Economics: Beyond Quantity

As I've mentioned several times already on this blog, there appear to me to be (at least) two different kinds of socialists: those whose primary enemy are wealthy people, who want to eradicate great personal fortunes; and then those like me, who would much rather eliminate poverty, and do not believe that eliminating wealth and eliminating poverty are one and the same thing.

It also occurs to me that there are (at least) two different kinds of entrepreneurs: those who feel that the way to become rich is to squeeze whatever money is left in the possession of poor people out of them; and those who do not. It could well be that the first kind of socialist is only able, for some reason, to perceive the first kind of entrepreneur. Michael Brooks, for example,

a left-wing American radio news-talk guy who often and flatly states his belief that billionaires are evil, and that the quantitative category of billionaire must be eradicated, may, for some reason, only be able to perceive billionaires to the extent that they resemble Donald Trump. Brooks lives in New York City, so if he wanted to, he could look around himself and see rich people doing all sorts of un-Trump-like things, from leaving decent tips to giving to charity to raising money for the Democratic Party... Maybe Brooks sees all of this every day, and he doesn't consider those people to be actually rich unless they're actually billionaires. I don't know, I don't know how Brooks thinks, except that I suspect he doesn't think very deeply or in great detail, at least not when it might contradict certain flatly-held beliefs. (You gotta hold those flatly-held beliefs way down low, out of the wind, they might get knocked over and you'd actually notice something for once.)

Conversely, some people, some of whom have studied Adam Smith and then ceased to think about economics (although in many cases continuing to write about it and win Nobel Prizes in economics), believe that rich people are morally better than poor people, and that everything entrepreneurs do is a blessing for mankind in general. It's hard for me to imagine how anyone can read Smith and not perceive that the world has changed beyond all recognition since he published The Wealth of Nations in 1776, but, quite obviously, for many businesspeople, Smith is still quite literally the last word. Just as, for many Medieval people, beyond a few miles from the coasts the oceans were full of dragons and death, so, for many economists right up to the present day, beyond Smith lies Marx, who is pure evil and has nothing to give to mankind except agony.

Although I believe it is possible for someone to become wealthy and to benefit mankind at the same time, ironically, the economics of Smith, who believed that to become wealthy was to benefit mankind and vice versa, have given ideological cover to entrepreneurs who thrive while behaving in ways which are utterly predatory, and much worse than useless for the common good.

Also, and this is very important in any meaningful discussion of economics: there are (at least) two different ways of measuring someone's well-being: the first simply adds up the monetary value of everything that person owns; and the second one, the one I use, recognizes that life is not nearly that simple: well-being is a matter of your health, where you live, the air you breathe, what you eat, what opportunities you have, and so forth. And these things are not always strictly measurable in monetary terms. Comparable good things can cost much more for one person than for another; or they can be free in some cases; or, in other cases, they may not be available for any amount of money. (I just mentioned the common good: quick now, what is the common good worth in dollars and cents?)

Economic discussions often focus much too narrowly on quantities of currency, and not nearly enough on qualities of existence. The latter, the quality, is really the only thing that matters. The only reason that the quantities of currency matter is that they can sometimes affect those qualities.

Quantities of currency can affect people's lives very much. You can improve people's lives very much by giving them cash, and, there's no doubt at all, you can kill a lot of people by depriving them of cash. But it isn't the actual cash or lack of it which helps or hurts someone, it's the things which cash can buy. And cash can't buy everything. It can buy exactly what a buyer and seller agree that it can buy. That's exactly how much it has always been able to buy. If someone owns a house and is calculating how much they might save buy installing solar panels, and they're really not thinking about saving human life on Earth, then their economic calculations are appallingly primitive. So, how much would you pay to save human life? Hopefully you can see how absurd the question is. We can't buy a clean atmosphere. We're going to have to actually clean it up, and cleaning it up may well involve putting much less emphasis and worth on quantities of cash, and much more on things like qualities of substances and of behaviors. It may be environmentalism which will finally force many people to confront the fact that money isn't really reality, it's just a tool we've been using for a while, which we can set down whenever we choose, and pick up a new one.

So, to Michael Brooks, I say (ha ha, just kidding, I know damn well Michael Brooks isn't listening to anyone saying anything resembling any of this), focus on the effect people have, and not on the size of their stack. No doubt, in many cases, billionaires actually are complete bastards, just like you say they are. So, in those cases, tell us, news-talk guy, tell us specifically, what bad things they are doing. If you happen to know what those bad things are. If not, maybe you should do some research before the next time you open your mouth. Be careful, though! Research, when diligently and earnestly done, has been known to upset long-cherished beliefs!

Trump, Brilliance, Capitalism

Don't Dismiss Trump's Attacks on the Media as Mere Stupidity. We should assume they are darkly brilliant, says Bret Stephens of the Wall Street Journal in Time.

Both Trump and Stephens, who begins his piece in Time with ridiculous assertions about the integrity of his employer, the Wall Street Journal, which in reality has become just another right-wing Murdoch noise machine, should be seen for the morons they are. You've got to be pretty stupid not to see that Trump is stupid, or not to see how Murdoch has turned the Journal into a joke.

I'm tired of claims that Trump is brilliant. He's not merely pretending to be a buffoon, he actually is one, unlike many other leading Republicans, who, although certainly not rocket scientists, are also not the idiots they are currently pretending to be in their agonized efforts to argue that the President is making sense about something, and/or not really saying the idiotic things he obviously is saying. Kellyanne Conway is perhaps the most strikingly obvious example, in the way that she has said utterly different things about Trump before and after he hired her.

Many of the scientists and engineers who are improving solar and wind power and developing other green sources of energy, and many of the entrepreneurs getting them up and running, actually are brilliant. Trump, and his boss Putin, embody the stupid approach to energy policy: double down on petrochemicals. Artists, teachers, philosophers often are downright brilliant, and in the US we are pearls currently cast before the swine Trump.

Trump, along with the AIDS Medication Douchebag Martin Shkreli, embodies pure capitalism, and demonstrates that it requires crudity and insensitivity rather than intelligence. You remember the infuriatingly stupid grin on Shkreli's face as he confronted intense scrutiny by the media and by legislators after he obtained the manufacturing license for the AIDS medication Daraprim and immediately raised its price from $13.50 to $750 per dosage? Of course you remember. That sort of grin, in that sort of situation, is the sort of thing which sears itself into the memory. He was grinning because he knew that he had followed the rules of capitalism perfectly.

What he didn't know -- has he learned it in the meantime? -- is that becoming the most despised jerk in the US was going to have an effect on his life, no matter how closely he followed those rules.

Capitalism teaches that the person with the greatest amount of wealth has achieved the greatest amount of success. That's all that capitalism teaches about success: buy low, sell high, done. Most capitalists realize, sometimes consciously, often not, that there are many other factors in success and failure than the size of one's stack. When a person's ideas of success and failure are really, actually, exclusively about the bottom line, which is actually only rarely the case, the result is horrible and repulsive, like Shkreli, and like the current President of the United States.

Unfortunately, the realization that capitalism has some big problems is often not conscious. In the United States more than in some other places, the unwillingness to treat capitalism as something which can and should be examined critically, is very widespread. Capitalism is often talked about as if it were as inevitable as gravity, and as impossible to wish away, and that nothing better will ever be able to replace it.

It seems to me that the 2007-2008 financial crisis led more people to criticize capitalism as a whole than had done so previously. Maybe Trump will wake up still more people about it.

Trump And Alternative Energy

Bloomberg News, Nov 9, 2016: "Trump's Win 'A Disaster' for Plunging Renewable Energy Sector"

Bloomberg News, Nov 23, 2016: "Economics to Keep Wind and Solar Energy Thriving With Trump"

More headlines seem to agree with the second headline than with the first. A third headline, from fiverthirtyeight.com on Nov 14, seems to cover the prevailing opinion pretty well: "It's Hard To Tell Whether Trump Supports Renewable Energy — And That May not Matter Much"

It may not matter much, because wind and solar and other green energy options may very soon be so much more attractive economically than oil and coal that Trump and the petrochemical sector won't be able to kill them. The technology just keeps getting more efficient and cheaper. The tech geniuses just keep thinking stuff up, as Bruce Willis put it in Armageddon. Transparent solar panels, which can cover the entire exterior of a building because they double as windows. Rotating solar panels.

When I said "more attractive economically" above, I was referring to conventional economics, and to the kind of investor whose biggest hero is Adam Smith. Conventional economics or paleoeconomic theory, exemplified by Trump and Big Oil, create a theoretical model of the entire world in which things such as the environment are treated as "externals," as secondary factors, not to be treated as the primary things under consideration when investing. Of course, this is completely insane: conventional economics is an arbitrary way of doing things which functions only because enough people have agreed to do things that way. It can be completely scrapped and replaced by a totally different economic model whenever people agree to do so, and such a change will not harm the atmosphere or the oceans one bit. On the other hand, if the oceans die or the atmosphere becomes too polluted or temperatures rise too much, all of the people will die, and every form of economics on Earth will die with them. Conventional economic theory regards buying and selling and currencies and loans and interest and so forth as essential things, and environment and health as secondary. The plain and obvious truth is that conventional economics has this completely backwards.

It's dawning on more and more people that conventional economics has this completely backwards. Nevertheless, it continues to function in terms of rewarding those who follow its rules with greater accumulations of money than those who don't. It's either dawned on Democrats much more often than on Republicans, or Republicans pretend that it hasn't dawned on them because they're making money with that pretense. "We are what we pretend to be," as Kurt Vonnegut pointed out.

The ironic thing is that solar and wind energy and other clean energies are beginning to win, not because of their ecological benefit, but because of their appeal to those who continue to follow conventional economics and to treat the environment as if it were secondary to buying and selling and loaning and interest rates and wages and so forth. These clean energies are rapidly growing in appeal to those who seem to believe that conventional economics consists of laws of nature rather than completely arbitrary agreements between people, agreements which can be, and are, modified, re-invented or scrapped whenever people agree to do so. Green energy is growing in appeal to those appeal because it's making money and not because of anything to do with the environment or with the health of living things.

Presumably, if clean energies grow by several hundred percent in the next few years, resulting in petrochemical shrinking to a small fraction of the market share they now enjoy, Trump will take credit for the bluer skies and gentler weather and our greater ability to see the stars at night, and claim it was all his idea right from the start, whether he's still president or whether he was impeached and removed from office early in 2017.

Ecological Thinking Must REPLACE Economics

I've been reading Andre Gorz yesterday and today, not for the first time, and suddenly I had this epiphany: ecological thinking must replace economics. Gorz was brilliant at pointing out the ways in which some planning of economies was necessary, how deregulation led to chaos and failure, how microelectronics were shrinking the demand for labor -- in the 1980's he was ahead of where a lot of people are now on all of these issues, even after the huge lesson of 2007-2008.

I don't know whether Gorz himself would have said, simply and without qualification, that ecology must replace economics. Maybe he'd react by saying, "Duh! That's what I was saying, yes, and you read how much of my stuff before you got it?!" or maybe he wouldn't get it.

Plenty of people see that unrestrained, unregulated capitalism is unsustainable for ecological reasons alone, besides other reasons. Only hardcore libertarians are still too stupid to see that. But people keep tinkering with capitalism.

Enough with the tinkering. Capitalism itself is the problem. What do we need? Growth, competition? No, that's the stuff that's killing us. We need food, shelter, water, air, leisure, freedom, pleasure, love. Those are all ecological things. Money doesn't have to enter into it. Money is just something we've overlain onto what is actually essential.

Caring about each other, is that economical? No. It's ecological.

Am I ahead of the curve here? Or am I behind the curve to think that there might be anything at all new or original about this little mental breakthrough I've just had?

My Theory About Why Facebook Is Phasing Out Comment Counters In Discussion Threads

I'm picturing a scenario somewhat like this:

"Mr Zuckerberg, the gals and fellas in IT have been on this for months like stink on a -- well, like stink on an IT guy who hasn't left his cubicle to shower in months. They've been interfacing with my guys and gals from finance daily, sometimes there's been two or three large-scale meetings about it per day. The algorithms and other thingies they've been applying to this -- well, you know me, Mr Zuckerberg, I'm just an old dinosaur bean-counter, I can't begin to keep up with all the math, and I shouldn't pretend that I can. One time during this process I made a remark about Boolean algebra, and the whole room exploded in laughter. It's okay, it's okay, they were right: the old man was frontin'. Tryin' ta sound hip. They caught me! When I'm with these kids I need to talk less and listen more, who knows, I'm might even learn something! Heh, heh. So. Bottom line. The kids are confident -- I'm talking about both the IT people and my finance kids -- and hey, how often do they ever agree about anything, am I right?! -- they've both looked this front to back and top to bottom again and again and again, and bot IT and finance are highly confident that if Facebook phases out the comment counters in the threads, long-term, it could shave 3 cents a day off of our operating costs. Highly confident. ...Oh. And, yes, also, you could throw a sop to the environmental nuts, tell 'em that we're using less electricity and saving the rainforest, bla bla bla. You know, the usual environmental bullshit. So, Mr Zuckerberg, should we go ahead and phase out the comment counters?"

"Uh -- YUHH!"

Does Democratic Rule Equal Social Justice?

The question cannot be meaningfully answered as posed in the title of this piece, because "democratic" and "justice" are both subjective terms.

The influence of the laissez-faire economics of Adam Smith is still very strong in the US, with its notion that everything will be wonderful and all will live in abundance if only businesses are left alone to do as they see fit. "Laissez-faire" translates pretty much to "leave it alone," and "it" is business. Smith argues that if businessmen were just left alone to do what they do, an "invisible hand" will guide them to act to the benefit of mankind. Making their businesses more economically successful and creating a more just world with less squalor and poverty will be one and the same.



Amazingly, nearly two and a half centuries after Smith began to spread his ideas of the all-beneficent, all-curing invisible hand, people still behave as if it actually made sense, despite massive evidence to the contrary having accumulated in the meantime. In this as in so many things, it's impossible to know how many people really think it makes sense and how many say they do because they see a chance for personal gain. Ronald Reagan's plan of "trickle-down economics" is very Smithian: cut taxes, and cut social programs paid for by those taxes, and poor people will not suffer, because the resulting growth of the economy will benefit them more than the social programs did. In 1980, running against Reagan for President, George Bush Sr referred to the trickle-down idea as "voodoo economics;" later in 1980 he became Reagan's running mate and got on board with the Gipper's economic plan. People naturally assumed that Bush's criticism of trickle-down economics had been sincere, and that his apparent change of heart was a matter of political calculation, but in politics as in economics, who knows who's being sincere when, and for what what reason? Maybe Bush was in favor on trickle-down all along, and only criticized it in order to attack Reagan and try to win the nomination. Who knows.

For advocates of laissez-faire, trickle-down, liberatarian economics, taxes and government regulations concerning business are tyranny, they are un-democratic. For others -- let's call ourselves what we are: socialists. Let's stop being afraid of that word -- unrestricted businesses can be a prime source of tyranny, driving down wages, forming monopolies, fixing prices, profiteering from pollution and wars and other man-made catastrophes.

I'm a socialist, but I'm not asserting that every corporation is unmitigated evil. Mitt Romney was wrong, of course, when he said that corporations are people, but if what he meant to say was that individual people make up, control and operate businesses, and that these individual people can choose different ways of going about their business, and that therefore every business should be regarded as an individual case, just as every individual human being should be, then of course he was right. Still, by and large, over the course of the 2 and a half centuries since Smith, corporations have provided an immense amount of evidence that they should be watched carefully by governments, and regulated when necessary, because if Smith's invisible hand really does exist, if it's unregulated, much of the time it's giving most of us the finger, not looking out for us.

I say that many of us are socialists and should stop running from the term. That's because minimum wages, universal health insurance, regulations against pollution and against monopolies, universal education, universal nutrition and so forth are all socialistic. Like most of the rest of the countries on Earth since the US was founded, the US follows a combination of laissez-faire and socialistic policies, and there's a constant debate and power struggle between the 2 tendencies, which we also call conservative and liberal. Same thing. As long as you keep in mind that in most countries, "liberal" doesn't mean what it means in the US, it means "libertarian." One of many good reasons to call ourselves what we are, socialists, is to help Americans and non-Americans each understand what the other group is talking about.

To return to the title of this post: does democratic rule equal social justice? We will make more sense in our political debates, we will have a greater chance of getting along with each other, if we realize that we don't all define terms like "democratic" and "justice" in anywhere near the same way. And the example of how businesses are treated is just one way in which those terms are defined differently by different people. They're also applied in very different ways to issues of gender, ethnicity, freedom of speech, education, etc, etc. Some would say that I'm a moral relativist and that I'm attempting to thrown open a door to social, political, economic and other kinds of chaos. I would reply that, yes indeed, I am a moral relativist, and that all I'm trying to do is draw attention to the vast levels of chaos which already exist, chaos to which most people's eyes are stubbornly shut. Which is not surprising, it's a scary sight. Still I draw attention to it in the hope that seeing the chaos somewhat more clearly will be a beginning of a chance of reacting to it somewhat more effectively.

The Tom Petty "It's Ab-So-Lute-Ly Backwards" Theory Of Economics

Not long after they had suddenly become rich and famous, around 1980 or so, Tom Petty and the Heartbreakers were contacted by Nike. Someone at Nike had noticed that several members of the band seemed to like to wear Nikes. The band were invited up to Nike headquarters in Seattle to take their pick of the latest Nike stuff. Not just shoes but also jackets and shirts and hats and boots and whatever. All free, of course. Nike's point of view was that these guys wearing that stuff was cheap advertising for them. Whether Nike's reasoning was economically sound or not here, Tom and his band soon had picked out so much really nice free stuff that they were starting to wonder just how best to haul it all back home. A Nike employee said not to worry, ran off and soon re-appeared with all sorts of really nice leather bags. Also free, just in case you wouldn't have assumed that.

It was about this time, as Tom was admiring how beautiful these bags were, with really soft and supple leather and linings inside which were luxurious to the touch and so forth, that he realized that, in his own words, "It's ab-so-lute-ly backwards." It had not been very long ago that the economic circumstances of the band were such that a new pair of sneakers were a purchase which had to be thought about carefully, and their shoes often got holes in them before it seemed practical to replace them. Now that they could afford to buy any new shoes they wanted, more shoes than anyone really needed, and really nice luggage to haul all those shoes around in, they didn't have to anymore. (Whether Tom and his band had been flown up to Seattle and back home again in one of Nike's corporate jets or whether they just dropped in when they were in Seattle on other business, I don't know.)

A few years after that, Stephen King, who had already earned many millions of dollars from his fiction and from movie and television screenplays and screen adaptations of his work, was making his debut as a feature-film director on Maximum Overdrive. In addition to his salaries as director and screenplay author (based on his short story "Trucks"), King got a $1000 per diem during shooting, which he never touched. King was not necessarily what you'd call obese in those days, but he wasn't missing a lot of meals either. Apparently he got all he wanted to eat from the caterers on set, then every evening he would come back to the hotel suite he wasn't paying for and toss the envelope with the tax-free $1000 per diem onto the bed he wasn't using, making a substantial pile of envelopes by the time shooting was done.

That was in the mid-80's. Surely the biggest Hollywood per diems today, for, say, George Clooney or Ron Howard or Steven Spielberg, make that $1000 seem pretty pathetic. (You know that villa on Lake Como in Ocean's Twelve where Toulour lived, where Ocean confronted Toulour? In real life that was Clooney's house -- no, excuse me: it was one of his houses. It might still be, I don't know. Maybe in the meantime he's traded up to a fancier Lake Como villa, if there is one.)

It may sound as if I'm enviously sniping at some of the rich and famous, but I'm really not. For one thing, all the people I've mentioned here are rich Democrats. Better them than the Koch brothers. Much better. All I'm saying is that I've discovered a very basic principle of economics, or, to be more precise, that principle was pointed out to me by Tom Petty: if you want to have all sorts of wealth flowing into your possession without your even having to ask for it, the surest way to achieve that is to get into a position where you don't have the slightest need for it.

Paradigms

The other day I was reading some things by André Gorz --his political-economic, or ecological writings, as he sometimes referred to them. Not Letter to D: A Love Story,which might be really great for all I know, but I'm not interested in it right now -- and not for the first time I was exhilarated by Gorz' great good sense, and at the same time deeply discouraged by what seems to me to be the great distance between such good sense and most people's even allowing themselves to consider such topics, let alone agree with Gorz. I'm a very enthusiastic reader of Gorz, and I would encourage everyone to take a look at such books as Ecology as Politicsand Farewell to the Working Class,although I am not a Gorzist in the sense that many people have been Marxists, inasmuch as they have treated Marx's writing as holy texts, claiming that All The Answers Are In There. (Marx himself said that he was not such a Marxist, but the Marxists have overlooked that passage in Marx just as other believers overlook whatever they have to so as not to have to actually think for themselves.) You don't have to agree with Gorz about everything, but I think it would be very helpful if more people began to think about the topics he raises.

Among these is setting limits to economic growth. This is already quite a familiar topic to ecologists (and meteorologists), but it does not compute for many economists, because much of economic theory still is predicated on constant growth. Well, we're beginning to burn the Earth to a crisp, and so we need to start thinking about this. Soon. Now. Ecologists have been thinking and talking about it for decades, but they haven't been getting through to most economists and leaders of politics and industry. Al Gore is one of the exceptions, and for his trouble he got the Nobel Peace Prize and became a laughingstock among most economists and politicians, even as the effects of global warming he and other ecologists have warned about have been coming to pass. The problem is that there is such a separation between ecological and economic thought. Gorz, unlike most ecologists, including Gore, unfortunately, has a profound grasp of the economic theories which have been put in place by the world's leaders, he understands their jargon, he understands their concerns, and he responds to them in ways they can readily comprehend. It's not very often you see an ecologist who is also an economist.

What Gorz writes about -- along with some other New Leftists -- is a paradigm shift in economics, away from the obsession solely with quantity and toward the deeper concept of quality. To this day economics is dominated by the concern with quantity and with growth and ever more growth. We've come to realize that we are endangering ourselves by burning too many petrochemicals and clearing away too many forests and wetlands and paving too much of the Earth -- but we keep on doing it. The economic markets continue to behave as if no-one had ever heard of air pollution or global warming or extreme weather, because they continue to be based on the criterium of quantity, that more is always better. This mentality is not merely absurd: it also often rewards people who frankly are just not bright enough to realize that it is absurd. William Gaddis' novel JRunderscores this point by making its title character and odious protagonist an 11-year-old boy -- and not even a remarkably bright 11-year-old -- who becomes a financial titan by observing other Wall Street titans and doing what they do. (He's surrounded by highly-cultured and sensitive adults, and when they occasionally notice and are appalled by what JR is up to, he replies, "That's what you do!")

A paradigm shift in economic thinking, from quantity as the goal to quality, would make this a much better and more satisfying world. Oliver Stone's second Wall Streetmovie, with Shia LaBeouf, Carey Mulligan and Josh Brolin, makes this point in Stone's typically un-subtle way. The original Wall Streetfrom 1987, in which Charlie Sheen dueled with Michael Douglas, had more subtle hints of this conflict between a paradigm of quantity and one of quality -- more subtle perhaps because at the time Stone was only subconsciously aware of it. I don't mind Stone not being subtle: he's trying to make people think, and in such an effort subtlety is not always called for. The examples of the Soviet bloc have shown us that it's extremely difficult to force entire nations to behave in their own self-interest. I don't believe that broad-scale paradigm shifts can be brought about in such a top-down forced manner. I think that education has to be improved, that that's the only way that the human race can be saved from itself.