Another section of my book-in-progress, this time on the implications of trickle-down. I’m getting lots out of the comments, even if I don’t respond to everything, so please keep them coming.
One thing that would be really useful to me is references to publications (probably popular, rather than journal articles) by prominent academic economists that clearly espouse some of the implications of trickle-down discussed here. More than most of the ideas I’m criticising, trickle-down economics tends to be a background assumption rather than something which comes out into the open, and I want to avoid the suggestion that I’m attacking a straw zombie here.
Refuted doctrines
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Implications
…
Defenders of the trickle-down hypothesis frequently employ what my Crooked Tmber co-blogger John Holbo calls the
‘the two-step of terrific triviality’. Say something that is ambiguous between something so strong it is absurd and so weak that it would be absurd even to mention it. When attacked, hop from foot to foot as necessary, keeping a serious expression on your face.
The self-evidently weak version of the trickle-down theory starts with the observation that we all benefit, in all kinds of ways, from living in an advanced industrial society, with access to modern medical care, consumer goods, the Internet and so on. Stretched widely enough, the term ‘capitalism’ includes all advanced industrial societies, from Scandinavian social democracies to the Hong Kong version of laissez-faire. So, in this sense, the benefits of capitalism have trickled down to everyone.
The strong version of the claim is obtained by shifting the meaning of ‘capitalism’ to mean ‘the free-market version of capitalism favored by market liberals’. Relatively few of the benefits mentioned above can be traced directly to this form of capitalism. Advances in medical care have come mostly from publicly-funded research, and from innovations developed in the public health sector. The contributions of for-profit pharmaceutical companies have been modest by comparison. SImilarly, the Internet was developed by the publicly-funded university sector, and even now the most exciting developments are non-profit innovations like Wikipedia.
The crucial question is not whether technological progress and economic development yields benefits to everyone (clearly it does, at least in material terms), but whether market liberal policies generate more such progress than more egalitarian alternatives, so much more that everyone is better off in the end. It is this strong claim that was made repeatedly during the era of market triumphalism in the 1990s, and repeated, though with somewhat less conviction, through the 2000s.
The growth in US inequality during the Great Moderation was undeniable (though that didn’t stop some commentators and thinktanks trying to deny it). So, optimistic assessments of economic performance during the Great Moderation appeared to support the claim that rising inequality must be good for, or at least consistent with, economic growth that would ultimately benefit everybody.
Now, in the wake of the global financial crisis, this claim can be seen to be unambiguously false.
#
Income, inequality and taxation
The most obvious implication of the trickle-down hypothesis is that inequality in market incomes is not only harmless, but positively desirable, producing benefits for everyone in the long run. The general idea is that, the more highly owners of capital and highly-skilled managers are rewarded, the more productive they will be. This will lead both to the provision of goods and services at lower cost and to higher demand for the services of less-skilled workers who will therefore earn higher wages.
In the abstract language of welfare economics, the central implication of the trickle down hypothesis is that policy should be aimed at promoting efficiency, rather than equity since, in the long run, equity will take care of itself. Put in terms of a more homely metaphor, we should focus on making the pie bigger, rather than sharing it out more equally.
In reality, things are not that simple. It is easy to suggest that tax and other policies should apply neutrally to all sectors of the economy, but harder to define how this should actually work. It might seem that a ‘flat’ tax system in which all forms of income are taxed at a low, uniform rate would satisfy the efficiency criterion. But advocates of ‘trickle down’ have arguments to suggest that income from capital should not be taxed at all.
Going further, market liberals have claimed that, since everyone benefits from many of the services provided by government, the most efficient and equitable form of taxation is a poll tax [1]. Such a policy was in fact introduced by the Thatcher government in the UK to finance local government services, but was abandoned in the face of massive protests and widespread rioting.
Once we turn from theoretical policy debate o the details of design, implementation and enforcement, the well-off invariably do better than the poor, while the rich do best of all. This was true during the postwar Great Compression – although the system appeared steeply progressive, the use of deductions, loopholes and tax minimisation schemes mean that it was, at best, only moderately progressive. Under the systems in force since the 1980s, which are only marginally progressive in their design, the actual outcome has been that upper income earners probably pay a smaller proportion of their income in tax than the population as a whole.
The absence of substantial progressivity in the tax system is obscured by the focus, in the US and elsewhere on the fact that high income earners (almost by definition) pay the bulk of income tax. A good deal of the material appearing on this topic in the Wall Street Journal and elsewhere gives the impression that income tax is the only tax in the system. In reality, income tax is not even the sole tax imposed on income – most countries, including the US, levy payroll taxes which fall on labour income. Unlike the progressive income tax, which does indeed fall most heavily on high income earners, payroll taxes are regressive, falling primarily on wage employees.
In most taxation systems, capital gains are accorded concessional treatment or not taxed at all. Unsurprisingly, a large share of capital income is taken in the form of capital gains, moving the tax system closer to the ‘trickle-down’ ideal where all taxes fall directly, or indirectly, on wage-earners.
Moreover, taxes on income and wealth only account for about half of government revenue in most tax systems. Consumption taxes typically make up about half of all government revenue, and these taxes are regressive. That is, those on low incomes typically pay a higher proportion of those incomes in consumption taxes than do those on high incomes. There are a number of reasons for this. Low income earners don’t generally save very much, so the ratio of consumption to income is higher for these groups. Taxes on items such as tobacco, alcohol, and gambling are levied at very high rates, and these items tend to make up a larger share of the expenditure of the poor (though absolute expenditure is higher only for tobacco).
Finally, there is tax avoidance and minimisation. A vast industry of lawyers, accountants, money-launderers and other agents exists solely to ensure that no one with sufficient means should pay any more tax than the minimum they are obliged to pay under the most creative possible interpretation of the law, and that those who don’t wish to pay even this much should be free to make this choice without any adverse consequences.
In summary, no matter how favorably the well-off are treated, there will always be arguments to suggest that they should receive even better treatment. Trickle-down theory offers no limit to the extent to which the burdens of taxation and economic risk can or should be shifted from the rich to the poor. In the end, according to the trickle-down story, that which is given to the rich will always come back to the rest of us, while that which is given to the poor is gone forever.
#
The role of the financial sector
The financial sector is the crucial test case for trickle-down theory. During the era of market liberalism, incomes in the financial sector rose more rapidly than in any other part of the economy, and played a major role in bidding up the incomes of senior managers as well as those of professionals in related fields such as law and accounting. According to the trickle-down theory, the growth in income accruing to the financial sector benefitted the US population as a whole in three main ways.
First, the facilitation of takeovers, mergers and private buyouts offered the opportunity to increase the efficiency with which capital was used, and the productivity of the economy as a whole.
Second, expanded provision of credit to households allowed higher standards of living to be enjoyed, as households could ride out <a href=”https://johnquiggin.com/index.php/archives/2005/03/24/bankruptcy-again/”>fluctuations in income</a>, bring forward the benefits of future income growth, and draw on the capital gains associated with rising prices for stocks, real estate and other assets.
Finally, there is the classic ‘trickle-down’ effect in which the wealth of the financial sector generates demands for luxury goods and services of all kinds, thereby benefitting workers in general, or at least those in cities with <a href=”http://americancity.org/magazine/article/cities-and-cronyism-quiggin/”>high concentrations of financial centre activity such as London and New York</a>.
The bubble years from the early 1990s to 2007 gave some support to all of these claims. Measured US productivity grew strongly in the 1990s, and moderately in the years after 2000. Household consumption also grew strongly, and inequality in consumption was much less than inequality in income or wealth. And, although income growth was weak for most households, rates of unemployment were low, at least by post-1970 standards for most of this period.
Very little of this is likely to survive the financial crisis. At its peak, the financial sector (finance, insurance and real estate) accounted for around 18 per cent of GDP and a much larger share of GDP growth. With professional and business services included, the total share was over 30 per cent.[1] The finance and business services sector is now contracting, and it is clear that a significant part of the output measured in the bubble years was illusory. Many investments and financial transactions made during this period have already proved disastrous, and many more seem likely to do so in coming years.In the process, the apparent productivity gains generated through the expansion of the financial sector will be lost.
fn1. Here I’m measuring the <a href=”http://www.bea.gov/industry/gpotables/gpo_action.cfm?anon=87680&table_id=23981&format_type=0″>ratio of gross FBS output to gross domestic product</a>, which is the figure most relevant to the argument. The value-added in FRB (which nets out inputs purchased by the FRB sector) is smaller, around 20 per cent, but still indicates a highly financialised economy.
#
Equality of outcome and equality of opportunity
The trickle down hypothesis is closely related to the distinction between equality of outcomes (like life expectancy) and equality of opportunity. This distinction has long been a staple of debates between market liberals and social democrats. Many market liberals argue that, as long as society equalises opportunity, for example by providing good-quality schools for all, it’s not a problem if outcomes are highly unequal. Even though some people may do badly, their children will, it’s claimed, benefit from growing up in a dynamic society where everyone has a chance at the glittering prizes.
Writing in the Wall Street Journal, Wisconsin Republican Paul Ryan attacked President Obama’s first budget saying
In a nutshell, the president’s budget seemingly seeks to replace the American political idea of equalizing opportunity with the European notion of equalizing results.
A year earlier, following his victory in the Republican primary in South Carolina, John McCain said
We can overcome any challenge as long as we keep our courage, and stand by our defense of free markets, low taxes, and small government that have made America the greatest land of opportunity in the world.
As these quotations suggest, the trickle-down hypothesis relies on the claim that equality of opportunity and equality of outcome are not only distinct concepts, but stand in active opposition to each other. By removing disincentives to work such as high tax rates and elaborate social welfare systems, it is claimed, an economic system that tolerates highly unequal outcomes will also provide those at the bottom of the income distribution with the incentives and opportunities to haul themselves up into the middle class and beyond.
The idea that the United States is a ‘land of opportunity’ and ‘the most socially mobile society the world has ever known’ (Scott Norvell, in a piece calling for patriotic consumer spending in the wake of 9/11 http://www.foxnews.com/story/0,2933,34378,00.html) is central to the American national self-image, and the belief that this high social mobility derives from free markets is widely shared.
As we will see, empirical studies of social mobility do not support such beliefs. But most economists are not engaged in studies of social mobility and many of them share these popular assumptions. This is true not only of self-satisfied American economists, promoting the merits of the status quo and calling for more of the same, but also of European critics of the welfare state, who accept the characterization of their own societies as rigid and sclerotic by comparison with the dynamic and flexible United States.
[1] The word ‘poll’ means ‘head’, but is closely associated with voting. Poll taxes are typically levied using electoral registers to define the tax base and can therefore be used to disenfranchise the poor or, as in the US South in the Jim Crow era, blacks
John Quiggin 
@TerjeP (say tay-a)
Plus Terje – the original savings that created the debt is likely sourced offshore anyway. Im non longer interested in the global economy..you make sure your own backyard is tidy first. Thats the best favour any economy can do for the global economy. You dont open the door, allow yourself to be stripped until you have nothing to offer the global economy.
You can call be anti liberal or protectionist if you like…I dont care what you call me. All I see in excessive liberalisation and deregulation is the pursuit of utter stupidity.
@TerjeP (say tay-a)
As well Terje – you totally ignore the fact that these days a large part of the wholesale funds are likely offshore sourced anyway by banks. The “savings” you so proudly speak of may not even be saved here at all. You can call me anti globalisation or you can call me protectionist and I dont care either way but the one thing I do care about is that you clean up and produce in your own backyard first – and thats the best contribution an economy can make to the global economy. There is no point in prematurely globalisaing and letting resources be stripped such that the domestic economy becomes totally reliant on importers for all its basic needs. Recall C + I + G + X – M. Note minus sign.
Just to remind people whoe wear rose coloured glasses about globalisation like yourself –
Australia’s trade deficit tripled to $1.56 billion in July (2009), as imports rose and non-mining exports fell.
Our net foreign debt has doubled in millions of $ since 2000 and then doubled again since 1990. We now owe more than we own and the only reason it isnt worse is because we had some regulation over our banking system (and more capital controls desperately needed on a global scale).
@TerjeP (say tay-a)
Debt levels can be high because of the wholesale insufficiently regulated global credit market Terje. It says nothing whatsoever about what is being produced, earning profits or saved here in Australia. The best we can do for the global economy is to make sure we are producing something here and that our own economy is healthy and it spills over, not to turn the majority of our population into indebted risk averse wage slaves to pay off a mortgage made high by the speculative investments of the rich in houses. I said something similar in my previous post but it was moderated. You need to distinguish between productive and speculative capital Terje.
Freelander@#44 December 14th, 2009 at 16:02
It is not “in essence, wrong” to state that DARPA is a part of the US Department of Defence and was the agency which invented and sponsored the development of the internet. It is the plain truth. (You can verify this fact by using the self-same internet.) The “difficulty” you have “agree[ing] with” this fact is entirely self-inflicted.
To make the matter as clear as possible [shakes head with exasperation] I am saying that DARPA was to the Internet as NASA was to space transport. Both organizations were essentially part of the US military-industrial complex which frequently hiredand university academics for research and private contractors for technical operations.
But no one except the ignorant or willfully obtuse would deny that NASA was the first agency that got man to the moon or that DARPA was the first agency that organized internet infrastructure. Or give internet priority to the several academic and commercial organizations that then hopped onto the bandwagon.
I hope that clears things up for you.
No need to clear things up, as you recognise but seem unwilling to vocalise, it has been clear all along, in essence, wrong.
‘Cooked’ any good meals, lately?
Freelander@#46 December 14th, 2009 at 16:07 said:
Your logic is as bad as yiur general knowledge. The analogy of DARPA to university researchers is not that of a customer (patron) to a commercial vendor (restaurant). It is that of a contractor to several sub-contractors.
Thus the minister orders the Dept of a government contractor (Dept of Main Roads) to build a road which then hires various sub-contractors (Jim the Plumber) to do the specialist work. Undoubtedly the job could not be done, or done as well, without the private sub-contractors.
But equally undoubtedly the credit for the road’s construction and ownership of same goes to the DMR. That is simply how our system of accountability works.
If the internet had been a dud after all that money had been spent on it then DARPA would have carried the can. Just as NASA has now carried the can for the space shuttle fiasco, despite the fact that MIT, Hewlett Packard etc all co-operated on making it.
QED
Alice – are you still trying to say that the rich don’t lend enough? Or have you moved on?
Freelander@#4 December 14th, 2009 at 18:5 said:
You keep insisting that I have conceded the point without going through the formality of actually quoting me chapter or even verse in proof. A bit of a contrast to my own, perhaps overly meticulous, habits in this respect.
This automatically raises the suspicion that your argument is without substance. One that has lurked in my mind from the beginning of this futile exchange.
@TerjeP (say tay-a)
Judging by the brevity of your snark Terje Id say its you who have moved on (^^^)
@TerjeP (say tay-a)
Just for you Terje(^^^) – if it doesnt work Im going to bed early. I have a lot of sulking to do.
@Jack Strocchi
I think you are being simplistic Jack – not that darpa wasn’t involved, of course it was the primary funding agency under the original arpa designation, but movement between academia and (d)arpa make any simple claim that darpa invented the internet misleading. And of course packet switching was independently invented by a number of researchers without any military involvement. Here is a good history
http://www.isoc.org/internet/history/brief.shtml
You also have to take into account the level of militarisation of research funding in the USA – it is difficult to do any research at a hghtech level without some linkage to the military – even neuroscience is often heavily linked. In practice academics manipulate the system to fund interesting projects despite the funding source – as is the case here in Australia post the ‘public servicisation’ of academia.
@Jack Strocchi
As well as getting credit for the store bought meal, your attributing development to some initial sponsorship of a distant precursor is like attributing development of the integrated circuit to Volta simply because he fiddled around with some frogs legs. (And before you say it, yes I know that Volta wasn’t the first to fiddle with frogs legs.)
Otherwise, QED to you too. And why don’t you just admit what you’ve know all along, essential wrong?
@Jack Strocchi
By the way, if I order a meal, giving the cook a general idea of what I want, and the cook cooks it properly, I might still be responsible for asking for something I ultimately didn’t want (“carr[y] the can”), but I still can’t claim that “I cooked the meal”.
Hope that clarifies things for you? …not that they haven’t been clear all along.
Jack’s whole argument is just a ridiculous time-waster.
In an argument about the relative merits of public vs private, John says “Similarly, the Internet was developed by the publicly-funded university sector”. Jack’s retort is that it wasn’t the publicly funded university sector, it was actually the publicly funded defense sector.
Even if Jack was correct, his argument is futile, because it was publicly funded no matter which particular part of the budget it happened to fall under.
In any case, Jack is completely wrong. The US Defense Department’s involvement ended in about 1975. Was there an internet in 1975 Jack? No, there wasn’t.
Let’s do some very simple research, using as Jack suggested, that internet thingy.
Ten years after the end of the Defense Department’s involvement, in 1985, there still wasn’t anything that we’d recognise as the internet. But Jennings decided to re-use a particular protocol that the Defense Department had previously come up with.
To say that the Defense Department is responsible for the internet is akin to saying that Edison is responsible for the internet, because at some point, a decision was made to power the servers using standard mains electricity.
I think it is a bit futile claiming any one entity was “responsible” for the Internet. It is a collaborative outgrowth of many initiatives. The Internet that we know today owes a lot to universities, defence initiatives, private bulletin boards, pornographers, venture capitalists and on the list goes. Ultimately it is a product of the times.
Obviously TCP/IP is fundamental to the Internet that we know. TCP/IP showed an ability to evolve and soon entailed some innovative ideas (eg dynamic window sizing) and has proved very adaptable (eg NAT). However it probably still owes a lot of it’s success to first mover advantage, even though it wasn’t technically the first such protocol.
It isn’t that hard to imagine an alternate reality in which some other layer 3 protocol became dominate. If todays Internet was based on IPX we would be lauding the pioneering work of a private company called Novell and the ideas they borrowed from another private company called Xerox PARC. However success is a fickle thing.
@TerjeP (say tay-a)
“It is a collaborative outgrowth of many initiatives.”
Most of which were public initiatives, which allowed for open and participatory access to (and development of) an important array of decentralised information (much of which is free from intellectual property right claims).
Of course, the private sector is well known for wanting to create and facilitate such outcomes.
I didn’t notice anyone apart from Jack and you actually making this claim.
In your case, you’re trying to set up a strawman argument, that John was wrong to attribute it to the “publicly-funded university sector” as an entity, on the grounds that, without any evidence at all, pornographers and bulletin boards would have done it themselves eventually anyway.
No, it isn’t. Any idiot can imagine alternate realities. It’s better, though, when you’re trying to make claims about the existing reality, that you stick to the existing reality.
Yes, I have to agree with these recent comments. Looks like Jack has gone back to the ‘strocchiverse’, where the rules of logic, and I imagine other things as well, probably don’t work the same way they do in this universe. Always interesting to meet visitors from other worlds. I think we probably didn’t catch him at his best. No doubt disorientated by his trans-dimensional shift.
The first claim was made by John Quiggin in the article.
Jack made a counter claim that credits the US defense department.
My comment applies to the futility of both such claims.
I didn’t say they would have done it themselves. However lots of parties were pulling in the same general direction. Both AOL and MSN were trying to create a large scale network of users before the Internet took off and became dominant in the mid 1990s. Likewise bulletin boards had been around for a long time and there were even movies based on the communities they supported. Ozemail was started to interconnect propriatory email systems and only became an ISP later on. The french had MiniTel. There were private WANs based on IPX. It is speculative to envisage that an alternative would have emerged regardless of TCP/IP however it isn’t without evidence.
Jack, my understanding is that the US Defense Dept is part of the US government and that the seed money given to the universiites for ARPANet therefore constitutes public funding.
Terje, these networks existed but weren’t very good, precisely because the owners tried to make money out of them. The Internet wiped them out or absorbed them.
John – The early Internet also wasn’t very good. Although clearly it’s mass and superior functionality were enough to set it apart.
Ozemail and it’s ilk were making bugg3r all in money until the Internet took off in the early 1990s. The Internet made the likes of Ozemail and AOL huge financial successes. They did not have to join the Internet but it made commercial sense to do so. It was this business prospect than lead them to abandon propriatory models, not the involvement of the government or academia. And the flip side is that the likes of Ozemail and AOL helped turn the Internet into a success. It was a perfect storm with the benefit of network effects drawing all toward the epicentre.
I agree without hesitation that the closed propriatory network business model was a limiting paradigm. However such a paradigm had been shattered previously (without government assistance) in the PC market with the IBM compatible (a standard PC anybody could build). It was mostly just a matter of time before the critical concentration was reached and some spark lit the wick. Perhaps we got there sooner because of government funded infastructure and research but perhaps we missed out or deferred on some other innovation due to the appropriation of private resources and the dead weight of taxes. The benefits of taxation are always more visible than the deficits.
Freelander@#11 December 14th, 2009 at 21:03
The notion that Volta’s electrifying frog experiments are to integrated circuits as APRANET decentralised packet-switching network is to the internet shows Freelander’s usual abysmal understanding of sci-tech, not to mention basic logic. I am not going to bother quoting Freelander and SJ any further as their responses are fact-free and consist of repeated assertions of false or misleading claims.
This exchange could serve as a case study on the pathology of intellectual denial and disingenuity. But I am not a clinical psychologist, merely an amateur historian. I am not qualified to prescribe a treatment for those, such as Freelander and SJ, afflicted by this apparently incurable malady.
I merely present the following brief history of the internet as independent and conclusive proof of my point that the initial development of the internet was indeed conceived, sponsored and administered by US military-industrial agencies, specifically (D)ARPA. The “publicly-funded” and private university sector were employed as sub-contractors to the DoD for almost the entire developmental phase, from 1957 right up until 1973. The key DoD related aspects are bolded to assist the learning-impaired:
Freelander and SJ are ignorant not only specific facts but also of the general trend: massive military threats which “concentrate the mind wonderfully” made many of the key mid 20th C sci-tech breakthroughs. DARPA was to communications and NASA was to transportation: both were part of the US military’s organized attempt to get to the leading edge of sci-tech in moving “bits and its”, to use Wheelers felicitous formulation. The same kind of military sponsorship of high sci-tech was evident in the Second World War, when Bletchley Park cryptographers developed the first computer in order to win the Battle for the Atlantic. And of course the US Army ran the Manhattan Project which developed nuclear energy. Recognize a pattern?
I certainly don’t deny or belittle the great contribution that sub-contracted university academics made to the internet project in its developmental phase. They also did alot of theoretical work independent of military contracting. And from the mid-seventies onwards the individual universities picked up the ball and ran with it on their own. It was only in mid-eighties when the publicly-funded NSF provided central direction and organization. I think that is when Al Gore stepped in.
But if it had not been for the initial military orders, funding and organization the academy on its own would have taken maybe another 10-20 years to get the thing up and running. And today we might still be five years off Netscape. The next time a “pacifist academic” (I’m thinking of Chomsky here) “bitches about military spending” it would do well to keep that in mind.
Why is wikipedia chosen as an example? It jarred a little because to me, it’s mostly famous for its unreliability and interesting internal politics, and I was puzzled for a moment. Unless you feel strongly about Wikipedia specifically, something more general might be better.
jquiggin@#19 December 15th, 2009 at 04:53 said:
Your understanding is broadly correct but tax-payer sources are not at issue here. No one disputes that “public-funding” provided the finance for the internet’s development. Of course ARPA provided much more than “seed money” – it provided the political impetus, technical specifications, access to existing military communications infrastructure, personnel, administration etc.
What is at issue here is the institutional domicile of the agenc(ies) that initially conceived, contracted and administered the project: specifically whether it was the military or the academy.
I am stating as fact that it was the DoD, through DARPA, which provided the basic organization and direction for the initial development of the internet, from the late fifties till the mid-seventies. This followed from the original function of the internet which was to provide the military with a decentralised communications network robust to a Soviet nuclear first strike.
Others insist that it was the university sector which on its own initiative that was responsible for getting the project up and running. In fact the university-driven phase of the internet did not really begin until the mid-eighties through the NSF.
More generally, military necessity is so often the mother of invention. But in the case of the US technology its also true that success has a thousand fathers. In that sense the development of the internet broadly supports a social-democratic “mixed economy” philosophy of government.
@msH
Had the same feeling msH. “wiki development” in general may be better. When it comes to internet wiki encyclopedias, other initiatives (such as the EoE), have (arguably) important and divergent aspects to them.
All these initiatives add up to a breeding ground for development of useful guides on how egalitarian, participatory and democratic frameworks may effectively operate without the profit motive being present. As John notes, they succeed precisely because there is no profit motive. The motivation comes from elsewhere. These “breeding grounds” are, of course, stifled (to a degree) elsewhere.
The politics of wiki encyclopedia development is actually quite a radical and revolutionary departure to predominate political paradigms (in some ways).
The simple and naive idea that the capitalist makes good hardware and the socialist makes good software makes this point more crudely. No doubt, this should give cause for profit motive legislation to be more forcibly applied to the internet. It shouldn’t, of course, give rise to consideration of alternative conclusions.
Licklider is the person most recognised for the initial idea of networked computers – even by the offical darpa history. Clearly DoD goals were important, but as I pointed out before, the dominance of DoD research finding and the fluid movement across academia (and industry) and defence research institutes makes Jack’s position simplistic and misleading. The idea that Licklider at, say BBN, was some sort of bespoke scientist of the puppet masters in the military is ridiculous.
Here is yet another history,
Click to access Internet_Development_200807180909255.pdf
but for a nice novel size read try Waldrop’s book on Licklider “The Dream Machine: J.C.R. Licklider and the Revolution That Made Computing Personal”
Wired had an article on wiki development not long ago.
http://www.wired.com/culture/culturereviews/magazine/17-06/nep_newsocialism?currentPage=all
In my view initatives such as Wikipedia are perfectly compatible with claims that capitalism has given us a lot. The fact that it is non-profit is irrelevant because it is also without government financial support. Wikipedia costs taxpayers nothing. If anything it is a case in point of what can be achieved via civil society without government coercion. It is also notable that Jimmy Wales (founder) is a libertarian. Wikipedia does not support the argument that John is making and he should find an alternate example. If he feels otherwise I’d love to hear the reasoning. And I’d say any such reasoning ought to be in the book if the example is kept.
Jack – I don’t buy your suggestion that the NASA and US defense budget can be justified in terms of spin offs.
@Jack Strocchi
Glad to see you going to such great lengths to acknowledge your errors and the essential correctness of what I and others have been saying. Really, it wasn’t necessary. Have a nice trip back to the Strocchiverse.
nanks@#25 December 15th, 2009 at 08:24
nanks at least is prepared to concede “the dominance of DoD research funding” which is a start. And miles beyond Freelander et al position of “no military research agencies developing the internet to see here, just keep movin’ folks”.
If “Jack’s position” was that “Licklider at, say BBN, was some sort of bespoke scientist of the puppet masters in the military” then this would indeed be “ridiculous”. Unfortunately for nanks “Jack” has never held this position. Absence of evidence is indeed evidence of absence, at least when blog quoting is concerned.
More particularly. Licklider, Cerf and Kahn – the three men who are always mentioned as having priority in the development of netware architecture – all worked directly for (D)ARPA from the early seventies onwards.
It is “misleading” to deny this military agency the foundational role in the development of the internet. As yet another brief history summarizes its pivotal role in both the ARPANET military precursor to the internet and the civilian internet:
The ideological conclusion I draw from all this is non-ideological. Good things can come by top-down or bottom-up methods. From political -> professional -> personal or vice-versa.
Thus the internet initially developed through top-down political direction (can’t get any more command and control than the Pentagon). It then evolved into a more professional operation with universities and private firms getting in on the act, driven by concern for prestige and profit, such as the NSF and Xerox-PARC. Finally it has been driven at a more personal level, driven by bottom-up organizations, such as wikis, blogs and social networking sites.
With the whole thing now tied together by Google which is both top-down AND bottom-up.
This is why I am impatient with ideologues who want insist on a one-size fits all method of social organization. A social-democrat is an ideological tart who has no in-principle objection to any form of social institution so long as it serves worthy human purposes.
Freelander@#29 December 17th, 2009 at 03:30 said:
Freelander seems to subscribe to some kind of Oracular epistemology whereby the mere utterance of some obscure point is sufficient to establish truth. Sybill he ain’t.
@Jack Strocchi
I’m not conceding anything Jack – I used to teach some of this history at UQ and have forgotten most but still maintain a little interest. I’ve known the DoD research linkage for ages. I think you underplay the extent to which early ideas were developed and put forward outside of the military. And I think you overplay the detail of the military input via SAGE etc. Did the military say – we want a system of connected computers or did they say we want a system robust to attack? I think more the latter than the former, but could change my mind if presented with solid evidence.
@Jack Strocchi
No need to apologise and prostrate yourself to me, John, Nanks and others, further. You have humiliated yourself enough. More than enough. Yes, we know you were talking nonsense all along, but we were not greatly offended. Your strings of non sequiturs really have not offended. You are not the first to have deluded themselves that such strings constitute reasoned argument. No offense taken.
When travelling back to the Strocchiverse, remember: “Don’t drink and drive, and stay off the hard drugs”. Bye…
@nanks
Yes. Agreed. The DoD link is common knowledge, and, I imagine, something JQ was also perfectly aware of, which made the strocchilight contribution (and ‘correction’) all the more bizzare. Never mind.
This is ironic Jack. I suggest you try again with the name of another “pacificst academic” you don’t know anything about.
In many books, articles and interviews, Chomsky has often pointed out that US military spending has consistuted the bulk of R&D funding that makes the US technologically competitive. In fact he’s made the same point you are arguing here – that the Internet (and many other advanced technologies) came out of DARPA!
He has also said that his own linguistics work was in an MIT department sponsored by the Pentagon.
Maybe you should actually read Chomsky before making comments like this.
Just to confirm that I was, of course, fully aware of the DARPAnet story but didn’t spend any time on it since it had (as I pointed about) no relevance to the point I was making about public funding.
Speaking of “defence” why does the US $787B fiscal stimulus draw so much ire from the small government crowd yet the estimated $1.3 trillion spent on the Iraq war largely passes without comment?
@sdfc
Because the $1.3 trillion was spent without even a whiff of an intention to do good. As they say “Its the thought that counts.”
@sdfc
“yet the estimated $1.3 trillion spent on the Iraq war largely passes without comment?”
You haven’t been paying attention for the last 6 years then.
A pity Sukrit Sabhlok’s antiwarlibertarian blog is no longer up, because he never shut up about it. Apart from him, there’s Jason Soon, who thinks it’s a white elephant. John Humphreys, who went to the trouble of formulating a cost-benefit analysis in an effort to convince warmongers that it (and the ‘war on terror’) was a tremendous waste of money. There’s plenty of negative comment about the Iraq war’s cost and rationale at the Australian Libertarian Society’s blog. Before the titanic waste of money that was the US bailout and stimulus, the Iraq war was my go-to example of prodigious waste by government.
And that’s just locals off the top of my head, from just a few of the “small government crowd” outposts.
@Jarrah
That’s complete self-serving crap. The libertarian blog Catallaxy is totally dominated by supporters of the Iraq and Afghanistan war and US militaristic objectives. past and current, indeed these people are urgers of extension of US invasion in the Middle East, Pakistan, North Korea, Latin America, etc.
@Jarrah
Well for once Jarrah your small government argument, in the hideous waste that was Iraq may have some credence…but the trouble is people like yourself apply small government to all areas of expenditure, even useful productive positive peace time industries such as health, education and the arts. Thats why the small government argument based of wasteful war expenditures or wasteful bailouts is hard to swallow. You see no good even when government expenditures are devoted to productive useful endeavours.
@Alicia
Im inclined to agree Alicia.
Jason Soon repeatedly states that he thinks the state needs to exist precisely for armies and the police, the only things he deems essential at a governmental level.
Creepy.
@Alicia
Agree – creepy – who manages and oversees the Police? the Army? Ewwww. Another idiot libertarian eeking to impose martial autocracy on us all, Alicia.
seeking
@Alice
We need to strip the faux “libertarian” cover from these sinister at best ideologically captured and tamed robots at every opportunity, Alice.
Genuine libertarians do not support bodies of armed men lording it over the populace and the poorest people in the world. Such people are mercenaries bought and paid for by an oppressive, exploitative state ruling in the interests of the rich and powerful.
@Alicia
“these people are urgers of extension of US invasion in the Middle East, Pakistan, North Korea, Latin America, etc.”
These people? What people? Catallaxy attracts all types, so perhaps you confused aggressive types with the libertarians?
“Jason Soon repeatedly states that he thinks the state needs to exist precisely for armies and the police, the only things he deems essential at a governmental level.”
I don’t want to put too many words in Jason’s mouth, but… that’s what minarchists do – they seek the smallest government possible, which is one that provides the public goods that are worth the cost and no-one else can or will provide. National defence is the classic example, and a justice system is not far behind. What’s creepy about it? Of course, there are many people who believe neither need a government to provide them, but Jason isn’t hardcore like that.
“Genuine libertarians do not support bodies of armed men lording it over the populace and the poorest people in the world. ”
Of course not. And to suggest any kind of libertarians do is a pathetic strawman.
@Alice
“creepy – who manages and oversees the Police? the Army? Ewwww.”
Utterly bizarre. Any libertarian (who stops short of being an anarchist) would have democratic civilian control of the armed forces and police.
“Another idiot libertarian eeking to impose martial autocracy on us all”
You really are a simpleton, aren’t you?
One very important reason why libertarians argue against big government is because concentrated power is an intrinsic problem, be it government or economic. I don’t agree with libertarians on many issues and have had many fights with them but I have made a sincere effort to see their point of view. There is value in the things they say, there is danger is believing that a libertarian philosophy is the way to go. Why? Because their thinking is too often based on faulty assumptions about human behavior and society. Libertarians could do themselves a big favour by refusing to endorse the right and stop ridiculing the left. That is not going to happen.
As for the idea that libertarians will impost a martial autocracy on us all, anyone who believes that simply does not understand the libertarian position which is completely contrary to autocracy.