Crony Capitalism IS Capitalism

It is the only sort of capitalism that has ever existed anywhere. The people who chant, "But that's not real capitalism, that's crony capitalism!" should really be saying, "But that is not the fantasy capitalism that exists only in my head, that's real capitalism!"

[Inspired by Matt Bruenig: "Under 'crony capitalism' (more commonly referred to as 'capitalism')..."]

Knowing what is best for others

Today, I saw yet another libertarian complaint that any check on people's freedom to exchange -- for instance, mandating store closings on Thanksgiving -- is a sign that the proponent thinks he "knows what is best for others."

Ironically, this complaint came from an anarchist, who claims to know that no government would really be best for everyone in the world, despite the fact that 7.199 out of 7.2 billion of us disagree with him.

Legal holidays as a solution to a collective action problem

Many of my libertarian friends on Facebook are upset about the idea of possibly mandating store closures on Thanksgiving. But legal holidays are a pretty good solution to a collective action problem, and furthermore, there is no reason that they could not exist in ancapistan (although arranging them might be more difficult).

The fact is, however much we appreciate the market (and I do appreciate it, despite thinking it should not be the entirety of life), we all need breaks from the busyness of buying and selling. In particular, it is nice to have some breaks when (almost) everyone else does as well: that way, we can have things like family reunions over a nice holiday dinner. The difficulty comes in the fact that it only takes one defector from a general agreement that stores are closed on holiday X to begin putting pressure on every other store to open as well: after all, if they stay closed, they're losing sales to a competitor. Someone who buys a washing machine or a television set from my competition is unlikely to buy one from me the next day.

A solution to this collective action problem is to reach a general agreement that no one (or no one of some particular business type) will open for business on day X. This allows everyone a day devoted to family and friends.

Libertarians have many valid complaints about government action occurring in areas where it only makes things worse. But this is not one of those instances.

But, but… this is a *private* government!

I was talking to my next-door neighbor, in the private community I have mentioned previously, about our septic service. I said that I found it odd that the same company, X, that has the contract to test our tanks, also gets to pump the tank if the test proves pumping is needed. "It seems," I said, "as if this gives X a strong motivation to tell you that your tank failed the test."

"Yes," he told me, "I think someone on the board of the community has a close relative high up in the company X, so it was a kind of 'You scratch my back and I'll scratch yours' deal."

So… crony capitalism does not depend on the existence of the state after all! It turns out to depend on the existence of human nature, in particular, our natural inclination to do better by our friends and relatives then we do by strangers.

The most common use for invoking "argument from authority" on the Internet

Is crank self-protection. In this video a mathematician calmly explains why 0! = 1. In the comments, some crank shows up and declares the mathematician doesn't know what he is talking about, and he has offered no evidence at all. When they guy won't listen to anything anyone says, people note, "Well, every mathematician in the world disagrees with you."

And of course he rolls out... "Appeal to authority."

But when someone is so obsessed with some bugbear that he can't grasp the simplest arguments for some point, an appeal to authority is a perfectly valid move.

Jeremy Waldron on liberalism

According to Waldron, liberalism rests on "a requirement that all aspects of the social should either be made acceptable or be capable of being made acceptable to every last individual" (quoted in Liberalism, Fawcett, p. 399).

Waldron gives us two conditions joined by an "or." The first one sounds impossible to me, while the second seems vacuous: anyone can assert that everyone ought to agree with their politics, even though they do not, if only other people were reasonable.


The writing style of headlines is a frequent source of amusement. Language Log has often drawn water from this well. James Joyce famously cast one chapter of his novel Ulysses entirely in newspaper style, with many very comic takeoffs on the way headlines are written. My favorite headline from that chapter was "KMRIA," which was short for, "Kiss my royal Irish arse."

Tonight I had occasion to recall a headline I once read in a tech publication in the late 1980s: "Sun Eyes Apple Gains." (Sun Microsystems was a major computer-market player at that time.)

Imagine if we could send messages back in time, and we sent that headline to someone in 1960, and asked them to guess what it meant.

Why I try to explain how historical investigation actually proceeds

I posted a quote about the vitality of the High Middle Ages. The person quoted, Robert Bartlett, is Professor of Medieval History at St. Andrews. The book I am quoting won a top history prize. He has written several other books on the Middle Ages, and produced a number of BBC documentaries on the period. And he has spent the last 40 years of his life studying this period. He has spent that time pouring over original documents from the era, and tracking the work of other historians working on the era and of archaeologists excavating the period. He almost certainly can read original documents in at least Latin, middle English, old French, and Italian.

He notes that the High Middle Ages were a period of intense creativity. After I posted that quote, several commenters showed up. One says that he prefers the view of the Middle Ages that he learned when he was young. But this view did not change because, with a given set of facts, historians simply decided to put a different spin on them. Historians do not start with facts, they start with evidence, and deduce the facts based on that evidence. And their understanding of what the facts were has changed based on a wealth of evidence about that time.

Another commentor asks why, if the High Middle Ages were really so vital, did they simply accept what Aristotle had written centuries before on his authority? The answer is that they did not do so. Aristotle's works were lost to Western Europe for many centuries. But as soon as they were rediscovered, although he was recognized as a genius, his works were being critiqued and his conclusions modified. For instance, Buridan and Oresme developed a new theory of motion, that essentially was a halfway point between Aristotle's theory and Newton's. In fact, the Scientific Revolution was well underway in the High Middle Ages. (See, for instance, Grant's The Foundations of Modern Science in the Middle Ages: note that I am not here citing some fringe work putting forth a questionable thesis like a book that claims the Chinese discovered America: this is a standard work assigned in advanced history of science classes around the world.)

But if that is true, then what happened? Well, it was a little thing called the plague. Europeans in the Late Middle Ages had little attention to devote to science, as they were quite busy dying in droves. by the time you're up recovered, there were "new men" on the scene: the humanists. They reacted against the learning of the High Middle Ages -- not without some justification, as no age is perfect and every one has its characteristic errors -- but, as with most reactions, they went too far. They threw out the baby with the bathwater, and said we must start over again from the Greeks and Romans. So Galileo had to reinitiate the mathematization of physics, which had already been occurring in the Middle Ages. Descartes had to reformulate "Cogito ergo sum," which had already been formulated in the Middle Ages. Napier had to rediscover logarithms, which had already been discovered in the Middle Ages. Francis Bacon had to reassert the importance of empirical investigation, which had been pointed out centuries before by Roger Bacon.

With the Protestant Reformation and the political movement led by the philosophes against the Catholic Church (and by the way, Samson, "philosophes" does not mean the same thing as "philosophers"), this history became politicized. It served the interest of both groups to portray the Middle Ages as a period of unbroken intellectual ignorance. And so arose the myth of the stagnant Middle Ages, which 100 years of historical scholarship has barely been able to budge in the popular imagination.

But back to my original topic: it is the popular misunderstanding of what historians do that leads my commenters to reject their findings based on what they learned from a high school textbook or a TV show featuring Neil deGrasse Tyson. If the facts are simply what is written in old books, and all historians do is invent interpretations for them, then why can't I invent my own interpretation?

But that is not at all how historians work. What was written down at some time may be self-serving propaganda, mistaken memories, or simply a lack of understanding on the part of the writer of what was really occurring. Historians use this evidence that did survive to ferret out the facts of a past that has not survived. Augustus claimed that he was restoring the Roman Republic, but we know that he in fact was ending it, not because of what was written at the time, but because of what historians have concluded based on the evidence surviving from that time. The claims of Augustus were propaganda.

Imagine someone rejecting all of quantum mechanics, because in school he had learned the Bohr model of the atom as a little solar system, because he learned it in school, and he really likes it. Surely, anyone who is passingly familiar with modern physics would tell him, "But there has been a massive amount of evidence unearthed that demonstrates that that model is too simple!"

But, when it comes to history, the idea that it is merely the historian's interpretation of "given" facts blocks such humility when confronted with new historical findings.

Those dreary, stagnant Middle Ages

"and from the 11th century until the slump and crisis of the 14th and 15th centuries stretch the High Middle Ages, and epoch of economic growth, territorial expansion and dynamic cultural and social change.

"The vitality of European society between the late 10th and early 14th centuries can be seen in many spheres of life. The scale and speed of production and distribution were transformed: the population grew, the cultivated area expanded, urbanization and commercialization restructured economic and social life. Alongside the spread of money, and of banking and business devices, there developed in some areas a level of manufacturing activity that had never previously been attained. The same creativity is found in social organization. in many areas of life fundamental institutions and structures were given their decisive shape in the centuries: the incorporated town, the university, central representative bodies, the international orders of the Roman Catholic Church--all date from this epoch." -- Robert Bartlett, The Making of Europe, p. 2

Old Reviews Discovered Online

While compiling a book review resume, I found online versions of reviews of mine of two books on Galileo, and one on Kepler.

Practice and science

Ken B., this may make clearer what I have been saying about the relationship of the historical investigation and practical concerns.

Imagine that I am motivated to study computer science in order to get a high-paying job, or in order to impress the smart girl in my computer science class. While one of these factors may motivate my study, it should be clear that neither my plan to get a high-paying job or my dream of dating the girl are any part of computer science itself. And if I actually want to get the job or date the girl by this means, at some point I had better stop paying attention to the job market or the girl and start paying attention to computer science.

So it is with history: of course, an historian may be motivated to study some episode in the past because of some present concern. But if that historian actually wants to understand what occurred in the past, at some point, he must set his concern with the present matter aside, and focus upon the past.

Formalizing Fukuyama

Fukuyama posits a tripartite model of good government: it balances a strong state, the rule of law, and democratic accountability. It seems we might make a trigonometric model of government types to formalize this. We take the element of the three that is strongest, say, the rule of law, and make that hypotenuse. Then the relative strength of that factor and the two remaining ones can be expressed with the trigonometric functions. So we could say, for instance, that the sine of mainland China is much greater than that of Nigeria (depending, of course, on which other leg we put a strong state and which democratic accountability).

And, of course, if we venture into generalized trigonometry, we can even drop the requirement that we pick out a hypotenuse, and deal with all possible relationships between the three factors.

In any case, that is what I woke up thinking about this morning

Sometimes, you just haven't been noticed

I just found 19 unposted comments in my queue. For some reason, some comments get placed in my spam bucket instead of my inbox, and I only see them when I go into Blogger. And how often I do that variously enormously based on my schedule: today, for instance, was the first time in at least a week I got a chance to do this.

But it does make for amusing moments: today I discovered that "Robert," responding to my post discussing Bob Roddis's comments at Murphy's blog (so I am assuming "Robert" is Roddis) had an entire argument with me, in which he became increasingly angry, and finally wound up calling me a "pathetic piece of sh*t," without my knowing he had ever posted anything.

The disturbed are perfectly capable of working themselves into a rage all on their own, without any involvement by a second party.

For your reading pleasure

A great post from Adam Ozimek.

Mobile web versions

There must be rooms full of executives who sit around and declare, "I know what mobile users of our website want: A really half-assed version of the site with most of the features missing!"

The art of the book review

1) You will have many thoughts about topics brought up in the book, pet peeves about what the author claims, and opinions on the topics he discusses. These are an important part of your review, and give it its unique flavor. But your main job is to convey to your readers a sense of the book. Your unique insights on its subject matter should be like spices in a stew, and the bulk of your concoction should describe the book.

My favorite book reviewer who flouted this principle was Michael Oakeshott, who, when reviewing a book on topic X, would often spend the first 10% of his review noting that the author addresses X, the next 80% offering his view of X, and the last 10% discussing how the author's view fell short of his own.

But Oakeshott was a genius, and what he had to say on a topic was often more interesting than what the author under review had to say. We mortals should spend more time describing the book itself.

2) The table of contents is your friend! Keep referring to it. It will help structure your review, and alert you to important sections of the book you might be neglecting.

Counter-Factual History

Reader Ken B. is puzzled: "I don't see how you can deny that without denying the use of historical counterfactuals in toto."

First of all, to be very clear, no one is "denying the use" of anything in what follows, or in what went before. When I noted Fukuyama's remarks about "hijacking" the course of events, I was not trying to say he can't write like that: I was saying he is not writing as an historian when writing like that.

And in what follows, I draw heavily on Michael Oakeshott. He was once asked, by my PhD advisor, David Boucher, if his ideas meant it was illegitimate for historians to write certain things. Oakeshott responded that he had no interest in telling historians what to put in their books. What he was (and I am) interested in is conceptually identifying a certain attitude to the past we can term "historical."

And this is a very important point: Oakeshott made clear that there are pasts besides the historical past, which he identified as the past investigated in terms of what really did happen. A significant and different past he called "the practical past": this is a past from which we draw lessons concerning our present conundrums. Here are some things Oakeshott says about the practical past, all from his last work, On History:

"There are some well-known items which are so often used in the world outside that they may be said to be on permanent loan to the present of practical engagement. Here are Cain and Abel, Moses, Horatius, Caesar crossing the Rubicon, Athanasius at Nicaea, Canute on the seashore, King Arthur, Wilhelm Tell, Luther at Worms, Nelson putting his telescope to his blind eye at Copenhagen, Robin Hood, Captain Oates, Davy Crockett, and here is Colonel Custer making his last stand." (p. 44)

"Sometimes a search of this storehouse will you hold something more closely and usefully linked to our practical engagements. It may disclose a purported authority for doing what we want to do, a precedent for taking a certain course of action, a warning or encouragement...

"In short, the contents of the storehouse are altogether different from the recorded past of performances, artifacts and utterances, in which in historical inquiry begins. It is not a collection of exploits but of emblems; not evoked in the procedure of critical inquiry into the authentic character of a not-yet-understood survival, but merely recalled as unproblematic images; and valued, not for an historically understood past which may be inferred from them, but for their present usefulness." (p. 45)

"this collection of symbols is valued in respect of the support it may give to what it is recognized to be a desirable present a practical engagements, and what it is found to be valuable we may say that 'history is on our side.'" (p. 47)

"What I have called a practical past is, then, a present of objects recognize to have survived. It is an indispensable ingredient of an articulate civilized life. But it is categorically distinct from both the survivals which compose the present of an historical enquiry and from an historically understood past which may be inferred from them." (p. 48)

Once one understands the distinction Oakeshott is making, it is clear that counter-factual "history" is actually an element of the practical past: "If only Chamberlain had taken on Hitler earlier, World War II could have been avoided." This is trotted out repeatedly as a lesson for facing down some current dictator. But it is certainly not the conclusion of any historical investigation, since there is no historical evidence for events that didn't happen! That firmness on Chamberlain's part would have stopped Hitler is a practical, not a historical, judgment.

And, again, this does not mean that no historian should put such a judgment in her books!

Can liberalism tolerate non-liberals?

"What if modern people opted in large numbers to be bigots and racists?

"Bouglé turn to that question in 'The crisis of liberalism' (1902). The persistence of intolerance had come as a surprise... Dogmatic or sectarian relapses looked at worst as temporary, unsustainable deviations from liberal modernity's happy path. Recent trends had woken liberals with a jolt. They were at a loss. Should they open-mindedly 'tolerate intolerance' or use the powers of state to curtail racial and confessional prejudice?" -- Edmund Fawcett, Liberalism: The Life of an Idea, p. 168

The problem is, of course, unsolvable so long as liberals cling to the notion of liberalism being a "neutral framework." Liberalism is, in fact, its own value system, down on all fours, competing with every other one.

Repeat after me: the government has no control over who pays taxes

Kevin Drum makes a common error:

"Does it matter that the working class barely pays for most of these programs in the first place, since their federal income taxes tend to be pretty low?"

The government can control from whom it collects taxes. It cannot control who pays them. That is determined on the market. As Caplan puts it, "Tax incidence depends on supply and demand elasticity, not legislative intent."

To take a simple example: Imagine you are a billionaire with a large domestic staff. You want to trust them, so you pay them a wage above the prevailing one. You're planning on giving them all large Christmas bonuses, when you read that a new tax law aimed at high CEO pay is going to cost you $50,000 this year. That happens to be the exact amount you were going to give out in Christmas bonuses, and so you decide simply to skip the bonuses this year.

The government purportedly aimed to tax high-wage CEOs, but in this particular instance, the entirety of the tax burden actually fell on low-wage domestic workers.

Or perhaps it did not even stop there: Perhaps your servants would have given their Christmas bonuses, if they had received them, to homeless shelters around the city. If that had been the case, the burden of the tax actually winds up falling on the homeless!

One consequence of understanding this is that one realizes our current, Byzantine tax code is absurd, and benefits no one but H&R Block and its ilk. Whatever level of resources the government is going to extract from the economy, it should be done with a minimum of fuss and bother. That is why I favor taxing land: you can't really hide it, so tax evasion and all the resources devoted to detecting tax evasion, disappear. And taxing this way would not pick on landowners, since the actual burden of the tax will get passed on by the market to wherever it winds up getting passed on to.

Pages befuddlement

Pages does not seem to be able to get me a word count on my documents. How in the world is any professional writer supposed to use a word processor that does not give word counts? Basically, every book review I have ever written, I start out by writing one and a half to two times my maximum word limit. The last week of work I spend constantly trimming out and refining what I've got. I'm going back and checking my word count every half hour or so, to see how close I am getting to my goal.

Weird bug convergence

I have been using Apple's program Pages lately in an effort to make my Chromebook work as an editing platform. (Google Docs simply does not cut it: it wipes out all memory of MS Word styles when you convert a file to Google's format, and messes with the existing formatting tremendously.)

Not bad, so far: I am very happy with the fact I can now edit on my iPhone. But as a software engineer, I have found one great puzzle: I was always annoyed that whenever I tried to re-format a paragraph in my "blockquote" style, MS Word would "leak" the style change over into the previous or subsequent paragraphs. Bizarrely, Pages does the exact same thing!

Perhaps, in their effort to capture MS-Word-style logic, Apple engineers also imported the bug in MS Word?

The course of events

From a historical perspective, there is no "course of events," other than what actually occurred, to be "interfered with" or "hijacked" by some "intervention." As Oakeshott noted, the actions of some monarch or pope were not "interferences" with the course of events: they were the course of events.

Generally when you see phrases like this, you are in the presence of partisanship. So, when Fukuyama says that democratic movements were "hijacked" by nationalists, what he means is that the actions of the nationalists are unfortunate from his point of view. When a modern libertarian claims that Progressives "hijacked" liberalism, all it really means is that he wishes liberalism had developed differently.

A surprising mistake from Fukuyama

"Having sat out World War I, [Japan] experienced a vigorous period of economic expansion..." -p. 347

In fact, Japan declared war on both Germany and Austro-Hungary in August 1914. It sank an Austro-Hungarian ship in the Far East, and seized several German territories in the area. In 1917, at the request of Britain, its navy ventured all the way to the Mediterranean, and provided escort services for troops of the Triple Entente. While this in no way constitutes participating to the extent that the major combatants did, it is also hardly "sitting out" a la Switzerland.

A model does not necessarily become more useful by being made more realistic

By default, Google maps on my iPhone offers me a satellite picture of the place I am trying to get to. I find this a ridiculous default choice: I am not interested in how tree covered the property in question is! I just want to see black lines on white space so I can figure out how to get there. And yet there is no doubt that the satellite view is more realistic than a typical street map.

Morgan on the economist's tacit knowledge

"Model-making is a skilled job. Perhaps it is not yet evident, but will become so in the chapters that follow, that learning how to portray elements in the economy, learning what will fit together, and how, in order to make the model work, are specialized talents using a tacit, craft-based, knowledge as much as an articulated, scientific, knowledge. It is not easy to pinpoint in any general way the skills of articulation and construction, or to see how economists acquire them except through apprenticeship." -- Mary Morgan, The World in the Model, p. 15

I'm with Fukuyama on this point

In a discussion of how the American system of checks-and-balances and federalism produces wildly inefficient legislation, Fukuyama notes that: "Congress created fifty-one separate programs for worker retraining, and eighty-two projects to improve teacher quality." (p. 497)

I have been making this point even before reading this latest work of Fukuyama's. But he has an interesting perspective on why this occurs.

The problem appears to me as a multiplayer prisoner's dilemma (see Schelling). To take an example: whatever level of taxation one prefers, from zero all the way up to 90% tax brackets for the very rich, it is surely preferable for everyone (except tax accountants) that the level of taxation that winds up being chosen be collected as efficiently as possible. You might hate paying 40% of your income to the taxman, but if you were going to do so, surely you would like to do so without having to undergo a lot of work on your own part in order to pay that tax, right? But the American political system, as it operates today, seems designed to collect 40% of your income in the most complicated way possible. And as I have noted in reference to the ACA, we could have gotten much more widespread coverage with a bill that simply said, "If your income is below X, The government will pay for your health insurance." Even if you oppose all welfare redistribution policies, I think you ought to prefer one that redistributes with a minimum of bother, rather than one that redistributes with a maximum of bother.

My own preference would be for worker-retraining and teacher-improvement programs to be implemented at a much more local level (the importance of local knowledge: see Hayek, as well as Catholic social thought on subsidiarity). The federal government should intervene in these issues only to the extent that it redistributes some tax revenues from the richer to the poorest states, to allow the poorer states the resources to implement these goals. But if these things are going to be handled at the federal level, I would much prefer Congress authorized a single agency to deal with each, and empowered that agency to do so.

Fukuyama contends that these legislative Rube Goldberg devices we create arise primarily from the way our system of checks-and-balances and federalism have worked out in practice: multiple branches, agencies, and levels of government are involved with almost every political issue in the United States. Rather than working to limit government, as the founders had intended, this multiplicity of authorities has served to create a byzantine government.

Hmm, I wonder if anyone has recently authored a book contending that the rationalist design of the American founders could never have worked out in practice in they way they intended it to?

Anarcho-capitalists provide their own reductios of their theory

This one is from Bob Roddis, in the comment section of Bob Murphy's blog:

"What do we do about the drug problem? Answer: druggies could be prohibited from driving on private roads and entering private neighborhoods and schools.

"What do we do about the porn problem? Answer: porn producers and consumers could be prohibited from driving on private roads and entering private neighborhoods and schools.

"What do we do about the problem of religious fanatics that won’t let us smoke dope? Answer: anti-drug fanatics could be prohibited from driving on private roads and entering private neighborhoods and schools.

"As a bonus, everyone will be safe, secure and prosperous."

But, in ancapistan, every road in neighborhood will be private, so "druggies," pornographers, and religious fanatics will be prohibited from going anywhere. Which, of course, will be a death sentence for them.

So, in the new, "liberal," world of ancapistan, to do drugs, produce pornography, or be a religious fanatic gets you a death sentence. But at least you will have "voluntarily" agreed to your own death sentence.

"Everyone" will be safe, secure, and prosperous, except if the ancaps don't like you. (Note that for Hoppe, the people who wouldn't be allowed to drive on private roads would include anyone advocating democracy or wealth redistribution.)

Models *stand in* for the reality they are modeling

"Economists (just like their astronomer forebears) understand that a model stands in for their economic universe to enable them to explore certain properties of that world represented in the model." -- Mary Morgan, The World in the Model, p. 33 (emphasis mine)

The models of physics are no different: they stand in for certain properties of the real world, and allow us to study them in abstract isolation.

Models are like caricatures

Mary Morgan, in her book The World in the Model, likens models to caricatures, and offers the following graphic during her discussion:

That this process of caricature is interesting and informative I do not doubt: I am no critic of caricatures or of models! Seeing Louis Philippe as a pear, and seeing the world as simply an interrelated system of mathematical equations, are each interesting perspectives.

But if someone asks me if caricature of Louis Philippe as a pear is perhaps not the actual cause of the real Louis Philippe, who is a sort of cognitive illusion, I must admit I am so flabbergasted that I hardly know how to reply.

I spent several years modeling options in the financial markets. The programs I wrote to do that made a fair number of traders a good deal of money. but imagine their surprise if, one day when their actual trading lost money, I told him that this was of no regard: my models were the real thing, and those models had made money, and the traders' feeling that they had lost money that day was merely a subjective experience.

Historical understanding

"It is not the human conduct must in principle be taken to occlude regularities (other than self-imposed circumstantial practices), or even that there may not be some brooding providential Intelligence that accounts for them; The point is that these considerations do not mix with and cannot take the place of an historical understanding concerned with what was actually the case, there and then, in terms of situations composed entirely of mutually related occurrences inferred from record." -- Michael Oakeshott, On History, p. 65

I make note this for the reason that it demonstrates that for Oakeshott, as for Collingwood, history is intelligible in and of itself, without the application of further laws or theories.

Fukuyama gets Marx wrong

"Capitalist use of technology would extract surpluses from the labor of the proletariat, leading to greater concentration of wealth and the progressive immiseration of workers. The bourgeoisie who ran this system could not, despite their wealth, consume everything that it produced, while the proletariat whose labor made it possible were too poor to buy its products. Ever increasing levels of inequality would lead to a shortfall in demand, and the system would come crashing down upon itself." -- p. 436

Thomas Sowell, who wrote his dissertation on Marx and published an entire book on Marxism, gives the true picture:

"Crises are inherent in capitalist commodity production because producers cannot accurately predict the demand of the consumers or the supply of other producers...

"Neither underconsumption nor a permanent 'breakdown' plays any role in this picture..." -- Marxism, p. 92 (emphasis mine)

Marx and Engels in fact ridiculed underconsumptionist theories, by noting that the bust occurred precisely when wages were at their highest. Their theory is one of coordination failure, not of underconsumption.

It is still the "end of history"

While Fukuyama has toned down the extreme claims he was making in his book The End of History, he has not abandoned the thesis. History has still been on a "road" democracy. Societies are still judged by whether they have achieved "stable" democracy. (Which, of course, being stable, will mark the end of history for that society.)

Western Europe is still the goal for him (sometimes he phrases it "Denmark"), and everyone is, or at least should be, trying to get there.

More Fukuyama on China

"In the hands of good leaders, such a system [of autocratic rule] can actually perform better than a democratic system that is subject to rule of law and formal democratic procedures like multiparty elections. It can make large, difficult decisions without being hampered by interest groups, lobbying, litigation, or the need to form cumbersome political conditions or educate the public as to their own self interest... So too with China: its post-1978 performance has focused on widely shared goals such as economic growth, stability, and the broad provision of public services. Deng Xiaoping and the leaders of the party who followed him understood that the party's survival would depend on legitimacy, which could no longer rest on ideology but would have to be based on their performance in governing the country." -- p. 383

The "Fall" of the Roman Empire

For a long time, people in the west made a big deal of the date 476: it marked the "Fall of the Roman Empire." But:

"Fra gli uomini del V secolo, invece, essa passò quasi inosservata. L'impero, infatti, era in mano ai barbari già da tempo. Barbari riempivano i vuoti lasciati dai romani nelle campagne è nell'esercito, collaboravano all'amministrazione dello stato, comandavano le truppe imperiali. Alcuni, potentissimi, sposavano figlie, nipoti, sorelle di imperatori, altri facevano da tutori, cioè da guide e protettori, ai piccoli principi romani destinati a regnare." -- Il racconto dello storico

"For the people of the fifth century, instead, it went almost unnoticed. The Empire, in fact, had been in the hands of the barbarians for some time. Barbarians had filled the gaps left by Romans in the country and the army, collaborated in the administration of the state. Some, powerful, had married daughters, nieces, and sisters of emperors, others had been tutors, in other words, guides and protectors, of young Roman princes destined to rule."