Tuesday, July 16, 2013

Why Jews from communist countries support leftist economics.

A friend said to me,"Sam, the one thing I never understood is why ANYONE, Jew or otherwise, who immigrated from the USSR would have an ounce of sympathy with the left. I'd figure any of them would be further to the right than me!" What follows is my response.

A. What the U.S.S.R. did was not communism. Not as communism was intended. A kibbutz is communism is action. What the soviets did was corruption authoritarian oligarchical malevolent despotism. The wealth of the nation was not spread equally, it wasn't even spread according to the doctrine of "from each according to his ability, to each according to his need." 

Communism, when installed democratically and democratically revocable, is no worse than capitalism. Both are good ideas on paper. The reason why Jews left Russia was not due to economic policy. People forget communism is not a form of government, merely a system of economy. If done right, moderate socialism can work just as well as capitalism when done right. The problem is, while perfect on paper, neither capitalism nor communism account for the flaws in humanity. 

Capitalism and communism are, in their simplest forms, the two ends of the spectrum/continuum for the distribution of wealth between the bourgeois and the proletariat (if you prefer non Marxist terms, we can go with the owners of capital and labor). Absolute communism is where the wealth is divided amongst everyone equally and everyone contributes to the capital cost. Absolute capitalism, if capitalists were permitted to so so, would result in slavery where the only labor costs were those to provide the absolute essentials to keep the labor force productive. The problem with both systems stems from the human desires, and they are closely related. 

The primary problem communism is that A. Despite what the founding fathers stated, all men are not created equal and all jobs are not created equal. So while, with communism, all the needs of labor are met, and, if done properly, there is extra for the workers to spend on niceties. However, the man who is slaving hard either as a miner or as a doctor (or something else), or a laborer, will likely grow resentful of the salesman or teacher whose jobs, while equally important to the whole system, aren't as taxing physically or mentally.  As such that resentfulness broods a sense of entitlement that since they are working harder, the should get paid more, the justification for which is not particularly relevant as the resulting animosity is the same. So either they will become demotivated or they will revolt, peacefully or violently.

He primary problem from capitalism is that the bourgeois have a disproportionate amount of power because, without capital, there can be no work. Now, in agrarian societies and apprentice master businesses, people generally worked for themselves and produced what they could and their success and wealth was largely based on their own efforts. However egalitarian that might be, it's horribly inefficient. With the creation of the east India trading company, corporations came to power and capitalism, as we know it today, was born. Now, both communism and capitalism are significantly more efficient than egalitarian age methods, and I already outlined the major  issues with communism. With capitalism, the capitalists are almost universally sociopaths to one degree or another, psychologists have confirmed that gait repeatedly. Now, don't get me wrong, efficiency and productivity demands a little bit of sociopathy for reasons I won't get into, especially since I think the gunny can figure it out. There is even benevolent sociopathy, good parents would be the best example. However, if left unchecked, the malevolent sociopaths will use their capital resources and their control of the labor market in abusive ways to get what they want for their own personal gain and they do so at the expense of the worker. In this instance, it causes entitlement on behalf of the capitalist who says, "this is my capital, I'm the one taking the risk. If not for me, they wouldn't have food on their plate because they wouldn't have a job." While there is a sliver of truth to that argument, the fact of the matter is that:
 A. Labor is a form of capital.
 B. no man has ever gotten profoundly wealthy from the fruits of their own labor. Unless you go fabricate your own tools from the fruits if the earth, you're benefiting from someone's labor, and you have to pay for that labor but you do so because it allows you to be more productive and increases your wealth. But that's getting deeper I to economics than I care to venture at this time. 
 C. All capital when leveraged for productivity can be lost. So when the worker leverages his labor, they too are taking risk. The difference between the capitalist and the laborer is that the laborer risks more. If the capitalist risks his capital and loses, he can always start over. (Donald Trump is the archetypal example) if the laborer risks his capital and loses, he cant start over as easily, if at all. Now, sure, people can risk their labor capital and lose because they are crappy workers and it will limit their job opportunity through their own fault, and that's on them. But if the laborer leverages his capital and gets injured, he's SOL unless the injury is only acute. Sadly, the majority of workplace injuries are due to the failure of the capitalist to control safety risks. 
Because of that sociopathy that is nearly universal of capitalists, they grossly exaggerate the risk they take and grossly underestimate or under-appreciate the risk laborers take by working and their dependence upon the laborers.  For this reason, the capitalist will invariably abuse the worker if given the opportunity. (Rare exceptions exist, and this tends to be a non-absolute among small-businesses because A. More empathetic people tend  run small businesses, they are more connected to their workers economically and personally. When you see your workers suffering every day as you work beside them, it's harder to ignore their plight.) With this abuse, resentment grows into animosity until the workers revolt. The European revolutions of 1848, the Battle of Blair Mountain (the largest insurrection on U.S. soil, second only to the civil war.), the Ludlow Massacre (violence was used against the workers), etc are examples where that resentment turned into violence because the workers were so oppressed they couldn't revolt peacefully. A prime example of where JFK got his inspiration for the line,"Those who make peaceful revolution impossible will make violent revolution inevitable." 

From these violent worker rebellions, came the unionization. The labor finally got the ability fight back and work together to secure rights and fair pay. They lobbied to pass laws to protect the worker and to prevent the abject poverty that resulted from the rise of capitalism. Now, it also helped that people like Henry Ford came along. As anti-Semitic as he might have been, his idea that the workers need to be paid enough to buy his product was spot on and it, along with unionization, changed the standard of living and disparity between classes for about a decade or so, until corporations wen back to their old ways and led to the Great Depression, which was preceded by low worker pay, severe cuts to the top tier of the income tax brackets (the lowest since the creation of the income tax, 25%), and a massive inequality/consolidation of wealth. After the war the taxes remained high, their were more brackets and taxed the massive incomes of the wealthiest Americans with the money's earned in each bracket more. Topping out at like 95% in 1945, dropping to about 80% until 1950ish, climbed back to 90% with Ike, stayed there till it dropped to 70% in 1964, went back up to about 78 in 69, went back down with Nixon, stayed at 70% till Reagan who dropped to 50% then 28%, rose a bit in the bush era (his lips lied), rose with Clinton, and back don with Bush. Also, during the 50s and 60s executive incomes were "low", only around 50 times higher than their average employee, social security was defended by a republican, food stamps were barely regulated. (My father collected food stamps in college and gave the food to the hungry since abject poverty and employment weren't a requirement yet and food stamps were simply a beneficial byproduct of the subsidization of the agriculture industry whose failure due to people being too poor to buy food.) It's ironic that the era of the red scare was a socialists wet dream and the economy was strong. 

I will stipulate that leftist economics and unions can be dangerous if they are taken too far. However, the reason why Jews tend toward leftist economics, is because, if not taken too far, they work. The reason why the industrial revolution worked is because the creation of industry was a bubble and individual wealth was not really monetized as much, there was an influx of immigrant labor, and the massive expansion of production, however it was unsustainable. Especially since the wealth was removed from land. Industry caused wealth/income per square mile to skyrocket, so people needed less land for production which would either drive farmers out of business, or the governmental revenue would suffer from decreased tax revenue. Also, income tax had the added benefit of being a de facto limit on executive pay, which left more money for capital investments, including worker salary. Also, we support social programs because we refuse to accept abject poverty, and expecting them to be supported by charity from the people who either don't have the money to spare and the people who refused to pay their workers sufficient wages in the first place is absurd to the point of insanity. Besides, the average person doesn't want charity. Receiving charity for reasons other than extreme catastrophe, is demeaning and demoralizing. For a man who works 60-80 hrs a week to try and support his family to be forced to rely on charity or social programs because employers want to add an extra 0 or 00 is beyond insulting to the point that its almost criminal. And for environmental issues, it is criminal. 

In short, it works like this, when the the capitalists fails, the laborer suffers; when the laborer fails the capitalist suffers. When the capitalist succeeds, the laborer should benefit; when the laborer succeeds the capitalist should benefit. That is the law of symbiosis and it is sustainable. However, if the capitalist benefits while the laborer suffers, the capitalist will benefit exponentially in a positive feedback loop, until it hits criticality. At which point one of two things will occur: A. The laborer revolts and overthrows the capitalist and they fade away. B. The capitalist tears down the laborers/consumers so far that they can no longer support the growth and burden of the capitalist and fade way; without the laborer to support the capitalist, they too will fade away. There is a name for this alternative to symbiosis, it's called  the pathogenesis of parasitism. (While I only described pathogenic parasitism from the perspective that the capitalist is the parasitic life form, however, it is possible for labor to take on that role, however due to the advantages that capitalism has, it's less common.) 
Real world examples of this parasitism are, respectively: A. Polio. It ravaged humanity to the point where we fought back and are on the verge of wiping it out entirely, like we did with smallpox. B. Ebola, a virus so lethal and so virulent that, while nothing can be done to stop it, except hope the immune system kills it; with a 60-90% death rate, and it's degree of pre-lethal devastation, it cannot spread fast enough to overcome the speed and rate of death and ensures its own destruction. And the reason why I chose viruses for this analogy and not simply go with smallpox and ebola is that viruses serve only one purpose, replicate and grow until it gets killed by its host, or it kills its host and subsequently dies. That mechanism of action, or modus operandi, identical to that of an unchecked corporation. 

If corporations could be trusted to act in the best interests of their employees and the nation, the evil social programs and taxes wouldn't be necessary because if you pay your workers enough to not only survive, but thrive on (within reason), they no longer need social programs and will also be able to buy consumer level goods and services which drive every other industry on earth. It's referred to demand side/demand driven economics. It doesn't turn the greatest profit margins per quarter, but it has the distinct advantage of being sustainable in perpetuity. Every economic problem in history, save the exceedingly rare example, has been due to myopic greed. 

Friday, January 18, 2013

The wealthy cannot obtain an increasing % of the wealth and income without taking it from the workers. Who also happen to be the people whose money is used to keep these companies afloat. People ask, "what need do you have for firearms," when they don't cause violence. Poverty, however, does cause violence and yet no one asks the top 1% or the top 0.1% what need do they have for 8 and 9 figure annual salaries? What need does the average corporate executive (excluding small business) have to justify cutting wages, laying off workers and outsourcing jobs, at the expense of the American economy, so they can increase their wages to a ratio of 380:1 on average for CEOs. (Income inequality is at it's highest in recorded american history, with 1929 coming in second) Why are we giving these people tax breaks both individually and to the corporations when they do nothing but take from the economy? The American production worker's productivity growth rate increased 11 fold in comparison to the increase in their wages from 1979 to 2011. The American worker is producing more and getting paid less for it. And yes, if it continues to happen, one of two things will happen; the economy will collapse as it did in 1929 or there will be armed revolt against the corporations due to repeated and persistent abuses against the workers by the management as was the case in the battle of Blair mountain. You should have to work 80hrs/week just to gape to escape abject poverty because the management would rather pay themselves more money at your expense.

I doubt many people have read the Wealth of Nations. The book that defined modern economics. But let me share a piece of the book. 

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion" — Adam Smith.