Mulling over a post and just thought I would toss the thesis: out for you all. Red meat! Tear it up!!
Capitalist Democracy: the Inherent Contradiction
American capitalism post 1980 or so has internalized the Austrian-Freshwater framework that holds 1) homo oeconomicus seeks to maximize his own self interest, 2) that free markets maximize freedom with the Milton Friedman conclusion that Free Market Capitalism is not only the sine qua non but also the epitome of Freedom.
And where does democracy fit in? Democracy, in its own collective quest to maximize its collective interests will (under the Austrian/Hayekian) view always trend towards socialism and central planning and away from free markets. And so away from freedom (e.g. Hayek’s Road to Serfdom).
Which logically drives the argument to: Democracy threatens Freedom. And always has. Because the Gracchi Brothers and Robespieirre. Which then drives it to places like Bryan Caplan’s, The Myth of the Rational Voter: Why Democracies Choose Bad Policies
Now given that under Capitalist Freedom it is assumed that maximizing self-interest leads to both the most efficient and most moral outcomes, when then deny this to democratic collectives. And the answer of the Austrian-Hayekian-Straussian-Randites is clear (and BTW Byran Caplan is all of that): most people are poo-poo head idiots who are just too dumb to understand Econ 101. So the only rational response is to limit the franchise and so eliminate small d democracy. Because as a Capitalist you can have Freedom (and Efficiency and Morality) or you can have Democracy.
Personally I think this explains a lot about the economic right. They were perfectly comfortable with the ostensibly democratic system that marked England in the 18th and early 19th century. Because the franchise was limited to 10% or less of the male population. With the risk then and now the prospect of “mob rule”. Or as we know it today “universal participatory democracy”.
Actually you should also cite the policies of the US Federalist party: John Adams believed that universal male sufferage would be the downfall of the republic. Recall before the war of 1812 there were property qualifications to vote just like in England. So in one sense its back to the future where the propertied class feels that only it should vote because the lesser classes would only vote themselves bread and circuses.
So I term this point of view Neo Federalism
The problem with folks like Caplan and Friedman is that they rely on a rather narrow and stilted concept of efficiency combined with a penchant for reducing all of human existence to question of monetary value. All of economics is predicated on a series of moral and normative questions about what constitutes the good life.
Aristotle sought the answer to this question. Adam Smith wrote The Theory of Moral Sentiments before he wrote The Wealth of Nations. He was, at base, a moral and political philosopher. The Utilitarians tried to answer the question by reframing it into an idea of what sets of philosophies and policies might offer the greatest benefit to the most while doing the least amount of harm to the fewest. The problem is that their calculation goes off track when everything gets filtered through an economic lens.
Friedmanism is based on the conceit that man is a wholly rational, independent (or individualistic being), whose freedom and independence are solely defined by economic well being where more can only be described by a monetary store of value.
While couched in the language of freedom and natural rights the sort of thinking you describe in the OP is really nothing more than a justification for a different sort of aristocratic domination.
Any time the word efficient is used in an economic sense it should be followed by a question of “for whom?”
Nice idea – I will be very interested to see where you take this, especially how you seek to answer the arrogance embodied in Caplan’s book.
David Harvey offers a bit of an answer in his book Seventeen Contradictions and the End of Capitalism while Michael Sandel’s work generally seems to address the idea that, at bottom, economics cannot divorce itself from questions about morals and justice.
“a rather narrow and stilted concept of efficiency combined with a penchant for reducing all of human existence to question of monetary value. All of economics is predicated on a series of moral and normative questions about what constitutes the good life.”
You have emphasized the problem with all of Macro-Economics. One theory or assumption fits all is the premise. It will still be tilting with the Direct Labor Windmill long after it becomes less than 1% of the Cost of Manufacturing or Service. Being one of the heretics and having made factories competitive time and time again competing successfully globally does not seem to skew their thoughts or change in mind.
Capitalism need representative government with a balancing house of lords (senate) where the needs of the many can be denied for the greed of the owners.
John Adams saw property as a liberty, it extracts rents from the society.
The demos is frightening as it may (unemcumbered by propaganda) demand the good of the many prevail.
Only they (the propagandists) know what liberty means.
The liberty thing abrogates the “all men created equal” thingies on the distributional side.
Into the Quagmire sold by the Brookings, a tangled web when US must please kings and emirs! If US only spent a few more trillion nation building in the Middle East it would be so broke it would not have to pay SS.
Pollack: “In Iraq, there simply is no substitute for American assistance…Either the U.S. does enough to pull the Iraqis through to peace and stability or the country will descend deeper into chaos and civil war.”
Iraqi boys will not do it! Iraq is Vietnam in 1963 even to the experiment in bombing them to “kill enough to get them to love Baghdad”.
Pollack: “Making a determined and sustained effort to engineer a new national reconciliation”
Iraq is 1963 Vietnam, dump Diem now Maliki…. This time it is a majority rather than a minority religionist US dumped. If only US spends the needed resources, time and lives to do what Iraqis do not want!
Pollack: “Expanding the program to arm and train Sunni tribesmen as paramilitary adjuncts to the Iraqi armed forces. The U.S. may have to insist on this over the objection of many Shi’a Iraqis.”
Arm Sunnis? They were paid and armed to let the US go in 2008. Armed Sunnis are called ISIS or Da’ish. Sunni soldiery dumped their US arms and either walked away of defected.
Pollack: “Expanding military and non-military assistance to Iraq and the Abadi government as leverage for American diplomats and to reinforce Prime Minister Abadi’s own stature.”
Abadi is Thieu or Ky or any of a number of US puppets in the musical chairs to find someone they don’t hate more than US.
US is willing to compromise the 66% of Iraq who are Shiite, it can make Iraq in its fiction exactly like it made South Vietnam!
We all suffer from thinking that everybody else thinks like us. The problem is caused by the way certain traits are linked. The traits that allow one to succeed in economics are linked to traits which in the extreme are diagnosed as autism or psychopathy.
.
Neanderthals had bigger brains than modern humans. Perhaps it’s the 2% of Neanderthal genes that code for mathematical modeling skills.
.
If you compare the level of social behavior in chimps, wolves and humans, chimps–not wolves–are the outlier. One theory is that modern humans represent a big leap forward in social behavior among primates because we co-evolved with dogs. The wolves most inclined to socialize with humans thrived and became dogs. Simultaneously the humans most inclined to be social with dogs thrived and became us. Humans quickly wiped out the 4 or 5 other hominid species because we hunted as a team with dogs.
.
But genetic variation persists down thru the generations. A certain small percentage of modern humans still think and behave like Neanderthals. They have big brains and are as social as chimpanzees. They are economists.
.
Democracy is for the rest of us, those of us who are more like dogs, more evolved, more human.
Great post. Freedom is the ultimate expression of humanity. Unfortunately it is risky. If you are free of all obligations and you fail, it is curtains. .
So people seek to mitigate their risk by creating a safety net by giving up some portion of their freedom, let’s just say ‘taxes’ {it could be a lot of other things (ie. :marriage)} to make sure if their life choices fail, or are failed, they can survive.
It is basic survival theory.
So, what you describe as “democratic collecitives” is nothing more than forced insurance.
If maximizing one’s own interest is a self-justifying morality why shouldn’t me and my friend Bill just gang together and exercise our freedom by taking your stuff. We maximize our own self interest and you get “liberated”. Win, win!!!
Of course the way the Sammy’s of this world get around that is simply to define the goal of government as being to protect private property and (what is the same thing) enforce contracts.
In what way is governmental protection of private property anything different than forced insurance? Forced often enough by property owners finding ways to externalize the costs while internalizing the benefits. Or is there some way that “oligarchic collectives” that enforce property rights are logically superior to “democratic collectives” that enforce utilitarian outcomes? Other than by some mystical appeal to the sacrality of property?
” Freedom is the ultimate expression of humanity.” Sammy
How about defining freedom in your context and then providing some form of proof that your assumption that freedom and humanity are some how linked is correct.
And let us not forget that the genius of Milton Friedman is mitigated by his fawning affection for the ideas of Ayn Rand, a marginally successful Hollywood screen writer in spite of having been taken under the wing of Cecile B. DeMille.
logic is only the association of words in a way that pleases you, and your friends. (in the case of “science” the way to please your friends is a little more rigorous than in politics).
that being the case there are always going to be competing “logics.”
Jefferson recognized this: he did not think much of the idea of an “informed” electorate. he thought that people voting what they perceived as their own interests would, given the checks and balances, result in the shortish long run in the most sane government possible. (waring, “sane” is my word and i use it in a special way.)
in any case there is absolutely no reason why the tension between the interests of the “rich” and the interests of the “poor” should lead to a one way or the other hell. the rich, no smarter than the rest of us “in general” cannot, in their role as businessmen, imagine that paying workers more will result in “more” for them. especially if “more” is seen as “quality of life” and not just “money.” similarly, the poor, no smarter than the rest of us… especially the progressives… can’t seem to imagine that taxing the rich to achieve “equality” will not result in a better quality of life, even if a few dollars richer, for “us.”
the problem we face at present is that an insane faction of the rich have at least temporarily won the war of words and essentially control the government. that needs to be fought against. but woe to us if we “win” too completely. is there a pol pot in our future?
Adams was a poor man compared to Jefferson, and he did not own slaves. And he avoided a war with France that others wanted. Moreove he had a much bigger hand in writing the Constitution than Jefferson did.
And while he did not like Burr as a man, he did not, as Jefferson did, try to get him hanged by evidence.
Burr actually enabled “the poor” to vote in New York by selling them dollar shares in a business so that they became eligible as “property owners” to vote. Burr was an American aristocrat. Hamilton was probably the illegitimate son of a Scotch aristocrat. Yet they both worked to defend the rights of the blacks in New York.
I am afraid that what you call “forced insurance” has been the key to the survival of the human race since before it climbed down from the trees.
People have always been cooperative hunters and gatherers. And group pressure doesn’t need to be stated as a philosophical, or legal, principle to be enormously effective.
What you are complaining about is the kind of forced collective imposed by conquerors or their descendants on the conquered or their descendants. That can get ugly. Democracy is, so far as I know, the best defense against that. Of course, some people will never be satisfied and will always complain. No real problem except when they make a philosophy of it and fool people into joining them and abandoning the only protection they have against the predators.
Mulling over a post and just thought I would toss the thesis: out for you all. Red meat! Tear it up!!
Capitalist Democracy: the Inherent Contradiction
American capitalism post 1980 or so has internalized the Austrian-Freshwater framework that holds 1) homo oeconomicus seeks to maximize his own self interest, 2) that free markets maximize freedom with the Milton Friedman conclusion that Free Market Capitalism is not only the sine qua non but also the epitome of Freedom.
And where does democracy fit in? Democracy, in its own collective quest to maximize its collective interests will (under the Austrian/Hayekian) view always trend towards socialism and central planning and away from free markets. And so away from freedom (e.g. Hayek’s Road to Serfdom).
Which logically drives the argument to: Democracy threatens Freedom. And always has. Because the Gracchi Brothers and Robespieirre. Which then drives it to places like Bryan Caplan’s, The Myth of the Rational Voter: Why Democracies Choose Bad Policies
Now given that under Capitalist Freedom it is assumed that maximizing self-interest leads to both the most efficient and most moral outcomes, when then deny this to democratic collectives. And the answer of the Austrian-Hayekian-Straussian-Randites is clear (and BTW Byran Caplan is all of that): most people are poo-poo head idiots who are just too dumb to understand Econ 101. So the only rational response is to limit the franchise and so eliminate small d democracy. Because as a Capitalist you can have Freedom (and Efficiency and Morality) or you can have Democracy.
Personally I think this explains a lot about the economic right. They were perfectly comfortable with the ostensibly democratic system that marked England in the 18th and early 19th century. Because the franchise was limited to 10% or less of the male population. With the risk then and now the prospect of “mob rule”. Or as we know it today “universal participatory democracy”.
Actually you should also cite the policies of the US Federalist party: John Adams believed that universal male sufferage would be the downfall of the republic. Recall before the war of 1812 there were property qualifications to vote just like in England. So in one sense its back to the future where the propertied class feels that only it should vote because the lesser classes would only vote themselves bread and circuses.
So I term this point of view Neo Federalism
The problem with folks like Caplan and Friedman is that they rely on a rather narrow and stilted concept of efficiency combined with a penchant for reducing all of human existence to question of monetary value. All of economics is predicated on a series of moral and normative questions about what constitutes the good life.
Aristotle sought the answer to this question. Adam Smith wrote The Theory of Moral Sentiments before he wrote The Wealth of Nations. He was, at base, a moral and political philosopher. The Utilitarians tried to answer the question by reframing it into an idea of what sets of philosophies and policies might offer the greatest benefit to the most while doing the least amount of harm to the fewest. The problem is that their calculation goes off track when everything gets filtered through an economic lens.
Friedmanism is based on the conceit that man is a wholly rational, independent (or individualistic being), whose freedom and independence are solely defined by economic well being where more can only be described by a monetary store of value.
While couched in the language of freedom and natural rights the sort of thinking you describe in the OP is really nothing more than a justification for a different sort of aristocratic domination.
Any time the word efficient is used in an economic sense it should be followed by a question of “for whom?”
Nice idea – I will be very interested to see where you take this, especially how you seek to answer the arrogance embodied in Caplan’s book.
David Harvey offers a bit of an answer in his book Seventeen Contradictions and the End of Capitalism while Michael Sandel’s work generally seems to address the idea that, at bottom, economics cannot divorce itself from questions about morals and justice.
Mark:
“a rather narrow and stilted concept of efficiency combined with a penchant for reducing all of human existence to question of monetary value. All of economics is predicated on a series of moral and normative questions about what constitutes the good life.”
You have emphasized the problem with all of Macro-Economics. One theory or assumption fits all is the premise. It will still be tilting with the Direct Labor Windmill long after it becomes less than 1% of the Cost of Manufacturing or Service. Being one of the heretics and having made factories competitive time and time again competing successfully globally does not seem to skew their thoughts or change in mind.
It seems to me that a few individuals are better off under capitalism, but society as a whole is better off with democracy.
Capitalism need representative government with a balancing house of lords (senate) where the needs of the many can be denied for the greed of the owners.
John Adams saw property as a liberty, it extracts rents from the society.
The demos is frightening as it may (unemcumbered by propaganda) demand the good of the many prevail.
Only they (the propagandists) know what liberty means.
The liberty thing abrogates the “all men created equal” thingies on the distributional side.
It’s Vietnam!
Into the Quagmire sold by the Brookings, a tangled web when US must please kings and emirs! If US only spent a few more trillion nation building in the Middle East it would be so broke it would not have to pay SS.
http://www.brookings.edu/blogs/markaz/posts/2015/05/22-iraq-ramadi-isis-islamic-state-washington Kenneth Pollack.
Pollack: “In Iraq, there simply is no substitute for American assistance…Either the U.S. does enough to pull the Iraqis through to peace and stability or the country will descend deeper into chaos and civil war.”
Iraqi boys will not do it! Iraq is Vietnam in 1963 even to the experiment in bombing them to “kill enough to get them to love Baghdad”.
Pollack: “Making a determined and sustained effort to engineer a new national reconciliation”
Iraq is 1963 Vietnam, dump Diem now Maliki…. This time it is a majority rather than a minority religionist US dumped. If only US spends the needed resources, time and lives to do what Iraqis do not want!
Pollack: “Expanding the program to arm and train Sunni tribesmen as paramilitary adjuncts to the Iraqi armed forces. The U.S. may have to insist on this over the objection of many Shi’a Iraqis.”
Arm Sunnis? They were paid and armed to let the US go in 2008. Armed Sunnis are called ISIS or Da’ish. Sunni soldiery dumped their US arms and either walked away of defected.
Pollack: “Expanding military and non-military assistance to Iraq and the Abadi government as leverage for American diplomats and to reinforce Prime Minister Abadi’s own stature.”
Abadi is Thieu or Ky or any of a number of US puppets in the musical chairs to find someone they don’t hate more than US.
US is willing to compromise the 66% of Iraq who are Shiite, it can make Iraq in its fiction exactly like it made South Vietnam!
Call me Walter.
We all suffer from thinking that everybody else thinks like us. The problem is caused by the way certain traits are linked. The traits that allow one to succeed in economics are linked to traits which in the extreme are diagnosed as autism or psychopathy.
.
Neanderthals had bigger brains than modern humans. Perhaps it’s the 2% of Neanderthal genes that code for mathematical modeling skills.
.
If you compare the level of social behavior in chimps, wolves and humans, chimps–not wolves–are the outlier. One theory is that modern humans represent a big leap forward in social behavior among primates because we co-evolved with dogs. The wolves most inclined to socialize with humans thrived and became dogs. Simultaneously the humans most inclined to be social with dogs thrived and became us. Humans quickly wiped out the 4 or 5 other hominid species because we hunted as a team with dogs.
.
But genetic variation persists down thru the generations. A certain small percentage of modern humans still think and behave like Neanderthals. They have big brains and are as social as chimpanzees. They are economists.
.
Democracy is for the rest of us, those of us who are more like dogs, more evolved, more human.
Bruce,
Great post. Freedom is the ultimate expression of humanity. Unfortunately it is risky. If you are free of all obligations and you fail, it is curtains. .
So people seek to mitigate their risk by creating a safety net by giving up some portion of their freedom, let’s just say ‘taxes’ {it could be a lot of other things (ie. :marriage)} to make sure if their life choices fail, or are failed, they can survive.
It is basic survival theory.
So, what you describe as “democratic collecitives” is nothing more than forced insurance.
Sammy.
If maximizing one’s own interest is a self-justifying morality why shouldn’t me and my friend Bill just gang together and exercise our freedom by taking your stuff. We maximize our own self interest and you get “liberated”. Win, win!!!
Of course the way the Sammy’s of this world get around that is simply to define the goal of government as being to protect private property and (what is the same thing) enforce contracts.
In what way is governmental protection of private property anything different than forced insurance? Forced often enough by property owners finding ways to externalize the costs while internalizing the benefits. Or is there some way that “oligarchic collectives” that enforce property rights are logically superior to “democratic collectives” that enforce utilitarian outcomes? Other than by some mystical appeal to the sacrality of property?
” Freedom is the ultimate expression of humanity.” Sammy
How about defining freedom in your context and then providing some form of proof that your assumption that freedom and humanity are some how linked is correct.
And let us not forget that the genius of Milton Friedman is mitigated by his fawning affection for the ideas of Ayn Rand, a marginally successful Hollywood screen writer in spite of having been taken under the wing of Cecile B. DeMille.
well, Bruce, where you begin to wrong
is where you say “logically”
logic is only the association of words in a way that pleases you, and your friends. (in the case of “science” the way to please your friends is a little more rigorous than in politics).
that being the case there are always going to be competing “logics.”
Jefferson recognized this: he did not think much of the idea of an “informed” electorate. he thought that people voting what they perceived as their own interests would, given the checks and balances, result in the shortish long run in the most sane government possible. (waring, “sane” is my word and i use it in a special way.)
in any case there is absolutely no reason why the tension between the interests of the “rich” and the interests of the “poor” should lead to a one way or the other hell. the rich, no smarter than the rest of us “in general” cannot, in their role as businessmen, imagine that paying workers more will result in “more” for them. especially if “more” is seen as “quality of life” and not just “money.” similarly, the poor, no smarter than the rest of us… especially the progressives… can’t seem to imagine that taxing the rich to achieve “equality” will not result in a better quality of life, even if a few dollars richer, for “us.”
the problem we face at present is that an insane faction of the rich have at least temporarily won the war of words and essentially control the government. that needs to be fought against. but woe to us if we “win” too completely. is there a pol pot in our future?
to bring that down to earth a bit:
Adams was a poor man compared to Jefferson, and he did not own slaves. And he avoided a war with France that others wanted. Moreove he had a much bigger hand in writing the Constitution than Jefferson did.
And while he did not like Burr as a man, he did not, as Jefferson did, try to get him hanged by evidence.
Burr actually enabled “the poor” to vote in New York by selling them dollar shares in a business so that they became eligible as “property owners” to vote. Burr was an American aristocrat. Hamilton was probably the illegitimate son of a Scotch aristocrat. Yet they both worked to defend the rights of the blacks in New York.
You never can tell.
Sammy
I am afraid that what you call “forced insurance” has been the key to the survival of the human race since before it climbed down from the trees.
People have always been cooperative hunters and gatherers. And group pressure doesn’t need to be stated as a philosophical, or legal, principle to be enormously effective.
What you are complaining about is the kind of forced collective imposed by conquerors or their descendants on the conquered or their descendants. That can get ugly. Democracy is, so far as I know, the best defense against that. Of course, some people will never be satisfied and will always complain. No real problem except when they make a philosophy of it and fool people into joining them and abandoning the only protection they have against the predators.
Survival theory, implies social Darwinism.
Which is the cause of suffering for the whole.
Libertarian hogwash, as fitting as going galt.