Why I became a left-libertarian


4:23 pm - April 17th 2011

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contribution by Martin

As Libertarians across the US flock to cinemas to watch the film version of Atlas Shrugged (the film has a limited release and harsh criticism from everyone outside those who are already fully bought into Ayn Rand’s philosophy of corporate apologism and advocacy of selfishness as a way of life), the UK’s own Libertarian Party is caught in a minor controversy over its leader.

So it’s not a brilliant week to be a reader of Nozick, Rand, Friedman or Mises. But then, it’s never a good time to declare yourself associated with any philosophy that holds lassez faire capitalism to be a virtue.

But to an increasing number of self-described libertarians, myself included, the “right wing” libertarians of the LPUK/LPUS are quietly abandoning the doctrinaire “virtue of selfishness” model of freedom advocated by the Capitalist Libertarians who insist on the productive wonders of hierarchial, wealth concentrating and politically powerful private corporations.

The left-libertarian, on the other hand, prefers to recognise these economic powerhouses as what they are: the beneficiaries of near invisible State subsidies in a variety of forms.

These subsidies include
– artificial property rights,
– a regulatory system that benefits large, established players at the expense of smaller suppliers,
– subsidising of long-distance transportation at the expense of local enterprise more able to adapt supply to demand,
– and overhead capital costs made so high that most regular people are unable to ever go into business themselves.

In short, Capitalism as we know it couldn’t survive without the state; “free market” capitalism is an oxymoron. In reality, capitalism – even anarcho-capitalism – is in effect, privatised feudalism.

So why do so called Libertarians come out in full force to support an economic system that is anything but libertarian?

The problem is that many forms of libetarianism lack any form of social context.

Such libertarians, derisively named “vulgar” libertarians, are best characterized by the very stereotypes they try so hard to shake off: misanthropy, selfishness, and a total disregard for non-State sources of oppression (sexism, racism, other forms of prejudice), as well as the vast inequality of wealth and lack of opportunity pesented by the modern, top-down State Capitalist economic system.

Rather than attempt to understand the sources of these harmful feelings, they often ignore, or worse, justify their presence in their vision of a “free” society.

As an example of such, I refer you to much of the work of Austrian Economist Walter Block, who recently relased a book titled The Case for Discrimination.

The Left-Libertarian argument, on the other hand, runs differently. We accept the harm caused to minorities by socially destructive and divisive prejudices- and the need to fight them.

We also accept the damage caused by concentration of wealth and the class system- and the need to fight them.

Our only disagreement with the conventional left is our mistrust of the State as a tool for reforms.

After all, the State is an instution that exists to allow the corporate classes thrive- and the liberal left’s policies, while claiming to work towards a more fair and free society, are merely tinkering within the permitted parameters of the status quo.

It is this distrust of both State and private privilege that sets us apart from the Libertarian Right.

The left-libertarian position is well summarised by the mutualist writer Kevin Carson, of the Centre For a Stateless Society: “Big business has been a creature of the state from the beginning. And genuinely free markets would operate as dynamite at the foundations of corporate power.”

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Good article, but I’d me interested to read more on why left-libertarianism is good and how it would work in practice.

Rather than attempt to understand the sources of these harmful feelings, they often ignore, or worse, justify their presence in their vision of a “free” society.

As an example of such, I refer you to much of the work of Austrian Economist Walter Block, who recently relased a book titled The Case for Discrimination.

Did Block endorse discrimination or oppose statist attempts to eliminate it? His Defending the Indefensible was an entertaining book even if one could agree with absolutely nothing in it.

It’s worth keeping an eye on the Bleeding Hearts Libertarians blog. And the C4SS, naturally.

The term ‘Left Libertarian’ has always struck me as a word used by people too afraid to declare themselves to be ‘communist’.

Good article, left-libertarianism appears to be having something of a renaissance thanks to Kevin Carson and the mutualists in the USA.

The term ‘Left Libertarian’ has always struck me as a word used by people too afraid to declare themselves to be ‘communist’.

Well, there are libertarian communists. But left libertarians can hold views that would have trueborn commies beating them with copies of Das Kapital. A belief in private property, for example.

It’s obviously true that a lot of large corporations are too close to governments and regulators, and that this can only be a bad thing for our society. But I’m not convinced that big business only exists as a result of the state. You list the following “subsidies”:

-Artifical property rights: This is a little vague, I assume you’re referring to patent and copyright law. While they may be in need on reform, I don’t think our society would be better off without them.

-Regulatory capture: This is pretty valid, but I’m not sure it explains all of it. It would be difficult to argue that Facebook, for example, has the market power it does as a result of regulatory bias.

-Transport: While flying is a lot more tax efficient than say, driving, this does not explain the market power of the many business who make little use of transport networks

-Overhead capital costs: Again this is very vague, but I assume you’re talking about the high cost of loans to small businesses. This is mainly a result of market forces – small companies are inherently much riskier than large ones.

Even if you accept the argument that without the state we would have no robber barons or tycoons, what sort of setup do “left-libertarians” propose to remedy this? While it may be inevitable that the state is captured by the businesses it is supposed to be regulating, is there a stable alternative configuration?

An interesting article, but id have to echo Charliemans post; left-libertarianism is essentially just utopian-socialism / communism which ignores as a side issue the ‘temporary’ authoritarian state that youd require in order to create such a scenario.

Also re your characterisation of right-libertarians as selfish pawns of big business; i am neither selfish, rich, elitist or a corporate whore, i merely realise that human nature and societal progress thrives off incentives, and that reducing these incentives is a bad thing.

Splitter!

Just to take one of your examples:

“a regulatory system that benefits large, established players at the expense of smaller suppliers,”

Which is why I’m a classical liberal, not a libertarian. It’s all right there in Smith, how (in his time, the guilds, more recently union closed shops, today large companies) those organised and with access to political power will use that access to benefit themselves.

Which, of course, is why we want to reduce political power over the economy, so that those with access to that political power don’t get to set themselves up economically by exercising that political power.

BTW, you say “free market capitalism”. But there’s two very different things here. There’s markets (“free” doesn’t exist, as we all know) which are a method of exchange. There’s capitalism which is a method of ownership of productive assets.

I (in common with all of the classical liberals I know, all colleagues at the ASI, indeed, every libertarian I know) am just dandy with the idea that there could, should be, are, alternatives to capitalism. Waitrose, the Co Op (different sorts of mutuals), Mondragon, Friendly Societies, Building such and so on. Hey, go for it.

I’m deeply unconvinced that there’s anything other than markets as methods of exchange, nor the prices that we get from them as methods of planning. There’s a few places where we go to second best solutions for other reasons ( defence and law for example, some types of public goods).

The idea of mutuals working inside a market? Sure, why not, we’ve lots doing that right now. About the only thing I’d put forward as an idea for you to consider is that we should probably have a market in forms of organisation though. Those who wish to be mutual, do so. Those who wish to be capitalist can also do so. And may the best system win.

The reason I’m at length here is because I’d like to know your feelings about markets. Are they something to be abolished from this left libertarian world? Or is it only the hijacking of political power by capitalists that is to go? If the first, then what are you going to replace it with? If the second then great, carry on.

Tim,
“The reason I’m at length here is because I’d like to know your feelings about markets. Are they something to be abolished from this left libertarian world?”

Nope. I am in fact happy with the label market anarchist. And I do in fact agree with you here:

“I (in common with all of the classical liberals I know, all colleagues at the ASI, indeed, every libertarian I know) am just dandy with the idea that there could, should be, are, alternatives to capitalism. Waitrose, the Co Op (different sorts of mutuals), Mondragon, Friendly Societies, Building such and so on. Hey, go for it.

I’m deeply unconvinced that there’s anything other than markets as methods of exchange, nor the prices that we get from them as methods of planning. There’s a few places where we go to second best solutions for other reasons ( defence and law for example, some types of public goods).”

But my point is that, in the economy as it exists today, such alternatives are largely suppressed, and made artificially uneconomical, or at the very least put out of the reach of the people who would most benefit from them. I feel that, on a genuinely level playing field, the modern “Capitalist” form would die out.

After all, when self-employment for all becomes more accessible, and the bargaining ability of workers is not artificially hindered and the capitalist’s influence greatly increased (http://c4ss.org/content/4163), anyone willing to work for a capitalist would need to get a pretty damn good deal.

13. Charlieman

@11 Tim Worstall: “The reason I’m at length here is because I’d like to know your feelings about markets. Are they something to be abolished from this left libertarian world? Or is it only the hijacking of political power by capitalists that is to go? If the first, then what are you going to replace it with? If the second then great, carry on.”

A market for armies? A market for judges? Just asking, Tim.

14. Charles Wheeler

But you don’t explain how you would combat the forces you describe other than through the state?

@13….your point is covered in this:

“There’s a few places where we go to second best solutions for other reasons ( defence and law for example, some types of public goods).””

No, we don’t want markets in those things. As I say.

“After all, when self-employment for all becomes more accessible,” This brings us to a Marxist (umm, Marxian?) point made by Chris Dillow and which has persuaded me. That the methods of production (or whatever the phrase is) do determine societal relationships.

Now, no, I’ve not drunk to Kool Aid, I don’t go on to historical inevitability here. But it’s certainly been true over the past couple of centuries that capital has been a hugely important part of the economy. Just not possible to have large scale manufacturing without it. But as human capital (knowledge really) becomes an ever more important part of the economy that need for vast accumulations of capital rather recedes. And thus one would expect the power of capitalists to similarly recede.

I think we are, as a result of that greater importance of knowledge, moving towards a world where more mutualsm, worker ownership and so on, will have greater economic vialbility. AQnd I’d expect them to expand as a result.

I agree with much of this article. The fetish that lefties have for the state has always been a complete mystery to me and is why I will always just be a plain vanilla liberal. At no time since the dawn of the nation state has the state apparatus and agents not been the oppressors of the most disadvantaged in society. The state has not been their friend.

In a world of superabundance we could all live in a communist world. However, we have scarcity not superabundance. Scarcity means we need a price mechanism to allocate resources. Communist or Socialists systems fail because they wrongly believe that they can legislate to alter the fundamental motives of human nature. However, their fundamental weakness is that they can’t price things properly in a world of scarcity.(Socialist calculation problem) There would be no problem with central planning per se if the central planner had access to unlimited resources of every commodity. The price mechanism means that those who have access to or can gain the monetary medium of exchange will flourish better than those can’t get monetary units. Therefore, the price mechanism will inevitably lead to inequality.

A world of completely laissez-faire would be fine if we were all born with equal abilities to gain monetary units. However, that is not the society that I recognise here or anywhere else. It is not the fault of the person that they were born with an IQ of 85. However, they will always struggle to gain monetary units no matter how hard they try. I used to resent the amount of tax that I paid and thought I got little in return. Then I started to realise that almost everything is random and pure luck. People can make the most of their opportunities but they started in an ovary lottery. Random events throughout one’s life influence all the subsequent outcomes. Where one happened to be born was just a random event. Einstein used his talents but probably would not have been a famous scientist if he had been born in Papua New Guinea. Mr Cameron has taken the chances presented to him. However, he probably would not have been Prime Minister if he had been born and raised on a council estate. We are not born with equal abilities and some people will perform worse through no intrinsic fault of their own. From my perspective that means there is an ethical case for some degree of redistribution.

The state is needed for the provision of public goods and as a check on corporate power and to redistribute resources to the disadvantaged. However, we should not overly fetish it as a force for good. Corporates following their own interests will always seek to co-opt the state to rig the game to their advantage. They do not do it because they are evil, they do it because they are following their own narrow interest. Therefore, we need to have strong checks on the power of the state itself. That will always be the difficult part considering the state is the one writing the rules.

17. Chaise Guevara

“Our only disagreement with the conventional left is our mistrust of the State as a tool for reforms. ”

What better tool do you propose to use? Is it workable and realistic?

“After all, the State is an instution that exists to allow the corporate classes thrive- and the liberal left’s policies, while claiming to work towards a more fair and free society, are merely tinkering within the permitted parameters of the status quo. ”

I’d say that if there are problems with the State, we should change the State. The only other option would be to allow private interests free reign, which would make your “corporate classes” even more powerful.

“I’d say that if there are problems with the State, we should change the State. The only other option would be to allow private interests free reign, which would make your ‘corporate classes’ even more powerful.”

There is another theoretical option: workers’ councils. They tried that in Russia after the October Revolution of 1917, at least in nominal terms, and with the Communist Party in the vanguard. Look what that led to.

“The left-libertarian, on the other hand, prefers to recognise these economic powerhouses as what they are: the beneficiaries of near invisible State subsidies in a variety of forms.”

I too am against these “near invisible” State subsidies, but in ALL forms, not just a certain variety.

“In short, Capitalism as we know it couldn’t survive without the state; “free market” capitalism is an oxymoron. In reality, capitalism – even anarcho-capitalism – is in effect, privatised feudalism.”

Ha! I use the term “Nationalised Feudalism” to describe Fabianism/Socialism. What is interesting here is: “wouldn’t survive without the state”…so why are you attacking Capitalism? – it is amoral – the State is what needs to be curbed/reformed, for surely if we have a State at all, the prime directive is to defend the indivdual from force or fraud and so reject the advances of the amoral Capitalists.

“So why do so called Libertarians come out in full force to support an economic system that is anything but libertarian?”

I do not see Libertarians “coming out in full force”. In fact what you describe – Capitalism and State collusion – is Corporatism or Fascism and the Libertarians I know detest it. New Labour made an attempt at it and Cameron is perpetuating the scandalous state of affairs.

“Rather than attempt to understand the sources of these harmful feelings, they often ignore, or worse, justify their presence in their vision of a “free” society.”

The problem with being against discrimination is how can you be with freedom of association, action and thought? In cutting down those freedoms to get at the devil of discrimination, you would not be able to stand upright in the winds that would blow then! (to paraphrase a favourite film clip of mine). BTW, most of those trees of freedom have been cut down and turned into legislative fence-posts ready to enclose us. Further, what if they “understand” them – what action can be taken that does not violate core liberties?

“We accept the harm caused to minorities by socially destructive and divisive prejudices- and the need to fight them.”

Fight them how, exactly? How does this “fight” square with freedom of association, speech, act and thought? What makes you think non-Left-Libertarians do not “fight them” in an atomic, individualistic way or recognise the harm it does? I certainly do!

“We also accept the damage caused by concentration of wealth and the class system- and the need to fight them.”

Fight them how? Define “class system” today. What if there is damage caused by concentrations of wealth? If that wealth is gained legally and through hard work, effort and dare I say it, luck, who is anyone to take that away for some theory of “damage”? How, again, does your fight square with basic freedoms, Rule of Law and non-aggression?

There is, I suspect, more damage caused by concentrations of ignorance and lack of ambition than wealth. That is surely a better place to start instead of “class war”!

“It is this distrust of both State and private privilege that sets us apart from the Libertarian Right.”

If the State is not a tool, then how can you then cricise the LPUK’s silence, for it is a Political Party and so bound in its actions and policies for that which an Administration would do. The LPUK intentionally limits itself, being Minarchist in nature, eschewing interventionism. It has no opinion or plan of positive action beyond dismantling barriers, subsidy and collusion, for to do so would render it Authoritarian, interventionist and dictatorial.

“The left-libertarian position is well summarised by the mutualist writer Kevin Carson, of the Centre For a Stateless Society: “Big business has been a creature of the state from the beginning. And genuinely free markets would operate as dynamite at the foundations of corporate power.” ”

I am all for genuinely “freed markets” and of all the Libertarians I have met, only a handful at most did not want that to be so.

Like you say ‘Atlas Shrugged’ has a very limited release, so I find it surprising it has gained so much attention, also I think most nominally sympathetic readers, a few obsessive’s apart, recognise it’s a badly written book.

“Ayn Rand’s philosophy of corporate apologism” – I haven’t found this in anything I have read so far, perhaps you could help me in finding it?

As a “right-libertarian” (perhaps, not sure yet, I’m still young, still trying to figure out how the world works), I don’t see how your brand of libertarianism differs from mine. You seem to mischaracterising the “right-libertarian” position. Right-libertarians generally also are against the vulgar-libertarians, as you call them.

Your “subsides” as I see them:

“artificial property rights” – Not sure what you mean, intellectual property perhaps? – Most right libertarians would be against this. Or the rights were stolen long ago? – Most right libertarians would be in favour of compensation, or giving the property right back to its original owner (obviously complicated). The protection of property rights by the state? – As right-libertarians are, as stated libertarians, not anarchists. They favour a small state rather than no state. Naturally the main thing that small state would do would be defence and law and order. Not sure of any problems here.

“a regulatory system that benefits large, established players at the expense of smaller suppliers” – Right-libertarians would of course agree. Not sure of any problems here.

“subsidising of long-distance transportation at the expense of local enterprise more able to adapt supply to demand” – Again because they are libertarians and argue for a small state. “Right-libertarians” might favour transport to be part of what the state does out of taxes. Or some sort of toll system, were business would obviously pay for what they use. Not sure of any problems here.

“and overhead capital costs made so high that most regular people are unable to ever go into business themselves” – Not really sure what you mean here. New businesses have risk; I imagine we would want that risk to be correctly priced, no? Kind of the problem we’ve just had, that lead to the crisis.

Agree with you stereotypes of vulgar-libertarians, you seem to be trying to paint these as “right-libertarians” – perhaps because of the forum you are writing in? I’m not sure, you have the basis for a good article, just seems like you have either misunderstood “right-libertarians” or are deliberately trying to mischaracterise them.

I really don’t see what separates left and right libertarians, please come up with real differences. I am eager to learn.

Self-labelling yourself with a word that many people associate with simple-minded and sociopathically selfish wingnuts is not a good marketing ploy – no matter what prefix you add to it.

Crikey, the state serves the interests of a certain class, who’d have thought it.

@21, yes I agree…Martin is brave using the label “Left-“… 😉

“Good article, but I’d me interested to read more on why left-libertarianism is good and how it would work in practice.”

I believe Gary Chartier’s Conscience of an Anarchist covers this (I haven’t had a chance to read it yet though). Also Kevin Carson’s Organization Theory: a Libertarian Perspective is perhaps the best and most comprehensive book on left-libertarianism in my opinion. It can be read for free here (it’s actually longer than the published version): http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html
His Homebrew Industrial Revolution also gives a good idea of how a left-libertarian economy might work: http://homebrewindustrialrevolution.wordpress.com/

20 – I think the difference is that right-libertarians imagine that a libertarian world world be a bit like Tesco minus the state – not that different to the system we have now. Whereas left-libertarians believe it would result in a more decentralised, green economy with less inequality. In short, they believe that their policies would have different outcomes (although many left-libertarians also favour a usufructuary attitude to land ownership and have a different view of what causes the business cycle to right-libertarians).

Also left-libertarians are probably more socially liberal on cultural matters and hope that a libertarian society would be a more tolerant society. Conversely amongst right-libertarians you are more likely to find social conservatives. That said neither believe in using the state to enforce their particular beliefs on others.

Oh no, not this old rubbish again. How many more times? There is no such thing as libertarians. They are all fake. As has recently been revealed , even Ayn Rand was on welfare.

The so called libertarians just don’t like “other” people getting sweeties. Particularly if they are of the “wrong” colour. Drives them bat shit insane if other people are getting things that they don’t approve of. “Oh , but by the way leave my Medicare alone. “ Hypocrites the lot of them!

Perhaps the guys who vomit at the word “libertarian” might use some of the empathy they think the fellows lack. While “libertarian” can mean “hands off my SUV” – Robert Anton Wilson said he wouldn’t join the Libertarian Party as he felt an insufficient hatred for poor folk – it can mean “I don’t think the state is a marvellous way of helping people”. Which, y’know, might disagreed with but doesn’t place you somewhere between Ayn Rand and Count Dracula.

I always find the the idea of social conservatives who claim to be libertarians quite funny. There is the strand of genuine libertarian thought. However, in the internet era there is a preponderance of what Sally describes are the fakes. Scratch the surface with those ones and underneath lurks a Tory. Those types just do not like paying tax and cloak that tax resentment in a convenient ideology.

@23 Roger, you got there first!

I agree with what Bronco’s saying. I wish ‘left-libertarians’ would join the libertarian political camp, rather than hang around on the left, where the others (such as BlueRock above) seem to have mainly contempt for you. You’d probably find more in common with other libertarians than other leftwingers.

Richard W “I always find the the idea of social conservatives who claim to be libertarians quite funny”

Yup, It would be funny if these people were not so fucking dangerous. The only think stopping them from putting people like me on top of a bonfire is the sate. Long may it continue.

Dam should have been State, not sate.

Pile of crap computer.

Come on Sally, you keep this mantra up all the time. What is this libertarian test that everyone fails? Let me take the test!

Sally @26: Try again. You clearly saw the word “libertarian” and stopped, despite the fact the entire post was on demonstrating exactly what is wrong with the libertarianism you describe. You attacked Ayn Rand, rightly- and guess what? So did I.

Roger Thornhill: “I too am against these “near invisible” State subsidies, but in ALL forms, not just a certain variety.”

If you genuinely mean that and you object to state granted limited liability, copyright, patent, obligation free state granted land titles, etc. then you are within what tends to be referred to as the left-libertarian spectrum. However, in my experience, those who describe themselves as libertarians, but scoff at the concept of left-libertarianism, tend to make the same claim about being opposed to state handouts and privilege, but don’t really apply the belief consistently.

“The problem with being against discrimination is how can you be with freedom of association, action and thought?”

I’d flip the question around. If we have freedom of thought, how can you prevent somebody being opposed to discrimination? If we have freedom of association and action, why should people not be able to disassociate from and ostracise and those who hold discriminatory attitudes?

@34 Paul,

“If we have freedom of association and action, why should people not be able to disassociate from and ostracise and those who hold discriminatory attitudes?”

There’s no reason at all. Ostracism and boycotting are actions that infringe nobody’s rights, and are totally compatible with libertarianism.

TT @ 32

I cannot speak for Sally, but for me at least, the ‘test’ (if that is how you want to frame the debate) that you always fail is that you assume that we are we are out of some kind predestined pathway, that we would have the basic sort of society we have today, had the State interventions of the last Centaury had never occurred.

You assume that the vast increase in living standards we saw in the developed World happened in spite of the State and not a direct result of State interventions. You people appear to imagine that we could everything from universal literacy, health coverage, police, fire brigades, armies, street lighting, clean water and sewage systems and the entire trappings of living in the first World. You try and build scenarios where all of these things somehow sprout out of the Earth in a spontaneous flourish of free market benevolence and even list a few principalities, island and city States as ‘proof’ of how Libertarianism would work, if only we could unfetter big business and allow it to shape our Statist, World. This rather conveniently forgets that these City States are basically parasites who live at the edges of those Statist Countries, living of profits gleamed in those Statist markets.

I wonder how many of your average Libertarians got extremely wealthy from the burgeoning middle classes, middle classes forged from the huge expanse of the Civil Service all over Europe.

I wonder how many cars your average manufacturer made from people who joined the civil service in the late fifties, keeping their head down until they retired, paid off their mortgage? I wonder how many BMWs were sold to people who sat in Government offices, collecting data and lunch vouchers, keeping their noses clean etc?

I wonder how many BMWs were bought by private sector business owners whose profits came through people on welfare having enough money to buy their goods and services?

I wonder how many BMWs were sold to people who were kept in business via a whole plethora of farm subsidies?

Perhaps you forgot, or hoped we forgot or you genuinely simply never understood in the first place that the EVERYTHING the Libertarian movement is based on only became viable because ‘someone’ (and I think we all know where this going) introduced a series of authoritarian laws that specifically curtailed one set of people’s freedoms. Not the freedoms of trade associations or Companies, or voluntary groups or sports agents, entertainment promoters or any other groups of people coming together, but the trade union movement.

Okay you wanted Sally to give you the ‘Libertarian test’, well again, I don’t know what she thinks what this test is, but here goes:

Would you support a Political Party who wished to repeal ALL laws regarding union activity, as a gesture of intent, to show that the Government was going to get out of the way of the economy?

“Oh no, not this old rubbish again. How many more times? There is no such thing as libertarians.”

http://all-left.net/ – this is presumably a fictional website then? Your trolling never ceases to amuse me.

36 – As a free marketeer I don’t believe the government should interfere in the running of the unions anymore than it should interfere in the running of business. There should be no government restrictions on secondary picketing or how unions organise their strikes. Similarly employers should be allowed to come to a closed shop agreement with trade unions. However, employers should also be allowed to ban their employees from striking or belonging to unions. And unions should not have any immunities from from any losses their activites cause. In short, union/business disputes should be dealt with contractually and neither side should receive government support.

“Crikey, the state serves the interests of a certain class, who’d have thought it.”

Err, no, that’s not quite the point. The State will serve those who can manipulate the State to serve them.

Which is the minarchist argument. No, not that the State should serve me, or you….but that if the Sate has the power to serve a certain group then it will, at cost to you and me.

Therefore, don’t give the State power to serve elsected people.

But to an increasing number of self-described libertarians, myself included, the “right wing” libertarians of the LPUK/LPUS are quietly abandoning the doctrinaire “virtue of selfishness” model of freedom advocated by the Capitalist Libertarians who insist on the productive wonders of hierarchial, wealth concentrating and politically powerful private corporations.

This is a straw man.

I have yet to meet a real libertarian who is in favour of corporatism particularly as large companies are now so inextricably intertwined with government and state.

Libertarians hate Murdoch as much as Cameron. They don’t want Tesco minus the state- they don’t want Tesco at all. Most are dedicated anarcho-mutualists (I just made that one up).

If you want to smoke out one of Sally’s fake libertarian Tories, it is usually enough to ask them their attitude to their neighbour injecting himself with heroin in the garden. If they blink before they say “fine with me” they are fake.

Trying to differentiate between left and right libertarians is a pretty fruitless endeavour because we all believe that the left/right axis is pretty irrelevant. We just want all systems of authority that rely on any element of compulsion out of our lives.

It’s that simple.

“There should be no government restrictions on secondary picketing or how unions organise their strikes. ”

Sure, freedom of association is as impportant to a free society as freedom of speech.

“And unions should not have any immunities from from any losses their activites cause.”

And that’s the kicker. Along with your right to free speech is your duty to accept the consequences of your exercising it. So it is with freedom of association.

For example, most people around here think that the BNP should be legal, even if shunned. But they also think that being in the BNP means you cannot be a police officer (as an example). So, freedom of association, but bear the consequences of who you associate with.

Be in a union? Sure, great. Go on strike? Well, you might be fired you know?

41. douglas clark

Why are good free thinking anarchists being dragged into a debate about libertarianism? As much as there may be a few threadbare ideas about what libertarianism consists of, the philosophy of ‘me’ comes to mind, there are just as many strands of anarchist thought, and they do not usually coincide with libertarianism.

Lets be quite clear here, anarchists would strangle bankers, libertarians would allow them a militia to protect themselves.

@36 Jim,

“Would you support a Political Party who wished to repeal ALL laws regarding union activity, as a gesture of intent, to show that the Government was going to get out of the way of the economy?”

It’s a bit of a strange question. My support for a political party would be based on all their policies. A lot of people would like to see the railways renationalised, but they won’t vote BNP, who favour this, for obvious reasons.

As for unions, they should only be constrained by the same laws as everyone else. No special favours. No special penalties.

As for the rest of your long screed, I can’t say too much. I don’t drive a BMW and I’m not very wealthy. My libertarianism springs from not liking to be told what to do by people who think they know better, but I suspect do not.

What you’re saying seems to suffer from a dose of ‘post hoc ergo propter hoc’, or else maybe you take a Panglossian view that everything’s for the best.

@39 Pagar,

“Trying to differentiate between left and right libertarians is a pretty fruitless endeavour because we all believe that the left/right axis is pretty irrelevant. We just want all systems of authority that rely on any element of compulsion out of our lives.”

Agreed.

38
Quite.

45. douglas clark

A couple of other questions for Martin.

Someone called Anna Raccoon had this to say:

http://www.annaraccoon.com/politics/libertarian-liberties/

Which is almost a John Le Carré exposé of the philosophy behind the philosophy, so to speak.

I, obviously, have no way of determining its veracity, but it is a damn good read.

If it were to be accurate, what would Martin have to say about the state of the whole idea of Libertarianism in the UK?

To me, hush my mouth, it is actually Libertarianism in action. Good people being swallowed up by the bad.

There is zero, nada, zilch to be said in favour of Libertarianism. It is what gets some idiot on the TV to get torn apart by Andrew Neill, for goodness sake!

Sweary blogs do not a political movement make.

46. douglas clark

I see the rather mad, obviously bad, Devils’ Kitchen is back up and running, or stuttering.

You chose.

We should all remember this. It is not just the BNP that are nuts:

http://news.bbc.co.uk/1/hi/programmes/the_daily_politics/8619971.stm

It is worth listening to all of it.

That is who represented Libertarians in the UK.

douglas clark,

Fortunately for me, I have no interest in defending the LPUK (It was, after all, that Anna Raccoon post that led to this article), nor the actions of DK. I will admit that I was pretty upset at the time, because, in a weaker moment in my past, I was an Ayn Rand basher, Friedmanite and, yes, LPUK member.

That was a while ago now. I’ve moved on, and now am affiliated with no party. Politically, I’ve moved on from the Cato Inst/ Adam Smith Institute model of libertarianism to a more left wing one more influenced by the likes of Kevin Carson, Benjamin Tucker, Proudhon, etc.

48. douglas clark

Mr Civil Libertarian @ 47.

You say, (this is an aide memoiré for me)|:

Fortunately for me, I have no interest in defending the LPUK (It was, after all, that Anna Raccoon post that led to this article), nor the actions of DK. I will admit that I was pretty upset at the time, because, in a weaker moment in my past, I was an Ayn Rand basher, Friedmanite and, yes, LPUK member.

That was a while ago now. I’ve moved on, and now am affiliated with no party. Politically, I’ve moved on from the Cato Inst/ Adam Smith Institute model of libertarianism to a more left wing one more influenced by the likes of Kevin Carson, Benjamin Tucker, Proudhon, etc.

Oh. The Kevin Carson, Benjamin Tucker, Proudhon, etc.

My ignorance of these names is a blessing to me

I am sure all three of them will tell us that theft of property is not theft. Or that property, stolen, belongs to the new owner.

Or none of that.

Libertarians are a bit mad, I think. But your mileage varies, clearly.

Libertarianism works…on WoW, Second Life and to a lesser extent, COD:MW….but not in that other thing we call actual life.

THE INTERNET – Home of Libertarian thought for the past 20 years.

@34 Hi Paul, Yes, I am against these and also taxation. However, as a minarchist, some necessary evils have to remain until they can be dismantled rationally, such as taxation. Limited Liability is one that should be due early examination for the removal of State subsidy/protection.

Patent and copyright are also evils but anyone who has laboured trying to invent something new will want to be able to discuss this with third parties without the idea being stolen. Interested to hear how you would see that working efficiently without patents. This is a serious request. I am not “for” them, I am “against” them, but ideologically banishing them Year Zero is not sensible. We need to get from where we are to where we want to be in a rational manner. The one I am unclear on is the “Obligation Free Land Title” which smacks of LVT, which I have not had a decent “where we are now to n years in the future” scenario that does not swap, instead of remove, injustice. “I am happy to rent so you have to be” does not cut it.

Who said anything about preventing people being against discrimination? – what I am against is using State coercion. People can be against discrimination, but the rub is they cannot use force, and in particular, State coercion, on those that are not, which is the point here. That includes using euphemisms such as “the community” and “the people” as fig leaves.

@36 Jim , you make the error presuming the rise in living standards would not have occurred, or that they could ONLY have occurred, which is poppycock.

BTW healthcare and various provisions for workers pre-dated State Welfare. You do not see much now as The State, like most organisations, seeks monopoly but in its case without a higher power or legal constraint to prevent it running riot. Mutual assistance was all killed off, brutally. I do believe that certain “natural monopolies” are a necessary evil, such as sewerage systems and street lighting, but not the power stations that energise them.

Your talk of the middle class getting wealthy from what? The spending of taxes that were first taken from everyone? You do sound like you believe in the Free Money Tree! You have clearly shown how “redistribution” by the State, and a Big State at that, is a clumsy affair almost impossible to get anything other than very wrong. @37 deals with the issue of unions – Rule of Law should not have favourites in either direction.

@51 “ONLY occurred” -> “ONLY occurred with State action”.

@45 Clearly douglas clark has not internalised the concept of “innocent until proven guilty” and appears to presume that Libertarians are a hive minded monolithic collective. Needs no further comment.

@ Douglas Clark

OK, I realise that the Libertarian Party is a political party and the pathetic rules of the party game dictate that, when your political opponents seem to be in trouble, it is incumbent upon drones from other parties to try to twist the knife.

But posting a couple of links on a thread such as this does not make you Machiavelli, even though you lack have the courtesy and integrity to link to the responses of those you attack.

http://lpuk.org/2011/04/party-announcement/

http://lpuk.org/2011/04/the-way-forward/

It is not at all unusual for small political parties to have these kinds of problems- what matters is how they are dealt with. At the moment their is an unsubstantiated allegation that is under investigation.

And casting stones in a glass house is perhaps unwise when names like Woolas, Devine etc are still fresh in the memory.

@45 Douglas Clark

I loved the link! Just how stupid can someone be, and a lawyer too? My prejudices have been confirmed, second homes in Bergerac are essential for libertarians.

What most irks is that such stupid people have so much money to waste when people like me could make better use of it. Perhaps I should join the Libertarian Party?

@45 thats the second time I have seen that…hehehe…ah bless…well at least the man is having a go.

whoops @46

58. Shatterface

Interesting article. Many of us migrated to left-libertarianism – or anarchism in my case – from a belief in socialist economics but a distrust of the State as a means of redistributing wealth.

States under capitalism necessarily represent the needs and values of capitalism but even under State socialism the State has a surplus of power.

The State is always authoritarian to one degree or another.

@49 “Libertarianism works…on WoW, Second Life and to a lesser extent, COD:MW….but not in that other thing we call actual life.”

So true, for Fabians have no option but to run its “games” in an environment into which people are thrust without choice and can only “log off” by dying, being killed or committing suicide.

There is a Fabian online game…well, there would be if someone else would fund the development, write it, buy the servers, operate it, fix the bugs* and then compel people to sign up by pointing a gun at their heads and/or mortgaging the labour of their grandchildren.

Nah, don’t bother, just do what you did in the real world – create Malware and take over the systems via a series of well-concealed trojans.

The voluntarist/mutual “Left” and Libertarians are closer ideologically than most think, IMHO. It mostly hinges on consent, pluralism and, the kicker, “how/how fast to get there”.

* a Sisyphean task

I always though “left libertarians” were sometimes referred to as anarchists and not communists?

@11
“Which is why I’m a classical liberal, not a libertarian. It’s all right there in Smith, how (in his time, the guilds, more recently union closed shops, today large companies) those organised and with access to political power will use that access to benefit themselves”

Classical liberalism is dead. Even the biggest exponents of classical liberalism, the Liberal Party, abandoned it by 1917. Anyone who declares themselves to be “classical liberal” is either a hopeless and dangerous romantic or completely naive. I find it bizarre that people who declare themselves to be “classical liberals” do so without any understanding of history and how that economic model contributed to the grinding poverty of 19th century Britain. Classical liberals are no different to right libertarians and it is dishonest to claim otherwise. Classical liberals want a smaller state. They also embrace terms like “deserving” and “undeserving” poor.

Social Darwinism is also associated with classical liberalism.

Make of that what you will.

I find it bizarre that people who declare themselves to be “classical liberals” do so without any understanding of history and how that economic model contributed to the grinding poverty of 19th century Britain.

19th century Britain experienced the fastest growing prosperity that had ever been seen, mostly thanks to classical liberalism.

62. douglas clark

Mr Thornhill @ 53,

@45 Clearly douglas clark has not internalised the concept of “innocent until proven guilty” and appears to presume that Libertarians are a hive minded monolithic collective. Needs no further comment.

What’s your problem? The information I have provided here is out there on the internet. The ball is in your court to refute it, if you can.

Me? Frankly I think that LPUK is two men and a dug, and the dog is the one with brains.

“19th century Britain experienced the fastest growing prosperity that had ever been seen, mostly thanks to classical liberalism.”

“Mostly” is a bit strong, no? Two other factors which immediately spring to mind are “technological change” and “owning a worldwide Empire”, after all.

64. douglas clark

pagar @ 54,

Do you even know what party I am a member of? Why the heck would an SNP member – that’s a clue in case you are hard of thinking – such as I give a toss about an outfit with the credibility of LPUK?

Frankly, if it wasn’t for the fact that LPUK are the joke that keeps on giving, I wouldn’t give a damn.

@61
“19th century Britain experienced the fastest growing prosperity that had ever been seen, mostly thanks to classical liberalism”

Prosperity for whom? Not those toiling away in the factories and the mills – that’s for sure.If classical liberalism was such a success, why didn’t Disraeli embrace it? Why was it dead by 1917?

Your narrative holds no water.

66. douglas clark

Incidentally pagar @ 54,

May I quote this from the LPUK threads which you so kindly provided?

However, following these allegations, Andrew has relinquished his position pending a full investigation by the NCC of the party into what has happened. Libertarians believe in the rule of law and this is entirely the correct way for us to proceed.

In due course, and depending on the results of the investigation, we will also find the correct way forward.

Someone called Onus Probandy said in response:

This is the second press release of the day from LPUK, so I’m quite certain there is mass panic going on at the top.

I’m disappointed in this as a response. It says absolutely nothing and could have come from any political party facing difficult times. In fact, it could have come from a union leader – “stand together brothers, and we shall not let these petty smears distract us from our true course”. Meaningless platitudes.

Where is the publication of the accounts?

Where is the publication of emails?

Where is, in fact, any disclosure to refute any of the allegations at all?

I am not interested in an “investigation” performed by the very people who elected the accused party. To regain any credibility at all, real factual information has to start flowing, and flowing quickly. If there has been wrongdoing or mistakes, stand up and say so. LPUK members joined wanting a party different from the standard; so deal with this in a different way from the standard. Do not “learn lessons”, or attempt weasel words. Facts, and facts alone are going to get LPUK out of this, good or bad.

He or she is only wrong in one respect. Mass panic rarely applies to a single dug.

@63
Exactly

68. douglas clark

damn your lack of an edit function!

63 – The Empire was probably a net drain on the British economy in the 19th century. It certainly was in the 20th. And it’s difficult to separate the technological revolution from the general economic climate.

Douglas @64

Doesn’t really matter which party you belong to.

From today’s Scotsman

Last night the party officially denied the meeting, but it is known that officials are concerned about the image of the SNP portrayed by “cybernats” – anonymous bloggers – after it was engulfed in scandal over a smear campaign at the weekend.

It was revealed that Mark MacLachlan, who until Thursday was constitution minister Mike Russell’s office manager, had been running a blog attacking members of other political parties and the media. Mr MacLachlan made false allegations and used abusive language to attack members of opposition parties.

He is now facing legal action from a number of politicians.

That scandal followed the unmasking of another cybernat, architect Bruce Newlands, who used the name Wardog, and quit his job at Robert Gordon University after he called Scottish Secretary Jim Murphy “a c***” on his blog.

http://news.scotsman.com/scotland/Blogged-down-in-scandal-SNP.5871028.jp

So, Douglas, You’re a wannabe cybernat.

Good luck with that……..

71. Planeshift

“The State is always authoritarian to one degree or another.”

Those degrees have such a massive influence over quality of life that the above statement is meaningless. Both the US and North Korea can be said to be “authoritarian to one degree or another” but any rational analysis would conclude the differences between the 2 countries are so vast that it is stupid to place them in the same category. Unless you think taxation is as great an evil as gulags.

Adam Smith and other exponents of classical liberalism claimed that free trade would lead to world peace. Would any of those people who claim to be classical liberals like to tell me how this was achieved in the 19th century?

Prosperity for whom? Not those toiling away in the factories and the mills – that’s for sure.If classical liberalism was such a success, why didn’t Disraeli embrace it? Why was it dead by 1917?

1. They were a hell of a lot richer in 1899 than they had been in 1801.
2. As Prime Minister he did. Having advocated protectionism as a backbencher, he recanted when in power and followed an orthodox free trade position.
3. You’ve not read Dangerfield? Tut.

Or, being less flippant (and addressing a point not raised by Dangerfield) why do you think the advocates of a small state, free-trade economy were out of favour in 1917? Do you think maybe the fact that Britain was involved in a total war that had raised public expenditure more than five-fold had something to do with it?

74. douglas clark

pagar,

You should try reading Mark MacLachlans rather excellent ‘Universality of Cheese’.

Here you go:

http://the-universality-of-cheese.blogspot.com/

Two points.

Firstly the article you quote is from 01 December 2009. Quite deep digging to come up with that one, eh, pagar?

Secondly, I certainly am a cybernat and not ashamed to admit it. What are you, a cyberlibertarian or summat?

Adam Smith and other exponents of classical liberalism claimed that free trade would lead to world peace. Would any of those people who claim to be classical liberals like to tell me how this was achieved in the 19th century?

You show me an example of one free trade nation declaring war on another in the 19th century, and I’ll try and explain it.

@73
“1. They were a hell of a lot richer in 1899 than they had been in 1801.
2. As Prime Minister he did. Having advocated protectionism as a backbencher, he recanted when in power and followed an orthodox free trade position.
3. You’ve not read Dangerfield? Tut.”

1. Who is “they”? Furthermore, what do you mean by the word “rich”? How ere the working classes “richer”?
2. Evidence please
3. Why? Would it make any difference?

“Or, being less flippant (and addressing a point not raised by Dangerfield) why do you think the advocates of a small state, free-trade economy were out of favour in 1917? Do you think maybe the fact that Britain was involved in a total war that had raised public expenditure more than five-fold had something to do with it?”

It was out of favour before 1917. The Liberals arrived at their decision late in the day.

77. douglas clark

cyberlab, cybercon, cyberlib, cybergreen, cyberfascist, cyberfruitloop. After that, it really doesn’t have enough, how can I put it, agency anymore…

It is a bit like sticking quantum in front of a dish washing product. It only makes the ad man look a bit thick.

@75

Logical fallacies, eh? That isn’t good. Please try again. How was “world peace” achieved during the classical liberal phase?

1. Who is “they”? Furthermore, what do you mean by the word “rich”? How ere the working classes “richer”?
2. Evidence please
3. Why? Would it make any difference?

1. Um, the factory workers you were talking about. They were richer because… they earned more money? Had a higher quality of life? Than they had in 1801, of course.
2. Evidence for Disraeli not re-introducing protectionism as Prime Minister? What sort of evidence are you after? Does the absence of legislation imposing tariffs or trade barriers count?
3. You are asking why ‘liberalism’ as a movement died out in Britain. There is a seminal text on precisely this question. I’m suggesting that if you’re interested in this question, you read the book. Or a synopsis if you can’t be bothered with the whole book.

Logical fallacies, eh? That isn’t good. Please try again. How was “world peace” achieved during the classical liberal phase?

It wasn’t. World peace has never been achieved under any system. However, and since you’re asking, the period of British classical liberalism is generally regarded as spanning 1815-1914. The other name for this period is the Pax Britannica.

On a more general note, I’m not entirely certain of what point you’re trying to make. Are you arguing that trade protectionism and higher state spending are better for economic growth and less likely to lead to war than free trade and a smaller state? Or is this just a ‘nothing’s perfect’ sort of attitude?

@79
“1. Um, the factory workers you were talking about. They were richer because… they earned more money? Had a higher quality of life? Than they had in 1801, of course”

That’s laughable and it’s another in a series of red herrings that are produced by apologists for laissez faire capitalism. It is clear that they were not “richer” in any meaningful sense of the word nor did they have a “higher quality of life”. That’s a narrative and as such it does not stand up to scrutiny. Perhaps you should try reading some texts on the social history of Britain?

I’m busy and I don’t have time to deal with the rest of your post but I will do so later.

Just quickly

“It wasn’t. World peace has never been achieved under any system. However, and since you’re asking, the period of British classical liberalism is generally regarded as spanning 1815-1914. The other name for this period is the Pax Britannica”

Ah, so now you’re contradicting yourself; there wasn’t “world peace” but a sort of peace that existed under the British imperial heel. That isn’t quite the same thing. Is it?

It is clear that they were not “richer” in any meaningful sense of the word nor did they have a “higher quality of life”. That’s a narrative and as such it does not stand up to scrutiny. Perhaps you should try reading some texts on the social history of Britain?

Incomes were higher, infant mortality was lower, life expectancy was higher, earning power was higher. Should I go on? Under any development index you can think of the people of Britain were better off at the end of the 19th century than at the beginning. It wasn’t an equal society, and the rich were much better off than the poor, but it’s simply unhistorical to say that the working classes were worse off at the end of the 19th century.

Ah, so now you’re contradicting yourself; there wasn’t “world peace” but a sort of peace that existed under the British imperial heel. That isn’t quite the same thing. Is it?

As I said, there has never been such a thing as world peace. But that’s a pretty ineffective criticism of free trade. You can certainly posit that nations that practise free trade (and democracy) are much less likely to declare war on each other than countries that don’t.

83. douglas clark

TimJ @ 82,

Genuine question. How much of that improvement was down to Empire?

It is commonly accepted that the first half of the C19th was pretty miserable for most people, but not much more miserable than most of the rest of history. Just miserable in a new way, which people were not used to.

The second half of the C19th was better, but even by 1870 JS Mill, somebody who knows something about economics and the period and is no anti-capitalist, was not sure that life was much better for the average worker. But 1870-1914 was a kick ass period for pretty much everyone (apart from Africans).

Genuine question. How much of that improvement was down to Empire?

Not a lot. The Empire was never really run as an economic concern (except briefly and ineffectively in the immediate post-war period). Industrialisation and the associated increases in productivity were what did the trick.

“Would any of those people who claim to be classical liberals like to tell me how this was achieved in the 19th century?”

Well, 1815 (after the crushing of Napoleon’s protectionist Empire) to 1914 was actually pretty peaceful in Europe. Bit of Prussian/French argy bargy here and there, but ……

“That’s laughable and it’s another in a series of red herrings that are produced by apologists for laissez faire capitalism. It is clear that they were not “richer” in any meaningful sense of the word nor did they have a “higher quality of life”. ”

Well, here’s the numbers.

“In 1901, £1 0s 0d from 1801 is worth:

£0 14s 2d using the retail price index

£1 17s 0d using average earnings”

Note that money become worth *more* during the 19th century in the UK.

In terms of what money could buy one pound of the average wage went from 14 (1901) shillings to 37 shillings. That is, the real value of the average wage doubled/near tripled over the century.

That’s pretty good going and something which hadn’t actually happened in England since the Black Death (which raised wages by killing half the workforce).

Bugger:

“Note that money become worth *more* during the 19th century in the UK.”

That’s not right, is it? Still the major point stands though. Average wages doubled/tripled over the century.

89. Shatterface

‘Those degrees have such a massive influence over quality of life that the above statement is meaningless. Both the US and North Korea can be said to be “authoritarian to one degree or another” but any rational analysis would conclude the differences between the 2 countries are so vast that it is stupid to place them in the same category. Unless you think taxation is as great an evil as gulags.’

If I thought taxation was just as evil as gulags I wouldn’t have said ‘to one degree or another.’ Its a graduating scale.

And I wouldn’t put North Korea and the USA in the same category as the former is State socialism’s Dictatorship of the Proletariat in action. Its the logical outcome of Marx’s authoritarian perversion of true socialism.

For some, it seems, there’s nothing scarier than
A powerless libertarian.

63
And, imo, most importantly, the rest of Europe was embroiled in revolutionary conflict, no competition does tend to help a national economy. Note how quickly The Corn Law was introducted after the 1815 settlement, not very liberal.
79
The average life expectancy for the masses was around 40years in the mid-19th century, some quality of life.
The scramble for Africa, paid for by taxation from all, did make a few richer.
Liberalism only ever existed in political rhetoric, the UK was quite happy to embark on said imperialism which was upheld by a whole different set of theory.
84 JS Mill, like Marx, hated the relations within capitalism, he favoured worker co-operatives.
88 But, paradoxically, the standard of living for most families fell as women and children were legislated out of the workforce

Possibly the most thought-provoking piece I’ve ever read on LibCon, and I agree wholeheartedly, especially with the contention that ‘free market’ capitalism is an oxymoron; that capitalism is indeed privatised feudalism.

I haven’t had time to follow the whole debate in the comments, but I’ll add this: I don’t think left-libertarians need to advocate doing away with the state, or its concomitant taxes. This would be a naive interpretation of anarchism. Instead, we should seek to democratise the state by inverting the existing power relations between individuals and the state. The state should become our servant, not our master: a collective manifestation of individual political wills, in the way that free markets are supoosed to be a collective manifestation of individual material wants. This does not mean doing away with all the structures of the state, such as the NHS, even the police, etc.

In short, the way to realise a left-libertarian vision of society is to think in terms of democratisation, rather than abolition of the state.

93. douglas clark

Chris Whitrow @ 92,

We could start that by having a constitution that placed the individual above the collective.

There are people – with whom I disagree upon much – that make the rather obvious and correct point that the State is there to serve us, not the other way around.

The famous phrase:

“Ask not what your country can do for you, but what you can do for your country”

rather misses the point. It should neither be about a subservient individual nor an overweening state. The contract between us and our bureaucracy should be about an equitable balance.

Roger @ 51

You say that our post War prosperity could or would have happened without State intervention anyway, but you have not provided any evidence of that. In fact when I look around the Globe I see that the prosperous Countries were ‘Big State’ Countries, Europe of course, the North America to lesser extent, and the ex Commonwealth as well. All roughly ‘big’ or at least ‘bigger’ State Countries. Not only that, but those who look like small State Countries got extremely rich of our backs as well. Isn’t it strange that those Countries with least regulation all flock to trade among the large State heretics?

On the other hand those with small States, most of Africa, Asia and South America appear to have large swathes of their population living in dire poverty. Again looking at what is happening, we see that were the State is shrinking we see a rise in poverty, most notably in the US of A but parts of Europe too.

So far the best Libertarian Country in World appears to be Somalia, though to be fair, they too ‘trade’ with the State run Countries to, if we can call piracy ‘trade’ of course.

I am aware of ‘worker’ healthcare systems, but none of them would ever have become ‘universal’ healthcare.

Your point regarding unions misses one vital point ‘history’. The British Government introduced specific laws to prevent specific acts of union activity, not Company behaviour, but union activity.

The thing about middle class expansion based on a growth in the civil service is not that the taxation was the end of the deal, far from it. The civil service required educated people, thus increasing demand for educated people that drove a middle class expansion The tax was not ‘spent’ once, it was recycled, time and time again, thus expanding the economy. Isn’t that what an economy is, no?

On the other hand those with small States, most of Africa, Asia and South America appear to have large swathes of their population living in dire poverty.

If you think African states are most notable for their small-state embrace of classical liberalism, I suggest you go to Africa and have a look for yourself.

Having now read some more comments, it amazes me that the 19th century appraoch to laissez-faire capitalism is being defended in such glib terms. Of course, people were ‘richer’ in 1901 than in 1801, measured purely in terms of the amount of goods and services they could buy. The industrial revolution made sure of that, powered by technological advances and the rapacious exploitation of a global free trade area created by the British Empire. Of course, capitalism helps to drive this kind of growth, but as JFK said, GDP measures everything except that which makes life worth living.

The question is: What kind of growth is capitalism driving now, and do we need it any more?

97. DisgustedOfTunbridgeWells

So far the best Libertarian Country in World appears to be Somalia, though to be fair, they too ‘trade’ with the State run Countries to, if we can call piracy ‘trade’ of course.

There was Saipan, a virtual utopia before the pesky state got involved, it had living standards and per capita GDP on a par with with Luxembourg it did.

Or it was a shit hole blighted by low wages, child prostitution and forced abortions, one of the two.

I am aware of ‘worker’ healthcare systems, but none of them would ever have become ‘universal’ healthcare.

Isn’t that where Bevan got the idea for the NHS from?

@ Douglas Clark

We could start that by having a constitution that placed the individual above the collective.

There are people – with whom I disagree upon much – that make the rather obvious and correct point that the State is there to serve us, not the other way around.

A more constructive contribution…….

We do need a proper constitution to limit the powers of the state and a bill of rights to ring fence the freedoms of the individual.

However you may have noticed that we have neither.

@ Chris Whitrow

Of course, people were ‘richer’ in 1901 than in 1801, measured purely in terms of the amount of goods and services they could buy.

How would you measure it?

We can’t go back and ask the average worker in the dark satanic mills if they are sure they wouldn’t have been happier out in the fresh air hitting the ground with a stick to try to grow something.

But the fact they took the mill job suggests they believed they wouldn’t be.

Chris Whitrow,

Having now read some more comments, it amazes me that the 19th century appraoch to laissez-faire capitalism is being defended in such glib terms. Of course, people were ‘richer’ in 1901 than in 1801, measured purely in terms of the amount of goods and services they could buy.

God, how awful

Tim j @ 95

What we see in in large areas of Africa is de facto Libertarianism. We see huge areas where the is no State and certainly nothing like farm subsidies, taxes and above all else, no pesky welfare State either.

101. Shatterface

‘In short, the way to realise a left-libertarian vision of society is to think in terms of democratisation, rather than abolition of the state.’

Democratisation isn’t enough because it can easily become tyranny by numbers.

There has to be recognition that their are areas of human life entirely divorced from control by other people (e.g. what I do with my body is my own concern so long as I harm nobody else – or at least nobody who does not give me their uncoerced consent); democratic decisions should be made locally; and they should be weighted in favour of those who will be most effected by those decisions.

102. Planeshift

“If you think African states are most notable for their small-state embrace of classical liberalism”

Philosophically no, but most sub-saharan states lack the ability to exercise authority beyond a radius of few KM from major cities and major highways (even the later is problematic for some). Hence it is no suprise that more traditional forms of authority such as clans, warlords, religious authority, organised crime, etc are effectively the state in those areas. The central state may say that X or Y is against the law, but they rely on those local institutions to enforce it, which many end up not doing if it conflicts with their own interests.

Which is the central point really about libertarianism (or anarcho capitalism to be more specific, the point doesn’t apply to minarchists) – do away with the state and you don’t end up with free market utopia, you end up with warlords, religious fundamentalists, organised crime etc competiting for power in the resulting vaccum – none of whom can protect liberty in anything approaching the way the modern democratic state can do.

Having now read some more comments, it amazes me that the 19th century appraoch to laissez-faire capitalism is being defended in such glib terms. Of course, people were ‘richer’ in 1901 than in 1801, measured purely in terms of the amount of goods and services they could buy. The industrial revolution made sure of that, powered by technological advances and the rapacious exploitation of a global free trade area created by the British Empire. Of course, capitalism helps to drive this kind of growth, but as JFK said, GDP measures everything except that which makes life worth living.

Jesus, what a load of claptrap.

People living in Britain in 1901 were wealthier than in 1801 because productivity in Britain was higher in 1901 than it was in 1801, empire had next to nowt to do with it.

If Niall Fergusson is to be believed then Empire made the average world citizen wealthier by helping to maintain peace, open borders and accelerating the global division of labour.

If Patrick O’Brien is to be believed then Empire didn’t make the average UK citizen much better off at all. The costs of enforcement = the benefits of empire. Only the distribution of income changed. i.e. wealthy investors in the East India company were better off, and workers paying higher taxes to pay for the Royal Navy were worse off.

1801 was horrible, getting to 1901 was a horrible experience, but 1901 was a much less awful place to live by almost every concieveable measure going.

Can people please stop arguing against straw man libertarians?

Arguments are only interesting if directed against the strongest opposition. Otherwise you are doing little more than signalling to others that you’re on their side against some other side.

Jim,

What we see in in large areas of Africa is de facto Libertarianism. We see huge areas where the is no State and certainly nothing like farm subsidies, taxes and above all else, no pesky welfare State either.

If a prerequisite for a libertarian ‘state’ is mutual respect for the freedoms and rights of individuals, then you are talking nonsense.

106. douglas clark

pagar @ 98,

My contributions on here are always constructive. Of late they have been directed at the idiocy that is the UKLP.

It would be a tad unfair for you, anyone really, to spoil my fun. Where is the brilliant author of the ‘devils kitchen’ when you want him?

Let us not forget that Chris Mounsey was your leader and made Nick -fat boy- Griffin look altogether reasonable.

That’s what happens when you believe your own swear words and think that a few sycophants actually equals a charter for your ego.

I would welcome any comments he may have to say on here about just how an utterly messed up a human being such as his good self gets to appear on the TV.

______________________________

Just to add, what’s in it for you pagar?

Your entire political party, all 74 of you, have been shown up as rubbish. Why do you even try?

UKL @ 105

Surely the only thing required as a prerequisite for a libertarian ‘state’ is the almost compete absence of the State? and if all those ‘Libertarian’ bloggers are to be believed, then all you really need is a complete absence of the Welfare State. Well look no further tan Africa for that. Everything is there.

Complete deregulation?
No Welfare State?
No labour laws?
Low Wages?
All there.

That is pretty much what they want and guess what? Instead of people all moving from poverty to wealth and taking up any of the endless jobs that an unregulated market will create. It seems that for some reason, even though there is no welfare system to hold people back, no-one wishes to work in coffee shops, KFC, McDonald’s, Tescos and all the other jobs that we are told people would happily flock to, instead they beg, steal, prositute themselves, sell drugs and sift through rubbish tips.

Funny that. Could it possibly be that very little jobs are created in areas of mass poverty? Could it be that ‘low’ wages are not we these people need, but good wages to stimulate the economy to provide others with jobs?

@ left outside / 103:

Empire had plenty to do with British productivity being higher in 1901 than in 1801. Where did the raw materials come from? Unless I’m mistaken, cotton doesn’t grow in Lancashire. What about the access to overseas markets required to sustain growth and economies of scale? No simplistic cost-benefit analysis can quantify the value of these things, but you’d have to be very naive indeed to think that the Empire was not a factor in Britain’s industrial expansion.

Mostly, it was technology and fossil fuels, though: the steam engine, coal mining, railways. Of course, capitalism puts these resources into use, along with the large supply of surplus labour created by population growth and the ‘Acts of Inclosure’.

Hence, @pagar / 98 and @ukliberty / 99:

Most factory workers had no choice but to work in the dark satanic mills of the Industrial Revolution, because they had been forced from the land. This is starkly illustrated in the poem, ‘The Dalesman’s Litany’ by Frederick William Moorman, written c. 1900:

http://www.yorkshirefolksong.net/song_database/Occupational/The_Dalesmans_Litany.86.aspx

But I suppose from your cosy 21st-century armchairs, you know better than a Yorkshireman writing at the turn of the 20th century.

Jim @94

“You say that our post War prosperity could or would have happened without State intervention anyway”

No I do not, I question YOUR presumption

“when I look around the Globe…”

There is strong empirical proof that it is not “democracy” or a big state that brings wealth and contentment, but Rule of Law.

And the rest of your post is also correlation and not causation. The shrinking state relied on the wealth of people and if it shrinks when that wealth cannot bear to support the tumour, is it any surprise poverty rises? So-called “wealth” in big states is often just the fruits of a mortgaged future. When that future is encountered, it is payback time.

“So far the best Libertarian Country in World appears to be Somalia”

Oh, please, not that old canard again. Stateless is not the same as Libertarian.

“I am aware of ‘worker’ healthcare systems, but none of them would ever have become ‘universal’ healthcare.”

Do you have evidence for this? Nope. None, but I will not ask for it as nobody could have. The concept of “universal’ healthcare is just part of your framing of the issue. Compulsory catastrophic provision is not something I am against, but the systemically dysfunctional monopoly funded by coercion that is the NHS is another matter.

“The civil service required educated people, thus increasing demand for educated people that drove a middle class expansion”

Yes, a non-productive middle class who dug themselves in and had every incentive to grow the organisation, being vested interests.

“The tax was not ‘spent’ once, it was recycled, time and time again, thus expanding the economy. Isn’t that what an economy is, no?”

Your statement above is beyond wrong. No level of taxation “expands the economy” in a meaningful way, i.e. wealth creation. It adds friction, diverts resources. It has to be taken from by force before it can be given to.

110. douglas clark

It is vaguely amusing that neither Gordon Brown nor Chris – the X man – Mounsey has handed in their superpowers,

Their silence is a bit deafening.

That is not, obviously to compare Chris Mounsey, lad of the sweary epitaph with Gordon Brown, biggest failure I can recall. Oops, there was Margaret Thatcher, but she makes Chris Mounsey cream himself in his pants

It seems to me pagar, that you ally yourself to idiots.

But, then, I would say that. Me being an SNP activist and not a tit like the invisible Mr Mounsey….

Jim,

Surely the only thing required as a prerequisite for a libertarian ‘state’ is the almost compete absence of the State?

As I said, that’s not my understanding, which is that mutual respect for freedoms and rights is prerequisite. Having refreshed my memory with a cursory Google search, I’ll stand by that.

Chris Whitrow,

But I suppose from your cosy 21st-century armchairs, you know better than a Yorkshireman writing at the turn of the 20th century.

Well, if an ex-professor of English said so, it must be true

113. douglas clark

Roger Thornhill @ 109,

There is a debate to be had. Not with you, obviously.

“That is, the real value of the average wage doubled/near tripled over the century.”

Not bad. Growth in real wages between 1873-1913 were 1.01% per year on average, the highest in centuries.

After 1913, the influence of classical liberalism declined and that of social democracy rose. So what happened to real wage growth?

Growth in real wages between 1913-51 was 1.46% per year (during which period the state grew rapidly in size), and during the high point of the Big State and social democracy between 1951 and 1973 it was 3.16% per year.

Then classical liberalism rose again in influence, and social democracy declined, and between 1973 and 2001, real wage growth fell back to 1.23% per year.

A tentative conclusion – classical liberalism better for real wage growth than feudalism, but not as good as social democracy.

http://fds.oup.com/www.oup.co.uk/pdf/0-19-928058-4.pdf

Well look no further tan Africa for that.

*Cough*

108
Comparing wages and productivity between 1801 and 1901 is almost impossible due to the different demographics and types of labour.
Firstly, in 1801, industrialization needed another 50 years before it was considered to be complete. The countryside still had the largest population of labour and, if you read Hardy, you will know that most wages included things like board and lodgings and land rights. Also labour tended to be seasonal so that many waged labourer also produced for their own consumption. All the family, including children, were part of the production process.
Between 1801 and 1901, the UK population had increased four fold and in that time legislation such as The Factories Act and The Education Act had taken children out of the production process, so any comparison between family income is difficult, suffice to say that whilst individual men may have increased their wage by selling labour, the family income was likely to have declined.

Empire had plenty to do with British productivity being higher in 1901 than in 1801. Where did the raw materials come from? Unless I’m mistaken, cotton doesn’t grow in Lancashire. What about the access to overseas markets required to sustain growth and economies of scale?

You don’t need an empire for trade. So the benefits would be marginal, are lower tariffs worth the cost of the gunships? Tough calculation.

People in the South in the US gained from trade too remember, it wasn’t just exploitation (Although, sadly they did so at the expense of Africa Slaves, but slavery is seperate to empire).

Pomeranz offers a more subtle reading of the advantages of empire than you do, so do read his book “The Great Divergence.” Empire helped overcome some binding constraints, but it is in no way the main reason for Britain’s success.

No simplistic cost-benefit analysis can quantify the value of these things, but you’d have to be very naive indeed to think that the Empire was not a factor in Britain’s industrial expansion.

Yes it is a complicated subject, I like your plan a lot. Ignore rational enquiry because its hard, instead rely on guess work and ad hominem.

Roger @ 109

Your statement above is beyond wrong. No level of taxation “expands the economy” in a meaningful way, i.e. wealth creation. It adds friction, diverts resources. It has to be taken from by force before it can be given to.

The ‘Government’ spends 150 billion quid on welfare every year. Are you seriously suggesting that the government’s ‘clients’ spend that and not a single private sector job is created? Not a single pizza is delivered from a warehouse to a shelf and not a single job is created within a supply chain? Not a single bookie is kept in business, nor a pub or bingo hall?

All that money given to squaddies, firemen, teachers, diversity officers, not a penny spent on a cars, houses, holidays, TVs, funerals, hotels, five course meals? No-one in the public sector creates or even contributes to a single private sector job? And what of those recipents of that public sector spending? None of that money gets recycled through the economy either? Nothing like that at all?

The only people creating jobs is money earned in the private sector? So Sweden, Denmark and Germany are all failed States, noneof whom have a private sector worth mentioning because the publc sector there have skinned the entire lot?

@60 buddyhell: “I find it bizarre that people who declare themselves to be “classical liberals” do so without any understanding of history and how that economic model contributed to the grinding poverty of 19th century Britain.”

Except it didn’t.

Classical liberalism was primarily a response to the grinding poverty. It grew as part of the fight against the Corn Laws, a piece of state interventionism which was promoted in the name of “the good of the nation”, “the greater good” and other such piffle, but which forced those working in the mills to buy over-priced, poor quality grain.

“the family income was likely to have declined.”

Snigger.

OK, try it out. Go find the figures. I’d be fascinated to see you try.

Please do find the numbers that show that family income in 1801 was higher, in the UK, than family income in the UK in 1901.

No, not what you’ve already given us, your chain of reasoning. Find the numbers to show that it did work out that way.

I’ll give you a hint though. Given that calories consumed were higher at the end of the century, I think you’ll find it terribly tough to do so.

Jim@118: “The ‘Government’ spends 150 billion quid on welfare every year. Are you seriously suggesting that the government’s ‘clients’ spend that and not a single private sector job is created?”

I think what he’s saying, quite reasonably, is that the 150 billion quid isn’t new wealth magically created. It is 150 billion taken from people who may have spent it differently.

In substance, it’s no different to me saying that, if you take £10 out of my wallet when I’m not looking and spend it, you aren’t magically creating wealth or expanding the economy, because if you hadn’t taken it, I would have spent it anyway.

122. Richard W

Wages and wealth only matter for what one can buy with the wages. Nathan Mayer Rothschild was one of the richest men of the early 19th century and died in his fifties of an infected abscess. A minimum wage worker can now buy an antibiotic costing less than an hour of his labour that would heal the same affliction. Which one is wealthy?

Without calories we will die. A minimum wage worker now can earn vastly more calories from their labour than any skilled workers at the beginning of the 19th century. Moreover, the workers at the end of the 19th century earned more calories for less work than they did at the beginning. One only has to look at the huge expansion in travel and leisure throughout the 19th century to know workers had more disposable income. Look at the huge explosion in sports clubs during the late 19th century. It was during this period when most of our football clubs were formed. Workers had higher real wages and the service and leisure sector grew to offer them something to spend their incomes on. No one would deny that it was not hugely unequal and many people lived in both absolute and relative poverty. However, most people were better off at the end of the century compared to the equivalent person at the beginning.

What a remarkable achievement in the post-WW2 period to take the workers of the UK who in 1950 enjoyed the highest average wages in Western Europe, and within just over two decades they had the lowest average wages. Their real wage had grown but every one else had grown faster. No wonder the 1970s were a period of industrial strife. British workers were falling behind and they knew it.

@ Douglas Clark

I compliment you on bringing something constructive to the debate for a change and you immediately revert to ad hominem attacks. No doubt you dug out the manual from that Cybernats “how to be a bully boy on the net” course you went on……….

Put it away again because the performance is not impressive.

@ Jim

The most libertarian country currently is not Somalia but…….. Belgium. They haven’t had a government for about a year and guess what.

Nobody’s noticed.

Another great example of the pro libertarian bullshit from last week in Washington. You can not make this stuff up.

“Toward the close of the vote on the RSC proposal, the Democrats started switching from “no” votes to simple declarations that they were “present.” As a result, it looked for a few moments like the RSC proposal was going to pass—putting the House Republicans on record in support of the sort of sweeping cuts in government programs that the GOP’s more libertarian members imagine are necessary. That’s quite distinct from the scheme advanced by Ryan, a key backer of the 2008 bank bailout, to begin steering all that Social Security, Medicare and Medicaid money to Wall Street, speculators and profiteers who are his political base. Ultimately, 172 Democrats voted present.

That meant that the RSC plan had to be blocked by Republicans who claim to be anti-big government conservatives. And so it was, as key Republicans such as Rules Committee Chairman David Dreier, R-California, and Washington Congresswoman Cathy McMorris Rodgers, another member of GOP leadership team, led the race to switch votes. When it was clear there were enough Republican votes to block the bill—at a point where 120 GOP memners have voted “no” to 119 who had voted “yes”—Ryan started screaming to the presiding officer: “Shut it down!”

Suddenly Paul Ryan became Big Brother.

The Budget Committee chair was desperate to close the vote before any more Democrats could switch from “no” votes to those declarations of “present.” (Sixteen Democrats were finally record as voting “no.” If just two of them had cast mischievous “yes” votes while the rest switched to present, the Republicans would have been stuck with a plan that made drastic cuts to government programs, but that did not so smoothly implement Ryan’s scheme for a further redistribution of the wealth upward.) “Shut it down!” screeched Ryan. “Shut it down!” The Wisconsin congressman was determined to stop the voting process immediately. Big Brother was not about to lose control of the process he had rigged to deliver for his political benefactors. He needed to prevent a bold act of dissent that exposed his hypocrisy. And he succeeded. But not without revealing himself as an authoritarian who was not about to let his best-laid plans be upset by an act of creative rebellion.”

@124 There’s a tea-party website I like to keep an eye on, and this incident is noticeably missing from all its recent postings, except for a brief “Democrats were defeated by Ryan’s bill passing”, with no mention whatsoever of republicans largely alone in voting down one of their own amendments. But then what should I really expect from a heavily moderated website?

Pagar @ 123

Yes, but Belgium’s civil service is still in place and of course the levers of State are still being pulled and pushed. Once that all goes and the ‘State’ rather than the ‘Government’ stops, then you may have a point.

Paul Locket @ 121

I think what he’s saying, quite reasonably, is that the 150 billion quid isn’t new wealth magically created. It is 150 billion taken from people who may have spent it differently.

Yes, but that is all an economy ‘ever’ does! If you think about it for a second, that is exactly what the ‘private sector does’. It just moves money from one group of people to the next in a chain.

Consider this:

I buy a table for twenty quid. The person who owned that table has not ‘created wealth’ via that transaction (not directly anyway); all he has done is transferred twenty quid from my pocket to his. That money was already in the system, it just went from one pocket to another

Of course, he uses that to pay his wholesaler who pays the carpenter who pays the wood merchant who pays the lumberjack, who buys tools from the iron monger, who buys from his supplier who buys from the metal smith who goes home and thinks ‘I need somewhere to put that lamp’ and goes into a furniture shop and buys a table.

Everyone in the chain is in (I assume) the private sector and is therefore a ‘wealth creator’ yet, clearly all they do funnel money round the system. So where does the twenty quid come from? Clearly, the longer the chain, the more ‘wealth’ is being created. Had the smith made a saw, cut down a tree and made a table, then no wealth has been created. So where does the ‘wealth’ come from?

Surely it comes from the fact that there is demand? Where does demand come from? Surely that comes from the number of people in the chains. So it doesn’t REALLY matter if the person spending the money in shop made a chair as long as the end result is that he buys goods.

120
What did you not understand about my opening paragraph @116, just to refresh your memory ‘Comparing wages and productivity between 1801 and 1901 is almost impossible’ and it is for all the reasons I gave in that post, you are not comparing like with like. And just to refresh you memory again, I made no reference to calories consumed, as if that is any indication of a good diet. snigger
Maybe you haven’t seen the latest stats on obesity, caused by high calorie, low quality food.
Perhaps you can expand on your reference to diet and show that it was better , for the average person in 1901 than in 1801.

128. Planeshift

“A minimum wage worker can now buy an antibiotic costing less than an hour of his labour that would heal the same affliction.”

Yes, but a root canal is expensive. My colleague will have to fork out £600 for one, unless she quits her job and then the state will pay. I had mine done when I was unemployed – my job search was distinctly half hearted during that period.

Jim @126: “Yes, but that is all an economy ‘ever’ does! If you think about it for a second, that is exactly what the ‘private sector does’. It just moves money from one group of people to the next in a chain.”

Exactly! That point is at odds with your previous claim that.

“The tax was not ‘spent’ once, it was recycled, time and time again, thus expanding the economy. Isn’t that what an economy is, no?”

To use your example, it makes no difference if I spend £20 on a table, or if the state takes the £20 as tax and spends it buying a table. The process of taxing and spending does not expand the economy.

130. douglas clark

pagar @ 123,

You have a problem with an honest point of view. Almost everyone who isn’t a libertarian thinks it is just a con trick.

Jim @ 118,

you are stating what is commonly known as ‘the broken window fallacy’.

jojo, I think Tim was challenging you to find income figures for the first half of the 18th century, which IIUC will be rather difficult – hence the reference to estimates of calorie intake, which some people use instead (and from there, what proportion of wages (or labour exchanged for food) was required to consume those calories). The point doesn’t have anything to do with diet as such.

Paul Locket @ 129

No, becaue when the State taxes you ang ives it to somebody else that means more people are using the money and the more people using the money creates demand and the demand creates jobs.

TT @ 131

..But you are not suggesting that all the tax the Government collects is not shuffled back into the economy, are you? I assume that you are not suggesting that shuffling money around the economy does not create jobs private sector jobs are you?

There are RAF bases being closed down a couple of hours from where I live. The ‘non productive public servants’ at these bases are about to be redepolyed throughout the Country. Lots of local businesses are up in arms about the closures because they think that the airmen’s wages contribute to the local economy.

Are they worrying about nothing?

11. Tim Worstall

Which, of course, is why we want to reduce political power over the economy, so that those with access to that political power don’t get to set themselves up economically by exercising that political power.

What utter bilge.

We want more political power over the economy as that is the only way people without power or money have an influence over forces which govern their lives.

You actually want power to become more concentrated in the hands of the rich, powerful and well-connected, because that is what would happen were your rather experimental view of economics were ever to be tried out fully.

The argument is about increasing democratic accountability so that peoples views are heard rather than the loud yawls of the self interested.

The credit crunch proved the weakness (if more proof were needed) of “markets” in regulating themselves and behaving for the benefit of all. Governments absolutely must intervene in the economy.

“Perhaps you can expand on your reference to diet and show that it was better , for the average person in 1901 than in 1801.”

Lessee…the average person in 1901 was taller than the average person in 1801. Indicating higher calorie intake as a child.

The Av Ps in 1901 lived longer than the Av Ps in 1801, indicating better nutrition.

The Av child had a better chance of reaching 5 years old in 1901 than in 1801……again, better nutrition.

Try again, eh? No, really, try and show any manner in which the 1801 person was better off, “richer”, had a higher income, than the 1901 one.

“What utter bilge.

We want more political power over the economy as that is the only way people without power or money have an influence over forces which govern their lives.

You actually want power to become more concentrated in the hands of the rich, powerful and well-connected, because that is what would happen were your rather experimental view of economics were ever to be tried out fully.

The argument is about increasing democratic accountability so that peoples views are heard rather than the loud yawls of the self interested. ”

How cute. The most important part being this:

“peoples views are heard rather than the loud yawls of the self interested.”

But when everyone votes on everything, then only the self interested vote on the things they are interested in.

138. douglas clark

Tim Worstall @ 136,

I do think you have avoided the question. Do you see a minarchist state as the desirable end point of social evolution or not? It seems to me, having read a lot of your comments here, that you do.

137. Tim Worstall

But when everyone votes on everything, then only the self interested vote on the things they are interested in.

Yep, but then even your unemployed council estate resident has a say.

That frightens you.

The current system is by no means perfect, but at least it’s not your system.

Jim @134: “No, becaue when the State taxes you ang ives it to somebody else that means more people are using the money and the more people using the money creates demand and the demand creates jobs.”

Sorry, that makes no sense. It’s like saying that if we stand in front of each other passing £10 back and forth, it magically equates to more economic activity and wealth.

In general, taxation suppresses demand. As in the example of you taking £10 out of my wallet and spending it, the immediate impact in terms of economic activity is zero. However, if you keep doing it, eventually I’m likely to decide it’s not worth me doing the work to earn that £10, which would mean overall wealth creation would be reduced.

Besides dietary improvements, we could add that public hygiene had improved greatly by 1901 through sanitation, easier washing facilities and substantially cheaper under-garments. It is arguable by how much medicine had substantially improved until the advent of the antibiotics following the discovery of Penicillin in 1928.

Wider use of vaccination against smallpox, discovered c. 1795, was hugely important, as were antiseptics and anaesthetics (nitrous oxide, chloroform and ether) for surgery. But as for medication, I’m not sure there was much more than digitalis, as a heart stimulant, and aspirin, discovered near the end of the 19th century, although it had a folk medicine precursor. I’m uncertain about when blood letting and leeches became unfashionable as treatments. The regular treatment for TB was “fresh air”. Remember that DH Lawrence and George Orwell died from TB while still in their 40s.

The railways meant that a trip to the seaside became affordable.

As this thread seems to have moved towards the dietary intake over the 19th century, a few interesting facts –
In 1899, one third of volunteers for the Boar War were found to be malnourished or too small to fight.
In 1901,.Rowntree found that in York, one half of working-class families could not earn enough to provide sustinence for physical efficiency.
It was actually Lloyd George who introduced compulsory school meals due to the wholesale lack of nourishment provided for working-class children, it seems that despite a higher calorific intake, the health of the nation wasn’t that great at the end of the 19th century.

@BenM: “The credit crunch proved the weakness (if more proof were needed) of “markets” in regulating themselves and behaving for the benefit of all. Governments absolutely must intervene in the economy.”

Is that comment meant seriously?

We’re talking about a crisis in:
– One of most heavily regulated segments of the economy.
– A segment of the economy where the largest players were told they were “too big to fail” and would be bailed out by the government if necessary.
– A segment of the economy where the investors in the business (euphemistically called savers), were told they could take the profits from investing in the riskiest businesses, but would have their investment returned in full by the government if the business failed.

And you suggest that we should view that as a sign that a lack of government intervention was the issue?

Paul Lockart @ 140

Sorry, that makes no sense. It’s like saying that if we stand in front of each other passing £10 back and forth, it magically equates to more economic activity and wealth.

I am afraid it is not like saying that at all. It is like saying that the more transactions in an economy the larger that economy becomes. Isn’t that, after all is said and done, exactly what an economy is?

As in the example of you taking £10 out of my wallet and spending it, the immediate impact in terms of economic activity is zero.

No, because you now double the amount of transactions in your little micro economy. I suppose it comes down to what is the better economy: one person with a million quid to spend or a million people with a pound each to spend?

However, if you keep doing it, eventually I’m likely to decide it’s not worth me doing the work to earn that £10, which would mean overall wealth creation would be reduced.

Remember that you haven’t produced that tenner out of thin air, that tenner is the culmination millions of other transactions that made it possible for that tenner to be in the pocket of your customer(s) for you to recieve. If you decide to completely drop out the rat race, then your customer will not simply stop spending money they used to spend on you, they will spend it somewhere else in the economy. Sure, the other 59,999,999 will have to struggle on without you in the meantime and your competitors will gain some of your customer’s money as well. If they spend that tenor roughly the same way you do, who knows? Perhaps the economy will struggle on?

Jim @144: “No, because you now double the amount of transactions in your little micro economy.”

No, in both scenarios, there is one transaction. What you are implying in that in the second scenario, the theft of the £10 counts as a transaction and is therefore increased economic activity and effective wealth creation. I’m sure I don’t need to explain the flaw in that argument.

Overall, you seem to be confusing the amount of wealth which is created with the amount of money which is in circulation.

Jim,

Sorry, that makes no sense. It’s like saying that if we stand in front of each other passing £10 back and forth, it magically equates to more economic activity and wealth.

I am afraid it is not like saying that at all. It is like saying that the more transactions in an economy the larger that economy becomes. Isn’t that, after all is said and done, exactly what an economy is?

I think you are talking at cross purposes. Paul and Roger are talking about (increasing) the value in the economy, not the number of transactions – “wealth creation”, not your “recycling”.

147. Richard W

@ 134. Jim

” No, becaue when the State taxes you ang ives it to somebody else that means more people are using the money and the more people using the money creates demand and the demand creates jobs. ”

What you are forgetting Jim is nearly all taxes have a deadweight loss. The more the government taxes the more deadweight loss in the economy. Therefore, the economy will be permanently operating below its potential output. What happens when economies operate below their potential? Unemployment. Some people might be better off with the taxation and spending by the government. However, others find themselves unemployed. It is a fallacy of composition to think because one group are better off that is good for the whole economy. The deadweight loss must fall on someone, it can’t disappear into a black hole.
http://en.wikipedia.org/wiki/Deadweight_loss

I am not an anti-tax swivel-eyed. The minarchist stuff to me is just pie in the sky Nirvana. Conceptualise an ideal and one can endlessly criticise everything that does not conform to the ideal. The ideal is never going to be achievable so it is a way to opt out of dealing with real issues. However, different taxes vary in their distortions and harm. I don’t believe the government tax take in the UK is particularly excessive. In the EU-15, only Portugal, Ireland, Greece and Spain hmm have a lower tax take. However, I firmly believe that we tax badly in the UK with lots of damaging deadweight losses.

“The Cyber Libertarian.”

Entitled, white, anti-social, and probably from a wealthy family, Cyber Libertarians are the most unspeakably vile breed of political activist you are likely to encounter on the Internet. All of them are either in law school, pretend to be lawyers, or fantasize about being lawyers, and they invariably while away their parent’s tuition money playing MMOs and arguing their politics on forums and blogs across the Internet.

They are a breed of nihilists who circle like flies around malodorous causes, eager to pick the winning side, fearful to commit to anything beyond intangible principles. When their cause of the moment is proven wrong they are craven, but unapologetic. When they are right they are triumphant and gloating, parading across the Internet and demanding accolades

They lack all human empathy, are perfectly happy to return to segregation as long as it doesn’t raise their taxes, and have almost invariably never gone without for a single day of their lives. They probably suffer from self-diagnosed Asperger’s Syndrome, but don’t we all.

The Cyber Libertarians will one day rule the Internet, and they may just get Ron Paul up to four percent in the polls!

@ 142. All true and yet….1801 was even worse than this. Actual out and out starvation happened.

@139. No, it’s the opposite that worries me. Sure, the unemployed council estate bloke would have a vote…..that doesn’t worry me at all. But a society in which everything is decided by voting horrifies me. Not because that prole would have a vote at all: but because of the people who would end up dominating such a system. There’s very few people indeed with the enthusiasm to vote on everything. So such systems end up being dominated by the few cranks interested enough to attend all the committee meetings where the votes are held.

I have actually done student politics and this is how Militant (in my day) and perhaps the SWP these days manage matters. Only the truly committed attend every meeting so only the truly committed dominate where everything is decided by meetings.

“Do you see a minarchist state as the desirable end point of social evolution or not?”

Depends what you mean by minarchist. At one level, everyone’s a minarchist. The State should be large enough to do everything that needs doing and no larger. The complexity comes from deciding what is necessary for the State to do. My “minarchist” state is a lot larger than that desired by most libertarians for example.

I’m just fine with state financing of education and health care or example. It’s the direct provision by the State that I argue against: on efficiency grounds. I’m just fine with a welfare safety net financed from taxation. Although I think that something like a citizen’s basic income is a better way of doing it than the current system. I’ve no problem at all with the subsidy to housing for those who cannot aford it. I just don’t think that council housing is the right way to go about providing such.

You might call that a minarchist State but most other people wouldn’t.

Re @140, @144, @147 and passim.

I must remind Jim that in the private sector you do not “take” money. “take” is the domain of the State…and thieves.

ALL spending by civil servants comes from denying people the ability to spend that money on what they choose. Do you really think that, in the round, the State knows better, or the person who earned the money knows better? Even if we distort reality and it is not the latter, the former only can do it by inventing laws to make its theft “legal”.

The problem with the State is it is an organisation that can invent laws to secure market share or, more often than not, monopoly concessions.

I find most organisations are amoral entities that are in pursuit of market dominance and if left to their own devices will grow, become inefficient, bureaucratic. Laws restrain them and competition curbs their inefficencies and greed. Not perfectly, for sure, but thinking you can fix things (people, markets, economies, “society”) into a state of perfection is one of the delusions of The Left in general.

When you have an organisation that is not restrained by competition and has the unique power to create laws to impose by force a monopoly or subsidise its offering via taxation and so wildly distort the market, it will not have the normal curbs on its greed or inefficiencies.

That organisation is the State. Watch how its supporters detest the very idea of competition in service delivery, or the need to provide plurality or market pricing without direct subsidy. It is a natural, if distasteful and unjustified, reaction – competition will demand efficiencies and either way “jobs” will be affected – from what are basically vested interests.

150
You are generalizing about the left, I, for one, would be very happy for the state to withdraw from the economic base.

@87

““In 1901, £1 0s 0d from 1801 is worth:

£0 14s 2d using the retail price index

£1 17s 0d using average earnings”

Note that money become worth *more* during the 19th century in the UK.

In terms of what money could buy one pound of the average wage went from 14 (1901) shillings to 37 shillings. That is, the real value of the average wage doubled/near tripled over the century.

That’s pretty good going and something which hadn’t actually happened in England since the Black Death (which raised wages by killing half the workforce)”

That’s still pretty meaningless. You’ve merely extrapolated something (but what?) from a set of figures that have been removed from history. They really prove nothing. The fact of the matter is that there was little or no social mobility and the working classes were denied access to such things as higher education. In the 19th century, Britain was, for all intents and purposes, a police state that acted in the interests of business. That is classical liberalism in a nutshell.

Nice try, but no cigar.

@148
“At one level, everyone’s a minarchist.”

Nonsense. Next, you’ll be telling us that altruism is “evil”.

Paul @ 145
No, in both scenarios, there is one transaction. What you are implying in that in the second scenario, the theft of the £10 counts as a transaction and is therefore increased economic activity and effective wealth creation. I’m sure I don’t need to explain the flaw in that argument.
Of course it is a transaction! Renaming ‘tax’ as ‘theft’ may score you brownie points with the Libertarians, but it doesn’t change the fact that what we see is still a transaction. That transaction allows more economic activity to occur.
UKL @ 146
I think you are talking at cross purposes. Paul and Roger are talking about (increasing) the value in the economy, not the number of transactions – “wealth creation”, not your “recycling”.
Surely, they are one and the same? When we are talking about ‘economic growth’ what are we talking about if not the aggregate number of transactions in the economy?

Richard @ 147
When you were typing your list, did a bell sound in your head? The EU Countries with higher (in some cases MUCH higher) tax takes, how are they managing? How does Germany manage? Sweden?
There is the thing, Richard. Despite sixty years of growing States, we in Europe have seen prosperity rise post war. Now we could argue that prosperity has been spread out ‘unfairly’ and we could argue what fairly could look like, but you cannot argue that prosperity ‘just happened’. I cannot believe that there are people who think that our economy just grew despite the public sector and not along side the public sector. I cannot believe that people think we just got richer and that say, an educated workforce and consumer base had no contribution to make to that. Or building roads or council houses, hospitals and health service or even the welfare State for that matter.
I wonder how many people work in retailing in this Country and how many of those retailers are still in business despite local economies collapsing around there ears, people still had money coming in. I wonder how many people are in private sector work whose wages levels are designed to compete with public sector employees? I wonder how many people actually realise how much they rely on the public sector?

The fact of the matter is that there was little or no social mobility and the working classes were denied access to such things as higher education. In the 19th century, Britain was, for all intents and purposes, a police state that acted in the interests of business. That is classical liberalism in a nutshell.

1. You’re talking about the century that saw the effective birth of the British middle class – a greater degree of social mobility than anything seen before.

2. Everyone was denied access to higher education. Or virtually everyone – until late in the 19th century, the principle purpose of the university system was the education of clergy.

3. A police state? Britain didn’t even have a police force until damn near halfway through the 19th century.

This is like arguing with Johan Hari.

buddyhell,

That’s still pretty meaningless. You’ve merely extrapolated something (but what?) from a set of figures that have been removed from history. They really prove nothing. The fact of the matter is that there was little or no social mobility and the working classes were denied access to such things as higher education. In the 19th century, Britain was, for all intents and purposes, a police state that acted in the interests of business.

Wot Tim J said, and: Tim W isn’t claiming life in the 19th century was brilliant, he is claiming that people were better off than in the 18th century.

154
There really isn’t any way we can make meaningful comparisons between 1801 and 1901, not least because records were not kept.
I’d also question data about calorific intake, but during the 19th century, sugar became available to the masses which resulted in the mass consumption of bread and jam, not really a healthy diet but certainly very high in calories.
Certainly by the beginning of the 20th century concerns were being expressed about the nutrition of working-class children which led to the compusory provision of school meals.
1801 may have been worse than 1901, in terms of calorie intake and height of children, but isn;t it damning that the first country to industrialise. and for the most of the 19th century, economic leaders, reached the 20th century with a population of malnourished children?

“but isn;t it damning that the first country to industrialise. and for the most of the 19th century, economic leaders, reached the 20th century with a population of malnourished children?”

Depends what happened to everyone else at that time really.

Was the state of the British working classes, after that century of the industrial revolution, better or worse than the state of the working classes in places that did not have an industrial revolution?

Compare and contrast the British working classes 1901 with those in Russia, China or Ethiopia for example. Better off or worse off?

156
Tim, the population of Russia in 1901 consisted of 90 percent peasantry, and serfdom still existed. China and Ethiopia was still subject to a feudal system.
I can’t think of anything less meaningful than comparing the condition of the UK population in 1901 with Russia, China and Ethiopia.

steveb,

I’d also question data about calorific intake, but during the 19th century, sugar became available to the masses which resulted in the mass consumption of bread and jam, not really a healthy diet but certainly very high in calories. Certainly by the beginning of the 20th century concerns were being expressed about the nutrition of working-class children which led to the compulsory provision of school meals.

Again, no-one is claiming calorific intake is a perfect measure.

1801 may have been worse than 1901, in terms of calorie intake and height of children, but isn;t it damning that the first country to industrialise. and for the most of the 19th century, economic leaders, reached the 20th century with a population of malnourished children?

“Damning” of what? I don’t understand your point. Again, the claim is not that 19th century life was perfect. There were a lot of malnourished children in the 18th century, you know.

Try this paper: e.g. Health, Nutrition and Economic Growth, Fogel 2004.

“Tim, the population of Russia in 1901 consisted of 90 percent peasantry, and serfdom still existed. China and Ethiopia was still subject to a feudal system.”

Quite true.

“I can’t think of anything less meaningful than comparing the condition of the UK population in 1901 with Russia, China and Ethiopia.”

That’s why it’s meaningful. We had an industrial revolution. They did not. So, while acknowledging that the industrial revolution was not a period of happy sundogs and LoLcats replete with cheeseburgers, who was better off?

The people after the industrial revolution or the people without one?

Mmm, I love the smell of an internet punch-up in the morning! This is like a Wild West bar room brawl, and there’s nothing more libertarian than that. 🙂

All this wrangling over whether people were ‘better off’ in 1901 than 1801 is very entertaining (and completely off topic) but obviously futile. It’s a bit like saying ‘economic growth happens’. Well, no shit. Just to illustrate the futility, I’ll throw another argument into the mix, just to annoy Tim W (let’s face it, we all love doing that):

The situation of the average worker certainly improved much more from 1870 to 1901 than in the previous 70 years. Was this in large part due to the growth of the Trades Union Movement, which was only legalised in 1871? This was very much a reaction to the depradations of unrestrained capitalism. I could ask similar questions concerning Chartism and the extension of the franchise through the Reform Acts. The answer is likely ‘yes’, but can we establish the extent of the effect? No chance.

So, come on Tim. Give us your best shot …

steveb,

Tim, the population of Russia in 1901 consisted of 90 percent peasantry, and serfdom still existed. China and Ethiopia was still subject to a feudal system.
I can’t think of anything less meaningful than comparing the condition of the UK population in 1901 with Russia, China and Ethiopia.

One of the comparisons in the Great Divergence (cited earlier) is between workers in the Yangtse region of China and workers in England in the 18th century. The Yangtse worker laboured fewer hours a week and his calorific intake was some 1.75 times that of the English worker – in such terms, the Yangtse worker was rather better off.

The point of the Great Divergence is the question why the English worker would later become better off than the Yangtse worker.

In such terms, ISTM comparisons have meaning / value.

“but can we establish the extent of the effect? No chance.

So, come on Tim. Give us your best shot …”

Eh? You want me to do something you’ve already declared impossible to do?

The situation of the average worker certainly improved much more from 1870 to 1901 than in the previous 70 years. Was this in large part due to the growth of the Trades Union Movement, which was only legalised in 1871? This was very much a reaction to the depradations of unrestrained capitalism. I could ask similar questions concerning Chartism and the extension of the franchise through the Reform Acts.

Far more likely to have been the great increases in productivity brought about through the Second Industrial Revolution. I think it’s a touch unlikely that improvements in the standard of living in 1870-1914 were the direct result of the Great Charter of 1838, or the Great Reform Act of 1832.

156
Do I have to spell it out, peasants and serfs are not waged labour, that’s the general definition of working-class, so in the example you give, there are no working-class to make a comparison with.
And I’ve aready said in a previous thread, I do not buy the argument that we are bad but they are worse.
161
Still on the question of diet, the British working-class probably became healthier in the first part of the 20th century due to the compulsory provision of school meals, courtesy of the state.

@ Tim W / 162

Eh? You want me to do something you’ve already declared impossible to do?

Uncharacteristic modesty, Mr W 🙂

@147

What you are forgetting Jim is nearly all taxes have a deadweight loss. The more the government taxes the more deadweight loss in the economy. Therefore, the economy will be permanently operating below its potential output. What happens when economies operate below their potential? Unemployment. Some people might be better off with the taxation and spending by the government. However, others find themselves unemployed. It is a fallacy of composition to think because one group are better off that is good for the whole economy. The deadweight loss must fall on someone, it can’t disappear into a black hole.
http://en.wikipedia.org/wiki/Deadweight_loss

I don’t buy thast argument. Most of the governement spending is in fact in some form or another just redistributing money from one set of people to another in the form of benefits, public sector wages etc. The money does not dissapear into a black hole. The net effect of public spending is to redistribute money from the better off to the poorer. And since poorer people are more likely to spend money rather than save it, or stash it into an offshore bank account. It probably benefits the economy overall.

“I don’t buy thast argument.”

Because you’re missing the argument.

No one doubts that some government spending boosts the economy as a whole. Just as (hopefully at least) no one doubts that some government spending can be harmful.

The argument here is more specific. The very act of taxing produces deadweight costs.

We might well tax, produce deadweight costs, then spend the money and find that the governmental boost is greater than those costs of taxing. That would what be what we might call “good government” to coin a phrase. We might also find that the boost from the spending doesn’t outweigh the deadweight costs of the taxation required to fund it. That would be “bad government”.

On the goodside, all all up with the idea of there being a tax funded court and legal system. Think the value of such is vastly greater than the losses from the taxation required to have it. On the bad government side, say, Michael Heseltine’s ministerial pension. Or outreach diversity coordinators.

Deadweight costs of taxation are purely about the fact that taxing an activity has a cost associated with it. What we spend the money on might outweight this, but that’s a different point.

steveb,

Still on the question of diet, the British working-class probably became healthier in the first part of the 20th century due to the compulsory provision of school meals, courtesy of the state.

I’d be grateful for any pointers to studies of this.

Tim J,

Far more likely to have been the great increases in productivity brought about through the Second Industrial Revolution. I think it’s a touch unlikely that improvements in the standard of living in 1870-1914 were the direct result of the Great Charter of 1838, or the Great Reform Act of 1832.

I think the increased franchise and end of corruption might well have had a direct result in spreading wealth further – the more oligarchic a state, and the more opportunities for corruption there are, the more concentrated wealth tends to be. I would suggest that classical liberalism (which evolved into a democratic movement remember) was however responsible for the political changes which allowed economic and social changes.

“in the first part of the 20th century due to the compulsory provision of school meals, courtesy of the state.”

Wikipedia tells me that it became compulsory in 1944……

Tim W is right – free school meals were part of the Education Act (1944). It was one of the legacies of that well known socialist, Rab Butler (well, he sounds like he should have been a socialist…).

Tim W @ 169

The argument here is more specific. The very act of taxing produces deadweight costs.

But surely that deadweight loss, will translate into someone’s else’s livelyhood down the line? You cannot be suggesting that taxing people ‘out of buying a new car’ for example will not filter through to the second hand car market, public transport or even ‘down the pub’ or whatever?

If I cannot spend my money in one place, then surely I spend it somewhere else?

@ 172. OK, the introduction to deadweight costs.

So there’s this thing called economic activity. Transfer of goods, services, resources, capital, whatever, between economic actors.

It’s the value added by these transactions which we measure as GDP.

OK so far?

OK, so I own a pub, you like a drink. In the absence of taxation you will buy, say, three pints from me. Now ad taxation of a pint. The pint becomes more expensive. You decide that actually, you only want two pints.

No, this isn’t because you’ve run out of money. It’s because you don’t value that third pint at the new higher price while you still do the first two (decreasing marginal utility is hardly unusual).

So, the economic activity of you buying that last pint doesn’t happen. GDP, economic wealth, is smaller. Note also that you’ve been deprived of the pleasure of drinking that third pint.

And we can play exactly the same game with any and everything else. If we tax wages then some people will work fewer hours. If we tax profits then some will strive less to make profits. If we tax fags then fewer tabs get smoked.

Some economic activity which would have occured in the absence of taxation does not occur because of the presence of taxation.

That’s deadweight cost.

Do also note that sometimes we’re quite happy that there is this deadweight cost. Everyone arguing for higher fag taxes is appealing to this very thing: tax it more, it’ll happen less. This is a deadweight, although in the context of this point it’s a benefit, not a cost.

TimW @ 174

So, the economic activity of you buying that last pint doesn’t happen. GDP, economic wealth, is smaller. Note also that you’ve been deprived of the pleasure of drinking that third pint.

Yeah, I get that, but you miss my point. Let us assume that you are charging £2.50 a pint. So, I go out with a tenner and buy four pints and come home skint and drunk.

So far, so good.

But let us assume that the tax on that pint in now 50 pence and you pass that whole ammount onto the customer. Now assuming that I don’t rejiggle my budget or by cheaper beer, but I still go out with that 10 quid.

I don’t buy three pints and then melt my change. I then spend that quid on the juke box, buy a packet of crisps or even take it home with me and allocate that quid into an existing part of my budget, I might even by a packet of Polo mints to fool the wife.

Or I could think, bugger that for a game soldiers and go on the wagon completely and use those ten quid to go to the pictures.

So , even if ‘The Worsall inn’ loses 10% of his drinks turnover, somewhere else in the economy gains. As you say, people will stop buying fags, but they still spend or save that money. People quitting smoking doesn’t cost the economy money, it just shifts it to other parts of the economy. That is a cunt for Benson and Hedges, but Walkers crisps must surely move in to take up the slack?

@175. What you say would be true of the economy were a zero sum game, if the economy were static.

However, it isn’t static, as the last couple of centuries of growth have shown us. There’s lots more stuff now, lots more wealth, lots more income, than there used to be. This has obviously come from the existence of new economic activity taking place.

So, if taxes stop some new economic activity from taking place then growth is slower. That gap between growth without the tax and growth with the tax will be our deadweight cost.

And when we delve into the economics of taxation we find that different taxes have different such deadweight costs. Higher or lower effects on growth for the level of revenue collected. Lowest is taxation on property. Which is why so many people, from Henry George though Milton Friedman have argued that a land value tax is the least bad tax. Higher deadweight costs come from consumption taxes (ie, VAT etc), higher again from income and highest from capital and corporate taxation (that’s not me talking BTW, that’s the OECD).

Tim W @ 147

So, if taxes stop some new economic activity from taking place then growth is slower. That gap between growth without the tax and growth with the tax will be our deadweight cost.
Yes, but only if other economic activity is prevented. What if (to continue the pub analogy) the jukebox guy sees an increase in profits? What if the crisps guy sees a bit better returns as well? What if the local cinema takes on a couple of popcorn sellers?
What if the drinks companies become more efficient? What if a million different things happen all at once, same as every other day in the economy, too?
The crux of the matter is, though, what happens to those 50 pences taken in tax? Well, I would argue if that it is used to build a bridge between a busy river, like the Forth, that will increase economic activity between Fife and Edinburgh, thus boosting the private sector. I would argue that the guy at the end of the bar of the pub may see a bit more money in his balance sheets because he can now get his goods from Dunfermline into the heart of Edinburgh a lot cheaper and quicker than before and his tenner has been produced directly through the public sector, even if he doesn’t realise that. Of course the guy who is coining it in building the bridge might realise that straight away even if forty years later, he may have forgotten that the house he owns was paid by public money and he now thinks the State is ‘too big’. Okay, we can allow him and his mate a smug pint, even if they genuinely think ‘We never got a penny from the State’

“Yes, but only if other economic activity is prevented.”

Correct. If no economic activity is prevented then there is no deadweight cost. Because deadweight cost is a measure of how much economic activity is prevented.

And there is a tax, LVT, which is thought to have no deadweight costs. All other taxes do.

“The crux of the matter is, though, what happens to those 50 pences taken in tax? ”

I’ve already pointed this out above. The benefits from the spending of the tax most certainly can be higher than the deadweight costs of the imposition of the tax.

But that doesn’t change the fact that there are indeed deadweight costs.

TW @ 179

But that doesn’t change the fact that there are indeed deadweight costs.

but do those deadweight costs go right through and affect every part of the economy, or do they only affect that part of the economy being taxed? Surely, if UI am prevented from buying a new car via a tax, then I just spend the money elsewhere? It may be a deadweight loss to BMW (for example) but if I buy a second hand car, is there a measurable loss to the economy as a whole?

172
The provision of free school meals was made compulsory in 1914.

“Surely, if UI am prevented from buying a new car via a tax, then I just spend the money elsewhere? It may be a deadweight loss to BMW (for example) but if I buy a second hand car, is there a measurable loss to the economy as a whole?”

That isn’t deadweight cost.

Deadweight cost is, by definition, the loss to the whole economy as a result of economic activity not taking place because of the tax.

180 – No, County councils were given the power to provide free school meals to poor children in 1906. They were made an entitlement for all children in 1944.

182
You are right, councils were given the power to provide school meals in 1906 and by 1914 150,000 were getting one good meal per day.
According to wiki about Liberal reforms, it states that in 1914 the provision of school meals became compulsory which lead to 14 million children receiving one good meal per day. I havn’t checked this out further, but if it’s wrong I will apologise in advance.

Tim W @ 181

Yes, I can get my head around the concept, Tim, but I am struggling to understand real, practical implications of the concept. I just find it totally implausible that any tax that would render any given economic activity undesirable, would not result in any other economic activity anywhere else in economy take place. I understand your pub analogy was supposed to take this down to my level of understanding, but there are just too many variables for me. Even if the cost of that ’third pint’ or ‘IT system’ or ocean going liner becomes less economically viable if the Government taxes it, surely the money you have deterred from spending just gets spent somewhere else?

Let me try again?

Let me suppose that I own a fleet of ocean liners. I spot a gap in the market for a route, but I just do not have a ship. So I go around the markets and eventually get assurances of the hundred million quid I need to build a ship, but there is a catch. The Government have declared that all new ships* must pay a twenty million quid levy, for some reason. Now, I look at my spreadsheet and factor in this new cost. It turns out that the running costs, price of the debt etc AND paying this new tax, makes ‘Jim’s Highland escape’ look unprofitable and therefore it does not happen. Now, unless I have completely missed the boat (what where you thinking I was going to use there?), my little cruise has suffered
From a ‘deadweight loss.

BUT, what is to stop me from refitting an older boat or the whole fleet for that money? Even if all my backers pull out, then surely they get the opportunity to invest somewhere else? Most of all, surely the people who would otherwise have used my ship would go on other holidays.

I can see how I have lost out and I can even see how the shipbuilder has lost out, Christ, even the Government have lost out by pricing themselves out of the market, but the economy as a whole has not lost out, because the money has not been lost to the economy, it just means that the economic activity that would have occurred on my boat will now happen on someone else’s balance sheet?.

*Yeah, I know that all the ships are registered to a flag of convenience, but you know, it is only in my head.

Jim @184: “I just find it totally implausible that any tax that would render any given economic activity undesirable, would not result in any other economic activity anywhere else in economy take place.”

Here’s possibly the most basic example. If income tax were set at 100%, I wouldn’t go into work tomorrow, as I would be paying to get to work, but getting no return for it.

That would mean my productivity would be removed from the economy (as would many other people’s). There would be no compensating economic activity to take its place.

You focus appears to be almost entirely on the money, when the money is broadly irrelevant; it is just a tool to enable easier exchange of goods and services, the volume of which is the real measure of the size of the economy.

Paul locket @ 184

No-one is remotely talking about income tax at 100%, nor are they talking about anything like it. I am using terms like money for shorthand, of course we are talking about the ability to buy goods or services.

Jim @186, I’m getting the impression that you’re just being deliberately vexatious.

You said: “I just find it totally implausible that any tax that would render any given economic activity undesirable, would not result in any other economic activity anywhere else in economy take place.”

So in order to help you understand how it is perfectly plausible, I gave you what I described as a very basic example, which you appear to be dismissing because it illustrates the point clearly and you don’t like it.

Paul @ 187

You are giving a basic example of a scenario that is clearly not viable. No one is going to advocate a 100% income tax, are they? It is hardly likely to help someone understand something by painting a scenario that has simply not a hope of coming into force, is it? I cannot think of anyone, no, I really mean anyone, who would have an income tax at 100% and expect that to work. Unless of course, they were actually trying to physically stop people from actually doing the job for money, that is.

Jim @189: “I cannot think of anyone, no, I really mean anyone, who would have an income tax at 100% and expect that to work. Unless of course, they were actually trying to physically stop people from actually doing the job for money, that is.”

Maybe we’re getting somewhere here.

You seem to be accepting that a 100% income tax would significantly suppress economic activity. So what about a 99% tax? I would suggest it would still significantly suppress economic activity (I still wouldn’t be going to work), but it would suppress activity slightly less than a 100% tax. And a 98% would suppress economic activity a little less than the 99% tax. And so on, right the way down to zero.

It’s really quite straightforward.

192. Richard W

Jim, here is a video explaining deadweight loss of taxation in a simple supply and demand model. Deadweight loss really is not a contentious issue as it is simple arithmetic.
http://www.youtube.com/watch?v=9F6PSIOJQuU&NR=1

193. Charlieman

@191 Richard W: “Jim, here is a video explaining deadweight loss of taxation…”

Does anyone have a quantity for deadweight loss? Is it like the Laffer curve (for which, logically, the answer depends on when or where questions are asked and the curve is constructed)?

@184,

What you appear not see is, although the taxed money is eventually spent at the end of the day, it is spent on more non-wealth-generating operations in its journey and it takes longer to end up in the hands of productive labour that increases the wealth of the population*.

It is not just velocity, it is propagation time that also matters. If you have 50% of your economy that has to pass through the fingers of the State before it can end up back “out there”, if it has to pass through bureaucrats, through inefficient, over-staffed State-mandated monopolies or their private sector running-dogs, then can you not see there is less wealth available for people to spend on what they want or need? Can you not accept that, in general, the most efficient buying decisions are made by those who earned the wealth being spent? And remember, with a 50% tax take, the “second round” sees 50% back into the monster again.

This flow needs to be seen in conjunction with the inefficiencies of monopoly operation. Can one say that those “private sector” IT companies that feed off the endless supply of needless or bungled bloatware projects are efficient?

Further, Public Sector workers pay no NET tax as they are first paid FROM taxes. It is impossible for the public sector to pay in more tax than taxes are taken from the non-coercive sectors (voluntary + private) to fund them. I know this will seem “horrible” and “nasty” and “not appreciating the hard work of…” etc, but it is a fact and there is no escaping it. We are talking the economics of it.

And while I have touched on it, the UTTER arrogance to call the Voluntary Sector “the third sector”. Who came first? The first sector was Voluntary, then came the Private Sector, (these first two being fundamentally non-coercive sectors) rapidly followed, I suspect, by the “third sector”, the State. In a blink after that, the forth sector, the Corporatist sector – gamekeepers turned poachers – emerged. The latter two forming what should be recognised as the Coercive Sectors.

* Your argument here is in stark contrast to almost all those who support, say, the NHS or State Education, who think that the struggle of competition introduces inefficiencies because of all the friction of PR, advertising (how DARE someone want to bother to ask you, eh? – taking is far better, no? “because we are right!”). Competition does introduce inefficiencies and causes loss from failure, but overall, it sorts out the wheat from the chaff, the sheep from the goats and tends to result in effective, desired services as opposed to “like it or lump it”.

Richard W @ 191

Sure, but the video still does not explain what happens to the economic activity that the taxation has stopped? If you tax a given practice and people then stop buying nails, cars, holidays or whatever, because the extra tax (or profit) makes it not worth it, then surely the money that would have been used to buy that (pre taxed) item, just gets spent somewhere else? This is what you guys appear to miss out. Why is that? What are you guys hiding?

Imagine we sell a million tubs of ice cream a week @ £1 a tub.
The Government then imposes an extra 10 pence a tub surcharge.
Ten percent of the ice cream buying public calculate that it is no longer worth it to buy ice cream.
900,000 tubs are now bought.
What happens to the 100 grand that used buy ice cream can now spent on popcorn, irn bru, pension contributions, or about a million other things.

SO WHERE IS THE LOSS TO THE ECONOMY?

The ice cream industry has lost custom and the people who by ice cream have lost out, the economy as a whole?

196. Luis Enrique

Jim

you have a point: that video, and basic deadweight loss analysis is what’s known as partial equilibrium (looking at just one market, holding everything else constant) as opposed to general equilibrium (trying to keep track of everything changing at once).

You are right that if a tax is imposed on one good, one would imagine people would go out and spend their money on something else instead.

however, taxes can reduce economic output if they cause either people to work less or invest less, so income falls, and if you follow things through you can see how taxes may do either.

Also, note that ‘deadweight loss’ is not just about a reduction in output, it’s also about a loss of ‘consumer surplus’, meaning that people are now consuming less of something they’d have consumed more of at a lower price and would have considered themselves better off for doing so. (I think that’s right: micro is not my area).

However, the bigger point is that any analysis of taxation has to look at both sides of the story – the costs and the benefits. Things like deadweight loss are on the costs side.

Roger Thornhill is quite wrong to think of taxation as wealth destroying by definition – in practise the data shows that richer countries tax more. Some tax pays for transfers, which isn’t destroying anything just moving it about, and some tax pays for goods and services. There are plenty of reasons to think that the things taxation provide increase the quantity of economic activity to an extent that outweighs the reduction in economic activity that only looking at the cost side of the taxation story might lead to you to suggest. There are also reasons to believe that tax funded central spending is able to buy things more cheaply than would happen in a private provision (see: healthcare).

Of course left wingers shouldn’t forget that extracting money from people by force of law and then spending it wastefully is something that happens and is a bad thing to be avoided, but right wingers shouldn’t presume that’s the rule rather than the exception – evidence suggests otherwise.

@195, Luis,

First, I did not say tax “destroys” wealth.

Secondly, moving it about slows it down and that is part of my point. You have three tennis balls. If they take 10s to throw against a wall and come back verses 5s to come back, how many times will those balls be thrown in any given timeframe? How much more “activity” will be seen?

You also play down the issue of poor choices of people spending others’ money, the third party payer problem, and, I am afraid, believe that the NHS is somehow more efficient than any pluralistic system, which is, frankly, absurd. The NHS might save on medicines you say – something I think is not true, but lets just roll with for now – but then again it will do so by using coercive monopolistic power (very very wrong) in denying the producers of those medicines the market price ad potential producers entry into the market. The NHS saves, the industry that enables it to function has to pay. Wrong. Parasitic.

I would agree that there exists natural monopolies where some efficiencies can occur through centralised purchase/commissioning/delivery. Last mile urban utilities, for one. Quite difficult for me to switch supplier of sewerage systems. If anyone doubts me, look into what might befall us with “smart meters” that the last mile operators want to “give” us, and by so doing lock one into their price tariffs. Healthcare and Education are NOT natural monopolies.

Finally, you mistake correlation for causation on high tax countries. Wealth follows Rule of Law, not taxation (see Leon Leuw – Seven Habits of Highly Successful Countries). To think tax creates wealth is to think you can fly to the moon pulling on the handle of a bucket you are standing in. It just does not happen that way.

Charlieman @192,

@191 Richard W: “Jim, here is a video explaining deadweight loss of taxation…”

Does anyone have a quantity for deadweight loss? Is it like the Laffer curve (for which, logically, the answer depends on when or where questions are asked and the curve is constructed)?

Please see this table listing research estimates from several papers (before anyone jumps in, I know we can criticise the self-interested host of the image, but it is a list of papers and estimates, no more than that) – IIUC and FWIW Harberger 1964 is the seminal work and Feldstein is widely cited.

correction

“Please see this table listing research estimates” – makes no sense

200. Luis Enrique

Roger

I see little difference between slowing down the rate of economic activity and destroying output, but have it as you prefer it.

I am not mistaking correlation for causation, but when you observe that X is positively correlated with Y, I think you have to recognise you have your work cut out arguing that X has a large negative causal effect on Y, in this context.

[ you have some very confused ideas about monopoly but I’m not going to bite]

I have watched the ensuing discussion on ‘deadweight losses’ and the supposed costs of taxation, first with amusement and now with growing irritation. Why irritation?

Because the whole notion illustrates perfectly the Panglossian twattery that ensues when prejudices are dressed up in mathematical formulae. Pretty much all of free-market theory is based on the utterly absurd assumption that the correspondence between money and personal utility is identical for every participant in the market. This is such a childishly stupid proposition, that only an economist could possibly take it seriously, because economists do not inhabit the real world.

As an example, the marginal utility of a loaf of bread to a starving unemployed labourer may be extremely high, but if he doesn’t have the money to buy it (or even if he does), the market cares far more about the marginal utility of a gold toilet seat to a fat, tax-dodging billionaire. The starving labourer and the billionaire’s gold toilet seat are considered (by free-market fundamentalists) to be a ‘pareto optimal’ distribution of goods and services.

Globally, this is exactly the situation in the real world, where the marginal utilities of 3 billion poor people in developing countries count for virtually nothing. The fact is that free markets can only work properly – in a ‘pareto optimal’ sense – when each person’s utility is given equal weight: in other words when everyone has equal wealth to start with. It takes a mathematician to see what a thousand economists apparently cannot.

One of the most important roles of taxation, therefore, is to help markets work better by redistributing wealth, so as to achieve a closer correspondence between utility and money. What a glorious irony, which brings us neatly back to the rationale of left-libertarianism. Even Adam Smith would have acknowledged this, unlike his modern day wannabe apostles, with their ‘deadweight losses’.

One person’s ‘deadweight loss’ is another person’s water supply.

202. Richard W

Chris, well done in discovering that income for the wealthy has diminishing marginal utility and income for the poor has increasing marginal utility. Unfortunately, just about everyone in economics already knew that redistributing income from the wealthy to the poor raises overall utility. The issue for most people is how to do in the least damaging ways. All taxes are not equal in their deadweight loss so some will be better than others for utility or welfare maximising purposes. Granted there will be some people on this thread who object in principle to any taxation. However, that is minority view that is never likely to get anywhere. Most people already know that that the gain for the poor through taxing the wealthier is greater than the loss for the wealthy.

Chris,

Brilliant – you are arguing against a position that I have never seen anyone take. I am a strong supporter of markets, but as they are not perfect (not only does the intervention of government etc get in the way, but information is not perfectly available), there also needs to be a safety net. I doubt any free marketeer would dispute this.

So who the hell are you arguing with – a straw man economist?

Luis @195

however, taxes can reduce economic output if they cause either people to work less or invest less, so income falls, and if you follow things through you can see how taxes may do either.

Surely that is only the case, not if ‘people’ work less, but ‘everyone’ works less? Or at least, if everyone in a given sector ‘stops working’, once they reach a given level of income? Surely that means that once people stop working in agiven sector for a period of time, that other people then move into that sector to fill the gaps? Isn’t that exactly what the free market decrees what hapens? Of course that assumes that no loop holes in a given system exist, like allowing people to defer earnings, for example, take earnings in share etc.

Jim,

A pure free market would not have taxes, so your arguments based on markets kind of don’t work. Government is an intervention in the market, not a component of the market.

Anyway, one person working less clearly reduces the level of economic output by exactly the amount that that one person working less is working less. Someone else may take up the slack, as you say, but there comes a point where no-one is willing to do so (and we’re back to the Laffer curve…).

206. Luis Enrique

Jim,

again, you may be right that reductions of labour supply or investment by some people may prompt increases by others. I think we are talking cross purposes somewhat – you asked how taxation might decrease overall output, and I gave an almost tautological reply: if overall inputs to production fall in response to taxation. I think it’s a perfectly respectable position to argue that in practice overall labour and investment levels are not very responsive to taxation (it’s an empirical question, hard to answer) but I don’t see that you can rule it out.

Chris Whitrow,

you have managed to berate economists for being stupid and not living in the real world, but you appear to inhabit some alternate universe in which economists think the “correspondence between money and personal utility is identical for every participant in the market” and then go on to make various errors of your own.

You need to revise the meaning of Pareto optimality – it merely means you can’t make one person better off without making somebody else worse off (perhaps by taking away their gold toilet seat) – it does not mean optimal in any larger sense. The concept you are thinking of is social welfare optimization, something that may very well entail taking away some people’s gold toilet seats. Economists (should) know that the statement “free markets deliver Pareto optimality” is no defense of free markets – see 1st and 2nd welfare theorems, any text book.

The fact that taxation funds beneficial government transfers and expenditure does not mean we have to ignore the idea of deadweight losses. Anybody who considers the costs of taxation without considering the benefits is clearly an idiot. I suggest anybody who thinks about the benefits without thinking about the costs also is.

207. Luis Enrique

Jim

sorry, I should add there is also the possibility that the efficiency with which inputs to production are employed may vary as the state takes up a greater/smaller share of the economy. Right wingers tend to assume the state is always and everywhere less efficient than the private sector, but really it’s obvious that the state is better and some things and worse at others, and some of the things the state does are complements to private sector production – i.e. raise the productivity of the private sector.

@ Luis Enrique / 205 – and others:

You haven’t grasped MY point, which is that Pareto optimality as applied to economic theory is a complete nonsense, since it is based on a theory of utility which is total garbage, and you’ve even acknowledged that it’s garbage.

As for these ‘straw man’ economists, I come across them all the time, especially in comments threads like this one. Remember how the subject cropped up in the first place? Even the very term ‘deadweight loss’ is so value-laden that it’s totally clear where its users’ sympathies lie. Of course taxation restricts certain types of economic activity: that is often the main point of it. I can guarantee that if I proposed a ‘gold toilet seat tax’, some moron would pop up here and start blathering about ‘deadweight loss’, as if economic theory could lend their ideas a veneer of respectability they don’t deserve.

The only world in which deadweight loss is a fully valid concept is one in which everyone has equal wealth. Get back to me when we’ve achieved something close to that, and then we can quibble about which forms of taxation are more efficient than others. Oh, the answer is ‘land tax’; yes, I knew that. Discussion over.

Lus @ 206

Isn’t ‘inefficiency’ the driver for employment and therefore economic growth? Surely once (if) we ever reach total efficiency then economic growth will then cease? Once we become subsistence farmers again, we will become completely ‘self sufficient’ then any need to trade will stop?

Just to prove my point, here is where the concept of ‘deadweight loss’ entered the thread. Richard W @ 147 said:

What you are forgetting Jim is nearly all taxes have a deadweight loss. The more the government taxes the more deadweight loss in the economy. Therefore, the economy will be permanently operating below its potential output. What happens when economies operate below their potential? Unemployment. Some people might be better off with the taxation and spending by the government. However, others find themselves unemployed. It is a fallacy of composition to think because one group are better off that is good for the whole economy. The deadweight loss must fall on someone, it can’t disappear into a black hole.
http://en.wikipedia.org/wiki/Deadweight_loss

I’ve shown just one reason why this is utter nonsense. There are others. I’ve read a lot of other crap in other comments too, like ‘the public sector not creating wealth’. What is the main source of wealth in any economy? Knowledge. How do most people obtain knowledge? Through education. How do most people get their education? And how do we pay for that? How does that impact on the calculation of loss of efficiency introduced by taxation? And what does that mean for unemployment?

Free-market, low-tax zealots might like to try answering those questions before spouting more bullshit like the above.

Chris,

“explaining deadweight loss” != “being anti-tax”

HTH

Chris,

You are confusing the fact that education is currently supplied by the public sector with an assumption it must be supplied by the public sector (and for the record, I think it should be funded by the public sector – a market but with a guaranteed abillity to buy into it (which is a distortion of the market, but one that we need)). Which may explain our disagreement – you seem to believe that belief in free markets requires no state. I argue a perfect market could have no state and would need no state (there being enough resource for anyone) – it would in effect be the ideal of political anarchy. But until we reach that stage, the state has a role in combatting potential inequalities in the market – albeit it tends to create others (especially when it controls so much wealth itself).

Jim @ 208,

Surely once (if) we ever reach total efficiency then economic growth will then cease? Once we become subsistence farmers again, we will become completely ‘self sufficient’ then any need to trade will stop?

We don’t want to live at subsistence level. Forgive me but what are you talking about?

214. Richard W

@ Chris Whitrow

So the solution is to ignore what we do not like and make arguments based on emotion. You are not saying deadweight loss does not occur only that it is value-laden. So let’s cal it the gap that occurs when the government maximises the welfare of others. Still value-laden. If you are going to say something does not happen it is for you to prove it. Saying that government can raise the welfare of others does not disprove anything. Let me ask you a question. If government taxes polluting behaviour, does pollution stay the same or fall? Presumably you accept that it would fall and that is good. So the tax must change behaviour that we want to change. Why is it so difficult to accept that tax alters every other market?

Discovering that all do not have equal wealth and income appears to be a revelation only to yourself. Government spending on human capital formation which enhances the economy is equally mind-blowing.

Chris Whitrow @209: “The only world in which deadweight loss is a fully valid concept is one in which everyone has equal wealth. Get back to me when we’ve achieved something close to that, and then we can quibble about which forms of taxation are more efficient than others.”

That approach is both dangerous and ridiculous.

You’re taking a position which says that the the narrowing of the gap between rich and poor (the “equal wealth” element) is such an over-riding concern that render irrelevant any concern about whether or not an approach to taxation is making people poorer as a whole (the “deadweight loss” element).

Using your approach, we could ignore all deadweight costs and conclude that the right approach is to tax all income at 100% and re-distribute it equally to all. It would very quickly produce equality. It would also result in grinding poverty as people stopped working due to the lack of return from their effort, with tax revenues drying up as a result.

Luis @ 212

One man’s inefficiency is another man’s job. The more ‘inefficency’ we eliminate from the economy then we are really talking about job and livelyhood cuts, aren’t we?

217. Luis Enrique

Jim

again you are right that efficiency gains can equal job losses. But in the long run, efficiency is what determines the level of the real wage – if you are about the real wage of workers, you care about efficiency.

you might enjoy this essay by famous lefty economist Robert Solow:

http://www.nationalaffairs.com/public_interest/detail/technology-and-unemployment

218. Luis Enrique

Chris

you seem to be impervious to people pointing out your mistake and, seeing as I have no need to treat somebody like you civilly, a bit of an obnoxious prick.

please not that left-wing non-free market still need to think about how taxation affects behaviour.

“What is the main source of wealth in any economy? Knowledge. How do most people obtain knowledge? Through education.”

Erm, no, that isn’t what economists call knowledge.

Knowledge is knowing how to do something. And it is generally accepted that knowing how to do something is “local knowledge”. Now, we can go to the Hayek end of the ideological spectrum and say that all useful knowledge is local, in hte possession of people who actually do things. We can go to the the other end and state that it’s in the hands of the planners, those wise and omniscient people who tell us all what to do.

But no one at all thinks that knowledge is what is received through education. The ability to manipulate knowlege, perhaps, but not “it” itself.

BTW, I think it is you above that claims to be a physicist. So let me offer an (not terribly good) analogy for this deadweight cost.

Friction.

There’s friction in every mechanical system. There’s deadweight in every taxation system.

We put up with friction because we have to. Even with the existence of friction, we still say some things are worth doing.

So with taxation systems: there will always be deadweight costs but sometimes we put up with them because the system as a whole is worth putting up with them.

But as a physicist, you know that often we want to minimise friction. We’d like the least we can manage, because it’s a waste. So with deadweight costs. Other times, we really rather like friction …..umm, brakes stopping the car falling down the hill maybe….and in tax we might say excise taxes on fags or snout as a similar thing….

The point being that in physics (at least the O level which is as far as I got, basic Newtonian mechanics) we find that friction is a hugely important thing that we have to think about, Sometimes we use it, other times we minimise it.

And so with deadweight costs of taxation in economics.

It’s hugely important and only by recognising that it is can we turn it to our advantage.

So, let me turn the question to you. You’d sneer, laugh at, anyone who said friction isn’t important in physics. What is it that you know about economics that makes deadweight costs unimportant?

And yes, claiming that they aren’t really is akin to “assume a frictionless surface”.

@ Tim W / 219:

I agree with you, as it happens, and that’s a rarity. In fact, nothing I’ve said contradicts your description of taxation as introducing friction in the economy. What I refuse to put up with is the notion that these frictions are always harmful, which (as I have pointed out) some people here do seem to think.

@ Luis Enrique / 215:

I’m glad you think me an obnoxious prick. From you I’ll take that as a compliment. Note that I haven’t stooped to personal insults myself, although where I think an idea or argument is bullshit, I’ve said so and given evidence for my assertion.

You, on the other hand, have not answered my questions regarding how deadweight costs usually lead to benefits and how economists propose to measure these – since they appear to be far too busy just quantifying the costs.

I hope everyone has a lovely Easter – you too Luis. I’m off to enjoy the sunshine and spend time with friends. If there are any more insults coming my way, I look forward to reading them when I get back.

See you next Tuesday – as they say 🙂

Chris,

What I refuse to put up with is the notion that these frictions are always harmful, which (as I have pointed out) some people here do seem to think.

ISTM only one commenter can be read as thinking that.

Note that I haven’t stooped to personal insults myself, although where I think an idea or argument is bullshit, I’ve said so and given evidence for my assertion.

That part of the thread which “irritated” you was a reasonable discussion – look back at your posts, and ask yourself if they seem a bit bad-tempered.

So, what have I learned reading this thread? The comprehension skills of many stops at seeing a word like ‘libertarian’ and they proceed to regurgitate ill informed nonsense…

@douglas clark
If you spent a little time looking into Proudhon (the first person to call himself an anarchist), Tucker (an american anarchist from the late 18th/early 19th Century) and Carson (a mutualist in the same tradtion as the previous two) then you’d know your charges are nonsense.
None of them would agree that stolen property is legitimately owned by the theif. On the contrary, Carson, and left-libertarians in general, found much of their analysis on the fact that our society is distorted by long term theft and oppression by the ruling class, an oppression which is ongoing.
Even Sean Gabb, mainstay of the UK libertarian right (not the LPUK however) takes the view that although property rights are inviolate, that only applies to justly aquired property.
Hell, Rothbard, that scion of ‘anarcho’-‘capitalism’ advocated state owned and backed business be confiscated by the workers in that business (see ‘Confiscation and the Homesteading Principle’). (before you go off on one – no, not all left-libertarians are Rothbardian by any stretch of the imagination, and his later work and shift to paleo-conservatism is rejected, just as Proudhon’s sexism and anti-semitism is rejected by left-libertarians and other anarchists).

I could go on and on, but there’s not enough space here, but have a look around. Try reading some of Carson’s work (much of its at c4ss.org). Have a look at some other left-libertarians like radgeek.com. You would see that even if you disagree, we’re not the pastische of vulgar libertarianism you portray.

@Tim Worstall

You suggest support for other forms of organisation like John Lewis, Mondragon etc.
The problem with this is that they still function in the capitalist mode. John Lewis is a top down organisation, managerialism is the order of the day. Mondragon may be less so, but some of its subsidiaries have very dodgy records when it comes to conditions and attempts at union busting.

For other methods of organisation to exist, we need to remove the biases installed in favour of the capitalist mode of organisation.

(capitalist used here in the traditional sense, not the revisionist ‘free market’ sense. Free markets and capitalism in this manner are, if not incompatible, not necessary or sufficient for each other).

Also, you suggest you need to prevent the state from acting in favour of any group, the very existence of even a minimal state will ensure that happens and the state will grow. Policing is a function of the ruling class for example. The standing army is the same. They exist, and came into existence, to ensure the power of the state and the ruling classes.
The only way to ensure that no interest can capture the state is to have no state.

A note of ‘social Darwinism’:

Someone mentioned it in the usual perjorative terms, so I feel its necessary to try and put the record straight.
The original concept of Social Darwinism is one of an evolution of societal institutions with those most fit for their purpose surviving and those least fit fading away.

It was only later that the bastardisation of ‘Ragnar Readbeard’ and ‘Might Is Right’ came into play – a development which parallels the authoritarian left’s love affair with eugenics (its the ‘laissez-faire’ version of eugenics if you like). This view was rightly abhored by classical liberals.

In the original term, any left libertarain or anarchist would have little trouble with, although few would follow Herbert Spencer into a view of inevitability of human liberty and equality, and would agitate for institutions which aid this.

@200

“I see little difference between slowing down the rate of economic activity and destroying output, but have it as you prefer it.”

To destroy is to take something that exists and to end it. Less output in future is not the same. You might call it pedantic, but it is very distinct.

“I am not mistaking correlation for causation, but when you observe that X is positively correlated with Y, I think you have to recognise you have your work cut out arguing that X has a large negative causal effect on Y, in this context.”

Y can exist without X. Thus, Y is not necessary for X. Ergo you need more to prove causation.

Tim Worstall, @219, used the term I also use, friction. There is another – latency. In a high tax economy, the latency for wealth to get back into the productive sector is increased. Half of it must go through another cycle to get there and when it does, half of everything is lost again to the Treasury meander.

“[ you have some very confused ideas about monopoly but I’m not going to bite]”

Confusing to you, perhaps 😉

Going back to the OP, what concerns me is that many who say they are Left Libertarian do say they want non-State action to tackle X or Y (e.g. discrimination).

The issue I have is what gives first? What is more important? Is it ending discrimination or is it maintaining non-State solutions? I have seen an undercurrent in responses to my earlier raising of this in that the rights of the non-discriminator might be asserted over that of those who do.

Martin, what is your stance on this?


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    […] than guns. We would not let our enemies have guns, why should we let them have ideas. So when left-libertarians express such mindlessless as: the State is an instution that exists to allow the corporate classes thrive- and the liberal […]

  25. Reaching Left, Part 2

    […] In related news, Martin a.k.a. Mr. Civil Libertarian has a piece on left-libertarianism here. […]

  26. Attack the System » Blog Archive » Why I Became a Left-Libertarian

    […] Essay by “Martin” at the Liberal Conspiracy. ——————————————————————————————————— As Libertarians across the US flock to cinemas to watch the film version of Atlas Shrugged (the film has a limited release and harsh criticism from everyone outside those who are already fully bought into Ayn Rand’s philosophy of corporate apologism and advocacy of selfishness as a way of life), the UK’s own Libertarian Party is caught in a minor controversy over its leader. […]

  27. Why I Became a Left-Libertarian | The Libertarian Alliance: BLOG

    […] Essay by “Martin” at the Liberal Conspiracy. ——————————————————————————————————— As Libertarians across the US flock to cinemas to watch the film version of Atlas Shrugged (the film has a limited release and harsh criticism from everyone outside those who are already fully bought into Ayn Rand’s philosophy of corporate apologism and advocacy of selfishness as a way of life), the UK’s own Libertarian Party is caught in a minor controversy over its leader. […]

  28. Martin

    @bengoldacre Ah, Mises Inst. Heralds of what left-libs like myself call "vulgar libertarianism". You may like this: http://t.co/TbR5BDzm





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