Home > Economics - General > Incarceration as a labor market outcome

Incarceration as a labor market outcome

May 31st, 2009

I wasn’t all that surprised that Bryan Caplan

didn’t like my interpretation of our bet on EU and US unemployment rates, which was that the combined rates of unemployment and incarceration in the US would exceed those in the EU over the next ten years. I was, however, surprised by the vehemence with which libertarian-inclined* commenters here and at Crooked Timber objected to this interpretation.

A string of them echoed Caplan’s argument that

From a labor market perspective, though, Quiggin’s incarceration adjustment would only make sense if you thought that most or all of the people in jail would be unemployed if they were released.

Caplan has missed my main point. I’m not suggesting that incarceration is disguised unemployment (though obviously it reduces measured unemployment). Rather, I’m saying that, like unemployment, incarceration should be regarded as a (bad) labor market outcome. If you want to evaluate the performance of the labor market, you need to look at both.

There’s nothing radical or leftist about this viewpoint: it’s one that is at least implicit in all economic models of the labor market of which I’m aware, and is most particularly explicit in that of the Chicago School*. Most of the crimes for which people are imprisoned in the US can be understood as reflecting economic choices which in turn are determined primarily by the labor market in which those choices are made. This is obviously true of property crime and drug dealing, and it’s true, directly or indirectly, of lots of violent crime as well. As Gary Becker put it (quoting from memory here) “a burglar is a burglar for the same reasons as I am a professor”. (You don’t have to buy Becker’s assumption that criminality is a “rational” choice, to agree that it is a choice and that choices reflect the attractiveness of the available options).

There’s plenty of statistical evidence from scholars like Glenn Loury to show that criminals, and particularly those who end up incarcerated, are drawn disproportionately from groups with bad labor market prospects: poor, disproportionately black, facing low wages and high risk of unemployment. But well-done case studies are often more convincing, so I’ll point to the Venkatesh study of Chicago drug dealers reported in Steve Levitt’s Freakonomics. Venkatesh found that most street dealers were making less than minimum wages, and were motivated by the very low probability of surviving to attain the only high-paying job realistically available to them, that of the local kingpin. Even more striking was the observation that, when gang members learned Venkatesh was a university professor, they approached him in the hope that he would be able to wangle them jobs as janitors – otherwise an ambitious, and probably unattainable aspiration.

The Chicago theory on which the case for flexible labor markets is based predicts that the lower is the return associated with the “outside options” of employment or reliance on social insurance, the higher will be the incentive to engage in crime as a way of making a living. The only way to offset this is to make crime still less attractive, or less feasible, through high rates of imprisonment and long prison terms. That is, other things equal, low wages and weak or non-existent unemployment benefit systems can be expected to lead to higher crime rates, higher rates of imprisonment of both. So, any consistent advocate of the Chicago theory should treat both incarceration rates and unemployment rates as labor market outcomes.

Unfortunately, as has been shown by the current debate, there’s not a lot of willingness to explore the logical implications of the Chicago line to a position that might undermine its policy conclusions. Loury has noted the destructive effects of imprisonment (in Chicago terms, it causes rapid depreciation of human capital). There’s no good reason a priori to suppose that a labor market in which wages are low and unemployed are treated badly will do better, when both unemployment and incarceration are taken into account than one with higher minimum wages and more generous social welfare.

So, I would argue, my interpretation of my bet with Bryan Caplan is the more relevant one in terms of policy evaluation. The proportion of bad labor market outcomes is better measured by the sum of unemployment** and incarceration (expressed as a proportion of the labour force) than by unemployment alone.

* Or maybe shmibertarian: as we saw during the Bush era lots of alleged libertarians are quite comfortable with extreme use of state power as long is doesn’t touch their bank balances. On the other side of the coin, I should note that the Cato Institute has done some very good work on this subject, including publishing this Glenn Loury piece.

** I’m leaving aside issues about the best definition of unemployment, underemployment and so on, which have been canvassed extensively in earlier discussion.

Categories: Economics - General Tags:
  1. May 31st, 2009 at 10:13 | #1

    Given that most drug dealers in the USA earn less than minimum wage perhaps the minimum wage has something to do with depriving them of legal jobs.

    Most US inmates are not violent drug offenders. Their high incarceration rate is a mark of policy failure. They should end the war on drugs along the lines of Portugal.

    http://www.cato.org/pub_display.php?pub_id=10080

  2. May 31st, 2009 at 10:14 | #2

    “Not” in the first sentence of my second paragraph should be “Non”. JQ feel free to edit according.

  3. May 31st, 2009 at 10:16 | #3

    Or maybe shmibertarian: as we saw during the Bush era lots of alleged libertarians are quite comfortable with extreme use of state power

    This is balony. In Australia quite a few libertarians (sadly) sided with the war mongerers. However not in the USA.

  4. May 31st, 2009 at 10:23 | #4

    Here is Republican libertarian Ron Paul before the Iraq invasion:-

  5. gerard
    May 31st, 2009 at 10:26 | #5

    funnily enough, the US prison industry is so enormous that it has become a major employer in its own right!

  6. May 31st, 2009 at 10:42 | #6

    Ironic but not funny.

  7. gerard
    May 31st, 2009 at 11:11 | #7

    yes, ‘funnily’ was not the right adverb, it’s actually a very sad state of affairs. doubly sad, since much of the prison industry is now privatized, with a few disgusting parasite corporations (like Wackenhut, which Howard brought in to run our refugee detention camps) riding these horrible judicial systems all the way to the bank. what do you call the authoritarian (and racist) merging of state and corporate power again?

  8. May 31st, 2009 at 11:14 | #8

    Plutocracy.

    Although I don’t know why you think privatised prisons are sad.

  9. Alice
    May 31st, 2009 at 11:35 | #9

    Terje
    I think privatized prisons are sad (in the same way I think the privatised second fleet was an abject failure). Let me see..they didnt feed the convicts enough for them to walk out on arrival (and one third never got to be carried out at all). The privatised prison transports Howard was so fond of, to detention centres, crossed Australia’s vast outback from Victoria to detention centres, with little water, inadequate toilet facilities in probably cheap metal vans with inadeqate air conditioning resulting in the death of a man (in Australia).

  10. May 31st, 2009 at 11:50 | #10

    Or maybe shmibertarian: as we saw during the Bush era lots of alleged libertarians are quite comfortable with extreme use of state power as long is doesn’t touch their bank balances.

    Reminds me of when Bob Black said that “libertarianism and Leninism are as different as Coke and Pepsi”.

  11. May 31st, 2009 at 12:47 | #11

    JQ–I think you are spot on in your analysis, and at least in the US, any analysis of labor outcomes and welfare policy that ignores incarceration is myopic at best.

    As for the discussion of privatized prisons, I think that one incredibly important role of the state is the monopoly it holds on the use of force. Like all monopolies, it restricts supply of force which is an all-around good thing. By contracting out that right to use force, however, you introduce parties that have an incentive to increase that supply, and they begin to accumulate the political power to allow for the relaxing of monopoly power. You definitely see it in the US: the prison guard lobby is instrumental in blocking legislation to make sentencing laws (particularly for drug laws) more sane. That is the case even with state run prisons, but when there is a private, profit-driven entity behind the organizing, the lobby gets much stronger and more effective.

  12. gerard
    May 31st, 2009 at 12:56 | #12

    of course you don’t understand, Terje. all you understand is that “private”=”good”.

    even when the government is the only buyer, and the profit comes out of taking as much tax-derived money as possible from this government, and spending as little on it as they can on those imprisoned by this government due mostly to its authoritarian and invasive laws.

    I wouldn’t expect a “libertarian” to understand why this is “sad”.

  13. Ikonoclast
    May 31st, 2009 at 13:38 | #13

    TerjeP says at post 1;

    “… perhaps the minimum wage has something to do with depriving them of legal jobs.”

    I would say “What about the minimum reproductive cost of labour?” Surely, we cannot expect people to work for less money than that which suffices for societal survival including reproduction and education of the next generation.

    Welfare is often seen by the extreme right as an unmitigated evil and something which detracts from the incentive to work. Welfare is far from ideal but the alternatives are worse. Don’t forget the workhouses and poor houses of the 19th Century and people starving due to market failure.

    I suspect that all right-wing libertarians would like to see the removal of both welfare and minimum wages. I cannot imagine them freely walking the streets of that society. They would hiding in their gated enclaves. Crime, starvation and disease epidemics would be rife.

    Enlightened self interest suggests we are all safer and that society is more open when there are safety nets in the form of welfare and a minimum wage.

    A healthy economy needs workers to get a good wage (enough for adequate housing, food, clothing, education and some recreation and entertainment). When workers have a good wage their spending keeps the whole system humming.

    Starvation wages are no good for anyone but the 1% who like to own everything and lord it over others. Do such types draw part of the enjoyment of their wealth from the contrast of those in abject poverty around them? They certainly show a pathological resistance to any system which tries to help people rather than grind people down.

  14. jquiggin
    May 31st, 2009 at 13:47 | #14

    “This is balony. In Australia quite a few libertarians (sadly) sided with the war mongerers. However not in the USA.”

    This is wrong, Terje. Back in 2002 and early 2003, pro-war libertarians were the dominant group in the blogosphere. IIRC, the term “shmibertarian” was coined with specific reference to Glenn Reynolds.

    Obviously, there is some sense in which “no true libertarian” supported the war, but that’s as applicable here as in the US.

  15. May 31st, 2009 at 14:13 | #15

    “The only way to offset this is to make crime still less attractive, or less feasible, through high rates of imprisonment and long prison terms.”

    Or through reform of abysmal drug and sentencing laws.

    http://upload.wikimedia.org/wikipedia/commons/c/c4/US_incarceration_timeline.gif

    “That is, other things equal, low wages and weak or non-existent unemployment benefit systems can be expected to lead to higher crime rates, higher rates of imprisonment of both.”

    That’s perfectly fair. It is in fact a reformulation of my own moderate-libertarian justification for welfare.

    However, for balance people should note that high minimum wages exacerbate unemployment (and therefore crime), particularly amongst certain sub-groups.

    http://andrewleigh.com/?p=1218

    I know Quiggin (among others) has concerns about the impacts of changes in the minimum wage on equality, but that’s a separate issue to the one at hand.

  16. Alice
    May 31st, 2009 at 14:48 | #16

    Why do I suspect that some libertarians would willingly tolerate higher incarceration rates and longer prison terms for the unemployed that turn to crime (rather than addressing the cause of unemployment)? Chasing the tail end of a problem again and somewhat hypocritical.

  17. May 31st, 2009 at 14:51 | #17

    Why, Alice? Because you’re biased. ;-)

    Also, please enlighten us as to “the cause of unemployment”.

  18. May 31st, 2009 at 15:00 | #18

    Alice – I spend all this time railing against the minimum wage and then you accuse me of not addressing causes of unemployment. Weird.

    Ikonoclast – I have little problem with welfare to address the misery created by government interference. I do however have a problem with the interference that creates the problem.

    I’d support a social wage or negative income tax as a form of universal welfare if we ditched the minimum wage as part of the package.

  19. May 31st, 2009 at 15:02 | #19

    They would hiding in their gated enclaves.

    Ikonoclast – your implicit claim to moral superiority is obnoxious.

  20. conrad
    May 31st, 2009 at 15:37 | #20

    “That is, other things equal, low wages and weak or non-existent unemployment benefit systems can be expected to lead to higher crime rates, higher rates of imprisonment of both.”
    .
    I think “other things being equal” is the optimum phrase here. If you look at crime and incarceration rates, it’s surprising how weak the relationship is between them and other factors across countries. Australia (an extremely rich country), for example, has the highest crime rate in the OECD, but an incarceration rate about 1/7th that of the US. Alternatively, the crime rate in Japan is tiny, yet their incarceration rate is almost half that of Australia.
    .
    Even if I compare economic systems, there doesn’t seem to be much relationship between them and the crime/incarceration rate. Singapore and Hong Kong, for example, have next to no social security benefits, quite low wages for a good section of the population, and a more uneven distribution of wealth. Yet their crime rate is around a tenth that of Australia (if remember correctly) which has has a high minimum wage and comparatively large social benefits.
    .
    Given these sorts of statistics, I’m not especially convinced that incarceration rates are a good indicator of economic performance, and at least in terms of cross-country comparisons, even overall crime rates appears to be only slightly better predicted by them.

  21. Ubiquity
    May 31st, 2009 at 15:46 | #21

    I think given the current system of incarceration that JQ bad labour market outcome holds some weight. But a change that elliminates most of the drug laws, tax evasion and protest laws could mean that JQ could loose (but never fear a $100US in nine years will only be worth a fraction of the ozzie dollar).

    As far as I can see the Libertarian arguments are as follows:

    1. Drug laws are enforced by the state, which is influenced greatly by lobbyist who have financial or ideological interest in maintaining the prison system current culture and the revenue it generates. Libertarians oppose those that foster this unethical relationship.

    2. Libertarians consider the loss of privacy, the loss of liberty, the loss of independence, as important. From this stance the culture of the sytem of incarceration is flawed. One major example is the prison system deprives all rights of exchange through any medium such as cigarrtes or baked beans or whatever. You can only buy from the state store. I admit that it still goes on illegally but why not encourage such productive exchange.

    Imagine going to prison and being able to save for the future when you are released. This is productive labour. You can’t currently cash in your baked beans. Society rheotoric on prisons capacity to rehabiltate prisoners is only rheotoric beacuse of the lack of interest or ideology to implement freedoms and rights libertarians believe to be important.

    It may be fine to takeaway the liberties of those violent individuals, but the prison population is growing in the US primarily because of laws on drugs (and tax etc) instigated and policed by the state. JQ I hope you loose but only on the premise that they stop incarcerating people for drug offences and tax evasion. I hold little hope of this ever happening.

  22. Alice
    May 31st, 2009 at 15:50 | #22

    Terje
    you say

    “Alice – I spend all this time railing against the minimum wage and then you accuse me of not addressing causes of unemployment. Weird.”

    Whaht I find strange is your apparent suggestion that the minimum age is all there is to explain unemployment. If we really took all those casuals and underemployed into account I would suggest the minimum wage has already fallen below any “legislative documented minimum wage requirement” yet unemployment is still rising Terje…? Why is this?

    You forgot demand for goods and services Terje.

    I find your focus on one term “the minimum wage” as a structural inhibitor of employment in these times, frankly odd, given the growing pool of tenuously employed that dont even reflect in that legislative minimum wage.

    Define your minimum wage Terje? A weekly minimum wage, a two day minimum wage or should it fall to an hourly minimum wage?

  23. Alice
    May 31st, 2009 at 15:53 | #23

    re above post – I wasnt suggesting anything untoward
    “minimum age” should say minimum wage.

  24. May 31st, 2009 at 16:51 | #24

    Alice – the legislated minimum wages should be $0 per hour. If you abolish the minimum wage and other price controls then you abolish structural involuntary unemployment. Education and other factors then dicatate wages which is as it ought to be. Welfare will dictate willingness to work. Of course you will still get transitional unemployment in times of economic shock.

    As stated previously my view is that the minimum wage ought to be abolished and replaced with other forms of income support. A citizens wage or negative income tax would be my prefered options. I’d rather be having a democratic debate about how high or low a citizens wage ought to be rather than debates about price regulation in the labour market.

    If Sweden and Denmark can live without a legislated minimum wage and can figure out such thing at the enterprise level I see no reason why we can’t also.

    And if we do keep the minimum wage then we should follow the lead of places such as the EU or Canada and set it on a regional basis not on a central government basis. After all labour markets are different in different regions and the cost of living is different in different regions. Given housing costs why isn’t the minimum wage in Sydney higher than in Dubbo or Alice Springs?

  25. May 31st, 2009 at 16:55 | #25

    p.s. Assuming a 40 hour week the dole is $5.26 per hour.

  26. May 31st, 2009 at 17:46 | #26

    TerjeP wrote “If you abolish the minimum wage and other price controls then you abolish structural involuntary unemployment”.

    No, because that’s leaving something rather important out: there’s a de facto minimum wage in the form of the minimum necessary for survival under the circumstances. Real wages can only fall far enough to clear the labour market, i.e. get rid of unemployment, if that clearing level is higher than that de facto minimum wage. If not, of course you would start to get the sort of adverse outcomes this piece is on about. But I suspect you already had this as background knowledge, because the rest of your comment relates to this, thus…

    That rest of the comment describes something that would bring back a labour market like that in earlier times, or in developing countries now, in which people have separate subsistence resources and they could (can) sustainably bid wages down lower than survival levels as they only need top up wages. When you hear about poor people in poor countries living “on” less than $1 a day or whatever, that is plain nonsense. They are living on that plus separate resources, which is still poor but nothing like as bad (in fact, impossible) as is made out; the cash wage is a very necessary top up, but not the sole means of survival.

    Incidentally, people should be careful about throwing terms like “shmibertarian” around. I know people with the surname Smibert, and there’s the chance this could cause offence.

  27. May 31st, 2009 at 18:07 | #27

    PML – fair call.

  28. Donald Oats
    May 31st, 2009 at 18:35 | #28

    Re# 23, don’t worry Alice, I thought it was a minor slip :-)

  29. Donald Oats
    May 31st, 2009 at 19:08 | #29

    Let’s eliminate the minimum wage from the lexicon, and while we are at it, kill off wage stickiness too.

    That could be achieved by having a realtime measuring system for the wages paid in any job category. If some unemployed bum (probably all their own fault that they lost their job in the downturn, hey?) wants a crack at a job on offer – let’s say it’s to be lavatory cleaner in the Royal Adelaide Hospital’s dysentry wing – then they must submit an electronic offer on e-JobBuy. You enter the nominal hourly amount you are willing to work for, and if you have the minimum offer and meet all other criteria, you get the job. Basically an auction, albeit with *decreasing* price offers.

    But here is the good bit, if you’re the boss! As these wage offers get submitted within a given job category, for that job type anywhere, a minimum hourly wage is recorded for each hour throughout the day. The boss only has to pay you the minimum wage for any given hour, for that hour; *and*, all other employees currently in that job category! No more sticky wages! You are bidding for *everyone*, isn’t that great!

    Finally, what if people don’t have enough experience for a given job? And what about the fact that $0 per hour is a nominal minimum wage? Well, allow negative wages! That is, someone in need of experience may offer to work for a negative wage; and if they are successful, all other workers receive that minimimum negative hourly wage too! (Just don’t get caught being the would-be-employee who submitted the minimum wage…)

    Of course, we trust bosses not to submit capricious wage offers themselves – that wouldn’t be nice.

    Apologies in advance if I have lowered the tone of the discussion.

  30. Alice
    May 31st, 2009 at 19:16 | #30

    PM says “I know people with the surname Smibert, and there’s the chance this could cause offence.”

    LOL!

  31. Ikonoclast
    May 31st, 2009 at 19:30 | #31

    TerjeP wrote “Ikonoclast – your implicit claim to moral superiority is obnoxious.”

    TerjeP, I do indeed hold the opinion that my social-democratic and economic views are morally and logically superior in many supportable and demonstrable ways to libertarian views. I hold that view without apology.

    I’m sure each one of us (other than psychopaths and sociopaths) believes his or her view set to be morally and logically superior to competing views. Otherwise, we could not hold to our own views with any integrity or strength. In other words, we all carry an implicit claim to moral superiority in the very act of holding personal views.

    Libertarians are free to think I am obnoxious because I turn up my nose at their toxic nostrums for society. If libertarianism “ran” the world, the processes and outcomes would be indistinguishable from anarchy.

  32. May 31st, 2009 at 19:35 | #32

    Ikonoclast – it was your pretence to morally superior motives that I found obnoxious. Not your claim to a morally superior worldview. I take the latter as a given for the reasons you outline above.

  33. May 31st, 2009 at 19:38 | #33

    Donald – why go to such lengths building straw men? Is it merely for mirth or because you can’t handle the debating points that are actually on offer?

  34. Simon
    May 31st, 2009 at 19:42 | #34

    JQ: I was wondering why you didn’t refer to the Jayadev & Bowles (JDE,2006) paper ‘Guard Labor’, or their (2007, Economists’s Voice) comment ‘Garrison America’. I think some of their arguments are probably consistent with yours.

    You also don’t mention the notion (à la Stiglitz and others) of unemployment as a labour discipline device, and imprisonment being a similar labour discipline device for the employed.

    Others, with their commentary on ‘minimum wages’ also seem to be missing arguments about asymmetry of information, incomplete asset/credit markets, and more. Not that I want to get into a debate about the role of minimum wages alone, but simply that the idea is more nuanced than saying ‘without a minimum wage markets will clear’, or as one of the commenters states ‘If you abolish the minimum wage and other price controls then you abolish structural involuntary unemployment.’ This assumes complete markets, no asymmetry of information, and no firms (i.e. one person firms with no internal hierarchies, else Hayek’s criticism of government trying to access information applies equally to multi-person firms- I can’t recall if it was Herbert Simon on this or someone else).

    On some of the other arguments, Truman Bewley offers interesting insight on why underbidding wages doesn’t/wouldn’t work, or at least why employees and employers both find it unacceptable.

  35. Alice
    May 31st, 2009 at 19:59 | #35

    Iknonclast# says
    “If libertarianism “ran” the world, the processes and outcomes would be indistinguishable from anarchy.”

    Well that thought did cross my mind as well Ikono and you are braver than I am to say it. Terje does not appear to like the presence of Government much, (I may be wrong on that) and it seems to me that not enough is offered by libertarians by way of what systems exactly would maintain law and order in a society sans government.

    Perhaps Terje can elighten us and I am being genuine in asking here? Is it the difference between a small government or is no government at all preferable to a libertarian?

    Im starting to feel its a bit like asking Austrians how we correct the non functioning gaming banking monoliths?? (which are so far removed from small friendly libertarian style banks that seem desirable to both Austrians and libertarians?). I didnt feel they had much of a solution to the situation we have now, other than reliance on an ideal situation we clearly dont have.

    Im not really interested in blame ie who or what caused it. Whether its governments ineptitude or greedy high income earning employers / employees gaming and extracting too much surplus. But it would be nice to have some suggestions for libertarian remedies for the high unemployment we have now or the extremely concentrated large and powerful banks we live with now.

    Where really are the structural inhibitors to wage flexibility thus price flexibility – are we all really sure they are at the low income end of the labour force? Im not convinced they are not also at the top.

    I doubt removal of the minimum wage would help – its very low already (although removing it may add to incarceration rates). What difference would it make now? Employers pay the minimum wage or taxpayers pay for greater incarceration and more police? Either way someone pays to avoid criminal activity, someone has to collect the tax, and someone has pay police to police it.

  36. May 31st, 2009 at 20:06 | #36

    Anarchists are a subset of libertarians just as totalitarians are a subset of socialism. ;-)

    I’m not personally an anarchist. However I’d rather be in their company than in the company of totalitarians.

  37. Ikonoclast
    May 31st, 2009 at 20:09 | #37

    TerjeP – OK, I admit in that sense I can get a bit obnoxious. My apologies and I’ll give myself an uppercut.

    The laissez-faire capitalism of the industrial revolution was a kind of libertarianism. If you don’t like reading Engels (“The Condition of the Working Class In England”) then read the novels of a Christian dissenter like Elizabeth Gaskell. I’d suggest “Mary Barton” and “North and South”.

    I am always wary of pure idealist philosophies like libertarianism or free market ideology or utopian socialism. The reason I am wary is that these pure idealist philosophies always propound that a single principle applied to an extreme degree and across the board will solve all our problems.

    The nostrums are “all we need is individual freedom without state interference” or “all we need is free markets” or “all we need is to do away with private property” and all our problems will be solved.

    All of these philosophies leave some part of reality out. Libertarianism leaves out the necessity for the democratic state, free market-ism leaves out the reality of market failure and the need for long term planning whereas utopian socialism leaves out the reality of self-interest and the need for personal incentive.

    The world is complex and messy and not amenable to single purist solutions. That is why a social-democratic public/private mix to the whole shebang works best. It is the most eclectic and pluralist of all systems we have developed thus far and it best enables the deployment of differently directed segments of our total group intelligence to the full range of problems faced by real people in real societies in a real world.

  38. May 31st, 2009 at 21:58 | #38

    Ikonoklast,
    “The laissez-faire capitalism of the industrial revolution was a kind of libertarianism.” Thanks for admitting this – it must have hurt. The improvement of the lot of the working classes over the agrarian poverty during this period was one of the great benefits of freedom. Sure – it was terrible by the standards of today, but that (as you would know) is the wrong comparison. Compare it to anywhere else on the planet at the time and it is chalk and cheese.
    Again, thanks for that.

  39. Alice
    May 31st, 2009 at 22:08 | #39

    36Terje – says
    “I’m not personally an anarchist. However I’d rather be in their company than in the company of totalitarians.”

    LOL Terje! but there must be something agreeable between..

  40. Alice
    May 31st, 2009 at 22:21 | #40

    As Ikono mentioned Engels – I was once seared by reading Engels the great towns (Leeds, Birmingham, Manchester, London) and visions of the splendid wide new streets with large houses and mansions created by the wealth of the industrial revolution, behind which as documented by doctors and public officials, were the alleys and lanes filled with the poor living many to a single room in filthy conditions…there were two sides sides to that great libertarian age of capitalism (the poor surplus labour also colonised a few large countries).

    Now there is an idea of what to do with the unemployed…..transportation? (but where?).

  41. May 31st, 2009 at 22:42 | #41

    I am always wary of pure idealist philosophies like libertarianism or free market ideology or utopian socialism.

    Fair enough. I’m inclined to agree. However I don’t see libertarianism as being about purity. In my book it is mostly# about where you put the onus of proof. I think as individuals we should be free from coercive interference unless there is strong evidence that coercive interference delivers a significant improvement in net utility. Obviously “strong” and “significant” being inevitably somewhat subjective.

    By way of contrast conservatives tend to think we should maintain existing structures unless there is evidence that altering them will deliver a benefit. So whilst I’ll say “show me the evidence that continuing to ban drugs makes things better” a conservative will say “show me the evidence that changing these laws will improve things”. When in doubt conservatives defer to the status quo, whilst libertarians defer to individual freedom. Obviously when the status quo is liberal then conservatives and libertarians tend to be on the same side.

    As far as I can tell social democrats seem to swap around where the onus of proof lies depending on the topic. In other words they can be liberal or conservative depending on the occasion. Perhaps some would call this pragmatic, but to my way of thinking it is a somewhat insincere form of debate and a lazy way of thinking.

    # Obviously in terms of political taxonomy conclusions matter also.

  42. May 31st, 2009 at 22:54 | #42

    Alice – it would be fair to say that a significant number of my fellow travelers do self identify as anarchists. As a political system I think anarchy is quite an elegant theoretical idea but ultimately I think it is too unstable and too prone to totalitarian overthrow.

  43. May 31st, 2009 at 23:01 | #43

    not enough is offered by libertarians by way of what systems exactly would maintain law and order in a society sans government.

    In the scheme of things law and order is a pretty cheap part of what governments do. I think the trouble you have is that without the welfare state, public health services, public education and all the other socialism that you are commited to, you can’t envisage people being mostly good, mostly kind and mostly honest. You probably have a fundamentally different view of human nature.

  44. Jill Rush
    May 31st, 2009 at 23:05 | #44

    Incarceration is a labour market outcome but also an input.

    The current law and order push from South Australia where bikies are being denied basic freedoms when not locked up is a new phenomena.

    The bikies are certainly fearsome and most have spent long periods in incarceration. This is a guess, because the Rann Government has refused to release the details of the first control orders issued recently. It is unlikely that those who have been controlled in this manner don’t have prison sentences. Not in the first instances.

    It is certain that those under control orders will be further incarcerated. As a result of poor education and lack of skills, imprisonment will alternate with criminal behaviour. This will be an alternating cycle. Imprisonment is an unproductive and costly alternative to employment.

    The control orders in SA are a necessity because the jails are all full and the police are unable to control those making money from criminal violence.

    The Premier of South Australia has been trying to export his vision to other parts of the nation, with a degree of success.

    What does an individual who is not allowed to have mates (however unsavoury) around, nor has any skills to offer an employer, do? Only the worst jobs will be available. The toilet cleaner job is not available at any price, even a negative bid, because this gives access to too many secrets or vulnerable people. Many other jobs are not available either because of police checks required for so many jobs. Crime will look attractive just as it did to many who arrived on the First Fleet and later.

    Would this fit the Chicago theory?

    It is ironic that the Premier of South Australia created a Social Inclusion Unit and invited an eminent Catholic Monsignor into the State Cabinet to champion Social Inclusion. Now the jails are full to, Rack ‘em, pack ‘em and stack ‘em capacity.

  45. May 31st, 2009 at 23:15 | #45

    The anti-bikie laws in SA are only good laws when compared to the anti-bikie laws in NSW. The anti-bikie laws in NSW can be used to outlaw almost any group the government deems fit. Including political parties.

  46. Jill Rush
    May 31st, 2009 at 23:26 | #46

    The anti bikie laws in NSW are based around the SA model.

  47. May 31st, 2009 at 23:27 | #47

    Yes but they are still worse. At least the SA laws don’t allow for the banning of political parties. Although that is only a very modest distinction.

  48. jmh
    May 31st, 2009 at 23:37 | #48

    I’m not personally an anarchist. However I’d rather be in their company than in the company of totalitarians.”

    and thus spake the self selected blog-nazi

  49. May 31st, 2009 at 23:54 | #49

    jmh – piss off.

  50. June 1st, 2009 at 00:04 | #50

    Terje,
    Ya gotta love it when the best they can come up with is a Godwin’s law violation.

  51. jmh
    June 1st, 2009 at 01:11 | #51

    “Ya gotta love it when the best they can come up with is a Godwin’s law violation.”

    well yeah, but the Maddow Law had already been violated with the gratuitous use of ‘socialism’ @44

  52. jmh
    June 1st, 2009 at 01:42 | #52

    “I think the trouble you have is that without the welfare state, public health services, public education and all the other socialism that you are commited to, you can’t envisage people being mostly good, mostly kind and mostly honest.”

    I think the trouble you have is that you cannot envisage that the welfare state, public education and all other [social democratic institutions]are an expression and objectification of that which is mostly good, mostly kind and mostly honest about people.

  53. Martin
    June 1st, 2009 at 02:13 | #53

    To say tay-a: IANAE but employment has costs to the employer other than wage costs; also a random employee is not not guaranteed to provide a positive outcome to any employer; so some potential employees may have negative net value to an employer even on zero wages. So employment markets may not clear even with no minimum wages.

  54. nanks
    June 1st, 2009 at 06:24 | #54

    I heard the American author James Ellroy (LA Confidential) being interviewed once. When asked about writing crime fiction he said – I don’t write crime fiction, I write about public policy at the level of implementation.

  55. Alice
    June 1st, 2009 at 07:38 | #55

    Terje – JMH has a point at 53 – if libertarians cannot stand the welfare state, it would seem to suggest they can stand things that are worse (abject poverty, homelessness, crimes of necessity, higher incarceration, less opportunity for assistance with social or family problems caused by poverty, ill educated labour force except if they can pay for education – illiterate children etc). Lots of these problems do not “liberate” people but keep them unliberated, essentially implying that libertarians are willing to trade off less liberty for some against greater liberty for others?

  56. been there
    June 1st, 2009 at 07:48 | #56

    I want to take issue with your interpretation of the Freakanomics story. As Daniel Davies pointed out, the dealers’ eagerness to get jobs as university janitors could easily have been so they could get easy access to students and sell drugs to them. There were also methodological issues with the case study itself. Go check out D-Squared’s review of Freakanomics.

  57. jquiggin
    June 1st, 2009 at 08:17 | #57

    This has also been raised in the CT thread, where a (non-anon) commenter has given some pretty specific detail supporting the general claim that drug dealers are typically very poor.

  58. Monkey’s Uncle
    June 1st, 2009 at 10:59 | #58

    The obvious problem with treating higher incarceration rates as merely a bad labour market outcome is that it completely ignores another variable, the harshness or otherwise of the criminal justice system.

    The reason why there are a lot more people in jail in the US is not that more people commit crimes, it is simply that those who commit crimes are more likely to get tougher sentences. It is not unusual to be jailed for 20 years in the US for a crime that you might otherwise have been jailed for two years in Australia.

  59. Monkey’s Uncle
    June 1st, 2009 at 11:22 | #59

    Ikon says “Welfare is often seen by the extreme right as an unmitigated evil and something which detracts from the incentive to work. Welfare is far from ideal but the alternatives are worse. Don’t forget the workhouses and poor houses of the 19th Century and people starving due to market failure.”

    Ikon, this is a spurious comparison because you are taking social outcomes that occurred in the past when society was less advanced economically or technologically or scientifically, and then using it to make some point about the sort of society that would exist today in the absence of the social policies you advocate.

    One of the biggest mistakes that a lot of people tend to make is to assume that every gain in the human condition is down to political factors, rather than economic, scientific or technological gains that would have occurred anyway.

    The reason why we don’t have to live in the same conditions that people lived in during the 19th century is that the free market has delivered stronger economic growth than other systems.

    And the only reason why the welfare state can ever exist is that the free market generates sufficient economic surpluses to fund it.

  60. Jim Birch
    June 1st, 2009 at 12:11 | #60

    Oh dear, MU! Isn’t it a bit odd to claim that a common mistake is assume that every gain in the human condition is down to political factors, then give a single political factor as the explanation.

    I would have thought that welfare predates the state, e.g., advanced primates exhibit welfare behaviours, so you might as well claim that the only reason the welfare state exists is that welfare is a normal human activity now carried on in a modern state.

    If you want to argue that the free market is sometimes, more often, always, or even necessarily, more efficient at directing the human activity that generates surpluses, that doesn’t require that kind of “only reason” thinking. Hunter-gathering generates “surpluses” that are regularly used for welfare.

  61. June 1st, 2009 at 13:34 | #61

    I think MU @59 has a good point — of course you can say “the fact that people are willing to risk those harsher outcomes proves how bad their alternatives are”, but do people really think that way?

    The lucrative position of “local drug kingpin” has been to some extent created by the “war on drugs”, which is not a policy which many liberals would endorse. Does more frequent arrests of dealers make the prospect of ‘upward mobility’ more appealing and increase the attraction of drugdealing as a career? (I have read Freakonomics, but not recently enough to remember whether it shed any light on that question…)

    The US has victimisation rates about the OECD average (and they probably have a younger population). Is the current incarceration rate needed to achieve that? If not, then the US could improve labour market outcomes, in your terms, by reducing incarceration rates without causing any other harm.

  62. Monkey’s Uncle
    June 1st, 2009 at 13:34 | #62

    “Isn’t it a bit odd to claim that a common mistake is assume that every gain in the human condition is down to political factors, then give a single political factor as the explanation.”

    It may seem that I was crediting the market with everything, but that wasn’t really my intention. My point is that the main drivers of progress in the human condition have been a combination of technological progress, scientific progress, and efficacy of markets.

    In any case, I don’t see such an explanation as being particularly political. The tendency of people to trade with one another is to a large extent an innate part of the human condition. This is evidenced by the fact that trade often continues even when not bound by laws, such as in the underground economy. The only real political issue is generally the extent to which society tries to regulate or restrict trade.

    It is not fair to characterise such a position as being just as political as saying: ‘if we didn’t pass such and such a law, or institute some other social policy, we would still be living in some Dickensian society’.

    Regarding your second paragraph, if looking after others is an innate characteristic of human nature then surely the welfare state is unnecessary or superfluous.

    Regarding your third paragraph, if market economies are not the most efficient or only means of directing economic activity in order to create economic surpluses, I would be interested to know if there are socialist systems that do a better job of directing economic activity and providing for things like good hospitals, schools, universities etc.

    Another problem is that in order to fund government expenditure, a larger proportion of economic activity must take place in the formal traded economy, as this is the only economic activity that generates tax revenues to finance government.

    “that doesn’t require that kind of “only reason” thinking. Hunter-gathering generates “surpluses” that are regularly used for welfare.”

    This confuses the issues somewhat. What I was arguing is that modern market economies seem to be the only economic system capable of producing the surpluses needed to fund the welfare state. Other economic systems may well be capable of supporting alternative measures (non-statist) of looking after people, but this is beside the point I was making.

  63. Monkey’s Uncle
    June 1st, 2009 at 13:49 | #63

    Tom, you raise an important factor in that the US has a younger population structure than the EU. In the US I believe about 13% of the population is aged 65 or over. In many EU countries it is around 18 to 20%. This makes a big difference to many social measurements.

    One is that crime rates tend to fall as the population gets older. So relative to its younger age structure, US crime rates are not particularly high. Indeed, if you look at things like the many riots that occur in Paris, it may well be that younger people in EU countries are less law-abiding than in the US.

    Another is that if a larger percentage of the popuation are past retirement age, it is easier to keep unemployment rates lower even if the economy does not generate many jobs (because only working-age people will ever be classified as unemployed).

  64. TerjeP (say tay-a)
    June 1st, 2009 at 16:10 | #64

    Jim – welfare does predate the state. Providing charity to neighbours in need is a rather natural human response. However it is hard to get hooked on random acts of kindness. And charity isn’t usually extended to neighbours that behave in a destructive or antisocial way or those who seek to make a lifestyle out of it. Charity typically calls for reciprocal good will. The best charity is often a job or some such economic relationship.

    State based welfare has it’s merits. However it is readily over done. Having said that I’d be supportive if we shifted to a modest citizens wage instead of the existing minimum wage and the existing mesh of welfare complexity.

  65. Donald Oats
    June 1st, 2009 at 17:54 | #65

    I think arguing for a minimum wage of $0 is rather simplistic, and arguing for a minimalist welfare system is to ignore some basic problems of human frailty. I am happy enough to accept at least some argument for unwinding what is euphemistically called middle-class welfare.
    Paying people for earning enough to have children and/or buy a first house is a political game, by and large. And it hardly encourages a discipline to save.
    But there are a few categories of people for whom it is hard to see any assistance forthcoming, unless the government provides some form of codified support. For example: anyone who is schizophrenic may risk becoming homeless, unemployed, and unable to pay for the medication that may save them from a short life on the streets. Now in my experience in Sydney (2001-2007) there are plenty of homeless people who are homeless by reason of mental illness alone. If there was no disability pension, and no public medical system, we would have a lot more people in that boat. Far from kindness from strangers, a schizophrenic on the streets in Sydney is liable to get their head kicked in – as has happened. Some such individuals find themselves a bed at her majesty’s, like.

    Any ideas on how we may deal with such individuals in a libertarian-consistent way?

  66. melaleuca
    June 1st, 2009 at 18:18 | #66

    It is certainly noticeable how so many libertarians can work themselves up into a spittle flecked rage about the rights violations associated with a ban on the use of the incandescent light bulb yet happily support extreme forms of state power, like capital punishment.

  67. Alice
    June 1st, 2009 at 18:35 | #67

    66#Donald notes that
    “anyone who is schizophrenic may risk becoming homeless, unemployed, and unable to pay for the medication that may save them from a short life on the streets.”

    This has happened in many cases over the past twenty years since we effectively dismantled mental health care….North Ryde Pshychiatric centre, Rozelle Psyciatric centre, and the other one on Victoria Rd. The treatment of the mentally ill these days is based primarily on some form of short term sedation with drugs like proszac…enough to see them back on the streets to become a revolving door of readmissions (a cost in itself). At least in Bali (dateline recently) relatives of the insane chain them close to home and you may not think thats ideal but it may be better than leaving them without much welfare on the streets. Would libertarians be willing to be on hand at home to look after their insane relatives?

    Thats one aspect of welfare reduction that just says to me – shrinking welfare and taxes has gone too far (and is just too uncivilised).

  68. boconnor
    June 1st, 2009 at 18:39 | #68

    Donald @ 66

    Excellent post – cogent reasons for a social welfare system.

  69. nanks
    June 1st, 2009 at 19:02 | #69

    re donald @66 – a few years back a study in England showed that most (ie around the 90% mark) of homeless people suffered mental illness and/or congnitive impariment of some type. In other words, “homeless and disabled” is the norm.
    Homeless is typically not a lifestyle choice.

  70. nanks
    June 1st, 2009 at 19:06 | #70

    a further point – one of the problems of libertarians is that they believe in ‘free will’ and free will forms a fundamental basis of their philosophy. There is no empirical evidence for free will and plenty against (search for automaticity as a starter if interested). Free will, in my view, is a corrosive concept that does no-one any good and many a great deal of harm – particularly those of limited means. The criminal justice system, for example, is distorted in the most negative way by the idea that people are in a moral sense responsible for their actions.

  71. Alice
    June 1st, 2009 at 19:57 | #71

    71# Nanks – I think you are referring to the term
    “the deserving poor”.

  72. June 1st, 2009 at 20:26 | #72

    Re Donald@66 – unfortunately people with schizophrenia have a higher risk of incarceration as well

  73. TerjeP (say tay-a)
    June 1st, 2009 at 21:58 | #73

    Nanks – free will isn’t really relevant. If you think it is then you ought to say how.

    Donald – The vast majority of welfare is not for the mentally ill or the severly disabled. The same is true for the vast majority of health care expenditure.

  74. nanks
    June 1st, 2009 at 22:51 | #74

    @74 TerjeP – how do you imagine people agree upon a wage outcome in the absence of legislated boundaries?

  75. Ubiquity
    June 1st, 2009 at 22:52 | #75

    Nanks @71

    So a “bad guy” is not responsible for his actions, because he is not responsible for who he is and so he shouldn’t be “pulled into line” but provided with an abundance of welfare.

    “Free will” is not a reality for the fatalistic/ deterministic types but very real to those libertarian types. There is no meeting of the minds here.

    I think the success of private charities are a good example of free will.

  76. nanks
    June 1st, 2009 at 23:11 | #76

    @ Ubiquity #76 – I was specifically referring to moral responsibility – with the implicit commitment to punishment that seems to entail. There is no need at all to invoke ideas of punishment when deciding someone’s actions are undesirable and should be prevented.
    I can’t see how provision of welfare fits in, or are you saying people who do bad things should be killed – as imprisonment/restricted movement is a form of welfare?
    re meeting of minds – I agree. The evidence for determinism is overwhelming, the feeling that one has free will is compelling.

  77. TerjeP (say tay-a)
    June 1st, 2009 at 23:16 | #77

    @74 TerjeP – how do you imagine people agree upon a wage outcome in the absence of legislated boundaries?

    What has this got to do with free will?

    Why wouldn’t common law boundaries be sufficient?

  78. nanks
    June 1st, 2009 at 23:23 | #78

    But how do they agree on a specific wage? – Say under your system, where there is little or no State involvement and maybe even a negative wage outcome is possible – How do you think the specific outcome is arrived at between applicant and employer without invoking any idea of choice?

  79. SJ
    June 1st, 2009 at 23:42 | #79

    Terje’s argument is complete and utter rubbish.

    Terje doesn’t want a “minimum wage”, he wants a “modest citizens wage”.

    It’s typical nutcase talk. He uses a term that is superficially the same as “minimum wage”, but has a different and opposite meaning that’s only known to his own inner circle of right-thinking nutcases.

  80. June 1st, 2009 at 23:48 | #80

    Great post John.

  81. nanks
    June 1st, 2009 at 23:49 | #81

    I don’t mind TerjeP’s idea – as an idea to consider – that social revenue should fund a minimum wage on top of which people engage in activities that may or may not pay even more.
    Where it falls down – as I see it – is in the lack of any mechanism to prevent the aggregation and accumulation of power/wealth, the consequences of which will be inequity and misery.

  82. Ubiquity
    June 2nd, 2009 at 00:36 | #82

    #@77 Nanks

    What is invoked by determinism is that responsibility never lies with those that committed an undesirable act. This undermines the integrity of the those laws that should be applied equally to all of us, and are there to protect us. In fact the determistic view tends to water down the laws that manage our society. The inevitable result is that the state and its experts will get to decide to who is bad and who is good enough to get welfare. Libertarians have a big problem with this.

    The provison of welfare by the state takes away the responsibility of the individuals for there actions and assumes the individual has no capacity or need to reason. Maybe a good idea in the deterministic dimension.

    I thought private charities is a good example of welfare by free will.

    And so the evidence for determinism isn’t worth acknowledgement when it implies our brain is independent of our actions. The fact that the heart muscle operates spontaneously is not sufficient empirical evidence to refute the above explanation. It was the recognition of free will and the capacity to reason that took us out of the dark ages. Humans realised that there fate was in there own hands not in the hands of goblins and witches.

  83. nanks
    June 2nd, 2009 at 06:39 | #83

    @83 Ubiquity – don’t want to get into too long a rave, but determinism doesn’t imply disconnection between brain and action – determinism requires and provides the best explanation of that connection – via cognitive neuroscience and other disciplines.
    ‘Reason’ is complex – what do you mean by reason and how does ‘reason’ take place? What are the prior conditions if not determined? When a choice occurs who makes it and how was it made without prior condition? In what sense is an individual responsible for their own ontogeny and environment? Or are you saying that the person exists prior to and/or independent from their development etc.
    A deterministic view does not imply welfare or state structure.

  84. Donald Oats
    June 2nd, 2009 at 18:53 | #84

    Re#74 Terje, My point is that this is a category of person for whom a longterm commitment of care is essential; then there are those with quite profound mental illness for whom care simply must be specialised. While a small government footprint might be a nice guiding principle, any realistic system needs to at least pose a solution for dealing with people who find themselves in this category.

  85. Alice
    June 2nd, 2009 at 19:31 | #85

    85# Donald and Terje.

    Ill throw a spanner in the works here and say a small government may be someone’s idea of a guilding principle….just not mine. Im certainly no totalitarian either Terje so dont accuse me of that!

    I think we have taken this whole idea of small government too far already. Vital infrastructure is not being attended to. The mentally ill have effectively been left to the streets, hospitals are in decay, public education systems falling apart, trains at capacity, ferries sunk, roads are at congestion point (a cost on everyone and a pollution cost) and the wealthy have been given large tax reductions, still avoid tax, and receive family payments or other lurks they dont need.

    Its gotten ridiculous, inequitable and unfair. Im no fan of government committees of middle/ upper class politicians or bureacrats who pay themselves exorbitantly and rort expenses either, but the mess that surrounds us now is the product of people who seem to believe we can all get away with few taxes and tiny governments.

    Its making a mess but it also shows a lack of social responsibility, a lack of “charitable free will” as someone mentioned, and the desire for as much individual greed as possible. If its good enough to donate to a private charity – and it clearly isnt for most or we would have more of them – then its good enough to pay taxes for infrastructure and social welfare.

    All I see is the selfishness of libertarianism with its “small governments” and “tiny taxes” views. Predicated on a narrow self centred distinctly uncharitable stand.

    Malcolm Turnbull wants a flat tax as well (no progressiveness in the tax system) – the greed and selfishness of the Coalition never ends.

  86. June 2nd, 2009 at 20:35 | #86

    I think we have taken this whole idea of small government too far already.

    Alice this is rubbish. We have not taken the idea anywhere let alone too far. By almost any measure, be it the number of laws, the amount of spending, the amount of taxation there is no notable point in the last 100 years where the government has done anything other than get bigger and bigger and bigger. It is one thing to be against smaller government but quite dishonest to suggest that we have tried it.

  87. Alice
    June 2nd, 2009 at 21:27 | #87

    87# Terje
    There are hardly any more employees than twenty years ago. What you suggest is rubbish.

    The population that use government services has grown and the state of infrastructure needs to be maintained at least to pretend we are still worthy of being considered an “advanced nation.”
    You really wouldnt think so sometimes.
    I really am over the people that want to push the lower taxes, lower taxes line!

  88. Monkey’s Uncle
    June 2nd, 2009 at 22:21 | #88

    Alice, I am not altogether sure whether you are arguing that the size of government has shrunk or that it simply hasn’t expanded fast enough in size to meet increasing needs.

    In any case, the notion that Australia today has small government by historical standards is rubbish.

    Consider: before the Whitlam government came to office Australia had no system of universal health insurance, little funding of tertiary education, little or no public funding of childcare, lower levels of public sector employment, and a far lower percentage of the population relying on government income support. Despite that, society seemed to function as well as now all things considered.

    Right now, we don’t have anything close to “small government” by historical standards. But more importantly, even when government was actually smaller, it didn’t generally produce the kind of disastrous consequences that you insist are the result of small government.

  89. Donald Oats
    June 3rd, 2009 at 00:11 | #89

    Re#89: Circumstances have changed considerably since the late 60′s/early 70′s.

    Pre-Whitlam society had little or no funding of childcare because the wife was the default carer. The census response by married women was “home-duties”; a few managed to remain employed after marriage but that wasn’t the social expectation. A family could purchase a house solely on the single income. I think I’m right in saying that only 55,000 university student places existed prior to the introduction of TEAS by Gough Whitlam (1973, IIRC). Oh, and unemployment was looow! By 1982/1983 it was running at around 10%, a result that cost the Liberals (and a much younger John Howard, as treasurer) the election.

    Since then there have been some fairly obvious social changes, and correspondingly necessary adaptations by government, including significant policy shifts.

    Given all this, is it really a fair comparison of government sizes pre-Whitlam and government now?

  90. Alice
    June 3rd, 2009 at 10:13 | #90

    90# Donald
    I agree – and as for policy direction post 1970s this country has become a snakepit of tightwads!!

    Its all about “me”, looking after oneself, not giving a stuff about welfare, the unemployed, the disabled or the mentally ill or public infrastructure…to the extent of even whinging and lobbying about how much governments spend on ANYTHING at all…in fact wanting a stripped down government because it will save the “me, myself and Is out there a few more cents of tax.”

    The wealthy lobbyists are on the bandwagon at every opportrunity they get via the media to castigate government spending and attempt to grab back the tax pot. Even our deficit is a piddlingly small deficit compared to every other OECD country.

    A selfish attitude has been in the ascendancy for some decades now. Obsession with materialism, and the attitude that the poor are poor because they deserve to be poor and the expectation that taxes are collected for the sole purpose of giving it all back to people who dont need it.

    Australia these days? – Just a nation of nasty tightwads.

  91. Monkey’s Uncle
    June 3rd, 2009 at 13:35 | #91

    Donald, if you want to argue that because of social changes we need bigger government today than in the past, then that is a different point to what I was responding to.

    I was merely responding to Alice’s claim that Australia has gone too far in the direction of promoting small government. Compared to the past, Australia has nothing like small government today.

    I don’t believe that the growth of government is entirely due to changes in society and its needs. It is partly driven by a shift in culture and attitudes. Today people have been conditioned to believe that it is the government’s responsibility to look after people and solve every problem. In the past, people didn’t really have that attitude so much and accepted that it was their responsibility to look after themselves and their families.

  92. Alice
    June 3rd, 2009 at 14:13 | #92

    92# MU says

    “Today people have been conditioned to believe that it is the government’s responsibility to look after people and solve every problem.”

    Nonsense Monkeys Uncle. People should be able to expect that the country doesnt fall into a stripped down malfunctioning infrastructure basket case. Thats not “wanting the government to look after them”.

    Since the 1970s (the rise of the selfish tightwads Ill call it) there has been review after review of the public sector with the purpose of reductions. In fact I wouldnt mind betting JH started all of it..

    Here is a start….

    “From the late 1970s, increased government emphasis was placed on maintaining strict control over the size of the public service. In 1980 the Prime Minister announced a Review of the Functions of Government and of Public Service Staffing Levels (Review of Commonwealth Functions-RCF) with the explicit aim of achieving smaller government by eliminating what the government saw as waste, duplication and unnecessary costs.”

    http://www.apsc.gov.au/about/exppsreform5.htm

    Public sector reform has gone way too far and I would suggest, with…. the explicit aim of allowing the tightwads to keep their taxes and beggar the infrastructure and everyone else.

  93. June 3rd, 2009 at 15:10 | #93

    Alice, correct me if I’m wrong, but I recall you mentioning that you teach economics. Would you mind telling me where?

  94. Alice
    June 3rd, 2009 at 15:12 | #94

    Public sector employment has
    fallen by 80,000 jobs since 1987 (despite population increases and the now bad unemployment situation). Thats criminal. Its also more than half of public sector employment. Those people spent money and paid taxes. Every public asset that could be found anywhere has been sold (a hell of a lot under you know who again – JH – a one man wrecking yard).

    Thats criminal negligence. Many of these public assets were returning profitable income streams to the government and providing good services (and jobs).

    Public sector debt until the recent piddling deficit by OECD standards (Australia the only G7 Country to have a negative net debt).”Since 1970-71, net debt has averaged 5.7 per cent of GDP, reaching a peak of 18.5 per cent in 1995-96, and a low of -3.8 per cent of GDP in 2007-08.”

    Just in case Terje thinks 18.5% is too high it pays to remember that its been a lot higher in the past like between 1920 and 1942 it was over 40% – and what did that help give us?

    Im thinking the post war boom.

    The tightwads that operate as if the government has the cholera and cant act as stimulus in its own right (let alone maintain, build and run infrastructure that is adequate for everyone else’s needs to invest etc) are just losing it.

    Im damn sure there are conservatives in the Coalition who think the party has been taken over by nutcases and wonder why we cant operate a few trains on time without carriages that look as overcrowded and as dirty as the Bombay express or why our hospitals look almost decrepit and they cant get hold of a dressing pack.

    Tax reductions for liberalist government hating misers and the inequitable tax refunds given to the wealthy will not (in a million years) bring us the rushing queue of private sector operators who are willing and able to build us an underground metro in Sydney, yet someone needs to get started on it (instead of scrabbling for stamp duties from packed in units on the same congested roads).

    http://www.treasury.gov.au/documents/1496/PDF/01_Debt.pdf

    Some people have really lost it.

  95. Alice
    June 3rd, 2009 at 15:20 | #95

    94# Jarrah? – are you trying to ask me on a date? Thats very sweet.

  96. June 3rd, 2009 at 15:21 | #96

    Sorry, Alice – I’m married.

    I just wanted to know what institution to avoid :)

  97. Alice
    June 3rd, 2009 at 15:47 | #97

    Thought so Jarrah (married)…how disappointing!

  98. Alice
    June 3rd, 2009 at 16:35 | #98

    re 99# Trojan alert on above link people.

  99. jquiggin
    June 3rd, 2009 at 17:10 | #99

    I deleted numerous trojans, but I’ll ask everyone to move discussion to the Monday Message Board, as I’m going to have to close comments here.

Comments are closed.