Friday, August 19, 2011

Simple government (17 Aug 2011)

Mike Konczal wrote a critique of Mitt Romney's plan to convert unemployment insurance into something that more closely resembles a 401(k) -- the idea being that everyone should have the "freedom" to manage their own unemployment insurance in accordance to how they assess their own personal risk. Of course, as Konczal notes, it would also help erode the idea that government exists in part to provide a general social safety net and aggregate social risk efficiently in order to defray it -- conservative thinking is that individuals should bear all of life's risks themselves. The private-account gambit is one of the quintessential neoliberal policy moves, ostensibly ending government "interference" in the labor market by making sure workers are as insecure as possible.

Conservatives favor these sort of arrangements, Konczal suggests, because "people will look at private savings accounts and think that the government isn’t doing anything." This furthers their arguments for dismantling the services government provides to all straightforwardly while protecting the "submerged" benefits that the rich, savvy, and well connected are better positioned to exploit through knowing how to take advantage of tax loopholes -- a phenomenon explored in this American Prospect essay by Suzanne Mettler and elaborated here by Henry Farrell. It reminds me also of arguments Dean Baker makes in The Conservative Nanny State (pdf) and Jamie Galbraith makes in The Predator State (excerpt here). They argue that the rich have figured out the government exists to be looted, and the key political question is how to perpetuate and mask that process at the same time. One good way of doing that is through expanding the "submerged state" and generating policies that confront people with decisions that they are not sophisticated enough to make on their own and make them into more vulnerable prey. Private retirement accounts, for example, are far more lootable by financial advisors, etc., than the guaranteed-benefit pensions they have supplanted. (In the mean time, conservatives have succeeded in convincing many of us that our Social Security benefits are insecure and that the U.S. government is perfectly capable of simply reneging on its debts.)

If neoliberal reform is intended to let markets govern more and more of our everyday lives, then it's not surprising that the tactics of exploitation rife in market exchange -- things akin to price discrimination and exploiting asymmetrical information and implementing hidden fees through confusing contracts -- will also come into play. Markets are often good at incentivizing complexity, which produces the ignorance they need as an alibi. Cell-phone service providers, mortgage originators, used-car salespeople, the travel industry (hotels, rental cars, airlines) are the classic exemplars of these tactics, but they are endemic in a consumer economy whose firms frequently depend on stratifying customers to maximize profits. But when applied to the distribution of tax obligations and government services, these tactics become the legitimized means for reproducing and expanding existing disparities between classes while making it seem as though that is the fault of the disadvantaged -- it's their fault for being ignorant, too "lazy" to master the tax code, or to drive hard bargains of their own.

In his response to Konzal's post, Corey Robin notes the needless complexity of the arrangement, "all the time and energy we as individuals now have to devote to doing the things that the state used to do for us" thanks to neoliberalism and privatization. Robin adds, "The right thinks of that as freedom—they hear the words 'state is doing for you' and they imagine patients etherized on a table—but I think of it as tyranny." Peter Frase concurs in this response, pointing out that "in a highly unequal society, greater complexity in the institutions of the state will generally favor the interests of the rich." He concludes that "the right has gotten a lot of mileage of out of the demand for small government. Maybe it’s time for the left to make a bigger deal out of simple government." That seems like a pretty good idea to me, though the logic may lead to supporting policies like the flat tax. Also, our tendency to overrate our pleasure in making decisions for ourselves (and underestimate the problem of ego depletion) makes us vulnerable to believing that it is generally simpler for us to do things ourselves and assume total responsibility for them. The celebration of individualism in American society is such that there is already ideological momentum behind the idea that self-managing everything is somehow always convenient, even in the face of frustrating experiences to the contrary, which are seen as isolated exceptions.

No comments:

Post a Comment