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High standard of living and the welfare state

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sirmonty posted on Mon, Jan 5 2009 1:18 AM

"The nations with the highest standards of living have strongly entrenched welfare states."

How should a Libertarian address this statement?

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sirmonty:

"The nations with the highest standards of living have strongly entrenched welfare states."

How should a Libertarian address this statement?



First admit that without The State (or State Government, if he prefers to use the term government, it might help for clarity), & assuming with the free-markets being utilized for functions that used to be monopolized via The State, a standard of living would be A.) Different to attain, maintain, & lose, and B.) Different compared to the standard of living in a state society.

Demonstrate that by no means would a stateless *guarantee* a high standard of living for *everyone* (there are always risks in life, & there is further risk in trying to reduce risks via The State, when you ignore unintended consequences, such as a interventionist foreign policy that very easily can bring wars to the doorsteps of the very individuals that said welfare state supposedly "grants" higher standard of livings, of which, a war on home soil easily jeopardizes). 

However, on the other hand, the means of which to attain a standard of living would be far more numerous, far more flexible & fluid, & would vary much more from region to region then they already do from state to state.  Entirely different communities, even ones nearby, might have slightly adjusted but noticeably different standards of living, depending on circumstances.

While The State attempts a false egalitarianism by trying to ensure a standard of living, it is artifically set & distorted compared to the effects real free-markets would have on the individual's standard of living. 

Frankly, The State government does next to no help in distorting market forces in general, specifically because when the economical shit hits the fan, Joe Six Pack may not know how to deal with such fluctuations at all, with a good outcome of his and/or her response being that of going back to The State like a rich kid asking for a gradually larger allowance from his parents each week.

A libertarian should stress that because in a state society, because we've grown up with an expectation that what around is normal or legitmate, that therefore, it is very hard to comprehend the vast distortions of the markets, & ultimatley the individual citizen's life, caused by The State government. 

It is very hard to question what is essentially a vauge, secondardy parental figure for society as a whole, & further difficult to question the majority & pay attention to the minority (due to psychological bias of numbers, perhaps, but also due to social norms).   

It is essentially no different than the mafia distorting an individual's life by causing turmoil on a missed payment for protection (which an "accident", most likley caused by the mafia itself, prompted a seemingly prudent choice of paying for the protection rachet).

Show that the difference between a real standard of living, and one reinforced by welfare states (the artificial high standard of living), comes with one important distinction:  the later comes with strings attached, and while most may view those strings as beneficial, they easily become burdensome if one were to suddenly become bankrupt, or burdened with high medical bills, both of which are hugely distorted in the monopolized markets favor, which in turn, favors The State by providing further monopolized capital for it to utilize. 

This leads to the cycle of a few pennies here & there (albeit, pennies being much larger amounts, but pennies compared to how much the The State utilizes) continually feeding a cycle in which little, if anyone, notices the effects of. 

A high standard of living requires reponsibilty to attain; with or without The State, this will always be true. 

The State merley makes it much harder by taking away the capacity for individual's to develop the required high-time preference & responsibilty (not to mention time spent at a job or an occupation that could be better spent on learning more trades or skills to better compete in the market for a better paying job, rather than sticking with a safe option to ensure you can pay off your debts, which seem to come as often as you pay them off).

I went off on a few tangents as usual, but stressing the role of the individual as being more responsible for their own standard of living, rather than The State, would help, I think. 

A population or two in a few different countries that seemingly prove "...nations with the highest standards of living have strongly entrenched welfare states", could easily be incidental & attribuable to far more important factors such as the behaviors of various individuals & cultural trends. 

"Look at me, I'm quoting another user to show how wrong I think they are, out of arrogance of my own position. Wait, this is my own quote, oh shi-" ~ Nitroadict

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sirmonty:

But why aren't those nations that have some of the freest economies lagging behind those that have massive welfare states?

Doesn't that fact give statists a little bit of ammunition when defending their welfare state?

What statistic is being used to show that the economies are lagging?

At most, I think only 5% of the adult population would need to stop cooperating to have real change.

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Nitroadict:

sirmonty:

"The nations with the highest standards of living have strongly entrenched welfare states."

How should a Libertarian address this statement?



First admit that without The State (or State Government, if he prefers to use the term government, it might help for clarity), & assuming with the free-markets being utilized for functions that used to be monopolized via The State, a standard of living would be A.) Different to attain, maintain, & lose, and B.) Different compared to the standard of living in a state society.

Demonstrate that by no means would a stateless *guarantee* a high standard of living for *everyone* (there are always risks in life, & there is further risk in trying to reduce risks via The State, when you ignore unintended consequences, such as a interventionist foreign policy that very easily can bring wars to the doorsteps of the very individuals that said welfare state supposedly "grants" higher standard of livings, of which, a war on home soil easily jeopardizes).  

However, on the other hand, the means of which to attain a standard of living would be far more numerous, far more flexible & fluid, & would vary much more from region to region then they already do from state to state.  Entirely different communities, even ones nearby, might have slightly adjusted but noticeably different standards of living, depending on circumstances.

While The State attempts a false egalitarianism by trying to ensure a standard of living, it is artifically set & distorted compared to the effects real free-markets would have on the individual's standard of living.  

Frankly, The State government does next to no help in distorting market forces in general, specifically because when the economical shit hits the fan, Joe Six Pack may not know how to deal with such fluctuations at all, with a good outcome of his and/or her response being that of going back to The State like a rich kid asking for a gradually larger allowance from his parents each week.

A libertarian should stress that because in a state society, because we've grown up with an expectation that what around is normal or legitmate, that therefore, it is very hard to comprehend the vast distortions of the markets, & ultimatley the individual citizen's life, caused by The State government.  

It is very hard to question what is essentially a vauge, secondardy parental figure for society as a whole, & further difficult to question the majority & pay attention to the minority (due to psychological bias of numbers, perhaps, but also due to social norms).    

It is essentially no different than the mafia distorting an individual's life by causing turmoil on a missed payment for protection (which an "accident", most likley caused by the mafia itself, prompted a seemingly prudent choice of paying for the protection rachet).

Show that the difference between a real standard of living, and one reinforced by welfare states (the artificial high standard of living), comes with one important distinction:  the later comes with strings attached, and while most may view those strings as beneficial, they easily become burdensome if one were to suddenly become bankrupt, or burdened with high medical bills, both of which are hugely distorted in the monopolized markets favor, which in turn, favors The State by providing further monopolized capital for it to utilize.  

This leads to the cycle of a few pennies here & there (albeit, pennies being much larger amounts, but pennies compared to how much the The State utilizes) continually feeding a cycle in which little, if anyone, notices the effects of.  

A high standard of living requires reponsibilty to attain; with or without The State, this will always be true.  

The State merley makes it much harder by taking away the capacity for individual's to develop the required high-time preference & responsibilty (not to mention time spent at a job or an occupation that could be better spent on learning more trades or skills to better compete in the market for a better paying job, rather than sticking with a safe option to ensure you can pay off your debts, which seem to come as often as you pay them off).

I went off on a few tangents as usual, but stressing the role of the individual as being more responsible for their own standard of living, rather than The State, would help, I think.  

A population or two in a few different countries that seemingly prove "...nations with the highest standards of living have strongly entrenched welfare states", could easily be incidental & attribuable to far more important factors such as the behaviors of various individuals & cultural trends. 

Thanks man that is a good detailed response.

 

 

Spideynw:

What statistic is being used to show that the economies are lagging?

The UN Human Developement Index.  Places like Singapore and Hong Kong are ranked behind places like Iceland, Norway, and France (though they are still in the top 30).

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Marko replied on Mon, Jan 5 2009 5:42 PM

The HDI combines three basic dimensions:
-Life expectancy at birth, as an index of population health and longevity
-Knowledge and education, as measured by the adult literacy rate (with two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment ratio (with one-third weighting).
-Standard of living, as measured by the natural logarithm of gross domestic product (GDP) per capita at purchasing power parity (PPP) in United States dollars.



Third point is skewed. GDP is not a real measure of standard of living, GDP in dollars even more so. Second point is skewed more. Hordes of graduates with useless social sciences degrees and schools that produce them are a hinderance not a generator of developement. The same goes for needlessly long mandatory schooling.

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Sphairon:
So, when welfarists claim that European nations have a high living standard and a large welfare state, point out how long it took to generate all this wealth and how the welfare state, after first halting this process, is now even reversing it in almost no time.

 

 

Great point.

 

People seem to forget that many "drastic" changes that appear in hindsight occur over a gradual period of time, especially in the case of the Roman Empire when its "end" is hard to pinpoint. So the end of the European welfare state is not going to be overnight but will be the result of the gradual decline in living standards brought about by ill thought socialist policies.

 

One point I think we should consider in the case of the German welfare state is that unlike the USA, Germany still has factories that are ready to produce goods more efficiently.

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One point I think we should consider in the case of the German welfare state is that unlike the USA, Germany still has factories that are ready to produce goods more efficiently.

Germany is still doing fairly well in the fields of precision and mechanical engineering, but I'm not sure whether that counts as factory work. There's a lot of subsidies involved in running actual factories, and not too rarely, those factories tend to close as soon as the state money stops flowing.

What really bothers me about the German welfare state is the sanctification of this cruel Ponzi scheme. "We were the first", I've heard countless times in civics and history class. "Germany set an example in social policy for the whole world to follow". The nature of this beast is never being discussed - the harshest criticism being that Bismarck, the father of it all, "bought the working class" to keep them from implementing socialism. How dare he.


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Simple: ask them to prove it. Which countries?

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krazy kaju:

Simple: ask them to prove it. Which countries?

 

They pointed to Iceland, Sweden, Norway, and even Canada.

 

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Maybe you should check a thread that's stickied in this very forum:

http://mises.org/Community/forums/t/5616.aspx

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One thing I admire about German is the engineering and technology that its auto industry produces. However as you in recent years Volkswagen and other companies are looking towards Czech Republic and other "eastern bloc" (Praha is west of Wien lol) in order to seek less regulations and union interference.

In your opinion are unions in Germany less combative than say France? From what I have learned from my history professor is that following WWI German workers rarely walked off the job until the great depression.

 

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krazy kaju:

Maybe you should check a thread that's stickied in this very forum:

http://mises.org/Community/forums/t/5616.aspx

Yeah I've definitely been using that.

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One thing I admire about German is the engineering and technology that its auto industry produces.

Yes, indeed, Germany has a traditionally strong stand in any field related to big machines and engines. However, it took the economy quite a while to adapt to the new digital age, and it's still a long way to go. There's no such thing as a Silicon Valley here. A product of too much subsidization I'd say - if you get your money anyway, why bother with novelties?


In your opinion are unions in Germany less combative than say France?


Definitely. Unions are too much in bed with the state and the status quo to cause any trouble. You'll get your occasional walkout here and there, but even this is so ludicrously overregulated that barely anyone pays attention.


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