07/15 OT: Capitalism and Economics

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No Known Restrictions: African American Convicts Working with Axes by Alan Lomax, 1934 (LOC)

Alan Lomax picture of a Chain Gang

If you don't think that picture is capitalism then you haven't thought it through.
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This is getting to be a habit. Once again I am basing a column on a comment I made in somebody else's post. In this case it was Magiamma's open thread on July 9, 2020 and the included reference and link to a pair of essays by Cassiodorus. Thanks, both of you.

We live in interesting times. We have a global pandemic. We have a dysfunctional economic system, propped up by a dysfunctional and non-representative oligarchic political system. We have some brazenly corrupt politicians and governmental agencies. We have an entrenched propaganda and narrative control system. We have a climate emergency which is only getting worse by the day. What next Batman?

It would be nice if we could solve all of the above rapidly and in one fell swoop. Good luck with that. There are two principal avenues of response, wait and see if we get through the current, most pressing emergency and then start fixing, rebuilding or replacing the rest, or just get to work on fixing things now, because it won't be either easy or quick. I prefer the latter which can, should things work out well, morph into the former when the time comes.

When one starts to try to figure a way out, the temptation is to look to a quasi-communal, cooperative social venture, some sort of fully self-sufficient commune type of thing, but the "fully self-sufficient is a bear". Just think about medicine. Meet all of the community's health needs? Appendicitis, heart attacks, auto-wrecks, the full range of dental and psychological, etc? Pandemics? Plus all of the food, housing, and clothing type stuff? There is some merit to the idea of communities that cooperatively provide for many of their own needs, somehow interlinked to solve, again cooperatively, stuff that is easier to achieve with a larger scale. That is looking both backward and forward at the same time, and there are workable elements in such an approach.

Mean time, I'd like to toss out an idea for further consideration with a hat tip to Cassiodorus' first column on The failure of political imagination. OK, we all can see, if only by its horrible failings, that "Capitalism" is not the answer, it is not some wonderful "be all and end al"l system and we need to replace or at least supplant it, and quickly. So, the question is, with what. Consider that "Capitalism" is now taken to encompass many things, and much of that is peripheral to its true core. Markets and market mechanisms are not per se capitalism or capitalist. They predate the concept, and are a mechanism for the distribution of goods and services that could exist independently of capitalism. This is important for any reasonable future system.

At its core, capitalism is the theory that capital is the source, driver and necessary element of all economic productivity, such that all profits, surplus and gains must be attributed to and therefore paid over to capital, embodied by those holding or controlling it. Ponder that. Capital creates the ability to generate surplus, and ergo all surplus is due to capital and hence is "owed" to those providing said capital. Firstly, that is a crock of shit on many levels, but I'll summarily state that "capital" is theft (actually, the accumulated product of theft). Capital can only exist as the cumulative expropriation of the commons in excess of the survival needs of the person doing the taking, which violates the rights of all other individuals to those commons and the use thereof. It is really theft of a disproportionate share of the commons conjoined to rent seeking for the misappropriated excess. Beyond that, consider yon shovel. It creates zip shit and, in no way ever can. Only manipulation, and proper, intententional and intelligent manipulation will result in anything useful except by pure accident. Why should the proceeds of the farmers labor be partly attributed and owed to said shovel, let alone paid over, year after year after year to its inventor, manufacturer, original purchaser and each successive purchaser? That's simply preposterous.

So, specialization and economies of scale, for lack of a better shorthand, require markets or market-like exchanges to facilitate distribution. This is a separate thing from "capitalism", which is rewarding the idle for the excess over their needs that they have accumulated in the form of rents upon that excess. Markets, especially regulated markets, can exist separate from capitalism, at least in theory.

The real problem is growth and the idea of constant and infinite growth, which can easily become an outcome of markets and which is a guaranteed outcome of capitalism. The solution is to devise a system, or bring about an ethos, where it is recognized that the resources exist for all to have an adequate standard of living, that well regulated markets can achieve this, but only if what one might deem "opulence" is constrained. Profits need to be allowed to the extent needed for those without an adequate standard of living to be able to attain one, but excessive profits, above and beyond that need to be somehow plugged back into the system. The fact that we have evolved into a society that is quasi dependent upon markets does not mean that we cannot eliminate capitalism, nor that we cannot rein in excessive "growth". Consider - we have the ability to produce goods and services sufficient to provide a decent lifestyle for the entire world populace with far less than 100% employment of said populace. Similarly, everybody in the US can have a decent life and lifestyle with only partial employment. Some things probably must go by the board in order for that to happen. Jealousy for starts. Growth for its own sake. "Opulence".(nobody should have a Ferrarri until everybody has at least a bicycle and the mobility impaired have motorized vehicles in those cases where needed). How much can we/should we/do we abandon industrial agriculture in the process? What is the best work sharing paradigm, and what about the arts or, for that matter, any endeavor that requires special skills or talents? All these matters need to be sorted out and the least intrusive and restrictive means to achieve them needs to be determined. We need creative solutions, and they need to be Today's Solutions.

About "Economics"

Here's the issue. As we evolved intellectually, various persons set about, unknowing, to invent "economics" and such. They looked far back to see and understand what the relationships and interactions were in these earlier societies and to formulate and analyze models thereof and to draw conclusions and precepts therefrom. Just Stop! Stop, Stop, Stop. We were none of us there and cannot fully know nor understand all the details, nuance, rituals, and the general weltanschauung and behaviors that obtained in those times. More importantly, even if we did, it would be fallacious to derive rules and precepts for all time from those times. Anything we derive from such an analysis pertains to and holds true, if at all, for those times, and those times only. The world, life, life forms ,and cultures evolve and nobody is bound to attempt to faithfully replicate paradigms proposed to adhere in some "state of nature", We do not live there any more and should not wish to. Does anybody outside of government really wish to live in a world consisting of the “war of every man against every man”? . Would even they desire a life that is “poor, nasty, brutish and short”? Come on, get off it. What prevailed in Adam's time has no bearing here and now, neither before nor after the fall. The rote repetition of ancient rituals for their own sake belongs to the sphere of religion, not commerce, nor, quite frankly, civilization. We need a paradigm or set of paradigms for today and not one that merely rewards the first thieves (quite by coincidence I'm sure, even though they no doubt authored it).

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It's an open thread, so have at it. The floor is yours
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Lookout's picture

The real problem is growth and the idea of constant and infinite growth,

Like Rick Wolff, I think worker coops offer a partial solution. I also like the idea of a maximum income as well as a minimum income. I also think the first nation peoples had a better system...local tribes living in harmony with the environment. We needed to look in the mirror before calling anyone a savage.

You ask...

How much can we/should we/do we abandon industrial agriculture in the process?

My thought is most. Imagine herds of animals grazing prairies where grains are currently grown. It was discussed in the last 20 min or so of this excellent documentary which I've cued up. The agriculture focus is only about 10 or 15 min.
[video:https://www.youtube.com/watch?v=6duhSjYyj0k&t=66m]
The whole documentary is worth your time IMO. It is an excellent expose' of how we can eat our way to good health (another topic in your excellent essay).

I'm finally getting gravel for my road today. I'm hoping this will be the last time I've got to do that. It ain't cheap, and I hate the thought of blasting the other side of the mountain and hauling it to my side.

So have a good day, everyone!

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11 users have voted.

“Until justice rolls down like water and righteousness like a mighty stream.”

enhydra lutris's picture

@Lookout

been there and don't envy you one bit. Worker coops could well be a possible solution, Barcelona has some famous history on that. , and there have been some successes here too. Maybe they can be insinuated more thoroughly into the mix if there is a recovery.

be well and have a good one.

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7 users have voted.

That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

The burning question is - how do you use it? The nonsense of Capitalism is that capital is owned by elite individuals and that they make the decisions for their own good and therefore society is better off because of the inherent productivity of privately financed enterprise. This is obviously wrong and is based on the desire to rationalize the accumulation of wealth and power. If you don't start with a set of goals and design a system to achieve these goals then you will never achieve an optimum solution for society. After WWII and FDR's New Deal we had a highly modified capitalist system that included a very progressive tax system (I think it was 90% + at the highest bracket) and a system of social entitlements. This produced a large middle class but still a very poor lower class, and skirted the issue of social justice. Reagan fixed this, as the wealthy class will always perceive that any attempt to implement social justice is theft from them. We see this magnified today in the call for reduced capital gains tax and a holiday from the payroll tax, a back door way to reduce entitlements.
I think that The New Deal was bound to fail because it was a patch on a lousy system, capitalism, and the rich, licking their wounds, would eventually seek reversal.
The question really comes down to - what are you goals in an economic system and what is the public perception of fair economic rules? Right now the public buys into the perception that American Capitalism is a fair system, since anyone can become an oligarch. Of course this is nonsense, and completely gets in the way of designing an economic system that provides the best outcome for all of the people. When we get to the point that most people perceive that the accumulation of extreme wealth is a crime against society, then we have succeeded. Capitalism relies on the perception that we are incapable of defining a set of goals for an economic system and designing an economic system to achieve these goals. This is of course both utter nonsense and completely defeatist as to the intelligence and accumulated knowledge of our society.

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11 users have voted.

Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.

enhydra lutris's picture

@The Wizard

start on remodeling the whole socio-cultural framework of things.

Capital is a social asset

Somehow that idea, and the idea that private ownership of capital is expropriation and should be restricted or guided in its usages and application could be a building block to a replacement ideology.

Another important point:

When we get to the point that most people perceive that the accumulation of extreme wealth is a crime against society, then we have succeeded.

be well and have a good one.

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6 users have voted.

That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

Hmph! My set of Buddhist Flash Cards have rec'd all desire in me to shit post. LOL right on, but let me attempt to participate in other ways.

Like, I worked in a Mondragon based worker-owned bread factory for two years in the late '80s, it is still called Alvarado Street Bakery. AMA, Ask Me Anything. When I joined the co-op there was still a written and verbal history of the Red Clover Workers Brigade (Berkeley, IIRC) which became Semper Virens, Inc., the capitalist pig dba for ASB. When I left after two years I had already built $8000 in "patronage" to the collective, one dollar per hour at the time, and cashed out the entire whole amount upon severance, per by-laws that "we" created an voted to implement. Pretty good deal, I thought.

Mondragon is a capitalist corporation, made up of worker co-operatives. Not commies, IMO.

I left a management position and took a pay cut, old job title was Process Manager, no kidding EL ha ha! Different kinda processes, went from raising and killing fishes for food, to packaging loaves of commie bread and pioneering the organic food movement (raises fist, slowly turns thumb down) Back then it felt like we were building something good. Back then we loaned money to Amy's Kitchen and today they have pioneered another oxymoron called "drive-thru health food" or something like that (kelso buuuurn). LOL ~shrug~ Yin and yang baby!
---
This gorgeous bug was downstairs in little eden yesterday, my dead tree book says they like aphids. right on
vividdancer.jpg
Vivid Dancer Argia Vivida

It gave me this tiny ear worm, still drilling Smile
Elton John Tiny Dancer
[video:https://www.youtube.com/watch?v=UroApoVbKn0 width:420]

Lay me down in sheets of linen
You had a busy day today

peace and love

Edit: a typo, just one. heh
Edit2: yes, like Jimmy Dore I am not a math surgeon with the patronage dollars, that is vague memory talking. And while I'm at it, the latest epiphany inside my head says there are many different "thinkers" and "doers" in life, and boy howdy have I "done" stuff. I have done or am doing, all the things the journalists and academics and what is left of the blogosphere talk about in headlines every day, so let me say thanks for that. Thank you, more please? omg make it stop LOL

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enhydra lutris's picture

@eyo

and the output seems wonderful too:

Blessed aphids bring Vivid Dancers

I recall your history with co-ops, to the extent previously narrated here. I think consumer co-ops are more common in this country than worker co-ops, and wish both ideas would spread more widely. Flawed, of course, but better than remotely owned ventures driven by the sole goal to maximize profits and return on investment and run on the basis of cost-benefit analysis of everything.

Mondragon is justifiably but insufficiently famous; I should have mentioned it.
Gotta love Process Manager and the fact that a company even thought to have one.

Thanks for both tiny dancers.

be well and have a good one.

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8 users have voted.

That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

economics is just the religious text of capitalism. In this religion, morals and national boundaries are irrelevant to gaining power and profit. Every aspect of life is an opportunity to exploit. Sometimes to fill a need, sometimes to hold hostage, but always to devise means to make it easier to gain power and profit. If we do not have enough "capital" we are essentially here to be exploited. Our government is just an aid to do this. It mostly exists to protect corporations, commerce, banking and the stock market. Put your savings in a bank, earn .5% interest. Borrowing? well, that's a different story. The banks money is oh so much more valuable.

What we lowlies mostly operate on is "barterism" and instead of economics we have book keeping. Money is just something that makes day to day transactions easier.

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enhydra lutris's picture

@Snode

academics, you are right that

economics is just the religious text of capitalism.

As a discipline it is now a pseudo-science. It was once an attempt to understand that part of the whole socio-political milieu that involved the production and distribution of what we now call goods and services. Sadly, that attempt foundered on the shoals of the "search for first principles" type of process that was dominant in the waybackwhen. It produced various ideologies and theories, but no real answers.

Capitalism is one religion, and most religions are, like it, attempts to justify and codify the exaltation and justification of the control of power and wealth by the powerful and wealthy.

be well and have a good one.

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10 users have voted.

That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

Cassiodorus's picture

@enhydra lutris as argued in Kees van der Pijl's Survey of Global Political Economy (see Chapter 2 specifically), and thus its logic operates entirely within its models. Therefore it has no predictive power.

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"The war on Gaza, backed by the West, is a demonstration that the West is willing to cross all lines. That it will discard any nuance of humanity. That it is willing to commit genocide" -- Moon of Alabama

enhydra lutris's picture

@Cassiodorus

differ at some point from reality, then reality is declared to be wrong.

be well and have a good one.

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

Azazello's picture

There is no "capitalist system", there is no "socialist system".
We are not going to "get ourselves back to the garden".
We are not going to live like Native Americans.
There is some good news: Fertility rate: 'Jaw-dropping' global crash in children being born

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We wanted decent healthcare, a living wage and free college.
The Democrats gave us Biden and war instead.

enhydra lutris's picture

@Azazello

I'm in full agreement. I saw the headline you note and immediately thought of the last verse of Dylan's Masters of War Late last month we had occasion to visit some bay-side open space to picnic on a bench and look at nature. We noted there the presence of young parents with stroller bound kids and couldn't help but wonder if those,clearly non-affluent parents had given any consideration to the world those kids were likely to grow up in. It would appear that, on a global basis, perhaps many have.

Thanks for reading.

be well and have a good one

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

mimi's picture

Than Great Depression:
[video:https://youtu.be/14zbZvXogoM]
late addition I think fits in here. The worst is still to come like the worst was coming after the 1929 depression. Wolff makes comparisons that hit the nail on the head. I found him very convinding.

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@mimi thanks, I think you're right. I had a little blowout yesterday at the hardware store when the third person asked me "did you try the bike shop?" to get parts for the sort of broken bike that Mister Martin kindly returned. Parts are parts, but $6 nuts! wtf? Never mind, I ordered online after giving up on local low carbon search and purchase. Ye Olde Bike Shoppe has closed again gosh darnit. This used to be a "world class destination" for cyclists, I'd see what amounted to three times my annual income drive by on the roof of a car occasionally (LOL), not lately.

The "bike shop" is three blocks from my front door and has been closed for weeks now. So is the movie theater and the comic book store next to it, and the gift shop across the street. And the pubs just had to close indoor drinking again, but the public sidewalk is okay. Old people are dying in nursing homes, so Newsom closed all the bars and restaurants,"That's the system." Broken.

I walked around the downtown Plaza with my mask on and it was full of young guys with nothing to do and nowhere to live, except on the other side of the bridge, outside city limits. The Cop Shop is right there by city hall, and so is the Post Office and Chamber of Commerce, totally visible for anyone who cares to see. Our dear local leaders are doing more, there are now permanent homeless camps in Santa Rosa, not temporary. Most vulnerable are going in to hotels to prop up that industry, insurance companies are involved somehow. This shit is bananas.

Being part of any collective or co-op is a lot of work and takes political skill, things I find more difficult to achieve now, personally. I have more to blather on about unions during the 30s, and California labor history, specifically the Mooney Billings frame-up in 1917, but there are three shiny new ladybugs calling me down to the dirt patch right now. Aphid eaters unite. right on

peace and love

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mimi's picture

@eyo
much better, but I had my internal blow-out too today. The town I am in has had lots of small shops. Now only those stores, who are owned for generations by one family are still open, they are expensive, but they are family owned busienesses since two or three generation and the buildings they are located in, were always their own property.

All the rest, who have to pay rent for their stores, are closed due to the lockout and resulting lack of income. But of course we have a Woolworth these days, as if anyone needed them over here. And somewhere there is a Staples. I was there, it has a miserable selection of items compared to what I was used to from US Staples stores. I don't wast my gasoline to drive there again.

So you go and want to do an errand, like I wanted to buy certain light bulbs, which you can buy in only one specific store. I arrived, store sign saying, they are open only after 2:3o pm. hmm, how to kill time without spending money? So I decided to pass by the doctor's office to see if they had the results of what they were testing already. Nah, no, we will not have results before two weeke, we get a new computer system, are closed for the next 8 days. And the doctors are on vacation anyway. So I decided to pass by the other doctor's office to ask if they have the test results already. Nah, no, closed for the next two days. So, I decided to go to the office of my health insurer. Oops. all dark, nowhere to go, come back during official office hours, which are officially now reduced to just a couple I can't go. Bingo.

So, I parked my (newly owned used car, which I still can't operate properly, too much Schnick Schnack, all stuff I don't need and which confuses me).

I looked for a parking space. Before the corona crisis, all the little machines, who spit out a timed parking tickets to put on your dashbord, never worked. Everyone knew they didn't work and I think they didn't work on pupose, because the city didn't need the money, didn't want to maintain them and wanted to help the population to pay less for parking.

Now, since corona lockdowns, all those little parking tickets machines work perfectly well. And dare you to not get one. The city needs the money for its parking space seeking elderies. Shite. Parking life was so much more enjoyable before that darn corona thingy.

So, I spend my time going to the next bakery shop to sit and eat and wait for the shop to open. oops, the bakery shop works only for three hours now a day. Bye, come again.

Basically, everybody works just how he pleases to. But few are pleased. So, I stop blabbering. This little town is full of filthy rich assholes driving their Mercedes, BMW and what not to fight with the bikers about who has the power of the streets. These are fiercely aggressive drivers and so dnagerous that you ask yourself why they need to drive with their cars for distances less than 1000 yards. The bikers win, which makes driving a car here the last thing any sane person would want to do. I am blabbering now, sorry. Such a fucking day today, I live among fucking crazy people in fucking crazy times and want to fucking leave this place of wealth and arrogance and greed and aggressivity.

So, did I make myself clear of how I feel?

I thought so too.

Thanks for blabbering and letting me blabber back. Keep on going on.

Oh, love and peace too, but those are luxury items, only the very rich seem to to be able to afford them - but then what is not upside down these dayx.

Peace and a little love with that.

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mimi's picture

@mimi
just saying, in case you wondered about my blabblerings. The good thing is that I forget my past blabbers, the bad thing is the internets remember them. Can you believe how dumb the internets are? Wink

Good Morning.

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snoopydawg's picture

@eyo

Park City Utah is an upscale town here known for skiing and the Sundance arts festival and lots of very rich people and their houses. It was the first city and county hit by COVID and closed down. Yesterday I saw that most shops were open as well as the eateries. I didn’t see one person not wearing a mask. Contrast that to what you’re seeing in your city. And then multiply it by cities across this 3rd world one. This could have been handled like PC was and instead of states closing down again.....

This was done deliberately. The elderly were left to live or die on their own or with help from Cuomo and other states governors who didn’t do everything in their power to stop it in its track Add in congress dereliction of Duty to look after us citizens and we’re seeing done to us what we have been doing to countless countries since we decided that we should be number uno. I bet the rest of the world is laughing its asses off at what we’re going through. And shaking their heads in disbelief at how we are accepting it. Or fighting each other.

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

enhydra lutris's picture

@mimi

on a long slow downward spiral since Bill Clinton got elected, periodically propped up by various artificial means. I see no realistic reasons to expect things to improve. The rest of the world might get by better than we will, we shall see.

be well and have a good one.

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

Cassiodorus's picture

Here was the question:

OK, we all can see, if only by its horrible failings, that "Capitalism" is not the answer, it is not some wonderful "be all and end al"l system and we need to replace or at least supplant it, and quickly. So, the question is, with what. Consider that "Capitalism" is now taken to encompass many things, and much of that is peripheral to its true core. Markets and market mechanisms are not per se capitalism or capitalist. They predate the concept, and are a mechanism for the distribution of goods and services that could exist independently of capitalism.

Under capitalism, markets are used to realize added value. Value is added, as Marx pointed out, through the exploitation of labor.

Capitalism is defined as a system ruled by capital. And capital is a relationship to labor, it's money designed to make more money through the exploitation of labor. It's M-C-M' as discussed in Chapter 4 of Volume 1 of Capital.

Now, money is a representation. It's not a material thing, though Western civilization clung to the "material thing" illusion for quite some time with the aid of another abstraction: the gold standard. In this abstraction, money is real because it can be exchanged for gold, which is indeed a material thing.

(Just as a footnote: the US told the world it would be incapable of meeting its obligations under the gold standard in 1968 -- Richard Nixon made that departure official in 1971. Soon thereafter "dollar hegemony" was made the official doctrine, in which faith in dollars was to replace faith in gold.)

But, really, money was even a representation when there was a gold standard. Marx's name for what it is that money represents was "value" -- money is a representation of value. Value, conversely, represents that which money can buy. Value can represent anything which money can buy.

Money, under capitalism, is also (as Marx said) the "alienated ability of mankind." And so, under capitalism, anything you do can be "value" if someone can buy it.

And so here's where it starts to sound bad. Under capitalism, for the whole of our adult lives we are controlled by value. If we are capitalists we use our capital to generate more and more value. If we are workers we must pursue value for the whole of our working lives, in order to "make a living."

The key to any alternative to capitalism, then, following Marx's logic, is that people must control value and not vice versa. Thus these concepts -- a co-operative of co-operatives, a society run in (to quote Paresh Chattopadhyay) the "associated mode of production," a society based on sharing. Obviously such concepts are mere outlines, and the whole idea needs a lot of fleshing out. But that's where we stand.

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"The war on Gaza, backed by the West, is a demonstration that the West is willing to cross all lines. That it will discard any nuance of humanity. That it is willing to commit genocide" -- Moon of Alabama

enhydra lutris's picture

@Cassiodorus

probl;ematic features of capitalism, to me, is the use of markets to add value, rather than to simply facilitate the exchange of goods and services

be well and have a good one.

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

magiamma's picture

@Cassiodorus @Cassiodorus
All the existing organizations, each to solve a piece of the puzzle.

And then fill in the blanks. That’s what I am thinking.

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magiamma's picture

Late to the party again. Great essay.

So true. Well said. So sad.

We have a dysfunctional economic system, propped up by a dysfunctional and non-representative oligarchic political system. We have some brazenly corrupt politicians and governmental agencies. We have an entrenched propaganda and narrative control system.

It’s a tsunami and it’s coming.

Mimi: great video.

Eyo: images of hordes of young men on the streets reminds me of lower Burnside in Portland in the early sixties. Yes hordes of “bums”. Gotta organize like the Bezerkley bakery. God I loved that place and their bread.

Az: Excellent news. I worry for those children’s future.

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