links for 2007-02-25

25-Feb-07

links for 2007-02-16

16-Feb-07

links for 2007-02-11

11-Feb-07

links for 2007-02-10

10-Feb-07

links for 2007-02-09

09-Feb-07

links for 2007-02-08

08-Feb-07

links for 2007-02-07

07-Feb-07

The morality of inequality

06-Feb-07

I’ve had a go at Tim for claiming that world inequality is falling in spite of evidence that it isn’t, while PGL points out that Tim is using a radically oversimplified model of international trade. But let’s assume for a second that the theoretical and factual flaws in Tim’s argument do not exist and that he is right to say that poverty is falling fast in poor countries, that inequality is rising in rich countries as the rich get richer and the rest either stagnate or get poorer, and that the single force causing all this is ‘globalization’ (undefined), a natural and entirely ungovernable process.

Tim’s conclusion from all this is to proclaim his crushing triumph over Leftists everywhere, because if they oppose globalization due to its effect on inequality they must also oppose lifting untold billions out of poverty. They must embrace either inequality (and higher relative poverty) or hypocrisy. This is all finely entitled “The Morality of Rising Inequality”.

Tim might describe this kind of shift, wrongly, as a Pareto improvement, but it isn’t. It’s a win-lose-win situation for the rich-country rich, rich-country lower classes and 3rd world poor respectively. And that’s what creates the complication, because the fact is that globalization is not a completely intractable process: the free movement of goods, services and people can quite clearly be reduced or blocked completely. And in democratic societies the decision effectively lies with the losers in Tim’s scenario, since they outnumber the relevant group of winners. Well, turkeys don’t vote for Christmas, and as much as Tim thinks the plebs should sacrifice their futures for the benefits of their plutocrat compatriots and the distant destitute, each individual is understandably reluctant to do so, because - I think I’ve read this somewhere before - incentives matter*.

This is one reason why we do not have completely free movement of goods, services and people across borders. Left alone, it hurts too many people, even as it benefits others. Simplifying greatly, there are two potential responses to ‘globalization’ in this general framework (in reality there tends to be a mix):

  • One is to erect barriers, which effectively produces a win-win-lose situation, since rich-country capitalists continue doing fine, the rich-country workers keep their jobs and the 3rd-world poor don’t get access to rich-country markets.
  • The other, which I think is probably preferable, is to lower barriers but distribute enough of the gains accruing to the rich countries from the winners to the ‘losers’ that they no longer lose, producing, finally, a win-win-win situation.

Of course, the latter process already happens to some degree in most rich countries: the brute force of the market producers winners and losers, and the gains are redistributed to some degree to soften the blow and prevent bloody revolution. What many free-marketeers don’t seem to appreciate is that trying to crank up the degree of exposure and thereby creating more underlying inequality and insecurity will simply increase the demand for redistribution. Experience tells us that the short-sighted or simply greedy rich and their cheerleaders will probably do their very best to fight this, but they run the risk of provoking an even greater backlash against free markets. Ultimately, if they want those free markets, they have to embrace ever-greater redistribution. As Tim might ask, isn’t that a price worth paying?

*And so does people’s sense of justice, which may be offended by getting progressively less for the same amount of work while others get more.

links for 2007-02-06

06-Feb-07

links for 2007-02-05

05-Feb-07

The reality-based Samizdatista: An endangered species

04-Feb-07

Johnathan Pearce, possibly the last reality-based Samizdatista, tries vainly to explain to his colleagues and readers that environmentalism is not actually a vast leftist conspiracy:

The fact may be that the planet is genuinely getting warmer and that human activity has helped to cause that. Pollution of the air, seas and rivers is a problem for someone who is polluted. The destruction of ancient woodlands and the loss of flora and fauna is bad.

If this seems to you like stating the blindingly obvious, that is because you are not used to posts like this, which see a proposal that we educate children about climate change as the slippery slope to a Soviet-style police state . This illustrates what Jonathan is up against, and why I think he cannot win: the implications of admitting the reality of environmental problems have driven Samizdatistas (like many other free-marketeers) crazy with fear and paranoia, and they have taken refuge, ironically enough for “a blog for people with a critically rational individualist perspective”, in relativism, groupthink, and a heartfelt attachment to the doctrine of individual irresponsibility. The tragedy of it is that a pragmatic rather than a fundamentalist belief in the power and importance of markets is not just compatible with but some would say essential for an environmentalist perspective. But as their regular hate-filled attacks on Muslims suggest, fundamentalism is taking over Samizdata HQ.

links for 2007-02-04

04-Feb-07

links for 2007-02-01

01-Feb-07