4 ms·

Capitalism needs a welfare state to survive

37 points by rblion 8y ago

pasabagi 8y ago
It's hard to say if the article is tautological, or if there's a fundamental (and common) confusion here about what the state is in relation to capitalism. The modern state co-evolved with capitalism, and as a result, it's institutions are generally what capitalism needs to survive and prosper. The point about a welfare state is not really whether or not one is necessary for capitalism; the point is more that it is necessary for a specific type of capitalism. For instance, Toyota wouldn't work without a welfare state, because you need the kind of social stability a welfare state creates to preserve and shepherd a really skilled workforce. Ford, on the other hand, neither needs nor desires a particularly skilled workforce, but rather leans more heavily on intense capital investment (automation) - so an expanded welfare state, necessitating higher taxes, is a net loss for Ford, since they aren't all that interested in stability, but they are interested in low taxes. Making arguments about whether or not people like or support free markets is kind of missing the point. The point is, certain business models are predicated on certain forms of social organization. That's why Google is based in Silicon Valley, not in Shanghai, and why Foxconn is in China, not Japan.
- zozbot123 8y ago
  > The modern state co-evolved with capitalism, and as a result, it's institutions are generally what capitalism needs to survive and prosper. This is either tautological or empirically wrong, depending on what exactly is meant by "the modern state". In many ways, the problem with our current welfare states stems from the fact that they evolved under the material constraints of mid-20th-c. capitalism, when, for example, even the unskilled could easily find lucrative manufacturing jobs, and a welfare state simply had to fill in a limited amount of income gaps resulting from unemployment (generally due to short-term business crises), medical conditions, retirement and the like. Back in the mid-20th century, a baseline UBI wouldn't have made much sense, for example. The situation today is vastly different, since incomes are skill-biased to an extreme extent. Welfare states should be reformed to provide a baseline subsidy even to those who are currently working (assuming a low income, of course), while at the same time leaving them with the right incentives to improve their skills, productivity and income, perhaps in unconventional ways such as "bootcamps", MOOCs or "gig" work, that governments can't easily track or manage. Something like UBI, or Milton Friedman's proposed NIT, would seem to be highly appropriate.
ralusek 8y ago
Even pretty staunch libertarians are willing to entertain the value of the state when it comes to the transition into post-scarcity markets, and even this transition into markets that net diminishing value from many human endeavors (as we are already seeing). I just think that most libertarian types, myself included, don't want that to mean an overbearing bureaucratic system that necessarily creates perverse incentives and rations resources along politically contentious dimensions. Let us keep our markets, just help balance them. Universal basic income to keep the bottom in check, anti-monopoly, anti-collusion to keep the top in check, and then please fuck off. No affordable housing, no welfare, no social security, no food stamps, no shelters. Just give everyone cash and fuck off. If they want to create an authoritarian sub-state, or sibling-state, for the people that just cannot take care of themselves, despite all the necessary resources literally being deposited in their bank accounts, so be it, but don't rope the rest of functional society into the moral authoritarian nightmare we're currently already sinking into.
- Hear_hear 8y ago
  Hear, hear.
- harimau777 8y ago
  What checks would be in place to insure that the UBI was sufficient to substitute for eliminating affordable housing, social security, and food stamps?
  - dragonwriter 8y ago
    UBI shouldn't replace Social Security, since SS is not a means-tested benefit program.
- aNoob7000 8y ago
  The problem I see with everything you said is that people are going to vote in their best interest. No one is going to vote for a system that if you can't cut it because of a disability, health problem, or just plain life circumstance then you are basically screwed.
dinkudunk 8y ago
Social-Democracy is objectively the moderate wing of fascism. There is no ground for assuming that the fighting organisation of the bourgeoisie can achieve decisive successes in battles, or in governing the country, without the active support of Social-Democracy… These organisations do not negate, but supplement each other. They are not antipodes, they are twins.
dr_dshiv 8y ago
I am troubled by the lack of rational discussion of "capitalism" and "socialism" in the society today. Partially, this comes from the complete failure of modern academic philosophy to make cultural contributions. Part of it is from the weakness of a two party system that both seem to advocate for necessary and insufficient social functions. The terms capitalism and socialism, on their own, are virtually meaningless, being shorthand for any number of specific policies. For instance: Are monolopolies a failure of capitalism or an inevitable outcome? Is capitalism stronger with or without monopolies? On the socialist side, is social ownership of the means of production necessary for maximizing the distribution of goods? Or are free markets and profit motives appropriate strategies for promoting social value? Instead, you have the wall street journal treating socialism like idiocy and millennials treating capitalism as an obvious evil. This is rather practical philosophy... So I'm disappointed things aren't further developed in our polical discourse.
- darepublic 8y ago
  Unfortunately people in general are not interested in discourse, they want convenience and novelty.
  - yyyymmddhhmmss 8y ago
    This is, of course, not a problem with “people”, but it is a problem with people in our current capitalist society. Capitalism inspires culture. The abstraction Marx provided for this is the base/superstructure spiral. It is simple and, well, abstract, but it is abstract to a degree that it remains applicable through the ages and more detailed conceptions map onto it, like critical theory and the like. Even post-structural critique really fail to counter Marx on this. I think Frederic Jameson succinctly described the experience of spiraling inevitabilities to result from capitalist/commercial culture with this phrase: All that is solid melts into air.
- deleted 8y ago
  [deleted]
sunstone 8y ago
There are few topics that provide a better intellectual Rorschach test than the economy. Communism is the most appealing if only because it's the natural system of families and of hunter gatherers. Sadly, the 20th century emphatically demonstrated that this system doesn't scale into anything other than a complete disaster. On the other hand, capitalism is brutally horrible. But it's one saving grace is that it does scale. You can run a 2 billion person economy on it and things will work out overall and through time. That is, if you overlook the long time constant, positive feedback loop of the concentration of capital. Eventually just a few guys own all the stuff which is sub optimal. Raw capitalism guarantees winners and losers, and a whole spectrum of outcomes in between. This can be fixed up a bit by first, having government regulation of clear market failure zones, like food, construction and finance etc. And second, having the government collect a reasonable percentage off the top of the economy to subsidize those being squished to death at the bottom. Scandinavia does this best. Sure, they're not perfect, there is no actual perfect solution. The result is an elephant of a system that few people can view in its entirety but most people think they can. Given such a messy, devisive, inscrutable system you have to believe there must be a better way. But there's probably not.
Proven 8y ago
Unfortunately, The Economist has metamorphosed into The Globalist Statist. The article is junk and confuses fascism and socialism with capitalism. > Everyone needs enough to live on. Everyone needs a lot of things. That does not ENTITLE them to any of those things. Also, please note the qualifier "to live on"; how much of what exactly that is should presumably be decided by central planners, just so that experts (ie The Economist's readership) can hold onto their lucrative positions, or else we would end up with communism, where everyone would simply take a different amount of resources according to their needs. People interested in economics may proceed to http://mises.org http://mises.org, there you may actually learn something genuinely good and useful.

37 points by rblion 8y ago

It's hard to say if the article is tautological, or if there's a fundamental (and common) confusion here about what the state is in relation to capitalism. The modern state co-evolved with capitalism, and as a result, it's institutions are generally what capitalism needs to survive and prosper. The point about a welfare state is not really whether or not one is necessary for capitalism; the point is more that it is necessary for a specific type of capitalism. For instance, Toyota wouldn't work without a welfare state, because you need the kind of social stability a welfare state creates to preserve and shepherd a really skilled workforce. Ford, on the other hand, neither needs nor desires a particularly skilled workforce, but rather leans more heavily on intense capital investment (automation) - so an expanded welfare state, necessitating higher taxes, is a net loss for Ford, since they aren't all that interested in stability, but they are interested in low taxes. Making arguments about whether or not people like or support free markets is kind of missing the point. The point is, certain business models are predicated on certain forms of social organization. That's why Google is based in Silicon Valley, not in Shanghai, and why Foxconn is in China, not Japan.

zozbot123 8y ago
> The modern state co-evolved with capitalism, and as a result, it's institutions are generally what capitalism needs to survive and prosper. This is either tautological or empirically wrong, depending on what exactly is meant by "the modern state". In many ways, the problem with our current welfare states stems from the fact that they evolved under the material constraints of mid-20th-c. capitalism, when, for example, even the unskilled could easily find lucrative manufacturing jobs, and a welfare state simply had to fill in a limited amount of income gaps resulting from unemployment (generally due to short-term business crises), medical conditions, retirement and the like. Back in the mid-20th century, a baseline UBI wouldn't have made much sense, for example. The situation today is vastly different, since incomes are skill-biased to an extreme extent. Welfare states should be reformed to provide a baseline subsidy even to those who are currently working (assuming a low income, of course), while at the same time leaving them with the right incentives to improve their skills, productivity and income, perhaps in unconventional ways such as "bootcamps", MOOCs or "gig" work, that governments can't easily track or manage. Something like UBI, or Milton Friedman's proposed NIT, would seem to be highly appropriate.

ralusek 8y ago

Even pretty staunch libertarians are willing to entertain the value of the state when it comes to the transition into post-scarcity markets, and even this transition into markets that net diminishing value from many human endeavors (as we are already seeing). I just think that most libertarian types, myself included, don't want that to mean an overbearing bureaucratic system that necessarily creates perverse incentives and rations resources along politically contentious dimensions. Let us keep our markets, just help balance them. Universal basic income to keep the bottom in check, anti-monopoly, anti-collusion to keep the top in check, and then please fuck off. No affordable housing, no welfare, no social security, no food stamps, no shelters. Just give everyone cash and fuck off. If they want to create an authoritarian sub-state, or sibling-state, for the people that just cannot take care of themselves, despite all the necessary resources literally being deposited in their bank accounts, so be it, but don't rope the rest of functional society into the moral authoritarian nightmare we're currently already sinking into.

Hear_hear 8y ago
Hear, hear.
harimau777 8y ago
What checks would be in place to insure that the UBI was sufficient to substitute for eliminating affordable housing, social security, and food stamps?
- dragonwriter 8y ago
  UBI shouldn't replace Social Security, since SS is not a means-tested benefit program.
aNoob7000 8y ago
The problem I see with everything you said is that people are going to vote in their best interest. No one is going to vote for a system that if you can't cut it because of a disability, health problem, or just plain life circumstance then you are basically screwed.

dinkudunk 8y ago

Social-Democracy is objectively the moderate wing of fascism. There is no ground for assuming that the fighting organisation of the bourgeoisie can achieve decisive successes in battles, or in governing the country, without the active support of Social-Democracy… These organisations do not negate, but supplement each other. They are not antipodes, they are twins.

dr_dshiv 8y ago

I am troubled by the lack of rational discussion of "capitalism" and "socialism" in the society today. Partially, this comes from the complete failure of modern academic philosophy to make cultural contributions. Part of it is from the weakness of a two party system that both seem to advocate for necessary and insufficient social functions. The terms capitalism and socialism, on their own, are virtually meaningless, being shorthand for any number of specific policies. For instance: Are monolopolies a failure of capitalism or an inevitable outcome? Is capitalism stronger with or without monopolies? On the socialist side, is social ownership of the means of production necessary for maximizing the distribution of goods? Or are free markets and profit motives appropriate strategies for promoting social value? Instead, you have the wall street journal treating socialism like idiocy and millennials treating capitalism as an obvious evil. This is rather practical philosophy... So I'm disappointed things aren't further developed in our polical discourse.

darepublic 8y ago
Unfortunately people in general are not interested in discourse, they want convenience and novelty.
- yyyymmddhhmmss 8y ago
  This is, of course, not a problem with “people”, but it is a problem with people in our current capitalist society. Capitalism inspires culture. The abstraction Marx provided for this is the base/superstructure spiral. It is simple and, well, abstract, but it is abstract to a degree that it remains applicable through the ages and more detailed conceptions map onto it, like critical theory and the like. Even post-structural critique really fail to counter Marx on this. I think Frederic Jameson succinctly described the experience of spiraling inevitabilities to result from capitalist/commercial culture with this phrase: All that is solid melts into air.
deleted 8y ago
[deleted]

sunstone 8y ago

There are few topics that provide a better intellectual Rorschach test than the economy. Communism is the most appealing if only because it's the natural system of families and of hunter gatherers. Sadly, the 20th century emphatically demonstrated that this system doesn't scale into anything other than a complete disaster. On the other hand, capitalism is brutally horrible. But it's one saving grace is that it does scale. You can run a 2 billion person economy on it and things will work out overall and through time. That is, if you overlook the long time constant, positive feedback loop of the concentration of capital. Eventually just a few guys own all the stuff which is sub optimal. Raw capitalism guarantees winners and losers, and a whole spectrum of outcomes in between. This can be fixed up a bit by first, having government regulation of clear market failure zones, like food, construction and finance etc. And second, having the government collect a reasonable percentage off the top of the economy to subsidize those being squished to death at the bottom. Scandinavia does this best. Sure, they're not perfect, there is no actual perfect solution. The result is an elephant of a system that few people can view in its entirety but most people think they can. Given such a messy, devisive, inscrutable system you have to believe there must be a better way. But there's probably not.

Proven 8y ago

Unfortunately, The Economist has metamorphosed into The Globalist Statist. The article is junk and confuses fascism and socialism with capitalism. > Everyone needs enough to live on. Everyone needs a lot of things. That does not ENTITLE them to any of those things. Also, please note the qualifier "to live on"; how much of what exactly that is should presumably be decided by central planners, just so that experts (ie The Economist's readership) can hold onto their lucrative positions, or else we would end up with communism, where everyone would simply take a different amount of resources according to their needs. People interested in economics may proceed to http://mises.org http://mises.org, there you may actually learn something genuinely good and useful.