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      [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"

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