"Punishment Capitalism"

[studiodekadent]

"Punishment Capitalism"

The Curious Motivations Of Some Supporters of Market Economics

by Andrew Russell

One of the more twisted maladays that the concept of "Fusionism" has inflicted upon us pro-market advocates is an attitude towards markets I like to call "Punishment Capitalism" (not inherently related to the similar sounding "Sado-Monetarism"). The concept of Fusionism, by which advocates of liberty could justify noncoercion as a means to Conservative ends, was first proposed by Frank Meyer; editor of the intellectually toxic "National Review" magazine. Previously, I have discussed the problems of Fusionism, for example how it forces libertarians to justify freedom as a means (implying that freedom is not a worthy goal in and of itself), and also how it was the libertarians who provided all the intellectual ammunition and cultural assets (i.e. Mises, Hayek, Schumpeter and Friedman re-conquering academic economics for markets, Rand and Heinlein who injected the ideas of liberty into popular discourse) yet it was the conservatives that grabbed all the political power. Regardless, the ever-widening faultlines between conservatism and libertarianism are rendering Meyerian Fusionism obsolete. This article will look not at Fusionism itself, but at the attitude of Punishment Capitalism, which the Fusionists frequently carry and have spread.

Fusionism grants us an uneasy tension between the antiauthoritarianism of libertarianism and the authoritarianism of conservatism. Fusionism's economic attitude of Punishment Capitalism is the perfect example of this tension. Since the Fusionist evaluates on the basis of conservative standards of value, the Fusionist cannot see value in a nonauthoritarian portrayal of Capitalism. As such, the Fusionist must justify Capitalism as an instrument of control and punishment. Under Punishment Capitalism, people make money by "working hard" as opposed to "working creatively." Under Punishment Capitalism, people work out of "duty to their loved ones" rather than "rational selfishness." Under Punishment Capitalism, entrepreneurs are portrayed as "Christlike martyrs slaving away in the office" rather than adventurous, creative Richrd Bransons who probably adore their career. Under Punishment Capitalism, to truly enjoy one's job instantly raises suspicion that it is not "real work," rather than to see a truly rewarding career as a great thing. To the Punishment Capitalist, the market is a Drill Sergeant ordering producers to strain in blistering heat to produce a product with a very low price. During my following critique, please keep in mind that my favorite scene in Full Metal Jacket is when R. Lee Ermey's character gets shot. The prick deserved it.

Economic activities tend to be categorizable as either production or consumption. Innovation may be seen as production of ideas. Regardless, the attitudes in each category that Punishment Capitalism has are as follows:

Production is seen as not a means to an end, but like a Kantian perfect duty. One must have some form of constant labor. In addition, this labor cannot be a joyous process to the individual, for that would mean it is 'play' rather than work. The entrepreneur is as such someone that suffers, as are all workers. The pain of production is strongly emphasized, work is 'hard' and the harder the work, the 'better' the product. In the sphere of consumption, however, it is declared that consumption is ignoble, after all consumption grants pleasure. Entrepreneurs that enjoy the rewards of their labor are derided as "playboys." Inherited wealth is seen not as good fortune, but as the product of some sort of moral theft, and the heir instantly has some additional burden of proof of character thrust upon him.

It is no surprise that this attitude is a descendant of the Protestant Work Ethic. The Calvinist belief that constant labor is a sign of personal salvation makes all those nervous "have I really been saved?" Calvinists labor. Although I disagree with Max Weber's belief that Calvin is responsible for Capitalism, it is unquestionable that the Calvinist work ethic is responsible for Punishment Capitalism. The Calvinist ethic is based, eventually, on the assumption (prevalent in almost every sort of Christianity) that sufferring is good for the soul. This idea is the Platonic hangover induced by the mind-body dichotomy which reveres the transcendent and damns the physical. As such, to the Punishment Capitalist, production is noble as a form of punishing, disciplining and chaining the physical, as some sort of penance for Original Sin maybe.

The political implications of Punishment Capitalism are as follows. To the Punishment Capitalist, although they will strongly support Capitalism is certain respects, they will have at least some sympathy with many forms of regulation. For one, industries that deal more closely with pleasures (be they the sex, drugs (illegal), entertainment or gambling) will always be regarded as shady, and as such may be regulated. Luxury taxes will also have some sympathy, since luxuries are regarded as hedonistic and excessive and sinful. Sin taxes (alcohol, cigarettes, etc) will also recieve at best mild opposition from Punishment Capitalists. What will be opposed, with religious zeal, is any form of social safety net. Although opposing safety nets is not unique to Punishment Capitalism, the key feature is why this opposition exists. Most libertarians disagree with safety nets, not because they aim to help the poor, but because they are funded by coercive taxation. A Punishment Capitalist, however, sees the evil of welfare not in the source of funding but in the act of welfare itself: it consists of funding an intrinsic moral depravity (laziness). In the debate over taxation, Punishment Capitalists will argue for consumption taxes over income taxes, rather than see all taxes as equally theft.

Unfortunately, Ayn Rand was not completely free of the spectre of Punishment Capitalism (although she was not necessarily a proponent). I give you the example of Hank Rearden's hatred of Francisco d'Anconia in "Atlas Shrugged." d'Anconia was hated for being a "worthless playboy" and a "destroyer of wealth" (as if piles of gold have an inherent value? Sounds much too Aristotelian-Intrinsicist for Ayn Rand). Although there is some evidence that Rand herself disapproved of anti-consumption positions, for example when Ragnar tells Rearden to spend a refunded gold ingot exclusively on his personal consumption, it is very easy to read Rand as supporting a Neo-Puritan belief that production via back-breaking effort is intrinsically moral (regardless of the fact that this attitude would contradict Rand's technical philosophy on numerous levels).

Regardless, Rand critiqued how conservatives argued for Capitalism on the basis of human depravity. She described the argument as saying man is not good enough to be enslaved, and he must be punished with freedom. Extending Rand's argument, to the Punishment Capitalist, there is no better punishment then being cast out of the Garden (or Welfare State) of Eden and forced to suffer and labor and sweat for our meager rations. To the Punishment Capitalist, constant and unending labor as an end in itself is the most effective set of chains ever devised and the perfect way to force men to virtue.

No wonder the conservatives are such pathetic defenders of Capitalism. In addition to the aforementioned sympathies for certain forms of political intervention that Punishment Capitalism gives, the ethical implications of Punishment Capitalism totally go against the teleological nature of human action as explained by the Austrian economists. Human beings produce because they need to consume. To induce guilt over consumption is to render production purposeless. They are, paradoxically, attempting to bake their cake and not eat it, too. They want factories and skyscrapers and workshops without Las Vegas and Louis-Vuitton-Moet-Hennessey. Eventually, in trying to make the production of wealth a sacrifice, they only succeed in encouraging public decadence and worldliness by producing the stuff in the first place.

Thankfully, there is an alternative. This alternative is an understanding of Capitalism as a life-affirming, benevolent system. Philosophically, this alternative requires rejecting the anti-flesh attitudes of the Protestant Work Ethic, which are the basis for the mind-body dichotomy that grounds the anti-consumption attitudes of Punishment Capitalism. This alternative of Benevolent Capitalism is worldly (and hence compatible with either nonspiritual or Immanent/Aristotelian forms of spirituality but not Platonic/Transcendent forms of spirituality) and teleological. Production is simply a means to consumption (which is in itself a method of satisfying our needs) and as such is instrumentally but not intrinsically good. Producers act for their own joy and are justified in doing so. Above all; sufferring and control are not to be considered spiritually superior states or proper for man. Those whose job is joy for them are to be celebrated and praised. Those who inherit wealth are to be treated as everybody else. Ultimately, the core of Capitalism is not one of "work harder than everyone else" but one of "live for your joy." It needs to be promoted as such.

[studiodekadent]

Was wondering if anyone had any comments on my above article. Points they want to criticise or praise, etc?

Just a little evidence for my point: quoting conservative moralist crank Dinesh D'Souza: Capitalism “makes us better people by limiting the scope of our vices” i.e. it is a chaining, restraining mechanism, making us serve and labor for our rations.

What a psychopath.

Edited April 16, 2008 by studiodekadent

[Wolf DeVoon]

"Capital" means capital plant and equipment. When it's time to cut a bar of steel in half or punch a tunnel through a mountain, all the haircuts, sovereign debts, central bankers, and newspaper columns in the world ain't gonna do it. Long before your paper banknotes and derivatives can be swapped, some jerk like me has to pick up a capital hammer and hit a capital nail accurately on its head to get the job done. However decorative and amusing Disney movies, tourists, sportsmen and priests purport to be, in reality consumption contributes nothing to the work of production. Whether the capital in question is a paintbrush, or a petrochemical plant, or an oil rig, or the pipe-welding robots and steel mills that make it possible to exploit a naturally inaccessible, dangerous, useless raw muck, the productive power of tangible investment in the form of industrial plant and equipment is the literal (and largely forgotten) basis of capitalism...

We need to look at capitalism from a simple, proletarian perspective -- at the level of nuts and bolts and seed grain. Freedom rewards study, forethought, frugality, fidelity, intelligence, initiative, willingness to experiment, and showing up for work every day, ready to work whether it's fun or not. Anyone who has ever worked on a farm, in a factory, bakery, restaurant or hospital knows what I'm talking about. This is not an issue of supervision. Ninety percent of the time, the boss isn't there, or he doesn't fully understand the problem at hand, or he expects you to solve it without breaking the rules (or without getting caught breaking them) because he hired you to get the job done without a lot of guff. There's the hay, there's the hooks -- get it off the truck and in the barn, as fast as you can. Complaining about the heat, or how dusty it is in the barn, or how unfair it is that you're an unskilled day laborer does not recommend anyone for continued employment as a ranch hand. Dragging a plank to the side of the truck and doing the job faster than anybody else will get you a pat on the back and a smile -- and probably another day's work. Keep it up, for a year or two, and you'll become a trusted member of the enterprise. This is the reality of work, whether the work is skilled or unskilled, physical or mental. If you can figure out an effective solution that achieves the specified outcome (or a substantially better result), most employers will recognize and reward productivity. It is in their interest to recruit and retain competent people. No employer deliberately selects lazy sycophants and lobotomized stooges.

Except in government. Political office rewards conventionality, seniority, multiple meaningless rituals, symbolic gestures, half-truths and evasions, deliberate delay, trading the unearned, shaking hands, smiling, empty pladitudes and feigned concern, absolute allegiance to the party line and the party leader, secret deals, backbiting, paranoia, and showing up at cocktail parties to beg for money whether it's dignified or not. Don't accuse me of making this up. I ran Paul Soglin's mayoral campaign, and I worked for the Department of Energy during the Carter Administration. I know precisely whereof I speak. The political class does no work and produces nothing, except photo opportunities and sound bites. It is not surprising that Bill Clinton found time to play with Monica Lewinsky in the Oval Office. Ronald Reagan preferred to snooze, and GS-11 bureaucrats are rarely at their desks. The culture of indolence is highly contagious. Try asking a complicated question at a police station or a city clerk's office.

Capital plant and equipment is the lifeblood and sinew of private enterprise. The vast bulk of productive investment is NOT financed by the so-called "capital markets," nor from government hand-outs or tax breaks, but instead from retained earnings. Proper maintenance of plant and equipment is a crucial priority for every factory, every farm, and every pilot of an 18-wheeler. Freedom implies responsibility. If your competitors have better technology, they cut costs and win customers. The free market economy is a school in permanent session, teaching every participant the virtue of practical education. We don't always enjoy learning to use new tools -- but we do it, to stay in business and to make ends meet. Until very recently, the secular trend across all industries throughout American economic history has been falling prices and rising productivity. The computer on my desk cost $1000 and quietly outperforms any $1,000,000 mainframe built 30 years ago.

None of this applies to government. The bulk of state investment is NOT obtained from operational revenue or taxation, which barely cover the salaries and pension benefits of a constantly growing number of government employees. Badly-timed, over-specified, bloated investment in state plant and equipment (weapons, office buildings, roads) are funded by the one and only "capital market" that governments care about -- the sovereign and tax-exempt municipal bond auctions. About a third of this debt is held by State and Federal employee pension funds; another third by foreigners who don't trust their own governments and rightly see the U.S. Treasury as the strongest thug in a world of weaklings. If shit comes to holler, the U.S. Government can legally squeeze more wealth from its semi-free citizens than any six European welfare states. Knowing this, U.S. bureaucrats, legislators, military planners and school districts have no incentive to maintain their plant and equipment. Dependence implies irresponsibility--and whether you view the government as a recipient of our willing charity, or as a thief who holds taxpayers at gunpoint, the essence of the game is dependence. Government makes nothing, sells nothing, earns nothing. Their "free public education" consists of student unions, Marxist economics, media studies, boring public policy debates, and football games. Their entire strategy is to elaborate and expand governmental operations, preferably to do less with more. If this is doubted, please check the budgets. You will find that the U.S. military spent more, fighting less. The FBI and DEA have more agents, making fewer arrests of career criminals. Social Security and Medicare are out of control, suffering the same fate as Britain's "free" NHS, for the same demographic and technical reasons. A Ponzi pyramid cannot succeed by robbing Peter to pay Paul, with increasing numbers of idle Pauls and an eroding number of taxpaying Peters. These are well-known problems. There is no known solution -- except to 'fessup and say that we have too much government, too little liberty.

from The End of Laissez Faire? (1999)

[studiodekadent]

"Capital" means capital plant and equipment. When it's time to cut a bar of steel in half or punch a tunnel through a mountain, all the haircuts, sovereign debts, central bankers, and newspaper columns in the world ain't gonna do it. Long before your paper banknotes and derivatives can be swapped, some jerk like me has to pick up a capital hammer and hit a capital nail accurately on its head to get the job done. However decorative and amusing Disney movies, tourists, sportsmen and priests purport to be, in reality consumption contributes nothing to the work of production. Whether the capital in question is a paintbrush, or a petrochemical plant, or an oil rig, or the pipe-welding robots and steel mills that make it possible to exploit a naturally inaccessible, dangerous, useless raw muck, the productive power of tangible investment in the form of industrial plant and equipment is the literal (and largely forgotten) basis of capitalism...

We need to look at capitalism from a simple, proletarian perspective -- at the level of nuts and bolts and seed grain.

Wolf,

To be honest I do not see how this article relates to mine or makes a comment on it.

However, I think that your focus on the "simple, proletarian perspective" is incorrect. As industrial production gets progressively more mechanized, the productive activities of human beings become much more of the knowlege-worker variety. We are currently in a knowlege based rather than industrial economic era. Alvin Toffler's Third Wave etc. New economic paradigm. As such the concept of "proletarian" is quickly becoming obsolete (as is the concept "bougeois", since we all own capital).

Regardless, does anyone want to talk about my article and the conflict between classical liberal capitalism and conservative punishment capitalism?

[Wolf DeVoon]

Wolf,

To be honest I do not see how this article relates to mine or makes a comment on it.

However, I think that your focus on the "simple, proletarian perspective" is incorrect. As industrial production gets progressively more mechanized, the productive activities of human beings become much more of the knowlege-worker variety. We are currently in a knowlege based rather than industrial economic era. Alvin Toffler's Third Wave etc. New economic paradigm. As such the concept of "proletarian" is quickly becoming obsolete (as is the concept "bougeois", since we all own capital).

Regardless, does anyone want to talk about my article and the conflict between classical liberal capitalism and conservative punishment capitalism?

I was talking about your article, and you replied in a very appropriate manner. One of us is wrong about capital and the meaning of capitalism. Another quote is in order:

I think if you check the data, you'll find that all of the installed digital hardware and software amounts to less than one percent of U.S. industrial assets. The 'Third Wave' is economically dinky — far less significant historically than the introduction of electricity, internal combustion engines, wide-body jet transport, etc. This augers against a happy ending, when cyberspace prompts a financial exodus and taxes fall more heavily on the folks who work to keep the lights on, truck food to market, and deliver your next FedEx package.

It's not a coincidence that Alvin Toffler and Al Gore are big buds, chanting at Beltway press parties that everything's fine, everything's fine, and things can only get better – while inflation takes off at a gallop and Wall Street conducts a fire sale of unprofitable, unproductive dot-com 'services.'

The Death of Industrial Civilization

(May 2000)

Definitions matter. Capitalism is about industrial capital.

W.

[studiodekadent]

I was talking about your article, and you replied in a very appropriate manner. One of us is wrong about capital and the meaning of capitalism. Another quote is in order:

I think if you check the data, you'll find that all of the installed digital hardware and software amounts to less than one percent of U.S. industrial assets. The 'Third Wave' is economically dinky — far less significant historically than the introduction of electricity, internal combustion engines, wide-body jet transport, etc. This augers against a happy ending, when cyberspace prompts a financial exodus and taxes fall more heavily on the folks who work to keep the lights on, truck food to market, and deliver your next FedEx package.

It's not a coincidence that Alvin Toffler and Al Gore are big buds, chanting at Beltway press parties that everything's fine, everything's fine, and things can only get better – while inflation takes off at a gallop and Wall Street conducts a fire sale of unprofitable, unproductive dot-com 'services.'

The Death of Industrial Civilization

(May 2000)

Definitions matter. Capitalism is about industrial capital.

W.

Actually, Capitalism is about voluntary economic activity (ultimately speaking), and in my article I was discussing "Capitalism" in the political-economy sense rather than in the technological sense. Technological Paradigms of production were not the issue of my article in any way, indeed I do not believe I mentioned or implied them at all.

As for the Third Wave, Information Technology will not totally remove industrial capital, but really will subsume it. Almost all the capital used in heavy industries these days is controlled by computers. Computers have caused massive improvements in productivity (yes there was an initial learning curve but thats over now, pretty much everyone is computer literate). And please do not accuse me of having sympathies towards an eco-Nazi like Al Gore simply because he and Alvin Toffler are friends (allegedly).

Yes, dot coms can go bust during recessions. This is due to the business cycle, due to the fed. It is also due to the fact that a lot of dot coms have started up recently.

None of this implies that information technology is somehow insignificant. All technological paradigms take time to implement and take effect.

Regardless as I said, technological paradigms are irrelevant to my article. The article is about ethics and political economy, not production methodologies.

[Wolf DeVoon]

Actually, Capitalism is about voluntary economic activity (ultimately speaking

Nope. You mean liberty. Anyway, have a nice day.

W.

[studiodekadent]

Nope. You mean liberty. Anyway, have a nice day.

Really Wolf, stickiness regarding semantics simply gets in the way. My language was not imprecise.