Adonis Diaries

Posts Tagged ‘means of production

Can Capitalism be reformed? Part 1 of 4

Capitalism is based on four  foundations:

1. Private property of means of production;

2. free exchange (products, services…);

3. open free market for commerce;

4. and availability of a vast pool of people willing to work for salary.

The main driving force is that the owner of the means of production (the bank, the partners, the shareholder, or the family)  should earn as much as the total salary that all workers receive.

Consequently, an employee is hired when the owner can generate profit, at least as equal to the total salary of the hired worker. Actually, members of the Board of Directors, owners of majority of share, and the highest in the hierarchy get first cut on 20% of the total revenue, and not on the gross profit basis as employees, workers…have to negotiate on.

The foundations of capitalism have proven not to function except within strong State institutions, which are almost totally controlled by the capitalist classes.

The judicial system obeys laws decreed by parliaments that are dominated by the richest classes, and the executive is intrinsically dominated by the aristocratic class.

This whole political system is called “capitalist democracy“, where people have the illusion of electing their representatives for a duration.  After election, people are to behave as spectators:  Any serious disturbances are crushed in the name of Law and Order.

Communism tried to abolish the first foundation by claiming that all means of production belong to the State (community property of means of production was a smoke screen and never taken seriously).  Communism also abolished the notion of internal market free exchange by the communes and State institutions:  the central plan or economic program for five years must be met at any cost to pain, suffering, and famine of the population.

Communism went even a step further by eliminating the right of citizens to quit the factory assigned to, move, and relocate to other places in the nation.  Basically, communism drastic economic ideology ended up destroying the foundations of capitalism until it was too late to changing people’s inclination to relying completely on State planning and resource distribution.

In this century, Western European States learned to reform capitalism by involving the government in instituting equitable wealth disparity (tax increase on the rich), encouraging barons of industries to negotiating seriously with syndicates, regulating the liberty of patrons in firing employees, and supporting unemployed until they find a substitute job.  These European economic capitalist systems are labelled “socio-democratic capitalism“.

China has reformed its communist economy one step at a time.  First, it allotted lands to family peasants to exchange the produce with the community; it worked and frequent famine occurrences receded.  Then, communist China allowing private ownership of means of production (and the subsequent financial facility supports) and then encouraging limited internal free exchange and commerce.  Workers are still not free to choosing where to work and to moving to other cities:  Movement of people are regulated.

Rural China is paying the heavy tax in hunger and suffering from the diversion of water and electrical power to the cities and industries and the building of giant projects that pollute and contaminate water resources.

The one foundation that all developed economic systems share is free global trade, which means the liberty to exploiting the developing countries in natural resources and cheap labor.  The developed States are allowed to subsidize their agriculture but the developing nations are not to do it and they cannot even if they witness the need to do it .  The developed States are to flood the markets of developing countries with affordable products with no “legal rights” for the developing nations to increasing import taxes in order to safeguarding their own means of productions.

The developed States can find financial resources at low-interest rates but not the developing nations.  In return for blatant exploitation, the developed States agree “voluntarily” to setting aside a small fraction of their GNP to developing the infrastructures in the poorer States; mainly, self-serving their interests to improving and facilitating exploitation efficiently.

Worst, all “international” institutions such as World Bank, International Monetary Fund, Commerce Trades are dominated by the US and a few European States; thus, transparency and access to timely information and intelligence data are denied the developing nations, or leaked slowly after persistent demand from conscious States.

Fact is, financial institutions (banks, insurance companies…) are the real owner of means of production in capitalist systems.  They own 30% of the total wealth of a nation and represent only 1% of the population.

This is NOT acceptable.  Fact is, financial institutions generate three times more money than the combined tax collected by the government.

This is NOT acceptable.  Any reforms should first target the level of profit that financial institutions are permitted to generate.  “Effective” interest rates should be lowered accordingly and tougher regulations imposed of these behemoths.  Community banks with excellent transparency in decision process and lending policies should be the norm.  The current status of financial institutions is generating abnormal profit with no risks whatsoever.

If capitalism needs salaried people it must secure the fundamental right to work, a wide range of jobs that satisfy varied opportunity, access to affordable education, safe workplace, universal health coverage, caring for the elderly, and justice for people who worked most of their life for a comfortable retreat.  Has capitalism satisfied the basic needs of its workforce?

States should start taxing according to the number of employees hired and to net revenue:  These two criteria are the most objective representatives of net profit and are easy to investigate and account for.

This gimmick of taxing on “net profit” is an accounting fraud that is not objective or fair.  Companies relocating for cheaper workers must be taxed according to the original “national wages” of the workers.  Companies substituting workers for robots should be taxed according to the number of workers substituted.  States will then be able to subsidize unemployed people until they find jobs and be imaginative enough to opening up newer job opportunities.

There is a trend for owners with strong ethics and moral to including employees as shareholders and participating in management decisions:  These companies are doing very well and not suffering from financial crashes.  Institutions and companies for profit are amoral and do not deal in ethical conducts.

Ethics and morality are individual characteristics:  the more such individuals gather in groups to reclaiming fairness and justice in actions the more institutions will be reminded of what is best for society.

The crux for any serious changes in capitalist system is revamping the election laws and processes that will extend much better odds for middle and lower classes to being elected into representative chambers.  (To be continued)

Cases of “Historical Dialectics” of human and knowledge development; (Dec. 23, 2009)

            Dialectics is not only used to comprehend historical development of human or knowledge development but is basic in discussions and effective dialogues. Hegel was first to introduce “dynamic logic” and used the term of historical dialectics as the interaction of an extreme opinion (thesis) that generates an opposite extreme counter opinion (antithesis) which results in a consensus (synthesis).  Historical dialectics is a macro method for long range study and it does not explain the individual existential conditions (survival situations).  Hegel offered dialectics as a method for explaining how human knowledge developed by constant struggle between contradictory concepts among philosophical groups. The purpose of his method was to demonstrate how the “universe of the spirit” or ideas managed to be raised in human consciousness.

            Before I offer my version of knowledge development it might be useful to giving a few examples of historical dialectics. In Antiquity, the pre-Socratic philosophers were divided between the Eleatics or philosophers who claimed that change of primeval substances was impossible: we cannot rely on our senses.  Heraclites reacted with his position that we can rely on our senses and that everything in the universe is in a state of flow and that no substance remains in its place.  The synthesis came Empedocles who claimed that we can rely on our senses but that what flow are the combination of substances but the elementary particles do not change. 

            The Sophists during Socrates were the paid teachers of the elite classes and tore down the mythological teaching of the period and focused on improving individual level of learning.  They were in effect in demand by a nascent City-State democracy of Athens that relied on a better educated society to participate in the political system. Socrates reacted by proposing that there are fundamental truths and knowledge is not an exercise in rhetorical discourse. The same dialectics worked between the world of ideas of Plato and the empirical method counterpoint of Aristotle.

            In the Medieval period the Catholic Church set up a barrier or distance between God and man and forced people to believe that all knowledge emanates from God.  The Renaissance man (wanting to be knowledgeable in many disciplines) reacted by promoting the concepts that God is in every element, that man is a complete microcosm of the universe, and that knowledge starts by observing nature and man.

            Another example is the position of Descartes who established that rationalism was the main source for knowledge.  David Hume responded by extending that empirical facts generated from our senses are the basis for knowledge. Kant offered the synthesis that the senses are the primary sources for our impressions but it is our perceptual faculties that describe and view the world: there is a distinction between “matter” of knowledge or the “thing in itself” and “form” of knowledge or the “thing for me”. Kant became the point of departure for another chain of dialectical reflections.

            Many philosophers used the dialectic methods to explaining other forms of development.  Karl Marx wrote that Hegel used his method standing on its head instead of considering human material conditions. Marx claimed that “philosophers have only interpreted the world; the point is to change it”; thus, he defined three levels as basis of society: condition of production (mainly the geographic, natural resources, and climatic conditions), means of production (such as machineries and tools), and production relations (such as political institutions, division of labor, distribution of work and ownership). Marx claimed that the main interactions are among the working class (the new slaving method of production) and the owners of the means of productions or the ruling class: it is this struggle that develop the spiritual progress.  Another dialectical process is the extreme feminist political claims of equality between genders which brought about a consensus synthesis for a period.

            My view of progress is based on the analogy of combination of two schemas:

            The first schema is the coexistence of two strings of evolution (picture a DNA shape): the knowledge development (mainly technological) and the moral string (dominated mainly by religious ideologies).  The second schema is represented by historical dialectic evolutions in the shape of helical cones. The time lengths of cycles for the two strings are not constant: the technological progress phase has shorter and shorter cycles while the moral string has longer cycles.

            The two strings are intertwined and clashes frequently.  When one string overshadow the other string in evolution then there are a slow counter-reaction culminating in stagnate status-quo phases between the two forces. Technological or level of sustenance period has time length cycles that is shrinking at the top of the cone before the cone is inverted on its head so that the moral time length cycles start to increase and appears almost invariant (that what happened in the long Medieval period that stretched for over 11 centuries in Europe); then the cone is reverted on its base for the next “rebirth” cycles (for example the Renaissance period that accelerated the knowledge string ascent).




September 2020

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