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July 27, 2004

Comments

Ian Dew-Becker

Adrian --

I don't think that anybody, from Brad to D**squared is in favor of a completely planned economy. They mostly seem to be in favor of Krugman-in-east-asia-style interventions and controls. Whether or not that can be turned into a coherent system is a different question, but your argument that since a completely planned economy fails, a completely free market must be the best solution, *really* misses the point.

Posted by Ian Dew-Becker

Dex

Just to show I am not a sinlge note, there has been some recent research on converting the value Europeans get from their expanded social services, longer vacations, better medical care (perscribed spa treatments perhaps?) that narrow the earnings gap considerably. Personally I would take the $9 grand but hey it seems to work for them. If there are some that don't like it they can take the options our ancestors (or atleast alot of them did) and leave.

I think the discussion was more about developing countries that are or by choice have been insulated from larger and somewhat more efficient world markets and are to small to support any reasonable internal markets. I am sure it was an interesting discussion, where there any general conclusions reached other than there are no such things as free lunches?

Posted by Dex

a

Adrian Spidle wrote: Prof Brad Delong and the Academic Left still don't understand economics...

Man, you are so funny. Can you wiggle your ears as well?

Posted by a

spm

Adrian, you're confusing informational efficiency with allocational efficiency. They aren't the same thing.

Posted by spm

cm

Adrian Spidle said:

"Nations that replace free markets by central planning can never really evolve - get better - because the planners won't allow it. This is why the USA is so much richer and more successful than the Eurosocialist democracies."

How much richer is the US and, more importantly, by which measure? Popular economic indicators are (1) calculated in a different way, and (2) compared out of context.

"As evidence I assert that the average American earns $9,000 more per year and lives in twice the space of the average Social Democrat citizen."

I would submit, not assert, evidence, but anyway.

This is presumably meant to mean "the average US wage is $9000 higher than the average European wage, adjusted by the respective exchange rates". Aside from whether that's accurate, it misses other important determinants of living standards, like unemployment, social security, welfare, disability benefits, effective tax rates, price levels, and a host of other social policies. On those I think it is fair to say that Western/Central Europe looks far more favorable than the US.

Taking the interpretational liberty to replace "Social Democrat" by "Old Europe", yes, after having moved to Califonia I have been making not $9000 more, but _2x_ as much as in Europe (lets keep this in relative terms). I pay slightly lower tax (income/payroll) + healthcare insurance rates, but I pay more than 3x for accomodation, 2x for food, 0.5x for gasoline, about the same for non-healthcare services (hard to compare), and I leave a 4-digit amount at dentists alone almost every year (thank the Lord I don't need to go to doctors yet)!

And looking around, in Germany we (used to) have relatively good welfare/pension/unemployment benefits and quite close to universal healthcare, which accounted for a good part of my taxes, perhaps 20+ percentage points. When adjusting for that, my effective tax rate in Germany looks much more favorable than my US one.

As for living in twice as much space, considering the far greater landmass of the US it does not look like that much of an achievement. As roads have generally more lanes in the US due to more space and more commuting (in twice as large cars?), I figure even the homeless can benefit from broader bridges and end up living in twice as much space.

DIVERSIFY that!


Posted by cm

Adrian Spidle

I don't think that anybody, from Brad to D**squared is in favor of a completely planned economy. They mostly seem to be in favor of Krugman-in-east-asia-style interventions and controls. Whether or not that can be turned into a coherent system is a different question, but your argument that since a completely planned economy fails, a completely free market must be the best solution, *really* misses the point.

Posted by Ian Dew-Becker

GREAT POINT, IAN. I AGREE THAT THERE IS AN OPTIMAL POINT ON THE CONTROLLED ECONOMY-FREE ECONOMY AXIS THAT BALANCES EFFICIENCY AND STABILITY, BUT I SUSPECT THAT MY PREFERRED POINT IS MUCH CLOSER TO THE FREE SIDE THAN YOURS.

I'M SURE THAT EVOLUTION WILL BE MORE RAPID CLOSER TO THE FREE SIDE THAN THE CONTROLLED SIDE.

YOU MIGHT CALL THIS "ADRIAN'S INEFFICIENT PLANNINGN THEOREM." THE MORE GOVERNMENT CONTROL THE SLOWER THE IMPROVEMENT... UP TO AN INFLECTION POINT, OF COURSE.

INSTEAD OF SAYING "THE MARKET KNOWS WHAT'S IMPORTANT" I SAY THAT THE PLANNING AND CONTROL STRUCTURE OF AN ECONOMY DOESN'T KNOW WHAT IT DOESN'T KNOW.

ADRIAN

Adrian Spidle

...This is presumably meant to mean "the average US wage is $9000 higher than the average European wage, adjusted by the respective exchange rates". Aside from whether that's accurate, it misses other important determinants of living standards, like unemployment, social security, welfare, disability benefits, effective tax rates, price levels, and a host of other social policies. On those I think it is fair to say that Western/Central Europe looks far more favorable than the US...
DIVERSIFY that!


Posted by cm

GREAT POST. LET'S LOOK AT EACH POINT YOU MADE:

like unemployment,

FRENCH AND GERMAN UNEMPLOYMENT IS TWICE AMERICA'S.

social security,

I NEED EVIDENCE TO SUPPORT YOUR ASSERTION, BUT, IN AMERICA, OUR GENEROUS 401k SYSTEM, PROFIT-SHARING ETC, NEED TO BE INCLUDED IN COMPARING RELATIVE THE WELL BEING OF OUR CITIZENS.

welfare,

SEE YOUR HIGHER UNEMPLOYMENT RATE ABOVE.

disability benefits,

AGAIN, ALMOST ALL EMPLOYED AMERICANS HAVE DISABVILITY SUPPLIED BY THEIR EMPLOYERS IN ADDITION TO SSI.

effective tax rates,

AMERICA'S IS MUCH LOWER.

price levels,

HAVING VISITED YOUR CUTE COUNTRIES OFTEN, I HAVEN'T NOTICED THIS.

and a host of other social policies.

MOST COUNTERPRODUCTIVE AND CORRUPTING I'M SURE.

ADRIAN

Skippy

Adrian you once refered to Brad Delong as one of your heros but you have done nothing but shit on him. Does he have a blog where he shits on you? Just wondering.

supercat

To: AdrianSpidle

Democrats get DIVERSITY all wrong because...

...liberals live in a world with largely inverted cause-and-effect relationships. They fail to understand that naturally-occurring diversity is good because of the processes by which it occurs; artificially-produced diversity has no such benefits.

I would posit that the difference between honest liberals(*) and conservatives is akin the the difference between geocentrists and heliocentrists. The geocentric model, despite the numerous complexities it poses, fits more intuitively with observations than the heliocentric model. Unfortunately, making the geocentric work very well for very long requires adding all sorts of goofy epicycles to the motions of all the heavenly bodies to make them line up with observations. Although things can be made to somewhat 'make sense', the geocentric model doesn't really describe reality; at best it describes a perceived "reality".

It's important to recognize that some people push liberalism, recognizing that it's a pack of lies but also recognizing that deluding other people is a useful means of gaining power. Others push liberalism because they believe in it. Generally the rich and powerful liberals are the former type.
One big mistake conservatives make is failing to recognize that many liberals are sincere in their beliefs and see themselves as moral people. Accusing liberals of hateful things will do nothing to reach these people; instead it will reinforce their view that conservatives are fountains of hate.
I wish conservatives would more often come out and focus their arguments against liberal policies not in terms of objective, but in terms of what the actual effect of the liberal policies is likely to be. Unfortunately, when Republicans go pushing big new entitlement programs, such arguments lose their effectiveness.

posted by supercat

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