On Neoliberalism

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Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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114 Responses

  1. Avatar Barry
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    says:

    “I don’t agree with Lane’s assessment of the relationship between organized labor and rich democracies. Or, rather, I don’t think the cause-and-effect is at all clear. The countries in question are invariably small, prosperous, and fairly homogenous at least in comparison to the United States. Those that are more diverse still have a fairly homogenous political culture, which allows them to pass consensus policies much more easily. And the history of labor in these countries is quite different, with labor/business relations much more sympathetic than in the American context. Either way, I agree with his conclusions, at least insofar as they are the most practical steps liberals can take in the American system.”

    However, we see a similar pattern in the US and (IHMO) the UK.Report

  2. Avatar James Cameron
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    says:

    A Pew chart series about attitudes towards unions:

    http://people-press.org/2011/02/17/labor-unions-seen-as-good-for-workers-not-u-s-competitiveness/

    If younger people favoring unions is a demographic trend, the Left could focus on building a broader non-union coalition and have unionism be their long term strategy when the next financial crisis hits. This might help them bang out a unifying narrative very quickly, like the Tea Party, and if they organize their subgroups properly they could have a very disciplined party in the future.

    For now, my money would be on some grand unified theory education as a center issue for the Left. Everybody goes to school, and you have the useful hot buttons: think of the children, xenophobia, populism, all that good election year stuff.Report

    • Avatar E.D. Kain in reply to James Cameron
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      says:

      I get this nagging feeling that young people support unions because they are not in unions and don’t have any contact with unions.Report

      • Avatar Stillwater in reply to E.D. Kain
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        says:

        Erik, I have a question: to what extent would your new-found antipathy for unions be changed by recognizing that economic institutions, even under liberty loving governments, will always perform at suboptimal levels (according to a favored metric) and by recognizing that democratically determined policy will definitionally be imperfect (again, according to some favored metric)?Report

        • Avatar E.D. Kain in reply to Stillwater
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          says:

          My antipathy is as much recognition of the reality of politics in America as anything else. Beyond that, I’m not sure I follow your question. I’m not sure I see what bearing that has on support for unions.Report

          • Avatar Stillwater in reply to E.D. Kain
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            says:

            Unions are imperfect creatures, institutionally. There is corruption at the top, leverage against employers to retain ineffective non-productive employees, ability to disrupt the economy by striking, etc. But how are these factors any different than other economic institutions? More importantly, to what extent can the corruption, market-inefficiencies, coercive leverage against markets and governments, be entirely and wholesale eliminated from our broader economy? If it cannot be, then isn’t the level of corruption and waste generated by unions balanced , to some extent, by the benefits (potentially, lets at least admit that much) that accrue to union members?Report

          • Avatar Stillwater in reply to E.D. Kain
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            says:

            Adding: that should read “…to union members and broader society.”Report

          • Avatar Stillwater in reply to E.D. Kain
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            says:

            And to add even more: If the answer to that is ‘yes’, or even a conditional ‘maybe if’, then why doesn’t the broader program to rehabilitate economic institution without dismantling them apply to unions?Report

            • Avatar Murali in reply to Stillwater
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              says:

              why doesn’t the broader program to rehabilitate economic institution without dismantling them apply to unions?

              Unions are organised for the very purpose of making the labour market more rigid. Union goals are successful when

              1. employers increase the worker’s wages em mass

              2. Government increases the minimum wage

              3. Employers decrease the number of hours worked

              4. Government reduces the official no of hours in a work week

              5. Employers offer more benefits

              6. Government sets a floor below which benefits may not fall

              etc…

              i.e. courting unions as a political faction gives us policy outcomes 2, 4 and 6 which increase the labour market rigidity.

              And labour market rigidity reduces the gains to the worst off from economic growth.

              http://www.eastwestcenter.org/fileadmin/stored/pdfs/ECONwp060.pdfReport

              • Avatar Jesse Ewiak in reply to Murali
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                says:

                For basic rights like a minimum wage, I’ll take a labor market rigidity. Oh, and the worst off in America have done so well since unions have becomes less powerful.Report

              • Avatar Murali in reply to Jesse Ewiak
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                says:

                Since when was a minimimum wage a basic right?Report

              • Avatar Jesse Ewiak in reply to Murali
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                says:

                Since I decided it was so in my opinion. Just like I believe health care and education is a basic. As I’ve said before, I’m a proud social democrat. Some of my ideas may seem off-center.Report

              • Avatar dexter in reply to Jesse Ewiak
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                says:

                Kudos to you Mr. Ewiak, It says so in the declaration of independence. “all men are endowed by their creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.” Without insurance you might be denied life, without education you might not have liberty, and without minimun wage you might be denied happiness.Report

              • Avatar Scott in reply to Jesse Ewiak
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                says:

                Jesse:

                Thanks for the illustration of why someone just declaring to things to be “rights” is so silly. Is there anything else you like to add to those basic “rights,” puppy dogs and rainbows?Report

              • Avatar Murali in reply to Jesse Ewiak
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                says:

                Let’s not talk about legal value because

                1. I don’t exist in the same legal regime as you guys.

                2. Just because something is legally declared a right doesnt mean it ought to be legally declared as a right

                3. Rights talk cannot be the sort of things that people use as premises. Instead, at best, rights talk is the sort of thing that you come to as a conclusion, and if then, only by carefully specifying its applicability or by spelling out the principles to be used when determining said applicability

                4. Arbitrary rights talk is a lot like saying because God says so. Whether or not its true, it plays no part in public reasoning.Report

              • Avatar Elias Isquith in reply to Murali
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                says:

                Oh, Scott. Anything in the Declaration of Independence or Bill of Rights is at heart no different. Sure, there’s older writings by rich white guys one could point to to uphold habeas corpus, but it’s nothing more than that.Report

              • Avatar Jesse Ewiak in reply to Elias Isquith
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                says:

                Bingo. Most of our basic rights exist because of Lords in medevil England got pissed off at a weak King and had the leverage to force concessions from him.Report

              • Avatar Scott in reply to Elias Isquith
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                says:

                Elias:

                Why would you even talk about the DOI, it has no legal value. Frankly, it is just a propaganda piece by the founders to explain why their revolution is okay versus others that weren’t okay.Report

              • Avatar Elias Isquith in reply to Elias Isquith
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                says:

                To say the DOI has no legal value is literalism taken to the point of obtuseness. At least since the Civil War it has been almost universally recognized as a foundational document. It has been cited in court cases and in the court of public opinion as being essential to the American experiment countless times.Report

              • Avatar Stillwater in reply to Murali
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                says:

                Unions are organised for the very purpose of making the labour market more rigid.

                Well of course! I would counter all the points above by saying that union goals are successful precisely to the degree that the labor market is rigid! I don’t think that’s even disputable (is it?). What’s disputed is the efficacy of unions – and ascendant unionism – in rectifying particular economic problems devolving from the contemporary economy. Look, there was a time when not only 2, 4, and 6, but also 1, 3, and 5 were the result of unionization and the resulting leverage unions had in determining economic outcomes.

                Now, I’m not saying that those models ought to be adopted as a paradigm, or blue print, for solving current problems. Rather, it’s two things: when I hear smart people talking about ‘labor flexibility’ as the solution to problem X, I reflexively wonder who’s funding that research. More substantively, it’s that ‘capital flexibility’ has had pretty devastating effects on huge sectors of laborers. So when people talk about wanting to rehabilitate ‘capital flexibility’ on the presupposition that labor rigidity is muy malo tout court, I merely wonder why. If we’re in fairy dust land where bottom up political pressure can change the prerogatives of the most powerful market players, who determine governmental policy, why not go all in and say labor deserves institutional support of its own, not merely the scraps off the floor.Report

              • Avatar Murali in reply to Stillwater
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                More substantively, it’s that ‘capital flexibility’ has had pretty devastating effects on huge sectors of laborers.

                i.e. captial flexibility has benefited capital and at best not improved the lot of labour or at worst devastated huge sectors of labour. By analogy, labour flexibility should benefit labour.Report

              • Avatar Stillwater in reply to Murali
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                says:

                Why should the analogy hold? There strictly disanalogous – except that they contain the same word.Report

              • Avatar Murali in reply to Stillwater
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                says:

                Labour flexibility provides more opportunities for labour to take advantage of.Report

              • Avatar Will Truman in reply to Stillwater
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                That’s part of where my subjective experience has lead me. I got my first post-college job by essentially saying “The job is posted for $40k. Pay me $25k to start (and this being an EAW state, we all know you can fire me whenever you want if you do not like the results).”

                My most recent “real” job prior to this one involved a contracting position that wouldn’t be allowed in a union regime. I helped get my current contracting job with concessions and filling a gap that would be difficult to pull off if everything were structured by union (they’d say “Don’t contract to this guy on this basis. Hire someone for real.” Which they might! Or they might let the work go undone.

                There was also a job in between where I got in during one of the firing!/hiring! waves that would have been more difficult under a less flexible labor regime.Report

              • Avatar Jesse Ewiak in reply to Stillwater
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                says:

                What a delightful future of undercutting each other to get a job, Will.Report

              • Avatar Will Truman in reply to Stillwater
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                says:

                Indeed. My duty was to stay unemployed for The Greater Good.Report

              • Avatar Stillwater in reply to Stillwater
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                says:

                Murali, compare

                Capital flexibility benefits capital and labor flexibility benefits capital.

                to

                capital flexibility benefits labor and labor flexibility benefits labor.

                The primary distinction I perceive here is that labor flexibility/rigidity applies to a necessarily circumscribed region or location X with a fairly stable and determinate labor pool, whereas capital flexibility entails that one and the same corporate entity can relocate its capital center outside of region X.

                So capital flexibility may good for labor in some abstract sense – like the workers of the world – but it isn’t beneficial to labor within a region from which capital has fled. The same cannot be said about labor flexibility, which almost definitionally benefits capital.Report

              • Avatar Murali in reply to Stillwater
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                says:

                The same cannot be said about labor flexibility, which almost definitionally benefits capital.

                Labour flexibility is attractive to owners of capital who will prefer to relocate to more flexible labour markets. They work hand in hand. If capital were completely rigid, no inducements could cause capital to move. In such a situation labour rigidity could help labour by putting a stranglehold on capital. Just or not, this is an unstable equillibrium. It is easy to mess this equilibrium up, and said destruction of equillibrium is inevitable. Growth is stagnant and the economy becomes increasingly vulnerable endogenous and exogenous shocks.

                Increasing flexibility of capital allows capital to move away to more flexible labour markets. This causes capital as well as the economy in general to grow. However at least some of labour fails to reap the benefits of said growth and some are actually harmed by the flight of capital. Labour flexibility which is the major pull factor for capital flight induces the return of capital or the attraction of foreign capital.

                Moreover, with the global expansion of the capital class, the supply of capital increases which in turn provides more opportunities for labour.

                This is a more stable equillibrium: a reality that any current policy effort must deal with when it tries to work out how to improve the position of the worst off.Report

              • Avatar tom van dyke in reply to Stillwater
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                Indeed. My duty was to stay unemployed for The Greater Good.

                Well, that would be good citizenship. However when public charity becomes a “right,” that concept of good citizenship goes out the window.

                And that’s the US, or at least the chunk “trapped” in the cycle of poverty.

                I have no doubt that many in these ideal socialistic societies, relatively small and ethnographically homogenous, WT’s concept of citizenship and public charity are in play. I’m not sure these socialist paradises are sustainable [Norway on one hand but Greece on the other], but I don’t dismiss the possibility they can work.

                However, I strongly doubt it can work under the “rights”/entitlement mindset, and this is becoming the dominant ethos in the US—on the part of its recipients, and sold as an ideology by, um, sorry, the left.

                And that, my friends, is the nub of the Heritage thingee, that the US is a morally decent country and its poor have a lot of nice things to assuage their misery.Report

      • Avatar James Cameron in reply to E.D. Kain
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        says:

        I don’t know, the report also said people who are in unions have a higher opinion of them, which seems intuitive, though it could just be a chicken – egg problem.Report

      • Avatar Barry in reply to E.D. Kain
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        says:

        Or because they’re not in unions, and the horror stories of working in/with unions don’t compare to the reality of working without them.Report

        • Avatar Chris in reply to Barry
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          says:

          Amen.

          Sometimes when it comes to unions, reading E.D. is like reading, well, any standard-issue Republican of the last several decades.Report

          • Avatar E.D. Kain in reply to Chris
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            says:

            What exactly that I wrote is boilerplate anti-unionism? What is not true?Report

            • Avatar Chris in reply to E.D. Kain
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              says:

              “Organized labor creates a labor cartel, restricting the supply of jobs and wages and limiting the opportunities of non-union workers.”

              For example.

              And very little, let’s say, balance.

              Also, see the question below.Report

              • Avatar Will Truman in reply to Chris
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                says:

                It’s worth noting that it wasn’t that long ago when EDK was big on unions and organized labor (particular teaching, but also others). You had him, but you lost him. I’d be interested to know what changed his mind on the subject. Whose arguments, etc.Report

              • Avatar E.D. Kain in reply to Will Truman
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                says:

                Will/Chris –

                I’m *not* against unions. I’m less optimistic that they can do what I hoped they could do; more so, I’ve lost my belief that they can be revitalized in this country in a way that would benefit the most people, and not just union workers. In countries where full employment is a reasonable policy goal, this is not such a concern. Here…I dunno. I think it would just pile on another layer of special interests and favoritism if we tried to really revamp unions. How would we go about it? I mean, in purely practical terms what do we do to revive labor?

                I just don’t see it happening, at least not through more laws. Fewer laws maybe…and that I could get behind. Repeal Taft-Hartley, get rid of right-to-work laws. All that is 100% okay by me.Report

              • Avatar Stillwater in reply to E.D. Kain
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                says:

                I mean, in purely practical terms what do we do to revive labor?

                This can be done via changes in the tax code, which is a less outlandish proposal than eliminating state/private collusion in international trade.Report

              • Avatar Stillwater in reply to Stillwater
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                says:

                Increase the tax in repatriating foreign profits.Report

              • Avatar North in reply to Stillwater
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                says:

                Stillwater, correct me if I’m misunderstanding this but would this not simply be a strong encouragement for corporations to relocate out of the US to avoid such taxes? If we try and pen our companies into the country that way isn’t it more likely they’d either stop being our companies or perish?Report

              • Avatar Stillwater in reply to Stillwater
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                North, I think that’s right, to some extent. Lots of corporations already ‘relocate’ to the Caymans to avoid some current taxes and suffer no penalty. So yes, that’d have to change.

                Corporations expatriating and becoming merely importers is another issue, but what I understand from my libertarian friends is that these corporations benefit greatly from a tight connection to the domestic legislatures, regulatory agencies and the executive branch, which would be severed by leaving.Report

              • Avatar Christopher Carr in reply to E.D. Kain
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                says:

                You’re against unions as cartels, but for unions as cooperatives, is that correct? How do we prevent the former but allow for the latter, from a policy perspective?Report

              • Avatar E.D. Kain in reply to Christopher Carr
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                says:

                I’m not sure. Yes, I’m in favor of cooperatives. I’m in favor of free-market unions. Read Kevin Carson, he says it all much better than me.Report

              • Avatar Murali in reply to Christopher Carr
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                The key in many ways is a cutural shift. If we are to reconceive of union leaders as managing a team of workers and whose responsibility it is to make sure that the worker’s skills are up to date and that the workers are more efficient than the competitors. The union leaders would then contract with capital.

                Capital gets to benefit by not having to concentrate on training workers and unionised labour benefits by being able to market itself as more efficient and skilled than its competitors.

                The organisational structure I envision basically encourages labour to work its way up to capital. This enlarges capital and/or unionised labour and at the same time provides more opportunities for labour.

                It also effectively undercuts all non-unionised labour.

                But in order to do that we need to radically restructure unions from within.Report

      • Avatar Chris in reply to E.D. Kain
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        says:

        You’ve been in a union?Report

        • Avatar E.D. Kain in reply to Chris
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          No. I haven’t fought in a war either. What’s your point?Report

          • Avatar Jesse Ewiak in reply to E.D. Kain
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            says:

            Well, you said us silly kids only like unions because we’ve never been in contact with them. So, asking if ya’ know, you have any actual experiences with unions is a reasonable question.

            Just like if someone said the only reason people are OK with the idea of a war is because they don’t have to fight, asking if they’ve ever been in the military is a reasonable question.Report

            • Avatar E.D. Kain in reply to Jesse Ewiak
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              says:

              But that isn’t analogous at all. Why do you think kids are pro-union these days? Because they’ve been in unions? That is obviously not true.Report

              • Avatar Will Truman in reply to E.D. Kain
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                says:

                The left would say it goes back to Barry’s answer, because they think their unionless situation sucks. The right would argue it’s because they don’t appreciate how unions might have prevented whatever job they have.

                I’ve personally never had a union job. It’s possible that my perspective would be different if I had. Instead, I’ve replaced people that were fired or let go that might not have been let go if a union had been able to prevent it. Or I’ve had a contract position that might not have existed if unions successfully prevented contract labor. That sort of thing.

                Which makes my view of unions more skeptical than some.

                On the other side, some people I’ve worked with thought that everything would be the same – they would have their job or one like it – but with union benefits and with a wage not so ridiculously crappy. Maybe so. Maybe not.Report

              • Avatar James Cameron in reply to E.D. Kain
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                says:

                The easy answer is that kids are pro-union because younger people are more leftist. That would be the narrative, but is it actually the case in general? Does anyone have statistics on this, if so I’d be very interested.

                Kain’s point about lack of contact with unions ties in to the larger point of the study, that people in general have a more negative opinion of unions than they have in the past. Also, it is known that union participation has been on the decline. It is reasonable to conclude that if the younger people are left leaning they would be more pro-union on abstract principles than actual policy.Report

              • Avatar Chris in reply to E.D. Kain
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                says:

                For precisely the reason Jesse mentions. It seems odd to speculate (and it’s nothing more than speculation) that someone, or worse, some group, is pro-union because they haven’t been in a union when you yourself have no experience with one. That makes it not just speculation, but blind speculation.Report

              • Avatar E.D. Kain in reply to Chris
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                says:

                I did not say I had no experience with unions though did I?Report

  3. Avatar Jaybird
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    says:

    Purist libertarians, who profess to envision a feasible path to libertopia, regularly argue that moderate libertarians entrench state power and impede the path to a truly free society by supporting taxpayer-funded school-voucher schemes, or government-mandated “personal account” retirement savings programmes.

    This is one thing that bugs me.

    I do not believe in “libertopia”. There is no perfect society out there, there is no ideal state that can someday be achieved, there is no final place.

    What I am hoping to achieve is to get people to stop prying themselves into the lives of others, imprisoning them, forcing them to become “better” (by whatever measurement) under threat of law, and otherwise meddling.

    This will not lead to any type of ‘topia. There is no “end” goal. That’s not the point.Report

    • Avatar JosephFM in reply to Jaybird
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      says:

      Just because you don’t…doesn’t mean other people don’t. The fact that you really want progress in the direction of less meddling, and not, say, a very specific economic system based on mineral exchange and handicrafts, means you are basically not the kind of purist he’s talking about at all.Report

  4. Avatar Jaybird
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    says:

    A small irony.

    Michael Moore came out with a movie in the late 90’s (maybe it was 2000) called “The Big One”.

    It was a cute enough movie. Among other things, he explored renaming the US (hence the title), changing The National Anthem to “We Will Rock You”, and spent time at a big box bookstore called “Borders” and celebrated the creation of a union at one of the stores.

    For one reason or another, I’ve been thinking about that this week.Report

  5. Avatar Brandon Berg
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    says:

    I thought that “neoliberal” was what leftists called real liberals (i.e., libertarians). But over the past few weeks I’ve been seeing it used to refer to a certain kind of leftist. When did this change?Report

    • Avatar Anderson in reply to Brandon Berg
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      I think the term came into use during the Clinton years, maybe even arising from the Reagan Democrats of the 80s, to describe liberals who favored deregulation, entitlement reforms (namely welfare reform in the 90s), and were generally considered “pro-business”, while still holding socially liberal views, wanting to do good for the environment, pro-immigration, (some wanted)higher marginal tax rates on the wealthy, etc. They basically pushed against the New Deal, working class, union Democrats from rust belt areas, as they tended to come from suburban, tech and finance driven areas on the east coast. In many ways they embodied the part of the Clinton administration, think Robert Rubin, that declared “the era of big government is over.” Read this story (http://www.washingtonmonthly.com/magazine/julyaugust_2011/features/friends_like_these030379.php) from the Washington Monthly. It paints a fairly negative picture of New Democrats, or neoliberals, because of their fight against the health care law’s IPAB and the idea of letting Medicare negotiate drug prices directly with the Pharma industry, but it’s a good read on this wing of the Dems.Report

      • Avatar Stillwater in reply to Anderson
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        Reagan and Thatcher are the politicians usually associated with originally implementing neoliberal policies. The derive from Milton Friedman and the Chicago School.Report

        • Avatar Anderson in reply to Stillwater
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          I guess it’s all semantics here… you’re right that the term “liberal” as it relates to classical economics would mean Friedman’s Chicago School, the Reagan/Thatcher revolution, even supply side econ, etc….but I’m thinking liberal as in the way it is defined politically post-new deal..so I think of neoliberals as being analogous to New Democrats, moderate Dems, Clinton Dems, etc. I can see why there’d be confusion.Report

      • Avatar Art Deco in reply to Anderson
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        says:

        Umm.
        The Washington Monthly was founded by Charles Peters in 1969 as a critic within the skunkworks. The term ‘neoliberal’ used to describe a mainline Democrat with a number of complaints about the modus operandi of Democratic politicos appeared around 1981. Charles Peters embraced the term and claimed to have founded this tendency of political commentary.Report

        • Avatar Anderson in reply to Art Deco
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          says:

          That’s interesting, I did not know the history of the Washington Monthly…I only linked to that article because it goes into the history and politics of the New Democrats, which seems to be a partial embodiment of neoliberalism. Hence, it’s surprising that the magazine started by the man who “embraced neoliberalism” would publish such a scathing indictment of those who practice it (to some degree).
          Although, I’m starting to see a difference now between the neoliberalism of the 1980s and the New Democrat activities of the later 1990s.Report

  6. Avatar Janus Daniels
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    What differs neoliberal and neoconservative?
    For that matter, do any of these terms have any meaning left?
    Conservative used to mean small government, military restraint, balanced budgets, personal responsibility, staying off my property and out of my bedroom, etc.
    I don’t talk about conservative, liberal, socialist, communist, fascist, etc. until after getting agreement on definitions.Report

    • Avatar Stillwater in reply to Janus Daniels
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      Neoliberals use force to open up markets, neoconservatives use force to gather up resources.Report

      • Avatar E.D. Kain in reply to Stillwater
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        When force is used to open markets, that’s where I draw the line. And yes, one faction of the broader neoliberal movement has done just that. I think neoliberalism is not without its faults. I would not support coercive globalization measures for any reason.Report

        • Avatar Stillwater in reply to E.D. Kain
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          says:

          I take it you mean military coercion in the above comment. The problems run deeper, in my mind. The WTO has codified principles which essentially prohibit the domestic policy of member nations from imposing quality assurances, envirnomental and other regulations, subsidies for domestic sectors of the economy, and restrictions of any kind on imports. If a country enacts these policies, they violate WTO law and can be sued. I would say that that is an example of coercion wrt keeping markets ‘open’.Report

          • Avatar E.D. Kain in reply to Stillwater
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            If I meant military coercion I would say that. No, I mean all forms including the WTO and the many, many other ways that states work to undermine third world countries and build up the infrastructure of resource depletion and so forth.Report

          • Avatar North in reply to Stillwater
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            In fairness, though, if you let countries play hanky-panky with those kinds of things you end up with a rapid race to the bottom trade war.Report

            • Avatar Stillwater in reply to North
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              says:

              I guess we look at this differently. WTO principles are designed with foreign access to domestic markets in mind. They take domestic regulation out of the equation entirely, since no single actor can impose regulations on imports that give unfair advantage or disadvantage to any particular market participant.

              The baseline is about as low as it can go, until all member nations decide to act on a specific regulatory principle.Report

              • Avatar North in reply to Stillwater
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                says:

                Well yes, precisely. Unless you have something very unpleasantly like the WTO in place then all you end up with are an endless parade of tariffs by other names or other inventive barriers to trade being generated by governments that have strong electoral incentive at home to try and shield various constituencies from foreign competition.Report

              • Avatar E.D. Kain in reply to North
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                We need only worry about our own policies. We should drop all tariffs and other protections, all trade barriers, all subsidies, and do away with these international broker institutions altogether. Other countries would eventually follow suit.Report

              • Avatar dexter in reply to E.D. Kain
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                says:

                Mr. Kain, I think dropping all trade barriers is a very silly idea. America already has a trade inbalance that is unsustainable. We, as a country are already sending over 750 billion a year to foreign nations. It will only get worse with more free trade. Either or make a loaf of bread in America cost a nickleand a decent apartment around 40 a month, then one could live off 50 cents per hour.Report

              • Avatar Stillwater in reply to dexter
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                45 or so years ago, the US was the world leading importer of raw materials and the world leading exporter of manufactured goods. In the early 2000s, the US was the world leading exporter of raw material, and the leading importer of manufactured goods. I’m not sure how increasing open trade policies would rectify this problem.Report

              • Avatar E.D. Kain in reply to dexter
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                says:

                Stillwater – I wouldn’t trade now for 45 years ago, would you? Nor am I sure we have a problem. We have a good deal more technology than we did 45 years ago, and a much different economy. I think breaking down all tariffs and subsidies would result in a massive increase in investment here, and major job growth, as well as far cheaper goods for Americans.Report

              • Avatar Stillwater in reply to dexter
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                says:

                No, I like da present. But I’d like like the trade surpluses from 45 years ago. It might make this whole budget wandango go away.Report

              • Avatar Stillwater in reply to dexter
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                says:

                Erik, I admittedly don’t know the finer points of economics – the nose, the high notes, etc. But isn’t the biggest stumbling block to reinvestment in the US that labor rates are still too high?

                Happy to be wrong about this.Report

              • Avatar North in reply to dexter
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                says:

                Stillwater, the only ~only~ way I have ever read that one could expect to recapture the US’s manufacturing dominance of 50 some years ago would be via bombing the industrial centers of the rest of the world into rubble and/or chaining them up with centralized economies. The problem isn’t that the US doesn’t manufacture (it does, an enormous amount) but that the rest of the world does so too and with robotic plants you just don’t employ the numbers of people that manufacturing once did.Report

              • Avatar Christopher Carr in reply to dexter
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                says:

                Thank you to Mr. North for reminding us all that world trade is not zero sum. From 1945 to 2011, America got much wealthier. From 1945 to 2011, Japan, Germany, China, France, and Britain went from being completely bombed out holes in the ground to not quite as wealthy and productive as the U.S. but pretty damn close and certainly even enough on a per capita basis. I’ll throw my lot in with Erik. Now is the time to loosen up world trade.Report

              • Avatar Jesse Ewiak in reply to E.D. Kain
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                says:

                No, they’d flood us with cheap crap than install their own trade barriers against us. For thirty years of proof on this topic, I direct you to the People’s Republic of China.

                That doesn’t even going into the fact that a nation protecting it’s nascent industries via protectionism has only been going on since the beginning of time.Report

              • Avatar Murali in reply to Jesse Ewiak
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                says:

                a nation protecting it’s nascent industries via protectionism has only been going on since the beginning of time.

                And it ha been argued since the time of Immanuel Kant and Adam Smith that doing so is a bad idea.Report

              • Avatar James K in reply to Jesse Ewiak
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                says:

                If every other country jumped off a bridge, would you do it too?Report

              • Avatar North in reply to E.D. Kain
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                says:

                I dunno E.D. I think free access to ones market is a valuable good that shouldn’t just be given away wholesale but liberally exchanged as part of foreign dealings. Reciprocal free trade agreements strikes me as more fair and useful.

                I will allow that in theory blanket opening of our markets might get us ahead in the long run but in practical and political terms it strikes me as impractical in the short term and politically I fear it could generate a backlash that’d end up leaving us with even less liberal trade than we started.Report

              • Avatar Scott in reply to E.D. Kain
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                says:

                E.D.:

                And I’m sure you think that if the US unilaterally disarms that other countries will do the same, right? I hope you are kidding and don’t believe such silliness.Report

              • Avatar E.D. Kain in reply to Scott
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                says:

                I could care less what you hope, Scott. I think we should slash our defense budget by at least 50%, though I’d go a lot further if I could.Report

              • Avatar Scott in reply to Scott
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                says:

                E.D.

                Far be it for me to ask you to leave your liberal fantasy land.Report

              • Avatar Murali in reply to Scott
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                says:

                Scott, the US is far too involved in the domestic politics of other countries. It should shut up and respect the integrity of their borders. i.e. a return to classical international law would be better

                http://unqualified-reservations.blogspot.com/2008/05/ol5-shortest-way-to-world-peace.htmlReport

              • Avatar Scott in reply to Scott
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                says:

                Murali:

                In general I agree. However, many of these countries that want the US to stay home also want the US to intervene when things go bad in some third world cesspool or they need something done. No one calls on Canada. Sorry, but you can’t have it both ways.Report

              • Avatar Murali in reply to Scott
                Ignored
                says:

                Scott, a lot of countries may want a lot of things, but it does not necessarily mean that the US ought to give it to them.

                A simple thought experiment: What would happen if the US tomorrow started following classical international law?

                Would the US be better off?
                Would the world be better off?Report

          • Avatar James K in reply to Stillwater
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            says:

            The WTO has codified principles which essentially prohibit the domestic policy of member nations from imposing quality assurances, envirnomental and other regulations, subsidies for domestic sectors of the economy, and restrictions of any kind on imports.

            You are mistaken, WTO rules allow trade restrictions for environmental and health reasons. All a country needs to do is A) show scientific evidence of a threat B) subject domestic and imported goods to the same restrictions. All WTO rules stop you from doing is engaging in protectionism while using the environment as an excuse.Report

        • Avatar Stillwater in reply to E.D. Kain
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          says:

          I should say, rather, that any of the above activities which are deemed to give domestic market participants an economic advantage, or are deemed to give a foreign participants in the domestic economy a disadvantage, are subject to legal action.Report

          • Avatar James K in reply to Stillwater
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            says:

            While I was at university I actually read a paper that discussed the WTO’s approach to these cases. The WTO’s attitude is that the rules have to be consistent – you can’t impose harsher standards on foreign goods than domestic ones. Disparate impact is not a problem, avoiding WTO sanction is as simple as using the same rules for foreign and domestic goods, and applying the rules consistently.

            Also, if the WTO finds against you for inconsistency, you can avoid sanction by bringing your environmental laws into line.

            I don’t see how these requirements could be problematic.Report

  7. Avatar Mike Schilling
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    says:

    Purist libertarians, who profess to envision a feasible path to libertopia, regularly argue that moderate libertarians entrench state power and impede the path to a truly free society by supporting taxpayer-funded school-voucher schemes, or government-mandated “personal account” retirement savings programmes.

    Precisely as communists argued that social democrats were the true enemy, since that sort of amelioration of capitalism would only delay the revolution.Report

  8. Avatar Elias Isquith
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    says:

    Good post, E.D. Will respond soon (hopefully).Report

  9. Avatar James K
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    says:

    A very interesting piece Erik (and yours as well Elias). I’ll put up a reply of my own over the weekend.Report

  10. Avatar Michael Drew
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    says:

    Neo-liberals, to my understanding, aren’t classical anythings. They’re modernist technocrat tinkerers who happen to think (among many other things; this is not a credal or necessarily even central belief) that lightly regulated (but regulated!) markets are mechanisms that tend to produce the best policy outcomes in the modern global capitalist system we happen to exist in; hence they think that the right default approach to governance in this context is to rely on markets to do the heavy lifting of making policy come out the best it can (because they think that, with limited government help, they will do this, not because of adherence to classical liberal principles), but that further improvements can and should be be made after that through wise, preferably light-handed government interventions. They depart most strongly from classical liberals when, despite their beliefs about the presumptive best approach being a market-oriented one, they will depart from that presumption with no twinge of principled guilt when in a given case they see a compelling reason to approach a problem from a fundamentally different, perhaps more intervention-inclined posture.Report

    • Avatar Michael Drew in reply to Michael Drew
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      says:

      …By the way, does anyone rally to the name, Neo-Liberal? Is anyone willing to say, I’m a neo-liberal, and here’s what that is? Or is it just a purely perjorative name that some people have applied to a body of ideas they don’t like? In which case it would seem it could be pretty much anything within a general proximity to the kind of ideas it was initially coined to “describe.” If no one’s going to say, “Yeah, I’m one of those, and you’ve got it all wrong,” then who knows what it is? It is whatever the people who want to talk about it (with sour looks on their faces) are going to say it is since it isn’t actually anything itself (my above comment, which is just my impression of the term and the ideas of the people to whom I have seen it applied, notwithstanding).

      Just an observation about problems with words and names, ie strings of letters. What’s in a name? Conservative. Liberal. What’s in a name? Names are words. What’s in a word? Oh, yeah: letters.Report

  11. Avatar Misaki
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    says:

    >For a while I was quite enamored with this idea, partly because I found the argument that front-end distribution of resources (negotiated between employee and employer) was preferable to back-end distribution of resources (welfare benefits). And how better to achieve this than a more vital labor movement?

    The better way to achieve this is to convince people that they should work less, causing a scarcity of labour not by a restriction on who is allowed to work, but by reducing the total amount of work a given number of people want to do.Report

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