31 March 2011

from Lawrence, this Sunday meeting, Is capitalism dying?+ News

Dear friends,
This Sunday we are discussing: Is capitalism dying?
An apt subject given the urgency to consume and consume. On the other
hand, we do live in times when capitalism is at its max. Indeed the news
this evening is that it will cost each person living in Ireland some 16
thousand euros to save the banking industry there.
So far we seem to be ok at the O'Connor's and starting at six pm gives
us a good period of time to be alone.
News and essay below,
PS no news about Espacio Pozos.
Hi Lawrence,
with regards to the flat I mentioned on Sunday. The details are as follows:
It is located in Calle Miami on the corner with Calle Alcala.
The flat is 80 M2, has two bathrooms, three bedrooms, a kitchen, dining
area a Sitting room
and a terrace.
Heating is by gas (boiler located in the kitchen). The flat is well
communicated. Suanzes metro stop (line 5- green line) is 3 to 4 minutes
walk from the house. The Number 104 and 77 buses stop in front of the
house. Also the night bus N5 (Búho). There i a taxi rank in Ciudad
Lineal,which is about 5 to 10 minutes walk.
Alcala Norte is in walking distance also. This is a Shopping Mall which
has Cinemas and a supermarket.
The flat is bright and has some nice views of the park (Suanzes).
Anyone interested can call me at 639181866.
Peter has asked me once again to remind you that he is looking for
someone to share his flat with in Mostoles close to public transport;
very good conditions. Central heating and central hot water. English
spoken at home if you wish. Single room still available. : tel 609257259

Here is a link to the job posting on Infojobs:

The company I work for is looking to employ an inside sales person
ASAP.. The person would need to be fluent in English at a minimum, with
other language abilities being a much wanted plus. Good languages to
have are German, French or Spanish. The job would involve working on the
telephone and email, corresponding with our resellers and helping to
process orders. They should have good computer skills (able to type, use
Outlook, Excel and Word) and ideally be smart (brains) and motivated.
The salary range is between 18-35K p.a on a permanent contract. The
salary offered to a candidate depends on their abilities and experience.
If they are intelligent, with various languages and are an eager go
getter then they will be at the 35K end of the scale. Alternatively, if
they are a school leaver, with limited experience and language ability
then the lower end would be where they would be at.
Who we hire will depend on the candidate, with the mix of abilities they
Remember, our company is based in a comfortable office, very close to
the north end of the Retiro park making for a nice central location to
Anyone interested? Please pass this message on to all our friends.
Take care for now.

Ian Cummings
m: +34 686966896 - e: ianrcummings@gmail.com
Yahoo IM: ianrcummings - Skype: ianrcummings

Is capitalism dying?

At least commentators agree on two things about capitalism. The first is
that under capitalism the means of production are in private ownership.
And the second is that goods and services are supplied by the owners of
the means of production for a profit.
But defining capitalism is a much harder task as mentioned in the
Wikipedia article on the subject. The article lists seven main versions
of capitalism and even has a section for "others".
However to ask whether capitalism is dying, assumes two things: the
first is that capitalism exists and the second, there is something
seriously wrong with it. But even the question, "does capitalism
exists?" is philosophically flawed on the grounds that it assumes that
capitalism can exist. So the question we have to address ourselves first
is this: is it possible for capitalism to exist?
The favourite argument in support of capitalism is that it is more
efficient at creating wealth than any other political economic system.
But something might look good because the alternatives are really bad
and not necessarily because it is inherently good. A system that creates
some wealth is much better than a system that destroys wealth. The
problem here is that we really do not know what we are testing when we
say one system is good or bad since distribution systems are based of
subjective and relative value judgements. And, moreover, in reality we
exclude a lot a material facts from our evaluation. For example we don't
give a monetary value to pain and suffering to those who fail to succeed
under a given system.
Usually, today, this efficient creator of wealth argument rides piggy
back on the efficiency of competition. However, competition is not an
indigenous feature of capitalism but of nature. I won't therefore
discuss competition here. However, I would argue that competition in
capitalism exposes a serious philosophical flaw in the doctrine of
capitalism. It seems to me that competition is a very inefficient way of
employing capital since this adds additional costs to the owners of
production. Thus it costs more to generate profits. But as I said I am
not discussing competition.
So is it possible for capitalism to exist? Despite the sophisticated
rhetoric of such political economic systems as capitalism, communism and
socialism they all address the question of wealth distribution. It is
wealth in the form of wages or profits, that enables us to buy goods and
services. Good and services in themselves cost wealth and do not
generate profits; it is when we sell at a profit that they become the
means to wealth.
However, how we should distribute our wealth is a value judgement type
of question. The philosophical question is how can we distribute wealth
(or resources) that will make a positive difference to everyone? Or how
can we distribute scarce resources amongst everybody?
In other words, distribution issues are about exclusion of others ,
whereas, I would argue, the real philosophical test is the inclusion of
everyone. Hence, it is not a question of whether the means of production
are privately owned, but rather can anyone own the means of production.
The basic problem, as I see it, is that, given a state of social
standard of living there is no viable way of redistributing limited
wealth so that everyone enjoys a better life in real terms.
To use an analogy, the issue which nature presents us is not how to
divide the cake, but rather is the cake big enough so that everyone can
have a decent bite? Malthus got it right, it is just that those who
disagree with Malthus conveniently forget the millions who perish
unnoticed in Africa, Central Asia and maybe parts of Latin America, not
to mention the inequities in the rest of the world.
In a way the philosophical problem is not that capitalism is a failure,
and even if you like an unjust system, but rather that nature itself
seems to exclude justice from the system. Indeed justice is not done in
the real world, but we have to be very careful before we give up the
notion of justice. Careful because of those who might unwilling allow a
Trojan horse amongst our economic mist, such as another ism, and careful
for capitalism itself. Nature excludes justice because there is a
disequilibrium between what can be supplied now and those who want a
particular good or service.
Indeed, nature and capitalism present the consumer with a double hurdle.
The first is to accumulate enough money to participate in the market
(capitalism) and the second to acquire enough resources to supply what
the market wants at a profit (nature+capitalism). For example no matter
how much money you have, if your favourite cake maker does not supply to
part of the world because it is not profitable then you are out of the
market. Of course you can always argue that you have enough money to buy
your cake whatever the price. But then you are hardly in a market place.
Capitalism centres on the concept of private ownership. In capitalism
private ownership comes first and profits flow from that. But what
capitalist give little mention to, or maybe just assume it as given, is
that the notion of private ownership gives rise to private property
rights. So how can we speak of rights, especially property rights, if we
do not have a notion of justice.
Something is mine because we have a system that can determine what it is
for something to be mine. Contrary to the common belief, possession is
not two thirds of the law. So without a notion of justice we have two
options: if I take something that belongs to you then it now belongs to
me, or the other option is to prevent others from accessing my property.
But both options disadvantage capitalism enormously.
But the alternative to justice is equally unacceptable since the
alternative is maybe utilitarianism. But this does not solve much since
utilitarianism speaks of maximum number of happiness (happy people) and
not the maximum possible majority to be happy. Indeed today we do seem
to practice some form of utilitarianism because in most societies the
majority of wealth is held by not much more than 10 or 15 percent of the
population (I am being generous). Thus, if 15% of the population are
happy, utilitarianism has functioned according to specifications.
But these arguments are not evidence that capitalism does not exist,
what is real evidence is the way nature is, there will always be more
people who want to be capitalist than nature can support at any given
time. Thus the logical implication of this is that there comes a point
when it is just physically impossible to add another capitalist to the
illustrious roll of capitalists. So no matter how good capitalism is,
there are limits to how good it can be. Nature cannot accommodate
everyone at the same time; we can narrow the gap but never bridge it.
Even if, for the sake of argument, we turn a blind eye to these basic
issues about capitalism and assume that it is a practical doctrine at
least on paper, maybe even as practical as the Titanic looked practical
on paper, what are the chances of capitalism actually existing? Even if
we allow ourselves the luxury of calling a mixed economy a form of
Indeed, what do we understand by such terms as private ownership and
means of production? And from here, what do we mean by profit? It is
unfortunate that such political economic doctrines are couched in the
language of 19th century English. Of course, by private we are supposed
to mean exclude the state.
But what was a state in 19th Century Britain or France, is not what we
mean by state in twenty first century Spain or Germany. In the 19th
Century the state was more likely to mean, in real terms, the monarch
and the ruling classes. Today, the state is more likely to mean (at
least in western countries) an organisation that tries to maintain a
society in efficient harmony. In order words, a state is what stops us
from killing each other and from misappropriating each other's property
(vis: Libya and Iraq). Sure today we also have a ruling class but they
try to hassle the rest of society as little as possible or as delicately
as possible.
The problem with states, even if we accept that governments are the day
to day representatives of states, is that governments are not easily
given to motivation, efficiency and initiative. Maybe qualities which
are more fine tuned in a group of people who have to earn their living,
such as the private sector. Anyway, governments are more about managing
and maintaining order than creating things.
Even ownership is a vague term. Today, there are certain things or
activities which capitalists are incapable of managing at a profit or
will not be allowed to own. For example, exploding nuclear power
stations are not profit centres, and armies are too sensitive to leave
in the hands of a few whose only motive is money despite recent
experiments by the big super power.
The problem with the term "means of production" is that today that
production is more likely to depend on the intellectual prowess of the
labour force than their muscle power. As far as muscle power is
concerned, at least for this part of the century, China has become the
factory floor shop of the world. But even China will sooner or later
have to deal with the issue of the cake not being big enough.
So today the means of production depend even more on the expertise of
the work force, licensing of intellectual property and understanding the
market place. In other words, the means of production might be owned
privately, but not necessarily controlled by the owner or being capable
of being controlled by the owner. Never mind that in a successful
capitalist economy today your real assets, as the saying goes, walk out
of your front door every evening.
This means that if a capitalist is paying wages and not remunerating
skills and achievements the chances are that the means of production
might take a walk. Consider recent events in the baking sector, when
banks paid for greed as opposed for profits they single handily
bankrupted the whole banking sector of the world.
Don't forget that the disaster of the banking sector a few months back
was not that governments had to rescue a bankrupt sector or that banks
still paid huge bonuses, but rather that the banks were not lending to
each other or anyone else. In other words, the means of production were
not producing and owners were not paying wages (salaries) but rewarding
greed and the profits only looked good on paper in the same way that the
Titanic looked good on paper.
An associated notion of capitalism is capital. Indeed, capitalism
depends on property rights and market rights that require a fair
exchange of value for goods and services. The basic principles of
capitalism say nothing about capital. Capitalism assumes that the
private owners have the "cash" to buy the means of production. Of course
in the 19th century capitalism, although capitalism is much older than
that, many profits were the product of actually applying means of
production. However, today, spectacular profits can be achieved by
simply owning mineral and property rights; without even having to own a
single shovel.
The irony, it seems to me, is that capitalism is a doctrine on how to
distribute wealth, but property rights are a system on how to distribute
profits. Not only one does not need to own the means of production to
enjoy profits from property rights, but that property rights reflect the
amount of profits made (or expected) and not the production effort
needed. (Think of the Beatles, Microsoft and Petroleum producing countries.)
If capitalism does exits, then it seems to do so against all rational
logic. And if it is dying it is probably dying from natural causes as
much as self abuse. Unfortunately, like all value judgements, capitalism
is not immune from self abuse. And one of the ways capitalism can self
abuse itself is by neglecting capital in favour of short term profit.
But as I have just argued not all profits belong to those who owe the
means of production, but also to those who owe the property rights. And
to add insult to injury, the state not only taxes the profits and wages,
but also decides the level of the playing field.
So to conclude, if at face value the best case scenario for today's
capitalist is a world that is determined to undermine the wealth created
by the owners of the means of production, what kind of political
economic system do we really have in place?
Take care
from Lawrence, this Sunday meeting, Is capitalism dying?+ News

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