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May 18, 2004

Comments

Peter Nolan

Have a look at this paper, making the same point in an Irish context

http://members.tripod.com/~gdavis2/fam.txt

enda johnson

"an examination of both the Irish Famine and the experiences of more recent events in Africa reveals that the expansion of the state's role does not necessarily bring about improvement" - a well argued piece but i fear it ignores the reality that government intervention in 19th century ireland did not even pretend to act on behalf of the people of ireland. therefore the comparison between the colonial occupation of ireland and foreign direct aid to african coutries is flawed. for another good review of misapplication of capitalist liberalism and its role in the extermination of irish natives see scroll to: The Irish Famine, 1845-50
dogma is the enemy of humanity, dogmatic liberalism as much as dogmatic marxism or any other ideology.

Frank McGahon

I do agree that dogma is the enemy of reason, any political philosophy must be grounded by empirical observation, but in the case of the famine, one could just as equally attribute it to the non-liberal, non-capitalist condition of serfdom which preceded it as to the scrupulously non-interventionist government reaction.

It is quite wrong to bracket liberalism with marxism as if it were merely by the level of "dogmatic application" that they differed. Liberalism (of the classic variety) works, free markets work, this can be empirically observed. Marxism doesn't work, couldn't ever work, barring a re-engineering of (self-interested) human nature.

Brian

It's not so much economic illiteracy as a blind adherence to ideology. As I pointed out in my essay The self-delusional nature of Exceptionalism:

The main problem with strict adherence to ideology and theory is that they often work well in a textbook but poorly in practice. In some cases, theories work well in small, controlled settings but are not adaptable to larger situations. The collective is an example of this. Any ideology that fails to take into account human nature is bound to fail.

enda johnson

frank,
Liberalism (of the classic variety) works - well it clearly didn't work in 19th century ireland. for obvious reasons, i know, but nevertheless it was purused by dogmatic nutters to the detriment of humanity. marxists will also argue that marxism would work if correctly applied in the correct conditions, but the reality is that the perfectly clear canvass required as a precursor to the construction of a liberal or a marxist utopia will never occur naturally and dogmatists who fail to see this are in error. the title of the original post is clearly correct, but it seems to imply that Foreign Aid is always Worse, which is patently untrue.

Frank McGahon

Brian,

I think you misunderstand why small collectives work and big ones don't. It isn't that the theory is applicable only at a small scale. While Chaos theory suggests that any system becomes unpredictable as it becomes larger this is not the salient distinction. The reason smaller collectives work is that they are voluntary. Larger collectives tend to be coerced. If you choose to join a collective you are motivated to make it succeed, if you are simply assumed to be part of a collective or forced to join it, you may have the opposite motivation.

Frank McGahon

Enda,

I don't maintain that all Foreign Aid makes things worse but you have to take into account effects of large injections of cash into local economies. Another example, Aid workers swarm into an area with their gleaming white range rovers. Their spending power overwhelms the local economy. Their idea of "cheap" or "value" is much more expensive than that of the locals. Service industries to these wealthy westerners crowd out other local businesses, then when they move on both the new service businesses collapse alongside the older ones. Foreign Aid is good at immediate interventions to assist local governments deal with particular crises, such as earthquakes, ebola outbreaks etc. What it is disastrous at doing is maintaining medium term and long term projects.

As for your curious insistence on bracketing liberalism with marxism, the Irish famine is as much an indictment of feudalism and the legacy of the penal laws as it is of non-interventionist government. Yet this example, even if used to highlight the "failure" of Classic Liberalism stands alone. Every single instance of Marxism in practice has failed miserably. Every last one. Marxism can be shown theoretically to fail, it requires 100% compliance to achieve its goal, it can be shown empirically to fail. It assumes that human nature may be re-engineered so that everybody puts the good of the collective ahead of personal interest. Unlike Marx, we know that human nature is less mutable.

enda johnson

frank,
there are many characteristics of modern western societies that could be characterised as marxist - socialised healthcare, welfare state etc. these do not demonstrate marxism's universal failure. i have no doubt that a liberalist utopia would be every bit as much a nightmare as cambodia or china. the fact the democratic nations do not vote for such liberalism indicate to me that human nature in general recognizes this. the only peoples forced to live in this 'utopia' do so down the barrel of a gun - 19th century ireland, modern day iraq, maybe? well adjusted & rational societies do not reject any policy merely because they could be described as marxist or liberal, but rather tend to apply policies on their merits and change those that can be shown to have failed. only the dogmatist will pursue the utopia, regardless of cost.

enda johnson

frank,
Neither is exactly a shining success and both are unsustainable in the long run. - i'll grant that both have flaws but i honestly cannot conceive of a rational or humane society that would seek to fucntion without these basic guarantees of support.
as i said the only scenario is see a liberalist utopia arising, is where it is imposed militarily. i.e a country is invaded, occupied, has all its assests 'sold' to the highest bidder and a laissez-faire government imposed. of course, that goevernment would be voted out at the 1st opportunity, so either elections get postponed indefinitely or the utopia must collapse. of course the boundless misery casued by this experiment should be clear to all but the dogmatists.
i don't claim that social democracy is a advert for successful marxism, just that it has elements of both it and liberalism, in varying mixes, according to the preferences of the people. social democracy is a triumph of rationalism over dogma.
to tie into the main point again - the only humane response to famine is aid, a point lost on the british in the 19th century and seemingly lost on some of the more dogmatic free marketeers.

Frank McGahon

Enda,

Your attachment to the creaking socialised medicine system and, often disastrous-in-effect, welfare is touching, maybe I'll write a bit more about the problems with these in another post and we can resume our discussion but I just wanted to comment on this:

the only humane response to famine is aid, a point lost on the british in the 19th century and seemingly lost on some of the more dogmatic free marketeers

This, itself, is a dogmatic statement. The only immediate humane response to starvation is feeding the starving. That is not the same thing as saying that Aid is the only response to famine. Read the post I linked to: Food aid applied too liberally can destroy the delicate local economy leading to longer term famine. If you send more than is needed just to feed the starving and for longer than is necessary, no local farmers can compete with "free". This is even assuming that the aid reaches intended recipients. That is a big assumption. It is frequently the case that famine is caused by war, not by simply natural disaster. One consequence of shipping a load of food aid into an area where fighting persists is that it is the most heavily armed who will appropriate that food. This helps perpetuate the conflict. This is not as simple as you make out and a truly non-dogmatic approach would look at all predictable outcomes and not just the intentional outcomes.

enda johnson

i look forward to the next post!

Peter Nolan

"social democracy is a triumph of rationalism over dogma"

Jaysus Enda, where have you been hiding the last thirty-five years? Do you seriously think anybody takes social democracy seriously as a successful blueprint for running a country?

You may have noticed what a rip-roaring success the heavily-regulated corporatist "social market" in Germany has been for the past fifteen years?

Or how subsidies and protectionism has led to the dominance of Europe and the world's cinema screens by French movies?

Or how Irish trade unions, farmers, protected businesses like AIB put aside their selfish short-term interests for the good of the nation?

enda johnson

ok peter, maybe i overstated my enthusiasm for the status quo in my eagerness to condemn the folly of dogmatic liberalism - but it is hard to refute the stability of social democracy (warts and all). what blueprint do you propose?

enda johnson

ok peter, maybe i overstated my enthusiasm for the status quo in my eagerness to condemn the folly of dogmatic liberalism - but it is hard to refute the stability of social democracy (warts and all). what blueprint do you propose?

Frank McGahon

Enda, the stagnation of social democracy might easily fool you into thinking that it is "stable" but it isn't. Germany is stagflating its way to a real crunch. Sooner or later there just won't be enough workers willing to pay the high taxes necessary to maintain all the retired Germans to the standard to which they are accustomed. Here's a quick and easy demonstration of one problem with social democracy

1. High taxes = low growth

2. Low growth = high unemployment

3. Generous unemployment benefit = incentive not to take up work on the margins which negates the effect of unemployment in driving down labour costs

4. Businesses become uncompetitive as measured against those from non-social democratic systems, more people get laid off.

5. Taxes must be raised further to support extra unemployed. which brings you back to 1.

There are many more which can be done such as the regulatory burden or the unintentional but predictable consequences of "free" healthcare.

Peter Nolan

Dear Enda and Frank,

A second point I'd make, and in this I differ somewhat from Frank, is that liberalism isn't for the most part a theory or a dogma. Instead, for many people, it's essentially reactive, rejecting ideas such as communism, or social democracy or the far-out manifestations of nationalism in favour of incremental change and working with human nature as it is.

So there is no blueprint. Nobody, myself included, can hope to even vaguely understand society enough to do more than push it a little bit.

What's extreme in this? The figures who've probably done most to advance what you call this liberal agenda have been one-time social democrats - think of Al Gore pushing through NAFTA, Daniel Patrick Moynihan reforming the welfare system he helped create and New Labour bringing back the commercial and non-profit providers swept away by the formation of the NHS in the forties.

To be honest, I'm glad we agree on free trade, because the pressure to change that probably won't be effective unless it comes from those who act as advocates for the third world and lower-income households here - which may be more the Greens and maybe Labour than my own party (FF). Equally, I want to see things like the tax privileges given to the film business, artists and the bloodstock trade eliminated; do you defend these as "From each according to their ability, to each according to their needs"?

So, to the extent there is a blueprint, it involves a combination of incremental and exogenous social and technological change, and just learning from what has been successful in other countries. As Frank points out, the Rheinish model hasn't proven itself very successful anywhere recently and policy-makers and the public learn, albeit slowly and imperfectly, from their mistakes over time.

Will people vote for this? I think so - the evidence in Britain, the US and Ireland seems to show that socially-tolerant and economically-conservative politicians, of whom Arnold Schwarzenegger is the most recent example, can implement popular programs of liberal reform. Most likely though, the battle is more at a background level, in the intellectual realm, rather than explicitly in party politics per se. This was how the Fabians were so successful and the liberals adapted the model.

As for foreign invasion, don't forget that among the world's most successful economies is Hong Kong, which was still a colony a decade ago. Many other Asian countries - Korea, Thailand, Taiwan, Indonesia, Singapore - also seem to have combined economic growth and democratisation, when they were dominated by the US, in many cases with large military bases on their soil. Indeed, in the Philipines and other countries, a key role was taken by none other than Paul Wolfowitz. John Kerry's role looks unheroic contrast; see for example
http://www.weeklystandard.com/Content/Public/Articles/000/000/003/947nzczv.asp?pg=2

Good day to you both,

Peter

Frank McGahon

in this I differ somewhat from Frank, is that liberalism isn't for the most part a theory or a dogma

You overestimate the difference between us. I think this is an apt description of (classic) liberalism and indeed applies similarly to libertarianism. There are plenty of dogmatic Libertarians but most leftists and rightists regularly assume libertarianism to be a "system" analogous to competing systems like communism or social democracy. One of the most attractive features of libertarianism is that it is opposed to such systems.

Re. FF, I take it, Peter, that you are on the McCreevy wing as opposed to the Dempsey/Martin wing?

Peter Nolan

It's a bit hard for me to keep track from London, but I'd say so.

FF has the advantage, unlike FG or the PDs, of already being close to what Tony Blair called Mondeo Man and I think the party will continue to change to keep up with that.

I don't understand what FG really stands for. Answers on a postcard please....

Peter Nolan

To go back to the original topic, lot of the commentators like Monbiot, in analysing the economy are like vegans in the butcher's shop; you can't expect them to understand what they despise and have no first-hand knowledge of.

If you despise modern capitalism, you're more likely to turn to either some Caliban's kingdom like Cuba or Chiapas as a supposed utopia or to take refuge in a blinkered concern for the third world or the environment.

I think it's similar to the way that Irish priests have unhealthy attitudes to sex and money; given that they renounce them , they keep an adolescent attitude. I find other cultures' ethics for commerce, government and family life much more sensible than the Catholic verion.

Just some thoughts

Peter Nolan

To go back to the original topic, lot of the commentators like Monbiot, in analysing the economy are like vegans in the butcher's shop; you can't expect them to understand what they despise and have no first-hand knowledge of.

If you despise modern capitalism, you're more likely to turn to either some Caliban's kingdom like Cuba or Chiapas as a supposed utopia or to take refuge in a blinkered concern for the third world or the environment.

I think it's similar to the way that Irish priests have unhealthy attitudes to sex and money; given that they renounce them , they keep an adolescent attitude. I find other cultures' ethics for commerce, government and family life much more sensible than the Catholic verion.

Just some thoughts

Peter Nolan

Hey Enda, come on back and have a go - if you think you're hard enough.

enda johnson

;)
i wating for frank's follow-up!

Peter Nolan

I'm rooting around in the chapters on economic growth and development in Greg Mankiw's Macroeconomics textbook, which mainly covers the Solow growth model and its application. Would you like to join me?

http://www.amazon.co.uk/exec/obidos/ASIN/0716752379/qid=1085343285/sr=1-1/ref=sr_1_11_1/026-2521334-9936457

enda johnson

i'll have to look into that. thks.
i'd recommend Gnéithe den Ghorta (ed. Cathal Póirtéir) for accounts and analysis of the human cost of unbridled capitalism.

Peter Nolan

I got the story in Foreign Policy magazine, which is slightly more populist that Foreign Affairs, about Ireland's ranking for its contribution to the development of the third world. We come fourth last, down one place in the ranking of 21 countries since last year.

http://www.danieldrezner.com/archives/001316.html

http://www.foreignpolicy.com/story/cms.php?story_id=2540&print=1

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