Toward a Larger Left

by Aaron Swartz on August 4, 2009

Stanford, like many universities, maintains full employment for humanities professors by requiring new students to take their seminars. My heart burning with the pain of societal injustice, I chose the one on “Freedom, Equality, Difference.”

Most of the other students had no particular interest in the topic—they were just meeting the requirement. But a significant minority did: like me, they cared passionately about it. They were the conservatives, armed with endless citations on how affirmative action was undermining American meritocracy. The only other political attitude I noticed was a moderate centrism, the view espoused by the teacher, whose day job was studying Just War Theory.

It quickly became clear that I was the only person even remotely on the left. And it wasn’t simply that the others disagreed with me; they couldn’t even understand me. I remember us discussing a scene in Invisible Man where a factory worker brags he’s so indispensable that when he was out sick the boss drove to his house and begged him to come back, agreeing to put him in charge. When I suggested Ellison might be implying that labor, not management, ought to run workplaces, the other students (and the teacher) didn’t just disagree—they found the idea incomprehensible. How could you run a factory without managers?

This is the reproduction of American intellectual culture: a large number of vocal and articulate conservatives, a handful of mushy moderately-liberal centrists, and an audience that doesn’t much care. (Completing the picture, the teacher later shouted me down for bringing up inconvenient facts during a discussion of Vietnam.)

It’s a future that worries George Scialabba. He cares passionately about the humane left-wing tradition, but he’s forced to watch it shrivel. As he observes, the conservatives receive prominent places in industry (including industry-funded think tanks), the centrists are quarantined in hyperspecialized programs at universities, and the real leftists can barely get a toehold. (The Soviet Union fell, seems to be the dominant position. Why are you still here?)

The question is what to do about it. George hails the few exceptions (Noam Chomsky, Alexander Cockburn—names presumably picked to provoke) who have managed to eke out a niche exposing the falsehoods and bucking the consensus, getting pushed to the cultural margins for their trouble. Henry proposes a more technical version, where left-wing critics don’t argue to the public (which in practice seems to mean the 20,000 readers of Z Magazine) but instead to elites, especially disciplinary experts, using a field’s flaws against itself (ala Doug Henwood). And Michael seems to make the usual retort that such extremism never gets an audience, let alone an accomplishment—only incrementalism and realist accommodation to power will make a difference in people’s lives (perhaps Ezra Klein could be the poster boy here).

This debate is not dispassionate. It’s a muddy mix of trying to work out what to do with our lives and how to justify what we’ve already done. Personally, I adore Chomsky, Henwood, and Klein—I find both their writing and their personalities incredibly inspirational. And while I could quibble with their strategies, it’s difficult for me to imagine, let alone desire, a world in which they did anything particularly different. But my own plans—forged in that Stanford classroom and (to my surprise) unshakable ever since—take a different tack.

A new media world is emerging. The mainstream media outlets that won’t even bother to print Chomsky’s response when they libel him are fading, while alternative media explodes. Alexander Cockburn publishes not one, but a dozen articles each day at CounterPunch.org. Amy Goodman has a daily television news show carried on over 700 stations. There’s a whole Chomsky Industry, which gets at least a shelf even at suburban chain bookstores. Socialist-feminists like Barbara Ehrenreich write New York Times bestsellers. Hell, we even have a socialist US Senator now!

Then there’s the whole new generation of political bloggers. DailyKos, Atrios, and so on have a combined readership in the millions and are all consistently venomous toward the bulk of the Democratic Party and the media. Their work is broadcast nightly on major networks by Jon Stewart and Rachel Maddow. (The West Wing even made Atrios a character.) Even Scialabba admits (although not in his book) that if he wants to spend time with like-minded friends, he heads to Crooked Timber.

But while this clearly has a salutary effect on mainstream political culture (witness Stephen Kinzer’s transformation from Noam Chomsky’s bête noire to Amy Goodman’s guest), it hasn’t exactly created an alternative culture of its own. Conservatives, centrists, liberals—they all repeat their fundamental premise: We’ve got a pretty good system going here. Sure, there may be some trouble around the edges (liberals think more, conservatives think less), but, as McCain said, the fundamentals are still strong. The lines are so well-publicized that even college freshmen can repeat them down to the soundbite.

The left has succeeded in making it sound hollow and unconvincing. Your average liberal blogger is happy to admit all the papers are full of lies, all the politicians are bland sellouts, and the government is run by lobbyists and corporate hacks. And (nothing new here) your average citizen is happy to agree (it takes a lot of education to be dumb enough to think otherwise). But where do you go from there? Elect Howard Dean?

The Popular Front is long dead, the labor unions have all but fizzled out, the New Left never had much of a plan (“We must name that system,” SDS cried. “We must name it, describe it, analyze it, understand it and change it.” Apparently they never got past naming) and barely even exists anymore. The term socialism has become so watered-down that it polls roughly equal with capitalism among the under-30 set—apparently it now means anything to the left of austere neoliberalism (except file-sharing, of course).

If there was ever a time for a new program, this would seem to be it. The economic crisis has shattered the Washington Consensus more than a thousand Chomsky op-eds could, while the Internet has made it possible to organize people by the million. But the left can’t seem to move beyond its reactive stance. If you want books that criticize the policies of the Bush administration, you can fill up a whole library. But if you want books on what to do instead, where do you go? The only left-of-center group seriously putting out policy proposals is Third Way. (Sample recommendation: “Moderniz[e] our intelligence force… [hold a p]ress conference highlighting the 20th anniversary of the creation of al Qaeda.”)

There is a coherent, alternative ideology on the left. Scialabba, summarizing Chomsky, even takes a stab at laying it out: “the fundamental purpose of American foreign policy has all along been to maintain a favorable investment climate … the American intelligentsia, though less harshly and clumsily regulated than its Soviet counterpart, has been no less effectively subordinated to the goals of the state.” (I would add only that the domestic economy is structured to make the majority of the population expendable servants of the rich.) Scialabba lays it out, but Chomsky (as far as I can find) never does.

I’ll even go further and take a stab at describing Chomsky’s solution: democracy. Media democracy, to prevent the population from being misled by deluded elites with big megaphones. Economic democracy, to promote a better mix and fairer distribution of societal goods and necessary evils. And political democracy, so that our military isn’t led by murderous thugs into endless immoral engagements.

This philosophy is so different from the dominant consensus that it takes far more than two paragraphs to explain, let alone argue for. But who’s even trying? Instead, the audience is forced to read a shelf of Chomsky and reverse-engineer the principles behind it.

This is better than nothing—it worked for me—but it obviously puts a hard limit on who can be persuaded. People without the time or the ability end up as the folks you see in liberal blog comments: people who know something is badly wrong, but aren’t quite sure what it is or what to do about it.

In short, leftist intellectuals need to move from simply poking holes in the dominant consensus to clearly articulating their alternative and proposing a concrete method for promoting it (Chomsky, for all his brilliance, seems to espouse a theory of change that doesn’t go much beyond getting people at his book readings to join the local ISM chapter). I hope that more people will, because I sometimes fear that if they don’t, there may not be many leftist intellectuals anymore.

{ 108 comments }

1

Russ 08.04.09 at 11:36 am

I’m fascinated to hear of an overwhelmingly conservative humanities course. Is that typical of the department, or unique to certain courses such as the one you chose?

I am somewhat amused by the disagreement over the role of management in the workforce, but not entirely surprised that somebody who has never worked in a factory would have trouble understanding it. It is rather sadder, though, that your classmates couldn’t understand your viewpoint. Were you able to understand theirs?

If I might offer an analogy – it is very obvious to any observer that the quarterback on a football team and the wide receivers play different roles and both are indispensable. It does not, however, follow that the critical role of the receiver means that he should play quarterback or that either should be the coach. Teams work best when all of the necessary roles are filled by people who do them well – and doing extremely well in one role does not inherently make you qualified to fill another. The coach may never handle the ball; that does not mean that he is not essential to the team. In the same way, even though the manager never actually (ideally) turns on any of the machinery, his contribution to the success of his team can be greater than that of any of his workers.

2

alex 08.04.09 at 12:10 pm

And…?

3

Tomas 08.04.09 at 12:39 pm

The point of this piece is sort of … vague. Is this the whole post?

4

Henry 08.04.09 at 12:51 pm

No – it isn’t – the last several paras got chopped off. Now fixed.

5

Nick 08.04.09 at 1:48 pm

“The left has succeeded in making it sound hollow and unconvincing. Your average liberal blogger is happy to admit all the papers are full of lies, all the politicians are bland sellouts, and the government is run by lobbyists and corporate hacks. And (nothing new here) your average citizen is happy to agree (it takes a lot of education to be dumb enough to think otherwise). But where do you go from there? Elect Howard Dean?”

None of that was ever really news to classical liberals or the more intelligent conservatives though. The point is that despite these inadequacies, if you manage to keep a stable system of property rights going and try to enforce the rule of law, then in general people seem to be able to get along. And one can look at the systems that the left previously venerated and see how catastrophic (because they forgot those fundamentals) those systems turned out to be, to show that the onus is really on radical leftists to show that their criticisms are valid.

6

Henri Vieuxtemps 08.04.09 at 1:58 pm

I’ll even go further and take a stab at describing Chomsky’s solution: democracy.

He does talk about democracy. But the problem is that the meanings of many words (including “democracy”) have been modified beyond recognition, and you really have to go thru a shelf to get the idea. What is “democracy” to an ordinary person in the US? It’s going to your local school gym every two years to vote for some Democrats or Republicans.

7

Stephen Downes 08.04.09 at 2:17 pm

>The point is that despite these inadequacies, if you manage to keep a stable system of property rights going and try to enforce the rule of law, then in general people seem to be able to get along.

First, this (“keep a stable system of property rights going and try to enforce the rule of law”) is not an accurate description of conservatism. If we look at the actual policies followed by conservatives, everything ranging from trumped-up wars to torture and detention to the deregulation of banks and financial institutions, we see that conservatism is in practice far from this simple description.

Second, it requires a very skewed definition of “people in general.”

Not even mentioning the billions living in poverty around the world…

What about the 50 million without health insurance? The additional millions losing their homes? The other millions whose pension plans were wiped out?

Saying “in general people seem to get along” doesn’t place any sort of onus on the left, it requires a very selective vision that pushes the very real hardships faced by millions to “the edges”.

And third, it requires a misrepresentation of the left. Referring, obliquely, to “the systems that the left previously venerated” points us to (I suppose) Stalin’s Russia and Mao’s China, nations that very few people on the left ever venerated and which have not been venerated by anyone at all for at least fifty years.

This reference is about as relevant to the current debate as a reference to the right-wing Henry Ford’s well-documented veneration of, and support for, European fascism.

It is more illustrative to look at the systems the left currently venerates.

Canada, for example, with a health system that is the envy of the world, virtually non-existent poverty, and educational outcomes consistently rank in the top ten.

Or the Scandinavian countries, where the standard of living is unmatched, where health and education are universal, where there is peace and prosperity.

The onus falls on the left only if (a) we ignore what the right actually does, (b) we ignore the poverty and hardship that is prevalent in our world, not just an edge case, and (c) we misrepresent the left, even the version of it that existed 50 years ago.

Aaron’s statement places the onus squarely on the right to show what’s wrong with “Chomsky’s solution”. What, precisely, is wrong with democracy? “Media democracy, to prevent the population from being misled by deluded elites with big megaphones. Economic democracy, to promote a better mix and fairer distribution of societal goods and necessary evils. And political democracy, so that our military isn’t led by murderous thugs into endless immoral engagements.”

8

HR 08.04.09 at 2:36 pm

What about gender, do you think? I think activist women on the Left are marginalized as feminists rather than Leftists.

9

HR 08.04.09 at 2:38 pm

I wrote my short line above BEFORE reading the other comments, and noting that most of the voices on this subject tend to be male. Left feminism is as much about labor as it is reproductive rights (I guess pun unintended), but you wouldn’t really know it these days.

10

james 08.04.09 at 3:21 pm

The author has established political left as where he currently resides on the political spectrum. Based on the statements, there is a whole lot of political left to the authors right that is getting reclassified as middle and conservative.

11

Chris 08.04.09 at 3:26 pm

It is more illustrative to look at the systems the left currently venerates.

To which my response is “nothing, because the left is opposed on principle to veneration”. The examples you mention seem to be outperforming the competition at the present time and, therefore, may be worthy of imitation by nations who are currently doing worse. That doesn’t mean they couldn’t be improved further, or that they should not be scrutinized for flaws.

Different people have different definitions of “left”, of course. But mine includes a skeptical attitude towards hero worship, either of individuals or of societies. If someone’s idea of critical thinking is to substitute one idol for another, that person can’t be a leftist as I understand the term. IMO this is why the right so frequently fails to understand the left — not deferring to authority is a mode of thinking that is simply beyond their comprehension.

P.S. “People can survive under this system, except for the ones who don’t” is not a rousing endorsement of any political or economic system. Societies ought to be at least trying to do *better* than that, otherwise why do we form them in the first place?

12

b9n10t 08.04.09 at 3:36 pm

Question: perhaps the political genius of American capitalism is found in its ability to appropriate and claim as its own acheivement the 2oth C. technological revolutions that have produced such a rise in living standards?

Thus, a goal of socialists should be to (accurately) portray the technological developments in agriculture, medicine, information technology, etc… as social and scientific developments: phenomena that fail to fit into a Smithian supply & demand framework. We should not understand our prosperity, such as it is, to be held hostage to an elite and an ideology that supports this elite.

13

Vance Maverick 08.04.09 at 3:51 pm

Stanford, like many universities, maintains full employment for humanities professors by requiring new students to take their seminars.

The sneer here seems gratuitous, especially given the composition of the audience. Is your point that humanities professors don’t offer anything of value?

14

Billikin 08.04.09 at 3:52 pm

“But the left can’t seem to move beyond its reactive stance.”

That is not really new. Conservatives know what they are for, Liberals know what they are against. When the Left gains power, how often do they immediately start attacking each other? Differences that could be ignored when they united against a common enemy achieve new importance when they have to make and carry out policy.

15

ben 08.04.09 at 4:08 pm

Steven, the point is that if you meet those minimum requirements, then you can wage as many trumped-up wars as you like.

16

rootlesscosmo 08.04.09 at 4:21 pm

If the public generally agrees that “the papers are full of lies, all the politicians are bland sellouts, and the government is run by lobbyists and corporate hacks,” why hasn’t even a negative analysis from the Left won adherents? (Why do only 20,000 people read Z magazine, rather than 2 million?) Supposing a large section of the public should accept that the solution is “Media democracy… [e]conomic democracy… [a]nd political democracy,” how are they to turn these goals into a realizable program? (These are not “rhetorical” questions; I’d really like to hear some answers.)

17

Henri Vieuxtemps 08.04.09 at 4:34 pm

how are they to turn these goals into a realizable program?

Why, they are to get together and start participating and taking control.

18

The Raven 08.04.09 at 4:48 pm

“Conservatives know what they are for”

Nonsense. The recent eight years of conservative dominance have seen nothing but pointless aggression. If I’d seized the control of the levers of power in the world’s only hyperpower, I think I could have found better things to do with it than pick a fight with Europe and invade Iraq. I think, really, all but the craziest commentators here could.

19

Aaron Swartz 08.04.09 at 4:51 pm

#1: There were some leftists in the courses taught by the social anthropologists, but in general my sense was that they were pretty rare. (Recall that Condi Rice was Provost.) But I definitely think that the sessions that dealt most directly with political questions were stacked with conservatives.

#12: I’m not sure what part of that is a sneer. I think leftists would agree that full employment is a good thing.

#15: I think the act that the public agrees with that shows that a negative analysis from the left has won adherents. I think the reason 2 million people don’t read Z Magazine is that it’s just not that interesting to them. It’s not like more centrist outlets do any better; TNR‘s circulation is only 60,000. (2 million people do go to see Michael Moore movies, though.)

As for what people can do to make a realizable program, that’s what I’m working on now. It’s a bit too long to fit in this comment box, but the gist of it is that I think Paul Wellstone basically had it right. Some people need to investigate the things that have gone particularly wrong and think up changes that would improve them. Some people need to go out and knock on doors and organize people into groups that can take collective action. And some people need to win elected office so they have a paid staff that can mobilize the organized groups and attempt to implement the suggested improvements through the panoply of legislative maneuvers.

20

Warren Yoder 08.04.09 at 5:00 pm

I look forward to the book Aaron has promised in other contexts:
http://www.aaronsw.com/weblog/bookwriting1

21

Vance Maverick 08.04.09 at 5:15 pm

The bit about full employment suggests (1) that without those seminars, the professors in question wouldn’t have enough work, and (2) that the primary value of the seminars, to Stanford, is to employ the professors, rather than to accomplish some educational purpose.

22

Currence 08.04.09 at 6:21 pm

Feeling playful, so:

Vance, re: 12, 19.
Alternative reading of the sentence: it might not be accompanied by a sneer, but by a sigh.

“that without those seminars, the professors in question wouldn’t have enough work” is ambiguous between:
(a) The professors in question have nothing of value to do, so the University busies them with the seminars.
(b) The professors in question have tons of awesome, valuable things to do, say, write, and teach (by my lights)… unfortunately this value is not fully recognized by the University, its backers, the students, [insert relevant class]. Because of the [relevant class]’s ignorance of value, the only way to expose and distribute this value is by requiring the seminars.

In (a), “work” is something like “whatever the professors can find funding for, get paid to do, force students to attend and listen to, etc.” In (b), it’s something of value (by someone’s, presumably the author’s, lights), whether or not it is recognized as such by some class that is significant in other respects (funding, salary, attendance, etc.). Pearls before swine, yo. (a) has the profs, to some extent, ripping off the incurious students, the University administration, the trustees, etc. (b) has the profs, to some extent, delivering something of great value that could not be delivered were it not for the dreaded required seminar.

Contra (2), it might be the case that the primary value of the seminars is to provide an opportunity for students to learn some valuable things (things that they wouldn’t learn otherwise, that they wouldn’t on their own choose to learn, were it not for the requirement). The full employment is merely a happy consequence.

23

Uncle Kvetch 08.04.09 at 7:03 pm

Nonsense. The recent eight years of conservative dominance have seen nothing but pointless aggression.

Pointless? I think the good people at Halliburton and KBR would beg to differ.

24

Bruce 08.04.09 at 7:18 pm

Regarding the bit about full employment of humanities professors: the sneer (perhaps only snark) seems to be directed against Stanford students – I’m guessing the author believes them to be insufficiently curious or too vocationally focused to take humanities classes unless compelled. It’s unclear whether he thinks that Stanford views the seminars as make-work for the professors or an attempt to round out the education of the students.
The authors inability to effectively communicate with his seminar class (or to understand why other’s see sneers in his statements) is, like the inability of what he defines as “the left” to gain traction in a broader swath of the population, more a reflection on the speaker than the audience. Unless his seminar was unusually skewed, Stanford undergrads are to the left of the general population, even if they are to the right of Berkeley. I’ve seen nothing to indicate that Condi Rice’s tenure as provost in the ’90s changed the political composition of the student body.
The right has been masterful at manipulating people’s fear, while intellectuals on the left (including the mushy center-left) don’t seem to have even a basic understanding of these fears. The left does not have a message that resonates. Statements like “the domestic economy is structured to make the majority of the population expendable servants of the rich” will only cause people to tune out and vote Republican.

25

Salient 08.04.09 at 7:31 pm

Statements like “the domestic economy is structured to make the majority of the population expendable servants of the rich” will only cause people to tune out and vote Republican.

Would this be the “if you can’t say it in six words, don’t say it at all” philosophy of governance? Maybe the words “domestic” and “structured” are a bit eyeglaze-inducing, but so too is “vocationally focused.”

I mean, this must be some quirk of grammar bugging you: clearly people wouldn’t tune out in response to the content of the statement. How about: the way our economy is set up, the rich get richer and the rest get screwed. That says the same thing I think that, uh, resonates with people, if I’m allowed to use a word like “resonates” without people tuning out on me and voting Republican.

26

Bruce 08.04.09 at 9:53 pm

How about: the way our economy is set up, the rich get richer and the rest get screwed.

Ha! That will get you more attention – try all caps, then you’re at “talk radio” volume.
But no, that’s not what I meant. The problem is, people won’t believe you. Things would have to get MUCH worse before you’ll get anywhere with that. Most people do not feel that they are “getting screwed” on a regular basis. But what is the message that will rally support for policies to help the not insignificant number who are being screwed?
Take national health care: “everyone” will acknowledge at least some problems with the current system, but “most” people are doing just fine on any given day and few people trust any of the solutions being offered or the people offering them. The left needs to build credibility and trust; just because Bush et al. trashed the credibility of the right does not mean that the left is automatically trusted.

27

Patrick 08.04.09 at 10:13 pm

Actually, I’m guessing that most people in the United States will believe you if you say, “The rich get richer and the rest get screwed.”

What they won’t believe is what has to follow, “If we work together, we can do something about it.” Then they’ll hesitate at “We should.” And they’ll really begin to slow down when told, “There will be some risk involved.”

And they may stop dead at, “By the way, since there are billions of desperately poor people in the world, we’re probably going to have to give up some power, and perhaps some comfort, in order to save some lives.”

Doesn’t absolve any of us from trying to make it happen, though.

28

rosmar 08.04.09 at 11:05 pm

Excellent point, Patrick.

29

Salient 08.04.09 at 11:34 pm

The left needs to build credibility and trust

OK. How do you suggest the left ought to do this?

30

Salient 08.04.09 at 11:48 pm

And that’s a completely sincere question, Bruce. I think the deck’s rather stacked against us.

As you’ve essentially pointed out, conservatives can always point to the least advantaged groups, claim to everybody else “you’d be there too if it wasn’t for us” and reap the rewards. But this isn’t “masterful” in any meaningful sense. It takes neither mastery of rhetoric nor mastery of psychoanalysis to knowingly and manipulatively incite someone’s defensively selfish instinct. There’s a simple metric one may apply here: if Lou Dobbs can do it, it requires no mastery.

This is also why I never fail to be amazed and impressed when any progressive accomplishment occurs and entrenches itself. Medicare (to take one example) has enriched the lives of what now, fifty-two million people? How about labeling food with caloric and nutritive content?

Progressive ideas are popular after they’re entrenched. The hard part is clearing the barrier: people are (1) naturally afraid of potentially catastrophic change and (2) are easily inflamed to resist such change, especially when it can be characterized as taking resources away from them. That’s natural, human.

Reminds me of chemistry class, where it seemed every elementary problem revolved around activation energy. Get the right initial conditions established, and barroom.

31

nickhayw 08.05.09 at 1:36 am

What progressives need is a critically minded populace. From where I stand it seems like the vast majority of conservative voters support the things they do only because they’ve been tricked into thinking those things are in their interest.

Doubtless some progressives are led by a similarly unwavering, uncritical dogma (of idealism, change etc.). But the conservative political machine operates on a much more sophisticated you-be-the-driftwood inertia. It’s easier to make people think that things are alright than it is to make people think things could be better…conservatives can exploit that comfortable, political apathy. We can’t.

I’m really just echoing others’ points here, I suppose, but the problem for me is rejuvenating (genuine) political participation. Obama’s campaign took a step in the right direction (lots of door-knocking, community organizers, emphasis on new technologies, etc)

32

PTS 08.05.09 at 7:50 am

“Most of the other students had no particular interest in the topic—they were just meeting the requirement. But a significant minority did: like me, they cared passionately about it. They were the conservatives, armed with endless citations on how affirmative action was undermining American meritocracy. The only other political attitude I noticed was a moderate centrism, the view espoused by the teacher, whose day job was studying Just War Theory.”

Having been to plenty of “elite college” seminars myself, this story seems both Friedmanesque by being both suspiciously didactic and quite implausible.

33

Scar 08.05.09 at 7:51 am

Stanford’s definitely an odd school. If you take out the portion of the general American population that’s outright lunatic (denying evolution or global warming, wanting to deport all Mexicans, birthers, etc.), what you’d have remaining would probably be further to the left than the Stanford student body. You have a large number of people who are provincially pre-professional–engineers, pre-meds, wannabe consultants–who by and large come from a privileged background and are headed into a high earning field. At best you get a milquetoast liberal centrism that thinks Thomas Friedman is one of America’s great public intellectuals and reads the Economist because of how thoughtful and insightful it is.

Even progressive racial views and social liberalism have much less sway than you’d hope. My take is that about 30% of the students outright oppose gay marriage, 40% are genuinely committed to it, and the rest don’t care but tend toward not offending who they’re talking to.

So, wherever we look for a means to promote progressive change, the kids sitting in IHUM section are not going to be the leaders of that revolution. Which isn’t surprising, nor should it be.

34

Alex 08.05.09 at 8:25 am

Alexander Cockburn publishes not one, but a dozen articles each day at CounterPunch.org.

And you think this is a good thing for the Left?

If you take out the portion of the general American population that’s outright lunatic (denying evolution or global warming, wanting to deport all Mexicans, birthers, etc.), what you’d have remaining would probably be further to the left than the Stanford student body.

Indeed; it might well be surprisingly far to the left. It’s like the mean vs. median income error applied to opinion; the 20 per centers skew the distribution.

35

The Fool 08.05.09 at 2:14 pm

Cause something is happening here,
But you don’t know what it is…
Do you, Mr. Jones?

36

David Kane 08.05.09 at 4:18 pm

I hope that you cover this more in your book, but could you briefly expand on this sentence: “Economic democracy, to promote a better mix and fairer distribution of societal goods and necessary evils.”

Does this mostly mean higher taxes? If so, how high, on what types of income and so on? I think that many proponents of this view fail to grapple seriously with the complexities of this and with the many ways that rich people have of hiding, mostly legally, their wealth and income.

Or perhaps, by “economic democracy,” you mean guys like me buying guys like you lunch. If so, we are already there! ;-)

37

Henri Vieuxtemps 08.05.09 at 4:29 pm

35: I can’t speak for Aaron, but it could mean something like this for example:

Mitbestimmungsgesetz (in English, Codetermination Act) of 1976 is a German law which requires companies of over 2000 employees to have half the supervisory board of directors as representatives of workers.

38

geo (aka George Scialabba) 08.05.09 at 4:49 pm

many proponents of this view fail to grapple seriously with the complexities of this and with the many ways that rich people have of hiding, mostly legally, their wealth and income

There’s an easy solution to this: make David Cay Johnston, author of Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich–and Cheat Everybody Else and Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill), director of the Internal Revenue Service, with unlimited, dictatorial powers and complete freedom from Congressional interference.

39

Aaron Swartz 08.05.09 at 4:52 pm

David: Higher taxes is a means, whereas economic democracy is an end. Income redistribution (aided by taxes) would certainly be part of it, but I’d also favor systems to promote worker self-management and cooperative ownership and so on. That said, I will confess that the lunch you bought me persuaded me to be vehemently in favor of a financial transactions tax. (For the rest, Kane runs a high-speed trading hedge firm.)

40

Kaveh 08.05.09 at 7:55 pm

@11 To which my response is “nothing, because the left is opposed on principle to veneration”.

We should reconsider this principle. Veneration, reverence, and obedience are practices. They are not neutral to ideology, but they could be practiced in some way within any belief system. These practices are important for a political movement that wants to mobilize people to cooperate to achieve any kind of goal. You don’t get legislation passed by being critical. What we need is to build up social capital, to develop communities with traditions of practice that are attractive to people, so that people who may not even have strong ideological commitments could still participate and develop progressive political values–which are as much a matter of practice as of belief–through participating. If there is one thing that Criticism ought to have taught us, it’s that people do not straightforwardly adopt new ideas by evaluating them in terms of a belief system. Since the left has to some extent been outflanked by intellectually inferior ideologies that benefit from a lot of strongly committed adherents advancing them through non-argumentative means, it seems to me that the answer to the question of how to grow the left is also an issue of building social capital.

In other words, veneration and reverence are a kind of work that communities need to have done, somehow, by somebody, or they don’t cohere and function, they may be opposed to criticism but they can’t be replaced by criticism, they need to be reshaped and accommodated and put to work.

41

geo (aka George Scialabba) 08.05.09 at 8:38 pm

Very well said, Kaveh. Any practical suggestions? We all know what, when, where, how, and whom to criticize publicly. What, when, where, how, and whom should we venerate publicly?

42

David Kane 08.05.09 at 10:23 pm

Aaron,

Assuming that you are not jesting, I would like to push you on the actual details, either of a tax on financial transactions or any other particular policy. My main disagreement with my friends on the left is not so much over ends as over their (naive, in my view) belief that a stronger central government actually moves us closer to those ends.

1) You are in favor of a “financial transactions tax.” Good news! There already is one, or rather several. Every time you (or I) buy/sell a share on US exchanges, we pay a tax, which the SEC labels a fee.

2) You want that fee/tax to be higher. Fine! For the most part, financial professionals are not overly worried about such issues because, even in a world with higher taxes, all the institutions (endowments, pension funds, rich people) still want to grow their capital. Although we don’t like higher taxes, a significantly higher tax rate will not change much if anything. You think that hedge funds or private equity firms would disappear because you raise tax rates? Why would they? They still have lots of money. They still want to invest it.

3) What precise tax are you thinking of? The SEC fees are so small that no one much cares about them, so even (I think) non-profit institutions pay them. (Note: I am not a tax expert.) But once you make that transaction tax large enough, you need to decide whether the pension fund pays it as well. Does it?

4) Make the tax, in the US, large enough, and companies will start listing their shares elsewhere.

Again, my point is that most people who are in favor of “economic democracy” do not seem (to me) to have grappled very hard with the messy details of policy implementation. Whatever laws you might pass to “promote worker self-management and cooperative ownership” are laws that my very smart lawyers will use to my advantage, and the advantage of very other financial firm. Indeed, hedge funds are the very picture of “worker self-management and cooperative ownership.” Please, give us some incentives!

43

Kaveh 08.06.09 at 2:02 am

@41
Who/what/when/where how…

That’s something that needs a lot of consideration, I actually think the veneration of Obama (such as the frequent display of his portrait), annoying as it may be sometimes, is good cultural politics and good partisan politics too, but rather than venerating leaders, why not venerate people who make sacrifices? Whistle-blowers, for example, things that are not conventionally venerated (“our ideals”, “the American dream”). I think appealing to people’s willingness to make sacrifices is underrated.

These may not be great answers, but I think the problem *should* be what & who should we venerate, how…?

44

Salient 08.06.09 at 2:52 am

Whistle-blowers, for example

Except that’s just replacing being critics with venerating them.

More generally, “to develop communities with traditions of practice that are attractive to people” gorgeously comprises the task set before us, but it doesn’t seem obvious that such a task has much to do with veneration.

45

Matthias Wasser 08.06.09 at 3:36 am

Why should the first-world masses want to change the way the world works? They have it pretty good, compared to what an egalitarian system would bring them.

Of course it’s true that first-world workers have an economic interest in getting a bigger share of the pie than their capitalist compatriots. But it’s hardly as though they have nothing to lose but their chains. I think if unless you want to get into False Consciousness territory (who wants to do that? epicycles on epicycles) you should probably start with the premise that the social base of The Left With A Capital L isn’t in the main composed of legal residents of OECD countries, and certainly not of Stanford students.

46

Kaveh 08.06.09 at 5:04 am

@44 Except that’s just replacing being critics with venerating them.

I guess you could say it’s a kind of non-intellectual criticism. It’s not about speaking up to convince, I think whistleblowers generally expect they can call in an authority that can exercise coercive force. They often end up needing help from the larger community but I would imagine a lot of whistleblowing ends up being a pretty straightforward affair with superiors being reported to and actions being taken, and without a certain amount of this it would be difficult for large organizations to function. Whistleblowing likely entails a certain amount of reverence for and obedience to the law, and maybe empathy, but I think it’s more a matter of acting in an organizational context than criticism–journalists criticize.

I think it makes sense to venerate those who have made sacrifices. Conservatives (in particular) see it as patriotic to venerate veterans. Having other kinds of veterans whose service and sacrifices are also honored could be helpful. Cults of martyrdom can be powerful, I certainly wouldn’t want to try and create cults of martyrdom in the current American political context, but the basic principles they operate on, including guilt over the greater sacrifices that other people have made and that we benefit from, and the sort of participatory storytelling that is always involved, maybe there are ways to reconstruct this, which are useful in our political system.

I mean, look at the story of Neda–I would feel weird and uncomfortable posting her picture on my facebook page, invoking her name as a symbol. In Middle Eastern cultures, designating someone as a martyr is, I think, most often a way to come to terms with the senselessness of their death. Many Palestinian martyrs, for example, are people who were in no way involved in active resistance, often they are innocent victims of some military action that wasn’t directed at them. I don’t bother to get bothered by Iranian friends posting Neda’s picture. At the same time I think a part of the reason why there is such a well-developed practice of commemorating martyrs is that there has frequently been a need for people in the Middle East to mobilize without help from (or even against) the coercive force of the state. Commemoration of martyrs can serve to mobilize.

To be clear, I don’t recommend we go out and look for martyrs, but I think we could stand to venerate those who make sacrifices, if they have done so in a way that is exemplary.

47

Henri Vieuxtemps 08.06.09 at 8:05 am

@45, Why should the first-world masses want to change the way the world works?

I agree in principle, but what about the first-world underclass? The system can’t function without a large underclass. In the US they have to keep 2+ million people in prisons, and that still leaves a helluva lot of people (tens of millions) who probably do want to change the way the world works. Also, a lot of them (especially in Europe, but in the US as well) are closely associated with the third-world masses.

48

Aaron Swartz 08.06.09 at 11:16 am

Kane seems to suggest that it’s impossible to do anything about inequality, since clever wealthy people will always find a way to evade the laws. I’m not sure how he squares this with the fact that inequality is lower in other countries or that inequality used to be much lower in the US. Did rich people get much cleverer since the New Deal? Are there no clever rich people in Denmark?

49

David Kane 08.06.09 at 1:25 pm

Aaron,

1) Feel free to call me Dave, just like you did at lunch.

2) I did not claim that “it’s impossible to do anything about inequality.” I am just pointing out that it is very, very hard and that most of the plans that my friends on the left have come up with are likely to fail. As an example of a policy that would do a great deal for reducing inequality, I would propose an end to illegal immigration in the US. One of the reasons that the fellow who cleared our dishes from lunch is paid so poorly relative to you and me is because there are so many more people in the US competing for his job. Decrease that competition and you will increase his wages. But, most of my friends on the left (and my libertarian friends) want more immigration, not less.

3) Perhaps I can make my point clear by quoting you with some minor word replacement.

Kane seems to suggest that it’s impossible to do anything about anonymous publishing, since clever wealthy people will always find a way to evade the laws. I’m not sure how he squares this with the fact that anonymous publishing is lower in other countries or that anonymous publishing used to be much lower in the US. Did rich people get much cleverer since the New Deal? Are there no clever rich people in Denmark?

There are all sorts of technical/cultural reasons why thing X — whether it be inequality or anonymous publishing or illegal file sharing or whatever — might be higher now than in the past or higher in the US than elsewhere. Just because this is true does not mean that there is a government policy that could conceivably change it. To make that case, you need to propose a specific policy. What law does Denmark have that the US does not have that you think would have a meaningful impact on inequality in the US? I can’t think of one. What law did the US have 50 years ago that it does not have now that would matter?

4) Can’t you see that this sentiment — “since clever wealthy people will always find a way to evade the laws” — is very naive? It isn’t that clever wealthy people will need to “evade” the laws, they make the laws. Again, to have a productive discussion, you need to suggest a law that might do something and that would not be weakened by all the other laws/institutions we have. (Or you need a master plan to get rid of those laws/institutions as well.)

Start by considering tax-exempt municipal bonds. Even if you could pass a dramatic increase in income taxes, the wealthy would simply shift their money to tax-exempt bonds. Taking these sorts of dynamics seriously is required if any discussion of “economic democracy” is going to be more than a pipe dream.

50

Henri Vieuxtemps 08.06.09 at 1:50 pm

What law did the US have 50 years ago that it does not have now that would matter?

Since you seem to be interested in tax policies primarily (or taxes/fees on financial transactions only?) – what about 91% top income tax bracket?

51

Salient 08.06.09 at 2:01 pm

Since you seem to be interested in tax policies primarily (or taxes/fees on financial transactions only?) – what about 91% top income tax bracket?

Heck, even if someone is interested in everything but tax policies, it seems unassailable that restoring New Deal-esque tax brackets would reduce inequality.

If a few heavily-funded groups can pull together hundreds of people to go storm in on town hall meetings reliably in order to protest government involvement in health care, I should think we can pull together equal numbers of people to go storm in on town hall meetings to demand New Deal Taxes.

Again, to have a productive discussion, you need to suggest a law that might do something and that would not be weakened by all the other laws/institutions we have.

This is… an absurdly high barrier, depending on what you mean by weakened. May I suggest you amend this to: Again, to have a productive discussion, you need to suggest a law that might do something despite being weakened by all the other laws/institutions we have.

52

geo 08.06.09 at 2:04 pm

Taking these sorts of dynamics seriously is required if any discussion of “economic democracy” is going to be more than a pipe dream.

Agreed. What the left needs is advice (and lavish funding) from public-spirited hedge-fund managers.

Over to you, David …

53

Salient 08.06.09 at 2:27 pm

Oh, and:

Even if you could pass a dramatic increase in income taxes, the wealthy would simply shift their money to tax-exempt bonds.

Thereby reducing interest rates on those bonds, and thus providing municipal government with access to more affordable money for projects etc. Am I understanding what would happen incorrectly, or is this particular outcome a bad thing?

54

matthias wasser 08.06.09 at 3:01 pm

As an example of a policy that would do a great deal for reducing inequality, I would propose an end to illegal immigration in the US. One of the reasons that the fellow who cleared our dishes from lunch is paid so poorly relative to you and me is because there are so many more people in the US competing for his job. Decrease that competition and you will increase his wages. But, most of my friends on the left (and my libertarian friends) want more immigration, not less.

But that’s just a ridiculous accounting trick; it does nothing to increase substantive equality and quite a lot to reduce it. It’s like saying you want to transfer all the economists from Social Science to the B-schools because it would increase average professorial quality in both.

55

David Kane 08.06.09 at 3:09 pm

Geo: I don’t know about “lavish,” but I did pay for Aaron’s lunch. ;-)

Salient: Whether or not increased purchases by rich people of municipal bonds and the accompanying lower interest rates on those bonds would be a good thing is not the main point. The issue is how much can (politically) plausible changes in the tax code actually decrease in equality? My answer: Not much. But the only way to have that discussion is to dive into the details. And, side note, Will Wilkinson’s essay on economic inequality is relevant to this discussion. Also, I am happy to use your “despite being weakened” phrasing.

Henri: If the 91% income tax bracket actually caused rich people to pay, you know, 91% of their income in taxes, you might have a point. But, of course, it didn’t. Although I don’t know this literature well, I think that the standard story is that the percentage of their income paid by rich people has been remarkably constant over time. The increase in inequality has been driven by their dramatic increase in income.

56

Aaron Swartz 08.06.09 at 3:20 pm

The others have said most of what I was going to say. I’d also recommend reading Lane Kenworthy’s series right here on Crooked Timber for a good introduction on policies that can reduce inequality. (His summary: “raising and indexing the minimum wage, enhancing the Earned Income Tax Credit, and expanding and improving public services” paid for by increased taxes on the rich, ending the homeownership subsidy, a financial transactions tax, and a progressive consumption tax.)

It’s true that the wealthy can undermine many policies, but never 100% — in fact, I’d guess it’s usually less than 50%. (This is assuming the law gets passed which, as David notes, is very hard.) And once a law is passed it changes the balance of power for next time. Despite nearly a century of attempts to overturn New Deal legislation, for example, it’s largely still standing.

But here’s a question for you, David? What’s the alternative? You say you don’t disagree much on the ends — so do you have a better way to achieve them? I’d love to go about this the easy way; I just don’t see one. So I’m left doing it the hard way.

57

Picador 08.06.09 at 3:58 pm

David:

The issue is how much can (politically) plausible changes in the tax code actually decrease in equality?

This strikes me as begging the question. Meaningful political change is never “plausible” until it happens.

58

Chris 08.06.09 at 4:06 pm

Kaveh: I think you mean something very different by “veneration” than I do. What you are recommending I would call acclamation, perhaps, or public respect. Those things are important, but they don’t have the same kind of uncritical acceptance that veneration (in the sense that I mean it) does.

For example, we should respect veterans, but being a veteran does not necessarily make one always right even about military policy, let alone about education or health care or taxes; therefore, *venerating* veterans would be unwise.

Similarly whistleblowers: if someone steps forward as a whistleblower we should first examine their evidence. Then, if it turns out to be right, we should recognize and honor their contribution to society and the rule of law. But even then, we should still look at the evidence for the *next* thing they say.

Even the law shouldn’t be venerated, in my opinion: only by considering that the law might be mistaken can we decide whether or not it would be wise to change it. (And that is a responsibility that a sovereign people must not abdicate.)

#49: Start by considering tax-exempt municipal bonds. Even if you could pass a dramatic increase in income taxes, the wealthy would simply shift their money to tax-exempt bonds.

They couldn’t *all* shift *all* of it there, because there aren’t enough issued. Any large movement in that direction would trash the yield, which would not only make it more beneficial to invest in something higher yield and just pay the damn taxes because the post-tax profit is still higher than the yield on munis, so that the trend would be self-controlling, but also make it cheaper for municipalities to invest in things, which is a positive side effect in its own right. (It would, of course, also raise the cost of taxable capital, which is an effect that would need to be weighed against the benefits of whatever would be done with the tax revenue and/or decreased cost of capital to municipalities empowered to issue tax-free bonds.)

In fact, isn’t the fact that the tax incentive artificially depresses the yield on tax-free municipal bonds one of the main reasons for having them at all? If they’re a tax shelter with no societal benefit you might as well just close the loophole.

Another possibility: what if the capital gains tax were progressive (based on the amount of capital gains realized in a given period, or even lifetime)? If small investors collectively represent a sufficient fraction of the overall investment pool and the tax hike targets only the true rentier class, then overall capital movement would be slight – rentiers would move into munis and depress their yield, but then little guys would flow in the opposite direction and cancel them out.

59

David Kane 08.06.09 at 7:02 pm

Aaron,

Lane is a smart guy, but his posts/discussion are evidence for my argument: it is very, very hard to meaningfully impact the amount of economic inequality in the US. Now, if tiny, almost imperceptible changes are all that you are interested in, then fine, agitate for the end of “the homeownership subsidy.” I agree! But those changes are not what most people (or just me?) read the phrase “economic democracy” to mean. If you are interested, I am happy to go through a point-by-point on those ideas, or maybe we should save that for our next lunch?

In the meantime, let me give an honest answer to your question about alternatives.

1) Learn to live with it. Although it might be nicer to live in a world in which, say, professional basketball players are paid millions per year, there is no easy way to move from this world to that, without unacceptable infringements on human freedom. There is nothing wrong, of course, with tinkering around the margins but don’t expect to change anything in any meaningful way.

2) Focus on social equality rather than economic equality. The great engine for social equality in the US, at least before the Vietnam War, was the draft. For most purposes, it did not matter how rich you were, who you parents were or where you went to school: even Stanford! You served. You lived cheek-by-jowl with a fairly broad cross section of American society. You lived equally. Now, being a Friedmanite, I am against the draft, but that is an institution which achieved many of the goals of the sort of people who talk about “economic democracy” seem to favor.

3) Dramatically increase the use of vouchers. Now, some of my friends on the right oversell the good that vouchers might do. But, from a social equality point of view, they are the best way of putting people on an equal footing. Needless to say, this will be a long battle. Most of your Stanford classmates will be sending their children to schools with very few poor kids. They may not think that giving vouchers to poor families that can be used at their schools is such a great idea. The same difficulty applies to health care. (Medicaid patients see a very different cross-section of doctors than non-Medicaid patients.)

Imagine a world in which everyone received a medical care voucher that allowed purchase of health insurance, funded at a high enough level that every health care company accepted the voucher. Imagine the same for education vouchers. Those two changes alone would do more for inequality, at least social inequality, than endless fiddling with “public services.”

4) Dramatically decrease immigration (at least, of unskilled workers). Now, obviously, this brings economic democracy to US citizens while simultaneously hurting would-be immigrants, but if we take a “citizenist” view of matters, there is no better way to raise the living standards of dish washers than to prevent other dish washers from coming to the US.

And that is just off the top of my head! Your friends on the right often have similar goals. We just don’t think that increasing the head count of the Federal Government or the complexity of the tax code is likely to achieve them.

60

Salient 08.06.09 at 7:48 pm

Whether or not increased purchases by rich people of municipal bonds and the accompanying lower interest rates on those bonds would be a good thing is not the main point. The issue is how much can (politically) plausible changes in the tax code actually decrease in equality?

But… but… [blinking]. No, I think the point is, how many people are subject to untenable suffering due to want for material goods? And how can we minimize that?

Well, that’s “the point” from my perspective anyhow, the main goal. That’s entirely why I’m in the game. Insofar as we’re discussing accomplishing something orthogonal to this main goal, well, guess I’ll take my ball and go home.

Certainly, a reduction in inequality (usually) serves “the point” pretty well. A high level of inequality capacitates exploitation and is thus destructive. However, reducing inequality is not “the point” we’re after. I would not advocate for, say, destroying the property of the wealthy so as to reduce inequality. Few would.

And I doubt that people will bail from earning more money Galt-style just because a portion of that is returned to the community via taxes. At the level of tens of millions, money is just a play number: people will indeed earn money which is taxed at 91%, because the other 9% contributes to their play number. If they choose to instead invest in the public good via municipal bonds, well, the whole reason those bonds are tax-free is because we want people investing in them. :-) It’s for the public good, right? Reducing material suffering?

And really, if too many people invest too much money in them, we can always eliminate the tax-free status of these bonds after a few years.

61

Salient 08.06.09 at 7:52 pm

Imagine a world in which everyone received a medical care voucher that allowed purchase of health insurance, funded at a high enough level that every health care company accepted the voucher. Imagine the same for education vouchers.

We implement these vouchers, you agree to strict and comprehensive cost-control regulation so that providers can’t rent-seek. Deal?

(Indeed, though I think “funded at a high enough level” would be rather infeasible, this proposal amounts to the kind of system I could support with satisfaction rather than resignation.)

62

SamChevre 08.06.09 at 8:08 pm

Heck, even if someone is interested in everything but tax policies, it seems unassailable that restoring New Deal-esque tax brackets would reduce inequality.

I’m not so sure about that.

It would reduce current-period income inequality.

But it would also increase the long-term persistence of wealth inequality.

New Deal tax rates are a large part of the reason that people who were the super-wealthy in 1940 mostly still were the super-wealthy in 1980. It’s not entirely unfair to call the New Deal tax rates the Rockefeller and Kennedy protection acts.

63

Aaron Swartz 08.06.09 at 8:11 pm

Lane advocates universal “high-quality child care followed by good public schooling and affordable access to a good college … good health care throughout life … clean and efficient public transportation … four weeks of paid vacation each year, an additional week or so of paid sickness leave, and a year of paid family leave to care for a child or other needy relative.” He shows that such policies take 15 points off the Swedish Gini coefficient. (That would immediately bring us down from .45 (#94) to .30 (#21), compared to Sweden’s .23 (#1).) Do you really consider those “tiny, almost imperceptible changes”? If so, it’s hard to see what difference vouchers would make.

These things are clearly not impossible; they’re also clearly not enough. But they’re good first steps; once we get there I can suggest more.

The left’s goal isn’t “increasing the head count of the Federal Government or the complexity of the tax code” — leftists are strong proponents of simplifying tax reforms (in part because it cuts down on loopholes). I want to promote economic democracy in part because I want a more decentralized economy, where lots of people are free to start new businesses and pursue new ideas, instead of just a handful of authoritarian giant corporations. Let’s work on decreasing the head count of them.

64

Aaron Swartz 08.06.09 at 8:14 pm

Sam: Huh? What’s that based on? I think this chart (from Piketty and Saez) pretty much puts the lie to that.

65

Jeff R. 08.06.09 at 8:21 pm

Taxing income at all means taxing upward economic mobility, which means you get less of it, both the the obvious money-sent-to-the-government-can’t-make-you-richer sense and in the broader incentives-based sense, so the more you tax incomes the less equal things are going to get.

The better approach is to leave incomes alone and instead tax wealth and consumption (adjusting the ratio of these areas to incentivize your desired level of personal savings.)

66

Salient 08.06.09 at 8:23 pm

New Deal tax rates are a large part of the reason that people who were the super-wealthy in 1940 mostly still were the super-wealthy in 1980.

The veracity of this claim aside, do you really imagine I’m against a robust estate tax?

67

Salient 08.06.09 at 8:28 pm

Jeff, that first paragraph makes no sense.

money-sent-to-the-government-can’t-make-you-richer

It… depends what you mean by “richer.” A moderate income can’t buy you a well-maintained road. For that matter, it can’t even buy you reasonable health and dental care (if you pay a la carte).

But yes, income taxes are imperfect proxies for wealth taxes, and it does indeed make a lot of sense to tax wealth progressively.

68

SamChevre 08.06.09 at 8:44 pm

No, Aaron, that chart shows income shares.

I’m talking about wealth shares: it’s a largely separate question.

And Salient, you got my point at least partway. One of my major answers would be to have an inheritance tax (rather than an estate tax). That gets around the issue of trust formation. (An estate tax won’t do anything about income from already-formed family trusts; a gift/inheritance tax will.)

69

Salient 08.06.09 at 8:57 pm

One of my major answers would be to have an inheritance tax (rather than an estate tax).

I don’t know enough about how estates are gifted or entrusted to evaluate this — I was not aware that there is a difference between an estate tax and a gift/inheritance tax. From my superficial standpoint, your proposal sounds much more reasonable than the system we currently have. (This is assuming we are converging on agreeing to a gift/inheritance tax somewhere vaguely in the 90-95% range, not the 10-20% range.)

70

Billikin 08.06.09 at 8:59 pm

David Kane: “Lane is a smart guy, but his posts/discussion are evidence for my argument: it is very, very hard to meaningfully impact the amount of economic inequality in the US.”

What time period are we talking about? It took more than a generation for the current inequality to arise. To reduce it substantially in a few years’ time would probably mean social or economic upheaval. But maybe not. What if we had a jubilee? How bad would that be?

I am not sure what “economic democracy” means, but I do think that the level of socio-economic stratification that we have now in the U. S. is dangerous to real democracy. Arguably we have a plutocracy already, which is democratic in form only.

As for taxation, one form that seem both simple and fair is wealth tax. It is equally painful on everyone. Taxation is largely beyond my ken, so I cannot add much to a discussion, but I would be interested in people’s thoughts about a wealth tax.

71

Billikin 08.06.09 at 9:01 pm

Oh, I see that people have already been talking about a wealth tax. :)

72

Salient 08.06.09 at 9:09 pm

So yes, let’s provide vouchers for health insurance and education at accredited institutions of higher learning, establish cost controls that prevent service provider exploitation of those vouchers, and pay for it with a massive whomping gift/inheritance tax and perhaps a not-nearly-so-whomping progressive income tax. Doesn’t solve all the problems of the world, but hey. I am sold.

73

Chris 08.06.09 at 9:29 pm

it is very, very hard to meaningfully impact the amount of economic inequality in the US.

The Great Compression and its reversal: sheer coincidence?

Although it might be nicer to live in a world in which, say, professional basketball players are paid millions per year, there is no easy way to move from this world to that, without unacceptable infringements on human freedom.

That depends greatly on which infringements you consider acceptable. Higher marginal tax rates are only one of many tools – in particular, corporate governance in the US could use a large overhaul. Use of shareholder funds to lobby or donate to political campaigns should be considered a per se breach of fiduciary duty by the executives who approve it; that would be a nice start. (Do they expect a return on that investment, or not? If so, it’s a bribe; if not, it’s a waste.) When corporate managers have to start using their *own* money for political contributions and lobbying, instead of company money, a lot of other battles become easier to fight.

For most purposes, it did not matter how rich you were, who you parents were or where you went to school: even Stanford! You served.

I don’t think this is actually true. Some people got into, say, the Texas Air National Guard and remained exempt from the draft even while AWOL from their unit. I think anyone who could afford to go to college at all was exempt for the duration of their student status – which could be pretty long if you can afford to also pursue graduate degrees.

But a lot of liberals are against the draft for many of the same reasons you are, so it’s kind of beside the point.

Dramatically increase the use of vouchers. Now, some of my friends on the right oversell the good that vouchers might do. But, from a social equality point of view, they are the best way of putting people on an equal footing.

And undersell the harm – in the South, which is the main place they have political currency, vouchers are essentially a plan to funnel state funds to religious schools that teach doctrine rather than a secular curriculum. (And I bet nobody will ask too many embarrassing questions about how racially integrated they are, too.)

Even aside from that, though, I can’t really see the rich sending their children to “voucher plus zero” schools even if there are a wide variety of them, so your social leveling doesn’t happen. You might as well just reform the existing school system so that the resources available to a school don’t depend on the economic class of the neighborhood it serves.

(For the health care suggestion, we may be headed in that direction already – but that would *be* a public service, even if it’s mediated through private insurers and doctors.)

Dramatically decrease immigration (at least, of unskilled workers).

Doing that without “unacceptable infringements on human freedom” is left as an exercise for the reader. (Hell, we unacceptably infringe on human freedom *now* in the pursuit of immigration prevention and we still don’t stop the amount we don’t stop. And that’s not even counting the school of thought that restriction of immigration is *in itself* an unacceptable infringement on human freedom.)

there is no better way to raise the living standards of dish washers than to prevent other dish washers from coming to the US

* Raise the minimum wage. (What, are all the restaurants going to switch to paper plates? The demand for dishwashers is pretty inelastic, until restaurants as an industry start going out of business altogether. This solution in particular makes it irrelevant how large the pool of potential dishwashers is – at least, as long as the minimum wage laws are enforced.)

* Train them to be something more economically valuable than dishwashers. This one is so obvious I don’t see how you could have missed it (although, because of the inelastic demand, someone else will have to come in and wash dishes; but supply and demand will pull the wages up even without direct government action. In addition, if dishwasher is a “part-time job while working through college/vocational school” job rather than a permanent one, low wages for the time you hold that particular job will have less impact on lifetime earnings than if people are stuck in it.)

* Permit more union organization, and allow the dishwashers’ union to negotiate for improvements in their wages. This is a well-known, widely used and successful method that right-wing administrations go to great lengths to prevent.

* Provide more and better free/subsidized services. This means that an individual’s standard of living is not wholly defined by that individual’s income. Better public transportation, for example, allows more individuals to avoid the costs of car ownership while still holding the same job.

* Stronger enforcement of unfair and deceptive business practice legislation; some businesses basically have “gouge the unsophisticated” for a business model. (Payday lending comes to mind.) In some cases the whole industry could be replaced by a public service/utility. (If the government is the liquidity provider of last resort for banks, why can’t it also be the liquidity provider of last resort for people?)

* Revive the WPA to take up the slack in the labor market (this ripples through to affect all labor, but most strongly low-skilled segments like dishwashers). There’s a lot of neglected or inadequate public works that we *could* be working on, if we bothered to.

And that’s just off the top of my head.

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Salient 08.06.09 at 9:39 pm

Doing that without “unacceptable infringements on human freedom” is left as an exercise for the reader.

Not to mention, why are we only supposed to care about the suffering of human beings who happen to have citizenship in our state? Prohibiting immigration and then allowing tariff-free imports is the easiest way I can think of to encourage a mass exodus of manufacturing and industry to countries where the workers who would have immigrated here can instead… be maltreated and paid less!

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SamChevre 08.06.09 at 9:42 pm

This is assuming we are converging on agreeing to a gift/inheritance tax somewhere vaguely in the 90-95% range, not the 10-20% range.

That’s not the usual structure. Usual structure is that after some amount of deduction, gifts/inheritances are taxed as income–at whatever the income tax rate is. And I’d be in favor of more brackets to income tax–but I’m not in favor of a very-high tax on all gifts no matter how small the recipient’s income is.

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Salient 08.06.09 at 9:42 pm

But this is too easy. Fish, barrel. Let’s get back to the “how are we going to accumulate social capital” question. Specifically, how do we get busload squads of citizens crashing town hall meetings nationwide in order to demand… a gift-inheritance tax?

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Salient 08.06.09 at 9:46 pm

Usual structure is that after some amount of deduction, gifts/inheritances are taxed as income

I thought we were punting the income tax. But certainly, agreed, a progressive graduated % that starts at 0% for gifts worth less than the current poverty level and tops out around 90% for gifts worth millions would be much better than a flat tax. Sorry, I was assuming progressive graduation up to 90% without consciously recognizing my own assumption, much less stating it explicitly.

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Jeff R. 08.06.09 at 10:06 pm

Salient@67

Okay, but everyone else gets that road, too. So the money you’re not accumulating because it’s been taxed away isn’t doing anything to bring your relative wealth upwards and thus reduce inequality.

Another possibility is to tax income, but make the rate progressive based on wealth rather than income itself. The rate can be made flat up to what we think is the optimum savings level based on age…

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Salient 08.06.09 at 10:16 pm

Okay, but everyone else gets that road, too. So the money you’re not accumulating because it’s been taxed away isn’t doing anything to bring your relative wealth upwards and thus reduce inequality.

(Shrug.) The progressive taxes which paid for the road reduced inequality, one hopes. The reduction in inequality comes from the high end, not low end.

Another possibility is to tax income, but make the rate progressive based on wealth rather than income itself. The rate can be made flat up to what we think is the optimum savings level based on age…

Eh, neat idea, but it seems less useful than just taxing wealth.

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Aaron Swartz 08.06.09 at 10:27 pm

Salient: “how do we get busload squads of citizens crashing town hall meetings nationwide in order to demand… a gift-inheritance tax?”

Well, for the writers in the audience, I imagine a nice exposé about the lives of the rich and famous might help kick things off.

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David Kane 08.07.09 at 1:02 am

Aaron: There is little wrong with the goals that you correctly ascribe to Lane. But surely you know that people like Lane have been advocating for “good public schooling” for 20 years, if not 40. How many people like Lane send their children to public schools (non-magnets) in places like Washington DC, Boston or New York City? How many Stanford graduates do so? Round numbers: Zero.

Now, if evil far-right Republican executives and legislatures had been running those cities/states for the last few decades, you/Lane might just argue that all we need is to elect Democrats. Or if those cities spent less per student than rural schools you might argue for better funding. But neither concern is true. If Democrats spending lots of money can’t produce “good public schooling” in cities that they have controlled for decades, then isn’t it clear that just wanting these things is not enough. Indeed, isn’t just wanting them the same as wishing that the streets were paved with chocolate: a nice sentiment with no clear description of how it might come about.

Again, our debate is not so much over goals — I wish that poor kids in Boston received an education as good as my children do — it is over the best way to achieve those goals, given the realities of the world we live in. Anyway, I am comfortable with vouchers for things like health, education and so on.

But then you lose me with talk like “four weeks of paid vacation each year, an additional week or so of paid sickness leave, and a year of paid family leave to care for a child or other needy relative.” You really want the government to tell me that I need to offer 4 weeks (not three weeks, not two weeks with higher pay, not two weeks with lots of free time during the day). I hate it when the government tells me what to do.

And don’t you as well. I, obviously, don’t know your politics very well, but I would have assumed that government infringement of the sorts of freedoms that you value would drive you nuts. Am I missing something?

Moreover, there is a direct contradiction between your desire for a society with “lots of people are free to start new businesses and pursue new ideas” and these sorts of regulations. Do you have any idea how hard it is to start a business in Massachusetts and comply with all the regulations we already have? I do. The more you require businesses to carry out your preferred social policies, the less people will be “free to start new businesses.” You can have one or the other, but not both.

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Salient 08.07.09 at 1:31 am

You really want the government to tell me that I need to offer 4 weeks (not three weeks, not two weeks with higher pay, not two weeks with lots of free time during the day).

Quit being disingenuous. It’s distasteful. You know as well as I do that “4 weeks mandatory vacation” means “you have a legal right to take 4 weeks’ vacation and your employer can’t fire you for doing it.” Work away, if you prefer.

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e julius drivingstorm 08.07.09 at 1:40 am

So, if taxation is the answer to reduce inequality, the implementation through income, wealth, estate, etc., to be progressive in each category, the biggest obstacle is still convincing the wealthy and the better off that they deserve to pay more. Of course they can use their wealth to hire hacks to blow holes in all your arguments.

Anyway, for starters. The wealthy should pay progressively more for national defense because they have more to defend. I’m sure they do, but they should pay still more because most likely our enemies around the world are more pissed off at our wealthy than they are at our rabble.

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David Kane 08.07.09 at 1:48 am

Salient: Perhaps my writing was unclear. I run a business. I don’t want the government telling me exactly what bargains I can strike with my employees. If I want to offer 4 weeks or 2 weeks or 6 weeks, then that is my business. If the jobs/benefits I provide are desirable, I will be able to hire people. If they aren’t, I won’t.

The larger point is Aaron’s title: “Toward a Larger Left.” I am, obviously, not of the left, but I could be convinced to support certain policies (like very generous vouchers). I (and almost everyone else I know on the right) hates it any time the government tries to micro-manage employment agreements.

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geo 08.07.09 at 2:00 am

David:

Your basic point seems to be: in the absence of a wide and deep social consensus in favor of the goals posited here — greater economic equality, tax fairness, stricter environmental protection, more equal educational opportunity, etc. — ingenious and energetic people will always find ways to evade whatever laws, policies, and regulations seek to enforce those goals.

Granted. But suppose there was such a consensus, and the problem was not to enforce humane policies on a lot of people who didn’t share the goals of those policies, but rather just to prevent free riding by a small minority of cheaters? Wouldn’t that remove the difficulty in principle, and shift the left’s strategic emphasis toward creating a moral consensus and away from devising super-clever, lawyer-proof policies ?

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Salient 08.07.09 at 2:48 am

If the jobs/benefits I provide are desirable, I will be able to hire people. If they aren’t, I won’t.

I’d like to invest the time and energy necessary to convince you the second sentence there is crazy, but I don’t think it would be worthwhile for either of us. People will put up with a lot of undesirable injustice in order to feed their kids.

If I want to offer 4 weeks or 2 weeks or 6 weeks, then that is my business.

And extending this to absurdity, I suppose if you want to require them to be available to work 24 hours a day 7 days a week and pay them in scrip and dictate who their children will or will not marry, that’s your business. Sorry, I don’t buy this. You do not have the inherent right to run your business any way you want. In fact, I would assert a business owner does not have any inherent right to run their business, full stop, any more than I have an inherent right to drive my car. Our society lets business owners own and run their businesses because currently it’s either (a) a net benefit for society for them to do so or (b) even if there’s a case where (a) does not hold, there’s no reasonable means for taking that owner’s business away from her/him in accordance with the rule of law, herein lies a conflict of principles, etc.

You may hate it any time the government tries to micro-manage employment agreements, but in order for those agreements to have any meaning in the eyes of the state, they must at least be acknowledged as legitimate by the state (which is unfortunately the best proxy for community authority we have). And no, you don’t have the inherent right to hold people to contracts that are not acknowledged as legitimate by the state. If the state demands you give a minimum of four weeks vacation, or if the state demands you pay overtime wages for work weeks longer than forty hours, you do it or you pay punitive fines.

This is what a state is useful for: to enforce fairness on (among other persons) business owners who would otherwise exploit the desperation of their employees.

Now, let me end by saying I don’t feel giving 2 weeks vacation is “exploiting” people. Frankly, I’m worried exclusively about suffering people incur for material want; insufficient vacation isn’t on my list of concerns. My point is, one of the reasons you have any choice as to whether you provide 2 weeks vacation or none or 10 weeks or whatever is because the state doesn’t consider the amount of vacation provided an issue of social justice worth adjudicating with legislation/regulation. If social values change, and it does become such an issue, you may well have to provide the vacation. It’s not some God-given right to dictate the terms of your employees’ employment; it’s a right implicitly granted by the state (or by the community), always subject to revocation or revision as the need arises.

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Tim B 08.07.09 at 2:51 am

I don’t want the government telling me exactly what bargains I can strike with my employees.

Yes, but often your employees do want the government telling you that, because they don’t really have equal bargaining power with you.

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b9n10nt 08.07.09 at 2:53 am

David Kane:

“If I want to offer 4 weeks or 2 weeks or 6 weeks, then that is my business. If the jobs/benefits I provide are desirable, I will be able to hire people. If they aren’t, I won’t.”

It’s your business in an anarchic bartering society: maybe in Somalia. Anywhere else, “your business” is a conceit of the state: the legal, financial, material, and educational infrastructure that allows “your business” to exist is not your own doing. Relatedly, labor markets fail (by a humane standard, that is), which is why minimum wages, child labor laws, workplace safety laws, etc… had to be imposed on the market. The argument that oppressive labor conditions are checked by the invisible hand of labor markets is as false now as it was in past.

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Alex 08.07.09 at 9:13 am

The prospect of being employed by David Kane is the best argument I’ve heard in a long time for a basic income.

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Salient 08.07.09 at 12:36 pm

Blast you, b9n10nt, said it better than I did. :-)

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David Kane 08.07.09 at 1:03 pm

Aaron wants

a more decentralized economy, where lots of people are free to start new businesses and pursue new ideas, instead of just a handful of authoritarian giant corporations.

Me too! Is that what the rest of you (Salient, Alex, b9n10nt, Tim B, et al) want?

If you don’t want it, no worries. Please explain to Aaron why this is a bad or irrelevant goal, why the left should focus on other things. That is a reasonable position.

But if, like Aaron, you do want lots of people “to start new businesses,” then you ought to listen to either a) the sorts of people (like me) who do, in fact, start new businesses or b) the sorts of people (like many of my buddies) who might start new businesses. The vast, vast majority of them will tell you that more government regulation means fewer new businesses.

Again, if you don’t care about new businesses, that is fine. By all means, write a law which forces me to offer at least 4 weeks of vacation, and 6 days of sick leave, and 20 minutes per day for personal errands, and free coffee and every other little thing your heart desires. Again, I am not requesting a return to the state of nature. I am making the empirical claim that, if (like Aaron) you want more new businesses than you would otherwise get, you need to reduce, not increase, the costs of business formation.

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Salient 08.07.09 at 1:42 pm

[highlights in my long response below bolded to make it easier for folks to skim my comment, style stolen from Glenn Greenwald]

Please explain to Aaron why this is a bad or irrelevant goal, why the left should focus on other things. That is a reasonable position.

Not bad or irrelevant, just subject to the prioritization of other goals. Certainly, I should explain that. Let me make a first/draft attempt.

I would first assert that neither “an environment in which new businesses may flourish” nor “a roughly equal distribution of resources” are at all interesting to me, except insofar as I see these characteristics as convenient and potentially suitable means to an end.

So, let’s begin by asking, what end? What is it we want and would be satisfied with? For me: A materially comfortable and physically secure life for all human beings of the world, established via secure means which are robust against and responsive to the ecological and social change that might endanger them. I am not a luck egalitarian and am fully comfortable with variable prospects for individuals for reasons outside their control. What I wish to achieve is milder and I’d like to think more concrete: a world in which (1) none of the suffering that human beings experience derives from material deprivation and (2) none of the suffering human beings experience derives from human aggression or exploitation. (I could be pressed to define “exploitation” very carefully.) In such a world I would undoubtedly be a conservative, working to preserve and reinforce these core characteristics.

In this context, one may readily see why “start more new businesses” is a low priority relative to regulating the consequences of the actions those businesses take. Any business, any pursuit of material goods or services between persons, necessarily appropriates resources from the environment and community (material and human resources). It is clearly necessary to enforce standards for resource appropriation that are consistent with my goal: to reduce and eventually eliminate those forms of suffering which are within our collective control.

I’m also not terribly interested in making it easier for anyone to accumulate wealth or in prohibiting anyone from accumulating wealth (where “wealth” is defined roughly as material goods far in excess of what one needs for a secure and undeprived life). These things seem to take care of themselves, and even if they don’t, I am fully comfortable with the prospect of living in a society in which no one’s wealthy and innovation halts, if that’s for some weird reason what it takes to achieve the goals listed above. (Frankly, I suspect no such reason exists, certainly not in the long term. As with art, much technological innovation is tied to a reward-and-payoff/risk-and-investment quotient, and adjusting the denominator can compensate for a lower numerator.)

I am making the empirical claim that, if (like Aaron) you want more new businesses than you would otherwise get, you need to reduce, not increase, the costs of business formation.

That’s a true statement. And, of course, I agree with you that the items on your list further upthread are ~not~ at all in conflict with my goals for societal improvement. So, feel free to refuse to provide free coffee to workers without fear of reprisal from my fantasy ideal government. :-) {Furthermore, I don’t currently have any reason to agree with Alex that working for you would be at all unpleasant, and for what it’s worth, I withdraw my “disingenuous/distasteful” statement, since it clearly doesn’t apply to what you intended to say.}

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Salient 08.07.09 at 1:46 pm

Also: I’d probably be OK with a few giant authoritarian corporations running the world, if they accomplished my goals. But I am currently firmly convinced that won’t happen and couldn’t happen: is there a definition of “authoritarian” which doesn’t come into conflict with my “no suffering due to someone else exploiting you” principle?

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Dan 08.07.09 at 1:51 pm

I know it’s slightly tangential to the conversation, but when you say ‘I could be pressed to define “exploitation” very carefully’ I’d very much like to hear how. If it involves the labour theory of value I doubt I’m going to be convinced. But if it involves some notion of bargaining power, then I can’t help but suspect that without its application being ruled out by fiat, the description ‘exploitation’ is going to apply to most people’s dealings with the state.

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Henri Vieuxtemps 08.07.09 at 2:07 pm

Doesn’t it seem logical that in order to create an environment where new-small businesses can flourish you need to crush the old-big businesses and deploy some mechanism that prevents small businesses from growing too much? Seems to me government regulation could help here by, for example, imposing heavier regulations on big businesses, higher taxes, stricter anti-trust rules, etc. So, hurting businesses helps businesses. Other businesses.

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Aaron Swartz 08.07.09 at 2:55 pm

People will put up with a lot of undesirable injustice in order to feed their kids.

I think this takes us back to the Jerry Cohen’s shmoos. The shmoo was a character in the Li’l Abner comic strip that could turn into any of the necessities of life, but not any of the luxuries. Thus a shmoo could turn into rice-and-beans, but not caviar. Before the shmoos arrived, the citizens of the town were exploited — capitalists gave the subsistence wages in return for grueling, dangerous labor and (since this was the 1940s) women had to be nice to their man if they wanted to survive. The shmoos changed all that — since basic subsistence was guaranteed, people only engaged in contracts that they genuinely thought they would benefit from; they were no longer forced by circumstances into things they really didn’t want to do.

So the policy change here would be some sort of Basic Income Grant, like Nixon and Charles Murray have proposed.

if, like Aaron, you do want lots of people “to start new businesses,” then you ought to listen to either a) the sorts of people (like me) who do, in fact, start new businesses or b) the sorts of people (like many of my buddies) who might start new businesses

Just because I want people to start new businesses doesn’t mean I want people like you and your friends to start new businesses. I was thinking more about helping the working class start new businesses, and when I talk to them the problem is always getting loans and capital, not government regulation.

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Substance McGravitas 08.07.09 at 3:05 pm

Shmoon produced a bunch of things that sound pretty luxurious.

http://en.wikipedia.org/wiki/Shmoo

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Salient 08.07.09 at 3:15 pm

I know it’s slightly tangential to the conversation, but when you say ‘I could be pressed to define “exploitation” very carefully’ I’d very much like to hear how.

Certainly. It’s below. It’s a bit long, hope that’s okay.

If it involves the labour theory of value I doubt I’m going to be convinced.

It doesn’t, I don’t think. I’m pretty sure I accept marginal utility as a more reasonable definition of value, though all of my feelings here are tentative. If you do see LTV latent somewhere in my definition below, please point it out.

But if it involves some notion of bargaining power, then I can’t help but suspect that without its application being ruled out by fiat, the description ‘exploitation’ is going to apply to most people’s dealings with the state.

A little closer. Let me define the verb, not the noun.

To exploit someone is all of the following things taken together. For the time being, if even one of them does not apply to a given scenario, I will not call that scenario an instance of “exploitation.”

(1) To induce suffering in a population.

(2) How? By leverage one’s control over resource allocation. (This includes allocation of jobs, circumstances of employment, et cetera because it includes control over wages and hiring contracts.)

(3) Why? In order to accumulate wealth.

(4) Under what circumstances? Both of these conditions must hold:

(4a) It must be possible for one to allocate resources in a way that does not induce suffering. This would probably require one to accept less wealth accumulation per annum.

(4b) The individuals in the population must be accepting the suffering you induce only because that suffering is marginally better than material deprivation, e.g. starvation. It must be a choice between the option one offers, equally exploitative options offered by others, or starvation.

In order to test 4b, one asks, if guaranteed sufficient food/shelter/healthcare to ensure the survival of themselves and their dependents, would the people you are allegedly exploiting refuse to have further dealings with you?

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Salient 08.07.09 at 3:20 pm

I’m pretty sure exterminating the schmoos qualifies as an example of exploitation.

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b9n10t 08.07.09 at 3:38 pm

David Kane:

“Is that what the rest of you (Salient, Alex, b9n10nt, Tim B, et al) want?”

Perhaps a bifurcated system:

for all: a generous state safety net (healthcare, unemployment, retirement)

for business with a form of limited liability that hires workers: a regulatory “nanny state” (minimum wage, workplace safety, paid vacation)

for coops in which all participants have equal ownership: do what you want re: labor standards

for the public: consumer protection and progressive wealth taxation

That’s a schematic of where we should be going, plus greater incentives for coops. Down with bosses, down with workers, up with citizens.

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Chris 08.07.09 at 4:22 pm

But if, like Aaron, you do want lots of people “to start new businesses,” then you ought to listen to either a) the sorts of people (like me) who do, in fact, start new businesses or b) the sorts of people (like many of my buddies) who might start new businesses.

Actually, although this sounds plausible, it is completely wrong! The people who *already* start new businesses are irrelevant to a discussion of how to convince *more* people to start new businesses. Marginal business-starters can’t be the existing business-starters because they’re not on the margin.

What we would need to focus on is the type of people who *don’t* start new businesses now, but would under a different legal and/or economic system. I suspect that many of those people are not starting new businesses because they lack either the capital or the educational background to do so, and therefore leveling the immediate availability of resources will lift more people into the opportunity-for-entrepreneurship category. (Educational disadvantages take time to remedy, maybe even a generation or more. But that’s no reason not to start ASAP.)

But I’m not sure we really need more new business starts anyway. There are already a lot of failed new businesses, which involve considerable waste (and bankruptcy externalities). We could keep the average business size down (assuming that’s desirable, and I think it probably is) by stronger antitrust enforcement and a more wary attitude toward mergers and acquisitions, rather than total regulatory capture of the agencies tasked with watching those developments, and such an approach might be as efficient or more efficient than trying to encourage more new business starts (that just lead to being squeezed out of the market by the big guy, or being bought up by the big guy making him even bigger).

P.S. Five minutes’ study of the history of labor conditions in the Gilded Age will prove the point at #87-88 beyond any reasonable possibility of doubt. Butchers, bakers, and brewers may provide a quality product out of their regard to their own interest, but employers do not provide quality working conditions out of their regard to their own interest unless potential employees are scarce.

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Zxcv 08.07.09 at 9:09 pm

Chris @73

I am in general agreement with your positions on school vouchers, but my impression was that vouchers were more popular outside the South than inside it. Milwaukee is the famous example of experimentation with them. The south, in general, lacks that tradition of predominantly Catholic private education. There is some discussion at 538 on the regional patterns.

Vouchers could become the new middle class entitlement, channeling tax money to private organizations not under public control, and I am surprised that that does not dissuade more conservatives. If vouchers were awarded only to the poor, watch any public support for them crumble.

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Zxcv 08.07.09 at 9:10 pm

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Tim B 08.08.09 at 1:34 am

“Is that what the rest of you (Salient, Alex, b9n10nt, Tim B, et al) want?”

Since you ask, b9n10t’s formulation at 100 looks pretty good to me.

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David Kane 08.10.09 at 12:56 am

1) Before this thread peters out completely, I would like to establish my leftist credentials by noting this comment I sent to the SEC a few years ago about how to reduce executive compensation at public companies. It is genius, I tell you, genius!

2) b9n10t and Tim B: Again, the issue that I have with friends on the left is not so much a bias against social engineering (see comment 1) above) but a plea for competent engineering. The whole idea that you could drive major policy change by making a distinction between co-ops (especially co-ops in which everyone, even the one-afternoon-a-week part-timer has an equal share) and for-profits is fantasy. Can you give an example of any non-tiny business in the US that could function if everyone had exactly an equal share?

And, even if you relax perfect equality, you still have the problem of people (like me) becoming co-ops if you make co-ops desirable enough.

Aaron writes:

So the policy change here would be some sort of Basic Income Grant, like Nixon and Charles Murray have proposed.

I can’t recall the last time that someone at Crooked Timber made a non-critical reference to Charles Murray. I often think that the best way to create a “larger left” is to take Murray (and others like him) more seriously.

Just because I want people to start new businesses doesn’t mean I want people like you and your friends to start new businesses. I was thinking more about helping the working class start new businesses, and when I talk to them the problem is always getting loans and capital, not government regulation.

First, just what sort of businesses are we talking about? Second, certainly, if you can’t get capital, there is no need to worry about regulation. But, once they have capital, I think that small business folk complain heartily about regulation. Third, we already have a fairly amazing system for “helping the working class start new businesses.” It is called banking. Walk into any bank, and there is a person whose sole job is to fund new businesses.

Now, one might argue that not enough funding is going on. That is a larger debate. But it sure does remind me of all the people who said, 4 years ago, that not enough people had access to capital/loans for buying their own home. Also, if it is really true that not enough capital is going to help working class folks (or others) start their own businesses, then those loans that are made must be very profitable with surprisingly low default rates. I doubt that is true.

In any event, this has been a pleasant discussion.

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Aaron Swartz 08.10.09 at 3:21 am

it sure does remind me of all the people who said, 4 years ago, that not enough people had access to capital/loans for buying their own home

Huh? You mean the people who opposed redlining? Who are you talking about?

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b9n10t 08.10.09 at 5:16 am

David Kane:

“The whole idea that you could drive major policy change by making a distinction between co-ops (especially co-ops in which everyone, even the one-afternoon-a-week part-timer has an equal share) and for-profits is fantasy.”

Listen, I’m out of my depth here, no doubt. But if you look at the emergence of the corporation, it was a major policy change (in the aggregate) that wasn’t driven by a “distinction” but by a host of legal and policy developments nurtured by an activist state. Well, if the goal of leaders in the 18th C US was capitalist industrial development, then these policies emerge and support the goal. If the goal today becomes a prosperous and ecologically sustainable ownership society (bosses and workers unite!), then a complex and dynamic array of policies and social levers are pursued toward that end.

Yes, any single policy in isolation would be comically insufficient.

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Alex 08.10.09 at 8:33 am

Can you give an example of any non-tiny business in the US that could function if everyone had exactly an equal share?

I don’t know about the US, but the John Lewis Partnership and Huawei Technologies are the first that spring to mind. Neither of which are either tiny or nonfunctional.

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