I've noticed something of a disconnect among liberal commentators on why many Americans are opposed to health care reform. Living in a more conservative area, and having a lot of contact with individuals of all income levels, I've heard a fair amount about why people don't like Obamacare.
On an anecdotal level, the main thing I'm hearing is that Obamacare does little more than create another bill to pay for people that are already having trouble making ends meet. Sure, they will have healthcare now, but probably on a high deductible plan. This doesn't help their pocket book issues any, if they have a major illness, they don't have the assets to get through any time out of work, not to mention the health care deductibles and coinsurance. The stark reality they're facing is that they were ruined before Obamacare if they got sick, and they'll be ruined after if they get sick (now, they'll at least receive better medical treatment, but it's still a bitter pill if they lose all their assets in the process).
What these people want help with is the costs of the kind of medical care that they can afford and have more contact with. They want cheaper regular check ups, cheaper minor procedures, like setting their kid's broken bones, and less regular medical expenses, like their monthly health insurance bill. Obamacare doesn't really deliver any of this, so they remain opposed. They see it as increasing their monthly expenses when they're already nearly broke, doing nothing to reduce the cost of the medical care they do seek out, and not being strong enough to protect their assets when they do get gravely ill.
There is a lot of truth to these criticisms. Obamacare does do a lot more to make sure doctors and hospitals get paid than it does to make costs lower for the average working class American (various sub-categories, like people with existing health conditions, are thrilled about the health care law, but for the general, healthy, lower and middle class there are much more mixed feelings). However, I believe there is a sequencing issue here. I don't see any way to have a properly functioning marketplace without certainty of payment. I'll write more about this later, right now the system is like a game of hot potato, everyone is trying to pass the bill along and not be the one stuck with it when the music stops. To get the changes that the average American wants, this aspect of the system needs to be eliminated. Obamacare is a significant step towards eliminating the systemic problem, though it necessarily leaves the need for later reforms to get at the pocketbook issues that concern the average guy.
Saturday, June 30, 2012
Sunday, June 24, 2012
Some Brief Thoughts on Risk Taking and Growth
I have often heard variations on the theme that exposing people to additional risk is likely to drive growth by a more efficient allocation of resources. Linked to this, I also observe a tendency to describe entrepreneurs as being lean and hungry, as if the thought of not being able to put food on the table is part of the driving motivation.
I have serious doubts about the accuracy of this description. From what I've read of the entrepreneurial literature, most entrepreneurs fall into one of two camps, both better described as fat and happy rather than lean and hungry. One type is the upper middle to upper class individual from a stable family who generally combines drive with a substantial ability to earn a good salary as an employee if their venture fails. This individual does tend to load up on debt in starting their enterprise. However, this hardly means the individual faces outsize risk, at worst they declare bankruptcy, lose a bunch of stuff they bought with other people's money, and go work for the man as a faceless suit.
The other type is generally an older couple whose kids are reaching self-sufficiency. These couple's frequently use their own assets to start a business, so have more exposure than their younger counterparts, but they frequently are able to shelter a significant portion of their assets in case their venture does go under. These individuals also tend to have had successful careers and have a good idea how to run a business, their experience means they are taking a lot less risk.
I have serious doubts about the accuracy of this description. From what I've read of the entrepreneurial literature, most entrepreneurs fall into one of two camps, both better described as fat and happy rather than lean and hungry. One type is the upper middle to upper class individual from a stable family who generally combines drive with a substantial ability to earn a good salary as an employee if their venture fails. This individual does tend to load up on debt in starting their enterprise. However, this hardly means the individual faces outsize risk, at worst they declare bankruptcy, lose a bunch of stuff they bought with other people's money, and go work for the man as a faceless suit.
The other type is generally an older couple whose kids are reaching self-sufficiency. These couple's frequently use their own assets to start a business, so have more exposure than their younger counterparts, but they frequently are able to shelter a significant portion of their assets in case their venture does go under. These individuals also tend to have had successful careers and have a good idea how to run a business, their experience means they are taking a lot less risk.
Tuesday, June 19, 2012
Alternatives to Socialism and Capitalism, the 3 Ideal Type Model
Something that I believe I have remarked on before is that I am rather dissatisfied with the crude portrayal of the choice between socialism and capitalism given by politicians, sometimes by the media, and that is expressed rather often on comment boards and by the public generally. I personally don't believe that socialism and capitalism accurately capture the choices we face in modern society or the factors that impact society, whether growth, social mores, or politics.
Of course, denigrating a perspective isn't worth much unless an alternative can be suggested. Personally, I prefer a model used frequently by economic historians, the 3 ideal type model.* Rather than a simple line between socialism and capitalism, this model separates economic organization into three ideal types, customary, market economies, and command economies. All three types are visible throughout history and all societies have elements of all three.
The first type, customary or traditional economies, are those dominated by role and custom. This can mean guild organizations, functional age groups (in some very primitive economies), gender roles, household economies, castes, and many other variants. At its most basic, these economies are organized on the notion of reciprocal obligations, each actor has a defined role to play and gets some sort of compensation in return, without the need for money or barter (though more complex, mixed interactions are possible, with either culturally proscribed fair prices or defined occupational roles but with money exchange occurring for the actual production). In the modern economy, the household is the primary example, I cook and my girlfriend cleans house. It would also involve other family obligations, or something as simple as rotating who hosts dinner parties among a group of friends.
Of course, denigrating a perspective isn't worth much unless an alternative can be suggested. Personally, I prefer a model used frequently by economic historians, the 3 ideal type model.* Rather than a simple line between socialism and capitalism, this model separates economic organization into three ideal types, customary, market economies, and command economies. All three types are visible throughout history and all societies have elements of all three.
The first type, customary or traditional economies, are those dominated by role and custom. This can mean guild organizations, functional age groups (in some very primitive economies), gender roles, household economies, castes, and many other variants. At its most basic, these economies are organized on the notion of reciprocal obligations, each actor has a defined role to play and gets some sort of compensation in return, without the need for money or barter (though more complex, mixed interactions are possible, with either culturally proscribed fair prices or defined occupational roles but with money exchange occurring for the actual production). In the modern economy, the household is the primary example, I cook and my girlfriend cleans house. It would also involve other family obligations, or something as simple as rotating who hosts dinner parties among a group of friends.
Sunday, June 17, 2012
How Could this Possibly Raise Competition for Jobs
The Washington Post ran a story Friday speculating that Obama's amnesty to illegal immigrants would lead to an increase in competition for jobs and college. Two things with regard to this, first of all this is an instance of linear thinking. Increasing the potential supply of workers and college entrants should impact a number of other economic and social variables, there is no good reason to believe this will increase pressure on existing job seekers or prospective students (it may, but without further evidence there is no reason that the intuitive response is correct, the impact is indeterminate).
I'll illustrate my second issue with a quote from the article:
This strikes me as wrong-headed. Currently, illegal immigrants lack virtually all bargaining power with regards to jobs, wages, and working conditions. They are also severely limited in their ability to incorporate and to employ others. One of the primary sources of downward pressure on wages and opportunities is a large number of individuals who are available to be hired who are in no position to ask for benefits, who cannot legally pay taxes, and who cannot appeal poor working conditions and abuse for fear of deportation. This makes these individuals very appealing as hires to less scrupulous employers in the low wage sector.
This reform removes much of what distinguishes illegal immigrants from other potential employees. Far from making them more competitive, this reform makes them largely indistinguishable from other workers. What advantage does an employer get from hiring an illegal over a native? The former illegal now has the opportunity to report labor violations, can now work legally and pay taxes so has less incentive to take under the table employment, and can now demand work place benefits. It's plausible that they may even have an increased demand for employer benefits relative to native workers since they don't qualify for Federal benefits; private disability, pension, and health benefits are that much more important to workers who lack even our threadbare social safety net. I fail to see how greater similarities between immigrant and native workers increases competition relative to the status quo. What mechanism would cause more similar workers with more protections to distort the market more than disadvantaged workers with less protections?
This strikes me as one of those irrational, intuitive responses that I referred to in my last couple of posts. Once the argument is thought through the holes in it are rather obvious.
I'll illustrate my second issue with a quote from the article:
But Steven Camarota, a researcher with the nonprofit Center for Immigration Studies in Washington, said that the Obama administration was not taking into account the new measure’s probable impact on competition for jobs at the low end of the economic scale, where chronic unemployment is highest. Among Americans with less than a high school education, he said, the jobless rate is 13 percent.
“It doesn’t seem the administration is considering the cascading consequences,” Camarota said. “What does this mean for unemployed Americans who will be competing for jobs with a million-plus people who can now apply for work authorization? Is this really a good idea?”
This strikes me as wrong-headed. Currently, illegal immigrants lack virtually all bargaining power with regards to jobs, wages, and working conditions. They are also severely limited in their ability to incorporate and to employ others. One of the primary sources of downward pressure on wages and opportunities is a large number of individuals who are available to be hired who are in no position to ask for benefits, who cannot legally pay taxes, and who cannot appeal poor working conditions and abuse for fear of deportation. This makes these individuals very appealing as hires to less scrupulous employers in the low wage sector.
This reform removes much of what distinguishes illegal immigrants from other potential employees. Far from making them more competitive, this reform makes them largely indistinguishable from other workers. What advantage does an employer get from hiring an illegal over a native? The former illegal now has the opportunity to report labor violations, can now work legally and pay taxes so has less incentive to take under the table employment, and can now demand work place benefits. It's plausible that they may even have an increased demand for employer benefits relative to native workers since they don't qualify for Federal benefits; private disability, pension, and health benefits are that much more important to workers who lack even our threadbare social safety net. I fail to see how greater similarities between immigrant and native workers increases competition relative to the status quo. What mechanism would cause more similar workers with more protections to distort the market more than disadvantaged workers with less protections?
This strikes me as one of those irrational, intuitive responses that I referred to in my last couple of posts. Once the argument is thought through the holes in it are rather obvious.
Socialism, Conservatism, and the Need for Closure
Following up on yesterday's post, I'd like to briefly take up a Monkey Cage post which quotes from a gated article on political psychology from the Chronicle of Higher Education. This article explores the increasing evidence for a genetic and hereditary component to political identification (roughly 1/3 depending on the study).
In particular, a passage from that articles states:
The need for closure, in particular, reminded me of Somers and Block's "From Poverty to Perversity." In this paper, the authors focus on the "causal mechanisms that allow certain ideas to exert extraordinary political influence."
The relevance to the topic of personality types and my doubts about a simple conservative/liberal dichotomy lies specifically to the personality trait of craving closure. Somers and Block write about a kind of idea that they call epistemically privileged. These ideas:
In particular, a passage from that articles states:
Mr. Eidelman has emphasized that the results largely reflect the wide recognition that—similar to the findings of Mr. Jost—conservatives generally crave closure, prefer to act quickly, and choose instinctive solutions. It’s not necessarily a vindication of liberals, who can be faulted as too indecisive and morally ambiguous, he said.Thinking about some other things I've read lead me to question whether these traits are necessarily identifiable with liberal and conservative personality types, rather than identifying with available partisan affiliations that are congruent with these personality types.
The need for closure, in particular, reminded me of Somers and Block's "From Poverty to Perversity." In this paper, the authors focus on the "causal mechanisms that allow certain ideas to exert extraordinary political influence."
The relevance to the topic of personality types and my doubts about a simple conservative/liberal dichotomy lies specifically to the personality trait of craving closure. Somers and Block write about a kind of idea that they call epistemically privileged. These ideas:
come equipped with their own internal claims to veracity. A theory that has 'theEpistemically privileged ideas seem to me to have an obvious appeal to any personality that craves closure. Only by having their own internal claims to veracity could any philosophy hope to eliminate the inherent ambiguity of the observable world.
means of making itself true' (Bourdieu 1998:95) has an obvious advantage over a theory that lacks its own epistemological bootstraps. This has been evident not only for religious revelation, but for Marxism, Freudian theory,and market fundamentalism itself. They have all displayed astonishing immunity to the kinds of empirical challenges that should be evidentially disconfirming. (Somers and Block 2005: 265)
Friday, June 15, 2012
Mirror Image Marxism
One of the major factors that drove me to the study of political science was the distaste I felt for how close minded Marxist thought was. It seemed so obvious to me that their assumptions drove their conclusions, rather than the actual observations of real world evidence, and that the combination made criticism impossible on their terms, by defining their intellectual playing field they made outside critique and empirical analysis impossible. This both fascinated and repelled me, I was fascinated to learn politics in an attempt to understand why large groups of people would adhere to so obviously flawed and limited a philosophy and I desired to learn political economy to learn all the flaws to the model from other perspectives.
A major factor that leads me to continue to study politics is the fascination and repulsion I feel by a near perfect mirror image of this that I see on the right wing, particularly in libertarianism. This philosophy seems to have developed a similarly closed circle, it makes assumptions that narrowly define the admissible evidence which inevitably drives the philosophy's conclusions and allows them to reject any outside evidence, since that evidence is not comprehensible within their philosophy. About the only thing they lack is socialist's talent for pithy phrases, like bourgeoisie science, for dismissing any inconvenient evidence or perspective.
A central feature of these closed systems is a doctrine of alienation. For Marx, and in a slightly less strongly specified form for other socialists, the Capitalist system, and the market generally, is oppressive by definition (there's an argument to this as well, but I can't summarize Das Kapital in a blog post). The very functioning of the market oppresses people, limits their life choices, and creates gross inequalities of power. The market alienates people from their own labor and from the institutions that run their lives. Never mind that millions, if not billions, of people support the market and recognize how it has improved their standard of living. Market institutions limit people from having any real impact over the choices they face in their lives and they simply become cogs in the machine grinding through their daily lives to the rhythm of market forces. Individual autonomy is an illusion, liberty requires freeing ourselves from the dominance of those that control capital. Markets, if they exist at all, should be limited to the trivial. Anyone that disagrees is simply deceived, they don't understand how market forces are impacting them personally and creating false opinions driven by the dominant market ideology.
There's really no way to argue with someone that believes this hogwash. Any criticism made or fact pointed out gets dismissed as an epiphenomenon (as I said, socialists are by far the more clever of the two with coming up with gobbledygook to dismiss criticism) created by underlying economic forces. It's closed, evidence of the benefits of markets is generally dismissed or labeled oppressive. The only acceptable inputs are decisions arrived at through deliberation and consultation, though since people rather inconveniently don't all express the same faith in socialist doctrine these deliberations and consultations become increasingly closed. In the end, it simply doesn't work.
Libertarianism (or perhaps more precisely libertarians, in my criticism of both groups I am referring to popular discussions of the philosophies and not the rather more nuanced academic debates, I'm criticizing college Marxists and the college Objectivists, addressing more nuanced arguments would require a different, and far more lengthy, format) displays many of the same characteristics of Marxism, but flipped 180 degrees. For Libertarians rather than the ultimate source of oppression and constraint on liberty, the market instead is the fount of the same. Rather than being the source of alienation the market is the true expression of a free people and our ability to make choices within its confines is our liberty. For Libertarians, it is the state that is alien and oppressive. The market facilitates interactions between individuals but the state is unresponsive to their needs, little is said of its consultative or deliberative aspects. Never mind that millions, if not billions, of people criticize the workings of the market, these people are deluded the market awards people for benefiting others and punishes them when they fail to do so. The market awards personal merit and punishes lack thereof, those criticizing the market for inequalities are obviously failures since they lack wealth (those that have wealth and are making these criticisms are obviously making some form of power play to oppress people through the state apparatus). If people desire something the market will make it available, if people criticize what is being supplied by the market they obviously misunderstand supply and demand since the market would supply their needs by definition.
I'm running out of time, but I'll follow this up in subsequent posts. Both philosophies are characterized by simply assuming that some social institution is necessarily oppressive without really interrogating the criticisms of this (well, Marx does interrogate this, but his assumptions a few steps back from this argument seem flawed to me, getting into this is well beyond what I can deal with in this post). Each system produces definitions and assumptions that register the main criticisms of each as invalid. For Marxism, the obvious oppression of unchecked deliberative methods is dismissed as impossible because the coercive powers of the capitalists have been removed, people simply don't understand the roots of their oppression or the wisdom of new methods. For libertarianism, there is no means to question whether the market truly awards merit or if the market is truly efficient or if it truly supplies what people want. It seems to do so by definition, never mind that Socialism has been saying the opposite for two centuries, that earlier political and economic philosophy also criticized the market, and that people living within market economies today regularly criticize whether the market is awarding merit, question the range of goods supplied by it, and question the abilities of market actors to coerce others.
But for those that want closure, both philosophies supply it by providing ready excuses for dismissing the concerns of others. Neither philosophy is willing to admit that humans are contradictory, flawed creatures with multiple identities (individual, corporate, and collective), with natural tendencies to oppress each other. Since humans have flaws so will all institutions. It is necessary to have multiple means of signalling to each other what problems we believe exist in our social institutions, only through checks and balances can we attain some approximation of freedom and liberty. Any system which tries for a utopia is necessarily tyrannical and oppressive, our natures simply don't allow for it.
A major factor that leads me to continue to study politics is the fascination and repulsion I feel by a near perfect mirror image of this that I see on the right wing, particularly in libertarianism. This philosophy seems to have developed a similarly closed circle, it makes assumptions that narrowly define the admissible evidence which inevitably drives the philosophy's conclusions and allows them to reject any outside evidence, since that evidence is not comprehensible within their philosophy. About the only thing they lack is socialist's talent for pithy phrases, like bourgeoisie science, for dismissing any inconvenient evidence or perspective.
A central feature of these closed systems is a doctrine of alienation. For Marx, and in a slightly less strongly specified form for other socialists, the Capitalist system, and the market generally, is oppressive by definition (there's an argument to this as well, but I can't summarize Das Kapital in a blog post). The very functioning of the market oppresses people, limits their life choices, and creates gross inequalities of power. The market alienates people from their own labor and from the institutions that run their lives. Never mind that millions, if not billions, of people support the market and recognize how it has improved their standard of living. Market institutions limit people from having any real impact over the choices they face in their lives and they simply become cogs in the machine grinding through their daily lives to the rhythm of market forces. Individual autonomy is an illusion, liberty requires freeing ourselves from the dominance of those that control capital. Markets, if they exist at all, should be limited to the trivial. Anyone that disagrees is simply deceived, they don't understand how market forces are impacting them personally and creating false opinions driven by the dominant market ideology.
There's really no way to argue with someone that believes this hogwash. Any criticism made or fact pointed out gets dismissed as an epiphenomenon (as I said, socialists are by far the more clever of the two with coming up with gobbledygook to dismiss criticism) created by underlying economic forces. It's closed, evidence of the benefits of markets is generally dismissed or labeled oppressive. The only acceptable inputs are decisions arrived at through deliberation and consultation, though since people rather inconveniently don't all express the same faith in socialist doctrine these deliberations and consultations become increasingly closed. In the end, it simply doesn't work.
Libertarianism (or perhaps more precisely libertarians, in my criticism of both groups I am referring to popular discussions of the philosophies and not the rather more nuanced academic debates, I'm criticizing college Marxists and the college Objectivists, addressing more nuanced arguments would require a different, and far more lengthy, format) displays many of the same characteristics of Marxism, but flipped 180 degrees. For Libertarians rather than the ultimate source of oppression and constraint on liberty, the market instead is the fount of the same. Rather than being the source of alienation the market is the true expression of a free people and our ability to make choices within its confines is our liberty. For Libertarians, it is the state that is alien and oppressive. The market facilitates interactions between individuals but the state is unresponsive to their needs, little is said of its consultative or deliberative aspects. Never mind that millions, if not billions, of people criticize the workings of the market, these people are deluded the market awards people for benefiting others and punishes them when they fail to do so. The market awards personal merit and punishes lack thereof, those criticizing the market for inequalities are obviously failures since they lack wealth (those that have wealth and are making these criticisms are obviously making some form of power play to oppress people through the state apparatus). If people desire something the market will make it available, if people criticize what is being supplied by the market they obviously misunderstand supply and demand since the market would supply their needs by definition.
I'm running out of time, but I'll follow this up in subsequent posts. Both philosophies are characterized by simply assuming that some social institution is necessarily oppressive without really interrogating the criticisms of this (well, Marx does interrogate this, but his assumptions a few steps back from this argument seem flawed to me, getting into this is well beyond what I can deal with in this post). Each system produces definitions and assumptions that register the main criticisms of each as invalid. For Marxism, the obvious oppression of unchecked deliberative methods is dismissed as impossible because the coercive powers of the capitalists have been removed, people simply don't understand the roots of their oppression or the wisdom of new methods. For libertarianism, there is no means to question whether the market truly awards merit or if the market is truly efficient or if it truly supplies what people want. It seems to do so by definition, never mind that Socialism has been saying the opposite for two centuries, that earlier political and economic philosophy also criticized the market, and that people living within market economies today regularly criticize whether the market is awarding merit, question the range of goods supplied by it, and question the abilities of market actors to coerce others.
But for those that want closure, both philosophies supply it by providing ready excuses for dismissing the concerns of others. Neither philosophy is willing to admit that humans are contradictory, flawed creatures with multiple identities (individual, corporate, and collective), with natural tendencies to oppress each other. Since humans have flaws so will all institutions. It is necessary to have multiple means of signalling to each other what problems we believe exist in our social institutions, only through checks and balances can we attain some approximation of freedom and liberty. Any system which tries for a utopia is necessarily tyrannical and oppressive, our natures simply don't allow for it.
Wednesday, June 6, 2012
On the Necessity of NSF Funding for Political Science
Sorry for the slow blogging, I've been occupied with other things. Hopefully I'll be blogging more frequently again going forward.
This Monkey Cage post gives a great overview of the necessity of NSF funding for political science and why those that are attacking this funding have a weak argument.
The only thing I'd wish to add is that observational sciences, like political science, are what got the scientific revolution underway. Astronomy practiced by Copernicus or Galileo was essentially observational, controlled experiments came later. It's absurd to draw a distinction between "hard" sciences and other sciences, science is about approach, methodology, and philosophy not about whether the source of observations is a test tube, the sky, or the human population of a nation.
I'd also like to add that I can't really think of an explanation for why political science gets so much criticism compared to other observational sciences like Astronomy other than that the critics either don't understand the scientific method or they simply don't like the conclusions reached by applying scientific principles to the study of human society.
This Monkey Cage post gives a great overview of the necessity of NSF funding for political science and why those that are attacking this funding have a weak argument.
The only thing I'd wish to add is that observational sciences, like political science, are what got the scientific revolution underway. Astronomy practiced by Copernicus or Galileo was essentially observational, controlled experiments came later. It's absurd to draw a distinction between "hard" sciences and other sciences, science is about approach, methodology, and philosophy not about whether the source of observations is a test tube, the sky, or the human population of a nation.
I'd also like to add that I can't really think of an explanation for why political science gets so much criticism compared to other observational sciences like Astronomy other than that the critics either don't understand the scientific method or they simply don't like the conclusions reached by applying scientific principles to the study of human society.
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