Tuesday, November 1, 2016
All Saints Day
We are off to the hospital, and I haven’t read most of my mail. I found this and was going to write more on the concentration of wealth, but this will have to do.
Roberta said several words last night, and I have hopes. She thanks you all for your prayers and good wishes. More later; we’re going to the hospital now.
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2330: Spent most of the day at hospital or travelling to and from. Some critical decisions will be made tomorrow, so I won’t have much to say here now. My daughter, Dr. Jennifer Pournelle, flew in from South Carolina a couple of hours ago. We talked by videophone with Commander Phillip Pournelle from the hospital room. Frank Pournelle went home to Palm Springs after having breakfast with his mother.
I have added a few letters below the “Trouble With Marx” essay.
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Trouble with Marx
My memory fails, and I forgot the name of my favorite economist. I racked my brain to no result. I have his books upstairs, but while going up is easy, coming back down is not, and coming down carrying things is worse. Then I remembered his book, The trouble with Marx”. The economist I had in mind was David McCord Wright.
I also remembered had written about Wright’s observation that Marx was correct in some of his projections, and I had written about that, so I googled The Trouble with Marx Pournelle, which took me to an odd page: it was a serious discussion of Marx and Marxism from a long time ago. Much of it appeared in my journal at one time, including letters to me (which had full credit to the authors but there was no mention of me, ,my journal, or the original source.
The question of concentration of wealth arises again. Wright devoted some time in his book to Marx’s predictions about concentration of wealth under Capitalism, and speculated that one thing that had served the United States well was the Sherman Anti-Trust Act, and vigorous enforcement under trust busting presidents.
I wrote the following at least a decade ago. Google doesn’t show where, and I haven’t time to do other searches for the original postings. It’s still relevant, and given the situation here, I haven’t time to write on the subject.
This was sparked by a reader’s comment or essay that Marx wasn’t a Marxist in the Marx-Lenin meaning.
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Marx was a founder of the Communist International, and he did have some ideas about “the specter” that was haunting Europe. As you say he was cheering for one side in the ‘class war’, and it’s often hard to separate that from his economic analysis.
Some of his analysis is plain silly, like the “labor theory of value’. Fortunately that’s not required for his major analytical thought, because if it were a necessary assumption then Marx’s thought would be as unread as pre-Lavoisier theories of oxidation. In fact, though, the ‘labor theory of value’ was part of what you rightly call cheering, and unrelated to any objective analysis.
Marx did not understand production, and particularly had no notion of the power of technology. He thought anyone could operate the “tools” and “means of production” and that the control and ownership of the power plants and big machine tools was terribly important. That’s to some extent what misled Stalin and Mao, of course. They ought to have known better. Marx wasn’t imaginative enough to see that the Industrial Revolution wouldn’t stop with massive centralized machine shops (made necessary because energy distribution was difficult and expensive); but Stalin and Mao ought to have known that there was a Second Industrial Revolution characterized by the hand-carried quarter inch electric drill that made distributed production possible. Now we have the Third brought on by the small computer and once again all is changed. Marx foresaw none of this, and his economic analysis is based on a very obsolete theory of industrial production.
As in the computer business, hardware often trumps software. Ownership of the means of production is no longer an automatic key to wealth, nor is it all that hard to acquire the means of production. Particularly in the computer/intellectual property field, the means of production are available to almost anyone.
So much for the fundamental flaws in Marx.
Even so, Marx was certainly influential among German economic theorists, and through them Asian including Japanese; Karl Wittfogel being one of the more important. Wittfogel almost single-handedly converted an entire generation of Japanese economists to Marxism, which meant Communism, until his break with the Party over the Hitler/Stalin Pact. He later used his great familiarity with Marx’s theories to see a major contradiction in them.
One of the major attractions of Communism was being on the inevitably winning side. Communism claimed to be scientific, and its adherents were marching in step with the flywheel of history. That’s a powerfully attractive argument to some.
But in Oriental Despotism, Wittfogel pointed out that Marx himself was horrified to see a contradiction: that state capitalism, modeled after the old hydraulic societies (Egypt, Babylon, etc.) could be eternal, not evolving, because it had no internal contradictions as Marx claimed everything except the classless society would have. Marx called this “the Asiatic Mode of Production” and was intellectually honest enough to leave the speculation in Das Kapital, but not honest enough to pursue the implications: that there could be eternal states, never changing much, never evolving, with utterly despotic governments. Such states are vulnerable, but ONLY to OUTSIDE pressures; as an example, the Great Mogul Empire lasted until a handful of Europeans pushed it over. Wittfogel also showed that the USSR was very nearly such an Oriental Despotism, and that China always was one: it was when it ceased to be such under Sun Yat Sen that it became vulnerable, and Sun Yat Sen was able to bring about partial revolution in China only with outside help.
Wittfogel is important to understanding Marx because he took Marx seriously and dealt with Marx’s arguments. David McCord Wright does much the same. His book “The Trouble With Marx” was originally a scholarly work much unread, and because of that was something of a failure as a Conservative Book Club selection since many buyers through that club didn’t know what to make of an economist who took Marx seriously as an economic theorist: the were looking for an anti-Communist tract.
Lester Thurow of MIT sometimes takes Marx seriously, but not often. He is a great lecturer, and it’s always worthwhile listening to him, but his analyses tend to be trendy and topical; I am not sure I have heard much from or about him since Hillary Clinton’s attempt to “reform” American health care, a subject about which Thurow knows more than most, although I strongly question his assumptions.
Wright believed that the American anti-trust laws were the major defense against the kind of destruction that pure capitalism can bring. And of course Schumpeter looked into the face of the capitalist abyss and withdrew in horror.
One attempt to mitigate the effects of unrelieved capitalism is economic nationalism, as well as local control of institutions. By local control, I mean using zoning laws to prevent Wal-Mart from coming in and displacing all the local merchants. I won’t get into the desirability for a local community of placing large barriers in the way of Wal-Mart; I do question the sanity of national laws that prevent the local community from having a say in the matter.
Similarly for economic nationalism: while a global economy is inevitable in the long run, as Keynes said, in the long run we are all dead; what matters are the living; and a nation that allows a skilled worker with 25 years investment in a particular company to suddenly be put on the street while his job is exported to a foreign country may well enjoy cheap jockey shorts, but may also have created a disaffected class from among those formerly the most patriotic. “For a man to love his country, his country ought to be lovely,” said Burke; and a country that is more concerned with cheap goods than the employment stability of its work force, and which goes out of its way to make it easy to export jobs, may be in trouble.
Couple that with an education system almost guaranteed to produce many graduates with no skills whatever and not even the learning skills of acquiring skills, so that they must now compete for menial jobs not merely with local menials but with the entire world including a single mother in Thailand, and you have an even more interesting situation. It is an experiment I would not care to have run, but we are running it here.
A world economy is probably inevitable in the long run, but I am not convinced that marching in step with the flywheel of history is always the right idea; and I am certain that Marx had some deep insights into what unrestrained capitalism can and will do.
I always thought David McCord Wright and Wilhelm Roepke to be economic theorists worthy of far more attention than they receive, because I always thought one ought, a Schumpeter and those two did, to take Marx quite seriously.
State capitalism is every whit as able to pave the road to serfdom as is communism. One may say it won’t happen here, but the one who says that isn’t reading newspapers.
All of which points us back to Roepke’s Humane Economy; and I am out of time just now.
More another time. Thanks to all.
I seem to have missed pledge week, but a number of you subscribed or renewed anyway. Needless to say I’ve been slow in recording those the last few days, Apologies, and a great many thanks. And of course thanks to all for your kind remarks and prayers.
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What the Feds Have Done to Colleges and Schools.
<http://www.mindingthecampus.org/2016/11/what-the-feds-have-done-to-colleges-and-schools/>
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Roland Dobbins
I always opposed Federal Aid to Education – about which the Constitution says nothing and grants Congress no powers. If the Feds want to help education, let them build, in the District of Columbia where the Constitution gives Congress full powers, schools that are the envy of the world. Universities, high schools, grade schools; build them and run them well. They need not force themselves on the States. Show how they can make schools better.
For some reason they have not done this.
“It’s important to have a very large hiring pool (such as Chicago or
NYC) from which to choose enthusiastic, smart and low-paid permanent employees.”
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Roland Dobbins
I wonder if this has anything to do with the quality of the schools?
If a foreign government had imposed this system of education on the United States we would rightfully consider it an act of war.
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Customer Service
Dear Jerry,
Interesting observation you made, that capitalism concentrates on the bottom line even to the exclusion of good Customer Service. Just returned from that bastion of -relatively- unregulated capitalism named Las Vegas, and I noticed a good example of your principle in action.
In the Old Las Vegas of last century, each hotel had a buffet for when you wanted to gorge, a coffee shop for a lighter meal, and perhaps a hot dog stand on the casino floor for a quick snack. Something for every level of appetite and pocketbook.
In the New, Improved Las Vegas of these times, the buffet is still there. The coffee shop is one with the Dodo. Gone, if you don’t get that reference, which with our schools means you are under thirty. The hot dog stand is in the same “Extinct” category. Instead there is the 21st century horror familiar to all shoppers of the “Food Court”, which sounds like where you go when your order is wrong, or the bacteria level too high for human consumption, but actually is where you are given the choice of twelve different mal-cuisines, all priced at levels that ensure you cannot spend less than ten dollars for any solid food. You can get a drink for five at these monstrosities, but refills, never.
The closest thing to a cafe is some high end dinner house. So when we wanted breakfast, after arising in our comfortable and bargain priced room (got to give the rubes something to keep them coming in the doors!), We were faced with donuts and coffee, or some pink matter alleged to be eggs, on a crusty shape that might have been Torquemada’s version of a bagel if he had ever seen a bagel, or the buffet, and either way spend maybe forty bucks before they are done with you.
In a somewhat desperate move for real table service, we settled on the high end dinner house, open early for brunch. Italian themed, they “served” us a bowl of greens, a basket of bread, and two beverages. With the aid of a hotel supplied ten dollar coupon, we got out of there for not quite thirty dollars, including tip.
I can well imagine the financial analysts selling this whole idea to some MBA manager types in a corporate meeting: “We don’t have to pay staff to wait on tables, the customers do all the schlepping of food and beverage for themselves, they pick up their own trash and put it in the garbage for us, and we don’t even have to run the food operation, we just lease the space to these operators for a high dollar/square foot fee and Watch The Money Roll In!”
I noticed that almost every party in the hotel check-in line had a small ice chest on wheels, with extendable handle. Seems people are wise to this scam and are bringing their own comestibles and beverages. The Hospitality Industry has “improved” things to the point in Sin City that the “Guests” now have adopted Third World dining habits.
Ah, Sweet Idiocy, thy name is Capitalism!
Petronius
Capitalism is an economic system. It produces stuff. It is not concerned with building communities or their deterioration, or their morality. Unrestricted capitalism would result in human flesh for sale in the market place.
On the other had, too many restrictions and regulations produces depression and economic misery, and in the case of the Soviet Union, complete collapse. I foud this which also seems relevant.
On immigration, employment and welfare,
Jerry
Our biggest problem is that we are 65% employed. That’s one third of our non-retired nation sitting on their keisters collecting welfare. We can’t afford it: look at all the things that are not getting done.
So put everyone to work. Follow the ADA. If anyone is “disabled” find them a job they can do. People who can’t walk can watch screens. Ditch-digging today is done with machines. If the labor were free, we’d have people doing the labor. We’d have people to supervise sheltered workshop for EMR. Heck, EMR could dig ditches with their peers. To the point: they’d all be employed. We could ditch welfare because there would be no unemployment.
To supply all those ditch-diggers and clothing-wearers, we would buy only American-made products, putting some people to work in the private sector.
I once talked to an inmate who once worked planting trees. One year his employer didn’t call. He called the employer. The employer told him there was no work. Then the inmate saw company trucks filled with presumably illegal aliens. Now my inmate was in jail. Under the new scheme, he, any citizen who wanted work, and legal immigrants would have work. Their companies, with free labor, would underbid companies with illegal labor.
Yes, we’d have to make something so legit companies hiring legit Americans would not have to compete with free labor; but people hiring illegals would have to have a mighty fine business model to survive.
It’s the kind of solution Fred Pohl trained us to find.
Unemployed illegals, with no welfare in existence, would deport themselves.
One more thing: exempt businesses with less than 1000 workers from all/most regulations.
Name withheld
I have always believed that simply doubling the size of businesses exempt from various regulation — ten becomes twenty, fifty becomes one hundred. one hundred becomes two hundred, etc. – would greatly aid the economy with minimum effect on worker happiness. They never want to try that.
