‘The casual anti-Catholic bigotry one occasionally finds in Quillette is, I suppose, more an artifact of the liberal individualism that distinguishes most of its writers than a firm ideological stance.’ comment by RabbiMike.
That’s an interesting point which dovetails nicely into mine. New ideologies are like viruses which are harmful from inception- it is only through time that selection removes the more destructive ones and adapts the ones which are left to become mostly net neutral in the extent to which they are harmful to the host.
It is interesting that the ‘render unto Caesar’ line was so misunderstood yet so pivotal, it was one two factors which created the conditions for the Enlightenment- the first being the weakening of the ‘Divine Right’ of Kings through the necessities of English Common Law, the second the loss of the ability of the priestly class to rule on matters of objective truth. The misunderstanding, by the way, was the trick contained in the declaration- God has dominion over everything, including Caesar’s realm, even if he chooses not to exercise said dominion, because of free will.
Catholicism has become in many ways proof that an ideological meme can actually become beneficial over time- by voluntary relinquishing temporal power in the minds of its followers and allowing for the values of value pluralism and viewpoint diversity. In general, it is a force for good in the world adding to social cohesion and community health, with Northern Ireland proving through its economic and educational results that the healthy parental communities Catholicism encourages can take the poor and help them exceed their once wealthier contemporaries. It only has one remaining negative hurdle to overcome- declaring birth control a remittable sin, perhaps by utilising 1 Corinthians 13.
The irony of Socialism is that in order for it to become more benign it has to reread Marx in the context of understanding that the basic prophecies of Socialism didn’t come true. Marx was right about the end results of competition but he ignored the far stronger pull of powerful vain men to want to see themselves as a force for good in the world. This vanity was the thing which destroyed the British Empire without a shot being fired- Gandhi simply understood his opponent, the British, all too well.
But Marx does have a couple of things to teach us, after all. The first is that the urges of Socialism can be harnessed for the good- Sweden has perhaps understood this best- by abandoning their resentment towards Capital, and removing the urge to punish or erode it through inheritance tax (which obtains a maximum of 0.6% of all government revenue in examples like Belgium), Sweden actually increased the amount of tax it can extract voluntarily from capital. A while back, Sweden obtained 2.75% of its revenue from corporation tax, with the UK managing 1.8% and the US an anaemic 1.13%- and this is before one considers the far greater income derived from CGT in tax systems which don’t seek to erode capital. It turns out resentment and anti-capitalism is terminally bad for the revenue.
The second lesson of Marx is that an alignment between Big Government and Big Business is to be feared more than anything else. It is the thing most likely to make the prophecies of Marx most likely to come true. It is not by accident that finance happens to be the most powerful lobby, by far, in Washington or that finance is where we have seen the greatest amount of game-rigging through exploits (most importantly through an understanding of short and long-term debt cycles). This is not to say that finance is inherently bad, but it needs to be exposed to natural risks and weaned off the perverse incentives the ‘too big to fail’ mentality causes.
Government needs to get back to the core business of insuring fair rules to the game, without the perennial preference shown to large players and big donors. Unfortunately most State Interventionalism can fall prey to the tilt towards totalitarianism to which Socialism surrenders, and which Orwell suspected but wasn’t more thoroughly proved until later. Most governments need to grapple with the reality that government can’t really exceed 50% of the total wealth a society produces, with the optimal figure closer to 40%- if the faster relative decline of Europe’s share of global wealth produced is anything to go by- in the same period that America’s share shrunk from 39% to 33%, Europe’s shrunk from 33% to 17% or 18%.
Instead, government needs to learn to cannibalise waste in order to meet the non-market needs of the 21st century. Few who loathe the billionaire class actually realise that even if one confiscated all billionaire wealth in America it would only run American government for roughly six months. Where the Right goes wrong is in imagining that all government is bad- the National Weather Service can only work through international the co-operation which exists outside of competition and it does a fairly good job at helping citizens protect their private property rights through advance warning of pending disasters.
Historically, there are plenty of business partnerships which were comprised of liberals dreaming big and hard-working conservatives keeping them on task, instead of exploring new and exciting ideas- it was a partnership which paid off time and again in the world of business. I think this is because liberals are great at generating new ideas and terrible at vetting them, whereas natural conservative scepticism is great for filtering the great ideas from the terrible.
This is where Left-leaning liberals completely misunderstand the figure of Newt Gingrich. It wasn’t that he held any particular animus towards liberals, or wanted Republicans to start thinking of Democrats as the enemy- although there was a veneer of this at the surface level, because he didn’t like their ideas. No, it was simply that he understood that Washington dinner parties gave liberals the chance to polish their better ideas and discard the worse ones. He understood that conservatives had a better grasp of ordinary peoples hopes, beliefs and daily lives- because cosmopolitan liberalism is predicated on self-perceived higher social status, especially through education, and leads to an inherently minority worldview- and he didn’t want to give Democrats the chance to refine ideas which would have a broader appeal and help them win power.
I think the socialist urge- when construed as the urge to help- rather than mired in resentment towards capital, could be harnessed as a force for good, but it has a lot of growing up to do. First it needs to understand that the desire to help can become a tyranny of altruism when its use becomes debilitating, rather like a mother smothering a child with overprotectiveness. These harmful effects are worst when we examine the formation of intergenerational welfare dependence, or the way indiscriminate high density public housing became an amplifier for social ills.
What Maslow got wrong was in failing to realise that labour is a basic need even more important than food, water, warmth, rest, safety and security, especially for men. It’s absence is why we are seeing the rise of Deaths of Despair in America, just as much as it is the causative root of the fact that 50% of all violent crime in America occurs in 2% of districts, all of which have endemically low rates of employment. For many, drug dealing or shooting up into oblivion are preferable alternatives to sitting on a sofa with nothing to do.
The answer might be the type of Liberal Paternalism proposed by Richard Thaler, with gentle incentives thrown in to encourage good choices. In Sweden, the government refunds 30% of debt interest through tax refunds- it works just as well for mitigating student loans as it does in encouraging home ownership, reducing the burden to the taxpayer inherent to the rental sector and public housing. Of course, they should also probably move to a Graduate Contribution scheme for living expenditure debt, with actuarials establishing the thresholds for where repayment starts, depending upon the future prospects of the subject chosen- but I will leave that for another time.
“ The second lesson of Marx is that an alignment between Big Government and Big Business is to be feared more than anything else. ”
Yes. Monopolies come from regulatory capture, not from laissez faire capitalism. Most of the problems in the American economy come from cronyism and regulatory capture where a corporation and the regulators tasked with oversight of that industry get in bed together. This is why businesses like Facebook actually ask for more regulations in their industry. Better yet, they’ll help write those regulations.
“ Few who loathe the billionaire class actually realise that even if one confiscated all billionaire wealth in America it would only run American government for roughly six months. ”
Exactly.
“ Where the Right goes wrong is in imagining that all government is bad- the National Weather Service can only work through international the co-operation which exists outside of competition and it does a fairly good job at helping citizens protect their private property rights through advance warning of pending disasters.”
The few things government should do (and I think it should be very few as someone who voted Libertarian in the last election), it should do very well. Small government shouldn’t be ineffective. We should actually want a highly effective government that can accomplish a specific set of functions. I just believe that set should also be limited.
“ Historically, there are plenty of business partnerships which were comprised of liberals dreaming big and hard-working conservatives keeping them on task, instead of exploring new and exciting ideas- it was a partnership which paid off time and again in the world of business. I think this is because liberals are great at generating new ideas and terrible at vetting them, whereas natural conservative scepticism is great for filtering the great ideas from the terrible.”
This is actually a good idea for government agencies. It’s not original to me, but it would be great if in every executive agency meeting there was a libertarian/Ron-Swanson-figure to ask, “what if we did nothing?” Or “why should we do anything at all?” Not because the answer is always, “yes let’s do nothing,” but because it will force hard conversations about priorities and result in better solutions in the end. People make better decisions when forced to actually reason out why they are taking their actions.
I haven’t read Marx, except for the maybe parts of the Communist Manifesto. But I don’t exactly buy the idea that we’re in late-stage capitalism. If so, what will replace it? What comes next? As far as I can tell, late-stage capitalism is not that different from middle-stage capitalism. In fact, we might just call it capitalism. No qualifier.
The present always feels late until it becomes the past because we think we’re living in the future and we can’t imagine that the future could go on in much the same way that the past did. 2021 feels like a big number. But so did 1948. So did 1991. And so will 2053.
Great comment. 'But I don’t exactly buy the idea that we’re in late-stage capitalism.' I don't like the phrase either, but I do think that there is a case to be made that we have two distinct problems. The first is crony capitalism- large corporations working government to rig the game through regulatory cost barriers. The second is one of excess capital in the market. One money pumped into the economy by central banks and fractional reserve lending will eventually end up in the hands of capital and push share prices and building land values into the zone where they are no longer rational reflections of future value or scarcity costs.
Recently we had the bizarre scenario of governments outside of Germany being able to borrow at rates below zero interest. This in turn encourages governments to borrow at levels which may seem like a good deal in the moment, but makes collapse highly probable if interest rates ever rise again...
I would agree with that. Crony capitalism is a problem. But it’s not really new. And I definitely agree there’s too much money being pumped out by central banks that could cause inflation and other problems.
The one thing I’d push back on though is the housing. Housing shortages here in the US are far more the result of burdensome zoning and construction regulations, NIMBY laws and HOAs, and some regulatory capture, than they are the result of too much capital buying up all the real estate. In certain small markets, that may be true. I know that capital investments in land and real estate have increased. But as a percentage of housing and land purchases and ownership in the United States overall, it’s on the order of 2-3%. Not large enough to make a big difference.
Well the American market tends to be far more subject to localised high scarcity costs, whereas in the UK the path you are currently on has led to £1 million pound costs for an acre of building land in the South of England overall, with a less extortionate share being paid in the North (£300K per acre). In the South this means £200K costs per house before the foundations have even been laid, unless the houses being built are little more than rabbit hutches.
You are right about zoning and regulations, but the larger scale of entry into the market of firms like Black Rock is one of the first warning signs of a bifurcation in house building with one side of this business engaging in land banking (treating building land as a speculative asset guaranteed to rise in value, due to aggregated market economics). The other is the systemic underproduction of houses by you larger construction companies.
There’s definitely systematic underproduction going on. Some self-created scarcity. But in a freer market, competitors could come in and undercut that.
One big difference between the UK and US is available land. There’s still a ridiculous amount of undeveloped land in the US.
> the basic prophecies of Socialism didn’t come true.
Yet. I'm not a commie but from what I know of Marxist theory we are in exactly the late-stage capitalism that he predicted would precede the final collapse. 08' was a foretaste.
> and the US an anaemic 1.13%- ... It turns out resentment and anti-capitalism is terminally bad for the revenue.
They say that up until about the 80's in Canada corporations paid about half of all taxes and it was the time of greatest equality and greatest hope for the future. It is not resentment that causes me to say that 1.13% is very much too low, it is the fact that it is very much too low.
> even if one confiscated all billionaire wealth in America it would only run American government for roughly six mo
nths.
One hears memes like that. OTOH one also hears that the top 1% own more than the bottom 90% I can't help but be tempted by the thought that if we liquidated the top 1%, Lenin-wise, the wealth of the bottom 90% would double. Jeff is no doubt having fun with his rockets but the socialist in me wonders how many affordable dwellings might be built with the money.
The problem with liquidating the wealth of the 1% (or 0.1%) is that other than houses almost all of that wealth is held in productive assets. Extracting Elon Musk's money for example would mean breaking up Tesla and SpaceX. Basically, it would require breaking up companies, and getting rid of jobs in order to divvy up a few thousand dollars worth of wealth apiece. And doling out all that money would probably also entail price rises in many areas.
Of course, the government could also hold the companies in trust for the people- but do you really want government running your Amazon deliveries, or dipping into your pocket when they them all into loss-making industries?
> almost all of that wealth is held in productive assets
I don't doubt there's at least some truth in that. What I call real capitalism is obviously about productivity. But google 'mega yacht' and tell me if those things are productive assets or bling. Besides I use 'the 1%' as a stand-in for the parasites in general. As you know I admire Elon and probably wouldn't touch him even if I could. The robber barons of 150 years ago were also producers. Carnegie sold steel not credit default swaps. Morgan financed railways and bridges. Our disagreements are really quite minor and I think they're matters of degree not principal.
Not to be picky, but "productive asset" could be considered a matter of degree, where the yacht may be the social grease that gets other useful deals done, and even if non-productive in the sense of a lathe or photolithograph, provides the living for those who design, build, sell, and service the things--not to mention their crews, the caterers and other folks who make these things live "useful" lives.
"Marx was right about the end results of competition"
What was Marx's right take on competition? Is the notion that socialist nations won't themselves end up competing for natural resources and international trade? Sure, they get monopoly power within a nation (as if that were a good idea), but not across them. And good socialism would certainly have to be open to the idea of competition or it would stagnate rapidly, and if selected it home-grown products/services over better ones from other nations, it will fall behind.
"Government needs to get back to the core business of insuring fair rules to the game, without the perennial preference shown to large players and big donors. "
No government will do this. Politicians only exist to buy more voters, keep citizens comfortable enough to avoid revolutions, and repay donors. In socialism, this just occurs through state enterprises; in fascism, but making enterprises do the bidding of the state.
Even the US Constitution which tried to make this limited federal power clear couldn't hold off more than 100 years before politicians and courts realized they could just redefine (newspeak) the meaning and grasp all the power they can. I pay twice as much to the federal government as to my state/county/city, yet that's entirely the opposite of the clear intent of that Constitution. Turns out the law is whatever power says it is, just like it had been throughout history.
"Few who loathe the billionaire class actually realise that even if one confiscated all billionaire wealth in America it would only run American government for roughly six months."
And that wouldn't even make a dent in the debt, plus it would kill those businesses and cause massive job losses and block all future innovation and investment.
"the National Weather Service can only work through international the co-operation which exists outside of competition and it does a fairly good job at helping citizens protect their private property rights through advance warning of pending disasters."
Always funny how the smallest and least interesting government programs are the examples of what works in government. It's like when people point to water, sewage, roads, libraries and parks, things that don't really benefit from competition or would be hard to manage in practice. And yet many libraries are closing, roads/bridges are crumbling and we even had the Flint water crisis, California's water mismanagement giving big discounts on water to poorly managed agriculture, etc. And it's not even clear that competing weather forecasters wouldn't do a better job, like how we suffer the normal delays and high expenses for FDA/CDC drug testing/approvals/certifications.
"I think the socialist urge- when construed as the urge to help"
This used to be call charity when people voluntarily help groups that themselves have actual compassion and even competition on how best to help; and the rich have created great institutions using their wealth. Government does charity rather poorly, too, as demonstrated by public housing, rent control, inner city/rural public schools, medicaid, food stamps, affirmative action, etc.
But then my libertarian faith hasn't gotten me more than anger, dread and laughter at the government they force on us. People grumble about systemic racism, never-ending wars, mass incarceration, poor immigration/border security, failing schools, government housing, crazy tax laws, too big to fail, massive and absolutely normal deficits, questionable elections, failure to tax negative externalities, silly drug laws, etc.... and then say what government should do instead.
'What was Marx's right take on competition?' He was right that in the purest sense, that competition is the primary constraint of the market, with survival the stakes- and if these were the only goals of market players then his prophecies would have come true. If competition were our sole obsession innovation would be far less and capitalists would be forced to cannibalise worker pay in order to compete.
But where he was wrong was in underestimating humans, given such constraints we rebelled, but it wasn't the workers rebellion which was interesting, but the rebellion of capitalists themselves. Deep in every man is the desire to create something of lasting value, which offers a form of limited immortality and this vanity powered virtually every stage of the industrial revolution.
None of those risks were rational. None were safe risks on paper, or made any kind of sense from an investment point of view. Henry Ford's prediction that workers would be able to afford the Model T was just as crazy and improbable, as the vision of Jeff Bezos when he predicted that whoever held a monopoly on the exponentially growing potential for online information would be able to intuit people's buying choices.
People have the hunter's urge for opportunity. They are able to recognise genius when they see it, even if they don't understand. And they have the gamblers urge to prove the safe money wrong when they take a punt on some improbable scheme which doesn't look good on paper. Should Peter Thiel have backed PayPal- probably not- such payment schemes had been tried before and never gained mass appeal, just like Amazon or any number of other new markets and ideas- on paper none of it made any sense whatsoever.
What Marx got wrong was the unconquerable nature of the human spirit and our obsessive desire to make the long shot pay off. Plus, capitalists get a bad rep from the imitators who manage to get their hands on money. Yes, capitalists can be callous when necessary and they are not known for volunteering pay raises unless they have to, but given the choice they will always make the optimal choice for their workers from within narrow band of what competition allows and they can be quite loyal to talent and loyalty when the situation arises.
Although I was by no means a capitalist myself I did encourage several workers to pursue their talents with computers- I imagined that there would always be a space for small PC builds and repairs, for the simple reason that individual needs are best met by those who can supply them on a tailored basis- several now work for themselves on considerably more money than they were earning before.
But Marx, like so many since, would have been right if people were rational and had the sense to stick to the safe and sensible bet.
'Is the notion that socialist nations won't themselves end up competing for natural resources and international trade?' That's why I differentiated between the urge for socialism and the reality of socialism in government. Socialist government is doomed to fail, partly because of the top-down approach but also because it attracts a useless apparatchik who are more obsessed with doctrine and ideas than they are with practical realities.
But it can work on a smaller scale. Worker owner cooperatives are an example- the largest being Mondragon in Spain. The key is understanding the need to attract or grow a class of people as successful as the capital class at spotting opportunities. Mondragon's CEO and finance types earn about 8 times that of the average workers, generally come from their own community and are otherwise paid in the adulation of psychic profit. Perhaps a better word would be communitarian capitalism in which the State plays no part. I think it's similar to Adam Smiths observation that some especially esteemed public servants should be kept in the public sector because if they were privately paid they would be more expensive. Of course, they are a rarity in modern government, where most public servants imagine the rich should simply pay more, or there is some magical money tree.
I told a friend of mine who is a civil servant that socialism would get him a 6% pay rise once (the real rate of return on capital after tax, inflation and risk), but that he would have to stay on the same money forever, even as costs continued to rise. Of course, it was a little disingenuous- he would probably get a few years pay rise through eaten capital, before everything collapsed.
'Politicians only exist to buy more voters, keep citizens comfortable enough to avoid revolutions, and repay donors.' That wasn't always the case and it's not happening at a uniform rate across the Western world. America seems to be particularly prone to politicians who tell people the rich will pay for it all, when more taxes are the more usual fare. Here in the UK most voters are willing to spend a penny or two more per pound on the NHS, but won't vote it in, for the simple reason that they don't trust the politicians to actually spend the money on the NHS.
'Always funny how the smallest and least interesting government programs are the examples of what works in government. It's like when people point to water, sewage, roads, libraries and parks, things that don't really benefit from competition or would be hard to manage in practice.' I've been beginning to form a speculation about this. Ever read Peter Turchin's elite overproduction?
I think one the most terrible byproducts of educating a whole generation in useless and impractical degrees, is that it ultimately ends up creating a parasitic function which monopolises government revenue. Politicians and bureaucrats always want to create public sector opportunities for people who are similar to them, of the same class and educational background.
The problem is that people don't need the services of the highly educated through their government (apart from in the case of highly specialised degrees), they need people who are highly skilled to maintain their public infrastructure and to create the government services of tomorrow. Nobody needs the services of some English major sitting in an office answering the phone!
This is where the Scandinavian countries do better- I used to online game on a server which was at least partially comprised of Scandinavians, and of those who were looking to go into public service, all of them were studying degrees relevant to the job they were going into. The US and the UK are better characterised as being captured by Pournelle's iron law of bureaucracy: https://en.wikipedia.org/wiki/Jerry_Pournelle
> Deep in every man is the desire to create something of lasting value
Yup. As you say, Marx did not understand human nature. He made man both better than he is -- the idea that he could learn to share unselfishly -- and worse than he is -- content with mediocrity and 'safety' when in fact man wants to risk it all on the chance to BUILD something.
> and they can be quite loyal to talent and loyalty when the situation arises
The Good Old Days probably never were as good as they are remembered but the generation preceding mine talked about corporate loyalty. The Japanese rebuilt their country with a sense of team-play. You gave your all to Honda and Honda basically gave you a job for life. Honda and Toyota were competitors but also cooperators -- 'Japan Inc.' was a real thing. Their economic model made a mockery of Detroit in the car business. The value of Camrys is rising here -- the more time passes the more people want that level of reliability.
> Pournelle's iron law of bureaucracy
If only we could build it in to our governments to be constantly on guard. We are shocked and appalled when we read of some corruption or incompetence. We should rather expect it. As my garden turns to weeds if I let it, so the bureaucracy goes to weeds if we let it. There should be some thing comparable to sports: The Habs play a mean game of hockey because if they get fat and lazy the Leafs will kick their butts. And visa versa. There should be a Ministry of Efficiency who's job is to keep everyone else on their toes and the Ministry itself should be split into two with each half keeping an eye on the other half. In Canada we had -- or used to have -- the Auditor General who had more power than God when it came to reporting on waste and corruption. St. Sheila Fraser laid bare the corruption of the Cretien kleptocracy. Government does not *have* to go rotten, we merely let it go rotten.
> plus it would kill those businesses and cause massive job losses and block all future innovation and investment.
It didn't do any of that back in the day, it rather forced them to stay lean and mean rather than get fat and lazy.
> roads/bridges are crumbling and we even had the Flint water crisis
The fact that public services can be underfunded and even, occasionally, run very badly is hardly a good reason to privatize them, rather, to fund them properly. If you deliberately break something and then say: "See! It's broken!" you are not a prophet, you are a vandal. The plutocracy deliberately breaks public sector functions as an excuse to privatize them so that they can be run with one motive in mind: making profits.
> And it's not even clear that competing weather forecasters wouldn't do a better job
So we'd have Harry's Hurricane Tracking competing with Ted's Tornado Watch for your consumer dollars then?
"Thanks for phoning Ted's. Your call is important to us, please stay on the line and a meteorologist will be with you shortly. Please have your credit card handy. While you wait, did you know that Ted's accurately predicted 70% of tornadoes last year? For a subscription of only $500 per year you can get two forecasts for the price of one! (termsandconditionsapplytedsisnotliableforfailedforcastsordeathinjuryordamagecausedbybelievingoneofourforcastsnorefundsarepossiblebuyerbeware)"
Have a look at the part of the comment above which deals with the overproduction of elites and the parasitic capture of government revenue. That resource is precious and its being spent in ways which are inherently less valuable to society. It's not that the money isn't there, government has more than enough money to tend to the issues the market can't fix- it's just being spent on office workers and managers, instead of blue collar workers and technical specialists.
Exactly. Over a couple of beers you and I could hammer out a coalition government. I think we'd each tend to set the dials a little bit differently but we agree on where the problems lie. I'd love to tell you a few stories from my career as a mailman working for the 'classical' dysfunctional bureaucracy, the Post office.
Geary, you are a genius. Since that is established and it seems the collapse of the western world is upon us, what do you see next? (so I can position my portfolio).
Well, I think it is continued decline at the moment, whilst governments tries to solve the problems created a global supply system suffering from a lack of resilience caused by the lack of exposure to shocks- see: Nassim Nicholas Taleb and anti-fragility. My view is that the Left will continue to try to make inroads into Government but they are up against Corporate Centre Leftists who want to maintain the status quo, and an electorate who might be more sympathetic to economic progressivism but loathe cultural progressivism- you should check Latino attitudes to CRT and mask mandates on Civiqs.
You should really check out Matthew Goodwin on YouTube- he is particularly good on the Triggernometry podcast, but check out the earliest one if you can. He basically created the movement towards One Nation Toryism here in the UK and smashed the Red Wall as a result.
At the moment our politics is best characterised as a fighting retreat. The Right desperately needs a charismatic figure in the US who is less vulgar than Trump, yet still able to call out the crazy, and he or she cannot be too married to economic libertarian principles- they need to acknowledge the need for government services, but make waste the target. Ironically, the Left can be just as susceptible to this message, although they tend to focus more on the sweetheart deals conferred to crony capitalists than bureaucratic waste.
At the moment I would keep an eye on building suppliers and aggregates, but I wouldn't bet on anything at the top of its historical trendline and I also follow the golden rule to never invest more than 20% in any particular sector. I have however heard plenty of stories about timber and the like being redirected on its container ship, in the same way that oil tankers used to- and suppliers are only holding prices for one week for builders, given the escalating prices.
The other thing to watch out for is any diversity or inclusion training system which isn't racially divisive. Most corporations want both, but are currently engaged in what can only be described as legal cynicism (from a tort liability perspective) and a fear of adverse PR. American corporate budgets are now 3% diversity staffing and initiatives- so whoever can crack a diversity and training program which actually delivers results, but isn't racially divisive is set to make a mint.
The usual disclaimers over offering financial advice :)
This lady is particularly insightful: https://www.youtube.com/watch?v=n2g9DC8qI0M&t=4s and this HBR article tells us what a successful Diversity program is likely to look like: https://hbr.org/2016/07/why-diversity-programs-fail . Personally, I would ignore the publishing employee data by demographic, but the mentoring and recruitment buy-in a crucial if they ever want to make headway on this issue.
One of these days, some smart venture capitalist is going to realise that Trevor Phillips https://policyexchange.org.uk/author/trevor-phillips/ is the guy they really need to head-up a new diversity initiative/corporate external supplier in the US. He is of the Left and still a proponent its more sensible views, but has no time for PC authoritarianism- as witnessed by his suspension from the Labour party for supposedly Islamophobic comments, refusal to go quietly and recent reinstatement.
Interesting. Having a job/income should be moved down the maslow pyramid to physiological? I can see how job & purpose are related, and purpose might be categorized as self actualization.
Well think of it this way- virtually every society which had to work to survive ultimately, whist the collapse of Empires is always preceded by the development of two indolent classes- the rich and powerful as a parasitic elite and the underclass reliant upon them for bread and circuses. Once these two forces outweigh the centre of productive working and middle classes then the society is doomed.
'I can see how job & purpose are related, and purpose might be categorized as self actualization.' I think vocation touches on every layer of the pyramid, including esteem and love needs. Nobody loves a loser, especially if you are a man. But where the Left goes wrong in seeing lower value labour as demeaning and exploitative (which it can be, in certain circumstances), is that as well as labour having a price which provides for the material, it also fulfils a deeper need, by showing us we have value to society.
It's interesting if you were to rate the personal happiness of professors versus skilled tradesman who would you rank higher? Skilled tradesmen are highly valued by their customers, to the extent that we all trade the names of reliable people who don't overcharge, whilst many a professor suffers from frustrated ambitions in that they haven't achieved the cultural importance which they so deeply crave.
Are trade professionals more self actualised? Perhaps... It's certainly quite easy for them to emancipate themselves from the need to work for an employer- it all depends on whether they can stomach the paperwork of going self-employed.
Once you learn how to do that paperwork you can work out across the year how to earn the same net income minus 6-10 weeks work. Audit it all yourself and basically have ones accountant sign it off. Not something the taxman wants you to learn but it's not difficult. Personally I keep running totals that I periodically total together to form decisions on purchases etc. So it's the second half of the financial year that you need to be keeping an eye on. If you screw up and can't use tax laws to your advantage one can always buy a new van or even have a much worse financial following year. The taxman taxes us 50% in advance and that is claimed back if the following year is far lighter. Though that damned Covid thing is spoiling the opportunity for those 6 week trips to foreign lands.
“ The second lesson of Marx is that an alignment between Big Government and Big Business is to be feared more than anything else. ”
Yes. Monopolies come from regulatory capture, not from laissez faire capitalism. Most of the problems in the American economy come from cronyism and regulatory capture where a corporation and the regulators tasked with oversight of that industry get in bed together. This is why businesses like Facebook actually ask for more regulations in their industry. Better yet, they’ll help write those regulations.
“ Few who loathe the billionaire class actually realise that even if one confiscated all billionaire wealth in America it would only run American government for roughly six months. ”
Exactly.
“ Where the Right goes wrong is in imagining that all government is bad- the National Weather Service can only work through international the co-operation which exists outside of competition and it does a fairly good job at helping citizens protect their private property rights through advance warning of pending disasters.”
The few things government should do (and I think it should be very few as someone who voted Libertarian in the last election), it should do very well. Small government shouldn’t be ineffective. We should actually want a highly effective government that can accomplish a specific set of functions. I just believe that set should also be limited.
“ Historically, there are plenty of business partnerships which were comprised of liberals dreaming big and hard-working conservatives keeping them on task, instead of exploring new and exciting ideas- it was a partnership which paid off time and again in the world of business. I think this is because liberals are great at generating new ideas and terrible at vetting them, whereas natural conservative scepticism is great for filtering the great ideas from the terrible.”
This is actually a good idea for government agencies. It’s not original to me, but it would be great if in every executive agency meeting there was a libertarian/Ron-Swanson-figure to ask, “what if we did nothing?” Or “why should we do anything at all?” Not because the answer is always, “yes let’s do nothing,” but because it will force hard conversations about priorities and result in better solutions in the end. People make better decisions when forced to actually reason out why they are taking their actions.
I haven’t read Marx, except for the maybe parts of the Communist Manifesto. But I don’t exactly buy the idea that we’re in late-stage capitalism. If so, what will replace it? What comes next? As far as I can tell, late-stage capitalism is not that different from middle-stage capitalism. In fact, we might just call it capitalism. No qualifier.
The present always feels late until it becomes the past because we think we’re living in the future and we can’t imagine that the future could go on in much the same way that the past did. 2021 feels like a big number. But so did 1948. So did 1991. And so will 2053.
Great comment. 'But I don’t exactly buy the idea that we’re in late-stage capitalism.' I don't like the phrase either, but I do think that there is a case to be made that we have two distinct problems. The first is crony capitalism- large corporations working government to rig the game through regulatory cost barriers. The second is one of excess capital in the market. One money pumped into the economy by central banks and fractional reserve lending will eventually end up in the hands of capital and push share prices and building land values into the zone where they are no longer rational reflections of future value or scarcity costs.
Recently we had the bizarre scenario of governments outside of Germany being able to borrow at rates below zero interest. This in turn encourages governments to borrow at levels which may seem like a good deal in the moment, but makes collapse highly probable if interest rates ever rise again...
I would agree with that. Crony capitalism is a problem. But it’s not really new. And I definitely agree there’s too much money being pumped out by central banks that could cause inflation and other problems.
The one thing I’d push back on though is the housing. Housing shortages here in the US are far more the result of burdensome zoning and construction regulations, NIMBY laws and HOAs, and some regulatory capture, than they are the result of too much capital buying up all the real estate. In certain small markets, that may be true. I know that capital investments in land and real estate have increased. But as a percentage of housing and land purchases and ownership in the United States overall, it’s on the order of 2-3%. Not large enough to make a big difference.
Well the American market tends to be far more subject to localised high scarcity costs, whereas in the UK the path you are currently on has led to £1 million pound costs for an acre of building land in the South of England overall, with a less extortionate share being paid in the North (£300K per acre). In the South this means £200K costs per house before the foundations have even been laid, unless the houses being built are little more than rabbit hutches.
You are right about zoning and regulations, but the larger scale of entry into the market of firms like Black Rock is one of the first warning signs of a bifurcation in house building with one side of this business engaging in land banking (treating building land as a speculative asset guaranteed to rise in value, due to aggregated market economics). The other is the systemic underproduction of houses by you larger construction companies.
There’s definitely systematic underproduction going on. Some self-created scarcity. But in a freer market, competitors could come in and undercut that.
One big difference between the UK and US is available land. There’s still a ridiculous amount of undeveloped land in the US.
> the basic prophecies of Socialism didn’t come true.
Yet. I'm not a commie but from what I know of Marxist theory we are in exactly the late-stage capitalism that he predicted would precede the final collapse. 08' was a foretaste.
> and the US an anaemic 1.13%- ... It turns out resentment and anti-capitalism is terminally bad for the revenue.
They say that up until about the 80's in Canada corporations paid about half of all taxes and it was the time of greatest equality and greatest hope for the future. It is not resentment that causes me to say that 1.13% is very much too low, it is the fact that it is very much too low.
> even if one confiscated all billionaire wealth in America it would only run American government for roughly six mo
nths.
One hears memes like that. OTOH one also hears that the top 1% own more than the bottom 90% I can't help but be tempted by the thought that if we liquidated the top 1%, Lenin-wise, the wealth of the bottom 90% would double. Jeff is no doubt having fun with his rockets but the socialist in me wonders how many affordable dwellings might be built with the money.
The problem with liquidating the wealth of the 1% (or 0.1%) is that other than houses almost all of that wealth is held in productive assets. Extracting Elon Musk's money for example would mean breaking up Tesla and SpaceX. Basically, it would require breaking up companies, and getting rid of jobs in order to divvy up a few thousand dollars worth of wealth apiece. And doling out all that money would probably also entail price rises in many areas.
Of course, the government could also hold the companies in trust for the people- but do you really want government running your Amazon deliveries, or dipping into your pocket when they them all into loss-making industries?
> almost all of that wealth is held in productive assets
I don't doubt there's at least some truth in that. What I call real capitalism is obviously about productivity. But google 'mega yacht' and tell me if those things are productive assets or bling. Besides I use 'the 1%' as a stand-in for the parasites in general. As you know I admire Elon and probably wouldn't touch him even if I could. The robber barons of 150 years ago were also producers. Carnegie sold steel not credit default swaps. Morgan financed railways and bridges. Our disagreements are really quite minor and I think they're matters of degree not principal.
Not to be picky, but "productive asset" could be considered a matter of degree, where the yacht may be the social grease that gets other useful deals done, and even if non-productive in the sense of a lathe or photolithograph, provides the living for those who design, build, sell, and service the things--not to mention their crews, the caterers and other folks who make these things live "useful" lives.
"Marx was right about the end results of competition"
What was Marx's right take on competition? Is the notion that socialist nations won't themselves end up competing for natural resources and international trade? Sure, they get monopoly power within a nation (as if that were a good idea), but not across them. And good socialism would certainly have to be open to the idea of competition or it would stagnate rapidly, and if selected it home-grown products/services over better ones from other nations, it will fall behind.
"Government needs to get back to the core business of insuring fair rules to the game, without the perennial preference shown to large players and big donors. "
No government will do this. Politicians only exist to buy more voters, keep citizens comfortable enough to avoid revolutions, and repay donors. In socialism, this just occurs through state enterprises; in fascism, but making enterprises do the bidding of the state.
Even the US Constitution which tried to make this limited federal power clear couldn't hold off more than 100 years before politicians and courts realized they could just redefine (newspeak) the meaning and grasp all the power they can. I pay twice as much to the federal government as to my state/county/city, yet that's entirely the opposite of the clear intent of that Constitution. Turns out the law is whatever power says it is, just like it had been throughout history.
"Few who loathe the billionaire class actually realise that even if one confiscated all billionaire wealth in America it would only run American government for roughly six months."
And that wouldn't even make a dent in the debt, plus it would kill those businesses and cause massive job losses and block all future innovation and investment.
"the National Weather Service can only work through international the co-operation which exists outside of competition and it does a fairly good job at helping citizens protect their private property rights through advance warning of pending disasters."
Always funny how the smallest and least interesting government programs are the examples of what works in government. It's like when people point to water, sewage, roads, libraries and parks, things that don't really benefit from competition or would be hard to manage in practice. And yet many libraries are closing, roads/bridges are crumbling and we even had the Flint water crisis, California's water mismanagement giving big discounts on water to poorly managed agriculture, etc. And it's not even clear that competing weather forecasters wouldn't do a better job, like how we suffer the normal delays and high expenses for FDA/CDC drug testing/approvals/certifications.
"I think the socialist urge- when construed as the urge to help"
This used to be call charity when people voluntarily help groups that themselves have actual compassion and even competition on how best to help; and the rich have created great institutions using their wealth. Government does charity rather poorly, too, as demonstrated by public housing, rent control, inner city/rural public schools, medicaid, food stamps, affirmative action, etc.
But then my libertarian faith hasn't gotten me more than anger, dread and laughter at the government they force on us. People grumble about systemic racism, never-ending wars, mass incarceration, poor immigration/border security, failing schools, government housing, crazy tax laws, too big to fail, massive and absolutely normal deficits, questionable elections, failure to tax negative externalities, silly drug laws, etc.... and then say what government should do instead.
'What was Marx's right take on competition?' He was right that in the purest sense, that competition is the primary constraint of the market, with survival the stakes- and if these were the only goals of market players then his prophecies would have come true. If competition were our sole obsession innovation would be far less and capitalists would be forced to cannibalise worker pay in order to compete.
But where he was wrong was in underestimating humans, given such constraints we rebelled, but it wasn't the workers rebellion which was interesting, but the rebellion of capitalists themselves. Deep in every man is the desire to create something of lasting value, which offers a form of limited immortality and this vanity powered virtually every stage of the industrial revolution.
None of those risks were rational. None were safe risks on paper, or made any kind of sense from an investment point of view. Henry Ford's prediction that workers would be able to afford the Model T was just as crazy and improbable, as the vision of Jeff Bezos when he predicted that whoever held a monopoly on the exponentially growing potential for online information would be able to intuit people's buying choices.
People have the hunter's urge for opportunity. They are able to recognise genius when they see it, even if they don't understand. And they have the gamblers urge to prove the safe money wrong when they take a punt on some improbable scheme which doesn't look good on paper. Should Peter Thiel have backed PayPal- probably not- such payment schemes had been tried before and never gained mass appeal, just like Amazon or any number of other new markets and ideas- on paper none of it made any sense whatsoever.
What Marx got wrong was the unconquerable nature of the human spirit and our obsessive desire to make the long shot pay off. Plus, capitalists get a bad rep from the imitators who manage to get their hands on money. Yes, capitalists can be callous when necessary and they are not known for volunteering pay raises unless they have to, but given the choice they will always make the optimal choice for their workers from within narrow band of what competition allows and they can be quite loyal to talent and loyalty when the situation arises.
Although I was by no means a capitalist myself I did encourage several workers to pursue their talents with computers- I imagined that there would always be a space for small PC builds and repairs, for the simple reason that individual needs are best met by those who can supply them on a tailored basis- several now work for themselves on considerably more money than they were earning before.
But Marx, like so many since, would have been right if people were rational and had the sense to stick to the safe and sensible bet.
'Is the notion that socialist nations won't themselves end up competing for natural resources and international trade?' That's why I differentiated between the urge for socialism and the reality of socialism in government. Socialist government is doomed to fail, partly because of the top-down approach but also because it attracts a useless apparatchik who are more obsessed with doctrine and ideas than they are with practical realities.
But it can work on a smaller scale. Worker owner cooperatives are an example- the largest being Mondragon in Spain. The key is understanding the need to attract or grow a class of people as successful as the capital class at spotting opportunities. Mondragon's CEO and finance types earn about 8 times that of the average workers, generally come from their own community and are otherwise paid in the adulation of psychic profit. Perhaps a better word would be communitarian capitalism in which the State plays no part. I think it's similar to Adam Smiths observation that some especially esteemed public servants should be kept in the public sector because if they were privately paid they would be more expensive. Of course, they are a rarity in modern government, where most public servants imagine the rich should simply pay more, or there is some magical money tree.
I told a friend of mine who is a civil servant that socialism would get him a 6% pay rise once (the real rate of return on capital after tax, inflation and risk), but that he would have to stay on the same money forever, even as costs continued to rise. Of course, it was a little disingenuous- he would probably get a few years pay rise through eaten capital, before everything collapsed.
'Politicians only exist to buy more voters, keep citizens comfortable enough to avoid revolutions, and repay donors.' That wasn't always the case and it's not happening at a uniform rate across the Western world. America seems to be particularly prone to politicians who tell people the rich will pay for it all, when more taxes are the more usual fare. Here in the UK most voters are willing to spend a penny or two more per pound on the NHS, but won't vote it in, for the simple reason that they don't trust the politicians to actually spend the money on the NHS.
'Always funny how the smallest and least interesting government programs are the examples of what works in government. It's like when people point to water, sewage, roads, libraries and parks, things that don't really benefit from competition or would be hard to manage in practice.' I've been beginning to form a speculation about this. Ever read Peter Turchin's elite overproduction?
I think one the most terrible byproducts of educating a whole generation in useless and impractical degrees, is that it ultimately ends up creating a parasitic function which monopolises government revenue. Politicians and bureaucrats always want to create public sector opportunities for people who are similar to them, of the same class and educational background.
The problem is that people don't need the services of the highly educated through their government (apart from in the case of highly specialised degrees), they need people who are highly skilled to maintain their public infrastructure and to create the government services of tomorrow. Nobody needs the services of some English major sitting in an office answering the phone!
This is where the Scandinavian countries do better- I used to online game on a server which was at least partially comprised of Scandinavians, and of those who were looking to go into public service, all of them were studying degrees relevant to the job they were going into. The US and the UK are better characterised as being captured by Pournelle's iron law of bureaucracy: https://en.wikipedia.org/wiki/Jerry_Pournelle
> Deep in every man is the desire to create something of lasting value
Yup. As you say, Marx did not understand human nature. He made man both better than he is -- the idea that he could learn to share unselfishly -- and worse than he is -- content with mediocrity and 'safety' when in fact man wants to risk it all on the chance to BUILD something.
> and they can be quite loyal to talent and loyalty when the situation arises
The Good Old Days probably never were as good as they are remembered but the generation preceding mine talked about corporate loyalty. The Japanese rebuilt their country with a sense of team-play. You gave your all to Honda and Honda basically gave you a job for life. Honda and Toyota were competitors but also cooperators -- 'Japan Inc.' was a real thing. Their economic model made a mockery of Detroit in the car business. The value of Camrys is rising here -- the more time passes the more people want that level of reliability.
> Pournelle's iron law of bureaucracy
If only we could build it in to our governments to be constantly on guard. We are shocked and appalled when we read of some corruption or incompetence. We should rather expect it. As my garden turns to weeds if I let it, so the bureaucracy goes to weeds if we let it. There should be some thing comparable to sports: The Habs play a mean game of hockey because if they get fat and lazy the Leafs will kick their butts. And visa versa. There should be a Ministry of Efficiency who's job is to keep everyone else on their toes and the Ministry itself should be split into two with each half keeping an eye on the other half. In Canada we had -- or used to have -- the Auditor General who had more power than God when it came to reporting on waste and corruption. St. Sheila Fraser laid bare the corruption of the Cretien kleptocracy. Government does not *have* to go rotten, we merely let it go rotten.
> plus it would kill those businesses and cause massive job losses and block all future innovation and investment.
It didn't do any of that back in the day, it rather forced them to stay lean and mean rather than get fat and lazy.
> roads/bridges are crumbling and we even had the Flint water crisis
The fact that public services can be underfunded and even, occasionally, run very badly is hardly a good reason to privatize them, rather, to fund them properly. If you deliberately break something and then say: "See! It's broken!" you are not a prophet, you are a vandal. The plutocracy deliberately breaks public sector functions as an excuse to privatize them so that they can be run with one motive in mind: making profits.
> And it's not even clear that competing weather forecasters wouldn't do a better job
So we'd have Harry's Hurricane Tracking competing with Ted's Tornado Watch for your consumer dollars then?
"Thanks for phoning Ted's. Your call is important to us, please stay on the line and a meteorologist will be with you shortly. Please have your credit card handy. While you wait, did you know that Ted's accurately predicted 70% of tornadoes last year? For a subscription of only $500 per year you can get two forecasts for the price of one! (termsandconditionsapplytedsisnotliableforfailedforcastsordeathinjuryordamagecausedbybelievingoneofourforcastsnorefundsarepossiblebuyerbeware)"
Have a look at the part of the comment above which deals with the overproduction of elites and the parasitic capture of government revenue. That resource is precious and its being spent in ways which are inherently less valuable to society. It's not that the money isn't there, government has more than enough money to tend to the issues the market can't fix- it's just being spent on office workers and managers, instead of blue collar workers and technical specialists.
Exactly. Over a couple of beers you and I could hammer out a coalition government. I think we'd each tend to set the dials a little bit differently but we agree on where the problems lie. I'd love to tell you a few stories from my career as a mailman working for the 'classical' dysfunctional bureaucracy, the Post office.
Geary, you are a genius. Since that is established and it seems the collapse of the western world is upon us, what do you see next? (so I can position my portfolio).
Well, I think it is continued decline at the moment, whilst governments tries to solve the problems created a global supply system suffering from a lack of resilience caused by the lack of exposure to shocks- see: Nassim Nicholas Taleb and anti-fragility. My view is that the Left will continue to try to make inroads into Government but they are up against Corporate Centre Leftists who want to maintain the status quo, and an electorate who might be more sympathetic to economic progressivism but loathe cultural progressivism- you should check Latino attitudes to CRT and mask mandates on Civiqs.
You should really check out Matthew Goodwin on YouTube- he is particularly good on the Triggernometry podcast, but check out the earliest one if you can. He basically created the movement towards One Nation Toryism here in the UK and smashed the Red Wall as a result.
At the moment our politics is best characterised as a fighting retreat. The Right desperately needs a charismatic figure in the US who is less vulgar than Trump, yet still able to call out the crazy, and he or she cannot be too married to economic libertarian principles- they need to acknowledge the need for government services, but make waste the target. Ironically, the Left can be just as susceptible to this message, although they tend to focus more on the sweetheart deals conferred to crony capitalists than bureaucratic waste.
At the moment I would keep an eye on building suppliers and aggregates, but I wouldn't bet on anything at the top of its historical trendline and I also follow the golden rule to never invest more than 20% in any particular sector. I have however heard plenty of stories about timber and the like being redirected on its container ship, in the same way that oil tankers used to- and suppliers are only holding prices for one week for builders, given the escalating prices.
The other thing to watch out for is any diversity or inclusion training system which isn't racially divisive. Most corporations want both, but are currently engaged in what can only be described as legal cynicism (from a tort liability perspective) and a fear of adverse PR. American corporate budgets are now 3% diversity staffing and initiatives- so whoever can crack a diversity and training program which actually delivers results, but isn't racially divisive is set to make a mint.
The usual disclaimers over offering financial advice :)
This lady is particularly insightful: https://www.youtube.com/watch?v=n2g9DC8qI0M&t=4s and this HBR article tells us what a successful Diversity program is likely to look like: https://hbr.org/2016/07/why-diversity-programs-fail . Personally, I would ignore the publishing employee data by demographic, but the mentoring and recruitment buy-in a crucial if they ever want to make headway on this issue.
One of these days, some smart venture capitalist is going to realise that Trevor Phillips https://policyexchange.org.uk/author/trevor-phillips/ is the guy they really need to head-up a new diversity initiative/corporate external supplier in the US. He is of the Left and still a proponent its more sensible views, but has no time for PC authoritarianism- as witnessed by his suspension from the Labour party for supposedly Islamophobic comments, refusal to go quietly and recent reinstatement.
Interesting. Having a job/income should be moved down the maslow pyramid to physiological? I can see how job & purpose are related, and purpose might be categorized as self actualization.
Well think of it this way- virtually every society which had to work to survive ultimately, whist the collapse of Empires is always preceded by the development of two indolent classes- the rich and powerful as a parasitic elite and the underclass reliant upon them for bread and circuses. Once these two forces outweigh the centre of productive working and middle classes then the society is doomed.
'I can see how job & purpose are related, and purpose might be categorized as self actualization.' I think vocation touches on every layer of the pyramid, including esteem and love needs. Nobody loves a loser, especially if you are a man. But where the Left goes wrong in seeing lower value labour as demeaning and exploitative (which it can be, in certain circumstances), is that as well as labour having a price which provides for the material, it also fulfils a deeper need, by showing us we have value to society.
It's interesting if you were to rate the personal happiness of professors versus skilled tradesman who would you rank higher? Skilled tradesmen are highly valued by their customers, to the extent that we all trade the names of reliable people who don't overcharge, whilst many a professor suffers from frustrated ambitions in that they haven't achieved the cultural importance which they so deeply crave.
Are trade professionals more self actualised? Perhaps... It's certainly quite easy for them to emancipate themselves from the need to work for an employer- it all depends on whether they can stomach the paperwork of going self-employed.
Once you learn how to do that paperwork you can work out across the year how to earn the same net income minus 6-10 weeks work. Audit it all yourself and basically have ones accountant sign it off. Not something the taxman wants you to learn but it's not difficult. Personally I keep running totals that I periodically total together to form decisions on purchases etc. So it's the second half of the financial year that you need to be keeping an eye on. If you screw up and can't use tax laws to your advantage one can always buy a new van or even have a much worse financial following year. The taxman taxes us 50% in advance and that is claimed back if the following year is far lighter. Though that damned Covid thing is spoiling the opportunity for those 6 week trips to foreign lands.