[lbo-talk] Investment and human capital was: Marxism and Religion

[Wojtek Sokolowski]

Andie:


State sponsored charity is one way of putting it. But
that is misleading. Charity is voluntary and not
obligatory. Transfer payments funded by taxes are
neither. Another, better, way of putting it is minimal
economic justice, an acknowledgment that we're all in
the same boat and share fates in such a way that the
better off among us have no entitlement to flourish at
the cost of utter destitution of our fellow citizens.
The less well off have a right not to be rendered
destitute that, as a matter of right, does not depend
on mere good will by the better off.


[WS:] Call me an old apparatchik, but I think that the "classical" Soviet
approach is far superior to the liberal one based on transfer payments.  It
relied heavily on massive investment in industrial infrastructure and
massive investment in human capital.  So far, so good, but here is the catch
- it also kept the wages down, it forced masses of people into the
industrial mode of production and modernity (mass relocation, often forced,
mandatory employment, and the destruction of local cultures viewed as
nonconductive to modern industrial life cf. the Gypsies), and most of the
transfer payments were distributed collectively as subsidies on services
like education or health care, subsidies on housing, and subsidies on basic
consumer goods.  

It worked and it worked well - as evidenced by the fact that x-USSR became a
global superpower, and backward Eastern European countries achieved near
parity with Western Europe in about a thirty year period.  However, if these
solutions were tried today, the populists and culturalists would cry bloody
murder, blaming the poor, "negro removal" and dollops of similar crap slung
by self-styled populists and radicals for the sin of forcing people from a
fringe existence to the economic mainstream.  

This is, btw, how I see much of the US left - its main concern is not to
elevate the underclass to the level of the upper/middle class, but to bring
down the level of the upper/middle class to that of the lower classes -
especially in the realm of culture.  Again, this is my perception, which, I
am aware, is not very popular on this list.  We have to agree to disagree on
this issue.

Another point - the chief reason for African underdevelopment is a dismal
lack of investment in infrastructure and human capital.  While factors
responsible for those shortages are complex, the chief among them is the
kleptocracies that run post colonial states (with the possible exception of
Julius Nyerere) and squandered whatever foreign they received during the
cold war on consumption and payola to political supporters.  Again, this is
not a character flaw but the extension of tribal politics to the state level
- a structural factor. 

However, the net effect of that failure is that little infrastructure
(industrial, transport) and human capital exists today in Africa, and that
is the major impediment for future investments.  Private investors are,
after all, after profit and thus prefer countries with higher return
potential and greater security.  By contrast, China, the Asian Tigers, and
even India that did massive state-led investments in infrastructure and
human capital during the cold war are doing quite well in the global
capitalism today.

To sum it up, the only effective solution to structural poverty, both in the
US and in Africa - is massive state-led investments coupled with strong
anti-corruption and aggressive cultural modernization policies - akin to
those under state socialism in Eastern Europe and China.  Everything else is
a band aid, feel-good charity.  Unfortunately, such a solution is rejected
by both, neo-liberals and the populist/culturalist left.

Wojtek