Archive for the ‘Books’ Category

The case against government and civilization

April 19, 2014

Montani Semper Liberi: Mountaineers Always Free

==State Motto of West Virginia

James C. Scott, a political scientist and anthropologist, in his book, THE ART OF NOT BEING GOVERNED: An Anarchist History of Upland Southeast Asia, (2009) calls into question accepted ideas about government versus anarchy, civilization versus barbarism and the nature of progress. It is an account of a mountain region including parts of Burma, Thailand, Vietnam, Cambodia, Laos, plus northeast India and four provinces of southern China, which is home 100 million people.

Scott’s argument is that the tribal people of this region, which he calls Zomia, are not backward and not at an earlier stage of human development.  Rather they have made a rational choice not to be subject to government and to be free of despotism, serfdom, taxation, military conscription and slavery, which is what civilization has meant to most people for most of history.

scott.notgoverned.coverHe tied it in with a larger framework which is not the familiar story of the rise and spread of civilization, but an unfamiliar story of evasion and  escape from the spread of civilization.   The invention of agriculture made civilization possible.  I created a food surplus large enough to allow people to be employed full-time as overseers, priests and soldiers.  This was beneficial to rulers, but not necessarily to their subjects.  I recall reading that ancient remains of hunter-gatherers show them to have been bigger and healthier than those who worked the land.   The lives of laborers who built the Pyramids were more nasty, poor, brutish and short than the free nomads in the deserts beyond.

There always were people who fled to inaccessible mountains, forests (like Robin Hood), jungles, marshes and the open sea to be free of control — the Berbers in North Africa, the runaway Russian serfs who formed the Cossack nation, the runaway slaves who joined with natives to form the “maroon” communities of North and South America, even those white American pioneers like Daniel Boone who preferred life beyond the frontier of settlement.   But their story has been neglected, Scott wrote, because they left few artifacts and virtually no written records.   Upland southeast Asia is part of that story.

Civilization in China, as elsewhere, originated in fertile river valleys where there was enough of an agricultural surplus to support a government and an army, which gave rulers the means to bring more people under their control.  Scott said that the rulers of China, and their imitators in the small kingdoms to the southeast, were less interested in increasing the territory under their rule than in increasing the number of people under their rule.  Conquering generals were expected to bring back captives to increase the subject population.   The Great Wall of China and the Chinese border troops were more to keep their subjects in than to keep invaders out, according to Scott.

Southeast Asia was largely populated by people whose ancestors were pushed out of what’s now southern China by the expanding Han Chinese.   Some organized governments on Chinese and Indian models, based on royal courts and hierarchies of rank.   These centered in rice-growing areas.  The advantage, from the standpoint of governments, is that rice and other grain crops are easy to identify, hard to relocate and easy to confiscate.   Rulers wanted their subjects, in Scott’s phrase, to be “legible”.

The hill people of southeast Asia didn’t want to live like this.  They chose to live in mountain regions that were hard to get to.  Ethnic groups, according to Scott, were differentiated not so much by location on the map as by altitude.   They defined themselves by how much hardship they were willing to endure to make themselves inaccessible, versus how much they wanted to trade with or raid the more settled people below..

Zomians mainly engaged on foraging, or in slash-and-burn agriculture (swiddening), which involves cutting down the trees, burning the underbrush, planting a crop for one growing season and moving on.   They planted root crops, which were hard to spot and hard to seize.  New World crops such as the sweet potato quickly found their way to Zomia.   (The Irish took to the potato for the same reason.  Potatoes were hard for English landlords and tax-collectors to seize, and the potato mounds tripped up the Irish horsemen.)

The hill peoples had flexible and changeable social structures, much to the frustration of the valley kingdoms whose rulers never were completely sure who or what they were dealing with.   They often were multi-lingual  and multi-cultural, adopting different customs depending on whom they dealing with.   When invaders came, they tended to scatter and fade away, breaking up into smaller units.

Southeast Asia kingdoms had established religions, usually based on Theravada or Mahayana Buddhism.   The upland peoples followed individual shamans with fluid doctrines and, in times of crisis, often followed charismatic prophets who appeared seemingly from nowhere, but often were defectors from the civilized communities.

In his most debatable chapter, Scott argued that there was an advantage to being an oral culture rather than an illiterate culture, and that rejection of literacy may have been a choice rather than a pre-existing condition.

Written laws and histories are a means to give kingdoms a fixed identity and hold them together.   An oral tradition is easier to adapt and change.   This, of course, is contrary to the idea that people who lack a recorded history live in a culture that is timeless and unchanging.  I think of the Comanche Indians, who wandered the Great Plains on foot for centuries, but as soon as they encountered stray horses left by the Spanish conquistadors, transformed themselves into some of the fiercest and most effective mounted warriors the world has ever seen.

These are all generalities, but, as Scott noted, every upland culture was different.  Each had its own mix and match of traits from different cultures.   He made had a lot of specific things to say about the Hmong, the Karen and other peoples, most of which didn’t register on me.  I’m more interested in the overall picture.

The inhabitants of Zomia were not angels and their societies did not represent an anarchist idea of utopia.  Some had a trading relationship with neighboring civilized communities.  None of them were barbarian invaders like the Vikings, Mongols or Huns, but  some were thieves and bandits, and some have been slave traders.   The region includes the Golden Triangle, a central of the world opium trade.

However, the main objection to the upland peoples by the Chinese, by the southeast Asian kings, by the British and French colonial rulers and by the modern governments is the same — that they are hard to pin down and command.   The possibility of evading control of government becomes less every year, barring some civilization-destroying catastrophe, which Scott does not consider.

The main thoughts I took away from this book were:

1.  The desire for freedom – that is, the desire to live one’s life without taking orders from overseers – is not limited to American or European culture.  It is found in many different cultures, probably all or almost all of them.

2.  As the world’s cultures go, we Americans are not, as a whole, especially freedom-loving.  As somebody pointed out, we think of ourselves as heirs of Athenian democracy, but the way the USA is organized is more like the Persian Empire.   We accept much more supervision in our daily lives than not only our ancestors, but than much of world’s peoples through history.

3.  As an offset, we have the possibility, which has only emerged since the American and French revolutions, of creating governments that serve the welfare of their subjects, and are accountable to their subjects.   This is a new experiment in human history, not certain to succeed, but worth trying to make succeed.

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Piketty’s formula: its scope and limits

April 4, 2014

Source: Emmanuel Saez and Garbriel Zucman

http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdf

http://www.slate.com/blogs/moneybox/2014/04/02/wealth_inequality_is_it_worse_than_we_thought.html

The brilliant French economist Thomas Piketty has an economic formula which shows why, most of the time, the wealthy elite captures a larger and larger share of a nation’s income, and also why, some of the time, the rest of the nation catches up.

pikettybookcover00While my previous post about Piketty and his great book is long, I don’t really explain his formula and how it works.

His formula, which he calls the fundamental law of capitalism, is as follows:

The capital income ratio (a) equals the rate of return on capital (r) times the national wealth (beta*),

That is, if the national wealth – every form of property that can produce an income for its owner, which is what Piketty calls capital – is six times, or 600 percent, of the nation’s annual output, and the average rate of return on capital is 2 percent, then owners of capital will receive 12 percent of the nation’s income in that year.

If a nation’s annual income is static and the owners of capital reinvest some of their income, then capital will be a larger multiple of the national income the following year, and the owners of capital will receive a larger share of national income.  If a nation’s annual income is growing, but the return on investment is a higher percentage than the growth rate, the owners of capital will get a larger share of national income the following year.

Once this is explained, it seems obviously true – at least to me.   And it seems to be a problem – at to me.   The graph above, prepared by Emmanuel Saez of the University of California (Piketty’s long-term collaborator) and Gabriel Zucman of the London School of Economics, shows how unequally wealth is distributed in the USA.  More than 1/5th of U.S. wealth is owned by 1/1000th of the population.  It is easy to see how the normal working of Piketty’s formula could cause them to suck up more and more of the nation’s income.

Thomas Piketty

Thomas Piketty

What do you do about it?   Piketty proposed graduated taxes on income, inheritance and wealth itself, sufficient to bring return on investment down to the rate of economic growth. 

I don’t see anything wrong in principle with a wealth tax.   I pay a property tax on my house.  Why shouldn’t a billionaire pay taxes on his investment portfolio?    But this is going to take a long time to bring about, even if everybody agrees.  For one thing, it will require the elimination of all the tax havens where the super-rich hide their money, which will require international agreement.  For another, increasing the government’s revenue does not necessarily benefit the public – if taxes are used to finance aggressive war, for example.

There are other possible solutions, because there are other factors in the equation.  If strong economic growth can be restarted, if the economic growth rate exceeds the return on investment rate, that would solve the problem.   Strong labor unions and minimum wage laws would increase the income share of working people and the middle class.   There are many possible approaches.

In theory, the solution could be wider ownership of capital by the public, such as by ESOPs (employee stock ownership plans) or by pension funds.  Back in the 1970s, the management analyst Peter Drucker noticed that pension funds were acquiring a bigger and bigger share on the U.S. stock market.  Eventually, he predicted, this would accomplish the Marxist dream of worker ownership of the means of production!

This didn’t happen because the corporations that controlled the pension funds didn’t allow it to happen.  But if workers controlled their pension funds, it would be a different story.  This would not be a practical reality any time soon, or perhaps ever.  The point is that tax policy is not the only means to deal with hyper-concentration of wealth.

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Why the rich will probably get richer

April 2, 2014

CAPITAL IN THE TWENTY-FIRST CENTURY by Thomas Piketty (2013) translated by Arthur Goldhammer (2014)

Thomas Piketty of the University of Paris is the world’s foremost authority on income distribution and the super-rich. All the charts you see how income is being redistributed upward to the top 1 percent of income owners are based on work by him and his collaborators. In this new book, based on 20 years’ work, he concluded that it is not an aberration that ever-greater shares of income go to a tiny elite. Piketty said this is the natural working of a market system.

According to Piketty, the higher you go on the income scale, the larger the amount of income comes from investments rather than work. When the economic grows at a higher percentage rate than the average rate of return on investment, income becomes more widely distributed. When the average rate of return on investment is greater than the rate of economic growth, the owners of economic assets gain at the expense of everybody else.

His research is based on 200 years of data on income and wealth distribution in France, the UK, the USA and other countries, which now can be analyzed and processed with computer technology. His book would be a good supplement to David Graeber’s Debt: the First 5,000 Years, whichi is sketchy on precisely the past two centuries.

Piketty concluded that the average rate of economic growth since 1800 is about 1 percent a year for the countries he studied, and the average rate of return on investment is about 4 to 5 percent a year. Unless something happens to change one or the other figures, a wealthy elite will grow richer and richer at the expense of everyone else, until there is nothing left to invest in.

pikettybookcover00Piketty defines “capital” as anything you can own that will generate income. In the late 18th and early 19th centuries, capital (by his definition) consisted mainly of agricultural land and government bonds. Now it consists mainly of housing, industrial machinery and stocks and bonds of private corporations. Few economists would define “capital” in so broad a way, but if all you’re interested in is income distribution, it doesn’t matter what form “capital” takes.

If you read English and French novels set in the early 19th century, the characters consist mainly of members of what Piketty calls the “dominant” class, which are the 1 percent of the population who receive 30 to 60 times the average income, and the “well-to-do”, who consist of the next 9 percent. Characters in Balzac and Jane Austen seek wealth through inheritance, marriage and patronage of wealthier and more powerful people. Nobody in those novels thinks that wealth is acquired through hard work and superior talents. Piketty said there is nothing to prevent a reversion to this kind of world, although the difference between wealth and poverty wouldn’t be quite so extreme.

The reason the history of the 20th century was different, he wrote, is the great destruction of capital during the two world wars and the Great Depression. This cleared the deck for the great surge in prosperity of 1945-1975, which benefitted all segments of the population. Since then, according to Piketty, the growth in income has been sucked up by the dominant and well-to-do classes.

Now I don’t think that someone born in 1900 would have thought the prosperity of 1945-1975 justified the catastrophes of 1915-1945. This points to an important limitation of Piketty’s book. It is full of fascinating information, drawn from a wide variety of sources, ranging from centuries of income and property tax records to social history, economic theory, literature and financial

Thomas Piketty

Thomas Piketty

journalism. But when it comes right down to it, he deals with only one subject, the income share of the super-rich. He doesn’t have theories on how to eliminate poverty, promote economic growth, set priorities for public investment or any other important objective. This is not a criticism. It is just a description of what the book is and isn’t about.

His one subject – which is important – is the economic elite and how, short of violent revolution, to prevent from sucking up an undue share of society’s wealth and income. But as the experience of 1915-1945 shows, destroying the power of capital does not, in and of itself, make things better for everyone.

Piketty focuses on data from France and the UK because the United States is, in good and bad ways, exceptional compared to the rest of the world. During the past 200 years, the boundaries of France remained roughly the same and population grew from 30 million to 60 million. During the same period, the United States expanded from a narrow strip along the Atlantic to the Pacific coast, and its population grew from 5 million to 300 million.

Income distribution in the United States historically has been more equal than in Europe, he noted, at least for white men in the Northern states. The chief form of capital in the early United States was agricultural land, and this was very cheap compared to Europe. Early settlers and immigrants brought little wealth with them. What they created was the fruit of their labor. A great deal of the capital for building U.S. factories and railroads came from European investors. The great American hereditary fortunes did not emerge until the dawn of the 20th century.

The South was different from the North because the economic elite possessed enormous capital in the form of enslaved human beings. Piketty estimated that in the 1770-1810 period, the economic value of slaves in the South exceeded the value of all land, housing and other forms of wealth, and also exceeded the total wealth of the North. The result was a high concentration of wealth, and a large gap between rich and poor white people, which persists to this day.

Differences in earned income, while great in all countries, have seldom been as important as differences in income from wealth. The exception is the surge in corporate compensation in the United States and other English-speaking countries in the last generation. Piketty showed, by means of international comparisons, that the current size of executive compensation cannot be justified on the basis of merit or results. It is the result of executives being able to influence their own pay, and the lack of standards as to how much is enough.

The disturbing fact about investment income is that the more you have of it, the higher your rate of return. Piketty compared the returns on endowment funds of American universities, which are a public record, by size categories. The larger the fund category, the higher the percentage return, with Harvard by far outpacing all the rest.

This is because the larger the fund, the more the owner can afford to get expert investment advice, and the better able the owner is to invest small amounts in high risk, high return investments. Also, unlike an individual who has saved for retirement, the super-wealthy person or institution does not have to take out a significant percentage to live on.

The implication is that once you reach a certain level of wealth, your wealth becomes self-sustaining. A Bill Gates or a Steve Jobs can simply coast. He not longer needs the entrepreneurial drive that brought him success in the first place. Piketty’s analysis of the Forbes 400 list indicates that inherited wealth is at least as important as entrepreneurial wealth, and he thinks Forbes vastly underestimates income from passive investments because of lack of access to tax havens.

Piketty’s solution is a tax on capital – which, remember, is by his definition any form of income-producing property – sufficient to bring the average return on investments down to the expected rate of economic growth. He pointed out that some forms of wealth, such as real estate and buildings, already are taxed. In principle, taxing stock portfolios is no different.

Since the average rate of return is greater for greater wealth, his proposed tax would be graduated, with a zero or 0.1 percent rate for fortunes below 1 million euros and perhaps rising as high as 2 percent above 5 million. These don’t seem high, but they are high compared to expected rates of return. He also favors continuation of the graduated income tax and inheritance taxes. His purpose is not to prevent people from getting rich. It is to prevent the rich as a group from getting richer at a faster rate than the economy is growing.

The revenue from the wealth tax should be spent in reducing government debt, which Piketty sees as a transfer of income from taxpayers to wealthy holders of government bonds. It is better to tax the rich than borrow from them, he said.

Piketty’s proposals require much better information about wealth and income than we have now. The first step would be for the international community to require reporting of financial information from places such as Switzerland and the Cayman Islands that act as tax havens.

The 577-page book and the 76 pages of notes are crammed with information of interest even to those who don’t accept his basic argument. It is not written in technical language, which is part of the reason it is so long; Piketty, like the late Isaac Asimov, explains everything from the groun up.  If you don’t have time to read the whole book, his core argument can be found in the Introduction or Conclusion.  Or click on some of the links below.

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British exceptionalism: royalty and divine right

March 13, 2014

The United States was the first country of which I know that is organized on the basis of a social contract.  All political and legal authority stems from the U.S. Constitution, which was ordained and established by “we the people.”

The legal basis of authority in the United Kingdom are different.   Legal authority stems from the monarchy, based on the divine right of kings, and the powers that the monarch over the years has ceded to Parliament.  The UK has no written Constitution and no Bill of Rights, only royal charters and grants of privileges.

American patriotism is defined as the obligation to uphold, protect and defend the Constitution of the United States against all enemies, foreign and domestic.  British patriotism is true allegiance to Her Majesty Queen Elizabeth, her heirs and successors, according to law.

Does this matter?

I recently happened to come across an odd but interesting book, THE ENCHANTED GLASS: Britain and Its Monarchy by Tom Nairn, which says that it does.  Nairn argues that the British monarchy is not a mere anachronism, but the core of what gives Great Britain its particular social structure and its identity as a nation.

In the first part of the book, Nairn documented the intense interest and love the British people, especially working people and the lower middle class, have for the British royal family.  It is not quite like the reverence the Japanese have for their emperor or the Tibetans for their Dalai Lama, but it is more than mere celebrity-worship.  To the British, the royal family are simultaneously superior beings on a higher plane than they are, and also “just like us.”

What harm does this do?  As far as Nairn is concerned, a lot.  It creates a habit of deference to authority instead of the suspicion of unchecked power appropriate to a free people.  And it creates a habit of deferring to the upper classes, of regarding their manners and their speech patterns as the standards to be followed.

Nairn pointed out that the royal family was not always worshiped as it is now.  In the 17th century, the British be-headed King Charles I and replaced him with a short-lived republic. Later, in what was called the Glorious Revolution, they drove out King James II and invited the Dutch William of Orange to rule as a partner with Queen Mary.

The Glorious Revolution, according to Nairn, put in power a ruling elite that continues to these day — an alliance of landowners, bankers and merchants who have a talent for imperial rule, but not for managing an industrial economy (which didn’t exist in 1688).

The cult of the royal family was consciously built up by politicians and aristocrats as a bulwark  against popular sovereignty.  The British people came to not only revere the royal family, but to regard their upper-class lifestyle, manners and accents as marks of superiority.

It is not happenstance, Nairn said, that Britain was one of the last western European nations to adopt universal suffrage.  On the other hand, he wrote, the British monarchy is perfectly compatible with the rise of the Labor Party.  The existence of a party that represents the working class does not threaten the British class system.

If anything, the system was threatened much more by Margaret Thatcher’s Conservatives, who reduced everything to questions of money and gave the ruling elite a rationale for abandoning any sense of social responsibility.

As I read the book, I thought of how the British system as described by Nairn facilitates abuses of power — growing inequality, an out-of control financial elite hiding behind government, an out-of-control surveillance state hiding behind secrecy.  But then I thought about how our American system, based on a very different history and theory of government, is just as bad or maybe worse.   So I’m not sure to what degree Nairn’s claims of British exceptionalism are true.

We Americans, with our written constitution, our separation of powers and our creed that “all men are created equal,” ought to be able to better resist authoritarian government and the rule of a hereditary aristocracy of wealth.   We who believe in liberty and democracy at least have a standard to which we can appeal.  Whether this will mean anything in  practice remains to be seen.

An important positive aspect of allegiance to the royal family is that it is a form of unity not based on race or ethnicity.  The United Kingdom came into existence before the rise of nationalism based on common ancestry and language.

The royal family was the focus of loyalty for three nations, England, Scotland and Wales, and the ruling class of a colony, Ireland.  Later the royals became the focal point of the British Empire which, at its height, encompassed one quarter of humanity, from India to Nigeria, the Falklands and the Yukon.   Even today loyalty to the crown binds together a diverse people — which is a good thing, not a bad thing.

Without loyalty to their 16th century monarchy, the British would have no basis of unity or identity, just as we Americans would have no basis of unity or identity without our loyalty to our 18th century Constitution.   It is possible for nations to reinvent themselves.  The Germans did after World War Two.  But I am unable to imagine what new basis there could be for either British or American nationality.

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The Enchanted Mirror was first published in 1989, with new editions in 1994 and 2011.

Click on A Republican Monarchy? England and revolution for Nairn’s foreward to the 2011 edition.

James Scott and the Art of Not Being Governed

February 25, 2014

Some time ago I read and admired James C. Scott’s Two Cheers for Anarchism, in which he pointed out how nowadays most Europeans and Americans are overly ready to obey authority.

I also read Scott’s Seeing Like a State, which is about how the modern world has been shaped by the desire of rulers to make their subjects legible, so that they can be more easily taxed, conscripted and controlled, and the disasters that have followed from rulers’ illusion that information is the same as understanding.

I haven’t yet got around to reading his other great book, The Art of Not Being Governed, which is about 100 million people in the uplands of southeast Asia who have successfully escaped the control of governments in the region.  This video is a good preview.

As Scott pointed out, the ungoverned people he studied were not primitives who had failed to catch up with civilization.  Rather they were the descendents of people who centuries before had escaped the control of governments of China, Vietnam, Thailand and other countries.

He noted that only during the last few centuries has it been possible to even argue that there is a  net benefit to being under the jurisdiction of a government.  Prior to that you were better off being a free hunter-gatherer.  All government did was tax you, conscript you, enslave you and possibly provide some protection for other governments.

Steve Jobs was a real-life Ayn Rand hero

January 23, 2014

steve-jobs-book-covers

Steve Jobs comes as close as anyone I know to being an Ayn Rand hero in real life.  As depicted by Walter Isaacson in Steve Jobs, a semi-authorized biography, Jobs was utterly selfish and had no consideration of anyone or anything except his personal vision and obsessions.  At the same time he was a genius who created a great company and transformed the personal computer, digital animation, the telephone, photography and much else.

Many Occupy Wall Street protestors, who hated most of the “1 percent”, nevertheless mourned the death of Steve Jobs because, unlike crooked Wall Street financiers, he actually accomplished something.   Walter Isaacson wrote he was the most important American industrialist since Henry Ford and Thomas Edison.

I find it easy to mock those who, as Ann Richards, the former governor of Texas, once put it, were born on third base and thought they’d hit a triple.  A great many of our so-called meritocracy contribute little or nothing or mainly harmful things to society.  But it is more difficult to decide what I think a total egotist who accomplished great things.

This is nothing in Isaacson’s book to indicate that Steve Jobs ever read the works of Ayn Rand or gave a thought about her philosophy.  His intellectual interests, such as they were, were in Zen Buddhism, New Age teaching and rock and roll.

Buddhism contributed to his keen aesthetic sense, based on simplicity and elegance.  But he evidently did not take to heart the Buddhist teaching that the ego is an illusion and you should not make yourself unhappy if you don’t get your way.  Quite the contrary.

Steve Jobs’ great talent was in industrial design.   He brought art and technology together.  As has often been pointed out, all the basic features of the Macintosh computer – the mouse, clickable icons and so on – were developed at Xerox’s Palo Alto Research Laboratory, and hijacked by Jobs.  But it was Jobs, not Xerox management, who understood what to do with these concepts.  The Macintosh was historic.  Xerox’s own Star computer is forgotten.

As an artist, he was a perfectionist.  He made big changes at the last minute rather than allow a flawed (in his eyes) product go on the market.  I can easily imagine him, like Ayn Rand’s fictional architect Howard Roark, destroying something he created rather than let someone else spoil it.

He was not easy to work with.  He had no patience with the merely adequate.  He was quick to classify people as geniuses or bozos, based on hasty impressions.  But at the same time he respected people who stood up to him—provided they proved to be right.  He was a charismatic personality, famous for his “reality distortion field,” who was able to impose his ideas on other people almost in spite of themselves.  His insistence on getting his own way drove his people to achieve more than they ever thought they could.

stevejobs.reincarnationI use Apple products and I enjoy Pixar animation (which he did not create but fostered).  At the same time I am glad that I never met Steve Jobs, and I do not recommend him as a role model.  He treated those closest to him badly, including his loving and self-sacrificial foster parents, the mother of his first child and his loyal friend Steve Wozniak.  He cared little for anyone he did not regard as a fellow genius.  He did not practice nor believe in economic democracy.  When a visitor asked about working conditions in Apple factories, his reaction was anger and contempt.

I’m glad Steve Jobs lived.  I respect his achievement, and the passion that fueled his achievement.  I would not subtract anything from his wealth or honors.  At the same time I would not want to live in a society dominated by people like Steve Jobs or, worse still, people with Steve Jobs’ attitude toward life but not his talent.   The world benefits from obsessive hard-driving geniuses, but that does not mean that ordinary people, who do an honest day’s work for an honest day’s pay, count for nothing.

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For more, click on Steve Jobs: An Inspiration or a Cautionary Tale by Ben Austen for Wired.

Is there a path to economic democracy?

January 21, 2014

alpervitz.coverIf you, like me, think our present corporate capitalist system is not working, and if you, like me, thinks state socialism and central planned economies are proven failures, what is the alternative?

Economist Gar Alperovitz, in a flawed but thought-provoking new book, What Then Must We Do? says the answer is economic democracy – worker-owned businesses and cooperatives.  Unlike the giant for-profit corporation, the worker co-op would operate for the benefit of the employees instead absentee stockholders.  Unlike with nationalized industry under central planning, the worker-owners would be deciding for themselves and not trying to rule over other people.

I think so, too, and so do other people, whose books I’ve reviewed on this web log.  Alperovitz’s book represents an advance over David Graeber’s The Democracy Project in that he suggests some practical ways in which this ideal can be advanced.   Alperovitz’s blind spot, compared to Graeber, is his failure to see the magnitude of the opposition that would have to be overcome.

Alperovitz pointed out that there already are quite a number of worker-owned businesses and cooperatives.  In Cleveland, there’s a worker-owned Evergreen Cooperative Laundry, which is powered by solar panels bought from the worker-owned Evergreen Energy Solutions.  In Madison, Wisconsin, there is the worker-owned Isthmus Engineering and Manufacturing Co., which makes precision machines and robots.  He has a long list covering much of the country.

Local governments spend a lot of money subsidizing private businesses.   Instead of providing economic incentives to bring in a big box retail store, which is likely to put established retail merchants out of business, or a manufacturing plant, which is likely to relocated in 10 or 15 years in search of low wages and new economic incentives, why not help the worker-owned businesses in your own community?

Executives of big corporations (except for family-run companies such as Corning Inc. or Wegmans Food Markets) have no tie to any community or, indeed, to any country.  Workers, along with small-business owners, are the ones who are committed to living in a community and building it up.

Along with worker-owned businesses, there are credit unions, electric power co-operatives, businesses with employee stock ownership plans – all with more democratic forms of organization than corporations listed on the New York Stock Exchange.  There is something called a “B” corporation, whose charter says it is organized for public benefit rather than maximizing shareholder value.  All these provide something to build on and expand.  One simple reform, Alperovitz noted, is to allow owners of stock under ESOP plans to vote their own shares rather than giving their proxies to a trustee.

He advocated public banks, such as the Bank of North Dakota, as a way of serving local communities and providing a safe haven for depositors.  He said states such as Vermont. which is working on a single-payer, universal health insurance plan, could show the way for health care reform.  In the next financial crash, the federal government is likely to take over some failed corporations, as it did AIG and General Motors, and the next time around it should ask for reforms to make these companies serve workers and the community.

In time, over a period of decades, Alperovitz thinks that worker-owned and public enterprises could gain constituencies and crowd out the dysfunctional corporate system that we have down.  Such an approach offers more hope, he wrote, than supporting the declining labor movement or progressive political action.  In this I think he is naive.  The corporatist elite that have worked for decades to crush organized labor and thwart progressive politics is not going to stand idly by and let themselves be threatened by worker co-operatives.

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12 Years a Slave: the movie and the book

December 6, 2013

I have long understood the evils of slavery on an intellectual level – that is to say, I kind-of, sort-of, in-a-way understood them.  But seeing the movie, 12 Years a Slave, and reading the book has helped me to understand it in a deeper and more visceral way than I did before.

12 Years a Slave is the true story of Solomon Northrup, a free black man who lived in Saratoga, N.Y., who was kidnapped and sold into slavery, and who survived to tell the story of what happened to him.  The movie is true to the book.  Some details are left out, and some are changed in unimportant ways, but anybody who sees the movie will get the essence of the book.

The movie is a powerful evocation of the slave-holding South.  The movie helps me imagine, as much is possible for me to imagine, what it would be like to be ripped out of my everyday life, and suddenly thrown into a situation in which I had no rights and no identity, subject to people with the power to commit rape, torture and murder without any consequences.   The scenes of everyday slave life are as powerful as the scenes of whipping and abuse.

Northrup experienced the extremes of slavery.  His first owner was William Ford, a sincere Christian, who sought to treat slaves as humanely as possible without giving them freedom.  Under him, slavery was probably as endurable as it was anywhere in the South.  But Northrup spent 10 years of his servitude subject to the power of the half-insane sadist and sexual predator, Edwin Epps.

Epps’ chief victim was a young slave woman named Patsey, whom he used as a sex object, then allowed his jealous wife to abuse and have whipped.   It culminates in a scene that is almost too painful to watch.  Epps, to please his wife orders Northrup to whip Patsey half to death, and then takes the whip himself.

While the movie is true to the Northrup’s experience, Northrup’s book gives you insight into his mind.  He accurately describes not only what happened to him, but what he observed—the conditions of life, how the system worked, how sugar cane and cotton were grown.   He judged people, even white slave-owners, as individuals, and he never gave way to hatred of white people in general.  I don’t think I could have done that in his situation, even assuming I would have survived in the first place.

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American exceptionalism: Capitalism as freedom

November 25, 2013

One of the things that is exceptional about the United States is that, unlike people in all other countries I know about, we Americans associate capitalism with freedom.

That is not to say Americans are the only people who think that way—Margaret Thatcher in 1980s Britain and Ludwig Erhard in postwar West Germany were as strong believers in capitalism as any American ever was.  But the United States is the only country in which such beliefs go unchallenged.

market-revolution-in-america-liberty-ambition-eclipse-common-john-lauritz-larson-paperback-cover-artJohn Lauritz Larson’s THE MARKET REVOLUTION IN AMERICA: Liberty, Ambition and the Eclipse of the Common Good, which I read on the recommendation of my friend Craig Hanyan, attempts to explain why.

Most of the peoples of the world define capitalism as Karl Marx did—a system ruled by the holders of financial assets, in contrast to older systems ruled by landowning aristocrats and Oriental despots and a hoped-for future system ruled by workers.

Americans think of capitalism as Adam Smith’s “system of natural liberty,” in which each person is free to pursue their own interests in their own way, subject only to “the law of justice.”  I was brought up to believe in this and I still do, although my idea of the “law of justice” is broader than Adam Smith’s probably was.

Larson’s argument is that the United States between the Revolution and the Civil War was the world’s greatest example of Adam Smith’s ideas in practice.   The system of natural liberty didn’t apply to black people or to native Americans,  but white American citizens, especially those in the North, experienced a degree of freedom and rising prosperity that was a wonder of the world.

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The liberal Christianity of Marilynne Robinson

November 17, 2013

marilynne-robinson41

Marilynne Robinson is a novelist and essayist who teaches at the University of Iowa Writers’ Workshop.  I greatly admire her novel, Gilead, which won the 2004 Pulitzer Prize, and her two essay collections, The Death of Adam and When I Was a Child I Read Books.  She is a liberal Christian—uncompromisingly liberal and uncompromisingly Christian.

I never thought that anybody could persuade me to have a good opinion of John Calvin, but she did.  I could never accept the Calvinist doctrine that some people are predestined to Hell, because if there is an all-powerful, all-loving Heavenly Father, human beings would either have free will or be predestined to Heaven.

But Robinson did clear Calvin and the Puritans of the charge that they were success-worshipers, that they believed that the rich and fortunate were God’s elect.  John Calvin and the New England Puritans, like Jesus and the Hebrew prophets, condemned rich people who were indifferent to the poor, and preached loving charity as the most essential Christian virtue.  That is why, she wrote, the heirs of the Puritans were in the forefront of the abolition of slavery, women’s rights, humane treatment of the blind, the deaf and the insane or other humanitarian reforms.

The American Conservative magazine recently published an interview with Marilynne Robinson which I like.  Here are some highlights.

TAC:  You draw deeply upon Christian figures of the past in your work.  Are there any figures in contemporary Christendom whom you find particularly inspiring or admirable?

MR: Something I find regrettable in contemporary Christianity is the degree to which it has abandoned its own heritage, in thought and art and literature.   It was at the center of learning in the West for centuries—because it deserved to be.  Now there seems to be actual hostility on the part of many Christians to what, historically, was called Christian thought, as if the whole point were to get a few things right and then stand pat.

I believe very strongly that this world, these billions of companions on earth that we know are God’s images, are to be loved, not only in their sins, but especially in all that is wonderful about them.  And as God is God of the living, that means we ought to be open to the wonderful in all generations.  These are my reasons for writing about Christian figures of the past.

At present there is much praying on street corners.   There are many loud declarations of personal piety, which my reading of the Gospels forbids me to take at face value.  The media are drawn by noise, so it is difficult to get a sense of the actual state of things in American religious culture.

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