The Gig Economy is What Yesterday’s Socialists Said They Wanted; Why do Today’s Socialists Hate it?

A February Harris poll finds that 49.6% of Millennial and Generation Z Americans would “prefer living in a socialist country.”

US Senator Bernie Sanders (I-VT) and US Representative Alexandria Ocasio-Cortez (D-NY), among other politicians, proclaim a message of “democratic socialism,” evoking an ideology last ascendant in the early 1900s when Eugene Debs and Norman Thomas moved the needle in US elections.

But the devil is, as always, in the details. The goals of today’s American “democratic socialism,” as laid out in Ocasio-Cortez’s Green New Deal resolution, in Sanders’s “Stop BEZOS Act,” etc. look a lot more like Franklin Delano Roosevelt’s effort to “save capitalism” through welfare statism than like the proposals of socialism’s last rise to prominence.

The essence of socialism as laid out by Proudhon and Marx and promoted by the International Workers of the World, et al., came down to destroying the wage system and building a classless society based on worker ownership of the means of production.

Those earlier socialists would almost certainly have lauded gig economy workers as examples of what socialism sought. Today’s socialists disdain them.

Consider gig economy drivers, once just called “gypsy cabbies.” In recent years many of them have chosen to affiliate with services like Uber and Lyft to get easier connections to people seeking rides.

Gig economy drivers own the means of production (their cars).

Gig economy drivers set their own hours and choose their own workplaces instead of slaving away on  someone else’s terms.

Gig economy drivers can use customer discovery services like Uber/Lyft, or they can go their own ways (many Uber drivers give me their cards, telling me to call them directly next time and cut out the capitalist middleman).

But today’s “democratic socialists” fought tooth and nail to preserve the capitalist “medallion cab” monopoly, and having lost that fight they’ve re-oriented their struggle toward roping the drivers, and the companies they choose to work with, into the old-style capitalist “wage employee” system.

Even the most virulent revolutionary Marxism posited that the state would wither away as workers seized the means of production, got rid of the bosses, and started working for themselves. That didn’t work out — the socialist parties ended up substituting themselves for the old ruling class, operating in the name of, but not as true proxies for, “the workers” — but that was the goal.

In the US, the same kind of substitutism came about “democratically” and incrementally as “progressives” co-opted pieces of socialist-sounding reforms. But just like the Marxist-Leninist parties in the old Soviet orbit, today’s “democratic socialists” are … well, conservative.

They don’t want the wage system to go away. They just want to run it.

They don’t want the workers to own the means of production. They just want to tax and regulate it.

They don’t want a classless society. They just want to be the new ruling class.

US president Donald Trump is already touting the 2020 presidential election as a referendum on “socialism.” Are any real socialists going to show up for that fight?

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Words Poorly Used #140 — Corporatism

In its worst misuse, “corporatism” is given as a synonym for capitalism.  Corporatism is made of fictions, while capitalism is a natural economic occurrence.  Corporatism is the case where statism is used to control purely natural market activities.  When well-meaning people complain about the excesses of capitalism, they are usually resenting the dodging of responsibility, legislatively by the state-licensed corporation or illegally by the marauder.

In free markets, where individual actors make economic choices, interchange will be optimized — both parties will approach satisfaction with the transaction because that was their intent on entering the engagement.  One or both parties may be dissatisfied, to some degree, with some outcomes.  This is a critical point.  The partners in the transaction may realize that dissatisfaction is part of the risk of free exchange, or a partner may feel that she needs help from some authority, some corporate protection from the state.  The alternative may be that an aggrieved party will violate laws to seek adjustment.  When this type of crime is organized we have another form of corporatism — Might makes right.

The capitalist, however, underwrites risk.  She understands that her best interests are served by the risk management that is typical of her field of endeavor.  The finest example of risk management is in maintaining cordial, voluntary exchange.

— Kilgore Forelle

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Will Elizabeth Warren Take on the Biggest Monopoly of All?

For a “progressive” presidential candidate, US Senator Elizabeth Warren (D-MA) is remarkably, well, conservative. Her proposals are neither new nor of the “democratic socialist” variety.  In fact, her aim is, as Matthew Yglesias puts it at Vox, “to save capitalism”  with stock proposals from the first half of the last century.

Much of her campaign platform co-opts Franklin Delano Roosevelt’s  1930s “New Deal” emphasis on social welfare, job creation, infrastructure, and highly progressive taxation to pay for it all — solutions she considers proven, for problems she considers similar.

Her latest proposal, though, takes an earlier Roosevelt as its model. Like  “Trust Buster”  Teddy Roosevelt, she wants to use regulation and antitrust enforcement to “break up monopolies and promote competitive markets.” Her initially announced targets for the idea included Facebook, Google, and Amazon. A couple of days later, she added Apple to  the list.

Interestingly, in her search for monopolies to slay, she ignores the biggest, most powerful, and most lucrative monopoly in America: The US government.

In 2020, the federal government expects revenues of about $3.4 trillion.

That’s more than 60 times what Facebook brought in last year. 25 times as much as Alphabet’s 2018 revenues (Alphabet is Google’s parent company). More than 14 times Amazon’s total 2018 take. Nearly 13 times Apple’s haul.

And then there’s market share. No one really has to do business with Facebook, Google, Amazon, or Apple. There are numerous alternatives to the offerings of each, and many consumers choose those alternatives.

Uncle Sugar, on the other hand, boasts 100% market share for his offerings. You’re required to be his paying customer whether you like it or not. Many of the alternatives are outright illegal, and among the ones that aren’t, you’re required to pay for them in addition to, not instead of,  the federal government’s services.

That’s the very definition of “monopoly.” And it’s the monopoly Elizabeth Warren wants to serve as CEO of.

Is Senator Warren is serious about “breaking up monopolies” and “promoting competitive markets?”

If so, I look forward to her proposal for breaking up the federal government and allowing real alternatives to compete for its market share.

A good start would be 100% federal tax deductibility for the purchase of private sector services that replace the government’s offerings, or a pro rata clawback for binding agreement to not use a particular government service.

Absent such a proposal, seems to me she’s just another greedy monopolist looking to suppress the competition.

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Patrick Newman: The Progressive Era and the Rise of Crony Capitalism (45m)

This episode features a lecture by economics professor Patrick Newman from 2018 on the United States’ Progressive Era and the rise of political entrepreneurship, or crony capitalism.

Listen To This Episode (1h7m, mp3, 64kbps)

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Why Capitalism is Preferable to Socialism (22m) – Episode 278

Episode 278 has Skyler giving his commentary on the following topics: the difference between capitalism and socialism as economic systems; a short blog post by Mark Perry at FEE.org which features 6 quotes on why capitalism is preferable to socialism; and more.

Listen to Episode 278 (22m, mp3, 64kbps)

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Reflections from my Panama Cruise, I

I just returned from my Panama Canal cruise.  Reflections:

1. As I’ve mentioned before, cruises are in one sense a great test case for open borders.  Workers from all over the world come together to run one some of the world’s most sophisticated technology and please some of the world’s most demanding customers.  Most of the workers’ lives are harsh by First World standards but great by Third World standards.  And wherever they’re from, the staff work together like Prussian officers.  It’s a marvel of multinational management.

2. As I’ve also mentioned, though, the entire cruise industry also depends on immigration restrictions.  Cruising is affordable because labor costs are very low by First World standards.  Under open borders, these well-trained, highly motivated maritime workers would take advantage of the far better job opportunities available on dry land, drastically raising the price of cruising.

3. If you’ve ever wondered if capitalism is turning human beings into machines, taking a cruise will feed your fears.  The cabin stewards, for example, spend 10-12 hours a day making every room on their watch spotless.  Then they disappear into the lightness belly of the ship, re-emerging the next day to begin their duties again.  An occasional shore leave aside, they work seven days a week.

4. If you’ve ever wondered if cosmopolitanism can really function, taking a cruise will feed your hope.  Filipinos, Mexicans, Ukrainians, Romanians, Jamaicans, Chinese, Brazilians, and dozens of other nationalities don’t just “get along.”  They show more team spirit than any American workforce I’ve seen.

5. Modern American politics vanish on a cruise ship.  There’s zero social justice rhetoric or attitude to be found; passengers and crew all take severe inequality for granted.  You might think that’s because the customers are demographically Republican, but there’s also zero nativist rhetoric or attitude to be found.  Elderly American Republican guests interact amicably with foreigners of every description.  There’s no sign that they’re “making an effort” to overcome their xenophobia; they just apolitically accept the cosmopolitan world that surrounds them.  The cruise culture runs on good manners and shared humanity, not identity politics.  And yes, you really can turn the identity volume dial close to zero – which is where it belongs.

6. What does the crew think about global development in general, or immigration restrictions in particular?  I didn’t want to make them uncomfortable, so I didn’t ask… but their actions speak louder than words.  I’d guess that 90% of the workers originate from the Third World.  The fact that they’ve left their home countries behind to serve spoiled First Worlders is a deafening vote of no confidence in their societies of birth.  And when I see the this massive ship running like clockwork, it’s easy to see the wisdom of their decision.  Business isn’t perfect, but it far more deserving of their admiration and loyalty than the demagogic governments they’ve left behind.

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