Saturday, September 08, 2012

Free to Choose Rebuttal 2

Keith has graciously responded to my first rebuttal here. I'd like to again thank Keith for engaging in this exercise as it has forced me to improve my understanding of libertarians and it's relationship to objectivism. I've responded to him below. I can see his position that the government spending is getting out of control, but I think where he is coming from is that government is crowding out private delivery of the same services, whereas I am coming from the view that corporations are externalizing their costs onto the government.

Keith's truncated statements (truncated for brevity, visit his site for his full argument) are in italics.

Without further ado, let us proceed.

I can prove that libertarianism is much bigger than objectivism: Locke, Adam Smith, Bastiat, De Tocqueville, founding fathers, Edmond Burke, Von Mises, etc...

The founding fathers were not libertarians, they limited federal powers but left everything else to the state level, plus the Constitution provides for the establishing of post offices, granting patents, regulating commerce between the states and suspending the writ of habeus corpus . I'll still concede that libertarianism is bigger than objectivism, but I'll still contend that objectivism injects the worst ideas into libertarianism.  By adopting Rand as one of your own are you also taking ownership of her philosophy?

I believe Friedman deserves a... Freedom is about you, about the individual. You might not fight for freedom yourself, but respect others that do.

The best thing about individuals is what they can accomplish together.  Collectively. Yeah I said it. Collective action can be voluntary.

I like using the word liberty because it is a good name for what is important to me and because a lack of freedom is one of the biggest problems...

I feel the same malevolence has been leveled at the terms "collectivism", "collaboration", "communal".  Indigenous people have lived in a communal, collective fashion for thousands of years without devolving into a totalitarian state until an unfortunate encounter with Western civilization lead to their extermination and, in less violent circumstances, enslavement and indoctrination.

It should be noted that when trying to hook the population into entering “voluntarily” into the bloodshed of the both world wars, the words “liberty”, “freedom” and “democracy” were flying thick. All to persuade the masses to fight for imperial interests. The ruling elite with all the lip-service paid to democracy and freedom had no intention of creating a more just society(pg 30, Economics Unmasked by Philip B. Smith & Manfred Max-Neef). Do you think World War 2 was against evil? It essentially boiled down to some imperial powers not being comfortable with Germany controlling resources that they already controlled or wanted to control. The same corporations and bankers funded and supplied both sides of the war.

I would privatize social security, not kill it. That is the libertarian solution. I think about it in terms of policies and ideas.

Privatizing Social Security is certainly a libertarian solution as it links contributions to individuals and certainly fixes the free rider problem (if you are inclined to view it as a problem). But what is the solution for those that have insufficient contributions?  Private charity?

No one has perfect knowledge in a transaction. But in the free market, you have more knowledge, more choices, and ...

The free market and the calculations rendered by the "invisible hand" presupposes a perfect knowledge of the market, via information transmitted by prices.  To be clear, this is not my obsession with perfect knowledge, this is an assumed attribute of the free market (I believe you referred to it as a “symphony”).  What I am saying is this assumption is incorrect.  If you agree that the knowledge is not perfect, then perhaps the model is insufficient.  And I am in agreement that liberty, available for all, does lead to greater quality of life.  But does freedom include the freedom to exclude or to restrict?

Greed is a term that others put on libertarians. I prefer self-interest. This is an example of Hayek’s point...

Greed is a term that you used in your initial tweet to me (which you repeated here). This is a very objectivist position, and I find it indefensible. Greed is not a virtue. If you prefer rational self-interest (another objectivist term) can it be defined in a way as not to infer greed?  I personally do not want to demonize anyone, I want to like libertarians, so help me out. 

Do you think that the dream if becoming rich is a way for the plutocracy to get the poor and middle class to buy into the system?  Statistically speaking the poor and middle class will ever make up the majority, while the rich make up a select minority. 

Corporations existed in the time of Adam Smith, in cities at least. Corporations are people...

Corporations have existed since the 1500's but the were limited in scope and limited in time. It wasn't till 1819 that they were recognized to have the same rights as persons under law, and this was after Adam's time.  An unfortunate ruling this was because corporations are not people, nor do corporations have the same goals or motivations as natural persons.  Corporations are immortal (as long as they turn a profit) and the people that work for a corporation are interchangeable.  So equating people and corporations as similar entities is in error.   Calling corporations “voluntary associations” does not mitigate the twin facts that in this economy we all must work to eat (even more true in a libertarian sense) and the fundamental drive of any corporation, mandated by law, is a fiduciary duty to the shareholders (owners) to provide the maximum return.   If you really cherish liberty and responsibility, then you should be ok with having only partnerships and sole proprietorships as the business models for free enterprises. 

I agree that TNCs are threatening, but less so because the consumer is holding the credit card...People in Greece are rioting in the streets!

People are rioting in Greece because the government is impoverishing the people at the behest of bond holders.  Who makes up the bond holders?  Mostly banks, TNC's, hedge funds and other countries.  

Libertarians have a strong dialectic on the nature of force.  What is required for the transmission of force?  Power. What stands in for power in our society?  Money. What lends to the permanence of power? Laws. Who makes the laws? Govt. And if we are honest with ourselves many of those laws are heavily influenced (if not written) by TNC's.  So let us engage in a thought experiment and see what changes in the equation with a small govt.  How is power transmitted?  If your answer is money, then does it matter who makes the rules/laws?

People love to point out that corporations and individuals are bad...

You have acknowledged that corporations tend to co-opt the government apparatus for their own ends.  Much of the "dumb government policy" is written by TNC's. Do you really expect this behavior to change because one part of the equation has changed leaving intact the power and influence of TNC's?  This behavior is embedded in corporate structure and this doesn't go away when governments go away (or shrink).  So you don't need to look at them as a group, you only need to look at the fundamental framework that every corporation is built on.  This is a blind-spot in Milton's work and a blind-spot in libertarian thought.

You don’t know everything about a supply chain, but you can know something. We live in an information age...

Indeed we live in an information age where we are deluged by terabytes if we so desire. So then why can we not internalize costs and make our economic model complete?  Are we talking about the department stores available to the masses, or the “special stores” available to the politburo? I've already acknowledged that the soviet solution was woefully inadequate, but just because price information keeps our retail stores full, doesn't mean that it is taking a true account of the cost to our ecosystems to keep them full.   The neoliberal model, economic liberal model, classical liberal model and the Keynesian (Social Liberalism) model have a backwards view as to where the environment figures into the economy. 

I don’t worry about deregulation because I see the free market as a symphony and the government as screwing things up, as sand in the motor...

Capitalism has a tendency to slowly consume its own capital in its drive to increase bottom line profits so the system comes with its own “sand”.  This is an inevitable result of need for exponentially growing profits, growth has to hit hard limits. Deregulation in theory seems like a good idea, except that it leads to the concentration of power and influence (i.e. financial sector) so it appears that even in libertarian literature that some gov't intervention is necessary to guarantee competition, meaning that a pure free market (laissez faire) model is unbalanced, therefore incomplete.   As for competition, I agree competition is better (collaboration better still) than monopolies and cartels, but I historically speaking capitalism's tendencies have been towards both of the latter. 

Yes, the US was never a purely free market, but the reason it became a superpower is because it was the “land of opportunity”...

I would counter that the "American System" was successful enough to be copied and successful enough to threaten the Anglo-Franco hegemony to spark WWI.  I agree it was about freedom, but also freedom to lay down tariffs to squash foreign imports (see the earlier paragraph where I ask about freedom to exclude and restrict, is there some inconsistency in the application?)

Globalization doesn't benefit anyone but corporations access to raw materials and cheap labour. The counter argument that we get cheaper goods because of it, rings hollow when your factory job has been outsourced to a country where they can pay their labourers half of what you were earning and no benefits.  Of course you'll need all the cheap goods you can get to make your welfare cheque stretch further. 

We aren’t waiting to address the poor. That is what vouchers, and a negative income tax, etc. are all about...

I'm all for effective spending and cutting waste. You want to get people working again, you are going to have to realize that corporate supported globalization strategies are not helping your cause. It is my view that privatized insurance and health care tend to want to take care of people who can pay and the rest get sub-standard service or none at all.  I have experience with public health care and had a few surgeries that would have wiped my family out had I had to pay for it.  My care was excellent and I am better for having it, money was never a question.  So I believe in universal health care, and I believe it is the hallmark of any great society. 

It sucks to live for the government. I knew someone in Denmark who wanted to take some of his retirement savings and buy a boat... In the private sector, you’d go to jail for this.

And yet this is what will have to happen for any serious drive to privatize SS.  You will have to slash the benefits.  And as for people going to jail for fraud in the private sector, after the last rounds of shenanigans with LIBOR (and every financial scandal leading up to that back from 2008) I am losing faith that anyone will go to jail from the too big too fails. Is this the kind of accountability we are to expect from the private sector? I know you response will be along the lines of “the government is not doing its job”, but how would you call these entities to heel without strong government? Where are the people with their credit cards, extracting the justice that has been denied?

I believe we require industrial civilization. I agree that Friedman assumes this and I do too. You talk about Hayek taking us backwards, but it turns out you want to...

Prince Claus of the Netherlands once said:

"Indeed, I believe that mainstream economics represents in many respects an orthodox consensus which can be shown to be deeply conservative. Such orthodoxy nearly always tells us we need more of the same that got us into the problem, to get us out of it again. It seldom tells us we need something new. Something new."

This seems to be a pretty common presupposition.  If “x” goes wrong, we need more “x”.  For example, deregulation of the financial sector was a pretty terrible idea so the calls were for even more deregulation.  The Federal Reserve made the situation worse by not exercising it's power of oversight, so the response?  Give the Fed more power.  How can we make industrial civilization better?  The answer is...more industrial civilization!   Other than the fact that industrial civilization is unsustainable and is killing our land base, it seems to be a good idea.

You can love what big corporations deliver (as I secretly do) but that doesn’t change the fact that the production and delivery is unsustainable.  You want to go forwards?  Then take the next step beyond industrial civilization, hint: it won't look like big cities and bright lights, 8 lane highways and mega airports. 

With regard to your clear-cut analogy. Private corporations talk about sustainable forestry, and have for decades... The idea of companies dumping toxic waste are long gone.

So I wonder when that talk will turn into action?  Or perhaps they need some more time to talk?  Perhaps another couple of decades?  Private ownership of land is not a panacea,  it gives license to dispose of ones property the way they see fit to do so, and if that means to clear cut the land for a higher ROI, then that is what will happen.  The only time that private ownership protects land is when it is bought by an entity that has that has the primary motivation to protect the land from exploitation. Of course who among us has the luxury of purchasing land that will not be used "productively".  These are systemic effects of the drive for profit using an economic system that does not calculate real costs. 

As for companies no longer illegally dumping a quick google search turns up some easy and recent examples.  As long as the fines for getting caught are less that the ongoing cost of paying for legitimate disposal, dumping will continue.   The interesting thing is this is corporations operating in flagrant violation of government, so either they do not fear the monopoly of force, or they know that the monopoly of force is there to protect their interest and not the people (or land). 

The military waste isn’t as much as you think. The US can afford a military, it is about 3% of GDP which is typical. We do live in a dangerous world — been to Syria or Somalia recently...

I'm glad you worry more about failing education than the military might of two nations that have never posed a direct threat to the US.   How about peace through generosity and helping?  Nothing says that the US cannot arm every citizen (who would invade a country where every man, woman and child had access to firearms?) with an emphasis on leadership and conduct a foreign policy that has the world looking at the US as a friend and not a soldier.  You want democracy and freedom to spread, live the example and stop exporting it at the end of a gun barrel.

Examining the social spending I would agree that it seems to be getting away from your government (military spending outstrips SS by itself, but just barely). The question to ask is why does a program, that was initially supposed to be a supplement to private pensions and savings, now count as the primary retirement savings for over 70% of Americans?  I suspect that you would answer that the government crowded out legitimate private competition over time, but could it be that SS was filling in a gap that was left when private pensions and savings began to dry up?  Why would a corporation bother setting up a pension for staff when it can externalize those costs onto government?  Private pensions and privatizing SS will only work if it can be made profitable to someone, and the profit is likely to come at someone else's expense. 

You apparently don’t know that there are many kids in cities (not rich suburbs) where the costs are $24K per year yet people still fail. It isn’t a matter of budget cuts, there haven’t really been any...

I wonder how it is that they could spend up to 24K per child and not be able to afford basic school supplies?  Reference?  No budget cuts? Reference?

How about go one step further. Get rid of schools altogether. But keep libraries and the Internet free for all.  Establish a rudimentary course for basic reading, writing and arithmetic, after that let those who want to learn more teach themselves or organize into peer groups that pursue specific interests. 

Private schools are not better because of the money. It is for other reasons. They have many...

Private schools are in part better because of their exclusionary nature. Teachers have to teach to a narrower range of student ability than they do in public schools.  Of course I still think that public educations inability to afford basic supplies because of budget cuts must hamper their ability to effectively educate, what say you?  So I say instead of forcing education on kids and a static curriculum, allow them to learn what they want when they want it. 

The root incentive for corruption comes from big government. The best way to minimize corruption is to minimize government which maximizes competition...

I would disagree, the root incentive for corruption is having an economic system that is divorced from morals and ethics. If an activity makes money, society does it, if an activity doesn't make money, it will not appear in a free market(or any market), it cannot. It has to be external to the free market.   The rest of your paragraph I've addressed earlier. 

I don’t know of the Jan Wong story and I’m not interested in anecdotes. I can say that NHS is worse...Obama doesn’t even talk about that problem, the Republicans understand it and think about it.

Friedman was full of anecdotes, but he has some interesting things to say.  I'm not familiar with the workings of NHS so I'll have to take your word for it. I am familiar with the workings of socialized medicine in Canada and I have few complaints.  Healthcare in the US is exemplary, for those who can pay or for those with the right insurance.  As for Republican thought, the same thought brought us trickle down economics, financial sector deregulation, No Child Left Behind, among others. Of course, nobody is perfect.  I really doubt that any answer lay with these two parties.  If you read Carroll Quigley's Tragedy and Hope you'll understand why   (you don't have to read the whole thing, just the first 200 pages of the book). 

Friedman doesn’t have any moral blindspot. He has provided a safety net. The family is another one, so are churches, so is a negative income tax, so are vouchers, etc....

Most of Friedman's solutions seems to be external to the free market.  I wonder why that is?  Privatization comes from the root Latin word privare (literally, to rob).  To privatize means to deprive use of, which is the fundamental power of private property laws, it is not that you can do what you want with the land, it is that you can prevent others from having access to the land.  You, like other libertarians, think that private property laws are there to protect you, but they are there to protect the plutocracy. Their ability to buy up and deprive others of the best land is disproportionately large and they will continue to do so, protected by the private property laws that libertarians insist everyone respect.  This, I think, is why the libertarian position is the least threatening to the wealthy, you seek small weak government and strong property laws, which seems like a good deal for the rich. 

Although governments are perfectly able (and sometimes willing) to destroy families, what commonly destroys families is the imposition to earn or starve. This is not a new phenomenon, aristocrats have ever forced the plebeians into a position of work or starve.  And by work I mean labouring not for yourself or for the benefit of your family but primarily for the benefit of the landowner you are forced to work for after being dispossessed of your lands held in common (see the great enclosure of Britain centuries past, that was an excellent example of privatization at work).  You can read about what the British experience was like in The Great Transformation by Karl Polanyi, or the American labour experience by reading Howard Zinn's A People's History of the United States.   So if you still think that it is governments and collectivist action that destroys families we can talk again as to why you still think that. 

Crime is not primarily because of inequality... Public housing projects cause crime much more than inequality.

Does Cuba's massive inequality outrank the US?  I find the claim dubious as I do not recall Cuba ranking high in the book The Spirit Level by Richard Wilkinson. Looking at Cuba’s Gini coefficient (which is an accepted measure of income inequality) it used to be at .24 and then rose to .38 after the collapse of the Soviet Union. The US ranks at .45 according to the CIA World Fact Book. So while Cuba’s inequality has risen due to external circumstances it is not as high as the wealthiest nation on Earth. Seems to me like there is already much in the way of rational self-interest going on in the US.  Let's look at you definition of what qualifies as a crook, getting the necessities of life from the black market from a common sense perspective does not make one a crook, it may be illegal, but it isn’t immoral or unethical.

I feel you are making a couple of assumptions with your references to the USSR, the USSR does not represent my position.  I, in fact, agree with most of your assessments of the USSR. Where I disagree is that it was not communism in any Marxist sense, it was barely socialism. It was state capitalism.  Substitute the 1% with the politburo and substitute the profit motive with the production quota and you have a good mirror image of the growth economy of the US and of the USSR. To be clear, if you want to refute my position, you would be refuting ecological economics and a steady state economy.   

Your assertion that public housing projects is a greater cause of crime than inequality is an odd one. Let us examine it in greater detail. Who uses public housing?  It would be the poor.   Transplant all the poor out and put in middle class people and what would happen to crime?  As long as they still had their net worth they'd be fine. Take it one step further, replace the poor with the rich, crime almost disappears.  So it's not the place, it is level of wealth disparity. 

This is much more than just cutting the military. That is really the only specific proposal you can suggest after all this reading and writing?

From what I can see the US spends about 6$ on social spending (pretending that all the rest of the spending is social spending) for every 1$ on military spending. Is there waste and program overlap? Certainly. But I would rather spend twice as much helping people and the land base than spend 1 cent on killing people

As for what I could suggest, I have many suggestions, first would be to fix the economic model to include all costs, next would be to shift from a growth paradigm to a steady state removing the profit motive and debt based money, next would be to re-examine US foreign policy and stop the imperialist expansion, next would be to create jobs that help the land base, where there are more trees than the year before, more salmon swimming in the rivers than the year before, more biodiversity than the year before. This is true profit, this is true wealth, not pieces of paper, pieces of debt

1 comment:

KeithCu said...

I wrote a response: