Monday 26 November 2007

Libertarianism & pragmatism (2)

Turning to the next batch of six questions posed by David Bergland ...

Should government impose tariffs, quotas, embargoes, or other restrictions on international trade?
Pragmatic: No. Free trade is good. Being able to export means that we have larger markets. Being able to import means we can buy things at their lowest price. Both make an economy richer. This is not a zero-sum game - free trade is a positive-sum game.

Should the government mandate a minimum wage?
Pragmatic: No. You can't make employers pay more than a job is worth, they will just go out of business. What a minimum wage does is shut down those industries where the market wage is less than whatever arbitrary figure is chosen. It's a free world - nobody has to take on a low paid job if he doesn't want to. Low earners can be helped best by universal, non-means tested benefits. The effect of taxing profitable businesses to pay for such benefits is far less damaging to the economy than imposing a minimum wage.

I'll do the question on 'taxation' in a later post, this is a huge topic all of its own.

Should the government send troops to intervene in the affairs of other countries?
Pragmatic: No. However well intentioned this might be, and however easy it may be (in military terms) to invade smaller countries, history shows us that the aggressor always loses out in the end, whether for military, economic or political reasons. Except in extreme circumstances (Germany and Japan after WW2), the aggressor nearly always messes up the subsequent occupation.

Should the government continue to participate in and support the United Nations?
Pragmatic: No. The UN has become a bloated, expensive, ineffectual and corrupt talking shop, that has achieved precisely nothing in the last ten or fifteen years. It has passed its sell-by-date, just like all the other empires and supra-national bodies.

Should young people be compelled to serve in some capacity in the name of “national service”?
Pragmatic: No, certainly not. No sensible parent wants their children losing out six months or a year of their lives doing something pointless. Sensible children want to get on with studying and working.

Should the government help businesses during hard economic times with low-interest loans or subsidies?
Pragmatic: Nope. Government-backed low-interest loans or subsidies keep businesses that ought to fail afloat, and governments always end up throwing good money after bad. These loans have to be paid for out of other people's taxes (present or future) so making it less likely that businesses that ought to survive actually do survive.

9 comments:

Anonymous said...

There is surely some space for government to send "peacekeeping" style troops like we spectacularly failed to do in both Rwanda and the Congo? Interventions there could have made a huge contribution for good.

Simon Fawthrop said...

"Should the government help businesses during hard economic times with low-interest loans or subsidies?"

I would have thought the complete horlicks that Governments (Labour and Tory) made of the nationalised industries in the 60's and 70's was enough to take this question off the table.

Mark Wadsworth said...

SB, it's easy to say what we could have done (but didn't) because you are envisaging an ideal outcome in a parallel universe.

Fact: as at today's date we have thousands of soldiers (from UK and elsewhere) propping up a narco-state in Afghanistan.

That's what happens in real life. How do you know how things would turn out in e.g. Sudan if we intervened? Would the slaughter recommence the minute we bugger off again? That's one for the African Union, in my book.

The Sage of Muswell Hill said...

"No sensible parent wants their children losing out six months or a year of their lives doing something pointless"

Most "gap year" activities are totally useless and totally pointless. Moreover, the three/four subsequent years at university of our current crop of undergraduates are usually devoted to the useless and the pointless and this comes after 10/12 years of useless and pointless "education" whereby up to 40% of school graduates cannot properly read, write or do sums. Six months in an environment where some (not all - I'm not that optimistic) useful skills might be imparted to our youth (you know, things like self-discipline, politeness, turning up to work on time, doing a full day's work etc) might not be all bad.

Mind you, this presupposes a trustworthy state administration to which we would entrust our children: the present administration doesn't qualify I'm afraid. I wouldn't trust Gordo or any of his henchmen with a broken clock let alone my (grand)children.

Mark Wadsworth said...

U, a fine summary.

Ergo, before we invent yet more crap, we should be sorting out the education system, which could be achieved via school vouchers; Mickey Mouse courses could be knocked on the head via higher tuition fees; the layabout society can be fixed by changing the welfare state; and jobs creation can be fostered by reducing payroll taxes and regulations.

All stuff that I have covered (or will cover) elsewhere in this series of posts.

Neil Harding said...

Mark, So you would have let Northern Rock collapse and the British banking system collapse with it? Millions of jobs would have been lost and our economy would have been crippled. Care to discuss the merits of this?

Scrap the minimum wage? A CBI would mean the mimimum wage could be scrapped, but going back to £1 an hour jobs would be disastrous without some protection for these exploited desperate workers. The minimum wage is the best of the current bad benefits/welfare policy.

Neil Harding said...

You are also wrong to scrap the UN. Most of its failings are because it is so underfunded and has too little power over nation states. This is an argument for strengthening it not scrapping it.

Some benefits are listed here. The development programme and production of reliable statistics alone are worth its relatively small budget.

Mark Wadsworth said...

I fixed Northern Rock here, you have to follow the links for more background.

The FSA etc didn't bother having a closer look at NR, despite its share price has slid by 50% since the start of the year, all the signs were there, with f***wits like that in charge ...

Don't get your point on minimum wage. If the state offers 30-hour a week workfare jobs paying £90 tax-free instead of housing benefit, this will set a de facto gross minimum wage, via market forces, of about £4 or so.

Scott Freeman said...

"There is surely some space for government to send "peacekeeping" style troops like we spectacularly failed to do in both Rwanda and the Congo? Interventions there could have made a huge contribution for good."

Giving government the power to send armies abroad for anything but self-defence will inevitably lead to another Poland, another Vietnam, another Iraq. That, and why should I be forced to pay for Rwandan people's police force (in the form of our armed forces) and at the same time get less protection at home? If I want to save Rwandan people, I shouldn't look to government, I should look to private charity (which might mean paying for or volunteering in an army to go save them).

"Mark, So you would have let Northern Rock collapse and the British banking system collapse with it? Millions of jobs would have been lost and our economy would have been crippled. Care to discuss the merits of this?"

That's not even remotely true.

Northern Rock is not an example of why we need government to pay firms to be stupid, it's an example of why we should make sure they know it won't. The only reason Northern Rock operated the way it did was because it knew the BOE would bail it out if it got into trouble. In the long run, letting NR go bust (though it probably wouldn't have done) would be infinitely better than confirming its assumption and sending a signal to other banks that risk is no object.

"Scrap the minimum wage? A CBI would mean the minimum wage could be scrapped, but going back to £1 an hour jobs would be disastrous without some protection for these exploited desperate workers."

When I choose to take money from someone in exchange for performing a service, I'm not being exploited. The only people being exploited are those who lose their jobs or can't find work because they are legally discriminated against for having low skills and thus banned from working. Making it illegal for people to work, taking that option away from them, does not help them, it only forces them to rely on welfare handouts that the rest of us pay for, or turn to crime.