Since mankind are not yet prepared for socialism and democracy, they must go through a period of discipline under state capitalism and fascism. Hence, state capitalism and fascism are inevitable. And because they are inevitable, history is entirely on the side of state capitalism and fascism. History speaks a language so clear and distinct that only the intellectually blind and the morally degenerate can fail to see the signs of the times.--Harry WatonPolitical democracy and economic democracy are inseparable. That is the essence of socialism.
Now, state capitalism will necessarily assume in different countries different aspects, just as private capitalism assumed in different countries different aspects; all depending upon economic and historic conditions and the degree of development of the nation. It is certain that state capitalism in this country [the United States] will not be as crude and brutal as it is in Soviet Russia and Nazi Germany. And this state capitalism is nothing else than the beginning of socialism. Stalin and Hitler made the wonderful discovery that socialism can be realized in one country, though all other countries may yet be in a state of private capitalism or even feudalism. And so, Stalin tells us that in Soviet Russia they already realized socialism, and now are building for communism; and, likewise, Hitler tells us that in Nazi Germany they have realized socialism. In both countries we have national socialism. All right, if the Stalins and the Hitlers prefer to call it socialism, we will accept their words, and we too will call it socialism. But a name does not change the character of a thing. Call it socialism, if you like, but it is state capitalism. Marx made this perfectly clear. Socialism means nothing less than the abolition of the wages system, the abolition of exploitation, and the abolition of the proletariat. Since, however, in Soviet Russia and Nazi Germany we have the wages system, exploitation and the proletariat, we have in these countries state capitalism, and this state capitalism is the beginning of socialism.I really liked the bit in episode 5 where Wolin and Hedges talk about how the Cold War set back the development of socialism in the United States. There's been a century-long delay, but now we should be set.
The present social order rests on private capitalism, but private capitalism can no longer function, it can no longer meet the social requirements, it can no longer employ the working class and the accumulated capital, and therefore it no longer has any historic reason for existence. In this country alone, tens of millions of workers have been and still are out of employment and had to be sustained on state relief; billions of dollars are hoarded and lie idle, because there is no longer any room for their safe and profitable investment; production is curtailed, products are destroyed, inventions are held back, and machines and factories are idle, business is groaning under an ever- increasing burden of taxation, the government is piling up mountains of debts, and on the top of all this the government is compelled to spend billions of dollars on war preparations. How long can such a system exist? Mene, mene, tekel, upharsin: private capitalism was weighed in the historic balance, it was found wanting, and it was decreed that it be retired from the stage of history. Private capitalism is dying, and in the near future it will be dead. It will either die peacefully and get an honorable burial, or it will die through wars and revolutions. With the death of private capitalism will also die all political and social institutions resting on private capitalism and organically bound up with it. And what is true of this country, is even more so true of all other countries. And just as nature abhors a vacuum, so history abhors a hiatus. What system shall take the place of private capitalism?Waton goes on to talk about how Roosevelt established state capitalism under the name of the New Deal. Waton is well work reading, folks.
There is, we feel, a somewhat naive presumption in cyberspace and increasingly finance-space too that just because society now has computers to solve this age old problem, this age old problem ¡ª hitherto deemed unsolvable ¡ª can suddenly be resolved.but as we've seen a "shared consensus" is tenuous, esp when lobbyists, 'think tanks' and media 'properties' are all out there trying to establish their own ministries of truth in the brave new 'reputation' economy:
On that basis, what none of the enthusiasts seem to appreciate is that what we¡¯re really dealing with is the latest re-enactment of the story of Animal Farm. That is, we¡¯re putting a huge amount of effort into forging a socialistic and meritocratic value system, whilst overlooking how the process transfers power from one set of oppressive overlords to an even more ruthless sort.
Don¡¯t get this blogger wrong. We certainly admire and support any attempt to forge a fairer consensus-based decision system to defend everybody¡¯s human rights and intellectual capital. But the fundamental factors remain the same; if you remove the payoff from such a system, you also remove the incentive structure that keeps the whole thing intact.
The critical paradox at hand is and always will be the fact that without a payoff, the cost of participation (i.e. proof of work, energy and computational time) is too great to keep those who don¡¯t have a direct interest in the outcome of the consensus being achieved interested, putting anyone other than ¡°interested parties¡± off from defending the scheme.
With a payoff, meanwhile, control inevitably flows to the most cost-efficient player, creating an efficiency arms race that eventually concentrates power in circles that invest the most.
What¡¯s more, none of these factors change if the blockchain is opened up to additional uses. In fact, the greater the value of the assets that depend on the outcome of the consensus formation process, the greater the incentive to corrupt the system.
Which leaves only two possible paths for an honest system.
One involves the creation of a super-sized blockchain which uses a fee-based structure to to keep miners incentivised to defend the system.
The second involves the creation of many task-specific blockchains, the defence of which appeals to miners precisely because they benefit from the decisions arrived at and are thus prepared to bear the cost directly.
But even with these two options major problems remain.
With the first, there¡¯s the incremental cost of having to compensate a network of miners to do the same job that a single party can do just as well but at a fraction of the price ¡ª all it needs to do is persuade people it can be trusted to do the job reliably. If that entity is a well managed government (which already represents the interests of the public ) all the more likely it will be trusted to that job.
The problem with the second scenario, meanwhile, is that the blockchains would need to be so incredibly task-specific to be worth the cost, time and effort of individual participation, they would inevitably lead to blockchain prioritisation. They would hardly be able to guarantee equal distribution of costs between engaging participants either. Eventually, defending every single blockchain relevant to one¡¯s life would become such a great burden that a market for specialist proxy agents that charge fees would emerge, once again skewing the whole process and leading ¡ª you guessed it ¡ª to a conventional specialist-focused division of labour.
Sadly, we think, there is only one thing relevant enough to all humanity that can provide the sort of incentives that could make blockchain economics work. That one thing, not to be too dramatic, is life itself.
Though life already is the endless and energy-exhausting process of computing multiple inputs so as to arrive at group-wide consensuses both on a modular and collective basis.
That¡¯s because on the modular front, just like with a task-specific blockchain, life is made up of people (nodes) continuously having to arrive at a consensus over how they deal with their mutually shared, interactable and observable reality. On the collective basis, meanwhile, just like with a super-sized blockchain, people depend on a shared consensus regarding the truths that underpin the wider unobservable reality instead.
In FDR¡¯s era, as now, there was a paradox: America was a capitalist country, yet capitalism under theManagerial-revolution-1941 (1) New Deal no longer resembled what it had been in the 19th century. And socialism in the Soviet Union looked nothing at all like the dictatorship of the proletariat: just ¡°dictatorship¡± would be closer to the mark. (If not quite a bull¡¯s-eye, in Burnham¡¯s view.)i would submit that many of the political battles we face now are to maintain control over or usurp the power of the financial system -- a reputation system that distributes investment and income within the economy -- thru which modern-day managerialism is practiced because, as people have noticed, the current crop of 'managers' (or anti-managers as it were!) aren't doing too well. the question then is, who is? would you really want silicon valley politically ascendant? (maybe over wall street, big oil, etc?) how about abenomics or scandinavian models? and you can go down the list of places with diverse populations that are actually happy with their gov't :P
Real power in America did not rest with the great capitalists of old, just as real power in the USSR did not lie with the workers. Burnham analyzed this reality, as well as the fascist system of Nazi Germany, and devised a theory of what he called the ¡°managerial revolution.¡± Economic control, thus inevitably political control, in all these states lay in the hands of a new class of professional managers in business and government alike¡ªengineers, technocrats, and planners rather than workers or owners.
The Managerial Revolution, the 1941 book in which Burnham laid out his theory, was a bestseller and critical success. It strongly influenced George Orwell, who adapted several of its ideas for his own even more famous work, 1984. Burnham described World War II as the first in a series of conflicts between managerial powers for control over three great industrial regions of the world¡ªNorth America, Europe, and East Asia. The geographic scheme and condition of perpetual war are reflected in Orwell¡¯s novel by the ceaseless struggles between Oceania (America with its Atlantic and Pacific outposts), Eurasia (Russian-dominated Europe), and Eastasia (the Orient). The Managerial Revolution itself appears in 1984 as Emmanuel Goldstein¡¯s forbidden book The Theory and Practice of Oligarchical Collectivism.
[...]
After all, the managerial Soviet Union is gone, and the capitalist U.S. has not only survived but thrived for decades in what is now a globalized free-market system. While the political theory of The Machiavellians doesn¡¯t depend on The Managerial Revolution¡ªit¡¯s surprising, in fact, how little connected the two books are¡ªhis reputation must surely suffer for getting such a basic question wrong.
Only he didn¡¯t get it wrong¡ªfor what is the political and economic system of China if not what Burnham described in The Managerial Revolution? Engineers, industrial planners, and managers have led China for decades, with unarguable results. Indeed, several East Asian economies, including those of American allies Taiwan, South Korea, and Japan, are managerialist. As Burnham predicted, these economies have been highly successful at controlling unemployment and raising standards of living.
The American ruling class, by contrast, has pursued a largely anti-managerial policy, ridding the country of much strategic manufacturing. Such industry¡ªincluding shipbuilding and semiconductor fabrication¡ªis now overwhelmingly based in Asia. The U.S. hybrid system, transitioning from capitalism to managerialism, outperformed the Soviet Union. Whether it can outperform the next wave of managerial revolution is very much uncertain.
To make it possible to end recessions quickly and to end inflation forever, a government needs to take the following steps:posted by kliuless at 4:48 PM on November 12, 2014 [1 favorite]It has become traditional for U.S. Treasury secretaries to periodically repeat the mantra that ¡°a strong dollar is in our nation¡¯s interest.¡± I would add one word to the mantra: ¡°A strong electronic dollar is in our nation¡¯s interest.¡± A strong electronic dollar is one that works smoothly in transactions, empowers monetary policy to bring a speedy end to recessions, and keeps its value over time with no concessions to inflation.
- Establish official government-sanctioned electronic money in a way that makes the use of electronic money as convenient and seamless as possible. This involves setting the stage for private innovation in electronic payment systems by giving full legal tender status to electronic money in all government-insured bank accounts and in other accounts that are officially certified as backed 100 percent by reserves held at the central bank.
- Dethrone paper currency from the exalted legal status it was given (very controversially) in the late 19th century, by giving anyone, at any time, the right to refuse payment in paper currency, unless a contract explicitly calls for payment in paper currency. Further demote paper currency by abolishing the guarantee that a paper dollar (or euro, or yen, or pound) will always be worth the same amount as an electronic dollar. But make sure that it is easy for people to convert paper currency into electronic form and vice versa.
- Search in the nooks and crannies of the legal code and government agency regulations and policies for places where it is assumed that interest rates are always zero or positive or where it is assumed that paper currency has a special status¡ªand root those assumptions out. (For example, make it clear that people can¡¯t show up with suitcases full of hundred-dollar bills to settle their taxes.) Encourage businesses to do the same with their business plans and their accounting.
- Give the central bank the authority to make interest rates negative, including making the interest rate on paper currency negative when necessary, by using the fact that a paper dollar is no longer guaranteed to be worth the same amount as an electronic dollar.
- Require the central bank to bring its inflation target down to zero over the course of 15 years and to forever afterward keep the value of a dollar in terms of goods and services within an unchanging narrow band. This should be revised only when necessary to take into account improved ways of measuring the value of a dollar (or euro or yen or pound).
The path to a strong electronic dollar will require bureaucratic and political fortitude. But the economic principles involved are clear. The rewards at the end of that path¡ªthe taming of the business cycle and the end of inflation¡ªinsure that some nation will blaze that trail. (My bet is on the United Kingdom.) Then the rest of the advanced nations will follow.
But make no mistake: Giving electronic money the role that undeserving paper money now holds will only tame the business cycle and end inflation. Fostering long-run economic growth, dealing with inequality, and establishing peace on a war-torn planet will remain just as challenging as they are now. But every time one set of problems is solved, it allows us to focus our attention more clearly on the remaining problems. It is time to step up to that next level.
Again, the state may become the absolute owner of the land and the mechanism of production and distribution, as it is in Soviet Russia; or the state may content itself only with the absolute control of the land and the mechanism of production and distribution, it is state capitalism just the same: for he who absolutely controls the means of life actually owns them, although nominally they belong to private individuals. Again, the power of the state may be concentrated in the hands of one dictator, as in the case in Soviet Russia; or the power of the state is concentrated in the hands of a dictatorial oligarchy, as is likely to be the case in this country, it is state capitalism just the same, for even a dictatorial oligarchy is governed by an absolute dictator. Clothed with unlimited political and economic power, the state becomes supreme and absolute. A supreme and absolute state cannot tolerate any independence of the people. The state will subordinate to its rule all religious, intellectual, political and social institutions and functions; the state will dictate what to do, how to do, what to think and what to believe. The only right that will be reserved to the individual will be the right to work for the state upon terms and conditions determined by the state, and the only freedom that the individual will be permitted to enjoy will be the freedom to live and die for the state.The fact is that the state has effective ownership of all property. That is the nature of the global system of state capitalism in which we live.
There¡¯s a void in our sense of meaning. We have come to regard ¡°the Western System¡± as one in which the rich stoke artificial needs to suck money, blood, and spirit from the rest of us. We¡¯ve been told that the barons of industry work overtime to turn us from sensitive humans into consumers¡ªmindless buyers listlessly watching TV while growing obese on the hydrogenated fats, artificial flavors, chemical preservatives, and the cheap sugars of junk food. And some of that is true.oh and, fwiw...
[graphic] Anti-capitalism poster by the early Marxist/Leninist artist Victor Deni, 1919. The vocabulary of Marx subtly dominates the way we see The Western System. This Marxist legacy unwittingly encourages a capitalist error¨Cgreed.
But the problem does not lie in the pistons of the Western Way of Life¡ªit does not lie in industrialism, capitalism, modernism, pluralism, free speech, unfettered information exchange, and democracy. The problem lies in us¡ªin you and me. It also lies in our bosses, in our corporate CEOs, in our intellectual elite, in our super-rich, and in our political leaders. We fail to see what¡¯s under our nose¡ªa set of moral imperatives and of heroic demands that are implicit in The Western Way of Being. We fail to see our magic, our gifts, and our utopian capacities.
But the problem does not lie in the pistons of the Western Way of Life¡ªit does not lie in industrialism, capitalism, modernism, pluralism, free speech, unfettered information exchange, and democracy. The problem lies in us¡ªin you and me. It also lies in our bosses, in our corporate CEOs, in our intellectual elite, in our super-rich, and in our political leaders. We fail to see what¡¯s under our nose¡ªa set of moral imperatives and of heroic demands that are implicit in The Western Way of Being. We fail to see our magic, our gifts, and our utopian capacities.
[...]
Business, commerce, and exchange, Bloom says, are at the heart of Western Civilization. We spend more time at work than at any other activity. Capitalism is what we do each day. But capitalism is not at all what we think.
Bloom¡¯s Soul In The Machine: Reinventing Capitalism reveals a deeper meaning beneath what we¡¯ve been told is crass materialism. It shows how profoundly our obsessive making and exchanging of goods and services has upgraded the nature of our species, has given it new powers, has endowed it with the equivalent of new arms, legs, ears, eyes, and brains. Reinventing Capitalism reveals the ethics, the morality, and the ideals implicit in what we think of as demeaning¡ªin our labors and in our ways of selling them. It shows why what we have is worth living and dying for and why what we do will continue to ennoble the human race. Reinventing Capitalism explains why The Western System nurtures visions far more sublime than those of its enemies, whether those enemies are the global forces of militant Islam, the cynics who use capitalism to cheat, the postmodern anti-Globalist anti-Capitalists, the local Maoist guerrillas of Nepal, the Che-Guevarist guerrillas of Colombia, or the Neo-Indigenous-Culture Revolutionaries of Zapatista Mexico.
Reinventing Capitalism reveals an implicit code by which we live¡ªa code that demands that we uplift each other. Though we don¡¯t know it, capitalism condemns those who use it criminally. Capitalism punishes its thieves and charlatans¡ªthose like the wheeler-dealers of Enron who stuffed their pockets but failed to make the contribution they were paid to make.
Today, the dominant financial players are ¡°managed money¡±¡ªlightly regulated ¡°shadow banks¡± like pension funds, hedge funds, sovereign wealth funds, and university endowments¡ªwith huge pools of capital in search of the highest returns. In turn, innovations by financial engineers have encouraged the growth of private debt relative to income and the increased reliance on volatile short-term finance and massive uses of leverage. What are the implications of this financialization on the modern global economy? ...it means that finance has become central to the daily operations of the economic system... Another major consequence of financialized economies is that they typically generate repeated financial bubbles and major debt overhangs, the aftermath of which tends to exacerbate inequality and retard economic growth... we have yet to come up with a sufficiently robust policy response to deal with the consequences of our new ¡°money manager capitalism.¡± The upshot likely will be years more of economic stagnation and deteriorating living standards for many people around the world.
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posted by No Robots at 7:24 PM on November 11, 2014 [4 favorites]