Back to basics

Written By: - Date published: 3:22 pm, September 22nd, 2008 - 55 comments
Categories: Deep stuff - Tags:

I’ve had some interesting conversations with people recently that have me thinking we need to get back to some political basics to build up to the practical policy questions of today, otherwise many of us are talking past each other. Here are three founding principles, which I hope to build from in an occasional series of posts. Hopefully, we can get consensus that these are correct:

People vary. Some people are shorter than others, some are luckier than most, some are smarter, some dumber. With most qualities, there are a few people at the extremes and most distributed around a norm. That goes for propensity to violence, honesty, initiative, just about anything. That fact that people vary means they will also act in varying ways in the same situation.

All humans have a right to live a life worth living. There may be exceptional circumstances when that is over-ridden by a greater good (eg during war) but, generally, that right applies regardless of wealth, class, gender, sexuality, ethnic group, or other characteristic. It is an acknowledgment of a universal humanity. To reject this to to argue that the powerful ought to do what they will with others; that, strength and will should triumph.

Capitalism is an economic system in which most capital is controlled by a small portion of individuals and most people sell their labour to live. Capital owners own the means to produce goods and services and those goods and services once produced. As all people need to consume good and services to live but most do not own capital in a capitalist system, most people must sell their labour to capitalists in return for a right to a share of goods and services (represented by money).

55 comments on “Back to basics ”

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  1. Santi 1
    22 September 2008 at 3:51 pm

    Regardless of its shortcomings capitalism is the best economic system.

    It’s also a clear winner over those two dreaded and failed systems of the past: socialism and communism.

  2. Carol 2
    22 September 2008 at 4:02 pm

    ermmm…. hasn’t capitalism just failed in the US, and been bailed out using some socialist strategies?

  3. r0b 3
    22 September 2008 at 4:03 pm

    Regardless of its shortcomings capitalism is the best economic system.

    There’s no such thing as a pure capitalist economy Santi. All economies these days are mixed, with aspects of capitalist and of socialist ideas.

  4. Rakaia George 4
    22 September 2008 at 4:04 pm

    Your right to “a life worth living” is directly proportional to the effort you are prepared to expend to achieve that end. If you sit on your arse and expect someone else to provide it for you, you have no right to expect anything.

    Capitalism and everything that goes with it (individual property rights etc. etc.) has been the driving force behind all human advancement. Without an individual’s ability to personally profit from their own effort (see above) we’d still be living in a feudal society where power was vested in those handy with a sword.

  5. Vanilla Eis 5
    22 September 2008 at 4:04 pm

    Santi: And your thoughts on the US Federal Government having to nationalise Freddie Mac and Fannie May? That would, technically, make them the owners of almost $5 Trillion in state housing.

    Just curious 😉

  6. BeShakey 6
    22 September 2008 at 4:05 pm

    Santi – I think the point of the post was to have these kinds of debates in a context of some basic shared understandings. Refusing to comment on what capitalism is, and instead jumping to the conclusion that capitalism is the best economic system simply undermines the idea behind the post.

  7. higherstandard 7
    22 September 2008 at 4:12 pm

    So the government as the largest employer of workers in NZ are capitalists ?

  8. r0b 8
    22 September 2008 at 4:13 pm

    Capitalism and everything that goes with it (individual property rights etc. etc.) has been the driving force behind all human advancement.

    Only someone with a very short term and very eurocentric view of human history could make such a silly claim.

  9. Rakaia George 9
    22 September 2008 at 4:18 pm

    Short term? Well I’d argue that capitalist principles were at play in Britain post Black Death when labour suddenly became a scarce resource.

    I’ll take the “Eurocentric” on the chin though.

  10. Steve Pierson 10
    22 September 2008 at 4:20 pm

    Santi. I’m not arguing the rights or wrongs of capitalism, I’m just giving a definition. Do you agree with it?

    HS. no, that’s why I wrote ‘individuals’, the State is us collectively.

    Rakaia George. Your view is those with the will and power should triumph… triumph of the will.. um. Also, capitalism hasn’t been around forever, but human advancement has been.

  11. Steve Pierson 11
    22 September 2008 at 4:23 pm

    Rakaia George. Don’t confuse the market with capitalism. The market is the trade of rights to goods and services according to supply and demand. Capitalism is the ownership of the means of production and the production itself by individuals.

    Capitalism didn’t exist during the Black Death but the market did.

  12. Billy 12
    22 September 2008 at 4:25 pm

    hasn’t capitalism just failed in the US

    No.

  13. Janet 13
    22 September 2008 at 4:27 pm

    Political basics: diversity, inclusion, equal rights and opportunity, social democracy. Belief in an essential humanity.

  14. Rakaia George 14
    22 September 2008 at 4:36 pm

    SP
    My view is that endeavour should be rewarded – without that we have no progress because there is no incentive. Point to any major step-change in human progress, and I’ll bet you can find that principle at the bottom of it.
    I would define capitalism as society fundamentally based on trading principles.

  15. leftrightout 15
    22 September 2008 at 4:39 pm

    Of course all the Capitalists at the top of the tower tell us how great capitalism is, after all its propelled them to the top.

    If you’re born into money life is great, you can afford to eat, get an education, you’re set for life. But get born into poverty then you’re pretty much fucked, its a struggle just to survive.

    Is it right that in this system if you cant afford to live you die?

  16. Rakaia George 16
    22 September 2008 at 4:42 pm

    After SP’s 4.23

    I’m not a political scientist (I’m a real one 😉 )but I don’t see how you can separate “the market” and “capitalism”.

    Just what do you define a post Black Death farmer able able to own his own land and profit from it, if not a capitalist? After all, he’s an individual who owns the means of production…

    [interesting point, I will change the wording of my definition because we wouldn’t consider a subsistance farmer a capitalist but that would fit with what I have – I’ll change ‘some individuals’ to ‘a small portion of individuals…, employ others labour to work their capital,… SP]

  17. Billy 17
    22 September 2008 at 4:49 pm

    But get born into poverty then you’re pretty much fucked, its a struggle just to survive.

    What shit. You mean “pretty much fucked” people “born into poverty” like Sir Robert Jones of Naenae, Graeme Hart of Mt Roskill and John Key of Burnside.

  18. Phil 18
    22 September 2008 at 4:54 pm

    After all, he’s an individual who owns the means of production…

    … and so was the butcher, the baker, and the candlestick maker.
    All of whom would have purchased materials, transformed then in some way, and sold a product to a (relatively) open market.

    Capitalists, all of them, and clearly part of the pre-industrial revolution ruling elite!

  19. ropata 19
    22 September 2008 at 4:55 pm

    The US system is capitalism for the middle class, but $$ trillions for grotesque corporate welfare on Wall St.

    Yesterday, $85 billion was given to AIG. In the past year, between bailouts and “injecting liquidity’ into the banks, the Fed has spent nearly a trillion of the public’s money. But unlike the citizens of Arlington, the public did not get to vote on this. The public treasury is raided, the public accounts driven further into the red. But no act of congress authorized this. The theft of public funds was performed mostly by the Federal Reserve Bank. Who are these gentlemen at the Federal Reserve Bank, and where do they get such power? And where do they get such money? A bridge to nowhere is beginning to look like a bargain, and if money is needed for schools or roads, the Congress bewails the growth of government. But money for wars and money for the rich always seems to be available, and debating the subject is regarded as unpatriotic.

  20. Steve Pierson 20
    22 September 2008 at 4:57 pm

    Billy. You’ve hit on the point of the ‘people vary’ point.. just because some people get ou of poverty doesn’t mean all can.

  21. Phil 21
    22 September 2008 at 4:57 pm

    If you’re born into money life is great, you can afford to eat, get an education, you’re set for life. But get born into poverty then you’re pretty much fucked, its a struggle just to survive

    Sorry, I wasn’t aware that we still lived in 18th century England.

    Apparently all of this meritorious EEO that we’ve had for the last few decades is just an illusion to keep the lower classes at bay…

  22. r0b 22
    22 September 2008 at 4:59 pm

    “You mean “pretty much fucked’ people “born into poverty’ like Sir Robert Jones of Naenae, Graeme Hart of Mt Roskill and John Key of Burnside.

    “Pretty much” allows for exceptions, and there are some. But not many. I’ve spent a bit of time in poor countries (one in particular). People born into poverty really are pretty much fcuked.

  23. IrishBill 23
    22 September 2008 at 5:00 pm

    Billy, firstly all of the people you are talking about were born into a society in which they ad access to decent housing, free education and a more egalitarian society. They were from lower middle class families. Not poverty.

    Putting aside that fact and pretending they were really from the bottom of the heap as some successful people are. The next point is are they exceptions and does their astounding success come at the expense of the other 99.99% of people? The answer to both of these questions is yes. In which case can they really be held up as examples of a fair and equitable system?

  24. r0b 24
    22 September 2008 at 5:00 pm

    PS – since I don’t have edit, in NZ you can be born into relative poverty, but not (hardly anyone) born into absolute poverty, certainly not the three examples Billy cites.

  25. travellerev 25
    22 September 2008 at 5:02 pm

    Billy,

    That would be a yes. A country with thousands of it’s middle class citizens foreclosed on and living in tents and the banksters creaming of what’s left is capitalism in its rawest and most dehumanising vorm. No jobs left because the scheisters outsourced everything because they could make more money with total disregard for the Americans they left jobless. Capitalism again in it’s rawest, ugliest form.

    In the simplest “market” version were people bring their produce to a market it’s about giving and taking and not the strongest takes all.

    I personally enjoyed Michael Parenti’s excellent lectures on the subject of Capitalism and the myth of underdevelopment I suggest you have a look too.

  26. IrishBill 26
    22 September 2008 at 5:02 pm

    I’d also point out that Stalin came from a peasant family as did Saddam Hussein. Clearly following your logic Billy these examples of success endorse Stalinism and Baathism respectively.

  27. Steve Pierson 27
    22 September 2008 at 5:03 pm

    Phil. we’ll get to how social intervention in the market via the State can help re-balance inequalities inherent in capitalism in a later post. But for now, I’m interested whether you disagree with the three foundation points I’ve laid out.

  28. r0b 28
    22 September 2008 at 5:03 pm

    SP: I will change the wording of my definition because

    It might be interesting to leave the original wording in place, and add new definitions in new text. How the definitions evolve might be an interesting aspect of the thread.

  29. Steve Pierson 29
    22 September 2008 at 5:06 pm

    Irish.. but they didn’t grow up in the systems they would later come to rule. Maybe Stalin is an endorsement of late feudalism and Saddam of tettering post-colonial monarchy.

  30. Billy 30
    22 September 2008 at 5:11 pm

    IB,

    I do not regard Stalin as a success. I’m a little surprised you do. I thought the fashion was to pretend that Social Democrats aren’t communists.

  31. insider 31
    22 September 2008 at 5:12 pm

    “Capitalism is an economic system in which most capital is controlled by a small portion of individuals…”

    Not sure if this is definionally true, or even true in practice particularly in a globalising world with pension funds and insurance schemes. It may once have been. I believe the divide between rich and others is decreasing overall – that’s why fewer of us have nannies and household staff – which implies to me that the rich have less relative power as the wealth of the wider populace increases.

    This of course presupposes that Eve is incorrect…

  32. Billy 32
    22 September 2008 at 5:16 pm

    Why am I in moderation? Has that humourless facsist Bryan Spondre conivinced everyone I am D4J?

  33. Steve Pierson 33
    22 September 2008 at 5:17 pm

    insider. if you look at stats on how many share holders there are or the distrubtion of wealth, it’s clear that a small portion own most of the capital.

    I agree that the long-term trend is downward a less stratfied society, with more capital being owned by more people – but the definition of capitalism still stands

  34. randal 34
    22 September 2008 at 5:23 pm

    the great arch capitualist Karl Popper did have one use. By his philosophy and logic any system that is justified by itself is circular and invalid. this includes both scientific communism and laizze faire capitalism. Even Marx asks in the communist manifesto “who brought these people forth from the soil” and the answer is industrial production under the laizze faire system. so we must recognise that humanity is bigger than these abstract systems and we must construct our own salvation else by using up all the earths resources we will die or at the least be decimated by our own hands. there is no doubt that capitalism gives its proponents a feeling of unbridled power but it is only the harnessed power of harnessed adventitious energy and false consciousness and for the socialists to claim that only communism can lead us out of the woods by the same method we got here is of equal folly. But myself I prefer a combination of both with the emphasis on that system that tries to guarantee as much for all rather than winner take all and to hell with the rest.

  35. higherstandard 35
    22 September 2008 at 5:25 pm

    SP

    I think you realise I was taking the p…

    It would be worthwhile everyone reading and reflecting on r0b’s comment about three into the thread before slagging off capitalism/socialism etc and looking to come up with examples to prove or disprove what works and doesn’t work.

    What is it about people that we’re all so quick to want to put people and countries into groups under nice little headings must be the something deeply embedded in our genes perhaps.

  36. randal 36
    22 September 2008 at 5:26 pm

    Billy one only goes into moderation if and only if one is immoderate. Blaming others is the first step on the slippery slope towards clinical paranoia so watch out. eeeek!

  37. higherstandard 37
    22 September 2008 at 5:28 pm

    Well put Randal.

  38. higherstandard 38
    22 September 2008 at 5:30 pm

    In relation to the 5.23 comment more so than the 5.26 but both are an enlightened position to take.

  39. r0b 39
    22 September 2008 at 5:30 pm

    I do not regard Stalin as a success.

    Why not? He was a disgusting human being of course, but by some criteria of “success” he was successful wasn’t he?

    I thought the fashion was to pretend that Social Democrats aren’t communists.

    Ahhh – we aren’t. Just like all Liberals aren’t Libertarians, and all Conservatives aren’t Fundamentalists.

  40. Steve Pierson 40
    22 September 2008 at 5:30 pm

    billy. dunno must have been a trigger word but i’m not sure what.. you know how these things are.

  41. r0b 41
    22 September 2008 at 5:34 pm

    Don’t worry Billy – I’m in moderation too (5:30pm), so the moderation trap is spreading the love…

  42. Steve Pierson 42
    22 September 2008 at 5:35 pm

    i didn’t include a definition of capitalism to make an argument for communism but because we live in a capitalist society (with moderation by state intervention,, which we’ll get to later)

  43. Steve Pierson 43
    22 September 2008 at 5:37 pm

    it must be social democrats or communists .. I wonder why, maybe that democrats for social credit guy who kept on threadjacking

  44. Billy 44
    22 September 2008 at 5:49 pm

    by some criteria of “success’ he was successful wasn’t he?

    Really? Successful at murdering millions, I s’pose.

  45. Carol 45
    22 September 2008 at 5:58 pm

    I’d like to alter or qualify my earlier statement. I think it is unfettered free market capitalism that has failed recently in the US. I agree with others who have said there’s more than one form of capitalism and more than one form of socialism, and that often countries have a mixture of both. It was one party “communist” states that failed at the end of the 20th century, not socialism itself.

    Generally, I’m reasonably happy with a mixed system: one that does the other things Steve mentioned initially (recognises diversity and the humanity in everyone), and doesn’t allow the growth of inequalities.

    Also there are forms of capitalism (as in some of the late 20thC Asian Tiger economies, that were capitalist, but not democratic and didn’t support notions of individualism. Some did have more of an idea of support for community over individualism. IMO, humans & their societies have a mix of collaborative and competitive individualistic tendencies. Western capitalism, especially the US variety, favours individualistic capitalism. IMO it’s more the mix of collaboration and competition that has stimulated human inventions and ingenuity, rather than capitalism.

  46. Steve Pierson 46
    22 September 2008 at 6:01 pm

    Billy. He was powerful and had a much higher standard of living during his later lfie than he was orn into. Certainly successful on a peronal level. He also died by fallin off a chair. Did his power and wealth come from doing good for others? No, quite the opposite, but is that a criterion applied (sorry, I know this is trite) to how a wealthy capitalist like Key got his wealth?

  47. Billy 47
    22 September 2008 at 6:05 pm

    Did you just compare Key to Stalin?

    I must start using “Helengrad” a little more.

  48. Billy 48
    22 September 2008 at 6:06 pm

    Moderation again. This splace is getting like policynet. Please do not post my IP address.

  49. Steve Pierson 49
    22 September 2008 at 6:13 pm

    sorry Billy, I don’t know what’s going on. but don’t worry, someone will usually get yo out pretty quickly.

    No, I didn’t compare Key to Stalin. If I were to Key would come off much better. The point is just that in terms of ‘success’ as we are often asked to measure people Stalin was a success.

    All of which is besdie the point of the post.

  50. Billy 50
    22 September 2008 at 6:16 pm

    “If I were to Key would come off much better.”

    That’s quite a concession from you, SP.

  51. Draco T Bastard 51
    22 September 2008 at 6:18 pm

    Billy:

    You mean “pretty much fucked’ people “born into poverty’ like Sir Robert Jones of Naenae, Graeme Hart of Mt Roskill and John Key of Burnside.

    All of whom grew up in a very socialist country with free education and credible support for the less well off allowing them access to better opportunities.

    I do not regard Stalin as a success.

    Interesting – why not?

  52. Draco T Bastard 52
    22 September 2008 at 6:18 pm

    Eeep, in moderation.

  53. Sam Vilain 53
    22 September 2008 at 6:27 pm

    SP, I think that your definition is wrong. You are stating a corollary and it is a most unhelpful starting point.

    Here’s a better one, from _Babylon and Beyond_, page 9;

    Capitalism is, essentially, a system where profits are made within a market-based context and reinvested in new capital equipment, that is, machines and IT used to produce more goods and services.

    I don’t believe the problem is at this level, instead I think that the problem is that the markets become skewed such that the “invisible hand” of the market is tied. ie, the preconditions that are required for laissez-fare (sp?) capitalism to work are what should be attacked, not the actual mechanism of how wealth is accounted.

    ie, Capitalism is morally justified on the supposition of the presence of intense competition of many companies, rather than a handful of enormous firms, a cartel, or a monopoly. Or if you allow those constructs, there will be another argument that justifies why the same effects are still present.

    So, how about starting with a definition that’s less of an observation, agreeable, and then we can show how those preconditions are false.

  54. randal 54
    22 September 2008 at 6:36 pm

    capitalism: definition…dominate for pleasure and extort for profit. if ya want any more than that then send me contract for the book!

  55. Phil 55
    23 September 2008 at 9:54 am

    From OP;

    With most qualities, there are a few people at the extremes and most distributed around a norm… …The fact that people vary means they will also act in varying ways in the same situation.

    These two statements run counter to each other, I think. Assuming that we have a ‘bell-shapped’ distribution of individuals attributes, it would be more accurate to qualify the second statement as: People vary. However, we can comfortably predict how most people will act, most of the time, given societal and attributable (is that a real word?) norms.

    This is the core foundation of micro-economics.

    All humans have a right to live a life worth living.
    I don’t think you would find many people disagreeing with that. Those that do probably own laboratories and harvest human organs from induced-coma clones.

    This sounds like the ‘safety net’ social welfare principle. But the devil is in the detail – what exactly is an acceptable minimum standard? Where does the line between safety-net and simple hand-out blur or end?

    Capitalism is an economic system in which most capital is controlled by a small portion of individuals and most people sell their labour to live.

    Broaden ‘capital’ in this statement to ‘wealth’ and you end up with an observational definition of every economic or political system that has ever existed in the ‘modern’ world.

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