Tuesday, April 21, 2015

Sustainable Economic Systems, Capitalism, Socialism, and Constraints Imposed by Empire

This post is primarily about socialism, capitalism, the means of production, and the constraints imposed by empire. I'll split this post into six sections:
1. Introduction.
2. Capitalism
3. Socialism
4. Constraints Imposed on the Means of Production by Empire and Warfare
5. Why Do Countries with Peacetime Capitalist Structures Generally Win Wars?
6. Conclusion

1. Introduction:
Among socialists, leftists, and statists there's a common idea thrown out which says that the basic idea and structure of capitalism is based for warfare while socialism is what we need to work towards as a more sustainable way that's less likely to lead to war. As regular readers of my blog know, we shouldn't take socialists, leftists and statists seriously as they almost always just spew nonsense. This case is no different.

A typical leftist, socialist, or statist would argue, how can anyone say that socialism is better suited for war when capitalism is all about "exploitation by the bourgeoisie" or "the lower classes are being oppressed" or "it's the upper classes that start/want war"? Of course, these people have simply shown the inability to think clearly by making such statements while adding nothing of value to the discussion. However, I'm gonna throw aside such nonsense arguments as they add no value and instead start by talking about the primary differences between the way capitalist and socialist economic structures operate.

Let's start by focusing on empire and the constraints imposed by empire. These constraints are the fundamental reason why truly capitalist economies, if their organizational structure remains completely unchanged, are completely incompetent and cannot survive in warfare. During wartime, capitalist economic structures are forced to give way so that the means of production can be directed to where they need to go as dictated by geopolitical constraints. 

2. Capitalism:
First, I'll start off by defining capitalism. Capitalism is a system of economic organization built on the private ownership of the means of production as a means to accumulate capital, which is any input that's not land (natural resources) or labor. As I've discussed in my post on the basics/dynamics of real wealth creation, an economy is like an ecosystem with inputs and outputs with outputs paying for inputs. The laws of thermodynamics tell us that you can't create something from nothing, so the only sustainable way to increase output is by increasing the use of natural resources, labor, or capital (which is, by definition, anything not land or labor).
Note: Environmental degradation, which almost always accompanies the extraction of natural resources, destroys capital, but natural resources are necessary for production.
Note: All natural resources can be extracted in different ways and most have substitutes. For example, the use of oil or natural gas can be substituted with coal or firewood/biomass. The only natural resource I can think of with no substitutes is water, which is usually far more limiting in terms of food production than land.

Therefore, the entire idea of accumulating capital is inherently sustainable. Not only is it inherently sustainable, but the idea of capital accumulation is the ONLY sustainable economic system over any sustained period of time. Increasing doesn't enhance living standards as people are simply working more to produce more. Increasing the use of pure natural resources is actually destructive, forces future generations to bear the costs, and can actually destroy capital because it forces costs onto future generations. Therefore, THE ONLY SUSTAINABLE ECONOMIC SYSTEM IS ONE BUILT ON CAPITAL ACCUMULATION!

3. Socialism:
Now, I'll talk about socialism. Socialism is a system of economic organization built on the social ownership of the means of production as a tool for society to use as it pleases. Again, socialism is not an economic system designed to accumulate capital, but one that allows society to use inputs as it deems best. This system--due to its lack of emphasis on the accumulation of capital and emphasis on the pleasures of society at a given time--is almost always unsustainable because the pleasures of society rarely desire a sustainable way to accumulate wealth as it takes smart work, risk-taking, volatility, and difficulty. Usually, society desires easy riches over hard-won sustainable wealth as they seem to require less work and provide more. The classic example is old-school imperialism where nations or empires would go into places to take loot. Again, many dictators, military men, and politicians have done this (and still do this) as a tool to gain the support of the populace to rise to, or maintain, power.

In other words, socialism is about controlling the means of production and the direction or use of the means of production (this comes straight from the definition) towards some common goal as society deems it. Unless the goal of society is specifically determined towards the accumulation of capital, whether knowingly or unknowingly, living standards and quality of life cannot sustainably increase under socialism.

Of course, a socialist, leftist, or statist might say that the people can determine and choose such an outcome or that a king/dictator/monarch can choose such an outcome, but I'd like to point out that this choice is rare and unlikely. Again, the accumulation of sustainable wealth (capital) is difficult and takes sacrifice. Wealth accumulation requires both prudence, temperance, and courage, which is hard to find in any large group of people. Note that I'm making an implicit assumption about human behavior that basically says prudence, temperance, and courage together are rare qualities for most people to possess. I find it naive to expect society at large will choose an organization wherein the society at large suffers what seem to be large, up-front costs for benefits that may accrue in the future with lots of toil and hardship. Keep in mind that winner-take-all benefits will dominate in the creation of wealth, which makes it even less likely for a society following a socialist model to take up.

4. Constraints Imposed on the Means of Production by Empire and Warfare:
Now that we have a basic idea on what socialism and capitalism comprise of and the underlying ethos on the organization of both economic systems, we can talk about the impact of these systems on war. War is an armed conflict between autonomous regions that are either governments or behave like governments (ex. confederation). Wars usually contain a certain objective (or they end up with nation-building and as a waste of time like the War in Iraq) with the goal of the government to achieve those objectives. Those objectives could be to seize a territory, kill a certain person, ruin a city, take natural resources, or whatever. The important point to grasp is that whatever the objective or goal, the means of production must be directed toward that goal.

For example, at least some of a country's manufacturing capacity must be directed towards the procurement of arms. Real resources used in elsewhere in the economy must be redirected towards other ends. Infrastructure must be built and maintained in order to secure the transport of various goods or services critical to fight the war, regardless of the impact of infrastructure on productive capacity. Supply lines for troops must be protected. Certain classes of society must be used towards goals as deemed by the constraints of war (ex. nurses and doctors must be transferred towards taking care of soldiers). Capital must immediately be redirected towards the financing and operation of warfare.

Basically, the constraints imposed by warfare implies that resources must be redirected towards some other alternative goal or desire than those of private wishes. Capitalism, as I've described it, becomes very difficult for a society to use in warfare simply because of its structure and design. Capitalism is the private ownership of the means of production towards the accumulation of capital, but the accumulation of capital is useless during warfare. The goal of warfare is victory and the goals of the war for a government is whatever that victory requires.

In socialism, the means of production can be redirected at will towards whatever goal society deems necessary. If a society suddenly goes to war, the very design of the economic mode of organization provided by socialism makes it very easy to shift economic inputs toward warfare. It's in the nature and design of the system.

5. Why do Countries with Peacetime Capitalist Structures Usually Win Wars?
After reading until here, a socialist, leftist, or statist would often respond with a statement like, if socialism is better fit for warfare, why do capitalist economies perform better in warfare? That must mean that socialist economies cannot be designed for war. On the surface, such statement would seem to make sense, but capitalist economies are forced to shift their economic mode of organization in wartime when certain geopolitical constraints are present. In other words, capitalist economies basically turn socialist (or at least partially socialist) in times of war by constraints imposed on political systems.

Also keep in mind that capitalist systems, due to the emphasis on the accumulation of capital, tend to have higher levels of productivity, more wealth, better technology, and are more sustainable than socialist systems (as discussed above). This is why when capitalist societies do shift their economies towards war time, they often times overwhelm the other side given that they can fully transition to a wartime state given that they've secured key natural resources and supply lines (ex. US in World War I and World War II).

As ironic as it may seem, peacetime capitalist economic structures have won more wars and are more capable of winning wars not because they're built for warfare, but because they're built towards sustainable wealth creation. In warfare, all economies are, at least partially, socialist. However, war drains economic inputs that could be used elsewhere that end up being directed toward destruction and control. Increasing or diverting production towards goods and services purely designed to destroy other things is not a productive use of resources. It's just that peacetime capitalist structures just have a much large source of resources and inputs that can be wasted or put towards unproductive causes, which is why they tend to win wars.
Note: I'm assuming all else is equal when comparing capitalist and socialist economic structures during wartime. Of course, all else is never equal.

6. Conclusion:
Controlling the direction of labor, nationalizing entire industries, shifting natural resources to certain areas at certain times for certain goals, large and sudden increases in manufacturing capacity, the construction of large-scale infrastructure at will for whatever purpose, increases of certain kinds of production at certain times, control of certain lanes to supply certain groups in certain places, and other things of this sort for the "desire of society" is socialist, but it's also necessary for warfare.

Suppose we have a firm in a capitalist providing a service for, say, providing underlying technology infrastructure for other businesses or individuals. Taking control of the firm to direct the firm's assets, its workers, and its capital toward a societal goal is socialist, but that's exactly what happens in war. Profit and capital accumulation become secondaries to the common goal of victory in wartime. Capitalism, by itself, has no mechanism of organizing itself for warfare when necessary.

In essence, the idea that capitalism is suited for warfare is wrong. Capitalism is not built for war and cannot function in wartime while still maintaining its underlying structure. Socialism has a much better design for warfare than capitalism, which is why peacetime capitalist structures are forced to morph under the guidance of political systems when geopolitical constraints become imposed on the society in question.

Friday, April 10, 2015

The American Republic: An Anti-Democratic Constitutional Republic

In this post, I'm gonna talk more about politics than economics, finance, or geopolitics. This post will be about the differences between a constitutional republic and a democracy. First, I need to define a democracy vs a constitutional republic.

DEFINITION: Constitutional Republic (can also be called a "libertarian democracy" with the term mostly used in Europe)--A governmental system that comes from the Latin word res publica which is Latin for public thing. In other words, a Constitutional Republic is about a rule of law and a protection of basic libertarian rights with the goal being liberty (not in the Marxist or socialist sense, which is highly flawed and blatantly retarded because it's designed to set up a straw man to attack). Individual provinces have a large and varying degrees of autonomy that're constitutionally protected. This kind of system is closer to an empire than a democracy because of the autonomy given to states and localities with the federal structure serving a role only in defense and other tail-risks.

DEFINITION: Democracy--A form of government that's built on the principle of equal participation and equal power in the people. In this government, the national will of the people reigns supreme over individual rights, liberty, minority rights, and state/local government rights if the people deem it so. These kinds of systems usually do have Constitutions, but they emphasize equal representation and "the will of the people" over a strict rule of law designed to protect individual rights. Due to the nature of the political system, these political systems tend to be more authoritarian and can easily devolve into dictatorships during times of crisis or war (ex. currently Russia).

I'll split this post into five different sections, in order:
1. Constitutional Republic/American Political System
2. Democracy/Parliamentary System
3. Political Organization in the American Political System
4. Political Organization in Most Democracies
5. Conclusion

Constitutional Republic/American Political System:
Usually, socialists, leftists, and current statists (and most Europeans) within the US refer to the American political system as a democracy, but as usual socialists, leftists, and statists are spewing nonsense. THE AMERICAN POLITICAL SYSTEM IS NOT A DEMOCRACY! Why do I say that the American political system is not a democracy when socialists, leftists, and statists keep telling us it is? The reason is the political structure of the United States. The US is a Constitutional Republic and, from now on, I will interchangeably use Constitutional Republic and the American political system.

First off, the hallmark of the American political system is one of checks and balances between different groups called factions with three separate branches of government: the executive branch, the legislative branch, and the judicial branch. It's important to notice that all of these branches tend to favor the power of individual states and the autonomy of the different states than they do the people at large.

The executive branch is led by a President elected by the electoral college, which is not done by popular majority. Usually, a leftist, statist, or socialist would respond that the winner of the election is almost always the winner of the popular vote. Remember how I emphasize on my blog how it's not just the end conclusions that matter, but the procedures by which we reach these conclusions. In the electoral college, all Presidential candidates target winning most of the electoral votes, which means that a candidate focusing on California or Texas is really a waste of time. What it also means is that a vote for a Presidential candidate in state like California or Texas is effectively a useless vote because we all know how the states on the extremes will vote. This changes how much of the population shows up for the vote along with other factors that make the system less democratic. By this very nature, the Executive is undemocratic and that a popular vote will lead to very different outcomes even though the results have historically been the same. It also becomes important to note that the Executive branch, even though undemocratic and highly republican at its core, is still the most democratic part of the American political system. However, the Executive branch cannot pass any bills, even though it remains very powerful in foreign affairs.
Note: The President is akin to a king in a Constitutional Monarchy that's effectively elected by the populace with term limits. The President has no legislative authority (only veto power) with the emphasis again being on checks and balances instead of democracy.

In the case of the Legislative branch, we have a bicameral legislature with a House of Representatives (lower house) and a Senate (upper house). In the House of Representatives, each state has a certain amount of districts apportioned by population with the districts selected via gerrymandering by individual states. So in the House of Representatives, we have state governments having lots of power in the outcome of Representatives that makes this system inherently undemocratic. The state governments have the ability to set the gerrymandered districts in such a manner that represents the interest of the particular state far more than giving each person equal representation. In other words, the inherent idea of equal participation that's necessary for democracy is nonexistent in the House of Representatives while individual states have a lot of autonomy to operate. Therefore, the House of Representatives is inherently undemocratic, although the people have far more of a say here than they do in the Senate with states maintaining a strong degree of sovereignty.

In the Senate, each state must have two senators. Clearly, the Senate is inherently undemocratic because the states have wildly varying populations that can only have two senators. Again the principle of equal representation in a democracy is violated. Also note that many Senators are from different states that have different interests. So regardless of the party they're from (the parties in this system are extremely weak and have little power), they have to support and represent the popular interests of the state which is necessarily opposed to the popular interests of the entire United Sates. In the case of the Senate, we have a filibuster which takes 60/100 votes of the Senate to end (cloture) and every bill must be agreed upon by both the House and the Senate. Again, the Senate is obviously undemocratic while giving individual states lots of power on how to determine their representatives. The mere choosing of the Senators, the role of the filibuster, and the basic passing of bills gives the states a disproportionate amount of power and the democratic principle of equal representation is inherently violated. Yet again, the interests of the states are supported at the expense of equal representation.
Note: Due to the nature of the Senate, the Senate generally represents the interests of the elite more than it does the people as a whole. This is not a bad thing and there are many reasons why this is the case. The Senate is more constant (as the interests of the elite end to be) while the House is more volatile and fickle (as the people tend to be).

In the Judicial branch, each Supreme Court judge is appointed by the President and must be confirmed by both the House of Representatives and the Senate with the other national judicial appointments having no part coming from democratic institutions. As we can see, the Judicial Branch is obviously undemocratic and there's no reason for me to go any further here because the rest should be obvious.

So what does this imply about the political organization seen in this system. This kind of political system forces people to unify into political groups called factions. In other words, the US has a factional political system. In order for this type of system to be sustainable and strong, the country must have a many different factions each fighting for power so that no one is able to take it. The reason this system usually fails in most places it's tried is because this kind of system forces national unity to take a backseat to individual and state's rights.  Trying to enforce and artificially create internal national unity is not compatible with this system. The American political system can only go hand in hand with a large, diverse populace in a country that's united by a moral principle (ex. life, liberty, and the pursuit of happiness). This political system will become highly corrupted and infeasible with nation-states.
Note: In a country like Argentina, this system will fail because national unity is expected to be very tight. Instead, this type of system devolved into a populace supported autocracy or an elected dictator. Again, diversity is a necessity for this kind of system.

Remember that the essence of this type of system is checks and balances so if a country lacks diverse factions, the checks and balances will not work. If not enough factions exist, one faction will be able to pull power away from the other factions. The American political system can only work if everyone is in the minority at a given point in time because the heart of the system is liberty. Liberty can only be preserved and strengthened if a diverse group of factions feel their rights threatened by everyone else on certain important issues. In other words, liberty is the air of the faction and a political system of diverse factions each with independent rights and a decentralized federal structure is the best way to preserve liberty.
Note: The elites can also count as a faction, but usually different types of elites serve as parts of different factions.

In the American political system, the only time national unity occurs is in war out of necessity. As soon as the war is over, the system devolves into healthy infighting and attempted power grabs by various factions, which are necessary to protect liberty.

Democracy or Parliamentary Democracy in Most of the World:
In most of the non-autocratic systems across the world that happen to be Parliamentary, the lower house is decided by a multi-party system whereby each voter has an equal say and equal representation in that house. The upper house consists of either elites or those appointed by  that can almost always be overruled by the lower house with just a simple majority and the power of the upper house is really just ceremonial (ex. Germany, India, the UK in its current form, and many others). In reality, the people have most of the power. In this kind of system, the principle of equal representation is upheld and these systems are highly democratic--far more so than the American one.

Due to the nature of these systems, state, local, and provincial governments have relatively little say in what happens nationally (and often times locally as well). The elites also have considerably less power as the people get, for the most part, what they want. In these kinds of systems, the power and role of basic constitutional protections of individual rights are effectively close to nil. In most of these countries, the freedom of speech, freedom of religion, a free press, the right to peaceful assembly, and the right to petition the government can be overruled by the majority of the populace.
-In France and the UK, people can be placed in jail for attacking public officials.
-In France, they've put restrictions against Muslims wearing certain clothing.
-In the UK, they've actually put restrictions on pornography.
-In the case of Germany, they say they have a freedom of speech, but apparently have to respect human dignity, which is in direct conflict with the freedom of speech. The entire point of the freedom of speech is to say whatever I want without fearing retribution regardless of what I say as long as I don't affect anyone else's rights. "Dignity" is subjective and not a right.
-In France, they placed laws on the "positive representation of drugs" while placing prison sentences and hefty fines on those that disobeyed these laws.
-In Germany, there are bans and a revocation of fundamental rights to various groups. Assemblies are also required to register and certain places are banned from possible protest areas.
-In Germany, "Dissemination of Means of Propaganda of Unconstitutional Organizations" is banned
-In Greece, there's a ban on the press to insult the President of Greece as well as any religion recognized by the state.
-In Finland, blasphemy is banned.
-I can go down the list for a very long time.
-In the US, there are basic rights exceptions like defamation, obscenity, incitement to violence, fraud, and primarily parts that are legitimate infringements on the personal rights of others or involve the protection of property (like defamation with regards to money, business, etc.). THESE EXCEPTIONS AREN'T EVEN BANNED, BUT COULD BE BANNED IF DEEMED NECESSARY--like wartime, but in reality, there's little chance of actually banning them. In the US, even hate speech is legal. Note that defamation is not a criminal issue either; it's purely a civil issue intended to protect businesses from competitors trying to defame others--in other words, it's an issue of property rights. Also note that most of these bans are enforced on a local scale, not a national one.
NOTE: Many of the free speech/free press organizations that publish rankings for this stuff are bullshit because they don't penalize and some times (maybe even most of the time) reward political correctness, bans on hate speech, and other issues like that. Please do not use those rankings against me as an argument because their very assumptions are highly flawed. POLITICAL CORRECTNESS IS CENSORSHIP!

Many of these governments rely on the unity of the populace, which means these countries have difficulty in assimilating immigrants--as we're currently seeing in many of these countries. In this kind of system, individual rights and local autonomy are usually given as a secondary importance relative to the will of the people. There's also no checks and balances as the legislative and executive branches are effectively the same. These kinds of systems are liable to collapse into dictatorships at virtually any time if the people desire it so (and historically often have).

These types of systems are more in line with nation-states because national unity is far more important than liberty. If the people deem it so, they can simply wipe out or imprison minority populations in peacetime. This is one of the reasons we're seeing rising anti-Islamic violence in Europe and the rights of the minority are rarely protected in this kind of system.
Note: These types of governments are technically republics in name, but they're republics in name only. In reality, they throw away and effectively spit at all of the basic foundations of a healthy republic in favor of democracy and "will of the people".

Political Organization in the American Political System:
In the American political system (also in Indonesia and other countries), political parties are weak. Due to the fact that people are chose with a plurality, you get two sides (parties), but there's nothing to enforce discipline. Instead, the individual matters much more than the party and it's extremely common for people in a certain party to buck the party line, which happens all the time. Again, this system is republican in the sense that people elect specific leaders with the ability to throw out the leaders any time they please.

In this system, the President or head of state can, and often does, go against his own party on critical issues. He doesn't depend on his party for support; he depends on the electoral college. In other words, his administration has the ability to change things far more than a typical administration in a democratic system.

Also note the importance of the autonomy of state and local governments. In a typical political axis, the region he represents matters more to the positioning of the legislator on the axis than the party (ex. a Southern Democrat is more "right-wing" than a Northern Republican). In this system, the local and state parties are also run completely independently of the national parties, which means they get to set their own agenda on how they run things.

Again, this type of system is republican which means that each ruler has lots of autonomy with the people having the ability to replace the ruler and the Constitution setting the power of rulers. The political parties are weak and decentralized, which is healthy as political parties are to not be trusted (the entire point of a political party is to usurp power, which makes powerful political parties extremely dangerous).

Political Organization in Most Democracies:
In a more democratic political system, political parties have lots of power. They're highly centralized with anyone who bucks the party line at extreme risk of getting ousted, so bucking the party line is rare. The parties represent the will and ideas of the people that elected them, so the party has to fulfill the will of the people who elected them.

Of course, there are many parties and each party rarely has >50% of the vote so they form coalitions. In the majority coalition, a prime minister is chosen. The Prime Minister basically must do what the parties tell them or they won't be there for very long. Individualism is thrown away at the expense of the group, as is the nature of the government. In this case, the direct will of the people overpowers the will of the other autonomous actors in everything (not just national defense, but property rights and the enforcement of contracts).

Due to the organizations of the parties, the resulting nature of the political system is very different than the republican one. There's more centralization with little leeway for the system as a whole to adapt and take different forms. Also note that elections can be called at any point, so a group of people who feel like they can have an edge can call an election at any point to increase their majority. This idea and thought process continues to spit on the basic foundations of a healthy republic, which makes this kind of system inherently democratic and anti-republican.

If the American political system can be run by a country, it's a superior system. However, that system requires a large, diverse populace and has the structure of an empire. In the American system, the power of the people is curbed and majority rule is, in many cases, pretty much useless. The interests and direction of the American system is multifaceted and difficult to take over to make into an autocracy. In this kind of political system, we see large amounts of mudslinging and internal volatility between factions in times of peace (this is a great thing that should be held in high regard). The only time the American system is united is in a time of war when the people view their liberty or when a critical national interest is threatened. The elites also hold far more power in this kind of a system.

It may seem like the regular tumults and mud-slinging between different factions is a bad thing, but it's necessary volatility. Volatility is disseminated immediately and volatility suppression rarely occurs. People can peacefully petition the government to have their grievances addressed, which creates volatility, but is the only way to result in policies that protect liberty.

In a more democratic system, there's far less volatility, less individual and local autonomy, and volatility is often suppressed. Certain minority groups are often targeted and attacked by the majority because this system is a majority rule based system. These kinds of systems are far less robust when even when working at their optimum than the American political model; however, these systems are easier to implement in most places. The people have more power, property rights are effectively shat on when the people deem it so as commerce, trade, finance, and risk-taking tend to be discouraged.

The democratic system seems far more appealing--particularly to socialists, leftists, and statists, but it's far more dangerous. It's liable to large blow-ups when the people deem that something be done even though the consequences could be disastrous.

The role of the people in the American political model is limited to removing bad leaders. There's a clear hierarchy of power even though everyone is equal in front of the law. In the democratic model, there is no limits on the wills of the people, which can result in large, violent blow-ups that end up with dictators or authoritarianism. It's due to this reason that constitutional monarchies are far more robust than regular democracies because there are simply more checks and balances.
-The democratic systems do have constitutions and a rule of law, but the constitution and the rule of law takes a backseat to the "will of the people", equal representation, and other nonsense.
-Edit: This doesn't apply to countries Norway or Sweden that do have strong protection for basic rights and also have lots of autonomy. Even though these countries have high degrees of redistribution; they're also highly capitalist.