The global recession and an ideological shift?

Valmont

I wondering what people thought about the effects of the recession on the public's political ideologies? Will there be a shift away from capitalism toward Marxism and Socialism and will Joe Higgins gain more support? I've seen a lot of posters around town lately announcing the downfall of capitalism and how we should now being heralding the onset of Anarchism, socialism etc. I know that the Ayn Rand Institute will take a hit but do you think that socialist political parties will have a resurgence in popularity?

mike65

Nope, didn't happen any time previously. In fact the last serious recession period healded the New Right.

marcsignal

mike65 wrote: »

Nope, didn't happen any time previously. In fact the last serious recession period healded the New Right.

possibly mike, but the peasants are not fickle anymore, they are educated this time around

Permabear

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P. Breathnach

I don't think the problems are wholly due to capitalism; they are due to unbridled capitalism.

To a limited extent, Joe Higgins is right in applying Marxist analysis: society in general, and the economy in particular, is contested by interest groups. In recent years, the moneyed interests have prevailed, largely by exercising influence on governments and the major institutions, both national and international. Where I would part company from Higgins (and Marx) is in prescribing remedies. While Marx was perhaps the greatest theoretician of how society actually operates, he was rather less good at setting out how a society should operate.

But when I hear people advocating yet more unbridled capitalism as the cure, I find that even more alarming than simplistic socialist slogans. And the libertarian mé-féiners drive me to feelings of despair.

Valmont

Donegalfella you seem to know a good bit about this sort of thing, any books you would recommend to someone wanting to get a better grasp on the situation? Prefereably one without a socialist undertone. Any ideas?

Permabear

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nesf

P. Breathnach wrote: »

In recent years, the moneyed interests have prevailed, largely by exercising influence on governments and the major institutions, both national and international.

I don't really want to get into a debate on Marx, though his description as the greatest theorist on society is almost good enough bait for me to bite, but I take serious issue with this line.

Take one long look at our public pay bill and wage agreements over the last decade and a half. The unions have exerted just as much, if not more, influence over the Government. I don't think it's at all valid to say that it was purely the moneyed interests that exerted major influence in the boom. There has been a major transfer of wealth from the tax payer (and within the economy) both to the moneyed classes and the unionised workers within the public service (I'm not arguing that your average public servant is super wealthy only that pay increases to them have been far above both the rate of inflation and the average public sector increases and that these increases have been funded by the tax payer without realistically delivering much in return).

nesf

donegalfella wrote: »

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I wouldn't recommend a book, but if someone wants to try and get a grip on the changing world economy they could do far worse than getting a subscription to the Economist and reading it. It's biases are strongly towards free trade and mildly to the right economically* (in American terms). It's not so much an ideology as a source of information.

I even know a few die hard Socialists who read it every week precisely because of its no-nonsense approach to current and world affairs.


*It is in my opinion, nowhere close to as far right as many people (who don't read it) seem to think. If anything the paper is quite sceptical about extreme right positions with respect to unbridled markets etc.

sceptre

nesf wrote: »

I even know a few die hard Socialists who read it every week precisely because of its no-nonsense approach to current and world affairs.

I'm sure the die-hard socialists also want to know what the enemy is thinking:)

nesf

sceptre wrote: »

I'm sure the die-hard socialists also want to know what the enemy is thinking:)

For that they read the FT and WSJ.

PeakOutput

do you believe that a completely unregulated market is the way to go then?

i used to think that we had to just let it all play out on its own but im begining to see the so called lefts points on regulation i think. there needs to be some regulation there to protect those with no voice or they would get run over in no time at all. i read a good article from the new york times in the 70's the other day titled 'a business's social responsibility is to make profit' and i agree that a business should only be concerned with making money for its share holders and its the people and individuals that have social responsiblity and therefore the government. so the government appears to have to step in and regulate.

i dont think im right donegalman as i dont know enough about it i just want you to tell me why im wrong


as of right now i think the last 5 years have left an impression on me that the right wings view of a countries defence coupled with a moderate left wings view of financial regulation is the way to go. before i would have said that a completely free market will always be better in the long run and that america were just war mongerers. so thats how my opinion has changed

MG

Valmont wrote: »

I wondering what people thought about the effects of the recession on the public's political ideologies? Will there be a shift away from capitalism toward Marxism and Socialism and will Joe Higgins gain more support? I've seen a lot of posters around town lately announcing the downfall of capitalism and how we should now being heralding the onset of Anarchism, socialism etc. I know that the Ayn Rand Institute will take a hit but do you think that socialist political parties will have a resurgence in popularity?

I think we are alrady seeing a shift to the left in some ways. The Labour party has shifted a little to the left under Eamon Gilmore I think.

Also, the unions seem to be more militant and are spinning furiously about the "wurkahs not paying for the mistakes of rich bizinezmen".

Most of all I think you can see it subtly on the radio shows. Two years ago all the texts were about "taking personal responsibility" and railing against the "nanny state". Now they say "the government must do more". (I'd swear it's the same people too )

Ironically, much of our trouble today is caused, in my opinion, by Bertie placating the left (the unions) with overgenerous pay deals based on unsustainable revenue.

I hope we don't go too far to the left and encourage wealth creation rather than policies which disincentivise work and innovation.

silverharp

P. Breathnach wrote: »

I don't think the problems are wholly due to capitalism; they are due to unbridled capitalism.

To a limited extent, Joe Higgins is right in applying Marxist analysis: society in general, and the economy in particular, is contested by interest groups. In recent years, the moneyed interests have prevailed, largely by exercising influence on governments and the major institutions, both national and international. Where I would part company from Higgins (and Marx) is in prescribing remedies. While Marx was perhaps the greatest theoretician of how society actually operates, he was rather less good at setting out how a society should operate.

But when I hear people advocating yet more unbridled capitalism as the cure, I find that even more alarming than simplistic socialist slogans. And the libertarian mé-féiners drive me to feelings of despair.

if you want to find a solution for something, you need to define the problem correctly. To say that what is happening now is due to unbridled capitalism does not fit with the reality of the situation. Big Gov and central bank policy has corrupted the information flow to the market. By the definition of an Ayn
Rand idealised free market economy , the world has become heavily socialised in league with "big business" , the conventional wisdom is more big gov, and more regulation (but trust us we will get it right this time!)
A real free market would have taken risk more seriously. A recession would not bring the sytem down as debt would never have been pumped up to such high levels.

Permabear

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P. Breathnach

silverharp wrote: »

if you want to find a solution for something, you need to define the problem correctly. To say that what is happening now is due to unbridled capitalism does not fit with the reality of the situation. Big Gov and central bank policy has corrupted the information flow to the market. By the definition of an Ayn
Rand idealised free market economy , the world has become heavily socialised in league with "big business" , the conventional wisdom is more big gov, and more regulation (but trust us we will get it right this time!)
A real free market would have taken risk more seriously. A recession would not bring the sytem down as debt would never have been pumped up to such high levels.

I don't accept that.

Capitalists in pursuit of profit will corrupt government if it serves their purpose and they can do it. That does not mean that the appropriate response is to abolish government so far as that is possible. Societies prior to the growth of modern forms of government (generally "bigger") were very unequal and unjust. We don't need to go back to that.

silverharp

P. Breathnach wrote: »

We don't need to go back to that.

go back to what exactly, we dont have a society where 90% of the population are unskilled drones to be sent to the fields or down the mines.

Otherwise The only analysis that I have come across that was warning about this was the Austrian/Libertarian position, the opposite case put forward by the Keynsians is that there is always jus one more "tweak" required to get things straight , other then that were talking Eastern Europe in the 1970's.

nesf

P. Breathnach wrote: »

Societies prior to the growth of modern forms of government (generally "bigger") were very unequal and unjust. We don't need to go back to that.

Yes but was it bigger government that made them more equal and more just or something else? Much of the growth of Government, bureaucracy and taxation was due to World War I and World War II, not in order to create more equal or just societies.

Then again, we should probably try to agree what more just and more equal mean before we even get further into this.

Permabear

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P. Breathnach

Jaysus! The neocon/ultraliberal project has failed as spectacularly as communism, and yet its advocates argue on. They want to invent a society: ****-all government and everything will be hunky-dory!

No thanks.

nesf

P. Breathnach wrote: »

Jaysus! The neocon/ultraliberal project has failed as spectacularly as communism, and yet its advocates argue on. They want to invent a society: ****-all government and everything will be hunky-dory!

No thanks.

Pfft, do you want to debate this or not? Not all of us are neocons you know.

nesf

donegalfella wrote: »

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By definition it has to be coercive in order to uphold the rule of law though. Also while many on the right would agree that small government is preferable to big government, there is much disagreement on what small means. I wouldn't privatise all the roads, rails or electricity lines for instance. But I'd also not have any problem with people having to forfeit their vote if they were on the dole for longer than a year (i.e. if you don't actively contribute to the State through taxation, I don't see why you should get a vote). Which is well to the right of what many neocons would believe.

NewDubliner

nesf wrote: »

(i.e. if you don't actively contribute to the State through taxation, I don't see why you should get a vote).

Anybody who lives here pays some kind of tax (VAT, for example).

nesf

NewDubliner wrote: »

Anybody who lives here pays some kind of tax (VAT, for example).

I'm not convinced that there isn't an important difference between a household which contributes direct tax (i.e. PAYE/PRSI) and one that doesn't (the indirect vs direct tax question is an important one in these debates, i.e. any tourist/visitor pays VAT etc). You have to give people incentives to get off the dole. We can't remove the dole from them, that'll just encourage crime and cause horrible hardship. Removing their vote on the other hand won't materially hurt them but would remind them that the State isn't meant to be an ATM.

Then, I view voting as something that should be an automatic privilege rather than a right (i.e. something that you can lose but automatically receive at 18).

T runner

donegalfella wrote: »

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Yep, sure thing. The current global recession (which were talking about) had its origins in the international banking system not in the property market of Ireland. It may suit your argument to blame big government in Ireland but the reality is that in most western countries "the market" proved itself to be what it is: a collection of selfish entities who's nature is to put self preservation
before the greater economy. Once these entities had the power the bring things down: it was only a matter of time.

The true free market may work well in theory or even within a closed market.
You will get big business and resultant government protection...and non sensical wars. Unless you want to change the nature of international trade and government any free market will now never work without regulation and that means state interference.

For example simple regulation like they have in France against sub prime loans in this country would have dissuaded the human impulse to trade in houses when the price increased for people who couldnt afford it. That piece of "state interference" might have made a lot more people in this country a bit more secure now.

Your description of typical socialist is very interesting. Sounds like you are projecting one or two characters you met in your college days onto all socialists?
A narrow view really.

One of Obama's first acts will be to close down Quantanamo Bay, stop US torture and put the US foreign policeback in accord with the the Geneva Convention. To undue some of the work of your last champion of freedom namely, George W Bush.

After each period in a civilisation there is a need for a step back and an adjustment. Through history some of the proponents of the passing system dont get it, and keep flogging the dead horse.

Your post reminded me of the story of Nero, playing his fiddle in complete denial....putting blame elsewhere while the world of his philosophy was crashing around his ears.

(Who is your next champion of Freedom BTW, Sarah Palin?

Good luck.

silverharp

T runner wrote: »

To undue some of the work of your last champion of freedom namely, George W Bush.

Good luck.

Why the strawman arguments? You just dont get it, managed markets are destined to fail. The US has been living beyond its means for the last couple of decades, as the old saying goes "it was capitalism on the way up and socialism on the way down" maybe its just a natural cycle of decline.I wish Obama luck, but his stimulus package will fail as once the money is spent the economy will collapse back into a recession.

P. Breathnach

nesf wrote: »

Pfft, do you want to debate this or not? Not all of us are neocons you know.

A constructive debate requires some sharing of foundational beliefs. Only if such exists can we try to tease out the differences.

I do not accept the minimalist view of the functions of the state, nor do I believe that economic growth is the only way to serve the needs and wishes of people (although I accept that it is important).

So where can we start a debate? It looks like too much work.

nesf

P. Breathnach wrote: »

A constructive debate requires some sharing of foundational beliefs. Only if such exists can we try to tease out the differences.

I do not accept the minimalist view of the functions of the state, nor do I believe that economic growth is the only way to serve the needs and wishes of people (although I accept that it is important).

So where can we start a debate? It looks like too much work.

A constructive debate can be one where the differences in foundational beliefs are explored though. It helps people better understand the opposing views, for instance I don't agree that economic growth is the only way to serve the needs and wishes of people and I don't really think many on the right would think that either, for instance. Most importantly such a debate can help people on the sidelines grasp the underlying differences in the ideologies.

T runner

silverharp wrote: »

Why the strawman arguments? You just dont get it, managed markets are destined to fail. The US has been living beyond its means for the last couple of decades, as the old saying goes "it was capitalism on the way up and socialism on the way down" maybe its just a natural cycle of decline.I wish Obama luck, but his stimulus package will fail as once the money is spent the economy will collapse back into a recession.

But the market fell due to the banks being allowed to sub-prime.
Allowing the banks operate and lend freely to American's facilitated them to spend beyond their means. Allowing then operate freely enabled them to pass on the Trosians around the world, cripple the banking system and bring the global economy down.
It is not possible to have a completely free market as you suggested you need to have regulation.

I may not "get it" the way you seem to think you do, but gladly for the world economy and the ordinary people the new leaders in the States dont get it either.

People in the States (and Ireland) were spending beyond their means but this was not due to the market being "managed", just regulated incorrectly.

Permabear

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silverharp

T runner wrote: »

People in the States (and Ireland) were spending beyond their means but this was not due to the market being "managed", just regulated incorrectly.

part of "getting it" is understanding that in the US case the Fed and state will pursue any policy that will maintain positive GDP all the time. This has led to a situation where the Fed has had to blow up a bigger bubble after a previous bubble has burst. Case in point the dot com bubble crash forced/allowed the Fed to pump up the property market. As far as the Fed was concerned until 2006 it was a job well done. Throw in bailouts like LTCM in the late 90's and you have a situation where borrowers and lenders "forgot" about risk. A true free market would make market participants a little more cagey as they would be aware that there are less safety nets. Lenders wouldnt lend to people who couldnt pay, savers would query more where they keep their deposits to avoid a risk of default and borrowers would not borrow 10 times their salary on some la la fiction that house prices always go up.

jank

I thought the election of Obama was the end of Reaganism?

_Nuno_

jank wrote: »

I thought the election of Obama was the end of Reaganism?

It all goes in cycles I'd say, there's no end....

jank

Yea thats my point! Some people are saying that we need more reaganism to get out of this hole. :eek:

Permabear

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nesf

donegalfella wrote: »

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I agree that it isn't simple or clear, I'm mostly throwing the idea out there so people can debate what constitutes contribution to the state and whether everyone should get a vote. The dole is not the same as disability, it implies being able to return to work, also I used the term household to specifically exclude stay-at-home mothers from being categorised as the same as drawers of the dole. The biggest issue for any Dole =! contribution idea is single mothers. They don't have much of a choice about working a lot of the time and might be forced to draw the Dole for years while the children are young given that we don't have State provided childcare.

Permabear

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Mr.Micro

donegalfella wrote: »

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No system will ever be perfect and a tweek here and there could lead to a distortion elsewhere in a system, sometimes things are best left alone, and during a recession tinkering with the dole entitlment is probably not the best time to look at the issue.

Kama

Deriving your political voice from economic participation is a bridge too far for me; besides the 'deserving poor' donegal mentioned, assume some structural unemployment, correlate it with race and class imbalances, and it starts smelling a mite dystopian to me.

Flipping my ideology, I'm doubtful of its effectivity as a punitive strategy; voting rates among the non-propertied unemployed aren't exactly high to begin with, if its justification is as 'stick' imo its a poor one.

Voting as qualified privilege rather than right seems a worrying trajectory to me; all fits neatly onto the Giddensian rights/responsibilities dependence. But contra Caplan et al, I have a bias against disenfranchising.

But if you need slogans maybe try 'No representation without taxation'?

The idea that the free market is equivalent to black market anarchism is another canard.

Rothbard seems pretty close, to name one, not that I'm entirely unsympathetic. There's a pretty popular trend of 'popular libertarianism' in response to confiscatory taxation; tax avoidance if you have a good accountant, tax evasion if ya don't If taxation is coercive and illegitimate, withholding is morally justified, and hits the oppressive State where it hurts. Take their vote away?

nesf

donegalfella wrote: »

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I agree. I sincerely believe it'll never happen. This is at best a thought experiment.

donegalfella wrote: »

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The problem is that the social cost of cutting down or removing the dole from long term users is that it incurs a potentially large social cost both in terms of hardship and potentially increased crime levels. Other ways of incentivising people off the dole have to be considered I think.

nesf

Kama wrote: »

But if you need slogans maybe try 'No representation without taxation'?

Well it was a worry for late 19th and early 20th century that giving representation to those who didn't pay (direct) taxation would only result in a redirection of government expenditure to those who did not pay taxation with no regard for what might be in the best interests of the nation.

The theory being that if the ratio of voters to taxpayers greatly exceeded unity that this effect would be very pronounced (i.e. simply because there would be representatives whose sole mandate was to capture a large portion of taxation for their (untaxed) constituency) as well as (more problematically) raising direct taxes. The core concept being that taxation must be at the will of the people paying it or their representatives and that to allow any group who do not pay direct taxation to have a say in the level of direct taxation violates this.


(I don't necessarily agree with the above, I just think it's an interesting way of looking at it). For reference the ratio of voters to direct taxpayers is a bit below 2:1 in most developed countries from what I remember. I think the point is less relevant today because of the substantial shift from direct taxation to indirect taxation, but it is still interesting from a taxation only with representation perspective.

Kama

nesf wrote: »

Well it was a worry for late 19th and early 20th century that giving representation to those who didn't pay (direct) taxation would only result in a redirection of government expenditure to those who did not pay taxation with no regard for what might be in the best interests of the nation.

All hinges on defining 'best interests', or perhaps 'nation'...

A 'view from below' would invert this, that making representation the perogative of the propertied classes (Ireland, fr'instance, has been described as a 'property-owning democracy') would result in a direction of government policy towards themselves, organizational capture, with no regards for the best interests of the less-privileged internal 'Nation'.

It does return to the sticking-point of whether one considers redistribution to effect freedom, or retard it, disregarding the rights-based argument for a mo.


On incentivising people off, if the private sector is unable to absorb them, does this not necessarily mean an increase in the public sector? Enforced public service? Obviously distorts labour market, not exactly the libertarian wet-dream.

I know in Denmark (evil Nordic confiscatory regime that it is) the welfare apparatus is unwilling to let people rot on the dole, they push them towards jobs in the more social economy, creating them if need be. What other avenues does anyone see?

Permabear

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nesf

Kama wrote: »

All hinges on defining 'best interests', or perhaps 'nation'...

A 'view from below' would invert this, that making representation the perogative of the propertied classes (Ireland, fr'instance, has been described as a 'property-owning democracy') would result in a direction of government policy towards themselves, organizational capture, with no regards for the best interests of the less-privileged internal 'Nation'.

There was at the time though something worthwhile to this. Indirect taxation was very low and the main tax burden (i.e. direct taxation) was only ever levied on those with a vote. Part of the "deal" was if someone didn't have a vote, they wouldn't be subject to income taxation (in the late 19th/early 20th century British government at least, in earlier times the very much different and wholly unjust approach of taxing those with no representation was very much evident).

There is no obviously fair answer to this question I think. Allowing the untaxed to have a large say in the setting of tax levels breaks is not obviously just or fair (to allow them to have a large say on the redistribution of taxation might be though). Conversely a state where the law, redistribution and taxation levels are set only by the "propertied classes" presents a serious opportunity for abuse with respect to the "lower classes".

Kama wrote: »

It does return to the sticking-point of whether one considers redistribution to effect freedom, or retard it, disregarding the rights-based argument for a mo.

Or perhaps it's better to consider what is excessive redistribution. Some redistribution reaps large social gains (lower crime, less hardship etc). That doesn't imply that all redistribution levels are desirable though.

Kama wrote: »

On incentivising people off, if the private sector is unable to absorb them, does this not necessarily mean an increase in the public sector? Enforced public service? Obviously distorts labour market, not exactly the libertarian wet-dream.

I know in Denmark (evil Nordic confiscatory regime that it is) the welfare apparatus is unwilling to let people rot on the dole, they push them towards jobs in the more social economy, creating them if need be. What other avenues does anyone see?

I honestly don't know. It's the product of having a generous welfare system that it will attract free riders. Creating public sector jobs doesn't necessarily help matters since these people could be extremely demotivated and uncooperative. Conversely you're quite right in noting that the private sector won't always be able to take up the slack and that it's hardly just or fair to punish people because of circumstance (i.e. in a recession even people who are genuinely seeking work may not be able to find any within a year).



In short: Universal Suffrage is often presented as a costless good for society. I'm beginning to question this (I haven't made my mind up about it though). What is the cost of it and what are its benefits?

Kama

Anti-democratic arguments seem to be gaining ground lately...last family gathering I attended there was strongly voiced support for suspending the democratic process for a coterie of 'wise men'/CEO's to run Ireland Inc as a transitional government, due to the deficits of democracy as above.

Historically, isn't this common in times of economic uncertainty?

nesf wrote: »

Part of the "deal" was if someone didn't have a vote, they wouldn't be subject to income taxation.

If this 'deal' was offered again, there could well be a few takers...It's an interesting idea, though one I'm biased against. Global recession + democratic retrenchment seems...ugly to my eye.

Or perhaps it's better to consider what is excessive redistribution. Some redistribution reaps large social gains (lower crime, less hardship etc). That doesn't imply that all redistribution levels are desirable though.

Harking back to the ideal technocratic rulers versus democracy/ochlocracy, should our society be based primarily on evidence-based policy, or the popular will? As with Lisbon, are the people allowed to be wrong?

Mr.Micro

donegalfella wrote: »

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It could be argued as well IMO that Governments appear politically unwilling to raise direct taxation as well in the form of eg income taxe. In the UK the Labour Government appear very reluctant to raise the rates, as many see it as political suicide. So often what could be good for the country in the form of more revenue, is stopped by political considerations, the same applies here in Ireland methinks. To my mind that is wrong, as logic should dictate that the country should come first not the considerations of the ruling political party/parties ( and re election).

Permabear

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silverharp

Mr.Micro wrote: »

It could be argued as well IMO that Governments appear politically unwilling to raise direct taxation as well in the form of eg income taxe. In the UK the Labour Government appear very reluctant to raise the rates, as many see it as political suicide. So often what could be good for the country in the form of more revenue, is stopped by political considerations, the same applies here in Ireland methinks. To my mind that is wrong, as logic should dictate that the country should come first not the considerations of the ruling political party/parties ( and re election).

The raising of taxes is a poor choice on you part , there is no conclusive evidence that raising taxes going into a depression is a good thing and in fact may make things worse, for once "mob rule" might be on the side of the angels

Mr.Micro

silverharp wrote: »

The raising of taxes is a poor choice on you part , there is no conclusive evidence that raising taxes going into a depression is a good thing and in fact may make things worse, for once "mob rule" might be on the side of the angels

I do not want to see people being taxed more, especially in a recession, but sometimes an increase is inevitable especially if services for the poor, unemployed, public services are drastically cut because of lack of money which has to be borrowed. To my mind taking something away is as good as tax hike, but the former is perhaps politically the lesser of 2 evils politically?

Permabear

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Mr.Micro

donegalfella wrote: »

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Aw now come on now, I did not advocate such rates of 35% 60% or a return to the dark ages, sure was'nt I there myself. 1% here and there might help. The thing is I do believe, like several other countries, were are in unchartered waters and there will be no easy or painless solutions.