Friends are Electric

Had I been asked at any point up until perhaps the last year, but more likely even more recently than that, I would have denied ever being in the state of mind, would have denied being capable of ever possessing the opinions, that I am about to present.  Since my early teenage years I have bought into the myth of left and right, I’ve even written about it extensively here.  There are a variety of reasons for this, many legitimate and some less so.  I see, to be cliché about it, more clearly now.  I understand, or at least I believe I understand, things better.  Both the left and the right are, among other things, utopian ghosts.  The features I disliked about the typical political right, more specifically the Canadian political right, belonged no more to capitalism than they did socialism.  The positive features found in socialism can be found elsewhere as well.  There is no absolute, which is of course obvious and perhaps even a truism, but its still a difficult concept to grasp and accept, at least for me.

For the first time ever in my life I can honestly say that I accept capitalism as a potentially positive force.  I would say that, under the right circumstances, it is what is best for society.  I would not say that I am a capitalist, but this is a technicality which is central to this new understanding and I shall get to it with time.

In my youth I read Marx, I read the manifesto, I studied the philosophy as best as I was intellectually capable.  In the political climate of Canada, especially Ontario, which I came to political awareness in, this is an entirely reasonable and understandable thing.   Mike Harris and his neoconservative Progressive Conservative party were in power provincially, doing damage to the social structure of the province which we still have yet to recover from.  Jean Chrétien was weakening social programs to fight the deficit.  All around me were these policies, ostensibly of the right, ostensibly capitalist in nature, which were directly opposed to what I considered to be socially just.

Time does not on its own bring wisdom.  Had I remained isolated from philosophy, by which I mean had I been functionally illiterate, I would still likely be thinking in this way.  Had I not read the works of John Ralston Saul, The Origin of Wealth by Eric D. Beinhocker, had I not read Nietzsche and William Blake, Naomi Klein and Oswald Spengler, I would not have developed my opinions on these matters.  Even Mien Kampf, for all its terrible writing and weak arguments, was important.  Without these and other books I would have remained naive, functionally illiterate and certain.  I now understand things more fully, but at the same time know how little I know and how little I can truly know.  I am filled with doubt, glorious doubt, and can question anything I would once had accepted as fact and dismissed.

Time does not on its own bring wisdom, but properly used time can help one acquire it.  So, while I was never really a communist, I would no longer call myself one.  I would have during a period in my teenage years.  I would no longer call myself a socialist in the proper definition of the term.  Social democrat perhaps, but in the end these are just labels which have no inherent meaning.  The important change is that, unlike my teenage or even post-teenage self, I am no longer in a position to say with certainty that capitalism is an evil.

The reason I once called capitalism a negative actor is that I became confused about what it means to be a capitalist and what capitalism itself means.  It is not, as I once thought, about the maximization of profit.  It is not about the oppression of workers, or anyone else for that matter.  It is not about markets and their godhands.  These are all confusions that I am not alone in possession of.  In fact, especially the first and last, are symptoms of the illness afflicting modern capitalism.

If it is not about profit, then what is it about?  What could capitalism be about if it is not profit for the capitalist?  It is as simple as it is obvious.  Capitalism is about the creation of capital, which is in and of itself  profit.  Profit is a side effect, in many regards a desirable one, but not the goal.  It is about the creation of wealth.  Wealth is not money, although money is a useful measure of it.

What differentiates wealth and money then?  The former has a value beyond the abstract.  Money is useful when it is an abstraction of wealth.  Money becomes a dangerous tool, one capable of turning minds to radical (not necessarily violent radical) politics, when it is divorced from wealth.  The quest for paper profit, the business of most, if not all, modern banks, is a prime example of this.  Wealth is a factory, a mine, concrete products.  Money is an abstraction which does not really exist, although it is a very useful abstraction.  A vital one to the functioning of our society.  But not an end itself.

Markets are a useful tool for collecting enough money, abstracted wealth, to investing into the generation of new wealth.  This is in fact the purpose of capitalism, the use of wealth generated through capitalist projects to invest back into these projects.  Does a market, which is again an abstraction, have a will of its own?  Does it demand freedom, liberation from the chains which society has placed on it?  Or is it nothing more than a useful construct.  I would say the later in a healthy capitalist system.  Ours is not particularly healthy.  The market has no will of its own, the will forced on it belongs to men.  Rich men.  Powerful men.  These two attributes are neither positive nor negative in nature, no matter what the assembled speakers of the right or left may say.  The argument by these men, and they are men, that markets need to be free to work is an argument from selfishness.  These men have forgotten that with their power and their wealth it is their responsibility to give back to society.  Instead they wish to break the shackles compelling them to do this.  These CEO and upper management types have become more confused than I once was, they think they are capitalists.  They are no more capitalists than I am a capitalist.  Do either they or I own any means of production?  Then we are not capitalists.

If a proper capitalist, that is the owner, is reinvesting the wealth their operations generate and paying their taxes, which is a highly efficient way by which the rich and powerful can begin to fulfil the social responsibilities which come from their position, then a healthy capitalist system exists.  Other responsibilities would include fair wages, environmentally and socially sustainable operations and the like.  If the system in place lacks these attributes then it is a dysfunctional system which is only to varying degrees capitalist in nature.

I failed to appreciate the value of a functional capitalist system firstly and most importantly because it does not exist presently in the world.  Nor would a functional system which existed years ago, if it truly did exist ever, look like a suitable system today.  I saw the devastation, the problems, caused by a sick system and assumed, wrongly, that this was a system functioning ideally.  It was not, it was functioning as designed, but not in a manner even approaching ideal.   I was wooed by a system which promised easy, fast solutions to difficult questions.  These questions don’t require answers.  They require work to build a suitable solution for the present and continuous tweaking to ensure their continued function.  Whether the political right or political left represents what is required is irrelevant.

There are exactly five Nobel Prizes awarded every year, with one more masquerading as a true Nobel Prize.  Our friend Alfred specifically set up three of these five prizes to reward scientific developments which have benefited human kind.  In the case of the peace prize, an individual or individuals who have furthered the cause of world peace, and with literature, those who further the understanding of what it means to be human.  Whether these awards have always reflected their original purpose is open to question.  This is not the question for the moment, however.

There is another prize, one which ostensibly seems to be awarded for scientific achievement in a field of study.  Of course, this field is as unscientific as the study of history, but few realise or are willing to accept that.  I speak, of course, of that mighty social science, economics.

There is no doubt that  the prizes in medicine, chemistry and physics are all rewarding true scientific achievement.  But what makes these fields scientific and economics not?  I would argue that it is the nature of what is being studied.  Medicine, strictly, would not exist without purposeful human study, but the subject of their study, biological organisms, would.  The same can be said about chemistry and physics, as prior to humans both played the same role they do now in the universe.  Economics, however, is entirely different.  It is emergent from human behaviours.  It is not separate and independent from humanity.  In short, it is not universal.

Economics is a social science.  Social sciences are quite unfortunately named, since they have little if nothing to do with science.  Which is not to belittle them, merely condemn them to a specific sort of operation, ideally closer to that of the humanities than the natural sciences.  However, that is a discussion for another time.  Being a social science, economics must understand that what it pretends to be is false, that it is not, as said above, universal and is, more importantly, not fundamental.

Not fundamental.  No other social science, humanity or indeed natural science places itself on such a pillar of self-importance.  Economics claims that only economics is the lense which we can judge our actions, plans and programs.  Perhaps other fields would make such claims if they were in a position to, but certainly we would recognize the absurdity of judging everything through the principles of  anthropology.  It is not that anthropology has nothing important to tell us, quite the opposite really, it is that a single lens view of society is an impossibly terrible way of running things.

The reason why no other social sciences have Nobel Prizes?  None of them have rich backing organizations.  That is how this prize came about, a Swiss bank funded the prize, a Nobel Memorial Prize.  I would argue that they did so to increase the credibility of the field as a science, rather than as just one of many social sciences which we attempt to understand our society with.

A final point on the relevance of a prize in economics: other fields attempt to describe laws of nature, but the way nature functions does not change based on these laws, not true for economics.  For example, gravity works as gravity no matter how we describe it, be it Newtonian, Relativity or some future Quantum-Gravity theory.  Economics does not behave this way, if a new mindset takes over, the way the system itself functions can change.  This is because it is an emergent system which requires humans, or something similar, rather than fundamental to the nature of the universe.

An idealist is someone who follows a set of beliefs blindly, with no regard to the real world, and hopes to have the world adopt their ideas.  There is usually negativity in the word, as someone who is an idealist lacks meaningful contact with the real world where they actually dwell.

I think that this is moderately backwards.  Certainly there are some traces of idealism in those who, often correctly, point out how we as humans could be better.  These people, however, are not the truest idealists.  Nor are they the ones deserving of the condescending undertone of the term.

The true idealists in the world today are those who seriously think that we, as individuals, as a city, province, country or world can continue to live the way we live without consequence.  Without change.  Without taking active part in this change.  The idealists are those who preach the preeminence of the market’s god-hand in deciding fate.  They fail to grasp the true interconnectedness of things, the fallacy of universals and the way the world really works.

It is up to those who understand, or at least understand better, to call these people out on their idealism.

The bank of Canada is not controled by parliament.  Many see this as a grand thing, as the people can not meddle in the economy.  I would call them fools.

The bank is ostensibly independent, but is largely run to the benefit of business.  Certainly what is good for business sometimes matches what is good for citizens, but not all the time.  This is strange, since rights of a citizen are constitutionally guaranteed,  while businesses are just a construct.  Constructs have protections of their interest which we, citizens, do not.

Parliament represents us, the people of Canada.  If parliament does not control the bank, then we do not control the bank.  The bank operates in the interest of a subset of citizens who have no doubt convinced themselves, and perhaps many others, that what is in their interest is in the interest of Canadians as a whole.

It is a problem.  A problem lacking a clear solution.

One wonders how

A discussion on development in Northern Ontario, strikes on a large number of items I feel strongly about.

I will not comment on whether or not inflation is beneficial or otherwise.  I know not the answer.  I will not comment on the magnitude of inflation which is healthy.  I do not know the answer.   I will comment on a few causes since I do know the answer.  Not all causes will be addressed since, again, I am not familiar with all causes.

To determine whether or not you are personally an agent of inflation you need only ask yourself one question and one question alone: by doing my job, do I produce wealth.

This is a much more complex question than it first might appear.  Money is not itself wealth.  Money is only wealth if it is backed up by material or intellectual goods.  If you are not producing such goods directly then you are a personification of inflation.  You personify inflation because you make money without producing wealth, which is the working definition of inflation we are using here.

This is necessarily a simplification, but for the sake of argument it is appropriate.

This is not to say that if you personify inflation that something is fundamentally wrong.   Many of the jobs which fall under this catagory are vital to life, such as doctors and nurses, make the rest of our lives easier, such as sanitation workers, or make the actually productive people function better, such as managers.

I feel as though it is unnecessary to discus doctors, nurses and sanitation workers as I feel as though their value is self-evident.   I intend to discus managers in some detail, however.

Some management is important to the functioning of society.  Someone needs to make sure that many functions, such as agreements between the company the government, actually take place.  Other examples of useful management would be people who do not directly add wealth to society but increase the value of final products in other ways, such as people who write manuals and those who test prototypes and those who repair damaged goods.

In modern times, however, management structures have become too large and organizations are routinely supersaturated with managers.   I wonder what a healthy ratio of managers to productive people is.  I wonder how many layers of managers is needed to run an organization.  I wonder why some of our most apparently successful institutions are comprised solely of managers.  I wonder why, when we already have far too many managers already, schools are still eager to produce as many managers as possible.