Failures and breakthroughs – exposed, reflected, considered

Commonalities between markets and (usually failing) politics

with 2 comments

The logic of the market is predicated on the pervasive and obvious inequality of humans. No two people have the same scales of values, talents, or ambitions. It is this radical inequality, and the freedom to choose our own lot in life, that makes markets – division of labor, production and distribution of goods and services – possible. Our differences are reflected in our outcomes and results which are converted into market commodities/products/services. The latter we exchange for what we need/want but do not have.

In (most of modern) politics the ideological parallel is easily imitated. For example, system of voting is designed to replicate the market’s participatory features. In fact, it is a perverse distortion of the market system. In markets, you get the goods you pay for. If you don’t and there’s been a violation of contract, you have legal recourse. In voting, people are not actually purchasing anything but the politician’s word/promises, which is legally un-claimable. Furthermore, a politician has every incentive to lie, manipulate, or twist to produce the desired result.

“Politicians shake our hand before elections and our trust thereafter.”

Politics does not consider individuals. We are merely a tiny speck on the vast blob called “nation,” and what this blob “thinks” is only relevant insofar as it accords with a political agenda advantageous to the country and its friends. During elections – our one opportunity to feel ourselves important and involved in our country’s politics – we are asked to cast ballots for people we do not know (or know what they want us to know) because they make promises they are under no obligation to keep – or keep them if it advances their agenda, enlarges their purse or contributes towards another election term for them. What’s even worse, the voting gesture is pointless on the margin. The chances that any one vote will actually have an impact are so infinitesimally small as to be meaningless.

In markets, success means entrepreneurial talent or business acumen which translates into the ability to anticipate, create and serve the needs of the market. In politics, success means the ability to twist and manipulate public opinion so that enough fools (so regarded by politicians) reaffirm the politician’s power and ambitions. It takes special talents to do this, which are not cultivated in good families – read Machiavelli. In markets, most successful usually deserve the credit due to merit, hard work and shrewd vision. In politics, the most successful usually excel in art of acting,  (in best of cases) rhetoric  –  in recent years, we hardly have seen any – narrow-mindedness and self-aggrandizement.

A politician, according to Ambrose Bierce’s dictionary, is “an eel in the fundamental mud upon which the superstructure of organized society is reared. When he wriggles he mistakes the agitation of his tail for the trembling of the edifice. As compared with the statesman, he suffers the disadvantage of being alive.”

What about likes of Patrick Henry and George Mason? They wanted to separate (the American) society and government to protect the people from being manipulated by cunning political forces.  Albert Jay Nock was right to characterize a country, democratic or otherwise, as a parasite on society, whereas markets (especially those where innovation and entrepreneurship are common) and economic production represent lifeblood of (free/healthy) societies.

Politics and markets affect each other. When politics has an upper hand, life of common people gets worse. When markets have an upper hand, life of people gets worse as well.

Judge for yourself.

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Written by Hayk

February 17, 2009 at 1:31 pm

2 Responses

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  1. “For example, system of voting is designed to replicate the market’s participatory features. In fact, it is a perverse distortion of the market system. In markets, you get the goods you pay for. If you don’t and there’s been a violation of contract, you have legal recourse.”

    Voting does not replicate the participatory features of the market. In fact, voting, like politics has nothing to do with markets. Politics and governments first role is to protect society (the alternative would be a market without rules…darwinism…were only the strong survive).

    The fact that you have contracts and that you can have legal recourse is precisely due to politics thank you very much.

    “In markets, success means entrepreneurial talent or business acumen which translates into the ability to anticipate, create and serve the needs of the market.”
    The market you talk of here is only possible if there is a society and thus a power which can protect the young (i.e. enterpreneurs)…politics.

    Though many politicians are liars and manipulators, the market you talk of cannot exist without politics.

    Best,
    Peter

    Peter

    February 18, 2009 at 11:36 am

  2. Peter,

    Thanks for your comment.

    The voting in the sense I meant was exactly having the apparent feature of participation, just like in markets.

    You, an individual, cast your vote for (and your trust in) a certain politician, who you think will represent (and protect) your interests the best (you hope so at least).

    You, an individual, hardly have other say in matters political, drafting laws or directing foreign/domestic policies of your country, if I were to generalize somewhat.

    Voting is part of what can perhaps be called national political involvement and as such is part of politics. It might not have anything direct to do with markets, but we know well how much we consider business, markets, salaries and other aspects touching our daily lives when we cast our votes.

    Also, let us not confound politics and law. There are laws governing interactions between different constituencies of our society. Politics represents a means of interaction among economic, social and demographic facets of countries. Politics can bring forth certain tendencies and help push creation of laws, but it is not due to politics directly that these laws are conceived.

    Concerning markets. Markets imply competition, and competition implies selection. The selection is based on rules and criteria of markets. Most markets favor increasing/more efficient production of goods and services and their exchange. To become and remain successful, a market participant (entrepreneur, businessman, etc.) must obtain an edge over other competitors in the market. this applies mostly to free markets, and this is what I meant.

    Of interest might also be a good read from former labor secretary Robert Reich entitled “Supercapitalism”
    http://www.amazon.com/Supercapitalism-Transformation-Business-Democracy-Everyday/dp/0307265617

    where it shows how in recent years capitalism (including markets) has been increasingly affected by politics.

    fail92fail

    February 18, 2009 at 2:32 pm


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