Marx, the One-Dimensional Character

Normally I like the Christian Science Monitor as a unique fixture in the US, comparable to Al Jazeera. But sometimes it releases stories surprisingly soaked in Western chauvinism. This is one such example:

"Marx provided the intellectual foundation for an array of regimes that at one time governed nearly half of Earth's population.
These regimes were, for many, a long nightmare of state terror, genocides, deportations, extrajudicial executions, forced labor, and artificial scarcity, crimes that left tens of millions of people dead and deprived many more of basic dignity. 
But while Marx's solutions are widely and rightfully condemned, his analysis still resonates among workers and intellectuals alike around the world." -Karl Marx: 10 Great Quotes on his Birthday, Eoin O'Carroll

Of course, the article is incorrect when it says that Marx's suggestions are "rightly rejected" after insinuating that the fascist regimes using his namesake followed them. It's pretty simple to see that worker control wasn't even tried by the prevalent regimes in question, which was basically the only suggestion that Marx made. Furthermore, most of the quotes are clichés: vampiricism of capital, the opiate of the masses, and similar quotes that have been emphasized for their rhetorical value more than the value of their inherent analysis. Omitted are quotes like this:

Patent Trolling: Just Another Form of Capitalism

The dawn of the information age has ushered in a new form of value in intellectual property. Patents are based upon the innovative character of new kinds of tools, business models and processes with economic value. And like all economic functions, the patent occurs in, and helps to propagate, a specific social relationship of value.

Enter the "patent troll:" an irreverent term referring to those who deal in the purchase and defense of patent rights. Patent trolls purchase troves of patents, then litigate to turn a profit on their purchase. Sometimes, the patent merchants get a cut of the proceeds from litigation executed by their customers. All this is justified as defense of intellectual property and encouragement of innovation. But this is actually a simple form of capitalism.

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.

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.

Nothing is as Sure as U.S. Debt Payments

For all the hype about fiscal deficits, the numbers don't add up to any significant threat to the U.S. economy: The U.S. is highly unlikely to default on its debts, and debts are mostly held by private and public U.S. firms and individuals.

As Ludwig von Mises famously argued, if you print money (or create loans) you'll get inflation, and whoever gets the money first benefits from it most. But whom does inflation hurt? In a global economy, it is the relative debt/capital holdings that matter. These are called "net account balance" and "capital account balance." The U.S. far supersedes other nations in terms of net debt and net capital. What will expanded government purchases do to this dynamic? It depends on where those purchases go. If we look at the current data from the U.S. Treasury, we see that U.S. debt goes primarily to U.S. interests: 70.7 percent of U.S. debt is owed to U.S. firms or individuals.

If we decide to take Rep. Paul Ryan's advice, we will be reducing government purchases that expand net capital in the U.S. and net debt to entities in the U.S. If we follow these plans, the U.S.'s place in the global economy will contract: Capital will leave the nation.

In a nation with fiat currency, the government can simply create money. The trend in government borrowing is a testament to this fact; as Binyamin Appelbaum noted on "NewsHour": "Nothing is as sure in financial markets than that the United States government will repay its debts. And so the government gets the cheapest rates available."

(Originally at Richmond Times Dispatch: Letters to the Editor: Dean Sayers: Nothing is as Sure as U.S. Dept Payments)

Economic Liberals Admit it: Capitalists Own Us

"Don't tax the rich, as they create jobs," so the mantra goes. However, this line of thinking betrays the underlying structure of production: namely, that the capitalist class has executive control over the means of production - control which is a concern of public policy, as Cato and the Heritage Foundation admit by requesting policy that regards its standing. Despite that fact, policy proposals argue for diminished public input. Indeed, history shows us that such control has always underlined this graft:^1,2,3,4

• Today, the Capitalist creates jobs by allowing the working class to use the means of production and sell their labor to him.
• Before that, the Lord created jobs by allowing the working class to use the means of production and give part of their labor to him.
• Before that, the Slaver created jobs by having the working class use the means of production and he (and it was always a man - patriarchy and all that) provided basic subsistence to them.

It has always been the narrow control over the means of production that allowed the interests of a group of oligarchs to consistently stand as a barrier to the production process. Interestingly, when these power structures shifted, it was always by diminishing the returns that older systems could replicate. The oft-revered Mises agrees: it is by diminishing the surplus value on capital investment that the same is disincentivized.² Is calling for safer structures for capitalism simply another incarnation of the tactical perpetuation of power? And does this activity fit the theoretical model of consumer-driven capitalism?

Paving an Interstate on the Moral High Ground

Lev Lafayette reminded me of something easy to forget:

On one level such attitudes are the result of an apparent inability to consider life from the perspective of a person living in such countries. For decades these countries have been ruled by absolute monarchs, dictatorships, or regimes with only a pretence of democracy, all of which have engaged in gross violations of basic human rights. -Lev Lafayette, How beautiful is freedom / Isocracy.org

The same kind of alienation occurs throughout human activity every day. It variously manifests as the structural-procedural diminishing of general human interests to the end of efficiency, political maneuvering and one-sided interest-fulfillment, to things like the very structure of language meant to engineer - consciously or not - the refutation or dilution of interests competing with one's own.

May Day 2011: If They Tell You You Can't, Then You Can

Today, I got a chance to momentarily leave my armchair and rise up with my fellow discontents. May Day 2011 saw a motley crew of 300-500 core Richmond leftists hit the streets. There was much ado about the police this time around: namely, the police claimed that protection had to be purchased, and the organizers had to foot the bill. The ACLU even got involved, ineffectively. By the time the rally came about, it seemed like we were already fighting for a lost cause, despite how little the permit meant.

 "I couldn't help but wonder: would we have gotten better turnout if we had been campaigning for fly-fishing somehow?"

It was the same message, the same tactics, the same speakers. A few things were new, but they were scant in today's message. The open-source speaking program policy looks good on paper (and is probably the best way to keep from pissing people off when their pet group doesn't get 5 minutes). But just about everybody seemed ready to skip most of the speakers and hit the streets.

U.S. Defense Secretary Gates: Pro-Democracy Protests are Iranian Conspiracies

Well I guess it's pretty obvious that the stabler U.S. allies wouldn't have burgeoning democracy movements, but dangerous Islamism - bankrolled, of course, by the regional Islamic state that just happens to have nationalized key western interests:

""We already have evidence that the Iranians are trying to exploit the situation in Bahrain and we also have evidence that they're talking about what they can do to create problems elsewhere," Gates said.

"Saudi Arabia led a joint Gulf force that deployed there last month, enabling Bahraini authorities to quell protests calling for democratic reforms.

"On Sunday, foreign ministers from the Gulf Cooperation Council (GCC), of which Saudi Arabia is a leading member, accused Iran of interference in the affairs of Bahrain and Kuwait in a campaign to destabilise the region."AJE: US and Saudi Arabia discuss Iran 'meddling

Oh yes, you read that right: the U.S. is with S. Arabia in claiming that Iran is fomenting pro-democracy conflicts in the region (which makes sense because the "green revolution" protesters in Iran certainly couldn't be emboldened by these demonstrations). The Saudi Arabians have a good point though: unspecified Iranian meddling is certainly more of a cause for alarm than the Saudi-backed violent repression of a marginalized ethnic majority. Yep: Bahrain has an ethnio-nationalist oligarchy imposing unpopular rule over the ethnic majority; an unpopular rule that is being bankrolled by USAID and enforced by the engorged Saudi military when Bahrainians can't keep their ethnic underclass under control.

But don't worry folks, the real threat are those Iranians who had the audacity to demand that a local regime control (some) of their capital. The same Iranians who bankroll the resistance to another ethno-nationalist regime aligned with the west. Is it just me, or is this story getting old?

Herbert Hoover Left False Evidence to Hide Influence of J.P. Morgan, Thomas W. Lamont

According to Thomas Ferguson, Hoover wrote diary entries which directly conflicted with his private account of events:

"The onset of the Great Depression opened a new phase in the decay of the now creaking system of '96. As the Depression grew worse, demands for government action proliferated. But Hoover, who gradually became so in thrall to the big banks that he concealed Morgan's crucial role in initiating his famous European debt moratorium of June 1931 by deliberately faking entries in a "diary" that he left historians (one of whom years later cited it as evidence for the independence of Hoover, and the American state from the bankers), opposed deficit-financed expenditures and easy monetary policies.⁷⁹ After the British abandoned the gold standard in September 1931 and moved to establish a preferential trading bloc, the intransigence of Hoover and the financiers put the international economy onto a collision course with American domestic politics. Increasingly squeezed industrialists and farmers began clamoring for government help in the form of tariffs even higher than those in the recently passed Smoot-Hawley bill; they also called for legalized cartels and, ever more loudly, a devaluation of the dollar through a large increase in the money supply." Golden Rule: The Investment Theory of Party Competition Thomas Ferguson, pp. 145 (my emphasis)

Obama's Graft and the Woeful State of Consumer Arbitration

I've occasionally cited industrial investment in party politics as the primary motivator in party competition (a point I've largely refined from my reading of Thomas Ferguson: Golden Rule: The Investment Theory of Party Competition...). Yves Smith agrees - its donations that manage the presidential policy positions:

"Obama needs to raise an estimated $1 billion to win the 2012 election. He’s moved further and further to the right over the course of his Presidency. Why is he going to change gears and alienate one of his biggest donor groups by appointing Warren?"

Also, Yves points out to these startling statistics on the bias of consumer arbitration:

"An example we cited a few days ago, that of the settlement reached between the Minnesota attorney general and the National Arbitration Forum, illustrates this point. The [NAF] was so successful in stacking the deck on mandatory arbitrations in favor of its clients, big busineses, via the roster of arbitrators it chose that consumers won in only 4% of the cases." Yves Smith: Why Liberals Are Lame (Part 2)

Falsifiability, Popper, Marx and Mises

Hristos Verikukis has an illuminating paper revealing, among other things, that Karl Popper's criticism of Karl Marx's social theories is not only applicable to Marx's, but Popper's social theories, and the latter actually said just about as much in his body of works. Briefly touching on another thinker, Mises' 'Praxeology' appears to be just as vulnerable as Popper's Rationality Principle - as are those theories of Einstein, who Popper credited as "following real science."

Popper claimed that falsifiability was the foundation for the scientificity of any theory: if it cannot be falsified, it is thrown out; if it can be tested (and therefore potentially falsified), it is thrown out if such falsification succeeds. his particular criticism of Marxism was that this falsifiability was not present in the theoretical framework that Marxism comprised.