rest of the OECD. In terms of material comfort the working poor in the US enjoy comparable, or better lives to the average OECD citizen.
In europe you can actually use public transport to get to work, you can buy property in a city for a reasonable price, or in a suburb that has smaller plots of land and everything is walkable. We have horrible urban planning. That does not make us better off.
No one can afford to live in cities in the US? Where do all those 350 million people live then? Lists of the world’s most expensive cities almost always have 2-3 European cities before the first US city cracks the list.
The EU has an average UE rate of 7.3%, great! Take the train to the job that doesn’t exist and visit museums that are closed on Mondays. Sounds like an idyllic life.
Evicted.
https://www.curbed.com/2018/4/9/17216054/eviction-records-data-matthew-desmond-princeton
And paying way too much of their income for housing.
http://www.governing.com/gov-data/economy-finance/housing-affordability-by-city-income-rental-costs.html
@userfriendlyyy
I do want to note the data you provided does not attempt to compare the US to Europe which is the comparison baconbits9 is making. If you want to have an argument, best practice is normally to provide evidence that actually addresses your opponent’s point.
Thanks christhenottopher for putting it more nicely than I was going to.
Europe isn’t any cheaper, and in many places is more expensive for entire countries than for many US cities (by income to rent ratios). These aren’t fro equivalent homes either as US square footage per household is higher than European.
https://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/
Oh look, a link, let me read and find out how affordable Germany is
Hmmm, maybe you didn’t want to point out Germany specifically. Maybe I will take a look at this graph here that shows housing costs as a percent of disposable income. Looking for the USA at the top… nope not at the top, ok then the middle…. nope not the middle. OK, I’ll look for the USA in the cheap section…. oh look in 2005 your source has the US as the 5th cheapest place for affordable housing and cheaper than virtually all of Europe.
YOUR LINK
Could you elaborate a bit? Is your opinion that poor people deserve a TV? Everywhere, every since the invention of television, have poor people deserved to have one regardless of production costs?
(same can be asked of clothes and food and children, though the answers need not to be the same under every moral system)
Obviously not. Is a phone an absolute necessity now? Was it always? The internet? Times change and basic necessities do too, I’d hardly call a $50-100 TV a splurge by some horrible irresponsible family. Maybe they have kids and that is the only time the parents can get to themselves at the end of a long day.
Add “place” and “social background” to the list and I subscribe. That’s exactly why we have a difficult time defining what’s a “basic” “necessity”, which is why some of the discussion looks like people kicking down on the poor when they disagree with you.
Nobody ‘deserves’ a TV. I personally dont own one, but as ueserfriendlyyy mentioned, it does offer a readily available distraction for people with little economic hope whose lives might otherwise offer very little to enjoy. Simply criticizing the fact that many poor people own TV’s misses the point, in my opinion.
^ True that, but saying that the poor people who can buy a TV are completely inacapable of sparing $500 once for a doctor is a stretch. By the way, many of them may be buying these things instead of saving exactly because they trust they can get the $500 someway if they ever need.
Has this always been the case? If so, it seems futile to imagine a world in which it weren’t true. If not, whence this sudden cataclysmic loss of financial discipline across more than a hundred million people?
Debt is a significant contributor. Paying an additional expense of servicing substantial debt can make a median income feel like a much lower one.
Amazon paid $412 million in taxes last year. You can argue that they should be taxed more, but the number is not zero.
Get more up to date sources. Last year in that article is 2016.
https://www.themaven.net/theintellectualist/news/in-2017-amazon-paid-0-in-u-s-taxes-despite-making-5-6-bn-ac2OnMH2pE-11VhAzB-GIA?full=1
I’m not the first person to make this observation, but Amazon’s ownership is a disperse collection of shareholders. Even if Amazon did pay zero corporate tax, any shareholders who realized capital gains paid taxes on that. The claim that “Amazon” paid zero taxes is demonstrably false.
So as long as the billionaires who own congress, payed to bring the top tax rate down and added a bunch of loopholes for themselves payed what they are legally allowed all is gravy. This is why I don’t comment on this blog as much. It’s like everyone here believes in the divine right of billionaires to have more money than they could possibly ever use, even when the way they make that money is by treating absolutely everyone that works for them like underpaid slaves.
Life in this country is objectively awful. It is so awful people are killing themselves at a rate high enough to bring down the average life expectancy of the whole country for two years in a row. But everyone here sees nothing but blue skies, just outcomes, and capitalisms enate fairness. This country is so stratified by class no one even notices the people around them who are falling apart. And they definitely would never think to blame anyone but that person for how bad their life is. They just didn’t grab their bootstraps hard enough.
You made an indisputably false claim about Amazon’s tax rate. When you were corrected, you went off on a tangent befitting a older, more tiresome Bernie Sanders, which is not evidence of good faith.
Yeah, Google Amazon zero taxes and you get a million articles, but clearly my argument is in bad faith because you can prove through some convoluted logic that they really did pay some taxes. And rather than getting sucked down in the weeds of a pointless argument about minutia I get exasperated and go back to my main point. What an intellectually dishonest person I am.
You are arguing in bad faith, repeating a lot of misinformation spread by Donald Trump. Amazon doesn’t pay 0 taxes. They pay a reduced tax rate because they invest their surplus in growth rather than declaring it as profits.
This is what the tax system is set up to incentivize them to do. Invest rather than distributing their profits as dividends to the capitalists who own their stock. This is why Matthew Yglesias once famously described Amazon as a
“charitable organization being run by elements of the investment community for the benefit of consumers.”
I don’t understand the tone of moral outrage against Amazon. The government created the tax code. The system is working the way they designed it. The problem is with the government, not with Amazon. I guess the answer is obvious: if you could admit that the government might sometimes do things wrong, you could no longer claim that the government was the solution to every problem.
You are objectively hoodwinked by propaganda.
Median income is up. Median personal income in the US is higher than average income in most European countries.
Median net worth is up, although still struggling to recover to the pre-recession high. We compare worse here than to incomes, but that is because Americans carry much larger debt loads than a lot of other countries (and the vast majority of that is mortgage or student loan debt — that nasty cost disease thing Scott has written about in the past).
I’ll be honest, you’ve been lied to and you’ve eaten it up, hook, line, and sinker.
Amazon does not reinvest all of its profits. It buys back stock which is a hand out to the top 10%. As I linked to elsewhere. I would have less of a problem with Amazon if they actually paid their workers decently and didn’t treat them like subjects in a skinner experiment.
Yes, they are following the rules set forth by the government. Unfortunately we have a government that caters exclusively to the donor class thanks to a few horrible supreme court decisions. The only way to have a government not corrupted by big money is to eliminate big money. I want to tie the maximum wealth allowed to a multiple of the poverty rate. I want democracy in the workplace; every company should be a co-op to some extent. I find it abhorrent that people like Bezos profit from treating other people like this, or that Elon does by treating people like this. People should have a meaningful say in their working conditions and “if you don’t like it then quit” is a hollow suggestion in a country where the FED intentionally creates unemployment so we don’t get inflation because it becomes if you don’t like it then no job for you.
Where did userfriendlyyy claim that government can do no wrong? That sounds like a ludicrous strawman. The claim that the government can do no right is common around these parts; the opposite less so.
So which country should we be like?
Sigh. I could write a lot more here, but the gist is this. There will never be ideal regulation of companies like Amazon. What you think is a flaw in USGov is actually a flaw in human nature. The rot goes all the way through. The government is just another organization built of people, like it was in the USSR, like it was in Victorian England, like it is everywhere. Out of the crooked timber of humanity, no straight thing ever was built. We can just do the best we can with what we have, and doing it through the government isn’t always the best choice.
I’m not sure suicides rising can be attributed to a lack of redistribution. It could be anything including too much redistribution. Just glancing through some statistics it appears countries with more redistribution through taxes are the only ones with higher suicide rates. That may not be the reason but it doesn’t look like the solution.
My mistake, a lot can change in a year.
Sorry if I was a bit rude with my response.
Our government wants businesses to reinvest their capital to employ more people and set up the tax system in a way to reward that behavior. Amazon is investing a lot of money and as a result hiring a lot of people. The policy produces the intented result.
I don’t see anything wrong with it. It makes more sense to tax companies who don’t reinvest their money into their business.
Urgh.
Stock buybacks are not reinvesting they are handouts to the top 10% who own over 90% of stocks.
http://money.cnn.com/2018/03/05/investing/stock-buybacks-inequality-tax-law/index.html
Amazon, like every other company, is guilty as charged.
https://www.forbes.com/sites/charleyblaine/2016/02/11/why-amazon-com-boosted-its-stock-buyback-program/#57a309db3e0c
The problem is that as far as Employment numbers go, Tech Companies are still a rather small percent of the entire US workforce. Vastly unlike the days where large numbers of manufacturing plants spread around the nation employed a decent proportion of the workforce. In the modern tech era, the large companies (market cap wise) ie Microsoft, Apple, etc… employ small numbers of people compared to the overall workforce.
Userfriendlyyyy,
Just as a random question what do you think your everyday billionaire does with the money they earn from share buybacks or anything else (other than pay tax, however small the amount)? All they can do is invest it or spend it. So billionaires aren’t taking wealth out of circulation – they’re using it the same way as government would.
Look at it in this somewhat cartoonish way. The closest analogy to your model of a billionaire I can identify is Scrooge McDuck (seriously you don’t give the impression of understanding anything about individual billionaires and therefore seem to be appealing to a mental model of the exploitive billionaire with no redeeming features). His big pile of gold does look economically damaging. But actually unless he is paid in gold he has to buy the stuff creating wealth through the transactions and circulating money further. He also makes others richer by reducing the amount of gold in circulation stimulating production and raising asset values. This might sound horrible to you but more wealth means more for everyone. Anyone advocating government acquisition of assets is encouraging exactly the same thing.
Stock buybacks are neither investments nor handouts: they’re just an alternative way of paying dividends, one which the US tax code happens to favor at the moment.
What do I think the average billionaire does? First off I think that they use their disproportionate power to depress wages paid to the rest of us.
Or create asset bubbles. Like the good people over at Goldman do non stop. Which REALLY hurts the rest of us.
@Watchman
Your claim has the corollary that there would be no negative economic effects if we confiscated all billionaires’ wealth and gave it to the government to spend. Do you endorse that?
Alright, there are a lot of strong opinions here from people who don’t seem to be able to read a financial statement, instead relying on journalists (themselves often financially illiterate) to do it for them. All of this information is publicly available, and it’s not a bad idea personally to be literate in it.
For the record, AMZN does not buy back much stock.
They do pay out a lot of stock options (technically a non-cash expense for the company, but it takes cash out of the hands of shareholders and puts into the hands of employees), and many companies try to offset the dilution this causes by buying back stock. Which works out to being pretty similar to having just paid the employees cash in the first place instead of options, but there are reasons of incentivization for using options instead of cash bonuses.
But AMZN doesn’t really do this. They’ve just been diluting shareholders. The stock has been going up and up due to their growth, so right now no one cares.
Those headline buyback numbers have no relation to the amount of stock AMZN is buying back in the present. They merely reflect how much the company is authorized to buy back, and at best are a very weak signal of future intentions. AMZN hasn’t bought any stock in years and never really bought that much in the past. In any event, stock buybacks are not tax deductible.
2017 is an odd tax year for corporations due to the tax bill, which triggered all kinds of one-time events with its implementation. It’s tough to predict anything about the future based on what companies owed in tax year 2017. But AMZN’s tax rate in 2015 and 2016 was above the U.S. statutory rate.
One legitimate concern is that AMZN appears to be paying foreign taxes despite its international division being unprofitable (and companies can credit foreign taxes against their U.S. taxes). This is how people are suggesting AMZN pays an absurdly low tax rate, but that’s the tax rate it pays to the U.S., not its total tax rate. Why should a U.S. company that generates all its profits in the U.S. be paying foreign taxes instead of U.S. taxes? I think the tax bill was intended to resolve some of these issues, but we’ll have to see.
Lastly, one thing about those wealth numbers is they typically do not reflect the holdings of pension funds, which exist to pay out money to mostly middle class people. I believe pensions hold roughly 10% of the U.S. stock market.
They are neither reinvesting nor handouts. The individual stockholder could get the same money by selling his shares to someone else. So far as the stockholders as a group are concerned, they go from owning a company plus some cash that the company owns to owning the company plus the same cash, the only difference being that after the buyback the cash belongs to one group of (now ex) stockholders, and the company to another group.
“SFGate reports that $724 million of Amazon’s $769 million tax bill for the year are foreign taxes, according to an analysis drawn from the company’s 2017 10-K form.” — Your own source (emphasis added)
Ok, no US taxes.
You are still neglecting the fact that Amazon still pays sales tax like everybody else, and only manages to reduce their tax bill by tax-deductible investments. Charity donations are *often* used as a tax-hiding scheme, and I actually prefer business investment. (it’s pretty easy to set up a sham charity or 5)
@cryptoshill to be scrupulously fair, Amazon cannot be required to collect sales tax on items shipped to states where the seller does not have a “physical presence,” per Quill Corp. v. North Dakota, 504 U.S. 298 (1992). Amazon has cited Quill Corp as justification for not collecting any sales taxes until 2012. Since 2012 they have voluntarily collected sales taxes on goods shipped to some states, but not all. There is a current suit before the Supreme Court, South Dakota v. Wayfair (oral argument from April 18, 2018 can be heard or read here, courtesy of Oyez), concerning a proposed law which would require any out of state business to collect and remit SD sales taxes, provided that business retails and ships “tangible personal property” into the state to the tune of more than $100,000 in annual revenue or more than 200 annual transactions. Justice Kennedy is widely believed to favor this bill, but the opinion of the court has not yet been released. So no, at least for another month or so, Amazon is not required to collect and remit state sales tax like everyone else.
Additionally, sales taxes are trivially easy to pass along to the consumer; you don’t have to do any projections about how much you should raise prices in light of projected revenues or anything…just jack up the price at the point of sale for the exact amount of the sale tax. So it’s a bit much to say that Amazon is the one “paying” the sales tax.
60% of the US population couldn’t afford a $500 emergency.
Needs elaboration. In the event of a $500 emergency, ____ is what happens to 60% of the US population. Bankruptcy? Seems bankruptcy would be much more common, then. Does it mean they have a crappy couple of months while working themselves out of a $500 hole?
Bankruptcy is for rich people who can afford lawyers.
People with no money are just broke.
What’s the crappiest couple of months you’ve ever had? Like are you speaking from experience?
Looks like a little more than 10% of all bankruptcies are filed pro se, so it looks like bankruptcies can be sought by people who can’t afford a lawyer after all. (I bet that really sucks, though)
I’ve had a pretty good life. If I had a deep understanding of poverty, I probably wouldn’t ask any questions about it.
Would you like to answer my question now, or just continue to deflect by making this about me?
Working yourself out of a $500 hole is difficult for a large number of working people. I am currently in that situation, and yet I can do it somewhat easily even though I have an admittedly lower-scale income, because my expenses are low and I have some fallback via family and other connections. Vast numbers of citizens dont have those advantages, let alone access to Higher Paying jobs
I asked about you so that I could understand what you meant by “a crappy couple months” so that I could even begin to attempt to answer your question.
Apparently by your own admission even you don’t know what you mean. Not sure where you get off accusing me of “deflecting” in that case. Not sure why you’d expect me to want to engage further with you if that’s how you respond to a request for clarification.
wysinwygymmv: I got my answer from userfriendlyyy, who is the person I originally sought it from. Hopefully you and I are done.
christianschwalbach:
Of course. But userfriendlyyy’s source indicates his statement was quite a bit oversimplified, in my opinion. What you refer to as a ‘large number of people’ doesn’t appear to be a very high percentage of people, and would seem to include me. Very grateful for his link.
@Matt:
Sorry to have offended you. Hope your day gets better.
What makes someone financially responsible is that they choose to have the crappy month before the emergency. So yes, we’ve had months where we ate a lot of rice and beans and lived with furniture found on the side of the street in order to build up enough of a financial blanket to avoid an even crappier month.
There are people who experience much worse financial hardships, but that number is not 60% of Americans.
https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/#53438ca44e0d
Yeah, there are some with some wiggle room in expenses but it’s sad that many people are paycheck to paycheck.
hey, thanks:
According to a brand new survey from Bankrate.com, just 37% of Americans have enough savings to pay for a $500 or $1,000 emergency. The other 63% would have to resort to measures like cutting back spending in other areas (23%), charging to a credit card (15%) or borrowing funds from friends and family (15%) in order to meet the cost of the unexpected event.
That is about what I expected, and despite my wealth relative to those in true poverty, the Bankrate survey would have lumped me in with the 63%.
The point of comparing how much Bezos makes to how much Amazon pays in taxes escapes me. How much did Bezos pay in taxes?
Probably very little in relation to how much he makes. Most of his wealth increase comes from capital gains which are untaxed as long as they are unrealized.
Bezos sells off $1B in stock a year, just to pay for his rocket startup Blue Origin.
http://www.latimes.com/business/la-fi-bezos-amazon-blue-origin-20180312-story.html
The interesting question: Does knowing this new fact change anyone’s mind about anything?
Yes. I dislike Bezos, but seeing this sort of stories — and there has been a concerted information campaign lately on how dedicated he is to space exploration — makes me think slightly better of him.
With the caveat that this also makes me slightly worried about a “Hardwired” future. But I’d rather have this sort of space exploration than none at all.
It’s a cumulative thing, though.
Your link says that most stocks are held by the superwealthy, but that doesn’t change the fact that most stockholders are middle class people trying to save for retirement. The stock market is the best way for middle-class people to grow their savings, especially if they don’t have enough capital to buy less liquid assets like businesses or rental properties, or the time to research and look after those kinds of assets.
Bezos should be one of the richest people on the planet. Amazon is something that has made life far easier for hundreds of millions of people.
Also, if someone is making a 60th percentile income in America (which is more than $65k per year) and can’t afford $500 for an emergency, then they are simply bad at financial planning.
So since more than 90% of stocks are held by the top 10% that would put the middle class where? Yeah sure the stock market is a great way to increase your savings, too bad no one has any savings in this country because companies like amazon treat their employees like patients in a Skinner experiment and that is the only job left since Amnazon killed all the mom and pop stores in town.
The fact that most stocks are owned by the rich doesn’t mean that they aren’t also the middle class’s best route to building wealth. If someone offered to give me $10,000 a year for life on the condition that Jeff Bezos would get an extra $10 million, I’d take it. No one has come up with any plausible alternative for middle class wealth building that is better than widespread stock ownership.
China has a 40% household savings rate even though incomes there are much lower than in the US, so I don’t think you can blame low incomes for low saving. It is more the conspicuous consumption and immediate gratification built into our culture (also seen in our large persistent budget deficits).
There’s also some structural issues related to how much close ‘necessities’ cost in the US that isn’t true in China. The differences aren’t purely ‘people are more disciplined in China’.
In the US either:
1. you don’t go to college and will never make enough to save.
or
2. You do go to college and graduate with so much debt that saving is out of the question until at least your 30’s if not 40’s.
I’m not even going to get into PPP comparisons.
Lets see, do I have a college degree? No? Hmm, weird how I’ve perpetually had over $400 in my bank account for the last 16 years.
I graduated with just about average debt for the class of 2011 with an almost unemployable double major in liberal arts at a time when the US unemployment rate was still 9% and actually 10% in the state I live in. I didn’t make even $14,000 a year in any year until 2015 (grad school and a year in Americorps aren’t super lucrative even with a full ride on tuition but not housing). Hell for about half a year I was living off $550 a month (when you have that little you know down to the cent how much you’ve made). And THAT was hell to live through. When I got a job paying $12 an hour in late 2014 I felt like a king. I still make less than $38000 a year, but I’m 29 and I’ve made liquid saving just to have a cushion against unexpected expenses. I still put the maximum for my employer’s match in my 401k and if I didn’t still have student loan payments I’d have even more going into savings. And yes I’ve got positive net worth now even despite the loans that I only really started making payments on in the past 4 years. So don’t give me this “I have to make a point by saying there’s no way to make reasonable choices in spending and that everything is terrible.” And yes I get annoyed by people making 2, 3, even 4 times as much as me and still lamenting they can’t possibly cut spending or really save anything.
There are still indulgences in my budget (for instance I took a trip to Japan last year just for fun and yep, even right afterwards could have had a $1000 unexpected expense) and I don’t think people should only live on the minimum needed to survive. But the laments of how unaffordable living is in developed countries drive me nuts. Especially since it’s generally native born people doing it while even poorer immigrants somehow find the way to send funds home to family while still living. “There is no choice, everyone not making the 1% income has this problem.” No they don’t! There are options! And rather than waiting around for the world to build itself around your spending, you can improve your own situation.
I know I’m ranting some. I know that some people have unlucky circumstances that make the above harder (such as unexpected medical costs I’ve been lucky to avoid). But these statements about how so many people have this aren’t nuanced like this. 63% of the public isn’t in special unavoidable circumstances. They can make different choices and telling them it’s inevitable prevents people from learning what can get them out of the holes they’ve dug.
“you don’t go to college and will never make enough to save.”
Heh. Go apprentice in a trade and you can start making enough to save before guys who head off to college even begin to start making payments on their school loans.
@userfriendlyyy
I made about $50,000 in the last 12 months. I have only a high school diploma because I had to drop out of college for health reasons, and although I intend to finish my degree at some point so that I don’t have to live the kind of life required for doing shift work at a factory, one can hardly say that I’m not taken care of financially at my job. I have $10,000 in savings, all from the last 14 months. One might have to give up a little in work-life balance, but there are barely literate (in English at least) immigrants making $80,000-$100,000 a year at my factory. In many places construction companies are desperate for skilled or even just reliable and teachable labor. It is simply false that in the US “you don’t go to college and never make enough to save”
“no one has any savings in this country”
Can we call a moratorium on ridiculous overstatements like this?
I work for a bank with $2.2 trillion in assets – SAVINGS – under management. Mostly of middle-class consumers, in their checking and savings accounts, IRAs and 401ks.
Amazon does pay taxes.
I’m not sure if you mean the second sentence as support for the first – I don’t know what percentage of the population in the gilded age could afford a $500 emergency.
As to the “$500 emergency” fact that gets passed around, while the situation is quite serious, it has sort of grown in the telling. Here’s a description of a Federal Reserve study that looked at a similar question ($400 emergency):
https://www.federalreserve.gov/publications/2017-economic-well-being-of-us-households-in-2016-economic-preparedness.htm
In that case:
1) 56% of respondents said they would respond to the emergency by paying cash or with a credit card they would pay off in the next statement. (Which the authors term “cash or its functional equivalent”).
2) Of the remaining respondents , 73% (i.e. 32% of all respondents) of the total stated that they would handle an emergency by borrowing money or by selling something, and 27% (12% of all respondents) said they would not be able to pay $400 to cover an emergency.
So the more precise formulation might be “almost half of the country couldn’t cover a $400 emergency without borrowing money, more than 10% couldn’t cover the emergency at all.”
Also, 7% thought the questioners were hitting them up for money and low-balled their savings so they wouldn’t have to loan them a $20.
You’ve made a rather elementary error. “The average stockholder is just some guy saving money for retirement” is not the same as “The average unit of stock is being held by just some regular (ie, non 1%) guy saving for retirement”. Your arguments are relevant to the latter phrase, but not what Scott actually said.
Scott’s point seems to have been that the “stock owning classes” are no longer a distinct strata of society, so some of the rhetoric of the time no longer applies.
Generally disappointed in this entire subthread, though I can’t point to particular offenders. Please take a second to consider whether you really want to continue this discussion like this. If someone has ideas for how to make future threads better than this, let me know.
Yeah, the actual productive part of the essay is obviously “what did the Fabians do right and wrong and what does that teach us today,” but the one that’s easy (and fun) to debate is “does capitalism suck.” I recognize the problem, and have no productive suggestions.
I still feel like it should be possible to debate whether capitalism sucks better than this.
Right now my diagnosis is that userfriendlyyy threw out so many kind of unrelated anti-capitalism statistics that it turned it into kind of a mood affiliation thing and other people felt like they had to respond in kind even when there was no specific point at issue. But I don’t want to ban userfriendlyyy for doing this (it’s not really a bad thing to do or against any rules) and I don’t know how to prevent the angry response from happening again the next time.
If you’ve got one smart person who wants to debate about how capitalism sucks (or socialism sucks or whatever) and a bunch of other smart people who want to talk about how the Fabian society’s techniques might be generalized and brought into the 21st century, in a thread that is basically titled “Let’s talk about the Fabian society’s techniques”, then the “[X] sucks” part of the debate is going to be unbalanced from the start.
It should indeed be possible to debate whether capitalism/socialism sucks in an intelligent and productive fashion, and SSC in general is probably one of the better places to do that. For which, as usual, thanks. But in hindsight it might have been better to note up front that discussions of the Fabians’ object-level beliefs are off-topic for this post, point to the Open Threads for that if it can’t wait, and enforce it from the outset.
Probably too late now, for this thread, but it’s the first thing that comes to mind for the future.
+1
Yeah, on reflection, I fell for “someone is wrong on the internet,” wasted about an hour of my time yesterday, and didn’t materially improve the conversation.
Thanks for the alert – I’ll try to be more thoughtful.
Speaking as someone who personally leans somewhat towards the “capitalism sucks” side and is interested in talking about that sort of thing, generally, this was not a conversation that I think helped anyone involved in any way. Thank god for “hide” buttons.
Agreed with most of what John Schilling says.
Signal:Noise.
It’d be a fine thing to discuss on an open thread, but in the comments specifically about the Fabians, it just bogs down the whole discussion.
Discussion of the Fabian Society is fertile ground promising low-hanging fruit, to overuse agricultural metaphors.
Empirically, every time there’s a thread on a topic that could be framed as “does capitalism suck?”, the comments turn into a dumpster fire. Just pages and pages of unsupported socialist jargon and talking points and whataboutism, and equally bad responses from the center and right.
We can keep things relatively sane if we’re talking about one talking point, even if it’s pretty far out there politically. Partial exceptions apply for guns, nerd-adjacent issues, and fat acceptance, but in each case it’s only a few users that can’t resist the temptation to snipe. But anything broader is asking for trouble, and lots of people get in on the action.
I notice most of the links coming up in this (including some from me, mea culpa) were from news organizations. I do think J Mann is right going to “capitalism: pro or anti” seems to degrade the quality of conversation. But I also wonder if maybe citing primarily from media outlets and blogs tends towards toxoplasma types of discussions? After all those types of outlets do tend towards the most controversial interpretations of data possible. They’re easy to google of course which is nice and tend not to be paywalled, but perhaps we should all be really careful about how often we rely on those for sources rather than less interpreted data? Treat them like processed food, yes they’re easy to digest, but we might should be cautious when other people are doing too much processing for us.
When you make meta-level posts that revolve around razor-hot, unresolved object-level issues, it’s too much of a temptation for posters to resist.
For what its worth, I think your review was commendably even-handed and charitable. This is coming from the perspective of a self-described socialist.
Perhaps it would be useful to require intellectual table stakes for some issues that are perennial hot-buttons, to keep people from getting into the same old arguments over and over. Want to argue feminism vs MRA? Show evidence of having read these two books. Socialism vs capitalism? Those two. Global warming? That one. And so on.
Generally speaking, normative discussions tend to shed more heat than light because they are difficult to resolve by providing more information. Perhaps for controversial topics where you do not wish to heavily moderate the comments, we can taboo normative claims and focus instead only on empirical/logical claims.
In other words, “Bezos is the richest man on the planet” is more likely to lead to productive discussion than “Elon earns way too much”, so we could prohibit the latter in cases likely to devolve into culture war.
Yeah, this was a low-quality thread. I should have passed on it, but I lacked…. the patience of Fabius.
A longer comparative section on Non-profit governance, and maybe a short section really hammering down on what earlier similar organisations (The Chartists and the LWMA, mostly.) came up short on relative to the Fabians.
That might get the general idea that we’re talking about organizational effectiveness, not end-goal utility.
I’d recommend if you haven’t already (I know most here are pretty familiar with Georgist political philosophy and land taxes.) reading up on the Chartist movement, as they really were a Working Class/Middle Class amalgam against the large landowners, exactly the thing the Fabians thought was unworkable
How many people who couldn’t afford a $500 emergency have a TV or car that cost $500 more than it needed to, or spent $500 on fast food over the last few months?
I was reading through a lot of the comments and wasn’t exactly sure where to put this reply, but this seems like a fine place.
userfriendlyy, you are not getting through to anyone just by shouting out billionaires are evil and earn too much money. You need to explain how it is that the free market has failed in determining how much money billionaires earn.
The most convincing argument I’ve seen, even if it isn’t convincing to you, is that it’s because that since CEOs are singular persons who know how to negotiate a salary well, where as share holder boards are fractured groups of many people, CEOs are able to relatively easily demand salaries higher than they deserve.
https://en.wikipedia.org/wiki/Executive_compensation_in_the_United_States
Hopefully that talking point is useful to you.
@jeray2000: It amazes me how many people don’t understand that CEOs are employees too. A lot of people seem to have this bizarre misconception that CEOs are basically feudal lords who own companies and can do anything they want with them. That’s why, for instance, they get upset at charity and non-profit groups that pay large salaries to their CEOs. “If the company really cares about this cause, why is so much of their money going to the CEO?” The same reason any employee gets as much money as they do: because the company needs someone who can do that job, and they couldn’t find anyone sufficiently competent who would accept less.
@LadyJane
It seems that many companies are not paying for sufficient competence. There seems to be a common belief among company boards that there is no sufficient level of competence, but instead it is crucial to have a more competent CEO than the competition.
Furthermore, many seem to believe that monetary compensation is the main reason why CEOs choose a position.
As such, they seem to tend to want to pay more than their competitors, which is of course not a sustainable model, because it is impossible for everyone to pay more than average.
It is peculiar that this logic is rarely applied to regular workers (although there are exceptions).
It seems very likely to me that these are common errors that are made:
– a tendency to greatly overestimate the sensitivity by better workers to salary
– a mistaken assumption that paying more can be used as a substitute for actually assessing the quality of a CEO
– a mistaken assumption that highly confident CEOs are more competent
– a mistaken assumption that having a slightly better CEO gives enormous benefits
– a tendency to (substantially) underestimate the negative effects of higher pay & ‘incentivizing’ pay packages on CEO performance
– a tendency to assume that CEOs that come from outside the company are better (experience within the company seems quite valuable in most cases)
There is a study that suggests that the effect of higher pay is actually negative, primarily because company boards confuse high confidence for ability:
Other evidence is that incentive packages of large companies generally seem to reward acquisitions and mergers, while these on average seem to destroy value.
This horse will be beat to death, but a short observation: Elon already has as much money as he can spend in several lifetimes. What he has over that are resources to invest – the market (well, society at large) gave him the power to control this many resources after a very complicated decision process which involved, among many other things, the self control not to go on a spending spree.
Inheritance money yes, they’re likely to be wasted, and that’s one of the reason why heads rolled under the guillotine in France. But made money, in nowadays, are not. That’s actually one of the points of Scott here, even if it’s not very much in your face.
Another good book along this line of thinking is Carroll Quigley’s “Tragedy & Hope: A History of the World in Our Time” which is an amazing book detailing how the world came to be. He mentions another behind-the-scenes group who manipulated history to their advantage, Cecil Rhodes’ Round Table. It’s not a nutty conspiracy theory, these people really lived and really influenced the world we live in today. It makes a lot of sense, if people don’t know you exist, then nobody can oppose you. Quigley was educated at Harvard and Princeton, taught at the School of Foreign Service, Harvard, Yale, the Brookings Institute and the Foreign Service Institute of the State Department. Ruling class all the way. Bill Clinton called him a huge influence on his life.
You can download the book for free here. It’s long. The author apologizes for the length but says the subject matter deserves no less. I’m one chapter in and already it’s fascinating. He says the developing world got civilizational advancements in a different order from us and this had a huge impact on them. While we first developed Western ideology, revolution in weapons (firearms), agricultural revolution (feeds the people), industrial revolution (employs all the new people), revolution in sanitation and medicine (keeps these people from dying horribly), demographic explosion (more hands to work) and revolution in transportation and communications; the rest of the world first got weapons, then transport, then medicine, then industrial revolution, demographic explosion, agricultural revolution, and then (if at all) Western ideology. “The fact that Asia obtained these traits in a different order from that of Europe is of the greatest significance. We shall devote much of the rest of this book to examining this subject.” Highly recommended.
Thanks for the recommendation!
[wishes for likes, knows they would probably be horribly counterproductive in general for some reason]
Bryan Caplan has pointed out that that there was (at least) one extremely prescient exception to this: Eugene Richter’s 1893 dystopian novel Pictures of the Socialistic Future.
Herbert Spencer also saw the totalitarian aspect in his 1891 introduction to A Plea for Liberty: An Argument against Socialism and Socialistic Legislation:
Is that quotation meant to be taken as prescient? Because part of the point of this post, surely, is that the Fabian-style socialists DID take over the world. We currently live in the “general socialistic organization” they envisioned, to a very large extent at least. And it’s very far from clear to me that this is a bad thing (which I think is also true for our host).
It’s meant to be taken as prescient for the results of socialism if it’s “relieved from all restraints”, which so far has only happened in the Soviet Union, Maoist China, etc. The specific scenario Spencer was warning about (in the part that I cut out of the excerpt) was:
Despite having many successes (as Scott noted), the Fabians never gained complete dominance like this in Britain, and never fully implemented their vision for society.
On page 10 in their “True Radical Programme”, for example, they list their primary goals as: “the extinction of private property in land, and of the consequent individual appropriation, in the form of Rent, of the price paid for permission to use the earth” and “the transfer to the community of the administration of such industrial Capital as can conveniently be managed socially”. Neither of these happened in Britain, so Spencer’s predictions shouldn’t be judged on the results there. In every country where those goals actually were realized, however, I think Spencer’s predictions hold up pretty well.
Fair enough.
You might imagine that the second has occurred, depending on how much work you’re willing to allow “can conveniently be managed socially” to do.
I might be slightly fogged by being awake for 32 hours, but my memory was that Mises’ “Socialism” was the first book I encountered to lay out why communism would inevitably fail (the initial publication was apparently in ’22, but it didn’t get translated into English until ’36). And if I remember correctly, he’s making the “Red Plenty” argument that you need price signals to actually know what anything is worth, and so you can’t have efficient allocation without a market and so all communism is inevitably doomed.
But it’s been ages since I read it and he was never the most comprehensible writer, so I may be totally wrong here.
Markets with price signals are not necessarily incompatible with socialist economies, although it requires some rather creative arrangements (see the Market Socialists and folks like Seth Ackerman at Jacobin).
Or, apparently, China.
China isn’t a socialist economy, even if they choose to call their version of a mixed economy “socialism with Chinese characteristics.”
Market Socialism a la Abba Lerner has a serious incentive incompatibility problem—the people who are pretending to be capitalists are not the residual claimants, so maximizing the firm’s profits is not actually in their interest.
Something like the Yugoslav system of worker run firms ends up closer to capitalism than to socialism, with problems due to distorted incentives–hiring an additional worker dilutes the ownership share of existing workers, giving them an incentive not to, and a firm with excess cash and no good opportunities for internal investment can’t buy an ownership share in another firm with good investment opportunities but no excess cash. It can make a loan but can’t do the equivalent of buying stock.
Mises goes on for a while about artificial markets and why they wouldn’t work to produce effective price signals, but I think that’s irrelevant to the conversation. My understanding is that Shaw – the only Fabian I’ve read much of, and, obviously, the most influential – was not at all a market socialist; he and the people he was in consensus with were arguing that top-down directing should be generalized across all society, to maximize gains from economies of scale and prevent the accumulation of wealth.
Clearly all of you need to read more E. Nesbit. 🙂
The calculation controversy was basically Mises et. al. vs Lerner et. al., and I think the usual view is that the former group won the argument.
It’s the great pretense of contemporary times that breadlines in Havana prove the “failure” of socialism but the 60,000 people who will sleep in shelters in New York tonight, surrounded by the greatest affluence the world has ever known, doesn’t prove the failure of capitalism.
All the murders of people for hurting the government’s feelings, and the fact that there are far more boats desperately leaving Cuba than boats desperately coming in to Cuba, are the things that prove its failures.
Nah, its the great pretense of contemporary times to compare the worst of capitalism with the average of socialism to attempt to make them look remotely similar. We should all be like Havana where the poor are poor, and the middle class is also poor, and the upper class is also poor and the top 1% control 100% of the economy.
Of course socialism and communism failed because they promised a better world and delivered a worse one, capitalism didn’t promise anything but it has been observed to deliver a better world.
unfortunately, you seem to be trying to rebut exaggerations with other exaggerations and as a result, I can’t trust your narrative any more than I can trust Freddie’s.
What’s the homelessness rate like in Havana, by the way? Every morning on my walk to work I see a bunch of people in sleeping bags outside the subway. Anything like that there?
Probably better to be poor with a roof over your head, I would think.
No, the worst of capitalism was decades of ultra-capitalist fascist rule in Portugal, where living standards collapsed compared to the socially democratic European states. The average of capitalism is Detroit, a once-thriving community devastated by de-industrialization wrought by the profit motive.
No, Portugal has a population of 10 million, Detroit has a population of well under 1 million. You would need at least a dozen Portugal sized examples to pull down the average of standard to Detriot, and that would still be a mile higher than the standard of the average socialist/communist country in history.
How do you get to calling the fascist / corporatist Portugese government an example of ultra-capitalism? I can see laying the blame on nationalism, conservativism, right-wing politics or even the Catholic church, but capitalism? In practice, Portugal’s economy behaved as one would expect from seemingly every other example of a country trying to find a third way between Marxism and capitalism, so citing it as “ultra-capitalist” seems lazy or even deceptive. It’s a useful example that even an ethnically homogenous nationalist state can screw things up, at least.
Or we could do what makes actual sense, which is to look at all the dirt poor capitalist countries in the developing world, which are kept dirt poor in large measure through the neocolonial behaviors of the great capitalist powers. I mean, as long as we’re cherry-picking, right?
Go sleep under a bridge tonight and experience the condition of the half a million homeless people in this country and get back to me about the glories of capitalism. Because when you endorse the system you endorse their condition.
Sure we can do that, go ahead, write up a definition of capitalism and list the countries.
Would it be better if we were Canada where their % of homeless is 3x as high? Or the Netherlands where its higher, or Greece, or the UK, or Sweden… tell me when I hit a country whose praises you would sing so you know where you can spend a night under a bridge to make it fair.
@baconbits9
I think it would be easier to say which countries aren’t capitalist. I count North Korea, China (maybe) and Cuba. We can also discard countries that are active warzones. That still leaves us with 180 or so capitalist countries, so I think it’s safe to say that the average of capitalism is approximately the average of the world. From a brief search, it looks like the global median income is ~$3000. From assuming the ratio between Cuban and Chinese GDP/capita and medium income is the same as that of the countries with median incomes listed on Wikipedia, I get that they have medium incomes of around $5000 and $7000 respectively.
I think it would be easier to say which countries aren’t capitalist.
When it comes to identifying political systems, there’s this Motte and Bailey shell game played with two Mottes. These Mottes tend to be jokingly summarized as “Roads are Socialism” and “Real Socialism Has Never Been Tried”. Socialism is either any country which has a functional government (aside from, perhaps, the US) or Socialism only ever existed in one or two incredibly brief examples (possibly Catalonia). Every time you try to nail down an argument against one definition of Socialism, the defender switches to the other definition.
It’s all the more extraordinary in that it’s really easy to spot self-proclaimed Socialists, just look for “Socialist” in the name of the state or political party (see Union of Soviet Socialist Republics, National Socialist German Workers Party, or the United Socialist Party of Venezuela). On the other hand, while I’m sure there is a Capitalist Party somewhere out there, I don’t think that there’s any such body in power.
What ultimately matters are policies. Price controls create shortages. It doesn’t matter if its “Capitalism” inflicting rent control on New York or “Socialism” raising the Venezuelan minimum wage three times this year, it’s going to lead to problems. Economic freedom correlates highly with prosperity; lack of economic freedom correlates highly with both poverty and oppression. I’m opposed to price controls. I’m opposed to forms of capitalism that are built around economic controls, as well as socialism which defines itself by economic controls.
And human rights mean that sometimes you can’t help everyone. We could cut down on the homeless by re-opening the asylums, by throwing more drug users in prison, by rounding up and mass deporting the migrants. It would make our homeless numbers look better, certainly, but we don’t. It also helps if you can throw the poor guy that failed to solve the problem… or reported it in the first place… in the gulag; that makes problems “go away” real fast.
@Civilis
There is of course the middle ground: “Real Roads Have Never Been Tried”
> Why did the “great capitalist powers” allow some former colonies like Ireland, Hong Kong, Singapore, South Korea, Finland, et cetera, to rise from dirt poverty to high levels of economic and human development, but not other former colonies?
That’s easy. It all depends on the fish. https://slatestarcodex.com/2014/06/16/things-that-sometimes-help-if-youre-depressed/ explains that
> https://slatestarcodex.com/2014/06/16/things-that-sometimes-help-if-youre-depressed/
The countries you listed are next to the ocean, so the people there get to eat a lot of fish. We here in Hungary are away from the sea, so people eat very little fish. That’s why the economy doesn’t work so well.
@Civilis
Sure, some defenders of socialism play that game to their advantage (although I see the opposite a lot more here), but my chosen definition benefits baconbits9 here. If we broaden the definition of socialism to include e.g. the countries at the top of this list (say, the ones above Cuba) then we’re now comparing Cuba, China, North Korea, Venezuela, Timor-Leste and a load of very nice Scandinavian countries to the rest of the world. That comparison favours socialism more than just considering Cuba, China, North Korea, Venezuela does.
This is why ideal world comparisons are bad. One can easily point to the overwhelming differences between socialist and capitalist countries to justify why they think 500,000 homeless is better than authoritarianism in the name of equality while endorsing policies that would ameliorate their condition. To put it more simply, a stubbed toe called for a bandaid, not an amputation.
rims,
That would be an interesting definition to use since those same nice Scandinavian countries rank pretty highly on most rankings of economic freedom. For most pro-capitalist thinkers the proportion of GDP that a government takes in taxes is far less important than the degree to which markets and the price system are allowed to operate, and since the 1980s the Nordic countries (Sweden and Denmark in particular) have done a good job of balancing a high-tax, high-spending fiscal model with a relatively free-wheeling regulatory environment.
@Civilis
>When it comes to identifying political systems, there’s this Motte and Bailey shell game played with two Mottes.
Yeah, capitalism is either any country with a functional economy, or has never been truly realized and all its apparent ills are due to evil government interference. Every time you try to nail an argument against one of them, the opponent switches to the other.
Also, socialism is always necessarily totalitarian (because you, like, totally own those means of production), presumably unlike the completely democratic capitalist corporations we currently work for.
@Atlas
>Could it be that there are better explanations for why some countries are richer than others?
Yeah, their anti-free market policies and direct government intervention in economy, directly contradicting neoliberal dogma, that would have nowadays been quashed by international financial organizations. (see: “Bad Samaritans”)
As per the above, you can now switch to “but they’re all still capitalist”.
As to why did the “great capitalist powers” allow some countries to rise, well, they didn’t have much say at that point, it was the middle of the cold war and I’d assume they were perfectly happy just to have them on their side of the conflict (or neutral), instead of turning to USSR/China for protection and guidance.
Yeah, capitalism is either any country with a functional economy, or has never been truly realized and all its apparent ills are due to evil government interference. Every time you try to nail an argument against one of them, the opponent switches to the other.
It’s a lot easier to make that argument when you can point to the ‘Union of Soviet Socialist Republics’, the ‘Nationalist Socialist German Workers Party’ and the ‘United Socialist Party of Venezuela’ as states or groups requiring an explanation. I agree partly with Thomas Jørgensen’s post below which specifies Socialist is a useless term as all functional economies are to some degree mixed, something I’ve argued myself. It’s impossible to talk about the effects of Socialism as an ideology because, like Capitalism, the definition is so broad as to be useless. But we can talk about what happens when groups that self-identify as Socialist take control of states without judging whether or not those groups are adhering to a true definition of Socialism. It’s not a judgement on ideological Socialism, but on self-identified Socialists.
Also, socialism is always necessarily totalitarian (because you, like, totally own those means of production), presumably unlike the completely democratic capitalist corporations we currently work for.
Totalitarian (a word I did not use) has a definition which historically can be said to apply very rarely (“Everything within the state, nothing outside the state, nothing against the state”); that most of those cases have been by self-described Socialists is merely observation. [Added:] If Capitalism can be said to be a political ideology, that it’s central tenet is effectively ‘thou shall not interfere with the free market’ specifically works against it being totalitarian.
If you can come up with a path to get capital owners to freely trade or give workers total ownership of the means of production, more power to you. It may very well happen post technological singularity; I’m willing to admit I can’t look that far ahead. On the other hand, if you’re going to impose dictates that people can’t own capital, it comes with certain suppositions, namely, that there is an authority that can regulate what people can and can’t do with the product of their labor and is willing to use force to compel them to comply with its dictates. That’s why I said Socialism requires economic controls. It also explains the observed behavior that we see in states that self-identify as Socialist: extensive gray and black markets and crackdowns on kulaks, wreckers, and hoarders.
@Civilas
Two thoughts here: The “free market”, at least as referring to existing systems, relies heavily on the state to define and enforce property rights. Granted, it designates most of this enforcement to the property owner themselves, who are nominally non-state entities. But still, its like: “don’t worry, we can’t be totalitarian, because the authority we have designated to rule over you isn’t technically considered ‘public'”. Its quite a loophole.
The basic Friedman-esque response to this is that you don’t need the state to enforce property. Which is true! The state is just a group of people, with nothing terribly unique about them. But this proves too much: If I was wealthy enough, I could hire mercenaries to help me kidnap people, build a border wall, and start a slave plantation. And I don’t need the state to help me enforce anything. You could insist that this situation is technically “non-totalitarian”, but it seems like a distinction that clashes with our common-use understanding of the word.
And capitalism imposes a dictate that I can’t use certain capital, namely capital that I don’t own. Since I want to use my body to access x resource, and I will be prevented from doing so, this implies that in capitalism there is an authority that is regulating what I can or cannot do with my own body. And that this authority is willing to use the threat of initiation of bodily violence against me to enforce this.
This is why capitalism requires economic controls. Socialism requires them too, of course. I point this out not because I view this authority as an indictment of either system, but rather to defuse the talking point that there is something uniquely authoritarian in the socialism system.
But still, its like: “don’t worry, we can’t be totalitarian, because the authority we have designated to rule over you isn’t technically considered ‘public’”. Its quite a loophole.
There’s a reason I phrased it as “works against” rather than something like “makes impossible”. Still, ‘totalitarian’ implies that everything… land, labor and capital… is ultimately “owned” by the state/community/tribe/people (or, realistically, the rulers). It’s easy to come up with an ideologically consistent framework that is both pro free market and otherwise authoritarian. It’s not easy to come up with one that’s both free market and insistent that the state owns everything. Admittedly, real world political leaders aren’t known for ideological consistency.
And capitalism imposes a dictate that I can’t use certain capital, namely capital that I don’t own. Since I want to use my body to access x resource, and I will be prevented from doing so, this implies that in capitalism there is an authority that is regulating what I can or cannot do with my own body. And that this authority is willing to use the threat of initiation of bodily violence against me to enforce this.
The mere existence of property isn’t an economic control. Economic controls are controls on freely derived transactions between consenting individuals. Yes, “capitalist” societies have some of them as well, and, yes, they lead to economic inefficiencies and distortions. As someone who is not an Anarcho-Capitalist, I will admit that protections against theft and fraud provided by government are likely necessary. Theft and fraud aren’t freely derived transactions, and therefore preventing them isn’t an economic control. Many Socialists pay at least lip service with the acknowledgement of personal property.
The issue is once you step away from the idea that state infringements on property rights are a necessary evil to be minimized and get to making it an end itself in the name of ‘fairness’, there’s no logical end. It’s just as easy to use your logic to justify rape and murder for the greater good. There’s no line between “yes, you spent years of your life working, saving and investing, but since you now have more than someone who frittered it all away, we’re taking yours and giving it to him because fairness” and “we need someone to dig ditches in Siberia, you do it, since I have a gun and will shoot you if you don’t”.
An example: I want to trade an orange I’m holding for an apple you are holding. We both consent to it. However, I don’t own the orange. So the authority of property kicks in, and says “no, you cannot trade that orange, because you do not own it”. This shows that property is a control on free transactions between consenting individuals.
I admit its a silly example. Because by “free transactions” I should probably assume you meant to attach the clause of “…and abiding by the rules of an existing property framework”. Under the addition of this clause, a “lack of economic control” means that you are able to trade the orange, assuming you own the orange, and if you don’t own it, you aren’t allowed to trade it.
So using this definition, an economic control is a measure that prevents someone from exchanging what is legally theirs. But the “legally theirs” part is what the whole socialism/capitalism debate is about. In socialism, the property is legally the state’s. If you “trade” an orange for an apple, its because the state consents to it. They own both the apple and the orange. So if the state chose to restrict this trade, it wouldn’t be an “economic control”, since they aren’t preventing people from trading what is legally theirs. They are just exercising control over their own property.
To sum up:
Under a simple understanding, property law constitutes an economic control.
Under a definition of “economic control” that has an exemption for legal ownership, states that claim complete state-ownership have essentially no “economic controls”.
I think the first definition makes more sense.
Most socialists I know are motivated by a utilitarian-style reasoning (or something like it). The idea of abolishing private ownership “as an end to itself” sounds pretty bizarre, I’ve never heard such sentiments expressed.
The logical stopping point here, like for all utilitarian projects, is “when it stops serving a social benefit”. Using, as you say, our “logic” to determine what the “great good is”, and acting on it, is mainstream rationalist utilitarianism. If you have objections to that, you have objections to the vast majority of what takes place on this blog.
I’m a little lost here. There’s no economic system that doesn’t require the use of force to maintain.
So using this definition, an economic control is a measure that prevents someone from exchanging what is legally theirs. But the “legally theirs” part is what the whole socialism/capitalism debate is about. In socialism, the property is legally the state’s. If you “trade” an orange for an apple, its because the state consents to it. They own both the apple and the orange. So if the state chose to restrict this trade, it wouldn’t be an “economic control”, since they aren’t preventing people from trading what is legally theirs. They are just exercising control over their own property.
The key in looking at whether an economic control is involved is “does this transaction require force to complete”. If I am stranded on a desert island with someone else, and I have an apple and he has an orange, we can trade perfectly well without any force being involved (or a state being involved). In fact, it takes force (and a state) to prevent me from trading the apple for the orange if we want to trade. This is why black markets form anywhere where trade is controlled; the state is an imperfect tool for using force, and so some trade occurs even in the absence of state consent (though with the omnipresent threat of force lurking in the background).
On the other hand, if a third party was growing the apple and I took it without their consent, there’s no moral difference between me ripping it from their hand by force and me stealing it away when their back was turned or even using the power of the state to get it for myself; in either instance I’ve deprived them of the work needed to produce the apple. It’s exactly how a political theory that is supposed to empower workers to own the means of production ends up in practice with the state owning the workers themselves.
@Civilis:
If the economic system of Desert Island recognizes personal ownership of apple trees, then force is needed to prevent people from stealing apples. If the economic system of Desert Island does not recognize such ownership, then force is needed to prevent people from attempting to assert ownership over apple trees. Either way, force is required to defend the social order from defectors. (In all cases, “force” really means “the underlying threat of force”.)
You can’t justify one system over the other using abstract appeals to force. You have to look at the details of the situation.
@Civilis
I am holding an orange, and you are holding an apple. We both mutually agree to exchange them. However, because of property law, I don’t own this orange, and therefore my trade is restricted by force. Due to property law, an entity is authorized to use force to prevent me from accomplishing this transaction.
It seems that property qualifies as an economic control, under the “use of force” definition.
I take it that you are arguing that resources should belong to the person who labored most to acquire them. It is true that socialism is not constructed to serve that particular theory of entitlement. However capitalism, even in its purest ancap form, doesn’t respect this entitlement either: The “homestead theory” is only concerned with who labored first, not who labored most. And then there’s the ownership of capital itself, which allow people to collect compensation not for working, but for merely owning. Rent, interest, inheritance all fall under this category. These are understood non-labor income, not just by my radical lefty standards, but by mainstream economists.
Personally, I’m not particularly motivated by these labor-centric arguments. But if that is something you care about it seems that capitalism has some gaping holes in this regard.
… I hate US political discourse. Socialism is *not a useful category* because it lumps unreconstructed marxists together with social democrats in the.. well, fabian mold..
Worse, it is a useless category which has been deliberately constructed to allow that conflation, with the goal of winning debates just like this one. But because it is a disingenuous category, it misrepresents the world.
Every country (..do not bring up city states, please. Again, fucking useless example) worth living in, without exception, is a mixed-economy system somewhere in the vicinity of the social democratic consensus. This very much includes the US which does have very significant expenditure on social welfare.
If the US right succeeded in ending that expenditure, as is the apparent goal of the Republican party as currently constituted, the US would quite rapidly stop belonging to the category of “Countries worth living in”.
Capitalism and socialism are anti-concepts.
No reason to get hypothetical. There was a time when the welfare system was much smaller in the U.S. and immigrants found it worth living in. Even today many immigrants come from large welfare states.
It would no longer be worth living in for some types of people yes. Before the welfare state, a good percentage of immigrants who couldn’t make it in America went back home. Now they stay and collect welfare.
Doesn’t pointing to Cuba rather than Sweden also count as “comparing the worst?”
Sweden often gets cited as “socialist”, but it isn’t a socialist state in the sense of having a governmental commitment to socialism. There are only a few of those left, of which Cuba’s one of the richest at a GDP/capita (PPP) of $22,000 and change. (Nominal is much lower for everything I’m about to cite.) By far the largest of its peers there is China ($18,000); but you could also compare Laos ($7,900) or Vietnam ($7,450).
The worst is probably North Korea, which besides being a pariah state has a GDP/capita (PPP) of $1,800.
When people look at Havana, it’s not only the bread lines that make they think the government failed the place…
On a side note (and sorry if this sounds a bit derailing), ending food scarcity for the poor was a pretty big deal for Socialist governments – lots of economical and intelectual resources were put on it – in a way that taking the 0.5% of the population out of public shelters never was to Capitalist governments. So the first failure is a much bigger indictment.
Your defense of capitalism is that its governments don’t give a shit about homeless people? Wow.
Wait, what? I know I don’t write very well, but I see no way one could misinterpretate my comment like this. My comment is no moral defense of capitalism or whatever. What I’m saying is that the bread lines of Havana are not an equivalent failure to the shelter dwellers of New York, not that the last are not a failure.
There are many things that matter to a well-intentioned person or government – feeding the hungry, curing diseases, expanding human knowledge – and many problems that need solving. Different governments / economical systems have different methods for dealing with them, and often have also a different priority order to determine which problems should be tackled first and/or with more resources. Communist wannabe governments were much more commited to solving the hunger and homelessness problem, for example, than were the governments of capitalist countries.
Failing to solve any of the aforementioned problems is an indictment on a government, of course (and no government can escape it, as there are so many difficult problems…); but failing at solving the one problem you set as a priority, while the other countries that didn’t set it so dealt with it at least as well – this is a much bigger indictment. Cuba claims to have tried very hard to not have bread lines; their failure is bigger than that of New York in dealing with shelter dwellers, as they commited a lot of their brainpower and economical resources in it and still failed. One failure is bigger, the other is smaller. Smaller, like in “still a failure but not as big”, not in like “no failure at all”.
By the way, your whole response is wrong:
If your capitalist government built and maintains a damn homeless shelter, you can’t claim they don’t give a shit about the homeless. Where the government really doesn’t care about tramps, they just lie and die on the street unless some compassionate Christian missionary takes them in. Clearly the capitalist government of the US does care about the problem and did in fact ameliorate it. No, you don’t need to be a Socialist to care about the poor, you have not invented the wheel.
Wow sez I. I did not expect such misunderstanding to take place here.
>ending food scarcity
Weasel language. Socialist states conclusively eliminated hunger and malnutrition. This does not require eliminating market failures entirely. They can be fixed with rationing.
You think it’s an indictment to the government when people can’t take home as much bread as they want, and perhaps it is. But shops in my town routinely sell out all their stock and I can’t eat bread at all, and I’m not blaming that on capitalism. (A bread is a product with a particularly short shelf life, I can’t expect anyone to take losses and overproduce just so that anyone can always buy it.) The part that I think is blameworthy is where the bread is available but not distributed to people because they can’t “afford” it, and capitalism’s proponents claim it’s a feature, not a bug.
I hate to say it, but… Venezuela?
Or, you know, North Korea, site of the highest proportion of deaths by famine in recent history.
Honestly, “Socialist states conclusively eliminated hunger and malnutrition” is a super-ahistorical argument.
I’m not sure how you get that socialism eliminated hunger and malnutrition. The worst famines in history happened under socialism.
I cannot find evidence of a single person starving to death in the United States in 20 years that wasn’t held against their will or lost in the wilderness.
Sure. A lot of arguments about x being good are about not-x being bad. People trying to convince that capitalism is good generally default to trying to convince that capitalism is bad, and the inverse.
If it wasn’t meant rhetorically: some chunk of those 60k are people who are simply homeless for lack of money (and capitalism probably should catch the blame for that), and another chunk is people who would be able to hold their life together if they had their antipsychotics or whatever (which could be provided by a public health system). The chunk that are homeless due to chronic substance abuse problems – the substance probably can’t be blamed on capitalism (after all, what society at any point in time/space hasn’t had those?) but the homelessness might be (the USSR had no lack of drunks; what happened to the nonfunctional ones?) So, blame some (probably large) portion of that 60k on capitalism, or the lack of a sufficient safety net – one could build a safety net on top of a market economy. Personally, I think it is morally very negative that a society so rich is either so bad at trying to help the least fortunate, or is not trying enough.
They probably insulted the ruling party at an inopportune time and were relocated to short term government provided housing and employment.
Homelessness was a crime in USSR. They locked them up.
Btw, I grew up in country what was part of USSR. Now it is a capitalist country. USSR did not have homeless people (or very-very few), now I can see plenty.
But homelessness now, at least where live, seems to be caused mostly by alcohol or drugs or mental illnesses or some combination of these three. USSR solved these problems with extreme force. Drugs were very much unknown because of totalitarian police state. Mentally ill people were locked up and treated horribly. Alcohol was tolerated, but nonfunctional ones were locked up. And homelessness itself was criminal offence in USSR and once again: lock them up.
Lock them up was common answer to most social ills in USSR.
I am not sure that homelessness or poverty are best topics when comparing capitalist or socialist societies. For me most important distinction between capitalist ( market economy) and socialist society is how much freedom individual has. USSR was able to fight several social ills, but achieved it with destroying individual freedoms.
Well, it certainly solved the issue of them being homeless…
I think a big chunk of chronically homeless people suffer from schizophrenia-like disorders that cause them to want to wander, not follow a routine, and often self-medicate with drugs and alcohol. They either are not interested in taking meds or the meds have not been effective. They are probably not going to be functional, unless we did heavy intervention through institutionalization or massively improving mental health follow up. The best thing we could do is build decent shelters with few rules that they can come and go from at will. Shelters that have a lot of rules are pointless because these people are mentally disorganized, want to wander, and sometimes use drugs. They can’t comply. Having more safe spaces available in general for people down on their luck, and hassle-free ongoing mental health counseling would be a big step in the right direction.
I’m not a fan of how often people talk about of “capitalism vs socialism” while equivocating between different definitions of those terms. I will say that the existence of homeless people is an indictment of our current system. We’re a trillion dollar economy. We can find some homes for a few million people.
If you’re talking about the US, we’re a $17 trillion economy with a few hundred thousand homeless (so an order of magnitude more wealth, but an order of magnitude fewer homeless). But given that countries with widely varying wealth and welfare state sizes all have homeless populations of various sizes (with the US not really being an outlier and maybe slightly on the low side as a portion of the population for developed countries), I’m not sure the problem is one of those solved by throwing more money at it (not that I actually have much of solution either).
First, there is a technical difference between ‘homeless’ (no current address) and ‘unsheltered’ (living on the street/outside).
Homelessness can be alleviated by making housing more affordable.
Unsheltered people are most often in their situation because they cannot function independently in order to support themselves. They have serious mental health problems, they are often using substances to self-medicate, and any proper housing given to them will be neglected and eventually destroyed unless you can provide 1:1 support or a long term in-patient facility.
You cannot take a person from the street and give them a house or apartment, because they do not have the wherewithal to keep it up, and often are not motivated to live in a way that is acceptable to other people nearby.
I work with disadvantaged populations, providing safety net services like housing etc.
Many possible answers to this, but by far the most “juicy” is that you chose New York. Why don’t they just buy or rent a home instead of sleeping in shelters? Well, because of the very socialist measure of rent-control, which makes it impossible to find places to rent, and both impossible and unprofitable to build.
The greatest wealth-sink in western societies is the multitude of well meaning regulations and NIMBY that make home construction ridiculously more expensive than strict construction costs.
Simple example. I’m Romanian and have family in France. A home here can be built for around 50k. A home near Paris (near meaning more than 10 km away) is around a mil – say from 500k to 1500k.
The 10 – 20x difference is due to location: land price, regulation and so on. This isn’t pure resource shortage – this is where my family lives, with prices over 500k, and half the terrain is cultivated. Half.
And we’re still wondering why people are sleeping in shelters, with a >10 factor price increase in home costs. The miracle is that it isn’t more.
Yeah, it’s definitely wrong to say no one had foreseen or yet knew about most of the now-common critiques of socialism. Question is, how many people actually read Mises?
One thing that really depresses me in intellectual history is when someone publishes an amazing, devastating critique of [popular idea] and popular idea maintains exactly the same level of popularity, not because someone else wrote a rebuttal at least good enough to satisfy existing supporters, but because everyone just ignored it. Not necessarily intentionally ignored it. Just, they never heard of it.
It’s like society says “we’re doing [x] now” and books that provide intellectual ammunition for [x] will get a lot of attention and books, ideas, etc. that rebut it don’t even necessarily get rebutted in turn; often as not, they just get ignored. I tend to view the reception of Piketty’s book as an example of the former, but my priors and all.
It’s a bit like media calling attention to stories that fit a preferred narrative and not to those that don’t. It doesn’t even require actively declining to cover stories that don’t fit; only preferentially looking for stories that do.
Not that it’s an easy problem to fix, of course. It’s not reasonable to expect that one read and consider all existing critiques of [x] before professing belief in [x]ism. It does seem like a better future intellectual climate would do a better job of putting [x]ists and anti-[x]ists into direct dialogue one another (adversarial collaborations?), so there is more justifying of [x] or anti-[x] before the groups talk past one another and ride an inevitable wave to a more [x]ist or anti-[x]ist future.
Scott’s statement was
Which is a ridiculous statement. The economic underpinnings of communism were being dismantled by the generation prior to Mises, and the presentation of the view being remotely consensus, or to imply limited culpability for those pursuing these ends because no one could possibly foresee such events is a bad approach.
Yeah I think it was more like “communists writing for the New York Times in the 20s and 30s expected communist countries to have stronger economies.”
There were ‘legitimate’ big name economists who agreed with and promoted the view, the issue is the ‘who could have known’ defense and the answer is ‘these specific guys who predicted and explained why. Its not like these were crackpots proclaiming doom who had nothing else to say, they are eventual Nobel winners and respected economists.
It bothers me a lot (because I enjoy economic theory, and also because I am alive) that the guy(s) who got the single most important call of the 20th century the most right. The fact that Paul Samuelson got it wrong doesn’t mean we should ignore the rest of his writings, but the fact that Hayek got it right means we should start with his work as a foundation.
Samuelson’s economic text, which was the leading one at the time, kept claiming, at least until 1980, that the USSR was growing faster than the U.S. and predicting a date (later in each edition) at which it would catch up long past the 1950’s. McConnell’s text did the same.
https://marginalrevolution.com/marginalrevolution/2010/01/soviet-growth-american-textbooks.html
Samuelson’s economic text, which was the leading one at the time, kept claiming, at least until 1980, that the USSR was growing faster than the U.S. and predicting a date (later in each edition) at which it would catch up. McConnell’s text did the same.
https://marginalrevolution.com/marginalrevolution/2010/01/soviet-growth-american-textbooks.html
To be fair, it was the Samuelsonian view and, to the extent there was a consensus on economics in the 1950’s, Samuelson was it.
The issue is that there wasn’t a consensus, and representing it as if there was one is giving a pass to those that were wildly wrong. Hayek, who eventually wins a nobel prize in econ for his other work, was writing about the calculation issue during the 30s and wrote the Road to Serfdom during WW2.
Hayek won his Nobel prize in the 70’s, we’re talking about the 50’s. To the extent there was a consensus, Samuelson was it. Hayek wasn’t exactly nobody in the 1950’s (managed to be something of a name in Germany, actually), but he wasn’t exactly somebody, either.
On the meta level I agree. On the object level, I think this applies Ayn Rand and other populist AnCap.
Ayn Rand was neither an ancap nor a populist — she favored a (small) central government, which rules out any form of anarchism, and she was really, really not concerned with popular sentiment.
(She would have objected strenuously to being called a libertarian too, but by most other people’s lights she’d meed the criteria.)
Populist in the sense of writing for a large audience, well known, etc.
Then the word you’re looking for is “popular”, not “populist”.
The book in question was published in 1916 and is about the prior 30 years, so, no, Mises does not count. Nor does observing the Soviet Union.
Eugen Bohm von Bawerk laid the groundwork for Mises a few decades before this book was published.
Maybe, but in my limited knowledge of him, he seems to me to be arguing against very narrow points of Marxism and not against socialism generally.
Back in Bohm-Bawerk’s day he was arguing against central planning, which essentially WAS the dominant socialist view. People have little appreciation for how out of fashion, not just capitalism, but decentralized orders of all kinds were in the late 19th and early 20th centuries. Everything was rational, scientific, Taylorized to the max. Anything less was lesser. Socialism was the wave of the future because it was about central planning of the economy, so obviously superior as it was the messiness of decentralized competition and markets.
Other takes on socialism that didn’t admit of the superiority of planning were vanishingly small in their support. It took the 20th century and the total collapse of central planning to get that one out of people’s heads. There’s a reason even many of the hardcore socialists of the modern generation really just want a generous welfare state and not nationalization of all of the means of production.
Sure, central planning. That’s exactly what I don’t see him engaging with. Maybe he defined a market rate of interest, but did he argue that it was good to let the economy follow it?
Menger, Jevons, and Walras wrote already in 1860-s and 1870-s. Though they did not attack Marx directly, probably they were not even aware of Marx work but their critique of some basic principles of classical economics (labor theory of value, utility, the origin of prices, nature of profit) refuted indirectly some core foundations of Marxism.
The second generation of marginalists, Böhm-Bawerk, Wicksteed etc. took ideas of Menger and went directly after Marx. In economics, they gained traction almost immediately. Marshall´s “Principles of Economics” published in 1890 borrowed quite heavily from marginalists.
In economics, Marxist ideas seemed outdated already in 1890. But probably it was not seen as the attack against socialism generally.
Annie Besant and Muhammad Ali Jinnah? The story of those two together would say a lot about the ideological milieu of the time. Find out how socialism, Islam, Theosophy and old timey British barristers fit together!
I think they were a few decades apart.
No, they were together in the All-India Home Rule movement (Besant was co-leader with Bal Tilak when Jinnah joined. Tilak is otherwise known for writing a book about how the Aryans lived in the Arctic circle when the Vedas were written.) and the early Indian National Congress. Not sure if she died before or after he split off the Muslim League.
Hume discusses the possibility of egalitarian distribution of property in his Enquiry Concerning the Principles of Morals (in the chapter on justice), a century before Marx. His argument that it can’t work is brief, but the danger of tyranny is one of his big concerns. That’s 18th century, of course, though it is true that Hume was not so well regarded in the 19th century, and into the beginning of the 20th century, as he is now.
Not for lack of trying on the part of modern leftists, though. That was part of the big draw of Piketty for those folks, that it supposedly showed that yes, the modern rich either are all wannabe aristocrats living off of rent or soon will be (even if Piketty himself had to go into the whole “super-managers of capital” thing to try and explain why the modern rich seemed rather pro-active and income-earning).
It kills me that they don’t really understand Musk and some of the other rich folks doing stuff on space, so they end up resorting to bad caricatures about privatization. Do they honestly not realize that Musk and the others would probably be thrilled if the US government (and other governments) decided to drastically up funding for space exploration and colonization, including on Mars?
The problem with Elon Musk isn’t Elon Musk. Same with Bill & the Gates Foundation.
The problem is that you cannot have the ultra-rich do-gooder without also having the Koch Brothers and other ultra-rich buying off the state in order to enrich themselves. And the shitty situation with your healthcare and political parties is occurring even with your current attempts at taxes on capgains & high income.
Besos is putting a billion into his space program yearly whilst paying zero tax. I’m sure he’d be thrilled if the US Gov funded nasa better, but he seems unwilling to pay tax to fund it.
There’s no party in any developed country with a decent healthcare platform that tries to make healthcare that actually focuses on healing people instead of signaling caring.
What an absurd claim. I’m not even really sure how to address this well, because I’m pretty sure that all the evidence of actual care being given will just be dismissed as actually being about signalling.
What I can say is that in my country (The Netherlands), a very common type of conflict between insurers and patients is where groups of patients demand that a certain treatment of medicine is reimbursed, but where the insurer argues that the evidence for efficacy is insufficient. To me, such conflicts suggest the opposite of what you argue, as some patients demand the appearance of effective healthcare, while the ‘healthcare platform’ seeks to use the available money to provide healthcare that works, rather than what feels good to patients.
I have no idea what that means either. I live in Canada. Our health care system is, by and large, pretty good, so far as I can tell (IANAD). When I visit my doctor, she gives me what seems to be sensible advice for myself or my children. I don’t have to pay for much of it. The people I know who are seriously ill also don’t pay for much of their care. That seems… right? There are certainly particular issues where things don’t work, or where someone somehow falls through the cracks, but they seem to be very rare, and vastly rarer than in the States.
Do you have a good source for this? I’m trying to find out how much he paid in tax and I don’t think it’s public (or it’s being drowned out by noise about how much Amazon, the company, paid or didn’t pay).
Last year his salary was around $81,000. This would imply at least some taxes paid (unless he made enough donations mostly funded by cash he made in prior years, but that’s not a sustainable method of tax avoidance).
The Koch Brothers are do-gooders who want the rest of us to live in free societies.
Their donations of hundreds of millions of dollars for hospitals are secret schemes to enrich themselves, no doubt
Bill Gates might be happy if the tax rate for his economic peers increased — that’s a huge amount of money going to (presumably) better causes than they would have gone to. But much of the marginal dollar that Bill Gates gives up in taxes is a dollar not spent on the B&M Foundation, which would wholly justify him not just giving money to the government.
I think most people believe that they can spend their money more effectively than the government on things they care about (though the extent to which their desires are altruistic obviously differ).
It’s fascinating to hear that the Fabian society started out with a ghost hunt.
One of the best books I ever read was a long and exhaustive dive into the uncanny, yet absolutely ubiquitous connection between socialism and spiritualism in the nineteenth century (Philippe Murray, Le 19è siècle à travers les âges, 1984).
Muray mostly focused on French writers and novellists, especially those who dabbled into left politics, and show how many of them actively participated, if not led movements centered on spiritualism and all kind of related pseudo-science. Just like only a few chosen few could get to talk with the dead, Muray explains, they were the elite who figured out how to bring a better future to the people. A lot of these spiritualist movements were also about denying individualism to find a better connection with a shared humanity, a tenet that could easily find a political echo in the nascent leftist thought and action – especially of the Utopian, millenarist kind.
To this, Muray opposes the good sense of the Catholic Church at the same time, who refused – for better or worse – to give in to the latest modern trends (the Syllabus notably condemns in the same breath socialism and “secret societies”), and the prescience of some smart writers (Baudelaire) who saw straight how this alliance between spiritualism and socialism was problematic.
I understand that Muray’s analysis has been debunked to some extent since, and he himself has become controversial as a figure beloved by the modern right in France as he penned a series of hilarious reactionary pamphlets and diaries before dying (the latter phenomenon might explain why some thought fit to try to prove him wrong, though).
Yet, I keep seeing elements that confirm his uncontroversial observation that the two movements were inextricably linked at the outset. In this respect, the story of Annie Besant is a case in point: even a cursory reading of Wikipedia page shows how her politics seem to have been merged and developped alongside her belief in all kinds of spiritual fads (she proclaimed that her adopted son was the Messiah and the Buddha). (Btw, might be worth pointing out that the Indian National Congress is a political party, and not a “Congress” as in a Parliament.)
I think there’s a much simpler explanation: socialism, as conceived at the time, is applying science to society, spiritualism is about applying science to religion.
Alternative hypothesis: spiritualism was big among the intellectuals of the left because spiritualism was big among everyone at the time. Which would mean spiritualism isn’t connected with socialism in particular, just with the fin de siecle.
Of course, that being said my perception is that A) New Age beliefs are intellectual heirs of spiritualism and B) New Age believers are disproportionately leftist. So maybe there’s a connection, just have to bring up the lack of a control group.
True ! That was one of the main critic made against Muray’s thesis, who never really answered it. Some pointed out that right-wing writers (Balzac, for instance), were also deep into this kind of mysticism.
But I think his argument was also that mysticism and socialism were a sort of a gateway one to another, and that many leftist movements, who still exist today, were founded with this kind of background. I don’t think you can say as much with respect to right-wing movements and ideas.
“But I think his argument was also that mysticism and socialism were a sort of a gateway one to another, and that many leftist movements, who still exist today, were founded with this kind of background. I don’t think you can say as much with respect to right-wing movements and ideas.”
I wouldn’t be too sure. In the Anglo world it’s hard to think of examples, but on the continent there was a pretty clear link between wandervogel mysticism and the various Fascist movements; if the mysticism of Evola, Schwaller de Lubicz, Eliade, Guido von List and many others wasn’t a direct gateway to their politics I’d be damn surprised.
(Though a more interesting question to me is, why did Anglo mystics tend towards left-wing universalism, and Continental mystics tend towards right-wing blood and soil particularism? This was hardly a universal – Aleister Crowley was a man of the right, and Alphonse Louis Constant a socialist. But as a tendency, it remains the case.)
Wasn’t spiritualism popular in general in the late 19th century, early 20th century? I’m sure we could find right-wing spiritualists, and there’s very tight links between far-right politics and occultism of various sorts. Sure, Annie Besant was into all sorts of occultism. So was Savitri Devi.
I notice that I am confused. Socialism and neoliberalism are systems of government: they make statements about what policies governments should pursue. Effective Altruism is not, so far as I can tell, a system of government — it’s more of a personal philosophy, yes?
Does it make sense that EA is researching political strategies? Does EA even have a political platform?
I think it’s more that everybody has an interest in how to grow a movement and spread their ideas.
Well, governments themselves provide support to various charities: use of EA principles could make that support go further and do more good.
But I would say that political activism in general is very uneffective altruism. Democratic governments are hard to influence because everyone is trying to influence them, and it is easy for your voice to be drowned out. That’s leaving aside the inherently toxic nature of US politics where if EA allowed itself to be associated with the Democrats, then the Republicans would probably try to pass anti-EA laws or withhold funding from EA-favored causes or something. Politics is appealing, like the lottery or gambling, but the appeal doesn’t correspond to how valuable and useful it actually is.
Huh. This is definitely interesting and surprising.
I’ve said here before that I tend to think of political space not as a square as it’s often depicted but rather as a triangle, with the three poles being what I’ve labeled “liberalism”, “leftism”, and “traditionalism” (although I’m using those terms a little idiosyncratically, but they’re good enough to get the idea across for now). And christhenottopher backed this up saying “What you’re describing here matches very closely with the standard historiography of European revolutions in the late 18th to early 20th centuries.”
On the other hand, my own observation is that the further back you go, the less distinct from one another liberalism and leftism are. The hypothesis I’d had for this was that basically, the further back you go, the more traditionalism is dominant, the less distinct these two eventually-distinct oppositions to it are.
This kind of looks like an example of that. Sure, the Fabian society is pushing socialism, but — at least if we trust the description here — they’re surprisingly liberal, aren’t they? And I don’t mean that in the sense that their socialism is less extreme; I’m talking here about the meta-level. They believed in intellectual freedom and held debates, rather than trying to shout down or tar as evil anyone who disagreed with them. They didn’t engage in witch-hunts or purges or purity tests and were willing to remain neutral on various matters rather than regarding neutrality as opposition. And so forth.
(…meanwhile, the neoliberal school, going by the linked article, while pushing policies that were object-level liberal, were very willing to engage in overt propaganda — and fell into exactly the failure modes you’d expect based on that. Oy…)
I don’t know what to make of this. It’s a little weird to see leftist politics divorced from that seemingly-characteristic leftist style of thought. I’d say that it’s like I said above and leftism and liberalism still weren’t very distinct back then — except there do seem to have been liberals for them to have been opposed to. OTOH maybe the Fabian society was just exceptional; apparently it was in the minority among socialist groups, going by the points above. And while they may have been kind of meta-level-liberal, it doesn’t sound like it was to the point that they were like “while nominally we’re an organization for <adherents of this particularl political philosophy> we do have to keep an open mind about the possibility that <this political philosophy> itself is wrong”.
(Meanwhile, ignoring the Fabian society for a moment, we still have the disagreement that it looks to me like liberalism and leftism aren’t that distinct if you go far back enough with christhenottopher’s note that no actually they are distinct back then. Maybe they just weren’t that distinct among the intelligentsia yet but were distinct elsewhere? christhenottopher, can you resolve this?)
The distinction between liberalism and leftism doesn’t really stand out until they get some wins. For the most part you can see this happening during the late 18th century and beyond, but there are occasional examples arising before then. For instance the English Civil War of the 17th century had initially Cavaliers (pro-royalist traditionalists) and Roundheads (pro-parliament traditionalists with occasional liberal sympathies). As the Roundheads started actually winning, some splits developed within them, first with The Levellers (pretty solid classical liberals overall) and The Diggers (anti-property religious fanatics…pretty much anyone for abolishing property was a religious fanatic back then). When Parliament actually won though, all the more radical parts of the opposition got crushed so the big liberal-leftist fight didn’t get a chance to happen.
So what about these Fabians? Personally I love ambiguity like this because it’s a reminder your categories of political groups are more about convenience than hard and fast laws of history. The Fabians use terms like socialism and their goals are associated heavily with the left vertex of the liberal-left-trad triangle (though as Scott points out all of their goals except the train nationalization bit is agreed on by all sides with actual power now), but their tactics and rhetoric seem positively liberal. What gives?
I think the answer probably lies in how political change happens in the UK (and nowadays in most of Western Europe). Namely, gradualism. This was the successful tactic of UK liberals over the course of the two centuries prior to this that changed Britain from a flirting-with-absolutism-traditional-society to a highly liberal one. It’s worth remembering that in other countries (France, Germany, Italy, hell even the US), liberalism itself wasn’t super liberal in tactics at first, trying violent revolutions all across the Western World. Only in the UK did it manage a lucky break with the pretty much bloodless Glorious Revolution (aka that time a Dutch stadtholder brought Freedom to England through an invasion and actually did get hailed as a liberator) that set the stage for gradual liberal change. Gradualist tactics get associated with liberalism through that, but I think the Fabians show that gradualism is not so much about the political ideology, but the country that ideology finds itself in. Modern leftist parties across the developed world use gradualist tactics these days because that’s what democratic political systems encourage. Not that there aren’t the guys who want to throw bombs and burn the system down, but they run into the problem that their plan is inherently riskier and the gradualist plan actually seems to work.
So what about the lack of witch hunts and open intellectual climate? Well my first thought is that if you’re not actually planning a revolution, purity tests are a lot less important. Purity tests are a way to make sure the person you’re interrogating has actually understood the correct way of thinking, not just a series of slogans. And the logic goes, since this way of thinking is correct, if they have absorbed it they can’t be plants or traitors. In the same way a good person can’t possibly apostatize from the One True Religion, so having done so proves one’s moral failings. If you’re not running an attempt to overthrow the government, you don’t need to be so demanding. And it’s worth noting that purity tests were used by more liberal revolutionaries in the past (as an American example, John Adams got plenty of crap for defending the British soldiers in the Boston Massacre).
As a corollary to this, I’d also note there doesn’t seem to be any hint of attempted infiltrations of the society by hostile groups (such as government agents). How much of the back-biting and internal fighting within radical organizations is caused by opponents getting accepted in and causing disagreements? Given the clandestine nature of such operations the answer is probably not “none” even if the evidence is light for it.
Also, the Fabians didn’t seem to perceive there was a real intellectual opposition at all to them. So why worry about purity? There’s no real united front to have when there is no real opposition. I don’t think things like litmus tests or internal fighting are inherent to a particular end of the spectrum. Or perhaps more specifically are inherent to an end of the spectrum in all circumstances. I’m reminded of the biology vs nature debate. The real answer is gene-environment interactions to that. A gene variant that causes a plant to grow 8 cm high in an environment with lots of rain could cause the plant to grow 2 cm in an environment with little rain. A different variant might switch those, meaning height is the function of the interaction of genes and environment. How movements behave is similarly a function of both their own internal memes, and the interaction of those memes with the broader external context. Put the Fabians in a modern world with a developed conservative/libertarian intellectual movement, and maybe they start twitter mobs. Or maybe they end up like Freddie deBoer.
Right this is confusing because it seems to me like they remain hard to distinguish for a fair bit longer than that.
As for the rest — I mean, the thing is, I guess, that there really do seem to be these characteristic styles of thought, these different meta-level positions, you know? Well — traditionalism doesn’t really seem like one style of thought so much as a symbiosis of several, but that’s another matter.
Like, OK, revolution vs gradualism I think it is correct to ignore. But on these other things, this issue of tribalism vs. correctness — like, my point isn’t that liberals or liberal groups don’t fall into tribalism. Hahaha no. The counterexamples there are beyond measure. My point is that they don’t endorse this, that they consider this a bad thing. If you tell a liberal they’re being tribal — well, hopefully they’ll seriously consider the possibility, but let’s say they’re too far gone for that to occur — they’ll deny it. By contrast, leftists seem to consider it a good thing. They won’t deny being tribal or propagandistic, they’ll say, yes, of course, because that’s how you build power, duh. I mean to my mind this is basically playing Boromir — building power is actively counterproductive if you fail to preserve your or your organization’s goals, or your ability to judge how to achieve them, while doing so! — but evidently they disagree. (Whereas the idea may be that “purity tests are a way to make sure the person you’re interrogating has actually understood the correct way of thinking, not just a series of slogans”, it seems to me that eventually purity tests result in nothing but slogans…)
Basically to my mind all these eventual manifestations of tribalism — purity tests and whatever — aren’t the distinction, because those occur everywhere, but rather, firstly, one’s attitude towards them — are they dangers that one must take measures against, or just useful tools like any others? — and, B., what measures one takes to arrest their advance — basically, do you try to take the usual liberal safeguards against this, or do you say, “Pah, we don’t need those!” and deliberately operate without them. (And the safeguards do work to some extent. Liberal groups go tribal eventually, but it does seem like they fare better against it than others.) And it doesn’t seem like the Fabian society fell on the latter side of these divides.
(Hm, I should post a separate top-level comment about some of this)
IDK. That is hardly the only such meta-level difference I would associate with this distinction, but that’s one big one, certainly. (Orthogonality — aka decoupling, unbundling, separation of concerns, relevance, the belief that the genetic fallacy is in fact a fallacy, hugging the query — is another. Really IMO orthogonality is seriously underemphasized as a liberal principle.) But yeah IDK a lot of this may just be recent and this may be a lot less fundamental than I thought. E.g. I’d associate leftism with a certain sort of anthopocentric / mind-centric thought but that probably doesn’t go back more than a few decades is my guess. Um yeah I don’t really know where I’m going with this…
Are leftism and liberalism all that distinct even today? It seems to me that the distinction only becomes apparent when you compare leftisms across regions. Even the ostensibly socialist Anglosphere radicals broadly aligned with Jacobin, Current Affairs, Chapo Trap House, etc. have deeply imbibed liberal commitments and attitudes that would be utterly foreign, if not repugnant, to their counterparts abroad. There is nothing in the history of twentieth-century state socialism to suggest that, say, LGBT liberation, open borders, opposition to capital punishment, opposition to military conscription, prison abolition, drug legalization, etc. are fundamentally left-wing concerns (quite the opposite), but many leftists in the first world would insist that they are. To first-world leftists, the rights and freedoms granted by liberalism are sacred and beyond negotiation, whereas socialists abroad have always understood that socially liberal desiderata were to be subordinate to the interests of state and society, which is why the Bolshevik discourse on sexual liberation sounds so strangely conservative to our ears. Indeed, the willingness of socialist states to impose paternalistic measures that would, in a Western context, be considered socially conservative may be the most underexamined aspect of the Marxist states and the stark contrast with the causes leftists promote in the first world is seldom ever mentioned. A few examples: even the Soviet law that legalized abortion (revoked by Stalin in the interests of promoting population growth) described abortion as “a grave evil” that unfortunately had to be temporarily tolerated until the means existed to eradicate it completely, and its relegalization was accompanied by a propaganda campaign telling women that “Abortion will you deprive you of happiness!” East Germany’s immigration policies were literally based on Nazi legislation and its authorities were obsessed with preventing marriages between citizens and foreigners, and foreign women who became pregnant in the GDR were either forced to have an abortion or be deported. Soviet officials boasted of how their repression of homosexuality and absence of sexual promiscuity wisely served to protect the Soviet Union from the ongoing AIDS epidemic. More recently, the Russian law that criminalized propaganda inimical to the traditional family was authored by two members of the Communist Party of the Russian Federation, which voted for it unanimously.
Bolshevism and Maoism are obviously and exotically illiberal in a way that Western leftisms obviously aren’t, which suggests that what we know as democratic socialism is really just another branch of the liberal family tree.
See, to me this contrast just indicates that such things are not fundamental to leftism; it can accommodate both, neither is incompatible with it. Sure, leftism in liberal places has picked up liberal characteristics — here in the US, even fricking traditionalist authoritarianism has picked up liberal characteristics — but it still seems to remain pretty distinct. Remember, the thing is that different political philosophies care about different things; if a particular question isn’t something that that group fundamentally cares about, then yeah you’ll see variants endorsing different answers. To a liberal like me this may seem a fundamental distinction but to them it isn’t.
I’d say a short look at WW1 would say that socialists Left of the Second International definitely would be more or less the only people fundamentally on board with these things, and that an excess of flexibility on these topics by Liberals and the Second International is what caused the combination of rising mass-movement and purity spiral that got us into All This Mess.
I suspect that if you try to match what you call “that seemingly-characteristic leftist style of thought” to the revolutionary workers’ organisations of the time rather than to the Fabian society, you might find a better match. Socialist thought was not then and is not now a monolithic entity!
Charles Bradlaugh, incidentally, was a founder of the National Secular Society (which still exists) and I believe the last person imprisoned in the cell under the clock tower of the Houses of Parliament. He was first elected in 1880, and Parliament voted to refuse to seat him essentially because he was an atheist- they would not allow him to take the oath of office as he considered it meaningless, but also would not let him affirm even though Quaker MPs had been allowed to do so.
He was finally able to take his seat in 1886, after resigning and being re-elected four times.
Interesting, but pondering this sentence:
> surely aspiring intellectual movements should study the neoliberals and the Fabians
Scott, what is your intellectual movement? The Fabians didn’t start with a detailed party programme, but they had some idea of what they wanted: socialism. I see your politics as an unclear mix of libertarian and reactionary. Unimpeded individualism while pining for tightly controlled medieval village life. Then some social progressiveness sprinkled unevenly on top. It’s always a great read, but where is it heading?
Is it not about politics at all? Is it all about AI alignment, as for Eliezer? Nobody in the Rationality community talks about that any more.
Scott wrote the anti-reactionary FAQ, a kind of famous rebuttal to Moldbug. So calling partly reactionary seems off. And yet why does it feel right? Because his infamous takedowns of certain progressive talking points and attitudes has put him in social media company with unabashed conservatives.
Any critic of the left who gains even a modicum of attention will be lumped in with the ultimate left critic – the Alt Right – through rhetorical chains if association. Just look at Kanye, who has already been linked to Jordan Peterson (who is in turn linked to Spencer.) See the new Bloggingheads with Aryah-Cohen Wade.
Sure, there is the anti-reactionary FAQ, but the’s also an anti-libertarian FAQ and Scott is pretty libertarian. The anti-reactionary FAQ mostly rebuts the neo-reactionaries and their most extreme ideas, like monarchism. It doesn’t really cover reactionary/traditionalist politics more generally.
There is definitely a political thought-sphere that include those people and groups, just like there is a sphere that includes communists, socialists and social democrats, and an other one with libertarians, neo-liberals and classical liberals. If Alt-Right and Reactionaries are both slurs, I don’t know what to call it.
I think there’s two layers here: “life to which you are most suited” and “life which you consider to maximize the good.” Sentiment and Consideration.
I suspect that Scott is a pining traditionalist by sentiment and a libertarian-trending pragmatist liberal by consideration. (No, not everybody is a “pragmatist.” Consider the hairdryer story. The pragmatism-idealism axis indicates to what degree you embrace local exceptions to your rules whose outcome serves your goals. Metis vs. legibility is an example of a pragmatism-idealism axis. Scott has often (hairdryer, transgender, mutually beneficial trades) come down on the pragmatist side, though the limits of his pragmatism are inscribed by his distrust for social enforcement mechanisms.)
What is the hairdryer story? Sounds interesting.
See section V here.
Uh, what? Let me recap the hairdryer story: there is a patient with OCD who is always worried she has left her hairdryer on; there is a doctor who tells the patient to always keep the hairdryer with her so she can stop worrying; and there are colleagues of that doctor who get enraged when he tells them what he did. Certainly one possible interpretation is that the one doctor is a pragmatist who found a quick way to get rid of his patient, while the colleagues are idealists who think she needed more thorough treatment. However, there is a far more cynical but equally valid interpretation that the one doctor is the idealist who believes that psychiatrists should, you know, actually help their patients, while the colleagues are the pragmatists who are jaded enough to understand that if they suddenly start giving practical advice that any moron could come up with, then very soon most of them will lose their freaking jobs. Now Scott is clearly on the side of the one doctor, but also just about as clearly considers that one doctor to be the idealist (ie. doing what he is really supposed to be doing), so I really don’t see how that supports the “Scott is a pragmatist” claim.
Sounds to me like the “pragmatism” in the hair dryer epsiode is more extreme than centrist. Unless I am missing something, wouldnt the pragmatist combine methods to eventually wean her off hair dryer dependence? In other words, start off by having her keep the hair dryer with her, but in very controlled and limited scenarios, remove the dryer from her presence, and use CBT or the like to hopefully re-focus her thought patterns away from the dryer’s potential intrusions. Circling back to the OP, one could in effect say that the pragmatism of the Fabians was in being able to combine the idealism of Dinner Parties, Book-writing, high society circulating, with procedurally attempting to influence policy and the popular opinion via pamphlets and other works. Compare that with the reactionary effects of the Governmental/Royal powers at the time, and the radicalism of the Bolshevik-like movements (including Fascists), who were at opposition to each other , but in a way that was bound to end in blood and death, ie, perverted Idealism and Reaction.
Where does Scott pine for tightly controlled medieval village life??
Typical cult leader. He talks a good game, but once you join, it’s all churning butter in the Rationalist kibbutz 😉
(Serious answer: he wrote some stuff about social atomization?)
I don’t see how being worried/upset about social atomization means that one wants tightly controlled medieval village life. Many people seem to want to keep the freedoms of modernity, but also want a fix for social atomization.
Whether this is possible is of course the question, perhaps they are incompatible, perhaps there is a way to combine them.
Even if they are incompatible, it seems perfectly possible to have a halfway position, where you have limited advantages & disadvantages of both.
He has written about social atomization. But I poked through his old posts which mention it and I don’t get the impression Scott thinks it’s even a serious problem which needs solving, much less by tightly controlled medieval village life. Back in 2015 we have this not-really-an-endorsement:
In 2016 we get an admission that tribes aren’t all bad, featuring this passage:
And I can’t find anything more than scattered mentions of atomization in 2017 or 2018. This is the fullest, and one could take the following passage as an endorsement for being less atomized:
But as Aapje points out, there’s a lot of middle ground.
@Aapje, @Nick: I totally agree. I don’t think Scott is in favor of “tightly controlled village life” (and in fact, imagining Scott in that scenario made me laugh out loud). I was just pointing out how @tmk could get that impression.
I think it makes sense to wish for a little bit less social atomization (which seems to be Scott’s tentative position). In fact, I vaguely remember some hand-wringing about this issue around the turn of the century when the internet was becoming a big deal… back before everything was about social justice 24/7. What are you going to do when your friendly neighborhood grocery store is replaced by a self-driving truck run by an algorithm on The Internet that delivers packages to your automated mailbox? etc. etc. I guess that future basically happened, and we’re still here, so… yay?
I would call the movement rationalism. Politically I would guess that Scott agrees with most of the agenda of the Swedish Network for Evidence-Based Policy that Stephan Schubert organized.
Let me try to write 8 political demands that I think we can agree on as a movement just like the Fabians had their 8 points:
1. We want public policy that’s backed up by empiric evidence. We want a government that runs controlled trials to find out what policies work.
2. We want that government bureaucrats who make predictions about the future makes them in a way where the accuracy of their predictions gets measured.
3. We want a policy that funds AI safety research and that’s a bit cautious about AI.
4. We want government money to go into anti-aging research of the kind that SENS does.
5. We want less bureaucracy around running scientific studies so nightmares don’t have to happen
6. We want the right not to have to endure what amounts to torture at end of our lives
7. We want to end the War on Drugs
8. We want that the FDA switching from using p-values to using better statistical models
The debates are going to wind up being over the modal properties of these. Ie method over aim. And whether the collective set is internally coherent.
Obligatory point of order: the name of the movement is “Rationality”, or “LessWrong-style Rationality.” Rationalism is already taken for a philosophical movement opposed to empiricism, which is very not our thing.
That said, I’m on board. Where do I sign?
@Christian Kleineidam
Note that this is easily gameable. When Scott scores his predictions, he is his weakest, interpreting ambiguous outcomes in a way that suits him, but (IMO) lacking consistency or objectivity. There is nothing at stake here either, aside from his reputation.
Try to implement this in politics and judge people by their predictions & it will go to hell.
Thanks Aapje. I was vaguely uncomfortable with #2 when I read it. You helped clarify my discomfort a bit.
I was referring to rationalists, EAs, and AI safety people.
Thanks, I think I was a bit uncharitable to you before. Since the examples to learn from were neoliberalism and the Fabians, I assumed it must be about politics. After reading the neoliberalism article, I see this makes a lot of sense for EA. That is currently a fridge movement, that cold becomes the dominant way of thinking if they do things right.
Where I still object is saying rationalists are a movement. There are no goals or principles at all. Currently it is mostly a distributed social club for people of certain personality types. Which is fine, but unlikely to take over the world unless we can first convert everyone into computer programmers.
I’d say that you are mistaking a love for reactionary traditionalism for a Communtarian and Localist urge. And Libertarian Communitarianism has a long history on the Left starting with the Mutualists through the individualist rural collectives and arguably finding a current form in Syrian Kurdistan.
Right-Libertarians would probably point out Dark-Age Iceland and how community bonds and religion stopped their lovely free economy from collapsing from too many blood feuds.
Ian M Banks described The Culture in his novels as “Socialism at the local level, (Left)Anarchism at the top level”. I’d describe Scott as “Socialist at the local level, Classical Liberal at the Top Level.”
I wonder if the leftist antipathy towards Elon Musk has come about for pure toxoplasma reasons.
Scott discusses in The Toxoplasma of Rage how Michel Brown became a cause to rally around:
Equally, I would guess that Elon Musk gets leftist thinkpieces attacking him for the same reason. I mean, in the gigantic pile of billionaires you couldn’t find one of them who isn’t a workaholic genius striving to make the world a better place?
No-one is going to care if Jacobin magazine lays into, say, the Koch brothers. A leftist magazine attacking conservative oil billionaires is about as interesting as “dog bites man”. All of their potential readers agree the Koch brothers are terrible, but there’s not much else to do other than shrug and move on. But saying Elon Musk is terrible really gets the toxoplasma flowing.
And looking at it from the other direction, you disproportionately notice leftist criticism of Musk because of toxoplasma reasons. If a leftist writes about the CEO of ExxonMobil nobody cares. But if it’s about Must it gets linked everywhere with “Look, a leftist is attacking our great hero Musk!”
Yeah. The characteristic feature of a toxoplasma meme is that both sides of the argument feel strong incentives to argue about it, and get angry about it.
Almost any “let’s go hack at somebody’s hero!” meme has the potential to become this, as long as there’s a motive for the hacking group to start doing so. In Musk’s case, the incentive is a combination of “rumors of bad worker treatment” and “dear God he’s so rich he literally has his own space program.”
I mean seriously, let’s not kid ourselves, forty or fifty years ago, “so rich the guy has his own space program” would have been a joke. Now it’s not. That’s enough to get some people going O_o on a reflex level, in a way that Bill Gates doesn’t because, well, he doesn’t literally have a space program.
… And that’s how the toxoplasma can get to them.
As someone who is a bog-standard scandinavian social democrat, and reads far to much on the internet, I have never come across an anti-musk screed based on economics. I am sure they exist, because, well, the internet, but the left mostly does care a whole lot more about the Kochs brothers and other billionaires who are funding the right wing project, because they are the Enemy.
The theory that the anglosphere political right (the people actually in political office) are just puppets of plutocratic aristocrats who are engaging in an overt project to impose oligarchy is getting a good and through workout
I would even call that “conspiracy theory” accurate. I mean, I can think of no plausible economic rationale for the right prioritizing getting rid of inheritance taxes over trying for flat taxes on income, for example.
Except that they want an inherited aristocracy. That this is their goal.
The only “attack” on Musk I ever recall reading could be summed up as “He is going to get a bunch of wanna-be martian settlers killed eventually”.. Which is a pretty likely prediction.
Isn’t an equally plausible explanation that they love their children and dislike it when they get taxed/punished* for helping them?
* Many conflate these
True, if by ‘equally possible’ you mean ‘an equivalent description of the same thing’.
Dukes and Earls only wanted the best for their children too.
These are only the same if people are capable of and willing to recognize that many people doing the same thing has that societal-level outcome.
However, since people have a high capacity for hypocrisy and self-deception, I think that this is uncharitable.
The difference matters, because if people have conflicting desires that they resolve by self-deception, one can call them out on their hypocrisy, come up with win-win solutions or such.
Sure, but the nobility was presumably less interested in preserving nobility as an institution, than having the benefits of the system.
In modern society, we have demonstrated pretty well that nobility is not necessary to have most of those benefits & my impression is that very few descendants of the nobility pine for it’s return.
But they are not equivalent descriptions, as one helping their children doesn’t always lead to aristocracy. I doubt anyone would say that a tradesman training his son or an activist advocating money transfer for his disabled kid is trying to create an aristocracy, though they are all doing the best for their children.
Also relevant to the quote in discussion, “aristocracy” is about much more than wealth. You can even have one while taxing inheritance (which was often done in one way or another when aristocrats were a staple in society).
No, Aapje’s on to something here. That aristocrats also wanted to help their children is beside the point; what matters is that the man in the street wants to help his own children, and will keep sympathizing with the plutocrats on this one issue so long as the pitch for inheritance taxes keeps being made in ways that affront his moral beliefs on the subject. The way to get an inheritance tax is to stop talking as if depriving the offspring of the money were an end in itself, and to justify it like any other tax.
I don’t think aristocrats were primarily concerned with helping their children, in the sense of “that child I have right there,” in my admittedly far outside understanding of the viewpoint, it was more about helping all the family line in general, for generations to come, even at the expense of the desires of any particular family member. Like the distinction between patriotism and neighborliness.
So I don’t agree that “aristocratic urges” and “love their child” are equivalent.
@Aapje,
I think you underestimate the extent to which the nobility Was interested in preserving nobility as an institution.
The comparison to nobility was weak. I think Paul Zrimsek’s argument is strongest.
It’s hard to describe principles that almost everyone subscribes to, as being derived from a desire to advantage one group in society.
Of course, one can argue that the lack of counter-balancing principles is what sets the rich right-wing apart, but even that doesn’t seem to be the case, as many fairly poor people and many on the left share a dislike of inheritance tax.
I would argue that people in general are more prone to have beliefs that result in conclusions that benefit them or theirs, while being disinclined to have beliefs that result in conclusions that harm them or theirs. This goes for the poor just as much as the rich. However, even this is merely a tendency & there are other mechanisms, like a sense of fairness, which can result in people supporting policies that clearly harm themselves.
The end result is often a rather messy and inconsistent political landscape, where people support policies for different reasons. It then is often wrong to describe one political movement as seeking a certain outcome.
@Thomas Jørgensen
The actual rationale is probably less economic, than that inheritance taxes are extremely unpopular in society. Most left-wing voters also seem to believe this, so it is not just the right. We also see polls giving this outcome in other countries like the UK and The Netherlands. In general, people tend to hate inheritance taxes.
So the only plausible explanation needed is that politicians try to get (re)elected.
I have a hard time imagining American right-wingers pining for hereditary aristocracy, at least those who are remotely mainstream, meaning to the left of Moldbug. Americans are proud of being a republic; the are proud of having no king, no court, and (especially) no goddamn courtiers. The last thing they want is a Duke of Kansas, doddering in his senility yet still seated in the Senate, making vital decisions that affect the whole citizenry.
I think the reason for their hatred of inheritance taxes is simply that they want to keep their money. It’s theirs. They don’t want to give it up, particularly since they were already taxed on it once.
A secondary reason is that these people are sworn enemies of the welfare state, convinced that any money given to it will be spent on foolishness. Better to give the money to the most useless of heirs than feeding the beast that is the state.
I think the reason for their hatred of inheritance taxes is simply that they want to keep their money. It’s theirs. They don’t want to give it up, particularly since they were already taxed on it once.
I think a more specific version is that it’s their families money (and, more importantly, property), and it should stay with the family. I’m willing to bet that if you were to do a survey on values, conservatives on average put more value in traditional family structure than do liberals.
Yes, few people actually got hit with inheritance taxes, but from what I’ve read (or, at least, the presumption on the right is) the most profoundly hit are people who’s value is tied up in property like farmers or small business owners. The perception on the right is that truly rich use trusts to bypass the tax. Thus the inheritance tax hits the intersection of two of the groups that conservatives value highly: productive families.
(I could also point out that, to some degree, that picking out the Koch brothers as targets also somewhat falls under the Toxoplasma analogy, as they’re not straight conservatives, being pro-choice, pro-same sex marriage, and pro-criminal justice reform libertarians).
If that is the presumption on the right, that is an example of the power of just straight up lying to people.
People have actually tried to find a farm that got forced into foreclosure by inheritance taxes in the US, and failed.
They literally could not find a single exemplar to hold up as a bloody rag. – Which is only logical. Inheritance taxes only kick in after an absurdly high exemption – if you cant keep a farm running that has 5 million of free equity in land, that is not a problem with the tax, you are just truly the worst at farming, and a similar logic holds for small businesses. If inheritance taxes matter to you, your inheritance is not anywhere near the word small of any kind.
Even if true, that still doesn’t effect the underlying point. If I’m rich, I can spend money on either personal consumption for immediate gratification (ie buy a yacht) or I can provide for the future of my family after I am gone (inheritance). Why should we penalize someone that plans for the future of their family? A couple of years back I inherited a small amount of money (nowhere near my annual salary, much less the inheritance tax limits) and it made a significant impact on my taxes as is.
This gets into the question of whether you’d value the life of someone you were close to more than a random individual. There’s a lot of logical justification for both sides, but ultimately, it’s an emotional decision. The inheritance debate is a related question. I can see someone without strong family ties taking the public good approach, that inheritances perpetuate a quasi-aristocracy and should be penalized for equality’s sake. But the opposite view seems at least as valid, that we want people to look to securing the future of their children and further descendants and by rewarding that value, we perpetuate it.
If there is value in both of these, then the logical solution is to establish an estate tax with a large exemption and a high marginal tax rate — that is to say, the status quo.
What’s the problem with inherited wealth? It’s the people who are wealthy solely because of their ancestors, and not at all on their own merit*. Below a certain level of inherited wealth, that’s not possible — your inheritance, for example, sounds like a nice windfall, but it presumably didn’t let you quit your job and live off of investment income. It was good that your relatives were able and incentivized to plan for the future of their family. Nobody’s getting fuck-you rich without working for it, and nobody’s paying inheritance tax.
So you pick a number somewhere in the vicinity of fuck-you money, and you start heavily taxing inheritances above that limit. The marginal incentive to leave more money for your family still exists; it’s just smaller, because we would really prefer it if your kids still had to at least pretend to contribute to society.
*You might think this is bad for equality’s sake. I think it also undermines some of the logic of capitalism. Capitalism is good because people accumulate money — that is to say, a claim on resources — by providing value to others. That value is measured in dollars spent, which means that the desires of rich people are given proportionally more weight than poor people. In theory, this is justified because rich people earned that extra weight in the process of becoming rich. Inherited wealth weakens that claim.
Firstly, there is the fact that taxes on the dead are more just than taxes on the living.
This is straightforward natural law reasoning – Taxing the living is a violation of their property rights which is only justified by necessity or complicated arguments about the social contract.
The dead have no property rights, and there is no such thing as a natural-law right of inheritance either, so this is a source of income for the state which is approximately infinitely preferable to the income tax, the sales tax, or.. well, just about any other tax you care to name. Every dollar you are not taking out of the pockets of the dead is ultimately unnecessarily coming out of the pockets of the living, which is evil.
Thus, the inheritance tax should at all times be set in such a way as to maximize revenue – that does not mean 100%, because that just encourages evasion, but…
Secondly, there is the fact that being a billionaire is a position of political power. Even if you are a billionaire who stays away from formal politics, rather than one who buys politicians, the allocation of funds on this scale is inherently a political act. Musk is building infrastructure on his own recognizance! We consider it a good idea to give this kind of power to people who have accumulated their own billions, because by doing so they have demonstrated competence. Giving someone billions because of who their parents were is exactly equivalent to a hereditary patent of nobility.
…. and as a matter of experienced reality, a whole lot of hereditary billionaires are blights on the body politic. They have huge sway, and they are using it towards abominable ends. Thus, the inheritance tax is justified as self defense of the health of the republic.
I would think a requisite property of property rights is the ability to transfer the property, which inheritance is a subset of. (If I can transfer my property, surely I can contract to do it at a future time. If I can set up a contract to transfer property at some future time, why not make that time upon death?)
Now, if the government has a claim on my property for whatever reasons, I don’t think inheritance is necessarily uniquely immune, but it is weird to suggest property rights without inheritance.
It is not strange at all.
Nearly every human society that has ever existed has had property. It is one of the universals.
Inheritance, however, is not. It is pure custom, which is why it is not an inherent right. And inheritance by testament is a very recent and unusual legal idea on top of that.
Ways people have dealt with the property of the dead, of the top of my head, without looking it up:
First come, first serve.
Gavelkind (Equal division between acknowledged children)
Priomgeniture: (All to eldest child)
Ultimogeniture:(All to the youngest child)
Bonfire. (Fire.)
Potlatch (Liquidate, throw party until money runs out)
Matrilinieal inheritance (Nephew)
Senority (oldest living close blood relative)
And leaving it to various social institutions: Churches, charities.
And so on. Inheritance in no way follows from property. It is entirely a question of custom and practicality.
Having an inheritance tax without a matching gift tax doesn’t work very well practically (no gift tax makes the former much easier to evade), and would be at some dissonance (I can gift money and things while I’m alive, but can’t make a deferred gift – why?)
So a moral argument for an inheritance tax should (well, not logically so, but is a bit suspect if not) also support a gift tax. And the latter seems easier to question: I’ve earned money, paid full taxes on it, but the spending power of what’s left remains strangely encumbered (the more so if I’m less selfish). I don’t think it’s unreasonable to think – you’ve taken the cut you asked for, and I paid all requested, willingly, so why isn’t the remainder (the remaining spending power) now more completely my property.
I think this significantly undercuts the “the dead have no property rights” support for inheritance taxes.
The necessity of gift taxes does not follow from inheritance taxes in specific, but from the existence of taxation full stop, as any economic transaction whatsoever may be book-kept as a gift exchange. Thus this argument fails by proving far too much.
I have trouble squaring how the family is not deserving of the money, but others are. Or who has a greater claim to an inheritance and why?
You say that as though there are clear natural laws about other things.
Need.
There are. And just so we’re clear, I’m not sure I agree with him that there aren’t just and unjust inheritance laws. Just because there are many and varied, doesn’t mean that they’re all OK.
After all, murder – sometimes legally sanctioned – is also a human universal, but it’s not OK.
Greed, more like.
Not sure what you mean by “very recent”, but the “modern” last will and testament has been part of Common Law from the beginning, and had recognizable antecedents in Classical civilization.
The various customs and laws that you cite, were mostly associated with real property, i.e. land. And it has often been the case that land was treated separately from other sorts of property, as a thing that an individual can only administer in trust for The Family, The Clan, or The State. But then, it was also often the case that people themselves were viewed as essentially the property of the family/clan/state.
In the Roman Republic, a father with a living son could not write a will saying “My friend Bob gets the farm when I die”; the farm stays in the family and goes to his living son. Except, the father couldhave his son killed, or sold into slavery, any time he liked and with no explanation required. Even the adult son who was the father of his grandchildren. The son, like the farm, is family property and if the father feels the family needs to be pruned, or plowed under and replanted from scratch…
Later, it became common to use various legal dodges to emancipate sons on adulthood or financial independence. But those same legal dodges, ended the father’s legal obligation to leave his real property to his son, allowing him to write a will giving it to his friend Bob if he preferred (most didn’t, of course).
TL,DR: There is a strong correlation between how a society treats property rights, and how it treats human rights. So when someone says, basically, “we’re going to take your property as soon as you’re not looking after it”, I start wondering what else they’ve got in mind and whether they’re going to wait on my death to implement it all. When they justify this with, “In Olden Times you weren’t allowed to give away
our‘your’ property to strangers”, I take note of all the other things that weren’t allowed in olden times.@Anonymous
Simply aserting that there are such things as natural laws is not enough to persuade me.
That is the line they spin, but judging by their actions, they have no kind of faith in, nor any allegiance to republican ideals. (I hate the way the USA has made even talking about politics so unnecessarily difficult. I mean here the form of government, not the party. ) If they did, vote suppression and the gerrymander would not feature so very prominently and blatantly in their political strategies.
I do agree that they have a hate for the welfare state… but that too is just absurdly bad buisness sense, and is best viewed as outright class war from the top down, because Bismark was right, there is no profit in a sick and ground down workforce.
Vote suppression plays a vanishingly tiny role in anyone’s political strategy in the United States.
[citation needed]
See, for example:
Did the voters go down or not? Last I checked the prediction that minorities could not vote if identification was necessary didn’t come true. The voting demographics didn’t change.
Still it doesn’t follow that if x affects one group more than the the purpose of x was to target that group. Speed limits disproportionally effect men, and the poor. Doesn’t mean speed limits were designed to punish men.
Yeah, I don’t find your agenda driven news piece to be a very convincing citation. This isn’t wikipedia.
I looked into one of these once, after piece about…Mississippi? I think where they were closing down a bunch of DMVs in rural areas that happened to also be areas which were majority or near majority black. People went wild over it, accusing them of voter suppression, but as a narrative it just didn’t hold up to the facts.
First of all, it turned out that the counties involved were majority black in several cases, yes, but the majority of the state’s blacks did not live in those counties. Hardly an effective way to suppress black voters!
There’s still a just-so you can tell there, though, so I looked deeper. Not only were the majority of the state’s blacks NOT residents of those counties, but the distribution of population across the effected counties meant that more white voters were effected than black voters. The just-so story, where they were going for a solid body blow rather than a knock-out punch, starts to fall to pieces on its own.
It really ended up looking like the state’s claimed reason for closing these DMVs (they were extremely expensive to run and there were alternative methods for getting a state ID valid for voting than actual physical presence at a DMV) was the actual reason for why they closed them. That destroyed whatever confidence I might have had in the narrative building bullcrap coming out of the voter suppression theorists. Impugn motives is really easy because we can’t read anyone’s mind, so whatever circumstantial evidence they can come up with bears up against the utter impossibility of counter-evidence.
It’s utter bullpocky and it’ll continue to be utter bullpocky. Lieing with statistics at best, outright base-riling propaganda at worst.
@m.alex.matt
My “agenda driven news piece” is a legal opinion from the U.S. Fourth Circuit Court of Appeals. Try again.
PS: While it’s plausible that one or two legitimately motivated policy changes would have a disproportionate impact on minorities, if you do a study on how policy changes will affect voters by race and then pick five that “just happen” to make it harder for black people to vote, the rest of us are allowed to notice what you’re doing.
What you actually linked to, was an edited subset of a legal opinion from the U.S. Fourth Circuit Court of Appeals. One that was provided by a news media outlet, and one which curiously does not include either a cite or a link to the actual, unedited Circuit Court ruling.
Possibly the editing was not “agenda-driven”, but your choice of sources was less than ideal for establishing that. So, perhaps try again.
Oh, come off it.
I cited the key part of the decision, and went to the effort of finding a source that put it in context. Anyone who cares to verify that my context was not taken out of context can find the entirety of the decision with two seconds of googling (but with uglier formatting and a ton of irrelevant boilerplate to scroll through before getting to the meat). Feel free to compare the two documents and confirm for yourself that my original source includes the unabridged text of the decision up to and beyond the bit that I quoted.
Could I have included a link to the original judgement? I suppose so. Does it make sense to criticize me for not being maximally helpful in a conversation in which I am the only person to provide any source whatsoever? I guess you’ll have to judge that for yourself.
@Iain
Thanks for posting the link to the decision; very interesting reading.
My takeaway is that is damning in intent; possibly more so than expressed in the linked article, but likely less so in actual effect as described in the dissenting opinion by Judge Motz.
I don’t agree that the actual decision is just the article plus boilerplate though. I found the entire decision worth reading, and much more compelling than the summary article itself.
A lot of congressman are pretty old — the Senate has an average age of 61 (compared with e.g. 50 for the British House of Commons).
You can’t vote out the Duke of Kansas though.
The problem isn’t “old people might be in power”. It’s that a ‘nobility’ system can — and does — end up giving people power who shouldn’t, in a right and proper world, be anywhere near it. And no means to remove them.
Eh, I think the old British House of Lords was alright.
seladore,
I’d say that mass elections often give power to people who shouldn’t have it as well. People who are only interested in climbing the ladder will find ways to game the system no matter what system is in place, and they will often be better at it than those who would be genuinely suited for the job since climbing the ladder is all they care about.
I’m tempted to make a comment about the White House Correspondents’ Association, but I’ll refrain because of this blog’s preference for apophasis.
Thomas,
I am shocked to see that neither you nor anyone replying to you is aware of the economic arguments against estate taxes. It is a very widely held position among economists that estate taxes are terribly inefficient, unjust and useless. They raise little revenue while causing enormous deadweight costs to society. They disincentivize wealth creation. I get the instinct that it seems better to tax “a dead person” than a living person, but there are very sophisticated and persuasive arguments against estate taxes.
Claims and arguments which fails the most superficial of sanity checks. The inheritance tax in the US has been lowered dramatically, and the exemption raised dramatically repeatedly. All the while the rate of formation of new businesses in the US has been roughly halved since the 1970s. (on a per working capita basis) and even fallen in absolute numbers despite healthy growth in population and labor participation.
the “Stagnant” EU now has a rate of new business creation three times that of north america.
I blame both of those things on the same problem – US law makers are in thrall to the already extremely rich, and rig the game to favor them. Estate taxes dont have any incentive effects worth mentioning, because everyone is already maximally incentivized to not die, but you can raise a lot of lobbying cash by offering to fight them, Or by granting tailor made tax exemptions to corporate giants that most certainly do not need them.
…
Okay, lets step away from the estate tax.
Amazon is currently shopping around for a new corporate facility and local polities across the US are engaging in a massive bidding war of who is willing to offer the largest tax break to a company already insanely dominant in the economy of the US.
Ask yourself: why the heck is this a thing which is legal ? Under EU law, a tax break targeting a single firm is exactly equivalent to a cash subsidy of that size, and must pass the same level of legal scrutiny at the federal level before it is permitted to happen, and if done under the table must be repaid in full when caught (this is why apple is currently on the hook for 12 billion and change to the Irish Exchequer)
You can just as easily ask yourself why would it be illegal? What is it about the EU’s growth rate that would instill us with confidence that it has the rules figured out?
The fact that the EU has fucking terrible monetary policy does not change the fact that the competition rules are obviously superior to US praxis.
Proof by contradiction: In order for the ability to grant firms tax-breaks on a per-firm basis to have salutary effects on growth, the government must be better at picking winners than the market That is the full planning problem and implies you should just get rid of the market already.
Do you believe in a market economy or not? If you do, you should be arguing for the adoption of EU style rules in this field.
I’m pretty sure the targeted tax-break gets the same scrutiny as a cash subsidy in the US. It’s just that the scrutiny for doing either is just “get it approved by the legislature, or spend it out of funds pre-approved by the legislature for this purpose”. The US preference for targeted tax breaks (or taxpayer-guaranteed loans, like for Rhode Island and 38 Studios) is largely because they’re more politically palatable.
What rules is the scrutiny in Europe based on? An by “federal”, are you saying “nation-state” or “Brussels”?
Because I look at Airbus vs Boeing, (or Intel vs AMD) and I’m not seeing much of a substantive policy difference.
I’d be all for limiting the ability of state or federal level targeting of subsidies and/or tax breaks, ideally to the point that even sector-based subsidies are impossible, but does the European approach actually achieve that goal?
Brussels. And yes, airbus gets help.
Because all the big players wants an european areospace sector.
In general, however, it is one heck of a lot harder to get state aid in europe than it is to get a tax break in the US. It is one of the major achievements of the european project.
Note that Amazon did not even attempt this shit when it opened its european branches… because it would not pass muster
Alternatively, competition must be a good thing even when it’s between governments.
There are two obvious models for taxation—charge for value or income redistribution. Having local governments compete for firms makes sense on the former model. If government A charges more in taxes than government B but uses the revenue to provide services valuable to the firm, such as better schools for its employees, the firm will go to the government offering the better net (value-cost) terms. It is only in the interest of the local government to offer the firm special terms to the extent that it is still profiting by the firm coming–increased revenue to the local government greater than increased cost. The local governments are then facing incentives similar to those of a firm in a competitive model.
Competition is bad only if you assume that taxation should be redistributive or if you don’t trust local government officials to act in the interest of their citizens.
Governments compete against each other by setting overall rates. (above 10%. That is the minimum set by eu treaties for corporate taxes) Giving special rates to specific companies distorts the free functioning of the market, and is therefore terrible for the economy.
I should not even have to explain this?
Take two companies. Both of them make yellow lefthand sprokets.
One focuses on its core mission of making yellow lefthand sprokets as efficiently as possible. This leaves them with a cost per sproket of 100 credits, and they sell it on the market for a 110 credits, leaving them with 10 credit profit. on which they pay 20% tax, leaving 8. and 2 tax credits paying for infrastructure. retirement, fancysmancy fighter jets and so on.
Two hires equally competent sproket engineers and workers, but also hires lobbyists to bribe politicians to write them a highly specific tax exemption that lowers their tax burden to zero. This leaves them with costs of 101, they also sell for 110, but they have a profit of 9 credits. and no tax credits. and 1 credit in the pocket of a crooked politician.
Now, the size of the sproket market doubles one day, and firm one and two go out and try to raise capital to meet this increased demand.
And investment capital does not care that firm two is in fact a good deal worse at making sproket, because they are throwing money at lobbying – they have higher profits! so firm two gets the capital, fills the demand, and the nation is worse of.
I don’t read all that much hate toward Musk, and I read some left-wing sites. There is much more written about the Koch brothers. There are of course left-wing takedowns of Musk obviously, but IMO if you’re a leftist that’s fair as a corrective to any Tesla-love that exists among some leftists/centrists — a billionaire with a reputation for treating factory workers poorly isn’t something to be celebrated just because the luxury cars that are being made are somewhat better for the environment.
I’m not a leftist, but personally I loathe cars and resent the extent to which modern life revolves around them — I don’t really care if they’re running on gas or electricity or urine.
I can’t help but notice a great divide between the liberal democracy-style stuff in “True Radical Programme” and quotes like
You say they saw great success, but to the extent that they managed to end competition, the Fabian Society is a complete failure. And to attribute the passing of the more reasonable reforms to the Fabians a bit questionable. The same sort of thing happened everywhere, Fabians or no Fabians. It seems far more likely that this is a result of the unstoppable bulldozer process of capitalism-in-democracy rather than the actions of any particular set of activists.
Everywhere except america, where there were no Fabians.
A question that seems worth asking is why Fabian socialism, which became the dominant strain in every other English-speaking non-Soviet country, flopped in the US and still seems weird and atypical to Americans.
>Everywhere except america
>8-hour workday, women’s suffrage, paying MPs a salary, capital gains tax, public education, school lunches, and railroad nationalization
The only demand that didn’t really happen in America is railroad nationalization, but you’ve still got organizations like Amtrak. And if we’re talking about the offshoots from this ideology, of course America has the welfare state and so on, perhaps a few % of GDP less, but it’s not that big of a difference.
It doesn’t seem at least a little weird to you that what you describe as “the unstoppable bulldozer process of capitalism-in-democracy” would cause these things?
No, why?
Think of things from a non-ideological perspective, meaning what happens regardless of what the ideological advocates for something wouldn’t necessarily like. Do libertarians spend all day advocating for the benefits of an 8-hour work day? No. But is there a large voting population in capitalist democracies that WOULD like that reform, and are willing to vote for candidates that promise it? Yes.
The capitalism incentivizes a portion of the population to want those kinds of regulations and the democracy gives them the power to pursue those kinds of regulations. That specific idea is emblematic of the ‘argument’ behind the ‘Democracy’ propaganda in WWII and the Cold War and the overall New Deal state in the US.
Because those are all causes that were advocated by leftists (i.e. communists, anarchists, and socialists) and were (in some cases still are) opposed by the capital class.
So the part of “capitalism-in-democracy” that is not capitalist?
You continue under the assumption that some specific people advocating for something matters. It matters as much as murdering Caesar helped preserve/restore the Republic.
>So the part of “capitalism-in-democracy” that is not capitalist?
Just to touch on the most obvious of those issues, if you think women’s suffrage would have happened without the societal changes resulting from capitalism I don’t know what to tell you. This emancipation doesn’t happen in a void, it has economic preconditions. Here’s Marx:
Unless by ‘capitalist’ you mean, very specifically and exclusively, ‘free market extremist’, I’m not so sure. If capitalist really does only mean a free market extremist economy, we haven’t got any capitalist economies left, and really never had any except for very brief periods where some small areas got kind of close.
Systems of private property relations where democratically elected governments regulate the economy and society is what I mean. If that isn’t ‘capitalism-in-democracy’ to you, I’m not really sure what ‘capitalism-in-democracy’ is supposed to mean.
This comes across as rather one-sided presentation of the views of the Fabians due to missing out things that the Fabians advocated that are widely considered abhorent today. Most notably Eugenics. George Bernard Shaw was pro-Stalin and seemed to be in favour of Stalin’s purges. Additionally, he was pro-Mussolini. The Webbs were also pro-Stalin. This kind of stuff was already discussed in the Chronicles of Wasted Time review, and it seems odd to not at least mention it here. Perhaps its just the nature of this specific book?
Early criticism of Communism comes from marginalism, which was putting the nails in the coffin of Marxist Economics before Marx himself was even dead. An early example of criticism would be “Karl Marx and the Close of His System”, from 1896.
The Eugenics omission apparently comes from Pease himself; I cntrlF-ed the book searching for “euge” and found nothing. Maybe Pease was personally not very into it in 1916? Or maybe he though it a secondary matter in the grand scheme of Fabian advocacy?
The book was written in 1916, so Stalin was not an issue.
Of course, what Scott doesn’t mention at the end is that 1906 was the last great election victory for the Liberal Party – the Liberal Party in the UK then split and all but collapsed over the next 25 years to be permanently supplanted by the (socialist) Labour Party which advocated precisely the policies the Fabians had been talking about, so it’s not as if the Fabians’ predictions were all that far off. Their “progressive moment” literally was “just around the corner”, so I’m not sure whether the gently mocking tone in the final paragraph is entirely warranted.
Notable non-Fabians? I could start with HG Wells.
Chesterton and Belloc were former Fabians, and they advocated distributism over and against socialism. Chesterton used to debate his friend Shaw on this stuff; here’s one of the debates.
Wow that’s a great read. Really relevant quote from it to the idea that people didn’t realize socialism could go wrong (granted, this is written in the 20s, but still well before the 50s)
There’s a lot of quotable stuff in there. Most of the debate seems to consist of them giving elaborate, generous, backhanded compliments to each other.
And yeah, in that passage Chesterton’s attacking the idea of a central power who can justly distribute capital. That’s actually a sore point for distributists even today, because everyone assumes based on the name that distributists want to arrogate the power to distribute capital. When it came to practical measures to encourage the wide ownership of capital, they advocated things like a progressive tax rate.
I’m not sure what you mean, but Wells was a Fabian.
In the sense of criticising them from the inside for a while…
Typo: house-painer -> house-painter
I’m no historian, but reading 19th-century novels gives me the impression that this was not how it usually worked; rather, that in that period, the up-and-coming industrialists (who had the seed capital, built the factory and and got the profits) were supplanting the old aristocracy, many of whom had titles but no money (Vanity Fair has characters named “Lord Bareacres” and “Earl of Mouldycastle.”) Of course, sometimes the first’s daughter would marry the second’s son, so that their offspring could have both.
While it was true that the declining fortunes of landed aristocrats was a visible trend in the 19th century, one must remember that it was only on the margin; old families who no longer had the fortunes to maintain vast country estates but could still afford a London townhouse, horses, servants, and everything else they needed to maintain their lives of luxury. Second, it must be remembered that there were a lot of aristocratic families around back then and; just as with any large group, some were doing well and some were doing poorly, the occupants of the House of Lords still represented the majority of wealth in the country.
I would say that Scott’s characterisation of 19th century startup finance is basically accurate, though aspiring businessmen would never deal directly with aristocratic estates, rather with the private banks and solicitors who managed aristocratic money. And he underestimates how large a share of the profits that the entrepreneurs usually got, especially since they usually got to keep almost 100% of the equity in their venture since almost all investment prior to the 20th century was done via credit.
Do you have a source for that? When are you talking about, 1848 for Vanity Fair or 1884 for the Fabian Society?
This paper gives a good breakdown of average personal estate by class in Britain from the 17th to 20th centuries. It appears that the average estate of the Titled class was indeed surpassed by the Merchant class sometime in the 1840s, so I was wrong. I was mostly taking my information from histories of the early industrial revolution, so I was thinking about the early 19th century specifically.
The crash in the value of agriculture really hit rents as income hard, and made a lot of minor aristocrats/the gentry relatively poor: estates that cost more to run than they generated in income, coupled with a drastic decline in the value of land outside urban centres and often debts and mortgages inherited from previous generations that could no longer be settled by selling off chunks of the estate due to the fall in value. Very large estates and high-ranking nobles like dukes got off fairly lightly (often because they owned chunks of valuable London real estate, like the current Duke of Westminster), but the writing was on the wall: the future belonged to trade. Though the decline was gradual rather than steep, it was inexorable and only the really big fish have come out unscathed (the Duke of Devonshire, for example, is not hurting by any measure – see his little summer cottage in my own county).
Mabuse,
Switching from totals to just two classes is a very big change; it looks to me that you were wrong by at least 2 orders of magnitude. Going by the numbers in Table 1, the Titled category peaked at 13%, in 1670. The aggregate Merchants were ahead of Titled in 1740. The highest ratio of Titled:Merchants is 1.8x in 1810, when the titled had 8.4% and the merchants 4.7%; and the lowest is 5x in 1858, when the titled had 2.4% and the merchants 11%.
According to Table 2, the top 1% ranged from 19-38%.
The Titled category and the top 1% are both a lot more people than the House of Lords. The titled category was about 25k. The 1% grew with population from 15k to 70k. I’m not sure about the size of the Lords, maybe 200-1000.
Douglas,
Point taken, I won’t shoot my mouth off like that in future.
the up-and-coming industrialists (who had the seed capital, built the factory and and got the profits) were supplanting the old aristocracy, many of whom had titles but no money
Agreed about that part; the 19th century ironmasters supplanted, rather than were dependents of, the aristocracy as the main economic forces. Owners of large estates found themselves land-rich but cash-poor, revenue from rents suffered due to the agricultural depression and this is why you have so many mentions in plays and novels of impoverished aristocrats trading a title for money by marrying American heiresses – see Lord Randolph Churchill and Jennie Jerome, parents of Winston Churchill.
Engaging in trade was beneath a gentleman, but investing capital was acceptable, and the boom in mines, factories, railways and other developments of the Industrial Revolution gave ample opportunities to invest in the new technologies. And as with all booms, there were busts, frauds and crashes as well – bank failures were quite common.
And the up-and-coming middle-class of businessmen were represented by the likes of the character Mr Bounderby in Dickens’ Hard Times (a self-made man very proud of his maker):
As for the Fabians, yes, they were like that in reality 🙂 A bunch of middle-class cranks and faddists – Shaw was (in)famous for being a vegetarian and wearing a Jaeger suit (one of the outgrowths of the movement for Rational Dress):
But the Fabians also had predecessors and contemporaries in the Arts and Crafts Movement (William Morris), the Chartists, Ruskin’s socialism, the Working Men’s College, even Wilde wrote The Soul of Man Under Socialism. It was definitely in the air.
So too was the interest in spiritualism and psychic powers – everything was being questioned, all the orthodoxies of Church and State. Science and technology and progress were upsetting applecarts all over the place!
And the Fabians’ success was, to be blunt, partly down to social snobbery – they weren’t the cream of society but they were respectable and less likely to be hauled off by the Special Branch. Socialists up to then had been mainly identified with bomb-throwing anarchists, wild-eyed and bearded Polish and Russian emigrés, and seen as foreign agitators trying to destablise the State and Crown, with the native representation being the labour agitators of the loom-breaking Luddite type. The Fabians weren’t any of those, and I think it comes through in the parts quoted from Pease’s book that he was keenly aware of this and wanted to maintain that separation in the public mind for the sake of efficacy.
And Annie Besant seems to have been an enemy/rival of Crowley’s – or regarded by him as such; he put her into his novel Moonchild under the tissue-thin disguise of “A.B.” or “Annie” as head of the Black Lodge and the High-Priestess of Hecate 🙂
Isn’t Bounderby the guy who claims to have came from nothing, but in the end it’s revealed that his mother invested a lot in his upbringing?
(just as note, I don’t remember it well enough to tell if this has any impact in your analysis)
That’s exactly it, I think Dickens was pillorying the attitude of the self-help books of the time (the self-help industry has a pedigree) of writers like Samuel Smiles (real name) and the American Horatio Alger with his fiction of impoverished lads rising to success and wealth by hard work and thrift, as well as the ‘social Darwinists’ with their attitude of “I did it all myself, rose from humble beginnings, pulled myself up by my bootstraps, so the poor can do it too and if they don’t it’s because of moral turpitude and vice”.
Bounderby makes an exaggerated case of being a rags-to-riches story for the same purpose: I had nothing and less than nothing, I succeeded, therefore I see no necessity for charity – I overcame hard circumstances, let others do the same!
The fact is, though, that he’s a liar and he did have help and resources; yes he was from humble beginnings but not born in a ditch and abandoned by his mother to the care of an alcoholic grandmother and the rest of it; his success depended on the sacrifices his mother made for him.
I think we tend to underestimate the Fabians because, as Scott points out, so much of what they campaigned for we take for granted: a set working week, pay and conditions, right to join a union, a social safety net. The same with that post about Tolkien being anti-progress; the writer forgets, overlooks, or does not know that Tolkien saw industry and progress before there were ever a thing such as the EPA, when the Black Country got that name because of the soot and pollution from the industrial expansion, when smogs and the infamous London Particulars killed people. Even up to the 70s, for example, in the countryside near where I lived there was a local factory that had the surrounding lands (including houses) covered in a thick white film of the dust from the production of magnesium oxide.
It’s easy to think of Tolkien living in a dream of a rural never-never land, but that post forgot that Tolkien’s experience of what industrialisation was like was more akin to seeing what it was like living in industrial-boom polluted China; if you imagine his views came from the days before dumping industrial waste in rivers was banned, instead of the current conditions we live under where there are stringent regulations, you can see why he was “an opponent of progress”.
“I don’t see why he was so anti-factories!” Yeah, because you’re not living in a house covered in soot from factory chimneys, coughing your lungs out on particularly bad air quality days, and what were the local rivers are now open sewers filled with chemical run-off, because of the improved conditions due to environmentalism and regulation.
IIRC, Bounderby genuinely came from a poor family, but greatly exaggerated their poverty. More seriously, he claimed that his mother was drunkard who beat and otherwise mistreated him, and refused to let her anywhere near him, or anyone he knew.
But actually, she had brought him up perfectly kindly; he just didn’t want anyone he knew to meet her in case they discovered that he was slandering his own mother.
Third, the Fabians were bourgeois in every sense of the word. They knew how to move around in bourgeois society and get it to work for them.
As indeed is necessary, as black-letter communist doctrine is that the bourgeois revolution comes first. Even the Bolsheviks, prior to October 2017, knew that Marx and Engels required a period of robust capitalist development before an economy was healthy enough to transition to socialism and to communism. Even Lenin saw the Bolshevik revolution as a holding pattern until the beginning of the worldwide revolution necessary for true communism. The Mensheviks maintained their objection to the Bolshevik project on these grounds to the bitter end. This is why Germany was seen by general socialist consensus as the natural first domino in a communist era. (And given that German Jewry was the most fertile site of communist intellectualism in the early 20th century, the Holocaust was especially devastating for the movement.) To date, no sufficiently advanced bourgeois capitalist nation has seen a successful communist revolution, meaning that the basic requirements of the philosophy have never been met by any ostensibly communist government.
Has precise criteria ever been set for this? Otherwise one could continually move the goalposts.
There are numerous countries that, when taken over, were more developed than anywhere in the world by Marx’s death. For instance, Czechoslovakia. Very much developed pre-WWII, and largely unscathed by WWII itself. The 1948 Czechoslovak coup d’état, of a clearly advanced bourgeois capitalist nation, did not lead to the promised utopia.
I’m no expert, but I suspect the Czechoslovak situation was less of a home-grown revolution and more of an annexation.
Czechoslovakia went Communist because it was conquered outright by a Communist country.
Offhand, I cannot think of any country which had a communist revolution, and had a smaller fraction of the population in agriculture than Great Britain at the time Karl Marx was born, never mind when he died.
I might also point out that Marx claimed the capitalism must inevitably lead to the proletariat becoming ever more immiserated. So according to him, almost everyone in Britain, America, Germany and so on, should be much poorer than at that time he wrote Das Kapital. Was he right?
Do you mean October 1917, or are you taking a shot at someone?
lol yes
Odd and sad that they forgot it as soon as their friends started making revolutions in Third World countries.
Can’t really say it’s been completely forgotten. When Deng Xiaoping redesigned the Chinese economy (abortively alongside Liu Shaoqi in the early 60s following the failure of the Great Leap Forward, then more effectively in the late 70s and early 80s), he knowingly based it upon Lenin’s New Economic Policy, which was intended as State Capitalism focused on building an advanced capitalist economy driven by SOEs controlling the commanding heights and small entrepreneurs driving the growth of services at the retail level. Lenin’s original plans ended up sidelined by his death and Stalin’s embrace of War Communism, but it was hardly forgotten in the communist world, and seems to have become the prevailing doctrine of the most powerful communist party the world has ever seen – which is still fundamentally guided by Marxist developmental models.
Just because the economics of the Chinese Communist Party don’t look like those of Brezhnev’s USSR doesn’t mean they’re anti-Marxist in any way. In fact they might be closer to orthodox Marxist-Leninism than the post-Stalin Soviet Union was.
That seems like a major flaw in Marxist doctrine, right? Marx predicted that advanced bourgeois capitalist nations would eventually trigger communist revolution, but it turns out that advanced bourgeois capitalist nations deliver good enough living standards that the people in them have little appetite for communism. If anything, survey evidence suggests that greater wealth causes social values to evolve in a more liberal and capitalist direction.
It’s almost as if communist organizers are just typical-minding their own greed on to the working class, and everyone else…
Absolutely; and the problem was obvious as early as 1905 or so. This led to two major variants from classical Marxist revolutionism: Leninism and fascism.
Lenin’s answer was that since the masses would not spontaneously rise up in revolutionary fury, the revolution would have to be made, by a “disciplined vanguard party”. This force would seize power from the reactionaries and bourgeoisie and establish the “dictatorship of the proletariat”.
The fascist answer was that since the masses were not sufficiently motivated by economic concerns, other passions must be used. Thus the people (or a dominating plurality) were to be roused to action by nationalism and militarism. The fascists also discarded most of the socialist economic program, notably the general confiscation and redistribution of wealth. The important thing was overthrow of the old political and social order, and empowerment of the radical intellectuals to rebuild society.
IIRC, the theory is that capitalism must inevitably make wealth ever more concentrated until, in the logical extreme, one single monopolist is left with the whole wealth of the world, and everyone else is permanently on the brink of starvation. At this point, if not before, the starving many take the wealth from the wealthy few (or one).
So according to Marx, either the Communist revolution has already happened, or everyone on this board is poorer than their ancestors were in the days of Englands’ Dark Satanic Mills.
I don’t know about starving, but it would not surprise me to see the world end up with a handful of capitalists and the rest needing to work as wage-laborers in order to survive.
It would surprise me. A very few owners probably cannot keep an eye on their subordinates sufficiently tightly to avoid ruin. There are diseconomies as well as economies of scale.
I guess they could do it by either becoming dictators or capturing the governments to squash their competitors with regulations (both kinds of corruption exist), but you’re going to have to explain why that’s purely a capitalist problem, rather than a general description of a big-government problem.
Isn’t everyone with a pension fund or who owns a house a capitalist? Are you really sure such people are rarer now than in Victorian England?
Uhhhhh… I’m reasonably sure I’ve seen neo-Malthusian arguments in the SSC comments section, either here or on the subreddit. They’re totally like something a modern person has actually said.
I think we could easily turn this around: if Elon Musk is so smart, why is he doing things himself instead of setting up a market? Surely the market is wiser than Elon Musk, and can better direct his resources.
(If you think the claim sounds stupid, now you know how planning-vs-markets debates from the 19th and 20th centuries sound to us present-day socialists. Plainly in any economy, some things are going to be left to chance opportunity and aggregated individual choices (“markets”), and some things are going to involve planning (firms). The 20th century teaches a plain lesson that One Big Firm sucks — be it capitalist, Marxist-Leninist, or even (in its most blatant incarnation) fascist. This doesn’t actually tell us why you should have the ownership and direction of firms fall to private profit-makers, rather than to the workers.
After all, if Elon Musk is such a genius, he can surely persuade his own employees to cast a democratic vote for the direction he wants to go in.
There’s nothing preventing workers from owning capital today. In fact they own quite a lot of it (total US pension AUM ~= total US public equity market capitalization). The reason they don’t own the capital they use in production is that it’s an extremely suboptimal arrangement.
I think you are either dangerously overestimating the power of being genial or dangerously conflating political ability with technical genius. If the former, rest assured that neither the people everyone recognizes as absolutely brilliant could have such great power over thousands of humans – your contention that he could do this if genial is strange. If the latter, please observe that you would have to consider many shady historical figures as more brilliant than Musk.
Voting is suboptimal to a market allocation of resources because voting doesn’t allow a minority view to try something else that could turn out better than the majority view. Also, voters don’t have skin in the game and are therefore more able to make decisions based on bias and prejudice. Lots of voters in political elections vote based on political bias and poor or false information, but investors in the stock market usually learn quickly not to do that.
Employee-owned companies can be a good idea, though they are hard to do right. Most professional services firms like doctors’ practices and law firms are employee-owned but a lot of them end up not being very stable, and sometimes the employees prefer to be taken over by a corporate entity so they can focus on doing the work they like and diversify their wealth rather than worry about the management of a business. Diversification is also a big reason not to have worker-owned businesses—it’s not good to depend on the same company for your wages and passive/retirement income if that company goes bust. It’s much better to draw your wages and other income from different sources.
“I think we could easily turn this around: if Elon Musk is so smart, why is he doing things himself instead of setting up a market? Surely the market is wiser than Elon Musk, and can better direct his resources.”
I’m not sure what you mean. What would it mean for Elon Musk to run a market? Like run Tesla via a prediction market or something?
Or do what Lampert did to Sears.
The big lesson of Sears — and of Russia’s transition to capitalism in the Nineties, and half the privatization schemes that’ve gone bad over the last forty years — is that you don’t get good outcomes by copying the forms of a market if the underlying mechanisms don’t allow for efficient signaling. There is nothing magic about denominating resources in money per se.
I’m skeptical of prediction markets as currently implemented for similar reasons; a lot of them have some pretty nasty distortions built in.
One of Coase’s two famous articles points out that, in a world of zero transaction costs, firms would be replaced by markets–what some people since have dubbed an “agoric” economy. A firm faces the same internal problems as a planned economy–coordination without a market.
The implication of Coase’s argument is that the size of firms is determined by the balance between the inefficiency of central planning within the firm and the inefficiency due to transaction costs outside it.
Same thing. Capital comes from workers, organization of firms comes from workers. Firm owners are simply the most successful workers. When workers are not successful at becoming private profit-makers, those firms go under.
Could it have been that these demands (minus railroad nationalization and women suffrage) became less insane and fringe because production increased as never before and made them economically viable, not because of the Fabian Society’s pamphlets? I mean, helping and educating the poor and trying to reduce the workload were not exactly brand new crazy ideas (even community ownership was not new…); but getting all children to school would indeed have been crazy prior to modern developments in production and transportation. Once these are solved, it becomes almost a natural development to try to educate everyone.
The agricultural revolution is a key driver here. It made farming much more efficient, freeing up workers for the industrial revolution, freeing up children for schooling, allowing more and larger cities to exist, etc, etc.
This is a great post. This kind of thoughtful yet humorous engagement with meaningful obscura is SSC at its best.
Chesterton, in 1927:
“The lord (or more likely his steward) would sign off on it, the factory would be built, a little of the money would go to the businessman, but most of it would go back to the lord who was living on a country estate hunting foxes somewhere.”
Back in those benighted days the most important job of the upper class was seen not as being good at business, but as providing a competent officer corps in case of war (which was expected to be a serious business and to take place periodically) and for other military purposes. The Prussian junkers were famous in this regard. Fox-hunting or whatever they did served a completely practical purpose, in preserving their aggressiveness and martial spirit and their willingness to go to war and lead from the front, on which their social status actually depended.
Socialism’s main attraction, for a lot of people, was (in theory) eliminating the necessity of periodically going to war. As an expected positive side-effect, the older saber-rattling upper class would be replaced by a more enlightened, competent, and practical-minded managerial upper-class (i.e. the socialists themselves).
Socialism failed to produce this benefit in WWI and then failed again during WWII. Of course, assiduous Communist propaganda makes it quite hard to even understand this.
After WWI all sorts of people were saying “never again” and meaning it, e.g. “the business of America is business”. Russian Communists thought they had a proof that pacifism at any cost worked. Many people agreed. Pacifism was in the air. The Briand-Kellogg pact abolished war. But later, being good buddies with Hitler, seeing him as the lesser evil, and appeasing him at any price in order to be eaten last were seen as embarrassing mistakes, hence have been mostly edited out by Communist historians. Communists did a 180 turn in regard to war and never looked back (while of course still keeping the misleading rhetoric).
Then again, war changed too, becoming much more industrialized (due to better artillery, machine guns, tanks, aerial bombardment, and eventually nuclear weapons). The managerial revolution also took place, as dictated by war necessities, both in socialist and in capitalist countries, with officers being replaced by managers at the top of the social ladder.
The change has been so profound, in fact, that people like the author can no longer even understand the motivations of a century ago.
Note: I do not mean to imply that hunting is closely correlated to bravery in combat, but that it was seen as a necessary accoutrement of that lifestyle — just like going to Davos once a year still is for today’s serious businessmen. And those at the top of the social pyramid can easily justify their amusements.
England famously sold officer commissions to the highest bidder (until 1871), I don’t think “competence” is exactly what their officer system aimed for.
I don’t think “competence” is what they were aiming for either. It sounds more like a managerial quality to me. Whatever they were aiming for (maybe gore and cruelty desensitisation plus bravery and initiative), it worked.
Is the Davos forum meant to promote entrepreneurship, managerial competence, or global thinking? Or do TED events promote creativity (edit: and open-mindedness)?
But somehow, one way or another, the system works. Probably fox hunting helped too, in its own modest way.
My point is that it’s hard for modern people to even conceive the mentality of the officer corps from a century ago. It’s almost completely gone.
Edit: In other words, I don’t think that “competence” is the main quality that made for a “competent” officer corps back then. Poor choice of words on my behalf.
Interesting. Can you point to a source that expresses or celebrates that mentality?
I pieced it together from a number of sources. A lot of 19th and early 20th century literature and music celebrates (perhaps sightly ironically) or records this mentality. The appeal of officers and petty officers, garrison and regiment life, their famous gambling debts and duels: see for example Carmen, Vanity Fair, Pride and Prejudice, even War and Peace has something to say about it.
Hunting: a silent, but very telling witness is the large number of paintings and other artistic depictions of the hunting lifestyle, with chase scenes and incredibly many portraits of hounds and horses. Modern museums only rarely display them, but they seem to have constituted an important part of the artistic output of 19th century artists, in the West.
This is not to even mention the very abundant literature dedicated to colonial ventures, which often enough involved the military, hunting, or both (see Kipling).
One problem is that the people who partook in this lifestyle most directly were not really dedicated to introspection, so we largely have to rely on second-hand testimony. Still, such testimony abounds, if one knows to look for it.
Edit: See “La paix du ménage” of Balzac for a striking and quick read.
2nd edit: This is also where “The Three Musketeers” and “20 ans après” took their inspiration from (though they may give an inaccurate view of this lifestyle).
Can you point to a source that expresses or celebrates that mentality?
From Shaw’s preface to his play Heartbreak House, published in 1919 (well worth reading in its entirety, though being Shaw it’s more rhetoric and polemic than strict neutral analysis), though this is less the traditional gentry officer class and more the ‘creative class’ middle class like himself, who enlisted as ordinary soldiers and officers:
It’s wonderful, in a way, to think of these soldiers as Nietzschean supermen, who marched off to war under the emprise of no dreams, no hopes, and and no delusions, completely nihilistic and yet ready to give their lives for nothing (or is it?). But I think this change in attitude came during the war, not prior to it, and it took some time to process. My reference for this is “Voyage au bout de la nuit” and some other WWI literature I am familiar with.
More realistically, even in small doses, indifference to cruelty and lack of empathy and introspection probably helped, while an artistic sensibility didn’t.
Edit: I’ll try to read Hearbreak House, though can’t recommend reading “Voyage au bout de la nuit” to anyone.
It was not really a sale. There were various requirements before you were allowed to attain a certain rank, including some years of service in lower ranks, plus the agreement of the CO of whatever unit you wanted to be in. In addition to this, you had to give the army some money. If you were dishonorably discharged, you lost the money. If you died in service, you lost the money. If you resigned to take up another post, or a career that did not involve being shot at, the money was repayed.
So it was more like putting up a bond for good service to your employer than buying an office. (And there was a fixed price for any given rank and unit – it was not an auction.)
This insight is so clarifying– that socialism, whatever it may do for the working man, centrally serves the interests of the managerial and bureaucratic segment of the middle class.
Very conveniently, regardless of whether any given instance of central planning works well, or works poorly; whether any given wealth transfer reaches the right people, or the wrong ones; whether a new, compassionate social program helps the vulnerable, or has unintended consequences that harm them… the middlemen, the sociologists and administrators and think tank members, the educators and counselors and public health professionals, get to collect their money, influence, prestige and self-esteem either way. Plus, there’s the added benefit of getting to use “lack of compassion” as a weapon against hated competitor groups like the aristocracy and the franker capitalists.
In that sense, the Fabians’ classism sounds charmingly forthright: why support the poor in a violent revolution, when it’s so much more convenient to keep them around and pay ourselves for doing things to them?
Socialism’s main conceit is that all their predecessors’ predicaments stem from an insufficiently rigorous and systematic approach. And their calling, as they see it, is to fix things, using science.
This view tends to attract a certain kind of people, indeed.
Note: I don’t think science is to blame here (far from it), but rather the people who latch on to it.
Seems to me like an important missing piece in the class analysis of the Marxists is what the class interest of the bureaucrats entails.
I’M ONTO YOU!
I missed that…and now the paranoia strikes again.
>The Society helped introduce the idea of incremental democratic socialism – not just in the sense of Bernie Sanders, but in the sense of the entire modern welfare state.
Oh dear god…..
Request fewer comments like this
Request you know what socialism is before writing about it.
>implying that the current-day social-democratic welfare state isn’t a nineteenth’s century socialist’s wet dream
When did I imply that?
@apollocarmb
That’s the conclusion I draw from your two posts. Please help me understand what you mean, because apparently I can’t tell.
@Anonymous
Alexander implied Bernie Sanders is a socialist, hence “oh dear god”
@apollocarmb
Sanders says he’s a socialist. You may disagree.
@Anonymous And Joseph Stalin said he was not a dictator
@apollocarmb —
Not to put too fine a point on it, but how about less hand-wringing about how such-and-such is not true socialism and more talking about why it’s not and why that’s a bad thing? Most of this board is not deeply invested in socialist ideology.
This is nearly an identical discussion to one that’s already happened.
Pretty sure it’s happened before that, too. I wouldn’t have said anything if I thought there was a chance of this turning into the kind of discussion I mentioned on its own.
@apollocarmb
Is Sanders a social democrat? Yes. He openly admires the Nordic welfare states. Both self-description and third parties are in agreement.
Were the Fabians socialists? I would find it extraordinarily surprising if they, on the whole, weren’t.
Has the True Radical Program of the Fabians been implemented in the west almost universally? Yes, it has. Are the current-day left-wingers working incessantly on implementing even more radical policies, whereas their opposition works mainly to slow down the rate of the progressive radicalizing of society and government? They damn well are.
Therefore, I argue that not only is Sanders a socialist, EVERYONE in the mainstream of today’s western politics is a socialist.
One thing that David Friedman pointed out here has haunted me ever since:
A political movement needs to be a good social scene. Very few people sacrifice their spare time to fight for a big hard to reach policy goal that one person’s work will only make a microscopic contribution to.
But people *will* put in a lot of work if the work itself is socially rewarding. If you make friends and/or mates in the process, people will flock to your movement.
It sounds like the Fabians had that part down. Does your favorite movement?
Does anyone have a good example of a modern organization that is successful in this regard? I’m in NYC and it seems like this kind of group has to exist here, but I’ll be damned if I can find it.
Ideally, I’m looking for folks trying to shape the future of liberal democracies, in a classical liberal sense, and trying to appeal to people on both team red and team blue. I strongly believe this kind of project has the potential to grow as an alternative to the cronyism and intellectual bankruptcy of the two major parties while offering a more attractive platform than Trump.
“I used to post on Facebook, but I moved to SSC instead, because the conversations were more interesting and the people were more reasonable.” – David Friedman (paraphrased).
I think you may be in that organization. The main difference is, I think, that these days people argue online instead of in person, so it’s located on “the internet,” instead of “NYC.”
But Scott is trying to shape the future of modern liberal democracies (“SSC Endorses Clinton, Johnson, or Stein”), he is trying to appeal to both team red and team blue (well, team blue and team grey, at least; I’m not sure how many red readers he has), and people come to South Bay meet-ups (held in someone’s house!) and bring cookies.
I read this post as, at least partially, Scott going “So, I have all these readers. How do I turn them into a Force for Good? Let’s see, how did smart people do that in the past?”
I think you’re right, but it frustrates me to no end. I just don’t see this form of online conversation having a real impact without some level of personal connection. The adversarial collaboration thread is a great example, with plenty of healthy conversations, but it doesn’t look like a lot of them will result in an actual deliverable (hopefully I’ll be proven wrong on that front).
Unfortunately, I’m not sure the IRL SSC-related meetups on the west coast have been all that productive either (just judging by how people reference them on the site). Maybe the whole lesson from this Fabian discussion is that you need a generational talent like Shaw involved to have that broader impact. That’s not me either … but I would be thrilled to help out and bring cookies.
There are SSC meetup groups in a lot of places – you can find them via the Meetups tab above. If there’s not one near you, consider starting it.
We are having a South Bay meetup a week from Saturday–you are welcome to come and bring cookies.
Scott has some influence. I don’t think the rest of us do, as much as I wish it were true.
Anecdotally, I believe Occupy Wall Street revolutionized the (social) lives of many of the participants.
Not sure to what extent it achieved it’s policy goals.
Well, people are rather good at socializing even when you don’t intend them to. You also have to watch out so the social scene aspect of your movement doesn’t drag in a bunch of incidental things that turn other people off. I.e. you are supposed to advocate for free education, but everyone in your group has blue hair and listens to The Giffords. A newcomer who doesn’t care for The Giffords isn’t going to feel welcome, even if they care a lot about education.
What strikes me in all of this is what a shame the bottom line was written first. And whether or not that is inevitable for garnering any coordination in the first place.
Thanks for this. It’s very good as usual.
That sounds very similar to what I remember learning about the early Jesuits. They (or at least many of them) were supposed to proselytize in courts, influence the decisions of kings, etc. They learned esoteric philosophy and court politics and dressed nicely because that was what was required in order to do their job, and they are credited with (among other things) preventing the Protestantization of Poland.
Interesting comparison.
AS Byatt’s The Children’s Book is an excellent novel about some Fabians, and the artistic/social movements related to them in the early 20th century.
In order to determine whether the Fabians caused the social change, or the social change swept the Fabians along at the front of the wave, it seems like we need a few contrasting societies to compare them to… as well as perhaps a more specific timeline of “goals” and “changes” than Scott has laid out here.
My first instinct to look for a contrast might be in Scandinavia. They were not as badly mauled by the world wars as most of continental Europe and are often held up as the best examples of “democratic socialism”.
I do think as others have said that a lot of the stuff the Fabian’s pushed for was inevitable in a capitalist society that allocates political power through elections. As people get wealthier they’ll want more leisure, they’ll keep their kids in school longer and more of them will send their kids to school, etc. etc.
This isn’t universally true. Industry nationalization seems to have been a product of legacy war exigencies. But At least half of the Fabian project seems to me to have been normalizing free-lunch sales.
How Neoliberals managed to make their beliefs orthodoxy is *far* more interesting. The average voter is suspicious of free trade and dislikes open borders and mass immigration. (And I think there are good reasons to suggest this behavior is as natural as wanting free lunches) How did they create a culture among media elites and politicians where opposing these things [like the average joe does] becomes political suicide? How is has that counter-cultural behavior been so effectively enforced?
Because neo-liberalism is far from what Fabians , or for that matter even some of the Austrian School Thinkers/Classical Liberals were advocating for. Modern Liberalism enriches the capitalist class at the expense of workers , under the guise of economic freedom, etc… I would venture to say that even a thinker attributed to Neo-liberal ideas as Hayek would find much fault with the modern day version of “Liberalism”…..what good is advocating against a road to serfdom if the masters simply switch from Government Planners to Corporate Figures and their allies………
I think Bryan Caplan believes politicians don’t actually listen that well to voters because of how they fickle and forgetful they are. And neoliberalism seems like a natural backlash to some of the excesses of government overreach in the 60’s and 70’s. So it might simply have been inevitable.
Neo-Liberalism did get results, of a sort, for a while. in the 70’s the growth of Post War US economy and (some European economies) began to slow, so the status quo, as successful as it had been in many ways, was seen as failing. Hence the Reagan/Thatcher pushback. That being said, history is dialectical in many ways, and we have , in the past 10 years or so, seen the failure if you will, of the Neo-Liberal trend.
I’ve seen this “Look how progressive rhetoric mirrors this failed group” thing a few times now, but is that sort of confidence actually exclusive to failed groups? I would be shocked if (most) successful movements like women’s suffrage or civil rights didn’t have similar sentiments of inevitability.
But… they didn’t fail? Isn’t that the point earlier in the post?
I was focused on their feelings of Socialism being the obvious “next step”:
Which didn’t particularly pan out (although “fail” is perhaps a strong word when the expectations were that absurdly high). But I’m wondering if there were similar feelings of inevitability in the more universally successful movements.
Perhaps it’s a failure to understand that via the Hegelian dialectic the follower to thesis capitalism is not antithesis communism but synthesis neoliberalism.
A lot of histories of the 1920s and 1930s describe the rise of fascism as feeling inevitable to many people at the time. Spain went fascist under Franco. Italy under Mussolini. France and England must have seemed like just the next dominoes.
(Of course, after the war, nobody wanted to be associated with the movement, except for a few eccentrics.)
I strongly encourage the modern Fabians to follow their predecessors pristine example, and take as long as they can for the implementation of any goals. Preferably centuries.
Depends on whether the powers that be reform in time to prevent mass movements from gaining momentum and power. After all, this very idea is a large part of why the Fabians were successful. In countries where they held influence , they were a bulwark against Bolshevist style revolutions, which are bloody affairs, as we all know.
Request fewer posts like this in the future
This seems like an own goal to me. The Fabians clearly influenced modern social programs, but the reality looks less as if the welfare state is the forbear of the inevitable swallowing up of capitalism bit by bit, and more as if the welfare state actually helps capitalism on the margins, which is kind of reflected in Big Tech being so interested in the idea of a basic income guarantee, especially in relation to automation.
Slowly nationalizing the economy could lead to socialism, but it seems like the parts of the Fabian agenda that became a permanent fixture of Western society were the “make things nicer for workers” parts, while the structure of ownership was largely left intact, incrementally or otherwise.
So it sounds like they “succeeded” by making socialism a much more wooly idea.
You must remember that their “ultimate aim” was “the reconstruction of Society in accordance with the highest moral possibilities”, not “socialism for socialism’s” sake. So perhaps they would not be so heartbroken about it.
Railroads seem to be something of a perennial fixation of socialists. I’ve been thinking about why that’s so, and the best answer I’ve come up with is along the lines of “Seeing Like A State”: railroads are the most legible and rectilinear form of transportation*, traversing fixed routes at set times.
*At the other end of the spectrum, you have small ships and boats whose navigation requires a great deal of metis and have often been used to evade the authorities
Probably the same reason nerds tend to find railroads fascinating.
Weren’t railways a really central part of the 19th century economy? I don’t think any explanation is needed for why socialists focused on it then; as for why they focus on it now, maybe it got imprinted on the movement during its formative period.
Definitely, though sea and river shipping was comparably important and seems to get much less time. (Apart from “build more harbors” guy.)
My offhand guess would be that railroads were comparably influential, but much newer. There are standardization and oversight problems in shipping (“make sure your boat can dock at my pier”), but they were old and largely solved by fiat or cooperation or tradition already. Problems like “what gauge to use, and what to do where gauges don’t match?” were important and unsolved, which offered an inviting place to call for oversight by the state.
Also, nationalizing rivers isn’t so easy a concept. You generally can’t make them flow in neat, rectilinear grids. They don’t usually require much in the way of maintenance or operational oversight. And they typically come supplied with lots of non-state riverboats whose owners are accustomed to going about when and where they / the market pleases, with “this here is The State’s river and you filthy capitalists are Not Allowed to use it!” being an obviously heavy-handed intervention compared to making the same claim of a railroad that the State actually built or commissioned.
Rivers require substantial effort and maintenance if you’re going to use them for anything less trivial than pleasure craft or Jim Bob taking a rowboat full of crawfish into town. The Columbia was essentially impassible to riverboats and required transloading at many points until locks and canals were built (and then to have larger tows and hydropower we took the Indians’ sacred waterfall and flooded it to 70′ deep).
The Mississippi has a very large number of locks and dams to permit commerce, and the channel is continually dredged. We just finished a $3 billion project* to replace old locks and dams to maintain navigation on the Ohio.
The Old River Control Structure exists solely because without human intervention the navigable river channel will move from the Mississippi to the Atchafalaya and strand the Port of New Orleans.
And, of course, prior to railways canals were the new transportation hotness.
People who transport goods on Inland Waterways do have to pay a tax on the fuel they use while doing so–I don’t know what the compliance rate is, but if you’re in the business of moving stuff by water you will not enjoy life if the IRS finds out you’re not accounting for the fuel you used properly.
* I’m not claiming that the vast sums of money spent on this was advisable–I for one am going to be glad once that project stops sucking up every free civil works dollar–but only that it was a thing the US government did.
The oldest of the locks on that list was opened in 1907. I distinctly recall reading many stories suggesting that there was commerce on the Mississippi in the mid-19th century, and for that matter existence of New Orleans is hard to explain without extensive Mississippi river commerce going back to the early 18th century.
So, no, these locks do not “permit” commerce. They may substantially enhance commerce, yes, but they aren’t necessary for commerce to occur.
And if you go to a place where many small businessmen are conducting profitable commerce, build an enhancement, and then say “All your river are belong to us; filthy capitalists get out, from now on river commerce shall be handled by the Ministry of Rivers”, you’re going to be voted out of office any place there is still meaningful voting going on.
You do understand that there is a fundamental difference between taxing a thing and nationalizing a thing, right?
Railroads, people will usually support nationalizing because otherwise they look like (and often are) artificial private monopolies and nobody likes a monopoly. Navigable rivers, almost always the most you can get away with is taxing them to support your enhancements, because it’s pretty obvious that a bunch of people were competing fairly to provide a useful service using a natural resource your State didn’t create so kicking them out looks like (and often is) a naked power grab.
Lots of governments have done this sort of thing. The usual result result seems to be rampant smuggling, which isn’t all that practical on a railroad system.
I can think of a couple of explanations. First, railroads were a lot more visible to the average person. There’s a railroad through the town. You go by the train station every day. You get on the train a couple times a year to go visit somewhere. Whereas unless you had some connection to shipping, it was probably out of sight, out of mind. You didn’t go near the docks, because it was nasty and smelly and full of longshoremen. By the numbers, shipping was and is more important, but the visible transportation gets the attention. It would be pretty easy to live in LA your whole life and never go near the port, one of the biggest in the country. (Note that airlines replace railroads fairly neatly in this picture, with the same type of anger. But there’s one big difference.)
Which brings us to the second reason. Railroads are a lot more monopolistic than shipping lines (or airlines). If your town only has one railroad, you’re at the mercy of whoever runs it. Nobody owns the ocean, and while the port could try to play games, it’s a lot easier to build a pier somewhere else than it is to run a second railroad. This also applies at least partially to airlines. Some airports have quite cozy relations with certain airlines, but there is some competition. Also, the airport is already nationalized, so that doesn’t work as a solution.
I think you’re mostly right about the initial emphasis, however, I think it’s also worth considering that transportation infrastructure is traditionally heavily influenced or even by controlled by the state. Any anarchist can tell you how often an objection is made “but who will make the roads?” But prior to railroads, states were the primary builders of canals and long distance roads, and since then airports are often government owned too. Natural monopoly is often cited but given that there were a multitude of railway companies in the US in the 19th century and a number of train companies in modern Tokyo, that doesn’t seem exactly right. But consider what long distance roads, railroads, canals, and airports are used for. 1) Communication (declining some with telegraphs/phones/internet, but in person communication can still be important), 2) trade, 3) the military. I’m currently listen to David Graeber’s Debt, and he might note all of those would be primary concerns of the state. Traditional human pre-state societies tend to have fairly low need for long distance communication or the coordination that communication enables. Intergroup trade is only a small part of non-state societies and states encourage markets. And warfare, well only states war at a level that really needs a lot of infrastructure. Railroads were a new technology in an area traditionally dominated by government interests. Private companies controlling the infrastructure would be particularly worrisome to people who fundamentally believe in the importance of state power, which is what the Fabians represent.
Yeah, I can see a founder effect being involved. Privatization of rail in the UK feels like it was much more controversial than parallel changes in other industries. So maybe Fabian descendants saw that as an undoing of part of their legacy.
Another argument would be that railroad nationalization is a very different project from railroad construction. It’s something of a natural monopoly, and the US really did see a lot of wasted time and money doing nonsense like “unloading the train car with 6 foot gauge, and reloading all its contents onto the adjacent train car with 5’6″ gauge”. So it was a deeply influential mode of transit which – totally aside from its legibility – cried out for some form of standardization and oversight.
Of course, those two arguments are obviously compatible; it’s often hard to draw a clear line between “let’s have more of this because it’s legible” and “given that it’s here, let’s make it orderly”.
Based on a little understanding of 19th century history and a lot of games of Civilization III-IV, railroads seem to be a very important tool for state action. If you are a 19th century ruler and want to move a lot of troops from here to there, or get stuff from mine A to factory B, railroads seem like a great way to do it.
It’s worth noting that tin the UK, the physical railways themselves are currently owned by Network Rail, a public sector body.
The train services (outside of London) are then operated by a number of private enterprises.
This part in particular sounded to me a lot like Moldbug’s
or am I stretching too far?
Not at all. This is directly relevant to the impending Death Eater takeover of society.
Not sure whether it’s really the same, but I definitely thought of it too.
Yes, but better, because we have an example of what “become worthy” looks like. Be a likable smart looking smarty and hold lots of dinner parties seems to be a big part of it.
As G. A. Cohen put it:
The link this is actually taken from seems to have been taken down. Here’s an archived version: https://web.archive.org/web/20141021001437/https://www.giffordlectures.org/Browse.asp?PubID=TPEGAL&Volume=0&Issue=0&ArticleID=8
Thanks for notifying me. It now appears to be at https://www.giffordlectures.org/books/if-youre-egalitarian-how-come-youre-so-rich/6-equality
Just #4 alone is doing most of the work there.
I think there’s a big question underlying a lot of this, which is, basically, how do you create an organization or movement that can both A. gain sufficient power to accomplish things, and B. not have its goal, and its ability to discern whether it’s achieving that goal, perverted.
That is to say, it’s easy to gain power if you’re willing to go full tribal. But to do this would be to make Boromir’s mistake, because to do so will corrupt you. “You” aren’t a constant — sure, there’s experiential or organizational continuity there, but if your goals are changed or your rationality is severely compromised then the you who achieves power is not really the same as the you who set out to do so, making your original efforts counterproductive.
The problem is that it seems like just about any way of expanding or gaining influence tends to accelerate the collapse into tribalism. If you grow in numbers, you’ve likely got an Eternal September on your hands. If you grow in power, you become a target for people who want to eat your organization and change its real goal to their personal glorification.
Like, the examples given — the Fabian Society, the neoliberals — make one think of political examples. But to a large extent we don’t even really know how to build effective companies, how to build companies that can avoid pathologies like this. (They don’t collapse into *tribalism*, exactly, but they can slowly fall into that broader phenomenon that I’m really using “tribalism” as metonymy for. 😛 ) Or, perhaps a few people do, but they don’t know how to teach it. Collectively we just don’t really know how to build long-term effective (and by that I mean effective at their original goal; one is not effective if one has been perverted) organizations of any sort. (The market works because companies die!)
To have a solution to this problem — and not just a solution, but a transmissible solution — would alter the world in truly radical ways. It would accomplish a hell of a lot more than just better government policy. But there’s a reason that we do not in fact have such a solution at this time…
It might be interesting to contrast the significant real-world success of Hayek, Friedman, Reagan, Thatcher et al. with the, so far as I can tell, much more limited impact of the US Libertarian Party.
What strikes me as noteworthy about the Libertarian Party is that, back when no one had heard of libertarianism, the party was run by brilliant, inspiring figures like Murray Rothbard, Harry Browne, and Ron Paul. Now, libertarianism and its ideas are much better known, yet the actual LP picks… well, Gary Johnson and Bill Weld.
Maybe the smarter libertarians just saw the futility of fighting Duverger’s Law and the inherent contradictions involved in being a political party that opposes politics such that all the “cool” libertarians moved on to other strategies like agorism, podcasts, and the like. Yet insofar as it has grown in popularity, like 100 fold (am I exaggerating?), you would still expect it to find better, not worse representatives in the political sphere.
Maybe it is about the social scene? Say what you will about Ayn Rand, but she generated a (culty) social scene around herself. Or about the newness of the ideas that creates a heady excitement hard to replicate once it goes more mainstream?
Margaret Thatcher explicitly referenced Hayek at least once in her publicized speeches, that I am aware of. Given that the Thatcher , and Reagan in the US legacy is quite divisive, combining adoration with quite a bit of hatred as well, the corruption of Neo Liberalism, and especially its connection with both the 2008 financial crisis and Job Loss in the US (not sure about UK), I would say that modern day Libertarians are somewhat compelled to distance themselves from Hayek, Freidman, et. al.
I would say that there may be a resurgence in more of a form of anarcho-Libertarainsim, especially in an online context, but Corpora-Libertrainaism isnt exactly the most popular thing right now, at least among the masses
Reagan is not controversial among US Republican voters. I don’t think the LP would need to distance themselves from Reagan to enjoy electoral success.
Modern day Libertarians are not compelled to do anything, because they are not in a position to win much of anything regardless, but they certainly do NOT distance themselves from Hayek or Friedman
The opposite, if anything. Friedman, Hayek, and other mid-century fellow-travellers are the heroes of the movement.
I didn’t find Rothbard, Browne, or Paul all that brilliant or inspiring (tho Rothbard was a good deal brighter than the other two).
Certainly Hayek and Friedman were in an altogether different class – both first-rate intellectuals.
Weld is a capable and inspiring guy (now past his prime) but the LP is composed of people far more interested in ideological conformity than winning political contests. Weld barely got nominated, and then only because Johnson insisted on it.
There seems to be something inherently contradictory in getting people who want government to have less power over people’s lives to spend lots of effort getting government power.
Hayek and Friedman succeeded because they stayed out of practical politics; Reagan and Thatcher because they allied with traditional conservatives.
This reminds me of an EconTalk episode with Dan Pallotta about charities and non-profits. He argues that people have a misplaced focus on low overhead and administrative costs as a sign of an effective charity. Paying more for talented executives and investing in advertising can lead to a bigger donation pie that is targeted on the cause more effectively, even though a higher percent of donations is spent on overhead.
Scott,
Thanks for this review and your insight. As a reactionary traditionalist, it never occurred to me how obvious socialism must have appeared at the time to intellectuals, due to their earlier understanding of economics as well as the social order of the day.
I’m more of a distributist, myself, seeing the binary between capitalism and socialism to be rather tired. But that’s neither here nor there.
Regarding historical inevitability. I think it was perfectly possible that Georgism and its derivatives could’ve taken over half the political sphere instead of Marxism and its derivatives.
Georgism was the bigger ideology in many countries right up to WW1.
Absolutely — I can imagine a counterfactual where this happened. Although, I can’t really imagine one where Georgism became the dominant thought and WWI still happened. Georgism would be easier to implement with the old regime intact. Post WWI Europe saw a lot of new countries more able to experiment with radical ideologies. Georgism isn’t too radical; royal titles and the like were, in law, derived from the land. Georgism, through taxation and redistribution, tires to make the land’s inherent productive capacity benefit all directly, rather than rely on the sense of nobless oblige on the part of the local lord.
Based on my recent experience with the DSA (Democratic Socialists of America), they seem like they want to be the modern version of the Fabian Society. The DSA is a very big tent. They will allow anarchists and Marxist-Leninists to participate as long as those individuals do not consider themselves beholden to the party discipline of another party. (So, if you are just an unaffiliated Maoist or Stalinist, you are allowed to say your piece as long as you are not too obnoxious about it).
Another Fabian-like organization: The Socialist Party of Great Britain. They focus almost exclusively on education and training their members for public debate in parks and the like. They don’t waste time on practical campaigns to ameliorate capitalism (including trade-union struggles), nor do they run candidates in elections (although their platform states that they would like to see socialist ideas receive a majority of parliamentary support before they are attempted to be put into action).
Personally, I think there is also a place for what I would call a “socialist church.” “The Church of Red Tradition.”
Here are the facets I would include:
1. A single article of faith: that we will have Star Trek-like luxury communism someday, and that this will be achieved through human action of some sort. The Church itself would be non-denominational (i.e. agnostic) about specifying exactly what sort of human action will bring that about; members are free to debate that among themselves.
2. An emphasis on the following values: hard work, (following the example of the working class that has built our world) and education (following Lenin’s example and advice to “learn!”).
3. Recurring social events (on either a monthly or weekly basis) involving the following aspects:
3a. Some sort of practical good works.
3b. Athletic exercises/games/drills of various sorts.
3c. Study of the canon of Red Tradition (would include socialist history, the labor theory of value, socialist/communist/anarchist political ideas, and also occasionally non-socialist subjects that intersect with the canon of Red Tradition, such as classical political economy (Adam Smith, etc.), philosophy, etc.
3d. Singing.
3e. Socializing (with each other, not the means of production, haha).
3f. Holidays.
Most importantly, the Church of Red Tradition would not itself take a stance on any concrete political or economic or cultural issue, although its members would be free to belong to whatever outside, bona-fide political or economic or cultural organizations that they cared to.
Note that members of the Church would NOT be obligated to believe in the labor theory of value, socialist theory, socialist interpretations of history, etc. The only obligation is that they believe in the eventuality of luxury communism at some point, and that they be willing to participate in the study of the canon of Red Tradition (even if they choose to study that canon critically, much as some Jews might study the Torah critically).
The Church of Red Tradition would, in other words, define its membership not in terms of professed belief, but rather in terms of participation in the community and its rituals and awareness of its history. Kind of like how a Jew might consider him/herself as belonging to the Jewish nation even though he/she might not personally believe in the Torah or Yahweh, similarly with the Church of Red Tradition and most of the typical tenets of socialism.
My proposal would be to start each weekly service with a singing of the English version of the Warsawianka 1905. Many of the best socialist songs are (in my opinion) in German, so members would be encouraged to learn some song lyrics in the original “Latin” as opposed to their vernacular. (Think of it like the awe and mystery of Catholic services that incorporate Latin). And each service would end with this modified version of the Soviet Anthem:
United forever in friendship and labor,
Our noble tradition will ever remain,
Secure in the knowledge that we are the authors
Of stories and futures of history’s acclaim.
Long live our cherished world to be,
Liberated creativity!
And long live our memory of those gone before!
Tall are the shoulders of the past,
Strong were those shoulders built to last,
To carry us closer to freedom and more!
Through June days and dark nights from Paris to Russia
And so many struggles so painfully shared
Yan’an, Catalunya, Shangai, and Rojava
They glimpsed a new world, they their freedom declared!
Long live our cherished world to be,
Liberated creativity!
And long live our memory of those gone before!
Tall are the shoulders of the past,
Strong were those shoulders built to last,
To carry us closer to freedom and more!
Nothing will save us if we should falter
Except for each other and lessons of yore.
Let each one among us rise up to the challenge
To be our own masters in mind, work, and more!
Long live our cherished world to be,
Liberated creativity!
And long live our memory of those gone before!
Tall are the shoulders of the past,
Strong were those shoulders built to last,
To carry us closer to freedom and more!
The closing comments in the article about neoliberalism regarding the GFC are incredibly, maybe even deliberately, one eyed. The evidence that the GFC was caused by derivatives market risk being offset by knowledge of the probability of government bailout is overwhelming – that can hardly be called a “feature” of neoliberalism.
Liberalised profits and regulations with socialised losses is hardly a liberal view…
Having now read Kerry Vaughn’s essay, my view of it is less positive than Scott’s.
To begin with a terminological point. I have lived my life more or less in the center of the movement Vaughn describes. I do not believe I have ever heard anyone who is part of it describe his views as “neoliberal.” That is, in my experience, terminology used almost exclusively by critics. Members of the movement refer to their ideas as “liberal,” “classical liberal,” or “libertarian.”
Hayek was an important part of the movement but he played no significant role in the Chicago School of Economics. His writing after The Road to Serfdom was basically in philosophy and political theory.
Actually students of Arnold Harberger.
The presentation makes it sound as though he is quoting from “neoliberal” sources, but “Winning Ideas” is, like his paper, something written by people who are not “neoliberal,” obviously critical of “neoliberalism,” hoping to get ideas from the “neoliberal” success. That is, in particular, the source for:
Which reads rather differently if one realizes that it was written not by people within the movement but by British academics hostile to it. No attempt to contrast the “vast” amounts of money in support of classical liberal ideas with the expenditures of the Rockefeller Foundation et. al. on the other side of the argument.
The author writes:
That is a true statement, but he misses the crucial geopolitical events, which were not U.K. politics but the failure of central planning in countries such as India contrasted with the success of relatively free market policies in Hong Kong, Taiwan, South Korea, and Singapore. Also the stagflation episode in the U.S., which he mentions elsewhere in the essay.
The author offers no examples of “neoliberal” thinkers supporting government guarantees for financial institutions. As best I can tell, he is using the “neoliberal” label to imply, without saying, that the supporters of classical liberalism won the ideological war hence are responsible for current institutions and to be blamed for anything wrong with those institutions even when what the institutions are “in tension with” (meaning inconsistent with) “neoliberalism.” He does not seem to have noticed that, despite the successes of the ideas, the fraction of national income spent by the U.S. government has not declined, nor has the minimum wage been abolished, nor has the government stopped regulating a wide variety of economic activities.
“Similarly, there is a strong tension between the neoliberal’s proclaimed defense of individual liberty and their support of undemocratic regimes responsible for massive human rights abuses, such as Pinochet’s.”
The author offers no examples of support of such regimes, beyond the fact that Chilean students trained at Chicago were instrumental in Chilean economic policy. That does not imply that they supported the Pinochet coup any more than my father’s willingness to offer economic advice to communist governments implied that he supported them.
The attempt to draw lessons from the success of the movement to revive classical liberal ideas is interesting, but the piece as a whole is not a reliable picture of the movement.
Why are you people using a loaded buzzword instead of a neutral term? We live in the age of social democracy, or mixed economy. “neoliberalism” is just a pejorative used by anti-economic reactionary pseudo-intellectuals and idiots who write for The Guardian. There is no “neoliberal” economic theory. The people who use this term have never picked up an economic textbook in their life. It is extremely important to use accurate terminology, instead now people are using progressive slang that originated by Marxist revisionist David Harvey, which is cited in the article. It re-writes history as to give off the false impression that economics was dominated by libertarians. What evidence do the conspiracy theorists provide for this thesis? Two political figures who were not left wing is not “evidence”. Even when the term is used non-economically, the term is still vague, and recently even some academics (one of whom a Marxist himself even!) criticized the usage. [1-4]. It is almost never used in a neutral let alone positive sense, and often used by populist demagogues [5-7]. Also contrary to popular myth, we do not live in an age of libertarianism/low government spending[8-10]. Also, all top economist have little “free market fundamentalism”[11-12].
How can anyone defend this term? You are actively helping form misconceptions and mythologies, and even outright lies.
[1]https://olivermhartwich.files.wordpress.com/2015/02/neoliberalism.pdf
[2]http://people.bu.edu/tboas/neoliberalism.pdf
[3]http://eprints.lse.ac.uk/60471/1/__lse.ac.uk_storage_LIBRARY_Secondary_libfile_shared_repository_Content_Venugopal,%20R_Neoliberalism%20as%20concept_Venugopal_Neoliberalism%20as%20concept_2015.pdf
[4]https://sci-hub.hk/http://journals.sagepub.com/doi/abs/10.1177/0309816816678583
[5]http://nymag.com/daily/intelligencer/2017/07/how-neoliberalism-became-the-lefts-favorite-insult.html
[6]https://patricknelson750.wordpress.com/2015/01/06/neoliberalism-is-a-conspiracy-of-the-rich/
[7]http://www.socialistregister.com/index.php/srv/article/view/28585
[8]https://ourworldindata.org/public-spending
[9]https://data.oecd.org/gga/general-government-spending.htm
[10]https://data.worldbank.org/indicator/NE.CON.GOVT.ZS
[11]https://econjwatch.org/articles/the-policy-views-of-american-economic-association-members-the-results-of-a-new-survey
[12]https://econjwatch.org/articles/sense-and-sensibilities-myrdal-s-plea-for-self-disclosure-and-some-disclosures-on-aea-members
Put this way:
There is a clearly identifiable movement in late 20th century and early 21st century economics and politics. Let us try a sort of extensional definition- list things that fall into the category:
“Ronald Reagan and Margaret Thatcher. Globalization and free trade. Rejection of pacifism in the international order, if not necessarily an active embrace of war. Supply-side economics and the belief that the developed world is to the right of the maximum on the Laffer Curve. Closer public-private partnerships between the state and large corporations, up to and including privatization of former government services. Failing city governments being supplanted by ’emergency managers’ with corporate experience. Belief that austerity should be used to solve recessions, rather than Keynesian stimulus pending.”
Now, all of this is, I think we will have to agree, a thing. There exists this collective political body that can reasonably be identified.
As such, we really, really are going to need a name for it. It’s unreasonable to ask people to see a strongly active movement that has taken control of entire national governments for a decade or more at a a time, and weakly mumble “those guys who do that thing we don’t like a lot.”
“Neoliberal” is that name.
It kind of works now, but it doesn’t work historically, because it is the product of two entirely separate movements.
The first is the one David Friedman describes above, which developed the free-market ideas through the seventies and eighties (and probably before). It had large impact in the eighties. It was never described as neoliberal, either by itself or by others, and it’s really confusing to use the term in reference to that movement
The second movement is the acceptance of a watered down — but still recognisable — set of those ideas by the centre-left and then the centre-right (the centre-right had previously been its main opponent). That was called, at the time, neoliberalism, and recognised as something new, though the free-market movement had been around for decades by then, and had been most visible years previously. It was paired with a strong rhetorical argument for justice and progress, including a strong emphasis on “democracy promotion” in post-cold-war foreign policy.
It is bizarre to label Reagan or Thatcher as neoliberals, and before today I have literally never heard anyone do that. Blair and George W Bush are neoliberals.
Blair and GWB are in the past now, and their neoliberalism is now largely the mainstream consensus. The institutional successors of the free-market libertarians of the eighties have, somewhat playfully, taken on the name as they push for a slightly less watered-down version of their original ideas than has survived into the mainstream. That was a distinct rhetorical move taken on by Sam Bowman, then of the ASI, in 2016. So right now, it is more reasonable to speak of free-market ideas as neoliberal than it would be to attach the label to Thatcher or Reagan (or David Friedman).
It’s all over the place, including WP:
https://en.wikipedia.org/wiki/Neoliberalism
I quote from the Wiki article:
That describes a view that the people the article discusses, such as Hayek and my father, strongly disagreed with, since they were classical liberal opponents of the idea of a strong state “guiding” the market economy.
As per my previous post.
The structure of the argument:
1. Neoliberalism means support for the sort of mixed economy that is now the norm in the developed world.
2. Redefine it to mean a set of ideas, classical liberalism, which are inconsistent with many of the features of that system and which have been adopted by no modern society.
3. Blame those ideas for anything you don’t like about modern developed societies.
From Simon’s post, ideas he includes in neoliberalism that are outside of or inconsistent with the classical liberal position:
I have to wonder how much the “fiscally conservative, socially liberal” descriptor has given people a deeply skewed understanding of what capitalist libertarianism entails, to a point where F. A. Hayek and Milton Friedman would somehow get lumped together with Reagan and Thatcher. If you consider anyone who’s fiscally conservative and socially liberal to be a libertarian, then libertarianism must seem like the dominant ideology of the modern age, when society is very rapidly becoming more liberal on social issues while governments simultaneously move rightward on economic issues. (Really, is there all that much difference between a moderate-on-social-issues conservative like Kasich and a moderate-on-economic-issues liberal like Clinton?)
The problem is, while capitalist libertarianism is both fiscally conservative and socially liberal (at least broadly speaking), it’s also an ideology centered around upholding civil liberties, rejecting war and militarism, and opposing authoritarianism in all its forms. The current neoliberal system – with its endless military interventions and its draconian security policies and its increasingly omnipresent surveillance states, with its crony capitalist economic system that makes a mockery of the free market by allowing power to be concentrated in the hands of an increasingly small political-corporate elite – cannot truly be considered libertarian in any meaningful way, unless you deliberately ignore every aspect of libertarianism but the fiscal conservatism and social liberalism.