Thursday, April 19, 2012


Well, as long as I'm posting long, vaguely political rants, I might as well get all of this off of my chest as well.

There was a time in Western history when a subjugated people in Europe had fallen under a feudal socio-economic system wherein all property belonged to competing royalties, and the workers were allowed to farm the land or to work their trade only at the pleasure of the king, baron or lord who ruled over them.  In exchange for some modicum of protection from the ravages of the competing kingdoms, the people labored away in the fields, sweated over a blacksmith's stove, or charged off to war, while worshiping in the manner prescribed by the ruling monarchs who owned all that they could control.  To put it in Marxist terms, the means of production were owned by the monarchy.

However, just before the time of the Renaissance, several intellectual and economic factors began to give rise to the emergence of a merchant class in Europe that traded freely among the different kingdoms and was not necessarily beholden to any one ruler.  The merchants had to be careful to obey the law of the land they were on and to pay the required tribute when it was demanded, but they were otherwise free relative to the serfs and soldiers.  This idea caught on and as the medieval age ended, the means of production increasingly came to be shared by not only the merchants, but by the farmers and laborers as well.  The nobles and the aristocrats still demanded tribute and felt entitled to be supported by the people, and the people at least for a while went along with this notion, but this new system evolved into something like capitalism as we would recognize it today.

The American Revolution wasn't fought, as some would have you believe, merely to avoid having to pay taxes, but was fought more essentially to free the people from the tyranny of foreign kings and monarchs.  The founding fathers recognized that all people are created equal and this egalitarian spirit still defines much of the American character.  For the first time in modern history, a Western people were free from the yoke of a royal aristocracy, the means of production were owned by individuals and not by kings or lords, and free-market capitalism was allowed to flourish. I'm not sure if, had they existed at the time, the founding fathers wouldn't have turned their revolutionary furor against a moneyed elite after they had rid themselves of a monarchy.  I suspect the founding fathers would have been more sympathetic to the Occupy Wall Street movement than to the modern Tea Party.  

As it turns out, unimpeded capitalism is a winner-takes-all system, and those who have acquired some wealth are in an advantageous position to acquire still more.  Within a half-century or so of the revolution, the means of production, the farms and the factories, the railroads and the phone lines, were essentially owned by a millionaire elite.  The workers were free to sell their labor to the factory owners for wages, but the owners got to set the rules, establish the hours and the wages, and maintain the working conditions.  Farmers could pay to work the fields and try to turn a profit, but the markets were fixed.  The system was still essentially capitalistic, but most of the population, the workers, the farmers, and the merchants, found themselves back in a position similar to that of the Old World.  It's particularly telling that the new millionaire elite were often given titles like "Steel Barons" "Rail Barons," and "Land Barons," or "Lords of Industry" and "Lords of Wall Street."  In the absence of regulation, the royalty were back.

In order to level the playing field again and return to an egalitarian norm, it was necessary for the government to intervene and break up the monopolies that had formed.  Trust-busting and regulation of commerce became an essential function of the government, keeping the marketplace healthy and continuing to allow equal opportunity for all.  This governmental regulation can be termed "socialism," but instead of being the opposite of capitalism, socialism is actually the antidote to the accumulation of too much wealth in the hands of too few.  It is the necessary medicine that keeps the free market free.

By busting up trusts and monopolies, socialism encourages competition in the market.  There was a time not too long ago when there was essentially only one nationwide telephone company.  Long-distance calling was prohibitively expensive, and there was no incentive for any real innovation. If the government hadn't intervened and broken up Bell Telephone, we wouldn't have the cell phones, iPhones, and smart phones of today.  We wouldn't have had cheap transmission of voices and data.  We probably wouldn't have had an internet, at least as we know it now.  Breaking up one monolithic company into separate entities fosters competition and fosters innovation, and is what made America the technological leader that it is.

Not that the moneyed elite all saw it that way.  Those without competition do not necessarily welcome the opportunity to compete.  Much of the century between roughly 1850 and 1950 was marked by violent labor disputes wherein the rich hired Pinkertons to beat up Wobblies, by political cronyism and corruption, and by well-orchestrated propaganda campaigns to frighten voters away from socialist policies and candidates supportive of socialist agendas.  In fact, the latter was so effective, that the very term "socialism" is now almost exclusively used in a derogatory sense, and in may circles an idea can be pretty effectively dismissed merely by labeling it as "socialist."  But this way of thinking is not really pro-capitalist when one looks at the big picture, it's the desperate attempt of the moneyed elite to keep the means of production in the hands of the new aristocracy. It's a return to feudalism.

In some countries where socialism wasn't applied to the economy, it was decided that a better path might be to put the means of production directly into the hands of the collective people, "The People" represented in this case by the government.  Under this system, communism, the means of production are owned by the government.  The obvious lesson from history is that under communism, the government simply became the new monarchy, and worse, had complete control of the military and police to enforce its will (totalitarianism).

My point is this:  in order to maintain a system of free markets and equal opportunity for all, to escape the feudal system of medieval times, it's necessary and appropriate to apply some degree of socialist measures to the economy.  Without socialism, capitalism reverts back to feudal rule by moneyed aristocracies.  In this way of thinking, communism is not an extreme form of socialism, it's just another variety of feudalism, the same problem from which capitalism emerged as the solution.  In this way of thinking, "capitalism" is merely the ideal that the means of production should be in the hands of as many individuals as possible, while "socialism" and "deregulation" are twin tools to be applied to capitalism to keep it functioning.

Deregulation can be seen in this light as the healthy and necessary response to too much government intervention.  At some point, it has to be recognized that farmers know how to grow crops and manage the fields better than bureaucrats, and that the market needs some room and relief from pressure to grow organically.  When looked at this way, much of the political debate over the past half-century or so can be seen as opposing ideologies of socialism and deregulation, but both in the interest of promoting capitalism.  When there's too much concentration of wealth, a little socialism is necessary.  When there's too much interference in the market by the government, a little deregulation is necessary.  

This way of thinking makes the current shrillness in the political debate appear most unnecessary.  The tension is not between "real Americans" yearning to be free of excessive over-regulation and "vile, anti-American" forces trying to impose a Marxist-Leninist system of government, its closer to the equivalent of one group wanting to apply the brakes while another wants to step on the gas, but all in agreement that the vehicle needs to be driven (I'll let you decide which side is which in that analogy).  But the hostility and divisiveness in the debate is threatening to run the vehicle off a cliff, if you will.

In my humble opinion, the economic data is pretty compelling that more wealth is now in fewer hands than at any time in recent history, and that we need the government to engage in some trust-busting and opening up of the market for some more competition and innovation. The push-back seems to be coming from the moneyed elite who happen to like owning the concentration of wealth.  But I also recognize that the economy is also large and complex enough that there are also and at the same time some segments of the market right now that can benefit from a little deregulation.  

Not that I expect anyone to see things my way, but I would welcome a discussion in these terms.

1 comment:

misslesley said...

"a bunch of mindless jerks who will be the first against the wall when the revolution comes" Douglas Adams, Hitchhiker's Guide to the Galaxy