Unions are dying, and that is a measureable fact. Today, only 7% of the American workforce is a member of a union, down from 35% just a few decades ago. But it this good, or bad?
The strict capitalist will say it is good, because unions disrupt the free market. Because of unions, they say, the market cannot set the true price of labor, and thus, the owner-class has to artificially inflate the cost of goods. The moderate capitalist will respond by saying that unions prevent a downward spiral. The owner class wants to pay the worker the lowest wage possible. Thus, the worker will work more and more cheaply, in more and more dangerous working conditions, until finally there is no middle class left that can afford any goods and services. In the end, then, everyone, including those in the owner class, ends up poor.
I believe that the second argument is correct. I think that there is good evidence that the existence of collective bargaining saved capitalism from itself during much of the 20th century.
However, it does not follow that because unions were important in the past that they will always be important. I don’t have studies or statistics, but I do have my own experience to share. In between undergrad and grad school, I worked for a small business that manufactured and sold chemical cleaning products. There were about 75 full time employees, and no one thought about unionizing – we just didn’t need to. The owners of the company were extremely concerned about employee safety, and we were given a decent wage, medical benefits, educational opportunities, and a 401K.
I think that this is because the owners of that business knew that if they didn’t offer those things, the talented employees would simply go work somewhere else. But this opportunity has not always existed for people (and in some cases and in some areas of the country and the world, it still doesn’t exist). For example, 50 years ago, it probably would have been too complicated (socially, economically, and otherwise) for the metal worker unhappy with his compensation package simply to pick up and move to a different area of the country.
Today, however, the world is mobile. People change jobs and even careers all the time because they are unhappy with their current job. This forces the owner class to provide safe, comfortable working conditions and decent wages. So, while I disagree strongly with the strict capitalists that unions undermine capitalism, I don’t know if we still need them.
Any liberals more educated on the subject than I want to educate me about why I'm wrong here?
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
2.23.2011
8.15.2010
Four Theories of Government Involvment, Part II
I want to start by analyzing the two ideologically pure positions of the role of government: socialism (this week) and libertarianism (next week). Strictly speaking, those two theories are not real opposites, since socialism is merely an economic theory and libertarianism is the theory that government – particularly the federal government - should be absent in all or nearly all areas of social and economic life. So Communism may actually make a better ‘opposite’ to libertarianism, since Communism not only advocates government control of the economy, but also that government control all aspects of social life, such as mandating religion (or lack thereof), who you marry, how many children you can have, etc.
In regards to Communism, my criticism is basically the same as everyone else’s: nice sounding theory on paper, not so great in reality. Marx did genuinely begin his quest for a noble reason: compassion for exploited capitalist workers. It is hard for us to imagine exploitation; we may think exploitation is working an extra 2 unpaid hours a month or something like that. But In Marx’ day, there was no workman’s comp, no overtime pay, no minimum wage (and so workers kept undercutting each other), no unemployment insurance, no unions, no sick leave, no vacations, and no safety regulations. And young women in the workplace? Forget about it – have a baby, you’re fired! Still doesn’t sound so bad? Well, add to that the fact that most work was difficult and extremely dangerous. What you end up with is depressed, sick, and injured workers who can’t feed their families anyway. In order to remedy this, Marx recommended that there be no private property. The hope is that if there is no private property, then no rich person can exploit a poor person. We should never forget this when critiquing socialism.
But as most of the world has now admitted, a government cannot create wealth. Hence, economic equality ends up meaning that everyone is equally poor. My favorite example is from Cuba. Only after Raoul Castro took over were cell phones permitted. ‘What could anyone have against a cell phone?,’ you may ask. Well, remember in the 90s when everyone talked about ‘bling’? Bling, apparently, referred to such things as light reflecting off your gold chains, or the sound that a cell phone would make. Bling was significant because it meant that you had status – that you were more important than your neighbor. Easy solution for Fidel: no cell phones, no inequality (that’s not the whole story, but that’s a part of it).
Well, capitalism wins again. It turned out that after a few years of private economic competition working its magic, everyone got a cell phone. Now, everyone’s life is easier, competing cell phone companies have created a ton of wealth, cell phones are no longer a status symbol, and human beings are still trying to flee Cuba.
I intentionally started this series with an uncontroversial post (unless I have any Communist/socialist/Marxist blog readers I don’t know about), but I’m going to start getting controversial next week. Then, I will argue that a similar critique can be made of libertarianism: sounds nice on paper, but in reality it just doesn’t work. There has never been, is not now, and never will be a successful economy that is not overseen by the federal government. And yes, that does include early America: even the Founders intentionally left many ways for the federal government to intervene in the economy and to place limits on capitalism.
In regards to Communism, my criticism is basically the same as everyone else’s: nice sounding theory on paper, not so great in reality. Marx did genuinely begin his quest for a noble reason: compassion for exploited capitalist workers. It is hard for us to imagine exploitation; we may think exploitation is working an extra 2 unpaid hours a month or something like that. But In Marx’ day, there was no workman’s comp, no overtime pay, no minimum wage (and so workers kept undercutting each other), no unemployment insurance, no unions, no sick leave, no vacations, and no safety regulations. And young women in the workplace? Forget about it – have a baby, you’re fired! Still doesn’t sound so bad? Well, add to that the fact that most work was difficult and extremely dangerous. What you end up with is depressed, sick, and injured workers who can’t feed their families anyway. In order to remedy this, Marx recommended that there be no private property. The hope is that if there is no private property, then no rich person can exploit a poor person. We should never forget this when critiquing socialism.
But as most of the world has now admitted, a government cannot create wealth. Hence, economic equality ends up meaning that everyone is equally poor. My favorite example is from Cuba. Only after Raoul Castro took over were cell phones permitted. ‘What could anyone have against a cell phone?,’ you may ask. Well, remember in the 90s when everyone talked about ‘bling’? Bling, apparently, referred to such things as light reflecting off your gold chains, or the sound that a cell phone would make. Bling was significant because it meant that you had status – that you were more important than your neighbor. Easy solution for Fidel: no cell phones, no inequality (that’s not the whole story, but that’s a part of it).
Well, capitalism wins again. It turned out that after a few years of private economic competition working its magic, everyone got a cell phone. Now, everyone’s life is easier, competing cell phone companies have created a ton of wealth, cell phones are no longer a status symbol, and human beings are still trying to flee Cuba.
I intentionally started this series with an uncontroversial post (unless I have any Communist/socialist/Marxist blog readers I don’t know about), but I’m going to start getting controversial next week. Then, I will argue that a similar critique can be made of libertarianism: sounds nice on paper, but in reality it just doesn’t work. There has never been, is not now, and never will be a successful economy that is not overseen by the federal government. And yes, that does include early America: even the Founders intentionally left many ways for the federal government to intervene in the economy and to place limits on capitalism.
6.13.2010
Are You More Afraid of the Government or the Super-Capitalists?, Part II
Defining our political views as simply conservative or liberal is often difficult, but I think one important piece in the puzzle is identifying who we are more afraid of: the government, or the super-capitalists. I laid out some very basic reasons last week why we might be (and should be) afraid of the government, but for the next weeks I want to argue that we should be more afraid of the super-capitalists.
Capitalism is simply when the means of production are owned privately. My adjective ‘super’ is supposed to identify those private companies whose production methods have an effect on the lives a large number of common citizens. So for example, BP would be a super-capitalist corporation on my definition because they control a huge portion of energy supply. But while it is true that I use their products, that is not why I call them ‘super;’ what is important for my purposes is that the way they produce energy has an effect on my life. So a regular capitalist would be like a small-time farmer. He is a capitalist because he owns the means to produce food (the land, the seeds, the tractor), but he is not a super-capitalist because how he produces his goods has little or no effect on me (at least if I am not consuming his products).
Before I proceed with my argument, I want to propose an analogy. This analogy first occurred to me a couple of years ago, and since then, it has proven to be remarkably accurate and predictive of events. As a result, my economic and thus political opinions have generally been guided by it. Here it is:
I think that the free market is like a fire. One thing we know about fires is that they can seem like miracles to those who need them. You don’t have to go very far back in history to a time when an open fire was the only way to cook, the only source of light, and the only way to avoid freezing to death. Can you imagine how valuable a fire must have been to our ancestors? Similarly, the free market can seem like a miracle because it actually has the power to create wealth – just like that, out of thin air. I still don’t understand how this works, but it does. The free market can make the wealthy even wealthier it can make a middle-class family rich, and it can make a poor family middle-class. Importantly, it does this without necessarily ruining someone else’s economic prospects. There is no way for the government to create wealth; at best, they can print money, but this doesn’t actually produce wealth because of the immediate problems with inflation, etc.
But of course, we know something else about fires, namely, their destructive capabilities. Just like that, an untended fire that was providing light and heat to those who were cold and in the dark suddenly turns on its former beneficiaries, consuming them, its surroundings, and eventually itself. The clear lesson is that fires must be tended. I will defend the accuracy of this analogy in the next weeks.
Capitalism is simply when the means of production are owned privately. My adjective ‘super’ is supposed to identify those private companies whose production methods have an effect on the lives a large number of common citizens. So for example, BP would be a super-capitalist corporation on my definition because they control a huge portion of energy supply. But while it is true that I use their products, that is not why I call them ‘super;’ what is important for my purposes is that the way they produce energy has an effect on my life. So a regular capitalist would be like a small-time farmer. He is a capitalist because he owns the means to produce food (the land, the seeds, the tractor), but he is not a super-capitalist because how he produces his goods has little or no effect on me (at least if I am not consuming his products).
Before I proceed with my argument, I want to propose an analogy. This analogy first occurred to me a couple of years ago, and since then, it has proven to be remarkably accurate and predictive of events. As a result, my economic and thus political opinions have generally been guided by it. Here it is:
I think that the free market is like a fire. One thing we know about fires is that they can seem like miracles to those who need them. You don’t have to go very far back in history to a time when an open fire was the only way to cook, the only source of light, and the only way to avoid freezing to death. Can you imagine how valuable a fire must have been to our ancestors? Similarly, the free market can seem like a miracle because it actually has the power to create wealth – just like that, out of thin air. I still don’t understand how this works, but it does. The free market can make the wealthy even wealthier it can make a middle-class family rich, and it can make a poor family middle-class. Importantly, it does this without necessarily ruining someone else’s economic prospects. There is no way for the government to create wealth; at best, they can print money, but this doesn’t actually produce wealth because of the immediate problems with inflation, etc.
But of course, we know something else about fires, namely, their destructive capabilities. Just like that, an untended fire that was providing light and heat to those who were cold and in the dark suddenly turns on its former beneficiaries, consuming them, its surroundings, and eventually itself. The clear lesson is that fires must be tended. I will defend the accuracy of this analogy in the next weeks.
6.07.2010
Should We Be More Afraid of the Government or the Super-capitalists?
Most people, myself included, would call the government a ‘necessary evil.’ Anyone would love to be in a world where nations generally got along, where citizens and corporations behaved responsibly, and where basic public needs were easily met by our neighbors and religious communities. But of course, that is not the world we live in. As a result, we hand over a portion of our freedom to this entity called the ‘government,’ which is frequently corrupt and sometimes incompetent; but given the choice between subjection to this imperfect institution and a society without supervision, we choose the government. The difference between conservatives and liberals concerns the level of control that we are willing to hand over.
So while the government is necessary, we also recognize that it can be corrupted and thus should evoke fear. It is a fact that almost all of the major tragedies in human history have occurred because of bad government. So shouldn’t we all be political conservatives? Isn’t is just common sense that we should want our government to provide basic protections such as the police and basic services such as roads and then get out of our lives?
My answer is ‘no.’ Although I think that we always need to be vigilant and afraid of our government, there is an entity out there far more dangerous than the government; I’m speaking of the super-capitalists. My term ‘super-capitalist’ does not have a rigorous definition, but I am trying to pick out those in the private sector who control a disproportionate percentage of the means of production. There are lots of small and mid-size private businesses out there, but in modern capitalism, just a few dozen people own almost everything. Over the next few weeks, I want to argue that we should be more afraid of these folks than the government. As a result, we need a government large enough to control them.
So while the government is necessary, we also recognize that it can be corrupted and thus should evoke fear. It is a fact that almost all of the major tragedies in human history have occurred because of bad government. So shouldn’t we all be political conservatives? Isn’t is just common sense that we should want our government to provide basic protections such as the police and basic services such as roads and then get out of our lives?
My answer is ‘no.’ Although I think that we always need to be vigilant and afraid of our government, there is an entity out there far more dangerous than the government; I’m speaking of the super-capitalists. My term ‘super-capitalist’ does not have a rigorous definition, but I am trying to pick out those in the private sector who control a disproportionate percentage of the means of production. There are lots of small and mid-size private businesses out there, but in modern capitalism, just a few dozen people own almost everything. Over the next few weeks, I want to argue that we should be more afraid of these folks than the government. As a result, we need a government large enough to control them.
12.14.2009
The Governement Can't Do Anything Right?
Children speak in extremes – “All,” “None,” “Every.” The reason that these words are childish is because except for in mathematics, these words are rarely true. So it is unfortunate that so many supposed adults adopt this mantra: “The government can’t do anything right.” If you watch Fox News in the evening, it will probably only take you 15 minutes to hear this phrase in this exact wording.
But this is a senseless phrase uttered by thoughtless people. Brief reflection reveals this truth instead: there are 1) some things that the free market does well, 2) some things that the government does well, and 3) some things that the government doesn’t do particularly well, but there is no free market solution for it, and so we are stuck with the government. The successful politician distinguishes between these three types of activities, and acts accordingly. The Republicans simply try to shove everything into the first column.
There are of course plenty of examples of #1: the free market has given us many wonderful things and improved all of our lives. But, although the Republican will be surprised to learn this, there are also many examples of #2. Do you ever worry about the mail you send? Do you ever use your tap water? Do you know any old people who want private insurance rather than Medicare? These are trustworthy services provided by the government. There are also examples of #3. For example, it is cheaper for company X to dump its hazardous waste into the river behind its factory than to dispose of it properly. Now, sometimes the EPA does an alright job of preventing this, sometimes it does not. But there is no free-market solution for this (the free-market is the problem here), and so we are forced to hope that the EPA is competent.
We need a leader who allows to the free market to work its magic, provides citizens with services when appropriate, and has the courage to stand up to the free market when the free market is threatening to destroy itself and us. If the Republicans ever come up with a candidate like this, I will consider voting for him or her. But right now, the Republican party is filled with children who think that no matter what the problem, the solution is the free market. This is only true occasionally.
But this is a senseless phrase uttered by thoughtless people. Brief reflection reveals this truth instead: there are 1) some things that the free market does well, 2) some things that the government does well, and 3) some things that the government doesn’t do particularly well, but there is no free market solution for it, and so we are stuck with the government. The successful politician distinguishes between these three types of activities, and acts accordingly. The Republicans simply try to shove everything into the first column.
There are of course plenty of examples of #1: the free market has given us many wonderful things and improved all of our lives. But, although the Republican will be surprised to learn this, there are also many examples of #2. Do you ever worry about the mail you send? Do you ever use your tap water? Do you know any old people who want private insurance rather than Medicare? These are trustworthy services provided by the government. There are also examples of #3. For example, it is cheaper for company X to dump its hazardous waste into the river behind its factory than to dispose of it properly. Now, sometimes the EPA does an alright job of preventing this, sometimes it does not. But there is no free-market solution for this (the free-market is the problem here), and so we are forced to hope that the EPA is competent.
We need a leader who allows to the free market to work its magic, provides citizens with services when appropriate, and has the courage to stand up to the free market when the free market is threatening to destroy itself and us. If the Republicans ever come up with a candidate like this, I will consider voting for him or her. But right now, the Republican party is filled with children who think that no matter what the problem, the solution is the free market. This is only true occasionally.
9.15.2009
Health Care, Part III: Healthcare and Capitalism
I am a fan of capitalism. A big fan. It is an economic system that can actually create wealth by harnessing talent, intelligence, and hard work, and in the end, everyone experiences the benefits. I like the fact that Wall Street executives get huge, ridiculous bonuses for doing a good job (although what happened recently was an outrage because many executives got enormous bonuses for doing a bad job). If you are good at your job, and your job is important, I have no problem with you getting rich. I like, for instance, that Steve Jobs and Bill Gates have more money than they know what to do with.
However, just because capitalism is appropriate for some situations, we cannot assume that capitalism is appropriate for all situations. Take for instance the health insurance industry. Conservatives are angry because a public health insurance option may put private insurers out of business eventually, and honestly, I think they are right. But so what? What’s so great about health insurance being subjected to capitalism?
Consider this difference: Steve Jobs had to be really smart to start a company that eventually gave us the iPhone. His intelligence, skill and hard work were rewarded by market, and he got rich. Good for him. But why in the world are there rich insurance executives? America is the ONLY country on this earth that has multi-millionaire insurance executives. The average pay for upper-level management is 12 million per year this year. But don’t they deserve their wealth, the way (some) Wall Street executive do?
In a word - NO! Health insurance isn’t chess; it's checkers. You get a certain amount of money coming in each month from premiums – let’s call that x, and you pay out a certain amount each month in claims – let’s call that y. In order to make money, your x has to be higher than your y. So what do you do to make that happen? Well, sometimes it happens naturally, and sometimes you have to deny a certain number of claims. That’s it. Someone please tell me why people deserve 12 million bucks a year for making that happen. Sure, you need a few competent people running your company and you have to have some good accountants, but their intelligence is just not irreplaceable enough to warrant giving them all that money. Capitalism just doesn’t make sense here, the way it does for financial markets, computer design, etc. We should take a cue from the rest of the world: no one needs to become a multi-millionare for figuring out how many claims to pay out.
However, just because capitalism is appropriate for some situations, we cannot assume that capitalism is appropriate for all situations. Take for instance the health insurance industry. Conservatives are angry because a public health insurance option may put private insurers out of business eventually, and honestly, I think they are right. But so what? What’s so great about health insurance being subjected to capitalism?
Consider this difference: Steve Jobs had to be really smart to start a company that eventually gave us the iPhone. His intelligence, skill and hard work were rewarded by market, and he got rich. Good for him. But why in the world are there rich insurance executives? America is the ONLY country on this earth that has multi-millionaire insurance executives. The average pay for upper-level management is 12 million per year this year. But don’t they deserve their wealth, the way (some) Wall Street executive do?
In a word - NO! Health insurance isn’t chess; it's checkers. You get a certain amount of money coming in each month from premiums – let’s call that x, and you pay out a certain amount each month in claims – let’s call that y. In order to make money, your x has to be higher than your y. So what do you do to make that happen? Well, sometimes it happens naturally, and sometimes you have to deny a certain number of claims. That’s it. Someone please tell me why people deserve 12 million bucks a year for making that happen. Sure, you need a few competent people running your company and you have to have some good accountants, but their intelligence is just not irreplaceable enough to warrant giving them all that money. Capitalism just doesn’t make sense here, the way it does for financial markets, computer design, etc. We should take a cue from the rest of the world: no one needs to become a multi-millionare for figuring out how many claims to pay out.
10.06.2008
How Bad Would a Second Great Depression Be?
Let me answer this question from two perspectives – the perspectives of the ‘actual me’ and the ‘ideal me.’ The ‘actual me’ is quite afraid of a severe economic downturn. I have no idea how likely one is, but I am going to be looking for a full-time professorship in the next two years, and I really, really want there to be a job for me.
But it’s not very interesting what the ‘actual me’ believes. The ‘ideal me’ calls for a very different emotion than fear. This is because there is a fact, breathtakingly both in its simplicity and irrefutability, which we all learned in second grade: material possessions do not increase happiness. Of course, this excludes instances of extreme poverty. Someone lacking food, shelter, and basic health care is likely to be miserable, after all - especially if he or she is looking after children.
But beyond extreme poverty, which is not a serious possibility for us Americans, it is undeniably true that money and possessions have little to do with happiness. If anything, happiness decreases as access to luxuries increases. I was reminded of this while reading the Ancient Greek philosopher, Epicurus, this weekend. One of his most interesting insights is that desires for possessions are inevitably mistaken attempts to fulfill basic psychological needs. For example, we might buy a particular car because we imagine the cluster of people that want to take a ride with us. An Epicurean analysis might be that we are not purchasing the car, but friendship. This is important because we can get friendship in many different ways – most of them free.
It is silly to believe that our generation is somehow “happier” than our parents’ or grandparents’generations. It is just that we have more stuff. This has been true even in my own life. Only two years ago, limited money forced me to ride a bike and take the bus all around town, and my travel budget was about $20 a month. Then when I got more money, I bought a car. I do not plan on going back to bike riding – that was hard work – but I can honestly say that on the whole, I have not been any more or less happy in the last two years. I can remember feeling quite satisfied with my life during my bike riding days – in fact, about as happy as I am now. The difference – a whole lotta money!
But it’s not very interesting what the ‘actual me’ believes. The ‘ideal me’ calls for a very different emotion than fear. This is because there is a fact, breathtakingly both in its simplicity and irrefutability, which we all learned in second grade: material possessions do not increase happiness. Of course, this excludes instances of extreme poverty. Someone lacking food, shelter, and basic health care is likely to be miserable, after all - especially if he or she is looking after children.
But beyond extreme poverty, which is not a serious possibility for us Americans, it is undeniably true that money and possessions have little to do with happiness. If anything, happiness decreases as access to luxuries increases. I was reminded of this while reading the Ancient Greek philosopher, Epicurus, this weekend. One of his most interesting insights is that desires for possessions are inevitably mistaken attempts to fulfill basic psychological needs. For example, we might buy a particular car because we imagine the cluster of people that want to take a ride with us. An Epicurean analysis might be that we are not purchasing the car, but friendship. This is important because we can get friendship in many different ways – most of them free.
It is silly to believe that our generation is somehow “happier” than our parents’ or grandparents’generations. It is just that we have more stuff. This has been true even in my own life. Only two years ago, limited money forced me to ride a bike and take the bus all around town, and my travel budget was about $20 a month. Then when I got more money, I bought a car. I do not plan on going back to bike riding – that was hard work – but I can honestly say that on the whole, I have not been any more or less happy in the last two years. I can remember feeling quite satisfied with my life during my bike riding days – in fact, about as happy as I am now. The difference – a whole lotta money!
5.13.2008
American Politics, Part IX
Last time I pointed to an important dissimilarity between health care and the rest of the marketplace, and this week I want to argue for another important difference. The concern of the capitalist, which I share, is that when people don’t own something, they tend to neglect it in a way that they would not if it were privately owned. Two cheesy, overused, and yet accurate examples: 1) we all know what happens when you get behind the wheel of a rental car. While you don’t trash it, you are harder on a rental car than your personal car, because you are not going to have to deal with the long term consequences of a rental car that needs repaired, and somewhere in the back of your mind, you know that. 2) If you are a homeowner, you know the amazing amount of work and care that you put into to getting your home to look nice and last as long as possible. When it’s your property, you know that its value will drop if not cared for properly, and so you go the ‘extra mile.’
Socialists, of course, advocate a society in which the government owns everything. In this ideal society, there would be no private property, which would mean that there would be complete equality. When Raul Castro took over for his brother recently, he lifted the long-standing ban on cell phones. Why did Fidel ban cell phones? Because if some people had cell phones and some did not, that would make society unequal. I hold the same line of reasoning that all people from capitalist societies hold: great idea, doesn’t seem very practical. I am a liberal, but I am not a socialist – I think private property, in most situations, is a good thing for the reasons that are underlying those two previous examples. Even the best of us just don’t treat things with the same level of care when we are not dealing with our own property.
So what about ‘socialized medicine?’ If we reject socialism, shouldn’t we also be opposed to socialized medicine, where health care and insurance is totally controlled and paid for by the government? Conservatives, it seems, make this association. After all, they may reason, if you are the one who has to pay for your broken foot, you will careful to put on work boots when you’re working with heavy machinery. But if the government pays for whatever maladies you develop, you will tend to be less careful with your own health. The government just “bails you out” of whatever situation you got yourself into. This, I think, is part of why conservatives get their pitchforks when they hear about government-sponsored health care.
But this reasoning doesn’t hold. I agree with the conservative that we should not let the government own, for example, houses. But I predict that the smoking rate, for example, will not go up if health care is free. Conservatives are afraid of a government bale out system, where people will just start lighting up and let the government pay for their lung surgery later on in life. My prediction is that something like this will not happen. Unlike a dilapidated house, which I can just walk away from and let it be the government’s problem, I cannot walk away from my body. My health is already something I care very much about (or else someone already doesn’t really care – like the chain smoker). Those of us who don’t think that socialism can be as effective as capitalism agree that people, because of their nature, need some kind of incentive to take care of something. That is true for my house, but I don’t need an extra incentive to take care of my health. This is yet another important dissimilarity between socialized medicine and anything else the government might control, and yet another reason to think more critically about how we could institute ‘socialized medicine’ in a healthy, creative way in our capitalistic society.
Socialists, of course, advocate a society in which the government owns everything. In this ideal society, there would be no private property, which would mean that there would be complete equality. When Raul Castro took over for his brother recently, he lifted the long-standing ban on cell phones. Why did Fidel ban cell phones? Because if some people had cell phones and some did not, that would make society unequal. I hold the same line of reasoning that all people from capitalist societies hold: great idea, doesn’t seem very practical. I am a liberal, but I am not a socialist – I think private property, in most situations, is a good thing for the reasons that are underlying those two previous examples. Even the best of us just don’t treat things with the same level of care when we are not dealing with our own property.
So what about ‘socialized medicine?’ If we reject socialism, shouldn’t we also be opposed to socialized medicine, where health care and insurance is totally controlled and paid for by the government? Conservatives, it seems, make this association. After all, they may reason, if you are the one who has to pay for your broken foot, you will careful to put on work boots when you’re working with heavy machinery. But if the government pays for whatever maladies you develop, you will tend to be less careful with your own health. The government just “bails you out” of whatever situation you got yourself into. This, I think, is part of why conservatives get their pitchforks when they hear about government-sponsored health care.
But this reasoning doesn’t hold. I agree with the conservative that we should not let the government own, for example, houses. But I predict that the smoking rate, for example, will not go up if health care is free. Conservatives are afraid of a government bale out system, where people will just start lighting up and let the government pay for their lung surgery later on in life. My prediction is that something like this will not happen. Unlike a dilapidated house, which I can just walk away from and let it be the government’s problem, I cannot walk away from my body. My health is already something I care very much about (or else someone already doesn’t really care – like the chain smoker). Those of us who don’t think that socialism can be as effective as capitalism agree that people, because of their nature, need some kind of incentive to take care of something. That is true for my house, but I don’t need an extra incentive to take care of my health. This is yet another important dissimilarity between socialized medicine and anything else the government might control, and yet another reason to think more critically about how we could institute ‘socialized medicine’ in a healthy, creative way in our capitalistic society.
4.21.2008
American Politics, Part VII
I want to address the hostility to “socialized medicine.” Why does the word “socialized” work people up into a frenzy? I think it is because of our deeply-held belief in the basic features of capitalism, which I would agree is the best economic system (although it must be contained by the government, as I argued a few weeks ago). Capitalism works because it throws a harness around each person’s desire to better his own economic circumstances. Here’s an example of healthy capitalism: if there were only one, state-controlled computer manufacturer, then we could expect that computers would become sub-standard rather quickly. There have to be several computer manufacturers that are in competition for my business, because the result of the competition will cheaper and more powerful computers.
Conservatives argue that medical care should work essentially in the same way. Hospitals should remain privately-controlled because in an effort to get me to come to their hospital rather than the other guy’s hospital, each hospital will do its best to control costs, provide a clean environment, and offer effective care. Health insurance companies should work in the same way: there should be many private insurance companies competing for my business, because then those companies will work to offer the better and more affordable insurance than their competitor.
Next week I want to develop more of an argument for “socialized medicine.” But for now, I will simply point to a glaring dissimilarity between the case of say, computer manufacturing, and that of medical treatment. The conservative has made the same capitalist analysis in both cases, but the cases are not the same. Let’s say I am making a decision to purchase a new computer. So I look at the selection, read some consumer reviews, and discover that the computer market is not to my satisfaction. I have other options: I can decide to refurbish my current computer, to do all my work at a computer lab or at a work computer, to share a computer with my wife or roommate, etc, etc, etc. The point is, the consumer has options, and he can decide to leave the marketplace if he does not find current market conditions to his liking for whatever reason.
This is when capitalism is great. Computer company A notices that sales of new computers are down to people in my socioeconomic demographic, and so the board members at computer company A get together and figure out how to make their computers better, faster, cheaper, prettier, etc., so that I will change my mind about buying a new computer.
The situation with health care is quite different. If I become dissatisfied my insurance company, or that the cost of a check up is too high, then I can look around for a new provider or new doctor. But I cannot reasonably be expected to opt out of the marketplace entirely in most cases. I know and you know that it does not cost $16,000 to bring a healthy baby in this world with no complications. Somebody is getting rich at my expense. Now, if this were like the computer situation, I would just decide tosuch as that of giving birth, it is just not reasonable to ask someone to forgo treatment entirely until costs come down. The insurance companies have you, because I can’t leave the marketplace. The computer manufacturers have to get you, because I can leave the marketplace, and so they have to work hard for my business.
I understand that I have not yet argued for socialized medicine. But I hope I have shown one difference between a company a hospital.
Conservatives argue that medical care should work essentially in the same way. Hospitals should remain privately-controlled because in an effort to get me to come to their hospital rather than the other guy’s hospital, each hospital will do its best to control costs, provide a clean environment, and offer effective care. Health insurance companies should work in the same way: there should be many private insurance companies competing for my business, because then those companies will work to offer the better and more affordable insurance than their competitor.
Next week I want to develop more of an argument for “socialized medicine.” But for now, I will simply point to a glaring dissimilarity between the case of say, computer manufacturing, and that of medical treatment. The conservative has made the same capitalist analysis in both cases, but the cases are not the same. Let’s say I am making a decision to purchase a new computer. So I look at the selection, read some consumer reviews, and discover that the computer market is not to my satisfaction. I have other options: I can decide to refurbish my current computer, to do all my work at a computer lab or at a work computer, to share a computer with my wife or roommate, etc, etc, etc. The point is, the consumer has options, and he can decide to leave the marketplace if he does not find current market conditions to his liking for whatever reason.
This is when capitalism is great. Computer company A notices that sales of new computers are down to people in my socioeconomic demographic, and so the board members at computer company A get together and figure out how to make their computers better, faster, cheaper, prettier, etc., so that I will change my mind about buying a new computer.
The situation with health care is quite different. If I become dissatisfied my insurance company, or that the cost of a check up is too high, then I can look around for a new provider or new doctor. But I cannot reasonably be expected to opt out of the marketplace entirely in most cases. I know and you know that it does not cost $16,000 to bring a healthy baby in this world with no complications. Somebody is getting rich at my expense. Now, if this were like the computer situation, I would just decide tosuch as that of giving birth, it is just not reasonable to ask someone to forgo treatment entirely until costs come down. The insurance companies have you, because I can’t leave the marketplace. The computer manufacturers have to get you, because I can leave the marketplace, and so they have to work hard for my business.
I understand that I have not yet argued for socialized medicine. But I hope I have shown one difference between a company a hospital.
3.17.2008
American Politics, Part III
Last week I argued that we need a government that is willing to step in and regulate the market for the sake of economic equality. Of course most Republicans are willing to accept the idea of occasional government intervention in draconian cases, but their usual mantra is “Stay outta the marketplace!” I think this attitude is unacceptable, at least if you believe as I do that the main standard by which all societies will be judged is by how they protected the vulnerable. Those who are great capitalists are typically not bad people – they are simply being as selfish as possible because that is exactly what capitalism requires of them – capitalism is only successful if the business world is populated with people who are greedy! If all capitalists decided to practice the virtue of contentedness starting on Monday, then we would have the Great Depression Part II by Friday. But that is exactly why we must have a government that is willing to tell those successful and greedy capitalists, “This far ye shall come and no farther.”
Also, last week I promised to analyze another big reason why we need a government willing to legislate the marketplace: the protection of the environment. Capitalism by itself offers absolutely no incentive to maintain environmental standards. In fact, the situation is quite the opposite. The capitalist marketplace demands that the producers produce as much material for the lowest cost possible. And, since it costs a lot of money to dispose of waste properly, to forest responsibly, to harvest and plant in a way that will nourish the soil, etc., etc., these things are actually discouraged by the capitalist marketplace. Since the motivation to protect the environment does not come from the market itself, it must come from government regulations.
I have heard conservatives say of Al Gore that business would never survive his presidency, if he were to become President. I hope that this is not true. But I happen to know that it is true that if we continue to use our natural resources irresponsibly, then things will go badly for all of us and all of our decedents. Take the example of American automakers: they really hate it whenever the government increases the minimum fuel efficiency rating. Let the market decide, they say – let the people decide what they want to buy, and we will supply their demand. The problem is that it is quite rare that an individual will do what is in their own financial worst-interest in order to “help” with something as abstract as the environment. For example, if Company A and Company B produce the same product, but Company A’s version costs more because they spent a lot of money on proper disposal, then the usual person will buy the product from Company B. And if someone comes running up to them and says, “Don’t buy that! Company B disposes of their waste improperly,” the common person will just point out that Company B’s product costs less. The way to solve this problem is to actually make it illegal for Company B to dispose of their waste improperly, rather than to hope that Company B’s board of directors becomes populated by tree-huggers.
There are many situations in which the government must interfere for the sake of protecting the environment, because people will always do exactly what capitalism tells them to do: buy the product as cheaply as you can! The burden of making companies change their environmental policies is not the responsibility of the consumer, but of the government. In Bush’s first week, he repealed an astounding number of environmental regulations that were established by the Clinton administration, all in the name of “freeing the marketplace.” We need a government that, while sensible about protecting big business where they can (because we all need big business, even though we may not like to admit it), has the will and the courage to regulate the market by making certain practices illegal.
Also, last week I promised to analyze another big reason why we need a government willing to legislate the marketplace: the protection of the environment. Capitalism by itself offers absolutely no incentive to maintain environmental standards. In fact, the situation is quite the opposite. The capitalist marketplace demands that the producers produce as much material for the lowest cost possible. And, since it costs a lot of money to dispose of waste properly, to forest responsibly, to harvest and plant in a way that will nourish the soil, etc., etc., these things are actually discouraged by the capitalist marketplace. Since the motivation to protect the environment does not come from the market itself, it must come from government regulations.
I have heard conservatives say of Al Gore that business would never survive his presidency, if he were to become President. I hope that this is not true. But I happen to know that it is true that if we continue to use our natural resources irresponsibly, then things will go badly for all of us and all of our decedents. Take the example of American automakers: they really hate it whenever the government increases the minimum fuel efficiency rating. Let the market decide, they say – let the people decide what they want to buy, and we will supply their demand. The problem is that it is quite rare that an individual will do what is in their own financial worst-interest in order to “help” with something as abstract as the environment. For example, if Company A and Company B produce the same product, but Company A’s version costs more because they spent a lot of money on proper disposal, then the usual person will buy the product from Company B. And if someone comes running up to them and says, “Don’t buy that! Company B disposes of their waste improperly,” the common person will just point out that Company B’s product costs less. The way to solve this problem is to actually make it illegal for Company B to dispose of their waste improperly, rather than to hope that Company B’s board of directors becomes populated by tree-huggers.
There are many situations in which the government must interfere for the sake of protecting the environment, because people will always do exactly what capitalism tells them to do: buy the product as cheaply as you can! The burden of making companies change their environmental policies is not the responsibility of the consumer, but of the government. In Bush’s first week, he repealed an astounding number of environmental regulations that were established by the Clinton administration, all in the name of “freeing the marketplace.” We need a government that, while sensible about protecting big business where they can (because we all need big business, even though we may not like to admit it), has the will and the courage to regulate the market by making certain practices illegal.
3.10.2008
American Politics, Part II
Out society is not primarily controlled by the government. Rather, our society marches to the beat of the drum of the capitalistic marketplace. I do not wish to say that this is good or bad, for there are many positive and negative features of capitalism. I just want to say that this is our reality, so instead of thinking of America as controlled by the government, it would be more accurate to think of America as being directed by business, and merely managed by the government.
By analogy, the market could be thought of as a fire. Fires are nearly miraculous in that they provide a natural source of heat and light. If you have trouble imagining how central this is to life, imagine how terrible a frontier lifestyle would be without a fire. But like most good things, a fire can quickly turn disastrous and deadly if it leaps out of its intended boundaries. Likewise, the market can provide untold good and prosperity, and in an instant can lift a family out of generational poverty. But it can also be quite disastrous, as a fire that jumps over its boundaries. So the analogical conclusion is that just as we need the fire controlled, so also we need tight reigns on the economy. There are two primary ways that the marketplace can cause mischief, although I will only address one this week.
First, the market itself provides no incentive whatsoever to help a person who is not yourself or not in your immediate family. The market, rather, by its very essence, actually encourages every person to look out only for her own interests. “Its just business,” they tell you after they announce a company restructure. There is no basis to complain about or criticize any single businessperson who triumphs over someone else over on the way to more money, provided he does it within the bounds of the law. Indeed, this is what is required of a successful capitalist society. I, for example, will enter the meager philosophy professor job market in a couple of years. My hope is that I will be better, more intelligent, etc., than the other PhD students entering the marketplace, and that I will get the job instead of them. Correspondingly, the institution will only higher the best candidate and turn the others away. That is not positive or negative, but merely a description of how a capitalistic society improves itself.
Given the harsh realities of competition within capitalism, it is quite easy to see how our society can quickly become a society of “haves” and “have-nots.” But no single person is to blame – every “have” is simply doing his job. Capitalism, then, unchecked, can bring absolutely wicked outcomes, from the perspective of the Christian. James nails down the whole point of religion in general: “to look after orphans and widows in their distress…” (James 1:27). If this is true, then we should be worries about creating as society of “haves” and “have-nots,” which means that we need a government that is willing to step in and disrupt the marketplace when the marketplace in creating too much inequality. The Republicans despise this kind of thinking as “big government” – capitalism needs to be free to play itself out. If the market operates without interference, they claim, then it will continue to grow. And after all, they add, “A rising tides raises all ships.”
But I have a question for my Republican friends: What if you are wrong about how the economy works? Even the top economists in the world have vast difference in the way they conceive of successful capitalism. I must confess, I have NO idea how the economy works, but even the most well-equipped economists have only possible theories. But if we are going to make an error, as we may be by interfering in the marketplace, we should be concerned to err on the side of making an economically equal society. If those republican economists are wrong, and the “trickle-down” economic system is not the right model for the economy, then we will hamper economic growth AND exacerbate economic inequality. So if I am right that no one really knows how the economy works, and we are concerned about creating a equal society (making sure the orphans and widows are economically secure, even though they are not economically viable), then we should favor a style of government which is willing to step in if conditions are becoming unequal. There is the possibility, I am willing to concede, that the Republican economic policies are better for everyone; after all, I nor anyone else who doesn’t have a Nobel Prize in economics really has any idea. But I do know, as a Christian, that it is not acceptable to have the kind of society that doesn’t do anything about the plight of the vulnerable. But the Republican says, again, “Yes, but a rising tide raises all ships,” which is true. But just in case the “trickle-down” system doesn’t work, I would rather lose the whole world while pursuing justice. I don’t think that losing the whole world for the right reasons would be such a bad thing.
By analogy, the market could be thought of as a fire. Fires are nearly miraculous in that they provide a natural source of heat and light. If you have trouble imagining how central this is to life, imagine how terrible a frontier lifestyle would be without a fire. But like most good things, a fire can quickly turn disastrous and deadly if it leaps out of its intended boundaries. Likewise, the market can provide untold good and prosperity, and in an instant can lift a family out of generational poverty. But it can also be quite disastrous, as a fire that jumps over its boundaries. So the analogical conclusion is that just as we need the fire controlled, so also we need tight reigns on the economy. There are two primary ways that the marketplace can cause mischief, although I will only address one this week.
First, the market itself provides no incentive whatsoever to help a person who is not yourself or not in your immediate family. The market, rather, by its very essence, actually encourages every person to look out only for her own interests. “Its just business,” they tell you after they announce a company restructure. There is no basis to complain about or criticize any single businessperson who triumphs over someone else over on the way to more money, provided he does it within the bounds of the law. Indeed, this is what is required of a successful capitalist society. I, for example, will enter the meager philosophy professor job market in a couple of years. My hope is that I will be better, more intelligent, etc., than the other PhD students entering the marketplace, and that I will get the job instead of them. Correspondingly, the institution will only higher the best candidate and turn the others away. That is not positive or negative, but merely a description of how a capitalistic society improves itself.
Given the harsh realities of competition within capitalism, it is quite easy to see how our society can quickly become a society of “haves” and “have-nots.” But no single person is to blame – every “have” is simply doing his job. Capitalism, then, unchecked, can bring absolutely wicked outcomes, from the perspective of the Christian. James nails down the whole point of religion in general: “to look after orphans and widows in their distress…” (James 1:27). If this is true, then we should be worries about creating as society of “haves” and “have-nots,” which means that we need a government that is willing to step in and disrupt the marketplace when the marketplace in creating too much inequality. The Republicans despise this kind of thinking as “big government” – capitalism needs to be free to play itself out. If the market operates without interference, they claim, then it will continue to grow. And after all, they add, “A rising tides raises all ships.”
But I have a question for my Republican friends: What if you are wrong about how the economy works? Even the top economists in the world have vast difference in the way they conceive of successful capitalism. I must confess, I have NO idea how the economy works, but even the most well-equipped economists have only possible theories. But if we are going to make an error, as we may be by interfering in the marketplace, we should be concerned to err on the side of making an economically equal society. If those republican economists are wrong, and the “trickle-down” economic system is not the right model for the economy, then we will hamper economic growth AND exacerbate economic inequality. So if I am right that no one really knows how the economy works, and we are concerned about creating a equal society (making sure the orphans and widows are economically secure, even though they are not economically viable), then we should favor a style of government which is willing to step in if conditions are becoming unequal. There is the possibility, I am willing to concede, that the Republican economic policies are better for everyone; after all, I nor anyone else who doesn’t have a Nobel Prize in economics really has any idea. But I do know, as a Christian, that it is not acceptable to have the kind of society that doesn’t do anything about the plight of the vulnerable. But the Republican says, again, “Yes, but a rising tide raises all ships,” which is true. But just in case the “trickle-down” system doesn’t work, I would rather lose the whole world while pursuing justice. I don’t think that losing the whole world for the right reasons would be such a bad thing.
2.28.2008
American Politics, Part I
[Note: This blog appeared last year. It was meant to be the first of several political blogs, but I stopped blogging altogether after the first one. I would like to follow through now, however, and on Sunday/Monday, I will post the part II in this series.]
Is there any philosophical difference between Republicans and Democrats? Sometimes, the positions these two sides take on various issues seem pretty arbitrary. There just doesn’t seem to be any consistent pattern underlying each political party, and so it becomes – well, politics. However, I believe that there are consistent philosophies to be discovered on each side, and I want to lay bare those differences, and also argue the liberal position on several of the specific issues.
A Liberal society (in the sense of Liberal v. Communist, Islamist, etc., not the small “l” liberal v. conservative) has three distinguishing values that make it different from all other societies: the value of private property, the value of equality, and the value of individual freedom (especially the freedom to make a choice in the form of voting). When it comes to individual freedom, both parties succeed and fail in various ways, and so it is difficult to develop a systematic understanding of the differences in this area. However, the conservative and liberal ideologies begin to contrast in terms of the first two values.
These differences first arise when private property and equality come into conflict. The conflict is actually fairly common because, as John Locke observed, money is the most common form of private property. And hence we get conservative Republicans always pushing tax cuts (because that means more private property), and the liberal Democrats working to repeal tax cuts on the wealthy (because that allows the government to afford various programs for the lower and middles classes, and so enhances the value of equality). So the conservative mantra is “Equality is important, but what really makes a Liberal society great is private property”, while the liberal motto is just the opposite: “Private property is important, but what really makes a Liberal society great is equality”. Sometimes this difference is expressed in terms of the size of government, where the conservatives promote more private property as so favor “small government”, and the liberals favor the government having a larger role to play is making society equal, and so is the party of “big government”. In the coming weeks, I wish to explain and argue for the various liberal positions on particular issues in contemporary American politics.
Is there any philosophical difference between Republicans and Democrats? Sometimes, the positions these two sides take on various issues seem pretty arbitrary. There just doesn’t seem to be any consistent pattern underlying each political party, and so it becomes – well, politics. However, I believe that there are consistent philosophies to be discovered on each side, and I want to lay bare those differences, and also argue the liberal position on several of the specific issues.
A Liberal society (in the sense of Liberal v. Communist, Islamist, etc., not the small “l” liberal v. conservative) has three distinguishing values that make it different from all other societies: the value of private property, the value of equality, and the value of individual freedom (especially the freedom to make a choice in the form of voting). When it comes to individual freedom, both parties succeed and fail in various ways, and so it is difficult to develop a systematic understanding of the differences in this area. However, the conservative and liberal ideologies begin to contrast in terms of the first two values.
These differences first arise when private property and equality come into conflict. The conflict is actually fairly common because, as John Locke observed, money is the most common form of private property. And hence we get conservative Republicans always pushing tax cuts (because that means more private property), and the liberal Democrats working to repeal tax cuts on the wealthy (because that allows the government to afford various programs for the lower and middles classes, and so enhances the value of equality). So the conservative mantra is “Equality is important, but what really makes a Liberal society great is private property”, while the liberal motto is just the opposite: “Private property is important, but what really makes a Liberal society great is equality”. Sometimes this difference is expressed in terms of the size of government, where the conservatives promote more private property as so favor “small government”, and the liberals favor the government having a larger role to play is making society equal, and so is the party of “big government”. In the coming weeks, I wish to explain and argue for the various liberal positions on particular issues in contemporary American politics.
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