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Monday Message Board

January 5th, 2015

It’s time for another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

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  1. Tony Lynch
    January 5th, 2015 at 12:30 | #1

    Finished Picketty. What I don’t get is Picketty’ s claim that there is a solution to the general tendency of capitalism to economic inequality increase – with all its costs/destruction of social and political equality, and so democracy – and that is a wealth tax. Then his claims that i) Such a tax/solution is not possible under such conditions (is “utopian”), but ii) that capitalism is the only game in town. Is it meant to be a tragedy of the TINA type?

    What use is this? Or is it this that explains his popularity? Critque without edge?

    So e can’t get out of the spiral of I

  2. Tony Lynch
    January 5th, 2015 at 12:31 | #2

    Sorry about last line!

  3. Ikonoclast
    January 5th, 2015 at 13:03 | #3

    I like the last line. It’s kinda Zen.

    But seriously, all bourgeois economists have trouble admitting capitalism is in its terminal death spiral as predicted by Marx. Picketty has said essentially that;

    (a) capitalism is unreformable;
    (b) capitalism is unopposable; and
    (c) an alternative is unimaginable.

    He is correct about point a. He is correct about point b once capitalism has become a global political economy, sole public discourse and an enforced elite power ideological-monoculture which it has largely done. He is incorrect about (c) as he merely displays the lack of imagination, knowledge and courage typical of bourgeois economists.

    However, even point c is currently unimportant. Alternatives can be imagined but not implemented due to the all but total current power of capitalism as operated by the oligarchs and captured post-democratic governments subservient to the interests of capital. We are now in the post-democratic era.

    The short circuit of the impasse will come about due to a final crisis of capital accummulation and/or with the collision with the real enviroment. With the former it might be possible to squeeze cycles out of capitalism almost indefinitely while having global oligarchs, a smallish technocratic elite and mass poverty with or without wars and mass deaths. The latter (collision with the real environemnt is most definitely inevitable. Environmental destruction and the limits to growth will prevent the infinite growth and/or indefinite duration of capitalism. At the point where this becomes palpably obvious to the masses an extraordinary revolutionary upheaval (for good and bad) will occur or a collapse into total barbarism or extinction are also possible.

  4. January 5th, 2015 at 13:28 | #4

    Greg Hunt seems to believe that the 5% reduction in carbon dioxide (including perhaps other GHG emissions) is an appropriate level of ambition given the reality of global climate change. Of course, as we know, Australia does not make a significant contribution to overall emissions, so it not our problem. Apparently, if we succeed at reducing emissions by 1/20, this will be equivalent to the US reducing their’s by roughly 1/8.

    He claims to Lexi Metherell:

    There’s no debate; there’s no denying that during the carbon tax era emissions fell at one-sixth the rate of the pre-carbon tax era.

    Is this claim accurate?

  5. Hermit
    January 5th, 2015 at 15:22 | #5

    I’d go on Figure 4 of this document
    http://www.environment.gov.au/system/files/resources/2bd59b0d-cf8f-4bdf-8e23-5250e4361c24/files/nggi-quarterly-update-june-2014.pdf
    It doesn’t quite go back to year 2000 and I’m not sure if land use changes are included. We see that emissions grew from the turn of the century but showed an impressive decline from 2012. However as of mid 2014 we are well up on the starting point noting Australia’s population has increased by millions this century. It seems reasonable to expect a coal fired emissions uptick in 2015 even with a flat economy due to the combination of weaker hydro, higher gas prices and lack of carbon pricing.

    The notion of an 80% emissions cut years 2000-2050 has been widely bandied about or 1.6% per year. That means the period 2000-2020 should see a cut of 32%. We might not make 5%. As the Hollywood producer might have said ‘in two words path etic’. FWIW I also think the Climate Change Authority’s call for the purchase of foreign permits is an extremely weak copout.

  6. GPS
    January 5th, 2015 at 15:59 | #6

    @wmmbb
    My take on Hunt’s assertions is that during the years immediately preceding the Carbon Tax’s introduction the GFC had impacted negatively on economic activity and therefore CO2 output (less power used etc). So once again Hunt cherry picks these years to compare the Carbon Tax years to.

    If you take the figures from 2000 (or before) there was a steady increase in CO2 production, tailing off slightly during the GFC years and then further suppressed through the Carbon Tax. but Hunt (& his LNP mates) refuse to acknowledge the GFC let alone the effectiveness of the Carbon Tax.

  7. Paul Norton
    January 5th, 2015 at 16:06 | #7

    Israel-Palestine Creative Regional Initiatives is developing the Two States In One Space proposal for a confederal solution to the Israeli-Palestinian conflict. Interesting reading.

  8. Tony Lynch
    January 5th, 2015 at 16:34 | #8

    Thanks, ikonclast. With your first alternative – oligarchic cycle-free capitalism (and mass deprivation, etc.). Would it remain capitalist? I mean, I see a return of slavery or some such here, and slaves are not able to enter into the labour market themselves. If most can’t be labour market players – with all the pricing consequences for production, investment etc – still capitalism? Or closer to more ancient types of eco-social-political systemsas, say, ancient Greece?

  9. Donald Oats
    January 5th, 2015 at 17:57 | #9

    Is Greg Hunt right?
    I think Prof JQ could answer that.

  10. jungney
    January 5th, 2015 at 18:14 | #10

    @Ikonoclast
    I’d bank on the ecological crisis being the one to hit home before a global economic crash. We are entering the age of the big storms. As an atheist I noted that the pope’s conversion to the cause followed a visit to the Philippines in the wake of Typhoon Haiyan.

    There is another factor which is extensive wars which will be increasingly impossible to finance without the degradation of the living conditions masses of people. This explains the militarization of police forces in all developed economies. They certainly are heralding in an epoch of lawlessness and repression and probably slavery as well.

  11. Ikonoclast
    January 5th, 2015 at 18:36 | #11

    @Tony Lynch

    I was rushing my explanation and didn’t express myself very well or comprehensively enough. Because of that you got my basic drift but you also got a few wrong impressions about my argument.

    I did not mean cycle-free capitalism, I actually meant more business cycles of capitalism. It seems that one penultimate problem of Capitalism is overaccumulation. This is short for overaccumulation of capital. This leads to a crisis of capital accumulation. I am not sure how much Marx you have read so forgive me if I give a much abridged explanation. I will pinch the text from Wikipedia;

    “Overaccumulation is one of the potential causes of the crisis of capital accumulation. A crisis of capital occurs due to what Karl Marx refers to as the internal contradictions inherent in the capitalist system which result in the reconfiguration of production. The contradiction in this situation is realized because of the condition of capitalism that requires the accumulation of capital through the continual reinvestment of surplus value.

    Accumulation can reach a point where the reinvestment of capital no longer produces returns. When a market becomes flooded with capital, a massive devaluation occurs. This over-accumulation is a condition that occurs when surpluses of devalued capital and labor exist side by side with seemingly no way to bring them together. The inability to procure adequate value stems from a lack of demand.”

    If you are not used to Marxist analysis this might be a bit hard to follow. In everyday speak, in our current environment, overaccumulation of capital starts happening when the most powerful capitalists (the top oligarchic and transnational corporate ones now) become too successful for their own or anyone else’s good. This situation starts to occur when these top capitalists start getting very powerful, very wealthy and getting their own way most of the time. Profits go up and wages stagnate or even go down on real terms. The profit share of the economy goes up and the wages share goes down.

    Workers start struggling to buy things or pay off their mortgages. For a while, further financialisation (consumer debt mainly) can can occur and stave off the problems. But sooner or later a recession occurs (though this is surely not the only cause of recessions). Now the recession means less economic activity (lack of aggregate demand) so some productive enterprises have idle capacity (idle premises, plants and machinery) which is fixed capital and thus now a form of idle capital. The rising rate of unemployment means more idle labour as well. Capital can now just go into money holdings i.e cash deposits. This is because there is obviously no point at this juncture in investing it in more productive assets. Even some current ones are already idle. Capital can also go into bonds, debentures, shares, share buybacks, derivatives etc. thus pushing up the value of these paper assets which Marx calls “fictitious capital”.

    Wikipedia quote;

    “Fictitious capital contrasts with what Marx calls “real capital”, which is capital actually invested in physical means of production and workers, and “money capital”, which is actual funds being held. The market value of fictitious capital assets (such as stocks and securities) varies according to the expected return or yield of those assets in the future, which is at best only indirectly related to the growth of real production. Effectively, fictitious capital represents “accumulated claims, legal titles, to future production” and more specifically claims to the income generated by that production.

    Fictitious capital could be defined as a capitalisation on property ownership. Such ownership is real and legally enforced, as are the profits made from it, but the capital involved is fictitious; it is “money that is thrown into circulation as capital without any material basis in commodities or productive activity”.

    Fictitious capital could also be defined as “tradeable paper claims to wealth”, although tangible assets may themselves under certain conditions also be vastly inflated in price.

    In terms of mainstream financial economics, fictitious capital is the net present value of future cash flows.” – End quote.

    Now we can start to see the problem. Wealth flows into fictitious capital which is dependent on future cash flows. But really, these future cash flows are much less likely ot be realised because the economy is in a production slump. Low real production basically equals likely low real cash flows into the future. The is even more the case because capitalist economies tend to slump fast and recover slow. Employment and business cash flows take a long time to recover. The only rapid way to short circuit this stagnation is a full depression (other than government intervention via high deficit spending).

    Capitalists do not in the main deliberately cause a depression (though a minority might be angling for it) in the same way that most car drivers do not deliberately cause a car crash. But if you drive the economy or the car too fast or make other “critical turning point” mistakes then a crash can occur. The full depression satisfies the required condition of capital destruction. A lot of paper wealth disappears, fortunes are lost, seemingly safe valuable stocks turn into penny-stocks, bonds turn into junk bonds, bankruptcies, defaults and write-offs occur. Capital destruction occurs. Fictitous capital disappers into thin and the remnant returns to a more realistic value propotional to real production. However, even then the path to recovery is not clear without massive government intervention in most cases.

    Another way capital destruction can occur is a massive war which amongst other things destroys not only fictitious capital but real fixed capital: factories, infrastructure, machines and excess people of labour force age if unemployment is a problem. Big capitalists love wars and usually know how to make a fortune from them in armaments and later in reconstruction.

    So, to cut a long story short, we could have further cycles relying on depressions and wars. This is what will happen if government continues to impose budget austerity and favour capitalists over workers. Our governments are now captured by oligarchic capital in this (now) post-democratic age.

    This boom, bust/war recovery capitalism could keep cycling through. If even say 80% of the world’s population was reduced to wage peonage (working poor on subsistence wages) it would still technically be capitalism. The Apple assembly factory in China featured recently IIRC with almost imprisoned workers in crowded worker barracks on site, a few dollars a day or week wages, compulsory deductions, long hours, repetitive work and almost no rights. Technically still wage workers but almost slavery too. Imperialist capitalists can certainly exploit slaves or near slaves in overseas countries.

  12. Kevin
    January 5th, 2015 at 18:53 | #12

    I been thinking a lot about government debt and deficits lately, and how this is arguably the most dominant political issue (not because it’s that important, but because the right forces it on the agenda), yet there is so little economics on it.

    The topics of managing government debt, the mechanics of government debt, and the supposed importance of low government debt, as far as I can tell, cannot be found in typical economics textbooks and is not taught in economics courses (other than a minor emphasis on countercyclical fiscal policy). Given that it’s so dominant politically, why is there so little attention on it in the economics curriculum?

    Consider the following questions which continually fills political discourse. The answers to these questions cannot be found in economics textbooks. My comments are in brackets.
    – Is Australia’s debt level too high or growing too fast? (No, I don’t think so, it’s very low by world standards).
    – Does spending today burden our children with massive debt? (I don’t think there’s a standard answer from economists, I believe it depends on a cost-benefit analysis on what the money is spent on).
    – Australia is spending $1B a month on interest repayments, how isn’t this a budget emergency? (It’s not unusually high as %GDP, and it’s being sustained just fine).
    – We cannot afford to spend and spend even more, true or false? (There’s absolutely no reason why we can’t spend more and more, and we should spend more and more if the spending is productive and useful to the public, although extremely high levels of debt may have adverse effects, see further below).
    – How is running exponentially increasing debt, for example US debt has more than doubled under Obama, sustainable? (As %GDP it hasn’t increased that much, and it’s sustainable because debt is endlessly rolled over, and investors have faith the government won’t default).
    – And one of the most infuriating talking points of conservative politicians and ideologues: we must run a surplus to cushion us from the effects of future financial crisis. (This is a non-sequitur, as far as I’m aware, no economic theory says this and there is no mechanism by which surpluses cushion against the adverse consequence of financial crises).

    Here’s some more interesting questions, which don’t necessarily appear in political discourse:
    – What level of debt is too high? (I don’t think economists have a good answer to this).
    – What, if any, are the adverse effects of having high government debt? (It seems to me that only the problem is crowding out the private sector which could lead to inefficient resource allocation, and intergenerational effects if resources are misallocated).
    – Australia has ~25% debt/GDP while other advanced countries have 80% to 100% debt/GDP, if other countries can have 80% debt/GDP without much adverse consequences, why shouldn’t Australia go on massive spending spree to increase debt from 25% to 80%? (I don’t have a good answer to this one, other than crowding out and risk of resource misallocation).
    – Why doesn’t the central bank pay off government debt or part of it, by printing money, and if they do what, if any, are the adverse consequences? (No idea. My guess would be institutional arrangements preventing it and the risk of inflation).

    Anyway, the point is, most of these answers I’ve picked up from reading stuff on econ blogs. But I think none of this stuff is in textbooks or papers (notwithstanding the simplistic, bogus and un-illuminating work of Reinhart-Rogoff’s 90% threshold). I also don’t think there’s really any well-articulated theory or model behind economist’s writings about government debt. Why? Given that it is so dominant as a political issue, it would be good to keep the public informed by making sure this stuff had a solid economic model behind it and was taught in Macro101.

    If anyone can point to a good, authoritative source about the economics of government debt, I’d like to see.

  13. Ikonoclast
    January 5th, 2015 at 19:07 | #13

    @Kevin

    If I attempted an answer I would use Marxian and some MMT insights. People have heard enough from me on those topics. It would be really interesting if J.Q. answered you in detail from his point of view. We might actually get to find out where J.Q. stands on these issues these days. 😉

    Rightly or wrongly, I feel rather confused about where J.Q. stands now. Perhaps he can answer or link his answers given probably in the last “fantasy budget” debate where economists got to nominate their budget settings if they were treasurer.

  14. Tony Lynch
    January 5th, 2015 at 19:47 | #14

    Does JQ= Piketty?

  15. Ikonoclast
    January 5th, 2015 at 20:17 | #15

    @Tony Lynch

    LOL. Very droll.

    The problem probably is that I have slammed hard left again in the last 5 years though certainly not so far as Marxist-Leninist hard left. But the Overton window has gone so far right in the last few decades it is amazing and indeed scarey. This seems to have dragged centrists and even social-democrats to the right as they follow the left frame edge of the Overton window. People seem so chary of falling out of the window altogther. No doubt it is academic, career, networking and even social death to so so. I am already academically, career-ly, networking-ly and socially dead. I have nothing to lose in those senses.

  16. January 5th, 2015 at 20:41 | #16

    @wmmbb
    Wmmbb, the carbon price resulted in emissions from electricity generation falling and the removal of the carbon price has caused emission from the electricity sector to jump:

    http://reneweconomy.com.au/2014/emissions-soar-as-carbon-price-dumped-more-coal-burned-41013

  17. January 5th, 2015 at 20:42 | #17

    Wmmbb, the carbon price resulted in emissions from electricity generation falling and the removal of the carbon price has caused emission from the electricity sector to jump:

    http://reneweconomy.com.au/2014/emissions-soar-as-carbon-price-dumped-more-coal-burned-41013

    (Apologies if this double posts.)

  18. BilB
    January 5th, 2015 at 21:05 | #18

    Well just thank you lucky stars, Ikonoclats, that your mechanical…

    http://youtu.be/60P1xG32Feo

    Last line cut short,…”there, there,….don’t blame yourself!”

  19. BilB
    January 5th, 2015 at 21:15 | #19

    ……that you’re “not” mechanical

  20. Ikonoclast
    January 5th, 2015 at 22:16 | #20

    @BilB

    Yep, I am Ikonoklutz!

    I recently used a decking stain on ramp timbers. Something went wrong and the stain fizzed upon application to the timber! It left tiny little bubble-craters scarring the finish as it dried. I mean you could see it if you got down on your hands and knees, damnit. I shamefacedly admitted disaster to the good wife. Ten minutes later I went “Doh! I should have told her it was the whizz-bang new non-slip finish for ramps.”

    Technical footnote: Yes, I worked in the shade and cool. Yes, the dew was gone. Yes, I aged the timber for 8 weeks. Yes, I washed it down first with designated deck cleaner for old and new work. So what went wrong? Kwila is high tannin timber. Eight weeks ageing of the timber is great if you get some good rains. But eight bone-dry weeks are useless for leaching out the tannin. Tannin plus this product equals fizz. It’s all in the chemistry.

  21. Ernestine Gross
    January 5th, 2015 at 22:23 | #21

    @Tony Lynch
    Re your post @1:

    Starting with the easy bit, while “Piketty” is pronounced in French like Picketty. the spelling of the name is as shown in quotation marks.

    You write: “What I don’t get is Picketty’ s claim that there is a solution to the general tendency of capitalism to economic inequality increase – with all its costs/destruction of social and political equality, and so democracy – and that is a wealth tax. Then his claims that i) Such a tax/solution is not possible under such conditions (is “utopian”), but ii) that capitalism is the only game in town.”

    On a previous occasion I made the point that Piketty’s proposal of a wealth tax is best understood in a theoretical context. It is a logical solution to the problem he has identified by means of empirical data. I also argued that there is nothing in Piketty’s book, Capital in the Twenty-First Century, I could find, which states that a wealth tax is the only possible solution. In my interpretation, Piketty provided a sufficient condition for solving the problem, not a unique solution to the problem. Hence, it is conceivable that a portfolio of policy measures can achieve the same objective, namely to stop and reverse the growing income and wealth inequality.

    Your summary of Piketty’s position in i) is not quite accurate. You omitted the word ‘global’ (wealth tax). Piketty considered achieving a ‘global wealth tax’ as somewhat utopian. I do not recall Piketty having opined that a wealth tax is utopian for the EU, the USA, and few more ‘rich’ countries.

    Regarding your item ii), Piketty is an economist, one of those who does not suffer from the illusion that economists set the rules of the game. Economists tend to be blamed when there are major upheavals, such as the GFC. But a micro-second thought should make it clear that it is not economists who make the laws, enforce the laws and sit in judgment. The rules of the game are set by political processes. See for example JQ’s book, Zombie Economics, for his take on the relationship between economics and changes in the institutional environment (ie that created by law). His earlier book on Microeconomic reform is another example. It is the institutional environment – the legal and regulatory framework – which, IMO, creates the difference between ‘capitalism’ and features of the idea of a ‘market economy’ that tends to be considered as desirable in most if not all societies who also value democracy. For example, in theoretical models of economies where the only institution is ‘a price system’, relatively rich people are not being favoured by tax expenditure (negative gearing, superannuation schemes, fuel subsidies, etc). The Australian public objects to the May 2014 budget (and its December derivatives) on the grounds of it being ‘unfair’, not on the grounds of wishing an entirely different system. This also belongs to ‘democracy’. It seems to me, Piketty makes an important contribution to democaratic society, as an economist.

    In conclusion, I don’t agree with your critique of Piketty’s book.

  22. Ernestine Gross
    January 5th, 2015 at 22:38 | #22

    @Kevin

    Your request for answers to some or all of your questions in textbooks suitable for 101 is, IMO, technically infeasible because the subject matter in most if not all of your questions is not amenable to an answer of the type that could be given in a trade manual. One example comes to mind regarding ‘international comparisons’. Germany has a higher debt/GDP ratio than Australia and is considered to be a financially ‘sound’ economy. I would not take Germany as a point of reference for Australia because the former has a much more diversified economy than Australia. Diversification in industries tends to result in a smoothing of returns (revenue for the government). The ‘debt capacity’ is inversely related to the variance (fluctuation) of returns. This is only one example of the limitation of international comparisons.

    Nevertheless, your questions are important for the public. May I suggest you write to the Treasurer and ask for economic textbooks, theories, empirical evidence on which his decisions are based. I can’t help you on this one.

  23. Ikonoclast
    January 5th, 2015 at 23:40 | #23

    @Ernestine Gross

    Unfortunately, we do not live in genuine democracies anymore, even if we once did. Economic policies are controlled by the elite oligarchs. Note, I did not write “Economies are controlled by the elite oligarchs.”

    Economies are partly controlled by human intentional control, partly controlled by human generated unintended consequences and partly controlled by natural forces outside human agency. The second point about unintended consequences can include both crude design faults and complex forces/feedbacks systemically intrinsic to the system designed and which include unintended feedbacks and unintended contradictions. Surely this includes Marx’s point about internal contradictions in the capitalist system.

    It is common, indeed almost universal, for any machine or system designed by man to demonstrate gratuitous unintended consequences and feedbacks, many deleterious to performance, due to ideosyncracies, design faults and systemic effects and feedbacks inherent in the design. The more complex the machine or system the more likely this is to happen. A system programmer would call these bugs or errors. Critical errors cause a system crash. Surely, the sign of bad faith in capitalist ideology is its claim that its system alone of all humans’ complex machines and systems is able to find a stable benign state and then function automatically and indefinitely without any internal problems. This amounts to the claim that it has no real bugs or errors and never suffers system crashes. History tells us a different story.

  24. Ikonoclast
    January 5th, 2015 at 23:43 | #24

    @Ernestine Gross

    Ah bourgeois economics, the profession where you never have to stand by your profession or your advice… and where you never have to tell the dumb punters anything. Nice work if you can get it.

  25. Troy Prideaux
    January 6th, 2015 at 01:53 | #25

    Ernestine Gross :
    Nevertheless, your questions are important for the public. May I suggest you write to the Treasurer and ask for economic textbooks, theories, empirical evidence on which his decisions are based. I can’t help you on this one.

    @Ernestine Gross

    That/they would be the infamous economic text books titled: “Politics 101”

  26. Jordan
    January 6th, 2015 at 03:14 | #26

    @Kevin
    Only MMT describes present monetary system and Austrians do some of it but not all and lot of it obsolete. But allmost every economist is giving consequences from monetary systems without ever describing it. Or gives myths that were true about 80 years ago.

    But also this description is not same for different countries that have different monetary setup, MMT describes only fiat money not gold standard setup. So MMT applys only to about 6 countries that use dollars, yen, franc, pound.

  27. J-D
    January 6th, 2015 at 05:50 | #27

    The extent of economic inequality is different in different capitalist countries; some are more unequal and some less so. The extent of economic inequality has not increased uniformly over time in all capitalist countries; there have been periods of time over which inequality has decreased in one or more capitalist countries. So it’s historically incontrovertible that a reduction in economic inequality in a capitalist country is possible, and to me it seems desirable.

  28. GPS
    January 6th, 2015 at 08:30 | #28

    @Ronald Brak
    Thanks Ronald – great link.

  29. Ben
    January 6th, 2015 at 09:39 | #29

    @GPS
    Another factor in the decline of emissions (mostly from the electricity sector) is that the introduction of the carbon price coincided with a decline in electricity consumption to due a multitude of factors: solar PV, the availability of energy efficient appliances such as LED lamps and heat pump hot water systems, higher electricity prices, etc. These were happening even without the carbon price.

  30. Ikonoclast
    January 6th, 2015 at 09:42 | #30

    @Ikonoclast

    Re my last post: I was thinking of Joe Hockey’s economic advisers but it came out wrong.

    Back on topic, it’s interesting to consider points where Marxism and Keynesianism might concur.

    “The underconsumptionist schools of Marxist crisis theory see the inability of the working class to buy back a sufficient percentage of the commodities they produce as the cause of both periodic acute cyclical crises and the economic stagnation and mass unemployment that follow in the wake of such crises.” – Sam Williams, A Critique of Crisis Theory from a Marxist Perspective.

    But this raises THE central question. If capitalism is so inherently unequal, has such a strong bias, that it always tends when unfettered to run away into gross inequality, then is not the time for patching the system over? Is it not time to build a new system?

    I would use an analogy of an aeroplane that needs almost full stick (up or down) to maintain level flight and where previous attempts at changing control surface configurations etc have not worked much because the centres of gravity and lift are fundamentally out of whack. Better than endlessly applying full stick (strain, increased drag, increased fuel consumption and increased risk of crashes) one should design and build a new aeroplane without these fundamental configuration flaws.

    Capitalism is a system with fundamental configuration flaws. Reform (redesigning the control surfaces) does not work. History should now have proven that fact to the satisfaction of all but oligarchs and rank apologists for the system. We now need a radically new system with far fewer or none of the current fundamental design-configuration flaws.

  31. Dave Lisle
    January 6th, 2015 at 13:38 | #31

    @Ben
    Ironically the mining boom has been another factor leading to emissions reductions. It contributed to the appreciation of the AUD which smashed the energy intensive manufacturing industry leading to the gradual offshoring of ‘our’ emissions – we buy shit with embodied with (e.g.) Chinese emissions instead of Australian emissions (Blame Kyoto carbon accounting). So at least we can thank Big Coal & Co for something. Not.

  32. Megan
    January 6th, 2015 at 15:09 | #32

    We Queenslanders are going to the polls on 31 January.

    It would be nice if we had a non-neo-con alternative to vote for but sadly it looks highly probable that we will get one of the ALP/LNP duopoly as our government, again.

    Here’s hoping for a hung parliament with minor parties/independents having the balance of power – at this stage it doesn’t even matter if they’re gun-toting fundies, things are that bad!

  33. Ivor
    January 6th, 2015 at 15:36 | #33

    @J-D

    You need to produce evidence for this.

    Capitalism may have shown some decline in inequality BUT surely this was only because of anti-capitalist forces – social democracy – within capitalism.

    Capitalism can never reduce inequality, so you are probably confused by appearances from various forms of mixed economy.

  34. Hermit
    January 6th, 2015 at 15:42 | #34

    Estimates have been made for how much of UK emissions has been offshored
    http://www.carbonbrief.org/blog/2012/03/defra-the-uk-outsources-emissions
    but this subject is little discussed in Australia. Climatologist James Hansen has come late to the party on the need for ‘border carbon adjustments’ a.k.a. carbon tariffs. It would be an administrative nightmare to calculate embodied carbon in all the different imported goods and invisibles like overseas travel. However when carbon tax was $23 I thought it worked out about 20% of the landed price of aluminium billet. Make it 20% on all manufactured goods. Fuels like coal and LNG would be taxed on direct CO2 emissivity at the port of departure.

    Therefore if the world moved to a carbon customs union the good guy nations could trade freely but they must slap 20% on imports from the bad guys. Membership by consensus Survivor style. Alas Australia would probably be among the bad guys. No doubt free traders will have spasms at the thought so let’s keep world emissions increasing for another 30 years instead.

  35. Tony Lynch
    January 6th, 2015 at 16:15 | #35

    Ernestine. I do not understand. Piketty’s global wealth tax is a “theoretical solution” surely means it most clearly captures the logic of any solution. Any other suite of policies will have to redistribute wealth downwards. So if the global wealth tax is utopian – because the wealthy don’ want to so redistribute, and have the power to stop it – then any suite of other policies to the same end is also utopian. My reading stands.

  36. January 6th, 2015 at 16:21 | #36

    Our good host has previously argued, convincingly to me at the time, that oil is not some special thing and that its economic importance can be measured by its share of the economy. This paper claims to refute that http://phys.org/news/2014-12-thermodynamic-analysis-reveals-large-overlooked.html

    I was wondering if anyone here has a response.

  37. ZM
    January 6th, 2015 at 16:48 | #37

    Hermit,

    “Estimates have been made for how much of UK emissions has been offshored”

    This is a big issue – there was a Quarterly Essay a couple of years ago – Progress or the Planet? – by someone who worked under the Rudd government in treasury/finance. From memory it stated that European emissions counted by consumption rather than production had increased by 17% (? I don’t have a copy of it sorry but it should be available at libraries ) rather than declined as the counting by production method appears to show. He didn’t source the figure so I assume it’s source is possibly internal governmental reports the public aren’t privy too.

    I found some public articles on the UK specifically but not for the whole EU – these figures challenge the EU’s narrative substantially and bolster the case of developing countries. The other similar issues are emissions from international travel that doesn’t get counted, and the attribution of holiday-maker’s emissions which should be to their country of nationality not country of holiday making.

  38. ZM
    January 6th, 2015 at 16:52 | #38

    On carbon customs duties there was a Lateline episode with Bjorn Lomborg quite some time ago now where Tony Jones suggested that was the obvious solution – but Lomborg – whom I loathe and detest – said this would cause trading blocs to form and trade wars – thus seemingly invoking WWI

  39. Kevin
    January 6th, 2015 at 16:54 | #39

    @Jordan
    Yeah I’m aware of MMT, although it’s way out of the mainstream, and Quiggin seems to like bashing MMT. But it does beg the question why there’s so little research on government debt in mainstream economics and economics education.

  40. Ikonoclast
    January 6th, 2015 at 17:06 | #40

    @Tony Lynch

    Did you note my reply above at #30? That is my position now. We’ve been down the crisis-reform-regression path from the days that Engels wrote about in “The Conditions of the Working Class in England” to the 1890s depression, to the 1930s depression, to the “Keynesian Golden Age”, to the 1970s stagflation and oil shocks, to monetarism, to neoliberalism, to claims about the Great Moderation, to the 2007 GFC, to today’s essential stagnation in EU and Japan and the mediocre performance in the USA which is only benefiting the very rich. In the course of which we had several great and large wars directly related to the struggles of Capital, Imperialism and “Empire-ism”: namely WW1, Spanish Civil War, WW2, Korean War, Vietnam war, Russia’s Afghanistan War, Gulf Wars 1 and 2 and the Anglophone / NATO war in Afghanistan.

    The capitalists NEVER operate in good faith. They will always wind back any reform as soon as they can. They will always exploit labour in poor countries now (with globalisation) using wage arbitrage and concomittantly push down wages in the developed world. If the system has inherent systemic design flaws which keep leading to rising inequity*, cyclical crises and wars then a new system is required. The clinching argument for me is that capitalism (inevitably controlled by the oligarchs) is in fundamental conflict with the natural world and the Limits to Growth. Capitalism is destroying the natural and sustaining environment without paying the least attention to fact that if we have no sustaining enviroment then we will have no sustaining economy.

    * Note: The rising inequity is only reversed after great crashes when it becomes apparent that the choices are reform or revolution. Reform is chosen to salvage the system. Once stabilised, the pressure begins again sooner or later to once more push down workers wages, right and conditions.

    I recommend you read:

    “The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China” by John Bellamy Foster and Robert Waterman McChesney.

    “Das Kapital” Vols I, II and III by Karl Marx (and Engels).

    I recommend the website of Professor Richard Wolff for good simple analyses of what is going on now.

    Also look at Reading Marx’s Capital with David Harvey on the net.

  41. Tony Lynch
    January 6th, 2015 at 17:31 | #41

    Thanks, Ikonoclast. I did read #30, meant meant to thank you. What do you think of Wolfgang Streeck? Just read his “How Will Capitalism End?” online, from New Left Review, May-June, 2014.

  42. ZM
    January 6th, 2015 at 17:39 | #42

    I thought I would check the number since someone might depend on what I said – so I was out by a sizable 30% :

    “Measured on the basis of consumption (including emissions embedded in imported goods) the EU’s emissions have risen by an astonishing 47 per cent since 1990.”

    Quarterly Essay 44 2011 Man-Made World : Choosing Between Progress and Planet

    The Author was Andrew Charlton who was head advisor to Rudd during the financial crisis and a Keynesian who had lectured at the London School of Economics. There is a spiteful article in the AFR about him from 2013 noting he then works for Coles in its Liquor division . The very spitefulness of the article makes me suspect Charlton was purged http://m.afr.com/p/national/charlton_plots_brilliant_career_ApoMfqW7MBKYCgWkqrfrEO

    John Quiggin was one of the correspondents about the essay in the next issue . The letters were similar to our usual debates here about the role of prices, technology, less material use, and fair global development.

    In his response Charlton wrote

    “Churchill famously described Britain’s equivocal response to fascism in the 1930s as “the years the locusts hath eaten” – a lost opportunity to prepare for the great threat of that age. Man-Made World was motivated by a fear that we may look back on the first two decades of the twenty-first century with a similar sense of regret. The essay argues that we should – and can – do more to protect against the threat of climate change.”

  43. J-D
    January 6th, 2015 at 18:41 | #43

    @Ivor

    I did not state that capitalism has ever reduced economic inequality; I stated that reductions in economic inequality have occurred in capitalist countries, and you acknowledge that this is true, attributing those reductions in inequality to social democracy; if social democracy can reduce economic inequality in capitalist countries, then I think that’s a good thing.

  44. Ivor
    January 6th, 2015 at 20:01 | #44

    J-D :
    @Ivor
    I did not state that capitalism has ever reduced economic inequality; I stated that reductions in economic inequality have occurred in capitalist countries, …

    You were asked for actual data. Not semantics between capitalism and capitalist countries.

    So do you believe that capitalism has not reduced inequality?

    Are you aware of any inequality trends in any capitalist countries?

    What do you think a capitalist country is?

    Why is reducing inequality a good thing? Everyone has the right to own the property they create and everyone has different productivities and endowments. Outside capitalism, inequality may be perfectly efficient.

    People need only to object to the additional inequality created by capitalism.

  45. Ivor
    January 6th, 2015 at 20:02 | #45

    J-D :

    I did not state that capitalism has ever reduced economic inequality; I stated that reductions in economic inequality have occurred in capitalist countries, …

    You were asked for actual data. Not semantics between capitalism and capitalist countries.

    So do you believe that capitalism has not reduced inequality?

    Are you aware of any inequality trends in any capitalist countries?

    What do you think a capitalist country is?

    Why is reducing inequality a good thing? Everyone has the right to own the property they create and everyone has different productivities and endowments. Outside capitalism, inequality may be perfectly efficient.

    People need only to object to the additional inequality created by capitalism.

  46. Ernestine Gross
    January 7th, 2015 at 01:15 | #46

    @Ikonoclast

    Re 23:

    1. Genuine democracy is no more if ever. An Australian friend of mine, a historian, who took on the USA citizenship, gave a speech on the occasion of her citizenship cerimony. The subject was democracy. The crux of her erudite argument was that democracy requires all citizens to more or less continuously fight for it, not with guns or bullets, but in public discourse. Hence democracy is not a state of affairs but a process. I learned something from her speech.

    2. ‘Economic policies are controlled by the elite oligarchs. Note, I did not write “Economies are controlled by the elite oligarchs.” ‘

    Notwithstanding your subsequent expansion (which amounts to a reminder that any sensible notion of ‘an economy’ includes the natural environment), I find it a bit frustrating dealing with your conceptual framework and the associated terminology. What exactly am I to think of when I read the term ‘oligarchs’ and the qualification of ‘elite’? Are there non-elite oligarchs? Terms like ‘elite’ and ‘oligarchs’ convey some meaning to me in specific contexts. But without specific context I am at a complete loss as to whether you want to say something like there is a small number of people who have power to control ‘economic policy’ (eg the government?) or whether you have some socio-political theory in mind (about which I don’t know). I am also unclear as to what you have in mind by ‘economic policy’. My thinking about ‘an economy’ is much simpler.

    Let E denote ‘an economy’, I = 1, …., n denote the number of people in E, let T denote technological knowhow possessed by the people (split up, if you like such that who knows what can be indicated), let Ne denote the natural environment (a bid broader than the term ‘resources’ in some econ textbooks) and let Ie denote the institutional environment.

    Common element of all economies: E[1] = {I, NE}
    Economies with production: E[2] = {I, T, NE} (eg people live of hunting, gathering, agricultural produce and craftsmanship as they please)
    Economies with production and an institutional environment E[k] = {I, T, Ne, Ie[k]}
    if k = ‘market economy’ then Ie is a ‘price system’.
    if k = ‘customs and traditions’, then Ie is best researched by consulting anthropologists
    if k = ‘democracy’ then laws and regulations determine the relationship among the people and regarding T and Ne.
    if k = ‘theocracy’ then laws and regulations are assumed to be provided by a deity, as revealed in a book or on tablets, or scrolls.
    if k = ‘capitalism’ then please tell me what I should think of other than laws and regulations you don’t agree with (apparently oddly, there is quite a bit of agreement between you and me on specifics, which in turn creates a mystery for me as to what you are on about).
    if k = ‘elite oligarchs’ control ‘economic policy’, then please tell me what I should think of.

    Obviously, I could refine the above list of possible and historically recorded institutional evironments but I believe I’ve said enough.

    Re @24:
    “Ah bourgeois economics, the profession where you never have to stand by your profession or your advice… and where you never have to tell the dumb punters anything. Nice work if you can get it.”

    I bothered to look up something on ‘bourgeois economics’, the first thing I could find from a source that might be trustworthy. Here is what I found: https://libcom.org/library/economic-crisis-and-crisis-theory-mattick-one.

    While I could find a few phrases that concurred with undergarduate texts from 40 years ago, including some from history of economic thought, this article contained nothing (theory and empirical) since about 1950, and it contained nothing I recall from a course on economic anthropology. So, given that time is at a premium, bourgeois economics is another term I can forget about and I conclude I don’t understand what you say.

  47. J-D
    January 7th, 2015 at 03:56 | #47

    @Ivor

    I do not have enough information to answer your question about whether capitalism has reduced inequality.

    In response to your other questions, as an example only, income inequality in the US decreased between 1937 and 1947, during the whole of which period the US was a capitalist country.

    It is my view that reducing economic inequality is a worthwhile goal; it is my view that it would have been a worthwhile goal in pre-capitalist Eridu or Nekhen; but I don’t expect you to accept that view just because I hold it.

  48. Ivor
    January 7th, 2015 at 10:13 | #48

    @J-D

    I do not have enough information to answer your question about whether capitalism has reduced inequality.

    Irrelevant. You were asked for data to support your assertion. If you have no information about capitalism reducing inequality, but you claim that inequality has reduced in capitalist countries, then what reduced inequality?

    So you did not have enough data to even draft your original post.

    How do you distinguish inequality under “capitalism” and inequality within “capitalist countries”.

    What are you failing to say?

  49. Ivor
    January 7th, 2015 at 10:25 | #49

    @Ernestine Gross

    …I believe I’ve said enough.

    Hardly. You cannot set-up a market model with prices but without incomes – in the context of capitalism.

    Outside capitalism prices=incomes.

    Inside capitalism (before collapse) prices > incomes.

    bourgeois economics is another term I can forget

    Hardly. Marx bemoaned the fact that English workers needed to free themselves from a “bourgeois infection”. This dynamic based on artificially high living standard through international exploitation, underpins much of the political and economic output we see today in OECD or G20 economies.

    It is the one key blindfold that misleads many.

  50. Ivor
    January 7th, 2015 at 10:26 | #50

    @Ernestine Gross

    …I believe I’ve said enough.

    Hardly. You cannot set-up a market model with prices but without incomes – in the context of capitalism.

    Outside capitalism prices=incomes.

    Inside capitalism (before collapse) prices > incomes.

    bourgeois economics is another term I can forget

    Hardly. Marx bemoaned the fact that English workers needed to free themselves from a “bourgeois infection”. This dynamic based on artificially high living standards (through international exploitation) underpins much of the political and economic output we see today in OECD or G20 economies.

    It is the one key blindfold that misleads many.

  51. Ikonoclast
    January 7th, 2015 at 17:22 | #51

    @Ernestine Gross

    We often debate at cross-purposes and neither of us is badly at fault as such. You are a professional and specialist and I am a very amateur generalist. I write things like “elite oligarchs” from a position of wanting to make (not always consciously) a rhetorical flourish. Probably in the context it is was simply enough to say oligarchs. I was rhetorically pointing to their elitism and making a pejorative point about it.

    At the same time, if I wanted to invent justifications for my terminology after the fact, I could do so and even at least half convince myself that I had something in mind which was valid. Gina Rinehart is an oligarch (if that term is gender neutral). Compared to her wealth-wise the top American oligarchs are also oligarchs. She is a $20 billion oligarch. The Koch brothers have about $40 billion each though Bill Gates is the single richest with about $80 billion. So it’s not just about the money.

    The Koch brothers are a good example as they are very politically active and are so in the most powerful economic and military country on the planet. They can have a profound influence on US domestic politics and thus at one remove on world politics via US projected power. So it’s one thing to be an oligarch of puny Australia. It’s another thing to be a US super-oligarch or elite oligarch. But I could be claimed to be stretching it. I will try to avoid rhetorical flourishes in future.

    I do have a socio-political-economic theory in mind. It’s Marxism in a nutshell. Who owns and controls the means of production, owns and controls the world.

    From the rest of your answer, it seems clear to me that you want to mathematise that which is intrinsically un-mathematise-able. I mean you might want to mathematise political economy which is all of economy, national economy, class relations, power relations, competing ideologies, rationalisations, justifications and so on. Either that or you want to ignore it. To me, geostrategic military power and other such actions are part of the political economy. The rouble fell recently due to US sanctions, threats and manipulations and so. I don’t see a pure mathematical economics can ever being able to encapsulate something like that. It is a bit like trying to weigh some quantity something precisely on a scales in a compounding pharmacy just as a fully loaded cement truck ploughs through the place.

    “Bourgeois economics” is an antiquated but not anachronistic term. It means basically the ideology of capitalism as a shell with the economics of capitalism as a protected kernel. It means an economics where power relations, class relations and ownership laws are pretended to not really exist. Instead the actual economy is mathematised and r normalised as the only and one real way an economy can be. It’s mechanics are studied within this limited de-ideologesed framework. It’s “STP economics” as in “standard temperature and pressure economics to use a scientific abalogy. It’s mathematised laws and relations are only true within its institutionalised framework. Change the institutional framework and a radically new economics could arise. I don’t see how just changing ‘k’ in any kind a mathematics could ever capture this.

  52. Ikonoclast
    January 7th, 2015 at 17:25 | #52

    Sorry lots of typos in last post

  53. Ernestine Gross
    January 7th, 2015 at 17:57 | #53

    @Ivor
    1. Contrary to the premise of your objection, I did not ‘set-up a market model with prices but without incomes – in a the context of capitalism’.
    2. There seems to be a fine line between apostles of Marx (who offer quotes from ‘the book’) and theocracies.

    I believe I have said enough.

  54. J-D
    January 7th, 2015 at 18:56 | #54

    @Ivor

    I do not have the information to support any claim about what causes reductions in economic inequality, which is why I made no such claim.

    The claim I did make, that reductions in economic inequality have occurred in capitalist countries, is supported by the example I have already offered of the US between 1937 and 1947.

  55. Ikonoclast
    January 7th, 2015 at 21:13 | #55

    @Ernestine Gross

    Perhaps I should have just said this.

    Bourgeois economics = Capitalist Economics.

    “Capitalism is an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit. Central characteristics of capitalism include private property, capital accumulation, competitive markets and wage labour. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged.” – Wikipedia.

    Capitalist economics describes, manipulates, legitimates and develops this situation while possessing no real insight into or critique of the system as a whole, particularly with respect to the fact that the unfettered system might have inherent contradictions. instabilities and limitations. Insight and critique have to come from outside the (self-serving and capitalist-serving) domain of capitalist economics. It might come from s*o*c*i*a*l – democratic thinking/action or from heterodox economics like Marxism or Thermoeconomics or from philosophy, religion or sociology. When insight come from someone like Pikkety it perhaps gets a little harder to sustain the charge that all insight has to come from “outside the tent”

    If anything sums up the logical mistake of the affirmative case for unfettered capitalism it is the fallacy of composition. It is continually asserted that what is good for one capitalist is good for all capitalists. It is then asserted that what is good for all capitalists is good for all workers and good for the national economy.

    The paradox of thrift is a notable fallacy of composition that is “central to Keynesian economics”. I am sure I don’t have to rehearse it here. The paradox of wages and profits is another example. If a firm can pay lower wages domestically compared to other rivals, then that firm gets an advantage and that capitalist accumulates more profits. However, if all firms pay lower wages, workers have less money to buy goods from capitalist firms. Some goods remain unsold, aggregate demand falls and profits fall. Next, workers are laid off and plant idled to avoid over-production (producing unsaleable goods). Recession or depression ensues without (usually) a state rescue along Keynesian lines.

    The (or one) penultimate problem of capitalism is overaccumulation of capital. If many capitalists are very successful they accumulate great quantities of fixed capital, money capital and fictitious capital. (We will come to what fictitous capital is.) The profit share of the economy has been relatively high to the wage share. A point is reached where real investment opportunities diminish. There is no point building new factories or production facilities as too much current plant is already idle. Capitalists will tend to hold more money capital and/or go in for investing in more fictitous capital.

    “Fictitious capital contrasts with what Marx calls “real capital”, which is capital actually invested in physical means of production and workers, and “money capital”, which is actual funds being held. The market value of fictitious capital assets (such as stocks and securities) varies according to the expected return or yield of those assets in the future, which is at best only indirectly related to the growth of real production. Effectively, fictitious capital represents “accumulated claims, legal titles, to future production” and more specifically claims to the income generated by that production.

    Fictitious capital could be defined as a capitalisation on property ownership. Such ownership is real and legally enforced, as are the profits made from it, but the capital involved is fictitious; it is “money that is thrown into circulation as capital without any material basis in commodities or productive activity”.

    Fictitious capital could also be defined as “tradeable paper claims to wealth”, although tangible assets may themselves under certain conditions also be vastly inflated in price.

    In terms of mainstream financial economics, fictitious capital is the net present value of future cash flows.” – Wikipedia.

    Fictitious capital will be wiped out in a crash (especially a full depression) so that the tradeable value of the paper claims to wealth is re-matched to the new production stream which has been and remains at least for some time much less due to depressed production.

    I am sure you know all this which is not to say you agree with all this. You may know it in a different context and under different terminology. Thus you might refer to “fictitious capital” as “tradeable paper claims to wealth as the net present value of projected future cash flows”.

    I offer this so as to hopefully get you to understand that Marxism or at least Marxian thinking is not just proselytised by “apostles of Marx who offer quotes from ‘the book’” like theocrats but is also held to be of interest and value by serious modern thinkers like Professor R.D. Wolff, John Bellamy Foster and Robert W. McChesney (to name a few).

    I never actually know whether you are highly sceptical about Marxian thinking or just highly sceptical of amateur proponents who might know little but a few slogans. You might also have to make allowance for the fact that what people like me are reacting against is the debased moneterist / neoliberal form of economics that dominates public discourse and is shoved down our throats ad nauseum by almost every treasurer and public commentator. Serious academic economists who are not so simplistic but are also not loudly and proudly heterodox in some way tend to get tarred by the same brush. But business, hired-gun and “captured” economsits I do call “bourgeois economists” with a sneer to the word “bourgeois”. “Bourgeois” today can mean just “middle class” or “middle class with pretentions”. When Marx used it meant the capitalist class essentially.

  56. Ivor
    January 7th, 2015 at 23:17 | #56

    Ernestine Gross :
    @Ivor
    1. Contrary to the premise of your objection, I did not ‘set-up a market model with prices but without incomes – in a the context of capitalism’.
    2. There seems to be a fine line between apostles of Marx (who offer quotes from ‘the book’) and theocracies.
    I believe I have said enough.

    Please indicate where you included incomes.

    Which economists do not use quotes? What is your point?

    There appears to be a fine line between apostles of Arrow Debreu and the minions ensnared by the Church of Scientology.

  57. Ivor
    January 7th, 2015 at 23:18 | #57

    Ernestine Gross :
    @Ivor
    1. Contrary to the premise of your objection, I did not ‘set-up a market model with prices but without incomes – in a the context of capitalism’.
    2. There seems to be a fine line between apostles of Marx (who offer quotes from ‘the book’) and theocracies.
    I believe I have said enough.

    Please indicate where you included incomes.

    Which economists do not use quotes? What is your point?

    There appears to be a fine line between apostles of Arrow Debreu and the minions ensnared by the Church of Scientology.

  58. Ivor
    January 7th, 2015 at 23:43 | #58

    @J-D

    The US was not a capitalist country between 1937 and 1947. It was a mixed economy.

    As I have already indicated you are confusing a mixed economy with a capitalist economy.

    The more capitalist a country becomes, for example under a Thatcher, the more inequality increases.

    When a country embraces raw capitalism, inequality threatens to becomes extreme. See the new breed of capitalists waiting in the wings in the UK who envisage:

    your wages will meet the Chinese somewhere, and so will your social conditions … abolish minimum wages, abolish social protection.

    See: http://www.theguardian.com/politics/2012/aug/22/britannia-unchained-rise-of-new-tory-right

    This was not the US in 1937 – 1947 – or the UK, or presumably not even Australia.

  59. Ivor
    January 7th, 2015 at 23:44 | #59

    @J-D

    The US was not a capitalist country between 1937 and 1947. It was a mixed economy.

    As I have already indicated you are confusing a mixed economy with a capitalist economy.

    The more capitalist a country becomes, for example under a Thatcher, the more inequality increases.

    When a country embraces raw capitalism, inequality threatens to becomes extreme. See the new breed of capitalists waiting in the wings in the UK who envisage:

    your wages will meet the Chinese somewhere, and so will your social conditions … abolish minimum wages, abolish social protection.

    See: http://www.theguardian.com/politics/2012/aug/22/britannia-unchained-rise-of-new-tory-right

    This was not the US in 1937 – 1947 – or the UK, or presumably not even Australia.

  60. Ikonoclast
    January 8th, 2015 at 06:08 | #60

    @Ivor

    You are quite right. One only has to read “The Endless Crisis” by John Bellamy Foster and Robert W. McChesney to begin to see what is going on today.

    “The more capitalist a country becomes… the more inequality increases.” This is absolutely correct. The lesson of laissez-faire or unfettered capitalism everywhere and at every time has been precisely this lesson.

    In order to prevent this process (of increasing inequality) the democratic government in a mixed economy will legislate and operate to protect or further other social values. However, I hold with the thinkers who declare we are now in a post-democratic age. Corporate, oligarchic capital has effective control of economic policy in all developed economies. Even in the so-called democratic age, an uneasy tension and competition existed. Capitalist power was only rolled back to some extent. Government at that time served two masters, capital and labour. Capitalism has now returned powerfully (with over four decades of political reaction) and is in a very dominant position. Government again serves only one master, capital, Hence inequality is increasing rapidly again.

    Mathematical economists seem to want to describe political economy in its entirety mathematically (an impossible research program) or to limit economics to that part of political economy which can be described mathematically (an incomplete research program).

    Now, it is quite valid for a person to be expert in, heavily invested and highly skilled in mathematical economics. This person can be of great value applying their metier to real world problems reducible to mathematical economics. What I disagree with is the idea that;

    (a) all real world political economy problems are reducible to mathematics; or
    (b) the definition of economics should be reduced to mathematical economics.

    I hold that capitalism is now proven to be a system with ultimate failure systemically inbuilt: in other words inherent contradictions which will destroy the system sooner or later. This essentially arises because its design as a system caters only to the needs (ultimately) of capitalists and capital accumulation. The real needs of the mass of people and the real needs of the environment, if it is to survive as a sustaining environment, are not met. These needs are met incidently, or not at all, only in so far as the mass of people and the environment serve the needs of capital. However, capitalism is not free-standing and “leading” in the sense its proponents assert. It needs the masses (workers and consumers) and it needs the sustaining environment. It both needs them and destroys the conditions for their healthy and even continued existence.

    Capitalist ideology essentially holds that it is a self-piloting, self-regulating system. However, in its pure form there are no regulating feedbacks or no regulating feedbacks that operate in a timely enough manner to prevent system crashes. The analogy of a banking crash or a depression crash to a computer system crash has some use. Operators outside the capitalst system (namely the government) have to reboot the system when capitalism crashes. Another example of a reboot is a revolution but this is a reboot into a different system. Also, the social-democratic government (if such exists) has to continually re-distribute wealth as the natural tendency of unfettered capitalism is to conctrate wealth to such an extent that the poorest are left without a worthwhile or even sustainable existence.

    Thus, in summary, capitalism is a system with the most serious design faults. It periodically produces instability and crashes. Left to its own devices, it impoverishes the masses and destroys the environment. It requires constant excessive oversight, correction, rebooting and redistribution to rectify its blind drives, its instability and its maldistribution.

    We have to design and implement a better system. That better system is likely to be worker co-operative s*o*c*i*a*l*i*s*m as outlined, for example, by Richard D. Wolff. The good thing about that system is that it could be arrived at by incremental change, step by step reforms, until eventually the change became so great it constituted a revolutionary change. But to describe that process would take another very long post.

  61. J-D
    January 8th, 2015 at 06:09 | #61

    @Ivor

    Then there are no capitalist countries, only mixed economies; and reductions in economic inequality are possible in mixed economies without the complete elimination of capitalism.

  62. Ikonoclast
    January 8th, 2015 at 06:41 | #62

    @J-D

    I argue (in my piece above your post) that capitalism is fundamentally and fatally flawed. It is an unustainable system ecologically and it is so inefficient and inequitable we spend inordinate time and effort correcting its many injustices and mammoth stuff-ups. The costs of capitalism’s failures are also very inequitably distributed.

    Here’s a question or two for you. Why has inequality increased in developed countries for the last 40 years? What would it take to permanently correct these biases of capitalism as opposed to reforming capitalist and then seeing it reassert its great power and regress to inequality again?

    The answer is to replace unsustainable, unreformable capitalism by a better system.

  63. Ivor
    January 8th, 2015 at 07:28 | #63

    J-D :
    @Ivor
    Then there are no capitalist countries, only mixed economies; and reductions in economic inequality are possible in mixed economies

    That is what you should have said in the first place instead of waving a false flag for capitalism and playing silly semantic tricks.

    As you indicated:

    I do not have enough information about whether capitalism has reduced inequality

    you have no basis for your latest dogma;

    reductions in economic inequality are possible without the complete elimination of capitalism.

    which also indicates you are not aware that capitalism causes inequality in mixed economies.

    You should spend dome time and collect the necessary information.

    As long as there is capitalism (or another form of bourgeois economy) there will always be inequality and, under capitalism, it will steadily increase to finally present humanity with a final catastrophe.

  64. Ivor
    January 8th, 2015 at 07:30 | #64

    J-D :
    @Ivor
    Then there are no capitalist countries, only mixed economies; and reductions in economic inequality are possible in mixed economies

    That is what you should have said in the first place instead of waving a false flag for capitalism and playing silly semantic tricks.

    As you indicated:

    I do not have enough information about whether capitalism has reduced inequality

    you have no basis for your latest dogma;

    reductions in economic inequality are possible without the complete elimination of capitalism.

    which also indicates you are not aware that capitalism causes inequality in mixed economies.

    You should spend some time and collect the necessary information. You obviously have not read Marx.

    As long as there is capitalism (or another form of bourgeois economy) there will always be inequality but, under capitalism, inequality will steadily increase and culminate in a final catastrophe.

  65. Ikonoclast
    January 8th, 2015 at 07:50 | #65

    @Ivor

    What people often forget to do is look at exploitation and inequality globally (or even outside their own neighbourhood, town, class and so on). If we look at exploitation and inequality globally, past and present, we are forced to notice that improving conditions for workers in some countries in some periods were paid for by the spoils of war, empire and imperialism: by the worsening of conditions for vast masses of peasants and workers in 3rd world countries.

    J-D should Look up Ideas for India: Why did the Indian economy stagnate under the colonial rule. It’s an interesting article. Below is a quote:

    “The year 1600 was during the end of Akbar’s reign, which is considered to be a prosperous time in India. Starting from that period, there was a continuous decline in India’s per capita income till around 1850. This decline started well before the advent of the East India Company and therefore its origin cannot be explained as an outcome of colonial policies alone. However it is also true that the East India company failed to arrest this trend and as a result, the average income declined by 17% under their reign (1757-1857).

    After the Sepoy Mutiny (the First War of Indian Independence), India was governed directly by the British government. Between the Sepoy Mutiny and Independence, there was a mild increase of around 10% in the per capita income probably because of investments in physical and human capital. All in all, the average income in India decreased by 8% under British rule over a period of two centuries (1757-1947). Undoubtedly, this was a period of remarkable stagnation that cannot be explained as a result of normal business cycles.

  66. J-D
    January 8th, 2015 at 08:28 | #66

    @Ivor

    Economic inequality in the United States reduced between 1937 and 1947 without the complete elimination of capitalism.

  67. Ivor
    January 8th, 2015 at 08:45 | #67

    J-D :
    @Ivor
    Economic inequality in the United States reduced between 1937 and 1947 without the complete elimination of capitalism.

    And would have been sustained and/or greater if they completely eliminated capitalism.

    Capitalists restricted this process as much as they could.

  68. Ivor
    January 8th, 2015 at 09:00 | #68

    J-D :
    @Ivor
    Economic inequality in the United States reduced between 1937 and 1947 without the complete elimination of capitalism.

    And would have been sustained and/or greater if they completely eliminated capitalism.

    Capitalists restricted this process as much as they could.

  69. Ernestine Gross
    January 8th, 2015 at 13:25 | #69

    @Ikonoclast
    Re your @1, p2
    Thank you for your detailed reply. I agree with your first sentence but I don’t believe this is due to ‘specialist’ vs ‘generalist’. But this disagreement doesn’t matter, IMO.

    You come from a totally different perspective (different information set), nevertheless, I once again find an example of almost agreement, although for different reasons.

    You write: “Change the institutional framework and a radically new economics could arise.”

    I almost agree. I would say, a change in the institutional environment results in a different economy. This is what I tried to indicate by having a list of examples of institutional environments, indexed by k. [1]

    Another way of talking about the ‘institutional environment’ is to borrow a term from game theory, namely to say the institutional environment refers to ‘the rules of the game’.

    If you accept that a change in the ‘rules of the game’ result in a different economy, and you accept that the rules of the game have changed since Karl Marx collected data, analysed it and wrote, then the question arises: Are the conclusions relevant for contemporary life? (I have no opinion on this question other than I would not believe an unqualified Yes.)

    Prof Q (and others) say that there are various versions of ‘capitalism’. This makes sense to me because the institutional environment of countries or regions, labelled ‘capitalist’ differ in detail. I would be surprised if sociologist or historians or others would not be quick to point out that differences in the rules of the game have their origin in the socio-political history of various countries, which in turn is influenced by its philosophers. I would imagine this is the case but I don’t know the details. Putting it together, one could talk about different development paths of ‘capitalism(s)’. Whether there is convergence or divergence in ‘the rules of the game’ or a series of getting closer only to depart again, is an empirical matter. We shall see. IMHO, communication among non-specialists in grand narratives would be easier without the term ‘capitalism’. But this is merely my personal opinion. (I don’t like other ‘ism’ words either.)

    I noticed a further post by you. Icon, I don’t have the time to reply. You, as well as Terje P strike me as valuing intellectual honesty. And this matters to me, irrespective of the different ‘grand narratives’.

    [1] No, I am not so stupidly ambitious to wish to mathematise political economy as described by you (ie just about all aspects of human life). I don’t know whether it can be done. I don’t know whether anybody is working on it. I roughly parameterised economies by the institutional environment in a very abstract way for the purpose of having a mental road map for myself to, so to speak, organise bits and pieces of information in relation to economics in a broader sense in my own head.

  70. Donald Oats
    January 8th, 2015 at 13:50 | #70

    @Ikonoclast
    Rhinehart, and Clive Palmer, are plutocrats: one is (barely concealed) in the shadows, the other is overtly in the lime light. The Koch brothers, similarly. Bill Gates I would never consider as a plutocrat, for he has applied his wealth (after retirement) to reducing healthcare burdens in developing countries, something so unselfish as to be antonymous to plutocrat behaviour. Even so, wealth unlocks doors, and all wealthy people benefit from that effect.

  71. Ivor
    January 8th, 2015 at 15:11 | #71

    @Ernestine Gross

    Unfortunately you do need to use words like capitalism.

    At a deep level, I am not aware of different types of capitalism – just like different races are not, in essence, different types of mankind.

  72. Ernestine Gross
    January 8th, 2015 at 15:21 | #72

    Tony Lynch :
    Ernestine. I do not understand. Piketty’s global wealth tax is a “theoretical solution” surely means it most clearly captures the logic of any solution. Any other suite of policies will have to redistribute wealth downwards. So if the global wealth tax is utopian – because the wealthy don’ want to so redistribute, and have the power to stop it – then any suite of other policies to the same end is also utopian. My reading stands.

    Tony, your argument may well be acceptable in the area of pure metaphysics, using some version of inductive reasoning (and therefore you conclude ‘your reading stands’). But it does not hold if observables are taken into account. With reference to Piketty’s own book, Capital in the 21st Century, a (progressive) wealth tax exists in some European countries at present and he lists the history of on and off and on again wealth taxes for some other countries. Therefore the distinction between global wealth tax and wealth tax matters. (my point).

    My point about a portfolio of policies becomes relevant if the empirical data is taken into account regarding vastly different circumstances of jurisdictions in the ‘global economy’. Under such circumstances a ‘global wealth tax’ might well be “utopian” but working toward a reduction of wealth concentration via various policy measures involving taxation laws and enforcement (including putting pressure on the relatively ‘small’ economies that provide tax heavens) is not utopian and I have confidence in the public at large to draw a line in the sand, via political processes, as to what acceptable degrees of wealth concentration are.

  73. Ikonoclast
    January 9th, 2015 at 12:10 | #73

    @Ernestine Gross

    I have read your replies to me and Tony Lynch. I think we all start from a position where we hold that large inequalities of wealth are neither justifiable nor healthy and that this is true for societies and individuals in society. In that sense I believe we are all on the same page. I will leave it to Tony to elucidate whether this makes us deontologists or consequentialists.

    I am not a mathematical thinker as such but I am a confirmed categoriser and “set” thinker albeit at the English language level rather than at the formal and explicit mathematical level. You were talking about sets of of institutional environments, indexed by k, and I, because of my relative mathematical ignorance, and ignorance of notation, thought you were positing a variable k which would be applied to a universal formula. Such an egregious mistake of intepretation will rightfully seem laughable to you. Having had that cleared up clarifies for me that our economic “general positions” are relatively close in the institutional debate sense.

    You write: “Putting it together, one could talk about different development paths of ‘capitalism(s)’. Whether there is convergence or divergence in ‘the rules of the game’ or a series of getting closer only to depart again, is an empirical matter.”

    I think this is a very useful thought. I would hypothesise that extant “capitalisms” have indeed followed diverging paths at times but also shown both cycles and reconvergance(s). What is needed is a quantitative set of metrics for measuring the “purity” of capitalism. Thence we could say, according to the chosen metrics, this is a 50% capitalist society, this is an 80% capitalist society and so on.

    My first candidate for a metric would be “net social transfers” which would factor in all social transfers including social transfers in kind (e.g. public health, education, subsidies) minus all taxes, levies and other impositions in kind (like conscription). All these would have to get a calculated monetary value and be summed out for the nation (jurisdiction) as a whole. Every tax and every subsidy would have to be taken into account. Subsidies to rich coporations (mining fossil fuel) and to rich individuals (neagative gearing, tax deductions) would have to be taken into account.

    Of course, with a balanced budget, total net social transfers on at least one accounting are likely to be zero. What is needed is a calculation of transfers which reduce inequity and transfers that increase inequity. In particular a ratio is needed such that we can say 75% of transfers reduce inequity and 25% of transfers increase inequity.

    Other candidates for these metrics would be the size of the government budget compared to the size of the economy, the Gini coefficient, ownership statistics (the amount of wealth owned privately and the amount of wealth owned publicly), distribution of wealth (if that is not already captured in the Gini coefficient) and assessments of which classes or interest groups are most effective in getting their economc policies adopted by government (if this can be quantified).

    Using these metrics, we could theoretically assess the “purity” of capitalism in each jurisdiction. Now, I must note a bias I would have in this assessment. With my Marxian bias the definition of “pure capitalism” would be that which demonstrated the highest possible inequality and the highest possible concentration of wealth and oligopoly. The libertarian or Austrian economist would not call this “pure capitalism”. Their definition would comprise, among other things, a minimalist state (the state is not always minimal in oligarchic capitalism) and minimal social transfers to anyone rich or poor. Nonetheless, the data and metrics could be run against various defintions of “pure capitalism” for historical data series if one had enough data.

    What I suspect would be found is high purities of capitalism (on both the Marxian and the Austrian measures) before great crashes, depressions and recessions. Then there would be “reforms” of one sort or another and one extent or another after these crises thus leading to a progressive lowering of the purity of capitalism for a time. Then reaction sets in again.

    I see capitalism as quite separate from social democracy per se though not separate to extant laws in a nominal social democracy which whilst having social democratic laws will also usually have laws legitimating corporations, corporate rights, ownership rights of means of production and so on.

    My position is that more or less “pure capitalism” on the Marxian or the Austrian measures is a system of internal contradictions arising to some extent from the “fallacy of composition” though in the case of a real system it becomes a concretisation of the “fallacy of composition”. I mean that crises of underconsumption / overproduction / overaccumulation and so on are inherent to “pure capitalism” and must always be countered by state interventions both “rebooting” the system and then countering the natural tendencies of pure capitalism with further social tranafer and other checks and balances.

    My argument thus is that a system with heavy bias which needs constant steering correction like this is a fundamentally flawed system. One would say the same about your car’s steering system if it had a heavy bias which needed constant effortful correction at the steering wheel. A better analogy is a plane that is badly designed with respect to its centre(s) of lift, centre of gravity and other dynamic flight control and flight characteristics. Such a plane will exhibit dangerous flight characteristics such that at certain points under certain conditions it suddenly forsake stable flight characteristics and exhibit a marked and indeed unstoppable tendency go into a dangerous dive. I am not referring to stalling which is inherent to all aerodynamic systems.

    Thus the analogy continues. Any system, even the best, can stall under certain conditions and bad human control. But a fundametally unstable system or machine (and a system is another type of machine essentially) with inherent contradictions inbuilt can exhibit a tendency to “autopilot” to a dangerous state and then crash from the dangerous state. This is what I contend that capitalism at “high purity” does. When the system is that bad you don’t reform it, you change it out progressively (module by module) and build a new system even if it is done modularly rather than in a revolutionary way. (You see I am also a systems thinker.)

    Intriguing Note: An aircraft called the Flying Flea or Mignet Pou-du-Ciel exhibited something of the characteristics I am talking about. It did not exhibit all characteristics as the entire analogy certainly does not match piece for piece in detail. It’s worth looking up Flying Flea safety concerns on Wikipedia for a bit of interest.

    BTW, I have not read Piketty yet and I should.

    Footnote – A digression.

    You mention that I “come from a totally different perspective (different information set).” You could just as correctly have said I have both a different information set and a different grand narrative. I think I am both an exploring thinker and a somewhat inflexible thinker. This is a bit of a paradox (and dilemma) as most inflexible thinkers don’t intellectually explore very much in my experience. Also, I don’t tolerate ambiguity very well. I want everything clear and sorted.

    This means I explore but immediately want to categorise new data to fit my grand narrative. This is the reverse of being open to new data and letting it suggest the new testable hypothesis. It can result in a dogged analysis, if one is stubborn enough, of attempting to stuff things into preconceived boxes. I hope I am intellectually honest enough, as you mention, to finally say “Well this just doesn’t fit.”

  74. Ikonoclast
    January 9th, 2015 at 15:39 | #74

    @Ernestine Gross

    Further to my above post which is my main reply, I should add:

    I do currently hold there is now a global convergance towards to less adulterated and less ameliorated capitalism and also to all-pervasive capitalism. The pulling of Russia and China into the capitalist system, the extreme developments of neoliberalism and inequity of the USA and the world’s continued movement towards transnational oligopolisation, conglomeration and concentration of wealth are the biggest four pieces of evidence I would adduce in this regard. A way to shorthand this is to say capitalism is waxing and social democracy is waning. We are now, I assert, in the last phase of late stage capitalism. I have no idea how long this phase could run. It could run another 50 years.

    I think all this is consistent with Marx’s predictions: that capitalism would triumph and dominate every other value system. Marx’s other prediction is that this final stage would not be not a stable or sustainable state. Internal contradictions particularly the instrinsic capital-labour conflict and external contradiction with the biosphere (predicted or not predicted by Marx depending on your school of interpretation) mean that the final stage of extreme capitalism must eventually collapse (to revolutionary changes or ecological collapse).

    My rather homespun version of eco-Marxian philsophy predicts this collapse. It’s a scientific theory, at least in that it is testeable and falsifiable albeit not necessarily in my lifetime.

    An interesting quote from Wikipedia is;

    Contrary to the depiction of Karl Marx by some environmentalists,[13] social ecologists[14] and fellow s*o*c*i*a*lists[15] as a productivist who favoured the domination of nature, eco-s*o*c*i*a*lists have revisited Marx’s writings and believe that he “was a main originator of the ecological world-view”.[12][page needed] Eco-s*o*c*i*a*list authors, like John Bellamy Foster[16] and Paul Burkett,[17] point to Marx’s discussion of a “metabolic rift” between man and nature, his statement that “private ownership of the globe by single individuals will appear quite absurd as private ownership of one man by another” and his observation that a society must “hand it [the planet] down to succeeding generations in an improved condition”.[18] Nonetheless, other eco-s*o*c*i*a*lists feel that Marx overlooked a “recognition of nature in and for itself”, ignoring its “receptivity” and treating nature as “subjected to labor from the start” in an “entirely active relationship”.”

  75. Tony Lynch
    January 9th, 2015 at 17:30 | #75

    Ernestine & Ikonoclast,

    I appreciate and value the Socratic dimension to all this. In fact, it makes me happy and makes me want to have a barbecue or dinner party, even seminar. We feel and face the same civilisational issues in our own, understandable, ways.

    I think we are on roughly the same side (not just, metaphysically or inductively) when it comes down to it. Things are such that we all, I think, sense, fear, and for our own sanity and shared humanity, want to understand and face, what is happening around and in us.

    My idea is that while it is about “capitalism”, it is also about a politics capitalism tends to make us forget, or see as simply a “superstructural” matter. Thought about politics – about living together for the good life – began with a concern not so much for modes of production, investment, consumption and exchange (though that was always there, and essential), but with the conditions of shared self-respect and so, integrity and honorable freedom (“citizenship”). And when our first, Ancient Greek thinkers, thought about this, oligarchy was always at the centre of their minds.

    I want us to think more directly about oligarchy as a poltical formation and the people it demands, produces, uses and excludes. I want, for one thing, to think about what Plato called “pleonexia” – the interweaved and self-reinforing desires for wealth and power above all else.

    Now I don’t endorse Plato’s of virtuous philosophers at all, nor his characterisation of what he, like his fellow thinkers, thought of as democracty. But I really do think we have a lot we might draw upon and learn from if we did think this way first, rather than always think in terms of “capitalism” as an economic system.

    Too quick, I know. And who would want more? (Not jc for one). But thanks for the civilisation. The one I think we all value.

  76. J-D
    January 9th, 2015 at 17:43 | #76

    @Ivor

    No, you don’t need to use words like capitalism.

  77. Donald Oats
    January 9th, 2015 at 18:14 | #77

    I haven’t read Marx in detail (sadly, some life events got in the way of that), so I apologise if he covers this form of collapse: economic collapse due to technological advances replacing the consumer-worker. I see it as the autonomous systems revolution, where machines replace hands, computers—von Neumann style, and adaptive neural network style—replace specific cognitive skills, and so inwards we ride the wave of the death in-spiral, as fewer people get to play at being both worker and consumer, eventually doing neither. When the wealthiest own more houses than they can count, more islands than they can visit, more jets than they can fly on, what is left to do then? And if there are far too few consumers for their produce, what happens then?

  78. Ikonoclast
    January 10th, 2015 at 00:15 | #78

    If I may reply to Tony Lynch, J-D and Donald Oats in succession as there are overlaps of ideas. First, yes it is great to discuss ideas. Outside of academia almost nobody in our society wants to discuss ideas. It’s an intellectual wasteland out here in suburbia.

    I want to quote two very interesting paragraphs from Tony, as I like to have the discussed quote in my reply.

    “My idea is that while it is about “capitalism”, it is also about a politics capitalism tends to make us forget, or see as simply a “superstructural” matter. Thought about politics – about living together for the good life – began with a concern not so much for modes of production, investment, consumption and exchange (though that was always there, and essential), but with the conditions of shared self-respect and so, integrity and honorable freedom (“citizenship”). And when our first, Ancient Greek thinkers, thought about this, oligarchy was always at the centre of their minds.

    I want us to think more directly about oligarchy as a poltical formation and the people it demands, produces, uses and excludes. I want, for one thing, to think about what Plato called “pleonexia” – the interweaved and self-reinforing desires for wealth and power above all else.” – Tony Lynch.

    It is very true that Marxian analysis (I don’t call myself a Marxist nor see Marx as an infallible prophet) pays more attention to the material base than to the “superstucture”. The superstructure in this sense is the entire collection of ideology, religion, ethics, cultural mores and so on. Marx took the view, as a materialist, that the material conditioned the ideational and ideological. At least, this is my potted interpretation. I have tended to agree. Particularly, he took the view that the mode of production created and conditioned ideology (using ideology as shorthand for the whole list). He did see feebacks occuring, so ideology can feed back as justification and legitimation and then perhaps accentuate an aspect or play a partial role in engendering opposition.

    However, the problem of oligarchy seems to be perennially with us. This is true be they ancient oligarchs (Greek, Roman), be they kings, aristocrats and nobility, be they robber baron industrialists, tycoons and magnates of capitalism (terms of an earlier capitalist era) or the modern oligarchic capitalists of say the USA or Russia or Mexico or Australia. This seems to suggest that thinking about “pleonexia” (a new word to me) makes sense. I have used “solipsism” as a “grab-bag” word to mean pretty much “pleonexia” in certain contexts. At the same time, I knew the standard defintion of “solipsism”.

    Some Marxists or post-Marxists, maybe like Marcuse or Althusser, tend to hold that man’s nature is entirely plastic and that there is no such thing as “human nature”. They also tend to claim such thinking is Marxist or Marxian. I have read one book by Marcuse and nothing by Althusser. I tend to find such writers almost impossible to understand. Maybe their concepts are lost in translation. I have not read the book mentioned in the next quote either.

    ” ‘Marx and Human Nature: Refutation of a Legend’ is a 1983 book by political theorist Norman Geras, who discusses Karl Marx’s Sixth Thesis on Feuerbach and argues against “the obstinate old legend” that Marx denied the existence of a universal human nature.[1] Geras’s work is a classic discussion of the subject, and his conclusions have been endorsed by numerous scholars.” – Wikpedia.

    I have just found this reference and I am glad to find it. I always regarded as nonsense the claim that man had no essential nature. Lefties lefter than me used to say “man has no essential nature” in my undergrad days. They seemed to be implying that human nature was completely plastic and could be completely remade by a new society and in particular by new modes of production and ownership. Of course, “no universal nature” is not exactly the same as “no essential nature”. Universal nature implies to me a “broad and universal nature”. “Essential nature” implies something narrower, I think. It encapsulates the idea that there is much that is contingent in the construction of human nature as expressed in social personality and behaviour but there is also much that is “essential” and thus common to all or most humans.

    In this context, I think we could agree that “pleonexia” is part of essential human nature. It appears in almost all persons in all historical ages to a greater or lesser degree and across many different modes of production. One result, oligarchy or its equivalents (concentration of the major wealth and power among a minority), has been a feature of almost every age and society. To me, that heightens the need for ideologies, ethics etc. that “frown on” pleonexia and expunge the deluded belief in Utopias where pleonexia can be abolished rather than managed. Instead modern capitalist and free market ideology lauds pleonexia as the bes thing leading to the best economics. The extreme of this occurs in Randian philosphy but standard right-wing thinking in the USA is little different in this regard.

    Ritenbaugh describes it as “ruthless self-seeking and an arrogant assumption that others and things exist for one’s own benefit”. Nothing could describe modern neoliberalism better than this. When I was still unfortunate enough to be in a public service ruined by pseudo-corporatism and managerialism, I used to come home almost raging. “Nothing satisfies them! They always want to cut our real pay further (after inflation), delay new agreements keeping us on old pay rates, reduce our conditions, force us to trade conditions for pay “rises” less than inflation, narrow our pay bands, cut off promotion opportunites, add new duties without pay, micro-manage and infantilise us. What is the end point? When will they be satisfied? When we are all reduced to peonage and penury?” I can pretty much rant like that word for word. Pity my poor wife hearing this stuff. She endured the same at her workplace but much more stoically.

    But it does contain a truth. Unleashed and self-justifying pleonexia (I thank ‘ee for this word) in late stage capitalism has exactly these qualities of never being satisified until the priveleged have everything and the oppressed nothing or as little as can be given them (the bare reproductive costs of labour).

    I disagree with J-D. We do still need to use words like capitalism. At the same time, I agree with Tony Lynch. We also need to start using or re-using words like pleonexia. I am of the firm opinion that capitalism is a real word with real (and very extensive) concepts contained within it. I know that this puts me at odds with J-D and maybe with E. Gross at the theoretical level. However, I don’t resile. The word is necessary and I won’t permit an ideology (capitalism is also an ideology) to exist yet to pretend it doesn’t exist by limiting my lexicon or my concepts or anyone else’s if I can help it.

    Now, I refer to Donald Oates statement:

    “economic collapse due to technological advances replacing the consumer-worker. I see it as the autonomous systems revolution, where machines replace hands, computers—von Neumann style, and adaptive neural network style—replace specific cognitive skills…”

    Marx certainly wrote about mechanisation and its effects. Clearly he was speaking about mechanisation and not modern computer and robot automation. But there is a sense in which certain forms of mechanisation automate things. I can think of an example. Perhaps a workman used to stamp discs out of a sheet of metal with a hammer and a die like a cookie cutter. In the context of specialisation of tasks, which both Adam Smith and Marx wrote about, this might be this man’s only job all day. However, a roll of sheet metal can connected to a rolling-mill-like set-up (though it is already rolled of course) and as it is pushed through by a motive power like steam power through a steam engine and cogs and belts for drives a turninf wheel with a cam can lift and drop a mechanical stamping hammer. In a very real sense here this process has been automated. The man is no longer needed and can be laid off.

    Marx was very much aware of mechanisation-automation in this sense and wrote of its ongoing effects, current and predicted, in his view of matters. He was a markedly prescient thinker and definitely did envisage these developments intensifing to a great degree though he did not specifically predict robots and computers to my knowledge. In the same manner, he was well aware that using engines and increased energy sources was greatly multiplying human productivity and would do so at ever greater rates in the future. From this and other effects he did predict problems of over-production. Namely, that capitalism could produce more than people can consume or afford.

    He particularly noted that lower levels of the employed or lower wages of the employed would mean that the workers would not have enough wages to consume the products of capitalism. This problem is called underconsumption or overproduction by Marx, lack of aggregate demand in Keynesian economics and lack of consumer demand today. He noted that each employer (capitalist) had an incentive to pay lower wages than his competitors if he could. This way he could extract more surplus value or profit as modern economists call it. But if every capitalist did that then wages would most likely become inadequate to consume all production. This would lead to a slowdown in the economy and maybe a recession or depression crisis.

    The notion that what is good for one capitalist is good for all capitalists (which the above example shows is fallacious) is an example of the fallacy of composition. To Marx, such fallacies of composition (though I don’t know if he used that term) and maybe some other processes too, constituted what he called inherent contradictions of the capitalist mode of production. The most fundamental of these contradicitons was that the basic interests of workers and of capitalists were at odds and that this would lead to conflict.

    There is more scholarship now on the issue that Marx was not blind to the rift between man and nature unleashed by the forces of capitalism. He used the term “metabolic rift” I believe. In the Monthly Review look for “Marx and the Rift in the Universal Metabolism of Nature” by John Bellamy Foster.

    Finally, Marx was not completely anti-capitalist in the sense that many modern people believe he was. Marx regarded capitalism as revolutionary in its time (his time). He had great respect for its power in overthrowing feudalism and mercantilism and revolutionising and increasing production. He viewed capitalism as a necessary stage and an advance in many ways but also one which contained new ills. Marx, Engels and many others were horrified by capitalism’s own excesses of exploitation in the cotton mills and so on. And he saw this exploitation intensifying until workers rebelled. Marx did not regard capitalism as the end of the process. He saw each era of economic organisation as bearing the seeds of its own destruction as it were, thus leading to a force driving towards a next historical phase. Capitalism had and has inherent contradictions which will eventually cause workers to overthrow it. At least that was Marx’s prediction.

  79. Ernestine Gross
    January 10th, 2015 at 11:14 | #79

    This thread is headed “Monday Message Board”. Today is Saturday of the same week.

    This thread started with a post by Tony Lynch, which I repost here:

    “Finished Picketty. What I don’t get is Picketty’ s claim that there is a solution to the general tendency of capitalism to economic inequality increase – with all its costs/destruction of social and political equality, and so democracy – and that is a wealth tax. Then his claims that i) Such a tax/solution is not possible under such conditions (is “utopian”), but ii) that capitalism is the only game in town. Is it meant to be a tragedy of the TINA type?

    What use is this? Or is it this that explains his popularity? Critque without edge?”

    I replied expressing my disagreement and stating reason, and, I replied again to his defence, to substantiate further my initial objection.

    Days later, Tony writes a post to Ikonoclast and me suggesting ‘agreement’. No Tony, I still don’t agree with your reading of Piketty and my point is substantiated with empirical observations, drawn from Piketty’s own book. If you now wish to agree with me, it could only be on my point about a ‘portfolio of policies’ instead of a global wealth tax. (I did not need this point to prove your error resulting from substituting ‘wealth tax’ for Piketty’s ‘global wealth tax’ is fatal for your argument.)

    I am with C-D regarding Ivor’s command as to what terminology must be used. Troy Prideaux’s post put a smile on my face. I’d be the last to discourage Ikonoclast’s explorations (as I understand his own description). I assume, I believe on good grounds, he does not insist in me joining his research project.

    It was an interesting week on this thread. Unfortunately, the holiday season is almost over.

  80. Tony Lynch
    January 10th, 2015 at 13:03 | #80

    Ernestine, sorry if I wrongly thought I was agreeing with you.

    Ikonoclast, I hope I’m not getting it wrong again if I say I very much agree with your last post. I would love to try and meld Marx and Plato and along the kind of lines your remarks on human nature suggest.

    It seems to me Plato gets an undeservedly bad press – especially from Karl Popper – though it is certainly true his ideal state, The Republic, seems unduly restrictive to normal human wants and desire for freedom. But a more sympathetic reading of him sees his politics as an attempt to deal with what you pointed to when you said that the problem of oligarchy seems to be perennially with us.

    Plato says, roughly, that all politics of its nature – organisation and hierachy – and human nature – the entwined attractions of wealth and power – ends up with an oligarchic cast. So the problem of politics he tnought was to ensure that the oligarchs were concerned with the public good or interest, not their own. But how, given the nature of political rule and human nature to do this?

    His answer had two aspects. Notoriously the first aspect was that the rulers had to be philosophers – that is, men or women (here he was a feminist) who knew what justice was, and, knowing this (for he felt that virtue is knowledge) would pursue justice above everything else. I think we can put this aside.

    The second aspect is different – and probably reflects Plato’s own doubts about the first. Here Plato tried to design institutions of rule that forced the oligarchs to rule in the interests of the citizenry. He suggested three things I think interesting and very much worth thinking about. First, he insisted that the rulers must live off public resources only, and have no private resources of their own. They were housed and fed at the discretion of the people as a whole. Then he tried to rid them of any nepostic motives by insisting on”a community of wives”, and then he tried to prevent them from conspiring against the public good by insisting on complete transparency. All aspects of their lives , including their very dwellings, were to be always open to the public. Wemight sum it up this way: if yoh want to exercise political, power, then you must accept personal poverty, repudiate family ties, and accept total transparency.

    Now that is a great deal!

    The question is, however, is there any other way to domesticate oligarchy for the public interest? If not – and if any version of Plato’s solution is simply impossible – then the situation is ultimately and inevitably tragic. (Not that this would have fazed the ancient Greeks, who famously were able to face up to the realith of tragedy, but I can’t see us, with our Christian traditions, doing the same.)

  81. Ikonoclast
    January 10th, 2015 at 13:23 | #81

    @Ernestine Gross

    An interesting response. Yes, we have hijacked a Monday message board thread. We can plead in our defence the lack of a sandpit being opened recently.

    Ernestine, yourself and J-D as I see it want to dictate (sorry, I can think of no more appropriate word) the lexicographical (meant in a language sense not a mathematical sense), conceptual and ideational grounds of the debate. This is as in “I don’t agree with your ideas so I will reject your terms and their definitions. I will call them non-words and non-concepts. I will do this rather than engage in a logical philosopical debate and seek to deliver my refuations there.” You don’t even deliver cogent arguments that “capitalism” is a content free word. You simply declare it so as does J-D.

    I wonder what Tony Lynch would say if we attempted to dictate to him in this fashion by saying “pleonexia” is a meaningless word referring to a meaningless, made up, ill-defined and bascially non-existent concept and reality?

    I wonder what you would say to me I attempted to deny the meaning of words like “insititution”, “insititutional”, “corporate”, “corporatised” and so on. Or if I sought to disbar entirely the specialist languages (for they are a set of languages) of mathematics?

    I don’t accept and never will accept what I percieve as an attempt at a kind of philosophical or discourse dictatorship: dictating what words and concepts will be accepted in discourse and what words will not. A like action by me would be to summarily deny that the word “Revelation” as used in Christian theology has any meaning. Of course it has a meaning. If one studies a little theology the meaning becomes quite clear. I engage with the concept of Revelation whilst not accepting its premise(s). I might for example point out the unverifiable nature of it. Did a person really have a Revelation or a delusive episode or was he/she hoaxing? There is no way to determine the answer that I know of. Revelation as codified dogma also relies on a circular proof. Revelation is true because written, codified Revelation says it is.

    Of course, there are also meaningless and contentless words but cogent argument is required as to why they are so. A simple declaration does not settle it.

    I accept when someone doesn’t want to debate me or “join my research project”. The latter involves too grand a term and is clearly not contemplated by me so it comes across as a little sarcastic.

    My frankest statement is this. If you think “capitalism” means nothing and refers to nothing then I think you are egregiously mistaken.

  82. Ikonoclast
    January 10th, 2015 at 15:10 | #82

    @Tony Lynch

    I think we agree on a number of important things, especially the terms and method of debate itself and thus can debate productively. I have written above my strong but hopefully polite rejection of what I see as Ernestine’s and J-Ds untenable philosophical position of foreclosing on debate by limiting discourse to their approved terms and concepts.

    It’s not as if “capitalism” is an estoteric term or concept. This is unlike say “dialectial materialism” which is esoteric and debatable. “Capitalism” as a term is widely used in almost all economic literature be it orthodox or heterodox and has been so used in its modern sense since about 1850. It has been attributed in this sense to Louis Blanc in 1850 and Pierre-Joseph Proudhon in 1861. Definitions of capitalism vary but some key aspects of the definition are broadly accepted by almost all schools of economics. They may differ on its origins, morphology, justifications, diagnoses, prognoses and so on.

    In its etymological origins it has “evolved from capitale, a late Latin word based on caput, meaning “head” — also the origin of chattel and cattle in the sense of movable property (only much later to refer only to livestock). Capitale emerged in the 12th to 13th centuries in the sense of referring to funds, stock of merchandise, sum of money, or money carrying interest.[23][24][25] By 1283 it was used in the sense of the capital assets of a trading firm. It was frequently interchanged with a number of other words — wealth, money, funds, goods, assets, property, and so on.” – Wikipedia.

    For anyone to deny “capitalism” is a valid word for a valid concept (albeit a complex, extensive and still ramifying and contested issue) is frankly absurd. In some cases, it derives from a denial of orthodox ideology being ideology. Someone planted in the middle of received orthodox ideology and having done no research and analysis, especially no reading of comparitive politics, comparative ideology, philosophy or history, is unable to see their own ideology as ideology. It is the natural and colourless medium they exist in and is as little pondered as a benthic fish ponders the nature of water (having no other experience and presumably no real capacity for pondering).

    Plato appears useful to me from what I know but I have not read him in the English translation original. I have no Greek and no Latin. The problem of pleonexia and the related problem of oligarchy I regard as real and perennial. As I said previously, I reject the utopian notion that we could create a society that would abolish pleonexia. However, we could somehwat ameloeriate and reduce its development in people. Current capitalist ideology sanctifies, legitimises and promotes it. On the political or political economy side it might be possible to almost abolish oligarchy or at leasy to modify in some Plato advocated manner or other manner. It’s certainly a debate we need to have.

    However, we cannot debate capitalism with people who are in denial about its existence and we cannot debate pleonexia and oligarchy with people who are in denial about their existence or are blindly laudatory of such phenomena. To me denying the existence of pleonexia would mean denying the existence of a whole set of things beginning perhaps with physical violence. I would also say that someone who denied the existence of pleonexia had never brought up a child (both for the insights that come from the child’s behaviour and development and the insights, in a couple or as part of general adult society, that come of being part of an oligarchy – the oligarchy of parenthood.

    As for people who want to tell me “capitalism” as a term and a concept has no meaning at all and cannot be admitted into discourse… Go tell it to some credulous, unreflective, uneducated, inexperienced young fool. Such specious nonsense cuts no ice with me.

  83. Ernestine Gross
    January 10th, 2015 at 19:24 | #83

    @Ikonoclast

    I am a little surprised by your reactions. It seems a little more disentangling is required.

    My words to you:
    “IMHO, communication among non-specialists in grand narratives would be easier without the term ‘capitalism’. But this is merely my personal opinion. (I don’t like other ‘ism’ words either.).”
    Surely, this is not to ‘dictate’ as to what terminology must be used!

    But this one by Ivor is:
    “@Ernestine Gross
    Unfortunately you do need to use words like capitalism.”

    I am with C-D on this one.

  84. Ikonoclast
    January 10th, 2015 at 20:58 | #84

    @Ernestine Gross

    Perhaps I misinterpreted it but J-D’s formulation sounded absolute to me.

    “No, you don’t need to use words like capitalism.” I interpreted this to mean capitalism is a term to be excluded from economic and political discourse. Then you appeared to me to concur in this judgement as in “I am with J-D on this one.”

    Your other re-quoted words do not match this strong interpretation I must admit;

    “IMHO, communication among non-specialists in grand narratives would be easier without the term ‘capitalism’. But this is merely my personal opinion. (I don’t like other ‘ism’ words either.).”
    Surely, this is not to ‘dictate’ as to what terminology must be used!”

    However, I disagree with both the “strong” and “weak” injunctions or suggestions that the word and concept “capitalism” is not useful in these discussions. It amounts to a denial that capitalism exists when most economists and ideological thinkers since about 1880 have been in no doubt that is does exist. Of course, different opinions have existed about its exact form, extent and efficacy (or not) for attaining various goals.

    I am with Ivor on this point. We do need to use words like “capitalism” or we are in denial about the existence of fundamental features of economics in capitalist form and about capitalism’s existence as a broad ideology. Excluding the term with either “strong” or “weak” injunctions amounts to dominant ideology pretending it’s not ideology. I do not and will never accept that kind of process.

    If you tell me that capitalism is a concept empty of meaning (strong form) or not useful (weak form) you are essentially telling me that capitalism does not exist as a mode of economic production. You might as well try to tell me that photosynthesis does not exist as a mode of biological production. Of course a mode of economic production is not is not so simple nor strictly anlogous to biological production. In an economic system the mode of production encapsulates more than the actual physical process of production in the physical economy. It also entails the ownership, control and organisation of production and the distribution of its rewards. These are involved in a feedback relationship with real material production and they condition each other. Examination of one without the other would be to leave half the agglomerated production system out of the analysis.

    This a failure to communicate founded in fundamental philsophical differences. I no longer think we can communicate or debate in any productive way in this field. Our fundamental frameworks are too different and key anchor points or cardinal points are not moving on either side: neither will they move in my estimation.

  85. Tony Lynch
    January 11th, 2015 at 08:53 | #85

    Ikonoclast, perhaps one more thing of interest. Oligarchy may always be with us, but certainly things are bleaker under capitalism along one important dimension. For capittalism – and capitalists – like to draw upon Mandeville and Smith’s idea of private vice – greed or avarice – as, under this mode of economic organisation, a producer of public good. Thus the truly good man is the most truly effective greedy or avaricious one.

    One can see how this plays neatly into the standing propensity for pleonexia.

    There is a further point, equally important. For if the good man is the greedy and avaricious man, and the more good there is the more effectively greedy and avaricious he must be, then the truly good man – the one dedicated to goodness at all costs – will never take time out from his activities to perform, or concern himself, with matters of private virtue. That would mean reducing the total amount of good in the world. So, in effect, the ethic of capitalism becomes simply the credo of the sociopath.

    Now that, I think, is unique to capitalist oligarchic formations.

  86. Ikonoclast
    January 11th, 2015 at 11:01 | #86

    @Tony Lynch

    I have the feeling that “oligarchic” or noble caprice was worse under the absolute monarchies of the Ancien Régime and Russia for example. Then again, we don’t actually know in detail what some modern billionaire oligarchs and oligarchic cabals get up to though surely it can’t be as bad in open societies.

    Modern capitalism is a complex beast. I tend to think the modern Western world has been formed by the three overt developments: Democracy, Science and Capitalism. At the same time other older philosophic, religious, social and political traditions have had and still have their important influences.

    Many capitalist apologists conflate democracy and capitalism. Many argue that capitalism leads to democracy (somehow) and that the free market is a place of democratic choice. I disagree and turn to a different set of thinkers who see democracy and capitalism as opposed movements and tendencies. John Ralston Saul points out the fact that democracy in the Athenian form preceded capitalism by at least 2,000 years. J.R.S. pours scorn on the idea that capitalism created democracy or can be conflated with it.

    Marxian thinkers point out, in effect, that the worker’s week starts and continues in the workplace later only ending relatively briefly in the marketplace. The relations of production dominate the worker’s life and time and here the mode of control is hierarchical and autocratic. Outright caprice of owners and managers is only held in check by social democratic legislation. Anywhere that check is ineffective or non-existent, capitalism shows its true form. We need only look for recent contemporary examples in places such as the Indian sub-continent (child labour, garment worker conditions), Chinese Saipan (the Jack Abromoff scandals), China (the “Apple factory” FoxConn) and other examples like Nike and Raebok workers. Thus democracy and capitalism are in essential opposition. The only thing that humanises, controls and renders bearable capitalism is social democratic control.

    Science and technology are great enablers and multipliers. Whatever system is run (US capitalism or Soviet communism for example) science can enable many of the same things (depending on social and national goals). Capitalism is not the only system for example that can do advanced nuclear research and engineering. The Soviet Union rapidly caught up to the US and then built the world’s largest (impractically large) thermonuclear device as well as initially beating the US in the space race. In these and like cases, the state of science in the nation is more relevant than the economic system. Again, capitalism is not really the originator of these developments. In these cases empirical science is. In these ways capitalism takes credit for social and scientific advances which rightly regarded are not due to capitalism at all.

    In many ways, capitalism is antogonistic to science. We only have to see propaganda and denialism about pollution, cancer (tobacco) and climate change or AGW to realise modern capitalisms strong anti-science agenda. Capitalism, being owned and run by the oligarchs, supports research only into those fields which further the oligarchic control agenda. We can see examples in military and security research and in the fields of consumer manipulation and the encouragement of individual over-consumption to soak up capitalist over-production.

    In summary, capitalism is largely antogonistic to democracy and partially antogonistic to empirical science. Modern democracy and empirical pure science are arguably the two unalloyed good movements in the pre-modern and modern world. Applied science and technology show many ambivalent features not least that they present moral or ethical dilemmas of all sorts and can unleash many unforeseen consequences.

    If capitalism is antogonistic to democracy and “good” science (as science good for human and ecological health) then what is left to be said for it? The last claim is that capitalism is the best developed organiser and director of economic effort and that it is leads to greatest efficiency and reward for effort. It is not difficult to tear down large slabs of these claims showing them for the specious rubbish they are. However, I should wind up this post quickly.

    The efficiency of capitalism seems a bogus claim at least compared to a theoretical efficiency of an ideal system (whether such an ideal system is attainable or not). Unemployment is a key piece of evidence we can adduce. Capitalism has never been able to solve this problem except for very brief felicitous periods. Indeed, it is easy and very valid to put forward the argument that capitalists deliberately maintain a level of unemployment to discipline workers and depress wages. On ethical and economic grounds respectively it is obviously both morally completely wrong and highly inefficient economically to exclude, waste and discard people. The foregone productivity is very considerable especially at under-utilisation rates of 12% and greater. This has been our recent experience in Australia.

    So, Capitalism, what is it good for? The answer is not very much. Many of the best features of our society come from earlier traditions (philosophy, democracy) and earlier developments (science itself). Capitalism even fails at its central claim. It is not efficient. In fact, it is hugely wasteful and destructive of people, resources and the environment. Other systems are possible and I am developing a theory that we need not a revolution but a progressive “modular changeout” and modular replacement in the system until the system is completely changed. I am a systems thinker in some respects, stemming from some knowledge of computer systems but also from a systems thinker on a more philsophical level. But that is a topic for another post sometime.

  87. Tony Lynch
    January 11th, 2015 at 13:11 | #87

    Ikonoclast, again I think I agree with you, and I wasn’t at all concerned to get into a “which kind of oligarchy was worst” debate. I think my only point in that area would be my worry that capitalist oligarchy tends to a kind of nihilism or solipsism that, as the older traditions you mention fray and decline under its inflience, leaves us oligarchs with no alternative value resoures to draw upon in times of crisis. And so the juggernaut must go on. TINA.

  88. Ikonoclast
    January 11th, 2015 at 14:23 | #88

    @Tony Lynch

    I agree with you and I know I do go off on extended and somewhat tangential expositions (raves?) about my ideas.

    I very much agree that the current capitalist oligarchy is showing disturbing new pathological features that seem go above and beyond what has occured before. These are precisely nihilism, solipsism and a sort of hyper-pleonexia which just runs endlessly out of control and intensifies.

    The nihilisitic tendency strikes me forceibly at times. I have a kind of aghast reaction. “WTF are they trying to do?” Are they TRYING to destroy the world? . It’s almost as if one could not design a better system to wreck the biosphere if one was trying (short of a direct, massive nuclear exchange.)

    It’s a like manual which might detail: “How to have the grestest, most powerful and indulged life in all human history and wreck the world in the process so becoming the last extremely old man left standing who can gloat “I had the best life ever and now that I have to die, dagnabbit, everyone has to die with me.””

  89. J-D
    January 11th, 2015 at 15:17 | #89

    @Ikonoclast

    Yes, you did misinterpret. I reject insistence that the term be used, but I don’t insist that it not be used. Does that make things clearer?

    I hoped I would be clear to begin with in context, where I was reacting to Ivor’s apparent attempt to dictate that the term ‘capitalism’ must be used, in which you appear to be joining. But perhaps I have misinterpreted you and/or Ivor.

  90. Ikonoclast
    January 11th, 2015 at 17:14 | #90

    @J-D

    Ok, I understand. However, I am not sure how you would analyse current global political economy without using terms like “capitalism” and related concepts. And I mean this whether you are an advocate or a critic or undecided about the current system(s) and variants of political economy.

    Out of interest, what would you call the current system or do you have no name for it? Remember, names or labels serve a number of purposes. The first is simply conventional naming. I might be called Bruce. (I am not but let’s go along with it.) By convention I would thus be called Bruce by all of my family, friends and acquaintances. It is a reliable reference label and if I am the only Bruce in our circle then it serves to uniquely identify me. I might be a complex person (and I indeed I think all people are complex). Thus a simple name serves to identify a complex system; for persons are assuredly complex systems.

    What I call “capitalism” is a complex system and there are varying examples of it admixtured together with other complex systems, like democratic systems. If I was unduly tall (I am not) I might be nicknamed “Stretch” by many who know me. This again could serve to conventionally and uniquely identify me in my circle. But it would also now be a name making some reference to an empirical reality namely that “Bruce is tall”.

    “Capitalism” similarly refers to reality in that it refers to the importance of capital and of capitalists in the system. So far, we have the facts that capitalism is a convenient shorthand conventional name with some minimal reference to empirical aspects of the system or a set of somewhat related systems. Then we can add to those facts the further point that most economic debate (orthodox or hetrodox) recognises this convenient shorthanded and minimally empirically descriptive name.

    Thus I am led to wonder why you and Ernestine so object to it? I ask myself, what are you trying to deny that most other people accept? Do you have valid reasons for this? What are they? Why do you have such a problem with a simple and very widely accepted name which is used by both defenders and critics?

    I ask what is your preferred name or how do you analyse major types, not just variants, of economic systems such as feudalism and capitalism without using standard and accepted names and without (for Ernestine) using “-ism” labels? I am very interested in your and Ernestine’s answers if you wish to give them.

  91. J-D
    January 11th, 2015 at 19:40 | #91

    @Ikonoclast

    What terms I would use would depend on what discussion I was having, with whom, in what context, for what purpose, and on the basis of what prior common understanding. I would use the term ‘capitalism’ where it seemed likely that would assist communication and avoid it where it seemed more likely to hinder communication.

  92. Ikonoclast
    January 11th, 2015 at 21:19 | #92

    @J-D

    That is a non-answer. I think you are avoiding the issues. Now, you ask people series of fine-toothed questions at times. I presume you are, in equal intellectual honesty, willing to answer some.

    1. What do you call the current economic system of the USA?

    2. What do you call the current economic system of Australia?

    3. Where would the term ‘capitalism’ seem likely to you to assist communication?
    (Give an example.)

    4. Where would the term ‘capitalism’ seem likely to you to hinder communication?
    (Give an example.)

    5. What do you understand the term “capitalism” to mean?

    6. If you would prefer in some or all situations to use alternative term(s) to “capitalism” what
    term or terms do you prefer and why?

  93. Ernestine Gross
    January 11th, 2015 at 21:39 | #93

    @Tony Lynch

    “Ernestine, sorry if I wrongly thought I was agreeing with you.”

    What is the answer to your implied question regarding your thoughts?

  94. Ivor
    January 11th, 2015 at 23:20 | #94

    I suppose plantation owners would want to have everyone believe:

    Communication would be better without using words like slavery

    I suppose cigarette companies would want to have everyone believe:

    Communication would be better without using words like addiction

    Naturally capitalists want everyone to believe:

    Communication would be better without using words like capitalism .

    So it seems our capitalists even want to rewrite the English language to suit their politics.

    They debase their own culture and deny themselves the rigor they should be availing themselves of.

  95. J-D
    January 12th, 2015 at 07:36 | #95

    @Ikonoclast

    You are right that I often ask people fine-toothed questions, but have you noticed whether they answer them? How many fine-toothed questions have I asked you, and how many did you answer?

    1. I call the current economic system of the USA ‘the current economic system of the USA’.

    2. I call the current economic system of Australia ‘the current economic system of Australia’.

    3. The term ‘capitalism’ seems likely to assist communication in any case where the people involved in the discussion all have in mind the same definition of ‘capitalism’: I expect this would be true in a discussion group analysing the writings of Karl Marx, for example.

    4. The term ‘capitalism’ seems likely to hinder communication where the people involved in the discussion do not have a clear definition of the term ‘capitalism’ in mind: the discussion in this comment thread is probably an example.

    5. Like any other term, ‘capitalism’ means what people use it to mean. Sometimes when people use it I understand what they mean by it, but sometimes I don’t. I don’t know what you mean by ‘capitalism’; I don’t know what Ivor means by ‘capitalism’; I don’t know whether the two of you both mean the same thing by it.

    6. I use different terms in different situations, as my answers to questions 1 and 2 illustrate by example.

    Now, do you think if I asked you to define what you mean by ‘capitalism’ you would be able to answer? and what do you think my chances would be of getting a direct answer if I put the same question to Ivor?

  96. J-D
    January 12th, 2015 at 07:38 | #96

    @Ivor

    I like rigour and am happy to use the term ‘capitalism’ in any context where a rigorous definition of it has been agreed on.

  97. Ivor
    January 12th, 2015 at 08:09 | #97

    J-D :
    @Ivor
    I like rigour and am happy to use the term ‘capitalism’ in any context where a rigorous definition of it has been agreed on.

    This applies to those with the necessary skill. Not to people who say weird things such as:

    I call the current economic system of the USA ‘the current economic system of the USA’.

    or

    I call the current economic system of Australia ‘the current economic system of Australia’.

    You were asked:

    What do you understand the term “capitalism” to mean?

    The funny words you uploaded in response were laughable and not connected to the task in hand.

  98. Ivor
    January 12th, 2015 at 08:09 | #98

    J-D :
    @Ivor
    I like rigour and am happy to use the term ‘capitalism’ in any context where a rigorous definition of it has been agreed on.

    This applies to those with the necessary skill. Not to people who say weird things such as:

    I call the current economic system of the USA ‘the current economic system of the USA’.

    or

    I call the current economic system of Australia ‘the current economic system of Australia’.

    You were asked:

    What do you understand the term “capitalism” to mean?

    The funny words you uploaded in response were laughable and not connected to the task in hand.

  99. Tony Lynch
    January 12th, 2015 at 08:43 | #99

    Sorry, Ernestine. This time I don’t really know what you are saying. If its why I said I agreed with you, it was because I thought you were serious in thinking about serious things, as Is Ikonoclast and as I hoped I was.

  100. Ikonoclast
    January 12th, 2015 at 09:14 | #100

    @J-D

    I understand your position. You are not interested in discussing political economy seriously. That is your prerogative.

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