Economy adam smith's invisible hand

Published on September 16th, 2013 | by Guest Contributor

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David Brin – Is Libertarianism actually helping to bring back Feudalism?


By David Brin

ElevenQuestionR.J. Eskow – on Salon – offers “11 Questions to see if Libertarians are Hypocrites.”  And yes, most of Eskow’s posers certainly do set up some stark and thought-provoking contradictions – even hypocrisies – in the oft-touted positions held by many who today use the “L-word” to describe themselves. The article is well-worth reading and it does skewer especially those who bow in obeisance to Ayn Rand, the patron saint of resentful ingrates who want desperately to blame society for being  under-achievers. And yet…
…and yet Eskow wound up inciting the contrarian in me, with his blatant straw-manning — setting up the reader to assume that all ”libertarians” are lapel-grabbing, solipsistic randians.  Moreover, indeed, he tells flagrant untruths even about randians. Elsewhere I have dissected the Cult of Ayn far more carefully, actually looking carefully at her messages on many levels. Eskow wants only a caricature and a punching bag.
He ignores, for example the randians’ admission that government should retain a monopoly on force and should be involved also in the enforcement of all contracts, not just copyright. Not entire-anarchism, indeed, it retains what’s necessary for the ultimate randian outcome — a return to feudalism — to have real teeth. Eskow should know his enemy better.
(Note that I use Eskow’s method of asking questions in what I hope is a much more neutral and thorough way, in my Questionnaire on Ideology, that encourages folks to re-examine many of their own underlying assumptions; take it if you dare!”)

In fact, Eskow ignores other strands to libertarianism that include the erudite versions of William F. Buckley and Friedrich Hayek, who denounced the randian obsession with demigods as a guaranteed route to feudalism.  Hayek, in particular, extolled a level playing field that maximizes the number of competitors and avoids a narrow ruling-owner caste. Indeed, there are some versions of libertarianism that I consider to be entirely justified  — the moderate versions offered to us by authors who range from Kurt Vonnegut to Adam Smith, from Robert Heinlein to Ray Bradbury…

…a version under which one is willing to negotiate and see a successful State that does good and useful things by general consensus and assent, but always with an emphasis on doing useful things that wind up empowering the individual to go his or her own, creative way. In other words, judging state actions (even skeptically) by a standard that is high, but allows us to work together on some valuable things that help us to then grow as we choose.

I could go on and on about that aspect of things; but instead I will simply offer a link to a far more cogent appraisal of this important thread of human political discourse, one that – alas – has been hijacked by oversimplifying fools who wind up parroting fox-fed nostrums and serve as tools for the very oligarchy that aims to tear down every remnant of freedom. (See: Maps, Models and Visions of Tomorrow.)
DefendingFreeEnterpriseIndeed, the name you’ll never hear randians mention… and alas the same holds true of the oversimplifying straw-manner Eskow… is Adam Smith, whose version of libertarianism adults still look to, from time to time.  A version that admires and promotes individualism and the stunning power of human competition, but also recognizes that competitive-creative markets and democracy and science only achieve their wondrous positive sum games when carefully regulated… the way soccer or football must be, lest the strongest just form one team and stomp every potential rival flat and then gouge out their eyes… which is exactly what winner-owner-oligarch-lords did in every human culture for 6000 years.  Till Adam Smith came along and described how to get the good outcomes without the bad.
The stealing of Adam Smith’s movement by fanatics and cynically manipulative oligarchs is not just a tragedy for the right, and for market capitalism.  It is tragic for civilization.
Those seeking feudalism KNOWINGLY
 
Here is the fundamental political fact of our times, amid phase three of the American Civil War.  The gulf between the richest 1% of the USA and the rest of the country got to its widest level in history last year.
The top 1% of earners in the U.S. pulled in 19.3% of total household income in 2012, which is their biggest slice of total income in more than 100 years, according to a an analysis by economists at the University of California.
Also, the top 1% of earnings posted 86% real income growth between 1993 and 2000. Meanwhile, the real income growth of the bottom 99% of earnings rose 6.6%.
One-Percent-WealthThe richest Americans haven’t claimed this large of a slice of total wealth since 1927, when the group claimed 18.7%. Just before the Great Crash and Great Depression… so much for the notion that Oligarchy assures prosperity and good management.  In contrast, the flattest American society — just after FDR — featured the longest boom, the most vigorous startup entrepreneurship, the fastest-rising middle class… and all of it with labor unions and high marginal tax rates.
The penultimate irony?  That the ones complaining about this are called “anti-capitalists” when the fair and productive-creative, entrepreneurial capitalism prescribed by Adam Smith is the top VICTIM of wealth and income inequality. Across 6000 years of human history, the enemy of open markets and freedom was always owner-oligarchy. The blame for this can be spread widely! Those liberals who ignore the “first liberal” Adam Smith are almost as foolish as the dullard right wingers who are helping to restore feudalism.
Book-Review-The-Greatest-Generation-by-Tom-BrokawThe greatest irony?  The people who are bringing all of this about claim to adore the “Greatest Generation” – our parents and grandparents who overcame the Depression and crushed Hitler and contained communism and started a hugely successful worldwide boom under protection of the American Pax… and got us to the moon and invented so many cool things that we got rich enough to go on a buying spree that made every export driven nation prosperous.
Funny thing.  That Greatest Generation adored Franklin Delano Roosevelt and the flat-but-dynamically entrepreneurial society that he and they built together.  Oh, but they were the fools and Rupert Murdoch knows so… so much better.
So what is to be done?

Left-wingers who blame “capitalism” for our recent messes should replace the word with “cheaters.”  At risk of belaboring a point that must be reiterated because people keep blinking past it: I consider healthy “Smithian” capitalism to be one of the top five VICTIMS of the malignantly incompetent rule of the recent US GOP.  There are no outcome metrics of national health under which the Republican Party’s tenure in command did not wreak harm on the people of the United States, especially upon the middle class, upon human civilization and upon healthy capitalism… and the spinning ghosts of Barry Goldwater and William F. Buckley.So let’s try some simple reforms.  Fierce measures to stop interlocking directorships and the circle-jerk of 5000 golf buddies appointing each other onto each others’ boards, then voting each other staggering “wages” –  it is a criminal conspiracy that not only has stolen billions but runs diametrically opposite to the entire notion of competitive enterprise.

1- If capitalism works, then these high CEO wages should be attracting brilliant talent from elsewhere, till demand meets supply and the wages fall. They are in effect calling themselves irreplaceable “mutant geniuses” like NBA basketball players… only with this blatant rub. The top NBA players are fiercely measured by statistics!  The mutant-good CEOs are only “good” by the flimsiest of arm-waving by… their pals.

2- Critics of socialism cite Hayek and proclaim that, no matter how smart a set of top-down allocators are, they will be foolish simply because their numbers are few.  Now it happens that I agree! History does show that narrow castes of “allocators” do inevitably perform poorly. (The Chinese have done well… so far… but at spectacular environmental cost and corruption. And we know the inevitable end-game.)

So, how are 5,000 conniving, back-room-dealing, circle-jerking, self-interested golf buddies intrinsically better allocators than say 500,000 skilled, educated, closely-watched and reciprocally competitive civil servants?  Both groups suffer from delusional in-group-think.  But the smaller clade – more secretive, self-serving, inward-looking and uncriticized – is inherently more likely to fail.  Claiming that they are better allocators because they are “private” and secretively collusive is just religious litany, refuted by 6000 years of horrific oligarchic rule.

We deserve and should demand a return to a capitalism that is more about creative-new goods and services than manipulation of imaginary financial “assets.” Colluding cartels, like the caste of 5,000 CEO-director golf buddies must be broken up.  If you are a senior officer of a company, you should be disallowed to sit on any boards, anywhere, for anything. And anti-trust laws that served our parents well should resume being enforced.The same goes double for an even worse cartel of cheaters… the casrtel of “seated members” of stock and commodities and equities exchanges like the NYSE and NASDAQ.  These blatant conspiratorial clubs violate every conceivable standard of fairness and competition, charging commissions to you and me while freely engaging in hundreds of billions of Hight Frequency Trading actions themselves, at zero friction or cost. In this electronic era there is no reason any of us should have to use such intermediaries to sell shares to others. The scam is a lamprey-vampire drain on the economy that should be reformed or eliminated. (And mind you, HFT is an existential threat to civilization, in its own right.)

LawrenceLessigTEDThere are dozens of other possible reforms, especially Lawrence Lessig’s proposals to get the tsunamis of money out of politics and my own judo approaches to getting around gerrymandering.But above all we need to minister to our libertarian cousins, calmly drawing them away from Mad Murray and Alienation Ayn, getting them to realise that capitalism is not being helped by the rising oligarchs. It is being killed by them. Libertarians should re-enlist in the League of Adam Smith, and help restore the system to health, lest socialism rise again.  As it surely will, if this goes on.

Follow-up:

David Brin:
(Originally appeared at Contrary Brin. )




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