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Required Reading: The Future of Capitalism by Paul Collier
Posted on 5/26/19 at 2:58 pm
Posted on 5/26/19 at 2:58 pm
Everyone should read this thought-provoking book by Oxford prof Paul Collier. An admitted European-style social democrat, Collier presents a compelling defense of Capitalism’s most beneficial features while rebuking the ways in which it can be distorted to benefit the few at the expense of the many (see 2008/2009 Financial Crisis).
In a nutshell, the left (focusing more on the “social” side of social democrat) have taken paternalism entirely too far. Utilitarians have replaced everyday morality with a vanguard of technocratic elites who, in their sole expertise, are charged with administering ever more minutiae of our lives. On the other hand, Rawlsian lawyers (read: SJWs) have become almost anti-utilitarian by judging society chiefly by how well its laws benefit the most disadvantaged (at the expense of everyone else) and in the process assuming for themselves the role of saving these helpless souls. Both of these groups have discredited family obligations in favor of state obligations and have discredited national obligations in favor of obligations to the global victim classes.
Meanwhile, the right have become libertarian and individualistic to a fault, literally allowing themselves to be boiled down to nothing more than the “rational economic man” of economics textbooks. In the process, they’ve become hyper-self-interested, while dismissing any notion of shared identity, communal well-being or reciprocal obligation. Skepticism towards the state has resulted in a blanket dismissal of any and all tax policies, even those which may have net economic gain to society (such as taxing the agglomeration of wealth in urban centers to support rural transition) or which are intended to close a needed loophole (such that Starbucks in Britain was able to avoid taxes by paying an annual fee in the amount of its pre-tax income to a Caribbean subsidiary with a 0% tax rate who apparently charged it said amount for the use of the trade name “Starbucks”).
In full disclosure, I’m much more fiscally libertarian than Mr. Collier, but nonetheless found myself being challenged by many of the capitalistic “distortions” he describes. To Mr. Collier’s point, it is capitalism’s bad actors that drive the masses towards the nanny state and socialism in the first place.
If you would like to read a review, look to none other than Bill Gates:
LINK
In a nutshell, the left (focusing more on the “social” side of social democrat) have taken paternalism entirely too far. Utilitarians have replaced everyday morality with a vanguard of technocratic elites who, in their sole expertise, are charged with administering ever more minutiae of our lives. On the other hand, Rawlsian lawyers (read: SJWs) have become almost anti-utilitarian by judging society chiefly by how well its laws benefit the most disadvantaged (at the expense of everyone else) and in the process assuming for themselves the role of saving these helpless souls. Both of these groups have discredited family obligations in favor of state obligations and have discredited national obligations in favor of obligations to the global victim classes.
Meanwhile, the right have become libertarian and individualistic to a fault, literally allowing themselves to be boiled down to nothing more than the “rational economic man” of economics textbooks. In the process, they’ve become hyper-self-interested, while dismissing any notion of shared identity, communal well-being or reciprocal obligation. Skepticism towards the state has resulted in a blanket dismissal of any and all tax policies, even those which may have net economic gain to society (such as taxing the agglomeration of wealth in urban centers to support rural transition) or which are intended to close a needed loophole (such that Starbucks in Britain was able to avoid taxes by paying an annual fee in the amount of its pre-tax income to a Caribbean subsidiary with a 0% tax rate who apparently charged it said amount for the use of the trade name “Starbucks”).
In full disclosure, I’m much more fiscally libertarian than Mr. Collier, but nonetheless found myself being challenged by many of the capitalistic “distortions” he describes. To Mr. Collier’s point, it is capitalism’s bad actors that drive the masses towards the nanny state and socialism in the first place.
If you would like to read a review, look to none other than Bill Gates:
LINK
This post was edited on 5/26/19 at 3:04 pm
7
Posted on 5/26/19 at 3:09 pm to RedStickBR
There’s some truth in what you described in your post. But there’s more to it than this:
I vote against any new taxes, and I vote against candidates that are most likely to introduce new taxes, not only because I’m skeptical of the trustworthiness of our elected officials, but because I know creeping socialism is a fact, and there is no reasonable stopping point with marxists, so the solution is to give no ground without a fight.
If the marxists got a top tax rate of 50% passed today, they’d start pushing for 60% tomorrow. No thank you.
quote:
dismissing any notion of shared identity, communal well-being or reciprocal obligation. Skepticism towards the state has resulted in a blanket dismissal of any and all tax policies, even those which may have net economic gain to society
I vote against any new taxes, and I vote against candidates that are most likely to introduce new taxes, not only because I’m skeptical of the trustworthiness of our elected officials, but because I know creeping socialism is a fact, and there is no reasonable stopping point with marxists, so the solution is to give no ground without a fight.
If the marxists got a top tax rate of 50% passed today, they’d start pushing for 60% tomorrow. No thank you.
This post was edited on 5/26/19 at 3:15 pm
Posted on 5/26/19 at 3:10 pm to RedStickBR
quote:
. In the process, they’ve become hyper-self-interested, while dismissing any notion of shared identity, communal well-being or reciprocal obligation.
This might be in Europe, but not here...
The right tend to fly the flag, welcome everyone under the representation of "the people" and do not typically like petty crimes on the books, but would harshly enforce/punish crimes dangerous to the community.
The notion of self governance applies to every self in upholding common decency...laws are typically made for those that choose not to uphold decency.
That is what the right tend to share...
The rest of his points are fair.
Posted on 5/26/19 at 3:20 pm to TheHarahanian
Read the book for yourself, as my very brief review doesn't do it justice and it covers a whole lot more than what I chose to write about. Such as:
Urban vs Rural divide
Developed vs Developing world divide
Educated vs Non-educated divide
The failures of the two-party system
The failures of Marxism and the modern left's inability to learn from history
The failures of European style open borders
Without going so far as to outright admit it, he more or less concludes that the left and their paternalism are responsible for a larger share of society's ills, but that the right's responses to the left's intrusions have only served to exacerbate the issues. Basically a case of "two wrongs don't make a right."
Urban vs Rural divide
Developed vs Developing world divide
Educated vs Non-educated divide
The failures of the two-party system
The failures of Marxism and the modern left's inability to learn from history
The failures of European style open borders
Without going so far as to outright admit it, he more or less concludes that the left and their paternalism are responsible for a larger share of society's ills, but that the right's responses to the left's intrusions have only served to exacerbate the issues. Basically a case of "two wrongs don't make a right."
Posted on 5/26/19 at 3:23 pm to RedStickBR
“Democratic Socialism” (Socialism and Capitalism combined under a Democratic rule of law) is a crock of shite and can’t work.
Is this what this guy is advocating or did I misunderstand that?
Is this what this guy is advocating or did I misunderstand that?
This post was edited on 5/26/19 at 3:26 pm
Posted on 5/26/19 at 3:38 pm to RedStickBR
Great post. I made a similar pitch for folks to read this a few months back, but didn’t get much traction. Though admittedly your OP is far more detailed and better written than mine haha.
I agree that the book is a terrific and timely evaluation of the core economic divides occurring today. And bonus points for it presenting such strong, well reasoned set of arguments against the growing radical left and the danger inherent in following their headless heart.
It also had great segments on the failures of institutions like the WTO and World Bank as they have been overtaken by these self proclaimed guardians of Plato’s republic, and the damage caused therein. Folks should definitely check it out. Collier is an elite level economist and this is a well written treatise. Highly recommend
I agree that the book is a terrific and timely evaluation of the core economic divides occurring today. And bonus points for it presenting such strong, well reasoned set of arguments against the growing radical left and the danger inherent in following their headless heart.
It also had great segments on the failures of institutions like the WTO and World Bank as they have been overtaken by these self proclaimed guardians of Plato’s republic, and the damage caused therein. Folks should definitely check it out. Collier is an elite level economist and this is a well written treatise. Highly recommend
Posted on 5/26/19 at 3:41 pm to BeefDawg
He's a social democrat, but not a nanny stater. He would identify more with Mises than Marx. But he absolutely believes capitalism lives up to its true potential when confined within a regulatory framework (particularly on taxes) that minimizes undeserved economic rents from being earned by the wealthiest and most powerful in society.
Some of his tax policies I have to admit are pretty clever. While he generally favors property taxes over income taxes, he would favor higher taxation for those who earn income from activities which have no net traceable benefit to society (for instance, the worst of the personal injury attorneys).
He thinks urban dwellers should be taxed at a higher rate as one reason they are able to earn more owes to the fact that urban agglomeration makes them more valuable. Yet said urban agglomeration is also what makes real estate too expensive for the average Joe, so there's a free-riding effect wherein the super-educated living in cities reap enormous gains at no cost to themselves.
Again, he's left of me on the fiscal spectrum, but one can be provoked by an argument without agreeing with it, and this book does as good a job as any I've read recently of challenging conventional norms across the totality of the political/economic spectrum.
Some of his tax policies I have to admit are pretty clever. While he generally favors property taxes over income taxes, he would favor higher taxation for those who earn income from activities which have no net traceable benefit to society (for instance, the worst of the personal injury attorneys).
He thinks urban dwellers should be taxed at a higher rate as one reason they are able to earn more owes to the fact that urban agglomeration makes them more valuable. Yet said urban agglomeration is also what makes real estate too expensive for the average Joe, so there's a free-riding effect wherein the super-educated living in cities reap enormous gains at no cost to themselves.
Again, he's left of me on the fiscal spectrum, but one can be provoked by an argument without agreeing with it, and this book does as good a job as any I've read recently of challenging conventional norms across the totality of the political/economic spectrum.
Posted on 5/26/19 at 3:44 pm to funnystuff
Can you link to the prior thread?
I was a bit surprised by his candor as an Oxford economist. He absolutely shreds the left at times, then starts swinging on the right. Even though I disagree with some of his prescriptions, the sheer honesty and humanity of his writing is awe-inspiring.
I was a bit surprised by his candor as an Oxford economist. He absolutely shreds the left at times, then starts swinging on the right. Even though I disagree with some of his prescriptions, the sheer honesty and humanity of his writing is awe-inspiring.
Posted on 5/26/19 at 3:57 pm to RedStickBR
One month back
And I agree that it was extremely refreshing to see one of the biggest players in economics be so blunt about the failures occurring in the field.
And I agree that it was extremely refreshing to see one of the biggest players in economics be so blunt about the failures occurring in the field.
Posted on 5/26/19 at 3:58 pm to RedStickBR
quote:Immediate fail. What happened (bailouts, hailing’s, etc) we’re not examples of capitalism. The opposite actually. Lumping then together is silly.
Capitalism’s most beneficial features while rebuking the ways in which it can be distorted to benefit the few at the expense of the many (see 2008/2009 Financial Crisis).
Posted on 5/26/19 at 3:59 pm to RedStickBR
quote:
He's a social democrat, but not a nanny stater.
Posted on 5/26/19 at 4:10 pm to Taxing Authority
I was expecting a salty response or two. Read the book for yourself. My summary won't do the author's arguments nearly as much service as his own words
To your point, though, you've contradicted yourself by conflating the Financial Crisis with "bailouts." The bailouts I agree were the opposite of capitalism. But the events which led up to the financial crisis (similar to the events which led up to Enron's collapse) would likely be interpreted by Collier (and Gates) as being driven by too narrow a focus on the immediate bottom line than the bigger picture. While capitalism will cause future firms to learn from those mistakes (no doubt Lehman Bros is worse off now than had it foregone the short-termism in the first place), Collier would argue regulation and tax policy also have a role to play. In fact, he discusses this alongside his discussion of the inequitable earnings of billboard lawyers.
To your point, though, you've contradicted yourself by conflating the Financial Crisis with "bailouts." The bailouts I agree were the opposite of capitalism. But the events which led up to the financial crisis (similar to the events which led up to Enron's collapse) would likely be interpreted by Collier (and Gates) as being driven by too narrow a focus on the immediate bottom line than the bigger picture. While capitalism will cause future firms to learn from those mistakes (no doubt Lehman Bros is worse off now than had it foregone the short-termism in the first place), Collier would argue regulation and tax policy also have a role to play. In fact, he discusses this alongside his discussion of the inequitable earnings of billboard lawyers.
This post was edited on 5/26/19 at 4:11 pm
Posted on 5/26/19 at 4:14 pm to RedStickBR
Hell I'm just impressed an Oxford-educated Economist would even be vocally critical of leftist economic policy.
The Keynesian groupthink is strong there, along with the Ivy Leagues here in the US. And that's not even counting the straight up socialists.
The Keynesian groupthink is strong there, along with the Ivy Leagues here in the US. And that's not even counting the straight up socialists.
This post was edited on 5/26/19 at 4:15 pm
Posted on 5/26/19 at 4:16 pm to Centinel
Exactly, for that reason alone the book is worth the read. He doesn't bend any words so as to not offend his academic peers.
This post was edited on 5/26/19 at 4:17 pm
Posted on 5/26/19 at 4:53 pm to RedStickBR
quote:
If you would like to read a review, look to none other than Bill Gates:
I will give the book a try.
I'll stand by this: the only reason Republicans hate taxes is because they dont see the tangible benefits. In a better system, taxes would go into our roads and schools. A good areas would attract more businesses so everyone could get a job that doesn't require welfare to subsidize them.
There are multiple ways to tackle this. But simply rejecting taxes without reforming the broken political system only exacerbates the issues of societal blight, not solve them.
Posted on 5/26/19 at 4:55 pm to RedStickBR
quote:
To your point, though, you've contradicted yourself by conflating the Financial Crisis with "bailouts." The bailouts I agree were the opposite of capitalism. But the events which led up to the financial crisis (similar to the events which led up to Enron's collapse) would likely be interpreted by Collier (and Gates) as being driven by too narrow a focus on the immediate bottom line than the bigger picture. While capitalism will cause future firms to learn from those mistakes (no doubt Lehman Bros is worse off now than had it foregone the short-termism in the first place), Collier would argue regulation and tax policy also have a role to play. In fact, he discusses this alongside his discussion of the inequitable earnings of billboard lawyers.
The financial crisis (as is with most economic crisis’) was directly caused by conspiring Collectivists and corrupt politicians defrauding the system and breaking laws.
How is this guy trying to attribute anything to real economic policy?
There was no exploiting flaws in Capitalism, and if that’s part of what he’s trying to place blame on, he’s a hack.
Posted on 5/26/19 at 5:00 pm to volod
Agree with your comments there. I’m for government being as small or large as optimally necessary for it to carry out the functions which have been reserved to it, or such other functions as the citizenry may from time to time determine it is better-suited to carry out (vs. the private sector).
But it would be much easier to support said optimally-sized government if one could have more conviction one’s tax dollars were going towards a fruitful purpose. Dedicated infrastructure funding, particularly when matched with private funding within a PPP, is the type of tax I could be very supportive of.
Europeans pay more taxes, but at least they can walk around their cities and see countless examples of their tax dollars being put to work. What exactly are some of the things we have to be proud of concerning our tax dollars in, say, Louisiana?
But it would be much easier to support said optimally-sized government if one could have more conviction one’s tax dollars were going towards a fruitful purpose. Dedicated infrastructure funding, particularly when matched with private funding within a PPP, is the type of tax I could be very supportive of.
Europeans pay more taxes, but at least they can walk around their cities and see countless examples of their tax dollars being put to work. What exactly are some of the things we have to be proud of concerning our tax dollars in, say, Louisiana?
Posted on 5/26/19 at 5:10 pm to BeefDawg
The Financial Crisis isn’t even a major topic of discussion in the book. Don’t let my review substitute for actually reading it. Most of his arguments are really more aimed at tax policy and the paternalism of the left. He simply argues for a capitalism that results in less of the gaming and cronyism you’ve described. I agree, crony capitalism is not really capitalism, but it’s the tendency of true capitalism sans sound regulatory policy to be hijacked by cronies that he attempts to wrestle with in the book (not necessarily capitalism itself).
His book starts off by saying the capitalism of Adam Smith included within it an appeal to moral philosophy that has been more or less lost over time. In other words, his argument would be that a more socially-conscious capitalism (as opposed to unfettered profiteering) is the true capitalism as original envisioned by calitalism’s pioneers.
His book starts off by saying the capitalism of Adam Smith included within it an appeal to moral philosophy that has been more or less lost over time. In other words, his argument would be that a more socially-conscious capitalism (as opposed to unfettered profiteering) is the true capitalism as original envisioned by calitalism’s pioneers.
Posted on 5/26/19 at 5:26 pm to RedStickBR
quote:
His book starts off by saying [b]the capitalism of Adam Smith included within it an appeal to moral philosophy that has been more or less lost over time.[/ In other words, his argument would be that a more socially-conscious capitalism (as opposed to unfettered profiteering) is the true capitalism as original envisioned by calitalism’s pioneers.
This is a very good point, and I’ll add that not only has this notion of capitalism eroded, it has been intentionally undermined and distorted by collectivists/tribalists of all stripes, especially the communists.
The truth is that no system is perfect, and the primary struggles of humans are existential which means that we will always have to have regulations and checks and balances.
The best systems must be dynamic and responsive over time. But there must be truthful speech and trustworthy people in charge, or else it erodes. Morality matters.
I still maintain that the definition of Americanism is the belief in maximized individual liberty with collective moral responsibility.
Posted on 5/26/19 at 7:06 pm to RedStickBR
quote:
His book starts off by saying the capitalism of Adam Smith included within it an appeal to moral philosophy that has been more or less lost over time. In other words, his argument would be that a more socially-conscious capitalism (as opposed to unfettered profiteering) is the true capitalism as original envisioned by calitalism’s pioneers.
All "true capitalism" needs is "true competition".
And that's the problem with our system today. It's NOT true capitalism because there is no true competition.
For us to have true competition, these things need to happen:
1. Patent and Copyright Reform - IP should have a limit on it's exclusivity. Maybe 2 years of exclusive rights ownership, but after that, anyone/everyone can reverse-engineer/copy anything and then produce and sell it if they want. Hell, they can even attempt to upgrade it, creating an innovation boom. Supply and demand would boil down to quality and innovativness at that point.
2. Tort Reform - You can no longer sue competition into oblivion simply because you can afford more high powered attorneys and politically aligned judges.
3. Deregulation - Trump is already doing this. Remove the cost barriers that hurt upward mobility of small-to-mid size business while doing virtually nothing to already established large corporations.
4. Campaign Finance Reform - Remove the ability of corporations and outside forces to purchase influence of our legislators so no more laws and regs are made that benefit a certain few while harming competition to those certain few.
These 4 things would be a start and lead to significantly greater competition. Which would lead to lower consumer costs, greater innovation, higher quality goods and services, and significantly less wealth pooling.
Right now, we don't live in a Capitalistic Economic System, we live in a Monopolistic Wealth Pooling Economic System that corrupts the shite out of our politics to ensure their status.
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