John Roemer changes his mind on a bunch of things, including socialism

He has a new published paper, in Analyse & Kritik, entitled “Thoughts on Arrangements of Property Rights in Productive Assets,” here is the abstract:

State ownership, worker ownership, and household ownership are the three main forms in which productive assets (firms) can be held.  I argue that worker ownership is not wise in economies with high capital-labor rations, for it forces the worker to concentrate all her assets in one firm.  I review the coupon economy that I proposed in 1994, and express reservations that it could work: greedy people would be able to circumvent its purpose of preventing the concentration of corporate wealth.  Although extremely high corporate salaries are the norm today, I argue these are competitive and market determined, a consequence of the gargantuan size of firms.  It would, however, be possible to tax such salaries at high rates, because the labor-supply response would be small.  The social-democratic model remains the best one, to date, for producing a relatively egalitarian outcome, and it relies on solidarity, redistribution, and private ownership of firms.  Whether such a solidaristic social ethos can develop without a conflagration, such as the second world war, which not only united populations in the war effort, but also wiped out substantial middle-class wealth in Europe — thus engendering the post-war movement toward social insurance — is an open question.

There are some probably gated versions here.  He also explains later in the paper that socialism cannot work because a generally solidaristic social ethos will be undermined by a selfish minority, driven by greed, which will turn social institutions to their favor and evolve into a new ruling class.  In other words, Hayek’s The Road to Serfdom is not yet obsolete and still holds the power to sway men’s minds.

For the pointer I thank Kevin Vallier.   

Comments

Elites, especially in the Anglo-American world, are so enthusiastic for mass immigration in large part because diversity undermines the "solidaristic social ethos" that makes it less fun to be an elite.

The central premise that's wrong here is that elites, or anyone else, primarily choose political positions based on self-interest. Mountains of research in political science has shown that voters overwhelmingly vote along lines of symbolic self-identification, rather than self-interest. (See link below). To begin with I'm not even sure that elites push immigration more than non-elites, I haven't seen any polls indicating a correlation between income and immigration support. But assuming elites as a group are pro-immigrant they are not out of self-interest but because they associate themselves in various ways with the pro-immigration tribe.

You harp on Mark Zuckerberg and his support for immigration a lot. Your hypothesis being is that he's trying to suppress the wages of American programmers to increase his bottom line. There's a much likelier scenario based on what political and psychological research tells us. Zuckerberg spent his formative years around a lot of immigrants. He went to Exeter and Harvard, both stuffed to the gills with foreign students. Facebook has a huge proportion of its employees who are foreign born, as does much of Silicon Valley. Many of his friends and colleagues are first or second generation immigrants. Including his wife most importantly.

Zuckerberg looks at anti-immigration advocates as irrational xenophobes, who if they had their way in the past would have stopped him from meeting many of the closest and most important people in his life. Almost all of the (very high skilled) immigrants that he knows are better educated, more cultured, harder working and generally better people than the median American. Zuckerberg is definitely more comfortable with a Chinese born computer science researcher than he is with the typical middle American blue collar worker who makes up the core of the anti-immigrantion demographic.

http://www.ssgs.ucla.edu/sears/pubs/A056.pdf

'Because' can be understood in two different ways here: a) that the actors consciously perceive the stated reason, derive the stated action and act it, and b) that the stated action is taken by a large number of actors through being memetically adaptive due to the stated reason. These two modes of causation are not mutually exclusive, but neither entails the other. Interpreting a (b)-class phenomenon as (a)-class is called conspiracy theory. Interpreting an (a)-class phenomenon as (b)-class is, for instance, widespread in discussions of poverty.

Here, I think you make two errors: imputing exclusively (a)-class meaning to Steve's statement and segueing from political positions straight to voting. Voting and voter preferences are relatively unimportant political phenomena in modern America.

As for your explanations of Zuckerberg's position on immigration, they imply that he is a fool, un-inquisitive, unobservant, or all of the above. Only an unobservant person would believe in Zuckerberg's place that the set of immigrants close to himself is representative of all immigrants, only an un-inquisitive person would not wonder about the characteristics of those immigrants whom he does not observe directly, and only a fool would choose positions on immigration based on such incomplete and biased data. An alternative explanation is that Zuckerberg, like Bryan Caplan, just loves his bubble and devil take the hindmost.

You'd like to think that, wouldn't you? You've beaten my giant, which means you're exceptionally strong, so you could've put the poison in your own goblet, trusting on your strength to save you, so I can clearly not choose the wine in front of you. But, you've also bested my Spaniard, which means you must have studied, and in studying you must have learned that man is mortal, so you would have put the poison as far from yourself as possible, so I can clearly not choose the wine in front of me. You fell victim to one of the classic blunders - The most famous of which is "never get involved in a land war in Asia" - but only slightly less well-known is this: "Never go in against a Sicilian when death is on the line"!

>Zuckerberg looks at anti-immigration advocates as irrational xenophobes...

Well, you've blown your cover by calling them "anti-immigration." No one of consequence is anti-immigration. The subject is illegal immigration. To conflate the two is abhorrent. You might as well call rape "halfway-consensual sex."

Anyway, I'm sure he does view the anti-illegals as irrational xenophobes, but not for the reason you suggest. He needs to feel superior to others, because like most zillionaires, the money doesn't give him that feeling of superiority that he always imagined it would. Calling people defective and evil, and speaking out against their evil, does it for him. It does not matter that these are people who merely want the law enforced. He's got his crosshairs lined up, and he's locked and loaded, and getting support from the Beautiful People. Peace at last for MZ.

Where'd you get that psychology degree, off the back of a cereal box?

Mark Zuckerberg's FWD.us lobby for more H-1B visas acts in exactly such a manner as you'd expect from a self-interested, highly rational economic actor, which a fair amount of evidence suggests is what the 29-year-old with $10 billion is.

But, I think you've rightly identified the mechanism that keeps elites on top on the immigration issue: "voters overwhelmingly vote along lines of symbolic self-identification, rather than self-interest." A lot of poor bozos out there, especially in the cubicles of the computer business, identify with Mark Zuckerberg, not with their rational self-interest: "Oooh, they're comin' for our jerbs" they mock anybody who articulates the economic logic of why Zuckerberg and Gates have teamed up to try to lower their income. They'd rather identify with the Who than admit that they are the Whom in this economic arrangement.

Fair enough. Billionaires are certainly atypical.

Steve wants an ethnically and economically homogeneous agrarian country. Like the khmer rouge but for white people

The trend over time is for all polities to devolve into their more homogenous ethno-cultural elements.

Link?

Just because you type some words in a certain order doesn't make them true.

Well, let's see if we can think up a few examples of multicultural polities that devolved into their constituent nations: Roman Empire, Ottoman Empire, Austro-Hungarian Empire, British Empire, Colonial powers, USSR, Balkans

Places where numerous peoples living cheek-by-jowl somehow failed to realize the benefits of erasing national borders: Europe, Asia, Africa, South America, Central America, Caribbean, Pacific archipelago, Arabian peninsula, Baltic states

Dysfunctional, multicultural hellholes in various stages of cold/hot war or breakdown of the commons: Syria, Libya, India, Afghanistan, Belgium, EU, Italy

Ethno-nationalist monoliths: China, Japan, the Koreas, Mongolia, Armenia, Georgia, Tibet, Israel, Mongolia

Actually Steve, like a lot of social conservatives, wants the world to look like the world he grew up in: 1960s California suburbs.

Horrible place. That's why nobody would move there.

Sounds more like an argument in favour of educating the public about interest politics, including a need for democratic reforms which prevent those "greedy" groups from getting "too much" influence on government.

I do, however that he identifies one of the main factors causing problems in social democracy. However, the argument that the greedy nature which has become manifest in many people does not necessarily mean that it will be impossible for us to cultivate other aspects of our nature in ways which will allow institutions in some form of social democracy to generally function without the problem of special interest groups (especially elite ones) taking too much control of government.

I [appreciate] that he identifies one of the ...

Anybody found a gated version online anywhere?

Wow. Awesome turn of events.

not to overly nitpick but writing professional paper in the first person seems amateurish. Even in jr high I learned that.

depends on field. In economics, many journals discourage use of the academic 'we'.

The academic "we" can be a tedious construct. An exception arises in maths, where a proof may be viewed as a conversation between author and reader, those two constituting the "we". On the other hand, the academic "we" is infinitely preferable to the endless use of the constipated passive.

'The social-democratic model remains the best one'

Why that wasn't the post headline is not at all mysterious.

Especially since for most Americans, the very idea of social democracy sounds exactly the same as socialism. Decades of dedicated effort on the part of many generous donors have ensured that. Anybody interested can listen to Reagan being a paid mouthpiece to further the cause -

'In 1961 The American Medical Association hired the Gipper for a viral marketing campaign dubbed I kid you not, 'Operation Coffeecup.' Doing his part to scuttle the arrival of Medicare Reagan lays down an 11 minute rap explaining how Socialized Medicine can only lead to an America where men are not free. This record was then mailed out to the 'ladies auxiliary' (doctors wives) of the AMA in each county.' http://blogfiles.wfmu.org/KF/reagan1.mp3

And the funny thing? Many of those recipients were part of the 1% back then, if the data on this web site is to be trusted.

It has been a decades long struggle, on many fronts - and Reagan was in the thick of it, decades before he played the role of president.

And, of course, today we see that socialized medicine has led to where buying medical insurance is a sort of tax and can be made mandatory for everyone. Which obviously increases freedom.

Well, if only those opposed to socialized medicine and in favor of free market health care would simply apply free market auto mechanic principles to health care. If you as a patient can't pay your doctor or hospital or ambulance bill, your body becomes the property of the provider, just as your car becomes the property of tow truck operator or mechanic if you can't pay the bill.

Uninsured invincibles are almost certainly great sources of desirable organs for transplant if euthanized and chopped up quickly.

Great idea! Mechanics liens for people should be front and center in the next GOP health care policy.

The enlightened Continental perspective, for the benefit of us rubes back in the States. This is how social democracy--Heaven on Earth--is supposed to work.

1) High-g ethnic nation-state, check. 2) Pax Americana to keep you from fratricidal warfare with your neighbors and guard the Fulda Gap, check. 3) Neo-Keynesian money printing, check.

And with all that, you're still facing demographic collapse and desperately importing African, Arab and Turkish Muslims to pay the bills for all the old white people.

Hey, it's Europe--what could possibly go wrong?

I don't think you understand what "Keynesian" or "Neo-Keynesian" economics is. I don't know why you blithely throw around terms for things you know very little about.

All right. Just insert "Marshall plan," "public debt."

Any other mouse-poop you might trip over?

His actual statement was "The social-democratic model remains the best one ... for producing a relatively egalitarian outcome," not the best one in some absolute sense. There are always trade-offs in any value system, and privileging egalitarianism typically means that everyone will be poorer. Note that Roemer makes the point that such egalitarianism only took hold in Europe after a massive destruction of middle-class wealth.

This.
Last I checked Switzerland beat Sweden in all sorts of human development measures (from child mortality to longevity). This is as close as you can get to a natural experiment in political economy: two European countries, about the same population size, relatively poor in natural resources, neither participated in major wars for quite same time, similar ethnic composition if you look at issues of culture, work ethics, etc.; one is more conservative, the other more social-democrat (US liberal).
But, if you care about the equality of outcomes more than about average welfare, you may prefer Swaden. Whick is ok, as long as we state the preferences clearly.

"the other more social-democrat (US liberal)": why do Americans abuse that fine word "liberal" to mean socialisticish?

Switzerland is a tax haven.
Switzerland attracts many european migrants.

By the way you would need to control for lot of other things in order to conclude: genetics, climate etc.

If economics is a science and not a clash of competing metaphysical philosophical schools like those of ancient Greece, why would it matter if a theoretician changed his mind about a certain hypothesis? Isn't economics evidence based? Why would what early Keynes / Hicks or late Keynes / Hicks or early Friedman/ late Friedman thought make one iota of difference? {snicker, snicker, tongue in cheek}

Why must Tyler and all George Mason economists always feel the need to genuflect to Hayek, whenever someone points out the flaws of socialist economic systems? Why never Kolakowski, Popper, Kornai, Alec Nove, or others who were, if anything, more accurate about the problems socialist economic systems produced, but much less dogmatic? Do you really think that Hayek would agree with Roemer's assertion that "a social-democratic model remains the best one, to date, for producing a relatively egalitarian outcome"?

Dan

You don't think that the USSR, even with the privileged elite, was more egalitarian than post Soviet Russia?

Who know? Who cares? Who cares about egalitarianism?

Are the Russians better off? Maybe.

Are the Poles better off? Yes.

>Who cares about egalitarianism?

That's my point :)

What Hayek advocated in "Road to Serfdom" was something like social democracy.

He also explains later in the paper that socialism cannot work because a generally solidaristic social ethos will be undermined by a selfish minority, driven by greed, which will turn social institutions to their favor and evolve into a new ruling class.

Why do economists either ignore sociobiology altogether or just selectively apply it?

This kind of defection is a general phenomenon in evolutionary biology, not exclusive to "socialism".

Roemer has proven that bee colonies are a flawed utopia that could never possibly work in the real world.

If macroeconomic modeling was even decently well understood you could posit a spectrum of utility functions (local utility conditional on the entire range of income distribution) , examine taxation / redistribution plans and their effects on output and roughly optimize policy, or at least glean insights useful for policy direction. But it's not.

"State ownership, worker ownership, and household ownership are the three main forms in which productive assets (firms) can be held."

Why does he think "firms" are the only or primary productive assets??

The transportation system of a nation is the most important factor in the wellbeing of the nation as a whole and of individuals in the nation. A leading transportation system can overcome the lack of education of the people, and a lack of transportation can thwart the best educated - if trade is limited by lack of transportation, what good is high education? No nation has a great transportation system owned by firms - even railroads are public utilities with hybrid "ownership".

But an educated population is a tremendous productive asset, but it isn't a firm either.

But I think the real problem with the statement is in the answer to:
Who owns Apple?
Who owns Google?
Who owns Exxon?
Who owns Freedom Industries? (the WV polluter that affected 600,000 people)
Who owns the Internet?

The highest CEO compensation is in firms where the "owners" have zero power over the asset, while the people in control of the asset exercise power in a way that is often contrary to the interests of the owners interested in productive assets. Rather, the management is only interested in rent seeking and asset price inflation that is frequently easiest by pillaging and plundering assets under control.

A coal firm is today operated on the basis of getting the assets of the firm burned as fast as possible, leaving behind wasteland, and then ending up worthless. The firms are structured to do this, so that in the end, those harmed by the firm have no one to sue to obtain redress.

Mancur Olson (among many others) figured this out a long time ago.

"I argue that worker ownership is not wise in economies with high capital-labor rations, for it forces the worker to concentrate all her assets in one firm."

I remember Herbert Gintis making this point a while ago in some Amazon review as one reason he was no longer a socialist. I wonder when he thought it up.

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