Richard Wolff “Capitalism Hits the Fan, A Marxian View”

invasive surgery is needed

Just remember – there won’t be any anesthetization (except vaselin)

The housing market in Moscow at any rate is already in meltdown. I won’t be surprised to see the construction sector to go into decline in 2009. The silver lining is that the consumption boom relied little on credit extracted from home values so hopefully it won’t crash.

I really liked the DNA metaphor used by Fareed Zakaria to describe how economic leadership changed in the last few decades to reflect mainly the thinking of the biggest risk takers. And then how, with unchallenged leadership, U.S. political behavior vis a vis the rest of the world became similarly out of whack.

It’s as if this great catastrophe that the scare mongers were scaring us with has pretty much come to pass. It’s like 9/11 without the death, smoke and ability to blaim it on someone else (so far). Wasn’t it the cartoon character Pogo of the WWII era who said “I’ve met the enemy and he is us.”
So now it’s about ‘how are we going to deal with it”. I do think a great percentage of the population in the US is capable of changing behavior. I’m feeling really hopeful, actually.

“The global economic crisis has opened up a space to criticize the dominance of free market capitalism and offer alternative solutions.”

Sean,

the current crisis is a crisis not one of the free market but one of the state monetary monopoly. Credit expansion over the last 20 years has been the main reason for the inflation of housing and stock prices (and of the short-lived dotcom boom).

Instead of reading Naomi Klein and her failed economic confusions, it may be better to read Hayek’s Road to Serfdom. The “Shock Doctrine” is in fact a Hayekian concept, who proposed that the state tends to use crises to expand its power.

But, thanks to the economic ignorance of our elites, we’ll be faced with more state intervention into the market (not less), including massive public expenditure that will drive inflation.

But, ignorance is bliss. Go for socialism again. I guess 70 years of complete failure in socialism just didn’t quite bring home the lesson.

I think I should clarify something here: the credit expansion I\’m talking about is the insane policy of the Central Banks (FED, ECB, etc.) to inflate the money supply.

The core problem is monetary inflation. None of this could happen if there were a fixed money supply. BUT – Keynesianism is far more attractive for governments.

So, continue dreaming

This whole canard reminds me of the energy fiasco in California completely inappropriately known as energy deregulation failure. Just like with the current crisis, it has not been cause by free market but a concoction of idiotic regulatory measures that pretend on deregulating, while some people predicted if would fail. In California both Dems and Repubs managed to deregulate wholesale side of energy supply and fix retail under regulatory price controls. Woopiedo, retailers went belly up.

Sure, it is convenient to blame Enron then and mortgagee based securities trading now. Both cases miss the point. It was government action in creating a failed regulatory structure, not free market. It was ideological pressure to offer credit to those that should not be getting any. JUst like in Energy fiasco in CAlifornia, the idealistic nonsense of combining market forces with price controls.

The most disgusting in both cases is that the same people that pushed this regulatory morass through are now in charge of fixing market even more.

As for Russian real estate market, it will eventually crash because prices are unsustainable relative to incomes. Russian car sales increased 22% last month and probably tripled in last several years. People that were saving to buy condos were priced out of the market and since very few people save anything for any meaningful periods of time there (except country leaders that stash the oil loot in Zurich) the money ended up “invested” in cars.

Cyrill,

tochna. Glad there’s more people with some basic economic understanding out there.

“Hayek’s Road to Serfdom.”

A book even Hayek regarded as bad.

Two “free marketeers” – go to library and read Marx if you really want to learn basics

But back to wolfs of capitalism.

1. What does Richard mean by “workers”? Bank workers? IT workers? Or just old plain guys working in mines and steel companies?

2. Why should I trust his assumption that wages went flat in 70s? Any scientific (as marxism is a science) proof?

3. His idea about new “democratic” management is hilarious. He is real professor – has heard about life out there but never tested it.
I mean his example of IT guys that started their business in garage and have their “board and beer” meetings on Fridays.
It was funny indeed. He thinks it’s “a new way”. In fact – if he looks at Marx – it’s just the natural changes resulted from the changes in the means of production. These IT guys are kind of “artists” who don’t need huge assembly lines or tens of thousands of workers to produce their product. neither they need management/supervision as what they are producing doesn’t exists yet – they inventing/creating it in the process. But how does he see workers of GM – spread around tens of factories all over US – “manage” this corporation? It would be like if patients of psychiatric clinic are managing their clinic.

Ivanov and others, why read Marx, a guy who lived and died in the 19th Century, if he had such a bad track record on his predictions?

Chris,

Hayek may not have thought highly of \”Road to Serfdom\” because it did not meet his high standards for rigorous argument. He would have preferred fleshing out his arguments in far more detail. As it stands, it is by leaps and bounds far superior and more correct than anything Marx – or his champagne socialist heirs like Naomi Klein – have ever put out.

The only problem with Hayek is that he does not see any positive role for government in economics – which is, of course, very hurtful for people whose only abilities are politics and who would otherwise have a hard time making a living.

But, thanks to the verbal acrobatics and mathematical flim-flam of Keynes and Samuelson, the political class can continue claiming a legitimate role in economics even after the stupidities of Marx have turned into mass-murder and economic failure.

Newton lived in 17th and died in 18th centuries. But apples still are falling down not up!

Marx could be wrong in his social/political predictions. As everyone else who tried to predict humans. But his analysis of economy and laws that drive it are very good.

But if you don’t want – you don’t have to…

What I agree with Richard about – this is not a financial crisis.

PS. Kolya, do you know what Richard means by “workers”? If you listened his presentation of course

Ivanov,

Marx was wrong. About everything. Workers of all shades are richer today than every before – in absolute terms. More people today – in absolute numbers – live better today than the entire global population at the time of Marx. Capitalism proved more successful than socialism – and socialism only succeeded temporarily were enforced by the most brutal of force.

The scholastics of almost half a millennium ago had come up with far more sophisticated analyses of economics than Marx and his successors.

To seriously believe that any of Marx’s original ideas were in any way correct betrays little more but ignorance of economics.

The simple fact that Marx believed in the labor theory of price – when the scholastics had already figured out demand is the determinant of price – should be enough to show how silly he was.

If “worker’s democracy” could work economically, the world would be awash in co-ops churning out computer chips, motor vehicles, and mining natural resources.

Ivanov,

Marx was wrong. About everything. Workers of all shades are richer today than every before – in absolute terms. More people today – in absolute numbers – live better today than the entire global population at the time of Marx.

Thanks, Admiral.
You proved it once again – you have NO IDEA what Marx was talking about… You read others about what Marx wrote – but this doesn’t count much.
“Не читал – но осуждаю” (с)

Sean – how did “collective struggle for worker’s rights, better wages, unions” bring about the incredible technological revolution that has improved the lives of billions? I would argue that unions have slowed economic growth and wealth creation – for which there is plenty of evidence. More market freedom = higher standard of living. It takes deliberate ignorance to not acknowledge that.

Of course, the trivial nonsense a la Keynes and Samuelson taught at most universities continues to argue the case for unions as the boon of worker’s in general, rather than just of union members (at the expense of economic growth).

And, of course, it is easy for unions and other socialists to take credit for the unparalleled economic developments of the last 100 years – to which they never contributed a thing.

If unionism would work productively – rather than simply parasitically – why has no labor union ever set up a car manufacturing plant successfully?

—
It’s General, Ivanov. I have read more Marx than my stomach could stand, and his predictions about the increasing poverty of workers – and his commitment to the labor theory of price – are well-established aspects of his writings.

Clearly, you have failed to understand Marx’s economic analysis. His insistence that the ‘proletariat’ will continue to live ever more poorly in ABSOLUTE terms was WRONG on empirical grounds.

His commitment to the classic Smithian labour/cost theory of price is also empirically (and theoretically) wrong.

You could, of course, provide chapter and verse of where he was ‘right’ about something non-trivial, i.e.: original.

I am not holding my breath.

“Is it no surprise that as union power has declined, real wages and incomes has stagnated?”

Standards of living have, however, improved dramatically. The average US citizen today lives significantly better in material terms than his far more unionized parents.

Why? Because of capital driven economic improvements.

The amount of goods and services that can be purchased for a single hour of work today are significantly higher than only two decades ago.

To look at nominal wages only is to pretend economic development today is the same as it was 20 or 10 years ago.

Home ownership today is far more common than 20 or 30 or 10 years ago, there are far more cars per capita (and better ones at that) than only 10 years ago.

But, who cares for boring facts when there are exciting ideologies to brighten the day.

Ivanov,

Marx was wrong. About everything. Workers of all shades are richer today than every before – in absolute terms. More people today – in absolute numbers – live better today than the entire global population at the time of Marx.

Thanks, Admiral.
You proved it once again – you have NO IDEA what Marx was talking about… You read others about what Marx wrote – but this doesn’t count much.
“Не читал – но осуждаю” (с)
——————————————-
One small correction to the above. “live better today than …” should read “has bigger debt today than ….”

Marx was right about all he wrote absolutely. However, we cannot possible apply his theory to the capitalism that exists today. One “small” difference. At the time of Marx all European countries had currencies as good as gold … today on the other hand … there’s one country that can print as much money as its government wishes and then dump the paper on the rest of the world.

Of course unions and entrepreneurs are locked in an adversarial relationship, but let’s not forget that both unions and entrepreneurs belong squarely in the capitalist world. We all know the fate of independent unions and entrepreneurs in the communist countries, where both were treated as ideological enemies.

Dima,

\”One small correction to the above. “live better today than …” should read “has bigger debt today than ….”\”

And how does the \”have bigger debt\” change anything about people having more than ever before? Who FORCED them to live beyond their means?

Regarding currency: what does Marx have to say about currency? Exactly.

\’However, we cannot possible apply his theory to the capitalism that exists today.\’

So… it\’s not much good then, is it?

But, go on believing Marx was right about everything. I know Catholics who believe everything the pope says is good, and I know Protestants who believe everything the bible says is true.

Doesn’t make it so, but… the discussion is at least put to an end and no more time needs to be wasted.

Discussing with Marxists is pointless. Jesuits offer more content.

Just answer me one question, of you can: why are there no union-run car factories churning out competitive, high-quality cars people want to buy?

Just answer me one question, of you can: why are there no union-run car factories churning out competitive, high-quality cars people want to buy?
———————
You are talking about American cars, right? There are good cars made in Europe and Asia (notably Japan), and I’m sure most of those factories are unionized. It also has much to do with who assembles the cars. While in the US cars are assembled by high-school drop-outs who didn’t do much in school anyway, in Japan, – the high-school system is rigorous and makes a person to work and learn. Of course, in the latter case the workers do a better job, unionized or not.

Of course unions and entrepreneurs are locked in an adversarial relationship, but let’s not forget that both unions and entrepreneurs belong squarely in the capitalist world. We all know the fate of independent unions and entrepreneurs in the communist countries, where both were treated as ideological enemies.
————————————————–
Candide,

do you know a smart name called Albert Camues didn’t distinguish between the so-called “capitalistic world” and “communistic world”. To him they were both the same: they both are based on industrialization and specialization of labor and as such cannot possibly make an individual happy.

Admiral.
The answer is easy even for a 5th grader.

Trade unions don’t run car factories. They have another function.
Otherwise it would be logical to ask why Ford didn’t invented conveyor to assemble trade union members.

I really see no point to discuss economy with someone who asks such questions. Or compares how many cars per capita “workers” have today and 20 years ago.

“Наше СМУ установило 1430 газовых плит, что ровно в 1430 раз больше, чем в 1913 году” (с) “Операция “Ы” и другие приключения Шурика”

But better look at computers. Iceland has more computer per capita and in total than the whole world in 1913

But nevertheless comment about trade unions gave me one idea. Trade unions could set up a “workers exchange” trade floor and trade their “product” – work force!
Like “The price per Fillipino worker has dropped today by 20 point to the lowest level in 20 years – below 8500. But good news – Icelandic bank workers are up by 10%”… Why not?

Clearly, you have failed to understand Marx’s economic analysis. His insistence that the ‘proletariat’ will continue to live ever more poorly in ABSOLUTE terms was WRONG on empirical grounds.

It is not about understanding or failing to understand. Ivanov represents a classic group of Russian educated who never thought that there was more to Marxism (including infighting within Marxism that surprisingly survived the 1905 party congress) outside of the USSR college indoctrination.

The only valuable thing that Marx left is his Historical Materialism as a very broad, fundamental method of classification of socio-political and economic formations. Unfortunately, after creating the method he failed completely to appropriately apply it and realize that what he was describing was not capitalism but final stages of feudalism. Lenin almost got that one in his Imperialism as the last stage… creating the concept of ГМК to reflect what he perceived as reality. One more step and he would have understood that ГМК is the first stage of capitalism and not the last one. Unfortunately his ideological obsession clouded his reasoning just like it did with Marx’s.

In addition, the whole idea of “общественной собственности на средства производства” failed to materialize in all the countries that tried his proposed approach and the property ended (упрямая тварь, реальность) being controlled by the same state that controlled it under feudalism, making Marxist communism and feudalism virtually identical ironically making self proclaimed progressivism of socialists real conservatives.

“Marx was right about all he wrote absolutely. However, we cannot possible apply his theory to the capitalism that exists today.”

I don’t know whether you are aware how contradictory your words are. What did Marx write about the future of capitalism? Was he right?

Moreover, this sentence:

“Marx was right about all he wrote absolutely.”

Sounds very similar to what an Islamic fundamentalist would write about the Koran or a Christian fundamentalist about the Bible.

“do you know a smart name called Albert Camues didn’t distinguish between the so-called “capitalistic world” and “communistic world”.”

Hey, I like Camus. I don’t remember him saying that. If he did, well, he was badly wrong about it. I’ve been to both of these worlds. It’s stupid to say that they are indistinguishable. People IMMEDIATELY noticed the difference.

Cyrill. I don’t want to disappoint you but I was sleeping at lectures of nauchniy kommunizm, politekonomia etc.
It was long after I decided to look at Marx work. And first thing I noticed – he’d hated Russia. He was really anti-Soviet
The irony of the history – it was Russia that ruined his work by demonizing Marx himself

As today is the day of easy questions I have one for you. Do you believe that capitalism is ultimate system that humans developed?

Moreover, this sentence:

“Marx was right about all he wrote absolutely.”

Sounds very similar to what an Islamic fundamentalist would write about the Koran or a Christian fundamentalist about the Bible.

Or General Khlynov’s “Marx was wrong. About everything.”, doesn’t it?

Look. I can move my ass from point A to point B at the speed of 900 km/h. Something impossible for the Great Ceaser!!! Can I do it because of capitalism? I doubt it as even such communist country as CCCP allowed me to do that (eight hours non-stop flights – OMG). So when General compares cars per capita or asking why there are no union’s cars around – I see no point to argue whether Mark was right or wrong and where exactly he was right/wrong. Fir sure – he was wrong about cars. Japanese in particular

shit!…a lot of очепяток – time to go too bad

Ivanov – he could not have been anti-Soviet, since he died in 1883.

’nuff said.

Regarding your question: of course capitalism isn’t the ultimate system humans will develop. Humans will come up with all kinds of things, all the time, for the rest of eternity. However, barring a fundamental change in basic human psychology, a free market economy is always going to produce more material and spiritual welfare than the alternatives.

For those who disagree, there is always Cuba and North Korea to go to. Please have your Socialism in One Country – but with volunteers only.

“Trade unions don’t run car factories. They have another function.”

Exactly. They serve the same function as a mafia protection racket. They add nothing of value to anybody not a member of the union.

Ivanov, it’s true that Marx was not fond of Russia, but how was he anti-Soviet if he died decades before the Bolshevik revolution?

By the way, I cannot say that I hate Marx. I cannot say that I’m that familiar with him, just enough to know that he had some interesting things to say–that he was right on some of them and dead wrong in others. Those who deserve our derision are those who elevated him to prophet status and used his writings as some sort of dogma. Those who do deserve our unreserved condemnation are people such as Lenin, Trotsky, Stalin, and Mao–Marxists responsible for the spread of misery and the deaths of millions.

Ivanov,

Let me rephrase my “Marx was wrong about everything”: the few things Marx was right about were trivial (vide Engel’s funeral speech – Ayn Rand’s a=a and 1+1=2 is about as clever). The non-trivial contributions he made – they were wrong.

There are no discernible laws of history, for example. Oh, and he wasn’t even the first to come up with that nonsense. The court-jester Hegel had it first.

Labor theory of value – illogical and wrong.

Or do you want to argue that the amount of time spend on making something determines it’s price?

The ’socially useful’ labor addendum is merely a cop-out, and really leaves only one final conclusion: demand determines price.

I’m afraid that was too fast for you, however.

He was really anti-Soviet

Hardly. Of the 10-point plank in the Manifesto that outlines his plan for immediate and long term measures to establish dictatorship of the proletariat, the USSR fully implemented most and partially implement the few that were left.

This myth that USSR (Cuba, China, Pol Pot, etc) were not doing it how Marx would want it to be done is a century old canard that Marxists use to CYA.

The fact remains the same – no matter how smart and well meaning were the people that wanted to implement Marx’ visions – if implementation went on any meaningful level beyond a hippie commune in a Humboldt County, it failed miserably.

Может что в консерватории поправить?

Do you believe that capitalism is ultimate system that humans developed?

No. It took feudalism about 10 centuries to develop and then some to decay. We are somehow to believe that 300 years is enough for capitalism? Most of the world still lives under feudalism. Russia is a great example of an early transition period.

Your question is either incomplete and incorrectly stated or you don’t understand importance of development. Today’s capitalism is quite different from what Marx saw, what Lenin saw, what Gramsi or Sartre saw.

That correction by itself should answer your question.

If you want to ask if an economic system based on private ownership of means of production is so far the best working model, then yes. Is it possible that a communal ownership based system successfully replaces it sometime in the future? Only if efficiency is no longer a factor and dilithium crystals are widely available.

“Only if efficiency is no longer a factor and dilithium crystals are widely available.”

Aye.

Labor theory of value – illogical and wrong.

I know, I know…all value is being created at NYSE. Right now.

Ivanov, it’s true that Marx was not fond of Russia, but how was he anti-Soviet if he died decades before the Bolshevik revolution?

When Khlynov didn’t get the joke – I understood. He is general after all But you!

PS. I neither hate nor love Marx. But he was hell smart man. HELL smart. Way much smarter than Paulson.

“I know, I know…all value is being created at NYSE. Right now. ”

Avoiding the answer with sophomoric witticism. Do you agree or disagree with the labor theory of labor?

The only reason people live better today is because of collective struggle for worker’s rights, better wages, unions, political change etc.

This is demonstrably false. If all that were needed to improve peoples’ lives is workers’ rights, better wages, etc. then these would have been implemented without the need for capitalism. Try campaigning for unions and political change outside of a capitalist setup and see how much improvement it brings.

The only reason people live better today is because of collective struggle for worker’s rights, better wages, unions, political change etc.

In fact, to get an idea of how wrong this statement is, take a look at conditions in China, Vietnam, Malaysia, and India over the past 10 years. Have millions of Asians gotten richer and hence live better because of a collective struggle for worker’s rights, unions, etc.?

Answer: no. Trade based on capitalism is what did it.

Private property combined with the right to freely trade and contract has proven to be the single most effective poverty reduction system in the history of the world.

Limiting the right to private property, and violent interference with the right to trade and freely contract is the most effective way of reducing human welfare.

Improvements to the human condition have historically always correlated with an increase to the former, while an increase in the latter have always proven to be the harbingers of human misery.

Claiming otherwise is generally an indication of historical ignorance.

Oh God, it’s a Libertarian circle jerk.

Actually, the single most effective poverty reduction system in the history of the world is known as “universal education.” The second most effective is known as “technology.”

As an aside, I find the attempt to derive the entirety of the content of human history from one human behavior (exchange of goods) to be truly risible, as well as absurdly reductionistic. It is a provincial belief, a Just So story, born from the context of the 20th century which is about as testable and verifiable as psychokinesis.

And for my fourth post in a row: the desirability or lack thereof of free trade has little to do with Marxian analysis. I realize a lot of people confuse Marxian analysis with central planning, but they are not the same thing. This is like conflating Christianity and the Papacy, or better yet Thomism and Vatican II.

The only reason people live better today is because of collective struggle for worker’s rights, better wages, unions, political change etc.

Union’s have had a massive impact over the past century or so and (mostly) for the better.

The thing that puzzles me about this viewpoint, though, is – where did the additional money needed to pay workers better wages actually come from?

“where did the additional money needed to pay workers better wages actually come from?”

GOLD!!! Pretty, shiny GOLD!!!

Chris,

your deliberate ignorance is breathtaking.

Regarding Marxism: Maybe the local Marxist may enlighten us to what actually IS the central tenet of Marxism?

Every time I show a Marxist he’s out to lunch on something, he generally claims that the issue is not central to Marxism.

Talking to Marxist is a bit like trying to wrestle a grease pig. Lots of noise, squeaking, and dirt, but never a firm grip on anything.

And Chris, please demonstrate by reference to facts why you think that private property, free exchange, and the right to contract freely are NOT necessary elements of human progress?

You seem to believe that anybody has stated they are sufficient preconditions, when all that was said is that they were NECESSARY preconditions.

Without private property, free exchange, and the right to contract there can be no improvement in the material welfare of human beings. It’s not all there is to it, but without it life is pretty lousy.

“please demonstrate by reference to facts why you think that private property, free exchange, and the right to contract freely are NOT necessary elements of human progress?”

Proving a negative is impossible, as any student of Logic 101 knows. But now that you mention it, the biggest ever elements of human progress (whatever that is) were probably the discoveries of how to make fire and domesticate animals, neither of which probably had much to do with free exchange. Plus the invention of beer.

I am not a Marxist, but obviously an analytical framework is not an economic institution any more than a cat is a dog.

You can believe whatever you want, but what you are doing is in fact a form of speculative metaphysics, as unverifiable as the idea that history is the history of class struggle.

To phrase things in a less dickish way, the thesis is a thesis. It is not a fact, but a deduction the truth value of which cannot be determined. It is metaphysics, like the belief in four causes.

I have nothing against metaphysics, which is fun. Aristotle was one of my specializations. But I wouldn’t build a bridge or construct policy using it.

Regarding Marxism: Maybe the local Marxist may enlighten us to what actually IS the central tenet of Marxism?

Have I ever mentioned Marxism?
I’m talking about Marx work only, Vashe Prevoshoditelstvo, as I don’t know what “marxism” is.

Do you agree or disagree with the labor theory of labor?

In same way as unions could be car manufacturers…

PS. Free trade, private property bla, bla, bla. But! Can capitalism exist WITHOUT the state (aka government)?

Well said, Sean.

PS. Most funny when Pol Pot is associated with Marx (well it was not funny for those murdered by a maniac …)

Sean, I’d love to respond, but honestly, I didn’t really understand much of what you wrote. It seems that whenever I engage in a discussion of Marxism with a Marxist, I’m always told that what the vast majority of people think of as Marxism, isn’t. I must say, though, that I fully agree with the quote at the end of your comment.

The craziest thing about capitalism is that it actually works. The idea that people, engaging on their own in production, distribution, and sales can create an efficient system is counterintuitive at first glance. Granted, there is no ghost in the machine, and the invisible hand is the result of billions of little interactions, but it works better than anything invented to this point, and so it is worthy of defense. Global figures on the market and trade bear this out. Tim mentioned Asia, and Africa is a great case study because they have countries that went in both direction, and the free-market traders have done significantly better than their statist peers.

As much as I disagree with many union initiatives as they are currently in American politics, the right of free association is fundamental and fundamentally good. Workers’ rights movements made great progress in the latter 1800s and early 1900s. Collective bargaining is still important, but too often the unions have become slaves to a particular kind of corrupt politics that puts their own interest above the interest of their workers or those that the workers are supposed to be serving.

Back to the topic at hand, listening to Richard Wolff made me physically sick. The seething anger in his voice, matched with incorrect assumptions about the capitalist system and our social structure reminded me how awful it would be if people like him got into government.

A glaring example of how I think he miscontrues capitalism is his assertion that American capitalism created a society in which we judge our worth on material means. That’s just human nature, existed far before we came along. It’s absurd to blame capitalism for our being materialistic.

On a similar note is advertising. It doesn’t necessarily create a new “desire” for a good. In the past two weeks it has worked for me in its prescribed role. I needed shoes, and heard about a sale on the radio. It didn’t create the need for shoes, but it did help me fill it in an efficient, cheap way. Likewise with a guitar. I’d been thinking about learning to play for a while (because I’ve long wanted to, and recently a lot of my friends play so they can help me learn – both of these factors are completely independent of capitalism). Also, I heard about a 3 day sale on the radio, and advertising, again, smoothed operations in the system.

So really, a lot of his anger against affluenza is wrongly directed at capitalism, when it’s a spiritual/psychological problem built in to our natures.

About slums, capitalism offers a choice. If they would prefer to live otherwise, they can. Of course, those other options are usually pretty unattractive. companies come in and offer employment, nobody is forced to take the job. It seems rudimentary, and it is. Take the “sweatshops” that usually provide a higher wage and better working conditions than the alternatives.

Show me a slum and I show you an area where there is no protection of property rights and where the right to contract freely is violated consistently by government and those in cahoots with the government.

Countries where property rights are universally respected and where people are free to contract are always less poor than countries where this is not the case.

\”Free trade, private property bla, bla, bla. But! Can capitalism exist WITHOUT the state (aka government)?\”

Free Trade without the state? Absolutely. It\’s happening every day.
Free Trade without government? Absolutely. It\’s happening every day.

The only role the State plays in trade is reducing it.

Can private property exist without the State? Absolutely. The only role the state plays vis a vis private property is limiting it.

Can Capitalism exist without the State? Depends on what you mean by capitalism. I guess you\’ll define it in a way that it necessitates the state. So, maybe not. So what.

Private Property and Free Trade do not in any way, shape, or form depend on the state.

Owen. No one is forcing me to take the job. But bastards at the store don’t give food for free either

General, I guess you mean Iceland and its supe-universal respect to property rights and free to contract…
(PS. Not clear what smiles I should place – laughing or crying…)

Both of these statements are at such a level of abstraction, I don’t even know where to begin. The key ideological fetishisms here are “choice” and “free”.

Sorry you have such difficulty with basic words.

I also assume that by referring to the words ‘choice’ and ‘free’ as fetishes you disapprove of what these words mean.

It is hard to discuss sensibly with somebody who opposes the concept of human freedom and the right to chose.

You probably prefer Plato to Locke, too.

Ivanov,

good for you to bring up Iceland: it’s not currently an exactly good example of a well-managed society, is it?

OMG…I assume you got your education in military academy, General

Can private property exist without the State? Absolutely.

Well then answer to yourself – who/what protects your private property and what generals are for?

Without a State only PERSONAL property exists – the one you personally can protect. But we – ivanov, Sean and Dima – could overcome that problem together and take you property. Thus we would create out small State.

ivanov,

thank you for making it very clear that you understand what the state is: an institution born of robbery.

Franz Oppenheimer has shown that long ago.

What protects my personal property? My weapons. And the weapons of my friends and associates. Or maybe the weapons of the protection service I have hired.

(and if you think THAT is a state, you simply show your inability to distinguish between voluntary and involuntary associations)

Ivanov,

good for you to bring up Iceland: it’s not currently an exactly good example of a well-managed society, is it?

Society was managed very well. Like medical care in practical terms is free.
But business was also so free that were able to crash itself… And it’s not clear why the F*&^K I should pay for that.

Ivanov,

medical care in Iceland is free? Nobody pays for it? Amazing. Where are they hiding their Star Trek Assemblers?

Ivanov,

“But business was also so free that were able to crash itself… ”

Thank you for showing clearly that your economics education never included the topic of “Money – what it is, what it does, and where it comes from”.

Ignorance is bliss. Next thing you tell me is that the current credit crunch is the result of too little regulation and too much free market.

thank you for making it very clear that you understand what the state is: an institution born of robbery.

Franz Oppenheimer has shown that long ago.

Origins of the Family, Private Property, and the State
(c) Engels 1884
http://www.marxists.org/archive/marx/works/1884/origin-family/index.htm

I bet Engels was first that that German kid…who was responsible for WWII (in some way – as German professor)
“In 1919, he accepted a call to serve as Chair for Sociology and Theoretical Political Economy at Johann Wolfgang Goethe University in Frankfurt/Main. This was the first chair dedicated to Sociology in Germany.“

I was afraid you would bring up “Origins of the Family, Private Property, and the State” by Engels. You would be well advised to do a little research into the sources that ‘informed’ Engels about the life of the American Indians.

To make life easy for you: he based his ideas on a fabrication. Not his fault, really, but…

Hobbes was wrong.
It’s also interesting that you now only talk about Capitalism – I have already pointed out that I’m not concerned with that term – which was a Marxian invention in any case. So, I grant you there could be no capitalism without the State. Who cares.

Without a state, there would be no ‘laws’ as we understand them in a state system, obviously. And there would be no ‘rights’ as there are in a state system.

There would be private property and free exchange. Any violation of these would be the negation of private property and free exchange. You either have private property and free exchange, or you do not. Obviously.

The State negates private property and free exchange. Also obvious.

The state is nothing but an institution that claims for itself the unilateral right to use violence. Any such institution reduces human welfare, no matter what you call it.

“could world capitalism function as it does today without the Chinese government stomping on worker’s rights…By all economic statistics, the gap in wealth on a global scale is rising and our ecology has becoming increasingly dire. To think that capital is only the solution and not also the problem is dismissing the global reality.”

In my interpretation, what you are saying here, Sean, is that the capitalism that has comparatively ‘worked’ in the last century has done so without factoring in certain real and immense costs. Your 2 examples: chinese labor and the environment. (I would like to add my ‘good’ mother labor into your list of invisibles.) Now those costs are being revealed; bills are coming due.

I had the good fortune to attend a talk by Amory Levins of the Rocky Mountain Institute the other night, and he gave a powerful, though sad, example of how the market works: One of RMI’s biggest clients is the US military. Formerly, the DoD’s spreadsheets assumed the cost of delivering fuel to run their fleets in Bagdad to be so low as to be ‘0′. Of course, heavy, highly accessorized, fuel inefficient tanks and Hummers take a lot of fuel and require frequent well-armed convoys to carry the hydrocarbons. Easy targets. So, now they are starting to count all the manpower costs, deaths and amputations incurred in this effort. Big number! A cost revealed only after the worst has happened. Thus, the military becomes yet another customer demanding that Detroit wake up and deliver better MPG.

So…market demand will eventually drive even the US to better vehicles for the environment. (Toyota is years ahead in the development of light, strong carbon fiber electric cars.) Does capitalism have to be so blind, slow and painful? Why can’t we ever put a $$ value on these invisibles before catastrophe happens? Amory brought up carbon-offset programs too…I’m still trying to get how that is going to work. I guess it’s just counter-intuitive to be estimating such immensities as breathing, not eating poisons, not suffering, not dying and loving your children in terms of ‘capital’.

tess: military expenditures by the state are not a part of the free market. Logically. There is no “market” for state military procurement, since the ‘buyer’ is not a market economic actor.

Yeah only the profits are privatized, while the costs are socialized.

Sounds like Fannie and Freddie.

The current economic crisis is self-evidently a clear failure of state intervention into the free market. In a free market, governments would not print money (and the Central Banks are government institutions since they have the government approved and enforced monopoly on money), would not guarantee mortgages, would not subsidize industries, would not subsidize private life-styles, and would sure as hell not bail out businesses.

The problem is that we may have Capitalism, but we sure as hell don’t have a free market economic system.

The funny thing is that those who complain about the current system mostly want to replace it with something that involves even MORE state intervention into the economy.

I’m not that well informed in matters of economics, but I think (and hope) that in the future economics will lose most of its ideological flavor (e.g., Marxist dogma vs. libertarian dogma), and its theories and hypotheses will be exclusively based on empirical evidence. In other words, economics will be much more science and much less philosophy. This trend started quite a while ago, but the influence of old ideological battle-lines, although weakening, are still strong. In any event, there are more and more economists that acknowledge that the old Right/Left divide is obsolete and not conducive to good science. Economics, as a field of study, will be based more on what we know of our biology than on our ideological inclinations.

“Most funny when Pol Pot is associated with Marx (well it was not funny for those murdered by a maniac …)”

There is no denying that Marxism was a crucial part of Pol Pot’s world view. He was a member of the Communist Party in France and even in Cambodia his communism was initially very orthodox. Despite his ostensible break from Marxism, his murderous movement was deeply influenced by Marxist ideology.

The desire to turn economics into an ‘exact’ science is to a significant degree at the root of what is currently ailing our economic system.

Human values cannot be objectively measured like the velocity, weight, and position of particles. But human values are what drives economic behavior: “I value this apple less than that piece of steak” thought the gardener and exchanged it for a steak from the herder. The Herder valued the steak less than the apple. So both are better off – but there is no way to measure that, because 1 apple does only equal 1 steak in the interaction of these two people at that particular time.

Trying to quantify economics along the lines of physics is one of the greatest intellectual mistakes ever to befall economics.

“where did the additional money needed to pay workers better wages actually come from?”

Thet were stolen from the People?

I was afraid you would bring up “Origins of the Family, Private Property, and the State” by Engels. You would be well advised to do a little research into the sources that ‘informed’ Engels about the life of the American Indians.

Engels work was not about Indians, “general”.
And it’s funny that you were not afraid of referencing Franz Oppenheimer – the scientist who worked in the country that started both world wars…

medical care in Iceland is free? Nobody pays for it? Amazing.

Free? Not at all.Tthere two things in the world that are free really. Cheese in mouthtrap and stars on Generals’s shoulders.
Medical care in Iceland is paid by people of Iceland. As income tax. So the more you make – the more you pay. If you are lucky – you’ll be never paid back. If you are unlucky – and need major operation (like full kidney transplant) that costs hundreds of thousands of dollars – you’ll get it. After 6 month of living and working here (if you are born here – just a moment after that). Well I have to admit – this doesn’t apply to robbers – I mean dantists have to pay in full (except kids and pensioners). I know this is very bad and agaist free market.

What protects my personal property? My weapons. And the weapons of my friends and associates. Or maybe the weapons of the protection service I have hired.
(and if you think THAT is a state, you simply show your inability to distinguish between voluntary and involuntary associations)

Give me you address – and we’ll see how long your tribes of voluntary associates would stand against my government army. Khlynov, please, don’t call yourself general. Not even private. Tribesman – would be fine

There would be private property and free exchange. Any violation of these would be the negation of private property and free exchange. You either have private property and free exchange, or you do not. Obviously.

In a free market, governments would not print money

Khlynov. How are you going to conduct “free exchange”? A sack of grain against two sack of kartoshki? two cows agaisnt one horse? Two jap compacts against one Ford 350 truck? Oh! I know. You’ll print free money!!! Othewise you’ll have to use exotic shells. Kolt would also work – in disputes! Remember “God created people, Kolt made them … free” (in your terms).

tess: military expenditures by the state are not a part of the free market. Logically. There is no “market” for state military procurement, since the ‘buyer’ is not a market economic actor.

Tell this to the Boing, MD and other guys who are fighting for “non-market” orders. BTW I have never heard that any tribe of voluntary associates ever bought a nuclear attack submarine to protect their free market

I value this apple less than that piece of steak” thought the gardener and exchanged it for a steak from the herder. The Herder valued the steak less than the apple. So both are better off

Looks like the both are clinical idiots but gardener is also a crook Unless the herder is actually working on the trade floor of cattle exchange and his regular daily commission is two steaks. Than he is the crook. But his irresponsive merket behaviour causing the drop of steak value and – as the result – the crisis of cattle exchange. Khlynov, you see! I’m trying to stay in very simple terms.

PS. Don’t forget to tell your address – I’ll send one parashutno-desantniy batalion

“The desire to turn economics into an ‘exact’ science is to a significant degree at the root of what is currently ailing our economic system.”

Economics does not be an ‘exact’ science such as physics in order to be considered scientifically rigorous (e.g., epidemiology, population genetics.) One advantage of such an approach is that its progress does not depend on a particular doctrine or ideology to be true.

Sorry. I was not clear: epidemiology and population genetics are two examples of scientifically rigorous fields that are not ‘exact’ like physics.

Despite his ostensible break from Marxism, his murderous movement was deeply influenced by Marxist ideology.

Kolya. Both World Wars were started by “capitalist” country. And Hitler was not Marxists at all.
More close comparison – sharks and orcas . One could say they are both predators (“communists”) and living in the sea (“marxism”). But we both know that one is fish and another – mammal. And even not all whales are predators. So I would stay away from formal labeling.

In the meantime capitalism hits the fun in Iceland: the workers from Eastern Europe (in particular 15,000 of Poles) are leaving the country:

http://www.km.ru/news/view.asp?id=875811BA04E64449B4CB3AB6927010A3

that its progress does not depend on a particular doctrine or ideology to be true.

Democrats would never ever agreed that apples are falling down because of G-force if Newton was Republican. And vice versa.
But progress indeed doesn’t depends THAT much on doctrines (well someone was burnt just for the idea that Sun was not circling around Earth). It mainly depends on human absurd desire to brake everything to find out how it’s made.

Dima.
This means that market in Poland is more free than in Iceland

PS. This is a good news BTW (I knew it few months ago though).

Does capitalism have to be so blind, slow and painful? Why can’t we ever put a $$ value on these invisibles before catastrophe happens?

tess, you are dead wrong.
This is exactly how capitalism works. Why should I bother to improve – read “increase my cost” – truck if the Army is buying them as they are? This is not my problem – better fuel millage, better armor etc. I’m patriot but I’m not paid for that. So as soon as buyer – read “army” – asks for better armor and agrees to pay for it – I’ll do my best to deliver it. At max price possible
Army is just a specific buyer but a HUGE one.
When US base was closed in Iceland they were selling everything they didn’t want to bother to get back. It was AMAZING! So much stuff that have never been even unpacked! For years (as I can read shipment dates on the boxes you know)! Ordered, paid, delivered and … abandoned. But what really amazed me were few trucks they were selling. OMFG! I’m rather old person and remember such primitive trucks back in Soviet Union. In 60s. But this was 21st century US Army! I haven’t seen such trucks in Red Army.

As General is saying – this is free market. So if you can fool someone – feel free to do it!

Tim mentions the growing middle classes in Asia. That is true. But capitalism has also created vast slums of millions of people.

No Sean, it hasn’t. Vast slums of millions of people is the natural state of being. Poverty is natural, it is wealth generation which is the human action which avoids the fate nature deals us. Capitalism lifts millions out of poverty even if it leaves millions left behind. This is not the same as creating poverty.

By all economic statistics, the gap in wealth on a global scale is rising and our ecology has becoming increasingly dire.

And where is this ecology the most dire? In the capitalist world, or the ex-communist hell-holes? Are American rivers cleaner than they were? Is German air cleaner than it was?

Our ecology is not becoming increasingly dire, and if it were, it is going to be rather difficult to place the blame on capitalism rather than crap government.

Ivanov, you referenced my questions. How can questions be “dead wrong.” Though certainly some people have died for asking questions.

…Are you responding to General Khlynov’s response to my questions? To paraphrase this, he said military expenditures are not part of the free market, thus aren’t relevant to this discussion of capitalist economies. I find this pretty lame, if not dead. Because like you, I think the military has become the customer that dwarfs all others in many US industries, cars among them. So how can DoD spending be anything but relevant.

Both of these statements are at such a level of abstraction, I don’t even know where to begin. The key ideological fetishisms here are “choice” and “free”.

If you think that “choice” and “free” as presented in a discussion on economics can merely be discarded as ideological fetishims, then you’e in a similar camp as those who scream “KGB” every time Russia is mentioned.

With oil prices falling, Russia might not have much of a budget surplus for much longer. Commodities exports play a huge part in their state budget. For their current budget to be in balance, they need a price of $70 per barrel. It was about $71 per barrel on Friday.
( http://www.forbes.com/feeds/afx/2008/10/11/afx5539722.html )

The Russian government does have large foreign currency reserves (not the same thing as a budget surplus), but they’ve been spending down these reserves at a fast rate since the invasion of Georgia to keep the ruble from losing its value.

“Traders say the bank has spent around $14 billion or 2.5 percent of reserves on interventions so far this week alone in a fight to prevent the currency from weakening beyond the 30.41 level against a euro-dollar basket.” ( http://www.reuters.com/article/GCA-Oil/idUSTRE4986GC20081009?pageNumber=1&virtualBrandChannel=0 )

Russia’s financial problems are not just the result of a lack of liquidity in global financial markets. [And let's not forget Putin was claiming earlier in the year that Russia would be immune to the problems in western financial markets.] After BP and Mechel’s problems, investors are going to view Russia as a riskier investment than before.

This guy was right when he said in an interview published on Sept 16 that the financial sector would get much worse in Russia. ( http://www.rferl.org/content/Worst_Russian_Financial_Sector/1200407.html )

Dima.
This means that market in Poland is more free than in Iceland

PS. This is a good news BTW (I knew it few months ago though).
———————————————
Well, it seems Iceland put too much trust into the financial pyramid, – as I understand most of Iceland economy was banking? I was on a layover at the airport in Rejkjaviksk in May and couldn’t help noticing how expensive everything was, – even in comparison with the prices in London or Moscow. Then I thought: “There must be a lot of money floating around this small country”. Now the money is gone … Don’t worry, the Russians are coming (with some money)! Just hang in there.

Kolya,

I’ve read about this saying by Albert Camus second hand. Quoting Dmitry Orlov (“Reinventing Collapse”):

“Thus, the purely capitalist or the purely socialist country is like a stroke patient who denies the existence of her right or her left hand. The fact that the ideological distinction is artificial was first spotted by Albert Camus, who pointed out that both Western industrialism and its communist version achieve similar results through similar means – industrialization and specialization of labor. In the 1950s, in Defence de L’Homme Revolte, Camus accurately predicted that if the communist experiment were to fail, this would be misunderstood as an ideological victory by the West”.

Tim, you wrote:

“And where is this ecology the most dire? In the capitalist world, or the ex-communist hell-holes? Are American rivers cleaner than they were? Is German air cleaner than it was?”

Tim, you are right that the US rivers are cleaner than the ones in central Russia. But that happened DESPITE the capitalists, not because of them. Most capitalists fought tooth and nail against pertinent environmental laws. For our cleaner environment (relatively speaking) we have to credit liberal democracy (which is not the same as capitalism) and not capitalism. And, as in the Richard Posner (the conservative scholar) quote I included a couple of weeks ago, people such as Friedman and Hayek were proven wrong in their dogmatic belief that liberal democracies are incompatible with mild forms of socialism (such as in Scandinavia)–such economies are not an inevitable slippery slope to totalitarianism.

Tim, you are right that the US rivers are cleaner than the ones in central Russia. But that happened DESPITE the capitalists, not because of them.

Well, not quite. The capitalist economies ensured that we became rich enough to care about the environment and spend money protecting it. True, the companies themselves opposed such restrictions, but the capitalist economies are the ones which ensure the welfare of the environment. Even capitalist countries which are not liberal democracies – Singapore springs to mind – has very tight environmental regulations, for the reason that they can afford them.

Thanks for the quote, Dima. I have to dig out my Camus books once again. I’m fond of Camus. A much cooler dude than Sartre, who pushed out Camus for not toeing the pro-Soviet line.

Ivanov,

the amount of ignorance in your postings is mind boggling. You win.

Well, it seems Iceland put too much trust into the financial pyramid, – as I understand most of Iceland economy was banking?

You right, it was pyramid. But very-very small one. Compare to other pyramids around

2 tess:
We are in the same trench! DoD business is among three largest in US – agricultural, car and defence. And as such – it a heavyweight player on the market. But what do you want from Khlynov? he is general after all

Khlynov, you haven’t answered what “”currency” you gonna use in your free exchange…
Unless you plan to change one apple for one steak…
More exactly – one apple and one Kolt for one steak. Unless Herder is in bullet-proof jacket and has M16. Then he’ll take your garden for free…
That’s humans you know.

PS. Vikings always win

And of course, to the socialist mind, all good things in countries with somewhat free markets are the result of non-market actions, while all the bad things in somewhat socialist countries are the results of capitalist conspiracies.

Khlynov, you haven’t answered what “”currency” you gonna use in your free exchange…

Are you really that daft? Whatever currency suits the people involved in the trade. Most likely gold, or gold-based tokens.

Whatever currency people willingly accept is a good enough currency for trade.

Like everything else in a free market, there are no predetermined outcomes, no central planning, and no government imposed solutions.

But, to somebody who believes that individuals are too dumb to know what’s good for them and that for the world to function properly one needs to have bureaucrats and politicians make decisions for everybody else.

Tess – the reason state military expenditure are not part of the free market is this: the funds used for buying military equipment have not been earned in free exchange, but have been expropriated at the barrel of the gun (taxes are not voluntary contributions).

Anybody whose livelihood depends on plunder (state government) is by definition not a free market actor. That’s pretty basic.

That contractors compete for the government contracts has as much to do with the free market as gun-man trying to sell their services to a war-lord.

Anybody whose livelihood depends on revenues gained from violent extortion is not a participant of the free market, since the free market pre-supposes voluntary exchange.
Simple.

Well, it seems Iceland put too much trust into the financial pyramid, – as I understand most of Iceland economy was banking?

You right, it was pyramid. But very-very small one. Compare to other pyramids around
——————————————
Let’s say positive, the American way and see the brighter side of events around us. Iceland’s pyramid has collapsed, marking a beginning, not an end, I hope. However, other “bigger” pyramids are still around, on an artificial “life support”. For how long?

By the way, Ivanov, no question about it, Russian military trucks are superior. Well, at least judging from my own experience of riding in both Russian and US military trucks several years ago. I remember that back in 1990 I was amazed by how an old Kamaz was able to handle terrain in the Altai mountains that would have been totally impassible to any American truck of similar size.

I know we’re talking about civilian manufacture here, but Belarus exports tractors to Australia and other places which AFAIK are of pretty good quality.

“Anybody whose livelihood depends on revenues gained from violent extortion is not a participant of the free market, since the free market pre-supposes voluntary exchange.”

Not so simple, since there has never been an emprical example of such a free market and thus no way to determine claims about its supposed nature. Anyone who receives a state paycheck depends on revenues gained from (the threat of) violent extortion, and the existence of the state is required in order to ensure the possibility of voluntary exchange in other parts of the society.

I know we’re talking about civilian manufacture here, but Belarus exports tractors to Australia and other places which AFAIK are of pretty good quality.

If they are the same as the ones exported to the UK which I drove when I worked on a farm in 1996, they are of appalling quality.

Could be.

“the existence of the state is required in order to ensure the possibility of voluntary exchange in other parts of the society.”

Chris, you have said that before, but you (nor anybody else) has ever provided a really good argument for this. Repeating nonsense does not make it true.

The evidence of history and current experience is clear: private property, voluntary exchange, and money predates the state and can and does exist independently of the state. In fact, it can and does only exist in those areas of life where the state does not interfere.

Thankfully, in the Western world, the state largely does not interfere with voluntary exchange and respects private property – and thereby allows its own continued parasitical existence. Whenever the state tries to fully control all trade and property, the economy dies down and society no longer can support the state.

If the state were in fact necessary for economic life to function properly, would that not mean that more state is better than less state?

The same argument you make for the state can be made for thieves: since no society has ever existed without thieves, thieves must be necessary for society to exist.

Please provide me with an economic argument against thieves that would not automatically be an argument against the state.

Of course you cannot, so you will try some weasel non-economic argument.

You are simply wrong, and you are temperamentally unwilling to consider any alternative argument to your childish believe in the necessity of the state.

I doubt you have ever read von Mises or any other serious economist not approved by a state financed professor.

“The evidence of history and current experience is clear: private property, voluntary exchange, and money predates the state and can and does exist independently of the state. In fact, it can and does only exist in those areas of life where the state does not interfere.”

Au contraire. The “state” (a nebulous concept) has existed throughout human history. Private property, voluntary exchange, and money (?) may predate the state, but it would be difficult to know, since before that period there was no writing and hence no records of such activity, unless you are looking at anthropological descriptions of preliterate tribes.

The state exists in large part for the precise reason that individual economic agents (as opposed to the agents as a whole) have no interest in voluntary exchange or private property or contracts. They have interest in accruing as much economic benefit to themselves as possible, and “voluntary exchange” and “contracts” are mechanisms used by the weak, not the strong. A strong agent does not engage in voluntary exchange; he engages in forcible exchange. To prevent this from taking place requires the existence of something more powerful than individual economic agents or groups thereof and that stands apart from them, so that it can adjudicate between them and limit their power. This is the state.

Appealing to von Mises or any other writer of Holy Books carries no weight with me.

Tim wrote:

“The capitalist economies ensured that we became rich enough to care about the environment and spend money protecting it. True, the companies themselves opposed such restrictions, but the capitalist economies are the ones which ensure the welfare of the environment.”

I guess I can buy that if you include the government that imposes those unwelcome (for the capitalists) restrictions to protect the environment as integral part of the capitalist economy. My guess is that compared to the US the Nordic countries have more environment friendly measures. I’m bringing this up because in the US many conservative/libertarian types would scoff at the notion that the Nordic countries are capitalist economies.

In any event, my non-expert view is rather pragmatic: if the systems allows a market to work, in which citizens are free to move and express themselves, and where both people and the environment are protected, then that’s probably fine with me–regardless of the label.

With respect to the subject of Sean’s post, I have an admission to make. I have not yet watched Wolff’s video. I downloaded the lecture and will be watching it today. I’m not familiar with Wolff. I read a bit of the stuff written by his University of Massachusetts, Amherst, colleague Herbert Gintis, an economist who is big on game theory and evolutionary biology.

PS if someone can come up with a single example in recorded history of a society organized on any economic basis other than hunter-gatherer that had no state, I will be greatly indebted.

“The capitalist economies ensured that we became rich enough to care about the environment and spend money protecting it. True, the companies themselves opposed such restrictions, but the capitalist economies are the ones which ensure the welfare of the environment.”

This is true, but I would like to point out that this development also coincides with the establishment of (near) universal literacy and education and the corresponding emowerment of the general population, and it is difficult to discern what the driving factor/s is/are.

“I’m bringing this up because in the US many conservative/libertarian types would scoff at the notion that the Nordic countries are capitalist economies.”

But those people are crazy, Kolya.

“If the state were in fact necessary for economic life to function properly, would that not mean that more state is better than less state?”

It does not follow. If X needs Y to function, it does not follow that more Y is better. A certain amount of Y may be necessary for X, but too much Y may well be toxic and destroy X.

“If X needs Y to function, it does not follow that more Y is better. A certain amount of Y may be necessary for X, but too much Y may well be toxic and destroy X.”

Exactly.

“If human beings need food to function, then it follows that that more food equals better human functioning.”

“I have not yet watched Wolff’s video.”

Have any of us?

PS if someone can come up with a single example in recorded history of a society organized on any economic basis other than hunter-gatherer that had no state, I will be greatly indebted.

- Much of the “Wild West” up to the time of the Civil War (don’t watch Hollywood movies for a true picture of the West, but do some readings)
- Medieval Iceland
- Medieval Ireland
- Most of Arabia until about the 19th century
- Most of Europe prior to the Roman Empire, and in the non-Roman area, prior to Charlemagne. In the Slavic areas much longer than that.
- pre-Colonial Somalia, as well as Somaliland today, as well as most of Somalia outside the immediate neighborhood of Mogadishu (vastly more peaceful than generally believed)
- Most of Afghanistan (outside Kabul region, there is no state government)
- Most of the Tribal Areas in Pakistan (where the state is generally ignored and non-existent)
- Much of Central Asia, prior to Genghis Khan, as well as after the fall of the Mongol empire until about the 18th century, by which most of it was one way or the other violently occupied by states.

These are just off the top of my head.
Say “thank you”

The hunter-gatherer life-style has been out of fashion for most people in Eurasia for probably the last 10,000 years or so.

There was inter-regional trade prior to the development of agriculture.

It was only with the beginning of agriculture, however, that states became possible, since agriculture produced enough surplus to feed conquerors sustainably.

If states were necessary for private property, trade, and money – wouldn’t they predate the development of property, trade, and money rather than follow in their wake?

Private property, trade, and money pre-date and enable the state, not vice versa. To think otherwise betrays a complete inability to think clearly.

None of you will be able to provide me with an argument why theft does not serve a useful economic function for everybody – not just the thieve – that does not also serve as an argument why the state does not serve a useful economic function – not just for those involved in controlling the state.

PS: I have watched the video, and it is laughable.

Oh, and to forestall the dumb argument you will be coming up with: current non-state regions are vastly poorer than state-regions because there is plenty of people trying to establish a state. It’s like gang-land warfare – until one of the gangs wins, there will be fighting.

This does not mean, of course, than being controlled by a gang is a good thing. It simply means that being controlled by one gang is better than being caught in gang-land warfare.

What do gangs fight for? The right to live by plunder. In other words, to form a government not based on consent but on violent taxation.

It would be much better for all involved not to live in a society where one group lives by the violent extraction of loot.

There is no economic benefit in having one segment of society live by violently extracting loot from another.

Yes, one could argue that ‘it has always been so’, but that argument has also been used to favor slavery, for example.

A world without states would be a much better world than one with states.

But, as long as you folks believe that the only way to secure private property is by looting it, and as long as most people believe that to be the case, things will remain as they are.

In short, each of you who believe that the state is necessary and good and beneficial are responsible – through your active consent – for war, man-made famine, environmental degradation (which is exclusively the result of insufficient private property and state subsidies for economically detrimental activities) and most crime (since most crimes stem from state prohibitions on behavior that does not damage anybody but possibly those involved in it directly).

There is only one thing states are better at than free-market actors: violence. No institution in the history of the world has been responsible for more violent deaths than the State.

“If states were necessary for private property, trade, and money – wouldn’t they predate the development of property, trade, and money rather than follow in their wake?”

No, they would develop as the institutions of private property, trade, and money developed. Moreover, they are not necessary for it, but for nonarbitrary regulation of it, especially as the population grows.

“None of you will be able to provide me with an argument”

That’s because your attachment to your belief system is religious, as well as bizarrely emotional.

It’s so funny when people with marginal, cultish beliefs take the intellectual high ground.

“which is exclusively the result of insufficient private property and state subsidies for economically detrimental activities)”

“Exclusively.” The word that is the hallmark of the ideologue.

Chris,

it’s so funny when people with no rational arguments resort to name-calling.

States did not ‘develop’, but were imposed violently through conquest, and perpetuate themselves through the threat and exercise of violence.

Please, provide me with an argument why theft is not beneficial to anybody but the thief – and construct it so that it cannot be applied to non-consensual forms of government (logically, self-government is consensual and hence beneficial for efficiency reasons)

But, instead of giving me an argument, you simply resort to name-calling. If you could, you would resort to violence to silence my opinion. Actually, come to think of it: you do, since you support the violent suppression of social interactions you do not approve of (I assume you vote in political elections. If you do not, I apologize).

“- Much of the “Wild West” up to the time of the Civil War (don’t watch Hollywood movies for a true picture of the West, but do some readings)…

yadda yadda

Asia, prior to Genghis Khan, as well as after the fall of the Mongol empire until about the 18th century, by which most of it was one way or the other violently occupied by states.”

That’s quite a list of economic utopias there.

“Exclusively.” The word that is the hallmark of the ideologue.

And that proves … what? Giving a name to something does not refute or prove it.

You probably consider physics an ideology, too.

The reason bodies attract each other in vacuum is exclusively due to gravity.

The reason the sun warms the surface of the earth is exclusively due to radiation.

And biology is an ideology, too, right?

The reason there is such a diversity of species on this planet is exclusively due to evolution.

So, having accepted that my statements are ideological, now maybe you can proceed with logically refuting them?

Claiming that \”no argument you will use will convince me\” won\’t wash. I am asking for an argument that will convince me. So far, you have done a lousy job at it.

You said: yadda yadda

Your ability to argue is stunning.

You said
That’s quite a list of economic utopias there.

You did not ask for economic utopias, but for an example of state-less societies that worked above the level of the hunter-gatherer. The list was given. Your question is answered. You refuse to consider the implications.

In other words, you are either unwilling or incapable of rational discussion. I have to conclude it is the former. In which case the discussion is over, since you refuse to engage in it.

I have provided you with answers to all your questions. You refuse to acknowledge them. You refuse to engage in them. And you refuse to answer questions I have put to you.

You obviously do not seek a discussion, but merely delight in insulting me.

I will therefore no longer waste my time trying to discuss with somebody who is not interested in a discussion.

“If you could, you would resort to violence to silence my opinion.”

That’s me, Chris the Crusader! You’re the guy running around insisting that everybody agree with you, not me. I don’t care what you think.

But now that you mention it, let me repeat the central argument.

Societies are composed of agents, individual or communal. These agents are interested in their own interests, as they define them. Things like laws and contracts are only workable if agents are willing to acknowledge the demands of others. Agents in positions of strength have no interest in doing so. It limits them. They gain, not from law, but from arbitrariness. Thus, in order that law be meaningful, something else must exist that is stronger than them that can enforce the law. This something else is, ta-da, the state.

Just to reconstruct the sequence of events that should show clearly that Chris is not interested in a discussion:

Chris asked:
PS if someone can come up with a *single* example in recorded history of a society organized on any economic basis other than hunter-gatherer that had no state, I will be greatly indebted.

I provided him not with a SINGLE ONE, but with NINE (9):

- Much of the “Wild West” up to the time of the Civil War (don’t watch Hollywood movies for a true picture of the West, but do some readings)
- Medieval Iceland
- Medieval Ireland
- Most of Arabia until about the 19th century
- Most of Europe prior to the Roman Empire, and in the non-Roman area, prior to Charlemagne. In the Slavic areas much longer than that.
- pre-Colonial Somalia, as well as Somaliland today, as well as most of Somalia outside the immediate neighborhood of Mogadishu (vastly more peaceful than generally believed)
- Most of Afghanistan (outside Kabul region, there is no state government)
- Most of the Tribal Areas in Pakistan (where the state is generally ignored and non-existent)
- Much of Central Asia, prior to Genghis Khan, as well as after the fall of the Mongol empire until about the 18th century, by which most of it was one way or the other violently occupied by states.

His response?

yadda yadda
That’s quite a list of economic utopias there.

The only other person as unwilling and/or incapable of reasoned argumentation I have ever encountered was Mike Averko.

“I have provided you with answers to all your questions. You refuse to acknowledge them.”

You’re hilarious. You haven’t made a single argument. What you have done is resort to application of your faith-based metaphysics (which for you seems to be self-evident) and call everybody else dumb, which is not a good debating tactic for somebody whose opinion is in the minority.

In fact, though, I doubt that the list of societies given that supposedly had no states did not in fact have any.

“I provided him not with a SINGLE ONE, but with NINE (9):”

Fine, I shouldn’t have said “hunter-gatherer,” I should have said “high population,” which of course is a difference.

Although it is true that such a list does not exactly inspire one with confidence in the stateless model.

Chris,

since all you have to offer is a repeat of Hobbes, answer me the Hobbesian conundrum: if the state is the most powerful institution in society that limits all others, what limits the power of the state to the point that it must abide by the laws it enforces, rather than create laws that benefit only itself?

You may have missed it, but Hobbes’ solution is logically unsound – it suffers from the inverse problem of the theological ‘first mover’ conundrum.

Theologians never acknowledge the latter, while believers in the state never acknowledge the former.

In both cases, trained prejudices instilled during childhood trump logical thinking.

“if the state is the most powerful institution in society that limits all others, what limits the power of the state to the point that it must abide by the laws it enforces, rather than create laws that benefit only itself?”

This is why you have division of powers.

Fine, I shouldn’t have said “hunter-gatherer,” I should have said “high population,” which of course is a difference.

Maybe next time you are more precise in your questions?

What do you mean by “high population”?

But, no matter what answer i give you, you’ll just ignore it.

and you have yet to answer any of my questions.

Until you do, I won’t waste my time on you anymore.

I do apologize for my previous dickishness, by the way.

an answer at last:

“This is why you have division of powers.”

But, could we please move beyond high-school civics bromides?

WHOSE power is divided, and who polices the division?

The power of the State is divided between different groups that control the state.

Who controls the State?

“{Maybe next time you are more precise in your questions?

What do you mean by “high population”?”

You expect precise definitions in a blog comments section typed while someone is at work?

“High population” doesn’t work. How about “conducting complicated, coordinated and lengthy operations over large areas and employing large amounts of standardization and legalism.” I.e., what is usually refered to as “civilization”?

“But, no matter what answer i give you, you’ll just ignore it.

and you have yet to answer any of my questions.”

I have answered many of them.

“The power of the State is divided between different groups that control the state.

Who controls the State?”

That would be the various people in the state. Which, in any democratic society, is, in theory, everybody.

I wish people would stop talking about the “State” as if it were a thing, rather than an abstraction, or as if there were a neat dividing line between the state and the rest of society.

I wish people would stop talking about the “State” as if it were a thing, rather than an abstraction, or as if there were a neat dividing line between the state and the rest of society.

Well, your wish shall be unfulfilled.

The State is a social institution, and as such it is as real as any other social institution.

The State is that part of society that claims for itself the territorially limited monopoly on violence, and against which no violent act is to be considered legitimate.

The division between the State and all other social institutions is that the State is the only organization whose members have the legal right to sustain their livelihood by means other than voluntary trade or voluntary donations from other members of society.

Any person who has the legal right to sustain his or her livelihood by partially or wholly by means other than voluntary trade or voluntary donations from other members of society is by definition part of the social institution called The State.

The degree to which they are members of the State depends to the degree by which they sustain their livelihood by means other than voluntary trade or voluntary donations from other members of society.

The dividing line between society at large and the State is therefore behavioral – which makes complete sense, since we are talking about social institutions.

Is this clear enough?

You expect precise definitions in a blog comments section typed while someone is at work?

Yes, I expect clarity of language when discussing with people.

I take all discussions completely serious.

So, Chrisius, how does it feel beating your head against the wall?

Khlynov, out of curiosity. What historical or contemporary countries/regions/nations/states (whatever description you prefer) do you use as positive examples? Allowing for the fact that there are no perfect fits, which places (past or present) match the system you prefer?

I get the impression (perhaps wrongly) that you are a strong advocate for something that is more of a Platonic ideal that never had a counterpart in the real world. Sort of like communist ideologues liked to talk about building communism, a communism that was somehow always beyond the horizon. Once again, perhaps I’m wrong in my impression–that’s why I’m asking you.

“What historical or contemporary countries/regions/nations/states (whatever description you prefer) do you use as positive examples?”

Examples for what?

I thought I was clear, Khlynov. True world examples of places that had/have an economy that functions according to what you believe is the best way.

Your question implies that if there were no historical examples for it, there is no way it could work. To call such a view conservative would be excessively exuberant.

Somebody should have told John Locke that there never has been a liberal society and that his entire treatise on government was silly.

And those silly anti-slavery types back in ancient Rome. Didn’t they know that all civilizations worth mentioning had slavery? What would we do without it, who would do all the dirty labor? Proposing a non-slave holding social order is sheer madness, isn’t it?

See, the difference between the proposal for a state-less society and communism is that to achieve the former no changes to human nature are required. All that is necessary is a reexamination of basic beliefs. Just like no change in human nature was required to get rid of slavery.

Less coercion is better than more coercion.
Less violence is better than more violence.
Less robbery is better than more robbery.

More of the things we like is better than more of the things we don’t like.

Not initiating violence is better than initiating violence.

Simple, really.

PS if someone can come up with a single example in recorded history of a society organized on any economic basis other than hunter-gatherer that had no state, I will be greatly indebted.

Chris, I see no reason to argue with general. Even laughing at him is getting borring.
I’ve started to think that he is true communist – as there are only two types of social systems that are supposed to work stateless. Primitive tribes and communism. But I doubt that Khlynov is advocating the former – free exchange of primitive goods with the help of exotic shells

PS. Belarus tractors might be good in price/quality respect but in the field I prefer quality Well they were popular in Iceland (and might be popular again soon)

I thought I was clear, Khlynov. True world examples of places that had/have an economy that functions according to what you believe is the best way.

Well, you used the word ’state’ in the list of potential positive examples. That confused me a bit (and indicates you aren’t paying attention).

There are currently no examples of economies that function in the ‘best way possible’, since almost every square inch of the world is controlled by states, with the exception of some marginal lands that could not effectively sustain a state.

However, it appears quite clearly from the historic evidence – if not pure reason – that as states reduce their role in societies, societies become better off overall.

A radical, immediate removal of the State from society tends to create predictable problems – but that does not mean states are necessary. It simply means that the state has become so much part of society, removing it is painful.

However, the gradual removal of the state from society has always proven beneficial to society.

Gradually lowering taxes, while reducing spending always improves the welfare of society.

The gradual removal of slavery in the British Empire has had very positive results (while the violent, radical and immediate removal in the US has not).

Slowly reducing the State to 0 would prove absolutely beneficial to society as a whole. There is no evidence that societies suffer from the gradual removal of the State. There is plenty of evidence that the increasing role of the State in all societies has always been detrimental to the long-term welfare of society.

“I have not yet watched Wolff’s video.”

Have any of us?

I did.
That’s why I asked my questions at the start of this thread.
What I couldn’t figure out – what’s wrong with Richard’s shirt and jacket? He looks like he had to fight to get to the podium

Ivanov,

your general ignorance of economics is already richly established. You believe Marx provided a good understanding of the market economy. How much more do you need to establish that you are a fool?

You still haven’t answered the question of whether you believe in the cost theory of price, the labor theory of price, or the demand theory of price.

Do you even know what the difference is between value and price, or do you think they are the same?

“Please, provide me with an argument why theft is not beneficial to anybody but the thief ”

Robin Hood

Khlynov, thanks for the clarification. I guess I was right when I wrote:

“I get the impression (perhaps wrongly) that you are a strong advocate for something that is more of a Platonic ideal that never had a counterpart in the real world. Sort of like communist ideologues liked to talk about building communism, a communism that was somehow always beyond the horizon.”

Don’t worry, I will not bother you with any more questions or remarks.

Tess,

You answered: Robin Hood to my question: “Please, provide me with an argument why theft is not beneficial to anybody but the thief ”

Fair enough. So the friends of the thief benefit, too.

The legitimate rights of the merchants robbed, however, have been violated, and he, his family, and his friend have been made poorer with no benefit to themselves.

That’s the difference between voluntary and involuntary exchange: in the former, all parties benefit, in the latter only one party benefits.

Kolya: the benefits of less State as opposed to more are already visible to anybody with half a brain and manifest themselves in greater economic welfare for everybody (with the possible short-term exception of those who rely on the State to make a living).

What i suggest is not Utopian, simply a gradual increase of what we already know is a good thing: voluntary exchange as opposed to involuntary exchange.

Every day we can witness that voluntary exchange benefits those who engage in it. I don’t suggest we have to change the entire world completely before we can see the benefits of what I propose. The benefits already exist, I simply advocate to have more of that.

Communists, however, promise us the world will be better only after we have replaced the current system totally with the new system. All intermittent hardship is supposed to pay of later.

What I advocate will pay off immediately, even if we do it only in small baby steps to get used to it.

GK: I hate to argue against you, since you’re generally on the right side, but even I don’t buy the state-less possibility. I used to be an anarchist, so I’m sympathetic, but I just don’t think it’s realistic, precisely because of human nature. We’re selfish, so why would we ever give something up voluntarily, when we can just take it? Really? Your answer will probably be, my friends and I will arm ourselves and defend my property. First, with all your friends armed, do you think there will be no internal disputes pitting strong against weak? Second, once you have the biggest gang, what’s to stop you from taking other people’s stuff? The fact that you’re a nice guy? Well, you might be, but I wouldn’t count on that being the case for every group of individuals organizing their posse in your state-less world. Moreover, at a certain point, that posse itself becomes a state, enforcing its will on those beneath it.

You are definitely on the right side of the divide, but in order to protect the weak, we need a state that fulfills two basic functions, the protection of its subjects and the enforcement of contracts. No, it will never be truly fair. Yes, there will always be powerful people able to influence the system. But we need to create a system which holds these forces in check, and the liberal democratic one is the best we’ve come up with so far. The fact that you don’t vote saddens me for two reasons. One, you would probably vote for my party, and we need all the votes we can get right now. Two, if you don’t participate, you let other people determine your fate, and subject yourself to a “bad,” rather than “less bad” outcome.

The “first mover” isn’t a problem in theology, we define him out of the equation. God created and is outside the system of time and space, so he can’t be bound by it Unfortunately, that trick doesn’t work with the state. The state will always tend to more power, and in a democracy, it is up to the people to keep a check on it. We do it through two means, formal and attitudinal. Formally, we create a structure where the government is accountable and balanced against itself (of course, it’s a bit out of whack right now because we have unelected individuals who serve for life making our laws, which the Statists love). We also have to inculcate in our population certain beliefs about the state and its behavior towards its subjects, such as civil rights, so that the people who make up the state themselves believe it should be limited.

I suppose that is, in three paragraphs, how I went from an anarchist to a conservative (minarchist).

Owen,

I see no need for advocating anarchy (at this point), since I would be happy if our political system would move towards minarchy.

As long as people come to recognize that the state is at best a necessary evil, I’ll be fine. Right now it seems that most people recognize the state as something inherently good.

I am convinced that once the state is removed from most aspects of life (excluding territorial defense and the enforcement of court orders), few people would fail to notice that there is no need for a state.

If not, things would at least be vastly improved over the current system – and I would be a lot happier.

The reason I don’t vote is that I don’t think I have the right to force others to live according to my beliefs. I simply ask not having to live according to theirs.

I think my fundamental disagreement with you is that I do not believe humans are inherently disposed towards aggression, but that the instinctive human instinct is towards cooperation.

But, as I said, I can accept the minarchist compromise, since I am promoting gradual change in any case, so the stage of ‘minarchy’ is fully on the path towards my social ideal.

What I mean to say is this: the legitimacy of the state is a collectively created social fiction. It is based on certain assumptions about human behavior which, in my opinion, are mistaken.

The only way the State can be defeated is by convincing people that the assumptions supporting its perceived necessity are invalid.

Which is why I do not advocate neither the use of violence nor political means to overcome the State.

Have you ever read Anthoy de Jasay\’s \”Against Politics\”? I think he provides the best summary of the argument against the idea of politics (and hence the State).

Khlynov, all right, it’s much clearer now where you are coming from. It’s a very idealistic view. By that I mean that it’s an unrealistic view. Considering human nature and the present (and past) state of the world, it will never happen. I think most of us sympathize with anarchy. Indeed, why have a state at all? Alas, we are what we are. Human nature. We cannot transcend our biology.

This does not mean that to envisioning a much better state of affairs (whether at the individual or social level) are a waste of time. (It depends on the vision, of course.) As long as we don’t ignore the lessons of reality, our visions or theories can be very helpful. For that, though, we have to be willing to modify our vision/theory according to the dictates of the real world.

Kolya,

idealistic? Not sure. Most people I talk to find my vision scary (most of the people I talk to happen to make a living off the state in one way or the other, including myself).

In many ways, it would also be a much harsher world for many whose lives are currently quite easy.

A stateless society is not necessarily a kinder world. It would simply be a much more morally acceptable world, I think.

The logic of a stateless society has some curious implications (it would have ‘crime’, but no prisons, for example: anti-social behavior would result in de-facto banishment; a far worse fate in many ways than prison).

It would also be a world far less tolerant of social deviance in general. Compared to current, Western society a stateless society would likely by highly conservative in its values: the social structure would be similar to a tribal society, though less bound to any specific territory than traditional tribes, and more flexible in terms of membership.

Life would be largely urban, with rural areas inhabited mostly by the very wealthy and agricultural industry.

A stateless society would have many aspects that I would probably not like (such as no ‘right to privacy’ – but the right to technologically guard privacy, for example).

Welfare would be privately organized – and hence put significantly higher demands on its recipients than our current system.

There would be no general laws.

And so forth.

For all its harshness, a stateless society would also be free of war, unlikely to have famines, and be relatively ‘crime free’ within centers of civilization (i.e. urban and commercially viable rural areas).

Outside civilization centers, life would be pretty miserable – mostly because these areas would be populated by those who in our current society constitute the anti-social layer of society.

Idealistic paradise? Hardly.
Morally superior to our current world? Absolutely, provided you believe that the right to private property should be absolute, and that it should never be legitimate to initiate violence.

“the right to private property should be absolute”

What do you mean by that? For instance, would a billionaire have the absolute right to give all his riches to his good-for-nothing son?

Absolutely yes. If that’s what he wants to do. I have no problem with that. It’s his money.

Is it the the same with land? Let’s say this billionaire buys an island. Villagers lived there for generations (let’s say there are 10,000 of them). They don’t own any of the land. The previous owner leased them the land (to live and farm on) on a ten year basis. The ten years are up and the new owner wants them out. Would he have the absolute right to kick them out because he’s the new owner?

Hey, I just saw the Wolff lecture. I found it interesting. Sean do you know whether his figures are roughly correct (re the stuff on the blackboard)? Quite stark and illustrative.

Owen wrote:

“… listening to Richard Wolff made me physically sick. The seething anger in his voice, …”

Wow! Perhaps because I’ve been exposed to lecturers (both Right and Left) whose derision toward ideological opponents were much more pronounced, I find’s Owen’s reaction much too oversensitive.

As to Wolff’s wrap up, if those Silicon Valley engineers actually created a form of communism, then I have been involved in several communist enterprises during my life. Which is fine by me–I don’t care about labels that much. I guess Wolff doesn’t either since he claims not to care whether those software engineers call it “innovative entrepreneurship” or “socialism”. Maybe so. I don’t think is that simple, though. As Ivanov pointed out, such things can only work for enterprises of rather small size.

Lastly, I have no idea how deep or long this crisis will turn out to be. In some form or other we will muddle through this. I’m sure, though, that we are not going to see the momentous ideological changes Wolff is probably hoping for.

Kolya.
In the first place we have to ask “How did he get his billions?”!
I don’t know anyone on this planet who is working better then me in billion times. Or offering something that billion times more valuable. Please remember – it’s a fair voluntary exchange according to General! So I doubt that there is a gardener who would change his billion apples for one piece of angus beef…

PS. never paid to Bill Gates and never will

Yes.

The yes went to Kolya.

Regarding “how did he get his billions” – the question Kolya asked didn’t suggest at all that he got them in anything but voluntary exchange.

Kolya,

the current crisis is mostly the result of government sanctioned monopoly money and subsequent expansion, as well as fractional reserve banking.

Wolff’s analysis ignores this aspect completely. Also, Wolff’s claim that on a purchasing power basis US wages have been stagnant is wrong.

Just think about how much cars, computers, furnitures, housing, food, etc. cost today relative to income compared to twenty years ago.

There is much, much more wrong with Wolff’s analysis – too much to get into right now.

In 1914 even a billionier couldn’t afford to buy a computer, Kolya. So you’re right – purchasing power is not stagnant

As to voluntary exchange – show me idiot who would voluntary agree to change something of same value at the rate of 1:1,000,000,000.

the current crisis is mostly the result of government sanctioned monopoly money

well I think owners of Icelandic banks think same…it was government fault

PS. But I agree – Wolff’s sample of software guys in the garage as new way of doing business was hilarious. I guess he is using his computer (if at all) only as typewriter (with built-in e-mail function).

“Denmark is confirmed as the OECD’s highest-tax country, followed by Sweden,while Mexico and Turkey remain the lowest-taxing countries, according to figures in the latest edition of the OECD’s annual Revenue Statistics publication”

report

General, could you explain how terrorist government of Sweden doing this? I mean:
- provide REAL high living standards for its slaves (according to you citizens=slaves of state)
- manage one of the best economy in the world (they produced excellent Volvo cars and trucks, fighter jets and tanks, U-boats and many other world class stuff including switching board that allows us to chat here)
- feeding bunch of parasites…oops refuges from Africa, Middle East and Asia
etc.

My guess – they genetically modified former wild vikings into state-loving slaves

ivanov,

why are you referring to the government of Sweden as terrorist? I certainly have not done so.
Also, your ‘joking’ reference to refugees as ‘parasites’ is quite telling of your mindset.

The government of Sweden is not achieving any of these. The people of Sweden are. Technology combined with a culture that encourages hard work as well as two centuries without war have allowed Sweden to create enough wealth from which they could draw in recent decades to finance their welfare state.

Not having an army worth speaking of, and not engaging in military expenditure through warfare has given the Swedish government additional slack in supporting its current model of welfare governance.

All things considered, Sweden could be even richer without its wasteful welfare state system. In fact, Sweden could be unbelievably rich if they were less statist.

Also, the Swedes have been smart enough to cut back on their welfare state in recent years. Less state, even better life in Sweden.

I guarantee you if Sweden would cut taxes and expenditure by 5% every year, life in Sweden would improve significantly.

Law without State:
http://www.daviddfriedman.com/Academic/Iceland/Iceland.html

Speaking of Silicon Valley. I had a chance of interpreting for a Russian state venture capital company (sic!) and we met with lots of people in the media (FT, WSJ, C-Net, etc that cover SV) as well as with some big names from Sand Hill Road. Venture capital was the subject of all meetings and there was one question asked at every one: What makes Silicon Valley so unique that there has been no successful emulation.

The answer has been the same across the board from all (quite different) people: tolerance of failure. There are several failures behind every successful SV entrepreneur. This is very liberal (not as in the contemporary political cliche) capitalistic attitude.

Overly structured and controlled environments are incapable of reproducing this attitude because of additional layers of bureaucracies evaluating performance from various points of view none of them having to do with the most important: dealing with risk and decision making. It is only natural since they are “stewards of the public largess”. It might be prudent on their part, but not conducive of ingenuity and risk.

Russian reaction was quite predictable: failure is not an option.

“Not having an army worth speaking of, and not engaging in military expenditure through”

Your military knowledge at its best, general
No more comments, soory.

“Russian reaction was quite predictable: failure is not an option.”

What a hilarious inversion of your usual interpretation of reality.

Ivanov,

are you suggesting that Sweden has a large army and is engaged in war, or has been engaged in any wars recently or in the past two hundred years or so?

It has a standing army of less than 10,000 people – with a total population of about 9 million people.

Compare this to the United States: standing army of approximately 1.4 million, out of a population of 300 million.

Or Germany: standing army of about 250,000 – total population 85 million.

The Swedish army is small, both in total number and in relative size.

Stop embarrassing yourself, Ivanov.

Small correction, Sweden has a standing army of just over 11,000.
http://www.mil.se/upload/dokumentfiler/publikationer/the_facts_2006_2007_eng.pdf

So, ivanov, what exactly was wrong about the general conclusions I drew about Sweden’s army?

Perhaps because I’ve been exposed to lecturers (both Right and Left) whose derision toward ideological opponents were much more pronounced, I find’s Owen’s reaction much too oversensitive.</blockquote

I apologize for my belief in civility. I’m sure that if you asked normal people, they, too, would be turned off by his tone. But it wasn’t just the tone, also the ideas.

billion times more valuable

Bill Gates has created something a billion times more valuable than most of us.

failure is not an option.

That fact that in America failure is not stigmatized is one of the greatest things about our culture and an essential part of our whole system.

Gen: Sweeden and Germany have both been protected militarily by the United States. All of Western Europe has been getting security at a greatly reduced price, subsidized by the US.

Owen – that was not my argument at all. My argument was about how Sweden affords high taxes and good standards of living.

My point is that it affords a high standard of living despite high taxes, not because of.

Tax levels do not predict standards of living at any given point in time, but they are an indication of economic freedom. Economic freedom, however, determines standards of living in the long run.

Regarding Wolff – as most people hostile to the free market, they tend to compensate lack of a coherent, fact-based argument with emotion.

Khlynov, thank you for your helpful replies to my questions. As you probably know, I chose those two stark hypos to see how far you are willing to extend your believe in an “absolute right to private property”. You answered with an unhesitating yes to both of my billionaire hypos. I would have answered no.

This, of course, is not the place for an in depth discussion of the reasons behind our answers. Moreover, I fully admit that my knowledge of economic theory is very limited. For what is worth, an obvious difference in our worldviews is that I don’t believe we should have an absolute right to private property. The key word here is “absolute”. In a comment yesterday you wrote that “the legitimacy of the state is a collectively created social fiction.” I agree. But that’s also the case with “private property”.

In any event, from your description you are right to say that your stateless society is not a kumbaya-like vision. Although not too idyllic of a picture, much of it depends on your optimistic belief that humans are naturally predisposed to cooperation and not to aggression. Actually, BOTH cooperation and aggression are integral part of human nature.

Owen, I was surprised that you wrote that Wolff’s tone made you physically sick. In response that you wrote:

“I apologize for my belief in civility. I’m sure that if you asked normal people, they, too, would be turned off by his tone.”

Owen, I’m all for civility. It would be much better and more constructive to have more of it. But, frankly, I did not find Wolff that uncivil. I don’t know Wolff, so I don’t know how he behaves in debate or round-table discussion settings. I can only judge him from what I saw on the video: it was a lecture and the setting was rather informal. He was not addressing someone in a debate or discussion–that’s an important distinction. I have sat through lectures and talks (not limited to politics–actually most of them had nothing to do with politics) in which lecturers were much more derisive against another school of ideas. But they usually behaved differently when debating or discussing issues in person. No big deal, it’s just that I didn’t find Wolff that uncivil at all. Maybe too self-satisfied, but that’s about it.

“But it wasn’t just the tone, also the ideas.”

Well, the substance of his ideas are a completely different issue.

Kolya: ” BOTH cooperation and aggression are integral part of human nature.”

Absolutely. But if cooperation would not be the dominant human instinct, humanity would have never developed above the social structure of tigers. And I chose the example of tigers deliberately, as it is the perfect example of a species that is more agressive than it is cooperative.

Believing that humans tend to be cooperative more often than not is not romanticism, but clearly evident in every-day life.

Agression IS part of human nature – but it is an instinct that comes to the fore only in exceptional circumstances. It is not by accident that armies spend a lot of energy and time at cultivating human agression in recruits.

And, yes, property rights are a socially constructed idea. Accepting them as supreme and absolute is a moral decision. That economic theory also shows that absolute property rights create the largest benefit for people in general is a fortunate accident.

The advantage of libertarian philosophy is that it happens to be the only known moral framework that is fully compatible with economic laws.

You can chose to be morally disposed towards socialism – but you face the uninspiring prospect of inevitably creating a non-sustainbale social order if your ideas are implemenetd.

Socialism and its spiritual relatives are valiant struggles against the basic instincts of humans. Libertarianism embraces them.

Khlynov, you wrote:

“Socialism and its spiritual relatives are valiant struggles against the basic instincts of humans. Libertarianism embraces them.”

I don’t see it as an either/or thing. Either pure communism or pure libertarianism. Because of our evolutionary history our nature has both pro-social and self-serving aspects and there will always be a certain tension between them. It’s a matter of balance. As conditions change a society’s balance point shifts, either to the right or the left.

Thank you for the interesting discussion.

Kolya, you’re fighting with a religious maniac who thinks he knows “the basic instincts of humans,” while nobody in the real world knows the basic instincts of termites, let alone advanced hominids. I recommend ignoring the lunatic.

Kolya,

my basic assumption is that if humans were not predisposed towards cooperation, it would have been impossible for society to arise in the first place. Of course, humans also have competitive and anti-social instincts – but if these were the dominant instincts, how could societies have come about?

Tigers, for example, are not predisposed towards cooperation – hence there are no tiger societies. Termites apparently are so predisposed towards cooperation, they do not seem to have an anti-social joint in their bodies.

The interesting thing about humans is that they seem to be one of the few animals who can decide from moment to moment whether or not they will act socially or anti-socially – and yet chose to act socially and cooperatively more often than not.

I think the most fundamental mistake of Hobbes was to not notice this.

Actually, there is probably a good reason we have a far more dire impression of human nature than it deserves: our brains are wired to remember dangerous events and threats with greater acuity than safe events and opportunities.

Evolutionary psychologists think this is in fact a good survival strategy, but it also leads us to see the world unjustifiably bleak.

Chris – until you learn how to engage in a debate respectfully and constructively, I don’t see why what you say carries any weight. It appears that Kolya and I are in fact having a sensible conversation, with a healthy back-and-forth, including clear answers to clear questions.

Kolya and I won’t agree any time soon, but at the very least you can learn from this about how discussions work.

This is very liberal (not as in the contemporary political cliche) capitalistic attitude.

Actually, I’ve often heard it discussed in the workplace that liberal business (or capitalistic) and research attitudes are connected to liberal political.

In other words, a business like Google, with their liberal capitalistic attitudes is more likely to be staffed by liberal political thinkers as well.

Ditto your Silicon Valley businesses.

Wally, your assumption doesn’t hold. Meg Whitman, Carly Fiorino, Tom Siebel – these big names in tech aren’t lone republicans. McCain/Palin raised tons of money in Silicon Valley. Republicanism is part of the corporate positioning and brand building that helps win defense dollars (that $700B part of the U.S. economy that doesn’t count). Stanford U is home to the Hoover Institute. I would not assume that Google leadership is liberal-leaning, either. But, there are 3 lead guys; not sure of the politics of each.

But, like you and Kolya, I found Cyrill’s comment about Russia being incapable of participating in Silicon Valley-type risk taking was thought provoking. There are certainly a lot of Russian scientists and engineers listed on page #1 of many important Silicon Valley patents of recent years. But, that’s the brains part, not the money part. If there is money left over in Russia after the current economic correction, VC investing in homegrown tech would seem a good idea. Afterall, for silicon valley, ‘Good Times RIP.’
http://www.slideshare.net/eldon/sequoia-capital-on-startups-and-the-economic-downturn-presentation?type=powerpoint

But, like you and Kolya, I found Cyrill’s comment about Russia being incapable of participating in Silicon Valley-type risk taking was thought provoking. There are certainly a lot of Russian scientists and engineers listed on page #1 of many important Silicon Valley patents of recent years. But, that’s the brains part, not the money part.

It wasn’t really about Russia. VC (by their own admissions during these meetings) would invest in a less exciting product over a great idea with mediocre organization. And no one is interested in investing in Кулибин. It is not an issue of talent or ingenuity. It is also an issue of climate and environment that has appropriate proportion of inventors vs managers.

There was a showcase of Russian businesses looking for VC as a part of that job I mentioned. Two days of presentations, then panel Q&A. A couple were very good, but most often had very little marketing idea of their place. At one point, one VC panelist told one brilliant guy – you need to price your product 5 times higher. I think that guy actually got some money. The rest were убоги not in ideas but in presentation and understanding what’s next.

Russia has great talent but not in management. However, there are companies in Russia that are actively seeking to repatriate immigrants with good management skills and they do get VC. Israeli VC companies are working in Russia and so as I remember is Pitch Johnson.

Right and true – to this point. But, in the leaner, meaner times we’re entering, how might the definition of good Sales and Marketing change? If there is not a VC-backed competitor that can out spend you (ref: Good Times RIP), is there a better chance that the best technology solution can win out. How much Sales and Marketing organization do you need to spend a tiny budget? People now being turned out by Moscow State could certainly do the statistical part of the marketing job, e.g. list slicing and dicing for email campaigns. Don’t get me wrong, I am Pro-America (that’s for you Sarah in case you are listening.) I want Silicon Valley to keep being Mecca. But the golden goose is certainly in peril at the moment, so it’s good to take stock.

One time I read this article ( I wish I could find it again) about the various motivations that spurred Gorbachov toward initiating Perestroika. This particular piece said the proverbial ‘last straw’ was advice from a female advisor from one of the Polytechnical Institutes who said that Russian advancements in Science and Engineering couldn’t progress at the same pace as the rest of the world because the scientists weren’t able to mingle and share ideas with their peers in the West. So he opened things up, which resulted in a lot of brain drain. Silicon Valley tech companies were beneficiaries. The good thing is innovation is not a zero sum game.

But, like you and Kolya, I found Cyrill’s comment about Russia

tess. Don’t be so hard in Cyrill’s comments about Russia and America

General. Sorry for not answering you but last days I’ve been busy collecting exotic shells. For future voluntary exchanges of goods as – and this news must good for you – one state is almost gone.

PS. On your note about tigers – think about elephants. Very social animals also known for going berserk for no reason (I guess – for fun).

And just for the record – what I think about homo sapience (well very many of them don’t deserve second part of name).
Humans are primitive form if Intelligence (not CIA or MI6 kind).

. Very social animals also known for going berserk for no reason.

Ivanov – the phenomenon is called musth, and while it is not well understood, this does not mean there is no reason. Always keep in mind – while you may not understand something does not mean it is inexplicable.

general, I just gave you another sample to compare. Tigers, insects, humans – why not elephants? And none of them pay taxes!

PS. If something has the name – its not explanation. It’s just the name, Khlynov. Like you name – what does it explain?

ivanov, what is it about you and chris that makes it impossible for you to address concrete points with an actual argument?

What point are you trying to make when you compare elephants to humans? Elephants have social instincts that seem to be stronger than their anti-social instincts. Elephants form societies, but don’t seem to have need for a state.

So, what does bringing elephants into the discussion prove?

I guess your – like Chris – were just trying to make some random comment with no intent to actually discuss.

It’s funny that the two of you who react most hostile to my argument are also the least capable of discussing it. A bit like ideological fanatics. Lots of noise, no argument.

General Khlynov on October 18, 2008 2:43 pm

What point are you trying to make when you compare elephants to humans?

Me?
I thought it would be interesting to expand your list of tigers and termits

General Khlynov on October 17, 2008 5:41 pm

Kolya,

my basic assumption is that if humans were not predisposed towards cooperation, it would have been impossible for society to arise in the first place. Of course, humans also have competitive and anti-social instincts – but if these were the dominant instincts, how could societies have come about?

Tigers, for example, are not predisposed towards cooperation – hence there are no tiger societies. Termites apparently are so predisposed towards cooperation, they do not seem to have an anti-social joint in their bodies.

The interesting thing about humans is that they seem to be one of the few animals

But I think penguins would be the best example. Social, friendly, stateless.

It’s funny that the two of you who react most hostile to my argument are also the least capable of discussing it.

What the point to discuss astronomy with the person who can “prove” that Earth is the center of universe?

The State was created to protect the Right of private property! How do you think Bill Gates is protecting his f*&^ing Windows?

Ivanov, you said “But I think penguins would be the best example. Social, friendly, stateless.”

You fail to understand the point of my reference to other species. I was criticizing the idea that without the state, humans would be incapable of forming societies – the Hobbesian concept.

That view is clearly mistaken. I was not comparing humans to any other species, since I was not drawing comparisons between the organization of the societies of different social species. I was merely saying that IF humans had not an innate tendency towards living in society in the first place, there would be no human societies at all.

The assumptions underlying the Hobbesian “state of nature” are not realistic. Humans have formed societies long before the state ever came into existence. Hence, there is no need for the state to organize human society.

The belief that states were created to protect private property is absolutely laughable and ahistoric. Private property rights were not respected very much by most states until quite recently in history (feudalism is the best example). Private property rights emerge as the state retreats (mostly out of economic necessity).

The claim that states were created to protect private property is simply that, a claim. Please provide me historical evidence for this claim (and just-so stories a la Hobbes and Locke don’t count).

It’s interesting you should bring up copyright: yes, copyright can only exist in the context of states. In a private property society, there could be no copyright and there wouldn’t be patents. Trade secrets, yes. But not copyright laws. They would be unenforceable without the state.

But, copyright and patents are also not compatible with private property as defined in a strict libertarian interpretation, according to which only physical things can be property (since only physical things are scarce. Concepts and technologies, once created, don’t diminish with use – hence cannot be private property.

Patents and copyrights are simply state-enforced monopolies that violate the natural rights of other people (in particular the right to free thought).

But, I’m sure this argument is so far above your head, you’ll only screech in reply rather than engage it rationally.

By the way, I buy the idea that the State can make animals not willing to live in society live in society through violence (and have them thrive as a result) if you can provide me with an example from real life (not philosophical fantasy) where such a feat was accomplished.

OF course, the only example you will be able to think of are – humans, since you will claim that humans are by nature unwilling to live in society and then somehow magically decided that living in society would be better than not living in society, elected one of their own to rule over them and then accept this rule and lived happily ever after.

Why none of the ‘great minds’ of history ever realized the absurdity of this is beyond me, though I suspect theism may have something to do with it.

Credit crunch boosts sales of Karl Marx\’s Das Kapital in Germany

Ha ha ha, that’s too funny, those stupid Germans.

It is easy for Marxian Wolff to sit in his Ivory Tower and pontificate. He’s got tenure. But all those impressionable minds, who he influences with his drivel, will be so overburdened with Student loan debt, that they will have no choice but to embrace the capitalist system or else eat ramen noddles for the next 15 years. How ironic that these Universities that charge such high tuitions and yet teach socialist principles, which if put in practice by Obama and his cronies would therefore bankrupt these very universities because no one would be able to afford to go there.

Good. That means people would have to go to trade schools and lears something that is actually useful for something.

The world would do just fine w/o departmets for the humanities, but it would be in deep doodo w/o engineers and trades people.