Ian Welsh on The System

The “System” Did Not Appear Ex Nihilo. Ian Welsh. July 13, 2020.

Last week I wrote an article lampooning the idea that people are only following incentives and therefore are not bad people.

Let’s spell this out clearly.

The system, whatever the system is, whether it is New-Deal Capitalism, Stalinist Communism, English high-Feudalism, Neo-Liberal Capitalism or French late Medieval Feudalism, is a creation of humans.

Our system is always a choice.

It doesn’t feel like a choice to you as an individual, because it is a collective choice which weights a very few individuals preferences much higher than yours. Not being Barack Obama (who had a choice to end neo-liberalism) or FDR (who did choose to create a new type of capitalism) or Khrushchev (who created a different type of communism, recognizably different from Stalinism and much more pleasant to live in), you have never had much of a choice.

So, being weak and only one person, to you the system feels like a force of nature or God, given, not made.

But the system is always made and is always a result of choices. Sometimes individuals at key junctures get to make a choice or a difference, and most people only make choices as part of large groups. But it is a choice.

Even within a system, different results are produced. English feudalism was far kinder than French feudalism, with far more free men and far fewer villeins or surfs. England produced common law and even non-free men and women had rights. Russian serfdom by the end of the Czars was known for its cruelty, but it wasn’t always thus, and so on and so forth.

More recently, and if not within your memory (though it is within my memory), then certainly within the memory of people you know, the previous form of capitalism running American and most of the “free” world produced the following results:

• steadily increasing incomes after real inflation was measured;
• steadily decreasing share of income being made by the richest in society;
• steadily increasing prices (but slower than wages).

It did all those things because it was designed to do those things. A choice was made in 33 and made pro-actively every 4 years after that to keep doing it. After a while, people became wishy washy about its continuation. You can trace it in stages: the post-war Congress weakening unions; Truman deciding to keep the war time state running; Kennedy deciding to lower top taxes; qualified immunity in the 60s; Nixon deciding to start the war on drugs, and so on.

But it didn’t really end till Reagan. Reagan was a choice, that’s why there were elections. He had been worked for, hard, by various rich people who could see that the current system was slowly siphoning away their power, and they found, with racism and the fear engendered by the oil shock crises, enough of a wedge to get a voting majority of Americans onside.

Then they systematically changed how the system operated so that it would produce:

• stagnant income for the majority of the population (really decreasing if inflation were properly measured);
• steadily increasing share of income and wealth controlled by the wealthiest in society;
• steadily decreasing prices of production of goods. 

At first some of this was passed on, but most of it was kept as profit.

Neo-liberal Capitalism produced different results from New Deal Capitalism because it was designed to do so. It had different incentives, to use econo-speak.

To say “people just follow the incentives” is driveling idiocy when dealing with large social matters, because in large social matters the incentives are dependent variables: they are chosen by the leadership and the mass of the people (who, yes, do have power in large enough groups. Reagan is not possible if enough Democrats don’t defect. They were called the “Reagan Democrats.”)

Nor are people ex-nihilo. We are shaped by the society we live in. Reagan’s revolution could not have happened while the Lost Generation still had large numbers because the Lost generation remembered not just the Great Depression, but the roaring 20s. Knowing that the wealthy had caused the Great Depression, most Lost believed in keeping the rich poor. Those who came afterwards, not properly remembering the 20s, did not feel this in their gut and were willing to sell out.

Neoliberals said “you can have a suburban home, away from the blacks and we’ll spike the value of housing and stocks, so you’ll be rich and you won’t even have to work for it.”  Sub Voce: “since you get it for doing nothing, you won’t care about wages, which we’ll crush.”

More than this, a system selects for people who will do what it requires. You cannot join many gangs without murdering someone first. You cannot be in power in DC or almost any state capital if you are not onside with crushing wages and making the rich richer. You will not be allowed in power. You will not want power, because you will quickly find out that you can’t do what you want, you can only do evil.

The system doesn’t so much turn people evil as it selects for evil. The “incentives” don’t work on everyone, what matters is that if they don’t work on you, you don’t get into power or if you somehow fluke in (like Corbyn) you don’t stay in power. You won’t compromise enough.

People worked hard to create neo-liberalism. Once they were in power they worked hard to create a system which excludes those who don’t want to crush wages and make the rich richer. The rules of the system, the incentives, were created by men and women and are maintained by men and women.

They are not unchallenged, but so far every challenge has lost. Corbyn was a challenge. Sanders was a challenge. There have been other challenges. They all lost. This was true of every challenge to the New Deal order from 36-76. All challenges lost. It looked unbeatable.

One day the New Deal Order lost. One day Neo-Liberalsim will lose. The questions are only “when?” and “to what?”

Hitler and Mussolini and Lenin defeated older orders too.

So the people who run America and the developed world are almost all very bad people. They were selected to be very bad, and they also worked very hard to ensure that only evil people could get power, because only evil people will do what their system requires and it is the system that makes them powerful and rich. (Reminder, Nancy Pelosi is worth 120 million.)

The systems selects for evil, the system was created and is maintained by people who worked and work hard to make sure it selects only evil people to run it.

Just like Soylent Green, the system is people.

OR...

much more sarcastically (and entertaining to boot)...

The Well Meaning American Oligarchy Are SO Misunderstood. Ian Welsh, July 8, 2020.

Just saw a case of the argument that “the people who have been enriching themselves by fucking everyone else for four decades are misunderstood, they’re just following the incentives, and suggesting that the people killing and impoverishing you are bad is polarizing.”

Lovely.

Everyone is well-meaning, and it’s all just a misunderstanding. They don’t mean for people to die or suffer when they cut food stamps or Welfare or start wars or don’t handle a pandemic. Oh no, it’s all just a misunderstanding driven by market laws that the beneficiaries themselves didn’t create (they are far different than the market laws which existed from 33-79 and which produced very different results.)

Those laws just fell out of the sky, and weren’t created by men and women who wanted certain outcomes.

Why if only our rulers understood that the market laws that appeared during their reign without them doing anything to create them were bad for almost everyone, surely they would change those laws to laws which raised wages, removed the wealth of billionaires and ended American oligarchy while relieving poverty and providing universal health care.

It is, indeed, all just a misunderstanding, and I feel terrible that I have suggested that people who fought for well over 40 years (they took power in 80, but fought for 80 long before that) actually understood what they were fighting for. Surely they believed that reducing taxes on the rich and corporations, slashing welfare, creating a carceral state, running asset bubbles and deliberately crushing wage inflation with the Federal reserve would resound to the benefit of every American, not just those they favored.

Why yes, they had no idea that making the rich richer and ensuring everyone else got raises below inflation would not be to the benefit of all.

Phew.

It’s all just a misunderstanding. They didn’t know that they were doing evil. Every time they took food out of a mother or child’s mouth by cutting welfare and food stamps they said “this is for their own good” and believed it.

And a person who believes starving someone else is good isn’t bad, they’re good, just misunderstood.

Every time they crushed wages by raising interest rates to crash the economy when  wages increased faster than inflation, they were doing it for the sake of ordinary Americans, not to keep wages down to benefit their own class. And every time they gave money or tax cuts to the richest, well that’s so that the rich could pay high… er, do something for ordinary Americans, something I’m too stupid to understand, since I thought things like “people create market laws, they don’t drop out of the sky.”

Shows what I know!

Certainly people who crush wages, avoid universal health care, fuck up a pandemic, take food out of the mouths of children and poor people are just misunderstood. It’s all for Americans own good, and we just need to explain to those in power that they’re mistaken and politely ask them to change the rules (oh wait, they don’t create the rules, but perhaps new rules can fall out of the sky). Fourty years isn’t long enough for them to figure out on their own that doing more of the same thing will keep hurting everyone but the rich and the wealthy.

It’s good to live in such a world, a world where we all want the best for humanity, a decent living, kindness, food and shelter for all, and where we are just arguing over means. And surely we are all reasonable and can understand that our policies must change, even if after 40 years they have made a few filthy rich and impoverished everyone else. Who would think that deliberately crushing wages would crush wages? Who would think that running asset bubbles would favor those with more money rather than those with less money?

No one could have anticipated, and Nancy Pelosi, worth 120 million dollars, is aghast that all this happened. Why if only she had understood that crushing wages and favoring the rich would hurt most Americans and help the rich! It’s all just a big misunderstanding, and Nancy just didn’t get it. Neither did Obama, or Trump, or McConnell, or Reagan or Clinton or… why there are so many well-meaning people who didn’t understand. The Koch brothers would never have supported all these policies if they knew they would hurt almost everyone else but help them. Nor would all the other billionaires and centi-millionaries and deci-millionaires and the people who work for them!

This has removed a great burden off me. I know now that it’s all just a big misunderstanding, that the rulers are good people who want the best and are just a little thick, not understanding that policies meant to hurt ordinary people and make rich people richer would, in fact, hurt ordinary people and make rich people richer.

Good people can disagree, and now that we know that the majority of our leaders are good people, who are just a little mentally challenged, why I’m sure we can clear this up in no time, and have a good, kind, fair economy that helps everyone again. Pelosi and Trump will be thrilled to work together on this, I know.

What a RELIEF.