Wednesday, 21 March 2018

What economic and government systems do you think function best?

Last week one of my Tumblr followers asked me the above question. I wrote down as many things as I could think of in the time I had, which wasn’t everything. I started putting down justifying arguments for each point, but found that this was making it far too long for a Tumblr post. So I’m repeating my answer here, with a few more points and some argumentation to back it up and hopefully a bit more coherence (but you be the judge of that).

I try to keep my thinking grounded in empirical evidence, but I only have so much time for doing research and what I do find is inevitably biased by being filtered through my own perspective, which is not neutral but was formed through many years of political involvement. I began my political life in 1996, at the age of 18, in a protest against Otago University raising tuition fees. It was a big protest, because at that point New Zealand tertiary institutions had only been charging tuition for a few years and it had caught a lot of people by surprise. So there were a lot of dedicated protesters involved. Many of them were Marxists, so I started off as a kind of Marxist camp follower leaning towards anarchism of sorts. I still feel loyalty to this crowd, and there are some social values that I still think Marxism captures better than most other politics. But looking at the empirical evidence I am unable to endorse the prototypical Marxist plan for achieving those values.

In particular, countries that remodel themselves from the ground up with armed Marxist revolutions always end up as repressive, poverty-stricken dictatorships. I know of no exceptions. Some are worse than others – if I had to choose, I’d much rather live under Fidel Castro or Muammar Gaddafi than Pol Pot – but none of them have ever produced the communist paradise, or even the socialist interim state, that Marx envisioned. In a few places in the world you can see a Marxist regime and a liberal regime side by side, with the same geopolitical and environmental conditions, and compare their socioeconomic outcomes; the liberals (West Germany, South Korea, Botswana) always do better than the Marxists (East Germany, North Korea, Zimbabwe). And really, Marx should have known better, given that the prime real-life event he used to exemplify his theories was the French Revolution, which had exactly the same effect in installing the Napoleonic Empire.

The Koreas from space at night

Empirically, the systems which function best, in the sense of facilitating human life, health, knowledge, freedom, prosperity, and equality, are those known as “mixed economies”, like those of Scandinavia and Japan and formerly New Zealand. These combine open but well-regulated markets with stable democratic government, progressive tax systems, state-owned infrastructure, and high public expenditure on social welfare, health, and education. But of course there are still a great many areas in which I believe progress could be made. And here they are.

  • Empowerment of women. I hope I don’t need to explain how this is a matter of justice in and of itself. It’s also one of the prerequisites of the demographic transition whereby nearly all married couples in modern societies have zero to three children instead of six to ten, which is why civilization hasn’t yet been destroyed by a population explosion. Most mixed economies already have that under control, of course. But further, when women’s status and success is determined by how good they are at appeasing and/or impressing men, that creates a toxic dynamic which fosters sexual misconduct. In such an environment, where high status is a man’s ticket to sexual indulgence, it’s the aggressive, arrogant, and rapacious men who win leadership contests – and then everybody is worse off. Therefore, every society needs to implement zero tolerance for sexist discrimination, and to name and shame sexual predators. If other factors besides discrimination and sexual predation are at work, then those factors too need to be identified and counteracted.
  • As a corollary of the above, birth control including abortion must be made freely available and readily accessible. (I have a whole post devoted to why abortion isn’t murder; if you disagree, please argue with me there rather than here.) Besides being another prerequisite for the demographic transition, birth control is central to women’s liberation, because biology has made sexual reproduction in placental mammals such as humans a highly asymmetric process where the pregnant partner bears a massively greater portion of the physical costs than the other, and most women belong to the pregnancy-prone demographic for a large part of their lifespan. What for cisgender men is a science fiction or horror scenario – the prospect of a foreign organism commandeering their organs for sustenance – for cisgender women is something they have to plan against every time they interact with a man who might lust for them. This fundamental asymmetry is key to the gender power imbalance already mentioned. Anything a society can do to alleviate it, it should.
  • As another corollary, each society should accept, normalize, and celebrate the full human diversity of gender and sexuality. Here we’re starting to get into cultural rather than organizational matters – what meanings people read in things – which economics and government can influence only indirectly. Laws formalizing gay marriage or banning homophobic and transphobic discrimination won’t erase bigoted attitudes in the population. But they will create an environment in which queer people feel safer being visible in public, and queer people being visible in public will gradually chip away at bigoted attitudes in the population. Again, this is a goal primarily worth pursuing for its own sake, with the side benefit that if people accept that there are multiple different ways sexuality and gender can work, they’re unlikely to feel that one particular pattern (such as men sexually preying upon women) is just the way things have to be.
  • While we’re on the subject of discrimination, society must work towards eliminating racism. That means laws against discrimination on the basis of race, ethnicity, and culture. It means a zero tolerance policy for violence that is racially motivated. But there’s more to it than that, because racial biases get perpetuated in vicious circles within the socioeconomic system. For instance, African Americans find it harder to get bank loans because they’re higher credit risks because they find it harder to get loans. Such sticking-points in the system need to be identified and, wherever possible, sanded off by policy. Racist cultural attitudes are harder to target; it’s easy enough to pass a law banning “hate speech”, but it’s unclear whether such laws fix the problem in the long run or merely drive racism under the surface to fester. But certainly policy can encourage positive representations of people of colour and of minority ethnicities, which can help insofar as stereotypes are a product of the human brain heuristic that says “Whatever I see a lot of is the way things are.”
  • For broadly similar reasons, society should normalize disability accommodations. In research and development policy, new technologies for overcoming impairments should be a high priority. And I say that in full recognition that such technologies will eventually eliminate my job (if wrongheaded University practices don’t get there first). Once again, this isn’t just about being nice to disabled people. People who can’t participate fully in society can’t contribute fully to the economy. Accommodations make us more useful, not more of a “burden”. But again there are sticking-points in the system to contend with, and cultural prejudices to be overcome.
  • Actually, a great deal of marginalization is driven by the idea that those people – whether the point of difference is culture, religion, sexuality, gender identity, or mental health – are “funny” or “just weird”, and therefore it’s OK to laugh at them, call them out in the street, publish embarrassing photos of them, mock them for comedy purposes, etc., etc., etc. The laughter, you’ll find, is generally driven by discomfort, whether in the form of disgust or fear. They’re not bad people but there’s too many of them. Do they have to get in everyone’s faces like that? Can’t they just be normal? Can’t they at least pretend to be normal instead of confronting us with our discomfort? It would solve an awful lot of problems, eventually, if we could stop stigmatizing people who are harmlessly “weird” and reserve our disapproval for behaviour that is actually harmful or dangerous. But we’re getting a bit removed from what a political and economic system can do. I suppose public awareness campaigns couldn’t hurt.
  • Most modern societies that I can think of could use a good dose of body positivity – the above point repeated but for deviant bodies instead of behaviour. We do need to do something about obesity, and I’ll touch on that lower down, but shaming people for being fat has been abundantly shown not to help. And fat-shaming isn’t driven by a concern for health anyway; that’s just a cover for hatred. Then there’s sexual objectification, which brings us back to my opening points about gender and sexuality. A living human body is first and foremost a living human being, neither an ornament to be stared at nor an obscenity to be covered up, as I’ve said before. I know my recommendation here is going to be a step too far for many readers, but for the record, it is: legalize and normalize non-sexual public nudity.
  • While we’re at it, it might help to legalize recreational drugs, then subject them to the same safety regulations and consumer controls as all other products in the market. This seems to be working pretty well so far in Portugal. There should probably be a graded system of health controls based on how habit-forming a given substance is, and for highly addictive ones like heroin, cocaine, methamphetamine, or tobacco, publicly funded programmes to help wean people off them. At present in most countries the legal status of a substance is based not on toxicity or addictiveness but on knee-jerk prejudices. In New Zealand, alcohol, tobacco, and even opiates are easier to get legally than cannabis. Your doctor can prescribe codeine, and the hospital has morphine. But a chronic pain sufferer who could be helped by cannabis has to grit and bear it, or risk arrest. Our new Prime Minister promised to change this. I do appreciate it takes time.
  • Speaking of addictive toxic substances, we need to put some kind of control on sugar and maybe saturated fats as well. A tax would probably be the simplest from the consumer’s point of view, as the information about the healthiness of the food would be incorporated in the price. But this has the obvious drawback that it would start as a price hike to the cheapest foods, which would hit poor people the hardest. I think there would be compensating benefits, such as better oral health and less obesity-related disease, but those would take time to come through. Here in New Zealand, actually, the solution is pretty simple, and I’ve suggested it before: take off the 15% Goods & Services Tax, currently levied on everything sold by any business larger than a garage sale, from foods without sugar. That way we make life easier for those who are struggling while at the same time implementing a major measure on that keystone principle of public health policy, “Make the Healthy Choice the Easy Choice”.
  • On the same principle, let’s have carbon taxes that actually work. We had some, briefly, in 2008, and then the National Party got elected and changed the rules so that they didn’t actually accomplish anything. While we wait for the world’s governments to get their act together, disinvesting from polluting industries should at least send some kind of signal about what sort of behaviour is acceptable in the 21st century. The motto needs to become “Make the Sustainable Choice the Easy Choice” rather than what it seems to be at present, which is “Make the Sustainable Choice the Ostentatiously Virtuous Choice”.
  • For environmental hazards of a less global scale than climate change, it might be worth trying out environmental unions to hold particular assets, especially forests and rivers, in trust. Any enterprise which wanted to exploit or pollute the asset would have to pay the trust the value of the damage done; the trust would deploy that money for clean-up and repair. This would (if I’m right) have two advantages over running all environmental protection measures through the state: the unions would be more responsive to local changes in the environmental asset, and less vulnerable to being abolished with the stroke of a pen at the whim of a new government. In places where indigenous organizations already play an advisory role in environmental consultation, as Māori iwi do in New Zealand, they should be the ones holding the purse-strings of the trusts.
  • And since we’ve mentioned unions, let’s have trade union engagement in social welfare. I think not having had this in the 1980s is the single biggest reason why New Zealand is a former, rather than a current, mixed economy. The Scandinavian countries all had it, and their unions stayed strong when everybody else’s imploded – a thing that happened just after a whole lot of young workers looked around and said “What has the union ever done for me?” On the other side, I’ve suffered through the indignities of getting the unemployment benefit in a neoliberal country, and I’m convinced that organizations chiefly concerned for workers’ welfare would manage it hundreds of times better than ones chiefly concerned with saving taxpayer money and making the Government’s unemployment statistics look good. Unions have connections full of information about where jobs are scarce and where labour is in demand. If the beneficiary automatically became a member of whichever union got them a job, that’s a win for both parties.
  • Whoever ends up in charge of connecting workers with work, they need to prioritize “Which job is best for this person?” over “Which person is best for this job?” I’m sure to conservatives that will sound like bleeding-heart sentiment that could never work in the real world where competence makes a difference. In which case they need to go back to their economics textbooks, because this is simply the logic of what they call “comparative advantage” applied on an individual instead of an international scale. The maths is the same whether it’s countries or people, guys.
  • On the other end of the equation, I believe business firms need to become democratic. Presently most large business organizations are run as monarchies or satrapies, where highly centralized leadership hand-picks its own successors without input from the rest of the organization. These structures should give way to democratic worker co-operatives with strong representation from consumer and environmental advocacy groups. Democracies function better than monarchies, and businesses function better when they let workers self-organize and cooperate. This needn’t interfere with them functioning externally as businesses selling goods and services in the open market. And if the workers were all shareholders in the business, then come budget-setting time, accounting could tell them “We can raise your wages now, or we can raise your share dividends next year – over to you.”
  • Tertiary education should be free. I’ve argued this one before too. Study is a full-time job, and knowledge is a public good. It’s not as radical a change as it sounds; the government would still pay the educational institution at the time of study, and the student would still pay the government after graduation. The question is how much the student’s payment to the government should be conceived as a tax, and how much as a loan repayment. I believe the student’s payment to the government should be proportional to the benefit the student receives in terms of the boost to their income, and that it should not affect their credit rating. Which is as much as to say, it should be 100% tax and 0% loan repayment.
  • The internet should be a public asset like other infrastructure. Reverse its financial flow so that ISPs buy content from content creators rather than selling hosting space to content creators. Anyone could still post anything to the internet, but if some piece of content got a lot of hits then the uploader’s ISP would start crediting their account and maybe eventually send a paycheque to their bank. Of course you’d need checks against people downloading and reuploading other people’s content, but that’s within reach of present technology. You could then scrap most other intellectual property controls – HBO wouldn’t have to worry about people downloading Game of Thrones and not paying them any money, because people downloading Game of Thrones would be paying them money. Which would cut off probably the biggest avenue for malware, that being illegal torrenting services that people can’t seek legal remedies against without getting in trouble themselves.
  • Universal basic income or some equivalent. Nobody should starve just because they fell through the cracks in the system. It would be good to have everyone employed, but as technology improves various jobs will continue to become obsolete, and not everyone can re-train to be a programmer. UBI is being tried in a few places and it seems to be working.

And then there are all the things I don’t have good ideas about, like how to fix the societal autoimmune disease that is the present state of criminal justice while still, you know, deterring crime; or how to manage international trade so that it enriches both poor people in poor countries (as globalism does and the old system did not) and poor people in rich countries (as the old system did and globalism does not); or how to get the mineral nutrients we flush into the ocean back into farm soils without depleting island ecosystems. And of course it’s entirely possible that any or all of my suggestions are barking up the wrong tree completely. What do you think?

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