Capitalism: Competition, Conflict and Crises, Lecture #30: The Final Lecture

[@polvotierno]

I have watched all 30 videos in this lecture series. I see great new insights. I see new doors opening to still unseen insights. Anwar Shaikh has a done a great job. Let's build upon his work.

[@SusanSt.James-33]

It has been a worthwhile journey, following the lectures. Some were difficult to comprehend but that is a pointer that continual refinement is still required. Great book, great lectures and a great effort. Congrats.

[@SusanSt.James-33]

Financialization and its effect on income distribution.

[@SusanSt.James-33]

Net social wage.

[@ScottBakernewthinking]

This lecture is recommended, for those who have the time and desire. I emphasize for those who have the time and desire, because the vast majority of people, including me, do not, and this, I would further argue is itself, an economic factor. Perhaps Dr. Shaikh would see this consistent fact of imperfect information as another example of why, in his reformist view, there exists nothing but imperfection in human economic behavior. Ironic, but instructive - at least to those who have the desire to learn it! As for the book version, it is about twice as long as George's Progress and Poverty; I am at an age where I am on the cusp of needing reading glasses. The small type in his tome: "Capitalism Competition, Conflict, Crises," would push me over it. Even with tiny type, it is a hefty 1,000+ pages. However, I did watch, and do recommend this lecture #30 as a summation of all that went before in a clear, persuasive way, though not completely persuasive, as I'll explain below. More importantly than volume-to-learning ratios, Dr. Shaikh gives us a model that does NOT rely on what he terms the "Jupiter-sized" school promoting the underlying neo-classical view of the perfection of human behavior that we have merely deviated upon - again and forever, as he says "When has competition ever been perfect?" During the time of Marx? Of Ricardo? Of Adam Smith? Of course, the answer is never, and so this, as Shaikh points out, proves the tremendously important fallacy of the entire neo-Classical model. He compares the desire for perfection in Economics to its all-too-close analog in theocracy. This shows why we have theo-economics in the neo-Classical theory, instead of a true empirical field of study which weighs evidence and draws conclusions based upon them. Unfortunately, by focusing almost exclusively on competition as the basis for economic behavior, he misses Henry George's point that Man seeks to gratify his desires with the least amount of effort. In other words, Man seeks the result, not the better means to compete from which to obtain it. Why do people play the Lottery? Not to compete better, but to simply become wealthy without having to compete or work at all! This bias towards a competition model causes Shaikh to marginalize the findings of Ricardo beyond a short mention, and not to consider Henry George at all. He's told me in discussion that he is not a Georgist and does not believe in the Georgist Land paradigm. However, by failing to properly acknowledge the shortcut-to-wealth taken by the Land owner, Shaikh has to rely on a different, and also flawed, view of Man: one who desires to compete to achieve wealth. Again, it is the wealth that Man desires, not the competition, even though successful people are good competitors. The achievements of good competitors are because we do not - as Shaikh himself points out - live in a Garden of Eden, where everything is provided. Man is forced to adapt not just to excel, but to survive. But is is actually laziness that causes us to innovate (I learned this the hard way as a computer programmer, where there is no end to the kinds of programming shortcuts one will invent just to save human coding or later computer cycles during program execution). This is perhaps an extreme view of laziness as motivator, but think of the history of labor-saving devices, it all leads back to the desire to work less, not more. Of course, the ultimate lazy-bones is the landowner, who literally, as J.S. Mill observed, "makes money while he sleeps." Can't get any lazier than that! But Shaikh does not properly acknowledge this, perhaps because he is clearly such a hard-worker himself, as the breath and sheer scope of his 15-year book project makes clear. And also missing is the proper role of that other lazy-bones, the financier, who uses debt and leverage to achieve wealth without (as much) labor. Rent-extraction is the order of the day now, as Stiglitz and others Varoufakis and others have pointed out in ever-rising numbers and volume, though not enough to shake loose the dominant, and dominating, paradigm. The money-power is even more powerful than in George's day, using the new labor-saving devices like the computer and internet to profit without laboring. Land is still a major, perhaps, the major, factor of wealth-generation, but being able to manipulate the virtual currency and monopolize that, has taken on outsized importance not possible in George's time of harder currency. The Money monopoly gets no mention at all, at least in this last of Shaikh's lectures, or the first few that I watched - I missed the vast middle. So, amazingly, though his theory is long and rich in detail, Shaikh misses out on two of the most important components of modern economic reality. Well, he is certainly not alone. And in the real world, we have two major political presidential contenders, neither of whom is particularly versed in economic theory. Trumponomics is a mixture of bombast, gut-beliefs, and disproven trickle-down theo-economics. It's neo-Classical in outline, but not even particularly consistent even then. This hasn't stopped its promoter from getting, though not necessarily "earning" in the moral sense, billions. Supposedly, he graduated with high grades from the Wharton Business School, but that only shows you can understand business without understanding economics, or perhaps even more damning, that you can understand neo-Classical economics that is divorced from the real world. I doubt Trump has picked up an economics book since (including mine, "America is Not Broke!" which I sent him last January). Clinton seems more interested in real-politck than in economic theory, though she probably understands why "trickle-down" just enriches the wealthy, without understanding what the "rentier" class is, though if she thought about it for a bit, she'd probably realize her opponent is a prime example of it. My larger point is that one can get pretty far in life without an economics foundation, which says either that such a foundation isn't necessary, or that what is currently taught in most schools is so wrong as to be useless or even counter-productive. Either way, we are doomed, and so Shaikh's contribution to turning back that tide is greatly welcomed, albeit incomplete.

[@HGSSS]

We did the Anwar series in order to build our credentials in creating dialog with all schools of economic thought. Anwar's book is probably one of the very best new takes on economic theory. James Galbraith considers it the best written in the last 150 years. We are drawing lots of attention to our website from around the world on it. We a putting up plenty of Georgist content on our site as well. Our strategy is to get attention, then convince all of the merit of our views. Stated simply, a Georgist recognizes the extra economic intervention of force applied to nature in order to appropriate unearned income. Once that occurs, then everything else follows. But since it starts in the beginning and gets enshrined in law and tradition, it appears to us as a natural payment quite beyond the need to analyze it as a spontaneous economic force. So Marx, Anwar, Keynes and Samuelson can build logical economic theories downstream from rent appropriation in the first instance, and can just accept rent as some accidental observable. It's up to us to prove that it's not, and that it becomes the decisive independent variable in the system by dint of the fact it's something for nothing for an individual appropriator, against the true owner, the community. Anwar will come over one day and recognize that the initial premise of Economics is force claiming a decisive amount of value,and allowing competition of one sort or another to spread the remaining wealth. But the prima primens of the system is unearned rent, which supports the most credit creation, which in turn supports the quickest journey to ever more unearned wealth. Anwar has created a tour de force in economics, and adds to our gravitas indirectly. Andy

[@TheCommonS3Nse]

I'm just curious, but wouldn't land owning fall under the same competition dynamics? If I purchase land, it is an investment of capital with the expectation that the capital will grow over time. How much growth depends on the labor I put into the land. Renting the land involves more labor, as I will have to maintain the function of the land for the purpose it is being rented (ie. a Landlord has to maintain their property if they wish to compete for higher rents among the available rental properties). I can't just charge whatever I want for rent, as people and businesses will simply leave and find a rental property somewhere cheaper, therefore I have to compete for those rental profits. The alternative is to sit on the land and earn money through the demand for land in the future (which is what most normal home owners do). That significantly reduces both the labor element and the profit rate, but it still relies on competition at the time of selling, as you are competing with other land owners to get the highest return on your land when you eventually sell it. Neither one of these paths to financial gain, rent or sale, is outside of competition. The land owner is no more free to set their prices than the producer is to set theirs. I would think it would still fall under Shaikh's theory, but the wage share would just be very low. I feel like George's theory of lazy accumulation runs into some trouble when considered in the light of Hannah Arendt's observations on the human condition. Arendt saw the rise of totalitarianism as a byproduct of materialism. To over-simplify it, Arendt believed that materialism causes people to look inward for satisfaction. In materialist ideologies, the ideal life is one in which I can get everything that I desire with the least amount of effort. In other words, the objects of my desire are the end goal. It takes no stock in the social dynamics of life. This me-first way of thinking isolates individuals from the community and causes them to become atomized, in other words, they no longer see themselves as part of something bigger. That fits very well with George's theory, but that doesn't mean that it is human nature. Arendt identifies this as the source of totalitarianism precisely because it isn't in line with human nature. Arendt believed that we derive the value in our lives not from what we own, but from having a "place" in society. By that she meant having some way to express ourselves to the broader community. This expression comes in the way of art, music, craftsmanship, etc. That sort of expression requires us to take action in the world, to labor. Having the means to financially support yourself does play a role in this, as it frees you up to pursue your passions, but the financial support is not the end goal, the action it allows for is. This is also supported by the research of Anne Case and Angus Deaton in their book Deaths of Despair. They found that the primary cause of the opioid crisis was the lack of decent jobs. Not the lack of jobs, but the lack of jobs that gave people a recognizable place in society. For example, rather than being a janitor at Apple you are now employed by a cleaning company that has a contract with Apple. You are no longer Bob from facilities, with benefits and the prestige of working for Apple. You are now the nameless drone that could easily be replaced by a robot once the technology becomes reliable enough. That scenario does not give you a "place" in society, and therefore it leads to depression. The depression leads to the breakdown of the family unit and the fall into drug use, alcoholism and suicide. The menial wages play a role in that depression, but they are not the primary cause. So in conclusion, I think Henry George was correct in essentially identifying materialism as the primary problem in society. The pursuit of wealth accumulation is not a sustainable model for human existence. I think he was mistaken in assuming that this was a natural dynamic, that "man seeks the result" as you put it. I see Arendt's analysis as a better fit as it explains why lottery winners and hedge fund babies never seem happy with their lives. They have lived up to George's ideal pursuit, wealth with very little labor, but they are still unsatisfied. The reason they are pursuing easy wealth is not because the easy wealth will make them happy, but rather because they think the easy wealth will make them happy. They have been raised in a culture that pushes this ideal on them constantly. If you just own more, you will be happy. The fact that Arendt's theory matches up so well with the observations of Case and Deaton over 50 years later seals the deal for me. Either way I think you are right that we are doomed. I don't see anything happening in society to combat the materialist push. I just see us getting more and more upset over who owns what rather than seeking a way to ensure everyone has a place in society.

[@jayjaymcfly7475]

Congrats everyone. This has been a really hard journey! Anyone interested in starting a discord-server thing where we talk about stuff from the lecture?