Capitalism and its discontents

I believe we need to drive a stake through Adam Smith and his “invisible hand,” the vampires of fictively ideal “capitalism.”

Let me state that global warming, or peak oil, has nothing to do with the less-than-perfect nature of capitalism, or my assessment of capitalism’s inadequacies.

By “driving a stake,” I mean driving a stake through the idea that “the market is always right in the end,” or similar bullshit. Because it is bullshit.

As I’ve blogged elsewhere, Adam Smith did NOT invent economics as a (social) science, “dismal” or otherwise.

Rather, he became the first person to seriously philosophize about economics. Big difference. And, because of the expansion of the British Empire, and its then-junior American relative, over the next century-plus, people for some reason thought capitalism as espoused by Smith (and similar minded followers) was an insight of genius.

First, it was based on the now-discredited philosophy of Enlightenment Deism. Smith’s “invisible hand” was nothing more than an economic-specific hand of the Watchmaker Supreme Being “winding up the world.”

Well, 225 years on, we’ve seen just how deluded Enlightenment Deism actually was. That alone puts the kibosh on capitalism as political philosophy.

Second, the “worship” of capitalism is a clear post hoc, propter hoc fallacy. In other words, just because the British Empire burgeoned after Adam Smith theorized doesn’t mean capitalism had a damn thing to do with it. In fact, given the strongly mercantalist British economy until the 1832 corn bill, and the fairly mercantalist British economy until the 1867 second corn bill, it’s quite arguable that capitalism had little to do with it. Certainly not capitalism as idealized.

(In fact, if one looks at the post World War II American Empire, there’s clearly mercantilist bits to it. Our whole “special arrangement” with the House of Saud comes to mind.)

Third, Smith (and his followers until some Univ. of Chicago profs started winning Nobels for doing just this) left no place for emotions, emotional actions, and emotional illogic in his enlightenment capitalism. To the degree emotions can be studied in capitalism, its hugely in the aggregate at the most macro level; short of people wearing a Borg-like fMRI box on their heads, you’ll never get that study close to the level of individuals.

Is capitalism “all wet”? No. Is the fictive idealization of it often trotted out for hypercapitalist dog and pony shows “all wet”? Well, it could probably stand a stocking-in of umbrellas.

“Replace” it? No, I didn’t say that.

But, since you may be asking ...

First, contrary to many libertarians, the “tragedy of the commons” is both a real and a serious issue. That’s in part based on the emotion-based decision-making noted above, which often precludes long-term thinking, and thinking as part of a social group above a certain size.

Second, I don’t claim governments are perfect. As I once posted here, ideally, I’d be described as a libertarian socialist... at least with one foot. But, I know that’s not realistic.

So, I have no problem saying that my other foot is in the waters of social democracy.

Are we better than Western Europe in many ways? Yes. Is that always because of our political, economic or social systems? Not even close.

Are we sometimes deluding ourselves we’re better? Yes.

Take unemployment. Everybody talks about high unemployment in Europe.

Well, it ain’t so much so, if you compare apples to oranges.

For instance, in the U.S., if you work for a temp agency like Manpower, you’re considered employed. In Germany, you’re considered unemployed.

Given that, as of the turn of the century, per an old Nation article, Manpower is the biggest employer in both countries, and temp agencies make up about 2 percent of the work force in both countries, that’s a HUGE adjustment you need to make to compare apples to apples. Other, smaller ones, are worth at least half a percentage point, meaning U.S.-German unemployment differences are only 2 percentage points, not 4.5 or 5.

Is that worth it for the greater stability of German social democracy-style capitalism, or something similar? I’d say yes.

And, you know, I bet a lot of Americans would, if we could get them deprogrammed from the brainwashing of American society and business elites.