Freedom, Justice, and Competition

I frequently bemoan the fact that political debate starts at narrow issues, rather than at foundations. I’m also fairly certain that I’ve mentioned before some thoughts about the nature of human institutions and their relation to freedom and justice and the inherent competitive nature of them. I’d like to take a few moments to explore that concept a bit, because I think it is one of the fundamental pillars of how I think societies should be understood. I strongly believe that human institutions should have humanity as their primary goal and focus: we should focus our efforts to bettering ourselves and our habitat, as a whole. Secondarily, we should promote all life in our habitat. I think these tenets are held by a majority of people – it benefits each and every one of us. When we imagine utopia, unless you are Ayn Rand, you imagine a world of peace, of tranquility, of selflessness, and comfortable living. In my experience, this is almost universally the case. Therefore, in order to achieve these goals of transforming society into something more conducive to said goals, we must understand the way that societies are built and they way institutions exist and interact.

There seems to be an intersection of real positive growth in understanding of human culture in philosophy, economics, and sociology. Philosophers grow and develop new analyses of the human condition, while economists and sociologists confirm or deny or build upon those ideas. I think, then, we should do some armchair work and think about the nature of humanity as a whole, and from there, human institutions. Humans are fundamentally self-centered, seeking one’s own survival even at the expense of others. Even among those of us who might sacrifice ourselves for the good of others, we often do so at least somewhat begrudgingly. We do it either because it is expected of us or we hope to receive something in return at a later date. We have laws on the books protecting one’s ability to protect oneself or one’s property even to the point of killing some trespasser. I’m not stating something we all don’t already know: foremost in our minds, at least to some extent, is the fundamental belief that you are more deserving, more important than others. We lie, we cheat, we steal, we hurt in order to guarantee that we keep our jobs, that we get the last turkey on the shelf, that we win the prize. At the fore of these behaviors is a maxim that, whether consciously or unconsciously, we hold above all else: I am worth more than you. I don’t think there is much evidence to the contrary, and the evidence required to disprove this observation seems enormous.

Human institutions are, at bottom, groups of humans working together to some end. Whether its the church, the state, or your company, each of these institutions can be understood as a collaboration of individual powers and skills to a combined purpose. That collaboration need not be voluntary to be exist, and that power need not be recognized to exist. I think this is the key observation: human institutions multiply (or at least combine) the power of numbers of individuals into one single entity, such that that entity is much more difficult to overcome by those of lesser power. In other words, a bigger company, a bigger government, a bigger labor union are all more difficult to topple compared to smaller ones. The combined effort of each individual to survive is multiplied into the behavior of the larger entity, simply based on the fact that all its members of human. The entity, then, operates in such a way that it adopts the same maxim as humans themselves: I am worth more than you.

Consequently, institutions lie, cheat, steal, and hurt in order to guarantee their survival. This behavior extends even to the members of that entity. Anyone who has been an employee of an especially unreserved corporation knows the cutthroat nature of some policies that, while harming members of the entity, fundamentally strengthen the entity’s chances of survival. We further see this in nuclear arms races, in stagnant wages, in destruction of the planet. A government is more likely to survive if it has more nuclear weapons than everyone else, a corporation is more likely to survive if it keeps wages as low as possible, and both are more likely to survive if they value productivity at the expense of the environment.

Generally speaking, this survivalist behavior is fundamentally short-sighted. We value a short-term guarantee of our survival against long-term goals beyond that. We can see this in individuals, too, and it seems to reflect Maslow’s hierarchy of needs in both cases. When we do not perceive our survival as guaranteed, we are more likely to behave rashly in order to improve our chances. Conversely, when we perceive our survival as more or less guaranteed, we are more willing to spend our time or money on pleasures or even on other people. Similarly, a human institution not guaranteed its own survival is more likely to behave more rashly.

At this point, I think we can make some arguments about how we should structure our societies and institutions, given the aforementioned goals and observations about human nature. If we want guarantee of survival as individuals, we must guarantee methods of survival (income, food sources, etc.). If we want to guarantee survival for ourselves, we must guarantee survival for most (preferably all) people, otherwise we run the risk of being subject to the unhappy end of our selectivist policies. Moreover, our institutions must be guaranteed some form of survival. Guaranteeing individual survival seems at least hypothetically doable, but in most theories I have encountered, guaranteeing survival of institutions runs contrary to that. I’ll examine a few.

Anarcho-capitalism is absolutely fascinating, and honestly, I would love it if I thought it were at all viable. It relies on the belief (with which I agree) that humans, on an individual level, are more likely to be responsible and compassionate to others without government mediation. It tacks on free-market principles in a very neoliberal fashion, holding that capitalism holds the secret to human happiness. I reject the latter notion out of hand, because capitalism without government mediation results in different all-powerful institutions fighting for survival at the expense of individuals (i.e. feudalism).

Socialism is, I think, a step in the right direction. Varying forms hold differing methods and results, but in general, socialism promotes the ownership of the means of production collectively by the citizenry. In many cases, socialism becomes necessarily hostile to other institutions, gobbling up all sorts of functions under a single monopolistic hegemonic monster. I reject this (simplistic) form of socialism out of hand because it still harms individuals by promoting the institution at their expense.

The next few theories are actually strangely similar, in that they recognize a few of the same problems with the former theories and in that they recognize the inherent flaw in our quest for utopia. Forms of social democracy (Marxian, et al.), anarcho-syndicalism, and some forms of anarcho-communism I think learn a lot of the lessons of our economic history and attempt to account for flaws in our behaviors. I do not want to delve into any detail, but I would invite the interested reader to look through the linked articles and perhaps read some other material on the subject. The important points, though, are that these libertarian forms recognize the need to level the playing field, so to speak, of institutions against one another. Government should never exceed the power of corporations so as to usurp them, and vice versa. Corporations, similarly, should never have the power to usurp one another. Indeed, maintenance of equality among all people and institutions is what makes these theories tick. In recognizing that the survivalist instinct is an unerasable element of human nature, they instead try to effectively lock it down in a standstill. By guaranteeing that one person or institution cannot overcome another, they simultaneously guarantee individual and institutional survivability. Helpfully, social democracy and syndicalism both retain much of the sort of hierarchy in society to which we are accustomed, maintaining the roles of leader and follower many people (including myself) agree are necessary.

I ended up writing a good bit more than I originally intended to, so I will leave a short summary to tie this together and to help those who skipped some (or all) of the post. Because humans and their institutions are fundamentally selfish, we need a system of economics and government that either eliminates or ties down those selfish tendencies so that we can realize greater happiness. Left-libertarian forms of government and societal organization retain the individual freedoms we cherish while transforming institutions in such a way that they retain their productive power while significantly reducing their capacity for harm. It’s not utopia, but it’s a gigantic leap in the right direction.

Competition

I got into a debate on Twitter earlier that helped me to sift through a lot of the reasons I have for thinking the way I do about the economy and ethics in general. The main point, I believe, is that human selfishness and competition are simple facts and that we must decide how we can manipulate those factors in order to produce a better system. The failings of past systems were the result of human nature and the way we responded to social structures, so we need to design a social structure that reduces the likelihood of unfairness or injustice or what have you.

I doubt I need to delve into feudalism or mercantilism to explain why they were bad systems. They were bad because they were less efficient and they distributed the fruits of labor unjustly (I’m vastly oversimplifying the case). With that in mind, we should analyze the history of capitalism against the criteria of it being just and fair and efficient. Volumes have been written on this subject, so I intend to provide a very summary view of what I think are some of the most important critiques of capitalism and how they relate back to the title of this post.

For anyone that has taken even only a single economics course, capitalism sounds fantastic. It distributes goods efficiently and people are rewarded for work in such a way that it is perfectly in fair with regards to the rest of the market. However, it seems to fly over everyone’s heads that these sorts of results are only possible under conditions of perfection: perfect information, perfect competition, etc. It should be no surprise to anyone that we have nothing like perfection in reality. People and corporations lie and there is hardly perfect competition anywhere in the market. In fact, it seems that there is vastly more competition among buyers than there is among sellers. There is vastly more competition among employees than there is among employers. Not only do we lack perfection, but the ratio of power leans heavily against the average individual.

What results from this? Unjust distribution of wealth. People lie and manipulate to make sure the die is cast in their favor. People group together to form corporations and use their combined power (reduced competition!) to prevent those whom they employ from grouping together also. By necessity it seems, there must be fewer businesses than there are people. Therefore, there is less competition among businesses than there is among individuals. As buyers of labor, employers therefore hold more power than the potential employee, the seller of labor, because while there are only n businesses, there are some 2ⁿ (or whatever the number may be) people who could potentially fill that job. The idea here is, “If you don’t work for $7.25 an hour, I guarantee the next person in line will.” This creates a race to the bottom, resulting in incomes for people that are lower than what their work is actually worth. In other words, you are paid less than your production value to your company. Conversely, when a product is sold to you, it is sold with profit margin. That means that while you, in terms of productivity, are being shortchanged, the businesses and their owners are getting more than what they put in. This is all due to the competition mismatch and guarantees that without some sort of outside intervention, the economy will tend towards a polarized distribution of wealth with workers on the poorest end and capitalists on the richest.

It should come as no surprise that workers, historically, have revolted against this pattern in capitalism (cue the populist response to the Industrial Era). From this we get government intervention and labor unions. Governments come in and attempt to distribute some of the profit back to workers who were unfairly paid (and, later on, we get more welfare). Labor unions attempt to unite workers as one entity in order to reduce competition among them, thereby decreasing the buying power of the employers. Cue the prosperity of the middle class.

All I’ve done is described with extreme brevity what happened in history. Yet people look back on the policies of the Industrial Era with some sort of twisted nostalgia, as though it was those policies that brought on the middle class. Such is not the case, as history has shown. As I’ve explained, it is impossible for a middle class to exist for long when competition among the workers causes accelerating, increased profit margins at the end of the employer and reduced wages on the end of the employee. There is a fundamental mismatch of competition between employers and employees and there is no way around it. To pretend as many seem to want to do that we can live in this system is to think very shortsightedly. With outsourcing, automation, and other labor-saving devices combined with decreased government regulation and regressive taxation, the economy is once again chugging right along in the direction of polarization. It is inevitable by the logic of capitalist theory itself.

That’s not to say that I’m not optimistic. I’m not sold on alternate theories quite yet, as I’ve yet to see one that produces the vast amounts of wealth that capitalism does. All that said, it seems readily apparent that Marxist-socialist critiques and ideas should be fused with the current state of things. One of my favorite economists, Richard D. Wolff, has a book that I like to recommend to people that advocates for a lot of socialist reforms that could coexist with a capitalist structure. His concept of worker-directed enterprises is particularly interesting and I think it should be a major point of reform going forward. Read that or watch some of his videos if you’re at all interested in the idea of a more just economy. It’s inspiring during a time when the news is rarely good for anyone who isn’t in the top one percent.