Nothing wrong with capitalism, the capitalists are the problem

In March 1964, a group including Linus Pauling, Gunnar Myrdal, Tom Hayden, Ben B. Seligmanm and computer pioneer Louis Fein sent a letter to President Lyndon Johnson covering their report on “The Triple Revolution.” The letter began: “We enclose a memorandum... prepared out of a feeling of foreboding about the nation's future. The men and women whose names are signed to it think that neither Americans nor their leaders are aware of the magnitude and acceleration of the changes going on around them. These changes, economic, military, and social, comprise The Triple Revolution. We believe that these changes will compel, in the very near future and whether we like it or not, public measures that move radically beyond any steps now proposed or contemplated.” They were right about the changes but underestimated our ability to drift towards the iceberg most would not see until much later.

The three revolutions were in cybernation, weaponry and human rights. The nuclear and other new weapon systems threatened peace. The African American struggle for equal rights in the US was part of the rising demand around the globe for full human rights. But the report focused on the affects of the cybernation revolution (their term). The combination of the computer and automation was issuing in a new mode of production as different from the industrial as that was from the agricultural. It would result in “almost unlimited productive capacity which requires progressively less human labor.” Yet the current economic model awarded access to this production, to the wealth it created, unequally to those with capital and those who earned their keep through labor. The cybernation of production would mean increasingly less of good paying industrial jobs. The US was experiencing this process first but it would spread throughout the world we dominated.

The report argued that having access to the collectively produced wealth of society could not any longer be tied to labor. Maintaining and improving individual wellbeing across society – through making maximum use of the potential of automated production – would have to transition from depending on good paying jobs. Income would have to be separated from work. This would require some form of guaranteed individual income and vast investment in public goods. Left to itself, the market would not move in this direction, it would require government action.

As it turned out, capital figured out a way to exploit the new cybernetic economy by shifting production to automation (and now AI) and to areas of cheap labor. Some developing countries – like China – followed suit using their cheap labor to industrialize. This form of globalization produced cheaper goods and did lift many from poverty, worldwide. But it mostly benefited capital rather than labor.

The Western democracies did little to ensure the political sustainability of free trade globalism. This would have required providing those reduced to un- and under-employment or low-paying service sector jobs with the decent income and public goods (including improved education, free healthcare and jobs created through spending on updating infrastructure) that we could have begun 60 years ago. The Western European democracies did a bit better than the US with their social welfare programs but still found themselves in this 21st Century facing the political drift to the right fueled by those left out of the wealth creation.

In the US, we got Trump and his MAGA movement. This virulent form of the anti-globalism reaction has plunged the world into Trump’s tariff war on the very foundations of the world capitalist order.

Nothing wrong with capitalism, indeed there seems to be no good alternative to markets coordinating supply and demand. Free trade to maximize market functioning is part of this (with some measures perhaps needed to ensure fair trade). The World Trade Organization could expand its trade liberalization agenda to include mandates to improve local living standards alongside fair labor standards. Rather than make war on the system of rule-based trade that we have benefited from, the US government would encourage foreign investment in our productive sector as part of a rational approach to whatever re-industrialization makes sense. (This could include China.)

The monopoly capitalists at the top of our cybernetic economy are the problem. They need to be taxed at levels considerably greater than their workers. Their ability to wield political power through money needs to be ended. Government must be empowered to ensure that everyone benefits from market functioning even if this means a form of guaranteed minimum individual income. The Democrats need to do more than wait for Trump to fail. Railing against the billionaires must be accompanied by explaining the need for change and advocating the policies laid out in that report to Johnson.

Freud and Plato - The Politics of the Soul (Pt 1)

Freud -- with Marx, Darwin and Einstein -- ranks among the intellectual fathers of the 20th Century.  The core concepts of Freudian psychoanalysis still pervade Western society.  We talk about the meaning of dreams, make "Freudian" slips, appreciate the power of unconscious desires and accept the influence of childhood experiences on the adult.  However, Freud’s relevance for the 21st Century lies more in his call for a renovation of human consciousness.  Freud's concern with the health of the soul and the support he sought to give to reason and intellect places him in a dialogue with Plato and gives psychoanalysis roots deep in Western culture.  Both Freud and Plato practiced statecraft of the soul, reforming the “inner city” that determines individual and collective character.  Both attempted to help the individual gain control over desire through establishing proper order among the parts of the soul.

As we move through these first years of the new millennium, it sometimes appears that the world has become too large, too complex and more dangerous and inhospitable every day.  We seem beset by nightmares: terrorism, fanaticism, fascism, communism, tribalism, nationalism, racism and the other -isms that have prevented us, as individuals and as societies, from thinking clearly and acting with humanity.  We paid dearly for these nightmares in the 20th century and the end is nowhere in sight.  We feel increasingly challenged to preserve a minimum sense of security and well being in the midst of the planet-wide struggle of billions of others to do the same.  In this struggle, our political systems -- the governments that oversee our domestic and foreign affairs and the organizations that connect us internationally -- often seem overwhelmed by the effort to stave off ever-threatening crises and disasters of one kind or the other.  No place, no one, no system appears immune to difficulty.  At a time when the major ideological and systemic competitors to Western liberal-democracy and free-market capitalism have collapsed, neither democracy nor the market appear to offer, by themselves, the answers we need to our many problems.

We in the West have been especially blessed by history.  But with an abundance of natural and human resources, a long and secure tradition of democracy and individual rights, and the strongest and richest mass economies the world has ever seen, we nevertheless remain afflicted by poverty, prejudice, racial injustice, declining living standards and political system mired in parochialism and shortsighted partisanship.  We have proved incapable of preventing the death of innocent men, women and children from terror, war, famine and disease -- which are, after all, largely the result of human action or inaction.  And although the world has providentially taken a step back from nuclear Armageddon, we are still poisoning our environment and degrading its capability to feed, care and comfort us.  To be fair, it is not that we are at a loss for ways to resolve many of these problems.  One can imagine solutions to most of them that could succeed if we were determined enough, worked hard enough and sacrificed enough.  Yet, when we are not dreaming, it seems naive to believe that we could ever achieve such outcomes in the "real" world.  So, our feet firmly planted on the ground, we hope for the best while fearing, more and more, the worst.

In all, it seems hard to avoid the conclusion that we have reached a point in global history that demands finding new ways to live, individually and collectively.  We have lost our faith in ourselves and in our ability to reason our way forward.  After the terrors of the 20th Century, the Enlightenment and its faith in the ability of human intellect to help us perfect our world have come to seem like a bad joke.  The nightmares have entered our very souls and made us doubt our ability to think, reason, discuss and decide with our fellow human beings the many problems that we face.  Some believe that the only response is to trust instinct, listen to our blood, and fight to protect what we have while seizing the high ground before others do so.  Reason must be rescued if we are to find a better way. 

Freud can yet help us begin.  His conception of the human soul and the conflict within us reconnects our problems with the similar concerns of Plato and Aristotle.  Freud's work recalls Socrates' invitation, in the Republic, to establish within ourselves the rule of reason without which we cannot have just and well-ordered societies.  2300 years later, this solution remains difficult to achieve.  But after all this time, we have even more cause to believe that "knowing thyself" may be the only way to leave the nightmares behind.