The Seditionist

A Free-market advocate response to the obvious problems in modern economies often boils down to government (how surprising). Government is corrupt, corporations purchase governments, governments use regulations to enforce monopolies. Let’s put aside the fact that this argument is rarely supported with solid evidence, and let’s suppose that it’s the government that makes us shop at Wall-Marts, Microsoft, Apple and Nike. Let’s even put aside the VERY questionable thesis that governments have some sort of monopoly on power crony-ism, and the probability that when propaganda power is for sale and transparency up to the whim of corporations the corruption at every level would increase, not decrease.

What would happen in a Free Market lacking regulations?

Let’s take an expensive, high-tech item with very high start-up costs, like microchips. There is almost no threat of competition, because the start-up costs involved in producing this product, as well as the gap in technology to be surmounted are so vast.

At best there will be a very small number of serious competitors who will find it to be beneficial to all to collude and control prices. This maximises profits for the (naturally arising) cabal, and minimises the risk of catastrophic product failure.

Even so, there’s also a lot of non-techy stuff sold which doesn’t have high research costs… so a large part of the economy doesn’t have this problem! Actually, brading and control of distribution networks work much the same; to produce brand awareness takes enormous amounts of money, and small competitors will in all likelihood struggle and at best be forced to cooperate with larger corporations, to be bought up or snuffed out at a whim. Having a very powerful distribution network enables a corporation to suffocate smaller competitors and gives the large corporation a huge stick to whack anyone who dares support the competition. This happens now, and it would happen in Free Markets.

It is perfectly natural for Free-Market competitors to engage in a cannibalistic cycle of mergers until only huge, near-omnipotent monoliths remain, and I’ve never heard a coherent argument to why this wouldn’t be the case.

The thesis of Free-Market competition may hold for no-brand socks and muesli but it does not hold for real economies.

I have a counter-hypothesis. It is not regulations or governments or unfree markets that create monopolies, it’s the unequal distribution of power. The less equally power is distributed, the freer the more powerful they are to abuse their power, the smaller the number of equals they have to cooperate with (yes, it makes a difference whether you have a cabal of 10 or a cabal of 10000), the more able they are to game ANY system  to gain yet more power.

A ‘Free’ Market is a way to distribute power through property. Unfortunately, built in to the idea is the accumulation of property, and there are mechanisms to aid the accumulation of property of the wealthy in basic economics (economics of scale, for example) and basic psychology. In the long run, a ‘Free’ market is an increasingly poor way of distributing power equitably and leads to increased monopolies, crony-ism and corruption.

Representative democracy is a way to distribute power through politics. While in theory at least less susceptible to the accumulation of power, the use of money from rich families to their children and from business to favoured candidates creates an unequal distribution of power that too worsens as democracy grows more stale and intertwined with Big Business.

Together they are still better than picking just one, because distributing power twice is better than doing it once, even if the distribution mechanisms are all increasingly failing. However, the only true solution is to aim at a distribution mechanism that seeks to distribute power equitably and that has safety mechanisms that mean that it does not decay in its ability to do so over time.

Could such mechanisms be built into representative democracy or free market economics? Perhaps… for example, an equal start for all children (100% tax on inherited property – no inheritance) would go some way towards creating such a system and it would not take away from the freedom of the market itself, but of course it would create problems for classical economists who cannot understand humans except as rational sociopaths interested only in the accumulation and passing on of property. Also, it seems a certainty that those who manage to accumulate large amounts of power in their lifetimes will seek to create new mechanisms by which it can be passed on, corrupting the system.

Equality (not the straw-man version where we have bakers cure cancer and scientists sweep streets, but equality of status and an equitable share in the decisions of society) and Freedom go hand in hand, and these siblings are the only long-term cure to corruption, crony-ism and monopolies.

Most have seen a Hitler or Goebbels speech; a figure afire with conviction standing before a roaring crowd; the intonation of the speaker’s voice, the clever pauses in which the crowd can jump to their feet and cheer loud enough to drown out  all else, the repetetive chants of “Heil! Heil! Heil!” It was all an impeccably organised event of rabble rousing, down to the imposing decor, the goose-stepping children with Fatherland in their steps and iron in their eyes.

While the Nazis perfected the rabble-rousing speech, it’s been around for a long time; I presume it’s been with us since the beginning. It’s not magic, merely a simple psychological process that makes a collection of people perceive themselves as not merely a group but almost as a single individual. A process which would do wonders for the tribe during times of war, and perhaps bring it together in times of need.

Jingoists the world over frequently hold such events, flags billowing in the background and chants of “U.S.A, U.S.A, U.S.A!” or local equivalent. Whether campaign rally or tea party, a crowd is quickly transformed into a photogenic rabble.

Sometimes those of us on the left forget that the same situation appeals to us just as strongly, though there will probably be no national flags or nationalistic sloganeering. The essentials will be intact though; the spontaneous cheering, the electricity coursing through the crowd, pumping adrenaline into enthusiastic minds.

In the end, I don’t think there’s anything wrong with being inspired by being part of a crowd, even if it’s a simple psychological trick. The important thing is understanding that it’s happening. It’s OK to take the energy from such an event and apply it to though-out, well-reasoned causes. It’s counter-productive to be swept up by a wave of enthusiasm, to unthinkingly charge forward without pausing to consider whether what we’re doing is going to be productive and whether it’s even something that agrees with one’s political and moral outlook.

A big thing happened in the U.S recently; the Supreme Court overturned a judgement which prevented corporations from directly using corporate money to run political advertising and campaigning (it had to be done through political action committees or otherwise funnelled to parties through donations).

Many on the left are deeply worried by this development.

Then there are those on the left that agree corporations should enjoy freedom of speech. Those of the classic ‘liberal’ tilt. After all, the owners of corporations are also people, and they should be able to use their private resources to speak freely. Right?

Let’s disregard for a moment that the CEOs that make these decisions do not hold democratic polls of corporate shareholders (owners) and assume that all shareholders are somehow involved in this process and it is indeed their free speech that is voiced by the corporation. Is that really very free?

How free is your speech? We can talk to people, we can blog, we can youtube. We cannot purchase TV advertising, roadside advertising, radio advertising, viral advertising… sure, we could, theoretically, if we had a few million dollars just lying around for when we wanted to open our mouths; most of us don’t.

But we can join together, pool our money in non-profit corporations and then make our voices heard! Right? Sure… theoretically… we can scrape together enough money to run the occasional ad on an issue lots of us care very very strongly about. But we’re not even in the same ball park.

Why? Well, take into account that 5% of the U.S population own 60% of the total wealth. If we base free speech on the amounts of money that can be raised, those 5% have 60% of the voice. Then we know that the bottom 80% own 15% of the total wealth in the U.S. Translated, that means that rich U.S citizens have an economic voice 12x louder than would be the case would distribution be equal, and the bottom 80% have a voice only 1/5 of what it should be. The rich are 60x louder than the poor. And that’s without taking into account the known fact that of what poor people own, far less is disposable in percentage terms than for a rich person’s wealth.

Yes, income distribution is getting worse. This problem is getting worse. And we’re the lucky ones, we are the 80% of citizens of the  RICHEST countries on earth. The voice of your average African is the sound of perfect silence.

When democracy was in its infancy, there was both exclusion of minority groups and proportional voting, in which the votes of the powerful counted for more. Today, we are institutionalising a system that undemocratises (no, that’s NOT a real word!) free speech, and by omission stifles the speech of the vast majority of citizens. We allow ourselves to be propagandised and silenced, and we have learned to call this freedom.

We need the greatest amount of freedom for the greatest possible number of people. If we’re going to be satisfied with only the first part of the last sentence, we’re betraying ourselves and our fellow citizens because there’ll never be space for all of us in the top 5%. That’s just maths, folks!

Did you know that Haiti was forced to pay France the equivalent of over 20$ billion U.S dollars from 1825 when the Haitian people won their independence by force of arms?

Did you know this was to compensate French slave owners for loss of Haitian property? Did you know that these repayments were enforced by a Franco-British economic blockade of Haiti?

Did you know that by 1900, Haiti was spending 80% of its state budget on ‘repaying’ France for the loss in slaves and conquered land?

Did you know that these repayments continued until 1947?

Seems a much better explanation for Haiti’s abject poverty than a deal with the devil.

Sources:
http://en.wikipedia.org/wiki/Haiti#Treaty_of_Ryswick_and_slave_colony
http://www.wtop.com/?nid=111&sid=1865152
http://www.globalresearch.ca/index.php?context=va&aid=17130

Watching Fox, I came across one of their short filler pieces that boiled down the self-destructive nature of modern economic politics.

The piece focussed on one of the many shitty, run-down, impoverished U.S ex-manufacturing cities. I think it was Detroit (in many ways the show-piece of absolute and total economic failure) but there are plenty of other cities inside and outside the U.S that would work just as well.

Detroit cut taxes on the film industry by 40%. As a result, Hollywooders flocked to Detroit, and the city increased its income from the film industry from 2mio to >120mio annually. That’s a 6000% rise in profits. Wow! Free-market Capitalism does work! How could I argue with these numbers?

Here’s how: Detroit used to be one of the most prosperous cities in the U.S. Solidly working-class, it produced cars for the world. Then the globalisation game began, and industry started fleeing to tax havens, both national and overseas. Today Detroit has an official unemployment rate of 30%, compared to the ~14% rate in the U.S overall. The much-vaunted service industry employs a good chunk of Detroit’s population, but of course providing services cannot fill the gap left by the actual production of things people need.

It also has a post-hollywoodisation budget deficit of ~300mio dollars with a budget of 1.5 tri. dollars that is already insufficient to run vital public services. How’s it going to get fixed? Not by raising taxes, obviously. That’ll just speed up the big-business exodus. Not by cutting the budget, because there’s nothing left to cut. Not by federal intervention, because the federal government is even broker than Detroit.

What can Detroit do? Cut taxes and hope that it undercuts some other struggling city to gain a temporary boost in revenue. ’cause the dirty little secret of that extra 118$ mio. in Hollywood income is that it’s not magic money. It’s not money Detroit is making. It’s money that Detroit is sucking from other cities. How will other cities respond? By lowering taxes some more. Ca-ching, more money. That leads into another round of tax-lowering and incentivising. Where will it all end? It’ll end with a 0% tax rate and added incentives. How will the politicians spin this as a victory? Well, they’re losing the city a bit of money but they are creating jobs, and that will provide a net benefit to the community (and increase the size of the budget hole. Shhhh!). It’s exactly the same cycle that produced tax-free zones in developing countries (sweat shops, anyone?) , which means that no industrial area imposing any kind of social tax burden can compete. The result? A world of Detroits.

The precursor is with us today. California is the world’s fourth largest economy, and it is also essentially bankrupt. The Terminator went into the governorship with the brilliant idea of lowering taxes to spur economic growth. Guess what? The taxes were all lowered out. There’s no economy left to grow. The budget deficit is perfectly capable of growth, though. Interest rates on debts mean that even standing still would mean falling behind. And of course California is not standing still. It is charging full-force into total bankruptcy.

Being the strongest horse on the U.S apple cart, it’s doing an A-grade job of taking the rest of the U.S with it. California has a population of 38mio and a yearly budget deficit of 40bio. That means per resident, California is losing 1052$ a year. On the other hand, Michigan has a population of 10mio and a budget deficit of 1bio. That means Michigan is losing 100$ a year a person. Huh? The miracle child of economic success in the U.S is losing 10x more money per person a year than the economic basket case? How’s that possible? That makes NO SENSE. None whatsoever. It’s insane. The more economically successful in terms of gross state product, the less successful the state is in terms of not losing incredible amounts of money a year. And we’re ignoring the fact that compound interest compounds the problem inexorably.

Basically, economic guidance for governors should be: have as small an economy as possible, that way you will have the greatest economic success. Why is politics going the other way? Living standards. California has sky-high living standards built on the powerful economic base which provides good jobs for its residents. Michigan has high unemployment and crappy jobs, and hence blossoming slums.

Of course nobody wants to talk about the fact that this difference in living standards is built entirely on public borrowing, since it would probably be a somewhat unpopular political move to declare a program of increasing unemployment to combat public debt. Unfortunately this political expediency does not make the California model any more sustainable. The truth is, the more business you do with big business, the poorer you will be. And there’s no long-term way to win this game. It’s just a race to the bottom, and the fittest horse will get there first.

What awaits us at the bottom? Complete privatisation? A Great Chinese Buyout? A break-down of government followed by anarchy of the Darwinian kind? A revolution of angry citizens? Nobody knows the answer to that question, and I certainly don’t want to put my money on a positive outcome.

Now that Obama has ‘confirmed’ the link to the ‘Yemen branch of Al-Quaida” of the recent pants-bomber, we should presumably go bomb the shit out of some rocks and peasants somewhere for a couple of months. I’m sure there are some developing countries where people still aren’t afraid to throw a wedding party.

In Germany, we had an eager bunch of terrorist young guns in the day. The Red Army blew up plenty of people, kidnapped people including important figures in industry and politics, were involved in the successful abduction of a Lufthansa flight, all the while being hunted by the best intelligence services in the world.

The IRA in Ireland have a history that at least equals the RAF in capacity and exceeds it in active terror time.

Now here comes ‘Al-Quaeda’. The pants bomber made his pants catch on fire. The shoe bomber made his shoes catch on fire. The guy who tried to blow up the airport in Scotland made himself catch on fire. The ‘Islamic assassin’ who was ’sent’ (by a little voice in his head, presumably) to kill the cartoonist who drew that infamous Muhammad cartoon is in hospital after getting shot while trying to carry the deed out by… axe. Really, axe? Not poison umbrella dart? Not even grenade or sub-machine gun? Axe?

I’m not saying that there aren’t people in the world today who are capable and willing to carry out terror acts in the name of Islam. 9/11 was clearly a well-organised event (though in the end far less sophisticated than many cold-war terror actions); the Spain and London bombings were also well thought out. Indonesia’s terrorists have a history of pulling off successful attacks.

But the fact that these skills obviously possessed by a small number of terrorists are not at all being passed on to any larger group seems to indicate a marked lack of organisation. It seems to indicate that these individuals have little in common aside from their ideological bent. The fact is a well-organised and trained terrorist group can pull off a successful attack pretty much every time unless they’re actively prevented from doing so, while many of our current enemies seem to be a greater danger to themselves than to us.

I don’t think many if any of these groups or individuals rely on ‘Al-Quaeda’ for training or inspiration. What that means in the long run is that we have to quit trying to destroy terror networks by explosive force and have to start getting serious about listening to worried fathers dobbing in their sons.

A long-standing argument of absolutist-minded folks has been that moral goodness requires absolute and unquestionable laws that are founded not on any earthly principles but on cosmic conspiracies of one sort or another.

The argument in a nutshell has two prongs:

-people are selfish, therefore people cannot make moral choices when they involve altruism, therefore an absolute law is needed to provide morality which is apart from self-interested self-preservation.

-relative moral laws are subject to change, therefore they are not really moral laws at all and could be stood on their heads tomorrow. We need absolute laws not subject to change to create a lasting moral framework.

On the one hand there are several issues that can be raised with this reasoning, and on the other there are people who believe both tenants and still do not believe in absolute moral law, which leads them to reject all moral reasoning as merely pragmatic evolutionary thinking.

I don’t want to go into a lengthly discussion on either of those points, so I’ll just throw out there that a careful distinction must be made between self-directed and selfish actions when discussing the first point (of course we *want* to do the things we do, unless we’re suffering from some form of possession, but that does *not* automatically make our actions selfish) and that I believe that morality has evolutionary origins since it almost certainly preceeds moral reasoning (unless we assume vampire bats, for example, exhibit moral reasoning on an intellectual level) but that does not mean that we cannot also find rational foundations to underlie our moral reasoning.

I do think there is a rational basis for rationality, and it is the magical gift of empathy (courtesy of evolution, yes) that makes it possible. Sociopaths out there, you’re going to have trouble following.

1) Through experiencing our own emotions, we know that we enjoy pleasure and dislike suffering.

2) Through empathy and science, we know that many other beings also enjoy pleasure and dislike suffering.

3) On a scientific and empirical basis, we know that we are not in any way special above and beyond all other living beings. We are in fact quite ordinary all round.

4) Given that we want to give ourselves happiness and prevent suffering, and given that we understand other living beings that have no inherently greater or lesser worth than ourselves have the same desires, we should seek to bring happiness and prevent suffering to other living beings. Given that we also have an understanding of many of the mechanisms that make people happy or make them suffer, we also have the tools to bring happiness and prevent suffering.

5) If we demand happiness for ourselves and do things to bring it about, yet we accept suffering for others and do not prevent it, we are hypocrites. We are not being consequent in our reasoning by preferring ourselves simply because we happen to be the one looking out of this body’s eyes.

There are many possible retorts to this argument. Many will go along the lines of “Other people don’t care about me, I don’t owe them anything” or “I don’t expect anyone to help me, so sod those losers. Let them pull themselves up by their own bootstraps”. I believe this kind of argument to be dishonest; of course we strongly desire help when we are needy, even if pride or fear sometimes prevents us from asking.

And of course there are people who really have very little time to worry about us and help us, but if those people happen to be unable to do so because of their own terrible situation while we are living lives of relative wealth we are still being hypocritical. Would we really be happy being born into a dire situation, brought up poorly and forced to do idiotic or unsavory things for our daily bread? If not, then let us not be hypocrites and pretend we owe them nothing because they owe us nothing.

There is one important offshoot from this argument, however. If we desire happiness for ourselves and happiness for others, and desire the abolition of suffering for us both, then we have little responsibility if we are in the situation of being far less happy and far more suffering than the person. Conversely, if we are in the superior position, we have a great responsibility.  Note that it is not good enough to pick out someone better off to be able to free ourselves of our burden; we may not have to give to Bill Gates (though who knows, I’m sure everyone can use a hug or a kind word) but merely having the time and tools to think about moral reasoning probably means there are countless people out there who we owe our help to.

The truth is that hypocrisy is with us all; none of us will yield our comforts easily to help someone in need. This is not a call for poverty and renunciation leading to disillusionment or depression, but rather a request to consider on a case-by-case basis whether this is an opportunity to be a little less hypocritical on the question of human happiness.

Credit goes to: This argument is not one of my own construction, of course. Thanks go out to the Golden Rule as espoused by the ancient Greeks, Buddha and Jesus among others, and to Utilitarianism as proposed by Bentham and expanded upon by philosophers like Peter Singer.