Sunday, March 13, 2011

The hyper-reductionist case against the nanny state 

We are, as a nation and a people, deeply in debt. This is the result of a great many Americans consuming, over the course of their lives, more than they produce. To get out of this problem, we need the proportion of people who produce more than they consume to become larger or for their aggregate overproduction to become so great that it exceeds the aggregate overconsumption of those people who are in deficit. Since the second solution -- which is essentially greater income inequality between the dwindling pool of producers and the growing burden of consumers* -- results in more social dislocation than the former, our government's policies ought to encourage a higher proportion of our citizens to produce more than they consume, not just this year but over the course of their lives. Transfer payments from overproducers to overconsumers promote the opposite objective, because they raise the burdens on producers and encourage people to consume without producing. We should therefore only transfer money to people if their circumstances are dire, and in any case it should be done in a way that will encourage long-term productivity. Culturally, we would do well to remember that the people who do the work in our economy make everything else -- including all that excess consumption by the debtor class -- possible.

With that in mind, here is a colonial era law that we might consider resurrecting.
*"Producers" in this post are people who produce more than they consume over the course of their lives whether or not they personally capture the benefit, and "consumers" are the opposite. Therefore, by these terms I do not mean a simple calculation of the differential in net worth at beginning and end. There are tremendous producers who keep very little of their contribution -- great teachers, for example, generate massive positive externalities that they do not capture on their own balance sheet -- and "consumers" who amass huge wealth by gaming the system to siphon wealth in their own direction. Some trial lawyers and politicians doubtless fall in this category. I am sure you can think of others. You may even be related to them.


By Anonymous Ignoramus, at Sun Mar 13, 03:53:00 PM:

"Producers" in this post are people who produce more than they consume over the course of their lives whether or not they personally capture the benefit, and "consumers" are the opposite.”

Jesus H fucking Christ!

This is how Mitt Romney thinks too, which is why if he gets the Republican nomination he’ll likely lose. Mitt will deny it, but it'd come out in a general campaign. He's the guy who wants to lay you off -- his kids need more Jet Skis.

It’s really hard for me to stop right now, and not go Medieval on TH’s ass … but words can’t express how really dangerous this line of thinking is, and how out of step it is with the political opportunity to get America back on course -- broad-based populism.  

By Blogger Noumenon, at Sun Mar 13, 04:51:00 PM:

Doesn't seem like a relevant way to look at it. You could push this solution till you have a society where everyone earns an equal $150,000 a year that is in debt because its government spending has the effect of making each person consume $160,000 a year. On the private side, you can have a society like Australia where "households in the top two income quintiles account for 75 per cent of all outstanding household debt," so that encouraging more production by the lower quintiles would really not address the problem. I assume the US is like this too, but I didn't Google very hard.

I also question whether you can measure whether you actually produce more than you consume -- you can tell if you earn more than you spend, but philosophically I can't take market prices as as a reliable indicator of my personal contribution. Even if I do, I can't be sure I'm not going to turn all of my savings into consumption at some later point, like if I get cancer. I could point to the family members, charities, or welfare recipients I support but I am definitely getting some consumption value out of those things too. Really it's only the people who are unemployed and doing absolutely nothing but playing WoW who are easy to judge.  

By Blogger TigerHawk, at Sun Mar 13, 06:16:00 PM:

@Ig -- I didn't say my point of view was good politics. I suspect that there are so many people who are consuming more than they give that it is terrible politics. And under no circumstances do I think that income is a particularly good metric -- lots of people have found a way to increase transaction costs and take their vig -- tort lawyers are my favorite example, I think you have yours. What I do think, though, is that we have gotten too far away from respecting "early to bed, early to rise" and "a penny saved is a penny earned" and the rest of all dat in our culture. We should applaud the people who add to the pile in the many ways they do, and look askance at the people who subtract from it.
@Noumenon, I am not saying that we should judge individuals per se (notwithstanding my comments above). There are a zillion ways to make an important contribution, and most people do not capture their positive externalities in their income. More to the point, we really do not know how people spend their days -- could be, they are using their unemployed time to tutor poor kids or visit nursing homes. But I also see a lot of people in my daily life who do not really seem to *do* anything with free time, and I wonder whether they are creating much, if anything, in the way of positive externalities. They are, presumably, the targets of the linked colonial statute.  

By Anonymous Ignoramus, at Sun Mar 13, 06:52:00 PM:


It's more than just bad politics, although that's part of it.

I'd pick unemployment as our single biggest problem today -- although it's intertwined with others.

We have many millions of people who would like to be producers, but aren't getting the chance. This will likely get worse, before it gets better.

Some of this is a reflection of larger forces at work. But our current Borg leadership isn't helping -- it predates the current administration, but Obama & Co have made things worse. The irony is that blacks will suffer more from this in the long run.

The truth is that many "producers' owe their production to where they're slotted in the Borg. They're more "presiders' than "producers", actually. They may come to find that their "production" is tied to the continued success of their arm of the Borg, which isn't necessarily a given.

The Borg has issues -- by necessity it'll either get bigger or smaller -- if the latter, many seemingly successful "private but Borg-dependent businesses" may run into rocky times, and the "producers' won't look so "productive."

I do accept your point that we can't sustain an economy where only a relatively few are incented to give a shit about actual results, and then get sur-taxed for their trouble. But there's a better way to sell that.

Personally, I'm close to giving up on trying to be "productive" and may just go over to the Dark Side.  

By Blogger JPMcT, at Sun Mar 13, 07:22:00 PM:

We tax true production, then use the money to fund unproductive things.

Having gone through the process of leaving and re-entering the US mainland last week, I filled out detailed forms twice, had my luggage x-rayed by both the TSA and the USDA (neither of which have a record of "producing" any security or apprehending any criminals)and the whole process added HOURS to my travel time, making me less likely to want to do it again.

That's just a microcosm.

Magnify that by trillions, sprinkle in some union dues, lobbyists and dozens of other vast agencies which basically do nothing...and what do you have.

Chaos and debt.  

By Blogger Stephen, at Sun Mar 13, 11:41:00 PM:

Isn't it obvious that we need to foster an economic climate favorable to business? If the emphasis is on reducing government spending and regulation, jobs will increase. We need a situation where plenty of jobs are available in order to have entitlement reform.  

By Anonymous Anonymous, at Mon Mar 14, 10:54:00 AM:

It is hard to imagine Rush or Hannity as producers just because you produce wealth does not make you a producer. There are plenty of CEOs that fall into this category. These two have power; they have the power of persuasion and therefor money flows their direction. Put power back into the hands of people who make things and make things work and this country will turn around.  

By Blogger TigerHawk, at Mon Mar 14, 11:51:00 AM:

I think that any widely followed entertainer is a producer, and Rush and Hannity are definitely entertainers.  

By Anonymous daniel noe, at Mon Mar 14, 04:56:00 PM:

There is too much math in here for anybody I know to understand.  

By Blogger JPMcT, at Tue Mar 15, 12:22:00 AM:

Came back to check on my posts and they are all gone - even though I refreshed the page and screened them when I posted!!!

What gives??? Have I been banned?  

By Blogger JPMcT, at Tue Mar 15, 12:32:00 AM:

Ignore...test post... I changed my Google password and now all my posts have disappeared...very strange.  

By Anonymous Bird of Paradise, at Sat Mar 26, 11:13:00 AM:

Big brother out of our lives and out of america entirly and that means evicting the wretched UN and having the UN facility raized and the area turned into a bird refudge without the turkeys from WASHINGTON D.C.  

Post a Comment

This page is powered by Blogger. Isn't yours?