I think John’s ruminations on free markets are important but I also think we’re missing some important distinctions when we talk about this subject. I believe there are two issues at hand: first there is the economy and the government’s role in that economy. In liberal nations – such as ours or to one degree or another most of Europe – government plays a relatively limited role in the economy. This is especially true in northern Europe, Ireland, and Switzerland which all take extremely hands-off approaches to economic issues. Ditto Canada and the US. Singapore and Hong Kong are probably the two most liberal economies in the world. These are all countries which practice in some form or another the imperfect project known as free trade.
On the other hand there is the notion of a redistributive state. The two are not mutually exclusive. Countries like Denmark and Switzerland have very redistributive economies in spite of their extraordinarily free economies and hands-off approach to economic matters. In spite of may be the wrong way to phrase this. I believe that for a truly free market society to flourish, a redistributive state must exist alongside it. I wrote this the other day:
This is why I also believe so strongly in safety nets. If we believe in markets because they allow for failure, if we believe that the organic nature of a free society is preferable to one that is planned or managed or riddled with tariffs and barriers to trade – then we must also accept that society is full of cracks. Failure leads to suffering. We need to alleviate that suffering. We need to pick people back up and put them on their feet again, either through health care benefits or unemployment benefits or grants for school and so forth (or really all of the above). So I say – yes on markets, yes on freedom of trade and labor – but yes also on safety nets, on health care, on these many programs that make a market economy and society possible to begin with.
The welfare state and free markets are not merely compatible, they are vital to each other’s success. I believe in markets because I believe they fail. Failure allows people and industries to adapt and evolve (unless we keep up the practice of too-big-to-fail of course). But where there is failure there are people getting screwed, and that’s not how society ought to work. It’s neither morally acceptable or sustainable. And plenty advocates of free trade have glibly set this aside and pointed to these ever-failing markets as the solution not only to an efficient and adaptive economy but also to our safety nets, to society’s many cracks. Which is a fine pipe dream but not particularly well grounded in reality. They conflate government intervention into markets with taxation to provide safety nets. Pretty soon free marketeers sound pretty heartless and callous and begin to earn the reputation they seem to have around these parts.
But that’s not how I see this concept. I see free markets as dependent on the welfare state. The government sets up the parameters of the market to begin with, after all. It’s no great leap from there to creating the necessary conditions for people to succeed even where markets fail. This is all along the lines of what I was getting at in my limited/big government post yesterday. This is, at its core, an advocation of something along the lines of northern Europe’s social democracies though I would prefer a somewhat more liberal version all around – if we can avoid the levels of taxation we see in Sweden and Denmark that would be a good thing, obviously, but of course the only way to do that here would be to cut, cut, cut defense. No easy task.
Yutsano
Easy no. Necessary definitely. Hell we could cut our defense budget in half, close most of the bases we have around the world, and STILL have the largest military and biggest spending on defense per capita in the world. Of course there are complicated reasons why if we closed up shop in Europe and Japan they would hue and cry about our departure, but I’m not convinced we really need to stay there as it is. You’re right in that this is a complicated issue, but we don’t need any more nuclear submarines or aircraft carriers that can land 747s easily. Dump a few of the big outdated toys and we go a long way towards restoring some sanity to our defensive budget. Trim a little fat off the Army and Navy once the two wars are finally over and poof we’re there.
roshan
It’s getting too serious in here.
Here, bring that smile out. TROLL-BAMA!
E.D. Kain
@Yutsano: Yes but that would destroy American jobs!
asiangrrlMN
@roshan: That’s very funny!
@E.D. Kain: I am intrigued, but I am having difficulty marrying free market and welfare state. I mean, I understand your reasoning as outlined in your post, but then how is the market truly free? I know I’m getting hung up on semantics, but what you are describing doesn’t sound like a free market at all.
ETA: Or are you just emphasizing the freeness within the market with the term?
stickler
I read this stuff, and I find this, just a few words in:
And I turn to my bottle of tonic water, which is mellowing my lime juice and gin intake, and I see High Fructose Corn Sugar.
How is it that the British came upon the notion of processing maize and putting it as a sweetener into their gin & tonics? What? The British never did that? Hm. So why is this expensive processed product lurking in my G&T?
Oh. Richard Nixon and Earl Butz decided to amp up government subsidies of corn production in 1971. And therefore HFCS is everyfuckingwhere.
Yet, “government plays a relatively limited role in the economy.” Tell it to my liver, chief.
Phil
I see John’s blogger friend is walking back John’s embrace of socialism. Unfortunately this one’s still fucking the Keynesian magic multipliers chicken.
Your ideas have failed. Your ideas have failed miserably. Now you are out of ideas.
And come November, you will also be out of time.
Yutsano
@E.D. Kain: Heh. You’re cute when you’re snarky. One of the things I’ve learned in my relatively short life is that the American economy is so hugely dynamic that it can absorb a lot. Granted with unemployment levels at what they are right now this won’t happen tomorrow, but when things start approaching sanity again then maybe we’ll grow up enough as a country to make a few of the harder choices. Like upping the contribution rate to Social Security and lowering the eligibility age for Medicare to 50 or 55 (thereby increasing the health of the relative pool and fixing the costs even better than HCR did) and other common sense adjustments to our safety net. Ask wifey though I trend to the eternally optimistic side.
arguingwithsignposts
And once again down the rabbit hole. There is NO SUCH THING AS A FREE MARKET Kain, get it through your fucking head! And what you say here is just gobbledigook.
Villago Delenda Est
One of the economic structural problems that never, ever is addressed is that for centuries “economies” were about, for the most part, the simple sustainment of human life. Bringing in enough food to avoid starvation.
Then surpluses were created by agriculture, and people started getting greedy.
The United States has more than enough resources to provide a pretty comfortable baseline standard of living for everyone living in them. The problem we have, as usual, is the political will to distribute resources to provide that standard of living. Anyone with military officer’s training knows about Maslow’s Heirarchy of Needs. Meet the baseline, and you’ll be amazed how much creative energy will be unleashed. This is assuming, of course, that you actually want this to happen, and I’m pretty much convinced that many of the people at the top of the social pyramid don’t want that to happen. As Orwell pointed out, the endless wars between Oceania and Eurasia/Eastasia were needed to destroy the product of human labor so it could not be used to raise the standard of living, allowing more leisure time and therefore allowing people to start reading and thinking and realizing that the social pyramid isn’t needed when you’re out of the subsistence mode.
So keep them ALWAYS in the subsistence mode.
asiangrrlMN
@Yutsano: Yes, you do. You make a perfect complement to my more darkly pessimistic streak.
@Villago Delenda Est: Very good points. It is true that it’s actually to the uppers’ benefit to not have the masses reach satiation of the first stage of Maslow’s hierarchy. The coup de grace is making the hoi polloi participate in their own subjugation–witness the howling masses who protest the Estate Tax and the tax raise for the top 1% of our country.
roshan
Case Study: GERMANY.
A country with highest wage rates, union restrictions and also highest exports in the world today!
arguingwithsignposts
@asiangrrlMN: @Villago Delenda Est:
Am just re-reading “Amusing Ourselves to Death” by Neil Postman, and he makes the argument that we are not in Orwell’s future, but Huxley’s, i.e., it is not the things we hate that are killing us, but the things we love. I find it an oddly compelling thesis, given the not-mosque at not-ground-zero, etc., etc., ad nauseum.
ETA: and with this, I bid you a good evening. Now off to sleep, perchance to dream before the morn.
asiangrrlMN
@arguingwithsignposts: Very interesting. I might have to check out the book. Night.
Villago Delenda Est
Jefferson considered the imposition of an estate tax to be one of his greatest achievements. He wanted to prevent any sort of hereditary aristocracy, in name or in form, from coagulating in the United States.
Which shows you just how anti-Republican the Republicans have become. They fall all over themselves to defend the meanest, most greedy form of entitlement there is. Glibertarians, too, talk about the “productive strivers” who make things happen, but don’t get that if you allow them to leave the fruits of their labors to their heirs, the heirs have no motivation at all to strive. They’ve got it made.
Marx had the actual take on this…ban inheritances. If you’re serious about everyone “working for a living” you can’t allow people to be born on third base.
Yutsano
@Villago Delenda Est:
An intriguing thought, I’m not sure how workable this is when there are several methods before death of transferring wealth that also avoid taxation. I think it’s better to just acknowledge that the super wealthy need to pony up some more to compensate society for allowing them usage of the sociaI tools to generate their extreme wealth.
wengler
I’m not sure what your main argument is here. To be like a social democracy but not so many taxes. So you want us to become Germany?
Well we could start by imposing the German rule on labor representing half of the voting interest on the boards of publicly traded companies. The corporate boards of the US are simply manifestations of the interlocking plutocratic elite that has driven the American economy to the ground.
After that moderate step, we can do something that used to be as American as apple pie and start chopping these monopolies up. A theme in your writing seems to be the dangers of concentrated power and I agree. The massive egg recall is yet another canary in the coalmine of how concentrated big business have gotten. The trusts of modern-day robber barons must be shattered into a million pieces.
So there we have a simple two-step on the way to a more sane country. And yet I think we will just get more lectures from the billionaires about the poor being the root of the rotten economy.
patrick II
E.D. Kain: On the other hand there is the notion of a redistributive state.
Redistruted from what? Redistrition asserts a natural distribution that redistributing varies from. There is no natural distribution because there is no natural economy that exists without laws, institutions, and and government. And as soon as you have those things you make decisions about what is fair and what is necessary. You are making distribution decisions, not redistribution decisions. The very rich who lead idealists like you around by the nose understand this and that is why they spend billions every year for lobbying so the wealth our economy generates is distributed their way and then assert that is the norm and deviating from that psuedo-norm is unnatural redistribution. It isn’t.
Xenos
I can’t even get past the basic framing of this issue and discussion. This is a false dichotomy. Aside from Rousseau’s example of two savages meeting in the Peruvian jungle and exchanging beads, no economic activity takes place in the absence of government. There is no ownership of land without the government to record it. There is no agreement, no contract, without the government to enforce it. There is no banking system without the government to make it legal.
No dichotomy, so no countervailing systems of power versus freedom. Just a range of market activities that are more or less directly affected by government action – but no meaningful and significant economic activity, and no market, is ever, ever “free”.
The exception is when the government creates an artificial environment where economic parties have equal standing in the law, relative transparency regarding their transactions, and enforced systems obliging dealings in good faith, with third party externalities accounted for and paid for. This is desirable, but it is not a natural state of affairs – it is an artificial construct of law and culture, and it is dynamic with changing mores, technology, and culture.
Free markets are unnatural, and they are always temporary, needing to be adjusted and re-regulated on a constant basis. Every party in the economy has a direct interest in making the markets less free, and more structured to their advantage. So eternal vigilance and constant struggle is necessary for free markets to exist in some fashion. The rest of the arguing is about which side you prefer to have the system to err on – that of the little people or the big people. All the rest is commentary.
Xenos
@patrick II: When William the Conqueror took over he claimed superior title to all of the land in England. Thus every single plot of dirt was owned outright by him or paid rents upward to him in some fashion. As far as I can tell, that is the closest thing to a “natural” distribution of wealth and income on the part of the state.
I am not in favor of such a system, but some people seem to long for it. Redistribution has its merits.
Cermet
Good thoughts but you forgot a critical part of the equation – Unions. In Germany, unions are very strong, always have a member of any corp board, and German workers far out produce us – they also get six extra weeks off compared to us, a better education (public) system, health and retirement. yet they export heavily to China (unlike us) and also to the US, while paying wages many orders of magitude higher than China – go figure.
J.D.
But both Singapore and Hong Kong have universal socialized health care, which makes them Islamic Marxist Communist Dictatorships as far as Glenn Beck is concerned.
WereBear (itouch)
True free marketers are trust busters.
victory
The only truly free market is the black market.
rickstersherpa
@Phil: You obviously believe in the “its not a free market unless someone is getting “f–cked” school of capitalism.
Actually, Phil, to the extent it was half-heartedly tried by our current right of center, neo-liberal President and his Rubinite advisors, Summers and Geithner, the Keynsian stimulus worked to prevent a total disaster after 2008’s Minsky moment. But neither he nor they have come to grips with the fundamental problems for the U.S. (the burden of being the world’s economy reserve currency which leave the dollar overvalued, the exhaustion of empire, the dead-end of “finance” led economic growth, the immediate social costs as well as the long-term economic costs of hollowing out the manufacturing base, the lack of an energy policy that would eliminate that oil imports from the trade deficit, etc.) It was just a “stimulus” which meant that it was just a short term effect, “just an insurance policy,” according to Dr. Summers as told to Ryan Lizza in the New Yorker last fall, and limited in time. As it stops and the Government begins to reduce spending (Federal Government employment, both direct and indirect of contractors is now apparently down by 330,000 this year as census workers are discharged), it is becomnig pro-cyclical. So Federal and State Governments are both now retrenching, the individual consumers who are not rich are saving or paying off debt, and the U.S. trade balance, is growing worse. So just on the basis of the current account and capital then the U.S. economy must shrink since neither the private sector or the public sector wants take on more debt while the rest of the world does not want more U.S. goods, but rather wants us to keeping buying theirs. Hence China and Japan furiously buy U.S. Treasuries to try to keep the game going for their exporters.
This does not mean there is not problem with a crude Keynsian solution of just more Government spending. Keynes himself was far more subtle and would point out that the U.S. situation of 2010, with a 1/2 trillion dollar chronic trade deficit, is very different than the U.S. situation of 1933, 1937, 1946, 1975, or 1982-83 (yes, Ronnie was a classic military Keynsian, as he cut taxes while expanding the military budget of the day by 1.2% of GDP, taking it from 4.9 in 1980 to 6.1 in 1983. Dubya did a similar thing with both Defense and Homeland Security spending while cutting taxes in 2001-2004 period.) http://www.truthandpolitics.org/military-relative-size.php
My favorite economic seer at the moment, Econospeak, explains, at the bottom of referenced post why the U.S. needs more and more of the Keynsian drug “A deficit country is likely to require more stimulus more often and must finance to some extent externally. This second condition is less sustainable. You would think we wouldn’t have to argue about this.”
http://econospeak.blogspot.com/2010/08/current-moment-in-macropolicy.html
“2. Has federal Treasury political support to new Keynesian interventions preventing the risk of a double-dip, or the debt-to-GDP, the fiscal deficit-to-GDP and slightly changes from Chinese Central Bank policy gives no fiscal space for those options?
Rewording, I see the question, do either the trajectory of US fiscal deficits/debt to GDP ratio or the prospects for reduced Chinese demand for this debt limit the ability of the US government to implement a second round of stimulus? Again there are two questions.
a) I think the attempt to impose a mechanical rule for fiscal debt/GDP are misguided and have no basis in the historical evidence. The reason is that fiscal deficits are endogenous: they are jointly determined by private sector debt growth, the external balance, terms of trade, and other factors that influence both the numerator and the denominator. (And politics, of course.) Economics has a lot to say about the exact ways these factors interact, but in any given situation you have to evaluate policy on the basis of the full set of variables. For instance, to make an obvious point, on the one hand the US has for some time had a structural trade deficit of substantial proportions, and the economy has organized itself around chronically high private and public deficits. (We are biased toward the production of goods financed by these deficits: housing, military goods, etc.) On the other, the dollar remains the world’s primary reserve currency, and this fact permits the US to borrow much more than others might–the “exorbitant privilege”, in Eichengreen’s term. (Portugal too could borrow much more if the ECB were willing to underwrite all your debt, which they aren’t. We don’t have this problem with the Fed in the US.) In a nutshell, I don’t think the US faces an immediate constraint on its ability to market its public debt, and the deeper problem is the current account imbalance that necessitates this debt.
b) There are many aspects, some rather complex, in the China-US financial relationship, but the broad outlines are simple. China, along with the other surplus countries, finances US net borrowing, and the reason this net borrowing needs to be financed is that these countries have surpluses vis-a-vis the US. In principle, the solution is rebalancing, which would mean less financing and less debt, simultaneously and equally. In real life, of course, there are potential potholes in this road. The main risk is that there could be a sudden stop if confidence in dollar assets drops unexpectedly. This risk is ever-present and is proportional, more or less, to the scale of dollar recycling. Therefore a gradual Chinese retrenchment, if it means reduced trade surpluses, directly or indirectly, with the US, would be very positive for the world economy.
But it’s not only China. The US runs deficits with the EU, the oil exporters and just about everyone else. We need rebalancing on every front. This would remove much of the need for Keynesian stimulus in the US. It should be obvious: a country with a roughly balanced current account finances episodes of fiscal stimulus domestically. A deficit country is likely to require more stimulus more often and must finance to some extent externally. This second condition is less sustainable. You would think we wouldn’t have to argue about this.”
But apparently Phil, with folks like you, the answers for our problems is “tax cuts for the rich” and “bomb Iran!!” (Which of course means borrowing more from abroad to pay for the tax cuts and the wars, but those deficits are okay, deficits for poor people’s medical care and education, are to build bridges, trains, and roads in the U.S. those are bad!! since the riff-raff don’t learn to be self-reliant!! And about those tax cuts, there is no guarantee that very much of that money will be spent or invested in the U.S., as it may be consumed in trips abroad (5-star hotels in London, Davos, and Paris are expensive) e expri eme tmoney )
Hawes
When I teach the Marxist dialectic to my Comparative Government students, I point out that Marx described the evolution of human politics in fairly accurate terms. Thesis, antithesis, synthesis.
Where Marx went wrong was looking at industrial capitalism (thesis) and assuming a proletarian revolution (antithesis) that would lead to a socialist worker’s paradise (synthesis).
Lenin blamed the failure of proletariat revolution on imperialism.
But the real reason was the increasing rise (beginning in Bismarck’s Germany) of a welfare state.
The result is that you have a thesis (industrial capitalism) challenged by an antithesis (socialist agitation) that lead to a synthesis (welfare state).
Social democracy is – I believe – a perfect result of the dialectic.
A Guest
@Yutsano: our supercarriers are ~1000 feet long. You cannot land a 747 in 1000 feet.
burnspbesq
A large part of why discussions like this tend to go nowhere is the inadequacy of the term “free market.” it’s a term that (like “conservative”) no longer has a commonly understood meaning. As a result, people end up talking past each other.
I have two goals for our political economy in the near term.
1. With the exception of government procurement, I’d like government not to be picking winners and losers. Let markets (in the sense that “market” means the collective action of autonomous actors deciding for themselves what to produce and what to consume) decide. That means a number of things, but in the interests of time I will mention only one. No more subsidies to politically favored activities. And by “subsidies” I mean both direct cash grants and favorable tax treatment. To cite only one obvious example, the fastest way to stop the environmental disaster that is the production of ethanol from corn is to make it compete on its own merits on a level playing field. And if a research project can’t be justified in the absence of the tax credit, it probably shouldn’t happen.
2. We need to have an adult conversation about taxes. We need to decide what goods and services we want government to provide, and create a tax system that can efficiently raise enough money so that we have a budget surplus of 1-2 percent of GDP every year after paying for those goods and services (we do need to retire that debt someday). I’ve spent my entire adult life practicing tax law, and based on that experience I have three broad thoughts about the design of a rational tax system. First, it has to be simple. Any system in which experienced tax professionals have to hire other professionals to prepare their returns is irretrievably fucked up. Eliminating the use of tax deductions and credits as a way of providing indirect subsidies is an essential step in any tax system redesign – that’s where most of the complexity comes from. Second, we have to accept that corporate income taxes will never be a major source of revenue in a world where we respect other countries’ sovereign right to set tax rates. I’m not convinced by any of the projections about the revenue effects of moving from our current mishmash of residence and source based taxation of international activity, but every other major industrialized country is moving away from residence based taxation, and we may end up screwed if we don’t fall in line. Finally, we need a VAT. It’s the most efficient way to raise the money we need.
Tim Connor
To return to your psychobabble about the used car market, are you really under the impression that “Cash for Clunkers” is what pushed the prices up? Are you that clueless about supply and demand?
For some time, it’s been clear that the used car market was drying up. This is because the many (financially foolish folk) who were selling “nice” used cars and buying new ones, weren’t doing so any more.
This wasn’t because of “Cash for Clunkers”. It was because they could no longer afford to give away marginal value in their existing car to get a new one.
In very simple words –they couldn’t afford it. This phenomena did not occur because of “Cash for Clunkers”.
You can lecture me about markets when you exhibit a grasp of their basic dynamics.
El Cid
@Tim Connor: As I’ve pointed out (and probably many others), the market for used cars had been strengthening for years before the Great Recession. Having purchased used cars throughout much of my life, it was a lot more difficult getting comparatively not ancient high quality (Honda, Toyota, etc.) vehicles without 8 million miles for the sorts of prices you used to find. Got to the point where I had to start coming back and thinking about a new car because decent used cars were so expensive themselves. Which is how it should be, but it just wasn’t a situation to my advantage, which is what the entire Universe should be about, of course.
Michael D.
I agree. For Free Markets to succeed, we need to have a lot of welfare in the states!
baldheadeddork
Hey E.D. – are you ever going to go back and address the errors in your C4C posts yesterday? Or do you think this is like a libertarian blog where you don’t have to be accountable for anything you say. (See: McMegan)
flukebucket
@victory:
Thank you so very much. I have heard this at libertarian sites and wondered if anybody else had ever heard it too.
morzer
@Yutsano:
Actually, Japan would be delighted, and most of Europe would shrug and get on with life. The only states that might object would be the Eastern European states like Poland, and for somewhat valid reasons. It’s always comforting to assume they all desperately want us around, but in many cases it simply isn’t true.
I also hate to point this out, but corrupt and wasteful as defense spending is, it really isn’t the key issue when it comes to reducing the deficit.
Maxwell James
@E.D. Kain
The welfare state and free markets are not merely compatible, they are vital to each other’s success.
This is a very refreshing statement, and yet it really crystallizes the irritation I feel with both political parties – but especially the Republicans.
While the Republicans have always resisted increased regulation of business, their strongest populist movements have focused on attacking or eliminating welfare programs. Indeed, “welfare” is still pretty much a dirty word throughout most of the country, and that’s a legacy of Republican attacks for a period of over forty years. The growth of the “Tea Party” in opposition to healthcare reform and housing bailouts is only the most recent example.
At the same time, I hear your implicit criticism of the Democrats, whose regulatory bent has always had less to do with controlling negative externalities of business, and more to do with preserving the economic status quo – particularly since the Fordist compromises of the 30’s and 40’s. That served the Democrats well when American businesses produced jobs by making things in America, but it has led to their increasingly plutocratic image with the advent of offshoring & a global economy. One has to look no further than the weak reforms recently instituted in the financial sector to see plenty of evidence for this.
Like you, I’d prefer to see a _free-er_ market with a far more robust safety net. But as long as one party seeks to dismantle the safety net entirely, and the other seeks constantly to return to the status quo ante, I’m afraid such a society will always be out of reach.
mclaren
Market capitalism ultimately doesn’t work. Unfair competition in a marketplace leads to the Confederacy, but fair regulated competition leads to Enron.
Regulation of free markets doesn’t work because of regulatory capture, which is inevitable. Fair competition in free markets doesn’t work because all industries eventually climb a curve of efficiency to the point where there’s no more meaningful improvement possible, and then you wind up with companies winning by cheating and lying and scamming since there’s no significant improvement in the product that you can make.
The Cold War proved that communism doesn’t work in the real world. Now the end of the Cold War is proving that capitalism doesn’t work in the real world.
The endpoint of free market capitalism is the world shown in Norman Jewison’s original 1975 movie Rollerball, a corporate tyranny where everyone is a wholly owned slave and most are unemployed by automation.
Very few jobs will be left. Automation not just by machinery but by computers that perform most of the current high-skill work like surgery or trading hedge funds or desgning jet planes or doing graphic design or architecture for buildings is the wave of the future. When you read a little about the collaborative online generative systems that use genetic algorithms to design more efficient engines or more efficient antennas by using evolutionary algorithms, your mind gets blown. These algorithms don’t think like people at all. And they produce far more efficient designs than people can create.
At some point in the foreseeable future, so many middle class people are going to get automated out of their jobs that a welfare state won’t work as a solution.
Capitalism as we know it operates by relentlessly increasing efficiency. Trouble is, when the efficiency gets so high that most people are out of work, society breaks down. Market capitalism is over. Stick a fork in it, it’s done. It’s too volatile, the gyrations are too extreme, businesses can’t plan for the ever-increasing disruptions, it creates too much concentrated corporate power in too few monopolies, and it automates too many people out of a living.
Something is going to have to replace market capitalism and the welfare state. We don’t know what it’ll be right now, but when we get to the point where we’ve got one person working at some high-skill ultra-high-level job like biomedical research that computers can’t yet do to support 5 unemployed people who used to be electrical engineers and graphic designers and receptionists and surgeons and newspaper reporters and radio DJs, that’s not a sustainable model for an economy.
Something’s going to have to change.
mclaren
@burnspbesq:
In a world full of stupid, this is the Mount Everest of idiocy.
Translation: you want to live in Somalia. Because whenever government enforces basic regulations, like the Universal Commercial Code, it gets into the business of picking winners and losers.
You must be in the top 1% burnspbesq, because the stuff that comes out of your mouth is so moronic it passes beyond mere mongolism into a bacterial level of reasoning.
And as for keeping the government in the business of procurement — what an example of grotesque failure. Read Chalmers Johnson’s “Economic Death Spiral At the Pentagon.”
Anonymous At Work
E.D.,
This is why I refer to taxes on the rich as “Anti-revolution fees”. The other reference I would give is Grapes of Wrath, Chapter 24 (I have it taped up near my desk) for a discussion of “turkey hunting clubs” during the Great Depression: the poor laborers spending Sunday, armed to the teeth, marching through town to “hunt turkeys”.
The Social Contract is not binding unless we accept it as such. I keep that in mind when talking about “that’s life” with extreme libertarians and soak-the-poor types.
David Brooks (not that one)
Erik, as an ex-European social democrat, I am really worrying that I am becoming a liberaltarian or whatever it’s called.
A reminder: the “Free Markets Solve Everything” crowd seem to want to return to Victorian laissez-faire (or is that a glib generalization?). It may have worked for the winners(*), but eventually the results of the economy led to such a widespread sense of moral revulsion (led by loud and well-off social reformers and one novelist in particular, in England) that popular regulation and other legislation came into effect to protect the victims. There are people who try to evade the subject by claiming markets are amoral. Well, an amoral market can have an immoral outcome, and our common humanity should recognize that.
(*)although I want to acknowledge the uncomfortable feeling that the era of worker exploitation bootstrapped the enormous bank of industrial and “ideas” capital that we are still living off, if not drawing down.
brantl
The right wing idea of “Free Enterprise” is that there is very little if any regulation, and the way to get your rights is to sue for legal infraction. (They also bitch about lawyers, but what did you want, consistancy?) It’s a conservative pipe dream. That invisible hand is up their asses, twiddling their prostates.
What looks like “successful Free Enterprise, with little government intervention” is where government original set up strong fundamental regulation that doesn’t suffer policy reversals all the time, only minor legislation has to be added to it, because it was written strongly in the first place. This has happened in countries where they already had historical examples of cautionary tales (THAT THEY PAID ATTENTION TO), they then set the strong, early regulations that only needed minor tweaks since then. These countries, then, only get trouble when they buy into the economies and laws of countries that don’t do this. This is how the U.S. became a drag on the U.K,, Canada, Germany, etc.; their economies were only screwed up to the extent that they were involved with US.
Bill Murray
@burnspbesq:
What about funding for new technologies that may someday take over for current technology? Isn’t that picking winners and losers? A huge amount of all military spending (including but in no way limited to procurement) is picking winners and losers. As markets don’t really respond to the poor and powerless, should the government not fund programs in these areas because it would be picking winners and losers?
To me it makes much more sense to pick some winners and losers, but the key is basing the choice on more than political power and ties. This does create some problems with isolation of the decisions, but these seem to me to be less severe than the alternative.
Lihtox
@ED: Intriguing thought: people can’t be free to enter a free market if they are terrified of starving to death. Perhaps this is the converse of “corporations are people”: this is “people are corporations”, and in a free market you have to be prepared to let corporations fail and die.
IM
Once again I want to say that neither the Netherlands nor Ireland or the scandinavian countries are that unregulated. Some aspects of the labor markets are less regulated than in Germany but that’s about it.
health, product safety, workplace safety, environment and so on are all as heavy regulated as in Germany, France etc. And we are talking about EU-members anyway. So careful about this liberal scandinavia etc. slogan.
crack
In Singapore the Government is incredibly involved in the economy. It owns airlines, newspapers, and tv stations. It also owns or directs investment in a lot of other industries.