Re: Jefferson a socialist? Hogwash.

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Date: Sun Nov 19 2000 - 08:42:59 PST

In a message dated 11/19/00 8:26:42 AM Eastern Standard Time, writes:

<< large industrial corporations didn't exist--the only large
 companies wer trading companies, a la the Dutch East India Company, for
 example. Industry was nascent at best, at least in North America. >>

re economies of trading, by your classmate james fallows: "Today's
Anglo-American world view rests on the shoulders of three men. One is Isasc
Newton, the father of modern science. One is Jean-Jacques Rousseau, the
father of liberal political theory. (If we want to keep this purely
Anglo-American, John Locke can serve in his place.) And one is Adam Smith,
the father of laissez-faire economics. .....

".... A society is supposed to understand the laws of nature as Newton
outlined them. It is supposed to recognize the paramount dignity of the
individual, thanks to Rousseau, Locke, and their followers. And it is
supposed to recognize that the most prosperous future for the greatest numer
of people comes from the free workings of the market. ....

".... Outside the United States and Britain the matter looks quite different.
 About science there is no dispute. "Western" physics is the physics of the
world. About politics there is more debate: with the rise of Asian economies
soeme Asian political leaders, notably Kim Kuan Yew, of Singapore, and
several cautious figures in Japan, ahve in effect been saying that Rousseau's
political philosophy in not necessarily the world's philosophy. Society may
work best, Lee and others have said, if they pay less attention to the
individual and more to the welfare of the group.

But the difference is greatest when it comes to economics. In the
non-Anglophone world Adam Smith is merely one of several theorists who had
important ideas about organizing economies. In most of East Asia and
continental Europe the study is less theoretical than in England and America
(which is why English-speakers monopolize Nobel Prizes) and more geared
toward solving business problems."


per fallows, the anglo-americans' world purview is that fuedal and royal
domination (nod to cindy), followed by the neo-mercantilism, radical
unionism, sweeping protectionism, socialism, and, of course, communism were
impediments, mostly all given way now to the widsom of adam smith.

the german economic vision differs from the anglo-american in many ways, but
the crucial differences are these:
".... because life is so fluid, attempts at central planning are virtually
doomed to fail. The best way to "plan," therefore, is to leae the adaptation
to the people who have their own money at stake. These are the millions of
entrepreneurs who make up any country's economy. ... By the logic of the
Anglo-American system, if each individual does what is best for him or her,
the result will be what is best for the nation as a whole.

"... the German school was more concerned with "market failures." In the
language of modern economics these are the cases in which normal market
forces produce a clearly undesirable result." with polution as the standard
illustration, the market will squeeze out those companies who use expensive
pollution controls and reward those who do not. list and his american
counterpart, alexander hamilton, argued that "inudstrial development entailed
a more sweeping sort of market failure. Societies did not move from farming
to small crafts to major industries just because millins of small merchants
were making decisions for themselves. If every person put his money where
the return was greatest, the money might not automatically go where it would
do the nation the most good. .... List drew heavily on the history of his
times - in which the British government deliberately encouraged British
manufacturing and the fledgling American government deliberately discouraged
foreign competitors."

from The Natural System of Political Economy, written in five weeks in 1837
by list: "The cosmopolitan theorists (smith and his ilk) do not question the
importance of industrial expansion. They assume, however, that this can be
achieved by adopting the policy of free trade and by leaving indivuals to
pursue their wn private interests. They believe that in such circumstances a
country will automatically secure the development of of those branches of
manufacture which are best suited to its own particular situation. They
consider that government action to stimulate the establishment of inustries
does more harm than good. ....

"The lessons of history justify our opposition to the assertion that states
reach economic maturity most rapidly fi left to their own devices. A study of
the origin of various branches of manufacture reveals that industrial growth
may often have been due to chance. It may be chance that leads certain
individuals to a particular to foster the expansion of of an industry that
was once small and insignificant. ... But the growth of of industries is a
process that may take hundreds of years to complete and one should not
ascribe to sheer chance what a nation has achieved through its laws and
institutions." (break to cheney during the vp debates when he shot back at
lieberman, who had congratulated him on his prosperity during he clinton
administration: "no thanks to the government.") list then credits ed III with
the manufacture of woolen cloth and liz with the mercantile marine and
foreign trade.

"Every responsible goverment should strive to remove those obstacles that
hinder the progress of civilisation ...." etc, etc.

CONSUMER VERSUS PRODUCERS: Anglo American philosophy: the ultimate
measure of a society is its level of consumtion. Competition is good,
because it kills off producers whose prices are too high. Killing them off
is good, because more-eficient suppliers will give the consumer a better
deal. Foreign tradeis very good, because it means the most efficient
suppliers in the world will be able to compete.

list would argue that this logic leads to false conclusions. In the long
run, a society's well being and its overall wealth are determined not by the
society can BUY but by what it can MAKE. list was not concerned here with
the morality of consumption. in strategic terms nations ended up being
dependent or independent according to their ability to make things for
themselves. or who controls advanced activities. long argument follows on
how empahsizing consumption would ultimately be self-defeating. fingers

PROCESS VERSUS RESULT: in economics and politics, for the Anglo-American
it's how you play the game -if the rules are fair the best candidate will
win. "Make sure everyone can vote; make sure everyone can bring new products
to the market."

germans are more paternalistic. "expressing the asian variant of the german
view, sociologist ronald dore wrote of the japanese that they believe "you
cannot get a decent, moral society, not even an efficient society, simply out
of the mechanisms of the market powered by the motivational fuel of
self-interest." i think we are seeing with this election (and with the
healthcare problem) smithian economics mentality spilling over into politics.
 realistically and evidently, you cannot cannot cannot separate economics
from politics.

INDIVIDUALS VS THE NATION anglo-american view focuses on how individuals
fare as consumers and on how the world fares as a trading system, not about
intermediate levels betwen one specific individual and all six billion, that
is, about communities and nations. though smith was a national defense
enthusiast, during his time national defense of the "act of navigation" was,
per fallows, "blatanly protectionist legislation designed to restrict the
shipment of goods going to and from England mostly to English ships."

the german view is more concerned with the welfare of people in communities
and nations, believing that individuals' welfare depended at least to some
degree on how their neighbors fared. pay explicit attention to the welfare of
the nation. list would argue that paying 10 percent more for a product
manufactured by his neighbor than by one manufactured overseas would be worse
for the consumer the short run, but in the long run, and in the broadest
definitions of well-being, he might be better off. also, contrast salaries
of top professionals in america with those of other countries.
(extrapolate, fingers too tired).

BUSINESS AS PEACE VERSUS BUSINESS AS WAR. anglo-american - everyone can win
at the same time, or positive sum. germans are zero-sum. economic power
often leads to political power. "Since the Second World War, American
politicians have often said that their trading goal is a "level playing
field" for competition around the world. This very image implies a
horizontal relationship among nations, in which they all good naturedly joust
as more or less equal rivals."

"These horizontal metaphors are fundamentally misleading," the American
writer John Judis has written in the magazine In These Times "instead of
being grouped horizontally on a flat field, nations have always been
organized vertically in a hierarchical division of labor." the dutch stood
atop briefly in the 17th century, then the british and since wwII the u.s.
has dominated.

list's argument: trade is not just a game. nations gain and lose
independence and control if they fall behind in trade. therefore nations
must think about it strategically, not just as a matter of where they can buy
the cheapest shirt this week.

my laundry is done, my fingers are tired. tip of the iceberg though this
post is, it should draw friendly fire - from yangkun, at least. :-)

most of this was transcribed from a december 1993 (!) atlantic monthly cover
article by james fallows, How the World Works. it was written at a time when
the japanese were gaining market and world dominence, and i think written
partly as a cautionary tale. i don't do it justice by exerpting. many many
pages follow on the messy realities. however, i shall include fallows'
closing paragraph here: "Today's Americans and Britons may not like this new
system, (rigging markets, i.e. getting people to save more of their
paychecks, banks to lend more money for long-term economic expansion, than
normal market forces will allow) which makes their economic life more
challenging and confusing than it otherwise would be. They are not obliged
to immitate its structure (asian adaptation of listian economics), which in
many cases fits the social circumstances of East Asia better than those of
the modern Untied States or Britain. But the English-speaking world should
stop ignoring the existence of this system - and stop pretending it doesn't

IT being, as i can best discern, our "liberal" form of government, or what
rush limbaugh glibly labels socialism in disguise. i see limbaugh's
influence even here, in fork, arguably a stronghold of reasoning and
thoughtful analysis. not to mention advanced degrees. :-) (i really
dislike that guy.)


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