Tuesday, February 14, 2006

A drive-by arguement with....

Richard Waghorne of Sicilian Notes said
I don't have a problem with inequality, either of income or of opportunity, though I believe people are far better off in a free society rather than a planned society in any case.
Not so long ago Michael McDowell said that Inequality was good for the Economy. And people were like “how dare he”. “You can’t say that” “we are Irish we love each other equally” “we cherish each child of the state equally”. He is the minister for Justice Equality and Law reform he is suppose to lax lyrically about equality and yadda yadda yadda.

Few I think actually realised that he is right. Inequality is good for the economy in some ways. And everyone who is out there shocked at what McDowell said is glad of inequality.

I have argued before the case for a high minimum wage which I still stand by. But there is a limit to the height it will go can go before it will start price inflation. At a certain point the increased consumer spending will not compensate for a business costs so prices will rise. Thus as prices rise people will be getting less “value for money” then before and demand wage increases and thus creating loads of problems and job losses. (Edit Cause high inflation as well thus starting a vicious cycle)

The fact of the case is that to control inflation and give people the “value for money” they so crave we need inequality in the economy. Before anyone yells at me what about the Swedish model. Read this. Then you can yell away.

However in other ways inequality is not good for the economy. We are going to be a knowledge economy so we need to excel at it. That means every child should have equal access to education, health and an equal opportunity in life. It should not matter if a parent can pay to send their kids to a top school the free school needs to be as good. If it is not and rich kids get a better education then poor kids our economy will decline. We can not have a type of inbreed intellectual elite in this country coming from the same social strata(inbreed from a limited pool of people). Our economy needs the best of the best not the best of the rich. And with that then people will be better off.

So Richard. I disagree. neeeeeeeeeeumm
(if anyone doesn't get the family Guy Reference For Shame get thee to the DVD store)

13 comments:

Damien Mulley said...

Treat equals equally and unequals unequally.

EWI said...

We can not have a type of inbreed intellectual elite in this country coming from the same social strata(inbreed from a limited pool of people). Our economy needs the best of the best not the best of the rich. And with that then people will be better off.

That's exactly it. The Free Marketeers seem strangely determined to not follow their own logic, instead their arguments curiously tend always towards favouring a plutocracy.

(Which is where Free Market think-tanks find their funding in a curious coincidence)

Godwhacker said...

Hi saint,

you touch on some very important issues in this post. I want to add the following;

• we should all be treated as equals under the law, but we are not all equals, nor will any government ever be able to make that so. Each of us has our own strengths and weaknesses.

• to say that "inequality is good for the economy" states the argument for a free economy and a free society with a nasty bent. I would say "we all deserve an equal chance, but that will not end in equal results".

• if you really want a free economy and fair wages, then go to the root of the inequity of the economic system. The root of the problem is central banking. All over the world, central banks act to throttle economies in order to prevent upward pressure on wages. Setting a "minimum wage" is a nice idea, but it wouldn't be necessary in a truly free society where currency and credit were not manipulated in a manor so as to create a permanent under class. In my own country, every time unemployment drops below 5%, our central bank jacks up rates to slow down economic growth.

Let me go further. Inequality is not good for the economy and controls, either from a set minimum wage or the manipulation of currency and credit, only act to make it more unequal.

The only credible, equitable alternative is free markets, free people, and free minds.

Simon said...

, every time unemployment drops below 5%, our central bank jacks up rates to slow down economic growth.
Godwhacker one point of note about Ireland (unlike america)is our central bank does not control rates the European central bank does. With Germany and France in recession they are trying to bring them up with low interest rates. So Ireland economy is having little raining in from the central bank.
I have no idea wheather that is good or bad though

Simon said...

Another point godwhacker was it not the free market that caused the great depression and needed massive state intervention to bring the country out of the depression

Pastor of Muppets said...

Englishman: I say, Jeremy, isn't that Reginald B. Stifworth, the young upstart chap who's been touting the merits of a united European commonwealth?

Jeremy: Why yes, I daresay it is.
Englishman: Oh, let's get him.

[They drive up.]

Englishman: Oh Reginald... I disagree.

[drives off]

Fantastic!

Godwhacker said...

Hi saint,

please don't blame the great depression on free markets. There has never been a truly free market in all of human history. The closest we ever came to that was The U.S. after the abolition of slavery (1865) but before the establishment of our central bank (1913). It was the establishment of a central bank that made the great depression possible (at least here). It was during this period of less then 50 years that we grew from an insignificant string of colonies into an economic power house.

From what I know (I'm sure not as much as you), Ireland is experiencing an economic boom. That is of course a good thing. But I would not want to have the economy of my country so directly tied to the manipulations of Germany and France.

The bottom line is that a real free market requires a currency fixed to an objective standard (gold or some other commodity) and credit that is tied to supply and demand. Without those two things, you don't have a free market.

Anonymous said...

I take exception to the nonsense you've written about education. It’s so stereotypical it's laughable. I can only assume that your basing your opinions on Ross O’Carroll Kelly.

Firstly, not all kids in private education are 'rich kids'. While many are the kids of professionals, tradesmen pull in as much money these days, if not more! Or is 'rich kid' simply your euphemism for “child of well educated (suburban) parents”?

Secondly, these people have already paid for their child’s education once, through the tax system, so you shouldn't resent the fact that they then make sacrifices to pay a second time! Why should they not expect better than the rest?

Finally, it costs about €4k pa to send your child to a top private school, or in 'poor people' language a pint a day and 20 smokes, or the equivalent of one family car... You think that’s beyond the reach of the majority?

"We can not have a type of inbreed intellectual elite in this country coming from the same social strata"

Pure rubbish, tell me this, how many of our politicians went to private school?

Simon said...

I can only assume that your basing your opinions on Ross O’Carroll Kelly.

See thats the problem with persumtion. I never heard of Ross O’Carroll Kelly

Or is 'rich kid' simply your euphemism for “child of well educated (suburban) parents”?
By rich kid i mean not poor kid

Why should they not expect better than the rest?
Because it is bad for the economy

Finally, it costs about €4k pa to send your child to a top private school, or in 'poor people' language a pint a day and 20 smokes, or the equivalent of one family car... You think that’s beyond the reach of the majority?
Yes

how many of our politicians went to private school?
I have no idea. But i would say it is actually quiet small. Some have even not even finished school.

Simon said...

I can only assume that your basing your opinions on Ross O’Carroll Kelly.
Thanks to wikipedia i now no who ross is .Sorry i don't read the tribune.
For any of ye none tribune readers
Here is the story

Tuathal said...

Anonymous,

What parts of Saints opinions on education are 'nonsense'?

Saint says 'every child should have equal access to education...it should not matter if a parent can pay to send their kids to a top school the free school needs to be as good'.

Call me crazy but thats sounds fairly reasonable to me. Should the quality of my childs education vary considerably based on my ability to send him/her to a private school or not? Hardly.

As you've alluded to, we all contribute to the education system with our taxes. I've paid my taxes, so why should my kid suffer because the only school i can afford to send him to is rubbish?

copernicus said...

Anonymous, with respect, you talk rot. A great many Irish politicians have been to boarding or private schools (it will be noted of course that free secondary education only came in in the 1960s when many politicians were in their teens, especially the generation immediately preceeding the current Oireachtas). Get yourself a Nealons if you'd like a bit more evidence and start with the Cabinet and junior ministerial ranks.

The idea that parents who send their kids to private school are paying twice is also misguided because a) childless taxpayers also pay for the education system as do people whose children are no longer in the system. In fact, people who send their children to private schools (again almost every school in the country is private, ie owned by a religious order; so you actually mean fee-paying) is in receipt of a subsidy in the form of the salaries of those teachers in the school who are paid by the Department of Education. This is pretty outrageous and indefensible as well as a diverting of funds away from where they belong. I could go on, but I think you get the point. Back to the blackboard.

Paix said...

“EWI said...
We can not have a type of inbreed intellectual elite in this country coming from the same social strata(inbreed from a limited pool of people). Our economy needs the best of the best not the best of the rich. And with that then people will be better off.

That's exactly it. The Free Marketeers seem strangely determined to not follow their own logic, instead their arguments curiously tend always towards favouring a plutocracy.

(Which is where Free Market think-tanks find their funding in a curious coincidence)
2/14/2006 11:29:23 PM”


Ewi, methinks they receive bounteous corporate funding to hoodwink – in the main – developing nations to the way the system works and to stay in control within the developed. However these 'paragons' of the amorphous free market (which the developed most certainly did not follow in their history *) receive...shock 8o ..government funding and support.

In fact the 'anti-poverty' industry – when taken in the erm full meaning of that term – is a far larger element of public expenditure than any form of aid from within or without the developed nations. Rw is just another of it's rambling and petulant children...


[copy and paste for complete links]
http://www.monbiot.com/archives/2005/06/06/a-game-of-double-bluff-/
* A Game of Double Bluff *

“The British government has made its own contribution to the poor world’s misery, by tying its aid disbursements to the privatisation of essential public services. It has been paying the far right-wing lobby group the Adam Smith Institute up to £9m a year to oversee privatisation programmes in developing countries.(6) Last week, Tanzania pulled out of the deal our government had rigged up for the British company Biwater, to privatise the water supplies in Dar Es Salaam.”


*
See Kicking Away the Ladder: The “Real” History of Free Trade

from Ha-Joon Chang of the Faculty of Economics at Cambridge University.

http://www.fpif.org/papers/03trade/index.html
http://www.fpif.org/pdf/papers/SRtrade2003.pdf
http://www.sourcewatch.org/index.php?title=Free_trade
http://luvsite.org/econ.html

“We stand for the maintenance of private property. We shall protect free enterprise as the most expedient, or rather the sole possible economic order,” said Adolph Hitler, who put communists and trade unionists in the death camps ahead of Jews and Gypsies. Like many of our modern leaders, he was working on a "New World Order" which put corporate greed ahead of the public interest and indeed, human life itself. President Franklin D. Roosevelt called corporate rule "Fascism."