Hi Jack,
You're right that I am deliberately seeking out your opinion. I have always respected not only your intellect, but also your Christian faith. And since, as Christians, we have come to such radically different conclusions on matters of economics and politics, I'm eager to learn why. Hopefully, our exchanges will also be helpful for those who read the blog.
You have brought up an argument that my father brought up in some of our discussions recently and it is a very common one: private industry does a more efficient job than government at almost any economic task. It is better at making cars, it is better at meeting consumer demands, it is better at customer service, it is better at determining the worth of wages, and so on. To some extent, I agree with you. In fact, I find it very hard to argue that government is efficient. And I have no interest in defending the waste, corruption, and general unprofessionalism of many government agencies. As one who depended upon Medicaid for my healthcare during my years as a pastor, I can assure you that as I waited in three-hour lines merely to make an appointment, I was muttering angry words about government inefficiency. Nevertheless, as unhappy as I was with the unprofessionalism and inefficiency, I was thankful to have healthcare. I certainly couldn't afford to buy it on my own with the salary I was pulling in. Which leads me to my question for you this time around…
It's very easy to beat up on various government programs for their many flaws. Social security is insolvent. Medicare is easily abused and wasteful. Welfare promotes generations of dependency. And on and on the stream of criticism goes, providing endless hours of material for the pundits at Fox News. But what I want to know (and, more importantly, what those trapped in poverty want to know) is what's the better solution? It is very easy to deconstruct, but very difficult to construct. Any kid playing with blocks will tell you that. The swift kick of a younger sibling can topple hours of work. And perhaps I'm just missing it, but I don't hear a lot of conservatives out there proposing answers to the problems of systemic poverty. I just hear them taking cheap shots at our nation's efforts (pitiful as they may be) to actually DO something about the issues people are facing. Can you point me to a conservative solution to poverty that provides an answer not only for individuals, but that also addresses larger systemic causes of poverty?
Perhaps what we are butting up against here is our view of society. You rightly brought this up a few weeks ago when you asked what I meant by "we." To bring a bit of theology into the conversation, as I read the Scriptures I see a heavy emphasis placed on the value of the community. In fact, according to some Old Testament prophets, God judges the morality of any given nation by how it treats its poor. There is a strong value attached to the common good with particular concern for immigrants, widows, the poor, and other marginalized groups. So when I hear Margaret Thatcher claim that there is no such thing as society, I must stand up and object. We are more than a mass of isolated individuals. Scripture teaches us that we are connected to one another and "when one part of the body suffers, the rest of the body suffers with it."
I often hear the argument made from many conservatives that alleviation of poverty is not the job of the government, but of the church. If that is your belief, please indicate so in your next email because that idea alone is worth its own letter. But I won't speculate as to your own conclusions about how to alleviate poverty.
So to sum up, you seem to have a great deal of confidence in the ability of the free market to answer its own problems. And to a large extent I agree with you. If people demand shoes, the free market generates shoes to meet the demand. And I do think that history has shown that capitalism is excellent a generating wealth. But we part ways here: I do not think that the free market alone ever has or ever will address many of the social and economic ills that our nation currently faces. We must instead collectively take action against a problem that, if left unaddressed, will eventually destroy not only the poor, but everyone. Systemic problems require systemic solutions.
By the way, what is your opinion of FDR's New Deal? It seems to me that it did not solve the problem of the Great Depression entirely, but most historians agree that it did help people more than hurt them. And that's all I'm arguing for here: something that helps those who suffer most.
- Greg
A lot of stuff here. I want to try to touch on some of it, but I hope we can discuss more at length sometime.
ReplyDeleteLet me work backwards.
RE: New Deal. FWIW historian Stephen Davies writes:
"The second myth is that the New Deal saved American capitalism and brought the Great Depression to an end. The historians generally do not believe this anymore. The fact is that in most parts of the world the Great Depression began to end much, much earlier and much, much more quickly than it did in the United States. In Great Britain, the Great Depression was over by 1933, and Britain, in fact, enjoyed very rapid economic growth from 1931 onwards. In the United States, by contrast, not only does the Great Depression go on for more than a decade, it in fact actually gets worse, and by 1937, the level of unemployment in the United States is as high as it had been in 1932, but in addition the federal government has built up an enormous debt."
Here is an economics paper which concludes that the New Deal extended the Great Depression by 7 years. published in the Journal of Political Economy, one of the most important journals in economics.
Deletehttp://www.jstor.org/stable/pdfplus/10.1086/421169?acceptTC=true
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ReplyDeleteYou write
"I do not think that the free market alone ever has or ever will address many of the social and economic ills that our nation currently faces. We must instead collectively take action against a problem that, if left unaddressed, will eventually destroy not only the poor, but everyone. Systemic problems require systemic solutions."
Would you mind being more specific about what will destroy us, and what free markets cannot address? What problem are you referring to?
Also, you say some problems cannot and are not sufficiently addressed by free markets. Compared to what? If there is a perceived problem that a free market cannot address, does it necessarily follow that some intervention against the free market must be made?
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ReplyDelete"I often hear the argument made from many conservatives that alleviation of poverty is not the job of the government, but of the church. If that is your belief, please indicate"
I can't speak for Jack, but I will certainly indicate that this is my belief. Don't assume, though, that I or anyone else start with this belief as though it is out of that which flows my criticism of government programs. No, I start with the belief that we should value improving the social conditions of society. Indeed, it is not entirely meaningless in this context to say simply that we should value making the world a better place. If I've been successful at making that a broad enough claim as to say it should be our exclusive aim, then I can also say that institutions are made just or unjust by how well they serve that aim. If I find an institution (such as a government with particular powers) to be inimical to those aims, then it should follow that the institution be declared unjust. In other words, the view (my view) is not "helping people only matters when done privately". Instead, it is "helping people matters. governments which institute programs x and y do not help people. Therefore governments should not institute programs x and y." Obviously my argument may be wrong, and you likely dispute premise #2, but it is an important distinction.
I should also be more precise about my view than just adopting your words of "alleviation of poverty is not the job of the government, but of the church". My view is that such actions must be done voluntarily, not by coercion. I don't expect that view to resonate with you at the moment, but I think there are strong reasons for holding this view (as a conclusion, not just a starting point) which may themselves indeed resonate with you which is why I think it merits a lengthier discussion. Tolstoy's book will be a good start =)
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ReplyDeleteI'm not sure I understand the point you are making about society vs. individuals. This may be because I don't exactly understand the you point you are speaking against. But to me, emphasizing the individual - and not the collective - is crucially important. For one, understanding that "only individuals act" I think is important for understanding how and why markets work the way they do (and don't), and how and why governments work the way they do (and don't). The points you make about inter-connectedness are arguments I hear thrown often against libertarians, but have never understood. My claims about individualism seem to me say nothing against what you say about interdependency, and vice-versa. I find nothing objectionable in what you say about the value of community and/or "when one part of the body suffers, the rest of the body suffers with it". Nor have I ever heard or read any sentiments expressed among self-described libertarians which reject what you are saying about community (though they may exist). In fact, if anything I feel like the communitarian values you exress are libertarian ones. The best I can try to make sense of the difference between individualists and collectivists is in what individualists say you cannot do. Individuals have certain rights which ought not be violated, even if doing so makes "society as a whole" better off. E.g. if an argument can be made that society is better off if we have slaves work our plantations, can slavery be said to be unjust? Individualists say yes, because the institution violates the rights of the slaves. Truly, I believe such an argument was made in support of slavery. Also, prominent abolitionists I think saw the matter as inseparable from libertarianism (namely Garrison, also Thoreau and Spooner).
Needless to say, we're really missing each other here - perhaps you can further elaborate why what your saying challenges the belief of Jack or I.
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"something must be done"
ReplyDeleteThere are several things to say about this. First of all, and this is really important: saying that doing SOMETHING is better than doing NOTHING may seem to be intuitive at first, but you will notice that it is *entirely* dependent upon whether or not that something is effective toward the achieving the ends sought, and not instead counterproductive. Given this, accusing conservatives of not offering any alternative course of action seems to me to be an incredibly unweighty charge if they are defined by their belief that what what IS being done is harmful. Disputing their claims that such programs are harmful makes sense. Arguing that programs should be ennacted regardless of whether or not they are harmful, if no aggressive alternatives exist, does not.
Clearly, if that which is to be done is to only make problems worse, then our intuitions about doing something will only mislead and misserve. I fear that this very intuition is the cause of many a problem that you and I now see in the world.
Secondly I see the question as not "what should be done", but "who should be doing it". Governments are not the only relevant actors. Again, governments do not act, except that individuals (which we may identify as representative of a government) do. Only individuals act, and they can act with or without government power. So just because government is not doing anything does not mean that nothing is being done, and problems unaddressed by government will remain unsolved. Every second of every day, individuals are acting to allocate their resources to make their world a better place as they value it. Of course, actions without government power are more limited than actions with government power. Should the power of government then been utilized to meet needs that are too great to be satisfactorily addressed through private, voluntary means? This is a huge and important question, and there are several big reasons I think the answer is no. I cannot lay them all out here, but I will point out one thing: govenments, by their nature, can *only* act by limiting the actions and choices of individuals employing their own means to achieving their own ends. Free markets, on the other hand, are defined by the sole fact that such actions are not limited. People are free to choose the options which they consider to best solve the problems they see, in ways that they value most. So a question like "should we ban sweatshops?" is the same question as "should we eliminate the option of being able to be employed in a sweatshop for those individuals who think that being employed in a sweatshop is better for themselves than any of their existing alternatives?". that's an oversimplification which will rightly draw criticism given the fact that I'm not now going any deeper, but it is I think an important insight once it is understood how markets work and how wealth is created.
DeleteThirdly, I can't speak for conservatives (though maybe I do here anyway), but libertarians do offer proactive, progressive, and liberal solutions which they believe do address the big problems precisely by addressing the underlying systemic issues in ways we believe governments do not and cannot. Whether or not people will agree that such proposals are desirable or can accomplish what many libertarians believe they will is a different question, but at least it cannot be said that we do not have our wish list. If this is not apparent to people, then perhaps that is because Republicans and Democrats control election laws and deliberately keep libertarians out of public election debates in spite of (really, because of) the fact that most Americans agree government should be both more fiscally conservative and more socially liberal.
DeleteI'm not an expert or an economist, but here's my take on the libertarian solutions to problems of social justice. You will notice a pattern I'm sure, but as you said well - "Systemic problems require systemic solutions." Libertarians are all about changing institutions and turning them away from the legal and philosophical conventions and institutions that libertarians believe cause problems and inhibit their solutions.
In order of preference*:
Delete1) Limit the scope and jurisdiction of government, as much as possible. True, this would mean that government can't enact good policies. But it would also mean it can't enact bad policies either, and libertarians generally believe that any given power is on net more likely to used in ways that make people worse off than in ways which improve upon voluntary alternatives to achieving the same results.
This policy also favors localization of politics and is opposed to centralization. Not only are one-size-fits-all approaches crude, ham-handed, and inefficient, but centralized powers invite the corrupting influence of corporate lobbyists and rich, politically-connected rent seekers who have far superior power to influence the government in their favor, often at the expense of those with the least power - the poor and disenfranchised.
Libertarians typically believe that America became the most wealthy country on the planet largely because the central government was among the most constitutionally limited in history.
*This is from the "purist" libertarian position. Others will fairly call themselves libertarians by virtue of the character of their views taken on the whole and yet disagree with some of my wishes. Such disagreement, though, is likely a modification of the "pure" libertarian position.
2) Open borders. This means both free trade and free migration. It's hard to imagine anything else that could come close to the effectiveness of open borders at creating wealth and lifting people out of poverty. Economists have calculated that if all border restrictions were eliminated aroun the world, global GDP would be double what it is now. This means that as a planet, we would be twice as wealthy. I think the gains of such a policy, BTW, would concentrated in those who are now the least well off, and the costs would be concentrated in those who are best off. In other words, this policy has both wealth-generating AND wealth-equalizing effects. Sadly, those who tend to speak loudest about the plight of the poor also seem to tend to be the same people (particularly unions) who decry the practice of businesses in shipping jobs overseas (a manifestation of free trade). This heaviest costs of such practices are borne by people (first-world workers) who I think are almost universally better off than those who gain the most (third-world workers), and unlike other welfare programs, this practice is also efficiency-improving. The practice is also largely the result of rising costs of doing business in the US do to often-well-meaning regulations supported by many of the same people.
DeleteFurthermore, this policy may do more than anything the UN can do to promote world peace, liberalize political systems, and reduce the harmful effects of war and predatory governments. If it sounds too good to be true, I hope you will look into it yourself: http://openborders.info/
Note that the record of traditional government welfare programs in reducing poverty is somewhat dubious (http://www.economicsjunkie.com/wp-content/uploads/2010/10/poverty-rate-historical1.png), and yet their existence is one reason people argue against opening borders.
3) End the wars. Probably all of them. (Sanctions too, but that was #2). Given tremendous inability to predict the outcomes of any act of war, it seems nearly impossible to ever be able to overcome the burden of proof against what should be a moral presumption against war. Besides causing grievious, heartwrenching atrocities, and destroying wealth, libertarians believe that war, like most government interventions, tend to be counterproductive of their very aims anyway. Our government uses interventions to prop up dictators that predate on their own people and try to control world events like a chess game. The history of propaganda and lies associated with going to war really is beyond belief, and millions of innocent people get caught up in the mix. Military recruiters deliberately target poor youths because they know they have few other skills or options. Fought by already forgotten people killing unknown people in faraway places, the costs of war and the lives it destroys remain perpetually unseen and unconsidered. These children are sent to war by politicians often unwilling to send their own, and paid for by those who profit (see "war is a racket" and Eisenhower's farewell speech). the greatest threat to humanity we now face (and probably have ever faced) is not economic stagnation caused by bad policy, but self-extinction by war. It seems demonstrably true that violence begets violence, and nearly every act of war seems to take us one step closer into that spiral which leads to unthinkable places. In spite of Paul Krugman et al's arguments to the contrary, libertarians believe that warcannot make people economically better off, either. War only destroys, and the poorest usually pay the heaviest price.
Delete4) Privitize. Start with education. The condition and quality of inner-city schools is deplorable, and urban parents sometimes end up in jail for trying in their desperation to get their children into better schools. The conditions of rich suburban schools is only less bad. Throwing more money at it has never seemed to work, but happens endlessly anyway. Libertarians expect that a private, competitive, free market in education will offer education at dramatically higher quality and lower costs. It will also be more specialized, meaning students with special needs and unique gifts can be better served. If you are concerned about the poor not being able to afford tuitions, then give them tax-funded vouchers which they can use at the school of their choice. Libertarians believe the fact that urban poor minorities are locked into urban public schools plays a big part in keeping them poor. (For more on this, you might read Thomas Sowell, though I'm more comfortable calling him a conservative than a libertarian). Non-libertarians argue that education is too important to be left to the free market. Libertarians argue that, like food production, education is too important to be subject to government innefficiencies. Like journalism, education is too important to be left to political control.
DeletePrivatize money too, for reasons explained in #5 and #6.
5) Deregulate. First of all, this is a misnomer. There are good reasons to believe that markets forces regulate businesses more efficiently and sometimes tougher than governments do.
DeleteThe difference between redistribution and growth is somewhat like the difference between giving you $100,000 every day for a month, and giving you a double salary every day for a month starting with a penny. Despite being counter-intuitive, the latter option is far more lucrative in the long run. Similarly, wealth creation (that is, economic growth) is IMO far and away the best means of bringing people out of poverty, improving working conditions and wages, and making life generally more enjoyable by giving people more options. Regulation is costly, inhibits growth, has unintended consequences and distorts markets, often doesn't work, and is certainly sometimes, probably most of the time, and possibly all of the time more costly than it is worth. Furthermore, it is a power of government which is almost inevitably corrupted and controlled by the very people it is intended to reign in ( google "Public choice", "Regulatory capture", and "bootleggers and baptists"). Minimum wage laws benefit more-skilled workers at the cost of the least skilled and educated, therefore also playing a large role in keeping poor people poor (arguments made for the first of these laws included intentionally keeping blacks out of the work force). Financial regulations and/or centralized monetary policy are believed to cause business cycles, and regulations in general are believe to make it more difficult for markets to adjust, thereby prolonging recessions. Drug laws do little to curb the use use drugs, do a lot to promote violence, and and put astounding numbers of black youths (and parents of young children) in prison for nonviolent offenses which should be seen as health problems, not crimes.
6) Cut spending. as much as possible. also, cut taxes likewise. cutting pentagon/defense/imperial spending is the most obvious place to start, but it has to also mean cutting spending on existing welfare programs. Many specialized welfare programs do not seem to do much good (and may do a lot of harm), and income guarantees (just give the poor money to spend, in competitive markets, on what they need most) probably can do more good for less money. privatizing soc security, at least the retirement savings-type functions, can give people far higher returns for the same inputs, greater control, and greater stability and solvency. Cutting spending makes cutting taxes and inflation possible. Reducing taxes and privatizing money means markets are more efficient (see # 5) and reduced revenue means governments are more discriminatory about what they do (see #1). many libertarians believe private money and free banking lead to fewer and less severe trade cycles, less wealth inequality, less inflation (which perpetually cuts wages and hurts people on fixed incomes), and potentially fewer transaction costs. remittances sent to the third world could be much less costly with private money.
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ReplyDeleteI was going to say more in response to your post, but I have clearly written too much already!! I don't expect you to be persuaded by any of my above comments (if you even read them all), but I wanted to respond to a few things in the post and thought you deserved an answer to your question (which I never answered way back when) about what solutions libertarians propose as alternatives. I did not try to explain in detail *why* libertarians believe those are the best solutions so much as try to give you a pretty good idea of *what* libertarians would like to see.
ReplyDeleteI will have to ask you to forgive the many typos and incoherent sentences I'm sure you will find above as I was trying to write as much of my thoughts as I could as fast as possible and didn't proofread. perhaps I'm not representing my school of thought well - please don't judge me! =) anyway, thanks Greg for the blog.