Why the left should argue for a small state


by Chris Dillow    
7:36 pm - April 17th 2009

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David Semple thinks the left should join American tea parties, which protest against high taxes. I think I agree. The desire to shrink the state should be a leftist aim. I say so for four reasons.

1. Big government cannot be redistributive government. If the state is raising 40% of GDP in taxes, it must tax the worst off, simply because the rich, even in the UK and US, aren’t that rich or plentiful.

This pdf gives us the numbers. Table 2 shows that the tax system – leaving aside benefits – actually adds to inequality. This is because direct taxes cut the Gini coefficient by 4 percentage points, but indirect taxes add 5 points to it. And table 21 shows that the poorest fifth of households with children pay a higher proportion of their income in taxes than the richest 10%: 37.2% against 33%.

2. A big state hurts the worst off. Right-wing nut jobs might pose as victims of “ZaNuLabour.”  But whether we look at Purnell’s welfare plans, repressive anti-immigration laws or the policing of protests, it is ordinary people who are the real victims of an overly powerful state: newspaper sellers, poor foreigners, the unemployed and ill.  The left should be on their side.

3. When the state has lots of power, there’ll be a big fight to control it. And it’s the rich and powerful that win such fights. Why do you think banks get big bail-outs whilst ordinary workers are flung onto the dole with little compensation?

4. Belief in big government rests upon the notion that there’s an elite of leaders which has the wisdom and know-how to manage our affairs from the top-down; this is why New Labour found common cause with corporate bosses – both share the same ideology. But it is an utterly anti-egalitarian notion. It is also utterly wrong.

* * * * *

The Digger sends LC an email announcing the launch of his new blog – libertarian-left:

We reject the slavish devotion to capitalism, corporate greed, the support of the modern opiate of consumerism and the maintenance of the modern empire of the global free market. We also reject that the only alternative to this is an equally oppressive statist culture that denies the essential liberty of the individual, of families and of communities.

We embrace the principles of liberty, common ownership, the right of every person to hold their means of production and keeping everything (education, housing, health, politics) at the most local level possible.

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About the author
Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
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Story Filed Under: Blog ,Civil liberties ,Economy ,Equality

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Reader comments


1. councilhousetory

Chris

The idea of a citizen income has even made it onto housepricecrash:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=111637

A revealing thread, as through 11 pages, I believe only 3 posters are completely against. Most of the informed posters on hpc work in the city or related fields as far as I can tell.

2. The Admiral

This is a transparent and wholly unconvincing attempt to run with the hare and hunt with the hounds. Being on the Left and being Libertarian are by definition incompatible. I actually find this encouraging. It is strong evidence that a) the Left know the game is up, b) are frantically trying to piggy-back the public mood and rejection of their big-state low-freedom failed policies and c) that the principles behind true Libertarianism (rather than the travesty of a description normally used by its opponents) is going to be the dominant political creed for the forseeable future. The old saying that it is always darkest just before dawn is, in this case, true.

You won’t be welcome but well done for belatedly seeing the light.

For me, number three is perhaps the most important point (though I agree with all). I’ve been an environmentalist for a long time and have always been suspicious of state power and how it’s used to protect powerful vested interests.

The G20 protests only illustrated that too well.

The difference between us and the libertarian nutjobs that inhabit the web is two-fold I think:

1) They’re much more likely to excuse instruments of state power (police, libel law) because they believe these instruments are necessary to protect property rights. Whereas my view is that the law around property rights is gamed to protect rich vested interests.

2) Most libertarians claims to be following libertarianism but they don’t actually. Among the loudest idiot libertarians on the British web (Devils Kitchen, MrPikeBishop) are for the free movement of capital but bizarrely not people. But they do have long list of excuses for their ‘pragmatic’ reasoning.

Great piece. Left libertarians have been given a pretty harsh ride by the left so far. It would be nice to think that could change, but I fear you’re on to a loser here, Chris.

Having said that, this Admiral character certainly seems to be panicking, so maybe I’m being too pessimistic.

5. Shatterface

Liberty, common ownership and decision making at local level are principles advocated by anarchism, but that term is largely associated with knob-heads smashing windows so I generally describe myself as ‘Libertarian Left’ or ‘Libertarian Socialist’ in polite company.

6. Shatterface

Sunny (3): I’d add that the Libertarian Right generally – but not always – support copyright as well as libel.

7. Sunder Katwala

Can we explore the evidence a bit more please? It seems especially necessary to have a comparative lens to make claims of this kind.

1. “Big government can not be redistributive government”.

Can’t it? Is the Swedish tax and spending larger or smaller than the UK? Larger. Is it more or less redistributive? More redistributive.

It is possible to have relatively low levels of inequality with both larger (Sweden) and smaller (Japan) states, but higher inequality is more common in some small state countries (strikingly, the US). This is not a necessary relationship, but the claim that the alternative is seems unfonded.

Here is a graph of size of state/inequality. The book is quite old (1992) and somebody might supply a more recent version, though therelative positions of nations remain stable-ish. But the claim is a generic one, and it is simply relevant here to say that it ain’t necessarily so, and the opposite hypothesis has somewhat more going for it.

http://books.google.co.uk/books?id=DoQoOQ2K9rkC&pg=PA85&lpg=PA85&dq=inequality+size+of+state&source=bl&ots=T2x-Ju5SS1&sig=xFcFjXZKKDuva7V9qJawKAZcbc8&hl=en&ei=jNToSdO-L9yRjAfbroX3Aw&sa=X&oi=book_result&ct=result&resnum=4

So there seems to be an argument here that we must necessarily conflate two different political choices
(a) size: what is the scale and size of taxation and public spending.
(b) distribution: how the cost is borne across society.

For example, it is not true that the Thatcher governments significantly reduced the size of the state. It is true that they had a significant politics of redistribution – with the 1988 budget being a spectacular example, particularly from direct to indirect taxes, and from higher earners (the very top and the top 40% more generally) to lower and median earners.

The second point made discusses the distributional impact of UK taxation: I would agree with the proposititon that it is too flat, and regressive. It does not, however, make much sense to do so without reference to the distributional impact of spending, which is progressive, and has become more so. (It could be made more progressive still, and I would support that in some cases, but not in all cases, because the issue of universalism and targetting is important to sustain public consent for public services, welfare provision and social security).

2. Another conflation: generosity of welfare provision and conditional/punitive nature.

But a strange one. The UK system was more punitive when it was more miserly, under the Poor Law system of relief. UK benefit levels remain comparatively low in a European context, as does the state, so it does not seem to be the scale of the state or welfare

The point can be put a different way: the more generous welfare states (Dutch, Danish) are more active. They have more conditionality, but it can be of a less punitive and a more supportive kind.

3. But what if there is popular pressure to increase the size of the state, which is successful. Take for example the Beveridge Report and the 1945 General election, as a reaction to the 1930s. One challenge to the power of wealth and income can be the collective choices of democracy. Another example

4, Is there another conflation here?
- the size and scale of state activity
- its transparency and accountability; and/or its participatory nature; its centralisation or localisation.

One can have a larger state which scores very highly on civil liberty questions, such as open and transparent government, and a smaller one which is worse.

The kernel of this point which may be valid: it may be increasingly necessary to have greater transparency, accountability and participation to sustain consent for large-scale state activity. But the abolition of state educatonal provision would not increase democratic accountability. Nor would the abolition of a public postal service or indeed a public police service. But there may be important questions about the accountability of, say, a policing service, as well as about its size,

Over in America Left-libertarians have been arguing for the abolition of corporate welfare and various forms of government measures that support big business. An excellent book analysing the effects of government intervention and how it creates some of the worst features of currently-existing capitalism can be found here:

http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html

Chatper 3 is especially illuminating, highlighting the various forms of government intervention that benefit the wealthy.

In fairness right-libertarians also argue for the abolition of these things but put less emphasis on how the poor would benefit. They also think the outcome would be something like Tesco minus the state whereas the left-libertarians believe it would create a more equal and decentralised economy.

“Sunny (3): I’d add that the Libertarian Right generally – but not always – support copyright as well as libel.”

The most “right-wing” libertarians at the von Mises institute in America appear to be very much against, they’ve recently been bigging up this anti-IP book: http://mises.org/story/3298

They are also very much against libel and slander laws.

Just so we are all using the same terms: what’s the best definition of inequality?

‘the tax system – leaving aside benefits’

Spot the key phrase here?

Whatever the secondary effects of one particular pattern of tax laws, the primary effect of taxation is that money gets taken, then gets spent.

If you have to discount the spending side ( universal free education, pensions, the NHS, child benefit, parks, public transport and everything else) before you can get the numbers to be close, the point you are trying to argue is really not merely slightly wrong.

You can see this pretty clearly if you follow the link supplied. On graph 6, the effect talked about moves, for this year only, the second line a pixel or two above the third. The real bottom line figures are the first and fourth, which are consistently separated by three or four inches.

As the report itself says:

‘Government intervention, through taxes and benefits, alters the incomes of households. In general, households in the upper part of the income distribution pay more in taxes than they receive in benefits, while the reverse is true for those in the lower part of the distribution. Taxes and benefits therefore reduce income inequality’

Ignoring the stuff which matters to try and make a big-picture, first principle argument about government size from a secondary and temporary issue puts this pretty much in the set of arguments:

‘leaving aside emissions, building big coal-fired power plants is the best way of tackling global warming’

‘leaving aside the casualties, joining WWI was a damn good idea’

‘leaving aside that unfortunate incident, surely you’d agree that was an excellent play, Mrs Lincoln’?

The tendency for the tax system to hurt the worst off, reflect, in part the decision of New Labour to use tax as a means of interfering with people’s lifestyles rather than as a tool for redistribution. THe poorest 20 per cent of hoseholds spend 3.4 per cent of their income on the tobacco tax.

13. Chris Baldwin

Large or small, as long as the state is socialist I don’t care.

I’m a libertarian (who would probably be called a right libertarian by the people on here, although I certainly don’t personally identify with the right), and I have to say, I found this article pretty encouraging. Assuming the benefit of the doubt, and that this isn’t a “Oh shit, the Left have a very good chance of losing power and being out in the political wilderness for a while” moment (like how the Republicans suddenly found a renewed interest in checks and balances on executive power after Obama won), I can only be heartened by the growing influence of a genuinely libertarian group on the left.

I just wanted to say that I also think a lot of the ‘evil libertarian’ caricatures on here are misguided. There’s way too much stereotyping going on. For instance, regarding libel and intellectual property laws: despite what Sunny and Shatterface say, the vast majority of libertarians I have ever met, including the ones from the pretty hardcore Mises Institute, have been against both – I know I certainly am. As for police brutality, it’s nonsense to say that libertarians don’t speak out against it – if anyone has done more to expose and criticize the militarization of the police and the unjust drug laws in the US than Radley Balko (look him up), I’d like to know about it. On corporate welfare – I’m not sure I could be against anything more. What’s really ironic is that I frequently point out all the things in the OP whenever I’m in an argument with a big-state leftist, but, apparently, because I’m a fan of free markets and private property, I must hate the poor.

Of course I can’t get this far without saying what I think is wrong with left-libertarianism, so I’m just going to go right ahead. I don’t particularly care about inequality per se – inequality as a result of injustice is another matter, though – and I think there’s something a bit odd going on when so-called libertarians do react negatively to its very existence. Libertarianism is an ideology about legitimate means towards varied ends, rather than the ends themselves, and if inequality arises without violating anyone’s rights I fail to see what the problem is. I also don’t share the obsession with collective property and workers’ co-operatives. I certainly have nothing against either of these things (as long as they’re not imposed upon anybody) and I wish collectively run endeavours all the best, but I think there are good reasons why more traditionally organised firms would dominate most free markets. But if I’m wrong and most people prefer to deal with co-ops, it wouldn’t bother me in the slightest.

What an excellent debate to get going. I’m sure plenty of bile will be spilled on this. Personally, I believe in a biggish state because free markets won’t fund public services and provide things for the people under the demand curve.
Yes, there are problems with left-ist statism, but by and large it’s the only one for me. I’m a liberal socialist because i believe in social minority rights.
Just very impressed with the whole debate

I’d generally agree that the state is a frankly lousy tool for left-wingers to use, but what else is there? Given that you’re talking about doing things (redistribution, common ownership of the means of production) that are going to really piss off some pretty powerful, well resourced groups of people what have you got to go up against them?

If you’ve got a better idea than the state, that’s awesome but it does need to be a bit more than clicking your heels together three times and repeating “There’s no place like an anarcho-syndicalist utopia”

As someone who was brought up in a leftwing household and began political thinking on the left, I would gladly return to that side of the field if this sort of thinking became more widespread. Great post.

18. Sunder Katwala

Over on Crooked Timber, Lane Kenworthy has contributed an excellent series this week on inequality, particularly in the US but with some good comparative analysis

The graph in this latest piece captures clearly
- the relatively flat distributional impact of taxation
- the more progressive distributional impact of spending
- how progressive tax and spending is varies (It is not simply a function of the scale of the state).
http://crookedtimber.org/2009/04/18/reducing-inequality-how-to-pay-for-it/

Chris Baldwin @18, that’s very interesting, could you elaborate? What would a small socialist state look like?

Sorry *@13

Respectfully, I think that Sunder and others may be missing the point slightly. I think that what Chris is saying is this:

Up to a point, reductions in tax revenue can be inequality-reducing if the reductions are targeted at the poorest. One such measure would be an increase in the personal allowance which, although all income tax payers would benefit, the benefit would be proportionally greater to those in some of the lowest income brackets (though it’s not perfect as it doesn’t address those who earn at or less the present level of the allowance). In the grand scheme of things, the benefit to the individuals concerned from the extra money in their pocket would be greater than the cost of the cancellation of the least effective part of government spending (we might posit the ID card scheme here, but there are plenty more).

Sunder’s point at 18, referencing Lane Kenworthy’s post on CT is that the inequality-reducing effects of tax and spending comes from the spending part, not the taxing part. That doesn’t disagree with the original post, since the original post is calling for a more progressive tax system. Secondly, I think there’s still a debate to be had about the nature of the spending. Spending can reduce inequality either by providing people with services that they definitely want, or by transferring money directly to them (in benefits or in a basic income/negative income tax). Spending on irrelevances does not reduce inequality because it cannot be reasonably said that you are boosting the income of a person by providing them with something that they would never have spent their own money on if they had it. Let’s say healthcare would cost me £5,000 per year. Free state healthcare therefore boosts my effective income by £5,000 per year, less the portion of my taxes allocated to the health budget. Those who pay the least taxes therefore get the biggest boost. But spending on ID cards? I was never going to buy one anyway, so my income has not been boosted by the government doing it for me. This, to me, is an argument for shrinking the state down to the bare essentials that we all agree on, but not necessarily reducing the amount of tax raised since we can use the money saved in direct inequality-reducing transfer payments, not in tax cuts. In practical terms, the poorest would pay a negative amount of tax as they’d receive more out in transfers than they pay in taxes. Bingo, smaller (less dangerous, less interfering, less overbearing, less wasteful) state, and also less inequality.

I want to ask about effectiveness and value for money.

For me the actual size of the state is beside the point of whether it does the required job and does it well enough.

I really don’t care what anyone calls it, just so long as there is proper scrutiny of power and we get positive results without negative consequences.

22. Thomas Excellent comment . The problem with the UK is surely incompetence causing money to be poorly spent.

On a practical level I cannot see left wing middle class state employees, Labour MPs and the unions accepting a smaller number on the Government pay roll.

When addressing Sunder’s points on inequality . We have had a welfare state for 73 years . Part of the problem is the significant minority who refuse to obtain the education and skills required for better paid skilled work. The recent programme called the ” The Hospital ” shows the attitude of some young people. Teenagers who leave school without any qualifications, drink excessively , are very overweight; have more than one child by the time they are 20; are not in a stable relationship;have no interest in obtaining skills are and undertaking unskilled work; will remain poor unless their attitudes change. I tis impportant that uneducated and unskilled people have obtained the training required in order to obtain better paid jobs once this country starts to pull out of recession.

The major problem ahead is that any government will have to reduce spending. What Labour needs to do is persuade the minority of people who or make no effort to obtain the academic qualfications and training and lead a healthy lifestyle to take responsibility for themselves, in order to reduce the budgets for welfare and healthcare . A better educated, trained and healthy populace is likely to have a better quality of life. Many better paid jobs are either mentally or physically stressfull. Therefore not only do people need to have the academic qualification, the skills but also the fitness to work .

Dan says most of what I would want to say.

One thing though, about copyright. It’s true that as you move further to the libertarian side than I am that copyright tends to. be argued against. But I’d just like to point out why we actually have copyright laws at all.

It all rests upon the public goods argument.

There are certain things (which are non rivalrous and non excludable) which we fear we would get less than the socially optimal amount of if we didn’t make special rules for them.

We justify the public funding of scientific research this way. Because knowledge is available to all we’ll get too little investment in it….because no one can charge appropriately for the costs of discovering it.

We justify in part the public funding of the education system this way, because ibeing part of a literate population is probably a public good.

Vaccinations are in part a public good through herd immunity….thus public funding.

With copyright we’re saying that innovation (in music, film, writing, whatever) is a public good. More new stuff, more art, is good. But if whatever is created can immediately be copied then we’ll get less such innovation than we desire. Now we don’t then turn around and insist that every artist gets public money (although this is indeed the argument for all that public arts spending) but we do skew the system a little, so that the innovator gets property rights to their innovation.

This may not be a perfect system…..I’d certainly argue that copyrights are now too long.

But the basic underlying logic for their existence is exactly the same as the logic in favour of the subsidy of any public good.

Which is what rather confuses me about the seeming opposition here to copyright. It’s usually the left which is most go hung for the public goods arguments. So why isn’t this true with copyright?

Speaking as a socialist I find debating with ‘libertarians’ quite wearying, not due to their abilities as individuals, but because the arguments they present are so familiar, as if the history of capitalism in the previous 250 years had not witnessed the repeated application of the principles they espouse. Correspondingly the counter-arguments – of the real-life, rather than theoretical consequences of unrestricted free-market capitalism, of the relatiohship between capitalism and the oppressive state – are also incredibly familiar to anyone from a left background, and truthfully there’s only so many times I can repeat them.
In the context of the current discussion, it’s clear that the state will be a necessity for as long as capitalism exists. The ‘libertarians’ require a state to protect private property where it is under threat, to clear out squatters occupying private land or workers occupying a factory, and this is why so many ‘libertarians’ were supporters of General Pinochet. Socialists also require a state to act as a counter-weight to the market, and rather than reducing the issue to the question of a ‘big’ or ‘small’ state, the issue should be how democratic that state it is, and the extent to which its policies cab be affected by popular pressure from below.

In the 1960s New Left historians like Gabriel Kolko highlighted how the state was used as a tool by big business. Kolko’s “The Triumph of Conservatism” shows how the Progressive Era in the USA at the beginning of the 20th century was backed by big business which favoured regulation and cartels to hinder its competitors which were doing well under free enterprise.

Libertarian economist Joseph Stromberg also wrote an interesting study showing how the state was used to support American monopoly capitalism and imperialism: http://mises.org/journals/jls/15_3/15_3_3.pdf

“The ‘libertarians’ require a state to protect private property where it is under threat, to clear out squatters occupying private land or workers occupying a factory, and this is why so many ‘libertarians’ were supporters of General Pinochet.”

I think you’ll find many libertarians who favour private property are anarcho-capitalists or mutualists – they don’t want a state. The sort of “libertarians” who backed Pinochet (usually the so-called neo-liberals) only pay lip-service to libertarianism, picking and choosing which aspects of libertarianism they think will benefit them. They’ll call for privatisation but not for the abolition of patents for example.

Absolutely spot on there James O.

The argument for a “small state” so often seems to mean the hollowing out of the social services sector whilst expanding the state’s repressive forces to protect exclusionary and absolutist property relations, a double fucking over of the poor basically.

The “small state” fantasy should be given a wide berth by the left. Our commitment should be towards democratic control over the political process. The power of the rich lies in their pocket. Ours lie in the ability to organise politically.

Will you fucking morons please stop with the “often means” crap and engage with what has been written in this specific instance please? Ta.

Richard – you’ll notice I didn’t write that ‘liberterians’ necessarily desire or advocate a state,However, the free-market paradise they eulogise would depend on a state to impose on, and protect, unfettered capitalism from the mass of the population. As your citation of Gabriel Kolko indicates ‘really existing capitalism’ has made the state in it’s own interests, and without force to defend it – either by the agents of the state or the private armies which American factory owners frequently used against their workers – capitalism would rapidly be overthrown and replaced by a different form of social organisation, possibly either a reversion to pre-capitalist forms in the case of indigenous peoples, or a new co-operative social model. In an ‘anarcho-capitalist’ society who would evict landless peasants from occupying private land, as the Brazilian CST has done? who would stop workers from seizing the means of production and running them on a co-operative basis? who would stop the starving – as of course there would be no welfare state – from taking what they need from the shops? Either the ‘liberterians’ would require to retain the state or they would re-invent it as privately-owned force.

30. Charlieman

To follow on from Tim Worstall…

Copyright is just one example of intellectual property — legal protection is also provided for patents, registered designs and trademarks, and all serve a useful purpose to promote innovation and trade.

A patent is a licence with limited life to use a process or design in order to make money. Pro-patent campaigners argue that the licence gives the creator an opportunity to recoup development costs and thus create further social goods. Anti-patent campaigners argue that the licence delivers a monopoly and that social goods (eg pharmaceuticals) are sold at elevated prices. I think that the anti-patent argument is weak.

A patent is a licence for one way of producing a product or service, and does not exclude other methods. If you want to draw water from a hole in the ground, the non-patented options include the Archimedes screw or buckets on a rope, so if you can’t afford to license the latest efficient pump, there are alternatives. The drugs misuse laws in the UK define specific compounds as illegal, thus encouraging chemists to invent functionally similar compounds that are not outlawed. Patents work in the same way: something can be done, and if you don’t want to buy my licence, work out a different way of achieving the same result.

Given that intellectual property is so important to human progress, the quality of debate on the subject is dismaying.

Would a left-libertarian support the use of state power (taxation, regulation, legislation, whatever) to support –

a) Improving life for women
b) Improving life for ethnic minorities
c) Improving life for the poor
d) Improving life for the ill-educated
e) Improving life for the sick and unhealthy
f) Infant industries in need of protection
g) Declining industries in need of protection
h) Strategic industries in need of protection
i) Road safety
j) Workplace safety
k) Unionisation
l) Environmentalism
m) Worthy causes I have not listed

If he answers yes to any of these he would have to say that he opposed the use of force for any cause except for those causes he cared much about. (I’m a vegetarian, except when I want to eat meat…)

If he answers no to all of those, he would not find many allies on the Left.

Almost everyone with a cause ends up on the Left – that is why almost all the classical liberals and libertarians have been forced over to the Right.

Charlie @22:

are not in a stable relationship

Sorry, I just have to check this one out. By ‘stable’, what you actually mean is ‘heterosexual, monogamous’, yes?

will remain poor unless their attitudes change. I tis impportant [sic] that uneducated and unskilled people have obtained the training required in order to obtain better paid jobs once this country starts to pull out of recession.

Er, no, they’ll remain poor until the schooling offered to them is not atrociously bad and taught mostly by people who are teachers because they can’t do.

The salaries paid to teachers are not sufficient to cover combat pay; the situation has had two generations to entrench in some areas of urban (and rural!) Britain. Trying to blame it on kids whose parents were only just being thought of when this cycle started is disingenuous, or deliberately obtuse. Or racist, but I feel that last is unlikely given that (contrary to popular opinion) the vast majority of the people you’re talking about are white.

Tim Worstall @24 and several on the subject of copyright:

Speaking as someone who intends to make their living from words, copyright is to me not only valuable, it’s important.

Writing is easy, but it takes time. My time has an arbitrary value set by our society; in it,I have to earn enough money to pay other people for the entire first level of Maslow’s hierarchy. Editing, ime, is not only hard but takes between twice and three times as long in actual man-hours as writing (per edit pass!) let alone collecting feedback, making continuity tables and so on. Adequate research costs money, both directly and through not having the time to work while you’re doing it. Anyone who thinks that fiction authors don’t need to do research hasn’t tried to write anything serious, and certainly not anything to do with speculative or historical fiction.

That means that for anything other than blogging (which relates to long-form writing pretty much as twitter does to a six-hour heart-to-heart with a lover), I need to be earning directly from the writing to be able to write. That means that one of two things needs to be true. Either I need to be sitting on a pile of cash money at least forty thousand pounds high before I start, or there needs to be a self-bootstrapping method offered.

The self-bootstrapping method offered at the moment is copyright. It says that for the first twelve years [1] after I write something, I get to be the only person who can earn money from it. That means that provided I can get one lucky break which pays based on writing I could patch together in my Copious Free Time [2], and as long as I then keep writing, I can make a living off my work. I can’t, however, rest on my laurels; a piece of creative work by my grandfather in 1926 cannot become the source of a multi-billion pound international empire. [3]

Part of the self-bootstrapping method used to be the popularity of magazine short fiction and fact essays. That’s where every writer up to about 1990 earned their journeyman’s bread. That’s where they learned their craft; once you can write well and effectively in 1500 words every day, you can learn to write 80k words which do the job Stephen King would use 350k for. That’s gone now; but I suspect there are models coming along via the internet which will replace that one. Blogging is one, though fiction online is still basically restricted to gay porn, mostly (though as I know to my cost, not exclusively) written by girls who’ve never seen a cock let alone two at once, and non-creative fiction (in the sense, fan fic; often by those same girls [4]). In the graphical medium, the rising success of webcomic artists who go full-time indicates a model by which such a replacement for the short-story magazines might work. It still wouldn’t pay, though, and an apprenticeship which supports the artist is somewhat necessary if you’re going to get anything other than endless rehashings of the latest Lilly Cooper book.

I’m using what I know here; writing. The same problems affect recording artists (mediated by the existence of legacy gatekeeper organisations), film-makers, and so on. Copyright has a utility which goes beyond the profit motive, and could be made into a positive thing just by shortening its limits considerably. Taking it away just guarantees that no-one ever has time to learn to write well.

[1] I like the original law on copyright. To the extent that I’m seriously thinking of putting anything I sell into the public domain after 12 years, as a political statement.

[2] To make a hollow laughing.

[3] Yes, I’m would be over-simplifying if I thought Steamboat Willy was the only reason for the success of the Disney Corporation. However, since I’m drawing a colourful lanalogy, I hope no-one will assume I’m that stupid.

[4] In my yoof I was engaged with internet sci-fi fan fiction. That was weird.

33. Shatterface

John, most of your arguements for supporting intellectual property rights could be extended for other property rights. It takes time and effort to set up a business, to gather investment, to build factories, etc. and anyone who does so (by this argument) is entitled to proffit by it and to ensure that their family will have future financial security. Same goes for scientific research. Pharmaceuticals cost a fortune to develop. The art and literary worlds are the same. But these are arguments I’m favour of capitalism itself and while they are not incompatable with liberalism they are incompatable with statist socialism.

James O:

Would a left-libertarian support the use of state power (taxation, regulation, legislation, whatever) to support –

There’s a big difference between taxation, regulation, legislation and ‘whatever’.

a) Improving life for women
b) Improving life for ethnic minorities

I’m not sure that it’s a good idea to take women and ethnic minorities and treat them as separate from the rest of society. Secondly, if the left-libertarian believes that their policies are generally good for society as a whole, then obviously those policies would have the consequence of improving life for the people in it, which would include women and ethnic minorities. Should they be specifically targeted with special measures? That runs a risk of violating the principle that all are equal under the law, and that laws should not be arbitrary (that is that they should apply equally to everyone).

Laws against sexual and racial harassment and discrimination are in keeping with those premises, and should be enforced strictly. If we can boil the rules down to simple principles that everyone can understand, all the better. I suspect that the left-libertarian view would be that underlying structural problems in society and the economy should be tackled at the root rather than with sticking-plaster initiatives emanating from the Cabinet.

c) Improving life for the poor

In that they’d pay less taxes and, in my scenario, receive direct transfers of wealth, yes.

d) Improving life for the ill-educated

I think that almost everyone now accepts the idea of state funding for education, but I’m really not sure what the specific left-libertarian view on this would be. As above, they’d benefit from receiving the money that the government presently wastes on other things, and reform of the benefit system would mean that even low-paying work would be livable. My personal view is that life-long education should be funded by the state, but should, for many people, be more work-focused than it is at present.

e) Improving life for the sick and unhealthy

Tricky question. I can’t answer ‘yes’ to all of these, because it’s a bit unrealistic to expect that a single political doctrine could improve everyone’s lives simultaneously, but here goes: Reducing or removing the length of time that drug patents last would reduce the cost of drugs for patients. Reform of the NHS (to make it more democratically-accountable, possibly to adopt European state-funded-but-not-state-run models, and my own personal favourite, the idea of making the NHS an employee-run cooperative) might improve standards of patient care, as would the reduction or removal of central target-setting.

f) Infant industries in need of protection

You’ll have to prove that these exist before getting a penny towards their protection.

g) Declining industries in need of protection

Sod ‘em. A democratic government should be interested in protecting its people, not industries or businesses. However, I don’t think I’m going to get away with that rather pithy argument, so here’s a bit more: obviously, people losing their jobs is bad. But it’s bad largely because a) living on benefits is shit (and stigmatised) and b) the economy isn’t terribly good at finding people other jobs. We don’t do life-long learning very well, and tackling that would help. A basic income in place of benefits would also help. Ultimately I’d like to see much more flexible patterns of working so that we don’t have a choice between working 40 hours a week and not working at all. We need to be a lot more open to unconventional arrangements rather than trying to save the ‘nuclear family, male breadwinner working 40+ hours per week in a job for life’ model.

h) Strategic industries in need of protection

Whose strategy? Short of a handful of national defence companies (and even those really are questionable; we could learn a lot from Canadian military procurement) I can’t see which industries would qualify. Tell me which ones you mean and I’ll try my best to answer.

i) Road safety

This is a tricky one. I don’t honestly think that political doctrine is the best way to decide on this. I think there should be a great deal of local democratic control over speed limits and the means of enforcing them. If technology is to be used to monitor and catch violations of the speed limits, it should be done in such a way that it applies equally to everyone (no cameras with film in one day a month).

j) Workplace safety

I don’t have much of an opinion on this, being an office worker whose greatest hazard is a spilt cup of coffee. I don’t buy the whole ‘health and safety gone mad!’ line, so I’d guess that we don’t need many changes beyond some tweaks here and there.

k) Unionisation

Shouldn’t be mandated, shouldn’t be banned. If people want to freely associate in a union, let them. Negotiations, including strikes, are a matter for the employees, their union, and the employer.

l) Environmentalism

There are probably differing schools of thought on this, but my view is that we each essentially own a stake in the planet for as long as we’re alive. Polluting the planet in such a way that it becomes less livable is therefore a violation of my rights and I should expect reasonable compensation for it. For far too long, companies have been able to pollute on the basis that there’s nobody out there who is going to complain. Carbon taxes are probably a good idea, or some kind of carbon permit system. In a perfect world, we’d figure out exactly how much carbon the earth can sustain and issue each person a permit for their 1/6bnth of it, and if they want more then they have to buy a permit from someone else who isn’t using [all of] it. Sadly that’s probably too complicated, so a carbon tax might work as an alternative.

m) Worthy causes I have not listed

One would hope that people would smile upon worthy causes now that they’re living in a utopia where all have the wealth and wherewithal to do so!

If he answers yes to any of these he would have to say that he opposed the use of force for any cause except for those causes he cared much about. (I’m a vegetarian, except when I want to eat meat…)

If he answers no to all of those, he would not find many allies on the Left.

I’m not sure what this is meant to mean. It’s possible to care about the causes you list without thinking that it’s the duty of government to solve them in their entirety.

Almost everyone with a cause ends up on the Left – that is why almost all the classical liberals and libertarians have been forced over to the Right.

Further proof, if any were needed, that ‘left’ and ‘right’ aren’t really helpful terms.

James O: “Speaking as a socialist I find debating with ‘libertarians’ quite wearying, not due to their abilities as individuals, but because the arguments they present are so familiar, as if the history of capitalism in the previous 250 years had not witnessed the repeated application of the principles they espouse.

Newsflash.

(Again).

IT HASN’T.

You think you’re bloody weary?

Of course you’ve really got the issue, which I’m glad to see Sunny raise, of whether state intervention truly works. I too am rooted in environmentalism. Seeing the government promote one wheeze after another, such as biofuels, GM food, the Severn Barrage, & Christ knows what has reinforced my conclusion that on the whole it picks losers & therefore ham-fisted attempts to “help” often do more harm than good.

That is when the state tries to do something “green”. By-products of statism are shite like the CAP/CFP, & other things which do harm to the environment. When the state buzzes around talking about how to be “green”, in often pointless ways,l then promotes fucking toss along the lines of the third runway, it is hardly surprising that people reach the conclusion that anything environmentalist is all about control & the government don’t give a toss about the environment, they just want to extend state control over our lives. This is of course true of Brown, but is an unfair smear on the green movement, though one which I can perfectly understand people making.

I see the need for the state to act by, for example, restricting development in certain protected areas (I would argue here for immigration restrictions, knowing that I am almost a lone voice on this site in doing so), restricting emissions & pollution, etc. But in an ideal world these interventions would be fewer & more evidence-based than they currently are. I would support some form of green tax if the revenue went towards cutting other taxes which are disproportionately paid by the working class, such as VAT.

On matters such as national parks, there is genuine debate. I believe now that the Tory leadership gets it re: the environment. But they opposed the creation of the South Downs National Park, which I (just about) supported. I think their reasons were genuine & I almost agreed.

The whole reason why many left-wingers support a small state is that we think the state often does not serve the goals we have. In short, the state picks losers too often for us to think that more state is the solution to a problem. I for one am sick & tired of this assumption that we don’t care about problems if we don’t support whatever unwieldy scheme it is for the goverment to “help”.

37. Gev Pearce

I have sympathy for the small state libertarians but what is needed is a redistribution of wealth that is brought about by the interaction between the state and the micro community.
Richard Reeves and Demos are putting forward some interesting ideas on projects involving the micro community backed up by the state.
Sure start is an example where the community is given taxpayersmoney, it also has to raise money and is run by the community.
Schools and health centres may be run on these lines.

38. Gev Pearce

Just another idea, what about getting rid of the armed services.
Instead
1. Use mercenaries for oveseas operations, which was British naval policy in the 17 and 18th centuries
2. All adults over 20 as a part time army run on the swiss model. Only mobilised in time of war

“All adults over 20 as a part time army run on the swiss model. Only mobilised in time of war”

Oh, Glorious!

Every citizen to be a slave to the State.

Very left wing, that.

I suppose the key difference between ‘right’ (for want of a better word) libertarians and ‘left’ liberatarians is a disagreement over the nature of free markets.

Right-wing libertarians usually consider the modern free market to be a natural force, with a natural just state to which it will naturally return (which it is fairly close to now), and which it is hazardous and/or morally wrong to attempt to alter.

Left-wing libertarians see the same market as a fundamentally political entity that has been manufactured to benefit the elite, quite capable of dispensing injustice, and something that could exist in many different equally ‘natural’ states – and see nothing at all morally wrong with trying to change it to better reflect the needs of the population.

My big issue with ‘right’ libertarians is that their adherence to the idea of the market as a neutral and natural force (an inherently level playing field, if you like) means they often put its rules and organisation above democracy. A popular democratic vote to in any way alter the running of the market, to many libertarians, is morally wrong and illegitimate.

This at a stroke reduces the role of democracy to tinkering around the edges of society, handing the real decisions that control the way people live their lives to the small elite that own and run the big economic institutions.

Very interesting Jungle. I would add to that the issue of equality. One of my problems with the pro-market people is that to me all actors are not equal in a market, whereas many who whole-heartedly subscribe to free markets believe explicitly or implicitly that all actors ALL equal within the market place.

“Right-wing libertarians usually consider the modern free market to be a natural force,”

Yes, we have evidence of there being division of labour, specialisation and trade of the resultant product from hominids before there was Homo Sapiens. Markets are indeed a natural force.

“with a natural just state to which it will naturally return”

That’s projecting a bit. There are any number of times when libertarians and classical liberals say that the outcome of simple market forces is not desirable and that interventions should be made. We fully accept the concept of externalities, of public goods for example.

It becomes more a matter of which are sufficiently important to be worth trying to buck those natural market forces. Plus, we’re very wary of people being able to buck those market forces.

For one example dear to my own heart. You can argue that drugs should be legalised because no one should limit the right of another to take toot just because they disapprove of it. But a much stronger argument, to my mind, is that in our attempts to limit or wipe out drug use we’ve created something far worse, this prohibition with all the crime, disease and overdoses that go with it.

Even if we accept that a no drug world would be a better one the market forces which lead to their consumption and their supply are too strong for us to deal with.

I can’t speak for left libertarians (heck, I can’t speak for other right ones either) but certainly for me a large part of the difference is that left libertarians appear, to me, to underestimate both the difficulty and the side effects of trying to buck those natural market forces.

43. Shatterface

Yes, Jungle has a good point but I’d add that competition and inequality could also exist in a society where ALL businesses are workers cooperatives but where the market still operates.

As already noted we have co-operatives like John Lewis’s operating fairly successfully in todays marketplace and it is not reasonable to assume that in a society where all businesses are cooperatives that the less successful ones will go to the wall.

Also such cooperatives might not be able to supply unprofitable services so some limited, centralised state might be necessary to deal with market failure.

At the risk of praising myself, I’ve written a post on the need for a big-ish state. It shows my disagreements with those who are dogmatically committed to reducing the role of the state

“Would a left-libertarian support the use of state power (taxation, regulation, legislation, whatever) to support – ”

Rob, there may be a big difference between those things, but there is also a similarity: they all involve inducing people to act in the way the state desires by force or the threat of force. (“Pay the taxes we set, or go to jail”, for example.)

And libertarianism revolves around the injunction NOT to initiate the use of force. They might agree to the state using force to prevent one citizen from coercing another – but not for any other purpose.

So a libertarian might care about any or all of those causes, but even if he thought it was the duty of the government to do something about them, he would deny that the government had the right to force anyone to do anything about them.

Which inevitably puts him into conflict with all those people who do want the government to force someone to do something about them.

These people are more common on the left than the right, at least in this country. Which is why libertarians are more common on the right than the left, at least in this country.

There is also a difference between social and economic liberty. I’m big into social liberty, but not so much economic liberty. There is also the age-old arguement about freedom for one (e.g. the richer) may take liberty away from another (e.g. the poorer)

47. Shatterface

Beardy (47): there have been long and interesting threads here on just that distinction but I’m posting on a phone and so cannot post links. Perhaps someone else can oblige?

48. Daniel Earwicker

The original post was very interesting but I was especially interested in the comment from ‘jungle’:

“Right-wing libertarians usually consider the modern free market to be a natural force, with a natural just state to which it will naturally return (which it is fairly close to now), and which it is hazardous and/or morally wrong to attempt to alter.”

I’ve no idea if any of this is going to be news to you, but it may be to someone reading.

The experience of the authoritarian socialist states, which were ideologically committed to eliminating private profit, was that it was extremely difficult to stop people engaging in simple forms of mutually beneficial trade. It turned out to be necessary to recruit a large fraction of the public as paid informants, and even then the unofficial market never completely died out.

The reason for this is simple. Ordinary people, not motivated by any evil ends, will regularly encounter situations where person A has some item that person B wants, and vice versa, so it is to their mutual advantage to swap those items. It’s bound to happen.

When I was at primary school, a lunch break would never elapse without several mutually beneficial exchanges – Monster Munch Pickled Onion flavour would be swapped for Roast Beef flavour, for example, because I preferred Pickled Onion and my friend preferred Roast Beef, and our mums had run out of our favourites. By swapping, nobody was made worse off, and yet we were each made better off. Mmm… I could really go for some Pickled Onion Monster Munch right now, but I digress.

And so it is necessary to constantly intervene forcefully in people’s daily lives if, for ideological reasons, you want to stop them from harmlessly making themselves and each other better off. Opportunities to do so arise all the time.

“Left-wing libertarians see the same market as a fundamentally political entity that has been manufactured to benefit the elite, quite capable of dispensing injustice”

I think it’s easy to see why they think that, at least in Britain and the USA. There are strong echos of pre-market feudal society in the economic make-up of Britain, where Grosvenor, the 3rd richest man, just happens to be a hereditary peer, and owns the most valuable real estate in London. By an extraordinary coincidence so did his ancestors going back centuries. and they were originally given their property as political favours. And in the USA of course the scars of the slavery era have not yet gone away.

But the big question is, are these old historic imbalances being preserved by the market system, or are they being preserved by those clinging to political advantages, using the state to protect themselves from the corrosive (to them) effects of the market, just as they used state power to create them in the first place? I’m betting it’s the latter. If anything, the market has done more than anything else to erode those privileges, or to make them far less of a real burden to ordinary people.

“My big issue with ‘right’ libertarians is that their adherence to the idea of the market as a neutral and natural force (an inherently level playing field, if you like) means they often put its rules and organisation above democracy. A popular democratic vote to in any way alter the running of the market, to many libertarians, is morally wrong and illegitimate.”

In that case I have a counter-issue you may like to dwell on!

Think back to those persons A and B, who mutually benefit from trading with each other.
Sometimes there is a person C who is damaged as a result of A and B’s interaction, and then you potentially have a moral case for intervening. Damaging side-effects on a third party are called “externalities”, and are a widely-acknowledged Achilies heel of anarchism. This is one reason why I think you must have a state, at least a minimal one, to straighten out externalities. Fortunately externalities are the exception rather than the rule – the vast majority of exchanges between A and B will have no effect at all on C.

But now consider electoral democracy. A and B vote for something that will benefit them but will damage C. Because electoral democracy lets the biggest side win, A and B get their way, and C loses out. Is this challenged by those same people who criticise the market for its occasional externalities? No, it is not. It is held up as if it was a morally justified outcome of a process based on the very highest principles.

Electoral democracy *is* morally justifiable, but only in a surprisingly weak way. If our two sides, AB versus C, resort to a fight to the death to decide whose policy to adopt, it’s a safe bet that AB will win, because there are more of them. As a consequence of this process of reasoning, which is obvious to both sides, it is not necessary to have the fight at all. C figures out that it is better to be alive than dead, so C cedes power to AB. This reasoning is the foundation of electoral democracy: who would win if it came down to a real fight? We better give into their demands, then. Simply by being the majority, they implicitly threaten us with something worse than giving in to them.

So the justification for electoral democracy is simply that fewer people have to die than in a civil war. This is, I agree, a good thing, but the moral quality of the decision making is unlikely to be any more superior than a bloody civil war. What makes life tolerable is that the vast majority of the decisions taken in our daily lives are *not* made under the yoke of electoral democracy. The very idea of electoral democracy controlling every aspect of our lives is thankfully ridiculous because of the impracticality, but it is possible to imagine things sliding further in that direction and it is not a pleasant idea.

It seems like a silly example, because in Britain we’ve never had to suffer under the reality, but why should your next door neighbour, and the millions who agree with him but disagree with you, have any say over what books you read? It would be idiotic, of course. The dictatorship of the majority is a dictatorship like any other. It is not necessary, nor desirable, nor appropriate, for this week’s novel to be chosen by a democratic vote. You, as an individual, can reach your own decision on what to read this week. There is, bear in mind, a terrible danger that by reading a specific novel, you might just learn something to your advantage that your next door neighbour will not learn. And then there will be a tiny new spec of inequality in the world. This is a possible reason why your neighbour might want to ensure that you don’t have the choice.

It is vitally important for people to discover ways to leave each other alone, to find ways to take politics out of situations. This is the essential problem I have with the left: the belief that life would be improved by making everything political, making everything into everyone’s business, increasing the likelihood of ever-raging arguments about trivialities, due to an overarching paranoia about the possible emergence of inequality, and the need to stamp it out at all costs.

There is unlimited power offered by central statist decisiion making, so there is always unlimited scope for the majority to hurt the minority in an attempt to benefit themselves. The irony of this is that the majority typically end up making themselves less well-off as well.

In a way, electoral democracy is the embracing of externality as an end in itself, of finding ways to damage others for your own benefit. It is very popular with those who don’t yet grasp the possibility of mutually beneficial exchange, because they imagine that the only way to get richer is by making someone else poorer. They also fail to notice that they themselves, and all the ordinary people around them, are operating in the market all the time in myriad tiny ways and overwhelmingly benefiting from it. They see bad things in the world and fail to spot that they are overwhelmingly caused by political power. They call for greater regulation of businesses to protect us from them, without noticing that the largest businesses also enthusiastically campaign for more regulation, to protect themselves from smaller competitors, thus increasing their power over us and linking themselves into the body of the corporate state, as limb of it.

The state is the ultimate corporation.

“This at a stroke reduces the role of democracy to tinkering around the edges of society, handing the real decisions that control the way people live their lives to the small elite that own and run the big economic institutions.”

Economically speaking, are people really controlled by anything other than their own wants and needs? Even if I offered you a million pounds, surely there is a limit to what you would do for it, and therefore, no matter how rich I might be, ultimately I have no power over you, because I’m not rich enough to eliminate all your other options for feeding and clothing yourself, and nor is anyone else.

There is more to democracy than the blunt instrument of *electoral* democracy. The economic freedom you get from the simple ability to do a day’s work, to earn a bit of cash to spend as you choose, that liberates you in a far more tangible way than your single non-transferable vote ever could.

On the other hand, if I have the right political contacts, I could probably pull some strings and get the police on to you! Just ask that MP who got arrested for doing his job. Politics creates power. Economic freedom limits power.

Sunny,

The difference between us and the libertarian nutjobs that inhabit the web is two-fold I think:

1) They’re much more likely to excuse instruments of state power (police, libel law) because they believe these instruments are necessary to protect property rights.

Property rights are absolutely fundamental to a free society, on both an ideological and practical level. Would you work hard and innovate if you didn’t know whether you would be allowed to keep the fruits of your labour? I seriously doubt it.

Where the police violate property rights–supported by politicians–we tend to be rather more vocal than yourself.

Whereas my view is that the law around property rights is gamed to protect rich vested interests.

You won’t mind if I pop round and pinch all your money then?

Yes, when vested interests are allowed to influence policy, then there will be abuses. To paraphrase P J O’Rourke, if the politicians decide what is allowed to be bought and sold, then the first thing to be bought will be the politicians.

But that does not mean that property rights themselves are wrong. Seriously, Sunny, please tell me that you support the right of people to keep what they have earned…?

2) Most libertarians claims to be following libertarianism but they don’t actually. Among the loudest idiot libertarians on the British web (Devils Kitchen, MrPikeBishop) are for the free movement of capital but bizarrely not people. But they do have long list of excuses for their ‘pragmatic’ reasoning.

No, Sunny, I support the free movement of people.

I have said that there are problems when there is a big Welfare State–a perfectly valid argument that Hayek made, in fact. I support a shrinking of the Welfare State, partly because that will solve any (perceived) immigration problems.

Otherwise, its a reasonable article by Chris: he is one of those Lefties that, over the last few years, I have found myself agreeing with more often than not.

DK

50. Shatterface

Daniel (48): I agree that even in a socialist country person A may agree to perform a service for person B and vise-versa, but while this exchange might present a challenge to a big, centralist state form of socialism it is not, in fact, a challenge to small- or non-state socialism unless person A pays person C to perform the service for person B on his behalf, while person B pays person D to return the favour, both A and B extracting profit from this exchange.

Only then does it becomes capitalist.

51. Daniel Earwicker

@Shatterface

“Daniel (48): I agree that even in a socialist country person A may agree to perform a service for person B and vise-versa, but while this exchange might present a challenge to a big, centralist state form of socialism it is not, in fact, a challenge to small- or non-state socialism unless person A pays person C to perform the service for person B on his behalf, while person B pays person D to return the favour, both A and B extracting profit from this exchange. Only then does it becomes capitalist.”

The situation you describe consists of the follow set of independent relationships between pairs of individuals:

AC (A gets service, gives money, C gets money, gives service)
BD (as above, inserting B for A and D for C)
AB (both exchanging service for service)

Now, of course, it may be that one or more of these relationships are not mutually beneficial, e.g. C is worse off staying in the relationship with A than they would be out of it. So why does C remain in that relationship? They must have had their liberty curtailed somehow, which means slavery. But as you and I are reasonable people we agree that that situation is indefensible, and the proper role of the state is to discover such “relationships” and break them up, rescuing C from slavery. (Marx, Lenin, Stalin, Mao, etc. were apparently not reasonable people, as they based their entire systems on slavery, but that needn’t concern us.)

If there is no slavery, then each of these individual relationships must be mutually beneficial, i.e. each person in the pair AC is better off as a result of the relationship, and so they would enter into it freely and voluntarily and become better off. Then each relationship is surely allowable by itself. So how can it suddenly become illegal due to the simultaneous existence of the other two relationships? And for what possible reason given that all the relationships are beneficial? Assuming you could decide which of the relationships to ban, what would be gained and what would be lost, as a result of the ban?

It is hard to tell which of the two scenarios (mutual benefit vs. slavery) you had in mind, because you give only a selective description of the situation: “both A and B extracting profit from this exchange.” So it sounds as if A and B are better off. What about C and D – are they richer than they would have been, so explaining why they stay in the relationship, or do we need to introduce the factor of slavery?

52. Shatterface

A, B, C and D are not collaborating on an equal basis as A and B own the means of production, C and D do not. If C and D do not ‘cooperate’ on terms more beneficial to their employers, A and B will hire E and F. There are always more employees than employers so the system is always weighted against them.

And as regards your earlier post, outside Klingon society democracy is not a substitute for war as for the most part AB will not kill C over every disagreement. Your Hobbesian view of humanity doesn’t bare scrutiny.

“A, B, C and D are not collaborating on an equal basis as A and B own the means of production, C and D do not. If C and D do not ‘cooperate’ on terms more beneficial to their employers, A and B will hire E and F. There are always more employees than employers so the system is always weighted against them.”

Would C and D be better off without access to that capital (the means of production) owned by A and B?

To keep it very simple indeed, consider a farmer who is spadeless. He gets one from a capitalist who charges him some portion of the extra productivity for the use of the capital equipment, the spade. The capitalist is, as we are constantly told, profiting from the sweat of the farmer’s brow. Exploiting him that is.

But the farmer is also better off. He also gets some cut of that extra productivity. He must do, otherwise he wouldn’t go to the trouble of using the spade at all. He’d carry on digging the potatoes with a stick.

So we can just as well say that the farmer is exploiting the capitalist. For he’s not passing on to the capitalist the full benefits of the increase of productivity brought about by the use of the capital.

You can blow this up to any size you want. The 500,000 people in the car trade would produce perhaps one car each per lifetime if it were not for the capital invested in hte industry which makes them so much more productive than that.

This is the bit so often seems to get missed. Sure, the owner of the capital benefits from the use of it by labour. But labour also benefits by being able to use the capital. It’s a mutually beneficial trade which is why it happens of course.

Mr Worstall.
Excellent post. My arguement is that it is mutually beneficial in some ways, apart from
a) the fact that the capitalist will only do it on their terms
b) in fact the profit is taken by the capitalist and the worker who (by definition) does the work is ‘rewarded’ for their labour at the market value, which is less than that which the capitalist makes and not necessarily the inherant value of what they do.
a further extrapolation of the latter is the reason that footballers are paid more than nurses

it is the unequal power relationship between all parties that means that market relationship between worker and capitalist is inherently expolitative

It is my opinion, after reading Eat The Rich, that P J O’Rouke is one of the biggest idiots to have been born

How very constructive. Have you tried his All The Trouble In the World? That seemed pretty intelligent to me.

In general, it is pretty clear that different sectors have different bargaining powers (though notice, the footballer has no state protection, whereas nurses are meant to have plenty). But if the longterm trend is for higher wages for workers and greater prosperity for everyone, then isn’t there something to be said for the system that is generating it? Or is it always “NO, not fast enough! We need to get a politician in to bash some heads together now!”.

Tim

I am not sure your capitalist analogy is correct.

A owns the field and the spades. He gets B and C to work for him at the market rate for potato pickers, retaining, and possibly investing, the profit from the sale of the potatoes.

B realises that using a spade is hard work and designs a pitchfork to do the job better. He opens a business making pitchforks. A buys pitchforks from B and C’s digging is made easier.

Things only start to fall apart when the King sends the Sheriff to take half of A and B’s profit and and half of C’s wages at the point of a gun. The King and the Sheriff keep some of the money for their own purposes (mainly feasting) and give the rest to D who refuses to work at the rate of pay C gets, (especially when the King takes half )and E who can’t be bothered to work at all.

There certainly is something to be said for the system that improves the lot of the worst off, whatever means that be (depressingly pragmatic, I know).
If that works then great. Then let’s look at the free market in practice, does it lead to greater equality and freedom? No, the opposite.
So we start from the basis that intervention is needed. How much is the question. I’d argue lots (ish).

Marx said that capitalism is one step along the road to communism, which is pretty much likely

“the fact that the capitalist will only do it on their terms”

Good grief, even Marx got this one so it should be within your capabilities.

Capitalists are competing with each other for access to that labour. So they cannot impose their own terms. They must negotiate agreed terms, such agreed terms will include some of the things the capitalists want and also some of the things that labour wants. You know, a nice negotiated agreement? A compromise?

Things do change if the capitalists can impose a monopoly….become the monopsony purchasers of labour. As happened in hte Soviet system for example, where a deliberate decision to hold down hte returns to labour and raise them to State allocated capital was taken. It’s one of the reassons the Soviet places were such shit holes. And one of the reasons why we have anti-monopoly laws.

I’d disagree with Pagar in that taxation and state involvement is not when everything breaks down, rather its when C, D, and E notice how well A is doing just by virtue of owning the land, and how rich B is getting while C, D, and E are living in the dirt

Mr Worstall

I’m aware that usually any single capitalist is unable to impose their own terms, but the capitalist class as a whole are able to impose terms that are favourable to them.

I am aware of the competitive environment that makes for a more diffuse market place.

Monopolies are a terrible thing, but i’ve always tended towards having them in state ownership rather than having them as a license to porint money for private pockets

62. Daniel Earwicker

@Shatterface,

“There are always more employees than employers so the system is always weighted against them.”

This seems to imply that if the ratio was 1:1, things would be better. But a head count of the two groups does not tell us anything useful about the range of choices open to them.

Suppose there are 100 people in the world and all are either employed or are employers.

If the ratio is 1:1, then each employer employs a single person, giving us 50 entirely separate relationships. If this situation were artificially maintained (e.g. by a law limiting each person to “monogamy”) then the choice available to either is greatly reduced, because each relationship would need to find another to swap with, who is willing to swap at around that exact time, to avoid the the illegal situation where one employer has two or more employees. They might have to arrange long chains of swaps (ideally an 3rd party agency would help to arrange these, but of course, that agency would only be able to employ one person! Oh dear…)

In the real world, the laws are not (yet) so ridiculous as that. As a result, there are lots of other ratios that we haven’t stated but that are highly relevant. Of a workforce, what proportion are disatisfied and looking for work at a given time? In a market, it’s small, because most workers are fairly satisfied most of the time (because of the implicit threat that they will go elsewhere unless they get satisfaction). That severely reduces the competition for jobs between those who are still dissatisfied. Of an employer, how many unfilled vacancies do they have per employee? (Hint: it’s always greater than 1 if the business is sound, and if its not sound, then it’s the boss who is losing money – music to your ears, no doubt.) This increases the range of choices open to the minority looking for a new job. These two factors alone have a huge impact on the range of choices available to the employee looking for a better deal.

“And as regards your earlier post, outside Klingon society democracy is not a substitute for war as for the most part AB will not kill C over every disagreement.”

I don’t personally travel in Klingon society, but that’s exactly my point. They never kill them over ANY disagreement. You may have assumed that I was claiming that electoral democracy is no better than civil war, which I was absolutely not claiming; less slaughter is good, I agree. The wider point I was making was that electoral democracy is only the first step on the pathway to civilisation, and a society in which it was universally applied would be hellish – the dictatorship of the majority over every aspect of life.

Er… live long and prosper?

I’ve done a lot research over the last year on wealth and income inequality and have come to the conclusion that two factors are the most important: government corruption and inflation. A large, centralized state is necessary for both conditions and so those who advocate greater equality should support smaller government.

It also seems to me that how government is funded has an impact on the size of government. Governments funded through taxes on income and capital (such as the US) can only extract so much revenue from the economy before the growth inhibiting effects of the taxes become counterproductive. Governments funded more through consumption based taxes are able to collect and distribute a greater share of GDP.

It is counterintuitive, but it appears to me that a more egalitarian approach would be a smaller government funded primarily through consumption type taxes.


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