TCS Daily


A Liberal, Radical and Progressive Manifesto

By Tim Worstall - August 14, 2006 12:00 AM

It's difficult to convey the shock with which a modern American liberal will greet Deepak Lal's new book, Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-First Century. Lal effectively points out that just about every goal held dear by those who call themselves radicals and progressives is best reached by exactly the opposite policy prescriptions that they put forward. Indeed, we can go further and point out that the best methods of reaching those goals are in fact the truly liberal ones, those laid out all those decades ago by Adam Smith, David Hume and David Ricardo.

Another way of putting this is that this book can and should be a rallying point for those of us who are indeed liberal, radical and progressive. Liberal in that we believe in the maximum amount of freedom consistent with the avoidance of anarchy (it was, after all, a British Liberal Prime Minister who campaigned on the idea that "The man who is governed best is the man who is governed least"); progressive in that we can make the world a better place; and radical in that this is not going to be achieved by tinkering at the margins. No, rather, what we need to do is roll back the accretions of power by the State over the past century, those things that actually cause so many of our current problems, perform radical surgery on the special interests that have hijacked our political process.

Those of you who listened to Lal's podcast interview with TCS big cheese Nick Schulz will have a general idea of the thrust of his ideas. Global wealth has historically grown fastest when the extent of the global market itself was at its greatest. In the 19th century this was driven by the Pax Brittanica and since 1980 (when the current burst of globalization really started) by the Pax Americana, something less like an Empire and more driven by the policy agreements of the Washington Consensus.

Contrary to what we are so often told, in both these periods, inequality fell: both amongst and within nations as the division of labor driven by trade was able to do its magic. It might be worth remembering that in 1900 Argentina was one of the very richest nations on earth, made wealthy by commodity exports to the more industrial nations of Europe.

The opposition to globalization seems to be driven by two things: one contemptible, the other merely mistaken. The contemptible one is the reaction of the various pressure groups in our own countries, bewailing the way in which "the market" will crush all cultures. This seems, in Lal's view, to be driven by nothing more than hatred of people or Contemptus Mundi. The mistaken one is where there is a conflation between resisting the market itself (with the associated capitalism) and resisting American or European culture. It is possible to accept and benefit from one without importing the other -- something that has not yet quite occurred to all? Organizing an economy along free market lines does not mean that Islamic states will have to allow topless sunbathing, alcohol or to abandon their cultural practices: Lal rightly points out that Japan is very much a capitalist society, but is still distinctively Japanese. All can become rich through trade without that having to mean that all become the same.

Elsewhere in Reviving, there are little paragraphs -- asides almost -- which illuminate huge debates that we are having now. For example, we often hear that there should be global standards on working hours, on safety standards, on the way that labor is treated. This is put forward as a matter of justice, as a way of raising the living standards of those so ruthlessly exploited.

By the second half of the nineteenth century India had turned the tables on the Lancashire textiles industry. In the 1850s it had established a modern textile industry based on Indian entrepreneurship and capital and foreign technology. It began exporting cotton manufactures to Britain. The Lancashire cotton interests lobbied the British-Indian government to "apply British factory legislation en bloc to India so as to neutralize the 'unfair' advantages which the Indian mill-industry was enjoying because of the large scale employment of child labor and long hours of work".

That worked well, did it not? -- making India so, so much richer. Remember this next time you hear the AFL or CIO calling for international labor standards: it's pure protectionism.

Lal argues that the claim that poor countries must be able to impose tariffs upon imports in order to protect their infant industries is "by and large an intellectual curiousum". At another point Lal disputes the Nobel-winning economist Joseph Stiglitz's similar contention that there is an optimal tax and subsidy policy which can alter behavior for the better:

It might be noted that we ignore any discussion of the political processes by which the tax-subsidy schemes described below might be affected. Critics may claim that as a result we have not really shown that a Pareto improvement is actually possible

Lal's comment upon this is a sparse "Quite." We might also apply that insight to the infant industry argument. Lal's view of governments is very like that of Chairman of the Economics Department at George Mason, Don Boudreaux's. Both see governments as bandits or predators who prey upon their captive populations to a greater or lesser extent. That there might be an optimal tariff or method of protecting infant industries is itself a debatable academic proposition. That the predators in government will never apply it -- even if it is found -- is an unfortunate fact of reality.

To my mind the most interesting part of the book was explaining quite how the WTO negotiations (the Doha Round which has/is collapsing) came to be such a mess using simple game theory. We know that unilateral free trade benefits those that practice it, regardless of whether any or all other countries reciprocate. So why do we even have trade negotiations? There is the obvious and oft-stated reason: that the benefits of protectionism go to highly organized and vocal groups while the benefits of free trade flow to everyone in a much more dispersed manner. It is therefore always easier to agitate and influence government in favor of restrictions. But Lal goes further and points out that the unilateral argument has never really taken root in the US. At least on an institutional basis, in the political classes, trade is seen as something where a concession here must be matched by an equal or greater one there. That this is nonsense does not stop everyone else from acting in the same manner: everyone is unwilling to have unilateral free trade, for if we did; what would we have left to bargain with the USA? A mistaken attitude perhaps, but understandable.

As to the best use of this book? Perhaps the purchase of a few copies might be in order. One for yourself, to savor. Others to pass on to those of your friends and colleagues who consider themselves liberal, radical and progressive. It should be interesting to see their brains explode as they realize that the achievement of their stated desired goals is only possible by the complete abandonment of all their favored plans. I wonder if we could get Hillary to sit still for long enough to read it?

Tim Worstall is a TCS Daily contributing writer living in Europe.

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173 Comments

modern american liberals
I believe that Mr. Worstall misses the true nature of modern American liberals. Or he may have his tongue well planted in his cheek. Our US friends on the left are hardly progressive and radical only in their desire relive failed social experiments. The modern left, veterans of the 60s and the children who are taught by these vets in our best universities, know they’re smarter than the rest of us. They know that the rabble consumes too much, that the limits of the earth are near, that technology is driving us over the edge. Most of all they know that if allowed to choose, the western masses and emerging societies will be lured by technology to - oh my god – a more prosperous life that will!, will!, will! make them more independent. “They, everybody that does not agree, must be controlled for their (our) own good. ”

I don’t much care whether or friends on the left get it or not. What I care about is our best friends – good voters. They are not likely to read Lal. I probably won’t either (I may try). Our best friends have an instinctive belief in the wisdom of human choice and the value of markets for goods and good ideas. I am counting on TCS, The American Enterprise Institute, our own Washington Policy Center, The Cato Institute and all the voices of freedom and free enterprise to nurture and feed that instinct. Thanks for putting Lal.s text to good use. I will try to read it.

modern american liberals
I believe that Mr. Worstall misses the true nature of modern American liberals. Or he may have his tongue well planted in his cheek. Our US friends on the left are hardly progressive and radical only in their desire relive failed social experiments. The modern left, veterans of the 60s and the children who are taught by these vets in our best universities, know they’re smarter than the rest of us. They know that the rabble consumes too much, that the limits of the earth are near, that technology is driving us over the edge. Most of all they know that if allowed to choose, the western masses and emerging societies will be lured by technology to - oh my god – a more prosperous life that will!, will!, will! make them more independent. “They, everybody that does not agree, must be controlled for their (our) own good. ”

I don’t much care whether or friends on the left get it or not. What I care about is our best friends – good voters. They are not likely to read Lal. I probably won’t either (I may try). Our best friends have an instinctive belief in the wisdom of human choice and the value of markets for goods and good ideas. I am counting on TCS, The American Enterprise Institute, our own Washington Policy Center, The Cato Institute and all the voices of freedom and free enterprise to nurture and feed that instinct. Thanks for putting Lal.s text to good use. I will try to read it.

Child/slave labour
So child and slave labour is a good thing and should be allowed to flourish, wherever it happens, in the interests of capitalism, competition and globalisation?

Ref: "The Lancashire cotton interests lobbied the British-Indian government to 'apply British factory legislation en bloc to India so as to neutralize the 'unfair' advantages which the Indian mill-industry was enjoying because of the large scale employment of child labor and long hours of work'.

... Remember this next time you hear the AFL or CIO calling for international labor standards: it's pure protectionism."

Market solutions
The appealing thing about a laissez faire world is that the people with the most money have the most say in how things are to be. And there are no obligations. If there is no money to be made feeding the poor, no problem. They can just go hungry. It's the miracle of the marketplace!

Take water, for instance. Once it was free to all. But once it gets sold to one of the big international water companies, it can then be purified and distributed to people and then sold to those who used to get it for free. And if those people can't afford it, it can then be sold to Coca Cola. And the peasants can just sell their drying fields and become entrepreneurs instead.

Don't be surprised if this hot new book becomes more popular in some circles than it does in other circles.

No people need better options and better options is what freedom and a little more income will work,
‘So child and slave labour is a good thing and should be allowed to flourish, wherever it happens, in the interests of capitalism, competition and globalisation?’

No people need better options and better options is what freedom and a little more income will work, in the mean time it is just plain mean to take this option away from people desperately poor enough to need it. This is especially true if your action in meant to keep the wages of middleclass American workers a little higher, relieving then of the need to use their brains and talents and access to capital more optimally, perhaps by gaining more training.

You are just mean and ruthless to limit the options of people desperate enough to send their children to hard dangerous work.


Only if you assume that people are useless
'The appealing thing about a laissez faire world is that the people with the most money have the most say in how things are to be. And there are no obligations. If there is no money to be made feeding the poor, no problem. They can just go hungry. It's the miracle of the marketplace!'

Roy this would only if you assume that people are useless. This is one of the boggles of the modern left. They see people not as useful contributors, increasers of the worldwide division of labor but as a burden on the world. On the average people produce more than they consume. Better to not let these people you speak of die of hunger but to use them in some job that makes my life better and the increased world productivity will make us all better off, even if ever so slightly.

Economically: No man is a rock no man is an island. So ask not for whom the bell tolls the bell tolls for thee.

When someone dies it is loss economically to us all.

Roy maybe you should the one to seek these people out and add a little of your capital and have them making something useful. You can do well by doing good. When enough of you do this the demand for labor will increase pushing up wages.




Consumer Sovereignty
In a competitive marketplace, consumers rule. It is defects in the political system that allow/enable "people with the most money" to exert undue influence.

Throughout history, the "rich and the powerful" have successfully commandeered the power of government to advance their parochial interests. A successful marketplace cannot operate effectively without the structure provided by law. On the other hand, too much law destroys value by impeding innovation and adaptability. By analyzing history and using the scientific method, we can approximate the optimal role of law in the market. However, the optimal role of law is not fixed…it is a moving target impacted by changing technological and cultural factors.

But today in the US (and also worldwide), the impact of law has on balance impeded economic progress. Governments in general over-legislate and over-regulate while at the same time allow/enable near monopoly control for selected special interests. All monopolies are economically dysfunctional, and are a failure of government mostly caused by undue political influence.

It is my hope/belief that information technology (via education and connectivity) will in time erode/destroy the harmful influence of undue political influence. When consumers are in charge, the common good is best served.

Why do you want those children to starve?
Because that is what outlawing child labor will cause.

Parents don't force their children to work because they hate their children. They do it because they have no choice. It's the only way for them to put food on the table.

When a countries productivity grows to the point where a parents income can feed a family without help, child labor always disappears. That's what happened in this country.
Child labor was not outlawed until it had virtually disappeared. (with the exception of farm labor, which was exempted from the child labor bill anyway.)

Cardinal Rule of the Left: People are pawns, burdens and useless.
It underscores every reaction (they think they analyze, but analysis is cerebral, not visceral) they have to every "problem".

Thats why people need government programs for everything under the leftist mindset. Of course the real masters, the super-rich liberal realize this is crap, so they manufacture it. If they don't then someday people might ask why they should listen to a Kennedy, Kerry or Lamont about anything-because like Marx, they talk a lot about employment and work, but avoid it like the plague.

The great unwashed are to be kept in government "schools" to be indoctrinated into spinelessness, sloth and self-pity, stripped of their dignity and self-worth. Make them slaves by telling them they are to be mastered by their passions, not to be masters of their passions.

That way, when its time to vote, they are reduced to baby birds in nests, responding to the politician with the most regurgitated worm. If you pummel them enough, they won't even realize they are eating vomit.

What obligation to feed the poor?
Anyone who wants to feed the poor is free to do so?
What roy wants is for the govt to steal from those who have more than he does, and give that money to the poor, so roy can feel good about himself.

Water was never free. It always took work to gather, store, and deliver it.

Hiring the marginal
Laissez faire would be a perfect way to order the world if we were all entrepreneurs. But we're not.

Many (most) of us don't have what it takes, so we seek employment from others. Those others assume the right to dictate the terms as they sign the paychecks. The problem creeps in when they don't allow their employees enough to live on.

Thus the labor movement was born. Employers should take it as a fact of life that there will always be resistance from their work force and from the population base, pressuring them to provide a better deal.

There is also pressure coming from below, as there is no work available for half the human population. The bottom two billion live in absolute, penniless poverty. And the next two billion work hard for a pittance. We are entering a period when the hungries will pose an increasing problem to the rich. This is already apparent when you see the way the lines are being drawn in Europe-- supposedly between Christianity and Islam, but really more to do with acceptance and economic viability.

The debate will be on which approach is cheaper: to try to bomb four billion angry people out of existence, or whether to widen the jobs base, include them in the global economy and have a hugely expanded number of viable consumers with money in their pockets.

I like choice B, both as a practical solution and as a matter of simple humanity. The poor are with us already. It's up to us how we respond to them.

BTW although I'm retired now I did make it a practise of providing jobs for low skilled labor force entrants. This end of the business comes with its own problems, but it's something that has to be done.

A solid basis for progress
Your comments are both thoughtful and accurate. Too much regulation can stifle. A command economy and central planning can be fatal. But how much government control is too much?

How were we doing back in the fifties and sixties, when the middle class was expanding and their incomes fuelled a consumer product boom such as no nation on earth had ever before experienced? Did not this rising tide lift all ships-- even the yachts of the CEO's and investors?

And what rates were prevalent then in the top tax brackets? Did this stifle ingenuity and productivity? Not that I recall.

I believe that a good engine for healthy economic growth is cash in the hands of well paid employees. You'll note that our last recession (2001-02) was primarily fuelled by soft consumer demand. Every car dealer in America had inventory he couldn't give away, while strapped consumers had cars for sale in half the front yards out here in Middle America. So I think such a thing is possible as going too far in the other direction.

The paradigm currently in use-- that of offering easy credit in lieu of cash income-- is unsustainable. I also find that to be the case in our national economy, where both the chronic trade deficits and the chronic fiscal deficits we operate on are unsustainable and approaching their practical limits. This is no way to run a business, or a country.

Water, Water Everywhere...
Good point about water Mark, shows the paucity of Roy's economic understanding.

Water wasn't free even when we lived in hunter gather societies-consumption entailed risks that those people couldn't begin to fathom. If there were waterborne pathogens you consumed, well too bad, you crapped yourself to death and blamed unappeased animal gods. Maybe if you were lucky, your clan said a few nice grunts about you.

You don't pay for water, you pay for purified water, (relatively) free of turbidity and pathogens, delivered to your house, in sufficient quantity and at sufficient pressure, available 24/7/365.

Of course "water companies" are generally a state regulated utility, you'd think that would be an industry Roy would approve of unflinchingly.




Roy, if you ever got hired-anybody can get a job.
Truly, leftists make the worst workers-they bi**c about everything, ruin morale, are experts at inciting dissatisfaction.. no matter what the skill level, rebels without a pause- a true pain in the a**

People are customers
Capitalists need customers.

Communists need slaves.

Kingdoms need subjects.

Who do you want to be?

'm guessing
Roy wants to be robot. Programmed and worry free.

50s and 60s
were a unique period in economic history.

The USA was the only functioning economy undamaged by WWII. The USA was literally supplying the world.

During the war, Deming instituted methodology to improve manufacuturing efficiency. After, no one cared except the Japanese.

And if taxes were 'just right' why did Kennedy lower rates and why did the economy boom in spite of heavy government spending on NASA, strategic defense and Viet Nam? (Or maybe all that money from tax relief inspired Congress to spend on the poverty war and Viet Nam?)

And, an economy does reach a saturation level. Already have two cars? Upgrade to leather, or trade in for a newer model or....
Needs get replaced by wants.

And the Needs/Wants of the 50s and 60s were the result of the deprivation caused by the 30s and 40s.

you need to review basic econ....
"Take water, for instance. Once it was free to all."

You have committed a fundamental error here. Nothing is free...nothing. There is an opportunity cost to every decison we make and action we take. The cost of procuring "free" water is all the other actions one might have taken in place of getting water--like working and the wages lost to obtaining "free" water. Remember that our array of individual actions are often mutually exclusive---you know, we can't do two things at once.

Good try on the "big international water companies" conspiracy though. Your arguments are generally weak and display a lack of fundamental economic common sense.

pittances
One thing people should note, the 2 billion living in poverty, and the 2 billion who have to work hard for a pittance. All live in the kind of workers paradise that roy wants for the rest of us.

As to the problem of workers not being paid what roy wants.
Each employee already has the power to fix that problem. He can quit and find a job that pays him what his labor is worth.

roy wants businesses to become charities, paying people more than their labor is worth. This is similar to roy's repeated demands that rich people have their money taken and given to the poor.

As usual, roy wants to feel good about helping people, he just doesn't want to pay for it himself.

I'm going to disagree
Like most liberals, roy wants the rest of us to be robots. He truely believes he is going to be one of the ruling elite that makes decisions for the rest of us.

Mark, Your Right
How could I forget the duty he feels from his noblesse olige to direct society?

Still I'm waiting, for him to have a logic fault like "Norman" in the "Mudd's Women" episode of Star Trek. Everybody-is-equal-but if-everybody-is equal-how-can-liberals-be-morally-and-intellectually-superior-explain-irresolvable-please-explain.

(much better if you imagine the hypenated sentence repeated with a robotic cadence)






You evade the issue
In poor societies, child labor always occurs. The question is, do you want that labor to take place in a textile mill or in a brothel? Those are the choices, none other. The difference is, the textile mill will eventually lead to a higher standard of living allowing things like schooling.

You evade the question you ask by not indicating what should happen to children in impoverished countries.

Of course water was free
and tainted with a hundred different kinds of organic pollution.

Oh, you want it pure and safe to drink? That costs. Ask the Romans. They understood the costs of building aqueducts and sewer systems.

free water
It might not have cost money, but it wasn't free. If you went to the watering hole you also had to keep a look out for predators. In the water and out. If you didn't go to a watering hole, you had to dig for it.

If you didn't want to spend all your life withing walking distance of a water source, you had to make something to keep the water in, plus the effort of hauling the water and the container wherever you went.

Economic Inequality
The opposition to globalization seems to be driven by two things: one contemptible, the other merely mistaken. The contemptible one is the reaction of the various pressure groups in our own countries, bewailing the way in which "the market" will crush all cultures. This seems, in Lal's view, to be driven by nothing more than hatred of people or Contemptus Mundi. The mistaken one is where there is a conflation between resisting the market itself (with the associated capitalism) and resisting American or European culture.

Actually, I can think of another. Although globalization is probably a "rising tide that lifts all boats," there is no denying that it lifts some boats more than others. Whatever one thinks about inequality in moral terms (it doesn't bother me much in and of itself), there is no denying that it can cause social tension. When the economic inequality overlaps racial fault lines, the resulting social tension is magnified exponentially. When the "have-nots" in this divide are numerically superior to the "haves," the result is . . . Venezuela. You can be sure that one or both of democracy and capitalism will be overturned.

That's my point
There is always a cost; it's never free. Sometimes it's money, sometimes its a threat to health.

Free? Where does Roy get this stuff from? Water was never free. Did he never pay a water bill? Does he imagine the Romans didn't have the equivalent of a water bill?

ARGHHHHH!!!!!!

Time to yodel
Hey, rb, thought I'd yodel a few thoughts at you.

“Employers should take it as a fact of life that there will always be resistance from their work force and from the population base, pressuring them to provide a better deal.”

Politics is just another layer of competition imposed on markets, and here’s where it begins, rb: Employers v. employees. Savvy politicians play both groups against each other, collecting campaign contributions from unions and corporations both while making empty promises to deal the final, decisive blow to the enemy. But nothing gets better except for the lawyers.

So tell me, rb, how are we any better off with a political layer on top of the market’s laissez faire layer? It seems to me the outcome is merely different than it would have been without the political layer. But only fools believe that money has been earned or saved or justice done due to American politics, and I don’t take you for one of them, rb.

“There is also pressure coming from below, as there is no work available for half the human population. The bottom two billion live in absolute, penniless poverty.”

You see mass injustice (read “inequality”) while I see a wonder of the modern age: How is it that modern man can feed half of his kind when half of his kind produce no food? Wow, just think how much wealth the half that produces wealth must expend to pull this off! How did you fail to recognize this wonder, rb?

“We are entering a period when the hungries will pose an increasing problem to the rich. This is already apparent when you see the way the lines are being drawn in Europe-- supposedly between Christianity and Islam, but really more to do with acceptance and economic viability.”

There is no end of need, or “hunger” if you will, because there is no end of desire. Living in Europe, I observe daily how people here enjoy a multitude of socially acceptable excuses to treat their fellow man like crap and allow few of them to go unused. Add political competition to this, and one gets class war, race discrimination, religious discrimination, together with a host of other politically incurable social ailments.

And so the political competition widens, rb: Black, brown, yellow, red and all combinations of the foregoing v. white, any non-Christian religion v. Christians, have-nots v. haves, old v. young, employers v. employed v. unemployed (a real policy mind-twister, this one is), etc.

Now, rb, go take a gander through the eye-crossing pages of the United States Code for a summation of the wise and all-knowing legal solutions our great political fathers in D.C. have cooked up for us. With all those volumes containing all those millions of words, we should have absolutely no social or economics problems in America, should we? Of course not, that is, if politics and laws could solve our social and economic problems.

“The debate will be on which approach is cheaper: to try to bomb four billion angry people out of existence, or whether to widen the jobs base, include them in the global economy and have a hugely expanded number of viable consumers with money in their pockets.”

Why widen the job base when we can feed all of those people who don’t feed themselves? Wouldn’t there be food glut, then? I suppose then we’d pay people to eat all the excess food, wouldn’t we? What would the farmers say? They’ve got lots of politicians in their pockets, so they’d say a whole bunch, rest assured.

And so the political competition widens, rb: Farmers v. eaters. Wow, now we’ve got a whole slate of issues to put before the voters, don’t we? Now we got problems to solve politically, by passing loads of laws making everyone do stuff they wouldn’t otherwise do but for the laws we passed. Now we’re gonna make America work again, right rb?

Politics is a stupid and wasteful game, rb, and it’s one that doesn’t produce a better world with fairer outcomes than the laissez faire world you abhor. I would think the 20th Century proved that for all time.

Then, wouldn’t it be a good thing to make it easier to be an entrepreneur; less complex taxation les
‘Laissez faire would be a perfect way to order the world if we were all entrepreneurs. But we're not.’

Then, wouldn’t it be a good thing to make it easier to be an entrepreneur; less complex taxation less regulatory burden?

‘Many (most) of us don't have what it takes, so we seek employment from others. Those others assume the right to dictate the terms as they sign the paychecks. The problem creeps in when they don't allow their employees enough to live on.’

One of my economics professors once stated: “this is a capitalist society and everyone should earn at least some of his income through the ownership of capital.” I think that that was great advice. We all hire (the store that we shop at, our dentist, our doctor etc.) buy and sell (even if we only sell our labor) and we should all think more like we are our own little utility maximizing business. The lines are not that distinct. Owning a home involves buying energy saving insulation appliances with paybacks. How different is this from the business owner. We make investments.

In as much as we get any of our income/utility from the ownership of capital we are entrepreneurs.

‘There is also pressure coming from below, as there is no work available for half the human population.’

There is always productive work that can be done. One point about this: In Honduras (I lived there), and I believe in much of Latin America they quote official unemployment rates of over 30% but people are working they are just not officially working. This is because of the taxes and regulation of official employment. The more produced the more can be put to capital that improves productivity. The way to reduce poverty is to allow the demand for labor to increase.

‘This is already apparent when you see the way the lines are being drawn in Europe-- supposedly between Christianity and Islam, but really more to do with acceptance and economic viability’

Europe is clearly post Christian.


Communist leaders (an oxymoron) need slaves
(Who is the leader of a commune if all are equal?)
(And in a purely communist society, must not all be volunteers, like a monestary?)

Nice comment
(I also find amusing that the Left has managed to engineer the tax exempt status of foundations that exercise greater and greater control without regulation or supervision advancing radical causes. Surely the Fords, MacArthurs and Pews or the world must b truning over in their graves to see the causes these foundations support. I also found it touching that the lEFT ALSO NEGLECTS TO MENTION that where ever and whenever their programs such as water treatment are practised, no water is available other than that which is unfit for consumption. Apparently Roy hasn't seen Iraq under Saddam or Zimbabwe today.

Advocating government dependency
Roy advocates the freedom of government chains. Nice comment.

Re: Why do you want those children to go to school?
Yeah, all those laws around the world banning child labour and requiring children to go to school only impoverished so many countries - the UK, US, France, Sweden, etc.

Accretions of Power
The author writes, "what we need to do is roll back the accretions of power by the State over the past century, those things that actually cause so many of our current problems, perform radical surgery on the special interests that have hijacked our political process."

What we need to do is roll back the accretions of power over the State over the past century, those things that actually cause so many of our current problems, perform radical surgery on the special interests - corporations - that have hijacked our political process.

those laws in UK, US, etc.
did not go into affect until after the countries productivity growth enabled parents to earn enough to feed a family without child labor.

In every one of those countries, the laws banning child labor were not passed until child labor had already virtually disappeared.

Passing them before that point is reached only results in dead children.

Why do you want to force dead children to go to school?

Blaming the fleecee for corruption?
Is this what they mean by Downes syndrome?

Lal's Theme Poor Replica of Bernstein's "The Capitalist Manifesto"
Deepak Lal's theme that only freedom and capitalism can bring prosperity to the world is correct. Dr. Andrew Bernstein made precisely that point in his 2005 book "The Capitalist Manifesto". However, Bernstein denies Lal's claim that leftists, Progressives, and Islamists can successfully adhere to their irrational, anti-individual-rights beliefs while they embrace capitalism and free markets. Bernstein points out that the foundation for capitalism and properity are the Enlightenment principles of: exclusive reliance on reason and science, the rule of law, inalienable individual rights, capitalism & free markets, etc. Only a fool would try to hold onto their bogus Marxist or Islamic Dark Ages beliefs while supporting Enlightenment capitalism, the political system of reality and the free human mind.

He's wrong then
Capitalism coincides with the protestant reformation. If there is a driving force behind capitalism it is the Calvainist and others branches of protestant belief's that success in the world mirrored God's favor in the afterlife. The conditions you mention certainly didn't exist in all areas where capitalism developed such as France oe Bohemia and many areas of Germany. Even Scotland couldn't claim all these. I would agree that for capitalism to work today these are conditions that are required.

Stealing water
"Water was never free. It always took work to gather, store, and deliver it."

Well water has always been free, for anyone who dug the well. Only today water delivery is such a multibillion dollar business that we see many aquifers in India, for instance, being drained by multinationals, so that local farmers all have dry wells and inadequate funds to get their wells dug deeper. This is indeed stealing from them in order to obtain a salable commodity.

Water companies
The problem comes in when a company with deep resources takes all the water available to a rural, agrarian community, purifies it and then attempts to sell it back to the people who used to get it for free. Aquifer depletion makes the resource unavailable to poor farmers who need it for survival. Sucking up this resource makes their wells go dry.

In metropolitan areas water is best delivered by a municipal water company. Every house and apartment building can't have its own well. So Roy approves of those water & sewer providers that are well run, while disapproving of those that are not.

Tuning a good economic engine
There's no need for the prosperity we enjoyed in the 50's and 60's to have been unique. We could reproduce it now if we had the leadership and vision to do it.

Such a prosperity relies on a broad based income distribution, to stimulate consumerism. You mention that we supplied postwar Europe. That was a good market, for all concerned.

Too much money being directed into the hands of investors often actually erodes production, as the money is not being used to buy stuff.

We don't have to worry about the economy reaching any saturation level. If you need reminding, we live in a global economy. Two billion of us live in absolute poverty, with neither jobs nor money. Another two billion are woefully unemployed, earning under a dollar an hour. Anything that can be done in the way of providing jobs will sell these penniless billions as many refrigerators and TV sets as can be built and distributed.

To my way of thinking, money directed into these areas is better deployed to do economic work than is money directed to areas where demand is already saturated-- i.e. the investor classes. They can't even find good ways to spend the stuff, so they have to put it into investment funds that routinely bloat and implode.

The last time this happened, in 2001-2002, between seven and eight TRILLION DOLLARS simply disappeared, doing no work whatever.

It is called free markets
If you want to access those billions of people that might buy your stuff, you need to open their economies.

And I think that is what the trend has been around the world.

Getting people like you, who believe you know how best to spend my money, out of the way will cause explosive economic growth around the world.

Also, how will the factories used to supply those billions be capitalized? Maybe all that money sitting around in banks not 'doing' anything?

That's not free
You have to pay for it in the labor of digging the well.

Anyone can get a job
Actually, not so. There are many ex-manufacturing employees who have retrained in several professions, only to find the employee glut to have drowned out opportunity for them in each successive new field as well.

Nearly everything that doesn't have to be done face to face, like shoe salesman, can be and is being outsourced. The army of displaced employees competes with one another for a dwindling number of jobs in many parts of the country.

So why then don't they move? Because they are broke, and maintaining the payments on their homes just through what remains of their unemployment benefits. This gives them a narrow window in time just to find work where they have already looked unsuccessfully. The money is just not there to move the family to a fresh part of the country and get established.

Look at it solely as an economic question
You're anxious to cast the issue as a cynical political battle. At heart it's not, as few politicians represent the interests of the un- and underemployed. They get paid much better by the side with all the money. So drop questions of politics and look at it in terms of practicality.

The most equitable fix for our economy is adequate wages at the bottom. Such a step has two principle effects:

1) Consumer prices increase to accomodate the higher wages while keeping investor returns healthy. This is, if you will, a tax.

2) The economy becomes more recession-proof because of higher production. The more we pay our shop floor workers, whether domestically or offshore, the more product they buy. Choke off demand and you get the kind of recession we went through four years ago. Don't just moralize about "desire". Think of it as unsatisfied demand taking the wind out of our economic sails.

We've gone as far as we can with a laissez faire approach, which is the approach we'd all prefer. So it's time to go to the next level, with such modest government intrusions as a realistic minimum wage that afforded one an adequate minimum lifestyle. There are some things an innately predatory market just can't fix.

Let them eat cake
You clearly have no idea what the norm is in the new Middle America, flo. Your blithe solutions don't apply to this reality.

We've just finished visiting a friend whose situation is typical. She's a single medical transcriptionist, and good enough to have trained many new transcriptionists in the local job pool-- people whose jobs have been lost and who need new professions.

They become instant competition, in a field where more and more transcription work is going overseas. But they don't frequently fire anyone outright, they just give them less and less work (transcriptionists are paid on a per-line basis). So that means everyone's pay dwindles while they get swamped in debt.

She's in her fifties, and still digging out from under the debt load. So she can't entertain the idea of hopping to another field. In any case, every good field is full of kids just leaving school nowadays. So she is trying to get into position with two jobs, to provide full pay. And her second job can't be in the same field, due to noncompete clauses. The only other thing available where she lives is store clerking.

This kind of whipsaw tactic is prevalent in many professions. You're saying that her solution would just be to start her own company? In fact she could-- but there are already too many of them.

Now, please, I'd like to know more about the wondrous economy of Honduras, where everyone is keeping their heads above water.

Try again
This is really an inane comment. Why don't you go back, read my post again and try to say something that has some relation to it?

Elsewhere I point out that capitalism relies on customers to boost demand, and that a healthy wage structure is needed to provide the discretionary income that maintains such demand. So I would choose from column A.

Winners and losers
You're certainly right. Capitalism has done some great things for humanity, and I'm all in favor of retaining it. But there is a flip side to all those benefits, and it's something we should pay more attention to.

Formerly there were few absolute poor on earth, outside of China and India. People lived humbly in a subsistence economy, or pre-economy-- but they got by. Today the two billion absolute poor on earth have largely been displaced by capitalism, so the land can be bought out from under them and developed, their water sold off and chronic wars of politicisation displaced them and sent them penniless into the Third World's swollen cities.

Just the number of self-sufficient farmers displaced by dams and other water diversion projects is staggering. Thye are forced from their homes and herded into cities where they must compete in a Malthusian jungle for the few jobs available.

Yes, capitalism is good for many of us. But it is also bad for many people, and much in need of some fine tuning.

An exercise in sophistry
People who have nothing but their hands and backs earn their living by their sweat equity. They have no access to money, and thus can't compete when transnational water dvelopers come in and drain their aquifers.

Should they want to dig their wells at greater depth they can't just take a shovel and go down two hundred feet deeper. They need to hire a well digger with equipment-- and pay him with money they don't have. In the real world what happens is that they lose the land and move to the city in search of work. In this they are most often unsuccessful, as they follow millions who have earlier done the same.

One thing seriously wrong here
Roy, I am prepared to agree in part that capitalism is not a perfectly self-regulating system and that some corrections to it are needed, but you really need to stop romanticizing the past.

This bit

"Formerly there were few absolute poor on earth, outside of China and India. People lived humbly in a subsistence economy, or pre-economy-- but they got by."

is very wrong, as any in-depth historical review will show. The picture of pre-Industrial Revolution rural society was in fact one of grinding underemployment. In France for example, one of the best agricultural regions in the world, more than half the rural population was wholly or mostly rural migrant workers. The steady decline in the diets of agricultural workers, as documented by in the parish records noted by various French historians, show an increasing level of poverty and desperation in French rural society in the 18th century. This rural desperation was what combined with middle class activism to produce the French Revolution.

There were no urban jobs, because in an artisan industry base, these are all skilled or highly skilled, and in any case often protected by guild restrictions. Like the third world, the only urban jobs for most were prostitution.

Hence the industrial revolution was a godsend to the rural poor, because it needed lots of workers including lots of unskilled ones, and while the pay seems small, it was a fortune compared to the starvation wages of a migrant farm worker.

Let's be very clear about this. Rural subsistence farming is and always has been one of brutal poverty. Why do you think it is that armies throughout the ages have always found most of their recruits among agricultural populations? Because, dismal as military life has been for most of history, the prospect of fighting and being killed by German barbarians was better for a Roman peasant than hacking a bare living out of stony hillsides.

The water industry
See my reply above to ColinH, titled "An exercise in sophistry". Water traditionally has belonged to no one, and was freely available to all. Their was no financial cost involved, or only rudimentary cost, as everyone dug their own wells.

Many volumes of material have been written about the transformation of this paradigm to one of control by heavily capitalised transnationals. Most recently (last night) CBS News has noted that this $400 billion industry is the world's third largest, behind oil and electricity.

Where have you been? You need to keep up with the times.

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