I have rewritten the introduction for my new book again, although the first chapter is unchanged. I think that the focus is much stronger. Thanks to Jim Kirby and the others for their suggestions. Any more comments would be appreciated.
http://michaelperelman.wordpress.com/files/2008/06/ch-1.doc
21 comments:
I think it may be helpful to point out that 'capitalism' cannot be equated with 'the market'.
What is capitalism? I think the following is a reasonable definition:
Capitalism is an economic and social system that entails the commodofication of people, the environment and other things. Central to it is the notion of private property and the use of money. It involves the artificial sustaining of demand for products from large and extensive markets through a mechanism of unequal exchange. Good are exchanged using an artificial pricing system "fueled by the virtues and vices of private property and unregulated common property and cultural perceptions of the natural world as commodified and limitless. A culture that excludes biology and nature from the social sciences.
In David Goldblatt's book entitled "social theory and the environment' he says that the most important environmental consequence of industrialisation was the unleashing of capitalism. He notes what he calls the nine defining characteristics of industrialism:
1. mobilisation of inanimate power;
2. mechanisation;
3. Factory-based production of goods;
4. Economic centrality to the culture;
5. The importance of new sources of raw materials (especially fossil fuels);
6. the importance of theoretical science;
7. the necessity of a complex division of labour;
8. High levels of capital formation;
9. Structural change within the economy;
page 35.
I would add another:
10. High energy use.
Thus trade must be 'free' (unrestrained by national and cultural boundaries) to ensure the absence of economic constraints.
I corrected some of your grammar. Where do you want the Word doc sent?
Jimbo, could you please send it to michael dot perelman at gmail dot com. thanks.
In the second paragraph(?) the word "hand" is missing and the indendation is wrong.
A couple of general comments - the book seems to be just a criticism of the modern market capitalism. I don't actually see ANY discussion in the introduction here of what alternatives you might have in mind.
Using the family as a parable might be instructive. Do parents insist that a young child pay for his supper with funds earned at market rates? Do they create a debt for services rendered to the child at market rates (as a useful pension fund perhaps)? In fact they once DID and progress really started when they stopped doing that. Investigating why, could be a useful line of enquiry.
Brenda Rossa -
how is 10 different from 1?
Reason asks how different point number 1 is from point number 10.
The phrase 'mobilisation of inanimate power' does not convey the remarkable change in the RATE of energy use (marked increase) that has taken place with modern industrialisation. And the word 'inanimate' simply refers to a type of power that is sourced from non-living things.
Actually, I have a book written by Robert Heilbroner written in the early 1970s that predicts relatively imminent ecological collapse simply through the exponential rise of man-made heat generation.
' An Inquiry into the Human Prospect' (I think that is the title).
Hello Perelman, congratulations for your book!
Does your book offer a concrete economic programme for your anti-Procrustean economy? Or does it form part of further works?
You cite Weber as a critic of market economy but he also was, like Ludwig von Mises and Boris Brutzkus, among the first that acknowledged the then (1920’s) irremediable necessity of market for rational allocation of resources.
Are you thinking in a Market Socialism programme?
Sincerely,
Alejandro Agafonow
http://socialismodemercado.blogspot.com/
Michael,
I downloaded the "new" version and it seems no different. Do you intend that "invisible" not be followed by "hand" in the first paragraph?
You are asking a lot of your readers if you expect them to read the same document again, thinking it has changed.
I am sorry. I thought that I had linked to the new version. I did not manage to do so. It is a new version now.
i thought GDP's problem were faierly well known. More modern criticisms of GDP follow the GMU school of chaotic economics, which showed that while Friedman may not have been write that the invisible hand always dealt the correct cards, the hand you were dealt actually was the best possible one anyway. Movign past the Genuine Progress indicator, one finds old biases against supposed 'welfare decreasing' allocations are simply that. The universe is non-oriented.
I wonder if Procrustie took his name from his endorsement of crusty punks? Also, I know some people who like really ordered houses, so from that viwew, if your arms or legs are over the side of the bed, it really disturbs the graviational feng shui balance, and so one may want to trim them to symmetry.
Is media's comment a joke? (More specifically is it a joke at GMU's expense, or does he actually like them.) He is new to me, so I don't know where he is coming from.
to a large extent, i think GMU economics is a bad joke (no worse perhaps than the rest of existence). I think it owes mostly to affirmative action (of the 'white' kind)---I am amazed what people can get tenure for (though actually this issue arises across the ideological spectrum). That guy Buchanan threw in a few faux equations...and you've hooked the fish. (But Sen isn't too difrent.)
my real point was made by georges roegescu, at least the first place i saw it, though it appears to be standard. (G-R himself had some logical problems, but he got that right.)
from this point one gets the idea that criticizing the market as inneficient is actually a value judgement, perhaps only suitable for those who don't own shares in Corrections Corporation of America, or make a living defending Gitmo people.
also while brenda riosser's definition of capitalism is acceptable, there are others. I can see a capitalism based on the labor thopery of value (a la adam smith) which does not commodify people neccesarily nor thrive off 'vice'. Unless one identifies capitalism as worship of capital, i have no problem with it (eg market socialism or market capitalism).
the real problems with books like this is that many of the people who might most benefit from them don't read them, or anything at all. the people who do read tend to read so they can be corporate attorneys, etc. Without some theory of 'delivery of services' beyond 'buy my book' I really don't see the purpose, since there are already a few ok books around.
I am also skeptical of the 'one bestselling author genius' model; I thought that went out with Thomas Paine, Einstein, the Koran and the Bible. but maybe i was wrong. I guess I suffer the same problem, since my book, called Wikipedia (with links to other web pages I've created) I think is really the only one you need to read. (I am a mixture of Columbus and Einstein, so if I discover america or the internet, it's my property, as well as an act of intellectual creative genius).
last, from what i gather the difference betwen 1 and 10 is nothing. espcially, mod (10) (or bose-einstein statistics). However, if we go that way, i'd choose p-adic numbers as my ideology.
Media said: "also while brenda riosser's definition of capitalism is acceptable, there are others. I can see a capitalism based on the labor thopery of value (a la adam smith) which does not commodify people neccesarily nor thrive off 'vice'. Unless one identifies capitalism as worship of capital, i have no problem with it (eg market socialism or market capitalism)..."
I haven't yet finished reading Adam Smith's book, though I have recently purchased a second hand copy (1937 version with an introduction by Max Lerner).
Adam's Smith's 'labour theory of value' is in Chapter 5:
"The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities..."
I don't agree with this. The value of the object/service should also encompasses any detrimental effects on the natural environment as well as ethical/cultural judgements related to the activity of producing the 'commodity' for exchange. [Accepting this definition makes it possible, therefore, for commodities to come into being that actually have a negative value.]
Adam Smith's book is an example of how we've been deceived into thinking that what is, in reality, the 'worship of capital' is the 'free market'.
Today's 'free market' is the *denial of sensible economic planning; * manipulation of the terms of trade and national currencies * over-exploitation/marauding of people and the environment * vested interest capitalism * the propping up of the american economy by the military industrial complex * an economy viewed as quite separate and distinct from society (it's values, needs, whilst the 'wants' are created through constant deception and propaganda) *production of goods and services for monetary profit only *debt-driven (rather than need-driven) enterprise * a cancerous economic engagement with a demand for continuous expansion and growth *concentration and centralisation at the upper end of the economy * corporatisation *monoculture *specialisation of entire economies *focus on export industries *dominance of competition over cooperation....etc.
It's very interesting that we can observe this type of toxic capitalism accelerating around the globe from the time America could no longer meet its Bretton Wood's commitment to provide a global reserve currency. Associated with expensive and unnecessary wars and the over-exploitation of oil reserves in the service of a tiny group of vested interests.
“..If the onset of the process of globalization dates from the world energy crisis of 1973-1974, this crisis also marks the recycling of petroleum dollars through the Euromarket and heavy lending to the largest Latin American countries, leading to the debt crisis of the early 1980s. The effects of the 1982 debt crisis on Latin America lingered through the decade. Indeed, in the years following the international debt crisis, most Latin American countries have experienced only fleeting spurts of growth, punctuated by economic crises of varying intensity and duration..."
From: Latin America in the Era of Globalization : Inequality, Poverty and Questionable Democracies
Judith Teichman. University of Toronto. CIS Working Paper 2001-2 [2001-2.pdf]
I am glad that someone else appreciates Georgescu-Roegen.
r.e. b. rosser: while your environmental critique of Smith is on point, i think he was a 'man of his time'---i heard he didn't even recycle his computer, for which i can't forgive him. (if he ddidn't have one, that is still no excuse in my book.)
so, nowaDAYS one follows H Daly and Henry george and includes 'natural capital' as part of the labor theory of value. all the lil scummy bugs and so on have to get paid too. it costs father earth $5 per pound of human it supports, and he be collecting.
also, the LTV is incomplete because you need also 'subjective utility'. my work for example is vastly underpaid due to the hegemoney of the fasicst system's dominant racist patricarchal mainstream media blogs. from fundamental physics, me just getting out of bed is worth $80/hour, due to Newton's law of gravitas.
why anyone would read smith today is beyond me. (as a curiosity, ok. adults prefer, say herbert dingle. ) but as hegel said, while history is bunk, its important to read because what we learn from history is that we don't.
georges roegescu had some good points, but like GET his stuff has been turned into a minor industry filled with noise. perhaps combining him with stalin, dingle, and ayn rand one can get a new 'heterodox synthesis' which can become the new orthodoxy, or the new 'friendly fascism' we all earnestly desire and hope for.
i wonder whether flying to mexico to give a paper will deliver the goods. presumably information will reach its target, solving the problem of imperfect information that plagues imperfect, non-omniscient representative agents, made in the image of dawg. (remember some may be seen as the treasure of the sierra madre, so watch those kidnappers!! i think brazil has shown brown sugar is useful for combatting global warming, so one could bring some back too to help the homies chill. )
Media said: "r.e. b. rosser: while your environmental critique of Smith is on point, i think he was a 'man of his time'---i heard he didn't even recycle his computer.."
Some people of their time are:
Baruch Spinoza (1600s)
"One Substance, Infinite Attributes."
John Lawrence (1796)
'A Philosophical Treatise on Horses and on the Moral Duties of Man towards the Brute Creation'. Lawrence rejected the idea that animals were "merely for the use and purposes of man." He argued that "life, intelligence, and feeling necessarily imply rights." and that the "essence of justice" was not "divisible".
John Muir (1867)
"how narrow we selfish, conceited creatures are in our sympathies! How blind to the rights of all the rest of creation!"
Henry David Thoreau
"You must love the crust of the earth on which you dwell more than the sweet crust of any bread or cake; you must be able to extract nutriment out of a sand heap."
Walter C Lowdermilk (1939)
The eleventh commandment:
"XI. Thou shalt inherit the holy earth as a faithful steward, conserving its resources and productivity from generation to generation. Thou shalt safeguard thy fields from soil erosion, thy living waters from drying up, thy forests from desolation, and protect protect the hills from overgrazing by thy herds, that thy descendants may have abundance forever. If any shall fail in this stewardship of the land, thy fruitful fields shall become sterile stony ground and wasting gullies, and thy descendants shall decrease and live in poverty or erish from the face of the earth."
Martin Luther King (1960s)
"The profit motive, when it is the sole basis of an economic system, encourages a cutthroat competition and selfish ambition that inspires men to be more concerned about making a living than making a life."
Tim Flannery (2005)
"I remain optimistic that we can turn things around, but I think we've got much less time than I thought to ensure our survival."
i remember reading thoreau about how we need the wilderness. yes, indeedie.
i was seeing this canadian goose yesterday with its baby. it seems its got my number. lunging at me; lucky i werent wasnt too hungry. then there were all those fishes. the lil baby foxes...with nothing better to do than attaack momie. its sooo crowded.
junkyard has a nice single; backyard's myspace page has too many rip's for my taste.
spinoza was pretty cool in that he got excommunicated.
as for lowdermilk, some may be 'stewards of the environment' or even environmentalists; i'm sympathetic but i am part of the environment. so, as the geeses, foxes, coyotoes, and fish say, go f-k yourself.
Media: "but i am part of the environment. so, as the geeses, foxes, coyotoes, and fish say, go f-k yourself."
Reminds me of a song.
If you cut every corner things are never all that bad;
Everybody does it -- even Mom and Dad.
If nobody sees it, then nobody gets mad--
It's the American Way!
In other words, you cut so many corners, Media, I have no idea what your point was. Mine was to say that the throw away line 'a man of his time' doesn't explain why other, perhaps far more thoughtful individuals, never experience the historical limelight.
my use of the line wo/'man of his time' (that's more pc) was that Adam Smith, who you seemed to be criticizing as a market fundamentalist who wanted to commodify (or put a price on) everything i thought was overwrought and also misplaced (since he wrote also 'moral sentiments' and beliecved in the labor theory of value, if we was overoptimistic about specialization and 'free trade'), so that was like complaining about Abe lincoln for suggesting blacks were not equal to some audiences, and maybe should pack up and move back to mother africa. my view is nobody knows what those people really thought, and the hisotrical record is complex, and besides, its water under the bridge, and one should avoid selective morality since many people of the time had similar retro or non-pc views. i was a wo/man of my time too, last week.
(however, most reasonable people such as itzhak bars seem to believe in a 2 time universe (equivalently, 2-timing) , but due to media brainswashing they don't notice the other one. i also like the idea that i can be a wo/man of my time next week too, using Nzeitche-Poincare eternal return, or Feynman-wheeler 'future past' electrodynamics. Socially, perhaps we can be people of other's time too through expropriation. Take some time, to....).
i took your point to mean that i am a 'capitalist' who commodifies everything (eg everyone pay $5 to father earth for support, for which i have been appointed trustee so it goes in my account, which sounds like a job i can do).
Also, you site 'bishop lowdermilk' who i took to be arguing that my commodified, utilitarian, 'computable general equilibrium economic view, based on the correct hamiltonian', was spiritually wrong and unfounded, and so instead i should adopt a non-commidified view of 'christian stewardship', meaning i should send him a check and devote my life to a spiritual path of raising money for his ministry, prostitutes, etc. That actually looks like disguised capitalism, as are commonly other 'anticapitalists all the way to the bank' . (I do like the Templeton fund's spiritual capitalism' notion, which is that money and god are convertible, and also based on the physics of einstein, and its nice how they have hired the entire stable of poor, starving modern sceintists to promote this intellgent design).
Dont know lowdermilk, but the amish and MLK christian types are ok by me, as well as the new 'green christians' who seem to be trying. Or, how about the Unseenband.com or the ten commandments band (XCB)?
it is interesting, related to your point, why some people with 'better' views don't get the limelight. I have never even been invited to appear on Rush's show or Michael Savage's, nor had a bestseller or noble prize or cabinet post, or honorary degree. i'm still waiting to hear about that 'vice' job; something about politics. (Of course, i do the DIY thing so now I have multiple medals and awards and degrees and sports trophies; they are piling up).
some argue its the mainstream media, if not god, market allocation, maximum entropy, or least action, which selects president-selects, and others who get the limelight.
Adam Smith, like Thomas Paine, had a bestseller i think (and who wsould imagine that in such prehistory they even knew how to read).
its also interesting that who 2 people living at the same time can have different views (eg capitalist or anticticapitalist). The simplest view is by the noted econophysicist Feynman, who held there was only one electron (which condenses into humans, etc.) and its phase shifted in time.
theres a song 'i am me and you are you and we are ....all together now' by some brit band which plagiarized this idea.
cutting corners, running red lights, always make points clearly connected by the shortest path. yeah its the american way, and perhaps universal.
Media said: "my use of the line wo/'man of his time' (that's more pc) was that Adam Smith, who you seemed to be criticizing as a market fundamentalist who wanted to commodify (or put a price on) everything i thought was overwrought and also misplaced (since he wrote also 'moral sentiments' and beliecved in the labor theory of value, if we was overoptimistic about specialization and 'free trade'), so that was like complaining about Abe lincoln for suggesting blacks were not equal to some audiences, and maybe should pack up and move back to mother africa. my view is nobody knows what those people really thought, and the hisotrical record is complex, and besides, its water under the bridge, and one should avoid selective morality since many people of the time had similar retro or non-pc views. i was a wo/man of my time too, last week..."
Sounds fair enough; except for a couple of things. Smith did 'fundamentally' contradict himself, after all. I dare anyone to be logically consistent when explaining the 'wealth' of nations on the one hand and then employ Smith's 'labour theory of value' on the other to describe the source of such 'wealth'.
Speaking of value. What use is 'UNselective morality', Media?
“you cannot rise above your words” and “when you're shoveling dirt, whether you hit the mark or miss it, your hands still get dirty” Zig Ziglar
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