Brian Gongol Show on WHO Radio - February 8, 2015
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Please note: These show notes may be in various stages of completion -- ranging from brainstormed notes through to well-polished monologues. Please excuse anything that may seem rough around the edges, as it may only be a first draft of a thought and not be fully representative of what was said on the air.
Making economics work
A nearly-perfect economic system?- Incentives for those who will work.
- A safety net for those who can't.
- A fair but firm push for those who won't.
No, capitalism doesn't "want" to keep anyone poor. Quite the opposite. The nature of an economic system built upon the free exchange of money and goods and services is actually the system that most undermines the kind of poverty that has for much of human history kept people subjugated to those with other forms of power.
What system would work better?
- Don't say communism -- in which the political elites get first pick of anything material, and everyone else gets shoddy products, shortages of essentials like food, and an awful amount of pollution, too.
- Don't say feudalism -- unless you somehow think that it would be better if we all swore blood oaths to defend our vassals. Progress doesn't happen under a system built upon heredity and mindless allegiances.
- Don't say mercantilism -- it's only ever led over the long term to inflation in the mercantilist country and poverty in the subjugated states.
- Don't say barter -- the only difference between a system built on barter and one built on currency is that currency makes it possible for us to divide up our exchanges into tiny little bits (instead of me swapping a chicken for a pair of shoes, I can buy a pair of shoelaces instead) and to store value over time (thus allowing me to sell you a chicken now but wait to buy the shoes until when I actually need them).
- Don't say socialism, either. Of course, an idealized notion of socialism is probably what my friend has in mind. But a rigorously socialized economic system is impossible to maintain over the long term unless you have a whole set of necessary ingredients:
- A small, culturally homogenous society (equality poster child Sweden, for instance, is a country of just 10 million people, of whom 87% are Lutheran). Introducing "outsiders" into a system that promises ample benefits only turns the people against one another and invites anti-immigrant sentiment.
- Some sort of government-owned or heavily-taxed resource that is both sustainable and highly valuable on the world market (oil in Norway, for instance).
- Reliably far-sighted politicians who can channel investment over the long term into building sustainable sources of growth to replace the resource when it eventually runs out (resisting constant pressure to spend more now in return for political favor now)
- Domestic entrepreneurs and innovators who are willing to jump over high hurdles to create new economic opportunities for their countrymen, despite the obstacles
- Some sort of guaranteed employment program that keeps the country from accumulating lots of unemployed and under-employed young men (who, regrettably, are almost always the cause of terrible violence when left with nothing to do but stew in their own anger)
- But also some way of ensuring that something productive actually comes out of the guaranteed employment program (the Works Progress Administration produced some material results for a short term, but there was no way it could have been sustained for decades; America, in a sense, got lucky that World War II put lots of young men to work doing other things, trained them in skills they could use upon their return to the civilian workforce, and sent many of them to school with a real sense of purpose after the war)