Tag Archive: Government


Creative Capitalism and Human Welfare

In the August 11th edition of Time Magazine, Bill Gates wrote an article on the concept of ‘creative capitalism,’ or finding ‘imaginative’ ways to use the capitalist system to ‘do good’.  He argues that “capitalism has improved the lives of billions of people” (40) and that, in terms of meeting human needs, “governments and nonprofit groups have an irreplacable role in helping them [e.g. those whose needs aren’t met by the market], but it will take to long if they try to do it alone.  It is mainly corporations that have the skills to make technological innovations work for the poor” (40).  Essentially, ‘creative capitalism’ involves a corporation finding a profitable way to distribute goods and services according to need, or, in Gates’ words, “the companies make a difference while adding to their bottom line” (42).  How are corporations going to accomplish this within the mandates of the system?  According to Gates:  “it’s not just about doing more corporate philanthropy or asking companies to be more virtuous.  It’s about giving them a real incentive to apply their expertise in new ways, making it possible to earn a return while serving thh people who have been left out.  This can happen in two ways:  companies can find these opportunities on their own, or governments and nonprofits can help create such opportunities where they presently don’t exist” (43).

Gates’ heart is in the right place, I’m sure.  But let us refocus.  The market distributes goods according to “effective demand,” i.e. according to those who can pay.  The ability to pay is obviously contingent upon your income, coming from either property income (interest, etc, which comes from the ownership of capital goods) or labor income (wages, salaries, etc., that come from the selling of labor power).  Some own capital, and others don’t, and are forced to choose between the sale of their labor power, or death by starvation.  This set of conditions is legally solidified through the codification of private property rights (considered here as legal rights, not necessarily moral rights), and the enforcement of said rights through the coercive apparatus of the state.
Consequently, if you are not lucky enough to be a capitalist, you have two choices.  First, you can choose one from among many corporate taskmasters to work for under the condition that you won’t receive all the value you produce, and once in their firm, they have all the power over you and your life activity and the laws of the U.S. Constitution no longer apply. Alternately, you can choose to starve and die.   You have the freedom to choose between wage-slavery and death. That is the precise definition of ‘economic freedom’ for those who aren’t capitalists.  Even ‘creative capitalism’ would run on this formula.  The theory is that either (1) corporations should find ways to profit off ‘socially beneficial’ behavior themselves, or (2) NGO’s and governments should make ‘socially beneficial’ behavior profitable.  It reveals the true natures of the firm and the economic system when you consider that the argument is not that a firm is a social institution that impacts daily the lives of potentially billions of people, and thus should choose to make that impact a positive one on human welfare regardless of profit.  Instead, the argument for which Bill Gates is getting many pats-on-the-back for is that firms should find a way to profit from activity that doesn’t necessarily kill people, destroy the environment, and subvert democracy.  It is still distributing wages and goods based on neither contribution nor need, and is consequently still illegitimate.  I think it is highly more logical to argue that, as corporations are enabled to accumulate capital through social conditions, and they impact human welfare, they ought to ensure a positive impact on their actions and inactions whether or not it is profitable.  It might be replied, then, that a profit-independent ‘firm’ would be pushed out of the market, for that is not a very ‘capitalist’ trait. . . but that only goes to show how conflicted are the values of capitalism with the value of human welfare.  ‘Creative capitalism’ is little more than the advocacy of getting paid to throw scraps from the table at a banquet to the starving masses below.

Obama and elitism

The recent battle cry of “elitism!” raised against Barack Obama has caused some damage to his reputation recently.  (For example: http://www.reuters.com/article/politicsNews/idUSN1547078420080416).  Americans like to see themselves as equal in opportunity as the capitalist class.  Heck, almost all Americans who have food in their fridge like to think they’re ‘middle class,’ meaning middle-income-bracket, meaning able to be top dog someday, capable of being the top of the hierarchy somehow.  Everyone gets their chance to walk over others.  But simultanously, Americans ignore that the seemingly obvious and logically necessary result of “equality of opportunity” is “being able to become an elite,” and like to think that elites don’t exist.  So any intimations that a potential candidate is ‘elitist’ raises hairs on the back of the American ‘middle class.’  (Don’t get me started on the percentage of Americans who judge candidates on being most “presidential” . . . what do they think they mean by “presidential” if not “of the appropriate elite”). 

You cannot get elected in America without money and connections.  I don’t think I need to cite proof–I can’t see anyone disputing this.

The book Towards a New Socialism by Cockshott and Cottrell (http://www.ecn.wfu.edu/~cottrell/socialism_book/) talks about the necessary problems with the ‘elite’ influencing representative governments.  From their new preface, 3rd draft, they say:

“Parliamentary government, legitimized by regular elections, is presented to the modern world as ‘democracy’ plain and simple.  We view it differently.  We think, as Lenin did, that it is the most perfect form of rule by the rich.  We think, as Aristotle did, that elections are always and everywhere the mark of an aristocratic rather than a democratic state.  Experience teaches that those elected to parliaments are always, everywhere, unrepresentative of those who elect them.  Whatever indicator one looks at–class, gender, race, wealth, or education–those elected are more priviledged than those who vote for them.  The elected are always socially more representative of the dominant classes in society than they are of the mass of the population.  Once elected they will always tend to represent the interests of the classes from whom they are drawn.  There are 101 detailed circumstances to explain this fact, but they all come down to the same thing.  Those features which mark you out as one of society’s ‘elect’, one of the better sort, are also the features that help you get elected” (23).

I think they’re right about representative government.  I suppose what I don’t understand is the suprise Americans feign at electing someone who represents ‘the elite’.

On our current business crisis/ recession

Long story short, our banks decided to lump together morgages into sellable objects to make money, and since a certain small proportion of individual mortgages went under, no one wanted to buy packages since no one knew which bundles held bad mortgages.  This occurred after our government pushed to deregulate exactly such a thing.  In short, our financial speculators and investment banks wanted to make lots of money, and so they did something risky, and we are the ones to pay.  We are going to pay the effects of inflation when things become less affordable; we will pay more proportionally as our dollar drops because each dollar means more to us in proportion of our income.  We will pay to bail out these banks, as taxes have been reduced disproportionally for the wealthy and we are left to foot the bill when our government bails out the rich.  We will pay if the bailouts don’t work and our economy collapses, because we have no golden parachutes, little mobility, and we will be the first to suffer unemployment.

On every level, the irresponsibility of the capitalist class and financial capital specifically will affect the middle and lower classes (or the working class specifically if you want to use ‘class’ as Marx defined, and not Weber), and all because those in finance capital wanted to make money and started to do unsafe things–at the allowance of the government.