Market liberals

Matt Yglesias makes tons of sense with his latest foray into an ongoing debate between him and John Quiggin and others. I think Matt operates in that awkward position of being not-progressive-enough for much of the American left, and not-libertarian-enough for the libertarians. So he’s constantly defending himself from both flanks, with many libertarians nodding along with him when he discusses barber shop cartels or the D.C. medallion nonsense, but then crying foul when he talks about carbon caps or universal healthcare. Meanwhile there’s some sort of purer-than-thou thing going on with the left-blogosphere which is attempting to paint Matt into the neoliberal corner or run him out of town or something. I’m not exactly sure what the point of all of this is anymore.

In any case, I am certainly sympathetic to Matt’s predicament. When it comes to issues like the taxi medallions, or other regulations that create barrier to entry and establish monopoly rents, or similar issues of economic planning, protectionism, and so forth, I tend to sympathize with libertarians. When it comes to matters of basic welfare I’m much more sympathetic to more traditionally liberal policies. When it comes to making public services work better, I think it gets very complicated. School choice is one such arena. The current model is decent but not great, and the status quo is both hampered and incentivized to do very little about the worst schools, the worst teachers, and so forth.

I’ve written along these lines about healthcare as well. I support universal healthcare. I’d just prefer to build that system by creating a competitive, largely deregulated market. Get government out of healthcare as much as possible, except to pay the bills. Otherwise you get ridiculous protections for drug makers and other supply-side actors, not to mention insurers, that are deeply regressive in nature and cause costs to spiral out of control indefinitely. Utilizing markets and what we know about the limits of our own knowledge and ability to plan can result in good governance. It doesn’t have to result in the Republican Party.

I suppose that even if I agreed with just about every smart critique of government I could find (and I mostly do, the state is a creature of violence almost by definition) I would still have trouble buying the libertarian line on welfare. We can make welfare more efficient, less bureaucratic, less expensive, but we can’t simply strip away the state and expect all the hungry bellies to be filled. We can strip away those worst aspects of the state that make belly-filling harder, such as corporate welfare, barber-shop licensing, patent-trolling, unnecessary and expensive wars, the maddeningly regressive War on Drugs, and so forth, but we can’t just stop paying poor people’s doctor bills and expect them to suddenly motivate themselves to be healthy or never get harmed or contract a disease.

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162 thoughts on “Market liberals

  1. I think that what p*sses liberals off about Matt’s viewpoint is that it’s systematically aimed at stripping any protections that middle/working class people have, while tolerating everything that the elites do.

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        • So the sum of what-it-means-to-be-progressive is union protections for teachers, regardless of the unions themselves, the results of the public education system, etc? This seems awfully narrow-minded.

          Also, I’m pretty sure Matt is not advocating selling public education down the corporate river. There is a big leap from charter schools to full voucherization of schools.

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          • No, not the totality of the problem, but I’d put the protection of collective bargaining rights of the few unionized workers we have left pretty high on the list.

            I realize you’ve partially bought into the idea that if we just make teachers as easy to fire as fry cooks, we’ll suddenly have a better education system, but the relatively small issues with teacher unions’ rank about 37th on the list of issues with public education.

            As for Yglesias, he may not endorse fully selling it down the river, but he sure as hell hasn’t minded raising the anchor and pushing the boat out of the marina. Pretty much every education he posts is a post endorsing whatever “market” reform our corporate masters have decided is best to save the children.

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          • No, the sum of blah blah blah. Please don’t post foolish things like that.

            Taking this an example, however – Matt is one of those ‘liberals’ who hates unions. And union members. Because they’re ‘economically inefficient’.

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    • I don’t think this is right in general, and it’s certainly wrong in Quiggin’s case.

      It was Matt’s assertion that it’s a losing case both politically and from a policy perspective for liberals to advocate higher taxes on the top 1% of income earners that got Quiggin and others riled up.

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        • That’s true, which is exactly why Quiggin and others dispute his position by pointing out that one way or another you’ve got to address the issue of large income inequality if you’re going to support a broad welfare state here.

          I think Matt continues to dodge the issue by misstating his critics’ case. I don’t see anyone who’s arguing with him advocating ” a hyper-narrow focus on the fabled top one percent of households,” but rather using that as an example because it’s an easy one to quantify. Yglesias seems to be arguing against a “soak the rich and all our problems are solved” straw man in this discussion.

          At this point I’m not sure exactly what Yglesias is actually arguing in favor of, either, and he seems to be merely repeating a plaintive “leave the rich guys aloooooone.”

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        • Thank you for this, I could not for the life of me understand why he made the post in question at all, but if it’s back to the argument about whether or not we can solve all problems with higher taxes on the rich, now it starts to make some sense.

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                • Incorrect. It’s not hard at all to find a combination of tax increases and military spending cuts that eliminates the deficit within 10 years, assuming even modest economic growth.

                  About the only other thing you’d need to do to run large surpluses is to get a handle on health care cost inflation, which we have to do anyway, so that could further mitigate the need for tax increases and defense cuts.

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                    • Yes, Elias. I was cutting to the chase; I really wasn’t cheating his argument. Bedrooms, bongs, higher taxes, more social programs. If he wishes to surprise me beyond that, consider my response a dare, or more gently put, an invitation to adult discussion.

                      ;-)

                      Sincerely. I have no time for recycled memes but neither are my short comments sophistic drivebys . We could eat the rich and abolish the DoD and still come up short on the annual deficit. The VAT discussion on your private blog makes an adult and numerically literate attempt to peel that onion.

                      Your citation of the OECD begged the question, that US tax rates are below Europe’s. Duh. Further, I posted a comment from a British MP that accused the OECD of being a tool of right-wingers!

                      For you, EI, I have the time, as I consider you an honest man and therefore salvageable. I’m content to fill in your epistemological holes and trust you will come up with sturdy conclusions.

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                    • I’ll take it under advisement, Elias. The fellow blandly asserted, “Incorrect.”

                      Incorrect only in his world, not the real one. His Rx was turning the US into Europe. As for the “day old” discussion, it’s only dead rather than live because you yrself didn’t engage it. You were onto something and yr private forum is more conducive to peeling back the onion. Now you have my objections, with an explanation. “What ___ Said” is a technique to advance arguments without having to defend them.

                      Like the man said, “Meh.”

                      [It’s quite true I put chum in the water to see if any sharks rise. Those with genuine arguments are happy for the opportunity to engage further and explain themselves. I have bored more insincere sharks in sincere reply than even a numerical literate could count.]

                      [It does make them go away, though, but that is not my purpose.]

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                    • 1. It’s not hard at all to find a combination of tax increases and military spending cuts that eliminates the deficit within 10 years, assuming even modest economic growth.

                      About the only other thing you’d need to do to run large surpluses is to get a handle on health care cost inflation, which we have to do anyway, so that could further mitigate the need for tax increases and defense cuts.

                      2. Regarding “What___said”: The point, which was completely clear, especially to someone of your self-professed intelligence, was that that has nothing to do with this.

                      I doubt this comes as a revelation to you. No one’s perfect, but for someone who holds others to a high standard of etiquette in online discussion, I found your behavior in this thread to be unfortunate. I’ll leave it at that; if you’ve more to say on the matter take it to either my sub-blog or an email, please, so we don’t further side-track this thread.

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                    • Elias, the math still doesn’t work on the rich or the military unless you take the trapdoor and make all healthcare professionals and facilities into agents of the state.

                      I cut to the chase. I do study the Eurostate more than I let on. They owe their very existence to the US, and only Germany is really making a go of it. After the Marshall Plan built them a shiny new country and the Germans have made a go of it under any variety of regimes. [Although even the GDR/Deutsche Demokratische Republik could barely bring itself to a patina of functionality under you-know-what.]

                      I think rhetorically, I’m quite charitable and understated, all things considered. You & I might compare the frequency of our use of pejoratives sometime, publicly or privately, if you think it might help us come to a better understanding.

                      I didn’t cheat the gentleman’s argument, and if I did, I agree he should handle it on his own.

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                • The way I see it, make all the cuts that need to happen in entitlements and discretionary to balance the budget.

                  THEN, afterward, tax the rich and cut defense, and invest all of that in research grants, infrastructure, and worker training programs.

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  2. I’ve never been bothered by MY’s criticisms of barber shop licenses or taxi cab medallions per se. I don’t think changing them would have any great effect on living conditions except for the very small groups of people in those industries. I tend to think he, and you, are correct about those issues, but to often something like getting rid of barber licenses is presented as a holding great potential for human advancement. It’s effect is bit exaggerated, still a good idea, but still a little thing.

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    • great potential for human advancement

      No, great potential for individual advancement. Then get rid of licenses in other occupations and you create great potential for more individuals to advance, and so on. Why worry about “human” advancement when we’re holding individuals back?

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      • Because i don’t think we are holding people back all that much. I don’t see a reason for barber or interior designer licenses nor do i think that is causing a major entrance issue for people wanting to do those jobs. Get rid of some license: fine. Riches for all: i’m just not seeing it.

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        • i don’t think we are holding people back all that much.

          Tell that to the immigrant who can’t legally work as a hairdresser. Tell that to the cabdriver who’s not allowed to own his own cab but must rent it from the company privilege enough to hold the medallions. It’s real for sure people whose economic opportunities are being limited through these rules. Go talk to them and I think you’ll find they very much are held back.

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          • Actually given the need for revenue at the local level, why not medallions that go on auction every year, i.e. you bid for the right to operate a taxi for one year, (alternativly for the life of one vehicle ) Think of all the money NYC misses by not doing this. (Or at least charging a 50% medallion transfer fee)

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            • So the rich can get richer and the poor can get pushed out… I like the way you think!

              We should also set something up so that new cab companies starting out have to jump through all sorts of regulatory hoops and inspections and whatnot but established players can get waivers and/or grandfathered in.

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            • This is certainly better than the status quo, but amounts to a specific tax on operating a taxi. Unless you think taxis impose some particular externality serious enough to merit correction, this is a worse idea than raising income taxes.

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              • But conversely you are using the city streets more extensively than others to make a living and the city should be able to get revenue for allowing you to do so. Most cities with private utility services get a fee for allowing the utility to use the city rights of way for service. Its not really a tax but a fee for using the streets.
                Let me take another example from a different domain, assume that if you want a copyright to hold more than 50 years you pay the government a fee (increasing every 5 years) for the copy protection fee. One could call it a tax but its a fee for service.
                Basically it would take the gains the private sector earned for no work and rec0up some of them, (just like I would charge a percentage of revenue for broadcast stations)

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                • That may qualify as a legitimate externality, though really I don’t see why consumers and businesses should be treated differently. Road use, petrol and/or congestion taxes would be a better bet.

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  3. Why can’t we suggest that there are some things – like education and health care – that should not be about making a profit? I don’t think it’s necessarily that liberals don’t like capitalism or the market, so much as they hold a firm belief that somethings should not be about money.

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    • Well, do you suggest that the manufacturers of hospital beds, medical equipment, ambulances, etc. not make a profit? What about rubber-glove manufacturers?

      Re: education, I’m of the opinion that you can support school choice without supporting government-backed for-profit schools. But even in education, people are turning profits. Textbook manufacturers, construction companies, bus manufacturers, etc. etc.

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        • I think single-payer healthcare and single-payer education should be sufficient for liberals. Whether this involves profits or not at this level or that, whether government is delivering or merely paying for services, etc. is not important. The important thing is that heatlhcare and education are publicly available.

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            • Jesse – I’m sorry, do you not offer up your own opinions on things like politics, etc? Here I was offering mine, on a comment thread, at a blog I write. Gosh, I didn’t realize that offering that opinion would be so offensive to you, but that must be because what you say is fact.

              But seriously, if you pursue this line of snark you can ship out. I want *none* of the Balloon Juice commenting ethic here at the League, and if you want to sully these threads with crap like that you can go find another blog to comment at.

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              • Yes, but I don’t tell conservatives or libertarians what they should be happy with. I give my opinion, not state a fact like “single-payer health care and single-payer education _should_ be sufficient for liberals.”

                Can’t you tell that’s just a weebit patronizing? Just a wee bit?

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                • No, actually. Not at all. I consider myself to be a liberal-tarian of some stripe. I argue for lots of liberal things like universal healthcare and stimulus spending, and plenty of libertarian things as well. I don’t think I should withhold my opinion because someone somewhere might find it patronizing.

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                  • Yes, say “we’d be better off as a country/nation/people/etc. under a single-payer education and health care system”, not “liberals should be happy with a single-payer health care and education system.”

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                    • So if I’m ombudsman of liberalism now, what does that make you? The combox nanny?

                      Seriously, *my* sense of what liberalism ought to achieve in regards to healthcare and education is *single-payer* not *single-provider*. I think liberals ought to be happy if this is what they achieve because it would mean universal access to healthcare and education but minus the often poor delivery provided by state institutions. Lots of people won’t be happy ever no matter what and to hell with the misanthropes, I say. Let them have their misery and malcontentedness.

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                • I dont think its patronising at all. If liberal is to mean something very specific, there comes a point when you have moved left enough that you have left liberalism behind. i.e. liberalism’s proper concern with autonomy or non-domination cannot legitimately get you certain results. Debates of this type are fairly common in political philosophy.

                  Now, of course, that’s a disputable claim, and it has to be argued for and against. But, it is illegitimate to say that making claims of this type are condescending.

                  i.e. there is a difference between being a social democrat and a liberal. The former has an unwarranted (I think) commitment to democratic procedures.

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              • I see what Jesse was sasying. It’s a trend among both conservatives and liberals, though I’ve only seen it here among conservatives (the anti-union dude and Koz being prime examples), to say, “This is what liberals/conservatives want.” The person saying it is almost always wrong, and almost always being condescending about it too. So I see why Jesse took offense.

                Of course, I agree that most liberals would be happy with single-payer health care (in fact, most Americans would, if poll data is any indication). I don’t think there’s any education system that anyone is going to be happy with, though, not in the near future at least. A standardized, universal education system, particularly one of this scale, is just not something we have enough experience with yet to do very well. I mean, we could imitate South Korea, but that would require not just education reform, but major cultural change. So we’re going to be left hating it and proposing mostly absurd solutions based more on ideology than empirical reality (and that applies across the political spectrum).

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                • I don’t think there’s any education system that anyone is going to be happy with, though, not in the near future at least.

                  No. Not if teaching science and liberal ideology like reading books and learning what other people have to say is part of it. Really, the entire argument against public education reduces to two things: a backlash from forced integration that materializes as resistance to paying education taxes used for ‘other people’, and that a liberal education is now viewed by people on the right as liberal indoctrination. All the stuff about closed loop cabals of teachers unions being protected because they vote Democratic is nonsense. An argument of convenience.

                  Sure there are problems, but they are not – as some people assert – endemic to the institution itself (or if they are, it’s shared by every other similar institutional structure). It’s that people’s views of the institution have changed, and rather than rehabilitate it people want to dismantle it.

                  Humbug!

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    • somethings should not be about money.

      Like water, food, education, housing, health care, the arts, science, retirement savings…

      The list would go on and on if you let it, because the problem liberals have isn’t with any one item on it. The problem is ultimately with money itself.

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        • Only a few are actually that vulgar about it. But a profound unease with money is one of the signal traits of left-leaning politics. When things are perceived to have gone bad, a leftist inevitably says “let’s take the money out of it.”

          Where they propose to end up with that… can be anyone’s guess. But it is what they say.

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              • Um, in the universe in which I exist, rich people end up in control of things that would make a lot of money, like retirement accounts, housing, health care, water, etc.

                Thus, why I as a liberal/social democrat/etc. want to remove that possibility. Not that complicated.

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                • It’s a good deal more complicated than you would like to admit. Get the money out? There goes the incentive. To do almost anything.

                  I’m terribly sorry that the demands of large-scale production aren’t precisely compatible with your preferences for large-scale distribution. But then, in a way, I’m not.

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                  • Somehow, without a profit motive, we’ve managed to create the single most successful anti-poverty measure in the history of the world. It’s called Social Security.

                    Same thing with health care. There’s no profit motive in Medicare. Now, there’s a motive for more efficient care so we pay less obviously.

                    Yes, you need a profit motive to make shoes, computers, or earrings. Not so much to provide water or power to a society.

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                    • Yes, you need a profit motive to make shoes, computers, or earrings. Not so much to provide water or power to a society.

                      With regards to the bolded, the profit motive is actually quite important in the provision of these. Remember that “power” is (generally) the conversion of mined compounds via a combustion process to a different form of energy. The profit motive is involved in this process in literally hundreds of parts, and is necessary to motivate operators and utility companies to increase efficiency, and in which way they should attempt to increase this efficiency. Similarly with water, there are many areas in which the profit motive leads to improvements in the supply, such as in purification technologies. So while its perfectly acceptable to say, “everyone should have access to power and water,” the profit motive was and is vital to ensuring that these services existed in the first place, and continue to improve. Meaning, we should have a policy of helping the less fortunate afford these things, instead of just giving it away because of the fear of involving money in something that is a need.

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                  • Get the money out? There goes the incentive. To do almost anything.

                    Which is why you need other incentives. Humans don’t have a money gene that suggests they will only innovate, only produce, only do anything at all, if money is the incentive. Hell, money is essentially a proxy incentive anyway, because the biggest incentive we do in fact have a gene for (figuratively) is one of the things that money provides: status.

                    I know, of course, that money does other things as well, but it’s not the only thing that can do them. Every system has its incentives. Money is a quick and easy one: it’s sort of like the crack of incentives, and if we move it, there will be withdrawal and we’ll need something to replace it, but there’s no a priori reason to believe it’s unreplacable.

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                    • Let’s say you replace the money incentive with… a sandwich incentive. Sandwiches are nicer!

                      Most people are just going to sell most of their sandwiches for money, with a big loss of efficiency along the way. And if you ban them from doing so, then your lucky recipients are the ones who get to eat the disutility. You’d be better off giving them money.

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                    • We’ve rigged this game ourselves. Joke is on us.

                      Money is the proxy incentive for lots of things. Most people who aren’t assembly-workers are motivated far less by “getting more money” than they are in “getting enough money”.

                      But those non-assembly line workers put their money in IRAs and 401ks and 403bs and directly into the stock market, and corporations must deliver on “getting more money” instead of “getting enough money”, because corporations ain’t people.

                      The individual works to make enough money to do the things that they find rewarding. The corporation must work to get as much money as it can.

                      Interestingly, we as a society haven’t noticed this disconnect, for all our bitchin’ about corporate behavior.

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                    • Chris,

                      Of course money is a proxy. But what other incentive, proxy or direct, really works as well? Naming someone Hero of the Republic to enhance their status just doesn’t work that well in most cases; and even then they really want it to be accompanied with lots of disposable wealth. That is, they don’t want to be given a luxury car; they want the cash so they can purchase the luxury car of their choice. They don’t wan to be given a dacha; they want to be given the cash to buy the dacha of their choice.

                      I think there is reason to believe that it’s unreplaceable, because it’s the only incentive, proxy or otherwise, that readily enables the receiver to acquire the incentive that is his/her real goal.

                      Your mistake is in thinking like a college prof–we’re stupid enough to publish papers for no money and the faint hope of status among a bunch of people unknown to the world at large. And even we are always pissy about how much we get paid.

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                    • Jason, I didn’t mean to suggest that the incentives should be material, or at least, not individually material. To me, the whole point of getting rid of money is not to create another form of materialism (like, say, Communism).

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                    • James, I didn’t mean to imply that status is the only incentive, just that it’s the biggest one (though it tends to operate more strongly in small groups than large ones, apparently — at least for most of us). And I don’t think, as I was just saying, that you replace a material incentive with a material incentive. I’m not saying material incentives should be done away with entirely, just that they shouldn’t be at the center of our social structure.
                      And no, I’m not really interested in going into a lot more detail here, as this really isn’t the topic, and hijacking a thread about the difference between center left, center, and center right from the far left seems in bad taste. Though if you want to have a conversation about it elsewhere you know how to get ahold of me. However, I have a feeling that as a poli sci guy, you know the direction I’m headed with this anyway.

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                    • From _The Gulag Archipelago_:

                      Another peasant, with six children, met a different fate. Because he had six mouths to
                      feed he devoted himself wholeheartedly to collective farm work, and kept hoping he
                      would get some return for his labor. And he did—they awarded him a decoration. They
                      awarded it at a special assembly, made speeches. In his reply, the peasant got carried
                      away. He said, “Now if I could just have a sack of flour instead of this decoration!
                      Couldn’t I somehow?” A wolflike laugh rocketed through the hall, and the newly
                      decorated hero went off to exile, together with all six of those dependent mouths.

                      My problem with Chris’s theory about getting rid of the money is that the government will just get rid of it for the proles like us. They will confiscate it and keep it for themselves… and we’ll get such things as “decorations” and “acknowledgement”… and, yes, implications that we ought be happy with such.

                      At least, that’s what keeps happening.

                      Maybe next time, it will be different.

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                    • Chris, I have a feeling that as a poli sci guy, you know the direction I’m headed with this anyway.

                      Yes, and the only reason for us to discuss it is that I would hope to head you off before you get too far down that rocky and unfruitful path.

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                    • I should point out that we don’t need to get rid of money. We just need to get money out of the government’s control and set up a system that doesn’t rely on money being scarce and hoarded, such that the money supply and distribution is tired directly to people’s own labors and not to what some guys in suits in New York and DC and Charlotte think the “right amount” is.

                      We need money, what we don’t need is finance. I still agree with Rushkoff on this point.

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                    • set up a system that doesn’t rely on money being scarce

                      If money isn’t scarce then you’ve destroyed it’s whole purpose. Money is merely a medium of exchange to facilitate the easy transaction of things that are scarce. If money is not scarce it doesn’t do a good job of facilitating those transactions because it can’t be related to the scarcity of those things–it’s value can’t be accurately related to their value.

                      Fortunately (or not) there’s a natural and inevitable solution to non-scarce money–hyperinflation of prices. Sooner or later the money will be functionally scarce again, even if you have to have a wheelbarrow load to buy a 6 pack.

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                    • Money is merely a medium of exchange to facilitate the easy transaction of things that are scarce.

                      The kind of economic system we use (let’s call it “corporate mercantilism”) is based on creating artificial scarcity in order to allow the state and the financial elite to increase their wealth through the exchange of artificially-scarce abstractions and shares of state-granted monopolies.

                      A money supply that increased directly based on true free market exchange of real goods and services – that is, wealth created by labor rather than usury and deceit – would not be subject to speculative bubbles. And if the value of currency was reset on a regular basis, relative to real economic output, inflation ceases to be a problem.

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                    • Which is why we should stop letting money be a proxy for those things, i.e. conferring status on the best accumulaters of wealth.

                      If only money were as much of an incentive, we’d probably have a lot more rich people, or at least much fewer poor people. Perhaps the homeless just have something wrong with their brains that money doesn’t give them the hard it gives the rest of us.

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                    • Well okay but how exactly would one go about accomplishing such a goal? Money can pretty much stand in for time, leisure, pleasure and certainly status. It can’t replace them but money certainly makes things like family, love, discovery, health, learning and travel much easier to go about pursuing.
                      I mean what you’re talking about would require some mass grass roots alteration of cultural norms I’m guessing though I’m not entirely sure what you think we should be moving towards.

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                    • I wouldn’t replace money, as others in the thread have suggest, but I wouldn’t mind if we as a society/country started to use is as a proxy for less.

                      You have the mythic story of A Christmas Carol, which in some shape or form permeates the holiday season, and yet its completely normal to denegrate an individual for being a “community organizer” while celebrating another for being a successful business person.

                      Money’s not a problem, its the way money and its accumulation has been treated increasingly as a stand in for too many things.

                      The pro-tax guy that I am, I perhaps have less of a problem having my money taken to go toward public purposes because I don’t view it as somehow an extension of myself, my labor, or some thing that I’ve formed an inalienable connection to or transcendent right over.

                      So my problem isn’t with money, but with all the supernatural and cultural baggage people attribute to it. It’s a means to an end, not an end, but the spirit that permeates American life is that it’s more the latter than the former.

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                    • Get the money out? There goes the incentive. To do almost anything.

                      In some sense of the word, everyone desires more money: that all other things being equal, having more money is better than having less (tho even that’s not entirely true). For the thesis about money being the fundamental incentive for human activity, the above somewhat trivial claim would have to be much stronger – you’d have to get rid of the ‘all other thing being equal’ part. On it’s strongest reading, everyone would be making career choices based exclusively on income potential. But that just doesn’t seem to be the case.

                      On a weaker understanding, Jason’s claim is merely descriptive: since we live in a world where money is used as the medium of exchange, everyone is motivated (by default) to acquire it (eg., I wouldn’t let one of my clients pay me in chickens). But it doesn’t follow from this purely descriptive account that money acquisition is necessarily an incentive for the economic activities people engage in. Some other premises must be included to make that claim stick.

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                    • Go back to 50s era taxation levels on the upper brackets and you’d see something come out the other end. You might not like the difference in total, but if people making over N are taxed at 85%+ you can bet they’d find ways to put large chunks of their pre-tax cash into some sort of status symbol, other than cash.

                      You’d probably also dramatically change free agency in sports for the better. I’m not advocating this, mind you, but it would definitely change the status of money itself.

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                    • ,

                      It can’t replace them but money certainly makes things like family, love, discovery, health, learning and travel much easier to go about pursuing.

                      I think that’d be great if more people actually saw it in those clear and impersonal terms.

                      Then maybe they wouldn’t have a problem exchanging some of their money for a healthcare saftey net that let’s them have the opportunity for: more leisure, more time with family, more time to work on projects, start-ups, etc.

                      I mean, if most people saw money as a stand in for all of those things, how come most of the richest people seem to have so little liesure, such poor family life, etc.?

                      Perhaps I’m fall prey to popular media manifestations of rich people, but it seems like there are plenty of people rich enough to spend the rest of their life doingw hatever else, and yet they spend it still amassing more wealth. Not a bad thing in and of itself, but it seems indicative of a certain mind set that sees money as something more than it is.

                      Maybe if we printed our money in bright colored paper and plastic coins, with the Chucky Cheese Rat’s profile on them, people would be less enchanted by it.

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                    • No, I was being serious.

                      It seems to me that you think that our culture is (relatively) bad (or, at least, nowhere near as good as it could be).

                      I suppose I should have asked for an example of a culture that you think we should be *MORE* like (or, I suppose, if there is one).

                      If there is one, I’d ask what you’d think we’d need to do to become more like that one.

                      If there ain’t one, I think I’d start getting freaked out.

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                    • Well E.C. we’re talking about an enormously complicated subject here, I mean even though the affluent are a small component of the population at large but they’re still, in isolation, a very large number of people. I suspect that you and I both probably suffer from selection bias when it comes to our perceptions of the affluent. Consider; what kinds of wealthy people would we hear about and see portrayed? Answer: the interesting ones. Interesting comes in two flavors, admirable and contemptible so we’d hear about the wealthy who either achieve greatly (make a lot of money) or we’d hear about the wealthy who are train wrecks (have horrible families). This extends even into fictional characters; I mean how long would a show about an affluent married mother of two and their idyllic life last? I doubt it’d even make it out of pilot. With regards to those achievers who make a lot of money we probably must face the facts that money probably isn’t what motivates them; rather it’s a means of keeping score. To put it another way they’re most likely doing what they love and achieving what they wish to achieve and money is a side effect of those efforts.

                      Importantly, I think it bears restating that when we’re talking economics and money, particularly in the US, we need to also face up to just how little money the filthy rich represent as a slice of the tax base. Yes indeed they’re fabulously wealthy but even if we could somehow confiscate every dime they had we still wouldn’t be able to balance the budget with it.

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                    • If there is one, I’d ask what you’d think we’d need to do to become more like that one.

                      Here’s one that causes no pain: Think a little more clearly about the social constructs regarding money and to what extent those constructs determine your decision-making? If you feel they don’t, then no worries.

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                    • I can’t imagine why you’d be freaked out. Because it’s difficult to conceive even, much less come up with an outline of an oultine of how to get from here to there? Or because something completely different from now is bound to be bad in some way?

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                    • , Didn’t mean to sound defensive, that was a dig at myself, knowing full well that I enjoy talking more than doing. I enjoy the League immensely or I wouldn’t keep wondering back.

                      To your other point. I’m imagining an equilibrium point, based on age and wealth, at which point any higher accumulation couldn’t be spent (at least not on oneself). So barring someone’s ambitions to get super rich and build some sort of monument, giant skyscaper, or prestigious foundation of sorts, it seems like that would be the point at which you go enjoy what you’ve ammassed. I could be wrong, but it seems like there’s an awful lot of old people that continue trying to make lots of money.

                      Then agian, maybe they just like the anxiety and ego associated with important jobs like that, and the money is an after thought. This might be it.

                      With respect to the wealth, %10 control 2/3 of net wealth. At which point should we be concerned that the “winners” are taking the national game of monopoly (free market capitalism) a bit to serious?

                      We just had the financial bubble, which drove lots of young professionals out of MBA programs and into law programs, and then we here horror stories of those who pass the BAR and then still flip burgers.

                      So it doesn’t seem impractical to think we need to shift focus away from certian professions (law, finance, investment) toward other professons (teaching, engineering, design).

                      People love iPhones and everyone loves to think of Google and Apple as the best thing to come out of capitalism since sliced bread, but it doesn’t seem like that’s where the elites are headed still.

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                    • Chris, it’s because most attempts to change entire cultures into something that hasn’t been achieved before have tended to end poorly.

                      I mean, if someone said “we need to be more like France!”, we could talk about us and we could talk about France and we could talk about upsides and downsides and unintended consequences.

                      If you want to change the culture into something that has no analogue, then you’ve effectively blocked off half of the discussion (specifically the downsides of changing to the new culture) and opened yourself up to comparisons to the last few times attempts to change cultures have been implemented on a governmental level.

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                    • , my analogue would probably be the space race. It’s an overused example, at least in political rhetoric. But it seems like a distinct moment that had profound effects on art, literature, architecture, as well as science and technology, ultimately laying the groundwork for the computing of the information age.

                      Neil Degrass Tyson (sp?) makes this point in relation to the unquantifiable benefits of NASA and space exploration. He maybe wrong about the usefulness of reinvigorating the inspired myth of space exploration, but his general argument that doing so supplied a sense of optimism and purpose seems on target.

                      I think you can have a general “call to service,” as in not what your society can do for you, but what you can do for your society, but in very not government intrusive ways. So government research programs in addition to grants and childhood education programs equivilent to “space camp” would be augmented by private corporation and start ups capitalizing on the raw gains of federally backed research.

                      And the most obvious place to do this in would be energy, an area that has applications for programing, engineering, biology, chemistry, and the rest of the sciences, as well as urban planning, agricultural science, architecture, etc.

                      But the basic idea is that you could gave federally backed initiatives that produce capital (whether in the form of new knowledge, new tech, or better educated work force) that can then be taken advantage of by the private sector.

                      The private sector isn’t very good at articulating shared visions for inspiring narratives for society, and yet to have the government do so is percieved as authoritarian, nefarious, partisan, misguided, etc.

                      But I feel like some semblence of a “vision for the future” is needed, and don’t know who can offer it. And I’m not convinced they can occur from the bottom up, as oppose tot he top down (via “elites”).

                      And then there’s the question of being able to afford all this, upon which I’m of the mind to cut whatever entitlement programs need to be cut in order to stablize the budget, and then use whatever practical revenues can be obtained from closing loopholes, increasing marginal tax rates (or adding a VAT), and lowering corporate tax rates but increasing capital gains taxes (in some capacity), as well as cutting the defense spending.

                      My plan B would be to do all of those things but use revenues to double defense spending and urge some initiative that might be more amenable to the heartland like the “militerization of energy.”

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                    • Jaybird, oh, then I agree. Attempting to change an entire culture/society by forcing change upon it is always a bad idea. That’s true regardless of whether we’re changing the culture into something with no analogs or something with plenty of analogs outside of the culture we’re currently changing. Conrad was right about that.

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          • Jason, you wrote

            But a profound unease with money is one of the signal traits of left-leaning politics.

            As if conservative are known for putting issues about money aside in political discussions. Or libertarians, for that matter.

            Actually, I think liberals tend to show the least amount of unease around money than any other group.

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            • I wouldn’t go that far, but I will point out that saying that liberals are uncomfortable around money is like saying conservatives are uncomfortable around books. It’s one of those generalizations that is A) obviously, egregiously wrong and B) more a reflection of the speaker than what they’re speaking about.

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  4. Get government out of healthcare as much as possible, except to pay the bills. Otherwise you get ridiculous protections for drug makers and other supply-side actors, not to mention insurers, that are deeply regressive in nature and cause costs to spiral out of control indefinitely.

    There is another solution that works quite well in much of the rest of the world. Hint: it doesn’t involve getting the government out of health care.

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  5. Barry,

    You think the D.C. taxi medallions benefit the middle class and not elites? In a just world, a comment as falsely misleading as yours would be intrinsically painful. Heh, and I don’t even like Yglesias.

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  6. The problem (this) libertarian has with Yglesias is that when push comes to shove, he’s an inveterate Team Blue booster, bordering on being a partisan hack.

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  7. Gach: Down here – too much embedding above.

    Here’s the thing – money is, more or less by definition, a proxy for all goods and services that can be traded. It exists because it’s rather difficult, nay impossible, to have a thriving and sizable society where barter is the only means of exchange. If money ceased to exist, greed would still exist. If, in a world without money, I went to the doctor’s office for just about anything, I would only be able to get treatment if either: A. the doctor chose to act purely out of altruism; or B. I possessed a good or service, with which I was willing to part and which the doctor had an interest of acquiring. If I have nothing that the doctor is interested in acquiring and with which I am willing to part, then I’m SOL. Money changes this equation. Now, it is not necessary that I have something for which the doctor is willing to trade, nor that I have something that I can trade for something for which the doctor is willing to trade (and so on and so forth). Instead, I have something that I can give to the doctor that he can use to acquire any other goods and services he wishes. IOW, money simply is the proxy for all those other goods and services for which I might wish or need to trade as well as all those goods and services that I might wish to trade away.

    What it seems you are arguing is that you wish more people provided certain goods and services purely out of the good of their hearts or even provided more of their money purely out of the good of their hearts.

    I doubt anyone around these parts would disagree that such would be a better world. It is, however, a world that does not exist and cannot be forced to exist. What you desire is a culture with a different mindset. But governments don’t change dominant cultures, at least not in democracies; when they do try to change cultures (whether or not dominant), the results tend to be more than a little bit horrid, almost without exception. Dominant cultures in democratic regimes have to change organically. Government can implement the dominant culture’s desired policies, which may or may not in turn help cause organic changes in the culture, but it cannot directly change the dominant culture’s attitudes (in a democracy, it is almost definitionally a reflection of that dominant culture’s attitudes).

    But money is not the cause of the perceived lack of altruism. It does not prevent people from acting altruistically if they really wish to act altruistically. For that matter, it also does not prevent people from bartering their goods and services.

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    • “What it seems you are arguing is that you wish more people provided certain goods and services purely out of the good of their hearts or even provided more of their money purely out of the good of their hearts.”

      I’m not expecting anyone to do things out of the “goodness of their hearts.” In other words, I’m not advocating charity.

      But I think people don’t do what they themselves might actually want to do, because money has all kinds of cultural trappings. That’s why I’m of the mind that Chucky Cheese tokens as are main currency might bring people’s conceptions of wealth back down to earth.

      We say money is a stand in for leisure, various goods, mobility, but somehow people get trapped into chasing after money rather than these other things that they presummably actually want.

      If instead of ammasing money in a bank or stock in a compnay, the person was ammassing apples in a barn, I don’t think they’d spend as much time doing it.

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      • We say money is a stand in for leisure, various goods, mobility, but somehow people get trapped into chasing after money rather than these other things that they presummably actually want.

        If instead of ammasing money in a bank or stock in a compnay, the person was ammassing apples in a barn, I don’t think they’d spend as much time doing it.

        1. I’m not at all sure it’s true that many people, even the workaholic rich person, chase after money solely for the sake of accumulating more money. That money which they do not spend in life is a liquid asset that they can transfer to their children, grandchildren, etc. That is something that may well quite understandably be important to them – it means that their children, grandchildren, etc. will be able to get the things that they in turn want. Now, whether such transfers are fair, are good for society as a whole, etc. is another question altogether, but it simply isn’t the case that they’re accumulating money for the sake of money.

        2. Your apples analogy doesn’t work, at least not in the way that you think it does. If people just accumulated apples instead of money, that would mean one of two things: 1. There is no money; or 2. Apples are money – there is no reason that money needs to be coins, paper, gold, or precious metals. Surely you are aware of the Yap people who use giant, largely immovable stones as money. And of course, historically livestock have quite often acted as a form of currency, and AFAIK, in such societies, possessing large quantities of livestock has always been a symbol of high social status just as you complain that modern currency is. If the former scenario were true – that there is no money – then accumulating apples would make no sense, since they would not be a useful means of exchange. In fact, the incentive in the absence of money would just be to accumulate as diverse and large set of goods and services as possible in one’s possession.

        Does money make accumulation of large amounts of wealth possible? Absolutely. But this has nothing to do with changing incentives. It instead has everything to do with just allowing exchange and trade to happen at a much faster pace.

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        • > It instead has everything to do with just
          > allowing exchange and trade to happen
          > at a much faster pace.

          This is an important point, and brings up the next question: which pace is optimal? Or, if that cannot be ascertained, which pace is least suboptimal?

          And the side question: are we anywhere near that pace, right now, with our monetary policy?

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          • Now you’re getting into things that are way beyond my pay grade. But my response would be, to the first two questions: there is no pace that is inherently preferable to any other pace – any pace of transactions has its own set of costs and benefits. The best that we can hope to say is that the optimal pace of transactions is the pace that most exemplifies the aggregated preferences of the culture at issue.

            To the last question – I have even less of an idea.

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            • > any pace of transactions has its own set
              > of costs and benefits.

              I agree. I think, however, that certain rates have costs/benefits that are correlated with certain levels of liquidity.

              This isn’t controversial, I’d hope. Obviously, if most of your capital is fairly illiquid, having a low transaction rate benefits you as it effectively makes your illiquid capital “liquid enough” for the purposes of financial transactions.

              If most of your capital, on the other hand, is highly liquid, a higher pace of transaction benefits you more than the illiquid asset holders as it effectively bars them from certain aspects of the game.

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              • I get your point with this, and agree that it ought not be controversial.

                I think what I’m getting at is that there is a difference between the optimal pace of transactions for a particular individual or group and the optimal pace of transactions for society writ large.

                I acknowledge freely I may be missing your point, though – as I hinted, once we get into particulars on this subject, I’m way out of my element.

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                • > I think what I’m getting at is that
                  > there is a difference between the
                  > optimal pace of transactions for a
                  > particular individual or group and
                  > the optimal pace of transactions
                  > for society writ large.

                  This is undoubtedly true. Just like the incarceration and justice thread over at Tim’s place, you’re going to have trouble with this one just for normative reasons.

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                  • Aye. I think in that incarceration and justice thread, that’s exactly what I was trying to get at – the trouble of universalizing our own normative beliefs and needs, bestowing upon them a status as a sort of inalienable right.

                    This is about to lead me down a long wormhole and a 1500 word post about democracy and markets. Unfortunately I don’t have time for that, so I won’t go any further.

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  8. I think you’re over analyzing my apple point. So maybe the Chucky Cheese bit is better.

    You don’t think people get giddy at the thought of tons of money in a bank vault? It seems like there’s something beyond just the potential for leisure and yachts that get people excited when they think of Harry Potter’s Gringotts account full of gold coins.

    But perhaps all of this does have less to do with money, then it has to do with the processes through which we accumulate it. You can’t work part time if you want. Generally workers have to work 40 hours a week, even if they don’t need that much money.

    But Mark, you really think most people just see money as the fungible stand in we theoretically understand it to be?

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    • > You don’t think people get giddy at the thought
      > of tons of money in a bank vault?

      Some people do.

      Here’s a question for you: go ask 100 people you know what they would do if they won a $40 million dollar lottery.

      How many of them would say that they’d try to make $100 million out of that $40 million? How many of them, on the other hand, would make a very large list of things that mostly have nothing to do with making any more money?

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    • But Mark, you really think most people just see money as the fungible stand in we theoretically understand it to be?

      Until proven otherwise, yes. I don’t see anyone who puts in their will that upon their death, all of their money should just be burned. They pass it on to their children, grandchildren, etc., or they pass it on to charity. They don’t pass it on so that those recipients can just look at it and admire it and do nothing with it.

      Nor for that matter am I aware of many wealthy people who are comfortable with the idea of dying intestate.

      People accumulate money because they want to see it used in a particular way, whether that use be now or some time in the future, after they are dead and buried. If someone gets giddy when they look at their bank statement, they are giddy about all the things that bank statement means they can do or make sure are done. Otherwise, there would literally be nothing to get giddy about. By definition.

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          • When you put a proxy in front of something that people value, they begin to value the proxy itself.

            You see this all the time, not just with the example of money. People begin to transfer tacit value to the proxy – even to the point where they make stuff up and attribute it to the proxy.

            Here’s an example from technology. You get an account on my cluster when you become a grad student in this department or when you take classes here. Eventually, we cull your account.

            You would not *believe* the reasons people tell me that they need to keep their account. It’s virtually entirely baloney. “I need my email address” or “I need my web page” for (long laundry list of reasons that literally simply don’t apply).

            The value of having the thing, itself, has transcended the actual practical application of the thing, itself. People want *it* (whatever the “it” is), because they have *it*, not because of the reason that they got it in the first place, which often no longer applies.

            Money is similar. People begin to transfer tacit value to money – this is one reason why people who win the lottery are famously unhappy (“I used to not be happy because I couldn’t afford these things that I wanted, and now I can afford those things and more and I’m still not happy.”) The perceived future value of the thing that they wanted but couldn’t afford was the actual thing that they valued, not the net present value of possessing the thing when it came to them as a windfall.

            So yeah, I think some people value money for the purpose of valuing money (although this is rare). Other people value money because they believe that it will grant them access to something that they currently see having value, but that value is largely potential, not actual (this part is actually common).

            On the other hand, it’s just one layer of abstraction away from those things that people want, so it’s not so abstracted that the pursuit of the thing becomes commonly completely disjointed from the things itself.

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            • Gotcha. That makes sense to me.

              Other people value money because they believe that it will grant them access to something that they currently see having value, but that value is largely potential, not actual (this part is actually common).

              I suspect this closely relates to the question of the need for instant gratification I reference below.

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  9. Perhaps I’m just confused as to what it is that smells wrong to me.

    There’s just this lingering intuition that we as Americans have an unhealthy obssesion with putting things in “economic terms” and then discussing how we can maximise them. Basically, if you can’t make an economic argument for it, no one will take you seriously (environmental movement), and yet really, that should just be a time saver, because isntead of having to convert non monentary things to money, measuring them, and then converting them back to their non monetary effects, we could skip that process all together.

    But I haven’t thought this through, and I really can’t argue with any of the points you make Mark. So maybe the reason for my unease is somewhere else or I just have indigestion.

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    • I think that if you said “we as Americans have an unhealthy obsession with instant gratification,” or some reasonable approximation thereof, you’d probably be a lot closer to the source of your unease.

      That is not necessarily the source of my own unease, just that I suspect it’s what you are ultimately trying to get at.

      To use your concerns about the environmental movement’s difficulties in the US as an example, is your problem that there are people willing to supply environmentally damaging things as a means of making money, or is it really that there exists a sizable demand within our society for such things, which are often quite cheap? If you could snap your fingers and tomorrow have a high-quality plastic that is both cheaper and more environmentally sound than existing plastics, I guarantee you that people would buy it and the more environmentally hazardous plastic would quickly cease to be made. In the process, you’d set industry records for profitability.

      But if that plastic costs a little more than the other stuff, and/or is of a lower quality, you’re not going to find a huge demand for it (though this is slowly starting to change culturally), and certainly not enough to meaningfully hurt the production of the cheaper more environmentally damaging plastics.

      Corporations and the wealthy will always try to produce whatever there is a demand for. This will always be the case in a free society. If the aggregate preferences of society emphasize instant gratification over future consequences, then the wealthy will produce that which best provides the instant gratification without regard to future consequences.

      This is where I think liberals of late have gone horribly, horribly wrong. To the extent the Kochs and big industry really are doing things that will have or are having bad environmental consequences down the road, they are quite literally doing our bidding as a culture. They are products of our culture, not causes.

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  10. I read the comments to Yglesia’s post. Good lord, Matt ought to move on over away from the socialist redistributionists and breathe some fresh air. Holy crap. It’s almost as if many of these people think there is a large. unchanging pot of money, and they see that rich bastards have a lot of it, so they want to spread that amount around to create more social justice. They appear to be unaware of wealth creation (creating more pies), how invested capital is used, how the value of a dollar is more important than receiving a few more dollars, how wealth creation comes about, what it takes to manage wealth, and how wealth affects those tied economically to the creator of wealth — they only see an image of an evil CEO bathing in dollars in a tub made of gold.

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