scorch
Legalize Pot
thats way too much to read.
Which Market System Is The Best?
- Thread starter MrPresident
- Start date
allan2
Gone Fishing
"I am not sure if you know what a natural monopoly is. A natural monopoly is something like a water company supplying all the water to one place. It is a monopoly not because of the consumers like that company but due to the huge start-up costs of laying the pipes etc. The same could happen in any industry where due to the high start-up costs it is only profitable for one company."
I guess there is a technical term in economics--"natural monopolies"--that describes what you do here. I don't have a formal background in economics, so I came up with an identical term independently. I had in mind things like Bill Gates' seeming monopoly on operating systems (which isn't really a monopoly, but it has approached this). Even amidst the current market supremacy of Windows, there still exist other OSs like Linux and such, and if consumers find Windows either unacceptable or too high-priced, such other OSs will grow to meet consumer demands and concerns--and computer manufacturers that don't go along will suffer losses to their competitors that do. Gates may have what is approaching what I'd call a "natural monopoly" (the way I was using the term in my post), but if the need arises to usurp him then he will be usurped, without any action of the government necessary.
As for utilities like water, while I'll allow that they are somewhat special cases (i.e. building competing infrastructures could be impractical), building a well for personal use isn't that expensive (relatively), and could remain the last resort of someone who feels victim of excessive overcharge of such a monopoly.
That said, I don't mind municipalities providing services like water and electricity based on user fees, or setting up a company to oversee such things (well, if someone wants to ATTEMPT to compete, and can, they should be able to). My libertarianism doesn't go that far. Most of what I tend to oppose is on the national level anyway. Cities by nature work on the basis of some communal functions--those who want to provide for these basic services for themselves independently can dig a well and build windmills or solar panels (they may have to move to the country to have room to do this though)....
On the other hand, such forced monopolies as would exist on a national level would make the mobility alternative for consumers far more difficult. It's relatively easy to choose the city where you will live, rather than the NATION where you will live. Thus I don't see municipal services as MONOPOLIES in the same way....
I guess there is a technical term in economics--"natural monopolies"--that describes what you do here. I don't have a formal background in economics, so I came up with an identical term independently. I had in mind things like Bill Gates' seeming monopoly on operating systems (which isn't really a monopoly, but it has approached this). Even amidst the current market supremacy of Windows, there still exist other OSs like Linux and such, and if consumers find Windows either unacceptable or too high-priced, such other OSs will grow to meet consumer demands and concerns--and computer manufacturers that don't go along will suffer losses to their competitors that do. Gates may have what is approaching what I'd call a "natural monopoly" (the way I was using the term in my post), but if the need arises to usurp him then he will be usurped, without any action of the government necessary.
As for utilities like water, while I'll allow that they are somewhat special cases (i.e. building competing infrastructures could be impractical), building a well for personal use isn't that expensive (relatively), and could remain the last resort of someone who feels victim of excessive overcharge of such a monopoly.
That said, I don't mind municipalities providing services like water and electricity based on user fees, or setting up a company to oversee such things (well, if someone wants to ATTEMPT to compete, and can, they should be able to). My libertarianism doesn't go that far. Most of what I tend to oppose is on the national level anyway. Cities by nature work on the basis of some communal functions--those who want to provide for these basic services for themselves independently can dig a well and build windmills or solar panels (they may have to move to the country to have room to do this though)....
On the other hand, such forced monopolies as would exist on a national level would make the mobility alternative for consumers far more difficult. It's relatively easy to choose the city where you will live, rather than the NATION where you will live. Thus I don't see municipal services as MONOPOLIES in the same way....
Greadius
:yeah:
Perhaps if you took the time to read it you'd understand why your first statement was naive.
Good job Allan, saved me about 20 minutes of typing
allan2
Gone Fishing
"thats way too much to read."
Who? Me? I've seen posts over in the Arafat thread that are WAY longer than that one.
Come on, you can do it!
Who? Me? I've seen posts over in the Arafat thread that are WAY longer than that one.
Come on, you can do it!
Scorch wrote:
thats way too much to read.
It's certainly unusual when someone around here writes longer posts than I do...
Allan2 wrote:
Sorry it took me a while to get back to you Allan -
"However, while a committed free-marketer, I do not subscribe to lessez-faire capitalism, because:
"1. To quote the noted American Conservative writer, George Will: "Capitalism is a government program." Government facilitates capitalism by creating a level (legal) playing field,"
This is a minimum function of a government anywhere: provide courts, and the rule of law (one law for everyone). I don't see this as extraneous intervention--just one reason that government is necessary.
In essence, you're right. Government is the playing field.
"guaranteeing stability in the banking and investment sectors,"
Insuring banks? Not necessarily a role of a bare MINIMALIST government, but I have no trouble with government doing it. SOMEONE should do it anyway. If government stopped doing it though, insured deposits have become so much of an industry standard that someone else would do it--because no one would make deposits in an uninsured bank these days.
The FDIC in the U.S., while not a manditory agency, does provide critical insurance services for retail commercial bank deposits (up to $100,000 USD) and through this government provides security. This is a part of the Depression-era legislation that did much to shore up a very creaky American financial sector in the 1930s and early 40s. I'm not so sure "someone else would do it", because after all banks existed for centuries without it and many banks resisted government regulation (including the FDIC insurance) when they were first proposed.
"prosecuting frauds (look at Marty Frankel), providing general security,"
Both minimum roles of government. Laws against fraud and violence, and maintenance of armed services. Again, nothing extraneous about this.
Minimal, and quite necessary. But as Enron shows, it's not a simple matter of catching bad guys, it's also about maintaining and updating laws constantly to address the needs of changing trends, technologies and practices.
"providing incentives for targetted economic classes or sectors,"
This is where you start getting into favoritism and corruption. Whom do you target? Which industries do you subsidize? This is stuff we can do without.
There are legitimate times and economic areas (new growth industries, etc.) where a country may want to provide some sort of economic incentives. After World War II the U.S. provided massive economic aid to Western Europe not only in the form of grants and loans but as well through allowing critical European industries to erect trade barriers against American products. The last of these ended in I believe 1971, during the gold/Dollar standard dispute. It was clearly necessary, and the American economy could afford for most of that time to absorb the short-term losses. Emerging Markets also encourage such targeted economic efforts, not only in terms of abroad (Africa, Southeast Asia, etc.) but as well increasingly internal Emerging Markets are developing as wealthy countries attempt to develop their own more backward regions economically. In a perfect world everybody would be equal and prosperous, but it just ain't so.
"etc. Every time you see a government leader traveling abroad, you'll notice just outside camera range behind them is a coterie of business leaders, all going along on government coattails to lobby for business issues."
See how much business is in bed with government? They make up a class of conniving sycophants. Will makes this sound like there is nothing that can be done to change that fact--I don't think it's so hopeless. But people have to WANT minimum government, to deprive government of extraneous powers to sell. People like me have their work cut out for them in convincing them.
Business and government cooperation do not always add up to corruption. It's a positive thing to see the two working together, collaborating to realize whatever economic benefits and particular international relationship can bring. The role of government isn't to suppress business (or vice versa), but to but to try to provide a relatively free and secure environment in which to do business, while at the same time ensuring that everyone's rights are respected.
"2. As a few have pointed out, while business benefits society, too much of a good thing can as usual be bad. Businesses only plan according to economic quarters."
In pure capitalism with no political interference, the long-term thinking companies will be far more successful. I'm not entirely sure why many CEOs are so short-term in their thinking--I'll have to explore that more, but I don't have an MBA--but maybe part of it is that government provides them too much security (bailouts, subsidies, etc.) to make long-term thinking vital; or maybe it's the complicated tax code that actually favors losses and inefficiency in business; or maybe the political playing field changes so much (shifting political alliances and favors, etc.) that it is really quite difficult to plan long term, depending on the nature of the industry and political involvement.
Not sure what you would mean by "pure capitalism". It has never existed, mostly because like any ideology, it can't exist in any pure form. I am a fixed income (i.e., "bonds") researcher, and I can assure you that from Day 1 when the Dutch invented the equities markets centuries ago, there were rules and regulations laid down all over the place. Otherwise, who is ever going to invest in a security if they can't trust the issuer or broker? Government has played that critical role from the earliest beginnings of modern economics.
Why do CEOs only think in the short-term? Because in reaction to the 19th century-style of cronyism boards of most public companies, the 20th century saw the rise of what are now called activist shareholders, people who own stocks in a company but aren't getting what they consider enough information or are being ripped off. They organize shareholder revolts that force company boards to provide much more info and provide much better earnings - a great thing for investors, but a phenomenon that has forced CEOs to concentrate almost exclusively on making decent earnings for the next quarter's shareholder meeting.
But shortsightedness is not inherent to corporate heads--there are some corporations that indeed DO think very long-term (particularly in cutting-edge technology fields, but there are others too), and they do well. Of course, there is always more risk in long-term thinking and commitment, but also more potential reward....
Some indeed do, usually either privately-held corporations (which means they usually also have limited capital) or massive multi-national corporations whose org charts are so confusing that shareholders will never have a hope of understanding who to revolt against. Yes, in a perfect world companies would think in both long and short-term, but in reality (with that little thing called the human element) it just doesn't happen that way usually. There are certainly some notable exceptions, but they are indeed the exceptions, not the rule.
"It is up to government to ensure against Enron-like disasters that can have society-wide economic consequences."
Prosecute and punish "white-collar" fraud like "blue-collar" fraud, and the Enron rip-off probably would never have happened. Again, prosecuting fraud is nothing special--it is expected of even the most minimal of governments. Government should do its MINIMAL, VITAL duties much better than it does by the way (maybe if they cut out their extraneous distractions...)--and be VERY draconian in cases like these. We're talking people's life savings here....
Yup. Marty Frankel stole $200-300 million USD from small American MidWest insurance companies before fleeing to Europe. Many lower Middle Class Americans suddenly discovered that their insurance was defunct, some while they were in the middle of using it. But the problem is, as always, not only that such frauds be actively caught and prosecuted (Europe dragged its feet for a while before the Germans finally arrested Frankel) but as well keeping related laws up to date.
Allan - my lunch hour is over and I have to be productive again so I'll continue this tonight at home. Cheers!
thats way too much to read.
It's certainly unusual when someone around here writes longer posts than I do...
Allan2 wrote:
Sorry it took me a while to get back to you Allan -
"However, while a committed free-marketer, I do not subscribe to lessez-faire capitalism, because:
"1. To quote the noted American Conservative writer, George Will: "Capitalism is a government program." Government facilitates capitalism by creating a level (legal) playing field,"
This is a minimum function of a government anywhere: provide courts, and the rule of law (one law for everyone). I don't see this as extraneous intervention--just one reason that government is necessary.
In essence, you're right. Government is the playing field.
"guaranteeing stability in the banking and investment sectors,"
Insuring banks? Not necessarily a role of a bare MINIMALIST government, but I have no trouble with government doing it. SOMEONE should do it anyway. If government stopped doing it though, insured deposits have become so much of an industry standard that someone else would do it--because no one would make deposits in an uninsured bank these days.
The FDIC in the U.S., while not a manditory agency, does provide critical insurance services for retail commercial bank deposits (up to $100,000 USD) and through this government provides security. This is a part of the Depression-era legislation that did much to shore up a very creaky American financial sector in the 1930s and early 40s. I'm not so sure "someone else would do it", because after all banks existed for centuries without it and many banks resisted government regulation (including the FDIC insurance) when they were first proposed.
"prosecuting frauds (look at Marty Frankel), providing general security,"
Both minimum roles of government. Laws against fraud and violence, and maintenance of armed services. Again, nothing extraneous about this.
Minimal, and quite necessary. But as Enron shows, it's not a simple matter of catching bad guys, it's also about maintaining and updating laws constantly to address the needs of changing trends, technologies and practices.
"providing incentives for targetted economic classes or sectors,"
This is where you start getting into favoritism and corruption. Whom do you target? Which industries do you subsidize? This is stuff we can do without.
There are legitimate times and economic areas (new growth industries, etc.) where a country may want to provide some sort of economic incentives. After World War II the U.S. provided massive economic aid to Western Europe not only in the form of grants and loans but as well through allowing critical European industries to erect trade barriers against American products. The last of these ended in I believe 1971, during the gold/Dollar standard dispute. It was clearly necessary, and the American economy could afford for most of that time to absorb the short-term losses. Emerging Markets also encourage such targeted economic efforts, not only in terms of abroad (Africa, Southeast Asia, etc.) but as well increasingly internal Emerging Markets are developing as wealthy countries attempt to develop their own more backward regions economically. In a perfect world everybody would be equal and prosperous, but it just ain't so.
"etc. Every time you see a government leader traveling abroad, you'll notice just outside camera range behind them is a coterie of business leaders, all going along on government coattails to lobby for business issues."
See how much business is in bed with government? They make up a class of conniving sycophants. Will makes this sound like there is nothing that can be done to change that fact--I don't think it's so hopeless. But people have to WANT minimum government, to deprive government of extraneous powers to sell. People like me have their work cut out for them in convincing them.
Business and government cooperation do not always add up to corruption. It's a positive thing to see the two working together, collaborating to realize whatever economic benefits and particular international relationship can bring. The role of government isn't to suppress business (or vice versa), but to but to try to provide a relatively free and secure environment in which to do business, while at the same time ensuring that everyone's rights are respected.
"2. As a few have pointed out, while business benefits society, too much of a good thing can as usual be bad. Businesses only plan according to economic quarters."
In pure capitalism with no political interference, the long-term thinking companies will be far more successful. I'm not entirely sure why many CEOs are so short-term in their thinking--I'll have to explore that more, but I don't have an MBA--but maybe part of it is that government provides them too much security (bailouts, subsidies, etc.) to make long-term thinking vital; or maybe it's the complicated tax code that actually favors losses and inefficiency in business; or maybe the political playing field changes so much (shifting political alliances and favors, etc.) that it is really quite difficult to plan long term, depending on the nature of the industry and political involvement.
Not sure what you would mean by "pure capitalism". It has never existed, mostly because like any ideology, it can't exist in any pure form. I am a fixed income (i.e., "bonds") researcher, and I can assure you that from Day 1 when the Dutch invented the equities markets centuries ago, there were rules and regulations laid down all over the place. Otherwise, who is ever going to invest in a security if they can't trust the issuer or broker? Government has played that critical role from the earliest beginnings of modern economics.
Why do CEOs only think in the short-term? Because in reaction to the 19th century-style of cronyism boards of most public companies, the 20th century saw the rise of what are now called activist shareholders, people who own stocks in a company but aren't getting what they consider enough information or are being ripped off. They organize shareholder revolts that force company boards to provide much more info and provide much better earnings - a great thing for investors, but a phenomenon that has forced CEOs to concentrate almost exclusively on making decent earnings for the next quarter's shareholder meeting.
But shortsightedness is not inherent to corporate heads--there are some corporations that indeed DO think very long-term (particularly in cutting-edge technology fields, but there are others too), and they do well. Of course, there is always more risk in long-term thinking and commitment, but also more potential reward....
Some indeed do, usually either privately-held corporations (which means they usually also have limited capital) or massive multi-national corporations whose org charts are so confusing that shareholders will never have a hope of understanding who to revolt against. Yes, in a perfect world companies would think in both long and short-term, but in reality (with that little thing called the human element) it just doesn't happen that way usually. There are certainly some notable exceptions, but they are indeed the exceptions, not the rule.
"It is up to government to ensure against Enron-like disasters that can have society-wide economic consequences."
Prosecute and punish "white-collar" fraud like "blue-collar" fraud, and the Enron rip-off probably would never have happened. Again, prosecuting fraud is nothing special--it is expected of even the most minimal of governments. Government should do its MINIMAL, VITAL duties much better than it does by the way (maybe if they cut out their extraneous distractions...)--and be VERY draconian in cases like these. We're talking people's life savings here....
Yup. Marty Frankel stole $200-300 million USD from small American MidWest insurance companies before fleeing to Europe. Many lower Middle Class Americans suddenly discovered that their insurance was defunct, some while they were in the middle of using it. But the problem is, as always, not only that such frauds be actively caught and prosecuted (Europe dragged its feet for a while before the Germans finally arrested Frankel) but as well keeping related laws up to date.
Allan - my lunch hour is over and I have to be productive again
so I'll continue this tonight at home. Cheers!Part II
Allan wrote:
"3. The massive expansion of the Middle Class in the past two centuries has been largely as a result of intentional government "meddling"."
Care to elaborate? I think the middle class mainly evolved from the increased diversification of the economy (through technological progression among other things), and the increase in demand for skilled or specialized labor--and as this progressed, the creation of industries and services to satisfy the increased whims of more and more disposable income. Unions helped in some cases, IN SPITE OF early government attempts to crush them (by ignoring laws against violence in the case of strikebreaking thugs, among other things)--and in some industries they can grow without help (this seems to be happening slowly in Minnesota, with unionized retail workers--but has happened DRAMATICALLY over the years in carpentry and other crafts). The middle class happened because it WAS NECESSARY to sustain the needs of a developed economy. Remember that in those awful late 1800s, the economy was still DEVELOPING, industry was far more labor-intensive, and the agricultural sector was still very big.
The Middle Class, the beourgoisie, strictly speaking derive from the merchant class that goes as far back as civilization stretches. However, the extraordinary expansion of the Middle Class throughout Europe and North America in the 18th, 19th and 20th centuries while indeed tied to the economic effects of the industrial revolution are as well due to some critical planned elements: universal education (the spread of literacy), the guaranty of individual property rights and the creation of universal legal principals (transcending traditional feudal class and estate lines) to deal with issues like contractual obligations/rights, and the assumption by governments of responsibility for infrastructure (roads, bridges, waterways, sewers, etc.) for economic development and public health. Even as late as the mid-19th century London had occasional mass outbreaks of cholera and scarlet fever; government basic sanitation and hygene programs alleviated the conditions in which these diseases festered. In the modern West it's almost impossible to imagine an outbreak like this, thanks to government management of environmental concerns. This, BTW, is also the real beginning of what Americans like to call "Big Government", the large centralized bureaucracy that pools resources and takes over the maintenance of factors long left to indifferent local regional authorities.
That all said, I've often thought of a libertarian society as something that must be evolved into--i.e. it can only arise when conditions are right for it (just like the communists who say that society must pass through capitalism first, and claim they are the "next step" in political evolution). I.e., I look at a country like Guatemala (where I lived for a year), and say, "libertarianism can't happen here yet." Why? It wouldn't work with 1% of the people controlling 90% of the economy (the cronyism needs to be abolished there though--definitely--or the country will continue to go nowhere. But "progressive" liberal policies may be needed for a time, since unlike the US, Guatemala hasn't the size or resources to grow into a very diverse economy by itself--maybe a Latin American economic union would help this though). The economy is not DIVERSIFIED enough at the present time. I believe it is in the US though. Whether government had the MAJOR hand in this (and you can present your case for this and we can discuss it--I'll allow that some things it did may have been helpful in their time), or it evolved naturally from development and advancement, the fact remains that we are now diversified enough that we need not fear the economy falling into too few hands should the government disengage. I believe libertarianism, with its abolishment of corruption (done by making it impossible), is the next step of political evolution--and probably the final one....
First, I need your definition of a "libertarian" society. In my discussion here, though I may include American examples I am refering to all of the modern industrialized West.
Secondly, to continue your example above, the U.S. is a huge country, and as a Federal state has an extremely diverse economic past. That said, if one looks at some of the country's regions, one can see a definite government hand in the development and diversification of the economy. The American South, prior to the 20th century was an extremely simple, 3-"crop" economy based on an extraordinary concentration of wealth and economic power in the hands of a tiny elite. The British historian Paul Johnson's very brief comparison of the economies of the Union and the Confederacy in 1861 summarizes why the Southern Rebellion had a hair's breadth of a chance of success. An even smaller minority within the South's elite realized the need for development - among them Jefferson Davis - but the rest of the South's elite understood that economic develpment meant the end of their privilages. After the disaster of defeat and Reconstruction in the South, the U.S. government began a series of efforts to develop the South economically, efforts that began to bear significant fruit in the 1950s and have led to great successes like modern Houston, Atlanta and Nashville being among the leading economic centers in the U.S. today. Similarly, the American West was very heavily dependent in the early decades for strong Federal government support in the development of basic infrastructure.
"Governments need to level out societies somewhat, ensuring that while those who are productive are able to profit commensurately from their labors, that all society also benefits from them."
Things are really quite "level" now. Not in terms of ACTUAL wealth, but in terms of opportunity. I.e. a kid growing up in poverty can get a college education--through student loans (I have no problem with government LOANING money) or through the GI Bill (I have no problem with military benefits either--just as I don't with corporate benefits. Whatever quid pro quo is needed to attract employees is fine with me). And again, as you said, the middle class is large and robust. And the poor have TVs and cars (unlike in many other places).
Things are certainly far more level now than they've ever been,but 1. they didn't get this way by accident or sheer reliance on economic factors, and 2. to very differing levels in different countries, governments have played a MAJOR role in leveling that playing field.
So while I accept the inevitable and natural FACT that people indeed will never be "equal" in terms of wealth or ability, I believe our economy is sufficiently developed, and sufficiently dependent on skilled labor, that it can go forward uninhibited without us having to fear it.
Again, any economy needs constant vigilent maintenance. The bond and equity markets hang on the Fed's every move, and spend the weeks between each of its meetings speculating on what it will do next with interest rates.
Secondly, it needs to be remembered that all jobs are important in their own way. While we certainly need lawyers, engineers, doctors, physicists, etc., (and bond researchers!
) we also need waiters, laundry workers, teachers, street cleaners, etc. To quote the old Victor Suvorov books, someone has to carry the sh*t from the cesspool. The only way we can keep people in these professions is if we ensure they make enough to make ends meet, to earn a decent living. Exactly what constitutes a "decent living" is indeed very arguable, but I think being able to feed and clothe a family, own a car and possibly own a home isn't far from the mark. Yes, if you want to pay the extra $$$ and work the extra long hours you deserve to buy that Jaguar or $2 million home, but not being capable or willing to put in the work to pass the BAR should not exempt one from being able to eat and afford decent shelter. Basic healthcare sounds like it should be on the "required" list too. The Wall Street Journal - not exactly a liberal rag, in fact one of the more fiscally conservative papers in the U.S. - ran a 2 page, 3 column report a few months back showing how inflation in the U.S. has far outpaced the minimum wage so that in 1975 a person earning minimum wage could make ends meet (cheap home, car, food & clothes for a family of 4) while a person earning minimum wage in 2002 U.S. cannot come anywhere near making ends meet. The Wall Street Journal - again, a conservative, very pro-Republican paper - was advocating raising the minimum wage in the U.S. drastically. Minimum wage is another form of government intervention in economic matters, and one that went a way towards bringing many people into the Middle Class.
"Better said, a government guarantees a certain living standard for all its citizens through re-distribution of wealth. This is to everyone's benefit, for reasons relating to health, etc. The measure of how much re-distribution should happen is not something any two modern capitalist countries agree on, but all do it to differing extents."
My principles tell me, "taking the fruits of one's labor against a person's will is wrong." However, as a (SLIGHTLY!) left-leaning libertarian who believes libertarianism is an EVOLUTION, the relative pittance we spend on basic welfare (compared to many other things) is not necessarily my first priority for change. I think changing the OTHER things should make the welfare state obsolete however. I.e. the increased prosperity from doing the other things, will ensure that charity becomes sufficient (if it isn't now) for the TRULY unable needy. People DO give when they see real need, for the most part. And all those middle-class democrats who favor welfare now, well, they can give their savings in taxes to charity then, and most if not all of it WILL ACTUALLY GET TO THE INTENDED NEEDY!--unlike now. Obviously they WANT to help the needy, right? I myself give to diverse charities when I can....
Welfare is only a part of the situation, and a particularly American variety. Improved education, guaranteed legal equality, government-subsidized sectors (medical research in the U.S. is very heavily subsidized for instance), Federal Credit Unions that distribute guaranteed affordable home, business and farm loans (financed by Fannie Mae, Freddie Mac) as well as Federal student loans (Sallie Mae), are all a part of the picture. The 30 year mortgage was invented by the U.S. government as a means to allow average Americans to afford a house - meaning converting them into property-tax-paying and community-building citizens! Insurance is very, very heavily regulated in the U.S., even moreso than banks. Every state has an insurance commissioner whose job it is to oversee insurance investments, complaints, ensure adequate competition to keep rates down, etc. These are all a part of a concerted effort on government's part to manage the market place and economy to everyone's maximum benefit. How much is too much regulation? How much is too little? That's a line that very few can agree on, and the political parties in all countries argue over incessantly. I don't have any automatic answers on that one, and tend to distrust people who claim to.
One thing I believe about welfare is that it creates dependence--and that this is INTENTIONAL. I.e. politicians and their organizations that promote it are helped by a bloc of dependent voters their policies have created. Remember too, it is never in the interest of a bureaucracy to take steps that would ultimately eliminate the perceived need for their work--i.e., it is never in their vested interests to SOLVE any problem, but just to remain "busy at it." Bureaucrats are ultimately parasites, to be quite blunt and honest....
The American style of welfare has fostered a sort of dependence, but that is changable. It is how it was implemented that has created the conditions the country now has. other countries - the Netherland s and Germany in particular - are also struggling with that one.
But again, like I said in a post above, most government intervention is in one of two forms:
a) Cronyist favoritism, i.e. "being in bed with big business", and
b) "Progressive" policies intended to strike a balance with (a) and alleviate the worst perceived consequences of (a).
I disagree strongly. I spend much of my day dealing with the Federal Reserve, the FDIC, state insurance regulators, the agencies I mentioned - I don't think you understand the true depth of government penetration into and management of the economy. That's what George Will - an arch-conservative and personal nemesis - meant in the quote at the beginning of my original post, that capitalism is a government program. That quote derives, BTW, from his frustration with the current American President's actions vis-a-vis the steel industry quotas. THAT was cronyism....
Republicans tend to be the force for (a), and democrats for (b) (although each dabbles in the other as well--increasingly so these days).
Both parties have long histories of being on both sides of the regulation issue. It took progressives from both parties - Republicans like T. Roosevelt, Taft, Harding, Eisenhower and even Nixon; and Democrats like F. Roosevelt, Truman, Johnson etc. to really try to strike a better balance between the "haves" and "have-nots" in America. Europe had a very different experience, with two whole generations of its young men wiped out, forcing them to transcend social and economic issues to rebuild. (This is why Poland was able to elect a female leader, Anna Suchocka in the 1990s with minimal fanfare, before the U.S. has.)
I propose removing both, to achieve a better balance and to eliminate corruption and waste. To make capitalism really be all it CAN be!
A despotic elitist centripital power vaccuum that concentrates vast economic wealth in the hands of a tiny minority at the expense of most of the population? That is essentially what existed in the 19th century in the West, and it spawned very violent reactions in the form of the communists, hyper-nationalists, anarchists, etc. It took the reformers of the 1890s and 1900s to begin the process of creating the "Square Deal" (TR's words) to level the playing field a bit for those who did the actual work. The result is the fairly fluid and free economic environment we enjoy today in the West, with people like me - the son of a poor Eastern European family - being able to make it on the basis of my own labors. I'll take what we have now, thank you.
Allan wrote:
"3. The massive expansion of the Middle Class in the past two centuries has been largely as a result of intentional government "meddling"."
Care to elaborate? I think the middle class mainly evolved from the increased diversification of the economy (through technological progression among other things), and the increase in demand for skilled or specialized labor--and as this progressed, the creation of industries and services to satisfy the increased whims of more and more disposable income. Unions helped in some cases, IN SPITE OF early government attempts to crush them (by ignoring laws against violence in the case of strikebreaking thugs, among other things)--and in some industries they can grow without help (this seems to be happening slowly in Minnesota, with unionized retail workers--but has happened DRAMATICALLY over the years in carpentry and other crafts). The middle class happened because it WAS NECESSARY to sustain the needs of a developed economy. Remember that in those awful late 1800s, the economy was still DEVELOPING, industry was far more labor-intensive, and the agricultural sector was still very big.
The Middle Class, the beourgoisie, strictly speaking derive from the merchant class that goes as far back as civilization stretches. However, the extraordinary expansion of the Middle Class throughout Europe and North America in the 18th, 19th and 20th centuries while indeed tied to the economic effects of the industrial revolution are as well due to some critical planned elements: universal education (the spread of literacy), the guaranty of individual property rights and the creation of universal legal principals (transcending traditional feudal class and estate lines) to deal with issues like contractual obligations/rights, and the assumption by governments of responsibility for infrastructure (roads, bridges, waterways, sewers, etc.) for economic development and public health. Even as late as the mid-19th century London had occasional mass outbreaks of cholera and scarlet fever; government basic sanitation and hygene programs alleviated the conditions in which these diseases festered. In the modern West it's almost impossible to imagine an outbreak like this, thanks to government management of environmental concerns. This, BTW, is also the real beginning of what Americans like to call "Big Government", the large centralized bureaucracy that pools resources and takes over the maintenance of factors long left to indifferent local regional authorities.
That all said, I've often thought of a libertarian society as something that must be evolved into--i.e. it can only arise when conditions are right for it (just like the communists who say that society must pass through capitalism first, and claim they are the "next step" in political evolution). I.e., I look at a country like Guatemala (where I lived for a year), and say, "libertarianism can't happen here yet." Why? It wouldn't work with 1% of the people controlling 90% of the economy (the cronyism needs to be abolished there though--definitely--or the country will continue to go nowhere. But "progressive" liberal policies may be needed for a time, since unlike the US, Guatemala hasn't the size or resources to grow into a very diverse economy by itself--maybe a Latin American economic union would help this though). The economy is not DIVERSIFIED enough at the present time. I believe it is in the US though. Whether government had the MAJOR hand in this (and you can present your case for this and we can discuss it--I'll allow that some things it did may have been helpful in their time), or it evolved naturally from development and advancement, the fact remains that we are now diversified enough that we need not fear the economy falling into too few hands should the government disengage. I believe libertarianism, with its abolishment of corruption (done by making it impossible), is the next step of political evolution--and probably the final one....
First, I need your definition of a "libertarian" society. In my discussion here, though I may include American examples I am refering to all of the modern industrialized West.
Secondly, to continue your example above, the U.S. is a huge country, and as a Federal state has an extremely diverse economic past. That said, if one looks at some of the country's regions, one can see a definite government hand in the development and diversification of the economy. The American South, prior to the 20th century was an extremely simple, 3-"crop" economy based on an extraordinary concentration of wealth and economic power in the hands of a tiny elite. The British historian Paul Johnson's very brief comparison of the economies of the Union and the Confederacy in 1861 summarizes why the Southern Rebellion had a hair's breadth of a chance of success. An even smaller minority within the South's elite realized the need for development - among them Jefferson Davis - but the rest of the South's elite understood that economic develpment meant the end of their privilages. After the disaster of defeat and Reconstruction in the South, the U.S. government began a series of efforts to develop the South economically, efforts that began to bear significant fruit in the 1950s and have led to great successes like modern Houston, Atlanta and Nashville being among the leading economic centers in the U.S. today. Similarly, the American West was very heavily dependent in the early decades for strong Federal government support in the development of basic infrastructure.
"Governments need to level out societies somewhat, ensuring that while those who are productive are able to profit commensurately from their labors, that all society also benefits from them."
Things are really quite "level" now. Not in terms of ACTUAL wealth, but in terms of opportunity. I.e. a kid growing up in poverty can get a college education--through student loans (I have no problem with government LOANING money) or through the GI Bill (I have no problem with military benefits either--just as I don't with corporate benefits. Whatever quid pro quo is needed to attract employees is fine with me). And again, as you said, the middle class is large and robust. And the poor have TVs and cars (unlike in many other places).
Things are certainly far more level now than they've ever been,but 1. they didn't get this way by accident or sheer reliance on economic factors, and 2. to very differing levels in different countries, governments have played a MAJOR role in leveling that playing field.
So while I accept the inevitable and natural FACT that people indeed will never be "equal" in terms of wealth or ability, I believe our economy is sufficiently developed, and sufficiently dependent on skilled labor, that it can go forward uninhibited without us having to fear it.
Again, any economy needs constant vigilent maintenance. The bond and equity markets hang on the Fed's every move, and spend the weeks between each of its meetings speculating on what it will do next with interest rates.
Secondly, it needs to be remembered that all jobs are important in their own way. While we certainly need lawyers, engineers, doctors, physicists, etc., (and bond researchers!
) we also need waiters, laundry workers, teachers, street cleaners, etc. To quote the old Victor Suvorov books, someone has to carry the sh*t from the cesspool. The only way we can keep people in these professions is if we ensure they make enough to make ends meet, to earn a decent living. Exactly what constitutes a "decent living" is indeed very arguable, but I think being able to feed and clothe a family, own a car and possibly own a home isn't far from the mark. Yes, if you want to pay the extra $$$ and work the extra long hours you deserve to buy that Jaguar or $2 million home, but not being capable or willing to put in the work to pass the BAR should not exempt one from being able to eat and afford decent shelter. Basic healthcare sounds like it should be on the "required" list too. The Wall Street Journal - not exactly a liberal rag, in fact one of the more fiscally conservative papers in the U.S. - ran a 2 page, 3 column report a few months back showing how inflation in the U.S. has far outpaced the minimum wage so that in 1975 a person earning minimum wage could make ends meet (cheap home, car, food & clothes for a family of 4) while a person earning minimum wage in 2002 U.S. cannot come anywhere near making ends meet. The Wall Street Journal - again, a conservative, very pro-Republican paper - was advocating raising the minimum wage in the U.S. drastically. Minimum wage is another form of government intervention in economic matters, and one that went a way towards bringing many people into the Middle Class. "Better said, a government guarantees a certain living standard for all its citizens through re-distribution of wealth. This is to everyone's benefit, for reasons relating to health, etc. The measure of how much re-distribution should happen is not something any two modern capitalist countries agree on, but all do it to differing extents."
My principles tell me, "taking the fruits of one's labor against a person's will is wrong." However, as a (SLIGHTLY!) left-leaning libertarian who believes libertarianism is an EVOLUTION, the relative pittance we spend on basic welfare (compared to many other things) is not necessarily my first priority for change. I think changing the OTHER things should make the welfare state obsolete however. I.e. the increased prosperity from doing the other things, will ensure that charity becomes sufficient (if it isn't now) for the TRULY unable needy. People DO give when they see real need, for the most part. And all those middle-class democrats who favor welfare now, well, they can give their savings in taxes to charity then, and most if not all of it WILL ACTUALLY GET TO THE INTENDED NEEDY!--unlike now. Obviously they WANT to help the needy, right? I myself give to diverse charities when I can....
Welfare is only a part of the situation, and a particularly American variety. Improved education, guaranteed legal equality, government-subsidized sectors (medical research in the U.S. is very heavily subsidized for instance), Federal Credit Unions that distribute guaranteed affordable home, business and farm loans (financed by Fannie Mae, Freddie Mac) as well as Federal student loans (Sallie Mae), are all a part of the picture. The 30 year mortgage was invented by the U.S. government as a means to allow average Americans to afford a house - meaning converting them into property-tax-paying and community-building citizens! Insurance is very, very heavily regulated in the U.S., even moreso than banks. Every state has an insurance commissioner whose job it is to oversee insurance investments, complaints, ensure adequate competition to keep rates down, etc. These are all a part of a concerted effort on government's part to manage the market place and economy to everyone's maximum benefit. How much is too much regulation? How much is too little? That's a line that very few can agree on, and the political parties in all countries argue over incessantly. I don't have any automatic answers on that one, and tend to distrust people who claim to.
One thing I believe about welfare is that it creates dependence--and that this is INTENTIONAL. I.e. politicians and their organizations that promote it are helped by a bloc of dependent voters their policies have created. Remember too, it is never in the interest of a bureaucracy to take steps that would ultimately eliminate the perceived need for their work--i.e., it is never in their vested interests to SOLVE any problem, but just to remain "busy at it." Bureaucrats are ultimately parasites, to be quite blunt and honest....
The American style of welfare has fostered a sort of dependence, but that is changable. It is how it was implemented that has created the conditions the country now has. other countries - the Netherland s and Germany in particular - are also struggling with that one.
But again, like I said in a post above, most government intervention is in one of two forms:
a) Cronyist favoritism, i.e. "being in bed with big business", and
b) "Progressive" policies intended to strike a balance with (a) and alleviate the worst perceived consequences of (a).
I disagree strongly. I spend much of my day dealing with the Federal Reserve, the FDIC, state insurance regulators, the agencies I mentioned - I don't think you understand the true depth of government penetration into and management of the economy. That's what George Will - an arch-conservative and personal nemesis - meant in the quote at the beginning of my original post, that capitalism is a government program. That quote derives, BTW, from his frustration with the current American President's actions vis-a-vis the steel industry quotas. THAT was cronyism....
Republicans tend to be the force for (a), and democrats for (b) (although each dabbles in the other as well--increasingly so these days).
Both parties have long histories of being on both sides of the regulation issue. It took progressives from both parties - Republicans like T. Roosevelt, Taft, Harding, Eisenhower and even Nixon; and Democrats like F. Roosevelt, Truman, Johnson etc. to really try to strike a better balance between the "haves" and "have-nots" in America. Europe had a very different experience, with two whole generations of its young men wiped out, forcing them to transcend social and economic issues to rebuild. (This is why Poland was able to elect a female leader, Anna Suchocka in the 1990s with minimal fanfare, before the U.S. has.)
I propose removing both, to achieve a better balance and to eliminate corruption and waste. To make capitalism really be all it CAN be!
A despotic elitist centripital power vaccuum that concentrates vast economic wealth in the hands of a tiny minority at the expense of most of the population? That is essentially what existed in the 19th century in the West, and it spawned very violent reactions in the form of the communists, hyper-nationalists, anarchists, etc. It took the reformers of the 1890s and 1900s to begin the process of creating the "Square Deal" (TR's words) to level the playing field a bit for those who did the actual work. The result is the fairly fluid and free economic environment we enjoy today in the West, with people like me - the son of a poor Eastern European family - being able to make it on the basis of my own labors. I'll take what we have now, thank you.
MrPresident
Anglo-Saxon Liberal
Can't you people keep your post short and sweet, like this one.
