4/25/20 Piketty “Capital & Ideology” c. p. 511

This blog has been disused for a while. Hardly anybody ever read it, so I decided to hardly ever write for it. But now I’ve decided to use it, for a while at least,  to start posting comments on things I am reading, copied from my notebooks. These are not edited, and particularly not made to function as stand-alone essays. I.e., I have not tried to paraphrase the arguments from the books that I may be discussing. The first book I’m doing this with is Thomas Piketty’s “Capital and Ideology”. Page references are to the 2020, hardcover, English language edition, published by Belknap Press.

4/25/20 Piketty “Capital & Ideology” c. p. 511

Had these thoughts a couple of days ago, when I was reading this section, but didn’t write them down. Trying to reconstruct.

Piketty’s considerations of fairness re. the entrepreneur trying to start a small business seems to conflate a couple of questions – at least the mechanics of capitalization and questions of passion and ambition.

First it assumes a capital regime similar to ours, that businesses are financed out of private savings, also a wealth regime such that a person not born wealthy might accumulated a small capital by saving, sufficient to start a business. (How realistic is his example, BTW? Is even $50,000 enough to start a small business with a brick-and-mortar store and two employees? My guess is it would be iffy, at least without also securing a substantial line of credit.)

Imagine, instead, Schweickart’s model, where the capital would come from a public board. Then, P’s entrepreneur would pursue her dream by developing her powers of persuasion, including the ability to develop a well-documented business plan, instead of by working in solitude to amass a capital. Powers of persuasion would also serve her in good stead in finding sympatico coop partners. And persuasion is a skill that requires much more social values than accumulation.

If we do assume private capital, the unfairness in the initial injection of the resources of one to be subsequently shared by all could be addressed by making capital infusions, over and above some initial universal buy-in, perhaps, in the form of loans. The terms of the loan would be set at the making of the loan (by contract), and could not later abrogated unilaterally by one party (the collective) acting against the other party (the member/investor “entrepreneur”). Of course, this isn’t necessarily fair, either, if we consider questions of initial social distribution of assets and privilege.

The other issue that seems to be conflated in Piketty’s story is an attitudinal one. P’s entrepreneur has ambition – a dream. Her two potential coop partners just want a job. This is P’s character thinking like a boss. She wants to hire people to fulfill her dream using her money, and feels annoyed that a coop structure might give them too much power to influence the direction of that dream. Successful coop recruitment, I would think, requires a different mindset. You need to think more like an organizer than a boss. Persuasion, again. You need to seek people who are not just hungry for a job, but who are capable of being infected with your dream, and then you need to spread it to them.

A large coop may be able to tolerate a range of levels of commitment to the mission or vision. Also some members may be motivated less by the mission, per se, than by social solidarity (or friendship) with their comrades. Diversity of motives is probably a good thing. (Even better when most people have more than one.) But a small coop like P’s example needs a high level of shared purpose, I would think, to succeed. In this it is like any human enterprise that is not able, due to external forces, to be structured purely hierarchically.  But capitalism is based on hierarchical structures of capital over labor, bosses over employees, managers over line workers, and Piketty, for all his research and creative thinking, has trouble shaking this mindset.

[Alt language at end of note not incorporated: Conflates issues of capital and social structure of firm, and involves quite a lot of classical bourgeois background assumptions.]

7/2/20 This ended up being the last post in this sequence. I had intended to continue, but decided I did not like this raw dump approach. Then I was going to synthesize an over-all book review, but couldn't get that to go in a way that satisfied me, so I dropped that, too. Live moves on.

4/19/20 Piketty “Capital & Ideology” p. 410

This blog has been disused for a while. Hardly anybody ever read it, so I decided to hardly ever write for it. But now I’ve decided to use it, for a while at least,  to start posting comments on things I am reading, copied from my notebooks. These are not edited, and particularly not made to function as stand-alone essays. I.e., I have not tried to paraphrase the arguments from the books that I may be discussing. The first book I’m doing this with is Thomas Piketty’s “Capital and Ideology”. Page references are to the 2020, hardcover, English language edition, published by Belknap Press.

4/19/20 Piketty “Capital & Ideology” p. 410

I don’t think the far flung parts of the world had previously “ignored” each other. Extensive and important trade networks had always existed, effectively linking people from Scandinavia to the Far East, and large parts of at least Northern and Eastern Africa. The Americas were largely unknown in Europe, but Norsemen had already explored them, some, and attempted colonization. Also, there had been important military excursions west to east and east to west dating at least from the Bronze Age (Sea Peoples), or even before.  In the Middle Ages, the Crusades and the Mongols are obvious examples, not to mention the Moors in Spain and Sicily.

What changed in early modernity was the possibility of European domination, based on improvements in technology (including weaponry and transportation) and organization. Prior conflicts had been reduceable simply to force of man against man, similarly armed, organized, and equipped. Such struggles had never shown the West to have the superiority it liked to claim.

Entrepreneurial

Thomas Piketty, on page 572 of Capital in the 21st Century, worries that an excessive tax on capital income would “risk killing the motor of accumulation.”  He means entrepreneurship. 

So what if it did?  Profit-driven innovation is not innovation for human need.  It prefers idle whim, if  backed by cash, to the most urgent necessity without.  If inequality is extreme, this disfigurement of priorities is demonstrably exacerbated.  We have people watching TV on iPhones, while others go hungry and homeless.

I begin to suspect that the entrepreneur, as conventionally conceived, is as useless as the capitalist – and I am convinced that the capitalist, qua capitalist, has no social value whatsoever. 

If all capital were socialized, if all decisions about how to allocate material resources were made by some democratically accountable process – David Schweickart’s model of “Economic Democracy” shows one way this could be done* – if no one, ever again, would ever be paid just for already owning stuff, do we really think that all innovation, all creativity, all progress would stop?  And suppose it did, or even just slowed dramatically, couldn’t that just be because people no longer saw any need for it?  And wouldn’t that be a good thing?  It would mean people thought things were good enough, and no more change was necessary.

I don’t think that’s likely.  People are curious, creative, inventive – even just for the sake of those qualities, in themselves, but especially if they see need.  People like to do good work.  They like to be productive.  They like to help.  They like to make a difference.  If someone saw a need, and the need was real, in a truly democratic world, they would convince others to go along, and resources would be made available, both material and in the form of people’s time and creative energy.

Desire for personal wealth is one possible human motivation.  The theory of the invisible hand shows that, in some cases, this motive may suffice for a greater social good.  The theory does not prove that it will always so suffice, nor that it is the only motivation that can do so.  And the theory certainly does not show that greed is the motivator best-suited to curing humanity’s ills.

*David Schweickart explains the system he calls “Economic Democracy” in his books Against Capitalism, and After Capitalism.

Natural that it be paid

Thomas Piketty, on page 423 of Capital in the 21st Century, says, “If capital plays a useful role in the process of production, it is natural that it should be paid.”  Actually, I think it is not. 

When I read those words of Piketty, back in October of 2014, I wrote in my notebook, “It is only the separation of property ownership from labor characteristic of capitalism (but not unique to capitalism) that makes this seem reasonable.  If all the wealth in the world were evenly distributed (but still privately owned), and everybody labored, then I would expect to use my own property in my work.  I would expect my labor to bear return, more than enough to cover any of my property used up in the production process (otherwise I am falling behind).  But I would not naturally think of paying myself a rent on my own property.  I would not demand a return on my capital, per se.  It is only the fact that some have not enough property, while others have more than they need, that makes paying for the use of capital seem ‘natural’”.

Rereading those words, I have a couple of additional thoughts. One is that there is no reason to assume that property should be privately owned, rather than somehow held in common.   Then, also, I question whether I would necessarily expect my labor to at least replace the capital “used” in it.  Certainly, this would not necessarily be true if there were other, intangible, benefits to the labor.  The real point is, I would expect my labor to bear fruit in some fashion (otherwise, I would not labor).  And I would use whatever material goods I had access to in pursuit of my ends.  But the idea that “my” capital should be “paid” is not necessarily intuitive.  Consider also that, outside of capitalism, saved property does not generally multiply.  Food stockpiled may be a hedge against starvation (as long as the stockpiles survive vermin and decay), stockpiles of fuel or clothing may guard against the cold, etc.  But if I do not add to them, eventually my stockpiles will be used up.  “My” fruit trees may naturally replenish their fruit, with little labor on my part.  But most kinds of “stuff” do not naturally multiply on their own.  I see no reason that it should be “natural” to assume that they would.

If you leave cultural bias aside, there is nothing more natural in an ethic that people should profit from “their” property than in an ethic that those who have more than they need should share with those who do not.  People trained to “classical” (i.e., capitalist) economics may be tempted to assert that the former is enforced by the “invisible hand” of self-interest, whereas the latter necessarily requires collective action to counter “natural” selfishness.  That reaction unjustly deprecates people’s very real impulse to selfless, generous social behavior, which exists alongside their impulse to self-interested greed.  But besides this, it denies the massive cultural edifice we have erected to the protection of private property, starting with definitions of same, complex and controversial, which we have created so that people may know what is and is not “their” property, because people do not necessarily spontaneously see this the same way.  Then there is almost the entire body of contract law, most of the police and court systems, arguably even much or most of the military. 

The resources that go into regulating the “natural” relationship of people to each other’s private property are enormous!  There is no obvious reason why the social structures required to support an ethos of sharing would be more unwieldy than those we have erected to support an ethos of greed.  And they would probably generate a far, far better world.