Are we really capitalists?
One of the favourite religious works of modern Western civilization, if not its Clarion call, is the gospel of capitalism. Of course the greatest of all the prophets, and the mantra of iconic Western leaders from Thatcher to Reagan is Milton Friedman, Nobel laureate and advocate of 'laissez-faire' capitalism. In a nutshell Friedman believed in unfettered markets and allowing natural selection within a free market economy to match supply with demand, and ultimately to allow an economy to find its own level without fiscal interference from big government.
A classical liberal, Friedman also supported various (sensible) libertarian policies such as the decriminalization of drugs and prostitution. If Friedman were dead today, he would turn in his grave at all of the platform speeches advocating free market economic policies. Yet what we actually have in place is a political marquee of vested interests, political positions within the legislature bought with interest and in return for favours in lobbying and contracts.
Despite our technology and millennia of recorded historical wisdom, we still live in the Dark Ages of Kings, Queens and Majestic Presidents, and we are no further from the system of Roman patronage than we were at the time of Christ. This system, in a word, is the politics of the pot, a pot through which all money flowed and all influence was bestowed, thus maintaining the power and influence of the hand that controlled it. A Roman noble, much like his medieval successors, would hold court and, in exchange for services rendered, would consider bestowing grace, position or favour upon one or more subjects deemed pleasing to his or her influence.
Those who please are rewarded, and those who ruffle feathers, no matter how effectively or hard they work, usually do not. We all see how favoured sons, daughters and mistresses often appear to advance seamlessly, and perhaps without excessive perspiration. The economics of the pot, or 'potonomics' is the simplest of all fiscal systems (other than spending until bankrupt) and is elegantly illustrated throughout the modern Western world.
Potonomics is universally applicable and condenses all roles and rewards under a central system of control and influence. Take the BBC as a classic example. Funded by a mandatory tax on all UK television watchers, some £100 is taken from some 20 million viewers to generate a legislated ball park income of £2 billion (ask them for a precise figure). These billions are then doled out from the BBC Controller's mighty pot into those of those of section heads, ultimately cascading down into the pots of individual departments. The supreme ruler has total control and budgets are apportioned by a witch’s brew of accountants, politics and viewing figures, not that the BBC has to perform or compete to get its revenues.
Yet again, the salaries of the directors and top brass went up dramatically this financial year, as scores of workers were made redundant, paid off from the pot. A protected market income, a super pot, and wreathes of garlic and Holy Water to keep away the slavering acolytes of Milton. The BBC is perhaps the most pure and perfect form of potonomics, and many lovers of the BBC (including its chief executives), claim that it should be left that way, but there are of course other examples.
US government medical research funding is run by the National Institute of Health, or NIH, which commands a vast annual Federal budget of $29 billion of tax payer's money (2005 figure). This is allocated into different pots covering different areas such as infectious diseases, diabetes and cystic fibrosis, but most of the money is allocated to those diseases which affect the rich, elderly taxpayers and legislators such as Alzheimer’s and cancer, to a level which is out of all proportion to the impact of these diseases upon the young, wealth-creating workforce of the USA. From each research division pot are allocated research grants, with the established illuminati of the medical sciences taking the lion's share.
Once there were little itty bitty grants for young (34-38 year old) investigators to start their careers, but these were scrapped in favour of large, centralised program grants run by a small number of office dwelling academics, giant multi-million $ pots before which young scientists and researchers must bow and run around if they are to obtain funding. Those who displease will not obtain funding, and more importantly will be denied the opportunity to publish their research in prestigious journals and advance their careers to become the pot holders of the future. Even at the level of laboratory research potonomics holds sway, as all research data is put into a communal pot under the control of a principal investigator. From this data pot research papers are ultimately produced carrying their all-important hierarchy of authors. A favoured son or mistress may be placed as first author on a paper whose actual content was supplied by a cast of mere extras. Of course only those who are first amongst equals will advance.
We could of course dwell on the extensive influence of the all powerful pot, from which attractive secretaries, exotic conferences, and weighty restaurant bills all flow. However, that would be preaching to the converted. What is interesting is how potonomics simplifies fiscal control and creates a self-polarising influence upon the distribution of national wealth. Whether 80% or 98% of national wealth is held by a mere 20% of the population depends on whether you listen to the accountants or the socialists, although there’s no contesting who holds the key to the treasury. A staggering 40% of the wealth is held by a mere 1% of the population, leaving some 30-50% of the population of the USA & the UK at or below the UN poverty line. No wonder Marx got so upset in Victorian London.
You don't need to be a socialist to be disturbed, but even the most ardent capitalist should argue that for optimal wealth creation and equitable distribution, that capital should be freed to allow the industrious and enterprising to create more wealth? This is the case you say? If you believe so, then just try and start a business and see how many bureaucratic, man-made and anti-competitive barriers to entry are put in your path within any field of endeavour. Now try and start a company without your own capital...
Wherever you choose to focus your mind, patronage and protected market shares abound. BP, Exxon and Shell have the oil market sewn up and, along with OPEC, conspire to drive up prices to maximises profits, domestic air carriers have protected slots at their own national airports, and we won't even start to get into the EU's Common Agricultural Policy, please...The world diamond trade is run by a restricted set of interests, and the entire pornographic film industry in the United States is run by a small group of Jewish businessmen.
Continental Europe revels in patronage and is beyond moral consideration, or indeed any recourse other than insurrection. The 'Sovereign' States of Europe plough well over a €100 billion a year into EU coffers, merely adding a weighty layer of patronage and bureaucracy on top of those which already existed within individual nation states. The Germans pay the most in, and get the least back, the UK pays a hefty proportion, and the French, masters of pomp and patronage, get back almost as much as they put in, surprisingly. One super pot to rule them all, and all this in the cause of European integration and French hegemony.
There is of course only one solution to world disorder and that is to make Milton Friedman President and Pope and, if he still has the energy, UN Secretary General as well. I'm not sure about capitalism, but it's sure a darn site fairer than patronage. Will we ever truly leave the Medieval/Roman world of patronage and become true capitalists?
A classical liberal, Friedman also supported various (sensible) libertarian policies such as the decriminalization of drugs and prostitution. If Friedman were dead today, he would turn in his grave at all of the platform speeches advocating free market economic policies. Yet what we actually have in place is a political marquee of vested interests, political positions within the legislature bought with interest and in return for favours in lobbying and contracts.
Despite our technology and millennia of recorded historical wisdom, we still live in the Dark Ages of Kings, Queens and Majestic Presidents, and we are no further from the system of Roman patronage than we were at the time of Christ. This system, in a word, is the politics of the pot, a pot through which all money flowed and all influence was bestowed, thus maintaining the power and influence of the hand that controlled it. A Roman noble, much like his medieval successors, would hold court and, in exchange for services rendered, would consider bestowing grace, position or favour upon one or more subjects deemed pleasing to his or her influence.
Those who please are rewarded, and those who ruffle feathers, no matter how effectively or hard they work, usually do not. We all see how favoured sons, daughters and mistresses often appear to advance seamlessly, and perhaps without excessive perspiration. The economics of the pot, or 'potonomics' is the simplest of all fiscal systems (other than spending until bankrupt) and is elegantly illustrated throughout the modern Western world.
Potonomics is universally applicable and condenses all roles and rewards under a central system of control and influence. Take the BBC as a classic example. Funded by a mandatory tax on all UK television watchers, some £100 is taken from some 20 million viewers to generate a legislated ball park income of £2 billion (ask them for a precise figure). These billions are then doled out from the BBC Controller's mighty pot into those of those of section heads, ultimately cascading down into the pots of individual departments. The supreme ruler has total control and budgets are apportioned by a witch’s brew of accountants, politics and viewing figures, not that the BBC has to perform or compete to get its revenues.
Yet again, the salaries of the directors and top brass went up dramatically this financial year, as scores of workers were made redundant, paid off from the pot. A protected market income, a super pot, and wreathes of garlic and Holy Water to keep away the slavering acolytes of Milton. The BBC is perhaps the most pure and perfect form of potonomics, and many lovers of the BBC (including its chief executives), claim that it should be left that way, but there are of course other examples.
US government medical research funding is run by the National Institute of Health, or NIH, which commands a vast annual Federal budget of $29 billion of tax payer's money (2005 figure). This is allocated into different pots covering different areas such as infectious diseases, diabetes and cystic fibrosis, but most of the money is allocated to those diseases which affect the rich, elderly taxpayers and legislators such as Alzheimer’s and cancer, to a level which is out of all proportion to the impact of these diseases upon the young, wealth-creating workforce of the USA. From each research division pot are allocated research grants, with the established illuminati of the medical sciences taking the lion's share.
Once there were little itty bitty grants for young (34-38 year old) investigators to start their careers, but these were scrapped in favour of large, centralised program grants run by a small number of office dwelling academics, giant multi-million $ pots before which young scientists and researchers must bow and run around if they are to obtain funding. Those who displease will not obtain funding, and more importantly will be denied the opportunity to publish their research in prestigious journals and advance their careers to become the pot holders of the future. Even at the level of laboratory research potonomics holds sway, as all research data is put into a communal pot under the control of a principal investigator. From this data pot research papers are ultimately produced carrying their all-important hierarchy of authors. A favoured son or mistress may be placed as first author on a paper whose actual content was supplied by a cast of mere extras. Of course only those who are first amongst equals will advance.
We could of course dwell on the extensive influence of the all powerful pot, from which attractive secretaries, exotic conferences, and weighty restaurant bills all flow. However, that would be preaching to the converted. What is interesting is how potonomics simplifies fiscal control and creates a self-polarising influence upon the distribution of national wealth. Whether 80% or 98% of national wealth is held by a mere 20% of the population depends on whether you listen to the accountants or the socialists, although there’s no contesting who holds the key to the treasury. A staggering 40% of the wealth is held by a mere 1% of the population, leaving some 30-50% of the population of the USA & the UK at or below the UN poverty line. No wonder Marx got so upset in Victorian London.
You don't need to be a socialist to be disturbed, but even the most ardent capitalist should argue that for optimal wealth creation and equitable distribution, that capital should be freed to allow the industrious and enterprising to create more wealth? This is the case you say? If you believe so, then just try and start a business and see how many bureaucratic, man-made and anti-competitive barriers to entry are put in your path within any field of endeavour. Now try and start a company without your own capital...
Wherever you choose to focus your mind, patronage and protected market shares abound. BP, Exxon and Shell have the oil market sewn up and, along with OPEC, conspire to drive up prices to maximises profits, domestic air carriers have protected slots at their own national airports, and we won't even start to get into the EU's Common Agricultural Policy, please...The world diamond trade is run by a restricted set of interests, and the entire pornographic film industry in the United States is run by a small group of Jewish businessmen.
Continental Europe revels in patronage and is beyond moral consideration, or indeed any recourse other than insurrection. The 'Sovereign' States of Europe plough well over a €100 billion a year into EU coffers, merely adding a weighty layer of patronage and bureaucracy on top of those which already existed within individual nation states. The Germans pay the most in, and get the least back, the UK pays a hefty proportion, and the French, masters of pomp and patronage, get back almost as much as they put in, surprisingly. One super pot to rule them all, and all this in the cause of European integration and French hegemony.
There is of course only one solution to world disorder and that is to make Milton Friedman President and Pope and, if he still has the energy, UN Secretary General as well. I'm not sure about capitalism, but it's sure a darn site fairer than patronage. Will we ever truly leave the Medieval/Roman world of patronage and become true capitalists?
posted by The Angry Man at 8:05 AM
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