Charlie's Diary

Er Charlie, there's been little difference in the actual party positions for years.

And people wonder why there's voter apathy...

Posted by: Andrew Crystall | May 30, 2007 12:11 PM

Of course. They could suck up to George Bush much better.

Posted by: Arthur D. Hlavaty | May 30, 2007 12:23 PM

Andrew: actual position vs. tribal loyalty is another matter. (And yes, I know Blair is the best damn Thatcher-successor the Tories never had and they've been green with envy for the past decade.) What this suggests is that not only is the actual cross-party consensus there, but even the tribal battle-lines are getting a bit blurry.

One party state with two heads, anyone?

Posted by: Charlie Stross | May 30, 2007 12:26 PM

Or as the sadly not immortal Bill Hicks put it,

I think the puppet on the right shares my beliefs
I think the puppet on the left is more to my liking
Hey, wait a minute there's one guy holding up both puppets
Shut up
Go back to bed America your government is in control

Posted by: Jon Rubin | May 30, 2007 1:34 PM

This may be a serious mistake. Is there any evidence that the public actually like "Blair's reforms" - foundation hospitals, ID cards, creationist used-car salesman schools - as opposed to "Blair's spending"?

Posted by: Alex | May 30, 2007 1:43 PM

Re,Post #5: I've discovered that most cultures seem to like all the nice social programs, i.e. health, education, national security, but not when their taxes go up and up and up...

Americas are wondering why they cann't have free health care and social security and lots of other things. The answer is, no one wants to pay for it! (I pay enough taxes G-d Damit!)

We have a plutocratic-neo-aristocracy in America,(I think Britan just has a plutocratic-aristocracy.) We need to tax the hell out of this 1% of the population, which would leave them only slightly less filthy rich.

Jeff

Posted by: Jeff Minor | May 30, 2007 7:28 PM

Jeff: my pet project would be a progressive income tax.

Currently in the UK there are two bands -- 25%, and 40% (which cuts in around the £30,000 mark, i.e. way lower than in the USA).

The marginal utility of money diminishes the more you have, so I'd like to see a logarithmic scale that recognizes this. The 40% rate could stay around 50K, but I'd like to see supertax brackets: 50% on income over half a million per year (note: that's about US $1M in pay), 60% on income about 5 million, 70% on income about 50 million, and 80% thereafter on 500 million or more.

(Oh, and a shitload less stock-option related avoidance loopholes, so that if an executive is being paid £300,000 in salary and £3 million in shares, they get taxes on £3.3M.)

Of course, the city will scream -- but how many people do you know who would be affected by a 50% bracket that cuts in if their take-home pay goes over a million dollars a year? This isn't even going to touch most paper millionaires: but it's good for annoying the hell out of the likes of Conrad Black.

Finally, the US needs to bring back inheritance tax. That's what broke the back of the British aristocracy, between 1945 and 1979; no better tool exists for shaking up hereditary nobs and their sense of entitlement. Here in the UK we've still got it (indeed, it's set at an unfeasibly low threshold -- about 50% more than the value of an average family home), but it's no accident that one of the first things Bush did in office was to abolish it.

Posted by: Charlie Stross | May 30, 2007 7:56 PM

Charlie,

forget about taxes. Simply invoke an income funktion that states how much money you'll get by the end of the month on the basis of the amount of the money you earned. That would do away with quite a bit of the mess that tax and welfare systems are in these days. Also politicians would have a much better control over social dynamics* in terms of income.

(*People are much more likely to take up a job if they actually earn more money afterwards. With welfare organized as money for the jobless you face the problem that you'll get less or not all that much more money in return for your taking up a job. The whole thing has some resemblence with thermodynamics, welfare recievers being in the solid phase, the broad middle class liquid - that is flexible but bound to work and the rich (kind of like gas) with work being an option, not a necessity. As with thermodynamics the transition require copious amounts of energy without any obvious returns in terms of increased available founds/temperature - until you made the jump and got in the other phase. The whole thing works the other way around as well. And btw. any sudden change in the incomefunktion creates second order phase changes - so do away with the old "progressive" taxation, use smooth curves.)

Posted by: TP1024 | May 30, 2007 8:41 PM

They had the gall to bring up the Waldon Family (the children of the founder of that millstone of small businesses, Walmart) in the context of the "death tax."

Posted by: B. Dewhirst | May 30, 2007 8:41 PM

Someone (and I'm sorry, I forget who) once said that Margaret Thatcher's real legacy was Tony Blair, so I suppose there's a certain symmetry in Blair's legacy being David Cameron.

Posted by: Dave Hutchinson | May 30, 2007 9:11 PM

Charlie Stross @ 3

One party state with two heads, anyone?

Might not be too bad, depending on which head they do the thinking with.

Posted by: Bruce Cohen, SpeakerToManagers | May 30, 2007 9:17 PM

Ideally they'd keep each other in check. Oh, that's...aaargh!

Posted by: Alex | May 30, 2007 11:42 PM

Finally, the US needs to bring back inheritance tax.

It depends at what level you want to bring it back at... Most middle class families have a million or two dollars now when they die, when you count property and various retirement accounts. You get situations where the kids have to sell off the old family home to pay the taxes on inheriting it, which is always unpopular. If you set it at $5 million or so, pegged to inflation, that wouldn't be so bad. Alternatively you could adjust it based on the number of children inheriting. Obviously you aren't going to get the same problem with old-money families if there are 5 kids inheriting $5 million vs 1 kid inheriting it. But I don't really think hereditary nobs are much of a problem here in the US. I live in a state famous for them (Connecticut), but they don't really affect my life at all (other than being a major funding source for where I work). On the plus side, I guess an inheritance tax might be an incentive for them to will even more money to my employer... :)

my pet project would be a progressive income tax.

As for taxes in general, personally I'm in favor of a low flat tax, and no inheritance tax. Something like 25% for everyone, on all income (earned or via stocks, etc.) over $25,000 with no deductions. Even better would be a negative income tax, but I don't think anyone could ever explain that to the US public well enough to get them to support it.

A universal sales tax with exemptions for food and clothing under $100 would be the most fair, but I doubt it would ever be workable -- once you get to a certain level of sales tax, it becomes worth it to dodge the tax and a black market develops.

Posted by: Andrew G. | May 31, 2007 12:01 AM

Generally the people with lots of money are good at using resources efficiently or they wouldn't have it. Governments are not famous for using resources efficiently. Progressive tax makes us all poorer.

Posted by: Daniel Berntsson | May 31, 2007 7:49 AM

So do you give all your money to Bill Gates then?

Posted by: Alex | May 31, 2007 10:40 AM

If the aim is maximum economic growth nobody should get more money than they can earn for themselves. General growth is not the only priority but it is pretty high. 6% annual growth triples our wealth in 20 years. If taxes lower it to 4% it only doubles. That is a huge loss, growing exponentially.

Posted by: Daniel Berntsson | May 31, 2007 12:21 PM

Daniel B: welcome to my journal ... now, what makes you think governments are inefficient and rich people aren't? Hint: money lets you buy commodities -- including politicians, and laws to let you collect rent. This may be efficient in some abstract sense, but it's hardly productive or useful for society at large.

Also: why should we aim for maximum economic growth? Maximum economic growth that trashes the places we live in and requires us to work like slaves is counter-productive. I'd rather aim for maximum happiness: it's harder to quantify on a balance sheet but much more useful overall.

Finally, you seem to be ignoring all sorts of externalities -- such as the kind of infrastructure that individuals and companies (who work on a time scale measured in months and years) can't maintain profitably. Like sewerage systems that need replacing every 150 years, or railroad tracks that need replacing over a 30 year period, or roads that need repaving every decade. Economic growth tends to be dependent on infrastructure provision, and if the difference between your 4% growth rate and 6% growth rate is the tax required to fund educating the work force and building the roads and infrastructure your economy depends on, you're going to throttle your economic boom well before that 20 year period you're talking about. And end up living in a shit-hole to boot.

Posted by: Charlie Stross | May 31, 2007 1:07 PM

Charlie - well, the other representative democratic working model seems to be one party with lots and lots of heads (coalition governments). I'm not entirely convinced it's better.

I'm not sure about fundamental tax reform, but "benefits" should be taxed identically to income, and there should be breaks for people investing rather than hoarding wealth.

Posted by: Andrew Crystall | May 31, 2007 1:35 PM

C.S., you commented on Tax loopholes, of which the US tax code is so full of that it allows very expensive tax lawyers to make huge amounts of money for their very wealthy clients. The lawyers tend to become quite well off also. It's insane that many individuals with incomes over 100 million $ a year can --in many cases -- avoid paying much of their fair share. Our tax codes are designed to protect wealth.

I just learned how to avoid paying a death tax on our family summer home, which is now in my father's name. He will transfer the title to me and I will allow them to stay there just as they do now (they trust me?). In seven years (my father has to live for at least seven more years)I then get the house free and clear. No tax. Thank you US tax code. I will then convert this big house in the country into a retreat for young women who need to get away for a while(pregnant teenage sluts). I will then take the current value of the property and take the charitable deduction off my federl taxes, and can spread that deduction over a number of years.

Jeff

Posted by: Jeff Minor | May 31, 2007 2:02 PM

Thank you, love your books. Governments are inefficient because they are monopolies and because they spend other peoples money for them and not their own. The solution to the problem of corrupt laws is less sellable power, not making everone else so poor or politicians so rich that interest groups can't afford to buy politicians.

Economic growth is more efficent use of resources. This is one reason why there is the least pollution in the richest places. We work less now that we are richer than a century ago (or in poor regions today) when you had to work a lot longer and harder simply not to starve. But let's aim for freedom so everyone can maximize what they want.

Private companies happily built railroads in the 19th century before the wave on nationalizations. Recently they built the wonderfully anarchistic internet. They can probably build roads and sewers too.

Andrew Crystall: Practically all wealth that is not consumed is invested. Very few people buy, say, warehouses full of washing machines just to let them stand and collect dust.

Posted by: Daniel Berntsson | May 31, 2007 3:02 PM

Daniel B:
"We work less now that we are richer than a century ago (or in poor regions today) when you had to work a lot longer and harder simply not to starve."

Actually, we (the American middle class, I assume) work a lot less now than we did back when we did our own work. Now we do "busy work" in cubicles while most of the real work of producing our necessities is done by brown people in other countries. We've even taken it a step further by letting brown people come here to do the work that can't be done anywhere else (landscaping, much construction, low-level service jobs).

I also believe it is debatable as to whether we are richer with iPods than we were with fresh locally produced meats and produce. I think I'd rather skip the iPod and DVDs if they come along with e-Coli and exploitation.

I think we as a nation have confused quantity with quality.

Posted by: Stephen A. Russell | May 31, 2007 3:38 PM

Daniel, I'm amused by your unwavering faith in capitalism.

Here's a hint: the country I live in -- the UK -- was near as dammit a minarchist utopia back in the 1850s; no income tax, no sales tax, no social security or pensions or government spending on fripperies like sewer systems and railroads.

Investigating the reasons why this is no longer the case may shed some illumination on what people really want. Or, to put it another way, the poor man's cholera bacteria are no respecters of the rich man's bank balance.

Finally, another hint: I'm not terribly interested in the United States' finding a way out of their collective problems, except insofar as I might be affected if the dollar tanks of the neofascist lunatic fringe gain [more] power.

Posted by: Charlie Stross | May 31, 2007 3:56 PM

C.S., Most Americans, per ce, are probably not too terribly interested in the ecconomics of any other country other than their own, and even that's quite questionable. I think I'm very interested in European index funds and have done well by investing in them. We can always bennifit from some other country's ecconomic down turns (even if it's our own) if we know how to invest well. This is part of the global ecconomy. I suggest a cyrstal ball and a good summoning grid for accurate market predictions. Or some software that can do close to the same thing, which I wrote.

Jeff

Posted by: Jeff Minor | May 31, 2007 4:20 PM

While I agree that it's handy to go back to the C19th to find out why all this collectively-provided stuff tends to be demanded ("Make it _illegal_ to put sand in flour? How dare you sir!"), actually we did have income tax in the 1850s. Came in for Napoleon, abolished in 182mumble, brought back in 184thing.

Daniel, are you sure that it was private companies that built the internet? I keep thinking about DARPA, and CERN, and JANET, you see...

Posted by: Chris Williams | May 31, 2007 4:40 PM

Incidentally, I should clarify something: I have lots of American friends and like to visit, so I'd be quite happy if you could sort things out. (I'd be even happier if that involved stopping invading other countries "for their own good" just to keep the wheels of the military-industrial complex turning.)

A secondary issue is that most places I visit in the USA are striking for their run-down infrastructure. Pot holes in well-used roads in business districts that are big enough to swallow cars, abandoned buildings rotting by roadsides, slum districts that are just unbelievable. Something's gone badly wrong with the way the US government (at its various levels) spends its funds; $883M for a midget submarine that doesn't work, and you still can't catch a train from New York to Washington DC in 3 hours (which you bloody can for equivalent trips in Japan, and soon in most of mainland Europe).

Chris: I think Daniel is thinking about the Internet's origins in Delphi, Compuserve, and Microsoft's Blackbird.

Posted by: Charlie Stross | May 31, 2007 4:47 PM

Stephen: (Everyone with an internet connection, Swedish lower middle class personally.) Buy locally produced stuff and make brown people unemployed if you want but please don't make the police throw them and their goods out by force. And read In Defense of Global Capitalism by Johan Norberg.

Charlie: I don't know much UK history but wasn't it the usual tragedy of the commons? Everone tries to get the government to make everone else pay to them. And wierd trends like fascism or religious movements, how does that work?

Chris: Of course governments have been involved but really, the internet is not built or run by governments.

Posted by: Daniel Berntsson | May 31, 2007 5:01 PM

Bah. Money sucks. Bring on the Bitchun Society post haste!

Posted by: Russell Dovey | May 31, 2007 5:08 PM

Daniel (#26)

You assume that I want to throw the brown people out of the U.S. I never said that, although I could see how you could make that leap especially since there's been much rhetoric flying about on the subject lately.

I still have mixed emotions on how illegal immigration should be handled. I have yet to see a public figure speak honestly on the subject and everyone seems to have an ulterior motive.

Illegal immigrants would suffer if we simply threw them out, but letting them stay illegally allows them to be exploited. Business and individuals benefit by hiring illegals for less than the minimum wage. Naturalizing the illegals in the U.S. would counteract the stated benefits of having them here. It's often said that Mexicans are doing the jobs that Americans are unwilling to do. What happens when minimum wage laws apply to the former illegals?

America benefits greatly by exploiting those who can't complain about illegally low wages. We also benefit by exploiting cheap foreign labor. If our borders were open we could not have the artificially high standard of living we enjoy. The only way we have kept our position in the world is by being an exclusive club.

I don't really have any firm conclusions, just observations. Ideally, we would open our borders and remove all tariffs and let the global market decide our standard of living. I just don't think that most Americans are prepared to accept an income equal to the global average. With that being the case, fairness is hard to find.

Posted by: Stephen A. Russell | May 31, 2007 5:20 PM

How can this be an issue in the USA, founded on immigration, the statue of liberty "send me your poor homeless masses" and all that?

Reopening the borders will increase your standards of living. Tariffs don't make foreigners send you valuable things, only getting something in return does.

If immigrants get to stay legally and be covered by minimum wage laws they either will become unemployed and even poorer or they will continue to work illegally. They will probably choose the latter but what harm is done by making it legal for them to live where they live?

Posted by: Daniel Berntsson | May 31, 2007 5:51 PM

"And read In Defense of Global Capitalism by Johan Norberg."

-- capitalism is like fire, a good servant but a bad master.

Specifically, political democracy means 'rule by the people'; in reality, that always means and can only mean 'rule by A people'; Magyar people in Hungary, Polish people in Poland, French people in France, and so forth.

Britain is still having problems over the distinct identities of Scots and English, despite 400 years of dynastic and 300 years of political union... and the Scots and the English are very similar.

'A people' means a specific, historically grounded community of shared history and identity residing within the boundaries of a sovereign state.

These are the people who _own_ the country and have a right to run it just as they please, and to establish whatever conditions they please for entry. Social obligation stops sharply at national frontiers; beyond that your only obligation is not to wantonly attack or defraud, and that's iffy.

Posted by: S.M. Stirling | May 31, 2007 5:53 PM

Charlie: A secondary issue is that most places I visit in the USA are striking for their run-down infrastructure.

-- actually it's more accurate to say that much of Europe spends far too much on some types of infrastructure, irrationally misallocating capital.

Note that France, which has much better passenger trains than Britain, consistently performs rather worse economically; it has twice the unemployment and even higher ratios of youth unemployment.

This is not a coincidence.

There's been a great deal of spending on railways in the US in the past decade, but it hasn't been wasted on glossy prestige projects; it's gone into new freight capacity, where it earns a profit.

"Something's gone badly wrong with the way the US government (at its various levels) spends its funds; $883M for a midget submarine that doesn't work, and you still can't catch a train from New York to Washington DC"

-- no, the real point is that the US government at all levels spends much _less_ than its European equivalents; about half the percentage of GDP, on the whole.

This has all sorts of positive consequences; higher rates of job creation, more R&D spending, and so forth and so on.

The US has a little over 30% of the global GDP but spends about 50% of the global R&D budget; the endowment of the richest US university produces funds equvalent to the entire budget for higher education in the UK.

US _government_ spending on R&D is about equivalent to European levels. _Private_ R&D is much higher, which makes the difference.

Posted by: S.M. Stirling | May 31, 2007 6:06 PM

Charlie: Also: why should we aim for maximum economic growth? Maximum economic growth that trashes the places we live in and requires us to work like slaves is counter-productive.

-- because of the magic of compound interest. It may not matter all that much if your per-capita GDP is 15% less.

When you hit 50%, it starts to matter a lot; and the magic of compound interest ensures that it does. Wealth translates into clout and power; without it you become, at best, an irrelevant backwater, or more likely a cesspit in which the survivors eat each other like crabs in a bucket.

Capital flees; so do talented people. Why do you think there are nearly 500,000 French people in London? They're not there for the great food, fast clean trains, the climate, the quaint architecture, or the relaxed and pleasant pace of daily life... those are the reasons Brits go to France. They're there to _make money_.

Posted by: S.M. Stirling | May 31, 2007 6:15 PM

Charlie: The 40% rate could stay around 50K, but I'd like to see supertax brackets: 50% on income over half a million per year (note: that's about US $1M in pay), 60% on income about 5 million, 70% on income about 50 million, and 80% thereafter on 500 million or more.

-- go right ahead, but don't complain at the inevitable results; take a look at the wonderful economic climate of Britain in the 1970's for a hint.

Capital is mobile. Very highly paid people are mobile. They won't stay still to be fleeced; they'll just pick up their toys and move.

Ratchet up taxes to that level and capital will flee; that which remains will start gaming the system like mad (and will always, in the long run, beat the civil servants) and thus reducing overall economic efficiency; government revenues will decline as the economy does. Whereupon everything goes down the toilet in a splendidly classic example of a negative feedback cycle.

It's a mystery that intelligent people don't realize all this is _automatic_. It's like pulling on a rope connected to a bucket -- 100% predictable.

Posted by: S.M. Stirling | May 31, 2007 6:22 PM

S.M. Stirling: *googling* The original quote is

Government is not reason, it is not eloquence — it is force! Like fire, it is a dangerous servant and a fearful master. Never for a moment should it be left to irresponsible action.

by George Washington.

Posted by: Daniel Berntsson | May 31, 2007 6:27 PM

Re #25 & 27, Well, it seems you've been to Detroit. The Bitchun Society it ain't. Although parts of our city might pass for haunted house theme park attractions. There is actually a new "urban archeology" group that will take people on guided expeditions through some of the the uban ruins that dot the city scape. And of course our city is sometimes used to film dystopian sf films such as The Island. Decay has its attraction.

Jeff

Posted by: Jeff Minor | May 31, 2007 6:31 PM

Stephen: We also benefit by exploiting cheap foreign labor.

-- no, we don't. Nobody is "exploiting" the factory workers of Guangdong, except possibly their own government.

If we didn't buy the products of their labor, they'd be worse off, back in the village trying to make a living off .3 acres of rice and six cabbages each with its own full-time worker.

Obviously they think they're improving their standard of living by moving to town and getting jobs in the factories; otherwise they wouldn't do it.

Since they're better off because they trade with us, we're not exploiting them. QED.

The only 'fair' price for anything is what you can get in an open bargain, neither more nor less. We owe them nothing beyond that.

"If our borders were open we could not have the artificially high standard of living we enjoy."

-- immigration is a privilege, not a right. Nations belong to their citizens, who have an inalienable right to control them, including controlling the conditions of entry for outsiders. They owe foreigners nothing and are under no obligation to allow them in if they don't want to.

Posted by: S.M. Stirling | May 31, 2007 6:31 PM

S.M. Stirling: "Stephen: We also benefit by exploiting cheap foreign labor.
-- no, we don't. Nobody is "exploiting" the factory workers of Guangdong, except possibly their own government."

That would be true if there were no such thing as a multi-national corporation. When a U.S. based company puts a factory in a foreign country and pays less than they would have to in the U.S., that's exploitation. Otherwise, they would pay the prevailing U.S. rate and take less profit. If it were simply a matter of a sovereign nation running things as they saw fit and the U.S. buying from them, I wouldn't have as much of a problem. It would still be wrong of that country to take advantage of it's own citizens but until we have a perfectly fair society the extent to which we can dictate conditions in another country is limited.

While people in some countries may now be better off working in factories I have to wonder true that would be if the introduction of factories hadn't altered the local economy. We didn't have mass starvation in America prior to the industrial revolution. We are more efficient producers but corporate profits don't necessarily equate to quality of life for the worker bees.

I also think that the idea that "immigration is a privilege, not a right" makes sense only if you ignore some variables. Hypothetically, if we were to make an agreement with a foreign country to remove natural resources and pay the foreign officials very well to do it resulting in the local population not being able to support themselves, would we still be ethical in sealing our borders against the resulting refugees? If our actions only affected our own citizens it would be fine to say that we run our country and you run yours. However, that seems simplistic to me. I'm not saying that we have any legal obligation to share what we have with foreigners. I just think it takes a special kind of person to ignore the suffering of others under the theory that they aren't breaking any rules so no one can make them care. If you're an automaton that makes sense but a human being has to occasionally ask themself if they are being a decent person, not just acting within their rights.

Posted by: Stephen A. Russell | May 31, 2007 7:20 PM

P.S. I'm not sure if my comments apply to Guangdong. They may well be exploited by their own government, in which case we may not be responsible for their exploitation. I still say though that there are many cases where corporations are directly exploiting the citizens of foreign countries, not just dealing with their government.

I have to assume that you are also opposed to "regime change" in foreign countries based on humanitarian issues, such as Saddam Hussein using poison gas on his citizens, since that is between the government and citizens of a sovereign nation.

Posted by: Stephen A. Russell | May 31, 2007 7:35 PM

Jeff Minor, to be fair that provision also exists in the UK. You can even set it up legally so that your parents have the exclusive right to determine who can live in that house, and that only reverts to you when they die.

S.M. Stirling, and that's one reason why I'm happy I'm a citizen of the European Union, a vast state and free trade zone, with large zones which are not fully developed by first world standards, and have great economic growth potential. As well as the United Kingdom.

Posted by: Andrew Crystall | May 31, 2007 7:58 PM

Stephen: If an employer exploits an employee if there exists some other person in the world willing to do the same job for higher pay then don't all employers exploit all employees all the time?

Posted by: Daniel Berntsson | May 31, 2007 8:03 PM

I pretty much agree with what Steve said, though I think it could be taken even further.

In theory everything provided by governments could be provided by private industry, better and cheaper. I fear the transition from one system to the other wouldn't be pretty however.

Posted by: Andrew G. | May 31, 2007 8:13 PM

That would be true if there were no such thing as a multi-national corporation. When a U.S. based company puts a factory in a foreign country and pays less than they would have to in the U.S., that's exploitation.

You have an odd idea of what exploitation is, unless you're using it in the neutral sense of using a resource.

A US company putting a factory in a low-wage country is just a US company putting a factory in a low-wage country. There's no exploitation, only benefit. Workers get better jobs, consumers get lower prices, and companies get larger profits.

Now, workers in the US might complain because they can't work for wages that low, so they've lost the opportunity those jobs represent. But they have no right to force others to pay more for goods just because their labor is more expensive.

Posted by: Andrew G. | May 31, 2007 8:16 PM

Daniel (#40),

You raise a very good point and I admit I was only looking at the issue from one direction. On reflection however it occurs to me that the distinction depends on the goods being produced in one location and sold in another. If a U.S. company produces their goods in a 3rd world sweatshop with wages based on that local economy, then sells the goods at exorbitant prices back in the U.S., then yes, I would consider that exploitation.

That's not the same as purchasing goods where they are cheaper and selling where they are worth more; that's the definition of trade. The difference as I see it is that some goods are cheaper due to a different climate or availability of natural resources and may be traded at a profit ethically. If the relative value of the goods is due to a lack of opportunity or representation on the part of the workers, then that is exploitation.

There are fine lines and shades of grey involved. I don't pretend to be perfectly correct. I am just very bothered that many people seem to have no problem living better than others due to chance circumstances and then pretending that they deserve their higher standard of living. Americans are not intrinsically better or more deserving than Africans (or Germans vs. Salvadorans, etc). Some people are lucky enough to be born somewhere prosperous. I just get the feeling that Stirling figures, "Well it sucks to be you" and goes on with his life. That may not be true, but that's how it sounds to me. It's easy to cite examples of people that pulled themselves out of the ghetto or moved from a 3rd world country to the 1st world and improved their prospects. Those are exceptions to the rule though. The truth is that the circumstances of one's birth have a major effect on their potential for fulfillment and happiness and it doesn't make me feel good to know that some people are suffering to support the gluttony of others, even if I can argue that you don't have the right to force me to care.

Posted by: Stephen A. Russell | May 31, 2007 8:18 PM

Here's a hint: the country I live in -- the UK -- was near as dammit a minarchist utopia back in the 1850s; no income tax, no sales tax, no social security or pensions or government spending on fripperies like sewer systems and railroads.

Sure, the US was too -- a lot of countries were. You could pay for everything with property tax and tarrifs, which meant only the wealty paid taxes really. And it worked well enough that the UK was the leading ecomonic power of the century, and along with the US was one of the fastest growing economies in the world.

And while we might not like the conditions of our countries 150 years ago, they were far better than most of the rest of the world. England had issues with class that the US didn't, but we were both much better off than the average Italian, German, or Russian.

Posted by: Andrew G. | May 31, 2007 8:20 PM

Andrew (#42)

I see what you are saying and I think I understand why. I think you are assuming that a "low-wage country" exists in a vacuum. I think you need to ask why that country is "low-wage". My post #43 also partly addresses your comment. The exploitation is due to the fact that the company is based in the U.S., sells their goods in the U.S., but takes advantage of a weaker local economy to get cheaper labor. I also think it's important to remember that the motivation for putting the factory where it is, is that profits will be higher. To me intent is very important. A company that could be profitable in the U.S., or put a factory in the 3rd world and pay U.S. scale wages instead chooses to pay the local wage regardless of the effect on the local workers or economy in order to increase profits. Corporate growth rates and profit increases may be a game where dollars are like points if you are an American CEO but for somebody trying to feed a family in the 3rd world it's far from a game.

Again, just because there aren't laws limiting corporate profits doesn't make it ethical for a company to maximize profits with no concern for the effects of their policies.

Posted by: Stephen A. Russell | May 31, 2007 8:29 PM

Stephen: I fully agree there is a moral duty to help those in need. The thing about trade, including trade of labor, is that you don't help anyone by refusing to trade with them. The reason they want to trade is because it benefits them.

Take China. There people have had a serious lack of opportunity and have been living in poverty and misery under communism. For a long time there was no way to improve your situation so when the government started easing the restrictions and allow businesses people were willing to work for almost nothing. Foreigners can make huge profits by producing cheaply in China and selling expensively at home. The result of the big profits is a gold rush to China with companies competing to be the first to pour in the most investments to reap the profits before anyone else beats them to it. For the chinese workers this means skyrocketing wages and living standards and hundreds of millions of people being lifted out of poverty in just a few years. This is good.

Posted by: Daniel Berntsson | May 31, 2007 9:20 PM

Again, just because there aren't laws limiting corporate profits doesn't make it ethical for a company to maximize profits with no concern for the effects of their policies.

Companies aren't sentient beings (yet). The *only* ethical thing they can do is to maximize profit. Anything else and they are cheating their investors.

Now, it often pays for a company to appear to behave ethically. And treating employees well makes good business sense for a number of reasons. But there's no ethical consideration there.

Plus, there's competition to consider. If company A won't lower the cost of production, then company B will and will likely take much of company A's business away. The primary concern for consumers (in the US anyway) is price, followed by aesthetics and quality. There's a niche market for ethical products (ethics are in effect part of the product of the company), but it's not something you can build an industry dominating business on.

Posted by: Andrew G. | June 1, 2007 12:02 AM

Andrew G.,

Not that it stopped google from claiming it did.

Posted by: Andrew Crystall | June 1, 2007 12:47 AM

Andrew:
"Anything else and they are cheating their investors."
and
"There's a niche market for ethical products (ethics are in effect part of the product of the company), but it's not something you can build an industry dominating business on."

I guess that's where we differ. There's no room in my world for people who hide behind an imaginary abstract entity and abdicate their responsible to be ethical human beings to an imaginary construct.

Maybe I read you wrong but what I got from the above quotes is that it is ok to screw anybody you want as long as they aren't your investors and the decisions made by any constituent human members of a corporation are not the responsibility of the individual but of the non-sentient corporation. It's the same old, "I was only following orders" defense again except this time the orders come don't even come from an actual person.

If the ultimate goal is to be the mindless servant of a business and to make it "industry dominating" then I guess there's no room left for sentimental concepts like morality. If that's the prevailing attitude then I think Charlie can stop waitng for the post-humans to arrive since we've already sold our humanity in return for special edition DVD box sets.

We have met the post-humans, and they is us.

Posted by: Stephen A. Russell | June 1, 2007 12:49 AM

Stephen,

I guess what I'm getting at is that ethics can only be applied to people. The question you raise is a good one -- who is responsible for the actions of a corporation, the employees or the owners (shareholders)? Legally, the shareholders aren't liable, that's one of the original rationals behind corporations. And yet while they may not be legally liable, some people do feel ethically uneasy about investing in companies that act in ways they don't approve of -- that's why there are various ethical mutual funds for investors.

Which brings us to something that is becoming increasingly obvious to me -- ethics & morallity are just another commodity to be bought and sold on the market. If society values ethical behavior, then corporations will value it as well. But only if they value it more than they do other things, such as low price or trendiness or convenience.

The "Buy American" meme is an example. You'll see the occasional commerical in the US encouraging people to buy American products over foreign products. And there are some who do, out of patriotism or whatever, even if the product costs more or is of lower quality. The idea of supporting American workers has a tangible value to them, where as to me it doesn't.

Posted by: Andrew G. | June 1, 2007 2:36 AM

Charlie, going back to your #25: what places in the USA are you visiting? Maybe the UK puts its roads and sewers on the national budget, but in the US items like that are paid for by city and county governments.

And I think the reason why there isn't a fast passenger rail service going from Boston to Washington (where it would make economic sense) is that there's a slow passenger rail service going from Boston to Washington, and between every other pair of cities in the US, which is owned by the federal government and legally obliged to serve every city in the US. The money spent to send passenger trains from Seattle to Dallas would be far better spent upgrading tracks in the Northeast, but Amtrak can't spend it that way because its budget is controlled by Congress.

Posted by: Michael Brazier | June 1, 2007 4:00 AM

Also, rail has had to compete with private cars and with planes for a long time. Most people would rather drive -- even now gas is half the cost in the US that it is in places like Germany. It's usually cheaper & faster to drive than to get a train ticket.

And until 9/11 at least flying was much faster and just as cheap. A lot of people would fly from Boston to DC, it's only an hour flight or so.

Looking at tickets, unless you're trying to get them at the last minute it's about 50% cheaper to fly than to take the fastest train from Boston to Washington. It takes 1.5 hours to fly, and about 6.5 to go by train. Driving would be cheapest, about 1/2 the cost of flying but it's an hour longer than taking a train according to Google Maps.

So that's the main reason passenger trains are out of favor in the US -- they're the least efficient use of resources. Freight trains are another matter, of course -- plenty of those.

Posted by: Andrew G. | June 1, 2007 4:28 AM

Historical note: in fact, the total share of GDP taken by government in the UK remained fairly stable between 1815 and 1914; up a little at times (during wars), down a little at times.

And there was an income tax all that time except for a brief gap between the 1820's and 1840's. It was reintroduced by Peel when customs duties were lowered with the introduction of free trade, and even Gladstone couldn't get rid of it.

Posted by: S.M. Stirling | June 1, 2007 7:05 AM

Stephen: When a U.S. based company puts a factory in a foreign country and pays less than they would have to in the U.S., that's exploitation.

-- sigh. No it ain't, any more than paying the local price for aluminum or electric power is.

You do know why wage costs differ between countries, don't you?

And that if workers in Guangdong were paid American levels of wage, there wouldn't be any jobs at all, and they'd starve?

"Otherwise, they would pay the prevailing U.S. rate and take less profit."

-- no, they wouldn't make _any_ profit, and the laborers in question would be _worse_ off.

Cheap labor is what Guangdong has to offer to attract capital. Nobody's going to invest there for the wonderful infrastructure or the reliable court system or the complete security of property.

And without capital investment, you can't get out of the animalistic filth and poverty of peasant existence and start your way up the ladder.

"While people in some countries may now be better off working in factories I have to wonder true that would be if the introduction of factories hadn't altered the local economy. We didn't have mass starvation in America prior to the industrial revolution."

-- no, we had chattel slavery and a third of all the children died by the age of 5.

We also didn't have 1.3 billion people in a country with less good farmland than the US.

Have you ever _done_ any farm work?

"We are more efficient producers but corporate profits don't necessarily equate to quality of life for the worker bees."

-- ah... actually, yes, they do. Living standards are a function of productivity, and no profit = no productivity.

Note that there are no millions of Americans trying to get into Mexico.

"I just think it takes a special kind of person to ignore the suffering of others"

-- oh, puh-leeze. Shall we all hold hands and sing a chorus of Kumbaya?

If you want to reduce the poverty of the Third World, invest money in companies that do business there. That will help them. Or write your Congresscritter to reduce tariffs on textiles.

Posted by: S.M. Stirling | June 1, 2007 7:19 AM

Stephen: "I think you need to ask why that country is "low-wage".

-- yeah. Well, try low levels of skills, lack of entrepreneurial talent or the conditions to encourage same, low productivity, not much accumulated investment, poor and/or very corrupt administration, and a long history of being skint broke.

Every country was a low-wage country once. Poverty doesn't need explanations; it's the default state.

Posted by: S.M. Stirling | June 1, 2007 7:24 AM

Oh, and Charlie -- in the 1850's, a big chunk of government revenue was spent on welfare expenses. Google "New Poor Law" and "rates".

Posted by: S.M. Stirling | June 1, 2007 7:28 AM

"I just think it takes a special kind of person to ignore the suffering of others under the theory that they aren't breaking any rules so no one can make them care."

Historically, this kind of person is actually the norm. People who act to relieve the suffering of others, when they aren't compelled to, are rather rare; you only find them often in cultures that explicitly teach their members to regard this as a merit. And even in those it isn't usual. Callousness, like poverty, is our default.

Posted by: Michael Brazier | June 1, 2007 8:33 AM

Steve, I, um ... words fail me when it comes to any attempt to use the terms "welfare" and "Poor Law" in the same sentence. (Where and when I was growing up there were still old folks who were deathly terrified of ever going in to their local hospital ... not for any medical care-related reason, but because it was the old Workhouse, and occupied a place in local history about as beloved as the local konzentrationlager.)

Michael: Callousness, like poverty, is our default. ... And we know better, at least in principle: which pretty much makes it a deliberate sin not to strive to create a legislative and social environment in which callousness is counter-productive for individuals. (Training wheels, if you like. A nanny state, if you don't.)

Andrew G: if corporations will only act to maximize their bottom line within the boundaries defined by law, then that's a damn good reason for legislating to impose standards of behaviour on them. Because we've got a technical term for human (as opposed to corporate) entities who act solely to maximize their own desires without heed for external damage they may be causing to others: "psychopaths".

Posted by: Charlie Stross | June 1, 2007 11:16 AM

Incidentally, the really good source for a picture of Britain as a minarchist utopia is avaiable online:

London Labour and the London Poor

Plenty of good illustrations of how marginal life is when there's no social safety-net at all. Check out the many examples of how employers treat hired labour, or count how many of the beggars and street-sellers interviewed are failed small businessmen. (It's what makes it difficult for me to see the world of "The Difference Engine" as dystopian.)

I assume you've read it, Charlie? Or did you get the bit in "Singularity Sky" about making money by gathering dog turds from somewhere else?

Posted by: Sam Dodsworth | June 1, 2007 1:41 PM

Sam: I got it elsewhere. (This stuff isn't exactly hard to find once you start trying to look into how our great-grandparents really lived, rather than sticking to the biographies of kings and nobles.)

Posted by: Charlie Stross | June 1, 2007 1:59 PM

Charlie: if corporations will only act to maximize their bottom line within the boundaries defined by law, then that's a damn good reason for legislating to impose standards of behaviour on them. Because we've got a technical term for human (as opposed to corporate) entities who act solely to maximize their own desires without heed for external damage they may be causing to others: "psychopaths".

Which shows why you can't apply human standards of behavior to artificial entities like corporation.

I don't think there's a need for strict laws restricting corporations. A general framework, perhaps, but the market will determine just how valuable ethical behavior is, and companies will have to act accordingly or risk loosing profits. Information is easily available today that it would be very difficult for comanies to be overy unethical. It's just a matter of how much people really value ethics, as opposed to how much they say they are. With a free market minarchist state, you have exactly the sort of society that most people want, rather than what they say they want. Anything else is inefficient and false.

Posted by: Andrew G. | June 1, 2007 2:05 PM

For those interested in our current and past ecconomics in Great Britian and the USA, I'm currently reading Niall Ferguson's: Empire, the rise and demise of the British world order and the lesons for global power.

Ferguson looks at the cost of Empire building and some of the pros and cons for society. Very interesting read and not too dense.

Jeff

Posted by: Jeff Minor | June 1, 2007 2:20 PM

Andrew: There is a mechanism to make gold out of shit too. The clever thing about free markets is that they turn the normally destructive egoism constructive. When violence is banned the only way to satisfy egoism is to be nice to others and give them what they want so that they volontarily give you what you want in return.

But yes, in cases where violence is accepted, such as slavery or food animals, markets do horrible things with high efficiency too.

Posted by: Daniel Berntsson | June 1, 2007 2:55 PM

But yes, in cases where violence is accepted, such as slavery or food animals, markets do horrible things with high efficiency too.

Though if that's the case, then those things aren't really horrible by the standards of those participating in the market. Maybe to us, but we're on the outside looking in.

Posted by: Andrew G. | June 1, 2007 3:08 PM

Andrew G:

Are the slaves participating in the market? What do they think? And note that, although Daniel's talking about slavery-by-violence rather than (say) debt slavery, the same problem arises whenever there's a big imbalance of power between participants in a transaction.

Posted by: Sam Dodsworth | June 1, 2007 3:37 PM

For an example of a society based on principles other than constant competition and agression, I'd like to recommend:

Always Coming Home by Ursula K. LeGuin.

I doubt many will take the time to check it out or read with an open mind, but it is a great book and a plausible example of a societal structure not based on mindless acquisition.

Charlie: I don't know if you've read LeGuin, but her style is soooo very different than yours that I think it might be beneficial to your creative process. I'm far from qualified to give you writing advice so I hope it doesn't sound like I am; I just know that it helps me creatively to expose myself to works outside my normal range.

I even have one of Mr. Stirling's books from a used book store that I'll be reading soon. I used to be much more libertarian and I have the impression that he is very much so, so it will be a challenge to try to avoid preconception when reading his work. I look forward to it.

Posted by: Stephen A. Russell | June 1, 2007 4:02 PM

Stephen: yes, I've read Le Guin. (I've also read Isaac Asimov and Robert Heinlein, oddly enough. This might surprise you ...)

This thread is very effectively reminding me Why I Am Not A Libertarian. (I could put it slightly more rudely, but let's just say that I think any ideology that puts abstract principles on a plinth and worships them is already well on the way to building pyramids'o'skulls -- and the dogma of leaving everything up to Market Forces is no different from, say, Mein Kampf or the scribblings of Vladimir Ulianov in that respect, if you pursue it to the logical extreme.)

Posted by: Charlie Stross | June 1, 2007 6:10 PM

Andrew@#61:

With a free market minarchist state, you have exactly the sort of society that most people want, rather than what they say they want.

Erm - no. Even assuming a rational market where the results of composite choices were predictable, you're still assuming that the resulting system maps onto a consensus opinion. In reality:

1. The consequences of many individuals making a particular decision are unlikely to be predictable to the individuals making that decision (chaos)
2. Even where said consequences are predictable, the consequences to an individual of making a different choice based on that knowledge may be such that they reap the benefits only if all other individuals make the same decision. (prisoner's dilemma, tragedy of the commons)
3. The consequences of individual decisions may have unequal impacts of different individuals.
4. Some individuals' decisions might be more influential than those of other individuals.

A free market is just a system for distributing decisions, not a moral shibboleth or the ordained will of the divine Adam Smith. It has the weaknesses described above, and others. Declaring that the results must be right because they're the results that the system has produced is not a rational response to those weaknesses. Nor is abolishing the system. The rational response is to modify the system to discourage decisions that lead to conditions like the race to the bottom - preferably not through punishment (which depends on a system which can reliably detect transgressions, and on participants expecting to be caught (people tend to be optimistic about their chances)), but by shaping the results of a decision so that consequences for the individual participants match the consequences for the commonwealth.

Posted by: Jp | June 1, 2007 6:12 PM

Charlie:

I'm not surprised the you've read Heinlein or Asimov since they are so much in the mainstream. For a long time my thinking was very much influenced by Heinlein. I wasn't sure if you'd read LeGuin just because she is less identified as a Science Fiction author and often moreso as "Literary". As I'm sure you know many genre readers and writers take a somewhat negative view of more "academic" or "literary" writing. I think much of that has to do with Heinlein's statements about commercially successful writing being more admirable than ivory tower literature. I should also clarify my statement that her writing is so different from yours. I didn't mean politically but rather stylistically. I can't really explain it well but I guess you're more plot and fact oriented whereas her writing is often more ambiguous and more poetic. I am tempted to say more Female.

I especially enjoyed your comment at #67 about the dogma of the Free Market. I think that it is often overlooked how much faith is involved. It can get really ugly when a person thinks that their point of view is natural law.I like LeGuin because she doesn't assume that the direction western culture has taken is inevitable, rather it is one direction we could have taken. I was born in 1971 and I think most people of my generation don't realize to what extent we were raised by television and advertising and how it affects our unquestioned assumptions.

I'm looking forward to reading more of your work now since I have some idea of how you think and I'd like to see how it comes through in your writing (other than Singularity Sky, which I've finished and the first chapter of Iron Sunrise). Thanks for giving me books to read.

Posted by: Stephen A. Russell | June 1, 2007 6:49 PM

...already well on the way to building pyramids'o'skulls..

Only if the market calls for them. :)

Posted by: Andrew G. | June 1, 2007 7:54 PM

A free market is just a system for distributing decisions, not a moral shibboleth or the ordained will of the divine Adam Smith.

I know that. Taken to it's broadest extent it's everyone's interactions with everything, the sum of all choices made off of all the information given. At the moment, it's the most efficient system we have. At some point our technology may enable us to model civilization better than having 6 billion poorly networked computers (so to speak). Once you can accurately model what each and every person would choose, you can allocate resources more easily because it's easier to get accurate information in the system.

But for now, it's best to distort the market as little as possible. The way our system works now, someone tries to "patch" something, and then down the line other problems pop up requiring more "patches". Each one lowers the efficiency of the system a little.

Posted by: Andrew G. | June 1, 2007 8:04 PM

Andrew G, if markets were occupied solely by atomized human individuals, all of whom had full insight into their needs and desires, and the ability to rationally make decisions ... then yes, you'd have a point.

Sadly, this ain't the case.

Firstly, not all people are capable of making correct choices most, or even some, of the time. I'm not talking about schizophrenics and senile dementia sufferers here; we all have large areas where we aren't competent to make decisions effectively and seek professional assistance -- and as often as not, we don't even know how to evaluate the professionals we turn to for competence.

Secondly, you or I are probably giants, in buying-power terms (price signaling equaling speech in this scenario) compared to folks who live in countries with poor per-capita GDP. And we're dwarves compared to the ultra-rich. We don't have a level playing field; the more money you've got the more you can get what you want (in a pure market system) and as often as not that's going to include ways and means for grabbing a bigger slice of the pie.

Finally, we're all -- except possibly Warren Buffet and Bill Gates -- bacteria teeming around the feet of the real economic actors, the large corporations. Who are currently legal persons and who have such a huge footprint that their mere presence in the market makes a mockery of the idea that it's undistorted and fair. Giving companies some of the legal attibutes of individuals was, IMO, a horrible mistake: few individual citizens, after all, can rarely pursue a course of behaviour inimical to their neighbours and steamroller them by means of SLAPP lawsuits.

Basically, your ideal of an undistorted free market doesn't exist. It has never existed, and it probably never will -- unless we hit "reset", abolish money and corporations and all existing property rights, and start again from scratch.

Posted by: Charlie Stross | June 1, 2007 8:20 PM

"unless we hit "reset", abolish money and corporations and all existing property rights, and start again from scratch."

Communitarian anarchy? I really like the idea, but short of nanosocialist post-scarcity civilisations, I'm not sure if we can get back to that sort of state.

I'm reminded here of your introduction to Toast, about how the change to an agricultural society is one-way. I suspect that until we make money obsolete, then free-market capitalism might be a similar movement.

Stephen A. Russell@69: I feel that a similarity between Charlie's writing (sorry, Mr. Stross, I hope that you don't mind the familiarity), and Ursula Le Guin's is the abhorence of violence. Glasshouse (and many of Charlie's other books) for all it's brutality, seemed to me to be a book about the paucity of any system that resorts to violence. A sentiment which Ursula Le Guin has often stated in her books.

Posted by: Nick Comber | June 1, 2007 11:54 PM

Charlie, why do you imagine the welfare state makes callousness counter-productive? All the evidence runs the other way: the intricate net of regulations such states create as a matter of course, frustrates those who follow their own judgement and rewards those who obey orders and do nothing beyond them. The wish to help those who suffer is just as disruptive as the wish to pile up wealth; you can't block the latter without blocking the former as well.

Isn't it the main objection to the panopticon, that anything you might do will be examined and judged by rules invented by others, and therefore you dare not do anything that is not specifically permitted? Under a lidless eye callousness becomes the last refuge ...

Posted by: Michael Brazier | June 2, 2007 1:07 AM

Sorry to go back to Charlie's original post, but something just occurred to me. I seem to remember, back when David Cameron took over as leader of the Tory party, that he was widely expected in his maiden speech as leader to give the government a slapping over something (I think it was education, but I could be wrong) and when he got up in the Commons he wrongfooted everybody by saying, `No, it's fine, we think you're doing okay, we'd do the same stuff and we approve of you doing it.'
It was seen as a tactical move at the time, and to be honest Blair did look momentarily nonplussed, which was nice to see. Cameron did say that when his party agreed with the government he would say so, rather than opposing them just for the sake of it, and I wonder if George Osborne's comments aren't just more of the same, which casts them in a slightly different light.

Posted by: Dave Hutchinson | June 2, 2007 1:30 AM

Excuse me while I yawn, Charlie.

This thread seems like a rerun of so many that have gone before. I could exclaim that I am shocked to see rampant libertarianism here, but it certainly doesn't seem difficult for you to round up the usual suspects.

"Why bother?", I ask myself. I think I'd do more good running up another batch of CGI Furry Porn. Somebody might get some pleasure out of it.

And some people get horribly confused by the first bars of "All You Need Is Love".

Posted by: Dave Bell | June 2, 2007 11:43 AM

Sorry, Dave, but whenever I say anything remotely political the lunatics start rattling their cage bars. It's most annoying.

I think for future political posts I'll just disable comments.

Posted by: Charlie Stross | June 2, 2007 11:57 AM

I think it would be as well if I didn't bother reading them. Maybe it just needs some sort of warning tag.

Mind you, I'm led to believe that I'm pretty lunatic about politics myself. I believe in such things as rational thought.

Thought for the day: "Violence is the last resert of the sexually inadequate."

Posted by: Dave Bell | June 2, 2007 1:30 PM

Oh, and I meant it about the CGI furry porn.

Squeee!

Posted by: Dave Bell | June 2, 2007 1:43 PM

I could exclaim that I am shocked to see rampant libertarianism here...

For some reason libertarians *love* Scottish scifi. I don't know why. It may be Ken McLeod's fault, for writing the best libertarian scifi novel ever.

Posted by: Andrew G. | June 2, 2007 2:37 PM

Charlie,

As such discussions go, the political discussions on your threads are models of civil discourse compared to what goes on at many other sites.

Posted by: Steven Rogers | June 2, 2007 2:51 PM

<wittering type=random>
I no longer find it odd to note the majority of people focusing on rates of pay whenever a (foreign|immigrant|illegal) work force is discussed. However, it is depressing that few comment on the opportunity for said work force to realise wealth which is almost inherent in its exploitation (NB: used in the neutral sense of the word) by a wealthier concern.

David Brin had a few choice remarks on the latter in his novel Earth. His examples suggest to me that wealth — as opposed to currency — often flows from the exploiters to the exploited.
</wittering>

Posted by: Christopher Hawley | June 3, 2007 1:39 AM

On a substantive, I think you'll find that the TGV programme is profitable, which in the Stirling worldview invalidates all possible criticism. Also, it ain't the state that "misallocates" capital into French motorways - they are built and operated by private enterprise.

Did he know that a priori and lie, or does he just not know what he's talking about?

Posted by: Alex | June 3, 2007 3:42 PM

Alex: TGV programme is profitable

It may well work in Europe or in other high population parts of the world (it works even better in Japan), but such a system wouldn't really work well in a place like North America. Frace has 3.5x the population density of the US, for any given mile you'll have over three times the potential customer base. And the UK is twice as dense as France, meaning that there's 7x more customers on a route than over here. The only place that's at European levels of population is the Boston-Washington Corridor, which does have profitable train service.

But it gets worse when you consider that gasoline prices are less than half the price in the US that they are in Europe. This means that there's a bigger competition from people driving themselves, reducing the potential train passengers even further. Added to that, car prices are often lower in the US, and cars larger and more comfortable for long trips. These two factors are largely artificial, there's no reason that gas prices and cars in Europe can't be as cheap as in the US. Taxes artificially increase the cost of private travel and vehicles, leading to an indirect subsidy to rail. That's an example of inefficiency.

Posted by: Andrew G. | June 3, 2007 8:35 PM

"why do you imagine the welfare state makes callousness counter-productive? All the evidence runs the other way: the intricate net of regulations such states create as a matter of course, frustrates those who follow their own judgement and rewards those who obey orders and do nothing beyond them."

I can't help but note that when the British invented the Industrial Revolution, they had the most generous welfare state on the planet.

Posted by: Chris Williams | June 4, 2007 12:30 AM

Chris, that's like referring to the tallest building in Dubuque, Iowa. Remember what Charlie said up in #22, about how England was the minarchist utopia in the 1850's? And his remarks on the New Poor Law, which is the "generous" provision for the indigent you're talking about?

Posted by: Michael Brazier | June 4, 2007 2:12 AM

Charlie writes a mean novel, and is a better pharmacist and coder than me. I am a better historian than he is. Check it out then get back to me if you still don't get it.

Posted by: Chris Williams | June 4, 2007 10:10 AM

re: the OP

This isn't exactly unprecedented is it? it seems like politics are getting blurred. Everyone is gathering at the center praising capitalism and The American Way Of Life. No matter if they're "left" or "right". There's only one ideology left these days, and that's capitalism. In the recent national elections in Sweden the former conservative party turned neo-liberal during the 80's won the people over with a very successful campaign saying they were the new workers party. And people believed them!! That says something about how the lines between ideologies have been blurred in the last 20 years...

Posted by: Zoid | June 4, 2007 10:15 AM

C.S., (RE:#77). In some of your stories you describe a "Borgistic" community, which I assume you may like to see evolve. You can try to keep people from going political in your own evolving Borganism, but that's probably not going to happen. People are political animals by nature. Besides, the talk in here has been VERY civil.

Jeff

Posted by: Jeff Minor | June 4, 2007 3:01 PM

Andrew G, may I ask how old you happen to be?

Posted by: Noel Maurer | June 4, 2007 5:06 PM

Noel: 29, why?

Posted by: Andrew G. | June 4, 2007 5:34 PM

Chris, #87: your point is that at the start of the industrial revolution, the Poor Law was more generous than anything anyone else had. Right?

I'd counter this by pointing out that stating that something is the best we've got does not imply it's the best that's possible.

As for profitability as a measure of success ...

I once worked for a multinational that, 14 years after it was founded, turned a profit for the first time. It needed to do so for two quarters running in order to complete its IPO, otherwise they wouldn't have bothered (showing a profit, that is). As long as turnover and creditworthiness rise faster than debt, you can run a business at a loss -- and avoid being liable for taxes levied on profits. This company had grown from a father-and-son startup to a $200M/year software multinational during those 14 consecutive loss-making years.

My point?

Viability is not automatically obvious just by looking at the bottom line on a balance sheet.

Posted by: Charlie Stross | June 4, 2007 6:08 PM

Yeah, that's the one (if you want to get economic history with my ass, you can argue that the one in the Netherlands was comparable, but hey). The point I was trying to make was that yr basic libertarian utopia is a very long way from the actually existing political economy that has served as a substrate for runaway innovation. On this planet, that is: perhaps it's been different elsewhere.

As for the 1850s, yes. The British state, even if you include the local bits, was very small by modern standards. The same can't be said of 1890, incidentally, when local government had put some serious money into infrastructure.

And as for the 1930s, also yes. The (new) Poor Law was hated for a century, with good reason. By the standards of the 1930s it was not very generous. In fact, by the standards of the 1830s, it wasn't either. But like the old poor law, it was an expression of a committment by the British government to keep everyone in Britain (even illegal aliens) from starving to death, and tax property accordingly.

Posted by: Chris Williams | June 4, 2007 8:11 PM

Andrew G: Since your comments showed little recognition of externalities, coordination problems, information asymmetries, or time-inconsistent preferences in either an academic or in a practical form, then your posts came across as being made by someone very young.

You reminded me of a more radical version of myself at age 20 or so.

Apparently I was wrong, and you are quite a bit older than I'd thought. Apologies.

Posted by: Noel Maurer | June 5, 2007 7:25 PM