05
Jan
11

Labor and Society

There are two ways to understand most things, and we often have only an imagination of one of the ways but not the other.

For example, when we hear praise for capitalism. We hear things like “markets work” and that they lead to “innovation” and “efficiency.” But there are two ways to hear those words. Liberals tend to hear those words as empty promises or deceptive trivialities. Some markets just don’t plain work due to information deficits or transaction costs and some things may not be even CAPABLE of being bought or sold, like friends, votes, or dignity. Fine, I agree.

But I want to emphasize that these words don’t have to be heard as empty trivialities. There is still many powerful effects of market organization and I want to suggest that in this post, there is even something worth having about the unceasing aggressiveness of capitalism.

The way I want to draw out this point is by, as lawyers would say, using exhibit A — southern Europe. In this excellent article, southern europe’s crushing socialist guarantees are revealed to have gone too far. Liberals often scoff at backwater conservatives who horde guns and claim that large government programs lead to naziism or whatever (obviously welfare states, don’t as a rule, cause genocide since many progressive liberal democracies today have enormous welfare states, i.e., the Scandinavian countries). However, smarter conservatives know that while the welfare state does not lead to government totalitarianism, it can lead to a more creeping, less grandiose type of social destruction.

The article makes this point by illustrating how extremely large pensions combined with generous social safety nets, entrenched bureaucrats, and a high level of social regulation can quite literally suffocate the growth of the society and culminate a kind of ugly stagnation in which obsolete bureaucrats and industry magnates hold on to their jobs at the expense of bright innovative, and hard working young people. In Italy, educated people are migrating out of the country at an enormous rate and in Spain, the unemployment is I think the article said 20%.

This is, thank god, not fascism, but again, its not pretty. The PM of Italy has declared that one of the challenges of the coming year is to deal with the widespread disenchantment of an entire generation.

What I’m trying to suggest in this post is something that is so obvious and so trite, but at the same time, for some bizarre reason, worth saying. And that is:  there is a middle ground and it’s hard to find but it must be sought.

Of course untethered capitalism throws many people without skills or training under the bus, and the damage can be daunting. And to be clear, it may be better to ere on the side of too much social provisioning than too little (not sure), but one thing is clear, which is that there is something not just necessary about constraints, but even something good about them. A society cannot enjoy harmony and prosperity if everyone is given a $100,000 pension and unemployment stipends are 80% of your salary for as long as you need (I don’t think its actually like this in Southern Europe, this is just me exaggerating). What eliminating government welfare programs does is push people to succeed on their own. And for some that’s cruel, because “on their own” isn’t very much, but it’s a balance. When someone is “forced” (as those who are very liberal would say) to work for their own living, but succeed, not only does society win from that person’s hard work (and not needing to support them) but THAT person wins by being challenged and coming out victorious. A success is worth nothing if nothing is at stake. Try playing poker for no money. Pretty boring. When real loss is involved, only then is there the possibility of real gain.

Again, it’s an ideal that’s just not an option for some people, and they need help, but instituting wide ranging job guarantees and government support ruins the chance at growth, striving, and effort. All of these things have enormous economic payoffs (compare Italy’s economy to ours), but they also have enormous social, humanistic benefits. We gain better, stronger people who get to feel the simply joy of providing for oneself.

Here’s what I mean by balance. I think healthcare is a no brainer (not necessarily that Obama did it right), but how generous our unemployment benefits should be, and how high taxes should be, etc. etc., are all up for discussion. It has corrosive social effects to consistently take money from society’s hardest working members and give it to those who may be clinging to unfair benefits. In the U.S., the rich I think are much too resentful toward the poor. Their tax burden or whatever just isn’t that much, but as we slide (perhaps) closer and closer to the mid point between completely socialism and complete free marketism, it’s worth remembering, that it is easy to go over to the other side and protect dying industries and jobs with statist coercion when hard-working people want a chance (a chance!) to go to work for long hours.

The threat of statism is not totalitarianism, but stultifying decay.

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1 Response to “Labor and Society”


  1. January 6, 2011 at 4:46 am

    That was an excellent column.

    I think the most interesting breaking point in American politics is when someone says something along the lines of “I’d rather my parents have Medicare than we have American troops in Country X, Y or Z.”


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