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Friday, December 5, 2008

American Communism

This may ramble a bit. I’m more or less thinking out loud.

It is also subject to editing without notice, I’m mostly putting it up so Tiro can get cracking on what I anticipate will be one hell of an oppositional article.

If you’ve read my blog regularly, you’ve probably run across the “Mixed Heritage” article wherein I discussed the mixed nature of our government. We are, as I have stated, a mixture of many different ideas about how to run a place, and this is a healthy way to be. If you haven’t read the mixed heritage article, you should do so, because I’m writing this on the assumption that (having read the mixed heritage article) you’re not going to assume I’m making an argument for the Stalinization of our nation.

Communism is a word being bandied about quite a lot these days, mostly in ALL-CAPS AND WRITTEN BY PEOPLE WHO HATEE BARAK HUSAIN OBAMA for no apparently logical reason. I should like to spend this second paragraph warning any of these people who happen to be reading this that they shouldn’t be here. Finding out what Communism is might lead them to have to reevaluate their position on something, which I gather can, in some individuals, cause seizures or spontaneous combustion. If “them” is you, please go somewhere else.

I will now proceed to strip several ideas down to their core principles. You may disagree with me if you like, but you’ll probably be wrong.

Capitalism: In the presence of a government actively ensuring competition and punishing unethical business practices (false advertising, theft, murder), The Market will produce the best possible outcome.

Socialism: Intrinsically, people have equal value, and society should pursue a more level distribution of wealth. (Suggested methods vary)

Libertarianism: In the absence (or minimized presence) of government, The Market will produce the best possible outcome.

Communism: Public ownership of the means of production is the best method by which to achieve a socialist utopia.

Anarchism: cops iz always takin’ my weed. Wtf man. Down with the man. (You think I’m kidding, and I’m about to say I’m kidding, but I’m not. I honestly believe this is the core belief of anarchists everywhere, in some form or another.)

So, with the exception of Anarchism (I’m kidding L, don’t kill me), I think we can agree I’ve been essentially fair to all viewpoints expressed above. Libertarianism and Capitalism (as core principles) differ in the degree of tolerated government interaction with the market, communism is a particular brand of socialism which seeks to produce the socialist ideal through a very specific course of action.

Now. You might be wondering what my point is. After all, Socialism and Communism are two great evils that have been put down like the dogs they are, right?

Not sure where to start, but China seems as good a place as any to get where I want to go with this, so let’s start there. China’s system is based on communism, and attempted very strenuously to hold to the communist party line through the tenure of Mao. After Mao, however, the system has integrated capitalist and (other) socialist elements at a cautious pace until now we face China across the table as our major economic (and military) rival.

Conversely, our system was based on capitalism, but we have included more and more socialist and communist principles along the way in order to prevent or repair holes torn in the market by reality. Examples? Anti-trust laws, welfare, social security and (here’s where people start shouting at me) stock options.

That’s right. Stock options.

Stock options are employees being paid, partly, in percentage ownership of the company they work for. What does that sound like? That sounds like communism. Does it work? Arguably pretty well! Employees who have mass amounts of stock in a company are more likely to be actively engaged in that company’s success. After all, if the company is worth more, so are they.

Yes, yes, there’s caveats, but when you get right down to it, stock options are capitalism taking a good long look at communism and cherry-picking a good idea out of all that useless, excess crap.

One could even make an argument that we’ve been actively engaged in subversive communist activities since the Dutch first started trading commodities on blackboards.

Essentially, when a company starts selling itself (the obvious sexual reference is actually not intended, for once), it stops being privately owned in any meaningful sense. Oil companies tend to be owned by millions of people. Problem?

The people working at the bottom of the chain can’t afford stock. Their wages do not fluctuate with company performance, so neither does their performance. They see CEOs at the top of the chain making more when the company is doing better, and they wonder “why does he keep getting a raise, and I can’t even make my medical bills?

With CEOs making salaries in a ratio of 411:1 them:worker or worse, you can kinda understand why the bottom rung is pissed. And there’s no pretending that distributing half of a CEO’s salary would not significantly increase the income of the rest of the employees. If a CEO makes a paltry 4 million annually in even a company that has a full thousand employees, each employee would make an additional 2,000 dollars each year if the CEO’s salary was reduced to only “mostly” extremely ridiculous.

This is why people think CEO salary caps are a good idea, and you’ve got to admit that from almost every angle they’ve got a pretty solid point.

There are, of course, a few economists (self-correctionists, I call ‘em, I think Tiro might be one) who believe that CEO salaries are a natural result of market pressures, and that forcibly reducing them will cause companies either to find ways to circumvent the law to offer bonuses and such and court the CEOs they want, or cause companies to base themselves in foreign countries to avoid the salary caps. I don’t know the technicalities of this route of argument, Tiro could better inform you and hopefully will in the comments.

I crunched some numbers today in response to a comment on Sodahead where someone claimed that a better way to reinvigorate the economy would be to offer all taxpayers a 1 million dollar tax rebate. Seems like a dumb idea, doesn’t it? His numbers don't quite add up, of course, but nonetheless:

If you crunch the numbers, it turns out that giving everyone in America (women, children, dependents, unemployed and most of the illegal immigrant population included) $2,000.00 each, is actually cheaper than the bailout plan by over half. It would cut down the rich-poor gap slightly, give the housing industry a leg up and give people some disposable income or at least a break from their credit cards. The car industries might not even need to be bailed if their customers weren't so damn broke, and if the rate of mortgage foreclosure is pulled back a bit, the lenders might be able to recover without government aid too.

Downside? People probably wouldn't buy American cars (they fail to compete with the foreign market in every meaningful way, especially in gas mileage and trade-in value), and given how the mortgage giants have been running their business up through now, chances are they'd still fail, and then where would we be? We'd have expendable income and an unemployment rate of "which way is Canada again?"

Meanwhile, manufacturing jobs are moving overseas and the service industry is overpopulated by teenagers and college students eking out a rent check. Eventually, (ad-absurdum) you’ll have two options for getting out of the serving-coffee business: make your living by investing in foreign markets, or die. Starting your own business will be impractical, as they’ll all be ritualistically devoured by larger corporations once a month, and while large chains distribute amazing deals nation-wide at affordable prices, they also don't buy locally, so if you want to get your goods into them, you'd best have a billion dollars behind you putting your product into instant international circulation. Best of luck. (The tone of bitterness is due to this being a very personal problem right now.)

Eventually, education in America will catch up to investment potential, and the only hindrance to new investment strategies will be distribution of wealth. At that juncture, it might not actually be unwise for the government to start "sharing" the wealth, perhaps by giving each Taxpayer an "investment fund" paid into directly by a percentage of their taxes, which they can use only to invest locally or abroad. Foreign infrastructures would get a huge boost from the influx of investment, Americans would see a huge influx of wealth and our Nation would become a venture-capital source the rest of the world can use to bring itself up to our standard of living. It's a pretty shiny win-win-win situation. A good place to be.

But there’s really only one way to get there, and that’s to grow the middle class until everyone is in it.

Which is really the point of the middle class, actually... it’s a comfortable level to live at that is attainable by just about everyone, if the system is balanced right. The best standard of living sustainable on an even playing field is essentially the definition of the middle class.

Which is an extremely roundabout way of saying that by growing the middle class, we’re becoming socialists. We just think that the best way to get to the socialist Utopia is a capitalist system tweaked to encourage the expansion of the middle-class. Ironically, we might be right.

So it’s about time we abandoned all this random dissociated hatred for “socialists” and “communists” and just started looking at what works and what doesn’t. Lumping the baby in with the bath water is what got us into this mess in the first place, and any good suggestion this late in the game is going to involve creative economic thought, not purism.

Purism never works, ever. It never has, and no matter how many times you end an argument by calling someone a socialist, it never will.

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