They boil down to much the same thing, in the real world.
Because our attempts to turn it into a free market extremist’s ideal failed miserably. Privatizing everything, freeing the market of nearly all all constraints and standing back waiting for a miracle didn’t result in a paradise; it just destroyed the economy and created massive corruption. Iraq was supposed to the the Grand Experiment of the free market fundamentalists that would prove once and for all the uselessness of government and the miraculous powers of an untrammeled free market; instead, it simply did that much more damage to the country.
It’s a major reason why they are still a disaster area. We wanted the Magic Free Market to turn Iraq into a paradise, so we tried to impose a laissez-fair system on them. The result, naturally, was disaster.
OK, wait, Der does seem to have a point somewhere in there, even if he then raves on absolutizing the notion.
Say you have your Laissez-Faire society – The opponent asks: WHAT prevents the first generation of folks who gain wealth and power under L-F from then blocking everyone else from the goods? The quick answer to that, from the proponent, should be that in such a case then the first group has abolished * the Laissez-Faire system and turned it into their own fiefdom (sort of the “one-man, one-vote, ONCE” disease that affects some “liberation movements”). In effect, when most people talk about the blessings of an true L-F society, they’re still presuming the existence of Rule of Law not talking about law-of-the-jungle anarchy (after all, your freedom to make your bread is not much good if can steal it with impunity). IOW they ARE presuming that you still have to make your own way however you can BUT still Big Bucks Guy cannot enforce an absolute blacklist that makes you absolutely unemployable unless you deliver your daughter… or at least they presume that you can still flee that potentate and move to a friendlier town. Now, if people want to argue that the existence of “rules” in the system means that you do NOT have true absolute freedom, well, sure. But who does,then? (Skeptics are welcome to claim that this is the converse of the oft-derided argument that no real-world “communist” state was ever really communist)
*
Inequality is a necessary byproduct of social, political and economic freedom. Opression however, isn’t. But making sure it isn’t so is a sociopolitical decision, justice does not happen spontaneously.
What tends to happen in a Laissez-Faire system is that wealth tends to collect is a few places. Most industries don’t exist for long in a perfectly competetive market. They tend to consolidate down to a few major players and once that happens, economies of scale make it difficult for newcomers to compete.
The problem is always that the company has a more power than the workers. It is far more disruptive on the workers to lose their job than it is for the company to lose a few workers. There are very few protections for workers, especially middle class white collar workers, in America. You can be pretty much terminated for any reason. So you basically already have what amounts to a fuedal system where if you don’t do everything asked of you, no matter how nonsensical, you are at risk of having your livelihood taken from you.
The reason we have rules is (or should be) to attempt to preserve people’s individual freedoms. Without rules, we are only left with the freedom of the strong to dominate the weak.
The other problem is that we are becoming a class society and the distinction between the classes is getting more pronounced. Much of this is a result of our education system. The public education system is increasingly becoming a network of facilities for warehousing retards. Those with means can send their kids to private schools that often have much better facilities and a higher quality of education. Not to mention that they are around other members of the more successful classes so they learn the behaviors that will make them more successful as well. Those with the intellect and financial ability go on to college. Generally the better you did in high school and the more money your family has, the better the college you can get into. The better the school you go to, the better your career opportunities and so on.
So if you want to improve income inequality, you need to work on breaking down some of the barriers that prevent low income people from ever receiving the education they need to make themselves successful.
Perhaps an example from history of this would be nice. The general business history of the U.S. contradicts this pretty nicely. How big are the “Big 3” in the auto market now? It certainly wasn’t government action that led to their decline but competition.
Have you ever held a job? It’s very disruptive to terminate employees (at least competent ones). The hiring process is tedious, training people costs money, there is always lag time for new employees to catch up.
Even in unskilled jobs the employer pays a cost for employee turnover. My aunt owns a hardware store and, unfortunately, has a lot of turnover due to both her inability to pay well and the lack of decent workers where she lives. She would love it if she could have a stable work force. The cost she incurs (both monetarily as well as otherwise) is pretty high when she loses employees.
Your view on the workforce bears little resemblance to reality.
Again, our conceptions of freedom are radically different. To me, freedom does not impose any duty on others. In your formulation, a worker is only free if he can force someone else to employ him, even if the employer does not want to do so. How is forcing someone else to do something freedom?
And the notion that you are only truly free when you can act on every whim is a ridiculous notion of freedom. Somehow you are not free because you do not have the means to own a helicopter, even though no one is stopping you from doing so? By that definition, no one is free, even the richest person. After all, it’s not as if Bill Gates can act on his every whim. Even if he had an unlimited amount of money he only has a finite amount of time that imposes limitations.
Freedom means that no one can stop you from doing what you want, as long as you aren’t hurting someone else. It does not mean that someone is obligated to give you whatever you want.
Since the tax code was made flatter under Reagan, the difference between median net worth and mean net worth has grown significantly. This is because the rich are getting very rich indeed, which is skewing the mean upward. At the same time, median net worth has grown significantly, but not nearly as fast.
It should be pointed out that those numbers are dated now. I’ll bet the 2004 median was largely a product of home equity, which has shrunk considerably (and continues to shrink) with the collapse of the real estate market. I’d be willing to bet the median is significantly lower now.
Again, there isn’t an argument (let alone a cite) anywhere here. It’s just a longer list of proclamations. Iraq is not a satisfactory example for whatever you think was going on because of the huge, glaringly obvious, and unrelated problems faced by the country.
From experience I know that that is in fact the quick answer you’re likely to receive, and I grant that it’s an unsatisfying cop-out in all but a theoretical sense. However, I disagree that a L-F society (or something close) is likely to abandon the rule of law. Why would that be so? (I mean, why would it be so to a greater degree than it is, say, in the United States, where money can insulate you from the law to one degree or another?)
This is basically what happens (and has happened) in mixed economies like the U.S. and Western Europe. It’s not necessarily a bad thing. Yes it becomes more difficult for new businesses to compete, but if extant businesses are innovating and offering low prices (which they have to in order to shut out competitors), you pretty much get the result you’re after, even if more free-wheeling competition from smaller actors would be more aesthetically pleasing.
While this is true as stated, the implication that the trend you site is the result of the rich enjoying a lower tax rate is an oversimplification. There’s more to it than that, and I suspect that neither you nor I are qualified to comment on the matter in an educated fashion.
How so? If I pay less taxes on my multi-millions, I have more money to invest, so I get to make even more money…upon which I pay less taxes…and so on. The explosion of wealth among the super-wealthy certainly seems like a logical result of cutting their taxes. And the timing of that explosion certainly seems to support the thesis.
Ok, sorry for the late response but I live in israel and the Internet fell in my region (I live in a town at end of the world, and im not talking about Israel)…
First I would like to thank you guys for giving me your point of view and I would like to address some of the opinions that were given here!
Reply to T_SQUARE
I agree with you that relative and absolute poverty are two very different things.
What I meant in the original post, I guess, is absolute poverty and not by which the World Bank defines it- its how I define it. I want every person on the planet to eat well, sleep well and get what he needs to live which in my opinion 2$ is not sufficient for that… I dont want to get into technicalities on the exact amount but I want to point out that unlike you I believe in limits to growth and when there’s no demand, the growth will inevitably come to a stop.
Reply to Maastricht
The article from de Waal is very interesting, more specifically the part about “inequity aversion”. I think I agree to some degree with his assumption he deduces that humans act like apes but again I want to focus on absolute poverty…(an analogy might be- What did the ape need to have in order to even
be in the experiment?)
P.s. - you should check out “Snowball - Another One Bites The Dust” in YouTube- from the de Waal article. And the article didn’t mention anything about better skill, harder work, etc as xtisme asked.
3) Reply to Thudlow Boink
I did not yet read Harrison Bergeron but I will have to agree with the notion that freedom fosters inequality nevertheless it’s your choice as an individual to foster equality. You may argue- why should you? and I shall answer that you souldn’t if you wish for inequality!
4) ignis_glaciesque said - “what good is a freedom if it only exists on paper, and is hobbled by reality?”
Renob said - “Yes, some people may not have the means to do so, but they are free to achieve those means. No one is denied the opportunity to obtain an education, no one is denied anything. But, on the other hand, no one is being forced to give you anything, either”
Der Trihs said- “such things as universal education require that people be forced
to give their money away, in the form of taxes.”
JRDelirious said- “Inequality is a necessary byproduct of social, political and economic freedom.”
msmith537 said- “So if you want to improve income inequality, you need to work on breaking down some of the barriers that prevent low income people from ever receiving the education they need to make themselves successful”
I strongly agree with ignis_glaciesque and I think that’s where individualism can come into play. As for how strong should the government intervene (from laissez faire to communism) Im not yet sure with myself, however I’m sure individualism
has to be implied for the world to be more equal and fair.
5) xtisme
For sure every country and population has its own goals and desires (take our country for example- there’s a big desire coming from protests these last months to give more government funding to holocaust survivors). But humans have the same basic needs to survive with some dignity (im not talking about internet and cellphones)… You mentioned that it’s possible to mitigate against the worst forms of poverty. How can you do that? Did you mean by government programs or by charitable organizations?
As I said, I’m hardly an expert on the matter (are you?), but I find your apparent method here somewhat dubious. Just because changes in the income tax are the only factor you can think of does not mean – does not even suggest – that such is the main or only factor involved. I don’t know much about economics, but I know enough to know that I’m ignorant – it’s very complex.
Anyway, a simple Google search (“income gap causes”) provided lots of alternative contributing factors.
There are tons more links if you care to look, and most seem to echo the thoughts above to one degree or another.
I’m not saying that changes in income tax structure are not a factor in the rise of wage inequality; I believe that they are. I’m saying that such changes are one factor among many, and that (I suspect) neither you nor I can confidently assign weights to the various causes.
I’m not sure how your comment on the Big 3 automakers is relevant, other than proving my point that over time, industries naturally tend to consolidate.
I didn’t mean to imply that it is necessarily a bad thing. However what can happens is that with fewer employers in a particular industry, workers have fewer options and thus less power in the employer/employee relationship. They have nowhere else to work so they are at the mercy of their employer. That’s why unions formed (ironically contributing to rendering the automakers less competetive, however that’s a different debate).
Yes. I’ve held many jobs actually. And I hold a business degree. And I’m in management so I’ve actively hired people and I know how difficult it is to find good people. I also know that there are very few people in a large organization who the company can’t get by without.
I’ve mostly worked in corporations of a few hundred to tens of thousands of employees. So the leaving of any one employee has much less of an effect than it might on your aunts hardware store.
I believe the governments role is to assist in leveling the playing field and providing safety nets so temporary misfortunes do not permenantly cripple families financially.
“Fair” does not mean that everyone is equal. Fair means that everyone has the same chances and oportunities to prove themselves.
What about them? Most of the people we think of as being some sort of capitalist scum were actually using the government to supress competition or give them subsidies. Without government power backing them up they would not have been able to get away with their abuses.
Take a look at the current auto market in the U.S. Please tell me how the Big 3 are controlling it. My point is that industries, in fact, do not tend to consolidate. The companies which grow large in one narrow time frame usually tend to see their market share slip as upstart companies take away their customers.
Believe it or not, “economic freedom” used to be a slogan of 20th-Century socialists. Which makes a certain kind of sense. After all, if I can lose my job, or have my wages slashed, because of decisions made by management in which I have no voice, then I’m not economically free, am I?
You certainly are. You chose to take a job that had that outcome as a possibility.
The notion that underlies the socialist conception you describe is one that defines freedom as imposing burdens on someone else. That is, I can only be free if someone else is forced to give up part of his freedom to cater to my desires. That’s a pretty skewed view of freedom to me.
Then fair must imply that the same chances and oportunities to prove themselves even exist… In my opinion, the reality is that this is not the case-not everybody has those oportunities and therefore its not yet fair=its not yet equal until everyone has the same chances and oportunities to prove themselves.
You will never get a fully level playing field. A fully level playing field does not exist in human history. In communist Russia if you were a member of one of the powerful communist families (or even a member of the communist party) you had opportunities that others didn’t. In fact I’d argue that in practical terms communist countries had a more skewed playing field than capitalist ones.
So…there is and will never be anything like ‘fair’ as you are defining it. What it means in practical terms in our own society is that there are no systematic limitations on how high one can rise given motivation, skill, work…and luck. One can go from the poorest to the richest (and of course from rich back to poor…it happens more than people think). The society one lives in dictates where the bars are. In many European nations the bars of this upward (or downward) mobility are set both higher and lower than the US. They are set higher on the bottom end (i.e. one can only fall so far), but are set lower at the upper end (i.e. one can only rise so high). And this works for them. By and large our system works for us and most people are satisfied. If they aren’t satisfied…well, then eventually the system will change.
Both. Society (modern society) mitigates against the worst forms of poverty by setting a bar somewhere and saying ‘we won’t allow citizens to fall below this level before doing something about it’. Some societies set that bar higher than others…it all depends on the goals and desires of the majority of citizens. In the US we set the bar at something a bit higher than subsistence…most of our ‘poor’ have at a minimum enough to eat and a place to live. More that that we don’t do (from the governments perspective) but leave up to individuals or charities to fill the gaps. And we are willing to let some fall through those gaps and have that bar set so low for a variety of reasons, not the least of which is that it means the majority of our citizens can have a standard of living better than just about any other country in the world with a level of economic growth and production equally among the top nations of the world. Other nations have other priorities and goals, so set their bars in different places to achieve those goals and priorities. The key point is that SOME form of capitalist/market oriented system is behind every successful nation in balancing poverty and equality…regardless of where the bar is set.
And because nearly ever capitalist/market oriented nation also enjoys a measure of political freedom and expression (China being one notable exception…for now), the citizens can change where that bar is set…what the priorities and goals of the nation over all shall be. Think in terms of this election cycle in the US…if Obama is elected then the nation will move in one direction, if McCain is elected it will move in another. If the make up of Congress changes then different goals and priorities will be sought. And all these things will effect where the bar is set here in the US…and effect the balance of poverty and equality.
Ah, don’t mind him. That’s just a libertarian kneejerk response whenever the issue of protecting people on the bottom of the economic ladder from the most dire consequences of poverty (starvation, homelessness, lack of basic medical care, etc.). He’s assuming you want to prevent rich people from getting richer, and he’s so het up over that he wouldn’t mind having to walk past the bodies of dead poor people on the way to work every day.
There is inequality based on ability and then there is inequality imposed by the system.
The fact is, however, that not everyone has the same ability. So the question remains what kind of support do we provide for those people at the bottom of the ladder so that they can live a quality life yet doen’t create disincentives to be productive?
Many industries, especially ones that require large amounts of capital, DO tend to consolidate over time. There are 3 American auto makers now. Compare that to this list of defunct companies. You don’t have a lot of “upstarts” in the automotive industry because starting a car company requires a huge amount of capital. The market just won’t support dozens and dozens of carmakers.
For “upstarts” to threaten a large established business in a mature industry one of two things has to happen. They must bring something new and revolutionary to the industry AND have the means to sell and market their product on a competetive scale. Or they must meet some niche market need in which case they won’t really be a threat, but they can still be successful in their own right.
But we are talking about the workers. The Big 3 don’t control the automobile market. They control the automotive job market. If you are an employee of one of the automobile plants, it’s not like there are a hundred other auto plants for you to work in. The less options you have for seeking other employment, the less leverage you have as an employee.
My point is that the Big 3 don’t dominate the auto market. Yes, they may be the only American car companies left, but there are a large number of foreign companies competing here. These companies, which looked so strong in the '50s and '60s, are now struggling for their lives. That directly contradicts your notion that a few companies tend to take over a market over time.
Sure, and this happens all the time. Companies find a way to sell goods and services at a lower price or through better methods. Look at retailing. An industry once dominated by Sears and Woolworths and other stores of that ilk is now dominated by Wal Mart.
So? If your skills aren’t needed, should someone be forced to employ you? If you offer nothing of value, then why should someone give you money in exchange for your labor?