Iso,

I created this website to communicate more effectively. It is only several days old. It will under go changes as I learn how to navigate the editing of the site. My daughter helped to set it up. She used to work for Podio, then Citrix, then Twilio and now she’s on her own.

I still keep somewhat anonymous since I need to add in more features before going fully public. I will add a “members only” login to facilitate one to one dialogue. You log into your page. Only you and I can see it. For now I have to post my comments on the first page.

Here’s my reply to you. It is not complete. I will add additional info.

You can reply to me at the bottom. Put in a fake email. I have no way to check it.
“if capitalism is the cause of all our social problems from climate change, global warming, racism, sexism, war, pollution, then the solution is simple: Just get rid of Capitalism.”

Capitalism and socialism are economic systems not cultural/political systems. You can still have racism and sexism under socialism just as it’s possible to have equality under capitalism. There is no Utopia, because there will always be humans in any system devised. There is no inherent reason for racism to be a symptom of capitalism anymore than in socialism. “Racism” is a favorite call of the left. It is the call used to silence opponents. Why, if they are racists, then every thing else they say is false. Ergo, capitalists are racists.
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As for climate change, global warming and pollution, I lived in Baku, Azerbaijan. Baku was very polluted from oil and chemical spills, but the most polluted place in the world was Sumgayit, an hours drive away. All Westerners were warned not to travel there. This was done under socialism. Don’t give me the “but they didn’t have socialism in the USSR”. We already covered that territory. I am not finished with why there was so much pollution caused by socialism.

Do you remember the mysterious acid rain in Western Europe? The answer is that it was pollution coming from the unregulated factories spewing pollution to make products for the vaunted socialist economies in Eastern Europe. Don’t tell me that socialism doesn’t itself cause pollution, and global warming. When the Iron Curtain fell, the acid rain stopped.

“Most socialist mean by capitalism the private ownership of the means of production, resulting in the exploitation of the workers in an attempt to maximize profits. When we get rid of the profit motive and private ownership of the means of production, we can put people before profits.”

You are COMPLETELY ignorant of what profit means. You do not understand the interaction of people in a system and their relationship to the profit of the system. Being anti-profit and pro-people are meaningless slogans. Even a socialist organization has to make a profit and a capitalist one has to be pro-people. This is why all capitalism occurs in free or relatively free markets where employees are free to seek other opportunities or to create their own. Employers who mismanage their employee environment soon go broke. This insistence by the left that capitalists are insensitive jerks running slave labor camps is patently false. So, highly profitable companies like Apple, Google and Amazon are really hell to work for and their employees are poorly paid and unable to leave? Give it a break. Lefties love slogans and criticism, but hate analysis. There is no analysis to support your statement.

Profit is the one metric by which all of the workings of an organization come together in one number. Good companies also share profit. My oldest daughter was granted shares when she worked for Twilio, which just went public. Look up Twilio. She was a mid-level employee in marketing. Her 5,300 shares are worth $160,000. She’s 29 years old. She actually did not like her boss at Twilio and quit about a year ago. She started her own business. Now, that’s capitalism! Quit your job and still make money from the capitalist exploiting class! As a 28 year old she was paid $75,000 a year, plus benefits, plus the stock. That’s how horrible capitalism is. Right this very moment she is on a capitalist airliner flying to capitalist Copenhagen to enjoy the Danish summer with family and friends. Life is awful under capitalism.

Profit is the financial shock absorber in an organization. This is also why all economic systems, including socialism need to take place in a free choice marketplace. If the management does get stupid, and really does squeeze their employees for more profit, then people can leave. There is nothing inherent in socialism that makes it a better environment for people than is capitalism. If a socialist enterprise ignores profit, then it will fail. Profit is not unique to capitalism.

Did you ever realize why Denmark has a productive capitalist sector and a distributive socialist sector? Because socialism is incapable of running an enterprise profitably. It is in the nature of its ownership and decision making qualities. When there is no financial barometer to gage the success of a financial enterprise, it misuses its resources. The exact same enterprise in a private capitalist system would go bankrupt. In a socialist system, the state is forced to feed it so it doesn’t go broke. If there is nothing inherent in the enterprise to force it to stay solvent, then it will go broke. Socialist enterprises are always broke. They just get additional infusions from the capitalist sector by way of taxation.

The capitalist solution is to force the financial gains or losses onto a private person or entity and, this is the important point, the ownership has no legal claim on the state’s money. None. The capitalist is forced to manage his resources effectively or go broke. Socialist management can rely on the state if it needs more resources. This is EXACTLY how the Danish socialist parts work. NONE of the socialist enterprises make money. ALL require money taxed from the capitalist sector to stay afloat. Without the capitalist sector there would be no socialist sector, ironically, and to the chagrin of all thinking socialists.

This is EXACTLY why China gave up socialism. Socialism is not productive and requires additional resources from outside the socialist system itself. China basically cannibalized itself to do this and so did Stalinist Russia. The Gulag in Russia was not just a prison. It was actually a slave labor economy that provided the Soviet socialist economy with the resources it needed to function. It did this by depriving the prisoners of all but the bare minimum to live and the extra production was shipped off elsewhere. Anne Applebaum’s “Gulag” is the best ever written. Read it.

Capitalism produces the resources it needs internally. Yes, all individual enterprises require resources outside of itself, but as a system, it produces more resources than it consumes. That’s how nations get wealthier under capitalism. The profit barometer is the gauge to test this. Losses in an enterprise require an infusion of additional resources. Losses in a system also require infusion from outside the system. Under capitalism individual enterprises are allowed to fail to be replaced by other enterprises where hopefully, the employees and managers run the enterprise better.

Under socialism neither the individual enterprises nor the entire system is able to be productive. It is possible to temporarily exploit various areas in a country, especially minerals. Ever wonder why Russia today actually has all those mines and oil wells and their relationship to the old socialist order? Socialist Russia was a large exporter of oil to the West. The Iron Curtain fell in 1991 because the economy couldn’t pull its weight anymore and fund the second largest military in the world on the GDP of Brazil.

Extractive industries are among the easiest to run. The coal mines and steel mills are still running in Eastern Ukraine. The state uses a lot of the steel for tanks and other military hardware. Why do you think that Russia couldn’t let it go?

More complicated industries, such as phones and computers are impossible to operate under socialism. These require a lot more consumer feedback and financial adjustments than socialism can allow. To make an effective decision a decision makers not only needs effective feedback, the manager needs to receive consequences from his decisions. Like all humans, immunity from ones decisions results in defective decision making and defective humans. The most identifiable is the spoiled child. Another is the failed enterprise.

Effective managers of effective enterprises have to constantly make decisions that affect all aspects of the organization. The profit motive is the classic method to achieve this.

“Sometimes it is better to put people’s grievances and goals into a short pithy statement they better understand than giving them a 400 page thesis to read. Lenin understood this and originated some powerful slogans: ‘all power to the Soviets’ and ‘bread, peace, and land.’”

In both of these slogans Lenin lied and people died, to coin a phrase. In “all power to the Soviets”, his out-of- power faction did not control the Petrograd Soviet and who already held power in the factories. They were set up by a competing socialist organization, but not Lenin’s. He made a pragmatic choice and slogan. It’s like me saying, “all power to Google”. There’s no way I have any influence over Google and neither did Lenin over the Soviets. They were a creature of other power structures he did not control. He was out of the country and he told Trotsky to get them under his control, which Trotsky failed to do. Besides, he had no intention off letting them stay in control. He eventually removed them when he had enough power to do so.

A soviet is a form of syndicalist worker control of factories and other productive enterprises. The was no way that Lenin was going to let anyone else control the economy. He lied.

The other slogan was also a lie. Lenin knew that the peasants wanted private ownership of the land. Since emancipation in 1863, the peasants had fought long and hard to get their own plots. They were not about to give up that dream for a socialist slogan. Lenin found it hard to win the peasants over to socialism. Offering them land was the lie to get them to support him. When Stalin eventually collectivized the land, the peasants fought him so viscously that he retaliated with murder, theft, forced deportation and the Gulag. Another lie perpetuated by socialism. It is easier to lie with a slogan than to explain the real world to people. They might not like your explanation.

Did I tell you that my wife is Russian? Why do you think I lived in Baku? She has a PhD and lived her first 30 years under socialism. She has bought me dozens of books dealing with the USSR and Russia.

As long as I am on this subject, maybe I should explain my interests. When I got my degree in economics, I began my interest, first, in the economics of underdeveloped countries. I live close to Mexico. I speak Spanish and spent many summers in Mexico with my Dad, a Gringo who loved Mexico. So, why do underdeveloped countries fail to develop successful political and economic systems? Since many of these countries had tried socialism, why did the promise of socialism fail? I then took the opposite approach and researched why successful countries were successful.

Then I married a Dane. We divided our time between the US and Denmark. I began to learn Danish and research politics and economics in Denmark. We have 2 daughters, but eventually divorced. I understand better than most Americans, certainly better than Bernie does, how the Danish economy and health system work.

After the divorce, I decided to work somewhere in Europe and got a job in Baku. Having already studied the USSR and socialism, it was fascinating to actually live there and then to marry a Russian. This was 1996. Certainly the USSR had already collapsed but my wife introduced me to many people who would tell me about life in the USSR and it was so recent in the past that their were many remnants of socialism left. Even after a bomb explodes you can still tell a lot about the bomb from the pieces you find.

So, you can see my skepticism about socialism. And just as a quick guess, I have more knowledge about socialism AND capitalism and from different perspectives than you do. You probably have an theoretical knowledge and go to your socialist meetings. If I am wrong and you are a survivor of Eastern European socialism, tell me some experiences and I’ll stand corrected.

“And of course you know that socialists are divided between those who see the coming of socialism as an event, the violent revolution. The other camp are the social democrats and revisionists who see the coming of socialism as a process. That is, we will gradually legislate and take a non-violent route to socialism. Both camps are waiting for the inevitable demise of capitalism as a natural phenomenon.”

Yes, this is what I try to warn non-leftists about. Leftists see governing as a neutral process. Socialists se it as a tool to achieve a specific result.

“Therefore no detail analysis is required of an economic system that will die a natural death and be replaced by socialism.”

I have it on good authority that Martians are coming and they will impose their own system on us so why analyze capitalism? Do you see the illogic of your statement. Without analysis how do you know capitalism will fail?

“The continuing crisis of capitalism that a lot of people are now looking for an alternative to capitalism.”

” Most mainstream and Marxist economists believe the current crisis of capitalism is caused by growing inequality.”

This is the part that anti-capitalists go off the rails. The US economic system is very mixed. There are capitalist parts, socialist parts and most of the capitalist parts are regulated. Some parts, such as health care are heavily regulated. To make the statement that there is a crisis in capitalism is unsupportable. The most important analysis would be to separate out the influence of government regulation before you make that statement

Another way to look at the coming demise of capitalism is to see that those Chinese socialists sure were stupid! I mean how dumb to you gotta be as a trained, committed socialist not to see that capitalism would fail? I mean after 40 years of a failed socialist experiment with China still one if the poorest countries in the world and millions of dead people, who would want to change to capitalism, the economic system of ALL the wealthiest countries on the world? Who makes stupid decisions like that? They should have talked to you first. You even knew without any analysis that capitalism would fail. This makes you a better predictor of the future than they are. Who knew?

“socialists do not do detail analysis of economics for purposes of reform because it will do no good.”

I was clear here. I meant the study of socialism, as far as it can be studied, not the study of the current economic system.. Socialism just won’t magically appear like Venus out of the foam fully formed. All political and economic systems take work, years of work. Untested theory is almost useless. Ask Lenin, Stalin and Mao, how come they got it wrong.

“They believe any ruling class will not willing give up their powers and privileges even to save its own necks. Does anyone believe the capitalists are willing to give up even a little bit of their power, privilege, and wealth to some redistribution scheme?”

No one willingly gives up their power and privileges. This is not an indictment of capitalism.
It is hard enough to get them to accept even moderate tax increases.

Thomas Piketty’s “Capital in the Twenty-First Century.”

I have not read Piketty. I have read analyses of that work. My favorite one said that he was right, but for the wrong reasons. I have already written too much.

VanDansonEconomicsIso, I created this website to communicate more effectively. It is only several days old. It will under go changes as I learn how to navigate the editing of the site. My daughter helped to set it up. She used to work for Podio, then Citrix, then Twilio and now...Countering the Myths of Economics and Politics