Profit or Society?

I want to talk about the profit motive, because despite being the cornerstone of capitalism it is highly misunderstood. All sorts of proclamations about the profit motive's success as a social and economic model are published in the media daily. Other causes for social and economic conditions are often avoided, and where profit has a clear negative bias, it is generally de-emphasized.

The profit motive is a simple form of the incentive model. Incentives are conditions in a system which reward or punish different kinds of behavior. Profits refer to one subset of incentives: those which resolve in positive or negative changes to net worth. Needless to say, human incentives are more complicated than this, and strictly for-profit business models still need to account for more different changes which may not be clearly linked to positive or negative account balances. But the capitalist system tends toward this model of profit, and incentives processes are typically explained in this way as well.

Alex Tabarrok Doesn't Get It: Why Civil Society is a Victim of Capitalism and Statism

Why don't Americans think that they use government services?

In citing Yglesias, Bartlett and Rampell, Alex Tabarrok attempts a moralization about coercion - without seeing that his attack on the government is no different than an attack on capitalism. See the following:

"What Rampell et al. implicitly imagine is that the natural state is slavery and any departure from that state a government benefit. Thus, if the government taxes your saving for a college education less than your other savings, you should be grateful for how government has benefited you and your children.
And if the government doesn’t jail you today, you should be grateful for how government has granted you the benefit of liberty.
This is the attitude of a serf not an American."

Some of these are forgivable - I enjoy the Home Mortgage Interest Deduction, for instance, but I don't think of it as a social program, or rather, I wouldn't have thought to include that if I were asked the question. But by the time you get to Social Security, Unemployment and Medicare, it is shocking that people don't consider them government programs. At face value, one can only speculate that the preeminent narrative - that Tabarrok reinforces here - is successful in claiming that the market can solve problems where the state has been the only actor - since its usually unprofitable to provide services to those who cannot pay out of pocket for them. Implicitly, Tabarrok is creating a distinction between government and market forces - the latter as civil society - in an attempt to make the ignorance of government-mediation (and I use this term purely for his own benefit) of economic functions a "virtue" of our "lack of deference" to the government. But capitalism is just as prevalent in these structures, perhaps just as misrepresented, and certainly worse for civil society in creating disproportionate power relations.

Measuring Marxism: The Democratic Ideal

This post is part of a series attempting to quantify Marx's theory of socialism.

The preeminent question in Marxism is the creation of socialism: this is roughly reflected in the democratization of the means of production. Democracy and productive, Marxist-style socialism are not the same, though.

What distinguishes Marxian socialism is its ability to birth a new society founded on different relations of production. These relations center on the "socially aware" human being, which is forced into existence by the extreme economies of capital accumulation which are decreasingly able to hide the underlying relations of production from the exploited populations.

Indeed, this kind of society is predicated on a rather basic understanding of democratic principles. It stems from the recognition of accumulated economic power, the treatment of those powers as utilities (see Yves Smith: Why Do We Keep Indulging the Fiction that Banks are Private Enterprises?) and the application of the democratic ideal of equal representation in that model.

Measuring Marxism: The Centralization Myth

This post is part of a series attempting to quantify Marx's theory of Socialism.

Marxism is largely a method of accounting and interpreting the mechanisms of economic power. While political power is understood to play a role, it is largely considered subservient to the role of economic motion. In times of stagnation, wherein technological changes often do not correspond with expanding markets and economic power is uniquely centralized, contemporary nodes of power are entrenched, and their social relations tend to become apparent. In such times, the condition of civil society becomes increasingly apparent, with all its nuances and relations to these power structures. Gramsci notes of this phenomenon:

"when the state trembled, a sturdy structure of civil society was at once revealed. ... Hegel's conception belongs to a period in which the spreading development of the bourgeoisie could seem limitless, so that its ethicity of universality could be asserted: all mankind will be bourgeois. But, in reality, only the social group that poses the end of  the State and its own end as the target to be achieved can create an ethical state - i.e. one which tends to put an end to the internal divisions of the ruled, etc., and to create a technically and morally unitary social organism."¹

Measuring Marxism: Where Did We Go Wrong?

 In my previous series, I assessed one aspect of the moral vision in Marxism - its relationship to individualism. This time around I want to confront the so-called "failure" of Marxism, and how can we measure his vision of socialism. This post is part of a series attempting to quantify Marx's theory of socialism.

Comprehensive privatization in China. The bureaucratization that plagued the Soviet Union. Repressive policies in nearly all 'socialist' states. The dilution of democratic apparatuses in the same. The data seem conclusive: Marxism has failed. Either that, or our measurements are off.

In fact, these failures reveal a number of conditions which do more to support Marxism than anything else. The accurate measurement of the Marxist framework has very little to do with the propaganda efforts of the NATO / Soviet blocs, which often invoke the imagery of workers' power for their own political gain.

Furthermore, it is the self-proclaimed anti-communists themselves who long ago quantified the very measurements which prove just how right Marx was.

Individualism: The Basis of Socialism

This is part 3 of a 3-post series dealing with the Marxist concept of Socialism and Individualism.

Part 3: The Basis of Socialism


Socialism is on the one hand the transfer of the control over the means of production to the working class, in order to relieve this oppression. It is to overthrow the irrational, free-market state of political economy. But it serves a far more fundamental purpose for human society. As we have seen, socialism seeks to abolish the state of things wherein human labor is objectified. Human labor should, given the conditions of emancipation, serve the essential interests of the human being in the context of satisfied human needs. Erich Fromm:

"For Marx, socialism (or communism) is not flight or abstraction from, or loss of the objective world which men have created by the objectification of their faculties. It is not an impoverished return to unnatural, primitive simplicity. It is rather the first real emergence, the genuine actualization of man's nature as something real. Socialism, for Marx, is a society which permits the actualization of man's essence, bu overcoming his alienation. It is nothing less than creating the conditions for the truly free, rational, active and independent man; it is the fulfillment of the prophetic aim: the destruction of the idols."⁷

The socialization of the political economy is in keeping with the rejection of values, processes and constructs which do not meet the essential interests of a society of human beings. It is the judgement of capitalism, and all forms of organization, for the specific value in terms of rights and privileges it bestows on its members.

Individualism: The Freedom of Independence

This is part 2 of a 3-post series dealing with the Marxist concept of Socialism and Individualism.
 
Part 2: The Freedom of Independence


Human existence is a social phenomenon. The "individualist" ideal of capitalism seeks to privatize the sum of human relations in order to free the human being. Indeed, the many libertarian ideals seek to arrange society in such a way that "nobody steps on anybody else's toes." Property should exist as an extension of the individual. And the individuals, in turn, voluntarily exchange property.³

“The rate of privation between members of society is precisely the antithesis to the rate of independence or individualism.”

The facts, however, paint a different picture. The calculus of human "utility" posits that the disutility of uncomfortable jobs should incur greater pay - the opposite is true. Jobs with less autonomy, greater physical requirement, greater tolls on health and dirtier conditions tend to pay less. The social supply of labor, rather than the individual valuation of labor is the chief determinant of the value paid to workers. It is precisely this irrational construct which determines that an increase in the available productive forces of society, that is an increase in supply of labor, should instead decrease the value and incentive of a worker. What appears as an obvious supply-demand function is in the aggregate an irrational transfer of value to a minority - the capitalist who can pay his or her workers less, and yet has more supply (labor) available, and a larger potential market (laborers as consumers).^{3, 4}

Individualism: The Myth of Utopian Socialism

This is part 1 of a 3-post series dealing with the Marxist concept of Socialism and Individualism.

Part 1: The Myth of Utopian Socialism

Socialism: the penultimate state of equality. Everything shared, the power and interests of each individual so intertwined that the most minor discomfort will be done away with: Utopia. But Utopia is, by definition, an unattainable state of things: it means "no place." Nature itself precludes perfection.

But socialism isn't a utopia, either. The closest proximity it ever gets to Utopia is that socialism defines the conditions which allow for humans to strive for utopia. The daily struggle to subsist, wherein basic human need resolves itself into conflicts between individuals, stands in the the way of Utopia more than nature. But the triumph over the conditions which create these conflicts could allow humans to redirect their efforts.

If the problem of hunger is restricted to our history, we can then seek to resolve the intricate issues of human inter-personal relations. The state of the individual in need is a state of oppression, for the simple reason that it disallows the free actualization of the human being: in such a state, one is tied above all to the very struggle to exist before one can exist as a free person: