The fallacies, falsehoods of free market theory

Home » Opinion » Letters To The Editor

Friday, July 03, 2009

Comment

By Derek Lehnecke

There has been much confusion in the media between “socialism” and its connection with the trillions of dollars the government has allocated to banks, insurance companies and auto companies.

Having the taxpayer commit trillions of dollars to capitalize the largest banks and insurance companies in the world, and subsidizing investors to encourage them to buy “toxic” securities while maintaining private control, does not constitute socialism. The distribution of wealth upward is inverted Marxism or socialism for the privileged that own and manage the U.S. economy. Socialism involves eliminating private control over resources. It is a social and political system where production is under public ownership to satisfy human needs, not maximizing profit of unaccountable corporations. Conversely, Pierre Proudhon defined capitalism as “an economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labor.” Capitalism, or more specifically, what passes as capitalism today — corporate mercantilism — has long been questioned by powerful and diverse thinkers ranging from Bukunin, Russell, Sartre, Einstein and Helen Keller.

A factor that engenders currents of anti-socialist attitudes in this country apart from the daily bombardment of anti-socialist propaganda from virtually every major radio, television, newspaper and political source, is the teaching of “free market theory” rooted in laissez-faire economics. The basic premise is that there is an invisible hand that always causes the free and unregulated marketplace to ensure the greatest benefit to all — if simply left alone. Discussion of free market theory may be fine for some academic seminar, but it doesn’t comport to the real world of trade, investment or industrial development.

Mainstream economic courses teach four major assumptions underpinning the classical/neoclassical model: 1) We are all rational wealth maximizers; 2) Private vice leads to public benefits, or the action that yields the greatest financial return to the individual or company is the most beneficial to society; 3) The free market, unfettered by government regulation, is generally the most efficient and socially optimal way to allocate resources; and 4) You don’t have a basic right to live beyond what you can gain on the labor market. Other principles sermonized are: The highest expression of what it means to be human is material acquisition, societies should be based around competition rather than cooperation, progress is measured by the value of products consumed and high consumption rates advance the well-being of society.

These assumptions cannot be proven at a level in the social sciences nor does science offer any definitive explanation of human nature, let alone its correlation to economic organization. Human nature is beyond reification. If the aforementioned principles and assumptions are without merit and do not reflect human nature to the extent of what we know about ourselves, why are they still taught in schools and universities today?

Free market theory developed during the cataclysm experienced during the transition from feudalism to industrialism via enclosure of common lands. The once self-sufficient peasant turned dependent urban worker could only survive by renting himself to owners of mills and factories. Free market theory provided a useful ideology for privileged elites and landowners to justify the plight of those working in the nascent industrial towns.

Just as free market theory served as an ideological weapon of class war against urban workers of the 18th and 19th centuries, it is used today against semi-skilled and unskilled workers (90 percent of population) in context of what is called “globalization” — basically, production looking for the cheapest labor possible. Free market theory also serves as an argument against spending on crucial programs such as a national health-care system, public education, old age pension systems and increased environmental protections.

Far from being anything close to a free-market economy, the U.S. is a publicly subsidized, private profit economy. The common phrase “privatize profits and socialize costs” means the public pays the costs of economic development with the associated risks and bails out private enterprise when it gets in trouble. Business likes big government because it provides a safety net, in taxpayer bailouts, when bad investment decisions result in financial insolvency. Additionally, government acts in distributing wealth upward through tax schemes, protectionist measures and subsidies. The idea that conservatives want less government is a joke; they want a robust government to support them. Dean Baker’s “Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer” is a useful corrective to how the current economic debate is framed.

Free market theory is nothing other than a fraud to shield the public from the economic realities in an effort to present “markets” as neutral, detached from the political, and to disempower people from involvement in investment and production decisions that affect their lives and communities.

(Lehnecke lives in Napa.)È

71 comment(s)

Hear Ye wrote on Jul 3, 2009 12:41 AM:

" Very well said. We're dealing with robots who made no mention of "socialism" until their talking heads (political entertainers) told them too. They don't know the definition but love to throw the word around. It's a game to them of my team verses theirs. Unfrotunately for them this is the real world. "

dellasumbrella wrote on Jul 3, 2009 1:18 AM:

" Let me be the first to say thank you for this clarifying synopsis of free market theory and its inapplicability to real life.

It consolidates much of what I've been reading in the past year or so about this fundamental misunderstanding of our economy.

I'm especially interested in this aspect of the debate: "These assumptions cannot be proven at a level in the social sciences nor does science offer any definitive explanation of human nature, let alone its correlation to economic organization. Human nature is beyond reification."

A theory is only a theory if it can't be tested and proven based on reality, and that hasn't happened with the free market theory. "

rpcv wrote on Jul 3, 2009 6:55 AM:

" The current use of the term "socialism" is nothing more than another fear tactic, based on the surmised resurgence of those Commies that were lurking under our beds in the '50s and designed to discredit anything the Obama administration does. "

freeport56 wrote on Jul 3, 2009 7:22 AM:

" Ha, ha, ha, ha, ha, ha!

I guess the socialist\marx\lenin model from 1917 proved to be a shining example of a market economy, HA!

Those modals have only one goal and that isa to redirect the lives of the citizens in those countries that impose it. I guess we can use the European Union and it's member countries as a becon of financial and industrial might!

No thank you, I will take 233 years a Capitalist economy that builds wealth for it's citizens and allowes anyone to become the best they can be.

Under the current administration, you will soon find out what is like to be a surf again! "

Rob C wrote on Jul 3, 2009 8:48 AM:

" Self sufficient peasants? Please. Peasant life was short, hard and violent. Far from idyllic self sufficiency, feudalism and other forms of indentured servitude was the standard means to extract forced labor by the nobility and church.

Free markets in practice is simply a process of allowing supply and demand to set pricing for goods and services - pricing that creates information allowing for the orderly allocation of capital.

The writer makes good points regarding how government (abetted by the wealth class), distorts pricing information - distortions frequently creating or accelerating 'meltdowns' similar to recent events.

Yet Lehnecke - regardless his academics, makes no mention of a plausible alternative nor has any real 'roundup' to his point other than generalized and recycled 'plight of the workers' platitudes.

While imperfect, especially when distorted by government, the concept of free minds and free markets, deserves better. "

Rob C wrote on Jul 3, 2009 8:58 AM:

" And dare I point out the irony of this missive on the eve of our great nations birthday? A birth from a struggle not for socialism or collectivism, but a fight for freedom. Freedom from servitude and confiscation by an oppressive government and clerical class.

Happy Fourth of July. "

a teacher wrote on Jul 3, 2009 9:07 AM:

" Very good. Rational, concise and clear. Even if I didn't agree, I'd have to say it was well put.

Unfortunately, it'll go through the ears of the usual suspects, whistling as it passes and leaving no impression. "

Mr4 wrote on Jul 3, 2009 9:31 AM:

" You have got to be kidding!

Let's start with your denial of socialism in America. Our government taking equity ownership in banks and auto companies (healthcare and energy next?) is an exact fit for socialism.

Pierre Proudhon? That certainly establishes your bias. A French anarchist / Marxist who died in 1865 - before the industrial revolution matured and long before the horrors of Marxist theory were seen in practice. Great source.

Helen Keller? That makes a little more sense, as one would have to be both blind and deaf to not see how Marxism/socialism has failed so completely in real world application.

The invisible hand: Adam Smith's calculus showing that individuals acting in their own interest (a universal truth) raise the well-being of overall society has been completely proven in the real world. While you seem to pine for the days of feudalism which gave us infant mortality, very short life spans, disease, starvation, horrific disfigurement, murderous oppression, etc., it is not hard to see we are better off today.

More recently, the real world economic/political experiment of USA versus USSR conclusively proved capitalism's superiority. Scoreboard, Mr.Lehneke, scoreboard!

As to economics taught in schools, you have some of it right, but most of it wrong. Private vice being beneficial? Where does that come from? And no right to rise above menial labor? You could not miss the mark more completely!

Finally you conclude that business wants big government. Completely wrong! You confuse conspiracy with self-preservation. Businessmen are realists. They react to the realities of the current government. They are simply staying ahead of the curve.

All in all, a pitiful diatribe! "

kevin wrote on Jul 3, 2009 9:41 AM:

" While I don't necessarily disagree with Derek's "facts", I do disagree with his conclusion.

This is exactly why we need SMALLER GOVERNMENT; to get back to a real free market.

And for all it's faults, we still haven't found any other system that works better.

I do note one correction necessary, Derek says " The idea that conservatives want less government is a joke; they want a robust government to support them."

Those MAY be Republicans but they are NOT Conservatives. Besides, it was Bill Clinton who decided to stop making big corporations the enemy of the Democrat Party.

It is those same "fat cat" CEO's who donated to B.O. and got him elected who are now receiving more government handouts and bailouts then they could ever have dreamed about... "

common sense wrote on Jul 3, 2009 9:41 AM:

" Hmmm. Hilarious, considering that Europe is currently fleeing its socialist systems and converting to freer markets. The freer the market, the better the economy...for everyone, as the data from the last 30 years shows.

Milton Friedman said it best:

"If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can only gain at the expense of another." "

Ruff Limblog wrote on Jul 3, 2009 10:09 AM:

" Did I miss the mention of 'communism'.

To me, communism is where the means of production belong to the government.

Socialism is a hybrid where the means of production are completely to partly private but the government uses taxes and subsidies to change the outcome from that of pure capitalism.

My experience with the kind of socialism practiced in Canada is that a mix of mostly private production with government moderation and regulation is superior to the corporate kleptocracy that has taken over the USA in the last three decades.

It's time for 'We, the People...' to take our country back from the corporatists.

There are corporatist Republicans and corporatist Democrats. It's up to us to reign them all in.

There is nothing in the US Constitution forbiding capitalism, socialism, or communism. OUR Constitution makes 'We, the People...' are the boss and OUR government is our servant not our master.

~Ruff "

Madison Jay Hamilton wrote on Jul 3, 2009 10:21 AM:

" One can't have a free market while allowing for the existence of large corporations.

Adam Smith was opposed to large corporations.

The American Revolution began as a fight against a large corporation, the East India Company.

Milton Friedman's theories were put to the test in Chile, after the U.S. supported the ousting of democratically-elected President Allende. Friedman's economic prescriptions failed there. Nevertheless, ideologues of the Chicago School of economics wanted another chance to work their magic in Iraq.

Free markets only work where/when equality of opportunity exists. Free markets wonly work where/when equality under the law exists. Alas, neither of those conditions currently exists in the U.S. Large corporations dominate our economy.

I want elected government leaders to act as a check on the power of unelected corporate leaders. "

Mr4 wrote on Jul 3, 2009 10:31 AM:

" Ruff, please read the 10th Amendment.

Ours is a limited government of enumerated powers. Those powers do not include "whatever they feel like" (the Obama interpretation) and they certainly don't include ownership of the means of production. That inherently disqualifies socialism and communism, not capitalism. "

Mr4 wrote on Jul 3, 2009 10:34 AM:

" MJH: "I want elected government leaders to act as a check on the power of unelected corporate leaders"

As opposed to the unelected "Czars" being appointed daily by the Obama?" "

Mr4 wrote on Jul 3, 2009 11:18 AM:

" MJH: "Alas, neither of those conditions currently exists in the U.S. Large corporations dominate our economy."

By your logic, Bill Gates was foolish to think he could go up against IBM. "

PastNapan wrote on Jul 3, 2009 11:45 AM:

" To A Teacher: The usual suspects? If you mean those us that aren't brainwashed liberals then YES "

Kevin Eggers wrote on Jul 3, 2009 12:08 PM:

" Our fight for Independence was from the European Imperialists that controlled America’s production of goods and services. Our system of government was supposed to protect the American people and our markets from both foreign and domestic monetary mobsters.

Adam Smith’s perverted economic doctrine, “Wealth of Nations” (1776), distorted the principles of freedom laid out by John Locke and Thomas Paine, and influenced Hamilton’s creation of America’s first corporate owned banking system, “Bank of the United States”, which paralleled the “Bank of England” (corporate owned), with its European debt driven economic abuses, which benefited the elite on both sides of the ocean (and still exists today with our corporate owned Fed).

Benjamin Franklin wanted an “honest money” system with government control over the creation of money. Franklin understood that you can’t have freedom without economic freedom, which requires monetary protection.

The closest thing America has ever come to an honest money system was when Lincoln created his “Greenbacks” during the Civil War to counter the internationalists that were controlling the money for both sides of the war.

We can argue over Adam Smith’s perverted economic principles versus Karl Marx’s perverted economic principles, and the other economic principles all we want, but the truth is that whoever controls the creation of money controls the economics, as well as our freedom.

Stop spinning your wheels in this false thesis (Capitalism) versus false anti-thesis (Socialism) Hegelian dialectic trap that takes you deeper into the Communitarian synthesis—while most Americans still believe government is operating under Constitutional Law, government is working under “global to local” Communitarian Law, the same law as the European Union.

By the way, Congressman Ron Paul’s HR1207 “Federal Reserve Transparency Act of 2009” to audit the Fed now has majority support by Congress. "

Madison Jay Hamilton wrote on Jul 3, 2009 1:01 PM:

" President Obama is not a socialist. President Obama is not even a liberal. I oppose the designation of "czars" to oversee the design and implementation of government policies.

The Constitution does, indeed, allow for public ownership of the "means of production." I'll be driving on the publicly-owned roads after leaving work this afternoon. I'm brave enough to drink water from my home's tap, thereby enjoying another benefit of publicly-controlled infrastructure.

It's a shame that Thomas Jefferson's effort to ban all corporations in a proposed constitutional amendment did not pass! Corporate "personhood" is an evil that distorts our economic and political structures. "

Ruff Limblog wrote on Jul 3, 2009 1:57 PM:

" Mr4- Are the words communism, socialism or capitalism in the 10th Amendment?

No.

Read it yourself:

Amendment X:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."

In point of fact, the words communism, socialism, and capitalism are not found anywhere in the Declaration of Independence, the US Constitution, or the Bill of Rights.

"We, the People..." are in charge, and no economic theories are embedded in our founding documents.

Mr4- You are not proposing that 'activist judges' start interpreting the Constitution as a 'Living Document' are you???

My thanks for proving my point!

~Ruff "

post-it wrote on Jul 3, 2009 2:02 PM:

" Those with capital demand you supply them with more labor so as to increase their profits. If you do not comply, they will outsource your job or in-source cheaper labor. "

kevin wrote on Jul 3, 2009 4:06 PM:

" The Tenth Amendment will make it hard for B.O. to MANDATE that Americans voluntarily give up their Rights and buy health insurance they may not want... "

Madison Jay Hamilton wrote on Jul 3, 2009 4:46 PM:

" In 1776, the philosophies known as socialism and communism didn't exist yet!

(The Founders knew about mercantilism, though.) "

Raven wrote on Jul 3, 2009 5:16 PM:

" Kevin E. , Smith's treatise was in work by him for almost 10 years before being published in 1776 while Paine's first pamphlet, Common Sense appeared in January 1776, before anything by Thomas Paine, so Smith could hardly have perverted anything of Paine's ideas. "

Bauhausfan wrote on Jul 3, 2009 7:04 PM:

" All you need to understand about many of the right wingers (who hang out on this site commenting on a regular basis) and economics was displayed for all to see last year when they were demanding that the Democrats let the oil companies drill in the U.S. so that gas prices would go down . Remember these were the wishes of people who claimed to be staunch free market capitalists.

Of course, this made no sense at all.

In a free market capitalist system where the idea is to make as much money as possible, they actually wanted oil companies to make less money by actually putting more product on the market to reduce the price of their product and lower the corporations profits! (remember the oil companies had been making record profits, more was made by some oil companies than had been made in the history of the U.S.)

The argument was so illogical that it defies all reason. "

Bauhausfan wrote on Jul 3, 2009 7:06 PM:

" Kevin - " The Tenth Amendment will make it hard for B.O. to MANDATE that Americans voluntarily give up their Rights and buy health insurance they may not want... "

Please explain how a public option is going to make you give up your rights and be forced to buy it?

You will be free to buy from any for profit private corporation you choose. "

kevin wrote on Jul 3, 2009 8:08 PM:

" BH, it doesn't matter if there is a public option or people are forced to by from private insurance companies.

Where does he get the authority to force people to buy insurance?

The States could possibly do that, but not the Federal Government... "

PlasticPinkFlamingo wrote on Jul 3, 2009 9:30 PM:

" MJH says: 'President Obama is not a socialist. President Obama is not even a liberal.'

Well that's half correct - he is a socialist, of that there cannot be any doubt, well proven by his actions and announced goals.

However, I agree that he is not a liberal. Not even close to the classic definition of a liberal. "

Bauhausfan wrote on Jul 4, 2009 5:53 AM:

" Kevin - He is going to force people to buy the public option. Explain how. "

a teacher wrote on Jul 4, 2009 8:40 AM:

" " To A Teacher: The usual suspects? If you mean those us that aren't brainwashed liberals then YES "

I see, If I don't see it your way I must be brainwashed or ignorant. What a surprise. "

kevin wrote on Jul 4, 2009 9:31 AM:

" "As part of the government’s effort to create universal health care, Americans who don’t purchase medical insurance coverage would be fined more than $1,000 under a plan currently in the U.S. Senate. Similar to laws requiring motorists to carry auto insurance or else face financial penalties, the creation of “shared responsibility payments” is being touted by Democrats as a way to help make sure all Americans have health insurance. The fines could raise as much as $36 billion over 10 years, according to the Congressional Budget Office.

Using the model established by the Massachusetts legislature for that state’s health care reform, the penalties would amount to about $1,000 a year for individuals and even more for families that refuse to get coverage. Senate aides say the plan would include subsidies for the poor and many middle-class families, but declined to say just how much it would cost to purchase health insurance under the new system."

http://www.allgov.com/ViewNews/Senate_Bill_Would_Fine_Those_without_Health_Insurance_90704 "

Raven wrote on Jul 4, 2009 10:33 AM:

" kevin where does that say they would be forced to buy the public option? "

PastNapan wrote on Jul 4, 2009 1:18 PM:

" Teacher: I have no problem with people thinking differently than I do. I find it hypocritical when the left preaches tolerance that is their MANTRA but of course only when your opinion agrees with theirs. If you disagree your a racist, bigot or homophobe. "

Madison Jay Hamilton wrote on Jul 4, 2009 2:16 PM:

" A free market can't exist in a country in which 5% of the citizens control 85% of its wealth. Obama's goals include propping up the private entities now in control of the economy, and he supports shoveling tax dollars to those private entities. Obama is no socialist. Socialists would like to see permanent nationalization of the financial sector. Both GOPers and Democrats have viewed government as a cash cow to be milked when/if convenient. Obama is no different in that regard. Obama seems to be playing the same old game, only with bigger numbers: privatize profits and socialize costs. Socialists would want the public to reap the economic benefits from its investments. GOPers and Democrats want the public to suffer the costs but be robbed of the benefits.

If only Obama were a socialist. I wish! "

anticommie wrote on Jul 4, 2009 5:43 PM:

" MJH Wrote:

"The American Revolution began as a fight against a large corporation, the East India Company."

I disagree, the Boston Tea Party was a protest against the East India Company. The Revolutionary War was fighting against their "second class citizenship" and taxation without representation of England. This letter is just a propaganda piece in favor of fascist and socialist ideals, that the left is attempting (and unfortunetly succeeding) to brainwash the "We the people." MJH, read "Common Sense" the argument in favor of the Revolutionary War, and tell me why the war was fought. "

Raven wrote on Jul 4, 2009 7:51 PM:

" anticommie, there were as many reasons people fought in the revolution as there were people fighting.....there is no one reason that was universal. "

russ wrote on Jul 4, 2009 9:27 PM:

" Bauhaus and raven,

Simple. the public option will win out over private options because it will be cheaper, subsidized by taxpayers. "

Raven wrote on Jul 5, 2009 10:29 AM:

" Nice to be able to declare that, russ, without have a plan actually available...and what does that say about how competitive the private companies actually are?...Plus, is it truly a bad thing for people to actually have less expensive health care? "

freeport56 wrote on Jul 7, 2009 5:20 PM:

" Raven-

the public option HA! The Administration announced that those not choosing it will be fined $1,000.00

Cheaper, off the blood and sweat of the working class. "

Raven wrote on Jul 8, 2009 12:05 AM:

" no, freeport, it was the senate and what it said was people not choosing ANY form of health insurance could be fined. "

ampsthelena wrote on Jul 8, 2009 10:14 PM:

" Derek, as a socialist I want to thank you for pointing out what should be obvious, namely, that bailing out the banks while refraining from bailing out state budgets which provide for health care, transportation, education, etc. is certainly not "socialism".

As a nation we truly need to debate (at great length, beyond soundbites) the issue of the creation of wealth and its distribution. "

anticommie wrote on Jul 9, 2009 5:59 PM:

" ampsthelena"

As a self described "socialist" you should be thrilled with the government takeover of the banks, and GM. We on the right, not the GOP, have been complaining for sometime the growth of our federal government. You on the other hand only support government takeover when a Democrat does it, but if it is a Republican, you scream foul.

As far as the debate om creation of wealth and its distribution, you and I will never find a common ground, because we differ on what that exactly means. I will never bow down to you train of thought, because of the liberties that are lost by focusing on the common interest instead of self interest. In the definition set forth by a very interesting individual, Ayn Rand, your train of thought is what is called "looting" or "mooching." "

glenroy wrote on Jul 10, 2009 8:58 AM:

" What a crack up….reading the squirming libs while they duck and spin… one theoretical excuse after another… yet not one of them can even manage giving away tax payers money, let alone a private sector business which is infinitely more difficult….they ‘think greed’ but they couldn’t last in that ‘greedy position’ long enough to get fired... LOL…they wouldn’t make it through probationary employment…. the stress would wilt them like a turnip on a blistering Calistoga day. I’m talking personal experience here….working both sides for the past 30 years….successfully.

The bottom-line in modern liberalism is when government fails blame the market, particularly big business, blame the tax payers, blame the church, ….blame anybody dumb enough not to defend themselves. It worked we now have the most unqualified President in our nations history.

A few pointers:
It was liberalism and corrupt Democrats who mismanaged and then brought down Freddie and Fannie.

It was liberalism and Democrats who through Freddie and Fannie mandated Banks to lend a certain percentage of their portfolios to those the banks knew would NOT REPAY THEIR LOAN.

It was liberalism that implemented our growing dependnce of foreign energy…though we have the worlds largest energy reserves.

It was liberalism that protected the corrupt Wall Street Democrat donors…like Madoff, like Soros who made 4 billion on the collapse.

It was liberalism that has now spend 15 trillion dollars on the war on poverty….without moving the poverty level a fraction of a percent.

It was liberalism that kowtowed to government employee unions which ultimately bankrupted this state and every other state run by liberals.

But it’s the markets fault….LOL….some people are just dumb 24/7/365 for life, and there‘s not a darn thing any of us can do about it. "

post-it wrote on Jul 10, 2009 1:18 PM:

" Kevin,

It is easy for the government to mandate state's actions without creating a specific law. Take the 21 y/o drinking age. States are free to set it at any age they want, however, if they create a drinking age less than 21 they loose federal highway funds. I believe it is a crime that 18 year olds can go to war and vote but can't legally buy a drink.

The fed could tell the states they will loose fed health care funding if they don't comply with mandatory insurance coverage.

Glenroy,

Plenty of conservatives are to blame for many of the problems you listed too. It would be better stated that special interests supported all of the "evils" you listed.

Both Democrats and Republicans are interested in big governement, they just want big government to serve different means.... "

ampsthelena wrote on Jul 10, 2009 3:27 PM:

" Anticommie,
You said that I, "as a self described socialist...should be thrilled with the government takeover of the banks, and GM."

Here's why I am not "thrilled":

1. Government ownership is not the same thing as "socialism". It depends on the nature of the government. We have a "democratic" government whose "demos" is the capitalist class--not the working class. Hence, a takeover of banks and factories by the capitalist class via the instrument of the government is by no stretch of the imagination "socialist". It was merely a "capitalist restructuring" (Gorbachev called it "perestroika").

2. The takeover does not address the fundamental contradictions of the capitalist system; that is, it is not aimed at dismantling the capitilast system; rather, it is designed to keep that system afloat in some form or another, with the exploitative class relationships essentially intact.

3. The takeover was not democratic; the majority of working-class people had little or no say in it. Hence, it was not "socialist". It was a kind of "insider" job (by "insider" I mean within the ruling class). "

Madison Jay Hamilton wrote on Jul 10, 2009 4:23 PM:

" Government employees did not bankrupt California. "

anticommie wrote on Jul 10, 2009 8:45 PM:

" ampsthelena:

The bailouts and government takeovers of these industries ARE indeed socialist in nature, maybe more along the lines of fascist, because the government has a say in what is going on, but the private sector still runs them. Aren't you glad that YOU have ownership in GM?

The takeover was democratic (probably not Constitutional), because the "working class" voted these people in, and they passed these measures in the name of the people. At least so they say. The government (mainly the Democrats Party) passed these measures of the "stimulus" package, which is failing, and now they are talking about passing another! Ludicrous!

Socialism is very much like a democracy in the sense that there are many forms of it.

Also there will ALWAYS be a "ruling class" that you speak of, our duty as members of a Republic is to give them the least amount of power as possible, but those of the liberal persuasion, and some in the Republicans, want bigger government intervention and power. Look at the current president! "

ampsthelena wrote on Jul 10, 2009 10:32 PM:

" anticommie,
You're right: people mean different things by the word "socialism", "democracy", etc.

But almost ANY definition of socialism requires a stand against capitalism, and this bailout is NOT about ending capitalism. You are right when you say it is more along the lines of fascism, though I hope it isn't really going in that direction (though it may be).

I thoroughly disagree with your assumption that the "working class" voted these people in. In a formal way, yes, we did. But, of course, there is NO "working class" party or candidates to choose from (both parties are capitalist parties); and MONEY runs the whole electoral show.

And our system of government does not give much democratic control over or input into the actual running of the state (and almost none at all into the running of the economy).

I agree with you on this: as members of a republic, it is our duty as citizens to exercise as much democratic control over the government as possible. But whether that means "less" government or "more" government is debatable. What is for certain, however, is this: it means a DIFFERENT kind of government.

As a socialist, I would add that it is our duty as citizens to advocate for more democratic control over the economy as well. A profit-driven economy, where the major means of production are in private (unaccountable) hands, and the crises are crises of OVERproduction, and there is scarcity in the midst of abundance--this kind of economy is leading the planet to disaster. "

ampsthelena wrote on Jul 10, 2009 11:06 PM:

" Anticommie,
you said,
"In the definition set forth by a very interesting individual, Ayn Rand, your train of thought is what is called "looting" or "mooching."

Yes, Ayn Rand IS interesting. I've read her, and found many of her ideas persuasive, but not ultimately convincing. Still, if I read her again, who knows?

But don't forget: Ayn Rand was reacting against STALINISM. Not socialism. The two are very different. Yes, Stalin CALLED his system "socialism", for propagandistic purposes, just as ANYTHING that the US government does is done in the name of "democracy" or some such such thing (no matter how anti-democratic it might actually be). We have to look BEYOND the propagandistic labels if we want to understand anything.

It's not "looting" if you are taking back what is rightfully yours.... Do you really think people like Bill Gates really and truly have the RIGHT to billions upon billions of dollars? The "legal" right, yes (just as plantation owners had the "legal" right to own slaves). But the MORAL right? Certainly not. Did Gate really, individually, contribute billions of dollars worth to the economy? Does his income really reflect his economic contribution? Certainly not. It is STOLEN money--stolen by the system of "wealth distribution" called capitalism which concentrates wealth at the top. "

ampsthelena wrote on Jul 10, 2009 11:15 PM:

" Anticommie,
you said,
"I will never bow down to your train of thought, because of the liberties that are lost by focusing on the common interest instead of self interest."

We need to focus on BOTH: common interest and individual interest. Socialism is about BOTH. You can't have one without the other.

BOTH.

Besides, under a capitalist democracy, the working class is almost always voting against its own self interest.....

You have to face the fact of class conflict: the objective economic interests of the capitalist and worker are simply not the same. In fact, they are opposed to one another--as anyone who asks for a raise discovers.

Capitalist ideology tries to obscure that conflict in many ways--either by fascistic intimidation (McCarythism, strike-breaking, anti-union legislation), propaganda (e.g. identifying Stalinism as "socialism"), diversion (some common "foreign" enemy or threat), or nationalism (some fictional "national" interest we all have in common, when in reality the American workers have more in common with Mexican workers than either have in common with their own ruling classes).

Capitalism DESTROYS individual freedoms, and pits man against man. "

ampsthelena wrote on Jul 10, 2009 11:27 PM:

" freeport,
You speak dispargingly of the 1917 Russian revolution. It got Russia out of the imperialist war, was achieved with almost no loss of blood, and was the greatest advance in real democracy the world had known up to that point: far superior to the American revolution in terms of the individual freedoms and democratic institutions it created.

But then, as so often has been the case since then, the powerful Western capitalist countries (including the US) invaded the Soviet Union and backed the COUNTER-revolutionaries, plunging Russia into bloody civil war, thus effectively destroying the socialist revolution, and paving the way for Stalinism.

Did you know that the US invaded the Soviet Union....?

And we blame the RUSSIANS for starting the arms race with us....??????

Stalin SUCCEEDED in his goal: he turned backwards and decimated Russia into a world superpower in under 70 years. But he did it the capitalist way: on the backs of and at the expense of the workers. He did it as an anti-soviet and anti-socialist dictator. Not a democratic socialist.

The West is partly responsible for turning the Russians from socialism to Stalinism. Russia had been invaded and decimated twice already by the West: WWI, and WWII. And then, after their revolution, the West invaded AGAIN. And we're suprised they turned into a "paranoid" military-industrial complex? "

anticommie wrote on Jul 10, 2009 11:41 PM:

" ampsthelena wrote on Jul 10, 2009 11:27 PM:

"...when in reality the American workers have more in common with Mexican workers than either have in common with their own ruling classes)."

The fact you are refusing to
acknowledge is that there will ALWAYS be a "ruling class." One of the great myths about socialism is that there is no class structure under it.

The Marxist theory of, "From each according to his ability, to each according to his need" is fully embraced by communists and socialists like yourself. This thought of taking from one and distributing it to everyone else is the loss of more liberties than one can type on this blog. Capitalism infact CREATES freedoms by allowing one to be better than the other, because there is always someone bigger and better than yourself. If that bigger and better person is forced to work for the benefit of everyone else, where is the freedom of that? If I want to be a selfish bussinessman, than that is my FREEDOM to be so. Self-interest benefits society much more than you accept, but if me being a bussiness owner, creates jobs for your "working class," then that is by default benefiting the "common good" that you so crave. I will not be told that common interest is more important than what is best for me, because I know what is best for me, not anyone else. "

ampsthelena wrote on Jul 11, 2009 3:49 PM:

" That's right. I fully embrace "from each according to his ability, to each according to his need"--conditioned by democratic mechanisms.

It is capitalism that has "taken from" the MANY and put "profit" (the part of the wealth stolen from the working class) in the hands of the FEW.

Captalism is not a "natural" or "inevitable" system. It is MAINTAINED by the capitalist state, and the force wielded by that state.

You speak of "being forced to work for someone else". Well, you just described the capitalist system in a nutshell.

The present system of distribution of wealth did not come about by "individual hard work or merit" or something like that; it comes from a very long tradition of systematic exploitation of humankind by a very small minority. The very land you pride yourself on owning and calling "yours" came from annhilation of the people who once lived here. And most of the capital acculumation in the world has come from the European colonial and imperial rape and subjugation of the entire world.

Don't let the bogeyman of "Stalinist Russia" twist every thought you have about "socialism".

I too believe in self-interest benefiting society. Especially the self-interest of the working class taken as a whole. Socialism is not based on "altruism". It is based on rational recognition of common interest (enlightened self-interest, if you will).

By the way, don't confuse Adam Smith's kind of small-business capitalism with "Kapitalism" as it actually exists today..... Adam Smith I actually agree with, to a large extent.

And it's not that I see NO dangers in socialist theory. I do. But compared to capitalism, well..... "

anticommie wrote on Jul 11, 2009 8:40 PM:

" ampsthelena wrote on Jul 11, 2009 3:49 PM:

"You speak of "being forced to work for someone else". Well, you just described the capitalist system in a nutshell."

You are NOT forced to work for anybody under capitalism, you do so at your own free will. If you dont want to work for someone else, START YOUR OWN BUSINESS! Simple as that. "

anticommie wrote on Jul 11, 2009 9:02 PM:

" ampsthelena wrote on Jul 11, 2009 3:49 PM:

"I too believe in self-interest benefiting society. Especially the self-interest of the working class taken as a whole. Socialism is not based on "altruism". It is based on rational recognition of common interest (enlightened self-interest, if you will)."

Enlightened self-interest? What a concept! So basically your are saying that self-interest is fine with you as long as it is second to common interest!? Socialism is the forcing of people to become "enlightened" in favor of the common good. But it takes everybody to agree the same way in order for your utopia to exist. Everyone has their own opinions, and when one person strays from your "enightenment" the system becomes broken. What is your definition of "Enlightened?"

Socialists love to say the Capitalist takes from the many and gives to himself, but it is the politicians that do this, not the businessman. Capitalists employ people that do indeed help make the owner money, but this is not a bad thing, socialists try to make it that way. Socialists first propaganda piece used to sway people to their side is to create a warfare between classes, and make the little guy feel he is ENTITLED to the success of a successful persons hard work. That is the looting of someone else's property. You truely believe you are entitled to the business owners success? "

anticommie wrote on Jul 11, 2009 10:59 PM:

" " ampsthelena wrote on Jul 11, 2009 3:49 PM:

"You speak of "being forced to work for someone else". Well, you just described the capitalist system in a nutshell."

One more thing on this statement, with your rational, you are saying that under socialism, you are working freely, but in reality you are BEING FORCED TO WORK for the same gain as everybody else. There is no chance to rise to a level of upperclass living under socialism. Where is the freedom with that? "

ampsthelena wrote on Jul 12, 2009 8:34 AM:

" anticommie,
Life itself "forces" us to work: if we don't "work", we don't eat.

No social system can avoid some kind of "obligation". Under capitalism, the vast majority are obliged to work for someone else, under conditions they have no control over, making things they have no personal investment in; and, to top it all off, they usually get a far smaller portion of the wealth they helped to produce than those at the top who actually contribute LESS to the creation of the actual wealth than they do.

Under "socialism" (remember, there are many possible forms of "socialism"), people would still "have to" work, yes. But they would have far more say in the kind of work and the conditions of work and they would share far more equitably in the wealth they themselves create.

It would be a little like comparing working for a company that could hire and fire at will, and working for a company that had a good union (not a corrupt union) which looked out for the workers' interests and forced the bosses to share the wealth a little more equitably.

Unions, however, merely negotiate the terms of exploitation. Unions are not "socialist". They are merely workers organized WITHIN capitalism, as part of the capitalist system.

Try to imagine that qualitative leap from mere "negotiated exploitation" to the elimination of exploitation by one class over another.

That is, if you WANT to try to imagine that.... "

ampsthelena wrote on Jul 12, 2009 8:43 AM:

" anticommie,
"class" in Marxism is defined by one's relationship to the productive forces in society (the land, the factories, capital, etc.). You can be "rich" and still be "working class" if you, yourself, do not legally own your own business and have a real say in the conditions of your workplace.

There could be different levels of relative wealth in a socialist society--within certain limits (excluding starvation next to mansions).

But in capitalist society, "rising" into the upperclasses involves either direct theft, or the use of wealth already stolen by someone else, or the directg exploitation of workers in some way. The land itself is the prime example: even if you legally "buy" land today, you are still buying stolen land. And most of the "capital" you "borrow" from a bank came from the primitive accumulation of capital under colonialism and imperialism--and that involved theft on a huge scale. And, if you start your own business, and if you are in competition with other businesses like yours, then you are forced to exploit your workers to maintain a profit margin high enough to compete.

That doesn't make YOU "bad", and it doesn't make YOU a "thief", but, if properly understood, it should lead to a re-examination of the fundamentals of the system itself...which leads to the embracing of socialism. "

Mr4 wrote on Jul 16, 2009 9:29 PM:

" amp wrote "That's right. I fully embrace "from each according to his ability, to each according to his need"--conditioned by democratic mechanisms."

Every society will have a percentage of their population embrace the Marxist ideal as stated above. Typically, such people are those who have obtained below-average results in the free market and are so envious of the achievers that they would rather have the entire society reduced to the lowest common denominator than to suffer the indignity of being "below average". Less common are those who may be wealthy but who obtained their wealth due to the efforts of others, e.g. parents or even spouses. They are driven by a sense of guilt and support liberal causes in order to gain a sense of self-worth. Some get carried away and get suckered in by the utopians.

It doesn't matter that the lowest achievers in a free society have a much higher standard of living than the "average citizen" under a statist regime. Supporters of statism are so consumed with the utopian ideal of equality of outcome that they are intellectually incapable of comprehending the actual horrors that their philosophy produces.

Amp, in your case you embrace a very strange interpretation of Russian history in order to rationalize your sacred ideal.

All in all, a very sad state of being. "

anticommie wrote on Jul 17, 2009 12:38 AM:

" ampsthelena

Please answer this very simple question: You truely believe you are entitled to the business owners success? "

Raven wrote on Jul 17, 2009 9:18 AM:

" When the business owner's success is built upon the labor of others, I can see amps point, without the 'capital' provided by the labor...where is the success? "

glenroy wrote on Jul 17, 2009 9:55 AM:

" ‘Amps ‘definition of Marxism is so far off base it sounds like Obama psychobabble…

There is one simple truth about life….unless you’re born into wealth, or steal your nations wealth like the liberals running the Democrat Party…. wage earners are going to be exploited. The difference between socialist-marxist societies and free enterprise is the former offers no opportunity to improve ones standard of living because out side of the cost to produce the commodity the Communist, or now the Democrat Party retains the earnings…..…while the latter places no insurmountable obstacles to improving ones lot relative to effort…at least until Pelosi became speaker and Obama became the Head Rapper.

There in is part of the problem….modern day liberals believe they deserve what they haven’t earned while those who have earned don’t deserve. "

Mr4 wrote on Jul 17, 2009 1:59 PM:

" 'capital' provided by the labor...where is the success? "

Raven, where is the success? How about in the employee's ability to earn a living and raise his/her family?

Without the business owner the employee suffers - ask the 10%+ who trusted "Hope and Change" and are now out of work! "

anticommie wrote on Jul 17, 2009 10:14 PM:

" Raven wrote on Jul 17, 2009 9:18 AM:

" When the business owner's success is built upon the labor of others, I can see amps point, without the 'capital' provided by the labor...where is the success? "

Well of course business owner's success if built upon the labor of others! The employee is compensated for their time through wages. Raven and amp think that this is unfair! What is unfair is the socialists trying to take what the entrepreneur has rightfully worked for. It is the entrepreneur that takes the risk of losing everything in order to gain their wealth. The employee takes none.

Leftists think that ALL entrepreneurs are bad immoral human beings. This is simply not true. I have had lots of jobs, and 99% of the people that I have worked for have been very decent people, and I would NEVER think about looting their success because they are just that, SUCCESSFUL.

The free market is the best solution for individual liberties in a society, and the more the leftists complain the more credibility they lose by doing so.

Through the freemarket, America has become the envy of the world of business, until the Liberals in politics and their constintuents, have destoyed what makes this country great. The conservative is proud of their individual wealth, while the liberal feels guilty for their own success. If you think that I shall ever stray from these ideals, you are sadly mistaken, and I will fight to the end to make sure that my children have the same opportunity at success that you and I do, even though the left wants to destroy it. "

ampsthelena wrote on Jul 17, 2009 10:27 PM:

" anticommie,
You asked me if I truly believe I am entitled to the business owners success...

What I would say is this: the wealth created by the combined efforts of the business owner and his workers is not shared in a way that accurately reflects their respective contribution to the production of that wealth. "

ampsthelena wrote on Jul 17, 2009 10:29 PM:

" glenroy,
What is your definition of Marxism? "

ampsthelena wrote on Jul 17, 2009 10:31 PM:

" Mr4,
Where does "profit" come from? "

anticommie wrote on Jul 17, 2009 11:28 PM:

" ampsthelena wrote on Jul 17, 2009 10:27 PM:

" anticommie,
You asked me if I truly believe I am entitled to the business owners success...

What I would say is this: the wealth created by the combined efforts of the business owner and his workers is not shared in a way that accurately reflects their respective contribution to the production of that wealth. "

Are you running for political office, or just walking around the question? "

anticommie wrote on Jul 17, 2009 11:30 PM:

" ampsthelena wrote on Jul 17, 2009 10:31 PM:

" Mr4,
Where does "profit" come from? "

Amount of product sold. "

ampsthelena wrote on Jul 18, 2009 8:07 AM:

" anticommie,
Not sure if my last post went through (my computer lost internet connection briefly), so here it is again:

Yes, profit is ultimately taken out of the total amount of money made by selling a certain amount of product. But profit itself is what is left over after the capitalist has paid for cost of production, which basically means material costs, and labor costs. Profit doesn't come directly from "amount of product sold". It comes from taking a share of the wealth created by production.

Next question: what determines the profit MARGIN, that is, what determines how much of the money generated by the selling of the product the workers get, and how much the capitalist gets? "

ampsthelena wrote on Jul 18, 2009 8:25 AM:

" anticommie,
"walking around the question"....?

I hope you realize the nature of your question: it was unanswerable. It was a "set up". Do I think I am "entitled to the business owners success..."???? Come on.

But I'll try again anyway. The business owners owes part of his success to the workers. In fact, the workers are essential to his success. He would have no business at all if it weren't for the workers (whereas the reverse is not necessarily true: people CAN farm and produce without bosses, but not vice versa). And if it weren't for other workers who buy his products, he would have no customers at all.

Capitalist relations seem "normal" to us only because of their familiarity. For example, it seems normal for us to have winery owners wearing shoes that cost more than a week's salary of one of their workers. It seems normal for us to have the majority of wealth in the hands of a tiny minority.

But it once seemed normal to have kings force peasants to work for him; or to have slaves.

And, of course, all these things ARE "normal" if by that we mean "the norm" for a given time and place. But they are INHUMAN. Capitalist relations are INHUMAN.

A capitalist, individually, DOES NOT contribute 100 or 1000 or 10000 or 100000 times as much value to the economy as a grape picker, a teacher, a fireman, or a housewife. And yet, because capitalists rule, they have set it up so that they DO get most of the wealth, far in excess of their personal contribution to its creation. "

ampsthelena wrote on Jul 21, 2009 8:52 AM:

" anticommie,
You often extol the virtues of capitalism as a great "wealth-producing" system.

In that, you agree with every Marxist. The profit-driven competitive economic system DID create great wealth. AND great poverty.

And therein lies the great contradiction of capitalism: it creates great wealth but has no way of distributing that wealth in ways that reflect each persons real contribution to the production of the wealth, and in ways that provide for real human needs. "

Join the conversation

*Member ID:
*Password:
Remember login? (requires cookies)
	Forgot Your Password?

Create an account

Comment Guidelines

The goal of the story comments section at NapaValleyRegister.com is to have an open, thought-provoking, civil community forum for all issues.

What gets your comment posted?

• Staying on topic

• Keeping your comment to 300 words or less

• Avoiding name-calling

• Addressing your comments to the message rather than the messenger

What gets your comment deleted?

• Personal attacks

• Derogatory remarks

• Name-calling of any sort

• Going off-topic

• Hate speech

• Racially-insensitive comments

• Implying guilt of a subject in a crime story before there is a court verdict

• Posting e-mail addresses

• Posting comments of a commercial nature

• POSTING WITH ALL CAPITAL LETTERS

• Linking multiple comments together with "to be continued..." to get around the 300 word limit.

The fine print

- Comments are either approved or denied. We do not edit comments.

- You are welcome to modify and resubmit a denied comment.

- Comments may take several hours to be posted.

- Comments posted are those of the writer, and do not necessarily reflect the opinion of NapaValleyRegister.com, its employees or its parent company.

- Do you have information on a story? Please go to our virtual newsroom to send us a news tip.

- If you feel a posted comment has violated our guidelines, please contact online@napanews.com or add a comment indicating you have an issue and our moderators will review the comment in question.

Search: