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Structural inequities in society and the imperative of the welfare state

 
TheAnal_lyticPhilosopher
 
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TheAnal_lyticPhilosopher
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21 February 2020 07:40
 

(“Inequities” is used intentionally as a substitute for “equality,” the reasons for which are hopefully clear at the end of the piece.)

Conservative arguments against the welfare state (*) are generally based on the insistence that meritocracy and equality of opportunity are necessary and sufficient conditions for a morally desirable social order.  The argument goes: give everyone an equal opportunity to succeed, allow them to succeed or fail on their own merits, and the outcomes will sort themselves out.  The operative moral notion in this argument is fairness: it is fair, it is said, to give everyone an equal opportunity, and it is fair, it is added, to base success on exercising those merits to accrue the goods, status and privileges one needs to flourish and enjoy life.  Usually this argument quietly morphs from “allow” into “require,” but in any case, the conservative argument against the welfare state is that given equality of opportunity and success according to merits, inequality of outcomes is not only tolerable; it is just, meaning “fair” as well.

“Fairness” here invokes a sense of equality this is often overlooked in the debate over inequality of outcomes in general, and the welfare state in particular.  That is, once the moral notion of “fair” enters the dialogue over equality, it is useful to note that equality does not simply mean proportional distribution of goods, status, and privileges: it refers as well to a morally-loaded proportionality that is justifiable, even if disproportional.  As such, two people in a meritocracy of equal opportunity can have equitable outcomes despite having disproportional ones in terms of goods, status, and privilege.  As the argument goes, so long as Person A has the same opportunity to succeed as Person B, and so long as both exercise their initiative and abilities, unequal outcomes in the strict sense of one having more goods, status, and privileges than the other are equitable despite being unequal, meaning the unequal outcome is just, or fair.  This distinction between “equitable” and “equality” goes to the heart of the conservative argument against the welfare state.  So long as outcomes are based in equal opportunity and the exercise of merits, they are considered equitable despite being unequal.

A simple thought experiment shows this reliance on equity is misguided; in fact, that it leads to an internal contradiction—or at least to an internal inconsistency.  In any case it shows that the stress on equity given equal opportunity in fact calls for a welfare state, not speaks against it.  In other words, once equity is introduced as a substitute for equality in a social order, something like a welfare state becomes a moral imperative in order to insure fairness in the real opportunities to flourish and enjoy life—what is acknowledged by both liberals and conservatives to be the purpose of governance in the first place (see the Preamble to the Constitution, for instance).

The thought experiment is as simple as it is realistic.  Imagine a society with N people seeking employment in an economy divided into sectors more or less comparable to the US economy, with,  say, roughly 10% of jobs in retail trade, 10% in hospitality, 8% in manufacturing, 10% in health care, 5% in finance, 12% in professional services, 14% in government, etc.  Also, assume—realistically—that the number of jobs available doesn’t exceed the number of people.  Further, consider that the laws of supply, demand and price dictate that these jobs are both necessary for the economy to function and that they entail different salaries, some of which under full-time employment do not provide a living wage (as is the case with most retail and hospitality jobs).  Now assume further that everyone in the society is 1) equally capable, 2) equally devoted to realizing those capabilities, and 3) provided with equal opportunity to compete for these jobs that are stratified by income, and therefore stratified into unequal standards of living (again, in some cases a standard below a living wage).  What, necessarily, will happen?

Under any regime of opportunity and merit, some people will inevitably be forced into low tier jobs that do not earn a living wage, regardless of the sorting mechanism, despite being equal to anyone else in the society re their merits and opportunities.  There are, simply put, not enough living wage jobs to go around, yet these jobs are necessary for the functioning of the economy (again, under real conditions that exist in the US); therefore someone has to do them, some people will be sorted into them, and since jobs are proportional to population, under any given fair sorting mechanism for determining who will do them, some people will remain, as it were, ‘the losers.’  In other words, they will get an outcome structurally preordained to be unequal despite all else being equal—i.e. a non-living wage.  It must be asked: what moral consequences are entailed in this idealized regime of a perfect opportunity and meritocracy?

First, it will not be equitable.  Given 1-3, one can say that the realities of the social order forced some people into deprived positions despite being equal on the merits, while others were not.  The unequal outcomes in the strict sense therefore cannot be equitable in the moral sense because merit and opportunity are equal, yet outcomes are not.  Thus even under perfect conditions, there is an internal contradiction to the meritocratic regime, and this follows from the very emphasis the argument for meritocracy and opportunity places on equity as distinguished from equality, putting as it does “fairness” at the center.

Second, this problem is exacerbated, not solved, by relaxing assumptions 1-3.  For instance, relax 1 and assume, realistically, that not everyone is equally capable.  In this case, even under a perfect sorting mechanism by merit and opportunity, less capable people will be forced into conditions where flourishing and enjoyment are more or less impossible.  In this case, do we really want to live in a society that says: if you are less capable but equally hard working, you deserve not to have minimum conditions of flourishing and enjoyment, when in fact even if you were more capable, some people still wouldn’t have them anyway—and maybe you’d be one of them?  This would be a particularly heartless and illogical argument. 

Third, only under relaxing both 1 and 2 does the structural inequality pre-ordained by economic and social realities begin to appear equitable, despite being unequal.  For in this case, one can argue that people who don’t try end up in these non-living wage jobs, and add to this that not all have the ability to do much else and it appears persuasive that the unequal outcomes are in fact equitable, i.e. fair.  But this appearance is an illusion, in that it simply makes no sense to compound a morally plausible argument with an immoral one and call the result moral.  In fact, all relaxing 1 and 2 together do is obfuscate the fact that even under a perfect regime, the equity of meritocracy and opportunity cannot be maintained.  In other words, if even under perfect conditions meritocracy and opportunity fail to provide sufficient conditions for a morally desirable social order—one predicated on fairness—how can it be expected to under imperfect ones, i.e. in the society in which we actually live?

With these points in mind, it ought to be clear the imperative of a welfare state is entailed not so much in positive arguments to this effect as in the failure of the argument against it.  Or put more precisely, it is entailed in the fact that logically meritocracy and opportunity alone cannot provide the equity to which it appeals as its own foundation and ultimate justification.  For as noted above in introducing “equity” for “equality,” meritocracy and opportunity as sufficient conditions for a moral social order is predicated on unequal outcomes in the strict sense being equitable nonetheless, i.e. that disproportions of goods, status and privilege are fair.  But, as shown above, meritocracy and opportunity under even perfect conditions lead to unequal outcomes that cannot but be inequitable, i.e. some inevitably live in unfair deprivation, and this problem is exacerbated under the imperfect conditions that actually prevail.  So the case for meritocracy and opportunity fails, leaving left what it ostensibly negates—some imperative for a welfare state, if preserving fairness is the social goal.

To be sure, we can decide as a society to abandon fairness as a moral goal and the social order it entails and live instead by the rule of tooth and claw, with each taking according to their ability and initiative, regardless if some are left out.  We may even decide to euphemize this by calling it meritocracy and opportunity.  But on what basis can this order be moral when some citizens inevitably will be left out, or lose, or otherwise not flourish and enjoy, regardless of their merits?  Is this not a reversion to a natural, amoral order that animals live?  Shouldn’t we as a society aspire to better?

(*) This refers to a social safety net of varying degrees, not full socialism. 

[ Edited: 24 February 2020 04:41 by TheAnal_lyticPhilosopher]
 
GAD
 
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GAD
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21 February 2020 09:18
 

Well, that was a long winded, yet beautifully written, argument for the redistribution of wealth.  The premise of which seems to be that all people are great (equal) but some great people are forced to do less then great jobs, so the fair, equitable, thing to do is take wealth from the people who were forced into better jobs and redistribute to make things “equal”. And what is the bases of this, fair, equal, rights etc, all subjective human inventions trying to be forced into an objective argument that all people are equal, have rights and that nature is fair? Or are you only arguing that societies require this Ought vs Is view to succeed?  In either case reality proves you wrong…     

 
 
DEGENERATEON
 
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DEGENERATEON
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21 February 2020 22:42
 

I think there needs to be a balance of wealth redistribution.  Society makes it possible to become a multi-billionaire, the reaper of that reward owes something to society.  Kylie Jenner is a billionaire.  She didn’t invent something that has advanced society into a new era, she’s a famous attractive girl with influence.  Sports stars are great at athletics, CEO’s of giant companies have high intelligence or are extremely lucky or both.  The guy with an 87 IQ that works at Target got the short end of the deal.  It doesn’t have to be a complete redistribution, but the ultra-wealthy should pay a higher amount to float all boats.  I remember Warren Buffet saying he paid less % in taxes than his secretary- does that make sense?

 
Brick Bungalow
 
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Brick Bungalow
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21 February 2020 23:38
 

A few things: You say ‘welfare state’. Should I intuit that to mean that you refer specifically to law and policy rather than discussing the issue in terms of social norms or public opinion or community behavior? Because I think these are quite distinct conversations.

Bouncing off of that I want to say that the role of government isn’t a static thing. Some cultures are traditionally more oriented toward provision and protection of the weak and vulnerable. The U.S. does not, in my view have a strong and unified practice of caring for the elderly and the handicapped and the injured and the orphaned. My own desire for a so called welfare state is informed by this relative vacuum.

It’s also necessary to weigh all the various competing interests that adjoin this issue. I think its worth considering our national history and the apparent interests of our current federal government. What would broad access to higher education and preventative do to military recruitment, for instance? How would it affect overall rates of incarceration? I don’t mean to be overly cynical or conspiratorial but I think these are fair questions given the financing of politics in the U.S. I think the most elegant way of deducing the authentic motivation of public figures is to follow the money.

I don’t like the idea of a welfare state on principle. I think it’s a band aid. But the products it contains are products we need. I live in a nation with extraordinary wealth. I don’t accept that its too expensive or somehow unfair to provide desperate people with basic necessities. I’d rather this happen organically as a cultural standard but that doesn’t seem likely soon. I endorse it as state policy because that seems like the plausible solution at least in the short term.

I realize your OP contains a lot of questions I haven’t addressed… I need a little more time to think.

 
Twissel
 
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22 February 2020 00:02
 

There is an incredibly simple argument for wealth re-distribution:
the economy would stop working without it.

 
 
TheAnal_lyticPhilosopher
 
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22 February 2020 05:46
 

GAD

The redistribution of wealth is, I think, a melodramatic and inaccurate description of the social safety net entailed, if we want to see ourselves as promoting fairness as a principle moral good.  And I don’t understand what dichotomy you’ve forced the argument to that effect into, such that reality undermines it.

In any case, as the last paragraph makes clear, the point of the OP is to raise the issue of how we choose to order— within the limits that it can be ordered— opportunity for equitable flourishing and enjoyment.  Do we want to emphasize fairness, as even conservatives do, or do we want to admit our society is intrinsically unfair, and tough shit to those it’s unfair to?  In other words, do we really want to hang our hat on the idea that everyone has an equal opportunity not to be screwed, as opposed to flourish and enjoy?  I for one am not comfortable with musical chairs on such a level.  I’d rather we just provide another chair—somehow…

I’m glad you think it’s well written, but I’ll offer that it may appear long winded given your oversimplification of its basic point.

DEGENERATEON

I don’t like the term “wealth redistribution;” that may just be my thing; but in any case all taxation can be seen as a form of it, and I agree that beyond a certain point a disproportionate burden of the taxes for the social safety net should fall on the wealthy.  Just what that point is, I’m not sure, but for starters let’s say $1 billion because the idea that not being able to accrue more than a billion dollars without severe taxation dis-incentivizes anything is absurd—or better yet, what it dis-incentivizes is megalothymia, which is not a bad thing. 

Instead of wealth “redistribution,” what have in mind is more like “recirculation” than distribution, for the social safety net is less about taking from some to give to others than about providing services or creating policies that correct a (moral) failing in society and the economy as a whole.  If it were possible to create a program that doesn’t give any money to anyone in particular but at the same time insures a baseline of flourishing and enjoyment otherwise not obtainable given the normal functioning of the economy, that would be my preference.  In this respect I actually agree with the conservatives and libertarians that simply taking money from one person and giving it another is both morally problematic and largely ineffective (or worse, counter-productive). 

Brick Bungalow

Yes, the former—laws, policies, services, subsidies….concrete ways a minimum baseline of flourishing and enjoyment can be maintained for all.  One would hope social norms, public opinion, and community behavior would either initiate this or follow (or both), since here the government’s legitimacy stems from that.  But the argument specifically targets the former.

Weighing the impact versus unintended consequences is paramount for any policy decision, especially here.  In addition to the issue you point out, one intuitive way to insure a minimum standard of flourishing and enjoyment is UBI.  But how do you execute this without adversely impacting wages and the labor market, making things in effect worse, not better…that sort of thing.  Indeed we’ve seen how some welfare policies have had negative effects that create another problem in order to solve one.  The conservatives in my opinion exaggerate this, and they too often speak in moralizing platitudes (like “dis-incentive to work”), but they are not always wrong. 

I don’t like “the welfare state” either; I’d rather have a social-economic ordering where these problems either solve themselves or don’t arise.  But it seems to me easier to provide a band aid than to reengineer our whole economy and social order such that we don’t need one. Providing a band aid without making the ‘wound’ worse is hard enough as it is…

Twissel

I’d have to see that argument before I’d believe it.

____________

As a general note, I kept the term “welfare state” because of its political valence (usually negative), in that I think a non-politicized meaning of the term is important.  I think the function of the state is not simply protecting basic rights, maintaining law and order, and providing for the common defense.  I think it is as much insuring the welfare (i.e. the flourishing and enjoyment) of its citizens.  That this is impossible without some form of taxation and therefore ‘wealth redistribution’ is granted, but unlike “welfare state” I don’t think “wealth redistribution” has a useful, non-politicized meaning.  It may be simply a function of my background, but I have never seen the term but used as a strawman by libertarians who oppose what in a positive sense refers to the state insuring the welfare of its citizens, and this as a basic purpose of governance—i.e. insuring some baseline of flourishing and enjoyment.  In other words, I want to say providing welfare is a basic function, but redistributing wealth is not, and only in so far as any form of taxation requires taking in order to provide would I agree that providing for a common welfare is redistribution. 

To Brick Bungalow’s point about a “relative vacuum,” the implied self-sufficiency in the preamble to the Constitution was a profound advance in the understanding of governance in the 18th century.  In the 21st century I think it is high time we took the next advance and turn “promote” into “provide” when it comes to “the general Welfare.”  How to provide this minimal welfare without disrupting the blessings and prosperity of self-sufficiency seems to me the paramount issue we face today..

[ Edited: 22 February 2020 05:50 by TheAnal_lyticPhilosopher]
 
Twissel
 
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22 February 2020 06:29
 

In a money-based economic system, the flux of money, not the total amount matters. A market-based economy only works if there are many participants buying and selling.

In a capitalist economy, money over time ends up in the hands of few - it’s an unavoidable effect of the difference between rent-seeking income and paid labor.

As a result, the poorest in society end up with less and less wealth to spend, whilst the richest don’t spend their money at all, but instead re-invest it in even more rent-seeking assets, thereby accelerating the process: a millionaire is not spending a million times the money that a homeless person is.
This way, the Market is deprived of participants able or willing to spend money, causing Demand to collapse.

A market economy needs a balance between supply and demand, and it is always possible to loan money for investment, but not for consumption. Only the State is in a position to fix this imbalance.

 
 
TheAnal_lyticPhilosopher
 
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22 February 2020 07:13
 
Twissel - 22 February 2020 06:29 AM

In a money-based economic system, the flux of money, not the total amount matters. A market-based economy only works if there are many participants buying and selling.

In a capitalist economy, money over time ends up in the hands of few - it’s an unavoidable effect of the difference between rent-seeking income and paid labor.

As a result, the poorest in society end up with less and less wealth to spend, whilst the richest don’t spend their money at all, but instead re-invest it in even more rent-seeking assets, thereby accelerating the process: a millionaire is not spending a million times the money that a homeless person is.
This way, the Market is deprived of participants able or willing to spend money, causing Demand to collapse.

A market economy needs a balance between supply and demand, and it is always possible to loan money for investment, but not for consumption. Only the State is in a position to fix this imbalance.

Let’s assume for the sake of argument that your analysis of the problem is accurate (I don’t think it is).  What is the position of the State such that it can fix this imbalance between supply and demand, and how does it do this? 

For instance, it can’t be because “it is always possible to loan money for investment, not for consumption”—meaning only the state can pick up a shortfall in the consumption that drives demand—because:

1) money is loaned for consumption all the time (consumer loans are how people pay for cars and houses and so forth; credit cards are also a form of loans…), and

2) even money loaned for investment usually end ups in consumption in some form or another (directly through buying the things the business needs; indirectly if used as payroll, for that money is then used by the employee to consume). 

So, it’s unclear in your argument just what position the state is in, and what mechanism only it can use to correct an apparently inevitable imbalance between supply and demand.

This said, I’m not convinced your “incredibly simple argument for wealth re-distribution” captures the point in the OP, much less offers a short-cut to the same conclusion (and like I’ve said, “wealth redistribution” as you’re describing it is not its conclusion).
 

 

 
Twissel
 
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22 February 2020 07:16
 

No - invested money is not consumed unless the business goes under and no one wants to buy any of its assets. There is a fundamental difference between money spend on consumption and money spend on things that can be sold on.


Concerning how the State gets the money:
The state has to transfer the money - which is can do directly, or via taking out loans that are covered by the potentially taxable) wealth of its citizens - the preferred way in many current economies.


Historically, all money-based societies had this problem. Their solution was a regular debt-amnesty, which allowed the poor to rid themselves of their obligations at the cost of their creditors.
But it requires the power of a state to force creditors to forgive their debtors.

[ Edited: 22 February 2020 07:25 by Twissel]
 
 
TheAnal_lyticPhilosopher
 
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22 February 2020 07:53
 
Twissel - 22 February 2020 07:16 AM

No - invested money is not consumed unless the business goes under and no one wants to buy any of its assets. There is a fundamental difference between money spend on consumption and money spend on things that can be sold on.


Concerning how the State gets the money:
The state has to transfer the money - which is can do directly, or via taking out loans that are covered by the potentially taxable) wealth of its citizens - the preferred way in many current economies.


Historically, all money-based societies had this problem. Their solution was a regular debt-amnesty, which allowed the poor to rid themselves of their obligations at the cost of their creditors.
But it requires the power of a state to force creditors to forgive their debtors.

I don’t know what you are referring to with “invested money”; it’s clearly different than the commercial loans businesses usually get to invest in their businesses (including loans to corporations for expansion and such).  Also, I wasn’t asking about how the state gets its money, but rather for a description of the exclusive and unique position the State is in, vis-a-vis other actors in the economy.  In any case “transfer the money” is, as far as I can tell, too vague a mechanism to solve the problem the State is purportedly solving.  There has to be specific means of transfer, and I was asking after the nature of those means, specifically about how they differ from the means in which money already circulates in the economy.  In other words, what is the State doing that other economic actors can’t? Forcing creditors to forgive debtors can only be one aspect of it, and as I see it a very very limited one.

This side-conversation highlights exactly why I recoil at the idea of “wealth redistribution” as a description of the OP.  I’ve only ever seen wealth operationalized as money, and I am most emphatically not talking about transferring money to correct market failures in the balance of supply and demand.

And to be honest without, hopefully, being insulting, I’m not really interested the “wealth redistribution” debate.  For now I’d rather stick to the parameters of the OP and leave that debate to others.  This is as much an expression of a lack of interest as a lack of expertise.

(That said, I do appreciate the opportunity this side-conversation has provided for clarifying an important and apparently common misunderstanding—wealth redistribution versus a minimal baseline of common welfare.  This misunderstanding may be a fault of mine; I’m not sure…)

 

 
Twissel
 
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22 February 2020 08:01
 

I’m all ears on how anything but an entity with a monopoly of violence could make the rich share their wealth - I don’t see it.

And wealth accumulation in the hands of few is not a market failure - it’s an intrinsic market property. That is why no market economy functions in the absence of a State.

 

 
 
icehorse
 
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22 February 2020 08:08
 

Any society worth living in must have a large, secure consumer class. The U.S. had it in the 50s, and taxes on the wealthy were quite high.

 
 
GAD
 
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22 February 2020 09:17
 
Twissel - 22 February 2020 12:02 AM

There is an incredibly simple argument for wealth re-distribution:
the economy would stop working without it.

Um, no it wouldn’t.

 
 
icehorse
 
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22 February 2020 09:29
 
GAD - 22 February 2020 09:17 AM
Twissel - 22 February 2020 12:02 AM

There is an incredibly simple argument for wealth re-distribution:
the economy would stop working without it.

Um, no it wouldn’t.

GAD, how about just once, you try to think with a bit of nuance?

 
 
GAD
 
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22 February 2020 09:51
 
TheAnal_lyticPhilosopher - 22 February 2020 05:46 AM

GAD

The redistribution of wealth is, I think, a melodramatic and inaccurate description of the social safety net entailed, if we want to see ourselves as promoting fairness as a principle moral good.  And I don’t understand what dichotomy you’ve forced the argument to that effect into, such that reality undermines it.

In any case, as the last paragraph makes clear, the point of the OP is to raise the issue of how we choose to order— within the limits that it can be ordered— opportunity for equitable flourishing and enjoyment.  Do we want to emphasize fairness, as even conservatives do, or do we want to admit our society is intrinsically unfair, and tough shit to those it’s unfair to?  In other words, do we really want to hang our hat on the idea that everyone has an equal opportunity not to be screwed, as opposed to flourish and enjoy?  I for one am not comfortable with musical chairs on such a level.  I’d rather we just provide another chair—somehow…

I’m glad you think it’s well written, but I’ll offer that it may appear long winded given your oversimplification of its basic point.

That’s circular. What is fairness, the redistribution of wealth, what is moral, being fair. I can redefine that, what is fairness, the freedom to accumulate wealth, what is moral, being fair. That is just as valid as your definitions.

As for your economic model, if we force 10 people into good jobs at 100K and force 10 into bad jobs at 50K and then take 25K from the good and give to the bad so everyone gets 75K, that is straight up communism. People don’t argue for economies like this because they work (they always fail) or make any sense, they argue for them because of self-righteous moral indignation. 

 

 
 
GAD
 
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22 February 2020 09:54
 
icehorse - 22 February 2020 09:29 AM
GAD - 22 February 2020 09:17 AM
Twissel - 22 February 2020 12:02 AM

There is an incredibly simple argument for wealth re-distribution:
the economy would stop working without it.

Um, no it wouldn’t.

GAD, how about just once, you try to think with a bit of nuance?

You mean bullshit? You only need to look at the world and history to see that what Twissel stated is false unless he is using some very specific context.

 
 
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