Thursday, March 25, 2010

The Noble, The Capitalist, and the Socialist. A Case of the Economic Theories.

I wish to talk today about economics. I can’t claim to be a master of economics, but I do consider myself a decent student of history and philosophical arts, in addition to knowledge of the arcane. It is with these skills that I will use to look at the evolution of “economics” in a very basic sense.

Economics are based on Value or Capital. Now, Capital has changed in its nature over the ages, depending on the philosophy of the people living in that time, or perhaps more appropriately, the philosophy of the elites in charge. Now, the vast majority of people writing about this would work from the past and move forwards, detailing why these changes occurred. While I will touch on this, I will be comparing the nature of these three movements, rather than creating a detailed evolution. That is for a different argument for another time. Rather I shall focus on the pros and cons of these movements.

Let us look first at the nature of capital in the three movements.

For the Noble, capital is based on hard, physical objects: land, precious metals, precious stones, art, homes, etc. This value was based on the rarity of an item. There is only X amount of land that can be used for life. There is only Y amount of gold/silver/etc. and the rarer it is the more it is valued. The aesthetic value, based on how beautiful something is gives it value. Also, the utility of a substance can give it value, such as steel in the pre-industrial age, when most weapons and armor were hand crafted by skilled workers.

For the Capitalist, capital is based on money, namely in at this time on paper money that represents a set value, independent of the value of materials that paper is made of. It costs as much to print a one dollar bill as a one hundred dollar bill, but one is valued more based on an agreed upon, psychological construct. Money itself is all but worthless, but it is easier to carry around than a bag of gold coins. Initially, paper money was tied to precious metals and one could exchange it back for gold, though this has changed.

For the Socialist, capital (though they may hate the word/concept) is based on work. More specifically, the time and effort a worker gives on a project. In theory, everyone’s work ultimately is counted as equally important, and thus each base amount of work is of the same value. (At least, this is my understanding of it.) Hence, all workers are equal and should be paid an equal amount or living wage.

Having established the nature of capital, I wish to give the philosophical reasoning behind these three movements, as I see them. I know many will most likely not agree with them, but I humbly ask for consideration of these theories. Also, I will be working on a “Pure System” of how these work. By that I mean a theoretical thought experiment based on each system being regulated only by its nature, outside of local social contexts.

The Noble Economic System, or NES, works on a Pagan/Heathen philosophys, which typically are hierarchical in nature. Each individual, at least in western Heathen religions, had an inherent value, but believed that not everyone was equal. Some people, regardless of gender or race, were better than others due to either being stronger, smarter, or more healthy/beautiful. This can be seen best in the ancient Scandinavian/Germanic pagan ways, though it translates through most of them to various degrees. These people, by dent of their greater talents, became elevated above others into what would become later the Nobility, hence the use of that name for the NES. Additionally, as Pagan/Heathen religions tend to either value the physical world to either a greater or equal degree as any metaphysical world or Hinterwelt, physical objects were deemed very important and the rarer an object the more it was valued. Those individuals who were lifted above the average person gained greater access to the valued materials, as people trusted them to use said materials for the betterment of the community and deemed them strong enough or smart enough to protect and use them wisely. From this arose a system by which bartering over the value of things came into being, as each person valued things differently, but close enough to find common ground. Thus X number of cows was worth Y number of gold coins, or Z number of sheep.

Capitalist Economic System or CES, on the other hand, is slightly more complicated. It acts as its own philosophy, but it is also a transitional one which leads to socialism. The biggest reason for this is the birth of Christianity and its rise to power. Christianity focuses more on metaphysical realms, or realm, namely that of Heaven. It is a religion based not on the land and elements, but on ideas and feelings. While Christianity dominated the west from roughly 1000 CE, give or take, it was a religion that worked from the top down and the transition was not smooth. Remnants of Pagan/Heathen culture and traditions lasted and influenced the non-elite heavily for several more centuries. With the Enlightenment and a desire to turn away from the ancient Western ways, and its spread through all levels of society, the face of Western Economics also changed. Here we see the rise of Capitalism, though it had existed alongside the NES since Roman times, commerce was still based on hard exchanges of gold or materials and more closely resembled the NES, because the Nobles were in power. This practice or hard currency would continue on till the Revolution Age, starting with America. What happened in the Enlightenment was the true rise to power of the Middle Class. The Middle Class rose from the non-Noble peoples, and thus were not tied as closely with the land as the Nobles, in bother physical and spiritual terms. Where Capitalism truly took off was when the creation of paper money came about. Suddenly, one didn’t have to carry around heavy objects in order to trade them, one could carry paper/cloth slips that were agreed upon to have set values that could theoretically be traded for physical objects. The debate that raged over the use of paper money over physical currency in America and elsewhere represents the ideologies of the NES and CES seeking to triumph over each other. Ultimately, CES won for reason I will talk about in a minute, as we all know, but vestiges of the NES can be seen in our modern coinage system that goes with the Paper system. Still, CES forms a bridge or fusion of the Pagan NES and the true end result of Christian economic theory which is the Socialist Economic System.
Socialist Economic System, SES, is born out of the true end result of what Christianity is about, on several levels. Modern Science plays a major role in this, but as it is born out of Christianity’s desire for Ultimate Truth, which ultimately leads to the current conclusion that there is no God or Gods. However, Christian philosophy has become such a part of civilization in the West at this point that the denial of god doesn’t remove the ideas put forth by that God. One of the central principals is that Everyone Is Equal. No one is better than another, we are all the same in God’s eyes and only God is superior. People grew used to relying on a supreme being and once God was Dead, Governments took over that place (but that is a different discussion). Another remnant, and this is closely tied to both Christianity and CES, is the idea of non-physical value assignment. In the SES, this translates as Work, or the Worker’s Work.

Now, work has always had value, and this is important to keep in mind, but it has had value based on different things. Under the NES, work produced physical objects, like grain or metals which had value and the corresponding value of another physical object. In other words, work was valued based on the product’s value, not the worker’s. War, being the most dangerous and glorious as it protected or gained physical objects, was valued highest and hence the nobles being of greatest value (when they did their jobs right). Under the CES, this was changed to the value assigned to an object in money rather than another object, especially in the time of paper money. Industry also contributed to the ultimate change, because now objects could be produced faster and by unskilled workers and in larger quantities. Combined with the nature of paper money, this meant a worker was paid for his work with a substance he could later trade for an object, but which held only an agreed upon value rather than an inherent value. Now work, which had once had a physical value only held a theoretical value. Also, objects now held theoretical value as opposed to a physical value.

Added to this is the ultimate nature of Christianity, which is embraces, a bottom up social order in which everyone is equal in value. It is the meek, weak, and poor who are valued over the proud, strong, and rich. About the time of the Industrial revolution, these ideas had finally been absorbed by society itself on all levels. This is when we first see the rise of Socialist Economic Systems or SES, as a theory and slowly being put into practice up to today. The SES is at its heart the perfect Christian (based) Economic Theory.

With the SES, as stated before, the thing that is valued is the Worker’s Work, or just the Worker as a person in that it values what they can be used for, or more appropriately as a group. Now, as the Worker is the most valuable thing in the system, as opposed to a physical object or currency, it is the worker which is the basis for the value of everything around it, just as objects were under the NES and currency was under the CES. Since everyone is equal, and thus no one is worth more than another, then any and all things that have a value must be based off that equality. What this leads to is the concept that everyone should have the same amount of valued items, be they objects or currency. This also leads to no one can be greater than anyone else, if all are to be equal as they should be. This translates in theory to the concept that if Adam has a gold ring, Adolf should also have a gold ring, as should Shakira, Heather, Chun Li, or any one else, and that all rings ultimately would be the same lest one ring be better than another. This is all well and good; it would work in a perfect world that is either theory or the hinterwelt of Christian thought/ideology. But, it will instantly hit a road block of massive proportions.

This is where we come to the pros and cons of each system, which are very often the same things at the same time.

With the NES, value is based on physical objects and what a person is/does, as is right under a Pagan/Heathen system which values the physical world. The Pro is that one can hold a physical object in their hands and know it is real and that its value can be agreed upon based on how limited the supply is. The Con is that there is a limited number of each object, some objects will always be worth more than others, and not everyone can have an object, so those with the greatest talents come to obtain them.

With CES, value is based on currency that is traded for objects. In the early stages it slightly resembles the NES when currency was based on objects, but as paper money was taken off the Gold Standard, it was its own value based upon agreements between people. The pros of Capitalism is that there can, in theory, be an unlimited amount of money (which isn’t true) and that everyone has an equal chance of becoming rich or poor based on their work, skills, and luck. The Cons are that money is not physical and if people don’t always agree on the value of money, that it is mostly theoretical, and that currency isn’t infinite, (despite the beliefs of some Governments and they’re populaces).

With the SES, value is based on Equal Workers regardless of what they are/do, as is right under a Christian system which values the non-physical world. The pros of this are theoretically that everyone being equal, everyone would have an equal amount of benefits, objects, and money wouldn’t be needed (as it “Divides People”) since everyone would work and receive equally, no matter what work they do. The Con of this, however, is the same thing that gave rise to the original NES: that there are a finite amount of objects in the world. There is not enough of each object for every person to have one. Probably the best example of this is fertile land to grow food on. What this will ultimately lead to is two things, the denial of certain to everyone (since zero is the ultimate even number), or a reduction in population to the size were everyone can have an equal amount of an object. The problem of the second option is that it leads to extinction or degradation of the species, not to mention it would be very difficult to get everyone on earth to agree to that option. Then the only viable option is the first result, the denial of objects to people because not everyone can have them. A perfect example of this can be seen in the USSR, especially before its fall. An early stage of this process can be seen in the new Healthcare Bill in America, where everyone will be forced to by a carbon copy policy that offers the exact same protections at the exact same price to everyone, regardless of their needs. Also, as we are still working mostly under a CES, the currency has to come from somewhere, as people don’t yet agree with everyone’s Work being Equal or as the primary value of society. And to further the idea that All are Equal as it is in an SES, one is forced to go along with the actions dictated by the bill or pay a fine, thus generating capital for said bill’s use of SES based economics. Details of this can be seen in the link below:

In conclusion, which economic system is best? That is almost impossible to say, for an Economic System has a value set by an agreement of peoples and is determined by that which it and those that follow is value most. The Governments of the Modern Era in Asia, Europe, and the Americas seem to value the SES most. The people who live in America seem to value the SES as much as they do the CES, which seems to be true in most “Modern” countries at this point as far as civilians go, based on people working Capitalist jobs and paying (fairly) Socialist taxes.

Individually, they break down like this:

SES leads to the greatest level of equality for all peoples, in its purest form. This is due to the fact that individual skills aren’t what are important, but rather what the person can do for “society.” While many, myself included, would argue that this is the equality of everyone having either nothing or next to nothing, it still remains the most equal.

CES leads to a more equal society, and possibly to the greatest levels of wealth in those societies. However, I will admit that it does tend to drain people of their lives as they work for theoretical gains in a consumerist system.

NES leads to an unequal society, with a potentially wide gap in wealth (though this is not really an issue in small groups, but rather larger groups). It does, however tend to lead to a greater valuing of both the physical world and of the people in it, based on their talents. I will admit it is what many would consider a “cruel system,” where the weak serve the strong, but it is one that lasted for thousands of years before Christianity.

I shall end with real world examples of each system at its best and let you decide personally which was best. For the NES there are the Greeks, Romans, and Norse. For the CES, there is the British Empire and America (pre-WWI). For the SES there are the USSR, China (present day government), and America (Obama administration.)

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