Democracy becoming dominated by the politics of envy?

Among the attendees of the recent Mont Pelerin Society were Steve K, Sinclair and me.  A great many issues were discussed in the debate on liberty, efficiency, their friends and enemies.

I have a piece in today’s The Australian, which summarised my view of the more important take-aways.   They include

No attendees doubted market capitalism’s higher efficiency and ability to deliver growth, including for the benefit of poorer members of society. But recent developments have undermined confidence that the model will continue to prevail.

These include the resumption of growth in the size of government and a weakening of property rights by, for example, the seizure of land usages rights. In Australia, government actions to reduce greenhouse gas emissions through planning laws and measures that restrain commercial activity include the increase in regulatory intrusions and permissions, like those that resulted in the Adani coalmine taking nine years to be approved. A worldwide consequence of such measures has been a general slowdown in growth rates.

There is also evidence that more people are not seeing the benefits of the growth that has taken place. Between 1970 and 2018 the top third of US income earners increased their aggregate share of total incomes from 29 per cent to 48 per cent, with the middle third falling from 62 per cent to 43 per cent and the poorest third seeing their share drop marginally to 9 per cent. (Corrective note: These numbers describe “tiers” as defined by Pew Research. The top tier increased its share of households from 14 per cent to 20 per cent; the middle tier decreased its share from 61 to 51 per cent; the bottom tier increased its share from 25 to 29 per cent. All three tiers saw higher real median household incomes of 64 per cent, 49 per cent and 43 per cent for tiers one, two and three respectively).

Particulary among young highly educated people there is a hostility to the market economy – thus although Corbyn lost the Berexit election he got 70 per cent of the young peoples’ vote.

The politics of envy is becoming evident.

Unlike socialism of the past, the modern form of socialism sees redistribution, reserving areas from commercial activities and abolishing cheap fossil and nuclear fuel accorded a higher priority over increasing aggregate income levels.  Indeed, the modern dissent from free market capitaism is often characterised by a wish to see lower living standards to allow for less use of environmental goods and resources.

Democracy, which led to or at least coexisted with the diminished government controls driving higher income levels for more than 70 years, is now turning into populism and threatens to foment a new era of declining living standards.

 

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46 Responses to Democracy becoming dominated by the politics of envy?

  1. MACK

    Firstly the internet is causing fragmentation of information sources for those without the knowledge and qualifications to research things themselves. Many young people only look at Facebook, shopping and sporting sites, and never learn anything. Many have never heard of Mao. Earlier generations had only radio and TV, which at least had some serious news, and some standards.
    Secondly there is now a generation of journalists who have been brainwashed by left-wing academics at universities, and who get their information from Twitter and the web generally. In contrast their predecessors did an apprenticeship and learnt about the real world from covering the courts and racetracks, and had the time to talk to a lot of different people doing a wide range of real jobs.

  2. flyingduk

    ‘ becoming’ dominated by the politics of envy? It was ever thus, or at least it has been since women got the vote and voted in the welfare state.

  3. Fisky

    Democracy, which led to or at least coexisted with the diminished government controls driving higher income levels for more than 70 years, is now turning into populism and threatens to foment a new era of declining living standards.

    Other way around – it is declining living standards (stagnating wages, sky-high property prices, expensive college degrees, poor career prospects) that are threatening democracy.

    If classical liberals do not start coming up with credible policies to address these systemic problems (wages, property, college…), then they might as well throw the towel in, because they will not be listened to again.

    And I mean credible policies, not the usual abstract free market hand-waving that doesn’t lead us anywhere.

  4. Pyrmonter

    One could of course avoid the trap of equating ‘exchange transactions’ with well-being. Some, at least, of the environmental restraints that have imposed ‘cost’ have also brought about greater well-being. The SO2 reductions in the US, for example, have reduced particulate pollution as well as acid rain.

  5. Pyrmonter

    @ Fisky

    ‘… low wages …’ – compared to what, and when? I remember my first pay slip, 30 years ago, as a junior sales assistant: $4.76 an hour then didn’t approach the current national minimum hourly wage.

  6. government actions to reduce greenhouse gas emissions through planning laws and measures that restrain commercial activity include the increase in regulatory intrusions and permissions

    The Endarkenment.
    Government acting not on reason, but according to religious dogma.

  7. Fisky

    ‘… low wages …’ – compared to what, and when? I remember my first pay slip, 30 years ago, as a junior sales assistant: $4.76 an hour then didn’t approach the current national minimum hourly wage.

    Australia’s wage growth has been close to zero since the GFC. Do classical liberals have any policies at all to address that? No, they don’t. So “liberals” shouldn’t be surprised at all about the politics of envy.

  8. Howard Hill

    The politics of envy is becoming evident.

    When 8 people own as much money as the rest of the entire world, we have a problem in Huston wouldn’t you say?

    When politicians in cahoots with central banks can manipulate the economy to benefit the rich, do you honestly believe these people of envy haven’t noticed?

    When those at the top can leverage their wealth to create untold riches at the expense of everyone else and then hoard it for whatever reason, do you really believe that us plebs are just envious?

    Could it be that the disparity between the rich and poor is so great now and that the poor feel so helpless that socialism seems to them the only way to get a fair cut of the loot? That climate change is only a means to that end and nothing about saving the planet, but a way to try and cut the rich down a little?

    I’m the furthest thing from a lefty you could imagine, without being an extreme right wing nut case and have never begrudged anyone becoming successful. But shit, 8 people own all the money in the world, Eight!

    You don’t think this is a bit lopsided and may just cause a bit of resentment a feeling of helplessness?

    Just putting some thoughts out there that never seem to be discussed around here.

  9. Iampeter

    Democracy becoming dominated by the politics of envy?

    No. Just the general dominance of political illiteracy.
    I don’t have access to The Australian but it doesn’t sound like you mention that the populists driving this assault on capitalism are conservatives who today are trying to be even more left wing than progressives.
    I mean, why would a statist like Steve K be at this meeting? Or do we think supporting someone like Trump, who wants to regulate trade, immigration, private enterprise, implements out of control spending, etc, is consistent with supporting liberty?

    Also, do you think the GetUp-level talking points of someone like Fisky are an aberration at the Cat as opposed to the majority position? Remember this is also meant to be a pro-capitalist blog.

    So no, the issue has nothing to do with the “politics of envy.” The issue is that today’s so-called “right wing” are just very confused leftists.

  10. Pyrmonter

    @ Fisky

    There are plenty of classical liberal responses to labour market inefficiency: to describe the market-placed policed by the Fair Work Ombudsman and imposing punitive regulations – overtime, penalty rates and the like – on top of high minimum wages, together with a left campaign against ‘wage theft’ as some classical liberal creation is an exercise in fisking even more absurd than the one you engaged in on the other thread.

  11. Fisky

    There are plenty of classical liberal responses to labour market inefficiency: to describe the market-placed policed by the Fair Work Ombudsman and imposing punitive regulations – overtime, penalty rates and the like – on top of high minimum wages, together with a left campaign against ‘wage theft’ as some classical liberal creation is an exercise in fisking even more absurd than the one you engaged in on the other thread.

    LOL – I specifically asked for any proven ways to increase wages, and instead you listed a whole bunch of policies designed to reduce wages. Beyond parody.

    This is why your Mont Pelerin Institute buddies are clueless as to what’s going on.

  12. Fisky

    together with a left campaign against ‘wage theft’

    Oh dear, please tell me this isn’t another case of “classical liberals” opposing the sanctity of contract law when it suits them???

  13. Alex Davidson

    There was an interesting piece published on the Mises website a few days ago highlighting the contempt that some in the old right had to say about democracy – that it is fundamentally a collectivist ideology driven by fear and envy, directly opposed to individual freedom and property rights. More recently Hoppe summed it up in “Democracy, the God that Failed.” It is nothing more than mob rule, dressed up in an attempt to give legitimacy to the use of force to achieve ends.

  14. Fisky

    Let’s take a step back here. If “classical liberals” are going to run interference for surreptitious wage underpayment by employers, how on earth can they object to a politics of envy????

    It’s not just the incel “libertarians” that are the problem here, the rot has infected the entire “liberal” movement.

  15. Fisky

    You don’t think this is a bit lopsided and may just cause a bit of resentment a feeling of helplessness?

    It’s not just that 8 people have concentrated more wealth than 50% of the world’s population (or whatever the stat is), it’s that the same people have sponsored a hateful Woke ideology that basically says, eat shit losers, you deserve to be poor, and by the way, you’re cancelled and banned from working again if you don’t agree with us.

    That’s going to cause a backlash.

  16. Iampeter

    Fisky is right. We need more central planning to fix the issues caused by central planning.
    When will you leftist advocates of individual rights and capitalism get it!?

  17. Beachcomber

    Particularly among young highly educated people there is a hostility to the market economy –

    It is becoming more and more urgent that the Universities be de-funded. They are destroying the individual freedom and free enterprise basis of Western society.

  18. Beachcomber

    It (democracy) is nothing more than mob rule, dressed up in an attempt to give legitimacy to the use of force to achieve ends.

    What system can work better? That is the conundrum.

  19. Pyrmonter

    @ Fisky

    The ways to improve wages are the well-known ways by which labour productivity are improved. Without limiting the ideas, they include:
    – removing barriers to hiring and firing, an in particular the ‘unfair dismissal’ and redundancy rorts
    – reducing the incentives for ‘strategic gaming’ by employees, such as sticking around in the hope of picking up a redundancy cheque
    – matching work hours in the service sector to when consumers want to buy, not what some industrial arbiter thought were ‘normal working hours’ in 1920
    – allowing permissionless innovation: the process by which those innovations that improve productivity can be implemented.

  20. Fisky

    The ways to improve wages are the well-known ways by which labour productivity are improved. Without limiting the ideas, they include:

    The first problem with this is that labour productivity growth has decoupled from wages (which are now at their lowest share of income in about 50 years), so it’s not obvious that any of these measures will improve wages. The second problem is the 800lb gorilla in the room which no one wants to talk about – our big Australia immigration program which guarantees an endless supply of low-wage labour to our lazy business sector.

  21. Infidel Tiger

    Well done, Fisk. These autists need constant reminding that their sacred text books and models are a load of shite.

    The neo-liberal experiment is over. A total bust.

  22. JC

    Not really. Unless you take the marked slowdown in the Australian inflation rate since 2015ish, you can’t make any value judgement on Australian wages growth.

  23. Fisky

    Not really. Unless you take the marked slowdown in the Australian inflation rate since 2015ish, you can’t make any value judgement on Australian wages growth.

    Real average compensation of employees is stuck at approximately the same level as it was in 2010, while labour productivity is up around 11 points. House prices are up massively since then of course.

    Wakey wakey “liberals”, it’s not going very well for you!

  24. JC

    Your link doesn’t work, Fisk.

  25. JC

    Fisk:

    Your own link shows labor productivity has been flat since about 2015.

  26. Fisky

    It is becoming more and more urgent that the Universities be de-funded. They are destroying the individual freedom and free enterprise basis of Western society.

    That’s part of the problem. More generally though, we are churning out huge numbers of entitled, over-qualified (on paper at least) graduates with poor career prospects. A bit like Iran before 1979.

  27. Fisky

    Your own link shows labor productivity has been flat since about 2015.

    Sure, but it’s up over 11 points in 10 years, while wages have gone nowhere, proving my point that they have decoupled.

  28. JC

    Also, you cannot make any judgement in your direction without taking into account the mining sector came off a huge boom. Wages in that sector have dropped materially.

  29. Fisky

    I was just about to say, the mining boom is one event that could account for the divergence, however mining investment actually peaked about a year or two after that. So I’m not sure if that’s it.

  30. JC

    If mining investment peaked, then it would follow reasonable logic to say wages did too in that sector and it would be no shock at all if they also began to fall. There were some huge wages in mining at one point in time.

  31. Fisky

    So let’s look at the overall strategy here – once the mining boom ended, the government (and the RBA) had only one shot in the locker – the housing bubble – to keep GDP ticking over.

    Unfortunately, basing our entire growth strategy on the housing bubble has locked us into an unsustainable position of mass ponzi immigration, selling university degrees to the highest bidder (and lowering standards accordingly), putting home ownership out of the reach of an entire generation, record low interest rates and miserable, ever-reducing returns for low-risk investors. It’s a total bust, and it will not end well.

    What do “liberals” have to say about this? Well, they support university fee deregulation and uncapped places for foreign students. It goes without saying they strongly advocate mass immigration. They want to deregulate the labour market, abolish penalty rates, etc. And I don’t believe any “liberals” opposed the privatisation of the building industry’s safety certification process, which is now wreaking havoc in the high-rise apartment sector in NSW.

    So, whatever solutions there may be to the long-term decline in living standards, “liberals” are not providing them.

  32. JC

    Fisky

    There’s no housing bubble masterminded by the government or even the RBA.

    We have an increasing population and very strict code. Monetary policy was eased because the economy weakened.

  33. Tel

    Your own link shows labor productivity has been flat since about 2015.

    Sure, but it’s up over 11 points in 10 years, while wages have gone nowhere, proving my point that they have decoupled.

    Guys please, there is no economic theory … nor has there ever been … that workers are paid equal to their productivity.

    The actual economic theory is based on MARGINAL productivity.

    MARGINAL!! Go away and learn what that word means.

  34. Fisky

    Guys please, there is no economic theory … nor has there ever been … that workers are paid equal to their productivity.

    The actual economic theory is based on MARGINAL productivity.

    A bunch of lines on a page merely suggest that employers have an incentive to employ workers all the way to the magic intersection where the wage rate meets productivity. In the real world, no one is rational, people make hiring decisions based on all kinds of reasons, and your wage rate depends on a combination of good looks, personality, and negotiating skill.

  35. JC

    Thanks for the lesson, Tel. I’ve been aware of the marginal productivity theory for the past 40 years.
    However:
    Fisk is asserting that things aren’t working well for wage earners because wage growth as been flat for some period of time.

  36. JC

    Fisk

    Alternately it comes down to the input cost of a hire. There is flexibility around a figure.

  37. Kneel

    “Particulary among young higjhly educated people there is a hostility to tyhe maret economy…”

    They have been indoctrinated.
    It’s not “capitalism” that has failed them, it is crony capitalism and politicians who believe in “whatever it takes” and “non-core promises” that have failed them, along with “market-based solutions” that try (and fail utterly) to marry high levels of regulation with a “market”. For an example, see electricity industry – companies that own productive assets that can provide a good return on investment (even after upgrades etc) let those assets rot because doing so pumps up what they can charge for the same product produced at greater effort, cost and environmental damage. They care not that it will lead to the hardship of those least able to afford it, they can see plain enough that government imposed rules can lead to greater profits – they are conforming to one set of government rules (duty to shareholders) by exploiting other government rules (RET etc).
    Government rules like minimum wages, unfair dismissal etc is what is pushing companies towards more part-time work – it’s the only way to get the flexibility neeed to be competitive.

    The companies and individuals that gain are not to blame, the system that both enables and encourages their actions is to blame. The solution is the exact opposite of what they demand, but those same “whatever it takes” polly-muppets – now on the opposition benches – are lying again and suggesting more government interference, more regulations, more power to government will create rainbows and unicorns, peace and love.
    This is unsustainable – when the last straw is added, I wouldn’t want to be “the man”, you’ll be the first up against the wall, and rightly so.

  38. Iampeter

    The neo-liberal experiment is over. A total bust.

    I think you mean classic-liberal experiment.
    In any case, this thread kinda proves what I’m saying at the Cat and my first post in this thread.
    It’ll be handy for me to link back to next time any of you get worked up when I call you politically illiterate leftists.

    I’m pretty sure even Monty wouldn’t post the kind of teenage, BernieBro level of content we’ve seen here.

    Australia’s Leading Right Wing Blog, ladies and gentlemen.

  39. John A

    There is also evidence that more people are not seeing the benefits of the growth that has taken place. Between 1970 and 2018 the top third of US income earners increased their aggregate share of total incomes from 29 per cent to 48 per cent, with the middle third falling from 62 per cent to 43 per cent and the poorest third seeing their share drop marginally to 9 per cent.

    Specious statistics with no validity in real terms. Unless the “top third of US income earners” is the same collection of individuals (which I doubt) the comparisons are meaningless.

    It simply reflects that inflation and QE have made the numbers and the currency worthless and that the figures merely represent Monopoly money. The result is that the posted incomes (not people) have skewed northwards, while the lower one-third of incomes (not people) has not varied.

  40. max

    no freedom Fisk that is problem, to much socialism/statism/fascism

    no honest money
    no freedom to work ( freedom to offer bit )
    to many regulations
    to many laws

  41. Leo G

    The SO2 reductions in the US, for example, have reduced particulate pollution as well as acid rain.

    The SO2 regulations were least-cost abatement strategies which improved industry profits at the time.

  42. Fisky

    Good to see you old fella.

  43. Mick Gold Coast QLD

    That’s the end of the “Democracy … envy” thread then, with an infestation of cressidavirus, mad cow’s disease or an attack of I’m-so-amazingly-amusing-it’s-a-shame-I’m-barely-literate.

    Five stupid posts in a row.

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