"The welfare state has helped to vastly reduce poverty in most of the
developed nations of the world today."
Ah yes, selective poverty reduction, through the redistribution of wealth.
I agree that poverty has in fact been reduced in the "developed countries". Could even be some reduction in some of the poorest parts of the globe
as well, although it could be argued that it came at considerable cost. But I already touched on the tragic "contribution" of the Third World in my
above post.
But, putting that aside for the moment, was "poverty reduction" due to the blossoming welfare state, or perhaps in spite of it? Let's see. During
this post-WW2 period, what else did we see? Well, for one, we saw
technology explode, like never before in history. It seemed as if
each new year brought more unbelievable advances. Many of these advances resulted in unexpected efficiences, such as the internet for example.
I wonder, what "percentage" of global poverty reduction would have been due to the leaps in technology, and what percentage (positive or negative)
would have been due to the reduction in productivity incentives, through a scheme of escalating taxation?
It's interesting. One could imagine that a "benefit" could somehow accrue from a "negative" set of incentives, such as progressive taxation,
impacting the over all economy. But to be honest, should we not simultaneously expect to off-set such a thing with what one has unquestionably
"lost" in the process? Some seem to agree that there is no free lunch, so, probably not terribly controversial. Sadly, foregone opportunities are
not easily quantifyable, perhaps we'll never know exactly what was thrown away, but I would hope everyone would agree, it's an important part of a
more complete picture.
"We know there's no such thing as a free lunch. That's what the taxes are for."
Really? So, it is the taxes that pay for the welfare state? OK then, things like technology, and the burden placed upon the Third World, let's put
them
both aside now...
First, the global welfare state that has emerged in the West is in fact far too expensive for taxes to
ever pay for. Yes, it's complicated.
The politics involved is one obvious factor, almost the proverbial joke in the US, but politicians will always default to a "deficit" approach,
since taxes are always unpopular.
And what we observe actually confirms this. In every "developed" nation, more is spent, than is taken in. And it has gone on for many years
now.
I would like to stop and ask the readers to try and imagine how such a state of affairs could be?
WHO exactly is "paying" for these deficits,
year after year?
Perhaps some have heard the term
"trade deficit" as well. Oh sure, the average person on the street would have no reason to know how any of
this could be important, but here will will find part of our answer.
In China, and other developing nations, what we find is a vast source of cheap labor. The goods that they produce are "cheap" (to the Westerner).
In the US, the Wal-Marts overflow with this "cheap".
What is really happening is that nations like China have agreed to take our "dollars" (Pounds,Euros), in exchange for their goods. As many know,
today these nations hold huge dollar "reserves", but what are those dollars going to be "worth", when they try to cash in, especially in the USA,
where they can be spent for "real" things, finally competing with that voracious consumer, who never thought the party would end?
And so, the ugly spectre of "inflation" will eventually rear it's head, as trillions of dollars flood the world, and chase "too few goods". Even
in the deleveraging "deflationary" environment of today, such a force is working it's way to the front of the line, and will eventually be felt, by
everyone.
The result will be what's called, "default" (as in the kind that occurs when one is bankrupt). At some point, China and Japan will realize that
they are at huge risk if they continue to hold dollars, and will want to "diversify". This they are already doing, although carefully, because if
any one of these nations should try to beat the other to the exit, the whole house of cards comes tumbling down prematurely.
I know, perhaps too much for this thread, so let's move on...
"Those who continue to label the United States (or any other nation in
the world at this moment in time) as 'Communist' is abusing terms."
I will concede that there is a distinct inflamatory element in any use of the infamous word "communist". And yet, if anyone read my reasoning for
it's legitimate application (as Neo has certainly noticed), it would be harder to disagree.
Namely, that the "planks" of communism do seem to have taken hold. Not a theory, not maybe, but they are here! Sure, one might argue that: "No
truely communist nation has ever existed!" Granted. And yet, what would be the point of retreating to theoretical postions, when we look back on
such a bloody history of "preliminaries", already?
"The US, and to a lesser degree pretty much all the developed nations of the world today are essentially oligarchies with various democratic and
corporate elements which utilise mainly centre-right broadly Keynesian economic policies."
OK. And, if someone else came along and tried to correct this statement with fine points, and argue that in fact more precisely we have a
"plutocracy" instead, and that "centre-right" today, would have been considered rather "left" only 20 years ago, then what?
And if another should point out the terrible failures of Keynesian economics in Great Depression I, which had already justly consigned the charlatan
to the dustbin, would we want to stand up and applaude him today, as we teeder on the brink of Great Depression II?
In short, have we done anyone a real service by splitting hairs, when the FACT is, we are already a good 80% of the way to what we already know is
very, very bad news for the human race?
I go back to my recommendation that we try an approach that has everyone on the same page, instead of introducing new vocabulary! Let's stick to
terms people are familiar with, such as the "welfare state", that way we will get input from a wider base, instead of intimidating the less
knowledgeable.
AGAIN, the "welfare state" is a dismal failure, when seen in it's proper perspective.
JR
