Tuesday, March 12, 2019

AOC/socialist ignorance of how capitalism works. Also: automation, philosophy, etc.

Part of me says that it would be to kalon (for the sake of the noble/fine/beautiful) not to speak ill of anyone, an idea that Ben Franklin apparently implemented in his life.  Another part of me says that willful evil should be called out for what it is:

Congresswoman (D-NY) Alexandria Ocasio-Cortez (AOC) is more clever than wise, and not particularly clever at that; she has some facility with the one-liner aimed more toward the viscera than the mind.  How dare the USA, the richest country in the world, let people go homeless.  See?  Just whittle down a morally-socioeconomically-politically complicated issue into a twitter-length soundbite and pretend to have a superior moral compass, as though it's some morally-obtuse conglomeration of usually-rich people on the Other Side that has decided that people will go homeless.  But this is the vision of an infantile mind in search of heroes (the oppressed) and villains (the rich/powerful), not of someone of the intellectual seriousness naturally expected of a congressperson.

Think I'm exaggerating?  Have a look at these latest comments from AOC, at last directly and explicitly taking on the Great Satan of the leftist worldview, capitalism:

"Capitalism is an ideology of capital — the most important thing is the concentration of capital and to seek and maximize profit,” Ocasio-Cortez said. "And that comes at any cost to people and to the environment, she said, according to Bloomberg News, “so to me capitalism is irredeemable."
Although the self-described Democratic socialist stopped short of saying capitalism should be scrapped altogether, she explained that "we're reckoning with the consequences of putting profit above everything else in society. And what that means is people can't afford to live. For me, it's a question of priorities and right now I don't think our model is sustainable."
The congresswoman, who unseated a 10-term Democratic incumbent in a district spanning parts of Queens and the Bronx, said Democratic Socialism is more about the rights of workers than explicitly government-run industries. 
"It’s just as much a transformation about [sic] bringing democracy to the workplace so that we have a say and that we don’t check all of our rights at the door every time we cross the threshold into our workplace," she reportedly said. "Because at the end of the day, as workers and as people in society, we’re the ones creating wealth."
“We should be working the least amount we’ve ever worked, if we were actually paid based on how much wealth we were producing,” she said. “But we’re not. We’re paid on how little we’re desperate enough to accept. And then the rest is skimmed off and given to a billionaire.”

So let's start from the top.  "Capitalism is an ideology of capital...."  This is evidence that AOC never bothered to study the case for capitalism as made by its actual defenders, but rather had read a lot of leftist literature that characterized (i.e., caricatured) capitalism without running it by the defenders for review/comment/correction; she has in mind some bogeyman version of "capitalism" that stresses profits over people.  That is actually very typical of the way socialist and anticapitalist literature has been done ever since the days of Marx, the standard-bearer of anticapitalist polemics.  That capitalism is an ideology of capital and capital-accumulation could be taken directly from the pages of Marx.

If, on the other hand, one were to actually consult capitalism's defenders, one would find reference to the right of private property in the means of production (a misleading phrase if the mind/intellect isn't counted among those means, as Rand in particular counted it) being a necessary material consequent of individual rights, with Lockean property theory as a key historical predecessor to modern capitalist rights theory.  (Note that the typical leftist approach to Rand is to caricature her defense of capitalism and individualism, taking great care to ignore or misunderstand her fundamental identifications about the role of the mind/intellect in human existence.  If a leftist had ever addressed the role-of-the-mind theme central to her thought head on, I'm not aware of that happening.)  The role of capital and capital accumulation is a consequence of the basic idea that an individual's productive activities should ultimately be a matter of that individual's own decision-making, and that includes the translation of that individual's self-initiated mental/intellectual activities into its material consequences.

Without that basic idea involved, one's picture about the nature, logic, and ultimately moral defense of capitalism is going to be distorted.  Certainly, if one fails to include in the category of labor the value-added from mental/intellectual activity, one will misconceive of who generates the value of the resulting material products, and who rightly benefits from that value-creation.  The category of capital as economists define it, has to do with the human-created tools that improve the productivity of labor.  Land (or natural resources) is a pre-existing factor of production that by itself does not generate value-added.  Physical labor by itself has been a factor of production in human history (and prehistory) the value-added of which had been close to static throughout history until the Industrial Revolution, after which living standards skyrocketed.  (Despite all the outcry from socialists/leftists about working conditions in early industrial England, the population of England skyrocketed during that period; life expectancy also rose.  But capitalism isn't about what benefits people, right?)

One key factor of production mentioned in the "labor" and "capital" links in the paragraph above, that does specifically involve the role of the mind/intellect, is entrepreneurship, a factor that leftists seem to appreciate or understand the least.  But an entrepreneur does often have to secure financing from capitalists, and it's these capitalists who are treated as the primary villains parasitical on the wealth-creation processes they're financing.  Or, at least it's people acting in the capacity of capitalists ("qua capitalists") who are parasitical and non-value-added-generating.  There are, after all, entrepreneurs who are also capitalists, Bezos being an example (being CEO of Amazon as well as roughly 1/5 shareholder).  There are also financiers with special unique financing talents who might be categorized as entrepreneurs of finance who, qua entrepreneurs, generate value-added over competing financial talent, but who qua capitalists, don't generate value-added (according to the leftist narrative).

Ultimately, it's this category of capital itself that is problematic under the leftist analysis; it increases the productivity of labor and yet how does category of labor not receive the full return on that productivity; how is it that this "surplus value" is "skimmed" off by owners of capital (qua owners of capital)?  The "pure" capitalist is one whose investments are of minimal risk (hence no risk premium that would "accrue" to investors in stocks), and basically reduce to collection of interest (or rent).  And supposedly that's just not fair.  Even though in its pure interest-form it's the result of a person using savings from previous income rather than consuming it.  And in "the ideology of capitalism," an individual has every right to save some income and collect interest as a result, if someone is willing to pay interest.  Somewhere in that transition from being a consumer to being a pure capitalist there is something sinister going on, in the leftist mindset.  If, say, you lend a (saved) portion of your income to an entrepreneur, who labors to generate profit, some portion of that profit goes to the saver: "created wealth has been skimmed off by a capitalist!"

Now, if you accept the narrative that something unjust is going on here in principle, you may well have a distorted understanding of the way the world works.  And that's even just using the "pure interest-gathering capitalist" example; the unique talents of entrepreneurs (Bezos), financiers (Buffett), etc., only begins to show that the rich often got that way by means of mental/intellectual talents that few possess, benefiting all sorts of others who don't possess that level of talent, and they didn't do so in the role of pure capitalist collecting interest on savings (which they could have consumed, etc.) that still increases the productivity of industry.

If, contrary to all economic logic and historical fact, what happens instead is that capital (qua such) increased the productivity of labor a ton and yet the category of pure labor (let's call it unskilled labor) had remained compensated the same as before, we might then say that "labor created all that extra wealth but only capital got the rewards".  (Again, one is distinguishing here pure-Moneybags from the Hank Rearden whose intellectual talents are in effect a gift to his steel workers.)  Indeed, that's the picture/scenario that Marx of Capital fame would have us believe: the ever-increasing (or never-improving) immiseration and impoverishment of the laborer/proletarian.  Except that even in his lifetime it would be next to impossible for Marx not to have been confronted with evidence that this was not happening - namely, the rise in wages in England especially after 1850.  But whether Marx acknowledged such evidence is another matter.  If he didn't, he would be a standard-bearer for how socialists/leftists have acknowledged (i.e., failed to acknowledge) evidence ever since.

(A more intellectually honest concern in this regard would have had to do with whether the vastly-expanding population in England would lead to a Malthusian trap in which population increases would always push wages to subsistence levels even as the capital accumulated and increased the total GDP, generating ever-larger returns to capital.)

Now, none of this should be any news to serious students of economics.  Any Marxists with minimal intellectual seriousness or integrity would have had to confront all these points at various times throughout the last century and a half.  It's not evident that AOC seriously considered any of this, but rather is spouting talking-points she would have gotten from being immersed mainly in leftist literature.  But what makes her case particularly egregious is that she has an econ degree, and yet she doesn't manifest awareness of what I just said is not news to serious students of economics.  In other words, she knows better, or ought to know better.

Now, there is one point where AOC gets into a more moralistic frame of mind above - although it's not unrelated to the strictly economic points - and I'll requote her:

"It’s just as much a transformation about [sic] bringing democracy to the workplace so that we have a say and that we don’t check all of our rights at the door every time we cross the threshold into our workplace," ...
One might refer to the moral issue raised here as the "what about the economic autonomy of those lower down the economic food chain" problem.  This is not one where I have an easy answer, given my professed devotion to the ideal of human flourishing or eudaimonia or self-actualizing (of which productive autonomy would be a part).  In saying that the answer here isn't an easy one, we're back to that original problem of AOC turning a morally-socioeconomically-politically complicated issue into an easy-sounding soundbite.  What does "bringing democracy to the workplace," for instance, require in practice?  Amazon (which AOC uninvited from her home city, so to speak) has an organizational structure where Bezos does work that no one else can do (else they would be doing it), and on what basis should he be taking orders from anyone else?  He does take orders -- from customers.  Leftists are really big on championing "the workers" and yet what do they think about customers?  Mises, to name a leading actual defender of capitalism, was really big on how the captains of industry must ultimately answer to customers.  Leftists seem to be lax about unionized industry that ill-serves customers.  (One thing about the public sector: does it have customers, exactly?  If not, does that distort incentives to serve the . . . not customers, exactly, but citizenry?)  Bezos does also have to answer to the shareholders, the financiers, but how do financiers make their money unless their financed enterprises serve the customers well enough?

(One leftist move is to replace "customer" with "consumer" and then bash "consumerism" as some byproduct of capitalism - which it may well be the case if we treat the economic as explanatorily-primary substructure and culture as superstructure.  But I find that explanatory materialism plausible only as applied to primitive, prehistorical, or early-historical humanity, before the advent especially of philosophy.  If we were to take seriously the original Marxoid historical materialism, in which "the class which has the means of material production at its disposal, has control at the same time over the means of mental production," then we'd have to believe that the bourgeoise controlled whatever came from Marx's own head.  Anyway, it's philosophy that would make people less consumerist and materialist (in the other sense, i.e., pursuing material possessions as a way of life).)

Attempts to implement alternatives to capitalism as mode of production all inevitably run into the very same set of problems that socialists cite as problems with capitalism.  (Which is to say in another way that the economic isn't explanatorily primary in the human condition.)  Let's say that we could even somehow "make the workplace democratic" in a serious sense of that phrase: that means that control of one's productive life is in the hands of a majority and not oneself.  How does that solve the worker-autonomy issue?  It can't be solved by placing such decisions in the hands of commissars and bureaucrats as under the state-run models.  Or, let's say that Amazon is "democratized" so that the shareholders and board of directors are replaced by "the workers" as primary decision-makers: where does Bezos then fit in?  Surely "the workers" want the best decision-making for the company they can hire out, and surely they wouldn't want the unique talents of a Bezos to go to waste.  (Right?)  So how does Bezos not not remain CEO, making his billions (in one form of compensation or another, be it via capitalist ownership of company value or an entrepreneurial salary) as before?  And once you start delegating things like that, rewarding for marginal value-added as a result of division of labor and specialization of talents and comparative advantage (hey, I have an econ degree, too...) and other related ideas (I did say that the moral issues involved are not unrelated to the economic ones, and if AOC's economic ideas are distorted here then her moral ones will be as well...), how does the socialist ideal not "devolve" ultimately back into capitalism?

What if "a worker" decides to save money and lend it at interest?  What if "a worker" decides to save up and start a business and hire whomever is willing to join the firm?  That doesn't sound "democratic" but it sure sounds like freedom and autonomy.

I think the (apparent or real) lack of autonomy that AOC sees in some fashion or other in capitalist enterprise has not just to do with the "hierarchical relation" involved, but with something about the human condition generally, or at least something about the condition of those with the least  productive or most easily-replaceable skills (and therefore very limited bargaining position), and it's not clear or easy to see how a reform of the mode of production is going to solve that.  If someone does have very minimal skills, is it a good idea to make them part of the "democratic" decision-making process, or are such decisions better left to others?  (What would Aristotle say about that?)

What if the limited-seeming autonomy of "the (lower-skilled?) worker" involved can be remedied to a considerable extent through philosophical education (preferably starting at as young an age as feasible)?  What if part of such education is learning in the art of eudaimonia to the extent that a person's talents can make happen?  Presumably, at least at the margins, such an education would enable more people to become less reliant upon others for making, e.g., entrepreneurial decisions for them.  Certainly it's nothing new that upgrading skills is a way for people to improve their economic situation (including their sense of autonomy), and the art of science of eudaimonia would be the most comprehensive approach to upgrading skills in life.  But note that the art or science of eudaimonia is a specifically philosophical enterprise - it is about how to organize one's life best - and that is explanatorily prior to the economic.

BONUS/ADDENDUM (with more positivity/less polemical focus):

The explanatory primacy of philosophy in human life comes to the fore when AOC discusses the topic (in a stopped-clock-is-right-sometimes kind of way) of the consequences of automation, also quoted in the linked article:

“We should be excited about automation, because what it could potentially mean is more time educating ourselves, more time creating art, more time investing in and investigating the sciences, more time focused on invention, more time going to space, more time enjoying the world that we live in,” she said, according to The Verge. “Because not all creativity needs to be bonded by wage.”
It ought to make one wonder how AOC can think of capitalism as such a shitty and irredeemable system when it's bringing about greater amounts of automation.  (This is evidence she just doesn't think this stuff through.)  Okay, even if she wasn't going to credit automation to capitalism, it doesn't look like capitalism is getting in the way.  Anyway, philosophy has to be explanatorily basic here because only it could best guide us in what to do with all that leisure time that automation would create.  It also has to be explanatorily basic when it comes to what exactly humans are going to do with their creative intellects once AI is capable of doing the same things human intellects can do and then some.  Think about the problem (if it is one) of automation making even a Bezos's skills no longer so unique that he would be in the category of "skilled labor" any longer.  What do we do with the free time that AI can't do?  Where do we go from there?  What autonomy could we really enjoy at that point, if delegating decision-making to more superior-skilled entities (agents?...) reduces one's own autonomy?  I mean, AOC/socialists' main complaint against capitalism is that it's "an ideology of capital" in which the human is subordinated to this inhuman machine, "capital," with its own logic of accumulation, etc.  What about what I'll dub "the ideology of intellect" which would make at least conceptual room for the human intellect to be subordinated to the intellect of AI machines.

The logical outcome of this would seem to be that we become "one" in some way with AI - in essence, to upgrade our human systems with AI tech.  Kurzweil notes that this is a point at which "humans transcend biology", although I'd like to raise the question: didn't humans begin "transcending biology" the moment they started using tools in any sophisticated way to improve their productivity beyond what their physical frames themselves could accomplish?  (Capitalism would only further facilitate advanced tool-usage.)  And so we've only been getting more and more sophisticated over time in transcending our biology?  Or is "biology-transcendence" more specific, i.e., we would no longer require a carbon-based substrate to sustain our (primarily intellectual?) lives?  (What happens when AI takes on the task of doing the most intellectually sophisticated of activities, such as philosophy?  "The highest responsibility of AI-philosophers is to serve as the guardians and integrators of AI-knowledge." -- AI-Rand?)  (And "we" are worried about how climate change might make our lives un-livable?)  And how would any of this eliminate the need for individual rights, including property rights in some form?  Are we to assume that "post-scarcity" post-humans would abandon the concepts of "mine and thine," the ultimate socialist ideal realized at last?  Somehow I'm skeptical.  But - just as it is today - the question of "mine and thine" in an ownership-rights sense would, in this AI-directed future, take a backseat to more philosophical-hierarchically basic matters such as life's meaning.  Or would hierarchical primacy take on a different form by then?  But given the place of philosophy in the hierarchy of knowledge, how would it?