Chapter 13: Endless confusion of apples and oranges: economics and politics
The seldom-noticed context: an economic/political yardstick
Elmore was big on correction. He always felt it unacceptable for anyone else to not understand what he understood, and upon discovery of such deficiency would immediately set about a correction. Sometimes when he got on a roll he was a little hard to get away from. I couldn’t just ease away, as people do, because he’d stay right with me, step for step, tugging my lapel for emphasis. He said he had to put this whole thing in context lest I fail to understand the big picture. Elmore did in fact have a way of making you understand things so totally you couldn’t possibly forget, even if you wanted to.
I’ll certainly never forget what I learned from him about how people constantly confuse economics and politics, mushing them together like potatoes and gravy. He required that I understand how important this confusion is, the consequences of it.
Imagine a yardstick. You know, three feet long, cheap wood. Like all yardsticks it has two sides. On this unique yardstick, one side is economics. The other side is politics.
They always go together, these two human institutions, they’re opposite sides of the same…yardstick. Here is a fact: you will never find one without the other. They are inseparable, economics and politics, the one involving human needs, the other how we behave in meeting those needs. And all politics is, basically, a study in human behavior – predominantly bad, some would say.
Economics is of course the needs part. It‘s a simple thing really, though economists have done their level best to obscure the simplicity and make economics incomprehensible to the ordinary people who bring it alive, which is the rest of us. Simply stated, economics concerns what you need to stay alive – and, while you’re at it, to live your life as meaningfully as possible.
Thus: to merely stay alive you need the basic essentials: food, clothing and shelter for starters, each in adequate measure respectively. Beyond these bare necessities, and in order to enjoy at least the potential for a meaningful life, you also need a few complementary essentials like transportation, health care, and insurance – particularly insurance that some law makes you buy without caring whether you can afford it, rich or poor. “Health care” must include both prevention and curative treatment, as well as a dab of recreation and entertainment to support your mental health. You need these six things all your life, including after you’re retired. During the young adult years you also need some savings or the price of higher education, but not both at the same time.
These human needs can be well understood as a hierarchy of needs, and a gent named Abraham Maslow gave us a good model for understanding them. Maslow’s hierarchy has five levels, each stacked atop another and shaped like a pyramid. The two bottom levels include all our economic needs as cited. The top three levels address life’s other needs, which go beyond the merely economic and include things such as loving and being loved, self esteem, and – at the very top – the really good stuff such as being creative and feeling that life is just really fun and I’m so glad to be living it! Coming back down for the present economic discussion, we’re concerned only with the bottom two levels where you find food, clothing and shelter, the necessities of merely staying alive, plus a few niceties to make life worth living such as health care, retirement income, transportation, insurance and suchlike.
So that’s one side of the yardstick, “economic needs” – sometimes called economic “rights,” a word become controversial among people with mindsets lacking empathy.
The other side of the yardstick, how we behave in meeting our economic needs, is politics. It’s also fairly simple, though it may not seem that way when you’re reading the newspaper. In meeting their needs, people follow two basic modes of political behavior:
1) Help others, or
2) Serve self.
Let’s repeat that. Your choices, always, are: 1) help others; or 2) serve yourself.
The two modes of behavior stand in stark opposition to each other. We must choose between them in every hour of every day of our lives. The choice never goes away – it’s there, in every single moment. Of course the third option idea applies here too: nobody chooses all one way or the other all the time – we all serve our own economic needs to some extent, as we must, and in some measure, some of the time, most of us also help at least some others meet some of their needs. Do you know anybody who’s totally at one end all the time?
But what – in each of us – is the ratio? It’s never fifty-fifty. What is your personal political divide between serving self and helping others? Forty-sixty? Or sixty-forty? Maybe even ninety-ten? Obviously you can’t help others unless you’ve first served yourself sufficiently to become financially, intellectually, emotionally able to help others. But as to meeting our own economic needs, how much is enough? How many people do you know who settle for “mere” adequacy? More to the point, at our economic extremes why do we have dire poverty and gross excess of wealth, side by side, with those at the bottom barely attaining even the basic three of the seven economic needs while those at the top are unconcerned with the price of whatever they want to buy?
If you want an indelible lesson in how the political choice to 1) help others or 2) serve self plays out, Elmore told me, sit in on a few sessions of Congress. The flurry around all those purely economic questions is called politics, but it could be called alternatives to moral behavior. This is not to say that politicians, like the rest of us, don’t also spend time arguing over “apparently” non-economic matters such as foreign policy and how voting districts will be gerrymandered. But as often as not such arguments are only manufactured ruse to distract voters’ attention away from the real goings-on, which are, ever and always, purely economic behind-the-scenes machinations of those using politics to serve self and Get More Money. At the foundation of things, most politics is a tension over how the common wealth we mutually generate, each in our own ways, will be distributed – i.e., who will get how much of the economic pie. That and that only, never forget, no matter what else they may allege to be talking about, is politics.
Economics and politics are two sides of the same yardstick. Elmore taught me this.
The two-option model
He taught me also another way of looking at our two-sided yardstick. It also has two ends, which is why he calls it the two-option model. Politically speaking, people who’d prefer government to totally control economics – and perhaps everything else – are at the left end of the yardstick. Those who fundamentally don’t like government controlling anything at all are at the right end. Opposite extremes. Extremists, one might say.
The yardstick also has a broad middle section, and sensible people – a majority of them in fact – are clustered all over this center. But ignoring this very large majority, as is customary, let’s focus first on the extremes.
On the far left: Communism is a term used as an expletive in modern America, as politically incorrect as shouting shit in church (I’m quoting Elmore here, of course). Under the extreme of communism the government owns virtually everything. It may also control everything, though this is not required by Marxist communist theory which rather inanely assumes that the controlling state will somehow “wither away.” Incredibly naïve that, but Karl Marx was a real strong-minded thinker who got all his best fuzzy ideas while observing the worst that was in fact going on in early-industrial-revolution England. Be assured, the worst goings on in England in those days were pretty bad. It’s best to not judge the good intentions of the economist-philosopher Karl Marx by the insanely cruel behaviors of the Russian Bolshevic extremists who claimed they were implementing Marx’s ideas, lest you reveal your ignorance of history.
Communism expresses the ideological belief that all people can be relatively equal in what they contribute to, and receive from, the Common Wealth. This pseudo-religious belief is of course an obvious fallacy to anyone with half a brain. Every version of the communist model that has existed so far is so exquisitely unnatural to acquisitive human nature that it can only be politically imposed by military force – from the barrel of a gun, as they say. Real communism – that is to say, a democratic version of it – has never been tried and, realistically, would probably be impossible to try in its pure theoretical form.
Ancient versions of communism were propounded by Jesus of Nazareth and others. The modern version was penned by Marx in 1847, the worst year of the great potato famine when starvation stalked the Irish people. Between 1846 and 1850, a million Irish citizens died of starvation or the diseases associated with the famine, while another million survived by emigrating – one-fourth of Ireland’s population in all. For several centuries preceding this event Ireland had been the worldwide British empire’s first colony. In London, the birthplace of capitalism, many businessmen argued that if the Irish could not be innovative in the matter of survival, then they deserved to fall by the wayside – even as British capitalists continued exporting food crops out of Ireland, for the profit of course. Free trade in 1847 meant survival of the fittest. Has it changed?
Marx was a lousy economist-philosopher, history showing that his biggest predictions turned out fantasy – government got much bigger instead of withering away, and his dictatorship of the proletariat turned out to be the dictatorship of Lenin and Stalin. But as a critic of the economics and politics of his day, the reforms Marx called for describe much that modern western societies consider normal and essential for democratic states:
Complete separation of church and state; universal suffrage fore everyone over the age of twenty-one, payment to the representatives of the people so that the working classes can participate in government, universal free education, prohibition of child labor, maximum working hours, minimum wages, a living wage for all workers, social welfare, a graduated income tax, curtailment of the rights of inheritance, creation of a state bank to control usurious forms of credit, and finally, state regulation of the modes of communication to prevent the billionaire class from having a monopoly over the newspapers and other means of communication, allowing them to spread the self-serving ideologies that kept the masses in their thrall.
– Shadia B. Drury (in Free Inquiry, December 2015)
On the far right: At the opposite extreme from communism, Free Market Capitalism, as contemporaneously practiced by mostly unregulated corporations, has in modern America attained the undeserved status of an Eleventh Commandment. Under extreme capitalism the government owns almost nothing – except the armed forces, of course, which always gives government the last word. The private sector – which is to say corporations, serving as capitalism’s delivery vehicles the bigger the better, can conduct all commercial activity of supplying the demand.
It could also – for a very hefty price – bloody well take over and run the post office, welfare, and most other governmental functions including infrastructure from bridges to potholes, and in so doing – it is believed by capitalist believers – could make a go of it far better than those bean-counting bureaucrats could possibly be capable of, rigorous Civil Service merit exams notwithstanding. Agencies charged with environmental protection, public land management, labor, welfare and education, among others, would of course be abolished under extreme capitalism which, like its corporations, favors endless cutting of costs. There is no cost, they say, that cannot be cut. Except for profit, of course. Almost all capitalists proceed with life’s daily chores under the impression that government exists for the same purposes as, and is subject to the same rules as, corporate capitalism. They really believe this, and only the rigorous studies imposed at Poverty School and Gambling School have shown any impact in persuading them to alternative views of the different purposes of governments and corporations.
Under extreme capitalism many governmental functions are handed over – scot free if they can get away with it – to private for-profit corporations in the ideological pseudo-religious belief that 1) only avaricious corporate competition for profit can possibly manage any enterprise efficiently, and 2) wealth concentrated in a few people at the very top will trickle down to those below – or some of them, maybe – and will create lots more new fast-food jobs, and thereby benefit the whole of society with its blessings (see Elmore’s chicken house reference in exposition on poking and acquiring, chapter 3).
Exactly like communism, this religion-like belief/faith in capitalism is of course obvious fallacy to anyone with half a brain. Both, remember, are opposite extremes. BUT – it has irresistible appeal to certain acquisitive human instincts such as selfishness and greed which never really grow up beyond the small spoiled child petulantly grabbing toys with You can’t have it, it’s Mine!
Free-for-all capitalism has prevailed throughout the entirety of United States history, with special intensity in the decades just before the 1929 Wall Street crash that precipitated the Great Depression, and similarly today both before and since the Wall Street collapse of 2007-08. Most Americans take it for granted, thinking it just the way life is. While totally unregulated capitalism has never been tried, eighteenth century privateers came close. Enormous corporate pressure has leaned in that direction throughout American history – except for those anomalous years of prosperity, 1946-1979 – the heaviest governmentally regulated period in U.S. history, when we met and overcame the back-to-back traumas of the Great Depression and World War II, and the American people thrived.
Lest we forget, the opposite ends of the yardstick are far from the whole yardstick.
Half-way right, between the yardstick’s extreme right end and its middle, is a hybrid economic/political model we might call “moderated capitalism” if we had ever bothered to give it a name. Under this model the government retains much of its own bureaucracy but contracts out major governmental responsibilities – especially military functions – to pretty-big private corporations such as, to list a few examples, Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, Halliburton and Blackwater.
Moderated capitalism places modest, always insufficient, controls on monopolies and too-big-to-fail corporations, and assures a partial social safety net to quite a few of the poorest people but never anywhere near all of them. Personal income taxes as a percentage of income are kept low, and corporate taxes even lower, in order to ensure insufficiencies in the social safety net. This half-right model idealizes competitive free enterprise to the level of sanctification, purports to revere a theoretical equality of opportunity which it never achieves, and values the symbols of nationalism higher than the real people who form the nation. It’s pretty much what we have in contemporary America, except where mitigated by surviving programs of the Roosevelt New Deal.
Half-way left, between the yardstick’s extreme left end and its middle, is a hybrid economic/political model called “socialism” which might also be called “cleaned-up communism.” In this model the government owns and controls its own bureaucracy plus some of the really big private stuff, like monopolies and too-big-to-fail. Under socialism government assures major economic basics to all the people, but leaves the rest to free enterprise. Taxes take up to as much as half of personal income and turn it into social services such as physician and hospital care that are scot free to every citizen. No one goes hungry or homeless. There’s quite a bit of this in European countries where “democratic socialism” is considered normal. In the United States, Elmore says, only Bernie Sanders has the balls to speak of it because most yanks are so indoctrinated they simply don’t get the huge important differences between socialism and communism.
The American antipathy to socialism has everything to do with the confusion of socialism with communism. Socialism is a pragmatic, and mostly successful, strategy by which capitalist countries have ameliorated the excesses of the capitalist system and as a result stemmed the tide of revolutions and civil wars.
The gulf between communism and socialism is the gulf between Marx’s failed revolutionary fantasy and the wisdom of his suggested reforms. Thanks to President Franklin Delano Roosevelt, even the United States institutionalized some of Marx’s ideas, in the wake of the Great Depression of 1929, which Marxists believed was the death knell of capitalism – but it was not. By overhauling the banking system, enhancing the graduated income tax, and introducing social security, unemployment insurance, maximum working hours, minimum wages, and a plethora of other measures to benefit working people and strengthen their bargaining power, Roosevelt saved capitalism.
– Shadia B. Drury (also in Free Inquiry, December 2015)
The middle half of the yardstick, from socialism on the left to moderated capitalism on the right, encompasses all nations constituting what is euphemistically called “The West” – meaning most of Europe, Great Britain and Ireland, the United States and Canada, Australia and New Zealand, and South Africa. This middle ground of our yardstick has three dominant characteristics: 1) its political behavior is almost exclusively democratic but with occasional undemocratic lapses; 2) its economies are a mishmash of socialistic programs blended with rampant capitalistic commerce; and 3) it is an arena of perpetual struggle between people constantly trying to tug its economics more toward the left and other people constantly trying to tug its economics more toward the right.
At the present time in history the tuggers-to-the-right are winning this tug of war in the United States and are somewhat less successful in other Western democracies. Primary indicators of their slow but accelerating ascendancy include: unchecked growth of powerful corporations into multinational mega-corporations which command levels of wealth and power exceeding that of many whole nations and are uncontrollable by any one nation; increasing inequality in distribution of wealth, in every nation worldwide, between an extremely wealthy few and everybody else; and slow but steady shrinkage of the middle class while the poor population grows ever larger and more impoverished.
These indicators are particularly evident in the United States. They developed as slow trends over the course of several decades and so are not especially noticed by those affected – i.e., all of us, especially the young. People most alarmed by the overall trend – because they consider it detrimental to the best interests of the American people as a whole – tend to be older Americans with long memories and those relative few citizens who happen to pay attention to long-range social statistics. The alarm, however, is gaining more traction these days.
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Communism or democracy?
People who don’t know much about yardsticks invariably confuse economics and politics. How recently, for example, did you hear someone use the phrase “communism versus democracy” – vacantly unaware they’re mouthing apples and oranges, unaware even that they should be embarrassed? The facts aren’t hard to remember:
- on an economic scale the true opposites are capitalism versus communism;
- on an political scale the opposites are tyranny versus democracy.
- Economic capitalism can be either politically democratic or politically tyrannous. In the United States of America the trend since 1980 has been declining toward a tyrannous form of extreme capitalism that is dividing and conquering the nation.
- The same either goes for economic communism, though that’s now academic for almost the whole world except China’s anachronistic still-in-control communist party, plus of course dreary North Korea which cannot be ignored because these petulant silly toddlers have nuclear weapons in their toy box and threaten belligerently, with great frequency, to use them against all parental critics who try to tell them No no, now, you must be nice, say please and thank you, feed your people.
It is fact that historic communism has been far more tyrannous than democratic, though a few exceptions shone through when it displayed a little democracy here and there, briefly, always temporarily. Capitalism historically has been, mostly, more democratic than tyrannous, though it displayed more than a little tyranny too, here and there – any doubters should learn the history of America’s labor movement in the nineteenth century and early twentieth.
It also is fact that at no time in history has capitalism achieved anything remotely close to its democratic potential. This remains true today because capitalism’s design, its functioning, its very DNA, is inherently undemocratic: i.e., it is inherent that corporations – the delivery instruments of capitalism – must grow too large, they must seek to out-compete their competitors and become monopolistic, they must take unfair advantage of their customers and their own employees. Like hogs rooting, as hogs must, that’s what corporations do. And if you think that’s pretty bad, communism – on the record – lacks even the potential to foster democracy. What a pair.
Lest we forget, these are the extremes we’re talking about here, not that broad middle ground between socialism and moderated capitalism. Extremes of any kind often foster ideologies. An “ideology” may be thought of as an ideal without any compassion, and a prime characteristic of ideologies is that they’re often dead wrong. This is because they so often reflect and represent extremist thinking. Closed mindsets. Example: it’s an economic ideology, roughly half a century old and now known as supply-side economics, that is causing so much of our current troubles – economic stagnation, political gridlock and blind social divisiveness – in America. There were no such troubles – at least in this regard – from 1946 to 1979, the historical record of which is crystal clear, as follows.
When we the people through our government 1) placed many strong public-interest regulations on corporations, especially those that produce nothing but financial manipulations, and 2) imposed steeply graduated income taxes that took little from the poor and a very lot from the very rich, and 3) took a strong governmental lead in guiding research and initiating innovative new business activities, the resulting unassailable fact is that 4) the middle class was large, well off and growing, 5) the poor were far less poor and were a much lower percentage than now, and 6) Great Gatsbys were rare exceptions and there was little of this gaping income inequality that increasingly now sets the super-rich so far apart from the rest of us, fostering visceral deep resentment and sowing the same seeds of revolution which haunted our Great Depression years until the New Deal’s strong governmental initiatives restored our living incomes and saved our collective social butts.
On self delusion
The only people who didn’t appreciate Roosevelt’s New Deal were those afflicted with extremist understandings of economic capitalism and the screwball politics that sustain it. They’re still around, deluded as ever, but in modern times they’ve been joined by an equally deluded army of poor- and middle-class citizens who consistently vote against their own economic self interests even as their real income slides lower year after year.
What, are they crazy? No, these definably non-wealthy citizens are simply misled into voting for side issues – distractions – that stir their emotions such as, among other things, women’s reproductive rights, militaristic nationalism, gay marriage and gun control. They vote for the candidates who lean their way on these diversionary hot-button issues, oblivious that the real big issue not being voted on, not even noticed, is corporations taking over the country and steadily shifting everybody’s wealth to the super rich. In the vernacular, they shoot themselves in their collective feet with each new election – and blame the nation’s economic decline on whichever party happens to be in power. Most don’t even recognize the decline.
The nature and scope of their blaming and their self delusion is breathtaking. They obsess with bottomless resentment over thousands! of their tax dollars which they just know are being scammed by all those lazy welfare parasites, getting all those freeby food stamps and drawing all that unemployment insurance, who won’t get up off their butts and Go Get A Job! They refuse to believe that the true petty cheaters on the welfare system are a very small minority of that whole – citizens like themselves, who fell on hard times – who so desperately need temporary help while, indeed, trying to find the jobs that grow so increasingly hard to find across America. They do not believe that we’re all in this together, that we are ultimately responsible for the mutual wellbeing of all of us.
At the same time, with ultimate irony and even fiercer obsessing, they love and angrily defend that runaway extremist economic system which so recently trashed our national economy to the tune of more than a trillion – a trillion – of our mutual tax dollars. All their terrible resentment and despising is focused on those lazy welfare bums – wasting thousands, maybe a whole million – not the Wall Street criminals who instead of going to jail got bailed out by a trillion tax dollars from the public till – their tax dollars, our tax dollars, yours and mine. What’s the difference between a thousand, a million, a trillion?
What, are they crazy? Yes. Their madness results from that most common error called bipolar thinking: they perceive two opposite and utterly opposed things – and stop thinking right there. It’s either this or that, that’s the only choice. But in truth a mere two diametrically-opposed options is never the only choice. There’s always a third option, somewhere off to one side of the continuum. Usually there’s also a fourth and a nineteenth option – it depends on the set of one’s mind, whether it’s set open or closed. Closed minds are able to envision two and only two options for our economic affairs – either capitalism or communism – “because,” they pine and sigh, “that’s all there is.”
That is not all there is. Among several alternative ways of exchanging goods, services and value is a perfectly splendid, time-tested option called employee-owned co-ops, limited in size, reasonably competing with each other to hold prices down and serve their local/regional populations in the common interest of the entire nation. But closed minds cannot conceive this – they’re locked in bipolar mode. The only choice is capitalism or socialism/communism, “same thing.” Welfare is bad, Wall Street competitive greed is good. Such mindless uncritical thinking strains and fuzzes the boundary between crazy and sane. It grievously degrades their ability to perceive the facts as they truly are.
On the record, in full view of official governmental statistics for the past seven decades, these are facts: Laffer was wrong, as was Friedrich von Hayek, the ludicrous and over-sexed Ayn Rand and her disciple Alan Greenspan, the theorist Milton Friedman and his entire stable at the trenchantly misguided Chicago School of economics, the over-confident opinionated Reagan-Bush crowd and their distressingly, increasingly loony, benighted descendants, and comparable ilk of fuzzy thinking economic theorizers of the past seventy years and down to the present day. None of this would matter if their stupid theories didn’t so verily harm so very many people.
Help Others. And seek to attain Knowledge – which may increase Understanding, which might lead to some Wisdom, which will almost certainly lead to better Helping Others.
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READERS COMMENT: Your ideas are invited for dealing with the issues addressed in this post. These posts attempt to present new perspectives – THIRD OPTIONS – to move beyond the conservative-liberal divide that is so poisoning our national sense of shared community. New and wiser options are always available to make life in America better for all the people. What are yours? Be concise, use up to 200 words. Have a swell day.
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