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| Re: huh. by Lizard_King 09/10/2003, 2:06pm PDT | ||||
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I wrote an extended response but my shit rental computer fucked me prior to posting. So here goes again...
Zebco Fuckface wrote: Right, that's why you'll never catch me advocating more government intervention on "behalf" of business (mind you, there are always exceptions, such as when a strong case can be made for national security or something of that sort...we don't want to rely on the Japanese for our weapons tech, no matter how much cheaper it is). That is exactly where I was going with my criticism of France; it is largely because of the sort of thinking you and Krugman describe above that I believe Europe is fundamentally "uncompetitive" in material ways, and France is as good a place to start as any. It can be seen in more isolated instances in America, of course, but such examples are the exception rather than the rule. I think it is destructive in virtually any form, but particularly when it becomes an ingrained cultural given that government force will make up for an industry's shortcomings. That chart you linked has lower numbers because it's for the entire EU, which includes some real laggards in income - Spain and Greece, for example, which have always been wierd countries. German GDP per capita, median wages, and productivity is actually higher than that of France. A productivity growth gap did open up in the last few years of the 1990s and is still ongoing - this wasn't visible in the one I linked, it stopped too early, but that's because Europe hasn't really gotten their IT revolution going yet. You *can* link that to business regulations and risk or whatever, but its an extreme case of blackboard economics, and its not like a lag in cross-country technology adoption is anything new. They'll get over it. It's not like the US suddenly became wildly more business friendly in the time period while Europe didn't, either, so looking at it in terms of government is wierd. I guess the difference is that where you see the slower adoption of IT as an freak incident, I see it as symptomatic of the general business framework/culture that France and Europe have created. It is an inevitable consequence of a system that encourages stability, stasis, and egalitarianism above all other things. I think up until now Europe has done relatively well, but it is something that will become progressively harder to sustain as the US and other more liberal countries speed ahead and the rest of the world catches up. They can only put up so many trade barriers. It *is* possible to increase total output by putting a cap on hours worked; 2 guys working 40 hours will get a hell of a lot more done than 1 guy working 80 hours, due to decreasing marginal productivity. It's rather stupid to drop the cap as a solution to unemployment, but that was only one of their stated reasons. I can't find comparative overtime numbers, unfortunately, it'd be interesting to see the percentage of French workers regularly working overtime compared to the rest of the first world. I couldn't find comparative numbers either, but the data for France alone does present some pretty compelling figures. At the very least, it is clear that a one-size-fits-all approach to work hours is creating some significant artificial costs; moreover, it is also clear that a graduated scale adapted to each sort of work will never catch on due to the very egalitarian spirit that drove it in the first place. As you say, it is stupid to drop it as a response to unemployment; the French may tack on other corollary reasons, but there is no doubt that is precisely what drove that reform. I can buy the productivity argument for a country like Germany (where I still think unemployment is the primary motive) but there is no way you can sell me on some French crusade for efficiency. I see the "government spending is a waste thing" a lot lately, but I think it's a wierd combination of policy distaste and applying personal accounting principles to GDP. The only economic loss caused by government spending is deadweight losses from taxation and incentive distortion; When you give money to a welfare recepient, or run a government healthcare system, the money doesn't burst into flames. A one trillion dollar health care system is worth just that, regardless of who's doing the billing. You may not like it, any more than I like the current mess of US healthcare, but its not made up. Yes, it's true that the only (immediately measurable) economic losses in this are deadweight and incentive distortion, but I don't think either of those are trivial. The former has a bad habit of having more and more of a negative impact on growth as time progresses, as the relatively successful Swedes can attest (was just paging through my old copy of O'Rourke's "Eat The Rich" on the crapper, that's why they're on my mind). The latter, however, is even more important. The situation in France, where lower paying jobs (whichever haven't been completely wrecked by the already disproportional minimum wage) are forced to actively compete with welfare. Then there is the cultural factor, which I think is an important one despite the Randian tangents in which any discussion of it usually results. The French have a steadily worsening situation, where popular sentiment continually demands the conversion of more entitlements, privileges, and things that are earned as rights. That is what concerns me the most. Oh, and a quick bit on healthcare: it's entirely possible that a single-payer system is actually *more* efficient than the one we've got. Insurance companies blow an absurd amount of money putting up hurdles to disincentize people actually getting the healthcare they pay premiums for, they cherry pick only the good risks, leaving the bad for the government, etc., etc. My personal opinion is that not being afraid that you'll drop dead/reduced to penury if you get sick - the current situation of the poor; if you get cancer and don't have insurance, you're fuckign toast unless you can trick the government into believing you own absolutely nothing - would probably actually increase economic output; there's all sorts of wierd assumptions made by blackboard economics in cases like this that I strongly doubt hold in the real world. It's very likely that virtually any situation could be better than the present one. I realize that my sense of economic morality won't mean shit on the political playing field, and thus I would much rather the revolution come rationally than emotionally. So, yeah, I'm willing to consider arguments such as yours in this field, but I'll be much more persuaded when concrete numbers come up and the necessary taxation level is something less than the ridiculous rates common in Europe. Either way, I think a good place to start is with the cozy cartel thing insurance has going, and the blatantly monopolistic behaviour it enables towards the consumer. |
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