Wednesday, August 04, 2010

Demolishing Conservatism In One Quick Sentence

The fundamental flaw with economic conservatism is that they insist that private enterprise is more efficient than the public sector, while never actually considering the fact that what they're more efficient at is making money, and not at actually getting done the things that need to get done; for example, McDonald's might be the most profitable restaurant, but it's more profitable because it makes lots of cheap food it sells for a moderate profit, not because it actually makes tasty and nutritious meals.


The one letter wonder said...

But, government cheese tastes even worse. Fail!

John Seavey said...

Um...I can't tell. Is that actually meant to be a serious response, or are you making fun of the way conservatives utilize sophistry and borderline nonsense when arguing their cases rather than admit they're wrong?

Because if it's the latter, good job!

j$ said...

Clearly they're trying to use reductio ad absurdum to imply that federal government is inferior because government cheese is inferior. Unfortunately, they've fallen into the logical fallacy of cum hoc ergo propter hoc, which means correlation implies causation. The entirety of our government's activity cannot be derived from the taste of the cheese made available to low income families, so there exists no basis for a claim of causality, and, in any case, it is clear no causality exists.

Interestingly, basing their argument on this obvious logical flaw makes their entire position one of reductio ad absurdum. In other words, by choosing such a preposterous comparison they have brought their argument to its logical extreme, in which it illustrates not only its absurdity, but their complete lack of any reasonable counterposition.

Unfortunately, this is a common political tactic for derailing legitimate discussion. While it certainly is not limited to the Republican party, it is undeniably one of their mainstays, especially when arguing economics since the data rarely support their conclusions.

Put more simply, FAIL COMMENT IS FAIL.

Tyson said...

Who is supposed to decide what are the correct "things that need to get done"? The fundamental flaw of your argument is the assumption that someone in the public sector will make "better" choices than what is driven by the free market.

I think that this is exactly the type of reasoning that leads conservatives to think that liberals are elitists and/or wannabe aristocrats - the conservatives see liberals assuming that they will make better choices for the populace than the populace can make for themselves.

I'm not particularly defending conservatism here - I tend to think that both conservatives and liberals get some things right, but both also get a lot wrong. I just think that this particular critique of conservatism has some problems. I would suggest that there are three big problems with our economic system that are often glossed over by conservatives but not pointed out enough by liberals:

1) Little to no distinction is made between "private sector" and "free market" - but many things in our society are done by the private sector without having anything to do with a free market. Far too often, conservatives will predict the supposed benefits of a free market when no such thing is involved. When these benefits fail to materialize, liberals will then use these same incidents to indict the free market, even though it had nothing to do with the situation.

2) There is an enormous difference between competing by trying to provide something better, and competing by trying to inhibit the ability of your competitors to provide something better. The first one is usually legal, and the second one often is not, but a lot of business effort is focused on the second one. An example: using the first type of competition, two companies making software in competition with each other are motivated to make the best software they can, or make it cheaper, or have better support, etc. So the public benefits by having two continually improving choices. But using the second type of competition, the two companies are motivated to try to stop the other company from improving their software, or lowering their costs, or delivering it, or whatever. In this case, you often end up with one choice being marginalized, and the other choice becoming a monopoly, but not actually being very good. Government regulation is the only thing that restrains the second, counter-productive type of competition. But opponents of government regulation often fail to make the distinction between these types of competition, and critics of the free market often overlook the benefits of the first type.

3) Corporate capitalism has mostly replaced Adam Smith-style capitalism. This has made responsible behavior much more difficult in our society. The individual shareholders in BP, for example, aren't really going to be held accountable for BPs oil spill; at the same time, BPs management has a direct fiduciary responsibility to these shareholders to maximize value, and can even be sued (and will be) if a shareholder feels that they are not working their hardest to do this. Conservatives often gloss over this failure in responsibility, and liberals often fail to recognize that this is not a feature of capitalism, but instead is a feature of corporate capitalism (not the same thing).

John Seavey said...

I understand what you're saying, Tyson, but I think you're falling victim a bit to the false dichotomy: If conservatives are for total laissez-faire capitalism and complete deregulation, then liberals must be for rigid regulation and total government control.

Whereas I, and most liberals, think there's plenty of room for the private sector. It's absolutely got a place--but that place shouldn't be primacy. You point out in #2 and #3 a lot of the same things liberals are saying: Corporate capitalism is a dangerous beast that needs watching by an independent, disinterested party that's not dependent on the profit motive, and a lot of the strategies for generating profit are not to the public benefit.

I'll give a couple of examples beyond the McDonald's one, because let's face it, the consequences of having one lousy fast-food meal are not great. But let's say McDonald's was running a network of private schools, using the same strategy? Keep costs low, cut overhead, make your money through volume, and spend your budget advertising the service instead of improving it? Sure, the kids might get out of sixth grade not knowing long division, but eventually the magic of the free market will correct that, right?

Of course not. A child's education is a lot more important than a single meal, and more importantly, it's too important to be left to the profit motive. You only get one shot at teaching a child, and the important thing is getting it right, not making money.

Or, to give another example that's still drawing a bit of media attention, let's look at the insurance industry. The most "efficient" insurance company, from a free market standpoint, is the one that takes in the largest amount of money in premiums while paying out the smallest amount in claims. Of course, you can't just take people's money and give nothing back--there's an optimum point on that curve. But as we've seen in the news, there is a definite incentive to try to find a way to deny care to sick people who've been loyal customers.

Whereas from a point of view of everyone else, the most "efficient" insurance company is one that pays out the most in claims and charges the least for premiums that it can do while still staying solvent. In the case of the insurance industry, it is literally an adversarial relationship created by the profit motive. A government insurance company (the so-called "public option") would be much better for the average person who needs coverage in every single case.

There are other examples, but you get the basic idea: Sure, private enterprise is fine, but it's not good for important things. Because they're always out to make money, and if they can do so through false advertising, cutting corners, deceptive marketing, or just plain collusion, they will. You don't get angry about it, but you don't trust them with the important stuff, either.

Roger said...

Demolishing your argument, and referencing Greg Gutfeld, all in one sentence!

"McDonald's fed more people at an affordable price than Stalin and Mao ever did."

Yes, this is like making a "50 Hitler post" to debunk your argument, but how else can you counter a 1-sentence argument that boils down to "the private sector is efficient because it's *popular* and doesn't have to bribe people to buy a more expensive product!" Refresh my memory: wasn't this your argument for why Marvel is struggling with declining readership?
1. Their stories are crap
2. Their stories are aimed at a dwindling audience
3. They're charging a premium for these comics to make up for lost revenue due to reasons 1 and 2

So why does government get a free pass when they say "you ought to drive a Volt, even though the gas-only car is $30k cheaper"?

Roger said...

Reading the comments and responses, I see why your argument is unconvincing--you are trying to fight a strawman argument ("the private sector is always better") with another strawman ("government is always better"). Case in point: you said "If conservatives are for total laissez-faire capitalism and complete deregulation, then liberals must be for rigid regulation and total government control. Whereas I, and most liberals, think there's plenty of room for the private sector." You took the worse elements of your competition and portray them as exemplars of the movement, while excusing your behavior as principled and moderate and not some crazy socialist rambling. I could easily say that you're a typical middle-class liberal who says "someone should do *something* for the poor" before you drive away in your expensive car, but I won't because I don't know you. But see how easy that was?

Moving on, you try to argue that "Corporate capitalism is a dangerous beast that needs watching by an independent, disinterested party that's not dependent on the profit motive", but real life does not match your idealism. Can you say Congress is a good watchdog on big business when Chris Dodd writes exemptions for AIG in exchange for a campaign contribution? Or BP gets special exemptions and subsidies in exchange for research in green technologies? This is why the problem you're describing is "selfish interest corrupting the game" and not "the profit motive"--you can only be a independent watchdog if you don't have one hand in the henhouse, otherwise you're picking the winner of a competition in exchange for some grist.

Lastly, your point about insurance companies is that an "efficient" company would pay every claim and take in as little as possible. This is the definition of an insolvent corporation, and one that can only survive with heavy subsidization, such as a banana republic that prints the money needed to cover a shortfall. And if you're offended by insurance companies not covering loyal customers' big bills, how do you feel about socialized health care systems denying patient care, having shoddy facilities, or advocating euthanasia for its own citizens? You must have a huge bone to pick with Britain's NHS!

Last thought: McDonald's Mission Statement is to turn a profit by making tasty burgers, because they can't make a profit if no one is buying their disgusting food. Look at Domnino's Pizza and how hard they're working to get people to spend money on them again. Their bottom line doesn't care how efficiently they bake pizzas or how much they spend on marketing--it starts with how much money they receive from pizza sales, and they subtract costs from there.

This is the problem with taking sides in a culture war--you beat the drums for your cause so loudly that you might not hear a contrary view.

Wally said...

The "independents" are in full force today!

John Seavey said...

Actually, McDonald's makes their money off of renting property that they own to franchisees who have to use that property to sell McDonald's food. They really don't give a fuck how it tastes. :)

And no, I'm not trying to fight a strawman argument with a strawman argument. You have to realize that the argument of "everything should be left to the private sector" is not some sort of crazy exaggeration of what Republicans think, it's the actual current state of mind in the conservative movement right now. Don't blame me because you let the batshit crazy people start writing your mission statement.

And I'm not fighting it with a strawman argument, because I'm not saying that government is always better. I'm saying that government is a necessary counter-balancing force, and you need to have a strong counter-balancing force to make sure that corporations have some sort of interest in something besides their own profits. Pointing out all the ways that companies bribed the living fuck out of government agencies during the "pro-business" Bush Administration just proves my point.

As to health care...I tell you what. You go over to Britain, explain our health care system to them in full detail, and ask them if they'd like it over their own. If you can find more than a thousand in the entire UK who'll take you up on that, I'll let you co-write this blog. :)

Anonymous said...

how do you feel about socialized health care systems denying patient care, having shoddy facilities, or advocating euthanasia for its own citizens? You must have a huge bone to pick with Britain's NHS

massive, epic fail and proof of huge arseholery in one paragraph.

mate, the NHS doesn't advocate euthanasia for its own citizens, and in saying so you have just revealed yourself to be an arseclown who believes any crap the right wing noise machine feeds them.

You should learn reading comprehensino.

Anonymous said...

Demolishing John Seavey's argument in one sentence:

If the government was so good at "actually getting done the things that need to be done," then the Soviet Union would be a paradise right now.

(I do enjoy your comic book blogging, though)

John Seavey said...

Demolishing your demolishment: If private enterprise was more efficient than the government, we wouldn't have the Edsel, New Coke, or the Love Canal. Just because a government has done a bad job at something, it doesn't mean you draw the conclusion that all government is bad at everything. The solution is transparency and accountability, not turning everything over to Wall Street bankers to run (into the ground.)

Anonymous said...

I quake in fear at the New Coke reference!

Free enterprise failure vs government failure:
You say New Coke, I say collective farming.
You say the Edsel, I say the Trabant (or the Yugo, or British Leyland, take your pick)
You say Love Canal, I say Chernobl (or the Trabant, take your pick)

When private enterprise fails, its effects are limited (like Love Canal), or even harmless (like New Coke).

When government fails, it can effects an entire nation, and there is no escape, you're forced to endure it.

If you think people in private enterprise are not so smart, can you at least agree people in government are not any smarter?

Now, if your example of private failure was Transformers 2, then I would have no defense!

John Seavey said...

"Limited" and "harmless". Sure, tell that to the thousands of people who died from eating tainted meat before the FDA regulated production. Tell that to the women who jumped to their death from a tenth story window because the fire exits had been locked to prevent them from stealing from the business. For that matter, the Love Canal disaster was far from "limited"; it was part of a legacy of dumping toxic waste in residential neighborhoods with absolutely no regard for the safety of those neighborhood's inhabitants. Only government regulation prevented something like the Bhopal disaster from happening here in America.

Am I saying government is perfect? No. But the solution, as I keep saying, is to improve it, not discard it. Giving up on government because it doesn't always work is like deciding that since you got food poisoning once, your solution is to stop eating.