The CIS and social democracy

Readers may be familiar with the concepts of “subtweeting” and “vaguebooking”, referring to social media posts which are clearly aimed at someone in particular who is, however, unnamed. (There’s nothing specifically “new media” in this – the Oz does it pretty regularly, for example.)

I’ve just had the reverse experience. An article in the Guardian by Eugenie Joseph of the Centre for Independent Studies starts out by linking to my piece on a (partially) socialist utopia, also in the Guardian. I assumed, reasonably enough I thought, that Joseph would offer some kind of critique of my piece.

Reading on, however, it became clear that far from offering a critique, she hadn’t even read it. That at least saves me from the trouble of writing a detailed response. I’ll just note a few of the weakest points, and leave it at that.

Most obviously, Joseph and the CIS want to have it both ways: when playing defence, she ascribes to capitalism all the good things that have occurred in the last 200 years, , even though social democratic governments and public institutions played a central role in many of them. But the rest of the time, the CIS interprets the term “capitalism” in terms of free markets and a minimal state. This kind of bait and switch has been christened, the Two-Step of Terrific Triviality by my Crooked Timber co-blogger John Holbo.

As an example, Joseph claims, that capitalism has given us “our mobile phones, the internet, vaccines, and antibiotics”. This is a quarter-truth. Capitalism can reasonably claim credit for mobile phones. But vaccines were around before capitalism, which has done a lousy job in supplying them because they are such low-profit items – who wants to sell a product that costs almost nothing and is only used once in a lifetime? The Internet was developed by the universities and the non-profit sector with seed funding from the US military. Its current messy state reflects the takeover by corporations like Google and Facebook, which have recreated the “walled gardens” of the Internet’s early competitors. Antibiotics were the other way around. Penicillin was first developed by publicly funded and non-profit researchers, then produced on an industrial scale by the War Production Board in the US.

After the obligatory swipe at Venezuela, Joseph cites only one example of successful capitalism – the Nordic countries, whose welfare states she mentions with approval. (When not addressing a mass audience, the CIS message is rather different “Mimicking European policies is the surest way to economic disaster.”)

Still, I’ll take agreement where I can find it. As Paul Krugman remarked in relation to my piece,

Quiggin’s scenario — it really is more of a super-Denmark than a true Utopia. But that’s kind of the point

So,   if Joseph and the CIS are happy to support an expanded welfare state, Scandinavian tax rates and a sharp cutback in the power and influence of the financial sector, I’m happy for them to keep on calling it “capitalism”.

24 thoughts on “The CIS and social democracy

  1. Brilliant stuff. I love Quiggin when he gets a tiny bit nonplussed, terse, even including when it is directed at yours truly.

    Mobile phones are a “gift”?

    Like mind-numbing media, disinformation by the dumpster load many pharmaceutical drugs and perpetual electronic surveillance that overrules the justice system and personal ethics?

    Talk about “how I came to love my cell”. She should read a book called Brave New world if she ever breaks out of the bubble she’s probably unconscious of.

    Or 1984 or Handmaids Tale and a few more dystopics besides.
    Gee, I’d love to live in a pink haze forever.

  2. Thanks for continuing to stand up in the media. There are many of us our here in the regions who appreciate your effort.
    I’m typing this on my ‘efficient’ free market apple product that is now outdated and useless even though it still functions.
    The free market efficiency is certainly not in the product and the service.
    The only efficiency is that of profit making.

  3. Even mobile phones…given the US Fed grants both Steve Jobs and Bill Gates got early on. Those grants were for PC development, and they weren’t the only developers, but one thing leads to another… What government funding did Motorola, Nokia, Bell Labs, etc receive? A bit, I’d wager.

  4. It will be David Ricardo’s anniversary on April 18th, He is the father of that form of capitalism that uses free trade to fuel economic growth. He died relatively young from an ear infection. .Despite being a very rich man he died at the age of forty-one. Antibiotics had yet to arrive under his form of capitalism.
    Capitalism also gave us two world wars. So any claimed benefits of capitalism should be set against the great loss of life caused in the trenches of WW1 and the air raids of WW2.

  5. Quick typo near the end “After the obligatory swipe at Venezuela, Joseph cites only one example of successful socialism [capitalism] – the Nordic countries,”

  6. John, this site https://apo.org.au/node/189166
    needs more of you and less of;

    “it is timely to highlight once again the proven record of capitalism in destroying poverty” 
    Eugenie Joseph
    Why we should defend capitalism
    Did Eugenie write the hook para on referring page?

    Currently 6 refs for you and 2 for her. The board of apo seems very socially aware.

    Eugenie, please inform us as to how capitalism is destroying poverty.

  7. @KT2: Eugenie will tell you that all the benefits of science and technology are actually the benefits of “capitalism”, whereas we know that they came mostly from publicly funded institutions.
    But, never mind. Contrary to what JQ seems to think, she did not agree that the Nordic countries are socialist in any way giving the lower business tax-rate of Denmark as an example. But we know that the total tax-take in those countries is way more than what it is in Australia, but again never mind.
    What is annoying is that these “think tanks” get government funding without any real scrutiny, while applicants for ARC grants have to go through a much more rigorous process of peer review, only to have their applications rejected by “the Minister”, who actually knows bugger-all about the topic.

  8. Capitalism CIS style – has never been tried. Perhaps the closest was in the late 19th century in the USA and it resulted in the US Govt stepping in to break up proliferating monopolies. In time, CIS Capitalism and its nutty outgrowth – Libertarianism – will be seen as archaic a philosophy as Mercantilism, or Feudalism. Only taught in Economic History units as failed economic systems that once held sway in certain parts of the world before their downfall.
    Socialism (or nearly) was very successful in the UK in WW2. When an existential crisis was threatening the country the realisation that “laissez faire” wouldn’t save the nation. Will the world work this out when dealing with global warming?

  9. i’m having a niggle here,
    nothing to do with the topic (no problem there)

    has any one actually read Utopia?

    Utopia would be a bastard of a place and the feller who wrote it, Henery8’s “man for all seasons” Moore had his very own chamber for torture (heretics,you know)

  10. Sorry, may- that comes out as gibber, and even if it wasn’t gibber most people would probably see it that way.

    Was I reading somewhere ( after the last month!! ), Labor is going to SUPPORTAdani?

    They couldn’t be THAT gutless.

    Nobody could be that gutless.

    Not even Labor?.

  11. Thanks May. No I haven’t read it.
    Catchy title:  Fruteful and Pleasaunt Worke of the Beste State of a Publyque weale, and of the newe yle called Vtopia. 

    And I found this [news?] tidbit.
    “The alleged amorality of England’s priests is compared to that of the more highly principled behaviour of the fictional priests in More’s Utopia, when a character observes wryly that “every second person born in England is fathered by a priest.”
    https://en.wikipedia.org/wiki/Utopia_(book)

    We are not very good at common knowledge are or understanding? Where is Lizzy and why doesn’t she comment here! Or become a news publisher.

    ” And since only Lizzi knows the state of the world, neither can use information regarding the state of the world to improve their prospects for coordination.”
    https://plato.stanford.edu/entries/common-knowledge/#4

  12. Mobile telephony took off once the EU pushed the adoption of the GSM standard, creating a mass market for Nokia. The linked SIM card specification was also top-down. The energy-efficient processors in mobile phones are based on designs by ARM, a spinoff from Acorn, an English company that got its start from a BBC specification for a cheap educational computer. It’s based in Cambridge, where the university still benefits from mediaeval endowments. Cue for scholastic argument over whether the wool trade in 1400 can be described as capitalist.

  13. I quite liked reading your article on utopia socialism in The Guardian, JQ. The first thing that came to my mind was …. and the mcmansions built during the late 20th and early 21st century will be partitioned into duplexes or flats, contributing quickly to more affordable housing in Sydney. (In my neighbourhood there is a ‘family’ home with a 36 square meters master bedroom not counting the walk-in wardrobe and the on-suite full bathroom. This area of at least 46 square meters could be ‘asset re-cycled’ as a one bedroom unit or a studio. The dimensions of this ‘family’ home are like that of a 4 x 2-bedroom block of generously sized units, with an entrance hall big enough to install an elevator for the elderly or others who can’t walk a flight of stairs.) The second thought that came to my mind was – aha there is another author who thinks a little like Pro Q … and then I realised. What I really liked about the article is that you put some images as to how life could be like to the word socialism in the future. So, instead of getting images of bigger houses, bigger and faster cars that drive slower and slower on congested roads, (insert the last week of TV ads for consumer goods to be consumed within a society) the reader is getting images of alternative modes of life within a society. Surely, extending the choice set is fundamental to elementary ideas of the benefits of a dynamic market. Following these thoughts leads me to the conclusion that Eugenie is contradicting herself (she does use the work market) for she doesn’t seem to agree with freedom of choice, the said benefit of a dynamic market.

    Eugenie also uses the term capitalism. In her article, the implicit concept of capitalism is that what we have is the best that is possible even if it is not perfect. What would be perfect for Eugenie? Perhaps a dynamic market system? Yes, there is this problem of an argument being self-referential – just like the Fama-Fisher-Jensen efficient market hypothesis.

  14. On the CIS website Eugenie Joseph also states that “as market economies continue to evolve, they become more energy-efficient and environmentally responsible. Capitalism has proven adaptive in finding solutions to human problems.”

    The inference being that humans are the problem that capitalism fixes.

    There are just so many examples of the problems generated by deregulated capitalism that it seems pointless to list them.

    https://www.cis.org.au/publications/policy-papers/why-we-should-defend-capitalism/

  15. @Glen “Quick typo near the end “After the obligatory swipe at Venezuela, Joseph cites only one example of successful socialism [capitalism] – the Nordic countries,”

    I often make mental typos, but in this case, the OP is correct. Joseph makes much of the point that the Scandinavian economies aren’t centrally planned, have markets and so on. She doesn’t mention more free-market versions of capitalism, most obviously the US.

  16. Indeed, we just read in the Guardian from George Monbiot that “capitalism” wants a no deal Brexit to rip up environmental protection measures…Thames turned into the Darling?

  17. If all the outcomes of capitalism were self-obviously wonderful, capitalism would need no defence. It would be its own best defence and advertisement. The need for simplistic apologias, of the style of Eugenie Joseph, is another sign that the advocates of capitalism are becoming worried. The cracks of the system are showing and they want to paper over these cracks with policy papers.

    People are again becoming critical of capitalism, especially Millennials it seems. Eugenie Joseph attributes this to ignorance. Millennials “do not understand it (capitalism)”. I would say they do understand their own lived experience in it. From their own lived experience of unemployment, underemployment, student debt, over-priced rents, housing unaffordability and the many scientifically dependable reports of unsustainability, ecological destruction and global warming, Millennials understand that capitalism is not sustainable socially or ecologically and their own futures are in serious jeopardy.

    When systems work well or even well enough, say perhaps our dwellings’ services or even our own physiology, we tend not to question or investigate. Sometimes we do not even notice when things are running well. Without investigative tests, noticing occurs when things start to go wrong. People are noticing that things are starting to go seriously wrong with capitalism, as a number of theorists predicted would happen.

    The CIS and like apologists for capitalism are cranking up for a last defence of the un-defendable. The system of capitalism will soon collapse under its own weight. Capitalism is predicated on endless growth. Endless material growth (in populations, infrastructures, resource usages and waste streams) is impossible on a finite planet. The theorists of socialism need to be ready to provide a new program for a sustainable society and a relatively steady-state economy in terms of raw quantities. Qualitative improvements can be much more open-ended.

  18. From the ‘I thought I’d seen everything’ files… some light bluegrass relief from Merle Hazard. Supurb name. Excellent production. Lyrics worthy of JQ. Maybe a collaboration?

    “Merle Hazard is America’s foremost country singer / economist.Watch videos of Merle’s songs, such as “Inflation or Deflation?” and “The Greek Debt Song,” here.” And How Long (Will Interest Rates Stay Low)? – my fave.

    http://www.youtube.com/user/MerleHazard

    And Dad jokes such as “why can’t you sell bonds in the desert? Because there’s no liquidity ” boom tish.

    I will send him some links and watch for “you genie, aren’t a greenie” and “water’s muddied, by the centre for dependent studies”
    Take it away Merle…

  19. JQ. As this article is anonymous and it is me posting, I’d fully understand if you remove it. Yet I believe it to be real. Like the r word, it needs sunshine.

    This quote prompted me to post it: “that capitalism is the least bad system devised so far”. Sounds like the op.

    One of the best systems modellers I knew went to work for mck. The work was the best puzzle book you could get, and money was big commensurate with power.

    “”MCKINSEY & COMPANY: CAPITAL’S WILLING EXECUTIONERS

    “… “Instead of being a force for good, I found myself party to the most damaging forces affecting the world: the resurgence of authoritarianism and the continued creep of markets into all parts of life.

    Your views of McKinsey’s impact on the world will be largely determined by your views on capitalism’s impact on the world, for few firms have made a greater impact on the prevailing economic system. If you believe, as I once did, that capitalism is the least bad system devised so far, that its worst excesses can be reined in through effective regulation, that it has been the largest engine for human progress in human history, then McKinsey is a Good Thing. As missionaries for capital, it has helped spread the Good Word far and wide, making the world more productive and efficient as a result.

    If, however, you believe that, whatever capitalism’s role in history, its continued practice poses an existential threat to governments, the biosphere, and poor people the world over, then the firm’s role is that of a co-conspirator to a crime in which we are all victims. McKinsey is capitalism distilled. It is global, mobile, flexible, and unabashedly pro-market and pro-management. The firm has an enormous stake in things continuing more or less as they are. Working for all sides, McKinsey’s only allegiance is to capital. As capital’s most effective messenger, McKinsey has done direct harm to the world in ways that, thanks to its lack of final decision-making power, are hard to measure and, thanks to its intense secrecy, are hard to know. The firm’s willingness to work with despotic governments and corrupt business empires is the logical conclusion of seeking profit at all costs. Its advocacy of the primacy of the market has made governments more like businesses and businesses more like vampires. By claiming that they solve the world’s hardest problems, McKinsey shrinks the solution space to only those that preserve the status quo. And it is through this claim that the firm attracts thousands of “the best and the brightest” away from careers that actually serve the public.
    “The firm does execution, not policy.” …””

    https://www.currentaffairs.org/2019/01/mckinsey-company-capitals-willing-executioners

  20. If I am a socialists then I am probably closer to the version that shares my name – Fabian socialism, that works within the rule of law and democratic processes. Which tends to reduce the scope of radical change – but I think, establishes it more effectively when it succeeds.

    The social democratic deal like the Nordic nation’s developed, arose within democracies and the rule of law. Most of the egregious examples of socialism were never democratic – and the rule of (independent) law was weak or non-existent. Few people in Nordic nations believe their governments are socialist but they also don’t put wealth and power above the rule of law – or promote them to the position of making the rules of law. I’m not convinced any of the non-democratic versions of what gets called socialism – established coups/revolutions violently taking over and opposition suppressed – can serve as genuine examples, any more than dictatorships that espouse free-market ideologies are real examples of capitalism.

    I think it is the legal systems – common and civil law, with independence of the judiciary – rather than the extent of government ownership or control or support of various economic activities that have been the greatest strength of nations like ours. The extraordinary successes of ‘capitalist’ enterprises have depended on them. I tend to see the opportunities that businesses take advantage of are in large part created by good government that did not stint on education or health or basic infrastructure or minimum wages – that these capitalist opportunities are not purely the result of entrepreneurship and capitalism, and so should not hog all the profits from taking advantage of them. Entrepreneurship and leadership are still highly rewarded within social democracies but many factors apart from those contribute to their economic success.

    I see an ongoing intergenerational subsidy to businesses from social programs – that they themselves will, without thinking, seek to avoid contributing to; giving captains of commerce and industry what they think they want in the short run will not produce the results they expect in the long run. So long as investing in the social good is inhibited by an unthinking belief that taxation and regulation or government provided services cost more than the reduced opportunities from their absence is questionable.

  21. If I am a socialists then I am probably closer to the version that shares my name – Fabian socialism, that works within the rule of law and democratic processes. Which tends to reduce the scope of radical change – but I think, establishes it more effectively when it succeeds.

    I second that, Ken Fabian.

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