Free market, not Capitalism (Re: In the Beginning was the Command Line)

[cbbrowne-HInyCGIudOg at public.gmane.org]

> On Wed, 10 Dec 2003, JoeHill wrote:
> >The problem really isn't that Capitalism is a totally free market, as you
> >seem to be hinting at, it's that it is in fact *not* a free market. It
> >concentrates power around those who *have* capital, and therefore works
> >against the free flow of trade, and also against innovation.
> 
> 100% agree. 
> 
> IMHO, ideally economy should based on effort, not capital.  This will
> work well with free market. In fact, I think a economy based on effort
> will be an utopia. Unfortunately, effort is hard to measure.
> 
> It is true that there is small correlation between effort and gaining
> capital. That's why controlled capitalism can work, albeit just Ok.

The _grand_ problem around the world that keeps coming back, over and
over, is that of "land reform."

Communism shows off two notable approaches; when land is held by the
state, it is either _essentially_ owned by the top politicians, or,
instead, by _nobody_.  In the former case, we observe _spectacular_
corruption; in the latter, we observe the "tragedy of the commons"
problem, where the land is likely to essentially get "raped" because it
is in everyone's interests to get as much personal benefit out of it as
possible.

The recent situation in Zimbabwe showed off that it is really
problematic to try to implement reforms.  It seems reasonable that there
ought to be _some_ way for the common people of that country to somehow
participate in owning parts of their country.  But seizing capital from
one group and trying to redistribute it tends to turn out badly.  (And
attracts politicians with sticky fingers that will redistribute to their
cronies.)

The situation since Perestroika, in the former USSR, was similarly
troublesome.  What would have been RIGHT would have been to somehow try
to divide up the land and the state-owned businesses, and for each
citizen to get a share in that.  What happened instead was that cronies
of the former rulers got control of it all, arguably worsening things.

Capitalism occasionally gets it somewhat right.  I saw a _fascinating_
case when working at Sabre, a former subsidiary of AMR (American
Airlines).

AMR owned 80% of Sabre, and decided to spin it all off.  They did a
_fascinating_ thing, corresponding to what I just suggested about the
USSR.  They issued shares amounting to that 80%, and distributed it
evenly to all AMR shareholders.  "For free."  In effect, a couple
billion dollars worth of stock suddenly appeared on the market, without
a single penny of cash changing hands.  I had expected some attempt at
'deal-making' that would look bizarre.  For them to "give the company
away" was quite surprising, but, at close look, very much the right
answer.

I think that is the sort of thing that should have happened in the
ex-USSR; that each citizen get 10 shares in each of the state-run firms,
to do with as they wish, and perhaps something analagous concerning land
holdings.  Since something like that did not happen, the country was
essentially given to the "mafia" sorts that own and run the companies.

One of the more interesting alternative points of view on the Vietnam
"war" was that what went desperately wrong there was _not_ a US military
defeat, but rather the fact that the government they were trying to work
with was stupendously corrupt.  At some point, it's not worth trying.
That was yet another "land reform" situation which hardly went well...

Looking back to the "good 'ol days" of North America, it was the 'land
of milk and honey' back when they were doing "land reform" where the
policy was that anyone [passing appropriate "racial profiles"...] could
claim a section of farm land.  Once they stop "making land," ownership
has a tendancy to congregate, and it is not nearly so simple for later
generations...
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