At the core (cont'd)

I've taken the liberty to edit the prior post slightly to clarify some concepts. This post, then, builds about that.

If democracy and capitalism are not tightly related, and if in the thinking of our nation, capitalism seems to be in ascendancy, but democracy seems only to be an adjunct (and a feeble one at that); we have to question how has democracy come to have such a minor role and why would we sacrifice it at the alter of "economic freedom."

Several pieces of this puzzle seem clear to me, and they form the beginnings of a fabric of political thinking which we see so commonly today.

The challenge of any government, but perhaps more so in a democracy, is that choosing solutions to the issues of the day is a difficult process. The more people who feel they are disenfranchised by political process, the more force government must use to maintain its power and status. Naturally, decision making and maintaining the authority of government becomes more difficult in times of dwindling resources. The resources include items of value (food, gold, tools, land, etc) but also commonly held beliefs (including symbols, knowledge and faith). When resources shift from the middle and lower classes to the upper classes, it takes no faith to understand that this shift erodes the resources by which government maintains its power and legitimacy.

Ironically, some political leaders gain in power by ensuring that resources are taken away from the masses. Sharon took power in Israel by insulting and threatening the Palestinians who intern lessened the sense of personal security felt by individual Israelis. By weakening Israel, Sharon justified his hawkish approach to the Palestinians just as a peaceful settlement was close to a possibility. It appears now that the majority of Israel's no long agree with this policy, and many wish that Palestinian lands weren't "settled" after the '67 war. But, we are still far from reaching the peace that could and should be in the middle east.

Closer at home, the combined efforts of the business community and the religious right has worked to destroy American's confidence in facts and science. Global warming is not a liberal conspiracy. It's not the work of a few fringe scientists. It is a reality and one with dire consequences that we need to face as a nation. But, the business community has worked hard to debunk science and facts whenever they are inconvenient to profit. There is no question that curtailing pollution has at least short term negative consequences on profits. Who, however, would consider this a worse solution than possibly eradicating the human race?

Very often the religious right has joined in these attacks. Recently some of the wingnut leadership has come out against accepting global warming as a reality or an issue. What's in it for them? We may never know. But one thing is clear. To the degree that science is undermined, faith becomes reinforced. And faith is the key to the control these leaders hold over their people. Make no mistake, power and money are key drivers for these leaders. If you doubt it, check out their life styles.

Democracy, to be successful, seems to require a variety of checks and balances. Power corrupts, whether its the economic power of corporations, the power of the military might, or power in government. Human (or perhaps better said: animal) nature has each of us protect our own interests against that of our fellows - very few among us can regularly claim to do otherwise. The distribution of power among us, especially related to organized human endeavors means that power will always be at risk of being mis-used. Positioning counterbalancing powers as a protection against corruption is the key that can allow a democracy to exist. Through all of this, we know that no democracy will be perfect. But we also know that without democracy, power tends to quickly filter up into the hands of a few who do not treat the rest of us very well. So, for all its warts, its sometimes economic inefficiencies, the sometimes impossible demands placed on it, and the weakness of human leadership, democracy remains the most likely social/economic organization to promote fairness to all people.

And here lies one of the fallacies promoted by capitalists and free-marketeers. Remember, capitalism is anti-free market (except for labor), and free-markets marginalize capitalists. So, these two concepts that hold each other dear are very different from one another.

The capitalist argues that markets are free and that the "silent hand" allocates resources and rewards without bias. As such, the argument is that the free market leads to fair results for all. The corollary to this is that the rich of the world deserve their riches, and the poor of the world deserve their misery.

This, of course, is a lie; but to understand it requires that we peel back the layers of its logical onion. First, markets generally aren't free, so one can't argue that resources are allocated without bias. Second, it can easily be established that rewards do not accrue in some algebraic manner from combination of ones intelligence, cunning, education, effort, and risk. In fact, we find that CEO income has no relationship to company performance, and a plausible study would likely find that companies' performances have no relationship to CEO actions. Stupid people have become rich. So have lazy people. Hardworking intelligent people have gone bankrupt. Taking a risk implies that postitive outcomes are unlikely. So, how could an individual constantly take risks and constantly achieve positive outcomes? The fact that their outcomes tended to be positive establishes that somehow, this individual, engage in a process without risk, or that they were just a statistical fluke. Who can claim that success being a statistical fluke is a harbinger of a just and fair system?

Again, studies show that successful people credit themselves too much for their fortune, and unsuccessful people credit themselves too little for their fortune. Why is this? Probably its a fundmental mechasim of self protection. Must of us aren't calibrated to hurt our fellow man and feel good about it - that is we aren't good at being evil and accepting that we are so.. Most of us aren't calibrated to believe that we're bad/useless/incompetent. Considering ourselves to be evil, or considering ourselves to be bad/useless/incompetent, seem likely to be personality traits which will make us less successful at surviving and procreating. Our survival and success is based on feeling good about ourselves. And so, eons of natural selection have given us the ability to blame problems on others while taking credit for success.

Well, it's late again. More soon.

At the core

I was reading the latest issue of Newsweek earlier today. This is unusual because the mainstream press has become so biased in favor of the dogmatic right. But there I was reading about India. I'm no expert, but having spent a little time in Mubai about 7-8 years ago, the place is fascinating to me. Naturally, it intrigued me to hear the latest about this so-far quiet giant.

In the course of the article, the author made some various comparisons between India and China, and between both and the US. Frankly, some the article was either poorly written or poorly thought out, as many of the various ideas seemed to contradict themselves and each other, as presented.

What struck me, however, was a discussion which seemed to contrast democracy against capitalism. This contained a clear bias that capitalism was better/more important than government, especially a democratic one. And this seemed curious to me, yet very much in keeping with what we see advocated every day in our modern American society.

So, what of this? Well, to begin with we should applaud the author for not trying to lump capitalism together with democratic government as being one and the same. Too many pundits now confuse these two concepts as being the natural parts of a single whole thing.

My problem with this concept is two fold. First, business doesn't concern itself with the common good - which should be the first concern of a democratic government. In fact, business often recognizes that its goals are at cross purposes with the common good - but never lets that deter it from it's path. Second, almost a corollary, business has learned to grow bigger than government as a means to reach its ends ahead of the common good. First we saw business's drive bidding wars between states and municipalities for tax rebates and various other incentives. A good example from here in Illinois was when Sears had the state to give them a highly valuable piece of property (and provide a number of improvements for this property) that was many many times larger than their operations required (or would for century's to come). This, in essence, made them a real estate company and twenty (appox) years later they are still making boat-loads of money off this gift. Thank goodness for that because they have yet to find a management team that can figure out how to make Sears a profitable retailer. Kind of a sad record and certainly not a good argument for the strength of capitalism.

Since then, companies have expanded this agenda where they now have nations and labor pools playing the game of self-marginalization in the name of attracting their facilities and jobs.

As a side light, consider that capitalists love to talk their drive for efficiency and what a valuable contribution this is to society. So, when an assembly line job goes from the American rust belt to Asia, and the hourly labor rate drops orders of magnitude, they look at this as progress.

I disagree. To look at efficiency we have to consider what we value most. If it is capital or cash, then the argument above works. But, if it is people and quality of life, this doesn't work. A hour of labor input is an hour of labor input. If the person providing that input sees their rewards lessened, then their effort has become less efficient. The gain to the corporation and its investors isn't shared with the labor providers - so what is being called efficiency is merely a way of shifting wealth further to the elites.

Returning to the subject at hand, do democracy and capitalism walk hand in hand? Is democratic government an impediment to the well-being of people? Is Newsweek on to something here?

Let me answer the last question first. I think not.

If democratic government is an impediment to the peoples' well-being, then we need to seriously ask the question: What kind of government is better? The likely choices are: a) None, or as little as possible; b) Centralized government driving an economy (ala China); c) Government that does as it wishes as long as it stays out of the way of business.

The problems with A seem self-obvious. Humans, as a species, seem to have needs and conflicts that can only be worked out via some method of government. Attempts to do without lead to savagery and decision based on one's personal power and strength, which most of us consider an unfair and unacceptable process. And yet every need and every conflict can be resolved in many different ways. And these different solutions accrue differing benefits and costs to the various citizens. We can argue that the process of government optimizes solutions for no one. But we can also argue that the fairest solution is when no one is happy with their share. Hence, everyone wanted a more rewarding solution to the problems addressed by government is not an argument in favor of less or even no government.

Solution B harkens back to Communism, a bankrupt concept. It also leans towards socialism which is often placed in basket with Communism , perhaps unfairly. My friend the investment banker told me how superior we are to the French because they have a socialist system which interferes with efficiency. Interestingly, the data shows the French to be more productive per employed person than are Americans. From this, it doesn't seem clear that the capitalist argument is necessarily true - even using their assumption that the value of money trumps the value of people. So while while a centrally controlled economy, and other trappings of a narrow non-democratic government aren't desirable, we can't say that social welfare is undesirable or that it hurts efficiency or the economy.

Solution C offers a slightly novel approach. It suggests, leave all aspects of the economy in the hands of business, and allow government to manage all else. Unfortunately, unchecked business acquires and uses up a variety of resources that neither belong to it, nor are paid for by it. Do you want an example? How about clean air? Or, how about sun-light? Water? And the list isn't limited to natural resources. How about police protection? How about a traffic officer who is assigned to the entrance of a business or office park to help departing workers safely join the stream of traffic? Business clearly doesn't value that which is free, and therefore it's axiomatic that business will not be a good steward of these resources.

So, Government and business/economy address different by related interests. Business cannot be relied upon to take care of the needs of the larger community. There are needs of the larger community that need to be measured, balanced, and adjudicated, and this will ever be the provenance of government.

Capitalism and democracy are not the same thing. One doesn't require the other, one doesn't create the other. Democracy, however, is the force most likely to look after the greater good.

Well it's late. This is already much for you to chew on. More soon.

Good night.