Economic Theories and the Role of Politics

[Divinus Arma]

There are two extreme ends on the specturm of economic governance.

On the one end are the socialists/communists, who espose the theory whereby "from each according to his ability, and to each according to his need": namely, redistribution of property.

On the opposite end are capitalists, who argue that a market economy enables self-determination, and that this economic freedom defines both individual ability and individual need or want.


In either extreme, there is a political force to shape social governance towards the desires of either. This political force is driven by various factors depending on the region where one resides. Further, these factors take on new shapes, some contradictory and some complimentary, when placed in the increasingly global context.

Any one person may hold a belief sysetm that embraces either concept or, more commonly, a mix of the two.

What forces are behind either policy motivation for both ends of the specturm? Which do you feel is "best" and why? Which is best in the global environment?

[Papewaio]

I like a mixed version.

Free market with some delimiters:
No murdering or maiming others for resources even if they are your employees.
No dumping your refuse on other peoples property. This is a form of theft where you avoid the complete cost of production by passing it on to another body.
In general they can make a profit but not by harming others, and by honest bookeeping and product information. If it is to be a buyer beware economy the companies must provide all information that they have so the buyer can make an informed decision.

Government. Democratic Socialist.
The aim of government is to look after the People not the other way round. Government invests in the countries infrastructure. This is transport, health, education. Private companies are allowed to compete against the government for non-essential services or be brought into the fold to provide essential services under closer scrutiny then free market mechanisms would normally allow.

Welfare is to be treated like Hospitals. It is a solution until the person can get back on their feet. By no means should a family be multi-generational and fully dependent on welfare unless they are a bunch of war veterans and handicaps. Once a person is well they cannot stay at a hospital for free and use it like a hotel, same concept should apply to welfare.

The aim of the government within the sphere education and welfare is to increase the People's skills and abilities so that they can be fully independent members of the community. This means that they will be confident, educated and self reliant individuals who are more capable of looking after themselves, family and friends in times of peace and crisis. In turn they will be more capable of producing more for their businesses and creating more taxes that can be utilised by the government. Healthier people, business and society.

By minimising those dependent on welfare who really can look after themselves we can look after the truly wretched. More production and resources for a smaller segment of the community. The sick and old people. As our communities age we will need to be able to more aptly look after them... or we will have to send them to the Eskimo's for education in aged care.

[doc_bean]

What forces are behind either policy motivation for both ends of the specturm? Which do you feel is "best" and why? Which is best in the global environment?

I would think that capitalism would be popular when the average person can achieve a certain level of wealth and luxury. Communism is based on the idea that the working class is exploited, and so communist revolutions will often be a reaction of the poor to the rich. Socialism is similar, except without the nasty revolution aspect, countries like Venezuela have a large percentage of the population living in poverty.

Socialism in Europe (in its current form) got big after WWII, most countries (and the people) where poor, or at least had known serious hardship during the war. In modern day Europe I'd say socialism is mostly aimed to prevent situations where a large income gap exists between the poor and the rich, and it's part of our tradition.
This socialism allows the 'poor' to live up to their potential much easier (they don't have to work 3 jobs to go to college and pay of a loan for 20 years afterwards).

The best way ? Unbridled capitalism leads to a rather unstable situation with a few very rich people controlling most of the resources and industrial capacity, and having most of the political power. I'd say a bit of socialism is a good thing, certainly when it comes to children, rich children and poor children should have the same kind of chances, so that both can reach their full potential and contribute to society the most.

That, and I believe it's our duty as humans to take care of others, this can also be done by charity I know, but I'm far from convinced that's a better system (result-wise).

EDIT: too much socialism isn't a good thing either, since it breeds dependancy on the state, so a middle way is best

[AntiochusIII]

Strangely, I came into this thread expecting to debate the merits of Keynesian vs. Supply economics, alongside many other theories. Then again, learning the basic first is probably better.

As you've stated yourself, It's common to be between the two. The laissez-faire guy is just calling for monopolies and oligarchic business domination; the central-planning guy is just either an "equality" idealist, a megalomaniac, or just plain control freak with absolute distrust of business. >.>

Not very wise either way, I'd say. Absolute power corrupts absolutely, and absolute freedom allows, ironically, absolute power, as well...

[Sjakihata]

Just a shame there's no such thing as absolute freedom.

Communism is the only equal way of handling a society. And I have yet to meet an argument why society should not be equal. After all, we're all put here randomly, maybe against our will, to some random set of parents at some random place on the face of earth.

If you are familiar with Rawls Veil of Ignorance you will know my point. That is, if - before we are born - had to agree on some form of society, it would probably resemble communism (or at least social democratism).

So, to ensure that everyone at least get a fair amount of materials and wealth communism is the only rational way of government, everything else is like playing monopoly with the guy running the bank being a cheater and gives more notes to someone and not everyone.

[Divinus Arma]

Policy is used in every economic model to promote social responsibility, ensure competition, and support public infrastructure. There is another application of economic policy that is spoken of less frequently, namely: individual and organizational behavior control. An example of this is in punitive taxes, wherein a product or service is taxed heavily in order to decrease public use of that product or service. These are usually "moral vices" such as alcohol and tobacco, but now more products are facing this. It has been discussed by some that gasoline should be heavily taxed in order to stimulate desire for more efficient trasportation methods, be they individual transit or mass transit. Other examples abound, so this isn't just a focus on these products.

In addition to the original topic of the thread, what is your opinion of government economic policy used to regulate behavior?

[BDC]

I feel a government should provide security, health care, education and basic social care. No need to go overboard. And it should all be privatised... Government departments try to spend as much money as possible, companies try to run everything as efficiently as possible. Less taxes benefit everyone. The rich don't pay up anyway.

[Papewaio]

Communism is the only equal way of handling a society. And I have yet to meet an argument why society should not be equal. After all, we're all put here randomly, maybe against our will, to some random set of parents at some random place on the face of earth.

Why have a society that treats us all equal?

We are not the same sex, height, weight, skin tone. No equality there and I don't see anything wrong with being different. Why should I discriminate on the basis of difference? I shouldn't so why the need to make us equal?

We have different needs and wants. Again no equality there. I might find it strange that someone doesn't like chocolate. It doesn't make them wrong, so why should I force them to eat it?

What we should have is the ability to match our successes to our performance. Who we are born to should not limit who we become. Access to education and health should be something that society helps. However I strongly disagree with the idea that regardless of performance everyone should be treated equal. That only rewards the lazy and the stupid... ie the pollies.

[Divinus Arma]

the pollies or prollies?

I understand the comments here about equal opportunity to apply ability. After all, I was handed nothing and earned what I have today through hard work and sacrifice.

But consider this: If I work my butt off and earn a bunch of money based on my ability and performance, shouldn't I be able to die secure in the knowledge that my children are themselves secure in freedom from the slavery of daily wages? Isn't it my right to pass on some opportunity to my children so that they may choose their path rather than have that path chosen for them? After all, economic freedom enables personal freedom.

And, considering that, shouldn't private education be allowed? Why should a body of highly capable individuals not pass on their expertise at a price? What difference is there between selling a product and sellling knowledge?


On the other hand, publicly subsidized education should be exactly that: public.

I don't understand the anger towards those who have earned their living, or those that have recieved wealth from those that earned their living before them.

Public policy is geared towards one of two objectives: (1) allow those with capability to invest that capability in themselves, whether that capability is talent or wealth, or (2) force equality in an environment of natrually occuring inequality.

[Sjakihata]

Why have a society that treats us all equal?

We are not the same sex, height, weight, skin tone. No equality there and I don't see anything wrong with being different. Why should I discriminate on the basis of difference? I shouldn't so why the need to make us equal?

We have different needs and wants. Again no equality there. I might find it strange that someone doesn't like chocolate. It doesn't make them wrong, so why should I force them to eat it?

What we should have is the ability to match our successes to our performance. Who we are born to should not limit who we become. Access to education and health should be something that society helps. However I strongly disagree with the idea that regardless of performance everyone should be treated equal. That only rewards the lazy and the stupid... ie the pollies.

I think he means prollies, whom I thought did no longer exist ;)

I hear what you say, but you misunderstand my argument. Naturally we have biological differences, and actually in biology you have certain specifications that is what you call species normality, only anormalities doesnt fit this category (midgets, people born with one leg, two heads etc etc).
This I acknowledge is 'un'equal in the sense that not everybody have the exact same characteristics, however, a standard norm does still apply, and in that sense we are all equal (two arms, one head, etc).

What I am arguing is not to change nature - but to change what we, humans, have an ability to change. That is to ensure that we have the same facticity (the german word used by Habermas fakticität).
That we have the same structures in life, that no one is forced to be homeless. That everybody has a job. This is fundamental and no one should, because of heritage or birth, be having easier access to opportunities than others.

[Sjakihata]

If I work my butt off and earn a bunch of money based on my ability and performance, shouldn't I be able to die secure in the knowledge that my children are themselves secure in freedom from the slavery of daily wages? Isn't it my right to pass on some opportunity to my children so that they may choose their path rather than have that path chosen for them? After all, economic freedom enables personal freedom.

I don't think so. Quite simple, yes, your children are lucky to have a responsible and hardworking father, however, why should the children of poor and unemployed parents be punished, punished in the way that they havent got access to all the luxuries that your children has? What I mean is simply this, it is wrong to take innocent children as hostages. After all, it is not the childrens fault that they have lazy or bad parents, that's what I mean initially that we've all been put here randomly, so why, out of randomness, does someone derserve to go to the best private funded colleges while others dont? This imbalance is the job for society to even out. And don't worry, Im sure your hard work will pay off in numerous of ways. As a good rolemodel for your children, the satisfactory feeling (for you) to have struggled and won (a good secure life, family etc, what most can only hope for). These things (family) is of course off limits for the society, however, to ensure that at least everybody has equal rights and equal chances is the most noble of tasks, that's also why heritage should be banned, and all possessions transfered to the common good of society.

[Papewaio]

Pollies is short for Politicians... the most likely segment of any social order to leach from the rest.

I think I am in partial agreement with you Sjakihata-san, I am however probably a bit more jaded in the ability to attain a society of equal oppourtunities.

I believe that we should have access to things if we qualify. For instance regardless of wealth if you have the ability to do a Univesity course and pass it then you should have the oppourtunity. However if you are wealthy and wish to pay for a course that your grades did not qualify you for then by all means pay your own way as long as you don't take the position from someone who gained it through merit.

[Major Robert Dump]

You forgot to mention the part in free market where the people with money saturate the government to make laws that benefit their respective industry and income brackets, all while making it harder for people below them to achieve their level of success unless those people are family, all the while making it impossible for elected incumbents to be defeated without loads of money, all the while hiding behind a diluted idea of capitalism where a failing business can get a bail out so it can do it all over again, where tax credits are given so freely that companies depend on them to the point of playing employement blaclmail with the IRS, where you can overstate your projected gross sales for the next year to an unattainable goal so come tax time you can whine that you didn't meet your sales goals and beg for tax relief, where the cause is taken up and championed by the average working stiff out of fear that he will be taxed to death and have his estate pilfered on passing, when really he's just the stooge with a vote, like the guy on the other end of the spectrum who dreams of communist utopia.

The odd thing about taking such a pure approach to the types of economic governance is that it also tends to oversimplify the realities of the greed and apathy we live in, just as it does to look at legal issues from solely a constitutional standpoint.

[doc_bean]

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And, considering that, shouldn't private education be allowed? Why should a body of highly capable individuals not pass on their expertise at a price? What difference is there between selling a product and sellling knowledge?


On the other hand, publicly subsidized education should be exactly that: public.

I just feel that public education should be good enough so that private education is not financially justifiable for the parents (or people taking courses). It should be allowed, sure, but the level of public education should be enough so that no one needs it.

I don't understand the anger towards those who have earned their living, or those that have recieved wealth from those that earned their living before them.

There's a big difference between the two groups you describe here. The problem with inheritance ahs been mentioned a couple of times before: it is not the child's fault that it is born in a poor family. So basic 'rights' should be granted to everyone, regardless of their ancestors. The question is what those rights are, I believe healthcare and decent education are part of those.

Public policy is geared towards one of two objectives: (1) allow those with capability to invest that capability in themselves, whether that capability is talent or wealth, or (2) force equality in an environment of natrually occuring inequality.

Well I'd say socialism is fat closer to objective 1 than 2. 2 is communism.

[Kralizec]

If you are familiar with Rawls Veil of Ignorance you will know my point. That is, if - before we are born - had to agree on some form of society, it would probably resemble communism (or at least social democratism)

The problem with that theory is that some people are risk takers, and would chose a system in where you can better yourself at the detriment of others. Only if all people were safe playing cowards they'd all agree to total redestribution.

Working libertarian and socialist/communist societies are both utopia. The only thing that will work is a mixed system that acknowledges that both theories have practical shortcomings. The question is on wich principle should deserve emphasis: self determination or equality of wealth?

I chose the first, a moderately libertarian society, with some social security as a safety net for the unlucky.

[Sjakihata]

The problem with that theory is that some people are risk takers, and would chose a system in where you can better yourself at the detriment of others. Only if all people were safe playing cowards they'd all agree to total redestribution.

The minority perhaps, and if you take a 11 different people, and couldnt leave the room before they agree, the one risk taker among them would have to bow to the will of the many, according to the theory.

[Don Corleone]

I'm going to blow you away Sjakihata, and agree with you. IF you could implement true communism, it would the only moral and ethical choice.

Here's the catch, it is impossible to implement true communism, and the 'almost' variants are more unfair than any of the capitalistic alternatives.

The problem with a command economy is that somebody has to be in control and make the decisions. Let's just assume that you could find sufficient numbers of people that would be totally incorruptible (and when you consider the level of wealth they'd be controlling, we're talking Mother Teresa, Ghandi.... MLK Jr wouldn't have made my list, even though he's one of my heroes... showed partiality in distributing civil rights funds). That's one hell of an assumption but okay... now, how are they going to have the business accumen to continuously apply funds where they are needed? These people would have to be geniuses to make certain that every last product was produced at the optimal level... I'm not trying to raise the specter of the USSR here, but even THEY learned that their 5-year plans, (which I think they had honest intentions at the start).

It's an impossible tax for two reasons: 1) sufficient numbers of ethical people do not exist to have that level of control 2) even if they did, it's an impossible tax to properly manage a global economy through a command structure.

What do you wind up with if you shoot for communism but learn the lesson the hard way? Aristocracy. There's no other word for it.... Look at the former USSR. Look at China. Leadership positions within the party are hereditary. "Party member" and 'nobility' are essentially synonyms. Communism works beautifully, but only at the village level. Any sort of unfiication beyond the circle of personal knowledge leads immediately to corruption, castes and abuses of power.

The best thing about capitalism is that at it's heart, it relies on the 3rd great truth: not death, not taxes, but motivated self-interest... aka greed. Capitalism is absolute worst economic system out there, the most unfair, the most consumptary, the most vile, the most <insert negative adjective here> except for all the others.

[Sjakihata]

Well, I acknowledge that many problems (as you so kindly listed) with communism and I havent decided whether or not it in praxis is feasible or not. However, Im not really surprised that you agree with me, at least in theory, that it would be the best structure.
Capitalism, uncontrolled, will - in theory make one man own the entire world. That's also why I think you mean regulated capitalism, not to put words in your mouth, but just so that we understand each other.

Im more prone to Platos philosopher king(s) to rule a society, I think democracy is faulty and Id like one capable leader better.

I concede that you have a point with communism and agree with it entirely. Im not a brainless defender of it and I can see that danger as clearly as any sane person.

[Divinus Arma]

Very few people agree with completely unfettered capitalism. Even the most ardents proponents of capitalism agree that some regulation is necessary to ensure that lives, personal property, and the environment are not sacrificed on the alter of the almighty dollar.

It is a constant struggle to find balance between social responsibility and social liberty. One end of the spectrum is over-regulation and impacts productivity and liberty. The other end is not enough regulation and contributes to the destruction of the environment (Brazillian deforestation being one example), the confiscation of personal property (U.S. Supreme Court Case, New London), and the sacrifrice of lives for wealth (any U.S. HMO).

The goal of most American capitalists is to find balance where those with ability and desire are able to succeed without infringing on the rights of others.

If we unfairly overburden the successful with punitive taxes, there will be little incentive to succeed.

Being born with wealth does not infringe on other's rights. It creates opportunites that might not otherwsie exist. Wealth does not take away, it grants. In order to compensate, the rest of society is given ample opportunity to apply themselves and succeed. Thus the reason for publicly funded universities.

[AntiochusIII]

Very few people agree with completely unfettered capitalism. Even the most ardents proponents of capitalism agree that some regulation is necessary to ensure that lives, personal property, and the environment are not sacrificed on the alter of the almighty dollar.

It is a constant struggle to find balance between social responsibility and social liberty. One end of the spectrum is over-regulation and impacts productivity and liberty. The other end is not enough regulation and contributes to the destruction of the environment (Brazillian deforestation being one example), the confiscation of personal property (U.S. Supreme Court Case, New London), and the sacrifrice of lives for wealth (any U.S. HMO).

Agreed, but...

The goal of most American capitalists is to find balance where those with ability and desire are able to succeed without infringing on the rights of others.

By capitalists, do you mean capitalism-theorists, indifferent proponents of capitalism, or the capitalists-in-practice which are the businessmen and CEOs? Because apparently the last group's goal is not balance at all, but profit. We can see far too many examples to care anymore of this group's abuse.

If we unfairly overburden the successful with punitive taxes, there will be little incentive to succeed.

But of course, there is also a current massive, continuous fraud that takes advantage of the American tax system continuously, thus forcing the nation to rely on collecting money more and more from salaried members instead of the businesses...

Being born with wealth does not infringe on other's rights. It creates opportunites that might not otherwsie exist. Wealth does not take away, it grants. In order to compensate, the rest of society is given ample opportunity to apply themselves and succeed. Thus the reason for publicly funded universities.

But apparently publicly-funded universities aren't receiving enough funds to compete, so they collect from the students, too--there really is no practical difference in prices between a private liberal arts university and a public one...why?

Surely, lack of post-secondary education is now a serious detriment in the work market, and yet to get one one must pay on prices that would put the overwhelming majority of Americans on debt for years and years after graduation; how does that contribute to the concept of equal opportunity?

[Divinus Arma]

Policy is used in every economic model to promote social responsibility, ensure competition, and support public infrastructure. There is another application of economic policy that is spoken of less frequently, namely: individual and organizational behavior control. An example of this is in punitive taxes, wherein a product or service is taxed heavily in order to decrease public use of that product or service. These are usually "moral vices" such as alcohol and tobacco, but now more products are facing this. It has been discussed by some that gasoline should be heavily taxed in order to stimulate desire for more efficient trasportation methods, be they individual transit or mass transit. Other examples abound, so this isn't just a focus on these products.

In addition to the original topic of the thread, what is your opinion of government economic policy used to regulate behavior?

Anybody like to comment on this?