- I recall that Kenneth Boulding said there are two kinds of ethics. There’s a heroic ethic and then there’s an economic ethic.
something something madman something something economist
I'm actually really close to original synthesis on this. It goes something like "capitalism is the most dominant cultural evolution in the history of mankind because it directly rewards innovators at the expense of existing power structures. Existing power structures, however, favor hereditary wealth and power so capitalism must necessarily eat its own." That's what ten years of Graeber, Diamond, Ferguson, history, politics and economics gets you - a belief in what I'll call "evolutionary capitalism." AMA.
Something Boulding and Daly tried to bring back - after Adam Smith ran with it but the Chicago School buried it forever - is the idea that you can't externalize everything that doesn't prove your point. It wouldn't take much to argue that "economics" for the past 70 years has been a misadventure of externalizing everything that doesn't make you money. Leftist economists and ecologists, though, fail to account for the fact that capitalism as practiced from the Renaissance onwards has been absolutely dominant compared to everything else it encounters. Not morally superior, not better for its practitioners, not ethically perfect, but hella more virulent than any other economic or social system. Henry Petroski argues, at many-books length, that necessity isn't the mother of invention, luxury is - if you're hungry you aren't going to sit under the shade tree long enough to invent the deadfall trap. You don't come up with the atlatl until you have the spear, the compound bow doesn't come into play until the recurve bow is found wanting. Without patents the Chamberlin forceps remains a hidden trade secret for 200 years; with patents, the Chamberlin forceps is the starting point for a virtuous innovation explosion.
That's "growth" - "doing more with less" is what an increase in productivity really is. Capitalism incentivizes growth. Period. Full stop. According to Wallerstein, though, we measure "productivity" in a truly stupid way:
- 1) There are five kinds of income: Subsistence, piecework, work-in-kind, wages and influence
- Subsistence includes gardening at home or assembling Ikea furniture - it's stuff that you would have to pay for but you aren't.
- Piecework is selling shit on Etsy, breaking up cartons of cigarettes to sell on street corners, babysitting for your neighbors, anything you make money at but not regularly.
- Work-in-kind is anything that you would normally be doing except you can't because you're earning wages so someone else is doing it for you.
- Wages are paid employment from a regular employer, either by hour or by item.
- Influence is anything you do that makes you more valuable to your community, family or larger social unit, or that makes your community, family or larger social unit more valuable compared to others.
You'll note that most of those examples are impossible without "growth" - no etsy sales without etsy, no assembling Ikea furniture without Ikea. You'll also notice that economists only measure one of those five - wages from a regular employer. It goes back to Luddism and Engels - if the factory inputs and outputs are the only thing you're measuring you're going to get a really perverse picture of the economy and as a result, a really perverse picture of society. Yet despite that perverse picture, the system that measures it still wins.
"Growth economy" vs. "steady-state economy" is the wrong way to look at it, in my opinion - does the economy offer an opportunity for personal advancement? If so it will attract innovators and entrepreneurs. Does the economy, on the other hand, beat you down and flatten all attempts at striving? Then your economy will stagnate and decline. It is my firm opinion that the history of economics is balancing the needs of parents to make a better life for their kids and the needs of worse off parents to not face the accumulated advantage of dynastic wealth. A zero sum economy where my family does ten percent better and your family does ten percent worse has my family 60% better off in just three generations.
Graeber would argue that just looking at the money is stupid. So would Wallerstein. So would McKibben, for that matter. Hey, New York Times, would you like to take a stab at this?
- Let me stick with ultimate ends for a second. What do you think the meaning of life is?
BRILLIANT
- that capitalism as practiced from the Renaissance onwards has been absolutely dominant compared to everything else it encounters.
How does the last century of social democracy fit into this?
Unbridled capitalism creates a system whereby wealth flows to the top x%, who then out of luxury / boredom / freedom might create new shit. Science, for example, has historically mostly been done by white rich dudes with way too much money and time on their hand. It's a direct consequence of the power and wealth structure that capitalism generates.
However, social democracy and in particular wealth redistribution through serious taxation creates the much more preferable social order whereby there's a less rich top x%, but the rest of us plebs has enough of a social safety net that innovation can come from a much larger portion of the society. Which is beneficial for all of us, and also for capitalism in the long run, but isn't a system that has the evolutionary strength to survive against populism and fascism as the past decades have shown. I could argue that the postwar social-democratic (pre-Reagan, pre-Thatcher) capitalism is a better version of capitalism that lost to the current strain of short-sighted capitalism, even though it is better, which seems to me to fly in the face of the idea that the most powerful version of capitalism will win out.
What do you see as the difference between "unbridled capitalism" and feudalism?
Wallerstein argues that the current world system started with you guys. I am not about to lecture a Dutchman on Dutch history so you tell me - what set the Dutch East India Company apart from Spain under Isabella and Ferdinand? Tell me about the Dutch Republic - what were the social structures in place that set it apart from monarchy?
Here's something I've concluded that I don't like - Capitalism supports the Pareto Principle. There will be wealth concentration. Enclosure was the principle process by which feudal England became capitalist England, be a rich asshole and kick people off their ancestral homelands. The US followed suit, of course, with added genocide. In a capitalist system, those with the gold make the rules. What separates capitalist tyranny from feudal tyranny, however, is upward mobility. If the capitalists do not balance out their desire to be Isabel dos Santos with their fear of becoming Isabel dos Santos, the collectivists will strike it all down. But if you can keep them griping about how unfair it is but also give them an opportunity to rise a little higher than their peers, they will shut the fuck up.
- However, social democracy and in particular wealth redistribution through serious taxation creates the much more preferable social order whereby there's a less rich top x%, but the rest of us plebs has enough of a social safety net that innovation can come from a much larger portion of the society.
Innovation definitely increases in direct proportion to social mobility. Societal well-being does, too. But wealth continues to concentrate, and as the wealthy grow more and more detached from the proletariat they favor their own ends over societal stability more and more. Wealth corrupts, absolute wealth corrupts absolutely. The gilded age led directly to the depression which led directly to populism. Germany, Italy and Japan elected fascists, America elected a socialist (at least by modern definition). Socialism (at least by modern definition) won, and the pendulum swung the other way. Then Thatcher and Reagan took the reigns and it was all fuckin' over for socialism. Then we ended up with Trump and Johnson. What happens next?
- Which is beneficial for all of us, and also for capitalism in the long run, but isn't a system that has the evolutionary strength to survive against populism and fascism as the past decades have shown.
Capitalism can be populist and fascist. Has been. Fascist Germany had a whole bunch of familiar corporations in it. Every day I get a new email from Judd Legum about how AT&T is overthrowing democracy. But as wealth protection hits high gear, innovation chokes off and the clever go somewhere they can leverage their cleverness, at least in a world of open borders. Just look at the science that fled Nazi Germany. Look at the scientists that returned to China under Deng Xiaoping.
- I could argue that the postwar social-democratic (pre-Reagan, pre-Thatcher) capitalism is a better version of capitalism that lost to the current strain of short-sighted capitalism,
you wouldn't even need to crack a book
- even though it is better, which seems to me to fly in the face of the idea that the most powerful version of capitalism will win out.
That's not what I said. What I said was
- Going back to synthesis, I would argue that an inherent characteristic of "capitalism" is the societal gyration between the needs of the shareholders and the needs of the stakeholders.
It's actually possible that Thatcher/Reagan were inevitable. Unions had evolved from Walter Reuther to Jimmy Hoffa, and everyone was sick of leasing their rotary phone from AT&T. The problem, of course, is that a leader can't get traction by saying "I'm for innovation; let's have some common sense reforms." But they can get a hell of a lot of traction by opening their campaign on the doorstep of a terrorist massacre to rant about states' rights. Leading the horse to clean water is what democrats try to do. Getting the horse to drink whatever sewer water is in front of it is what republicans do.
I think that fundamentally, both sides of the argument have to push things to the point where the middle is willing to deal with it. Labor in the UK was malignant. They got eliminated because of it. Labor in the US led to the PATCO strike. That was fuckin' that. Now the UK exports nothing but reality television and Amazon employees piss in bottles.
- A zero sum economy where my family does ten percent better and your family does ten percent worse has my family 60% better off in just three generations.
The interview, as almost all MSM pieces tend to be, was very light on detail. Daly says that his vision of steady state doesn't rest on the same assumptions that a growth economy does, but the obvious next question of "What are those assumptions?" is apparently left to the reader to figure out elsewhere. This is problematic, because your sentence that I quoted about would seem to destroy the notion of steady state very quickly.
Resources are finite. That's pretty much the study of economics in a nutshell, right? Not every person in an 8 Billion strong world can have a half acre of land and two SUVs, but unless we start to regulate which lucky few get those benefits, I'm not sure I can see how that's a tractable problem.
Discomfort is the potential gradient that keeps us striving for more, and so long as there is discomfort in the world (always), capitalism is going to be a force. However, that certainly doesn't mean that we can't adopt policies that aim to allocate resources in a less environmentally destructive way. But I get the sense that's not what Daly is getting at, so while I respect his ethic and the food-for-thought, I don't know what, exactly, I was supposed to take away from this piece.
- Resources are finite. That's pretty much the study of economics in a nutshell, right?
Are they, though? Set aside Bastani and his astroid mining - .eps, .tif, .bmp, .gif, .jpg, .png and .webp are all strategies for encoding still visual data. Two or three of them will also encode motion visual data. There is no reason to assume we have tapped all possible encoding methods for still visual data through those seven codecs. How 'bout "music?" That started as oral tradition, became dots on paper, then wax on cylinders, then scratches on vinyl, then magnetic pulses on wire, then magnetic pulses on tape, then tiny holes on polycarbonate, then .aif, then .wav, then on and on and on and on and on.
That's me raggin' on 3d printing like what, nine years ago? I own two of 'em now - there are three in this house.
- Consider the world of materials science to be the world of cooking. The world of manufacture is the world of food. 3D printing, then, is a spam-carving contest. Yes, you can make virtually any shape out of spam… but it's still spam. The vision of a 3D-printed future is the vision of a cornucopia reduced to Cheez Whiz. Yes, it's food and yes, it has its uses… but you're a fool if you think you can survive off it.
I wouldn't change a goddamn word. If you're making more than a few of 'em, there are far better ways to do it. But I mean I print several pieces of wire loom a day because (1) I can't buy less than 8 feet of it at a time (2) I need it in weird shapes for what I'm doing so I just doodle in SolidWorks and spit it out of PETG a few hours later. MY productivity is through the roof with the mere addition of a $600 cheez whiz printer because I happened to need a bunch of pieces that are entirely adequate out of cheez whiz.
Look at "growth" in terms of Wallerstein:
- - Subsistence includes gardening at home or assembling Ikea furniture - it's stuff that you would have to pay for but you aren't.
There are no permaculture "supplies" to be had. It's entirely a practice that increases productivity. Assembling your own furniture? That increases your subsistence productivity while reducing your availability for other types of productivity. Set aside what you do for fun, as global productivity/growth goes up (the kind that doesn't simply measure consumption of physical resources), subsistence productivity goes up.
- - Piecework is selling shit on Etsy, breaking up cartons of cigarettes to sell on street corners, babysitting for your neighbors, anything you make money at but not regularly.
The mere existence of Etsy, the manufacture of cartons and packs and cigarettes, Angie's List, Craigslist, Facebook, anything that links you to babysitting clients, increases growth at no loss of resources.
- - Work-in-kind is anything that you would normally be doing except you can't because you're earning wages so someone else is doing it for you.
Everything that makes your work-in-kind more efficient decreases the amount you need to do it, which decreases the amount of wages, subsistence, piecework or influence you earn. A cookbook increases work-in-kind growth, not to mention vacuum cleaners, dishwashers, babycams, fuckin' Zoom...
Here's the thing - does resource consumption really go up as growth goes up? Yeah, if you measure it one stupid way. But if you couldn't do the laundry without a wood fire a hundred years ago and now you've got a tankless hot water heater powered by solar panels, your consumption has not gone up with your growth.
I've seen economists measure "innovation". I've yet to see economists measure it in such a way that it actually tells you something. "Resources?" The way economists practice, it's not truly a resource unless it can be depleted and that's fucking stupid. Energy use in the developed world is actually going down.
- Not every person in an 8 Billion strong world can have a half acre of land and two SUVs, but unless we start to regulate which lucky few get those benefits, I'm not sure I can see how that's a tractable problem.
This is another aspect of the problem that hasn't much been grappled with since Mencken. I don't judge my wealth in absolutes, I judge my wealth in terms of my peers. If I decide Elon Musk is my peer I will never be wealthy. If I decide my neighbors are my peers, fuck them I got air conditioning. It's been like four years since I bought a Schadenporsche and I continue to be uncomfortable when complimented. My first response to "nice car" is always a variation of "you should buy one, they're cheap." A true Porsche aficionado wouldn't be caught dead in my little Schadenporsche - after all, the headlights aren't round therefore it is garbage. If I considered myself a "Porsche owner" I would be embarrassed by the lump of shit in the driveway but since I consider myself "the asshole who drove to school in a '77 buick missing a door" I consider that vehicle to be a rung several arm-lengths out of reach that I somehow have the keys to.
McKibben's Eaarth argues that people will get used to having less, because everyone will have less. And I mean, there was a time I could have flown from NY to Paris in two hours. That time is done. There was also a time I could have ridden a zeppelin. I don't see that coming back either. All across Twitter are people who think spending tens of thousands of dollars for jpegs is cool - because their friends do.
- Discomfort is the potential gradient that keeps us striving for more, and so long as there is discomfort in the world (always), capitalism is going to be a force.
I don't think it's "discomfort." Petroski doesn't either. I think it's growth. Simply put. Take it back to Maslow's Hierarchy, disproven yet truthy as it is - The less time I spend doing the shit I don't wanna, the more time I can spend on shit I wanna. The less time I spend on anything, the higher my productivity, the greater my "growth."
- However, that certainly doesn't mean that we can't adopt policies that aim to allocate resources in a less environmentally destructive way.
And again, the cardinal sin of the Chicago School, Milton Friedman, Jack Welch and neoliberalism writ large is the externalization of anything that disproves your equation. For 70 years, the math has been "you give me all the resources and I increase productivity, for deliberately narrow interpretations of productivity and deliberately broad interpretation of resources."
I was talking to a really smart dude yesterday who had never heard of carbon swaps. He honestly thought Tesla made money by selling cars. Because why would you think anything different? Dude is a dissertation away from a Ph.D and the actual underpinnings of the economic rules to his life are as opaque as Fermat's Theorem.
Quoth Peter Drucker, "That which is measured is managed" and since Taylorism we've been measuring for the shareholders, not the stakeholders. Going back to synthesis, I would argue that an inherent characteristic of "capitalism" is the societal gyration between the needs of the shareholders and the needs of the stakeholders.
The minute we start measuring shit differently we start doing shit differently.
- The minute we start measuring shit differently we start doing shit differently.
Ok so the point is that if we measured for, let's say for a lack of a better term, "well-being", and came up with an equivalent of GNP for well-being, the we could strive to maximize our well-being index without reference to dollars changing hands or BTUs of natural gas burned?
Wait a second...something like...Gross National Happiness???
We can be much more accounterly about it.
Up until 1991, the Bureau of Economic Analysis measured "GNP" - Gross National Product. Then, as part of the wind-up to NAFTA, the BEA switched to "GDP" - Gross Domestic Product. What's the difference?
- Although both GDP and GNP conceptually represent the total market value of all goods and services produced over a defined period, there are differences between how each defines the scope of the economy. GDP measures the goods and services produced within the country's geographical borders, by both U.S. residents and residents of the rest of the world. GNP measures the goods and services produced by only U.S. residents, both domestically and abroad.
The difference is offshoring. If you charge taxes on GNP, then money made by US "residents" (which includes US corporations) in foreign countries is taxed. If you charge taxes on GDP, then money made within US geographic borders is taxed.
"GNP" and "GDP" are both measures of production. GNP to capita and GDP to capita are both measures of productivity. The former says American corporations pay American taxes therefore build in America, you save freight. The latter says American corporations only pay American taxes on shit you build in America therefore build anywhere else, your shareholders will thank you.
How 'bout EBITDA? it blew my fucking gourd the first time I heard that phrase. My boss used it in three meetings before I asked his boss what the fuck "eebidaw" was. "Eebidaw," as it turns out, is why we were selling $10k systems to Jack in the Box for $1500... because each Jack in the Box was a $25/mo service charge and that service charge we got to mark as profit while the $10k system went into the "amortization" category which meant it wasn't a part of "eebidaw" which meant we left it off the quarterly reports. Guy who explained "eebidaw" to me? Later asked me to cut the price of a 4-speaker system down to the bone, not because we were trying to be profitable, but because there was a number he was trying to get under to write the whole thing off entirely so we could put four-speaker systems in every goddamn Bank of America in the United States.
That company is gone, of course, and good riddance. They lost $20m in contracts within six months of laying me off. The arrogant prick in me wants to take some credit for that but at the same time? They were playing the game based on metrics that were utterly unsustainable. Enron-bad. MF'n ridiculous with only a modicum of analysis. Which is probably why they never found a buyer until Apple picked over their bones, spat them out and then the vomit was regurgitated three times over.
No one has done that to shareholder capitalism yet, but they could. One rules change and it's a brave new world. Imagine what a class-action lawsuit against Exxon-Mobil from, say, The EU would look like, just for the melting runways at Heathrow et. al.
Hey cool, I almost posted this.
Doesn't feel like we have much choice but to drastically rethink the relationship between 8 billion people and the Earth if we want to maintain a habitable planet for longer than just a few more generations.
The uh, good news, is that short-term economic stressors are going to become more glaring. London-Heathrow is currently shut down because of runway deformities affiliated with the heatwave. While people are dying of heatstroke, of course :(.
It's not like 10% annual growth is actually benefiting the majority of society anymore, directly or indirectly. Lol yeah, we have better, cheaper tech, and it's currently being used first and foremost to disrupt societal stability.
I can't imagine analyzing the current status quo and thinking "this is fine".
Population collapse isn't far off. Meanwhile our measurement of "growth" is a metric we fuck with on an annual basis. There's no reason to believe we can't keep "growing" while also suffering massive die-offs, desertification, a lack of potable water and vast uninhabitable regions of former cradles of humanity.