Europeans believe deeply in what they call the "social system." German Chancellor Angela Merkel has been convinced to keep the Euro alive despite the failed Mediterranean economies. This essentially socializing Europe where the rich countries support the poor ones. America is moving toward a socialist health care system, though the rollout has been a disgusting mess. The U.S. government must continue raising taxes to pay for programs promised by politicians if they choose not to default on the nation's debt.
I have a thought experiment: Let's kill off everyone over age 30.
What would politics look like? Would money be taken out of the election system? Largely, no one under 30 has any significant money anyway. Currently, politicians end up writing legislation and invest in the companies that will benefit when they pass their "brilliant ideas" into law. They get sweetheart deals and inside information regarding real estate, private investments, and hold their money offshore and attempt to shelter investment income from taxation. I am also under the impression that they get tax benefits for their extremely high salaries.
Let's pay politicians nothing!
We have to get money out of the equation. I think money is THE problem with decision making for both individuals and for governments.
Sustainability is the issue with the future of the world in many realms including employment, education, and the environment. If the government hires a large percentage of the populace, but doesn't produce any valuable goods or services, then the economy will suffer (sorry Spain). If factories run at full steam without concern for its waste products, then the air and water become hopelessly polluted leading to massive health issues of the citizenry (sorry China). If education sucks, then countries lose ground relative to other nations (sorry America).
My suggestion is that people under age 30 have a massively different view of the world than those in power in the U.S. I have definitely spent too much time lately with liberal, anti-corporate under 30s, but my understanding is that these people care about their young families, about the environment, and about their health. They don't want to work so many hours that they can't spend time with their partners and children.
They are independently-minded and want to do things their own way. The system of working for a large corporation or in the same field for long periods is not what they want. Baby boomers were forced into this lifestyle by their parents who lived during the depression. Under 30s are fighting back and want to buy from small, locally-owned businesses, where they can interact with a real person.
The under 30s are a human generation. They want to connect (through their smartphones) with real people. They want to learn from each other (on social networks). They believe that the future is clean and that what they put in their bodies actually grew from the ground. They believe that their children will learn values in school that will make them honest and moral citizens who will want to work together for common goals.
Under 30s are an idealistic bunch, and are so far off from the current system, they might as well start their own. Click *HERE* to crowdfund the project to leave society and start a new civilization.
The difference between your thought experiment and reality is that in your thought experiment the over 30s die, and the under 30 take over while they're still under 30, and in reality, the over 30s die gradually, and the under 30s take over the existing society gradually, instead of creating a new one. There are several implications of this difference: first, there will be a great moderating influence on the under 30s, because many of them will work with the over 30s in the meantime, and will take over responsibility for the existing businesses and governments, and will become invested in the survival of those institutions. Second, they will encounter certain unpleasant reality principles that they may not have been aware of as idealists; specifically, that the social system has huge costs that undermine the economic system, as people who prefer not to work hard if they don't have to, don't work hard when they don't have to. As a result, the future won't turn out to be terribly different from the present.
ReplyDeleteI disagree with your first point that the under 30s will retain the existing structures of government and business. I see the immediate disappearance of most services and businesses that don't provide value in the eyes of the under 30s. Their needs are far different, and I don't see the same ones popping up as they age. I believe that many of the products sold by companies started long ago are obsolete. If the marketing of these products, the buyers and will disappear. If the politicians are no longer there to make promises, the public won't have to choose the lesser evil of candidates and won't have to consider which of the inefficient operations to keep.
ReplyDeleteOn your point of the necessity of the social system:
Before the government and insurance entered healthcare, religious organizations funded hospitals. Doctors would deliver babies simply because that's what they do even if they weren't being paid for that particular delivery. They wouldn't turn away women who don't have health insurance. Not every action had to be a financial transaction.
In developing countries where welfare checks don't exist, the poor are taken in by families. They cook meals and help clean the house. In return, they get shelter, food, and a small living allowance. This is the case for children and adults.
On a microeconomic level, you are right; services and businesses that don't provide value in the eyes of the consumers. However on a macroeconomic level, the needs that existed before (i.e., food, clothing, shelter, entertainment, etc.) that existed before will continue to exist, and will attract people to provide those things in exchange tor payment. Certainly, certain goods and services will be replaced by new goods and services that satisfy the same needs more efficiently. Horses give way to cars; barter gives way to money; grocery stores give way to supermarkets. However the basic needs don't change, and they will continue to be met by goods and services that provide them.
DeleteThe social system will also continue in some form. In some places, like Sweden, levels of services will decrease. However the history of most civilizations has evidenced an increase in social services. Programs that are created, like Social Security, have beneficiaries who are loathe to give up their benefits. Politicians offer new benefits, like health care, which when adopted, become very difficult to remove, because the beneficiaries rely on them, and fight to perpetuate them. A study of how this propensity was overcome in Sweden would be very interesting because it is so rare. Other examples are Russia and China, where socialism are giving way to kleptocracy. This is easier to understand; a socialist totalitarian regime can easily turn the benefits of its command economy from the "proletariat" to the totalitarians themselves. It is not at all certain that the libertarian inclinations of middle class under 30s will overcome the self interest of the beneficiaries of the social system. Prevailing tastes may change, but the functions of institutions are a lagging indicator.
(1) The danger of allowing slow change is that the small, nimble businesses that are innovating often get bought out and subsequently shut down by larger businesses as is the case in the startup tech scene where competition can be eliminated with a check. Large chains buy smaller stores. Huge corporations use predatory pricing and sell products for below the cost of production to kill off competition. This is the reason for the cleaning house metaphor (killing all the over 30s) and why we cannot allow the current institutions to stand.
ReplyDelete(2) Paying politicians nothing changes the people who will seek public office. With weaker incentive to remain in legislative office, judgment is less clouded. The trend is to promise more and more, but rarely cut programs. This is asinine and unsustainable. It is precisely why empires fall. They become too rich and the government feels entitled to tax citizens until the people no longer have anything left over to invest. They then need government "support" which is highly inefficient. This causes a poverty mentality in which people expect the government to save them. Government rent-seeking is the cause of economic decline.
(3) Of course the middle class under 30s cannot overcome the interest of the beneficiaries of the social system, they don't have as much money to contribute to political campaigns as the older people who pay to retain the current system.
(4) Great point: "functions of [government] institutions are a lagging indicator." They work to benefit the past, but are too slow and old to understand the future. So you agree, kill off the over 30s and eliminate government interference of progress by disincentivizing politicians from seeking power. Glad we had this discussion.