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The Forum > Article Comments > Protracted austerity measures won't solve America's problems > Comments

Protracted austerity measures won't solve America's problems : Comments

By Toby O'Brien, published 30/12/2011

Economic measures should be efficient and productive, but they should also be good.

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The important thing is not equality per se, but rather that people be able to share in the good things that life has to offer and that society produces. The claim that this is better achieved through the forced redistributions of a compulsory territorial monopoly of coercion and fraud based on arbitrary political favouritism and counterfeited credit, rather than through voluntary social relations, has been *irrefutably disproved* because of the economic calculation argument: http://mises.org/pdf/econcalc.pdf

I don’t agree that equality per se is a value justifying coercion, for numerous reasons. Firstly, human equality is factually and conceptually impossible. That of itself proves it undesirable as a policy goal.

Secondly, it is people’s unequal evaluations of the same thing that makes possible the mutual advantage of social co-operation, a.k.a. society. If people were equal, no-one could obtain any benefit from associating with others: it would spell the end of human society. Equality is actually an anti-social ideal.

Thirdly, attempts to coercively realize full equality must require the abolition of all freedom. Fourthly, as that would require full public ownership of the means of production – socialism - it would be impossible in theory because of the economic calculation problem: http://mises.org/pdf/econcalc.pdf.

Fifthly, as the final state of full equality cannot be justified, neither can coerced movements towards it – ‘greater equality’. Seventhly, any attempts to move towards it by coercive means must necessarily entail social negative consequences greater than any social positive consequences, again because of the need to calculate to economise.

And finally all attempts to coercively realise equality entail an even greater inequality between the state and its subject than the inequality that was the original problem, and thus are self-contradictory and self-defeating.

“Why is it that Germany manages to provide more social services for its citizens?”
Perhaps because it confiscates more of their private property?

But such wealth redistribution by itself cannot prove that net social utility – or whatever you want to call the ultimate human welfare criterion – would be better or fairer with than without the thorough-going government interventions that characterize both Germany and America.
Posted by Peter Hume, Saturday, 31 December 2011 6:25:22 PM
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“Why is it that Germany's economy is performing much more strongly (in recent times) when compared to the US?”
Firstly not everyone wants economies to perform more strongly – just ask Poirot, Squeers or the greens. They want the economy to contract. If they don’t want economic growth, why should they be forced to pay for it? So government promoting economic growth can not be taken for granted as a desirable goal for all.

But one thing is certain – an economy performing strongly is *never* the result of taxation, inflation, regulations, or war. These are simply economic fallacies. Economic growth is always the result of savings, work and entrepreneurs’ successful prediction of the future. The only thing government can do to promote economic growth is leave people free.

Diverdan
Unconstitutional aggressive war is not a legitimate function of government, and neither are taxes to fund it. As you note, largely the state re-distributes wealth *upwards*. The injustice of this is an argument against funding services by forced redistributions, not in favour.

Most of government’s “social services” are just different forms of insurance originated by the market, not government, e.g. income and health insurance.

There is no such thing as a “right” to live at other people’s expense. Obviously not everyone can be equally entitled to do so. Some will live at the expense of others. This automatically sets up a class of net payers - the exploited – and net receivers – the exploiters. Therefore it creates not a “social service”, but an anti-social caste privilege.

The dole is only necessary because government criminalizes employing people at the market rate e.g. minimum wage laws; and prohibits employing marginal workers e.g. by tax, superannuation, compulsory licensing, compulsory insurances, etc. Government itself causes the original problem – systemic unemployment - that the dole is intended to solve. These laws are not “fair” – they force people into poverty. The fair and pragmatic remedy is to abolish both dysfunctional interventions. In a word: freedom.

“…an endless list of functions of Government that would be missing in action in the absence of taxation”…
Posted by Peter Hume, Saturday, 31 December 2011 6:27:57 PM
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All that list proves is that people wouldn’t voluntarily pay for them. So what? Why should they be forced to?

You need to prove that the payers for these services want them enough to pay for them – and if they do, then obviously taxation to fund them could be abolished, so you must lose the argument either way.

And you need to prove that it’s fair for the consumers to have them at others’ expense. To be fair, you need to take account of
a) any governmental cause of them needing the service in the first place. This would eliminate 80 percent of cases e.g. most of the old age pension – caused by government, during one’s working life, confiscating enormous income, savings and capital accumulation, criminalizing earning in a thousand ways - then in its victims’ impoverished old age, having the gall to appear as saviour.
b) any unequal double standard – exploiter/exploited problem – eg parenting pension – no fairness in some people having to forego children because too busy working and paying taxes so others can be paid to stay home and look after their own children without working – totally UNfair!
c) the costs of the bureaucracy (enormous – what charity might be funded with that?)
d) the perverse income redistributions of government’s management of the economy e.g. enrichment of big banks, high officials, corporations, military, at expense of the poor and ordinary workers
e) the social welfare foregone because of government’s permanent ongoing large-scale destruction of capital e.g. war, inflation, pink batts etc.,– (uncountable zillions).

Once we take into account the downsides, as well as the upsides of government intervention, which Toby did not do, I think we must conclude that the small remainder of needy would be better and should be provided for by the vastly increased social wealth of a free society.

Foyle, All
You guys can’t have it both ways: decrying the unfairness and corruption of the Keynesian landscape on the one hand, and on the other, blaming free markets and supporting more Keynesian interventions to fix the problem.
Posted by Peter Hume, Saturday, 31 December 2011 6:31:02 PM
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Peter Hume,

Heard of the term 'Gish Gallop'? Why do you try so hard to bury us in it? You can't win an argument by twisting and contorting everything to fit into your blinkered and contorted view of 'society', and of what it really means to be a responsible citizen.

The article puts forward a sound contrast between Germany and the US in terms of social services delivery - and the resultant German superiority in productivity, economy and social success are clear. Germany is the leading Euro economy, and this is not by chance, but by the planning and execution of effective government. The US, on the other hand has loosed the reins of government and handed extensive control of services delivery to private contractors, with the result that even their health-care system is a model of inequity, and is financially unavailable to a huge portion of the citizenry - which Obama has tried to redress, but with limited success because of the power of private interests, including those backing the Republicans.

Also, because of private contracting of virtually everything, except the troops themselves, the US defence machine, and the undertaking of warfare and of rebuilding social infrastructure in the likes of Iraq, Afghanistan, and elsewhere, is immensely expensive, and is extraordinarily inefficient and ineffective.

Because of its privatisation drive, and its lack of government regulation of banking, equities and commercial systems generally, the US caused the GFC, and is in threat of becoming a failed state - like Greece, Ireland and even France and other Euro sovereign nations - from foremost world economy, to basket case in three easy moves. This is definitely not a model to emulate.

Yet you try to argue that no government is better than effective government? That society would be better off if there were no social programs to offer all citizens reasonable opportunity? A glance around the world quickly demonstrates that it is only those nations which have effective government and effective social services (ie effective responsibility for the welfare of its citizens) that are successful. Try arguing with that.
Posted by Saltpetre, Sunday, 1 January 2012 2:00:01 PM
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Saltpetre stated the arguments against Peter Hume's Thatcherite "no such thing as society" type views very well.

PH did not comment on my view that the USA has created a vast pool bank balances that will prove ultimately worthless when fossil carbon resources are exhausted. He has also not commented on my contention that the USA has consumed large volumes of those reserves by simply creating part of those bank balances.

Another large part of those balances was created to allow goods producing countries to export their potential unemployment and to fund the USA military and economic objectives. Gambling utilising those bank balances was the underlying cause of the GFC. Of course, producers of goods and services need consumers, even including the disabled and disadvantaged to have purching money in their pockets otherwise manufacturing and sales become unprofitable and the result is the sort of whinging we have had lately from Gerry Harvey and his ilk.

Of course all those people who think that growth can continue forever have not yet realised that once fossil carbon is exhausted metal production form oxide or sulphide ores (iron, copper, aluminium etc) will no longer be possible as there will be no significant quantity of reducing agent available. Synthetic materials will also not be available as they are also based on fossil carbon.

The OECD countries were recently rated on well being. The top five were Iceland and Northern European countries, Denmark, Norway, Sweden and Finland, all strong welfare system countries where social cohesion is considered desirable. Australia was 21st and the bottom five included USA, Greece, Mexico, Chile and Turkey. Illustrious company!
Posted by Foyle, Sunday, 1 January 2012 3:10:08 PM
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Foyle, Saltpetre

Imagine A and B having the following discussion:

A: “2 + 2 = 19.”

B: “No it doesn’t, and I can prove it, see.:
1 + 1 = 2, and
1 + 1 + 1+ 1 = 4
Therefore 2 + 2 = 4. It equals 4 and only 4. It doesn’t equal 19, and it can’t.”

A: “But I maintain that it does”.

Well that doesn’t mean, does it, that
• 2 + 2 = 19, or
• truth is relative, or
• there is no such thing as a universally valid proposition?

All it means is that A is logically incorrect.

You are faced with exactly the same problem. I say that my argument logically disproves yours, and have logically proved it; and you have not refuted my argument but only responded with more of the same illogic I have just disproved.

I have shown reason why forced redistributions – what you are wrongly and hypocritically calling “social programs” - cannot be ethically justified. Because to even enter into the discussion, you must concede the private property ethic, and thus perform a logical self-contradiction in arguing against it.

I have shown reason why forced redistributions cannot make society more physically productive. Because without economic calculation there is no rational way for government to know or calculate how to allocate resources to their most valued ends, as judged by the consumers. The result must *necessarily* be less productivity. Without disproving this, your assertion to the contrary is incompetent.

These entail complete logical and evidentiary disproof of your arguments. You give no sign of even understanding them. All you’ve done is keep banging away trying to insist that 2 + 2 = 19; to re-assert what I have just disproved.

Furthermore economic indexes do not and cannot prove what you are trying to prove with them. Because at best your line of reasoning could only amount to this:
“Countries which tend to have more of policy 1 also tend to have more of good thing A”
Posted by Peter Hume, Sunday, 1 January 2012 9:42:15 PM
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