Kleptocracy: the Unknown Ideal?

Discussing the charming success of not-really-communist Shanghai, Adam Reed wrote:

Michael, Yes, unfortunately, kleptocracy works - it in fact works better, for most people, than a majoritarian republic, once the former limits on majority rule have been "worked around." Kleptocratic regimes usually stagnate eventually - this already appears to be happening in Singapore, which was the first modern kleptocracy - but the process is very slow.

If I understand current events, then, the USA, like China, is a kleptocracy. The spectacular crashes we have seen, such as the Savings & Loan scandal, Enron, and WorldCom, as well as the successes of firms such as Halliburton and Boeing can be attributed to private sector looters working with looters in the federal government. America is not so much a "capitalist" nation (anymore than Germany is a "Christian" nation, to rely on Reed's analogy earlier in the Shanghai thread), but a looter society.

We line up for entitlements. Even Objectivists do. Many here "advocate free enterprise", but claim that the government controls the funding for their chosen professions, so they have no choice but to steal back from everyone else what everyone else stole from them. Of course, this is circular. In democracy, we rule ourselves and in a kleptocracy, we steal from ourselves.

The problem is the fallacy of the unnamed collective. "We" do not steal from "ourselves." Those who are less productive steal from those who are more productive. Those on the public payroll steal from those in the private sector. Those who have no government income are the last element in the set of sacrificial creatures.

But the so-called "private sector" has its it own payouts from the public treasury. Where would UPS or FedEx be without public roads? How many times have you seen advertising from "minority" or "woman-owned" businesses? We all get the government to lean on our competitors -- and in return, we get learned on a little.

You might think of the looter politicians and industrialists drafting Directive 10-289, or you might of the shopkeepers in High Plains Drifter. Everyone has to contribute to the common cause because no one wants to speak the truth.

Objectivists supposedly have a clearer vision of a more workable morality. Of course, we have never seen a perfect laissez faire society. Objectivists are not apparently more successful in business than other people, such as Muslims and Jews and Outland Chinese. Unlike those groups, Objectivists seem unable to "make themselves rich" by trading with each other. Perhaps laissez-faire capitalism is not the social ideal. It may be that "people are not good enough" for laissez faire capitalism. (The equal and opposite claim is that despite the succcess of monastaries and other communal societies, most people are not disciplined enough for communism.) It may be that kleptocracy is most appropriate to human nature.

The problem is that in order for us to steal from each other, there must be something to steal.

How did Shanghai get built? The pictures show old buildings from the imperialist days of the 1920s, but many beautiful new buildings as well. From whom were those buildings stolen? Perhaps China is anot a kleptocracy after all, and neither is the USA. Perhaps there exists another explanation for the apparently impossible spectacle of Shanghai.

Post 1

Monday, August 15, 2005 - 12:32pm

MM,

The social aspects of human happiness are not the whole of human happiness, and economic exchanges are not the whole even of those social aspects that themselves are not the whole. Your post shows an almost Marxist pre-occupation with the economic aspect of human life, which is important - but not less important for human happiness than is the exercise of one's own intellect and judgement. It is the latter that a consistently kleptocratic regime must repress, and that is the reason why people who desire intellectual and social freedoms continue to emigrate from kleptocratic societies.

Eventually, of course, the intellectual and social repression of a kleptocratic society will hinder the scientific and artistic creativity that drives the foundation of innovation in the economy. Then we see the kind of stagnation by conformity that has already started to destroy the previously flourishing economy of Singapore. There are parts of America that are headed the same way. And then there are places like California, populated mainly by refugees from kleptocratic repression and conformity, immigrants from Singapore and China and Utah and Indiana. I guess that there is no single social system that could be "best" for everyone.

Post 2

Monday, August 15, 2005 - 1:09pm

Marotta:

How did Shanghai get built? The pictures show old buildings from the imperialist days of the 1920s, but many beautiful new buildings as well. From whom were those buildings stolen? Perhaps China is anot a kleptocracy after all, and neither is the USA. Perhaps there exists another explanation for the apparently impossible spectacle of Shanghai.

I will only address the newer ones, especially in the Pudong area of Shanghai. Also, it is from what I've heard and read and I'm no expert. Before about 25 years ago, the Pudong area consisted of farmers and farmland. Then the govt radically changed its economic policy. In Pudong the govt evicted the farmers and took (stole?) the land. My impression is the farmers were poorly compensated. Not only were their homes taken, but their livelihoods as well. The Chinese govt invited foreign investment, including special tax breaks and other privileges. Foreign investment capital poured in, and to a significant degree that explains the spectacle of Shanghai.

Post 3

Tuesday, August 16, 2005 - 6:58am

Merlin Jetton wrote:Also, it is from what I've heard and read and I'm no expert. Before about 25 years ago, the Pudong area consisted of farmers and farmland. Then the govt radically changed its economic policy. In Pudong the govt evicted the farmers and took (stole?) the land. My impression is the farmers were poorly compensated. Not only were their homes taken, but their livelihoods as well. The Chinese govt invited foreign investment, including special tax breaks and other privileges. Foreign investment capital poured in, and to a significant degree that explains the spectacle of Shanghai.

So, this kleptocracy thing works pretty good, then?

Or, is it that these international capitalists are immoral looters?

Or is it a little of both?

I mean, now that we know the truth, instead of gushing over Hong Zhang and Shanghai, should we be shocked and horrified and morally outraged? Should we feel cheated that our highest values were betrayed because we were tricked into fawning over a beautiful city that was built on land looted from hapless farmers?

Or is it a little of both?

Again, I state that Objectivism is for the self-chosen few who can live up to it, just as a Christian monastery found success in discipline, though Christian communism is "unworkable" among the great mass of humanity. The fact remains that we Objectivists seem to be non-objective about how successful businesses really operate. Show me an Objectivist millionaire.

Or do you claim that George Soros and Bill Gates are being destroyed by the betrayal of their undefined highest ideals?

So, this kleptocracy thing, if I wanted to get in on it, how would I start? From what I read on SOLO a couple of months ago, I guess I might apply to the government for money to get a college degree. That seems to be what many people here on SOLO do to share in the loot.

(Edited by Michael E. Marotta on 8/16, 7:00am)

Post 4

Tuesday, August 16, 2005 - 11:53am

Ed Snyder and Fred Smith - both are Objectivists - neither millionaires?

Post 5

Tuesday, August 16, 2005 - 7:13pm

I think I stand at least halfway corrected, Robert. Thanks for the links. Here is what I found out.

The driving force behind bringing an NHL franchise to Philadelphia, Ed Snider has been a major factor in the city�s sports and entertainment business for over 30 years. Snider�s undying passion for winning, towering strength, and command of respect have come to symbolize the Flyers on the ice. In his 32 seasons as Flyers sovereign, the team has won two Stanley Cups and appeared in the Finals seven times.
http://www.philadelphiaflyers.com/history/halloffame/snider.asp

Ed Snider is one of the true giants of the sports and entertainment industry. His career has been guided by the principle that one must be constantly moving forward in order to succeed, and it�s that philosophy that marks his leadership of Comcast-Spectacor today
http://www.comcast-spectacor.com/corporate/bios/EdSnider.asp

Ed Snider
Chairman
Comcast Spectacor
http://www.objectivistcenter.org/center/staff.asp

Fred L. Smith, Jr. is President and Founder of the Competitive Enterprise Institute, a free market public policy group established in 1984. Mr. Smith combines intellectual and strategic analysis of complex policy issues ranging from the environment to corporate governance with an informative and entertaining presentation style. Well-known in academic and professional circles, Mr. Smith is a popular speaker at universities and conferences around the world.
http://www.cei.org/dyn/view_expert.cfm?expert=32

In its IRS Form 990 for the fiscal year ending September 30, 1999, CEI reported revenues totalling $2,986,777, almost all of which were in the form of contributions from unspecified sources. Its net assets were $1,649,949. Salaries and benefits to its top employees were reported as follows:

Fred L. Smith, president, $134,940
Sam Kazman, general counsel, $89,103
Thomas P. Miller, director, economic policy, $82,775
James Gattuso, vice president, policy/management, $82,213
Clyde Wayne Crews, director, competition & regulatory policy, $75,615

http://www.sourcewatch.org/index.php?title=Competitive_Enterprise_Institute

When I sat on the Board of Directors of the East Lansing Food Co-operative in 1990, they were grossing just under $1 million per year. The People's Food Cooperative of Ann Arbor turned $4.3 million last year. So, apparently, if a bunch of communists can do it, the fautl, dear Brutus lies ... or as my wife says, "In the words of Neye-tsche-tsche-tsche, Unto thine own self look first."

I'm off to steal a million!
... and this just in. If you want to be a millionaire, forget architecture.
http://money.cnn.com/2005/08/15/pf/training_pay/index.htm?cnn=yes

(Edited by Michael E. Marotta on 8/16, 7:39pm)

Post 6

Tuesday, August 16, 2005 - 9:15pm

Well, at least you got the right Ed Snyder - tho I never asked him how much he makes, knew he made plenty... but the Fred Smith I was refering to is the founder of Fed Ex... :-)

Post 7

Tuesday, August 16, 2005 - 10:29pm

Michael,

Thanks for having the backbone to post your view on things. You have exposed much of the hypocrisy in "objectivism" quite nicely.

Post 8

Tuesday, August 16, 2005 - 10:51pm

Celeste Norcross writes: "You have exposed much of the hypocrisy in "objectivism" quite nicely."

Please don't feed the troll.

Post 9

Thursday, December 14, 2006 - 1:48pm