Global Capitalism

[Guyau]

Andrew Bernstein will deliver a lecture, free and open to the public, on

Global Capitalism: The Solution to World Oppression and Poverty

Wheaton College

Woolley Room, Mary Lyon Building

February 22 at 7:00pm

Here is a synopsis from the publisher, University Press of America, of Dr. Bernstein’s latest book (2010):

Captialism Unbound: The Incontestable Moral Case for Individual Rights is a concise explanation of capitalism's moral and economic superiority to all forms of socialism, including America's current mixed-economy welfare state. Bernstein shows that the current crisis is essentially similar to the Great Depression in its causation and in the steps necessary to resolve it. The book's concluding section applies moral and economic principles to the current economic crisis, showing that government intervention is its cause and a policy of laissez-faire its necessary solution. Furthermore, socialist/statist policies are universally the cause of social calamities and that the answer lies in individual rights and laissez-faire capitalism. The principles that the book clearly articulates are timeless; in diverse forms, the conflicts these principles explain will recur repeatedly throughout history. As a result, this book is relevant not merely today, but will be forever.

Bernstein accomplishes all of this in a concise, lively, impassioned volume that is fully accessible to potentially countless readers.

Table of Contents

Prologue: The Primordial Struggle for Individual Liberty

Part One: The Historic Superiority of Capitalism

1. The Dismal Poverty of the Pre-Capitalist Political-Economic Systems

2. The Heroes of Capitalism

3. The Inventive Period

Part Two: The Moral Superiority of Capitalism

4. The Great Disconnect

5. The Virtue of Selfishness

6. Egoism as the Necessary Foundation of Goodwill

7. Capitalism as the Sole System of Moral Virtue

Part Three: The Economic Superiority of Capitalism

8. The Failure of Socialism

9. The Failure of a Mixed Economy

~~~~~~~~~~~~~~~~

I attended a short seminar course of Dr. Bernstein’s, many years ago, on some of the history of ethical egoism. He is a wonderful teacher.

[BaalChatzaf]

Part Three: The Economic Superiority of Capitalism

8. The Failure of Socialism

9. The Failure of a Mixed Economy

The historical fact is there has never been a pure capitalist society/economy. All we have ever had were "mixed economies". Even the Soviets had to resort to a "mixed economy" by restoring some market forces, as under Lenin's New Economic Policy. Mixed economies is all we have had. So the question is: which mix works best.

Ba'al Chatzaf

[syrakusos]

The historical fact is there has never been a pure capitalist society/economy. ... So the question is: which mix works best. Ba'al Chatzaf

We all make mistakes, big ones and little ones. Is the question, then, which mistakes work best?

There are 40,000 traffic fatalities per year. Is the question, then, which have the best outcomes?

The problem with a command economy is the commanding. Do you assert that some commands work better than others? To me, the problem is the inverse-square law: the farther away you are from something, the less you know about it. So, running other people's lives is not as efficient as letting them run their own lives. It seems pretty clear to me. What do you perceive that we all missed? Can you cite an example of workable controls?

Mike M.

Michael E. Marotta

[BaalChatzaf]

The historical fact is there has never been a pure capitalist society/economy. ... So the question is: which mix works best. Ba'al Chatzaf

We all make mistakes, big ones and little ones. Is the question, then, which mistakes work best?

There are 40,000 traffic fatalities per year. Is the question, then, which have the best outcomes?

The problem with a command economy is the commanding. Do you assert that some commands work better than others? To me, the problem is the inverse-square law: the farther away you are from something, the less you know about it. So, running other people's lives is not as efficient as letting them run their own lives. It seems pretty clear to me. What do you perceive that we all missed? Can you cite an example of workable controls?

Mike M.

Michael E. Marotta

39,000 fatalities is better (or at least, less worse) than 40,000.

Ba'al Chatzaf

[tjohnson]

The problem with a command economy is the commanding. Do you assert that some commands work better than others?

Take monopolies, for example. Or at least virtual monopolies, like Windoze O/S. These are not good for competition (capitalism?). The question is do you intervene or just allow it to run it's course and stifle innovation? It bothers me to see brain power going to waste because of this but of course we all know how governments screw everything up when they intervene.

[Selene]

The problem with a command economy is the commanding. Do you assert that some commands work better than others?

Take monopolies, for example. Or at least virtual monopolies, like Windoze O/S. These are not good for competition (capitalism?). The question is do you intervene or just allow it to run it's course and stifle innovation? It bothers me to see brain power going to waste because of this but of course we all know how governments screw everything up when they intervene.

GS:

Or at least virtual monopolies, like Windoze O/S.

I know nothing about Windoze O/S, how did it become a monopoly, by competence or governmental edict? Makes a big difference to me.

Adam

[Guyau]

Bob, regarding #2, it has seemed to me, too, that there has never been an unmixed national economy. The economic system of laissez faire capitalism is laid out step-by-step in Murray Rothbard’s Man, Economy, and State. That is a definite theoretical economic system whose opposite pole would be a fully planned economic system in which every production decision over land (in the economic sense) and labor were made by a central economic bureau of the national government. All of the mixes between those two poles can be analyzed in its particulars against the ideal, theoretical system explained in Rothbard’s treatise. The theoretical poles, of course, have been informed by actual economic history.

One of the deep stumbling blocks to successful implementation of the theoretical pole of complete central planning of a national economy, as I have understood it, is that totally centralized production decisions cannot be adept in responding to changes in consumer demands (willingness to purchase a particular sort of product or service at a given price). It always seemed to me that in his fantasy future society of This Perfect Day Ira Levin was smart to include idea that the consumptions were controlled by the central planner.

Another stumbling block for the central-planning pole is the ability of individuals, especially in collective action, to attempt to have their ethical ideals, at least their ideals of justice, instituted in the central planning ($). Different people will have somewhat different ideals of justice, including the justice of alternative planning processes, and unless people are consummately pacific and cooperative under the dictates of the central planner, the planning cannot be fully implemented. So Levin had to also take care of this problem in his design of the ultimate centrally planned economy (a single hyper-planned global economy in this fiction). Alas, not all men could yet be turned into full-time sleepwalkers, and so, Levin’s exciting story ($).

[tjohnson]

GS:

Or at least virtual monopolies, like Windoze O/S.

I know nothing about Windoze O/S, how did it become a monopoly, by competence or governmental edict? Makes a big difference to me.

Adam

Sorry I thought everyone knew that joke, Windows ?? Well, at first everyone wanted it because it was fantastic compared to DOS (command line) but later they had no choice because M$ (Microsoft) used strong armed tactics (force) to keep PC manufacturers from selling PC's with any other O/S. But like I said, maybe the alternative is worse.

[9thdoctor]

The historical fact is there has never been a pure capitalist society/economy. All we have ever had were "mixed economies". Even the Soviets had to resort to a "mixed economy" by restoring some market forces, as under Lenin's New Economic Policy. Mixed economies is all we have had. So the question is: which mix works best.

You seem to be ruling out “pure” capitalism by suggesting there must be a mix. Or do you allow for a mix like a Churchill Martini?

A Churchill is made with dry gin, stirred, with an unopened bottle of vermouth waved above the shaker, or occasionally the cork of the vermouth bottle placed in the corner of the room.

Wikipedia

[Selene]

GS:

Or at least virtual monopolies, like Windoze O/S.

I know nothing about Windoze O/S, how did it become a monopoly, by competence or governmental edict? Makes a big difference to me.

Adam

Sorry I thought everyone knew that joke, Windows ?? Well, at first everyone wanted it because it was fantastic compared to DOS (command line) but later they had no choice because M$ (Microsoft) used strong armed tactics (force) to keep PC manufacturers from selling PC's with any other O/S. But like I said, maybe the alternative is worse.

Ah...shows how blind one can be lol.

Thanks

Adam

[tjohnson]

A Churchill is made with dry gin, stirred, with an unopened bottle of vermouth waved above the shaker, or occasionally the cork of the vermouth bottle placed in the corner of the room.

That's one dry Martini!

[Christopher]

Here's an interesting thought:

Evolution used to be concerned entirely with the belief in self-survival (survival of the fittest). Today it is believed that evolution is about selfishness of the gene, that altruistic behaviors of self-sacrifice can in fact further a species' existence. In other words, survival of the fittest was oversimplified.

If we consider human action in terms of immediate gains over long-term costs, we see that very rarely do people act optimally. We might find that collusion happens over and over again as people actively seek to destabilize the system in order to reap massive short-term gains at significant long-term costs to others. According to Objectivism, collusion is fine. Insider-trading might be fine as well in an Objectivist system, I don't know. The point is, although human rights is the ultimate goal, it may be Objectivism's claim that 'absolute freedom produces the healthiest society' is not true.

As math and evolution (math again) have shown, pure self-interest is a non-optimal equation for the functioning of the system.

Christopher

*Edit: and there are very few people who think about helping the whole system in order to more effectively better themselves. This type of thinking is considered highly advanced and highly abstract.

Edited January 27, 2010 by Christopher

[Guyau]

Christopher,

Evolution was not concerned with the survival of the individual organism, but with continuation of its species. To say that “today it is believed that evolution is about selfishness of the gene” and to insinuate that only under that perspective is functionality of the individual organism for its kin (e.g. “self-sacrificial” behavior) scientifically understood is very lopsided. Many qualified experts do not think that evolution is about selfishness of the gene.

Related

Life, Organism, Ultimate Value

What is an Organism?

Genes and the Agents of Life

The Individual in the Fragile Sciences

Robert A. Wilson (Cambridge 2004)

Replication

David Hull and John Wilkins

Also

From a book review of mine (two books, plus):

“One circumstance weighing against a thoroughly utilitarian value theory and rationale for rights has not been broached . . . . We know well enough what kinds of entities there are above the level of organisms in the biological hierarchy of nature. There are real organic entities, real working systems, at the population level, at the ecosystem level, and at the biogeographical level. But aggregations of organismic utilities are not manifestly valuable to entities at those higher levels. Where is the entity for which transpersonal aggregations of utility are valuable? Perhaps such aggregations have value only to us individual organisms. Perhaps they are only elaborations of our most general affections for human kind and life.”

[BaalChatzaf]

Christopher,

Evolution was not concerned with the survival of the individual organism, but with continuation of its species. To say that "today it is believed that evolution is about selfishness of the gene" and to insinuate that only under that perspective is functionality of the individual organism for its kin (e.g. "self-sacrificial" behavior) scientifically understood is very lopsided. Many qualified experts do not think that evolution is about selfishness of the gene.

Natural evolution of species is a happening. There is no reason or purpose or end to it. It is the result of natural processes. Genes are varied over time by radioactivity and other events in the environment. Natural selection takes place as a result of the organisms expressed by the genes interacting with the environment. It is a happening and there is no teleology at work.

Because organisms are selected by how well they interact with the environment by purely natural means an illusion of design is produced. There is no design.

Ba'al Chatzaf

[Selene]

Robert:

That is quite well put. "There is not teleology at work." I will use that phrasing with a few folks that I discuss teleology with.

Because organisms are selected by how well they interact with the environment by purely natural means an illusion of design is produced. There is no design.

I would put design in quotes in my statement to them.

Thanks

Adam

[Christopher]

Stephen,

Interesting thoughts, although I'm not sure I necessarily agree with the propositions. Even so, it circumnavigates my main point which is that an optimal system in mathematics and biology is not through sheer (moral) selfishness as Objectivism claims. Now whether or not we should consider the health of the system is a separate question.

Christopher

*Edit: by the way, if Rand's negative views on chess are any indication, I think she would very much dislike Prisoner's Dilemma.

Edited January 27, 2010 by Christopher

[Guyau]

Christopher,

Your remarked in #12 “there are very few people who think about helping the whole system in order to more effectively better themselves.” I’m not sure you really meant “the whole system,” but anyway, one of the important insights in economics—from Adam Smith to the Austrians—has been that by processes social, but not envisioned or intended, positive things happen under the capitalist framework for people collectively through individuals and business firms simply pursuing their own self-interest by their own lights.

As we know from §228 of Nietzsche’s Beyond Good and Evil, he detested appealing to any such collective benefit, whether intentional or invisible-hand, as a rationale for egoistic individualism. In the courtroom speech that Rand composed for the character Hank Rearden, she similarly declined resting on collective benefits the rationale for allowing the industrialist to conduct his consensual transactions based on his own self-interest. However, unlike Nietzsche, Rand had a warm heart towards the well-being of the multitudes who have a better life as a result of capitalistic elements in the economy: think of the images in Francisco’s mind in his last, laughing scene with Hank in that novel.

In #16 you conjectured that Rand would dislike any use of Prisoner’s Dilemma (or other formal games) in thought about economics, biology, and ethics. You mentioned Rand’s negative view of chess. As I recall, that was not a negative view of chess, as a hobby, but of having a mind superb in that demanding game and choosing to use that mind to play chess as a career, rather than only as a hobby. Whatever the particulars of her views about playing cheese, question of the usefulness and importance of the theory of formal games, such as Prisoner’s Dilemma, in economics and biology, and in Rand’s ethical theory, should not be: Would Rand welcome it? Rather, Should it be welcomed as true, and can it be assimilated consistently and helpfully into her theory, as she had it? Between the moral goodness of rational self-interest on the one side and respect for individual rights on the other, Rand has her great fulcrum: every individual is an end in himself. But theory of formal games can, I have maintained, inform and strengthen the binding of those two sides. Knowing better what is in one’s strategic self-interest in the context of decisions interdependent with the decisions of others is part of knowing better what is in one’s self-interest.

[DavidMcK]

Gates didn't strong arm anyone from buying Apple with its own operating system. The real reason Windows is so fantastically successful is that the main alternative to Windows was invented by a Swedish kid (Linus Torvalds) instead of a money hungry American kid, so he just gave the system away (Open Source) instead of developing it and charging money for it and providing stiff competition to Gates. In another universe Linux would be to Windows what Pepsi is to Coke, or Avis to Hertz (We're number two, we try harder), or AMD to Intel. Instead it was slowly and painfully developed by thousands of amateurs until it was finally usable instead of diverting a few billion of Gates money into an alternative.

[tjohnson]

Gates didn't strong arm anyone from buying Apple with its own operating system.

My statement doesn't apply to Apple, they make there own PC's with their own O/S. I am speaking about manufacturers like Dell, HP, etc. who only make PC's and have to install someone else's O/S.

[syrakusos]

Do Multinationals Restrain the State?

10 January 2007 | Peter Klein |

I referred early to Ralph Raico’s essay on the European Miracle, the unprecedented, long-term rise in living standards that began in late-medieval Europe. As discussed there, the consensus of mainstream scholars such as Rosenberg and Birdzell, Mokyr, North, Landes, and Weingast is that Europe grew rich because unlike more centralized Eastern civilizations, European political and social life was controlled by a complex, decentralized mosaic of institutions and organizations, each of which placed limits on the other.

We all know that multinationals or transnationals (for now I’m ignoring the distinction) are major economic forces. Some stats at hand:

• Of the 100 largest economies in the world, 51 are multinational corporations.

• According to estimates by UNCTAD, the universe of multinationals now spans some 77,000 parent companies with over 770,000 foreign affiliates. In 2005, these foreign affiliates generated an estimated $4.5 trillion in value added, employed some 62 million workers and exported goods and services valued at more than $4 trillion.

• Inflows of foreign direct investment were $916 billion in 2005, a substantial increase over the prior couple of years, largely due to a rise in cross-border M&As. The value of cross-border M&As rose by 88% over 2004, to $716 billion, and the number of deals rose by 20%, to 6,134.

From the archives of ORGANIZATIONS AND MARKETS

Edited January 28, 2010 by Michael E. Marotta

[tjohnson]

Gates didn't strong arm anyone from buying Apple with its own operating system. The real reason Windows is so fantastically successful is that the main alternative to Windows was invented by a Swedish kid (Linus Torvalds) instead of a money hungry American kid, so he just gave the system away (Open Source) instead of developing it and charging money for it and providing stiff competition to Gates. In another universe Linux would be to Windows what Pepsi is to Coke, or Avis to Hertz (We're number two, we try harder), or AMD to Intel. Instead it was slowly and painfully developed by thousands of amateurs until it was finally usable instead of diverting a few billion of Gates money into an alternative.

And what is "real reason" that IE (Internet Explorer) is so successful? (excuse me while I get sick) In this case there was another product (Netscape Navigator) that was being bought by consumers but then M$ didn't like the competition so if gave their browser away for free (that's what it was worth too - nothing). When told to cease this predatory practice they responded by saying it was an integral part of the O/S and could not be separated. You can't have healthy competition in conditions like that