Globalization and the shrinking middle class

[Renton]

No, I meant 1910. But I could have used any year. The point is that we are discussing classes, and classes are relative to each other. So we can compare the middle class of whatever time, as it relates to the other classes, to the middle class of today, as it relates to other classes. Standard of living have generally been improving at a historically noticeable pace for thousands of years, and at a pace noticeable to a contemporary for a few centuries. But that has nothing to do with the present day contraction of the middle class. If you don't think that wealth disparity is an issue (which I'm pretty sure I know you don't) then go ahead and say it-- but you seem to be trying to mask it as something it's not.

The stagnating wages of middle class people is mostly stat cooking. The poor and middle class have gotten richer (in America) during the last 30 years. It's valid to say that the rich have gotten richer at a faster rate, though. This is probably due to globalization more than anything. The money isn't being displaced from the poor and middle class in our country, it is being created by free trade with other nations.

Re. wealth disparity, it exists because people are disparately productive in the economy. Pure egalitarianism is a vulgar concept because it supposes that incomes and standards of living should in no way reflect how much we contribute to the economy. So yes, I believe that in a free market you will have some disparity, and it is not inherently a problem. Its only a problem when things stop becoming continually better for us all, which hasn't happened.

This is the part where I extoll the virtues of free markets. I'll try to go as little on faith as possible. A completely free market and free society approaches a state of higher equality by increasing everyone's standard of living. It does this by continually reducing the costs of everything we need and desire through competition, increased efficiency via capital accumulation, and decreased inefficiency through the profit and loss system. So while there will be wealth disparity, even the poorest people will be able to afford healthcare when the industry hasn't been cartelized by a state. We approach a state of basically infinitely cheap goods/services and infinite wealth to spend on goods/services, and nearly everything a government does slows down this process by some degree.

I really don't know, but none of these things will get discussed if we constantly and pre-preemptively devolve our socio-economic discourse into these poliicy-based dichotomies.

Fair enough, but the thread was titled globalization and a shrinking middle class. And even though dozer stated that he didn't think going back on globalization was the answer, its still an original post that is skeptical of free trade at least on some level.

[boost]

The stagnating wages of middle class people is mostly stat cooking. The poor and middle class have gotten richer (in America) during the last 30 years. It's valid to say that the rich have gotten richer at a faster rate, though. This is probably due to globalization more than anything. The money isn't being displaced from the poor and middle class in our country, it is being created by free trade with other nations.

I'm not familiar with your sources on the middle and lower class getting richer during the past several decades, but if I were I'm sure I could claim "stat cooking" just the same. But if we agree that the disparity in wealth has been increasing, I think we share enough common ground to have a meaningful discussion.

Re. wealth disparity, it exists because people are disparately productive in the economy. Pure egalitarianism is a vulgar concept because it supposes that incomes and standards of living should in no way reflect how much we contribute to the economy. So yes, I believe that in a free market you will have some disparity, and it is not inherently a problem. Its only a problem when things stop becoming continually better for us all, which hasn't happened.

Vulgar seems a bit extreme. I think the fact that we appreciate things outside of their monetary value is beautiful. I think the fact that we offer special care for babies, children, and people in general with abnormalities, diminished cognitive fucntions, etc. is a big part of what makes us modern humans. That's the extreme, but you can see that these people aren't contributing their fair share-- at least I assume they're not in your view. But in my view, they are. Taking care of them allows us to live in a world in which people don't die in a ditch because they don't flow with the current ebbs of the market. Again, this is the extreme, but I think it illustrates the point and you can fill in the spectrum of grey from there.

[quote]
This is the part where I extoll the virtues of free markets. I'll try to go as little on faith as possible. A completely free market and free society approaches a state of higher equality by increasing everyone's standard of living. It does this by continually reducing the costs of everything we need and desire through competition, increased efficiency via capital accumulation, and decreased inefficiency through the profit and loss system. So while there will be wealth disparity, even the poorest people will be able to afford healthcare when the industry hasn't been cartelized by a state. We approach a state of basically infinitely cheap goods/services and infinite wealth to spend on goods/services, and nearly everything a government does slows down this process by some degree.
[quote]

I am not sure I disagree with the virtues of your end game scenario, but I don't think I can agree that there is a path that leads there. I think that you ignore the potential destabilizing effects of wealth disparity. When there is a smooth gradient of wealth, and a thick buffer of a middle ground between the absolute destitute and the filthy rich, society will be most stable. The more egalitarian the society, the smoother the transition will be from rich to poor, again having a stabilizing effect. While I like the idea of your endgame, I don't think it can be reached without hitting the critical point of disparity.

As an honest concession, I think on the flip side, total egalitarianism is a pitfall to avoid, because those who work hard won't feel reward for their work. As with most things, I'm under the impression that balance is key here. Middle ground, balance, stability-- funny how they all positives which warn against extremism. Maybe an example of linguistic Darwinism?

Fair enough, but the thread was titled globalization and a shrinking middle class. And even though dozer stated that he didn't think going back on globalization was the answer, its still an original post that is skeptical of free trade at least on some level.

Like you said, fair enough. I don't mean to jump down your throat on this and throw it at you constantly, but I think it's a good thing for us all to look out for. I know I've done it to you-- hell, I even (albeit jokingly) made my whole OP in "Organized Labor" a dichotomatic call out addressed at you. It's just that I think ideas are far more interesting than policy trumpeting and bashing. Of course there will be some of that, but we can at least let discussions naturally plot their course... maybe we'll find some gems along the way.

[Renton]

Vulgar seems a bit extreme. I think the fact that we appreciate things outside of their monetary value is beautiful.

Beautiful to think about. Hurtful economically. Really awful stuff happens to things when you ignore their monetary worth. We've discussed this already.

I think the fact that we offer special care for babies, children, and people in general with abnormalities, diminished cognitive fucntions, etc. is a big part of what makes us modern humans. That's the extreme, but you can see that these people aren't contributing their fair share-- at least I assume they're not in your view. But in my view, they are. Taking care of them allows us to live in a world in which people don't die in a ditch because they don't flow with the current ebbs of the market.

I resist the urge to discuss the welfare of the disabled in context like this because those are extreme cases which would be pretty well taken care of in ANY rich society regardless of enacted egalitarian measures. There's just gonna be enough do-gooders and philanthropists among us to take care of the these few people, and even if we state-subsidize them its such a tiny amount of money (relatively to say the defense budget or the rest of medicare) that I don't care about it one way or the other.


The true welfare argument needs to be made where the money is significant: low-income people who have made poor decisions or just have had bad luck in life. And these are cases that helping these people is hurting the economy many times more than it helps them. And it often just straight out hurts them by giving them warped incentives. If I can work at this low-income job and gain experience and potential mobility for 900 dollars a month, or collect this disability or welfare check for 1100, I will probably choose the 1100, even if it gives me no chance of improving my state in life. Decisions like this are made constantly in the U.S.


Also, a shit load of the supposed egalitarian measures we enact are a subsidy to the middle class at the expense of the poor, not the rich as intended. Social Security, for example, is a regressive tax. The poor usually enter the workforce earlier in life than the middle class (often at age 16-17 as opposed to college grads who often wait until 23), and die younger, thus they pay more into it and receive less. State higher education is also stealing from the poor to give to the middle class and rich. Taxes collected by the states are almost always regressive, often coming from sales taxes. The poor pay a greater percentage of these taxes per their income and are far less likely to go to state colleges.


So what you have aren't egalitarian measures, instead you have a special interest group, the middle class, voting for policies that help them at any cost to others. It's the same concept as corn subsidies and its wrong for the same reasons. It's just harder to recognize this because we're hardwired to think that its all about middle class people and no one else matters.

I think that you ignore the potential destabilizing effects of wealth disparity. When there is a smooth gradient of wealth, and a thick buffer of a middle ground between the absolute destitute and the filthy rich, society will be most stable. The more egalitarian the society, the smoother the transition will be from rich to poor, again having a stabilizing effect. While I like the idea of your endgame, I don't think it can be reached without hitting the critical point of disparity.

I think I can draw the faith argument on this one just like you do with my stuff. I think that society is more stable when it is rich, when resources are distributed to their most valued use, when people are allowed to make their own decisions about their money, and when they have more of it to spend.


I don't think its all about sculpting a middle class that is 90% of the population. And even if I did, I think collectivist thinking would be just about the worst way to achieve that feat.