A bunch of standard measures of US economic wellbeing (median household income, real wages for workers with high school education, educational attainment by age 25 and so on) show strong improvement from 1945 to the early 1970s, followed by stagnation or very slow growth thereafter. A variety of arguments, have been put forward to suggest that the standard statistical measures understate improvements in wages, incomes and so on since the 1970s. Some of these arguments are valid (for example household size has fallen), some not (for example, the fact that we now have more of goods that have become relatively cheaper). Regardless of validity, the main reason people believe these arguments is that, for anyone who was around at the time, it seems implausible that our parents’ living standards in the 1970s were comparable to our own today (assuming roughly similar class positions)
This reasoning is invalid for a reason that should be familiar to those on the conservative side of debates over inequality. The measures mentioned above compare snapshots of incomes at different times. But (as conservatives regularly point out) standards of living are determined mainly by lifetime incomes, not by income in any particular year. Given the pattern described above, lifetime income for someone who worked, say, from 1940 to 1985 was well below that for someone in a similar class position who started work in 1970, just when the long increase in real wages was slowing for most and stopping for some. For every year of their working life, the 1970 starter gets a wage (adjusted for age, education and so on) that’s as high as the maximum attained by the 1940 starter after 30 years of steady growth. Unsurprisingly, that translates into a bigger house, and more of most items that require savings, whether or not their price has risen relative to the CPI.
You can see a similar effect illustrated for education here. Although the proportion of young people completing high school or gaining bachelors degrees reached a plateau in the 1970s, the proportion of the entire population with these qualifications kept on growing into the early 2000s
The two work together. Real wages for high school educated males haven’t risen since 1970, on the standard measures, but a man born in 1950 would not only earn more lifetime income than his father, assuming both had high school education, but would be much more likely to have gained a college degree. By contrast, a man born in 1980 is no more likely than his father to have completed college**, and, assuming high school education, would have similar lifetime earnings.
* Australians of the right cohort will recognise the allusion, otherwise Google should work
** I haven’t checked college completion by gender. I’d guess that if rates are stable overall, those for men must have fallen.
John Quiggin 
Wasn’t there a massive cut in US government spending around 1945?
Terje,
Yes, there was a massive cut in 1945-6 in America.
There was also one in Australia, as in every other country exiting WWII. In Australia, of course, national spending did not decline as much s could be expected because the states did not take back (did not want the opprobrium) of income tax any more, whereas in the Land Of Freedom you could not only pay National and State tax, but also City and Village tax. And still can.
Also wasn’t there an historic change in US monetary policy around 1970. A shift to something more inflation prone.
The facts concerning the Rightwing reaction in the US that has spread around the world and is now reaching its end-point as its inherent contradictions turn toxic, are pretty clear-cut. The US elites allowed a good deal of comparative redistribution to the middle-classes after WW2, mostly because the extreme concentration of wealth was seen as dangerous to economic and social stability. Moreover the ruling Western elites were worried by the spectre of Soviet Communism, which had just defeated the Right’s concerted effort, through German fascism, to destroy it.
Unfortunately, by the 1970s, the global elites no longer were interested in seeing the serfs getting ideas above their station. The reaction was tested in Chile, at the point of a bayonet with Friedmanite Chicago School connivance. The rest is history. The decades of transferring money to the rich led to elite financial speculation that exceeded all restraints, and has imploded, taking us all down. There is no way back this time, because the ecological crises and resource depletion will worsen every tension, and the rise of China and collapse of the West into the quicksand of unpayable debt simply dictate that there will be war between the corrupt and dying West and China. The West knows no other way.
There was a massive explosion in government spending on tertiary education in the US around 1945 due to the GI bill. Maybe it is difficult to ‘graduate’ the last ten percent from high school even at age 29? At least more and more of those ninety percent were still managing to ‘graduate’ by age 25. I suppose the result of no (older) child left behind.
TerjP, I need some clarification. What do you see as the optimal level of government revenue/spending? And what sort of state would you envisage as existing with this level of spending? I’ll give some broad bands with percents of GDP. Warning, country examples are not necessarily indicative or representative of outcomes.
Zero spending – No government – Anarchy?
Less than 10% – Miminalist government – Guarantee of contract law and basic social order?
10% to 20% – Singapore
20% to 30% – Syria, Turkey
30% to 40% – US, Australia
40% to 50% – UK, Germany
Up to 60% – Swedish model – Democratic Socialism
At least 80% – Cuba level – Socialism
Ikonoclast. the Rightist ideal is just enough Government spending to keep the police and prisons going, to keep the rabble in line, to keep the military ‘up to speed’ for the wars of neo-colonial pillage in the poor world, and to ensure that the freeways and airports are maintained in good nick. Of course a good deal of that can be privatised, so the level inexorably falls towards zero, and the neo-feudal Nirvana that is the Right’s idea of Heaven on Earth.
I posted this over at Crooked timber, but no one seemed to notice, so I’ll put it here as well!
Have a look at http://dx.doi.org/10.1787/421373283813
This shows that among 9 OECD countries, the USA was the only country that saw falls in real full-time earnings for males in the bottom half of the earnings distribution between 1980 and 2005.
(The data for Canada only covers the period from 1997 to 2005, although it seems likely that the Canadian labour market is influenced by proximity to the US labour market. )
Now you also get this for some periods in Australia – but not over the whole 25 year period as in the USA. In the UK, earnings inequality widened even more than in the USA – but all deciles of workers had rising real earnings – it is just that they were a lot higher at the top than at the bottom.
Now it is plausible that real wage levels (PPP adjusted) in the USA were higher at the beginning of the period than in other countries.
More of the the total US compensation bill went to healthcare and private pensions in 2005 than in 1980 – although it seems likely to me that much of this went to workers in the top half of the earnings distribution rather than those in the bottom half. and even if the cost of employer-provided pensions went up, the coverage went down.
In contrast, in Australia during this period we got the reintroduction of universal health care and the introduction of compulsory superannuation– both of which were more likely to benefit the lower paid than the better paid.
I think there is also a story in here about joblessness – up until about 2000 the USA kept more people in employment than many other countries. In Australia and the UK and Germany, for example, joblessness is a lot more concentrated among households where no one is in paid work compared to the USA.
So one possible story is that in response to the recessions of the 1970s and early 1980s the more flexible US labour market kept a higher proportion of people employed but at the cost of falling real wages at the bottom.
One of the problems with falling real wages at the bottom is that this puts pressure on your welfare system – how do you have adequate welfare benefits for the poor, when real wages for the low paid are falling for 10 or 15 years or longer? Ultimately you end up “ending welfare as we know it”.
Also of course, this trade-off only works while you maintain high employment among low skilled workers.
Post 2008 the model looks much less attractive. In fact, I’m not sure how you fix it.
New technology gained in WWII had something to do with it. Suddenly everyone could buy vacuum cleaners, washing machines etc. that hadn’t existed before.
“it seems implausible that our parents’ living standards in the 1970s were comparable to our own today (assuming roughly similar class positions)”. Indeed our parents if of a similar class could aspire to much better housing on a single wage. Now houses are either out of reach so a flat must do or the house is a lot further from central amenities.
Ikonoclast – tax in Singapore is still a bit too high for me. I think taxes should fund the basics like the military, local roads, police, judiciary and yes prisons too. There are some things that I think the government should not fund but probably should finance such as education and health. However these should be on the basis of income contingent loans along the lines of HECS with care taken not to unreasonably crowd out the private sector. Schools and hospitals should be private. I wouldn’t want drug prohibition or the death penalty or criminalisation of homosexuality or the religious free speech restrictions found in Singapore so it is only a partial model.
@Mulga Mumblebrain
Yes, this corresponds to the “fisc (or treasury) and coercive apparatus”, a phrase I seem to recall from John Ralston Saul’s writings. The coercive apparatus comprises police, courts and military. JRS used the words with a denigrating turn and asked why the mass of ordinary people would want to limit democratic government to such a rump or minimalist position. JRS’s take on it is that the democratic vote is the only real political power that the mass of average citizens exercise and thus suggests (correctly I think) that the minimalisation of democratic government is equivalent to a reduction in democracy and the democratic freedom of ordinary people to determine the shape of their own society.
Libertarians like TerjP seem to think that individual freedom is or will be maximised under a libertarian political and lassiz-faire market system. Democracy seems to play little part in libertarian thinking and gets mis-categorised as “mob rule”. Libertarians ignore the fact that lassiz-faire systems have invariably resulted in all empirical history in increasing and massive inequalities, oligrachical rule, mass impoverishment of the lower classes, exploitation of women, child labour and so on.
TerjeP has never been able to advance any historical evidence that libertarianism and lassiz-faire market systems lead to anything other than what I have characterised above. The Jack Abramoff CNMI scandal was an example of extreme libertarianism and lassiz-faire principles at work. The natural end-point is total corruption and exploitation of the weak by the strong. TerjeP has never been able to refute the mountain of historical evidence which proves the lamentable end-point of lassiz-faire libertarianism or explain why his brand of libertarianism does not and would not equate to that.
If TerjeP feels I have mis-characterised his form of libertarianism, I would welcome a fully argued essay from TerjeP on this topic as soon as Prof JQ posts a long-post non-nuclear sandpit.
TerjeP, the above might seem like an attack on you. It’s not meant in that way but it is meant as an attack on a certain proportion of your ideas. When I attack ideas I do get vehement but I hope it is clear that it is certain ideas that anathema to me and not the persons who propose them. I hope you agree I am playing the ball (the ideas) and not the man.
Ikonoclast, the Right’s detestation of ‘gummint’ is a thinly disguised hatred of other people. You see, in our confabulated political ideology, ‘democracy’ produces governments that are, allegedly (I know this is bulldust in real life, but we are talking of our self-serving faery story of ‘Western values’ with which we lecture and hector the rest of humanity)the representatives of the ‘popular will’. Yet the Right despises this popular will and demands that government do nothing but protect the rich and their wealth, keep the rabble quiet and invade and loot any of the Untermenschenlands that possess valuable resources that the Western rich covet. The Right’s notion of democracy is ‘One dollar, one vote’, which is more accurately known as plutocracy, and these days they are so confident in their supremacy that they don’t often bother to lie about it.
Ikonoclas, PS ‘libertarians’ only believe in absolute liberty for themselves and their ilk. They insist on policies that reduce most of humanity to the position of serfs or debt-peons and are, therefore, truly terrifying hypocrites as well. Just look at Ayn Rand’s febrile detestation of others. There’s your ‘libertarian’.
Ikonoclast – I’m not phased by you attacking my ideas. That’s what happens on blogs. However don’t expect a long essay here from me. If I write long libertarian essays I tend to publish at the ALS or somewhere similar.
The historical record is reasonably accessible to all that care to dig but if you have reached alternate conclusions to me then either you have been digging somewhere different or else you frame the world differently to me.
I’m here for the conversation but I’m not holding out for any conversions. If you genuinely want to understand the intellectual foundation of libertarianism then it is readily available through various websites. If you want to “prove me wrong” then fine but let’s play the game in conversation size chunks.
Mulga – yes, yes, yes. Libertarians are evil, wicked people. You have made that point. We get it.
Pertaining to ‘libertarians’ and the Right in general, ‘By their deeds shall you know them’. I resteth my case.
Blah, blah, blah.
@Mulga Mumblebrain
Hmmm … 1st person singular in early modern English? I reste
In this it somewhat followed the Germanic form. In Old English this was from the infinitive restan
The -eth suffix was for the third person.
Well, I am going to make a guess and posit that TerjeP is a minarchist libertarian.
“Minarchism (also known as minimal statism,[1] small government, or limited-government libertarianism[2]) is a libertarian capitalist political philosophy which maintains that the state is necessary and that its only legitimate function is the protection of individuals from aggression, theft, breach of contract, and fraud, and the only legitimate governmental institutions are the military, police, courts, and legislatures, with some theories also including prisons.” – Wikipedia.
The libertarian /anti-libertarian debate is hopefully not too off-topic. How we attribute causes and suggest solutions for the post-1970s “stagnation” of key progress indicators must be affected by this debate.
I for one will be happy to write a short essay rebutting the claimed philosophical and empirical bases for economic libertarianism (like minarchism) when JQ opens a topic for long posts. TerjeP can then “play the game” by replying in conversation sized chunks. 🙂
Dear Fran; Sorry. my habitual use of the plural ‘we’, which I suppress for faux egalitarian pretense, has betrayed me. I was saying ‘we resteth..’ inside my head. And, of course, I should include the possessive, so essential in these days of ‘aspirational’ self-obsession. ‘We resteth My Case’.
Terje you wrote ” if you have reached alternate conclusions ………… you frame the world differently to me.”
Is it the case that libertarianism assumes that if one frames the world differently, one is not ‘good enough’ to be a valuable part of the system. It seems to me that libertarians are a very particular type of person – usually male, confident, articulate and competitive. And yet not all humans are like that; some of us have high levels of the brain chemicals that underly anxiety and depression. Some of us have had lives that ensured we were unable to develop self-confidence and some of us actually find freedom in economic security.
There is so much evidence from psychology to clearly show that humans are not equally endowed with the characteristics that ensure we will do well in a free-market system. Clearly people like you will always win over someone like me.
I don’t need an essay, but I’d like to understand a bit how you reconcile the information from neuro-psychology that brain chemistry, which we inherit has a significant effect on our character and our behaviour.
Firstly, I’d like to say thank you to Prof Q for this post – I’ve wondered about the lifetime income, as opposed to a point in time measurement, but not seen it before.
While I can’t speak for TerjeP, that sounds a lot like what Kevin Carson characterises as vulgar libertarianism (though from someone who is, very reasonably, against it rather than a supporter):-
I’ve recently seen a more specific counter, but I can’t find it off hand. It went something like this: every time critics (of anarchism) ask for historical evidence, they brush aside historical evidence that everything that was ever tried wasn’t in fact free markets but was within state sponsored frameworks of privilege, and every time you ask them for historical evidence that (say) democracy and social democracy have ever worked, they switch to a theoretical coverage of an idealised, hypothetical version that was never actually tried – even though they won’t allow that sort of approach to anarchism that, at the very least, has never failed to the same extent in practice (and there have been partial attempts, like Lysander Spooner’s postal system). But I’m probably not doing it justice. Me, I know that what was tried didn’t work but wasn’t really free markets etc., but I fear that anything else – true free markets – might not work either, if only from falling prey to those who rig things (like Lysander Spooner’s postal system); and that makes a true dilemma.
@Donald Oats
There is a further consideration related to the lifetime-income versus point-in-time income comparisons between eras. This relates to the extent of what may be called “in-place” infrastructure and its varying composition with respect to being free public use or user-pays private use infrastructure. The variation in “social wage” (a retrenchment of some aspects since about 1985 in Australia) would play a role in this determination.
“The term ‘social wage’ is used frequently in a journalistic sense, to mean the provision of an ill-defined set of public services which invariably include education and health care. The term does not have widespread currency in international academic circles… Thus the social wage comes to be seen as a form of collective property income, including ‘royalties’ for the use of natural and intangible ‘sovereign’ resources that are not subject to freehold ownership. As such, the social wage constitutes all public expenditure, including an income support system that pays pensions, benefits, subsidies and tax concessions.” – Abstract for ‘The Social Wage as a Definitive Component of Political Parties’ Philosophies’ – 1996 Keith Rankin, Economics Dept., University of Auckland.
“In-place” knowledge and technology levels are also of significance. I’ll leave it to others to unpack the meaning of what I am saying here. (I usually write too much.)
Political philosophy considers the role of government in society. Libertarianism is a particular political philosophy that seeks a minimal role for government. There are different rationale for libertarianism from the natural rights school of thought to utilitarianism. Libertarianism does not assume anything about who should be valuable. The skills of the heart surgeons may be worth more than the skills of the real estate agents or else they may not. This is a matter for individuals to assess. It isn’t something that is defined a priori by libertarianism. Libertarianism does however say how this issue should be decided. It should be decided freely by the individual members of society.
John Quiggin is confident, articulate and competitive. Most people that stand up for a particular political philosophy have these attributes. So whilst it is flattering that you regard libertarians in these terms it is not particularly relevant to the philosophy. Libertarians value individualism and individuals can be calm or anxious, articulate or muddled, confident or nervus, male or female. If you are anxious, muddled and nervus then perhaps I am less likely to regard your views on political philosophy less favorably however there would be plenty of room for you in a libertarian society. It isn’t an exclusive country club.
I don’t see the problem to be honest. We are all different. We have different talents. Some have a lot more talent than others. Some are born with handicaps. Some are born rich and some are born poor. Libertarianism simply says everybody should make choices free from coersion. It does not say they should make choices free from consequences or free from limitations. The fact that our brain chemistry effects our abilities and our state of mind is obvious.
I think you are asking me to rationalise libertarianism on the assumption that it will lead to an awful world were the weak are neglected, the poor starve and sick die. Well that is already the nature of the world but libertarianism is the system most likely to mitigate those issues. So it isn’t hard to rationalise being libertarian. If I believed a libertarian world would be an even more miserable place then naturally I’d stop being a libertarian. However all the evidence suggests to me that the opposite is the case. Libertarianism leads to an uplifting of the human state.
@TerjeP
Why, that’s very nice of you to include everyone else, with a minor caveat on us nervus types. However, you have totally avoided the argument that unfortunately the people do not decide (being all too nervus), and that the inevitable result is an oligarchy or tyranny by the strong. It sounds so wonderful on paper; we can all be free, until one looks in a mirror and remembers what type of being we are.
I’m with the side says collectively let’s build a more just society. Not spending too much of available resource doing that is probably a good idea, but the central theme is collective, not individual.
@Julie Thomas
I think Julie T raises a very important point. The physical, intellectual and psychological make-up of the individual (including general whole-of-person features like robustness, adaptability and endurance plus the specifics of physical, intellectual and emotional range and skills) can and do have an impact on political positioning. Then we can add upbringing and formative experiences (nurture) to genotype and phenotype (nature).
We could argue (and indeed I would argue) that since Australia is a democracy, the current general accomodation between competitive economy aspects and welfare or social wage and social insurance aspects is broadly what the majority of Australian citizens want. They do not want the super-competitive and “pitiless” (my interpretation) society implied by minarchist libertarianism.
I will tell a modern parable about competition if I may. I recall it from watching the Olympics some time ago, maybe about 8 or 12 years ago. A row of hulking male swimmers were lined up for the 50m sprint final . A start ensured where it was clear that several swimmers accurately anticipated the gun and a few did not. One the few was the American favourite (more hulking than the rest) who subsequently failed to place. Some time after the event he complained of not getting a fair start. I guffawed long and loud. Eventually, after getting off the floor, I opined to my wife, “What, he didn’t get a fair start? He was clearly born with the some of the best genes, in the richest country with the best nutrition and the best universities, best technology, best coaching expertise, best competition and he suggests he didn’t get a fair start! He ought to try being born in sub-Saharan Africa.” You see, any proper notion of a fair start begins a long way before the starting blocks, a long way before the ostensible competitive moment.
To return to Julie T’s point, few people are endowed by nature and nurture to be outright winners in any highly competitive enterprise, including economic endeavours in a lassiz faire system. The bulk of average people and even a proportion of above-average people with perhaps above-average compassion, recognise this and rationally seek security through co-operation and a sense of well-being and happiness through socially shared well-being and happiness. One slip on the starting block (one car accident, one death in the family, one bad gene expressed in the phenotype) can blow away all other advantages and put the excelling or potential-to-excel individual right back with (or behind) all the other “mugs” who never win anything major in life’s race. It is more rational to back a balanced cooperative society with some moderate extra reward for hard work and innovation than an excessively competitive society with poverty and misery for most and the riches of Croesus for a very few.
@TerjeP
TerjeP says, “I think you are asking me to rationalise libertarianism on the assumption that it will lead to an awful world were the weak are neglected, the poor starve and sick die. Well that is already the nature of the world but libertarianism is the system most likely to mitigate those issues.”
This goes to the nub of the issue I think. First, you correctly characterise why people like me (left “small-l” liberals or social democrats) oppose liberterianism. We not only assume, we know from examination of the empirical historical record of human societies that this is exactly what does and will happen under the conditions of laissez-faire, especially laissez-faire capitalism.
Second you state that “this” (were the weak are neglected, the poor starve and sick die) is already the nature of the world. This is true in many parts but it is “least true” in wealthy social democracies with a welfare system.
Perhaps you could explain how the impoverished and seriously sick could get any treatment in a minarchist libertarian society which would have a fully private health system, no welfare and clearly no insurance for poor people (whether paid by them or for them).
Yes. That is why libertarianism is a good idea. If most people are good it is folly to hinder most people. And most people are good. Most people are sociable. Most people care about their friends and neighbours. To replace or displace mutalism and community with government and compulsion is destructive. Not only does it rob people of community it destroys the sence of purpose and meaning people get from voluntary community engagement.
Firstly we should acknowledge that a impoverished society can’t solve these problems. So first we need some modest measure of prosperity. This is true even if you regards government programs as the means to solve this problem.
Secondly we should look to working examples from history. John Humphreys has written a good piece on this issue:-
http://johnhumphreys.com.au/2010/07/28/the-rise-fall-of-community-welfare-societies/
Yes, that comment of Terje’s about 1970 got me back to the costs of Vietnam and ways of countries adjusting currencies, standards etc to meet the uncomfortable reality that money was being suctioned off to the ‘States… Actually am a boomer so it has me in mind of an era I’ve lived through, rather like my oldies living through ww2.
I have not the slightest doubt that my betters and their betters saw exponentially harder times with two major world wars and two major depressions in fifty years and it built their characters. In affluent times the landscape has changed. Starvation and disease have not been the problem but the problems of rapid adjustment, as civilisation, “goes where no people before it have gone”.
As to the rest, “civilisation” had better start reflecting a little more carefully on what’s “wise”; for my part , I’m glad I’m getting older. It’s embarrassing to watch the impending train wreck, as politicians, mega resoucers capitalists, press barons and the like, fiercely pull, in daft Gadarene harmony, toward a precipice we catch a glimpse of which we see emerging in North East Africa.
Wake up world!
There is a long tradition of expensive wars leading to a decay of the monetary system. WWI probably worse than most but also the Vietnam war.
TerjeP You say that it isn’t hard for you to rationalise being libertarian and that’s is exactly my point. You, having a certain type of brain, may simply not be able to understandpeople like me. Whereas with my type of brain chemistry, I think I can understand the rationalisation process that you use to be a ‘good’ person and yet be able to ignore all the evidence that a great many human beings will not do well in your system.
Hayek says in Road to Serfdom, p123 “Independence of mind or strength of character are rarely found among those who cannot be confident that they will make their way by their own efforts”. So it seems to me that in this sentence, I am relegated to a non-entity, not worthy of participation or a real explanation of what would happen to people like me who can’t live up to your idea of human nature.
Perhaps the idea of empathy is relevant here. How important do you think it is for humans to be able to understand the ‘other’?
Julie – in your first paragraph you bluntly claim to have more capability than me. So it is odd that you then go on to suggest that my philosophy won’t work for people like you because you have less capability than me. There is an inherent problem with your logic.
As to empathy. I think it is probably one of the key determinants for success in many of the main human endeavors. In business, politics, employment, family life and community work. If your brain state means that you lack this capability then you have my sympathy. Working with other people is pretty much the stuff of life.
It seems like there are two ‘libertarianisms’. One, the Randian type, where the individuals liberated by libertarianism from the deadly coils of government, are free to express their individuality and superiority by piling up loot and power. The rabble, the ‘moochers’ in Rand’s terms, are seen as lesser beings, and, if not up to the task of defending themselves from the self-interested predations of the liberated elect, well, stiff cheese.
Nowl, of course, this sort of libertarianism already exists. The rich, more or less, do as they wish. They crash entire economies through gigantic financial crime and incompetence, and they get their political employees to bale them out, courtesy of the moochers. When the debt thereby incurred comes due to be paid back, the austerity falls on the heads of the poor and the middle-classes, while the tax cuts, obscene, larcenous, wages and kleptomaniacal ‘bonuses’ grow ever more gigantic..
And then there is the ‘nice libertarianism’ where individuals freed from (the actually these days very minimal for the rich) restraints of Government, act all philanthropic and nice, and help one another, and private charity looks after the burgeoning ranks of the poor. It sounds very lovely, rather like a throw-back to Victorian England, or one of Rick Perry’s wet-dreams. It is, of course, cobblers. The only type of libertarianism we are ever likely to see is the one where it is, in fact, money that is liberated, and the wonderful ‘freedom’ enjoyed by human beings as a result will depend, as now, on how much wealth one controls. Your libertarian won’t agree to redistribute wealth to the ‘moochers’-you can bet on that. So, in action, libertarianism amounts to a formula for exacerbated inequality and a descent into neo-feudalism.
It is not empathy that is essential for success in business. It is sincerity, as Groucho Marx observed, ‘In Hollywood sincerity is the key to success-once you can fake that, you’ve got it made’.
@TerjeP
Governments, churches, trade unions and volunteers can provide needed services in any society included so-called impoverished societies. Governments need to ensure that, for example, Catholics do not provide services only to Catholics, or that trade unions are not just open to white workers etc. Government funding of volunteers can do wonders eg the volunteer fire brigades in the 1950’s and today’s volunteer search and rescue teams.
But the real issue is how can the impoverished within a capitalist society, get services. The most efficient way is to tax the rich given the understanding that they have obtained their riches not through their own efforts, but through the power of Capital in society.
The existence of a impoverished strata in society is a result of high accumulated wealth elsewhere, or at least the process this wealth was produced. Even in an impoverished society there is a rich strata of overlords holding onto the missing wealth.
TerjeP are you sure that I ‘bluntly’ claimed to have more capacity than you. I thought I had phrased it as a question about the obvious differences between humans and their capacities in different areas. But there you go; this misunderstanding clearly shows that we all lack insight into our motives and the probability of misunderstanding the other types of human beings is very high. And it’s a great debating technique to miss the point.
Would it have been better if I had ‘cringingly’ claimed that I might be able to see your point of view, while you couldn’t see mine? Did you not take into account my earlier – equally blunt? – claim that you are superior to me in all those qualities that are required for success, in your system.
So it is as Mulga says that it’s just stiff cheese for me if I can’t make it in the system that you understand and love. It’s okay to say that you know. I’m not a fan of politically correctness. But I am interested in the type of brain that is attracted to libertarianism and it seems you are not and as usual in any conversation I have had with libertarians, your interest is only in protecting your system from any criticism.
But to move on to another question I have about libertarianism Perhaps you could comment on this quote from
http://www.salon.com/news/politics/war_room/2011/08/30/lind_libertariansim
A quote from the article claims that “Cato Unbound recently hosted a debate over whether libertarianism is compatible with democracy. Milton Friedman’s grandson Patri concluded that it is not” and that “Democracy is not the answer”.
Sorry about the lack of comma’s. I also am less able in that area.
@TerjeP
This is a reply to points in TerjeP’s last three posts. Overall, I hope this debate (social democracy versus libertarianism) is not considered off-topic. I think it does have a bearing on the topic of the progress or failure to progress living standards since the 1970s according to certain indices.
TerjeP adduced my point (about the enlightened self interest of most people leading them to cooperation rather than raw competition) as evidence for his argument for libertarianism rather than as evidence for my argument for social democratic and secular government. This is an interesting and even audacious manoeuvre on TerjeP’s part. His argument here has an initial appeal but it does not stand up to a fuller scrutiny.
In the first place he says “To replace or displace mutalism and community with government and compulsion is destructive. Not only does it rob people of community it destroys the sence of purpose and meaning people get from voluntary community engagement.”
The wording “government and compulsion” is revealing. The two are placed together with a clear implication that both are not good in any manner or degree. “Compulsion” is clearly bad and by association government (all types and without any qualifier) is assumed to be bad. Indeed government is assumed to be all about compulsion. Yet by his own descriptions and prescriptions, TerjeP is essentially a minarchist libertarian. “Minarchism (also known as minimal statism, small government, or limited-government libertarianism is a libertarian capitalist political philosophy which maintains that the state is necessary and that its only legitimate function is the protection of individuals from aggression, theft, breach of contract, and fraud, and the only legitimate governmental institutions are the military, police, courts, and legislatures, with some theories also including prisons.” – Wikipedia.
TerjeP has specifically included the need for prisons in his posts so TerjeP is essentially a “Full Minarchist Libertarian”. We note that TerjeP essentially rates all government as bad and being about compulsion and then we note he wants to a keep as rump or minimalist government ONLY the “compulsion” that is only the coercive aspects of government namely the military, police and courts (along with the treasury and management by legislature obviously). Am I the only who sees this glaring discrepancy of somehow being against bad, coercive government and then wanting to keep ONLY the coercive apparatus of government?
What TerjeP’s arguments about mutualism leave out are the following truths about democracy and the capitalist system.
1. In a democracy, the denial of a social and economic role for democratic government, beyond the minimalist state, is a denial of the validity of the democratic legitimation of government and its full roles. To repeat an argument I made above, since Australia is a democracy, the current general accomodation between competitive economy aspects and welfare or social wage and social insurance aspects is broadly what the majority of Australian citizens want. This is mutualism expressed as all-inclusive secular democracy.
2. Within a capitalist and corporatist system (the main modern countervailing forces against democracy, equality and liberty), where democratic power is so minimised (by minarchism, neoliberlaism etc.), further power transfers to the elite owners and managers of coporations and corporate capital. This transfer of power is undemocratic and results in a reduction in equality and liberty for the bulk of the population.
3. Most ominously, those resources which a government does not put into the welfare of its citizens (in the broadest sense of the term “welfare”) seem almost inevitably to be put into warfare against its own citizens or the citizens of other nations. Rather than seeing any real shrinkage of the state under minarchist prescriptions, the resources which come out of health, education and welfare will go into the coercive apparatus, into expanding courts, prisons and the military. That which does not go into welfare will go into warfare.
TereP’s link to John Humphrey’s blog about community welfare socieities is essentially a link to a pseudo-history or revisionist history. This glowing description of private, friendly and church charity does not match the historical reality.
If one studies a little Australian social welfare history one sees the true colours of the private and religious charity operaters of the 19th C. Some of these institutions were state subsidised so state money was still involved. These institutions became so blatantly corrupt, tainted by nepotism and abuses that public outcry and newspaper exposes lead to Royal Comissions in the states of Victoria and New South Wales. Thes Royal Comissions lead to reforms which involved the return of the funding to state administration to implement the proper supervision and provision of these services in a non-sectarian and non-paternalistic manner relative to the former gross abuses.*
* Victoria 1862-63 Sturt – The Royal Comission appointed to enquire into the municipalities and chartiable institutions in Victoria.
* Victoria 1870-71 Harker – The Royal Comission appointed to enquire into and report upon the condition and management of the charitable institutions of the colony, and generally into all matters therewith.
* Victoria 1875-76 Langridge – Royal Commission appointed to enquire into the woking of the Friendly Societies statute.
* Victoria 1890 – 91 Zox – Royal Commission on Charitable Institutions
I have lost many of my notes on this research which I undertook privately for a large self-initiated report to my union about Howard’s welfare “reform” circa 1999). Hence I can only give a list of the relevant Victorian Commissions. This list is not to imply that all of these Commissions made adverse or only adverse determinations. However, my point stands that state intervention was required to remove the gross abuses, sectarianism and paternalism of private, church and (possibly**) friendly society charity.
** I am not sure on this point as my memory is hazy about lost research on an old crashed computer.
@Julie Thomas
Great link to a great article! I particularly liked the conclusion;
“The dread of democracy by libertarians and classical liberals is justified. Libertarianism really is incompatible with democracy. Most libertarians have made it clear which of the two they prefer. The only question that remains to be settled is why anyone should pay attention to libertarians.”
The more benign of libertarians are well-meaning but totally impractical and misguided. They have no idea of the severe dangers and tendencies of their philosophies.
Is this the most honest thing Terje has posted?
When logic fails him, …. is this the final resort?
On his tombstone we should place his final epitaph;
“Twas all just blah, blah, blah”
Ikonoclast it was a cute and dismissive ending and I appreciated it, but, there are two reasons I pay attention to libertarians. First because there are people in the coalition like Peter Reith who support ‘work choices’. Some of the comments after the article are great.
http://www.abc.net.au/unleashed/2910768.html
And the second reason is that I think, and this is totally off topic, that they are a fascinating group of people; and as you and Mulga have noticed there are two sub-groups. A friend of mine, doing her PhD on Aspergers’ Syndrome, suggested that they seem to exhibit many of the features of this type of human functioning.
But this is a forum for economics. I just very rudely dropped in when I saw a libertarian acting nice. Sorry TerjeP, but I’m terrified by all the testosterone at Catallxy; it sometimes smells like a teenage boy’s bedroom; all the wanking you know.
libertarian?
the break up of the soviet union was pure libertarianism in action.
everything was “liberated”
and the nomenklatura won.
Julie?
just a thought.
falling into the trap of responding in to the sexualised imagery is easy to do,especially when the innuendos are flying thick and fast
but
the inevitable result can be seen in the labelling of our prime minister as “catmeat”.
(shriek!how dare i.
“if you don’t like it don’t watch it” says the prefect from hell)
and falling standards at the ABC call for a decrease in funding,killing two birds with one stone.(pure morlochian?)
off topic?
thats the point.
turgid(who i’m coming to suspect is eiither a commitee or a artificial (very fox)intelligence program )
specialises in double double unthink.
It seems to me that the aftermath of the 2nd world war produced governments that were a bit egalitarian in nature – in recognition if you like, of the common effort and sacrifice to defeat Germany & Japan. The feeling was perhaps one of cooperation. Returned soldiers were also likely to demand and receive good treatment.
As WW2 recedes into the dim past, the time when we all fought together against a common foe is forgotten, and we’re moving towards “every man for himself” style of thinking. Thinking which will inevitably result in losses to the least able.
What do we do about it?
“the break up of the soviet union was pure libertarianism in action.”
This exemplifies a major part of the perception problem libertarianism has – people ascribe qualities to it that it doesn’t actually possess. Libertarianism is a very particular kind of economic and social philosophy, not any and all permutations of capitalism or ruling class excesses.
The break-up of the USSR was a crony capitalist mafioso takeover in the absence of the rule of law. Not libertarianism.
I think there are now two very real forces at work; one reducing the labour share of the economy from about 1985 to the present and another reducing the total economy’s further potential for growth.
The first force may be called variously capitalism, corporate capitalism, neoliberalism, neoclassical economics, economic rationalism or even minarchist libertarianism as these are various aspects of the total force of owner and managerial elites against workers.
The second force (or lack of force in the case of energy) is constituted by the limits to growth in the form of energetic, material, climate, general biosphere and ecological limits. As these limits to growth begin to bite (and they have begun to bite since 2005 when peak oil occured), problems and conflicts in the political economy will be exacerbated. For example, corporate capital will continue to seek an ever increasing profits share at the expense of the labour share of the economy at the same time as the whole economy is squeezed by absolute energy and material shortages (at worst) or renewable transition costs and higher energy and material costs at best. We are in for a very tough time and it might precipitate the final confrontation of labour and capital.