Nov 182011
 

From Peter Drucker’s Post-Capitalist Society (1993) [page numbers are from the paperback edition]:

p.3

We are clearly still in the middle of this transformation; indeed, if history is any guide, it will not be completed until 2010 or 2020.”

In other words, that really is the light at the end of the tunnel, and not an oncoming train.


pp.4, 5 & 6

That the new society will be both a non-socialist and a post-capitalist society is practically certain… The market will surely remain the effective integrator of economic activity. But as a society, the developed countries have also already moved into post-capitalism. It is fast becoming a society of new “classes,” with a new central resource at its core… Instead of capitalists and proletarians, the classes of the post-capitalist society are knowledge workers and service workers.”

All you old-school Prius socialists and throwback anarchocapitalists, just… stop. You’re both right, and you’re both wrong.


p.8

Value is now created by ‘productivity’ and ‘innovation’, both applications of knowledge to work… The social challenge of the post-capitalist society will, however, be the dignity of the second class in post-capitalist society: the service workers.”

This is what all the ruckus is about, and not Marxists versus Objectivists, both of whom stare fixedly at the 19th Century in the rearview mirror.

The most radical thing you can do to help The People and to bring dignity to service workers, would be to start a service work firm, hire disenfranchised service workers, distribute the shares among them, and find clients to contract their service jobs to you. Then, let the service workers run the show and create opportunities for advancement among the ranks. In this way, your, e.g., janitorial workers will have seized the means of production, and they will have a chance of rising above their current stations within your firm, rather than wander the halls as Invisible People in someone else’s. Ditto clerical work. Ditto anything else that can be outsourced and does not require higher education.


p.10

Political theory and constitutional law still know only the sovereign state… [S]ince the end of World War II, the sovereign nation-state has steadily been losing its position as the sole organ of power.”

The solution to social discord is not political. Politicians, are by definition individuals who have chosen careers in the pursuit of power, rather than producing something of value. At best they are caretakers; at worst they are rulers who exempt themselves from the statutes and regulations that they impose on the rest of society.

The occasional bone that they throw to members of special interest groups is an attempt to buy votes, no matter how pretty the words, how forceful the scowl, or how many times the speaker repeats a phrase.

It is not within the framework of a nation-state that individuals create wealth. One does not vote wealth into existence. If one wants to create more wealth for the poor, one must look to where wealth is created.


p.14

I also consider it highly probable that within the next decade or two there will be new and startling ‘economic miracles’, in which poor, backward Third World countries transform themselves, virtually overnight, into fast-growth economics powers.”

viz. Hans Rosling’s TED presentations, the BRIC countries (Brazil, Russia, India, and China), and The Next 11 countries (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam).


Invest accordingly.

Prof. Evans

Nov 132011
 

Max Weber (1864-1920) was one of the fathers of modern sociology, back when Sociology and Economics were still on speaking terms, before the invention of Macroeconomics in the 1930s and the conquest of Sociology by collectivists in the middle decades of the 20th Century.

Weber’s work on charisma* is particularly relevant today.

The term ‘charisma’ will be applied to a certain quality of an individual personality by virtue of which he is set apart from ordinary men and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities… [I]t is the duty of those who have been called to a charismatic mission to recognize its quality and to act accordingly… No elective king or military leader has ever treated those who have resisted him or tried to ignore him otherwise than as delinquent in duty. (pp.358-360) [italics in original]

In other words, charisma is sanctimonious narcissism with a band of disciples.

Charismatic authority… is sharply opposed both to rational, and particularly bureaucratic, authority, and to traditional authority… Both rational and traditional authority are specifically forms of everyday routine control of actions; while the charismatic type is the direct antithesis of this. Bureaucratic authority is specifically rational in the sense of being bound to intellectually analysable rules; while charismatic authority is specifically irrational in the sense of being foreign to all rules. Traditional authority is bound to the precedents handed down from the past and to this extent is also oriented to rules… [C]harismatic authority repudiates the past, and… it recognizes no appropriation of position of power by virtue of the possession of property

The rallying cry of the charismatic ruler is, “Change!” with no reference to what the ultimate goal of that change is. It is a tantrum and not a strategic plan.

The only basis of legitimacy for it is personal charisma… as long as it receives recognition and is able to satisfy the followers or disciples. (p.361-362)

As long as a charismatic ruler holds his or her disciples in thrall, they bestow authority upon him or her. However, when the shine begins to tarnish, and the façade begins to crumble, the disciples withdraw, if they do not openly denounce and condemn.

What is despised, so long as the genuinely charismatic type is adhered to is traditional or rational everyday economizing, the attainment of a regular income by continuous economic activity devoted to this end… From the point of view of rational economics activity, charisma is a typical anti-economic force. It repudiates any sort of involvement in the everyday routine world. It can only tolerate, with an attitude of complete emotional indifference, irregular, unsystematic, acquisitive acts. (p.362)

Charity, volunteerism, national service, and the like are the favored programs of the charismatic leader. Never mind that all of our clothing, food, housing, and transportation must be produced, the charismatic leader holds grubby capitalist profiteers in disdain, and rhapsodizes over sacrifice, spreading the wealth, and making the high and mighty pay their fair share.

This is one reason why charismatic rulers tend to be populists and collectivists—whether of the so-called ‘right-wing’ national socialist or ‘left-wing’ international socialist variety—and we probably never will see a charismatic libertarian… at least not one who isn’t nuttier than a squirrel’s dreams.

[I]t is conceivable that insulation from economic struggle should mean limitation of those who were really eligible to the ‘economically independent’; that is, to persons living on income from property. (p.363)

Charismatic rulers and their disciples will tend to come from those who are referred to in many places as ‘Volvo socialists’ and ‘trustafarians’. One who has become a multi-millionaire from the proceeds of a best-selling autohagiography can afford the luxury of living a charismatic life, especially if that individual is not the son or daughter of the hegemony. Those who live from paycheck to paycheck—i.e., those who are bound up in the status quo and pay the taxes that support the political and parasitic classes—are excluded from the inner circle, and only the idle and the unemployed can stay with the movement long enough to wield power in the charismatic ruler’s regime.

Weber goes on to describe how a charismatic revolutionary movement must transform into a new permanent routine structure. “The vassals, the holders of benefices, or officials are differentiated from the ‘tax payers.’ The former, instead of being the ‘followers’ of the leader, become state officials or appointed party officials.” The final stage is reached, when the animals take over the farm and change their chant from “Four legs good, two legs bad,” to “Two legs good, four legs bad.”

Invest accordingly.

Prof. Evans


* source:

Weber, Max (1964; 1947), The Theory of Social and Economic Organization (Trans., A.M. Henderson & Talcott Parsons; Ed., Talcott Parsons), New York: Free Press. ISBN: 0-684-83640-8 [return]

Nov 042011
 

http://blogs.indystar.com/varvelblog/files/2011/11/110411.jpg

It is unclear what the Occupy Wall Street phenomenon is really all about. On the one hand the claim is that it is about corruption, but on the other hand it is couched in terms of ‘the 99%’ versus ‘the 1%’, which looks like moth-eaten class hatred that has never worked in the past.

For example, when Occupy Wall Street protestors call for ‘The Government’ to rein in ‘corporate greed’, they invoke an amorphous collective, and it is only fitting that the key individuals within that collective be treated as that collective; viz., the Treasury Secretary, the former Treasury Secretary, and the president of the New York Fed, are all former Goldman Sachs executives.

It would not be surprising in the least, if they returned to their former employer after their terms of government service ended.

Do the Occupy Wall Street protestors seriously Hope™ that Wall Street executives currently on sabbatical in Washington, DC, will Change™ anything significant? It is muddle-headed to turn to Wall Street bankers to rein in Wall Street bankers… unless one is calling for self-regulation, as libertarians do.

Perhaps, Occupy Wall Street protestors expect agents of the SEC to rein in corporate greed. But if agents of the SEC were going to rein in corporate greed, then they should have done so by now. It is, after all, right there in their job descriptions to ensure transparency and the smooth operation of markets in the USA. And yet, toxic waste (an actual financial term) was sold as AAA-rated debt right under their noses.

It is as if a kid stole a piece of candy from a shop, and the security guard did nothing. Emboldened, the kid went back and grabbed a fistful of candy, and the security guard did nothing. Later, the kid went back and filled a bag with candy, and the security guard did nothing. Finally, the kid returned with his gang and emptied the candy shop, which went out of business, and the crowds directed all of their anger at the kid and effectively none at the firm that hired the security guard, or the fact that the security guard is a former member of the kid’s gang.

If the Occupy Wall Street protestors Hope™ that Congress will effect Change™, then they should Occupy Pennsylvania Avenue. Although, in this post-9/11 world, they should avoid even the appearance of unrest in their ranks, lest they be declared domestic terrorists by someone in charge.

When the Occupy Wall Street protestors storm the offices of the SEC chanting, “Do! Your! Jobs!” we’ll know that they are sincere about corruption, and that they are not just a loose band of individuals who are envious of those who have more than they do.

Instead, whoever is tacitly leading this movement has rigged it so that residents of the wealthiest society in all of human history can flatter themselves that they are downtrodden, even though the poorest 5% of US residents are wealthier on average than more than 2/3rds of the more than 7 billion humans alive today, and 75% of US residents are wealthier than more than 90%.

Seen globally, something like one-quarter of US residents are in the top 1% of humanity. If this is about redistributing the wealth of the top 1% to the bottom 99%, take care to note how many are standing behind you, ready to pounce.

If the Occupy Wall Street movement is about corruption, then it is about corruption, and the proper targets are at both ends of the money trail. If the Occupy Wall Street movement is about redistribution, then it is socialism, and if the redistribution is to be contained within US borders, then it is national socialism.

Invest accordingly.

Prof. Evans