Philosophy Now Forum

Some optional history... maybe skip this bit.

Liberalism (big l) originated in a different era. In those times trade between nations travelled by sailing ship, and almost everyone, almost everywhere was a farmer. Everyone lived in very heirarchical societies, and most people inherited their positions within those, along with the farm if they were lucky. By the time something recognisable as Liberlism emerged, that was changing. The changes in trade, society, politics, technology etc caused a conservative backlash, typified by sentiments to the effect that traditions represent the condensed wisdom of the ages and thus should not be scrapped.

Liberalism was formed as the counterpoint. Liberals saw these changes as new and modern and something to be harnessed for the good of all. They saw the influx of cheap imported corn from America as a good thing, something that would help the poor get cheaper bread, not a thing to fear that would harm the profits of Tory landowners. This is roughly the insight that originally defines Liberalism, the belief that a market is working only when it serves the interests of the consumer. Socialism is more interested in the producer, laissez faire capitalists think of markets as some force of nature that will do as it pleases, Conservatives tend to protect the owner.

After a time, the world changed some more, and Liberalism became harder to maintain on the one hand, and less controversial on the other. International trade became part of everybody's life, carrying Argentinian beef and New Zealand butter, and nobody considered placing heavy tarrifs on those things. The political and social fortunes of the landowners declined, pushed aside by nouveau-riche merchants and industrialists. The trade unionist movement became the dynamic source of new ideas, and technology changed our lives such that we needed these. The rate at which new industries supplanted old ones picked up speed, and with it the rate that workers with redundant skills fell on hard times also increased.

Afer a bit of war, and some jazz, came the great depression of the 1930s (shame on anybody who though the last paragraph was about Thatcher, it was about electricity, motorcars and telephones and whatnot). The Great Depression saw a huge reversion, much of the liberal order in world affairs, already shakier than we tend to remember these days, was abandoned entirely, and other parts went horribly wrong. Economically, a few countries (looking at you America) started raising tarrifs and enacted other beggar-thy-neighbour protectionist policies. Everybody responded in kind of course. Global trade plummeted as everyone protected their own workers against foreing tarrifs, and the whole world got poorer as a result. Argentina has never recovered, they used to be richer than Germany.

One of the other great Liberal innovations did even worse, it became a monster. Liberals originally invented Nationalism because it seemed like a good way to create poeoples to be citizens of these new nation state things that seemed such a cool alternative to old fashioned kingdoms with their subjects and stuff. By the time of the great depression, it was becoming rather obvious that this had some unanticipated downside. For a start the idea had travelled somewhat further than originally intended. You see those original Liberals weren't men ahead of their time, they were men of their times just like everybody else has always been. They were as racist as everyone else, and just as imperialistic too. But those guys were all long dead by the time Arabs and Indians started climbing on board the nationalism thing, which most of them wouldn't have wanted. They would also have been somewhat dismayed with what Hitler and Mussolini did with their thing too I imagine.

So that's a very brief take on how Liberalism came to need a reinvention in the middle part of the 20th century. Thus Neoliberalism... the version of liberlism that wags its finger at you when you apply a tarrif just like its daddy did, but isn't into nationalism very much. It wasn't a big hit to be honest. But I digress, because there was this guy called Pinochet, who was into nationalism, and authoritatrianism, and killing people. But because Pinochet liberalised trade and stopped trying to manipulate the currency or print money and so on, some people decided he was a neoliberal and the word got stolen. And then it got applied to conservatives, so that ruined it.

Perhaps that doesn't matter anyway. Since neoliberalism was formulated in the 30s and 40s, the world has changed again. Some old controversies from those times are largely resolved and replaced by new ones. We don't need to argue (in Britain) about whether to have universal unemployment insurance, universal health insurance or any of those basic safety net details, that's all sorted out. We do need to make sure those are sustainable under conditions of demographic and technological change that would never have been envisioned by the original neoliberals any more than the arrival of nationalism in Kenya was considered by their forebears.

Probably read this bit.
So what we need now, is an updated and modernised version of what those neoliberals in the 30s and 40s were discussing.
Their basic principles remain:
1. Individual choice and markets are of paramount importance both as an expression of individual liberty and driving force of economic prosperity.
2. The state serves an important role in establishing conditions favorable to competition through preventing monopoly, providing a stable monetary framework, and relieving acute misery and distress.
3. Free exchange and movement between countries makes us richer and has led to an unparalleled decline in global poverty.
4. Public policy has global ramifications and should take into account the effect it has on people around the world regardless of nationality.
Where the policies presented herein don't reflect nationwide sentiments such as the universal desire to not be poor, they will be in opposition to illiberal tendencies (such as the widespread fear of immigration) on the basis of standard Liberal dogmas such as the above. This is not anti-democratic, it just means we will lose any and all elections becasue pragmatism has limits.

I should declare some discrepencies in my own thinking up front.
1. I am British and will be sticking largely to the European version of these things. We take a very broad view on what constitutes "acute misery and distress", it will not be remotely palatable to any of the American conservatives who already dominate discussions here. You guys have enough America dominated threads already. We have higher taxes than you, and better public services than you, and this is a trade off we already made a log time ago, we already know you don't like that, but it is the context of this thread.
2. These policy proposals are mainly aimed at Britain, most can be repurposed easily for other countries, but you know ... Brexit is quite a local thing.
3. My grasp of economics and political science is only so-so, and I enjoy taking liberties, perhaps to the point of mostly taking the piss. If you actually want to find out well researched information on this sort of thing from somebody who takes stuff seriously, these subreddits are totally sensible. I mean I stole that list of princples above from one of them.
https://www.reddit.com/r/neoliberal/
https://www.reddit.com/r/Economics/
https://www.reddit.com/r/badeconomics/
4. Even in light of that, I am not necessarily a good Neo-classic-neo-liberal ... even if it is my thing and I invented it, that just means somebody should take it away from me. I will propose some unothodox things that the better contributors at /r/neoliberal/ would find utterly risible.


Finally. (do read this bit)
Henry has suggested that we should begin with a first line of our constitution, the underlying principle that guides all of this. I don't think he's wrong, but I doubt he will like what I have. Here goes anyway...

There is a problem with politics when predicated on a single guiding principle of justice or similar. This is that it forms a rationale that must be followed to a conclusion, and in most cases that conclusion is undesirable. It is a Utopia/Dystopia sort of problem where you either pursue the unattainable and get nowhere, or you pursue the unattainable and get a nightmare. Neo-classical-neo-liberalism resolves this problem by not pursing a utopian vision at all, and this requires us to abandon the fixed and certain judgment of exactly what counts as justice, or the ultimate basis of rights. Eventually, every individual policy is something that must be justified as desirable to society at large independently of any other policy, and occasionally it needs to be reviewed to make sure that is still the case.

Neo-classic-neo-liberalism is essentially pragmatic and technocratic. We're not going to insist on what society must desire, so much as providing as far as possible for those desires that people can mostly agree on, or at least not fight each other over. The point is to improve public policy in Britain and elsewhere by making it operate as designed, with minimal counterproduction. So a tax policy that doesn't drive people to cheat the system is better than one that feels super pure but doesn't deliver any revenue for instance. I won't belabour this point here, it will crop up a lot anyway.

Ok, we've done some groundwork and shit, but what would a Neo-classical-neo-liberal policy look like? Let's open with something maximally divisive! Let's legalise drugs ... not the nice ones everyone enjoys, but the really bad ones everyone is afraid of. As I will explain, this will be good for everybody except truck drivers.

Here's the general state of the industry. Cocaine and Heroin are immensely profitable operations because the end product is addictive, and the sales and distribution are risky. Lots of heroin and crack is therfore sold at huge markups by people who think nothing of a little violence, to people who are willing to give truck drivers oral sex for very low prices. If you get burgled or mugged, there's a good chance that was done to finance somebody's need to get high. Nobody needs a very big lecture on this, there's loads of junkies, new ones crop up often, the police and prisons don't seem to be effective deterrents.

What would work, and very quickly, would be to move the ratio of profit and risk such that nobody wanted to take the risk any more. The easy way to do that is to take the heroin and crack industries and turn them into a state monopoly. We already know that state owned enterprises destroy entrepreneurial activty, and we know drug dealers like to call themselves businessmen... so just bankrupt them.

How does this policy work exactly?
Under this proposal, while smoking crack and shooting smack is entirely legal, unlicensed drug importation, distribution and sale remains illegal. In fact the penalties can now be increased to include a debt owed to the state owned cocaine and smack company, which can be enforced against your property as a civil matter without any need to prove it came from illicit activity. Risk therefore remains high, profitability falls a little.

The state owned crack 'n smack co does a deal with whichever country is best able to regulate the farmers who grow cocaine and heroin within their borders. Colombia or wherever then licenses some of their existing drug lords who would be expected to cease illicit trading in return for being able to just bank their money without laundering it etc. This is vastly preferable to doing deals with 3rd party nations to buy up the stockpiles of cocaine they seize at their borders because it unravels a small part of the harm our appetite for drugs in this country has caused in the supplier states.

Then we give the drugs away to the addicts for free, in large quantities, on demand if that is possible (medical ethics might make it impossible to find doctors to work on that basis). Providing safe spaces to smoke/inject as required, with all the counselling and rehab opportunities we can come up with. In the short term, they will still do some shoplifting etc to buy extra rations on the shrinking black market, but over time the industry that supplies them will atrophy and they won't easily be able to find those extra drugs. After a few years, it will become virtually impossible for a truck driver to get a gummy hummer from a toothless whore in a Tesco car park anywhere in Britain.

There's a nastier, quicker version of this policy available. The basic idea is that we have all these police guys spending all their time chasing junkies to put them in prison for short stints, and all these prison guys spending all their time locking them up. If you just put a big old pile of crack in the middle of the prison and promise to put some more there the next day, you achieve all of the above without having to waste all that police time, and you don't need to bother locking the doors. This version of that policy removes all of the drug users and half of the dealers from circulation, meaning there's nobody to keep the industry alive by supplementing their state drugs. It kills the indistry much more quickly, but it kills all the addicts too. I prefer the softer version of this policy. You can go the other way on that though if you decide there is a more pressing duty of care towards whoever would be the next kid they sell some crack to than to the person who already fell for that.

Neo-thingy-classical-whotsit-libtard tax policy shall be as follows...

First up, tax policy isn't that great a tool to acheive the aims that people sometimes set for it. You don't use a monkey wrench peel a potato, and I don't use a tax band to fix all the problems of poverty and inequality in our society. There are things a tax policy needs to do ahead of all other things, and top of that list is funding the state so it can use proper tools for those other things. Secondarily, we wish to not in the process raise taxes paid for by the poorest, and we don't want to make housing expensive where it would be nicer if it were cheaper and so on. But only because the state has to spend exta money if there is a negative outcome from a tax policy.

Some fundamental principles apply:
1. High income taxes don't make people work less, even eye watering ones. And tax cuts for the rich don't provide greater returns to the treasury. The Laffer Curve was drawn on a napkin to prove a point, it does not represent an empirical finding, and support for it has always been flimsy. We would cut taxes for the rich if that did create jobs, but it doesn't. For the benefit of the absolutely fucking stupid, that means Neo-Classical-Chewy-Centrists DO NOT BELIEVE IN TRICKLE DOWN ECONOMICS AND NEVER FUCKING DID.

2. We will not be taking seriously any of the magical money tree wishes of the left either. There is no way to dress up monetary financing of the state that covers for it being a shit idea. I am not entertaining any suggestion that an essay written by a sociologist accurately demonstrates that printing money to finance state spending doesn't cause inflationary spirals and that Venezuela is only down on its luck because America is a big meany. Similar out of hand rejection applies to financial transactions taxes (Tobin taxes), that just eliminates liquidity from investment markets and fucks with prices, it all comes out of your pension pot, the rich won't pay them, they will just move their money.

3. All changes to tax policy have what economists call incidence, basically that means that somebody (always a person, never a company), ends up paying for it. Neo-thingy-doohickey-liberalism prefers that the incidence of a tax should lean towards the wealthy because they can afford it better.

4. All changes to tax policy also change people's incentives. In some cases they can be incentivised to stop doing something like smoking, in others they can be encouraged to move assets offshore, or claim earned income as dividends. Sometimes this stuff is the whole point, other times it is an inefficiency, there is a marked tendency in our discourse to ignore that latter issue, which results in clever people suggesting dumb ideas. Worse,it results in sensible voters never getting to choose good policies.

The actual policy choices...
The first decison therefore is how much money the state should be spending and thus how much it needs to raise via taxation. Here's a list of what share of GDP is spent by the state in various nations.

It isn't too difficult to work out what is going on. Towards the top there are a bunch of Nordic social democratic countries. They are cool, they follow the resonable principle that we are ok with spending extra money to buy a better product. Sweden etc have eye watering taxes, but that money is very well spent on excellent public services. Others at the top of the list aren't such great examples. France also has eye watering taxes, they aren't well designed, they aren't well spent, and the whole thing is creaking. Britain is kind of in the middle of the pack for how much value for money we get, so that's something we should bear in mind before commiting to a big number for state spending as share of GDP, we don't want to recreate the French problem here, we probably cannot quickly establish the Swedish balance and our trade unions would kick off hardcore if we tried.

It would of course be awesome to have low taxes and get Sewdish service levels for them, but that's not happening either. It has been sort of policy in Britain to imagine we can do that for the last decade or so, and it's probably time to recognise this as an error before more people kill themselves waiting for reduced benefit cheques.

Contries lower down that list which appear to have good services by the way aren't necessarily being counted the same way as others. Switzerland has a world beating health service that consumes 12% of GDP, but the entire govt share of GDP is only 32 percent... I imagine that's because health services aren't being counted in full. Their system is based on mandatory private insurance and is in some respects similar to Obamacare.

For those reasons listed above, I propose that Britain should aim for parity with a well run contintinental neighbour that is not France or Belgium. So that would be Holland, where the state spends 42% of GDP as opposed to our 38.5

The details of raising that extra share of GDP via taxation is a very boring topic. Also I can't find a linkable graphic that shows how the UK's tax structure compared to the OECD averages is a bit wonky. So here's a quick and dirty breakdown.
1. Standard neoliberal practice as recommended by virtually all sane economists, is to apply simple carbon taxes instead of using rickety cap and trade to price in the externalities of fossil fuels. But the usual recommendation is make that revenue neutral by offsetting the income generated with tax cuts for the needy. Not gonna do that last bit, just gonna impose a carbon tax on the fuels at production/import. This will get a small slice of GDP power to begin with, no more than 0.5% GDP to start and no more than 1% in 10 years.

2. Britain gets lower than average taxes from social security contributions and from property taxes. Property taxes need significant reform (see housing policy if I ever get there), and social security contribution will have to increase anyway, so those will be the main source in this endeavour.

3. Sure, legalise weed, tax it, and set standards for quality and strength while at it. Maybe do the same for Ecstasy and other fun drugs whose prohibition is routinely ignored. We don't have a drug addiction problem any more because I fixed that for you in the last post, but we probably have prostitution still, it just comes with better dentistry now. Legalise that too, get some taxes from it, happy endings all round.

4. The big question is whether to tax investment income as earnings or not. There's pros and cons, but my hot take is that we should gradually raise the level of Capital Gains tax, but mostly focus on all the loopholes used to declare what is clearly not an investment but an earned income as such. This will really fuck up some among the self employed, and all of your pensions, so if somebody has been telling you it only affects the rich, they lied. For that reason we won't be trying to raise as much money from this as some would hope.

So there you have it, hundred of billions of extra pounds are now sloshing around our coffers waiting to be spent. And we already increased the efficiency of our criminal justice system in the preceeding post. So we get to alleviate some poverty, invest in hospitals and roads, and all that other good shit soon.

A regular complaint about Neolibs (not to be confused with neo-classical-benson-hedges like me) is that they caused all the housing crises around the world with their, erm, I'm not sure, immigration and other lump-of-X fallacies on the whole. So let's do some Neo-Classic-Special-Pleaders Housing Policy today (and fill in that gap in the tax policy while we're at it).

The basic problem is largely agreed by all I think, we don't always have enough housing in the places where people want to own or rent accommodation, and thus prices for this necessity of life rise faster than the wages we use to purchase them. Parts of this will be highly directed at the UK, others are more generally applicable.

Everybody knows that the market prices of things are largely determined by supply and demand, so when prices are broken, one of those things is the typical way to fix it. A popular alternative strategy is to ignore this entirely and have the government mandate prices that houses can be rented at. This is a short term fix that does nothing to solve any fundamental issues and thus it always breaks down after a while and makes the problem worse. Price fixing in any market always does that and really there should be no need to further discuss such silliness.

A second bad idea is to try and limit demand. It is illiberal and abusive to do anything significant to prevent people from wanting to live in London or Manchester, also it won't work anyway, those are the places where young people can find work in a range of dynamic global industries and they have the UK's only two career escalator effects. Diverting resources to actually reduce international immigration to these areas significantly enough to appreciably reduce housing demand would only limit the ability of Britain's good regional economies to bring in international talent to make money from, and would either blow out the UK economy causing a recession, or else induce London and Manchester based companies to work harder and pay more to empty the rest of Britian of its entire young and educated workforce (replacing all that redirected demand, but making houses in Sunderland less valuable still). Whichever regions complain today about being hollowed out by London would therefore complain twice as hard in future either way.

So the adressable option is to boost supply. Here's how to do that.

1. Land Value Tax. This should be a no-brainer sort of decision, it's popular with lefties and neoliberals alike. It removes an important set of market distortions, namely the incentive to just hold a parcel of land to use as loan collateral instead of building a house on it. Here's a site written by some beardy types to explain and justify it so I don't have to type too much. Disclaimer... those guys are pitching a revenue neutral version of this idea, I am not. As we are intending to boost tax intake by 3 or 4% of GDP, this is expected to do some of that work for us.

2. Zoning issues are the most important problem with our housing markets in London and many other UK cities, the same is true of nearly all cities with overpriced housing such as San Franciso and NYC. There are many cities in the world which don't have such problems, they have different problems though. In Texas, Arizona, New Mexico and so on, there is little to stop you building what you want and where you want, so their cities, even ones with relatively low populations consist of dirt cheap houses on virtually worthless land. Even conurbations that barely qualify as a city by population size seem to spread beyond the horizon. We cannot introduce that level of urban sprawl here, we don't have the roads, and we don't want them.

Most British cities are surrounded by protected green belts established under the Town and Country Planning Act, promulgated in 1947 when hardly anyone owned a car, and marginally updated a couple of time since. It needs another update, local councils need more leeway to approve new buildings. Much of the protected land is covered in fake shit pretending to be bucolic in nature anyway, it's not farms and forest on the whole but dog kennels, horse paddocks, golf courses and scrap yards, all of them there mostly because the land is cheap due to having no chance of planning permission. However, leeway is one thing, incentives are another...

3. Local councils in Britain have truly shitty incentives to approve anything. If they take council owned land and sell that for housing, a school loses a playing field, but the council gets the money, which they can spend on schools and roads etc. If they approve building on land they don't own, the central government gets the money and does not give it back. So guess why our schools have lost their playing fields. A really simple change there would give councils funds to pay for stuff to buy off nimbys so that they complain less about lost parking spaces, it would go some way to fixing the problem of underfunded councils in general, and it would incentivise them to choose the best places for new housing instead of the least fiscally damaging ones. Basic common sense - this is how they do it in Germany and they don't really have the same sort of housing costs that we do (except in Berlin where they are capping prices and so that will get worse).

4. We will be needing to meet all sorts of other commitments with this, if we're building new housing it must last for decades or centuries, so it ought to be regulated such that it doesn't get built on flood plains, none of it is connected to natural gas mains, plus other strict rules on materials and carbon footprinty stuff. some of this might require funding from central government.

5. Councils should be enabled to build and own social housing. That should not be an ideological move, it should be subject to guidelines informed by strict metrics to do with what housing types are undersupplied in their locale. This should not represent a construction boom to be followed by an inevitable bust either, councils should be allotted a budget to build small units every year, on a more or less permanent basis, and they can sell to tenants and keep that money for the purpose of building again. Gerrymandering is not a permissable objective here, nor is it allowed to accidentally design neighbourhoods such that rich and poor people never meet each other or send their children to the same school. Sometimes that means a rich council will be forced to use expensive land for cheap social housing, they will be expected to do so without bleating becase they have duties as well as incentives and they are expected to live up to them. This is the price of being given a huge boost to their discretionary funding (part of a decentralisation policy if we get that far).

6. This leads us to another issue that will be explained in greater depth momentarily. Neo-classic-egg-and-chips-liberalism does have this whole thing of not pretending policies come without downside, and this one does have a pretty big impact on a bunch of people who will respond badly. There is a noticable problem already with shitty landlords who cram too many Afghans and Romanians into cramped accomodation where they risk death by carbon monoxide poisoning. There is a strong risk that what I am proposing will make this worse in the short term. Therefore we must incentivise these landlords to sell the properties they cannot profitably properly maintain, and we can only do this with something of a reign of terror. Local councils will be permitted to issue court orders to summarily purchase at a fair under the circumstances value, any property which is rented out to private or social tenants on a dangerous basis. But they will also operate a good tenant scheme, with fast lane powers to evict tenants of either type who are destructively occupying a residence and making it uninhabitable for future tenants, which is a genuine problem too. All of that requires court enforcement still, and naughty abuses will result in suspension of such powers.

7. Before long, hopefully well in advance of anything happening, this should all make the banks which issue the buy to let mortgages to random amateur landlords have a good long think about that business model. Most of them will withdraw or else add onerous insurance requirements. This is a good thing, it's long overdue really. We have a generation of misguided investors who think that houses are effectively pensions, or else watch too much of that property flipping stuff on TV. The market will need to move back towards professionalism asap, because if we successfully address the problem, we will be fucking those guys over very badly (which is why more of them will resort to stuffing houses with too many people if they can get away with it). Adverts for mortgage providers always tell you that prices can go down as well as up, this policy is designed to stagnate them for a generation, that's a shit investment.

Neo-Classical-Robots-In-Disguise Brexit policy in a nutshell: Don't

Neo-Classic-Coca-Cola is at heart about implental rationality. Decide as a society what outcome you are working towards, then use a policy tool that can deliver that outcome. Brexit is a glaring example of the opposite principle, even where it looks superficially sensible in some details. If you must lie to a democratic electorate about the outcomes of a choice, you should regret any victory even if you are getting what you want.

It's not that Brexitting automatically will ruin the country in the long term, it's just that it's a half formed hare brained clusterSNAFU and there is reason to doubt that those people who voted in favour have been voting for what they will actually get (other than some nonspecific nope). The current Tory leadership is pursuing a bit of a neoliberal fantasy, but even if that were a good idea, they have wrapped in a nationalist fantasy for sale to an audience of elderly bigots, which makes a mockery of it. It is insane to take a whole democratic country into a project that will require massive discipline and very painful sacrifice in the hope of hijacking it to suit an agenda almost entirely at odds with what the voters who supported it believed they were going to get though.

There is potentially merit in what they propose at some level. Britain is a better hub of free trading internationalism than most of our European partners, and perhaps we could strike out alone. The economic theory behind the case for unilaterally dropping all trade barriers with the rest of the world and being effectively subsidised to consume imports at less than the cost of production if that is what foreign fools want to provide for us does make genuine sense. But that isn't what voters expected, they nearly all thought they were getting protectionism, and they won't be overjoyed to find that they are part of a laissez faire economic experiment instead. That's the most scandalous bait and switch I have ever heard of.

That policy isn't even the one that will be pursued because it is too tough a sell even to the ruling party. So instead, in the event of a no deal Brexit, they will attempt to do a set of trade deals with foreign countries on a piecemeal basis. That's worse, it will fail and then they will have to 'accidentally' end up with the unilateral laissez faire trade policy.

The Labour party flirted with a different justification for no dealing the Brexit. Namely that European competition law and state aid rules prevent us from building up state owned enterprises to run sectors of the UK market, blocking out commercial rivals from home and abroad. SOEs are a bad idea anyway, but that is not particularly relevant given that the EU rules in this regard are just the local codification of WTO rules, and also of the rules we would have to agree in order to get any sort of mutual trade agreement with any nation you care to mention. They seem to have given up on that now.

What the Tories do understand, but very few of the electorate does, is that the EU basically allows for the last vestiges of protectionism in our economy. We leave, those have to go or we keep them and become a poor country with little trade. I am not a fan of protectionism, and the free trade policy should be an easy sell to me. But even I think the impact of ripping off that sort of band aid in that sort of manner would be far too chaotic and costly to justify. If I can't be persuaded to go with this plan, what the hell is anybody else thinking?

So the best looking option is to ask for another two year extension on article 50 while we prepare a second referendum. Take that time to put it properly with an actual explanation of what changes result from which choices. Handily, in 2 years, enough new voters will have reached the age of 18, and enough old ones will have reached the age of dead to sway the outcome even if nobody pays attention to that sort of detail. The default will become a stay vote unless somebody can sell that laissez faire econoimic vision*




* Unless the Euro collapses in that time, taking down the banking systems of Italy and France, and all that stuff. We'll be less inclined to stick with Europe if that happens, and it's entirely possible.

FlashDangerpants wrote: ↑Sun Jul 21, 2019 1:15 amThis is roughly the insight that originally defines Liberalism, the belief that a market is working only when it serves the interests of the consumer. Socialism is more interested in the producer...

This really isn't my field, but is there any advantage to looking after the interests of the producers, thereby increasing their potential as consumers?

uwot wrote: ↑Sun Jul 28, 2019 5:00 pm

FlashDangerpants wrote: ↑Sun Jul 21, 2019 1:15 amThis is roughly the insight that originally defines Liberalism, the belief that a market is working only when it serves the interests of the consumer. Socialism is more interested in the producer...

This really isn't my field, but is there any advantage to looking after the interests of the producers, thereby increasing their potential as consumers?

Well producers is split between workers and owners, so if we intercede in some market to protect producers, the chances are that we did so because we were held hostage by owners threatening to reduce the number of workers. If we pay that ransom, the benefits typically get split in ways that we didn't really agree to. This obviously happens an awful lot, it really should happen less, but that involves explaining to your local union why you didn't fight a factory closure hard enough, and that's not easy.

But you have to remember the big economy is made of countless little markets. Employers are consumers of labour sold to them by workers. So that market needs to be healthy too. Businesses need to be able to employ people with the skills required to do the job. Workers should ideally have a healthy choice of employers to work for too.

That's obviously not the sense in which socialism prefers producers though. So a more important distinction is incentives. In a healthy market where producers compete for access to consumers, two companies that make fridges for instance must try to make better and cheaper fridges than each other, to the conumer's continuing benefit.

In a managed market, the producers don't compete so much, and this leads to a form of economic sclerosis where new products are not designed because there is no market force demanding innovation. In the Soviet Union, consumers had to compete with each other to buy crappy fridges. But the air force used to get really good jet fighters, because they were a consumer with market power and thus were able to make demands for innovation.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmWell producers is split between workers and owners, so if we intercede in some market to protect producers, the chances are that we did so because we were held hostage by owners threatening to reduce the number of workers. If we pay that ransom, the benefits typically get split in ways that we didn't really agree to. This obviously happens an awful lot, it really should happen less, but that involves explaining to your local union why you didn't fight a factory closure hard enough, and that's not easy.

Told you this wasn't my field and already I'm out of my depth, but do you think managed market education could prepare people?

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmBut you have to remember the big economy is made of countless little markets. Employers are consumers of labour sold to them by workers. So that market needs to be healthy too. Businesses need to be able to employ people with the skills required to do the job. Workers should ideally have a healthy choice of employers to work for too.

So what about guilds and unions? How do they feature in neo-classical-neo-liberalism? How little should a market be?

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmThat's obviously not the sense in which socialism prefers producers though. So a more important distinction is incentives. In a healthy market where producers compete for access to consumers, two companies that make fridges for instance must try to make better and cheaper fridges than each other, to the conumer's continuing benefit.

So consumer benefits are the guiding principle of neo-cl... fuck it, I'm abbreviating this to NCNL.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmIn a managed market, the producers don't compete so much, and this leads to a form of economic sclerosis where new products are not designed because there is no market force demanding innovation. In the Soviet Union, consumers had to compete with each other to buy crappy fridges. But the air force used to get really good jet fighters, because they were a consumer with market power and thus were able to make demands for innovation.

Yup. Soviet ICBMs were probably up to the job too. Competition is clearly good for innovation; I mean, who wants a crappy fridge? It doesn't seem to me that there is some standard you can set that could cover all bases.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pm That's obviously not the sense in which socialism prefers producers though. So a more important distinction is incentives. In a healthy market where producers compete for access to consumers, two companies that make fridges for instance must try to make better and cheaper fridges than each other, to the conumer's continuing benefit.

In a managed market, the producers don't compete so much, and this leads to a form of economic sclerosis where new products are not designed because there is no market force demanding innovation. In the Soviet Union, consumers had to compete with each other to buy crappy fridges. But the air force used to get really good jet fighters, because they were a consumer with market power and thus were able to make demands for innovation.

If you want a presently-unfolding cases study on large-scale free market failures look no further than the current Internet-of-Things ecosystem.

Mass-produced cheap electronics competing on price. Skimping on safety features because the consumer market does not know any better to demand it. What we have is a tragedy of the commons at global scale.

The competition is doing what competition does - driving costs down. Which is causing the demand to skyrocket.
Botnet operators are are hijacking IoT devices and have figured out ways to monetise it, so they are making the lives of other netizens hell.

None of that revenue goes back towards manufacturers or consumers, and there is no single point in the system where one could trigger a U-turn.

As far as bright minds and economists are concerned - it can't be fixed with carrots. It requires sticks and regulation.

uwot wrote: ↑Sun Jul 28, 2019 7:46 pm

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmWell producers is split between workers and owners, so if we intercede in some market to protect producers, the chances are that we did so because we were held hostage by owners threatening to reduce the number of workers. If we pay that ransom, the benefits typically get split in ways that we didn't really agree to. This obviously happens an awful lot, it really should happen less, but that involves explaining to your local union why you didn't fight a factory closure hard enough, and that's not easy.

Told you this wasn't my field and already I'm out of my depth, but do you think managed market education could prepare people?

For the workers threatened with redundancy? Sure, it's standard neo-liberal and liberal policy in general to provide training for workers, liberals are big on education in general and always have been. We tend to view provision of these as something the state should guarantee and underwrite (whether the training itself is supplied via a community college or a paid 3rd party is less relevant to us).

uwot wrote: ↑Sun Jul 28, 2019 7:46 pm

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmBut you have to remember the big economy is made of countless little markets. Employers are consumers of labour sold to them by workers. So that market needs to be healthy too. Businesses need to be able to employ people with the skills required to do the job. Workers should ideally have a healthy choice of employers to work for too.

So what about guilds and unions? How do they feature in neo-classical-neo-liberalism? How little should a market be?

Unions are cool, the workers are providers of labour and the companies are buyers, but monopsony power in such relationships is very common (monopsony is a situtation where there is only one buys, so the buyer has all the power, like a reverse monopoly). So, yeah, the workers should be able to stand up to that in some fashion, which involves unions, ombudsmen and all the rest.

Guilds can be different. Traditionally those are associated with closed professions, trades which can be plied by cosseted insiders but not any old joe. This can be good in cases where the profession needs some power of expulsion for bad actors (nobody wants an unqualified doctor, or a lawyer who ignores conflicts of interest). But sometimes professions are closed for spurious reasons to line somebody's pocket at the expense of consumers...

Taxis are probably the most commonly cited example. If you go to London, the licensed taxi drivers had to do a pointless test by modern standards of learning all the routes to every street in the city. Go to Germany and htey had to pass some advanced driving test. In Athens, your taxi driver just had to buy a car and a license - the license being his pension as he will sell it when he retires for the price of quite a large house. That there are sooo many competely different ways of limiting the number of licensed taxi drivers in use today tells us that the point is the limiting, not the published rationale.

You might think running a closed shop for taxis is still sensible, even though it burdens them with all sorts of costs that grant Uber a competitive advantage, and I wouldn't necessarily disagree. But there is somewhere in America you need a special license to do cornrow hair styles, and that's arguably less of a boon to society, and more of a revenue grab.

uwot wrote: ↑Sun Jul 28, 2019 7:46 pm

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmThat's obviously not the sense in which socialism prefers producers though. So a more important distinction is incentives. In a healthy market where producers compete for access to consumers, two companies that make fridges for instance must try to make better and cheaper fridges than each other, to the conumer's continuing benefit.

So consumer benefits are the guiding principle of neo-cl... fuck it, I'm abbreviating this to NCNL.

Once upon a time that would probably have been accurate for classical liberals. In those days unrestricted trade was so rare that there was no reason to suspect any downside. But since those days (let's say 1840s) we've had multiple massive market crashes caused by borrowing to invest; there's been starvation caused by overzealous application of free market principles; the role of agriculture in the economy has fallen further than could possibly be imagined at the time and therefore more people have needed jobs to buy food than was anticipated .... basically that has become one concern among many. It has always been one to ignore only at great peril though.

uwot wrote: ↑Sun Jul 28, 2019 7:46 pm

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmIn a managed market, the producers don't compete so much, and this leads to a form of economic sclerosis where new products are not designed because there is no market force demanding innovation. In the Soviet Union, consumers had to compete with each other to buy crappy fridges. But the air force used to get really good jet fighters, because they were a consumer with market power and thus were able to make demands for innovation.

Yup. Soviet ICBMs were probably up to the job too. Competition is clearly good for innovation; I mean, who wants a crappy fridge? It doesn't seem to me that there is some standard you can set that could cover all bases.

Yeah, my lot goes for a balance. The preference being uninterrupted free trade where that works, and then regulation where it doesn't, finally state monopoly would come in where markets make no sense at all. We tend to do so with a preference for Anlgo Saxon common law as opposed to the continental system though.

What that means in short terms is that if you want to make and sell a product, set up a micro brewery for instance, under common law we say yes, please don't lie about what's in your beer. If you want to put raspberries in your beer, just mention it onthe label and you're good to go. Under the continental system, beer has set ingredients such as water, and malt barley or hops or whatever. Raspberries are not an ingredient on the list, so you have to petition somebody to allow you to call your thing beer. Neo-Epic-Shitshow-Liberals like the former model of regulation on the whole (this offer does not apply to medical devices or nuclear power stations).

Skepdick wrote: ↑Sun Jul 28, 2019 7:55 pm

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pm That's obviously not the sense in which socialism prefers producers though. So a more important distinction is incentives. In a healthy market where producers compete for access to consumers, two companies that make fridges for instance must try to make better and cheaper fridges than each other, to the conumer's continuing benefit.

In a managed market, the producers don't compete so much, and this leads to a form of economic sclerosis where new products are not designed because there is no market force demanding innovation. In the Soviet Union, consumers had to compete with each other to buy crappy fridges. But the air force used to get really good jet fighters, because they were a consumer with market power and thus were able to make demands for innovation.

If you want a presently-unfolding cases study on large-scale free market failures look no further than the current Internet-of-Things ecosystem.

Mass-produced cheap electronics competing on price. Skimping on safety features because the consumer market does not know any better to demand it. What we have is a tragedy of the commons at global scale.

The competition is doing what competition does - driving costs down. Which is causing the demand to skyrocket.
Botnet operators are are hijacking IoT devices and have figured out ways to monetise it, so they are making the lives of other netizens hell.

None of that revenue goes back towards manufacturers or consumers, and there is no single point in the system where one could trigger a U-turn.

As far as bright minds and economists are concerned - it can't be fixed with carrots. It requires sticks and regulation.

I'd be rather cautious of using regulators to guarantee IoT security. I would like to see some legal responsibility to make firmware updates available, and quit leaving hard coded root passwords for wide open shells on the damn things.

But to get nannycams certified to QA standards previously reserved for aeroplane components (which still don't always work as we learn every now and then) is incredibly time consuming not to mention costly. There is the risk that good actors will be pushed out of the market while cheap bad products from unregulated markets in the far east will just return us to bedlam, complete with root/pa$$word combos.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 9:01 pm I'd be rather cautious of using regulators to guarantee IoT security. I would like to see some legal responsibility to make firmware updates available, and quit leaving hard coded root passwords for wide open shells on the damn things.

But to get nannycams certified to QA standards previously reserved for aeroplane components (which still don't always work as we learn every now and then) is incredibly time consuming not to mention costly. There is the risk that good actors will be pushed out of the market while cheap bad products from unregulated markets in the far east will just return us to bedlam, complete with root/pa$$word combos.

The demand and supply are spread across borders. There's no global authority or universal legal framework to hold anybody to account. China is certainly not going to hurt its local manufacturers or export revenue.

So now Europe is trying to regulate its consumers in an attempt to protect them from themselves by drafting import standards/regulations on IoT imports.

Is it going to work? Time will tell. Even if Europe stops buying cheap, insecure IoT - the rest of the world won't.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 8:52 pm

uwot wrote: ↑Sun Jul 28, 2019 7:46 pmTold you this wasn't my field and already I'm out of my depth, but do you think managed market education could prepare people?

For the workers threatened with redundancy?

Yay for that, but I was thinking more along the lines of more generally and earlier; something like 'Hey kids, the chances of you having a job for life aren't great. Here's why and here's what to do about it.' A bit more politics and history in PSHE. Bound to upset a load of people, but fuck 'em. And while we're at it, how about X rating religious services - over 18s only?

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmSo, yeah, the workers should be able to stand up to that in some fashion, which involves unions, ombudsmen and all the rest.

Splendid.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmYou might think running a closed shop for taxis is still sensible, even though it burdens them with all sorts of costs that grant Uber a competitive advantage, and I wouldn't necessarily disagree.

Hmm taxis. I dunno, if people think there is some advantage to driving around London on a moped for a year, let them. But in terms of 'the knowledge', how much of a shitfest would it be to shift from the letter of the law to the spirit of the law? Maybe increase jury size, not to Athenian scales, but a fair(ish) selection of your peers.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmBut there is somewhere in America you need a special license to do cornrow hair styles, and that's arguably less of a boon to society, and more of a revenue grab.

Didn't David Beckham have that once? Maybe we should just insist on a license to sport one.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmThe preference being uninterrupted free trade where that works, and then regulation where it doesn't, finally state monopoly would come in where markets make no sense at all.

Can't argue with that.

FlashDangerpants wrote: ↑Sun Jul 28, 2019 6:02 pmWe tend to do so with a preference for Anlgo Saxon common law as opposed to the continental system though.

What that means in short terms is that if you want to make and sell a product, set up a micro brewery for instance, under common law we say yes, please don't lie about what's in your beer.

My dad, who was Dutch, used to rail against the EU for its attitude to British sausages, but then he was quite apt to fall for conspiracies. I'm pretty certain that you can't build your own Café Racer in Germany (or Chopper, if you are that way inclined). Something to do with 'type approval' as I remember. Yeah, I like our way better. I think what I was getting at above amounts to applying common law to law.

uwot wrote: ↑Mon Jul 29, 2019 10:11 am

FlashDangerpants wrote: ↑Sun Jul 28, 2019 8:52 pm

uwot wrote: ↑Sun Jul 28, 2019 7:46 pmTold you this wasn't my field and already I'm out of my depth, but do you think managed market education could prepare people?

For the workers threatened with redundancy?

Yay for that, but I was thinking more along the lines of more generally and earlier; something like 'Hey kids, the chances of you having a job for life aren't great. Here's why and here's what to do about it.' A bit more politics and history in PSHE. Bound to upset a load of people, but fuck 'em. And while we're at it, how about X rating religious services - over 18s only?

Or just raise the school leaving age by a couple of years and force the little bastards to learn how to construct algorithms. But I really don't think many teens are leaving school with their grandad's assumptions about working one job for life anyway. Except the ones that want to be hair dressers, that must be just about the safest career you could pick.

But we aren't a particularly judgmental bunch, we assume pretty much everybody is likely to make a poor choice somewhere along the line, so we recommend giving folks opportunities to change direction with a little bit of a hand up now and again. For some people that means offering rehab sadly, or some sort of educational initiative for prisoners. But for most it's just a plumbing course at the local technical college. All of these options are nicer than not offering them, and they all save taxpayer cash as well, so what possible reason is there to not want to do it?

FlashDangerpants wrote: ↑Mon Jul 29, 2019 8:50 pm... I really don't think many teens are leaving school with their grandad's assumptions about working one job for life anyway.

I dunno. I used to be a teacher, and when you asked the little bastards what they want to do with the rest of their lives, none of them have a list.

FlashDangerpants wrote: ↑Mon Jul 29, 2019 8:50 pmExcept the ones that want to be hair dressers, that must be just about the safest career you could pick.

Well, the curriculum is predicated on service industries. So the goal is to turn out annoying little twerps who ring you up to ask whether you have any credible PPI claims, and then to change careers and become annoying twerps who ring up and ask whether you have been in an accident that wasn't your fault.

FlashDangerpants wrote: ↑Mon Jul 29, 2019 8:50 pmBut we aren't a particularly judgmental bunch, we assume pretty much everybody is likely to make a poor choice somewhere along the line, so we recommend giving folks opportunities to change direction with a little bit of a hand up now and again.

Yer wouldn't know it listening to the average Christian nutjob, but even jepus said 'Let him who hasn't fucked up cast the first stone.'

FlashDangerpants wrote: ↑Mon Jul 29, 2019 8:50 pmFor some people that means offering rehab sadly, or some sort of educational initiative for prisoners. But for most it's just a plumbing course at the local technical college. All of these options are nicer than not offering them, and they all save taxpayer cash as well, so what possible reason is there to not want to do it?

Quite.