A long time back, I read an economic study of a proposal to convert unemployment insurance to a forced savings plan. Everyone would have their unemployment insurance taken from paychecks into a personal account with limits on withdrawals like those for government unemployment insurance. The account would come with an automatic loan from the bank whenever the balance falls below zero because of unemployment payments. If you get to retirement age, you can withdraw any positive balance like an IRA. If you die with a negative balance, the government pays it off. The article said it would increase labor supply, increase savings, greatly decrease government spending, and be funded at the same tax rate. From the perspective of the free-marketer, this would be an incremental move towards greater freedom and personal autonomy.
How does forced saving lead to greater freedom? Contra Marx, Hegel and Pragmastism, reality is consistent. Your hidden altruism will impoverish us as each successive govt control fails and begets more controls. The NYT recently reported the growing Republican acceptance of Leftist egalitarianism. Where are the Republicans for individual rights?
If you can’t see how moving from a pooled tax-and-spend approach to an individualized forced-savings approach is not incrementally greater freedom, there’s probably nothing I can say that will persuade you. Don’t let the perfect be the enemy of the less bad when you’re already at more bad.
If I’ve misread you and you just want an explanation, then here it is. Individualized forced savings is more free than than pooled tax-funded government spending because it (a) created individual property that individuals will care about, (b) teaches most participants that they can actually save to cover their own unemployment without the government’s help, and (c) more broadly teaches that a tax-and-spend program is not the only option when considering demands from the left that have the votes to pass something. Most fundamentally, most people would say that having your property subject to (still onerous) restrictions on its use is more free than the government having your property and deciding what to do with it.
Singapore uses the forced savings plus fallback insurance approach for retirement and health care. You can have a look at their Central Providence Fund for inspiration.
For context: the US spends nearly 20% of GDP on healthcare, if you add up both private and government spending. The UK spends about 10% by that metric. And Singapore spends only about 5%.
As you might have guessed, Singapore's health outcomes aren't any worse than those in the UK or US. If anything, they might be a bit better.
An incrementally freer policy is still a policy, still encourages people to think that govt should initiate force. That incrementalism, ie, unprincipled Pragmatism, has guided the long-range growth of govt since the late 19th century. And now virtually nobody discusses politics in terrms of principles. Our leading politicians are an extreme Pragmatist and a nobody. If you are right, its a very small freedom in a cultural context in which people dont think long range in principles. If there was a principled political movement for freedom,a small increase could encourage more freedom. In the present cultural context, it will go unnoticed except as one more govt policy. This recalls the debate about ending public schools w/vouchers as an interim policy. But will it encourage or discourage individual rights?
Your view of unemployment seems a Pragmatist chaos of claims w/no unity, no principle, no system, no consistency, no science. And where is the worst destructiveness of inflation, ie, the socialist (the Fed) bank's counterfeiting which shifts production from being guided by the market to political guidance, as Mises says? A capitalist economy, contra our mixed economy, would have much more business startups and innovation, both requiring constantly more employment. And lower consumer prices. From 1800-1900, the price of bread was stable. From 1900-2000, it doubled. In capitalism, there are always people between jobs. Its called freedom. How many potential jobs never actualize because the scientific fraud of antitrust is the absurd claim that bureaucrats know the proper amount of constantly changing competition in constantly changing markets.
Even worse, Pragmatism is short-range, in principle. Statist economics fails, begetting more statist economics because there are no principles, in principle.
How much wealthier would we be with the SS's trillion dollars since the 1930s invested in new production instead of spent on consumption? How much wealthier w/a free energy industry? Or a free medical and med insurance industry? Or a free financial industry? Capitalist economists apologize because they accept the altruism of the anti-capitalists. Its not about economics. They will continue to lose influence until selfishness is validly defined and recognized as moral. See Ayn Rands _Capitalism_.
You may like Yaron Brook's principled defense of rational individualism on YouTube. He is an ex-finance prof and ex-Ayn Rand Institute dir. He has an amazing knowledge of US econ history,including current issues.
For Carl Menger, money is something so tradable on a market, eg ,gold, that it gradually, without planning, becomes a method of trade. What is the market value of the paper or linen that LATER becomes "money" with "Federal Reserve Note" on it? Govt is not God with the power to change reality. However, you are surprisingly correct in identifying inflation as what central (socialist) banks do. For Mises, most people mistakenly think that price rises are inflation. They are the effect of inflation. Fed dir Greenspan said the Fedfunds the welfare state, thus its political support. The Fed must have a money monopoly or commodity money would replace it.
Gold And Freedom-Alan Greenspan, in Capitalism by Ayn Rand
From 2013, thus I missed it. Unexpected position from Caplan ;) - appreciated! Two nits to pick: 1. Galbraith once suggested the two kind of work-for-pay (work that makes you proud or the Mc-Jobs/assembly-line-jobs/silly gov-waste-of-timer-jobs you only do for the money) are so different, they should not both be called "work". Though even a bad job gives your days structure, true (as in: back home, on couch, switch on telly. Because too emptied for anything else).
2. Open borders, underemployed from Haiti should go for jobs in the states. Got it. But here you argue: "Yes, the unemployed could move to North Dakota; but in a market-clearing model of the labor market, workers wouldn’t have to flee their state to sell their skills." There are many nations with large regions where the market does not clear at anything near resembling the more dynamic places. Thus people move. As they should.
I don't think our host argues against the any worker who wants to move from Georgia to North Dakota. Be that from the real Georgia or the American state.
And that's independent from the argument that the Georgias would be better off with better policies. (I have no clue how well the American state of Florida is doing. I just picked it in my example for the name.)
Moving away from unemployment isn't the only reason to migrate. Thailand has very low unemployment, but a worker moving from there to, say, France can still expect higher wages. (It seems that Mexico also historical had lower unemployment than the US much of the time. Still the US is an attractive target of migration for many Mexicans.)
Estonia arguably has better policies than eg Germany. Singapore in 1990 also already had better policies than Germany in 1990. And lower unemployment.
But good policies don't increase prosperity over night. Estonia still has lower GDP per capita than Germany. As did Singapore back then. (Nowadays Singapore has surpassed Germany and perhaps even the US.)
So a worker might still want to migrate away from Estonia, despite excellent policies there. At least excellent current policies, the damage was done by the long Soviet occupation.
Au Eesti! (Surely more modern administration than Germany!)
Obviously, our host is fine with the unemployed/underemployed/worse-paid-employed to move where the pay is better. Anywhere. I am surprised he considers it an issue for others/state/... if some jobless won't move. Governments in Estonia, Singapore and Haiti should try to improve the economic situation - less clear why Washington or North-Dakota should worry if there are no jobs in, say the Tennessee-valley. (The huge TVA-investments did not create many long-term jobs there.) There were reasons for Detroit to grow, there are reasons for it to shrink today when it is the turn of other US-areas to prosper. Which reminds me of this review of Jane Jacobs work: https://www.astralcodexten.com/p/your-book-review-cities-and-the-wealth
The place that's receiving economic migrants also benefits. Open borders are not some kind of government handout or charity.
One can be in favour of both open borders and better economic policy. This is the 'gotcha' you seem to think you caught our host in.
And even with perfect economic policy in two places trade and migration between them still makes sense. Division of labour and benefits of specialisation, and just matching people to where they can be most productive and happy and all that.
Dude, you were doing great, but then went off the rails here:
Isn’t monetary policy is a far more effective and sustainable way to boost Aggregate Demand? Sure. Given the existence of a central bank, though, it’s hard to see why free-market economists should run away from this conclusion. How is Nominal GDP targeting any less free-market than constant growth in M2, or a frozen monetary base, or short-run interest-rate targeting?
Economics happens at the margins, not in the aggregate. And there's nothing free market about gov't running the money supply or interest rates.
Unemployment corrodes souls, no doubt. The solution is more capital accumulation, more healthy businesses, honest prices for money and everything else.
Asking for gov't solutions to a problem created by gov't is not free market and it's not compassionate.
We need smart people to think about what a good government jobs program would look like. It’s not a crazy idea, especially when you dwell on the social and psychological externalities such a program may have
"Smart people" have been deploying these programs for decades. Somehow, the poor get poorer and the bureaucrats get richer every time. Almost as if there's some sort of unavoidable incentives that direction. If you care about the unemployed, you have to ask why the engine of employment (business) is faltering. It's bc we don't have anything close to a free market for about 100 years.
Do you mean a program of jobs working for the government, or a governmental program of measures to encourage full employment? The latter would include many of the suggestions in the article, such as eliminating license requirements and minimum wages. The former would not. (Real question, not trying to make a point.)
A long time back, I read an economic study of a proposal to convert unemployment insurance to a forced savings plan. Everyone would have their unemployment insurance taken from paychecks into a personal account with limits on withdrawals like those for government unemployment insurance. The account would come with an automatic loan from the bank whenever the balance falls below zero because of unemployment payments. If you get to retirement age, you can withdraw any positive balance like an IRA. If you die with a negative balance, the government pays it off. The article said it would increase labor supply, increase savings, greatly decrease government spending, and be funded at the same tax rate. From the perspective of the free-marketer, this would be an incremental move towards greater freedom and personal autonomy.
I found a link to the original study, in this summary: https://www.nber.org/digest/may99/unemployment-insurance-savings-accounts
Oh, hey, other countries have this! Here’s an article from Cato: https://www.cato.org/regulation/spring-2021/better-form-unemployment-protection
How does forced saving lead to greater freedom? Contra Marx, Hegel and Pragmastism, reality is consistent. Your hidden altruism will impoverish us as each successive govt control fails and begets more controls. The NYT recently reported the growing Republican acceptance of Leftist egalitarianism. Where are the Republicans for individual rights?
If you can’t see how moving from a pooled tax-and-spend approach to an individualized forced-savings approach is not incrementally greater freedom, there’s probably nothing I can say that will persuade you. Don’t let the perfect be the enemy of the less bad when you’re already at more bad.
If I’ve misread you and you just want an explanation, then here it is. Individualized forced savings is more free than than pooled tax-funded government spending because it (a) created individual property that individuals will care about, (b) teaches most participants that they can actually save to cover their own unemployment without the government’s help, and (c) more broadly teaches that a tax-and-spend program is not the only option when considering demands from the left that have the votes to pass something. Most fundamentally, most people would say that having your property subject to (still onerous) restrictions on its use is more free than the government having your property and deciding what to do with it.
Singapore uses the forced savings plus fallback insurance approach for retirement and health care. You can have a look at their Central Providence Fund for inspiration.
For context: the US spends nearly 20% of GDP on healthcare, if you add up both private and government spending. The UK spends about 10% by that metric. And Singapore spends only about 5%.
As you might have guessed, Singapore's health outcomes aren't any worse than those in the UK or US. If anything, they might be a bit better.
An incrementally freer policy is still a policy, still encourages people to think that govt should initiate force. That incrementalism, ie, unprincipled Pragmatism, has guided the long-range growth of govt since the late 19th century. And now virtually nobody discusses politics in terrms of principles. Our leading politicians are an extreme Pragmatist and a nobody. If you are right, its a very small freedom in a cultural context in which people dont think long range in principles. If there was a principled political movement for freedom,a small increase could encourage more freedom. In the present cultural context, it will go unnoticed except as one more govt policy. This recalls the debate about ending public schools w/vouchers as an interim policy. But will it encourage or discourage individual rights?
Your view of unemployment seems a Pragmatist chaos of claims w/no unity, no principle, no system, no consistency, no science. And where is the worst destructiveness of inflation, ie, the socialist (the Fed) bank's counterfeiting which shifts production from being guided by the market to political guidance, as Mises says? A capitalist economy, contra our mixed economy, would have much more business startups and innovation, both requiring constantly more employment. And lower consumer prices. From 1800-1900, the price of bread was stable. From 1900-2000, it doubled. In capitalism, there are always people between jobs. Its called freedom. How many potential jobs never actualize because the scientific fraud of antitrust is the absurd claim that bureaucrats know the proper amount of constantly changing competition in constantly changing markets.
Even worse, Pragmatism is short-range, in principle. Statist economics fails, begetting more statist economics because there are no principles, in principle.
How much wealthier would we be with the SS's trillion dollars since the 1930s invested in new production instead of spent on consumption? How much wealthier w/a free energy industry? Or a free medical and med insurance industry? Or a free financial industry? Capitalist economists apologize because they accept the altruism of the anti-capitalists. Its not about economics. They will continue to lose influence until selfishness is validly defined and recognized as moral. See Ayn Rands _Capitalism_.
The Fed doesn't counterfeit.
If you want to blame them, blame then for having a government imposed monopoly on currency. And running a less than optimal monetary policy.
But calling their choice of inflation counterfeiting is just silly.
You may like Yaron Brook's principled defense of rational individualism on YouTube. He is an ex-finance prof and ex-Ayn Rand Institute dir. He has an amazing knowledge of US econ history,including current issues.
For Carl Menger, money is something so tradable on a market, eg ,gold, that it gradually, without planning, becomes a method of trade. What is the market value of the paper or linen that LATER becomes "money" with "Federal Reserve Note" on it? Govt is not God with the power to change reality. However, you are surprisingly correct in identifying inflation as what central (socialist) banks do. For Mises, most people mistakenly think that price rises are inflation. They are the effect of inflation. Fed dir Greenspan said the Fedfunds the welfare state, thus its political support. The Fed must have a money monopoly or commodity money would replace it.
Gold And Freedom-Alan Greenspan, in Capitalism by Ayn Rand
From 2013, thus I missed it. Unexpected position from Caplan ;) - appreciated! Two nits to pick: 1. Galbraith once suggested the two kind of work-for-pay (work that makes you proud or the Mc-Jobs/assembly-line-jobs/silly gov-waste-of-timer-jobs you only do for the money) are so different, they should not both be called "work". Though even a bad job gives your days structure, true (as in: back home, on couch, switch on telly. Because too emptied for anything else).
2. Open borders, underemployed from Haiti should go for jobs in the states. Got it. But here you argue: "Yes, the unemployed could move to North Dakota; but in a market-clearing model of the labor market, workers wouldn’t have to flee their state to sell their skills." There are many nations with large regions where the market does not clear at anything near resembling the more dynamic places. Thus people move. As they should.
I don't think our host argues against the any worker who wants to move from Georgia to North Dakota. Be that from the real Georgia or the American state.
And that's independent from the argument that the Georgias would be better off with better policies. (I have no clue how well the American state of Florida is doing. I just picked it in my example for the name.)
Moving away from unemployment isn't the only reason to migrate. Thailand has very low unemployment, but a worker moving from there to, say, France can still expect higher wages. (It seems that Mexico also historical had lower unemployment than the US much of the time. Still the US is an attractive target of migration for many Mexicans.)
Estonia arguably has better policies than eg Germany. Singapore in 1990 also already had better policies than Germany in 1990. And lower unemployment.
But good policies don't increase prosperity over night. Estonia still has lower GDP per capita than Germany. As did Singapore back then. (Nowadays Singapore has surpassed Germany and perhaps even the US.)
So a worker might still want to migrate away from Estonia, despite excellent policies there. At least excellent current policies, the damage was done by the long Soviet occupation.
Au Eesti! (Surely more modern administration than Germany!)
Obviously, our host is fine with the unemployed/underemployed/worse-paid-employed to move where the pay is better. Anywhere. I am surprised he considers it an issue for others/state/... if some jobless won't move. Governments in Estonia, Singapore and Haiti should try to improve the economic situation - less clear why Washington or North-Dakota should worry if there are no jobs in, say the Tennessee-valley. (The huge TVA-investments did not create many long-term jobs there.) There were reasons for Detroit to grow, there are reasons for it to shrink today when it is the turn of other US-areas to prosper. Which reminds me of this review of Jane Jacobs work: https://www.astralcodexten.com/p/your-book-review-cities-and-the-wealth
The place that's receiving economic migrants also benefits. Open borders are not some kind of government handout or charity.
One can be in favour of both open borders and better economic policy. This is the 'gotcha' you seem to think you caught our host in.
And even with perfect economic policy in two places trade and migration between them still makes sense. Division of labour and benefits of specialisation, and just matching people to where they can be most productive and happy and all that.
Thank you. This needs a signal-boost.
Dude, you were doing great, but then went off the rails here:
Isn’t monetary policy is a far more effective and sustainable way to boost Aggregate Demand? Sure. Given the existence of a central bank, though, it’s hard to see why free-market economists should run away from this conclusion. How is Nominal GDP targeting any less free-market than constant growth in M2, or a frozen monetary base, or short-run interest-rate targeting?
Economics happens at the margins, not in the aggregate. And there's nothing free market about gov't running the money supply or interest rates.
Unemployment corrodes souls, no doubt. The solution is more capital accumulation, more healthy businesses, honest prices for money and everything else.
Asking for gov't solutions to a problem created by gov't is not free market and it's not compassionate.
We need smart people to think about what a good government jobs program would look like. It’s not a crazy idea, especially when you dwell on the social and psychological externalities such a program may have
"Smart people" have been deploying these programs for decades. Somehow, the poor get poorer and the bureaucrats get richer every time. Almost as if there's some sort of unavoidable incentives that direction. If you care about the unemployed, you have to ask why the engine of employment (business) is faltering. It's bc we don't have anything close to a free market for about 100 years.
Do you mean a program of jobs working for the government, or a governmental program of measures to encourage full employment? The latter would include many of the suggestions in the article, such as eliminating license requirements and minimum wages. The former would not. (Real question, not trying to make a point.)