Matt Yglesias and I certainly do read history differently. He writes recently in a Salon article:
The basic economic foundations of industrial capitalism as we've known them for the past 150 years or so have an activist state at their core. Building political institutions capable of doing these things properly is really difficult, and one of the main things that separates more prosperous places from less prosperous ones is that the more prosperous places have done a better job of building said institutions. There's also the minor matter of creating effective and non-corrupt law enforcement and judicial agencies that can protect people's property rights and enforce contracts.
The point is, it takes an awful lot of politics to get an advanced capitalist economy up and running and generating wealth. A lot of active political decisions need to be made to grow that pie. So why would you want to do all that? Presumably because pie is delicious. But if you build a bunch of political institutions with the intention of creating large quantities of pie, it's obviously important that people actually get their hands on some pie. In other words, you go through the trouble of creating advanced industrial capitalism because that's a good way to create a lot of goods and services. But the creation of goods and services would be pointless unless it served the larger cause of human welfare. Collecting taxes and giving stuff to people is every bit as much a part of advancing that cause as creating the set of institutions that allows for the wealth-creation in the first place.
This is counter-historical crap. Unfortunately, my real job is taking all my time today so I can only give a few quick responses rather than the thorough beating this deserves
- Capitalism is not a "system." It is an un-system. It is an order that emerges from individuals exchanging goods and services to their mutual self-interest. While it requires a rule of law, those rules can be exceedingly simple -- at their core they are "don't deal with other people via force or fraud." Sure, case law can be complex - what happens to a land deed that has one boundary on a river when the river moves. But I don't think this is what Matt is thinking of.
- Yglesias is following the typical socialist-progressive line that our modern wealth creating capitalist economy was somehow created by the government. I am sure this line works with the low information voter, but that does not make it any more true. Industrial capitalism arose long before the government even acknowledged its existence. The US economy was generating wealth - for everyone, rich and poor - long before politicians stuck an oar into the economic waters. Go back even 85 years and you will not see anything in the "political economy" that would be recognizable to a modern progressive. In other words, the wealth creation came first, and then the politics came second.
- Again we see this bizarre progressive notion that wealth creation is this thing apart, like a water well in the desert. Income distribution in this model is a matter of keeping the piggy rich people from hogging all the water. But in a free society, the economy and its gains are not separate from people, they are integral to the people. Gains are not somehow independent variables, but are the results of individual gains by each person in the system. People operate by mutual self-interest. When I work for you, I get a paycheck, you get your products made -- we both gain. Steve Jobs grew wealthy selling iPads, but simultaneously my iPad made me vastly better off.
- It is wrong to say that all distributions of wealth are arbitrary. In a free society, there emerges a natural distribution of wealth based on people's exchange with each other. And contrary to the progressive mythology, that system was floating all boats, not just the rich ones, long before the government gained the power to redistribute wealth. Yglesias is right in saying that income distribution in a progressive political economy is arbitrary. In fact, income in any government-managed economy is distributed arbitrarily to whoever can gain power. I am always amazed at progressives who somehow have this vision that there will be some group of people with absolute power who wukk make sure there will be a flat and equitable income distribution. When has that ever happened? Name even a single socialist country where that has happened.
- What political decision has ever been made the grows the pie, except perhaps to keep the government's hands off pie creation? When "political" decisions are made to grow the pie, what you actually get is bailouts of Goldman Sachs, wealth funneled to connected billionaires like Elon Musk, and Solyndra. Politics don't create wealth, they are a boat anchor lashed to the wealth creators. The only thing politicians can do productively is make the boat anchor lighter.
The best time to argue for general principles is when they work against one's own interest, to firmly establish that they are indeed principles rather than political opportunism. Two examples:
First, from a topic rife with political opportunism,
the Supreme Court a three-judge panel recently ruled Obama's NLRB not-really-recess appointments were unconstitutional. I think that was the right decision, but a President has got to be able to get an up or down vote in a timely manner on appointments. As much as I would love to see all of Obama's appointments languish for, oh, four years or so, and as much as I really don't like his activist NLRB, having to resort to procedural hacks of this sort just to fill administrative positions is not good government. The Senate rules (or traditions as the case may be) that even one Senator may put a hold on confirmations is simply insane. While I am a supporter of the filibuster, I think the filibuster should not apply to certain Constitutionally mandated activities. Specifically: passing a budget and appointment confirmations.
Second, readers of this blog know how much I dislike our sheriff Joe Arpaio. He was unfortunately re-elected a couple of months ago, though the vote was closer than usual. This week, an Arizona group who also does not like Joe has announced it is going to seek a recall election against him. Again, as much as I would like to see Arpaio ride off into the sunset, this practice of gearing up for recall elections just days after the election is over is just insane. It is a total waste of money and resources. While I don't like to do anything that helps incumbents, there has to be some sort of waiting period (perhaps 1/4 of the office term) before we start this silliness.
Today's entry: "shareholder rights plan." Example usage:
Less than a week after activist investor Carl Icahn announced a 10 percent stake in Netflix, the online video company is moving to protect itself against hostile takeovers.
The Los Gatos, Calif., company said Monday that it has adopted a shareholder rights plan.
Icahn disclosed his stake in Netflix Wednesday.
Under the plan, rights are exercisable if a person or group acquires 10 percent of Netflix, or 20 percent in the case of institutional investors, in a deal not approved by the board.
This is basically a poison pill that can be triggered by the Board that can dilute the value of a hostile investor's share of the company. What it does is force investors to negotiate with management for takeover of the company, rather than directly with shareholders. As such, it is actually a "management rights plan" as it empowers management at the expense of shareholders (as evidence of this, in a rising market today Netflix stock fell on this news -- shareholders know that such moves have nothing to do with their well-being). Managements use it either to protect their jobs (by disallowing hostile takeovers their shareholders would otherwise support) or at least to get a nice payoff on the way out the door as the price for agreeing to the deal.
A lot of folks have asked me if I am going to comment on this
One of the fathers of Germany’s modern green movement, Professor Dr. Fritz Vahrenholt, a social democrat and green activist, decided to author a climate science skeptical book together with geologist/paleontologist Dr. Sebastian Lüning. Vahrenholt’s skepticism started when he was asked to review an IPCC report on renewable energy. He found hundreds of errors. When he pointed them out, IPCC officials simply brushed them aside. Stunned, he asked himself, “Is this the way they approached the climate assessment reports?”
I have not seen the book nor the Der Spiegel feature, but I can say that, contrary to the various memes running around, many science-based skeptics became such by exactly this process -- looking at the so-called settled science and realizing a lot of it was really garbage. Not because we were paid off in oil money or mesmerized by Rush Limbaugh, but because the actual detail behind many of the IPCC conclusions is really a joke.
For tomorrow, I am working on an article I have been trying to write literally for years. One of the confusing parts of the climate debate is that there are really portions of the science that are pretty solid. When skeptics point to other parts of the science that is not well-done, defenders tend to run back to the solid parts and point to those. That is why Michael Mann frequently answers his critics by saying that skeptics are dumb because they don't accept greenhouse gas theory, but most skeptics do indeed accept greenhouse gas theory, what they don't accept is the separate theory that the climate is dominated by positive feedbacks that amplify small warming from CO2 into a catastrophe.
This is an enormous source of confusion in the debate, facilitated by a scientifically illiterate press and alarmists who explicitly attempt to make this bate and switch so they can avoid arguing the tough points. Even the author linked above is confused on this
Skeptic readers should not think that the book will fortify their existing skepticism of CO2 causing warming. The authors agree it does. but have major qualms about the assumed positive CO2-related feed-backs and believe the sun plays a far greater role in the whole scheme of things.
This is in fact exactly the same position that most skeptics, at least the science-based non-talkshow-host ones have. Look for my Forbes piece tomorrow.
A couple of years ago I wrote:
Activist: A person who believes so strongly that a problem needs to be remedied that she dedicates substantial time to "¦ getting other people to fix the problem. It used to be that activists sought voluntary help for their pet problem, and thus retained some semblance of honor. However, our self-styled elite became frustrated at some point in the past that despite their Ivy League masters degrees in sociology, other people did not seem to respect their ideas nor were they particularly interested in the activist's pet issues. So activists sought out the double shortcut of spending their time not solving the problem themselves, and not convincing other people to help, but convincing the government it should compel others to fix the supposed problem. This fascism of good intentions usually consists of government taking money from the populace to throw at the activist's issue, but can also take the form of government-compelled labor and/or government limitations on choice.
So now, we have the next step -- advocating that others spend their time convincing government to use compulsion to solve some imagined problem. Kevin Drum urges:
The only real way to address climate change is to make broad changes to laws and incentives. It puts everyone on a level playing field, it gives everyone a framework for making their own choices, and it gives us a fighting chance of making the deep cuts we need to. So listen to Tidwell: "Don't spend an hour changing your light bulbs. Don't take a day to caulk your windows. Instead, pick up a phone, open a laptop, or travel to a U.S. Senate office near you and turn the tables: 'What are the 10 green statutes you're working on to save the planet, Senator?'"
Jackboots seem to be "in" this season.
Postscript: In the language of mathematics (I mentioned before I am in the middle of Goedel-Escher-Bach) if actually aiding someone is "helping," then I guess organizing people to help is meta helping, and lobbying government to force other people to help is meta meta helping and so advocating on your blog that people should lobby the government to force other people to help is meta meta meta helping. Must really warm Drum's heart to be so directly connected with helping people.