How Americans view inequality

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Johnny Eagles berlin 24 Aug 12 2.53pm
Quote The White Horse at 23 Aug 2012 6.07pm Quote Johnny Eagles at 23 Aug 2012 4.28pm Do you think the most equal societies in the world put equality before achieving more wealth? They don’t. They have an economic policy focused on exports and strong wealth-creating domestic growth, which they use to pay for all their nice social policies. This must be a classic "chicken and egg" scenario, surely? It's pretty impossible to say whether it's successful economies which spawn thriving social democracies or the reverse. But I think it's a bit cheeky trying to appropriate the success of Scandinavian countries as a victory for "putting achieving wealth first". I'd argue that when a country is getting in more in tax receipts than it's spending, it faces a choice between lowering taxes and increasing spending. Social democracies generally choose the latter, whilst more unequal countries continue to choose the former. There are many acts which achieve both wealth and greater equality. Like educating all of your citizens to a good standard, providing decent healthcare for all and so on and so forth. My argument is that there should be an enormous focus on these, rather than (as is common in the Western world) 20 years of "freeing up the markets" and 10 years of "inflating the state". You're right about the "obviousness" of the fact that economic growth is pursued ahead of reducing inequality, but I don't really see why there's such a profoundly perceived dichotomy. You can get economic growth with a social democracy or without one, it's just a question of whether you're willing to take the "risk" of "crowding out private sector growth". Quote Johnny Eagles at 23 Aug 2012 4.28pm Countries which put equality before growth in terms of economic policy tend to end up like, say, Venezuela. Lots of talk about how lovely and equal we all are, but when the president (who lives in a much bigger house than everyone else) gets ill, he faffs off to another country to use their health service because he doesn’t trust his own. I don't want to get into a discussion about Hugo Chavez any more than I want to get into a discussion about Fidel Castro. Mainly, of course, because throwing communism (or at least, radical socialism) into a discussion about the role of reducing inequality turns the discussion quickly into a farce. Power hungry despots tend to interfere with reasoned debate. Quote Johnny Eagles at 23 Aug 2012 4.28pm Or they end up like the EU. Lots of nice, well-meaning bureacrats creating lots of well-meaning laws designed to establish equality for all, while rewarding themselves for all that egalitarianism with massive tax-free salaries. The EU is not a left-wing organisation. I’m going to concede to you on all of your main points. (Partly because I seriously need to spend less time on here.) Yes, it’s chicken and egg. Equality and wealth creation are impossible to extricate from each other outside of meaningless theory or dangerous ideology. Yes, a focus on equality is vital to economic development. Yes, it was frivolous to throw Chavez and corrupt elites into this particular argument. Yes, “freeing up business” is counterproductive if you don’t invest and deliver great education (my views on the UK’s total failure to do the latter I have pointed out elsewhere). I concede all of these points to you. I still refuse to condemn Thatcher’s economic policy, despite the contribution of its more ideological aspects to our current woes. The UK economy in 1979 was a basket case. She massively ramped up GDP per capita. She deserves some credit. And I still think “freeing up business” is quite important. Even you have to admit the whole world is dependent on the innovation and entrepreneurism of the US economy. State intervention can sometimes help innovation, but much more often it stifles it. To indulge in a little thought experiment, say we had to found a new country tomorrow and had to choose either a high tax social democratic or low tax laissez-faire economic model. All things considered, I would probably swallow my skepticism of big state interventionism and (assuming I didn’t choke) go for the high tax social democracy. However, I would make three provisos when founding Johnny-Eagles-Land: 1. I would still try to free up business. If you treat business as a “necessary evil” to extract taxes from (which is what ideological social democrats do) you end up doing all kinds of long-term damage. 2. I would try to encourage entrepreneurship. (In Johnny-Eagles-Land we would do this by radically cutting back welfare.) People in European Social Democracies rarely start businesses. They become employee drones, bureaucrats or benefit-junkies. Mark my words, for all its lovely equality and free healthcare, the lack of innovative new companies in continental Europe will cause an economic crisis within 20 years. 3. Finally, and most importantly, the first thing I would do, before I even start writing ny constitution or appointing ministers, is make damn sure Johnny-Eagles-Land is populated by Protestant northern Europeans. Much less important than any economic model is having an honest and efficient population. (Plus it would stop me having to waste resources building those forced-labour camps.) ...we must expand...get more pupils...so that the knowledge will spread...
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Johnny Eagles

berlin 24 Aug 12 2.53pm

Quote The White Horse at 23 Aug 2012 6.07pm

Quote Johnny Eagles at 23 Aug 2012 4.28pm

Do you think the most equal societies in the world put equality before achieving more wealth? They don’t. They have an economic policy focused on exports and strong wealth-creating domestic growth, which they use to pay for all their nice social policies.

This must be a classic "chicken and egg" scenario, surely? It's pretty impossible to say whether it's successful economies which spawn thriving social democracies or the reverse. But I think it's a bit cheeky trying to appropriate the success of Scandinavian countries as a victory for "putting achieving wealth first". I'd argue that when a country is getting in more in tax receipts than it's spending, it faces a choice between lowering taxes and increasing spending. Social democracies generally choose the latter, whilst more unequal countries continue to choose the former.

There are many acts which achieve both wealth and greater equality. Like educating all of your citizens to a good standard, providing decent healthcare for all and so on and so forth. My argument is that there should be an enormous focus on these, rather than (as is common in the Western world) 20 years of "freeing up the markets" and 10 years of "inflating the state". You're right about the "obviousness" of the fact that economic growth is pursued ahead of reducing inequality, but I don't really see why there's such a profoundly perceived dichotomy. You can get economic growth with a social democracy or without one, it's just a question of whether you're willing to take the "risk" of "crowding out private sector growth".

Quote Johnny Eagles at 23 Aug 2012 4.28pm

Countries which put equality before growth in terms of economic policy tend to end up like, say, Venezuela. Lots of talk about how lovely and equal we all are, but when the president (who lives in a much bigger house than everyone else) gets ill, he faffs off to another country to use their health service because he doesn’t trust his own.

I don't want to get into a discussion about Hugo Chavez any more than I want to get into a discussion about Fidel Castro. Mainly, of course, because throwing communism (or at least, radical socialism) into a discussion about the role of reducing inequality turns the discussion quickly into a farce. Power hungry despots tend to interfere with reasoned debate.

Quote Johnny Eagles at 23 Aug 2012 4.28pm

Or they end up like the EU. Lots of nice, well-meaning bureacrats creating lots of well-meaning laws designed to establish equality for all, while rewarding themselves for all that egalitarianism with massive tax-free salaries.

The EU is not a left-wing organisation.

I’m going to concede to you on all of your main points. (Partly because I seriously need to spend less time on here.)

Yes, it’s chicken and egg. Equality and wealth creation are impossible to extricate from each other outside of meaningless theory or dangerous ideology. Yes, a focus on equality is vital to economic development. Yes, it was frivolous to throw Chavez and corrupt elites into this particular argument. Yes, “freeing up business” is counterproductive if you don’t invest and deliver great education (my views on the UK’s total failure to do the latter I have pointed out elsewhere). I concede all of these points to you.

I still refuse to condemn Thatcher’s economic policy, despite the contribution of its more ideological aspects to our current woes. The UK economy in 1979 was a basket case. She massively ramped up GDP per capita. She deserves some credit.

And I still think “freeing up business” is quite important. Even you have to admit the whole world is dependent on the innovation and entrepreneurism of the US economy. State intervention can sometimes help innovation, but much more often it stifles it.

To indulge in a little thought experiment, say we had to found a new country tomorrow and had to choose either a high tax social democratic or low tax laissez-faire economic model.

All things considered, I would probably swallow my skepticism of big state interventionism and (assuming I didn’t choke) go for the high tax social democracy.

However, I would make three provisos when founding Johnny-Eagles-Land:

1. I would still try to free up business. If you treat business as a “necessary evil” to extract taxes from (which is what ideological social democrats do) you end up doing all kinds of long-term damage.

2. I would try to encourage entrepreneurship. (In Johnny-Eagles-Land we would do this by radically cutting back welfare.) People in European Social Democracies rarely start businesses. They become employee drones, bureaucrats or benefit-junkies. Mark my words, for all its lovely equality and free healthcare, the lack of innovative new companies in continental Europe will cause an economic crisis within 20 years.

3. Finally, and most importantly, the first thing I would do, before I even start writing ny constitution or appointing ministers, is make damn sure Johnny-Eagles-Land is populated by Protestant northern Europeans. Much less important than any economic model is having an honest and efficient population.

(Plus it would stop me having to waste resources building those forced-labour camps.)

...we must expand...get more pupils...so that the knowledge will spread...

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