The Corporatist Manifesto II: the Pernicious Vice of Welfare Dependency

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(You can catch up with Part I here.)

One thing that’s become obvious as I’ve read through the CIS’s corporatist manifesto is that their TARGET30 campaign is very much a moral crusade with two goals. First, to reduce the burden (of taxation) on future generations. Second, to eradicate the pernicious vice of welfare dependency which deforms the character just as surely as habitual masturbation saps your manly vigour leading to unmanly weakness, blindness and insanity:

Before the state created a right to unemployment benefits, for example, people saved or insured through friendly societies and trade unions to ensure an income if they lost their job. Nowadays, few bother. Before Medicare, families insured themselves so they could buy treatment if they fell ill, and charitable foundations raised money to build and run hospitals. But now that the state provides health care, individuals are less inclined to insure themselves. When government takes over such functions, therefore, the market shrivels, philanthropy dwindles, and self-reliance is replaced by state dependency. (TARGET30—Towards Smaller Government and Future Prosperity by Simon Cowan (with contributions from Robert Carling and Peter Saunders (and Andrew Baker, Jennifer Buckingham, Stephen Kirchner, Peter Kurti, and Jeremy Sammut)))

…Tax-welfare churn leads to economic costs—for example, administration and compliance costs, a higher tax burden, and higher effective marginal tax rates (EMTRs) and non-economic costs including increased welfare dependency, government paternalism and patronage…(TARGET30—Tax-Welfare Churn and the Australian Welfare State by Andrew Baker)

Generally, when someone makes a moral pronouncement like ‘People should be more self reliant.’ the phrase ‘like me’ is crammed in at the end between the last word of the sentence and the full stop. Rarely does such a sentence end with an implied ‘well, not me of course, I’m a special case with a special exemption’ – it’s much harder to cram into that tiny space. But that’s a subject best left for another post.

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Big infrastructure, big uncertainty

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One of the peculiar features of debates about big monolithic infrastructure projects, such as universal broadband networks and high-speed rail lines, is the way their supporters talk about them in public. To advocates, the wisdom of these projects is obvious. You can never have too much broadband! High-speed rail is the future! Why can’t we be like the visionaries who built the Snowy Mountains Scheme?!? $50 billion, $100 billion? “Chicken feed” is what we’ll call it in 20 years!

And indeed some opponents of these projects take the same attitude from the other side of the fence. Everything’s fine as it is! This new thing will be an enormous white elephant, obsolete before it is finished, you can bet on it!

What we don’t usually talk about is Knightian uncertainty – that is, risk you don’t know enough to quantify, or sometimes even recognise.

This was what former US defence secretary Donald Rumsfeld was talking about when he famously spoke of “unknown unknowns“. That Rumsfeld’s comment is frequently ridiculed just shows how alien considerations of uncertainty are in the public discourse*. Almost no-one wants to say, “well, we just don’t know”. There are things you might do if you just don’t know. They rarely get talked about.

But if you’re having a serious conversation about infrastructure, you have to talk about uncertainty.  Continue reading →

The Persistence of de Facto Power: Elites and Economic Development in the US South, 1840-1960

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By: Philipp Ager (Universitat Pompeu Fabra)

URL: http://d.repec.org/n?u=RePEc:hes:wpaper:0038&r=his

Wealthy elites may end up retarding economic development for their own interests. This paper examines how the historical planter elite of the Southern US affected economic development at the county level between 1840 and 1960. To capture the planter elite’s potential to exercise de facto power, I construct a new dataset on the personal wealth of the richest Southern planters before the American Civil War. I find that counties with a relatively wealthier planter elite before the Civil War performed significantly worse in the post-war decades and even after World War II. I argue that this is the likely consequence of the planter elite’s lack of support for mass schooling. My results suggest that when during Reconstruction the US government abolished slavery and enfranchised the freedmen, the planter elite used their de facto power to maintain their influence over the political system and preserve a plantation economy based on low-skilled labor. In fact, I find that the planter elite was better able to sustain land prices and the production of plantation crops during Reconstruction in counties where they had more de facto power.

Missing in action: Nick Cater and the failure of Australia’s conservative intellectuals

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LuckyCulture

Australia needs intellectuals, says Nick Cater. In his new book The Lucky Culture he writes:

A nation is entitled to look to its intellectuals to articulate its common purpose, to pull together loose strands and write a narrative that says where it has come from and where it is going. Only they have the skills of abstraction and gift of eloquence to capture shared emotions, to explain the past, frame the present and embrace its destiny.

Cater argues that Australia’s intellectuals have failed to deliver. On the one hand is a new Knowledge Class that disparages ordinary people’s moral emotions and sense of common purpose. And on the other is a cowardly rump of conservative thinkers who have failed to champion the nation’s culture and defend it against attack.

"If a charge of intellectual cowardice were to be brought against conservative thinkers, the National Museum would be Exhibit One", writes Cater. A initiative of the Howard government, the museum came under the control of the became "an assault on the very idea of nationhood."

In Cater’s account the conservatives’ defence of nationhood was half-hearted. They failed to challenge Knowledge Class doctrines like diversity, historical injustice and compassion – "ideas that subvert the democratic principles of an ordered society."

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