Monday, 28 March 2011

Wealth creation outwith Trafalgar Sqaure

Ever since I read George Woodcock’s history of Anarchism years back, I’ve always had a soft spot for the Angry Brigade, the closest Britain ever had to an anarcho-terrorist organisation.

To be honest it's the name that gets me. Like there's no jutting German sounds as with the Baader Meinhof lot or superficial references to theory as with the Red Army Brigade, rather, our anarchists were angry, GRRRRR! The name was even more ace because it was as redolent of the Monty Python shows then appearing on the telly for the first time as you could hope for or at least it was until Monty Python went and destroyed any hint of credibility any hard left/anarchist group, party or faction then or now might ever aspire to might with their satire of the People's Front of Judea and the splitters that made up the Judean People’s Front, etc., in Life of Brian.

What minded me of all this was two things. One was listening to some no-mark academic witter on terribly seriously about the competing ideological positions of the however many dozen anarchists that took part in the violence seen in London over the weekend. Now calling some bod from Swansea a no-mark might seem a tad harsh (hang on he’s fae Swansea, that shit stain of a clinging to the arsehole of Britain place, so no it probably isn’t really), but seriously, why does less violence than a gaggle of boozed up fuck nuggets inflict on most North East English urban conurbations of Friday and Saturday night warrant in-depth theoretical analysis? Could he no have just said “splitters” and be done with it? (Sides his reference to “Class War” also struck me as being more a claim than a piece of substantiated insight).

Anyhoo, my take is that the police, who outnumbered the anarchists gawd knows how many to one, were feart of getting caught on camera walloping perfect innocents in the face for the umpteenth time so let them get on with things in a “this will generate a dod of politically convenient negative publicity just in case we get caught clubbing people in wheel chairs” type style. Plus, I reckon some radio 4 editor had a flashback to their undergraduate politics degree and reckoned briefly taking the anarchists seriously would generate 5 minutes of air time in line with the usual BBC line of obsessing over things gone wrong, which here meant public spending cuts prompting politicised social unrest.

All that’s just a pile of shite but. The other, much more meaningful prompt was given by a fabulous person querying the nature of wealth creation, which gets straight to the point i.e. the fundamentals of how shit is. If we go by Adam Smith, wealth creation derives from successfully combining the factors of production, which would be materials, labour, land, and technology in such a way as to manufacture a thingymajig that can be sold for a profit or at least more than was paid out to buy the various bits and bobs involved in the first place. Personally, as someone who thinks Schumpeter’s model of economic change and the business cycle is the dog’s, I’d also include entrepreneurship, no not Dragon's Den rather the gathering together of the aforementioned factors and their coordination into a productive process, as an additional and vital factor of production.

A simple summary of this would be wealth creation involves taking 2 and 2 and making 5 and in the process generating more jobs, demand and tax revenues than would otherwise have been the case. However, it’s the opportunity to make a profit that’s key because it presents an ongoing incentive to get entrepreneurial on everybody’s ass. Now am sure an anarchist would challenge this view with idealistic shite about other incentives and methods for creating things, except to do so would be to miss the fucking point, which is making profit is only ever one incentive, not the only incentive, and one that shit like history proves happens to work quite well a lot of the time on an ongoing basis.

Rather, the only debate worth having in my view, is identifying when wealth creation stops and economically destructive activity takes over. Like the biggie here for me is economic rent and rentier institutions. By contrast with wealth creation, which is about adding to the sum total of shit i.e. co-ordinating the making of something that would not otherwise have existed, rent is about shit like having to bribe/pay a tax to get something that’s already been made through a checkpoint. Or, it could be the externalities and transaction costs associated with financial products we all have to pay as a result of pointless speculation in oil, credit default swaps, currencies and so on e.g. shit that does fuck all other than generate volatility (that in turn incurs costs to hedge against) and/or costs.

So yeah, rather than some wank about how profits are derived from exploitation in a wankfully stupid moralising notion that ignores how Marxist theory doesn’t even begin to approach the reality of the modern service sector let along the economy as a whole, I reckon where wealth creation ends and rent begins(and merits being taxing like an utter muthafucka) and developing a view as to at what point the concentration of wealth in a minority of hands becomes a bad thing, is the only debate that matters.

P.S. This bloke here was a real anarchist. It's up to the reader to decide whether that means fuck all.