Yglesias Calls for Socialism

In a post embracing Keynesian policies, socialism, the Lump of Labor Fallacy, and the Broken Window Fallacy, Matt writes:

Under those circumstances, I would say the answer is socialism -- have the government capture a larger share of the GDP and use that wealth to employ people. The obvious candidates here would be the hardy liberal perennials of health care and education -- sectors which, not coincidentally, are largely immune to our technology-driven productivity growth. My other proposal would be to spend more on infrastructure. Infrastructure in this country is all crappy -- if you go outside a gated community or major business district where the private sector is (at least partially) financing basic things like keeping the streets clean and non-broken and trimming the goddamn tree branches, everything is all messed up.

Is there a reason that health care, education, and the streets are in such bad shape? Is there a reason why these sectors are "immune to our technology-driven productivity growth"?

Then perhaps the cure is worse than the disease. Or rather, perhaps the cure is the disease.

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Check out the post I did

Check out the post I did about this over at my site. I pasted a piece of the exact quote that you have. It seems like he admits that government stuff is crappy, yet his solution is more government. Weird.

I've always thought that the whole Y2K fiasco wound up being a positive for our economy. I've read that the sense of emergency forced the testing and integration of new styles of crisis management and resolution. Do you think this is the BW Fallacy? It seems like it isn't, because I can't think of another reason that is better which would have evolved our skills in the same way.

This guy is just out in left

This guy is just out in left field.
Since when are health care and education "immune to technology-driven productivity growth"? Has this man BEEN in a hospital or university in the last 20 years?

It's interesting that, for

It's interesting that, for over a hundred years, "socialism" has automatically been identified at the very least with collectivism, and usually with state ownership and control as well.

But the "socialized" sectors, infrastructure and education, are the two sectors of the economy most intimately associated with state capitalism. Government, in its essence, is a machine for externalizing costs in the interests of a privileged class. Infrastructure and education are two factors that the centralized and skill-intensive state capitalist economy rely most heavily on; and it relies on them on a scale that simply wouldn't pay if it had to internalize all the costs of providing them. It's not coincidental that these two sectors, in which costs and benefits are most radically dissociated by the state, are also the most squalid. It is because there is no properly functioning price mechanism to tie price to cost, and inform the consumer of factors the real cost of providing them, that corporate economic actors have no incentive either to rationally budget their consumption of transportation and education, or to pay the price for them sufficient to keep them going on a sustainable basis.

The free market strain of "socialism" from which I come, on the other hand--that of Hodgskin, Tucker, and Oppenheimer--teaches that perfect socialism is approached to the extent that the market is free, and all effects of a market actor's decisions are fully internalized. It is only because of the state's intervention to shift the costs of some peoples' decisions to be borne by others, that one class lives at another's expense. It is only to the extent that the free market is distorted by state intervention (what both the state socialists and state capitalists call "socialism") that it becomes capitalistic.

Yes, but the "privileged

Yes, but the "privileged class'" childen don't use public education by and large. They go to private schools and private, Ivy-league schools or the equivalent.

All state ownership, whether it be ostensibly for state socialism or state capitalism, yields the same result- concentration of wealth and resources in the hands of and for the use of those who are politically connected. So it's a distinction without a difference to say that it's "state capitalism" and say that's the problem.

If you cut out education from your example, it would work, but the costs of education (in general, as opposed to strictly speaking, publicly provided primary education) are pretty much felt by most actors, so rational planning and connection to cost is calculated by corporations and most individuals alike.

I object to the very term

I object to the very term "state capitalism" as a fundamental contradiction. Capitalism is the economic system that emerges under a political system of private property and free assocation/trade, and it exists largely to the extent that the state does not. A system where industry and government are symbiotic is therefore not capitalism. In fact, we already have a name for what is erroneously being called "state capitalism": FASCISM.

The reason this is important (and not just nitpicking) is that criticisms of "state capitalism" always subtly indict real capitalism as well, and imply the superiority of some alternative system (Aside: referring to the definition above, any alternative to capitalism necessarily is incompatible with private property, free association/trade, or both.). But such criticisms miss their mark, as what is being indicted is not capitalism at all, but fascism/socialism.