State Guaranteed Supplementary Income

[boost]

I've read this one article. Seems like an interesting idea. Anyone care to explain why this is dumb? "Everyone will just be lazy and not work" seems to be a poor argument against.

I think I could totally get behind abolishing food stamps, rent assistance, etc. if this were implemented properly. Ridding ourselves of those bureaucracies would free up a lot of resources to ramp up family services, that would ensure children aren't being neglected. After all, I don't really give a damn if an adult is using their government assistance to get high-- but using money that should be going to feed kids... but then again, that's already happening, since it's not uncommon to have people offer a discount on your grocery bill if you pay them cash and they use their foodstamp card.

blah blah, I think I'm rambling... what are your thoughts on the issue? Here's a link to the NYT article: http://www.nytimes.com/2013/11/17/ma..._20131113&_r=0

[Savy]

Anything that enables people to live better lives whilst reducing the pull of big companies and goverments on their lifes is a + in my book. But I don't know anything about US welfare, I don't know as much as I should about UK, so I can't really comment on whether it's plausible or not.

[Renton]

reducing the pull of big companies

Yeah I hate that pull that allows me to buy life supporting goods for extremely cheap prices.


Re: the policy, I certainly like it a hell of a lot more than the almost random redistribution we have now. But if it's per-head (as in per child), then it sucks. It's also a lot better than universal healthcare, which has fundamental problems with inequitable distribution since people choose to life health-riskier lives. If you are gonna dole out cash to the poor, it should be done equally.

[Savy]

Yeah I hate that pull that allows me to buy life supporting goods for extremely cheap prices.

Is that what I said? I'm pretty sure that's not what I said. Probably because that's not what I said.

[boost]

Yeah, I mean, that's what I'd like to figure out. Is it plausible? Something like 10k seems like the figure necessary to both be enough to assist those working full time making minimum wage, and not inspire mass lethargy. Is 10k plausible if we got rid of the current welfare apparatus?

[rong]

10k per person? per household? What about bums with 8 kids? But more importantly, what about republicans?

[jackvance]

I've read this one article. Seems like an interesting idea. Anyone care to explain why this is dumb? "Everyone will just be lazy and not work" seems to be a poor argument against.

How are the rules regarding unemployment checks now in the US?

[boost]

10k per person? per household? What about bums with 8 kids? But more importantly, what about republicans?

Yeah, good point. Like, it's gotta be a working age adult, right? What's working age? As for a bum with eight kids.. well, idk, we're not absolutely obliterating all assistance programs, and I think a bum with eight kids is such an outlier that it's even worth discussing when hashing out the very basics of this scheme.

How are the rules regarding unemployment checks now in the US?

I really know next to nothing about our unemployment system.

[The Bean Counter]

Shock horror, people petition to be given extra cash for no extra output in Switzerland!

If the comments section in the article is accurate, I gather the suggestion for the US is that only 21yo+ are elligible, all other subsidies for the poor are abolished and each and every person is given $10k with no questions asked. Those "who make $21k-$50k a year will have some 1/3 of the $10k taxed back and those who earn over $50k a year will have 50% of it taxed back".

I guess this can only be shown as affordable because it's such a low amount relative to the current support (ignoring enormous transition costs)? How would this reduce poverty if so? I mean, would $10k even cover rent for an unemployed person in the US?

[Savy]

Dunno what it's like in US but in the UK you can easily live off 10k a year in most places. I lived in Guildford for 3 years with less than 7k a year and that shits expensive. Although my rent was only £340 a month which ain't too bad.

[spoonitnow]

Seems pretty dumb. Go redistribute the wealth somewhere the fuck else.

[boost]

Seems pretty dumb. Go redistribute the wealth somewhere the fuck else.

I like when you start troll discussion threads, because the discussions are often informative. This, however.. what are you even..?

I guess I'm just never quite sure if you're smart, yet prone to ideological foolishness, or if you're just constantly trolling. I'm not saying the concept is perfect, or even sound, but "OMG COMMUNISM!" just makes you an intellectual chump.

[a500lbgorilla]

I really don't mind the idea of more redistribution, I just don't have enough understanding of the whole of economics or economic first principles to gut check these ideas.

I believe that a big pile of cash is better off spread evenly among a big group of people than concentrated with a few. The many will generate more organic demand and drive markets and innovation in an intellectually more pleasing avenue. And it sounds to me like you'll take 1/15th of the economy and reseed the economic bedrock of demand in the country.

[a500lbgorilla]

Seems pretty dumb. Go redistribute the wealth somewhere the fuck else.

This guy says you just want to live in a West-Indies style slave society and I don't think that's a nice thing to want.

http://www.washingtonpost.com/blogs/...o-you-live-in/

[a500lbgorilla]

I'm a big fan of redistribution, so I say bring it on.

Then when Fox News runs story after story about the persistent cruft of society, I'll say fuck those guys cut my damn taxes!

[wufwugy]

This is very similar to a negative income tax, where people with low enough incomes get more tax than they paid. It's a conservative idea and is hugely awesome. It should be the backbone of a proper safety net that includes state-funded education and healthcare. Also, it doesn't have to be paid for by investment or savings income. We could implement this while lowering investment taxes and raising consumption taxes. This would work better for everybody, as it distorts the market the least and optimizes innovation. Social mobility, both in the Scandinavian way of having no low class and in the Singaporean way of producing lots of millionaires, would also be optimized

People may take contention with the idea that it's a conservative idea, but keep in mind that welfarism is also a conservative idea and the first welfare state was created by a conservative government. Things like welfarism only appear to be non-conservative today because the ideology has been bastardized into aristocrat-ism. The Bismarck and Friedman conservative understood that the welfare state is essential to a properly functioning capitalist state

[wufwugy]

Actually, I shouldn't say "aristocrat-ism". I'm still weeding my way out of a lot of prejudices brought on by the overwhelming populous reaction to the financial crisis and recession. The folly of the conservative movement really hasn't been about any sort of belief that rich people are better or deserve more, but about private protestantism, which with the Reagan Revolution, became the backbone of the Republican Party. The GOP basically moved from conservatism to political evangelism, but are still called conservatives. Unfortunately for everybody, they will be unlikely to shed the religious right from their ranks for a long time. In hindsight, the GOP fucked themselves by taking the dispersed and unpolitical religious voters and turning them all into just one party and politically active.

[oskar]

I don't pretend to understand this on the grand scale of things, but I did have an economy teacher who was saying that this is absolutely the way to go 15 years ago, and that the only reason we're not already doing it is politics and/or an if it's not broke, don't fix it - attitude.

[Renton]

The reason why libertarians have a problem with things like this (or at least I do) is that these socialist policies don't even do what they are purported to do. Whether redistribution of wealth is correct or not is irrelevant because its never been done the way it should be done anyhow. It isn't a neat and clean steal from the rich and give to the poor like it should be, the rich have political power which enables them to weasel out of the deal. So its mostly the middle class that gets fucked. And the whole point of these policies is to bolster the middle class.

It's like rent control, the whole point of rent control is that its meant to keep rent affordable for people, but it invariably introduces scarcity which makes it much harder to find an affordable apartment, providing you are not one of those lucky people who is locked into a rent control contract. Well meaning socialist policy fails again, having the exact opposite of intended effect.

Anyway I'd love to see a system like this that is equitable and fair put into practice, even if I disagree with the concept. It's a pipe dream though, at least for America.

[wufwugy]

The reason why libertarians have a problem with things like this (or at least I do) is that these socialist policies don't even do what they are purported to do. Whether redistribution of wealth is correct or not is irrelevant because its never been done the way it should be done anyhow. It isn't a neat and clean steal from the rich and give to the poor like it should be, the rich have political power which enables them to weasel out of the deal. So its mostly the middle class that gets fucked. And the whole point of these policies is to bolster the middle class.

It's like rent control, the whole point of rent control is that its meant to keep rent affordable for people, but it invariably introduces scarcity which makes it much harder to find an affordable apartment, providing you are not one of those lucky people who is locked into a rent control contract. Well meaning socialist policy fails again, having the exact opposite of intended effect.

Anyway I'd love to see a system like this that is equitable and fair put into practice, even if I disagree with the concept. It's a pipe dream though, at least for America.

A couple points:

It isn't socialist, but I understand why you would use the term. Everybody (including my past self) calls this sort of thing socialism, but it's actually welfarism. Socialism and welfarism are two distinct things. Socialism is mainly a counter to capitalism, but welfarism is used in conjunction with either. Most of what people label as socialism -- even in Scandinavian countries -- is really capitalism with welfarism

Rent control sucks. Market distortions should be minimized

Redistribution from rich to poor isn't exactly important for a strong welfare state. In fact, it might be a less optimal way to do it. That is very counterintuitive to some people and will piss off most people, but it may be true. What works is a welfare system that isn't paid so much by taxing wealth but by taxing consumption (which includes the wealthy). It isn't that this burdens the poor; instead, it just means more dollars spent by every class goes towards revenues for services. It's basically like instead of loads of electronics sales and crappy health coverage, we'd get not-so-much-loads of electronics sales and good health coverage, and this would overall boost electronics sales through indirect means of providing more stable growth and consumption due to lowered bankruptcies and such

There is so much misinformation about this and it is just as much on the liberal side as any other. Sweden, for example, has very high consumption taxes, lower than US business/investment taxes, and fewer regulations on business than the US, yet it is propped up by liberals as a bastion of equality that taxes the rich and regulates businesses

http://www.slate.com/articles/busine...ed_states.html

[Renton]

Well for one thing it's pretty much pointless to give the rich 10k a year like everyone else. It's just a sleight of hand trick cause obviously they're getting dicked in the deal. You might as well save the paperwork and have them pay 10k less taxes. Thats what the american welfare system attempts to do, only its skewed towards women with dependents.

I don't understand why we don't just hire the wellfare rolls to do menial government tasks like data entry or clerk type stuff, and set them on a public service career track including training etc. God knows government is big enough to be the worlds biggest employer, it might as well employ people who are otherwise left behind by the system, and it makes the whole thing a lot more efficient.

[oskar]

My understanding is that this is not about redistribution of wealth. It does get rid of a lot of beurocracy around welfare, but it primarily gets a lot of money moving which is good for the economy as long as it stays in national circulation and doesn't ramp up inflation. There are artificial ways to do that is to give it an expiration date (demurrage)which has already been done, and is done here in austria to some success regionally. Or you could just count on people investing altruistically - not necessarily meaning for welfare, but to further the national economy either by getting together to fund small businesses with small risk/high reward or by simply buying stuff locally.

[Renton]

I'm just tired of all the aimless railing against big corporations just because they're big corporations. Sure there's some corruption and dirty deeds being done but by and large they are massively beneficial to people, especially the poorest people. And they're a hell of a lot more beneficial to the poor than all the social programs in history combined.

[boost]

Captialism is the best system so far, so why would we ever change it!!!!!!!! ARRRRGHGHGHGH!!

A good thing did not get good by it's adherents sticking to what was previously good.

But yeah, ideological leftist policies are just as bad as ideological policies of the right. They should always be met with "Well, sure, that sounds good, but how about you show me some fucking data showing this will be beneficial?"

[wufwugy]

I'm just tired of all the aimless railing against big corporations just because they're big corporations. Sure there's some corruption and dirty deeds being done but by and large they are massively beneficial to people, especially the poorest people. And they're a hell of a lot more beneficial to the poor than all the social programs in history combined.

That's so esoteric, I'm not sure how it could be quantified. They also have created Banana Republics. Capitalism advanced social mobility unlike anything else, but without social programs it is unlikely that social mobility would have become a thing for nearly as many people as it has. Capitalism made it so lucky people could move up in society; social programs have extended that to less lucky people. Not to mention the humanitarian effect.

[d0zer]

Hey, remember what capitalism was like before labor rights? I'm not suggesting we throw the baby out with the bathwater, but what boost said.

[boost]

Yeah, I'm always baffled by people who disregard the level of variance in relation to the length of the human life.

[spoonitnow]

Giving everyone $10,000 doesn't solve any underlying problems like education, the national debt or dubstep. Instead, it just buys more votes.

[Savy]

Giving everyone $10,000 doesn't solve any underlying problems like education, the national debt or dubstep. Instead, it just buys more votes.

If you read the article it apparently does help with education.

[boost]

We'd have to see a comprehensive evaluation to really say. The dismantling of many of the welfare bureaucracies, even after subtracting the supplemental income checks, could potentially leave a very large surplus, which could be applied to education, paying down the debt, and throwing mass dubstep raves/the funding of concentration camps for dubstep fans and producers, depending on your preference.

[a500lbgorilla]

I agree with spoon. Unless you can fix everything, you shouldn't try to fix anything.

[spoonitnow]

I agree with spoon. Unless you can fix everything, you shouldn't try to fix anything.

When given the choice of only one of a band aid or a cure, you shouldn't go with the band aid.

[wufwugy]

When given the choice of only one of a band aid or a cure, you shouldn't go with the band aid.

A solution is multi-tiered. Even if it isn't ideally, it still would be pragmatically

There is a trade off with all different kinds of programs. For example, the Affordable Care Act will drop healthcare costs over the long run by several points, but it still won't get as low as the most well functioning countries because the system isn't single payer. However, it probably will allow for innovation in some areas that a single payer wouldn't.

We need a national VAT, negative income tax, and state funded education. Those would go a long way to solving the issues raised ITT

I think it's important that people not think of welfare in terms of socialism. Socialism isn't really any different from communism, but they are both very different from capitalism and welfarism. In a nutshell, socialism is production based on need. This is what the Soviet Union did, and it was their main mistake. Instead of production based on supply and demand, production was set based on need and prices were set to match, and this made a system that was losing money on production because prices didn't match costs. Capitalism differs from this pretty much in that it's supply and demand, so if something costs a lot, it will be priced high. That is the real difference that turned the US into a juggernaut and the USSR into a cesspool.

This isn't even about governments or private ownership, because there are many examples of state capitalism, which is very not socialism. I say this all because when people think of Obamacare, they tend to think of socialism, but it's not so in the slightest. It's still capitalism with welfarism. We don't have any socialism here. Everything is priced based on costs

It's important to make a distinction that socialism keeps people down because they're not allowed to achieve anything beyond their class, but welfarism doesn't do this. Instead, welfarism helps keep people from falling too low, and it has very little to do with how high people can climb

[rong]

Wouldn't this put s shit ton of government employees out of work? I don't see anything mentioning this but I imagine that's a lot of people.

what we have now is a half assed attempt at helping poor people. Give them just enough to survive and ensure a large population of worker bees. So a more generous approach a great idea. But what about all the people who hate their shitty jobs? Say garbage collectors, lots of shop workers, factory workers etc? I imagine a lot of them would at the very least cut their working hours or get a different job that pays less but that they hate less. So in order to compensate for that and maintain levels of production and a sales force they will have to increase wages, which will lead to higher prices which will offset the expected rise in living standards.

[wufwugy]

Wouldn't this put s shit ton of government employees out of work? I don't see anything mentioning this but I imagine that's a lot of people.

what we have now is a half assed attempt at helping poor people. Give them just enough to survive and ensure a large population of worker bees. So a more generous approach a great idea. But what about all the people who hate their shitty jobs? Say garbage collectors, lots of shop workers, factory workers etc? I imagine a lot of them would at the very least cut their working hours or get a different job that pays less but that they hate less. So in order to compensate for that and maintain levels of production and a sales force they will have to increase wages, which will lead to higher prices which will offset the expected rise in living standards.

Scandinavia does this and it works. Their garbage collectors make an appreciable living and the offset isn't 1 to 1. Their economies and living standards are the best in the world

People tend to only discuss government when it causes distortions, and only discuss individuals when they don't. Individuals are not perfect actors; our consumption habits create all sorts of inequities and distortions as well. Some social programs smooth out the creases of that distortion by making sure that essential welfare and services are always available. Even in a healthy, dynamic economy, many individuals make distorted choices that end up dropping them through cracks, and this hinders everybody else in the society. Scandinavia has demonstrated that it's possible to keep this from happening, and that everybody is better off for it.

[wufwugy]

A blogger of the economic persuasion that I tend to think has the data behind it the most (modern monetary theory), takes a crack at how he thinks Guaranteed Income should work

http://www.morganwarstler.com/post/4...e-market-based

[spoonitnow]

I'm lazy. Pay me.

[wufwugy]

I'm Spoon. I don't read things.

[Renton]

Wuf, that welfare system kicks the ass of the current welfare system. Unfortunately it would never come to pass because people would find some way to label it racist or sexist. Likely a huge majority of those people working for 1 dollar an hour would be single mothers and/or minorities.

I love the idea of trading the minimum wage for a subsidized income system. The minimum wage is completely retarded. That system takes what the minimum wage attempts (and fails) to achieve and actually achieves it.

[wufwugy]

Yeah I love it. May not be feasible at the current time, but things always change over the years. Not only would this system make finding a job so easy, but it would make moving up based on merit easy as well. All in the kind of industry that you like. Without the fear of losing your livelihood if something goes wrong, and the economy would be working at full capacity. Plus it's really cheap

[Renton]

I still believe that any allocation of money that isn't determined by the market is going to be less efficient than the alternative. That really must be recognized and the hope with any coercion-based system is that you get something in return for that loss of efficiency. The cost-benefit of conventional welfare and the child tax credit is enormously bad. A system like that one I think is a lot less costly.

[boost]

Blah, it's only less efficient if you cherry pick which factors matter. You're making the rational actors assumption.

What sort of positive effect does living in an egalitarian society have on efficiency? Why is efficiency the only important metric?

[Renton]

Blah, it's only less efficient if you cherry pick which factors matter. You're making the rational actors assumption.

What sort of positive effect does living in an egalitarian society have on efficiency? Why is efficiency the only important metric?

I'd like an elaboration of the first paragraph.

I think efficiency is pretty important when you consider that it feeds into everything good which affects everyone. A completely efficient market will hire the maximum amount of employees, have the cheapest prices of life supporting goods, an grow at an optimal rate, the benefits of which cascade over all.

[boost]

I'd like an elaboration of the first paragraph.

I think efficiency is pretty important when you consider that it feeds into everything good which affects everyone. A completely efficient market will hire the maximum amount of employees, have the cheapest prices of life supporting goods, an grow at an optimal rate, the benefits of which cascade over all.

You're making a ton of assumptions though.

Like, the lowest possible unemployment rate, due to myriad factors, could be X percent. And not supporting that X percent leaves an uncared for group of people in our society. Having such a class can lower the morale of the working masses, or have some other unpredictable effect.

I'm not sure I even care to argue that efficiency shouldn't be the prime concern, because at a glance I'm pretty sure it should be. But you are jumping to freer markets make for more efficient economies. Why do you make this jump?

[Renton]

You're making a ton of assumptions though.

Like, the lowest possible unemployment rate, due to myriad factors, could be X percent. And not supporting that X percent leaves an uncared for group of people in our society. Having such a class can lower the morale of the working masses, or have some other unpredictable effect.

I'm not sure I even care to argue that efficiency shouldn't be the prime concern, because at a glance I'm pretty sure it should be. But you are jumping to freer markets make for more efficient economies. Why do you make this jump?

Well unemployment drifts quickly to zero the less regulations there are. Government regulations create unemployment by setting the prices of wages, making some business practices illegal, or banning entire industries.

Dunno if you read that article wufwugy posted but basically there's a very fluid market for labor just like there is for any other tangible commodity. If I have a bushel of soybeans there is always someone to buy that bushel, its just a matter of what price they pay. If I sell it right or tomorrow or next week I'll get a different price but it will always be sold if I need to sell it. Labor is the same way, if people could work for 1 dollar an hour there would be no unemployment.

Now next comes the argument that it's inhuman to pay someone a sub-living wage. However, there are a lot of problems with that argument not least of which is the fact that the price of something IS THE PRICE OF SOMETHING. There's nothing that can be done to change that. No one pays double for milk for no good reason and no employer pays someone double what their value is unless they are forced to. And that force has major effects on the existence of that job position.

Yes there will still be an "uncared-for group" but everyone would at least have a job and something to contribute to society. You can dispense welfare without disrupting this, and wufwugy's article attempts to achieve that. Under current systems in America, there are 10s of millions of people who have absolutely no incentive to find a job. Their government check is 1100 dollars a month and the best job they can find pays 900 a month, but they can't get both so they don't work. So that's a shitload of productivity getting flushed down the toilet IN ADDITION to the government stipend.

I'm sorry it seems like I'm condescendingly spouting econ 101 here but I'm just trying to illustrate that of course freer markets are more efficient. When market forces coordinate the prices of everything, that IS maximum efficiency.

[boost]

You're all over the place. You're espousing the benefits of a free market, and telling me how the freer it is, the more efficient-- then you call back to wufwugy's article, holding it up as some sort of example. Yet what sparked this all was your gripe about that article, where you took issue with it not being a free enough market.

There are shortcomings to a free market. We can implement systems to shore up these shortcomings, and then there are systems which attempt to do so, but actually compound the problems. You know that an absolutely free market is mutually exclusive from a humane society of today's standards, and this is why you have to carve out caveats and exceptions in the same breath that champion's the free market. Why are you committed to such doublethink?

[Renton]

You're all over the place. You're espousing the benefits of a free market, and telling me how the freer it is, the more efficient-- then you call back to wufwugy's article, holding it up as some sort of example. Yet what sparked this all was your gripe about that article, where you took issue with it not being a free enough market.

It wasn't a gripe. I didn't take issue with it, I was just mentioning that every policy has an efficiency cost and its a matter of getting some benefit for that cost. I concluded that his article had a good cost-benefit ratio.

There are shortcomings to a free market. .. .. You know that an absolutely free market is mutually exclusive from a humane society of today's standards,

I don't know that either of these sentences is true. We've debated this in the past so I'm not sure I want to rehash the topics of food inspection etc, so let me just refer to actual price coordination when I say this. I think a case can be made for government policing of business, such as inspection, fire marshal codes, child labor laws etc. But I don't see any shortcomings or inhumanity in a society where the prices of goods and services are solely determined by participants in the market. And I contend that every single government intervention of the price of anything, including labor, is destructive. This goes for direct interventions like minimum wages and price controls, but also for indirect affectors like subsidies.

and this is why you have to carve out caveats and exceptions in the same breath that champion's the free market. Why are you committed to such doublethink?

I'm not sure what you mean by this. I am definitely pro-free market all the way. But I think to be a free market purist does no one any good in a world where a completely free market would never exist. I'm just seeking compromise.

[wufwugy]

The markets work splendidly for all things that can't be categorized as Banana Republic or catastrophe. To ward off the Banana Republic, people need enough rights provided by the government. For the most part, we have those in our country. As for catastrophe, the most sensible free market plans on issues like healthcare insurance still include single-payer for catastrophic. Basically, the markets don't account for the extremes, but they beat the pants off of everything else in every other area.

[Renton]

The markets work splendidly for all things that can't be categorized as Banana Republic or catastrophe. To ward off the Banana Republic, people need enough rights provided by the government. For the most part, we have those in our country. As for catastrophe, the most sensible free market plans on issues like healthcare insurance still include single-payer for catastrophic. Basically, the markets don't account for the extremes, but they beat the pants off of everything else in every other area.

I don't think the standard citations for shortcomings of markets, such as banana republics and monopolies, can really happen in a free market. Pretty much every example in history has government to blame.

[wufwugy]

I don't think the standard citations for shortcomings of markets, such as banana republics and monopolies, can really happen in a free market. Pretty much every example in history has government to blame.

Well, if you define government as a "corporation that controls everything", then you would be right. In this context, I don't. Banana republics, namely the ones run by the United Fruit Company, had no resistance from a strong central government. They weren't endorsed by government either. Governments in Middle America were too weak and provided no rights or defense of their people.

[Renton]

Well, if you define government as a "corporation that controls everything", then you would be right. In this context, I don't. Banana republics, namely the ones run by the United Fruit Company, had no resistance from a strong central government. They weren't endorsed by government either. Governments in Middle America were too weak and provided no rights or defense of their people.

Well the united fruit stuff was more about domination from other governments with complicity from the governments of the affected Central American states, IIRC. Not an expert on this though.

I should add to this that markets do not seem to work optimally for people on the periphery. What that periphery is changes somewhat based on socioeconomic paradigm, but the disabled, elderly, sick, and children cannot function in a market system like the rest of us. I see no way to address this problem but through social security type programs.

I don't agree with this and I think the main point of contention is that I challenge the word "work" in your sentence. It's a matter of opinion and/or personal taste what constitutes what "works" for poor people. A mega-lib in America thinks everyone has the right to 40,000 dollars a year no strings + healthcare, education, etc. The analogue for that person in Switzerland or Norway believes the same except make it 80,000. I'm not trying to be snarky here, I'm just saying its arbitrary.

Markets are working wonders for the people of the periphery by giving them choices to improve their lives in whatever small way they can, it's just a matter of time. Economies in third world shithole countries are growing by double digits as soon as their governments begin letting go of control. Yes, people in these countries work for 2 dollars a day and some might consider that an outrage, but they chose that 2 dollar a day job over the alternatives, and that choice was important. If their government decided to ban sweatshops or child labor or impose strict laws on working conditions or tax business heavily, or impose a 3 dollar a day minimum wage law, most of those people would be forced to even less dignified ways of making a living like prostitution or scavenging.

[wufwugy]

Markets are working wonders for the people of the periphery by giving them choices to improve their lives in whatever small way they can, it's just a matter of time. Economies in third world shithole countries are growing by double digits as soon as their governments begin letting go of control. Yes, people in these countries work for 2 dollars a day and some might consider that an outrage, but they chose that 2 dollar a day job over the alternatives, and that choice was important. If their government decided to ban sweatshops or child labor or impose strict laws on working conditions or tax business heavily, or impose a 3 dollar a day minimum wage law, most of those people would be forced to even less dignified ways of making a living like prostitution or scavenging.

In this context, I'm not referring to peripheral nations, but to those on the edges in our own country. The freer and bullish markets can help these people to find some work in some areas, but returns are diminishing, and they end up getting to a point where the returns don't even exist. What do we do about the elderly? Some can work in some ways, but some can't. I have a bunch of elderly relatives who couldn't find work if they tried. Nobody would hire them. They're too old, slow, and cognitively insufficient. But they're still alive. If it wasn't for Social Security, some of them would be on the streets or a burden on their families. Both options are worse for the overall economy. The families can't support them, but if they were forced to, all sorts of negatives come from that. The only nuclear families that have successfully had its elderly supported by their offspring are ones with super high birth rates, far greater than any other societies. We don't live in that sort of world anymore. We need something like Social Security. Regardless, SS type programs are not fundamentally problematic. They can be structured in such a way that they make a profit while also returning benefits to those who paid into them

[wufwugy]

The markets work splendidly for all things that can't be categorized as Banana Republic or catastrophe. To ward off the Banana Republic, people need enough rights provided by the government. For the most part, we have those in our country. As for catastrophe, the most sensible free market plans on issues like healthcare insurance still include single-payer for catastrophic. Basically, the markets don't account for the extremes, but they beat the pants off of everything else in every other area.

I should add to this that markets do not seem to work optimally for people on the periphery. What that periphery is changes somewhat based on socioeconomic paradigm, but the disabled, elderly, sick, and children cannot function in a market system like the rest of us. I see no way to address this problem but through social security type programs.

[boost]

The idea that monopolies cannot exist in a free market seems pretty laughable.

Also, climate change and other calamities related to a tragedy of the commons scenario are not well addressed by the free market.

Company A can try to play the long term game by cutting greenhouse gas emissions and all that jazz, but in the short term company B will crush them. To stay competitive, company A needs to pollute to cut costs.

You can then say that people vote with their dollars, but this is nonsense, because tragedy of the commons applies exactly there same here. Even a rational actor can chose to support the cheaper and dirtier company.

[Renton]

The idea that monopolies cannot exist in a free market seems pretty laughable.

Also, climate change and other calamities related to a tragedy of the commons scenario are not well addressed by the free market.

Company A can try to play the long term game by cutting greenhouse gas emissions and all that jazz, but in the short term company B will crush them. To stay competitive, company A needs to pollute to cut costs.

You can then say that people vote with their dollars, but this is nonsense, because tragedy of the commons applies exactly there same here. Even a rational actor can chose to support the cheaper and dirtier company.

I'd suggest doing some research on monopolies. It would take thousands of words to explain how they're not really possible without being government backed, but there's a lot of compelling stuff suggesting that is the case.

With regard to the tragedy of the commons stuff, I'd agree and I think that falls under policing, which I already conceded in a previous post.

[wufwugy]

I'd suggest doing some research on monopolies. It would take thousands of words to explain how they're not really possible without being government backed, but there's a lot of compelling stuff suggesting that is the case.

What was the United Fruit Company?

[Renton]

What was the United Fruit Company?

I'm no expert on this so I won't presume to be, but at a glance, it appears to have been a virtual monopoly with a ton of government enabling by the U.S., Guatamala, and Honduras. I should add to my statement that monopolies can't exist in a free market that I am making that statement for the present day. I think the world economy was so disconnected in the 1800s that some local monopolies were possible and did happen. But in the present day context of globalization and 70 trillion dollar world gdp, I don't think monopolies are practically possible.

I should note that I don't think a situation where one company dominates an industry constitutes a monopoly. There are many other requirements for a true monopoly. Not only do you have to dominate one product, but you also have to dominate all of the possible substitutions of that product, and you also have to make it impossible for a competitor to emerge. It's incredibly difficult and probably impossible to do all of these things in a free market.

Really the only possible way for a monopoly to emerge in a free market in the present day is on a tiny scale in a very sparsely populated rural area. I'm sure no matter how free Russia makes its markets, there will be a cunt in Siberia selling Oxen for an absurdly high price. But that's hardly a global concern.

[wufwugy]

I'm no expert on this so I won't presume to be, but at a glance, it appears to have been a virtual monopoly with a ton of government enabling by the U.S., Guatamala, and Honduras. I should add to my statement that monopolies can't exist in a free market that I am making that statement for the present day. I think the world economy was so disconnected in the 1800s that some local monopolies were possible and did happen. But in the present day context of globalization and 70 trillion dollar world gdp, I don't think monopolies are practically possible.

I should note that I don't think a situation where one company dominates an industry constitutes a monopoly. There are many other requirements for a true monopoly. Not only do you have to dominate one product, but you also have to dominate all of the possible substitutions of that product, and you also have to make it impossible for a competitor to emerge. It's incredibly difficult and probably impossible to do all of these things in a free market.

Really the only possible way for a monopoly to emerge in a free market in the present day is on a tiny scale in a very sparsely populated rural area. I'm sure no matter how free Russia makes its markets, there will be a cunt in Siberia selling Oxen for an absurdly high price. But that's hardly a global concern.

I agree with this in the context of the current global economy. Dynamism is stronger now than ever before, and we're seeing incumbents fall regardless of every power provided by their incumbency. We know now that the Microsoft monopoly of the 90s couldn't have done anything to stop companies like Google and Amazon of today. ISPs are losing their hold over the country, albeit slowly and we have suffered some from their ability to keep infrastructure shitty and jack up prices unlike in places like Korea (but I'm not sure we could effectively regulate against that). Over the next decade, we will possibly see Walmart get manhandled by Amazon. And that's Walmart, one of the strongest, most monopolistic incumbents there ever was

I'm still unconvinced about how something like healthcare can be fixed purely by the markets. I mean, we had that already and it didn't work. We got Medicare and Medicaid because the private insurers weren't insuring the old and the sick because they were too expensive. Currently, the most efficient healthcare insurance programs we know of utilize government mandating of some form, even Singapore, the bastion of free market policies

[Jack Sawyer]

What was the United Fruit Company?

Read "confessions of an economic hitman" by John Perkins

[boost]

Read "confessions of an economic hitman" by John Perkins

I've heard of this book before. Care to explain who you're recommending it to, or how it relates to the conversation?

[boost]

I'd suggest doing some research on monopolies. It would take thousands of words to explain how they're not really possible without being government backed, but there's a lot of compelling stuff suggesting that is the case.

You are clearly more well read on this than I. If I get around to doing some more reading on the subject, maybe I can offer a better argument next time-- or maybe I'll just agree.

With regard to the tragedy of the commons stuff, I'd agree and I think that falls under policing, which I already conceded in a previous post.

lolwhat. What are the police policing? How is this not a trick of words which superficially "gets rid" of regulation, while still having regulation?

[Renton]

You are clearly more well read on this than I. If I get around to doing some more reading on the subject, maybe I can offer a better argument next time-- or maybe I'll just agree.



lolwhat. What are the police policing? How is this not a trick of words which superficially "gets rid" of regulation, while still having regulation?

Well let me first state that I "conceded" policing for the sake of simplifying the argument. I think that governments' efforts to mitigate externalities such as pollution can be a lot less market invasive than their efforts to overtly set the price of something. I guess I'm just saying that not all forms of regulation are created equal.

I'm not naive to think that there would ever be a market completely free of regulations, so I don't really see the point of advocating one. But as long as there are regulations I'd rather they were minimal and not capable of having a drastic effect on the prices of things or destroying entire industries.

[boost]

Some industries should be destroyed. If it can't truly be "clean", coal burning for electricity is probably one of them. Just because an industry does exist, doesn't mean it should exist, or that the only thing to extinguish it should be free market forces. The child porn (would somebody think of the children!!!) industry also should not exist, yet there need be age of consent regulations, at the very least, to ensure that the free market doesn't allow such a thing.

I'm really curious about your second paragraph. You don't advocate for it because you don't think it will happen-- am I wrong to infer you want there to be a completely free market? Do you see why people are distrusting of the true intent of Libertarians? Apocalypse Preppers are a bit looney, but generally they are harmless in that they are just building and stocking shelters, not actively trying to bring about the apocalypse. Libertarians dream of this strange free market utopia, and while they tell one story of lower regulation outwardly, they secretly harbor a desire for no government at all. Maybe I've read too far into that sentence, but I still think my point about Libertarians and the way in which people take a weary view of them is accurate.

[Renton]

Some industries should be destroyed. If it can't truly be "clean", coal burning for electricity is probably one of them. Just because an industry does exist, doesn't mean it should exist, or that the only thing to extinguish it should be free market forces. The child porn (would somebody think of the children!!!) industry also should not exist, yet there need be age of consent regulations, at the very least, to ensure that the free market doesn't allow such a thing.

I'm really curious about your second paragraph. You don't advocate for it because you don't think it will happen-- am I wrong to infer you want there to be a completely free market? Do you see why people are distrusting of the true intent of Libertarians? Apocalypse Preppers are a bit looney, but generally they are harmless in that they are just building and stocking shelters, not actively trying to bring about the apocalypse. Libertarians dream of this strange free market utopia, and while they tell one story of lower regulation outwardly, they secretly harbor a desire for no government at all. Maybe I've read too far into that sentence, but I still think my point about Libertarians and the way in which people take a weary view of them is accurate.

I can address the child porn sentence by saying that coercive means should never be allowed. Every libertarian believes in the non-aggression principle, and child porn definitely violates that.

Whether coal power plants should exist is a matter of debate. Cars on the freeway are just as damaging to the environment so should we ban cars as well? The solution to climate change will have to be more nuanced than "lets ban that." Couldn't an advocate for coal power could just as easily counter that having a world with cheap plentiful albeit polluting energy would maximize growth which would feed into technological advance so we could get to the carbon sink technology more quickly?

I'm sure there are many differing opinions on whether legal industries should exist for the production and distibution of marijuana, cocaine, and heroin as well. The problem is when you have a government outright banning an industry as a matter of taste.

To answer your question I guess I think a completely untethered so-called utopia would be better than the current status quo, and I don't think it would be an apocalypse. But I don't see the point of debating the truth of that outside of an economics classroom because as I said, it would never exist in 100 lifetimes from now. I'd rather argue for positive change to the existing system.

[boost]

I can address the child porn sentence by saying that coercive means should never be allowed. Every libertarian believes in the non-aggression principle, and child porn definitely violates that.

What constitutes coercion? I'm really not trying to be obtuse here-- in my head, many things that are necessities in a functioning economy could easy fall into a category labeled "coercive." I'd also like to know, is child labor somehow different?

Whether coal power plants should exist is a matter of debate. Cars on the freeway are just as damaging to the environment so should we ban cars as well? The solution to climate change will have to be more nuanced than "lets ban that." Couldn't an advocate for coal power could just as easily counter that having a world with cheap plentiful albeit polluting energy would maximize growth which would feed into technological advance so we could get to the carbon sink technology more quickly?

Sure, anyone could make any argument. Doesn't make it a good one. Providing the cheapest source of energy undermines development in other sources. The coal industry is in the business of burning coal. They don't want that to change. They aren't interested in doing anything else unless they have to. And that doesn't even begin on the issue of them pursuing active obstruction of the development of alternatives.

I'm sure there are many differing opinions on whether legal industries should exist for the production and distibution of marijuana, cocaine, and heroin as well. The problem is when you have a government outright banning an industry as a matter of taste.

I agree with this. Things should be banned, not because they are detrimental to society, but because their banning can be shown or expected to improve society. "Well, it's bad" is a poor argument for prohibition. Sadly we somehow didn't manage to learn our lesson on that front.

To answer your question I guess I think a completely untethered so-called utopia would be better than the current status quo, and I don't think it would be an apocalypse. But I don't see the point of debating the truth of that outside of an economics classroom because as I said, it would never exist in 100 lifetimes from now. I'd rather argue for positive change to the existing system.

Can you not see why this is alarming to non-believers? Fundamental Christians would be overjoyed if adultery, sodomy, oral sex, etc were criminally punishable. But they know those are weak platforms in this political climate, and so they stick to "pro-life" and homophobic platforms (which both are thankfully showing signs they're running out of steam) because those have a chance.

Maybe you feel like that analogy is unfair, but hopefully you can see passed any potential offense and see why I might be weary of your motives and true goals, based on your beliefs.

[boost]

Thanks, Jack. Maybe I'll pick it up, it looks interesting.

[Renton]

What constitutes coercion? I'm really not trying to be obtuse here-- in my head, many things that are necessities in a functioning economy could easy fall into a category labeled "coercive." I'd also like to know, is child labor somehow different?

Child labor is a tough argument because in the poorest countries its absolutely necessary that it be legal. Rich countries have the luxury of banning it, but in third world shithole countries people literally have kids in order to lessen the financial burden on themselves. People who treat child labor like it isn't worth discussing (i.e. they just want to ban it around the world with no exceptions) are naive to this reality. To answer your question, http://en.wikipedia.org/wiki/Non-aggression_principle . Yes to your mind things which are technically coercive, like taxation for example, are necessary. I take a more forgiving view of the NAP for the sake of practicality: forcing or manipulating a child into doing sex acts on film is aggression, the only subject for debate is what constitutes a child. The broad range of age of consent laws in the world is a testament to that fact.

Sure, anyone could make any argument. Doesn't make it a good one. Providing the cheapest source of energy undermines development in other sources. The coal industry is in the business of burning coal. They don't want that to change. They aren't interested in doing anything else unless they have to. And that doesn't even begin on the issue of them pursuing active obstruction of the development of alternatives.

You act as if banning fossil as an energy source would be a good play. It would cripple the world economy. The world isn't gonna start relying on alternative means until they are more competitive with conventional means, its just reality. As far as the fossil industry impeding the progress of alternative energy, they are really only able to do this thanks to the power of governments. You can't blame a company for acting out of self-interest. You can blame a government for being beholden to the interests of donors in the fossil fuel industry. The answer is to limit the power of governments to affect industry at all, or at least to limit the power donors have over election results. The former is probably easier than the latter. The point is that its not the free market that's to blame here.

Can you not see why this is alarming to non-believers? Fundamental Christians would be overjoyed if adultery, sodomy, oral sex, etc were criminally punishable. But they know those are weak platforms in this political climate, and so they stick to "pro-life" and homophobic platforms (which both are thankfully showing signs they're running out of steam) because those have a chance.

Maybe you feel like that analogy is unfair, but hopefully you can see passed any potential offense and see why I might be weary of your motives and true goals, based on your beliefs.

The analogy is fair, the difference is that the christian agenda is unjust and the libertarian one is just. No one knows what a minarchist world would be like because it's never happened. Those who think it would be like Mad Max are fooling themselves. And anyway, I don't think its disingenuous to to argue my side in this way, I consider it to be realistic. I think its fair to say that governments do more harm than good, and all things being equal it would be better if governments were smaller.

[wufwugy]

I no longer believe the deregulation story for the financial crisis, nor do I believe that money in politics is a problem. Those messages are the populous ones, but the populace has a knack for being wrong. It took quite a while for me to learn enough to see how

[boost]

Clearly I agree that the production of child pornography is unambiguously amoral. And of course I agree that what constitutes a child is ambiguous. What I don't agree with is that if coercion is the reason the production of child porn is wrong, that coercion can be just or acceptable in other ways. Since the analogy is deemed fair game, I'm going to run with it: I'm essentially saying you're a bible thumper, who's picking and choosing which religious tenets he wishes to support, and discarding those which are inconvenient.

I do not act in any such way. Do I dream of a day in which we have moved past this whole climate change "debate?" Of course. But I don't know anyone I don't consider a quack who thinks the solution is to flip down the lever on all the fossil fuel burning energy producers.

And yes, I can blame a company for acting in self-interest. BP and Halliburton were either negligent or complicit in burdening the public with risk, while, themselves, enjoying any benefits brought about from that risk. I find it hard to argue that they didn't act in self interest, and I can't fathom how you can excuse their actions. You are right that corporations act in their own self interest-- a self interest which at times comes in conflict with the interest of society. You believe an unbridled free market will somehow negate this conflict of interest. But saying it a bunch of times doesn't make it so. Espousing the morality of it doesn't make it so. The self interest of corporations can certainly be harnessed for the greater good, but like the thousands of explosions per minute in an internal combustion motor, they need a well engineered and maintained machine to keep them in check. Some motors are less reliable, but produce more power, and some motors are more robust, less powerful, but dependable for the long haul. (weeeee analogies)

"No one knows what a minarchist world would be like... those who think it would be like X are fooling themselves". I'm not quite sure what it would be like. Mad Max was a pretty cool movie.. infinite opportunities for those who aspire to be a hero/ultra-badass. But humor me and explain why your idea of what it would be like can't be plugged in for X.

p.s. I hate past/passed.

[spoonitnow]

I'm not really invested in this conversation, but I want to point out that amoral doesn't mean wrong/evil (ie: the opposite of right/good), it means existing without right and wrong.

[Renton]

I'm not really invested in this conversation, but I want to point out that amoral doesn't mean wrong/evil (ie: the opposite of right/good), it means existing without right and wrong.

That's an important distinction, as capitalism is often cited as immoral when it is in fact amoral.

[boost]

Thanks.

[Renton]

Since the analogy is deemed fair game, I'm going to run with it: I'm essentially saying you're a bible thumper, who's picking and choosing which religious tenets he wishes to support, and discarding those which are inconvenient.

A couple of points. First, I don't see an inherent problem with not buying 100% of the minarchist package. Second, even if I did believe 100% of it, I don't see an inherent problem in trying to push the more palatable parts of that agenda in a conversation like this. It's an utter waste of breath to convince someone like you (that is, a liberal or left leaning person) of immorality of taxation, even if I believed in such a thing. It would get us absolutely nowhere because its too extreme a position for you to meet me in the middle of. Whether the first point or the second point applies to this debate is pretty irrelevant because the objective of debate is to find common ground and persuade the other to come toward your side if only just a little bit.

I do not act in any such way. Do I dream of a day in which we have moved past this whole climate change "debate?" Of course. But I don't know anyone I don't consider a quack who thinks the solution is to flip down the lever on all the fossil fuel burning energy producers.

I'm sorry I made the logical leap from "burning coal for power shouldn't happen" to "Jabu wants to kill the coal power switch worldwide." Still it's important to remember how dangerous it is economically to impede a source of cheap power responsible for 40% of all electricity in the world. Even imposing heavy sanctions on it would be devastating, because the point is that it is cheaper than alternatives which do exist. Making it just as expensive as one of those alternatives is exactly the same as prohibiting it outright.

So I assume you are in favor of subsidizing other sources while imposing minor disincentives on coal production. There are problems with this approach. First, you're doing it in the context of a government that is beholden to lobbyists, and truth be told there be more on one side than the other (Stringer Bell, the Wire, 2002). Second, you have a small group of people diverting massive amounts of resources based on their discretion, which in tandem with the first point, introduces the possibility of corruption and incompetence, or both. So the slimy coal-backed U.S. Senator who chairs the committee for alternative energy research allocates the funds to probably unoptimal uses and imposes penalties which seem to amazingly affect some players in the coal industry a bit harder than others. Before long you have a state-enabled coal monopoly and another Senator who retires to K Street. Meanwhile, there are market solutions to this. The technology for cheaper alternative fuel is being vied for by loads of private companies. The shift from fossil WILL happen, it just has to be economically viable.

I compare this with recycling. State-sponsored efforts to recycle are ridiculous and counterproductive. The whole concept of recycling has basically been debunked, as the embodied energy involved is greater than the gain from doing it. There are exceptions to this, however. Recycling aluminum and other metals is +ev. And, not surprisingly, it doesn't take a government forcing people to do it for people to do it. There's money in it and as a result a huge chunk of the metal we use gets recycled. I think about 40% of steel used in building construction in America is recycled steel. As soon as it makes economic sense to recycle paper and plastic, we'll start doing that too, and not before, despite the best efforts of governments or anyone really.

BP and Halliburton

State-enabled yo.

[wufwugy]

I compare this with recycling. State-sponsored efforts to recycle are ridiculous and counterproductive. The whole concept of recycling has basically been debunked, as the embodied energy involved is greater than the gain from doing it.

I've tried to find out if this is true, but haven't come up with a better source than Penn and Teller, which isn't an adequate source. Do you have a better one?

[boost]

I've tried to find out if this is true, but haven't come up with a better source than Penn and Teller, which isn't an adequate source. Do you have a better one?

Again, I'm pretty sure he's right on his point that recycling most materials thought to be recyclable, is too energy intensive to be profitable. But that's still just one question that needs to be asked. There are tons of hidden costs to industry, and not reusing material may be a catastrophically large hidden expense.

Another issue that comes up with a free market is liability, especially when we are talking about industries capable of climate/weather/economy altering/crippling actions. These risks are often beyond calculation, and so we have disaster relief funds, the FDIC, etc etc. In a completely free market, how do you handle the following: An honest company who's acting in it's best interest, makes a buttload of cash, pays it out to shareholders/executives/etc. then a huge disaster is caused by the company, a disaster whose cost exceeds the capital available to the company. The company can just fold, and now who's responsible?