Paul Mason: The Latest Pied Piper of "the Death of Capitalism" • Gary North

Here is a deeply penetrating review and deconstruction of Paul Mason's article "The end of capitalism has begun" in the Guardian.

I agree with North here which shouldn't surprise anyone and I am curious how true believers will refute his specific charges of intellectual dishonesty and short-sightedness.



Paul Mason: The Latest Pied Piper of "the Death of Capitalism" • Gary North

It never ceases to amaze me how people who cannot think straight can come up with new justifications for whatever worldview they decided at 20 was correct, and which did not pan out. They keep changing the reasons for their grand scenario, but the scenario never changes. It is always this: "Capitalism is just about to die. But this time, we will not have to go to the barricades. It will all be easy-peasy. We don't have to risk anything. It's all built into the mode of production."

This is Marxism without courage. This is Marxism without revolution. The argument from the mode of production is as empty analytically as Marxism was from the beginning, but at least Mason's screed is written in English, not English as a second language, which Marx wrote in. (If you ever read anything lively or even insightful written by Marx, you can be sure that it was one of Engels' ghost-written essays.)

Here, I dissect Mr. Mason's article, not because he is worth refuting for his own sake, but so you can see the pathetic quality of his arguments. Yet he is regarded as hot stuff in the English Left community. The Guardian has baptized him. He is the latest and the greatest. He is the last man standing. Of course, when his new book sinks without a trace, there will always be another last man standing.

It's not easy being a Leftist under 80.

He begins where every Leftist should always begin his analysis: the betrayal of socialism by socialists. This is where Marx usually began, most famously in the Manifesto of the Communist Party (1848). (By the way, this also is where all conservative analysis should begin: the betrayal of conservatism by conservatives.)

Mason at least admits that socialism is now a spent force. The capitalist mode of production did not cause a communist revolution, contrary to Marx. Democratic socialism has also failed to displace the capitalist elite. Socialists never did come up with a blueprint for how their system could deal with the problem of scarcity. None of them ever described in detail a socialist incentive system that will rationally allocate wealth, and will also maintain economic incentives for high productivity -- incentives that will match, let alone exceed, capitalism's incentives.

This was openly admitted in 1990 by Robert Heilbroner, the multi-millionaire socialist economics professor, author of the best-selling history of economic thought, The Worldly Philosophers. He wrote an obituary: "After Communism." It was published in The New Yorker (Sept 10, 1990). In it, he wrote these words: "Mises was right." Right about what? About the impossibility of rational economic calculation in a world without private property and capital markets. He then called for the next phase of socialism, one which will be based on environmentalism, not economic theory. He said that only by mobilizing the masses behind the idea that the government should intervene in order to save the environment, could socialism once again gain a hearing. Otherwise, the movement was dead.

A little over a year later, the Soviet Union ceased to exist. That was the last hurrah for Marxism, unless we count North Korea.

His third erroneous conclusion has to do with the structure of capitalism. He thinks we are headed for decentralization. So do I. He thinks this is anti-capitalist. I do not. On the contrary, it is the essence of advanced capitalism.

How are we -- whoever "we" are -- going to create all this? How are we going to cooperate? If we do not cooperate through central planning, then we have to do it through the free market. There is no third choice. It is either the coercion of the state or the voluntarism of the free market that lets us do anything jointly on a large-scale basis. Society is not a small family farm. We face an either-or situation.

Leftists do not have an analytical blueprint. They also do not have a practical blueprint.

Yes, neoliberalism is a spent force. But, analytically speaking, it was always a spent force. There was never any analytical foundation to it.

The socialists' mythology and impulse have always been driven by one claim above all other claims: the absence of scarcity in nature. They always come back to the same theme: if we just get rid of free-market institutions, universal abundance will cascade over all of us. This claim ignores all of human history. Scarcity is built into the cosmos. They have never figured out that there is inescapable scarcity: at zero price, there is greater demand than supply.

The whole society is not like a factory. It is like an auction. It is governed by a fundamental principle: high bid wins. It is a system of competitive pricing. It is a system of allocation by means of competitive bidding. It is not like a factory; it has never been like a factory. That line of reasoning was Frederick Engels' line of reasoning, and it wasn't correct then. He never made it work in terms of economic analysis, and neither can Mason.

He steadfastly ignores the following fact: these new technologies are based on production for the market. The main thrust of the technological and digital revolutions is in the direction of decentralization and private ownership. Always, there is private ownership. Without private ownership, there are no prices. Without prices, there is nothing but economic blindness. That was Mises's point in 1920, and Leftists never respond to it.

Socialists specialize in stringing together slogans. They never offer any economic blueprints, but they are long on slogans. They never tell us how their dreams can be implemented. They never describe the system of sanctions -- judicial and economic -- by which people will get what they want through cooperation. They never discuss economic cause-and-effect, but they are really good at listing slogans.

This is utopianism. This has been going on for millennia, of course, but it was only after 1660 that the millennialism of religious utopian reform faded, to be replaced by the millennialism of government-mobilized utopian social reform. This vision is utopian to the core, and rests on a fundamental premise: the state can transform the nature of man.

It all rests on one assumption: there is no scarcity. It all rests on the assumption that, at zero price, supply equals demand. There will be no waste.

Paul Mason is the latest example of Leftism's desire to bury free market capitalism. The end of capitalism is always just around the bend.

May he retire on a Greek communal farm. Maybe it will have a free Internet connection.

Let the sloganeering begin!

a reply to: greencmp

Why is it always one extreme or the other?

Why do Socialist fear Capitalism?
Why do Capitalist fear Socialism?

We need to stop thinking in black and white and start living in the middle ground. The only thing destroying Free Market Capitalism is massive wealth disparity.

A wage and wealth cap on the top 1%, would lead to a form of Social Capitalism. Capitalism has proven to be the best venue for growth, but uncontrolled wealth is destroying the essence of Capitalist Competition.

A simple wage and wealth cap would return us to a Competitive Capitalist environment. Where no one man or business can become so large that they have the ability to destroy competition, thus allowing them to control both supply and price.

I call it Freemarket Social Capitalism. A system that keeps competition and the principles of supply and demand, without allowing any one person or business to become so large they can control supply and price.

The environmentalist can help us to decide what is too much production, and this environmentalism would have the only negative impact on the model.

We can't keep destroying the environment to produce goods, but we also don't want to control supply and demand outside of it's environmental impacts.

There is a grey area, a place of compromise, that ensures we keep what is good with Capitalism without allowing Capitalism to destroy itself.

A Leftist Blueprint, since some don't think there is one.

a reply to: greencmp

Leftists do not have an analytical blueprint. They also do not have a practical blueprint.

If they do I would love to see it. I would really like to see the blueprint for a feasible utopia.

It all rests on one assumption: there is no scarcity. It all rests on the assumption that, at zero price, supply equals demand.

These jackasses that pay $900 for a toilet seat are supposed to know how to run the market..

Some utopia.

a reply to: Isurrender73

We need to stop thinking in black and white and start living in the middle ground. The only thing destroying Free Market Capitalism is massive wealth disparity.

Some would say the massive wealth disparity is due to the absence of free market capitalism.

The US government has been bought.

Allowing corporations to use the government for financial gain.

That is not capitalism.

originally posted by: rockintitz
a reply to: Isurrender73

We need to stop thinking in black and white and start living in the middle ground. The only thing destroying Free Market Capitalism is massive wealth disparity.

Some would say the massive wealth disparity is due to the absence of free market capitalism.

The US government has been bought.

Allowing corporations to use the government for financial gain.

That is not capitalism.

In a completely free market, whoever has the most money has enough money to put everyone else out of business. Small business are almost gone in this country.

The Sherman Act was supposed to control this.

If no one had extraordinary wealth it would be impossible to buy government officials.

Allowing people to become insanely rich will always lead to massive income disparity and the destruction of competition.

I can't compete with Wal-Mart, but I should be able to try. The globalization of goods, and the use of cheap oversees labor ensures that small business owners have no chance.

If I open a business down the street from Wal-Mart they simply lower their prices to a level that puts me out of business.

Without a wealth cap, this will always happen.

Thus a true free market with no limits will always destroy itself.

originally posted by: Isurrender73
a reply to: greencmp

Why is it always one extreme or the other?

Because there is no "third way".

Production can either be free, private and controlled by price or not free, not private and controlled by force.

originally posted by: greencmp

originally posted by: Isurrender73
a reply to: greencmp

Why is it always one extreme or the other?

Because there is no "third way".

Production can either be free, private and controlled by price or not free, not private and controlled by force.

A wage cap of $250,000 does not control supply, demand or the price of goods.

You will have to explain to me how a wage cap of $250,000 controls anything but massive income inequality.

Since it has never been tried I would really like to know why you think that.

a reply to: Isurrender73

I can't compete with Wal-Mart, but I should be able to try. The globalization of goods, and the use of cheap oversees labor ensures that small business owners have no chance.

But you are able to try. Don't blame your shortcomings on someone else's success.

A wage cap only leads to brain drain.

I do agree with you though on the Sherman act. Monopolies are harmful to growth and fairness in the market.

That's why I opposed the time warner/Comcast merger. And also why I hate my phone company.

Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.
www.theguardian.com...

"something more dynamic ... I call this postcapitalism" is kind of like changing from "global warming " to "climate change".

More dynamic capitalism is still capitalism.

Paul Mason's article goes on to claim that any improvements in the quality of life are in spite of capitalism rather than enabled by it. Any beneficial change will be declared to be socialistic.

The free market is beyond politics. Capitalism produces more wealth for everyone than any political system. Socialists always put politics first and muddle up the perception of this fact.

a reply to: rockintitz

Really,

I am going to buy item X for a dollar. Let's say Wal-Mart has to pay the same dollar.

I have to sell item X for $1.25 to stay in business, pay my employees, rent, electric bill and such.

Wal-Mart sells item X for .50 cents, until the entire consumer base is shopping at Wal-Mart.

Then when I am forced to shut my doors because of Wal-Mart's pricing strategy Wal-Mart sells the item for $1.50 to recover the money they lost putting me out of business.

This is what will always happen in a true free market.

Controlling the wealth of the top 1% will not lead to brain dead, nor communism.

Stop pushing the fear.

a reply to: Isurrender73

That whole post was nothing but fear. Stop pushing ignorance.

There is a wal-mart a mile from me.

I do not shop there. I take my business to a place with better service and better products.

If you hate wal-mart so much don't shop there. And by all means tell everyone you know to stop shopping there.

That is your right.

It is not your right, however, to tell wal-mart to stop making money.

originally posted by: Isurrender73
a reply to: rockintitz

Really,

I am going to buy item X for a dollar. Let's say Wal-Mart has to pay the same dollar.

I have to sell item X for $1.25 to stay in business, pay my employees, rent, electric bill and such.

Wal-Mart sells item X for .50 cents, until the entire consumer base is shopping at Wal-Mart.

Then when I am forced to shut my doors because of Wal-Mart's pricing strategy Wal-Mart sells the item for $1.50 to recover the money they lost putting me out of business.

This is what will always happen in a true free market.

The primary feature of free markets which is essential to recognize is that specialization is the mechanism by which society and indeed civilization makes progress.

In societies which retain jack-of-all-tradism, for lack of a better term, everybody grows their own food and builds their own house and very little progress is made.

So, state sponsored monopoly aside for the moment (an unintended consequence of interventionism which you advocate for), if Walmart is better at selling widgets than you are, you should probably not try to compete with them unless you have a demonstrably better business model.

Indeed, it could be said that Walmart has freed up every person who would have sold widgets to instead make a substantial contribution to society with cheap widgets. An oversimplification but an apt one to convey the benefits of specialization.

originally posted by: Isurrender73
a reply to: greencmp

Why is it always one extreme or the other?

Why do Socialist fear Capitalism?
Why do Capitalist fear Socialism?

We need to stop thinking in black and white and start living in the middle ground. The only thing destroying Free Market Capitalism is massive wealth disparity.

A wage and wealth cap on the top 1%, would lead to a form of Social Capitalism. Capitalism has proven to be the best venue for growth, but uncontrolled wealth is destroying the essence of Capitalist Competition.

A simple wage and wealth cap would return us to a Competitive Capitalist environment. Where no one man or business can become so large that they have the ability to destroy competition, thus allowing them to control both supply and price.

I call it Freemarket Social Capitalism. A system that keeps competition and the principles of supply and demand, without allowing any one person or business to become so large they can control supply and price.

The environmentalist can help us to decide what is too much production, and this environmentalism would have the only negative impact on the model.

We can't keep destroying the environment to produce goods, but we also don't want to control supply and demand outside of it's environmental impacts.

There is a grey area, a place of compromise, that ensures we keep what is good with Capitalism without allowing Capitalism to destroy itself.

A Leftist Blueprint, since some don't think there is one.

Capitalism is not a political system, socialism is. Capitalism is the natural way society organizes itself without coercive collectivist action.

Socialism is an attempt to dictate a free market which if successful would result in a situation exactly the same as the free market. Socialism is an oxymoron.

All of the gross disparities between rich and poor are made and sustained by the State. Mostly by inflation of the currency, which eliminates savings, but also by the sophisticated use of regulation, which makes all economic activity more difficult-- especially for the simple worker and small businessman.

The largest and richest in the economy have money to pay fulltime lawyer and lobbyists. Only the power that the state can exert in favor of the richest make those lawyers and lobbyists worth the expense.

originally posted by: rockintitz
a reply to: [post=19617771]Isurrender73

It is not your right, however, to tell wal-mart to stop making money.

If 51 % of the people agreed with me, then yes it would be mine and the rest of the nation's right to stop Wal-Mart from paying their leaders wages that exploit the workforce.

This is a government of the people, a democracy. At least it is supposed to be.

Your defense of massive income disparity is why we live in a corporatocracy

originally posted by: Isurrender73

originally posted by: rockintitz
a reply to: [post=19617771]Isurrender73

It is not your right, however, to tell wal-mart to stop making money.

If 51 % of the people agreed with me, then yes it would be mine and the rest of the nation's right to stop Wal-Mart from paying their leaders wages that exploit the workforce.

This is a government of the people, a democracy. At least it is supposed to be.

Your defense of massive income disparity is why we live in a corporatocracy

No, wrong again.

America is a republic. Not a democracy. I'd be going off topic if I were to explain the differences to you.

You can be your own democracy though.

I hear North Korea is looking for skilled workers.

Oh, and you'll love this, they all have wage caps.

corporatocracy

Thank you for agreeing we are not living in a capitalist society.

originally posted by: Isurrender73

originally posted by: rockintitz
a reply to: [post=19617771]Isurrender73

It is not your right, however, to tell wal-mart to stop making money.

If 51 % of the people agreed with me, then yes it would be mine and the rest of the nation's right to stop Wal-Mart from paying their leaders wages that exploit the workforce.

This is a government of the people, a democracy. At least it is supposed to be.

Your defense of massive income disparity is why we live in a corporatocracy

Hang on a sec here...

I thought your complaint was that Walmart offered such cheap prices that you couldn't compete.

Now you are saying that they do that while making exorbitant wages (I understand that you mean the executives).

Also, you are specifically describing the quintessential problem known as the tyranny of the majority. A problem which was anticipated by our founders and was formerly countered by the balance of power throughout our republic.

I see a lot of attacks and assertions in this post. Strangest of all is the author's claim that socialism's main principle is lack of scarcity but capitalism's isn't? Scarcity is the driving force of capitalism as that is what sets prices and allows profits.

On the other hand I've never heard socialists say that everything is infinite, just that there are enough resources to alleviate much of the poverty on our planet which is true. Bill Gates alone probably has enough wealth to feed a small country for a year. Socialists don't like capitalism's massive imbalances and I don't blame them.

originally posted by: Isurrender73

originally posted by: rockintitz
a reply to: Isurrender73

We need to stop thinking in black and white and start living in the middle ground. The only thing destroying Free Market Capitalism is massive wealth disparity.

Some would say the massive wealth disparity is due to the absence of free market capitalism.

The US government has been bought.

Allowing corporations to use the government for financial gain.

That is not capitalism.

In a completely free market, whoever has the most money has enough money to put everyone else out of business. Small business are almost gone in this country.

.

If a business were undersold in that way, some new competitor would buy the bankruptcy for pennies on the dollar and undersell the first business.

Controlling an entire market by underselling isn't possible. Whenever the price is raised up to take advantage of the lack of competitors, new competitors will appear because of the high prices yielding high profits. The only possible free market monopoly is a virtual monopoly. A virtual monopoly looks like a monopoly because there is only one producer, but if that one producer raises his prices too high, new start ups will appear to get some of the over priced profits. Therefore in a virtual monopoly, the sole producer keeps his prices at a fair level to deter new entrants into the market.

All overpriced monopolies, usually cartels actually, are supported by government actions and regulations that prevent new companies from competing for customers.

a reply to: rockintitz

I call that a game of semantics, and our founding fathers and the Washington Post seem to agree.

John Adams used the term “representative democracy” in 1794; so did Noah Webster in 1785; so did St. George Tucker in his 1803 edition of Blackstone; so did Thomas Jefferson in 1815. Tucker’s Blackstone likewise uses “democracy” to describe a representative democracy, even when the qualifier “representative” is omitted.

Likewise, James Wilson, one of the main drafters of the Constitution and one of the first Supreme Court Justices, defended the Constitution in 1787 by speaking of the three forms of government being the “monarchical, aristocratical, and democratical,” and said that in a democracy the sovereign power is “inherent in the people, and is either exercised by themselves or by their representatives.”

And Chief Justice John Marshall — who helped lead the fight in the 1788 Virginia Convention for ratifying the U.S. Constitution — likewise defended the Constitution in that convention by describing it as implementing “democracy” (as opposed to “despotism”), and without the need to even add the qualifier “representative.”

To be sure, in addition to being a representative democracy, the United States is also a constitutional democracy, in which courts restrain in some measure the democratic will. And the United States is therefore also a constitutional republic. Indeed, the United States might be labeled a constitutional federal representative democracy.

But where one word is used, with all the oversimplification that this necessary entails, “democracy” and “republic” both work. Indeed, since direct democracy — again, a government in which all or most laws are made by direct popular vote — would be impractical given the number and complexity of laws that pretty much any state or national government is expected to enact, it’s unsurprising that the qualifier “representative” would often be omitted. Practically speaking, representative democracy is the only democracy that’s around at any state or national level.
www.washingtonpost.com...