The Samovar


Authority and Competence

The view that the people in charge know what they’re doing is implicitly prevalent. Although many people would say that the people in charge were incompetent, in fact there seems to be a widespread implicit assumption that they either do know what they’re doing or that someone else would know what they’re doing better. Underlying this is the assumption that it’s possible to know what you’re doing. In politics and economics, none of these are true – there is very little understanding of what is happening, what the effects of various actions will be, or what we should do. Understanding this is important, because at the moment there is a lack of critical thinking in politics. Although there is much criticism, of course, it usually fails to get at the root causes of problems and so the mass of critical feeling fails to achieve anything, and is wasted in irrelevancies.

As an example of this, the debate that was had a few years ago about extending the period that the police can hold people without charging them beyond 28 days in terrorism cases. Assumptions of competence pervaded this debate in many ways. For some, it was enough to note that the politicians thought that an extension was necessary to protect us. For others, that wasn’t enough, but the fact that the police thought that an extension was necessary for them to be able to protect us was enough. This was also the basis for a substantial amount of the debate in parliament. It was assumed that the fact that the police said they needed the extra time counted for something. Not everyone agreed that just because the police thought they needed it meant that they should get it, but it was universally agreed that their opinion counted purely on the basis that it was their opinion. Their perceived authority and presumed competence gave their opinion weight in and of itself.

However, very few people questioned why the police had come to their opinion, and what the evidence for it was. It turns out that one of the major claims was that in previous terrorist cases they had used more and more time, up to 26 days I think it was. The argument was that since they had used this much, it was probably the case that if the limit had been higher they could have profitably used more, and that future cases were likely to need even more. They were already at the limit, and this was holding them back.

This argument is terribly weak in many, many ways, but came under hardly any criticism at all (indeed, very few people even knew that this was the argument). But there’s no reason why it had to be like this – the weaknesses of this argument, and the counter-arguments against it, are not so complicated that most people wouldn’t be able to understand them. Rather, it was that the whole process of questioning the argument was made unnecessary by the fact that most people were willing to go along with the opinions of those in positions of authority based on their presumed competence. A more critically engaged society would be better able to protect itself against manipulation by those in power. We have all the necessary democratic mechanisms, but they count for nothing if we hand over our critical thinking to those in positions of authority (and that includes journalists).

In order to achieve a more critically engaged society, we need to understand competence better – where does it come from? What sort of things are we able to be competent about? How can we recognise it? We also need to dispel myths and misunderstandings about competence, which are widespread.

If we describe competence as being about having knowledge, then we can split it down into an explicit and tacit component. Explicit knowledge is something you can write down and tell others about, things like 2+2=4, the capital of France is Paris, etc. Tacit knowledge is everything that can’t be put into words, but that is still valuable. I can’t put into words what it is I’m doing when I solve a mathematical problem, but there’s definitely something I know that most other people don’t that makes me able to do them and them not. Tacit knowledge is built up from experience, thousands of particular cases, attempted and failed solutions of problems, etc.

The existence of tacit knowledge is very significant and certainly shouldn’t be underestimated. Indeed, this is a good argument that sometimes we do need to rely on the authoritative judgments of others (experts). But we shouldn’t make the mistake of just presuming that people do indeed have tacit knowledge about their area of work. First of all, you don’t get tacit knowledge about something just by doing it often, and secondly it is often easy to think that tacit knowledge is more general than it really is.

In the example of the debate above, the police may well have sincerely believed that they had the requisite experience and knowledge to make their judgment that they needed the extension to protect us from terrorism. But they didn’t. For a start, they haven’t dealt with nearly enough cases to get tacit knowledge that is worth much. Since the end of the IRA bombing campaigns, which were rather different to modern terrorism, there has only been one successful terrorist incident and a handful of failures. The police have had no great successes or failures in these matters – they have caught some people, but these have largely been fantasists who had no real ability to do the things they wanted to do. The fact that terrorism has been as little a problem as it has been is a consequence of the fact that there have been very few competent attempts at it, few individuals involved, and little will to carry it through. All the police know, then, is what they’ve done in the past, and what happened in consequence. Even on that basis alone, there’s very little to go on as chance and circumstance probably have as much to do with that as anything else. But further than that, there’s no basis for them to be able to know what would happen if they had got the extension they were looking for. They have no model, explicit or tacit, of the world that would allow them to make such a prediction, and no experience to go on. Almost certainly, what they actually had was the conviction that it couldn’t make it worse, and that it would make their lives easier.

It is vital, if we take someone’s judgment as an expert or authority, that we analyse what basis they might have for making the claims that they do, whether or not they could be in possession of explicit or tacit knowledge that would justify it, and where that knowledge could have come from. This is far from being a complete recipe for dealing with issues of authority, expertise and tacit knowledge, but even a better recognition of the importance of these issues would be a big step forwards.

One thing that needs to be addressed if we’re to achieve a more realistic understanding of these sorts of issues is cultural representations of expertise and competence – the myths that are portrayed in books, films, TV shows, newspapers and everyday discourse that support them. Films and TV shows typically portray hyper-competent individuals bursting with impeccable tacit knowledge. The reason for this on the one hand is obvious – a story about heroic, talented individuals is more interesting. Sometimes it’s obvious that people in these things act beyond human abilities, such as the hacker who can break into any computer system in the world in only 5 minutes. But other times the portrayal is more subtle and insidious, such as in The West Wing, a notionally realistic show about the US presidential staff in the White House. The technical competence of the heroes is constantly portrayed as a virtue in and of itself, and the show suggests implicitly that they have the right to rule by virtue alone of their greater ability to do so. Very few TV shows portray anything like reality in this regard, with the most notable exception being The Wire, one of the best things ever to be shown on TV, proving that it certainly is possible to do it (and be reasonably popular).

On a final note, these considerations apply very much to areas of life outside politics and economics. For example, some people might be shocked about the standards of evidence that count in science. But that’s another story.

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Change in comments policy
September 3, 2009, 10:17 pm
Filed under: Uncategorized

I’ve made a minor change to my comments policy for this blog in the light of the growing number of spam comments making it past the spam filters which I have to delete by hand.

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Fairness and equality

There has been a lot of discussion of a new report by the Joseph Rowntree Foundation on attitudes towards tackling economic inequality (at Directionless Bones, Left Luggage, Sunder Katwala on CiF, Don Paskini at Liberal Conspiracy, and David Osler). Quoting Alderson at Directionless Bones, one of the key findings of the report is:

People didn’t seem to endorse the idea of ‘equality’ as a general principle as much as they endorsed ‘fairness’.

This is a point that several of the posts linked to above considered, and there has been a feeling that the left needs to find a new way to promote their view of the world to people (which traditionally is based on equality).

I find this interesting because for the last few years I’ve been coming to the view that the case for a left-wing politics should be based rather on the principles of fairness and freedom than on equality. Equality is important and essential, but I think it’s a consequence of fairness and freedom. I’ve argued this in much more detail in an earlier entry on capitalism. Essentially, a very unequal society will, in practice, also be necessarily an unfair one.

The report has caused quite a lot of distress because it showed that people are not against what they term ‘fair inequality’ – but I don’t think the left should be dispairing over this. The report also clearly showed that people think there are substantial levels of unfair inequality, and that this is a bad thing. This suggests to me that most people basically get and agree with the final point of the previous paragraph – high levels of inequality lead to an unfair society.

I suggest then that what the left needs to do is to push this analysis further and address the misconceptions that the JRF report showed that people have. Most people substantially underestimate the level of inequality that actually exists and overestimate the level of social mobility. Changing perceptions of these is difficult, but could make a significant difference.

As a final point, the report appears to be more of a blow to a state-centric form of socialism where equality is considered more important than fairness and freedom, and much less of a blow to an anarchist form of socialism which takes freedom and fairness to be fundamental. This is important and suggests the left should be considering a change of direction towards anarchist conceptions – and thankfully much of the left does, slowly, seem to be doing this (even if they don’t call it anarchism). In particular, the point about support for ‘fair inequality’ is very interesting with respect to the remuneration mechanism of parecon (which I written a few things about on this blog). Parecon allows for a certain amount of precisely ‘fair inequality’ – that is, inequality that comes from a choice to work harder or at more onerous labour. It is fair because anyone can make that choice (whereas not everyone can choose to be a doctor, banker, etc.). On the other hand, it absolutely rejects unfair inequality. As such, it seems that many people’s fundamental views of what society should be like resonate more with a pareconish or anarchist conception than a state-centric socialist one.



Good article on capitalism and the crisis
April 3, 2009, 12:21 pm
Filed under: Capitalism, Economics, Politics | Tags:

Shame about the title though. I think the words “Yes we can” should probably be banned. Anyway, here’s Robin Hahnel on “Change how the world works? Yes we can“:

Until capitalism is replaced, we want the tail to stop wagging the dog. Finance should serve the real economy instead of the other way around. If the financial sector improves the efficiency of the real economy, it is helpful. But if it misdirects investment resources to where they are less productive, it reduces production in the real economy by obstructing the flow of credit altogether. Then it is failing to accomplish its only social purpose. Jobs producing useful goods and services, and investments which help us to produce what we need with less human toil and less strain on the environment, are what count. Increases in the profit rates and stock prices of financial corporations count for nothing when they fail to correspond to real increases in productivity, as has too often been the case.

We have offered several positive alternatives to capital liberalization and to the governing structures and policies of the International Monetary Fund (IMF) and the World Bank, such as capital controls and a Tobin tax to protect smaller economies from volatile speculative flows. We have made suggestions on how national governments can restore competent regulation of their traditional financial sectors, and stressed the urgency of extending regulation to cover new financial institutions which were allowed to grow outside existing regulatory structures.

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Fast fractals with Python and numpy

This will be of little interest to people who regularly read my blog, but might be of some interest to people who find their way here by the power of Google.

The standard way to compute fractals like the Mandelbrot set using Python and numpy is to use vectorisation and do the operations on a whole set of points. The problem is that this is slower than it needs to be because you keep doing computations on points that have already escaped. This can be avoided though, and the version below is about 3x faster than the standard way of doing it with numpy.

The trick is to create a new array at each iteration that stores only the points which haven’t yet escaped. The slight complication is that if you do this you need to keep track of the x, y coordinates of each of the points as well as the values of the iterate z. The same trick can be applied to many types of fractals and makes Python and numpy almost as good as C++ for mathematical exploration of fractals.

I’ve included the code below, both with and without explanatory comments. This 400×400 image below using 100 iterations took 1.1s to compute on my 1.8GHz laptop:

mandel

Uncommented version:

def mandel(n, m, itermax, xmin, xmax, ymin, ymax):
    ix, iy = mgrid[0:n, 0:m]
    x = linspace(xmin, xmax, n)[ix]
    y = linspace(ymin, ymax, m)[iy]
    c = x+complex(0,1)*y
    del x, y
    img = zeros(c.shape, dtype=int)
    ix.shape = n*m
    iy.shape = n*m
    c.shape = n*m
    z = copy(c)
    for i in xrange(itermax):
        if not len(z): break
        multiply(z, z, z)
        add(z, c, z)
        rem = abs(z)>2.0
        img[ix[rem], iy[rem]] = i+1
        rem = -rem
        z = z[rem]
        ix, iy = ix[rem], iy[rem]
        c = c[rem]
    return img

Commented version:

from numpy import *

def mandel(n, m, itermax, xmin, xmax, ymin, ymax):
    '''
    Fast mandelbrot computation using numpy.

    (n, m) are the output image dimensions
    itermax is the maximum number of iterations to do
    xmin, xmax, ymin, ymax specify the region of the
    set to compute.
    '''
    # The point of ix and iy is that they are 2D arrays
    # giving the x-coord and y-coord at each point in
    # the array. The reason for doing this will become
    # clear below...
    ix, iy = mgrid[0:n, 0:m]
    # Now x and y are the x-values and y-values at each
    # point in the array, linspace(start, end, n)
    # is an array of n linearly spaced points between
    # start and end, and we then index this array using
    # numpy fancy indexing. If A is an array and I is
    # an array of indices, then A[I] has the same shape
    # as I and at each place i in I has the value A[i].
    x = linspace(xmin, xmax, n)[ix]
    y = linspace(ymin, ymax, m)[iy]
    # c is the complex number with the given x, y coords
    c = x+complex(0,1)*y
    del x, y # save a bit of memory, we only need z
    # the output image coloured according to the number
    # of iterations it takes to get to the boundary
    # abs(z)>2
    img = zeros(c.shape, dtype=int)
    # Here is where the improvement over the standard
    # algorithm for drawing fractals in numpy comes in.
    # We flatten all the arrays ix, iy and c. This
    # flattening doesn't use any more memory because
    # we are just changing the shape of the array, the
    # data in memory stays the same. It also affects
    # each array in the same way, so that index i in
    # array c has x, y coords ix[i], iy[i]. The way the
    # algorithm works is that whenever abs(z)>2 we
    # remove the corresponding index from each of the
    # arrays ix, iy and c. Since we do the same thing
    # to each array, the correspondence between c and
    # the x, y coords stored in ix and iy is kept.
    ix.shape = n*m
    iy.shape = n*m
    c.shape = n*m
    # we iterate z->z^2+c with z starting at 0, but the
    # first iteration makes z=c so we just start there.
    # We need to copy c because otherwise the operation
    # z->z^2 will send c->c^2.
    z = copy(c)
    for i in xrange(itermax):
        if not len(z): break # all points have escaped
        # equivalent to z = z*z+c but quicker and uses
        # less memory
        multiply(z, z, z)
        add(z, c, z)
        # these are the points that have escaped
        rem = abs(z)>2.0
        # colour them with the iteration number, we
        # add one so that points which haven't
        # escaped have 0 as their iteration number,
        # this is why we keep the arrays ix and iy
        # because we need to know which point in img
        # to colour
        img[ix[rem], iy[rem]] = i+1
        # -rem is the array of points which haven't
        # escaped, in numpy -A for a boolean array A
        # is the NOT operation.
        rem = -rem
        # So we select out the points in
        # z, ix, iy and c which are still to be
        # iterated on in the next step
        z = z[rem]
        ix, iy = ix[rem], iy[rem]
        c = c[rem]
    return img

if __name__=='__main__':
    from pylab import *
    import time
    start = time.time()
    I = mandel(400, 400, 100, -2, .5, -1.25, 1.25)
    print 'Time taken:', time.time()-start
    I[I==0] = 101
    img = imshow(I.T, origin='lower left')
    img.write_png('mandel.png', noscale=True)
    show()


Monbiot on prisons
March 14, 2009, 3:04 pm
Filed under: Capitalism, Politics | Tags: ,

George Monbiot has an interesting article linking capitalism and privatisation with growing prison populations:

This revolting trade in human lives creates a permanent incentive to lock people up; not because prison works; not because it makes us safer, but because it makes money. Privatisation appears to have locked this country into mass imprisonment.

It’s not clear to me that this is enough to explain the whole problem, but it’s worth considering.

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The opium of the masses
March 9, 2009, 7:55 pm
Filed under: Politics, Religion

Alderson has an interesting piece on religion over at Directionless Bones:

[Alderson’s view] also implies a certain set of priorities, that changing people’s lives is more important than changing their minds (though obviously not unrelated), and that often religion will persist regardless of rational arguments if the conditions that produce it persist.

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My mathematical genealogy
February 16, 2009, 7:58 pm
Filed under: Academia, Frivolity, Mathematics

The Mathematics Genealogy Project has a huge database of mathematicians, showing who was supervised by whom, and what students everyone had. If you’re a mathematician, you can use this to trace back who your mathematical ancestors were and it can be quite fun. Below is a chart I made of my own mathematical genealogy. It’s nice to see exciting names from the history of mathematics and science there, such as Poisson, Laplace, Lagrange, d’Alembert, Euler, the Bernoullis, Leibniz,  and Huygens (I stopped at that point). The dates are when they finished their doctorate, or if they didn’t do one, when they lived.

mymathematicalgenealogy



Some sense on terrorism
February 11, 2009, 1:46 pm
Filed under: Civil Liberties, Politics, Terrorism

Reg article reporting on Nigel Inkster, former Assistant Chief of MI6:

There are limits to what we can sensibly aspire to…

Efforts to establish a global repository of counterterrorist information are unlikely ever to succeed. We need to be wary of rebuilding our world to deal with just one problem, one which might not be by any means the most serious we face.

We need to keep terrorism in some kind of context, for example, every year in the UK, more people die in road accidents than have been killed by terrorists in all of recorded history.

We should keep our nerve and our faith in our own values. Our own behaviour – especially with respect to the rule of law – is very important.

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Capitalism

Since the earliest entries on this blog, I’ve had in mind to write something about why I’m an anti-capitalist, and in what sense. I’ve written before several times about aspects of my opposition to capitalism (here, here, and here amongst other places, and also about parecon, an alternative to capitalism), but never attempted to do it comprehensively. Incidentally, that word “comprehensively” should be a sort of warning – this entry is long.

Defining capitalism is tricky because it is a very general concept, and means very different things in different places and at different times. So this entry will be necessarily somewhat nebulous, as it attempts to address the concept of capitalism without defining a specific conception of it. So it won’t be a strict argument against capitalism, but rather some ideas which might be useful in thinking about it, and also a guide to criticising me (being as it is, a summary of my own reasons motivating my opposition to capitalism).

In the broadest possible terms, I have two fundamental problems with capitalism: it creates inequality, and it forces us to pursue ends that are other than the ends we would choose of our own free wills. The relevant underlying principles are fairness and freedom. Although I state these two problems separately, they are really quite intertwined.

Fairness

Before I go on it might be worth saying  a few general things about fairness and freedom since they are key to my criticisms of capitalism. If you’re happy with these principles, you might want to skip this section and the next as I ended up going on and on for longer than I intended.

It might be objected that fairness is not important, that in the face of the enormous positive benefits that capitalism has brought the world, the fact that some groups consistently do better out of it than others is of marginal significance. I would agree that fairness as a principle doesn’t have the same level of support as freedom, for example. And I can understand why. Although freedom can be (in my view somewhat crudely) defined simply as the lack of explicit interference in ones affairs, fairness involves a comparison of the lot of one individual with the lot of all the others. On the basis of an individualistic view of the world, how better or worse of others are shouldn’t really effect anything. Supposing there are aliens on another world that are all living incomparably wealthy lives in comparison to ours, we shouldn’t feel hard done by. Similarly, it seems we shouldn’t feel badly done by if our neighbour is doing better than us through no merit of his or her own, the only difference being that we see the neighbour every day but we never see the incomparably wealthy alien.

So I can understand doubts about fairness as a principle, it doesn’t have the same uncomplicated status as the simple notion of freedom as lack of interference, but in my view it is still significant. I might go into why in more depth in another entry, but for the moment I’ll just make a couple of observations. First of all, things do change depending on what we know about. If the aliens landed on Earth and started visibly enjoying their wealth, even if they weren’t harming us by so doing, I think we would be within our rights to want part of that. Of course we couldn’t demand it in any incontestable way, after all we did nothing to deserve it – they developed the technology, found the resources, etc. But then, probably most of those aliens did nothing to deserve it either, most likely they just made small improvements on what their ancestors had done (and not even that in many cases). The application of this line of thought to the purely human situation should be obvious.

This leads me to my second observation, that criticisms that amount to criticisms of fairness as a principle come down to saying that there is no incontestable reason to choose the principle of fairness, it is not a “natural” and unavoidable principle and indeed in a “state of nature” there is very little of it. I would agree, but you could say the same about any principle, they are all matters of choice (see my earlier entry on arationality). It comes down to deciding what sort of world we want to live in, not what sort of world we ought to live in. Ultimately then, I choose to value fairness, and I would hope that others would choose likewise.

Freedom

Next I want to say something about freedom. It is often characterised “negatively”, particularly by right wing thinkers, as freedom from explicit constraints. And there are good reasons to be dubious about the “positive” version of liberty, because it seems to imply duties on someone to provide these liberties, in an unspecified way that can be taken to suggest the necessity of a strong central authority whose duty this would be. The philosophical debate about this is ongoing and complex (see the Stanford Encyclopedia of Philosophy entry on it). I tend more towards the “positive” version, but not straightforwardly.

We live in modern states whose functioning in practice cannot be ignored. Thousands of years ago, when someone who didn’t like the way his society was organised could leave, find some unused land, and set up his own, a purely negative conception of liberty would have made more sense than it does now. Nowadays, we’re not faced with the choice of whether or not to live in the society we find ourselves born into, we must live within the institutions that actually exist, and these inevitably circumscribe our liberty. This is a particular issue when these states have enormously extensive conceptions of property that include property in land as well as property in objects, and even go so far as to extend into property in ideas. Property is enforced by the state, and assuming that this is being done, the state already has power over an enormous part of our liberty. It is worth noting that some right wing thinkers would like the function of the state to be only one of protecting property rights. Despite their being apparently motivated by liberty, they fail to give due consideration to the extent to which liberty is circumscribed by the institution of property.

So although we can talk about simple negative liberties, any choice of institutional arrangement of society also defines, by the way in which it circumscribes our liberty, a positive conception of liberty as well. We can choose not to talk about that bit, but the choice of institutions and the functioning in practice of those institutions makes a choice whether we recognise it or not. Given that, I prefer to be explicit about the positive components of liberty as well as the negative ones. In particular, I want to draw attention to how a capitalist state, through its support of property, provides more positive liberties to some groups rather than others. In a nutshell: in building good roads, a state provides freedom to travel faster and more safely, but only to those who can afford a car and fuel to run it. In providing a police force that enforces property, it stops people from having the fruits of their labour taken away, but this service is enormously more valuable to those who have wealth to be stolen than those living from day to day on what they can earn.

Inequality

My first objection to capitalism was that it creates inequality. The questions are: why? and what of it? I’ll start with the second question first. A society of unequal wealth is first of all unfair. We all rely on the correct functioning of the state for the vast proportion of what we have. I don’t just mean that we’re paid by the state, although many are, but that if the state didn’t exist the circumstances in which we work wouldn’t be able to exist either. We need the rule of law, enforcement of contracts, property, etc. (I don’t say we need all of these in an absolute sense, but that we have them and if we couldn’t rely on them in this particular society we wouldn’t be able to profit from our work in the way we do.) If someone like me, tinkering around with equations in a comfortable situation, can earn hundreds of times what someone doing really demanding and unpleasant work can earn, then something is wrong (for what it’s worth, I don’t earn hundreds of times what anyone else earns, but as someone with a mathematical background I probably could if I chose to, or at least I could have if I had chosen to at the appropriate point in my life).

One criticism of this viewpoint is that capitalism does not make value judgements about the importance of the work that people do, the prices for different sorts of labour are set by the market. Strictly speaking that’s true, and it is indeed a good thing that there isn’t some governing body that decides the value of different types of work, but if the mechanism (the market) produces outcomes that are obviously crazy and in no sense fair then it can be criticised. We don’t need absolute inequality, we don’t have to have a principle that says that all sorts of labour are equally valuable, but we should use our common sense and point out that it is in no sense fair that people doing work that they enjoy in comfortable circumstances should be enjoying wealth that is hundreds of times that of people who are doing unpleasant work in difficult circumstances. Again, this comes down to a matter of choice, but it is emphatically not the case that capitalism represents a lack of choice or a natural choice. The state is making all of this wealth possible, and so if it makes more wealth possible for some and less for others, that too is a choice. We can’t look at inequality and shrug our shoulders and say “that’s the way it goes” – that’s not the way it goes that’s the way we make it go, and we could choose to do otherwise.

There are more reasons to be dubious about inequality than just the unfairness of it. For example, inequalities of wealth tend to produce political inequalities too. In a democratic capitalist society, political parties need funds to operate and they have to get these from somewhere. Wealthy individuals have more to give and so have more power than the poor. This is a problem that could be solved if there were political will to do so, which is not entirely impossible although the current system mitigates against it happening. There is a second mechanism by which economic inequality creates political inequality. When an individual or group of individuals can affect the entire economy by their own private economic decisions, everyone, including the government, must act in such a way as to stop them from making decisions which would hurt the economy generally speaking. In a society in which there were not huge concentrations of wealth, this wouldn’t be so significant (but then, the dynamic of capitalism is to increase inequality so to some extent this seems inevitable). This problem is aggravated by globalisation and hyper-mobility of capital, a point I’ll return to later. The result can be clearly seen today, all successful political parties are largely funded by the wealthy and work largely in the interests of the wealthy, and they cannot do otherwise. The only difference is the extent to which they are in favour of policies which mitigate the worst excesses of capitalism, and this is something which they have increasingly little control over (which again, I’ll return to later).

Now on the first question, which is why does capitalism cause inequality and is this inevitable? My answer is that the basic dynamics of capitalism tend to increase inequality but that these can be mitigated to some extent (by for example, social welfare programmes). First of all, the existence of wealth tends to create inequality in it. If there is any disparity at all, then those who have more are in an advantageous position, all other things being equal, to those who have left. The most obvious application of this is borrowing and lending. The wealthy lend money to the poor (indirectly through the institution of banks), and the poor then have to pay back the money loaned at interest. When an economy is growing, everyone can profit by this in absolute terms, but the wealthy profit by it hugely disproportionately to the poor, so inequality increases (or at least, never decreases). But there are other mechanisms too. For example, the wealthy can afford private education which gives them a competitive advantage even when employers make purely meritocratic decisions. Also, those with (possibly inherited) wealth have more freedom to choose between jobs because they can survive for a period without a job, whereas those who have nothing must take a job immediately, forcing them to take worse jobs where their prospects will not improve. (This is the aspect that can be mitigated by a social welfare programme.)

Those are some specific mechanisms by which capitalism causes inequality, but there is an overriding meta-reason too. Basically, in a competitive system some will get more than others, and all things being equal having more to start with must be an advantage. Assuming the advantage grows with the amount of extra wealth, over time the effects of these advantages must produce even larger disparities, and so on. This could probably be mathematically formalised, I expect someone has done it.

Profit

My second objection to capitalism is that it makes us pursue ends other than the ones we would choose to pursue. To some extent, this is inevitable. If I want to pursue a career in interpretative dance like Marty in The Big Lebowski, then I need to either find enough people who feel this is worth it, or pursue some other career which isn’t the one I would choose. Proponents of capitalism would say that this all there is to it, that although you may not like the collective choices we as a society make through our individual purchasing decisions, they more accurately reflect people’s real wishes than the prejudices of socialists and academics. Although I like the unsentimentality of the argument, and there is probably some truth in the attack on prejudiced ideas about what people really want, I think it rests on the unfounded and inaccurate notions that people can express their wishes through purchasing decisions, and that the mechanisms of capitalism aggregate these individual decisions into collective ones in a satisfactory way.

We clearly cannot express all our wishes through our purchasing decisions. For a start, there are many things that cannot be bought such as clean air, beautiful countryside or parks to walk in, etc. Economists recognise this problem of “externalities” (factors which are external to the market mechanism), but the capitalist way of dealing with the problem is to bring everything into the market and create new forms of (private) property. This is summed up in the classic economists’ treatment of the problem of the tragedy of the commons. But it exacerbates the problems of inequality mentioned above (imagine if clean air was something to be purchased, as in Ben Elton’s play “Gasping”).

More than our individual desires though, we cannot express our desires about the sort of world we want to live in through our economic decisions. We can express them through our political choices (who to vote for), but in politics, economics trumps everything else. The reason for this is that in a capitalist society, all aspects of the economy, and by extension all aspects of life because everything relies on a reasonably functional economy, are redirected towards the production of short-term profit. Capitalist society makes it much more difficult to implement a policy or take an action that favours a long term goal or the improvement of our lives through an “externality” in preference to short term profit.

Suppose a government wanted to increase taxation to spend on doing many things that people desired, such as better parks, health care, education, and so forth. The most logical way to do this would be to increase taxation on the largest concentrations of wealth, the companies and the rich. A government that chose to do this though, would risk a capital flight – the sudden movement of capital out of one country (where there is a perceived economic risk) to another which offers safer or better investment prospects. As the case of the Labour government from 1974-1979 shows, capital flight can be truly devastating to the whole economy (there’s an interesting analysis of this on the Anarchist FAQ). In other words, under capitalism we cannot choose to live in a society that doesn’t give priority to the interests of the largest concentrations of wealth without undermining our whole economy.

This sort of phenomenon is endemic to capitalism at every level – the interests of wealth, and in particular short term profit, are always absolutely prioritised over everything else. In a global capitalist system, different countries compete against each other to provide the most congenial environment for investors. This means that low taxation is forced, and consequently low state expenditure. This in turn means that public goods will be undervalued, and because social welfare programmes are so expensive they would also have to be limited in scope, and therefore inequality gets worse. As capitalism becomes more globalised, and wealth can be transferred even more quickly at lower cost, this effect is getting stronger and stronger, so that previously successful mixed economies are now struggling too, and are being forced to respond to the needs of capital and reduce taxation and spending.

The same mechanism of competition between countries, or even between different cities or regions means that regulation of companies tends to reduce. If one country offers its workers legal rights to compensation if they are injured at work, and another country doesn’t, all things being equal in a global economy the company will set up business in the country with less regulation. This works at every level, and the effect is that regulation of economic activity for reasons that serve human interests must inevitably decrease over time. This is bad for individuals, but it is also potentially unstable because regulation of economic activity can be good for the economy as a whole. For example, monopolies and oligopolies stop free markets from working correctly, but regulation is very weak. This may well be because big businesses who might be in danger of anti-monopolistic actions would move their capital out of a country that proposed stronger anti-monopoly laws.

At a smaller level, the same phenomenon can be seen in individual companies. In order to be successful, they must pursue short term profit over anything else (even their own long term profit). If they don’t, then another company will, and investors will move their money to the other one, destroying the one with a longer term plan before it could come to fruition. Recently this has been demonstrated with the subprime mortgage crisis. Here we had a situation in which all the people involved knew that it couldn’t work in the long term, but that because it was so profitable in the short term they had to keep doing it to keep up with their competitors.

There are certainly situations in which the pursuit of (short term) profit leads to beneficial effects. For example, the refinement of already existing products and technologies which capitalism excels at. However, because of the emphasis on short-term profit to the exclusion of all other things, the “invisible hand” of the market does not work towards the ends that we would choose, andis even self-destructive (perhaps a Marxist analysis could kick off here… another time).

To a certain extent, the same logic even applies to individuals although we are at slightly more liberty to choose our own paths (for example, we can choose to “buy” more leisure time by working at less high profile jobs). Nonetheless, in a world where the pursuit of profit, and more particularly short term profit, is fundamental in all organised economic activity, that must affect the way we see the world. More straightforwardly, if the whole economy is geared towards short term profit, then we are not free to pursue activities that are not also geared towards this. The problem therefore goes beyond that addressed by the hypothetical critic earlier in this section, it is more than just that we must do work that is valued by someone, we must do work that produces short term profit.

You’re almost at the end

I wanted to explain why I think capitalism is a bad idea, and hopefully the reasons above do that. I’ve mostly focused on the present, but perhaps a word or two on the past and on the future. After all this criticism of capitalism, it would seem reasonable to respond that capitalism has done a great deal of good too. As Adam Smith says in the first chapter of Wealth of Nations, capitalism has allowed everyone to live better than kings of the past did (I’m paraphrasing here). I think that’s true. One might question whether or not that could have been achieved more expeditiously, but it’s in the past and the question is whether or not we can do better in the future. The Marxist (and some anarchists) would say that how you should organise society depends very much on the level of wealth. A rich society can in principle choose to organise itself in a much more egalitarian way than a poor one can. As our basic needs are provided for to a greater extent, we can stop worrying about living from moment to moment, and focus our attention on reorganising society to be more like how we wish it would be.

Experiments with Communism in the past largely failed for political reasons (democracy is essential), but also because countries that tried it hadn’t reached the point where basic needs were met, and because central planning was an inefficient mechanism (the planners didn’t understand the effects of their actions well enough, nor what was needed). I believe that the time may have come, or at least will quite soon come, when we will have the necessary means (basic needs satisfied, better understanding of economics, decentralised planning mechanisms such as those of parecon or otherwise) to do better than capitalism.