The creator of The Wire, David Simon, delivered an interesting speech at “The Festival of Dangerous Ideas” in Australia. He starts off by saying that he is not a Marxist; that Marx had the proper diagnosis but the wrong prescription for economic woes. But Simon thinks he has found the cure, a mixed economy where neither side “wins”; not complete socialism, not complete capitalism. Simon points out many real problems in America that culminate to a scary trend, but then claims that today’s America is the result of Capitalism winning. The suspension of disbelief required to believe his argument is monumental, because we have had a mixed economy for some time, just as Simon describes. His cure is the disease.
What Simon pegs correctly is that there is a large and arguably growing divide in America between the rich and poor. Unfortunately like so many, David Simon cannot tell the difference between Big Business and Capitalism. You see there is more than one way to become wealthy in a crony capitalist system, or mixed economy. One is to go the old route and work hard, innovate, and deliver a better product than your competitors; this works as long as you don’t cross paths with someone from the other route. This second path to wealth still involves capital, but the investment is in the corruption of government, and its a fixed game. Buy the politician and he will regulate your competitor out of business, or subsidize you into business. Telling these two wealthy apart is key to understanding our economy, and what needs to be done in order to lessen the divide between the rich and poor.
A key aspect of Simon’s argument is the staple of the Keynesians who advocate a mixed economy, that after World War II the U.S. was an economic powerhouse. This, says Simon, was due to the fact that neither side won, that there were some wins for labor, and some wins for capital; of course the referee was government. And this argument can seem viable if you ignore the half of the world that was bombed beyond economic viability during WWII, meaning: who else had the capability to manufacture besides America? WWII created a lack of supply with the same world-wide demand, that’s why the American economy boomed, and we had enough left over to satiate the mixed economy folks, just like Neville Chamberlin’s appeasement would keep Germany from expanding their empire.
Ultimately we abandoned that and believed in the idea of trickle-down and the idea of the market economy and the market knows best, to the point where now libertarianism in my country is actually being taken seriously as an intelligent mode of political thought. It’s astonishing to me. But it is. People are saying I don’t need anything but my own ability to earn a profit. I’m not connected to society. I don’t care how the road got built, I don’t care where the firefighter comes from, I don’t care who educates the kids other than my kids. I am me. It’s the triumph of the self. I am me, hear me roar.
Oh how little Simon understands libertarianism. We are the market! Saying the market knows best, is synonymous with saying 300 million Americans know best, or that every individual knows his own needs best. And if not the market, then who, the government? Somehow 1,000 people in Washington D.C. know better than the 300 million Americans living their lives? And does Simon honestly believe that there would be no market for firefighters if the government didn’t provide them? Yes, people enter a social agreement like insurance where a pool of people working together spreads risk, but the key difference between this and socialism is the choice of the individual to participate, or not, or choose which fire station gives him the best bang for his buck.
As for the roads, the first highway built in Alaska was a privately owned toll road. Libertarians don’t think that its every man for himself, we recognize the value in voluntary collectives where each individual has something to gain, and something to give. I’ll build a highway, you pay the toll. Is that so much worse than, I take your money, and will probably get around to building and maintaining a highway, and it might go to the place you want it to go? And public education is a prime example of the results of a mixed economy; we went from the Department of Education spending $14 billion in 1980, to $68 billion in 2012, and have dumber kids. So when Simon pictures libertarians saying “I’m not connected to society”, what they are really saying is, “I am not forced to connect to society at arbitrary points. I will decide where to connect through mutually beneficial transactions”. Again, we are the market. If you are connected to the market, you are connected to society. Simon pictures 300 million Americans holding hands; I picture 300 million Americans specializing in a skill, and trading their labor. The latter is a realistic goal, and the former would produce nothing.
Simon thinks it all comes down to greed, and there is an “inability to see that we’re all connected”. I believe he has an inability to see that the market connects us all, in the best way possible, a way that precludes force as a viable medium… unless we allow a mixed, crony capitalist economy. Then we will all be connected by force. Simon speaks of society and the market as if they are not made up of individuals, as if they are entities which exist independent of humans to hand down rules, and hand out necessities.
I’m utterly committed to the idea that capitalism has to be the way we generate mass wealth in the coming century. That argument’s over. But the idea that it’s not going to be married to a social compact, that how you distribute the benefits of capitalism isn’t going to include everyone in the society to a reasonable extent, that’s astonishing to me.
Capitalism is not a zero sum game, there is not a pie that everyone has to scramble to grab a piece. Do you have an empty backyard? There could be crops there. If there are vegetables, who did you take them from, who gave them to you? You worked the earth, you planted the seeds, you watered the plants, and you picked the vegetables. You just created wealth, and you didn’t have to beg for it to “be distributed” nor did you have to take it from someone else. The role of government is to keep others from taking you crops, the product of your labor.
And Simon talks as if libertarians would just ignore people who cannot help themselves, as if the only possible benefit we can see for ourselves is monetary. You know what benefits me? Giving money to an effective charity. It benefits me that I feel better about my contribution to society. It benefits anyone who believes in karma, in an afterlife, or in any kind of spirituality. It benefits my family because they don’t have to watch people in our society suffer. Profit may be the motive of corporations, but the individuals behind them are not motivated by greed, but by the desire to live as happy and healthy a life as possible.
Money is the means for most libertarians, not the ends. And the market (the people) can decide which companies receive business, which could exclusively be companies who deliver some humanitarian need with a portion of their profits. If it is profit driven all the better, we have the power to make it economically unfeasible for companies to not offer some charity from their profits. The economic self interest of corporations will lead to a plethora of social benefits, if we, the market, demand this. The mixed economy that Simon exalts hinders this dynamic. It dissolves market pressure for companies to provide for those who cannot provide for themselves, by putting the responsibility on the ineffective government.
And one of the things that capital would want unequivocally and for certain is the diminishment of labour. They would want labour to be diminished because labour’s a cost. And if labour is diminished, let’s translate that: in human terms, it means human beings are worth less.
Everyone is so obsessed with labor as we see it now, why are they so afraid of change? We’ve traded factory workers for IT specialists, ditch diggers for machine operators, and apothecaries for pharmacists; every time a job becomes obsolete, a new one arises, because we all have the equivalent in our brains to a backyard where we could grow crops. There is always another need to fill, skill to gain, product to offer. Advocating a mixed economy is the same as saying we need to use force to suppress advancements in production and distribution in order to preserve these particular jobs at this particular time. We sacrifice the advance of society as a whole, for the preservation of a segment of labor.
There are an infinite amount of jobs that could arise to fill the next need of society when the old one has been streamlined. Just like our backyard that we can choose to keep a dirt lot, or make into a field of crops, so can we choose to keep our minds blank, or grow a garden of skills. We have the ability to create, to produce, and the only thing that can stop us is force. In a free market there is no force, just competition and mutually beneficial transactions. By definition a mixed economy, crony capitalism, market intervention, or just a little bit of Marx will include force. Capitalism hasn’t created the negative aspects of our economy, intervention in the free market has.
But Simon’s argument against capitalism in favor of a mixed economy doesn’t end there. Come back tomorrow to read “Two Americas: David Simon’s Cure is Really the Disease: Part II”.