Intellectual response to socialism/big benevolent government??

Economics Economics Questions
1

Hello people!

I’m pretty new to economics and thinking about how it actually affects me, and people in general. Either reason or fortune has led me toward free market capitalism, as opposed to the apparent corporate capitalism that presently appears to exist in the UK/US. However i’m still very ‘green’ on the subject and could do with some help…

One of my colleagues is a ardent marxist/trotskyist. Although he believes in some wonderful ideals, he believes that a welfare state/comprehensive education system etc is the way forward in order to de-stratify society and promote fairness…seeing the governments role in creating such a society as pivotal.

Anyway, I was hoping if somebody could provide me with an intellectual argument against this ideal…socialism/marxism/trotskyism,

Also, he emailed me the following argument - which doesn’t appear as socialist as he appears though… How do people people feel about the ideas therein?

Tony Judt, A manifesto for a new politics

Something is profoundly wrong with the way we live today. For 30 years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose. We know what things cost but have no idea what they are worth.

The materialistic and selfish quality of contemporary life is not inherent in the human condition. Much of what appears “natural” today dates from the 1980s: the obsession with wealth creation, the cult of privatisation and the private sector, the growing disparities of rich and poor. And above all the rhetoric which accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth.

We cannot go on living like this. The crash of 2008 was a reminder that unregulated capitalism is its own worst enemy: sooner or later it must fall prey to its own excesses and turn again to the state for rescue. But if we do no more than pick up the pieces and carry on as before, we can look forward to greater upheavals in years to come. And yet we seem unable to conceive of alternatives.

[…]

We need to rethink the state, and rearticulate the language of social democracy. Social democrats should cease to be defensive and apologetic. A social democratic vision of the good society entails from the outset a greater role for the state and the public sector. The welfare state is as popular as ever with its beneficiaries: nowhere in Europe is there a constituency for abolishing public health services, ending free or subsidised education or reducing public provision of transport and other essential services. We have long practised something resembling social democracy, but we have forgotten how to preach it.

In the early years of this century, the “Washington consensus” held the field. Everywhere you went there was an economist or “expert” expounding the virtues of deregulation, the minimal state and low taxation. Anything, it seemed, that the public sector could do private individuals could do better.

Today there has been a partial awakening. To avert national bankruptcies and wholesale banking collapse, governments and central bankers have performed remarkable policy reversals, liberally dispersing public money in pursuit of economic stability and taking failed companies into public control without a second thought. A striking number of free-market economists, worshippers at the feet of Milton Friedman and his Chicago colleagues, have lined up to don sackcloth and ashes and swear allegiance to the memory of Keynes.

This is all very gratifying. But it hardly constitutes an intellectual revolution. Quite the contrary: as the response of the Obama administration suggests, the reversion to Keynesian economics is but a tactical retreat. Much the same may be said of New Labour, as committed as ever to the private sector in general and the London financial markets in particular. To be sure, one effect of the crisis has been to dampen the ardour of continental Europeans for the “Anglo-American model”; but the chief beneficiaries have been those same centre-right parties once so keen to emulate Washington.

In short, the practical need for interventionist governments is beyond dispute. But no one is rethinking the state. There remains a marked reluctance to defend the public sector on grounds of collective interest or principle. It is striking that in a series of European elections following the financial meltdown, social democratic parties consistently did badly; notwithstanding the collapse of the market, they proved conspicuously unable to rise to the occasion.

If it is to be taken seriously again, the left must find its voice. There is much to be angry about: growing inequalities of wealth and opportunity; injustices of class and caste; economic exploitation at home and abroad; corruption and money and privilege occluding the arteries of democracy. But it will no longer suffice to identify the shortcomings of “the system” and then retreat, Pilate-like, indifferent to consequences. It is incumbent on us to reconceive the role of government. If we do not, others will.

[…]

Much of what is amiss in our world can best be captured in the language of classical political thought: we are intuitively familiar with issues of injustice, unfairness, inequality and immorality – we have just forgotten how to talk about them.

George Orwell once noted that the “thing that attracts ordinary men to Socialism and makes them willing to risk their skins for it, the ‘mystique’ of Socialism, is the idea of equality.” This is still the case. It is the growing inequality in and between societies that generates so many social pathologies. Grotesquely unequal societies are also unstable societies. They generate internal division and, sooner or later, internal strife – usually with undemocratic outcomes. As citizens of a free society, we have a duty to look critically at our world. But that is not enough. If we think we know what is wrong, we must act on that knowledge. Philosophers, it was famously observed, have hitherto only interpreted the world in various ways; the point is to change it.

via guardian.co.uk

In order to even start thinking about a new politics, here, in the US, a long list of other things have to fall into place. Thomas Friedman wrote recently about how a ‘radical center’ could develop in the US as a counterweight to the whiplash of current extremism:

Thomas Friedman, A Tea Party Without Nuts

The radical center is “radical” in its desire for a radical departure from politics as usual. It advocates: raising taxes to close our budgetary shortfalls, but doing so with a spirit of equity and social justice; guaranteeing that every American is covered by health insurance, but with market reforms to really bring down costs; legally expanding immigration to attract more job-creators to America’s shores; increasing corporate tax credits for research and lowering corporate taxes if companies will move more manufacturing jobs back onshore; investing more in our public schools, while insisting on rising national education standards and greater accountability for teachers, principals and parents; massively investing in clean energy, including nuclear, while allowing more offshore drilling in the transition. You get the idea.

How best to promote these hybrid ideas? Break the oligopoly of our two-party system. [emphasis mine.] [Larry] Diamond suggests two innovations. First, let every state emulate California’s recent grass-roots initiative that took away the power to design state electoral districts from the state legislature and put it in the hands of an independent, politically neutral, Citizens Redistricting Commission. It will go to work after the 2010 census and reshape California’s state legislative districts for the coming elections. Henceforth, districts in California will not be designed to be automatically Democratic or Republican — so more of them will be competitive, so more candidates will only be electable if they appeal to the center, not just cater to one party. (There is a movement pressing for the same independent commission to be given the power to redraw Congressional districts.)

Second, get states to adopt “alternative voting.” One reason independent, third-party, centrist candidates can’t get elected is because if, in a three-person race, a Democrat votes for an independent, and the independent loses, the Democrat fears his vote will have actually helped the Republican win, or vice versa. Alternative voting allows you to rank the independent candidate your No. 1 choice, and the Democrat or Republican No. 2. Therefore, if the independent does not win, your vote is immediately transferred to your second choice, say, the Democrat. Therefore, you have no fear that in voting for an independent you might help elect your real nightmare — the Republican. Nothing has held back the growth of independent, centrist candidates more, said Diamond, “than the fear that if you vote for one of them you will be wasting your vote. Alternative voting, which Australia has, can overcome that.”

So we are going to have to break free of the stranglehold of the past to push ahead.

2

Standard political drivel. There are right-wing flavors of the same statist garbage. Is there anything specific he says which you would like help refuting?

Clayton -

3

Hmmm…specifically he appears to despise ‘capitalism’ the privatisation of anything…education/healthcare etc and feels that the gap between the rich and poor would increase…with two tiers forming…and the poor suffering…often claiming society would become a race where only the fittest survive.

Also, he doesn’t differentiate between corporate capitalism and capitalism…and perhaps feels that crony capitalism is the inevitable result of any capitalist system.

I’m not sure what the specifics of Trotsky’s brand of communism are, but that’s the idea he claims to subscribe to…

4

you should see if he is willing to socialise his life, move into his house and make him do stuff for you. just make sure you always start the day with less than him so the transfers go your way.

5

So he thinks the people who steal stuff are more likely to be benevolent than people who produce stuff?

Freedom philosophies don’t assume uptopia. We wish to achieve an optimal result. (although idealist libertarians would not put it that way)

Attempts to achieve perfect results require aggression, theft, murder, and slavery.. whether pro-rated slavery or full slavery. Attempts to ‘improve’ resource allocation past the voluntary incur a moral hazard of the worst sort. Simply observe the more we redistribute the greater wealth diversity has become.

IDK just read the masters, it’s all pretty clear. Motivation argument. Calculation argument. Capture argument. Mises, Hayek, Rothbard.

All you have to ask is if once you say it’s ok to enslave, steal, or murder why do you think it will be the good people who claim this power? What in history makes one think it will be the good people? What end will force not be justified?

6

Nothing is said in that Tony Judt piece. Calling it fluff is too much of a compliment, as even the rhetoric is uninspired and worn out. It’s like the most vapid social democrat blogger running on auto-pilot.

As for Friedman, he can go on tinkering with the system all he wants, while ignoring the root problems of the democratic state. The state can provide us everything we want, so long as it’s adjusted juuuuuuuuust so.

7

“Anyway, I was hoping if somebody could provide me with an intellectual argument against this ideal…socialism/marxism/trotskyism”

It seems to me that most of the arguments put forth by Socialists are emotional in nature rather than intellectual. As such, perhaps you should be looking for an argument that appeals to his emotions instead of his intellect. An emotional argument may be a logical fallacy but as long as you know that and are using it as a tool to get through to your friend, I can see no reason why you shouldn’t use it as a hook.

It’s just a thought.

8

“The crash of 2008 was a reminder that unregulated capitalism is its own worst enemy…”

Oh boy. I stopped reading at that point.

9

Thank you muchly for your responses :slight_smile:

I do agree that socialists use emotional rhetoric when expressing their points..or ignorantly use words like greed or fairness..which is annoying during discussions.

10

The concept of socialism and communism, of all sorts, is based upon emotion. It is much easier to make people believe that the government wants to take care of them as opposed to companies. Every society that has implemented one of these economic theories has either failed or deeply worsened. The concept as a whole oppresses innovation, creativity, and hard work because people will only do as much as they have to in order to survive if they aren’t rewarded for extra work.

You know, everyone who promotes socialism/communism has a deep distrust in human beings. They believe that capitalism will get out of hand if there is no government to protect them, but it’s simply not true. If they are so pessimistic regarding the nature of human beings, why do they want to put more of them in power? Think of what a limited government we had at the beginning of our country’s founding. Everyone worked hard. People helped each other. And, after all of this, we developed the United States. Yet we constantly see that one dictator like Stalin can kill tens of millions of people while only in power for a short time.

And, as for the comment on financial regulation - the financial crisis was not due to a lack of regulation. There were already regulations in place for the market. Goldman Sachs, CountryWide Financial, and all of the other companies who got bailout money knew that, if they followed the federal government’s regulations, there’d be no excuse for the government to not bail them out. Once the Lehman Brothers bailout happened, the other companies knew they’d get bailed out too. If there were no regulations, we could have simply let them fail, prosecuted certain people for fraud if necessary, and distribute their own assets among shareholders. Then healthier and more responsible companies would have had a better chance at getting ahead. That is what I call fairness.

The idea of a workers’ revolution has evolved from the idea that everyone has a right to a job. No one who believes in that revolution remembers that, without the owners and creators of companies, there will be no jobs. There’s no use for a heart without a body.

11

So, does he believe that bodies should be private or public? If public, to what extent do I (as a member of the public) have claim to the use of his body or, more to the point, his daughter’s body? If private, then is “privatization” really so bad? Is it not strange that something so evil must be tolerated in a small dose in order to rectify his ideals with the obvious nature of reality (that every man’s body is his own)?

The poorest will always be those who are destitute. That the gap between destitution and the richest individuals is continually increasing is a sign of progress.

But the State is surely to blame for this. After all, the very same argument that statists march out against anarchism (“there has never been an anarchic society!”) doubles back on themselves on every social ill, including the class stratification of society. Who else can be to blame but the State?

Go back and read the history of law. Read the laws protecting the “rights” of slave-owners and slave-merchants. These laws were backed by the Prince (i.e. the State) and, without them, the slave trade would have been a hell of a lot more difficult since each slave-holder would have to bear his own costs in hunting down, punishing and retaining slaves. The State has played an integral role in socializing the costs of slave ownership onto the taxpayers. A lot of the abuses of “capitalists” are in the same category… they would not be possible without the aid and financing of the State (e.g. look at the role that the Chinese government plays in enabling Western corporations to exploit its workforce with artificially low wages).

Yeah, it’s the poor that always suffer the most. Do you think the Bolshevik revolution hurt the poor or the rich (who fled) more? Do you think the Great Leap Forward hurt the poor or the rich (who morphed into Communist party leaders) more?

Evolution is “always on”. Check out 10,000 Year Explosion by Gregory Cochran and Why Beautiful People Have More Daughters by Miller and Kanazawa. The fact of biological evolution, of course, is no moral justification of aggression by the violence-elite (social “darwinism”) but it’s silly to suggest that there’s anything that can be done to stop evolution from occurring.

Yeah, that’s the root of a great deal of confusion. High profile corporate statists - e.g. Lloyd Blankfein - often act as “heels”. They draw the ire of the public and call themselves “free marketers” so as to focus the anger of the public onto the wrong enemy. It is an act with a long tradition started at least by the so-called “Robber Barons” of the 19th century who were supposed to have been big free market buffs, all the while they were raking in multi-million dollar sweetheart deals from the Federal government in the form of outright contracts and other legal/political favors. Of course, the free market - not the State - is the true enemy of the Lloyd Blankfeins and JP Morgans of the world, the Monopoly Men, who cunningly turn the anger of the public toward what they know to be their true enemy: the free market. Do you think Lloyd Blankfein has the slightest fear of seeing the inside of a jail cell?? He can afford a legal team the size of an Army division… hell, his lawyers (at GS) probably wrote half the rules which the morons in Congress think they’re going to use to nail him. He’ll never get in trouble, his operations have always been 100% legal because Goldman Sachs made sure they were legal… even if they had to lobby to have the law changed to make it so. This is not capitalism, it’s cronyism. Even the dittoheads would be repulsed if weren’t too thick-skulled to understand how the system works, lapping up every word that falls out of Limbaugh’s, Hannity’s or Beck’s mouths as if it were Truth Incarnate.

It is the result of any system in which a State exists. The “crony capitalists”, i.e. large business owners, will seek to form a cartel or cabal enforced by the apparatus of the State. As anyone familiar with basic economics knows, cartels are inherently unstable but the State can be used to make a cartel agreement legally binding, effectively making defection impossible.

Clayton -

12

No, they have absolute trust in human beings. So long as people share their values and definitions of justice, equality, etc.

For instance, Judt says early in his piece, “We know what things cost but have no idea what they are worth.” Of course, what something is ‘worth’ is based on the subjective value one ascribes to it; what Judt ultimately means is, we don’t value things as he values them. If I don’t value, say, low energy emissions as highly as Judt and his comrades do, then I simply don’t understand what low energy emissions are really worth. And there’s only one way to make me respect its true worth…

13

People can say all kinds of things when the facts are not investigated.

I can say my neighbor is an evil pedophile who eats babies, and people may believe me if they never see him. But if there has been a hidden video camera from day one recording his every move, then we can know the truth.

You friend is making all kinds of claims. That capitalism promotes poverty, that socialism or communism creates a fair shake for everyone. Maybe, maybe not. To know the truth we have to investigate the facts, right? What has happened to countries that had capitalism, and what to countries that had socialism and/or communism?

If we see that the rich got richer under capitalism, but that THE POOR GOT RICHER ALSO, EVERY SINGLE TIME, then that makes one think a bit. If we see that socialist countries got poorer and poorer overall, EVERY SINGLE TIME, that too makes one scratch the head.

OK then, there is a lot of homework for you. The site has plenty of resources to find out the facts.

And there is then an explanation of WHY these curious things happen. Mises wrote a nice book called Socialism, laying it all out. It’s a free downlaod here.

14

I like the line about the welfare state being popular with its beneficiaries. Well, I’m shocked that people like being handed money…

15

Socialism leads to “fairness” where everyone (except maybe the ruling elite and their friends) is relatively equally poor.

Free market capitalism naturally results in wide gaps between the “rich” and the “poor.” However, the “poor” in general will still benefit from the opportunities and productivity afforded by the “rich,” increasing the baseline standard of living.

Central economic planners and “fairness” advocates cannot understand this, or pretend not to understand it.

16

Thank you lots for your help people..

I’ve got much reading to do - am presently reading Economics in One Lesson - and may jump to Mises’ Socialism. I did mention the Bolshevik revolution and the closing down of mosques/churches indicating that socialism/trotskyism expects everyone to have the same belief and would ensure this by force if necessary…Of course this colleague (who is pretty well read - in this area - unlike myself) said it was this was fabrication… He mentioned a 4 year time period where communism was successful until it was destroyed by external armies…I’ll have to get the dates/specifics off him and may be then, some of the learned historians can offer their views.

17

“Much of what appears “natural” today dates from the 1980s: the obsession with wealth creation, the cult of privatisation and the private sector, the growing disparities of rich and poor. And above all the rhetoric which accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth.”

these sentences alone indicate the complete lack of historical context /knowledge of your friend, unless of course he/she is 16 years old. I suggest you learn as much as you can ( from this web-site) about the real history of freedom .vs statism.. and learn, then point out to your friend how EVERY government action has many many negative consequences and often hurts the people they are “trying” to “help”