Benjamin Studebaker

Yet Another Attempt to Make the World a Better Place by Writing Things

Tag: Capitalism

The Ungoverned Globe

I have a new piece out at Aeon on the liberal international order, its inadequacies, and the difficulties with replacing it. You can read it here:

Why Federal Stimulus is Always Too Small

We never seem to learn anything. The global economic crisis of 2008 should have taught us a lot about how governments cope with major economic shocks, but the level of analysis in 2020 has been abysmal. The Great Recession reduced US economic output by 4.2% and destroyed 8.7 million jobs. To counteract the loses, the federal government injected stimulus, first through the Bush administration’s Troubled Asset Relief Program (TARP), and then through the Obama administration’s American Recovery and Reinvestment Act. Combined, these two programs provided about $1.2 trillion. That’s about $285 billion per percentage of point of GDP. It wasn’t enough. The economy recovered very slowly, too slowly for the Obama administration to maintain public support. The Democrats lost the House decisively in 2010. Obama tried to get an additional $447 billion in 2011, but the Republicans had no interest in it. Instead, they pushed for deficit reduction. Obama tried to play nice with them, signing the Budget Control Act in August and making one last push for more stimulus in the Fall. They took his cookies. The second stimulus never happened. As the years went by, rural America continued to lose jobs, and grew more and more resentful, setting the stage for Donald Trump in 2016.

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Coronavirus and the Fable of the Bees

Coronavirus puts elected governments in a sticky situation. If they appear to fail to solve the public health crisis, they will lose the next election. If, in the process of solving the public health crisis, they create an economic crisis, they will also lose the next election. They’re stuck between a rock and a hard place. It all reminds me of Bernard Mandeville’s “Fable of the Bees”. Mandeville’s bees live luxurious, decadent lives, and their drive for ever greater pleasures pushes them to build an extraordinarily elaborate economy to keep up with their excesses. One day, a divine intervention rids the bees of their vices, leaving them full of modesty and virtue. But this collapses demand and destroys the bees’ economy, annihilating their living standards. The fable serves to highlight one of the paradoxes of capitalism–the welfare of the poor becomes dependent on the vices of the rich. If the rich stop spending money on frivolous nonsense, the poor lose their jobs and go hungry.

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A Platonist Critique of Rawls

One of the things that has always bothered me about Rawlsian liberalism is its emphasis on consensus. The Rawlsians want a state which ‘all reasonable people can accept’ or which ‘no reasonable person can reject’. To accomplish this consensus, Rawlsians have to hollow out the good until it contains only uncontroversial values. Controversial principles are not, by definition, accepted by all reasonable people. The Rawlsians therefore have a tendency to depoliticise the controversial. This results in a political theory which is committed to conflict avoidance. Families that avoid conflict tend to have conflict blow up in their faces, and the same is true for states.

But beyond this, Rawlsian liberalism produces a state which is based on lowest common denominators. This is where Plato comes in.

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Cotton is Not What Made the United States Rich

Lately, everyone is arguing that the United States got rich off of cotton. The New York Times recently put out a story arguing that American capitalism “begins on the plantation”. This completely misunderstands the relationship between slave and serf-based agriculture and industrial capitalism. A dominant agricultural industry is not the foundation for industrial success–it is an impediment. Let me show you why…

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