A relative by marriage spent a number of years in a Kibbutz (communal living) in Israel. She recently described how this seemingly idealistic lifestyle, which she enjoyed when she lived there about forty years ago, has since succumbed to the worldly pressures of capitalism.NOTE (added 10 Sep): At my invitation, the relative mentioned above has posted a Comment below, using the "Anonymous" option. As she mentions, there was lots of information coming at me rapidly and I was not taking written notes, so I got some information factually wrong. I thank my relative for Commenting and I have corrected my Topic text to indicate the corrections. [Changes are indicated by brackets. Material in quotes is from her Comment below.] My erroneous text has been grayed out. I appologize for the incorrect information I included in my original posting.
As she recounted her time in a small (100 person) non-religious (no rabbis allowed) kibbutz south of Beer Sheva in the Negev desert, I found myself drawn by the idealism of the concept and the reality that it could (and did) exist here on Earth during my lifetime. I was sorry to hear how and why she and her husband left the kibbutz for a new life in the US and how, on two subsequent visits, she found the original concept diluted to the point she hardly recognized it.
Could it be that this dedicated C-mind (me) has some L-mind memes kicking around?
Her utopian story awakened my idealistic, utopian imagination!
HER UTOPIAN STORY
She was born and raised in the US in a non-practicing Jewish family and met her husband-to-be while he was visiting from Israel. He had spent his teenage years living on a kibbutz. They married and ended up living in a small kibbutz, one of a group of three that were some distance from each other and quite far from any other settlements.
Living arrangements were simple. Each couple had use of their tiny apartment with a bedroom and a shower and toilet. Everything else was communal.
Children lived in a separarate building and were, in essence, raised by the whole community. With only 100 people, everyone knew everyone else and took responsibility for every child. I was reminded of the saying "it takes a village to raise a child" - in this case it was literally true. (That "African proverb" was made famous by first lady Hillary Clinton's 1996 book It Takes a Village: And Other Lessons Children Teach Us.)
The main work at the kibbutz was farming. They raised much of their own food and sold the excess to fund purchases of supplies. There was sufficient social pressure to assure that everyone worked relatively hard. Work was distributed to everyone according to their abilities. For example, she told me, one man, who was blind, was kept busy sorting lumber by size by feeling it. Another, who was mentally handicapped, was given tasks he could accomplish despite his limitations. Everyone did their share of "grunt" work on the farm and took turns preparing, serving, and cleaning up after communal meals.
No one was paid for their work, except for a small "stipend" that could be used to buy personal items. Social pressure and the public nature of communal living assured that everyone consumed only what they needed.
No one was "in charge". She told me there was one designated person who dealt with the external authorities, but he had no special authority within the kibbutz. There were regular meetings attended by all adults and decisions were reached by general consensus.
Thus, the kibbutz was a living example of the Karl Marx slogan "From each according to his ability, to each according to his needs" (1875). (I have refrained from calling this kibbutz "communist" because that word has gathered the "bad breath" of the totalitarian examples of Stalin's Russia and Mao's China. I think it is better to think of it as idealistic socialism.)
HOW UTOPIA DECLINED
So, I asked, if it was so ideal, why did you and your husband leave?
Well, it turned out that her husband ["wanted to be a success in the business world."] was not satisfied with the productivity of the work arrangements. He, along with some others, wanted to start a factory and hire outsiders to work there and also supply labor for the farm. ["The philosophy of this kibbutz was that all work was to be done by members and if something required extra hands, that work would not be undertaken if it required becoming a 'boss' to outside 'workers.' This arose in one case because we had a few extra fields where peanuts or potatoes could be planted, but not enough 'hands' to do the work, so the fields remained fallow."] The problem with that was the idealistic idea that no one should have any employees and no one should work for anyone else. The whole problem with capitalism, according to this view, is ownership of the means of production by the capitalist class and the necessary exploitation of labor class that that system implies.
Shortly before she and her husband left the kibbutz, a decision was reached to purchase a communal TV set. That, in her opinion, was the beginning of the end of the kibbutz as she knew it!
They came to the US where they completed their educations and found professional employment and raised their family.
THE END OF UTOPIA
She made two subsequent visits to her former kibbutz and sadly recounted how things had changed.
A decision was reached to build a factory and hire outside workers. ["There is now a factory for polymers, but there are only three workers, none hired from outside. The crops have changed to amaryllis for export rather than crops for local and internal consumption. And there is the major difference that they have migrant workers for the fields (interestingly, from Thailand primarily) -- which is so against the Marxist philosophical foundation)."] With additional income, kibbutz members demanded larger stipends and used that money to purchase their own record players and other luxuries.
Children no longer lived in separate housing. Apartments were enlarged to accommodate entire families.
As outside workers were hired to work the farm, more and more kibbutz members found employment outside the kibbutz. The number of kibbutz members working the farm declined to six (out of the total membership that remained about 100). Those earning larger salaries in their outside employment objected to giving their entire earnings to the kibbutz to be shared equally with those working the farm. ["More members now work outside the kibbutz than inside the kibbutz, but it is not true that they resent having their larger salary pooled back into a central source. "] Demands were made for larger stipends and they were met. The level of privately-owned luxuries increased. ["As exposure to material comforts increases, through television and movies -- and the consumer movement, the stipends must grow."]
More and more non-kibbutz Israelis settled in areas near the kibbutz until it was no longer remote from outside influences. The kibbutz had houses built on some of their former farmlands and rented them to non-members. ["While some kibbutzem do rent out houses for outsiders, the kibbutz where I worked and lived does not. Interestingly, of the 100 plus people who lived there in the '60's, so many have remained! I was truly astonished at how many old friends were still there. Of course, the obverse is also true, I did not see that many new people and changes, such as the pending decision to allow individual automobiles, is being pushed by the newer members."]
I must confess I was sad to hear how their utopian, idealistic socialism had been corrupted by capitalistic tendencies. The kibbutz members were now owners of a factory and farm that employed others as laborers and also landlords of rental properties. Oy!
ANY LESSON FROM THIS?
Well, we have been led to believe that democratic socialism does not go far enough and that "real communism" has never been tried.
The problem, we have been told, was with tyrants like Stalin and Mao and others who distorted communism and replaced the privileged capitalist class with "The New Class" (Milovan Djilas) of privileged Communist ruling elite.
The problem was the large scale of supposedly communist countries.
However, the story above has no tyrants at all. It is on a small scale of 100 people who voluntarily agreed to come together on a kibbutz. And yet, it still failed to maintain the idealistic utopian concept. [This apparently was an overstatement by me. My relative disagrees: "I think that by and large it still has maintained most of its Marxist underpinnings, but they are being eroded by time and a shrinking world. The kibbutz movement started primarily from a harsh need; how to survive and how to build an agrarian community with only a handful of people."]
Perhaps the problem is the basic concept: "From each according to his ability, to each according to his needs"?
Perhaps it is irreversibly at odds with inate human nature?
Ira Glickstein
I can’t identify any basic human instinct that desires an idealistic lifestyle, other than a deep emotional abhorrence of the values of raw power of militarism and materialism, expressed in modern times by nationalism and the ethics-free competition of capitalism. Perhaps there is an instinct for altruism.
ReplyDeleteIt seems to me that there must be a deep-seated values conflict between competition and cooperation that characterizes billions of years of evolution. Every multicelled organism is an “altruistic” cooperative community of differentiated cells, but it is always in “selfish”competition with other cooperative communities.
Like Ira’s relative, our youngest son, Jay, spent several years as a novice Trappist monk (Cistercians of the Strict Observance) in Spencer MA. Ironically, they have an excellent web site. Before that he was a highly paid geologist working for what was then Noranda Mining Company of Canada (now a Swiss company Xstrata).
Jay said he was simply fed up with the cutthroat values, typical of mining companies, but he admitted that he was drawn to the monastery by more than that. Also, Jay was not brought up with strong religious convictions, so that did not lead him to join. In fact, he eventually left the order because he could not tolerate Catholic dogma. However, he still enjoys visiting St. Jospeph’s on retreats.
Monastic communities exist in all religions going back at least 2500 years (Buddhism). Ira mentions that the kibbutz has about 100 members. Somewhere in The Rule of St. Benedict, the guide for most western Christian monasteries, he says that when there are more than 100 members they should split off and form a new monastery, suggesting that too large a community is not easily managed. The Abbot is also supposed to appoint task leaders, presumably to achieve an optimum hierarchical span!
I am the relative you mentioned in the blog about the kibbutzem and there are a few observations and corrections that I will make:
ReplyDeleteI. As a general overview, there were many different political affiliation and sizes to the kibbutzem (pl)in Israel, forty years ago and this continues today. Some kibbutzem were religious, some were more leftist (although 40 years ago, none were supportive of the soviets, who, at that time were controlling Syria), some had over 1000 members and large factories, and some teetered on the brink of dissolution.
II. Our kibbutz was in the Negev and had about 100 members (about 140 people all together). The extra people were "nahal" - army serving their time helping by working on the kibbutz, and "ha shomer ha tzier" - young people in the youth movement, somewhat like the boy/girl scouts, that was the strong basis of recruits for the kibbutzem.
We did not leave because my husband wanted to start a factory. I know that it was a lot of information coming at you rapidly. He wanted to be a success in the business world, but there was no discussion of a factory on the kibbutz or any political schism. The philosophy of this kibbutz was that all work was to be done by members and if something required extra hands, that work would not be undertaken if it required becoming a "boss" to outside "workers." This arose in one case because we had a few extra fields where peanuts or potatoes could be planted, but not enough "hands" to do the work, so the fields remained fallow.
III. The social pressures to conform exist, I believe, in every group. It is the tension for social cohesiveness and inclusiveness, even in The Villages, or in any small town, or even in Guam. There was some privacy in the kibbutz, but you had to work hard to maintain it. By its very geographic isolation, our kibbutz was a closed society. Neighbors didn't argue (or not seriously), there were NO extra-marital affairs, at least not between two members of the kibbutz, and no coveting of material possessions because we all had basically the same. I will note that if someone had a special need, even a special medical need, or desire, for example, a special dress for meeting family members or a boy or girlfriend in town, this was possible with the stipend each worker accrued. So there was recognition and support of individualization also. And as the group itself was responsible for deciding what would make its members happy, there was no deprivation, no falling through the cracks for individual members. Vacations and recreation were provided. There was a library, swimming pool, basketball court, volleyball court, clubhouse, etc.
Sometimes there were special circumstances, like for one youngster, who was gifted in science, whose field work was suspended for the summer so that he could study in preparation for the university, where all costs not borne by the government were borne by the kibbutz, regardless of the return for the kibbutz. Indeed, there was no "payback" for the kibbutz for a scientist. But this too was decided by the members. We also had one member who worked with a political block outside the kibbutz, and one member who traveled to Tel Aviv for art classes twice a week.
On the other hand, obviously, if someone had a problem with the way things were done, of needed more privacy or individualization, or whatever, over time they left the kibbutz -- so it was a self-selected society. No one was ever kicked out that I knew of.
IV. It is not the end of Utopia today, but rather the ending of Utopia as I have described it -- it has not yet happened and may not happen; although I feel that it will, but that is my opinion, and I doubt that I would recognize many permutations for the future.
Yes, there are no more separate housing for the children and thus, no more feeling of principal bonding with the "peer group." It is also sad but true that the agricultural basis for the kibbutz has fallen by the wayside here. This may not be true for other kibbutem.
More members now work outside the kibbutz than inside the kibbutz, but it is not true that they resent having their larger salary pooled back into a central source. The communal philosophy is still very much alive. There is now a factory for polymers, but there are only three workers, none hired from outside. The crops have changed to amaryllis for export rather than crops for local and internal consumption. And there is the major difference that they have migrant workers for the fields (interestingly, from Thailand primarily) -- which is so against the Marxist philosophical foundation).
As exposure to material comforts increases, through television and movies -- and the consumer movement, the stipends must grow. When I lived there, we baked cake or ate fruit for dessert or that 10 o'clock snack, now there is a "store" for gum, candy, chips, etc. But this is forty years later and the same can be said as we walk down mile after mile of supermarket aisles. Sad, but true!
While some kibbutzem do rent out houses for outsiders, the kibbutz where I worked and lived does not. Interestingly, of the 100 plus people who lived there in the '60's, so many have remained! I was truly astonished at how many old friends were still there. Of course, the obverse is also true, I did not see that many new people and changes, such as the pending decision to allow individual automobiles, is being pushed by the newer members.
I think that by and large it still has maintained most of its Marxist underpinnings, but they are being eroded by time and a shrinking world. The kibbutz movement started primarily from a harsh need; how to survive and how to build an agrarian community with only a handful of people.
The idealism has become more and more distinct from the need.
The metamorphosis is continuing, but it is not a "done deal" yet. Some of the larger kibbutzem are becoming unrecognizable to me and it does not bode well for the movement. Some kibbutzem had been newly formed on a strictly religious and geopolitical foundation in the West Bank/Gaza and that is a different story in itself. I am curious what the evolution of the entire movement will be.
Howard, I remember meeting your son Jay when he quite ably rode my recumbent bicycle at Binghamton U. Thanks for relating how he went from working as a mining company geologist to a novice Trapist monk and why he left the Cistercian order ("because he could not tolerate Catholic dogma"). I hope he is doing well and enjoying his post-Trapist life.
ReplyDeletePerhaps he would have been more at home at the kibbutz my relative joined - although all members were nominally Jewish, it was non-religious. The Wikipedia entry states that some "kibbutzim were secular, even staunchly atheistic, proudly trying to be 'monasteries without God.'" Like Jay who you say "was not brought up with strong religious convictions" my relative was never Jewish in the religious sense, nor is she now. Are there any nominally Christian communal groups that are non-religious or atheistic? Perhaps some "greenpeace" and environmentalist or anti-corporate groups fall in to that category?
Which brings me to your comments on "the ethics-free competition of capitalism" and "the cutthroat values, typical of mining companies".
IMHO, there is no higher ethics than that imposed by the iterated "Prisoner's dilemma" situation.
The original "game theory" (non-iterated) Prisoner's dilemma" is:
"Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies ('defects') for the prosecution against the other and the other remains silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?"
It would be best for the prisoners for both to remain silent, but, each fearing the other will "defect", it is likely they will both confess!
In the iterated version, this scenario is repeated many times and is therefore more similar to competition between business rivals than prisoners. It has been demonstrated that the best strategy for the iterated version is "tit-for-tat". If your competitor cheats, for example by selling below cost to take your customers away, your best strategy is to do the same. If your supplier cheats, for example by delivering defective raw materials, or your customer cheats, for example by not paying for goods, your best strategy is to cease dealing with them and to turn them in to the authorities for prosecution. If your competitors and suppliers and customers do not cheat, it is your best strategy to compete honestly and fairly.
It the real world where there are more than a few competitors (and suppiers and customers) in any given market, the "game theory" breaks down somewhat. However, the best strategy is to offer the best product and services at the lowest reasonable costs and to support reasonable government regulation of weights and measures and enforcement of contracts.
To me, the essence of a "free market" is what promotes the highest ethical standards. I have often noticed that the profession that talks most about "ethics" is the least ethical (the lawyers!) and the one that talks least about ethics are the engineers. Why? Well, the lawyers are good at shifting responsibility to anyone but themselves, but, when a bridge collapses or some other technological product fails, it is usually pretty clear if it was engineered correctly or not.
Finally, you note "Every multicelled organism is an 'altruistic' cooperative community of differentiated cells, but it is always in 'selfish' competition with other cooperative communities." Absolutely!
Why? Each and every cell in a multicelled organism shares the exact same genes! That is the highest level of "kin selection". I do not believe there is any real "altruism" in the world. It is either common gene "kin selection" or common meme "reciprocal altruism", or an over-generalized version of the latter.
Ira Glickstein
Ira, thanks for filling in details about Game Theory. I agree that from an engineer’s point of view, that is, as an analytically rational model, the Iterated Prisoner’s Dilemma (IPD) is probably the best ethics model found so far.
ReplyDeleteHowever, I want to emphasize that it is not a simple or closed model. The tit-for-tat strategy predated game theory by 3000 years, e.g., “an eye for an eye, etc.,” and indeed, tit-for-tat is the simplest short-memory strategy, but it is not optimal for long memories. A resource site for the IPD is here.
In fact, you can see that the longer memory of your competition’s behavior that you take into account, the more intricate your optimum strategy will become. That is why organisms have evolved such complex survival strategies.
However, the reality is that no normal person’s everyday ethics is based on complex game theory. Not even the abnormal physicist and engineer use IPD in their personal relations. Like everyone else, our ethics are usually based on our emotions.
Conservatives believe that simple ethical (often religious) rules usually work better than analytical situational ethics of liberals. Ethics based on simple religious commandments, “Love God and your neighbor” or even a secular “love truth and justice” will always have more emotional appeal than objective rational games.
I think that both Ira and Howard missed an important aspect of the degeneration of small communes of various types. In this world we have witnessed that static equilibrium is not possible. Evolution demands that adaption or extinction must occur, because the environment is not static. A commune is an attempt to institutionalize unstable equilibrium, i.e., to balance a coin on its edge.
ReplyDeleteTo balance a coin on its edge in perpetuity requires a noise-free environment or an external hand to hold it in place by force. For the monastic orders that meant a powerful church, God and the protection of the nobles. Once that weakened, the monastery's communitarian structure crumbled. Communities which seek static equilibrium cannot achieve it. If we look at the Amish, we see they have adapted despite all their efforts to remain static. They have interpreted their rules to permit them to be driven in automobiles, although they still cannot drive. They now use gasoline powered farm machinery that is pulled by horses in order to achieve the productivity demanded by external market forces. Some communes like the kibbutz, can only continue to exist by adaptation or by the influx of fresh blood and capital from starry-eyed new-comers. Some religious communes in the US have a long life, because of despotic rule in some cases and isolation from the environment in others. I think that the failure of most communes says less about the nature of the human mind and spirit than it does about the applicability of thermodynamic principles to the change of state of a system.
With respect -Joel
Joel is right "that static equilibrium is not possible." As the Red Queen says in Lewis Caroll's Through the Looking Glass, "... it takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"
ReplyDeleteThe problem with small, isolated and purposely insulated communes that get stuck on some fixed ideology is that they cannot adapt to changes in the external environment.
Your example of balancing a coin on its edge is excellent. The rule: "Balance on Edge" can be achieved only a tiny percentage of the time. "Balance on Head" is achievable nearly fifty percent of the time and "Balance on a Flat Side" nearly 100% of the time.
Your example of the Amish illustrates the problem of getting stuck in the horse and buggy age by a rule prohibiting mechanical engines. Orthodox Jews have a rule prohibiting "work" on the Sabbath and that includes "lighting a fire" that got interpreted as not allowing any electrical appliance ("sparks are fire") to be operated.
As you point out, some Amish have come up with ingenious interpretations to get around the strict rules (as have Orthodox Jews).
Getting back to the specifics of my Topic, I think Marx's Rule: "From each according to his ability, to each according to his needs", when interpreted literally, cannot work in any voluntary society under ordinary circumstances for any significant length of time. While the Amish Rule and Orthodox Jewish Rule worked fine for centuries, Marx's Rule has proven futile in decades because (IMHO) it is in conflict with the foundations of evolution and natural selection and the very essence of animal and human nature which developed out of that process.
People will not work to the limits of their abilities absent the threat of damnation (if they believe a Supernatural God is watching their every move) -or- the threat of punishment (in a slave society or a tyranical communist government) -or- if there are differential rewards for harder/smarter work (in a capitalist economy).
Similarly, people will not voluntarily limit their consumption to actual needs. There is no limit to human greed.
The Rule of Capitalism, with a hierarchy of classes tied more or less to achievement, is not superior because it is particularly ethical or humane or fair in the literal sense of those words, but because it works in the real world and harnesses human nature.
I am not talking about "pure" unfettered Capitalism, but rather something like that practiced in Western Democracies. We believe the myth that everyone is equal in the eyes of God and the Law (not quite true but, if you close one eye and squint a bit it is kind of true), but we allow wide variability in earnings and spending and hold out the real possibility that the next generation could move up the hierarchy if they go to school and work hard and smart, etc.
In that regard, I had an interesting argument with two members of a breakfast club this morning. Seven of us were deep in discussion when the waitress came over. I said we should order but others wanted to continue the discussion. The waitress came back five minutes later and I insisted we order. One guy couldn't make up his mind and another questioned her about the specials, whether he could make substitutions, there was bantering back and forth, and so on.
After we ordered and the waitress went away I expressed my anger at the guys who wasted her time and made her job more difficult. My point was that anyone who is doing a productive job is entitled to equal respect, even if it is a lowly service job. It infuriates me when anyone takes out his frustrations in life by picking on or being rude to service personnel who have to "take it with a smile" because they work for tips and have no alternative way to earn a living.
Ira Glickstein
The current issue of US News & World Report features an item The Kibbutz Comeback that updates and reinforces our Blog discussion.
ReplyDeleteWhat's new? Well, a "shot of capitalism" is reviving these aging socialist communities!
Equal pay for unequal work (or no work) has been replaced by pay "according to their productivity". "All these members who'd been staying home with back problems suddenly felt well enough to go back to work."
From each according to his ability, to each according to his needs has been shown to be an empty slogan, incompatible with basic human nature. It does not even work in an ideal setting - small groups of homgeneous, idealistic socialists.
The prohibition on anyone being a landlord exploiting renters or a boss abusing employees is mostly gone. The newly successful capitialistic kibbutzim are landlords to non-member renters and employers of non-member workers. Oy! And many kibbutz members now own their homes. Oy, oy, oy!
Reminds me of George Orwell's Animal Farm where animals oust their human master and set up an absolutely equal society. It goes well until the most intelligent among the farm animals (the pigs) not so subtly revise the rules to make themselves "more equal" than the others. It all ends when the ordinary farm animals can no longer distinguish between their new pig masters and their old masters, the humans.
Ira Glickstein
Ira, your black-or-white anti-socialism comment will never pass as the whole truth. Unfortunately, such ideological positions do influence senseless political campaigns. You say, “From each according to his ability, to each according to his needs has been shown to be an empty slogan, incompatible with basic human nature. It does not even work in an ideal setting - small groups of homogeneous, idealistic socialists.”
ReplyDeleteOn the contrary, taken at face value (not as anti-capitalist propaganda) this classic principle has been shown to be necessary for efficient social organization for thousands of years. Only a mind empty of history would call it an “empty slogan incompatible with human nature.” It is not incompatible with the natural competition between social groups. In fact, social organizations that do not follow this efficiency principle will seldom be competitive.
Throughout history, successful military leaders have organized and inspired their troops according to their ability, while at the same time caring for their needs. This is what commanders and managers are taught today. Hundreds of societies, often religion-based, have lived by this principle, and it has worked in settings far from ideal. Many such groups have lasted for centuries, far longer than any modern profit-based capitalistic society. The principle is found in the Bible (Acts. 2:41-47 and Acts 4:32-35), which is where Marx probably picked it up, and neither Moses nor Jesus is considered a venture capitalist.
Like witches, there is good and bad capitalism. It should not be equated with natural free competitive markets that have existed in all forms of governments since trade began. Industrial capitalism is historically very recent. The problem with it is that the unrestricted profit motive leads to financial capitalism, which at first is a way for the well-off to make easy money. Laissez-faire or “free-love-of-money” capitalism is still the root of evil, and it has always ended up (after two or three generations) corrupting and concentrating wealth and power. In its very short history, the results have been economic instability that ends in global disasters of the type we are now experiencing. How easily the ideological capitalist, when failing, can accept bailout socialism― but only for the rich!
Here is a defense of free-market capitalism by Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, and now a senior fellow at the Hudson Institute. I have only posted (edited-for-brevity) paragraphs. The entire paper can be found here
ReplyDeleteWASHINGTON (Reuters.com) - The past month's turmoil in U.S. and global financial markets has spawned several articles tolling a death knell for capitalism. Some said that the crisis is proof that capitalism never worked, others opined that the solutions to the problems will end capitalism.
Although Washington is using non-market solutions in an attempt to unfreeze the credit markets, they have not succeeded, and are unlikely to be permanent. The next administration, Republican or Democratic, might take over more of the economy. But if one country in our global economy proceeds down an unsuccessful socialist road, others will demonstrate the effectiveness of capitalist measures—just as America led the way with tax cuts in the 1980s.
The present crisis started not because capitalism was allowed to run its selfish course, but because the government interfered with the operation of private businesses and allowed excessive growth of money and credit.
Take housing, where the crisis began. The government interfered with private decision-making by requiring banks to make loans to people who could not afford them, through the 1977 Community Reinvestment Act. It forced banks to improve lending and service to borrowers in poorer neighborhoods, including people with poor credit histories. Some of these borrowers only qualified only for subprime mortgages, which had introductory low rates that eventually rose.
Read the whole paper.
Howard, thanks for posting the link to a defense of free-market capitalism by Diana Furchtgott-Roth. I agree with the parts you quoted. However, after reading the rest, where she says "...just let the defunct firms fail, and the healthy ones purchase the assets," I'm not sure I completely agree with her.
ReplyDeleteAs Furchtgott-Roth argues, government interference caused the housing bubble by subsizizing Fannie/Freddie and forcing banks to act irresponsibly.
According to the "Pottery Barn rule" - "you break it, you own it" - the government has an obligation to step in now, as it is doing, however bumbling.
Furchtgott-Roth opposes government forcing banks to accept capital and, therefore, partial nationalization, while George Soros (the billionaire socialist who funds radical political action groups) argues for greater nationalization of banking. I tend to agree with Furchtgott-Roth, but I'm not sure. No-one seems to know if the massive, multi-nation bailout is going to work or not.
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On your earlier posting about Marx's slogan: "From each according to his ability, to each according to his needs", we differ on what it means. To me, and I think classical Communists, it means, with proper "education" the "communist man" will VOLUNTARILY give to the max according to his ability and VOLUNTARILY reduce his consumption down to absolute needs.
Within families (shared genes) and small tight-knit groups (shared memes) that ideal could work to some extent. However, as the history of the Israeli kibbutzim has shown, some members will exploit minor back aches to avoid doing their fair share of work, and the lures of capitalism will lead some members to push for greater private stipends and possessions. The history of large-scale Communism demonstrates that totalitarian figures like Stalin and Mao establish police states to force people to work hard for little while their Communist bosses and their families are granted special priviledges.
You write: "successful military leaders have organized and inspired their troops according to their ability, while at the same time caring for their needs. This is what commanders and managers are taught today."
Of course smart leaders assign subordinates to tasks according to their abilities. Of course they take care of their needs. But, in each case, if the subordinates do not work hard they are fired (or shot), a threat that keeps them working obediently. If they take more than the superior decrees they "need" they know they will be punished.
Capitalism is not perfect, and I am not arguing for the totally free-market form, but at least it tends to reward, on average, those who produce a product or service that is needed and that people are voluntarily willing to pay for. Communism tends to reward those who are best at scheming and buffaloing their fellow human beings.
Ira Glickstein
I won’t dispute the rewards of ideological capitalism vs. communism in theory. Anyway, no real Democrats or Republicans have such simple policies. I tend to be persuades more by a pragmatic approach such as, for example, comparing evidence of the performance of the two parties.
ReplyDelete