Let us never forget,
“Socialism is unrealizable as an economic system because a socialist society would not have any possibility of resorting to economic calculation. This is why it cannot be considered as a system of society’s economic organization. It is a means to disintegrate social cooperation and to bring about poverty and chaos.” Ludwig von Mises. Money, Method, and the Market Process.
Recently, an article from the blog Poverty Matters (supported by the Bill and Melinda Gates Foundation) authored by Jayati Ghosh in the Guardian elaborates on how a new global left is emerging as a result of a transcendance of the traditional socialist paradigm. Ghosh explains that this new global left has is currently transcending the traditional socialist emphasis on “centralised government control over an undifferentiated mass of workers, to incorporate more explicit emphasis on the rights and concerns of women, ethnic minorities, tribal communities and other marginalised groups, as well as recognition of ecological constraints and the social necessity of respecting nature.” This transcendance is occurring via what Ghosh considers to be seven common threads that are not new but a result of a “collective failure of memory”.
These threads are:
- An attitude to what constitutes democracy,
- the rejection of overcentralisation,
- a more complex approach to property rights,
- a discourse in the language of “rights”,
- a realization that addressing issues only in class terms is not sufficient,
- a emphasis on gender as a a cause for addressing issues,
- an emphasis on environmental conservation, the protection of ecosystems, biodiversity and the integrity of a country’s genetic assets.
I wonder what Ghosh considered to be the traditional socialist paradigma. Socialism and the ideas behind this socioeconomic system of collective ownership of the means of production is very diverse and it is incorrect and inaccurate to speak of a single socialist paradigm. More so, what seems a New emergence of the left is in fact not occurring anywhere in the world.
Collectivism (inaccurately generalized as “the left”) in its many names and shapes continues developing itself within the same framework of ideas that have been used for centuries. While the historical context has changed the principles continue being the same. As such, the thread number 1 which seems for Ghosh as a new attitude toward democracy is the result of the failure of the previous collectivist governments that have ruled the world. There is no real change in the attitude toward democracy since collectivist ideas consider democracy as a means to the value they aim to achieve: collective power over the collective. The only way of having a new attitude toward democracy would be in fact to reject it as a mean to achieve any end successfully. This of course is not happening anywhere in the collectivist groups of the world.
As well, the point number two of overcentralisation is false since collectivism is a centralized system of organization in which at the end of the day the sole power over everything resides in the collective government. The only change is not of how centralization happens but on how many people are to be managing that collective government (the Party, elites, corporations, oligarchies, et al).
Point number three and four have nothing new and are the same exact approaches that collectivism has had since it origin in regard to property and rights. Collectivist philosophies consider all in essence the private ownership of the means of production to be evil, static in nature and inefficient to satisfy the needs of humanity. Its approach to rights is rooted on the principle that the only important rights are those of the collective and thus reject the individual rights of its members.
Points five, six and seven have also not changed in the collectivist mindset since they are rooted in the principles of class struggle that have only continued the trend of understanding society as a competing/destructive system based on gender, race, culture, religion, etc. The principle continues the same: The so called tension or antagonism continues to exists in their interpretation of society due to competing socioeconomic interests between people.
By definition, the only way in which any real change, evolution or overcoming of a collectivist philosophy in the globe will arise when the discourse starts by rejecting the philosophical principles in which they are rooted. As such, unless they understand how and why the collectivist philosophy is full of fallacious principles that have caused death and poverty for centuries, there is nothing that will change. There is no emergence of a new left, there is no resurgence of collectivism and the dialectics of historical materialism continue existing in the core of all collectivist philosophies. It will be only until intellectuals have the common-sense and moral courage to question their philosophies of life that we may seem an end to centuries of collectivist failed projects of organizing society. Until that day what we will continue seeing is the same social system that has destroyed the best within man for ages.
The neoliberal (a.k.a. crony capitalism) ruling of the world during the last 50 years is usually generalized as a “big fish eats small fish” relationship. The story continues, with the big fish in Washington, Brussels and Moscow fed themselves with the riches of the world and profited from globalization. Meanwhile, the small fish continued breeding and feeding the always hungry lords. This general discourse is repeated in most if not all the academic papers dealing with postcoloniality and globalization.
The impact of the ideas of these intellectuals is widespread and not easily observable for the ignorant masses. As such, when you read the newspapers in Latin America or Africa in regard to the “new” nationalizations being undertaken by the “new” socialist/anti-neoliberal governments in Argentina, Bolivia, Brazil, Greece, Lithuania, and Sri Lanka since 2011 people usually ignores that there is nothing “new” in these actions.
These nationalizations of privately owned assets have been in many of the cases actual renationalizations of companies that were not owned by the principles of free market ideas, but that had been privatized by corrupt social democratic governments 50, 40 or 10 years before and who created new privately owned privileged companies. As a result of these social democrat and socialist governments many privately owned companies emerged as the bastions of crony capitalism, inefficiency and corruption. The previous, generally increased as closer the national industries were owned by crony private companies that owned single-crop cultive exports and resource rich regions.
To mention short examples of the previous, recently in Argentina Yacimientos Petrolíferos Fiscales (YPF; English: “Treasury Petroleum Fields”) was renationalized (not nationalized) by the government under claims of corruption, inefficiency and negative benefits to their national interests. In Bolivia, Transportadora de Electricidad (TDE) was nationalized by Evo Morales government. However, TDE was also a fruit of the neoliberal and crony capitalist deals established in 1952 after a coup d’état that established a military socialist democracy with the party Revolutionary Nationalist Movement (MNR) which allied into a military-nationalist clique that lasted for 50 years.
Privately owned companies produce always more efficient and better products than state-owned companies. However, privately owned companies that have benefited from government granted privileges for decades not necessarily will produce more and better services and products than state-owned companies. The previous is something that few of us dare to identify and explain with a non-contradictory historical and philosophical background. Meanwhile, the great majority of academics influenced by collectivist philosophies will start writing articles and books applauding the “successful” renationalizations and condemning those free-market authors who will write back and fight.
Indeed, there is a difficult road in defending private property and privately owned businesses in the context of countries and regions that lack respect for individual rights and the rule of law. As such, to defend the private vs collective in those circles it is necessary that first we identify how the societies are currently organized around the collective inefficient systems of social and economic organization. In the case of Bolivia and Argentina it is necessary for us to identify how these business and societies are not structured and organized around the principles of free market and individual rights. By understanding and explaining this clearly there will be a chance to change the discourse of discussion from “why is renationalization good?” to “why laissez faire capitalism is better than the privately owned business of crony capitalism?”
- Why the Morales govt. in Bolivia is a threat to neoliberalism (redantliberationarmy.wordpress.com)
- Sheldon Richman on Adam Smith vs. Crony Capitalism (reason.com)
- Brian Koenig: Obama’s Crony Capitalism and His Top 2008 Donors (junkscience.com)
- Argentina And Bolivia Are Right To Take Over Private Companies (businessinsider.com)
Today I am joining the celebration of the World Book and Copyright Day (also known as International Day of the Book or World Book Days) a yearly event on 23 April, organized by UNESCO to promote reading, publishing and copyright. The Day was first celebrated in 1995 and in 2012 the UK World Book day was celebrated on March 1, 2012.
As part of my celebration I am sharing with you some quotes from one of my favorite books. This year I have chosen the book “The Law” written by Frederic Bastiat. The book was first published as a pamphlet in June, 1850 and later became widely read in Europe and the world.
“Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.” ― Frédéric Bastiat, The Law
In The Law, Bastiat states that “each of us has a natural right — from God — to defend his person, his liberty, and his property”. The State is a “substitution of a common force for individual forces” to defend this right. The law becomes perverted when it punishes one’s right to self-defense in favor of another’s acquired right to plunder.
Bastiat defines two forms of plunder: “stupid greed and false philanthropy”. Stupid greed is “protective tariffs, subsidies, guaranteed profits” and false philanthropy is “guaranteed jobs, relief and welfare schemes, public education, progressive taxation, free credit, and public works”. Monopolies and Socialism are legalized plunder which Bastiat emphasizes is legal but not legitimate.
If you are interested in reading more about this ideas here are the links to the book,
The Law (English Edition) via Amazon.com
La Ley (Spanish Edition) via Amazon.com
La Loi (annoté) (French Edition) via Amazon
- Free and Cheap Apps on World Book Day (wired.com)
- World book and copyright day, 23 April (jepoirrier.org)
- World Book and Copyright Day 2012 – “Books and Translation”, 23 April (metaglossia.wordpress.com)
- World Book and Copyright Day 2012 | United Nations Educational, Scientific and Cultural Organization (metaglossia.wordpress.com)
By 2011 the BRIC economies had some of the highest rates of income inequality adjusted to the Human Development Index among developing nations. At the same time, the BRIC countries had consistently had the highest GNP growth versus the previous 10 years among developing nations. How is it that there is not a parallel growth of the Human Development of its citizens? The answer and one of the biggest challenges for the BRIC countries is the fact that a large amount of the GNP is distributed among small elites that control their market economies.
Economists and investors such as O’Neill, Krugman and others largely emphasize the expected growth of the BRIC economies as indicators of where to invest their money. Unfortunately, they have not paid the same interest to what many other economists consider important: the human development of the people. Fortunately, there are still some economists who since the decade of 1970 paid a lot of attention to the issues of freedom and equality. Economists leaded by Milton Friedman, the Economics Nobel Prize of 1976, argued that economic policies should be focused in the freedom of its citizens as a primary value. To them, stressing equality per se could lead to economic inefficiency as well as it would put in risk Freedom itself. However, the same economist argued that it was necessary for developing economies that the government took a central role in poverty alleviation in order to keep the pace with the economic growth of its economies. Unfortunately, this poverty alleviation is not being done in the BRIC countries and the economic difference between the poorest and the richest continues to grow. Since the 60s, a large group of economists emphasized the negative effects of not paying attention to a free and equal development in emerging markets; economists like Friedman and Hayek wrote a lot in this regard and even recently Elinor Ostrom’s ideas, who won the Nobel Prize in Economics in 2009, are still not listened by those who have forgotten the importance of good governance economic policies.
India is the country in which this income inequality versus human development is more pronounced. Currently, India occupies the position #93 with an IHDI of 0.392 and the country has descended in the rank many positions since the last decade. Inequality in the earnings among Indians has doubled over the last two decades, making it one of the worst performers among developing economies. Why? This is again the result of the failed attempts by the Indian government to combat corruption, bad administration and under-payments and also of the unawareness of foreign investors.
The fact that foreign investors have no interest in securing the welfare of the Indian people is a problem. To them, the investment opportunities of this specific BRIC country are of value until they find a better economy to move their money to. However, the real stakeholders are not the foreign investors but the Indian Government and its groups of interest who should aim to secure the welfare of all of its citizens now that they have a chance. While the growth of this economies will continue the effect it will have in such unequal societies will result in some of the worst rates of poverty and hunger ever seen in history. By 2025 India will be the most populous country in the world but also, it will have 268 million people (20.3%) living still with less than US$1.25 a day as reported by economists in the World Bank. The Indian government should go aligned with the current trade liberalization in order to support higher productivity in the private sector and to exploit its comparative advantage of having a labor-intensive industry to foster the production of goods and services.