On a practical level, how would a transition to a VAT system work? I don't mean to ask about the politics of building support for such a program. But administratively, how would a VAT system be implemented in a federal system like the US?
How would most people define the difference between being a "social democrat" and a "democratic socialist"? Is there a significant ideological or political salience to distinguishing between the two terms?
As someone who, like Noah I believe, wants to see a lot of fettered markets broadly and a lot of state support to fill in the negative side, Medlock's taxes & universalism are good fits right in. I'd say that an additional reason he's popular, besides the positivity, is you can agree on principal with his views from a variety of economic viewpoints as long as it's not a libertarian state is bad view.
It would be very interesting to see James Medlock outlining his methods to get from modern social democracy to market socialism. Right of first refusal is one example to encourage the growth of cooperatives, and I'd love to hear more transitionary policies from J.M.
Interesting, but like many, I'm not sure I buy all of it. For one thing, Medlock may be right when he dismisses the following MMT point as a rallying cry:
"actually when we tax you, we're not using that money to fund popular spending, we're destroying that money, and we're funding spending out of nothing"
Yes. But it's basically true, isn't it? I'm concerned that if we don't confront the essential truth behind money and it's utility, we'll end up in something less than a Nordic-style system. In addition, I understand that the Nordics are under tremendous pressure to undo what they've been able to achieve over the decades, and this is particularly the case in Sweden. Also note that Norway is a very special case with massive income from North Sea oil being funneled to a small population.
Finally, a possibly loony thought that I've had related to UBI and proposals for a federal job guarantee: Many have noted the absurdity and cruelty of tying healthcare insurance to employment, and this is obvious. But if that's the case, why should income be tied to any particular form of employment either? After all, income determines even more than the availability of medical care about whether we can survive. As long as a person is willing to work and does so, why should he be penalized for the unavailability of a job in a turbulent economy?
We've been told that the average young person entering the workforce should expect to change lines of work five to seven times over the course of a working life. This may be realistic from the standpoint of the economy. But it's also absurd from the standpoint of a human life. Who can afford to have a home and raise a family if you have to drop everything every few years and start again from scratch? Truly taking this job-change advice to heart, a young person would never leave his parents' basement.
Capitalism already turns human beings into commodities, but commodities that are eminently disposable. Why not simply go a step further and turn these human commodities into valuable resources that a democratically accountable state makes available to the private sector or that the state uses itself? I'm not suggesting the abolition of the private sector, just knocking it down a peg or two in the interest of humanity and the nation.
Hm. I'm at once intrigued and frustrated by this interview, in a way that I'd say characterizes much of my reaction to Medlock as I've seen him so far. I suppose you could describe me as one of those "centrists who seems to identify with centrism for centrism's sake" he mentions in passing here.
The trouble I run into, in short, is this: I don't particularly disagree with any of this interview, so far as I can discern. In particular, I share Medlock's fondness for VATs and I broadly agree with the idea that a welfare state ensuring a foundation for people's lives is a good idea. We have some differences in scope and specifics--I'm not as universally positive on it as he is--but it's all in the realm of workable policy differences towards the common goal of a society where everyone can prosper.
But I can't help but feel like there's a much deeper, more significant, philosophical chasm here than manages to be brought out in this interview, since he extends from there into "and therefore AOC and Sanders are worthy of ardent support, I'm a socialist, leftists as a whole are my allies and generally have the right idea, so forth", and I've extended (loosely) into "and leftists writ large (including AOC and Sanders) seem to jump between the impractical and the outright bad, maintaining the whole time that theirs is the only moral option while shouting down those who disagree, and blaming problems on 'capitalism' while ignoring its value. They should be overtly opposed and a coalition of the center aimed for".
I'm left, in other words, not exactly in major disagreement with Medlock but confused at his positioning in the coalition he claims as his own. Phrased more broadly as a response to social democracy, I find myself sharing many object-level goals with social democracy while ardently opposing socialism and leftist projects more broadly, leading to a wariness towards seeing it gain prominence given their close philosophical ties. It seems to me that the project of Medlock et al would be better served by clear philosophical disassociation from the far left, and this interview didn't quite clarify for me why he stands with the coalition he does.
Anyway, thanks for doing this interview! Would love to see the two of you spend more time in conversation.
"I think there's a good case to be made for top marginal rates on the right hand slope of the Laffer curve, as a way of compressing the income distribution."
Oh really, and what is that case? What's so valuable about compressing the income distribution that you forgo potential economic output and tax revenue? When your tax rate is on the right side of the Laffer curve, there is an unambiguous are Pareto improvement to be had. Lower the rates to reduce deadweight loss, gain more tax revenue, and pay for more generous welfare.
I think what the SuperDole really got right was the fact that it was *both* universal *and* targeted while being extremely generous.
People who just got checks, didn't really see much of a difference in their lives, because they were already doing fine.
But the SuperDole was viewed as universal, so it got enough buy-in to be extremely generous, and at the same time, it was "targeted" to the unemployed, so the government wasn't just handing out massive checks to people who didn't need them.
The fact that it WAS so effective also helped dampen the disincentive arguments. Barely anyone really believed the Republican line on the SuperDole and lazy employees refusing to go back to work.
So, I’ve a couple thoughts (good interview btw! If anything, it was overbrief)
Firstly, why do we need a value added tax when a sales tax does the same thing? Whether you take a percentage from each step or just tax the end user, the incidence will be precisely the same, as costs get transferred up and down based on the relative elasticity.
2) Have we considered that a UBI would have the effect of bringing welfare to a large group of people (working age, healthy adults who are not single parents) who are now essentially prevented from accessing welfare? What sort of effect would that have on productivity?
3) It strikes me that a UBI would have to be tied to a tax rate, not a set amount. Otherwise, suppose the payout reduces productivity, which means that we have to increase tax rates, which means that we reduce productivity still more - and so on and so on. As, obviously, simply printing more money would make the set payout worth less one way or another (with unpredictable, swingy inflation to boot) we would probably have to set a tax rate at so and so and say that all funds will be apportioned evenly.
4) Universal programs being more popular than means tested sounds like betting on the stupidity of the American people - not necessarily a bad bet, but an unstable one. Surely, at some point people will put it together that, while they be receiving x dollars now from the government, their tax bill has actually increased x+y dollars. People can fail to put two and two together on a survey, when you don’t have any costs for answering one way or another, and possibly too for something like the NHS, where quite how much you pay and receive are obfuscated beyond belief, but not for something with hard numbers and figures. (Though who knows, maybe people won’t recognize that everything got more expensive.)
5) What exactly does he propose to have strong unions? I’m perfectly fine with people organizing to collectively bargain - whether we happen to call it a union or a corporation - but why should the government privilege one? They are amoral, self interested organizations. It works out fine in the market, all in competition another, but when the government steps in? Imagine if the government forbade you from opening a business without joining Amazon, and Amazon was the only way you were allowed to work in an industry. Would that not be absolutely ridiculous?
I suspect I’ll have more thoughts later - perhaps they’ll have to wait till tomorrow though, the hour grows late.
That's right.
Classic final answer. Forever immortalized.
JAMES MEDLOCK ISN’T HIS REAL NAME??? (That’s obviously not the only thing I took from this interview, but wtf!!)
While I think I’m probably “neoliberal”, Medlock regularly pressures and shifts my left limit more and more.
Which, as this interview seems to capture, is exactly what he wants to do.
Good stuff. More people need to learn about Ernst Wigforss, especially!
On a practical level, how would a transition to a VAT system work? I don't mean to ask about the politics of building support for such a program. But administratively, how would a VAT system be implemented in a federal system like the US?
How would most people define the difference between being a "social democrat" and a "democratic socialist"? Is there a significant ideological or political salience to distinguishing between the two terms?
Perfect Ending.
As someone who, like Noah I believe, wants to see a lot of fettered markets broadly and a lot of state support to fill in the negative side, Medlock's taxes & universalism are good fits right in. I'd say that an additional reason he's popular, besides the positivity, is you can agree on principal with his views from a variety of economic viewpoints as long as it's not a libertarian state is bad view.
It would be very interesting to see James Medlock outlining his methods to get from modern social democracy to market socialism. Right of first refusal is one example to encourage the growth of cooperatives, and I'd love to hear more transitionary policies from J.M.
Interesting, but like many, I'm not sure I buy all of it. For one thing, Medlock may be right when he dismisses the following MMT point as a rallying cry:
"actually when we tax you, we're not using that money to fund popular spending, we're destroying that money, and we're funding spending out of nothing"
Yes. But it's basically true, isn't it? I'm concerned that if we don't confront the essential truth behind money and it's utility, we'll end up in something less than a Nordic-style system. In addition, I understand that the Nordics are under tremendous pressure to undo what they've been able to achieve over the decades, and this is particularly the case in Sweden. Also note that Norway is a very special case with massive income from North Sea oil being funneled to a small population.
Finally, a possibly loony thought that I've had related to UBI and proposals for a federal job guarantee: Many have noted the absurdity and cruelty of tying healthcare insurance to employment, and this is obvious. But if that's the case, why should income be tied to any particular form of employment either? After all, income determines even more than the availability of medical care about whether we can survive. As long as a person is willing to work and does so, why should he be penalized for the unavailability of a job in a turbulent economy?
We've been told that the average young person entering the workforce should expect to change lines of work five to seven times over the course of a working life. This may be realistic from the standpoint of the economy. But it's also absurd from the standpoint of a human life. Who can afford to have a home and raise a family if you have to drop everything every few years and start again from scratch? Truly taking this job-change advice to heart, a young person would never leave his parents' basement.
Capitalism already turns human beings into commodities, but commodities that are eminently disposable. Why not simply go a step further and turn these human commodities into valuable resources that a democratically accountable state makes available to the private sector or that the state uses itself? I'm not suggesting the abolition of the private sector, just knocking it down a peg or two in the interest of humanity and the nation.
Hm. I'm at once intrigued and frustrated by this interview, in a way that I'd say characterizes much of my reaction to Medlock as I've seen him so far. I suppose you could describe me as one of those "centrists who seems to identify with centrism for centrism's sake" he mentions in passing here.
The trouble I run into, in short, is this: I don't particularly disagree with any of this interview, so far as I can discern. In particular, I share Medlock's fondness for VATs and I broadly agree with the idea that a welfare state ensuring a foundation for people's lives is a good idea. We have some differences in scope and specifics--I'm not as universally positive on it as he is--but it's all in the realm of workable policy differences towards the common goal of a society where everyone can prosper.
But I can't help but feel like there's a much deeper, more significant, philosophical chasm here than manages to be brought out in this interview, since he extends from there into "and therefore AOC and Sanders are worthy of ardent support, I'm a socialist, leftists as a whole are my allies and generally have the right idea, so forth", and I've extended (loosely) into "and leftists writ large (including AOC and Sanders) seem to jump between the impractical and the outright bad, maintaining the whole time that theirs is the only moral option while shouting down those who disagree, and blaming problems on 'capitalism' while ignoring its value. They should be overtly opposed and a coalition of the center aimed for".
I'm left, in other words, not exactly in major disagreement with Medlock but confused at his positioning in the coalition he claims as his own. Phrased more broadly as a response to social democracy, I find myself sharing many object-level goals with social democracy while ardently opposing socialism and leftist projects more broadly, leading to a wariness towards seeing it gain prominence given their close philosophical ties. It seems to me that the project of Medlock et al would be better served by clear philosophical disassociation from the far left, and this interview didn't quite clarify for me why he stands with the coalition he does.
Anyway, thanks for doing this interview! Would love to see the two of you spend more time in conversation.
When we are printing money faster than we can collect it, what is the point of increased taxation? Just to smack people we don't like?
"I think there's a good case to be made for top marginal rates on the right hand slope of the Laffer curve, as a way of compressing the income distribution."
Oh really, and what is that case? What's so valuable about compressing the income distribution that you forgo potential economic output and tax revenue? When your tax rate is on the right side of the Laffer curve, there is an unambiguous are Pareto improvement to be had. Lower the rates to reduce deadweight loss, gain more tax revenue, and pay for more generous welfare.
I think what the SuperDole really got right was the fact that it was *both* universal *and* targeted while being extremely generous.
People who just got checks, didn't really see much of a difference in their lives, because they were already doing fine.
But the SuperDole was viewed as universal, so it got enough buy-in to be extremely generous, and at the same time, it was "targeted" to the unemployed, so the government wasn't just handing out massive checks to people who didn't need them.
The fact that it WAS so effective also helped dampen the disincentive arguments. Barely anyone really believed the Republican line on the SuperDole and lazy employees refusing to go back to work.
It wasn't MMT that pushed that view of taxes it was former NY FED chair Beardsley Ruml.
https://www.nakedcapitalism.com/2019/07/taxes-for-revenue-are-obsolete.html
So, I’ve a couple thoughts (good interview btw! If anything, it was overbrief)
Firstly, why do we need a value added tax when a sales tax does the same thing? Whether you take a percentage from each step or just tax the end user, the incidence will be precisely the same, as costs get transferred up and down based on the relative elasticity.
2) Have we considered that a UBI would have the effect of bringing welfare to a large group of people (working age, healthy adults who are not single parents) who are now essentially prevented from accessing welfare? What sort of effect would that have on productivity?
3) It strikes me that a UBI would have to be tied to a tax rate, not a set amount. Otherwise, suppose the payout reduces productivity, which means that we have to increase tax rates, which means that we reduce productivity still more - and so on and so on. As, obviously, simply printing more money would make the set payout worth less one way or another (with unpredictable, swingy inflation to boot) we would probably have to set a tax rate at so and so and say that all funds will be apportioned evenly.
4) Universal programs being more popular than means tested sounds like betting on the stupidity of the American people - not necessarily a bad bet, but an unstable one. Surely, at some point people will put it together that, while they be receiving x dollars now from the government, their tax bill has actually increased x+y dollars. People can fail to put two and two together on a survey, when you don’t have any costs for answering one way or another, and possibly too for something like the NHS, where quite how much you pay and receive are obfuscated beyond belief, but not for something with hard numbers and figures. (Though who knows, maybe people won’t recognize that everything got more expensive.)
5) What exactly does he propose to have strong unions? I’m perfectly fine with people organizing to collectively bargain - whether we happen to call it a union or a corporation - but why should the government privilege one? They are amoral, self interested organizations. It works out fine in the market, all in competition another, but when the government steps in? Imagine if the government forbade you from opening a business without joining Amazon, and Amazon was the only way you were allowed to work in an industry. Would that not be absolutely ridiculous?
I suspect I’ll have more thoughts later - perhaps they’ll have to wait till tomorrow though, the hour grows late.