From: Technotranscendence (neptune@mars.superlink.net)
Date: Fri Oct 04 2002 - 15:40:46 MDT
Okay, I wanted to stay away from political discussions, seem they seem
fruitless here. This is more to make sure that Robert doesn't go
unanswered
here than to win friends and influence people.
On Thursday, October 03, 2002 11:55 PM Robert J. Bradbury
bradbury@aeiveos.com wrote:
> The NY Times has an interesting article on the similarities
> and differences between the U.S. economy now and the Japanese
> economy of a decade ago:
>
> Japan and U.S.: Bubble, Bubble, Toil and Trouble
> by David Leonhardt
>
>
http://www.nytimes.com/2002/10/02/business/02JAPA.html?pagewanted=print
Nothing new here. There are some other differences that might make a
bigger
difference here too. The current issue of _The Review of Austrian
Economics_ [15(2/3)] is devoted to Austrian economics and public choice.
In
it, there's an essay by Shigeto Naka, "The Postwar Japanese Political
Economy in an Exchange Perspective." (Funny thing is the article itself
seems tangential to the whole issue of Austrian economics, but it's a
good
read anyhow.:) Naka's view here might explain why the Japanese economy
is
taking so long to recover.
His believes that the particular pattern of democracy in postwar Japan
created an implicit stable social contract that helped to maintain
growth
while wealth transfer went on. Specifically, he claims the system of
equal
multi-member electoral districts made some districts that had lower
population, less politically diversity, and more united interests more
powerful than others. Specifically, he argues that rural and semi-rural
districts because they elected more people to the Diet per capita, has a
stronger influence on the Japanese political economy. (He shows how,
e.g.,
local governments in rural and semi-rural districts get more money from
transfers than from taxing the local and also have higher levels of
public
spending.)
This meant that the LDP only had to cater to those districts and win a
modest showing in urban districts to get in power and stay there --
resulting in wealth transfers to the non-urban districts, yet keeping
them
not so severe that the economy could still grow. However, in the long
run,
the rural and semi-rural districts not only came to demand more, they
grew
in population and in wealth, becoming more politically diversified as a
result. To Naka, this led to a failure of the contract as now the kinds
of
stable coalitions that dominated Japan up until the late 1970s are not
possible and short run transfers that are not sustainable have become
the
rule.
Naka's a pretty interesting theory and needs more empirical research,
but it
seems much more productive at explaining the Japanese economic "miracle"
and
its decline from the 1970s on. (Yes, the Japanese economy really start
to
peak in the 1970s -- not in the late 1980s.)
The US and most other industrial democracies don't have this same sort
of
setup -- note Naka is only talking about an electoral system here and
not
some peculiar aspect of Japanese culture, thus his model is applicable
to
any society having a similar system. That might be good because this
particular social contract can't come about, though more dynamic rent
seeking behavior is the rule, which leads to unstable and short-lived
coalitions as we see in the US and Europe. (Note what would happen if
the
US had a system like Japan's. Each district -- let's say State -- would
have the same number of Representatives in Congress. Assuming a
disparity
in wealth between districts, wealth would be slowly but surely
redistributed
from richer districts to the poorer ones, since any party that ran on a
ticket of doing such -- not openly, but buried in its policy choices --
would tend to get elected and re-elected. Now, in the US, we actually
have
the opposite. Wealth tends to be transferred to more populous
districts,
since they tend to have more representatives than less populous ones.
Some
horse trading does go on, so the system is not such that Nevada
completely
funds New York's budget, but any ruling party that decided to transfer
wealth the other way consistently would not be in power in Washington
for
long.)
> The interesting thing about this vis-a-vis the extropian/transhumanist
> perspective is the lack-of-vision as to where we might go, what we
> might do, and what we can be.
>
> Borrowing from Max's book -- we need more "*onward*".
>
> Screw libertarianism -- lets have more onwardism.
I don't know how you got that from the article. The US economy seems to
be
suffering not from less "onwardism" per se, but from a huge amount of
government intervention that only increased during the 1990s and
increases
now -- miniscule tax cuts not withstanding. I've been over this before
on
the list. Such interventions have distorted growth in many areas and
stifled it in others. Specifically, the low interest rates of the late
1990s coupled with government bailouts during various crises during the
last
decade (the Mexican bailout, the Asian bailout, the Russian bailout, the
LTCM bailout (actually private but arranged by the NY FRB to keep Buffet
from coming in)) created a climate where risk-taking increased with the
expectation of a bailout always looming on the horizon. The inflated
the
money supply, making for higher levels of calculational errors.
These conditions made for a bubble and a bust, all the while making for
less
accountability overall. I'm not saying the government created the
accounting scandals, but it made an environment where such things were
more
prone to happen and less likely to be found out early. E.g., because
credit
was easy, people weren't too worried about being cautious when
evaluating
investments.
It's also an environment that lowers individual initiative and overall
system responsiveness to changes. By distorting the money supply (one
information system of society), forbidding or controlling certain
responses
(prohibitions and regulations), and increasing the level of takings
(taking
becomes more important than making), government has curtailed social
coordination. It continues to do so and there appears to be no end in
sight.
(Yes, globalism might lead to some more market activities elsewhere,
changing some of the highly controlled Third World economies to less
highly
controlled ones, but the long run prospects are that we're moving toward
a
global managerial state. Once it eats up all the other states, then
there'll be no more returns to be had from external expansion and it
will
expand faster internally with the planet being internal at that point.
This
kind of marks the growth of statism in Europe. Early on the
centralization
of states in Europe did lead to free markets in wider areas. Rather
than
being taxed by little fiefdoms, now people only had to pay the King.
However, once it was no longer possible to grow by absorbing other small
states, governments soon switched to more intensive internal taxation.
This
is how we have modern Europeans paying taxes much higher than Medieval
serfs
paid -- as a percentage of income. (Well, that and there's no longer a
competition with other states for productive population. A system of a
few
large states can be more reckless with its economic policies than one
with
many small ones, since people are less able to move out and the cushion
of a
larger tax base makes individual policies failures easier to absorb,
though
that makes more policy failures like and the policy failure load
eventually
exceeds that of the latter system.))
> (I'll note as an aside [which will probably bring down the wrath of
> the libertarians upon my head] that "strict" libertarianism in the
> sense of "I want my gun, my beer and my freedom to watch Monday
> night football 48 hours a day" *isn't* a particularly extropic
> or even transhumanist vector.)
I know you are not a libertarian, but I don't like the image you're
using
here of a libertarian as a gun touting, beer guzzling, sports nut.
That's
pure ad hominem. If you've read any of the economics articles I've sent
to
the list over the last several years, you would, I hope, see a different
view here. You've seemed to ignore that.
But let's take apart your image. What does Extropianism or
transhumanism
entail here for personal freedom? Do you mean in a Extropian or
transhumanist society people (or sentients in general) would not be
allowed
to defend themselves, use recreational drugs, or partake of such
entertainments as they find pleasurable? Let me reverse your ad
hominem,
under your reign, will we all have to be good little posthumans and work
only on your pet projects?
> Being extropic or transhumanistic actually requires hard work.
> Where in the libertarian agenda is there a requirement to do
> such work (other than work which eliminates antiquated bipolar
> political parties)?
That's also ad hominem. Many libertarians are anarchists, so they do
not
work inside the political system. Many are working against the
political
system as such. Also, I don't see libertarianism as opposed to
Extropianianism or transhumanism. I do think statism in any form is
anti-Extropic. Socially, government creates more social chaos -- social
entropy, if you will -- and co-opts voluntary spontaneous orders. (It
does
not completely destroy spontaneous orders and that's one reason why
statism
never works in the long run.)
That aside, what particular policy recommendations do you have here that
would re-ignite the economy? How do these recommendations differ from
"libertarian" ones.
Cheers!
Dan
http://uweb.superlink.net/neptune/
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