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Liberals have all sorts of arguments why e.g. we need universal health care, or universal social security, but at root I think those arguments tend to be about democratic pragmatism -- a universal program gives a stronger constituency. Liberals are incentivized to support a strong state, even though the strong state is not the end in itself they really want.
It's a real problem: public-choice wise, poor people 1) don't have money to give politicians and 2) don't vote as often (at least urban poor don't) So how do you ensure aid to the poor survives? It's not clear you can trust the good graces of rich/middle class people.
One way which nobody but me will ever support would be to intentionally double-count the votes of the poor. Consider it like an EITC, for voting power.
More realistically, one might imagine a bipartisan "American Social Compact" legislation that explicitly ties free-market reforms to aid for the poor, as a matter of law (Suppose there was a metric for both market freedom and redistribution, and the law says that the two numbers must have a certain relationship). Logistics would be hard, but it might be possible. Actually I suspect this is not much more realistic.
Isn't the simple answer that the people doing the tweaking aren't as concerned with maximizing welfare of a given group (and probably resist arguments that their tweking has significant second order effects on welfare) in the abstract as they are with trying to ameliorate what they perceive to be specific concrete harms. For example, there are many people hurt in dangerous professions so we should institute regulations so that workplaces are safer. The concern isn't for broader measures of welfare but a desire to live in a world where you don't hear stories about people injured in workplace accidents. Not that your arguments aren't true to some degree, but they miss the primary driver of the tweaking of productive institutions.
You think more money is the answer?
http://www.internetional.se/images/MoneySupplyT...
I think it and market speculators who are free to savage the economy while adding nothing to it for the good of a few and to the detriment of many and to the detriment of the economy itself are the answer to why tax redistribution is NOT the answer and allowing people to get paid fairly for a fair days work IS the answer.
Michael Greenberger, a former director of the commodities and trade commission explains well on C-SPAN how speculators are responsible for 1/3 of the price of oil. These same Enron types create asset bubbles tae huge chunks of the profits away from the honest hard working and add nothing to the economy. They don't if operate under an principles Adam Smith would recognize much less advocate.
Until you address speculators issues addressing income distribution, taxes and free-markets is as good as whistling in the dark. Its meaningless.
Wall Street made 10% of all corporate profits in 1974. Now after 30+ years of "free markets" they make 40%.. It's a clear answer that unregulated markets DO NOT WORK because competition and markets are intentionally disrupted and manipulated by the profiteers.
Bottom line in todays complex economy it is impossible to have a "free market". It will either be manipulated by Economic Royalist or by good regulation with eyes set to the whole economy.
Denmark's health care system has retained the same basic structure since the early 1970s. The administration of hospitals and personnel is dealt with by the Ministry of the Interior, while primary care facilities, health insurance, and community care are the responsibility of the Ministry of Social Affairs. Anyone can go to a physician for no fee and the public health system entitles each Dane to his/her own doctor. Expert medical/surgical aid is available, with a qualified nursing staff. Costs are borne by public authorities, but high taxes contribute to these costs. As of 1999, there were an estimated 3.4 physicians and 4.5 hospital beds per 1,000 people. The number of hospital beds, like that in other EU countries, has undergone a major decline since 1980, from around 40,000 to about 23,000 in 1998/99. Deinstitutionalization of psychiatric patients has contributed significantly to this trend. The ratio of doctors to population, by contrast, has increased during this period.
That's the comparison to be made and when we look at our relative "free market" friendly policies ever since Reagan I'd argue we are looking more like Mexico and less like Canada. But hey Mexico now has the riches man alive so obviously it has the most successful economy.
Also pertinant;
http://www.sciam.com/article.cfm?id=the-social-...
http://www.voxeu.org/index.php?q=node/809
More generally, it's probably true that if you think you know what the optimal social distribution is, you probably ALSO think you know what kind of social organization best gets you there. The calling to change an entire society's distribution of resources probably selects for the presumptuous exclusively.
A pure reliance on transfers, flavored by only the sparsest interference, also leaves our Ivy-educated technocrats with precious little to do save cut checks. Insofar as everyone wants to feel useful and clever, direct interference is surely more temptation than most politicians can stand. After fighting so hard for a seat at the levers of power, one's ego demands more than a mandate to fund transfer programs- great projects and carefully laid planning-initiatives are so much more appealing. Imagine how true this is of someone with an...exaggerated... sense of their intellectual capabilities and personal destiny.
Furthermore, if said meddling also allows you to line the pockets of your closest supporters, how could you possibly refuse?
As for the hoi polloi and their preference for planning over redistribution- I think you get part of the story right. I'd only add that the human need for narratives means that no lay-off can ever be the result of normal economic functions- we need villains. Harm, always and everywhere, in the mind of masses, derives from wickedness or failure. These impulses argue for correction and oversight, rather than cushioning. When did you last hear a bed-time story about a beautiful princess who was wronged by perfectly natural forces that required only the largess of the handsome prince to indemnify?
I think we are in total agreement about the "liberaltarian" (clever, but ineloquent) agenda and the good that it can do. I don't, sadly, see how it's even remotely possible.
But the belief that market liberalization increases social inequalities is not borne out by the evidence."
I just read this over again and was amazed at how ridiculous a claim it is. They answer it by comparing Demark to Greece and Italy. What??
How about looking at a single system such as the USofA. Market liberalization beginning just before the start of the 20th century leading to massive inequality and repeated depressions culminating in The Great Depression.
This followed by FDR reforms resulting in the most prosperous period with a huge strong middle class.
Then the Reagan "reforms" and market liberalization leading again to massive wealth inequity stagnant wages and wealth accumulations and a weakened debt ridden economy. Oh and rising poverty. And CEO to worker wages going from 40 to 1 to 400 to 1.
Come now already... aplea for some intellectual honesty is all I ask.
It's not productive to label a claim that you disagree with as ridiculous.
"aplea for some intellectual honesty is all I ask."
Again, it's not productive to say that the reason anyone disagrees with your analizys is because he/she lacks intellectual honesty.
I think the ultimate defence of universal social programs is that governments are sometimes the most efficient insurers. If that's wrong, then I agree all you could justify on redistributionist grounds is a Milton Friedman/Charles Murray style negative income tax/ guaranteed annual income.
I doubt any kind of guaranteed annual income would be acceptable to a democratic public unless it was tied to some sort of requirement to be working, studying or disabled, with a bureacracy to police this. The middle class would gladly pay the extra transaction cost of making sure that recipients of state aid are doing something.
Isn't there some evidence that redistribution (broadly defined) helps with economic growth?
To clarify I see the current redistibution as one of pretax dollars going from the honest working class to the wealthy market and policy manipulators.Hedge fund managers and market speculators aren't adding to the prodcitve economy they are taking from it and re-writing the rules to make it easier for them to take more still.
And now with them having manipulated the dividend tax Paris Hilton is only paying 15% on her earnings while I was over 25% with the AMT/ Medicare and SSI.
It is still arguing points to people who don't disagree and believe what Muirgeo argues more than it does. The Irony.
Another point, it pretends to tell people what is productive and what isn't.
Of course, underneath it all, do not forget that it is a social democrat of the most common order. Make no mistake. It likes to be duplicitous.
Muirgeo, as usual, could not be more wrong. Adam Smith was a huge advocate of commodity speculation.
http://papers.ssrn.com/sol3/papers.cfm?abstract...
Pretty much any paper by Sanchirico is worth reading, especially his ones on how inefficient norms develop and persist.
I think in todays modern day finance is not applicable to the truth that Adam Smith discussed. The reality is that financial institutions once dedicated to mobilizing funds for productive investment have transmogrified into a predatory, risk-creating, speculative driven, global financial system engaged in the unproductive extraction of wealth from taxpayers and the productive economy.
Muirgeo does not care. It seeks only to twist and evade. It is not interested in engaging your point honestly.
A clear indicator is the classic "So, [insert strawman]..." type argument. That means it has nothing to say and retreats from detail to a more comfortable glossed-over meta-generalization. It would discuss/try to understand why speculators exist and hold the discussions of particular speculators on an honest playing field. It does not do this as you can see.
You waste your energy. It is a troll. Plain and simple. If it wanted to honestly discuss your points, you would be in a different conversation right now.
It plays dumb and obfuscates because it does not care.
It's not even MY point that is being made. It is from Michael Greenberger a Former director of the Commodities Futures Trading Commission.
If you go to demandside.net you can download the the 7 minute podcast where he makes his case which specificallly adresses any issues that Michah brought. The full interview is on C-SPAN. So take some time away from Rush Limbaugh and go listen to a CSPAN interview.
John it is you who rebuts every item with no counter argument just a claim that everything I say is a straw-man argument without ever actually addressing the points being made.
The fact is John people like you, pavers you might be called, who deny the massive transfers of wealth that are going on based on market manipulation NOT based on standard competitive markets, it is you and your ilk that are pavers of the road to serfdom. I know not your motive weather it be personal profit, sheer ignorance or some grotesque Stockholm sort of syndrome but you are paving either way.
And as roads and debates go its rather fine with me looking down on you walking your low road. I simply wish to air truth whatever it ay be and Mr Greenberger's interview is critical not to be passed over as some sort of straw-man argument.
Let's recall what I pointed out about its behavior:
It likes to criticize libertarians for supporting things that they do in fact oppose and opposing things that they do in fact support. It also likes to conflate corporatism and free markets when criticizing free markets and separating them when trying to offer a hollow and hypocritical word of support for free markets.
In short, it is a duplicitous character that is not to be taken seriously.
I do not like Limbaugh nor have I ever listened to him EVER. I'm not a conservative, nor a Republican. But like at Cafe Hayek, where Muirgeo was beaten to a pulp on virtually every deceptive faux-argument it ever made, it likes to treat people who see its BS as being its favorite conservative crony capitalist caricature. It likes to accuse people who don't share its misguided solutions or perception of a problem as being part of the real problem. It continues to suffer from an inability to see arguments from libertarians and understand them as stand alone and consistent arguments that criss cross through the stereo typical monoliths of liberalism and conservatism but are not substitutes for them.
I've seen its pointless quibble and inaccurate statements far too often to be lured into them anymore.
Great post. With respect to this paragraphs that you quote, I don't think the guy has the logic right. Everybody knows that correlation does not imply causality, but one of the hardest things to get your head around as an analyst is that in a complex system, lack of correlation does not imply lack of causality. Unless we are confident that we have the measurement period right and have properly accounted for confounding variables, we will often see non-correlated variables that, in fact, have a causal relationship.
This doesn't mean that I have an opinion one way or another about the guy's conclusion, just that I don't think his evidence supports his assertion.
John to summarize my point on libertarianism is that it leads right back to what you call conservative crony capitalism. When deregulated corporations, bankers and Wall Street find easy profit in using their wealth to get new rules favoring their positions and digging into the public trough.
In principle libertarianism sounds good but in practice it doesn't work as shown by its complete lack of existence in any natural system. It is Darwinistically selected against as an unfit specimen on which to based human society. It's a cultural evolutionary dead end. My simple request for evidence of a successful libertarian society always goes unchallenged and it is for that reason I favor the idea of well regulated markets as opposed to those where the rules are made by a privileged few. THAT's IT! Nothing sinister just a pragmatic yet admitted imperfect approach backed by worldly evidence and in my opinion the closest one can get to using competition and market forces for the good of all.
my point on libertarianism is that it leads right back to what you call conservative crony capitalism. When deregulated corporations, bankers and Wall Street find easy profit in using their wealth to get new rules favoring their positions and digging into the public trough.
And the pin drops.
No. It doesn't. It bears burden of proof with such a silly charge. See my cited quote in my previous post in this thread.
This is always where it wants to go. This is always its central point. This why I say it is duplicitous when it talks about free markets. Take note. And it has had this explained to it far too many times to waste time explaining and deconstructing this sophism again. Like I said already: it doesn't care. It needs crony corporatism and libertarianism to be the same thing in order to make its silly assertions. It needs to overlook everything it has ever been told to make an argument. Basically it needs Peter and Paul to be the same person in blurry kinda way whose bluriness escapes it because it doesn't care.
It thinks its on to something but it is really just chasing its own tail. It doesn't get it. It doesn't care.
And even when many libertarians in the past have flat out contradicted this whole sophism right to its face in plain English at Cafe Hayek...even Dr. Boudreaux and Dr. Russ Roberts themselves have done it..., it evades it, ignores it and shifts its point. Again recall my quote:
It likes to criticize libertarians for supporting things that they do in fact oppose and opposing things that they do in fact support. It also likes to conflate corporatism and free markets when criticizing free markets and separating them when trying to offer a hollow and hypocritical word of support for free markets.
In short, it is a duplicitous character that is not to be taken seriously.
I meant every word of it and it is 100% accurate. Feed it at your own risk.
And you can bet that in Smith's day, the people who wanted the government to crack down on engrossing and forestalling were just as willing as you are to grant the value of speculation in theory, but considered their particular circumstances to be different.
My purpose here is simply to refute your claim that Smith did not approve of commodity speculation. That is demonstrably false.
Of course, as is to be expected, you ignore this and continue to pretend that "times were different back then." No, they were not. People have always and will always fear and misunderstand commodity speculation, just as people have always and will always fear and misunderstand international trade. Some things never change, and there will always be people like Muirgeo around who desperately need but adamantly refuse economic education.