This article form yesterday's NYT is an articulate, concise layout of the liberal social argument. Here it is- NYT article
The argument, authored by Konczal and recapped in the article, is there are two strands to liberalism. One is "government maintaining full employment, empowering worker and giving them more bargaining power' and the other a safety net for "those who fall through the cracks". Konczal argues both strands are necessary or liberalism becomes 'pity-charity liberal capitalism'. The corrective suggestion is broad-
-replace means tested support programs with universal ones
-a universal basic income
-sharp tax increases including capital gains
-much higher minimum wage
-integrated social welfare system (whatever that means)
-trade agreements to protect workers and the environment
-labor law reform
-confronting the long term unemployment problem 'head on' (there is no specific)
The author goes on to bemoan the loss of democratic clout to effect these changes, citing corporate power and competitive pressure limiting wage growth.
It's always nice to have at least one group spell out their agenda, and this one is spelled socialism. There is nothing in this program that is not lifted straight out of the playbook of socialists from the late 19th century. It all sounds terrific.
'The Rich' will be heavily taxed to provide not simply a safety net but a guaranteed income to the unemployed, Except there will be virtually no unemployed because the government will provide full employment. Presumably this will be by building infrastructure projects whose neglect is cited in the article. The full employment and higher minimum wage will lead to 'middle class' enlargement and greater prosperity. Trade agreements and labor law reform would give greater power to workers to exact higher wages from private employers, and these measures would presumably tackle long term unemployment 'head on' by eliminating it.
It sounds terrific, except that these ideas have been tried, and they don't work. Socialists point to gains made by labor in the late 19th and early 20th centuries as the model for what society can be. Those gains, however, came during a period of intense economic growth fueled not by government but by capitalists. Private companies, not the government, provided the wages that created a middle class, and they did so not by themselves not getting rich but by there being an intense demand for product and output. This is successful capitalism, and it is very successful in lifting everyone's living conditions.
We are in a very different situation. The US is not producing its own goods, and there is not an intense demand for goods from the US. Our trade balance is negative, our current accounts is negative, we have a federal deficit. Our growth in per capita GDP is insufficient to fund the programs described by Konzcal. The only part of the 'solution' that is rational is to equalize the labor playing field by excluding products made overseas in violation of US albor laws, minimum wage laws and environmental laws. Doing so would remove the incentive companies have to move production overseas.
Such a change, however, can not be made in our current regulatory environment. George McGovern, the most liberal man to run for President until Obama, bought a business after he left the Senate. And there he experienced the full burden of the laws he had supported and passed. And he said, paraphrasing, that is he had known then what he now knew he would have governed very differently. We can not rationally prohibit imports if our regulatory environment is hostile to employers.
The longstanding dream of Socialism is to use government to force society to act in certain ways. We have good examples of the failure of these ideas- France, Britain, Italy. Germany has succeeded only by a brisk export economy and a societally high savings rate. In France there are good programs for the unemployed and poor. And the unemployment rate is high and growth low. It is almost impossible to fire a worker once hired, and so no one is hiring young workers. The benefits of unemployment are so good that there is no incentive to work anyway. Britain has similar although lesser problems, and of course Italy is bouncing off the edge of governmental chaos and has ongoing problems with productivity.
The math on this problem has been done long since. You can take the entire profit of the Fortune 500 companies and not cover the deficit for a year. You can tax away the savings and wealth of the rich and not provide for the poor for more than a couple of years. The program described by Konzcal sounds great, except it doesn't work. Increased wages and living standards are achieved by making things, not by pushing around money through government. And the US just does not make enough things to fund the ideas of Konczal.
Our whole governmental logjam is a product of two completely antithetical concepts. In one government via taxation provides employment. In the other government creates a rules environment and gets out of the way. It is not possible to have both. We are like the men moving a piano, where one is trying to move it up the stairs and the other down the stairs. They go nowhere while working very, very hard.
Ultimately jobs are not provided by government. Government makes nothing. Jobs are created by private companies who have a product to sell and a service that is in demand. Level the playing field. Enact protections from salve labor wages overseas. Decrease workplace rules. Loosen environmental law that stifles refining and industry. That is the role of government- creating a rules environment within which individuals have the opportunity to prosper, in business and personally. Government can not create that prosperity for anyone. Claiming it can is to ignore basic math and history.
Ted
The argument, authored by Konczal and recapped in the article, is there are two strands to liberalism. One is "government maintaining full employment, empowering worker and giving them more bargaining power' and the other a safety net for "those who fall through the cracks". Konczal argues both strands are necessary or liberalism becomes 'pity-charity liberal capitalism'. The corrective suggestion is broad-
-replace means tested support programs with universal ones
-a universal basic income
-sharp tax increases including capital gains
-much higher minimum wage
-integrated social welfare system (whatever that means)
-trade agreements to protect workers and the environment
-labor law reform
-confronting the long term unemployment problem 'head on' (there is no specific)
The author goes on to bemoan the loss of democratic clout to effect these changes, citing corporate power and competitive pressure limiting wage growth.
It's always nice to have at least one group spell out their agenda, and this one is spelled socialism. There is nothing in this program that is not lifted straight out of the playbook of socialists from the late 19th century. It all sounds terrific.
'The Rich' will be heavily taxed to provide not simply a safety net but a guaranteed income to the unemployed, Except there will be virtually no unemployed because the government will provide full employment. Presumably this will be by building infrastructure projects whose neglect is cited in the article. The full employment and higher minimum wage will lead to 'middle class' enlargement and greater prosperity. Trade agreements and labor law reform would give greater power to workers to exact higher wages from private employers, and these measures would presumably tackle long term unemployment 'head on' by eliminating it.
It sounds terrific, except that these ideas have been tried, and they don't work. Socialists point to gains made by labor in the late 19th and early 20th centuries as the model for what society can be. Those gains, however, came during a period of intense economic growth fueled not by government but by capitalists. Private companies, not the government, provided the wages that created a middle class, and they did so not by themselves not getting rich but by there being an intense demand for product and output. This is successful capitalism, and it is very successful in lifting everyone's living conditions.
We are in a very different situation. The US is not producing its own goods, and there is not an intense demand for goods from the US. Our trade balance is negative, our current accounts is negative, we have a federal deficit. Our growth in per capita GDP is insufficient to fund the programs described by Konzcal. The only part of the 'solution' that is rational is to equalize the labor playing field by excluding products made overseas in violation of US albor laws, minimum wage laws and environmental laws. Doing so would remove the incentive companies have to move production overseas.
Such a change, however, can not be made in our current regulatory environment. George McGovern, the most liberal man to run for President until Obama, bought a business after he left the Senate. And there he experienced the full burden of the laws he had supported and passed. And he said, paraphrasing, that is he had known then what he now knew he would have governed very differently. We can not rationally prohibit imports if our regulatory environment is hostile to employers.
The longstanding dream of Socialism is to use government to force society to act in certain ways. We have good examples of the failure of these ideas- France, Britain, Italy. Germany has succeeded only by a brisk export economy and a societally high savings rate. In France there are good programs for the unemployed and poor. And the unemployment rate is high and growth low. It is almost impossible to fire a worker once hired, and so no one is hiring young workers. The benefits of unemployment are so good that there is no incentive to work anyway. Britain has similar although lesser problems, and of course Italy is bouncing off the edge of governmental chaos and has ongoing problems with productivity.
The math on this problem has been done long since. You can take the entire profit of the Fortune 500 companies and not cover the deficit for a year. You can tax away the savings and wealth of the rich and not provide for the poor for more than a couple of years. The program described by Konzcal sounds great, except it doesn't work. Increased wages and living standards are achieved by making things, not by pushing around money through government. And the US just does not make enough things to fund the ideas of Konczal.
Our whole governmental logjam is a product of two completely antithetical concepts. In one government via taxation provides employment. In the other government creates a rules environment and gets out of the way. It is not possible to have both. We are like the men moving a piano, where one is trying to move it up the stairs and the other down the stairs. They go nowhere while working very, very hard.
Ultimately jobs are not provided by government. Government makes nothing. Jobs are created by private companies who have a product to sell and a service that is in demand. Level the playing field. Enact protections from salve labor wages overseas. Decrease workplace rules. Loosen environmental law that stifles refining and industry. That is the role of government- creating a rules environment within which individuals have the opportunity to prosper, in business and personally. Government can not create that prosperity for anyone. Claiming it can is to ignore basic math and history.
Ted
I actually find it heartening that there are still some tear-down-the-real-world Bolsheviks out there! They are all missing the point and need to read Mikhail Bakunin to see the truth! (See also Python, Monty: anarcho-syndicalist socialist collective).
ReplyDeleteSeriously though, the persistence of these folks who have apparent connection to neither the realities of human nature nor experience of the real world always amazes me. They, of course, are the first to go when the REAL revolutionaries take power. It is all about power and the historical constant of individuals willing to espouse whatever cause or philosophy necessary to bring themselves into absolute authority. The ‘true believers’ are few and far between and serve only to bring the others to power. Strasser and Röhm went by the wayside pretty quickly once Adolf had the power in his hands; ditto Kirov and Trotsky.
Lady Thatcher’s oft-repeated aphorism about other people’s money holds true. Socialists have no concept of how wealth is created, so they set up an oxymoronic system where one taxes the “rich” and then gives the money to everyone else for ‘free’ to equalize all outcomes. The obvious outcome is no wealth to tax leaving everyone equally miserable because the gravy train has derailed. In the real world of course this does not happen because the system falls apart from the inherent contradiction long before the socialist nirvana is achieved. When the wheels finally do come off the wagon, the forces of Capital and counter-revolution are blamed and the Cheka/Okrana/Gestapo/Committee of Public Safety begin rounding up ‘wrong thinkers and wreckers’ and the revolutionary tribunals purify the body politic. Question: Can this ever happen here?
from a friend via email.....
I especially liked the last paragraph, "Ultimately jobs are not provided by government. Government makes nothing. Jobs are created by private companies who have a product to sell and a service that is in demand. Level the playing field. Enact protections from salve labor wages overseas. Decrease workplace rules. Loosen environmental law that stifles refining and industry. That is the role of government- creating a rules environment within which individuals have the opportunity to prosper, in business and personally. Government can not create that prosperity for anyone. Claiming it can is to ignore basic math and history."
ReplyDeleteThis is certainly different from the public perception that government creates jobs. Remember Bill Clinton's famous quip in 1995? "The economy has produced 6.1 million jobs since I became president, and if Michael Jordan comes back to the Bulls, it will be 6,100,001 jobs."
I wonder what he would have said if someone had challenged him by saying that those 6.1 million jobs were no more produced by the government than Michael Jordan's was?
-D-