I saw the first write up in this node when it hit the New Writeups nodelet and I really wanted to be the first to dash off a line by line answer of profoundly original clarity and depth. As a slow writer I resigned myself to not being able to accomplish such a feat. Then I noticed that the writeups that slowly appeared didn't actually respond to the questions comprehensively, in sequence, so I got down to business and decided to go for it. This is going to be long because most of my answers involve completely recontextualizing the questions. For example "Why is coercion better than inequity?" implies that something called "capitalism
" doesn't involve coercion
and does involve inequity
. I can speak to the issues, I think, but the pithier my responses, the more they reinforce the basic assumptions. Operational Translation: this is going to take a while to answer...
First (though I know they're boring) some definitions are useful because when different people discuss politics they often use the same "labels" and vocabulary but mean drastically different things. RevJim23 seems to think "capitalism" means "our economic system" as it currently works. His questions seem to imply that "our economic system" (AKA "capitalism") involves (1) freedom, (2) a moderate safety net, and (3) a situation where the work ethic is a belief that will induce successful behavior.
Note that this is distinct from what many people would think of as "real" capitalism where you'd have to start using French words like "laissez-faire", mention interest rates at least tangentially, and probably discuss monopolies.
My basic strategy for the rest of this writeup will be to point out where I think RevJim23 got the "what is really happening" part of "our economic system" wrong. After that I will have enough background to answer each of his questions from the perspective of what I think is really happening and then respond to why he framed the issues the way he did given his perspective on what is really happening.
I think the best place to start is with a quote from Noam Chomsky in What Uncle Sam Really Wants, 1986 (pgs.9-10):
Kennan was one of the most intelligent and lucid of US planners, and a major figure in shaping the postwar world. His writings are an extremely interesting illustration of the dovish position. One document to look at if you want to understand your country is Policy Planning Study 23, written by Kennan for the State Department planning staff in 1948. Here is some of what it says:
we have about 50% of the world's wealth, but only 6.3% of its population... In this situation, we cannot fail to be the object of envy and resentment. Our real task is to devise a pattern of relationships which will permit us to maintain this position of disparity... To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives... We should cease to talk about vague and... unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better.
PPS 23 was, of course, a top-secret document. To pacify the public, it was necessary to trumpet the "idealistic slogans" (as is still being done constantly), but here the planners were talking to one another.
Along the same lines, in a briefing for US ambassadors to Latin American countries in 1950, Kennan observed that a major concern of US foreign policy must be "the protection of our (i.e. Latin America's) raw materials." We must therefore combat as dangerous heresy which, US intelligence reported, was spreading through Latin America: "the idea that the government has direct responsibility for the welfare of the people."
US Planners call that idea Communism, whatever the actual political views of the people advocating it. They can be Church-based self-help groups or whatever, but if they support this heresy, they're Communists.
I think that it is clear that this Chomsky quote is a bit dated. But the post-WWII history still basically holds. After a bit more broad summarizing, the rest of the book is full of similar line by line analysis of the various wars we fought (including Vietnam) that were based on this policy and were generally successful at making sure no government actually succeeded in improving "the welfare of the people" (by which criteria, Vietnam was a resounding success) and setting an example for what other countries could do if they stopped acting like tiberium harvesters in some world-wide Command and Conquer game and acting more like people trying to feed themselves. And don't think the end of the Cold War has changed anything: cut and paste the rhetoric and do exactly what we've been doing for half a century and our drug policy in Columbia makes perfect sense.
I have to admit now: That first quote was mostly for the "explaining where RevJim23 might have gotten his impressions about capitalism" part of the answers below: carefully thought out government PR (which is called propaganda when other people do it). It also (hopefully) gives the setup for another quote that has a lot more to do with our domestic policy and directly answering RevJim23's questions. Also from Noam Chomsky in What Uncle Sam Really Wants, 1986 (pgs.13-14)
The US government had two major roles to play. The first was to secure the far-flung domains of the Grand Area. That required a very intimidating posture, to ensure that no one interferes with this task - which is one reason why there's been such a drive for nuclear weapons.
The government's second role was to organize a public subsidy for high-technology industry. For various reasons, the method adopted has been military spending, in large part.
Free trade is fine for economics departments and newspaper editorials, nut nobody in the corporate world or the government takes the doctrine seriously. The parts of the US economy which are able to compete internationally are primarily the state-subsidized ones: capital intensive agriculture (agribusiness, as it's called), high-tech industry, pharmaceuticals, biotechnology, etc.
The same is true of other industrial societies. The US government has the public pay for research and development and provides, largely through the military, a state-guaranteed market for waste production. If something is marketable the private sector takes it over. This system of public subsidy and private profit is what is called free enterprise.
Postwar planners like Kennan realized right off that it was going to be vital for the health of US corporations that the other Western industrial societies reconstruct from wartime damage so they could import US manufactured goods and provide investment opportunities. (I'm counting Japan as part of the West, following South African convention of treating Japanese as "honorary whites.") But it was crucial that these societies reconstruct in a very special way.
The traditional, right-wing order had to be restored, with business dominant, labor split and weakened, and the burden of reconstruction placed squarely on the shoulders of the working classes and the poor.
The major thing that stood in the way of this was the anti-fascist resistance, so we suppressed it all over the world, often installing facists and Nazi collaborators in its place. Sometimes that required extreme violence, but other times it was done by softer measures, like subverting elections and withholding food. (This ought to be Chapter 1 in any honest history of the postwar period, but in fact it's seldom even discussed.)
The pattern was set in 1942, when President Roosevelt installed a French Admiral, Jean Darlan, as Governor-General of all French North Africa. Darlan was a leading Nazi collaborator and the author of the anti-semitic laws promulgated by the Vichy government (the Nazi's puppet regime in France).
After that Chomsky discusses each European country in sequence, describing who we shot, who we starved, and who we put into power. Then the book settles down to get into the detailed summaries of all the little "police actions", what the theory behind them was, and which corporations benefited... up till the present.
I wonder how many people are still reading and how many have tuned out already?
There's a lot in those quotes to think about, but I will summarize the main points I'm trying to establish: (1) the practical operations of the current economic system has a lot to do with power politics and very little to do with the theology of economics, (2) the "poor people" you see daily who are on welfare are not the poor people who are really getting screwed by the current economic system (those people rotted in ditches in Nicaragua years ago after being tortured by US trained thugs or are currently making sneakers in Thailand), (3) as outrageous and unjust as this is, you don't really want it to change because the immediate short-term alternative is to average your lifestyle against the $20/year lifestyle of a hundred other people who you don't know and who probably don't speak English as a first language.
I think I'm ready to answer the questions line by line now :-)
1. Why is coercion better than inequity? The kind of coercion this question countenanced was the kind of coercion that Sweden practiced prior to 1991, where an individual's paid up to 80% income taxes and corporations up to 52% (compare with the US where the top individual income tax in the US during the Kennedy administration was in the 60%'s, was 36% last time I checked, and is expected to go lower in the near future thanks to a certain president who scammed his way into office). To me (and admittedly I voted for Nader in '00 when it was cool and in '96 when it wasn't nearly so glamorous) this seems mostly like rearranging chairs on the deck of the Titanic.
That said, the present economic system of the US (which everyone calls capitalism, remember) does involve quite a bit of coercion: aozilla's apple example works, there's also the men with guns who will put me in a cage for putting certain pictures on certain kinds of paper, copyright laws driven mostly by Disney's desire to keep Mickey Mouse out of the public domain, and the five million or so police officers protecting the property of some people and not the property of others.
2. What's wrong with typical "safety nets" of capitalistic societies such as welfare and (in the United States) Social Security? The only problem I have with them is the gross amounts of effort wasted distributing a carefully determined number of food tokens (read dollars) to certain specifically delimited people. If I had my way, everyone in the country including Donald Trump would get a $40,000 check every year (different amounts at different times, but you get the picture), sales taxes would be targeted to (1) take into account the true external costs of products (like gasoline and beef which currently enjoy massive subsidies in the wrong direction) and (2) increase the costs of luxuries to prevent the sales tax from being to regressive. Most government income would come from capital gains, corporate taxes, a stock transfer taxes. All the social security, welfare, veterans, disability, and other entitlement bureaucracies would be dismantled and the people staffing them sent to technical schools to become engineers (or whatever actual productive skill they wanted to learn). The out-payments the bean counters used to be in charge of would be covered by the $40,000.
3. Do(es) any (economic system which is "more fair") exist? Have they been tried and proven? See the node describing a gift economy. If you want something a little less revolutionary or a little more modern, I can tell you about my living arrangements :-) I am a member of the Santa Barbara Student Housing Co-op. The SBSHC is a 501(c)(3) non-profit corporation that was founded in the mid 70's by a starry eyed idealist to whom I am very grateful, which owns buildings near the University of California Santa Barbara . Its members are all students and they run everything. The guy who lives upstairs from me in Dashain House is the president of our Board of Directors (he also got gassed at the Seattle WTO protests and makes a mean Chinese noodle salad). Our "rent" pays a mortgage and anything leftover at the end of each academic quarter is returned to the members. We don't pay landlords a dime. No one makes a profit off of our need to not sleep in the rain. Our co-op is part of the North American Students of Cooperation. NASCO will help you set up a co-op at your school if you want.
As to the "tried and proven" part of the question, my co-op is 25 years old and has an excellent credit rating. There are older co-ops that are equally solvent. And whole cultures have made do with gift economies for thousands of years before corporate mergers were invented.
4. If wealth is redistributed somewhat equally, what is the incentive for people to achieve or produce more than they are allowed to keep? Why did Linus Torvald start working on Linux if he was planning on giving it away? A sense of community. Personal prestige. Go read the gift economy node if you want a more in depth explanation. To extend on the discussion of "my" co-op: I am on the housing committee. We are looking to expand the co-op by buying or building more houses. While the monetary costs will be paid by future co-op members as dues to pay a mortgage, several people in the co-op including myself are putting hours of effort into something that will not personally benefit us. We just want to see the co-op grow because we have found it great to live in a house whose costs aren't an indication of their "fair market value" (which given the housing crunch in Santa Barbara generally, is neither "fair" nor particularly equal to the "value" of the building).
Another thing I just wanted to point out, is that incentives for people to produce more than they actually need are a bit perverse when you think about it. People aren't pack mules. If they want to loaf they should be able to, but if they want to schedule every second of their lives in day planners and drive BMWs they should be able to do that too. One of the things I was trying to make clear is that most of the really brutal costs of our economic system are born by people who are not on welfare, and most of the really obscene wealth is collected by people like the Duponts, the Forbeses, and lately the Gates dynasty (plus a bunch of smaller "business people" who are only "millionaires" who have learned the art of contract manipulation). Those people have the "tokens" to get thousands of times more stuff than they could ever produce with their own hands... and that means someone is making more with their hands than they have the tokens to claim... guess who? Maybe the same people who are being "incented" to produce more than they need?
5. Do you think there could ever be a sustainable economic system based on capitalism in which caring for the needy was the responsibility of NGOs (non-governmental organizations) such as churches or charities? Taking capitalism to mean "what the US is doing right now" my answer would be no. Listen to Chomsky (again from What Uncle Sam Really Wants, 1986) discuss what went on in El Salvador under the liberals (pgs.34-36) pay special attention to which NGO participants were being killed :-)
For many years, repression, torture and murder were carried on in El Salvador by dictators installed and supported by the US government, a matter of no interest here. The story was virtually never covered. By the late 1970s, however, the US government began to be concerned about a couple of things.
One was that Somoza, the dictator of Nicaragua, was losing control. The US was losing a major base for its exercise of force in the region. A second danger was even more threatening. In El Salvador in the 1970s, there was a growth of what were called "popular organizations" - peasant associations, cooperatives, unions, Church-based Bible study groups that evolved into self-help groups, etc. That raised the threat of democracy.
In February 1980, the Archbishop of El Salvador, Oscar Romero, sent a letter to President Carter, in which he begged him not to send military aid to the junta that ran the country. He said such aid would be used to "sharpen injustice and repression against the people's organizations" which were struggling "for respect for their most basic human rights" (hardly news to Washington, needless to say).
A few weeks later, Archbishop Romero was assassinated while saying a mass. The neo-Nazi Roberto d'Aubuisson is generally assumed to be responsible for this assassination (amongst countless other atrocities). D'Aubuisson was "leader-for-life" of the ARENA party, which now governs El Salvador; members of the party, like current Salvadoran president Alfredo Cristiani, had to take a blood oath of loyalty to him.
Thousands of peasants and urban poor took part in a commemorative mass a decade later, along with many foreign bishops, but the US was notable by its absence. The Salvadoran Church formally proposed Romero for sainthood.
All of this passed with scarcely a mention in the country that funded and trained Romero's assassins. The New York Times, the "newspaper of record," published no editorial on the assassination when it occurred or in the years that followed, and no editorial or news report on the commemoration.
On March 7, 1980, two weeks before the assassination, a state of siege had been instituted in El Salvador, and the war against the population began in force (with continued US support and involvement). The first major attack was a big massacre at the Rio Sumpul, a coordinated military operation of the Honduras and Salvadoran armies in which at least 600 people were butchered. Infants were cut to pieces with machetes, and women were tortured and drowned. Pieces of bodies were found in the river for days afterwards. There were church observers, so the information came out immediately, but the mainstream US media didn't think it was worth reporting.
Peasants were the main victims of this war, along with labor organizers, students, priests, or anyone suspected of working for the interests of the people. In Carter's year, 1980, the death toll reached about 10,000, rising to about 13,000 for 1981 as the Reaganites took command.
I could go on... in the next couple paragraphs it discusses the political maneuvers necessary to keep military funding going after a PR blunder consisting of the rape of four US nuns... If by "a sustainable economic system based on capitalism" you don't mean this kind of capitalism, but just something like "a system where people use tokens called money to trade stuff" then sure. Just about any NGO could work within those limitations.
6. How should freedom be ranked against economic equality? I think I've gone on long enough with the quotes and discussion. To distill my message: Most ideology is crap. Most economics is theology in disguise. Try to listen to the minority views of every side, figure out what your gut says is right, then use your brain to work on doing it.
Finally, I should point out that in writing this out I've worked myself into more of a political lather than usual. My shoes were made by child labor, just like yours. Just as RevJim23 was playing devil's advocate for capitalism, some of this was me playing devil's advocate for progressive politics. Of course that doesn't mean the WTO's existence and Nader having no chance at elective office isn't fucked up...