Friday, May 27, 2016

Condition of the Working Class in England (by Engels)

There does not seem to be any doubt but that we are social beings. The doubt arises when you ask whether there is any sense talking about it. Some don't want to, but whether you want to talk about it or not, it remains there. The fact of human sociality remains, and we are always going to be social beings, and that entails helping, cooperating, and so forth, for we can only live where others accommodate us. You can think of this as giving way, interaction. There always has to be some giving way, some interaction.

     Let's say, then, that I am out in Arizona, and I also have a neighbor. He may be a few miles away but eventually I am going to have to decide whether or not to be social towards him: “social” means anything short of a state of war. Or, sometimes it can be a state of war!

     If some persons do not want to talk about it, fine, but I say that they are social: Everybody is. I am social; so are you, however some do not want to have that discussion.

     The matter is settled. Now, if we are social beings and we like to get along with each other it appears that nevertheless at one time capitalism (as described by Engels and also Marx, in the 1840s or 50s) was not very socially accommodating. It wasn’t very social—at least not to workers whom Engels studied. He gives copious references to the condition of “The Working Class in England,” which is a workman-like title for Engels' 1844 book, originally in German. The book is truly without mercy. However, we know now that Engels' analysis of capitalism as strictly anti-social was wrong; capitalism survived. And thus it is my contention, that it must have done so due to the fact that this social aspect of human life was injected into capitalism. Somehow, it eventually entered in, or else it was already there, dormant.

     Still, discussions since the time of marx and Engels (marx shall be henceforth lowercase, as it is the only way to avoid deifying him) are always about how dehumanizing capitalism is. This is something we need to get over.

     Engels says: “the bourgeois certainly needs workers...but as we need an article of trade or a beast of burden...” In the engaging passage that follows (page 114, Penguin Classics), the bourgeoise always gets the better end of it. He “takes very good care” not to treat workers well. In the long run this analysis is not well-supported and incorrect.

     Even in 1844, Engels admits, “it has become very complicated” (p114). Over time something happens that was outside of his model. Engels did not suspect that persons could get nicer. Or probably I should say that human decency gets injected into capitalism. But this is not accounted for in the 1844 report. When Engels speaks of “the centralizing tendency of competition”, on page 117, and of a process that “transfers the goods that cannot be disposed of in one market to other markets”, let us note that it has the potential of social interactions. Possible interactions of this kind are so various, and multiply so much, that over time, another eventuality comes due, the utility of better social behavior. This may come into play as much as any other thing. But perhaps the puritanical German, of Rhineish orientation and under Prussian domination, did not see this one coming.

     At the beginning of what K. Polyani calls “market society,” which is to say the latter half of the eighteenth century, the whole situation naturally seemed chaotic. Thus there was little opportunity to put any social benevolence into the situation. It appeared that workers would be thrown to the dogs, as perhaps they were for one hundred years. This is rather dismal news about capitalism, indeed. Nevertheless, a humanizing trend eventually took hold—even in dismal England where the human cesspools of Manchester were located that were described with such detail and proficiency in the opening chapter of the able Engels volume. That situation could not go on much longer—now, this is correctly perceived by the author (and his friend Marx), but the trend, instead of revolution, was more of an evolutionary process. It was, eventually, humanizing. Humans have an inherent need to be social, and also sociable, as were the good bourgeois Engels and family, Marx and family.

Thursday, May 26, 2016

R. H. Tawney

Is it a natural characteristic of acquiring money that, having acquired it, one should be able to do whatever one likes with it? The attractive component of capitalism, for those with no morality, has always been that they can do whatever they want with it—I should rather say, with the money that comes out of it. The requirement of the system is that you need to pay for what you get. Deirdre McCloskey gave me a long lecture on this. We may work for six months, then go to the market, to spend our wages. Are seller and buyer the same? The seller earned a profit in a few minutes, based on perhaps six months of hard labor on the part of the other person. It was just these kinds of opportunities that became the surplus value component of capitalism.

     This was quite an opportunity for someone. Is it all bad, to explore this opportunity for profit? NO, I don’t think so. I do not think we need to label it as bad but I do not think it is good, either, although this seems to be the position that McCloskey ends up in, which seems to be rather untenable, considering its extreme unlikelihood. And this she calls “virtue.”

Tuesday, May 24, 2016

Would it be of use?

Would it be of any use to anybody, I wonder, to have a better understanding of economics? Do we need that? I am not saying that I can change the world and I am not saying that I want to do that. My mission is to tell you you were taught stuff in college economics that is wrong. That stuff isn’t true. It's not easy to tell this to people. I can add that OK — it’s a nice story. If it wasn't a nice story, no one would buy it. Yes, but it cannot any longer seem so 'nice' when you realize what has happened. You are deliberately being given wrong information. It's a troubling situation, and serious problem. 
     Then it does not seem so innocent and 'nice.' We are unable to explain the economic basis of the society we live in. This is a matter that concerns me, is of concern to me. It concerns me that we have only the basic, common sense notions about economics. The problem, and it is a deep problem, is that no one is able to get past that, or to develop the deep theories that one would expect to see, in other areas of scholarly inquiry. There has been this failure to explain economic life in a disciplined, formal manner. And they are telling us, with a straight face, that the existing "science" is good. This is what's troubling. You have not only "pretty bad science," but a propaganda effort to say it isn't. And here we get back to the earlier question. Why is it so hard to create a genuine economics? 
     In short, why tell people the wrong things? This is something we really need to understand. Is it an honest mistake? This is a big question but in any case the pretend explanations are out there, doing their thing.  Now, all these are centered in a particular school, that arose starting around 1880. That school is the “neo-Classical” school. Creative work in this school peaked, I would say, around 1920. OK, maybe not. Maybe you could say it peaked in the 1930s or at some other time; but, what is it still doing being around at all? Did it turn out to be the truth? No! So, you would think it would have very effectively choked itself to death some time ago. It should fall, based on its being wrong. Well, why doesn't it? That's the question. And, for neo-Classical economics to still be there has to be malicious. It doesn't just hang around for no reason. In the past, every so often, I have checked. And, what I would find out, every time I check, is that it is still out there, being taught. (I am always amazed to see that this is the case. I have not checked under any rocks for a while, though. Maybe it just got to be too boring. However, it is also true that many professors are questioning it, now. Currently, this is true. That's great. What took you so long, baby? It sure took them a long time, to get there. My, that is strange.)

The Classical theory is much preferable. Let's see how the Classical theory looks, written out. I encountered the following explanation. This was from a Wikipedia page: “neo-Classical Economics.”

Classical economics, developed in the 18th and 19th centuries, included a value theory and distribution theory. The value of a product was thought to depend on the costs involved in producing that product. The explanation of costs in Classical economics was simultaneously an explanation of distribution. A landlord received rent, workers received wages, and a capitalist tenant farmer received profits on their investment.  

This sounds to me better than the “other approach. Anything would be.