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.

4/17/20 Piketty “Capital & Ideology” p. 368

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.

4/17/20 Piketty “Capital & Ideology” p. 368

This analysis of state power and functions in terms of tax revenues is interesting, if, I think, oversimplified. To get a complete picture for all types of state, you’d also need to look at local taxes, and other forms of elite income, especially in states where the line between the wealth of the state and the personal wealth of the ruler(s) is not clear (as in feudal societies), as well as the types of bonds within the ruling class, e.g., dependence of kings on the goodwill of nobility and clergy (sources of men and money) for extended military campaigns in Plantagenet England.

This does not counter Piketty’s points, just meant to elaborate on the in certain cases.

Similarly some empires (Ottoman? Chinese?) may have relied on local rulers/strong men, supported by local taxes/tax equivalents, for a lot of “state” functionality, including “watchman” function. Of course, this was a potential source of rebellions (and new central dynasties).

Then, there were lots of times and places when the “watchman” function pretty much broke down, altogether – bandits, highwaymen, condottieri, bands of armed men terrorizing the populace – Medieval times, Renaissance Italy, the American frontiers (North and South America)…

The other thing he hasn’t talked about (at least, yet) is the connection between the overall national income level and the tax revenues available to the central state. The closer the national income is to the subsistence level, the less excess exists, part of which can be taxed away by the state. A very poor family may not be able to sustain a 10% annual tax, especially if already required to tithe to the church and labor part time in the lord’s fields. It takes a fairly prosperous family to sustain a tax of 30-40%, or more. (It helps if some of those other levies are eliminated, or at least made voluntary.)

His analysis (p 369 ff) of why Europe developed a strong states with tax powers (when other places didn’t) doesn’t seem particularly compelling to me. My sense is that the Ottoman Empire was weak enough that states tended, effectively, to develop within it. Why couldn’t they develop into strong, European-style states? Similarly, I don’t think Mughal domination in India was so strong at all times and places that local political formations and competition couldn’t have developed within it. Again, I don’t know, I’m just not convinced by his explanation.

4/12/20 Piketty “Capital & Ideology” c. p. 250

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.

4/12/20 Piketty “Capital & Ideology” c. p. 250

I think his “ternary” or “trifunctional” classification of societies is wrong, but not totally off, and the distinction with later “proprietarian” societies is valid. [See 4/4/20 for earlier thoughts.]

I think the target he’s aiming at is societies based on orders, that is traditionally defined, maybe divinely ordered classes of people, usually though not exclusively heritable, where the paradigmatic type of the class includes wealth (or lack thereof), status, functions (duties), and privileges. This may be more-or-less amenable to lumping into the three “estates” of the Ancien régime, certainly those divisions would have been seen as primary in Medieval Europe – but a society of the orders doesn’t end there. It also defines you as a yeoman farmer, a Roman provincial colon, a miller, a blacksmith or other artisan, a mariner, fisherman, or merchant. These roles may be 100% determined for you by inheritance, as per the edict of Diocletian, or they may be determined for you early in life, as in an urban Medieval guild apprenticeship, but once chosen, they are (at least theoretically) all-embracing, and determine all the important circumstances of your life.

Unlike the strict ternary model, the society of the orders model can maybe be pushed way, way back, even to hunter-gatherer societies, where fixed roles might be defined only by sex/gender (possibly with some “two-spirit” alternative), along with transitory roles defined by age cohort. (Of course, aristocracy is not impossible in early societies, and slaves may exist.)

In terms of “inequality regimes”, it seems to me this gives us three relevant ideologies:

1. Society of the orders: Inequality is justified by traditional roles (maybe divinely inspired), each with its duties and privileges.
2. Proprietarian society: Property is in principle available to all, and may increased by hard work. Property is sacrosanct: otherwise, there is no guaranteed reward for work, and society will fall apart. Property may be unequally distributed, but this is because some people work harder, or worked harder, than others, and, in any case, redistribution of property (other than by free contract) is a cure worse than the disease. Anybody who cannot get ahead by their work is lazy or incompetent, and therefore undeserving.
3. Social democratic: The aggregate wealth of society is the product of the labor of us all, and should be shared more-or-less equally between us. People who cannot work, for some reason, should be well-cared-for by reason of our common humanity. Material things (capital) is obviously necessary for production, but the legal fiction of private ownership of that capital contributes to production not in the slightest,  and should not be allowed to exist (let alone richly rewarded). No one should be paid handsomely just for already being rich; in fact, all the capital of society should be collectively owned (socialized), and decisions as to its use made socially and democratically by all.

[Note the “social democratic” model above doesn’t specifically tie to anything Piketty has said, up to this point in the book.]

This may be controversial, but it seems to me that the main difference between what I’ve called the “social democratic” model and early Leninist communism is the addition by Lenin of vanguardism: until the people are ready to assume their full, democratic role, they must be led by a vanguard or party that has already attained the correct consciousness.

I am not distinguishing between social democracy and democratic socialism.  I do not accept that the regulated capitalism in fact accepted by many social democrats as a compromise should be allowed to redefine the term. [Although Piketty, when he gets around to talking about it, uses the redefined term.]

4/6/20 Piketty “Capital & Ideology” p. 103

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.

4/6/20 Piketty “Capital & Ideology” p. 103

French revolutionaries, like 19th Century Radical Republicans, were unable to conceive two ideas that could have led to more egalitarian societies, in each case:

1. That centuries of exploitation – working the land for someone else’s benefit – might give people (peasant or freedman) a “property right” in the land greater than that of the titular owner who had been exploiting them, and,
2. The idea of cooperative ownership, i.e., of former plantations in the U.S.A., or things like mills (“banalités”) in the French case.

4/4/20 Piketty “Capital & Ideology” p. 52

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.

4/4/20 Piketty “Capital & Ideology” p. 52

Sometimes I think Piketty does not know how much of historian he is not.

I’ve been trying to project his tripartite model onto the classical, and, to a lesser extent, the ancient world.  Greece and (pre-Christian) Rome didn’t really have a priestly class. They didn’t really have a military class, either. The main categories were citizen, non-citizen free people, and slaves. In later Roman society, the military was professionalized, as was the (Christian) priesthood, but powerful landowners stood apart, not primarily military nor priestly (nor clerical, intellectual, or administrative). The military was not a socially privileged class in the way of the Medieval nobility, although it could provide a path, for some, to wealth and political power, even supreme civil power.

It seems to me the trifunctional society in Europe rose from the barbarian invasions. The ruling class was, perforce, military, since the conquerors consisted of a numerically small military elite. The clerical class they inherited by their adoption of Christianity, and the clerics were useful to the rulers because, (1) they believed their souls needed saving, and, (2) they needed scribes and clerks (and disdained to do that work, themselves, and, (3) because they needed some respectable class to absorb second, and especially third, fourth, etc. sons in a society committed to non-partible inheritance (although that wasn’t true in all parts of Europe, I guess.)

For the ancient (Mediterranean) world, I don’t know enough. Based on what I do know, the trifunctional society MAY have fit at least some cultures in the Middle East. Not sure about Minoan and Mycenean societies. It seems a stretch to apply it to Egypt.

May have fit China, Japan, Korea better, especially if the clerical class is understood to be a class of educated administrators, and not necessarily religious.  India, okay probably, although the caste system was more complex. [He actually has a much more thorough discussion of this, later in the book.]

I think it’s a stretch at best to try and fit this “trifunctional” model on the Muslim world, also. Maybe. Not sure.

I mean, I don’t know enough about all these societies, but based on what I do know, trying to divide their social arrangements into these three specific classes seems to do violence to the facts.

[See additional comments made on 4/12/20.]

Taxes

It is true, as I understand it, that the modest amount of progressivity left in the Federal tax code means that most income taxes are paid by people who are at least moderately well off. It is also true that Federal income taxes, proper, are only a part of the overall tax burden, and when you factor in other taxes (FICA, sales taxes, gas tax, state income tax, real estate taxes) the overall tax structure in this country becomes regressive (poorer people pay a higher percentage of their income in taxes, overall, than rich people, and MUCH lower than the super-rich. That is a reason activists often give in explaining why having rich people pay more in income taxes is fair.

But there's another reason I think is even more important. Wealth, ALL wealth, ultimately derives from profits - i.e., from something like a rent for the use of your property - and not from labor. This is true even if a high income is disguised as salary. NOBODY's labor is "worth" more than 200 times the median. Ultra-high CEO salaries come from their ability to control property (their own, and that of shareholders).

And profit is essentially a privatized tax - a tax that we pay on every good and most services that we consume, but that goes strictly to the benefit of a small class of individuals. (Small in percentage population terms; rather large in absolute numbers.) Profit represents the owning class blackmailing us by threatening to withhold the means of production, which would mean that we could not, with our labor, produce anything at all. And the more that wealth becomes concentrated, the stronger the stranglehold that property has on us, and the more they are able to squeeze out.

What progressive tax rates do, in a capitalist society that refuses to simply expropriate private owners, is to reclaim part of that private tax, for the public benefit. More progressive tax rates actually represent a LOWERING of the private tax that is capitalist profit.

And that is why progressive taxes are fair.

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.

Isocrates and us or “plus ça change, plus c'est la même chose”

 “When I was a boy, being rich was considered so secure and honorable that almost everyone pretended he owned more property than he actually did possess, because he wanted to enjoy the prestige it gave.  Now, on the other hand, one has to defend oneself against being rich as if it were the worst of crimes… for it has become far more dangerous to give the impression of being well-to-do than to commit open crime; criminals are let off altogether or given trivial punishments, but the rich are ruined utterly.  More men have been deprived of their property than have paid the penalty of their misdeeds.”

This was the Greek, Isocrates, writing I guess in the early 4^th Century BC.  The thing is, if de Ste. Croix is correct in his analysis in The Class Struggle in the Ancient Greek World,  Isocrates wrote these words during a time when, in fact, economic inequality was growing in much of the Greek world.  The demos was on the defensive; the oligarchic sector was (correctly) realizing that their interests were better served by supporting outside imperialists like Phillip II of Macedon (and his successors), who would permit them free reign to squeeze the local peasantry, as long as they eschewed outright political ambition beyond the local level, but would be very suspicious of the potential for a popular uprising by hoi polloi.  And, in fact, under, first, the Macedonian kings, and later the Romans, the last vestiges of democracy were stamped out, opening the world to more and more vicious exploitation of the poor and middling by the uber-rich, until finally the Emperors Diocletian and others basically enserfed the entire population below the economic and political elite.  Economic, and political, inequality in the late Roman Empire reached a level that we, in our still relatively open societies, can barely conceive.

The thing that bothers me about the Isocrates quote I opened with is that it seems so modern.  We again find ourselves subject to “poor me” complaints from the rich, fuming, for example, that they pay the lion’s share of income taxes (but taking as a natural right their claim to an even more disproportionate share of the fruits of economic production), and decrying the slender benefits allotted to the “undeserving” poor; calling for us to be tough on crime (while we imprison, in the U.S. more of our population than any other country in the world, and more black men than were slaves  before the Civil War), and for tax cuts for the “creators” of (mostly non-existent) Mac-jobs.  So, while financial markets soar post-depression, we cut unemployment benefits and food stamps in time for Christmas, and produce movies in which criticism of the excesses of the corrupt ruling class is so muted that members of that class can cheer at screenings, while critics on the left complain, in effect, that the director is praising with faint “damns”.

And I think:  It’s been 2400 years.  Why are we still fighting the same fight?

Occupy Wall Street

They re-occupied Wall Street, yesterday. The mainstream media seems to be largely blacking it out, and it's hard to tell exactly what is happening. The crowd in photos looks smaller than some Occupy internet sites have claimed. I suspect the forces of the City of New York, and possibly the Federal Government, will come down on them like a ton of bricks - certainly if they pitch tents, or seem to be assembling in too much strength. I suspect the near-certainty of this will keep a lot of prudent potential protesters away. Still, the mere fact that this is happening causes profound emotion to well up from my heart to my tearing eyes.

I love the Occupy movement with a surprising, deep intensity. It is the source of much frustration, true. But the sins of the Occupiers are those of naivete, mostly. Their strengths are hope, inclusion, solidarity, love, and pure heart. Compare this to a mainstream culture based on self-interest, greed, hypocrisy, and the exercise of naked power. Not much choice, is there?

I do not know how to go about building a better world. As U.S. and global political and economic centers grow stronger, more concentrated, and more adamantly resistant to change, I grow less and less certain that it is even possible. But I do know that whatever limited powers of intellect, knowledge, ability I may possess, I'd rather throw them on the side of love and hope than greed, aggression, and repression. I know which side I'm on.

My favorite Occupy chant expresses, I think, both the sometimes childlike innocence of the movement, and its enthusiasm and unlimited, but unselfish, ambition:

"Occupy Wall Street. Occupy Main Street.
Occupy EVERYWHERE and NEVER GIVE IT BACK."

 

That’s not the American Dream...

I’ve had people tell me that the so-called “American Dream” is about the idea, however false, that anybody can get rich.  Therefore, they argue, if your politics tries to clip the wings of the very rich, people feel you are choking off their dreams, and they won’t support you.

I won’t deny that there’s some truth to that, and if the issue of class fairness is presented the wrong way, you might get that reaction.  But I don’t think the American Dream is really about the ability to get filthy rich, and I think if you frame your arguments the right way, you can get around this obstacle.

Now, everybody has occasionally fantasized about what it would be like to be just stinking rich.  But I don’t think Americans feel that helping some people to get rich is a matter of justice.  I had to frame that sentence carefully.  If I had said “allowing some people to get rich”, a lot of people would think that was just.  To arbitrarily prevent some people from getting rich, “just because”, would be seen by many of us as simply mean.  But if you frame the question in terms of what others would have to give up for that person to become rich, then people hear a different story.

The American Dream is really about the idea that anybody, maybe even everybody, can do well.  It is about prosperity, not opulence.  You should be amply rewarded for a lifetime of honest work, and if you’re especially clever, or work especially hard, you should have a proportionate increase in your level of well-being.  That just strikes most of us as fair.  You should be secure in your enjoyment of these things.  You should do well enough that you can enjoy a few hobbies, and leisure time with your family.  When you’ve paid your dues for 40 years or so, you should be entitled to a comfortable retirement.  You should also have the right to feel confident that your children, and your children’s children will have the right and ability to enjoy the same comforts and opportunities that you have.  This is what the American Dream really means, to most of us.

What we need to get people to understand is that some people’s ability to become super rich, if it is realized, chokes off this dream of prosperity for the rest of us.  When 1%, 2%, even 10% of the people receive half of the total income produced by society every year, and lay claim to more than 70% of the total wealth, they do this by squeezing it out of our paychecks, out of our public or common goods (parks, roadways, schools), out of our healthcare, our retirement – lately, out of the equity that could have accumulated in our homes.
The vast wealth of the lucky few has been justified to us on the basis that they are somehow the engines of economic growth, that they are “job creators”, that their enormous wealth is somehow necessary for the rest of us to be prosperous.  We have now had nearly two generations of experience to prove that that is a lie; that policies to benefit the super rich not only don’t help the rest of us, but actually do us harm.

Since the mid-1970’s, when neoliberal talk of “job creators” and “trickle down economics” began to take hold, the richest 10% increased their share of national income from about 1/3, where it had held pretty steady since the early 1950’s (and which already meant they made between 4 & 5 times, on average, as much as the rest of us), to reach 50% about 2007.  Did this make the rest of us better off?  Total employment did grow a little, at the beginning of that period, before it crashed at the end of it, but it had been pretty stagnant for nearly a decade before the crash.  And how much of that “expansion” in jobs represented low wage, no benefits “Macjobs”, replacing the good “middle class” jobs that people had lost?  And our sense of security in a prosperous future for ourselves and our children has virtually disappeared. 

Trickle down economics does not, and never has worked.  Many, if not most, of the people who originally espoused it never really believed it would.  It was a convenient lie to justify their rampant looting of the economy.  It’s time we put an end to it.  We must put an end to it, if we are ever to reclaim the real American Dream.

“I have seen good working people, Throughout this mighty land. I’ve prayed we’ll get together, And together take a stand. “Then we’ll own those Banks of Marble, With no guard at any door. And we’ll share those vaults of silver That we all have sweated for.”