Home > Uncategorized > One way to protect democracy is to stop pushing policies that redistribute income upward.

One way to protect democracy is to stop pushing policies that redistribute income upward.

from Dean Baker

That one is apparently not on the agenda, at least according to Amanda Taub’s NYT “The Interpreter” piece. The piece notes the declining support for center right and center left parties in most western democracies. While it notes that people feel unrepresented by these parties, it never states the obvious, these parties have consistently supported monetary, fiscal, trade, and intellectual property policies that redistribute an ever-larger share of income to people like Bill Gates and Robert Rubin.

It should not be surprising that most of the public is not enthralled with this outcome and the parties that promote it. And yes, there are alternatives, as I point out in my (free) book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer

  1. February 13, 2018 at 2:35 am

    Representative democracy is a tool of oligarchs who can easily afford to fund every candidate in every party for every office. Representative democracy is the government form running eternal war and doing little about extinction of insects, fish, birds and mammals.

    Autonomous democracy may be next. Let’s hope something is. How do we replace old-fashioned sham representative democracy posing as democracy? It’s blocking distributed human intelligence and possible solutions that involve degrowth.

    The first two chapters of my novel are free, so far. How will we rebuild? http://www.zerowastenews.org/Many-rivers/manyRivers-ch1.html

  2. Rob Reno
    February 13, 2018 at 5:31 am

    Completely agree Dean. Question aside, is it possible to download your EPUB book version?

    • February 13, 2018 at 5:41 am

      Yes, Rob. By pursuing the link he provided, I found it, and then this quote (p. 199):

      To sustain progressive politics in the decades ahead it is essential
      that progressives understand the causes of upward redistribution and get a
      clearer understanding of the market. The suspicion of market outcomes is
      a prejudice that needs to be overcome. The market is a tool, like the
      wheel. Many horrible acts have been done with wheels — young children
      have been run over by cars, sometimes even deliberately — but no one in
      their right mind would see this as a serious basis for not using wheels.

      Kinda underscores one of the points I’ve been making… :)

      • Rob Reno
        February 13, 2018 at 6:18 am

        Thanks James, I think the link opens in a browser, but will check. I purchased it on Amazon to run in my Kindle too.

        As we agreed already, some markets should not exist (e.g., sex trade), so I think we need to keep mind markets are man made and that there are different kinds of “markets.” Some are rigged, some are more regulated, and some are less regulated, etc. Just as there are different forms of capitalism under different regimes, so too markets can be different. I guess the goal is to evolve good markets (one’s that serve real human needs) rather than bad markets (one’s that tolerate or even promote asymmetric power relations aimed at exploitative practices, engage in rampant and normalized opportunism, etc.) so as to foster a level of trust within society towards such markets.

        I look forward to reading Dean’s book.

        All the best …

  3. February 13, 2018 at 12:43 pm

    I think it’s a credibility problem before it becomes a sellout situation. The electorates believe, first, that if they go with the socialist policies they’ll be cast out of the capitalist system and lose whatever jobs, consumer goods, etc. they have like Venezuela, or they’ll be deliberately punished like Greece. So the electorates are afraid to vote for a Corbyn, Sanders, etc. Then the party system takes a sellout stance, blocking those politicians from rising and contesting elections, promoting sell-out candidates like Blair and Clinton (either one) instead.

    The credibility problem has to be solved first and honestly, it’s Steve Jobs’s fault. Capitalism is currently too shiny, dangling iPhones and Louis Vuitton bags under people’s noses and making them feel they need these things, which socialism allegedly does not produce. This perception has to change. We need bon-viveur socialism, with its shiny open-source devices and fairtrade single-origin espresso bars, and we need that to be a credible and scaling vision for a good society. Socialist parties will then appear to represent it. Politics follows society.

    • robert locke
      February 13, 2018 at 3:09 pm

      It is too late. In 1970 socialism was in power in the Eurasian land mass. It collapsed. Nobody believes in it anymore. So where are you going to institute this bon-viveur socialism? Socialism blew its historical chance and your don’t get a second chance. So use your imagination and come up with something else, and don’t call it ‘socialism.’ Get another word that can move the masses.

      • February 13, 2018 at 3:48 pm

        There is more than one kind of socialism (in effect top down and bottom up), which fact those top-down abusers who want to use the term as a form of abuse make sure we never hear, making sure the top-down type of socialists are kept satisfied with a minimum of compromise.

        I have to agree, it will be easier to change the accepted name of bottom up socialism than to change the minds of that corrupt elite. How about “Truth and Reconciliation”? That sounds like what is needed, and it went down well in South Africa, even if the outcome has not escapted corruption from elsewhere.

      • February 13, 2018 at 5:56 pm

        Socialism blew its historical chance and your don’t get a second chance…Get another word that can move the masses.

        Not a second chance, but…

        Perhaps the meta-objectives of socialism can be achieved once activists have acquired a more sophisticated understanding of the socio-motivational dynamic they are dealing with.

        Since forever, Socialists have told themselves it should not be difficult for them to prevail in “democratic” republics because of 1) their numbers, and 2) the righteousness of their cause.

        But the reality we’ve seen since WWII is that it has been exceedingly difficult for them to dominate the political landscape in spite of these perceived advantages.

        I think it’s important for socialism’s advocates to understand that the members of the target audience they are appealing to are listening to them with one ear while the other ear is listening to the people “above them” whom they would like to “get along with.”

        Underappreciated I think is the fact that most humans intuitively recognize that they might gain/benefit in some way if they can earn the favor/approval of those who have much more money/status than they have.

        They hope to be financially rewarded at some point, or to gain some “connections”, or to be able to “name-drop”, etc.

        So currying the favor of wealthy people is perceived by many not-rich people as the better way to reach for an improvement your economic circumstances…

        …compared to the alternative of joining your voice politically with others who share your economic circumstances in an effort to compel with political power those at the top of the economic ladder to share their wealth with those who are not rich.

        That juxtaposition of choices, I submit, is what Socialism advocates are dealing with when they address their target audience in a search for political support.

        How can you dissuade “average voters” from their instinctive belief that they will be better off if they willfully identify with the political attitudes of their wealthy employers, friends, presenters on FOX News, etc.?

        What can you tell them that will cause them to see things differently?

      • Craig
        February 13, 2018 at 9:53 pm

        Both Robert Locke and James Kroeger are correct. Old socialism is never going to get enacted and yet we need the best aspects of socialism….if we are going to save profit making economic systems. The trick is to be integrative of the truths, workabilities, applicabilities and highest ethical considerations of both socialism and capitalism…while deleting their separate and/or mutual untruths, unworkabilities, inapplicabilities and lesser ethical considerations….so that we get the thirdness greater oneness of profit making direct and reciprocal monetary distributism.

        Integration is the very process of discernment and wisdom. Learn it, contemplate it, apply it inwardly and outwardly.

        Obsessive contention which is what we see all around us economically, socially and politically…is not wisdom. It is simply the getting stuck in the first part of the Hegelian dialectic of
        (thesis–><– antithesis) when what is required is:

        [(thesis x antithesis) synthesis ] which is an integrated duality within an inegrative trinity-unity- oneness-conscious process

  4. February 13, 2018 at 8:23 pm

    I really like this overall presentation by Dean Baker.

    He is careful to focus attention on the ways Congress has “rigged the rules” in various markets to further enrich some or all of the firms competing in them.

    Then, he provides a number of compelling policy alternatives that promise to eliminate, or at least mitigate the various injustices that bought-off members of Congress have created in times past.

    Well done, and recommended reading for the policy wonks who supported Bernie Sanders’ 2016 campaign.

    I do think he misses the mark, however, on a couple of the prescriptions he proposes. One of them:

    The surest way to end TBTF insurance is to break up the big
    banks…

    Actually, the surest way to end the government’s provision of Too Big To Fail insurance to the Big Banks is to make sure that the Main Street economy’s is ALWAYS completely insulated from the failure of any and all banks.

    Because our modern economy is so utterly dependent upon the constant provision of basic banking services, it is precisely the kind of industry the government must intervene in to ensure that the general public will never again be threatened by the machinations of the major players in that industry.

    Attempts have already been made to forbid banks from taking certain risks, but that approach ultimately failed, as well, didn’t it?

    The basic banking services industry that the public needs is not one that gains anything from allowing “bankers to be bankers.” It is a service industry that the national government can easily set up and provide to the public at marginal cost, with no contributions whatsoever being required of the private banking industry.

    There would be no need to try to eliminate the private banking industry, to force them out of business. Let them go ahead and try to compete with a very large government enterprise that neither seeks nor requires any profit.

    The niche in the financial services market they would be left with is the high-risk/high-yield investments market in which the deposits of rich customers would be solicited with a promise made to offer them a higher yield than the government is willing to offer them.

    Let them take whatever risks they want, only without any government insurance to fall back on. If they fail, or the private insurance companies they rely on to mitigate their risks fail, then let them and watch the magic of moral hazard unfold.

    There is absolutely no reason why the people’s government should allow the general public to be held hostage by High Finance speculators. Let them have their fun, protect the people from them, and then take it easy the next time their machinations end in a collapse of their entire industry.

    Market-Specific Socialism is always a good idea when the the general public is threatened by the malfeasance of that industry’s major players.

    Other than this quibble, Dean, my hat is off to you for a job well done!

    • February 13, 2018 at 10:26 pm

      I would like to agree with both Craig and James, but the problem surely isn’t that simple. I agree with Craig that the point of dialectic is the synthesis, but how does one teach the unvwise to be wise, Craig? (There being none so deaf as those who don’t want to hear). I am tempted to agree with James, but there remains the problem of incomes related to employment by others, and the finances of firms being subject to the idiocy of gambling, so the argument for public high street banking applies equally to the need for public credit for enterprises. Not only that, the incomes and earning of credit both need to be divorced from employment by others and become a synthesis of rights and duties achieved by love (gratitude for freely given gifts) rather than fear of unemployment. And if that applies to productive and distributive enterprises, why should it not apply to banking, too? Let those who work in banks obtain their income like everybody ellse, from freely given credit which they are duty bound to earn as our accountants.

  5. February 15, 2018 at 6:57 am

    Excellent article, Dean. Will it change any minds or souls? Gallup surveys give us a window into the current state of public opinion on many of these topics. On general support these are the scores. (apologies about the table formatting)

    May 2-4, 2016% Nov. 18-19, 2012% Jan. 26-27, 2010%
    Small business 96 95 95
    Entrepreneurs 87 86 84
    Free enterprise 85 89 86
    Capitalism 60 61 61
    Big business 53 58 49
    The federal government 44 51 46
    Socialism 35 39 36

    Voting preferences tell a similar but not identical story. I find the preferences of the 18 – 29 cohort interesting.

    “Not quite half of Americans — 47 percent— say they would consider voting for a socialist for president, if the person were well-qualified and nominated by the voter’s party, according to a new Gallup survey.

    Democrats offer the most support for socialism with 59 percent saying they would vote for a socialist candidate. Independents are split down the middle, and Republicans are the least supportive with just 26 percent saying they’d vote for a socialist.

    Americans ages 18 to 29 are most open to the idea of a socialist with nearly 7 in 10 stating they’d vote for one. Older generations are less inclined to do so.

    Fewer Americans support a socialist for president than support other types of presidential candidates surveyors asked about, including those of different religions, races, and genders. Ninety-three percent of Americans would consider voting for a Catholic, 92 percent for a Jew, 81 percent for a Mormon and 73 percent for an Evangelical. Candidates who identify as Muslim or atheist are less favored, garnering the support of 60 percent and 58 percent of Americans, respectively.

    Some 92 percent of Americans say they’d vote for a woman. The same percentage would support a black candidate, and 91 percent say they’d support a Hispanic candidate. Seventy-four percent would vote for a gay or lesbian for president.

    A Gallup study from April shows Americans have shifted their support toward socialist-type policies, with 52 percent of Americans now saying the government should redistribute wealth by placing higher taxes on the rich — the greatest support for wealth redistribution that has been measured since 1940.”

    On guaranteed income the Gallup results of fascinating.

    “A recent Gallup poll found that 48 percent of Americans see guaranteed income as a solution for helping workers displaced by automation.

    Partisan divide: Support for the issue varies greatly between political parties—while 65 percent of Democrats support it, only 28 percent of Republicans are on board (not exactly a shocker).

    Show me the money: Still, of those in favor, only 45 percent were willing to pay higher taxes to fund such a program. Most people expected businesses that have adopted AI—and, presumably profited from that adoption—to provide the money.

    But says MIT’s management researchers, convincing businesses to foot the bill for their own innovation is going to be a hard sell. As for whether universal basic income even works, a new 12-year study started by MIT Sloan will give us a good clue. As we have said before, when you look closely, there are some major flaws in the idea.”

  6. Edward Ross
    February 18, 2018 at 3:52 am

    in response to Dean Baker’s above post and Robert Locke
    February 13,2015 post at 3:09pm .
    ” it is to late . IN1970 socialism was in power in the Eurasian land mass. It collapsed . Nobody believes in it anymore. So where are you going to institute this bon-viveur socialism? Socialism blew its historical chance and you don’t get a second chance. So use your imagination and come up with something else, and don’t call it socialism. Get another word that con move the masses.”

    Craig also made some supportive comments on the subject.

    Ken Zimmerman February 15, 2018at 6:57 am ,
    “A gallup study from April shows Americans have shifted their support toward socialist -type policies, with 52 precent of Americans now saying the governments should re distribute wealth by placing higher taxes on the rich -the greatest support for wealth distribution that has been measured since 1940.”

    Although I am not an academic I am old enough to have many friends who had experienced and suffered under socialism, where they had lost family members and friends. Thus I get seriously concerned when academics use the term socialism without specifying the way they are using the word. For example are they using the word to describe social conscious or are they using the word to describe a political ideology. I raise this issue because here in Australia the liberal national coalition government who follow explicitly neoliberal mainstream economic policy endeavour to create a rejection of the opposition labour political party supporters by accusing those with a social conscious that they are entertaining dangerous socialism that must be avoided at all costs. Here I wonder if this rather ambiguous use of the word socialism is something like a fence sitter avoiding serious conversation in order to avoid declaring their position.

    To me this raises the question of language and how it is used. Again because of my short memory I cannot remember who stated in a post the value of understanding several languages often increased ones understanding of a subject. On this subject I remember my days in the 1970s in Papua New Guinea in the former Germany territory, but the spoken language at that time was described as pidgin English. However as I understood it many words had their origins in German for example house sick, was hospital. house school was school. house calaboose was jail. The point here is that although many expatriates ridiculed pidgin as an infantile language it worked extremely well in commuting with local people because nothing was implied. In a similar vein I often working as foreman or supervisor in construction one had to be very specific in explaining what one wanted the worker to do to avoid disaster.

    As for those who suggest that some sort of benevolent socialism could replace capitalism and democracy they have either lost the plot or have a hidden agenda. However Although I am a firm believer in the principles of democracy and capitalism. I also believe that without rules the rich will destroy two of the main planks to a peacefully caring society.

    • robert locke
      February 18, 2018 at 8:06 am

      Edward, I studied modern European history, concentrating on the 19th-20th centuries. Then I taught this history for several decades. Point, we all became familiar with the various forms that socialism could and did take. Afterwards, university study programs changed, Europe lost ground and new subjects, greatly influenced by postmodernism came into being. But for the educated generation that emerged from the war the subject of socialism was very pluralistic. I just assume, for the older generation at least, we don’t need to rehash history all the time. Don’t we know anything about the past these days?

      • February 18, 2018 at 1:40 pm

        Robert is correct. My father’s generation took socialism seriously. Many supported it strongly. And his father’s generation nearly went into open civil war to create such things as labor unions, the 8-hour day, 5-day work week, health insurance and other job benefits, fair grievance processes, etc. All considered at the time not just socialist but subversive.

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