by Massimo Pigliucci
* Mom says to daughter that she will be left behind and go to hell this Saturday. I wonder about their Sunday morning conversation...
* If you read this and you don't at least consider starting a revolution there may be something seriously wrong with you.
* Sleep deprivation can make you unethical.
* Podcasts as Socratic dialogues.
* The new religion of experimental monotheism, where belief in god comes with statistical confidence intervals...
* Why brains are not like computers.
* Philosophy Talk on beliefs gone wild, how the human mind can be filled to the brim with all kinds of falsehoods.
* Google has an in-house philosopher, tending to their moral operating system.
* My recent talk on the philosophical and biological aspects of the concept of race.
* My Amazon review of Science Fiction and Philosophy.
* The poor quality of undergraduate education in the United States.
* The Synthese / Intelligent Design controversy makes it to the New York Times.
* The Academy Shrugged: Charles Koch buys economics department at FSU and destroys academic freedom.
* Very nice piece on nature vs nurture by one of the most influential scholars in my early career: Richard Lewontin.
Unless one is an end-state egalitarian, income inequality in and of itself (no matter the extent of the disparity) need not be a morally objectionable state of affairs. If one holds to a patterned principle of distribution (of some sort), the income inequality may even be morally praiseworthy.ReplyDelete
For myself, if income is derived by (1) voluntary transactions of (2) justly acquired property by (3) informed agents, then I cannot disparage the distribution.
Para, yes, but I'm with Rawls on this: inequality has to be justified, and *nothing* can justify the gross level of inequality currently shaping US society.ReplyDelete
Consider starting a revolution? That's rich (so to speak). You mean an Animal Farm type revolution? A revolution involving people perchance? Such a revolution is doomed to fail eventually. A bit of blood flow, maybe it gets better for a little while and then gradually right back to the way it was because the material you are working with is deeply flawed. You can't build a skyscraper with lead girders. If resources are abundant and people don't actually need to co-operate to survive then they wont. If conditions are right for some to take advantage of the others then they will.ReplyDelete
And if you are thinking that Americans are going to get off their lardy butts, turn off American Idol, and start taking bullets for the nebulous cause of equality, then you sir are excessively optimistic. When the shelves are empty and the power goes off you will get your revolution (which will turn out as indicated above), but not until then.
Oh boy, here we go again. Why is it that so many people take the word "revolution" to necessarily indicate the bloody type? Ever heard of, I don't know, the scientific revolution? Galileo and Newton changed science without spilling any blood.ReplyDelete
I meant a social and political revolution, dramatically reshaping our distribution of wealth. I'm not into bullets and such.
The unstated assumption here is that equality doesn't need to be justified. I would insist that equality is not the morally default position and thus *must* be justified, lest it becomes morally arbitrary.
Para, as I said, my justification comes from Rawls. I find his reasoning for equality extremely convincing.ReplyDelete
Yes, well I suppose it would be superfluous to say that I do not find Rawls' reasoning convincing. In nuce, amongst other difficulties with Rawls, I find his arguments for equality to impose costs on agents who not otherwise consent to them under a rational bargaining situation. In other words, per Rawls, you have a material claim to x, y, and z, but your claim obligates another to provide, en bloc or in part, x, y, and z. In Kantian terms, your claim to x, y, and z entails that you may use another as a means to an end and not an end in herself.ReplyDelete
For a recent, empirical justification for equality (or at least a reduction in US and UK levels of inequality), authored by two British epidemiologists, I highly recommend The Spirit Level.ReplyDelete
Beliefs gone wild? You should look up Oprah's recent interview with Shirley MacLaine. It's a study!ReplyDelete
Para, needless to day, I am no Kantian, so I see no problem with Rawls' approach. At any rate, I don't think I would go as far as Rawls himself does, I just think that the current degree of inequality in the US is simply obscene.ReplyDelete
The problem is Rawls' approach is Kantian. That aside, I understand your distaste for income inequality, I simply do not share it neither do I think extreme inequality an inevitable result of a free-market nor do I think one can malign it on Rawlsian grounds.ReplyDelete
If you think the ultra wealthy will just peacefully hand over their mansions/watches/jets/cars/submarines/islands etc without a fight (including but by no means limited to - bullets) then again you are excessively optimistic.ReplyDelete
People cannot start any kind of revolution without organizing and they can't organize without mass communication and the ultra wealthy own the means of mass communication. Internet forums are already compromised by corporate bots and shills, what do you think would happen if some growing social revolution stood a chance of re-organizing the wealth structure to disfavor the ultra wealthy? Do you think they would do nothing? Just 'let it go'? They wouldn't have to do more than sow dissent, confusion and chaos to sabotage it. Given human nature that is a piece of cake.
Behind all the books full of inscrutable laws and the pretty language civilization rests ultimately on the threat of force (i.e. bullets) which is why they give police guns. You are naive to think otherwise. If you are not willing to risk the bullets to effect change that is your decision, but sometimes that is what it takes. Yeah it would be nice if it were otherwise, but right now it isn't. As an alternative there is always the status quo.
You are comparing apples to oranges comparing scientific 'revolutions' to social wealth distribution. Galileo and Newton had evidence and predictive power to back them up. I believe the historical evidence is that for most of human agricultural history the wealth distribution has been extremely lopsided as it is becoming again in this country. In what time or place has there been a great deal of wealth evenly distributed for more than a decade or so?
But you know I could be wrong. There could be a way. I don't see it though. Do you? If so I urge you to get to it immediately because I don't care for the present circumstance any more than you do. I just don't think the evidence supports the idea of any profound and lasting change forthcoming.
Look on the bright side though. Maybe one of these days one of the billionaires will want to go to Titan.
Thameron, I'm aware that social and scientific revolutions are different. My example was simply to point out that there are non-bloody ways of interpreting the word revolution.ReplyDelete
And the rich will hand over wealth without bullets if we only get it in our minds to elect people who are not in the thralls of the rich. Wealth inequality used to be much less in the US, and the change hasn't come through bullets.
"Wealth inequality used to be much less in the US, and the change hasn't come through bullets."ReplyDelete
It also used to be much more before that (think Gilded Age), without any civil-war-type bloodshed affecting the change.
BTW, as much as I appreciate a good thought experiment, like Rawls' original position, I admit that the issue for me boils down to emotion - empathy and compassion, in particular. Of course, it's logically possible that extreme inequality (like that of the US) poses no threat to human well-being. But the weight of evidence suggests otherwise, which renders that condition morally unacceptable to me.
There certainly are different interpretations of the word 'revolution' but you weren't speaking of some new discovery or idea. You were speaking of an effort to redistribute economic and material resources on a massive scale and those kinds of revolutions rarely happen without bloodshed. As I said people are not inclined to hand over their obscene wealth out of the kindness of their hearts, otherwise they never would have accumulated it in the first place.ReplyDelete
Yes it has been different in the past in America, but never for very long. The age of the Robber Barons is not forgotten. The brief era of the middle class worker is all but gone.
Without constant vigilance societies will revert to the historical pattern and the ultra wealthy have plenty of means to distract people from that vigilance. They don't really have to try very hard, just cutting through the thick forest of information available today for what is both truthful and important is work enough for a lifetime and most people just don't have that kind of time.
All the odds favor the ultra wealthy keeping what they have and getting more. They own the media which elects the politicians who make the laws that favor their continuing economic engorgement which are enforced by people with guns (and bullets). To break that chain would require a very high degree of motivation, unity and organization. This is not impossible, but it is rather unlikely. Like it or not the negative emotions are a lot more unifying than the positive ones. Hatred is more unifying than love, fear is more unifying than joy. If the ultra wealthy were feared and hated then perhaps something could be done, but they tend to be envied instead and that just won't cut it for the revolution you are speaking of.
Paraconsistent: sounds like the argument of a person who has never faced poverty. There is more to income inequality than just the distribution of wealth. Myriad other problems come along with that income inequality. Also, I'm not so sure the über rich in America gain their wealth via the means you lay out in your first post.ReplyDelete
Perhaps a better example of the type of revolution Massimo is referring to is the Velvet Revolution. In any case, he is correct in asserting that a social/political/economic revolution can happen without war or bloodshed. Seems like kind of an odd thing to pick on out of everything he posted.
I must say that your comments appear as more conspiratorial polemic than as an invitation to reasonable discourse. Just saying...
I would suggest refraining from facile inferences as to the psychological motivations of my comments as they are immaterial to validity of my claims and border on genetic fallacies.
As for whether individuals have or have not gained their wealth unjustly, I can say that the justness of an individual's holdings ought to be determined on a case-by-case basis according the above criteria; nothing in my comments entails that I must support the current distrubution of wealth.
Money is the root of all inequitable equality. What in the beginning was a token for services became a token for the "valuable" yet devaluable material that the token was made of, more recently a computerized iconic token for the legally protected value of printed paper. Leveraged value to boot, based on the legal protection of promises from those who bought that protection from those they bought to make the applicable laws.ReplyDelete
Withhold our services in revolt? Sure, but show me some undevaluable token we can use for money.
Do they indeed? Well by all means engage in as much reasonable discourse as you have appetite for and see just how much change you can bring about using that method. Feel free to name drop and quote ancient philosophers. Always a crowd pleaser.
There is a reason that alarm clocks don't play soothing muzak - because that isn't effective at waking people up. Neither is reasonable discourse. If you want the people to take action you will need to kindle the flames of their anger, tell them a chilling story in every undertone of fear and paint them a picture of the future in all the darkest shades of black. Have you perchance forgotten that 85% of these people believe in imperceptible magical friends/forces? And you think reasonable discourse will change their behavior? That is unreasonable.
One exception does not a rule make nor break. You will note that in the efforts to change the power distribution system in the Mideast the bullets are indeed flying.
To be clear I do not like the fact that reason is not king. I simply recognize that it isn't. I would in truth much prefer to live on a planet where it was, but emigration at this time is not possible.
Undoubtedly there remains a place and time for impassioned oratory, but that place and that time is not here and it is not now. We are interacting on the Rationally Speaking blog; a place to exchange ideas through rational discourse. In your diatribes (I mean no offense, but I think that is the most apt description), you offer (almost conspiratorial) assertions as to the obscenity of certain individuals' income, but provide no reason why one ought to consider it oscene.
At the moment, I am not concerned with persuading the ignorant masses of anything (if I were, this would not be the appropriate venue); rather, I want Thameron to provide reasoned arguments for his assertions.
Paraconsistent said, "I would suggest refraining from facile inferences as to the psychological motivations of my comments as they are immaterial to validity of my claims and border on genetic fallacies."ReplyDelete
I beg to differ; I think they are quite relevant. What you are saying sounds like the kind of thing someone comes up with to justify power over others. Your view of income disparities appears quite myopic and simplistic--at least judging from what you've posted here--and I am wondering if this is due to a lack of experience with the real, everyday experiences of poverty.
I find your initial premises to be quite problematic if for no other reason than the built-in assumptions of equality. So what if the exchanges are "voluntary" if they stem from unequal social positions? How is private property "justly" acquired; "just" for whom? At what point is an agent "informed"? This all seems like too easy of an explanation for me. You should also realize that if we both look at a person's holdings, you and I may come to very different conclusions concerning the justness of their wealth, and this will probably stem from our political economic views on income and wealth.
Ultimately, I find your arguments for the justification of inequality to be completely unconvincing and inadequate.
I am rather a fan of impassioned oratory. If you are not a similar aficionado thereof you do have the option of skipping over my entries here to those more to your taste.
I was responding to our esteemed host's call for 'revolution' (a rather emotionally charged word I'd say so emotional references did not seem particularly out of place) in regard to the accumulation of 'obscene' wealth. A word you will note that he used first. I believe the obscenity involved is the violation of our innate/cultural sense of 'fairness' i.e. there are people who have much more than they need or could possibly use while many do not have the bare minimum of what they need.
Given human nature as I understand it from observation and experience as well as my understanding of the present social situation I commented on the likelihood of the success of revolution and what sorts of things would be required for one to succeed.
If I have failed to give a dissertation that meets your particular standard of referencing and footnoting, well that is just something I shall have to live with.
As far as being 'conspiratorial' goes I will satisfy your curiosity and state that I do think the ultra wealthy are actively engaged in increasing their wealth by means both legal and il. After all people kill each other over money fairly regularly.
If there was 10 countries in the world and 9 of them were perfectly equal in wealth distribution but extremely poor and the other was so massively unequal that 1 percent owned 99.99 percent of the wealth and the other 99 percent owned only .01 percent of the wealth, yet in the latter the 99 percent that had only .01 percent of the wealth were still more prosperous than the members of the other 9 countries, which country would you want to live?ReplyDelete
The problem Massimo is that you view inequality as the actual problem. Why wouldn't you look at prosperity for the masses as the problem? By what moral code does equality have precedence?
You view capitalism as the problem and think it's just a matter of voting the right people as the solution. You need to consider the possibilty that there is no such thing. Capitalism works fine and is the only way we can be free. The problem is when capitalists can collude with government. It's not a matter of voting the right person in. Bush and Obama are equally damaging and collude with big business the same. They just pick different sectors to collude with. Think about our financial reform bill that doesn't allow corporations to fail. Does that increase the ability for the rich to get richer or lesson it?
The only way to fix the problem is to limit governments power. The right politician that you voted for will always collude with big business to protect himself. Things like department of energy and on and on and on give government the means to collude without obvious visibility.
You claim big business is controlling government to increase their wealth (which is true) but think the so called revolution is just a matter of getting the right people in government. It's never happened in history. Yes there have been glimpses, but the only states that have seen real prosperity are that limit it's power. Every regulation is an extension of governments power, the ability to uneven the rules to protect big business under the guise of protecting the environment or keeping us safe from the evil capitalists.
Please read Von Mises or Rothbard because this is a matter of economics. The Austrian prospective has the truth. Massimo I think you would like "Human Action" by Mises because it deals with the philosophy of economics
@Jim Fisher: Sounds like a rant from a religious person. "The Austrian prospective [sic] has the truth"? THE truth? Are you kidding me? How can you even assert such a thing?ReplyDelete
You say "capitalism works fine and is the only way we can be free." Who is this "we"? What do you mean by "free"? Completely unregulated capitalism does not "work fine"--it will lead to monopoly, and there is no freedom in that.
Deregulation and a lack of government involvement in markets is exactly what led to the current financial crises in the United States that spread across the world. Your revisionist history is quite astounding.
The only thing I can agree with you on is that inequality is not *the* problem, but is a product of lots of different problems. However, I am not sure that Massimo thinks inequality itself is the problem, else he wouldn't have linked to something showing how the skewed distribution of wealth across society leads to inequality.
I could proceed to insist that what you are saying sounds like you have succumb to the parasitism with which the menial, wage-earning poor is fraught and construct poor arguments to alleviate your jealosuy and that therefore your arguments against income inequality are invalid. If I were to proceed in that way, however, I would fail to assess your argument on its own merits, take the discussion down the primrose way of polylogism, and leave us nowhere.
As to your problems with my initial comments, first, I included no assumptions of equality; for me, income equality is in and of itself morally neutral.
I would say property is justly acquired via either initial investment of labor (cf. Nozick) or voluntary transactions. Voluntary transactions are important because insofar as one voluntarily trades a good or service for another, then one ipso facto values that for which he trade more than that which he trade. In other words, voluntary transactions allow agents to maximize their preferences given the existence of other agents (which for me is summum bonum). Roughly, an agent is 'informed' in insofar as there is an absence of fraud, possession of adequate reasoning faculties, and an understanding of the associated risks and benefits of a transaction.
In the end, to ensure income equality, one must compel agents to provide for the material well-being of others more or less against their will, and it is this that I reject.
If by 'unregulated' you mean no protection of property rights, no enforcement of contracts, and no means by which to arbitrate conflicts, then you may indeed be correct. However, insofar as there are such protections in place, and the goal of a profit seeking firm is to maximize profits, non-natural monopolies are (1) unlikely to arise and (2) if they do arise, are likely to be short-lived.
If a firm makes profits, other firms have incentive to compete (per the profit motive). Insofar as there is competition (monopolistic or perfect), profits, in the long run, disappear. Insofar as there is free entry, protection of property rights, and protection of contracts, competition is unavoidable (per the profit motive).
The only entity which can prevent, in the long-run, entry into a market: Government. As for your claim about deregulation itself causing the current financial downturn, I must say that your view is, again, much to facile. The crisis has its origins in both deregulation of certain sectors and unnecessary and distorting government involvement in the market.
@Paraconsistent: It seems to me that property is acquired by dispossessing the public of common resources. You completely avoided my question about how something can be completely voluntary if there are unequal social relations and, thus, unequal power between people. And who decides what "fraud" is and what "adequate reasoning faculties" means?ReplyDelete
My point is that you have a lot of assumptions built into your argument that do not take into account differences of experience and views, and you assume that your position is THE neutral, correct position. I don't think that's the case at all.
Finally, I don't see a problem with compelling agents to provide for the material well-being of others against their will because we live in societies, not as completely self-containted and autonomous individuals independent of all other people. Income and wealth come from social relations; they don't just appear out of thin air.
This is appearing to me to be more and more an argument right out of the formalist vs. substantivist debates. Obviously, I am not a formalist, and I find many problems with arguments stemming from that camp.
>Voluntary transactions are important because insofar as one voluntarily trades a good or service for another, then one ipso facto values that for which he trade more than that which he trade.<ReplyDelete
Except that by the use of devaluable currency we are no longer trading a good or service for another with an "understanding of the associated risks and benefits of a transaction."
Just to throw my $0.02 in, I don't think of property rights as being part of any ethical "primitive" or axiom. While one may lay claim to a sort of metaphysical or ontological connection to one's body (because one IS one's body, or at least one supervenes directly onto a large part of it), there is no such connection between a person and their other material property. Like authority, fidelity, and so forth, property is a concept which is adopted only for the purposes of interaction with others, meaningful in social contexts, and probably completely fictional otherwise.ReplyDelete
And of course, one of the primary purposes of modern law is to lay out who owns what, and to provide a social context where rules about property are enforced (there being no substance to ownership in the absence of the ability to enforce that ownership anyway, however much I'd like to personally lay claim to Mars). It's possible that there's enough evolutionary momentum behind certain conceptions of property, that the concept is not infinitely flexible. But it still clearly bends in many areas.
It strikes me that, when deciding how to think about property, the real goal should probably be some sort of utility (whether under a sort of rule utilitarianism or some other method of sizing up economic systems). I don't see the point of starting with property rights and building a society. I think it is rather preferable to start with a society and try to decide how to handle property rights within it.
And, frankly, I think this is consistent with practices in most countries with respect to all ("natural"?) rights. There aren't many rights that aren't abridged, rightly or wrongly, according to some principle or another (free speech, for example, being curtailed in various countries by restrictions regarding imminent danger, conspiracy, slander/libel, fraud, perjury, hate crime, fighting words, blasphemy, obscenity...).
Overall, wealth redistribution doesn't particularly bother me. What we have is a system which accords a great deal of power to certain individuals on various bases, including but not limited to talent in management, talent in investing, talent in gaming the system, ability to commit fraud, sheer luck, and so forth. Insofar as wealth gives one a disproportionately loud voice, it also inevitably reduces the ability of those who are not wealthy to induce a reasonable response from the government to their own concerns. It doesn't strike me as meaningful to say that people who have money de facto deserve such power in this situation, and so I'd just as soon see the field leveled a bit, if it can be done so consistent with maintaining productivity in the economy generally.
That said, I personally don't know enough about economics to advance my own solution. I just want to point out that the approaches that take an ideological starting point (be they Objectivist, libertarian, or Marxist) do not at all impress me.
What did I say that had anything to do with religion whatsoever? But of course you bothered to click on my name to find something you think discredits my point. It's difficult to have rational debate in these terms.
Rather than define and debate the definition of freedom (which is extremely important to the debate at hand) I will just say my definition of freedom is consistent with the classical liberal, not the modern liberal (for example, freedom from want or need). It's freedom from the whims, wants and control of other men.
Unregulated Capitolism does not lead to monopoly. I think Para did an excellent job of explaining why, but I just want to clarify that by regulation I do not mean rule of law (including dispute resolution). I mean the powers of such granted to entities like department of regulation, energy, argiculture, environment and on and on. This regulation is not about fairnes and insuring all play by the same rules. Monopoly is always the result of business and government collusion. Usually resulting in regulation that protects it. If you like I will give specific examples. Freidman spells out quite a few in his books. Free market without collusion with government cannot result in monopoly.
Just my religious rant
Although there are many factors, the Fed holds the most significant role in the current economic crisis. Mises "Boom and Bust" cycle offers the most thorough explanation. There are other government and business factors as to why it rooted itself in the housing market, but with the current monitory policy, you could remove the other factors and it would have just changed industry from housing to something else. Hayek does a brilliant job of explaining this cycle if anyone's interested.ReplyDelete
@Jim: I did not say that what you said had something to do with religion itself. I said it looks like the blind faith of a religious person. You said that one single school of economics has THE truth. That sounds like something someone would say about their religion having THE truth. I didn't click on your link and I don't know anything about your religious beliefs. I'm simply pointing out that statements like "The Austrian school has the truth" is equally absurd as "Catholicism has the truth." No one has *THE* truth.ReplyDelete
We obviously have very different views concerning economics and politics. I think it's fair to say that none of us are going to convince the others. I find neoclassical and neoliberal economics to be severely myopic views of the world. I don't think capitalism is necessarily evil or good; I also don't think unregulated pure capitalism is a good idea because of the inequalities created by capitalist division of labor.
Fair enough on you comment about religion.
The division of labour is the single most important feature about capitalism that brings about prosperity for the masses. I find it strange for a view that finds fault with the most important mechanism of economics that absolutely brings over all wealth for all. I think this stems from using equality as a measurement rather than overall wealth or prosperity. Reading through these comments I have yet to see any rational reason as to why equality has any moral fabric. Although I can easily argue why over all prosperity is better than less over all prosperity.
But you are right, we won't change any minds. I do hope (if you haven't already) you'll consider reading Mises.
The other thing I have yet to see with all (and maybe you'll prove me wrong) people that feel we need to revolt against free markets (I think we need to revolt towards them, and minimizing government) is an actual definition of what we should be revolting towards. Most claim to be socialists (but not communists, some new undefined socialism), and can't describe why their socialism won't have the tragedy of the commons and every other problem with socialism.
Many say they believe in free market but it needs to be regulated better (there is no such thing) so that things will be more equal.
Personally I just look at equality as jealousy. I want a system that allows me to have the freedom to prosper fairly and couldn't care less how rich anyone is. I don't care if I am the poorest person in my country as long as I am free to prosper and government isn't picking winners over me. If business or someone else is doing better than me on their own, where is the immorality? The only way they can do it unfairly is with collusionof the state.
Once we identify the government is the only creator of monopoly as a society then we can fix the problem. It's not capitalism and it's certainly not the division of labour (that is what makes us rich).
What is your system Will? Or are you another that just knows it isn't free markets?
Labour is a meaningless term without an understanding that labour must be further divisible by the natures of its services. The value lies with the services provided.ReplyDelete
That's how the barter system worked unusually well for ages. (I could comment that wars were fought to get around it, but I won't.)
Then someone invented token lenders and labour built a ladder for all to climb but those who had to build it.
@Jim: We will never have a perfect economic system. There will always be flaws and problems with any system of government or economy. But to pretend like just withdrawing government from the market will solve all economic problems ignores the history of the problems caused by deregulation of markets.ReplyDelete
You say you wouldn't mind being a poor person as long as you are free to prosper. You don't see a problem there? Do you honestly think that people are poor just because they don't work hard? Do you think that poor people want to be poor? How does a poor person accumulate capital or start a business to compete with the rich? By virtue of being unlucky enough to be born into a society that lacks equality, they do not have the opportunity to do those things. Yet, you think that inequality is just no problem at all, and that all people have the same opportunities to become rich just by virtue of living in a society with a market economy. Further, you seem to assert that they should just thank their lucky stars that they were born poor in America as opposed to, say, China. I mean, at least here they are free to bitch about their poverty, right??
I will gladly admit that government can create inequality; however, there are institutions other than government that also cause inequality (such as an economy). I do not believe that the absence of government will create equality in a large society such as ours.
Also, I vehemently disagree with your assertion that only government creates monopoly. If there is absolutely no regulation of a market, and it is allowed to operate freely without any outside interference, eventually businesses will buy each other out, leading to oligopolies and monopolies. This is what Marx referred to as the contradictions of capitalism.
Mises basically argues that the benefits of the division of labor outweigh the costs (not that there are no costs, as you seem to imply). I just disagree with that assessment, and tend to agree more with Marx that the division of labor leads to alienation of people from their labor, from their social relations, and from themselves. There is also a gendered division of labor, but I suppose you think that's completely fine as well.
Again, we are obviously approaching these things from very different worldviews that are inherently opposed to one another. It's easy to sit back and talk about how the benefits of capitalism outweigh the costs when you are the one benefiting (which was my point to Paraconsistent as well). Coming up with "rational" or "logical" explanations for that doesn't make it any more ethical or moral.
Will said wisely: I think it's fair to say that none of us are going to convince the others.ReplyDelete
Then Jim said: Reading through these comments I have yet to see any rational reason as to why equality has any moral fabric.
I'm not sure what a "rational reason" looks like, but the reasons here began with Massimo's pick above; i.e. the one that triggered this discussion.
Also, it turns out that my first comment above shares that essay's endorsement of the book The Spirit Level: Why More Equal Societies Almost Always Do Better. In keeping with Will's wise & fair saying, I won't waste time recapitulating it here.
But suffice it say that a refusal to accept or acknowledge reasons for "why equality has moral fabric" suggests to me that some people (as in: a small but vocal minority) either can't or don't want to be bothered by such reasons, so they define rationality in such a way as to exclude them ab initio.
PS: I also suspect that some of the dismissal that I mentioned in my previous comment stems from a conservative fear of social-engineering policies, or at least those which come from the left. Yet, need I point out that we need not agree on specific policies (let alone be complete wonks) in order to agree that equality has moral value (even if not ultimate value)?ReplyDelete
For example, let's suppose (for the sake of argument) that free-market policies are the best mechanisms for reducing socioeconomic equality. It so happens that I tend to be highly skeptical and critical of that claim, but my immediate point here is that, if I truly believed that as a general rule, then I would feel obliged to advocate for those policies - assuming that they do not unacceptably compromise my other values (e.g. freedom and democracy, as I interpret those concepts).
Simply put: morality precedes policy.
That said, if we assume a common moral objection to inequality, what's then needed is a more evidence-based approach to political remedies. As they say in The Spirit Level (from the related web site): "There are two main ways of reducing income inequality: smaller differences in pay before tax (like in Japan); redistribution through taxes and benefits (like in Sweden)." Other values or commitments may lead us to prefer one remedy over the other, but the point is that the evidence suggests that both remedies are effective in this regard.
There was also that nature nurture piece that Massimo made reference to which supposedly gave props to the evolutionary science acumen of Richard Lewontin. Interesting but evidence that Lewontin hasn't learned much since Massimo first came to admire him.ReplyDelete
He still believes that potentially heritable traits are generated by a stochastically unique genetic variant that magically enables one "with no effort at all to perform a task that many other people have learned to do only after great effort."
Still stuck in the neoDarwinian age after all this time? For shame.
Hoo boy. And here was me thinking this lively discussion indicated by the "38 comments" would be about brains vs. computers. Instead it is randroid vs. people who have a differentiated and complex model of reality.ReplyDelete
For myself, if income is derived by (1) voluntary transactions of (2) justly acquired property by (3) informed agents, then I cannot disparage the distribution.
"Justly acquired" is begging the question, or at least it has to be defined before the claim can be examined. An underlying and often explicitly mentioned assumption of the libertarian side in these discussions is always that the rich deserve their riches because they "created" them (yeah, completely on their own without any help from national infrastructure, public education and their employees' labor, haha); that sounds convincing to many people as long as they do not think clearly enough to notice the bracketed part. That they deserve riches because they inherited them, not so much. So here the libertarian, noticing that the self-creation criterion fails to justify the increasingly obscene inequality, cunningly inserts the "voluntary transaction" (from previous owner to inheritor, in this case), which sounds nice, but does not solve the problem of deserts.
Simple thought experiment: if Mr Libertarian were born into a world where all land, all mines and all industry on the entire planet were concentrated in the hands of one single person because their great-grandfather out-competed and bought up all other owners of property on a hypothetically then entirely free market, so that this one person can now, without any interference from anybody else, decide by fiat who gets employed and who not, who starves to death and who survives, how all resources on the planet are used and what state the next generation finds the planet in, would Mr Libertarian still find that just? And would he find that state of affairs desirable? If not, then it has already been demonstrated in principle that there are levels of inequality that society cannot tolerate, and we are only haggling about what exactly is too much.
Its not so much the income disparity that gets me as much as the horrible ways all that extra wealth can be spent. Look at the Gates family saving countless lives with their fortune. Why not take that model and apply ceilings to fully disposable income, and have the not-so-fully disposable income spent on similar pursuits agreed by the voting public. While understood that this is a tax the rich scheme, what is the worst that can happen? Less incentive for the rich to make money? Well then, there is your income redistribution.ReplyDelete
massimos pick does not explain or justify why inequality is immoral or even harmful. Just says that it is.
Here is an absurd quote from this article.
"When income becomes so concentrated people who would otherwise think they are well off look up the ladder, see vastly more wealth accumulating, and think they are not doing all that well after all."
So basically he is saying the person would otherwise think he is well off, but since there are others that are just sooooooo wealthy he must really be starving. In his own words he has just defined jealousy, not a problem. Nowhere in this article is there any reasoning for equality being moral.
If it is indeed a fact that more equal societies do better (and I am not arguing its not). That in itself does not mean equality is the key. Both equality and a societies ability to do better (however that is measured in your book referenced?) can be results of something else. There is nothing proving a cause and effect. In fact in societies that attempt to make things more equal (Russia, Cuba, etc..) actually prove to have less equality.
Your P.S post means nothing to me, because linking to massimos pick does not establish any morality behind equality. I can easily point out the immorality of forced equality such as theft through redistribution and so on. We are each soverign bodies that have the right to own our own production. Taking my money at gun point to redistribute as some politician deems fit has obvious immorality. You still bear the burden of explaining to me the immorality of inequality. General concepts like "hey, a society does better because its more equal" does not suffice as an explaination of why equality is moral. Especially since there is no proof of cause or effect.
As you said the free market could lead to higher equality (even if you dont agree with that probability). You say that if this were true you would be for a free market because equality is moral (and morality trumps policy), but never establish why it is moral. You cant even use the "it makes better society" becuase you freely admit that the mechanisms (or policy) is what makes the equality. So both equality and better society are effects of some mechanism. I do believe free markets bring about more equality (but that is just a effect, nothing that I hold moral). There is nothing for you to re-hash, becuase there is nothing there to begin with.
Your kidding me right? Eventually business will buy each other out and become monoplies? Paraconsistant painfully explained why this is not true, but apparently you didnt read what he wrote. This is why the "capitalism leads to monopoly" is like an old lefty wives tale that wont die, because even if someone explains it perfectly, rather than rebutt the explaination, you just forget it and keep repeating the same thing.
Pick any industry. For an example I will pick Razor blades (since I used to work for Gillette). Say they buy out Schick and Bick and any other blade maker. The danger is they can now charge what they want right? So while they are over charging you for your razor blades, what is to stop someone from starting to make much cheaper blades? The higher the profit margin of Gillette, the easier it is for someone else to enter the market. The Price of razors sends a signal to industry that there is room for growth. Gillette does actually dominate (or did when I was there), but not because of their capitalist ways of buying out the competition, but becuase they were allowed over 30 patents on their one mach 3 razor (one patent was even just the blade angle of 37.5°). So through collusion with government, they sued schick and forced them to change their design. Intellectual property is one of the easiest ways for business to collude with state. Often though the collusion is far more hidden, and it is absolutly rampent. Every day thousands of pages of new regulation is passed. Almost all of it is a result of lobbying from business. Big business loves environmental legislation. How does an upstart company stat making light bulbs? What is the regulation to handle the mercury and other regulated materials, what kind of costs go with this? Most of us know it is not even worth trying. But for GE, a little extra capital for these things is no big deal. Especially when it keeps competition and entrepenours from competing. If you wanted to make a jelly ball for kids, what would it actually take? Would you have to do head bounce studies. Impact to knee studies? What type of materials would be allowed if you were to sell to public schools. Would you have to design a ball that can maintain its 35 P.S.I. for at least 3 months so that it doesnt become a projectile? Does the guy alreay making Jelly balls with his Washington Lobbiest worry about these things, or is he the one writing these regulations (yes I am exagerating, but the point is valid).
Your arguemnt reminds me of the common fallacy I hear from liberals that Walmart opens a new store and then under prices everyone until they go out of business, and then jacks it prices sky high. Of course besides never seeing a Walmart with "Sky high" prices. I often wonder how this business model works. You drop your prices until eveyone goes out of business, but after you have jacked them up, what stops other people from coming back into business? You have the same problem with you capitalist monopoly model.
There are actually other legitimate reasons a company cannot fairly monopolize due to ineffiecentcies at that size. As you probably know if you taken business, there is efficentcies in growth and then ineffientcies at staged growth.
How about its just not your money to vote on. What is moral about theft? How do you convince stealing from the gates of the world and voting on what to do with it is not stealing. The left starts with an assumption there is no property rights, no right to own. I get it. But you never justify why, and its always someone elses money. Dave, how about we all take a vote on what day we can use your kayek (I vote I get it every Saturday and Sunday).
Its not yours. Its not the governments. it doesnt belong to the collective. We are individuals with individual rights. We own our own means of production.
You will get your way eventually. You will eleiminate the rich. The problem is, it will make us all less rich. Redistribution is not actually what you think. We have slowly been moving to more and more redustribution. Hows that working out? It is not a zero sum gain. Rich can get wealthy without it costing others. See this post I worte on a simple explaination of wealth creation.
yes I realize it is an over simplified exampe of creating wealth through capital. But capital, technology and division of labour are the only things that can increase wealth. yes it is not creating wealth equally, but it does rise everyones wealth. Every agricultural invention not made by you has made you more wealthy by allowing you to trade less of your labour for food. every power tool invented has made you more wealthy, by allowing you to trade less of your labour for the same amount of goods
One other thing made me chuckle in your post. Quoting Marx about Capitalism?
I'll match you one and quote him about race. (since he was such a genius about economics)
" it is now completely clear to me that he, as is proved by his cranial formation and his hair, descends from the Negroes from Egypt, assuming that his mother or grandmother had not interbred with a nigger. Now this union of Judaism and Germanism with a basic Negro substance must produce a peculiar product. The obtrusiveness of the fellow is also nigger-like."
I'll probably regret responding to someone who is so willfully ignorant, but here goes anyway.ReplyDelete
"Your kidding me right? Eventually business will buy each other out and become monoplies? Paraconsistant painfully explained why this is not true, but apparently you didnt read what he wrote. This is why the "capitalism leads to monopoly" is like an old lefty wives tale that wont die, because even if someone explains it perfectly, rather than rebutt the explaination, you just forget it and keep repeating the same thing."
Just because I disagreed with him does not mean I did not read what he wrote. I think he is wrong, and I explained why.
"Pick any industry. For an example I will pick Razor blades (since I used to work for Gillette). Say they buy out Schick and Bick and any other blade maker. The danger is they can now charge what they want right? So while they are over charging you for your razor blades, what is to stop someone from starting to make much cheaper blades? The higher the profit margin of Gillette, the easier it is for someone else to enter the market."
That's all fine and dandy, and possibly an example of how horizontal integration does not necessarily lead to monopoly, but what about vertical integration? What about when Gillette owns all of the manufacturing plants that produce the razor blades? How is someone to compete when Gillette owns all aspects of producing razors?
No point in responding to your nonsense about how evil government is.
"Your arguemnt reminds me of the common fallacy I hear from liberals that Walmart opens a new store and then under prices everyone until they go out of business, and then jacks it prices sky high."
OMG, this is a fun game! Let me try! Your argument reminds me of a common fallacy called a red herring. Yay! That is great fun! *eyeroll*
Out of curiosity, does anybody know studies about the degree to which debating strategies such as the one in evidence above actually convince anybody? It is of course well imaginable that framing, such as taxation as theft, can shift the debate, but does a Gish Gallop actually impress anybody but those who are already true believers? In my case at least, when I read unorganized logorrhea such as that, the immediate conclusion is that the thoughts of the author or speaker are likely as confused as their expression, so it actually serves only to decrease my confidence that they have anything worthwhile to say.ReplyDelete
The point of the Gish Gallop is of course to make it impossible to address all the fallacies and unfounded assumptions, so I will not even try - would need my own blog for that. So just one point very shortly:
It never ceases to amaze me how libertarians can look at collusion between powerful companies and politicians and conclude that the problem lies only with the politicians, with the state being too powerful. Do they really think that once large companies exist*, there is any way in which their concentrated wealth and economic importance can possibly not translate into political power? Quite apart from outright bribery, large companies deform political decision processes already because so many people rely on them for employment.
Assuming that we could construct some political utopia in which politicians and voters would be immune to lobbying if only we tried hard enough is entirely equivalent to assuming that we could construct a utopia in which a command economy works well if only we write the five year plans carefully enough. Much more realistic ways of avoiding collusion between influential corporations and corrupt politicians are (1) nationalizing those companies in combination with a very transparent and democratic government and (2) keeping companies and private fortunes small enough that each of them cannot exert too much influence. Note how inequality is a problem for (2) - not a moral, but a practical one: it leads to distortions in the decision processes of societies.
*) And yes, the free market necessarily leads to their existence; if you doubt that, kindly look up the concept of "economies of scale" and then think about it carefully.
Wow, Jim. It's so amazing that you can find racist quotes from people who lived in the 1800s! You're such a sleuth, what with your Google quote mining skills! (I notice you did not cite that quote. Care to share where you got it?) I guess that means that EVERYTHING Marx ever wrote is null and void because he had a view of race that we don't hold today.ReplyDelete
Seriously, that's the best you can do to refute Marx? Try to dismiss the whole of his theory of capitalism by quoting something that has nothing to do with capitalism? You obviously don't know a damn thing about anything Marx wrote. This is clear from your "Quoting Marx about Capitalism [sic]?" remark. You realize that Marx wrote a multi-volume, multi-thousand page book on capitalism, right? I bet you've never read one iota of Marx. All you know is that teabagger.com blog says he's bad news, and here's a quote you can use to make people think he's bad because *gasp* he saw black people like most other white people did in the 1800s!
You sure do love your red herrings and straw men, huh!
Yeah, I'm done. You obviously have no interest in an actual conversation. All you want to do is put forth your ideology at any cost. Maybe someone with more patience than I will come and take you to task for your idiotic ramblings.
Jim, read The Spirit Level and get back to me. Knowing your prior commitments, it probably won't convince you, but if thereafter you can still act like gross inequality is harmless (harm being an important moral criterion for many of us), then at least I'll know for sure (to borrow from Massimo) that there is "something seriously wrong with you." As it is now, I'll just assume that you're demonstrating a normal capacity for ignorance and stubbornness.ReplyDelete
I recall reading over at It's Only a Theory that you have elected to boycott Synthese (both as a referee and a contributor). I think I must agree with you on this one. The rebuke of Dr. Forrest
on the part of Dr. van Benthem et al. was inappropriate considering Dr. Forrest in no way defamed Beckwith; as far as I can tell, her criticisms were accurate and their tone acceptable.
I do not, however, take issue with the primary editors including a preface to an issue against the objections of the guest editors; the propriety of the primary journal editors inserting a preface over the objections of the guest editors must remain if the primary editors' responsibilty to maintain overall standards remains, and it does since in the end they are responsible for all published articles (if something were to go awry, e.g., Dr. van Benthem et al. would suffer along with the guest editors, if indeed the latter would at all).
Rather, for me, the issue turns on Synthese's engaging in the ID 'debate' in the first place. Insofar as Synthese had been a paragon of scholarly excellence, it troubled me that they took the ID 'debate' seriously and published pro-ID (or ID-friendly) articles. For *that* alone, I would boycott the journal.
I am not framing taxation as theft. I am saying redistribution is theft. There is quite a difference. The term redistribution is itself a framing term. What actually happens is government takes a persons money by threat of force and gives it to someone else. You want to call it redistribution? Why is it redistribution ? Did the government distribute it the first time? But of course I am framing the debate because I refuse to use the PC term and call something what it really is.
How do you remove political power from big business? You scoff because my solution is to limit political power (extremely). Your solution of nationalizing business? More transparentcy with government? Do you think there is two separate races of humans? One for business and a corruptless race for government? How does a smaller company compete with a massive one owned by the state? Part of the beauty of a true market economy is failure of business when it gets too large an inefficient. Currently that doesn't happen because of collusion with state. Of course your policy will just make all big business "too big to fail" and eventually wipe out all small business. The whole transparentcy idea while the state is running all the big businesses is laughable. A bunch of politicians running business that don't have to worry about failure or costs? That's a formula for success.
When the state oversees business, that is comment economy. GM should be gone. Now the tax payer funds every automobile produced by them. So as o make my car payment, I also make someone else's. As well as funding the marvelous successes like the Volt. And before you try and tell me they are now turning a profit, look up the source of it (hint: not from selling cars). But that's a formula worth repeating for every big business.
The rascism comment was unfair without rebutting Marx's theology, I will admit. I have read some Marx, but will admit I can't get far through his work. He builds on assumptions that I can't agree with ( as you said, we have different world views).
His racsism was beyond typical for a someone in the 1800's. Much of his racist writing was hidden purposely because the state was using inequality in race as a platform. Much the same way our politicians are today in the U.S. Of course now you can read it all.
I will rebutt specific Marx theology now that I understand you are a Marxist. That is easy to do, buy I have just arrived at work (been texting on my 1.5 hr commute) so you'll have to give me some time.
Again, no one has defined what equity and morality have to do with each other. First you said the article that Massimo linked would tell me. it doesn't . Now your telling me I have to read a book to find out. Is the case for why equality is moral so complex it can only be described in a book?
Again you simply state inequality means harm, but fail to establish why inequality is a cause and and not an effect of some other mechanism actually causing the harm.
For example: Russian communism was based on equalty for all. The result or effect was inequality (not to mention murder, starvation and tyranny). So sure you can argue unequal societies are worse off. But my point is you must establish why equality itself is a moral cause and not an affect of poor policy.
If you can't make the point simply, why would I read a book you recommend on the subject.
of course the primary editors have a right to publish whatever disclaimer they wish. But not after the issue has already been published online, and not without alerting authors and guest editors. That's where the primary editors at Synthese abysmally failed in their scholarly duty.
Jim said: But my point is you must establish why equality itself is a moral cause and not an affect of poor policy.ReplyDelete
The authors address that question in the book and (more briefly) on the related web site.
But you have an empirical problem, in any case, in that even if you insist on ignoring inequality or deny it any causal role in social problems (e.g. measured in terms of rates of violence, teenage birth, drug abuse, etc.), the evidence still shows that the countries that perform the best (i.e. possess the highest levels of well-being) do not even remotely fit a libertarian political model - not even Japan, let alone the Western European examples, like Sweden.
Jim: "I have read some Marx, but will admit I can't get far through his work."ReplyDelete
"I will rebutt [sic] specific Marx theology now that I understand you are a Marxist."
Please, don't bother. (1) It's not theology; (2) You haven't read Marx, so you cannot possibly understand it enough to rebut it; (3) You're making yourself look like more and more of a fool every time you post. You really should just stop and move on to some other post or blog. You will not convince anyone of your ideology, so just save yourself the time and move on.
There is a lecturer that I converse with periodically via a mail that was a economist for the Soviet Union, Yuri Maltsev. He lectures often for the Mises institute and Tea Party rallys etc..(you know, all us crazies) I find his experience absolutly facinating. Anyway, He insisted that I read the Communist Manifesto to understand the world view of socialists. Although I think I now have some limited insight into the world view (perhaps one you share), I dont share his view of everyone being a member of some class. As if it were static. I understand this is the status throughout most of history, but see Marx as having laws around classes and not individuals. In America we (if even temporarily) broke that historical mold.
If your interested here is one of his lectures
So no, I am not an expert in all Marxes work and havent read his work on Capital, but have read enough to understnd his views. And Socialism / Communism can certainly be debated without having read all Marx's work. You are more intersted in insuring you can label me with ignorance and avoid debate, so thats where we will leave it. this is a constant tactic used by liberals on this site. Discredit others rather than defend a position. Socialism is extremely difficult to defend and easily picked apart. which is why you rarely see anyone come out and say I want socialism. they just tell you how awful capitalism is. the examples of true socialism have resulted in over 75 million citizens murdered during peace time (in one century), but of course they just were not following what Marx really meant.
I want socialism.ReplyDelete
If you read my previous comment carefully, you will notice that I suggested two solutions, one of them avoiding precisely the too big too fail dilemma. But it can only be avoided by putting limits on inequality, so I can understand how you would mentally block that out. You do not seem to grasp some basic mechanisms in market economies:
Free market + some companies are unwise and go bust + economies of scale -> big companies
The only way to avoid that is government meddling to keep companies small, but that is often considered unwise because then another country that lets its companies grow large gets a competitive advantage through aforementioned economies of scale. You can even read stories about that in the media, how cartel authorities let mergers and acquisitions slide that they really shouldn't - with the explicit argument that only such a big conglomerate will be able to compete with its counterpart on the other side of the Atlantic.
Wham, you have a situation where government is between a rock and a hard place. Keep companies small, get out-competed. Let companies get big, they are too big too fail. Let them fail, your national economy is really toast. Support them, Jim Fisher gets angry. You see the dilemma of government. And yes, IMO a possible solution is nationalizing them - if you have to guarantee their existence anyway if you do not want to, say, import all your cars from Germany and Japan, then you could just as well have a say in their strategies and get some of the profits while things are going well.
I have never quite understood why a state-run company should work any less well than a privately run one. The German Railroad was definitely better when it was run by the government. When I was small, we used to have the saying, "as punctual as the railroad". After privatization, you do not hear people saying that anymore.
By the way, you are free to try to set up a car manufacturing company if you think it is so easy for start-up competitors to enter a market that has crystallized around an oligopoly, so that monopolies never happen in a free market. Should be a breeze, considering that GM etc. are so inefficient and lazy now. I will not hold my breath though.
This is tangential to the post at hand, but I hope you write something up about Satoshi Kanazawa's latest nonsense: http://www.psychologytoday.com/blog/beautiful-minds/201105/black-women-are-not-rated-less-attractive-our-independent-analysis-the-a
Evolutionary psychology at its finest.
Will: To be fair, if I apply my empirical reasoning across the board, then Marx-inspired communism looks about as challenged and undesirable as Jim's libertarianism. Putting aside the usual critiques of real-world Communist examples (e.g. those countries that followed the Soviet model), the real-world societies that I cited earlier (viz. Sweden and Japan) as relatively egalitarian are also dominantly capitalist economies (as measured in terms of market exchange, private ownership of the means of production, and wage labor). But, unlike the "free-market" economies that libertarians envision, their markets are well-regulated (i.e. more like "social markets" than "free markets") and, in the case of Sweden, supplemented by a redistribution of wealth via taxes and benefits.ReplyDelete
Alex: It's a serious topic of debate among economists (or at least among those who value an evidence-based approach) re: when and where it's appropriate to foster a public (as in: state-owned) vs. a (well-regulated) private solution. For example, Australian economist John Quiggin addresses this topic (albeit, somewhat briefly) in his recent book, Zombie Economics. Suffice it to say that, although there is some general agreement over criteria, there is (contrary to both extremes of the political spectrum) no one-size-fits-all solution.
I never advocated "Marx-inspired communism." Not once. I never even advocated *any* kind of communism. Citing Marx's labor theory of value or his contradictions of capitalism does not mean I am advocating for some communist utopia. It means that I find Marx's critiques of capitalism to be valid and relevant.ReplyDelete
Why is it when people see "Marx" they automatically assume that the person citing him is advocating Soviet-style communism? (1) Marx had many theories, some outside of economics (history, sociology, religion, etc.), and his theories are applied to all sorts of domains in academia--he's a *huge* figure in the social sciences (particularly sociology and sociocultural anthropology); (2) some of Marx's theories have certainly been used to prop up totalitarian regimes, but that runs counter to his ideas of the proletariat (i.e., the working class) as being "the dictator"; and (3) Marx saw capitalism as better than what had come before, but as ultimately flawed and as something that socialism (and ultimately communism) would replace one day. I'm not saying I agree that communism is the way to go, but I can agree with his premises about capitalism without agreeing with his conclusions about communism.
So, I am not advocating Soviet-style communism or Marx-inspired communism by citing his theories. What I was attempting to do before I realized I was being trolled by a Teabagger was to problematize the simple, black-and-white view of things that was being espoused here by a couple of commenters. I never identified myself as a Marxist (although I suppose I am insofar as I am familiar with and like much of his writing), and I most certainly never identified myself as a communist. I identify as something like a social democrat, and I advocate the types of governments that you keep citing, particularly the Scandinavian countries.
No one is saying Capitalism cant and wont have big companies. It certainly will. The debate is will it lead to a monopoly that can gouge people unfairly. this can ony happen with collusion with state. Becuase once that happens (the company is charging the consumer more than the product could or would be charged by a competitor), guess what, a competitor will react to the price signals.
In theory you can have a monopoly in capitalism, so long as it continues to offer the best product for the best price. In that case what difference would it make. the problem your trying to avoid is monopoly that controls entrance of competition to allow itself to over charge consumers for its product.
Also, the economies of scale is not some infintate benefit. There are also diseconomies of scale when organizations reach a certain size (ability to pull talent from other industries and cost of doing it, communication, complexity of management etc..). It is true that diseconomies of scale usually do not outweigh economies of scale hard tangibles, but they are very real. Many companies decentralize their managment to limit the diseconomies of scale. If the economy of scale is not passed on to the consumer, price signals will again attract competition. Government is often one of the largest providers of "economies of scale" as we see in agriculture subsidies and many other industries.
You point out how difficult it would be for me to start an auto company and compete to negate the likelyhood of a start up reacting to price signals of a monopoly over charging its consumers. Yes it would be very difficult for Jim Fisher to all the sudden decide he is going to produce cars and react to an over charging monopoly because of the complexity. That doesnt make it any less likely it will happen in a market economy if the monopoly were gouging. It may be the company already making the frames and dash board assemblies for Ford that reacts to the price signals. It may be a marine manufacturer that already has much of the infrastructer in place to start producing cars because they already make motors etc...Complexity doesnt prevent competition.
The other factor that makes it difficult for monopoly (in a true free market economy) is the constant change in technology. Invention and improvement makes it much easier for new and better ideas to compete with larger companies. Which one is more likely to compete? A great new idea in a totally free market economy? or a great new idea in a highly regulated economy? Especially when almost all the regulation was brought about with big businesses collusion with state.
Your whole point about governments need to control size of companies comes from not understanding a market economy. They dont need to control anything. Your whole argument for this was based of a free market always leads to monopoly taking control, which just is not true.
True wealth comes from the division of labour and technology. If another country can make cars for 1/10th of what my country can, that makes me more wealthy. The division of labour has just succeeded cross boundary. Even if it is because the other country is subsidising their auto maker so they can steal our jobs it still makes us more wealthy (a sort of false division of labour). Yes they have taken some jobs, but it was actually their tax payer giving us their money to do it. So I buy a car for 1/10 the cost and their tax payer picks up the other 9/10ths the cost and I still have $22,000 to spend in my economy to revise the job of the auto maker in to another industry. This eventually hurts the other country and benefits ours.
Milton Friedman does an excellent job explaining the division of labour and its relationship cross boundary.
As far as why a state run company will not be nearly as effiecent as a private free market company is another post in itself, and an easy one to write, but I dont have the time right this moment, so I will reply. The examples are boundless to look at.
Will: I more or less agree with everything you just said. (And I, too, have studied Marx, btw, including Capital.) Just to answer your question:ReplyDelete
Why is it when people see "Marx" they automatically assume that the person citing him is advocating Soviet-style communism?
Because that is how they've been conditioned via propaganda - and not only by enthusiasts of capitalism, but also by various sectarians of the Left (Leninists, Stalinists, Trotskyists, Maoists, etc.) who acted in his name - which means that, unfortunately, whenever someone cites Marx, s/he opens a big can of worms that begs for the kind of explanation that you just delivered. We can throw our hands up in the air over how frustrating other people can be - or we can deal with them as they actually are. I advocate the latter approach.
*thumbs up* jcm. Also, thanks for the recommendation of The Spirit Level. It's now on my list of summer reading. ;)ReplyDelete
The Kindle edition is $3.75.ReplyDelete
Because of your comment I am now reading Capital. Just finished the first chapter on commodities. It's not often I meet an admitted Marxists. I wonder if you'll consider debate/conversation on economics via personal e mail? I recently finished reading "Man, Economy and State" by Murray Rothbard and it starts off much the same way, although precursors with explanation of human action. There are obvious contradictions between the two economic philosophies and I would like to discuss them if your interested. I will read the rest of capital as quickly as I can but would like to discuss it with you as I do. I know were not going to change each others mind, but I would like to understand as much of your world view as I can
If you'll take me up it's Jfisher@shire.com
you have now ignored and misrepresented so many of my arguments that we will, from this point on, only go in circles.
No, my argument has never been that there will necessarily be a monopoly, don't know where you got that from. What I did was use a thought experiment (which you left unanswered) to show that inequality is not unproblematic in principle, and secondly to point out that large companies, whose necessary existence you admit, distort political decision processes.
The problem is not me not understanding markets, the problem is you not understanding them and their limitations, and you not understanding the complexities and realities of the world around them. There is simply no way in which large inequalities and concentration of economic power do not translate into political influence and collusion with the state. To assume that politicians would remain neutral and unswayed once a large company employs a substantial fraction of their voters and controls a substantial fraction of local economic activity just because you told them to is to live in a fantasy world. Once that simple fact of life is accepted, the only realistic question becomes what side of that collusion should have the say - a bunch of profiteers or the hopefully democratically legitimated state.
True wealth comes from the division of labour and technology. If another country can make cars for 1/10th of what my country can, that makes me more wealthy.
And see, this is what shows that you have no understanding of economy whatsoever. The best way to create wealth is to buy resources cheap, add value to them by manufacturing, and then sell them expensively to the same dupes you convinced to specialize on the extraction of minerals and farming. That is how the British economy prospered during the empire, this is how the first world stayed rich during the 20th century. Yup, that is division of labour, but in the long run it serves best those who sit at the right spot in the value chain, especially because producing corn is so much easier to do than producing complex machinery, so you naturally have more competitors there. Finally, if a country stops manufacturing things, as the USA does more and more, what does it live off? At the moment, borrowing and one speculation bubble after the other. But there will come a point where the creditors will ask: what industrial base do you actually have in comparison, to, say, Ruanda? No manufacturers left, all off to China and India, eh? So what stuff do we get in exchange for the consumer products and the oil we send you?
It is nice that you have acknowledged that generally only another large enterprise is able to invest the capital and know-how to enter any market more sophisticated than, say, that of hair salons or restaurants. Have you considered what that means for the present and future trajectory of inequality and distribution of power in our economies? Covering your ears and singing praises to the invisible hand does not cut it.
As for your essay about how private companies rule and state companies suck, you may want to examine the Norwegian oil industry and Enron, or Volkswagen and AIG. You should also carefully think about what efficiency means, and whether there might be other criteria except efficiency that would be important. It is true, for example, that the German railroads are now more profitable; but that comes with poorer service, higher prices for passengers, abandonment of unprofitable but strategically important connections into more rural areas, less punctuality, and a short-sighted severe reduction in apprenticeship positions.
We both agree companies collusion with state is an issue. The difference is our solutions. You feel it could somehow come from state. Your claiming that I say it should come from business (I guess because I want to limit state). My position is that your solution is impossible. There is no such government. No way to accomplish what your looking for through state. There is nothing there to work with. If you increase the size of state you get less transparency and more corruption. It is inherent. In order to do what you want you have to increase state power thus increasing amount of corruption. There is no magic system where that is false. It's never happened in history. Corruption and size of government are a direct relationship. Preventing collusion by government owned companies? That is just the maximum amount of collusion possible. There is no democracy where what I am saying is not true.
This is why the smallest amount of government possible is the best answer. If government has to power then you have the least amount of collusion possible. This is just a fact. It's not about giving big business freedom to control everything. It is by removing the power of state then big business has no means to control everything. It is only through government that business has the means to control. Bigger government just gives them more means. You think there is some type of government that can equalize things, but the only way to equalize the rules (not the results) is to remove the means of control that business uses. That is the state. There is no government you can imagine or come up with that will accomplish what you want. It will only give them more power. This is just a fact. It is the nature of government. No matter what amazing government you can dream up. You can't legislate equality. You can create fairness by removing state power.
Hey, about that nature-nurture recommended reading piece again, it thankfully led me to finding this one in which both Massimo and Lewontin are mentioned.ReplyDelete
Is Evolutionary Biology Infected With Invalid Teleological Reasoning?
A Review of Not By Design: Retiring Darwin’s Watchmaker by John O. Reiss, University of California Press, 2009
David J. Depew, Project on the Rhetoric of Inquiry, Bowman House, University of Iowa, Iowa City, IA 52240, USA.