Posted by
W.D. Pitt on Thursday, May 28, 2009 10:52:51 PM
The gaps, as mentioned in the last entry, between various Social Doctrines is rather wide. There is a world of difference between most of them and to jump the gap is difficult. However, what connects these various spectra are systems in economics. At a point, a spectrum's beau ideal of an economic system begins to run and mix with various ideas of the next spectrum, the camel's nose under the proverbial tent if I may. This mixing of doctrines sets in motion a movement toward the next spectrum and tends to cloud the advent of an entirely new political system. During the transition, the economics appear to be the same, it looks like the old system, it smells like the old system, but in reality, the old system is breaking down.
To remind the reader, the Social Doctrines are Anarchism (order sans government), Liberalism (minimal government based on natural law and delegated power), Nationalism (centralized national power), and Internationalism (centralized multi-national government and imperialism). To learn the ins and outs of these basic Doctrines, read the last entry. Each of these Social Doctrines carries with it economic ideas being that economics is actually based less on mathematics and more on philosophy and theology. Most arguments against a particular school of economics usually say "well, that sounds good, but it's just a theory", but truthfully, all economic ideas either are or began as a theory. Only time can really prove whether Adam Smith, David Ricardo, Thomas Malthus, Karl Marx, Albert Marshall, or Maynard Keynes was right. If they are proven wrong, new people come along and try new theories, there is no cut-and-dry economics that all economists believe in.
Yet, the ideas that have been disproven often get ample chances to again prove their error, mostly because of an unconscious populace that can't tell one economic system from the other, hense they are easily fooled when an erroneous system suffers upon the people a resurgence. Each Social Doctrine, their roots being in philosophy, carry with them certain ideas they feel should be accomplished in an economic system, thus, they naturally gravitate towards the ones that most easily meet those desired ends. All of these economic theories are compatable with two Social Doctrines but in different doses, which is why they serve as an ideal bridge on to a new spectrum.
Lets begin with Anarchism. At the 0 degree point, there is no real "market" at all. In the absence of government people are forced to live in close quarters and harvest what they require for sustanance and since anything they do must contribute to staying alive, they have no surplus to serve the purpose of trade. A market is then impossible unless that particular locality begins innovating and is able, through technology, to create a surplus and require less time to work for sustanance. They are able to use that surplus to find another locality with things that they want, since they are able to supply this other locality with products it cannot produce or cannot produce as efficiently, they open up trade and concentrate their efforts on things they can produce more efficiently in order to use these better products for other things they need or want. The two economies build and the economics of 0 degrees shift to the economics of 45 degrees--capitalism.
Capitalism is one of those terms with an over-definition. People often do this with terms like "peace" and "white-supremacy" by adding to the contextual definitions with other definitions mixed with stereotypes creating a mongrel of a definition rather than actually using the words in a conprehensive way. Since Capitalism--as mentioned above--is one of these over-defined terms, allow me to define it properly. Free-market, laissez-faire Capitalism is simply a free-exchange economy. Money isn't even a necessity in Capitalism, a medium of exchange or a reference point to value is all that's required. You have something I want, I have something you want, lets work out a trade. That's Capitalism. This system can develop in the absence of government but thrives in the presence of a government that merely enforces ground rules (i.e. private property, definitive fraud, honor of contract, etc.), thus it is borne of Anarchism and serves as a bridge into Liberalism, connecting the absence of government to the presence of a liberal government. Since Capitalism thrives with the certainty and impartiality of law provided by Liberalism, the two systems make good bed-fellows. The danger in the success of Capitalism, though, is the fact that government eventually gets greedy, and wants to harness the power of Capitalism to best suit its needs and to award it more control in a Nationalistic government. So in order to push the purpose of government from impartial referee to a more powerful ruler, it has to prove it can harness the power of Capitalism and make it greater through the system of Mercantilism, the bridge beginning at 135 degrees.
Many people, mostly Marxists, tend to confuse Mercantilism for Capitalism, and for good reason. Firstly, it calls itself "Capitalism", secondly, it strongly resembles it. There is a freedom of exchange in the lower levels of the economy, but it is seen in Mercantilism as illigitimate, the big differences between Capitalism and Mercantilism are the way the two treat "bigness". For example, in Capitalism, if a firm becomes big and makes bad decisions, it is treated just as harshly by the "invisible hand" as a small firm that makes an equally bad mistake through either insolvency or a loss in profits. Mercantilism, however, tries to alter and guide the "invisible hand" in order to nourish the "national interest" through protectionist policies (i.e. tariffs to alter supply and demand), government recognition of business cabals and cartels, centralized banking, and a nationalized currency. Before a society notices, it has jumped the gamut solidly from Liberalism, into the Social Doctrine of Nationalism
The system of Mercantilism is an attempt to better empower business and its interests in order to help the nation as a whole, but it leads to monopolies and oligopolies in business, and lobbying and corruption in government. Every industry feels it should be protected by a tariff in order to give it an unfair advantage and protect it from foreign competitors. However, this system ends up hurting the consumer because the tariffs force prices to go up, giving the business to charge what it wishes rather than what the consumer is willing to pay for it as it is in Capitalism. Businesses can also go to the government for subsidies, loans, and contracts in the name of the "public good", leading to lobbying and corruption through bribery as well as the empowerment of politicians as lords of business. The inevitable corruption that comes from Mercantilism eventually outrages the people who demand something cleaner, more transparency. The government gives it to them, a system even more corrupt that puts up the front of purity with promises to "reign in" corruption in business and government. This system is called Corporatism, which begins at the point of 225 degrees on the greater-spectrum.
The system of Corporatism is, even still, oft-confused with Capitalism even though they are very far apart. Corporatism, to define it simply, is government direction of the means of production as opposed to out-right ownership of production found in Socialism. It begins with the government promising to "clean up" the government-business relationship with more stringent regulations on business. However, what happens is that the businesses are allowed to help in the writing of the regulations, leading to regulations that help the cabals and cartels remove the threat of competition. This makes way for even stronger monopolies and oligopolies with the government on their side in thwarting off any possible threats. Essentially, in Corporatism, the business interests become the national interests. Businesses, getting too big for just one country, begin to open firms all over the world and the government increases their spread in order to protect their national interests, assisting these mongrel firms and moving the country from Nationalism to Internationalism.
A point made by F.A. Hayek in his book The Road to Serfdom, as well as in Economics in One Lesson by Henry Hazlitt was that Corporatism creates a demand from the people for Socialism. Hayek wrote his book on the basic premise of inevitablity. He pointed out that as governments aide businesses in the name of "national interests", the corruption becomes more and more apparent, this incestuous relationship creates resentment in the people. Not only does the corruption disgust people, but the pouring of resources into the pockets of the cabals in the name of the "nation" while the general population is left out of the mix, makes the poor look at their empty plates in anger and resentment towards "Capitalism" even though it isn't Capitalism they're seeing. The people, naturally begin to demand a share in the spoils ("where's our bail-out??") and demand more egalitarian solutions to the problems created by Corporatism. So at 315 degrees, the nation hops on to the bridge of Socialism.
Socialism is defined as government ownership of the means of production and is the epitome of the Collectivist philosophy put into economic terms. While the Collectivism of Mercantilism and Corporatism is based more in varying degrees of Nationalism, which, by nature can be exclusionary, Socialism believes the government should seize all means of production and distribute all the goods equally or according to "need". While there are varying stripes and colors among Socialists, Marxists, in particular, don't even trust the government to distribute goods correctly, which is why Marxists, dogmatically, believe that the government should collapse or dissipate in order for the trade unions to take charge of the distribution of goods. Whether Marxists gain influence in a Socialist society is irrelevent because Socialism inevitably collapses because government is truly unable to take on such a lofty task as "properly" egalitarian distribution of goods. There is no central planner in the world that can "fairly" set prices or provide basic needs to all people equally. Socialist governments are also notoriously corrupt so typically, a Socialistic society is either forced to scale back its control (as Sweden and China are doing currently and Russia was forced to do) or it collapses into Anarchism. Thus, the cycle begins anew with non-market anarchism. The global Collectivist dream remains for some time but fades as localities become more isolated, such as it was after the Roman Empire gave way to the Dark Ages.
So with this, we see a clear movement, a cycle that renews itself should a nation travel the whole distance: Liberalism is an inevitablity of Anarchism; Nationalism is an inevitablity of Liberalism; Internationalism is an inevitablity of Nationalism; and Anarchism is an inevitability of Internationalism. To go in the other direction is very difficult but it can be done, it has to do with the fact that after government reaches a certain point of strength, it is very difficult to scale it back, and by the time the people are usually conscious of it--it's too late.
In the latter part of the 19th century, Charles Darwin's The Origin of Species changed the political and sociological debate as Newton's Law of Gravity had changed the debate before that. Nary a scientific idea has had the impact that the Theory of Evolution did on political scientists and economists. Two groups formed from this discussion--the "progressives" (modern so-called "liberals") and the anarchists. The progressives believed that since society evolves, then old notions of society reach obsolescence, therefore government must be pragmatic and strong in order to move society along and adapt to the issues of the day free of dogma or principle. Since people evolve, they thought, so must government, to insure that societal evolution is best harnessed for the better of the collective. Anarchists went in the opposite direction believing that since people evolve and adapt, then that means the people out-grow the need for government. They believed that truth was truth and would thus remain so (as Darwin did), after all, a man who jumps off a cliff is still going to die, they just believed that man had evolved to the point that he was too enlightened to think he can fly by flapping his arms. Anarchists viewed government as a hinderance to mans' evolutionary potential, thus an enemy of man and progress itself. What this disagreement shows is the vast casm that separates an Individualist from a Statist--one believes that the natural movement of man is toward want of more government to tame him and ensure equality, whereas the other believes the natural movement of man is away from control and toward freedom without regard for material equality.
I say that both are right. The natural movement of society as a group of individuals is toward less government as it becomes more enlightened. The enlightened man can now more easily adapt and provide for itself the accoutrements formerly provided by the government whereas the unenlightened man could not provide for himself much outside what he could produce himself. In a free economy, a need is seen and it is filled by someone to make society more efficient and comfortable, allowing the quality of life to rise without the necessary aide of government to provide that luxury. Governments didn't bring us resorts for instance, people through a more efficiently run society became more able to afford holidays and needed a place to go and simply enjoy themselves--a need was seen and it was filled. What the semi-free economy we've enjoyed over the past two hundred years has shown us is this fact--that society's natural movement is toward individualism and less government interferance. The opposite is true, however, in the case of government.
Governments crave power and control by nature. A society where government isn't needed is a society with an almost inept and quite boring government. The natural movement for government then, is towards more and more power, using economics to create inequities and promising to alleviate them if they're only given more power. As individuals show they can do something without the aide of government, the ability is robbed through regulation or nationalization of the service. It is in constant need to show how useful and essential it is, so it claims more and more power.
No matter what, all nations are vulnerable to the very cycle illustrated in my last several entries. Next time, I'll show a couple countries that make my point perfectly. A couple that traveled the whole cycle, and those trapped somewhere within, unable to progress.
-W.D.P.