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Thursday, February 9, 2012

Part 5c: Dear Mike: "A Series of Letters from the Left to the Right"

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Commentary: On December 2, 2011 I was excoriated by a young "conservative" named Mike, who wanted to give me a hiding for my communist views on "unregulated" capitalism. He called me or more precisely my views "ridiculous" I'll let you decide who is ridiculous. His tirade was quite lengthy so I am publishing my response in 9 parts as "A series of letters from Left to Right: Dear Mike Since his attack was full of vitriol I have taken off the gloves as I see no point of entertaining his bombastic rhetoric. Parts 5-9 are in-response to the object of his real distain—my post called "Adam Smith Re-examined."

I have color coded my blog post that he critiqued in red—his critique in blueand my response to his critique in black.

Due to length I needed to subdivide Part 5 into three separate responses 5a-5b-5c

This is Part 5c

On the Purpose of Capitalism and Private Property

Adam Smith said:”Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that (the interests) of the consumer.” He was just as concerned for the welfare of the consumer as he was for the “job creators” He understood what the “masters of the universe” don’t—commerce is a societal contract and that mutual benefit must be shared.

Exactly. Producer A produces something that will benefit Consumer B, such as an iPod. A wants to be paid for producing an iPod, and B wants to listen to Twilight audiobooks on the subway. So B gives some money to A, and A gives an iPod to B. Both are happy with the exchange. B created jobs by paying for an iPod and can now listen to Twilight everywhere she goes. A can take the profits from selling an iPod, provide a livelihood for his employees, and start developing a brand-new iPod to sell to A next year.

The interests of both parties have been satisfied, and both consider themselves better off. The mutual benefit has been shared.

If they are unhappy with the exchange, they can refuse to do business with each other in the future, renegotiate the terms of their next exchange, or take it to the courts if the situation warrants.

BUT – that does not mean that Previously Uninvolved Party D should somehow benefit from this exchange. Just because B bought an iPod doesn’t mean D gets a free iPod, nor does D deserve a cut of A’s profits when he in no way contributed to the development, production, distribution, or retail of the iPod. D would be a thief if he snuck into A’s office and took some of A’s cash.

Dear Mike,

You've missed my point from the beginning—I have no quarrel with Capitalism—per se—if that were the way it worked in the real world.

It doesn't, it has been corrupted—because every human endeavor at some point becomes corrupt—ironically, by the very same foible, greed, Smith was trying to harness for the benefit of society—he was wrong—it needs to be "regulated" in all instances.

His original argument was for "unregulated" capitalism as it pertained to "domestic" markets which were much smaller in his time, where you knew who you were doing business with. On a larger scale it ceases to function.

How do you make a sovereign country like China behave? They agreed to abide by the rules of the WTO, yet continue to abuse or ignore them and manipulate their currency in their favor and refuse to enforce labor laws—to which they agreed.

Now days you call for technical assistance for a product you buy at a local retailer, but, you get somebody in India who doesn't understand you or you, them. You get shoddy products that don't work and are put through a telecommunications labyrinth that is designed to make you give up trying to get what you paid for by waiting on automated phones designed to frustrate you and make you go away. In a global economy: your simplistic model falls apart.

D deserves no share of A and B’s exchange.

Are you equating D as the government who is "stealing" or is D the unwashed mass of leeches that the government showers with largess like food stamps for single mothers. Or maybe tax subsides to oil companies?

And yet you agree with Smith that the government has a legitimate right to tax—when you said:[quote]Which is fine, and our federal government was originally designed with a very fair and progressive taxation system. Unfortunately, we are no longer following it. [unquote]

So if the government has a right to ask for some of their money back—(for the moment— fair tax system aside)—and they then help the poor because the people that elected them voted for it—that's not OK?

When Social programs were passed they were passed by a majority on the left and the right who supported them. President Eisenhower a respected Republican President said:

"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes that you can do these things. Among them are a few Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid."

He also said:

"Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed."

President Dwight D. Eisenhower, l952-----

Unfortunately at times it seems greed, selfishness and stupidity will win the day!

On the issue of taxation he [Smith] said:”The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expence of government to the individuals of a great nation is like the expence of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate.

Again you said: [quote]Which is fine, and our federal government was originally designed with a very fair and progressive taxation system.[unquote] Which is in complete agreement with one of the two main points that my post makes. The other is the need for regulation, which is the primary function of government, as stated by James Madison, in the Federalist as a rationale for the need of government.

Which is it—they are thieves—as you stated previously—or—Does the "government of the people" have the right to tax in proportion (progressive) to respective abilities (to pay) and then determine how the money is allocated according to elected representatives of the people? This is rhetorical—the only answer is yes to the latter.

As for regulation—Madison one of the greatest thinkers of the American Revolution said one of the primary functions of government—indeed the underlying necessity for government—was to "regulate factions" (special interests) who would trample the rights of others. Who is right—the free market Capitalist deregulators—or James Madison? The answer is the latter, we are a democracy not an plutocratic oligarchy.

He (Smith) also said: “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed,

Hey – just like those Occupy Wall Street leeches! They want stuff without paying for it!

Projecting your distain to deflect the essence of the quote is—excuse the phrase—total bullshit: Smith was talking about landlords and "private property" one of the tenants of the twisted version of modern "unregulated" capitalism—not OWS leeches. He was speaking against the dangers of private ownership of land especially natural resources.

POINT: The Kings of our common history owned everything and considered the population within their domain as slaves who could not own anything. They were not even allowed to hunt in the king's forests to provide sustenance. It was this injustice that we fought against, but, seem unable to keep from repeating, ourselves.

POINT: Today's King's are the rich who claim to "own" everything "even the natural resources" of the earth which they did not create and cannot replace when they have exploited them to exhaustion.

and demand a rent even for its natural produce.” Does that sound like the modern oil barons who exploit the “commonwealth of the Nation and take enormous profits and are also rewarded by our government with tax subsidies on top of their exploitive profits?

Hooray, I hope Weber is advocating for the repeal of the Ethanol subsidy.

Smith's reference to natural produce does not refer to corn. However, I do advocate for the elimination of all NON-essential tax subsides for corporations. I do see that investments—for future technological advancements, education, the continued prosperity of our Nation and vital to our security and defense—are needed.

And with it, end the wind farm subsidies, solar panel subsidies, fluorescent bulb subsidies, and so on and so forth.

See above

As an aside, I have to wonder if Weber has ever seen the breakdown of the price of gas — how much goes to state and federal taxes, vs. how much the oil barons keep, and of the latter, how that cost is broken down between transportation cost, refining cost, labor cost, etc,

Unless you know about, forced pooling, leasing multiple non-contiguous tracts, warranted title rights, skimming, short counting, manipulation of pricing, unlimited water rights, slant drilling, confusing small print contracts meant to obscure bad faith deals,"government subsides, and a hundred other dishonest ways oil producers use to "maximize " profits.

Did I mention I own land in the Bakken Basin of North Dakota's richest oil fields, but other than that I don't know squat about it. Thanks for asking?

to see exactly how much is profit?

I know something you apparently don't—the Koch brothers, Hess, Exxon, Shell, are not hurting from narrow profit margins. In fact they are at this very moment in the process of buying "our" representational democracy with their profits.

Or does he just assume that all $4 per gallon goes straight to an oil baron’s pocket?

Your sarcastic condescending assumption is incorrect.

As an aside, the oil companies aren’t “exploiting the commonwealth of the Nation” — the oil fields don’t belong to the nation, they belong to the people who bought the land and mineral rights, who invested in the exploration and discovery, who paid for the development of the field, who built the rigs and extraction equipment, who employed all the workers, who removed and refined the oil,

Jefferson in a letter to Madison said:"The earth is given as a common stock for man to labor and live on." Jefferson on Politics & Government: Property Rights

Jefferson also said:

Stable ownership is the gift of social law, and is given late in the progress of society. --Thomas Jefferson

...and on the same subject Franklin said:

All the Property that is necessary to a man is his natural Right, which none may justly deprive him of, but all Property [beyond his needs are] superfluous to such Purposes [to sustain him] is the property of the Public who, by their Laws have created it and who may, by other Laws dispose of it. --Benjamin Franklin

For the most part they (oil companies) lease minerals rights— they are not interested in holding and paying taxes on land, especially, when they have extracted all of the oil. Furthermore, unlike human rights, property rights—are civil rights and are a "construct" designed by the rich to give them the appearance of legitimacy. They are social definitions; they exist as long as the society is willing to enforce them. If enforcement is missing, they cease to exist. The reasons for changes might be market conditions, popular sentiments, scientific knowledge, new technologies, lobbying, or legal battles. Biotechnologies are already having profound effects on how we organize property rights for natural resources. Resource rights change as our understandings and sentiments change.

If companies, individuals, groups, or the state are not managing and stewarding resources in sustainable ways, their authority should be openly and vigorously challenged.

Civil rights are social inventions, and society can abrogate them. Attempts by capitalist to privatize water is a prime example. People that want the right to exploit the worlds resources common to all need to be stopped.

And civil rights are open to litigation. As an example—America when dealing with Indians developed the theory of "Manifest Destiny" to steal Indian lands and abrogate treaties which it violated every few decades so they could steal more land. Many tribes have sued over lost tribal lands and have won settlements.

You are wrong, the oil companies are doing exactly that, they lease "mineral rights"—on private and government land—(that's why they can't drill in ANWR or National Parks or America's Continental Shelf)—at a price of pennies per acre at—a fraction of real vale—and they are subsidized by taxpayer dollars to do so—and they ARE exploiting the common wealth of the nation—to say otherwise is utterly dishonest. As an aside they already have paid leases on millions of acres of public lands that they are not drilling on, which begs the question—why not?

and who delivered it to the happy consumer.

And who's happy about 4 dollar or 5 dollars a gallon gas— are you smoking something?

To claim otherwise is to be utterly dishonest. And this is why, in tin-pot dictator nations like Venezuela where the oil fields are stolen from those who invested so much of their own capital and lives in developing them, and given to “the Nation,” “oil barons” quickly give up trying to find and develop new fields because they know it will be stolen. Development stops, and shortages occur.

Poor misunderstood oil barons boo-hoo!

Does that sound like bankers who get money created from nothing and given to them for free while they profit from it by inflating the cost to borrow it?

Which is exactly why the Founders mandated in the Constitution that nothing but silver and gold should be the money of the nation, defined the specific weights and purities to be used for the various denominations, and mandated the death penalty for any officer of the Mint who would debase the currency. Returning to Constitutional money would solve the corrupt banking system immediately. It would also greatly reduce the size and scope of the federal government because they couldn’t fund all their illicit activities.

Do I sense a half-hearted agreement? Wow finally something we kind of, sort of, agree about.

Monetary reform.

Problem. There is no gold left in Ft. Knox and there isn't enough gold in the world to fund the entire world economy at least not without hyper inflating its value, which would make it as useless as the anchor for currency as tulip bulbs. Besides paper is easier to carry around and shit like that. Which is why paper money was substituted in the first place—whether its backed by gold or not.

And when you get right down to it—what is gold—it's really just a metal—like heavy, heavy dirt, with some other binders in it, and you can't eat it or get warm from burning it. Maybe we could substitute sea shells strung on string. Or, maybe tulip bulbs— will—make a come back.

POINT: The "gold standard" is dead because it is no longer useful in a global economy. It like the buggy whip —it has come and gone, and while it served its purpose at one point in time its dead for a reason.

POINT: I used to ask my grandmother who was born in 1886 if she missed "the good old days"—as a child I held them up as a rather romantic era. She looked at me with some surprise and said: "They were terrible why would I miss them?"

FINAL POINT: I do agree. It's time for a sea change in rethinking the monetary system and how it operates in today's world economy, but, NOT by going back to an era that has come and gone.

But then, that's what any creative, forward, out of the box thinking progressive, would say.

Commentary: Dear Mike, By his own definition Smith's theory—is amoral—in the sense it does not recognize either benefit or harm caused by its application—that, however, does not excuse the person that subscribes to it, and acts on it—from acts that are immoral or unethical—and in fact—it begs—that an effort of extreme caution be taken to guard against that moral hazard.

The idea that because A owns a commodity—e.g. water—that is life sustaining and withholds it from D because B can pay for it and D cannot and therefore D dies—is repugnant. And is in all instances a depraved response that needs to be challenged and guarded against.

As I watched the Republican debates one instance in particular stood out, when Ron Paul responded to Wolf Blitzers question about a 30 year old was dying and uninsured, and the crowd shouting out—"let him die"—much like the mobs in ancient Rome calling for the blood of the vanquished. Or the mob that yelled "crucify him."Are these the same self righteous Ultra Right Conservative Christians who claim to be the arbiters of "Christian" orthodoxy and Conservative ideology—"Is this a case of Conservative Christians being right? Or, the Conservative Christian Right gone terribly wrong? Its certainly is not the Christianity I was taught and still believe in.

Christ's entire message says if I can help someone and refuse to help them and that person dies as a result of my inattention—I might as well have murdered him. Failing to act without compassion or remorse is the only unforgivable sin.

The claim that faith alone saves—is false. It is love and compassion that saves us. It binds us together as a people. Love of country love for one another. When ever I see hatred towards others expressed in political terms I am reminded of Christ's words, "if you say you love god and hate your neighbor you are a lair." Our loving "acts" towards our fellow human's matter, they show that we understand the message of Christ. It's not the acts in and of themselves—its the motivation.

Consequences of our actions matter especially when they have dire consequences for those around us. That is the case for—and the absolute necessity of—strict regulations and it begs our tireless and scrupulous enforcement.

For example a century of regulations guarding against moral hazard were sweep aside or trivialized—in the financial sector of of our economy—to the determent of all but a handful that benefitted from their capricious moral turpitude. Recently in the news I heard that dozens of homeless froze to death during the last blizzard I wondered how many were dispossessed in the recent economic downturn.

Their so called "free market" no rules capitalism were an excuse—to act—with cupidity and without compunction for the effects of those actions. The Republican mantra for "personal responsibility" is a joke in the face of the disaster they caused and their attempt to blame the victims of their depraved indifference..

The love of money numbs the conscience like an opiate numbs the body and mind. Hence the truism "love of money is the root of all evil". You don't have to be a religious person to know right from wrong, but you have to be sociopathic not to recognize the difference and act without remorse for the consequences.

As for taxation, Adam Smith said: "Pay your fair share"

Christ said: "Render unto Caesar."

James Madison said: "Regulate em!"

Jefferson said: the earth is common stock for men to labor and live on.

Franklin said: No man should take more than he needs.

What's good enough for them is good enough for me.

Sincerely yours, a devout statist, defender of the faith and the Constitution.

End of Part 5c

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