Reversion to the Political Mean, Part 3 – Socialism and Capitalism
I don’t believe feudalism is what anyone wants. Despite the cynical premise that “in the long run we are all dead”, people do care about future welfare after they are gone, and not just for their own families.
Socialism is again proposed as a solution. Government control of the means of production and fair distribution of resources has appeal. It seems to work provisionally in smaller non-diverse societies with large natural resource wealth and a healthy dose of capitalist competition embedded alongside the government run industries. Socialism in China can be argued to be working, but it’s so autocratic that it doesn’t have much appeal for us in the U.S.
Socialism begins from wealth. It doesn’t create it. This is an understanding from Karl Marx. He viewed socialism as a natural successor to capitalism after capitalism had created the wealth. Even in China, the wealth has come from the introduction of some market capitalism in the past few decades. Marx is admired for his historical analysis of capitalism and for detailing the logic of socialism. However, history indicates that nothing about socialism succeeding capitalism is natural in the real world. Capitalist societies have proved more adaptable to changing needs than Marx expected.
Natural or not, is it desirable for us? In a perfect world, maybe so. However, in a perfect world, any system of government, from monarchy to anarchy, would work fine. We’d all take care of each other no matter what the government was doing.
Looking at America today, moving to true socialism democratically is theoretically possible. The Federal Reserve is purchasing corporate bonds. That could morph into buying stocks as the Japanese government has been doing for a long time. So, I can imagine a path for the US government to eventually become the controlling stockholder in major American corporations and so take them over. That would turn America into a genuinely socialist country.
I don’t think anyone would like that, but we seem to be good at pursuing policies that no one likes, so I can’t discount it. But think about it. No matter how it may look in theory, the reality would put the interests of the people more at risk. The government needs to be an advocate for the people, not for the corporations. If you believe corporate interests have too much influence in Washington now, imagine how it would be if corporate interests became Washington. It would not be better.
Please don’t fall into the trap of believing that politicians would run the companies more fairly and successfully. This is a version of the idea that if better people ran things, we would all be better off. “Better people” never run anything important for long. The Caesars led to the insane and cruel Caligula. Marcus Aurelius was succeeded by the incompetent and cruel Commodus. The idealists of the French Revolution led to the Emperor Napoleon. The idealists of the Russian revolution led to Stalin. The list is endless. In each case, the damage to the people and the nation was significant, often fatal.
When major social changes happen through revolutions, in every case, when the people in power are removed, there will still be people in power, usually with more power and less resources than before. Even if the people who come on board do their best to rule for the good of all, power is highly concentrated, and that concentration is too tempting to corruption. Corrupt people will take over.
Revolutions, democratic or violent, become victims of their own success. This subject is a chapter of the book I’m not writing, but the fundamental difficulty with revolutions is they are never a clean slate. The old institutions don’t disappear. The old habits and cultural assumptions are still there. You’re still dealing with humans with all the same character flaws, and any power vacuum will be filled inevitably by humans who have an appetite for power. You don’t really defeat power; you just remove the existing people in control of it, so it’s not really a power vacuum; the power is still there. The vacuum is in leadership, and it doesn’t last long. Someone will step in and take it over. Revolutionaries lose control of the revolution to a power-hungry despot.
The American revolution is an outlier because it happened an ocean away from the ruling elite. In fact, everything about America’s successes has depended on space of some kind: first the space between America and England and then the space to expand to the West. Our era is the first that must deal with problems rather than just separate from them. (Another chapter in my non-book.)
Because socialism is a top down system, it depends completely on the character and skill of the leaders, whether they are democratically chosen or not. As Abraham Lincoln noted, power is the ultimate test of character, and the human who can handle it is rare. Furthermore, since socialism doesn’t create wealth, a significant capitalist portion of the economy will still exist—whether legal or black market, it will be there—so dealing with the problems of capitalism will still be necessary. True socialism doesn’t seem like much of an option to me.
We need a system that works okay no matter who runs things. Some will be great. Most will be average. Some will be incompetent, corrupt, or both. The system has to survive any of them. The liberal democratic capitalism of the United States is the best we’ve done so far. It needs a lot of work, but maybe it can be improved and saved. This requires taking power away from tribes (including corporations) and giving it back to the people through the government. If the government remains closely entwined with a few powerful tribes, this can’t happen.
Any time that power and wealth, no matter what governmental form, become too highly concentrated, the people left out lose hope and eventually form a basis for revolution, which is essentially a synonym for destruction and regression. This is a rational option only for people who have lost hope. We all need to be invested in preventing that. Every walk of life, from the one-percenters to the marginalized, should recognize this common goal: reduce economic inequality across the whole nation.
Unless and until the human race shakes off its eons of primitive tribal survival instincts, the only possible workable solution is the liberal democratic capitalist model which—under the rule of law—protects competition to create wealth paired with strong social welfare programs that redistribute some of that wealth and offer opportunities for advancement to all citizens through universal education. I think that virtually all modern economists would agree with that though they disagree radically on how to do it. (At least another chapter!)
Unfortunately, the democratic piece of the puzzle seems to be failing. Why? Democracy depends on competition through voting based on enough faith in government that the losing side accepts the result and becomes a loyal opposition. At the local level, this may still be the case, but at the national level, it’s not clear at all. People whose candidate loses a national election seem to feel cheated and left out.
The American system depends on the rule of law. If a sizable minority of people believe the law is rigged against them, society will eventually disintegrate. As many have pointed out, the fact that the African American community has felt this way with good reason for centuries is enough by itself to bring about this fall.
Now, a larger and very different minority also feels this way: the white working people. They have spent generations watching the educated white-collar workers, professors, and investors get wealth and attention while they struggle with no more real income than their parents had. They also have a perception of lost respect. After World War II, the working men and women were heroes. Now, the social image associated with the white working family is often The Simpsons. I believe that Homer Simpson is insulting to white working men in a similar way that Stepin Fetchit was to black men.
The racism of working whites towards blacks that was nurtured by white leaders before and after the civil war is always available to those who wish to manipulate it. The focus of the mainstream media on the situation of black Americans and other minorities leaves few places for working whites to be heard. So these natural allies, the working people of all races, are divided by racism.
I am a supporter of anti-racism and an end to systemic brutalization of people of color. Our survival as a nation depends on it. What I am saying is that alongside racism, this economic inequity that has grown for generations between the educated privileged parts of society and the under-educated underprivileged parts drives passions that are not understood by either part, and large parts of the under-educated, underprivileged are white. The whites are undoubtedly more privileged than their counterparts across the color line, but they are still part of the left behind.
Mainstream politics for generations, both democrats and republicans, have consistently failed to responsibly address this nuanced, but deadly serious source of white rage. This is what turned the Republican party over to Donald Trump.
Thus, we have two large minorities feeling the system has failed them through corruption and favoritism and that the law is not to be trusted. These two minorities are on opposite sides of the political spectrum and have a near zero understanding of each other. This does not bode well.
We are in a time of identity politics, which is another sort of tribalism. As noted previously, tribalism naturally leads to feudalism, which is regression politically and socially. What this new feudalism would look like is not clear, but it would certainly be destructive of wealth, welfare, freedom, and quality of life for everyone.
So what can we do about this? I’ll offer some thoughts in the final essay of the series, next week.
May 5, 2020