* Libertarianism, income disparity, and political stability.
Topics: Welfare
21 Jul 1993
From:
> [ China, India, & most of South America are unstable because of wide
> disparity of income. Ervan's program would create that situation here.
> The welfare safety net prevents that. ]
This was in reply to my program of eliminating the 'safety net'. For
some reason, my previous reply has been bothering my and I want to
add some thoughts.
Previously I said that political instability is an externality of a sort
which could in theory justify extortion (i.e. welfare).
I want to add that I find this extremely unlikely in the scenario that
I am proposing. The U.S. went for 150 years without political instability
caused by income disparity (the civil war was not about income disparity).
Chau-Wen might set me straight on this, but it seems that Taiwan is
stable in this regard as well. Such political instability as it has
is due to an exclusionary political process and not disparity of income.
Singapore, even though an odious dictatorship, is stable by standards
in the region because it is capitalist and gives most people a sufficiently
high standard of living that revolution is not brewing. For an even
more extreme, but remote, example: medieval Iceland was a true capitalist
anarchy. It was stable for several hundred years (until invaded by the
Norse).
Actual disparity in the U.S. is fairly low too. The top quintile
consumes only twice what the bottom quintile does (note that
'consumes' is different than 'earns'). That strikes me as being so
good there is not even a problem left to solve. Of course, that may
be caused by the welfare state (though I think not). By way of
comparison the ratio in 1961 was about 1.6. The welfare state has, if
anything, exacerbated the problem (which I don't find in the least
surprising since the nature of government is for the powerful to use
its coercive ability to steal from the weak, witness FICA being
actuarilly a transfer from the poor to the middle class).
As for the previous examples, it's very ironic that Chau-Wen chose
three socialist examples all of whom use the power of the state to
oppress their peoples to different degrees. My conclusion is that
the dreadful economic situation created by socialism creates
political instability. Of course, it's a matter of degrees.
All of us (except maybe Reinhard) agree that rampant socialism is
a bad idea. For me, a little socialism is merely less harmful while
some of you think a little of a bad thing can be good, oh well.
Conclusion: capitalism creates not only wealth but stability.
Socialism destroys both.
----Ervan
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