It’s time to undo the damage and look at ways to invest public finances more productively. This essay came about as a response to an article in Quillette entitled: Flying Cars: What, How, When, and Why?. I particularly liked the section detailing the distinctions between applied and theoretical science. But as to the larger thrust of the essay, I would argue we should look at things from a far simpler perspective- follow the money! The author correctly places the beginnings of the decline in the 70s, but I would argue that the turning point occurred a decade earlier with the introduction of LBJ’s War On Poverty. We can see the effects on development research in this simple graph.
Whilst it might be perfectly legitimate to argue that taxes should be distributed differently, the fact that there are finite limits to tax and that sometimes higher taxes have trade-offs- as people work less when the returns are lower or decide to retire off into the sunset when taxes get too high- is harder to dispute. Put another way, did LBJ’s War on Poverty redistribute finite resources in such a way that it both broke some of societies more benign systems and features and drew money away from government projects or enterprises which had greater net positive effects, per dollar spent? The answer would have to be yes on both counts.
The first thing to consider is that much of the War on Poverty’s prescriptions were based upon a top-down approach and came as a result of the prevailing viewpoint of some economists that with productivity increases the labour a society needed would become finite, that government would have to pay people to stay home. Welfare must have seemed like an easy way to reconcile the interests of two competing constituencies with the Democrat coalition- those of white blue collar workers and African Americans- with the interests of white blue collar workers winning out over those of African Americans. The solution of the War on Poverty reduced competition between these two groups, for what many believed would become an increasingly scarce resource- that of labour. Of course, they couldn’t predict the unprecedented growth of the service sector, but this is the problem with all top-down prescriptions- they fail to anticipate the unpredictable.
For the second thread we need to look to China. Although China may be authoritarian in many respects, one area is which it is not is in the area of taxation. Only a couple of years ago China taxed around 24% of all wealth generated, compared to roughly 40% in America (including state and local), and around 50% in Europe. But what is more interesting is not how much is taxed, but rather how is it spent? In China, only 20% is allocated centrally, with the remaining 80% devolved out to the regions. A huge amount of this resource is spent on economic development.
I don’t think it’s an accident that when we look to each countries or regions share of total world GDP China’s share has rapidly grown whilst America’s has declined, and Europe’s has declined most rapidly of all. This effect is seen in two ways. First, taxation removes energy from a system which might otherwise be expended in a manner which is more productive, and social spending or government jobs aren’t always net positives compared to the alternative. Second, it would seem that a government’s resources are better deployed in creating the right conditions for economic opportunities for its citizens, rather than trying to ameliorate the damage of not doing so. If we were to poll people who were beneficiaries of government largesse, I am sure that with the exception of the mothers of young children, most would rather see more economic opportunities for their community, rather than more ‘help’ from government.
The third factor to consider is the damage done by welfare systems. Going back to the LBJ era, it would have been relatively easy to redesign welfare systems so that they were simply an income supplement for the working poor. People could have had a basic state entitlement, which could have then been removed at the rate of between 25c and 33c per dollar earned, instead of losing all their welfare with the first dollar earned. But that isn’t what happened, more is the pity. And through this obstinacy we can be that the main objective was not to help people but to reduce labour competition in general and between two competing, yet aligned interest groups- no doubt it also created a new class of loyal bureaucratic government worker and strengthened the negotiating power of unions through reduced labour competition.
But the damage done was catastrophic. Whether we look at the white working class in Britain (along with Bangladeshi British and Afro Caribbean British) or African Americans, the effect of these welfare programs caused lasting harm because they not only disincentivised work, leading to intergenerational poverty, but also disincentivised fatherhood. And we now know that the rates of fatherhood in a community are the primary driver of social mobility, the ability to escape poverty through positive role models. The only thing which caused equivalent damage to certain groups was public housing. Although public housing can be a positive force when its provision is designed to help the working poor, the nonselective high density public housing projects of the post war period were an amplifier of social ills and a disaster of equal magnitude wherever they were tried, for the simple reason that they were indiscriminate.
There are positive types of government spending. Research- specifically in areas where the risks are too high or the pipeline of economic pay-off is too distant for the market- is one them. Another is nuclear power. Germany and France are of equivalent geographical size and climate. Because Germany decided to pursue renewables and get rid of their nuclear power, their consumers pay twice as much for energy which produces ten times as much carbon dioxide. Even the most extreme estimates place the number of deaths through nuclear power at below 3,000 worldwide, whilst it has saved countless millions in improved air quality.
Western decline began with the Governments of the West. They could have invested public funds wisely, creating future wealth for generations to come. With the economic growth that followed it might have been a lot easier to institute social spending programs which were a much smaller share of the total pot of government funds. Instead they put the cart before the horse, and the West began to stagnate. Virtually every societal problem which has occurred since, whether it is lower rates of fatherhood or mass incarceration (the two are inextricably linked), is a function of these shifting priorities in government spending.
There is a solution. It comes by gradually replacing social programs and government lending to students which zero interest debt. Fiat money was ultimately designed to create sufficient capital for investment, to stimulate the economy. There is now so much capital in the world today that prudent governments can borrow at negative interest rates. We should no longer create fiat money, and there really is a question mark over whether banks should still indulge in fractional reserve lending, now that we know that a world of interconnected and interdependent financial institutions creates the issue of financial contagion and system-wide collapse.
Direct commissioning of zero interest debt for citizens is another case entirely. Because it is direct and closed loop, there is little risk of inflating demand beyond supply and causing inflation. Over time the debt would shrink in real terms, and much of it would be recoverable at the point of death. Central banks routinely eat the toxic debt of business failures- why can’t we demand they carry the can for our own citizens.
With student debts we could even consult the actuarial tables to set thresholds for repayment by degree type. With a zero interest Graduate Contribution Scheme an engineer with an undergraduate degree might find they only start to repay once they are earning over $30,000, for a Liberal Arts degree the threshold might be $10,000. This would allow students to select courses or vocational training likely to land them a decent job.
Unlike conservatives, I don’t see government as innately good or bad, but what I would concede to conservatives is that when political leaders make bad decisions we often have to live with the consequences for decades. We need a better system for Government to own up to its mistakes and to agree to fix them- otherwise we simply live with the consequences forevermore.
Nice essay Geary. For once I find myself to your right tho.
> But what is more interesting is not how much is taxed, but rather how is it spent?
Yes. I don't ask how big the government is, I ask how well it spends my money. Mind, the default position should be small government.
> China taxed around 24% of all wealth generated, compared to roughly 40% in America
But if one looks to China for an example, one should not pick and choose -- the commies also exercise absolute state power anywhere and everywhere and they practice central planning reaching out for decades.
> the nonselective high density public housing projects of the post war period were an amplifier of social ills and a disaster of equal magnitude wherever they were tried, for the simple reason that they were indiscriminate.
Yes, not a cure, but an amplifier. If one wants to study failure, one looks to the American housing Projects of a few decades ago. Like the War On Drugs, it could not have been worse if it had been designed to be the worst.
> Direct commissioning of zero interest debt for citizens is another case entirely.
My jaw drops. Sounds like something Maduro might think up. Too socialist for me. Anything 'free' is going to be abused.
> With student debts we could even consult the actuarial tables to set thresholds for repayment by degree type.
Sounds like another bureaucratic black hole. Nope, some gentle subsidies might be in order but 'free' education just gives us more people with 'education' beyond their intelligence.
> We need a better system for Government to own up to its mistakes
Decades ago I saw a documentary on the American GAO, maybe it's not there anymore but it seems that back in the day bureaucrats would shit themselves if they heard that the GAO was on their tail. Seems these folks were to governmental waste and bloat and sloth what Heinrich Himmler was to Gypsies and Jews. Up here we once had a Auditor General who decided she'd seen enough corruption and she blew the whole thing wide open. Efficiency is possible. Watchdogs can be employed.
'commies also exercise absolute state power'- true. 'they practice central planning reaching out'- not so much when it comes to economic development. They are aiming for a meritocratic autocracy, and regional development serves as a baptism by fire for the future party elite.
I see we differ on the zero interest idea. It's not something to which I am philosophically, but it might be something we need to consider at a future date. Let's take state pensions as an example- it might be possible to increase them by 10% above the rate of inflation, but make a third of all pension payments repayable upon death. Wealthier citizens could opt out of the extra third, whilst those most in need would see a rise.
The problem with the current direction of demographics is that the current system of social spending of most Western countries is unsustainable. It simply won't be there for Gen Xers like me.
Seems to me the Chinese are clear headed. They are neither doctrinal socialists nor TFM absolutists. All I'm saying is that one must look at the totality of the Chinese system, not cherry pick. I don't think you disagree. The cat is catching mice, so it's left to do so.
> the current system of social spending of most Western countries is unsustainable
So they say. Politicians will kick a can down the road if they can. No doubt some creative thinking about that is welcome. Even a 'bad' idea might spark a good idea. Nothing you say is ever easily dismissed.
You'd have been right had Xi not declared himself tyrant for life, much like how Putin did. They aren't a technocratic tyranny that may even be required to keep 1.3 or 1.4 billion people in order under a single monopoly. After all, that ".3" is the size of the entire USA.
But couldn't those "miracles" have arrived if they just provided liberty and equality under the law, allowing free trade and free association of their people? Nearly all of the miracle was their adoption, in a limited way, of freer markets and allowing profits to drive innovation and growth.
What might have happened is conjectural. What did happen is a more market driven economy but very closely monitored and 'interfered with' whenever the CCP thought it was needed. Unregulated capitalism is demonstrated to be unstable -- prone to cycles of boom and bust. It is also often grossly inefficient, feeding frenzies followed by stampedes. It has many virtues too, no doubt but needs constant monitoring.
The Chinese are outperforming the West only because they began at the bottom, which the West left a while ago. So making that comparison is false. Big anything is bad in my eyes, whether that's corporations or governments. We now have the worst of both worlds leading the charge on vaccines, poverty and a few other faves. The results speak for themselves. Small is still beautiful...
'The Chinese are outperforming the West only because they began at the bottom, which the West left a while ago. So making that comparison is false.' It's good argument and one which might point to fallacious thinking on my part. But it doesn't take away from my central point that many of goals which we emotionally steer towards as a matter of public policy have proven to cause incredible harms, whilst modest investments in things like development research proved to be the gift that kept on giving. It particularly salient when it comes to climate change- politicians may prefer crowd-pleasing solutions which accomplish little, but funding technological innovation would allow use to mitigate the worst future scenarios at minimal costs.
A good example of this is the solar desalination techniques developed by Cranfield University, being deployed at scale with the NEOM project. It has the potential to revolutionise a major source of emissions and green large segments of previously freshwater-deprived regions in the process. We need more of this type of this innovation.
'Big anything is bad in my eyes, whether that's corporations or governments.' Adam Smith would agree with you. He was a staunch opponent of the East India Company with its propensity to seek taxpayer bailouts. He actually argued that its existence would lead to the loss of the American colonies through the monopolies it enforced (the true reason for the American Revolution).
'Small is still beautiful'. I completely agree. British food may get a bad rep, but things have improved dramatically over the past three decades- at least if one avoids the still common transit outlets, and go by world-of-mouth recommendations. We still have the same chains as in America, but overall I would estimate that small restaurants or pub restaurants easily outnumber the chains by 10 to 1. I couldn't locate UK figures, but in the US chains comprise 40% of the market.
Absolutely! We need all our brains on deck if we want to survive as a species, currently trashing our planet. Wrongheadedness seems to be a pet project of the newly awakened 'green' activists out there. I once wrote a bad novel about climate change disaster set in Vancouver, and the research (8 years ago) drove me into a depression. Watching the current frenzy of let's get on this green bandwagon makes me ill all over again. It's all going into some kind of propaganda ditch. As for the small restaurants and pubs; they are unfairly targeted by the Covid madness. How is it possible that it's 'safe' to shop Costco but 'dangerous' to eat in a small restaurant? I didn't know the chains dominate the US market. Anyway, I am not going to any restaurant any time soon. I am a bad bad immoral person, don't you know.
Progressive governments hate small business and actively seek to destroy them and the middle class supported by them. Big business colludes with government in this endeavor because both entities hate competition.
That's a good point. One of the hidden stories of the Virginia result was people who were or knew small business owners, poorly treated by local politicians during the pandemic. It reminds me somewhat of the way in which small business interests consolidated against socialism in Sweden- eventually leading to the 'free market capitalism with larger social safety nets' era, which has seen substantial growth in Sweden since '91.
This documentary by a Swedish free market economist on Sweden had a profound influence on my view on economics: https://www.youtube.com/watch?v=jq3vVbdgMuQ&t=17s . He's also done some pretty cool stuff on Adam Smith.
That's ironic- about the bad novel. I actually started participating in conservative sites because I wanted to write a sci fi novel about climate change which convinced conservatives- in the process I found I had been wrong about the motives and philosophy for over 40 years of my life, and became more heterodox in my viewpoint as a result.
I did find the answer to my question though- about persuasion. It's called solution aversion. The Right doesn't like solutions which involve government, the Left doesn't like solutions unless they involve government. I spent over a decade seriously depressed about climate change and other global woes. Although it wasn't the triggering event (I had a car accident in my youth which made me predisposed, and I was dealing with family grief and work problems at the same time), I subsequently spent a number of years undergoing CBT-style counselling.
I really recommend techno-optimist Matt Ridley on the subject. I've also programmed my YouTube for climate and engineering, so I frequently get positive stories about climate projects which are working. The Ocean Cleanup Interceptor Unveil had me close to tears: https://www.youtube.com/watch?v=KyZArQMFhQ4&t=1s
Have you heard the Iris Murdoch quote on novels? “Every book is the wreck of a perfect idea.” I wonder why she didn't use shipwreck? She could have switched out 'perfect' for the scansion.
> The Right doesn't like solutions which involve government, the Left doesn't like solutions unless they involve government.
The triumph of fundamentalism over practicality. Sorta like the way the righties refused to get vaccinated because they consider the issue to belong to the left. Better dead than submit to the Biden/Fauci tyranny! Me, I'd rather fight the virus with whatever tools are available including vaccines and irrespective of politics. Or the way the left refuses to even give TFM a chance at fighting AGW, nope, market driven solutions won't cut it, it *has* to be government run.
I think partisan politics makes it seem that way, but it's not real. The issue with government is that it does too much, and then goes to the next thing. And now it does it without even demanding the citizens pay taxes for it, showing a true abuse of capital, buying off voters and repaying special interest donors.
For me, it's not government, per se, that is the problem, but the use of force to impose preferences on others, mob rule, might makes right, the rejection of minority views, the faith that theft and violence and extortion are fine if government does it, but criminal if a citizen does it.
You don't see lot of government force and protests over nice roads/bridges, clean water, school vouchers, working garbage/waste/sewage...you get them over mandates, price controls, tariffs, wars, mass incarceration, drug wars, etc.
> but the use of force to impose preferences on others
But government is precisely that institution which has license to use force. Getting a driver's license is not optional if you want to drive. Needless to say, governments are always in danger of getting too heavy handed. Seems to me the problem is not solved by making doctrinal aphorisms but rather by constant vigilance. Democracy is never a stable thing even tho it looked like it for several decades. We now see how fragile it is. We have met the enemy and he is us. When the majority rise up and *demand* responsible government then that's what they'll get. Yang '24.
Ridley is great! Getting depressed is normal for people who take environmental issues seriously. I used to have an American psychiatrist who volunteered treatments of this group of people in places like San Fran, Atlanta et al, and this guy understood where I was coming from. Finding him when I needed to talk to somebody was synchronicity, pure dumb luck or fate. Whatever it was, it worked. I got over the depression in about two years. The quote is wonderful and you are right; it should be 'shipwreck '!
Yes, they have the leapfrog effect, like being able to fly to the moon with all the information, science and technology advancements before them. That's not innovation. Once Xi announced his dictatorship, I was relieved because otherwise a technocratic government could very well outperform the US crony and pandering system.
“ Virtually every societal problem which has occurred since, whether it is lower rates of fatherhood or mass incarceration (the two are inextricably linked), is a function of these shifting priorities in government spending.”
Taxes are necessary for any country. They are also necessary to enable business to thrive. Who builds and maintains the infrastructure networks, the health services etc. All of the latter are essential.
Free enterprise is necessary for a successful country. Innovation does not come from government and in fact the best one can hope for from government is to create an environment where innovation can thrive.
Government set rules and standards are necessary. Regrettably, without these there are businesses which will despoil and harm both the environment and people to make money.
If we look for examples of where this might be happening we have to focus on the West not China. Sadly China under Xi is going down the authoritarian, imperialist route. The US despite its many flaws is still the example to follow and I don't see a stagnating state. Certainly chaotic at times but this is a function of freedom. If they can avoid the Republican or Democrat crazies from imposing their will on the country they are still set to continue their pre-eminent position for the foreseeable future.
Development RND can come from government or the market, but for many forms of development the risk profile is too high or the pay-off too distant or too unlikely for the market to get involved. Often IP can be generated peripherally to the main objective of a research project, but this is one of those known unknowns which makes it difficult for investors to qualify or quantify.
Indeed. The government can play a part here by supporting and making funds available. What I do like about America in particular is that there are market based funds which provide money to help innovative start-ups. That coupled with an entrepreneurial spirit is a difficult combination to beat.
Why is it government can build a new road or bridge, or new water supply system, or new sewage system (perhaps one of the really true 'common good' actions government does because market competition in them is not practical), but then look to doing "the next thing" rather than ensuring they maintain those systems and improve them?
Why must we suffer crumbling schools, roads, bridges, sewers and water systems? Because we let politicians jump to some "next great thing" to buy voters and repay special interest donors that they will build while refusing to maintain what they previously did. And then when they finally get around to fixing it, they pretend they are doing the most amazing thing.
And while I support smaller government and greater liberty and reduced special interest impositions, preferring liberty and free markets and free association in a voluntary-first society, I would fully go along with government programs if they were fully paid for by taxation applied equally to all (and the rich would therefore continue to pay the lion's share). At least then we'd have "honest" government, doing what the people say they want by proving it by voting their dollars, not just their worthless political vote (my vote is roughly worth 1/170,000,000, and that's just my vote for another person who never met me and who then votes however he or she wants).
'Why must we suffer crumbling schools, roads, bridges, sewers and water systems?' A lot of this is the parasitic elite capture of public funds. Government would prefer to supply college kids with useless jobs, than boost the real economy with blue collar labour. Local politicians also have a tendency towards white elephants- all that hobnobbing with executives and entrepreneurs pursuing their self-interest, and flattering them as part of the process, convinces them they are investment geniuses and know exactly what their local economy needs.
Yes, because government isn't honest and doesn't actually care about you. Politicians will point to roads and bridges and water and parks and libraries and say "who doesn't want that?" while ignoring the fact they refuse to maintain them, like socialists who just consume the wealth of prior generations until it crumbles. I know of zero citizens outside of the political profession (including special interests that use government to get what they can't get honestly with voluntary exchange) who pay taxes because they are hoping for benefits to accrue to politicians.
Then why does the US conservative party always tout ever more government control? They love undeclared wars. They apparently love giving away prescription drugs to the elderly. They love the military industrial complex. They love the prison system. They claim to hate the Fed, but do deficit spending as well as any democrat (until Biden's new record setting spending and deficits). They seem fine with fascism.
Conservatives do not love those things. Progressives in the Republican Party are. It terribly different from their Democrat cousins and take us to the same bad place. Trump is no doctrinaire conservative but he clearly understood this dynamic.
Indeed, the labels do seem to be meaningless, with ever-changing attempts to win votes and raise funds by spending other people's money on them and special interest donors. Peace is war. Liberty is submission and free-dumb is to be objected. Rights are granted. Truth is what central planners and social media prefer reality to be. Racial division and grouping is anti-racist.
I don't disagree. But some systems are public goods and only work in the public sector, and some countries are better at government than others. I would say the American system is uniquely bad, but there is still a case that the National Weather Service only works well because countries are able to cooperate across regions without a thought to competing commercial interests.
The Scandinavians have probably come closest to government that works. I used to socialise with a lot of Scandinavians through gaming online. If you wanted a decent job in government it was pretty much a prerequisite that you study a technical field relevant to the job you wanted. A far cry from the totally irrelevant degrees most government types study before going into government in the Anglosphere- with a few exceptions.
Their taxes are a little disingenuous as well. What most don't realise is that if you buy a house, you get 30% of your debt interest payments refunded against your taxes (which might actually apply twice if you are a couple). It also applies to student borrowing.
If government stuck with those few things it is suited to do we all would be in a far better place; morally, spiritually and financially. Government is primarily a vehicle for accumulation of personal power and wealth.
Government intervention is a net negative unless there is a 'market failure' (externalities), which is why the number one function of government that is and should be funded is DEFENSE. Allocating subsidies to union run factories (electric cars) as found in the 'Build Back Better' that the Progressives & Biden are trying to shove through is an awful and terribly inefficient use of public funds. And that's just ONE of myriad inanities / market inefficiencies in BBB. These policies don't make sense economically; the only reason why they are being funded is solely Leftist- Progressive ideology.
'Allocating subsidies to union run factories (electric cars)'- with starlink, gigapress, the China factory costs and the new battery (faster charge rate in particular is going to be a massive game changer) Elon Musk is going to blow the competition out of the water. Estimates on the costs of the new hatchback (coming 2022/2023) show that the sticker price in likely to be around $25K (no subsidy)- if one includes the benefits of having access to the Toyota network.
Nice essay Geary. For once I find myself to your right tho.
> But what is more interesting is not how much is taxed, but rather how is it spent?
Yes. I don't ask how big the government is, I ask how well it spends my money. Mind, the default position should be small government.
> China taxed around 24% of all wealth generated, compared to roughly 40% in America
But if one looks to China for an example, one should not pick and choose -- the commies also exercise absolute state power anywhere and everywhere and they practice central planning reaching out for decades.
> the nonselective high density public housing projects of the post war period were an amplifier of social ills and a disaster of equal magnitude wherever they were tried, for the simple reason that they were indiscriminate.
Yes, not a cure, but an amplifier. If one wants to study failure, one looks to the American housing Projects of a few decades ago. Like the War On Drugs, it could not have been worse if it had been designed to be the worst.
> Direct commissioning of zero interest debt for citizens is another case entirely.
My jaw drops. Sounds like something Maduro might think up. Too socialist for me. Anything 'free' is going to be abused.
> With student debts we could even consult the actuarial tables to set thresholds for repayment by degree type.
Sounds like another bureaucratic black hole. Nope, some gentle subsidies might be in order but 'free' education just gives us more people with 'education' beyond their intelligence.
> We need a better system for Government to own up to its mistakes
Decades ago I saw a documentary on the American GAO, maybe it's not there anymore but it seems that back in the day bureaucrats would shit themselves if they heard that the GAO was on their tail. Seems these folks were to governmental waste and bloat and sloth what Heinrich Himmler was to Gypsies and Jews. Up here we once had a Auditor General who decided she'd seen enough corruption and she blew the whole thing wide open. Efficiency is possible. Watchdogs can be employed.
'commies also exercise absolute state power'- true. 'they practice central planning reaching out'- not so much when it comes to economic development. They are aiming for a meritocratic autocracy, and regional development serves as a baptism by fire for the future party elite.
I see we differ on the zero interest idea. It's not something to which I am philosophically, but it might be something we need to consider at a future date. Let's take state pensions as an example- it might be possible to increase them by 10% above the rate of inflation, but make a third of all pension payments repayable upon death. Wealthier citizens could opt out of the extra third, whilst those most in need would see a rise.
The problem with the current direction of demographics is that the current system of social spending of most Western countries is unsustainable. It simply won't be there for Gen Xers like me.
Seems to me the Chinese are clear headed. They are neither doctrinal socialists nor TFM absolutists. All I'm saying is that one must look at the totality of the Chinese system, not cherry pick. I don't think you disagree. The cat is catching mice, so it's left to do so.
> the current system of social spending of most Western countries is unsustainable
So they say. Politicians will kick a can down the road if they can. No doubt some creative thinking about that is welcome. Even a 'bad' idea might spark a good idea. Nothing you say is ever easily dismissed.
You'd have been right had Xi not declared himself tyrant for life, much like how Putin did. They aren't a technocratic tyranny that may even be required to keep 1.3 or 1.4 billion people in order under a single monopoly. After all, that ".3" is the size of the entire USA.
Too bad about Emperor Xi. I'm not a huge fan of the CCP to say the very least, but one should give credit where it's due -- they have worked miracles.
But couldn't those "miracles" have arrived if they just provided liberty and equality under the law, allowing free trade and free association of their people? Nearly all of the miracle was their adoption, in a limited way, of freer markets and allowing profits to drive innovation and growth.
What might have happened is conjectural. What did happen is a more market driven economy but very closely monitored and 'interfered with' whenever the CCP thought it was needed. Unregulated capitalism is demonstrated to be unstable -- prone to cycles of boom and bust. It is also often grossly inefficient, feeding frenzies followed by stampedes. It has many virtues too, no doubt but needs constant monitoring.
The Chinese are outperforming the West only because they began at the bottom, which the West left a while ago. So making that comparison is false. Big anything is bad in my eyes, whether that's corporations or governments. We now have the worst of both worlds leading the charge on vaccines, poverty and a few other faves. The results speak for themselves. Small is still beautiful...
'The Chinese are outperforming the West only because they began at the bottom, which the West left a while ago. So making that comparison is false.' It's good argument and one which might point to fallacious thinking on my part. But it doesn't take away from my central point that many of goals which we emotionally steer towards as a matter of public policy have proven to cause incredible harms, whilst modest investments in things like development research proved to be the gift that kept on giving. It particularly salient when it comes to climate change- politicians may prefer crowd-pleasing solutions which accomplish little, but funding technological innovation would allow use to mitigate the worst future scenarios at minimal costs.
A good example of this is the solar desalination techniques developed by Cranfield University, being deployed at scale with the NEOM project. It has the potential to revolutionise a major source of emissions and green large segments of previously freshwater-deprived regions in the process. We need more of this type of this innovation.
'Big anything is bad in my eyes, whether that's corporations or governments.' Adam Smith would agree with you. He was a staunch opponent of the East India Company with its propensity to seek taxpayer bailouts. He actually argued that its existence would lead to the loss of the American colonies through the monopolies it enforced (the true reason for the American Revolution).
'Small is still beautiful'. I completely agree. British food may get a bad rep, but things have improved dramatically over the past three decades- at least if one avoids the still common transit outlets, and go by world-of-mouth recommendations. We still have the same chains as in America, but overall I would estimate that small restaurants or pub restaurants easily outnumber the chains by 10 to 1. I couldn't locate UK figures, but in the US chains comprise 40% of the market.
Absolutely! We need all our brains on deck if we want to survive as a species, currently trashing our planet. Wrongheadedness seems to be a pet project of the newly awakened 'green' activists out there. I once wrote a bad novel about climate change disaster set in Vancouver, and the research (8 years ago) drove me into a depression. Watching the current frenzy of let's get on this green bandwagon makes me ill all over again. It's all going into some kind of propaganda ditch. As for the small restaurants and pubs; they are unfairly targeted by the Covid madness. How is it possible that it's 'safe' to shop Costco but 'dangerous' to eat in a small restaurant? I didn't know the chains dominate the US market. Anyway, I am not going to any restaurant any time soon. I am a bad bad immoral person, don't you know.
Progressive governments hate small business and actively seek to destroy them and the middle class supported by them. Big business colludes with government in this endeavor because both entities hate competition.
That's a good point. One of the hidden stories of the Virginia result was people who were or knew small business owners, poorly treated by local politicians during the pandemic. It reminds me somewhat of the way in which small business interests consolidated against socialism in Sweden- eventually leading to the 'free market capitalism with larger social safety nets' era, which has seen substantial growth in Sweden since '91.
This documentary by a Swedish free market economist on Sweden had a profound influence on my view on economics: https://www.youtube.com/watch?v=jq3vVbdgMuQ&t=17s . He's also done some pretty cool stuff on Adam Smith.
That's ironic- about the bad novel. I actually started participating in conservative sites because I wanted to write a sci fi novel about climate change which convinced conservatives- in the process I found I had been wrong about the motives and philosophy for over 40 years of my life, and became more heterodox in my viewpoint as a result.
I did find the answer to my question though- about persuasion. It's called solution aversion. The Right doesn't like solutions which involve government, the Left doesn't like solutions unless they involve government. I spent over a decade seriously depressed about climate change and other global woes. Although it wasn't the triggering event (I had a car accident in my youth which made me predisposed, and I was dealing with family grief and work problems at the same time), I subsequently spent a number of years undergoing CBT-style counselling.
I really recommend techno-optimist Matt Ridley on the subject. I've also programmed my YouTube for climate and engineering, so I frequently get positive stories about climate projects which are working. The Ocean Cleanup Interceptor Unveil had me close to tears: https://www.youtube.com/watch?v=KyZArQMFhQ4&t=1s
Have you heard the Iris Murdoch quote on novels? “Every book is the wreck of a perfect idea.” I wonder why she didn't use shipwreck? She could have switched out 'perfect' for the scansion.
> The Right doesn't like solutions which involve government, the Left doesn't like solutions unless they involve government.
The triumph of fundamentalism over practicality. Sorta like the way the righties refused to get vaccinated because they consider the issue to belong to the left. Better dead than submit to the Biden/Fauci tyranny! Me, I'd rather fight the virus with whatever tools are available including vaccines and irrespective of politics. Or the way the left refuses to even give TFM a chance at fighting AGW, nope, market driven solutions won't cut it, it *has* to be government run.
I think partisan politics makes it seem that way, but it's not real. The issue with government is that it does too much, and then goes to the next thing. And now it does it without even demanding the citizens pay taxes for it, showing a true abuse of capital, buying off voters and repaying special interest donors.
For me, it's not government, per se, that is the problem, but the use of force to impose preferences on others, mob rule, might makes right, the rejection of minority views, the faith that theft and violence and extortion are fine if government does it, but criminal if a citizen does it.
You don't see lot of government force and protests over nice roads/bridges, clean water, school vouchers, working garbage/waste/sewage...you get them over mandates, price controls, tariffs, wars, mass incarceration, drug wars, etc.
Pournelle's Iron Law of Bureaucracy is particularly salient to your point.
> but the use of force to impose preferences on others
But government is precisely that institution which has license to use force. Getting a driver's license is not optional if you want to drive. Needless to say, governments are always in danger of getting too heavy handed. Seems to me the problem is not solved by making doctrinal aphorisms but rather by constant vigilance. Democracy is never a stable thing even tho it looked like it for several decades. We now see how fragile it is. We have met the enemy and he is us. When the majority rise up and *demand* responsible government then that's what they'll get. Yang '24.
Ridley is great! Getting depressed is normal for people who take environmental issues seriously. I used to have an American psychiatrist who volunteered treatments of this group of people in places like San Fran, Atlanta et al, and this guy understood where I was coming from. Finding him when I needed to talk to somebody was synchronicity, pure dumb luck or fate. Whatever it was, it worked. I got over the depression in about two years. The quote is wonderful and you are right; it should be 'shipwreck '!
Yes, they have the leapfrog effect, like being able to fly to the moon with all the information, science and technology advancements before them. That's not innovation. Once Xi announced his dictatorship, I was relieved because otherwise a technocratic government could very well outperform the US crony and pandering system.
“ Virtually every societal problem which has occurred since, whether it is lower rates of fatherhood or mass incarceration (the two are inextricably linked), is a function of these shifting priorities in government spending.”
Music to this conservative’s ears!
That is news to me, but clearly, you have a point. Horrible times we live in ..
Progressives damage everything they touch. The lure of free stuff is destructive to any free society.
Taxes are necessary for any country. They are also necessary to enable business to thrive. Who builds and maintains the infrastructure networks, the health services etc. All of the latter are essential.
Free enterprise is necessary for a successful country. Innovation does not come from government and in fact the best one can hope for from government is to create an environment where innovation can thrive.
Government set rules and standards are necessary. Regrettably, without these there are businesses which will despoil and harm both the environment and people to make money.
If we look for examples of where this might be happening we have to focus on the West not China. Sadly China under Xi is going down the authoritarian, imperialist route. The US despite its many flaws is still the example to follow and I don't see a stagnating state. Certainly chaotic at times but this is a function of freedom. If they can avoid the Republican or Democrat crazies from imposing their will on the country they are still set to continue their pre-eminent position for the foreseeable future.
Development RND can come from government or the market, but for many forms of development the risk profile is too high or the pay-off too distant or too unlikely for the market to get involved. Often IP can be generated peripherally to the main objective of a research project, but this is one of those known unknowns which makes it difficult for investors to qualify or quantify.
Indeed. The government can play a part here by supporting and making funds available. What I do like about America in particular is that there are market based funds which provide money to help innovative start-ups. That coupled with an entrepreneurial spirit is a difficult combination to beat.
Why is it government can build a new road or bridge, or new water supply system, or new sewage system (perhaps one of the really true 'common good' actions government does because market competition in them is not practical), but then look to doing "the next thing" rather than ensuring they maintain those systems and improve them?
Why must we suffer crumbling schools, roads, bridges, sewers and water systems? Because we let politicians jump to some "next great thing" to buy voters and repay special interest donors that they will build while refusing to maintain what they previously did. And then when they finally get around to fixing it, they pretend they are doing the most amazing thing.
And while I support smaller government and greater liberty and reduced special interest impositions, preferring liberty and free markets and free association in a voluntary-first society, I would fully go along with government programs if they were fully paid for by taxation applied equally to all (and the rich would therefore continue to pay the lion's share). At least then we'd have "honest" government, doing what the people say they want by proving it by voting their dollars, not just their worthless political vote (my vote is roughly worth 1/170,000,000, and that's just my vote for another person who never met me and who then votes however he or she wants).
'Why must we suffer crumbling schools, roads, bridges, sewers and water systems?' A lot of this is the parasitic elite capture of public funds. Government would prefer to supply college kids with useless jobs, than boost the real economy with blue collar labour. Local politicians also have a tendency towards white elephants- all that hobnobbing with executives and entrepreneurs pursuing their self-interest, and flattering them as part of the process, convinces them they are investment geniuses and know exactly what their local economy needs.
There is no political benefit from maintenance, thus there will be no effective maintenance.
Yes, because government isn't honest and doesn't actually care about you. Politicians will point to roads and bridges and water and parks and libraries and say "who doesn't want that?" while ignoring the fact they refuse to maintain them, like socialists who just consume the wealth of prior generations until it crumbles. I know of zero citizens outside of the political profession (including special interests that use government to get what they can't get honestly with voluntary exchange) who pay taxes because they are hoping for benefits to accrue to politicians.
Methinks conservatives innately believe too much government is ‘bad’ because they observe its corrosiveness on the culture & economy.
Then why does the US conservative party always tout ever more government control? They love undeclared wars. They apparently love giving away prescription drugs to the elderly. They love the military industrial complex. They love the prison system. They claim to hate the Fed, but do deficit spending as well as any democrat (until Biden's new record setting spending and deficits). They seem fine with fascism.
Conservatives do not love those things. Progressives in the Republican Party are. It terribly different from their Democrat cousins and take us to the same bad place. Trump is no doctrinaire conservative but he clearly understood this dynamic.
Indeed, the labels do seem to be meaningless, with ever-changing attempts to win votes and raise funds by spending other people's money on them and special interest donors. Peace is war. Liberty is submission and free-dumb is to be objected. Rights are granted. Truth is what central planners and social media prefer reality to be. Racial division and grouping is anti-racist.
I don't disagree. But some systems are public goods and only work in the public sector, and some countries are better at government than others. I would say the American system is uniquely bad, but there is still a case that the National Weather Service only works well because countries are able to cooperate across regions without a thought to competing commercial interests.
The Scandinavians have probably come closest to government that works. I used to socialise with a lot of Scandinavians through gaming online. If you wanted a decent job in government it was pretty much a prerequisite that you study a technical field relevant to the job you wanted. A far cry from the totally irrelevant degrees most government types study before going into government in the Anglosphere- with a few exceptions.
Their taxes are a little disingenuous as well. What most don't realise is that if you buy a house, you get 30% of your debt interest payments refunded against your taxes (which might actually apply twice if you are a couple). It also applies to student borrowing.
If government stuck with those few things it is suited to do we all would be in a far better place; morally, spiritually and financially. Government is primarily a vehicle for accumulation of personal power and wealth.
Government intervention is a net negative unless there is a 'market failure' (externalities), which is why the number one function of government that is and should be funded is DEFENSE. Allocating subsidies to union run factories (electric cars) as found in the 'Build Back Better' that the Progressives & Biden are trying to shove through is an awful and terribly inefficient use of public funds. And that's just ONE of myriad inanities / market inefficiencies in BBB. These policies don't make sense economically; the only reason why they are being funded is solely Leftist- Progressive ideology.
'Allocating subsidies to union run factories (electric cars)'- with starlink, gigapress, the China factory costs and the new battery (faster charge rate in particular is going to be a massive game changer) Elon Musk is going to blow the competition out of the water. Estimates on the costs of the new hatchback (coming 2022/2023) show that the sticker price in likely to be around $25K (no subsidy)- if one includes the benefits of having access to the Toyota network.
I see they also have plans to switch some production to iron-lithium batteries, away for nickel- which will address some of the key capacity issues. If you invest in the market, I would pay particular attention to transport projects and lithium extraction in Bolivia. Sooner of later the right investment group is going to make a mint in this region. https://www.pv-magazine.com/2021/05/04/bolivia-launches-call-for-lithium-extraction/ . https://www.euronews.com/2021/05/09/us-bolivia-chile-train