What the left gets wrong about economics that annoys the shit out of me

[Berkut]

What is it that the left should actually care about? The core of what it means to be progressive?


I think it is that we should be striving to make the world a better place for more people.


That means, broadly speaking,


Less poverty worldwide and locally
Better access to education and better actual delivered education
More political equality and freedom
Better health for everyone
Taking better care of the environment
More peace/less war and violence


In the post-WW2 era until now, we have seen a *profound* betterment in all of these measures. Like....an amazing improvement in raw numbers in all of these categories.


At the same time, the post-WW2 market economies of the west have seen an explosion in productivity and actual production of the "stuff". Like an astounding increase in the total amount of crap that human produce - food, electronics, media, etc., etc. etc.


Those two things are not incidental to each other. We have slashed global poverty BECAUSE the free market has created a amazing glut of "stuff" like freaking food, and that has resulted in the poor living a better life in nearly every way globally. There is more work to be done of course, but the way to do that additional work is to continue to leverage what has has an amazingly effective tool to combatting the historically terrible quality of life of the poorest humans across the globe - the embrace of free market/capitalist economic principles that have driven global productivity.


Listening to the Bernie Sanders and Robery Reichs bitch and moan about how terrible capitalism is and how it screws the poor drives me nuts. The poor are a hell of a lot less poor now then every BECAUSE of free market capitalism, not in spite of it.

[Syt]

Distribution of resources will become (already is?) a problem IMHO, esp. with increasing effects of climate change and continuing urbanization. Drinking water, arable land, food, ... and as long as companies rather destroy e.g. unsold food than giving it to charity I think there's room for improvement.

Speaking of distribution: I think it would be beneficial to move "idle" money from the owning strata to people who will actually spend it, to stimulate the economy. And find ways to ensure people of more modest means can set money aside for future larger purchases or emergencies.

[The Brain]

I don't think acknowledging the contribution of the market would further Bernie's political career. He supplies something that is in quite high demand.

[Josquius]

This doesn't sound like anything most people on the mainstream left complain about.

Capitalism is like fire. Properly harassed it can be a useful tool that can really make the difference between life and death.
But left uncontrolled it will burn the fuck out of you.

When people over the age of 16 complain about capitalism it's not the core concept of buying things with money that they mean. It's pretty obviously unfettered neo liberalism.

[Solmyr]

I don't think "you are not as poor as a dirt-farming peasant in the Middle Ages" is a useful metric. Sure, everyone has become mathematically less poor in the last couple of centuries. On the other hand, current poverty, as in "you have to decide whether to eat or pay rent this month, and you cannot get sick", is also a result of free market capitalism.

[Berkut]

I don't think "you are not as poor as a dirt-farming peasant in the Middle Ages" is a useful metric. Sure, everyone has become mathematically less poor in the last couple of centuries. On the other hand, current poverty, as in "you have to decide whether to eat or pay rent this month, and you cannot get sick", is also a result of free market capitalism.

Except that is simply not true.

Free market capitalism has resulted in the eradication (or at worst the radical reduction) in the number of people globally who have to decide whether to pay rent or eat - that kind of abject poverty you are talking about is a tiny fraction of what it used to be - the metric is not "are you a dirt faming peasant". The metric is the UN sponsored definitions around extreme poverty has shown that the percentage of the world population living in that state has declined from about 50% in 1950 to about 10 percent today.

That is the exact same time that world productivity has sky rocketed, and the one is BECAUSE of the other. Income distribution since 1975 has dramatically shifted such that the majority of people no longer live under the poverty line defined in real, adjusted dollars. Worldwide per capita GDP has gone from something like $2000/year in 1950 to over $11,000 per year in constant dollars.

You are simply wrong.

[Berkut]

This doesn't sound like anything most people on the mainstream left complain about.

Capitalism is like fire. Properly harassed it can be a useful tool that can really make the difference between life and death.
But left uncontrolled it will burn the fuck out of you.

When people over the age of 16 complain about capitalism it's not the core concept of buying things with money that they mean. It's pretty obviously unfettered neo liberalism.

That is not what I see in the rehtoric of the Sanders left. It is constant attacks on the basic value of capitalism and the free market.

[crazy canuck]

What do you mean by the Free Market?

Food production (the example you used) is subsidized by government.  I think there is very little that is produced by something that is a Free Market in the sense that it is completely independent of government involvement.  But perhaps you meant something different when using that phrase.

[Berkut]

What do you mean by the Free Market?

Food production (the example you used) is subsidized by government.  I think there is very little that is produced by something that is a Free Market in the sense that it is completely independent of government involvement.  But perhaps you meant something different when using that phrase.

I don't know anyone who uses "free market" in the manner of "completely independent of government involvement". So yeah, pretty safe bet that isn't what I mean. I think you knew that though.

[DGuller]

What annoys me about the left and the economics is a general mindset that what matters is the intention and not the actual outcome.  If you had good intentions but (predictably) terrible outcomes, it's the fault of the awful people who took advantage of the misaligned incentives you put out there.  The real costs that your good intentions inflicted on real people is not on you, what matters is that you meant well.

The classic example is rent control, which even Paul Krugman decried as an example of economic idiocy, before his intellectual honesty waned.  Study after study shows what a terrible policy it is and how in entrenches corruption and hostile tenant/landlord relationship, and yet what matters is that the intention is to help people out who can't afford rent.  The fact that young people in rent-controlled cities have to get two roommates to afford to live in the apartments they can actually get?  Just more proof how necessary it is to have rent control.

[Berkut]

What annoys me about the left and the economics is a general mindset that what matters is the intention and not the actual outcome.  If you had good intentions but (predictably) terrible outcomes, it's the fault of the awful people who took advantage of the misaligned incentives you put out there.  The real costs that your good intentions inflicted on real people is not on you, what matters is that you meant well.

The classic example is rent control, which even Paul Krugman decried as an example of economic idiocy, before his intellectual honesty waned.  Study after study shows what a terrible policy it is and how in entrenches corruption and hostile tenant/landlord relationship, and yet what matters is that the intention is to help people out who can't afford rent.  The fact that young people in rent-controlled cities have to get two roommates to afford to live in the apartments they can actually get?  Just more proof how necessary it is to have rent control.

Indeed. It is a good example of what I mean by the problems of the left when it comes to economics. It is driven by what they want to be true, and if the data shows something completely different, then it is just ignored.

[Eddie Teach]

I've never heard Sanders attack the free market itself, do you have a link?

[crazy canuck]

What do you mean by the Free Market?

Food production (the example you used) is subsidized by government.  I think there is very little that is produced by something that is a Free Market in the sense that it is completely independent of government involvement.  But perhaps you meant something different when using that phrase.

I don't know anyone who uses "free market" in the manner of "completely independent of government involvement". So yeah, pretty safe bet that isn't what I mean. I think you knew that though.

No, I don't know what you mean by Free Market.  I actually think it is a big problem with American political discourse.  So much emphasis is put on safeguarding whatever that is, but it does not actually exist.  All markets exist within governmental regulatory and taxation policy.  It is impossible to think of an example where that is not so, except for a failed state.  The reason for raising this point is to illustrate that you are drawing a false dichotomy in these two threads.  The US does have government intervention in its economy.  The interesting political question is how government should best intervene to obtain the best outcomes and how that should be assessed.

 

[Berkut]

What do you mean by the Free Market?

Food production (the example you used) is subsidized by government.  I think there is very little that is produced by something that is a Free Market in the sense that it is completely independent of government involvement.  But perhaps you meant something different when using that phrase.

I don't know anyone who uses "free market" in the manner of "completely independent of government involvement". So yeah, pretty safe bet that isn't what I mean. I think you knew that though.

No, I don't know what you mean by Free Market.  I actually think it is a big problem with American political discourse.  So much emphasis is put on safeguarding whatever that is, but it does not actually exist.  All markets exist within governmental regulatory and taxation policy.  It is impossible to think of an example where that is not so, except for a failed state.  The reason for raising this point is to illustrate that you are drawing a false dichotomy in these two threads.  The US does have government intervention in its economy.  The interesting political question is how government should best intervene to obtain the best outcomes and how that should be assessed.

 

I don't disagree that that is what the interesting discussion should be around.

And yes, that is a huge problem in American political discourse.

And I think that right now, there is a generation on the left that appears, to me, to be wanting to throw the baby out with the bathwater - they are beginning to identify free market capitalism as the problem. Not only is it not the problem, it is actually the solution. See the previous post in this very thread, in fact.

Part of this manifests itself in the perception among the left that in fact poverty (as an example) is actually getting WORSE. Which is simply not only untrue, it is badly untrue.

[Admiral Yi]

What annoys me about the left and the economics is a general mindset that what matters is the intention and not the actual outcome.  If you had good intentions but (predictably) terrible outcomes, it's the fault of the awful people who took advantage of the misaligned incentives you put out there.  The real costs that your good intentions inflicted on real people is not on you, what matters is that you meant well.

Amen.  If you push for $15 minimum wage and millions are pushed into unemployment, that's YOUR policy causing that.  It's not (the Jews) gaming the system.

Second order effects and elasticity, two blind spots of the left.