Paul A. Rahe addresses a question about whether there is a non-Marxist literature on what occasions revolutions (he misses Hannah Arendt). Are there leading indicators that suggest a revolution may be coming?
One key indicator is that those with access to the levers of power within the ruling order cease to believe in the religion or ideology that legitimizes the regime. Another is that their underlings also gradually abandon the beliefs that render respectable the rule of their masters.
For some reason, he goes on to talk about China.


Texan99 said...

This is very close to what we've been discussing at Cassandra's place. Sometimes the underlings remember that their masters have no power to constrain their minds. The masters, knowing how dangerous this trend can be, try to get the underlings not only to obey, but to acknowledge that their masters are right to demand obedience. Sometimes that is the face that tradition wears: the masters' longing for respectability. It's not enough that they can force you; they want you to say you like it.

The most brutally oppressive regime imaginable still depends to some degree on consent. When the consent is genuine, widespread, and resilient, the regime can weather a lot of stress. When the consent is brittle, fearful, and resentful, things can turn ugly in a hurry.

Grim said...

That's not necessarily a sign of impending revolution, though: it was the case in the American South during the period of slavery. There was an intense pro-slavery argument being fielded by intellectuals at the time, explaining why it was much better for the slaves to be slaves than to be free. (It is an irony of sorts that the brutality of the post-war economy actually made it the case that, at least in terms of access to food and physical security, free sharecroppers were worse off than slaves had been.) Nevertheless, there was no chance of an internal revolution at the time. The revolution that followed depended on external military force, which was followed by a successful counterrevolution from the 'master' class.

There's a second parallel to the argument, which is that the tradition was fielded by both sides. The pro-slavery argument based themselves on a limited reading of the Bible, with selections carefully chosen to highlight that obedience to masters was pleasing to God; and on a utilitarian argument about what was physically and economically better.

The anti-slavery forces fielded the same Bible in a much more compelling way, consulting instead the story of Moses' liberation of a captive people, Jesus' promises to the least among us, and the general account of human dignity. They made the argument that it didn't matter how comfortable people were: what was at issue was their dignity as sons of God.

It's often said that traditional American culture was racist, but really without that traditional argument it's not clear to me that the Civil War would have come out the same way. It was a very close-run thing at times, and without the sense of that moral cause the wavering public support for the war might well have collapsed.

So is the tradition racist? There were racists in it, who tried to use it for that end. But if anything it must be said that they failed, and they failed on the tradition's own higher terms.

Still, even then, much was left to the adjudication of the Lord of Hosts.

Texan99 said...

I read or heard an argument recently to the effect that people will treat an owned worker better than a hired one, just as they'll wash their own cars but not rented ones. The defect in the argument, of course, is that the car is not free to go and find a better position if it's mistreated. Literal slavery can work out better for workers than wage slavery only so long as the society around them is willing to collaborate in limiting their options.

Grim said...

Well, that was certainly true in the Old South. The slaves weren't the ones used in the most dangerous positions -- the hired Irish workers were. They were the ones whose job it would be to (say) catch the several-hundred-pound cotton bales being slid down ramps to the ships. If they die or get crippled up, you just hire a new one.

We addressed that problem via OSHA-style concepts that still don't exist in many places. The result is that a lot of people who would have been wage slaves are now welfare cases, because unskilled work is mostly overseas now. Is that an improvement in their condition? Over just slavery, or over wage-slavery too?

Texan99 said...

I doubt anything but the availability of choices is likely to improve a worker's condition in the bulk of cases. Even a callous and grasping employer is forced to consider the danger that a worker will walk away and find better working conditions elsewhere. The really dangerous situation is the one in which the employee is somehow trapped. That's one reason economic prosperity and job growth are important, and minimum-wage laws are cruel. Employers can get away with too much if jobs are scarce. Minimum wages force marginal workers to choose between artificially scarce jobs and absolute idleness.

I never have bought the argument against overseas jobs. There is always enough work to occupy everyone who lives in a society. It will not always be work of a sort that will give the worker an enviable standard of living; that's what charity is for. But anyone not actually in a coma can contribute something locally, even if he can't compete for a specific task against an overseas worker willing to work extra-cheap. You can't make a worker's work more valuable either by limiting competition or by setting wages by fiat. You can only make people unwilling to hire him at that price for that task. If you then send him home to receive a welfare check, you don't find out what other task he can do at a price that's actually worth it for the recipient.

And that's why unemployment rates have skyrocketed for underprivileged minorities and young people.

Grim said...

I don't know how much of that economic theory I buy, Tex. In a way there remains lots of work to do that we aren't doing because it isn't economic to employ people to do it -- in China they had someone tasked to walk behind you in the McDonald's and sweep the floor so it remained perfectly spotless, and someone else tasked to take your tray to the bins (as we do ourselves here). So in a way, yes, we could generate new jobs if we could pay Chinese wages (and if no other means of support were available).

Whether this is a source of dignity, especially given the need to accept charity simply to survive, is not clear to me. I'm not sure how much better off someone is whose work is regarded as nearly worthless by society, but who depends on that society nevertheless being willing to throw them a few coins, vice a slave whose work is considered essential to society, but who is not free to leave the employment.

In either case, the person in such a condition seems to me to have a reasonable cause to rebel. Neither situation seems just enough to compel them morally to accept it, even though one case is wholly based on consensual relationships about pay and employment, and the other is nonconsensual.

Texan99 said...

I can't honestly say I understood a word of that. If someone can contribute at all, he's doing something that someone will pay something for -- as long as it's not illegal to pay that rate. How is that worse than requiring him to stay home in order to get a dole check?

Grim said...

The question about the dole was whether it was worse, or better, than the kind of dangerous work the Irish used to do -- given that, if they got crippled or killed doing it, there would be no benefits or insurance to care for them. We've settled that with OSHA, but the result is that many people can't get jobs of any sort now because the benefits and insurance are expensive enough to make their value marginal.

So it's the economy, as much as the law, that makes those people stay home here. In China they wouldn't: they'd be out there doing dangerous work, and some of them will be crippled and reduced to begging because of the lack of safety and insurance provisions. When we were there one of the things we encountered were welders who went blind after about ten years on the job, because they didn't have access to welding goggles. That seems like a marginal expense, here; we would never think of hiring a welder and not ensuring that he or she had welding goggles (for ten years!). We might have paid enough that they could purchase their own goggles, or we might have provided them, but we'd be sure they had them.

And that's skilled labor. The genuinely unskilled get paid much less, and people who hire them have even less regard for their safety (since it's not hard to find another).

The question before us was one of dignity. I'm not sure this qualifies as dignity. It's consensual, to be sure. Nobody is making them take these jobs: they're doing it for reasons of their own, such as hunger. But if dignity implies that your fellow human beings treat you with respect, that doesn't seem to be happening here.

If dignity does not imply that -- if it is some internal state arising from self-regard -- then surely they might have it. They might take pride in the fact that they work rather than taking charity (or, in the case of the sweeper, that they at least somewhat limit the charity they are obligated to take).

Texan99 said...

I went back to your comment and see now that your question was whether OSHA standards led to unemployment. I still think that the best cure for unreasonably unsafe jobs is the same as the cure for jobs that are made intolerable by any other means, whether it's low wages, servile conditions, or lack of upward mobility. The cure is more choice for the workers, who will leave the jobs where the pay isn't worth the risk/pain/humiliation.

The problem at the base of all this seems to be that we can't bear for anyone to be forced by mere want to do something intolerable. I'd rather see that problem addressed by charity that meets the most basic and immediate crises of food and housing. Beyond whatever permanent minimum level of physical security we find we can support as a society, people should be free to work out for themselves what they're willing to do in order to raise their standard of living.

On the other hand, I don't have any problem in principle with limiting the ability of contracts to absolve some kinds of liability, such as for avoidable death or maiming (we treat some kinds of death and maiming as inevitable for military and law-enforcement jobs). We can make those costs stick to the employer no mater what. That may mean that the employer eliminates the most dangerous jobs altogether, unless and until he can find a cost-effective way to make them safer. In that case, we have to hope that confiscatory taxes and minimum-wage laws haven't dried up the alternative jobs that the worker will need to move to.

Texan99 said...

While I cleared yaupon roots today, I was contemplating on how differently you and I approach these dilemmas. You tend to be more concerned than I about protecting people from the consequences of risk; it's something I can be a little cavalier about. I have more of a hair trigger for intrusions on autonomy, even when they appear necessary in order to avert very serious risks.

And yet when you look at our two lives, it's clear that you have a far greater appetite for risk than I do. I am generally quite cautious, and will happily trade all kinds of potential benefit for security and predictability. as long as it's by my own choice. You're something of a daredevil, while no one would ever think of calling me that.

Grim said...

It's true that my appetite for risk is quite high. Society isn't just for me, though. In fact, it's not chiefly for men like me. Think of the people with whom I share something important in common: bikers, philosophers, poets, warriors. These things we do that we call society, they are not for us.

You might say that society exists to protect the weak, the young, and the old. But we are called to serve the weak, and it is only natural that we should love our young and honor our old. Society is for them, to protect them and keep them safe. It's what they want.

Ironically, one of the things many people want to be protected from is me. My experience of society is therefore mostly as a set of limits on my autonomy. I find it at least as irksome as you do. But I have young and old to consider, so I endure it with whatever patience and grace I can manage on any given day.

Grim said...

Now that's not to say that I never think of autonomy concerns relative to society. One of the things people need to have protected is their liberty -- in fact, it's something many modern Americans need to have protected for them. And of course there are limits beyond which I would feel obligated to take up arms.

But most of the limits aren't like that. They're things like -- "You have to leave your gun outside the church, and our schools and government buildings, because you scare us." "You have to pay for highly expensive insurance in order to drive on our roads, because you might hit us." "You can't buy beer on Sunday or election day, because you might get drunk and scare us, or vote for someone we don't like."

I don't much care for any of these restrictions, or any of the ten thousand more, but I submit to them as well as I can bring myself to do. It's meant as a gesture of respect to my fellow human beings, or at least an acknowledgement that pride is a severe sin to which I am surely liable.

Texan99 said...

I'm always hoping to engage that undeniable preference for liberty, in favor of your refraining from imposing too much protection on other people -- many of whom feel much as you do about it, even if you find it hard to identify with them, because you see them as weak. They're not all as different from you as you might think. We all suffer harm. We all die. I would say we all have the right to decide how much risk we'll take, even those of us with narrower shoulders and smaller upper-body strength.

Grim said...

You mistake me if you think I believe that those are the qualities that define strength or weakness. I went to some trouble to make sure I phrased that in a way that would not imply I took the present company to be weak.

What would you engage my preference for liberty to do?

Texan99 said...

Not to build cages around people to whom you owe a duty of protection. The duty is a good thing. The cages are a temptation.

Grim said...

Then you should be happy, for I have built no cages. In general, even in the case of children under my protection, I have tried to help people learn how to do the dangerous things they want to do. It is not my way to forbid them.

If you mean that you want me to join you in tearing down cages that other people have built, sometimes I will be glad to do that, and sometimes I won't be. It depends on why the cage is there. If it is really only to protect you from yourself, that's one thing.

Often cages are not to protect you from yourself, but to protect others from you. Then we must ask not only about the aesthetics of cages, but about whether the interests the people are trying to protect are legitimately protected with cages. Sometimes they are, even with literal cages, let alone the metaphorical ones that are so much easier to bear.

Texan99 said...

An example would be your support for minimum-wage laws. I would guess that you see it as something like the posse that rides out after the bank robber: we're justified in using force to protect the worker from the too-powerful employer. I see it more as protective custody for the worker: we're not justified in treating him as incompetent to strike his own bargains. Protective action often wears those two potential faces.

I'd use an example from the past involving protective restrictions on women, but I fear I'd hear either that it never happened that way (except for poor women), or that it happened but it was OK because women liked it, even though they rejected it as soon as they got the power to do so. Or it wasn't OK, but our forbears were doing many other fine things back then, so why am I being so mean to their memory? :-)

For now, you know, I'm not asking you to do anything, or join me in doing anything. I'm arguing with you, because I detect something in your reasoning that strikes me as self-contradictory. If I thought you didn't care about consistency, I wouldn't be pestering you with it. If I thought you undermined liberty out of some kind of corruption of soul, I'd never bother talking to you at all. It's precisely because we agree on some things that I find it surprising and interesting how we can disagree on others, and I enjoy exploring the problem. I hope you do, too, or I'll find myself talking to the air.

Grim said...

I'm willing to hear an argument for dismantling minimum wage laws, but I'd like it to be fully-formed. Elise used to make the point that Americans had decided that we simply can't leave people to starve. As a result, we have to answer questions that we wouldn't have to answer otherwise.

The effect of imposing a minimum wage law on, say, China would be to create a vast number of unemployed people (in return for those who are employed doing better than they do). What happens to those people? China doesn't care. They can beg or starve. It's not the government's problem, and if they try to make it the government's problem, the government will shoot them.

Here, if we removed a minimum wage law, more people would become employable. (Not as many as you'd think, because the minimum wage law has already been thoroughly undermined: the law currently sets it aside for temporary or seasonal employees, which means that jobs that used to be 'minimum wage' are now classified as temporary or seasonal, even if you keep the same job for years.) However, everyone who is in a minimum wage job will make less; and these jobs are already within the range that welfare often applies to them.

So whether we do or do not remove mnimum wage laws, it looks like taxpayers will be paying the freight for at least some of these people. We'd want to know (a) what the difference is, and (b) whether we'd prefer to compel the corporations who employ these people to pay them better wages so we don't have to pay them as much welfare, or whether we'd prefer to tax everyone to make up the difference.

Neither position strikes me as ideal, and I find it hard to choose between them. There's nothing but evil and misfortune on either horn of the dilemma: the question is how much we want to force taxpayers to pony up extra money for the care of people for whom they are in no way responsible, and how much we prefer to force corporations to bear.

We don't have a good answer to the real problem, which is that it isn't economic to employ many people at a level at which they can decently live. That problem is only going to get worse as automation improves.

Grim said...

As for the issue of women in the Middle Ages, it may be as well if we don't discuss it. I've been doing a great deal of research into it over the last year or two, and I've come to the conclusion that our general mythology about Medieval women is wrong. The women I meet are not generally victims, and the men don't always hate or fear them -- in fact they often like them quite a bit, and strive to find ways to include them. That seems to change with the rise of the forces we have normally believed to be responsible for the improvement in womens' condition -- the Renaissance's return of Greek and Roman thinking (which was down on women) and the Enlightenment's focus on pure rationality (of which women were believed to have less). It's surprising, maybe, and it's out of order with what we think ought to be true, certainly, but I really think we need a thorough re-examination of the history of the period.

For 'meanness,' which for me is about the honor of the people involved -- the women who don't deserve to be portrayed as victims, but as heroic, and the men who don't deserve to be portrayed as oppressors -- you understand that I have a metaphysical difference with others about their status. The honor of the dead is always important, even to those who don't believe as I do. But I don't believe the dead are gone, not in the way that contemporary Americans tend to envision them -- no more than I think the unborn are not really people. (Confer Jer. 1:5, which also speaks of something about us that pre-exists the body, and survives it.)

I spend a lot of time with the dead. More of my close companions are dead than alive. I don't believe they have ceased to exist, but rather I believe that they always did exist, and always will exist. I want to understand them as they wanted to be understood, and to defend their dignity in death, as I would a true friend's reputation once he was gone.

Texan99 said...

I don't believe the problem with minimum wage is what to do with people who can't afford food. I have proposed charity as a response to the problem of people who can't afford food, rather than a dunning of either taxpayers or corporations. But whatever we are to do about feeding the destitute, the issue of the minimum wage is completely separate. There is no reason to suppose that starvation will be more prevalent if the minimum wage is removed; there is every reason to suppose that the employment rate will go up. I think there is a tendency to believe that the minimum wage is a way of forcing employers to shoulder some of the public burden of feeding people who would otherwise be destitute. In practice, it simply means that employers will hire workers who can contribute enough value to the enterprise that their job is not a money-losing proposition for the employer, while everyone else who might have been hired at a lower rate will be jobless and on the dole. The problem with how to feed the hungry -- i.e., shall each of us use his own resources for it or shall we have the power to force others to pony up? -- will be there either way.

Grim said...

Well, maybe the issues are separate. We started with issues of dignity as related to work. But maybe the idea that eating and working -- or dignity and working -- are fundamentally related is a bad assumption. It's Biblical -- 2 Thessalonians 3:10 -- but that doesn't automatically mean it is a good principle.

Still, it has served us well for a while. If you can earn enough to eat and to live, so that you need no man's charity and no public assistance, you have access to a lot more personal liberty. It keeps people out of your business. What I'd like is a system by which, somehow, even the weakest among us can get their physical needs answered without being subject to constant prying and scrutiny -- and yet, obviously, if they are our wards (or charity cases) we must scrutinize. Work seems the obvious answer, but perhaps it isn't the only one.

douglas said...

Chiming in, first I'd like to say I'm thoroughly enjoying the exchange you are having, as I think both positions are well considered, but my gut sides with Tex. My tendency is to be a bit of a hard ass as regards societies obligations (through the government), but much softer when it comes to personal interaction (I'll give you the shirt off my back if you need it), so I'm trying to see if arguments I would agree with hold up against a well considered position like Grim's.

"We don't have a good answer to the real problem, which is that it isn't economic to employ many people at a level at which they can decently live."

It could be, if they are productive enough. If you believe in the free market, you believe that it finds the right cost for things, and so one need only make themselves of sufficient value to earn a passable living, or simply work more quantity (though we impede that by limiting job opportunities and regulating overtime, etc.). If I have no 'skills' then perhaps I can simply offer increased volume to make my fair share. If we accept the premise that the market sets prices better than the government, then it's implied that the government intervention can only be a net negative, even if it apparently contributes some good to the equation.

I think, ultimately, that is my issue with things like minimum wage laws- They purport to do good, but it seems much more a band-aid that helps support a system I think fails those in it worse than a free market, and therefore can't favor it. Good intentions aren't enough (but all too often are the justification for many a government program).

Regarding the post itself- I recently read the letter from which Jefferson's famous 'Tree of Liberty" quote is taken (not having actually read it before), and what really struck me was that it wasn't that he suggested it should occasionally happen, as that he really suggests it should frequently happen. From that letter:

"The people can not be all, and always, well informed. The part which is wrong will be discontented in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions it is a lethargy, the forerunner of death to the public liberty."

We've been in that state for some time now, haven't we? It would appear that he would be stunned that we ever let things get this far out of hand. Talking about what precipitates revolution might be less useful than asking 'what do those in power use to deter revolution?'

Grim said...

I'm glad to have you join us, Douglas, or anyone else -- but let me be clear that the minimum wage position is one of my least well considered positions! :) I really don't have a good answer to the problem. I'm not sure I have a bad answer to the problem, even. The problem just strikes me as more serious than our leading ideologies take it to be, and apt to get worse as automation continues to advance in rendering people uneconomic ways of getting things done that we want done.

Now when I say things like that and Joseph W. is around, he warns me against Ludditism, and cites the advantages of technology in creating whole new fields of human endeavor. But I'm not a Luddite -- my answer isn't that we should stop using machines to do things, so people still have jobs. The problem strikes me as one of sorting out how to deal with people who no longer have jobs (because there's nothing they can do that we want them to do enough to pay them enough for them to survive).

Grim said...

Which brings me to this point you make: "If you believe in the free market, you believe that it finds the right cost for things[.]" I like that you phrase this as 'belief,' because this is an article of faith rather than a fact in evidence. There's nothing at all wrong with basing your approach to a problem on things you deeply believe to be true, of course. But follow me for a moment and you'll see how uncertain this principle is.

When we say that the market sets the "right" price (which is the same as saying "right cost," since someone is paying the cost, and for them it is the price) then what we have said is a simple tautology. It's a logical truth, because it's true by definition. The "right" price, under free market theory, is that price set by the market. The good is worth (and only worth) what people will pay for it given the supply and demand.

If the price is "right" for the market, though, is it the right price for the people? This is where there seems to be a problem. What if you were badly educated, and have no special skills, and there are lots of other people out of work at the same time that you are? Your labor's value is worth almost nothing -- in fact, it may be so close to nothing that we are really saying that one in 1,000 people will be paid anything at all, and the other 999 who are in your shoes will earn nothing. (Maybe it's fifty instead of a thousand; the point is the same, though the duration we can put off a decision of what to do about it as a society differs.)

Your argument is that they should do more, but there aren't any jobs for people like this -- they can't take a second job if they can't take a first job. Doing more of something valueless doesn't get you very far. (Imagine the teenager who tells you he is a professional Xbox player. He can't work his way out of starvation by doing more of what he is good at! But this is also true of the person who does something useful, but of inadequate value to draw pay.)

Then there will be people whose labor is of some value, and for whom there are jobs; but the jobs pay so little that they simply run out of hours in the day. If you were paid the wages for an unskilled worker in Pakistan, for example, you could work 20 hours a day and not make enough to cover food and rent in Texas. But as an unskilled American, that Pakistani is your competitor -- he'll do the work for those wages, though you can't.

We could, as a society, make work for these categories of people to do -- 'go sweep the highway' -- but we're no longer paying the "right" price for these services, as the market doesn't value the service at anything like the rate we will pay them so they won't die.

Or we can just devote resources to charity/largess. One form of this is better than the other, but it's still uneconomic. The market is no solution for them.

So is the price "right"? In a way yes, by definition it can't be otherwise than right. But in another way -- can it provide enough wealth so the person doing the work can survive on the wage? -- the answer must be no.

Grim said...

Now, one thing Cassandra sometimes says here is that there are reasons to work other than for pay. This mitigates against the minimum wage law, because it can cause no job to be available for someone who wants a job just to have something that forces them to get out of the house; or because they take pride in being employed; or for some other reason besides supporting themselves or a family.

That's true, and it's a good strike against the minimum wage (at least for some kinds of positions and/or demographic categories, such as the elderly who need something to get them out of the house; though as I mentioned, the minimum wage has been thoroughly undermined, to the point that I'm not sure if it's really still much of a factor in our economy).

It doesn't address the issue that concerns me, but it seems like a good point on that related issue.

Texan99 said...

Did I give you the impression I thought there was no connection between work and dignity? I'm the one who objects that the minimum wage increases unemployment and leaves people with no option but the dole. What I actually said was that I doubted a connection between the minimum wage and our ability to help the destitute. We will always have to figure out what to do about the destitute, but the minimum wage does not prevent destitution -- in fact, it exacerbates it.

The minimum wage doesn't create more wages. It just draws a bright line and says everyone whose work is really worth that much can have a job, and everyone below cannot. In a natural system, that bottom group would be able to earn at least something, and thereby preserve as much work-related dignity as possible.

Grim said...

Well, it's our need to help them that seems to be connected to dignity, at least if we assume a connection between dignity and work.

Maybe we shouldn't. The source of dignity may be better said to lie in the human spirit, which exists and is worthy of respect even if you can't find a job at all. The fact that someone else is paying for your food, indeed for your life, doesn't need to be taken to imply that your life is without worth -- it's just not worth anything to the market.

The market is how we usually determine value, but it's exchange value. So if you are worthless in the market, that only means that you have nothing to offer your fellow human beings such that your contributions justify your survival. That means you aren't worth much to them. You may still be a thing that is of value in itself.

But there, too, we are outside the market. We don't need a minimum wage, but then we do need some other means than the market of determining how resources shall be allocated. How much should you get for being a human being, though of no practical value to the other members of your society?

(I recall Kipling's warning of a time "when all men are paid for existing/ and none must pay for their sins." So there is a moral hazard here, even though we are thinking about these questions out of a moral desire -- the desire to respect human dignity.)

Texan99 said...

Yes. It's not a good idea to conflate economic value with human value. Economic value is a way for strangers to interact with each other even though they're not close enough to feel an obligation to feed and house each other from sheer love.

Economic value has almost nothing to do with our willingness to feed and house the destitute. Someone in a coma can't produce anything, which is why we don't measure our willingness to provide a warm safe bed by the coma patient's production output. Our concern for the human spirit and human dignity makes us willing to support the helpless. It doesn't, on the other hand, necessarily lead us to pretend that's the same thing as a job.

You can give people money because you can't bear to see them go without, or because they've got something to trade you for it. I'm not sure it's a good idea to mix those two motives up too much, even if they both occupy our hearts nearly all the time. For one thing, it leads to conclusions like "that guy over there should pay his workers more, because they're too poor," instead of, "those guys over there are too poor. I should help them."

Grim said...

But then what do you do with Kipling's warning?

Likewise -- and this is a separate problem needing a separate answer, I think -- what justifies taxing the citizenry to pay for welfare cases, instead of taxing the corporate boss they work for by insisting he pay them better? He at least has a relationship with them. Most of the citizens have no relationship with them at all except for sharing citizenry (and not even that in the case of illegal immigrants, or even lawful ones). Why would the responsibility for providing them with economic resources lie with the citizenry, which is a political unit, rather than the economic unit of which they are a part?

Texan99 said...

My answer to the moral hazard is that if we really can't bear seeing people starve in the streets, then we've got to swallow the moral hazard; i.e., take the risk that we'll turn the occasional productive citizen into a parasite. And we should accept how much that costs, and figure out a way to pay for it without borrowing money. The only way I know to minimize that problem is to keep the dole modest and try to distinguish between people who can't work and people who simply won't. I don't trust the government to make that determination, which is one reason I wouldn't have the government administer charity. I would have people give their own money to individuals about whom they had learned something, either personally or through an institution they personally trusted.

Your second question is: why should the taxpayer pay for welfare instead of the employer? Gosh, I hardly know how to begin. One, I don't think the taxpayer should pay for welfare, as I say almost daily. I think the people who claim to be concerned about poverty should use their own money to alleviate it, privately, not via the state and not by commandeering the resources of others.

Two, I don't see how the employer became responsible for supporting his workers as if they were his family, simply because they can be described as an "economic unit." That sounds like a terrific way to discourage employers from creating employment relationships. They've tried that in Europe, and what they got is economic and employment stagnation, as employers are deeply reluctant to take on workers they can never cut loose again.

This is what I mean by the danger of confusing a job relationship with a love or kinship relationship. Most of us naturally will feel more charitable toward the people we're in closest contact with. It does not follow that society should impose on us a duty to feed and house anyone to whom we're caught standing too close, such as our employees. That just makes for fewer employees. Our bosses aren't our parents. Workers are not children.

Grim said...

Neither is the government your parents, though, which seems to be where we end up. Private charity doesn't amount to spending on the levels that the government commands: Medicaid alone slightly outstrips all private charity ($295B in 2004 for Medicaid, versus slightly less than that in private charity). That doesn't touch any of the other programs for low-income Americans at the Federal and state levels, and sometimes even at the city level in urban environments.

Now, we could move some of that off government and to private charity. Give people actual tax credits for money donated to poverty-relief charities, and you could end up paying no taxes in return for supporting the charity of your choice. (A highly desirable solution, from where I sit; but intolerable for Congress!)

But I don't think even America's noted willingness to give money to charity extends to anything like the levels of support our population has come to command. Either we decide that their dignity is not harmed by us allowing some of them to starve, or... I don't know what, really. And in any case there are no votes for cutting welfare -- just the opposite.

Texan99 said...

I can't agree. If Americans would refuse to fund the current level of federally dispensed charity, then I would say the lower level they would drop to is the amount of charity society is prepared as a whole to give. If it's not as much as people have come to expect over the last 50 years, tough. Entitlements are out of control, not only because we have to borrow to fund them but because they've far exceed any reasonable attempt to alleviate poverty and have instead morphed into a collectivization of savings for routine retirement and medical expenses that ought to be handled privately anyway -- if not for everyone, then at least for all but a tiny percentage of the most desperate and disaster-struck.

Your formulation assumes that there will be more resources available for charity if the government compels citizens to contribute more to charity than they'd otherwise choose to do. But that just means that the people who want more resources to be available for charity are forcing other people to pay for it rather than stepping up themselves. I have no patience with anyone's gratifying his own desire to be charitable by funding it with his neighbor's resources.

I'd like to see every single dog and cat in this country well-fed and cared for, with no pounds and no euthanasia. I'm certain that's a virtuous aim, and we'd all be happier and healthier for it. But do I have the right to force my neighbors to fund my vision?

We do indeed end up with the government acting as our parent, but not through any policies I've recommended. It's the very opposite of what I advocate, and not at all inevitable. This country is one of the world's foremost experiments in a government that doesn't act like a parent.

Grim said...

It's true that you haven't advocated for it. It seems to be a consequence of a sort, because of the way these ideas play out in the context of the country we share with other American voters. I'm not sure how much we can be free of responsibility for easy-to-forsee consequences as long as this context doesn't change.

Here I think of Chesterton's line: "But the end of the world was long ago, when the ends of the world waxed free,/ When Rome was sunk in a waste of slaves, and the sun drowned in the sea." He doesn't mean actual slaves, but people of slavish disposition -- a leading theory about the end of the Roman Empire was that its native sons were less likely to serve in the Legions than they had been, making them rely more and more on barbarian mercenary forces within the borders.

We have a similar problem. Just two generations ago we were a people who joined together to fight the Second World War with astonishing selflessness. Today our wars were fought by 0.45% of Americans, while the population chiefly demands of its government transfer payments -- either to themselves, or to those they don't wish to be burdened with caring for, including not only the poor but their own elderly parents.

If we can't change that context, we're stuck with the problem. Perhaps it can be changed by calling people to a more moral life, though a harder one; perhaps it cannot be changed in that way.

Texan99 said...

But aren't you arguing that it's unfair to put a burden on taxpayers by advocating for a system of private charity? I think the thrust of that argument is that private charity will fail, and the taxpayers will have no choice but to pick up the tab. I maintain that taxpayer-funded charity already has failed; we borrow heavily, and disastrously, to fund it while pretending that the taxpayers (or a disfavored narrow slice of them) can pay for it. As long as taxpayers keep making the mistake of voting to pick up the tab, taxpayers will get left holding the bag. That's why I'm advocating for taxpaying voters to stop voting to do that.

Perhaps even more, I'm advocating for 51% of the voters to quit voting to stick 49% of the taxpayers with the bag for their favorite charitable schemes. More than anything, I'd like to see laws that absolutely prohibit a bare majority of voters from imposing the cost of their charitable programs on a bare minority of voters. In other words, I'd love to see a Constitutional amendment outlawing a redistributionist income tax system. Whatever we decide as a voting society to fund, should be imposed as a cost on the entire voting society. That way people will think twice before they vote to fund goodies with other people's money.

I don't think it's valid to say that taxpayers will be stuck with a cost just because people won't want to pay for their own decisions and will try to stick taxpayers with the cost. The way out of that vicious cycle is to say "no." Of course, if people say "yes" instead, they'll remain stuck.

It's a little like saying I have to pay protection money to my would-be burglar because otherwise I can be sure he'll burgle me.

Grim said...

What I think I'm arguing is that our system has failed, and we're left with a set of bad choices. Given the preferences of our co-Americans, we have a choice between the taxpayers paying for the poor, and the employer paying for them. We don't have the choice of not paying.

Maybe the point is clearer if we use two government agencies. It used to be the case that the Forsyth County Sheriff's Department paid such low wages that deputies were eligible for food stamps, Medicaid, and all sorts of other assistance from the state and Federal governments. The county commission argued that they were being good stewards of our tax dollars by getting a great deal on law enforcement paychecks.

In a way that was true: they had hit upon a successful scheme to push part of the cost of employing a deputy off onto taxpayers from outside the county (indeed, from across the entire nation). However, it was never clear to me why anyone in Oregon (say) should help pay the freight for local law enforcement from which they obtained no benefit whatsoever.

In the case of private employers, they want someone to do a job, but they don't always want to pay enough for that person to actually survive. Now, logically, if you don't survive you can't show up for work. So the cost of employing someone, if you are to pay the full cost of it, includes pay at such a rate that you can actually survive where you live -- at minimum, food and shelter, and any other absolutely unavoidable costs that living there imposes upon you (some sorts of non-means-tested taxes, say).

Insofar as that cost is being pushed off onto the government, the employer is pushing part of his costs off on all of us. That strikes me as improper in a certain way.

On the other hand, there are some people (teenagers, people whose spouses have good jobs and just want work to get them out of the house, retired people with pensions, people with investment income, etc) for whom the whole cost of survival is not necessary. For those demographic groups, whatever they are, employment below that minimum standard of 'enough to survive' is not objectionable. You aren't imposing costs on me by employing someone at that rate if they have another means of support.

Now, what you want to argue (I gather) is that we should do away with this government support (or sharply limit it), and replace it with private charity. In theory that's a wonderful idea, except that I'm not sure why the employers should be able to push their costs off onto the generous either. But insofar as we are speaking of the unemployable, say, I agree it would be wonderful to have private charity take over the support.

The question is whether, in this context, it is possible to achieve that. If not, and if politics is 'the art of the possible,' then it's not really an option: no more than my long-wished-for, earnestly advocated, but entirely unlikely proposition that the Federal government learn to respect the 10th Amendment and push all incompatible functions to the states (or disband them). I think that's a great idea too, indeed a necessary idea if the Republic is to be saved, and necessary as well if the Constitution is to be respected: but I don't expect to see it happen.

Texan99 said...

"Given the preferences of our co-Americans, we have a choice between the taxpayers paying for the poor, and the employer paying for them. We don't have the choice of not paying." Actually, we have a choice between China paying for them (the "taxpayers" are failing to do so), or employers not hiring them at all so they don't have to pay for them. Unless we're going to make it mandatory to start a new business and hire a bunch of people?

I'm not persuaded by an example in which one taxpayer-funded organization finds a way to foist its real costs onto another taxpayer-funded organization. The way business is supposed to work is that companies that can't pay their bills will fail. If they get around paying their bills by extorting help from others via a show of helplessness, they can keep that up only so long as their would-be benefactors don't say, "That's enough." Two public agencies can get away with this game of cost-shifting only because the people paying the bills aren't paying voluntarily and can't walk away from the game.

We can help people who don't have enough food to eat or we can leave them to their own devices. I don't understand how we can be said to have a third choice, which is to be both unwilling to leave them to their own devices and unwilling to pay to support them. No system of dumping their upkeep onto someone else and then forcing him at gunpoint to pay for it is either sustainable or justifiable.

Grim said...

Good. I look forward to the end, then.

Texan99 said...

Yes -- anything that can't be sustained, won't. It would be nice if we could stop it by some other means that devaluing and collapsing our currency, because we have several other options available.

douglas said...

I think there are a couple of important flaws at the base of your position, Grim.

First, It seems odd to me to talk of not having work for the unskilled to do and get paid a liveable amount (no luxury, perhaps, but enough to put a roof overhead and food on the table) in a society that imports cheap labor from next door at a rather astonishing rate. Free markets suggest cutting supply would raise the price to a quite liveable amount for those sorts of work.

Second, overseas labor competition does work cheaper, however there are other costs- transport of the goods back to the U.S., palms to be greased (a universal truth wherever labor is that cheap), and so forth. In the end, it's not so undercutting as one would imagine, except for the most menial work, or in many cases- where regulations make the work too expensive here. We can do something about that, but it's not labor costs that are the problem.

Grim said...

I'm not sure how those are flaws in my argument -- in fact, I'm not sure if I'm making an argument, so much as describing a problem set. Perhaps you can explain a bit more how you think those issues interact with what I've been describing.

Ultimately I don't have a good answer to any of these problems. I just see a bunch of problems that we have lost any clarity on how to address. You're talking about cutbacks on immigration while the political class -- Republicans and Democrats -- are talking about amnesty for illegals. Tex is talking about eliminating welfare and replacing it with charity while the political class is working to bring Obamacare online and to slash the military so they can devote almost all government resources to these welfare and transfer-payment programs.

(Your last point re: transportation costs I don't think holds at all. It's true that there are transportation costs, but the salary delta is so huge that manifestly it's more profitable to make things in China and ship them here. You could do something with tariffs, maybe, but once again -- there's no votes for a protectionist agenda.)

As I said, I don't have an answer for any of this. I think the only thing anyone can do is to let it die, and try to sort out how to avoid these problems the next time we build a society.

Texan99 said...

It's true that I'm advocating doing something completely different from what the political class of both parties is doing. Isn't that what we often do here? We're not so much describing a policy that's likely to get traction any time soon in a thoroughly screwed-up Congress. We're talking about what we think would work, or would be just, or both.

I'll just keep voting for people who are closest to my views on things like this.

Where I see the "art of possible" argument coming up with the most cogency is in questions about which policy to support among the ones that might actually get somewhere in Congress. For instance, although I'd expand the immigration quota to cover all the millions of jobs we're genuinely willing to offer people, I'd only do that in an unlikely world in which we'd dismantle the safety net at the same time, because I don't believe you can have open borders and a safety net. Knowing that the safety net won't be dismantled, therefore, I'm less likely to support opening the borders. But that doesn't have too much to do with the abstract question of whether open borders are, other things being equal, a good thing for the economy and the welfare of the country.

Grim said...

Sorry, Tex. Of course you're absolutely free to proffer a view here for no better reason than that it seems true and correct -- indeed, there is no better reason to defend a position.

The minimum wage, which is what at one point we started to discuss, isn't in my realm of 'the way things ought to be.' It's in my realm of 'things I don't care for that I support only because it's clearly important to a majority of my fellow Americans.' The weak, the young and the old, as I said. This one's for the weak, who are a solid majority at this point.

If you want to talk about how I would structure society if I were in charge, well, I assure you that we'd spend very little time talking about the minimum wage. My sense of the right way to deal with people in need of public support for basic needs is to let them enter into different kinds of contracts whereby their long-term support is guaranteed in return for a promise of long-term labor, at conditions that their employer has a fair amount of discretion in directing provided they aren't exceptionally hazardous or punishing. Such a contract is not an 'at will' employment sort of thing, although you must consent to it at first (like a marriage, I suppose). It's more like what we used to call an apprenticeship, with a legally enforceable term of service. It's not quite what we used to call indentured servitude, because the idea isn't that you take a big up-front payment and then work it off, but that you will be provided for in the long term (perhaps for life, if you so contract) in return for accepting that the person you think can care for you better than you could will direct your efforts.

Texan99 said...

Aren't people free to enter into that kind of contract now? Subject, of course, to the need to find a counterparty to agree to the terms of the contract. The usual problem seems to be that the average worker wishes he could find a boss who would agree to more favorable terms. And then, the worker wants to be free to walk away, too, doesn't he? Should he be freer than the boss? The boss didn't use to think so, and spent considerable effort figuring out how to make the serfs stay on the land.

Europe tried imposing what amounts to a long-term duty of support on employers. What it found was that employers declined to hire at the front end. When society dictates the minimum terms of those long-term benefits, employer and employee can't find the sweet spot at which they can agree. When the minimum life-time benefits are above the consensual point, the employer simply doesn't hire. The business doesn't start, or it sputters out if it's already started.

There's another to arrange for long-term security. You work for whatever wages you can command, and you save up for your retirement, buying insurance in the meantime against premature death or disability. You also team up with someone like a spouse or an extended family to minimize the risk that any of you will be destitute if wages are interrupted or expensive bad lucks befalls you. No worker gets as much as he'd have liked in his dreams, but the system has the advantage that every worker can arrange for at least some long-term security as long as he's prepared to live within his means. He's not stuck being unemployed with no means at all.

Grim said...

That's nice if you can command any wages at all, but we've been talking about an increasingly large number of people who can't. It doesn't work for those who can't get a job, because 'employers are refusing to employ at the front end,' which also happens to be the core problem with Obamacare (etc).

The real problem is that many people living today don't deserve to live -- not on market terms. They aren't worth what it takes to feed them, house them and clothe them. We've been doing it for a long time based on taking from people who were worth more, but I don't see how we can do that forever. We're getting to a critical mass of people who aren't worth feeding in market terms -- the elderly, the unskilled, and the unwanted children. We have a ready solution for the last one: abortion. I suspect that some version of that solution will be made available for the elderly. That leaves the unskilled to deal with.

Those three categories, by the way, are the weak, the old, and the young. They are the ones the whole apparatus is for. I don't really need it -- neither do you, not really. That's what I think is at base of this: we've instituted a society really because of a conscience that says we should take care of them, but we're going to use that system to kill them or let them die. There's something poisonous about that, but it may simply be that we're being coy about it. It may not be the ongoing killing that's wrong, but the fact that we let our contributions to this system ease our conscience.

Or maybe it's the killing that is wrong. If that's the case, then we need to do away with this system entirely, and try something new -- or something old.

Grim said...

(Also, I don't think you can enter into a contract on this order now. Maybe you can; but I think it would violate the 13th Amendment on most readings. A pure apprenticeship might not, but a lifetime promise of labor at employer discretion in exchange for sustenance, clothing and lodging might well. But maybe I'm wrong about that, and it's just the existence of free money from the Federal government that keeps people from making such arrangements to ensure they are to be fed.)

Texan99 said...

"My sense of the right way to deal with people in need of public support for basic needs is to let them enter into different kinds of contracts whereby their long-term support is guaranteed in return for a promise of long-term labor . . . ."

But on the other hand, "That's nice if you can command any wages at all, but we've been talking about an increasingly large number of people who can't."

So how do you "let them enter into a contract" for long-term labor in return for a promise of long-term support? With whom will they enter into this contract? Isn't that phrase -- "let them enter" -- kind of eliding the difference between "stop interfering if they can pull it off" and "make someone accommodate them"?

I'm not sure I agree there are in fact lots of people who aren't worth what it takes to feed, house, and clothe them. It just depends on what your minimum standards are for food, housing, and clothing. Practically every able-bodied person in the U.S.A. can do work that's productive enough to feed, house, and clothe a worker at standards that would have felt like plenty 100 or 200 years ago. Non-able-bodied people are a different matter, of course, but we wouldn't have any problem funding charity on a nationwide scale if charity truly were limited to the non-able-bodied.

What hangs us up now, I think, is the unwillingness to acknowledge that there will be a significant inequality in the standard of food, housing, and clothing: neither the market nor any charity we can pull off will enable the workers at the lower end of market power to live at the same standard as the workers with more market power. That's one reason, I think, that many arguments about entitlements founder on the issue of whether the purpose is to avoid extreme want, or to eliminate inequality.

Texan99 said...

PS re your also: Yes, that's why I wondered if the serf, I mean the worker, was to be allowed to leave his job. How much is long-term security worth? Enough to become an indentured servant?

It's true that a strict market argument could be made for allowing low-wage workers to up their market value by permitting them to enslave themselves. Right now we ban that freedom on the ground that some contracts are void as against public policy.

Grim said...

There's no eliding. They can enter into it if they can. If they can't, they can't. Maybe we can't support this mode anymore, but it was a very old and useful mode at one time.

Can they leave? Yes, if the contract isn't met on the other side. If the contract says you are entitled to X and you do not receive it, courts can enforce (and did, historically) a break of the contract. Or you could contract for a period of time, or for some other reason than pure support -- as with the apprentice, who has a right to learn a valuable skill.

You aren't that far away, with the idea that people should accept different standards of living. You can live without the things the rich have, without being less dignified than the rich. I'm saying only that people can often get better standards by tying themselves to those who understand things better than they do themselves. They accept subservience -- which anyone contracting for wages does to some degree -- in return for material support.

Will that suit them? Less than being given the money for free! So we won't get there democratically. But democracy has no solutions to the problem of voting yourself wealth from the richer-than-you. Democracy is Greece.

Texan99 said...

The way our contract law works, you normally can't force someone to perform his side of the contract. You can only get the court to award you money damages for his breach -- and those damages are dischargeable in bankruptcy. That's why it's not really enforceable to agree not to leave a job. The court may issues a money judgment against you, but he won't make you continue to show up at the jobsite. If you can pay, you have to pay. If you can't pay, you get a fresh start in bankruptcy. We did that to get rid of debtor's prison.

Congress could pass a law allowing specific performance of long-term employment contracts, but as you say, they might have to alter the 14th Amendment first.

The system you describe did work for a long time. It just didn't produce prosperity. So workers who enjoyed its protection didn't have a guaranteed standard of living that matched what even the unluckiest worker is likely to be able to reach today with modest effort and luck, and perhaps minimal support from charity. For whatever reason, introducing a lot of personal choice into the market increases overall prosperity. I can't say why it happens (why is a mass of individual choices more efficient overall than any central bureaucracy has ever managed to be?), but the evidence is unmistakable that that's the actual result.

It's also true that subservience can often be traded for material security. It's not one of my favorite approaches, of course, and I'm surprised it appeals to you this much. I guess my ideal world would make it easy for every worker to decide how much subservience he would stick himself with. So for "let them enter into contracts" I would read: by all means, let anyone enter into such contracts who wants to. And let everyone else work for wages at-will and save for his own protection. And never allow the state to tell either of them the minimum terms he must demand, failing which he must accept a state of unemployment; i.e., no minimum wage. Also, never require the state to step in and rescue anyone in either group, barring significant outright disability. Instead, every worker is responsible for making arrangements for his own long-term security, via whatever mode suits him best.

Grim said...

"The system you describe did work for a long time. It just didn't produce prosperity."

Prosperity isn't what it aims at, however. It aims at security. Now adequate prosperity can produce security, and so if you are the sort of person who is competitive at higher levels it is a bad deal.

But the idea here isn't to require the competitive to take bad deals. It's to provide the noncompetitive, who are otherwise unable to bring themselves to market, an additional good that the competitive don't have. "I may not be the best at anything," the unskilled laborer might say, "and I may not even be very good at anything. But I will be your man for as long as I live, provided that you see that I never starve and never lack for clothes and a roof over my head by night."

How good a deal is that? It's not for you, and it's not for me. But it seems to be for some, who take at least as degrading a deal by accepting free money extorted at gunpoint in return for their votes. Under this system, they'd also have to provide some labor.

"It's not one of my favorite approaches, of course, and I'm surprised it appeals to you this much."

It doesn't appeal to me at all as a personal condition. I would rather die. I am prepared to die.

What appeals to me is that it puts the cost where it belongs. Survival carries a cost, and it's a market cost. The market handles transactions governed in terms of how much a good is worth in trade to someone else. If your service are worth nothing in trade to anyone else, then you must find something beyond your services to trade.

Your freedom and your dignity are two things you could trade. But we have already agreed that dignity is not to be traded; it does not lie within the market. That leaves freedom to trade.

Traditionally these sorts of deals included a mechanism by which a top-value was set on your liberty. If it turned out that you really could provide value beyond what you expected, you could buy your freedom of action back for a given price. If you couldn't, well, your security would be provided for as long as the contract lasted -- for life, even.

This was a mode of contract common in Medieval Spain. We wouldn't choose it now; but what I wonder about is what comes after what we think we can choose. The system we have chosen is dying, and precisely of our choices. We will soon be left with the things we wouldn't have chosen -- not you and me, perhaps, but the weak, the young, and the old.

Texan99 said...

I'm a little puzzled by your distinction between security and prosperity. I thought what you meant by security was a reasonable assurance that the worker would never be in severe material want no matter how low on the totem pole he found himself in terms of the popular valuation of his services. A large rise in prosperity in the society will mean that only a tiny percentage of workers are subjected to the level of threatened want that is commonplace even for the moderately lucky and secure workers in a less prosperous society. Or is the guarantee of work more important than the protection from desperate starvation and homelessness? Sort of a sense that, tough as times are materially, a worker at least has a place to go and work to do -- indeed, he has no choice but to go there and do it, because the police will send him back if he tries to escape.

I wondered if it was the case that this kind of servitude was a condition you favored for others rather than yourself. In that case, though, is it important to you that it not be imposed on any worker that doesn't want it? Or shall it be imposed on any worker who finds that he can't avoid penury without bargaining away his freedom? Should he be required to sell his kidneys first, too? I'm starting to think that my proposed system is softer-hearted as well as more practical. I would let everyone work for whatever wage he could command, with freedom to come and go between jobs, and would step in with minimal charity for a small percentage of the unluckiest in this competition. Your system strikes me uncomfortably close to the gulag.

Is it that you recognize how awful a system this would be, but you're making a cautionary point that it is an inevitable sequel to the present error, which you identify as a futile belief that an economy can be run on the basis of choice? I would have said, of course, that the present system is dying precisely because of its abrogation of choice.

Grim said...

Choice where?

I would let a worker choose, even a worker whose value was marginal. It would leave employers free to employ him (or her), or not. It would leave options open for those who discover new talents, and become more productive than they thought they would be.

Right now we let the unproductive choose to take welfare, or disability, essentially forever while producing nothing of value. That you don't wish to do; and I don't think it can be done either.

So we agree that far. The question is what alternatives we have. You describe a system that is much more optimistic than I think is really possible. I don't believe that we can sustain a system like you describe. A system by which they work for what they can get is fine if they can get anything; but the competitive wages for unskilled workers (which I maintain, unless Douglas should convince me otherwise, are the competitive wages with Pakistan or India or Africa) are starvation wages here.

I don't want to see firms pushing off their costs on the public. I don't want a welfare system whereby they can pay less than survival, knowing that we'll pick up the tab.

So it may simply be that we have different views of what is possible. You seem to think the economy will make us all prosperous. If it is true that we shall do well by commanding what wages we can, with a minimal reference to charity in extremis, then you may be right.

But I cannot help but notice that the number of people who are unemployable seems to be rising, not falling. For a long time the old magic worked, so that the economy was a rising tide that lifted all boats. That has not been true for a while, though: perhaps twenty years, perhaps thirty. We have masked it with transfer payments here. I don't think it can be masked forever.

If I shared your view of what our choices were, I might share your optimism. But you believe in an economy with great possibilities for the unskilled, which does not strike me as right. It offers great opportunities for the skilled, for the educated, for the capable -- for the strong, if you like, given a certain reading of what it means to be strong. I do not see what it offers the weak. I only mean to offer them something -- a guarantee, at least, and more if they prove more capable than they thought they were.

But I wouldn't send police to command the weak, if I were in charge. If they are to do no more than enforce the will of the strong, let the strong do it themselves. The only argument for police, if there is an argument for them at all, is to defend the weak against the strong.

Texan99 said...

It continues to seem to me that you think employers can be required to employ people at more than they're worth economically. How can they be forced? Leaving aside our disagreement over it would be right to force them, I just don't see where the leverage would come from. At best, you would have to have the state take over the employers and make the decision to hire. Or, as would more likely be the case, the government would simply do all the hiring directly. We've seen that tried, too.

Grim said...

I'm not sure what particular point this is in reference to, Tex. Do you mean the idea that people could sign contracts for life? I don't envision asking employers to sign those under duress.

If you mean the idea that employers shouldn't be permitted to hire under the cost of survival, the point isn't that employers should be forced not to do it. The point is that our welfare systems allow them to do it -- with the result that they do it. This is the dilemma of forcing taxpayers to pay for costs the employer won't bear, or vice versa. We've been around on this a few times, and my point is that I don't think either answer is good.

Ideally we do away with welfare, and people take wages that starve them to death. Right? Well, no, because you believe that adequate charity will appear to sustain them. And maybe it will; but if it doesn't, they're rather out of luck, aren't they?

Can we test this in a way that poor people don't starve to death? I gather you don't like the system I'm suggesting (I gather this from the application of the word 'gulag,' as if this were a Mad Max sort of punishment) but it does at least guarantee that people don't die if they can find such relationships. Maybe some people would like those relationships -- an older person, perhaps of the year 2050, whose productive years are largely behind them but who want to be sure they don't starve, whose retirement savings were destroyed by years of no-interest Keynesian policies from Obama and his following administrations, and for whom Social Security and Medicare are dead and gone?

Grim said...

By the way, doesn't this constitute an example of me doing what you want me to do? Not limiting the kinds of contracts into which a worker may enter if that worker feels it is to their benefit? Forbidding the practice would be like what you warned me against: building a cage to protect the worker, or "treating him as incompetent to strike his own bargains."

Texan99 said...

Of course. I would be reluctant to forbid someone else's entering into a long-term employment contract even if I would find the terms abhorrent. My usual prescription for making such unfortunate contracts unlikely is to work on ensuring that no worker is quite desperate enough to choose that expedient. First, by encouraging a thriving economy with lots of jobs to choose from. Second, if necessary, by providing charity that addresses the starkest emergency cases of wolf-at-the-door. Third, by refraining from undermining families and other voluntary associations on which people rely to keep each other from these extremes of want without recourse to the public purse.

On the other hand, being a practical sort, I can live with laws that invalidate the very worst sort of contracts for slavery, or child prostitution, or organ-selling, because there's a broad public support for them and because nearly everyone in the country is prepared to do his bit (along with me) in keeping the wolf from the door of people this desperate -- always a small and fairly manageable set of potential charity recipients in a society that has been made so prosperous by the free market that food and shelter are abundant and cheap on a scale unparalleled in human history. Yes, these infringements on liberty are perilous, but if they're kept very small they may not do much harm on balance. They will allow prosperity to grow, which is the best means of keeping the wolf from the door.

If you don't envisage asking employers to sign contracts-for-life under duress, then what will motivate them to do it? You say they're motivated by the fact that welfare "lets" them. People don't do things because circumstances "let" them. They do them for a good reason unless there's an obstacle that won't "let" them. I'd say that welfare "lets" a worker opt for more pay in cash and less in benefits, because he wants benefits and he knows the state will pick up the tab for a lot of them if the employer doesn't. The employer doesn't have that motivation. He doesn't really care how much pay is in cash and how much in benefits, unless we influence his decision with tax breaks. He's just going to offer a total compensation package that's not more than will allow him to stay in business. He's not principally concerned with the standard of living the wages will support; he's only concerned with whether workers will find them attractive enough not to move on to another job.

We watched the Ken Burns piece on Henry Ford last night. As Ford's factory became more technical, he was suffering 90% attrition and terrible costs in lost training. He horrified the industry and shocked society by jacking wages up to the unheard-of level of $5 a day: not because he wanted workers to have more money, but because that's the price that would minimize turnover, which would let him make and sell more cars, which would provide enough revenue for him easily to be able to afford the higher wages. Would this have worked if he hadn't figured out a way to make more money building cars, and the government had simply announced that he must start paying $5 a day? After all, we know now that he was able.

I think you're starting from the presumption that employers have a duty to support the workers, which is how you can say they shouldn't be allowed to shirk the duty and foist it onto the state. Suppose we look at the example of a parent's duty to feed his child. If he shirks it, we worry first about the child and offer Aid to Families with Dependent Children. If an employer can't stay in business offering secure lifelong employment at a "living wage," maybe the government should step in a pay the employer Aid to Employers with Dependent Workers.

Grim said...

I think you're conflating my positions. The welfare question has nothing to do with the lifetime contracts position. That position exists in the alternative world in which I get to set the rules, rather than in the actual world in which we are constrained by political realities.

Welfare is relevant to the practical question we are discussing about minimum wages, etc. -- that is, of whether the full cost of employing someone (including their survival) is being borne by the employer, or by the taxpayer.

Now, you say I have a presumption that an employer has a duty to support their workers, but I'm not assuming any duty to do it. What I'm assuming is that, if we didn't have welfare (i.e., if we the taxpayers weren't picking up part of the tab) employers would have to pay more because otherwise their workers would starve. That's not to say that we should eliminate all forms of welfare, so employers have to pay more; but rather that we shouldn't let the employers game the system by pushing their employment costs off on taxpayers. A minimum wage at least does that: it keeps people off the taxpayer-funded roles.

Now, you want to say, "What if they can't survive in business paying that price? Should they get welfare too?" No, I don't think so: they should be allowed to fail as businesses. But what they shouldn't be allowed to do is survive as businesses at taxpayer expense, by paying workers at such a rate that we the taxpayers pay to feed, clothe, and house those workers. That's artificially lowering the cost of labor for the benefit of the employers -- which is corporate welfare, as much as any other kind of welfare.

Texan99 said...

In advocating for positions that aren't popular politically today, it still makes sense to take ordinary human behavior into account, like the need to understand what would motivate someone to do something against his own interest in his free and private life. I always like to figure out what the trade-off would be that would explain his motive.

The reason I probed the welfare question was that, when I asked why employers would enter into lifelong commitments to workers against their interests, you answered that they do the opposite now because welfare "lets" them. So that's the sense in which the welfare question has to do with lifetime contracts. I wouldn't normally link them either, so I was trying to find out why you did.

I'd say that employers are not the ones motivated by a consideration of how much they have to pay their workers to keep the wolf from the door. It's the workers that make that calculation. Employers decide the most they can pay without losing money, and the least they can pay without losing workers, and if there isn't any daylight between those two points, they don't hire at all. They don't start the business, or they don't grow, or they go out of business.

That's why I say a minimum wage doesn't keep people off the dole. It only keeps people off the payrolls unless they produce enough to justify a minimum wage. Everyone who produces less than that is unemployed and goes 100% onto the dole.

You characterize it as "business surviving at taxpayer expense" when taxpayers subsidize every worker who can't earn a minimum wage. But that results from the minimum wage, not from employer malfeasance. From 10-40% of the workforce (depending on age and ethnicity) can't earn a minimum wage and will instead simply be more or less permanently unemployed: i.e., 100% taxpayer-supported. So I call it "making it impossible for 10%-40% to earn any wages, so that the taxpayers have to subsidize them 100% instead of just chipping in to supplement whatever their low wages happen to be." What's more, without the minimum wage, workers at low wages who needed some help to fill the soup pot now and then would at least have some minimum job experience. Once you get a few generations in a row on the dole, you've created a problem that's incredibly difficult to solve even if the job market ticks up.

Grim said...

I think you raise some excellent points here. It is why I say that I think we are choosing among bad options.

The fact is that the business owner may not be blameworthy for bidding labor costs below the level of survival -- if welfare is propping up the poor, so that his competitors can offer such wages, he may have little choice. Nevertheless, the taxpayer ends up supporting the poor instead of them finding their wages in the productive economy, in a way that might not be true if welfare were unavailable. That would change the dynamic for the whole economy.

Texan99 said...

I agree that the business owner is not blameworthy for bidding labor costs below anyone's idea of the level of survival -- but the reason business is not blameworthy is not that welfare is propping up the poor. The business owner is not blameworthy, completely without regard for whether or not there is welfare. He can't pay more for labor than he can make a profit using, or at least if he does he'll go out of business.

The problem is not that his competitors can get away with lower wages because welfare is propping up the poor. The problem is that both he and his competitors would lose money if they paid higher wages. (Or, at least, if his competitors will be profitable enough to pay higher wages and he will not, then he'll go out of business and they will take over his market share.) That's the only sense in which he "has no choice." If workers didn't have welfare and would starve at the wages the business could pay, then they'd refuse the job (or die), and the business would fail for lack of workers. The would-be business owner would have to come up with a different business plan that made enough money to permit him to hire workers at a wage at which they would not starve -- or give up on trying to run a business.

Taxpayers can't decrease their tax burden by relying on employers to hire labor at a loss. It can't happen, unless the taxpayers subsidize the business, which does not seem to be any advantage over subsidizing the workers. In fact, if any business survives by paying workers a lower wage on the strength of their understanding that they can get many of their basic needs met by taxpayers, then taxpayers already are subsidizing the business, which otherwise would simply have failed.

Grim said...

The business owner is not blameworthy, completely without regard for whether or not there is welfare. He can't pay more for labor than he can make a profit using, or at least if he does he'll go out of business.

But the whole point of business, of any sort of labor, is to provide for life (and ideally wealth). If it fails to do that, it's not a viable venture. And if it provides for wealth for the owner, while starving everyone else involved in the venture, it isn't well structured.

If we've structured our economy (I think welfare is quite important here) so that businesses normally pay less than subsistence, then we're doing worse than what subsistence agriculture used to accomplish.

Grim said...

Now, you could reasonably say here, "Well, no, because subsistence agriculture only pays subsistence -- our poor have cell phones and cable TV." (Actually, I've been to the Southern Philippines, where the houses are still roofed with leaves as often as not -- and they all have cell phones, at least.)

That's a reasonable point, as far as it goes, and allowing for the distribution of at least some technology at levels affordable to the world's poorest. Indeed, it's capitalism that lets us mass produce things like cell phones and transmission technology at levels that the very poorest can afford it. Good for capitalism!

But ultimately, in the Southern Philippines or China, an employer aims to pay what it takes to keep his workers alive. Workers who work for themselves on their own land somehow manage to keep themselves alive without tapping the taxpayer. What I wonder is why our advanced economy can't do what these much poorer economies do as a matter of course.

Texan99 said...

The whole point of business is to provide wealth for the owner. The whole point of labor is to provide wealth for the laborer. Aren't you mixing up the two? You write almost as if you thought the point of business were to provide wealth for the worker. That's like saying the point of a sale is to provide wealth to the buyer. The buyer and seller have different incentives. If the business fails to provide wealth for the owner (or at least break even), it simply ceases to exist after a little while. Someone else tries another business and hopes to do better. But

Our businesses don't normally pay less than subsistence. Most workers get far more than subsistence, which is why the American average standard of living is far above subsistence and only a small percentage of Americans is in anything like desperate want (i.e., not enough food rather than not enough iPhones). Some businesses could stay in business by paying a few of their workers less than the generally accepted American view of what "subsistence" is, and then those workers would have a bit of income instead of none at all. The minimum wage prevents that, without providing any benefit at all to the worker whose labor isn't as valuable as the cost of subsistence.

If most of our businesses couldn't afford to pay subsistence wages, then yes, we'd be back in a subsistence agriculture economy. We've actually seen something very much like that happen when collectivists ruin an economy. People starve unless they grow a little something in the backyard, production nosedives, the stores are empty, and the price of increased equality is widespread poverty.

An employer doesn't aim to pay what it takes to keep his workers alive. He aims to pay what it takes to keep his business alive. If his business can't produce enough to pay workers enough to keep them alive, his business dies and the workers find another employer, or they go back to growing stuff in the backyard. But the business has to produce something valuable enough to break that cycle, because customers won't overpay just so the business owner can make sure his workers have enough money. The customers want what the business is selling. Normally, if the customers feel like helping the workers, they want to do that by giving charity to the workers, not by having the charity function bundled with the price of a loaf of bread.

Of course, some employers succeed in persuading customers to pay more because it makes them feel good to create good conditions for workers. In that case, the customer is buying a little bundle of a loaf of bread and a good deed. If the customer is willing, that can work. What can't work is a bureaucrat telling the employer he has to pay more even if he can't get customers to pay more.

Grim said...

I understand how the system works. I think, though, that we've forgotten the point of the system -- here as elsewhere.

Our legal system is similarly antagonistic. You're supposed to fight for your interests, and the other party fights for their interests, and you get as much as you can. The idea in both cases is that by each party fighting for his or her exclusive interests, you'll come to a final decision on the dispute that is better than one designed by a disinterested party.

And sometimes it works just that way, especially when the parties are more-or-less equal. Sometimes the antagonistic system gets us relatively easily to more-or-less fair distributions.

But it's important to remember that the legal system's purpose is not to let one side win all it can. The purpose of the system is justice. That's what it is really for, and it is a legitimate criticism of the antagonistic model if we see cases where (due to power imbalance, say) the interests of justice are reliably failing to be met.

And while the capitalist system similarly is designed with rules that allow people to push their own interests exclusively, the purpose of any economic system is to feed and clothe us. That's what it is really for. It is a legitimate criticism of any economic system if it fails to be able to do that.

And right now our economic system is failing. Food stamp use is way up. Jobs that used to be minimum-wage part-time jobs are now jobs that pay below minimum wage (being classified as 'seasonal') and with hours that are cut to below the Obamacare-trigger standards. People who work 25 hours a week at around 7 dollars an hour are making, on average, about seven hundred dollars a month. There may not be a second job available in this economy: many millions are making nothing at all.

So we've already done away with the minimum wage, formally. This is what the market will bear for unskilled labor in much of America right now: nothing for most, and about $8,500 a year for the ones who can get jobs at all.

The reason that people don't starve is that the taxpayers -- not the economy -- fund their survival. It's true that our welfare state is very generous, but it's welfare. It's not the productive, capitalistic economy that is feeding the people. That's a disaster, in my view.

The businesses may not be blameworthy, because they are just doing what they are supposed to do under the system. But the system is liable to criticism when it fails its basic purpose this spectacularly.

Texan99 said...

The purpose of the legal system is not to let one side win all it can, I agree. Similarly, the purpose of the economic system is not for any participant to imagine that everyone else is focused exclusively on his needs.

So I think it introduces confusion to say that the purpose of the economic system is to feed and clothe "us." "We" are a collection of individuals. The purpose of each person's efforts is to feed and clothe himself and anyone he feels personally responsible for supporting. The purpose of the economic system is to facilitate this process in a cooperative way rather than in isolation.

The purpose of the free market is not to let each participant advocate exclusively for his own interests and to heck with everyone else even if they die. The purpose of the free market is to allow each participant to advocate for his own interests, let the other guy advocate for his, and see if they can find a point where each gets something he wants. If they can't find that point, they part ways and try to cut a deal with someone else, or each goes back to trying to meet his needs in isolation.

Right now our economic system is, if not failing, then at least showing the strains of abuse. But what form does that abuse take? I would say that it takes the form of well-meaning price-fixing, with a good bit off cronyism thrown in. In other words, exactly what Adam Smith identified as the main temptation in a free market: the ceaseless desire of each participant to protect himself from competition. Giving into that temptation is not a defect in the free market system, it is a betrayal of the free market system. It feels good, temporarily, for the guy who gets to shield himself from competition, but it impoverishes the system overall.

You say that the taxpayers -- not the economy -- fund the survival of people who would otherwise starve. I think that's exactly backwards. Taxes are a way to spend the happy results of the "productive, capitalistic economy." We can spend taxes on defense, roads, welfare, whatever we like, but taxes are an expenditure, not a production. Welfare doesn't produce anything. It doesn't grow any food, it doesn't mine any copper, it doesn't bake any bread. Welfare, like all taxes, is not production; it is a way to spend the results of production. Typically it is a way to ensure that the wealth is spent by a central power rather than by the individuals who created it.

So of course our economic system is liable to criticism -- but we disagree about which aspects of the system are broken. From my perspective you want to strengthen just those parts that are most misguided, at the expense of the parts that satisfy needs as designed.

Grim said...

So I think it introduces confusion to say that the purpose of the economic system is to feed and clothe "us." "We" are a collection of individuals. The purpose of each person's efforts is to feed and clothe himself and anyone he feels personally responsible for supporting.

The purpose of capitalism is to allow each person to attempt that. The purpose of an economic system, of which capitalism is only one kind, is to answer the practical needs occasioned by our having bodies with a certain structure. This includes food, clothing, shelter, and (once that is settled) the answering of certain physical desires.

In other words, there's a natural law argument here. Economics exists to answer a natural need that we have. We judge an economic system by how well it answers that need, just as we judge a system for providing for future generations by how well it does that -- not just that they are born, but that they are educated to a point that they can assume responsible roles in the society.

The reason to prefer capitalism over other kinds of economic systems is that it performs this function better. But when we judge that -- whether it performs this function better -- we have to judge from the perspective of the whole society. If you judge from the perspective of those for whom it works well, you find that other systems also work very well for a subset of people.

The system we have here is not really capitalism, but a kind of welfare state. We try to answer the physical needs by employing some people, taxing them, taxing the businesses they work for, and taxing any purchases they make with whatever money is left (and if they still manage to save anything, we take half when they die). Then we pay out the money we've taxed to those who can't find work, or (in better times) either can't or won't work for other reasons.

Your contention about the purpose of work only holds in a capitalist system, not in ours. In ours actual system, the purpose of my work isn't to provide for myself and anyone I care to take under my protection. My work is part of a national system to provide for everyone. Insofar as I can also provide for myself, that takes weight off the parts of the system that care for those who can't.

The problematic case we're discussing is someone whose work can't provide for himself, so he's drawing on that network of welfare. That means he's getting resources from taxes. But the business is also coming out ahead here, because it can then afford to offer less in terms of wages. The only person who is losing -- and he's losing on both fronts -- is the taxpayer. The business and the worker are both net takers of resources; if you have a minimum wage set above the welfare threshhold, neither the business nor the worker are taking from the system in this way. However, there are more unemployed.

A nest of bad choices, as I said. But it does at least do what an economy is supposed to do -- it provides for the basic needs of everyone, at least for now. It's not clear if it can continue to do this as the demographics shift, and there are ever more (and ever more expensively older) Americans on the net-taking side of the ledger.

Texan99 said...

"Your contention about the purpose of work only holds in a capitalist system, not in ours."

My contention was about the motivations of the participants in an economic system, and the way in which the free market (not the capitalist system) responds to them. I take the motivations of people as I find them in the society in which I live, and in every other society I have studied: people exert the most effort to meet their own needs and the needs of those to whom they feel a personal obligation, which typically means those very nearby.

When people move beyond self-sufficiency or very small-scale sufficiency and try to cooperate on a larger scale with more distant people, they need different motivations. Roughly speaking, human beings have tried two sorts of motivation. One is to put a person or small group centrally in charge and have them tell everyone else what's best. The other is to let a lot of independent decentralized people work out bargains between themselves.

I maintain that the latter system creates more prosperity, raises the average standard of living, and lets the unlucky bottom 1% attain a standard of living that the middling-lucky guys would have been lucky to achieve 300 years ago under a far less free system. So I'm not usually very troubled about the fact that a subset of people don't grab the brass ring in a free market, because they still make out far better than they would have done in the old command economy.

Now, is it true that one fly in this ointment is that our democratic system (NOT our free market) allows one set of people to outvote the others and impose their financial burdens on them by fiat? Sure. Democracy will short-circuit the free market any time you let voters decide how to redistribute wealth. But I don't have a better political system to propose than democracy, so I live with that weakness in the political system. That doesn't mean I want to maximize the weakness. That's why I spend a lot of time trying to persuade people to vote at all times for systems that promote the free market. Even if it doesn't seem to them to be in their immediate best interests, or the immediate best interests of poor families, I hope to persuade them rationally that it is. Influencing votes is how you change things in a democratic society.

"The business and the worker are both net takers of resources" -- I don't understand this statement. I would have said that most businesses and workers are producers of net resources. (At least, that's true in a still-moderately-healthy free market; it stops being true in Stalinist Ukraine or North Korea.) Businesses that fail this test go out of business. Workers that fail this test become drains on the taxpayer. Historically they are not in the majority. If they achieve the majority, your country starts to look like France or Greece. (cont'd)

Texan99 said...

We probably disagree on what makes a business fail and even more critically on what causes a worker to fail in this way. I don't believe that more than a tiny percentage of workers ever become net drains unless we foolishly set up incentives for them to do so. Some small few, naturally, will end up that way because they had a stroke or something quite out of their control. The rest simply can't reconcile their ideas of a required standard of living with the actual resources, which usually is problem of rising expectations rather than increasing danger of starvation.

You view "the taxpayer" as the guy getting the short end of the stick. I see the injured class as the minority of voters who are the target of redistributionist fervor wielded by the majority of voters. In other words, it's a danger inherent in democracy that voters will use their majority to confiscate wealth. It's not too surprising; historically, most people with great political power are vulnerable to that temptation. My usual solution to the danger of abuse of majoritarian power is Constitutional limits. We're letting them slide more than we ought to do. If we let them go completely, we'll lose our free market and our prosperity. When that happens, the unlucky subset of our flawed economic system will be even unhappier.

We have reached an impasse on the point you keep trying to make, that the business comes out ahead because it can afford to pay lower wages to someone whose expenses are being subsidized by the taxpayer. I keep answering the same way: The business does not pay a worker more or less because the worker needs more or less. The employer pays no more than he can afford without operating at a loss, or he stops being an employer. The employer also pays no less than the amount that workers will accept, or he loses all his workers, goes out of business, and stops being an employer.

It is the worker, not the employer, whose calculation of the required wage is skewed by taxpayer subsidies. The worker accepts lower pay because he can count on being subsidized by the taxpayer for many of his needs. If he refused to accept the wage, the business could not hire him. The business would then try to figure out how to afford to bid higher, but it can't do so unless it can figure out a way to generate more value from their work. The higher pay doesn't come out of thin air. It can't be mandated, any more than you can pass a law forcing workers to have more valuable skills.

Yes, workers who don't produce enough value to support their own needs are problematic. If they are not to starve, someone has to give them charity. The charity has to come from somewhere. I don't think it's helpful to say that "the economy" has to produce it. The economy is not a source of wealth, it is a set of traditions and tools that people use to produce more wealth cooperatively than they could produce in isolation. But the wealth is created by the people, not by the "economy." The free market has created more wealth -- more calories, shoes, and roofs -- than any other economic system we've tried. Does it insure that no one is ever in need, that no one ever will be a burden on his neighbors? No, but neither does any other system, and the free market minimizes that problem better than any other system does. It minimizes the penury of the poorest worker at exactly the same time that it increases the surplus wealth of his potential benefactors: a win-win.

Grim said...

"The business and the worker are both net takers of resources" -- I don't understand this statement. I would have said that most businesses and workers are producers of net resources.

If the business is a mine and the worker is a miner, that's true. But these are not minimum-wage jobs (or below): they're skilled labor, and skilled labor coupled with capital produces wealth.

If the business is retail sales and the worker is a cashier -- a much more likely below-minimum-wage job -- then it isn't clear that the system is working quite the same way. Here the worker isn't producing any wealth, they're transferring wealth from the customer to the store owner and themselves (in exchange for goods). If the store is paying them what it costs to keep them alive out of that transfer, then the worker doesn't need tax dollars as welfare; and if not, they do.

However, if the business does pay less, then the business gets to keep more of the resources being transferred from the customer (in exchange for the goods). Thus, the business wins. The worker doesn't lose, though, because welfare makes up the difference.

Thus, the system seems to be stacked in favor of the business, and against the taxpayer. The worker here doesn't come out ahead or behind: either they make the money working, or they are given it via welfare.

Now our business is benefiting from this system, but it may have no choice as we've discussed. The existence of the welfare means that its competitors can undercut its prices by paying lower salaries. It will go out of business if it does not cut pay as well.

Thus, the system relies on the taxpayers.

No, but neither does any other system, and the free market minimizes that problem better than any other system does.

That's exactly what I meant when I said: "The reason to prefer capitalism over other kinds of economic systems is that it performs this function better. But when we judge that -- whether it performs this function better -- we have to judge from the perspective of the whole society."

You and I seem to agree on that point. The reason to prefer the system is that it does the job better than other systems we know of. However, we have to judge that based on how well it serves the whole society -- not just the ones it happens to serve well.

There may be other reasons to prefer it -- maybe you just don't like central planners, so even if they happened to be better you'd be against them. That's fine; I don't like them either. It's nice for us that they happen to suck at their jobs, because it means we don't have to confront the idea that we're making poor people suffer by preferring an absence of central planning.

Texan99 said...

It sounds as though you think that services don't create wealth. I'd only say that they don't directly create tangible resources. They do, however, contribute indirectly to increasing tangible resources. Our economy depends on specialization. We can all produce more if some of us concentrate on a task and hire out much of our upkeep to other specialists. If I'm a fabulous gold miner, I want someone else to grow my food, truck it to the store, and make it easily available for me to stack it on a counter so she can tell me how much to pay for it quickly, so I can go back to my gold-mining. The cashier's work contributes neither more nor less to increasing prosperity that my gold-mining does. Even my gold mining doesn't create the gold; it just renders it into a more usable form. The cashier's service is one of the last steps in rendering the farmer's produce into a form that's most usable for me.

You probably know by now that all of that stuff about the business keeping too much or winning or whatever doesn't make any sense to me. It's trades, not gladiator contests. Nor, after all our discussion, can I see any sense in which the system "relies on the taxpayers," except to the extent that the taxpayers are funding the police and legal systems that permit free market to flourish and keep pirates and looters at bay. Charity, perhaps, relies (more than it should) on the taxpayers, but every system will require charity, and all other systems we know of will require more of it than the free market does.

"We have to judge [the economic system] from the perspective of the whole society." I do. In fact, that's why I judge command economies and price-fixing harshly. They hurt the whole society, not least its most vulnerable members. Why else do I keep saying that the free market makes even our poor people better off than the middling-lucky in a command economy? What I don't understand is why you don't judge command economies and price-fixing equally harshly, if your main concern is the penury of the unluckiest workers. If all we've been saying is that it would be nice if we had an even better system, as soon as someone dreams one up, then we definitely have no point of disagreement. But the proposals you've been making aren't new ones, they're old and comparatively unsuccessful ones.

It's true that my natural bias is against central planners in many contexts. On the other hand, I don't object to them at all when they are making an essential function perform better, as in the case of national defense or epidemiology. If we didn't know from experience that central planners create less prosperity than the crazy, free-wheeling market, I wouldn't necessarily have dared to predict it. But now that we've tried both, we know which one produces prosperity. Lacking a reason to prefer central control on ideological grounds, and lacking evidence that it's materially advantageous, I just can't see its attraction.

Grim said...

Yeah, I think the core disagreement is that you believe we live in something like a free-market system. I'm of the opinion that we don't. We don't live in an entirely centrally-planned system, but we are at least as close (indeed probably much closer) to that as we are to a free market.

I understand all these theoretical constructs of the free market you keep bringing up. But the problem is that they do not in any way represent how things are really done. They are, at this point, purely theoretical -- sort of memories, or dreams, of how things are supposed to work. Things don't really work that way at all.

So when I say that the system relies on the taxpayers, what I mean is that it is the taxpayers who are providing the resources the central planners are using to make sure that the millions of Americans on food stamps don't starve. They're also paying for all the planners. They're also paying for all the things the planners want, for the police and the courts, and for helping keep the costs of the businesses down. They're also paying for the bailing out of "important" businesses, like the ones that are too big to fail or that employ key constituencies like labor unions.

There's a kind of rump of a market system left, and it is out of that system that wealth is extracted by the central planners. But it's an increasingly small section of the economy, and it is subject to such intense regulation and domination by the government that it cannot be said to be free. That will become all the truer as Obamacare comes online, but even now you can't run a barber shop out of your house without the state planners crawling up your pants and camping there for as long as you endure the enterprise.

So it isn't true, from my perspective, that the two systems were compared and free markets won. The free market not only didn't win the competition, it didn't survive it. We're all centrally planned now, and will be until this decaying system falls apart.

So the reason to prefer the old system is... that's what's going to be left to support millions of people who will otherwise starve.

Grim said...

Either that or, you know, we can vote to go the rest of the way to a complete seizure of all means of production -- either outright, or effectively. So the real choice, I think, is not between free markets and central planning: it's a dying central planning system that, having vanquished the free market, is going to translate into either feudalism or socialism. I know which one of those I favor.

Texan99 said...

So if I understand you correctly, the system should be judged harshly either because it doesn't provide adequately for the poorest people, or because it relies on the taxpayers to do so, or both, largely because we don't have a free-market system but instead have a central-command system -- and the solution is not to push in the direction of a free-market system but to continue in the direction of more central control?

Grim said...

Not quite. I don't think that's the solution. I it's the diagnosis. You asked the question, and answered in the same way yourself: how do you stop this, once people have decided to vote themselves wealth? You said we can't, probably, until the whole thing hits the bottom hard.

You and I don't agree, maybe, about just where the bottom is or how hard we're going to hit. We disagree about one more thing too, I think, which is who exactly is voting themselves wealth from the public treasury. From my perspective, it's everyone you are thinking of plus one more class: every time a business backs public policies that reduce its costs, thus increasing its profits, it's also voting itself wealth from the taxpayer. If you add in those groups, the split isn't 51/49, it's closer to 80/20.

Texan99 said...

If the diagnosis is that the command-economy parts of our mixed system are helping and the free-market parts of our system are helping, then the diagnosis suggests its own solution -- which needn't take the form of waiting for the whole thing to blow up. A fine intermediate step is to vote for eliminating command-economy measures and replace them with free-market measures, the minimum wage being one of my primary examples, but any other price-fixing law is an equally desirable target for elimination. The fact that the system has mixed elements is no reason for either despair or paralysis, if one group of elements is pernicious while the other is helpful.

I don't agree that every time a business backs public policies that reduce its costs, it's voting itself wealth from the taxpayer. Lots of public policies reduce costs just by eliminating irrational red tape and interference. For instance, a farmer might reduce his costs by being relieved of the obligation to build and maintain a special restroom for the exclusive use of an inspector who comes only a few times a year (a real example). A swimming pool might reduce its costs by being relieved of the obligation to build a handicap-accessible lifeguard tower. A medical practice might reduce costs by not being required to file a bazillion Medicare and Medicaid reports.

To have the effect you're talking about, the business has to be backing a policy that allows it to duck a bill that it actually owes -- its own current obligation -- and instead send it to the taxpayers for payment. You see businesses as having an obligation to support their workers, so you see them as ducking a bill that they actually owe. I don't see it that way, because I see the businesses' obligation as merely to provide goods or services at prices people will pay (although that's really more a condition of their continued survival rather than an obligation; they're always free to shut down, and often do).

But it's certainly true that, if the whole point of a business were to make sure that workers had enough income to attain a certain standard of living, then businesses would be just like deadbeat parents who fail to feed their own children, thereby increasing the burden on the local soupline or equivalent taxpayer-funded safety valve.

Grim said...

I accept that your examples re: farmers prove that I poorly phrased my conception of how businesses also profit at taxpayer expense. There are occasions like the ones you cite I am glad to endorse.

But as for this: "A fine intermediate step is to vote for eliminating command-economy measures and replace them with free-market measures..."

I do that, of course. But I think the ship has sailed. By all means continue to try; but at the same time, it's a good idea to recognize what you can and what you cannot change. There is no free market to save; the majority of the people do not want one anyway. They do not conceive of themselves as independent actors in anything like a free market system, but as Americans who belong to a collective that has responsibility for making sure that nothing too very bad happens to them (or anyone else).

They are aligned with smaller, smarter groups that have figured out that a collectivized system is easy to exploit. These include unions, politically connected banks and crony-capitalist firms, and their supporters within the government bureaucracy (who find these structures useful in solidifying and maintaining control over the economy).

Your vote -- all of our votes together -- won't begin to fix that. This is what a supermajority of Americans want, once you add in all the people who have a niche in this system. The organizations defending it are well-financed and control the actual levers of power -- not just a vote that might influence, at the margins, some outside issue related to the exercise of that power.

So recognize that, and let it go. (Keep voting if you like. I'll do it because it is a citizen's duty, and having a duty is reason enough to do anything.) Look for what you can change: state-level politics are much more subject to conservative influence, and in the event of the inevitable collapse, if we have a plan we can put in place quickly there's a chance we'll steal a march during the chaos.

Texan99 said...

"There is no free market to save; the majority of the people do not want one anyway."

Just as there's no chivalry to save; recognize that, and let it go? And courage, personal honor, and public service? Those are more rare qualities than we could wish as well. If most people don't want a free market, it's at least in part because so few people understand why it's valuable, which is why I argue about it all the time on websites like this one. To anyone who will listen, for instance, I'll argue that minimum wage laws achieve the opposite of the effect they intend. If I convince anyone of that, he may still think he's powerless to change them, but maybe he'll at least quit supporting them.

To the notion that we should admit defeat on any of these subjects, my response is what Matt Ridley says: "I'm not saying don't worry, be happy. I'm saying don't despair, be ambitious."

And in the meantime, hunker down and stockpile food and ammunition.

Grim said...

...there's no chivalry to save...

There is, though, because there is me; and my wife; and many of my comrades; and many others, here and there. But chivalry doesn't require a legal framework. In fact, it frequently defies it.

Now, the parallel here is that the free market sometimes defies a legal framework -- as for example the market for illegal drugs. One thing I've been rethinking lately is whether to reconsider my (generally staunch) positions against the sale (if not the use) of illegal drugs. Maybe one thing that we can do to defy the destructive ruling order is to go full Outlaw.

Grim said...

And before you answer, consider that black markets are sometimes about other things.

Texan99 said...

I didn't follow that. We shouldn't give up on traditional structures like chivalry even though they don't command the loyalty of a majority of us any more (if they ever did), but the free market is to be abandoned because a majority of the people don't want it? And the distinction is that chivalry doesn't require a legal framework, but both chivalry and the free market sometimes defy a legal framework? Is the idea that a minority position is futile if it requires a legal framework?

No legal framework has ever really stamped out a free market for long. The free market was born in the middle of entrenched command economies. Once the idea is out there, it will always keep flowering here and there, and people will keep noticing that it increases prosperity wherever it is tried. That inspires resentment and envy, certainly, but also emulation and competition, especially when people are allowed to leave their own areas and move to areas where there is economic freedom. A free market doesn't require dominance to work better than a command economy, although where it does become dominant it works even better. It's always worth persuading people one at a time to see its value, even if they're in the minority.

One of the reasons socialism tends toward despotism is that it's so hard to maintain command-economy and free-market trends side by side without the command-economy side getting competed out of existence. Unable to compete effectively, socialism turns to force, or it starts to loosen up and allow more free-market activity (see Sweden; China).

Not sure why you sent me to a story about Argentina, a country that has willfully destroyed its economy in the last few years by nationalizing private industry, engaging in trade wars, jacking up taxes, degrading the currency, spurring runaway inflation in the 25%-30% range (hey, who would have predicted that?), and now, per your link, freezing food prices for two months. That's going to lead to widespread hoarding, shortages, and a crash of the food supply. Argentina is a poster child for how to destroy an economy by violating almost every free market precept there is. If they don't cut it out, the only thing that will prevent widespread starvation is a black market, if they're smart enough not to crack down too hard on it.

Grim said...

Yes, I see you didn't follow it. I think you're not as far away as you may fear, though.

Try again: I think you may be close to seeing it. Why did I send you to the article on Argentina? What's the similarity between what Argentina has done wrong (this whole last century, more or less), and the current policies we face in America? What does it mean that a black market may be their only hope to avoid mass starvation, given our stated principle that we judge a system by how well it supports the weak?

Texan99 said...

It means that we can hurt our economy by undermining the free market just as Argentina has done. It means that a black market, which is another name for a free market that the command-control bureaucrats try unsuccessfully to strangle, always springs up when the government imposes price controls (such as the minimum wage, just another form of price control). It means that even when free-market supporters are in the minority, they are critical to a nation's economic health, and they should never give up. Never, never, never, never.

Grim said...

Is that what you think I meant, or are you exhibiting a lawyer's tendency to argue her own interest? :)

Never mind. Whether for that reason or some other, you're very bad at giving a construction of my meaning that closely represents what I actually mean. I still like you, and it's still fun to talk to you.

What I meant was that any hope for positive reform comes at the end of the current legal regime. And thus we may be in much the same position of the good people of Argentina: pursuing extra-legal solutions, even before the end, as a matter of conscience. This is leading me to rethink those who are doing so now (e.g., those selling illegal drugs like marijuana, whom I've tended to think very badly of in the past).

In fact, it might be worth exploring setting up such networks now, as a means of preparing to steal that march. Here I'm thinking not of illegal drugs, but of defiance measures such as the raw milk movement. If you're not aware of it (though you probably are), it's about folks who own cows or goats selling raw milk to people who want it in direct defiance of Federal law.

More and more, I think that tearing down the government -- and setting up systems to defy it -- may be the right way to proceed. Black markets may have a moral nature, here as in Argentina.

Texan99 said...

You were being coy about what you meant even after I told you I didn't have a clue what you were getting at -- especially because your link seemed (and still seems) to support my argument at the expense of your own. :-) So I told you what I thought the article really meant. And I still like you, too, very much indeed, even though you can't understand a word I say, which is why I keep trying despite my exasperation. You are aware, I suppose, that you're very bad at giving a construction of my meaning that closely represents what I actually mean?

I know that you meant, in part, that there's nothing we can do except wait for a total crash. I've already said what I think about that idea, and you probably know that I see no reason to suppose that people in Argentina are helpless to avert the disaster they're bringing on themselves by continuing to support socialist nonsense.

But we are in complete agreement that extra-legal solutions may be part of the required response to the same kind of nonsense in this country, and if you're coming around to thinking that we should get to work on them now instead of waiting for the crash, then we're in even more agreement.

As for drugs, I've never cared about making them illegal, nor do I have the slightest moral interest in anything the government has to say about what drugs I may not buy without a prescription, or what drugs I may not buy under any circumstances. Drugs and alcohol are the same issue for me. It's peculiar and inexplicable that the law distinguishes between them. I distinguish only between using and abusing them. I'm not interesting in using them, for the most part, so they're not an important part of my life.

I do care about free markets, and will subvert stupid government policy on that score any way I get a chance. I'm an enthusiastic black marketer. Raw milk is an interesting example, and one of my most frequent black market indulgences -- "for pet consumption only," of course. When I encounter a bad law, I don't worry that I'll be a bad person if I break it. I ask, "How do you plan to stop me?" I believe it's healthy for commerce of that kind to stay so common, so widespread, that enforcement of new restrictions appears futile to would-be busybody lawmakers.

Grim said...

I'm quite sure I would be terrible at explaining what you mean, although I think I could make a good stab at it by saying, "See Adam Smith." :) (I have, actually: I had the opportunity once to read an original of The Wealth of Nations.)

One reason we may be having trouble understanding each other is that you are arguing against what you take to be my position. I've said several times that I don't actually have a position, not in a fully thought-out way. I'm still thinking about these issues, not declaring (as Smith might) that this solution is certainly right.

I don't think the free market is the answer to the coming collapse because I think a lot of the people we're talking about are so lacking in skills and abilities that they have nothing useful to trade. I do think they'll need to be taken care of by someone, and the only thing they have to trade that would make that worthwhile is long term service -- if you're going to go to the expense and trouble of teaching them how to farm (say), and supporting them while they do, you have to expect a return on that investment.

I don't think that private charity can suffice, either, because there are so many of these people. So those are practical objections.

But there is also a political objection, which is that we can't really move the ship off this course.

Now, I suppose you could read my vision of a bondage relationship as a kind of free market: an old kind, in the way that apprenticeships used to work (as we said long ago). But I don't see how you can simply replace what we have with a free market without some bondage system like that, because people will simply starve.

The alternative is something like Argentina, which has wavered between socialism and market reforms for generations. When things get bad enough, they do things that are anti-market like freezing prices. Naturally this leads to shortages. That leads to government buying up foodstuffs and distributing them, which leads to more shortages.

These things don't really work, but as you can see, they are the more obvious choice for a polity like ours or Argentina's. It's the natural outflow of that instinct to think (a) collectively, and (b) of the purpose of government as something like 'stopping bad things from happening to anyone.' If we are to avoid it, I think it must be by derailing the government: otherwise, they will drag us down that path.

Grim said...

And so what began as an inquiry into the minimum wage has become, at last, an endorsement of the idea of setting up illegal structures to undermine state authority; with the eventual aim not of overthrowing the state, but of replacing it with free and independent structures at the moment when the state's own internal contradictions bring it to the point of collapse.

There won't be any minimum wage, I don't think, after; but there will be bondage again. It is important to take some thought about this, to ensure that it doesn't extend for longer than one's lifetime (i.e., is not inheritable), can be escaped under certain circumstances, and is otherwise humane and continues to entail certain rights. And that is what I think -- but it is not my position. It's just what I diagnose as the best case scenario for liberty; the best way to ensure that the coming collapse leads to more freedom and not less, and avoids the mass starvation that could be expected to attend the collapse given the large number of unskilled people with no means of support besides the collapsing system itself.

Grim said...

Now, it is highly likely that the collapse of the government will include some attempt at further concentration of power. I think during the moment of the collapse they will be unable to make good on it, but after a time they may be in a position to try.

So we must be prepared, in the first place, to replace the state with these independent structures. But we must also be prepared to resist and refuse the return of the corrupt state, should it attempt to restore its dominion under a new, stronger socialism. And thus, though our aim is not to overthrow the state, we must be prepared to recognize when the state has lost its legitimacy to govern, and to refuse to allow it to return. And that may very well mean armed resistance, depending on how much strength the corrupt holdover state should still be able to bring to bear.

So in addition to setting up black markets, we need to be preparing to support a resistance movement that can declare, and make good, its freedom from the dying state.

Again, this is not a position, but a set of thoughts. But it suggests a set of concrete actions which are actually illegal, and puts us on the road of being revolutionaries rather than citizens.

Grim said...

By the way, don't feel bad about having trouble understanding what I mean on first reading. I'm reading Hegel's philosophy of mind right now, and he says things like this:

"But though the good is the universal of will -- a universal determined in itself -- and thus including in it particularity -- still so far as this particularity is in the first instance still abstract, there is no principle at hand to determine it. Such determination therefore starts up also outside that universal; and as heteronomy or determinance of a will which is free and has rights of its own, there awakes here the deepest contradiction." (Part III of the _Encyclopaedia of the Philosophical Sciences_, section 508, trans. William Wallace)

Now what he's talking about is the process that a self-conscious, rational mind must go through in order to arrive at a concept like good or evil. And he's finding the ground for that in a place you'd probably like him to find it -- exclusively, that is, in the self-determination of the willing subject.

But if you can get his meaning without reading it five or six times, you're a better student of philosophy than I am!

Texan99 said...

I don't know how to distinguish between a "position" and "an argument you are making for the disadvantages inherent in a particular arrangement." When you tell me why such-and-such won't work (e.g., you can't make a free market work because some people will need charity for lack of valuable services to sell), I respond with arguments about how it not only will work, but will work better than any of the things we've ever tried as alternatives. When you say that the free market should be faulted for shoving obligations onto the taxpayer, I respond with arguments about how it does no such thing. These all seem like positions to me; to the extent that yours aren't positions, then neither are mine.

It shouldn't be surprising that most of my arguments coincide with the thinking of Adam Smith; what else would you expect from someone of my professed views? I was surprised to find how many of yours might have come straight out of the works of Karl Marx. I'm not saying that as an exaggeration, a provocative joke, or a rhetorical device. In any case, neither of us is propounding brand-new ideas; we're both on very well-traveled ground.

I never feel bad about not being able to understand you on first reading. If I don't understand, I probe until you find a way to make yourself clear; spontaneous conversations are that way. If I think I do understand, I often try to test your approach by applying it to another situation (e.g., if a position is suspect because a majority of Americans don't support it, what about the many positions you hold that meet that same description? If not, what's special about this particular minority position?).

I brought the issue up only because I wondered if you realized that the difficulty was mutual. I take it for granted that we will both sometimes have difficulty getting a point across. The main difference is, of course, that I'm right. :-)

Grim said...

Well, I've read Marx too. In fact, Marx was a big fan of Adam Smith (as well as Hegel), and drew heavily on his arguments: in many ways, they aren't opposing arguments (as we often see them presented), but the one is an evolution of the other. Whether it is adaptive is another question.

Also I've read Joseph Schumpeter, my favorite of the three economists, who explained why Marx was wrong about many things. But Schumpeter also didn't think the free market (or capitalism) could survive, for reasons of his own. That is a constant even in his pro-market, pro-capitalist views, to which I am closest philosophically.

So what I'm thinking is that we've gotten to the point that we're looking at the death of the system. Marx wanted an evolution into a socialist system, and I am citing that as a possibility -- but as a threat to guard against. Still, I think it is the most likely possibility because it is the one that is both conceptually mapped out, and comports with the preference of the majority to think about America in collective ways.

I suppose, insofar as you're right to say that this position of mine is Marxist, I'm arguing that we should take the opportunity to return to feudalism instead of progressing to socialism. :) But if you like the free market, that's the right way to go -- it grew out of the feudal approach once before, and will probably do so again. (In fact I think it will do so: I suspect this feudalistic system would last only one or at most two generations, given the undesirability of being unfree and the option to rise out of it.) On the other hand, socialist models (like the Argentine one) don't tend to reintroduce a genuine free market, except as black markets. They tend to cyclically seize from the rich, and clamp down on whatever market activity has arisen.

Now a purer, non-feudal approach is also possible: instead of returning to feudalism, return to early-stage capitalism. My fear is that leaves people starving. I agree with the assessment that markets handle starvation better in the long term, but people don't starve in the long term. The people I'm hoping to save will starve before they can adapt to a market reality.

Texan99 said...

PS. Well, shoot. We're having one of those moments again. I take you to be saying that we will be forced to turn to bondage as the best means of leading to more freedom? Or perhaps that we should accept that bondage is inevitable, and concentrate on limited its scope so as to hasten the day when liberty can return? Honestly, I have a hard time seeing why a concerted effort to introduce more freedom into the market is going to lead to bondage. Is the idea that the freedom is so pernicious that it will lead to societal collapse, which then will lead to bondage? Or is this going back to the idea that some workers are so unlucky that they have nothing to sell but their freedom? You can see I'm guessing again at your meaning.

You truly are as gloomy about the future of the free market as Marx was. He was sure that the free market would shortly destroy itself by inspiring a revolt among desperately mistreated workers even at the same moment that it was poised to raise wages by 50% in a few decades, and to lower the average worker's hours per week from 65 to 56. He believed workers were stuck at the bottom of the heap forever, and that they could never accumulate capital. He believed that free-market employers unfairly refused to pay workers a penny more than was necessary to let them keep body and soul together long enough to reproduce, so that they could never improve their lives. He believed that employers were stealing the value of the workers' labor whenever they sold the produced goods at a profit above this unfair wage, and that neither management skill nor capital could ever add any value to the goods. He believed that capitalism had created a huge amount of wealth, but that it was destined to die so that its accumulated wealth could fund a Utopian state in which all work would be both ennobling and uncoerced.

In short, he was gloomy about all the things that were about to get much better, and sanguine about the things that were about to threaten to wrap the whole thing around the axle.

Texan99 said...

Free markets address starvation better than command economies (whether feudal or socialist) even in the short term, not just the long term.

Grim said...

Is the idea that the freedom is so pernicious that it will lead to societal collapse, which then will lead to bondage?

That's close to Schumpeter's idea: it isn't freedom itself, but the prosperity engendered by a robust market, that leads to the collapse. Specifically he thought that capitalism would cause people to send their children to college instead of the farm or the shop or the factory. This would, he thought, lead to the rise of a wealthy intellectual class who were insulated from the actual productive work of making capitalism function. Being wealthy and educated, they would be able to enact their preferences into law; but being insulated from a practical understanding of capitalism, they would destroy it because they despised it.

Now, as it turns out, he was quite right about what turns out to be a very important part of Obama's coalition: progressive young people whose parents earned enough to send them to college, but who have never been seriously engaged in anything captialistic themselves, and who despise it as selfish and mean. They work to impose their values, which are impractical but feel better, on a capitalist system that can't survive the costs they are imposing. That class is a significant part of the problem, as he rightly foresaw.

Is that a necessary outcome? I don't know. Maybe it'll work better next time. Maybe we can learn from the lessons of this collapse.

You should read Schumpeter, actually, because he explains just why Marx was wrong about the things you cite (and, more broadly, about the general trend Marx predicted of capitalism grinding toward monopoly -- Schumpeter's reading on this point is a very insightful critique of many of our federal agencies, especially the CIA).

Now, on the other hand, Marx wasn't gloomy: he was pleased that the collapse was coming, because it would usher in a happier socialist model. I'm gloomy, in one sense, because I don't want the socialist model (nor do I think it will be happier; and notice that the class I expect to revolt is the opposite class from Marx. You can distinguish my philosophy from Ayn Rand's, who also expected a collapse of capitalism as I do, and a revolt of the class I expect to revolt, by the fact that I really think it's important that the poor not be allowed to starve. The temporary bondage I expect is about finding terms on which they can be both saved, and taught the skills they will need in the new era).

However, I'm not gloomy about capitalism (and certainly not about freedom): I'm gloomy about our current situation, which I think has made a collapse inevitable. But I think we can restore the good out of the collapse, and learn lessons against the future.

So maybe next time it will work!

If it is to work, though, we must avoid anything resembling welfare programs. The government must not be redistributive. How we get around Schumpeter's problem, while honoring liberty, is another question. But it's an important question.

Texan99 said...

Ha. It's already clear enough to me why Marx was wrong about the things I cited! It's interesting, too, that he was a spoiled little college kid himself, whose father was always pressuring him to learn how to make a living. He much preferred to live off of Engels, writing treatises about the evil of money and Utopias in which people like him could do what they liked without producing anything that anyone else wanted or needed. No wonder he liked the idea of taking the wealth that previous capitalists had accumulated and living on it in comfort.

Anyway, we agree totally on welfare and redistributionist government programs.

douglas said...

"In the case of private employers, they want someone to do a job, but they don't always want to pay enough for that person to actually survive. Now, logically, if you don't survive you can't show up for work. So the cost of employing someone, if you are to pay the full cost of it, includes pay at such a rate that you can actually survive where you live -- at minimum, food and shelter, and any other absolutely unavoidable costs that living there imposes upon you (some sorts of non-means-tested taxes, say).

Insofar as that cost is being pushed off onto the government, the employer is pushing part of his costs off on all of us. That strikes me as improper in a certain way."

"we shouldn't let the employers game the system by pushing their employment costs off on taxpayers."

In both these your framing the situation as you see it- a cycle of:
-Employer pays less than living wage
-Employee requires gov't assistance
-taxpayers pick up the remaining 'wage' to achieve livability
and the assumption is that therefore the employer gets off on a discount. I'd argue that's incorrect- Firstly, the employer is a taxpayer, and likely a substantial one at that (for our purposes, I'm excluding crony-capitalism- maybe now crony-socialism large corporations), therefore he's really just repossessing some of his taxes, which limits the revenue of the government, but does NOT remove that capital from the work-for-living-pay-balance. It's a bit of your outlaw mini-revolt, isn't it?

As for:" but the competitive wages for unskilled workers (which I maintain, unless Douglas should convince me otherwise, are the competitive wages with Pakistan or India or Africa) are starvation wages here."

It's really unskilled wages in Pak/India/Africa+logistics+palm grease+some other misc. vs. living wage in the U.S. We're already seeing some manufacturing come back from China, and this may also start to become quite reasonable in comparison to even the areas you mention (though I think India is more like China already).

douglas said...

"In the case of private employers, they want someone to do a job, but they don't always want to pay enough for that person to actually survive. Now, logically, if you don't survive you can't show up for work. So the cost of employing someone, if you are to pay the full cost of it, includes pay at such a rate that you can actually survive where you live -- at minimum, food and shelter, and any other absolutely unavoidable costs that living there imposes upon you (some sorts of non-means-tested taxes, say).

Insofar as that cost is being pushed off onto the government, the employer is pushing part of his costs off on all of us. That strikes me as improper in a certain way."

"we shouldn't let the employers game the system by pushing their employment costs off on taxpayers."

Both of these point at what your seeing as the the employer getting a free ride, in a progression something like this:
-Employer pays less than living wage
-Employee requires assistance to make level of 'livibility'.
-Taxpayer makes up difference (benefit to employer)

The hitch in this is that the employer is a taxpayer- and likely a substantial one (barring for the purposes of the normal model the crony-capitalist, or perhaps more correctly crony-socialist corporation), and therefore is much less taking advantage of some 'other', but is more repossessing a portion of paid taxes (perhaps deemed unfairly taken) in a move one might categorize as 'outlaw'.

Also; "...but the competitive wages for unskilled workers (which I maintain, unless Douglas should convince me otherwise, are the competitive wages with Pakistan or India or Africa) are starvation wages here."

It's already starting to happen in regards to China, and it may well begin happening in regards to the S.E. and Central Asian and African areas. That would only be accelerated by rising energy costs and their impact on logistics, and I'm thinking we're not far from a spike, one way or another. Given that, I think my critique bears weight. I still think you're on to something as regards looking at Schumpeter.

Grim said...

You raise a good point re: bribes in the third world. That is a major cost for anyone who wants to do business there, even major US corporations: I know AT&T wholly abandoned some sunk costs about ten years ago down in South America because they decided they were just unwilling to continue to pay the bribes.

So that gives our American worker some cushion, as long as he stays out of places like Chicago.

As re: employers as taxpayers, I think it's fine to revolt if you can get the money from the government; but I'm not as keen on the business putting his costs on other taxpaying citizens. The problem there is very similar to GM taking a taxpayer bailout: if I wanted that company to have my money, I'd have given it to them in return for their goods! As Cassandra put it in a pithy comment at the time of the GM bailout, 'You won't buy our @#$@ cars, so you'll be paying us for them anyway.'

So too insofar as the company -- rather than earning the money from us via commerce -- convinces the government to help float its labor costs. Then they don't have to worry about selling me X amount of goods or services: they can just extract the money from me, and all the rest of us, without the bother.

So it still strikes me as a gambit that I don't find entirely fair.