March 05, 2004

• I love Reason. I'll have to print it out and read it later. Thanks for the link.
• I was reading through this, and realised that as far as I as concerned, there is no real debate. All of the commentators are extreme economic libertarians - where is any dissenting view? Maybe the publications does not allow for one. They all assume that economic libertarianism would lead to greater wealth for all. Economic history, while not fully conclusive (it's only been 200 years of Smithian capitalism, of course), nonetheless has more evidence against unregulated markets than for. The wealth of the nineteenth and twentieth centuries was based on a) imported wealth from the economies, including based on slave labour, that lead to be b) industrial and mass production. This mass production is still reliant on our overuse of natural resources, even to the very fields we over fertilise to grow our insane surpluses of corn in; our wealth and rate of consumption is still based on cheap imported goods whose makers see little of the prosperity capitalism was supposed to bring them (see any discussion of Walmart in the last few years). Even within Europe itself, the unregulated markets of the nineteenth century increased wealth for some, but generally just increased inequality, such that by the end of the century many who had been against government intervention were forced to change their mind. The Liberal Welfare reforms were not a sudden "socialist bender" but a desperate attempt to stem the nearly overwhelming poverty of the aged and the working poor - those who worked their whole life, only to never be more than a paycheck away from penury. This is also the legacy of the great growth of nineteenth century capitalism, and yet, compared to the farmers and workers in the colonies, these were the lucky ones.
• Thus, I find it strange that "liberty" must mean primarily economic liberty. Because I believe that humans are naturally social creatures, I have always believed that personal liberty is not the right to do anything that may affect the group, including overly profit driven business practices, but simply the freedom to do what clearly has little to no effect on the group, or in another formula, that which the loss of would hurt you far more than the group would be benefited. These include freedom of conscience, freedom of speech, freedom of sexuality with adult consenting partners. There will always be tensions between the needs of the group - including the group in the wide scale as the nation, even as a human race - and the desires and needs of the individual. But neither can take precedent; rather they need to be, and are continually, negotiated and compromised for each other. We pay taxes, some of use more willingly than others, because someone we or our parents elected believed that society would be improved by allowed a social institution (the government) to ameliorate a social problem (inequality, oh yeah, and to pave roads). Many of us still believe that this is a really important goal, because we can never even come close to claiming that we live in a democracy or that people have opportunity when faced with such patent inequalities of opportunity. /derail: I find the inequalities of opportunity still glaring, but at least now a poor person of unusual ability might be able to gain what mediocre middle class people take for granted. When talking about lack of achievement, educationally or monetarily, among poor people, perhaps it is best to remember that no one in our world begins at the same place - social mobility may be possible, but it is a damn sight harder than simply maintaining your social position. That the majority of poor might fail to "lift themselves up by their bootstraps" is not something for people who had their boots handed to them to judge. Basically, when we talk about "liberty" - whose liberty are we talking about? Liberty to or liberty from? Liberty to engage in economic practices, or liberty from coercion to work for less than you need to support yourself, let alone your family? (Remember, when all employers pay the same pittance, there is no choice to be made - and our world is predicated on a constant level of unemployed, and always has been). Do we really want to go back to the world of the nineteenth century? I thought that this comment, by David Friedman, was insightful: "It is easy for both libertarians and socialists to claim to support their principles whatever the consequences -- when each group believes the consequences would be, on very nearly all dimensions, the most attractive society the world has ever seen." But the truth is that we have seen the consequences of Smithian and libertarian economics, and we have seen the consequences of fully state directed economies (never really communist, but really more State capitalist, and also with totalitarianism which has happened this century in communist and capitalist countries alike), and neither of these worked at all well. Both extreme capitalism and extreme communism claim to be able to provide utopias, but they both end up making the people serve the market. We must break out of the mold of thinking between these two dichotomies and find a middle way - we should make the market serve humanity and human liberty. Good books on 19th century economics and the origins of the welfare state, respectively. Mike Davis. Late Victorian holocausts : El Nino famines and the making of the third world. Pat Thane. Foundations of the [British] welfare state. *All uses of the word "we" refer to radiating circles around myself, including North Americans, the whole "developed" world and the human race in general, depending on the context.
• I'd say that Epstein and Barnett are pretty moderate, jb. Your perspective and priorities, while fascinating, are utterly alien to me. (What was imported wealth from the economies? From the colonies, you mean?)
• Oops, sorry - that's what I meant, Goetter, from the colonies. Socioeconomic history is my focus in my PhD. It does give me a very different perspective - I don't study economic theory per se, but rather the effect of economic change on the lifestyle of people. I am currently doing a course on charity and social welfare in the nineteenth and twentieth centuries, though my own focus is the seventeenth and eighteenth Europe (England to be specific). I've been studying more about colonisation and development almost by accident, as I took a course on agrarian societies last term in which we read a great deal about farming from all over the world, including in colonial India and Africa. But I have found it very important to learn, because to do European history without the colonial history is to ignore a great deal of the true story, as the economies were heavily intertwined.
• And I should have read Barnett's piece more carefully. I had read Epstien's and the two other comments at the bottom. Rereading Barnett, I am confused by the concepts of "free-riders" and "hold-outs" - can anyone explain these to me? I supose they are a kind of jargon in the discussion. Perhaps I should not have said extreme, but in my world, the automatic acceptance of free markets as an ideal system is very unusual. Most moderates I know accept that markets are so complex that no human agency can ever hope, as was tried in the USSR and in Maoist China, to fully direct them (instead they fall apart). Yet unregulated markets have equally as many problems, as shown by our own history. Thus the middle way seems to be a free, but regulated market (eg minimum wage, price controls on such items that are necesary to life and thus consumers are not free to not consume, such as the cheapest housing, etc.) In truth, the free but regulated market is what exists in most of the developed world, to one degree or another; the highest quality of life indicators are generally found in countries following this moderate path. (and Canada has slipped more points - shame, shame). So what do other people see as the meaning of liberty?
• Hehe. Did I touch a sensible commie nerve in you jb? Didn't mean too. I'm with you jb. There's no way that unregulated markets could work due to both the naturally egoistic nature of human beings and our shortsightedness. We can barelly predict how our own decisions will affect our lives. Much less in the life of others. But also goverments fall short to function perfectly as communist entities by the very same resons. That's why there must be an equilibrium in form of regulated free-markets and self-restrained governments. In wich level those regulations should work is what we are still figuring out. What you say about welfare states functioning properly in northen european countries (like sweden) is somewhat bogus because their economies depend almost entirely on exporting services and importing resources. With almost half their GDP comming from the services sector. This means that they still depend on much lesser economies for their own welfare, not only in a model government (which mostly they have). So, what I think is the meaning of liberty? Liberty is depending in our own resources (body, brain, money, personal belongins) to achieve our own welfare. The less we can depend on those resources (by lack or limitations on their use) the less liberty we have.
• Not at all, Zemat, I was just reacting to the very different world of the Reason magazine. But to follow on your point, could the institution of private property be the ultimate limit on liberty, in that it limits our ability to use our bodies and brains to achieve our own welfare.?* The protection of private property is one of the major limiting liberty functions of government (police, jail, etc). NB: I'm just following this to a theorectical extreme, not proposing a real world situation.
• Indeed. There's always a trade-off between different kinds of liberties. If you want private property you must summit to some degree of control by the government to insure the safety of those assets, or lacking a government, you must defend them by your own hand, which is more liberty than most people can handle without risking their welfare or the welfare of others.
• I was also thinking of the extent to which the monopoly of private property prevents others from using the ability of their bodies and brains to achieve their own welfare. Land monopolgy in an agrarian society is a very obvious example of this. Without land, a farmer is not at liberty to exercise his body and brains to provide for his own welfare.
• The free rider problem is what you get when most people contribute to a solution, while some people (or entities) avoid the contributions and reap the benefits anyway. Consider a supermarket owner who aggresively (but legally) avoids paying taxes in a country where gneral taxation pays for education and roading. Supermarket employees must be literate and numberate; the supermarket is supplied by trucks. However, the public schools that educate and the public roads the trucks run on are being paid for by the customers and other businesses, to the benefit of the supermarket owner. A couple more examples with definite real world backing: New Zealand has a good(ish) public healthcare system. We also will deal with emergency/urgent medical problems for our visitors, and people born in New Zealand are eligible for citizenship. This has lead to a flood of (typically US) "tourists" who come here late in their pregnancy, have a baby on the New Zealand taxpayer's dime (because it is cheaper, and apparently better, than staying at home), and skip out without paying the bill. Or vaccination: more and more people in the developed world are refusing to have their children vaccinated, because they don't want to take the (typically very small) risks associated with such vaccines. They figure that so long as everyone else gets vaccinated, their kids will be safe, so why bother? The problem with free riders is that it can become compelling behaviour, either because other people see the benefits, or by destorying the social cohesion necessary to convince people to contribute (in other words, I stop paying for public education because I don't want to let someone else "get away" with not paying); either way, as behaviour spreads, systems can collapse: the vaccination is a good example. If only, say, 5% of parents with children at high risk of reacting adversely to a vaccine do not vaccinate, their children will almost certainly be safe from the disease, since it will never gain a purchase in broader society. If, on the other hand, the rate of non-vaccination grew to 30+%, the disease may become entrenched in the broader population and the non-vaccinated children will be decimated (this is actually in danger of happening in some Western nations, particularly with high rates of immigration from countries without vaccination programs).
• (this is actually in danger of happening in some Western nations, particularly with high rates of immigration from countries without vaccination programs). TB is making a comeback in Britain. Immigrants who come here haven't been immunised usually, and there is enough TB carriers in the British population to pass it on to them without fail, seemingly. (The obvious solution to this would be to immunise people as soon as they entered the country, but our rather rabid anti immigrant newspapers would probably kick up such a stink about about free immigrant healthcare or something that it'll never get done).
• jb, you are assuming two things. First, that private property, even if regulated, will lend itself to monopoly. Second, that, given that a farmer has his share of land thanks to some kind of governmental distribution, he will be willing to work it instead of trying to sell it (if he has the liberty to do so). Also, you are implying that a farmer can't have the freedom to work the land of someone else for a salary and many other benefits usually associated with employment. Of course, it could happen the way you put it. But it doesn't have to happen just because there exist private property. The liberty of having private property must be regulated, so that other kind of liberties for other individuals could be achieved. Governments, in my opinion, should do as much as they can to allow it's own people to achieve their own welfare, but not provide welfare other than what is needed for individuals to achieve what they want without afflicting third parties. That is, giving them the liberty (empowering them) to reach their own welfare as they see fit.
• Thanks rodgerd, that's really clear. I've always thought that free riders, so long as they are few, do not matter much, particularly as I was thinking of free riders only as receiving welfare or healthcare benefits (which costs very little). But free riders in the situations you described certainly do pose a problem, especially if there are more than a few. Are there any proposed solutions to the problem of free riders?
• Zemat: it has been my historical experience, as well as that of others, that when land is scarce, it will slowly accumulate into monopolies. Small farmers are always at risk of crop failure, and are disadvantaged by market swings in prices, such that they can be forced to sell when prices are low. This is particularly so if they owe large rents or taxes, or cannot support their families off what they grow. It is possible for large farmers to also fail, and their land to break up. But it seems to happen less often, as they have more of a cushion. Great estates, until they were specifically taxed as in modern Britain, also rarely broke up, even if the family sold them wholesale to another landlord. This kind of accumulation happened in Britain between the sixteenth and early nineteenth centuries - not that small farmers disapeered, but that the greatest percentage of land was held by fewer and fewer people as time went on. (Of course, when land is not scarce, as in colonial or nineteenth century North America, this kind of accumulation will not occur. I would be interested to see what happens in the next century, though.) China also had similar problems before land redistribution. Yes, farmers, especially on the outskirts of Shanghai, did sell their land to developers rather than farm it. But I would think that this is an unusual circumstances, and in a changing economy (it was during the 1980s, when China was becoming capitalist, though still not democratic). My main point had been that the proposition that one has the "ability to use our bodies and brains to achieve our own welfare" on rests access to the tools and resources to do so. Land monopoly in a pre-modern agrarian society (where the majority of people are farmers or working in agriculture) was just a simple example of how private property could interfeer with this. One could work for wages, but this often comes with a distinct disadvantage, as many wage labourers, particularly in agriculture, have been historically paid so little that there was no possible way for them to improve their own or their families' welfare. (For a particularly poignant example of wage labouring in nineteenth century British agriculture, see the second half of Tess of the D'Urbervilles). Sharecropping has traditionally had similar problems. The issue of the nature of wage labouring is something I am very interested in, as I study the period in which it became more and more dominant, over working ones' own land or business. Though I have just begun, all that I have read suggests that it puts the worker at more of a disadvantage. The loss of access to resources does lead to a loss of liberty, and a loss of either some or most of the benefit derived from your work. Things have changed in this century, through concious decisions to ameliorate the process. Okay, I know I've probably been outed as a Marxist, but I'm actually not. I have never read most of Marx, though I plan to this term as a part of studying nineteenth century ideas about economy and poverty. I am also reading de Tocqueville. I had, in fact, repudiated Marxism in my scholarship because of his very teleological historical analysis, but I have since, because of my study of early modern Britain, wondered if his analysis of the effects of wage-labouring on the quality of life of labourers might be more accurate than I had thought. He should be taken as any other social thinker - neither outright repudiated nor followed dogmatically, but subject to criticism.
• jb, I would never use China as an example of land distribution solving any problem (I'm joking I know their famine is not due to land distribution but to insane imposed practices). Granted, I agree that private property, at least in the case of agrarian societies, tends to form accumulations of land resources in few hands. But is that so bad? You said that larger farmers have greater posibilities of surviving crop failures and market swings, but smaller farmers can't without governmental aid. This means that land wish was owned by small farmers could end abandoned while larger farmers could eventually recover those lands. Thus, in overall, greater farmers are beneficial for the welfare of a country as a whole (up to a point). We still have the disavantages of farm employment. In this regard, just because, historically, the tendency has been that farm workers are abused doesn't mean it has to end that way always. We are supposed to learn from history. As you asserted, employment conditions in farms have been bettered thanks to legislations in some nations. Damn, I wish I had more time to write something more ellaborated since I think I sound quite simplistic but I have no fresh references in my mind (nevermind the fact I never formally studied economics or history). Thanks jb for not abandoning the thread despite that I take so much time to reply.
• I'd like to thank both of you - jb and Zemat. And rodgerd, too. Its been a fascintaing discussion. (This all sounds appallingly sycophantic, but it is meant as genuine praise). Cheers
• Whoops, I inadvertedly turned this thread into another group-hug discussion (I'm kidding, dng).
• Its alright Zemat. I've been drinking, and Man U just lost, and I am happy. Ha!
• Actually, I'm afraid I know a lot less about farm labouring post 1850. (Ah, the limits of a history education - Everything you know is so dated!) My knowledge of wages increasing to what is commonly called a "living wage" (ie, you can live on it) is based on a layman's knowledge of twentieth century industrial history. But I have also heard (on the general grapevine) that current agricultural labourer wages are still terrible - we just don't talk about it much as most are migrant labourers, many from other countries. Question is: is this because farmers are abusing their power to keep profits to themselves? Or because farmers are already to the bone and have no more money to pay until we start paying more for food? Much of North American farming has also been mechanised - to the detriment of our environment and our tastebuds (both equally important :) Mechanisation has also meant that small farmers are under more pressure to invest in very expensive equiptment and fertilisers. Some have suggested demechanisation as a solution to both the environmental/investment and urban unemployment issues, but if people did return to working the land, would they be paid enough? Or would they go back to 1930's living conditions? I too, would like to be hopeful, but at the same time look at what is happening and get disheartened. And...I've fully derailed the thread. I'm sorry. Please feel free to ignore and go on talking about liberty. My whole original point was to ask if liberty could exist in a world with economic inequality, or whether economic inequality itself limits liberty. But please do not let my obsessions keep the conversation from going in the direction of other discussions of liberty. PS: Yes, the Great Leap Forward was a terrble disaster, killing perhaps 20-40 million people (vague on numbers). If I remember back to undergrad Chinese history correctly, the early years of peace and land redistribution (circa 1950-1955) were better years, because crushing rents were lifted and very small previously scattered plots were consolidated (thus bringing into cultivation land that had been taken up by paths and borders). But, as you mention, when the government started massive collectivisation and telling people how to grow things, things went very bad, very fast, culminating in the great famine (there are also natural causes that coincided, but the government actions made them worse). Interestingly, land redistribution (rather than collectivisation) has been a part of some Confucian thought for centuries - Dong Zhongshu had proposed this to one of the Han emperors in the first century BCE. On Preview: Man U lost? Damn! And a curse on you and all your children, dng! (A really mild curse, like having peanut butter always stick to the top of your mouth.)
• I hate peanut butter though. That sounds like a real curse. A real evil curse.
• There you go, jb, apologising again. Didn't I tell you it was a bad habit of yours? Seriously, though. I found the Reason debate tedious in the extreme, but this thread has been fascinating. Please feel free to inflict your "obsessions" on us. This monkey doesn't mind.
• The US farming idustry is actually a great example of land aggregation; the overwhelming bulk of US farming in areas like grains, darying, and beef is in the hands of large corporates, and family farms have become less and less common. Here in New Zealand we had the problem that after the first rush of early British settlers - Scots, poor English, and Irish - Europeanised the country, English aristocrats began to send their younger sons here with big purses and instructions to buy up the land and create another Britain, with all the land in the hands of a few dynasties. The response was to pass laws breaking up the estates already formed and to resrtict total ownership of land.
• I hope I won't come out as an anti-environmentalist but I do aprove of mechanization in every process, including farming, because the end of mechanization is to improve not only the production levels but also reducing waste and deterioriation of the environment. Of course I agree that current levels of mechanization in farms are harmful for the environment but that's because almost nobody has bothered to improve them. Either farmers don't care about the environment or don't care about mechanization. When they should care about both, and taste ;) Taking a step back to the previous point, Farm worker wages and living conditions have improved depending were you look at. Farm workers in developed countries, were mechanization is implemented to some high level (remember, almost all decent farmers at least have tractors), fare better with their lifestyle. On undeveloped countries, where mechanization almost doesn't exist and more workers are required to produce same outputs, overall wages and living standars are worse than historically have been. And I don't blame lack of mechanization only, but the ever increasing levels of food demands, decreasing of arable lands (due also to a lack of technification), and global competition with better farm products from developed countries. What about al the rural folks that end forced to move to the big cities out of economic necessity? I just don't know. But the world changes, nations than depended entirely from agriculture have turned to industry and services. Taking a step back even further, I don't believe that economic inequalities imply a lack of liberty. I personally believe there are many kind of liberties and, as I said in a past comment, people have to trade off between distinc kind of liberties. Laws are supposed to define how our distinct kind of liberties apply in every situation to ensure we can reach our desired level of welfare without risking the welfare of others. People with too much economic power may apparently have more liberty but also should have more economic responsibility (something the folks from Enron apprently didn't know). Law should be there limiting their liberty to ensure they meet those responsibilities, I think.
• Actually, Zemat, the biggest environmental problem in modern (first world) farming is agricultural subsidies. By distoring the value of outputs, they encourage the use of irrational decisions. Nitrates in rivers is a good example here; run-off from excess fertiliser is the culprit. In a rational economy, a farmer will avoid applying more fertiliser than is actually absorbed by pasture, since fertiliser costs money, and fertiliser application quickly hits a point of dimishing returns. In a subsidised economy, it makes sense to over-apply fertilised, since even marginal gains can reap a reward.
• How do you solve the problem of subsidised economies? Turn to libertarianism, HA! I'm kidding. I think that a libertarian economy could spawn even more irrational decisions based only on short and local gains.