From Each According to His Ability…

Hillary Clinton's quest for economic justice

During this week's Democratic presidential debate, Hillary Clinton said putting together the right kind of stimulus package is "a part of economic justice." The remark reflected a major campaign theme for the New York senator, who has declared she would pursue "a new vision of economic fairness" as president.

That slogan should set off alarm bells for anyone who recognizes that economic outcomes result from myriad individual choices. To impose her vision of economic fairness, Clinton would have to override those choices, compromising freedom in the name of equality.

Clinton's aim is economic equality, not legal equality, and you really can't have both. As the economist and political philosopher F.A. Hayek observed, equal treatment of people with unequal abilities leads to unequal outcomes. In this sense social justice is, if not a "mirage," as Hayek argued, at least in conflict with procedural justice.

So it's not surprising that many of the policies Clinton believes promote economic fairness strike others as decidedly unfair. In 2006, for example, she endorsed a successful Commerce Department petition by Syracuse candle makers to impose a tariff of more than 100 percent on candles imported from China.

"Our manufacturers deserve a level playing field," Clinton explained, "and we owe it to them to make sure that others do not unfairly circumvent our fair trade practices." In Clinton's view, then, fairness demands that all Americans pay more for candles to subsidize manufacturers in her state.

More generally, Clinton advocates "smart" trade rather than free trade, insisting on "strong protections for workers and the environment" that reduce the competitive advantages of foreign producers. She wants "jobs that cannot be shipped overseas," which can be achieved only by interfering with companies' profit-maximizing (and consumer-benefiting) decisions. For her, globalization is not what happens naturally when people are free to exchange goods and services on mutually agreeable terms; it's a process that needs to be "managed properly."

Clinton wants to "curb the excesses of the marketplace," which in her view include not just foreign competition but high salaries for corporate CEOs, risk-based insurance premiums, and foreclosures on the homes of people who fail to make mortgage payments. Intent on implementing her "new economic blueprint," she overlooks the possibility that such practices developed for sound reasons and that arbitrarily limiting or abolishing them might have unintended consequences.

When it comes to fiscal policy, Clinton seems to see herself as a kindergarten teacher "fairly" doling out cupcakes, giving no thought to who baked them in the first place. In a recent New York Times interview she worried that "inequality is growing" and waxed nostalgic for the "confiscatory" tax rates of the post-World War II decades.

Clinton would use higher taxes to pay for universal preschool, universal college, universal health care, and universal high-speed Internet access, among other taxpayer-funded goodies. These she calls "the investments we make in each other," and they are just like investments, except that there is no reliable test of whether they make sense, since the people paying for them have no choice in the matter and are not the ones who stand to benefit.

There's a similar problem with Clinton's proposal to "create millions of new jobs by investing in clean energy" through a $50 billion Strategic Energy Fund. When a politician talks about the jobs government spending will create, it's usually a signal that the spending cannot be defended on its own merits. A Strategic Thumb Twiddling Fund could create millions of new jobs too.

In the Times interview Clinton suggested that as president she would be prepared to ram through her economic program on straight party-line votes. "If you really believe you have to manage the economy," she said, "you have to stake a lot of your presidency on it."

The history of central planners and their failures suggests a different lesson: If you really believe you have to manage the economy, you shouldn't be president.

© Copyright 2007 by Creators Syndicate Inc.

Comments

[Warty]

Well, she can probably do a pretty good job of making me poor.

[stuartl]

"If you really believe you have to manage the economy," she said, "you have to stake a lot of your presidency on it."

[shudders]

Has Richard Nixon been reincarnated?

[Sje]

"In 2006, for example, she endorsed a successful Commerce Department petition by Syracuse candle makers to impose a tariff of more than 100 percent on candles imported from China."

WHAT? Next thing you know, Hillary will endorse a petition to extinguish the sun for its unfair competition with the candlemakers...

Oh, no.

That one was a joke.

(Do click the link. It's Bastiat's hilarious Candlestick Makers' Petition written in 1845.)

[Julian Fondren]

From Each According to His Ability...

Hazlitt's Time Will Run Back:

Bolshekov looked troubled. He seemed to have no immediate answer. Peter pursued his advantage: "Let's say I'm an unusual person, a sort of worker genius, and that if I strained all my faculties I could actually turn out ten times as much production as the average worker. But I turn out only 50 per cent more than the average, and yet get praised for doing it--because I am above average. Why should I be so foolish as to show the authorities what I could really do ? I wouldn't live any better. I wouldn't get any more ration tickets than the next man. But once I had shown my capacity, my superiors would hold me up to its continuation--on the principle of 'from each according to his ability.' Therefore I find it wiser never to reveal my ability. Therefore nobody ever discovers that I am not producing according to my ability. Never having put it to a strain, in fact, I never even find out myself what my real ability is."

"This is heresy," said Bolshekov. "I shall turn over as a fulltime assignment to one of my subordinates the task of drafting an answer to it. The answer will be, of course, for my and your eyes alone."

"Why such secrecy?"

"We are never foolish enough to answer criticisms that no one has yet thought of. We merely prepare such answers ready for use."

"But what of the problem that's worrying you?" persisted Peter. "Maybe my criticism goes deeper than we started by supposing. Perhaps--perhaps the aim 'to each according to his needs' is the very thing that prevents us from ever getting 'from each according to his abilities?'"

"But everyone, No. 13, ought to work to the peak of his abilities! It's his duty to work to the peak of his abilities! Why shouldn't he? He's no longer being exploited by a master class!"

"But what he really fears under our present system, No. 2, is that he is being exploited by the slackness or malingering of his fellow workers. And perhaps his suspicions of others arise from his knowledge that he himself is secretly trying to exploit them by his own slackness or malingering--"

[JC Denton]

"If you really believe you have to manage the economy," she said, "you have to stake a lot of your presidency on it."

Which is why I won't be voting for you, you meddlesome fuck.

[Gilbert Martin]

Hillary's brain is chock full of socialist drivel.

Obama and Edwards are no better.

[Shawn]

Sullum, are you and Balko having a contest to see who can write the article that will most make me want to emigrate?

[silva]

Economic Inequality
I have been wondering for some time about where libertarians stand on economic inequality.
The last 20 years the US and other industrialized countries have seen significant increases
in economic inequality. If policy changes are not made inequality might well keep on increasing.

If we look around the world I believe a strong case can be made that higher inequality leads to less healthy societies.

I would also argue that large economic inequalities leads to bad use of resources. You have rich people with much more money then they can sensibly use and poor people with virtually no health care.

The economic circumstances that we find ourselves in are to a large extent a result of our own decisions, but they are also to a large extent a result of conditions beyond our own control.

I am not advocating full equality, but I believe a sensible balance can be struck between individual economic freedom and keeping economic inequality within reasonable limits.

I would love to hear libertarians view about economic inequality.
Do you not worry about it
no matter how extreme it becomes?
Do you have some libertarian solution to the problem?

[From The Keystrokes of John Q.]

I don't know, 8 years of George Bush + a Hillary Clinton Presidency= Enough to change the electorate to a libertarian philosophy?

[Reinmoose]

silva -
answer in several parts forthcoming

[Warren]

Very fine Jacob. I agree with every word. But you haven't told me anything I didn't know. Indeed she trumpets her desire to crown herself emperor of the economy loudly and often. Who could not know it. The depressing part is that her supporters not only know it, it is the basis of their support. The really depressing thing is, I think HRC is likely to be our next president. The hopeful thing is, if we give her a Republican congress, it could be the best of all possible worlds.

[Bhamba]

are the Democrats really going to nominate HRC? Really?

They sure do know how to lose elections.

[Reinmoose]

The last 20 years the US and other industrialized countries have seen significant increases
in economic inequality. If policy changes are not made inequality might well keep on increasing.

I don't think you should be setting your sights on inequality, but on standard of living. The US has a very respectably high standard of living, even from indexes that stem from a point of view that equality is the most important measurement.

[Herman the German]

"I would love to hear libertarians view about economic inequality.
Do you not worry about it
no matter how extreme it becomes?
Do you have some libertarian solution to the problem?"

What is your solution to it Silva? Any attempt to make people more equal results in people being more equal, but at a lower level. Take more money from the wealthy, then there's less money to go into investments to create more jobs. Give people more handouts and you destroy their incentives. When the government creates jobs of which there is no demand for, money is wasted that could go into more productive jobs that create more wealth.

If person A is unwilling to put out the effort, does he deserve as much pay as B who does put out more effort? To pay A as much as B destroys the incentive of B and B produces less and less wealth is created. There is just no way to make people more equal without making us all poorer.

[sage]

Hugo Chavez in a pant-suit.

Hey, someone had to say it.

[Herman the German]

"I think HRC is likely to be our next president. The hopeful thing is, if we give her a Republican congress, it could be the best of all possible worlds."

It is never the best of all possible worlds with HRC in the White House.

[Reinmoose]

I would also argue that large economic inequalities leads to bad use of resources. You have rich people with much more money then they can sensibly use and poor people with virtually no health care.

The economic circumstances that we find ourselves in are to a large extent a result of our own decisions, but they are also to a large extent a result of conditions beyond our own control.

Libertarianism would say that the government is not responsible for redistributing these funds. However, most of us would also say that the government is largely to blame for static social classes and protection of those with a lot of money through subsidies, protectionist policies, and various other gifts to those who lobby them. So to the extent that our personal circumstances are "beyond our own control," many of them are our own fault through supporting legislation that only benefits those we aim to neutralize.
Libertarians acknowledge that socialized health care can not function efficiently and effectively, because it creates a market for services that are artificially low in price (while in our current state, the government is causing health services to be artificially expensive)

[swillfredo pareto]

In this sense social justice is, if not a "mirage," as Hayek argued, at least in conflict with procedural justice.

More to the point, expressions like Social Justice and Economic Justice are meaningless.

I have been wondering for some time about where libertarians stand on economic inequality.

The same place we stand on height inequality. We consider it none of our business what two individuals chose to do with their talents and opportunities.

If we look around the world I believe a strong case can be made that higher inequality leads to less healthy societies.

Please make the case.

[Anon]

Once again:

If we wiped the slate clean, and gave everyone, EVERYONE, 2 millions dollars (total assets), in about 10 years, income distribution would look exactly like it does now.

[Reinmoose]

as a continuation of my healthcare comment, subsidizing health care only leads to an increase in demand for health services, thus creating an environment where demand for services will always exceed the supply of them. This leads to a phenomenon called "rationing."

I am not advocating full equality, but I believe a sensible balance can be struck between individual economic freedom and keeping economic inequality within reasonable limits.

Silva -
this attitude is based on a giant assumption that such a thing is even possible. Granted, in its most minimal form it is less costly than it is to try to create total equality, but as Herman said, it results in less overall wealth and a lower overall standard of living.

[Gilbert Martin]

"If we look around the world I believe a strong case can be made that higher inequality leads to less healthy societies."

Yeah those socialist government policies in France have led to a peacefull, happy paradise - except for all the riots, car burnings, labor strikes, etc.

[Gilbert Martin]

I'd like to hear some of these people who complain about income inequality to explain exactly by what reasoning they think that anyone is "entitled" to any particular ecomomic outcome in the first place.

[Reinmoose]

I would love to hear libertarians view about economic inequality.

It's none of the state's business in 2 respects:
1. Principles of liberty preclude the state taking money/property from one person (at gun point, or what-have-you) and giving it to another.
2. From an economic standpoint -- "Get out of the way! You're only making things worse!"

Do you not worry about it

Yes. But that's a personal matter. I also give money to charities that help poor people get back on their feet, find abandoned animals good homes, feed the hungry, send kids to camps/on school trips that they otherwise wouldn't be able to afford to go on with their classmates, etc.

However, I, and other libertarians, want to respect your right to say "I don't think giving money to kids to go on school trips is a wise use of funds, and I would rather that money go to homeless shelters." We wouldn't want to force you to donate to a cause you didn't believe was doing good.

no matter how extreme it becomes?

There are varying viewpoints on this, but the general answer is no, and that it will correct itself.

Do you have some libertarian solution to the problem?

That's something that doesn't really exist, seeing as we almost always advocate repealing policy instead of creating it. So we think that more freedom = better for everyone. You get more freedom through fewer regulations, not more.

Libertarianism also recognizes a certain law, which is the law of unintended consequences. That is, every action has some unintended result, whether that result is obvious or not. This is especially true with vast complicated systems like the economy and the environment.

[Reinmoose]

did that help, silva?

[Lamar]

"I'd like to hear some of these people who complain about income inequality to explain exactly by what reasoning they think that anyone is "entitled" to any particular economic outcome in the first place."

It's not equality in outcome, its equality of opportunity that is important. There is at least an argument that says people are entitled to start off equally even if we know they won't finish with equal $$. The Declaration of Independence says we're all created equal. We can't control the fact that somebody has a 150 IQ and another has 90 IQ. But we can do something about Person A being born with a $100 million trust fund he didn't have to earn while Person B is born to a crack whore. Personally, I suspect its more about politicking than making an actual difference.

On an aggregate level, most revolutionary movements in the 20th century were sparked by economic inequality, from big countries like Russia to small countries like El Salvador. Higher levels of economic inequality correlate to higher levels of political instability. Higher levels of political instability lead to lower investment.

I'm not saying the U.S. is in danger of becoming a banana republic anytime soon, but let's not just assume economic stratification doesn't matter.

[claus]

The free market economy and capitalism in US has certainly proved that it can't run things itself.

Without political incentives there were no green economy or any green collar jobs. Without political regulations USA would loose in any competition with fx China, who has neither any costly environmental nor labor regulations. We can't compete Internationally with a country that pays a worker a dollar a day.

And just look at the stock and housing market - does greed seem to solve our financial and fiscal problems? Now, does this mean that we have to transform into a communistic or socialistic society? I don't think so.

But to believe that corporate America has more ethics and morals on the American people's behalf than our politicians is an expression of extreme naivety and/or stupidity. History shows differently.

[James]

"free to exchange goods and services on mutually agreeable terms"

Really? Is that what sweatshop labor is? Unbelievable...I mean, it is hilarious to hear people complain that worker protections in out country and other countries is a terrible thing...Do you think it is only profit that makes Wal-Mart a huge union-busting operation, of course not! They make so much profit there is plenty to pay their workers a reasonable wage, they would just rather give that money to stockholders than to people in their own company who work for it.

[James]

What is even crazier is to hear so many of anti-gov't, anti-state people so thrilled for legislation that benefits huge corporations...So because we are afraid of corruption from one more or less democratic gov't we open up avenues for massive massive corruption by multitudes of dictatorial governments (corporations)...

[Gilbert Martin]

"It's not equality in outcome, its equality of opportunity that is important."

I don't see the rationale for that either. The Declaration of Independence mention of equality was about political equality - not economic equality - either of outcome OR opportunity.

The Bill of Rights in the Constitution ennumerates negative rights - not affirmative ones. Basically you have the right to be left alone by the government unless you have actively done something to harm someone else.

There is nothing in there about anyone having a "right" to an equal opportunity or any opportunity at all. That would be an affirmative right. And there is no such thing as an affirmative right.

[tarran]

James,

Here's an idea, why not start your own Walmart Chain?

After all, Walmart's mega profits means that you should be able to undercut them: sell things at far lower prices, and still pay your workers more.

If Walmart is doing the things you are claiming, you should be able to take over both their markets and their workforce relatively easily.

If starting your own chain is too hard, you could try to get a job at Target. Or you could buy stock in Target and sell your ideas to the other shareholders. Target's shareholders would love to take a smaller cut of the bigger pie resulting from taking over 80% of Walmart's business.

[Julian Fondren]

Really? Is that what sweatshop labor is?

Yes, it is. It really is. It is economic understanding that separates people who can consistently support voluntary interactions, from people who will always find terribly important 'exceptions'. Voluntary trade is always mututally beneficial -- even when the seller is a prostitute; even when one party sells his labor to a 'sweatshop'; even when one person is exchanging a family's lifetime's supply of bread and housing (in money) for a semiprecious stone. Of course you may, having only this principle, still worry about where wages come from, and thus still doubt people when they tell you that competition pushes wages up. You should read a book.

[gaijin]

The economic circumstances that we find ourselves in are to a large extent a result of our own decisions, but they are also to a large extent a result of conditions beyond our own control.

I think this is true for all people...to different extents. Beyond a basic respect for people that might include provision of subsistence food, clothing and shelter, all other outcomes are far more complicated than any human intervention can address on collectivist terms.

[Lamar]

I'm no friend of corporations, but they aren't really dictatorships given the fact that most of the big ones have shareholder elections.

Gilbert Martin: I was relying more on the "created equal" part in the Dec. of Ind. Of course, it was written by people who owned slaves, so I realize the lack of historical context.

[gaijin]

James:
They make so much profit there is plenty to pay their workers a reasonable wage, they would just rather give that money to stockholders than to people in their own company who work for it.

Is there some law about workers not being allowed to be stockholders too?

[James]

Tarran,

No...see thats the point, it is illegal for corporations to not maximize profit for their shareholders, that is the law. Even if it didn't Wal-Mart's (and others Target isn't much better) make it impossible for other companies to be more socially responsible because they wouldn't pay as much to shareholders, and they wouldn't be able to expand as fast. Short of mass organizing and a consumer/labor movement it is very difficult to win against those chain stores.

[Herman the German]

"So because we are afraid of corruption from one more or less democratic gov't we open up avenues for massive massive corruption by multitudes of dictatorial governments (corporations)..."

Who says libertarians believe in corporate corruption?

[James]

"Is there some law about workers not being allowed to be stockholders too?"

Are you joking? You are truly naieve, how much disposable income do you think these workers have?! They don't get healh insurance, in fact a lot of them actually turn to the state for assistance.

[gaijin]

Even if it didn't Wal-Mart's (and others Target isn't much better) make it impossible for other companies to be more socially responsible because they wouldn't pay as much to shareholders, and they wouldn't be able to expand as fast.

There is no law requiring that companies be publically held--and therefore have to make a profit for shareholders in accordance with Sarbox regulations. There IS a law of supply and demand however...and if you can;t supply what is demanded, then you will be held accountable.

[modd]

Income inequalities are more a function of gov't intervention in the markets than leaving them alone.

Example, UA CEO Tilton gets bankruptcy protection, uses threat of insolvency to get workers to concede big cuts. CEOs of other airlines use those big cuts, citing inability to compete to get pay cuts at their respective airlines. Result: jobs are 'saved', but workers now work for less industrywide.

Example, Bill and Hillary buy house with huge mortgage. Rent out guesthouse to gov't to pay it.

[T]

But to believe that corporate America has more ethics and morals on the American people's behalf than our politicians is an expression of extreme naivety and/or stupidity. History shows differently.

No, history shows that power corrupts. The reason corporations exert undue influence on the rest of us, if in fact they do, is because politicians enable it. To pretend politicians are somehow altruistic, noble, moral, and ethical is to betray a fundamental lack of understanding of both history and the world as it is.

[gaijin]

Are you joking? You are truly naieve, how much disposable income do you think these workers have?! They don't get healh insurance, in fact a lot of them actually turn to the state for assistance.

James...please do tell me you work at a Wal Mart?

[modd]

Example from the recent pp. of Reason. Local gov't gives tax breaks to bring in a big store like Walmart which will provide jobs. Walmart now operates at an unfair advantage thanks to the gov't

[T]

When did having health insurance become the sole indicator of a decent lifestyle? Why do socialists always bring up health insurance like it's some kind of necessity on par with food and shelter?

[Gilbert Martin]

Let's not be forgetting that the REAL motivations of Hillary and her ilk are to increase their own power by buying the votes of their targeted constituency groups by promising them handouts of other people's money.

That's all it's really about.

[James]

No, I do not work at Walmart, however there have been a lot of studies of Walmart. I have however worked in a series of jobs and worked full time for no health insurance and few benefits. I've worked for companies that give me 40 hours a week for 7 consecutive weeks and then on the eighth week cut my hours so they don't have to pay benefits...and yet they make hundreds of millions in profit...so I do not have a lot of sympathy for their plight.

[modd]

Example: people of US 'hire' SEC as a watchdog to insure fairness in the marketplace and uniform accting practices. Now I ask? Who was it that found out Enron?

[Sean W. Malone]

How has Silva managed to avoid hearing the "libertarian" response to economic inequality??

It's not like we're very secretive about it.

[Ed]

What the Hell is "sensible balance"? Define that please. Bet you can't.

[Herman the German]

"They make so much profit there is plenty to pay their workers a reasonable wage, they would just rather give that money to stockholders than to people in their own company who work for it."

James has the typical Marxist misconception that only workers create wealth. Investors supply the capital which makes the company possible in the first place. When investors risk their money on a venture, they should be paid out of the profits if there are profits.

[James]

"Example: people of US 'hire' SEC as a watchdog to insure fairness in the marketplace and uniform accting practices. Now I ask? Who was it that found out Enron?"

Well I would say that the SEC has been emasculated under the Bush administration....if you think like the Bush/Reagan cabal that these comanies will 'police themselves'...welcome to the wild west!

[gaijin]

No, I do not work at Walmart, however there have been a lot of studies of Walmart. I have however worked in a series of jobs and worked full time for no health insurance and few benefits. I've worked for companies that give me 40 hours a week for 7 consecutive weeks and then on the eighth week cut my hours so they don't have to pay benefits...and yet they make hundreds of millions in profit...so I do not have a lot of sympathy for their plight.

Well, James, I do have sympathy for your plight. Seriously. On the other hand, Walmart is offering $4 prescriptions these days because their supply chain is so efficient. If you get sick, I hope you won't let your principles get in the way of getting the low cost medicine that could help you. I've had to compromise my principles on occassion...in retrospect, I usually find that those principles that require required others to conform to my views were usually misguided.

[modd]

We all have healthcare once we bleed all our assets. It's called WELFARE. Why should we protect the assets of people who don't care enough about them to protect them themselves?

[James]

"James has the typical Marxist misconception that only workers create wealth"

I don't think that way...but I do think this coutry has gone so far in the opposite direction...awarding the already wealthy with more and more wealth and it is at the EXPENSE of the workers whose share has steadily declined.

[Lamar]

"You are truly naieve,"

Let's not pretend that lower income workers only buy the basics, and that they never waste any money on lottery tickets, payday advances, bling bling, 20" rims, press-on fingernail airbrushing and other squandernalia. What percentage save $1,000 and buy stock in their company and what percentage spend it?

[Lamar]

"Walmart is offering $4 prescriptions"

My job offers health insurance. I guess it's a wash.

[Lurker Kurt]

it's a process that needs to be "managed properly."

That in a nutshell is Hillary's view on everything.

[mitch]

Jacob,

Good article. I hope we will be seeing similar articles in Reason about the economic proposals of the other front runners, namely Obama, Romney, and McCain.

[Lurker Kurt]

They don't get healh insurance, in fact a lot of them actually turn to the state for assistance.

Wal-Mart does offer health insurance to its full-time employees.

Employees who still qualify for state medical aid are encouraged to do so by Wal-Mart, IIRC. This program was started in the early 90's by Democrats to encourage welfare to work.

[James]

"Walmart is offering $4 prescriptions these days because their supply chain is so efficient."

I must say that going to the doctor is not so inexpensive and if you are like me and have no insurance it is only more expensive. Wal-Mart has indeed created an impressivly efficient operation...I think the cheap presriptons from Wal-Mart are more a move to head off the growing demand for universal healthcare...as well as the fact that most medicines are relatively cheap to make in bulk and the Pharmaceutical industry is a huge racket. I do believe in markets in a lot of areas, I don't believe in a command economy where the gov't owns everything and parcels it out to a grateful nation...however I am a liberal in that I think we can create a formula as a society that limits suffering on the low end and excessive opulant wealth on the other...that doesn't mean that I don't want incentives to work hard and live intelligently.

[claus]

"The reason corporations exert undue influence on the rest of us, if in fact they do, is because politicians enable it."

You just proved my point: you can't let corporate America run the US on their own adhering to the free market philosophy without politicians (like Hillary) interfering on behalf of the American people. Thank you.

[Lurker Kurt]

I think the cheap presriptons from Wal-Mart are more a move to head off the growing demand for universal healthcare

Or it could be a continuation of Sam Walton's philosophy of 'Squeeze as much as you can from your suppliers and pass the savings along to the customers'.

[Lurker Kurt]

as well as the fact that most medicines are relatively cheap to make in bulk

They are cheap to make. They are not cheap to research.

Also, there is also the overhead cost of the research that does not pan out.

[Lurker Kurt]

...I think we can create a formula as a society that limits suffering on the low end and excessive opulant wealth on the other...

If we could only get the right people in charge of things, we won't recreate the failures of the past.

[Lamar]

"Squeeze as much as you can from your suppliers and pass the savings along to the customers"

And that includes those who supply your labor.

[James]

I though Sam Walton said something about buying American goods...Hmm...I seem to remember Wal-Mart passing itself off as a really patriotic operation in the early to mid 1990s...what ever happend to that?

[Herman the German]

"you can't let corporate America run the US on their own adhering to the free market philosophy without politicians (like Hillary) interfering on behalf of the American people."

The only way government should intervene is if the corporation is engaged in fraudulent practices.

[Sean W. Malone]

Claus:

The free market economy and capitalism in US has certainly proved that it can't run things itself.

Which free market economy is that?

The one where companies and private individuals use government force to subsidize or "protect" their own products and marketshares, or the one where other companies and private individuals use government force to zone certain businesses in or out of towns, regulate every aspect of what certain companies do or take over the markets outright (healthcare, energy, water, etc.)?

I think you've come to the wrong site to lament the woes of the non-existent "free market" in America.

"Without political incentives there were no green economy or any green collar jobs. Without political regulations USA would loose (sic) in any competition with fx China, who has neither any costly environmental nor labor regulations. We can't compete Internationally with a country that pays a worker a dollar a day."

Well... Immediately provable FALSE.

REI, Johnson & Johnson, Burgerville are three companies I can name in the Pacific Northwest alone in America which did go "green" long before regulations and in fact not at all because of them but rather because they believed they were doing the right thing.

Why do people whining about environmentalism always seem to forget that there are actually real, live people working for, and owning, corporations. Real, live, people who care about stuff - like the environment, their families, their dog... just like you.

No, not every company is going to do it right away - but as has been very clearly established in the last few years, "green" is a potentially enormous selling point.

"And just look at the stock and housing market - does greed seem to solve our financial and fiscal problems?"

So "corporate greed" caused the Fed to artificially lower interest rates and the US legislature to strongly push incentives for banks to lend money to low-income families so that they could "become home-owners and share in the equity wealthier people have enjoyed for years, thus lowering the income gap"??

Did you not bother to look slightly deeper to figure out WHY the housing bubble happened? I mean, "corporate greed" sure is a great rallying cry, but it's pretty shallow when you get down to it.

"Now, does this mean that we have to transform into a communistic or socialistic society? I don't think so."

On that much we are agreed.

"But to believe that corporate America has more ethics and morals on the American people's behalf than our politicians is an expression of extreme naivety and/or stupidity. History shows differently."

Does it now? Examples please.

[MAM]

Silva: Concerning these large increases in income inequality, see Thomas Sowell's column today (townhall.com/columnists). Yes, the gap between the highest and lowest income brackets has increased over recent years, but most of the people who were once in the lowers bracket are no longer there. In fact, more in the lowest have risen to the highest than have remained in the lowest with a certain time period. So this idea of a dichotomy between a fixed "rich" and fixed "poor" is just selective (ab)use of statistics.

[Herman the German]

"I though Sam Walton said something about buying American goods...Hmm...I seem to remember Wal-Mart passing itself off as a really patriotic operation in the early to mid 1990s...what ever happend to that?"

I have no objections to Wal-Mart selling foreign products if they save consumers money.

[Lurker Kurt]

And that includes those who supply your labor.

True, Wal-Mart is anti-union because of its 'keep prices as low as possible for the customer' philosophy.

It does pay the prevailing wage for retail labor. Even at low skill levels, there is a shortage of good workers.

[P Brooks]

Clinton would use higher taxes to pay for universal preschool, universal college, universal health care, and universal high-speed Internet access, among other taxpayer-funded goodies.

When I first saw Hillary's "christmas present ad" I thought it was a parody; then I was slowly suffused with dread as I realized it was actually a serious (and likely effective) attempt to buy the muddled-headed, sobbing socialist/ progressive vote.

-----

And, Silva-
This particular libertarian would be delighted to see the abolition of corporate welfare and the ability of special pleaders to obtain concentrated benefits by using the government to impose costs on diffuse and unorganized segments of the population. "Regulatory Capture" is what they call it.

That will never happen if the power of government over the economy is increased, as Hillary, et c, want to do.

[The guy who tells it like it i]

James:

"I have however worked in a series of jobs and worked full time for no health insurance and few benefits. I've worked for companies that give me 40 hours a week for 7 consecutive weeks and then on the eighth week cut my hours so they don't have to pay benefits...and yet they make hundreds of millions in profit...so I do not have a lot of sympathy for their plight."

I can't say I have a lot of sympathy for your plight. It's all about bargaining power, and it sounds to me like you're not carrying very much around with you.

You could stand up for yourself and say that you're going to quit unless they compensate you better... but there are plenty of other people who can replace you, and both you and your employer know it. So you're stuck having to swallow whatever cock they feel like feeding you.

So why do some people earn huge salaries while you get kicked around? Simple... They bring skills, experience, or capabilities that create value for their employer, and they can't be easily replaced. You on the other hand... well, you get my point.

The corporate world is desperate to find capable people who are committed to getting things done. People who deliver results and inspire others to do likewise. Such people are hard to find, and they don't come cheap. You simply have to prove that you're one of them, and trust me.... actions speak far louder than words.

So, you can do two things... keep whining about how the man is keeping you down, or shut up and seriously get to work. The world's becoming more and more a meritocracy... better get used to it.

[modd]

James,

on Enron, precisely my point. It ultimately showed the fox was watching the henhouse.

[Lurker Kurt]

"I though Sam Walton said something about buying American goods...Hmm...I seem to remember Wal-Mart passing itself off as a really patriotic operation in the early to mid 1990s...what ever happend to that?"

I vaguealy remember that advertising campaign. I believe the offer was if an American company can produce the item for the same price as a foreign company, then Wal-Mart would buy the American made product.

[Reinmoose]

James -
The government keeps affordable clinics from popping up (see the example of CVS in Boston) to serve those who don't need to pay $180 for a visit to the doctor for them to prescribe a medicine that you already know you need.

[Matt J]

Of all of Hillary's economic prescriptions that piss me off the mortgage bail out prescription makes me damn near insane.

We purchased our first home at the hight of the housing boom. We were offered all kinds of gimmick mortgages that would have gotten us into a bigger, more expensive house with a pool for zero down, low (initial) monthly payments etc...

We were tempted, but did the prudent thing. We bought a house we could afford and took out a fixed rate mortgage at a slightly higher, yet still historically unbelievable, rate than we could have. We were even big enough suckers to make a substantial down payment because, like assholes apparently, we worked and saved up money before starting the house hunt.

Now, Hillary and a host of others want to come along and bail out all the fucks who couldn't or wouldn't read the fine print. All the shitards who never learned that there is no such thing as getting something for nothing. All the wannabe Trumps that got caught mid flip.

Well fuck you very much. What the hell were we thinking being responsible? We must have been high. We should have known that these days no one has to suffer from the consequences of their bad choices. I could be floating in my pool, sipping a Mai Thai waiting for my bail out check from Uncle Sam.

[James]

"I can't say I have a lot of sympathy for your plight."

Well it is much appreciated, you really seem to know me, I think this is the official motto of the libertarian movement.

[T]

You just proved my point: you can't let corporate America run the US on their own adhering to the free market philosophy without politicians (like Hillary) interfering on behalf of the American people. Thank you.

Wait, what? Way to misinterpret what I wrote, sparky. Corporations get legislation passed that benefits them at the expense of the general public. Politicians (like Clinton) pass this legislation. So the politicians are interfering on the behalf of the American people how, exactly?

Quick examples for the slow: Every protectionist tariff ever passed, agricultural subsidies, zoning exemptions, etc.

Politicians and the government are complicit in almost all of the "corporatism" problems you ignuts keep whining about, yet you have this delusional fantasy that politicians will fix the problem with the next new piece of legislation. Man, this is battered spouse syndrome in action.

"Yeah, honey, I screwed the US healthcare system up, but if you just come back to me, I'll make it all better. You'll see! It'll be different this time!"

[Reinmoose]

If only the right people were in office...

[Reinmoose]

And Matt J -
I frequently feel like an asshole for being responsible with my money.
My condolences on your responsible purchase.

[Lurker Kurt]

James,

Forgive me for being nosy, but your comments are articulate so I assume you posses above average intelligence and you obviously comfortable enought to have internet access, why have you been saddled with such crappy jobs?

[Lamar]

Walmart is certainly not above being disingenuous in its marketing of American made goods.

More importantly, Walmart will squeeze your local politicians to get the lowest prices to the consumer. Corporate welfare is OK to many pro-corporate libertarians. Nobody cares if 79? ass-wiping paper is subsidized by local taxes when it comes to all-awesome-all-the-time Walmart. Supply chain, ya know?

Incidentally, MattJ has my vote.

[Herman the German]

"I can't say I have a lot of sympathy for your plight."

"Well it is much appreciated, you really seem to know me, I think this is the official motto of the libertarian movement."

Charity is the responsibility of individuals, not the government.

[P Brooks]

...I think we can create a formula as a society that limits suffering on the low end and excessive opulant wealth on the other...

My suffering would be greatly alleviated if our public schools devoted more of their efforts to teaching students to spell, and less to extolling the virtues of universal government meddling.

[Lurker Kurt]

Corporate welfare is OK to many pro-corporate libertarians.

I can't speak for all libertarians, but the people who post on this board have been very much against it.

Also, the articles in Reason have been very much against it, also.

[Herman the German]

"Corporate welfare is OK to many pro-corporate libertarians. Nobody cares if 79? ass-wiping paper is subsidized by local taxes when it comes to all-awesome-all-the-time Walmart."

I have never heard of any libertarians who believe in government subsidies.

[Lurker Kurt]

My suffering would be greatly alleviated if our public schools devoted more of their efforts to teaching students to spell

Also the effect of compound interest. I learned about the wonders of compound interest in my second year of algebra. The lesson has stayed with me all these year.

I too, saved money for a downpayment on my house and chose not to get a variable rate mortgage.

[T]

Matt J,

I feel your pain. One idiot I know just got a 3 point bump on his ARM. What kind of a fucktard signs a contract like that? And he has maybe 5K equity in the house... after 3 years. He is seriously considering deed in lieu of foreclosure if he can't sell it. Why wouldn't he?

Now the .gov is gonna bail out all the tards. Way to screw the rest of us.

[Lurker Kurt]

One idiot I know just got a 3 point bump on his ARM. What kind of a fucktard signs a contract like that?

Especially when interest rates are historically low.

It's a shame the schools don't teach economic history very well.

Or teach economics very well.

Or for that matter, teach very well.

[James]

"What kind of a fucktard signs a contract like that?"

I don't know these 'fucktards' but I would say that the people who signed these contracts are probably people who were desperate and did not know a lot about mortgages, not to mention that mortgage fraud was the #1 white collar crime. So these were horrible deals...no doubt about it, but taking advantage of the ignorance or desparation of others isn't such a great business either...

[JNR]

Well it is much appreciated, you really seem to know me, I think this is the official motto of the libertarian movement.

And it seems the official motto of the modern liberal movement is surprisingly similar:

Yes, we do know you and we know that without our help you would be nothing. Don't worry, we'll hold your hand while you piss, and while we're at it we'll subjugate those nasty corporations who are always bringing you down.

Of course, then we're just replacing one Man with another one, this time in a pant-suit.

And now for some oh-so-helpful anecdotal:

You say you've been a helpless wage slave many times in your life? What a coincidence! I've had similar experiences. I'll even add some background.

Here's me: barely a high-school grad, no college education, no formal skills to speak of, et cetera. My dad is a disabled vet in a state with no benefits for disabled vets, but he makes too much money at his new job to qualify me for educational assistance, and not enough to put me through school. So I go to work.

I work some pretty shitty jobs, though I never worked for Wal-mart. I went without health benefits many times in my life. By all (your) counts, I'm shackled to opportunistic inequity, forever doomed to a life of non-living wages and no benefits.

*cue VH1 Where Are They Now Music*
So where am I now? I work in the airline industry for a software company. I make more money than high school teachers with masters degrees who've been teaching for ten years in my state. I have health benefits. I contribute 12% of my yearly income to a 401k.

I do all of this while paying an assload of taxes to a government that has never 'leveled the playing field' for me, even though I ostensibly pay them to do such, without any choice otherwise. I also donate 10-15% of my pre-taxable income to various charities, every month. I volunteer at care centers and food projects. I once helped raise $15,000 for the Salvation Army.

So, as you can see, I have no sympathy for your plight, either. Nobody gave a shit about me and yet I somehow pulled myself up and made something, and now I spend my time making money and sharing that with people I care about, with no apparent help from a government which I so handsomely pay.

Clinton can take her economic plan and shove it.

[Lamar]

"Also, the articles in Reason have been very much against [subsidies]."

Most posters on any given Walmart thread enthusiastically defend Walmart and Walmart's corporate strategy. My point is that many people here many times turn a blind eye to freebies from local municipalities when they like the store.

[James]

There's a lot of love in this room:)

[Lurker Kurt]

I don't know these 'fucktards' but I would say that the people who signed these contracts are probably people who were desperate and did not know a lot about mortgages

Obviously, the government needs to create a new program to combat mortgage ingnorance.

[Lurker Kurt]

Dammit!

*ignorance.

Must use preview. Must use preview.

[adrian]

The US economy is not free-market and is not pure capitalism and has never been. It is a mixed-economy with plenty of government intervention and planning, thus the problems.

Required Reading: "Capitalism: The Unknown Ideal" by Ayn Rand (and others)

[Lamar]

"What kind of a f*cktard signs a contract like that?"

A lot of people do, and they vote, and they don't apply any more logic to their voting than they do to their finances.

[Reinmoose]

I think we can create a formula as a society that limits suffering on the low end and excessive opulant wealth on the other

The major problem here is how you define these terms. The great great great great majority of Americans are not "suffering," literally, financially, or otherwise.

It absolutely offends me when people suggest that "we" need to pay poor people more on a moral basis. Barbara Ehrenreich can suck it, because she did a crap-tastic job of trying to live off low-wage jobs. I guess I could spend all of my money every year and go into thousands of dollars of debt and then complain that I don't have enough money, but that certainly wouldn't be the truth. Suffering people don't have:
TV
Computers
Massively-contracted cell phone plans with elaborate cell phones
Nice cars/car loans/car insurance
iPods
1-bedroom apartments for 1 or 2 occupants
the ability to eat out once or more a week
etc, etc, etc,

Those who complain that we send "good jobs" "oversees" to pay people "a dollar a day" to produce our cheap goods can shove it. I actually care about people who are ACTUALLY suffering, and if you think outsourcing hasn't had a history of helping those who are ACTUALLY suffering by giving them jobs, etc., you're living under a very elite rock.

[P Brooks]

I would say that the people who signed these contracts are probably people who were desperate

Why would you say that? "Desperate" in what way?
Desperate to get into a house they couldn't actually afford to buy?

As for the whole "trapped in a shitty job" thing, boo-fucking-hoo; go sing that song somewhere else. Even the Dread Oppressor Walmart is desperate for ambitious, motivated people. If you go to work at Walmart, and demonstrate a willingness to work and an ability to learn, you will get put on the fast track.

[Matt J]

I don't know these 'fucktards' but I would say that the people who signed these contracts are probably people who were desperate and did not know a lot about mortgages, not to mention that mortgage fraud was the #1 white collar crime. So these were horrible deals...no doubt about it, but taking advantage of the ignorance or desparation of others isn't such a great business either...

Then send the fucking brokers to jail and let the duped sue their companies for recompense. Don't fuck me and my potential to get a decent rate in the future. Is that really so much to ask for?

And desperate? Fucking rent if you can't afford a house. Maybe cut back on non-essentials and save like... you know... we did!

You don't have to be a economist to get the concept of, "if it sounds to good to be true it probably is." A working knowledge of Aesop's Fables should suffice.

JNR,

Amen.

[Reinmoose]

This country suffers from a bad case of "keeping up with the Joneses," and we actually consider psychological suffering from not being able to have every modern amenity imaginable embarassing, and therefore suffering.
That's not suffering. Not being able to eat, living in a shack the size of a 1-car garage with a leaky roof with 8 people in it, and not being able to get medicines that we take for granted to cure what we consider the simplest of diseases... that's suffering.

[Herman the German]

"Now the .gov is gonna bail out all the tards. Way to screw the rest of us."

And encourage more reliance in the future on the government. New Orleans after Katrina is an example of what happens to people who become too dependent on government and don't develop any self-reliance.

[T]

I don't know these 'fucktards' but I would say that the people who signed these contracts are probably people who were desperate and did not know a lot about mortgages

One does not buy a house out of desperation. The correct word is 'stupid'.

And yes, fraud is bad and should not be tolerated. There's plenty o' blame on both sides of the issue. What's even worse is making the rest of us, who either bought with our means or decided our means did not extend to housing quite yet, take it in the shorts so the ignorant buyers and foolish lenders don't have to suffer for the consequences of their actions. Making everyone pay for the mistakes of a few is morally bankrupt.

[Lamar]

Lamar's Fake Godwin Law:

In any online discussion of economic policy, the probability of the whole thing denigrating into "Rah Rah Rah Walmart" vs. "Damn Walmart to Hell" approaches one.

[Lurker Kurt]

Lamar,

If someone brings up Walmart in a thread that has nothing to do with Walmart, can we invoke your law?

[Reinmoose]

Lamar -
I think you're allowing personal bias to creep in here. I don't see anyone championing Wal-Mart, and James is the one that kept bringing it up.

[claus]

Sean:

"Which free market economy is that?
I think you've come to the wrong site to lament the woes of the non-existent "free market" in America."

America is the closest we get to a free market economy, the biggest difference being America adhering to "Free Market Capitalism", while Europe adhere to a "Socio-Economics".
Both systems use the instruments of subsidizing to protect their own products and market shares. China, by the way, "subsidize" by keeping the yuan artificially weak against the dollar.

You can say a totally free market does not exist, but if you look at our trade deficit towards amongst others China you would know that America is abiding to the free market policy so much, that we are strangling ourselves in doing so. In Europe that would have been stopped before it began, as each European state as a member of EU abide to a set of rules promoting fair trade on both sides of the state/country borders. Being a Free Market Capitalist economy we obviously don't have such rules. And we are loosing jobs and money to our Overseas competitors every day for that reason.

"Why do people whining about environmentalism always seem to forget that there are actually real, live people working for, and owning, corporations."

Please! For each company you can show me having spend money on the environment without regulations attached to it I can show you a thousand that wouldn't care if the Earth became an environmental toilet. "No, not every company is going to do it right away." You bet. The thousands of poorly hidden chemical and dangerous dumps all over US from the "happy" 50-60-and 70's before grassroots, and later politicians, began to react are dark clouds on corporate America's "environmental conscience".

The truth is, that people, like corporations, nearly alway jump over where the fence is the lowest, preferring profit nest to doing the right thing. I applaud the few that don't. But don't be naive and think that people or corporations want to do the right thing when profit is involved.

"Did you not bother to look slightly deeper to figure out WHY the housing bubble happened?"

Predatory lending to maximize profit for stock holders pissing on low income borrowers who are now forced into foreclosure. Same corporate America who wouldn't give a damn if the environment turned black or blue. Oh - did you forget to read about this? Try the old news first, starting 6 months back.

History shows differently. "Does it now? Examples please" You cannot seriously want me to list companies? Here's a link, however, establishing the fact that 40 out of 100 Fortune companies behaved unethical - that's almost half, that we KNOW of on this particular list alone.

http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml;jsessionid=1BOZ35HUZZEMIAKRGWCB5VQBKE0YOISW?id=BH203&referral=2341

"This study of reports in the business news between January 1, 2000 and June 30, 2005 found that as of 1999, 40 corporations in the Fortune 100 had behaved in ways that can be considered unethical. The behavior included three types of fraud (accounting, securities, and consumer), discriminatory practices, undisclosed executive pay, antitrust activities, patent infringement, and other violations of the law. Based on the unacceptability of the misdeeds committed, this article ranks the 40 firms into three categories. Also uses research on business ethics and the behavior of executives, boards of directors, and even government officials to suggest why such unethical behavior was allowed to occur. Concludes with recommendations for improving business behavior and suggests important roles for future business leaders and the broader American public."

I rest my case.

[Lamar]

"If someone brings up Walmart in a thread that has nothing to do with Walmart, can we invoke your law?"

I think that's the only time we can invoke the law!

Back to the point: Hillary's plans are more likely to exacerbate the problem of economic inequality, but I think the issue of equal opportunity is a valid concern.

[Reinmoose]

claus -
you silly goose.

[Danny]

Is it wrong that Hillary turns me on after reading this? I mean, I wouldn't vote for her, but she would make one great dominatrix.

[P Brooks]

Hillary's proposals are no different than standing at the door of the polling place and saying, "Pssst- Hey, Buddy! I'll give you a hunnert bucks if you go in there and cast yer vote for ME."

[Lamar]

One look at yesterday's Onion piece on politicians pandering to the obese vote will cure you of your [H]illness.

[claus]

T,

"Corporations get legislation passed that benefits them at the expense of the general public."

Please don't fall into the old conspiracy-ditch? We already know that corporations are extremely effective in lobbying on Capitol Hill, but to state that corporate America run this country is way off.

First of all, small businesses are the majority in this country, and they don't have the kinda money it takes to lobby in Washington. You always hear about the influence of the big corporations - and even though their impact on American policies are extensive, you have to put things in perspective:

85 percent of Americans view small businesses as a positive influence on American life (NFIB, 2001).
Small businesses account for more than 40 percent of the offline economy (IDC, January 2001).
An estimated 25.5 million small businesses in America employ more than half of the country's private workforce, create three of every four new jobs, and generate a majority of American innovations (Small Business Administration, 2000).
Small businesses represent more than 99 percent of all employers (Small Business Administration, December, 2000).

[claus]

Reinmoose -
you silly chicken.

[swillfredo pareto]

Do you think it is only profit that makes Wal-Mart a huge union-busting operation, of course not! They make so much profit there is plenty to pay their workers a reasonable wage, they would just rather give that money to stockholders than to people in their own company who work for it.

I don't want to burst your bubble but Wal-Mart hasn't paid shit to its stockholders for about the last 10 years. I am one, and have been since I busted my ass there my first three years out of college. I get a quarterly dividend check for somewhere between .5% and .75%. It buys me a couple of bottles of decent scotch. The stock price has not budged for that same period of time. These things are fairly easy to look up. Rather than broadcasting your ignorance why not become educated?

No...see that's the point, it is illegal for corporations to not maximize profit for their shareholders, that is the law.

James, what in the world are you talking about?

I've worked for companies that give me 40 hours a week for 7 consecutive weeks and then on the eighth week cut my hours so they don't have to pay benefits...and yet they make hundreds of millions in profit...so I do not have a lot of sympathy for their plight.

So why did you work there? You're rational, right? The way I see it if you had a better opportunity you would not have been there in the first place. So who was the victim?

I seem to remember Wal-Mart passing itself off as a really patriotic operation in the early to mid 1990s...what ever happened to that?

The American consumers told them they would much rather have a lot of cheap shit made by little people in China rather than fewer things made domestically.

[R C Dean]

If we look around the world I believe a strong case can be made that higher inequality leads to less healthy societies.

I would say it depends on the source of the inequality.

A kleptocratic nomenklatura skimming all the cream off of an economy is, indeed, both unequal and unhealthy.

An entrepenuerial economy generating wealth by the bucketload for innovators and risk takers is also quite unequal, but not at all unhealthy.

[Brett]

"We can't compete Internationally with a country that pays a worker a dollar a day."

We compete on the basis of productivity. One hour of work in the US is more productive than one hour of work in Vietnam, because the US is more heavily capitalized. This allows the US with its higher wages to be internationally competitive.

[Lurker Kurt]

I've worked for companies that give me 40 hours a week for 7 consecutive weeks and then on the eighth week cut my hours so they don't have to pay benefits...and yet they make hundreds of millions in profit...so I do not have a lot of sympathy for their plight.

So why did you work there? You're rational, right? The way I see it if you had a better opportunity you would not have been there in the first place. So who was the victim?

James, we are still waiting to hear how you ended up in such crappy jobs.

[Peter]

Someone quick ... prepare the SNUKE!

[J sub D]

"If you really believe you have to manage the economy," she said, "you have to stake a lot of your presidency on it."

And Ms. Clinton has displayed her management skills by ???

Other than unrivaled expertise in cattle futures trading, I just don't see it.

[Sean W. Malone]

"Please! For each company you can show me having spend money on the environment without regulations attached to it I can show you a thousand that wouldn't care if the Earth became an environmental toilet."

Yeah, you can... or at least, you could have not more than 10-20 years ago, but if you were to wake up from your apparent slumber and look around - you'd notice a major shift happening right now. You're literally making the case that without government, companies would run rampant and rape the environment and that is demonstrably false - especially in America.

Furthermore, the other gigantic piece of the puzzle people who rail against libertarian/free-market economics always seem to miss - especially in terms of pollution - is that it's NOT ok in a free-market to infringe other's freedoms or property.

The environmentalist argument is often best solved through better enforced and more carefully understood property rights. If you as a company with production offices in my backyard want to make chemicals - fine. You can't dump them on my land, because it's my property to do what I want with.

Nice how you leave that little part out though - makes your assertion that the free-market fails nice and clean.

It's not the free-market that fails in any of the cases you mention - it's the rule of law and especially the protection of the basic property and civil rights that are so crucial to the success of a free-market.

Props for the strawmen though Claus.

[Sean W. Malone]

e5!!!

Snuke in the sniz.

[Gilbert Martin]

For those here making comments about "corporate welfare" - in aggregate, corporations are net payers of welfare - not recepients of it.

The only individuals, companies, or any other entities that are getting "welfare" from any particular unit of government are those whose total dollars of tax payments to that unit of government are less than the dollar value of government services that that received back in return.

Add up all the corporate income taxes paid by the companies AND the taxes paid by their stockholders on their dividends and capital gains as well as state and local income taxes, property taxes and all sorts of other taxes paid by corporations. The value of government services being provided back to the corporations in exchange for all that money doesn't measure up.

[Egosumabbas]

Going back from talking about Walmart to the matter at hand, I RTFA, and I notice a frightening similarity to the prospect of a Hillary Clinton administration on the eve of a recession, and with the passing of the Smoot-Hawley Tariff in 1930. She's basically advocating PROTECT OUR DOMESTIC INDUSTRY IN THE NAME OF THE CHILDREN, but the end result would be a deepening of our current recession to a full-blown depression. Just some food for thought here.

[adrian]

she's borderline communist. equality worked well for Soviet Russia did it not?

[silva]

Economic Inequality II

Herman the German made the following argument:

"What is your solution to it Silva? Any attempt to make people more equal results in people being more equal, but at a lower level. Take more money from the wealthy, then there's less money to go into investments to create more jobs. Give people more handouts and you destroy their incentives."

I have heard/read this argument quite often. I do not disagree that incentives for work are important in a society, I do however disagree that economic redistribution can not be combined with such incentives. Progressive taxes can be set at levels that ensure there are always decent returns to work. Support for the poor can be mainly in the form of healthcare and education, something that should not interfere with the motivation to find work.

Several people seem to be arguing that redistribution is impossible to achieve. I believe many democratic societies have made concerted efforts to reduce inequality. Many European societies moved from being much less equal than the US, to being more equal.

When it comes to healthcare: Almost all industrialized countries have some form of universal healthcare. Such systems do present their own challenges, but many work quite well. And in many of these countries people live longer than in the US. I suspect Japan beats the US on almost all health indicators.

And as for the notion raised by MAM that what matters is social mobility. I suspect that social mobility in the US is lower than in many other industrialized countries. Given the rising costs of higher education in the US and the importance of education to perform in a modern economy I think social mobility in the US will fall as inequality encreases.

Reinmoose wrote that we should focus on standard of living and not income inequality. I happen to think that the two are correlated. Compared to other countries with same level of economic development US does not do to well in studies of standard of living.

[Egosumabbas]

Add up all the corporate income taxes paid by the companies AND the taxes paid by their stockholders on their dividends and capital gains as well as state and local income taxes, property taxes and all sorts of other taxes paid by corporations. The value of government services being provided back to the corporations in exchange for all that money doesn't measure up.

What about no-bid defense contractors, or government contractors in general?

On the other hand your argument does not justify giving any particular corporation an advantage even if they are a net payer into government coffers. Let's look at Walmart for instance, since they are popular on this thread. Walmart is a HUGE recipient of corporate welfare in the form of welfare to their underpaid employees (food stamps, health care, etc.), their reliance on public road systems (notice that most of their stuff is shipped by truck), getting sweet tax breaks from corrupt local authorities. Though I would agree that even Walmart of all places probably is not a net recipient of welfare. The flip side of Walmart though is that if you're a hard worker there it's fairly easy to work up the corporate ladder there (I have an in-law who's now very well compensated by Walmart). A proper libertarian position would be that Walmart shouldn't disproportionately gain from government largesse and compete on a level playing field: having to supply benefits to its employees or pay more instead of having tax payers pay the bill. Vote out of office any politician who gives a break to Walmart and screws the small businessmen of a locale. At the same time, I think people should voluntarily boycott Walmart and shop local or online if they hate them so much.

[Sean W. Malone]

"Several people seem to be arguing that redistribution is impossible to achieve."

Can I go on record saying that redistribution is absolutely "possible to achieve", but also that it is immoral, theft and results in at bare-minimum the looting of individuals who are responsible for creating wealth and at worst will cause complete economic collapse and not just stagnation of standard of living, but over the long-term, regression of quality of life across the board.

What you see in European countries that are more socialist than the US is all well and good - for now. Wealth redistribution can find a balance for brief period of time where the producers aren't still benefiting enough from the system that it's worth their while to stay, although their productive output might suffer at certain levels (the breaks where increasing production will mean too high taxes/cost to warrant the expense in relation to the potential profit for example). But who here has experienced a situation where the use of "a little force" to achieve certain ends hasn't gone as far as it could go?

Ultimately the premise Hillary is making will lead us right there anyway - if "a little" wealth redistribution is ok (which it obviously already "is" in America) then why not a little bit more? And a bit more? Take from the rich - give to the poor, who cares? Rich people have a lot, shouldn't matter...

Well, Europe will see the tipping point soon enough... you can only steal from a group for so long before there's either nothing left to steal or the victims get sick of it.

[Lamar]

"I don't want to burst your bubble but Wal-Mart hasn't paid shit to its stockholders for about the last 10 years."
The appreciation - stock price - is more important than the dividends.

@ Gilberto Martin:

"For those here making comments about 'corporate welfare' - in aggregate, corporations are net payers of welfare - not recipients of it."

I'm amazed at how empty and meaningless this statement is. First, what do you mean by "in aggregate"? In my experience, that means "once I factor out anything that doesn't support my case". More importantly, if 500 small businesses pay taxes, and Walmart gets a sweetheart zoning deal, somehow that ISN'T welfare, because the small businesses taxes paid for Walmart's gift? Not how it works, sir.

Second, what do you mean by "corporations are net payers of welfare"? Aside from making no sense at all, even the plausible explanations are dubious. Corporations pay taxes so their lobbyists should get special favors? Is that it? Sweet. Also, aren't you confusing welfare with perks and favors we informally refer to as "corporate welfare"? That's just sloppy, poppy.

Third, corporate taxes are paid by consumers, correct? In that case, consumers pay the "welfare," regardless of which meaning you meant to convey.

"The only individuals, companies, or any other entities that are getting "welfare" from any particular unit of government are those whose total dollars of tax payments to that unit of government are less than the dollar value of government services that that received back in return."

Is that how it works? FYI: the term "welfare" does NOT refer to any government services one might receive that exceeds the value of his taxes. Please tell me that I'm not arguing with a person who thinks that is the definition of welfare......I mean, that's not even a bastard or informal definition.

I appreciate you trying to make an argument in excess of the facts, definitions and concepts that support it, but your 1:35pm post doesn't pass the smell test from two miles away.

[Gilbert Martin]

"On the other hand your argument does not justify giving any particular corporation an advantage even if they are a net payer into government coffers. Let's look at Walmart for instance, since they are popular on this thread. Walmart is a HUGE recipient of corporate welfare in the form of welfare to their underpaid employees (food stamps, health care, etc.), their reliance on public road systems (notice that most of their stuff is shipped by truck), getting sweet tax breaks from corrupt local authorities"

I never advocated giving any particular corporation an advantage. Most of the various protectionist schemes are aimed at protecting some particular set of corporations at the expense of another. For example sugar tarrifs benefit sugar producers at the expense of companies like Coca Cola and Pepsi (which had to switch to corn syrup as a sweetener because sugar was so expensive).

I'm merely pointing out that corporations are not net "welfare recipients".

Also, I do not accept your contention that Wal-Mart employees getting food stamps or govt healthcare constitutes "welfare" to Wal-Mart.

It wasn't Wal-Mart who created those government programs - it was liberal politicians. The "welfare" is going from taxpayers to those individuals who are directly getting the money. Wal-Mart would have no trouble getting employees whether those programs existed at all or not.

[Gilbert Martin]

"Is that how it works? FYI: the term "welfare" does NOT refer to any government services one might receive that exceeds the value of his taxes. Please tell me that I'm not arguing with a person who thinks that is the definition of welfare......I mean, that's not even a bastard or informal definition."

I really don't care how you want to define corporate welfare, Lamar. You aren't the judge of what it means and I don't really feel any necessity to acknowledge you as such.

[Lamar]

"I'm merely pointing out that corporations are not net 'welfare recipients'."

"Welfare" is NOT simply the amount of services received that exceed the value of the tax bill.

Heck, we could call it a subsidy, kickback or protection payment in informal conversation, but that doesn't make those words accurate.

[Lamar]

"You aren't the judge of what it means and I don't really feel any necessity to acknowledge you as such."

You're wrong. The term actually has meaning. You are using it incorrectly. Google it. Wiki it. Ask a random passerby on the street.

You can't just make crap up and expect it not to smell.

[Lamar]

Will you recognize The Cato Institute? Link.

[Sean W. Malone]

You know, real quick, to jump on the Walmart topic:

When I was in high school and even during a few "in-between jobs" moments in college I worked for grocery stores... never for Walmart, but for Target and for local chains.

Can anyone find a legitimate difference in wages between these places? I made minimum wage or barely over it in each of the places we're talking about - I have an aunt who worked as a manager for K-Mart for years... made $10-12 an hour.

Walmart isn't any less competitive for wages than that - and if you look at their average wage for FT employees it's over $10 an hour, well above minimum wage.

If you're going to pick on Walmart and claim that its employees getting welfare checks from the US taxpayers is "corporate welfare", then you have to claim the same for Target, K-Mart, Kohl's... even Best Buy or Circuit City, etc.

Furthermore, the people who work at places like that usually can't find anything better - so I'm a little unclear as to who is losing on this deal......... perhaps someone can clear this up for me.

[Gilbert Martin]

Lamar, I don't really care what you or anyone else has to say about it or thinks it means.

If I or any other person, company, partnership or whatever are paying more dollars in taxes than the dollar value of any government services we receive in exchange for that money, then we are not getting any "welfare" from the government.

[Lamar]

"If you're going to pick on Walmart and claim that its employees getting welfare checks from the US taxpayers is 'corporate welfare'"

No, only Gilbert Martin is claiming a bizarro, made up on the spot definition of corporate welfare. The real definition, which he will apparently reject until the day he dies, describes a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations.

[Paul]

"a new vision of economic fairness" as president

Hmph. Let me guess, this "new vision" looks remarkably like a very old vision.

[Lamar]

The government runs at a deficit, meaning that it spends more than it brings in. Therefore, every citizen and business entity of America is on welfare.

[Sean W. Malone]

Yeah, Gilbert's wacky re-definition of corporate welfare aside, I still don't get why there's never any comparison of Walmart with its chief competitors.

That said, here we have multiple overlapping cases of definitions being crucially important to a discussion in which they are lacking. Fun times...

While we're on the topic, Hillary is no "socialist" or "communist", she's just a "progressive liberal". The label is different, so clearly, the ideas are different right?

[Reinmoose]

silva -
I'm sorry I took you seriously

[Lamar]

"I still don't get why there's never any comparison of Walmart with its chief competitors."

I really don't know. Maybe "Walmart" is a stand-in for all big box retailers, or maybe they are particularly harsh on career workers, or maybe there's no reason at all. I suspect a little bit of it has to do with Walmart's history of blatant jingoism while importing tons of crap from China. Perhaps shopping experience seeps into the judgment, who knows. Maybe liberals hate Walmart's middle America, flag-waving image. I just don't know.

[Daldude]

Though the comments have digressed considerably from the original article, the conversation here is very interesting to me. I lean more towards the libertarian philosophy all the time, but still have some fundamental problems with it - problems that can't be blamed on government interference or levels of individual competency. Let me present a scenario to exemplify this and see what you have to say in response:

A group of libertarians decide to provide an example to the world by getting together and buying an island and creating a society there based on the libertarian philosophy. To avoid any "corruption" of the experiment they decide to start with no technology except for the most basic farming tools and equal amount of supplies, and none of the participants of have any agricultural experience, so their competencies all start out equal as well. Finally, they divide the island into equal sections that are distributed to the inhabitants by random lottery.

One lucky guy gets a lush valley that happens to contain the spring that is the source of all the fresh water on the island (aside from rain), while a few others get some rather barren and inhospitable sections. A few seasons pass and, predictably, the guy with the lush valley is doing very well, has lots of surplus crop, and therefore plenty of free time to explore additional resources in his section, and develop more specialized skills (like blacksmithing or whatever). He manages to find some iron ore, figures out how to smelt it, and makes more tools that he uses to increase his own efficiency as well as trade to his neighbors for even more resources.

Meanwhile, the folks with the rougher sections are struggling - spending every waking moment trying to coax enough food out of their patch of land just to survive. They are working just as hard (or harder) and are just as competent as the others, so their hardship is solely based on their bad luck in the initial lottery. Soon enough they begin suffering from malnutrition which in turn makes them less efficient in their work, and eventually they have to approach the valley guy, who has way more food than he can eat anyway. Being a good libertarian, he only loans them the food - imposing a profitable interest rate and taking the deeds to their land as collateral. Of course this locks the unlucky farmers into a vicious cycle where they not only have to grow their own food but also pay back the valley guy (but their alternative was immediate starvation - and they're working too hard and long to develop any "innovations" that might get them out of that hole). Naturally, they end up forfeiting their land and have no choice but to go to work for the valley guy (if he deigns them worthy - otherwise they just die off). Valley guy has more than enough to take care of himself, so has no incentive to offer his new workers any more than subsistence pay, and a new and likely permanent underclass is created

The valley guy now has others to do all his farming for him, and can devote himself fulltime to developing resources and innovating new technologies, so he also has a monopoly on new inventions that enhance the lives of his neighbors (again, without any government interference). He has all this extra land, but to make it productive he needs to irrigate it, so he damns up and diverts the spring (as he has every right to do with his own property under libertarian law). With their water supply reduced to a trickle, the rest of the island's inhabitants soon go the way of their unfortunate neighbors and end up working for valley guy (if they're lucky). They could rise up and force valley guy to release the water, but that would be in violation of their libertarian principles - plus valley guy has stockpiled lots of weapons (through his previous endeavors) and has an army of field hands that will do as he commands or face termination and starvation.

So, valley guy becomes owner of the island and king of all that he surveys, while the rest are vassals with no hope of improving their lot (except perhaps by being especially servile to the king - brutally suppressing dissent and whatnot). They have no opportunity for innovation as they are working in the fields from dawn to dusk, and even if someone does invent something, valley guy can immediately claim it since they are all his employees and would have to use "his" resources to do develop it. All of those freedoms they valued so much are utterly irrelevant now. Conversely, valley guy has plenty of time, knowledge, and resources to provide every advantage to his own children to insure his legacy (not to mention having his pick of the healthiest, most intelligent mates amongst his stable of workers). So we end up with a good old fashion feudal system - the very antithesis of individual freedom (except for the guy at the top) - courtesy of the "free market" and libertarian principle (without government "protections", and irrespective of individual competency - it all came down to that initial luck of the draw).

If you think this scenario is too contrived and farfetched, that this "luck of the draw" is an insufficient force to account for the vast inequities in the world, consider the work of Jared Diamond. He's Pulitzer Prize-winning author that did extensive research into the fundamental reasons for the vast disparities in prosperity and technological advancement throughout history, and ended up coming to that very conclusion - that it all came down to where you happened to be born. Western civilization was birthed in the Middle East, where two-thirds of the most easily domesticated animals reside, and there's plenty of food sources, like grain, that have a long shelf life thus can be stored as insurance against future hardship (as well as freeing up some members of the community to become specialists and develop new technologies), while places like New Guinea have no animals suitable for domestication and no edible plants that last more than few days after harvest (so every member of the society has to work all day just to gather enough food to live another day). Check out his book, "Guns, Germs & Steel", or the PBS series of the same name (transcripts: http://www.pbs.org/gunsgermssteel/show/index.html).

Now, you might make the argument that the best regions of the world were inevitably dominated by the strongest and most competent human beings, and the weaker, lazier folk were forced out to the wastelands, but there are a number of problems with that. First of all, this is based on the principle of "might makes right", which is hardly a tenant of libertarianism, from what I understand. Also, you could just as easily argue that it just happened to be the first people that got to these regions, rather than the most competent (in fact, they might just might have ended up there because they were the weakest or laziest, and were forced out of their former territories. Once there they were able to fortify their position and quickly reap the benefits of their new environment, and thus give a sufficient foothold to keep that territory, regardless of their inborn abilities. Also, this "most competent" argument ignores the issue of offspring - it's quite conceivable that a strong and industrious child could be born of weak, lazy parents, but because they were forced out to the boonies before he was born, he'd never have the opportunity to improve his lot (and likewise a weak, lazy descendent of the demigods that conquered the Nile Valley could still maintain his holdings and high social position by no other virtue then his ancestor's legacy). To me this, and the scenario above, pokes a lot of holes in the whole "success goes to those who deserve it, and only government interference makes it otherwise" position that seems to be fundamental to libertarianism.

So, libertarians, what say you to this?

[Daldude]

Pardon my typos in the above post. That was alot of writing!

[Russ R.]

"So, libertarians, what say you to this?"

Nice hypothetical scenario.

How does it apply to the average suburbanite?

[Russ R.]

Oh... right. It doesnt.

[Paul]

A group of libertarians decide to provide an example to the world by getting together and buying an island and creating a society there based on the libertarian philosophy.

Oh my god. I thought we were done with the whole "ok...ok...two people on an island" hypotheticals since Jr. High.

Ok, response coming (if I feel better).

[modd]

If their land wasn't good for farming, they'd take up fishing, prostitution, gambling, or such. The whole paradigm, ignores this

[Daldude]

Wow, way to avoid the questions altogether, R. Russ.

It applies because it goes to the contention that people at the bottom of our society are there because of their own laziness or incompetentence, and that things would work out for everyone if we just let the free marget operate without governement regulation or protection of the disadvataged...

[modd]

Jared Diamond's thesis fails because he doesn't consider the political structure. See Mann's critique of Diamond in his book "1491".

[Egosumabbas]

So, libertarians, what say you to this?

Eh, it really depends on who you talk to. Some libertarians are anarcho-capitalist. Personally I'm a minarchist (I really don't care how local governments are run since you can vote with your feet--it's the federal government that concerns me).

As far as your anecdote is concerned, the citizens could have negotiated a better use of water rights (geolibertarianism), could have taken over the asshole with the spring by force if they decided that the original "contract" was violated (anarcho-capitalism), or could have pooled resources together in an attempt to make their lands more productive (anarcho-syndicalism), or if all citizens ended up being chattel for the King of the Spring, they could use a black market to subvert his authority (agorism).

[modd]

Liberty evolved from enough people finally seeing through the bullshit political leaders and religious leaders who were usually one and the same. Call it one of the greatest technologies ever. e. g. there's a good reason why google was born by college students and not as some huge gov't project in France

[Sean W. Malone]

"So, libertarians, what say you to this?"

Holy CRAP is what I say...

And then I say - why does everyone have to do the same thing for a living? Farming/basic food production is but one of many many necessary jobs in primitive society.

If I had the crappy land, I would do some digging and make bricks, shouldn't be too hard since all I have is open space with the sun shining down and some dirt/clay - then trade those bricks, and possibly aid in house-building, for food from the guy with the greener pastures...

Or maybe I'll go to the edge of the ocean, swim out to where no one had claim on the coastline and catch some fish - then sell/eat that.

So for one, there's myriad creative options which one can certainly use to find ways to trade/compete with the guy with better immediate resources.

BUT MORE IMPORTANTLY:

You've made a series of silly assumptions.

1. That the society would divide up territory based solely on random geographical lottery and not factor in usability. It would be a mighty stupid group of libertarians to not at least try to divvy up land somewhat equitably from the beginning if that's how they were going to apportion resources.

2. That there even IS such an island or place on the planet with such ridiculously uneven a distribution of fertile land/minerals/water/etc. that the scenario can even take place.

3. That the guy who randomly got the fertile land wasn't a complete imbecile and knew how to farm at all.

Your initial premises are so silly to begin with that it's hard to really take the situation that seriously, but as I pointed out, even if you do take it seriously - based on the idea of free-trade, no one can really monopolize that much land anyway... one guy doesn't have the time or physical ability to farm, harvest, mine, build houses, have a family, develop friendships, market and distribute his goods (what good is a surplus for surplus' sake afterall?) without the help of other people. And those other people can either parlay their work for the guy into wealth (i.e. getting paid in food and an eventual share of profits) OR they can be more creative and find other things to trade independently with everyone... It's what we did before we established governments.

[Gilbert Martin]

"It applies because it goes to the contention that people at the bottom of our society are there because of their own laziness or incompetentence, and that things would work out for everyone if we just let the free marget operate without governement regulation or protection of the disadvataged..."

Who claims that things will work out for everyone?

The point is that no one has an affirmative "right" to anything at all in the first place.

You're born, you have the right be left alone by the government and then you die. That's all there is and ever should be.

No one has an inherent right to receive anything from anyone else and no one has an inherent obligation to do anything for anyone else.

[Paul]

Therefore, every citizen and business entity of America is on welfare.

No, the government is on welfare, always has been on welfare and always will be on welfare. I have a job. I make my own money. The government takes some of my money, so the government is living off my largesse. The government doesn't suddenly become a welfare case because it spent more money than I give it.

[Dr. K.]

What kind of a fucktard signs a contract [ARM] like that?

Don't knock us fucktards. For a while, the market was offering an incredible proposition with very low initial rate ARMs. I did the math, and concluded there were lots of ways to use a 5/1 ARM and come out ahead.

As it turns out, the bet paid off spectacularly. I paid 3.25% for the first 5 years of the mortgage, and I will now re-fi to 5.25% fixed. That puts me thousands of dollars ahead of just getting a 5.5% fixed initially.

[Paul]

3. That the guy who randomly got the fertile land wasn't a complete imbecile and knew how to farm at all.

Yeah, no shit. You guys give me the one piece of fertile land on the island, and y'all are starvin'.

Just sayin'.

[Daldude]

Egosumabbas,

"As far as your anecdote is concerned, the citizens could have negotiated a better use of water rights (geolibertarianism), could have taken over the asshole with the spring by force if they decided that the original "contract" was violated (anarcho-capitalism), or could have pooled resources together in an attempt to make their lands more productive (anarcho-syndicalism), or if all citizens ended up being chattel for the King of the Spring, they could use a black market to subvert his authority (agorism)."

These kind of sound like "soicalist" solutions (contracts, pooling resources), or continual revolution to balance the inherent inequities of the free market.

Sean Malone,

Its just a hypothetical situation, but I don't find it all silly. If humanity started from one place in Africa, and expanded outwards by random exploration, than the luck of the draw would kind of apply there. That "equal distribution" at the beginning was presented to make things optimum for the libertarian model - in reality it was just whoever got there first...

Gilbert,

Then why bother to have a society at all?

[Nick]

The scenario doesn't make sense to this libertarian. Why would libertarians divide the island into equal sections disregarding the geography and resources of the island. Let us not forget that libertarians are generally smart people, not easily duped or conned into accepting teh shitty part of the island.

And what's to say the shitty part of the island (at first glance) does not have resources that can be used by it's owners in trade with valley guy? Maybe the shitty part has a salt mine or iron ore or sand for making glass, etc. And what people emigrating to this island are not bringing their intelligence with them?

My guess is, the group that decided to move to this island would be libertarian in their political outlook, and considering the hardships of a start-up society would work together of their own free will to cultivate food and build shelter. The individualist in the scenario retains his right to act on his own and separate himself from the group. He may suffer by his own limitations or he may thrive by using the land he chooses for his own subsistence. Perhaps he lives far from the valley where everyone else cohabitated. He may fish for food and live in a cave. He will also likely go insane by his solitude, humans being social animals and all. If he does go crazy so be it, until he initiates force on the valley residents and then they have every right to defend themselves.

I really don't see a likely scenario where libertarians would divide an island into equal acreage while not taking into consideration the benefits of the islands resources. Chances are there would be no artificial boundaries.

If anyone knows where this island is, I'd be happy to join my fellow libertarians there. That is, if we can get satellite television so I can watch football.

[Paul]

As it turns out, the [high risk] bet paid off spectacularly. I paid 3.25% for the first 5 years of the mortgage, and I will now re-fi to 5.25% fixed

Lucky you. If that bet hadn't paid off, I'm in no way responsible for your future living conditions, any more than you're responsible for my losses playing dice in the alley.

Let it ride!!! Dr. K. is coverin' for me!!!

[Steve Verdon]

I have been wondering for some time about where libertarians stand on economic inequality. The last 20 years the US and other industrialized countries have seen significant increases in economic inequality. If policy changes are not made inequality might well keep on increasing.

Okay, I have to ask: WTF is with this concern over inequality?

I ask because I have yet to see anything that necessarily implies it being bad. You turn to economic theory and the question is far from settled. Theoretical models say it is bad, others say it is good. You look at principle agent models and some degree of inequality is actually necessary in some cases. From an empirical standpoint we don't see much impact, at least yet.

People who blather and blubber on about inequality, IMO, are ignorant fools who just don't know their ass from hole in the ground when it comes to economics. They state: Inequality is Bad. But they can't say why, or if there are limits on how high inequality can go, and seem completely ignorant of looking at inequality in terms of consumption vs. income.

If we look around the world I believe a strong case can be made that higher inequality leads to less healthy societies.

How so? Now be careful here. You platitudinous mutterings about how it is "unhealthy" may sound wise and erudite, but in reality is sounds like the ramblings of a fool. Is there any reason why we want some level of inequality? I say yes, when you look at things like redistribution where worker ability is hidden from the government, as is the case in real life. So at best we need some level of inequality otherwise things fall apart. The high productivity workers try to mimic the low productivity workers--read the Hazlit extract above.

So now this puts you in the boat of how much is too much. That question, people like you, never ever answer. You always mouth/type these mealy-mouthed bormides about how it is bad, bad, bad. Please, provide us with something other than your own personal observations and feelings.

I would also argue that large economic inequalities leads to bad use of resources. You have rich people with much more money then they can sensibly use and poor people with virtually no health care.

The economy is not a fixed pie, where if I get more you get less. In fact, I'd argue that most economic transactions are mutually beneficial, at least that is how both parties see the transaction at first. Hence, it isn't necessarily the case that rising inequality has to mean that those at the low end of the income distribution are getting less and less.

The economic circumstances that we find ourselves in are to a large extent a result of our own decisions, but they are also to a large extent a result of conditions beyond our own control.

This is nonsensical. How much is a large extent? 70%? If so, then your circumstances are 140% due to your decisions and conditions beyond your control? That makes no sense. Here is a hint, in this kind of a context things must add up to 100%, it is an upper bound you cannot go past.

And when things are "beyond your control" you can take measures to minimize those impacts. One example is car insurance. An accident maybe 100% beyond your control (the other guy nods off and rear ends you). So you buy insurance. By excusing people from these kinds of outcomes you also reduce their incentive to take necessary precautions. In economics this is called moral hazard.

I am not advocating full equality, but I believe a sensible balance can be struck between individual economic freedom and keeping economic inequality within reasonable limits.

Why that is just spiffy. However you have completely and utterly failed to quantify anything. You have muttered some things that sound nice and touchy-feely but in reality offer no help at all.

I would love to hear libertarians view about economic inequality.
Do you not worry about it
no matter how extreme it becomes?
Do you have some libertarian solution to the problem?

Tell you what, when you solved the problems for:

The principle-agent problem,
Information constraints,
The problems associated with implementing second-best solutions,

Then we can worry about your questions. M'kay?

Sheesh.

[Gilbert Martin]

"Then why bother to have a society at all?"

To protect private property rights of course.

The most important thing any government can do.

[Paul]

These kind of sound like "soicalist" solutions (contracts, pooling resources), or continual revolution to balance the inherent inequities of the free market.

Daldude, you might find agreement intersecting with your views at points, but the real question that most libertarians want to know is when and how far do we go to balance said inequities of the free market.

The whole problem with the early twentieth century was that people actually believed that if you just go far enough, you can erase all inequities of the free market.

Hillary is a dangerous tool who's very possibly heading for an executive office with lots of new levers to power that she wouldn't have had eight years ago. Feelin' lucky?

[Egosumabbas]

Daldude: These kind of sound like "soicalist" solutions (contracts, pooling resources), or continual revolution to balance the inherent inequities of the free market.

Voluntary contracts and voluntary sharing of resources is perfectly compatible with libertarianism. Liberty includes voluntary associations. Socialism would be the FORCED sharing of resources, because "it takes a village".

[Dr. K.]

Lucky you.

Not really. What happened was pretty much the best case scenario, but there were many other situations (including ones with rising interest rates) where I'd still have come out ahead. Which is actually my main point. ARMs are getting a bad rap - "who would ever get one?" But I don't think a lot of people appreciate what an incredible deal they offered for a while.

If that bet hadn't paid off, I'm in no way responsible for your future living conditions, any more than you're responsible for my losses playing dice in the alley.

Completely agree. You won't benefit from my bet paying off; you wouldn't even see me complain if it hadn't.

[P Brooks]

So, libertarians, what say you to this?

I'll trade you this fish for that watermelon.

[Nick]

P Brooks, I don't like watermelon but I have a fire pit we could use to cook some of those fish! Know anyone that has any beer?

[P Brooks]

There's a guy on the other side of the island who brews a mean rice beer, and he needs some more casks. I hear the cask guy is a watermelon JUNKIE.

[swillfredo pareto]

The appreciation - stock price - is more important than the dividends.

Lamar, read the second half of the paragraph. Wal-Mart's share price has not budged in 10 years. I could have put the money under my mattress and it would be worth just as much. Wal-Mart was a growth stock up until the mid-90's. Since then, a dog. Of course it is up about 10 percent in the last month as the demagogues talk the economy into the toilet.

Okay, I have to ask: WTF is with this concern over inequality?

You answered your own question. The modern liberal interpretation of income distribution is predicated upon the assumption that wealth is a zero sum game. The fact that Bill Gates has $50 billion means that the rest of us are $50 billion lighter. The fact that the rest of us have a suite of M$ applications at our disposal that we value more than $50 billion never crosses their minds. Minnesota seemed to think that Herschel Walker was worth what they gave up for him at one point.

[Reinmoose playing a progressiv]

There's a guy on the other side of the island who brews a mean rice beer, and he needs some more casks. I hear the cask guy is a watermelon JUNKIE.

If he's a watermelon junkie, wouldn't it be immoral for "us" to give him watermelon?

[gp]

I think silva has far more money than he can sensibly use. We're sensible people. Let's take it from him.

[Nick]

Yes, Progressive Reinmoose, it would be. But that's why your opinion doesn't mean shit to us. We respect the cask guy's personal choices. If he's too strung out on watermelon to make my cask, I'm grilling glass-maker some of P Brooks's fish (if he's on board, of course) for a pint.

Now, if you know where Libertarian Reinmoose went, he's welcome to partake if he's got some all spice and/or butter, or that satellite hook-up I was looking for.

[Reinmoose still playing a prog]

Frankly, I think we should seize all of the watermelon-junkie's assets and property, take the burden of producing for him upon ourselves, and giving him watermelon-less subsistence until he gets better.

[Reinmoose]

mmm... butter

[Sean W. Malone]

See what you've started Daldude?

Btw, who here hasn't thought seriously (and more than once) about attempting to accomplish a kind of Galt's Gulch libertarian island?

If I can figure out how to build enough assets to buy an island it's exactly what I intend to do.

[Daldude]

Thanks to those of you who took my query seriously (and overlooked my abundant typos). I did get some food for thought (no pun intended). Let me address a few points before we move one, though.

The random parsing of the island without regards to resource distribution was meant to simulate conditions of the earliest human societies. It was unlikely that they had the means to survey all potential migration areas for resources (especially if doing so out of desperation), so acquisition of a "lush valley" was probably more a matter of chance than competence.

The various creative "workarounds" for the scenario (brickmaking, moonshining, fishing, etc.) were certainly interesting. Some of these assumed preexisting knowledge certain skills (especially moonshining), while others assumed there would be time to develop the alternative before starvation, or that there would in fact be a market for the product. As far as fishing goes, the example I gave did bypass the possibility of "hunting and gathering" (which would have some relevance to competence). But with the simulation of early society in mind, hunting and gathering was all that they did (I just substituted farming in the modern model), and that could still have a significant element of chance (who found the best hunting ground first).

It seems to me that the essential purpose of society (aside from loneliness) would be to minimize risks of random occurance - to pool resources so that any member of the group would be covered in case of injury or other bad luck. This would be the main reason why social animals now dominate most of the world, and why humans, who took that idea much further than any others, became its master.

Of course, it's a long journey from "pooling resources" to telling people what they can or can't do with their own body, which is where I merge with the libertarian philosophy, but I think its a dangerous error of extremism to deny society the pooling advantages that spurred its very origin, or shield oneself from the realities of misfortune and accident of birth out of some kneejerk and dogmatic defense of the ideology...

[Daldude]

Wow. Killed that thread but good...

[Paul]

ARMs are getting a bad rap - "who would ever get one?"

Dr. K., let me pull back a bit, I also agree that ARM's have their place. So do even the much feared and now dreaded "interest only" loans. Example:

Young couple, wife is preggers, she quits her high-paid career so she can bond with the little one. Dad keeps working in his career-- couple's income is effectively cut in half.

They want their upscale craftsman in the quaint walkable neighborhood, but can't afford it on but one lawyer's salary. So they do an interest only loan, timed so that the principle comes due about the time mom gets tired of wiping noses and changing diapers, and she goes back to work effectively doubling their income. Ie, the couple fully plans a sudden and significant boost in income down the line.

What has been going on is that people saw the payments on an interest only loan, and then when they read all the paperwork where it talked about principle coming due, they heard "blah blah blah" and signed the papers.

I truly feel for people who are say, recent immigrants, are real victims of fraud etc. And, I agree, that the loans are getting the bad rap, and that shouldn't be. The people are the ones who should be getting the bad rap. But they're not.

[Paul]

to pool resources so that any member of the group would be covered in case of injury or other bad luck.

No disagreement there. The disagreement begins at what constitutes "injury" or "bad luck". All of the people will agree with certain definitions, some of the people will agree with all of the definitions, but all of the people will never agree with all of the definitions. Case in point: the current mortgage crisis. There are small islands of people who've been hit with bad luck in a sea of upper-middle-class people who simply overplayed their hand.

[Sean W. Malone]

Daldude,

Thanks for the thoughtful response, but I do have a few points of contention:

First: "to pool resources so that any member of the group would be covered in case of injury or other bad luck."

No, I would say that the purpose of pooling resources is first and foremost to protect each other from outside predators and to work together so that survival is easier - I think you'd be pretty hard pressed to find an example of a Chimpanzee or a Bonobo (much less Lions or Water Buffalo) making sure the injured or "unlucky" are "covered". So from a biological stand point I don't really think you can make that case.

Beyond that - none of us suggested that "pooling resources" voluntarily is a bad thing... what if 5 of us got individually useless land out the (stupid) deal (we would have never made in the first place) but combined our land is useful to us all - there's nothing stopping the 5 of us from getting together and making something better.

And I guess I have another serious question about your hypothetical more generally...

If it's supposed to be 100% primitive, as if we just dropped ourselves down on an island and lost the last 100,000 years of human evolution, then why can we assume even the skill of farming ability? (Unless you think that anyone can immediately be a great farmer or food producer?) For that matter why would we assume that we had the philosophy in place to apportion land at all? And why, assuming we are too stupid to apportion land equitably, are we all unable to realize this before we starve to death and the one guy who got lucky "owns everything"... and on THAT note - what good is owning an island of dead bodies and desert?

The bottom line is, as I said before, the hypothetical is silly. It makes a number of assumptions that really only point to the group of people in your fictitious society being complete boobs and ignores a lot of crucial components to libertarian philosophy... and thus fails as an example of a libertarian ideal.

[Paul]

No, I would say that the purpose of pooling resources is first and foremost to protect each other from outside predators and to work together so that survival is easier

Sean, to libertarians, this constitutes a definition of "injury" or "bad luck".

[Sean W. Malone]

Right - and I'd agree with that definition with you... but I doubt Daldude is talking about that.

I get the impression that he's talking about people who accept bad financial deals or get sick without health insurance.

Here's the problem with loose definitions... I'd love a society that protects me from being stabbed by some crazy guy running after me with scissors. However, I don't want a society that protects me from stabbing myself while running with scissors.

You know the difference - so do I. Not everyone does.

[Sean W. Malone]

"Bad luck" is most often solipsism as a disguise for being ill-prepared.

I think the goal here is to take pity on people who truly have bad luck and try to help in ways we can - but through the use of force.

[Paul]

by some crazy guy running after me with scissors.

If he falls and hurts himself before he gets to you, is that bad luck for him, good luck for you? And who equalizes those outcomes?

[Sean W. Malone]

No one equalizes the outcome - Neither I nor anyone else forced him to run with scissors in that situation did they? No one but the individual who chose to run bears the responsibility. Likewise, you wouldn't suggest that "society" or a home-owner owes anything to a burglar who cut up his arms breaking the window of a house he was about to rob would you?

[Paul]

Sean... I was uh, trying to be funny...

Is this thing on? *phhphh*

[Lamar]

Despite the disagreements and rhetoric on this thread, I have to go on record at pro-butter.

[Sean W. Malone]

Oh... well... uhh...

Guess I forgot who I was talkin' to? *lame excuse for being dense*

[Sean W. Malone]

I'm pro-smart balance "buttery spread"... you and your pro-butter ways must be mandated out of existence.

[Lamar]

I was for smart balance "buttery spread" before I was against it.

[Sean W. Malone]

Waffle! Flip-flopper! You, sir, reek of "frenchman"

[Lamar]

That's just partisan rhetoric. Every member of government believes that every square of every waffle in America today must have delicious buttery flavor. And I believe we've reached a bi-partisan consensus for melted delicious butter on every slice of french toast as well.

[prolefeed]

Lamar, you're just a shill for Big Butt ... er ... Butt Bigger. No, that's not it either.

Must. Stop. Drinking.

[John C. Randolph]

Commie bitch.

-jcr

[John C. Randolph]

"The free market economy and capitalism in US has certainly proved that it can't run things itself. "

Bullshit. The history of the US (and the world, for that matter) shows that we do far better with less, not more government interference in the economy.

Our current bubble comes from the fact that banks have been able to lend out fiat currency created from thin air, rather than having to accumulate deposits to lend out. Upshot: the cost of credit was artificially forced down by an incompetent central planning authority (the federal reserve), whose purpose is not to control inflation as they pretend, but to promote the interests of their owners (the shareholders of the banks.)

Anytime you force a price below the level it would find in a free market, you will increase the demand. With ordinary commodities, the upshot is scarcity of that commodity with the artificially lowered price. When the commodity in question is the currency, the result is bad investments, whether it's loaned to real estate buyers, consumers who take on credit card debt they can't pay, or foreign governments who fall for the IMF trap.

Free money for nothing is fun for a decade or two, but the market always wins in the end, and the bills come due.

-jcr

[John C. Randolph]

ARMs vs. fixed-rate mortgages aren't the problem. The problem is that the currency the banks were lending out was fundamentally fictitious. That can work if the issuing entity has the discipline to maintain the scarcity of the currency, but no government or bank that's ever been given the power to issue scrip has EVER had that discipline.

-jcr

[John C. Randolph]

" To avoid any "corruption" of the experiment they decide to start with no technology "

You're wondering how Amish Libertarians would do things? Why not ask about martians or unicorns?

-jcr

[John C. Randolph]

"So "corporate greed" caused the Fed to artificially lower interest rates"

Well, in a sense.. The corporations that did this were the banks that own the fed.

Banks are fine and dandy, until and unless you hand them a power that nobody should have in the first place.

-jcr

[Lamar]

prolefeed: I did not have sexual...relations with that.....butt....er, Ms. Butterworth.

[Sean W. Malone]

"Well, in a sense.. The corporations that did this were the banks that own the fed.

Banks are fine and dandy, until and unless you hand them a power that nobody should have in the first place."

Touche - though I might also note the pressure from our elected officials to make sure everyone became a home-owner due to some bizarre concept that just by owning a house, you suddenly obtain healthy finances... kinda missing the whole chronology of cause and effect.

[abroad]

Before trashing on suggestions for public investments in education, health care and infrastructure in general and internet in particular, I suggest each of us look back and examine what the "system" gave to us.

There is no such thing as a self-made man.

[economists]

abroad,
Ah, yes, be grateful to the state for taxing you and then spending the money on things IT says you should have spent it on, and never question the wisdom of our dear democratically elected officials. Never ask if those benefits from "the system" are worth the cost in wasted tax dollars, burdensome regulation, and (in the case of many recent wars) lives. All hail the majority!

[Godfrey]

Some advice, please.

I am registered "decline to state" in California, which entitles me to vote in the Democratic Primary. As an independent libertarian, I am considering how to use my vote most judiciously. Therefore, I ask you: Should I vote for Hillary or Barak? While obviously neither is preferable to, say, Ron Paul, which is the lesser of two evils from a libertarian standpoint?

I'd be interested in hearing some responses.

[Godfrey]

Um...or not.

[Sean W. Malone]

Godfrey:

I would personally recommend switching to a Republican affiliation, voting for Ron Paul and avoiding the Hillary/Barak mess entirely.

If that doesn't suit you, then I would say don't vote at all. Voting for the lesser of two evils only increases the evil... Speaking for myself, voting on principle and for the person who most closely represents your values is really the only way to not waste your vote.

No one does it of course... but ya know what, they should.

[Godfrey]

Sean: Actually, I'm planning on staying independent but thought I'd use my eligibility to vote in the Democrats' primary in order to further libertarianism, if only in some tiny way. Maybe this is a bad idea, though: my girlfriend is a Democrat and has threatened me with abstinence if I interfere with the donkey race... 🙂

[Bob]

Plain and simple:

Hillary Clinton is a dictatorial socialist.

Hillary Lenin, that is.

Thanks for reading.

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[sac hermes 2012]

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