Evolution vs Capitalism

Evolution is mindless, economics is mindful,

collectively and individually. 

Did you ever know a rich person that didn't want to be more rich?

Said to Angelina

Zossima again

In science there is nothing but what is the object of sense. The spiritual world, the higher part of man’s being is rejected altogether, dismissed with a sort of triumph, even with hatred. The world has proclaimed the reign of freedom, especially of late, but what do we see in this freedom of theirs? Nothing but slavery and self‐destruction! For the world says: “You have desires and so satisfy them, for you have the same rights as the most rich and powerful. Don’t be afraid of satisfying them and even multiply your desires.” That is the modern doctrine of the world. In that they see freedom. And what follows from this right of multiplication of desires? In the rich, isolation and spiritual suicide; in the poor, envy and murder; for they have been given rights, but have not been shown the means of satisfying their wants. They maintain that the world is getting more and more united, more and more bound together in brotherly community, as it overcomes distance and sets thoughts flying through the air.

Fyodor Dostoevsky, The Brothers Karamazov

Labor is one of the processes by which A acquires property for B.

Ambrose Bierce

 

Keynes on Money

The main tenet of liberal socialism is that the state should cut the cord between money and time by taking over as much as three quarters of a country’s capital, bringing the frantic activities of saving and investment that plague capitalist societies under public ownership and control. In tandem with low interest rates and prohibitions on individuals’ and firms’ taking their money out of the country, the state’s management of savings and investment would achieve four goals. First, it would create full employment, which Keynes believed a capitalist economy could not bring about. Second, by funding investments in housing, transportation, and energy, the state would meet social needs that had long been neglected because greater profits were to be had elsewhere. Third, the state would end the scarcity of capital. Keynes thought that the possessor of capital was a social parasite, a “functionless investor” who was able to make money simply because only he had it to lend, much like a feudal landlord in possession of land. The capitalist also had “cumulative oppressive power,” issuing verdicts of life and death to workers and dictating policy to states. Because scarcity was the source of the capitalist’s parasitic power, ending that scarcity would lead to the “euthanasia of the rentier.”

Last, the worthiness of the state’s investments would not be measured by their rate of return but by their contribution to social well-being. Though Keynes imagined a variety of public goods that the state would bring about through its investments, the most important of those goods, for him, was the Smithian virtue of social intercourse:

Why should we not set aside, let us say, £50 millions a year for the next twenty years to add in every substantial city of the realm the dignity of an ancient university or a European capital to our local schools and their surroundings, to our local government and its offices, and above all perhaps, to provide a local centre of refreshment and entertainment with an ample theatre, a concert hall, a dance hall, a gallery, a British restaurant, canteens, cafés and so forth.

Keynes has long been accused of waging a war of economism against politics, elevating the economist above the statesman and thinking that the moral and political disagreements of a democratic society could be sidestepped or overcome by economic technicians and technocratic solutions.

... Keynes conceded that planning of the sort he was proposing “should take place in a community in which as many people as possible, both leaders and followers, wholly share [the planner’s] own moral position.” Yet he knew that his moral vision of an economy of cultural greatness and aesthetic excellence was not widely shared. ... Perhaps that’s why he found himself ... retreating to a position long familiar to philosopher-kings, calling for planners whose power could be safely exercised because they were “rightly orientated in their own minds and hearts to the moral issue” and because citizens had been reeducated according to the principles of “right moral thinking.”

... Keynes set out a second path for the future, one that he hoped would diminish the importance not just of money but of economic concerns altogether, without making any assumptions about what people believed or wanted from life. It was a vision of abundance and plenty, a world beyond scarcity, which made the hard power and hard choices of liberal socialism, as well as the requirement of democratic agreement about ultimate ends, unnecessary.

Corey Robin, The Trouble with Money (The New York Review, December 22, 2022)

If studying history mainly makes you feel happy and proud, you probably aren’t really studying history.

Quoted without attribution by Fara Dabhoiwala in the New York Review (July 1, 2021)

The market could only reward ideas that turned a profit. Nobody stood to profit from clean parks; they were just nicer to live with than dirty parks. But if nobody made the political judgment that clean parks were better, a society organized around profit incentives from production alone would almost automatically end up with dirty parks. The market was not an impartial guide to the beliefs of the public, and some of its verdicts were crazy…. When public goods fell into disorder or neglect, people found them unpleasant and satiated their desires with what the market had to offer…. The economic organization of society was devoted not to maximizing social comfort and harmony but to satisfying the consumer desires created by advertising and production itself. And that in turn was hampering society’s ability to grapple with poverty. 

Kenneth Galbraith, according to Zachary D.Carter in The Price of Peace

Keynes had come to believe that the problem was really much simpler: Unemployment was a breeding ground for fascism. It created dangerous political instability and a source of anger that could easily be weaponized. The terms of trade might help or hurt efforts to establish international goodwill, but tariffs or no tariffs, the legitimacy of an international economic order depended entirely on whether it did, in fact, provide for mutual prosperity.

Zachary D.Carter in The Price of Peace

According to Keynes

Uncertainty about the future—not irrationality or stupidity—makes crowds prone to calamity in both finance and politics, particularly under conditions of significant anxiety. Markets are no more self-correcting than a mob hailing a demagogue.

Zachary D.Carter in The Price of Peace

[Keynes argued that] money...was an inherently political tool. It was the state that determined what substance—gold, paper, whatever—actually counted as money—what “thing” people and the government would accept as valid payment. The state thus created money and had always regulated its value.... The very idea of capitalism required active state economic management—the regulation of money and debt.

Zachary D.Carter in The Price of Peace

Democracy or Globalization?

Global markets suffer from weak governance and are therefore prone to instability, inefficiency, and weak popular legitimacy…. If you want more and better markets, you have to have more (and better) governance.  Markets work best not where states are weakest, but where they are strong.... Even though it is possible to advance both democracy and globalization…this requires the creation of a global political community that is vastly more ambitious than anything we have seen to date or are likely to experience soon.  It would call for global rule making by democracy…. Democracies have the right to protect their social arrangements, and when this right clashes with the requirements of the global economy, it is the latter that should give way. 

Dani Rodrik, The Globalization Paradox: Democracy and the Future of the World Economy

THE MASS of men serve the State thus, not as men mainly, but as machines, with their bodies. They are the standing army, and the militia, gaolers, constables, posse comitatus, etc. In most cases there is no free exercise whatever of the judgment or of the moral sense; but they put themselves on a level with wood and earth and stones; and wooden men can perhaps be manufactured that will serve the purpose as well. Such command no more respect than men of straw or a lump of dirt. They have the same sort of worth only as horses and dogs. Yet such as these even are commonly esteemed good citizens.

Others—as most legislators, politicians, lawyers, ministers, and office-holders—serve the State chiefly with their heads; and, as they rarely make any moral distinctions, they are as likely to serve the devil, without intending it, as God.

A very few, as heroes, patriots, martyrs, reformers in the great sense, and men, serve the State with their consciences also, and so necessarily resist it for the most part; and they are commonly treated as enemies by it.

Henry David Thoreau, The Duty of Civil Disobedience

Life in the COVID-19 Age

The snare in which humanity has been caught is an economics—great industry and commerce in service to great markets, with ethical restraint and respect for the distinctiveness of cultures, including our own, having fallen away in eager deference to profitability....The prestige of what was until very lately the world economic order lingers on despite the fact that the system itself is now revealed as a tenuous set of arrangements that have been highly profitable for some people but gravely damaging to the world. 

Marilynne Robinson, What Kind of Country Do We Want? (NYRB)

“Debt, the private money that has fueled capitalism since its inception, is coded in law and ultimately relies on the state to back it up,” by way of the courts under normal circumstances and through bailouts if a debtor is too big to fail:  The history of debt finance can therefore be retold as a story about how claims to future pay have been coded in law to ensure their convertibility into state money on demand, without suffering serious loss…. By dressing private debt in the modules of the legal code of capital, it is possible to mask the liquidity risk for a while, but not forever. Whenever investors realize that, contrary to their expectations, they may not be able to convert their debt assets into cash, they head for the exit; and if many do so simultaneously, this will precipitate a financial crisis.

Adam Tooze (quoting Katharina Pistor), "How ‘Big Law’ Makes Big Money," NYRB Feb. 13, 2020

Exponential growth inside a finite system leads to collapse.

Richard Powers, The Overstory

...You have to remember that there are seven and a half billion people on earth and only about fifteen hundred or so of them are billionaires.  There's a kind of penumbra of rich people—another few hundred thousand—and a twilight zone of merely affluent people whose standard of living and location is basically the extent of their wealth, a kind of geopolitical fortune rather than a bankable one, and then basically everyone else is as poor as hell.

Nick Harkaway, Gnomon

I'm a fugitive from injustice
But I'm goin' to be free...

What About Me? Quicksilver Messenger Service

The populist wave coursing through the western world is only the visible part of a soft power emanating from the working classes that will force the elites to rejoin the real movement of society or else to disappear.


Christophe Guilluy, quoted by James McAuley in the New York Review (March 21, 2019)

“I explained that to May,” Verhofstadt said. “I said, You have a problem, you try to solve it. We on the Continent are different. We need first a concept. If we have a concept, then we are going to try and put every problem that we have inside that concept.”

“There are two kinds of European nations,” Kristian Jensen, the Danish Finance Minister, said last year, referring to Britain’s situation. “There are small nations and there are countries that have not yet realized they are small nations.”


EU folks talking to/about the UK on Brexit (in The New Yorker)

The nation’s labor market continues to bifurcate, separating the workers lucky enough to get the high-skill jobs our economy has newly created (and get paid accordingly) from those stuck with jobs for which automation has taken away the need for skills and that therefore pay very little.

Benjamin M. Friedman, New York Review (October 12, 2017)