Friday, January 18, 2013

Ratchet Effect

From Joel Fox:
  The mechanical device called a "ratchet" lends its name to many phenomena that are not mechanical.  It refers to any situation in which a force in one direction causes a movement in that direction while a compensating force in the opposite direction causes a lesser movement in that direction.  The net effect is a drift in the less resistant direction.  A political example, credited to Margret Thatcher, is "When the Left gets power, she said, they drive everything Left; when the Right gets power, they slow the Leftward drive, perhaps even halt it for a spell; but nothing ever gets moved to the Right."  In the mechanical device, a part called a "pawl" jams the works and provides resistance to motion in one direction, leaving it free to move in the opposite direction.  Our intellectual objective should be to find the pawl in each situation in order to learn what causes the machine to function.

  For a while I lived in France, a country which is about as socialist as you can get.  It was a period during which a conservative government had been voted into power because of a fiscal crisis.  The new government tried to institute reforms; however, a mechanism existed which served as a pawl to prevent the reform from actually occurring.  Students and union members who would lose in the short term, took to the streets to oppose the reforms by blocking traffic and stalling the metro.  After weeks of painful disruption, the government and general public gave up on the reforms.  In other words, the student-union groups acted as a pawl to prevent the society from moving to the right, because of the benefits that accrued to them in a leftist society, despite the democratically expressed will of the people to reform.
  Another example of a ratchet effect is the well known "wage-price spiral."  In a low unemployment situation, wage increments can be demanded which are not merited by increases in productivity.  As a consequence, management must raise prices.  If the situation is widespread, inflation occurs and labor demands higher wages to make up for the loss in buying power.  The cycle starts again.  In our lifetime one has never seen a deflationary wage-price spiral. Hence, there is a ratchet effect.  The pawl which blocks the lowering of wages accompanied by deflation is simply human nature.  Not since the early unionization days has one witnessed the violence of management troops against union strikes and violence.  This causes the lack of symmetry required by a ratchet.   
   Another example of the ratchet effect was the battle between the Soviet Union and the Free World. The Soviets expressed their intention to fight "by all available means, including armed force, for the overthrow of the international bourgeoisie and for the creation of an international Soviet republic as a transition stage to the complete abolition of the State."  While the Soviets maintained a policy of moving their program forward at every opportunity, the West's posture was one of resistance.  Thus we have a classical situation of ratchet effect in which the West could  only lose in the long run unless other powerful factors intervened (which obviously happened).


Ira Glickstein said...

Joel, thanks for another excellent posting.

True, it seems we Conservatives are fighting a rearguard battle against our Liberal opponents, merely slowing their seemingly inevitable advance.

Perhaps the only thing that can "save" us from the unholy combination of the left with their friends in the major media and the current majority of the population that gets more stuff from the government than they currently pay for is a Greece-like financial meltdown. Of course, some of those currently getting more from the government than we now pay in are retirees, like you and me, who previously paid in while we were employed full time. If (when) there is a financial meltdown, people like us will suffer along with those who get government aid because, while they could work, they choose to live off the dole.

Your example of the old USSR that pushed their worldwide agenda by all means necessary may provide a solution. Their system eventually failed and they went down without a shot having to be fired by the west against the Russian homeland. Similarly, the Chinese, arguably more purely Communist under Mao than the Russians ever were, have transitioned to a sort of government brokered capitalist enterprise system that is pushing them to good efficiency and some added freedom for the population.

So, despite the undoubted truth to your concerns, which I share, I tend to say "this too shall pass" and hope for the best for my children and grands and all their compatriots.

Ira Glickstein

joel said...

Your attitude of "this too shall pass" assumes that there is a correct path and that deviations will be damped out eventually. I doubt that we know what that path is. If we could see the future, perhaps we could draw the trend line and say at each deviation (left or right) that this too shall pass. We would certainly be correct. However, lacking that ability, we must accept the possibility that each deviation is a steering function which will be part and parcel of the future trend line. I have the wish that free enterprise will survive the latest assaults, but I find little in the data to justify faith in that wish.