Friday, April 27, 2012

400. The Utopia of the Free Market

In the previous lecture I introduced the social and economical principle of "commons",  common meadows for instants which can be used for the basic needs of a community.

These commons seem to be destroyed by the rise of the free market, but today we see them return, when countries limit catch quota for fish or oppose to total destruction of rainforests for only plain profit.

The facts themselves force us to see this earth with it limited resources as our common. There is an increasing insight, that leaving everything to a free market economy with unlimited  growth is an absurdity.

In the subsistence economy there were three organizing economical principles. One, the commons, I have presented to you, the other two are reciprocity and redistribution.

Reciprocity is an important mechanism to stimulate social cohesion in a community. In a free market society, where everything can be bought for money, reciprocity,at least according to Ayn Rand, is not done.

However, it still exists and belongs to our evolutionary heritage, like for instance chimpanzees give each other food or seek for  fleas in each other's fur.

While reciprocity in societies dominated by the subsistence principle was almost a must for survival, in our market society it is mainly a matter of free choice.

Gifts with Christmas or birthdays, volunteering for all kinds of activities in your neighborhood, clubs, at work or for friends are still important to create the feeling of social cohesion. Thence, money can't buy everything.

Redistribution of goods played for the first time a part in societies which depend on agriculture, like in ancient Egypt or Mesopotamia.

Obviously this redistribution took place primarily in need of non-producing groups: priests, state officials and the army. All was paid in kind. Money was hardly used.

In today's society redistribution is neatly organized by redistributing our tax money. It took a long learning process to get as far as we have come now. I'll discuss that later.

The discussion about this redistribution of our tax money we call politics, where socialism has quite different ideas about it than neoliberalism.

When we look back on these three basic economical organizing principles: Commons, Reciprocity and Redistribution, there is something remarkable about them.

Ayn Rand rejects them all three sharply in the name of the role that money should play, not only on the market but in all social relationships.

In Atlantis, Rand's utopia, everything is dominated by the dollar and all buildings are decorated with the dollar sign like a cross on a church tower.

It is to no surprise, because the Atlantis oath is:
I swear by my life and my love of it that I
will never live for the sake of another
man, nor ask another man to live for mine.

Dagny Taggart learn that Atlantis in not a place where it is allowed to ask for help. When John Galt, her lover, offers to help her in the kitchen, she reminds him of the rules.

She is paid for what she is doing. And here we see the weird view of man Rand offers: the creative, productive, but completely isolated individual.

Only the free market is the principle. It may  be clear that any form of redistribution is rejected by Rand. 

Three words are taboo and forbidden in Atlantis: need, help and sharing as a community. Thus we can conclude that we are fortunately not living in Rand's Atlantis.

The Discussion

[13:24] herman Bergson: For those who do not know Ayn rand and Atlantis
[13:25] Bejiita Imako: indeed wouldn't be nice at all
[13:25] Debbie Dee (framdor): loveless efficiency - steam powered
[13:25] Bejiita Imako: we would be like machines
[13:25] herman Bergson: Ayn Rand is a writer who published the novel "Atlas Shrugged" in 1957
[13:25] herman Bergson: In the novel she describes an ideal society, named Atlantis
[13:25] herman Bergson: Thank you...
[13:26] herman Bergson: The floor is yours...where Bejiita already was dancing ^_^
[13:26] Lizzy Pleides: Thank you Professor!
[13:26] Mick Nerido: We are moving toward an Ayn Rand world it seems...
[13:26] Bejiita Imako: Ayn Rand has a really strange view if she thinks we should reject our social needs and just use each other for oneself
[13:26] Debbie Dee (framdor): So, the current state of the first world - the free market world - is already like Atlantis
[13:27] herman Bergson: Well Debbie....
[13:27] herman Bergson: neoliberalism is breaking down the welfare state in a number of countries indeed...
[13:28] herman Bergson: UK, Netherlands....
[13:28] Bejiita Imako: Sweden
[13:28] herman Bergson: The US never reached that level...
[13:28] Mick Nerido: Ronald Reagen started it in the us
[13:28] herman Bergson: Yes Mick...the big buddy of Thatcher in the UK
[13:29] Debbie Dee (framdor): I mean in the sense that we see looming energy crises, and just keep cranking up the economy at all costs
[13:29] Debbie Dee (framdor): Being rich is more important than survival in many places.
[13:29] Mick Nerido: Big corps own the gov in the US
[13:29] herman Bergson: yes, Debbie but there is a growing counter movement
[13:29] Debbie Dee (framdor): There was one when my dad was a hippy -
[13:30] herman Bergson: yes Mick…like here....
[13:30] herman Bergson: They talk about the Financial Markets.....
[13:30] herman Bergson: They seem to own the political situation in the world...
[13:31] herman Bergson: The repeating question..... Oh dear...How will the financial Markets respond to this or that development
[13:31] Mick Nerido: They own the politicians
[13:31] Kime Babenco: The economies are drifted by stock exchanges, and ever raising gains... the sky is the limit... As every country has to need a growing economy... How can it grow ? If others do less? Or a continuing growth of worlds population ... It can not grow forever... So we need to accept that, and reach a maintainable ceiling... Maybe we already over it...
[13:32] Lizzy Pleides: In europe almost all nations are obliged to save money and in all these nations the governments are voted out now, where is the reciprocity in europe?
[13:32] Mick Nerido: there is no limit to how much u can contribute to a candidate
[13:32] Debbie Dee (framdor): Corporations have become more than the workers... With their modern financial and production systems, they take on a need for growth, often beyond the directors control.
[13:32] herman Bergson: Yes....all hard questions.....
[13:33] Annie Brightstar (anniebrightstar): Last week you mentioned Garrett Hardin
[13:33] herman Bergson: Yes...
[13:33] Bhelle Alacrity: so how do you pay for all of this?
[13:33] Bejiita Imako: yes complicated stuff
[13:33] Bhelle Alacrity: Where does the money come from?
[13:33] Annie Brightstar (anniebrightstar): I read Lifeboat Ethics: the Case Against Helping the Poor
[13:33] herman Bergson: Well...I really don't know....
[13:33] Lizzy Pleides: raining from heaven, lol
[13:33] Bejiita Imako: well some companies seem to believe that
[13:33] Kime Babenco: Tell me where!
[13:34] herman Bergson: Since World War II the governments in my country (like in many others) have spent more money then they received from taxes...
[13:34] Fred123 Aiten: Growth of Financial Markets is not a completely bad thing. Because the pension funds invest heavily in the markets many people rely of good growth to provide a living pension
[13:34] Mick Nerido: wealth come from the combined work done by ALL the people
[13:34] herman Bergson: I think that that is the beginning of all misery...
[13:34] Kime Babenco: I agree
[13:34] Bejiita Imako: yes
[13:34] Bejiita Imako: for sure
[13:34] Kime Babenco: But I am from a country that is a bad example
[13:35] herman Bergson: Yes Fred I know....
[13:35] herman Bergson: Which one ids that Kime...Greece?
[13:35] Kime Babenco: No, Brasil
[13:35] Bejiita Imako: ok
[13:35] Kime Babenco: Doing fine now
[13:35] herman Bergson: I thought that Brazil is doing fine now economically
[13:36] Kime Babenco: We have to help Europe now
[13:36] Kime Babenco: lol
[13:36] Kime Babenco: Yes, but I meant in the passed
[13:36] herman Bergson: could buy a country or two perhaps...
[13:36] herman Bergson: the other countries will be bought by China....^_^
[13:37] Mick Nerido: China may swolow us all lol
[13:37] Bejiita Imako: hehe yes soon china own the world
[13:37] Debbie Dee (framdor): China will also crash - energy and overpopulation
[13:37] Debbie Dee (framdor): and now overproduction
[13:37] Bejiita Imako: but chinas government is a bad example cause how they treat people
[13:37] Lizzy Pleides: yes china will have problems too on long term
[13:38] Mick Nerido: I'm afraid war will be the result of all this misery
[13:38] Kime Babenco: It's not all good here... As in every country... (I guess) it's a few that gain a lot, for the others it may improve a bit or remain the same
[13:38] Bejiita Imako: censor torture etc.
[13:38] Fred123 Aiten: I agree Mick, unrest is the most likely consequence
[13:38] Lizzy Pleides: we have a concentration of atomic weapons in asia
[13:38] herman Bergson: This is the world we live in, dear all have your country and economy....
[13:38] Debbie Dee (framdor): censorship and torture are widely practiced by the USA at this time...
[13:39] Fred123 Aiten: either between countries or within a country
[13:39] Mick Nerido: The competion for resources will be the cause
[13:39] herman Bergson: But one thing to keep in mind is...
[13:39] Debbie Dee (framdor): the internet bill is being pushed through the senat
[13:39] Debbie Dee (framdor): and Guantanamo bay still exists
[13:39] herman Bergson: that 99% of the discussions in your country about human welfare are formulated in economical terms...
[13:39] herman Bergson: The political discourse has become an economical discourse...
[13:40] herman Bergson: And that is a remarkable thing...
[13:40] herman Bergson: A consequence of the free market utopia...
[13:40] Bejiita Imako: all is about money, like here they cut down on schools and other important stuff to save money
[13:40] Kime Babenco: Who's country ?
[13:40] Bejiita Imako: thats NOT where to save money
[13:40] herman Bergson: almost all countries Kime
[13:40] Kime Babenco: Ah,ok
[13:41] Debbie Dee (framdor): you said politics was about redistribution of taxes - ie always an economic discourse
[13:41] herman Bergson: no Debbie....
[13:41] herman Bergson: Not a redistribution of tax a literal sense
[13:41] herman Bergson: but a redistribution of goods and resources...
[13:41] Lizzy Pleides: i am afraid that nobody really will save money
[13:42] herman Bergson: and in our society this has become a very complex process...
[13:42] herman Bergson: For instance.....
[13:42] Lizzy Pleides: hi tessa
[13:42] Annie Brightstar (anniebrightstar): Hi Tessa
[13:42] Tessa Zalivstok: apologies herman
[13:42] Tessa Zalivstok: everybody
[13:42] herman Bergson: You have a couple which earns 1000L no children...
[13:43] Bejiita Imako: hi Tessa
[13:43] herman Bergson: another couple..same work same income....but three children....
[13:43] Tessa Zalivstok: hi Bejita
[13:43] herman Bergson: also 1000L a month.....
[13:43] herman Bergson: feedign two mouths or 5 mouths from 1000L while they both contribute to society the same...
[13:44] herman Bergson: then you impose taxes...both pay 200L
[13:44] herman Bergson: you give of the 400L you get 300L to the family with three kids...
[13:45] herman Bergson: that is the meaning of redistribution and living together in a society
[13:45] Bejiita Imako: ah
[13:45] herman Bergson: and with the remaining 100L you organize education or healthcare etc.
[13:45] Bejiita Imako: hmm indeed having kids don't increase your income even there are more to feed
[13:46] Bejiita Imako: so what you have over decrease,
[13:46] herman Bergson: This is called solidarity...
[13:46] Kime Babenco: We have a minimum salary here in Brazil… I know some people work below that in some states, because they are exploited and can not read...
[13:46] Lizzy Pleides: and the couple will be mad, lol
[13:47] Tessa Zalivstok: we just introduced a minimum wage here in Hong Kong
[13:47] Fred123 Aiten: A major problem in the UK is that people are having children simply to get government handouts. They get more for having kids than working
[13:47] herman Bergson: Yes we all are when we pay taxes....
[13:47] Tessa Zalivstok: an enormous number of people went on welfare
[13:47] Bejiita Imako: ok
[13:47] Tessa Zalivstok: which was less than they were earning
[13:47] herman Bergson: But you can continue the story....
[13:48] herman Bergson: due to this redistribution one of the kids became a doctor who treated the childles s couple...:-)
[13:48] Debbie Dee (framdor): ;) nice
[13:48] Annie Brightstar (anniebrightstar): hmmm
[13:48] Bejiita Imako: thats nice
[13:48] Tessa Zalivstok: Herman I thought we were attacking utopias
[13:48] Kime Babenco: Lula, our ex president, introduced the ZERO FAME plan = no hunger plan... forcing every supermarket do distribute a monthly packet at a minimum prise... It was about 39 R$ , where the minimum salary was at that tim 270 R$ a month
[13:48] Mick Nerido: The mobility we have make us a less cohesive society
[13:49] Tessa Zalivstok: yours sounds just like one
[13:49] Annie Brightstar (anniebrightstar): It doesn't seem very likely Herman
[13:49] herman Bergson: laughs at Tesssa....
[13:49] Bejiita Imako:
[13:49] Tessa Zalivstok: well?
[13:49] Annie Brightstar (anniebrightstar): It doesn't fit with reality
[13:49] herman Bergson: These are the basics of a political debate Tessa....
[13:50] Tessa Zalivstok: let me put a different fantasy
[13:50] herman Bergson: Though in parlment the pictures are more complex indeed
[13:50] Tessa Zalivstok: a family earns 1000L
[13:50] Tessa Zalivstok: they pay 550 L in taxes
[13:50] herman Bergson: that is just hypothetical....just to have a number
[13:50] Tessa Zalivstok: which is what seems to be the average take in Europe at the moment
[13:50] Tessa Zalivstok: no
[13:51] Tessa Zalivstok: I'm wrong
[13:51] Tessa Zalivstok: it pays 300 L in taxes
[13:51] herman Bergson: yes...
[13:51] Bejiita Imako: thats 55 % tax
[13:51] Tessa Zalivstok: which isnt enough for the kid to become a doctor
[13:51] Kime Babenco: Let her finish
[13:51] Bejiita Imako: a bit much
[13:51] herman Bergson: I pay almost 50% of my income to taxes
[13:51] Tessa Zalivstok: so the government borrows a further 220L against that
[13:51] herman Bergson: There we go....
[13:52] Bejiita Imako: but i think there is a tax law that says that we  should pay more in tax in %¨
[13:52] herman Bergson: yes Tessa ...I know ...:-)
[13:52] Velvet (velvet.braham): Herman, that seems awfully high!
[13:52] Tessa Zalivstok: adding it to the previous 10000L which it has borrowed againstthe family's taxes
[13:52] herman Bergson: It is far more complicated than I described...
[13:52] Kime Babenco: Each country has a different system...
[13:52] Tessa Zalivstok: then goes to the bond markets to borrow the extra money
[13:52] herman Bergson: I just tried to elucidate a basic idea of social solidarity
[13:52] Tessa Zalivstok: hoping that everybody will believe that governments eventually pay back
[13:53] Kime Babenco: Maybe you would like to go back to ancient USSR with no unemployment and free medical ?
[13:53] Tessa Zalivstok: that sounds like a good idea
[13:53] herman Bergson: No Kime absolutely not...
[13:53] Tessa Zalivstok: why not herman
[13:53] Tessa Zalivstok: sounds good to me
[13:53] Kime Babenco: I was not serious... it was question agains the other extreme...
[13:54] Tessa Zalivstok: we just have to take filthy money off the table here
[13:54] herman Bergson: That deprived almost every citizen of a sense of solidarity...the state takes care of everything..
[13:54] Tessa Zalivstok: sorry
[13:54] herman Bergson: That was maximal government control....and it collapsed..
[13:54] Tessa Zalivstok: thats the basic idea of solidarity
[13:54] Kime Babenco: Yes, I agree...
[13:54] Kime Babenco: No long hours... because you salary remains the same...
[13:54] Tessa Zalivstok: so what's your working model herman?
[13:54] herman Bergson: Theoretically yes..Tessa....but it conflicts with human nature
[13:55] Bejiita Imako: there must be a balance between all free and government
[13:55] Tessa Zalivstok: which country makes it work?
[13:55] Tessa Zalivstok: oops
[13:55] Bejiita Imako: totally free and speeds out of control like a roler coaster that's the free market
[13:55] Tessa Zalivstok: country
[13:55] Kime Babenco: I guess... so far ... none
[13:55] herman Bergson: North Korea??? ^_^
[13:55] Tessa Zalivstok: heheh
[13:55] Bejiita Imako: but not too much control either
[13:55] Bejiita Imako: and must be done in the right way
[13:55] Tessa Zalivstok: where they're starving in the streets?
[13:55] Tessa Zalivstok: seriously herman
[13:56] Kime Babenco: Even in New York
[13:56] herman Bergson: I think there is a continuum.....
[13:56] Tessa Zalivstok: there must be some country which approaches your ideal
[13:56] Debbie Dee (framdor): Not mine...
[13:56] Bejiita Imako: north korea is terrible, the people dies while Kim bath in money and plan how to erradicate the planet with nuclear weapons
[13:56] herman Bergson: to the left absolute communism.....tot the right absolute anarchy…
[13:56] Debbie Dee (framdor): nor any around me in southern africa
[13:56] Tessa Zalivstok: yes but nthwere must be somewhere
[13:56] Lizzy Pleides: when we are able to manage greed, then we will get solidarity, ... because greed seems to be a fundamental quality of man
[13:56] Kime Babenco: Otherwise we would all go there, or try to...
[13:56] Tessa Zalivstok: otherwise the discussion seems empty
[13:57] Tessa Zalivstok whispers: is it Sweden?
[13:57] Kime Babenco: Perfection is not of this world
[13:57] Tessa Zalivstok: Cuba?
[13:57] herman Bergson: Yes Lizzy......I agree
[13:57] Tessa Zalivstok whispers: Armenia?
[13:58] Tessa Zalivstok: Monaco seems successful
[13:58] Debbie Dee (framdor): Greed is multiplied through advertising....
[13:58] Kime Babenco: Lol
[13:58] herman Bergson: Our whole debate here with respect to the utopia of the free market is the question
[13:58] herman Bergson: what is the role of a government in a society
[13:58] Tessa Zalivstok: yes but you posited a model
[13:58] Tessa Zalivstok: of the family with the young doctor
[13:58] Tessa Zalivstok: so
[13:58] Tessa Zalivstok: it seems you have something in mind
[13:59] Bejiita Imako: yes
[13:59] Bejiita Imako:
[13:59] Tessa Zalivstok: somewhere must at least approach this
[13:59] herman Bergson: I always have something in mind Tessa ^_^
[13:59] Kime Babenco: Antarctica
[13:59] Debbie Dee (framdor): (Laughing out Loud)
[13:59] Bejiita Imako: BRRRRR Antarctica
[13:59] Tessa Zalivstok: America with it's alleged torture doesn;t seem to be it
[13:59] Tessa Zalivstok: the old soviet union has been dismissed
[13:59] Bejiita Imako: cold
[14:00] Kime Babenco: Yes, I know... I am sorry
[14:00] Tessa Zalivstok: You seem to think Europe has no money
[14:00] herman Bergson: So I'll have my next lecture in mind now and thank you all for you creative participation in the discussion....
[14:00] Tessa Zalivstok: must be somewhere
[14:00] Lizzy Pleides: is the new Russia much better?
[14:00] Tessa Zalivstok: otherwise I'm depressed
[14:00] herman Bergson: I have some money Tessa...:-)
[14:01] Kime Babenco: There is plenty of money ... in the world...
[14:01] Tessa Zalivstok: Tessa hangs head
[14:01] Debbie Dee (framdor): Tessa, depression is appropriate.....
[14:01] herman Bergson: Feel free to continue..but officially...Class dismissed ^_^

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