Sure, we do! It's not as if no one's studied it. Here's a good explanation, fully sourced, from Chapter 3 of
Healing Our World by Mary Ruwart:
http://www.ruwart.com/Healing/chap3.html
Wow. I haven't seen anything more blatantly unscientific since I skimmed some 70's maoist literature. Self-important assertions, tedious anecdotes 'explaining' the Truth(tm), sprinkled with out-of-context quotes from supportive sources, which are only inserted for effect, never discussed. No attempt to even discuss possible alternative explanations for made observations - in fact the author does not even seem to realise the need to make the distinction between primary observations and theoretically deduced interpretations. I would suggest to the author that perhaps she should focus her efforts a little. The article is not helped either by the garbled graph (never discussed in the text) titled '[SIZE=-1]
Figure 3.1 Temporal Relationship Between Increases in Maximum Wage and Decreases in Black Youth Unemployment'. [/SIZE]Oops. I guess the proof-reading was as lax as the editing.
Of course there is! The USSR is hardly the only example.
This is quite typical: When your assertion that one example proves your point is questioned, you are suddenly uninterested to discuss it, and try to move on to another example (quite an obscure one, at that). So, what exactly is the evidence that the downfall of the USSR was caused by a lack of (or, to give you some slack, the deficiencies of) a method to determine profit and loss?
Earlier (or maybe it was in another thread) I mentioned Plymouth Plantation and how Bradford originally tried a kind of socialist system (centuries before Socialism would even be devised), and the result was poverty and stagnation.
The main problem with this example is that it is quite questionable to assign labels such as 'socialism' or 'laissez-faire-capitalism' to a society for which we have such extremely limited data. Usually, followers of very disparate political ideologies will read such single sources and interpret it to be just in line with their own particular preconceptions.
A famous example is the 'zero government'-supporters' portrayal of medieval Iceland as a model 'capitalist' society without any government. More down-to-earth people, including less on-the-fringe right wing libertarians, usually recognise this characterisation as being based on a very rudimentary and selective understanding of historical data.
All that's saying is, "one tyrant managed to do better than another."
Certainly so. But the fact is that neither the Czar regime or the USSR fell because of any economical collapse. While I in fact at least partially agree with some of von Mises theories pertaining to the inefficiencies of a Soviet-style communist economy, they do not explain, and much less predict the downfall of the USSR.
A prediction requires some precision in time and/or general description of an event that is supposed to take place. Now, von Mises theories regarding inneficiences in communist economy offered neither of these with respect to the USSR. While you can argue that von Mises theories were insightful and can help us explain the failures of the USSR, your characterisation of them as 'predictions' pretty much reveals you as a fundamentalist.
Then why was there hardly any food in the stores?
There was more food than during most of the time the USSR existed, when it evidently did
not cause the downfall of that empire.
Not true, either. Lots of people go to school while working at full-time jobs.
This is another clear sign of fundamentalism: the unwillingness to concede even the most obvious of points. You would do better to argue that this effect was offset by some contrary, greater effect. Claiming that unemployed people do not have more motivation and opportunity to seek high-productive jobs, or to educate themselves to qualify for such jobs, is absurd.
Then it's not saying anything of use. It's kind of like saying, "having cancer does not preclude living a long, happy life." There are many cases of cancer survivors living well for many, many years. But the cancer didn't help.
It would be like saying that, if we had a sizable group of patients diagnosed with cancer for a long time, and which still exhibited an average life expectancy as high or higher as any reference group we could find. We might actually be able to do this, for certain benign cancers. But even then, the comparison fails, because even benign cancers do not offer any advantages. Welfare states do clearly offer advantages for many people, even if you are perfectly free to argue that these advantages are offset by greater disadvantages.
Those are all ways that the Welfare State has had detrimental effects on the economy, something you claimed didn't exist.
You are mistaken. The welfare state certainly has some detrimental effects on the economy. I believe that overall, the positive effects outweigh the negative ones. And I believe that the study in the OP shows that at the very least, any negative total effects are not significant enough to prevent strong welfare states of being as successful economically as any other states existing in the real world.
We also have government regulations that prohibit the production, sale, and use of marijuana. Look around: you think it's stopped any?
Around where I live, it certainly has. I'd smoke a lot more pot personally if it was legal. Whether or not a ban is efficient clearly depends on the circumstances. Trying to ban something which has overwhelming acceptance in the general population is usually futile, at least if it is reasonably easy to conceal.
In Somalia, it's the would-be governors of the country that are doing that, not one business to another.
There is no difference between a 'business' and a would-be-governor in that type of state.
What regulation is needed with computer software?
That is an enormous subject. For starters, we need to outlaw the spreading of viruses, and the hiding of malicious software in other products.
How? There are many choices of operating systems, and the technologies have been improving drastically. Look at the current offerings vs. what was available 10 years ago.
While the improvements have been enormous in computer software generally, owing to the cutting-edge competition that prevails in most software sectors, the development has been nearly at a standstill when it comes to
operating systems. Many operating systems' vendors have tried to conceal this by bundling more and more software with their operating systems to make it seem like there is progress.
Really? I'm using FireFox and I'm not having any trouble with it. I can even open it on Linux.
That is because the singular company in question has decided to support your particular version of Firefox and your particular version of Linux. It has decided not to support the version of Firefox and the version of Linux that I am using at present, neither any of the other operating systems that I use.
This situation outlines one of the particular problems with regards to markets and computer software. A company which has developed a product with some new and desirable features will deservedly get a large user base. But the company can then use this position to prevent competition by making its software incompatible with any other solutions. I do not have any Gordian solution to this problem, but surely you must be able to realise that this is a destructive behaviour which reduces the efficiency of the computer software market?
Could it be that people in the free market might be motivated by something other than just money? Ever considered that?
I believe that people mainly start businesses in order to escape the tyranny of employers, even facing the prospect of significantly lower pay and harder work. However, for the sake of the general economy, improvements in working efficiency is the interesting factor. So in our hypothetical case, it is in the interest of society (eg, in the statistical interest of all of us) that people take the chance to start new companies when it enables them to be more efficient. And so we should aim to make this rewarding for the individual. A strong welfare state has such a rewarding effect.
Look at the War on Drugs and then come back and make that case.
You're suffering from cultural isolation, I'm afraid. The War on Drugs is,
unfortunately, highly popular in large sections of the population, mainly for reasons of moral conservatism.
How can you eat it without having it? That's never made any sense to me.
Err. Well, no shame in asking, because you if you do not understand this platitude of parables, it's definitely time to learn it. It goes like this:
If you have a cake, you have two choices. Either you eat it, or you save it for later. If you eat it, you will obviously not be able to save it. But if you save it, you cannot eat it.
The parable is invoked when someone is faced with a dilemma where two mutually exclusive choices are both desirable, and the person seems unwilling to concede that only one of the two good outcomes can be had.
In our case, you have two choices with respect to a welfare state: Either you become a part of society, accepted by other members of society and thus able to reap its advantages. Or you decide not to pay taxes for welfare, in which case the rest of society will punish you or exclude you. You can't have both.
Then slavery, Prohibition, the holocaust of the native Americans, the internment of Japanese-Americans into concentration camps, McCarthyism, etc. were also "equally valid."
I do not believe there were ever any laws making it mandatory to take part in any of these things. But let us for a moment assume that there was. Then, certainly it would have been your choice to refuse to take part in these crimes, and be punished, or to go along, and continue enjoying the protection of the law.
Tell that to the heroes in the Underground Railroad.
They were certainly well aware of this fact, and ready to take the consequences of their actions. Eventually, they were successful in removing the dilemma making active resistance to slavery and protection by the law incompatible.
You've been singing the chorus of "mass unemployment" like it's out of your hymnal.
There is mass unemployment. That is not new. While there has been periods without mass unemployment, such as America in the early days where there was plenty of unoccupied land to work or Sweden during a period after the adoption of the strong welfare state but before the adoption of Friedman's theory of a natural unemployment rate, there is at present mass unemployment nearly everywhere, and it has been the norm at least since the beginning of industrialisation.
Actually, that began with the Austrians, and I have already mentioned that.
Good, then we are in perfect agreement that the theory was advanced by followers of Austrian economics, which was my entire argument.
An Austrian would say that nothing should be done because the natural rate is, well, natural.
Consequently, followers of this theory argue that nothing should be done to reduce unemployment below this level. Unfortunately, the theories put forth by Friedman puts this rate at a level where a significant portion of the population is suffering from long-term unemployment. And because every government, whether socialist or laissez-faire, inevitably involves itself with some decisions that do affect the unemployment rate, the net effect is that governments adhering to this theory will effectively work to increase unemployment when it falls below this theoretically calculated rate. This is no conspiracy theory, you will find this reasoning clearly in the deliberations of various central banks, for example.
Uh. As late as 1910, only 72% of children even attended school,
according to Wikipedia.
No, it's the conclusion following your preconceived notions.
You have not offered any argument why people would still need more incentive to seek work, even when anyone looking to employ always finds willing candidates. By all means, you can disagree with my conclusion, but you're not even offering an argument.
No, why would you think I would?
You were lambasting the government for not acting as lender of last resort when the banks had overextended themselves during the 20's.
In 1907, it was J.P. Morgan who did that on his own, and he made money in the process. After that, there would have been any number of investors to step up and follow his example, no government or tax money necessary.
Then how was the government causing the depression by not acting as lender of last resort, if some JP Morgan could have done it instead?
As per your request I will briefly state that I think the depression was caused by the failure of the government to interfere when, during the 20's, the banks and the stock market engaged in irresponsible lending and speculation, to the point where the entire industry relied on fictional values motivated by impossible expectations of future economic returns. In essence it was the same mechanism as during the tulip mania or the dot com era. In fact, investors and speculators were generally aware that the collapse was inevitable, but the economy turned into a chicken-race where the person jumping ship at the last possible moment would be the ultimate winner. The problem is of course that this irresponsible gambling did not only hurt the ones willingly engaging in it, but actually jeopardised the entire economy.
The rate of growth of the economy is less than it was during the first half of the 20th Century, even with the enormous drag of the Great Depression. The best years of the '90s are comparable with the worst years before the Welfare State.
The highest percentage-wise growth is always found in very poor countries, frequently after the end of a great war or some exceptionally inept economic regime. Any improvement that offsets from a very low basic rate will result in impressive percentages.
Yes, DURING THE GREAT DEPRESSION. I said that.
So if I get you right, capitalism eventually got rid of starvation, except for certain periods of starvation? Doesn't sound very convincing to me.
In contrast, my argument is that the welfare state got rid of starvation, without a single exception, whereas capitalism, after being employed for centuries, still resulted in reoccuring periods of starvation.
