Wednesday, May 11, 2005

I Want Bigger Government!

I am not an economist. Actually, I have no background in economics at all, if one ignores "Capitalism for Beginners" and "Marx for Beginners".

Like all Yugoslavs of my generation, I suffered through a couple of years of "Marxism" classes back in high school and college - classes that both teachers and students hated and did the absolute minimum. My high-school teacher gave us not-so-subtle hints about what she thought about it. When it was time for Marxism class, she would invariably come down with a severe case of sore throat, make us read out aloud from the textbook, and we all got As for literally memorizing several passages from the book with absolutely no discussion or required understanding of the material. She also taught history, in a very inspired way. She loved history and it showed. She was never sick for history classes, and we had to know and understand the material very well.

Anyway, I have too many other things to do right now, so studying classics of economics is not something I am planning to do just so I can occasionally blog about it. I'll just write from a perspective of a poor student, husband and father, a US citizen in a Red State who grew up in a socialist country.

Regular readers of my blog know that I write a lot about Lakoff's scheme and the whole issue of framing, so I will try now to put some thoughts together about the way one's worldview colors the way one thinks about the Government, about Taxes, and about Free Market, and how those three are connected.

Small government, Big Government

According to Lakoff, Conservatives and Liberals have different views on what the government is supposed to do. When each side complains about the Big Government, they have diffent things on their minds. It is not bloated bureacracy they are complaining about. It is the way money is spent.

Any governmental investments into programs that help ordinary people, e.g., health care, welfare, environmental protection, are sore spots for Conservatives. According to their moral system, poor people are poor because they are stupid and/or lazy. They do not deserve help and, in fact, helping them financially just makes them more lazy. Conservatives do not accept the findings of social research that one's economic status is, by and large, determined by the economic status of their parents, and often contingent on historical inequalities based on geography, race, ethnicity, gender, or sexual orientation. In the Conservative moral system, the most obedient and self-disciplined people will inevitably rise in the society. As a result, the richest people MUST be the most moral and upstanding citizens. They deserve every penny they earned, and their companies need to be left alone.

On the other hand, Conservatives are fearful people, easily scared by foreigners and terrorists (or Blacks, or gays, or assertive women), and easily convinced in the neccessity of war. They look up to their Daddy, the government, to defend them and protect them from the dangerous "Other". Thus investement into the military, the police and the prison system, no matter how large, how wasteful, or how unneccessary, is sound investment in Conservatives' eyes. These aspects of the government are also hierarchical, which jibes well with the way they understand the world, they are punitive, which is in accord with their Dobsonian notions of folk behaviorism, and they are aggressive, which fits well with conservative machismo that covers up their femiphobia.

For Liberals, on the other hand, bloated inefficient military that wages unneccessary unjust wars for emotional reasons, record incarceration rate (especially of African Americans and marijuana-users), and aggressive police force that snoops and crushes all dissent are not just examples of "Big Government" run amok and wasteful misuse of money, but also deeply immoral, un-democratic, pre-modern and un-American.

Get The Government Off My Back!

Conservatives, especially Libertarians, always campaign on the "less government" platform. What do they really mean by that? Smaller military? No. Reduction of bureaucracy and improvement of efficiency? No.

What they think is that the Government is a Big Bad Wolf, the enemy of the common man. Half of the nation is so alienated from the government ("of the people, for the people...."), they do not even bother to keep up with what it is doing, or even to vote. Another quarter of the nation, at least, sees Government as some kind of alien entity, something evil that needs to be faught against and voted against (a contradiction in terms, don't you think?).

Preciously few Americans understand that they are a part of Government. Government is not just a bunch of suits in Washington DC. Every American is, by definition, and should be, a part of Government. We all live our lives and do our jobs. Some are teachers, some physicians, some are miners, or bus drivers. We live in a large and complex society (thus vulnerable to free-loaders and cheats) and the interactions between members of the society need to be regulated. How they are regulated needs to be the business of everybody - not just a few rich professionals in DC. In theory, we all follow the news, vote for people we trust for local office (and higher offices, too), sometimes sacrifice a few years of our lives to serve the people ourselves, all in effort to make sure that the society operates smoothly.

Of course, that is in theory. In practice, government is a bunch of crooks in DC (or state capitals and county seats - those are even worse). But, this is not going to change as long as at least three quarters of the country a priori rejects the notion that they are the Government and that they have a say in how the society functions.

It's My Money!

If you think of Government as an alien entity, then of course you will resent handing it your money. But if you think of yourself as a part of government, than you happily pay your membership dues. You have a more communitarian spirit. If we, as a government, decided that we will build roads, deliver mail, conduct world-class research, teach our kids well, protect the environment, protect ourselves from the shennanigans of the free-loaders and cheats, take care of the poor, old and sick, than I will gladly pay my share. We spread our investment and spread our risk for the greatest good of the greatest number of people in our community, our state, our country, and the World.

When someone says about taxes that "It's my money" I say "OK, you build your own roads, deliver your own mail, educate your own employees, fund your own R&D, defend your own business and home from criminals and terrorists, build your own power-plant, water-plant and sewer-system. It's all yours and only yours to use." Those who are the richest are using the most of the tax-funded infrastructure today, they have used it most in order to become rich in the first place, and need to pay the greatest share for their use of that infrastructure. It's just fair .

Invisible Hand

I have argued before that Conservatives are not "for" Free Market. Furthermore, I stated that they may be incapable of understanding the free market - at least not more than a single iteration of its operation.

Their worldview is fundamentally hierarchical, thus they have difficulties imagining a system in which there is no top-down control. While they resent the top-down governmental control of a Stalinist system, they do not see how similar to it is their preferred system: the top-down control of economy by owners of big corporations. To the extent that top echelons of the federal government are themselves CEOs or ex-CEOs or great buddies with CEOs, one can almost refer to this system as governmental top-down control of economy - just like the communist system. What's the difference? In both cases a few privileged individuals plan and control everything and write laws and regulations the way they see fit. That is NOT free market.

Free market is not a hierarchical system. It is an interactionist system in which there is no Controller (or Designer), thus a fundemantally Liberal system The identities of players are not important, but the rules of interactions between players are. Bigger the system, more stable it is. A dictatorial system is also stable, but it is rigid, i.e., incapable of adapting to changing (economic) environments. A true free-market system is stable yet responsive and adaptable. It is an evolving system thus more likely to survive longer.

In a hierarchical system (both Stalin/Mao version and Bush/Cheney version) order is designed, put in place, and defended by the Guy On Top. In an interactionist complex system (free market) order arises out of inetractions of parts. It is an emergent property of the system. No one element of the system defines, plans or defends it: the system itself defends itself.

Role of Taxes in a Free Market Economy

As I stated above, the rules of interactions are the key to the flexible stability of an interactionist system. In a physical or bioloigical system, the rules involve the exchange of matter, energy and/or information. In an economic system, rules guide exchanges of goods, srevices and money.

In a system in which the rules only deal with exchanges between individual elements (the libertarian dream), inevitably some elements become predominantly net donors and the others net recipients. As the recepients accumulate matter/energy/information, they get bigger and begin to dominate the system, including changing the rules. The net donors become increasingly dependent on net recepients for what little they get. In other words, the elements of the system are not independent from each other any more.

The final result of the operation of such a system is the system's death: the donors die off as they keep getting less and less, and recepients die when the donors are gone as there are no more sources to take stuff from. In the real world of economics, before the system gets to this point (and it sometimes get close, like Rwanda and Sudan recently), there is a revolution of some kind and the system is reset and new rules imposed (often after a brief period of total anarchy). Alternatively, the system achieves a kind of a vulnerable steady-state with a strong top-down hierarchy and rigid control of all exchanges by one or a few largest players. The system can attain this state in as short a duration of time as a single generation of humans. That is what I meant by "single iteration of free market" above. The authoritarians don't mind this inherent inequality - slavery and feudalism are based on it - but the system is too rigid to remain viable too long.

For a system to remain a) stable, b) flexible and c) composed of independent elements, rules of one-on-one interactions are not sufficient. Additional rules affecting the system as a whole, as well as subsets of the system are neccessary. In other words, some of the matter/energy/information is not exchanged between individuals but between subsets of the system. The rules involve the ways that matter/energy/information (or goods/services/money) is given by elements into a common (subset-wide or system-wide) pool and the ways such accumulated matter/energy/information is exchanged back to the elements of the same set, or elements of other sets, or pooled resources of other sets. One of these higher-level rules is the tax-code (though others also exist). Without taxes, the system is incapable of building its own structure needed for long-term stability of the system.

If your idea of taxes is the one represented in comic strips like Hagar The Terrible or Wizard Of Id, i.e., tax collectors take your money and give it to the King to play with, you are a couple of centuries behind times. Taxes are a neccessary mechanism that ensures independence of all elements in the systems (so that you, too, can benefit from the free market and get rich), stability of the system (building of infrastructure that makes the system more efficient and whose existence makes it easier for you, too, to benefit from the existence of others in the society and get rich), and flexibility of the society (so that, no matter what political or technological changes occur, both the whole system and you as a part of it can respond swiftly without too much disturbance, thus allowing you to gradually get rich without going bancrupt several times in the meantime).

However, if you think like Hagar, and refuse to pay your taxes, or elect people who cut taxes (or use them for stupid programs, like bloated military machine to be used against invented enemies), then you are a freeloader and a cheat. A well-functioning free-market system is going to have inherent mechanisms for defending itself against you and minimizing the effects of your action (by putting you in jail, for instance, and/or confiscating your possessions).

In summary, Government in a Free-Market economy is a complex system in which all elements are independent (the Liberal notion of "equality (of opportunity)" ), all elements together comprise the Government (i.e, it is not a separate entity either within or outside the system), and taxes are essential mechanism for ensuring the long-term health of the system. People who do not see themselves as parts of Government (outside of the system), do not like paying taxes, and like only one round of free-market (while they go to the top, then stop and rule the others) before instituting a top-down hierarchy, are thus, by definition anti-democratic, anti-free-market, and anti-capitalist. Those people are called Conservatives.

If more people understood this and 100% of Americans thought of themselves as parts of Government and elements in the Free-Market System, the rallying cry would be "I Want Bigger Government!"‡

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