Now the way of bailing out can be discussed.
As to the public pensions being about equality and private schemes about amplifying inequalities, this is one more piece of ideology. Public pensions also are function of the contribution, more or less. And inequalities are not necessarily bad or injust. Like for instance, one blogger who would be really good at unwinding the complicate threads of a disingenuous blogger's ideologically inspired arguments would likely be worth a (even if just slightly, to make the point) better pension than someone who's just giving up out of sheer brain overheating :) Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
I precisely talked about a strictly regulated market, parallel to the public system, and regulated so that to ensure people have a pension when they retire.
And I pointed out that there is no good reason to have such a market: If it is sufficiently regulated to be morally entitled to bailouts, then it is in all reasonably estimation sufficiently regulated that competition does not add more value than it removes through the need for multiple separate entities (all of which cost overhead). So, roll the entire thing into a public system.
Public pensions also are function of the contribution, more or less.
That depends on how you design them.
And inequalities are not necessarily bad or injust. Like for instance, one blogger who would be really good at unwinding the complicate threads of a disingenuous blogger's ideologically inspired arguments would likely be worth a (even if just slightly, to make the point) better pension than someone who's just giving up out of sheer brain overheating
That is a statement of ideology. I subscribe to a different ideology from yours. Since you have often stated an unwillingness to engage in discussion of the principles and logic of your ideology, it would appear that we have reached an impasse and will have to agree to disagree.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
No, that's an attempt to humour. Call it lame if you please, but not ideological. And even if my "penchants" may be obvious :) I always try to argue from an ideologically free point - or else you'll have to show where exactly that is not the case. For the moment I note that you see strict regulation as amounting to public monopoly. So by this logic, things should be, either fully freemarket, in the neolib sense, or 100% state monopoly. Interesting. I imagine the former are to be mercilessly fought, and the latter the ideal mankind should aspire to. Hmm. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
I always try to argue from an ideologically free point - or else you'll have to show where exactly that is not the case.
It is a statement of ideology to say that the pension system should be used to reward and punish people for their past behaviour. It is part of a logical structure around a narrative that the purpose of public transfers should be used to create incentives for people. Ergo, an ideology. A rather small and limited ideology, but an ideology never the less.
It is equally possible to craft a narrative that the purpose of public transfers is to ensure that every member of society is able to sustain a reasonable material standard of living. In that ideology, using pensions to reward and punish past behaviour is either immoral or ineffective, because you cannot ethically push any member of society below a certain respectable livelihood.
One of these positions can be no less ideological than the other. Both have a unifying narrative and provide guidelines and logical structure to approach public policy. So if one is ideological, then the other is as well.
But I won't object to the creation of a minimum guaranteed for pensions like is the case for salaries. Note that I say minimum, or decent, and not reasonable, or respectable, which are much more prone to interpretation. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
It is tiresome to keep hearing you pretend that the system of values you subscribe to is simply pragmatic common sense, whereas all other systems of values are evil ideologies.
And as an aside, decent and livable state pensions are perfectly doable. It worked fine for Scandinavia for the better part of a century.
Then selfish fuckers like Sarko and Bliar came along and smashed it.
Greetings from Idiot America:
The rise of Idiot America is essentially a war on expertise. [...] In the place of expertise, we have elevated the Gut, and the Gut is a moron, as anyone who has ever tossed a golf club, punched a wall, or kicked an errant lawn mower knows. We occasionally dress up the Gut by calling it "common sense." The president's former advisor on medical ethics regularly refers to the "yuck factor." The Gut is common. It is democratic. It is the roiling repository of dark and ancient fears. Worst of all, the Gut is faith-based.
[...]
In the place of expertise, we have elevated the Gut, and the Gut is a moron, as anyone who has ever tossed a golf club, punched a wall, or kicked an errant lawn mower knows. We occasionally dress up the Gut by calling it "common sense." The president's former advisor on medical ethics regularly refers to the "yuck factor." The Gut is common. It is democratic. It is the roiling repository of dark and ancient fears. Worst of all, the Gut is faith-based.
They were quite up-front about their agenda being to construct a school of philosophy based on natural law. The term "ideology" was not in use at the time, but that's substantially what they were doing: Attempting to construct an ideology from first principles.
Talk about getting more people to contribute on ET. If it is to fall prey to someone hijacking threads, twisting words, and insulting people for having being called an ideologist, I fail to see the fun in it. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
I never said "fair" or "pragmatic" would be a matter of common sense. I said that income must be a fair consequence of added value. This is logical and constitutes an argument.
But income is not, as the political economy is currently configured, a fair consequence of added value. So you are making an assumption contrary to fact.
I called it pragmatic as opposed to giving "respectable" pensions to anyone, no matter their work history, because the cost for the society seems to me to be huge. [My emphasis]
And that's where the gut comes into the picture. You could have researched this point. You could have found actual facts and figures. Those figures would have shown you that paying out even very respectable pensions does not impose an unbearably huge cost to society.
Instead, you allowed your gedankeneksperiment to contradict the results of a widely accepted real experiment. That could be called a lot of things, but "enlightened" isn't one of them.
Respectable public pensions do not cause fiscal crises. There are no military threats to the safety and prosperity of the people of Europe and North America. The cost of running a private clearing system - when you include the inevitable ransom money - far exceeds any reasonable estimate of the cost of running a public clearing system.
All of these are quite factual matters of public record. No amount of "pragmatism" or "rationality" can change this: You are entitled to your own opinion, not to your own facts.
I don't subscribe to any particular system of values, and I didn't say your "ideology" is evil. What interests, motivates me is truth, fairness and justice. I believe there exist fair inequalities and unfair ones, like I said before. I often spoke against the libertarian ideology behind neoliberalism (it is wrong done to the classical liberalism to call it that way, though). I also warned that the same principles are applied in many other places with the same narrowmindedness and lack of reason. So I would really appreciate it if you didn't stick wrong labels on my forehead just because I did stick some true ones on yours :)
As to Scandinavia, many things work in 4 million people countries that don't in Germany or France. These two countries are actually a better study case than most might think. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
What I call nanny state is rewarding someone undeservedly. No doubt you'll ask me how much is "deserved" and who decides that.
Precisely.
You can of course relativize anything,
Relativise? That is not a matter of relativising. It is a straightforward political question. Hayek thought that "fair" meant that the state did not interfere in anything at all, except to protect property rights. Roosevelt thought it "fair" to ensure that nobody suffers starvation, at least.
You keep saying "fair" as if "fairness" were a physical property of a system. It is not - it is an ideological construct that you have to justify.
I don't subscribe to any particular system of values,
Ah, but you do. You use the term "fair," which is a statement of value. And you use it with tolerable consistency. So obviously, you do subscribe to a system of values. That you refuse to examine that system consciously is neither here nor there.
and I didn't say your "ideology" is evil. What interests, motivates me is truth, fairness and justice.
And with the exception of certain kinds of truth - mostly, but not exclusively, originating in the natural sciences - all three are subject to political and ideological debate.
As to Scandinavia, many things work in 4 million people countries that don't in Germany or France. These two countries are actually a better study case than most might think.
That would be 25 million people, if you include Finland.
Concerning the word "fair", as well as other key words used by "pundits" to "predict" people's political reactions and interests. This is part of a bigger debate that would well deserve a diary in itself: the issue of the political correctness. If there is something I profoundly dislike, that must be it. When I speak of fair, I resent the word being given ideological value, and me along with it, be that in the direction of Hayek, or in that of Roosevelt. When I speak of "liberal", I mean classical liberalism, and I resent the way that term is understood in both France and the US today (the fact that the two variations are exactly opposite is quite nice proof that I am right on this :) ). When I speak of utilitarian, I don't necessarily mean the political current. In general I tend to be interested and stick to the dictionary "value" of a word, and I assure you that is not all due to being someone for whom all languages around are foreign languages. I find it hard to accept that you did not detect the sense the word "fair" bore in my posts, and if analysing all the possible political ramifications might be confusing, you can see it as "function of the contribution". The best solution for pensions could be made up by a safety (and I mean safety) cushion provided by the state, the same for all, even those who from various reasons didn't work enough - or at all; a bigger part determined by every one's mandatory personal contribution to the pension system; an optional part made up by contribution to strictly regulated (as in non speculative, highly secure) private pension systems. Free at last! Free at last! Thank God Almighty, we are free at last! (Martin Luther King)
Well the signification of "deserved" could be determined by negotiation - peaceful negotiation, not necessarily from enemy positions, but like between parties with different interests.
That is all well and fine, but a moment ago you were simply asserting a certain definition of "deserve," when you said that flat-rate pensions are "nanny-statist" because they are giving somebody rewards that he does not "deserve."
You explicitly refused to enter into a discussion - a negotiation, if you will - of what the term "deserve" means in this context, calling such a discussion "relativising."
When I speak of fair, I resent the word being given ideological value,
In other words, your sense of fairness is derived from the Gut. That's one way of doing it, but it's not a very convincing one.
When I speak of "liberal", I mean classical liberalism, and I resent the way that term is understood in both France and the US today
Noted.
I find it hard to accept that you did not detect the sense the word "fair" bore in my posts, and if analysing all the possible political ramifications might be confusing, you can see it as "function of the contribution".
Contribution in what units? Currently, contribution is defined in units of money. But since remuneration is hardly proportional to contribution - by whichever reasonable metric you can apply, be it value added or sweat, blood and tears expended - the monetary "contribution" is meaningless, except as an indicator of who is politically favoured in society.
The best solution for pensions could be made up by a safety (and I mean safety) cushion provided by the state, the same for all, even those who from various reasons didn't work enough - or at all; a bigger part determined by every one's mandatory personal contribution to the pension system; an optional part made up by contribution to strictly regulated (as in non speculative, highly secure) private pension systems.
Why should a worker at a steel mill who spends seven hours a day, five days a week, forty-seven weeks a year, for forty years making steel get less payout in pension than a stock broker who sits in an air-conditioned office and issues call loans to speculators? The latter is paid much more than the former, despite producing a service of rather disputable value, with rather less physical exertion.
How is that fair?
fair, in what regards pensions, is proportional with the contributions, and you didn't make a case for the contrary.
Oh, but I did: The contribution is measured in a most unfair way. It is like saying that the "fair" criterion for who wins the marathon is "who is first across the finish" - when one dude just ran once around the nearest block, and the other dude ran the whole route.
Now, if you want to argue that it would break the French economy, due to some peculiarity in the French system (or culture) that creates conflicts not present in Scandinavian countries, then I'll leave you to hash that out with Jerome and Cyrille, because I don't know enough about France to pass (informed) comment.
But that is not the case you were making.
one might wonder as to the incentive people would have to work and provide for their own subsistence and the society as a whole.
One might, indeed.
Until, that is, one remembers that in order to cash in on a pension, people have to actually survive to retirement age.
There can be people that can deserve a bigger pension than the state level and I don't feel like denying them the right.
If people wish to save more for their retirement, nothing prevents them from buying German sovereign debt (what they should not be entitled to is a fifty percent tax break for doing so, but that's another story...).
If they buy anything more risky than that, however, they should not come crying for a handout when it blows up in their face.
I prefer to call it rational and pragmatic :)
Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.
-John Maynard Keynes. Peak oil is not an energy crisis. It is a liquid fuel crisis.
I'm not sure whether pension funds are exactly "private investment funds".
Bailing out the pension funds includes bailouts for the money managers who fucked up.
Increasing the public pensions for everybody bails out the pensioners whose funds those money managers pissed away.
Private pension funds are a stupid idea anyway. They create a number of very large market players who are subject to virtually no oversight, they channel money into equities, which causes inflation, and they are big, fat targets for scammers.
Oh, and they add unnecessary overhead.
Just pay out a fixed amount per month to every retiree. Much lower administrative overhead, no inflationary effects on the stock markets, perfect transparency and no need to bail out pension funds that have been scammed. If you personally want to set aside more money for your old age, then that's your lookout, and you should not expect to get bailed out when the hedge fund you put it in blows up.
