Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Thursday, December 3, 2009

The politics of politicicking the politician

An old essay of mine examining the political mine, written in a time when I was a good deal more enthusiastic about politics and a considerable amount more Libertarian. Back in that long ago less than 5 years ago (this was almost certainly written some point in my college career).

On Economic and Civil Liberties
Politics is never a completely honest game. It is full of hypocrisy, back-stabbing, and corruption. Yet the actions that politicians take need some justification to the voter. For some the justification is that the politicians advance their interests. Yet most people cannot sleep at night thinking simply in those terms, and the more philosophical people, who are often the most influential in political thought, find this even more difficult. Many people want some reasoning behind the policies of their representatives, senators, and even president. Yet there is a common problem in developing a reasoning for the policies of mainstream politicians. In political thought, a large number of policy issues come down to matters of economic and civil liberties. Most American liberals say they favor limiting economic liberties and enhancing civil liberties; American conservatives, at least publicly, often favor limits on civil liberties, but not economic liberties. There seems to be a contradiction between favoring some liberties but not others. When one side wishes to attack another they often bring up this contradiction, ignoring the fact that they share it. This makes it an obstacle to real political discussion between the two. Yet this contradiction can be resolved in two ways.

First, the contradiction ceases to exist when civil liberties and economic liberties are looked at as fundamentally different. Civil liberties can be looked at as more abstract, since economic liberties affect everyday matters of buying and selling, while civil liberties affect those engaged in the public world of advocacy, politics, and media the most. Economic matters affect the pocket book, which is tangible, while civil liberties are based on less tangible matters like freedom of thought. Economic matters can be more immediately important, a change in the economy can bring a person to poverty or riches, but civil matters affect the culture of a society which takes time to change. Yet these distinctions are somewhat murky. The culture of society affected by civil liberties is a very large part of everyone's life, and sometimes censorship and other limits to civil liberties can have an immediate and direct effect, like the banning of a TV character. Also, economic matters can be seen as impersonal, with large forces of billions of people buying and selling determining the flow of the economy. And economic matters can take time to cause change, like taxes that change the competitiveness of an industry, causing it to slowly fall while another rises. Another problem is that economic matters affect civil life, a fall in the economy might make people more likely to protest, and civil matters affect economic life, such as a protest aimed against a company's civil rights abuses. But often a line is drawn between the work sphere, and the area of life that covers personal and community matters. If one draws this lines economic liberties and civil liberties are only alike in the word liberties.

There is another way the contradiction between favoring some liberties and not others can be resolved. If the conservative and liberal positions on these matters are looked at as part of an attempt to shape society, there is no contradiction. Conservatives have often represented their policies as an attempt to make society strong, self-reliant, with traditional values. Their policies on civil liberties reflect this, they favor spending money to promote marriages, many want to limit pornography which they see as an insult to Christian values, they want to punish those with alternative lifestyles, that are seen as undermining traditional life. For them strength and self-reliance are part of this traditional American way of life. Thus freedom of the economy is promoting American values. Economic freedom forces people to be self-reliant and strong or face the consequences. Economic freedom also leaves only the family and the community as safety nets, which are often filled with traditional values and can instill that in those that need their help. Liberals on the other hand choose to emphasize the virtues of tolerance, being yourself, and helping the poor. Civil freedom encourages this, because it puts the government as an example of tolerance and it gives freedom to be yourself in anyway you want to be. The economic limitations put government as an example for helping the poor. The government also gives people a safety net independent of family and community, encouraging them to break these traditional attachments and fallow their own path. Thus both civil and economic liberties become one more battlefield for the culture wars.

Many politicians undoubtedly think in both ways about civil and economic matters. Many will justify the matter with the direct effects of economic and civil policies. And likely some have not thought about or dealt with the contradiction. Another line of thought is to accept the contradiction and declare both liberals and conservatives wrong. That's my personal view. But it is important to think through the view of your opponents and assume that they have an intelligent reasoning behind their actions. This is because it is better to overestimate your opponents, and be more than ready in debating them, then to underestimate, and be caught speechless when they have thought through logic. Furthermore, this assumption that these people think and are thinking through their ideas adds to a better atmosphere for political debate. It creates an air of mutual respect, and in these partisan times, that is something that is badly needed.

Saturday, July 26, 2008

An Era of Extra-Ordinary Prosperity

So what to make of the current economic situation? What sense to take of it? Or what sense to take of it from looking at the times through a historical lens, since I imagine most readers will prefer my analysis, at least in part, because of my historical perspective rather than simply my sunny personality (although it is quite sunny).

First, let me recommend you to an excellent article that prompted me to write on this topic (and therefore certainly has some influence over the contents of this post), which has some fine points that I'll probably re-iterate to some extent. The Economist has a nice rundown of the situation in the article called "Working Man's Blues"

Now for my overview:

Well, as a historian who has studied a decent deal, although not a great deal, of material about the Great Depression, I can tell you this isn't the Great Depression. We don't have the majority of the country poor or going toward poverty, we have most of the country middle class, and some perhaps tilting toward lower middle class, with a rather small number in extreme poverty and an uncomfortably high, but not that high, a number in relative poverty. Most importantly we have not had any negative growth, thus technically we are not even in a recession (by the traditional definition, used in, for example Investor Words, a recession is two consecutive quarters of negative real GDP change).

No this is not a recession, and it is not as Paul Krugman claimed a return to the Guilded Age.

(even ignoring his arguments, he gets the periodization wrong, or at least without providing arguments sets up a different periodization than almost all major historians. The Guilded Age was roughly between the end or the faltering of the Reconstruction (around 1877 when federal troops left the South) and probably at most the assassination of McKinley (ie, the beginning of Teddy Roosevelt's term in 1901), it does not last into the 1920's as Krugman claims, and the Progressive Era is usually dated between around 1901 and around 1920, not starting in the late 1920's or early 1930's as Krugman implies.)

This is an economic downturn. We had something of a boom between say 2003-2007, not as much as say in the 1990's, where we had an extraordinary boom (one of the few eras where real median household income grew, although that measure, like most is questionable, especially given the number of poor immigrants that come to the US), and now there's a downturn. The size of this downturn is rather massive, compounded by problems in economies around the world, high oil and food prices, and the economy-distorting measures taken to reduce the last downturn in 2000 (such as Greenspan's massive intrest rate cutting.))

But that's just looking at it from a historical perspective, looking backwards many years, we can see that, you know what, even in a downturn, we are still at a level of wealth rarely seen in the life of mankind. That can be said for the world especially, but in the US we have the majority of the population with a degree of financial security, although they need to work and worry to keep it, which nowadays means the necessities are satisfied, health is alright, + (and this is actually very historically rare) we have machines and tools to make daily life easier + we have machines and tools to keep us entertained. Taking the long view from the past, that's pretty good, average man-wise.

(That's the tricky thing, because we have to remember, historically the middle class was not the average man. The average man used to be what was then called the working class, which would nowadays be considered the working poor (the current working class is more the middle class). I suppose the definition of the middle class for previous eras was financial security, having the necessities, and being able to aspire to more, or maybe it's just a semi-Marxist vision, those who are not dependent on the means of production of someone else, but who do not themselves own the means of production, perhaps, perhaps, perhaps)

Taking the view of the future though... things are a bit odd right now. Despite all the nations of the world being in essentially one global economy, each country seems to exist in a different world economically, in a way that has little to do with the economic realities of the country. But these oddities always have a bit of sense, and are generally rooted in a very specific past.

For example, why is the US so prosperous now relative to the world? Explaining fully its situation in the 19th century relative to Latin America might be a bit tough, but to a great deal it helped that the ethnic groups which did the discriminating, though the mix shifted, tended to always been a vast majority in the US, which has not been the case in much of Latin American history (the situation of the South as economically backward during this period partially backs this theory). But let's not go back that far, let's just look at the beginning of the 20th century it was on the higher end of the income scales, but similar to Britain, France, Germany, Denmark, Netherlands, Belgium, Argentina and perhaps a few other exceptional Latin American economies. However, it was not devastated by WWII, nor did it suffer from radical economic deviations, and moreover it didn't have to deal with imperialism, or major revolutions. That alone would give the US quite an edge over the rest of the world, whether it explains everything is question, but it explains a lot of the particular oddity of the massive US share of the global GDP.

Similar stories of exceptional luck history wise can be found scattered around the world. Yes, this luck was built on hard work, the US' low-revolution count was built on a strong belief in democracy in the political class and especially among some of the better of our leaders. But we got lucky with WWII, had Latin America gotten involved, as some Latin American countries wanted to, we might have been as devastated as Europe.

Yet historical luck is not a way to build a lasting prosperity. And despite whatever good qualities of the American people might have, we are not so exceptional as to have the economic fundamentals to maintain our privileged position in the world, and thus relative to the world we are sinking. I had hoped that it might be the case that the world might be catching up fast enough that in absolute terms we would still maintain our lifestyle for the immediate future, but that may be a bit uncertain. I suppose that's not surprising, after all, when the working class caught up to and merged with the middle class, the middle class did lose a lot of their old perks, such as even the lower middle class having servants.

But let me not be too gloomy. We might be destined to sink somewhat relative to the rest of the world until we reach a point reflecting our size, resources, skills and attributes, but that place is still pretty high in the world. Moreover, even if things might even be sinking in absolute terms, the future still holds the potential to raise us up with the rest of the world, even if perhaps at a slower speed. And then once a bit of the adjusting is done for the past, perhaps then we can grow naturally, with our long-term growth being reflective of the long-term economic trends of our nation. Until then...
twentit
But as I said things aren't so bad now, and while the future might have some roughness, it is unlikely to hold a new Great Depression any time soon (although I'd advise against any predictions going to infinity). The true reality that we are going to face though, is that economic moments, like all moments, pass, and the situations change, and control of the course of events will always allude us.

But that just means that history will always be surprising.

Wednesday, January 9, 2008

Economic growth and terrorism

Ok, I made a massive comment at the Becker-Posner Webpost and since it was session sized and I haven't talked of politics for a while, here's the comment.

It's based on a post by the Becker-Posner Webpost:

Here's the Becker part (it was the original post)

Here's the Posner part

I agree that grievances (not poverty) are at the core of terrorism, but the relationship between grievances and economic growth I think is complex and contradictory, ultimately I think economic growth and political freedom undermines terrorist impulses in the long term, but in the short term the effects are uncertain.

Take for example on result of economic growth that Becker noted, the reduction of the extended family. The reduction of the extended family is actually greater than Posner suggested because economic growth tends to increase migration as the ability to become mobile arises before a local job market capable of satisfying the population growth of local youth becomes possible (if it ever becomes possible as some areas are good for raising populations but bad for jobs (for example suburbs and cities)). When the young move away, extended families become weaker, they tend not to disappear as they did with migrants of earlier eras since the mobility allows people to go both ways, but still there's never the same grip to extended families as there were in previous years.

But the effect of the reduction of extended families is uncertain on terrorism. Families often provide the recruitment network for terrorists and supply safe grounds (notice the interplay of tribe loyalties and terrorist networks in Iraq). Family deaths also provide for motivations for terrorism and motivation for the support of terrorism or at least for the apathy to anti-terrorist efforts. Strong family ties also reduce individualism and increase the chances of someone taking up collective grievances.

But on the other hand, the lack of a strong family grip reduces the in-built ideologies of a society and opens the grounds for radical ideologies. Take for example Muslim youths in Britan who tend to be more radical than their immigrant parents. The reduction of family ties also sends youth searching out for authority figures and thus more likely to be taken by charismatic radicals.

Thus there is a mixed picture.

However, other effects of economic growth further complicate the picture. Economic growth tends to progress unevenly, either in terms of pure money or in terms of the power acquired by the government and its officials through economic growth. This tends to breed grievances based on people realizing how much better life could be and perceptions of unfairness.

However lack of economic growth also helps terrorism. To manage in the modern world, every country requires an intellectual class, and without sufficient economic growth this intellectual class is often idle or their partially educated children are idle and likely somewhat unemployed, and thus ripe for radicalism. Also, lack of economic growth tends to support the idea that the nation has fallen behind as a great power. People always like to feel like their part of a great power and economic growth makes people feel like if they are not part of a great power they are becoming part of one. Much of the discontent in the Muslim world is from the idea that the Muslim world has fallen behind the West and thus it must become a great power by any means necessarily.

However, ultimately, I think economic growth and political freedom tend to undermine the radical grievances that spawn terrorism by providing avenues for moderate grievances to be satisfied (unsatisfied moderate grievances have a tendency to breed radicalism, for example, the demands of early 19th century Russian radicals were largely moderate liberal ideas, but left unsatisfied they either reversed themselves into radical conservatism or they concluded that change required society overthrow so they turned to radicalism). Furthermore, economic growth tends to A. keep people busy by giving more jobs and more stuff to do, and B. allow more materialism to spread (materialism can spawn terrorism if unsatisfied, take for example gangs, but in an environment where society allows material improvement, materialists support stability because it protects their economic opportunity, take for example many businessmen in coastal China).

I could go on more, but I think it's not that economic growth has no effect on terrorism, but rather it has mixed effects, although ultimately it undermines terrorism. It's hard to prove such a claim though, since long term can be 100+ years, and historical examples may have key differences from the modern world, but if I were to try to prove it I would probably trace the historical amount of terrorism in currently rich countries in comparison to their historical economic growth (as a case study (which is not a conclusive proof by any means) take the United States, the US only achieved massively widespread economic growth in the '50's, the radical change in society and new intellectual class which often lacked opportunities or sense of belonging (especially amoung minorities) took to arms in the 60's achieving some minor support among lower classes, however over time this amount of terrorism died down, although there still are terrorists most of their demands are society related rather than economic related (cultural reform, inequality rather than poverty, ultra-nationalism, non-economic political issues (such as abortion))).

Sorry for the long comment, I got carried away.