Capitalism and Socialism: The Good, The Bad and The Ugly

A couple tidbits I found interesting this week on the topic of inequality: First, I started reading Walter Scheidel's "The Great Leveler", which is an historical study of inequality from ancient times until today. I mentioned it in a previous post. In the introduction, he gives some interesting, and sobering, facts. First, as I mentioned previously, historically the only events that have significantly shifted inequalities have been world wars, violent revolutions, state collapse and mass deaths as a result of plague. As soon as one of those 'four horsemen' passes, inequality comes back again: "There is no repertoire of benign means of compression that has ever achieved results that are even remotely comparable to those produced by the Four Horsemen."

Next, he points out that the current billionaires in the States make about 1,000,000 times more than the average American, but adds this for perspective:

So have the rich simply kept getting richer? Not quite. For all the much-maligned rapacity of the "billionaire class" or, more broadly, the "1 percent," American top income shares only very recently caught up with those reached back in 1929, and assets are less heavily concentrated now than they were then. In England on the eve of the First World War, the richest tenth of households held a staggering 92 percent of all private wealth, crowding out pretty much everybody else; today their share is a little more than half. High inequality has an extremely long pedigree. Two thousand years ago, the largest Roman private fortunes equaled about 1.5 million times the average annual per capita income in the empire, roughly the same ration as for Bill Gates and the average American today. For all we can tell, even the overall degree of Roman income inequality was not very different from that in the United States.

Then there's this, which JBP tweeted today:


As some of the commenters point out, even Marx agreed that capitalism was better than feudalism. :P There can still be great inequality, but those on the bottom have more than those on the bottom used to have.

And last, I started listening to the audiobook of Murray Rothbard's "The Progressive Era" (The Progressive Era | Murray N. Rothbard), which is an analysis of the late 1800s and early 1900s in the US. Rothbard was an Austrian economist, and the preface gives an idea of what the book is about:

The aim of this proposed book is to trace the origins of the current welfare-warfare state in America, in what is loosely called “The Progressive Period,” from approximately the mid-1890s to the mid-1920s. Briefly, the thesis is that the rapid upsurge of statism in this period was propelled by a coalition of two broad groups: (a) certain big business groups, anxious to replace a roughly laissez-faire economy by a new form of mercantilism, cartelized and controlled and subsidized by a strong government under their influence and control; and (b) newly burgeoning groups of intellectuals, technocrats, and professionals: economists, writers, engineers, planners, physicians, etc., anxious for power and lucrative employment at the hands of the State. Since America had been born in an antimonopoly tradition, it became important to put over the new system of cartelization as a “progressive” curbing of big business by a humanitarian government; intellectuals were relied on for this selling job. These two groups were inspired by Bismarck’s creation of a monopolized welfare-warfare state in Prussia and Germany.

The big government created by this business-intellectual partnership had important repercussions for all aspects of American life, in addition to the cartelized and regulated economy. For one thing, the drive of pietists and compulsory “moralists” could now be foisted on the American public in the name of the newly burgeoning medical “science.” The result: Prohibition, antisex laws, antidrug laws, and Sunday blue laws. Another result, which made heavy and effective use of the “morality” theme, was the business-professional drive to centralize and take over the nation’s cities, thereby reaping good government as against the wicked and corrupt old urban machines — which were responsive to poorer and immigrant groups. One of the major aspects of this urban centralization was to centralize the public school system, and force children into them, so that the immigrant Catholic groups would be “Christianized” and be inculcated in the values of the American State and the new system.

In foreign affairs, the new partnership of government and business meant a substitution of a new American imperialism for the older roughly “isolationist” and neutralist foreign policy. The U.S. government was now supposed to open up markets for American exports abroad, use coercion to protect American investors and bondholders overseas, and seize territory on behalf of these aims. It was to be willing to go to war on behalf of these aims. The increasing militarism also meant heavy government contracts and subsidies for favored arms manufacturers.

A third group, virtually created by the new system as a junior partner, was labor unions, which were weak until they were called to share the ruling power of the “collectivist planning” of World War I. Creating favored unions was an instrument of cartelization, as well as insuring worker cooperation in the new order. Partly to mold the immigrants more easily, and partly as a boon to labor unions, immigration was virtually abolished during and after World War I, fueled by the racism sponsored by American social scientists.

Thus, from a roughly free and laissez-faire society of the 19th century, when the economy was free, taxes were low, persons were free in their daily lives, and the government was noninterventionist at home and abroad, the new coalition managed in a short time to transform America into a welfare-warfare imperial State, where people’s daily lives were controlled and regulated to a massive degree. In this way, the coalition, inspired by Bismarck’s example and its success in World War I, was able to reach its apogee in Europe, in Mussolini’s “corporate state” and derivative political regimes. In the United States, its apogee was reached in Roosevelt’s New Deal and post-World War II America. ...

In the first chapters he covers the attempts to cartelize the railroad industry, as well as efforts to monopolize oil, iron and steel, sugar, and agricultural machinery. All these efforts failed, prompting big business to get in league with big government. Rothbard summarizes why they turned to government:

A typical example of the rapid rise and fall of the trust, peaking during the great merger wave of 1897–1901, was the National Biscuit Company. It was formed in 1898 as a great combination of three previous regional combinations, designed to monopolize the biscuit market, to purchase competitors, and to control competition by restricting production and raising prices. The result was disaster, as the National Biscuit Company admitted in a remarkable confession in its Annual Report for 1901. Announcing a complete change of policy from its previous aim of controlling competition, the Annual Report declared:

When we look back over the four years [since National Biscuit Company was founded], we find that a radical change has been wrought in our methods of business. ... [W]hen this company started, it was thought that we must control competition, and that to do this we must either fight competition or buy it. The first meant a ruinous war of prices, and a greater loss of profit; the second, a constantly increasing capitalization. Experience soon proved to us that, instead of bringing success, either of these courses, if persevered, must bring disaster. This led us to reflect whether it was necessary to control competition ... we soon satisfied ourselves that within the Company itself we must look for success.

We turned our attention and bent our energies to improving the internal management of our business, to getting full benefit from purchasing our raw materials in large quantities, to economizing the expenses of manufacture, to systematizing and rendering more effective our selling department; and above all things and before all things to improve the quality of our goods and the condition in which they should reach the customer.

It became the settled policy of this Company to buy out no competition ...

By the turn of the 20th century, in fact, businessmen had become disillusioned with trust combinations. In trust after trust, higher prices brought about by the combine simply attracted new and powerful competitors — and this after the trust had expended a great deal of resources in buying out previous competition.

Rockefeller found the same thing with Standard Oil. He was good at buying out his competitors, but it got to the point where people were setting up fake refineries just so Rockefeller would buy them. Standard never got to the point where they could lower production and actually raise prices. And years before the anti-trust dissolution, Standard was losing market share:

Specifically, Standard made two grave mistakes because of its deficient entrepreneurial skills after 1900. It failed to grasp the crude oil revolution, namely that more and more crude was being discovered in the Texas, Gulf, and California areas. Rooted completely in the Pennsylvania-Ohio oil fields, Standard only grasped the significance of the new oil discoveries late in the day. As a result, new firms such as Texas Company and Gulf Oil were able to stead a march on Standard. Secondly, Standard was the last major firm to realize that gasoline was replacing kerosene as the major petroleum product, a mighty shift occasioned by the two great technological industrial revolutions of the first decades of the 20th century: the shift from kerosene to electricity in providing light, and the growth of the automobile as the major means of land transportation. As a result, in 1899, 63% of total oil refined was kerosene; 20 years later, however, the percentage was only 15%.

Moreover, new independent refiners were attracted to the petroleum industry by Standard’s high profit margins.
Whereas there was a total of 67 refiners in 1899, they had more than doubled to 147 by 1911. The independents, furthermore, led Standard in various innovations in petroleum: in the concept of retail gas stations; in the discovery and production of petrochemicals; in tank cars and tank trucks for conveying oil.
 
Approaching Infinity,

Thanks for being our intellectual detective.

intellectuals were relied on for this selling job.

Specifically, Standard made two grave mistakes because of its deficient entrepreneurial skills after 1900. It failed to grasp the crude oil revolution, namely that more and more crude was being discovered in the Texas, Gulf, and California areas. Rooted completely in the Pennsylvania-Ohio oil fields, Standard only grasped the significance of the new oil discoveries late in the day. As a result, new firms such as Texas Company and Gulf Oil were able to stead a march on Standard. Secondly, Standard was the last major firm to realize that gasoline was replacing kerosene as the major petroleum product, a mighty shift occasioned by the two great technological industrial revolutions of the first decades of the 20th century: the shift from kerosene to electricity in providing light, and the growth of the automobile as the major means of land transportation. As a result, in 1899, 63% of total oil refined was kerosene; 20 years later, however, the percentage was only 15%.

Moreover, new independent refiners were attracted to the petroleum industry by Standard’s high profit margins. Whereas there was a total of 67 refiners in 1899, they had more than doubled to 147 by 1911. The independents, furthermore, led Standard in various innovations in petroleum: in the concept of retail gas stations; in the discovery and production of petrochemicals; in tank cars and tank trucks for conveying oil.

I am seeing this oil money as maybe the prime greed generating motivation for the control system. All these ME wars over the oil fields is becoming all too obvious to me.

Of course it would be a revolutionary change if we discovered or it would revealed to us that there are newer better energy sources of which the elite were not the main controllers.

This whole topic is an exploration of how we got here and where could we go if there were more STO intellectuals to have their input.

I think that is why Laura started a thread quite awhile ago that proposed thinking about a different better world.

Creating a New World:
I would like to start a discussion that focuses on Creating a New World.

I would just like for all participants to think about what is wrong with our world and what they would like to see happen to make it right.

There are a lot of things to which there are no simple answers. For example, I don't think that communisim, socialism, fascism or capitalism are the right way to go economically, but I'm not sure what IS the right way that would fulfill the needs of the majority of humans. How to separate what is essential to all, etc. Are there elements of each of those systems that are truly STO and if so, what? How to pull out what is useful and put it together?

I think it will be a very useful exercise to define things, to imagine things, to describe how things would be done in an STO world. Things like who decides things? How? Who owns things? How? Is there voting? How is it done? Who can vote?
Education... what is available to who and how? Who pays for it?

Social services: counseling, child-care, medicine, etc.

Literally every area of our society has been corrupted in one way or another, so how to re-imagine something that would really work? Re-think it, re-define and describe it?

Start anywhere. Maybe we should start talking about what is wrong with various systems and what could be done to fix them, if anything. If they are wrong at the foundation, what to replace them with?

In the above spirit I think this thread is on the right track. If we don't see what is wrong how can we get on the right track?
 
James Corbett just released a very interesting video on the history of minimum wage laws in the U.S.:


The full interview with Vigdor, linked in the text, is also worth checking out.

He cites the latest studies on Seattle's minimum wage raise experiment, and the conclusions are in line with what I posted previously from Thomas Sowell. While some do benefit (e.g., experienced low-wage earners trying to make a living), they also have the effect of pricing young and inexperienced workers out of the market. It also encourages business owners to lower the hours given to minimum-wage employees, to increase automation, or to shut down their business if they can't afford the labor costs.

And he also gets into the history of minimum wage laws in the progressive era (the subject of the Rothbard book I mentioned in my previous post). Basically, the original 'progressive' supporters of minimum wages did so for that very reason: they wanted to price the unwanted races/classes out of the market for the purpose of eugenics. It didn't have quite the dramatic effects they hoped for, but it DID result in blacks youths having a much harder time entering the job market, whereas previously blacks and whites were equally represented (as the Sowell quote showed). And if you price them out of the market when they're young, that makes it harder to enter the market as they get older. So sadly, we can't even say this was an unintended consequence of a well-intentioned policy...
 
I come across a neat little book (80 pages) called "The Doctrine of Association - A Plan for the Reorganisation of Society"

It's written by Albert Brisbane - wikipedia refers to him as an Utopian Socialist.


And it is based on and expands the idea's of Charles Fourier - another Utopian Socialist.


I'm only up to page 17 so far.

It basically talks about how 'associations' of families living together and share the land can be more industrious and provide for 'Attractive Industry' - those industries that are of benefit to the association as a whole, and time for the pursuit of arts and sciences.

It mentions a minimum of 30 - 40 families living in such an association. The takeaway though if reading between the lines is that Capitalism is basically dependent on dividing such associations where bottom line financial profit is the goal - an example given is that if you have one large kitchen that caters for all families, then the cost of infrastructure is lower and productivity is higher rather than having 30 - 40 kitchens with 30 - 40 cooks catering to smaller amounts of people.

The original link I followed to the book took me to archive.org

I note though that it is available on amazon.
 
Just watched the wonderful documentary O'Mast (it's on youtube, link below) about today's master tailors in Naples. It made me think of this thread and especially @Pierre's comments.

I think this documentary can provide a lot of perspective on this whole debate. It's a fascinating window into something that seems completely lost in the capitalist world (and of course was stamped out by the commies as well): true craftsmanship, fueled by a spiritual underpinning.

The example of the master tailors is fascinating because it's one of the very few areas where true master-level craftsmanship has survived economically - because those among the rich with some taste value them so much that they can thrive. I found it very interesting what they had to say, their ethics, what drives them and so on. It gives you a taste of just how much has been lost in the modern world where only cash counts and everyone got crazy and tasteless.

Here's the film:

 
Andrew Yang has been mentioned earlier in this thread. Looks like he finally shows his true colors:
Among many things, "Yang wants gov’t to “shape our system” to discourage meat consumption".

Basically a wannabe dictator.
 
This topic is discussed in the book by Nikolai Berdyaev (one of Putin's favorite philosophers) "The New Middle Ages"
Individualism, the atomization of society, the unbridled lust for life, the unlimited growth of population and the unlimited growth of needs, the decline of faith, the weakening of spiritual life - all this led to the creation of an industrial-capitalist system that changed the whole character of human life, its whole style, tearing human life away from rhythm. nature. The machine, the technique, the power it brings with it, the speed of movement it gives rise to, create chimeras and fantasies, direct human life towards fictions that make an impression on the most unreal realities. Is there much ontologically real in stock exchanges, banks, paper money, in monstrous factories that produce unnecessary objects or tools for the destruction of life, in external luxury, in the speeches of parliamentarians and lawyers, in newspaper articles, is there much real in the growth of insatiable needs? Everywhere a bad infinity is revealed, which knows no end. The entire capitalist economic system is the product of devouring and destroying lust. It could arise only in a society that finally (I am becoming more frequent from all Christian asceticism, turned away from heaven and exclusively surrendered to earthly satisfactions. It is absolutely impossible to think of capitalism as a sacred economy, it, of course, is the result of the secularization of economic life. In this system, true hierarchical subordination is violated material spiritual. The economism of our historical epoch is the violation of the true hierarchism of human society, the loss of the spiritual center. The autonomy of economic life has led to its dominance over the entire life of human societies. Mamonism has become the defining force of the age, which most of all worships the golden calf. And most terrible of all, that in this undisguised mammonism our age sees the great advantage of knowing the truth, of freeing oneself from illusions.Economic materialism formulated this most perfectly, it recognized the entire spiritual life of mankind as an illusion and deceit.Socialism is only the further development of industries ialo-capitalist system, only the final triumph of the principles laid down in it and their general distribution. The socialists take from bourgeois capitalist society its materialism, its atheism, its superficial enlightenment, its dislike for the spirit and spiritual life, its greed for life, for its successes and satisfactions, its struggle for selfish interests, its incapacity for inner concentration. Capitalism and socialism are equally accompanied by the decline and extinction of spiritual creativity, the decline of the spirit in human society. They do not arise from the soil of the decline of the spirit as a result of a long historical path of falling away from the spiritual center of life, from God.
The new Middle Ages will overcome the atomism of new history. This atomism is overcome either falsely - by communism, or truly - by the Church, catholicity. The new Middle Ages, like the old, is hierarchical in its structure. The new history denied hierarchism in all spheres. Man is not an atom of a qualityless mechanism of the universe, but a living member of an organic hierarchy, he organically belongs to real communities. The very idea of personality is connected with hierarchy, and atomism destroys personality in its qualitative originality. We live in an era when a free return to hierarchical principles is inevitable everywhere. Only hierarchical principles testify to the cosmic order of the universe. After all, communism, anti-individualistic, anti-liberal, anti-democratic and anti-humanistic, is hierarchical in its own way. He denies the formal freedoms and equality of the new history and develops his own satanic hierarchy. He strives to be a false church and false catholicity. And it is no longer possible to oppose communism with the anti-hierarchical, humanistic and liberal-democratic ideas of modern history; only a genuine, ontologically substantiated hierarchy, a genuine organic catholicity, can be opposed to communism. After all, even the old right-wing, conservative monarchist ideas that dominated the life of some countries before the war and revolution were individualistic ideas. They were based on aristocratic humanism, just as democratic humanism underlay the ideas of the left and the progressive. Humanistic self-affirmation underlay the monarchy of Louis XIV and XV, as well as the monarchy of Wilhelm and the Russian Empire. Against aristocratic, humanistic self-assertion, democratic humanistic self-assertion always rises, against absolute human monarchy - absolute human democracy. The tsar or the nobility have no more rights to power than the people, than the peasants or workers. Because there is no human right to power at all, any thirst for power is a sin. The thirst for power of Louis XIV or Nicholas I is the same sin as the thirst for power of Robespierre or Lenin. Power is a duty, not a right, and power is only right when it is exercised not in the name of one's own and not in the name of one's own, but in the name of God, in the name of truth. New time constructed the power as the right and was interested in differentiation of the rights to the power. The new Middle Ages must construct power as a duty. And all political life, based on the struggle for the right to power, must be recognized as unreal, fictitious, vampiric. There is nothing ontological in it.
And there must be a movement that counteracts the social entropy that has gripped modern democratic societies.
The spiritual foundations of labor have decomposed and no new ones have yet been found. Labor discipline is a vital issue for modern societies. But this is the question of the sanctification and justification of labor. This question is not at all raised either in capitalism or in socialism, which is not at all interested in labor itself. In order to live longer, the bankrupt peoples will perhaps have to take a different path, the path of limiting the lust of life, limiting the endless growth, needs and population growth, the path of a new asceticism, i.e. denial of the foundations of the industrial-capitalist system. This, of course, does not mean denying human ingenuity and technology, but means changing its role, subordinating it to the human spirit.We will have to turn to nature, agriculture, crafts in a new way.The city must come closer to the countryside.We will have to organize ourselves in economic unions and corporations, the principle of competition replaced by the principle of cooperation. The principle of private property will remain in its eternal basis, but it will be limited and spiritualized. There will be no monstrous private wealth of modern history. There will be no equality either, but there will be no hungry and perishing from need.
 
The race to the bottom is well exemplified by the story of the classroom's grade equity. There was an old 20th century joke which I think (but could be wrong) originated in the Soviet Union: "they pretend paying us, we pretend to work".
 

Karlyn Borysenko Went Undercover at a Socialist Conference… What They Were Teaching Will Shock You​

This time she went undercover to a Socialist Conference, blending in with these Social Justice Warriors in order to expose what they are propagating. Be prepared to have your mind blown with just how Socialist these Socialists actually are.



Some notes:
+ ''Fugitive pedagogy'' / ''Smuggler pedagogy'' (where a teacher from Seattle using video calling is teaching subjects that are banned in another state (like CRT in Florida)
+ The coded meaning of words for socialists (example: anti-white = anti-capitalist)
 
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