TO: Wim and Platt
From: Roger
Wim, thanks for the deeply thought out responses. I continue to find your
insights fascinating and rewarding.
WIM:
The infrastructure that was created then (dykes,
polders, canals etc.) still underpins my wealth; my wealth owes
relatively little to my virtue and I am ashamed that the same
amount of effort yields me so much more wealth than it does for
instance an Afghan peasant.
ROG:
I don't get the shame thing. The qualities such as health, wealth, knowledge
and opportunity are greatly facilitated -- even amplified -- by cooperative
social interaction. When I see successful cultures, I rarely find the
success (at least long term) comes from exploitation. It comes from synergy.
It comes from investing in infrastructure and education, from developing
mores, values, codes, rules and systems that enforce cooperation and healthy
competition and that limit exploitation. The Dutch have self organized
successfully. The Afghanies have not. Whether the Afghanies' failure is due
to internal or external problems or a combination of both I can't say. I can
give them suggestions though.
WIM:
The wealth of the cities was also underpinned however by
industrious, resourceful, freedom-loving and creative Dutch
peasants. If they were less so, that was mainly due to the fact
that they could (at the point of a musket) only enter the cities
(with their educational opportunities) when they paid an entry
tax. Most of them could only afford to pay that tax if they
produced and delivered goods and services the city-dwellers
needed (for instance dairy products and vegetables). They were
not entirely free to exchange their goods and services for those
of the cities at an exchange rate that would have yielded them
the same wealth for their efforts, for they had to pay the tax.
And there were more "mechanisms" putting peasants at a
disadvantage. Another one worth mentioning was the relative
safety of property within the walls and canals of the cities. The
cities "bought" this safety from the ruling nobility who were
dependent on rich city dwellers for credit, as they were always
short of money to finance their wars, that were increasingly
fought for them by mercenaries. So the pattern that concentrated
wealth in the cities was a pattern that exploited Dutch peasants.
They were more dependent on the markets in the cities to sell
their produce than the cities were on buying from them. For sure
they were better of than peasants without a city nearby, but they
were nevertheless exploited in the sense that their efforts
yielded less wealth than those of city-dwellers.
ROG:
I admit to being guilty of using the EXPLOITATION word. (In other words,
Platt should blame me) I find it really does sum up unhealthy activities
such as theft, violence and restrictions of freedom that destroy the creation
of value. The strong can and frequently do exploit the weak. The strong
benefit themselves short term at the expense of the weak and at the expense
of the synergy within the society that inevitably leads to value creation.
However, there is somewhat of a grey line between exploitation and degrees of
cooperation. Voluntary interactions can differ dramatically in the relative
benefits of the parties. Some of the "mechanisms" you reference certainly put
peasants at a disadvantage and some undoubtedly were downright exploitative.
Long term, those cities that created the greatest degrees of freedom and
fostered the most synergy and the least exploitation became the strongest.
Their cultures spread while less successful city-cultures atrophied. In the
end, England's culture proved more healthy than the Dutch and the Industrial
Revolution and social quality blossomed best in England. (The Dutch were
still much more successful than most of Europe though.)
I guess my point is that the exploitation of peasants wasn't the cause of
social progress as much as it was a limiting factor.
WIM:
International trade in staples
not only made Dutch cities less dependent on their own
countryside (underpinning the exploitation of Dutch peasants). It
also enabled for instance the nobility of Eastern Europe to make
money from renewal of serfdom, coerced cash-crop labor using the
legal system of previous feudalism.
ROG:
I guess you are saying that the VOC power from international trade allowed
the Dutch nobles to be less dependent on the peasants and empowered them to
exploit their people. Similar -- even greater -- exploitation occurred in
Eastern Europe. My thesis is that this is part of the reason that success
shifted across the English Channel. Exploitation holds cultures back. The
greater the exploitation, the less progressive the society (to oversimplify).
WIM:
This is a story of how Dutch wealth was initially created, a
story in which both local and international exploitation have a
essential roles. A similar story can be told for American wealth.
But first some conclusions from my story:
- It is not a story in which some baddies can be blamed for
harming
others, because of their "greed" or otherwise. It is a story of
social interaction in which (as an almost general principle)
small initial differences are stabilized and reinforced.
ROG:
I come to the opposite conclusion. This is how progress was stymied.
Exploitation does not lead to long term wealth or progress, it leads to
atrophy and decay.
WIM:
- From the 16th century on social interaction became more and
more global. Globalization started back then!
- Because of the growing division of labour, mainly
intranational, but international as well, no nation, defining
itself as a "society", can tell less privileged "societies": "we
are wealthy because of our 'free and competitive environment' and
you are not because you are 'centrally commanded, non fragmented,
non competitive'". Globalization has made them both part of the
same society and the different "environments" in different parts
of that society have come into being simultaneously and because
of mutual influence.
- It is a story of ... a social pattern of values unfolding of
which both wealth and poverty are elements. The best way I know
of showing you this pattern is by referring you to the film
"Powaqqatsi", see us.imdb.com/Title?0095895 . Please see it.
ROG:
I am a big fan of Phillip Glass and have seen the movie. Not sure what to say
though on your summary. Certainly societies blended and interacted. Certainly
a society can exploit another or enable the powerful of that society to
exploit the weak. Certainly there is a degree of luck to it. My point is
simply that there are patterns of quality and patterns of failure. On the
side of morality are freedom, cooperation, synergy, investment, rule-of-law,
education, suppression of exploitation, infrastructure and competitive
fragmentation. On the side of immorality are ignorance, thuggery, failure to
invest and establish dynamic systems and organizations, and centralized
control/decision-making.
WIM:
I guess you will have understood that 'Marxism' is such a system
of ideas developed on behalf of the underprivileged to legitimize
redistribution. Did you know that 'serfism' after say 1500 AD is
a system of ideas developed on behalf of the privileged of the
"globalizing" European society, serving not only the interests of
Eastern European nobility, but also those of Dutch merchants and
Western European city dwellers more generally? (Without it, they
would have had their grain less cheaply.) Do you recognize that
'free enterprise global economics' is a system of ideas developed
on behalf of the privileged to legitimize their (my and your)
privileges?
ROG:
No, I see it as a set of ideas to increase the success of a society. Free
enterprise, democracy and science are the three great decentralized,
competitive/cooperative breakthroughs of the enlightenment. They are the
great ideas. At issue isn't "legitimacy," but rather Quality. (And I actually
have read about Marxism -- just in a critical way)
WIM:
The rise of industrial capitalism was impossible without the
expansion of the "world economy" to Africa and Asia and the
division of labor between peripheral (colonized) and core
(colonizer) areas: production of raw materials with unfree labor
versus production of industrial products with more skilled and
therefore necessarily more free labor. Only then, in the 19th
century, did "free trade global economics" overcome
"mercantilism", at
first only in England. Being hegemonic, it served them well.
American economists of that time still favored more protectionist
varieties of "classical economics".
ROG:
I think the expansion of capitalism to a larger field certainly empowered it.
More people specializing in more ways with a wider range of materials and
resources. I am not convinced that exploitation, slavery or protectionism
actually contributed to the success of free enterprise. Longer term, they
were harmful. (I suppose they could have given capitalism a temporary boost,
but this is debatable.)
WIM:
- Indeed wealth and its accessories are at first created in an
innovative way. The new wealth is however immediately used to
defend the advantages and to prevent others from following the
recipe.
- Wealth implies power (in every conceivable form) and more often
than not induces exploitation of differences in power to
unbalance wealth distribution even more.
- Wealth implies status in a globalized social pattern of values
and status is defended.
ROG:
I of course agree. The riddle each society has to solve is how to allow
wealth and power to be created, but not abused. Those in power tend to
maintain the status quo and to stiffle progress.
WIM:
- A powerful tool for wealth creation is division of labor (both
national and international). Division of labor implies patterns
of dependence, patterns of specialisation that can only be undone
at a cost. Economic specialisation "values" (in a MoQ-sense)
specific cultural and political forms that impede following
"recipes" from elsewhere.
ROG:
I think you are probably correct that some types of specialization are
inherently more self-reinforcing than others. I also agree that the recipes
need to be tailored to the specific culture and to its current state of
development. However, I believe there are broad patterns leading
consistently to social quality and broad patterns leading consistently to
disaster.
WIM:
- International exploitation can't be controlled with traditional
(national, political and cultural) means in a "world economy". (A
world economy consists of competing core states that have a
division of labor with peripheral areas.) Even if international
exploitation (compared with national exploitation) can only
siphon off limited amounts of wealth (because of distances and
cultural defenses against strangers based on distrust), the lack
of a global political and cultural system prevents periodic
redistribution. Both the amount of wealth and the inequality of
its distribution in a "world economy" can therefore be much
larger than in a "world empire" (like the Roman or the Chinese
empire) that is not based on division of labor and on
exploitative economic relations but on political and cultural
unification and on tributary relations
ROG:
I don't see globalization in the same light. I see international
corporations as offering something of value to 3rd world nations. They
provide employment and economic knowledge and contribute to the creation of
the fundamental infrastructure. Successful cultures have been able to
leverage this to their own success (Taiwan, Korea, Hong Kong, etc)
I see disfunctional societies primarily as their own worst enemy. They do not
have the cultural values to capitalize on the opportunity, and they are
routinely exploited by thugs (most of whom are local)
WIM:
in the process the USA had acquired -almost
uniquely in the world- half a continent and vast natural
resources to explore and exploit.
ROG:
I would replace the word exploit with "capitalize upon."
WIM:
Wealth as a rule is created by co-operation and distributed in
competition.
ROG:
I believe wealth is created through knowledge, including the knowledge
embodied in the social patterns and values of a culture. Cooperation and
competition are the mixed fuel of this process. Alone, each would lead to
excess, but together they create balance. Together they generate a virtuous
cycle of stability combined with continuous advance.
WIM:
"Free enterprise economics" wrongly assumes that anywhere
circumstances can be created in which wealth can be created in
competition while retaining enough co-operation. "Free enterprise
economics" does not take into account the disruptive effect of
competition on the ability to retain enough co-operation in the
areas and among the groups that initially in that competition.
The amount of competition that can easily be accommodated in a
core state with a generally co-operative environment, cannot be
accommodated in a peripheral area. Competition can be
accommodated by the creation of nation-states that redistribute
enough wealth internally top keep geographically included losers
contented and that geographically exclude the other losers.
ROG:
Hmmmm In light of what I have written above, what are you implying? You have
lost me.
WIM:
Wealth is created at a cost.
- Not only a cost in human effort, but also a cost in natural
resources.
- Part of the effort and part of the resources don't contribute
directly to wealth creation. Part of it is invested in "capital"
(means of production, know-how, infrastructure etc.). Another
part produces side-effects (desirable side-effects like social
status and psychological well-being for the producers and
undesirable side-effects like pollution, waste and disruption of
eco-systems and ot the esthetical value fo the environment).
- Wealth creation not only involves costs, it also occupies non
depletable givens like space and (relatively unique) locations.
E.g. a natural harbour or a location favorable for creating an
artificial one can only be utilized by a limited number of
people, depriving others of that opportunity.
- To the extent that natural resources are not automatically
renewed at the same speed of being depleted, some-one has te bear
the burden of renewing them or the loss in value from not
renewing them, it not now, than future generations.
ROG:
If the cost is greater than the benefit then wealth has not been created, it
has been destroyed. (I guess I agree with you)
WIM:
Creation of wealth is -ever since the garden of Eden- essentially
and necessarily a co-operative effort. Since say 1650 it can only
be really understood as a global phenomenon. If wealth falls to
some more than to others no system of national of business
accounting can unravel to what extent this is proportionate to
relative virtue and to what extent this is a result of unequal
and unjust distribution of wealth, effort, resources, capital,
side-effects, opportunities and the burden of renewal of
resources.
ROG:
I am not following you here. I do not believe "relative virtue" is an issue.
Successful patterns lead to improved quality, and unsuccessful patterns lead
to stasis or decay.
WIM:
Any attempt to blame either the winners or the losers
for the obvious imbalance and its negative consequences is
ideological in the usual pejorative sense. Neither ideology
(system of ideas) will change the world to the better, for both
are intimately linked to specific positions in the status quo by
the dominant "grammar of production of meaning" (ideology in the
sense of the critical semiologists) which is -in MoQ-terms- the
dominant intellectual pattern of values, as I explained in my
8/10 23:35 +0200 posting to Sam. Bo's recurrent idea that the MoQ
will change things for the better (21/10 9:16 +0200: "the Western
sphere is the next candidate for a quantum jump into an
easternlike insight and the MoQ is the WAY.") is the same kind of
wishful thinking which Marx and most Marxists displayed by
predicting socialism (and subsequently communism) as an
inevitable sequel to capitalism. The MoQ is at best a basis (as a
"metaphysics" is only a "first theory") for that quantum jump.
ROG:
Huh? I have absolutely no idea what your second sentence means. I will state
though that the issue isn't "blame," it is whether the ideas have Quality or
not. If they do have Quality, there is value in a society embracing
responsibility and there is very little value in embracing victimhood. The
former leads to a virtuous cycle of progress, the other tends to lead to a
viscuous cycle of failure. It is really a pragmatic issue.
I don't see any startling breakthroughs offerred by the MOQ. Some good
insights perhaps.
WIM:
So, yes, I agree with you that the "hypothesis that successful
economies arise from the flocking of the greedy" is "kind of
silly, though ... there" is "a bit of truth to it.". It was a
tease meant to show that your idea of 17/9 21:15 -0400 "we are a
very wealthy people .... due to our values of ... freedom and
creativity" is equally silly and only partially truthful. Both
are simplistic SOM-based causal explanations.
ROG:
OK
WIM:
You wrote 29/9 19:00 -0400:
"I would rather be at the mercy of free enterprise and various
(though limited) competing options for employment or self
employment than at the mercy of a government bureaucrat forcing
me to take it or leave it at the point of a gun."
I hope it has become clear to you, that neither you nor I have a
choice within the dominant social pattern of value. It just
depends on the historical phase of development this pattern is in
and on the geographical spot we happen to be born on. Both areas
with "free" enterprise and centrally commanded "economies" are
necessary parts of the present world system, or at least were so
until 1989 (the falling of the Berlin wall). Even in that world
system they are not the only alternatives.
Yes, I value my present birth place in a "free" enterprise (core)
area with an acompanying properly functioning state over a birth
place in a "centrally commanded" (semiperipheral) area. But I
would still prefer such a birth place in a "centrally commanded"
area over a birth place in a peripheral area, where the very
weakness of the state (whether it is nominally socialist or
capitalist orientated) puts me "at the mercy of world market
conditions", which I am not now and would not be in a
semiperipheral area either.
ROG:
Of course none of us has unlimited freedom of choice. But we do have
influence on our alternatives. Knowledge is a measure of this ability.
Disfunctional social patterns are not a "necessary part" of the present world
system.
The question is not which of these 3 locations we want to be born in, the
question is which course of action those born in each should adopt. I believe
the solution is to take responsibility for the future, and to experiment with
the broad course explained above. (Cautiously protecting what we do right and
correcting what we do wrong, and at all times trying to refine our knowledge
and improve our solutions.)
Let me know your thoughts, as I will keep an open mind.
Roger
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