Tag Archives: productive surplus

A Few Words on Capitalism – Part 1


Every one of us is a “capitalist.” This, in the sense that we all strive to obtain as much safety, comfort, material goods and security for old age, as we possibly can for the least amount of effort necessary. It doesn’t matter for whom we vote. Many of us simply want to be free TO acquire what we need; others wish to be free OF the need to acquire. In both philosophies we are attempting to gain with minimum effort.
But that’s not the whole story, is it?

Every person is motivated to act differently. We all have our own “profits” that cause us to expend MORE than minimal effort necessary to take care of ourselves and our family. Some are motivated to gain as much as possible in terms of material goods and “wealth.” Some want to be charitable and will work more than necessary so as to give to others. Some are motivated by artistic expression, drama, music or writing. Some by the gaining of power over others, one way or the other. Many profits.

The invention of money both simplified and complicated capitalism. For some, in twisted ways, the accumulation of money, itself, became their “profit.” Such people are able to “buy” the necessities for which others strive, but they are also consumed by numbers and the quantities of money they represent. They have different fears and joys than “regular” people. Unfortunately, they come to realize that they can also “buy” power – influencing government-types to protect their accumulated wealth.

Government types come from those for whom “profit” means power over others, over “public policy” and over taxation and, unfortunately, over “public” budgeting. Tapping into the “profits” of others, familial, financial and charitable, provides the most ways to acquire at minimal effort for those so motivated. They concentrate in governments. Almost inevitably and partly because much of their effort is arcane, they come to believe in their own mental superiority over “regular” people whose concerns are familial, local and unobtrusive.

Meanwhile, capitalism, which in the U. S., OUGHT TO MEAN the right to own private property, and by extension, the right to own the fruits of one’s labors, carries on, inherent in every person. It is human nature.
Some aspects of human nature can, if unchecked by society and hence by government, cause damage and destruction to that society. Many control-worthy human aspects are checked by “agreement.” That is, members of society “agree” that murder, rape, theft, fraud and other forms of false witness, greed, sloth and envy, are to be controlled through various codified sanctions. Lately the list has grown to include littering of various degrees, like pollution, and, in an extraordinary reversal, discrimination against sexual oddities, a change that has led to “intolerance” becoming a worse social transgression than some actual crimes. Western societies must now “tolerate,” if not celebrate, anti-capitalist “lifestyles” that include essentially welfare careers. These things actually threaten the social order and every other right protected by the Constitution, our fundamental social agreement.

A tremendous strength in American capitalism has been the high integrity of our contracts, both with one another and with our governments. This phenomenon makes modern trade possible as well as the millions of debt contracts that describe modern economics. But today, we ignorantly embrace a new form of socialism based on twisted concepts of “social justice,” which intends, fundamentally, to cause guilt-ridden government types to alter the underlying concepts of private property, and to discard natural human capitalism. This need not be an inevitable slide toward the only economic future possible.

It is a slide the basis of which is ignorance, willful and otherwise. It is a slide that attempts, as all socialist plans inevitably do, to replace human nature with a government-directed one. While there may exist the technical possibility of directing every person’s life and economic decisions, governance based thereon cannot prevail. It devolves into tyranny or revolution, perhaps to a new tyranny or, once in a great, great while, into a new form of governance based on self-discipline and personal sovereignty, one in which the governed grant their governors limited powers, and where the tyranny of the majority is carefully sanctioned and where tyranny of the minority is unheard of.

Inherent in a government based on individual freedom and personal responsibility are the concepts of private property and ownership of the fruits of one’s labor: essential free-enterprise.

Capitalism gets fully mucked up when it is politicized, which is to say when limited governments attempt to create economic “fairness.” It seems that no “free” economic and democratic system can refrain from favoring certain industries in return for maintaining power for those who are already “in” government. Much of the favoring is done to “make things fair” or to “level the playing field,” but almost without exception, the net effects are to limit competition for those industries and to limit competition for those in power. These are tendencies that a wise and educated citizenry would create institutions in society and government to carefully limit, if not make impossible. In our growing ignorance we are failing at this essential part of citizenship.

A great strength of capitalism is that it doesn’t reward failure… it replaces it with something that can succeed, success measured in profitability and ability to destroy debt. In this is a lesson for all with eyes to see and ears to hear. Among our people, however, those who get the message are now considered hateful while those who refuse to see or hear are empowered, or re-elected. Ours is fast becoming a system hobbled by the removal of the pillars of individual freedom and personal responsibility. We are rewarding failure.

Immediately this statement will be attacked with charges of cruelty, but this stems from ignorance, which is to say, it’s a charge leveled by those who, for whatever personal profit, IGNORE the distinction between those who are capable and willfully refusing to take responsibility for themselves, and those who are incapable and needful of charity and public support.

The greatest value of capitalist profitability is the creation of surplus – productive surplus – of which a portion may be used to care for those who cannot care for themselves. The greatest flaw in capitalism’s opponents is their creation of and acceptance of a thousand reasons why individuals may be grouped among those who cannot care for themselves. They unfortunately become codified and form a malevolent inhibitor of success. And here we are.

When Work Is a Spectator Sport

06062011_McD_Robot_2_cropped_articleThe lack of knowledge, especially skilled knowledge, is forcing production managers, from McDonald’s to General Motors, to automate. This isn’t new. Until quite recently there was value added to both products and services by the presence of a competent human. Such beings are becoming rarer. Whether one wishes to blame education – and not just public – or welfare and dissolution of the “family,” America is turning out relatively fewer highly competent, decision-capable graduates than in the first 175 years of our constitutional history. Such a societal change has severe consequences. We can see it reflected in our latest choice of president and other elected leaders. It is an outgrowth of essential socialism: the dissipation of responsibility, specifically, personal responsibility.

So far we have limited our concentrations of incompetent adults to inner cities, and built a sloppy welfare industry to keep them from causing too much trouble. No one running for president in 2016 is talking about how the next 50 years of public policy will significantly change that pattern. The current president, Obama, has been struggling against laws at every level to… well, make it worse. Our nation’s future will be that much more painful.

One approach has been to inject “federal” dollars into college tuitions through ridiculous loan obligations that some pandering politician will forgive someday. The problems, of course, come from wrong attitudes, and those come from wrong governing. We have taught our least responsible residents to hate their masters (who hand out the sustenance). Education is to blame for a lot of this, too, which is to say, government, again.

Now this is translating into demands for higher wages for very low-skilled, entry-level jobs. Those jobs are relatively low-paying because they are tied to selling relatively inexpensive products and services in a marketplace that demands those low costs. As the cost of, say, frying prepared french-fries and filling paper containers with them, increases by 40% or 50% with artificially high wages, the owners of the french-fries, Frialators, electric bills, buildings, uniforms, liability insurances, payroll benefit obligations, training costs, supervisory costs, advertising expenses, franchise fee obligations, parking lots, snow-removal charges and sundry materials, rags, grease trap cleanouts and so much more, will have to find a way to CUT that arbitrary cost increase. Believe it or not, the preparation and dispensing of french-fries was automated – or robotized, if you will – over 44 years ago.

But the integration of all the steps for the early machines to do that relatively simple, repetitive task, was not smooth and didn’t justify the added capital cost for the complex machinery. In part, this was because the designers were trying to mimic humans in the performance of those steps, and modern computerization wasn’t available. New designs, already in test, are not based on human workspace; they are smaller and designed from freezer to fryer to deliver bags of hot, salted fries when needed. The advantages – aside from almost no payroll costs, health insurance or withheld taxes – include better portion control, increased employee safety, reduced waste, fresher net product at point of sale, and reduced noise in the workplace.

And… lower cost-per-portion, enabling the restaurant owner to keep his or her prices lower than those available in traditional eateries. That is the business model, after all.

At one point in the late 1980’s, nearly 10% of all employed workers had once worked at a McDonald’s. There they had learned to keep schedules, serve real customers, show up on time, dress presentably, follow directions and respect managers. Those opportunities are now perceived as oppression. The claimed needs of low-skilled potato fryers threaten to drive costs for such employees sharply upwards with no possible way to increase production of fried potatoes more than a percent or two. Higher-paid workers will not increase demand for fried potatoes; higher resulting prices for fried potatoes will significantly reduce demand for them. This will reduce demand for potato-frying employees and all of their training and re-training and other costs, and hasten the installation of robotic frying systems. Those will be “trained” by the manufacturer through software and never complain about their low-paid jobs.

There will be employees in another place – or country – who will manufacture the robotized fryers. However many of those there are, will make possible the frying production of ten to twenty times as many on-site employees. The low, nearly UN-skilled people, who thought they could make $600 a week resentfully frying potatoes, will remain on welfare. It is not, and has never been the duty of a McDonald’s operator to correct the failings of families, schools and individuals. It is his or her job to earn a profit in the business. “Displaced” potato fryers will have to find a job that can’t be automated.

The example, above, will play out in literally hundreds of occupations in the next 20 to 30 years. This process may be more rapid, but not differ materially from the industrial changes that Luddites fought in the 18th and 19th centuries. Resisting it still draws the opprobrium of “Luddite.” However, in a mostly settled world, carrying 7+ Billion people who depend upon remote sources of critical materials and finished products, there are not the options to “check out” of the labor market and simply provide for oneself. The accelerating robotic upheaval in the means of production will displace a very large fraction of the least-skilled “workers” that we seem to be creating at an equal rate. This cannot go on for long.

Increasingly, a shrinking number of “producers” will own the production upon which we all depend.

Monopolization, always preferred by owners of production, will multiply by default. What will be the political response – indeed, international, GEO-political response?

Will governments appropriate profits to finance growing dependency? Will producers keep being productive if there are no rewards? History teaches ‘no.’ Will governments attempt to nationalize all production? History teaches us that such a reaction is almost instinctual among government-types. The past also shows that general living standards will decline under communism.

How can “we” maintain technological progress and living improvements, high efficiencies that make living costs decline, overall? Will governments force producers to break up their processes to maximize net jobs? Will work weeks decline to 32 hours? Twenty-four?

What will happen to quality if three people must be trained and maintained to accomplish what we consider one “job,” today?

If “products” like clothing, tools, appliances and even houses become much cheaper because of robot production, and fewer and fewer people have high-paying jobs, such that there are fewer people who can afford even those cheaper things, how will “we” make sure that everyone receives the essentials of life?

This looming, virtually unavoidable consequence of robotics, contains the seeds of the greatest political stresses and conflicts a republic might face. Unlike the generational traditions of public assistance for our official underclass, the need to “share” productive surplus with large populations of historically productive families will require better application of political / police force than we have experienced – and rewarded – to date.

Political power has been granted to people of varying honesty, indeed, for a lifetime, who can trick a majority of voters into paying and borrowing enough to pacify the underclass while guiding federal advantage to favored industries and institutions. It has been shamelessly dishonest and the reason we face many, many trillions of dollars in debt. That is, much of our economic “success” and relative luxury has been a hoax – a lie – and about to be stressed beyond reason. One path, likely to be recommended by controlling types, is for “government” to appropriate larger fractions of productive surplus. They always have the answers. The redistribution of those resources – assuming they continue to be produced – will generate fierce, possibly insurgent conflict. The stability of social function and public utilities, could devolve into police power: a police state, in other words. Culture and heritage be damned.

Yours in liberty, Prudence.