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Morgenthau: Re-Imagining Property

June 21, 2011

What’s the deal with welfare-capitalism? Its the economic system of the modern West. But what is its foundation? What makes it “right” or “correct”?

The foundation of pure capitalism is clear. It all comes down to property. People have a right to their property. So, the government has no right to take it.

The foundation of socialism is clear. It also comes down to property. People don’t have a right to their property. So, the government has an obligation to distribute it.

What makes these ideologies wrong? What makes welfare-capitalism right?

According to pure capitalism an individual is responsible for their creations. They give their time, skills, and energy. Are they not entitled to a return? A product would not exist without the individual who made it. How can we deny the tree planter any right to its fruit?

Makes sense. Socialism denies this right. On that grounds- it doesn’t make the cut.

But socialism points out that there are other factors that contribute to ones creations. Society, inheritance and circumstance give us the opportunity to produce.

When the farmer buys his seeds, does he not travel on societies roads? When the farmer plants the seed, was that soil not cared for by previous generations? Is the farmer not there because he was born in a farmhouse and not on the streets?

The aforementioned tree wouldn’t exist if not for society, inheritance and circumstance. How can we deny these institutions any right to its fruit?

Also makes sense. Pure capitalism denies this right. On that grounds- it also doesn’t make the cut.

The wrongness of pure capitalism and socialism doesn’t prove the rightness of welfare-capitalism. Its ethos must stand in its own. But what is it?

“Pragmatism” is one word that comes to mind. But “pragmatism” is as much a part of the war on moderation as is extremism. It denies that there are ideals in the centre. This is of course a foolish argument- often accepted by self-titled centrists.

It is a product of our fetish for dichotomy. We identify two ideological options, and those who reject them seek compromise. Why not find a third ideal?

Our welfare capitalist system cannot be a compromise, devoid of ideological depth. It must have its own logic, its own narrative.

This must be a narrative that doesn’t define property in absolutes. In some ways personal ownership is legitimate, and in other ways it is not.

This narrative must recognize that both individuals and communal institutions contribute to production. Hence, they are both entitled to ownership. Neither should be ignored. Each should be given a stake in proportion to their contribution. In other words, ownership should be seen as “shares.

An individual deserves shares for his time, skills and energy. These shares in his creation should be inalienable. The government should have no right to take it- not even on the grounds of justice.

Similarly, communal institutions deserve shares for their contribution.

Society should receive shares for the relevant infrastructure and services that made such creation possible. Previous generations should receive shares for caring for the environment that made such production possible. Shares should also be set aside to allow for circumstances were others are also able to be productive creators.

These shares should be inalienable, the individual should have no right to protest.

Is such a narrative really lacking in our collective conscience? After all, welfare-capitalism is a widely accepted system in the modern west.

Yet, it is a system increasingly challenged by conservative and socialist forces. In truth, there are popular values that surround both the rise and life of our mixed market approach. But, no narrative, that redefines the essential concept of property, has managed to permeate our collective conscience.

Such a redefinition of property that denies absolutes is essential. It would provide an ideological foundation for our welfare-capitalist system. Who knows maybe it could even re-invigorate the political centre.

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6 Comments leave one →
  1. Jon permalink
    June 21, 2011 5:55 pm

    Excellent post. A very empirical way of looking at the three systems. I am a believer in welfare capitalism with a bit more welfare and a little less capitalism.

  2. June 21, 2011 9:46 pm

    I certainly agree sir, but unfortunately fundamental changes in approaching things are usually caused by singular events as opposed to a built up movement, maybe we can have that moment soon, especially because of the all time high levels of inequality, especially in the home of capitalism.

  3. June 21, 2011 10:03 pm

    I am actually interested in ways of increasing welfare, without decreasing capitalism.

    We should not measure economic freedom as % of economic activity that is private v.s. private. Rather we should measure economic freedom via # of barriers to doing w.e. you want with your resources.

    A lot of welfare programs don’t actually increase (or barely increase) barriers to doing w.e. you want with your resources. E.g. public child care.

    You can still use private child care if you want, but there is a public option. The public option would be paid via tax revenue- which usually means government taking more of your money i.e. a barrier. But since the program can be considered revenue neutral in the long run (makes it easier for women to work), it actually doesn’t increase any economic barriers.

    Sometimes more government, isn’t actually more government.

  4. Sean permalink
    June 22, 2011 1:44 am

    What it almost sounds you are suggesting (and correct me if I am wrong) is 100% inheritance tax and calling for an adjustment of other taxes to better suit the benefit of society. Essentially a tax is society’s share is it not? You also have to take into account the inefficiency of inaccuracies when it comes to distributing public goods.

    Thats the option with a currency system. The alternative is bartering.

  5. Auguste permalink
    June 22, 2011 2:21 am

    Capitalism, despite whatever justifications may be given for it or arguments made against it, is a socio-economic formation characterised by private property in capital.

    Socialism, despite whatever justifications may be given for it or arguments made against it, is a socio-economic formation characterised by capital held by society as a collective.

    Welfare Capitalism isn’t a third option (which do exist, it just isn’t one). It is merely the way we characterise a capitalist economy in which the state uses some of its tax revenue for things like unemployment, disability, and old-age benefits.

    The reason welfare capitalism is challenged by committed socialists and capitalists alike is for the same reason: It is just ‘nice’ capitalism. The capitalists don’t want that because tax money is being taken from them and spent on bettering the lifeof the poor, reducing their readiness to work for lower and lower wages. The socialists don’t want it because it is still capitalism and doesn’t fix the underlying problems of capitalism. Moreover, it assumes a surplus of tax revenue relative to the population that is only possible through companies having other sources of cheap labour. The Welfare Capitalist West requires an impoverished East.

  6. June 24, 2011 9:02 am

    “According to pure capitalism an individual is responsible for their creations. They give their time, skills, and energy. Are they not entitled to a return? A product would not exist without the individual who made it. How can we deny the tree planter any right to its fruit?”

    I do not know what kind of Capitalism you are talking about, but the tree planter is completely eligible to the right to his fruits.

    Is it his tree? or is he working for someone who owns the seeds, the property, and the tree? Then he wouldn’t have a specific right to his fruit, however he would have complete compensation- where he can buy fruit if he so chooses.

    He has rights to his labour- he get’s compensated for it- leaving him with the freedom to spend this earned capital as he pleases.

    It’s not “wrong”.

    Oh, and that bit on socialism being the ideology that gives people a right to infrastructure is absurd; we have roads in capitalism- the people look out for their best interests under capitalism. Trading, producing, and transporting are fundamental in this process of receiving superior goods to benefit all. To do this, one would need a proper set of roads and infrastructure- something that IS indeed in the best interest of all, so they will create it.

    We don’t need Karl Marx to do this.

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