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Politics

Kapitalister og sosialister, foren dere!

Oct 1, 2020 Harold James

PRINCETON – Verdens mest dynamiske økonomi er ledet av et kommunistparti, mens det som lenge har vært kapitalismens høyborg blir (van)styrt av en mann som har gått konkurs seks ganger. Dagens ideologiske landskap blir stadig mer uoversiktlig, og det kan virke som om merkelapper betyr stadig mindre.

President Trump og hans republikanske meningsfeller hevder at de er selve bolverket som står mellom den amerikanske drømmen og en sosialistisk revolusjon. Selv om Trumps demokratiske utfordrer i det kommende presidentvalget, Joe Biden, ikke vil gjøre slutt på kapitalismen, så har han uttrykt støtte til tanken om å gjøre slutt på det som kalles “shareholder capitalism.” Uansett er kapitalisme og sosialisme igjen begreper det strides om i det offentlige ordskiftet.

Men i motsetning til tidligere tider, har forsvaret av kapitalismen svekket seg, både intellektuelt og politisk. Mens politisk korrekte kapitalister (“woke capitalists”) som det eksklusive merket Lululemon fremmer budskap om å motsette seg kapitalismen (“resist capitalism”), har selv tradisjonelle kapitalister, som det innflytelsesrike Business Roundtable – en organisasjon for direktørene i USAs største børsnoterte selskaper — fremmet fundamentale reformer. Likeledes har Klaus Schwab, grunnleggeren av World Economic Forum, fordømt nyliberalisme og markedsfundamentalisme.

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Harold James

Writing for PS since 2001
205 Commentaries

Harold James is Professor of History and International Affairs at Princeton University. A specialist on German economic history and on globalization, he is a co-author of The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, Making the European Monetary Union, and The War of Words.

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j. von Hettlingen Oct 15, 2020

Harold James says capitalism and socialism could converge once again as it did on various occasions in the past. History shows that strict adherence to capitalist decentralisation and socialist central planning in their implementation often became “destructive when they produced excessive concentrations of power.” Trump is urging his fellow Americans to reject Joe Biden’s bid for presidency due to the “socialist” agenda his Democratic rival might imose on them.
However, many Americans have not benefited from Republicans’ fiscal and free market policies. The GOP laissez-faire approach favours a small government, and lets big businesses expand without being held back by laws and regulations. Given Repbulicans’ failure to govern, the US might as well explore the aspects of capitalism and socialism in a mixed economic system, that protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.
According to the author, “the world’s most dynamic economy is governed by a communist party, whereas its previous capitalist stronghold is under the misrule of a man whose companies have gone bankrupt six times.” Trump bashes socialism embraced by progressive Democrats, who point to Nordic nations in Europe as models of their political ideals. He demonises Democrats ever since some lawmakers started promoting liberal platforms like the Green New Deal and Medicare for All.
The Nordic countries protect property rights, exercise less control over private enterprise, permit greater concentration in the banking sector, and distribute a smaller share of their total income to workers. As a result, they have, in the last ten years, been ranked consistently as the “world’s best countries to live in”. Norway, Denmark, Sweden and Finland have become icons of fair societies, with both high economic productivity and an unequalled quality of life.
It is not erroneous to assume that “today’s ideological confusion owes much to technological disruption. Digitalization and the widespread diffusion of information and communication technology (ICT) have upended established views about centralization and decentralization.” The global economy is undergoing a digital transformation and it’s happening at breakneck speed. Nowadays, digital economy has become part of our macroeconomics.
This new economic activity resulting from billions of everyday online connections among people, businesses, devices, data, and processes, has offered a new opportunity for a mixed economic system of capitalism and socialism. The free market allows businesses to interact with consumers, and provide services, information and goods. Yet government intervention is at times necessary to regulate the system and provide for cyber security in trade and commerce.
The author points out that the handling of “data can be problematic” in a Western democracy, where privacy is highly valued. “Whereas some is managed by governments and international institutions, much is held elsewhere…….In the case of governments and companies especially, there is a constant tendency to suppress data that is inconvenient or uncomfortable.” In recent months “the COVID-19 pandemic has shone a harsh light on the ways health outcomes are linked to social and economic disparities, and this realization has led to the politicization of other data, such as that relating to crime incidence, incomes, and ethnic identities.”
Big data hass become the new black gold. Although artificial intelligence (AI) and big data are being used in the fight against COVID-19 in multiple ways, such as identifying and tracking outbreaks, diagnosing the virus, developing vaccines, calculating disease models to shape national shutdowns and policies, surveillance and contact tracing, facial recognition and fever detection, and sterilisation and delivery of food and supplies etc, many people find these measures intrusive.
The author reminds of the “early nineteenth-century struggles” which were “fights over the ownership of the means of production, but we can now be much more specific about what that concept involves. What is most needed today is a broad-based movement to secure ownership of data, following on the model of early nineteenth-century workers’ demands to own their own labor.”
The question whether data can be “shared in ways that maximizes the benefits without compromising social interests, individuality, or privacy” can not be answered without contemplating the trade-off between privacy and public interest.
The author says, “capitalists and socialists of the world must unite to answer that question. They have nothing to lose but their data.“ In a Western democracy most people view the collection of personal data as a threat to their personal freedom. In this regard, experts have been complaining about lagging behind China in AI, where the authoritarian regime exerts total control over its citizens’ data and use them without their consent.
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Matthew McCarthy Oct 5, 2020

It seems to me that a weakness of arguments like this is that the role of government in a capitalist economy is typically overlooked. Even in extreme libertarian thinking the government, via laws, is expected to enforce contracts, and protect the commons. The current government doesn't fulfill that function well. Instead we see laws written for the sake of cementing the positions of particular market participants not protection of the commons, government cronyism, selective enforcement of poorly written laws. Selective enforcement of poorly written laws is not a defect of capitalism. That is a problem in the political system, not the economic system. Many of the major downfalls that are attributed to capitalism are really marks of poor governance.

Example: the financial crisis in 2008 had many causes, but among them was poorly written laws about lending practices based on known incorrect data. Data about redlining from 30 years before was treated as current, and solutions were based on it which did not make sense in that environment, but were accepted because they reflected trendy ideas. Another was laws that generate conflict of interest: increased risks by large players were assumed to be the responsibility of the government, with no risks held by the folks making them. Incidentally, the new laws that are supposed to mitigate that do nothing of the sort: increased risks by large players are now assumed to be the responsibility of small players and the government, still with no risks held by the folks making them.

Changes in the economic system are not going to address these issues.
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hanno achenbach Oct 4, 2020

If Harold James thinks a worker can live off his data he'll believe anything
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Boon Tee Tan Oct 3, 2020

'Capitalists and Socialists of the World, Unite!'
Oh, will they? Economically, maybe they will. Politically, they will not, for they are poles apart..
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Bob Bogaert Oct 2, 2020

I've been active for over a decade both in the tech industry and the start-up community in China. If westerners just took a little trip to Shanghai or Shenzhen, and saw how Chinese people actually live, work, and think, all fear of China's rise or communist ideology would subside in a day. My Chinese friends are hard-working pragmatists over anything else. I know a few communist party members personally, and they're not more ideological than a member of any other political party, probably much less so. Kids do receive ideological indoctrination in the education system, but so did I. I spent 12 years in catholic school with forced prayers every morning and evening and still came out a free thinker. The difference between that and what happens in Chinese education is negligible. In any case, if we want a brighter future, there is no other way than to combine some central planning (did you ever see Chinese roads, subways, airports, public facilities, business parks?) where there are natural monopolies, the strengths of the free market wherever possible, and green sustainable policy where the cost of immediate action is lower than the cost of long term inaction. On a political color scale, red, blue, and green are all primary elements of what makes a better society.
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Gregory Prang Oct 2, 2020

Better data will not address the two biggest problems of central planning: corruption and incompetence. Of course, scale economies, network effects, and structural problems have to be regulated. But technology and better data in fact amplify and proliferate corruption and incompetence, and increase the need for both regulation and the tempering effect of free markets and competition.
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Michael Public Oct 1, 2020

For me, the best way to move forward is to combine the best of both paradigms. Nothing motivates like an incentive system. No salesmen are ever paid for hours worked. But where any asset is so powerful, so enduring, ever growing, completely vital to the system - such as a police force, the courts or the army - it NEEDS to belong to the collective. If the police were privatized - how much would it cost to make a 911 call and get a response? $1000? $10 000? More? But what about Facebook, Google or Amazon? What about the Nike brand, the McDonalds brand, the Coca Cola brand? These represent the nations largest salable assets, along with land. Against these intangibles no competitor can make inroads, they grow and grow, until they consume everything in their path. That is their nature.

Solution: You nationalize the intangible assets - the brands, the data, the operating licenses and you make them compete to operate them - but not own them. The pool of intangibles can then only be bought by pension funds of workers - broadly speaking, the population. Capitalists can rent but never own - the enduring portion belongs to the people. Sure, there are many practical issues that can foul the whole idea, and bad implementation or corruption would sink the entire ship - but if you really want to 'fix things in society' you cannot have 0.1% of individuals owning virtually all assets in a nation - it is tantamount to aristocracy. Rather, let the highly skilled and those with capital invest their efforts into the operating of things efficiently, rather than perpetual rent-seeking behavior.
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Michael Public Oct 1, 2020

The thing is, nothing is for nothing. Google costs over a hundred billion dollars a year to run. Apple too. Microsoft too. Facebook too. Google does offer a paid version of their Gmail service, with no ads, bundled with plenty extras for $5 a month. Most people, even wealthy ones, stick with the free service and pay with their data. Sure, you can 'take back the data' with government action but then America's shining corporations - the tech giants - will go the way of the *cough, cough* European tech giants. All that will remain are Tencent and Alibaba.
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Janos Nagy Oct 1, 2020

Now I do not want to make this long
There is no such such a thing as a capitalist economic system or socialist economic system.
They are terms invented by people with political agendas. Only in political circles they would identify an economic system as capitalist or socialist.
There is only a market economic system and a planned economic system.
Both needs to have capital to function.
In the market economic system capital is privately owned and the market guides the economic outputs. Now in the planned economic system capital is state owned and the state (communist) guiding the economic outputs.
The planned economic system is a product of communists ideology usually run by communists.
The market economic system is a natural product of democratic countries with election of a political party and not unelected communists.
Now of course today's economic realty in the developed economics the market economic and planned economic created a mix economic system.
But this planned economic part in the mixed economic system has nothing to do with the communist run planned economic system. The two is not the same.
Yes most developed countries has a mixed economic system and they are not a pure market (capitalist) or a pure planned (socialist/communist) economic system.
In these mix economic system the market economic part is to create market economic outputs like a car the planned economic part is for the social social economic benefits like schools and many others. So the planned economic part is not a socialist economic system it is for social economic benefits evolved in devolved economics.
Taxes from the market economic outputs are used for the social economic benefits and it is a very fine line what is a healthy amount of taxes that would support the planed so the social economic benefits part of the economic without harming the market economic.
Lets put it this way only a higher market economic outpout can generate higher taxes for more social economic benefits.
And I need to leave it here.
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