Arnold Kling  

From Galbraith to Spitzer

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In an essay on the past and present positions of those who advocate big government, I write,


The view that only large industrial enterprises matter seems preposterous now. If Galbraith had been right, then the industrial structure of the 1960's would still exist today. Instead of what Alvin Toffler in 1980 called the "third wave," a Galbraithian economy would still be dominated by automobile and steel manufacturing. Galbraith would never have predicted Wal-Mart, Federal Express, Apple, Microsoft, eBay or Amazon, much less the tens of thousands of less spectacular entrepreneurial enterprises that have had a large cumulative impact on our economy.

On the crusader tradition of Ralph Nader and Elliot Spitzer, I write

If business and war had to be conducted perfectly to be conducted at all, then we would have not have any private enterprise in our economy and we would not have won a single war in our history.

For Discussion. How can one distinguish between constructive calls for reform from purely antagonistic attacks that undermine our economy?


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COMMENTS (8 to date)
Vish Subramanian writes:

A lot of attacking strawmen going on in your piece. But I had 2 points:

i) The internet is NOT some sort of "spontaneous order". Thats ridiculous. There are a LOT of centralized resources - gateway routers, name servers.

ii) The internet was NOT a product of the market economy. It was directly a result of taxpayer dollars.

iii) A vast amount of progress is because of government provided services like education, sanitation and roads. It sludicrous to claim that this is not a form of re-distribution.

Tim Shell writes:

"ii) The internet was NOT a product of the market economy. It was directly a result of taxpayer dollars."

To the extent it was not a product of the market economy, the internet was an expensive, exclusive academic tool, mainly used for email, which you could receive at 2400 bps, if your university's computer lab was well-financed.

To the extent that the internet is more than this, it is the product of the market economy. Which is to say, 99% of what we think of by the word 'internet' is the product of the market economy.

Vish Subramanian writes:

Market forces have helped the internet expand mightily as you say - especially in building the fibre-optic networks that actually carry the data, but the point it overestimated.

The central software stacks running the internet are mostly open-source. But much more important, if not for that 1% foundation laid by the academic internet, the Internet that we have today would not exist. It would be some weird conglomeration of fiefdoms like AOL and MSN. Think of the game playing networks like Microsoft or Sony are trying to build today.

Bernard Yomtov writes:

Arnold,

I find much to criticize in your essay. Let me just address one issue which I think is of greta importance - the Abu Ghraib scandal.

You write,

For example, it is difficult to see anything constructive in the way that the Left is approaching the Iraqi prisoner abuse scandal. It would be one thing if there were an ongoing controversy over whether the treatment of prisoners at Abu Ghraib was appropriate, in which case Congressional hearings and extensive public debate would be warranted. However, given that there is consensus that the treatment served no useful purpose and reflected sick behavior by the guards, it strikes me that the controversy is being used more to undermine our reconstruction effort than to improve it.

In fact there is an "ongoing controversy." There are lots of people on the righ5t who are offering defenses of one sort or another. This includes those like you who are all too ready to believe, in the face of the evidence, that the mistreatment did simply involved a few rogue guards. In fact, it was approved at the highest levels. We can, as a nation, shrug our collective shoulders, as you do here, and say "well, too bad - shouldn't have happened, but big deal," or we can decide that it is appropriate to hold our leadership accountable for behavior that disgraces our country. You remember accountability, don't you? Conservatives claim to hold it dear, but seem to demand it only of welfare recipients, never of corporate executives or Republican politicians.

What is constructive about the way "the Left" is approaching the scandal? The left is suggesting that those who are truly revolted by these incidents ought to act on their convictions, and the clear evidence of Administration involvement, and throw the torturers out. If you can't bear to do that then say so, but then admit your hypocricy, and stop pretending to be outraged.

Lawrance George Lux writes:

One has to ask what undermines the economy? Academians, today, claim We have finally figured out the way the Economy works, so why is not working? Any Individual or Business spending in excess of its revenues like the Federal Government, would soon lose control of its own destiny. How can the Economy be finally working, when the cost of the current acquired debt insists on a doubling of taxes down the road, unless there is massive Inflation to cancel the impact of the tax burden. There has been much speculation, but it seems to me there must be an Inflation rate of 88% over the next decade, to discount the current acquired debt without increasing the current tax burden (this means an annual Inflation rate of over 8%).

The Current Account Trade balance is once again worsening, while the Administration is functionally pumping false data on increases in Wholesale orders. Consumer debt is rising again, but seeming uninteresting--in the face of falling Consumer income and expected increased tax burden.

This comment obviously would fall within your criterea of injury to the Economy, but who can say who is the Pied Piper. lgl

DSpears writes:

The last president to pay off the National debt was Andrew Jackson in the 1830's. Somehow we managed to survive with a national debt since then. Our whole fractional reserve banking system is predicated on the National Debt. Without it the Federal Reserve would cease to function. Now I'd be perfectly happy to transistion to something more free-market, like we had from 1833-1860, but the upheaval required to get there from here would probably be too nasty to make it worth it.

The 3rd option of course is to continue to allow the economy to grow at a faster rate than the national debt, while simultaneously not adding to it every year. Reducing spending and regulation is the only thing the government can do to make that happen.

Lawrance George Lux writes:

DSpears,
I must agree with you to some degree, but this only within a context of residual doubt as to the efficiency of the Federal Reserse system manipulation of the National Debt, and the overall efficiacy of Monetarist policy--which I find of doubtful value. lgl

"One approach for the Right is to engage in tit for tat. That is, we could try to make a mountain out of very molehill of misbehavior by an individual or institution on the Left. There are many instances of this, from Joseph McCarthy to the Clinton impeachment."


By what yarstick was Clinton on the Left? The government grew far less under Clinton than almost any other Republican President for the last 50 yrs (except for perhaps Reagan). Bush has grown government far more -- gotta love that!

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