Some Critiques of Political Viewpoints

I do believe most political positions gain the support they do because they speak to some truth, or at least a partial truth.  The problem comes from applying those truths to the wrong situations, trying to make grand sweeping statements, and (of course) our tendency to confuse our own self-interest with the public good.

So I did want to discuss some of the problems with common political positions, though I've kind of cycled through which ones and where to start.  One day it's the liberal side of things, the next it's the conservative.  (I used a rather general term here, because critiquing the Christian conservative movement is different from critiquing the Libertarian movement, as is critiquing other more liberal positions.)

I wanted to start with a hypothetical allegory:

Imagine a 10 yr old boy learning to cook.  He just loves sweets, and making brownies or cookies whenever he wants is appealing.  But, like most of us, he absolutely hates doing the dishes.  So after mixing up the batter, licking clean the beater, and scraping it all into a pan to bake, he decides to just throw away all the dirty dishes and buy new ones.

He can afford to do this, after all.  So those dirty dishes get thrown in the trash, and perhaps wind up in a landfill.  Or perhaps they get sent somewhere for recycling, and people sort through the trash and find a way to reuse these perfectly good mixing bowls, beaters, and spatulas.  Sure, they're dirty...and the bits of food left on them have started to mold.  But someone can take the time to clean them off and find a use for them.

Meanwhile, the boy is creating demand for new mixing bowls and beaters...since every time he decides to make a sweet he is buying new cookware.  (Granted, one boy by himself might not do that...but if enough other boys do the same, it would.)

You could argue that this is good for business - it makes money for the mixer, beater, and spatula factories.  It employs people to meet the demand.  It may even help employ people further down the supply chain, with whoever is sorting the trash and recovering useful bits.

Though, at the same time, the resources used to create those mixers, beaters and spatulas could perhaps be used to make something else.  And the people employed by that business could perhaps find jobs in a different industry.  The higher demand for mixers, beaters and spatulas could lead to a price increase that makes it harder for some families to buy them (they would, of course, wash their own dishes and reuse them.)  And the people at the other end, the ones who sort through waste to find useful products, could probably find a different industry as well.

And if you asked him to do the dishes (after years of throwing them away and buying new dishes instead) would throw a fit about how what you're demanding is bad for business.  He can't make as many brownies or cookies if he has to wash the dishes every time!!!  And what about the people who are employed making those dishes?

All of which may, superficially, be true.  And, on another level, is a lie.

At the end of the day, you still have a spoiled rich kid who doesn't want to clean up after himself.

(Btw, do take a look at what happens to some of our waste when we're done with it.)

Third - the Economy

I said before that I'm not an expert on the economy, and I'm not.  I don't want to make it sound like I'm completely ignorant, so I'll go into a little bit more detail on what I do and don't know.

I took an undergraduate course in macroeconomics, so I know a bit about GDP, GNP, the multiplier effect of the money supply, etc.  I also took a graduate course on public policy and economics, so I'm somewhat familiar with some of the debates regarding Keynesian economics and various other topics.  The reason why I suggest taking what I say with a grain of salt is that I follow various economists , read various articles, and realized that I don't have a good sense for how it all fits together.  In particular, I'd like to understand the relationship between finance and economics.  Public finance (sovereign wealth funds, municipal bonds), private finance, international debt, and the relationship between the recent financial crisis and the economy at large.  Plus foreign exchange, floating currencies, hedges, futures, derivatives, trade, etc.  It's interesting that mutual funds are actually one of the biggest investors, except it's made up of a lot of little investors (i.e. people's 401Ks and retirement money)...except since most of those investors don't really know what they're doing they basically empower the people running the mutual funds to be a major part of the economy. 

I follow various economists and read articles on these topics mostly because that's the only way of learning.  Well, okay, it'd be better to go back to school...but short of that, all I can do is read and read and keep on reading.  Eventually I'll start making connections, build sort of an internal map of the various relationships, and then I'd feel like I could come up with something more effective w/regards to economic policy.  If I had to do it right now, I'd say go find an expert.

That said, there are a few points I think I can safely make.  First, under the "well, duh" category - we want a strong economy.  This isn't just for domestic purposes.  I really do think economics is a driving force behind military strength.  Sure, a nation with a weak economy can put more of their money into tanks and planes and things...but if they actually go to war, it'll be harder and harder to replace when they are inevitably destroyed.  Basically any long and drawn out war will favor the nation with the economic strength to continue the fight.  (This doesn't mean you can get by with poor generalship!  Or that how you fight doesn't matter.)  Just that a strong economy can better recover from military disasters, and there will probably be a military disaster of some sort in any prolonged fight.

The problem, of course, is that we don't know as much as we think about what makes an economy strong.  

So the first point - economics is mostly based on rational choice theory.  There are some economists who criticize this, and I'd like to know more about them.  I personally think rational choice theory doesn't match with my own personal experience.  All I have to do is consider how I pick out a new wine to drink.  Other than red or white, and a basic guesstimate on price (i.e. too cheap is probably not a good sign, but I'm not a wine connoisseur so it'd be a waste to spend too much), I generally wind up picking based on the packaging.  Give me a pretty label, or an interesting name, and I'll give it a try.  Is it a rational choice?  I suppose so...if you consider 'pretty packaging' an important part of that choice.  I'm definitely not researching any of the hundreds of different wine manufacturers to figure out who is rated the best for the product.  I might ask a salesperson for a recommendation, but that's about it.

Since rational choice theory is the foundation for a lot of economics, you could argue that the field of economics is based on a faulty premise.  Doesn't mean it's necessarily wrong, it just means that it's a good idea to be slightly skeptical.

Second point.  I do, for the most part, support capitalism.  Capitalism was actually one solution to a social dilemma - that is, if a village shared common pastures there was a risk that they'd overgraze the pasture.  Privatizing the land made it more likely the land would be managed responsibly, since the owner has an interest in maintaining it's use over time.  So the heart of capitalism - private ownership, enforcement of contracts, the invisible hand, etc - are useful.  Yet there's a scenario I want to throw out there. A historical exception, and not one to base the entire economy on, but worth discussing.

If you take a castle under siege, the people being besieged have to ration their food.  Otherwise they'll eat everything too soon, start to starve, and eventually lose the castle entirely.  They might even beg the besiegers to enter so long as they bring bread.  In a situation like this, market forces aren't justified.  Since supply is constricted, prices would go through the roof.  Then only the wealthy could afford to buy food, which means the people manning the defenses (who most likely aren't that wealthy) will be short on food and be weaker than they should be.  Not only are the defenses less effective, a policy like this would increase the likelihood that someone would betray the castle.

So you have martial law, and food is rationed. In a similar fashion, during times of war we do understand/accept a certain amount of rationing.  At least, we did during World War II.

The point of this is to show that there are situations where capitalism is not always the answer.  That perhaps there are questions we need to ask, like whether we're dealing with scarcity (and the politics thereof), or whether we need to make sure our resources are going to the right places (i.e. the defenders on the wall).

A related point is that certain needs, like food and water, are so important that people will take a bad bargain if they have to.  Food, water - and information assymetries.  This is part of why modern slavery exists.  Sure, it's a bad bargain...but you need that food.  And if someone in the family gets ill, then you need that medicine. 
Capitalism, for the most part, says that trade benefits both parties.  After all, if I thought I was losing out on the deal I wouldn't go through with it.  If I thought the price was too high for a car, I won't buy it. 

The same doesn't always hold true for essentials.  Or it does hold true, except it puts the person with the resources in too powerful a position.

We need a strong economy, yet the truth is it's not trade deals and outsourcing that is causing our job loss.  Given the size of our economy there's incentives to manufacture material close to the point of sale.  The real issue is automation.  (And yes, I do work for a company that basically helps other businesses automate, so I'm part of this.)  This makes me think of the Luddites, and whatever happened to the families that lost their jobs?  Like, did the people too old to learn new trades fall into poverty?  Did their children successfully find jobs in another field?  Or did it cause certain families to fall into a permanent underclass?

That last one, to me, is one of the biggest concerns right now.  With the shrinking of the middle class and the reduction in social mobility, it seems like you either need to jump to the upper class (and soon), or risk having you and your family fall into a permanent underclass.  To me, that's an awful scenario, and not just morally either.  It would indicate a lot of future instability. 

Throughout most of our history, human structures take on a pyramid shape.  A lot of people at the bottom, a smaller group in the middle, and only a few at the very top.  On the one hand, we run into issues of bloat and inefficiency whenever that pyramid shape starts to look too much like ka cylinder (i.e. the military, where there seem to be more and more general officers per soldier).  On the other hand, I think computing and automation will sort of force some sort of change...the duties at the bottom are more and more likely to be handled by robots.  (As long as people have a way to make a living, I think this is a good idea, actually.  I find some of the jobs at the lower class a bit insulting to our human potential.  Not the ones that require craftsmanship and working with your hands.  That's actually kind of cool, and rewarding.  Unfortunately, a lot of these jobs are just sheer drudgery.)

Anyways.  Point is, we're coming to a point where all of this will have to change.  Manufacturing jobs are going away, and they're not coming back.  We can either think ahead, and find ways to mitigate the effects...or we can pretend nothing is wrong until a candidate like Trump comes along and forces us to deal with it. 

So to tie it all up - we need a strong economy.  We need wise public policy choices to help navigate through the changes that are coming our way (much of which would be tied to education and efforts to break the cycle of poverty), and we also need to create an environment that encourages business.  Not just in terms of tax rates, either. 

Too Much Truth

Why Young Americans Are Giving Up on Capitalism https://foreignpolicy.com/2016/06/16/why-young-americans-are-giving-up-on-capitalism/