Category: Political Science
Investing in the Poor
The Unincorporated Man is a science fiction novel in which shares of each person's income stream can be bought and sold. (Initial ownership rights are person 75%, parents 20%, government 5%–there are
no other taxes–and people typically sell shares to finance education and other training.)
The hero, Justin Cord a recently unfrozen business person from our time, opposes incorporation but has no good arguments against the system; instead he rants on about "liberty" and how bad the idea of owning and being owned makes him feel. The villain, in contrast, offers reasoned arguments in favor of the system. In this scene he asks Cord to remember the starving poor of Cord's time and how incorporation would have been a vast improvement:
"What if," answered Hektor, without missing a beat, "instead of giving two, three, four dollars a month for a charity's sake, you gave ten dollars a month for a 5 percent share of that kid's future earnings? And you, of course, get nothing if the kid dies. Now you have a real interest in making sure that kid got that pair of shoes you sent. Now it's in your interest to find out if he's going to school and learning to read and write. Now maybe you'll send him that box of old clothes you were thinking of throwing away. Under your system you write a check and forget about the kid, who'll probably starve anyway. Under our system, you're locked into him.
…the real benefit comes about when those 'evil, selfish, horrible corporations' get involved. How long will it take for a business to realize that there's a huge profit to be made in those hundreds of millions of starving children?…Imagine a world where a bank gives a loan to a corporation to build a school, hospital or dormitory. Not because its the right thing to do; who cares! They'd do it because it's the profitable thing to do. And because of that, my system, not in spite of greed and corruption and incorporation, but because of it, will work better than yours in any time period with any technology you choose."
So who do you stand with, JC or Hektor?
Hat tip to Robin Hanson for lending me the book and from whom I cribbed the description of ownership rights. Hanson offers other thoughts on the novel. And here are earlier comments from Reihan Salam.
The best-selling book of all time
Charles Dickens, A Tale of Two Cities, two hundred million copies.
Next in line is Baden-Powell's Boy Scouts book and then Lord of the Rings.
The full list is here, interesting throughout. For the pointer I thank BrainPicker. Here is a related post from Andrew Gelman.
Middle East peace proposals
This one is new to me:
An even more radical idea has been put forward by Swedish diplomat Mathias Mossberg and UC-Irvine professor Mark LeVine. They do not believe giving settlers Palestinian passports would solve anything. The two propose creating overlapping states between the Jordan River and Mediterranean Sea, delinking the concept of state sovereignty from a specific territory. There would be an Israel and a Palestine, but rather than divide the land, the two states would be superimposed on top of one another. The plan would permit individuals to live where they wish and choose their political allegiance. This, they argue, would resolve the seemingly intractable questions of how to divide the holy city of Jerusalem and whether to allow Palestinian refugees “the right of return” to their old communities.
This doesn't seem practicable to me (no good mechanism for dispute resolution), but maybe in some other geopolitical setting it could be made to work,
Slavoj Žižek on Sarah Palin
I don't usually blog this topic, but I was struck by this passage, from Žižek's new Living in the End Times. Maybe it's what you would get if Andrew Sullivan were a Lacanian and a Hegelian:
Earlier generations of women politicians (Golda Meir, Indira Gandhi, Margaret Thatcher, up to a point even Hillary Clinton) were what is usually referred to as "phallic" women: they acted as "iron ladies" who imitated and tried to outdo male authority, to be "more men than men themselves." …Jacques-Alain Miller pointed out how Sarah Palin, on the contrary, proudly displays her femininity and motherhood. She has a "castrating" effect on her male opponents not by way of being more manly than them, but by using the ultimate feminine weapon, the sarcastic put-down of male authority — she knows that male "phallic" authority is a posture, a semblance to be exploited and mocked. Recall how she mocked Obama as a "community organizer," exploiting the fact that there was something sterile in Obama's physical appearance, with his diluted black skin, slender features, and big ears. Here we have "post-feminist" femininity without a complex, uniting the features of mother, prim teacher (glasses, hair in a bun), public person, and, implicitly, sex object, proudly displaying the "first dude" as a phallic toy. The message is that she "has it all" — and that, to add insult to injury, it was a Republican woman who had realized this Left-liberal dream…No wonder that the Palin effect is one of false liberation: drill, baby, drill!
Then comes the zinger:
What this means — in Hegelese — the class struggle encounters itself in its oppositional determination (gegensätzliche Bestimmung), in its distorted/displaced form, as one among many social struggles. And, in exactly the same way, "anti-elitist" populism in architecture is the mode of appearance of its opposite, of class differences.
I thought this contrast was better than any review of the book I could write. The author, by the way, makes a contrarian argument that the Khmer Rouge didn't go "far enough" (too weak a constructive plan), is joking some of the time, believes that capitalism is doomed, and apparently is still a communist though he refuses to tell us why he has a better alternative than communism as we have known it. His book is entertaining, but he ought to just become a social democrat and do mass transit studies for the Aarhus municipal government.
California fact of the day
Chug sends a good link to me, on default estimates, here is the bottom line:
The six with rankings more worrisome than California are Venezuela (the worst), followed by Argentina, Pakistan, Greece, Ukraine and the Emirate of Dubai. California ranks ahead of the Republic of Latvia, the Region of Sicily and Iraq.
As sovereign debt crises unfold, you will see increasingly innovative attempts to avoid uttering the simple words: "The government spent too much money here."
See also here for a list of "sovereign tighteners" and "sovereign wideners."
The challenge
David Leonhardt spells it out clearly:
As a rough estimate, the government will need to find spending cuts and tax increases equal to 7 to 10 percent of G.D.P. The longer we wait, the bigger the cuts will need to be (because of the accumulating interest costs).
Seven percent of G.D.P. is about $1 trillion today. In concrete terms, Medicare’s entire budget is about $450 billion. The combined budgets of the Education, Energy, Homeland Security, Justice, Labor, State, Transportation and Veterans Affairs Departments are less than $600 billion.
This is why fixing the budget through spending cuts alone, as Congressional Republicans say they favor, would be so hard.
Here is related commentary.
Thoughts on the British election
1. It's amazing how quickly they form a new government. We could learn something from this.
2. Spending cuts will be necessary. (I am curious: what is the U.S. "progressive" take on this question. Is it admitted that spending cuts are necessary?)
3. Tax increases will be necessary. (Do U.S. commentators on the right admit this?)
4. Britain should avoid proportional representation. Classic parliamentary systems are good at making big changes in a hurry, when the major party knows which changes are needed, and that is Britain's current position. It's no accident that Thatcher and Roger Douglas — both of whom operated under extreme Westminster systems – were two of the major reformers in the late 20th century. PR gives too much power to minority parties in the ex post electoral bargain and it works best when there is extreme consensus at the social level, combined with the need to bring certain co-optable minorities into that consensus. Is that the way to think about UK politics today? I don't see it. Does any objective observer jump for joy when a "first past the post" election yields a hung Parliament and requires a coalition, as it does now? No, so why institutionalize this need with PR?
5. Do paragraphs like this make you feel better?: "William Hague, the new foreign secretary, said the coalition would be built on the personal chemistry of Mr Cameron and Mr Clegg, and said that Mr Clegg would not get a veto on government decisions. He told the BBC: “Their ability to resolve this situation bodes very well for all our ability to work together in government.”" They shouldn't.
Megan McArdle asks
But I still don't see what the rest of the eurozone is getting out of it.
The Greek bailout, that is. I view it as a bit like the U.S. in Afghanistan. Whether it will yield anything useful from here on in can be debated for a long time. But if we pull out precipitously, and the Taliban take over, it will be seen as a big U.S. loss (whether that's worth the cost is not the question of concern here, only that it is a gross cost, whether or not it is a net cost, all things considered). Since Afghanistan once attacked us (sort of), our entire deterrent would be much less credible.
Going back to Europe, without the bailout no German or French commitment to another European nation, or another European collective project, would be worth very much for a very long time. Boo hoo you may say, but in the European world that is perceived as a very high cost indeed. It would mean writing off the major narrative of European collective progress since the end of World War II.
A second factor is that the choice is either bail out Greece or bail out some German banks. The smaller European nations are more likely to pitch in to pay for part of the former than for part of the latter. Given the size of German banks relative to German gdp, it's not even clear how much the latter is an option. The Germans have to try to keep their fingers in the proverbial dike or else all hell breaks loose. They just can't afford a run on their shadow banking system.
I view the entire bailout announcement, and its scope, as a signaling issue. The Germans loathe such semi-inflationary commitments and basically they just signaled that their banks are a good deal more precarious than the rest of us would like to believe.
So there you have it. Europe is stuck and in response to a crisis they basically raised the stakes. Arguably they had no choice, but they haven't actually eliminated the potential negative outcomes from the gamble.
Politics in Colombia
When you hear the name Antanas Mockus, do you imagine him as the character in some strange fantasy novel? Well, he is running for President of Colombia and so far he is in the lead:
Responsible is not always the first word that comes to people’s minds here about Mr. Mockus. He became well known in 1993 after dropping his trousers and mooning an auditorium of unruly students, forcing him to resign as rector of the National University.
“Innovative behavior can be useful when you run out of words,” Mr. Mockus said of the uproar that followed, explaining that he viewed the episode within the concept of French philosopher Pierre Bourdieu’s “symbolic violence.”
He leveraged the publicity from that episode to run for mayor of Bogotá, a city then on the verge of chaos. In two terms, Mr. Mockus merged lofty political theory with projects to improve quality of life here and got attention by dressing up, with a hint of self-mockery, in a superhero costume as “Supercitizen.”
Beyond that, he used mimes to mock scofflaw pedestrians, held disarmament days for people to turn in guns and even asked people to pay more in voluntary taxes. To nearly everyone’s surprise, some 63,000 people did.
Here is his self-description:
“I’m battling for the integration of ideas from the left and right,” he said, explaining that he was in favor of higher tax collection and a strong government role in society, while also advocating the closing of inefficient state enterprises, cutting the public payroll and supporting private industry.
The Euro and precommitment
It's not the major problem, but one neglected aspect of the Eurozone crisis is simply that countries such as Greece and Portugal cannot precommit to stay in the Eurozone forever. So markets start wondering whether or when they will leave. That makes it harder for them to borrow (markets expect a currency devaluation), which turns up the pressure for them to leave. It also makes it harder for their financial intermediaries to stand on a permanently sound footing, given that deposit liabilities may not stay denominated in terms of Euros forever.
If Greece and Portugal were out of the Eurozone, few people would speculate on their imminent return, and so that state of affairs is more likely to have consistent (if sometimes bad) expectations.
Once something like this is up for grabs, it is often wiser to bet on the outcome associated with the more universally consistent expectations, whether or not you think that outcome is a good one.
Of course the market is also familiar with this logic, which in turn makes it yet stronger. It also means that tips and flips of sentiment can enforce runs and speculative attacks very quickly and at not-fully-predicted times.
Scott Sumner reports
I actually looked at all 32 economies with per capita income above $20,000/year (i.e. as rich as Portugal.) Interestingly, just as Denmark was number one in both markets and civic virtue, the same country placed dead last in both the free markets and civic virtue rankings. And what is the country with both the lowest level of civic virtue and the least reformed statist economic system among 32 developed countries on four different continents?
You’ve probably guessed it by now . . . Greece.
Read the whole post, which is interesting throughout and more about economic liberalism than about Greece.
Greece fact of the day
Already, the government’s proposals for deep spending cuts have stoked strong resentments in a country where one out of three people is employed in the civil service that, until now, has guaranteed jobs for life.
Here is more.
When did Greek economic policy turn bad?
Stan Tsirulnikov forwards to me this very interesting paper (JSTOR, gated for many of you). Here is an excerpt from the summary:
For twenty years up to 1974, Greece enjoyed rapid growth, high investment and low inflation; during the next twenty years, growth and investment collapsed and inflation became high and persistent.
After 1974, debt and deficits rose sharply as well, and later EU transfers helped postpone the necessary fiscal adjustments. At this same time Greece was becoming more democratic, in part because the previous autocratic arrangements were collapsing. The figure on p.150, representing the difference between the two periods, is a knockout. And after 1974, the average rate of gdp growth goes from 7.1 percent to 2.1 percent.
The full reference is "The Two Faces of Janus: Institutions, Policy Regimes and Macroeconomic Performance in Greece," George Alogoskoufis, Economic Policy, Vol. 10, No. 20 (Apr., 1995), pp. 149-192.
Addendum: Here is an ungated copy.
John Gray on Michael Oakeshott
John Gray often misfires, but still he is one of the smartest and most knowledgeable generalists around:
…Oakeshott was not without illusions of his own. He was able to disparage ideology because he believed tradition contained all that was needed for politics; he could not conceive of a situation in which a traditional way of doing politics was no longer possible. Yet that has been the situation in which the Conservative Party has found itself over the past generation. The leader and his cabal of modernisers could hardly expect to undo the more radical modernisation Thatcher had unwittingly imposed on the party. As Cameron will discover, one way or another, an ideologically driven Conservatism is here to stay – even if it means the party once again drifting into limbo.
The full review, which covers British politics and the forthcoming election, is here. Here is Gray, trying to dismantle A.C. Grayling's rationalism (hat tip The Browser), worth a read.
The culture that is Dutch
Potholes, stray garbage, broken street lamps? Citizens of Eindhoven can now report local issues by iPhone, using the BuitenBeter app that was launched today. After spotting something that needs to be fixed, residents can use the app to take a picture, select an appropriate category and send their complaint directly through to the city council. A combination of GPS and maps lets users pinpoint the exact location of the problem, providing city workers with all the information they need to identify and resolve the problem.
Here is more information, via BrainPicker. I wonder how well this would work in Rhode Island?