Saturday, July 14, 2007

Capitalism vs. Socialism

Blacksun, in commenting on yesterday’s post, said that:

I have to part company . . . when you insist that the severity of a person’s need should determine their ability to buy something. This to me is drifting dangerously close to flat-out socialism.

I do not recall saying that the severity of a person’s need should determine their ability to buy something.

I did say that free markets contain a serious problem in that it gives wealthy people an ability to bid resources away from more highly-valued uses to which the poor could put those resources.

At the same, I have argued that one of the significant benefits of a free market is that, where property rights (including each person’s property right in their own life and their own physical body) are properly protected, free markets do an excellent job of tying information on what is in the public interest with an incentive to act in the public interest.

I have covered some of the problems with interfering with markets in an article I wrote called Price Gouging, and used it to describe how Democrats will make our energy and global environment situation worse in a posting on Energy Policy. There are also relevant points to be found in my essay, The Value of Freedom.

Flat-out socialism utterly fails to provide enough information to decision makers while at the same time incentivizing them to act in the public interest. Flat-out capitalism is far more efficient at linking incentives to act with the public interest when that system is set up so as to recognize the rights of all individuals – including the rights of the poor to their own life, body, liberty, and property. However, even ‘perfect’ capitalism does not do a perfect job of incentivizing people to act in the public interest. This ideal outcome is distorted by the ability of the rich to bid resources away from the more highly valued uses to which the poor would put those same resources.

Perhaps this inefficiency is unavoidable, but it is an inefficiency nonetheless – a case where the ‘invisible hand’ of the market does real harm, even in its purist and most ideal form.

Economic Systems and Intrinsic Values

Intrinsic values do not exist. Many arguments that people give, arguing for one economic system over another, do so by suggesting that certain actions or states of affairs are intrinsically better than others. Every argument of this type is grounded on a false premise – as false as any argument that grounds a defense of one system over another based on God’s will (another entity that does not exist).

This ties in with a point that I have repeatedly tried to make – that there are more myths and superstitions in the world than those that postulate the existence of gods. Consequently, the abolition of religion is not the same thing as the abolition of belief in mythical entities that affect the value of things. There are some myths – beliefs in things that are not real – that can be found even among atheists.

The only values that exist are not intrinsic values, but relationships between states of affairs and desires. You will find no other form of value in the real world. Yet, these relationships are real, and they are intimately tied to reasons for action in a way that something must be for the term ‘value’ to make sense.

Since relationships between states of affairs and desires are the only values that are real, then the real-world value of an economic system can only be found in that system’s relationships to desires.

Note that, in desire utilitarian terms, it is not the case that most moral economic system is not the one that fulfills the most and the strongest desires. Instead, the most moral economic system is the system that a person with good desires (a person whose desires are those that tend to fulfill other desires) can support.

This is because no person can act in any way but to best fulfill the most and strongest of his own desires, given his beliefs – and will seek to act so as to fulfill the most and strongest of his own desires. Expecting a person to judge an economic system based on only one criterion is the same as expecting a person to act on only one desire, such as a desire for the maximum fulfillment of all desires. This is an absurd demand, and an absurd standard for an economic system.

This is why, instead of focusing on one standard, we must evaluate an economic system according to the weight it gives to the objects of a number of good desires. These desires include such things as liberty, privacy, equality, truth, knowledge, freedom from pain, freedom from disease, and happiness. These things must we weighed against each other, according to the desires that good people would have towards each.

The precise mix is something about which intelligent people are going to be debating for a long time to come, assuming that the human race continues to exist for a long time to come.

Common Ground

However, there is one set of policies that the capitalist idealist and the socialist idealist should agree on. It should also appeal to everybody standing on every point in between that advocates a mixture of these two systems. This would be opposition to the externalities that the wealthy are permitted to inflict on the poor – an opposition to wealth transfer system where the life, health, and property of the poor are sacrificed without compensation so as to increase the wealth of the wealthiest people.

Externalities and Pro-Rich Regulations

Global warming is the largest recent example of just such a wealth transfer scheme. The actions of the rich, in this case, will cost the poor their land, their health, and in some cases their lives, simply so that the wealthier people on the planet can enjoy an even better standard of living.

Yet, global warming is not the only example of this. A great many environmental issues are issues where the wealthy are given special credits to kill, maim, or otherwise harm the poor with impunity – with impure drinking water, poisoned air, and the destruction of their land (to the degree that poor people are permitted to own land).

A great many regulations are restrictions on where people can go to find work, and on the types of work that they can have. This means that employers do not need to provide workers with a level of compensation that would keep them from voluntarily leaving for better alternatives elsewhere – not if there are legal barriers preventing those workers from moving.

In addition to the restrictions that prevent people from seeking better jobs, there are restrictions on jobs seeking the workers that need them. One of the first things a company has an incentive to do when they move into a new area and begin using the labor force there is to corrupt the government into keeping other competitors for that labor out.

Warlords and Tyrants

Earlier, I mentioned the warlords who dominate an area, who prevent food from getting to the poor because they take the food for themselves, or they demand some sort of payment from those who would distribute it. These are people that the world would be better off without. Capitalists and communists alike should be unified in seeking their removal. Tyrants and dictators present the same problem on a larger scale.

I have mentioned that I was in favor of removing Saddam Hussein from power. I was opposed to Bush’s invasion from the beginning, but I did not have any objection based on moral principle. My view is that different nations should treat each other the same way different families treat each other. To a substantial degree, parents should be permitted to raise their children as they see fit, and nations should be allowed to organize themselves as they see fit. However, then there is clear evidence of abuse, society has a duty to step in and free the subjects from that abuse.

By this standard, Saddam Hussein was somebody that the international community needed to remove from power.

However, I opposed the invasion of Iraq, even before it started, because it was obvious that President Bush was incompetent, and even though he was doing the right thing, he would almost certainly mess it up so badly that it was better to do nothing, and to wait for a competent leader to tackle the job.

I have heard liberals complain that if these arguments for removing Saddam Hussein from power are valid, then this implies that there are other world leaders we should be seeking to remove from power as well. It is absurd to claim that we should take action against so many leaders; therefore, we should have left Saddam Hussein alone.

Actually, I have no objection to removing tyrants from power wherever they can be found, though it should be done competently, by people who know how to make the situation better, but not worse.

I am particularly disturbed by those who argue that there will always be tyrants, and that therefore we should do nothing. This is like saying that there will always be parents who abuse their children, so we should take no action against those parents we catch doing so.

There are also those who argue that if we allow even a little bit of interference in the internal affairs of one country that we open the floodgates for interference in every country. Yet, this too is as absurd as arguing that if we protect the children from abuse in even one household, that we open the floodgates for interference in how all parents raise their children. Just as we have been able to strike a reasonable balance in the latter case, I think we can strike a reasonable balance in the former case.

A Common Theme

The one common theme regarding all of these issues is the idea that capitalists and communists alike should be able to find common ground in opposing those who redistribute wealth from the poor to the rich. We are surrounded by them. Do this, and we have made the present and future lives of the poor much better than they would have otherwise been. Unite on these issues, and we can deal with the issues that divide us later.


Sheldon said...

"I have mentioned that I was in favor of removing Saddam Hussein from power."
"....that the international community needed to remove from power..... because it was obvious that President Bush was incompetent, and even though he was doing the right thing,...."

One thing that troubles me about your analysis of these questions is that I think you analyze them out of their actual historical context. That is they are treated as abstractions, ignoring relevant information and historical patterns.

That is you seem to take at face value the stated motives of the Bush administration. Yet ignore other sources of evidence that suggest less benevolent motives.

For certain the faction of governmental decision makers represented by Bush and Co. are more arrogant and reckless than other factions. However, their actions still fit within an overall pattern of U.S. interventions.

I think that this pattern demonstrates that U.S. foriegn policy is not genuinely interested in removing tyrants and promoting democracy. But instead advancing corporate and geopoltical interests of U.S. elites. All too often it is not tyrants that are removed, but elected goverments. (the list is extensive, Arbenz in Guatemala, Allende in Chile, Mosadeq in Iran etc.). On the other hand, dictators are supported when they advance the above stated interests (and again the list is extensive).

So, I myself am not in principle againt removing tyrants, but I don't trust my government to act in good faith toward that goal.

The agents who can best remove tyrants are those people who are oppressed by those tyrants. Although it is also true that often they are not in favorable circumstances to do so.

We might also ask the question, if U.S. policy makers are genuinely interested in promoting democracy, why are they not more vigorous in those efforts with governments where they have substantial influence? i.e. Egypt, Saudi Arabia, Pakistan etc.

Alonzo Fyfe said...


As an ethics blog, I consider it my job to describe how things should be, in principle. If I get that right, then I have accomplished my goal.

In desire utilitarian terms, "the right thing to do" is that which a person with good desires would do. However, the agent's actual motives are not relevant to the question of what is the right thing to do.

For example, if a person knows that her brother is abusing his children, the right thing to do is to report him to the authorities. This is the right thing to do even if, in a given case. the person does so only out of a desire to do harm to her brother or to, for example, gain controling interest in a business they both own. When she turns her brother in, we are not inclined to say, "You should not have done that. You should have let him continue to abuse his children, unless you were turning him in for the right reasons. No, she still did the right thing, though she is not necessarily a good person.

It is also true that the United States government has historically committed many immoral acts. I am aware of the size of the list. I am aware that many of these immoral acts involve instances where the government has acted as a source of mercenary soldiers who are hired out to the highest bidder, in terms of political and private contributions to the ruling party or the families of that party's leaders.

However, we cannot even say that these acts are immoral without a concept of moral acts to hold it against.

Saying that the United States ought not to be involved in removing tyrants from power or ending the slaughtering of the people in a state by its own government because it has done many immoral acts. Yet, I would argue that you are simply adding one more immoral act to that list. To stand by and do nothing while innocent people are being slaughtered is, itself, immoral - showing a casual indifference to the suffering of others.

In fact, one of the things these 'interests' that treat our military as a mercenary army for hire, is to tell the government not to get involved while the business profits from the corruption of some foreign government, using that corruption to harm its people. These immoral interests not only pay our government for action, but can profit by paying our government or innaction as well.

It is like knowing that one's brother is abusing his children, and doing nothing, and letting the abuse continue. it takes a cold and callous person to do nothing, and that is not the type of person we should want to become.

These principles describe the type of people we should want to become - people who are intolerant of harm done to others and who are willing to act to prevent it. The list you have given are examples where we have failed. It includes cases where the American government has acted in ways it should not have. It should also include cases where the American government did not act in ways it should have.

Sheldon said...

I actually have no problem with the basic principles you have outlined. Only perhaps with slight modifications. In fact I am not one of those people who is just resigned to the fact that there will always be tyrants, or poverty etc.. I believe there are potential remedies and solutions. Although it may be highly unlikely that they will be put into practice.

"These principles describe the type of people we should want to become - people who are intolerant of harm done to others and who are willing to act to prevent it."

And I think that we also need an analysis of the actual conditions that might allow us to be those people, and to put in place a government that prescribes to these principles.

But allow me to tweak your analogy to move it closer to the actual circumstances. Say we live in a world and city that has a very powerful social/child protective services department, CPD for short. It is able to command the police department to act quikly when there is suspicion that a child is being harmed. (Lets also say that for each child a trust fund is attached that can be tranfered between custodial parents and foster parents).

However, over the course of several years, and several mayoral elections, a pattern emerges. The CPD acts against decent but perhaps less than perfect parents, and some abusive parents. We also notice a pattern that all too often the foster parents who recieve the allegedly abused children, are also abusive. We also notice that these abusive foster parents benefit financially, and are cronies of the CPD.

Another consistent pattern is that when the CPD acts to "liberate" children, it often ends up killing some children in the process (but the trust fund is still transferrable). Sometimes these crony and abusive foster parents also get on the wrong side of the CPD, and are taken out, but often with considerable harm to the children in their custody.

Imagine the police acting for the CPD, and raid a crack house where many abused and neglected children live. But instead of just taking out the tyrant crack parents, they have explosives that predictably have "collateral damage".

Now at what point do you begin to question whether you really should report cases of child abuse to the CPD? After noticing the pattern of its actions under serveral mayoral administrations from both the tweedledee and the tweedledum parties, do you begin to think that a substantially different kind of politics is needed before you begin to trust the CPD again to protect children?

What I describe here is I think much closer to the situation of U.S. interventions abroad. And to the history and circumstances of Iraq.

To entrust someone to act according to our principled desires of liberating people from tyranny, they should have a record of respecting human rights, and advancing human rights. If they dress up their language to make us think they are advancing human rights, but pursue other goals which have other consequences; then I think we begin to infer that they are not doing the right thing.

The interesting thing about motivations, the true and primary ones tend to influence outcomes more than the secondary or false motivations.

The incompetency of Bush to me seems irrelevant on one level. What is relevant is the patterns we see historically, across administrations. Do we expect the Iraqi's to trust their "liberators" after they have bombed their water treatment plants, and then prevented their repair (i.e. first Gulf War and embargo)? Bombed them, littered their land with depleted uranium, stormed their houses, disrespected their culture, and failed to repair the damage?

It seems the problem right now in Iraq is substantial portions of the population don't trust their "liberators" and have no reason to trust them.

I agree with your abstract principles that we should be in solidarity with oppressed peoples, and come to their aid. To come to the point where we can put those principles in action, requires that we make sure that the institutions we act through are in accord with those principles. It requires we be vigilant and skeptical citizens in making sure that how we come to their aid is morally legitimate. The Bush administration never was, and found that the liberation of Iraq was a convenient cover for other aims.

And finally back to the analogy and where it breaks down. The Iraqis are not children. The best way to have affected their liberation from Saddam Hussein was to assist them in liberating themselves. The one opportunity to have done that was lost at the end of the first Gulf War. And why? Perhaps because the U.S. didn't want to lose control of the situation? They preferred Saddam, to assisting a Shiite rebellion they couldn't control? Motivations do matter.

Thanks for the response Alonzo.

Alex said...

This is a somewhat minor point; but I feel I must comment on the fact that you've not addressed Blacksun's implication that anything which can be likened to socialism is inherently bad.

You also state that 'I have heard liberals complain ...', which, without references, comes across as somewhat weaselly-worded. In fairness, I probably wouldn't have even noticed this, much less mentioned it, had I not been 'primed' by the above.

As something of an outside observer (from England), I'm still taken aback by how frequently and easily guilt by association appears to be used in the US to dismiss anything with debatably liberal or socialist leanings. I'm not saying that it doesn't happen here; though I do get the impression it happens less frequently, and with more extreme terms (communist, anarchist, fascist), I'm obviously going to be somewhat blinded to the state of my own political environment.

If you have time to discuss the demonisation of various political terms and ideologies, I'd be very interested to read your views.