30 Comments
May 21Liked by Joe Mayall

Socialism is when things I don’t like exist. Checkmate liberal

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author

lol. You kid, but some people actually think that.

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May 21Liked by Joe Mayall

Oh I’m well aware.

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May 22Liked by Joe Mayall

Lol...Capitalism is when thing I don't like exist. It's like a mirror.

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Insightful comment

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May 21Liked by Joe Mayall

If people couldn’t have IPhones under a Socialist government that would be a good thing.

If people, for whatever reason, couldn’t buy things, that would be fine. There is entirely too much gack in the world, ie manufactured crap no one needs that give a simulacrum of “pleasure” for about 5 minutes and then end up in a landfill.

I was recently in Denmark which is more Socialist than most countries. The elderly are well taken care of, quality medical care is available, education is free through PhD programs. There is plenty of free enterprise and capitalism. I saw one down and out drunk in Copenhagen and no homelessness. The citizens seemed happy, healthy, appropriately dressed, working, and housed. If this is Socialism, sign me up.

If we must have governments, then their only duty is to work tirelessly to make the citizens happy and healthy.

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May 22Liked by Joe Mayall

Denmark is still capitalist and relies on the exploitation of the global south. That’s not a good example of socialism. Don’t conflate different culture to a different overall economic model. Like they’re a social democracy which strives to preserve the existence of wealth being under the majority control of the capitalist owning class. That’s a dangerous concept to leave untouched.

We can still have iPhones (or a socialist equivalent) under socialism. Technology is important but we need to ensure that the economic model that helps produce it doesn’t exploit people and resources to do it.

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May 22Liked by Joe Mayall

I stand corrected.

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May 22Liked by Joe Mayall

I mean that’s fine! I would look up leftist arguments against social democracy because while initially it can be enticing and definitively the most beneficial form of capitalism, it is still capitalism.

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China is the most economically and politically decentralized country on the Earth. The USA has had private sector central planning for decades, previously it was decentralized, this began to change in the 1930s but didn't change by much until the 1970s. Cosmically ironically, China more closely resembles the American Old Republic than contemporary America does.

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I'm not knowledgable enough about China's economy to fully recognize what you're saying. Could you elaborate on "China is the most economically and politically decentralized country on the Earth"?

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Hi! Sure! First, let's start with Fiscal. As you can see from the apt quote from a research paper below, China has the inverse of America and most other nations in fiscal power/responsibility distribution. In China, it’s the bottom levels of government that spend the most (and, crucially, the revenue is actually raised at that level, not transferred from the center, therefore it’s THEIR MONEY, so they have much more control than if it’s transferred in a managed and overseen way). Then, the regional governments are second most, and the national level governments are the least:

“China remains, by quantitative measures, among the most decentralized political systems in the world. Local governments — starting at the provincial level and working down to prefectural, county, township, and village governments — account for 50 percent of government revenue and almost 85 percent of expenditures. In Organisation for Economic Co-operation and Development countries, the averages are 20 and 33 percent, respectively. China’s central government commands just 15 percent of total government expenditure, compared to the Organisation for Economic Co-operation and Development average of 66 percent.” (Zielinski, 2023)

The local governments also wield far, far more policy powers than the USA’s do (the USA used to be like China is now for hundreds of years), because, not necessarily in the following order: 1) the state-owned firms spread across many sectors, but while they appear to be one national firm, the local governments have both big formal and big informal (read semi-illegal because they’re just so powerful they just do it) control over the operations of the firms in their area, making these state-owned firms, in some huge ways, actually many firms across many locations. 2) the local governments oftentimes engage in protectionist measures against the rest of China (as American cities did for hundreds of years), which may sound bad, but if done right, can be a very important tool for ensuring the sorts of redundancy and widespread distributions of opportunity that really enable people all over the place to thrive and express their talents. This, in turn, means many talents get to produce the activities, actions, trades, science, art, etc., that they are capable of, and this is shared with all in the nation because it’s only a slight protectionism (as the USA was when it was similar). They are still not far from fully integrated with each other (Mao described this as “let many flowers bloom”). 3) the local party branches are very, very strong and are in charge of their areas, and when they really want to, can override the central government in most cases. The local parties are fairly representative of the local population (over half won’t have degrees; many that do have technical degrees, so the usual sources, while larger than the share of the general population of the area, aren’t too much). The party balances out its spread by recruitment from occupation, area, and other sectors of the local area, and they have study sessions, micro conventions, etc. The various elements of the population really can actually change government policy in their local areas (just like the USA’s used to be able to back when its two parties were mass member parties and local governments had real ability to affect policy).

Reference:

Cappella Zielinski, R., & Gerstle, S. (2023). Paying the defense bill: Financing American and Chinese geostrategic competition. Texas National Security Review, 6(2), 57-78. https://tnsr.org/2023/04/paying-the-defense-bill-financing-american-and-chinese-geostrategic-competition/

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That's super interesting! The fact about local government expenditures being 50% is impressive. I'm far from adept in Chinese economics, but I imagine that's very useful for them, given some areas are heavy manufacturing while others are agricultural or urban.

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Yup! But it was 85% of expenditures!: “50 percent of government revenue and almost 85 percent of expenditures”. FYI, many of the counties it mentioned are actually the city governments in the case of the big cities, so like if it were in the USA, Miami and Miami-Dade county would be one government (the Chinese to English translation from their in English gov website is literally is city-county) and so in the cases of big cities it combines them and they have more of it (the rural areas generally have less because many but not all require subsidies and those numbers are averaged in her analysis), it seems their over half of revenue raising (but I don;t know if more than 85% in expenditures) in their areas than national and provincial combined

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Okay, thanks for clarifying. It sounds like you're well-informed about contemporary China. Would you consider yourself an expert?

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Nope, but thanks for asking that! I only know some stuff that I've researched or picked tacitly from certain areas of new over the years

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May 23Liked by Joe Mayall

Markets create inequality, whether at the level of the individual or the firm. A cooperative market economy would still tend to produce a high degree of wealth inequality that would need to be adjusted through redistributive taxation. Socialism is then forever fighting the tendency toward capitalist restoration. Reintroduction of markets in the USSR and China led to capitalist restoration, a result that is n it guaranteed but is highly probable. Socialism can tolerate a market for consumer goods, but a stable socialist economy requires planning in labor and capital goods.

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I agree. A strong taxation program and wealth redistribution will be necessary in any socialist state.

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Just finished the book 'I Survived Capitalism And All I Got Was This Lousy T-shirt' by Madeline Pendleton, and it's my official go to book to give to my friend's/families kids who are millennials or gen-z. I mention it because Madeline's company is a model for socialist business practices and her writing style is so genuine, accessable and inspiring. Highly recommend for all.

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There is nothing wrong with worker owner cooperatives. I wish more people sympathetic to socialism would argue for them. That being said, I hope you're not arguing for the Richard D. Wolff school of market socialism. The initial concept doesn't sound too bad, until he starts laying all sorts of taxpayer funded ways in which worker owner cooperatives would be favoured and privately owned or publicly traded companies would be penalised out of existence.

Again, there is nothing wrong with worker owner cooperatives. Indeed, one way of creating them would be to avoid the type of crony capitalist corporate bailouts which happen to protect shareholder when corporate boards behaves irresponsibly. Risk can and should be a part of investing, and socialising risks destroys one of the main arguments for profits. In many of these circumstances it wouldn't be at all infeasible for workers and managers to engage in a buy-out/buy-in, and in many ways would be desirable- in these scenarios it's often the case that the workforce knows exactly the series of bad decision which occurred on the part of the board and/or senior management and exactly how to reverse them.

But the thing to remember is that one doesn't want government picking winners and losers, because they are terrible at it. So no government force and coercion, picking one style of ownership over another. The key area where government can and should intervene is in preserving is competition in markets (it's one the reasons why the West is having such problems- because governments have been picking favourites through crony capitalism and erecting regulatory barriers to small new entrants for decades).

Norway is an interesting example to cite, as they privatised Statoil. They wanted the higher returns for their citizens which came from the necessary process of cutting waste and eliminating labour. This is one of the key areas where Marx failed conceptually. Far from being a terrible thing, the elimination of 'living labour' is exactly why people in the West enjoy an unprecedented living standard and aren't malnourished, toothless by 25 and dead by 35. 50% of the population once worked in agriculture engaged in backbreaking labour for recompense which was barely enough to feed themselves. The figure is somewhere between 1% and 2% in most advanced economies.

Don't get me wrong. The periods where market economics reallocates labour can be brutal. One of the reasons I left a good job in manufacturing because a substantial portion of the workforce I saw day-in day-out were fifty-plus year old men, who weren't going to fare very well when the market reallocated them. So I am supportive of concepts like statutory length of service redundancy payments which act as a disincentive to sack workers with thirty years of loyal service to their employer because there are younger cheaper workers available, and I believe the West misses a trick in failing to create a system of humane transitions which allows older workers to find their value later in life.

But make no mistake- labour elimination, doing more with less labour, is one the primary drivers of human progress, slowly pushing a larger portion of the population towards self-actualisation (creativity is one of few highly valuable attributes which isn't particularly strongly correlated with general intelligence). And Norway privatised Statoil, they wanted the higher returns for their citizens which came from higher productivity and fewer workers.

Again, this doesn't mean that worker owner cooperatives are a bad idea. Mondragon, the Basque Cooperative, is the largest worker owner cooperative in the world. It now employs 81,000. The CEO and finance team are paid only five times as much as the average worker- but they are considered heroes to their communities and as such are compensated in social status and psychic profits. But it's still fundamentally a (community) capitalist (market competition) model- only the ownership has changed. One of the things they do is invest substantial portions of their profits into new ventures, because they fully realise that in order to remain competitive they will need to cut labour through efficiency, and the investment serves to provide displaced workers with new internal jobs.

Remarkably, when their electrical goods division was forced to close due to fierce competition, particularly from China and South Korea, of the 3,000 workers who initially lost their jobs, all but 60 were eventually found new employment within Mondragon. It all boils down to means and ends. Means which employ force and coercion tend to fail disastrously, because government force and coercion is a difficult genie to put back in the bottle. Similarly, if your aim is to destroy capital or capitalism, then it generally tends to impoverish everyone. However, if your aim is a fundamentally fairer system, which introduces choice architecture to people who have never had it before, then that is necessarily a good thing- and people might be surprised at the number of people who have experience in highly lucrative, high performing roles, who might be willing to take a pay cut to reverse some of the civilizational devastation we are witnessing through resentment and the destruction of the American Dream. For some, Patriotism doesn't have price tag. And for those who are willing to sacrifice the anti-capitalism element of socialism all the Nordic Model countries can serve as an example. They've all abandoned socialism as an economic system, but still have many socialists in their countries and have achieved some of socialisms most precious aims.

They are market system, more so than America with its corporate capture and crony capitalism. One Danish Prime Minister described his country as a free market country with large social safety nets. They also address a lot of concerns for young people- although they tend to be less interventional than the US or the UK, scoring quite high on the Index of Economic Freedom, they single out two areas for special intervention- they have stronger worker protections and engage in quite substantial social engineering (through economic means) on climate.

Good essay. Quite thought provoking.

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I'm glad you enjoyed it! I'm not too familiar with Wolf's full picture of market socialism, but I do think it's beneficial to do everything within our power to dissuade private ownership. I wrote about one way we could do that, here. You might enjoy that.

https://www.joewrote.com/p/the-us-employee-ownership-bank-is

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I disagree. One of the reasons why Germany has been able to sustain a middle class for so long is because it has 29 family-owned companies each employing over 6,000 employees in high value manufacturing. It's a substantial contributing factor to the reason why Germany was an export surplus economy for so long. Of course, one cannot guarantee that capitalism will always produce these deeply paternalistic worker-friendly companies, that's usually more a function of culture than politics or economics, but one of the reason why they've managed to maintain these arrangements for so long- often dating back to the 1860s or 1880s is because of the complete lack of shareholders, eager for profits, in the equation.

A lot of the problems you perceive in capitalism are actually a function of culture. Mike Alexander a fellow Substack writer, makes a distinction between SC culture and SP culture. https://mikealexander.substack.com/p/shareholder-primacy-culture-and-american?utm_source=profile&utm_medium=reader2

The other issue is the rise of the PMC (professional management class). It's a function of a broader cultural malaise which Peter Turchin pointed to with his essay on the Overproduction of Elites. The private sector PMC is but one symptom of this social disease which is prolific in government, infests universities (making them too expensive), is prevalent in the NGO sector and even manifests in the corruption of infrastructure through 'soft' cost inflation, as well as the newfound wastefulness of management consultancies and the shifting of private equity towards pricing as a source of profits (otherwise known as rentier economics through housing).

In theory it's not a bad idea to push a substantial portion of the population towards higher education. Germany sends about 30% of its kids into higher education. With a larger science establishment, as operated in the UK, this figure could be as high as 40%, as many parts of the scientific endeavour, like lab work, aren't highly cognitive. But it's important to note that if one is going to run high levels of higher education, the bulk of the growth should be in technical training. It's not even a bad idea to sponsor creatives, provided courses offered allow creatives to pursue their dreams through applied methodologies- making the jump from general art to highly desirable goods like concept furniture or how to make a moped or motorbike a work of art.

But where the West went wrong was in believing that academic courses in the humanities or social sciences could help large swathes of the population. What it actually led to was the formation of a parasitic management class which is incredibly bloated. In most types of endeavour the percentage of managers to the workforce (offices, factories) shouldn't be higher than 1%, 2% at the most. The exception is highly technical specialist roles which are highly cognitive roles, where the figure should be closer one in thirty, but might need to be as low as one in five based upon the size of a department inside a company.

Instead, what we've now got in the West is effectively a PMC which is closer to 10%. Think about what that means for a second. It means that at least 20% of worker's labour value is automatically redistributed upwards to the PMC. There are also indirect costs. It's generally accepted that a worker costs at least twice as much as their salary, so lets call it 50% of total labour value. Of that 50%, perhaps 10% of the total is justifiable indirect costs. Another 10% is employer taxes which go to fund pensions and other social safety programs. Overall, that means that 50% of a workers labour value goes to funding the PMC which exists within corporations, government, etc. The tragedy of it is that America could easily afford to broaden its publicly funded healthcare to make it universal if it weren't for the cancerous growth of the professional management class.

Compare this to the SC culture of capitalism before the SP era. 30% gross profit margins might seem like a lot, until one considers that after taxes, inflation and risk, the real rate of return on capital over most of the healthy period of capitalism during the past 200 years was around 6%. Not a huge sum for workers to pay when one compares it to the 50% of worker value stolen by the parasitic PMC.

Oddly, there are a lot of comparisons to be made between the current version of capitalism being run in the West and communism and/or the less non-limited forms of socialism which were run outside of Western Europe. In communism, or the more expansive socialism run in South America or Southern/Eastern Europe, this class of people were called apparatchik. The Western variant may be better credentialed, but they are no less harmful. It's managers which are ruining the affluence of ordinary people in Western Europe and killing the American Dream.

Ironically, if socialism had actually left farming alone, didn't have a problem with private property or private ownership and prevented the formation of this parasitic intellectual class it might have stood a fairly reasonable chance of working, even if it wouldn't have produced the abundance of a true market system, complete with fierce competition.

PS, I know a lot of the numbers seem off, but I've used them more for illustrative purposes than as a genuine exercise in mathematics. The fact remains, managers- either directly or indirectly- take more from workers value than profits for capital ever did, by multiples.

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I'd disagree about Germany's equality being a product of culture. Germany has some of the strongest union laws in Europe. There process of codetermination, which sees workers appointed to board seats on large companies, is key to ensuring the most powerful franchises don't exploit their workers.

I wrote about the effect of these laws, here: https://www.joewrote.com/p/an-introduction-to-co-determination

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May 22Liked by Joe Mayall

Maybe I’m biased because they validate my own visions of socialism, but these are the kinds of articles I really like to see! Very well articulated and winsome.

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I'm glad you enjoy it!

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I’m glad you’re able to recognize your own bias, but I mean Joe here is relying on an actual understanding of socialist thinking and economics. Capitalists have the Wall Street Journal for their circlejerk articles that validate their views, but whether those articles reflect the reality of what leftist views are is questionable. We here can reflect accurate views of capitalism, and then critique and counterpoint them with accurate views of leftist thought

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Agreed. Any workable system can work. But the predominant psychological configurations of the people and the illusions and deprivations that rule individuals and nations matter much more than IDEOLOGIES and color any system adopted.

The problem thus far (because people are not healed yet) is greedy narcissists who are only in it for themselves hijack ANY system for personal benefit at everyone’s expense. This is the state of our world and it happens bc children are not well cared for and do not become healthy adults who can maintain a smoothly functioning society.

But things are not so black and white. Even within the same group or family, often even within the same individual, there are elements of both.

Hence, checks and balances that are not compromised are needed (for example, by Jeff Epstein’s & Clive Davis/P. Diddy’s de facto Jew global conspiracy and their idiotic minions of all ethnicities, that has compromised governments to maintain their parasitical Jew agenda) to prevent corruption.

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