[ExI] retrainability of plebeians

Stathis Papaioannou stathisp at gmail.com
Tue May 5 14:12:49 UTC 2009


2009/5/5 Lee Corbin <lcorbin at rawbw.com>:

>> Something breaks when, after a few years of this, the population
>> realises they are becoming increasingly worse off relative to those
>> countries that have better economic systems. So in the end every
>> country in the world should converge towards low taxes and low
>> government spending, if that does indeed lead to better outcomes.
>
> Peoples' belief systems play too strong a role
> for this to happen as expeditiously as we'd like,
> or rather, as you are implying would be the case.
>
> For example, any German who looks into it becomes
> well aware of the differences between the American
> economy and his own. Everyone knows about the
> differences in productivity and unemployment.
>
> Yet, typically, a non-libertarian German will just
> retort that "American conditions" are too high a
> price to pay for a better economic situation. Most
> want to keep their job security and social welfare
> safety net measures, and so on.
>
> So---if you are right, and the allure of greater
> economic prosperity in the end always dominates
> ---one might envision a completely fanciful
> development one hundred years from now in which
> (somehow) everything else has remained the same,
> but the U.S. economy has grown at a rate one or
> two percent higher than the German economy.
>
> But you may be wrong: even though in this scenario,
> vast, vast differences would be all too obvious,
> there is no guarantee that the economically superior
> system would be admired by all.

It isn't just economic growth that is important, it's quality of life.
That includes not only per capita income, but also how equitably that
income is distributed, job security, working hours, whether your boss
is a bastard, and so on. Part of the reason the US has a slightly
higher GDP per capita than some Western European countries is that
working hours are longer in the US. The Europeans have decided that
they like it better their way.

Nevertheless, per capita GDP is a very important component in the
quality of life equation, and a GDP growth differential of even a
small amount sustained over decades will make a big difference; for
example, a differential of 1.5% will cause the GDP of one country to
double relative to that of the slower-growing one in 50 years. But
this is not what has happened in Western Europe compared to the US,
even though most Western European states have had what by US standards
are socialist governments for the last 50 years.

For example, Sweden has had explicitly and proudly socialist
governments for the best part a century, and in this time it has gone
from one of the poorest and most backward countries in Europe to one
of the wealthiest. In the early nineties Sweden went through a severe
recession, following a real estate bubble similar to the one leading
to the recent financial crisis. During the recovery phase the currency
was devalued and government welfare spending was cut, as it was
heading towards an unmanageable level. But this is the point I was
making: if an economic policy has the effect of making people worse
off, then people notice and the policy is adjusted. Not even a
totalitarian government controlling information and suppressing
dissent can prevent this happening in the long run.


-- 
Stathis Papaioannou



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