Continuing Conversation... James Otteson on the End of Socialism

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by Amy Willis
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In this week's episode, EconTalk host Russ Roberts talks with James Otteson about socialism and capitalism, touching on camping, G.A. Cohen, Adam Smith, and education along the way.

Use the questions below to check your knowledge or respond. As always, we love to hear from you.

camping2.jpg

What should be the criteria for state intervention in the economy?
Check Your Knowledge:

1. How does G.A. Cohen's notion of "communal reciprocity" differ from Adam Smith's notion of market exchange, according to Otteson?

2. What does Otteson note as Adam Smith's two criteria for government intervention in the economy? To what extent are these still valid criteria today? To what extent are they followed? What criteria would you suggest?


Going Deeper:

3. At about the 26:00 mark, Roberts suggests Otteson has opened a "Pandora's Box" regarding the encroachment of the welfare state. Is Otteson more or less pessimistic about the future of the welfare state than Roberts? With whom are you in more agreement? Explain.

4. Toward the end of the conversation, Roberts and Otteson discuss the goal(s) of education in a commercial society. Otteson suggests that today, K-12 education suffers confusion of what's necessary and what's sufficient. What does he mean by this, and to what extent is this a good characterization of American public education?

5. Some listeners were unhappy with Otteson's definition of the "socialist inclination" as a desire for equality, a top-down approach, and a focus on classes and groups rather than individuals. Do you think these views should be grouped together? Is there a better way to describe people who hold these views or are labels unhelpful? Is there a similar problem with the term "capitalism?"

Extra Credit:

6. Otteson and Roberts agree that wealth, while not a guarantor of happiness, does enable the things that matter for a well-lived life. Smith, too, Otteson argues, recognized that people needed to emerge from the historical norm of poverty before flourishing could become a concern. To what extent does this suggest the need for a "basic income guarantee, as argued for by Matt Zwolinski and others?" Would you support such a policy? Explain.

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COMMENTS (17 to date)
Greg G writes:

#5 " Is there a better way to describe people who hold these views or are labels unhelpful?"

There sure is a better way! Frame the discussion as a debate between those who believe positive rights are legitimate and those who think only negative rights are legitimate. This would entirely sidestep all the confusion and baggage that comes with tying this debate to controversial personalities and tired labels freighted with a lot of emotional baggage.

Russ, I would love to hear a couple EconTalk interviews with the best advocates you can find on each side of that debate.

I blame (in the good way) Russ and John Papola for the fact that this device of having two individuals stand in for an entire universe of positions has become so overused. Those Keynes vs. Hayek videos were as good as that form can possibly be done. Normally that form is a bad idea. People please, stop trying to top that or thinking you can equal it.

Can anyone cite for me a single prominent American economist who is not a fan of Adam Smith? Does anyone who is not an academic even know anyone familiar with the work of G. A. Cohen? Those choices of representatives were so prejudicial in framing the discussion that it didn't matter how fair and respectful Jim and Russ tried to be within that framework.

Also, many of us are pluralists who think that we do, and should, care about a number of competing values than can and do sometimes clash with each other. Another advantage of a debate about positive and negative rights is that it has more of a place for pluralists

Michael Byrnes writes:

"Basic Income Guarantee" would be a great topic for an Econtalk episode. And one of the people who has written about it happens to be a friend of the podcast:

http://www.degruyter.com/view/j/bis.2011.6.issue-2/1932-0183.1222/1932-0183.1222.xml

Leishalynn writes:

From the top, capitalism is described as the "bottom-up" worldview and that makes me wonder, since when capitalism runs amok, as it is today, money and power are monopolized in the hands of the few who form policy groups that write laws passed by corrupt politicians and eventually capitalism is very top-down. If capitalism is to be allowed in a civilized world, how do we stop the money people from enslaving the people and raping the earth to feed their insatiable greed?

Jim Otteson writes:

Greg G writes:

#5 " Is there a better way to describe people who hold these views or are labels unhelpful?"

There sure is a better way! Frame the discussion as a debate between those who believe positive rights are legitimate and those who think only negative rights are legitimate. This would entirely sidestep all the confusion and baggage that comes with tying this debate to controversial personalities and tired labels freighted with a lot of emotional baggage.

Greg G, that is indeed a different way, but I would not agree that it is a better way--precisely because it itself involves a lot of baggage. Where do these rights come from? How are they justified? What are their limits? These questions have been hashed and rehashed for centuries, with no end, let alone resolution or consensus, in sight. Thus if I had based my discussion of socialism on a controversial and disputed notion of rights, I do not see how that would have led to less confusion.

By contrast, the question of who makes (or should make) the economic decisions is clear, direct, and intelligible. It does not presuppose any particular moral, political, philosophical, or theological worldview. If, other things equal, one tends to favor policies that prefer giving the ultimate responsibility of making economic decisions to third-party authorities, then that takes one in one direction; if, by contrast, one tends to favor policies that prefer to give this ultimate authority to first- and second-party individuals, that takes one in a different direction. It seems to me natural to label the former "centralist" and the latter "decentralist."

Doing so allows us to understand, and then evaluate, a key aspect of competing systems of political economy, namely, the means they tend to deploy to effectuate the ends they champion. When evaluating systems of political economy--as opposed to moral theory or political philosophy--that is exactly what we want to do. I treat socialism (and capitalism) as a system of political economy, not of moral theory or political philosophy. So what I am interested in, and what I think matters in an examination of socialism, is to understand not only its values but also the means at its disposal to achieve those values.

Ultimately, however, the debate should be about the positions themselves, not the labels we give them. The substance of "socialism" and of "capitalism" is what matters, not the names.

Greg G writes:

Jim,

I understand that you hoped to to focus on political economy without getting bogged down in questions of moral theory. After all, if we consider your idea of moral theory we will soon have to consider other competing ideas of moral theory.

The problem is, I don't think it is possible or desirable to separate the two and I certainly don't think that is what you did in this podcast.

Here is what you said very early on in response to Russ asking what's wrong with "the socialist inclination":

>---"And the problem that I see with that--one of the problems; there might be others--is that I don't think that that gives proper respect to you. Because you after all have limited, like everybody else, you have scarce resources; you have various things that you might put your resources toward; you have your own schedule of value, your own purposes in life. And if my need or my want is sufficient to trigger, maybe even to demand that you provide for me something that you have, then that disrespects, and indeed doesn't even pay any attention to whatever other needs, goals, purposes that you yourself are serving. So it's as if my needs trump yours. Which in my view makes it not an equality of human agency, but rather mine being superior to yours. And I think that runs afoul of a very deep moral principle that I see in Smith, which is an argument in favor of an equality of moral agency. Each person deserves respect as a moral agent. And part of what that means is that each person has the right to sometimes say 'No, thank you' and go somewhere else. If all that's required in order to demand or command an exchange is for one person to need or want something, then that really subjects the other party to the whims or needs or wants of the first party. And that I think violates that moral principle of equality of moral agency."

That talk of running "afoul of a very deep moral principle" is where you went right away. Now I think that is a good argument. I think that is an important argument. I think that is a relevant argument. But how in the world am I supposed to think that is not an exercise in moral theory and political philosophy?

There were many comments from many people to the podcast. After the first few many supported you. But virtually everyone wanted to talk about the moral aspects of the issue. I don't remember anyone sticking to the issue of centralization vs. decentralization unattached to moral theory.

It's been a long time since I read Hayek but, as I recall, he did the best job I've ever seen of keeping political economy and moral philosophy separate. He made a straightforward consequentialist argument that the inefficiencies of centralized production would make almost everyone worse off regardless of intentions. And he did it while assuming good intentions on the part of the socialists.

David L. Kendall writes:

The words "capitalism" and "socialism" are definitely laden with heavy baggage for many people. Using either in a conversation may set the stage for interlocutors in ways that neither understands is happening in the mind of the other.

Using the term "voluntary exchange" instead of "capitalism" tends to reduce the baggage, and in a single term, captures the most fundamental meaning of true capitalism. I am not sure what term might do the same for "socialism," but maybe "family values" comes close.

Russ's and Jim's discussion contrasting the methods and outcomes of families vs. those of voluntary exchange was for me important and pertinent. Some people who argue against socialism attribute to its supporters all manner of vile and nefarious motives. It seems to me that many apologists for socialism simply yearn for all of society to be like a good family, but alas, for reasons touched on in the podcast, such is not possible.

Thank you Russ and Jim for an interesting and enlightening discussion of what for many people is a conversation that cannot be had with calmness and reflection. In the end, one of the most important ideas in the podcast is that capitalism is a moral system of political economy and like all systems other than capitalism, socialism cannot be.

SaveyourSelf writes:

>---1. How does G.A. Cohen's notion of "communal reciprocity" differ from Adam Smith's notion of market exchange, according to Otteson?

Wikipedia has this really excellent explanation of reciprocity:

In cultural anthropology, reciprocity refers to the non-market exchange of goods or labour ranging from direct barter (immediate exchange) to forms of gift exchange where a return is eventually expected (delayed exchange) as in the exchange of birthday gifts. It is thus distinct from the true gift, where no return is expected.[1] Reciprocity is said to be the basis of most non-market exchange…When the exchange is immediate, as in barter, it does not create a social relationship. When the exchange is delayed, it creates both a relationship as well as an obligation for a return (i.e. debt). Hence, some forms of reciprocity can establish hierarchy if the debt is not repaid. The failure to make a return may end a relationship between equals.
In contrast, G.A. Cohen’s explanation of, “communal reciprocity,” is simple minded.
I said that, within communal reciprocity, I produce a spirit of commitment to my fellow human beings: I desire to serve them while being served by them, and I get satisfaction from each side of that equation. In such motivation, there is indeed an expectation of reciprocity, but it differs critically from the reciprocity expected in market motivation. If I am a marketeer, then I am willing to serve, but only in order to be [sic.] served." Pg 41 Why Not Socialism.
Otteson in the podcast says Smith’s concept of market exchange was a voluntary agreement between two parties who each address themselves to the selfish desires of the other party.

The difference between these two “different” notions of exchange is hard to quantify because Smith and Cohen were not well matched. I now get why their was an outcry of “straw-man” to this podcast even though Otteson didn’t exaggerate, misrepresent, or fabricate Cohen’s arguments. It just FEELS as though he did because Cohen is not in the same league as Smith. Perhaps no one is in the same league as Adam Smith, but Cohen isn’t even close. Reading his work and then trying to compare it to Smith creates a feeling like—I imagine—I would get watching a professional football team playing for keeps against a high school team. Pity. Outrage. Disbelief. Incredulity. Disgust. Just to name a few.

I like Otteson. I think he is smart and correct in every way that matters, but there is no getting around that he made a mistake when he chose G.A. Cohen as the foil for Adam Smith.

SaveyourSelf writes:

>---2. What does Otteson note as Adam Smith's two criteria for government intervention in the economy?

Adam Smith wrote:

The third and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expence to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain. (Smith, V.1.69)
Around 49:13 Otteson summarizes Smith's paragraph when he says,
The two criteria something would need to meet in order to be justified for public provision, were, first of all, it had to benefit the entire great society…And second, it had to be something that couldn't be provided by private enterprise.
I think Smith’s third duty of the sovereign was his attempt to define and manage the problem which we now call public-goods.

>---To what extent are these still valid criteria today?

Let’s see: 1) Could a private enterprise provide health insurance? YES. Medicaid and Medicare would not exist. 2) Could a school be run by a private enterprise? YES. Government run schools would not exist. 3) Privately run retirement plans? YES. No Social Security. 4) What about roads? Could private companies build roads. YES. How about maintain them? YES. So no government built roads either. 5) Privately run military organizations. Hmm…Blackwater. YES. So no standing army? That’s a tough one. The standing armies would probably fall under the 1st duty of government and thus the third-duty criteria would not apply.
It seems the second criteria prohibiting actions which private enterprise could perform would abolish over 60% of the current US government. And we have not had to touch the other criteria about “benefit to the entire great society.” In other-words, Smith’s criteria are AMAZING!

>---To what extent are they followed?

Obviously, not at all.

>---What criteria would you suggest?

I think Adam Smith was slightly mistaken in his third duty of government. I do not say this lightly. My analysis of the third duty suggests that Smith was trying to deal with the problem of public-goods. I agree with him that this is a problem amenable to government intervention. I just don’t think he had a clear picture of what comprises a public-good. He had a notion of it. He knew it existed and that it was very important. But I think the global understanding of public-goods has evolved significantly since he first thought about it.

For example, Smith thought roads and bridges met his criteria for government intervention under the third duty of the sovereign. But when you look at the modern criteria for a public good--nonrivalrous and nonexcludable—roads do not meet that standard. The podcast with Charles Marohn drove the final stake through the heart of that question. The outcome of government managed roads is identical to the outcomes one would predict from any public good—overutilization. So the government managing roads does not solve a public-good problem—it creates one! So Smith’s understanding of a public-good was a little off.

I would propose to alter Smith’s third and also add a forth and fifth duty of the sovereign:

3) In the rare instance that a commodity satisfies the two criteria of a public-good—nonrivalrous and nonexcludable—the government is obligated to establish and maintain a substitute market for that public good and prevent access to the actual good except through the substitute market for as long as the good itself satisfies the definition.
4) If an action by the government will produce a net increase in Freedom, net reduction in barriers to Competition, net elimination of obstacles that lead to asymmetric Information, or net increase in Justice then the government is obligated to act.
5) Otherwise, the government must not act.
This third rule is a recognition that, with the exception of public-goods, markets ration goods more efficiently and intelligently than any other tool known to man. In the case of public-goods, however, markets fail miserably. It is possible, but difficult, to build a bridge between the two called a “substitute-market” which, in theory, gets rid of the overutilization problem associated with public-goods yet maintains the intelligence and efficiency of a Voluntary-Competitive-Informed-Just market. The government builds this substitute-market and maintains it against the erosive forces that will ceaselessly try to undermine it. It is a complex solution in both its understanding and its solution. When understood and executed perfectly, it will be messy, cumbersome, and under constant pressure to degenerate into corruption and cronyism. But, as bad as all that is, I think it will produce a best case scenario, especially since lack of intervention leads to overutilization—possibly even extinction.

The forth rule is a recognition that injury to the efficiency of a market harms everyone who participates in the market. As such, a government action which prevents injury to everyone in a market is justified under the terms of the social contract and is also justified under Adam Smith’s first rule of intervention—it benefits the entire great society. Since markets function best when they are Voluntary-Competitive-Just-Informed, it is reasonable for the government to intervene against any source—including itself—that interferes with those criteria.

The fifth duty basically captures Adam Smith’s second rule of intervention such that government action becomes permissible only if it cannot be done by private enterprise. The actions that government can do at least as well as private enterprise are spelled out in duties 1-4. Duty 5 leaves everything else to private enterprise by keeping government out of it.

SaveyourSelf writes:

3. At about the 26:00 mark, Roberts suggests Otteson has opened a "Pandora's Box" regarding the encroachment of the welfare state. Is Otteson more or less pessimistic about the future of the welfare state than Roberts?

Summarizing these men is difficult because they are both precise and succinct, making it hard to abbreviate their thoughts without losing much of the content. That said, here is my attempt to do just that:

Robert’s comment on Pandora’s box follows a summary description Otteson gave regarding the current goals and methods utilized by the US government welfare system. Much of Otteson’s dialogue suggest that the goals and the methods of the present welfare system are suboptimal. He hints that greater focus on the features that allowed much of humanity to rise out of poverty is a better approach for reducing poverty than just taking treasure from the presently wealthy group and giving it to the poor group.

Russ does not disagree, but hints that he is a little skeptical that any solution is likely to improve outcomes much. In his words, “I just don’t think we know how to help people very well.” [~30:00]

So it seems to me both men agree the current Welfare system is less than ideal, but Otteson feels some different goals and methods could improve outcomes whereas Roberts is slightly less optimistic improved outcomes are possible.

With whom are you in more agreement? Explain.

I agree with both, and I favor one over the other depending on the perspective. If the perspective is from the government so that the question is: what could the government welfare system do better to decrease poverty, then I favor Russ’s skepticism. In that circumstance, I think even correct understanding and correct thinking and perfect engineering are likely to perform no better in the long run than our current system. On the other hand, if the question is from the perspective of a private citizen trying to figure out how to transmit his successful habits to poor people who lack them, then I favor Otteson’s optimism across the long run.

SaveyourSelf writes:

4. Toward the end of the conversation, Roberts and Otteson discuss the goal(s) of education in a commercial society. Otteson suggests that today, K-12 education suffers confusion of what's necessary and what's sufficient. What does he mean by this?

Otteson is suggesting that the goals of modern educational institutions are…disconnected from reality. He is arguing that a large portion of present day education is…unrelated to outcomes that people care about. At different places in the podcast, he is critical of both the techniques and the goals of present day educational institutions. He also indicates that the tools necessary to thrive in society could be taught in a much shorter time span than 18 years.

To what extent is this a good characterization of American public education?

My feeling is, how could it be any other way? Look at the incentives in the market for American education: Near perfect monopoly in the supply of “schooling”, centrally planned curriculum, taxpayer funded so that there is a near perfect monopoly on the demand [and payment] for schooling, universally required attendance and enforcement under threat of government directed violence.

The incentives in US education market fail every aspect of the Voluntary-Competitive-Informed-Just market model. Thus, its outcomes will lean heavily towards those predicted for monopoly markets, which are: High price; Low quality; Low quantity; and absent or even negative incentives to innovate. Which is precisely what we have. So I repeat, how could it be any other way?

SaveyourSelf writes:

5. Some listeners were unhappy with Otteson's definition of the "socialist inclination" as a desire for equality, a top-down approach, and a focus on classes and groups rather than individuals. Is there a better way to describe people who hold these views or are labels unhelpful?

I think Otteson’s definition of Socialism is good but could be slightly better.

First, I think the phrase, “the belief that competitive outcomes are possible through central planning,” is easier to understand than “top-down” and captures a bit more of the nuance of that monopolistic position.

Second, Otteson's definition of Socialism includes a desire for equality. Many people I consider socialists use the term, “fairness,” rather than “equality”. I think fairness is the better term because it is less specific and therefore more useful in a broad range of arguments. Also fairness does not necessarily require equality, and since true equality does not exist anywhere in the universe, fairness is the more realistic term—and many socialists are realists.

Third, Otteson included class distinctions in his definition of Socialism. I think the class distinction part is slightly off target. Many socialists talk about “social-classes” and “class-warfare” but this is really a tactical modification of their argument for fairness designed to encourage formation of supportive-clicks while shaming dissenters. My favorite is the 99% vs. 1%. What a great strategy for winning in a democracy. Define the opposition as a minority so small that true objection is numerically laughable. It is like, “Join the 99%, so you won’t get pushed around, robbed, and laughed at…or don’t, your choice.” Respecting that argument, or even believing it, does not make you a socialist. It makes you practical and tactical.

On the other hand, the acceptance of “class-warfare” as a valid means of advancing the socialist agenda implies an acceptance that Justice can be sacrificed in the name of “fairness” or “the greater good” or “social-justice” or whatever their goal is that day. When confronting a true socialist, I have discovered, pointing out that redistribution harms one group in order to help another does not cause offense or indignation. They are quite aware of that fact. For them, Fairness trumps Justice. Put more negatively, injustice is a valid tool for a central-planner to advance social goals.

On a side note, I think the phrase, “social-goals” is the root of the “Social” in Socialism. The goal is the group. The goal is group improvement. The goal is social improvement.

In summary, I would recommend Otteson’s modify his three criteria to read: 1) Socialism holds that competitive outcomes are possible through central planning 2) Socialism hold “Fairness” as a pinnacle virtue 3) Socialism hold that Fairness > Justice.


Is there a similar problem with the term "capitalism?"

I suspect that “Capitalism” in not a well understood term. In fact, I have to look it up at this point so I can make an intelligent discussion about it. Merriam-Webster dictionary says it is,

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.
So yeah, my definition was not even close, which cements my conviction that Capitalism is not a well understood term. It is broad. It contains many disparate concepts. This, I think, is why there is no, “Capitalist-inclined party” in competition with the “Socialist-inclined party”. There are Free-trade groups, open immigration groups, free-marketeers, libertarians, etc. So the concepts in Capitalism, when broken out, are meaningful and useful, but when smashed all together under a single title they are rendered less effective. And anyway, it has 5 syllables—how impractical to try to use that in everyday language.

Cowboy Prof writes:

THE CAMPING SCENARIO.

I believe this response may partially address question 1, but more specifically the photo displayed above and Cohen's view of camping. My apologies if this was covered in other comments.

My assertion is that there is a great deal more "market exchange" that occurs on a short camping trip (and within the family) than Cohen believes, and Russ and Otteson yield to Cohen. As someone who spends about a month sleeping in tents each year, Cohen's image of camping is misplaced.

There is a great deal of mutual dependency on any given camping trip. Yes, one person might know of a good water source, but another person is a good cook. A third person may be very good at hanging tarps during rainstorms, etc. The point is that there is a diversity of talents that people realize within the camping group and upon this recognition there emerges implicit trading. The guy who knows where the good water is does not sell it as a usurious price because he knows he depends upon someone cooking his breakfast or leading him on a fungus-identification hike (popular out here in the Pac NW). Some people have great tents and bring those in exchange for other folks bringing cook gear and food.

Indeed, it is fun (beneficial to all) to camp with people with different skills because it allows for Smithian specialization and a much more efficient and better trip. Trade takes place and gains from trade are realized.

And things shift over time. I have happened to be the "good cook" for many of our trips and I specialized in that, while others agreed to do the cleaning. We recently had a better chef come in to the mix and I gratefully took a position as clean up guy. We shifted our trades according to comparative advantage -- I agreed to clean up in exchange for our new camp chef making some awesome bread pudding. (Contact me for recipe.)

While some might postulate that we are in an iterated game and reputation matters (which we are and it does), even in a one-shot camping trip with "strangers," this market-based (trade-based) cooperation emerges. The "market exchanges" are there if you simply look for them. This goes to Smith's assertion that humans are natural at trucking and bartering.

Likewise with the family. While there may be an autocratic (paternalistic) allocation of some initial endowments (e.g., room assignments, determination of dinner time and food eaten), there still exists a great deal of trade and barter that goes on surrounding household chores, access to common pool resources (i.e., the television), and decisions about allocating other resources (e.g., do we play Monopoly or Scrabble tonight?).

Bottom line: Trade is a lot more ubiquitous than Cohen thinks, and it is much more natural than many assume.

SaveyourSelf writes:

6. Otteson and Roberts agree that wealth, while not a guarantor of happiness, does enable the things that matter for a well-lived life. Smith, too, Otteson argues, recognized that people needed to emerge from the historical norm of poverty before flourishing could become a concern. To what extent does this suggest the need for a "basic income guarantee?"

Money is deceptively simple—green paper; numbers in a bank ledger—but it has many complex functions. One of those functions is measurement.

The environment around each of us has energy, energy that leads to collisions. We experience the collisions with our environment in complex, intricate ways through our skin. A thermostat is a tool that purports to measure the energy in the ambient environment by expanding and contracting mercury relative to the number and intensity of the collisions with the environment. The output of the thermostat is not energy, but simply a reproducible way of measuring energy, which we call temperature. The ultimate utility of temperature derives from its ability to communicate massively summarized information concisely and reproducibly to individuals who cannot experience the energy for themselves, because there is little point in knowing the temperature on the thermometer if you are already bathing in the energy it measures.

People are filled with energy, energy that leads to actions, actions that lead to interactions. We experience the interactions with other people in complex, intricate ways through our senses. Money is a tool that purports to measure the energy exchanged between people by expanding and contracting relative to the number and intensity of the interactions. The output of money is not energy, but simply a reproducible way of measuring energy, which we call Price. The ultimate utility of Price derives from its ability to communicate massively summarized information concisely and reproducibly to individuals who cannot experience the energy for themselves, because there is little point in knowing the Price if you are already experiencing the energy it measures.

So I have a problem. I am concerned that Eskimo’s are cold. The cold can harm them. I happen to know that Hawaiians’ are hot. So I propose we take mercury out of the Hawaiians’ thermometers and put it in the Eskimo’s thermometers. Then the Eskimo’s will be less cold and the Hawaiians will be less hot.

I am also concerned about the poor. Poverty can harm them. I happen to know that some people are rich. So I propose we take money away from the people with lots and give it to people with little. Then poverty will disappear. Right!

Would you support such a policy?

The basic-income-guarantee--like all forms of redistribution and all forms of price-control--is a proposal to deliberately distort a measuring tool so that it is less precise, less consistent, less transferable, less reliable, and less useful. It helps no one. It harms everyone, especially the people furthest from the energy...

The poor are not poor because they lack money. The cold are not cold because they lack mercury. What they lack, in both cases, is collisions.

Peter B writes:

As a teenage girl of my acquaintance once said of some drama involving her younger sister: "Wants and needs, wants and needs."

Yes, a family is to some extent a socialist enterprise; because the parents not only make the economic decisions, but decide what the needs really are:
"No, you can't have an ice cream now."
"But I need it."

Part of Otteson's vision of the role of parents and educators is to help children develop the ability to make this distinction for themselves, and to have the inner resources to largely meet their own needs by participating in the economy which today is larger than the family or tribe.

But when the State says "From each according to his abilities, to each according to his needs" it is also arrogating to itself the right and duty to determine what each person's true needs are for life, both pre-empting the parental role with respect to children, and infantilizing adults.

That infantilization then becomes an important means of maintaining and expanding the power of the State, the true economic decision maker. In a healthy family, the parents see their job as working themselves out of a job. The job, and the power, of the parental state never ends.

So it is in the State's interest to control and prolong childhood, which it can do by controlling education. Bad parenting and/or a poor quality education prolongs childhood, sometimes permanently.

PSLebow writes:

While I haven't plowed through all of the responses - nowhere in the podcast nor here was the word DEMOCRACY used. Is the "free market" considered a substitute for democracy? Will self-interest guarantee the survival of mankind- especially now that for the first time in history we actually have the power to destroy all of mankind and the living environment? Is capitalism at odds with the concept of democracy?

Someone mentioned "fairness" versus "justice" as some defining feature of socialism versus capitalism as if they are two totally independent variables. I believe it is both unfair and unjust that the "1%" have most of the wealth in society - the externalities that allowed them to amass this wealth seems to be glossed over in these discussions.

pslebow writes:

Regarding Peter B.'s infantilization concept - equating "socialism" with state control is a false equivalence used to then beat up the concept of socialism. Socialism places a heavy value on the overall good to society and believes humans have the capacity to view their self-interest as inextricably tied to that of society as a whole.

Top down societies are symptoms of misplaced and abused power, not economic models per se. That notwithstanding, apparently our capitalist system is fostering a de facto top down society in the US today.

SaveyourSelf writes:

5. Addendum

Earlier I posted a summary definition of Socialism. After further consideration, I think I can do better.

1) Socialism holds that hierarchical mechanisms for processing information work equally well in small and large groups.
2) Socialism values group outcomes above individual outcomes.
3) Socialism defines group membership based on similarities in individual characteristics (such as race, wealth, age, background, etc)
4) Socialism hold “Fairness” as a pinnacle virtue
5) Socialism hold that Fairness > Justice.


Given that group-composition fluctuates based on differences in individual characteristics (3), it makes sense that Fairness is such an important virtue to a Socialist (4). "Fairness" can be thought of as effortfully seeking similarity. Decreasing individual differences or increasing similarity between individuals would, by definition (3), increase the size of the group or decrease the number of separate groups. Larger group sizes and correspondingly fewer total groups is likely to decrease overall friction and strife since competing groups often interact destructively at their interface.

Similarly, it makes sense that a Socialist would value Fairness over Justice (5) since Fairness is a virtue that affects the group definition whereas Justice typically references outcomes affecting only individuals or minorities. Individual and minority outcomes are probably important to a Socialist, but less so than group outcomes (2).

Given this analysis, points (2), (3), (4), and (5) are all logically related to one another. Point (1), however, seems rather independent from the others. It may be that point (1) is not really a defining characteristic of Socialism. Yet I have never known a Socialist who did not adhere to (1). On second thought, markets require Justice as a minimum requirement to function (The Theory of Moral Sentiments II.II.18), yet Socialists do not value Justice as a pinnacle virtue (5). So if statements 2-5 were true, that would functionally undermine information processing mechanisms more advanced than the hierarchical model. So then point (1) is, in fact, logically related to the other statements, but indirectly through the environmental assumptions of markets.

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