Wednesday, March 16, 2011

Harry Brighouse Nails It

One of the smartest bloggers I know, a committed leftist but--as anyone familiar with his views on social issues like abortion or education knows--hardly a committed ideologue, puts it all in perspective:

I have given a lot of thought over a life to the various arguments about the value of unions, of public sector unions in particular (which, as I’ve said [before], do indeed engage in rent-seeking). This is just not the time for further exploration of that....[W]e are involved in the political fight of our lives, and those of us who have considered and well informed (and, yes, even nuanced) opinions are, at the moment, devoting ourselves to building a political movement that can shift things so that more of the gains of future growth go to the people who actually produce it, and less to those who enjoy the rents that they have sought through contributing to the coffers of politicians who cut taxes, hate the state, and seek to undermine public institutions for the sake of increasing the profits of, well, their rent seekers.

6 comments:

Scott--DFW said...

State government functionaries are the people who produce the gains of future growth? I never would've guessed.

Harry said...

Thanks Russell.
Scott-DFW -- did you go to school? Do you know any effective workers who didn't?
But that's not the point. The point is that high quality public sector compensation packages bid up the cost of private sector labor, thus requiring private sector employers to forgo some of their profits. Which they make by employing people who were educated at public expense. This is about reducing wages all-round, and weakening the public sector by driving talented people out of it into higher paid and equally insecure private sector jobs (you know, right, that public sector compensation packages are slightly worse than private sector for comparable workers at present, but that relative job security compensates for that.

Scott--DFW said...

Harry, yes, I do know effective workers who did not go to school. I also know plenty of effective workers who didn't go to public schools. But, as you say, that's not the point.

Yes, boosting public sector compensation can pressure the private sector to raise wages to compete. But it's naive to think that employers will "forego some of their profits" to do that. They will, in most cases, try to retain or grow profits by cutting other costs and raising prices, which is to say by passing the increased burden along to consumers (i.e., more expensive goods and services, probably of lower quality).

While I disagree that this is about driving down wages across the board, it is absolutely about weakening the public sector and pushing talent into the private sector, where jobs are payed for by actual productivity, rather than by coercively glomming onto taxpayers. This is about the growing feeling of the top-heaviness of government--that the symbiosis between the people and government is slipping away from mutualism towards a deadly parasitism.

You say the private sector employs "people who were educated at public expense." It would be more accurate to say that they were educated at taxpayer expense. You know, right, that numerically the vast majority of taxpayers--about 90%--are in the private sector and that they contribute an even higher percentage of tax revenue?

I agree that we are involved in the political fight of our lives, over whether government belongs to us or we to it.

Harry said...

The private sector systematically underinvests in job training, which is one of the (several) reasons that we have seen the expansion of credentialism -- employers are happy to unload the cost of training onto the public and the workers, and then select workers at the point of application.

Um, in competitive markets firms can't pass the costs onto the consumer. Of course, I understand that markets are not as competitive as they should be, because large corporations seek rent through government subsidies and regulation. Still, they are somewhat competitive and insofar as they are not, that is not the fault of workers, but of rent-seeking corporations. (Large corporations were very satisfied until recently with the privatised health insurance system because massive economies of scale enabled them to use it as a way of protecting their positions against smaller fish.

I'm impressed that you know effective workers who didn't go to school -- usually you have to go to the third world to find significant numbers of those. Going to private schools is an irrelevance -- all but tiny handfuls of teachers in those schools were educated themselves substantially at public expense. (take a GSL -- thank the government - -though since Obama's administration ended the massive payout from that fund to banks, there is certainly more public money available -- and without extra spending! Why did it take a Democratic administration to do that?).

Of course, I was raised to pay my taxes with a smile, regarding my good fortune as something that should redound to others with less good fortune. Something to do with Christianity, I think, but I do realise that we're not in a Christian country. Still I'm glad we agree that its the fight of our lives. Sorry I can't convince you that you're on the wrong side of it, but I know that's the way of things. I'll continue using legal means to pursue the interests of the bottom 80%, and you can continue defending the interests of the top 1%.

Scott--DFW said...

Harry, you're fighting to protect privileges for less than 10% of workers, nearly all of whom are solidly middle class (in one of the richest countries in the world), with little concern for the costs to the remaining 90%, some of whom are the richest of Americans, but most of whom are middle class or lower, and all of whom contribute the funds that sustain your 10% and answer for the burgeoning public expenditures (nearly a third of GDP) controlled by that 10%. The tension is between the people and their government--not between the rich and the poor, workers and corporations, labor and capital, or [insert leftist narrative structure of choice].

Harry said...

Not sure what you mean by middle class here Scott-DFW. All the building and clerical workers in the schools in Wisconsin, at all the universities, in all the state buildings...? Most are well below the median and mean earners in the state of the same age. They support families. A close friend, having worked her whole life (since 18), has recently gone through a bitter divorce which has lost her half her retirement and set her on the financial edge, and expects to have to work well into her seventies at a job that, while pleasant at the moment because she has a good supervisor, has been hell in the past and may be in the future, and earns at 55 less than I earned at 27. The cuts in her benefits and additional pension contributions hit her very hard. Unlike me, she is covered by a collective bargaining agreement, and while I, like everybody else, believe that it is fair enough for state workers to take a hit, I know that getting rid of her right to collective bargaining will simply drive down her subsequent income. I am privileged, and I should be taxed at a much higher rate than I am as should everyone else with the luck to get my kind of income and working conditions. But she is not privileged (except in the sense that she lives in the richest country in the history for humanity and yes, she, like I, agree with you 100% that there should be large scale redistribution of wealth from richer to poorer countries if it can be done in a way that benefits the less advantaged in those countries rather than a kleptocrats. And, as I say, public sector incomes bid up private sector income. And private sector unions gain from strong public sector unions (ask them).

Can you show me the figures about burgeoning public spending as proportion of GDP? I thought it had stayed pretty flat over a long period (except for military spending, and except during the "don't tax but spend anyway" years of Republican presidencies.