You got me there. Any amateur auto mechanic can listen to your engine and say it's out of tune. It takes more skill to actually tune it well.
I am more interested in the short run in trying to find principles that look kind of fair, to compete with the libertarian ideal that every large corporation should have the freedom to do whatever it wants.
After all, when the government lets people own their businesses or capital and the government decides what to do with it, isn't that exactly what they used to call fascism? It has a bad reputation. I'd prefer not to have to argue in favor of fascism, so I need something else. And yet some government regulation is needed.
My first thought is that we should try to limit the size of very entity except government (and government too, in special ways). Businesses which are too big have too much political clout and TBTF is bad. I like the idea of setting a maximum size for corporations, and when one reaches that size it must divide in two, like a bacterium or something. Of course when lots of small corporations organize together for a big project, then they might be organized enough to lobby effectively and collectively they may be TBTF. I'm not sure how to handle that, but keeping individual businesses reasonably small seems like a good start.
I'm not sure we ought to have private fractional-reserve banks. I don't see any way to justify it morally, and 2008 says we can't depend on them to deliver good results.
So, if you have money you want to spend today on consumption, you should have a whole lot of say about it. You should be able to buy anything for sale that isn't considered too socially damaging. (Like, we probably ought to try to limit iocane sales.)
But we need some sort of limits on businesses. Size. Maybe businesses should make their records transparent. If they couldn't have secrets it would change the game, maybe for the better.
Government probably should have some levers to affect the economy, and those ought to be kind of general, slow-acting levers. There's the problem that politicians like CEOs can't afford to look at the long-run when their short-run survival is at stake. They have to win in the short run and let the future take care of itself unless they have the leisure to plan. If they have too much immediate power they will use it to win elections and then deal with the consequences after they win. I'm not sure what to do about that.
So I have some ideas I think would be improvements, but designing a system that actually tunes the economy to efficiently do what we want it to? That looks hard. Especially when any statistics you use to decide what to do about the whole economy, will start getting manipulated whenever people realize that you're using them for that. Though maybe if the various economic entities were smaller, it would be harder for them to do that....
]]>Not precisely. Fascism is when a specific political party recognizes no limits to it's responsibility to pursue the interests of the nation as a whole. Democracy centers the power to pursue the public interest in the public, acting through their elected representatives. The will of the people is generally also limited by a code of individual and minority rights (in the US, this is the so-called "Bill of Rights"; elsewhere, it's the UN "Declaration of Rights". In the US, one problem we have is that the Supreme Court has, over time, re-interpreted the Constitution to give corporations certain rights that were originally awarded to individuals (such as the right to own property, or to sign contracts). More recently, they have given them rights of free speech, with well-known consequences for our electoral process. So one approach is to start taking away some of the legal rights that corporations have won in recent years.
Another approach is the idea of writing "social responsibility" clauses into corporate legal status charters. Right now, the legal obligation of the officers of a US corporation is strongly slanted toward protecting the value of the shares. We could easily re-write the law so that other considerations are also required, such as environmental or social impact statements with respect to their business operations.
Limiting the size of corporations is very similar to the idea of not letting one business dominate any single market. We already have those protections, but they have been significantly weakened in recent decades. We could make those rules a lot tougher- requiring mergers, for example, to meet more stringent requirements in terms of total percent of market (this would undue a lot of cable media conglomerates, for example).
Another area that we could make a lot tougher is accounting practices and a requirement to make the results of an annual financial audit public. In order for securities to be priced effectively the market has to know the true value of a corporation and the amount of risk associated with it's shares. Right now, that information is only partially available, so we could open that up.
Yet another practice I'm interested in exploring is the so-called "German Model" where employee and community representatives get a certain number of votes on the shareholders board. That creates an accountability right in the heart of corporate power, and certainly doesn't seem to have undermined the productivity of the German economy.
I guess the point I'm getting at is that there is no one solution to this problem, but there are a lot of little ones. You can tell which ones are important because they are the ones that the corporations themselves have lobbied Congress to loosen over the years.
One problem I would like to see a solution to is the "one dominant employer" problem, whereas a large business dominates a local economy to such an extent they can essentially write their own tax laws and zoning regulations, and when the decide to leave, the community is devastated. Walmart comes to mind. That's another reason I like the "local business incubator" idea; lots of mid-size businesses diversify the economy, and provide a political counter-balance to the power of the smaller number of larger businesses.
As for banks, there were lots of problems in 2008, but one of the main ones had been banking de-regulation. We could easily place limits on how much of it's account holders savings they can invest in buying up debt and securities, as opposed to investing it in new start-ups or or what-not. We can also place stricter controls on who they lend their money to, and under what terms, so that the total amount of risk in the system can be managed. If some form of debt-relief were written into home mortgages, you would see the banks suddenly become a lot more conservative in their lending practices.
The government is a tougher problem: "If they have too much immediate power they will use it to win elections and then deal with the consequences after they win."
Well, yes, that's endemic to representative democracy. And the underlying reason they do that is because the public votes primarily based on emotion, not intellectual analysis. Is there some way to give technical experts some formal but appropriate amount of leverage in the policy-making process? But that's a whole other discussion.
]]>Your definition of fascism to me would fit the term "authoritarianism" in general. Fascists allowed and encouraged private ownership, but they planned what private businesses should do and punished them for not following the plans. To some extent they separated ownership from control.
To some extent publicly-owned corporations today separate ownership from control. The owners of large blocks of stock get some influence over the corporations, but most owners mostly have the choice of keeping the stock or selling it for whatever they can get. Sometimes management gets most of the control, or control can reside in some other corporation that indirectly holds stock etc. If you have no choice but to let WalMart look at your books and decide how much you will sell to them at a 3% to 5% markup, I'd say you've lost control.
The problem is that lots of US voters do not approve of government planning. They would probably approve even less of unaccountable private businesses doing that planning. The least offensive approach is for nobody to plan, and things just automatically work out fine on their own. Of course, that's not exactly reliable....
... So one approach is to start taking away some of the legal rights that corporations have won in recent years.
Yes. But then, the people who argue that government does no good, argue that "regulatory capture" will mostly prevent the government from enforcing good laws against large corporations. When bureaucrats who make $200,000 or less per year go up against managers who make tens of millions or more, they can be intimidated.
Limiting the size of corporations is very similar to the idea of not letting one business dominate any single market.
Yes. One virtue of this approach is that it (in theory) could be made simple and clear. A corporation can argue that they are smaller than they really are, but they can't argue that indefinitely and they can be forced to split into smaller corporations that should be more competitive. I think it's easier to show a corporation's number of employees, profit, cash-flow, etc than many of the things we would like to regulate about large corporations. It wouldn't help keep single markets from being dominated as well because different markets are different sizes. A small market could be dominated by a corporation that would be much too small to dominate a larger market. But setting a maximum would help keep individual corporations from being large enough to dominate the government.
I guess the point I'm getting at is that there is no one solution to this problem, but there are a lot of little ones.
Yes!
You can tell which ones are important because they are the ones that the corporations themselves have lobbied Congress to loosen over the years.
You can tell those have been important battlegrounds. There might be others that would be important if the challenges were made.
As for banks, there were lots of problems in 2008, but one of the main ones had been banking de-regulation.
It's like -- prostitution might work out better if it was regulated. We could have rules about how hard a pimp can hit his women, how much he must pay them if he injures them, how much of the money he must give them, their contracts must state how long they are required to stay with him, and the police will only return those who run away if their contracts haven't expired, etc. That might reduce the excesses. On the other hand, it might be better not to legalize pimps at all. Similarly, when the banking industry fails we can argue that it was insufficiently regulated, but it might be better if it was just plain shut down, and private bank loans illegal to lend though legal to borrow.
... the public votes primarily based on emotion, not intellectual analysis. Is there some way to give technical experts some formal but appropriate amount of leverage in the policy-making process?
How do we know who's an expert? The public isn't just emotional, also they know that they can't predict very well. They can't judge politicians on long-run predicted economic benefits, because those might not happen.
I would tend to suggest that we let experts make predictions about important economic variables, and give them more say in what to do according to how well their predictions come true. But this has its own problems since the indicators which are worth following will change over time.
The big US example of experts given special rights is the Federal Reserve. Fed governors are important people and particularly the Chairman can make the economy quake just by saying a few choice words. And of course people try to influence them. Greenspan was declared a genius because he kept lending more when the conventional wisdom said it would cause a catastrophe. But Greenspan saw that the conventional wisdom was wrong and everything would be fine. It's possible that Bush threatened him with assassination if he didn't do that.... I have no evidence of that, it's just a possibility....
If we give experts special leverage, we are betting that they are right. I'd like in each individual case to see objective evidence that they're likely to be right.
]]>Yes, all that you say regarding Fascism is true, the problem is that it's also true for many other political systems. "State Capitalism" systems like contemporary Russia and China do more or less the same thing, but arent Fascist. Unfortunately I've never come across an objective definition of the unique features of Fascism that included all instances and excluded all alternatives. My point is that the term itself doesnt seem very useful to me. Anyway...
The divergence between owners and managers (sometimes called the "Agency Problem") is problematic for the economy at large. One of the biggest issues in my opinion is that, beyond a certain point, large shareholders are not greatly invested in the future success of the company they own. Such investors usually have money in a wide spectrum of companies in a range of economic sectors, so unless the entire global economy goes belly up they can afford to be sanguine regarding any one company they happen to own. They are not even overly concerned if the CEO happens to be running one of them into the ground in order to make a short term profit off of his own shares. We are all aware of the problems this causes the rest of us.
"But then, the people who argue that government does no good, argue that "regulatory capture" will mostly prevent the government from enforcing good laws against large corporations."
I think this problem itself is overblown somewhat, but the real barrier here is not objective reality, but the political opinions of the people who believe this is true. It has traction because policies which are based on this world-view also happen to be in the interest of the very wealthy. This problem is somewhat self-correcting- it generally is only popular when the economy is doing relatively well. During recessions and depressions, the masses tend to turn the other way. That's how we ended up with a social safety net in the first place. Sooner or later, pursuing policies that benefit only the wealthy will tank the economy, and that will produce a political backlash. The question is whether or not we have to wait until then to design a more rational system...
"A small market could be dominated by a corporation that would be much too small to dominate a larger market. But setting a maximum would help keep individual corporations from being large enough to dominate the government."
The key metric here is the relative size of a business' closest competitors. This is relatively easy to measure, which helps explain how we have anti-monopolist laws in the first place. I have no idea what the "maximum desirable ratio" might be, but if one company's market share is greater than that of all it's direct competitors combined, that can never be good for consumers. Even two or three "top dogs" isn't necessarily healthy. My best guess is that 5 or 6 businesses all competing with more or less equal market share is idea, so if any one company manages to capture more than, say 30% I would want the SEC to take a close look at that. We arent anywhere near that stringent, however.
I would guess that it's trivially easy to show that banking brings more benefits, and imposes fewer costs, on the community than prostitution does.
I think we have a lot more examples of expertise in government, and more successful examples, than the Fed. The EPA, the SEC, NOAA, NASA, FEMA (currently), the FDA, and so on. Most of them are work reasonably well most of the time. The problem isnt how you incorporate expertise into government policy, it's how to keep partisanship out of it when the stakes are high. We can improve workplace safety by orders of magnitude, but we cant reliable balance the budget, which in many ways is a simpler problem.
One solution is public education- we could spend far more resources on teaching our children to evaluate claims based on evidence than we do (my own students, at the college level, clearly have very little idea how to do this). This could, at the very least, help create a political climate in which other changes could then fall within the "Overton Window" (such as some of the things we are discussing here).
But that doesnt solve the problem that technical experts are also human, and are just as susceptible to cognitive bias, or abuse of their influence, as anyone else is. One problem is that our culture over-relies on the opinions of individual researchers. We tend to treat each one as an "expert witness" and try to compare them to each other to determine which seems more plausible. Whereas we would usually do better to try and identify a "scientific consensus" on a particular issue and rely on that. No one scientist might endorse the consensus but most of them would average around it, and all else being equal that position is maximally likely to be the correct one (this approach has the additional benefit of being relatively easy to update over time). I bet it could even be automated- how hard could it be to program an expert system to collect published articles on a particular topic and identify a "median" opinion? It would then be simple to test the predictions of this median opinion and rate its' track record over time. Make it self-learning and it wouldnt be long before it did better than any individual human (although the singluarity people might have a heart attack over this!).
]]>There's an argument (I came across it being advanced in respect of the rabid puppies) that fascism is an aesthetic, not a philosophy. It would explain the difficulty defining fascism's political and economic features.
I bet it could even be automated- how hard could it be to program an expert system to collect published articles on a particular topic and identify a "median" opinion? It would then be simple to test the predictions of this median opinion and rate its' track record over time.
Now define "published," in a word where "predatory publishers" are a thing.
:-P
That was a fascinating link, thanks.
And thanks for commenting!
]]>That's very close to being true. It's not close to the reality, but it has a kernel of truth that's essential to understanding it.
Facade of Italian Fascist Headquarters
Without diving into the artistic history of the movement, and the use of art in all Fascist movements (Triumph of the Will vrs the Communist versions such as Battleship Potemkin etc c.f. Tarkovsky's comments on Eisenstein and the failure of the modernist trend in early Soviet film), the issue boils down to:
Americans fundamentally lack a certain mental schema to understand Fascism (the historical version), because the public cultural space has always been dominated by Advertising (Capital) or Puritanical Churches.
That's not the case in Europe.
If you need to parse it out, look up the Unicorn as the national animal of Scotland (no, really) and some diabolical propaganda statues outside of a nationally famous Cathedral.
Yes, they made the unicorn look like a donkey. No, really. It was 100% deliberate.
]]>Americans probably cant quite understand fascism the way Europeans do, but we have our own forms of cultish political extremists, puritanical churches very much included.
]]>As for the Vietnam vets- I'm not comfortable calling such people "fascist"- I think it's a bit unfair considering that they seem otherwise able to think for themselves. In general I have a bias against stretching terms too broadly- keeping definitions somewhat precise allows useful distinctions to be made.
]]>I think we can program the expert system to detect publishing fees and delete from the database. Keep criticizing- it makes ideas stronger!Bit of a baby/bathwater solution, that.
I said "proto-" for a reason. My caricature statement isn't, but the map from believing it to fascism is easily drawn.
]]>Ἑσπερίδας θ᾽, ᾗς μῆλα πέρην κλυτοῦ Ὠκεανοῖο
χρύσεα καλὰ μέλουσι φέροντά τε δένδρεα καρπόν.
Καὶ Μοίρας καὶ Κῆρας ἐγείνατο νηλεοποίνους,
[Κλωθώ τε Λάχεσίν τε καὶ Ἄτροπον, αἵτε βροτοῖσι
γεινομένοισι διδοῦσιν ἔχειν ἀγαθόν τε κακόν τε,]
αἵτ᾽ ἀνδρῶν τε θεῶν τε παραιβασίας ἐφέπουσιν·
οὐδέ ποτε λήγουσι θεαὶ δεινοῖο χόλοιο,
πρίν γ᾽ ἀπὸ τῷ δώωσι κακὴν ὄπιν, ὅς τις ἁμάρτῃ.
Τίκτε δὲ καὶ Νέμεσιν, πῆμα θνητοῖσι βροτοῖσι,
Νὺξ ὀλοή· μετὰ τὴν δ᾽ Ἀπάτην τέκε καὶ Φιλότητα
Γῆράς τ᾽ οὐλόμενον, καὶ Ἔριν τέκε καρτερόθυμον.
It's not like this is hard.
You killed my sister and my mother.
]]>