I'd suggest there are two issues, the first is the conflation of distribution (free markets) with ownership (capitalism). We want a decentralised, network economy with multiple player that allows competition and innovation, not a handful of giants that can lobby for rules to crush smaller rivals and new entrants. I'd suggest alternative models of ownership such as partnerships, employee and customer owned mutual's, trusts and franchises instead of PLC's.
The second is that the right has prioritised economics over social and cultural issues and needs to think more about meaning and what is a life well lived over just maximising wealth. The Tory party used to be the party of 'Church, King and Country', which of these, or anything else do the believe in now?
But note that Peter Thiel reminds us that the innovator is trying to become the top dog (potentially only temporary) monopolizer in a given market niche. He is trying to upend the nominal economic equilibrium state of supply and demand. If I understand Peter correctly, he is basically saying an open information fully competitive market is a fantasy and does not exist in reality. To our overall mutual benefit, someone is always trying to break out of that non-existent statis condition.
From my US educational perspective, it also appears that the English Anglican Church was facing severe issues starting before Darwin published (maybe from the early astronomers?) and is now a sad pretender to its former glory and its pretense to be a peer to the Catholic papal regime, etc. We have similar cultural difficulties in the US but do not have a national church institution by explicit design and intent.
As a non religious person I am disturbed by the idea that perhaps the social and psychological benefits many people seem to receive from religion may be very valuable (or even necessary?) to achieve and maintain the kind of supportive and welcoming society we seem to be losing in the West.
yes, part of the problem is that today's innovative startup is tomorrow's dominant firm trying to prevent start ups taking their market share. I have a book upstairs called Saving Capitalism from the Capitalists by Rajan and Zingales that describes this in depth.
A PLC is any company which satisfies the conditions for being a PLC and declares itself in its Memorandum of Association to be so. The conditions are having (a) a share capital of at least £50,000, of which 25% must be paid up, (b) at least 2 shareholders, (c) 2 directors and (d) a company secretary. In contrast to a private company where all of these factors are either less stringent or in the case of (d) waived.
All companies listed on the U.K. Stock Exchange must be PLCs. But not all PLCs are listed; indeed, most are not.
A more humble analysis on Adam Smith vs John Keynes, or conservative economics vs Marxism, would certainly reach the views you herein reach. Current levels of "debate" extend not much beyond me good, you bad. Thank you for taking us closer to understanding real world economics.
I have never seen so much as an attempt at an argument as to how free markets "cause" inequality.
That's because they don't.
Inequality is nature, and it manifests regardless of system. The totalitarian dictatorships that left-wing people prefer (under pseudonyms) display massive inequality between bureaucrat and drone. Advocates simply believe that labeling them differently makes it ok.
Allowing people to own what they produce doesn't change the fact that some are far better than others. It simply incentivizes them to maximize their production, which benefits everyone.
Last September I was vacationing in Portfino, Italy, and Cannes, France. The "mega" yachts were not to be believed. I was told by a valid and reliable local source, that the majority were owned by Russian oligarchs. Talk about the bureaucrat and the drone!
I am not a conservative, but my sense is that they are less concerned about capitalism and more concerned about trans-national institutions that present themselves as a higher authority than the nation-state, for example the UN, EU, World court, IPCC, WEF, WHO, etc. They also oppose large multinational corporations who support Left-of-Center politics, such as digital tech companies and social media.
It is not clear to me that Adam Smith would have supported these type of institutions. The national conservative alternative to globalism is free markets within nation-states.
Great explanation of economic systems. There are 2 issues not mentioned that I believe must be addressed if we are to change course. One is the need to use anti-trust law to break up market monopolies. The other was implied in a question below about exorbitant compensation. The undeserved extreme wealth acquired through failure and lies, and then rewarded with taxpayer bailouts (2008 crash) and zero people prosecuted, leads to lack of trust, which works against the communal ties we need for a healthy society. I can state unequivocally that the most common lies and misleading statements I've received are from those in the financial world, with a few, honest exceptions. This distrust has filtered down to every aspect of our lives.
Thank you for this wise, intriguing, and thoughtful essay. It casts such a spell as to disarm one’s inclination to quibble. But I’ll try. Globalization didn’t happen by chance, or as a by-product of the internet. Just look at the practice of medicine. This was wrenched from a perfectly workable doctor-patient relationship into a monstrous conspiracy — yes, conspiracy — to force-vax six billion people, using tax money and the raw coercion of the state. That is not laissez-faire, by any stretch of the most deluded imagination. But your main point, that global-scale capitalism has outrun its ability to deliver prosperity, largely because of its destruction of smaller-scale self-sufficient systems, remains valid. So perhaps that is the wave of the future, the rebuilding of systems of voluntary cooperation that are the essence of free enterprise, and the reason why markets work better than coercion.
May this note find us all ever closer to God, and His Peace.
First is that I have seen graphs of wages and productivity in parallel increases until about 1980, where wages flattened-out (with inflation decreasing buying power) while productivity steadily increases.
Corporate law need change. No 'Money is Speech', corporations have peoplehood status in law, and immunity to owners - so owners or VC's like BlackRock influencers have - in some cases - resources and wealth larger than some countries.
Remove or reduce-significantly the HR-departments, laws that require college degrees, and change Work-comp to not abuse workers.
.. remove immunity so they break-up to no bigger than what owner can manage carefully, 150 is Dunbar's number or lower - and that would be large enough, 'money is Speach' ends - and find the judges, justices, significant 'influencers' still living, and adults in families and publicly Pain&shame them, tasered till soiling-themselves and screaming, video streamed online for the world to see. Perhaps.
Also, I know businesses stopped hiring and overloaded employees - salary so you get what I had - leaving Job with about the same salary and 3 people took all my work I was doing alone.
Your mention of Health Care is a good example of external coordination, the corp. has no incentive to control cost because medical insurance or public-troth provides less but some, and in this model the homeless or not corp-insured person dead is fine with them because plenty where he came from - and if gov still giving money for each killed .. I mean 'died of covid' then that profit, ..
The corporation employee is enslaved by the need for health care insurance for family so will accept lower wages but abuse from manager and even protective class - all but white men - so reporting abuse is an excuse to 'believe' her and her lying friends, and you are out with 'trouble working with women/minorities.' on record.
And since we have seen israel training city and other police department for crowd instigation and then suppression, why not expect their organ-harvest murder system, but instead of rounding up Palestinas, their victims come in ER or are having regular simple treatment that they happen to die from.
Don't forget the gov-corporation Inflation-number scam, that inflation metrics leaves out the 3 most costly increasing categories; Fuel, housing, medical costs, so the corporation can give cost-of-living raises - while the keep the difference, and SS and other Pension systems do the same, so over time we are deciding to skip meals and medicine to pay rent or .. what?
I figured out long ago that most political movements were not internally coherent philosophies, but rather ad hoc coalitions of interest groups that didn't really necessarily have all that much in common (other than a common enemy), and in many cases, didn't even really like each other all that much.
One could make a leftist case for banning abortion, for instance, even though that it is a Left Tribe Article Of Faith.
I agree that the battle in this time is sovereignty vs globalization.
I stand firmly behind sovereignty and liberty for all. A global one world government is a dystopian nightmare for me.
We can all see how power corrupts and absolute power corrupts absolutely.
You know, let them eat bugs et all. The clash of different cultures with forced mass immigration directed by globalists is glaringly a recipe for disaster.
And we must also remember that sovereignty requires the individual citizen to accept some responsibility for local and wider government performed in their name; plus that liberty is not license to do solely as we please at the expense of anyone else. These obligation elements do not get mentioned or discussed as often as they should.
What about the effects of multimillionaires paid millions of dollars a year when the company profits don't warrant those salaries, and the employees barely receive a living wage?
I hope you know Herr F. that I wasn't in any way suggesting people should not feel annoyance at undeserved extreme wealth......just pointing out that it all ends up in someone else's wage packet in the end. A truth that is rather counter-intuitive and so many people (perhaps most people) just don't get it.
Maybe the problem is in whose wage packet the money ends up. It sounds like trickle down economics. But then, I really don't know enough about economics to be able to delve deeply into it. I just read stuff, look at my monthly Social Security check and try to figure out how to pay all the bills.
Yes, you bring up an important point which had occurred to me in reading Graham's excellent and questioning essay: which is that it is all very well if an online widget sales company (for example) owned by a billionaire in for argument's sake the USA sells millions of various widgets - made in neither the USA nor the UK -to consumers in the UK. The wealth deriving from these transactions then awaits disposal by said billionaire at numerous other destinations not necessarily including the USA or the UK In this scenario, it is hard to see in what way any meaningful redistribution takes place that can measurably benefit consumers living in the UK. At the least, the relationship is asymmetrical, as there is no visible community base at a local or national scale that workers can see as evidence of some sort of "transactional validity" which makes sense of the society they live and strive in. The pre-internet model of a factory owner who - of course for his own kudos and ego, as well as community good will - visibly distributes part of his wealth in the area where he and his employees and customers live (in large part) ; by building a park or college or even sponsoring a football club locally, has now mostly gone. And with it any sense of a natural and "fair" relationship between owner/employer and his employee. Graham did touch on this consequence of the ultimate in globalisation and its test of the free-market economics stuff, and I am a total layman on this, but it is a rich area for discussion and argument!
The relationship between local and global has been ripped apart by multinational companies, who don't care what or where they sell as long as their shareholders keep buying the stock. The small family business in the US is ever shrinking and may only be prospering in small towns. Restaurants being the exception. Even in Thailand I see small businesses being taken over or put out of business by the evergrowing conglomerates. It's becoming difficult to find Thai made products that aren't made in China. There's an excellent chocolate industry here and their products can't be found in local stores. 3 beer companies own all the alcohol concessions and the same companies own all the bottled water companies, which is why there will neve be drinkable tap water in Thailand. The Thai govt. wants to attract more foriegn businesses to come here and when they do, the local Thai companies will be swallowed up and the owners will invest their money offshore. I don't know the answer to any of this, I can only see the problems that are here and arising.
Indeed. A free market of huge numbers of small businesses looking after themselves by delivering for their patrons seems to be the elusive sweet-spot. And globalisation , put on steroids twenty or so years ago by the reach of the worldwide web , has put a sledgehammer to that. I suppose globalisation at least in effect was what enabled the growth of successive empires by exploiting the resources of remote but reachable areas , not always in a humane way it has to be said; to the benefit of the political, military and cultural “centre” . But we are now in the era of globalism, which it might be argued has an important distinction from the former. In that there IS no cultural “centre”. And therein lies the essence of the problem of globalism for the Western world. Possibly.
Not only the Western world. Globalism, or Goblinism, wants to devour the entire world. There is no limit to their greed and desire for control and with it comes power, which are the 3 pillars of political governance.
I'm thinking about Thailand as an example. After the last election, the unelected parliment, put in place by the military juntal that staged a coup in 2014, refused to seat the winner of the election and replaced him with a businessman who has ties to a convicted former PM. The businessman was recently removed from office by the high court who said that his placing of a convicted felon in his cabinet was illegal. Today a co-alition of the frightened voted in the 36 yr. old, inexperienced daughter of a convicted felon who was a prime minister. When asked how she would govern, she replied, "My father has experience and he'll advise me." Rim shot/cymbal crash. The attempt to control entire populations is at hand.
“Adam Smith’s ‘natural sympathy’ can only really be sustained at a societal scale where some collective sense of community exists.” See “Dunbar’s Number.”
I am usually intrigued by those claims about inequality where X% of the population owns (or even merely controls) Y% of the national or global wealth. For example (making up some numbers) "we see that $4,000 Billion is owned by 'just' 400 families!!!" But no one who says this then explains how many families should own that $4T. If it becomes 1000 families, is that OK then? One million families? Or just that your family should be included in that particularly "lucky" group?
As Graham and others have commented, many other families do benefit directly or indirectly from the management and administration of large wealth by the more capable among us.
The set of less fully capable among us still includes a spectrum of capabilities.
If we think about Bill Gates or Elan Musk, et al., besides having some very thrilling or inspiring vision, these successful people have provided products or services desired by millions upon millions of people. Thus they deserve some fairly large reward in turn. But these leaders and companies also required 2nd, 3rd, 4th, 5th, tier leaders to bring the big idea(s) to full fruition. Sometimes we learn about these people; and sometimes they remain anonymous to most of us. And this gets carried down to the night watchmen and the cleaning staff, etc. They also have a contribution to make and things work better when they are also capable within those areas of responsibility. [I think the pandemic showed us there were really very few nonessential jobs in our highly interdependent economy.] And for the most part they also get remunerated at a market clearing rate for their time and talents.
The focus on wealth disparity blurs the real concern, which is power disparity. Most of us are not really too concerned about John and Cindy McCain having 10 houses, or how many or how large someone's yacht is, etc. But we do get concerned about excessive political influence via Zuckerbucks or other distortions of the principle behind one man-one vote. Who are these large donors we hear about but may not know who they are? What is their agenda? Do we agree or disagree with it? Just how transparent should their role and contribution be in a "the people are sovereign" republic?
And yet The Federalist Papers were published anonymously. Is today different somehow that really matters? I don't have a clear and firm answer for this, but I would certainly prefer more transparency than less.
Yes, agree. I work very closely to this top tier so understand firsthand. The American experiment of creating a structural democratic holarchy has returned (if it ever fully left) to an obtuse empirical hierarchy with power concentration and wealth disparity on the grandest of scales with the oligarchs of tech a prime example of the most egregious (who I’m not associated with). Oligarchy is now the preferred order of the day at all costs and by any means, the means of which are using the masses against themselves (Hilary’s creation of TDS, baskets of deplorables and uncontrolled global mass migration). We all know how that turns out. Present day London. Full circle.
Thank you for bringing a couple of really interesting strands of inquiry together! I am still very much in the middle of understanding (trying to make sense) of "it all" myself... It seems to me that a few developments over the past centuries have created conditions that made it almost inevitable for humans to end up where we are now: the (relative) devaluing of human (first physical and now mental) labor as inputs to the economy -- i.e., the replacement of physical force via hydrocarbons and then electricity; and the replacement of mental operations via machines implementing much more precise and speedy algorithms -- then the shift from individually organized "financial security in old age" (retirement) to a government organized/mandated version, then the shift of those systems onto the commodity stock market, creating inflated artificial demand and "accounts" that feel like a Ponzi scheme (until withdrawals surpass new premium based purchases of stocks...), and the conversion of universities of sparsely funded and used institutions of elites to, again, an anxiety-for-high-earning-potential fueled commodity for the masses, inducing a state of no longer wanting to procreate paired with perpetual fear over the future. Globalization (the experience of competition from everywhere and everyone) did not help, but is, in my mind, only one puzzle piece in a much larger picture. Ultimately, whatever care people wish (and need) to experience coming from others cannot be delegated to a bureaucracy, because there simply is no formula that would no open itself up to gamesmanship on part of people wanting to abuse the system. How we will get out of this mess is going to be an interesting (and potentially violent) episode of humanity's evolution. Will we let go of the idea of perpetual growth? (like, which other aspects of life have this disease like quality of stopping only when the host expires?) Or can we, indeed, keep growing forever by moving things into the realm of digital and virtual value? Will we discover a non-hydrocarbon source of energy in time? I'm definitely looking forward to your next essays alluded to in this piece! :)
Your “laissez-faire-gone-too-far” term might also be phrased as “laissez-faire, everywhere,” as a beloved professor of mine used to say with a sly grin.
Are you familiar with the economic system of Distributism espoused by Chesterton and Belloc? (A fellow on my side of the pond, Dale Ahlquist, has renamed it Localism). While I do not think our globalized society could—or even would—accept such a system, I do contend it better aligns with our human natures and better fosters/supports communities. (Full disclosure: it is a very Catholic economic system, which undoubtedly repels most moderns).
Cheers to you too. I am aware of Distributism....but only vaguely. As you rightly imply though, our globalised society will not neccessarily go where we'd like it to. As I say in this essay (and others) I think we're still a long way from comprehending the full measure of the transformation that the internet has wrought.
Here's some thoughts on the post, in no particular order.
It is stated that globalization is good for consumers and bad for workers. Workers ARE consumers.
Globalization did not come about as a result of laissez-faire policies. It is the result of political and economic manipulation.
Perhaps I missed it, but I saw no reference to free markets anywhere in this post. Capitalism and free markets are not synonymous. Laissez-faire might relate to free market, but still not synonymous. I am for free markets as just one facet of freedom. Government is, by definition, an impediment to freedom. No, we can't have absolute freedom and must have some government. But to whatever extent governments regulate markets, that is the extent to which they are not free markets.
Yes the term free markets does get mentioned as such but I'm not entirely clear what you mean by "Laissez-faire might relate to free market, but still not synonymous"?
This was a very good write up once again Graham. You never disappoint.
I would say that I may perhaps have a slightly different view on the laissez-faire capitalistic system that we supposedly have had over the last several decades, but perhaps not too different than what you're pointing to as the problems we face here.
I think that people often confuse capitalism with cronyism particularly when it comes to the government intervention. Nowadays it seems that we are discovering more and more just how much many of these big American companies are in bed with the government in one form or another particularly when it comes to their relationship with the lobbyists, or the outright handouts they are getting in the form of subsidies.
Many big companies have seemingly operated for years directly under the control of the Feds without much of the public even realizing it. Twitter would be a great example of this prior to Musk purchasing it.
Additionally the entire stock market is basically propped up by the Federal Reserve and that is about as much of a command and control system as you can get when it comes to the economic reality that we're all facing now.
However, despite all of this I believe the origin of many of these problems goes back to the globalization problem that you point out and in the case of the United States (and much of the Western world) we've allowed our economic system to be captured by Communists.
The day we decided to invite the Chinese Communist Party (CCP) into the WTO and started off-shoring our manufacturing to them is the day that we set the stage for them to succeed in the process of elite capture.
Some of our biggest corporations have been completely captured by the CCP and they are using that form of economic warfare to wreak havoc on our system. The woke capital, the widening of the gap between the haves and have nots, the destruction of the middle class, etc. all go back to this in my view.
The center of gravity of all the evil happening economically, militarily, etc. is a situation where all roads lead back to the CCP and it's a problem that our politicians pulled us into going as far back as George H.W. Bush after Tiananmen Square.
This what the Populist, or MAGA, faction of the Republicans are trying to tackle head on, but the obvious reason as to why they're hitting so much resistance is because all of our elites are simply captured by the Communists in China.
This is precisely why we need to decouple from them as soon as possible, but the remedy in doing this is going to be full of growing pains.
Thank you for allowing me to inject my two cents and for sharing another awesome piece.
I’m surprised you make no reference to Piketty’s thesis, that over time and inevitably, returns to capital increase relative to labour. It’s ironic that in Piketty’s view, the great levelling reset was the destruction of capital in the two world wars which led to a benign (because more balanced) distribution of rewards between capital and labour, that lasted until the 1970s. Since which time rewards to labour have stagnated (in the developed world at any rate) while returns to capital have skyrocketed, in the last 2 or 3 decades at geometric rates. So we end up with a top heavy, top down society dominated by powerful elites who control a disproportionate share of the world’s assets, instead of a bottom up communitarian society, which I would certainly prefer. How to restore that balance without a hugely destructive event is the key question. Perhaps it’s not even possible. I think the inchoate rage and unhappiness of large numbers of people at the bottom of the pyramid is what will provide the energy and trigger for just such an event. Carl Jung noted a similar phenomenon in the run up to both world wars, a sort of mass psychosis.
Thank you David for this succinct briefing on Piketty (I only know of him as someone who featured large in Left/Right political discourse a few years back). How to restore balance?....as I say in the essay I put little faith in political 'solutions'. I just watch the river flow...... wherever it's going.
At another level it could be said that globalization began big-time when Christopher Columbus sailed the ocean blue and "discovered" the "new world", which in the case of the America's were ripe for plunder on a mega-scale.
His misadventures were even authorized in the "name of god" and for the "glory of Christ" by various Papal Bulls
It could also be said that the original impulse for this globalization project was signaled, and authorized by the bogus "great commission" to convert all nations into the "one true faith" which was of course done via the business end of Constantine's famous Sword.
May this note find us all ever closer to God, and His Peace.
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The wage suppression is noted on the graph I saw around 1968-1969, wages went flat (reducing with inflastion) and productivity continue increasing by scalarizing workers then giving more work to those that could and would take-it-up-backside.
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I wonder what year the real ruling power switched from the 'Christian' Elites (that had some concern for workers) to the Jewish elites (that will drive us into 15-minute cities we need 'papers' to leave, and increasingly abuse us for excuse to bomb flat like Gaza, we are all Palestinians now.
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NAFTA is when - those that hate us and want us dead - by using our taxes to compensate companies moving our jobs overseas and destroying middle-Class. Large sucking sound as tax-base of most nation went with them, as well and family & business collapse, mothers divorced and married the blood-sucking Stiffest one around, the Gov. And the genocide of indigenous white peoples took a big leap to grave.
The collapse of country the ADL donners, and Federal Reserve want soon, the debt paid by liquidating all valuables public owned, and everything else of value bought at pennies on dollar, like what happened to Greece a few years back, but 'Trillions' times worse.
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A BlackSwan event like Nuke war would be good for the survivors once they figure out have to survive with local community and no State, Fed, corp, or Institutions and what judges teachers police false-witnessers, Abortionists, .. are 10 ft from rope in public park. Slapping women and punching men that disrespect you, or a more formal duel.
Sounds a lot better than this unJust, unTrue, .., level of Hell, doesn't it?
I'd suggest there are two issues, the first is the conflation of distribution (free markets) with ownership (capitalism). We want a decentralised, network economy with multiple player that allows competition and innovation, not a handful of giants that can lobby for rules to crush smaller rivals and new entrants. I'd suggest alternative models of ownership such as partnerships, employee and customer owned mutual's, trusts and franchises instead of PLC's.
The second is that the right has prioritised economics over social and cultural issues and needs to think more about meaning and what is a life well lived over just maximising wealth. The Tory party used to be the party of 'Church, King and Country', which of these, or anything else do the believe in now?
But note that Peter Thiel reminds us that the innovator is trying to become the top dog (potentially only temporary) monopolizer in a given market niche. He is trying to upend the nominal economic equilibrium state of supply and demand. If I understand Peter correctly, he is basically saying an open information fully competitive market is a fantasy and does not exist in reality. To our overall mutual benefit, someone is always trying to break out of that non-existent statis condition.
From my US educational perspective, it also appears that the English Anglican Church was facing severe issues starting before Darwin published (maybe from the early astronomers?) and is now a sad pretender to its former glory and its pretense to be a peer to the Catholic papal regime, etc. We have similar cultural difficulties in the US but do not have a national church institution by explicit design and intent.
As a non religious person I am disturbed by the idea that perhaps the social and psychological benefits many people seem to receive from religion may be very valuable (or even necessary?) to achieve and maintain the kind of supportive and welcoming society we seem to be losing in the West.
yes, part of the problem is that today's innovative startup is tomorrow's dominant firm trying to prevent start ups taking their market share. I have a book upstairs called Saving Capitalism from the Capitalists by Rajan and Zingales that describes this in depth.
Do you recommend the 2003 version or the 2013 version of their book?
Looks like this book might help me better understand financialization, a topic that came up in another Substack commentary just today.
I just looked and I have the 2004 edition, no idea what is different in the 2013 version I'm afraid.
'Scuse the ignorance what are PLC's?
Public Limited Company, UK term for one floated on a stock market.
A common, but wrong, assumption.
A PLC is any company which satisfies the conditions for being a PLC and declares itself in its Memorandum of Association to be so. The conditions are having (a) a share capital of at least £50,000, of which 25% must be paid up, (b) at least 2 shareholders, (c) 2 directors and (d) a company secretary. In contrast to a private company where all of these factors are either less stringent or in the case of (d) waived.
All companies listed on the U.K. Stock Exchange must be PLCs. But not all PLCs are listed; indeed, most are not.
A more humble analysis on Adam Smith vs John Keynes, or conservative economics vs Marxism, would certainly reach the views you herein reach. Current levels of "debate" extend not much beyond me good, you bad. Thank you for taking us closer to understanding real world economics.
Thank you.
I have never seen so much as an attempt at an argument as to how free markets "cause" inequality.
That's because they don't.
Inequality is nature, and it manifests regardless of system. The totalitarian dictatorships that left-wing people prefer (under pseudonyms) display massive inequality between bureaucrat and drone. Advocates simply believe that labeling them differently makes it ok.
Allowing people to own what they produce doesn't change the fact that some are far better than others. It simply incentivizes them to maximize their production, which benefits everyone.
Last September I was vacationing in Portfino, Italy, and Cannes, France. The "mega" yachts were not to be believed. I was told by a valid and reliable local source, that the majority were owned by Russian oligarchs. Talk about the bureaucrat and the drone!
I am not a conservative, but my sense is that they are less concerned about capitalism and more concerned about trans-national institutions that present themselves as a higher authority than the nation-state, for example the UN, EU, World court, IPCC, WEF, WHO, etc. They also oppose large multinational corporations who support Left-of-Center politics, such as digital tech companies and social media.
It is not clear to me that Adam Smith would have supported these type of institutions. The national conservative alternative to globalism is free markets within nation-states.
Great explanation of economic systems. There are 2 issues not mentioned that I believe must be addressed if we are to change course. One is the need to use anti-trust law to break up market monopolies. The other was implied in a question below about exorbitant compensation. The undeserved extreme wealth acquired through failure and lies, and then rewarded with taxpayer bailouts (2008 crash) and zero people prosecuted, leads to lack of trust, which works against the communal ties we need for a healthy society. I can state unequivocally that the most common lies and misleading statements I've received are from those in the financial world, with a few, honest exceptions. This distrust has filtered down to every aspect of our lives.
Thank you
Thank you for this wise, intriguing, and thoughtful essay. It casts such a spell as to disarm one’s inclination to quibble. But I’ll try. Globalization didn’t happen by chance, or as a by-product of the internet. Just look at the practice of medicine. This was wrenched from a perfectly workable doctor-patient relationship into a monstrous conspiracy — yes, conspiracy — to force-vax six billion people, using tax money and the raw coercion of the state. That is not laissez-faire, by any stretch of the most deluded imagination. But your main point, that global-scale capitalism has outrun its ability to deliver prosperity, largely because of its destruction of smaller-scale self-sufficient systems, remains valid. So perhaps that is the wave of the future, the rebuilding of systems of voluntary cooperation that are the essence of free enterprise, and the reason why markets work better than coercion.
May this note find us all ever closer to God, and His Peace.
First is that I have seen graphs of wages and productivity in parallel increases until about 1980, where wages flattened-out (with inflation decreasing buying power) while productivity steadily increases.
Corporate law need change. No 'Money is Speech', corporations have peoplehood status in law, and immunity to owners - so owners or VC's like BlackRock influencers have - in some cases - resources and wealth larger than some countries.
Remove or reduce-significantly the HR-departments, laws that require college degrees, and change Work-comp to not abuse workers.
.. remove immunity so they break-up to no bigger than what owner can manage carefully, 150 is Dunbar's number or lower - and that would be large enough, 'money is Speach' ends - and find the judges, justices, significant 'influencers' still living, and adults in families and publicly Pain&shame them, tasered till soiling-themselves and screaming, video streamed online for the world to see. Perhaps.
Also, I know businesses stopped hiring and overloaded employees - salary so you get what I had - leaving Job with about the same salary and 3 people took all my work I was doing alone.
Your mention of Health Care is a good example of external coordination, the corp. has no incentive to control cost because medical insurance or public-troth provides less but some, and in this model the homeless or not corp-insured person dead is fine with them because plenty where he came from - and if gov still giving money for each killed .. I mean 'died of covid' then that profit, ..
The corporation employee is enslaved by the need for health care insurance for family so will accept lower wages but abuse from manager and even protective class - all but white men - so reporting abuse is an excuse to 'believe' her and her lying friends, and you are out with 'trouble working with women/minorities.' on record.
And since we have seen israel training city and other police department for crowd instigation and then suppression, why not expect their organ-harvest murder system, but instead of rounding up Palestinas, their victims come in ER or are having regular simple treatment that they happen to die from.
Don't forget the gov-corporation Inflation-number scam, that inflation metrics leaves out the 3 most costly increasing categories; Fuel, housing, medical costs, so the corporation can give cost-of-living raises - while the keep the difference, and SS and other Pension systems do the same, so over time we are deciding to skip meals and medicine to pay rent or .. what?
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God Bless., Steve
I figured out long ago that most political movements were not internally coherent philosophies, but rather ad hoc coalitions of interest groups that didn't really necessarily have all that much in common (other than a common enemy), and in many cases, didn't even really like each other all that much.
One could make a leftist case for banning abortion, for instance, even though that it is a Left Tribe Article Of Faith.
Great food for thought Graham.
I agree that the battle in this time is sovereignty vs globalization.
I stand firmly behind sovereignty and liberty for all. A global one world government is a dystopian nightmare for me.
We can all see how power corrupts and absolute power corrupts absolutely.
You know, let them eat bugs et all. The clash of different cultures with forced mass immigration directed by globalists is glaringly a recipe for disaster.
And we must also remember that sovereignty requires the individual citizen to accept some responsibility for local and wider government performed in their name; plus that liberty is not license to do solely as we please at the expense of anyone else. These obligation elements do not get mentioned or discussed as often as they should.
What about the effects of multimillionaires paid millions of dollars a year when the company profits don't warrant those salaries, and the employees barely receive a living wage?
I hope you know Herr F. that I wasn't in any way suggesting people should not feel annoyance at undeserved extreme wealth......just pointing out that it all ends up in someone else's wage packet in the end. A truth that is rather counter-intuitive and so many people (perhaps most people) just don't get it.
Maybe the problem is in whose wage packet the money ends up. It sounds like trickle down economics. But then, I really don't know enough about economics to be able to delve deeply into it. I just read stuff, look at my monthly Social Security check and try to figure out how to pay all the bills.
Yes, you bring up an important point which had occurred to me in reading Graham's excellent and questioning essay: which is that it is all very well if an online widget sales company (for example) owned by a billionaire in for argument's sake the USA sells millions of various widgets - made in neither the USA nor the UK -to consumers in the UK. The wealth deriving from these transactions then awaits disposal by said billionaire at numerous other destinations not necessarily including the USA or the UK In this scenario, it is hard to see in what way any meaningful redistribution takes place that can measurably benefit consumers living in the UK. At the least, the relationship is asymmetrical, as there is no visible community base at a local or national scale that workers can see as evidence of some sort of "transactional validity" which makes sense of the society they live and strive in. The pre-internet model of a factory owner who - of course for his own kudos and ego, as well as community good will - visibly distributes part of his wealth in the area where he and his employees and customers live (in large part) ; by building a park or college or even sponsoring a football club locally, has now mostly gone. And with it any sense of a natural and "fair" relationship between owner/employer and his employee. Graham did touch on this consequence of the ultimate in globalisation and its test of the free-market economics stuff, and I am a total layman on this, but it is a rich area for discussion and argument!
The relationship between local and global has been ripped apart by multinational companies, who don't care what or where they sell as long as their shareholders keep buying the stock. The small family business in the US is ever shrinking and may only be prospering in small towns. Restaurants being the exception. Even in Thailand I see small businesses being taken over or put out of business by the evergrowing conglomerates. It's becoming difficult to find Thai made products that aren't made in China. There's an excellent chocolate industry here and their products can't be found in local stores. 3 beer companies own all the alcohol concessions and the same companies own all the bottled water companies, which is why there will neve be drinkable tap water in Thailand. The Thai govt. wants to attract more foriegn businesses to come here and when they do, the local Thai companies will be swallowed up and the owners will invest their money offshore. I don't know the answer to any of this, I can only see the problems that are here and arising.
Indeed. A free market of huge numbers of small businesses looking after themselves by delivering for their patrons seems to be the elusive sweet-spot. And globalisation , put on steroids twenty or so years ago by the reach of the worldwide web , has put a sledgehammer to that. I suppose globalisation at least in effect was what enabled the growth of successive empires by exploiting the resources of remote but reachable areas , not always in a humane way it has to be said; to the benefit of the political, military and cultural “centre” . But we are now in the era of globalism, which it might be argued has an important distinction from the former. In that there IS no cultural “centre”. And therein lies the essence of the problem of globalism for the Western world. Possibly.
Not only the Western world. Globalism, or Goblinism, wants to devour the entire world. There is no limit to their greed and desire for control and with it comes power, which are the 3 pillars of political governance.
I'm thinking about Thailand as an example. After the last election, the unelected parliment, put in place by the military juntal that staged a coup in 2014, refused to seat the winner of the election and replaced him with a businessman who has ties to a convicted former PM. The businessman was recently removed from office by the high court who said that his placing of a convicted felon in his cabinet was illegal. Today a co-alition of the frightened voted in the 36 yr. old, inexperienced daughter of a convicted felon who was a prime minister. When asked how she would govern, she replied, "My father has experience and he'll advise me." Rim shot/cymbal crash. The attempt to control entire populations is at hand.
“Adam Smith’s ‘natural sympathy’ can only really be sustained at a societal scale where some collective sense of community exists.” See “Dunbar’s Number.”
I am usually intrigued by those claims about inequality where X% of the population owns (or even merely controls) Y% of the national or global wealth. For example (making up some numbers) "we see that $4,000 Billion is owned by 'just' 400 families!!!" But no one who says this then explains how many families should own that $4T. If it becomes 1000 families, is that OK then? One million families? Or just that your family should be included in that particularly "lucky" group?
As Graham and others have commented, many other families do benefit directly or indirectly from the management and administration of large wealth by the more capable among us.
I think the problem lies in the distance between those “more capable among us” and those who contribute to the more capable among us.
The set of less fully capable among us still includes a spectrum of capabilities.
If we think about Bill Gates or Elan Musk, et al., besides having some very thrilling or inspiring vision, these successful people have provided products or services desired by millions upon millions of people. Thus they deserve some fairly large reward in turn. But these leaders and companies also required 2nd, 3rd, 4th, 5th, tier leaders to bring the big idea(s) to full fruition. Sometimes we learn about these people; and sometimes they remain anonymous to most of us. And this gets carried down to the night watchmen and the cleaning staff, etc. They also have a contribution to make and things work better when they are also capable within those areas of responsibility. [I think the pandemic showed us there were really very few nonessential jobs in our highly interdependent economy.] And for the most part they also get remunerated at a market clearing rate for their time and talents.
The focus on wealth disparity blurs the real concern, which is power disparity. Most of us are not really too concerned about John and Cindy McCain having 10 houses, or how many or how large someone's yacht is, etc. But we do get concerned about excessive political influence via Zuckerbucks or other distortions of the principle behind one man-one vote. Who are these large donors we hear about but may not know who they are? What is their agenda? Do we agree or disagree with it? Just how transparent should their role and contribution be in a "the people are sovereign" republic?
And yet The Federalist Papers were published anonymously. Is today different somehow that really matters? I don't have a clear and firm answer for this, but I would certainly prefer more transparency than less.
Yes, agree. I work very closely to this top tier so understand firsthand. The American experiment of creating a structural democratic holarchy has returned (if it ever fully left) to an obtuse empirical hierarchy with power concentration and wealth disparity on the grandest of scales with the oligarchs of tech a prime example of the most egregious (who I’m not associated with). Oligarchy is now the preferred order of the day at all costs and by any means, the means of which are using the masses against themselves (Hilary’s creation of TDS, baskets of deplorables and uncontrolled global mass migration). We all know how that turns out. Present day London. Full circle.
The correct number is whichever is under the tipping point where democracy gives way to plutocracy.
Thank you for bringing a couple of really interesting strands of inquiry together! I am still very much in the middle of understanding (trying to make sense) of "it all" myself... It seems to me that a few developments over the past centuries have created conditions that made it almost inevitable for humans to end up where we are now: the (relative) devaluing of human (first physical and now mental) labor as inputs to the economy -- i.e., the replacement of physical force via hydrocarbons and then electricity; and the replacement of mental operations via machines implementing much more precise and speedy algorithms -- then the shift from individually organized "financial security in old age" (retirement) to a government organized/mandated version, then the shift of those systems onto the commodity stock market, creating inflated artificial demand and "accounts" that feel like a Ponzi scheme (until withdrawals surpass new premium based purchases of stocks...), and the conversion of universities of sparsely funded and used institutions of elites to, again, an anxiety-for-high-earning-potential fueled commodity for the masses, inducing a state of no longer wanting to procreate paired with perpetual fear over the future. Globalization (the experience of competition from everywhere and everyone) did not help, but is, in my mind, only one puzzle piece in a much larger picture. Ultimately, whatever care people wish (and need) to experience coming from others cannot be delegated to a bureaucracy, because there simply is no formula that would no open itself up to gamesmanship on part of people wanting to abuse the system. How we will get out of this mess is going to be an interesting (and potentially violent) episode of humanity's evolution. Will we let go of the idea of perpetual growth? (like, which other aspects of life have this disease like quality of stopping only when the host expires?) Or can we, indeed, keep growing forever by moving things into the realm of digital and virtual value? Will we discover a non-hydrocarbon source of energy in time? I'm definitely looking forward to your next essays alluded to in this piece! :)
Interesting thoughts
Your “laissez-faire-gone-too-far” term might also be phrased as “laissez-faire, everywhere,” as a beloved professor of mine used to say with a sly grin.
Are you familiar with the economic system of Distributism espoused by Chesterton and Belloc? (A fellow on my side of the pond, Dale Ahlquist, has renamed it Localism). While I do not think our globalized society could—or even would—accept such a system, I do contend it better aligns with our human natures and better fosters/supports communities. (Full disclosure: it is a very Catholic economic system, which undoubtedly repels most moderns).
Cheers to you and yours, Graham!
Cheers to you too. I am aware of Distributism....but only vaguely. As you rightly imply though, our globalised society will not neccessarily go where we'd like it to. As I say in this essay (and others) I think we're still a long way from comprehending the full measure of the transformation that the internet has wrought.
Here's some thoughts on the post, in no particular order.
It is stated that globalization is good for consumers and bad for workers. Workers ARE consumers.
Globalization did not come about as a result of laissez-faire policies. It is the result of political and economic manipulation.
Perhaps I missed it, but I saw no reference to free markets anywhere in this post. Capitalism and free markets are not synonymous. Laissez-faire might relate to free market, but still not synonymous. I am for free markets as just one facet of freedom. Government is, by definition, an impediment to freedom. No, we can't have absolute freedom and must have some government. But to whatever extent governments regulate markets, that is the extent to which they are not free markets.
Yes the term free markets does get mentioned as such but I'm not entirely clear what you mean by "Laissez-faire might relate to free market, but still not synonymous"?
“Globalization did not come about as a result of laissez-faire policies. It is the result of political and economic manipulation.”
This process (at least where the US is concerned) is outlined in Judith Stein’s “Pivotal Decade
How the United States Traded Factories for Finance in the Seventies.”
This was a very good write up once again Graham. You never disappoint.
I would say that I may perhaps have a slightly different view on the laissez-faire capitalistic system that we supposedly have had over the last several decades, but perhaps not too different than what you're pointing to as the problems we face here.
I think that people often confuse capitalism with cronyism particularly when it comes to the government intervention. Nowadays it seems that we are discovering more and more just how much many of these big American companies are in bed with the government in one form or another particularly when it comes to their relationship with the lobbyists, or the outright handouts they are getting in the form of subsidies.
Many big companies have seemingly operated for years directly under the control of the Feds without much of the public even realizing it. Twitter would be a great example of this prior to Musk purchasing it.
Additionally the entire stock market is basically propped up by the Federal Reserve and that is about as much of a command and control system as you can get when it comes to the economic reality that we're all facing now.
However, despite all of this I believe the origin of many of these problems goes back to the globalization problem that you point out and in the case of the United States (and much of the Western world) we've allowed our economic system to be captured by Communists.
The day we decided to invite the Chinese Communist Party (CCP) into the WTO and started off-shoring our manufacturing to them is the day that we set the stage for them to succeed in the process of elite capture.
Some of our biggest corporations have been completely captured by the CCP and they are using that form of economic warfare to wreak havoc on our system. The woke capital, the widening of the gap between the haves and have nots, the destruction of the middle class, etc. all go back to this in my view.
The center of gravity of all the evil happening economically, militarily, etc. is a situation where all roads lead back to the CCP and it's a problem that our politicians pulled us into going as far back as George H.W. Bush after Tiananmen Square.
This what the Populist, or MAGA, faction of the Republicans are trying to tackle head on, but the obvious reason as to why they're hitting so much resistance is because all of our elites are simply captured by the Communists in China.
This is precisely why we need to decouple from them as soon as possible, but the remedy in doing this is going to be full of growing pains.
Thank you for allowing me to inject my two cents and for sharing another awesome piece.
God bless my friend.
Thank you Brandon. And Yes I agree with you that cronyism is pretty endemic whatever economic system is nominally operative. Human nature I guess.
I’m surprised you make no reference to Piketty’s thesis, that over time and inevitably, returns to capital increase relative to labour. It’s ironic that in Piketty’s view, the great levelling reset was the destruction of capital in the two world wars which led to a benign (because more balanced) distribution of rewards between capital and labour, that lasted until the 1970s. Since which time rewards to labour have stagnated (in the developed world at any rate) while returns to capital have skyrocketed, in the last 2 or 3 decades at geometric rates. So we end up with a top heavy, top down society dominated by powerful elites who control a disproportionate share of the world’s assets, instead of a bottom up communitarian society, which I would certainly prefer. How to restore that balance without a hugely destructive event is the key question. Perhaps it’s not even possible. I think the inchoate rage and unhappiness of large numbers of people at the bottom of the pyramid is what will provide the energy and trigger for just such an event. Carl Jung noted a similar phenomenon in the run up to both world wars, a sort of mass psychosis.
Thank you David for this succinct briefing on Piketty (I only know of him as someone who featured large in Left/Right political discourse a few years back). How to restore balance?....as I say in the essay I put little faith in political 'solutions'. I just watch the river flow...... wherever it's going.
I think the balance restores itself 😂 it just may be a rough ride
Speaking of Mass Psychosis and Jung too please check out this essay and site
http://www.awakeninthedream.com/undreaming-wetiko-introduction
At another level it could be said that globalization began big-time when Christopher Columbus sailed the ocean blue and "discovered" the "new world", which in the case of the America's were ripe for plunder on a mega-scale.
His misadventures were even authorized in the "name of god" and for the "glory of Christ" by various Papal Bulls
It could also be said that the original impulse for this globalization project was signaled, and authorized by the bogus "great commission" to convert all nations into the "one true faith" which was of course done via the business end of Constantine's famous Sword.
May this note find us all ever closer to God, and His Peace.
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The wage suppression is noted on the graph I saw around 1968-1969, wages went flat (reducing with inflastion) and productivity continue increasing by scalarizing workers then giving more work to those that could and would take-it-up-backside.
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I wonder what year the real ruling power switched from the 'Christian' Elites (that had some concern for workers) to the Jewish elites (that will drive us into 15-minute cities we need 'papers' to leave, and increasingly abuse us for excuse to bomb flat like Gaza, we are all Palestinians now.
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NAFTA is when - those that hate us and want us dead - by using our taxes to compensate companies moving our jobs overseas and destroying middle-Class. Large sucking sound as tax-base of most nation went with them, as well and family & business collapse, mothers divorced and married the blood-sucking Stiffest one around, the Gov. And the genocide of indigenous white peoples took a big leap to grave.
The collapse of country the ADL donners, and Federal Reserve want soon, the debt paid by liquidating all valuables public owned, and everything else of value bought at pennies on dollar, like what happened to Greece a few years back, but 'Trillions' times worse.
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A BlackSwan event like Nuke war would be good for the survivors once they figure out have to survive with local community and no State, Fed, corp, or Institutions and what judges teachers police false-witnessers, Abortionists, .. are 10 ft from rope in public park. Slapping women and punching men that disrespect you, or a more formal duel.
Sounds a lot better than this unJust, unTrue, .., level of Hell, doesn't it?
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God Bless., Steve