Hi Keith; I read something different in that essay. That regulation and the concept of income redistribution via taxation created a more civil society. One in which not only the productive but the whole of nation benefited.
The idea of the neo-cons - eat or die method is short term thinking. Only a small portion of individuals can operate within a highly competitive environment - the first five or ten in any given area. I was quite taken with your description of how you left a high paying job and became entreprenurial and how you had went broke - I think it was two times. Good for you - you picked yourself off the floor and had enough faith and energy or desperation to try again. That may not be the abilities of all others. The idea of the survival of the fittest eventually leads to a smaller and smaller group of humans - for by the very nature of being human we are subject to a variety of limitations - internal such as your favorite measurement - low IQ, illness, dysfunctional childhood, poor diet, poor environment, lack of competitive facilities like good schools, personal predilictions and on and on - to say nothing of having capital or able to arrange credit or whether the economy is in depression, war, recession, govenment regulation, competition, etc again. If we don't look after each other through community, then the misery level is so high as to make life hardly worth living for a significant number of humans and the truism, "there but for the grace of god, go I", is always a possibility. Just as transparency in business would probably prevent an Enron, so would Review Boards and constant evalutation against stated goals would make Government more accountable and prevent the rampant growth of beauracracies, though there are beauracracies in medium to large firms too, which are just as inefficient. In the tripod of citizen, government and business, there is need for improvement. The citizen should at birth, not only inherit rights as a condition of citizenship but should also have responsibilities. One, which is never talked about but I deem essential is mandantory voting with - not voting carrying a large fine. The fact that only 50% of the people vote can be corrected with some simple legislation. It should be a responsibility of citizenship to vote. And if everyone did, it would change the political landscape and make representative democracy work in a different fashion with different priorities. I venture the poor and the army of the unemployed would exert a might pressure for the concept of decent wages and full employment changing some of the paradigms of business and government. Respectfully, Thomas Lunde on 4/5/02 11:02 PM, Keith Hudson at [EMAIL PROTECTED] wrote: > Hi Arthur, > > That was a plausible rationalisation for regulation that you posted (see > below), but quite specious in my view. > > The most disturbing aspect of the Enron affair is not that thousands of > employees have been deprived of their pensions, and that thousands of > shareholders have been duped of their investments, it is that it will > happen again. > > The expert commentators I have read so far have said two things about the > consequences of the Enron affair: > > 1. Yes, the government will be able to devise regulations in the future > which will prevent the same obscure accounting methods being used again; > > 2. A future unprincipled company will be able to devise even more > sophisticated scams which are likely to dupe even more people. > > The problem about regulation is not only that it produces economic > inefficiency but also, as a byproduct, it produces whole new tranches of > professions which are not only unproductive free-riders, but are > soul-destroying -- individually and civic. They comprise a non-creative > cancer which grows ever larger and prevents the organic development of > civilisation as a whole. > > There is only one answer to the evils which regulation is supposed to cure. > This is transparency of information. > > If Enron's accounts had been transparent then it would have been stopped in > its tracks many years ago. Furthermore, future (inevitable) Enrons would > be prevented. > > Keith > > At 09:07 05/04/02 -0500, you wrote: >> I am passing along for your interest the following from the net. >> >> The article was originally written about 1997 but seems relevant to the >> thread. >> Arthur Cordell > =============================================== > > DEREGULATION, UNIVERSALITY AND SOCIAL COHESION > > M.D. Albrecht > > In the past 15 to 20 years, beginning with the airlines, we have > witnessed a profound move to deregulation just about everywhere. Pundits > tell us that we achieve a more efficient allocation of resources if prices > are brought into line with costs. An added incentive to deregulate is that > it will allow business to be more competitive in the new global business > arena. > > And the arguments for deregulation are correct, from an economic > point of view. But there are other values involved, as well as a view of > community to be considered. As we privatize public functions, as we > deregulate to cut costs and be competitive we are undermining a way of life > for many communities as well as a way of life for many who consider > themselves to be middle class. > > Consider telephones for example. For a cluster of reasons, pricing in > telephones has been based on cross-subsidization. Prices were set in such a > way that, subsidized by long distance, most residential users could afford > to have a telephone. Not the most efficient use of resources, agreed. But > in the old pricing model, or most pricing models that strive for > universality via cross-subsidization, the outcome was one that leaves > participants feeling as though they are part of the same community. A > social goal was met. Access was ensured. > > With deregulation and competition, cross-subsidization declines as a > factor. Rate structures change. Some think the change will be slight, > others claim the change will be more extreme, especially over time. As > residential rates climb there will be those who can no longer afford to > have telephone connections. Well, as the deregulators say ' . . . get the > basic residential service rates right and take care of poor people with > direct subsidies, just as we do with food and medical care.' > > The not-so-welcome twin of deregulation seems to the increasing use > of the means test. People who have had access to the phone all their lives > can now either pay more for access or can do without or can do as the > deregulators suggest -- apply for a direct subsidy. Consider what this > does to our notion of community. What happens when we create an A Team > (those who can pay) and a B Team (those who must be subsidized)? Is it > that important to encourage market forces to such an extent that we create > a new group of people who must apply for a subsidy thereby admitting they > are part of the B Team, the growing underclass who can't pay their way? And > what is the future for the B Team--a group that is growing in number but > losing in power. A group that surely must be trembling when governments in > almost every jurisdiction threaten cuts here and there in their fumbling > comic/tragic attempts to balance the budget. > > So even if, as the deregulators urge, ' . . . we take care of poor > people with direct subsidies . . . ,' a serious question is: Will those > subsidies continue. We all know that 'what the State giveth, the State can > taketh away.' So deregulation, besides stripping people of their dignity, > may not be a long term solution after all. > > And what about privatization and deregulation in other areas of > society? What happens when we privatize garbage collection? Will those > living furthest away from the land fill sites pay the higher prices? In a > move for prices to reflect cost will a privatized fire department (and > maybe ambulance and police service) charge more to go to certain areas of > the city or county. Or will we find that as with transportation > deregulation some areas are no longer served? Small towns have lost air > and rail connections. Sure, the bus and the private car can always fill in > -- most times and for most people. But what about that sense of > connectedness that binds and underpins nation and community. > > What about the future of a one price policy for posting a letter > within a jurisdiction? Here too a deregulated postal service will scream > for changed postal rates since in this case the subsidization is the > opposite of the telephone system: the local postal rates presumably > subsidize long distance. In a Fedex world, where all postal service is > privatized, what happens to those in small communities, in remote areas? > Do we just say sorry but it is no longer efficient to serve you any longer? > Or if we do provide service it is at a rate that is not affordable by > most? Or do we say, sure we can subsidize your postal service but it must > be on a case by case approach and first you have to show that you can't > afford to have postal service. > > Universality is another way of saying economic development. It means > reasonable access to a host of services: potable water, education K through > 12, libraries--access to a social and physical infrastructure. Where > payment for services has been required, regulations were put in place to > ensure that the high cost areas (the small communities, the out of the way > areas, etc.) could still be served, could still be included -- they were > subsidized by the payments from the low cost areas where prices were > substantially above costs. > > Cross-subsidization underpins the transportation system in North > America. Creation of a transportation infrastructure was a nation-building > exercise: canals, railroads, highways and an airline system. A way of > denoting a jurisdiction, a way of defining community. Cross-subsidization > and regulation were harnessed to create a system where the strongest takes > care of the weakest; the wealthier subsidize the poorer. With deregulation > we are moving away from cross-subsidization. We are moving away from > universality. > > Our society is backing away from universality in a number of areas. > The market agenda driven by the mantra of the need to 'be competitive in a > globalized world' is leading to an outcome that takes us back in time. To > a time of class distinction. To a time of the rich and the poor. To a > time before the broad middle class was created. The middle class upon > which so much of the mythology of North America and Democracy is based. > > The net effect is more than damage and hardship to communities and > individuals. We are also giving up many of the hard-won gains of economic > development. If we are not careful, we may find ourselves with many of the > features we now ascribe to the third world: a two-tier society, lack of > universality, upward mobility blocked, etc. > > When all is said and done. When full deregulation has come to pass. > When the market solution is used in all areas. When universality has been > broken beyond repair. What then? We'll have a host of people added to the > underclass no longer able to participate in everyday affairs; another group > living on subsidies of one sort or another at the whim of government budget > fiascoes; and another group -- the top half or top third of the population > who will say: problems? what problems? > > Society today is engaging in a series of small decisions. Step after > step after step. With each move we don't seem to realize the consequences > of our actions. As we undo universality, as we undo the elaborate > cross-subsidization schemes I fear we will discover that in our striving > for competitiveness and efficiency, we have undone those very pricing > schemes that built communities and nations. The very pricing schemes that > have helped to sustain a comfortable middle class way of life in North > America. > > Regulation and associated pricing schemes all too often seem to be > illogical. But the intent is one where cross-subsidization is created and > endured because it serves a broader social purpose: that of inclusion. > Deregulation and the quest for ever more efficient market solutions poses, > for me, the greater cost (agreed one that cannot easily be measured): the > risk of exclusion. If economics is about trade-offs, then I think we > should take a closer look at what we are trading off in the name of > economic rationality. > > Many of the ideas and arguments of the deregulators can be > persuasive, but in our quest for efficiency, competitiveness and preparing > for globalization we should be cautious. The gains of deregulation may be > illusory. I suggest that when all costs and benefits are brought together > in society's balance sheet -- the social bottom line, we may find that the > great privatization and deregulation effort has been one that has created > more losers than winners and that the biggest loser of all has been the > public interest. > (1997) > =============================================== > > > > __________________________________________________________ > ?Writers used to write because they had something to say; now they write in > order to discover if they have something to say.? John D. Barrow > _________________________________________________ > Keith Hudson, Bath, England; e-mail: [EMAIL PROTECTED] > _________________________________________________ > >
