Socialism is a Red Herring
This article was also published in a series format but is presented here in a more traditional long form as series is not completely compatible with desktop systems and some Android phones.
For people, the key struggle has always been about access to resources.
As people, we need the same resources. We have two forms of interacting:
Cooperation and competition.
Take the story of Cain and Abel allegorically:
Farmers cooperate to harvest crops. Marauders want what the farmers have, so they take it. These interactions outline the basis for human behavior.
Two angles these interactions are commonly understood from are
Economics: how wealth and labor are distributed
and
Politics: how the rules establishing the legitimacy of distribution are decided.
From these contexts, we can compare capitalism and socialism.
While socialism and capitalism may appear to be opposites, they are not.
the political context
Socialism: where wealth/labor distribution is based on citizenship
Capitalism: where wealth distribution is justified by labor (or at least the appearance of labor)
Politically, socialism and capitalism differ in terms of how wealth is justified. There are many other forms of distribution than just socialism or capitalism.
TV shows like Black Mirror often imagine worlds that have different hierarchies of wealth/power distribution.
the economic context
Socialism: where money is distributed to people so they can make transactions
Capitalism: where money is distributed via transactions
Socialism is a subset of capitalism. Capitalism is any economy which is transaction based on money. Economically, socialism requires capitalism, like how Civic is a type of Honda.
Any form of distribution requiring money is capitalist regardless of how wealth and labor distribution is justified. Additionally, being wealthy is not dependent on how people get wealth.
Star Trek’s Ferengi is but one expression of capitalism, as not all participants in capitalism are greedy.
Greed is just one attitude to have about how money should be distributed.
All of this discussion, however, still doesn’t address the appearance of socialism today.
Given that there are many different possible justifications/mechanisms to distribute wealth, why is socialism so popular?
People see socialism as an attempt to fix social problems, like wealth inequality or structural racism.
As it turns out, many social problems aren’t exactly caused by capitalism because those problems also pre-date capitalism.
The welfare state (which is a type of socialism) is pretty much as old as civilization. Hell, even the pre-modern Roman civilization functioned as a welfare state.
What follows is a discussion about how to frame discussions about wealth, power, and politics.
Here is an outline.
- A brief look at the problems Socialism is meant to address but doesn’t.
- A light look at historic relationships between economics and power.
- One look at how future wealth distribution can be effected by technology.
- The actual issue at stake.
1. Socialism as a Band-aid
The problem socialism addresses has to do with how groups form.
Groups form from resource streams.
Some examples of groups forming involve online multi-player games like Eve Online, or Final Fantasy.
Essentially, groups only form if there is a shared goal.
Groups need to coordinate how members of the group can cooperate, because bad cooperation leads to competition.
…and competition between group members can destroy the group.
The simplest solution is to appoint a leader.
Leaders emerge to solve problems of membership coordination.
However, leaders can cause problems.
Once leaders seek to entrench their status as elite, their focus changes from maintaining the group to maintaining personal status.
The shift of managing members for group maintenance to managing hierarchies crystalizes the group, making it more rigid and thus fragile.
As justification for the group function comes to require only specific leaders, so only those leaders come to have the right to lead the group.
If the group accepts this justification, then roles/positions become entrenched, so that the group functions rigidly, as good or as bad as those in charge.
This rigidity opens the group to interference by limiting the group’s ability to be adaptive and have different responses.
As Immanuel Wallerstein notes in his worlds systems analysis, rigidity in the socio-economic infrastructure forms when the rich are able to legislate competition away, making it harder for competitors to be legitimate.
Often rigidity comes in the form of laws that restrict who is able to continue to participate in accessing resources.
Today, often, only those who have family money get to take the risk of becoming an entrepreneur.
As it becomes harder to get rid of those on top, it also becomes harder for new people to accumulate wealth and authority.
In such a system, people have a difficult time rising in the hierarchy but an easier time falling.
The problem socialism addresses is the inability for people to rise up in a system designed to keep people in place.
The role of a safety net is to catch those who fall too far, so that the group can maintain its grouping — so that the elite can remain on top of the group.
To recap so far:
The actual problem people want socialism to fix is the lack of options for people to get access to resources.
The reason why people lack options is because the elite have structured society so that the masses stay struggling beneath them.
Socialist programs are meant to provide some relief to the masses, but obviously not by jeopardizing the hierarchies that the elite formed in the first place.
For example, one of the first sets of governmental safety nets in the United States came with the founding of the Food and Drug Administration under Teddy Roosevelt.
The late 19th century brought great wealth to the new industrial America, but many citizens suffered for the lack of standards in food safety and food production.
Upton Sinclair, a reporter, published The Jungle, to warn the public of the hazards of the budding industrial food industry.
Further safety nets were later created under another Roosevelt, Franklin Delano Roosevelt, in response to the suffering of the American people during the Great Depression.
Some of these include the Social Security Administration and the FDIC.
Today, the proposal for UBI (Universal Basic Income) is another example of a band aid to maintain social order. Whether hand-outs, welfare or whatever you want to call it, is gifted from the state to quench a mob, or it is voted in by voters, UBI does not address the original cause of its problem, which is structural wealth inequality.
Thus, socialism is a band-aid.
Now that we’ve discussed what socialism is for, let’s address some current structural wealth inequalities.
Crystalization of infrastructure is not only a historic phenomenon.
Crystalization happens in the background. These wealth gathering systems passively siphon away the general population’s wealth as people come to accept these fees and charges as normal.
The classic example are government fees.
Other examples include the internet bill and banking fees. As a first example, let’s look to those who profit from the internet even as they do not build or maintain it.
Google makes 130 Billion+ a year.
Google works by providing a quick and easy way for users to navigate the internet.
Whether you use an Android phone or their Chrome web-browser, Google learns who we are so that it can target us through its extensive ad network, which extends to anonymous websites and anonymous apps showing banner ads.
Google has control of the flow of information operating as a kind of hidden information broker, both for advertisers and for users.
We find purchases, companies find buyers.
Google works by creating a structural inequality within our information architecture, in which Google shareholders can profit massively just collecting and brokering data on how our civilization operates.
On the surface, this isn’t a bad thing, as obviously Google provides access to things people want.
What becomes an issue, perhaps in the future, is that we can’t opt out, or that Google creates so much wealth that it can change the parameters by which society operates, so that we can never be rid of Google.
At that point we run the risk of Google retarding development because it wants to maintain its position in our information infrastructure.
Another example is banking.
Banks are an old industry. They justify their operation as being legitimate though regulatory requirements.
Yet those requirements also protect existing banks from new competition.
The minimum amount of money you legally need to start a bank is about 50 million.
Yet the cost, in regulation fees from the SEC and other regulatory bodies could be up to 2 million a year — mainly the cost of hiring the right experts to help you file paperwork (*by one estimate in 2013).
Big banks like Wells Fargo or Citibank don’t care how much regulations cost. The more regulations cost, the less competition there is.
For example, Bank of America started from an Italian immigrant Amadeo Giannini lending money on a handshake from a wooden barrel to his community after the 1906 earthquake leveled San Francisco.
He trusted his people by lending them money. His community was so grateful, they made him rich.
Banking regulations today make it illegal for someone to start a bank like how Bank of America started.
Banking regulations make it illegal for just anyone to quickly cash in on the banking game.
The laws are complex, so if someone does something wrong, the government can step in to stop new banks.
The given reason is that the government is protecting innocent consumers from bad (or even worse, predatory) banks.
This is a good reason for regulation.
However, the government is also protecting established banks from competition, especially if those newer “would-be banks” are trying out newer forms of banking that could threaten the existing giants.
Cybersecurity works the same way as banking regulation.
Cybersecurity could be used to make entry into the internet space expensive for newcomers.
Could a competitor of FaceBook even form if the laws governing the data safety of its users forced start-ups that would compete with FaceBook to pay the same proportionate fees as FaceBook?
Google recently started to downgrade, in its search index, sites that lacked SSL.
Companies exist to charge about $600 for three years of SSL, when you could get it for free from Let’s Encrypt.
But to use Let’s Encrypt you’d have to pay for dedicated hosting with an IP and you’d have to know how to get through your SSH or your WHM to install it properly.
Google isn’t making it easier for new companies to rise on the internet.
Why should Google care? Look at how much Google makes in a year. Why should they care about the millions of effected websites that can’t afford SSL or the expertise to install it for free?
As Wallerstein points out, rigidity leads to a loss of adaptivity in society.
It’s true that Google, FaceBook, Wells Fargo or Citibank could implement new forms. But they would do so layered on top of their existing infrastructure.
New competition could force established companies out of business by shifting the ecology of the market away from them.
A loss of a big company or a big bank doesn’t seem so bad.
But what about the loss of adaptivity for a whole civilization?
Does not “Too Big to Fail” bespeak of a loss of adaptivity?
In the past, a loss of adaptivity could mean the dissolution of whole civilizations given pressures like natural disasters, revolution, or war.
That civilization would then dissolve into the dust of time, its people scattering in between the pages of history.
Today, civilizations don’t dissolve.
With modern capitalism, when one nation’s infrastructure stops being competitive, economic centers shift to a new center.
This trend is what Immanuel Wallerstein dubbed World Systems Analysis.
2. Applied World Systems Analysis
The basic thesis of World Systems Analysis is that world economies centralize around world centers.
A basic assumption is that economics, politics and culture are all entangled around justifying world centers.
These centers establish how surrounding economies service them.
In Multitude, Antonio Negri and Michael Hardt explore how international cities establish a new global culture of multiculturalism while intra-continental cities reign as centers of regional culture.
This view has been explored, as some have declared the end of nations to be approaching soon.
Wallerstein’s examples of world centers, however, is a bit more traditional, founded on nations.
He lists 13th century Venice, the 15th century Dutch, the UK from the long 16th century to the 19th century and the United States in the 20th century as recent examples of World Systems.
Essentially the UK rose to the world center when the Dutch, after fighting wars with the Spanish, French and British, decided to back the British as allies, bank rolling British ship building.
This allowed the British to develop their navy so that eventually the British established, through trade, military, and political dominance, a system centered around its own needs.
The same is true of the US. After the British took over the world, they started to invest in the US’s development. They financed the industrial revolution which eventually led to the US becoming the new world power.
As the United States became the world power, our culture and our coin became the de facto standard. In this sense, while our big companies decide how much people halfway around the world should be paid, and what they should make. Additionally, Hollywood also works as major exporter of American style indoctrination, so much so that even a developing nation like China forsook the opportunity to practice superior urban development because they wanted the markers of American style success.
(*These markers include cars, big houses and so on.)
Of course, the British backing the US is analogous to how the US backed Chinese development by moving manufacturing overseas.
This was followed by much work under Deng Xiaoping into the more recent era, as the flow of wealth and technology has transformed China creating brand new infrastructures.
What is currently holding China back is that the Chinese have not overcome US tastes, which still dominate as the standard.
I’ve seen first hand how manufacturers in China, via the internet, realize that they can sell directly to the US market.
Many of them don’t understand marketing, nor do they understand American taste, the need for quality control or how to deal with US laws or the SEC.
But they still want in on the American system. They see how much money there is.
In this sense, US laws and the SEC have been pretty successful at keeping most Chinese competition out of the US market. Those savvy enough, or with enough money to hire expertise, of course, get around these legal blockades.
But what will happen in the future?
There is a historic analogy, if the current trend continues.
The British who first went to China were awestruck. Those British grew up hearing the legends of China echoed through the silk route for millennia.
A generation later, their children scoffed at China, as a backwards nation. After that, China suffered under the British heel.
Something similar will happen to the US.
Eventually the younger Chinese will look at the US as a backward nation, with arcane laws and infrastructure. At that point they will point their monstrous economy inward, to fuel their own cultural interests and tastes.
This is starting to happen with Chinese movements towards Africa and the redevelopment of the Silk Route.
The center of the economy is who is justified to be at the center
Now that we understand what’s at stake in a slow down of the US economy (namely a world in which China establishes the central coin and cultural taste), contemporary debates between President Trump and President Xi Jinping is as much a discussion over trade as it is over which nation is to be subordinate to the other.
Ironically, this debate is happening while Trump is also dismantling various government entities.
For instance, he’s already changed IRS rules.
The net effect of all these changes is yet to be seen, but in a sense, Trump, like many politicians, is altering the avenues of what can be deemed legitimate distributions of resources.
Obama did the same thing, by passing the Patient Protection and Affordable Care Act, giving many greater access to healthcare.
Whether you like it or not, altering legitimacy is what politics is about.
Think about how the US Constitution altered what was legitimate authority, forgoing the Divine Right of Kings which lasted a millennia to elections of common people.
Politics is about establishing legitimacy.
When you think about the American Revolution, barely 1/3 of the colonists were for it.
How many people would actually rise to challenge a Trump Dictator?
Politics isn’t just about legitimacy though.
Legitimacy is just the accepted form of whatever is allowed.
Of course people, like small children, are going to argue over who is allowed anything.
This is what is at stake with politics. And to a general degree, what is at stake with laws and lawyering.
Thus, it is arguable that any change in laws often enriches someone (whoever is poised to take advantage of them).
Trump seems poised to benefit over many of the avenues for legitimacy that come his way. Two major examples include
If Trump, and others like Trump, who are authoritarian, are successful at legitimizing hierarchies with themselves on top, then this would constitute a huge shift in wealth and power.
Yet while Trump is busy altering the avenues of legitimacy for his own benefit, many on social media are also arguing over how to change the avenues of legitimacy so that more people can benefit.
Many of these discussions are fairly superficial, as the deeper implications of wealth distribution are not easy for the common, distracted person, to get educated on.
Regardless, all proposals need political backing.
One proposal we’ve discussed, UBI which is a purely economic proposal, still needs politicians to legitimatize it.
Another proposal, one that is political in nature, is Liquid Democracy.
Liquid Democracy de-rigidifies political hierarchies by forcing politicians to more closely represent their constituents interests.
Liquid Democracy is also called delegative democracy.
This form of democracy, with social media, has a greater chance of being successful as people can passively absorb discussions going on at the highest level of government in near real time.
There is, however, one more wrinkle in this debate over resource distribution and allocation*.
(*There are many wrinkles, such as environmental degradation, pollution, falling reproduction rates — but for simplicity, I will only look at one.)
3. Automation and Abundance
In the past, revolution was always a threat because mass numbers of people were needed to maintain security and resource processing.
The elite couldn’t survive without the masses.
However, with modern technology, security and resource processing could be maintained by fewer and fewer people.
This has two possible consequences:
- The rich don’t need the masses, not as much, and perhaps not at all.
- The masses don’t need to work as much to have the same or greater levels of abundance.
Both consequences challenge the current justification for how wealth is allocated.
There is a current awareness of this problem, but culturally we are at the forefront of even considering options as this article briefly outlines.
But let’s explore this topic a little more before we get to the heart of the issue, which will be addressed in the last section.
It’s possible that the masses could get UBI and automate abundance, become lazier and more entitled until one day the elite eliminate the masses because the masses are so subjected to technology that they are a burden.
It’s also possible that the elite automate society for their benefit to such an extent that the masses revolt because the elite become indolent.
The former has not really happened before.
The latter has, with various Chinese Dynasties and Empires employing mercenaries to fight their wars until their armies, or their citizens, turn against them.
But for today, it’s highly unlikely that justifications for wealth distribution change much until we give up on our current system because what we have isn’t working for us.
In this sense, ideology, which is how we justify what we believe should be, is only as good as our sense of resource security.
After all, despite Ayn Rand’s protest that taking money from the government was immoral, she did accept government money in her old age, when she was in financial difficulties.
If our ideology really is dependent on our access to resources…
(which is a nice way of saying that it can also validate how we get resources)
…then the advent of automation presents us with a philosophical crisis.
If production is automatic, needing very few people, then we have two consequences:
- We can have an abundance of wealth more easily
- We have less work to go around
If our resource allocation is justified by working, what happens when we have more resources but less work?
We could get paid more to do less, just to keep everyone happy and the system going.
Or
We could make less, since there’s less work. Since it’s wasteful to make more, the system could more easily collapse if too many people fall into poverty and production grinds to a stop.
Right now, it seems the second option is more likely, as companies tend to cut jobs to cut costs. If more people rely on welfare, then where does the revenue and the material support ultimately come from?
The former option seems less likely since paying us more to do less means companies would lose money. How could companies survive the initial loss?
There are other options, but both of these options require that we adjust how we justify the means for allocating wealth.
In the past, we’ve often chosen to not sell at a loss, just to keep prices up.
During the Great Depression, farmers would dump their products just to keep the price up.
They did this even if that meant that people starved because without work, they couldn’t buy food.
Those last two pictures were from the Great Depression, when human labor and access to resources were strongly intertwined.
Today, however, we have the possibility of something different: the untangling of labor and resource production.
With automation, we have the possibility of increased production from less people, even while we have historically, more people than ever, with the greatest need for resources.
Either we change how we justify resource allocation, which may be difficult since that could impoverish some while enriching others…
…or we keep the same justification and let potentially billions starve.
That is, starve, not because there’s not enough food, but starve because we are unwilling to alter how we assign resources.
We’re not even considering other factors like environmental degradation.
Or, maybe things will work out.
And we will all be ok.
And life will go on, with suburbia, cars in every garage, with rich, poor and middle class everywhere.
…and maybe not.
So now we get to the heart of what should be the discussion, which is what is at stake.
4. How should we all live together?
The main objections to both capitalism and socialism are:
- not optimal (won’t work)
- doesn’t fit human nature (won’t work)
People generally argue over whether it can work or not, which requires that we define what “working” is.
What works depends on whatever we agree meets the conditions of “working”.
A discussion about what “works” depends on our values and how we think other people are.
The fact is we can choose whatever we like as working.
We can also change the threshold of what should be constituted as “working”.
However, for most definitions…
If 100% of all humans were on board with capitalism, and followed the rules, then it will work.
Likewise, if 100% of all humans were on board with socialism, and followed the rules, then it will work.
Of course, “working” isn’t that simple.
People don’t always follow the rules. And we really can’t make them.
Not only that, we make assumptions about what the “average” person is like, whether or not bad actors can be halted.
So like any good system, it needs to have options, so that people can rise or fall to the level that is optimal for them.
(I am, of course, assuming that we have a choice in the matter, that there is enough abundance to go around.)
The worst system will force people to do things they don’t want to do, for reasons they don’t care about.
Looked at politically, that system is totalitarian. Economically, that system is one founded on a kind of slavery because it offers no options.
But before we can choose what is good or bad, we need to agree together, because we all have to live together.
The planet isn’t getting larger.
If anything, with information technology, resource mining and mass travel, it is getting smaller.
Like roommates, we should discuss what our options are and find something that works for people.
But that requires that we drill down on what we individually find most valuable and worth preserving.
We should move towards what we each authentically want which is about life, not about products.
We should not make an issue about how others aren’t living up to our standard, which is the character of most discussions about socialism and capitalism.
Fredrick Nietzsche called this attitude of ressentiment slave morality, in which we hate on everything that is different from us.
Such a view of life is largely pessimistic. Worse, such a view focuses solely on identity and is primarily consumed with policing others.
Efforts then focus on shame and blame — on whether another is good or not, instead of focusing the effort on building the kind of lifeworld anyone would want to live in.
We can’t create a desirable future for ourselves if our focus is on stopping others from creating their future.
It’s hard enough to deliberately make plans happen, let alone having non-plans work accidentally.
After all, to focus so much on the past — on what can’t be changed — isn’t to guarantee any particular future.
Here’s what I think:
We should build a world that works for the most number of people, that enables them to be the kind of citizen they want to be in the world regardless of whatever label, ideology or judgement you want to put on it.
The focus should be less on particular rules — because rules are mutable — as rules are dependent on agreement.
Agreement shifts.
The focus should be on attitude. Children are the future. If they can decide what kind of future they want to have then they will agree to make it happen.
Let them learn to make the rules necessary to solve their problems.
And if the next generation isn’t in a position to it, then they should be learning how to teach their kids to be the ones to do it.
After all, we can’t even predict what the weather would be like a week from now.
What makes us think we can successfully predict technology, politics or ideology for the next generation?
We can’t know what the challenges or issues would be.
So instead of being focused on what shouldn’t happen…
…let’s find the optimal way to enable the best in humanity to surface, whatever that may be.
Debates about economic or political ideology are often by people who are focused on power (getting it or keeping others from getting it).
Those discussions aren’t about what they want or finding the best way for everyone to get what they want. Those discussions are about who gets more because they represent what is “the best”.
The fact is, in a democracy, the people who want political power will go with whatever is trending well with their voters.
Instead of drilling down on ideology as a sign of who we can get along with, let’s instead, figure out how we should get along.
Maybe even try out liquid democracy?
Thanks for reading.
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