At 11:10 PM 3/6/2008, Medema, Steven wrote: >[Posted on behalf of Warren Samuels.] >What is in effect common to both of >them is the need for a strategically placed "class" who needs, or says >they need, a larger slice of the pie, through, e.g., a tax cut for some >and not for others. In this country this class has been the owners and >controllers of firms (after Berle and Means)--"private" capitalists; in >the former Soviet Union, the class was comprised of state capitalists. >The irony of part of this, and of the rhetoric of elections here, is >that our history, e.g., in Massachusetts Bay Colony, commenced in a >conflict between religious fundamentalists and traders, and that since >then, with variations in the "family values" and the domains of the >powerful, the conflict has continued. We can take this even further back in history, because I cannot help reflecting that this is exactly what Aristotle says. For Aristotle, any divisions of rewards from a common fund, such as the body politic or a firm, will be based on the contributions of each member to the firm or the fund and to the "merit" associated with each contribution. However, "merit" is determined not "economically" but culturally, ?for democrats identify it with the status of freeman, supporters of oligarchy with wealth (or with noble birth), and supporters of aristocracy with excellence.? Since it is cultural, these evaluations are subject to change; the labor of CEOs, for example, is valued today at a much different level than what it was even a generation or two ago. Aristotle discusses this under the rubric of distributive justice, a topic which more or less disappears from marginalist economics, since such economics conceives of everything is terms of a series of exchanges (with man and nature commodified as labor and real estate), and thus falling under the rubric of commutative or correcti ve justice; there is no room left for cultural questions or questions of distributive justice. However, there are legitimate grounds for calling that description into question. This question, it seems to me, must be answered prior to accepting Pat Gunning's description of the market. And by the way, I don't think Aristotle gets all the credit he deserves as an economist, and many of the categories he developed have been rejected outright, such as the distinction between natural and unnatural exchange. However, what strikes me is that this distinction fits the sub-prime crises to a T, and even provides some tools by which to understand and analyze it. Most students of economics believe it is a science that dates back to the 18th century, and history books have, at most, a chapter or two on any prior period. In doing so, we may have stunted our understanding to the subject. John C. M?daille