06/04/07
Jeffrey Sachs argues against Hayek about the redistributive state. A tendentious short version of the article is up here:
The Social Welfare State, beyond Ideology
Are higher taxes and strong social "safety nets" antagonistic to a prosperous market economy? The evidence is now in
By Jeffrey D. Sachs
I haven't read the whole article; I'm no longer a subscriber to Scientific American, a magazine whose quality has plummeted in recent years, as it tries to be more popular.
The evidence Sachs refers to are a number of statistics, but cross-cultural comparisons are so difficult that we expect a little more humility of those who make them. And recognition of basic differences, such as immigration levels and cultural uniformity.
The first thing that struck me about his article is how he gets Hayek wrong. In The Road to Serfdom Hayek did not argue against redistribution (he defended it). He argued against planning, against central direction of business, heavy price controls, and the like. The strategic investments that Sachs defends are something that offends modern libertarians, sure, but not the Hayek of the 1940s. At least, not in the book I read.
This kind of scholarship is precisely the kind I expect from Sachs. I'm assuming others have taken on his statistics and his reasoning about those statistics. And others have mentioned the fact that the Nordic countries have slid backward
from pure dedication to the social welfare using the coercive power of the state, with high taxes and elaborate subsidies.
The business about how Nordic countries took to the digital revolution strikes me as odd, too. Most of the support for this came from business and customers, no? Perhaps I'm wrong. Perhaps Nokia and Erickson couldn't exist without government help and direction.
But I doubt it.
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