A persistent problem that I see in criticisms of "capitalism" is the unclarity in the use of that term, which in turn seems to be a result of the absence of a clear contrast class.
Let's take, for example, a criticism to the effect that "Capitalism over-values efficiency to the detriment of other important goods."
What does it mean? I ask this question in all seriousness, because the more I think about it, the more sure I am that I don't know.
What, precisely--and I do mean precisely, is this "capitalism" being personified in the criticism? Capitalism as opposed to what?
Here are some possible meanings:
The criticism could mean that people nowadays who tout the free market or laissez-faire economics (such as myself, for example) are more prone than the general public, or are more prone than those who advocate a more heavily regulated economy, to over-value efficiency to the detriment of other important goods. This interpretation at least gives the criticism a meaning, but it makes it very hard to decide that it is true without begging the question on particular matters of policy. After all, the person who brings the criticism presumably disagrees with someone like me on whether and how this or that business should be regulated. One can guess that he would characterize our disagreement by saying that I overvalue efficiency to the detriment of other important goods. But in that case, we might as well just debate the particular policy issues where we disagree. The generalization that involves personifying an entity called "capitalism" really adds nothing to the discussion.
Another point, if we give this interpretation, is that we social conservatives ought to agree among ourselves that some of the most egregious examples of valuing what is said to be efficiency at the expense of other important goods come not from the advocates of the free market but, emphatically to the contrary, from the advocates of central planning. Here I am thinking particularly of the area of health care. Who is it that speaks blithely of "our" healthcare dollars and tells us that "we" need to spend them more "efficiently" and "rationally" and therefore need to rid ourselves of the elderly and dependent? Answer honestly: It isn't the American Enterprise Institute, the Action Institute, or the Mackinac Institute. And it certainly isn't individuals cheering for the free market like Lydia McGrew. No, it's those who are panting and yearning to centralize the entire healthcare industry so that panels of "experts" can impose their ideas of "efficiency" on all the rest of us by getting rid of the "life unworthy of life." It's the free marketers who think that such plans are utterly disastrous, for a whole slew of reasons.
No doubt other examples could be given. For that matter, even the use of eminent domain to force people to sell their land for the building of an electric dam in the name of efficiency is going to meet with a somewhat ambivalent response from someone with libertarian sympathies like myself. We happy moderns, cheering the movement of progress, may be all in favor of electric dams, but those of us who get queasy about government power are not exactly excited about forced purchase for the sake of bringing them into existence.
Let's try another interpretation of the criticism. One could take the criticism to refer to industrialism and to mean that people in industrial societies are likely to overvalue efficiency more than people in pre-industrial societies. I doubt that this is true, but it's at least meaningful. However, it then has little or nothing to do with free market economics. For Communist countries have been highly industrialized, while some tribe still working with stone knives and bear skins can and often probably does have a highly unregulated and laissez-faire economic approach.
Another interpretation might be the claim that people living in countries with more unregulated economies tend to over-value efficiency and that more regulation seems to produce a greater ability to value other things. It would be difficult to say what evidence someone might bring to bolster such a claim, but it certainly seems disconfirmed by the history of America itself. As we look at the past 150 years of American history, we see the loss of social capital and the growth of cold-heartedness along with ever-increasing government regulation of business, a level of regulation that makes it harder and harder even to start a business.
Nor am I saying that this coldness of heart and failure to value intangible goods is caused by the government regulation of business. That's not the point one way or another. The point is that there really doesn't seem to be any good evidence that increasingly poking and prodding the money-making goose that lays the golden egg has the beneficial effect of somehow making people value the intangible finer things of life.
I hope that this short series of examples will show how very difficult it is to pin down attempted criticisms of a shadowy entity known as "capitalism." In my opinion it's salutary for would-be critics to discipline themselves by trying to think of a contrast class, to ditch the personification of "capitalism," and to ask themselves exactly what they really mean, followed by asking themselves what concrete evidence they have for the now-clarified claim.
A few further points: Sage indicates that perhaps fans of the free market are uncomfortable with the question, "How much economic efficiency is too much?" To tell the truth, I'm simply baffled by the question. What does it mean? Efficiency in what area? "Too much" in what sense? And so forth.
I would say that in general, it seems to be extremely elusive to decide that some process is "too efficient." For example, is driving a car "too efficient"? Would it be better if cars were banned and if everyone were forced to use horses instead? Obviously, that's an extreme example, but it illustrates the baffling nature of the question.
In such elusive areas, it seems to make the most sense to allow individuals to decide for themselves to a very great extent how much efficiency they want.This cuts both ways; it also amounts to a defense of the person who prefers to be inefficient relative to some currently available technology. For example, if someone wants to do without e-mail, more power to him! I have no ambitions to force him to use e-mail! But on the other hand, I don't think the agrarian should have ambitions to try to chivy me not to use e-mail or a cell phone or what-not.
An important point is that I shouldn't assume that I know better than anyone else "how much efficiency is too much" in every area or even many areas. This isn't false modesty. Sometimes I do think I know better than others. But in a nebulous area like this, it behooves us to take a lighter-handed approach. If indeed society works better, as Sage hypothesizes, with a certain amount of what will look to some people like inefficiency, then perhaps we should count on other people to recognize that as well. In that case, the free market system will take that into account.
"Inefficient" (the scare quotes are deliberate, as it isn't clear that they are always really inefficient) ways of doing things can easily be catered to by the market when there are people who want them. We already see this in many hobby areas, with everything from scrap-booking to micro-brewery to growing "heritage grains" (not to mention far more important things like home schooling) made possible by the prosperity and leisure time which are the gifts of free enterprise itself.
All of this seems to me to be counterevidence to one final possible interpretation of the above criticism--namely, that a materially prosperous people (as opposed to a poorer people or country) values efficiency of production too much, to the detriment of other intangible goods.
Comments on this post have been closed at What's Wrong With the World and redirected to this cross-posting at Extra Thoughts. This is for a very specific reason, and here, without being angry in any way, I would like to address a specific W4 commentator: Nice Marmot, I'm sure you mean well, but you are positively the worst offender recently at W4 in the area of bringing criticisms of something you call "capitalism" (or sometimes "corporate capitalism") without specifying your meaning. At times I really think perhaps you are not capable of being more specific, but it tends to get frustrating and can waste time. You also have a tendency to criticize advocates of free market economics like myself of things we have expressly disavowed, which is also frustrating and time wasting. By no means am I saying that I will not approve your comments here at Extra Thoughts, where full moderation is enabled. I may do so. But I think the discussion will be more profitable if the discipline I've enjoined in this post is enforced--that is to say, if you have to do more than make generalizations and repeat yourself, and if you have to define your terms and specify a contrast class. It's an excellent exercise and I think often could force those who are used to talking to people who agree with them and used to dealing in sweeping generalizations to recognize, if only in the privacy of their own minds, that they really do not have a very clear idea of what they are saying and what their criticism amounts to. Sweeping history of ideas that deals in lofty generalizing terms, not to mention psychoanalysis of those who disagree with one, can be addictive.
I would like to challenge the critics of the free market to go cold turkey.
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47 comments:
Not surprisingly Lydia, I think this is an excellent post. But I'd actually like to rise to your challenge as I was someone who thought Sage's comment had merit.
As I alluded to in my previous comment, I often find myself in arguments with libertarians over the issue of immigration -- they want open borders and more than anything believe more immgration will promote economic efficiency.
Now, in their case I believe they are specifically referring to GDP growth -- there is excellent economic literature that suggests immigration = increased GDP. But, that same literature has nothing to say about the long-term effect on public finances due to immigration, long-term effects on wages for certain segments of the population (e.g. low-skilled or computer programmers might face downward pressure on their wages), the effect on crime or community cohesion of immigration, etc., etc.
So in my debates with libertarians, I think this fits pretty well of a "contrast class". On the one hand, a policy that will produce a more 'Pareto optimal' outcome versus the policy I favor which will sacrifice some economic efficiency in this sense for other values I favor.
Keep in mind that despire the more radical rhetoric of the open-border types, this is a political question -- either folks will be persuaded that more immigration is economically beneficial to them or they will be persuaded that it won't or other values will trump the gains in economic efficiency.
On the one hand, I by no means doubt that there are people who levy the sort of vague criticisms Lydia laments in this post.
On the other hand, however, I think that the criticism Lydia discusses is real and merits consideration.
I would not articulate the criticism in the way Lydia articulates it. Rather, the valid criticism of this genus is that the theory underlying Capitalism, advanced by Capitalism's formative thinkers and generally promoted by its contemporary defenders, posits that the desire for the acquisition of wealth and the pursuit of wealth by individual participants in a market is a) inevitable, b) desirous, and c) productive of the best results.
Now, (a) is likely true, although ignoring the fact that people often act from other motives turns one into an economist.
(b) and (c), on the other hand, contain significant problems. First, wealth maximization is not a virtue. In fact, the pursuit of wealth is often rooted in the vice of avarice. Second, adopting wealth maximization as a principle goal results in the discounting and destruction of goods that are not easily monetized. Architecture is a perfect example: developers buy up and demolish buildings full of irreplaceable architectural craftsmanship for the purpose of squeezing a profit out of a cheaply built replacement structure (be it commercial or residential). Because people have proven themselves willing to pay for ugly things, the market tends not to protect beauty or craftsmanship, and does not even pretend to protect the public's interest in avoiding the aesthetic externalities of modernism.
Okay, good, so let's put each of these in terms that sound like a restatement of the original criticism. For Jeff's, it would go something like this: "The theoretical claim that we should maximize a country's GDP by allowing unlimited immigration from neighboring countries (like Mexico), a claim often made by many libertarians in our contemporary world, causes people who accept it short-sightedly to ignore other costs of such immigration."
The contrast class, then, would simply be people who do not favor that immigration. The idea would be that pro-open-borders libertarians, in contrast to those who favor more restricted immigration, tend to value efficiency (where "efficiency" here is defined entirely in terms of an increase in America's GDP) to the detriment of other goods. Or, to put it the other way, that those who favor immigration restriction, including from Mexico, are (in contrast to open-borders libertarians) more capable of seeing the value of important goods other than a short-term increase in GDP.
I agree with this criticism of open-borders libertarianism. I think it's pretty much an accurate criticism.
I also think that the libertarians in question are making a mistake in isolating GDP from other factors, factors which are ultimately relevant economically. Crime, for example, is pretty inefficient for a community. The community has to expend resources to hunt down the criminals. Property and persons are damaged. Nobody who wants a healthy economy wants more crime.
The same is true of corruption and the absence of security of contract. If we import Mexican-style corruption and insecurity to the United States, we degrade the economy of the United States.
We can put the matter starkly if a tad over-simplistically if we tell the libertarians that there is a reason why Mexico is Mexico and the U.S. is the U.S., and that there is a reason why people prefer to be here rather than there. In the long run (and maybe in the not-so-long run as well) the more we make the U.S. or regions of the U.S. more like Mexico, the less economic efficiency and health we will have in the U.S. That predicted increase in GDP itself can't go on forever in states that descend further into anarchy, crime, and corruption.
It isn't only public finances that will suffer in such a scenario but, of course, private finances as well.
So I think we can "speak the language" of the libertarians while making salient points about the immigration debate.
More broadly, open-borders libertarians are not the only contemporary advocates of the free market. It is unclear that in general the advocacy of free markets makes one blind to these longer-term considerations, especially given the considerations just raised.
On the other side, one can of course point to numerous blindnesses in those who favor immigration restriction but do _not_ tend to favor free market economics--blindnesses to important human goods. Hence, if there were some way (which would be quite artificial) to compare a distributist to an open-border libertarian, I'm not convinced that the distributist would come out ahead in terms of ideological clear-sightedness about important goods uberhaupt.
Titus, thanks for your clarification. It would seem to indicate that the contrast class would simply be those who aren't contemporary explicit advocates of the free market--either those who definitely take a contrary view or those who don't think much about the matter. So this would be somewhat similar to my first attempted interpretation.
It seems to me that you slip somewhat between "the desire for the acquisition of wealth" on the one hand and "wealth maximization" and, even more problematic, "wealth maximization as a principle goal."
I myself would certainly _not_ put those together. I'm happy to say in a rather vague sense that a desire for the acquisition of wealth is not per se bad and can have a lot of good effects in a country and an economy. For example, it can lead to entrepreneurship, to delayed gratification, to hard work, to the pursuit of excellence, and even (surprisingly enough) to honest business practices.
But I would _not_ advocate "adopting wealth maximization as a principle goal"--e.g., a principle goal of a person's life or a principle goal of human society or a principle goal of a family's existence.
Obviously, doing so could be quite problematic, not only for the reasons you cite but for others that are even more striking and pressing. Obviously, a pimp pursues wealth maximization by enslaving women. I've often said that some things ought not to be sold *at all*; hence, I don't think a young woman should be allowed to pursue wealth maximization by selling sex or selling her eggs.
In short, I agree that wealth maximization should not be one's main goal in life and that having it as such as a bad idea.
I'm not convinced that, say, free market think-tanks right now are saying that adopting wealth maximization as a life goal is a good idea.
Now, that said, I might myself be less exercised than you would be, Titus, about the fact that a developer buys up and demolishes a building full of irreplaceable architectural craftsmanship. This is partly because I'm quite concerned about the no free lunch principle. If the developer doesn't buy that property, then someone or other has to own it, maintain it, pay the property taxes, and keep it in its present state. Quite frankly, there are problems with in essence museum-izing lots of pieces of property and buildings. Someone has to pay for doing so, and it isn't clear to me that someone always _must_ or _should_ pay.
Right now our local large state university has defended itself, I think actually quite ably, for its intention of demolishing part of some historic buildings. The university points out that the various suggestions about not doing so have not come attached to practically feasible funding models for keeping the buildings. They do intend to keep the center portion of one building which they refer to as the "jewel in the crown," and they point out that the longer the partial demolition plans are delayed, the harder it is for them to continue to keep the central part of that one building from degrading. I found their arguments quite believable.
How often this is true I don't know, but there needs to be a strong element of economic realism brought into these discussions.
Perhaps you will consider this to be just an example of my own market-driven blindness, but then I would say that this just shows that it is indeed more profitable to discuss particular issues than to make sweeping criticisms of "capitalism" or what-not.
Let me add, regarding the beautiful vs. the functional: I think that when human beings are given the choice, what they will often do is clarify to themselves when they desire beauty and when they desire functionality. If they just want vegetables for dietary purposes, they'll buy the cheapest ones and forego the joys of gardening. If they want to dig their fingers into the earth, they'll go the inefficient route and grow their own tomatoes. There is a market for horses for beauty and for cars for getting as quickly as possible from point A to point B.
I think this is a good thing, not a bad thing. There's nothing wrong with allowing people to pay for ugly things, and if you have a really boom economy, people will also have the extra wealth to pay for beautiful things, which they sometimes do want to do.
I don't think most hobby craftsmen or painters who sell their beautiful wares fare especially well in a depressed economy. This goes back to the latter part of what I discussed in the main post.
Capitalism can be understood by some on the right as an enlightenment understanding of the economic sphere. I do not recall Adam Smith references God in Wealth of Nations. Some on the right, who are critics of capitalism, are mercantilist some are syndicalist.
Critics of free trade and relatively free borders and relaxed immigration include Patrick Buchanan. Buchanan is really a neo-mercantilist. He doubts the economic efficiency of free trade and open borders and thinks such a policy is destructive of healthy nationalism and community cohesion.
Underlying this slide into vagueness, is another one, one perpetrated by governments and finance- namely pretending all capital is equal, and in many cases just pretend that capital equals money.
Capital is different depending on whatever is it is the producer is producing. I think the word originally had something to do with cattle, but it should be readily apparent a steel mill and an oil rig are not interchangeable. Unfortunately, folks in and around D.C. do that everyday.
So, the simple observations of how people save, buy some sort of capital goods, and then produce something is lost and replaced legislative and accounting magic.
Ad Thomas's comments: I don't think it really matters whether Smith discusses God. One doesn't need to discuss God in every context, and it doesn't make any work "Godless" in some invidious sense because one doesn't happen to discuss God in that work. I've written plenty of things myself that don't mention God. :-)
On free trade: One point that seems rather ironic in all of this is that the same distributists who pine for a pre-industrial age are also to be seen as the fierce guardians of those very "soul-destroying" factory jobs that are now being shipped overseas. One is tempted to ask the agrarian minded why we aren't better off in our national ethos without such terrible industrial jobs. This irony has struck me from time to time, especially when the distributists and "crunchies" start making common cause with the anti-free traders in the name of keeping manufacturing jobs in the U.S.
More substantively, I myself wouldn't be inclined to define the term "capitalist" to mean inter alia "dogmatic defender of free trade among nations under all circumstances." But it is at least useful, as I've said already, to discuss specific issues, and if one says, "I'm talking about capitalism w.r.t. free trade," at least one's interlocutor may make the proper guess and understand one to be defining "capitalism" in such a way.
Myself, I have often found that the anti-free traders are dogmatic and narrow in their own focus.
I'm not dogmatically in favor of free trade in all circumstances and at all costs. However, I do utterly deplore the punitive approach of most anti-free traders, which perhaps I should call "mercantilists." They definitely seem to believe that companies are evil and are to be punished for outsourcing, and this I completely disagree with. And they make unseemly alliances with unions, which is a classic case of lying down with dogs and risking getting up with fleas.
I will take seriously the "mercantilists'" opposition to free trade on the day that they cut the ties with the AFL-CIO and start talking about loosening all manner of American laws that motivate companies to outsource. How about abolishing the NLRB and the minimum wage for starters? Or even just lowering the latter? How about giving special easements from enforced collective bargaining to companies that can show that they are employing all American workers? Let's see some carrot instead of all this stick. And let's stop demonizing the companies that are outsourcing and start recognizing that part of the problem might be here at home. How about a national right-to-work law? States, which don't have the luxury of levying tariffs against each other, have to think in these ways about bringing jobs in. (Michigan, for example, and Wisconsin.) It wouldn't hurt the feds to start thinking in the same terms.
But somehow the followers of Buchanan and other anti-free traders never seem willing to think that way. From which I conclude that Something Else is more important to them than bringing jobs back to the U.S.
The notable part of Thomas's comment is not that Adam Smith didn't mention God, but that modern capitalism is based on an Enlightenment understanding, not only of the economic sphere, but of human action. When it is recalled how anti-Christian (and specifically anti-Catholic) the Enlightenment was -- after all, what was the "light" needed for but to cast out the darkness of medieval religion, tradition, and morality? -- this aspect of the origins of modern capitalism should give its Christian supporters pause.
Well, NM, I published your comment, but I note one of the tendencies which I suggested in the main post that you (and those who agree with you) abandon: Substituting broad, sweeping history-of-ideas claims for detailed and specific criticism. Rather than saying, "This is what I disagree with that Adam Smith said" you just refer to him as being associated with the Englightenment and an "enlightenment view" and count on that to do the work.
That is _so_ typical. I cannot begin to say how typical it is. It really almost makes me willing to use a jargon term like "metanarrative." Half-done history of ideas becomes a substitute for substantive and specific criticism. The paleos do it. The distributists do it. The rad-trads do it. It's an addiction. It's like they can't help themselves. Labels stand in the place of argument _constantly_. Not just occasionally. Not just as a shorthand among friends. But all the time. It's like they don't have anything else.
Note that others in this thread have done a good deal better than that.
I happen to believe that ideas have consequences. Given that, I believe that etiology is important when discussing any system of this sort.
What I observe with defenders of capitalism is the opposite of that which you claim to find in its conservative detractors: namely, a marked tendency to avoid examining its philosophical and theological origins.
The problem is that you-all think gesturing in the direction of some origin is a substitute for other content. That's a really vitiating problem. It just won't do. The Enlightenment is like the little girl with the little curl: When she was good she was very very good, and when she was bad she was 'orrid. Whether we are talking about, say, Locke or Diderot makes a huge difference. The label is thus of very limited usefulness. You have to do more work than that.
And, no, that isn't an invitation to talk about whether John Locke wore horns and a tail. A different subject for a different day. I spent some time once taking on Christopher Ferrara on that subject on-line and found him less than impressive.
"The problem is that you-all think gesturing in the direction of some origin is a substitute for other content."
First of all, it's not just gesturing. The ideas are often thoroughly and concretely documented. Secondly, yes, it is a substitute -- a substitute for examining the leaves when it can be demonstrated that the problem lies in the roots.
Well, there y'go. You say it's a substitute; I say it isn't. I consider that to be a waste of time. Which has implications for what I'm interested in publishing here. Honestly, it would be good if you could at least see that the conversations with the others here were more worthwhile.
If you say so. With that I'll leave off, and simply refer you to Hirschman's The Passions and the Interests, Gregory's The Unintended Reformation, and Ferrara's The Church and the Libertarian, which although rather overly polemical imo, does contain thorough documentation, as do the others.
NM, I went and got Gregory's "Unintended Reformation" as an interlibrary loan, since my local library didn't carry it and I didn't want to buy the darn thing.
I was unable to finish the whole thing, but I read most of the first 5 chapters. I have to say that while I agreed with a lot of his specific particular points, his work suffers very, very badly from broad, sweeping generalizations. Maybe at the level he is trying to operate that's sort of inevitable. I suppose if you are trying to stake a claim about a 600-year stretch of history, you're going to make some generalizations. But he makes an art of it - not in a good way.
And, frankly, so far as he went in 5 chapters, he simply didn't convince me he has the right formulation of what happened. Yes, the Reformation was part of what happened, but so was the Counter-Reformation, and the scientific revolution, and the Renaissance, and gosh darn it the finding of the new world, which is no part of any of these thought-movements. There are historians who are convinced that the Industrial Revolution can be traced, quite definitely, to well before 1500. And there is no way you can explain modern capitalism without the Industrial Revolution. Also, the choice of Christian princes to ignore certain denunciations against usury while still in the late middle ages has a part. The utterly clear way that lending at interest bolstered economic growth in the 1400's and after was a spur to capitalism.
Not sure then how carefully you read him. I don't think he ignores the things you speak of, since he takes his initial cue from Hirschman, and the latter definitely does not ignore them, and in a small 130 page book, no less.
"I have to say that while I agreed with a lot of his specific particular points, his work suffers very, very badly from broad, sweeping generalizations."
I'd say that his generalizations are well-founded, given the documentation he provides -- 150 pages worth, if memory serves. What Gregory has done in effect is to take Weaver's argument in IHC, shift the onus from nominalism to "univocity of being," take the Reformation specifically into consideration, then flesh out the argument with reams of documentation.
But does Weaver get called out by conservatives for "broad sweeping generalizations"? Not that I know of. Perhaps only because he's not obviously or directly "tough" on capitalism per se? Critiques of capitalism seem to get the same knee jerk reaction on the right as critiques of sexual freedom do on the left, alas.
I don't in any way see what Tony just said as "knee-jerk." Very much to the contrary. The thing is, NM, that you really seem to see broad, sweeping, historical and ideological generalizations as a _virtue_. They strike you as profound insights. Some of us don't think the history of ideas is well-used that way.
By the way, I recently browsed some material from Allan Carlson, the agrarian. I found the ten minutes that I browsed (literally) showed him to be somewhat more reasonable than his defenders. For example, Carlson spontaneously made the point that modern technology is making working from home more possible than before, and he thought this a good thing and saw it as friendly to his own ideas.
I also found some interesting information on someone named Agar, an early 20th century writer whom Carlson characterizes as a distributist. My emphasis using asterisks:
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"Could the situation be reversed? Agar thought it possible that trends had gone too far in the wrong direction. “If Americans have come to believe that a wage is the same thing as freedom; if they prefer such a wage, with its appearance of security, to the obvious danger and responsibilities of ownership, then they cannot be saved from the servitude which awaits them.” Yet, he concluded that a *“redistribution of property”* could still be accomplished; this would be “the root of a real conservative policy for the United States.” The ownership of land, machine shop, store, or a share of “some necessarily huge machine” needed to become the normal thing, to set the moral tone for society. Such a system, though, was not in line with existing trends. *“It must be produced artificially,” Agar said, “and then guarded by favorable legislation.”*
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Wow, when I refer to "redistribution" as an obvious prerequisite for these kinds of economic policies, I'm told I'm straw-manning. If I were to say that they must be produced artificially and guarded by legislation, I would be excoriated as "not understanding." But Agar puts it right out there in black and white. He also admits that part of the "problem," from his perspective, is that perhaps a lot of people actually *prefer* working for a wage rather than owning a business or a farm. At least he's honest.
I did not mean to imply that Tony was a knee-jerk defender. Actually, he's quite reasonable.
As for Agar, it's important to note that at the time he was writing the term "redistribution" didn't have the Marxist/socialist connotation it has picked up since then. Also, he is calling for such redistribution specifically as it touches on property, not on "wealth." Distributism is based on widespread ownership of productive property, not on a levelling ownership of wealth.
"The thing is, NM, that you really seem to see broad, sweeping, historical and ideological generalizations as a _virtue_."
And you seem to see any history of ideas argument that is presented by opponents as "broad and sweeping." It's a way to dismiss the argument without dealing with it. Deem it that and it can be dismissed w/o consideration.
Agar was writing in the 1930's!!! It's incredible that anyone would say that the term "redistribution" has somehow acquired "Marxist" implications since the 1930's that it didn't have then. I mean, say what??? The 1930's were a huge time for Marxism.
But it doesn't really matter. The term has a perfectly straightforward meaning, and I have no doubt that Agar meant it quite clearly. And he also used the word "artificial." It couldn't be much clearer. Nor am I leaping with joy over redistribution of property as opposed to redistribution of income. That's not the kind of thing about which one says, "Whew! Okay, well, that's all right, then."
For more on Herbert Agar, see the intro by Edward Shapiro in the ISI reprint of the Tate/Agar edited Who Owns America? and also Agar's own essay in that symposium.
Permit me to respond, somewhat tardily, solely to Lydia's response to my initial comment. I haven't had and don't have time to engage everyone else.
My comment was not primarily a comment about the way markets or regulatory schemes ought to work. So I am not proposing, at least not here, an alternative system of regulating economic behavior. Rather, my criticism is directed at the social pedagogical effect of capitalism's thesis about human conduct. Telling everyone "if we are all greedy enough, it will all turn out right" is not a recipe for a flourishing society, even if it is a recipe (for some period or other) for a wealthy one.
The issue is not what sort of laws we should have to prevent people from behaving like barbarians. The issue is what is wrong with the story we tell ourselves about human flourishing that results in widespread acceptance of barbarism.
Well, Titus, I'm going to call you on the personification.
*Who*, specifically, actually teaches or believes something quite so crude as "If we all are greedy enough, it will all turn out right"?
I think you'd have to admit in fairness that that sounds rather like a caricature on its face.
I'm not going to assert that no one has ever believed this. People do believe lots of tom-fool things.
But it does not, to my mind, characterize what most Americans believe, nor what most American businessmen believe, nor even what many who run think thanks on the subject of the free market believe. It's something of a cliche, but only because it's true, that America is an extremely generous nation. A great many people who make lots of money, and even a great many people who make only a modest amount of money, consider themselves obligated to give to charity and to be philanthropic.
Or consider the fact that free market think tanks devote a fair amount of brain power and a fair number of pixels to questions of policy surrounding poverty. When they say that (e.g.) the minimum wage or prevailing wage laws hurt the poor, they say it because they really believe it, and for specific reasons concerning economics and policy, not because they believe some other wildly exaggerated proposition that "if we are all greedy enough, everything will turn out all right."
Add in on top of that the effect of a kind of fusionism held by many pro-free market conservatives, a position that supports simply proscribing some ways of making money altogether. E.g. Laws against pornography, drug pushing, prostitution, selling organs. There are a great many people who are pro-free market but who take the position I've often sketched to the effect that what _should_ be sold should be sold on a free market, but that there are things which should not be sold at all. This is an entirely logical position and is quite far from the belief that "if we're all just greedy enough, everything will turn out all right."
Remember, finally, that Thomas Sowell referred to his own economic position as "the tragic vision." This is hardly a Pollyannish worldview. On the contrary, advocates of the free market very often emphasize limitation, tradeoffs, and the fact that there is no free lunch. They reject slogans like "eliminating poverty" or "solving the problem of X." So they know quite well that everything _won't_ turn out all right! Indeed, that is one of the lessons they are here to teach. There are no solutions, and everything has a cost.
~~*Who*, specifically, actually teaches or believes something quite so crude as "If we all are greedy enough, it will all turn out right"?~~
Ever hear of Mandeville's Fable of the Bees? The idea that out of "private vices" can be reaped "public benefits?" Hirschman, Brad Gregory, the Skidelsky's, and others have shown how the sin of avarice was over time transformed into the virtue of self-interest. Titus's formulation of the thing is not a caricature but a blunt cut-to-the-chase.
NM, I doubt (forgive me) if you are the best person to decide what is and isn't a caricature. It would be nice if you could at least admit that Titus's formulation sure as heck *sounds* like a caricature, aka a strawman.
I'm certainly not going to go to the mat for Mandeville, who was no friend to Christianity, but the extremely broad ideas that what *might be regarded as* private vices (in an age or to people who regard the desire for money per se as a vice) can bring about public benefits is not necessarily false. More to the point here, it does not follow from that extremely broad idea that if we're all greedy enough, all will turn out well! Which is, to put it mildly, a much stronger statement.
In any event, I doubt that someone like, say, Jay Richards, author of _Money, Greed, and God_ would say that "If we're all greedy enough, everything will come right."
Let me also add that acting out of a motive that is neither noble nor altruistic is not necessarily the same thing as a "vice." Presumably critics of capitalism would not say that one is encouraging vice if one has laws against stealing! Yet one is encouraging people to refrain from stealing for, inter alia, a less-than-noble motive--namely, the fear of punishment.
Now, suppose that a businessman is honest with his customer partly out of fear of getting a bad reputation and losing future earnings. To hear the critics of capitalism talk, one would think that (to use a Calvinist term) such good actions actually "have the character of sin" because the honesty is not entirely held to for its own sake, because self-interest enters in as a motive at all. Yet one never hears them saying that laws against dishonest advertising encourage actions which are "vices" or "have the character of sin." Yet the same reasoning could apply! If someone is honest in advertising because there is a law against deception, if this is even _partly_ his motive, then he is not embracing honesty for its own sake! Yet it would be unreasonable to say that such honesty is "vice." By the same token, then, a desire to keep a good customer and hence to make more earnings is also not an instance of "vice."
Lydia, I think that there are some economists who do quite say that Adam Smith's thesis rested on the notion that impersonal "larger forces" actually employ the greed (or at least entirely self-regarding self-interest) in order to achieve the whole ordering of the market, so that there is no reason to pursue (for economics) the question of choices made not in self-interest. I am going to put up a post at What's Wrong With the World on "Redeeming Economics" by John D. Mueller, who makes something pretty close to that comment. Mueller thinks Smith is completely wrong in saying that, so part of his point is so make a counter-claim to the greedy thesis.
Also, he is calling for such redistribution specifically as it touches on property, not on "wealth." Distributism is based on widespread ownership of productive property, not on a levelling ownership of wealth.
Nice, I really don't think that this speaks to Lydia's concern at all. Or mine. We are not concerned solely with liberal "redistribution" schemes that take money out of the hands of the "haves" to put it in the hands of "have nots." The concern we have is for something even MORE dangerous: forcibly taking ALL FORMS of wealth-producing property and deciding who gets to own it and how much.
Based on his words It must be produced artificially," here is what I am imagining: the little Mom-N-Pop restaurant is left alone. My uncle's restaurant that employs 50 (many being part time students: dishwashers, bus boys) is almost too big a business, but is just put on notice. The hotel down the street (not a chain) with restaurant and conference rooms is *too darn big*, and is split up. Never mind that it can no longer function split up, the whole reason it WORKED was that it was big enough for conventions with 600 attendees, 300 staying in the hotel. Never mind that under this regime there is no possible way to have a conference indoors with 1000 people in attendance.
Same with farming: the family farm is fine. The vineyard-winery up on the hill, which employs 50 people between growers and wine-makers, is almost too big, but not quite. The immensely successful wine maker with his winery / restaurant, who employs 200, and has converted 2 local farms into grape production so that he can (eventually) pass along part of his property to his son, no THAT winery is too big an operation, it has to be split up. Never mind that it was going to be split up in 15 years, never mind that the whole reason the wine maker intentionally got bigger was for family reasons. See, it doesn't matter WHY you want to grow, being big is baaaaaad
Part of the problem of deciding, at the government / legislative level of artificial mandate / force, that "people" need to own their own property and that large property owners should be forced to split it up is that it can't possibly be a one time thing. Every time someone is successful, and grows, and swallows up competition because he is just plain better at it, you knock him down to size by taking away his property and giving it to someone else, someone who VIRTUALLY BY DEFINITION cannot be expected to use that productive property to equal effect. You damn competitive excellence and reward mediocrity. Which is a sure way to get eventually ever less quality.
But the deeper problem with doing so is the inherent repudiation of the meaning of private property. Since there is no fundamental limit to property ownership (in terms of size) in either the nature of the human relationship to "stuff", nor is there one in any of normative positive legal structurings of ownership of stuff, the only possible way to take stuff away by mandate from people deemed to simply "have too much" is to repudiate nature and custom. It can't be done under the dictates of natural law, and it isn't any form of Christianity I have ever heard of.
If a distributist cares to propose voluntary ways of getting to having (almost) everyone own productive property, I am all ears. I think that's a very laudable goal and support the objective. It's the pathway from here to there I have problems with.
Tony, you discuss this thesis:
"impersonal "larger forces" actually employ the greed (or at least entirely self-regarding self-interest) in order to achieve the whole ordering of the market, so that there is no reason to pursue (for economics) the question of choices made not in self-interest."
That's an interesting thesis, and I think you'll see that it's a good deal more nuanced than the statement that "If we are all just greedy enough, everything will turn out right." For one thing, the above statement contains no promise that everything will turn out right! Ill fortune, tragedy, sickness, and so forth are not expected to be abolished by these "impersonal forces," though one might expect that their effects will be somewhat mitigated in a more prosperous society (which we do in fact find to be true, again and again).
Second, the above statement contains no idea that an increase in greed is per se a good thing, so that we should, in a sense, try to be greedier to make sure that things turn out right. Even setting aside for a moment (but only for a moment) the distinction between greed and self-interest, the above statement doesn't say that there is some sort of monotonic function that always and everywhere maps increases in self-interest to increases in good outcomes. Yet that would be implied by the simplistic version I've been rejecting. Nor does it urge us to increase our self-interest as an end in itself, which, again, is implied by the straw-man.
Now, even the more nuanced formulation has a flaw inasmuch as the second part doesn't follow from the first. Even if self-interest can work invisibly to the common good, it doesn't follow that there is _no_ place in economics for considering choices made for reasons other than self-interest. If nothing else, a merchant may wish to sell things to people who are not simply thinking in terms of self-interest! You will have customers who want to buy things for their beloved children, for example, or seek a good education or good child care. So a good economist will consider the range of human motives to be relevant, and that range of motives of course includes things both better and worse than self-interest.
Finally, I do in fact shake my head over the all-too-common slide between greed and self-interest. Self-interest is a broader term that can include higher desires--e.g., a person who goes on a tobacco cessation program or even a diet can be said to be acting out of self-interest but not out of greed. For that matter, a person who seeks the beatific vision can be said to be acting out of self-interest! We get into the whole difference here between hedonism and eudaemonia here.
Tony's comments on the Agarian (pun intended) proposal to redistribute property artificially are excellent. In particular, this cannot be said too often:
"Part of the problem of deciding, at the government / legislative level of artificial mandate / force, that "people" need to own their own property and that large property owners should be forced to split it up is that it can't possibly be a one time thing. Every time someone is successful, and grows, and swallows up competition because he is just plain better at it, you knock him down to size by taking away his property and giving it to someone else, someone who VIRTUALLY BY DEFINITION cannot be expected to use that productive property to equal effect. You damn competitive excellence and reward mediocrity. Which is a sure way to get eventually ever less quality."
This is also excellent:
"the only possible way to take stuff away by mandate from people deemed to simply "have too much" is to repudiate nature and custom."
Finally, as far as the goal of having everyone or almost everyone owning productive property, unlike Tony, I'm more ambivalent about that goal itself. It does not instantaneously strike me as making the world a better place. It seems to depend on so many things. I can think of a lot of people who, it seems to me, are just going to be better off in all sorts of ways (I don't mean only materially) if they do not own economically productive property. Of course they will be happiest if they have interests and hobbies, but these need not bring in any income to contribute to human happiness. I cast my mind not only over my own friends and acquaintances but even over English literature, and I have no difficulty in thinking of individuals who don't at all need to own productive property in order to have happiness and well-being. If nothing else, think of all the housewives (as a non-feminist I can use that phrase) whose concern need not be making money but rather caring for their own family's needs. It's quite a stretch to say that they are definitely better off if they and their husbands are self-employed to any significant extent. It seems like such an arbitrary claim that its claims to truth are simply not evident by the natural light.
Now, I certainly would say that the bars to small business, entrepreneurship, and self-employment in the United States are ridiculous. These are largely caused by regulation. Quite frankly, I do not yet definitely see the distributist (the distributist's protestations to the contrary notwithstanding) as being "on the side of the angels" when it comes to slashing and sweeping reforms in making entrepreneurship and business entry more possible and more attractive. From what I have seen, there are tensions among the different priorities of distributism itself that tend to vitiate the accomplishment of the goal of making it easier for people to start up businesses and own productive property.
A possibly needed clarification: I do think that a great many people, perhaps even a majority of people, have talents and/or resources which they will at some point in their lives want to exchange with others for money. This might just be one woman tutoring another person's child for an hour a week. It might be kids running a lemonade stand or teenagers babysitting. It might be yard work. It might be selling some sort of crafty thing that one makes.
In general, it seems to me unlikely that most people will make any substantial percentage of their living in these ways. What I _do_ see as a laudable and important goal is the loosening of the government stranglehold over this, so that if one makes $400 or more in a year at it, one is counted as having a "business" and being subject to large taxes (esp. social security or "self-employment" tax) and other possible regulations. I would love to see the free flow of on-the-side money-making greatly opened up. If one wishes to speak of that extremely broad concept as "productive property," so that it includes the hard-working young man's ownership of a leaf blower or the crafty mom's ownership of the a sewing machine for making some money on the side for extra expenditures or even just a person's brains that allow him to teach chess lessons or tutor struggling math students, then, yes, I do think it's a laudable goal for large swathes of the population to be _freed_ to use that sort of "productive property." I also think it would be good for the economy. But it isn't going to lead to the kind of radical self-support and independence that distributists are usually demanding. It's largely going to be a little bit here and a little bit there, contributing to people's spending money, their free exchange, their sense of connectedness with the community around them, their joy of living, and their sense that working hard really does bring rewards.
"Finally, I do in fact shake my head over the all-too-common slide between greed and self-interest. Self-interest is a broader term that can include higher desires"
See Hirschman on this. Avarice came to be included under the banner of "interest" only after it was recast as "self-interest." It was never seen as honorable to be avaricious, but if avarice could be reclassified and thus softened to "self-interest," then there's not as much of a problem. The term "interest" came to have a different meaning than originally understood.
Eventually you get to Mises, who argues that all human activity is based on self-interest, which in effect denies the place of the virtues.
In short, you make one of the deadly sins into a virtue and you end up with all sorts of nonsense.
Well, NM, good luck defining and tabulating "avarice" in such a way that it can be distinguished from the outside from legitimate self-interest or even seeking the interest of others.
The problem isn't that you think there is such a thing as avarice. The problem is that you want to make such a notion of the "wrong motive" part of what informs policy.
In any event, my point was that any smart capitalist knows that a) self-interest somewhat narrowly defined is not the only thing informing the market (see my comments above on doing things for your children) and b) self-interest isn't the same thing as avarice (see my comments on doing things that really are good for oneself but are not greedy).
Finally, I do in fact shake my head over the all-too-common slide between greed and self-interest. Self-interest is a broader term that can include higher desires"
There is no doubt that self-interest is broader in principle than greed. That is why, in part, I tried to clarify it by this:
entirely self-regarding self-interest
My intent was to refer to that kind of self-interest that is *wholly* absorptive and does not extend outwards in any sense. One of the ways that humans act is out of love for spouse or child or friend. Even though the friend is in some sense "another self", it is only partially so, and acting on behalf of your child cannot be called acting out of an "entirely self-regarding self-interest."
Self-interest cannot be turned into avarice without failing to make distinctions. Of course the Evil One is bent on confusing language so we mistake avarice for something that is not evil, he is the father of lies. The fact that many fall to his confusing snares doesn't mean that using the term "self-interest" WITH the proper distinctions is playing to his purpose.
Finally, as far as the goal of having everyone or almost everyone owning productive property, unlike Tony, I'm more ambivalent about that goal itself. It does not instantaneously strike me as making the world a better place. It seems to depend on so many things. I can think of a lot of people who, it seems to me, are just going to be better off in all sorts of ways (I don't mean only materially) if they do not own economically productive property.
Well, I didn't intend to suggest that it should be 100% or even 95%, more like that it would be the majority and the more the better, all other things being equal. But over the years I have tempered my outlook on what is reasonably suited to various types of people, and I have been more cautious about thinking that "everyone" ought to participate in the ownership of their own productive property - at least not property they manage themselves.
On the other hand: (1) virtually anyone can own stock, without truly troublesome burdens thereon. (2) There is some basis for thinking of even a home as "productive property", of a sort. Well, it is obvious that it is when it is being rented out by a landlord, of course. But I mean in a more general sense: if everyone has the choice of renting a place or owning one, by and large one of the factors that makes owning more attractive is the "productive" possibility of it: If you maintain it and add value to it, you can turn a profit off it should you ever need to. That is not by any means the principle reason to own, but it folds in with the main reason, which is that a man's home is his castle - except not so much if it is someone else's castle, and one of the reasons there will always be demand for homes is that castle reality.
The house can be viewed as "productive property" in a secondary sense, a sense that is less obvious these days but is still valid. The home is the place in which the family members are made ready and capable of being more productive in the marketplace. This is true in simple ways as well as complex ones: home is where you get a good night's sleep to begin again tomorrow. (This goes for recreation, and also for study, and other ways). But also, home is where the kids are raised, hopefully raised well enough to participate profitably in the market themselves. If preparation for market participation happens better in an owned home than in a rental, then the owned home is "producing" something of a sort. And home is also where you plan and maybe even take the first steps of new business projects, maybe a lawn service or a crafting no-longer-hobby. Home is where you work on your car yourself so you don't have to spend money at the mechanic's - a market proposition. Home (as opposed to an apartment) is where you paint the walls yourself instead of having them done - again, productive activity (whether putting direct profit into the wallet or not).
I think if you define "productive property" in that extremely broad way to include, e.g., owning a home, I would agree that it's good for it to be very widespread. On the other hand, that widespread-ness is very much what we already see in the United States, which has favored home ownership (perhaps almost too much, leading to the government demand for easy credit for credit-unworthy borrowers and the housing market meltdown) for quite a few decades. It's quite clear that the distributists are not satisfied and will not be satisfied with widespread home ownership. They speak often of the alleged servitude of earning a wage rather than being self-employed, so that is evidently the target. And that's even setting aside the tendency to be unsatisfied with web-based or other technology based businesses that leave one "dependent on the grid." I take the latter to be a hard-core form that is by no means to be attributed to all or most distributists. But home ownership by itself, without being self-employed, just ain't gonna cut it.
Now, on self-regarding self-interest, that was why I used examples such as going on a diet or a tobacco cessation program. *Even there*, there are plenty of things that are "big business" that are based on a kind of self-directed self-interest, being concerned with one's _own_ individual best interests, but that couldn't be described as greed or avarice. Plenty of people "want stuff" for the purposes of improving themselves. It might be exercise or diet related products or self-help books. This type of self-regarding self-interest can become unhealthy or obsessive, but it isn't greed or avarice. It's just a different thing. And it can in fact be good and healthy.
It seems to me that there are too many substantial disagreements here to make continued discussion productive. I believe that capitalism has an inherent, dangerous flaw, you do not. I believe that large corporate activity is just as dangerous to religion, tradition and morals as government activity, you do not. I believe consumerism and materialism are directly related to finance capitalism, you do not. And so on.
In retrospect I must admit that it took several years and lots of reading to convert me from my previous "neo-con" position to where I am now, so it's rather unrealistic to think that much fruit would come from a combox discussion, however lengthy.
This reminds me of another debate that I used to enter into energetically, the sola scriptura debate. Lots of heat, not much light. I now stay out of those completely.
NM, I admit that I'm flipping a coin a bit as to whether to publish comments of yours that say, "We just disagree too much." As you know, I left one unpublished, not because it was in any way abusive but because I think such comments are boring to other readers. At W4, where there is no moderation, the thread can get very cluttered, and in fact I think that this thread has been a lot less "full of heat" precisely because I have tried to keep all comments contentful rather than off-the-cuff or meta-level--comments on the state of the debate or what-not. It's good discipline for me as well.
I published this one because it gives me an opportunity to say one thing that we are probably in agreement about or should be in agreement about, which I may put a separate post up about here if I get time: That is, debt and inflation. My guess is that this is the place where the libertarian-inclined people like myself can really start agreeing with the distributists like you. Government-enabled debt and inflation are, in my opinion, the causes of many of the abuses that you attribute to "capitalism" or "finance capitalism." The libertarian insight that there is no such thing as a free lunch is continually being undermined in people's minds by the _appearance_ of something-from-nothing that is given by continually kicking the can down the road in terms of both personal and national debt. Bailouts, funded by further deficits, fuel this impression that the piper never has to be paid. And all of this allows irresponsible use of the market, which then gets blamed on "capitalism" or "big capitalism" or "corporate capitalism" or what-not by the detractors of capitalism generally. In point of fact, if the government would let the so-called banksters or the big companies sink or swim, they would get an important reality check and would have to behave much more responsibly and, arguably, more ethically. This is, from a really rampaging libertarian perspective, government enabling which is a distortion of the market and not its proper and natural operation.
So there, I guess I sort of wrote my post already, but that is my olive branch.
We distributist/agrarian types would be equally concerned about the debt problem, but I at least would see increased debt as a feature of modern capitalism. The agrarians of the 20s and 30s were concerned about the expansion of the "installment plan," and the tendency for people of that time to acquire unnecessary debt by financing such things as autos, furniture and appliances, things that they couldn't really afford, but were made to look affordable because of easy credit.
Likewise, Wendell Berry discusses how the understanding of the mortgage changed in the farming community under the pressure of business-oriented farming from both the government and agricultural companies. Mortgages went from being seen as a negative, a debt to get out from under, to a positive, a method of growing one's business by continuous borrowing. You didn't have a mortgage-burning party anymore, you went to the lender and got a bigger one.
It also seems that consumerism and advertising both tie into this, in that we are constantly encouraged to buy what is bigger, better and faster, and that all this stuff is given the illusion of affordability by easy credit.
Now I can definitely agree that part of the blame lies at the feet of the government, which endlessly kicks the can down the road as you put it. But these things are also encouraged by big business: where, after all, would Sears be without the Sears Card? What would happen to the economy if people stopped buying things on credit? I'd say consumer debt of this sort is vital to the current consumerist economy.
I'm sure many businessmen like the consumer debt culture, but I think everyone would like it less if everyone really had to pay their debts. Reality would have much more of a chance to kick in. Remember that it's the Keynesians who believe that the economy is drive by consumer demand. We supply-siders have never been in favor of encouraging feverish and debt-ridden consumer spending. In fact, I've found it again and again and again that critics of capitalism actually turn out to be criticizing Keynesian economics (I call it "demand side economics") and calling that capitalism! It may be that a lot of businessmen, like a lot of non-businessmen and a lot of consumers, have bought into pure Keynesianism, but some of us are here like Cassandra warning that it is not sustainable. The debt gets packaged up and multiplied and passed up the food chain and finally the ol' "lender of last resort" and for that matter all-powerful "borrower," Uncle Sam, bails us all out by mortgaging our future generations. This cannot go on forever. To the extent that a previously overheated consumer bubble was based ultimately on deficits, it was doomed to make the fall bigger when it finally came, and no knuckle-dragging Austrian type would endorse it.
That's true to some extent about today's capitalism, but remember that the original agrarians and distributists were writing well before Keynesian economics came to rule the day.
Ah, well, then, maybe my olive branch wouldn't be as relevant to them. :-)
Probably not, but their critique still makes a fair amount of sense when adjusted for time.
I put this up at W4 as well. I think it addresses some of the things that Titus expressed concerns about.
http://www.kirkcenter.org/index.php/bookman/article/crowding-out-virtues/
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