Comments on: On left wing free traders

By: Kevin Carson

Kevin Carson — Tue, 12 Jul 2005 05:29:44 +0000

The welfare state takes a small part of what the working majority was underpaid, and gives it to the most destitute portion of the underclass to maintain political stability.

For another take on how “laissez-faire” the Robber Baron era was, read Gabriel Kolko’s *Triumph of Conservatism*. Not to mention Benjamin Tucker’s analysis of the four monopolies in “State Socialism and Anarchism.” Seems to me that if the state hadn’t been intervening to stack the rules and force us to sell our labor in a buyer’s market, and we could have received our full-labor product as a wage, we’d have been better off under such a genuine free market than under either Robber Baron capitalism or corporate liberalism.

Vulgar libertarians and welfare state liberals have a common interest in pretending that corporate power arose from “laissez-faire,” and the regulatory/welfare state came about through “anti-business” motives.

By: Jim

Jim — Thu, 30 Jun 2005 16:58:57 +0000

Tim’s probably referring to Dollar and Kraay’s work on ‘globalizers’ and ‘non-globalizers’. But that mostly just picks countries who have enjoyed higher growth and trade and calls them ‘globalizers’ regardless of their actual policy choices, so it’s basically saying that countries that do well do well. Which isn’t particularly helpful.

But differences in growth rates between countries are obviously one of if not *the* driving factor behind the trend in world inequality, which as far as I know is not unambiguously down in recent decades (see Branko Milanovic’s book “Worlds Apart”, published today). The main force exerting downward pressure on world inequality since 1980 has been China’s very fast growth, but if present trends continue this will eventually become a force exerting *upwards* pressure on world inequality as China gets closer to the rich nations and ever further away from the very poor ones.

Owen is quite right to point out that greater inter-national redistribution would reduce world inequality, just as intra-national welfare states have reduced national inequality.

By: Tim Worstall

Tim Worstall — Thu, 30 Jun 2005 08:19:57 +0000

One explanation I have heard for this inter-country increase in inequality is that there are some countries which have not joined in the boom in trade that is globalization. We thus have the rich economies growing at 2-3% a year, those poor countries which are taking part growing at 4/5-10% (and thus reducing inequality)and those not taking part not growing at all.
Perhaps simplistic (I only dimly remember reading the paper on it) but if that is so then it might not be redistribution (or lack of it) that isthe problem, but that some are not taking part in globalization

By: owen

owen — Wed, 29 Jun 2005 16:11:03 +0000

Tim Actually, the inequality is mainly between countries, rather than within them; and one reason for that is precisely that we do not have an inernational community that redistributes between rich and poor between countries in the same way as we do within countries.

By: Jarndyce

Jarndyce — Wed, 29 Jun 2005 13:03:29 +0000

I’ve thought for a while (and your exchanges with Tim confirm this) that there isn’t much difference on this between left-freetraders (like you, and I would say, me) and right-freetraders like Tim. Where there is a difference, though, is with people who use the language of free trade because they think it somehow gets them off the hook of their responsibility to others.

By: Tim Worstall

Tim Worstall — Wed, 29 Jun 2005 09:10:36 +0000

The world is more unequal at the end of the 20th century than at the end of the 19th? You mean that a century of constant additions to the welfare state have increased inequality?
Bring back laissez faire and the Robber Barons immediately! They obviously reduce inequality!

By: Tim Worstall

Tim Worstall — Tue, 28 Jun 2005 18:15:24 +0000

Not too much clear water between you and this “barking at the moon lunatic” on this subject I’m afraid.
Points one and two….I continually point to Krugman’s essay (Ricardo’s difficult idea) which makes these very points. I’m not so sure about 2b….the rich get even richer so that inequality rises. I don’t think that is empirically true. Those (previously) poor countries who have joined the global economy have been growing for decades faster than the rich countries. China growing at 8-10% for a decade while W. Europe has been growing at 2-3% doesn’t, to me, look like evidence of an increasing income gap. Similarly, within societies, I don’t see it as being true. Might, possibly, be so with purely cash incomes but all the other measurements, life span, illness, creature comforts (food, heat clothes etc) seem to me to be getting narrower as societies get richer (and no, I haven’t cross controlled for the welfare system or lack of it. ButI’m sure someone out there has.)
[Owen adds: Chris Kenny has done this analysis, here. But the world is much more unequal at the end of the 20th Century than it was at the end of the 19th Century, and the disparity is not good for any of us]

Three? Of course. I’ve said that many a time.
Four? Yes, but with slight reservations. Not about economics, but politics. I think my political reservations (no, they’re not about how I would view unrestricted immigration, but how my fellow Britons do) will fade away as people begin to see the effects of the E. European (ie, new EU members) into the UK. Lots of poor(ish) hard working people coming in is good for a country. It’s an (and they won’t remain poor for long either.) import of human capital. As long as it can be done without sufficiently scaring the populace that they then reject the other three pillars, then I’m all for it.

As you know, of course, “crazed loons” was not a comment upon yourself. Owen: I know … and I mean “barking at the moon” in a friendly way …