File spoon-archives/foucault.archive/foucault_1996/96-07-06.052, message 53


Date: Sat, 01 Jun 1996 02:51:20 -0500
From: Nicholas Dronen <ndronen-AT-bpsi.net>
Subject: Re: Savings and Profit


Jeff wrote:
> 
> Nicholas wrote:
> 
> >        Wealth is created legitimately either by saving or by
> >exchanging goods or services for pecuniary gain (read: profit).  Without
> >savings there can be no investment.  *One* of the reasons the economies
> >of the "Dragons of Asia" are growing so rapidly is that those countries
> >on the whole have relatively high national savings rates.

> >        The other means of growth, profit, can only result after an
> >initial investment of funds.  People who own stock in a company put
> >off consumption one day for compensation in the future by the
> >corporation for the use of those funds.

Jeff writes:
 
> Nicholas, you give us some interesting food for thought.  But what do you
> mean by "wealth is created legitmately"?  If you mean through the legal
> transactions designated by society, well okay.

Nicholas writes:

	I mean legally.  Many people on the left end of the modern political
spectrum use language which suggests that violence--however configured--
necessarily preceeds gain.  I contest this and say that violence *can* lead to
gain, but most such cases are illegal and hence illegitimate.  The role of the 
(liberal) state is to institutionalize coherently the process of gain.   
   
Jeff writes:

> Given the right
> things they need for susstenance, people will basically manage it well,
> cultivate it for their progeny, and share with those who run into
> misfortune.  That is the only claim to property that anyone might have.
> Thus, I couold not agree more with Rousseau:
> 
> "It follows from this presentation that, since inequality is practically
> non-existent in the state of nature, it derives its force and growth from
> the development of our faculties and the progress of the human mind and
> eventually becomes stable and legitmate through the establishment of
> property and laws.  Moreover, it follows that nhat moral inequality ,
> authorized by positive right alone, is contrary to natural right whenever
> it is not combined in the same proportion with physical inequality: a
> distinctionn that is sufficient to determine what one should think in
> regard about the sort of inequality that reigns among all civilized people,
> for it is obviously contrary to the law of nature, however it may be
> defined, for a child to command an old man, for an imbecile to lead a wise
> man, and for a handful of people to gorge themselves on superfluties while
> the starving multitude lacks necessities." (Discourse on Inequality, last
> lines) 
> Nicholas continues:
> 
> >        None of this is to deny that capitalism produces (informal)
> >inequalities.  Nor is it to deny that some state actions to adjust those
> >inequalities are beneficial to a society.  However, only those societies
> >will be prosperous that maintain *a* system of private property and profit,
> >whether that system is purely free market (an idealization) or salt-water
> >capitalism (market socialism).
> Jeff writes:       
> 
> What are informal inequalities?  What do you mean by "prosperous"?  Why
> would any society want to be prosperosu except under the sawy of the
> reality principle?  If being propserous requires unjust inequalities-formal
> or not- then should we strive to be prosperous?  In any case, I dny your
> whole claim.  I think that a society can be prosperous, if you mean by this
> maintain a level of standard of living above the bare necessities, without
> the "persuasion" of profit- or what it boils down to, the lies of the
> reality principle.  Socialist and egalitarians do not want minimum
> equality: we desire equality for all at the highest level possible.  The
> motivation  is not based on profit but on fulfillment.  If people have the
> oppurtunity to reach for a certain level of self-fulfillment, by which I do
> not mean some beourgeois notion of being rich but an Aristotelian notion of
> eudaimonia, then they will strive for it.  Society is unjust when based on
> a drive for profit and a market economy both of which are simply
> happenstance aspects of individuals.

> Jeff

	I do not object, as I said, to attempts to apply egalitarian logic to
the realm of resources.  However, I do think that the way to go such a project
is to start with idealized capitalism, as embodied in neo-classical economics,
and work your way *toward* socialism.

	I am unconvinced that humans are strictly rational, untility maximizing
beings.  It is problemmatic, I believe, to attempt to explain cultural phenomenon
solely in terms of market mechanisms.  This alone suggests that economics itself
cannot explain and hence describe the phenomenon of society.  Clearly, then, some 
theoretical mix of capitalism and socialism is required for us even to attempt to
understand social phenomenon.

	The other issue is, of course, how the results of this attempt to understand
works out in public policy.  This is where is gets messy.  Locke's explanation of
private property, if I am not mistaken, is that it represents the right that results 
>from the mixing of human labor with nature.  Private property as we know it today is
an institutionalization of this right.  Governments enforce private property as a
right in order to minimize conflict.  (Cain to Abel: "You bastard, *I* picked that
apple.  You have no right to eat it without asking me."  Or Jews to Romans: "Get the 
hell off my land!  I was here first!")

	A tension exists between the enforcement of property rights with respect to 
objects alone (see: real estate) and the enforcement of property rights at a secondary 
level when human agents are involved.

	Also, informal inequalities are inequalities that arise within a system of 
formal equalities.  The case in point here is the market, where all have the legal right 
to participate within a formal system of (content-free) rules but not all will benefit 
equally.

	This response is incomplete, but it is late and I am moving tomorrow 
(this!) morning.  I will follow up as soon as I can.

	Nicholas


   

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