Comment by rachofsunshine
1 day ago
> It seems inefficient and certainly demoralizing, but I would prefer that solutions to the problem were driven by market forces and innovation rather than regulation or employee backlash.
I ask this as a person who takes market forces very seriously: why?
I think it's pretty obvious at this point that these forces are not producing very good outcomes for the population (even if they are on paper efficient in the market-efficiency sense), or at least, that the public doesn't feel like they are. That's causing massive social instability that is threatening nearly the entire developed world. That instability poses a pretty high threat to the approach you're arguing for. Neither protectionist reactionaries, nor leftists, are very well aligned with free-market philosophy, and those ideologies are ascendant nearly everywhere right now. Isn't that a greater threat to free-market economics than relatively mild welfare-state and workers-rights stuff?
(Full disclosure: I am very much pro-labor and pro-regulation, so this is arguing for things I support, but even with your views it seems pretty clear to me that the status quo is dead no matter what you do. Wouldn't you rather have reforms that make the existing system work for the public than a revolution that destroys it entirely?)
> I think it's pretty obvious at this point that these forces are not producing very good outcomes for the population
Just because market failures exist, doesn’t mean a non-market approach will work better. Our markets have a lot of issues, but so do our public policies. For me, the perfect example is land use and housing regulation. With the best of intentions, government policies have made housing costs sky rocket. Meanwhile in places like Tokyo where I used to live, limited zoning laws and straightforward building codes has led to dirt cheap apartments, wonderful, walkable neighborhoods, and clean air. Where I live in California, we’re drowning in parking requirements and environmental reviews. Nothing gets built. Air is dirty, traffic is horrible, and you have to go everywhere by car.
Like you, I’m not at all opposed to government regulation or intervention. But the devil is in the details. Would a government enforced pay cap be better than the current system? I think the only honest answer is we don’t know. We need to be humble when approaching public policy, acknowledging that how we intend our policies to function is often quite different from their actual effects.
Fair question and I don't think there are easy answers to the problem. I think the actions you suggest tend to result in a market environment like Europe's where there are more regulations but businesses are generally less competitive than US businesses and wages tend to be lower than in the US.
I get that there's an argument for "if we make sure innovation can thrive and make sure people have a lot of resources to work with, we'll come up with lots of solutions to problems and people will be able to access them". But if that were true, wouldn't it be coming through in our societal outcomes? In life expectancy, or crime, or social stability, or a general feeling of peace and safety and security?
We lag Europe by five years in life expectancy, despite spending 2x as much on healthcare. We even spend more public money on healthcare, by far. We're in worse health while we're alive. Our life expectancy is ~the same as it was in 2001, in an age of medical miracles. Our homicide rate is close to the global average, and trailing many poor countries. We have the fifth-highest incarceration rate on Earth, many times higher than countries we think of as having terrifyingly oppressive governments, and on par with several of the world's worst dictatorships. Our citizens don't feel secure: that's one of the few things almost everyone in America agrees on, and part of why we're reaching a level of instability that hasn't been seen in a rich country in a long time.
That doesn't sound like a thriving country to me - certainly not given that we started as a superpower, have had 150 years of relative internal stability, are the beneficiaries of a global brain-drain in our favor for the entire postwar era, enjoy some of the world's richest natural resources, have tons of space to spread out, have friendly neighbors who haven't made war on us in a century, invented the stuff half the world runs on, operate the world's reserve currency, and have both literal and figurative mountains of capital.
We should be a shining utopia, the envy of planet Earth. But we aren't. How can that be if we're doing everything right, or even if we're closer to right than our contemporaries?
There are sooo many confounding factors that it's not even worth discussing.
The EU is a patchwork for 27+ small countries. There is no unique digital market. There are 27 languages to cater to. 27 different cultures which are radically different compared to say, Texas versus Maine. General risk adverse culture after WW1 and WW2 where there are no VCs, even though for sure they could make money and Europe is full of tax loopholes they could use...