Why Intellectuals Hate Capitalism

[vt]

http://reason.com/reasontv/2015/08/1...key-capitalism

[dcarrigg]

Re: Why Intellectuals Hate Capitalism

http://reason.com/reasontv/2015/08/1...key-capitalism

I think this transcript is silly. Intellectuals don't hate capitalism. Intellectuals are unlikely to be libertarians, sure. But that's probably because the philosophy makes little sense. The problem with Reason and the rest of the Koch-funded propaganda is that they redefine words. I got the sense reading this that Mackay meant intellectuals hate anarcho-capitalism. Which is probably true. Because the idea of running a capitalist economy with zero regulations is patently stupid. Nevertheless, most intellectuals are pro-capitalism.

I promise that intellectuals don't hate capitalism. Even among the left, the liberals still outweigh the Marxists both in number and in power--by publications, citations, access to resources, etc. More key figures are Rawlsian (capitalist, but with a safety net, not libertarian), than Marxian (anti-capitalist, state-owned factories, etc).

Hell, Mackey makes it sound like Harvard and Yale and MIT and Columbia and Cornell and Princeton and UPenn and Brown and Dartmouth and friends aren't run by corporations and primarily funded by donations from billionaires. Their presidents sit on the boards of Goldman Sachs and JP Morgan and all the rest of the haute finance positions that are the very beating heart of American capitalism.

They set the policy. Students eat it up in exchange for a few creature comforts and undergraduate access to internships that pay more in a summer than middle class kids with masters' from state schools make in a year. The days of the SDS are long gone. It's easy to buy students these days, and cheap. Ditto with professors. And it's done.

The very heart of American intellectualism and the heart of American capitalism intersect. Almost completely.

Sure, the kids at Harvard might be driven around in daddy's old Maybach instead of daddy's new Rolls. But they're capitalists to the core.

They live off capital gains, interest and dividends. They come from countries all over the globe. The one thing they share in common? Capitalism. Many have never worked a day in their lives, and many never will. All are pro-private property and pro-inheritance. All disdain paying taxes and most are suspicious of self-government by the little people.

You can't get much more capitalist than a trustafarian.

Nothing says "I love capitalism" like waking up at 2pm, sparking a joint, shooting off an e-mail to your professor to get that "gentleman's C" since you didn't do your term paper, then calling your driver to take you to that new $50 per plate Asian fusion place where you like to eat "breakfast" consisting of sake and sushi.

The only reason more of them aren't libertarians is that they've got a brain in their head and realize they have it pretty good, and if you take away Social Security and minimum wage and unemployment and Medicare and the EITC and food stamps and you tax the little people harder, then you're going to have a revolt on your hands. And that would really harsh your mellow.

Better to throw the plebs just enough scraps to keep them off your doorstep. Besides, by the point you have $10 million or so, even 1% interest will get you a doctor's salary. And you can probably pull off 5 or 6% long term even after fees and under ZIRP with that kind of scratch. And many have much more than $10 million. Who's more capitalist than the person with all the capital?

But it's why this paragraph is just bull:

It’s sort of where people stand in the social hierarchy, and if you live in a more business-oriented society, like the United States has been, then you have these businesspeople, who they don’t judge to be very intelligent or well-educated, having lots of money, and they begin to buy political power with it, and they rise in the social hierarchy, whereas the really intelligent people, the intellectuals, are less important. And I don’t think they like that. And I think that’s one of the main reasons why the intellectuals have usually disdained commerce: they haven’t seen it, the dynamic, creative force, because they measure themselves against these people, and they think they’re superior, and yet in the social hierarchy they’re not seen as more important. And I think that drives them crazy.

I mean, I'm glad he doesn't just do the IQ=income move that some libertarians do. He at least recognizes that plenty of smart people are poor or middle class as well as rich. But he really misses the boat. Because nearly all of the rich come from academia. And not just anywhere. They all went to Harvard or Stanford or Penn or Princeton or Yale or wherever.

These are where the best business schools are. Very few of the rich went to Central Missouri State Bible College or University of Phoenix Online. So how can you believe that intellectuals hate businessmen? Leading businessmen all at least went to, if not graduated from, the most elite intellectual universities in the country.

I mean, maybe Mackey has this skewed view that comes from being a Houston-born good ol' boy that went to U Texas. U Texas is a good school. But he never played with the big boys. And he made it anyways. So good for him. But I think maybe, just maybe, at the risk of psychoanalyzing a guy I've never met, that Mackey hates intellectuals, and not the other way around.

You ever invest in biotech, VT? Notice how the CEOs are all also bio or chem or med school professors? Intellectual entrepreneurs. That's normal in Software, Tech, Pharma and Biotech and whatnot. Comparatively rarer in the grocery store scene, I admit.

But how many start-ups have come out of Stanford? Harvard? Princeton? Yale? MIT? Cornell? Columbia? Dartmouth? Brown? Penn?

Why are these people starting so many companies if they hate capitalism?

No institution in the world churns out more billionaires than Harvard. None.

The intellectuals can't be hating businessmen that much if they see one in the mirror every morning.

[sunjeep]

Re: Why Intellectuals Hate Capitalism

dcarrig, I rarely post here, but I have read itulip almost daily since I joined several years ago and I truly enjoy reading your comments. They lift the veil while remaining intelligent and polite.

(I was a small town kid who somehow ended up at Stanford for graduate school in chemistry. Since my data point is only one, my error bar is infinitely large, but everything you say hits pretty close to the mark. Spending 5 years in "Shallow Alto" introduced me to a rarefied air I still marvel at from my more current R01 abode. Having spent a lifetime in academia I wish I had the patience to write posts like dcarrig - there is simply too much to say, too much that is missing from the discussion, but I'm not the one to say it. At least for now)

[don]

Re: Why Intellectuals Hate Capitalism

so tell me. Bibi, am I not an intellectual?

do I hate capitalism?

Bibi . . . .

[Woodsman]

Re: Why Intellectuals Hate Capitalism

so tell me. Bibi, am I not an intellectual?

do I hate capitalism?

Bibi . . . .

What am I, chopped liver here?

[vt]

Re: Why Intellectuals Hate Capitalism

Thanks DC,

I always appreciate your take on articles like this. You shine common sense and an understanding of human nature at an extremely high level.

Why aren't you writing articles on some of these topics? You have a gift for writing and clarity.

One of the great values of itulip is people like you posting here.

[vt]

Re: Why Intellectuals Hate Capitalism

DC,

I post people like Mackey because it adds to discussion. I don't agree with all he says, but I don't look at him as a tool of the Koch's. That's getting off topic.

But I do firmly believe that free, fairly regulated markets produce the best economic outcome for the middle class and poor. I believe that Democrats and Republicans damage the economy by both playing to their radical wings over the past few years. Both engineered the bubbles starting with Clinton, Rubin and the repeal of Glass-Steagall. Both allowed bankers and Wall Street to destroy the economy. Both aided and abetted in that destruction.

We've had the slowest recovery in memory. It could have been much better, but never from either party.

We need a strong, growing economy that produces many good jobs for Americans. You cannot pay for the needed programs you cite without more working Americans paying more taxes from higher income.

The current special interest, crony government over regulates the economy, over taxes the workers, and misallocates the budget.

Yes, we need taxation and regulation, but not the bureaucratic albatross at all government levels we see now.

Mackey may be wrong on intellectuals, but he is correct that too many don't respect the power of free markets to help the most citizen

I do respect and appreciate your contributions of course.

[dcarrigg]

Re: Why Intellectuals Hate Capitalism

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[gnk]

Re: Why Intellectuals Hate Capitalism

First off, I think that terms such as communism, capitalism, socialism, etc... are more economic guiding principles than actual 100% applied theories. And yes, all those theories mean different things to different people. The trustafarians that are basically 100% vested in the stock markets are very different than the immigrant that opens a restaurant.

But one question: what would a "true" capitalist, even one such as Milton Friedman, have said about the 2008-2009 Wall Street bailout?

Maybe the problem with the US is that to a large degree, we don't allow the darwinistic aspects of capitalism to apply to an extremely wealthy class? And if that is the case, it is no longer capitalism, it is the hijacking of government - no different than what happens in Marxist countries from day one. The concentration of power.

In the US, I have seen oligarchs hijack the government. Here in Greece, I have seen Unions hijack the government. Bottom line - who are the special interests that control the government, and how does one make government more independent?

To me, arguments about economic theories basically address goals from wealth creation to safety nets to employment. Which is best at accomplishing what.

The real argument is what is government's role. That is what needs to be worked on. The US has to address lobbying, period. And the fact that Donald Trump and Bernie Sanders are the only ones that have genuinely addressed that issue, to me, speaks volumes.

But to caricature capitalism as a trustafarian only dream is simplistic. I have seen too many rags to riches examples in my life to allow trustafarians that were disproportionately bailed out in 2008-2009 to hijack the term "capitalism."

If the bailouts were handled differently, there wouldn't be as many trustafarians and wealth extracting "investors" around today. Keeping a large amount of money from becoming a small amount of money is no easy task. Making a large amount of money grow into an even larger amount of money is even more difficult. Such tasks are rarely accomplished under a true, darwinistic capitalist model. Such tasks, much more often than not, are accomplished with the aid of government.

[vt]

Re: Why Intellectuals Hate Capitalism

DC,

I don't agree with billionaires controlling votes with dollars. I'm on record to take all contributions out of politics from the wealthy, corporations, unions. All of it.
I want to put the bankers and politicians who were responsible for the meltdown in jail.

I'm for the middle class. I want to see more move into it and more jobs for all who want to work.

But the left wants "redistribution". Ok why don't you just take ALL of the wealth of the billionaires! You could run the government a few months on that. then what do you do?!?

At some point you have to tax the middle class a lot more then the economy is negatively impacted by an overload of taxation. You can't be adding layer and layer of government, more and more programs that don't work. At some point private enterprise is strangled and the system collapses.

[Thailandnotes]

Re: Why Intellectuals Hate Capitalism

DC,

I don't agree with billionaires controlling votes with dollars. I'm on record to take all contributions out of politics from the wealthy, corporations, unions. All of it.
I want to put the bankers and politicians who were responsible for the meltdown in jail.

I'm for the middle class. I want to see more move into it and more jobs for all who want to work.

But the left wants "redistribution". Ok why don't you just take ALL of the wealth of the billionaires! You could run the government a few months on that. then what do you do?!?

At some point you have to tax the middle class a lot more then the economy is negatively impacted by an overload of taxation. You can't be adding layer and layer of government, more and more programs that don't work. At some point private enterprise is strangled and the system collapses.

The top 20% of earners pay 65% of the taxes. They could easily afford to pay the other 35% and then some. The top 2% of wealth owners own 50% of the wealth. If you’re in the top 2%, your wealth could be taxed in addition to your income. The tax on wealth could pay for all elections replacing contributions over 2,500.

[vt]

Re: Why Intellectuals Hate Capitalism

"The top 2% of wealth owners own 50% of the wealth. If you’re in the top 2%, your wealth could be taxed in addition to your income"

Do you have any idea of what the bottom of the 2% has in next worth? Do you have any idea of how long and how hard it was to save?

For example a couple could have paid off over 30 years a home now worth a modest $400K. The husband and wife working at blue collar for him and secretarial for her could each have accumulated $800K in their respective 401Ks after working 40 years and reaching the age of 65. They have net worth of $2 million which puts them in the very bottom portion of the top 2%.

At a 4% withdrawal rate (to make sure they don't run out of money before they die) they will have a joint income of $64,000 a year, not including social security.

Now you're going to come along and confiscate it? The top 5% of net worth includes a lot of ordinary middle class people who have worked, paid taxes, and saved to over 40 years so they wouldn't be a burden on their children or society.

You need to really research what wealth is. The real concentration of wealth is in the top one tenth of 1% and is in a very small number of people.

[Thailandnotes]

Re: Why Intellectuals Hate Capitalism

The numbers are (of course) all over the place. I have read that 2 million gets you into the 1%. At the other end I have seen stated that it's a minimum of 22 million. This source says 2 million gets you into the bottom of the top 5%.

“The top 1% of U.S. households have a net worth above $6.8 million or at least $521,000 in income, according to data from the Federal Reserve and the Tax Policy Center in Washington. The cutoffs for the top 5% are $1.9 million in net worth, or $209,000 in income.”

http://www.ritholtz.com/blog/2012/12...ch-in-america/

[vt]

Re: Why Intellectuals Hate Capitalism

The number varies, but why do some feel they can just take when someone has honesty created wealth and saved for decades? Much of the wealth is given back to society through charitable gifts. So the needy benefit from most of this.

Yes there are greedy individuals who waste money that could help the poor, but they are likely a very small number.

Why not create greater opportunity and provide decent jobs for the unemployed? Isn't that a better use of wealth than some bureaucratic government program?

[Thailandnotes]

Re: Why Intellectuals Hate Capitalism

All I'm throwing out there is a much more progressive tax code, not bigger govt.