Economic Understanding should be Acquired Before Exercising Union/Voting Powers
DISCLAIMER: I am not challenging human rights. I simply believe that there are problems in the current US system. What these flaws are, I am not certain. I believe some discussion is merited in an attempt to find these flaws and amend them. Hopefully this debate will bring out some new ideas.
First round is acceptance.
Second round is opening argument.
Third round is rebuttal and conclusion.
I look forward to a civil debate.
Today"s citizens want higher wages, better welfare, less working time, and lower taxes - often simultaneously. Evidently, this is impossible. The government borrows heavily to finance the spending. This spending is unsustainable. Eventually, investors will realize that the country"s debt to GDP ratio is unsustainable. They will sell their bonds en masse. Bond prices will plunge, interest rates will spike, and the currency will crash. In the words of Barry Eichengreen, "if this happened all at once, the results could be devastating". To illustrate this, in 2013 the unemployment rate of Greece and Spain were over 25%.
Austerity measures are implemented and governments must cut spending, which means cutting jobs and reducing pay. The people, in their wisdom, riot and go on strike during a recession (Yes, the very people who were lucky enough to retain their job). That"s what happened in many European countries, Canada, and the United States during the Great Recession. The pain is so great that Bloomberg declared it "politically impossible" to pay off the debt. Politicians are tied to the voters; they must promise voters benefits. And as long as voters are ignorant of the true well-being of the country, the country can never prosper over the long term. Eventually, its false prosperity will collapse, and poverty will take its place.
Another incident of sheer idiocy occurred during the Great Recession in Windsor, Ontario. Union workers went on strike because their payroll took a dip. These were workers who were earning $28-30 dollars/hour. In the end, these enlightened people not only didn"t get their increase in pay, but lost their jobs as well.
The United States $17.075 trillion debt is further evidence of the ignorance of the American Public. Mr. Obama, who promises better welfare for the poor, continues America"s exorbitant spending.
Ironically, those who shout out "human rights" and demand a long list of benefits from politicians and governments are denying future generations those rights.
One of the problems is that today, many Westerners do not understand concepts of finance of economy. 34% of the people in a survey did not even know how long it would be before they would be out of debt. Polls have shown that many Americans do not even know what government deficit is.
I believe one way we could circumvent these problems would be to make financial and economic literacy a mandatory prerequisite before being able to vote or exercise voting problems. This requirement would eliminate politicians" outrageous promises, as they now have to meet the demands of a more worldly-wise audience.
For union workers, having economic and financial understanding will not only protect themselves from their own follies, but also the economic securities of future generations as well as the general well-being of society. For instance, going on strike during a recession will cause the economy to spiral further downward. (Workers on strike have less money to spend and businesses will lose money as they see the number of their consumers decrease. This in turn will cause businesses to cut more workers.)
Today, in most countries, there are age restrictions regarding voting. These restrictions are in place because most 10 year olds do not understand worldly issues. The fact that most Americans are as ignorant of economics as when they were young means that new restrictions should be imposed. Basic economics and financial in voters and union workers can help the country prosper, and in turn the individual will prosper.
Barry Eichengreen"s book Exorbitant Privilege
My opponent's position rests upon one fallacious notion: that economists are better at handling the economy than people without their professional training. One quick look at the field, however, will show us that there is little in the world of the economically savvy that would justify that optimism.
Economists and the deficit
It does not take an economist to say, as the video Pro provides does, that deficit spending is foolish. Any farmer will tell you you can't promise someone five bushels of wheat where you only reap three, and any housewife will tell you a household can't be habitually run by borrowing money. Economists, however, are much more likely to argue themselves into considering it wise to spend what they don't actually have. From Marxist economics to the Austrian School with the Keynesians nestled in between, you can find an economist to defend nearly any economic proposal in existence.
Just to name a few policies that Pro either mentions in his first argument or provides in his source materials:
1. Deficit Spending: Perhaps the easiest proposal to find disagreement on, from Nobel laureate Paul Krugman (1) who opposes austerity measures vehemently, to OBE Bridget Rosewell (2) who argues for the necessity of deficit control as my opponent would.
2. The Euro: Due to its political connotations, it is no surprise there are economists who offer their services to rationalize every conceivable option for the euro. Those who offer blanket opposition as many American economists did,(3) those who defend the monetary union such as professor Huerta de Soto,(4) those who recommend a fiscal union to boot like , and even those who propose two different euros like Nobel laureate Christopher Sims.(5)
3. Labor strikes: There are without a doubt many conservative economists who decry the economic damage done by labor strikes and point at the damage they often inflict on the strikers themselves. Others, however, take the position that in the long-run these help the overall economy by driving down inequality. Not only union members say this, but others who cannot be considered economic laymen, such as Aditya Chakra, The Guardian's senior economics commentator.(6)
All of this shows that economics is not a hard science, it has so little predictive value (except in the sense that a fortune teller who gets lucky may be considered predictive) it could justifiably be referred to as a pseudoscience. Being an economist is no guarantee that one will take Pro's view on the issues at hand, it doesn't even guarantee that economic policy will change significantly, only that it will be explained in language even more arcane and separate from the general population who will still suffer the consequences.
Are Union leaders necessarily foolish?
I would agree with my opponent that many, if not most, labor leaders today are foolish in their actions. I do not, however, think this is a function of their lack of training in the pseudoscience of economics. Cesar Chávez did not need to know about the macroeconomic implication of migratory fluxes to know that migrant workers were being exploited, and he did a wonderful job defending their interests by founding the United Farm Workers association. Lech Walesa was not an economist but an electrician, and yet he was more than capable of understanding that the communist regime was harmful to the interests and rights of workers, and organized an effective defense in his union, Solidarnosk (he was also a pretty good president, but that is beyond our scope in this debate). Had there been a limitation placed on the ability to form, join or lead a union based on economic knowledge, these fine labor leaders would have been lost (or more likely faced and overcome one more hurdle).
It ain't just the economy, stupid (No offense intended towards my opponent by this parody of Bill Clinton)
Many of these decisions have political implications beyond the purview of economists, and there is more to voting and political office than economic matters anyways. Limiting the right to political participation to those who have an advanced understanding of the conflictive pseudoscience of economics would be so inadmissible a limitation on the rights of the citizens as to disqualify such a country from being referred to as a democracy.
In fact, if we were to take Pro's argument to the extreme, we could say that we ought to do away with popular elections altogether, and have only those people participate who are experts on the range of subjects the political system addresses. In order to vote one must have advanced understanding not only of economics, but of law, sociology, pedagogy, criminology and moral philosophy. I'm sure our readers would be able to furnish some other -ology we need must add, lest we be governed by knaves and fools.
There are issues, such as the definition of marriage, our attitude towards migrants, setting the priorities of the educational system, the focus of the penal system or the establishment of holidays which are incumbent on everyone. Even an economic matter such as the proposed establishment of a fiscal as well as a monetary union in the EU affects the non-economic matter of sovereignty and national pride so deeply that it would be offensive to put it exclusively in the hands of an economic elite. My opponent's proposal, in short, is contrary to the primary tenet of democracy. I cannot put it better than the great journalist and social commentator G.K. Chesterton, and so I will quote him in closing:
"The democratic contention is that government (helping to rule the tribe) is a thing like falling in love, and not a thing like dropping into poetry. It is not something analogous to playing the church organ, painting on vellum, discovering the North Pole (that insidious habit), looping the loop, being Astronomer Royal, and so on. For these things we do not wish a man to do at all unless he does them well. It is, on the contrary, a thing analogous to writing one's own love-letters or blowing one's own nose. These things we want a man to do for himself, even if he does them badly." (7)
Thanks to Con for his arguments. My opponent has given me many things to think about.
Con has misconstrued my arguments.
I never argued that economists are better at handling the economy, nor did I argue that economic matters should be put solely in the hands of an “economic elite”. Is a person who passed the literacy test a master of linguistics?
What I am asking for is something that can be easily attainable by all citizens. Is the understanding of the difference between debt and deficit so difficult that it is limited to a handful of American people? Of course not. This is something that can and should be attained by all Americans. As most of my opponent’s arguments refutes my “claim” was “economists are better at handling the economy than people without their professional training”, most of his arguments are effectively negated.
In response to “It ain't just the economy, stupid”
“My opponent's proposal, in short, is contrary to the primary tenet of democracy.”
I don’t see how that is so, especially since my proposal can be inclusive to all Americans. Joseph E. Stieglitz, in his book the “The Price of Inequality”, wrote that even the poorest Americans owned television sets. Surely these people have the means to educate themselves on the basis of financial literacy, whether this is done by borrowing a book from the library, buying a book from the local book store, going on free educational websites such as Khan Academy (they have a section dedicated to basic economics). Even if they couldn’t, the government could always incorporate basic financial/economic literacy programs into school curriculum.The Canadian Centre for Financial Literacy has already launched programs promoting financial literacy for low income people.
As my opponent wrote: “Any farmer will tell you you can't promise someone five bushels of wheat where you only reap three, and any housewife will tell you a household can't be habitually run by borrowing money”. So Con, by stating that my proposal is more or less “common sense”, also agrees that my proposal is inclusive. And as I pointed out earlier, there are many ways for even the poorest people to become educated to financial literacy.
But the fact is, while this “common sense” is easily attainable, many people either lack it or choose to ignore it. The average credit card debt for Americans is $15 480 dollars. It seems that many Americans feel that they can conjure money out of thin air. The average mortgage debt is $156 474 dollars, while the median income is $51 017.
By making financial/economic understanding mandatory for all voters/citizens, we could not only allow society to progress better but also help individuals gain a better life by not perpetually being in debt. Thus driving down the inequality that Con mentioned in his argument.
“In fact, if we were to take Pro's argument to the extreme, we could say that we ought to do away with popular elections altogether, and have only those people participate who are experts on the range of subjects the political system addresses.”
This is an invalid argument. I never argued that only people who are experts participate in voting. I simply argued for people who have a basic proficiency in economics to be able to vote. No one is making claims that Canada will descend into communism simply because it is socialistic country, or that America will one day become a fascist country simply because it is right wing. Similarly, I could take Con’s argument to the extreme and say that we should allow even seven year olds to vote, which would be ridiculous for obvious reasons.
Part of the reason we do not allow children to vote because they do not understand even the basics of how the world works. Similarly, should we allow adults who are as ignorant as they were when they were young to vote as well?
“Even an economic matter such as the proposed establishment of a fiscal as well as a monetary union in the EU affects the non-economic matter of sovereignty and national pride so deeply that it would be offensive to put it exclusively in the hands of an economic elite.”
Again, I never argued that the decision should be put in the hands of an economic elite. I simply argued that everyone should have a basic understanding of financial/economic literacy.
In response to “Are Union leaders necessarily foolish?”
“Cesar Chávez did not need to know about the macroeconomic implication of migratory fluxes to know that migrant workers were being exploited, and he did a wonderful job defending their interests by founding the United Farm Workers association.”
Under my proposition, Cesar Chavez would not have been excluded. The “macroeconomic implication of migratory flux” is obviously not within my definition of economics 101. The problem, as I pointed out in the previous round, isn’t that people don’t understand economic jargon, but that they don’t even know how much they are in debt. Cesar Chavez would have known what debt was, as he was exposed to this in his early life. His father could not pay the interest on the loan of his house and it was sold back to its original owner.
“Lech Walesa was not an economist but an electrician, and yet he was more than capable of understanding that the communist regime was harmful to the interests and rights of workers, and organized an effective defence in his union”
Thanks to Con for defending my proposition. My opponent has once again proved that you don’t need to be an economist to understand economics 101. If Mr. Walesea was more than capable of understanding that the communist regime was harmful to the interest and rights of workers, I’m sure that he probably had a pretty solid understanding of the workings of economy. Again, I am not arguing that only economists should be able to vote.
Con has not been able to prove that under my proposal, “these fine labor leader would have been lost”.
In response to “Economists and the deficit”
I did not argue that only economists are able to vote. Additionally, while economics is a soft science, the basis of economics are pretty straightforward. For instance, overspending must be financed by borrowing, and this is unsustainable. Lower taxes accompanied by higher government spending will probably mean borrowing. Creditors will not allow people to continue borrowing money indefinitely, eventually they will begin to put restrictions on the debtor (e.g. austerity measures).
Thus my opponent comment that my proposal has little predictive value is not correct.
“Only that it will be explained in language even more arcane and separate from the general population who will still suffer the consequences.”
Is the difference between debt and deficit really that difficult to understand? Once again,
In conclusion, making basic economic understanding and financial literacy a prerequisite for voting/exercising union powers can provide several important benefits while keeping the inclusiveness of the current democratic system:
The first is that politicians will be less able to make “outrageous” promises, such as lower taxes and better welfare, that would simultaneously damage the prospects of society as well as the welfare of future generations (The most obvious example would be that the people of Generations X and later generations would most likely not get their pensions).
The second important benefit is that it can increase the number of people in our country that are financially literate. Families will, in turn, have less debt. A 2008 Harvard/Dartmouth study showed that financial literacy is the first essential step in building wealth.
Finally, this will also enable union leaders make rational decisions, and not jeopardize the well-being of the workers in the union.
Thanks to my opponent for the debate.
Joseph Stieglitz’s book: The Price of Inequality
I thank my opponent for the debate, which has been very interesting. In this closing round I will answer to my opponents objections and provide a short summary of the case as I understand it.
Misconstrued arguments (Economists and the deficit II)
Pro informs me that I have been somewhat hyperbolic, and feels I have overstated his proposal. That is unfortunate, but more unfortunate for his position than my own, as a more modest proposal on his part only serves to make mine an a fortiori argument against it. After all, if people with an expert handle on economics would not vote differently than the general public, then one can hardly expect a legion of amateurs to make much difference; much less that the government would be revolutionized by facing "the demands of a more worldly-wise audience."
Pro disagrees with my contention that economics has little if any relevant predictive value. I insist it is the case, as the world of economics is divided between people who follow theories which did not see the economic crisis of 2008 coming and those who predicted 14 of the last 3 disasters. To take only what he considers to be a clear cut argument. He says that it is inevitable that overspending leads inevitably to austerity measures. I tend to agree. As he says overspending leads to increased borrowing, which if not eventually payed for leads to creditors refusing to risk lending more money which necessarily leads to either austerity or a default. Keynesian economists, on the other hand, beg to differ. They would argue that government spending has a multiplying effect, and as public spending increases, the economy as a whole produces more, which in turn leads to more tax revenue which leads to the possibility of greater government spending in a glorious spiral of economic bonanza.(1) I may have put this in tone of parody, many however do believe this to be the case, and are every bit the economists as those who agree with my opponent and I.
This leads me to what is perhaps the most important point in my case. If experts in economics (who no doubt know the difference between deficit and debt) cannot agree on anything beyond that, how would a mass of beginners fare any better?
Are good union leaders necessarily adept at economics?
Pro cites the fact that Cesar Chávez was once in debt as evidence that he had the economic grounding that my opponent would have us ask of any who wishes to exercise voting or union privileges (describing them as rights being too generous under his proposals). There are many who Pro would characterize as economically illiterate, following his criteria of being able to distinguish between debt and deficit, who have faced similar situations. Micro-economy and macro-economy are not the same thing, and experiencing certain things firsthand on the level of a household cannot automatically be taken as having insight on the workings of a national economy. Chávez ended his formal education in the seventh grade to work in the fields as a migrant worker,(2) it very unlikely he would have passed the type of test that my opponent proposes. As for Lech Walesa, he eventually did gain a better understanding of these issues, mostly due to the briefings from his ministers and advisers, but during his Solidarnosk years I am unable to find proof of his having a particularly good grasp on economic theory. This is particularly relevant, as his knowledge in these matters is of so little bearing on his work, most biographers seem not to feel the need to mention it. To say that knowledge of economics is necessary for participating in unions and to respond, after being shown an example of an effective union leader, that he must have understood economics because he was an effective union leader is circular reasoning.
All of this goes to show that one can say one of two things about my opponent's proposal. Either it is so stringent that these two great men would not meet his criteria, or it is so weak it would make no difference anyways. In neither case is it a policy worth following.
Government and Children (on the essence democracy)
If what Pro wants is to have the majority of the population exposed to basic economic concepts then what he ought to propose is for Civics and Economics to be offered before the end of mandatory education and make sure that the curriculum includes these matters. His proposal, however, goes further; and there is no reason to exclude other disciplines from his litmus test. Now, Pro asserts that this is an invalid argument, however he makes no argument to support that assertion beyond the bizarre statement about Canada being socialist and America right winged I fail to see the relevance of (particularly seeing as Canada currently has a conservative Prime Minister and the United States one of the most left-winged presidents of their recent history).
He does, however, make an excellent point in mentioning the extension of the vote to seven year-olds. Regrettably for my opponent it is once again a point in my favor. You see, we deny the vote to children because we believe children are the responsibility of others, their parents or guardians. It is they who decide for them while they are developing into adults, from what they eat and what they wear to who governs them and by which laws. In arguing that those millions (the 34% who my opponent affirms do not know when they will get out of debt or the generic "many" who cannot differentiate between debt and deficit, which may be half the country if the US is anything like England (3)) ought to be treated as children one is no longer arguing for a better democracy but for the replacement of that democracy for an aristocracy, in that original sense of the government of our betters. He may extend this to be a very numerous aristocracy, or a very un-technical technocracy, but in no sense of the word would it be a democracy.
1. My opponent's rationale for proposing that voting and union powers (formerly known as rights) ought to be restricted to those with a certain level of economic understanding is that this would force governments to change their current spendthrift behavior. We have seen no evidence of this.
2. My own argument that, as economic theory allows for as many interpretations as one would be pleased to find, it would make little difference if people's economic knowledge were at a doctorate level, that of an amateur or non-existent was not addressed in any relevant way. The assertion that the pseudoscience of economics does have predictive power was not adequately supported and must be considered debunked.
3. The example of two extraordinary union leaders who did not have any economic expertise to speak of as proof-positive that this is not a relevant criteria for placing limits on the right to form unions was only met by the rather weak argument that, as they did well, they must have known economics. This is an illogical statement and a petitio principii.
4. Pro affirmed his was a way to perfect the democratic process, I argue that it is a very effective way to destroy it. His argument in favor of disenfranchising those who do not have what he deems to be adequate economic knowledge comparing them to children only cements that contention.
On the basis of these facts I see no alternative but to reject the resolution, and I hope our voters agree.
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