Wealth Distribution in the United States

[Cyc]

The problem is the evaluator's bias. It's the conflict of interest that comes about when the person valuing an item, is the one able to appraise it.

We see this problem with unemployment, where work is (de)valued by the employer. We see this problem with monopolies and corporate collusionists, where the value of the product is determined by its primary stakeholder. We see it in the finance industry, where banks sell off their own risk to eliminate liability.

The two pillars of ethical policy-making are transparency and objectivity. Simple, really. We must know all the facts, and armed with that information, must make the most objective and socially responsible decision possible. This often requires a 3rd party arbiter to avoid bias.

Money is no different. We must know where wealth is concentrated, through what means and by what purpose. We must then systematically eliminate the evaluator's bias, which will result in a more even distribution.

How do we deal with this quandary? How do we tell a 24-hr convenience store owner that a loaf of bread is only worth $2.99 after 10pm? How do we dictate value?

Things must have value only in terms of efficiency. The only good cause, the only valuable work, is in the elimination of work. Maximum efficiency is the only goal. This is why I maintain that high unemployment is not only inevitable, but positive. We need to keep driving those numbers up, as it is a direct reflection of progress.

To give an example: If I write a tutorial and publish it online, and it receives 100,000 hits, I've undoubtedly helped many people. My work has conferred benefit that has value. It may have saved dozens of people a trip to the repair shop, or saved them from purchasing a manual. In this sense, my sole value is in devaluing other, less efficient means of information sharing. This cancelling effect is the work. In this way, we are able to appraise work, not by its perceived value to others, but by this cancelling effect. Essentially, work is valued by its slowing effect on entropy and enthalpy.

Gibbs free energy:
∆G = ∆H-T∆S >> 0
We will not react spontaneously. We will conserve energy.

If we eliminate the evaluator's bias completely, we can finally evaluate that loaf of bread with efficiency, driven by transparency and objectivity.

Malthus was wrong. Moore was right! We need to function accordingly.

 

[rant*N*rave]

1. The poor are far more unemployed than the rich.
It’s not enough that they make more money anymore — despite everything that economics might normally predict, those with higher incomes are less likely to be unemployed during this recession. A new study from Northeastern University shows that among the top 20 percent of households — those making more than $100,000 — the unemployment rate is about 3.5 percent. In the poorest 10 percent of American households — those making under $12,800 a year — the unemployment rate is 30.8 percent. No wonder all those AIG bankers were threatening to leave their jobs in the midst of the recession: For them, there never was one.

Any person that can't figure out why this is is a total idiot - people that make lots of money, for the most part, have very salable/valuable skills. That's why they get paid a lot in the first place. If you get fired from McDonald's, not a lot of people will hire you back anywhere. If you get fired from VP of Operations at an engineering company, you can probably find something else, even if it's that McDonald's job. This kind of economy will always favor those with SKILLS.

This is why you'll never hear me stop decrying the complete clusterfuck that is our education system. Fuck Algebra 2. Teach plumbing. No one should go to a 4-year liberal arts college unless they want a hard sciences or philosophy/fine arts degree. "Business school" would be much better taught with a 2-year basics program and a 3-year apprenticeship in a real job. Most people would be better off in 2-year skills-and-knowledge training/3-year apprenticeship systems overall. No matter how much school you do, if you can't master a skill set or a body of knowledge, you're worthless in the work world, and it doesn't make sense to spend the money and time first before you find out.

Frankly, the vast majority of our issues could be greatly ameliorated, if not solved, by people actually knowing how to do stuff worth salable value and run a household. You can't barter if you don't have something to offer, and you can't earn value if you don't know how to use/save it.

I'll give even the truly laziest of "lazy" poor people the benefit of the doubt at this point, because frankly they've been screwed at most every turn and I suppose never learned better, but if people actually knew what the hell was going on around them and stopped it, none of our situation would have come to pass in the first place. It's why I say fuck the economy, fuck taxes, fuck marginal this and that, fuck bailouts - spend all the money on schools and make sure kids learn how to LIVE. Fuck socialism, fuck capitalism, FUCK IT ALL and make sure people know what they're getting into first. Then the system can work itself out.

The one thing that people seem to neglect when they pore over the grand successes of the more socialist countries in Europe is that they have a vastly more educated and vastly more involved populace, if for geographical proximity alone. It's a lot easier to find a comforable political/economic rhythm in a country where everyone is (close to) on the same page. It's hard for me in WI to truly identify with the needs of my "neighbors" in CA (and lord knows you can't compare the education systems); it's a lot easier for someone in Helsinki to identify with someone in Oslo (completely separate countries, mind you) than it is for someone in Atlanta to identify with someone in Seattle. We need to get Americans on the same page before anything works.

I'd say it's no assumption on my part to state that even of all of us here on BL, who seem to have wildly divergent ideas at face value, are actually pretty close together in an ideal of a social democracy with free-market enterprise - that's really what's at play in all those other countries we idealize. If we can get the populace smart enough to fire all the evil politicians in office these days (and yes, they're evil, and yes, we CAN fire them), then we can fuck with the marginal tax rate all we want to see what works best rather than watching politicians take cheap shots at each other on cable TV.


As much as I hate to admit it, even our relatively mild bickering here is a clear symptom of the BIGGEST problem with Americans. We don't want to stop eating cheeseburgers, we want a magical pill to fix our heart disease after the fact. No economic or political wrangling will possibly solve our problems if WE don't solve our problems. There is no magical percentage point to fix this disease.

 

[marsmellow]

Will someone please explain to me the difference between "redistribution of wealth" and theft?

When a homeless person steals a blanket so they can be warm, that's theft. When CitiBank does the same, but on a far larger scale, through government bailouts, foreclosures, interest rate hikes and overdraft fees, it's not considered a crime. They are rich and powerful, so it's perfectly okay.

There are plenty of people who are rich only because of exploitation and theft. All the land Americans own was originally stolen from the Indians. A lot of companies wouldn't have ever become rich if it weren't for slaves and indentured servants. American companies still run sweatshops in the third world. There are plenty of ways to unethically make money, and many companies have done this.

So, what's my point? The point is that a lot of this wealth that the super-rich have was basically stolen in the first place. So, it's no crime to take it back and use it to improve society.

time and time again the republicans brazenly vote against the little guy. every single republican always votes in favor of drug company profit. and obama totally sells out all of his previous ideals

Yeah, it's amazing that people continue to vote for the same politicians, when it's perfectly clear that these politicians are mostly interested in screwing the average person. I don't understand why, but that just seems like it is the way the world works. It's probably the same reason why monarchies and dictatorships have been so common in history.

And qwe, if you like the Young Turks, you might also like Thom Hartmann and Democracy Now. They are similar to the Young Turks, but a little bit more educational/in-depth.

This is Vatican economic policy, and is what's going on with their "liberation theology" down in Latin America.

Uhh.. no. The Vatican had repeatedly denounced liberation theology. Out of all people, I thought you would know this... that organized religion is usually on the side of the powerful.

Raising taxes stifles business and economic growth, that is 100% fact.

No, it's not 100% fact. It is right-wing dogma. Whether taxes hurt economic growth, that depends on a lot of different things.

Don't ask me to rationalize it or justify it. Its how it works. There has to be a marginal benefit to working. Even people who really need the money don't work that hard if they aren't getting paid enough, why would you expect someone who doesn't *really* need the money to work much if they just keep a sliver.

Okay, this is the last thing I'm going to say about this, because I'm just tired of trying to explain it to you. You refuse to see things from my point of view, so I'm just beating a dead horse now.

You said that 93% tax rates weren't a problem because no business paid that much to their employees. The same thing would happen. Businesses would pay their CEOs like $80,000 per month, and this would end up being a bit less than 1 million a year. The business wouldn't want to pay more than that, because most of it would end up going to the government. There would be a marginal gain... about $80,000 for every month they continue working. They wouldn't earn 1 million and then stop working, because that million would be spread out over a year.

There wouldn't be a whole lot of people moving away, because people don't like leaving their families and friends and learning new languages, and because a million a year is still a lot of money. I'm sure there would be some, but only the most greedy and selfish people would do this.

Now we are on a sliding scale where every dollar you take away from me makes me that less likely to provide jobs.

Oh come on. We might as well reduce taxes to 5% if that is true.

I'm going to start basing all everything in my posts around the labor theory of value. That would be pretty similar to what you're doing here. Every cent of profit is a theft from the true owners... the workers!! Tax all profits at 100% and give it back to the rightful owners!! 8(

Back to the laffer curve, where do you think that point is? I'd say 75% is shooting yourself in the foot. France, Sweden, Norway and Finland all agree with me after trying it themselves.

No. The ultra-rich people in those countries agreed with you.

Thats communism. It sounds great though.

No, Senator McCarthy, it is not "communism". 8)

I didn't say anything about equal wages or equal work. I didn't say anything about government owning all the factories and companies. I didn't say anything about a dictatorship or revolution. It is not communism.

Our recent "put people back to work" stimulus package has some juicy figures.

The stimulus bill is not representative of all government spending. You can't look at our current government and say that it proves no government can do anything efficiently. Our government is notoriously corrupt and controlled by lobbyists. Look at the New Deal, or the British healthcare system, or the highway system, or NASA in the 60s. There are lots of examples of governments doing things efficiently.

Via welfare? Free healthcare?

Those might be part of it... but not the only thing.

There is a gap in your logic, how did taxing 1 corporation create 500 new ones?

I oversimplified that to make the point. Obviously not every single person who earned 1 million would use it to start a business, but I'm sure quite a few would.

O.K. I'm starting to understand..we just need Chris Dodd to take our money and invest it for us? Its only fair since there are so many people with such great idea.

No. This is a strawman.

I'm going to assume you are referring to this...

That someone could be the public. Why not? We could do everything that investors do now, but the money would just be controlled by servants of the public (AKA government bureaucrats with finance degrees) instead of a small group of private citizens. That way, we could have all the benefits of capitalists, without the massive disparity in wealth.

The money would be controlled by an agency which was independent from the government (sort of like the Fed), and it would be forced by law to be transparent and accountable. The people who work here would have knowledge of finance and investment, and if the companies they invested in did good, they would get promoted, if not, they would get fired.

Don't forget, Jobs and Gates started out as acid addled nerds in a garage. Its a good thing your generation wasn't around to tax them into the dirt.

If they started out in a garage, they wouldn't have been affected by these tax increases. Because if they were working in a garage, they definitely weren't earning more than a million dollars a year.

It seems like the government already provides those things however poorly. More money? Public schools cost far more than private ones and deliver piss poor results.

No, that isn't true:
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/30/AR2009083002335.html

Private schools do better than public schools because private schools get wealthy students, not because they actually are better schools.

If we are trying to fix the inner city I think the answer is obvious. Legalize drugs. Then kids grow up with fathers who work at jobs rather than going in and out of jail on dope charges. The last thing we need are more cops which just make dealing drugs more profitable and risky at the same time.

Drug addiction has it's downsides also. Yes, we should definitely legalize weed, acid, MDMA, and other things which are pretty much harmless and non addictive, but letting people buy meth and heroin at a convenience store wouldn't be the best idea.

The problem is to fix a house you need to know how.

These work programs would teach people how to. They could use these skills they learn to get a job with a private construction company.

 

[L O V E L I F E]

When a homeless person steals a blanket so they can be warm, that's theft.

Yes, it is.

And you are proving my point for me.

Because you fail to adequately account for the UNFAIRNESS that is done to the person (or store, or other entity) from whom that blanket was stolen.

You do NOT get things in life (in an ethical manner) because you NEED them.

Rather, you get things by trading something in exchange for them.

Could be barter; could be money.

If you have neither, you could *gasp* - work.

And, if you are unable to do even that, then you can hope that out of kindness, someone better off than you are will willingly GIVE you what you want/need.

You can keep rationalizing stealing all you want.

But just because SOME rich people/institutions got rich by stealing doesn't make it any less wrong for you or me or anyone else to steal, too.

 

[marsmellow]

You do NOT get things in life (in an ethical manner) because you NEED them.

Rather, you get things by trading something in exchange for them.

Could be barter; could be money.

If you have neither, you could *gasp* - work.

Most poor people DO work. They just don't earn enough to get by.

And I do think need is an appropriate reason to redistribute wealth. It is much worse for a society to let people starve and die in the streets. There is more than enough money for society to provide for everyone. There is no reason why it shouldn't.

 

[L O V E L I F E]

Most poor people DO work.

They just don't earn enough to get by.

Then, perhaps they should re-evaluate what their "needs" truly are, and cut out ALL other unnecessary expenses.

Because I know A LOT of comics, actors and other artists who somehow manage to "get by" on minimum wage day-jobs, while living in one of the most expensive cities in the world.

Or do you think that upper-middle class hard-workers should be FORCED to work even harder, so that they can make even more money, so that the government can FORCE them to "redistribute" (READ: "STEAL") some of it, so that poor people can have cable TV and go out to eat?

 

[marsmellow]

Then, perhaps they should re-evaluate what their "needs" truly are, and cut out ALL other unnecessary expenses.

No, it means that we should increase the minimum wage, until it is a living wage. That would be another way to redistribute wealth. Maybe wealthy people would like that better than taxes?

There are only so many "unnecessary expenses" that you can cut. Many people have no more unnecessary expenses to cut, so they go without healthcare, electricity or food for a while.

And no, I don't want to give poor people cable TV and money for restaurants. That is a strawman argument. I think poor people should all get the basic necessities of life. Cable and eating out at restaurants don't fit into that category. Those are luxuries, not necessities.

 

[L O V E L I F E]

Even *IF,* hypothetically, a person CAN'T live on $7.25 an hour (that's $1,250-ish a month), then perhaps they could get a second job.

Or get a roommate.

Or get several roommates.

Or do NOT have unprotected sex EVER, so that they won't have ANY dependents, when they can barely depend on themselves.

And even in New York City, I know first-hand that it is very possible to survive by doing just these things.

And we're taking a detour in this conversation, anyway.

Because while, EVEN IF, hypothetically, someone can't afford all of their "needs" despite putting in maximum effort to earn more and spend less, that's very unfortunate . . . there are still two other elements at play:

(1) There are ***A LOT*** of people who are willing to contribute, and to help out the poor (see: Bill Gates, Warren Buffett, and plenty of other philanthropists - many of whom aren't wealthy themselves [I see modestly-dressed men and women give money to people who ask NICELY on the subway each and every day]);

AND

(2) Even if that's STILL not enough . . . that STILL doesn't make stealing ETHICAL.

Let me ask you this, marsmellow:

If, hypothetically, you were about to get hit by a car, and the only way to avoid your own death would be to push an innocent person in front of you, so that she will then die instead of you . . . would you?

Sorry if that analogy doesn't click for you - but in my mind, the analogy makes my point:

It is NEVER EVER EVER ethical to transfer YOUR bad circumstances/bad luck to someone else by force.

And yet, that is EXACTLY what the government does (on behalf of the poor) each and every time it taxes the rich in the name of "wealth re-distribution."

 

[Cyc]

This is why I would move to reevaluate the value of work under a strict model. Knowing the value of each mental or physical task would be the ultimate accountability of wealth. We could even throw in a bonus for performing each task to different degrees of success.

Then you truly would be paid for how hard you work. Your income would be clearly stratified. This would put me squarely in the, "Fuck Robin Hood up the ass, he was a goddamned shit-eating, sheriff-stealing prick!" camp.

 

[marsmellow]

Even *IF,* hypothetically, a person CAN'T live on $7.25 an hour (that's $1,250-ish a month), then perhaps they could get a second job.

Or get a roommate.

Or get several roommates.

Or do NOT have unprotected sex EVER, so that they won't have ANY dependents, when they can barely depend on themselves.

This is all good advice but sometimes it is not enough. Sometimes people won't be able to make it even if they do all these things. Imagine that there's someone who decides to give up their health insurance, because it's a so-called unnecessary expense. Then they get sick and get tens of thousands of dollars in medical bills. They can't pay all this, even if they did work two jobs and have roommates. Imagine that there is someone who does work two jobs, but they have a mental breakdown from the stress of working constantly and not having a social life. Then they can't work anymore.

See, there are lots of things that can make you poor, even if you do all these things you've mentioned. Sometimes it's not enough.

Let me ask you this, marsmellow:

If, hypothetically, you were about to get hit by a car, and the only way to avoid your own death would be to push an innocent person in front of you, so that she will then die instead of you . . . would you?

Sorry if that analogy doesn't click for you - but in my mind, the analogy makes my point:

It is NEVER EVER EVER ethical to transfer YOUR bad circumstances/bad luck to someone else by force.

And yet, that is EXACTLY what the government does (on behalf of the poor) each and every time it taxes the rich in the name of "wealth re-distribution."

No, taxing is not the same as transferring bad circumstances to other people. If it was, the rich people would end up just as bad or worse than the poor people who are benefiting from the taxes. That is not what would happen, so your analogy doesn't work.

 

[kong]

Okay, this is the last thing I'm going to say about this, because I'm just tired of trying to explain it to you. You refuse to see things from my point of view, so I'm just beating a dead horse now.

Little condescending there

You said that 93% tax rates weren't a problem because no business paid that much to their employees. The same thing would happen. Businesses would pay their CEOs like $80,000 per month, and this would end up being a bit less than 1 million a year. The business wouldn't want to pay more than that, because most of it would end up going to the government. There would be a marginal gain... about $80,000 for every month they continue working. They wouldn't earn 1 million and then stop working, because that million would be spread out over a year.

I didn't say that. I said know one paid them, they used tax shelters. When we had 93% marginal tax everyone cheated/creatively accounted their way out.

Big risks demand big returns. We need innovation.

And another thing, if all CEO's make only 80,000 a month who the fuck pays the taxes?

Who invests money once they can only keep 5% of returns? That would be batshit crazy. Wealth would just sit in the bank and all the creative types would sit at home without anyone to take a risk and invest in them.

Long story short, we know you want to take their money, but you can't. You can prevent them (and everyone else) from making money but that's about the best you can do.

Oh come on. We might as well reduce taxes to 5% if that is true.

Back to the laffer curve. I think t* is lower than you do. Economists, France, Sweden, Norway and Finland back me up on this.

I'm going to start basing all everything in my posts around the labor theory of value. That would be pretty similar to what you're doing here. Every cent of profit is a theft from the true owners... the workers!! Tax all profits at 100% and give it back to the rightful owners!! 8(

If you can't profit by owning why work to build capital? I don't get this point.

No. The ultra-rich people in those countries agreed with you.

Ultra-poor people in those countries may agree with you. Whats your point?

No, Senator McCarthy, it is not "communism". 8)

You're losing your touch here.

I didn't say anything about equal wages or equal work. I didn't say anything about government owning all the factories and companies. I didn't say anything about a dictatorship or revolution. It is not communism.

If the government decides where to invest all the fuckin money, who's money is it? If it is their money they own everything they invest in. Dictatorships and revolution have nothing to do with it although they are likely to happen under your government handles investment decisions system.

If the government owns factories (as you described) they will decide how much people will get paid. I'm sure people like you will have their say and we'll all get collectively fucked by equal or better yet "fair" wages.

Bottom line the benefits of capitalism will avoid us if a roomful of government employees decides where the money is invested rather than the market. Call it whatever you want, but you aren't getting it both ways.

The stimulus bill is not representative of all government spending. You can't look at our current government and say that it proves no government can do anything efficiently. Our government is notoriously corrupt and controlled by lobbyists. Look at the New Deal, or the British healthcare system, or the highway system, or NASA in the 60s. There are lots of examples of governments doing things efficiently.

I'll refrain from listing a bunch of inefficient examples, but I think you are starting to get my point. The bigger government gets the more opportunities for corruption there are. The longer a program exists the more bloated and inefficient it is.

I oversimplified that to make the point. Obviously not every single person who earned 1 million would use it to start a business, but I'm sure quite a few would.

Who are these people getting 1m?

The money would be controlled by an agency which was independent from the government (sort of like the Fed), and it would be forced by law to be transparent and accountable. The people who work here would have knowledge of finance and investment, and if the companies they invested in did good, they would get promoted, if not, they would get fired.

So they could invest in a company and then invest in people to buy stuff from that company and so on until our entire country is making a bunch of useless shit.

You don't see the potential for collusion here? Transparency? Sure thats the idea but it won't work in practice. You are either describing government employees making these decisions using public money or private individuals using public money? I though you liked skin in the game (and no your job does not equal skin)?

Drug addiction has it's downsides also. Yes, we should definitely legalize weed, acid, MDMA, and other things which are pretty much harmless and non addictive, but letting people buy meth and heroin at a convenience store wouldn't be the best idea.

The laws against meth and heroin are working so well. I'm glad you are there to make those value judgements. We'll just legalize the drugs you like.

 

[L O V E L I F E]

No, taxing is not the same as transferring bad circumstances to other people.

If it was, the rich people would end up just as bad or worse than the poor people who are benefiting from the taxes.

That is not what would happen, so your analogy doesn't work.

OK - fine - I'll tweak the hypo, so you might finally understand why some people are actually staunchly against taxing the fuck out of the wealthy:

New, Improved Hypo:

If, hypothetically, you were about to get hit by a car, and the only way to avoid your own death would be to push an innocent person in front of you, and that by doing so, instead of dying, you will almost definitely sustain major injuries to both of your legs, both of your arms, to and to your back.

While, the innocent person whom you could choose to push would merely end up with one broken foot.

So, NOW, in THIS Hypo, YOU are in a HORRIBLE situation (the "poor" person), the innocent bystander is in no danger at all (the "wealthy" person), and you have the ability to mitigate the severity of the results to YOU (major injuries instead of death) . . .

. . . but only at the expense of the innocent person's health - as instead of emerging completely unscathed, she will wind up with one broken foot.


So, NOW, in THIS Hypo, YOU ("the poor person") can either:

(1) Do the ethical thing, by accepting your horrible circumstaces;

OR

(2) Redistribute the wealth (health) by mitigating the severity of your negative outcome, but only by causing her a broken foot.

So, here, by choosing Option (2):

(A) YOU end up with a preferable result than you WOULD have otherwise ended up with, if you had chosen Option (1) (major injuries instead of death);

and

(B) SHE ends up in a worse place than if you hadn't pushed her (a broken foot instead of emerging completely unscathed);

and

(C) SHE is STILL far better off health-wise than you are.

Is THAT a better illustration by analogy, as to why it is NOT ethical to push the innocent bystander in front of the car?

That it is NEVER EVER EVER ethical to transfer YOUR bad circumstances/bad luck to someone else BY FORCE?

 

[marsmellow]

Little condescending there

Sorry. I just don't like repeating myself.

I didn't say that. I said know one paid them, they used tax shelters. When we had 93% marginal tax everyone cheated/creatively accounted their way out.

Big risks demand big returns. We need innovation.

And another thing, if all CEO's make only 80,000 a month who the fuck pays the taxes?

Who invests money once they can only keep 5% of returns? That would be batshit crazy. Wealth would just sit in the bank and all the creative types would sit at home without anyone to take a risk and invest in them.

Long story short, we know you want to take their money, but you can't. You can prevent them (and everyone else) from making money but that's about the best you can do.

I have already conceded that 95% is excessive. I STILL don't understand how smaller government and free markets will lead to a more fair distribution of wealth, and that was the whole reason I said all this in the first place, but whatever.

75% would be fair. In a country where most people earn around $35,000 per year, 75% after 1 million is still a big return.

Assume we have the current tax rates, and 50% after $500,000, and 75% after 1 million. Someone who earns 2 million before taxes would take home about 1.3 million after taxes. That is still a very big reward for their risk taking.

Back to the laffer curve. I think t* is lower than you do. Economists, France, Sweden, Norway and Finland back me up on this.

At least one Swedish economist disagrees with you. They said that the best tax rate is 70%.

http://en.wikipedia.org/wiki/Laffer_curve#Research_on_Revenue_Maximising_Tax_Rate

Nobody knows what it REALLY is, so this is kind of a pointless argument to have, anyways.

If you can't profit by owning why work to build capital? I don't get this point.

I was just being silly.

I'm just saying that you're basing everything on these economic theories. You act like these are physical laws that can't ever be broken. A few hundred years ago, many economists believed in the labor theory of value. How can you be so sure that your assumptions about economics aren't wrong also?

Ultra-poor people in those countries may agree with you. Whats your point?

My point is that these countries may have lowered their taxes not because it was the wrong place on the laffer curve, but because of pressure from wealthy people in their country, who didn't like paying taxes.

If the government decides where to invest all the fuckin money, who's money is it? If it is their money they own everything they invest in. Dictatorships and revolution have nothing to do with it although they are likely to happen under your government handles investment decisions system.

If the government owns factories (as you described) they will decide how much people will get paid. I'm sure people like you will have their say and we'll all get collectively fucked by equal or better yet "fair" wages.

No, those kinds of decisions would be left up to the managers of the companies, and if the companies were successful (after a short probation period) they would be made private. The only things the government would really control, would be healthcare, police, utilities, telecommunications, public transportation, and a few other miscellaneous things. There would be plenty of private companies though. The government wouldn't decide what people get paid.

Bottom line the benefits of capitalism will avoid us if a roomful of government employees decides where the money is invested rather than the market. Call it whatever you want, but you aren't getting it both ways.

According to who? You never know until you try. I bet hunter-gatherers would have said similar things about capitalism.

I'll refrain from listing a bunch of inefficient examples, but I think you are starting to get my point. The bigger government gets the more opportunities for corruption there are. The longer a program exists the more bloated and inefficient it is.

HeadOn. Apply directly to forehead.

I never bought that stuff and I still don't know what it does.

In other words, repetition is not convincing to me. You can keep saying this, but unless you explain the reasons WHY you think government is inherently inefficient, and why this problem can never be fixed, I probably won't change my mind.

Who are these people getting 1m?

The most innovative and entrepreneurial people.

So they could invest in a company and then invest in people to buy stuff from that company and so on until our entire country is making a bunch of useless shit.

You don't see the potential for collusion here? Transparency? Sure thats the idea but it won't work in practice. You are either describing government employees making these decisions using public money or private individuals using public money? I though you liked skin in the game (and no your job does not equal skin)?

I never said anything about the part in bold. If you have to make things up and distort my arguments, I must be doing a good job.

By transparency I mean HEAVY surveillance in and around the buildings these people would operate in. Basically like CCTV + CSPAN. And an independent agency dedicated to exposing and publicizing any corruption. And criminal penalties for anyone who would abuse their powers.

I definitely see the potential for problems, but I think they would be minimized by the things above.

The laws against meth and heroin are working so well. I'm glad you are there to make those value judgements. We'll just legalize the drugs you like.

I didn't say that we should keep the laws we have, but I know enough drug addicts to realize that we can't just let people walk to 7/11 and buy seriously addictive drugs. I'd probably just let drug companies make them instead. So people can get them, but they have to jump through a bunch of hoops to do so. Kind of like Oxycontin and Fentanyl patches now. And I also would never throw anyone in prison for using or possessing them.

So, NOW, in THIS Hypo, YOU ("the poor person") can either:

(1) Do the ethical thing, by accepting your horrible circumstaces;

OR

(2) Redistribute the wealth (health) by mitigating the severity of your negative outcome, but only by causing her a broken foot.

Yes, this is a much better representation of what I'm talking about. I do see why you think the way you do, but I still think it is better to choose (2) because there ends up being less overall harm to people. If there is a choice to prevent a greater injury by causing a smaller injury, I think that is ethically okay, because it minimizes the amount of suffering everyone has to go through. That is the whole goal of my "wealth redistribution" schemes anyways. To minimize suffering and maximize happiness in society.

 

[Cyc]

Sorry LL, with all due respect I'd also choose (2) and I would expect anyone else to do the same to me if the roles were reversed.

There is no ego involved in the decision. Someone else's pain is worth no more or less than mine. All things being equal, I'd push the person and apologize and compensate them if possible. I'd expect exactly the same in return and knowing the circumstances, would not fault them.

In fact, given the option of breaking my own foot to save a stranger serious injury, I would accept the broken foot gladly, again with no ego.. just simple utilitarian logic.

 

[L O V E L I F E]

With respect, Cyc, why do you think it's OK to do that WITHOUT the other person's consent?

Following that line of reasoning, do you think it's ethical (NOT legal - ethical) to steal items which, in your opinion, are undervalued, and then "compensate" the person from whom you just stole?

 

[L O V E L I F E]

What if, hypothetically, I get 100 utils from punching Bob in the face, and I know that Bob would only lose 90 utils if I did so?

Should I be allowed to punch him in the face WITHOUT HIS CONSENT?

If so, why?

 

[L O V E L I F E]

I suppose this is simply yet another Individualism/Freedom vs. The Greater Good exercise, and personally, I believe that FREEDOM trumps overall group utility.

As I recall, we were guaranteed (in the US, at least) life, liberty and the pursuit of happiness.

Not, "maximizing group utility."

 

[L O V E L I F E]

And at the risk of beating a dead horse - this is EXACTLY the point I've been trying to make:

Yes, there are honorable, non-self-absorbed people who would WILLINGLY sacrifice their own foot, in order to save a stranger's life.

That's very laudable.

BUT . . . that is a perfect example of CHARITY / PHILANTHROPY.

It's great that some people would CHOOSE to trade their foot to save the life of another.

But they certainly shouldn't be FORCED to do so.

Four consecutive posts by LL.

Watch your back, DiMaggio!

 

[Cyc]

Since hypos seem to be the theme du jour. Given the option between your life and someone else's, would you always choose suicide? I mean, even if the other person was 90-years-old, or a convicted murderer, or severely disabled in some form?

I don't mean to push the issue too far, but I seek to understand at what point (if any) we can act judiciously on one person's behalf at the direct expense of someone else.

 

[kong]

Sorry. I just don't like repeating myself.

Some of this stuff is a bit complicated, I'm not the best reader or communicator...

I have already conceded that 95% is excessive. I STILL don't understand how smaller government and free markets will lead to a more fair distribution of wealth, and that was the whole reason I said all this in the first place, but whatever.

I don't think free markets allocate wealth more fairly exactly. Although hard work is often rewarded some people work their ass off and don't see much of a return. I think it creates the most total wealth...I think the average poor person is more wealthy in a free market than a planned one. That doesn't say anything about relative wealth however. Obviously if (and its an *if* I'll admit) a poor person can maximize their total wealth that should be societies goal, not maximizing relative wealth. I think taxes as high as you are suggesting will hurt poor people more than it will help them by hurting the overall economy.

75% would be fair. In a country where most people earn around $35,000 per year, 75% after 1 million is still a big return.

Assume we have the current tax rates, and 50% after $500,000, and 75% after 1 million. Someone who earns 2 million before taxes would take home about 1.3 million after taxes. That is still a very big reward for their risk taking.

Depends if they take risk or not. Take an investor with a large sum of money, they will have to pull their money out of the market. It would be crazy to take that risk when they only get a 5% or even 30% return. There is no way to justify it.

At least one Swedish economist disagrees with you. They said that the best tax rate is 70%.

http://en.wikipedia.org/wiki/Laffer_curve#Research_on_Revenue_Maximising_Tax_Rate

Nobody knows what it REALLY is, so this is kind of a pointless argument to have, anyways.

I think it is an extremely important debate. Especially for someone like you who believes in a high degree of government involvement. Getting t* right will make or break you.

The other point we haven't much discussed is who will pay this tax, the consumer or the firm. I can tell you proctor and gamble will pass most of the tax onto the consumer because demand is inelastic. So poor people will pay most of any tax increases on companies making tooth paste etc..thats pretty cut and dried economic theory.

I'm just saying that you're basing everything on these economic theories. You act like these are physical laws that can't ever be broken. A few hundred years ago, many economists believed in the labor theory of value. How can you be so sure that your assumptions about economics aren't wrong also?

Just because I don't agree with you often doesn't mean I'm not open to the possibility that I'm wrong.

No, those kinds of decisions would be left up to the managers of the companies, and if the companies were successful (after a short probation period) they would be made private. The only things the government would really control, would be healthcare, police, utilities, telecommunications, public transportation, and a few other miscellaneous things. There would be plenty of private companies though. The government wouldn't decide what people get paid.

According to who? You never know until you try. I bet hunter-gatherers would have said similar things about capitalism.

We aren't hunter-gatherers. The free market is capitalism. Profit motivates every possible person who has money and knowledge to help determine who gets invested in, how much, and at what rate. That is an effect a room full of finance degrees can't replicate no matter how big a room it is.

In other words, repetition is not convincing to me. You can keep saying this, but unless you explain the reasons WHY you think government is inherently inefficient, and why this problem can never be fixed, I probably won't change my mind.

Its because there is no competition and for all practical purposes a bank check. No one can compete with a government that can spend as much money as it wants. So the inefficient parts of government don't "go out of business" like they do in the private market. I think I've covered collusion, but I'll say it again. The bigger the governments budget the more opportunity there is for corruption. Influence by big business is not relegated to tax policy, no-bid contracts, favoritism, subsidies. Lets talk about fair. Is it fair that dairy cows in europe get $2 a day in subsidies when much of the world gets less than a dollar?

Another problem is skin in the game. Large companies will require their executives to own a substantial amount of stock which motivates them without the need for much monitoring. Government is a different story, since it can't go out of business everyone will always get their paycheck and pension no matter what. There isn't that knowledge in the back of your mind that your company could go under. So employees must be monitored much more in government. This is expensive. It is proven that people shirk when given the opportunity. By its very nature the free market kills off the shirking by pulling investment from inefficient operations. In government that effect doesn't exist so organizations must monitor and be monitored to a greater degree.

The most innovative and entrepreneurial people.

Like senators sons.

I never said anything about the part in bold. If you have to make things up and distort my arguments, I must be doing a good job.

I didn't say you said that. I was suggesting that was a likely outcome of the government running investment.

By transparency I mean HEAVY surveillance in and around the buildings these people would operate in. Basically like CCTV + CSPAN. And an independent agency dedicated to exposing and publicizing any corruption. And criminal penalties for anyone who would abuse their powers.

Its a pipe dream.

I didn't say that we should keep the laws we have, but I know enough drug addicts to realize that we can't just let people walk to 7/11 and buy seriously addictive drugs. I'd probably just let drug companies make them instead. So people can get them, but they have to jump through a bunch of hoops to do so. Kind of like Oxycontin and Fentanyl patches now. And I also would never throw anyone in prison for using or possessing them.

If recreational drugs were legal I think drug companies would invent enough cool alternatives that things like meth wouldn't be near as popular as they are now anyway.

If you don't throw people in prison heroin and meth will be widely available anyway, why make people jump through hoops when some of them will buy from a dealer and we all know the problems that causes.