Wealth and moral character
Jonah Goldberg makes some very good points about human welfare and markets:
I’m no unmitigated fan of Wal-Mart, but it can’t be denied that Wal-Mart—and stores like it—have improved the lives of a lot of low-income families by making life’s necessities, and even its luxuries, affordable. Lightbulbs put a lot of candle makers out of business[*], but lightbulbs also made indoor lighting cheaper, safer, and more widespread. That’s a good trade.
Indeed, the market is the only thing that transforms luxuries into affordable indulgences. A low-end car today has features that the best Mercedes didn’t have a generation ago. Teenagers have phones that are more powerful than the computers that NASA used to put men on the moon. Indeed, even leisure has become democratized.
[…]
One last point. I love the Templeton Foundation and I think they do fantastic work. But questions like “Does the Free Market Erode Moral Character?” bother me a great deal. As opposed to what? Socialism? Socialism certainly erodes moral character. Some of the most alienated, selfish, deracinated people I’ve ever met were people who grew up under the yoke of Communism. Arthur Brooks’s work has definitively shown that large welfare states siphon off philanthropy and erode altruism.
Adam Smith’s case for the free market rested on the fact that it encouraged good character (as Yuval Levinrecently detailed), and I think Smith won that argument a long time ago. A more fruitful question, with deep religious and philosophical implications and precedents, would be “Does wealth erode moral character?” Debating that would still allow for some healthy attacks on the free market, because without free markets, wealth really isn’t something to worry about.
First of all, I know citing Goldberg round these parts will earn me a whole host of angry comments. How dare I quote the man who wrote Liberal Fascism!? He’s a fascist! He’s not very nice! He strawmans liberals!
I admit, I have a fondness for Goldberg which allows me to ignore our many points of disagreement long enough to point out the many smart, sensible things he does write. And this is one of them.
Indeed, this follows up on what I’ve been writing about vis-a-vis markets and the language of markets and so forth, because he – like Jason – asks the important question: what is the alternative to free market capitalism?
I think the important policy debate will become one not between communism and capitalism, but between the sort of high-tax free market society in Western Europe and the American system of much lower taxes, fewer services, etc. This debate must be framed properly. We are not Europe after all, nowhere near as homogenous culturally, and far more populous than any one European democracy. What works there will not work here. But certainly the success of social democracies in Europe requires that some debate between the American and European system be had. Marxism may be dead – and good riddance – but cradle-to-grave nanny statism is alive and kicking, and has largely embraced a relatively free market approach to economic policy.
How morality figures into all of this is a much more difficult question to answer. Does wealth erode our moral character? It certainly can. Does state-provided welfare similarly effect moral character? I imagine it could.
But where should morality figure into policy – especially economic policy? Again, I think these are the debates worth having. As is the question of how to centralize or decentralize power. Simply firing back and forth about markets themselves seems as futile as arguing for or against state-provided safety nets. It’s the how, not the what, that is at question. Markets and social welfare are both here to stay, at least for a good long time.
* for more on candlemakers and protectionism, see this Petition From the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from the Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.
I love me some Bastiat.
Goldberg is smart, and funny. The problem is that he’s a rock solid advocate of republican party “conservatism” so he throws out some absolute knee slapper tropes.
But that doesn’t mean he can’t be smart or funny.
As to the actual meat of your post, yes I agree. I suppose you could say that the Communism vs Capitalism war is over (Communism lost) but the Socialism-Libertarian debate is ongoing.Report
I think the degree of hostility he gets is at least partly because he’s smart and funny in service of Republicanism. Unlike him, I would not assume that this is because liberals assume Republicans can’t be smart or funny, but rather because it makes people like him a bigger threat – thus, we emphasize that he’s an establishment Republican activist and therefore puts out a lot of bullshit.Report
but you know who else was smart….Nazi’s, so that makes jonah a nazi by his “logic.” I think you are mistaking “threat” for snark fuel.Report
I’ve no problem with or thoughts on Goldberg. But is the US really less culturally homogeneous than Europe? When I lived there, it seemed that France at least had a real problem with achieving anything like the cultural homogeneity of the US. Sure, there are lots of immigrants in the states, but they tend to fairly rapidly “become Americans”, while immigrants in France never really “become French”, largely because of cultural snobbery. I didn’t get the feeling it was any different in England, although I’ve heard it’s easy to get the Italians to accept you as ‘one of us’.Report
Interesting, I think it’s certainly a multi-faceted question, to what degree are talking acceptance of mainstream culture versus the strength of all and/or major cultures within a country.
What effect does the discreteness of immigrant communities have versus their assimilation?
I think the big, forward looking question w/r/t Europe is how much of what we perceive to be relative cultural homogeneity is connected to the waxing and waning of nationalism.
Ultimately though, I think it’s our efforts to integrate different cultures that makes cultural heterogeneity politically relevant. I mean China and Russia are both large, diverse countries, but also countries that are less accommodating to minority cultures, which might – thinking aloud here – have the counter-intuitive effect of reducing pressures within the political system by deterring minority political participation. Resulting in a more homogeneous political culture but a strained relationships with marginalized minorities. Whereas, here, precisely because we’ve made political participation so much more rewarding than say extra-political agitation, we’re affected by cultural heterogeneity because we can’t ride/govern roughshod over minority concerns.
The other factor I’d throw out is that our system of government is distinctly less national that European governments, in a way that encourages distinct, relevant political cultures, as opposed to one national, monoculture.Report
Mr. Kain sent an email making the good point that the European welfare state was created prior to the influx of immigrants, which I think it quite true.
What fascinated me about France was that immigrants aren’t pressured to assimilate, which is more “politically correct” I suppose; but it’s also because most natives don’t actually want them to assimilate. The American melting pot might have its moments of hysteria and arrogance, but it’s also really good at incorporating immigrants, eventually.Report
“What fascinated me about France was that immigrants aren’t pressured to assimilate,…..”
In important ways they aren’t allowed to assimilate. The French economy is a neo-feudal clusterf**k and banishes the unwanted into dead-end banlieues.Report
Right. I often joke that the Revolution never ended. It still hasn’t overthrown the Old Regime system of privileged guilds. Becoming a taxi driver, for instance, is pretty much impossible for an outsider.Report
England is pretty accepting of immigrants. Its similar to the US, in that there’s a minimal set of stuff you need to accept and live by and people will treat you as a member of the club. Beyond that you can do what you like, so Pakistanis in England tend to be Pakistani and English, as Mexicans in California tend to be both Mexican and Californian. There difference is that Americans are very clear on what it means to be an American and will tell you at length if you ask them. The Brits, and especially the English, are very vague on what it means to be British. We know, but we can’t really explain, and its somehow rude to even talk about it. That’s why some foreigner’s spend years in the UK without being accepted and others are accepted instantly.Report
That’s a pretty interesting explanation. I have to say that most of my interactions with the English tended to involve them giving me the cold shoulder and me wondering what I might have done. It wasn’t that English reserve- I’m used to that from living in Canada- it was just people inexplicably deciding to ignore me and walk away.Report
I don’t think Americans are that clear on what being American is, in part because our regional identities and heritages are so strong. I imagine it’s a familiarity issue. The less familiar you are with a culture the more monolithic it seems, the more familiar you become with it, the more you see differences within the culture.
This also touches on the tricky difference between external impression and self-identity.
Things to ponder…Report
“You can’t legislate morality.”
This is something that gets thrown out periodically and it always invites someone else saying “of course you can, murder is illegal isn’t it?”, as if the question were one of murder rather than some of the issues touched upon in Lawrence v. Texas.
One of the biggest problems with Liberty/Freedom is that people will use their Liberty/Freedom and then come to the “wrong” decision. Or, worse, come to a socially acceptable decision and then time will pass and then there will be a new socially acceptable decision that precludes the previous one but outliers on the fringe will still be using the old socially acceptable decision and not the new one.
But if you are not free to be wrong, you are not free.
And the socially acceptable parameters of where it’s okay to be wrong keep changing. I have every suspicion that we will have a new “riding the back of the stationwagon” in the next 10 years and stuff that I (you, everybody) grew up doing will be illegal/immoral and something that only someone wicked would even consider.
And then, in the discussion regarding whether the War against Doritos smugglers, someone might say “you can’t legislate morality” and someone else will say “we made murder illegal, didn’t we?”Report
yeah right, i’ve read that before, the world changes therefore something or other about freedom.
Law, even the things just about everybody agrees with, are always intertwined with morality.Report
The law is always intertwined with morality?
Please, for both our sakes, let’s soften this statement somewhat.Report
okay, law and morality are intertwined, there is not one without the other.Report
I guess I’m too much a cultural relativist.
I’d say that law and social mores are intertwined.Report
Both these things can be equally true.Report
Can be ain’t is.
If it’s illegal for black people to own property (as it was), is the law intertwined with morality?
If it’s illegal for gay people in a life partnership situation to appeal to spousal privilege, is that intertwined with morality?
If it’s illegal to grow a plant and smoke it to help with one’s meningitis, is that intertwined with morality?
Is PATRIOT intertwined with morality?
How about that court case going before the SCotUS right now that is discussing whether it’s treason to file a friend of the court brief on behalf of people the government has called “terrorist”?Report
Jaybird, have you been reading H.L.A Hart? (Law as the union of primary and secondary rules) I’m doing a philosophy of law module and we’re basically doing legal positivism and its detractors.Report
Not to my knowledge. I’ve been reading Zen and the Art of Motorcycle Maintenance (again).Report
“You can’t legislate morality.”
Frankly that one bugs me more than it should. Yes you absolutely can legislate morality. What you can’t do is guarantee that the subjects of such legislation will be any more moral than they were before, which is not at all the same thing.Report
I tend to see this phrasing as a fairly clumsy way to say “matters of taste cannot be legislated”. (One of the phrases, much like “I COULD CARE LESS”, that completely misunderstands what it’s actually trying to say.)
Smoking is a matter of taste, not a matter of morality.
Homosexuality is a matter of taste, not a matter of morality.
There’s a thing that we today know is a matter of taste but in ten years will get a whole bunch of earnest people screaming at the top of their lungs that, no, seriously, it’s a matter of morality.
And passing all sorts of laws to legislate matters of taste is something that, seriously, ought to be avoided.
Because you can’t legislate matters of taste.Report
Uh, obviously you can. Sometimes, you maybe even should.
But that’s not the same thing as morality. Morality is how we rationalize it.Report
Sigh. You can make it illegal to drink alcohol but people won’t stop drinking.
You can make it illegal to smoke weed but people won’t stop smoking.
You can make it illegal to commit adultery but people won’t stop gerund.
But you can’t legislate matters of taste.
It’s like saying “the law says stop preferring ice cream”.
When it comes to the inside of your head, the legislature, the courts, the police DO NOT HAVE JURISDICTION.
All they can do is fine you, shoot you, or imprison you.Report
So what about things like governments funding massive de-marketing campaigns like with smoking in Europe and changing the social image of an action like smoking through a combination of regulation and let’s admit what it actually is: propaganda.Report
They totally have the power to do that.
They can use some of the money in tax coffers to do it!Report
In which case I kinda think is effectively legislating morality if a majority of the population agrees to do it.
Or rather, it’s codifying public opinion as the opinion of the state.
I don’t really have a moral opinion about this because I sort of see it as balancing epistemic power between marketers and consumers, but I’m curious what other people think.Report
Sorry, went off on a different rant there and argued against something else entirely that you weren’t saying.
The problem with saying that it’s okay to legislate taste is that it can lead not only to smoking bans in bars but to segregation. In the past, it’s also led to alcohol prohibition and, currently, to the War on Drugs and bans on gay marriage.
Each of these is, I hope, in a very different category than “murder”.
When people talk about “you can’t legislate morality”, they are saying something else entirely… because, of course, you can make it illegal to marry someone your own gender.
It’s trivially easy to do so.Report
Dude, Goldberg? What are you an idiot?Report
Ah … the “Doughy Pantload”Report
Goldberg writes,
Indeed, the market is the only thing that transforms luxuries into affordable indulgences. A low-end car today has features that the best Mercedes didn’t have a generation ago. Teenagers have phones that are more powerful than the computers that NASA used to put men on the moon. Indeed, even leisure has become democratized.
First, I suggest that Pieper would take issue with referring to (low-end) cars and cellular phones as leisure.
More relevant, whether we’re talking about the free market, capitalism, communism, socialism, the nanny state, or any other alternative, ought we really to be celebrating this form of “leisure”? I mean not to suggest that it’s bad that today’s low-end cars have better features than a Mercedes of a generation ago (Sidebar: I’d note that some of these low-end cars, nonetheless, are still pretty low-end.), or that teenagers have cell phones (Well, maybe I do.), but is the transformation of luxuries into affordable material indulgences really the best measure of the morality of an economic system?Report
Okay how about a different metric then? Fewer of our children die early, more of our elderers live longer and more happily, more of our adults live more comfortably and painlessly.Report
Of course that’s a better metric, but still, I say, insufficient. What does it mean to live “more happily”? More adults live more comfortably and painlessly, but are they living well — eudamoniacally, if you will?
I’m not interested in defending socialism/’statism’/and the like, but I certainly think it wise to analyze free-market capitalism more critically than Goldberg tends to — whether they’re good is a matter up for debate (and should be), but alternatives beyond the ‘free-market’, theoretically American-style capitalism–versus–social democracy paradigm exist, as do ‘third ways’ that better combine the two than does actual American-style nanny-statism. I’d throw in a line about Distributism, to which I believe E.D. is sympathetic, but discussing how that possibly could work in America — or even period — requires more than a comment box permits. However, I’d suggest that turning an eye to the ‘ordoliberalism’ of Wilhelm Röpke may offer us an alternative that permits both for improved material conditions and buttresses against the moral decay that both wealth and welfare potentially threaten to bring upon us.Report
That’s very interesting and to be honest a couple of your words, eudamoniacally for instance, flew right over my head. That said I believe I can say with confidence that by virtually any metric of social welfare the markets are doing well.
Falling back to Maslow’s Hierarchy I’d say that the market societies have more/a higher % of people working on the social acceptance and even self actualization levels of the hierarchy and fewer working on the basic needs levels than in any other organized society of comparable size.Report
I’m not so sure Nathan would agree, North, but I at least think market societies are doing rather badly indeed from the point of view of comprehensive human flourishing (isn’t the usual, if equally awkward transliteration “eudaimonistically”?)
And even if it’s true that other systems would be worse, this doesn’t mean we should pretend market systems are doing better than they are. A critic shouldn’t be obliged to propose superior alternatives if he isn’t suggesting that we scrap the current system.Report
(You may be right; I was just shooting in the dark, but yours sounds more accurate, if not any less awkward.)
And I’ll second everything that you just wrote.
(On a personal aside, I recently realized that you’re friends with — or at least know, and are Facebook friends with — Brian Brown, or “Doc Brown” as I prefer to refer to him as.)Report
I guess I follow David but I think I disagree. Doing well or doing badly is a relative term. Are we as humans in these economies doing well? Doing badly? Compared to when? Compared to who?
Maybe I’m being too literal here but I’m seeing comparative flourishing; less people starving; less people dying. Perhaps people say they’re unhappy but aren’t people always going to find ways to be unhappy in the midst of plenty? Facebook drama makes some people unhappy. Does that mean that facebook makes us flourish less? Or am I looking at this from too much of a macro perspective and we’re comparing welfare from say this year to last year?Report
No surprise, I agree with North. Could they be doing a better job? Sure, increasingly China’s mixed economy might be a competitor for resource allocation, who knows?
However, the rise of the global middle class and standards across the North Atlantic over the past 100 years has surpassed anything in the history of mankind. More people are healthier, employed, retain some freedom of expression, and educated, than ever. These are not accomplishments to so casually dismissed because today’s imperfections are more visible than say living standards in 1910.Report
“and has largely embraced a relatively free market approach to economic policy.”
Change “relatively free” to “mixed” and you have it.
Social welfare through the government might not be here as long as you predict. Europe is on the verge of financial collapse and dangerously close to some absolutist form of government. We will likely privatize much of our welfare efforts before we get to the European point. But, then, that is the whole point in the current argument between statism and free markets — which will be necessary to accomplish our goals? This last dance with progressivism might end fairly quickly with a sharp turn to the right.
We are fast moving beyond a moderate compromise between statism and free markets — we’ll soon be forced to make big decisions.Report
Mike, you’re lumping the Scandinavians in with the Gauls, Spanish, Greeks and Italians which strikes me as unfair since the Scandinavian European social welfare states appear to be flourishing with neither economic collapse nor tyranny threatening.Report
Geert, my man. Geert.Report
Geert?Report
http://en.wikipedia.org/wiki/Geert_WildersReport
Hmm so reads as a Dutch Hitchens or something? I guess I’m still missing the point. The Dutch have political arguements over social and economic issues? Are the militiamen proof that the US is on the verge of financial collapse and dangerously close to some absolutist government?Report
If the Militiamen suddenly transformed from being a bunch of fringy wacko nutjobs into the #2 political party in the country, would that mean anything?
It strikes me as being a fairly significant social change in a fairly short period of time.Report
Well so is the GOP collectively loosing their minds but I’m not predicting the end of the country based on it.Report
I’m not predicting the end of Northern Europe.
When you say “neither economic collapse nor tyranny threatening”, I think about Geert.
And not for “economic collapse” reasons.Report
Fair enuff Jay.Report
Europe is too interconnected for small pockets of democratic socialism to survive once parts start collapsing and major changes take place. The small size and the homogeneous nature of small northern European nations have allowed them do fairly well, but they are dependent on protection and economic growth elsewhere around them, and from the US. If they are forced to protect themselves and grow economically to pay for their survival, they will fold quickly — but, then, they would also have to abandon state welfare. Mises showed how small pockets of socialism can survive off capitalist innovation and growth and protection, but if most of the world goes socialist, they become vulnerable to collapse and takeover by ruthless tyrants.Report
“If they are forced to protect themselves and grow economically to pay for their survival, they will fold quickly.”
The extent to which the United States is responsible for European defense is frequently overstated. If the United States spent no money on defense, NATO would still spend far more money than any other military alliance in the world. It would amount to 35% of total world defense spending. And of course if the United States didn’t exist, European nations would presumably spend even more than they already do on defense, which they can certainly afford to do.Report
Well not Greece…Report
Small pockets? Mike we’re talking about all of Northern Europe here. Also you’re leaving out that their economy is actually significantly less regulated than ours is. Just more heavily taxed.Report
Let’s hold off evaluation of Europe as a whole until a few more years have passed. We’ll see how it goes. Yes, our economy is over-regulated, but then I’m not defending our economy — we are on the road to collapse as well. We were able to become a powerful nation to the extent our economy has been free to create wealth, but we’re quickly racking up debt and unpaid mandates to the point of insanity — if we fall, and if Europe unravels, don’t expect much freedom in the world. I somehow doubt that the United Nations is the answer, nor European self-defense.Report
North, my bigger point is that as we all go toward more socialism, the whole world is being put at risk of collapse, due to the economic realities of socialist practices. I’m not a wild-eyed commie-hunter, but socialistic practices have real consequences which can’t be denied. Europe, as well as America, has gone back and forth between free market principles and socialistic practices — the fact, though, is that the ideas of welfare statism are failing big time — we’re all creating a mountain of future promises which can’t be met.Report
Maybe Mike. You’ll not catch me defending socialist economics. By the way, what was your solution to the question of the commons?Report
What was the question, again?Report
Post #5 on this list:
http://www.ordinary-gentlemen.com/2010/03/before-resorting-to-markets/#commentsReport
I start from a position of supporting government that protects the basic rights of citizens. We originally described these as the rights to life, liberty, property and the pursuit of happiness. Just about anything that affects us all, like pollution, falls under the concern for basic rights. If it was determined that certain manufacturers are emitting poisonous gases which could kill, or make sick, many, many people, then no one in their right mind would oppose the restriction of these gases and punishment for those emitting the gas. The question is how this is determined and handled — through the courts, the same as a judge would decide the innocence or guilt of a murderer and what penalty is appropriate to the crime, or through regulation by bureacrats which may or may not be influenced by ideology and politics.
My broader position is not predicated on anti-government ideology, it’s based on whats actually best for society as a whole. If we as a society believe in limited government, then this government should earn its keep by objectively evaluating each externality (positive or negative), public good, free-rider issues, unintended consequences, etc. to determine the best way to proceed — through courts, laws, regulation, government agencies, or through private solutions. I have criticized modern social engineering by technocrats because I think it’s motivated by a statist mindset heavily influenced by ideology and politics — however, I do believe we need very smart people in government to decide the questions related to public goods and externalities, in order to determine if market failure is really failure or if the technocrats merely prefer government solutions based on a statist ideology and desire to enhance State power, or political power for their political party.
We hear a lot of talk about not being political or ideology driven when the left is talking the right, or the right is talking about the left, so let’s take ideology and politics out of the equation and look at these common concerns objectively to determine the best course of action. If private solutions are best, then let’s let the private sector work — if it’s concluded that the market can’t handle some legitimate externalities, or can’t provide public goods that everyone wants and can enjoy, then let’s look at government solutions. But this will require careful, objective, intelligent consideration unafraid of private solutions and reluctant to automatically turn the responsility over to government.
If, however, we as a society believe government always has the solution and the private sector can’t be trusted, we’ll soon enough see how this works long term.Report
To be honest that’s a considerably more moderate libertarian response than I expected but it is consistent. Thank you for clarifying.Report
If it can’t be denied that Wal-Mart makes lives better for consumers, why is it that the people who write these sort of things can’t be brought to accept that Wal-Mart also imposes significant costs on everyone from producers, to rights holders (of products that they’d like to sell at barely break even price points) and everyone in between the supply chain? Surely one can accept that in any resource allocating economy (and until we have anti-matter energy generation and replicators that’s what we’re stuck in) that there will never be an increase in material well being short some cost being borne somewhere else. There are studies that have demonstrated there are significant local government costs associated with Wal-Mart stores (due to the fact that safety nets to need to be expanded for some of its workers) or how Wal-Mart’s supply chain practices do more damage per item sold than the price paid by consumers takes into account.
In effect, I’m asking:
If we’re supposed to admit that markets do make things affordable for people, why the hell do we get called communists, socialists, etc. for insisting that consumers and advocates alike acknowledge that there are massive externalities and information asymmetries that are simply unaccounted for and continue to be unaccounted for. This dialogue is often a one way street, where we’re treated to spectacle after spectacle of how actually big corporations and money making interest tends to make things better for people ™ then sweep away all the hidden costs somewhere else.
Essentially.
Can we stop having discussions of The Wealth of Nations where we ignore the existence of The Theory of Moral Sentiment? And for that matter, discussions of The Prince without Discourses on Livy?
Markets may be a necessary condition for good societies for Adam Smith, but surely they’re not a sufficient one. And we seem to be missing some of the sufficient conditions in our discourse.Report
Very well said. I don’t know if you meant to keep the italics on that last line, but I’m glad you did because it’s a point that needs to be driven home.Report
You won’t get arguements from me Nob. I’m no market fetishist. I’ll go with the revised Churchill position: Market economies are the worst economic system known to man… except for all the other systems that have been tried.
I do believe that non-market entities (governments, NGO’s etc) are necessary to patch the areas where markets fail (externalities, commons) and to prevent the market loosers from falling too low (and yes I accept the cost; that means the market winners can’t go as high). All that said we know that the natural inclination of human organizations and bureaucracies are to grow and self perpetuate. That means that when dealing with entities that are not controlled by market forces (AKA they can’t go bankrupt) our inclination should probably be skeptically set to strive always for a minimizing or reduction of those entities to counteract their natural inclination to grow lest they grow kudzu like over our economy and jam the works up like some of our cousins have Europe appear to be suffering.Report
Nob, that’s a beautiful comment.Report
Part of the problem with hammering out exactly what would also be necessary is that some things that help considerably are not, in themselves, things that we’ve grown to appreciate as Americans.
A huge obstacle to health care reform (or bump in the glorious road or whatever you want to call it) was the whole “undocumented guest” thing. There are a bunch of folks who resent the very idea that “we” pay for health care for “them”. As such, I think that one of the things that would help get a number of people opposed to a robust social safety net get on board with the idea would be cultural homogeneity… to the point where we’d have an Official Language and, yes, that it’d be English.
Note: This is not me endorsing English-as-main-language laws, mind. Hell, I’m not even particularly a fan of cultural homogeneity… but if we want the robust safety net that would (presumably) be one of the necessary (if not sufficient) conditions for a good society, I think that we’d have to look at one of the, I suspect, necessary conditions for a truly Northern-European quality robust safety net on par with, say, Denmark’s or Sweden’s… two countries that you may be surprised to find have “official languages”.
Of course, maybe it’s just a co-incidence that they have language laws.Report
This is provocatively interesting.
Generally the implied effect of the cultural homogeneity as it relates to successful welfare states is that particular and shared cultural values enables programmatic development and success, in the way that cohesive, focused communities and teams can support a shared vision.
The idea that the cohesion itself reduces opposition to shared effort is new – and at that – rather interesting.Report
I split on this critique, on one hand if the we is inclusive of the site’s recurring left-leaning critics, it’s because sometimes the critiques are in fact socialist critiques of capitalism and others because some of the solutions involve transferring more control to public hands.
Were you making the limited point you suggest, such cries would be unfair, but I don’t think you (general and inclusive) “insist that consumers and advocates alike acknowledge that there are massive externalities and information asymmetries that are simply unaccounted for and continue to be unaccounted for,” and then leave it at that.
If we were to analogize this to foreign policy, I think it’d be silly for me to complain(?) that I’m called a warmonger when I’m insisting/making the critique that there are limits to the abilities of soft-power to affect the behaviour of dictators. Chances are when I’m called a warmonger it’s because I follow up that critique by suggesting military action.
So I’m not sure that in a fuller context, the calls are unwarranted. Maybe I missed it but we don’t go slinging around “communist!” (at each other, Cheeks excepted) when someone suggests government action. If one suggests supplanting private means of production with public control, I think it fairly opens them up to the charge of socialism, whether it’s pejorative, I think is a separate question.
That said, I think what the response is to, is over-reading. I say markets do good things, you point to massive externalities and information asymmetries. From here, I think it makes sense to address those failures, the externalities and the information asymmetries. What comes up many times is that the imperfections of the market amount to “market failure! (THE HORROR!)” and solutions that seek to supplant or severely distort the market without actually addressing the initial flaw. To which, I see why the response/rejoinder would be to assert the value of the cost while criticizing the perceived extremity of the proposed solution to what seems like a relatively narrow problem. It’s the same way that pro-welfare state types – I imagine – would feel if someone pointed to logistical imperfections as a call to scrap government services writ-large. It would seem incredulous, out of proportion, and probably provoke a response to the scope of the criticism, which is what I think is going on here/you’re referring to.
Does this make sense?
For an example, if we’re talking energy policy and someone brings up the pernicious effects of energy subsidies like say the fact that we don’t accurately price oil. I think the solution to that is to say, make oil more accurately reflect its price – ala carbon tax – than develop some byzantine cap and trade system that’s equal parts corporate giveaway and obscure, despite being “market based.”
We can price in externalities, we can affect information asymmetryReport
I feel that generally there tends to be a trigger-response on calling someone “statist” both here in a general sense and in the broader context of discussing market failures and the role of regulation. There is an implicit critique in the use of the word, with there being some inherently bad connotation to preferring state intervention in certain areas. I take your point that the solutions proposed can often be fairly criticized as stemming from a socialist (or least Marxian) critique of capitalism, but all too often I find mentioning externalities actually IS the end of all discourse.
I suppose though my greater point is as follows:
Yes, markets tend to accurately reflect the preferences of the populace, but what those preferences are and how they’re arrived at are also subject to manipulation both by state and private entities. The power of marketing and asymmetric information is that private entities have a significant place in determining what public preferences are.
Sure there are limits to marketing and cultural influences on preference, but they’re still there. Moreover these influences determine what sort of people acquire wealth and what sort of business and social practices are generated by the process. I think there’s a general belief that such things aren’t the purvey of anyone and that suggesting that we need to take a look at things like incentives for compensation, marketing regulation, etc. is somehow pernicious and wrong.
That latter thing is where I’m having a bit of a hang-up. I’m not really optimistic enough about human nature to think it’s all just government’s fault that people are greedy and grasping.Report
Hmm…interesting.
I mean my first read on this is that markets are clearinghouses of information but the values of that information have cultural determinants. All things cultural are dialectical.
A lot to think about here but interesting, Nob, very interesting.Report
If Wal-Mart is an exemplar of free-markets, then I am the Queen of Romania.
Wal-Mart only exists, and can only provide the low prices that it does, because of significant government intervention in favor of Wal-Mart and against local small businesses.
Consider–when a Wal-Mart moves in, the local government generally uses the power of eminent domain in order to obtain a big enough lot that it can sell to Wal-Mart. To encourage ‘development’, they use TIFs or variants thereof, so that Wal-Mart can redirect the tax dollars it pays to go to the good of the City instead into developing its own infrastructure.
Additionally, Wal-Mart and other big box stores often receive preferential tax treatment, especially on the local level. And because of its size, Wal-Mart enjoys a lower effective tax rate than many of its small business competitors.
All of these factors lead towards the success of Wal-Mart, and all are a consequence of tax and regulatory structures that are designed to preserve large, publicly-traded corporations at the expense of small business entrepreneurs.
The nice side benefit of Wal-Mart’s success is that because they are large and exert such a large downward trend on wages (they have to keep wages low to keep prices low), that their other big box competitors (with the notable exception of CostCo) are ALSO forced to depress their wages. The result, of course, is a class of cheap workers who never make enough money to build the capital to start their own businesses, thereby strangling competition in the crib.
Free-market Wal-Mart ain’t.Report
Well I’m no expert on W-mart, I prefer Target myself, but far as I recall they situate themselves mostly outside of community limits and purchase their lots for themselves usually from a farmer though of course the generalizations are general.
The part about low Walmart wages preventing small business formation, sorry to be harsh, sounds like pure bunkum. Gonna have to ask for a cite for that.Report
North, see the studies below. And it’s not just Wal-Mart. Wal-Mart is so ruthless about keeping wages and benefits low that all of its competitors are forced to, as well.Report
Yes exactly! I don’t see how you can argue that an aspiring monopolist that gets lots of government favoritism is the epitome of free market progress.
North, they do that sometimes, but most places where that’s a viable strategy are gone now, so instead to go to county government as Alex says. And most people don’t pay enough attention to their local government, so they get away with it.Report
Okay Joseph, I am well at (or past maybe) the limits of my own knowledge on the subject. Certainly if they are making local governments dance to their tune then it’s something I’d deplore and oppose.Report
Well what is free-market? Oh that’s right, virtually nothing. Are consumer electronics a free market? Nope.
I don’t see the point of this critique, we’re talking about scope not absolutely free market/command economies. Free-er markets…Report
I’m by no means a hater of Wal-Mart, in fact on balance I would say they are a net positive to the American economy. Having said that, the Queen of Romania made some excellent points.Report
I don’t know what studies have been completed any time lately, but in the Nineteen nineties at least a few — including one performed by the consulting team that Walmart hired (Greenfield, MA) — showed that Walmart had, or would have (in the case of Greenfield, where the store never went up, after prolonged battles between the store and the citizenry) a negative net effect on the local economy: A long-term decrease in total jobs, depressed wages, and (perhaps most obvious) less money kept in town.
Whether, even having a negative impact on individual local economies, it still may have a net-positive effect on the “Great Economy”, at least depending on how we’re judging it.
For me, it’s not worth it; for others it is. And like I said, I’m not sure of any recent studies, but in Lake Placid, Greenfield, and somewhere in Washington state, the studies dispelled the myth, at least at the time, that Walmart is good for the town.Report
That seems at least plausible. Walmart as an economic solvent in essence dissolving individual town economies to the benefit of the county? regional? economy.Report
I’m not sure I get how it could have the effect of depressing wages in local economies. Your typical local stores are probably going to pay less money and provide even less benefits than does Wal-Mart, and also not provide as many jobs in total, in many cases. I guess I could see a cause and effect as far as a decrease in the purchase of certain higher priced domestic goods leading to lay-offs in some segments of the economy, but this would rarely manifest at most local levels.
The overall effect on local economies, especially the hit suffered by local businesses who can rarely compete, yeah that’s obvious, as well as the impact on local services due to the hit communities take if they offer tax incentives to Wal-Mart that other local businesses don’t enjoy, when those businesses then fail or otherwise don’t provide enough of a tax base to make up the difference.
If you have a situation where there is only one Wal-Mart for like fifty miles, then some local businesses might well thrive, such as restaurants, depending on location.
By and large, a great deal of the problem boils down to American industries pricing themselves out of the competitive market. I’m not sure Wal-Mart deserves the lion’s share of the blame for that.Report
Well we’re not getting simple manufacturing back without either:
A) An enormous trade barrier (and with that a trade war and if history is any guide a real war after that) or
B) Another large jump in automation in which case you’re still not getting those jobs back.
Look when you have countries where the populace is willing to work for low low wages you’re not going to be able to compete for jobs making little wingdings or basic assembly line stuff. Those jobs are always going to migrate to countries at a lower level of economic development.Report
Patrick, this link provides a little bit on the studies that have suggested net losses in jobs. It’s only a Google Answers thread, but it makes some mention of a couple of the studies. Feel free to follow up as you so desire.
http://answers.google.com/answers/threadview?id=404475Report
A Wal-Mart store will have somewhere around 300 employees earning $8-11 an hour. There will be 2 or 3 employees there earning management wages. Needless to say, I’m not familiar with any Ma&Pa’s requiring 100 wage-slaves to support their middle class lifestyle.Report
You mean they have a ratio of managers to wage earners that is one-twentieth the mean of the labor force as a whole? I suspect you’ve miscalculated.Report
It is hard to see how they could have a negative impact on every local economy but a positive impact on the general economy. Perhaps you wish to say that there are unpriced aspects of the common life in local communities which they injure?Report
Well, yes, A.D., I do mean to say that. But I intended to suggest by “the Great Economy” not a county, regional, or even state economy, but the abstraction that we call “the economy”.Report
I don’t know. It makes sense to me. Think of it this way- there are plenty of things the Obama administration has done that they can rightly claim have helped the general economy without having had any real positive impact on any local economies.Report
The math is impossible.Report
This reminds me a bit of Huckabee claiming we should thank veterans for school desks. The centralized general retailer is hardly an innovation of Wal-Mart and hardly unique to our country. Where Wal-Mart has succeeded is that it has been the most ruthless in pursuing Chinese sourcing.Report
Maybe I’ll leave the “Goldberg is smart” debate for some other time.
But Goldberg is funny?
Um, no.Report
Um, yes.Report
Frankly, the argument that we make the poor better off by selling them ultra-cheap crap from Wal-Mart, instead of paying them a decent wage, is pretty disgusting.
But it’s to be expected from conservatives, of course. Someone has to clean their floors and take out their trash for $5 an hour.Report
Socrates, if you’ll allow it (and you haven’t much of a choice!), this anti-Walmart conservative would like to one-up you:
The argument that we make the poor better off by paying them a decent wage, instead of empowering more of them to be their own bosses, is pretty disgusting.Report
It is not disgusting that people work for wages.Report
I don’t really believe that it is; I was simply repeating the theme from Socrates. However, I do think it worthwhile, if not inherently better, that far fewer people be “wage slaves”, and many more self-employed, whether they be small-scale farmers, shopkeepers, artisans, and so on. I recognize that it’s not always the most economically efficient system, and also that it’s not always so feasible, and moreover that even in such a system some shopkeepers, et c., will require a few hired hands, but in general, this sort of system makes the most sense to me.Report
Socrates, I don’t find that position convincing. Mom & Pop businesses pay their menial laborers minimum wage just like Wal Mart does. It’s not like they’d be raking in middle class wages if all the Wal Marts vanished in a puff of smoke.Report
Except during intervals immediately after legislated increases, very few people are paid the actual minimum wage.Report
Actually, a great many so-called mom-and-pop operations don’t even pay minimum wage, because they’re not required to, nor are they required to provide many benefits. In fact, a great many of them tend to be family operations that hire few if any outside the family. Then there are restaurants, which are not required to pay minimum wage due to the prospect of tips, which is an uncertain proposition at best, and dependent on the economy during any given period.
The best way to solve the Wal-Mart problem would, it would seem to me, involve state legislation mandating a ceiling on the number of stores than can exist within any given area. Where I live now, there are at least seven Wal-Marts, just that I know of, within a fifty mile radius of each other, which is absolutely ridiculous. Two are within seven miles of each other. Another two are within something like twelve miles of each other. There is another some thirty miles from that one.
You have to wonder what the long-term impact of this is on local economies, and how sustainable it is. The states would, I would think, be well within their rights to regulate this for the good of the overall individual state economies, but on the other hand, where it might be a negative for some of the communities being swallowed up, the states might see the situation as a net positive for their tax base. Or maybe they simply don’t have the integrity to do anything that might be seen as detrimental to such a large enterprise, with an eye to their up-coming election finances.
Whatever the case, I don’t see why this should be such a problem. No state legislative body would dream of allowing thousands of casinos to dot the landscapes of their state’s communities, why should Wal-Mart be any different.Report
With reference to various complaints offered, instead of arbitrary limits imposed on the number of retail outlets Wal-Mart can introduce, perhaps the following:
A. Reconstruct the tax code to favor small enterprise:
1. Eliminate general sales taxes and limit the use of excises to tariffs and to levies on activity which generate externalities (industrial effluvia);
2. Eliminate property taxes.
3. Assess a levy of 30% on corporate profits
4. Eliminate miscellaneous business taxes.
B. Vest authority over urban planning in metropolitan and supra-local authorities, and insist that new construction respect certain principles for maintaining the commons (for size, styles, juxtaposition to pedestrians, and parking). Have Wal-Mart adapt to local circumstances in its floor plans and render itself congruent with communities built for pedestrians; no more parking moats.Report
I’d go even farther. Eliminate taxes on small businesses, at least at the federal level, and limit corporate taxes to ten percent, and impose an across the boar, non-progressive, tax on private income. Property tax policy is a local matter. Business would boom, and the rates can always be adjusted later as needed or warranted. Then levy an additional corporate state tax on any superfluous franchise extensions that might be interpreted as an attempt to dominate a given market unfairly. There is no need for a Wal-Mart every seven or eight miles in any given direction. As long as such regulations are imposed by the states, as opposed to the federal government, I don’t see a problem with it. The states are more than equipped, or should be, to tax and regulate their own individual bailiwicks, with limited oversight from the federal government (seeing as how pollution tends not to give much of a damn about state borders). Actually, this would be more bang for the buck all the way around.Report
Property taxes and general sales taxes (as well as a miscellany of business taxes) fall on proprietorships and partnerships which tend to be small and do not have the advantages of limited liability nor access to capital markets. Tax persons; tax proprietors and partners in their capacity as persons. A charter of incorporation creates a person under law; it is legitimate to treat concerns which have sought this advantage as if they were persons in fact.Report
If they can generate earnings, their branches are not ‘superfluous’. (And as far as I am aware, Wal-Mart does not issue franchises).Report
They are superfluous insofar as their potential impact on a given area. When you can take off driving in any given direction and arrive at a Wal-Mart in the same basic amount of time, you can make a case for that being good, strategic business sense. When you can continue driving in any given direction and run into yet more Wal-Marts in the same basic amount of time, it becomes superfluous, maybe not for a Days Inn or for a Red Lobster, but certainly for something like a Wal-Mart.
Just to be sure I’m clear, I have nothing against Wal-Mart, in fact, I’m a supporter of Wal-Mart, I just think there should be some kind of reasonable limits, the same type of limits a state might impose on the number of casinos, or cities might impose on the number of strip clubs and porn shops, etc. I am not against strip clubs and porn shops either, by the way.Report
Aren’t 1 & 3 mutually exclusive. As sales tax reductions would just be offset by pricing in the corporate income tax into pricing…Report
I clean my own floor and take out my own trash.Report