Monday, November 6, 2017

An economic theory of history

The categories of left wing and right wing are an artifact of the two party system. Monarchists are right wing and yet they were against capitalism circa the 1700's. Republicans used to oppose the free speech rights of Nazis in the 1990's while the ACLU defended them. Liberals used to oppose communism in the 1960's. Conventional reactionary wisdom is that society keeps moving to the left, and that there is some kind of "horseshoe" of politics that explains how the extreme right and extreme left can share so much in common.

Then there is North Korea, that started out a communist country, and still subscribes to a communist doctrine called Juche. It is now a feudal monarchy. This is not unusual. All of the former communist states are now corporate oligarchies, political dynasties, or monarchies. Cuba is a dynasty, North Korea a monarchy, China a corporate fascism, and Vietnam some sort of fascism. Russia is becoming a corporate monarchy, and many of the former states of the USSR are oligarchies/dictatorships, and Stefan Molyneux has a whole video on how communist policies of the Roman empire lead to its collapse and the subsequent replacement of Roman capitalism with the feudalism of the Dark Ages. It seams that communism always reliably leads to fascism or feudalism.

How can this be? How can there be so much confusion between left and right, and how can left wing systems lead to so-called "right wing" results. Well, what if we replace the left/right dichotomy with a dichotomy of "markets versus monopolies?" In other words, what if we look at the world from the perspective of capitalism? Democracy is a coercion market in practice, is it not? After all, lobbyists "buy" the law with campaign contributions. This would make democracy something in between feudalism and anarcho capitalism. What if we simply define three areas of competition? Those being;

Competition in economics
Competition in law making
Competition in leadership

What kind of scale would this produce?

Something like this;

On this scale is becomes readily apparent that any kind of decay in the marketplace for producing goods will lead to communism, and that communism and feudalism are essentially the same thing. We may however postulate the opposite mechanism for monopoly of law and leadership: once an economy collapses due to political competition it leads to a monopoly of leadership, which then leads back to a market of capitalism because the leaders, (who are now owners), what to maximize their capital stock. Competition in power → leads to monopoly in production (communism), communism establishes dictatorship, and the monopoly in power → leads to competition in production (capitalism). Societies "circulate" between two extreme points; a competitive market with a monopoly of power (capitalist monarchy), and a competition of power that leads to a market monopoly, (democracy creating communism). The economic system lags behind the political system, so that the apogee of capitalism is AFTER monarchy has been abolished, (having been established by it), and the perigee of communism is AFTER it has destroyed the free market. A society moving from feudal monarchy to capitalist monarchy is on the upswing, a society moving from democracy to communism is on the downswing.

Societies only oscillate between competitive and anti-competitive states, with the market acting in delayed reaction to power: competitive power monopolizes the competitive free market, creating dictatorship/monopoly of power, monopoly of power/monarchy privatizes and makes competitive the feudal system, the new free market destroys the monarchy and sets up a competitive power structure.

Thus, all of history is the history of competitive governments destroying competitive free markets and monopolistic governments destroying monopolistic feudal systems.

Rarely is power so utterly destroyed so as to produce anarcho capitalism: the extreme right end of the scale, and no doubt genetics plays a major part, with people west of the Hajnal line probably being the only ones capable of it in our society. But what about Somali anarcho capitalism? That's a different topic.


  1. McCloskey says there really is no such thing as capitalism.

    1. His books look interesting, and he's right: capital can't explain actions that humans engage in. It's a homunculus fallacy, a "mcguffin," a "deus ex machina." Capitalism is something that sounds like it explains without explaining anything. He's right to assert that actions are done by people, and therefore ideas matter. It just never occurred to me to think about it this way.


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