Friday, January 27. 2006
The Nation has a piece (beware, subscriber only, why?) called "A 'Top Ten' List of Bold Ideas" by Gar Alperovitz and Thad Williamson. I have nothing against bold thinking, even when most of the left is perpetually distracted doing damage control. But the prerequisite for bold thinking is better thinking, which for starters means thinking grounded in a better understanding of real problems and cognizant of what does and doesn't work. And it wouldn't be a bad idea to throw in a few practical steps along the way. I'm going to go through this top ten one by one, summarize as succinctly as possible, and hang my thoughts on at the end.
1. Real National Security. Three ideas: get serious about nuclear antiproliferation; spend more on homeland protection; eliminate energy dependence on the Middle East. The latter is one of those things that people say without thinking. The Middle East has nothing in particular to do with how much energy we use. That's a function of our economy, and the only brake on our use is cost. We increase that cost when we wreck the Middle East, but we also increase that cost when we boycott the Middle East. But in the long run the cost is going up anyway because the world's oil resource is being pumped dry. We might temporarily suppress prices by reducing demand -- by conserving or by finding other sources -- but not in the long run. And as long as the Middle East does have significant oil fields, we only hurt ourselves by hurting them. Of course, one big way we hurt ourselves is by driving people in the Middle East to attack us. If we could somehow figure out how not to do that most of these "real national security" costs would go away, and since they produce nothing much of value, that would be a plus for us as well as them.
And why should we care about a plus for them? Well, at bottom that's our real problem: we don't, and they know we don't, so when they suffer they have to figure that those of us who are not part of the solution must be part of the problem. Maybe that's unfair in principle -- our wealth is ultimately built more on our own hard work than on anything we ripped them off for -- but when you look back at history, even as recent as today's newspapers, you'll find a lot of bad things that we've done to them. And you'll find that our dominant ideologies of the pursuit of self-interest just fuel our misdeeds. We don't need to change that deep down, but we do need to recognize that policy can compensate for our sins -- indeed, one of the main reasons we need political institutions (both government and NGOs) is to do necessary things that business and markets can't do. Perhaps we can rationalize this change if we realize that it's in our self-interest not to appear to the world as a conceited, solitary, ill-tempered glutton surrounded by a sea of poverty and pent-up fury. After all, the only path to peace is in being a good neighbor. To do this, we need to build institutions that work, which means institutions that do the right things -- not a repeat of the post-WWII institutions that turned out just to be fronts for US control.
Horrible as nuclear weapons are, proliferation is only a small part of the problem, and would quickly become manageable in a world where conflict is reduced and fairly arbitrated -- i.e., in a world with viable international institutions working under broadly accepted guidelines regarding human rights, national rights, environmental standards, fair trade, development aid, etc. But at the same time nations such as the US need to dismantle or convert their unilateral and allied forces that cast a pall over less powerful countries. For instance, it is well known that the key to nuclear nonproliferation is nuclear disarmament by the great powers. The political challenges here are huge, as the US has refused to participate in such obvious treaties as the elimination of chemical and biological weapons -- a constraint we hypocritically insist others follow -- and even mines. Moreover -- well, the catalog where the US is a major obstacle to world peace and justice is astonishingly large.
One reason why the US is in this position is our paranoid obsession with security. Given this, the big problem with A&W here is that they propose to increase our appetite for security, not reduce it. The plain fact is that even if the US had no military beyond the minimal self-defense forces that Japan, for instance, has, no nation would have the slightest interest in attacking us -- domestically, anyhow. And such a reduced international footprint would cause us far less trouble abroad. Perhaps there would be economic costs to American (multinational, really) businesses abroad, but even there nearly all nations are eager to attract foreign investment, and those that aren't tend to be extremely marginal.
2. Single-Payer Universal Healthcare. Well, duh! The market has failed massively here, and the insurance companies are the most obvious of the problems, but the problem goes far beyond this, and the solutions aren't always so obvious. The core idea is that equal, universal access to quality health care should be a publicly-supported right. But it's not clear what's the best way to split the system between the private and public sectors. And it seems quite unlikely that the "incredible 15 percent of our GDP" we currently spend on health care can or will be much reduced. (We are accustomed to spending that much, and savings can always be reinvested in higher quality, which is likely to be desirable.) And there's always the question of how to move from the current system to anything better. One sensible proposal is to build on the current medicare system to progressively expand coverage of the uninsured, and to expand the VA system (which will probably be necessary anyway given the fiasco in Iraq) to increase supply and limit prices. The pharmaceutical industry can rather easily be limiting patents, and any shortfall in research and development can be financed publically, with the added benefit that data be public.
3. Real Social Security. "A good place to start is with a proposal put forward by former Bush Treasury Secretary Paul O'Neill that would produce the equivalent of a million-dollar annuity for every citizen -- enough to guarantee $50,000 or more a year for everyone in retirement." I don't understand this, but it sounds like snake oil. Honest social security would be to revert to a pay-as-you-go system, instead of the current system of overtaxing workers to subsidize deficits the Republicans plan to default on eventually. Saving for the future assumes that assets retain enough value to cover future costs. While this is often true for individuals, it becomes very risky for everyone-at-once, especially given that we can already see debilitating future costs implied by present systems, especially energy and health care costs. Putting the taxes necessary to fund social security off until needed may seem imprudent, but what it does is put the burden squarely where it belongs. Are we willing to assume responsibility as a civilized nation for supporting our old and infirm? If the answer ever becomes no we will have more serious problems than a mere accounting shortfall.
4. Universal Daycare. Presumably A&wmp;W mean public daycare to compensate for any shortfalls in private daycare. This is something that could be extended from the current public education system. I don't know how important or valuable it might be. One thing I'd worry about is how it might turn into a system for subsidizing low-pay jobs.
5. A Rebuilt Educational System. Free college tuition; reduced K-12 class sizes; more Head Start. One thing nobody talks about is the need for non-credentialed adult education. We live under the illusion that education is needed to train children and to certify adult workers, but that's all. But we actually live in a world that is constantly changing, that becomes more complicated, that has to deal with new technology and science and bureaucracy and such that people are increasingly estranged from. We need some easy way for people just to keep up, and we need remedial education for people who didn't get it the first time. Moreover, as our education systems have become ever more obsessed with credentials, we come to devalue learning, knowledge, and the arts in their own right. And by seeing credentials as personal assets, we withdraw public funding and expect the students to make up the difference. One effect of this is that the price of education has consistently risen faster than inflation, which has many effects, including closing the door of opportunity on the poor -- something that adds to their sense of injustice. Consequently, we lose sight of the notion that a well educated citizenry is a national asset, a fundamental source of wealth. Needless to say, one consequence of this lack of interest in real learning and knowledge is we become more ignorant and confused and likely to fall for really dumb and dangerous ideas and politicians. (Q.E.D.)
Also note that education isn't just a matter of schools. It has to do with knowledge, understanding, analytical skills, behavior, all sorts of things, many of which are conveyed in rather ad hoc ways through the media. Ergo, the many problems that we have with our privately owned (increasingly privately interested) media are tied to our problems with education. Also note that these problems are compounded by systems of misinformation and disinformation -- think of them as countereducation, deliberate attempts to sabotage our obtaining an accurate understanding of the world. Who would do such a thing? Well: advertisers, PR flacks, spinmeisters, lobbyists, politicos, preachers, anyone with a private agenda.
6. A Thirty-Hour Week. Sounds nice, and many people would find it attractive (but not as attractive as a 20-hour week). But historically we've never been satisfied with the amount of work we do, so as we become more productive at present tasks we're more likely to add new tasks than to cash in our savings for leisure. For example, we've reduced the percentage of the work force needed for agriculture -- a basic need, but limited by satiety -- from 90 to 3, yet we've found something else for all those people to do. The new jobs are mostly service jobs -- health care and education are two areas that are certain to absorb more people as manufacturing and other resource-dependent jobs decline. There are, of course, many opportunities for eliminating unnecessary jobs, and at least some of those can be converted to leisure time. But it's also likely that more and more leisure time will be converted into unpaid work, like volunteer service. After all, in the end our wealth and welfare depend primarily on how much useful work we do. Until we're satisfied with our wealth and welfare we'll keep working.
7. A Fair Tax System. The proposal here is in the soak-the-rich category, intended to pay for all the other proposals. Given recent changes in taxes and other economic trends that massively favor the rich, there is plenty of reason to nudge the tax burden in a more progressive direction. But taxes are a more complicated issue, and we need to think it through instead of just fiddling ad hoc. One principle is that there needs to be a balance of taxes and spending: you want more spending, you get more taxes, and vice versa. Another is that taxes are fundamentally bad: anything taxed is discouraged because it becomes more expensive. Another is that taxes, especially prohibitive ones, encourage avoidance or evasion: sin taxes may discourage sin but they don't prohibit it because at some point sinners resort to evasion which is often worse than the sin was in the first place (classic example is bootlegging leading to organized crime leading to further criminal activity). Another is that it's easier to raise taxes on transactions (they already involve the transfer of money, so the tax merely increases the price) than on assessments (which force one to find the money elsewhere). Another is that the tax distribution reflects the nation's basic sense of justice, or at least the distribution of power. (Tax cuts for the rich reflect the ascending power of the rich over the rest of us.)
I have a bunch of ideas on what would be a fair and sensible distribution of taxes. I'll sketch this out briefly, but I won't throw any numbers out, mostly because the numbers depend on the level of government spending, which is subject to further debate. But here goes: Most taxes should be based on sales of consumables (as opposed to services or payroll or profits) and should be flat (i.e., everyone pays the same rate for the same product). These are relatively painless in that they merely add to the cost of consumption. They don't disincentivize labor or savings. The tax rates can be varied by product: for most products we don't want to do this because variances are more complicated, but there are some products that have externalities -- long-term costs to the nation that are not factored into manufacturing costs -- and these should be taxed at higher rates reflecting the long-term costs. One example is a product which has an exceptionally high disposal cost -- in these cases the externality tax pays for subsidizing future disposal or recycling. Another example is gasoline, which when burned produces pollution, which has various long-term costs.
Two sets of taxes would cover income. I'd make a distinction between earned income, such as wages or small business profits, and unearned income, such as interest, dividends, capital gains, inheritance, and gifts. Earned income would be taxed over an annual period using a progressive tax scale, much like current income taxes, except lower (because more taxes will be raised on consumption) and, at least relative to the lower tax brackets, more progressive. Unearned income would also be taxed progressively, but its brackets would range by cumulative lifetime income. This practice would mean that the first few hundred thousand dollars of unearned income would be taxed very lightly (if at all), encouraging everyone to build up savings, but income above higher thresholds (up in the million dollar range) would be taxed substantially. Progressive taxation encourages poor people to build assets and become richer. One might argue that it discourages the rich from becoming richer, but in practice all it does is slow down their accumulation of further riches. In a nation that values equal opportunity, that's a pretty fair deal.
We would also have estate taxes, and these would be very progressive. One core idea here is that the distribution of wealth in a nation can only be just if the wealth is obtained as the result of one's efforts (earnings plus savings). Inheritance is not similarly deserved, and leads to favoritism and aristocracy. For small estates this matters little -- in those cases the inheritance would be taxed as unearned income above, as would gifts, an obvious way to avoid estate taxes.
All of the above taxes involve transactions, so they can be paid (or in the case of income withheld) at that time. Some other transactions may be taxed, such as changing money or transferring stocks. On the other hand, property taxes are assessments. The money to pay them must be obtained from elsewhere, in the worst case by liquidating the assessed property. I would discourage, and if possible eliminate, property taxes, except for corporations. Part of the rationale here is that the long-term concentration of property for individuals is eliminated by death and the progressive estate tax. But corporations don't necessarily die, so exempting them from any sort of property tax would let property accumulate indefinitely in corporate hands. There are other corporate tax issues I can't go into at this point. I would be inclined to tax corporate profits after dividends have been paid out, and to use a progressive tax scale. This comes from a preference for small corporations, which are likely to be more competitive.
This is only a broad outline. Many other wrinkles are possible, depending on how you wish to fine tune the system, what sort of behaviors you want to incentivize or disincentivize, etc. There are other issues, especially caused by multiple independent tax authorities such as we have in the US. Multinationals also present problems, such that it may be advisable to develop a system for consistent taxation across national borders. (Such taxes might go directly to international organizations.) Also note that taxing the rich more means they'll have less money to invest, so it may become more important to provide public funding for investments that are currently handled by the private sector. This needn't be a bad thing.
8. Worker-Owned (and Community-Owned) Means of Production. This is A's pet issue -- he's written a book on the subject, which I have but haven't gotten around to -- and he's on to something here. Employee-ownership solves many of the interest conflicts that threaten to tear up companies. For starters, there's no need for a union or union busting when both sides are the same. Once both labor and management understand that the only way to make money is to compete more effectively in the market -- as opposed to picking each other's pockets -- they can actually work together, and the added effectiveness is surprising. The games between owners and management also vanish, starting with the 400X CEO salaries -- a CEO may be able to scam a board, but not the employees. I worked for a start-up with a substantial employee interest, then saw it sold out to another company, and the difference in productivity and morale and before long profitability was astonishing.
9. Planned New Communities. A&W assert that the US population will grow to 400 million by mid-century and 1 billion by 2100, so they urge planning to combat sprawl. My first sanity check would be to look at what can be done to lower those population figures. No other rich country is growing like that, and developing countries with half a shot at actually developing are aiming at much lower growth rates. My second sanity check is that some factors are real likely to start limiting sprawl, like rising gas prices, and the need to keep enough farmland to feed all those people. Some fairly simple changes in tax laws would turn things around real fast, too. Planned communities have a checkered past -- I can think of some that work, many more that don't. Denser cities, which would be a more productive way of accommodating population growth, are hard, if indeed possible, to plan. (Nothing has convinced me that Jane Jacobs is wrong on how cities grow.)
A Twenty-First-Century Regional America. Argues that the US should break up into regional super-states. I don't see the value, but then I don't live in a blue state trying to secede from red state hell. If there is any merit to the idea, maybe Canada will try it first and work some of the bugs out. (Canada is actually a lot more regionally unhomogeneous than the US is, despite all the red-blue nonsense.)
A&W admit this isn't an exhaustive list. They also mention public investment, fair trade, a living wage, raising CAFE standards, civil liberties and civil rights, eliminating world poverty. They don't go for anything as mundane as making it illegal to bribe politicians, or as far out as decriminalizing recreational drugs. The next week's issue of The Nation followed up with several members of Congress making more concrete proposals -- more measured and practical ones, but not crippled by compromise.
I have an outline for a book on politics, and one of the main sections -- after several on history and and blundering goosesteppers on the American right -- will attempt to put some flesh onto an old Rush Limbaugh title, "The Way Things Ought to Be." Bold ideas such as I discussed here figure large in this section -- this is a big part of why I've written all this -- but it starts from thinking about small ideas: the first one is trust, or maybe it's respect. I think you have to work your way out from these basics, and if you don't, you're likely to get lost. Despite a flirtation with AuH2O in 1964, my background is mostly on the left, but I find reflexive leftism to be as useless and dangerous as much of what comes out of the right (idea-wise; if we have to have hate speech, I'll still side with my tribe). But I'm inclined to view the political agenda that we need as one of centering, and in this I don't mean splitting the difference between left and right. I mean centering oneself on the real problems and on viable solutions. This means that you start with small changes that nudge us in the right directions. It means that you don't fight with nature; you try to get it to work for you. I don't have much of this figured out, but I have come up with some things that make sense, and I think I'm moving in the right direction. That's the method. We'll see how it works.
For one example of this, see my peace plan for the Israeli conflict, where I argue that Israel and the Palestinians are incapable of resolving their conflict on their own, and that the continuation of the conflict is so damaging (not just to them but to all of us) that the world needs to make a concerted effort to bring this to a satisfactory conclusion. If any conclusion from Hamas' election victory is obvious is that my argument is right and my plan is the only way out. Thus far I've seen essentially no interest in the plan or anything like it. And that's very disappointing, but I don't know what else to do. I suspect that Jane Jacobs is right: that dark ages are not just coming, they're already here. All I can do is keep my little candle burning, in hopes that someone else might glimpse it. It may be that that's all any of us can do.
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