Stop me if I’m misunderstanding the argument—I won’t have time to watch the video tonight, and have only read the quotes you excerpted—but you seem to be posing “markets” against “universal BLoC” as mutually exclusive choices.
I am suggesting that this is a false dilemma; we have more than adequate resources to support socialism at the low end of the economic scale while allowing quite free markets at the upper end. If nobody can suffer horribly—losing their house, their family, their ability to live adequately—the risks of greater market freedom can be borne much more reasonably.
To put this in more concrete terms: I wouldn’t be as bothered by a few people being absurdly stinkin’ rich if I wasn’t constantly worried about whether I could pay my next credit-card bill, or whether I could afford to go to the hospital if I got really sick, or whether we are going to have to declare bankruptcy and possibly lose our home.
Am I missing your point?
On a related note: totally unregulated markets at any level lead to dangerous accumulations of power by largely unaccountable individuals. Does Hayek (or his school of thought) have an answer for that problem?
Addendum: I also disagree with his statement that an efficient society cannot be just. Does he offer a supporting argument for that claim in the video?
Stop me if I’m misunderstanding the argument—I won’t have time to watch the video tonight, and have only read the quotes you excerpted—but you seem to be posing “markets” against “universal BLoC” as mutually exclusive choices.
Your ‘universal basic level of comfort’ seems an awfully slippery concept to me. I imagine the average American’s idea of what it is differs rather markedly from someone living in rural Africa. Both would differ from that of a medieval peasant.
That’s somewhat besides the point though. The reason we can support an unprecedented human population with, on average, a level of health, comfort and material well-being that is historically high is that markets are extremely good at allocating resources efficiently and encouraging and spreading innovations. This efficiency stems in large part from the way that a market economy rewards success and not good intentions. Profits tend to flow to those who can most effectively produce goods or services valued by other market participants. Hayek’s point is that this can lead to a distribution of wealth that offends many people’s natural sense of justice but that attempts to enforce a more ‘just’ distribution tend to backfire in all kinds of ways, not least of which is through a reduction in the very efficiency we rely on to maintain our standard of living.
I am suggesting that this is a false dilemma; we have more than adequate resources to support socialism at the low end of the economic scale while allowing quite free markets at the upper end. If nobody can suffer horribly—losing their house, their family, their ability to live adequately—the risks of greater market freedom can be borne much more reasonably.
Part of the problem is that I believe this reflects an overly static view of the way the economy functions and neglects the effects of changes in incentives on individual behaviour and, in time, on societal norms. The idea of a ‘culture of dependency’ reflects these types of concern. Moral Hazard doesn’t only affect too big to fail banks.
This ties in with my earlier point about defining a ‘basic level of comfort’. I believe Hayek was actually supportive of some level of unemployment insurance. The tremendous inequalities between nations complicate the politics of this issue—many people in the developed world feel they are entitled to a basic level of comfort when unemployed that exceeds the level of comfort of productive workers in the developing world and this has consequences for the politics of free trade, immigration and foreign aid.
On a related note: totally unregulated markets at any level lead to dangerous accumulations of power by largely unaccountable individuals. Does Hayek (or his school of thought) have an answer for that problem?
I’m not sure exactly what Hayek’s position on this issue is but the standard Austrian/libertarian view is that such problems are generally caused by government intervention and would not exist in a true free market. There’s actually quite a bit of common ground between the Chomsky-esque ‘left’ and the libertarian/anarcho-capitalist ‘right’ regarding critiques of the Corporatist nature of the US and other western democracies and the special interest control of government. The diagnosis is pretty similar but the proposed solutions tend to differ.
I don’t think BLoC has to be slippery, though of course in reality (with the current political system, anyway) it would become politicized. This is not a rational reason to oppose it, however.
I don’t know if we can do it for everyone on Earth at the moment, though that is worth looking at and getting some numbers so we know where we are. I was proposing it for the US, since we are the huge outlier in this area; most other “developed” societies (including some less wealthy than the US) already have such a thing.
I would suggest a starting definition for BLoC as living conditions meeting minimum sanitary standards, access to medical care priced affordably for each person (which will mean “free” for some), one or two decent meals a day, access to laundry facilities.
(sanitary standards: working indoor toilet, no leaks in the roof, reasonably well-insulated walls and roof, a phone (prepaid cellular is cheap now), some kind of heat in the winter, a decent bed, and possibly a few other things.)
The reason we can support an unprecedented human population with, on average, a level of health, comfort and material well-being that is historically high is that markets are extremely good at allocating resources efficiently and encouraging and spreading innovations. … Hayek’s point is that this can lead to a distribution of wealth that offends many people’s natural sense of justice but that attempts to enforce a more ‘just’ distribution tend to backfire in all kinds of ways, not least of which is through a reduction in the very efficiency we rely on to maintain our standard of living.
This is still juxtaposing markets and BLoC as being mutually exclusive. Why can’t we have markets for everyone over a certain income level, and universal welfare for those who fall below it? As I said, other countries do this already, and it doesn’t seem to hurt their overall wealth at all.
I would argue that our current system is greatly harmful to overall wealth, as people and businesses often spend valuable resources helping others when they could be spending those resources developing new businesses or being creative. This is also highly selective, actually punishing those who help (they are not compensated for their expenditures), rather than being equitably distributed across all those who benefit from society.
(I’m a perfect example of this: because of the lack of universal health care, I’ve spent most of the last 3 years fighting bureaucracy to get help for an autistic child—and helping to provide care for him, which I am eminently unqualified to do—instead of working on my online store or my computer consulting. Because of that situation, I can’t afford medical insurance, which means I now owe $7k for a life-threatening incident late last year—which I won’t be able to pay anytime soon, and which is therefore driving up costs for everyone else in the Duke Health system, while employees of at least one collection agency are wasting their resources trying to get it from me. This is not “market efficiency”.)
The idea of a ‘culture of dependency’ reflects these types of concern.
Is there any data suggesting that this is actually a problem? As far as I can tell, it’s a conservative myth—like Reagan’s “welfare queens”.
...the standard Austrian/libertarian view is that such problems are generally caused by government intervention and would not exist in a true free market.
This is WAY wrong. Totally unregulated markets are essentially anarchy; this is unstable, as some of those who gain early advantage will inevitably use their power to take down other players (rather than contributing positively) until the board consists of a few very powerful players (and their helpers) with everyone else being essentially powerless. (I suspect that the stable end-state is essentially feudalism, but with the enhanced concentrations of power made possible by modern technology, I can only think it would be far worse than any past feudal system.)
I put it to you that you can’t have markets without regulation—just as you can’t have a game without rules, or an internal combustion engine without valves.
I don’t think BLoC has to be slippery, though of course in reality (with the current political system, anyway) it would become politicized. This is not a rational reason to oppose it, however.
I think it is a rational reason to oppose a role for government in providing it. Governments are bad enough at providing well defined services, a poorly defined goal exacerbates the problem. Just as the vague threat of terrorism provides a cover for ever increasing government encroachment on civil liberties, the vague promise of an ever-rising ‘basic level of comfort’ provides cover for ever increasing government encroachment on economic liberties.
I don’t know if we can do it for everyone on Earth at the moment, though that is worth looking at and getting some numbers so we know where we are. I was proposing it for the US, since we are the huge outlier in this area; most other “developed” societies (including some less wealthy than the US) already have such a thing.
As I lack much of a nationalist instinct I am endlessly puzzled by the idea that we should draw arbitrary boundaries of care along national borders. If your concern is helping others you can do so with much greater efficiency by targeting that help where it is most needed, which is largely outside the US.
Incidentally I don’t think it is a coincidence that many developed countries with advanced welfare states are less wealthy than the US. The difficulties of making economic comparisons across countries with different cultures and histories make it difficult to draw any conclusive conclusions from the data on these differences but some of it is highly suggestive.
Why can’t we have markets for everyone over a certain income level, and universal welfare for those who fall below it? As I said, other countries do this already, and it doesn’t seem to hurt their overall wealth at all.
The claim that it doesn’t seem to hurt their overall wealth at all is highly controversial. Due to the difficulties of controlling for other factors it is always possible to explain away the wealth differences in the data but there are suggestive trends. I don’t really want to get into throwing studies back and forth but saying ‘it doesn’t seem to hurt their overall wealth at all’ suggests either ignorance of the relevant data or unjustified confidence in interpretation of it.
This is WAY wrong. Totally unregulated markets are essentially anarchy; this is unstable, as some of those who gain early advantage will inevitably use their power to take down other players (rather than contributing positively) until the board consists of a few very powerful players (and their helpers) with everyone else being essentially powerless.
Those who gain early advantage inevitably using their power to take down other players sounds like a description of the current corporatist system in the US to me, where incumbents use their political influence to buy state protection from competition. You appear to be ignorant of the kinds of problems highlighted by public choice theory and unaware of the libertarian analysis of how genuinely free markets tend to work against such power concentrations.
A productive market economy requires mechanisms to discourage the use of force as a negotiating chip and a framework to resolve contractual disputes through the rule of law rather than through political patronage, arbitrary decisions or violence but that looks rather different from what I suspect you mean by ‘regulation’.
I think it is a rational reason to oppose a role for government in providing it.
If the government doesn’t provide it, just who is going to?
As I lack much of a nationalist instinct I am endlessly puzzled by the idea that we should draw arbitrary boundaries of care along national borders. If your concern is helping others you can do so with much greater efficiency by targeting that help where it is most needed, which is largely outside the US.
It’s not a matter of loyalty, but of having the knowledge and resources to work with to make something possible. I would certainly like to see such a level of care provided to everyone worldwide, but knowing what little I know about average wealth worldwide, this seems an unrealistic goal for the immediate future. It seems entirely realistic for the US, however.
(Plus… as little influence as I have over US politics, I am at least a citizen and resident; I’m much less likely to be able to have an effect on how things are handled in China… or Uganda, where there are more serious worries like the current campaign to make homosexuality a capital offense.)
Incidentally I don’t think it is a coincidence that many developed countries with advanced welfare states are less wealthy than the US.
There are also countries more wealthy than us who have universal welfare. My understanding is that if you look at the correlation between social welfare and overall wealth, it is positive—not negative, as you seem to imply. However, we do need some numbers for this so we’re not arguing subjective impressions.
I don’t really want to get into throwing studies back and forth...
I think this is exactly what we should be doing, until we have a sufficient sampling of studies that it might actually average out to something approaching reality.
Those who gain early advantage inevitably using their power to take down other players sounds like a description of the current corporatist system in the US to me...
Yes, the current corporatist system is what you get from partial deregulation. I think it is clear that we do not want to go further in that direction.
You appear to be ignorant of the kinds of problems highlighted by public choice theory and unaware of the libertarian analysis of how genuinely free markets tend to work against such power concentrations.
I’m aware of the broad outlines of the theory and some of the particulars, but I’m not aware of how it supports your conclusions.
There is the argument that deregulation of Germany’s currency led to greater prosperity—to which I say (a) we are agreed that too much regulation is a bad thing, but I still maintain that too little is just as bad or worse; (b) I would really like to see some numbers on this; were people really that badly off trading cigarettes? Yes, it was an inconvenience—but how much did it actually affect material wealth?
As you pointed out, recent US history seems to argue for a return to increased regulation.
If you believe there is data which contradicts my conclusions about the dangers of total deregulation and the economic benefits of social welfare for at least the bottom economic tier of society, please do share it.
If the government doesn’t provide it, just who is going to?
Charities, family, friends, well meaning strangers… The desire to help others does not exist because of government. There might be more or less resources devoted to charity in the absence of government intervention, I haven’t seen much evidence either way. Libertarians commonly argue that private charity is more effective than government welfare and that it makes for a healthier society. A typical example of this case is here—the first such argument I found on google. Now you can certainly dispute these claims but you talk as if you are not even aware that such alternative arguments exist.
It’s not a matter of loyalty, but of having the knowledge and resources to work with to make something possible. I would certainly like to see such a level of care provided to everyone worldwide, but knowing what little I know about average wealth worldwide, this seems an unrealistic goal for the immediate future. It seems entirely realistic for the US, however.
You appear to be shifting the goalposts. You started out arguing that your main concern is to minimize suffering:
First, I’m inclined to think that suffering should be weighted more heavily than benefit. More specifically: it’s more important to make sure nobody falls below a certain universal level of comfort than it is to allow people who are already at that level (or higher) to do better.
Now you are saying that because that is an unrealistic goal you instead think it is important to make people who are already relatively well off by global standards (poor Americans) better off than it is to minimize suffering of the global poor. If your goal is really to minimize human suffering I don’t see how you can argue that guaranteeing housing and healthcare for Americans is a more effective approach than anti-malarial medications, vaccines or antibiotics for African children.
My understanding is that if you look at the correlation between social welfare and overall wealth, it is positive—not negative, as you seem to imply. However, we do need some numbers for this so we’re not arguing subjective impressions.
Subtly different question. It is true that many wealthy countries also have relatively generous welfare systems (particularly in Europe) but they have been able to afford these systems because they were already relatively wealthy. Studies that find negative effects are generally looking at relative growth rates but the difficulty of properly controlling such studies makes them somewhat inconclusive.
I think this is exactly what we should be doing, until we have a sufficient sampling of studies that it might actually average out to something approaching reality.
I’ve been down this road before in discussions of this nature and they usually degenerate into people throwing links to studies back and forth that neither side really has taken the time to read in detail. The discussion usually just derails into arguing about why this or that study is not adequately controlled. I think it is fair to say that existing studies are rarely definitive enough to overcome pre-existing ideological biases.
I’m aware of the broad outlines of the theory and some of the particulars, but I’m not aware of how it supports your conclusions.
The two main points to note are that governments in reality are not in the business of implementing ‘enlightened’ policies that address imbalances of power but rather are in the business of creating imbalances of power for the benefit of special interests and the politicians they own and that many government regulations sold as protecting the interests of the general electorate are in actual fact designed to protect particular special interest groups.
Genuine deregulation has a good track record. It should not be confused with false deregulation like that seen in the financial industry which is really just ‘re-regulation’: adjusting an existing distorted playing field to favour the incumbents even more heavily.
[woozle] If the government doesn’t provide it, just who is going to?
[mattnewport] Charities, family, friends, well meaning strangers…
So, why aren’t they? How can we make this happen—what process are you proposing by which we can achieve universal welfare supported entirely by such means?
You appear to be shifting the goalposts. You started out arguing that your main concern is to minimize suffering...
I didn’t state the scope; you just assumed it was global. My goal remains as stated—minimizing suffering—but I am not arguing for any global changes (yet).
Now you are saying that because that is an unrealistic goal you instead think it is important to make people who are already relatively well off by global standards (poor Americans) better off than it is to minimize suffering of the global poor.
Umm… no, I said no such thing. My suggestion does not have any clear effects on the rest of the world. If anything, it would allow Americans to be more charitable to the world at large, as we would not have to be worrying about taking care of our own first.
I am not proposing taking away any existing American aid to other countries. I’m arguing we are wealthy enough to provide for ourselves solely through reallocation of resources internally, not by diverting them away from external causes (or worse, by stealing resources from other countries as we have a long history of doing; indeed, if it turns out that we cannot achieve universal welfare without robbing others, then I would say that we need to stop robbing others first, then re-assess the situation).
It is true that many wealthy countries also have relatively generous welfare systems (particularly in Europe) but they have been able to afford these systems because they were already relatively wealthy. Studies that find negative effects are generally looking at relative growth rates but the difficulty of properly controlling such studies makes them somewhat inconclusive.
Then I would say that your claim that welfare hurts a country’s overall wealth is based on weak data. What is the basis for your belief in this theory, since the studies which might resolve that question have returned inconclusive results?
I’ve been down this road before in discussions of this nature and they usually degenerate into people throwing links to studies back and forth that neither side really has taken the time to read in detail.
If nobody has time to at least compile the results, then there’s really no point in even having the discussion—since looking at existing data is really the only rational way to attempt to resolve the question.
If you actually have some links, I will at least file them on Issuepedia and give you a link to the page where they—and any other related information which may have been gathered (or may be gathered in the future) -- can be found.
I will also try to summarize any further debating we do on the subject, so that neither of us will need to rehash the same ground in future debates (with each other or with other people).
I hope that this addresses your apparent concern (i.e. that exchanging actual data on this topic would be a waste of time).
The two main points to note are that governments in reality are not in the business of implementing ‘enlightened’ policies that address imbalances of power but rather are in the business of creating imbalances of power for the benefit of special interests and the politicians they own and that many government regulations sold as protecting the interests of the general electorate are in actual fact designed to protect particular special interest groups.
That is the reason I think we need to re-invent government. I don’t think government is automatically evil, though it is certainly vulnerable to just the sorts of mechanisms you identify.
This is certainly not the purpose for which government was invented, and saying that government is the problem just because it becomes a problem is like saying guns are always evil because they kill people—or dynamite is always evil because it is used in warfare. Any tool can be misused.
I propose that government is necessary, and that rather than declaring it evil and trying to render it as small and weak as possible, we should be learning how to build it better—and how to regain control of it when it goes astray.
Genuine deregulation has a good track record. It should not be confused with false deregulation...
Can you give me some examples (mainly of genuine deregulation—I got the financial industry non-deregulation; will have to ponder that example)?
Can you give me some examples (mainly of genuine deregulation—I got the financial industry non-deregulation; will have to ponder that example)?
I don’t have time to reply to your whole post right now (I’ll try to give a fuller response later) but telecom deregulation is the first example that springs to mind of (imperfect but) largely successful deregulation.
Amen to that… I remember when it was illegal to connect your own equipment to Phone Company wires, and telephones were hard-wired by Phone Company technicians.
The obvious flaw in the current situation, of course, is the regional monopolies—slowly being undercut by competition from VoIP, but still: as it is, if I want wired phone service in this area, I have to deal with Verizon, and Verizon is evil.
This suggests to me that a little more regulation might be helpful—but you seem to be suggesting that the lack of competition in the local phone market is actually due to some vestiges of government regulation of the industry—or am I misunderstanding?
(No rush; I shouldn’t be spending so much time on this either… but I think it’s important to pursue these lines of thought to some kind of conclusion.)
A little follow-up… it looks like the major deregulatory change was the Telecommunications Act of 1996; the “freeing of the phone jack” took place in the early 1980s or late 1970s, and modular connectors (RJ11) were widespread by 1985, so either that was a result of earlier, less sweeping deregulation or else it was simply an industry response to advances in technology.
This suggests to me that a little more regulation might be helpful—but you seem to be suggesting that the lack of competition in the local phone market is actually due to some vestiges of government regulation of the industry—or am I misunderstanding?
An example of the type of special-interest driven regulation presented as consumer protection that I’m talking about is the established phone companies trying to use the E911 regulations to hamper VOIP companies that threaten their monopolies. This type of regulatory capture is very common.
I think they are a terrible idea. I’m not sure what Hayek’s position was on them but I imagine he would too. They result in the government making decisions about how to invest resources with all the problems that entails.
Stop me if I’m misunderstanding the argument—I won’t have time to watch the video tonight, and have only read the quotes you excerpted—but you seem to be posing “markets” against “universal BLoC” as mutually exclusive choices.
I am suggesting that this is a false dilemma; we have more than adequate resources to support socialism at the low end of the economic scale while allowing quite free markets at the upper end. If nobody can suffer horribly—losing their house, their family, their ability to live adequately—the risks of greater market freedom can be borne much more reasonably.
To put this in more concrete terms: I wouldn’t be as bothered by a few people being absurdly stinkin’ rich if I wasn’t constantly worried about whether I could pay my next credit-card bill, or whether I could afford to go to the hospital if I got really sick, or whether we are going to have to declare bankruptcy and possibly lose our home.
Am I missing your point?
On a related note: totally unregulated markets at any level lead to dangerous accumulations of power by largely unaccountable individuals. Does Hayek (or his school of thought) have an answer for that problem?
Addendum: I also disagree with his statement that an efficient society cannot be just. Does he offer a supporting argument for that claim in the video?
Your ‘universal basic level of comfort’ seems an awfully slippery concept to me. I imagine the average American’s idea of what it is differs rather markedly from someone living in rural Africa. Both would differ from that of a medieval peasant.
That’s somewhat besides the point though. The reason we can support an unprecedented human population with, on average, a level of health, comfort and material well-being that is historically high is that markets are extremely good at allocating resources efficiently and encouraging and spreading innovations. This efficiency stems in large part from the way that a market economy rewards success and not good intentions. Profits tend to flow to those who can most effectively produce goods or services valued by other market participants. Hayek’s point is that this can lead to a distribution of wealth that offends many people’s natural sense of justice but that attempts to enforce a more ‘just’ distribution tend to backfire in all kinds of ways, not least of which is through a reduction in the very efficiency we rely on to maintain our standard of living.
Part of the problem is that I believe this reflects an overly static view of the way the economy functions and neglects the effects of changes in incentives on individual behaviour and, in time, on societal norms. The idea of a ‘culture of dependency’ reflects these types of concern. Moral Hazard doesn’t only affect too big to fail banks.
This ties in with my earlier point about defining a ‘basic level of comfort’. I believe Hayek was actually supportive of some level of unemployment insurance. The tremendous inequalities between nations complicate the politics of this issue—many people in the developed world feel they are entitled to a basic level of comfort when unemployed that exceeds the level of comfort of productive workers in the developing world and this has consequences for the politics of free trade, immigration and foreign aid.
I’m not sure exactly what Hayek’s position on this issue is but the standard Austrian/libertarian view is that such problems are generally caused by government intervention and would not exist in a true free market. There’s actually quite a bit of common ground between the Chomsky-esque ‘left’ and the libertarian/anarcho-capitalist ‘right’ regarding critiques of the Corporatist nature of the US and other western democracies and the special interest control of government. The diagnosis is pretty similar but the proposed solutions tend to differ.
I don’t think BLoC has to be slippery, though of course in reality (with the current political system, anyway) it would become politicized. This is not a rational reason to oppose it, however.
I don’t know if we can do it for everyone on Earth at the moment, though that is worth looking at and getting some numbers so we know where we are. I was proposing it for the US, since we are the huge outlier in this area; most other “developed” societies (including some less wealthy than the US) already have such a thing.
I would suggest a starting definition for BLoC as living conditions meeting minimum sanitary standards, access to medical care priced affordably for each person (which will mean “free” for some), one or two decent meals a day, access to laundry facilities.
(sanitary standards: working indoor toilet, no leaks in the roof, reasonably well-insulated walls and roof, a phone (prepaid cellular is cheap now), some kind of heat in the winter, a decent bed, and possibly a few other things.)
This is still juxtaposing markets and BLoC as being mutually exclusive. Why can’t we have markets for everyone over a certain income level, and universal welfare for those who fall below it? As I said, other countries do this already, and it doesn’t seem to hurt their overall wealth at all.
I would argue that our current system is greatly harmful to overall wealth, as people and businesses often spend valuable resources helping others when they could be spending those resources developing new businesses or being creative. This is also highly selective, actually punishing those who help (they are not compensated for their expenditures), rather than being equitably distributed across all those who benefit from society.
(I’m a perfect example of this: because of the lack of universal health care, I’ve spent most of the last 3 years fighting bureaucracy to get help for an autistic child—and helping to provide care for him, which I am eminently unqualified to do—instead of working on my online store or my computer consulting. Because of that situation, I can’t afford medical insurance, which means I now owe $7k for a life-threatening incident late last year—which I won’t be able to pay anytime soon, and which is therefore driving up costs for everyone else in the Duke Health system, while employees of at least one collection agency are wasting their resources trying to get it from me. This is not “market efficiency”.)
Is there any data suggesting that this is actually a problem? As far as I can tell, it’s a conservative myth—like Reagan’s “welfare queens”.
This is WAY wrong. Totally unregulated markets are essentially anarchy; this is unstable, as some of those who gain early advantage will inevitably use their power to take down other players (rather than contributing positively) until the board consists of a few very powerful players (and their helpers) with everyone else being essentially powerless. (I suspect that the stable end-state is essentially feudalism, but with the enhanced concentrations of power made possible by modern technology, I can only think it would be far worse than any past feudal system.)
I put it to you that you can’t have markets without regulation—just as you can’t have a game without rules, or an internal combustion engine without valves.
I think it is a rational reason to oppose a role for government in providing it. Governments are bad enough at providing well defined services, a poorly defined goal exacerbates the problem. Just as the vague threat of terrorism provides a cover for ever increasing government encroachment on civil liberties, the vague promise of an ever-rising ‘basic level of comfort’ provides cover for ever increasing government encroachment on economic liberties.
As I lack much of a nationalist instinct I am endlessly puzzled by the idea that we should draw arbitrary boundaries of care along national borders. If your concern is helping others you can do so with much greater efficiency by targeting that help where it is most needed, which is largely outside the US.
Incidentally I don’t think it is a coincidence that many developed countries with advanced welfare states are less wealthy than the US. The difficulties of making economic comparisons across countries with different cultures and histories make it difficult to draw any conclusive conclusions from the data on these differences but some of it is highly suggestive.
The claim that it doesn’t seem to hurt their overall wealth at all is highly controversial. Due to the difficulties of controlling for other factors it is always possible to explain away the wealth differences in the data but there are suggestive trends. I don’t really want to get into throwing studies back and forth but saying ‘it doesn’t seem to hurt their overall wealth at all’ suggests either ignorance of the relevant data or unjustified confidence in interpretation of it.
Those who gain early advantage inevitably using their power to take down other players sounds like a description of the current corporatist system in the US to me, where incumbents use their political influence to buy state protection from competition. You appear to be ignorant of the kinds of problems highlighted by public choice theory and unaware of the libertarian analysis of how genuinely free markets tend to work against such power concentrations.
A productive market economy requires mechanisms to discourage the use of force as a negotiating chip and a framework to resolve contractual disputes through the rule of law rather than through political patronage, arbitrary decisions or violence but that looks rather different from what I suspect you mean by ‘regulation’.
If the government doesn’t provide it, just who is going to?
It’s not a matter of loyalty, but of having the knowledge and resources to work with to make something possible. I would certainly like to see such a level of care provided to everyone worldwide, but knowing what little I know about average wealth worldwide, this seems an unrealistic goal for the immediate future. It seems entirely realistic for the US, however.
(Plus… as little influence as I have over US politics, I am at least a citizen and resident; I’m much less likely to be able to have an effect on how things are handled in China… or Uganda, where there are more serious worries like the current campaign to make homosexuality a capital offense.)
There are also countries more wealthy than us who have universal welfare. My understanding is that if you look at the correlation between social welfare and overall wealth, it is positive—not negative, as you seem to imply. However, we do need some numbers for this so we’re not arguing subjective impressions.
I think this is exactly what we should be doing, until we have a sufficient sampling of studies that it might actually average out to something approaching reality.
Yes, the current corporatist system is what you get from partial deregulation. I think it is clear that we do not want to go further in that direction.
I’m aware of the broad outlines of the theory and some of the particulars, but I’m not aware of how it supports your conclusions.
There is the argument that deregulation of Germany’s currency led to greater prosperity—to which I say (a) we are agreed that too much regulation is a bad thing, but I still maintain that too little is just as bad or worse; (b) I would really like to see some numbers on this; were people really that badly off trading cigarettes? Yes, it was an inconvenience—but how much did it actually affect material wealth?
As you pointed out, recent US history seems to argue for a return to increased regulation.
If you believe there is data which contradicts my conclusions about the dangers of total deregulation and the economic benefits of social welfare for at least the bottom economic tier of society, please do share it.
Charities, family, friends, well meaning strangers… The desire to help others does not exist because of government. There might be more or less resources devoted to charity in the absence of government intervention, I haven’t seen much evidence either way. Libertarians commonly argue that private charity is more effective than government welfare and that it makes for a healthier society. A typical example of this case is here—the first such argument I found on google. Now you can certainly dispute these claims but you talk as if you are not even aware that such alternative arguments exist.
You appear to be shifting the goalposts. You started out arguing that your main concern is to minimize suffering:
Now you are saying that because that is an unrealistic goal you instead think it is important to make people who are already relatively well off by global standards (poor Americans) better off than it is to minimize suffering of the global poor. If your goal is really to minimize human suffering I don’t see how you can argue that guaranteeing housing and healthcare for Americans is a more effective approach than anti-malarial medications, vaccines or antibiotics for African children.
Subtly different question. It is true that many wealthy countries also have relatively generous welfare systems (particularly in Europe) but they have been able to afford these systems because they were already relatively wealthy. Studies that find negative effects are generally looking at relative growth rates but the difficulty of properly controlling such studies makes them somewhat inconclusive.
I’ve been down this road before in discussions of this nature and they usually degenerate into people throwing links to studies back and forth that neither side really has taken the time to read in detail. The discussion usually just derails into arguing about why this or that study is not adequately controlled. I think it is fair to say that existing studies are rarely definitive enough to overcome pre-existing ideological biases.
The two main points to note are that governments in reality are not in the business of implementing ‘enlightened’ policies that address imbalances of power but rather are in the business of creating imbalances of power for the benefit of special interests and the politicians they own and that many government regulations sold as protecting the interests of the general electorate are in actual fact designed to protect particular special interest groups.
Genuine deregulation has a good track record. It should not be confused with false deregulation like that seen in the financial industry which is really just ‘re-regulation’: adjusting an existing distorted playing field to favour the incumbents even more heavily.
So, why aren’t they? How can we make this happen—what process are you proposing by which we can achieve universal welfare supported entirely by such means?
I didn’t state the scope; you just assumed it was global. My goal remains as stated—minimizing suffering—but I am not arguing for any global changes (yet).
Umm… no, I said no such thing. My suggestion does not have any clear effects on the rest of the world. If anything, it would allow Americans to be more charitable to the world at large, as we would not have to be worrying about taking care of our own first.
I am not proposing taking away any existing American aid to other countries. I’m arguing we are wealthy enough to provide for ourselves solely through reallocation of resources internally, not by diverting them away from external causes (or worse, by stealing resources from other countries as we have a long history of doing; indeed, if it turns out that we cannot achieve universal welfare without robbing others, then I would say that we need to stop robbing others first, then re-assess the situation).
Then I would say that your claim that welfare hurts a country’s overall wealth is based on weak data. What is the basis for your belief in this theory, since the studies which might resolve that question have returned inconclusive results?
If nobody has time to at least compile the results, then there’s really no point in even having the discussion—since looking at existing data is really the only rational way to attempt to resolve the question.
If you actually have some links, I will at least file them on Issuepedia and give you a link to the page where they—and any other related information which may have been gathered (or may be gathered in the future) -- can be found.
I will also try to summarize any further debating we do on the subject, so that neither of us will need to rehash the same ground in future debates (with each other or with other people).
I hope that this addresses your apparent concern (i.e. that exchanging actual data on this topic would be a waste of time).
That is the reason I think we need to re-invent government. I don’t think government is automatically evil, though it is certainly vulnerable to just the sorts of mechanisms you identify.
This is certainly not the purpose for which government was invented, and saying that government is the problem just because it becomes a problem is like saying guns are always evil because they kill people—or dynamite is always evil because it is used in warfare. Any tool can be misused.
I propose that government is necessary, and that rather than declaring it evil and trying to render it as small and weak as possible, we should be learning how to build it better—and how to regain control of it when it goes astray.
Can you give me some examples (mainly of genuine deregulation—I got the financial industry non-deregulation; will have to ponder that example)?
I don’t have time to reply to your whole post right now (I’ll try to give a fuller response later) but telecom deregulation is the first example that springs to mind of (imperfect but) largely successful deregulation.
Amen to that… I remember when it was illegal to connect your own equipment to Phone Company wires, and telephones were hard-wired by Phone Company technicians.
The obvious flaw in the current situation, of course, is the regional monopolies—slowly being undercut by competition from VoIP, but still: as it is, if I want wired phone service in this area, I have to deal with Verizon, and Verizon is evil.
This suggests to me that a little more regulation might be helpful—but you seem to be suggesting that the lack of competition in the local phone market is actually due to some vestiges of government regulation of the industry—or am I misunderstanding?
(No rush; I shouldn’t be spending so much time on this either… but I think it’s important to pursue these lines of thought to some kind of conclusion.)
A little follow-up… it looks like the major deregulatory change was the Telecommunications Act of 1996; the “freeing of the phone jack” took place in the early 1980s or late 1970s, and modular connectors (RJ11) were widespread by 1985, so either that was a result of earlier, less sweeping deregulation or else it was simply an industry response to advances in technology.
An example of the type of special-interest driven regulation presented as consumer protection that I’m talking about is the established phone companies trying to use the E911 regulations to hamper VOIP companies that threaten their monopolies. This type of regulatory capture is very common.
What about Works Progress Administration-style programs?
I think they are a terrible idea. I’m not sure what Hayek’s position was on them but I imagine he would too. They result in the government making decisions about how to invest resources with all the problems that entails.