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July 11, 2006

Comments

DC

To take your last point first, sure a minimalist state is one way of avoiding domination by "the mob" - neuter democracy so as to protect liberalism. But what about the dominance of an economic elite - social, economic and political dominance, their ability to use their positions of relative power to shape the lives and constrict the autonomy of weaker groups and individuals? Is this not a potential problem?

On the whole zero-sum thing, you seem loathe to accept that state interventionism can be in anyone's interests. (Does this apply even to public sector employees?) But even if that were true, everyone's interests would still be badly affected by their political apathy, since they'd have an interest in minimising the harm the state did them.

"Without the coercive power of the state, the strong will usually be able to defend their own property rights by use of their own coercive power"

This may be a bit of a digression, but I think a case can be made that the historical process of state formation consisted of exactly this - warlords, feudal barons etc. gained and controlled their land through brute force, and were powerful enough to have their "right" to that land codified in law and enforced by the state, which was effectively "their own coercive power".

The (gradual and partial) democratisation of the state in turn led to any absolute right to property being infringed by increasing state taxation, redistribution etc. Ireland is a very good example of this history, looking at the dispossesion of the native Irish, followed centuries later by the dispossesion of the Anglo-Irish landlords with the Land Acts, a consequence in part of the democratisation of the British state.

But if you had ruled out redistributive action on the part of the state you would merely have been seeking to preserve the legacy of medieval plunder.

It is only a democratic state that protects the interests of the weak (as they percieve them), unless you mean the rich and powerful, who are of course numerically weak. But if you want to neuter the democratic state's activities, it will be not too much more than the protector of the property of the strong.

Frank McGahon

To take your last point first, sure a minimalist state is one way of avoiding domination by "the mob" - neuter democracy so as to protect liberalism.

No.This isn't quite right. It's not a matter of "neutering" democracy but setting limits on the proper role of government. You surely wouldn't agree that it is the proper role of government to choose which music (let's say the "democratic choice" is for only those tunes which make it into the top 20) you should listen to? If so, then you do recognise that there are limits. The only question is where those limits are.

But what about the dominance of an economic elite - social, economic and political dominance, their ability to use their positions of relative power to shape the lives and constrict the autonomy of weaker groups and individuals? Is this not a potential problem?

Is that how you characterise the liberal society in which we live? Because I don't recognise it. I don't see how the "autonomy" of weaker groups or individuals is affected in anyway by any elite. Unless by "autonomy" you mean a right to the fruits of others' labour.

On the whole zero-sum thing, you seem loathe to accept that state interventionism can be in anyone's interests. (Does this apply even to public sector employees?) But even if that were true, everyone's interests would still be badly affected by their political apathy, since they'd have an interest in minimising the harm the state did them.

Not at all. The point about a zero sum game is not that there's no benefit, but that the benefit is at the (exact) cost to others. In a negative sum game the cost to one party exceeds the benefit to the others and this is what happens when there's a deadweight cost associated with the redistribution (which is what happens in the real world).

This may be a bit of a digression, but I think a case can be made that the historical process of state formation consisted of exactly this - warlords, feudal barons etc. gained and controlled their land through brute force, and were powerful enough to have their "right" to that land codified in law and enforced by the state, which was effectively "their own coercive power".

I don't disagree with this but it doesn't really undermine my point. No matter how we've got to here, we're still here and in the status quo the "coercive" power of the state enforces a property rights regime that is a) more or less generally accepted and b) a necessary condition for prosperity and a liberal society.

The (gradual and partial) democratisation of the state in turn led to any absolute right to property being infringed by increasing state taxation, redistribution etc. Ireland is a very good example of this history, looking at the dispossesion of the native Irish, followed centuries later by the dispossesion of the Anglo-Irish landlords with the Land Acts, a consequence in part of the democratisation of the British state.

I don't think there's a useful analogy to be drawn. You're looking at going from a feudal system to modernity quite late, historically speaking. The argument against redistribution does presume a functioning liberal order which wouldn't describe Ireland outside the pale and you didn't see major redistribution of land inside the pale. Just to be clear, also, I've been quite careful to frame my support for property rights as due to the happy consequences which flow from a system of property rights - I'm not at all trying to make a case for absolute "natural" property rights.

But if you had ruled out redistributive action on the part of the state you would merely have been seeking to preserve the legacy of medieval plunder.

But, again, I think this falls into the trap of seeing wealth as a fixed amount. It's certainly the case that land is a fixed resource so it's possible that your argument has some merit in relation to land reform but it doesn't apply to wealth in contemporary society.

It is only a democratic state that protects the interests of the weak (as they percieve them), unless you mean the rich and powerful, who are of course numerically weak.

I would have thought it was fairly clear that the powerful are those who are in a position to protect their interests. In the case of anarchy suddenly descending upon Ireland, those among the Irish ultra-rich who remained would surely be in a position to hire a mercenary army to protect their interests.

But if you want to neuter the democratic state's activities, it will be not too much more than the protector of the property of the strong.

Not at all. For starters the state generally does uphold property rights without distinction. Impartiality is a basic principle of a liberal society. As I note above, there have to be some limits on what a government can do at the behest of democracy otherwise it's just mob rule.

DC

"In a negative sum game the cost to one party exceeds the benefit to the others...(which is what happens in the real world)."

Grand. So state action does benefit some at the expense of others. Now isn't it a priori likely that those with less political influence are more likely to be among the latter than the former? And that the politically apathetic are likely to have less influence than the more engaged?


DC

That related to the original dispute, but here's the meat of the thing.

"the 'coercive' power of the state enforces a property rights regime that is...a necessary condition for prosperity and a liberal society."

Well, I think "the rule of law" is on the whole a good thing, and that in any society the law will most likely define a property regime of some kind. However, I don't accept that the present property regime is in fact necessary for a liberal and prosperous society.

"I've been quite careful to frame my support for property rights as due to the happy consequences which flow from a system of property rights"

Yes, and I think this is a much better position than "purer" brands of libertarianism (or classic liberalism), which see taxation as immoral, regardless of its consequences. But, as I said above, I'm not opposed to "property rights" or "a system of property rights" per se - just what I see as an undemocratic, inegalitarian and unjust system of property rights.

"I don't see how the "autonomy" of weaker groups or individuals is affected in anyway by any elite. Unless by "autonomy" you mean a right to the fruits of others' labour."

But that's precisely it - within capitalist relations of production (i.e. our present property regime) wealth is distributed not according to who does the work, but in very large part according to who owns the means of production. The disparity in wealth between employers and employees is not a function of whose labour creates the most fruit, but of who is in a structural position to appropriate the fruit.

Capitalist property relations mean that some people have to sell their labour to earn a living, while others do not. The former (employees) are clearly in a subordinate, dominated, non-autonomous relationship with the latter.

Also the political system is dominated by the rich. This is obviously the case due to private funding of political parties and greater knowledge of and participation in the political system among the better off. But more fundamentally it is so because the state is dependent for its fiscal resources on the successful running of the private (i.e. capitalist) economy. That is, the state has to take special account of the reactions of capitalists to its policies, to avoid the perils of capital flight and strike.

This last point is central, I think, to our difference. Your economic liberalism is pragmatic in the sense that you don't claim any special legitimacy for present property relations. Rather you claim, I think, that state redistribution will end up having negative effects because high taxes will discourage private investment.

That's certainly not a silly argument. I actually think there's a lot of truth in it. But unless there's any particular reason why capitalists should be entitled to that kind of power (i.e. a kind of economic veto over state economic policy - the power to decide what policies are possible, "credible" etc.), then I think one should at least be honest and call it what it is - a ("pragmatic") capitulation to the powerful.

DC

In conclusion, if the glove don't fit, you must acquit!

Sorry, lost it a bit there...

Frank McGahon

So state action does benefit some at the expense of others. Now isn't it a priori likely that those with less political influence are more likely to be among the latter than the former? And that the politically apathetic are likely to have less influence than the more engaged?

Actually no. As it happens, the people who lose out are often not who you think. The bulk of tax revenue is paid by the rich - generally considered to have more political influence - not the poor. The reason high marginal tax rates are wrong is not because we should feel sorry for rich people but that a policy of "soaking the rich" ends up beggaring us all.

You seem to keep harking back to this fixed quantity of wealth business. If that were the case and it was simply a matter of the government pulling the levers and twisting the dials to ensure an equitable distribution, it might be logical that some sort of balancing act of competing interests would be beneficial. In the real world, the government can't really do to much about distribution without fecking the whole thing up and in the real world, the competing interests don't balance each other out but simply result in an escalating arms race. This is why I say it's better that there's less at stake in that arms race.

A simple way of putting it is that positive sum transactions increase wealth. If I make a widget and sell it to you, I trade a widget which is of no use to me for money (to buy a pair of trousers - which is another positive sum transaction) that I do want. You get the widget you wanted - both of us benefit. Generally, voluntary trade is a positive sum game. Meanwhile negative sum transactions reduce wealth. The trick, obviously - given that in a current standard issue democracy there will be quite a bit of government intervention, is to try not to let negative sum transactions exceed the positive sum transactions.

Frank McGahon

However, I don't accept that the present property regime is in fact necessary for a liberal and prosperous society.

Well you've been dancing around the question of what property regime would be preferable. Sketch it out for me and I'll see if I think it's any better or worse than what we have.

But that's precisely it - within capitalist relations of production (i.e. our present property regime) wealth is distributed not according to who does the work, but in very large part according to who owns the means of production. The disparity in wealth between employers and employees is not a function of whose labour creates the most fruit, but of who is in a structural position to appropriate the fruit.

I do realise this is the standard marxist position but it didn't really tell the whole story in the 19th century and it certainly doesn't today. The question of "ownership" of any means of production is secondary to the question of assuming risk. You don't have to "own" outright a "means of production" and few people who run businesses do own them outright. What the entrepreneur does is assume the risk - she borrows the money and/or is responsible for any losses and if it goes belly up, she has to pay. Of course, if it's successful she does well, but she'll have good months and bad months. The people who work for her, by and large, don't want that risk. If they stay working for her instead of starting up their own businesses, you can take it that they're more comfortable with the stability and security of a regularly paying job that they can usually take elsewhere if their boss goes bust. An economy where risk is rewarded is one which will see innovation and economic growth. If the reward is dished out regardless, there is no incentive for anyone to take a risk and start or expand a business and the "reward" will end up dwindling.

Capitalist property relations mean that some people have to sell their labour to earn a living, while others do not. The former (employees) are clearly in a subordinate, dominated, non-autonomous relationship with the latter.

"Clearly", how? Is Tom Cruise in "a subordinate, dominated, non-autonomous relationship" to his fans because he sells them his labour? Selling your labour is like selling anything else - it's a boon for the buyer and seller. Nobody's forcing you to work for anyone - in a country close to full employment (and with a welfare state to boot!) there are always other options.

Rather you claim, I think, that state redistribution will end up having negative effects because high taxes will discourage private investment.

Well that's only one effect but there are others and the net effect of increased redistribution (or "involuntary" trade) is to increase the number of negative sum transactions compared to positive sum transactions. This reduces wealth for all, but it will end up particularly hitting those on the bottom of the socio-economic ladder.

then I think one should at least be honest and call it what it is - a ("pragmatic") capitulation to the powerful.

You have this wrong. If by "powerful" you mean trades union (who have an awful lot more political influence in Ireland than any number of multi-millionaires) I'll agree. If by "powerful" you mean the super-rich, this just simply isn't the case. The odd corrupt developer or mobile-phone-license-purchaser aside, the vast majority of the super-rich are not rich due to government assistance. The super-rich can go anywhere. One should want the super-rich to remain here, pay taxes, buy goods and services. Abstaining from tax policies which would scare them off is not any kind of capitulation.

Frank McGahon

In conclusion, if the glove don't fit, you must acquit!

Sorry, lost it a bit there...

Nice one!

DC

"Nobody's forcing you to work for anyone - in a country close to full employment (and with a welfare state to boot!) there are always other options."

And gawd bless the welfare state for that, although at present it's not really much of a long-term option for anything other than poverty. While workers aren't forced to work for anyone in particular, they do have to work for someone. (Someone once said that the option to choose a new master does not constitute the abolition of slavery). As for Tom Cruise, besides the fact that he is an extremely atypical worker, the relationship I was referring to was not that between workers and consumers but between workers and their employers. Even among actors, the overwhelming majority are subordinate etc. to their employers.

"the super-rich are not rich due to government assistance."

Government is the precondition of their wealth - enforcement of property rights, maintenance of law (and "order"!), infrastructure, provision of healthy, literate and appropriately trained workers.

"The super-rich can go anywhere. One should want the super-rich to remain here, pay taxes, buy goods and services. Abstaining from tax policies which would scare them off is not any kind of capitulation."

I don't give a toss where they go - it's their money that counts. And yes, it is generally in the interests of a state or country to have their money there, which means it is in its interests not to pursue policies that upset them. This means the wealthy have a special influence over the state, one wielded by them by virtue of their wealth. But since they have no special right to their wealth, that power is illegitimate, and any decision to cater for their interests in order to keep their wealth in the country is indeed a capitulation (perhaps a wise one!) before their illegitmate power.

Frank McGahon

And gawd bless the welfare state for that,

Steady on!

although at present it's not really much of a long-term option for anything other than poverty.

Which is only proper. If it were any more attractive than that, there wouldn't be enough productive people left to pay for it or provide the goods and services that people on "attractive welfare" would want and need.

While workers aren't forced to work for anyone in particular, they do have to work for someone.

Well, they could always work for themselves. I have to say I fail to see what the problem is here anyway. Regretting the fact that one has to work (while presumably expecting most of the things, one's income goes towards) is like regretting that money doesn't grow on trees.

(Someone once said that the option to choose a new master does not constitute the abolition of slavery).

Well that someone was an idiot and has a remarkably ignorant understanding of the reality of slavery.

As for Tom Cruise, besides the fact that he is an extremely atypical worker, the relationship I was referring to was not that between workers and consumers but between workers and their employers. Even among actors, the overwhelming majority are subordinate etc. to their employers.

Their "employers" are ultimately the people who go to see their movies, and you have a definition of "subordinate" which is so broad as to be meaningless if it encompasses child slave labour and, say, Kate Bosworth.

Government is the precondition of their wealth - enforcement of property rights, maintenance of law (and "order"!), infrastructure, provision of healthy, literate and appropriately trained workers.

Again, this is overly broad. If government as you describe it is the precondition for the wealth of the super-rich, it's also the precondition for the wealth (such as it is) for everybody else. So, this won't really do - there's no special exception for the super-rich.

This means the wealthy have a special influence over the state, one wielded by them by virtue of their wealth. But since they have no special right to their wealth, that power is illegitimate, and any decision to cater for their interests in order to keep their wealth in the country is indeed a capitulation (perhaps a wise one!) before their illegitmate power.

Even leaving aside the fact (which I mentioned above) that Trades Union have vastly more power than "the rich" in Ireland, this, I'm sorry to say, is nonsense. You keep making such statements but haven't produced anything to back it up. There are plenty of multi-millionaires in Ireland, most of whom have become wealthy over the last ten years. They aren't feudal lords. None of that wealth is "illegitimate" any more than whatever property you or I have.

Don't take this the wrong way - because I have enjoyed the discussion - but I don't think this debate is really going anywhere. There is an argument ( pdf here) that it's impossible to have "honest disagreement" between two "truth-seeking agents" with common priors. It's probably the case here that we don't have common priors, so let's just agree to honestly disagree.

DC

"let's just agree to honestly disagree"

Agreed. I hate these long-running comments-debates, the tendency of posts to get ever-longer in a futile effort to convert the antagonist - yet it always seems impossible to resist keeping going one post more.

At this stage I think anyone else interested can draw their own conclusions (specifically that I'm right and your wrong)...

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