Nov
19
I have always been empathetic to the cause of the poor, and had a special liking for charity. A huge influence in this regard comes from within my family and other close quarters. It wasn’t too long before I got enmeshed into the popular trap of associating charity with socialism, and ‘exploitation’ with the free market; goodness with the working class, and evil with the rich. Much of this distorted view of reality could be associated with interpreting economic issues based on what, taking some help from Bastiat, is seen prima facie and missing out on what goes unseen.
It all started sometime in 2006 during my high school days. I had opted for science stream, only to find out that I had made yet another bad choice in my career. My academic graph was plunging quite rapidly, while my affair with political and economic systems, which sprouted when I was in middle school, grew manifold. Meanwhile I persuaded my dad to get me internet at home, and well, I tried out different things online before making it into orkut(the craze then was multifold when everybody had open scrapbooks, zero privacy. Those were great days, duh!). Like few other teenagers, I was a member of the bandwagon of nationalistic fervor and pride, wanting a violent revolution to weed out ‘evil’ capitalists who were, I believed, the reason for all our economic and social problems. Adolf Hitler was so attractive a figure to me, only to be taken over shortly by my romance(which still persists in a somewhat diminished flavor though) for Russia and the “Iron man” Stalin.
During one such endeavors to pick up some fight over orkut, I happened to step into the scrapbook of RFL’s one of the writer. If I’m right, I begun the conversation with him by pasting some old Russian joke(which I don’t remember anymore) deriding Capitalism. Notably he was the first person who took real interest, while others responded to derision with hard words I wanted, in pointing out to the flaws in my thinking process, and my misplaced priorities (Perhaps it’s not really a bad idea, I think now, to take interest in rehabilitating numbskulls on networking sites who are taken over by emotions featuring real world economic problems? After all I was one such…). Our discussions(I like euphemisms) lead us into starting a community on orkut(which now has hundreds of dead members but which still the best place to educate yourself on the subject).
The virtual community was the best thing could have happened to me at that point of time. It served as a graveyard for all my misconceptions about the market. It was a truly nice experience, where I was exposed to the works of Austrian economists, which I nevertheless ignored for more than a year. I knew I had to read them at least to know what the people at the other end were saying. I couldn’t be dishonest.
One of the other important things that happened at the community was the contacts I got with many socialists, who were radicals(except a very few may be). It was spine-thrilling to be a part of a virtual Red army on a battle against the capitalist ‘exploiters’. But things weren’t quite smooth inside the camp. My personal interactions with these socialists gave me an idea of their cause. But I found out that I wasn’t in complete agreement with what they purported. They were more concerned with economic inequality than in the welfare of the poor. ‘Equality’ was their cause, welfare for the poor was to be paid lip service alone. While I had some inclination to gather some logical defense which I could use in support of socialism, I could sense something. Socialism(and most importantly Marxism) doesn’t have any solid logical backing. Marxism is dogma, a pile of completely wrong propositions. Jargon is the best veil Marxist ‘intellectuals’ use to feign their errors. The most outright questions would give me unconvincing answers.
Getting to know the stupidity, and hypocrisy of socialists was never going to change me, for I was sure to stick on to socialism if I could find a logical basis in which I could defend socialism as the system that works for the interests of the majority. But things definitely started to drift. I had to read what my opponents really said. I made repeated attempts to go through previous discussions, many of which I didn’t understand. This was when I was in college. I was least interested in the course I had opted for a course(from which I eventually dropped out), and all that I did in the latter part of the year was to bunk classes and start reading my first economics textbook(which wasn’t actually Austrian). But it got me thinking. My mind gained clarity on how the market works, and why it works to the best interests of the workers.
There was no looking back. I could see that my socialist comrades were wrong many times. I would point them their errors, but they’d be least bothered to think on an unbiased plank. I got branded as a deserter when I decided to count my days in the Left. The recent year has been a very fruitful phase in my intellectual development. My episode must help drive home the point on what actually can change a emotionally handicapped person into a person who can find the right ways to the goal, which is the welfare of the collective(Yeah, and I am indeed aware RFL’s core philosophy). Noble intentions alone do not suffice to provide the desired results. I have no doubt now that the interests of the masses can be served only by the free market. Any other solution proposed is pure hogwash to divert attention.
While socialists would call for the abolition of market anarchy, Austrians would tell me the efficiency of the ‘invisible hand’. While socialism would demonize profits as ‘exploited surplus labor’, Austrian economics would teach me that labor without present goods through capitalist savings would lead us nowhere. While socialism would characterize the stock market as a casino, Austrians would teach me the resource allocative function of the stock markets. While speculation would be derided by socialists as greed, Austrians showed me how speculators shielded the poor from price shocks. While socialists called for a society of abundance, Austrians recognized the importance of calculation under scarcity. While mainstream economists would term interest as usury, Austrian greats would point towards the importance of time as an economic factor. I could just go on!
The only way to diagnose the real economic disease is to learn the science of cure. The cure is here, and it’s definitely Austrian economics—the only easy and fun-filled way to see beyond what’s seen prima facie and explain that what’s unseen.
13 Responses to “Why my bleeding heart is not a Socialist anymore?”
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ranjit Says:
November 19th, 2009 at 4:20 amyou said “The only way to diagnose the real economic disease is to learn the science of cure. The cure is here, and it’s definitely Austrian economics—the only easy and fun-filled way to see beyond what’s seen prima facie and explain that what’s unseen.”
to find the cure a propoer diagnosis is required and not the other way round. and the austrian economics is the approach for diagnosis and not the cure.
moderators, can you provide permanant links to the reading material especially for the beginners or whoever want to learn the austrian school or about liberty.your blog makes someone to think and learn. With these links they can readily get acess to the beginner’s material
like
How an economy grow and how it doesnt (Comics) by Irwig Schiff
Economics in One lesson – Henry Hazzlit
Economic reasoning – David Gordan
An Introduction to Austrian Economics – Thomas Taylor
That Which Is Seen, and That Which Is Not Seen – Federic Bastiat
Economics for Real People – Gene Callahan
etc etc
i can be of some help if needed
Gopi Krishnan Says:
November 20th, 2009 at 1:20 amthe article kind of reflects on what happened to me too
though i wasn’t very bad at science either. but yes, i wasn’t a socialist..as a matter of fact, i didn’t have any opinion on these matters at all. maybe, that helped in understanding Austrian economics better and easier. it’s an uphill task educating a core socialist on these principles. all the best to team RFL.
prashanthguevara Says:
November 21st, 2009 at 2:11 pmHey wait, I was good at science in middle school. Only in high school….
crusader Says:
November 22nd, 2009 at 10:51 amhi good samaritans,
Happy to c ur responses here.But sad that they r self-judging.Brothers pls understand that social owning of assets is the only solution for all the problems.(not just Indian problems but worldwide).
IMP:- Nature didnt bless any particular individual to have access to all the natural resources or market resources.Its a collective capital.(observe that am using exploitative word “capital” here even though its a nonsense) Kindly observe that am neither capitalist nor capitalist but a human being with all my sensory organs fully functional.( that making me respond unbiasedly to the problems of the society). Just posting an article with some economic terminology & collecting 2-3 unsensual people towards ur support doesn’t mean that an idealogy is valid worldwide in all situations.situations differ from society to society. CAPITALISM:-”unequal sharing of blessings”
SOCIALISM:-”equal sharings of miseries”.
Any person with sensory organs fully functional would definitely opt for the 2nd one since collective sharing is far better than starving.
Gopi Krishnan Says:
November 23rd, 2009 at 9:38 am“CAPITALISM:-“unequal sharing of blessings”
SOCIALISM:-“equal sharings of miseries”.”
This thought comes from a faulty assumption that the gain of one person is the loss of another; that the rich people become rich at the expense of the poor. However, the rich gains wealth by investing & chanelling the resources in such a way that he UNKNOWINGLY works for the maximum benefit of the society. In the process of making money, he creates employment & uplifts the economic conndition of the poor. In capitalism, there is no sharing of blessings or miseries.
CAPITALISM :- “98 people have Rs.100 & 2 people have Rs.2″
SOCIALISM :- “98 people have Rs. 2 & 2 people have Rs.100″
Which society would your “fully functional sensory organ” prefer? The one with more economic equality or the one with greater economic prosperity?
The total wealth in a capitalistic economy is much greater than in a socialist one; Hence, I believe the numbers given in this post are not too far fetched.
Renegade Division Says:
November 23rd, 2009 at 9:50 am@Crusader
Dude this is what the problem is. You are very delusional. you think everything a man needs is just lying there in the nature, so capitalists try to unequally distribute these things, whereas the Socialists try to equally distribute them. But the truth is we don’t live in a society where fruits are just lying around and they can be conjured by a blink of eyes. If that were the case, that everything was readily available in the world and you didn’t even need someone to bring them to you rather you just had to blink your eyes then we will all be Socialists.
But that’s not true, the resources in nature aren’t ‘blessings’, they are parts of nature which needs to be converted into something usable by human labor, and then delivered to the humans. In Socialism you just somehow want everybody to magically work equally to feed everybody equally as a collective. In Capitalism, you allow every individual to get whatever he can from the nature, add his labor and keep the fruits of his labor. This means that if someone works more, and works to fulfil the more unique services of more people, then he deserves to keep more fruits of nature. Like a capitalist, who facilitates the production of product to service people.
crusader Says:
November 27th, 2009 at 2:13 amFriends, First let us bring a clear line of seperation between charity & right.Nobody wants to beg from others (ofcourse everyone have their own self-respect).Nature is a collective resource.So as the goods moulded from raw material of the nature.
U said human labour makes it usable. Thats 200% true.My clear cut question is “Are the people (so called human labour) involved in making it usable are being benefitted properly or not?” In most cases , A BIG “NO”.The investment of the so called capitalist is always common aim ====>common incomes. Thats the formula of public sector. But evil & inefficient people took it into their hands and made it worthless. Now u all crying against it showcasing its faults. Wage (polishly called salary) is a right, not charity. Similarly access to the natural resources. They are not one’s own property. They r for collective usage.
“U r saying that people who are capable can utilise.Right??”
Brother, always make an apple-to – an – apple comparison.If this is a race, some are left far behind & some are far ahead.reasons are many. deprivation from reasonable education, health.So u can’t make that statement. (totally invalid here)
I welcome ur constructive criticism.
Gopi Krishnan Says:
November 27th, 2009 at 4:34 am“Are the people (so called human labour) involved in making it usable are being benefitted properly or not?”
Please define “proper benefit”. According to people here, “proper benefit / wage” is that which has been mutually decided upon by the employer and the employee without any form of compulsion / coercion.
“Wage (polishly called salary) is a right, not charity.”
Are you saying I should get money for sitting on my ass and doing nothing??
Wage becomes a right once you have kept your end of the bargain by doing whatever it is that you agreed to do in the contract.
Unpretentious Diva Says:
November 27th, 2009 at 8:47 amWage never becomes a right. there is nothing like right to wage, rather it is a choice, one may choose freely to offer his labor for a particular work for no wage, no return at all, we all keep doing so every now and then.
But there is right to make free, mutually beneficial contract, there is right to choose, there is right to compete for profit.
Once you make a contract freely, it becomes enforceable. Now neither you nor the other person/group can break or cheat that contract. If any of the party breaks or disrespects the sanctity of that contract (which actually represents the sanctity of your freedom to compete, freedom to choose, freedom to bargain and Freedom to own your own including your labor), that party becomes a criminal/offender and subject to punishment/penalty.
Renegade Division Says:
November 27th, 2009 at 6:06 pm@Crusader
Dude what the hell are you talking about? You are just making declarative statements and expecting people to agree to it on its face value. Nature is not a collective resource, because its impossible to justify a bunch of people’s ownership on it. Also when people add their labor to an unclaimed part of nature, they create property, that is they own the product.
If there is a river flowing around and I bring you water from that river, you don’t think you need to pay me for it? You don’t think I should be able to auction off the water I put in the bottles?
That’s again a ridiculous question because you are just arbitrarily judging the definition of ‘properly’. And the problem here lies in a bigger socialism debates rather than the minimum wages being discussed here.
Almost all the people who complain about unfair wages have their own criteria of wages, I mean the question is who are you to decide what is the right wage? Why should we listen to your definition of a proper wage? And on what criteria are you claiming the wages are improper?
You just don’t understand what a Capitalist does, and your criteria is “look at that rich man he does nothing but invests his money and then at the end of the day he takes 90% of the profits from that business, that’s highly unfair”. The problem here is simple YOU DO NOT UNDERSTAND WHAT A CAPITALIST DOES. What that capitalist does is he facilitates longer production cycles. For example a Capitalist has no use in Shabri’s business who just want to pick berries. Why not? Because she goes to the nature, puts her labor into something not anyone else’s property(the berries) and picks them. Her job of picking berries to feed her stomach is completed in a day.
On the other hand if Shabri had to produce a capital good, like a large stick, which requires her to work 5 days to produce that stick, she can now use a Capitalist because now she will go through 5 days without any food, the Capitalist can step in, provide her food for 5 days in return take a pre-determined chunk out of her future production.
So lets say Shabri produces and eats 25 berries everyday, with the help of a stick she can produce 200 berries everyday and the stick will be useful for a year. But she cannot work for the 5 days she wants to work on producing that stick. So what option she has?
1) She saves 5 berries everyday for over 20 days, total of 100 berries and then she uses her savings of 100 berries to sustain the production process.
2) Capitalist feeds her for the 5 days of her production process in exchange Shabri promises to pay 100 berries out of 200 berries she will make every day.
If she opts for second situation you call that exploitation. But the question is why does Capitalist not deserve the share from the profits? Isn’t the only true reason why you think he does not deserve the profit share because you think he already has a lot and you don’t like him for some reason?
I mean what if the capitalist here is an old lady who has a saving of 100 berries? Should she not deserve the profit because she just happens to have a lot of berries with her already, or she deserves it because she is an old lady, and she been a young guy then she shouldn’t get it?
The answer here is, that you have no consistent moral theory by which you can say what is ‘properly’ or not. You just are throwing the term around as you deem fit, but there is no logical consistency here.
crusader Says:
November 28th, 2009 at 4:45 amOk friend, leave all these comparisons. Lets think with basic common sense. Take an example of a big firm. How can anyone claim it to be his own when many people are involved in its development from starting onwards? How can u privatise it suddenly & say that it belongs to a single person from now onwards? This only leads to accumulation of wealth in the hands of a few (vested interests playing)—- CAPITALISM.
On the other hand, think of the same big firm.Its owned by each & everyone of us.All have an equal share of it.All have equal access to it. All have equal duty (in sense responsibility) towards it.—–This is not socialism but HUMANISM. U people are getting irritated upon hearing words like common, collective,equal etc etc.
Then in what sense r u elligible to talk of a free state? U don’t want someone to govern u, u urselves can’t govern u(since u don’t see a fellow being as an equal to u).Remember freeness & equality can be achieved only if u see ur fellowbeing as an equal to u.If ur colleague having a gun, u must & should have a gun. Otherwise u can’t sleep peacefully.for ex:-CAPITALISM allows all people to have guns (possessing a gun is an individual’s right, they claim)….. One think with open mind & closed eyes. U can feel the inner sense & the real truth
cheers
CRUSADER
Gopi Krishnan Says:
November 28th, 2009 at 10:03 am“How can anyone claim it to be his own when many people are involved in its development from starting onwards?”
Suppose you hire a gardener & give him a sickle to remove the weeds in your garden in 1 day for Rs.50. After the work is done & u’ve paid him, he tells you that the sickle is his and a part of the garden & flowers that bloom in it is also his, will you agree? Is it fair?
“All have an equal share of it.All have equal access to it”
You mean a worker in the plant who generates an incremental profit of Rs.10 per day through his manufacturing capabilities should have an equal share in the total profit of the firm as a GM who generates an incremental income of Rs.10000 per day through the service he provides?
“If ur colleague having a gun, u must & should have a gun.”
You can have a gun irrespective of whether or not ur colleague has one. Just don’t steal it from him & don’t restrict him from owning one.
ranjit Says:
November 28th, 2009 at 10:20 amcommon sense-
all the people who were involved in its development from starting onwards got their pays. they opted for regular paychecks. so how are they entitled to have a share on the big firm? capitalist is the one who risks his capital develops the big firm and enjoy the returns.all the others aren’t bearing any risk except their job loss.they get their pay on time every month or week as per their contracts. any loss or decrease in profit doesn’t effect the other people more than their one month or week’s pay. the capitalist bears the risk of losses. he bears the risk of his capital erosion.and anyone who is buying the company is assuming this risk. and this is capitalism. anyone who assumes this risk can become a capitalist.equality lies in this.a rich man abusing and exploiting (and employing a person on mutually agreed terms isn’t exploiting)a poor man isn’t capitalism. this is called crony capitalism. equality lies in the poor man in a position to enter a mutually acceptable terms of employment with rich man and this is consistent with free markets and capitalism.please change the notion in your mind that capitalism is about exploiting common man. in a free market capitalism a worker stays worker because he feels he cannot assume the risk of running a business and once he chooses to risk of running a business he can be a capitalist himself. a salon owner, restaurant owner, a truck owner etc are capitalists not just tatas and ambanis. barbers themselves can become capitalists by saving and risking by becoming a salon owner, a cook can become a capitalist by saving and risking by becoming a restaurant owner. and nothing stops them in free market except themselves
how does governing the oneself and your line “since u don’t see a fellow being as an equal to u” relate to each other? i can govern myself no matter how i feel about others.