Capitalism Produces - Socialism Distributes

[dissident junk]

Ever wondered why that period produced the effect it did? It happened at a time of increasing consumerism but also of increasing state welfare, so what was the link? And why did the Thatcher government see it as a threat, and construct policies to destroy it? Why create policies whose sole purpose was to establish a divide between various sectors of society? Is it because one of the de facto conditions of a capitalist market, is the need for well defined strata in society, those that have and those that do not. Capitalism cannot function without these well defined strata, belief in capitalism and the free market is a belief in the oppression and exploitation of one strata of society by another. It is really that simple. The history books are as someone else mentioned full of this stuff, it is not new, and it didn't start in the 1800's, the same way as gravity didn't start when Newton flopped down beside a tree. Capitalism is the archetypal bubble machine of wealth and the concentration of privilege to an ever decreasing circle, revolutions are it's end result, but then it starts over again and again...

The golden era after the second world war was in part due to these boundaries being dissolved or blurred for a time, it's a shame we couldn't keep that experiment going to see where it went, instead we had houses as investments and everyone wants to be a millionaire by this time next year.

Hummm ... I think it is possibly a lot simpler than that.

I think, at heart, the social mobility of the 60s to the 90s is down to two events: the first world war and the second world war.

I'll explain why I have come to this conclusion.

No.1) The first world war wiped out vast swathes of 19th century financial capital. And this is quite important because the first world war destroyed a lot of the endowments of British universities and colleges, a predicament that meant many British universities had to go cap in hand to the British government to ask for help with funding after the war. And once the government got involved with funding higher education, it provoked the catalyst for the democratisation of higher education.

No.2) The sheer loss of lives in the first world war shattered people's belief in the 19th century institutions that upheld the status quo and were perceived thought to uphold stability and peace: namely, the church and the state. The impact of this loss of belief cannot be understated: it destroyed the very foundations of society and culture. There was no going back to the world of the Victorians, with its strict socio-economic strata, because the very foundations that unpinned Victorian perspectives on the world had been irrevocably damaged.

No.3.) The first world war wiped out nearly 900,000 men of working age (mostly young), and injured 1.5 million. The country itself lost about 3.3 million people between 1914 and 1921. After the war, the sheer scale of this absence was felt in almost every town and village, and had the knock on effect of repressing population growth in the 20s, 30s and 40s (we still had less people in 1931 than in 1911), and when the pool of demand decreased, opportunities that were a prewar legacy had less competition. Again, the need for women workers during the first world war started the collapse of strict gender employment division, increased women's participation in the trade unions movement, and the need for votes during the war sparked the extension of the franchise to women over 30.

No. 4) The return of working class soldiers who had fought in the war provoked campaigns to better the plight of the working man: "home for heroes", increased trade unionisms, strikes etc.

The first world war blasted Britain out of the 19th century and its Edwardian legacy: its economics, its society, its culture, its morality. Not only that, but it destroyed the next generation of young men that would have stepped into their elite forefather's shoes; public schools saw significant numbers of their prewar pupils killed in battle.

Then you get onto the Second World War, which pretty much does the whole thing all over again, except this war leaves Britain bankrupt and Britain cannot return to the pre-war gold standard.

Then you get the baby boomers, where the era of social mobility really starts ... they are born into a country where the old Victorian socio-economic systems have largely been destroyed, and where their working class parents have decent housing for the first time.

Furthermore, and more importantly, they are not competing against a full quota of older working people (because a lot of them don't exist: either killed in war or never born because their potential fathers were killed in battle). There aren't very many people around that are, say, one to ten years older than them: for a baby boomer born in 1945, there are only 6 million people in Britain that are one to ten years older than him/her and only 12 million people one to twenty years older; compare that to a child born in 1970 who has 8 million people one to ten years older, and 15 million people one to twenty years older than him.

In short, this generation has more access to more resources, more opportunities and more freedom (all of which enable social mobility), simply because of the historical circumstances in which they were born, and those circumstances were created by the consequences of war.

And that unique position lasts for their generation. The most striking thing is how much social mobility in Britain starts tracks the baby boomer generation: it starts with the first baby boomers, who enter work/higher education in the early 60s, and what do you notice? How everyone starts to talk about "the death of social mobility" at nearly the precise point those first baby boomers retire: ie the last few years.

I strongly suspect the social mobility of the 1960s to 1990s is a historical anomaly caused by the consequences of the impact of the world wars. And if I am right, then in order to restart social mobility, the best way to do so would be to recreate those conditions once more. And then the question becomes: what where the most important conditions for social mobility back then, and why?

[LJAR]

Late post again, but I have lived and worked with people on the minimum wage in the USA and in the UK.

The USA was better in my opinion.

As for the healthcare - believe what you will, many people who are young and healthy simply don't need it at all.

[South Lorne]

.........

.....I strongly suspect the social mobility of the 1960s to 1990s is a historical anomaly caused by the consequences of the impact of the world wars. And if I am right, then in order to restart social mobility, the best way to do so would be to recreate those conditions once more. And then the question becomes: what where the most important conditions for social mobility back then, and why?

....interesting post....

[miko]

Late post again, but I have lived and worked with people on the minimum wage in the USA and in the UK.

The USA was better in my opinion.

As for the healthcare - believe what you will, many people who are young and healthy simply don't need it at all.

Untill they do and have not got any.

[alexw]

Late post again, but I have lived and worked with people on the minimum wage in the USA and in the UK.

The USA was better in my opinion.

As for the healthcare - believe what you will, many people who are young and healthy simply don't need it at all.

No, they believe they don't need it which is quite a different thing. That is until they are involved in a car accident, or get involved in a fight and need stitches, or break bones during sports, or catch something because they didnt use protection, etc.

And let me add another little fact about the US healthcare system to show how bonkers it is. 60% of all bankrupties in the US are due to healthcare bills, and ~75% of those were medically insured when they became ill.

[babesagainstmachines]

A typical leftie trait. Never argue for the positives of your own ideas, just attack the right for being heartless capitalist bastards.

NuLabour are experts at this particular line of inquiry.

This is exactly what this entire thread is doing. Attacking the left with rhetoric, not with evidence.

Capitalism by its very nature concentrates wealth. People who start with nothing can become successful, but the odds are weighted very much in favour of those who have inherited connections and/or wealth. For capitalism to benefit the many, it needs redistribution of this wealth, or you will simply end up with a class of super-rich owning everything, and everyone else scrambling around for jobs that satisfy their needs, then paying everything they earn back in various forms of rents.

We have never seen a purely capitalist state, nor have we seen a socialist state, so any arguments for or against either system can only be based on the beliefs of the debater. This leaves us with the only thing to debate the basic premises of the idealogies, and I find the socialist one is based more around humanity then the capitalist one.

Do continue with your "leftie bashing though", it show your true colours.

[Authoritarian]

This is exactly what this entire thread is doing. Attacking the left with rhetoric, not with evidence.

Capitalism by its very nature concentrates wealth. People who start with nothing can become successful, but the odds are weighted very much in favour of those who have inherited connections and/or wealth. For capitalism to benefit the many, it needs redistribution of this wealth, or you will simply end up with a class of super-rich owning everything, and everyone else scrambling around for jobs that satisfy their needs, then paying everything they earn back in various forms of rents.

The left recognised this over 60 years and so they started the welfare state, yet despite the benefit handouts, the NHS, the 'redistributive' taxes and continued government interference into every aspect of our lives we're still no closer to solving the basic economic problem; scarcity.

The left (and the tradition right for that matter) have had a fair crack of the whip and both ideologies have culminated in disaster. The left are much better at producing scarcity than the right - just check out any communist regime for proof of this - but the right have huge flaws in their economic and political outlook too.

We have never seen a purely capitalist state, nor have we seen a socialist state, so any arguments for or against either system can only be based on the beliefs of the debater. This leaves us with the only thing to debate the basic premises of the idealogies, and I find the socialist one is based more around humanity then the capitalist one.

There's plenty of evidence around if you care to look. Cuba, North Korea vs South Korea, China pre and post communism, East Germany vs West Germany, the West vs the East during the cold war, they all give you a clue as to how leftist regimes pan out in comparison to their capitalist neighbours.

I know plenty of Polish people and the stories that have been handed down to them by their parents are crazy. Even now, 20 years after the collapse of communism the country is still suffering from massive corruption, if you want anything done you must first bribe the appointed gov't official. The mentality of freedom was obliterated in a whole generation of poles and they'll go to their grave still ******ing each other over to get by rather than bothering to work for a living. The same mentality has brought this nation to the brink of bankruptcy.

Edited July 4, 2010 by Chef

[Oliver Sutton]

This is exactly what this entire thread is doing. Attacking the left with rhetoric, not with evidence.

Exactly.

When you provide examples of successful socialist countries they simply try and re-brand them as capitalist.

[LuckyOne]

The arguments in this thread are really just about the optimal size of the state. There are a few broad groups represented here :

1. The state should not exist.

2. The state can provide some things more efficiently than the private sector. The optimal size of the state is around 25% of GDP.

3. The state can provide some things more effectively than the private sector. As a cost of living in a society, the better off should be prepared to provide a reasonable quality of life for those who are truly unable to provide for themselves. The optimal size of the state is about 35% of GDP.

4. The private sector has a responsibility to share its output society to ensure a good standard of living for all their citizens who want it which is more important than the absolute level of returns to shareholders. The optimal size of the state is around 55% of GDP.

5. The private sector is extracts rents and concentrates wealth at the expense of society. The returns on private sector effort add no real value to society and should be retained for the benefit of society. The optimal size of the state is around 70% of GDP.

6. The state knows better than the individual in all instances. There should be no private sector. The state should account for 100% of GDP.

Idealistically, I fall into 1. On a practical level, I fall into 3.

A further dividing line is in the treatment of illiquid and insolvent businesses :

1. Businesses that fail should go bankrupt.

2. An argument can be made that illiquid but solvent businesses might be eligible for short term state support.

3. Businesses that are important to the nation should be prevented from going bankrupt when they fail.

I fall into 2. in this case. For the life of me I cannot understand why bankrupt banks were purchased by the state on behalf of taxpayers at the wrong price.

[LuckyOne]

Exactly.

When you provide examples of successful socialist countries they simply try and re-brand them as capitalist.

That was me.

I see it differently : you present a list of successful capitalist societies with progressive policies and re-brand them as socialist.

[R K]

It wasn't Capitalist's that made the decision to bail the banks out though, was it?

Bear Sterns, Lehman or Goldman Sachs?

I seem to recall it was Hank Paulson (him with the $500m tax free in his back pocket) who bailed out Goldman Sachs by holding a gun to the US govt. Remember his 'with immunity from all legal recourse' memo?

The rich kept their assets, the poor are about to lose them.

Give it whatever label turns you on.

Unless you're one of the 1 in a thousand or so, then they're stealing from you. Does it make any difference what you call this theft?

[LuckyOne]

Bear Sterns, Lehman or Goldman Sachs?

I seem to recall it was Hank Paulson (him with the $500m tax free in his back pocket) who bailed out Goldman Sachs by holding a gun to the US govt. Remember his 'with immunity from all legal recourse' memo?

The rich kept their assets, the poor are about to lose them.

Give it whatever label turns you on.

Unless you're one of the 1 in a thousand or so, then they're stealing from you. Does it make any difference what you call this theft?

Bailing out GS (and everyone else) at par for all of their exposure to AIG and others was either a massive case of ineptitude, fraud or theft.

I don't agree that all of the rich have kept their assets during this implosion.

[Oliver Sutton]

The arguments in this thread are really just about the optimal size of the state. There are a few broad groups represented here :

1. The state should not exist.

2. The state can provide some things more efficiently than the private sector. The optimal size of the state is around 25% of GDP.

3. The state can provide some things more effectively than the private sector. As a cost of living in a society, the better off should be prepared to provide a reasonable quality of life for those who are truly unable to provide for themselves. The optimal size of the state is about 35% of GDP.

4. The private sector has a responsibility to share its output society to ensure a good standard of living for all their citizens who want it which is more important than the absolute level of returns to shareholders. The optimal size of the state is around 55% of GDP.

5. The private sector is extracts rents and concentrates wealth at the expense of society. The returns on private sector effort add no real value to society and should be retained for the benefit of society. The optimal size of the state is around 70% of GDP.

6. The state knows better than the individual in all instances. There should be no private sector. The state should account for 100% of GDP.

Idealistically, I fall into 1. On a practical level, I fall into 3.

A further dividing line is in the treatment of illiquid and insolvent businesses :

1. Businesses that fail should go bankrupt.

2. An argument can be made that illiquid but solvent businesses might be eligible for short term state support.

3. Businesses that are important to the nation should be prevented from going bankrupt when they fail.

I fall into 2. in this case. For the life of me I cannot understand why bankrupt banks were purchased by the state on behalf of taxpayers at the wrong price.

Good summary.

Everybody, apart from the communist and Austrian looney fringe believe in a mixed economy.

Perhaps using labels such as socialist or capitalist doesn't help.

What about monopolies though.

IMHO any service or industry deemed to be essential and is a monopoly should be run by the state.

Free-markets don't work in a monopoly situation.

There's an easy test for this. Any industry that need a government body to oversee it and intefere in the price-mechanism isn't really working in the free market.

Edited July 4, 2010 by barry

[Injin]

No clue why anyone is arguing for what the state shoudl do.

It's bust, bankrupt, ******ed.

The state will be providing you the service of big tax bills and handing nothing back very shortly.

[Injin]

Bear Sterns, Lehman or Goldman Sachs?

I seem to recall it was Hank Paulson (him with the $500m tax free in his back pocket) who bailed out Goldman Sachs by holding a gun to the US govt. Remember his 'with immunity from all legal recourse' memo?

The rich kept their assets, the poor are about to lose them.

Give it whatever label turns you on.

Unless you're one of the 1 in a thousand or so, then they're stealing from you. Does it make any difference what you call this theft?

Yes.

The reason is clear - if you don't identify what is occuring properly then you can't solve any problem except by chance.

The rich use the state to get what they want. They always have and they always will. That's one good reason why using the state is no answer to any social problem. Always, always, always the rich hijack the state in self defence when you try to use it against them.

[Oliver Sutton]

That was me.

I see it differently : you present a list of successful capitalist societies with progressive policies and re-brand them as socialist.

But one of the main premises of the OP was that socialism needs capitalism. Which I agree with.

Your definition of socialism is where everything is state run with no capitalist element.

[Oliver Sutton]

No clue why anyone is arguing for what the state shoudl do.

It's bust, bankrupt, ******ed.

The state will be providing you the service of big tax bills and handing nothing back very shortly.

Don't worry.

It'll still be delivering your pills to you for years to come.

[R K]

Bailing out GS (and everyone else) at par for all of their exposure to AIG and others was either a massive case of ineptitude, fraud or theft.

I don't agree that all of the rich have kept their assets during this implosion.

I didn't say all.

Systemically. You're missing the point.

I do find it amusing though the way people pretend they somehow fall into this category of uber-capitalists in some delusion imagining that this would somehow benefit them.

It's like they still believe that if they close their eyes and wish very hard Father Christmas will leave presents at the end of their bed.

It's truly pathetic to behold.

[Guest happy?]

http://dailyreckonin...socialist-pigs/

Failed 19th Century answers to 21st Century problems - we live in a planet of finite resources - this claptrap doesn't even begin to understand the problem.

[LuckyOne]

Good summary.

Everybody, apart from the communist and Austrian looney fringe believe in a mixed economy.

Perhaps using labels such as socialist or capitalist doesn't help.

What about monopolies though.

IMHO any service or industry deemed to be essential and is a monopoly should be run by the state.

Free-markets don't work in a monopoly situation.

There's an easy test for this. Any industry that need a government body to oversee it and intefere in the price-mechanism isn't really working in the free market.

Monopolies are a tricky one.

I can understand how you have reached the conclusion that any market which requires a government body to oversee it ought to be run by the state as it does not operate in a free market.

I have come to a different conclusion. The private sector is better at allocating capital to evolving markets (including new entrants) than the public sector so I would prefer to see regulated returns in monopolistic / duopolistic markets to maintain flexibility for the future.

The only area where I have some experience in this regard is with regulated utilities. While the private sector were pretty ruthless in extracting the most revenue possible from the rules, the overall framework worked pretty well and it was relatively easy for new entrants to enter the market as it evolved.

As should happen, one of those entrants turned out to be a crook that didn't know how to run its business properly. It went bankrupt in rather spectacular fashion.

[Authoritarian]

Good summary.

Everybody, apart from the communist and Austrian looney fringe believe in a mixed economy.

Perhaps using labels such as socialist or capitalist doesn't help.

What about monopolies though.

IMHO any service or industry deemed to be essential and is a monopoly should be run by the state.

Free-markets don't work in a monopoly situation.

There's an easy test for this. Any industry that need a government body to oversee it and intefere in the price-mechanism isn't really working in the free market.

I couldn't agree more, in fact the whole debate about capitalism vs socialism could be replaced with arguments over how to deal with effective monopolies and we could probably avoid most of the mudslinging that currently takes place and get to the heart of the problem.

People like Daniel Hannan for example don't have time for common ownership, regardless of monopolies. It's the private sector all the way with these guys even when it means handing over monopoly powers to their chums, yet, they simultaneously defend the stock market as a bastion of freedom. Despite the glaring fact that listed companies utilise a version of common ownership, so they've basically admitted that this model can work.

It should only be used as a last resort imo, but in theory I have no problem with a form state ownership if it reduces the rent seeking powers of rich individuals.

Edited July 4, 2010 by Chef

[tahoma]

Do continue with your "leftie bashing though", it show your true colours.

Being a self-confessed right winger will utterly destroy your prospects in many industries - the arts/theatre/anything public sector especially the BBC.

Anything labelled as 'right wing' is immediately associated with jackboots and the BNP, despite the left-wing roots of both.

So tell me, who bashes who?

How will your cognitive dissonance wriggle round this one?

No that I care. Reason is not automatic. Those that deny it cannot be conquered by it. Do not count on them. Leave them alone.

[LuckyOne]

I didn't say all.

Systemically. You're missing the point.

I do find it amusing though the way people pretend they somehow fall into this category of uber-capitalists in some delusion imagining that this would somehow benefit them.

It's like they still believe that if they close their eyes and wish very hard Father Christmas will leave presents at the end of their bed.

It's truly pathetic to behold.

Father Christmas did leave me my present : I live in a wealthy, capitalist society with a reasonable social safety net.

[Oliver Sutton]

I have come to a different conclusion. The private sector is better at allocating capital to evolving markets (including new entrants) than the public sector so I would prefer to see regulated returns in monopolistic / duopolistic markets to maintain flexibility for the future.

But in a monopoly situation there's no need to invest. You can simply squeeze the customer. That's why they all ultimately fail.

You only have to look at the railways. First thing they did was cut back on track maintenance and pushed up prices.

[R K]

Yes.

The reason is clear - if you don't identify what is occuring properly then you can't solve any problem except by chance.

The rich use the state to get what they want. They always have and they always will. That's one good reason why using the state is no answer to any social problem. Always, always, always the rich hijack the state in self defence when you try to use it against them.

They'll do this whether the 'state' exists or not.

If it doesn't exist you'll still be a slave.

It's just a question of degree. The 'capitalists' seem to think they'll all either be a Capo or with luck holding a machine gun, but in reality they'll still be a slave, they just refuse to see it.