Land, Labor, Capital, and Desperation
“The Economy thrives on incentives (if you work, we’ll give you money) and desperation (if you want money, you have to work) and Social Security is a double-wammy, reducing the incentives of workers and reducing the desperation of the elderly.” Matthew Yglesias
Matthew Yglesias likes his grandparents the old fashioned way, hungry and “desperate”. Well he doesn’t necessarily want it himself, but he can understand why the “Important People” of the world would want it. Mr. Yglesias has done the world a great favor. The ignorance involved in such a statement is so complete that I hope there is a portion of Jonathon Swift in his musings, but I fear not. And even if they are not the sincere beliefs of Matthew Yglesias, they are beliefs that are held by many and they poison the discussion over the economy and how it works.
Perhaps the greatest error in modern economic “wisdom” is that a structure of incentives has anything in common with the desperation of poverty. Yglesias claims that making the elderly desperate enough to keep working will make the economy thrive.
The crux of his thesis is concentrated in the statement “if you work we’ll give you money”. Mr. Iglesias’s use of the royal We determines the source of incentives, and it is not the function of the market, it is the ownership thereof. That tells almost all there is to tell about this argument, but he goes further. “If you want money, you have to work”. I wonder if anyone has informed Tagg Romney, or for that matter Barack Obama, or the incredibly busy Mr. Yglesias.
Mr. Yglesias does not stop with the royal We, he speaks for the disembodied entity that he calls “The Economy”. He goes so far as to tell us what “The Economy” wants. “The Economy” has a real hankering for things which he can classify as investments. “The Economy” wants to prepare itself for the future and any spending which prepares for this future is good. And letting a bunch of old people sit around does not prepare us for the future. That spending is best left to the “productive” people of society. “The Economy” likes those people because they get us ready for the future. Every dime Tagg Romney spends is an investment according to Mr. Yglesias.
If his tongue was not in his cheek Mr. Yglesias is on the same page as Mr. Romney and Mr. Obama and all the other Important People of the world. While Mr. Obama may, and this is highly doubtful at this point, support slightly higher transfer payments to America’s seniors, it is his “stewardship” and “nobles oblige” that spur his actions. Nowhere in main stream American thought is the belief that seniors, or for that matter juniors, receive money from the public purse as a matter of property right and not deference.
The payment of public money to old and young is in no way contrary to a system of incentives that rewards diligence, hard word, and creativity. Quite the contrary, a society which cares for its old and young is one that fosters the type of society that is efficient and productive and competitive. “The Economy” does not reward hard work and punish sloth. “The Economy” rewards power, influence, and ownership. The major portion of the produce of our economy goes to Crooked Bankers, the Saudi Royal Family and their junior partners in Texas, the Rigged Casino known as Wall Street, the Communist Party of China, a Courtier Press, and a Political Class that is as corrupt as the world has ever seen. This might make it seem that we need to foster desperation, but the opposite is true. The only thing that desperation produces in the economy is more desperation, and the owners of the world count on it.
There might be some people in this modern world who could use a dose of desperation Mr. Yglesias, but you should let your grandparents have enough money to give a cookie to your cousins once in a while. Who knows, you might even get one. If you’re not too worried it will corrupt you.