Throughly delightful. I believe Harvard Business School would profit enormously were you on their lecture staff. Boesky is still too highly regarded there, and your purview is exquisite. Damn fine, especially in placing Reagan in true perpective and debunking the myth that Clinton done ‘good’ when clearly he bears enormous responsibility for extending some of Reagan’s worst policies and refusing to acknowlege the consequences of NAFTA. And aye, pirates and brigands have held TOTAL sway for all of the last seven years, a fact seemingly still working its tortured way into ‘mainstream’ consciousness.

However, the conflation of ‘Democracy’ with ‘Capitalism’ is not some wee mental error confined to the minds of a few confused souls.

When ‘Freedom’ is immediately rephrased as ‘free enterprise’ by the government of this nation and all its minions, as it was in Iraq, then we must, reasonably enough, conclude that such was and is the ‘official’ intention.

Arnie, I enjoy your insights very much, but obviously, I disagree with some of what you are claiming.

For over sixty years, the deliberate confusion of ‘Democracy’ with ‘Capitalism’ has been one of the signal ‘attributes’ of American Foreign Policy: from the Cold-War, where it was a major theme, to our vicious assaults upon nations in Central America who had the temerity to choose to install ‘leftist’ (read: ‘Commie’) leadership, threatening, we claimed, our ‘interests’ (read: huge profits for corporations) we have made quite clear to everyone else that ‘Democracy’ is a Trojan horse, ridden just long-enough to add veneer but looking more like a gussied-up saw-horse than a noble steed, our real agenda, clearly has been to satisfy greed.

The point of most-serious conflation is ‘war’.

When WAR becomes too profitable, ‘patriots’ demand its wholesale application, and the only ‘good’ economic policy then becomes, ‘more’!

Not much to build a future upon, nor likely to win us friends or engender genuine ‘respect’.

Domestically, we’ve far more ‘capitalism’ than ‘democracy’ as you may have noticed…

And, it would appear, that ‘capitalism’ as she is now ‘practiced’ is NOT a viable economic system, especially in the ‘long-run’. Which ‘run’ thanks to ‘capitalism’ and human stupification, we now ‘have’ only most provisionally. (Of course, that is always the case, human tenure on the planet not being guaranteed.) But, hey don’t tell the ‘folks’. they’re already confused – but then, that’s the idea.

Also: we may yet get to experience the ‘collapse of complex societies.’

As to ‘third-world’ considerations: boiled down to its essence that ’status’ reflects ‘vulnerability’ not quaint social custom or having bananas as chief export item.

The ‘haves’ and the ‘have mores’ are doing very well. However, as you may have heard, many people are ‘one paycheck away’ from disaster or ruin. That qualifies as ‘vulnerable’.

The evident destruction of the middle class has even more dire implication.

Vulnerability = consequence – the ability of other nations to ‘manage’ our domestic economic policies, just as we have done to others. But, as they say, ‘turn-about’ is ‘fair’ play …

Also, as an not-tiny nit-pick, ‘wealth’ comes from ‘resources’ and what people do with them. Money does NOT, of and by itself, ‘create’ wealth, it cannot. Money represents extant ‘wealth’ but it is only a means of exchange, a marker to determine how much ‘wealth’ there actually is. Printing more money does not make us more wealthy, in fact, if no actual ‘wealth’ underwrites these ‘new’ monies, we are rendered less wealthy and certainly less ‘honest’.

When you speak of the ‘excess’ of the wealthy, you must of course realize that genuine ‘costs’ attend such ‘excess’ usually NOT paid for by those holding such ‘excess’ or enjoying the spending of such ‘excess’.

Otherwise, I agree with much of what you’ve said and hope that ‘Dumb and Dumber’ will, indeed, trundle off to some greater ‘reward’.

In the 80s, I recall thinking that much of the wealth was generated through tricky financial instruments. It seemed to be largely based on gambling about the economy rather than on actually making useful things well.

The Reagan years consolidated the military-industrial complex that Eisenhower warned about. (Republicans are good at defense spending, but not particularly good at defense.)

The Reagan administration did not enforce the Fairness Doctrine which has had a terrible affect how journalism functions in this democracy. (It has, in fact contributed to the weakening of our democratic institutions.)

The Reagan administration did not prosecute anti-trust cases (which has concentrated telecommunications, media, banking, insurance, pharmacy, and many other industries).

The Reagan administration was anti-environmental. (Think James Watt)

People tend not remember this, but the Reagan administration was terribly corrupt. (I don’t believe Reagan himself was personally corrupt [although I do think he was the 2nd worst president in my life time], but he served an important obfuscating role for very corrupt interests.) Behind the scenes, the United States (or significant actors on the behalf of this group of same right-wing people that are tormenting us now) were engaged a number of sickening enterprises-very actively supporting right-wing dictatorships in Central and South America, and behind-the-scenes machinations with Afghanistan, Iraq, and even Iran when it suited them.

It was also the start of the systematic attack on Labor (and therefore, the underlying presumptions of people who must work for a living, which is most of us) through the destruction of PATCO (the Air Traffic Controllers’ union). Of course, the anti-labor interests in this country had been very good at getting ordinary people NOT to understand the significance of organized labor to their own well-being historically, so ordinary, non-union people tended to side with the owners in this fight.

It was the period when outright greed was legitimated as natural and expectable. But the mystification went beyond that: Greediness was elevated to a desirable quality in men, indeed it was pushed as moral principle. Anybody who was insufficiently greedy and predatory was painted as weak, liberal, un-manly. (We see that smearing perfected and still operative today; although I think it might not be quite as persuasive as it used to be.)

We saw a lot of prosperity in the 90s. Some of it was real (the communications revolution, for one thing, and I do think paying down the debt did strengthen the economy). But some of it was illusory, and much of it was based on conditions we will never see again.

Clinton contributed to these developments by bringing NAFTA into being and further deregulating Telecommunications.

The Bush/Cheney years are a whole different animal. What was done in the Reagan years seems so mild and so quaint in comparison.

Bush/Cheney’s goal has been to *VERY AGGRESSIVELY* redistribute wealth back to the wealthy (You’ve heard of “trickle down”? Well this policy is called “Tsunami up”!), to grab as much power as possible while functioning as the Executive Branch, but working to effectively neuter all the bodies in the U.S. government and in the world that could possibly prosecute them for what they did while they were in office, and what they plan to do when they leave.

I call this the Late Pirate stage of global capitalism.

This administration has worked assiduously, using all the means at its disposal, legal, extra-legal, and illegal, to weaken individual rights and strengthen the rights and privileges of major corporations. [Think Supreme Court, among other things.]

And we the people have been like sitting ducks for more than 7 years. The people who have inhabited our so-called government have been working AGAINST our interests and against the nation’s interests. (I suppose you could look on the “United States” as another giant corporation. If we use that metaphor, most of us are going to get fired.)

I work indirectly in Human Resources. One sector of this industry is workforce management, specifically “talent management.” The players in this industry sells services so that large corporations can procure and keep “talented” people. In this particular period, I have been mystified about how this industry can possibly have any longevity, given that our very own capitalist class seems to be interested in returning us to indentured servitude. [Think of the bankruptcy bill *now* in light of the mortgage and healthcare crises in particular (and some of our most excellent bloggers saw these crises coming): Did these lawmakers pass this bill KNOWING that millions of people were going to be wiped out in the next few years?]

[An aside: I remember a liberal-lefty coffee-table book from the late 1970s about the causes of third world poverty. In one vignette, there was a picture of a very poor, very frail peasant woman who obviously was starving and had absolutely nothing. The caption for the picture said: “See this woman? She ran out of money. DON’T YOU run out of money.”]

The point being that if you want to survive in the coming predatory global capitalist system, you’d better get on the side of those who control everything.

This thought is enough to make one suicidal. It has completely upended my idea that even if we do it faltering and stumbling, and sometimes going backward, humanity would go forward.

[I think this is one reason by Obama is inspiring to many people. It is a projection because he is just one man who cannot singlehandedly change the destructive system we are in. But I think he signifies a break with it to many of us. I think, however, that we need a leader and a movement that really articulates this reframing systematically and convincingly. For me, John Edwards had come closer to doing it, but it was still not enough.

It is going to take some time to instantiate a progressive world view that will force leaders to take the right kinds of actions. Either we do that, or we face a very dreary and hopeless future.]

Thanks, Ian. I always love your posts. They stimulate discourse if not the economy.

The very premise of capitalism confuses me. It seems their is a premise for anyone who wants to make his case for a capitalistic system/concept that suits his prejudice. I find the weakening of the government is the result of mixing capitalism with democracy and substituting one for the other. Isn’t this why the writers of the constitution did not address capitalism or any other economic system?

Many times there is confusion between the study which is basic economics and the world of political economics. A definition of politics I find useful is: the process in which one exercises control, influence or persuasion over another; political economics would exercise control, influence or persuasion through economic means (or pseudo-economic means). Government for economic purposes is merely the structure through which economic resources are directed and controlled. There is an hierarchy family, clan, … prince, king, emperor, each a stage of development of solving the direction and control of ever larger economic entities. The writers of the constitution were involved in creating a Political system to control the economic entities that were the colonies. Adam Smith wrote his economic opus in 1776 and had only 12 year window for dissemination and comprehension by the founders of the republic, the likelihood that the “Wealth of Nations” had great influence on the proceedings is remote. However, economic practicality was inherent in the deliberations and structures of the (then) new constitution.

We seem to confuse business with capitalism. Trading has been here since the beginning of time. Many cultures thrived with good trade and businesses. They were not capitalists nor were these corporations.

It may be more enlightening to rephrase: there is confusion between business, capitalism, and economic processes. Economic exchange is the heart of economic process, the economic (factors) inputs to exchange and their return for participating in the economic process are: Land, and the rent it accrues; Labor which receives wages; capital (economic tools) to which interest is paid; and entrepreneur (assembles for economic purposes the other economic factors) who receives profit for their input. The Robber Barons of the 19th century absconded with the term “Capitalist” to describe the process of obtaining monetary capital to invest and develope economic goods and services necessary for economic processes from which they derived their profit.

Without understanding the premise of capitalism I cannot see how a government that uses this system/concept can make it work successfully. Can you elaborate on this.

The government used “Entrepreneurs” develop transportation, communication, resources and markets in the western frontier after the Civil War was resolved and to populate the region for economic utility. In many instances Public land was ceded at little or no cost as a means for developers to employ in economic activities. The government policy working in partnership with the entrepreneurs for economic, social, and political development.

From my observation, wealth is acquired on the labors of others. This is a tremendous transferring of wealth from the people to a few. When the people are weakened in a democracy, the government weakens. The elite take over. Their purpose is not to govern but to transfer wealth from the people to themselves.

Not a lot of care is taken to understand terms being used and the result is the great chance to become victim of political predation and/or demagoguery. It may be helpful to consider: Rich, referring to income derived from economic participation that meets economic need, wants and desires (maybe to excess). Wealth would refer to unconsumed economic income from participating in the economic process and also the accumulated unconsumed income over time, inheritance would be one form of wealth passed on to another generation for their use. This tradition is been observed from time immemorial and results in civilization and culture, destroy at some terrible risk if you must. What you are perceiving is political economics played out in the control of government to privatize the profits and make risk public by economic entities which own and control economic corporations.

I have been describing America as a Third World Country for years. We are still riding on some of the residue from when our government was strong and capitalism did not replace government. With the unitary president, the transfer of wealth has sped up. Can we turn this around?

The US is not a third world country in any economic measurement. Its social and educational structures have some outstanding qualities as well but are threatened by a cultural insistence on ignorance, mediocrity, and lowest common denominator (perhaps the result of offending anyone not up measure in the name of political egalitarianism). It will be reversed when the love affair with “Dumb and Dumber” is over and insistence on quality becomes the standard.

I hope I have not presumed too much with my comments on Ian’s post. Can someone inform QuakerGirl of this, please?

That’s a badaboom, badabing, hoss.

Book slammed on the bugs who crawled into our lives and broke a nation.

You da man, Lou. *G*

Me, I’m the little picture, or the broad brush blurred.

Your pic’s are sharp and piercing.

Either lens, we is headed to hard times, hoss, hard times.

Was there a situation?

I’ve become real scarce here, as FDL no longer represents the progressive blog I once came to, to be a part of.

But for a stalwart couple like OKK and Lahoma? To leave?

Is there fuckery involved?

I hope, if they don’t see my post, some one will tell them, this Larue honors them . . . always liked their place and voice in the scheme of things. Theirs were GOOD places, and voices, for me to hear.

Sigh.

I never THOUGHT about the degree of global lawlessness, via weak government. I LIVED thru a lot of it, in my family’s times in SE Asia from ‘53-’62 or so . . .

But I never recently thought of your posit. Good one, hoss, real good one.

So despite the human species run on this rock, we are still primarily lawless, corrupted, criminal, mean, and rotten . . . . and he who has the power, rules.

SOOOOO interesting. Will the government’s WITH control, be able to stave off the barbarians at their own doors . . . you know, like WE are doing in Iraq and Afghan. They never attacked us, but we sure as hell are killin them.

I’m pretty sure, no matter WHAT the ruling governments with strength do, they can’t control or own those in places without strong government.

And I think history, from Attila, to Alexander to Rome To USSR to USA, has proven the futility and failure of those who think they CAN expand beyond their borders. *G*

Great post Ian, and this Larue thanks ya!

One thing that is central to Desoto’s argument is that with a functioning cadastral system, it becomes essentially impossible to borrow money. He writes about a theoretical guy in Peru who starts a tailoring business. To do this he has to acquire a location and a sewing machine. If he is succesful and wants to expand his business by buying another sewing machine, he can’t borrow money to do so because he lacks title to his property. We take our real property system very much for granted, but it is really essential to functioning capitalism.

And as I like to remind my libertarian acquaintences that it requires states to obtain land by force from usufruct peoples, declare state ownership, and then set up a complicated, intrusive system of regulation to govern real estate transactions and clear title.

PJ O’Rourck wrote a very interesting and amusing book about the way different countries economies work, which I am not finding on Amazon.

He visited places like Cuba and Singapore, the Soviet Union. he started at the US stock exchange, where he was surprised to discover that this centerpiece of capitalism is intensely and thoroughly regulated by the US government. Having reliable contract, is deeply dependent on a a large, complex and intrusive government. It is essential to capitalism.