Santa Cruz Good Times

Friday
Jan 30th
Text size
  • Increase font size
  • Default font size
  • Decrease font size

The Great Battle of Self-interest

tom_honig_sCNBC has been showing a promo video lately featuring the late Milton Friedman, the free-market, laissez-faire economist. Friedman was hardly your Santa Cruz kind of guy as he argued bookishly against government regulation and what he saw as unreasonable intrusion into free enterprise.

In the video, circa 1980, Friedman asks a question of host Phil Donahue that resonates today, while governments at all levels face grinding debt and the likelihood of cutbacks.

His question: “Is it true that political self-interest is somehow nobler than economic self-interest?”

Political self-interest is center stage these days. Maybe it always has been, but as governments search high and low for places to cut, those interests now are working against each other.

Here’s how it looks. Public employees fight to keep their benefits and salaries. The sick fight to keep their Medicaid payments. Teachers and administrators battle over too few dollars. Local cities and counties are in a battle with the governor over redevelopment dollars. Firefighters and the police worry over their salaries.

These groups all are fighting from a viewpoint of political self-interest. And so, in fact, are a number of corporations, who spend tons of dollars on lobbying efforts, generally looking for tax breaks or a way to fight foreign competition.

Meanwhile, another video is making the rounds. Filmmaker Michael Moore whips up emotions among striking workers in Wisconsin by arguing that there’s plenty of money, but that a wealthy elite is hogging it all for themselves.

So is there a solution here somewhere?

Friedman’s point of view is attractive, largely from the standard economic argument that people tend to act in their own self-interest. That’s true of striking workers in Wisconsin, of developers who profit from redevelopment funds here in Santa Cruz, and even of the captains of industry whose annual salaries are in the millions.

Yet Moore’s comments are hard to dismiss: one look around any city in America will reveal a shocking disparity of wealth. I remember walking down a street in New York, where homeless people are begging just outside of the world’s most glamorous boutiques. I wondered: why don’t the poor just rise up and steal this wealth for themselves? That must have been the same insight that Karl Marx or Vladimir Lenin had back in the day.

So should wealth be redistributed? It sure makes sense that a homeless person trudging up Pacific Avenue could make use of just a fraction of Bill Gates’ billions of dollars.

But now it gets complicated. How would the homeless person use the money? Or should the money go instead to a poor pupil who’s trying to get ahead. In fact, maybe that pupil will achieve so much that she in turn will be in a position to donate millions back to the next generation. Who decides?

Notice, of course, that Bill Gates doesn’t turn the money over to the government to decide how it’s used. He and his wife, Melinda, operate a foundation, where they allocate funds based on the perceived value of who is in need.

Would Michael Moore have Gates end the foundation and grant the dollars back into state and national coffers? Then what happens? Would the now-swollen government dollars be used to help our poor pupil? Would it go to homeless services? Or would it go to pay for public employee pensions? Right there, you’re starting a fight between, say, a teacher and a prison guard and a welfare recipient.

This damn self-interest gets in the way of easy answers. Here’s where Moore’s argument (and mine, as I see the inequities on a New York street) goes astray: there’s no easy way to soak the rich. California, after all, has tried it.

For many years, the only tax that could pass the Legislature in California is an increased income tax on the wealthy. The result is that when the top earners do well and the economy is rolling along – the tax coffers fill up. But when times are tough, incomes fall and the budget is bathed in red ink. (There’s another aspect to it—the wealthy also leave the state and go elsewhere.)

Economists always remind us about

unintended consequences. In fact, those from the Milton Friedman school say it with

irritating regularity.

So there you have it. People from all walks of life fighting out of self-interest. Free-enterprise folks are interested in money. Those who want more government control want more for their constituents, and  sometimes for their largest donors.

But the question remains: is political self-interest nobler than economic self-interest?

I say it’s not. But I suspect that most people in Santa Cruz would argue otherwise.

 


Be a part of the discussion. Comment on this article below or send to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .  Contact Tom Honig at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

 

Comments (0)Add Comment

Write comment
smaller | bigger

busy
 

Share this on your social networks

Bookmark and Share

Share this

Bookmark and Share

 

Throwing It All Away

Everybody’s for recycling, right? So why are we all doing it wrong? Our reporter gets down and dirty to uncover 10 secrets that will finally make the recycling process make sense

 

Aquarius Calling, Humanity Rising

Aquarius (11th sign after Aries) is the sign of service—serving one another, building community. Aquarius is fixed air, stabilizing new ideas in the world. When new ideas reach the masses the ideas become ideals within the hearts and minds of humanity. Air signs (Gemini, Libra and Aquarius) are mental. They think, ponder, study, research, gather and distribute information. For air signs, education and learning, communicating, writing, being social, tending to money, participating in groups and creating sustainable communities are most important. One of the present messages Aquarius is putting forth to the New Group of World Servers is the creation of the New Education (thus thinking) for humanity—one based not on commodities (banking/corporate values) but on virtues. Humanity and Aquarius Aquarius is the sign of humanity itself. We are now at the beginnings of the Age of Aquarius, the Age of Humanity (rising). The “rising” is the Aquarian vision of equality, unity, the distribution and sharing of all resources and of individual (Leo) creative gifts for the purpose of humanity’s (Aquarius) uplifting. This is the message in the Solar Festival of Aquarius (at the full moon) on Tuesday, Feb. 3. We join in these visions by reciting the World Prayer of Direction, the Great Invocation.Tuesday’s solar festival follows Monday’s Groundhog Day, or Imbolc (ancient Celtic fire festival) the halfway mark between winter solstice and spring Equinox). The New Group of World Servers (NGWS) during these two days are preparing for the upcoming Three Spring Solar Festivals: 1. Aries Resurrection/Easter Festival (April); 2. Taurus Buddha/Wesak Festival (May); and 3. Gemini’s Festival of Humanity (June). Aquarius and the new and full moons together are the primary astrological influences behind all of humanity’s endeavors. The NGWS are to teach these things, calling and uplifting humanity. Join us everyone. (301)

 

The New Tech Nexus

Community leaders in science and technology unite to form web-based networking program

 

Job Insecurity

Woman fights for her job in thoughtful, life-sized ‘Two Days One Night’
Sign up for Good Times weekly newsletter
Get the latest news, events

RSS Feed Burner

 Subscribe in a reader

Latest Comments

 

Jeffrey’s Restaurant

Why quick and friendly service matters at a local diner.

 

If you didn't live in Santa Cruz, where would you be living?

I would live in Kauai because the water is warmer, and I just love it there. Maureen Niehaus, Santa Cruz, Dental Assistant

 

Clos LaChance Wines

Pinot Noir 2012

 

Striking Gold

A taste of Soquel Vineyards’ five gold medal-winning Pinots