Re: Kolko 40 Years Later
From: Bryan Caplan [EMAIL PROTECTED] Kevin Carson wrote: They are indeed two entirely different cases. The latter case, of welfare state concessions, is productively examined in Piven and Cloward's *Regulating the Poor*. To a certain extent, the welfare state is something forced on the ruling class from above, rather than a positive good for it. Then again, maybe the ruling class is the median voter, and the welfare state neither raises its income nor appreciably reduces largely imaginary dangers of political instability. I'm pretty dubious of both public choice and interest group pluralism models of the U.S. political system. G. William Domhoff, a power elite school sociologist, pretty effectively demolished them. The elite does indeed sometimes respond to electoral pressure, but it is the governing class that shapes the set of alternatives the electorate decides between and decides the form the policy will take. And the final form is one designed to coopt or deflect as much popular pressure as possible while preserving the essential interests of the governing class. Mills and Domhoff have shown how high the degree of organizational interconnection is between oligopoly corporations, the regulatory state, and all the other centralized institutions that dominate our society. And the actions of the state most structurally central to the existing system never become political issues because, having bipartisan acceptance among policy elites, they are never articulated as issues. A majority of the public opposed NAFTA, but only fringe elements in both parties articulated that opposition. The mainsteam of the political class, in both parties, saw it as self-evidently good. And the Uruguay Round of GATT was so universally supported by the corporate/foundation/political classes that it didn't even appear on the radar screen. The two parties are half an inch to the left and right of center, respectively, and share about 75% of their views in common. These views include all the structural bases of state capitalism. They differ mainly on cultural/lifestyle issues like abortion and gun control, and on the proper size and role of the welfare state in making the existing state capitalist system more stable or tolerable. But the structure of state capitalism itself is not an issue. And (at the risk of being dismissed as rather silly), it partially cartelizes the portion of the wage package that goes to providing against absolute destitution and removes it as an issue of competition. Yes, this is even sillier. Subsidizing unemployment reduces labor supply and therefore raises wages for the employed. But both things (the cartelization of the unemployment premium portion of wages, and the encouragement of unemployment) might be true, ceteris paribus. The question is which tendency is stronger. It seems like no matter what exists you are going to put a interventionism is a plot by corporate interests to advance its material interests spin on it. It seems pretty commonsensical to me that the policies of a state will reflect the institutional power structure and the groups controlling it. But corporate interests are not by any means inevitably the dominant group. In American state capitalism and in the main European mixed economy variant, I think they are. But corporate interests have arguably been reduced to the junior partner in Swedish-style socialism, in favor of the social engineers and planners. And even in America, the content of corporate interests is modified quite a bit by the fact that the corporation and the corporatist economy are organized around the culture of professionalism/planning. What I doubt is that any kind of genuine democracy can exist except direct and participatory democracy (with some room for loose federation with recallable delegates, etc.). Once an organization is large enough to exclude face-to-face control by the governed, and to rest on some kind of representative system, it will serve the interests of those actually controlling its machinery. So if by corporate interests you mean those controlling the machinery of the corporatist system, I'd have to say you're right. But this includes educrats and social workers as wel as coupon clippers. -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] Infancy conforms to nobody: all conform to it, so that one babe commonly makes four or five out of the adults who prattle and play to it. --Ralph Waldo Emerson, Self-Reliance _ Tired of spam? Get advanced junk mail protection with MSN 8. http://join.msn.com/?page=features/junkmail
RE: Kolko 40 Years Later -- homelessness data?
[EMAIL PROTECTED] writes: The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. [EMAIL PROTECTED] wrote: This of course presumes that the welfare state reduces homelessness and starvation rather than encouraging it. In politics the appearance is usually more important than the reality. -- Anton Sherwood, http://www.ogre.nu/ --- While I, too, fully agree (statements and inuendos) ... I'd like to challenge the Armchair list for objective data showing the welfare state reducing homelessness, or increasing it, or not. I don't think there are any good studies with good conclusions. Tom Grey
Re: Kolko 40 Years Later -- homelessness data?
In all fairness, I didn't claim that welfare does increase homelessness, though I suspect that it does, but merely pointed out that the statement seemed to presume--or that in any case people supporting welfare often presume--that it decreases homelessness. As for emprical research, I second Tom's call. I do seem to recall that the issue of welfare dependence briefly loomed large during the 1980s, and that one statist-liberal think-tank (I believe it was Brookings, and perhaps Bill Wickens recalls) published a study that concluded that welfare did not cause welfare dependence. I also recall The Wall Street Journal editorial page and others ripping to shreds that study. I don't recall if the study addressed homelessness per se. David In a message dated 6/20/03 11:07:14 AM, [EMAIL PROTECTED] writes: [EMAIL PROTECTED] writes: The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. [EMAIL PROTECTED] wrote: This of course presumes that the welfare state reduces homelessness and starvation rather than encouraging it. In politics the appearance is usually more important than the reality. -- Anton Sherwood, http://www.ogre.nu/ --- While I, too, fully agree (statements and inuendos) ... I'd like to challenge the Armchair list for objective data showing the welfare state reducing homelessness, or increasing it, or not. I don't think there are any good studies with good conclusions. Tom Grey
Re: Kolko 40 Years Later
From: Bryan Caplan [EMAIL PROTECTED] Kevin Carson's remarks on Kolko reminded me that I recently reread Kolko and had some comments to share. Just for background: Kolko's *Triumph of Conservatism* was written largely as a left-wing attack on mainstream liberalism. Kolko's message was that most of the regulations and government interventions of the Progressive Era that supposedly gave capitalism a human face merely made matters even worse for the common man. In his related volumes *Railroads and Regulation*, for example, Kolko argued that railroad regulation was designed by railroads themselves to keep rates UP under the fig leaf of consumer protection. Kolko was subsequently dismayed that free-market economists from Stigler to Rothbard eagerly accepted his thesis, arguing that Kolko had shown that laissez-faire would have been better than what emerged. And indeed that is largely what Kolko showed, though it scarcely occured to him that anyone would actually take the laissez-faire option seriously. Kolko's goal, rather, was to show the futility of trying to tame capitalism, in order to push mainstream liberals towards socialism. Chomsky has a similar blind spot today. He points out, rightly, that what neoliberals call free trade is really a form of corporate mercantilism that is heavily dependant on state intervention on a global scale. But then he turns around and says that we have to strengthen the state and act through it to break up concentrations of private power. It seems to me a pretty common sense conclusion that, if these concentrations of private power depend on the state for their existence, the solution is to *reduce* the power of the state. But enough background. On my re-read, I noticed the following. 1. Kolko frequently fails to distinguish between government policies that directly helped business, as opposed to policies that directly hurt business, but reduced the risk of socialist revolution. The whole idea of a government-enforced cartel, for example, is to raise profits above the laissez-faire level. This is rather different from business consenting to moderate welfare state policies that reduce profits below the laissez-faire level, but arguably reduce the risk of total elimination of the profit system. They are indeed two entirely different cases. The latter case, of welfare state concessions, is productively examined in Piven and Cloward's *Regulating the Poor*. To a certain extent, the welfare state is something forced on the ruling class from above, rather than a positive good for it. The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. The point they make is that, even when political pressure from below is the main cause of a policy initiative, it is the ruling class that actually carries it out. And the ruling class implements it in a way that, as much as possible, produces side benefits for itself and is as harmless as possible to its interests. The welfare state provides some second-order benefits for the state capitalists: it provides a system of social control for the underclass, similar to that of police/prisons/parole officers. It provides some minimal floor for aggregate demand, to the extent that the corporate elite still take a Keynesian view of such things. And (at the risk of being dismissed as rather silly), it partially cartelizes the portion of the wage package that goes to providing against absolute destitution and removes it as an issue of competition. But these negative and positive benefits fade into each other to the extent that the New Class of social engineers have been incorporated as junior members of the corporate ruling class. If you take a Millsian power elite view (or even Christopher Lasch's neo-populism) of the parallel significance of Taylorism in industry, progressive paternalism in the welfare bureaucracy, the rise of the public educationist complex, and the professionalization of all aspects of life, it seems that big business depends on this New Class of managers, engineers and helping professionals to manage and plan society. As Mills put it, the capitalist class was reorganized along corporate lines. To a large extent, our society is run by interlocking directorates of state and corporate oligarchies, with the lines between them blurring. For these junior members of the corporatist elite, especially the ones in the state bureaucracy who live off of tax revenue, the welfare state is purely a positive benefit. Now this point is important because if you take the risk of socialist revolution seriously, then ANY welfare state measure that falls short of expropriation could be said to help business. This in turn makes Kolko's thesis rather trivial - or, more precisely, an expression of his deluded over-estimate of the risk of socialist revolution in the U.S. 2. Kolko
Re: Kolko 40 Years Later
In a message dated 6/19/03 6:28:26 PM, [EMAIL PROTECTED] writes: The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. This of course presumes that the welfare state reduces homelessness and starvation rather than encouraging it.
Re: Kolko 40 Years Later
[EMAIL PROTECTED] writes: The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. [EMAIL PROTECTED] wrote: This of course presumes that the welfare state reduces homelessness and starvation rather than encouraging it. In politics the appearance is usually more important than the reality. -- Anton Sherwood, http://www.ogre.nu/
Re: Kolko 40 Years Later
From: [EMAIL PROTECTED] In a message dated 6/19/03 6:28:26 PM, [EMAIL PROTECTED] writes: The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. This of course presumes that the welfare state reduces homelessness and starvation rather than encouraging it. Of course. But what it's proponents intend and what it actually does may be two different things. Then too, although non-statist alternatives might reduce destitution, they might also carry unacceptable costs to the ruling class. What's efficient from the perspective of the general welfare may be quite inefficient for those currently benefitting from the state. Tolstoy had a little parable along these lines that beautifully describes the mindset of the corporate liberal: a humane farmer took extraordinary measures to make life more comfortable for his cattle. He had his hired hands take them out of the pen for walks; he played music for them; he bought better food, etc. He was asked, But wouldn't it be a lot less complicated, if their welfare is your main goal, to just knock down the fence? The farmer replied: But then I couldn't milk them. _ The new MSN 8: advanced junk mail protection and 2 months FREE* http://join.msn.com/?page=features/junkmail
Re: Kolko 40 Years Later
In a message dated 6/19/03 10:28:48 PM, [EMAIL PROTECTED] writes: From: [EMAIL PROTECTED] In a message dated 6/19/03 6:28:26 PM, [EMAIL PROTECTED] writes: The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. This of course presumes that the welfare state reduces homelessness and starvation rather than encouraging it. Of course. But what it's proponents intend and what it actually does may be two different things. Then too, although non-statist alternatives might reduce destitution, they might also carry unacceptable costs to the ruling class. What's efficient from the perspective of the general welfare may be quite inefficient for those currently benefitting from the state. Tolstoy had a little parable along these lines that beautifully describes the mindset of the corporate liberal: a humane farmer took extraordinary measures to make life more comfortable for his cattle. He had his hired hands take them out of the pen for walks; he played music for them; he bought better food, etc. He was asked, But wouldn't it be a lot less complicated, if their welfare is your main goal, to just knock down the fence? The farmer replied: But then I couldn't milk them. An apt and amusing metaphor, Kevin! David
Re: Kolko 40 Years Later
In a message dated 6/19/03 9:40:04 PM, [EMAIL PROTECTED] writes: [EMAIL PROTECTED] writes: The main good it provides is a negative one, that of keeping homelessness and starvation to a low enough level to prevent political instability. [EMAIL PROTECTED] wrote: This of course presumes that the welfare state reduces homelessness and starvation rather than encouraging it. In politics the appearance is usually more important than the reality. -- Anton Sherwood, http://www.ogre.nu/ I couldn't agree more. Well said! David
Kolko 40 Years Later
Kevin Carson's remarks on Kolko reminded me that I recently reread Kolko and had some comments to share. Just for background: Kolko's *Triumph of Conservatism* was written largely as a left-wing attack on mainstream liberalism. Kolko's message was that most of the regulations and government interventions of the Progressive Era that supposedly gave capitalism a human face merely made matters even worse for the common man. In his related volumes *Railroads and Regulation*, for example, Kolko argued that railroad regulation was designed by railroads themselves to keep rates UP under the fig leaf of consumer protection. Kolko was subsequently dismayed that free-market economists from Stigler to Rothbard eagerly accepted his thesis, arguing that Kolko had shown that laissez-faire would have been better than what emerged. And indeed that is largely what Kolko showed, though it scarcely occured to him that anyone would actually take the laissez-faire option seriously. Kolko's goal, rather, was to show the futility of trying to tame capitalism, in order to push mainstream liberals towards socialism. But enough background. On my re-read, I noticed the following. 1. Kolko frequently fails to distinguish between government policies that directly helped business, as opposed to policies that directly hurt business, but reduced the risk of socialist revolution. The whole idea of a government-enforced cartel, for example, is to raise profits above the laissez-faire level. This is rather different from business consenting to moderate welfare state policies that reduce profits below the laissez-faire level, but arguably reduce the risk of total elimination of the profit system. Now this point is important because if you take the risk of socialist revolution seriously, then ANY welfare state measure that falls short of expropriation could be said to help business. This in turn makes Kolko's thesis rather trivial - or, more precisely, an expression of his deluded over-estimate of the risk of socialist revolution in the U.S. 2. Kolko frequently fails to distinguish businesses' desire for *standardized* regulation as opposed to *more* regulation. Very often, if you read Kolko carefully, it becomes apparent that businesses lobbied the federal government as a reaction to the costly patchwork of state-level regulation. In other words, while the naive reading of Kolko makes business preferences look like this: federal regulation state regulation laissez-faire His accounts are often perfectly compatible with: laissez-faire federal regulation state regulation 3. Kolko frequently fails to distinguish the do something motive from the cartelization motive. In many cases, he explains that legislators were under public pressure to do something about a perceived problem - say business abuses. Given these circumstances, businesses would naturally lobby to contain the damage - to push for cosmetic rather than substantive changes. Again, this does not mean that business wanted regulation. They could easily have had the preference ordering: laissez-faire cosmetic regulation substantive regulation 4. While Kolko discusses trends in concentration ratios and the like, rarely does he come close to replicating his results for railroads. There we have a clear mechanism for increasing railroad profits - rate regulation - along with a smoking gun - railroads lobbying for precisely that. When Kolko moves to things like the FTC, however, he has nothing comparable. What did the FTC actually DO to reduce competition? Launch some politically-motivated antitrust cases? That is hardly a plausible *mechanism* for setting up a sustainable cartel. 5. Kolko fails to consider (excusable, perhaps, given that his work predates modern information economics) some plausible market failure rationales for how regulation would indirectly help the public BY directly helping business. He goes over meat regulation in detail, for example, and shows how the meat industry lobbied heavily for federal meat regulation. The main debate, says Kolko, was over who would foot the bill for meat inspections. Now if this were a standard asymmetric information story, the meat inspections would raise demand for meat, initially benefiting the meat suppliers. But this would attract entry, and ultimately it would be consumers who would benefit. Tax versus business finance for inspectors would ultimately be an issue not of public-to-meat interest redistribution, but meat-eating public versus non-meating-eating public. Now Kolko gives a number of facts that cut against this story. But the idea that consumers might indirectly benefit from measures that directly benefit business is not on his radar. 6. I still like Kolko's discussion of turn-of-the-century deconcencentration trends, but the rest of his work makes me wonder how trustworthy it is. And the book has other great stuff that I
