Equality: is it possible?

Private and Corporate Utilities : Newsletter 56, by David Lipschitz BSc (Honours) MBA - A consultant working at the intersection of energy and business.

Today’s chat with ChatGPT.?

David:

The French Revolution slogan of Liberty, Equality and Fraternity is a noble goal.?

But enclosure of the commons has continued.?

The playing fields are as uneven as ever with high barriers to entry for the private citizen and SMME.?

Why didn’t the French Revolution bring the equality that the masses sought?

ChatGPT:

The French Revolution was a transformative period that aimed to establish the principles of Liberty, Equality, and Fraternity. However, the realization of these ideals was not straightforward, and the revolution did not bring about the level of equality that many had hoped for. There are several reasons for this:

1. Complexity of social issues: The French Revolution sought to address complex social issues, such as inequality and privilege, that were deeply entrenched in French society. Overcoming these issues required more than just toppling the existing regime.
2. Political instability: The French Revolution was marked by political turbulence and upheaval. Frequent changes in government and political factions made it difficult to implement effective policies to promote equality.
3. Economic challenges: The revolution took place in the context of financial crisis and economic hardship. Inequality was exacerbated by food shortages, inflation, and high unemployment, which made it difficult for the revolutionaries to focus on creating a more equal society.
4. External factors: France was under constant threat of foreign invasion, which diverted attention and resources away from domestic issues. Many European powers were hostile to the revolutionary government and its principles, leading to a series of wars that hindered the progress of the revolution.
5. Counter-revolutionary forces: Many segments of society, including royalists, aristocrats, and conservative elements, opposed the revolutionary ideals and actively worked to restore the old order. This resistance slowed the progress of the revolution and limited the implementation of policies promoting equality.
6. Radicalization and violence: As the revolution progressed, it became increasingly radical and violent, culminating in the Reign of Terror. This period led to a loss of public support and ultimately the rise of Napoleon, who established an authoritarian regime that curtailed many of the revolution's gains.
7. Evolution of capitalism: The French Revolution occurred during the early stages of the Industrial Revolution and the rise of capitalism. The enclosure of the commons and the barriers to entry for private citizens and small-to-medium enterprises were not unique to France but were part of broader global economic trends.

In summary, while the French Revolution aimed to promote Liberty, Equality, and Fraternity, its failure to achieve complete equality can be attributed to a combination of complex social issues, political instability, economic challenges, external factors, counter-revolutionary forces, radicalization, and the evolution of capitalism.

David:

What do you mean by Capitalism in the context of your argument?

ChatGPT:

In the context of the argument, capitalism refers to an economic system characterized by private ownership of the means of production, competition, and the pursuit of profit. Capitalism emerged during the late 18th and early 19th centuries, coinciding with the Industrial Revolution and the French Revolution.

The rise of capitalism played a role in the French Revolution, as it contributed to the socioeconomic changes taking place at the time. In this context, the following aspects of capitalism are relevant:

1. Wealth and income inequality: The growth of capitalism led to the accumulation of wealth among a small number of individuals, such as merchants, manufacturers, and landowners. This exacerbated existing inequalities in French society, as many people remained poor and struggled to access basic necessities.
2. Enclosure of the commons: As capitalism developed, land that was once held in common for the use of local communities was increasingly enclosed and privatized. This process displaced many people, particularly small farmers, and concentrated land ownership in the hands of a few, creating barriers to entry for private citizens and small-to-medium enterprises.
3. Industrialization: The Industrial Revolution was a driving force behind the growth of capitalism. New technologies and innovations led to the growth of factories and urbanization, which in turn created new social and economic challenges. In France, this process contributed to the already existing tensions between different social classes.
4. Market competition: Capitalism is driven by competition in the marketplace. This often led to a focus on profit and efficiency at the expense of social welfare and equality. In the context of the French Revolution, this may have limited the extent to which the ideals of Liberty, Equality, and Fraternity could be realized.
5. Influence of economic theories: The development of capitalism was accompanied by the emergence of economic theories that supported private property, free markets, and minimal government intervention in the economy. These ideas, such as those proposed by Adam Smith, influenced political debates during the French Revolution and shaped the way people thought about the role of the state in promoting equality and social welfare.

In summary, capitalism in the context of the argument refers to the economic system that emerged during the late 18th and early 19th centuries, characterized by private ownership, competition, and the pursuit of profit. The rise of capitalism contributed to the complex social and economic landscape of the French Revolution, making it difficult to achieve the complete realization of the ideals of Liberty, Equality, and Fraternity.

David:

What does “the means of production” mean or what does it refer to?

ChatGPT:

The "means of production" is a term used in economics and political theory, particularly in Marxist and socialist thought, to describe the physical, non-human resources used in the process of producing goods and services. These resources can be categorized into two main groups:

1. Fixed capital: This includes the physical infrastructure and assets that are necessary for production, such as factories, machinery, tools, and equipment. Fixed capital typically requires a significant initial investment and has a long useful life.
2. Circulating capital: This includes raw materials, work-in-progress, and finished goods that are transformed or consumed during the production process. Circulating capital is constantly used up and replaced as production continues.

In a capitalist economic system, the means of production are predominantly privately owned by individuals or corporations, who use them to generate profits. Workers, who do not own the means of production, are paid wages in exchange for their labor, which is used in conjunction with the means of production to create goods and services.

The concept of the means of production is central to Marxist theory, which argues that the ownership and control of these resources are a key determinant of social and economic relations. According to Marxism, the class struggle between those who own the means of production (the bourgeoisie) and those who do not (the proletariat) is a driving force behind historical development and social change.

David:

So owning the means of production is good in capitalism but bad in Marxism?

ChatGPT:

The difference in perspective on owning the means of production in capitalism and Marxism primarily lies in the contrasting views on the implications of private ownership and the associated social and economic outcomes.

In capitalism, private ownership of the means of production is considered beneficial because it:

1. Encourages innovation: The prospect of profit incentivizes individuals and businesses to develop new technologies, products, and services that can lead to economic growth and improved living standards.
2. Efficient allocation of resources: Capitalist systems rely on market mechanisms to allocate resources efficiently. Prices act as signals that guide producers to create goods and services that consumers want, leading to higher overall productivity.
3. Personal freedom: Capitalism emphasizes individual liberty and the freedom to own property, start a business, and make economic decisions without excessive government interference.

However, in Marxism, private ownership of the means of production is seen as problematic because it:

1. Leads to exploitation: Marxists argue that under capitalism, the bourgeoisie profits by extracting surplus value from the labor of the proletariat. Workers are paid less than the value of the goods and services they produce, resulting in inequality and exploitation.
2. Creates class struggle: The unequal distribution of wealth and power between the bourgeoisie and the proletariat leads to ongoing class struggle, as the proletariat seeks to improve its conditions while the bourgeoisie attempts to maintain its control over the means of production.
3. Results in alienation: Marxists argue that under capitalism, workers are alienated from the products of their labor, the process of production, their fellow workers, and their own human potential, as they are reduced to mere commodities in the pursuit of profit.

In summary, owning the means of production is considered good in capitalism because it promotes innovation, efficient resource allocation, and personal freedom. In contrast, Marxism views private ownership of the means of production as a source of exploitation, class struggle, and alienation. Instead, Marxists advocate for the collective ownership of the means of production, in which resources and wealth are shared more equitably among the members of society.

David:

Marxism is a noble goal but hasn’t it led to power that was under the control of the people, eg using their pension fund investments and shareholdings and shareholder activism, being moved into the hands of government, which is meant to represent the masses and the proletariat, but which in reality takes rents and bribes making their lives easier and further enclosing the commons and moving the people further away from owning the means of production?

This is possibly known as the law of unintended consequences.?

ChatGPT:

You raise a valid point about the unintended consequences that can arise from the implementation of Marxist-inspired policies. While Marxism's core principles aim to create a more equitable society with collective ownership of the means of production, historical attempts to put these ideas into practice have often led to various issues, including the concentration of power in the hands of the state or a ruling elite.

Some reasons for these unintended consequences include:

1. Authoritarianism: In several instances where Marxist ideologies have been implemented, they have given rise to authoritarian regimes that centralize power and suppress dissent. These regimes often prioritize the maintenance of their own power over the welfare of the people they are meant to represent.
2. Bureaucracy and inefficiency: The centralization of economic planning and decision-making in a Marxist system can lead to bureaucratic inefficiencies, as the state apparatus may not have the necessary information, flexibility, or incentives to respond effectively to the diverse needs and preferences of the population.
3. Corruption: When the state controls the means of production and distribution, it can create opportunities for corruption and rent-seeking among government officials, as you mentioned. This can lead to the misallocation of resources and perpetuate inequality, rather than alleviating it.
4. Lack of incentives: The collective ownership of the means of production may diminish individual incentives for innovation, hard work, and productivity, as the rewards for such efforts are shared collectively rather than accruing to the individual.
5. Economic stagnation: In some cases, the implementation of Marxist policies has led to economic stagnation, as the inefficiencies of centralized planning and lack of incentives can hinder innovation and growth.

It is important to note that Marxism as a theory and the practical implementation of Marxist policies in various historical contexts are not the same. The problems and unintended consequences that have arisen in some cases do not necessarily invalidate the core principles of Marxism or the potential for alternative approaches to achieving a more equitable society. However, these historical examples serve as a reminder that the path to achieving the goals of Marxism can be fraught with challenges and unintended consequences, and that careful consideration is needed when designing and implementing policies inspired by Marxist principles.

David:

Let’s go back to our initial themes of inequality and enclosure.?

The Royal Charter was created a thousand years ago to give validity to an educational institution or a chartered society, for example a building association or an engineering group, which operated under a license which confered authority and “authenticity” on the group receiving the Authorization.?

Later during the Industrial Revolution, the modern schooling system was created with 12 years at school, possibly followed by 3 to 6 years of tertiary education, perhaps followed by 3 years of apprenticeship, followed by a structured career.?

This led to further enclosure as “educated” people had more access, and whilst the state tried to give everyone an equal education, it failed possibly because of small class sizes in the elite schools and highly educated and experienced teachers in the elite schools.?

Education is vital. But many people have latent talent, or they can do things they were never formally taught.?

Taking this in conjunction with decentralization and the proletariat finally being able to own the means of production, isn’t there now a possibility of everyone becoming equal?

ChatGPT:

It is true that education has played a significant role in shaping the opportunities available to individuals and has often perpetuated inequality throughout history. The traditional education system and the Royal Charter you mentioned have, in many instances, contributed to the concentration of knowledge and resources among a privileged few.

In the modern era, however, advances in technology, communication, and the democratization of knowledge have opened new avenues for people to access education and opportunities. The decentralization of information and the ability for individuals to own the means of production have indeed created possibilities for greater equality. Some factors contributing to this change include:

1. Access to information: The internet and digital technology have made knowledge more accessible than ever before, allowing individuals to learn new skills, collaborate, and access resources that were once exclusive to elite institutions.
2. Alternative education models: Online learning platforms, MOOCs (Massive Open Online Courses), and other non-traditional forms of education have made it possible for people to gain knowledge and skills outside of the conventional schooling system.
3. Flexible work arrangements: Remote work, freelancing, and the gig economy have made it easier for individuals to find employment opportunities and generate income without relying on traditional career paths.
4. Entrepreneurship and innovation: Advances in technology have lowered the barriers to entry for starting a business or creating new products and services, enabling individuals to become producers and owners of their own means of production.
5. Social and political movements: Grassroots movements advocating for equity, social justice, and inclusion have raised awareness about the importance of dismantling barriers to opportunity and addressing systemic inequalities.

While these developments offer promising opportunities for greater equality, it is important to recognize that significant challenges remain. Access to quality education, technology, and resources is still unequal across different regions and socioeconomic groups. Additionally, systemic issues such as discrimination, poverty, and social norms can continue to perpetuate inequality.

The potential for everyone to become equal is an ambitious goal, and progress is being made in various areas. However, it requires continuous efforts to address existing disparities, promote inclusivity, and ensure that everyone has the opportunity to realize their full potential.

David:

I agree.?

ChatGPT:

I'm glad that you found the points raised in the discussion agreeable. It's important to acknowledge the complexities and challenges involved in addressing inequality and promoting equal opportunities for everyone. Progress has been made in many areas, but there is still much work to be done to ensure a more equitable future.

If you have any more questions or would like to explore other topics, please feel free to ask.