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?
It wouldn't. It wouldn't matter if everyone in the US voted for it, Congress approved it, etc. Just the embedding of tax rules into every economic process would take decades to unroll and re-implement, if its even doable at all. Look at the costs involved with something as minor as a change in the tax rate. So dream all you want...
That was pre-internet. Now, tax calculations are decentralized. Ask anyone who lived through SOX compliance, and that was utterly trivial in comparison
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?
At the risk of hair-splitting: is British Labour Party DemSoc or SocDem these days? Especially after they crossed out "common ownership of means of production" from their constitution in 1995? I mean I'm having no trouble believing they want social reforms of this or other kind. But do they (still?) believe in socialism as a goal? Possibly even achievable in this century?
Or consider SPD. "Die Idee des demokratischen Sozialismus" is there, well and proper. But what does it mean, this democratic socialism of theirs? "Eine Gesellschaft der Freien und Gleichen"? And how do we establish this (rather generic) idyllic goal? "Mehr Vermögen in Arbeitnehmerhand"? Very good, they need all the assets they can get their hands on! But what do we read a couple paragraphs down? "Wir wollen Anleger staerken, die ein langfristiges Engagement im Blick haben". So there will be investors in German economy, albeit kept on a leash "mit Hilfe des Steuer u. Aktionrechts". I'm not entirely convinced, how existence of investors mixes with socialism.
No, SPD these days does not want to replace capitalism with socialism, as it did in the times of Bernstein, Kautsky, Liebknecht. They called themselves SocDems but their goal was socialist society, through "Verwandlung der Arbeitsmittel in Gemeingut der Gesellschaft". Where is this goal these days? Long forgotten. Hamburg is no Gotha. For better or for worse, SPD wants to tame the beast of capitalism for the benefit of working people, rather than to kill it and skin it for the benefit of said workers.
Can we look at these parties and honestly say that these changes (avoidable? inevitable?) are purely cosmetic? That there is no need to differentiate between stance taken by them 100 years ago - and now?
I follow several SPD members on Twitter and I can tell you for a fact that there are actual socialists and who have a strong dictate for capitalism who are members of that party.
Yes, that democratic socialism does mean something. It's a basic outline for what social democrats are supposed to be and the tradition that they stand in. It's the ideal.
If social-democratic parties that have been severely damaged ideologically and programmatically by the *third-way* can assert a stance of democratic socialism, this gives social democrats full liberty to take these ideas seriously.
As an engineer, my impression is that "revolution" will necessarily cause less change to a system than "reform" because of the the Chesterton's fence effect.
Really depends on what you mean by "reformist". SocDems want to reform capitalist system. DemSocs want to overthrow it (which is a revolutionary goal) but not in a violent uprising - they'd rather use legal methods. That takes a parliamentary fight and passing various reforms (constitutional or otherwise). Hence, historically, at its most DemSoc days Bernstein's SPD was called - reformist.
also socialists (along with libertarians) are characterised by religiously adhering to some very bad and antiquated economic ideas from 19th century, but that's just my opinion
3. Since we're all living in America (Amerika ist wunderbar!), social-democratic approach has slowly but steadily taken over a great many formerly democratic-socialist parties. Third wayism and processes parallel and complementary to it have blurred the line even further, introducing elements of neoliberalism, as preached by Chicago school (cf. Polish government led by Democratic Left Alliance introducing flat corporate income tax rate).
4. The whole thing is compounded by the fact that most languages don't work quite the way English does. SPD, for example, stands for "Sozialdemokratische Partei Deutschlands", which started out as DemSoc but ever so slowly drifted towards SocDem positions. Lenin's party called itself "sotsial-demokraticheskaya", and the Menshevik faction retained positions really close to DemSocs as I outlined them. Bolsheviks, on the other hand, held a very peculiar notion of democracy...
2. Social democrat - I'm with the party that has a jackass as its mascot, I'm aware that the current economical system breeds poverty and inequality, I find it in the best interest of the nation to fight that lammentable tendency without radically changing the current economical system. Capitalism with a human face. Mostly an American invention.
America does not really have a strong social democratic tradition, and social democratic movements were all about radically transforming capitalism and addressing poverty and inequality.
Well, yes, SocDems want to fight poverty and inequality, if only because (reasonably functional) liberal democracy and its respect of civil liberties and human rights can not very well survive these plagues. It's just that they do not feel the need to abolish capitalism. DemSocs keep that as a goal - or pay lip service to it.
I'll be the first to grant that SocDems fight for "radical transformation of capitalism", esp. the way it operates without a healthy ammount of government intervention (taxes, regulations etc.) - but is it a transformation towards abolishment? What is the endgame, esp. re: control over enterprises? No, I maintain that there is a difference. SocDems would see capitalism civilised, but not destroyed. DemSocs would destroy it - in a civilized manner.
American tradition of SocDem thought might not be that strong, I freely concede. I'm from Europe and never followed history of your left and centre-left as well as I probably should. Still, I'd say that it was the success of post-WW2 America that really got this line of thought running.
Social democrats were democratic socialists in the post-war too. They specifically outlined their goals as creating a planned economy, bringing important parts of the economy under public control and democratizing the function of the economy. Here is their 1960
And DNA swore to shatter "Privatkapitalisme" in 1936, year after Nygaardsvold came to office... So, fair's fair, overthrowing capitalist syndrome remains a (stated) goal for much longer than I initially wrote.
Basically - not really. Whether a party calls itself one way or the other doesn't matter that much, especially since some of them are old enough to have wandered around most of the political compass. There is, however, a substantial difference between those two stances.
DemSocs want to, at the very least, radically upset the current dominant mode of production (via hired labour force) and abolish the current structure of ownership (by people who are not involved with day-to-day operations of enterprises). Co-ops are OK, individually owned and run businesses (esp. farms) are usually OK (as long as you don't hire anyone, because then things get complex), state, local, municipal, communal businesses are OK. Whether we introduce some measure of command economy or we retain (heavily controlled) market is... Debated. And let's leave it at that.
DemSocs are Marxists that put down torches and pitchforks, shaved themselves, put on nice suits and are ready to expropriate burgeoise by the parliamentary decree.
SocDems basically want the capitalism (no central planning, regulated market, hired labour as dominant mode of production, owners needn't work) to remain on stage, just put it on a tight leash - taxes, regulations, transfers, welfare etc.
These are the people who agree with Marx that capitalism corrupts. And they want in. Hell, they want everybody in! The only way to stave off workers' revolution is to force bourgeoise to share at least some of the profit - to turn proletarians into consummers. So let's do just that.
And yet the difference may very well be made even between those two factions!
1. Democratic socialist - means of production should be owned by the people. Just what does "ownership" is and who are "the people" is left as an exercise for the reader. Quod capita, tot sensus, as it were. We want to achieve this target without a violent revolution, although legal coercion is OK (parliamentary-led revolution as predicted by SPD at some point). After revolution we retain protections afforded to citizens by liberal democracy. Stated goal/method in many European parties.
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.
Think of it as a political compass with two axes--amount of shouting, and top marginal rate. Medlock is in the top left (not much angry shouting, high taxation). You sound like you're there too! Most elected Democrats--especially the moderate/establishment wing of the party--fall into the bottom left (not much angry shouting, relatively low taxation), while AOC and Bernie are in the top right (angry moralizing, high taxation).
IMHO the amount of taxation is far more important than the amount of shouting, so it makes sense that Medlock would consider himself allied with the faction that agrees with him on the issues even if he has a different argumentative style.
"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.
VAT is invisible to the consumer in a way that sales taxes very much are not, which matters for political viability, especially in taxphobic American culture.
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?
It wouldn't. It wouldn't matter if everyone in the US voted for it, Congress approved it, etc. Just the embedding of tax rules into every economic process would take decades to unroll and re-implement, if its even doable at all. Look at the costs involved with something as minor as a change in the tax rate. So dream all you want...
Don't be silly, Canada implemented a VAT in a federal system after relying on sales taxes before that, it went just fine and only took a few years.
That was pre-internet. Now, tax calculations are decentralized. Ask anyone who lived through SOX compliance, and that was utterly trivial in comparison
Australia (in 2000) and India (in 2017) have both implemented VAT in a federal system post-Internet.
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?
Good question!
Social democrats have always called themselves democratic socialists. They usually believed in social reform with a long-term of socialism.
At the risk of hair-splitting: is British Labour Party DemSoc or SocDem these days? Especially after they crossed out "common ownership of means of production" from their constitution in 1995? I mean I'm having no trouble believing they want social reforms of this or other kind. But do they (still?) believe in socialism as a goal? Possibly even achievable in this century?
Or consider SPD. "Die Idee des demokratischen Sozialismus" is there, well and proper. But what does it mean, this democratic socialism of theirs? "Eine Gesellschaft der Freien und Gleichen"? And how do we establish this (rather generic) idyllic goal? "Mehr Vermögen in Arbeitnehmerhand"? Very good, they need all the assets they can get their hands on! But what do we read a couple paragraphs down? "Wir wollen Anleger staerken, die ein langfristiges Engagement im Blick haben". So there will be investors in German economy, albeit kept on a leash "mit Hilfe des Steuer u. Aktionrechts". I'm not entirely convinced, how existence of investors mixes with socialism.
No, SPD these days does not want to replace capitalism with socialism, as it did in the times of Bernstein, Kautsky, Liebknecht. They called themselves SocDems but their goal was socialist society, through "Verwandlung der Arbeitsmittel in Gemeingut der Gesellschaft". Where is this goal these days? Long forgotten. Hamburg is no Gotha. For better or for worse, SPD wants to tame the beast of capitalism for the benefit of working people, rather than to kill it and skin it for the benefit of said workers.
Can we look at these parties and honestly say that these changes (avoidable? inevitable?) are purely cosmetic? That there is no need to differentiate between stance taken by them 100 years ago - and now?
I follow several SPD members on Twitter and I can tell you for a fact that there are actual socialists and who have a strong dictate for capitalism who are members of that party.
Yes, that democratic socialism does mean something. It's a basic outline for what social democrats are supposed to be and the tradition that they stand in. It's the ideal.
If social-democratic parties that have been severely damaged ideologically and programmatically by the *third-way* can assert a stance of democratic socialism, this gives social democrats full liberty to take these ideas seriously.
*strong distaste*
democratic socialist - wants to abolish private ownership of capital, revolutionary
social democrat - wants to correct market failures and provide welfare for everybody, reformist
As an engineer, my impression is that "revolution" will necessarily cause less change to a system than "reform" because of the the Chesterton's fence effect.
Social democrats and democratic socialists were the same political tendency.
Really depends on what you mean by "reformist". SocDems want to reform capitalist system. DemSocs want to overthrow it (which is a revolutionary goal) but not in a violent uprising - they'd rather use legal methods. That takes a parliamentary fight and passing various reforms (constitutional or otherwise). Hence, historically, at its most DemSoc days Bernstein's SPD was called - reformist.
also socialists (along with libertarians) are characterised by religiously adhering to some very bad and antiquated economic ideas from 19th century, but that's just my opinion
3. Since we're all living in America (Amerika ist wunderbar!), social-democratic approach has slowly but steadily taken over a great many formerly democratic-socialist parties. Third wayism and processes parallel and complementary to it have blurred the line even further, introducing elements of neoliberalism, as preached by Chicago school (cf. Polish government led by Democratic Left Alliance introducing flat corporate income tax rate).
4. The whole thing is compounded by the fact that most languages don't work quite the way English does. SPD, for example, stands for "Sozialdemokratische Partei Deutschlands", which started out as DemSoc but ever so slowly drifted towards SocDem positions. Lenin's party called itself "sotsial-demokraticheskaya", and the Menshevik faction retained positions really close to DemSocs as I outlined them. Bolsheviks, on the other hand, held a very peculiar notion of democracy...
2. Social democrat - I'm with the party that has a jackass as its mascot, I'm aware that the current economical system breeds poverty and inequality, I find it in the best interest of the nation to fight that lammentable tendency without radically changing the current economical system. Capitalism with a human face. Mostly an American invention.
America does not really have a strong social democratic tradition, and social democratic movements were all about radically transforming capitalism and addressing poverty and inequality.
Well, yes, SocDems want to fight poverty and inequality, if only because (reasonably functional) liberal democracy and its respect of civil liberties and human rights can not very well survive these plagues. It's just that they do not feel the need to abolish capitalism. DemSocs keep that as a goal - or pay lip service to it.
I'll be the first to grant that SocDems fight for "radical transformation of capitalism", esp. the way it operates without a healthy ammount of government intervention (taxes, regulations etc.) - but is it a transformation towards abolishment? What is the endgame, esp. re: control over enterprises? No, I maintain that there is a difference. SocDems would see capitalism civilised, but not destroyed. DemSocs would destroy it - in a civilized manner.
American tradition of SocDem thought might not be that strong, I freely concede. I'm from Europe and never followed history of your left and centre-left as well as I probably should. Still, I'd say that it was the success of post-WW2 America that really got this line of thought running.
Then again, in Scandinavia the DemSoc->SocDem transition was already reasonably far advanced at war's outbreak.
Social democrats were democratic socialists in the post-war too. They specifically outlined their goals as creating a planned economy, bringing important parts of the economy under public control and democratizing the function of the economy. Here is their 1960
https://snd.gu.se/sv/vivill/party/s/p/1960
The ''SocDem vs DemSoc'' is a myth.
And DNA swore to shatter "Privatkapitalisme" in 1936, year after Nygaardsvold came to office... So, fair's fair, overthrowing capitalist syndrome remains a (stated) goal for much longer than I initially wrote.
Thanks.
*1960 program
"Unbiased", that's a new one.
Basically - not really. Whether a party calls itself one way or the other doesn't matter that much, especially since some of them are old enough to have wandered around most of the political compass. There is, however, a substantial difference between those two stances.
DemSocs want to, at the very least, radically upset the current dominant mode of production (via hired labour force) and abolish the current structure of ownership (by people who are not involved with day-to-day operations of enterprises). Co-ops are OK, individually owned and run businesses (esp. farms) are usually OK (as long as you don't hire anyone, because then things get complex), state, local, municipal, communal businesses are OK. Whether we introduce some measure of command economy or we retain (heavily controlled) market is... Debated. And let's leave it at that.
DemSocs are Marxists that put down torches and pitchforks, shaved themselves, put on nice suits and are ready to expropriate burgeoise by the parliamentary decree.
SocDems basically want the capitalism (no central planning, regulated market, hired labour as dominant mode of production, owners needn't work) to remain on stage, just put it on a tight leash - taxes, regulations, transfers, welfare etc.
These are the people who agree with Marx that capitalism corrupts. And they want in. Hell, they want everybody in! The only way to stave off workers' revolution is to force bourgeoise to share at least some of the profit - to turn proletarians into consummers. So let's do just that.
And yet the difference may very well be made even between those two factions!
1. Democratic socialist - means of production should be owned by the people. Just what does "ownership" is and who are "the people" is left as an exercise for the reader. Quod capita, tot sensus, as it were. We want to achieve this target without a violent revolution, although legal coercion is OK (parliamentary-led revolution as predicted by SPD at some point). After revolution we retain protections afforded to citizens by liberal democracy. Stated goal/method in many European parties.
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.
Think of it as a political compass with two axes--amount of shouting, and top marginal rate. Medlock is in the top left (not much angry shouting, high taxation). You sound like you're there too! Most elected Democrats--especially the moderate/establishment wing of the party--fall into the bottom left (not much angry shouting, relatively low taxation), while AOC and Bernie are in the top right (angry moralizing, high taxation).
IMHO the amount of taxation is far more important than the amount of shouting, so it makes sense that Medlock would consider himself allied with the faction that agrees with him on the issues even if he has a different argumentative style.
Bernie actually notably does much less shouting and posturing than everyone in his fanclub, including his own campaign staff.
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.
VAT is invisible to the consumer in a way that sales taxes very much are not, which matters for political viability, especially in taxphobic American culture.