Marat Posted February 22, 2011 Share Posted February 22, 2011 I have a few criticisms of Captain Panic's interesting theory. First, it has to be recognized that the category of 'bad investments' can never be radically diminished or negated, since that would be like trying to design a perpetual motion machine by discounting friction. Every economic system necessarily generates friction, and most of what you describe as 'bad investments' are necessary expenditures to address the problems of friction. Thus in a certain percentage of all exchanges and interactions in a capitalist economy there will be disagreements and injuries, and these have to be resolved in a palpably fair and rule-governed way that ensures social cohesion despite these conflicts. The category of worker who deals in the application of these rules to deal with the friction in capitalist exchanges is called a 'lawyer,' so you can't just dismiss them all without losing an essential mechanism for greasing the wheels to reduce friction in the machinery. Similarly, Wall Street is necessary in a capitalist economy to direct the supply of productive forces and surplus capital to where it is needed and can profitably be invested, and without a huge army of experts in addressing the friction created by the resource distribution problem, the machinery of the economy would collapse. So you can't just fire all the stock brokers, commodity analysts, investment bankers, etc., without leaving the distribution friction problem unaddressed. Second, you can't analyze a modern economy simply in terms of tangible productive forces without reference to money, since no modern national economy is entirely self-contained, but rather, all economies operate in interaction with the world economy. The levers which govern the interaction of the national economy with the world economy do not exist in the form of machines, skilled and unskilled labor, or natural resources, but are instead abstractly represented as cash, fluctuating currency values, and debt, so you cannot just consider the economy in the purely material terms your analysis initially proposes. Third, we have to think in terms of the real value for real human beings produced by the economy and not just in terms of total commodity production or total GDP. The idea of 'gross national happiness' as a concept to replace GNP has been proposed recently in an attempt to reflect the fact that what really constitutes the productivity of an economy is its capacity to make the people living in it happy -- rather than just in the total weight of trinkets that can be manufactured and heaped up. By this measure, what you call 'neutral' redistributions of wealth from one person to another can actually be extremely profitable in producing greater amounts of real human happiness, even if they leave to total economy still at the same size as prior to the transaction. Thus, for example, if an individual who now has $10 billion in personal wealth has 1000 units of personal happiness from this (how many pairs of shoes can he wear at the same time? how many rooms of his house can he enjoy at the same time?), and a street person living in a dumpster now has just one unit of personal happiness as a result of his poverty, we can probably raise his happiness to 100 units of personal happiness by transferring to him just $100,000 of the billionaire's money. If we repeat this operation 100,000 times, as we can we the total cash available, then we will have a total of 10,000,000 units of personal happiness at the end of all the exchanges from the rich individual to the destitute ones, whereas before we only had only 101,000 units of personal happiness with exactly the same amount of money. Rational redistribution of wealth to produce greater equality by answering more of the basic needs of people at the cost of sacrificing personal luxuries will always produce a net gain in human happiness with no additional resources. Link to comment Share on other sites More sharing options...
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