
Capitalism needs a welfare state to survive - rblion
https://www.economist.com/leaders/2018/07/12/capitalism-needs-a-welfare-state-to-survive
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dr_dshiv
I am troubled by the lack of rational discussion of "capitalism" and
"socialism" in the society today. Partially, this comes from the complete
failure of modern academic philosophy to make cultural contributions. Part of
it is from the weakness of a two party system that both seem to advocate for
necessary and insufficient social functions.

The terms capitalism and socialism, on their own, are virtually meaningless,
being shorthand for any number of specific policies. For instance: Are
monolopolies a failure of capitalism or an inevitable outcome? Is capitalism
stronger with or without monopolies? On the socialist side, is social
ownership of the means of production necessary for maximizing the distribution
of goods? Or are free markets and profit motives appropriate strategies for
promoting social value?

Instead, you have the wall street journal treating socialism like idiocy and
millennials treating capitalism as an obvious evil.

This is rather practical philosophy... So I'm disappointed things aren't
further developed in our polical discourse.

~~~
darepublic
Unfortunately people in general are not interested in discourse, they want
convenience and novelty.

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sunstone
There are few topics that provide a better intellectual Rorschach test than
the economy.

Communism is the most appealing if only because it's the natural system of
families and of hunter gatherers. Sadly, the 20th century emphatically
demonstrated that this system doesn't scale into anything other than a
complete disaster.

On the other hand, capitalism is brutally horrible. But it's one saving grace
is that it does scale. You can run a 2 billion person economy on it and things
will work out overall and through time. That is, if you overlook the long time
constant, positive feedback loop of the concentration of capital. Eventually
just a few guys own all the stuff which is sub optimal.

Raw capitalism guarantees winners and losers, and a whole spectrum of outcomes
in between. This can be fixed up a bit by first, having government regulation
of clear market failure zones, like food, construction and finance etc. And
second, having the government collect a reasonable percentage off the top of
the economy to subsidize those being squished to death at the bottom.

Scandinavia does this best. Sure, they're not perfect, there is no actual
perfect solution.

The result is an elephant of a system that few people can view in its entirety
but most people think they can.

Given such a messy, devisive, inscrutable system you have to believe there
must be a better way. But there's probably not.

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pasabagi
It's hard to say if the article is tautological, or if there's a fundamental
(and common) confusion here about what the state is in relation to capitalism.
The modern state co-evolved with capitalism, and as a result, it's
institutions are generally what capitalism needs to survive and prosper. The
point about a welfare state is not really whether or not one is necessary for
capitalism; the point is more that it is necessary for a specific type of
capitalism.

For instance, Toyota wouldn't work without a welfare state, because you need
the kind of social stability a welfare state creates to preserve and shepherd
a really skilled workforce. Ford, on the other hand, neither needs nor desires
a particularly skilled workforce, but rather leans more heavily on intense
capital investment (automation) - so an expanded welfare state, necessitating
higher taxes, is a net loss for Ford, since they aren't all that interested in
stability, but they are interested in low taxes.

Making arguments about whether or not people _like_ or _support_ free markets
is kind of missing the point. The point is, certain business models are
predicated on certain forms of social organization. That's why Google is based
in Silicon Valley, not in Shanghai, and why Foxconn is in China, not Japan.

~~~
zozbot123
> The modern state co-evolved with capitalism, and as a result, it's
> institutions are generally what capitalism needs to survive and prosper.

This is either tautological or empirically wrong, depending on what exactly is
meant by "the modern state". In many ways, the problem with our current
welfare states stems from the fact that they evolved under the material
constraints of mid-20th-c. capitalism, when, for example, even the unskilled
could easily find lucrative manufacturing jobs, and a welfare state simply had
to fill in a limited amount of income gaps resulting from unemployment
(generally due to short-term business crises), medical conditions, retirement
and the like. Back in the mid-20th century, a baseline UBI wouldn't have made
much sense, for example. The situation today is vastly different, since
incomes are skill-biased to an extreme extent. Welfare states should be
reformed to provide a baseline subsidy even to those who are currently working
(assuming a low income, of course), while at the same time leaving them with
the right incentives to improve their skills, productivity and income, perhaps
in unconventional ways such as "bootcamps", MOOCs or "gig" work, that
governments can't easily track or manage. Something like UBI, or Milton
Friedman's proposed NIT, would seem to be highly appropriate.

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ralusek
Even pretty staunch libertarians are willing to entertain the value of the
state when it comes to the transition into post-scarcity markets, and even
this transition into markets that net diminishing value from many human
endeavors (as we are already seeing). I just think that most libertarian
types, myself included, don't want that to mean an overbearing bureaucratic
system that necessarily creates perverse incentives and rations resources
along politically contentious dimensions. Let us keep our markets, just help
balance them. Universal basic income to keep the bottom in check, anti-
monopoly, anti-collusion to keep the top in check, and then please fuck off.
No affordable housing, no welfare, no social security, no food stamps, no
shelters. Just give everyone cash and fuck off. If they want to create an
authoritarian sub-state, or sibling-state, for the people that just cannot
take care of themselves, despite all the necessary resources literally being
deposited in their bank accounts, so be it, but don't rope the rest of
functional society into the moral authoritarian nightmare we're currently
already sinking into.

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harimau777
What checks would be in place to insure that the UBI was sufficient to
substitute for eliminating affordable housing, social security, and food
stamps?

~~~
dragonwriter
UBI shouldn't replace Social Security, since SS is not a means-tested benefit
program.

