Communism by stealth, or ‘Corporate-Capitalist Welfare by design’?

PartisanZ saved me the trouble of stating this topic:


Matthew Hooton: ‘Communism by stealth’ is here – NZHerald

“Infamously, Key then entrenched Working for Families as Prime Minister, and Ardern and Robertson have further locked in middle-class dependency with their December 2017 Families Package.

In fact in 2004, the left-wing critique of Working for Families was stronger than Key’s, that it would operate as a subsidy of low-paying employers.

That is, using Key’s original numbers, if there was a job to do worth $60,000 a year, an employer could hire someone with two kids, pay them just $38,000 a year, and they’d end up with almost the same pay in the hand.”

It’s an interesting and convoluted argument, demonstrating, IMHO, that we are no longer involved in a Left-vs-Right contest but merely exist on a neoliberalism continuum where the challenge is how to make the failed economic paradigm ‘appear’ to be working …

It’s not really about an actual economic paradigm. It’s about the ‘semblance’ of an economic paradigm. About trying to prove the mirage is the reality. I believe we need to find a coherent, comprehensible name for this phenomenon because it affects us all, whether we want a UBI or vehemently oppose it.

‘Simuliberalism’* perhaps? The similitude or simulation of neoliberalism?

“And don’t expect National to be able to do anything about it. With the financial status of so many working families now as locked in to welfare as any other beneficiary, abolishing Working for Families is becoming ever-more politically impossible.

It has transferred the primary economic relationship that determines family income from being that with the employer to that with the state. It is indeed communism by stealth. Clark and Cullen knew exactly what they doing when they set it up.”

Whatever it is, it certainly IS NOT communism … since the means of production aren’t owned by the State on behalf of its citizens … they remain largely in private hands pushing wealth upwards towards the very few … and this means it CANNOT BE communism by stealth.

Corporate-Capitalist Welfare by design more likely … Simuliberalism?

 

Leave a comment

58 Comments

  1. Gezza

     /  July 19, 2018

    Labels have become so meaningless – and in many cases so counter-factual – think ‘liberal’ & ‘progressive’; they have been perverted into almost the complete opposite of what they really mean.

    Communism by stealth it’s not, but maybe socialism by stealth. I think it’s actually a good article by Hooton.

    Reply
  2. PDB

     /  July 19, 2018

    As usual the real story goes over PZ’s head…

    Working for Families was simply a massive Labour election bribe with negative long term effects & John Key (or anyone for that matter) was/is unable to remove it as turkeys don’t vote for an early xmas. In some ways it was no different to Helen’s ‘pledge card’ rort – a large advertisement for Labour paid for by the taxpayer.

    Hooton is correct – the welfare state is a large part of the socialist component of our mixed economy and this current govt has shown it still has capacity to be grown into a much bigger, hungrier monster.

    Reply
    • Gezza

       /  July 19, 2018

      Working for Families was simply a massive Labour election bribe with negative long term effects & John Key (or anyone for that matter) was/is unable to remove it as turkeys don’t vote for an early xmas. In some ways it was no different to Helen’s ‘pledge card’ rort – a large advertisement for Labour paid for by the taxpayer.

      I think that’s too simplistically negative an interpretation, PDB. I can see the sense in the original idea as a way of responding to the economic & social disruption & dislocations caused the neoliberal ‘suck it and see’ revolution (or coups) of the Douglas & Richardson administrations.

      Trickle-down didn’t happen to anything like the degree touted, & the population, business, government departments, homeowners, employers, & employees weren’t remotely prepared for it, or for the ill effects such a massive restructuring of the economy would have – many of which we are still experiencing.

      This was an acceptable way of trying to level out the economic disparities & distotions it created. It was a pragmatic solution to the downside of the deregulation of labour & business that caused job losses & relative income / purchasing power loss to big chunks of society to the enormous benefit of a select few. The fact it worked to minimise these ill-effects is why Key continued it, in my view.

      Hooton quite adroitly analyses its shortcomings, though without it, I think we’d have had worse problems.

      Reply
      • Gezza

         /  July 19, 2018

        *distortions

        Reply
      • PartisanZ

         /  July 20, 2018

        @Gezza – ” … though without it, I think we’d have had worse problems.”

        That’s it in a nutshell Gezza … and, IMHO, it’s the “worse problems” that really need addressing …

        They sit there like an infection below the scab, resulting in a wound that never heals …

        Reply
        • Gezza

           /  July 20, 2018

          Worth an uptick? 😉

          Reply
        • PartisanZ

           /  July 20, 2018

          “Communism by stealth” is the sensationalist headline on this fine piece of journalism … No truly fine piece of journalism really requires a sensationalist headline …

          Reply
          • Gezza

             /  July 20, 2018

            That’s not actually a sensationalist headline. It summarises what the author says in his piece, which itself reminds us what a silly claim it was when Key made it. But how it probably resonated with the dumbasses. It’s just an eye-catching headline. And it caught your eye, so it did its job.

            Reply
            • High Flying Duck

               /  July 20, 2018

              It was hyperbole no doubt, but it captured the essence of the policy perfectly.
              Definitely not silly to make the comment – but bloody stupid to then double down on the policy having said it.

  3. Alloytoo

     /  July 19, 2018

    The solution to WFF. Is simple, scrap it, instead grant applicants a tax rebate on the same basis.

    Reply
    • Gezza

       /  July 19, 2018

      No use to the chronically paid.

      Reply
    • Gezza

       /  July 19, 2018

      No use to the chronically low paid.

      Reply
      • PartisanZ

         /  July 20, 2018

        Nor to the relatively illiterate, culturally different (in some cases), incurably proud and/or abidingly bureauphobic* … unless every workplace has some kind of ‘Entitlement Advisory Centre’ …

        Reply
  4. Blazer

     /  July 20, 2018

    Always toss the word ‘communism’ into the narrative.
    Even in this day and age where even China isn’t ‘Communist’ anymore ,the label still arouses emotional and irrational response.

    Reply
    • PartisanZ

       /  July 20, 2018

      Yes, Totalitarian Command Capitalism is a much better description …

      It was of the Soviet Union too …

      Reply
  5. High Flying Duck

     /  July 20, 2018

    Far better to let Government do what they do and tax people the minimum required to achieve it.

    Get rid of WFF, but make education actually free, make doctors and dentist visits free. Take away the state costs on bringing up children.

    If welfare is required, use ACTUAL welfare – housing supplements and benefits for those unable to work.

    The difficulty is, as Cullen / Clark knew so well, once these things are entrenched it is nigh on impossible to reverse – only to tinker with threshholds and abatements.

    The Hooten column shows clearly the perverse outcomes of government intervention in free enterprise – reduced capital investment and subsidised labour, which lead to low productivity and wages.

    Reply
    • Blazer

       /  July 20, 2018

      some sound observations there…but..

      ‘The Hooten column shows clearly the perverse outcomes of government intervention in free enterprise – reduced capital investment and subsidised labour, which lead to low productivity and wages.’
      Private enterprise actively lobbies for intervention.
      Blaming the Govt for low productivity and wages is …ludicrous.

      Reply
      • Alan Wilkinson

         /  July 20, 2018

        Nonsense. Govt policy, regulation and administration everywhere controls productivity and wages.

        Reply
        • Blazer

           /  July 20, 2018

          so you have a private business…what controls does Govt put on you increasing wages and productivity?

          Reply
          • Alan Wilkinson

             /  July 20, 2018

            Are you serious? The Govt churns out 2600 pages of laws and regulations every year. Answering that question fully would take thousands of pages. As a simple example, income and company tax are a direct constraint on capital investment.

            Reply
            • Blazer

               /  July 20, 2018

              are you serious?
              -‘income and company tax are a direct constraint on capital investment.’!!

            • Alan Wilkinson

               /  July 20, 2018

              If you don’t understand that no-one can help you, B.

          • High Flying Duck

             /  July 20, 2018

            There are vast swathes of regulation to deal with, and the ones around employing staff are the most onerous and costly.
            Many are necessary, but state intervention in how a business is run adds cost and reduces productivity.
            The cost of WFF has to be borne somewhere and that place is taxation, which reduces the funds available to invest in productive enterprise.

            Reply
            • Blazer

               /  July 20, 2018

              these regulations prevent more ..PROFIT is the translation you are looking for.
              The regulation of preventing bosses from sticking children up chimneys definately impacted on..profitability.

            • High Flying Duck

               /  July 20, 2018

              If you can find a way to invest and grow without profits, all power to you.
              I didn’t say all regulation was bad – but it has consequences and there should be as little as possible to ensure safe workplaces and contractual enforcement.

          • High Flying Duck

             /  July 20, 2018

            Some empirical evidence –

            “In addition to the strong, positive relationship between regulatory freedom (ease of doing business score) and prosperity (GDP per capita), deregulation yields increasing returns. That is, each incremental increase in the DB score yields larger and larger gains in GDP per capita. In short, with each improvement in the DB score, there is a more-than-proportionate improvement in prosperity. This explains why post-communist countries that embraced Big Bang economic liberalizations, like Poland, have done so much better than the gradualists. The Big Bangers literally got more for their buck.”

            https://www.forbes.com/sites/stevehanke/2017/09/12/slash-government-regulations-cut-red-tape-and-prosper/#65c1a79b2c3d

            Reply
  6. Alan Wilkinson

     /  July 20, 2018

    I thought it was an excellent column by Hooton. I also initially thought the reference to communism inaccurate but have reconsidered that. The essential notion of communism is to pay everyone according to their needs rather than their contributions and this is exactly what WFF does and it has the exact destructive consequences of doing so.

    Reply
    • Gezza

       /  July 20, 2018

      Flawed though it has proven to be long term, I don’t think communism ever envisaged paying people for doing nothing. It envisaged a functioning society everybody who worked in whatever job in it was contributing labour of equal utility & value to the well-being of an entire society. I dunno what a linesman’s job pays, or anyone working in the power supply & distribution system is – but when the power goes out the real value of whoever gets it bsck up again is pretty quickly obvious. It’s sad in some ways that it can never work because the same greed & hunger for power that make capitalism work so well for those at the top ends up perverting it.

      Reply
      • Alan Wilkinson

         /  July 20, 2018

        https://en.m.wikipedia.org/wiki/From_each_according_to_his_ability,_to_each_according_to_his_needs

        Ability declines rapidly in the face of freeloading and negative incentives.

        Or as the old Soviet adage went: “We pretend to work and the Government pretends to pay us”.

        Reply
        • Gezza

           /  July 20, 2018

          Its greed and corruption leading to incompetence at the top that kills it. The Idea that everybody who works has intrinsically the same value to society as a whole is still morally valid.

          Reply
          • Alan Wilkinson

             /  July 20, 2018

            No, it’s fantasy – evolution disproves it. And there is no support for a moral distinction between those who work and those who don’t.

            Reply
            • Gezza

               /  July 20, 2018

              It’s not fantasy. And your objection to the idea is ideological.
              I don’t care two hoots for your contention there’s no support for a moral distinction between those who work & those who don’t. It’s a simple human fact that people who work for a living resent keeping those who voluntarily don’t for no other reason than they can’t be arsed. Even in the most simple caring sharing village or family based societies, if you’re able to but not contributing your labour or skills toward keeping yourself and family or or your community, you’ll starve.

            • Alan Wilkinson

               /  July 20, 2018

              Wrong. Families looked after their sick and elderly.

            • Gezza

               /  July 20, 2018

              Read what I wrote again. Intelligently this time. Interpret the last sentence in the context of the one before it.

            • Gezza

               /  July 20, 2018

              I’ll say. You should have been born a computer.

          • High Flying Duck

             /  July 20, 2018

            Everyone who works has equal value, but there is no question that what they do does not have the same value.
            Doing a job that millions of other could step into is simply not comparable to a job that takes special skills and ability and years of training.
            A job that requires 24/7 thought is not equivalent to a punch the clock and forget about it until morning endeavour.
            A brain surgeon is not equal to a receptionist.
            Capitalism is far from perfect in determining these values – for example entertainers get disproportionate value (based on the correct principle of rarity, but not in terms of value to society). Also some essential jobs priced by the state are not in keeping with true worth.
            But to suggest all are equal no matter what leads to a race to doing the least possible work to get your dues.

            Reply
            • Gezza

               /  July 20, 2018

              I’m not talking about their *economic* value in terms of how little you personally want to pay to get someone to work for you. Your brain sugeon’s stuffed if his hospital ward & operating theatre’s dirty. If he didn’t have a receptionist, or his receptionist was hopeless, his skills would be poorly employed.

            • Blazer

               /  July 20, 2018

              A fatal flaw…’Capitalism is far from perfect in determining these values ‘

              Capitalism these days has many shades and claims the credit for much that it has no direct bearing on,when it comes to talent and progress.

              Neither Capitalism or Socialism is a black or white position .Communism doesn’t exist.

            • High Flying Duck

               /  July 20, 2018

              I think I’m missing some nuance here Gezza. Everybody has the same intrinsic value in capitalist and in socialist societies (although some are more equal than others…)
              In terms of what people contribute, yes everyone plays a part. But if the brain surgeon is incapacitated the patient dies. If the cleaner isn’t there, they get another cleaner. And if there is no incentive over and above any other calling to put in the huge amount of time and resource to become a surgeon, why would you bother?

              Blazer, it is not a fatal flaw – just a flaw. There is constant movement and correction of these things to find equilibrium. And it remains the best system, imperfect though it is, to run a society. It is certainly less flawed than any other system.

              The key is finding the right level of regulation and enforcement to ensure a level playing field. Bastards and charlatans exist, no matter the system, and they will always find a way to break rules or skew the playing field. You cannot judge the system on these people – except in the case of communism where there is no mechanism to rid them once they gain power..

            • Gezza

               /  July 20, 2018

              I think I’m missing some nuance here Gezza.

              In terms of what people contribute, yes everyone plays a part. But if the brain surgeon is incapacitated the patient dies. If the cleaner isn’t there, they get another cleaner. And if there is no incentive over and above any other calling to put in the huge amount of time and resource to become a surgeon, why would you bother?

              You are. I’m not mounting an argument, personally, that any surgeon can be a cleaner & vice versa. There is no question that everybody can & should be a surgeon or we’d all be surgeons. All I am pointing out is that NOT LOOKED AT FROM A STRICTLY CAPTALIST ECONOMIC PERSPECTIVE every job people do has some benefit, from the moral dimension that they are doing something good, something beneficial to themselves & their society.

              Someone studying to be a surgeon who isn’t funded by mum & dad & has to take out a loan to cover the massive costs of their training obviously is going to want to charge an arm and a leg (excuse the pun) as soon as they can to repay it. And thereafter they are going to continue to richly rewaded because their highly specialised knowledge & skills are in short supply. A few have a mind to give some of their time & skills free but I imagine most of them just reap the rich rewards of the demand for their work, & the risks are incredibly high in the sense that mistakes can cost lives or cause harm, so I don’t mind.

              But what I don’t like is a system which sees the earnings of people who work the same hours in whatever jobs competed down by price to the lowest income wage possible, to the point where their standard of living falls below a socially accepted minimum & they end up socially disadvantaged.

            • High Flying Duck

               /  July 20, 2018

              Aaah. I wasn’t missing anything – I just disagree.
              People have a responsibility to better themselves and be the most they can be. Rewards come to those who apply themselves and gain skills that lift them above the baseline.
              If they choose not to improve themselves, then they will absolutely struggle.
              But people need to decide whether to make the big sacrifices and shoot for the stars, or mega wealth, or pick a spot between. Opportunities are there for those who choose to look and to take them.
              Yes there is luck, and yes economic cycles will make this easier or harder at times. That is what welfare is for – a safety net.
              We don’t have a system that “competes down”. We have a system that rewards up.
              Providing equality of opportunity is a big aspect to this, and one Governments constantly struggle with. To my mind they put resources in the wrong places and treat symptoms rather then resourcing opportunity.
              The communist ethos stifles this striving for improvement that improves society and kills the competitive spirit. All are equal, but the equality is constrained and stagnant.

            • Gezza

               /  July 20, 2018

              No you are missing something. But I’m happy to leave it here because it’s something you can’t ‘get’ so not worth elaborating on further to no avail.

            • High Flying Duck

               /  July 20, 2018

              I don’t think I am – just articulating in a different way. But yes, time to move on…

          • Alan Wilkinson

             /  July 20, 2018

            I know you shifted the moral goal posts in your second comment. Your problem is that slacking is a continuum, not a binary option.

            Reply
            • Gezza

               /  July 20, 2018

              I didn’t shift any goal posts. I am illustrating a point that you can’t simply see because of your ideological economic paradigm. I’m not talking about that. So endeth my discussion with you because you’re on a completely different track to the one I’m on & you just can’t jump tracks.

            • Alan Wilkinson

               /  July 20, 2018

              Yes you did. Your first post implied a moral distinction between everyone who works and everyone else. The second changed it to between everyone who doesn’t work when they are able and everyone else.

              And some people who work also slack. Your attempt at moral philosophy is so imprecise as to be meaningless as well as wrong.

            • Gezza

               /  July 20, 2018

              It was not an attempt at moral philosophy. Your mind is too narrow. You need to ask questions rather than just make incorrect assumptions to fit them into the categories your mind structures.

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