Two Moralities

[arbat]

Paul Krugman decided that he had acquired just the reputation one needs to write a post on moralities. Here is a quote:One side of American politics considers the modern welfare state - a private-enterprise economy, but one in which society’s winners are taxed to pay for a social safety net - morally superior to the capitalism red in tooth and claw

Comments

[arbat]

Sure. Under your definition, "safety net" is a fraudulent promise from the government based on the standard Ponzi scheme, that is currently going bankrupt in most countries, - depending on how steep is the curve. Fraud is twofold: first, it is as I mentioned, a Ponzi scheme. Second, the promise is given in the name of yet unborn "next generations" that have no legal obligation to stick to it. So, they will abandon it. With private Ponzies there is a chance that the government will help recover at least something. With your "safety net" there is nobody to help with the recovery, - since it will be the government that is going to say "oooops, no more money".

"Sporadically available", as you mentioned, does not actually mean that it its availability changes from time to time. For some reason, as you admitted, you use it just a term of slander when you talk about "non-government charities". These are voluntary, usually are honest enterprises, historically, those are mainly very stable, - like Salvation Army.

I see many differences.

Now, can we get to my question? And please, do not pretend I am not sticking to the subject, - my question was to clarify what exactly are the features of the "safety net" you are selling.

If it turns out that Bismark's social security was NOT continuously run till today, - then your claim of "endured for 130 years" would be false advertisement.

And the trust for the system that you based on that claim, - would be unsubstantiated.

So... did it "endure"?

[larvatus]

The promise of social security is vested in a political process that enables each citizen to elect representatives authorized to vote on the tax policies and the ensuing entitlements. No such opportunity is available to contributors to private charities meant to benefit arbitrarily designated individuals and classes. If Charles Ponzi had the authority to levy taxes and print money, your slander of U.S. Social Security might have made some sense. Since he didn’t, it doesn’t. As for its enduring nature, I shall have no complaints as long as my widowed mother continues to collect her death benefits.

[arbat]

"The promise of social security is vested in a political process that enables each citizen"

Or, in plain English, - if the next generation votes to close the shop, - they close the shop.

Now, can you explain to me, - if the next generations sees that they are about to inherit a scheme that is waaaaay in debt, nearly bankrupt and impossible to save... why exactly would they want to participate?

Because of the "promise" that next generation will be even greater fools?

This is exactly how all financial bubbles work, - and they have only one end. At some point, some "next generation" say... "thanks, but we are not going to participate". Music stops, - and those who were stupid enough to buy in the latest, - are left without chairs.

"No such opportunity is available to contributors to private charities"

He-he-he. Yep. This is why private charities sometimes exists for centuries on end.

"If Charles Ponzi had the authority to levy taxes and print money"

Ability to FORCE participation in the Ponzi scheme only prolongs the agony, - but it can't make it solvent. It is as impossible as perpetuum mobile. In order to work, it needs an infinite supply of "greater fools". And, sorry, but ours is finite. Even if we are all ordered and forced to play "greater fools".

"As for its enduring nature, I shall have no complaints as long as..."

Yeah, I know. As long as Mr. Ponzi makes payments.

By the way, what happened to Bismark's program? You used him in order to illustrate enduring nature of state charities. You claimed, on the basis of it, - 130 years of endurance.

I think, you should tell me of its fate.

I can't wait to learn about its 130 year long history of continuous, guaranteed payments.

P.S. By the way, if you do want to know about some charity that runs continuously for 130 years, the name is "American Red Cross". Международная ассоциация Красного Креста работает почти 150 лет. Армии Спасения больше 140. Старейшей благотворительной организации США более 350 лет. Но это далеко не единственные организации. Всегда существовало огромное количество самых разнообразных благотворителей, - которые кормили, одевали, строили университеты, школы, больницы, библиотеки, и все прочее.

[larvatus]

Start with the observation that people buy insurance in droves despite understanding that insuring themselves would cost them way less. One notable feature of social security is its historical persistence and expansion giving the lie to libertarian mouthpieces ranging from randroid halfwits to nozickian eggheads. When push comes to shove, not even the most stalwart proponents of the minimal state are willing to give the boot to their nanas. “I don’t respect the law; I have total irreverence for anything concerned with society except that which makes the roads safer, the beer stronger, the food cheaper, and old men and women warmer in the winter, and happier in the summer.” © 1960 Brendan Behan

On the history of Bismarck’s legacy, see Gaston Rimlinger’s article referenced above.

[arbat]

"Start with the observation that people buy insurance in droves despite understanding that insuring themselves would cost them way less."

"Insuring themselves" - this is nonsense. Insurance, by definition, requires more than 1 participant. Much more.

"One notable feature of social security is its historical persistence and expansion"

Well, indubitably, you were saying the same about investing in dotcoms in 1999, and about investing in real estate in 2006, and about... (well, get yourself a book on bubbles and continue).

Now, let's get back to Bismark and his social security. Whatever happened to that notable enterprise? Your claim about 130 years of endurance was based on it. I imagine, it is still persistently expanding?

Tell me. Do not refer me to some other articles, - just confirm that, yes, Bismark's security is still up and running.

[larvatus]

"Insuring themselves" - this is nonsense. Insurance, by definition, requires more than 1 participant. Much more.

Please look here.

Tell me. Do not refer me to some other articles, - just confirm that, yes, Bismark's security is still up and running.

Please consult this exchange, and a German illustration therefor.

[arbat]

Well, the first link, - sorry, buddy, you just did not understand what it is about. This is not "people insuring themselves". This is "companies who decide to run their own insurance plans for their employees".

Now, in view of this, your statement, - "people buy insurance in droves despite understanding that insuring themselves..." - is sort of meaningless. Some companies decide that it is cheaper to run their own insurance. Some decide it is better to buy ready product. Just like with anything else. Your company needs cars? It can build them, or it can buy them. You company needs cafeteria? It can get its own, or it can contract some catering company. You company needs payroll, legal, tax services, - some companies have their own departments, some buy services from specialized firms.

Hope, this helps.

Now, about Bismark. As far as I understood your commentary, - I can not confirm that social security scheme that Bismark created, has been running continuously since. Well, duh!

Of course, this means that your claim about "130 years of endurance" was entirely fraudulent. No government run "safety net" existed that long. What did exist, - was a Utopian DREAM of such a system.

Frankly, it would have been more honest of you to just openly admit that.

Good luck.

[larvatus]

You persist in misunderstanding the concept of self-insurance, which nowise depends on group participation. You also fail to distinguish civil dialogue from judicial cross-examination. I am not a witness required to submit to your high-handed demands. I have provided an answer to your historical inquiry by citing a scholarly publication. No rule of “honesty” requires me to digest it for your consumption.

[arbat]

You did not answer my question. My question was quite simple. Can you confirm that Bismarck's Social Security has been running continuously for 130 years.

Civil dialogue, - the way I understand the term, means that you either (a) say "yes, it has been", - and produce testimony to that matter. Or you (b) admit that you made a mistake and claimed an evidence of "130 endurance" where there was none.

"No rule of “honesty” requires me to digest it for your consumption."

Oh, yes, there is. If you ask me to spend time reading an article, - honesty does require that you confirm first that this article does contain the validation of your statement.

If it does not, - it means that you just want me to waste my time reading a totally irrelevant piece of text. And that would mean - you are trolling.

[larvatus]

The article referenced above documents the growth and expansion of German state care for citizens disabled from work by age and invalidity, since its inception in 1881 and institution in 1889, stressing its “transparent relationship between benefits and contribution” and commending it for “enabl[ing] pensioners to share in the growth of the economy”, even as it acknowledges “an all-out struggle to save the social insurance system from total collapse during the 1923 run-away inflation” and recalls that “it was the financing of unemployment insurance which in 1930 triggered the collapse of the great right-left political coalition that had governed the Weimar State”.

[arbat]

In other words, this article does NOT confirm that Bismarck's scheme has been running continuously for 130 years.

Do you want to make another attempt to substantiate your claim about "130 years of endurance", or are you ready to admit that you... well... let's call it "spoken inartfully"?

[larvatus]

Very well. I apologize for having failed to clarify that my characterization of social security “as conceived and executed by Otto von Bismarck” was meant not to refer to the special and uncharacteristic case of Germany, but to credit the origins of the modern welfare state to its arch-conservative founding father. I continue to maintain that Bismarck’s innovation put a permanent end to laissez-faire capitalism as a viable political option for developed societies.

[arbat]

No, excuse me, this is not what I was talking about. I have no issue with you proclaiming Bismark the father of modern welfare state, or the origin of the arch-liberal world order, or grandmother of Russian NAVY, or [choose any other term of endearment you wish here]. Can't care less.

You made specific claim - that you consider government-run charities to be a "safety net" (as opposed to "sporadical" private ones) based on 130 years of endurance. And you mentioned Bismarck scheme - as a supporting evidence to THAT claim.

I want you to admit that (A) Bismark can not be used as supporting evidence, since his scheme did not last and (B) that you have no facts to prove the endurance of government "safety nets".

[larvatus]

Actually, based on evidence at hand, I am making the claim that Bismarck’s legacy of social security did last both in his homeland and outside of its boundaries, and continues to do so, notwithstanding its involvement in two crises of legitimacy of the German state. As a matter of fact, it has continually endured and expanded for three quarters of a century to date in these United States.

I note your ongoing failure to “ refuse to sign up for this social security business”, despite your own prognostication of its imminent demise. The system must be doing something to ensure its survival, even by your own lights.

[arbat]

All your evidence shows that people have been continuously DREAMING about creating a reliable safety net. Dreaming about something does not bring it into existence. You may claim that A DREAM of a government-run safety net endured for 130 years.

You, however, started with something very different. You claimed that government-run social security is a "safety net", and you based this qualification on its endurance.

Not on endurance of a DREAM, but on endurance of an actual institution.

Now. We both know that no social security institution lasted for long (not compared to the major private charities, anyway). Definitely not one of them endured for 130 years, - and it was dishonest of you to claim so.

So... what's your best example? Care to name actual institution that has a good track record and does not look like it is ready to go belly up?

[larvatus]

There is nothing dreamlike about the examples of German and American social security systems cited above. Please contact your ophthalmologist with all concerns about this or that looking like it is ready to go belly up.

Propounding “that no social security institution lasted for long (not compared to the major private charities, anyway)” as evidence of their instability or impermanence. bespeaks knowing fuck-all about the history of social security institutions emerging from a long tradition of private charities in the first instance. You might as well disparage number 1 for its moral failure to measure up to number 2.