Fire

January 23, 2017

Two things are undeniable about fire: it’s useful, and it’s dangerous.

Anyone who’s been burned by a match or gotten too close to a campfire knows the latter for a fact. Yet it’s true that fire is useful as well. From cooking our food to warming our homes to powering the entire industrial revolution (and many of our cities today), fire has been at the center of much of human progress. Fire is powerful.

Yet it’s still dangerous, as even children know. So we pin it in. We build our campfires in pits, we trap flames in our stoves, we build fireplaces in our houses, and we ensure that our power plants, if something should go wrong, can be safely contained. We hail the people who fight fires as heroes, and rightfully so, for they brave a dangerous element to save others trapped in the flames.

Capitalism is economic fire.

It’s undeniably useful. Capitalism is the engine that’s helped lift billions out of poverty, and helped to organize the world in a way that works. If we need to make ballpoint pens or personal computers, capitalism is the way to do it. It’s an engine for tremendous growth and prosperity.

But it’s dangerous as well, and this is the side of capitalism we often forget. Just because it doesn’t rage like a California wildfire doesn’t mean people aren’t getting burned. The lessons of the robber barons of the 19th century were well learned by generations of politicians. Capitalism, when left unchecked, runs like a conflagration through thatch roofs, and the people most harmed by it are those least able to run from the flames.

That’s why government must be vigilant, and must often stand in opposition to business interests. This doesn’t always feel right, and it certainly isn’t popular, because we don’t want our government seemingly standing in the way of greater economic attainment. Yet it must, not only as a firebreak to protect the poor, but to save capitalism from itself.

A wildfire in a suburb is of no benefit; I think we can agree on that. Unfettered capitalism is the same. It must be kept under control so that we can extract the greatest good we can from it—and yes, we have to be sure not to smother it either. We can’t let the fire go out. But neither can we let it burn too freely, and that’s the way the United States has been tilting for my entire adult life. A correction is needed. The robber barons are back, and rising inequality is them making their influence felt. We need to rebalance our economic lives, before the fire burns too hot and swallows us whole.

One final note: before anyone jumps into the comments to argue, please think about this for a while. Turn it over in your mind. Work from the assumption that you might be wrong. Acknowledging the dangers of capitalism does not require that you be “anti-business;” no one’s anti-fire. It just means respecting both its power and its danger, and looking for areas where the balance is off.

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By Stephen W. Gee

Author of Wage Slave Rebellion, Freelance Heroics, and about two good blog posts out of a hundred.

14 Comments

  1. Reply

    Steven

    “But neither can we let it burn too freely, and that’s the way the United States has been tilting for my entire adult life.”

    This I will somewhat disagree with, but I’m not trying to argue the point yet so much as to add more food for thought to the discussion.

    The burden of regulation under the previous administration was calculated in the billions per year, the number of annual startups was lower than the number of bankruptcies, and productivity and real wages have been mostly stagnant. That’s indicators of a smothered capitalism, not one raging out of control. On the other hand, during this same period several transnational companies made higher annual profits than most countries have in GDP. Economic inequality has shot through the roof and all the richest counties in the US are those in commuting distance of DC. Those are certainly indicators of an out of control capitalism. So I don’t think that it’s just a linear axis of whether capitalism is over/under controlled, but also of which variety of capitalism is prevailing.

    I realize that you probably don’t care for Steve Bannon for a number of reasons, but his speech at the Vatican during the Human Dignity Institute’s conference on poverty draws some interesting distinctions between types of capitalism and their outcomes. https://www.buzzfeed.com/lesterfeder/this-is-how-steve-bannon-sees-the-entire-world?utm_term=.tqN4rDe5qX#.pkQ2D14odQ

    What he calls an “enlightened capitalism” seems to have been vanishing from America. The idea of a moral responsibility does not seem to hold much sway anymore in the boardrooms. In contrast, both the “state-sponsored” crony capitalism and the “objectivist capitalism” seem to be growing (I.E. the fact that spending on regulatory lobbying had more impact on most companies’ profits than spending on research or product innovation; the push to legalize exploitative practices like prostitution).

    So I both agree and disagree. I think the good form of compassionate, morally responsible capitalism is being smothered for lack of air while the more dangerous forms of capitalism are already out of the fireplace and burning the house down.

    I suspect that we agree that having the wealthy and influencial accept more moral responsibility for how they earn and use that wealth would be a good and necessary thing. I likewise suspect that we will differ on how to best achieve that. The wealthy and the political already have too much overlap for me to trust either to hold the other accountable. The regulatory approach has already been tried and failed because those companies most in need of being held to account are also those most capable of twisting politics and regulation to their own benefit. I believe that nothing less than a cultural shift will do. Obviously, I would prefer a national return to moral authority (e.g. religious faith and practice), but something like this might also help: http://www.global-economic-symposium.org/knowledgebase/the-global-polity/sustainability-and-global-governance/proposals/resurrection-of-social-value-against-market-value-to-research-the-social-value-in-order-to-tackle-instability

    1. Reply

      Stephen W. Gee

      This post was meant more as a framework for how I see the interplay between the private (capitalism) and public (government) spheres. I wasn’t speaking specifically about any particular administration, but rather the general thrust of how society has approached business and government since Goldwater/Reagan at least. But hell, I’ll bite.

      The US economy and the US government are both big, complex things, and especially so when we account for how the world is more integrated now than it ever has been in the past, which means other economies and other governments impact ours to a large degree, and we can’t always do a whole lot about it. Yes, even we, the mighty United States, are sometimes all but powerless to impact that which impacts us, at least unilaterally. It kind of sucks.

      Which means that anyone other’n an expert—which doesn’t necessarily mean someone who’s credentialed, but certainly means someone who spends a lot of time reading, learning, and thinking about the issue—who thinks they know the reason why something is happening in either is probably wrong, or right by luck. Even me. Certainly me! Which is why I treated this as a broad framework. The government ought to be a check on business just as the people ought to be a check on government. The erosion of that dynamic, where being “pro-business” is seen as the only acceptable stance, is worrying. Politicians shouldn’t necessarily be anti-business, but they should be vigilant on our behalf.

      So, is the lower number of startups and wage stagnation due to excess regulation? I dunno. There’s evidence that it’s not in the latter case, because we’ve tried lower regulations (broadly) and wages were still stagnate, but the former is a riddle which is muuuuch harder to untangle. Lessening innovation in the US is really worrying, but even the experts have no flippin’ clue why it’s happening.

      I do wish less money and power was centralized in the DC metro area. I read an article on how we should send some government agencies to places like Detroit, get the ones who don’t need to be there out of that bubble and help revitalize some badass cities already chock full of amazing infrastructure. That sounded great to me. I’m also all for a return to moral responsibility among the rich, it’s just that I respect that changing a culture is hard, while changing laws are . . . also hard, but not nearly as hard as the other. And they sometimes help change the culture too.

      Besides, if the rich weren’t quite so rich, and the poor not quite so poor—and the middle class could effectively exist again—wouldn’t the rich get maligned less? Few would care if the rich have more if they themselves have enough. Seems like a good tradeoff to me.

      But I don’t know if any of those solutions would help. That was never my point. My point was that government needs to both nurture and contain the fire. If it is indeed smothering it in some places, it should change—and reasonable people can disagree about where those places are. If it’s running to hot in others, it should get with the smothering, and hold that wildfire back.

      The point is to look at it in these terms, so when government is throttling back growth in an area, it’s not doing something detestable. It’s doing its job—it just might be mistaken in that area. Or maybe not. Like I said, reasonable people can disagree.

  2. Reply

    John A

    I don’t disagree with you on most points. I think we just come to a different conclusion at the end. From my point of view Capitalism has been stifled so much the kindling can hardly start (small business). In many cases, things like patent protections and protections for big business are in my opinion the main cause of this. Things like the TPP are just another iteration of killing off small businesses for the needs of big businesses. I don’t necessarily think that our government is moving in the right direction as a whole, but I also don’t think that our government has been doing what it should up until now.

    1. Reply

      Stephen W. Gee

      Like I replied to Steven above, this post was about the framework, not the specifics. If you asked me, things like healthcare reform actually help small businesses—if that was taken care of by the state, that’s one less thing the new employer would have to worry about, and something freelancers wouldn’t literally die because they lack.

      Whereas with patent and copyright protections, they can be good, but they’re being seriously abused by some businesses. See: patent trolls, overly vague patents, copyrights that last way too long, etc. I like having copyright to my characters, that’s valuable, but the system has gotten out of control. I think it should be pushed back.

      (As for TPP, I’m not familiar enough with the economics of trade, and am in the process of reconsidering my stance, so I won’t comment on that. I’m just not sure enough where I stand.)

      But those are all details. Like I said above, reasonable people can disagree on the details. I’m more interested in the framework, which is that government ought to be a check on business, and that holding back growth should not necessarily be seen as an evil, but rather the governments job (though it can certainly make mistakes, either in having too heavy a hand or not heavy enough).

      If we agree on that, then the question becomes “Where should be use this tool [government] more, and where should we use it less?” That’s different than the point of view in some circles, which is that the tool shouldn’t be used at all.

      1. Reply

        John A

        Yes, One thing I think really hurting small businesses is the idea that minimum wage needs to be pushed up across the board. The problem with this is that it’s a “simple solution”, and as I think you agree with me, “simple solutions” rarely work, and almost certainly don’t work as well as a comprehensive solution would.

        Using the minimum wage as an example, it’s so easy to just legislate that it should be increased. Meanwhile, it doesn’t solve the actual problem of making sure grown adults can make a livable wage to support their family. Kids in high school usually do no need a livable wage. They need spending money to buy a phone, some music or games, and maybe a car if they are in rural or suburban america. Most city kids I knew just used public transport, though some of them did buy cars too. My point being, there is no reason a high school kid need to make 30-40k a year. Even the #1 job of highschoolers, McDonalds, is moving away from employees and to computers and robotics instead. When it costs less for a fast food company to buy a robot instead of hiring some local kid, I think our government has failed us with it’s policies.

        So what should the minimum wage laws look like? I certainly don’t know, but I think we can agree that this is something our government should be spending money and resources on researching. And I think we can also agree that

        1. John A

          … hit reply too soon…

          I think we can also agree that they should be doing more research before making policy changes. It seems to me that most of our legislation comes from “knee jerk” reactions to things, like the PATRIOT ACT after 9-11.

          Obviously researching policies before implementation them will take more time, but personally, I’d rather get it right, or at least closer to right.

        2. Stephen W. Gee

          Oh, I do agree that more research (and testing—research only goes so far, we need to test these policies out) is needed. The rub is that those in government change frequently enough that the tests done by one government can be defunded or ignored by another. I’m not sure the fix on that, honestly. Well, other’n a better voting system like Single-Transferable Vote / Ranked Choice Voting, but I’ve talked about that before. And even that might not smooth out the waves enough.

          As for the minimum wage though, I don’t agree, actually. I’m not all that concerned about high school kids having jobs when adults are being pushed down into those jobs, preventing many high school kids form getting them anyway. The trick with minimum wage is that it hasn’t risen to keep pace with inflation OR productivity; if it had risen to keep pace with both, it would be around $21 an hour by now! Crazy, right?

          The rub with the minimum wage is that when it’s pushed up across the board, more people across society have money, which means they have more money to spend, which is (largely) what will happen, which is good because money wants to be spent. It likes to get out there and play. (I have a post on this I’ve been playing with, but haven’t gotten it right yet.) That will cause money to circulate in the economy more, creating more economic activity and enriching more people.

          Not that it’s a certain fix, and raising it could certainly create other problems. Arguing about it is really pointless right now, though, if only because we’ve got tests to run. And they’re being run—a bunch of cities and states just raised their minimum wages, so we get to see how it works. Early indications from Seattle (which raised it a few years ago) are good, but we’re about to get a lot more data. After that, we simply gotta adopt whatever turns out to be the best option. Stay tuned for that.

  3. Reply

    Steven

    I don’t know if this is a technical glitch (I’m usually reading from an Android phone), but this comment system indents to the right for each new comment such that I can’t actually read anything past the 4th comment or so per post. I’ve been relying on the email notices to keep up, but it looks like I didn’t get at least one of your replies to me.

    1. Reply

      John A

      I see it indenting properly per thread. It probably does look pretty bad on a phone though. Maybe Stephen needs to change how deep a replay can go in the wordpress config.

    2. Reply

      Stephen W. Gee

      I just lowered the indents per thread by a level. I dunno if that’ll update previous threads, but going forward tell me if it’s still hard to read on mobile.

  4. Reply

    Paweł Kasperek

    Well written!
    Many of the most known conservative statesmen, from Bismarck to Churchill understood the need for social policies needed to mitigate bad effects of capitalism explosion in 19th century. There is probably no perfect balance between free market and state interventionism, and as for “working fix” it probably lies in different places for different cultures and nations – Texans would be hard pressed to fit into Scandinavian model and vice-versa.
    But at least since the Reagan-Thatcher era the pendulum has been swinging more and more towards free-market deregulation. Trade unions all but disappeared in some sectors of economy. The effects were middle-class shrinking with “working poor” growing. This had bad effects of the aggregate demand in the economy as millionaires can consume only so much as compared to broad middle class and upper working class.
    In the near term, I expect thoings to get even worse. Robotization is on the verge of making whole professions going extinct, from drivers to supermarket cashiers. Entire third world nations are bringing up their ever better educated young workforce into global market. And remedies proposed, as with the higher tariffs and walls to control movement of both wares and people might end up being worse than the situation itself now. Last time nations tried to tariff their way out of a recession was 1930s. We all know how it ended…

    1. Reply

      Stephen W. Gee

      The quest for perfection is an unending one, and different levels for different areas is certainly valid. We just need to make sure the fire doesn’t burn as hot as it has been. Turns out it’s not only inefficient and immoral, it’s mortally dangerous to democracy, as we’re seeing right now. Who knew?

      (Historians knew.)

      I’m not inherently worried about automation because I don’t think paid work is as important as fulfillment. This coming from someone who makes it a habit of doing free or ill-paid work (blogging here and at RandomC, writing books—hell, even my brewery sales job doesn’t pay well) because I want to and because I find fulfillment in it. Humans will find ways to find fulfillment, just so long as the value continues being created and it continues being distributed throughout the society that enables its existence. Something like a Universal Basic Income is going to be crucial going forward—though the part that does worry me is how we get from here to there. But that’s an issue for another post.

      1. Reply

        John A

        UBI seems like a great idea to me too. I was first introduced to it in a blog post from Patrick Rothfuss, I believe. I haven’t done a terrible amount of research into it, but the basics of it do sound like the direction we need to go world-wide, not just in poor nations. In the US I could see it supplementing or possibly even replacing welfare. I think there will always be moochers and free loaders, but I also think that it’s possible this gives people the jump-start they need, to buy a suit, get a haircut, have decent meals everyday and to get training/education they need to be employed or start their own business. Sometimes it sounds too good to be true to me.

        1. Stephen W. Gee

          That’s one of the nice things about UBI—if everyone is getting a check no matter what, it’s a lot simpler to implement then the complex welfare system. Just collect the money and cut everyone the same check. (Or maybe it depends on where you live, it won’t necessarily be THAT easy, but it’ll be way easier.) Plus, then there’s no stigma against getting the money if you lose your job, because you’ve ALWAYS gotten the money.

          Moochers and freeloaders don’t bother me the least. Desperate or downtrodden people are more expensive and more dangerous than someone who can afford a bed, some food, a video game or two but doesn’t contribute much. Besides, if you give people that starting point, you’re right—they can clean themselves up, get some decent training, and maybe have the time to get a job or start something cool without being desperate to survive.

          Of course, part of this is certainly because if we had UBI, I’d spend all my time writing books instead of having two other jobs to support myself, so y’all’d get more books from me. I think it’s a good idea even absent that, though : )

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