I believe the comparison is missing out on what government benefits the people are getting. That is to say your total real "income" isn't just a function of how much you make and keep but also what value of service you get from your taxes. Most scandinavian countries tend to be big on government services (universal health care, welfare, etc) from what I've read.
What this graph then is showing is that not only do Sweden's poor get to keep as much of their money as the US poor but they get a ream of benefits on top of that.
Redistribution of wealth isn't a goal in itself, instead the desire is to avoid the situation where poverty is a point of stable equilibrium. There are a lot of little things that make it substantially MORE expensive to be poor than otherwise. Insurance is harder to come by which means one major illness can knock down all progress. Loans, even small ones are much more expensive, you need to prepay for everything etc.
An infrastructure that makes it easier for people who have had bad luck or even made a lot of bad choices in the past to be mired in poverty or have their children at a major disadvantage is the intent. Not sure it is "redistribution" to have the wealthy pay more taxes that go into national infrastructure, including education, basic insurance etc.
Also, a strong middle class has been very good for our economy and that middle class is more likely to develop with the combination of a strong infrastructure yet not too burdensome taxes on those at or below the middle class... which means some higher taxes for the very wealthy.
Assuming that there will always be a percentage of people that are stuck in poverty and will stay there, no matter what country they live in. So I am stating that there will always be poverty and that it will never be eliminated. The goal in a civil society would be to keep these people from revolt, social unrest or wildly criminal activities.
If anyone has ever been "stuck" in the poor zone, where one never seems to get out of debt but has the desire to improve one's circumstances, the Earned Income Tax Credit is a safety net that keeps wheels on cars, and pays for necessities like new shoes that might not otherwise be affordable. It is the difference between sinking and swimming. A sense of dignity or hopelessness.
The best opportunity for self improvement financially speaking comes from education and the conditions that cause education to thrive.
And at some point there is always the possibility that the number of poor and dissastisfied could harm the rich through social revolt.
One creative solution has been offered by Muhammad Yumus, who gives out small loans on the basis of need and trust. Essentially not asking for assurances on a loan, not giving loans to the already rich, but giving out loans to the very poor as an opportunity for them to improve themselves.
Microfranchising is an extremely exciting and creative solution to helping people out of poverty, and a solution that counts on PEOPLE, and their personal motivation. I think it is a fabulous idea.
The biggest problem with extreme wealth disparity is the effect it has on democracy. In our society money equals political power. This can be seen in a variety of ways. Some examples are political contributions, "think tanks" funded by wealthy backers, and promises of future employment to government officials.
So instead of one man one vote we get one dollar one vote. The results of this have been that our national priorities have been distorted to favor the interests of the wealthy. Postulating a cost free example where there is no impact on anyone else when the rich gets richer is pointless, there is no such society. Instead we get a semi-secret, decade-long effort by 18 super wealthy families to abolish the estate tax. This is something that only affects them and members of their class. The lost revenue to the government will result in either reduced services, higher taxes for everyone else, or a higher deficit (or a combination). Only their extreme wealth permitted this program to go forward. They set up think tanks, promoted their interests in media companies that they own and bribed politicians. They even managed to persuade the libertarians that this is a "good thing".
A more equitable society is a more democratic one. I lay out the moral, economic and other reasons in this short essay:
There are costs of living in the US that the families in most of those other countries don’t have to cover. It's not how much money you make - it's how much you can keep after you pay all the dues. I wonder what the graph would look like once you factor in local property taxes, private schools, healthcare, college tuition and upkeep of multiple cars, to name a few.
PPP means the cost of living is supposed to be taken into account. For example, as was remarked in the comment thread I linked to, food is cheaper in the US, while health care is more expensive. Housing is also cheap in the US if you measure in terms of per square foot (interior) or per acre (land).
The supposed "errors" in PPP, by design, are *supposed* to cancel out. PPP weights the cost of various goods and services in various countries according to how much of them a typical consumer buys per year.
It ain't perfect, but as I said: it's easy to criticize, and surprisingly hard to come up with something better.
Not sure it is "redistribution" to have the wealthy pay more taxes that go into national infrastructure, including education, basic insurance etc.
If these items were paid for with user fees, then it wouldn't be redistribution. But to pay with them from general tax revenues from, say, the income tax is *definitely* redistribution.
Roads are paid for mostly with gas taxes today. To a first-order approximation, that's not redistributive -- you pay *roughly* in proportion to how much you drive times how big your car is (fuel efficiency and vehicle weight are correlated, and vehicle weight determines the damage to the roads). And yes, there are secondary factors like the negative externality of traffic, but this could be solved if we moved from a gas tax to a high-tech system that tracked your driving and sent you a bill every month taking into account whether you drove at peak hours or off-peak hours.
If, instead, we were to pay for roads with income taxes, then we *would* have redistribution. Since income taxes in America are now negative up to about $25000 in income (source: http://www.taxfounda... ), people earning less than $25K/year would be paying *nothing* for roads, while people earning $75K/year or more would pay a disproportionately large amount.
Also, a strong middle class has been very good for our economy and that middle class is more likely to develop with the combination of a strong infrastructure yet not too burdensome taxes on those at or below the middle class... which means some higher taxes for the very wealthy.
A progressive income tax is a very inefficient way to fund infrastructure, indeed, a very inefficient way to fund *any* part of government. The most efficient way to fund infrastructure would be through user fees (the gas tax is a good example). A VAT would also be very efficient. A sales tax, somewhat less so. An income tax, less so again. And a progressive income tax, least efficient of all.
High marginal tax rates, especially taxes on capital income, discourage investment, because they decrease the after-tax rate of return on investment. (In general, income taxes, unlike sales taxes or VATs, favor consumption over investment.) Since economic growth depends in large part on an increase in the nation's stock of capital, and capital increases every year by investment minus depreciation, taxes that discourage investment will have a negative impact on economic growth.
recommend this one because it's on the front page to begin with. But all the diaries that appear on the right side in the recent diaries section would have a button "Recommend Diary" under the search box.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
It all depends on what they include in the basket.
However, it is worth noting that PPPs do not account for the cost of non-market social goods, such as education, health care, or child care, which are much cheaper or completely covered by public spending in many European countries relative to the United States.
International comparisons; How does the United States stack up? p. 5.
These are big ticket items that most families *will* include in their shopping baskets at one point or another.
So, you have a use tax for those in poverty to access fire fighters and police officers? Likewise, we are all 'using' military defense at the same rate. You are moving towards what is effectively a flat tax. Not a flat RATE tax but an actual flat AMOUNT that would absolutely destroy most poor families. A family with 2 children would be paying over $10,000 a year in education when we as a society certainly benefit from having a well educated population.
Definition wise it isn't redistribution when distribution isn't occuring, it is investment. I don't own 0.0000001% of the roads, I get to use the roads that belong to the country so the tax money, while I have gained a benefit, has not been distributed to me.
presented in that graph. We also often hear about superior standard of living in various scandinavian countries including their average income which obviously doesn't take taxes or cost of living into account.
Oh but those factors are of course unimportant.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
There is no perfect way to do these measurements. I mean, I haven't even touched (in this post) on whether you should be measuring wealth, income, or consumption.
I think there is some additional value to be had in looking at objective standard-of-living metrics, along the lines of "what percentage of people have air conditioning in their home?" "What percentage of people have a dishwasher?" "What percentage of people have cell phone service?" Etc.
You could probably come up with a list of 100 or more objective questions like this to measure someone's standard of living. Comparisons are still not going to be perfect (Minnesotans need heating and Texans don't; Texans need air conditioning and Minnesotans don't; and here in California you can get by without either one), but nothing's ever going to be perfect.
If anyone knows of any detailed research on this, I'd be interested to see it.
Let's consider the simplified case of a government that does exactly three things: national defense, roads, and redistribution of wealth. In order to do these three things, it also needs to levy taxes to pay for them.
What is the most effective way to run this government? Let's look at each item independently.
In economic jargon, national defense is a "nonexcludable public good." If we spend money on it, it affects everyone in the country, whether they like it or not. It is not meaningful to talk about "user fees" for national defense, because *everyone* "uses" national defense. The same is true of police and fire protection, because the police are protecting me from criminals at any given point in time whether I like it or not, and the fire department will come to my house to put out the fire and save me whether I like it or not.
Aside from maybe fining people who set off a fire alarm when there's no fire, putting a user fee on these things would just be silly.
Roads, on the other hand, are a little different. We *can* have people pay for the roads in proportion to how much they drive and the weight of their car -- people who drive more or who drive a larger care are causing more wear and tear on the roads. If we don't charge people different amounts depending on how much they drive, we will have the "tragedy of the commons" -- people will abuse the roads and drive *too much*, because it's easy to shrug off the cost of building and maintaining the roads as Someone Else's Problem. But it's *not* someone else's problem! It's *everyone's* problem if the roads are covered with potholes and clogged with traffic. If done right, putting a user fee on the roads benefits everyone, because people now have to pay for the costs they are imposing on everyone else who uses the roads.
For redistribution of wealth, why make things complex? Let's keep it as simple as possible. I linked to Murray's new book in the other thread -- let's just use his proposal as the baseline. Every month, everyone gets a direct-deposit check for one-twelfth of $10K. Do whatever you want with it. $10K too little or too much? Fine -- come up with your favorite number. The plan is flexible and we can debate how big or small the "safety net" should be. We could also expand on Murray's proposal by giving people an additional check for each child under the age of 21. Maybe you get $10K a year for yourself, $10K a year for your spouse, and $5K a year for each kid. Again, feel free to tweak the numbers however you see fit.
Finally, we need taxes to pay for all this stuff. A VAT is generally believed to be the most efficient way for the government to collect a given amount of revenue, i.e., it has the smallest negative effect on the economy. So we set the VAT at whatever rate it takes to pay for defense plus the welfare system. (The roads are already paid for through user fees or gas taxes.)
Isn't this the best of all worlds? We provide national defense, and pay for it through a VAT. We provide roads, and pay for them through user fees. And finally, we provide a welfare system that redistributes wealth, and pay for it using the VAT.
All that's left is for people to argue about the numbers. You can provide more generous welfare benefits -- you just have to increase the rate on the VAT to pay for it. If benefits are stingy, maybe we'd have a 10% VAT. If they're generous, maybe we'd have a 30% VAT.
What's there to complain about? How could you improve on this general framework without making everyone worse off?
If the complaint is that the user fees on roads hurt the poor, I'm not seeing it. Suppose the average person ends up paying $500 a year to the government in road user fees. Then just set everyone's welfare check to $10500 rather than $10000 a year. No matter what the user fees come out to, you can offset them by setting the size of the welfare checks appropriately.
Postulating a cost free example where there is no impact on anyone else when the rich gets richer is pointless, there is no such society.
This is zero-sum thinking: the belief that you can't make someone better off without making someone else correspondingly worse off.
But we don't live in a zero-sum world. Every day, I and the other 300 million people in this country make countless economic transactions with other people. By and large, these transactions make both parties better off than they would have been had the transaction not occurred.
When I go to the grocery store and buy, say, a package of steaks for $10, the grocery store benefits: they may have bought the meat from their supplier for only, say, $5, and they make a profit. And the steaks are worth more than $10 to me, as a simple thought experiment will prove: how much would they have to cost before I'd stop buying them? My guess is maybe $20, at which point it's too expensive for the taste and I'd buy the lamb or the king crab legs instead.
I get $20 worth of value and only have to pay $10 for it. The store gets $10 for a product that only cost them $5. I win, the store wins, and no one loses (well, except for the hapless cow who had to give his life for the cause of my tastebuds).
Yes, this is a simplistic scenario, but the analysis I've provided here can be applied to a surprisingly wide range of economic transactions. And the analysis shows that it is actually surprisingly easy for the government to put policies in place that harm everyone and benefit no one, or that have costs that vastly exceed their corresponding benefits.
An obvious example of such a policy in the US today is farm subsidies: the cost they impose on consumers of food is many times larger than the benefit to farmers.
The concept is that all wealth is a creation of society, not individuals, because individuals are worthless without society. Put a baby on a desert island to raise himself, and you'll see my point proven quickly.
Thus, the reason behind one's economic status has more to do with society than with the actions of that individual -- whether rich or poor. Donald Trump would have likely become a crack tycoon if he'd grown up in the projects. None of us are responsible for our circumstances of birth, which are the most determinate factor of our lives.
Therefore, income distribution should be handled democratically, not plutocratically. A millionaire should have no more influence on the process than a gutter junkie, because both are results of the machinations of society. There is nothing one does that is not done as part of society, so we are all beholden to each other and responsible for each other, so any talk of the "theft" of taxes is simply laughable.
It is only through society that we succeed, and it is only through this that we can express our true individuality and freedom.
Not regressive -- a flat rate. Yes, a VAT is a consumption-based tax, but it is a classic economic fallacy to say that "the poor consume more as a percentage of their income than the rich" (an extraordinary claim that requires extraordinary evidence). This view rests in part on a statistical fallacy, because your income often varies far more per year than your consumption. In the long run, for any person, income and consumption should match up -- this is called the Permanent Income Hypothesis. There is some experimental evidence either way on the Permanent Income Hypothesis, and overall, it seems to hold up in many but not all cases (real people don't always behave rationally).
Anyway, even if it was "regressive", so what? We could make up for that by setting the size of the welfare checks appropriately. Tax evasion is difficult with a VAT, and both the VAT and the welfare program I've proposed have low administrative overheads regardless of how you set the numbers.
but it is a classic economic fallacy to say that "the poor consume more as a percentage of their income than the rich" (an extraordinary claim that requires extraordinary evidence).
That doesn't seem particularly extraordinary at all. Assuming that the poor spend basically the entirety of their income (which with negative savings rates is actually an underestimate) and that the rich do not (by virtue of having both savings and investments) then it is automatically required that the poor consume more as a percentage of their income than the rich.
it's also Norway (even more so than Sweden) but I am very doubtful about their "quickly-growing economy".
I've spent over a year and a half in Iceland (which is somewhat similar to those two countries) and though their salaries were comparable to US (slightly lower) their cost of living was twice as expensive as ours.
I hear it is very similar to Norway and Sweden. So in reality people have half the money available to spend which sucks even if you take all the "great social services" into account.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
Standard of living includes what happens when you have no money, not just how well you live when you do have some.
In a laisse-faire system, you would have private unemployment insurance, medical insurance, theft insurance, war insurance, etc., and having paid the premiums for all these policies, surely you would count their value toward your overall comfort in life. Knowing you have fire insurance makes owning a fireplace more enjoyable.
As for the "quickly growing economy" of Sweden, it's like Olbermann's "quickly growing ratings", i.e., growing fast, but still smaller than the big fish (the U.S. and FOX News, respectively). They are growing fast, but still have a lot of catching up to do with the rest of the Western world economically. Their growth, natch, is due to liberalism; one more indicator that the American left is the one group on the correct path, and those to our left and right improve their policy positions only in imitation of our ideals.
Now both of them have been "liberal" in your sense of the word for a long time so technically they should've been well beyond us due to their liberalism. It's not like it is a new phenomenon in those countries. So your logic does not hold.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
If, over my lifetime, every year, I earn more money than I spend, I die rich. What's the point? Either I should have spent more money while I was alive, or I should have spent less time working.
Giving the money to my heirs doesn't solve the dilemma, because now they too are rich, and they too now either need to spend the money or *also* die rich.
In the long run, income and consumption have to balance out. If my consumption exceeds my income for too long, I go into debt, and eventually the banks will wise up and stop lending to me. And if my income exceeds my consumption for too long, I'm stupid because I die rich.
The reality is that rich people *do*, in most cases, spend down their savings at some point in their life -- even if only by giving it away in their will.
I consider the suggestion that all of the hard work I've put in over my life -- all of the delayed gratification, all of the 70- and 80-hour weeks, all the all-nighters, all the extra homework and after-school sessions to take more advanced classes, all the times when I gave it my all rather than just putting in the bare minimum effort to get by -- that all this was just the "machination of society"... well... quite insulting and demeaning, to put it kindly.
I've worked my ass off to get to where I am in life today, thank you very much. I've never taken so much as a dime from the government or committed a crime more serious than speeding. I am a responsible, law-abiding citizen. And when the government tells me that my "reward" for all this hard work is to pay it more than 40% of what I earn, all so that I can drive on pothole-covered roads that needed to be resurfaced 5 years ago, that makes me angry.
It is only through society that we succeed, and it is only through this that we can express our true individuality and freedom.
I most emphatically disagree with this statement. The idea that I gain "individuality and freedom" by subjugating myself to "society" is *extremely* horrifying. I believe the accurate term for any ideology wherein the "society" is believed to trump the individual is "totalitarian."
In the words of Margaret Thatcher: "There's no such thing as society. There are individual men and women and there are families."
"Society" is nothing more than the billions of daily interactions between individuals.
While initial inequalities and societal biases may have an affect, it really still is hard work that matters. Effort counts. Attitude counts. It's not easy or fun to make your own way in the world. But that is what is expected of an adult.
Why these facts are imponderable to most of my 20-ish relations is baffling. I guess they expect society to give them what they want or think they need, just like their parents did.
"The human race divides politically into those who want people to be controlled and those who have no such desire." --R. Heinlein
Your example is classical economics, which has become obsolete. Economics is based upon ignoring externalities. The two most common being the depletion of raw materials and the ecological burden of pollution.
There is only one permanent input source to the world - solar energy. Everything we consume ultimately derives from this (nuclear power is a small exception). Fossil fuels are stored solar energy. Food is transformed solar energy. Right now we are using up a reserve that has been built up over a period of millions of years. We will probably exhaust it within the next two centuries. So what took millions of years to accumulate will be depleted in 300 years.
Now we can chose to ignore this for the next few decades and those at the top of the economic ladder can rationalize their unsustainable behavior using various self-serving economic models, but as the conflicts in the middle east show, discord happens way before the actual shortages start.
So the idea that extracting raw materials from the earth and converting them into another form of our design generates wealth or a profit is based upon an incomplete model. The hidden costs are just being pushed into the future when the full value of the nonrenewable resource will be imposed.
So to use an example similar to yours: A worker in Nigeria gets $2 a day to extract oil. Nigeria gets royalties on the exports. The Shell Oil Co. makes a profit refining and selling the fuel. Everyone comes out ahead. However that oil in the ground can never be replaced. Where does that cost show up? In the future. Sorry it's a zero sum game, it just that some of the players haven't been born yet.
This fits in with the libertarian mindset. Reagan said "posterity doesn't vote".
Your philosophy is the standard one in the west these days, but is of fairly recent vintage.
The idea that one should work to get ahead arose with the industrial revolution. Before this one was born into one's station in life and expected to stay in it. This is still the norm in much of the world.
As the need for factory workers increased a social structure was needed to justify the change in expectations. The most influential being the philosophy of Calvin (redemption through good works). This is all explained quite well in the classic work of Max Weber: "The Protestant Ethic and the Spirit of Capitalism" (Wikipedia has a good article).
Work without reward is slavery, so along with the justification for work beyond what one needed to survive arose the idea of material wealth. So one's excess production is split between the capitalist and the worker. The worker gets enough extra of his labor to be able to purchase consumer items. The balance between how much the worker gets and how much the capitalist has been a source of conflict for several centuries.
One of the side effects of the capitalist system has been a shift away from communal thinking to individualism. This has gotten to the point in the US where many now resent any attempts to maintain any communal societal structures. This is best shown in the attitudes of Libertarians but also spills over into various types of social conservatives.
The result has been an attack on programs like Social Security, welfare, food stamps and health services for the indigent. Some object because their taxes are too high, some because of Calvinism (in its modern forms), and some are hypocrites who are basically just greedy.
In point of fact, the US is wealthy enough that everyone could be provided for, even the slackers. It simply requires a change in the way wealth is created and taxed and a shift towards more social service and less militarism. A society that degenerates into "everyman for himself" is little better than a pack of hungry dogs.
the question was a simple one of whether the poor consume more of their income. They do, that's pretty much a given. When you are poor you don't have money to spend on the other things like savings and investments. When you are rich you do.
For the poor
Income =< expenses
For the rich
Income > expenses
or they aren't rich for very long. Mathematically there is no way that the ratio of Expenses/Income for the rich can be equal to or greater than that for the poor. Esoteric philosophies about "permanent income" are nice but not really the point.
Um, liberalism means opening up to free markets, not instituting socialism. There are no socialists among American liberals, in case you haven't noticed.
Who made you such a hard worker? Your parents, i.e., society.
Sure, once we've reached our teen years you're pretty much on rour own, but you owe your birth and social programming to anyone but yourself.
I realize that paying taxes is considered subjugating oneself in your eyes, but this is just silly.
An ideology that puts the needs of society ahead of the individual isn't called totalitarian, it's called "natural law". Humans are by their nature social animals; we cannot survive without a society to make us who we are.
As for your bizarre idea of what "society" is . . . if there are only individual men and women, and families, who invented English? Who developed our nation's laws? These things were done collectively, as were all great things that benefit us as individuals.
There is nothing inside your head that didn't come from somewhere else, that wasn't put there by someone else. There is a cause for every effect, and to claim that you exists as you are because of some kind of self-imposed Will, i.e., "just because", is to claim that a thing can happen without a cause. If you are a hard worker, it's because someone made you that. You very easily could have been made into something else, will or no will.
"The idea that I gain "individuality and freedom" by subjugating myself to "society" is *extremely* horrifying."
Upon reflection this is an absurd statement. So, subjugating myself to society's taboo on, say, armed robbery is "horrifying"? Why should I not be free to do as I please? Why should others' need for safety take away my right to act freely?
No, taking away people's rights to act freely gives us more liberty. When the right to murder, surely one of nature's most universal rights, is withdrawn by society, each of us becomes more free. This philosophy is the basis for all law, in any nation on the planet. So sufficed to say, you are somewhat out of touch on this one.
Income = expenses, that would make sense. But in the long run, i.e., over your lifetime, not just a single year, how can income be less than expenses? The only way you can spend more than you earn is by drawing down savings (which would have meant income > expenses in a previous year), or by taking a loan.
Banks aren't stupid. Banks have extensive credit scoring systems to predict whether someone is likely to have the financial capacity to pay back a loan. Banks know your income and your level of debt when you apply for a loan, or even a credit card. If you earn $20K a year and spend $25K a year, this won't last long. The banks *will* cut you off from further credit at some point. You can declare bankruptcy, but then good luck getting credit ever again.
If poor people *on average* spent more than they make every year, and this wasn't just a temporary thing until they got a raise or two and could pay back the loans, banks would never lend to people below a certain income. Or, maybe a stupid bank would, but probably not for very long.
For the rich Income > expenses or they aren't rich for very long
I think you're mixing up the usage of the word "rich" to mean both wealth and income.
The Permanent Income Hypothesis *DOES* predict that you will find that low-income people *appear* to spend more than they make, and that high-income people *appear* to make more than they spend. But it also claims that this is a statistical anomaly that is caused by changes in your income over your lifetime, and that the real marginal propensity to consume is 1 for all income groups: every $1 of extra income over your lifetime means $1 of extra consumption over your lifetime.
Real empirical research shows mixed results: people do not always behave as the PIH would predict, for a variety of reasons (such as unpredictability of future income). But we don't need anything nearly as strong as the PIH to refute the claim that marginal propensity to consume varies by income. All you really need to do is look at peoples' habits during their school years, working years, and retirement years. For example, people go into debt in their school years, pay it off and even build up some savings in their working years, and then live off the savings in retirement and eventually draw down most of them. In total, you probably make and spend about the same amount over your entire lifetime.
I think I've said enough on this topic... quite beaten to death already.
Huh...? My introductory micro textbook had a whole chapter on externalities. (So does every other textbook.) Micro *beyond* econ 101, in fact, is basically all about those other factors that make things "more complicated" than the basic models everyone learns in micro 101, whether we're talking about externalities, asymmetric information, monopolies/monopsonies, monopolistic competition, agency problems, moral hazard, game theory, behavioral economics, etc. If it wasn't for these things, the science of economics would be quite boring indeed.
There is *extensive* economic research on depletion of raw materials and long-term price trends in commodities, as well as on optimal strategies for best making use of limited resources over time.
Yes, of *course* there's a cost when you extract limited resources from the earth. No economist, regardless of their political views, would dispute that.
But does it automatically follow that we should take the oil reserves of the planet, divide by the number of years it took for those reserves to form, and then use no more than that much oil per year? No, it doesn't. In fact, this would be a very foolish way to do things -- it would benefit neither us nor our descendants -- because then the oil that *is* there just sits in the ground unused!
A clearly better strategy, for example, would be to have a rule that we will extract precisely 0.5% of the remaining oil each year. Each year we would extract a little bit less oil than we did the previous year. Eventually, after a long time, we would reach an equilibrium where we consume the same amount that naturally accumulates per year.
If we did this, then it would be highly predictable each year how much oil we will have available. The price of oil would increase each year to reflect the slightly smaller supply. The incentive to use it efficiently also increases each year as the price goes up.
Is this the optimal strategy? No, it *also* might not be optimal, for various reasons. But it's clearly superior to not depleting the oil at all.
I'm just scratching the surface here. Again, I think you might be rather surprised how much a lot of very smart economists have already written about this exact topic.
One of the side effects of the capitalist system has been a shift away from communal thinking to individualism.
True, although that's not the only cause in this shift in thinking. I would also credit the shift from a pre-Enlightenment worldview -- man exists to serve God, man exists to serve the king or tribal leader -- to an Enlightenment worldview -- man exists for his own sake, man's calling in life is the pursuit of knowledge, truth, beauty, and his own happiness.
To call this an "Enlightenment" viewpoint is not strictly accurate, because at least some of the ancient Greek philosophers also had similar views, but I'm using the labels to represent classes of viewpoints, not periods of time in history.
The shift from pre-Enlightenment views ("communalism") to Enlightenment views ("individualism") is, at the risk of painting with a very broad brush, the progress of man from "slavery" to "freedom".
A society that degenerates into "everyman for himself" is little better than a pack of hungry dogs.
Quite the opposite. I have very little to gain and risk losing everything if I kill or steal. If I work harder at my job, on the other hand, not only do I gain material rewards for myself, but *everyone else* wins also, because my employer is able to sell better products at lower prices.
If I were to quit my job and devote my life to helping and serving the poor, I would actually *harm* the poor (and everyone else on the planet) by doing so. That would be an exceedingly ineffective use of my talents.
The beauty of the capitalist system is that it *aligns* people's interests. When I pursue my self-interest, they win. When they pursue their self-interest, I win. It's, again, the difference between a zero-sum and a non-zero-sum view of society. Every day at work I create wealth for myself *and* for everyone else on the planet. That wealth doesn't get subtracted from someone else's tally somewhere -- it is created out of nothing.
In the words of Adam Smith: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love."
From numerous remarks in your post, you seem to be presenting a position of philosophical determinism (as opposed to free will).
Let's suppose determinism were true. If so, forget politics -- even ethics becomes meaningless, because ethics attempts to answer the question "What should I do?" or "What is the best/right/proper way to live?". But this question presupposes choice, i.e., the idea that there is more than one way for me to live, and that I must choose between the two.
But wait! We can go one step further. Epistemology falls apart also, for epistemology asks "What should I believe?" And this, too, presupposes choice, i.e., the idea that there is more than one point of view that I can believe, and that I need to choose which one I ought to believe (which one is correct or incorrect).
To accept philosophical determinism is an act of choice. Thus, philosophical determinism is self-refuting.
There is a cause for every effect, and to claim that you exists as you are because of some kind of self-imposed Will, i.e., "just because", is to claim that a thing can happen without a cause.
Actually, yes, as a matter of metaphysics, I *do* claim that at least some things must happen without causes, i.e., Aristotle's "Uncaused Cause."
There is nothing inside your head that didn't come from somewhere else, that wasn't put there by someone else.
This, too, seems a rather shocking claim -- is this not a complete denial of the existence of creativity and the possibility of independent thought?
Humans are by their nature social animals; we cannot survive without a society to make us who we are.
Provably false -- humans can and do live in complete or nearly complete solitude at times. It isn't usually a *desirable* way to live, for *many* reasons, but it has happened.
I realize that paying taxes is considered subjugating oneself in your eyes
No, that's *not* what I claim. What I oppose is the claim that I "owe something back to society." What I find insulting is the claim that my success is attributable to the actions of others and not to my own.
the needs of society
"Society" doesn't have "needs." Only individual people have "needs." And if someone else's "needs" can take precedence over my rights, apparently my "rights" don't mean very much.
These things were done collectively
If by "collectively" you mean "by large numbers of individuals", then yes.
[...] as were all great things that benefit us as individuals.
But to claim that "all great things" are developed "by large numbers of individuals" is disrespectful to the many individuals who, through their personal actions, have made outstanding contributions -- far above and beyond the norm -- to this world. For that matter, it is disrespectful to the smaller but still significant accomplishments made on a day-to-day basis by the billions of *normal* people who work each day to make it better than the last.
This, indeed, is one of the crucial defining choices we make in life: either we move forward and act to create a better tomorrow, or we sit on our laurels and do nothing and resign ourselves to inevitable decline.
More briefly: you can be part of the solution, or you can be part of the problem.
There is no "right to murder." And it's not because there is a "need for safety" that takes precedence over the "right to murder" the "right to steal" -- it's because there *is* a "right to life" and a "right to property" that there is no such thing as a "right to murder" or a "right to steal" in the first place, and cannot be.
Rights, by their nature, cannot conflict. Society does not take away my "right to murder"; I never had it in the first place. All I really ever had was a right to self-defense, which is a subset of my right to life.
I admit that I am not formally educated in economics, but I can gather that in regards to philosophy, neither are you. Although I have not yet settled the debate between determinism and free-will in my mind, it is not as simple as you are making it.
Let's suppose determinism were true. If so, forget politics -- even ethics becomes meaningless, because ethics attempts to answer the question "What should I do?" or "What is the best/right/proper way to live?". But this question presupposes choice, i.e., the idea that there is more than one way for me to live, and that I must choose between the two.
So? That is an after-effect and does not disprove determinism. Just because the consequences are bad does not mean something is false philosophically. Your argument has been used by religious people against atheists for years, but that doesn't mean God all of a sudden exists.
Also, determinism doesn't mean we just stop living, it just means your actions are dictated by forces beyond your control (even though you think you are in control of those actions through choices).
But wait! We can go one step further. Epistemology falls apart also, for epistemology asks "What should I believe?" And this, too, presupposes choice, i.e., the idea that there is more than one point of view that I can believe, and that I need to choose which one I ought to believe (which one is correct or incorrect).
No. That is circular logic. It is the same as using the bible to settle whether or not God exists. Saying that determinism is a choice presupposes we are not determined so it is also begging the question.
Thus, you are wrong about determinism being self-refuting.
Most philosophers at least accept soft-determinism which refutes many of the libertarian arguments of pulling one's self up by the bootstraps. An example of this is no 3' tall guy in the U.S. could be a fighter pilot in the U.S. Air Force no matter how hard he tried. Why? Because society has dictated that he can't by making cockpits too big for him. Likewise, it is probably determined that no matter how hard that guy tries, he will never make it in the NBA. Of course this is an extreme example, but it can be carried to other areas as well.
Also, most behavioral sciences (sociologists, historians, psychologists, and bioligists) believe that we are a product of our genes and our upbringing--nature and nurture. Both of those influence the way we think and how we perceive things. These are forms of determinism too. You will have a very hard time saying that we are entirely free-will actors without any determinism whatsoever.
You make several statements but provide no supporting data. For example:
Yes, of *course* there's a cost when you extract limited resources from the earth. No economist, regardless of their political views, would dispute that.
Well I don't know what economists believe, I guess that since they have coined the word "externalities" they understand the concept. However, notice that neither the depletion of resources nor the impact to the environment of pollution is factored in any of the standard measures of economic activity such as the GDP or the GNP.
Notice also that politicians keep creating policies which promote the exploitation of Nature's Bounty .
The oil depletion allowance still exists. This rewards the firms for using up a non-renewable resource. The recently passed energy bill gives tax breaks and eliminates royalty payments for new off shore oil exploration. If economists know better they are not communicating their findings to the policy makers.
Your interest in discussing theoretical economic and social schemes makes for heated academic debates, but isn't reflected in the world as it is or as it is likely to be. Those of us who would like to see the planet saved from catastrophes get weary of such discussions. Trying to come up with practical ideas, that can also be implemented in the face of the resistance to change from those in power is much more difficult.
Just a simple example: look at the progress on producing more efficient automobiles. The technology has been in place for decades and would improve more rapidly if encouraged, but instead fuel efficiency has gone down in the US over the past decade. Why? A) The power of the big three auto makers. B) The power of the oil companies. C) The unwillingness/disinterest/corruption of politicians.
So where are your examples of externalities affecting actual social policies. The discussions of carbon trading are the first such and it is widely believed to be ineffectual.
Of course *some*, even *many* things have causes. But that's a far weaker statement than saying that *all* things have causes (which leaves no room for free will). I merely claim that *some* things are uncaused. And this has no bearing on God or otherwise -- I don't consider the "uncaused cause" argument a valid argument for the existence of God, for example.
I don't claim that "the consequences [of determinism] are bad." A truth is not good or bad -- it is merely true. No, I claim that determinism is incoherent and self-contradictory and therefore *false*.
It's similar to a philosophical skeptic claiming that "knowledge is impossible." This statement itself *is* a claim to knowledge, the knowledge that knowledge is impossible. But this is absurd, and therefore the claim cannot be true. Philosophical skepticism is self-refuting. If there are no justifiable beliefs, then the belief that there are no justifiable beliefs is itself not justifiable.
I admit that I am not formally educated in economics, but I can gather that in regards to philosophy, neither are you.
So what? I don't have a degree in economics, either. I *have* taken courses in both economics and philosophy, but I've also studied both independently on my own outside of school.
My boss has a degree in mechanical engineering, but he's been doing computer stuff instead for 10 years now. Does that make him unqualified to speak on the subject of computers? Of course not.
The value of a person's opinions is not a function of what degree they have, or whether they have the letters "PhD" after their name.
The value of a person's opinions is a function of whether they are *true*.
Remember what the "G" stands for in GDP/GNP: Gross. There is also an NDP/NNP (N for "Net"), which subtracts depreciation on capital goods. In fact there is a whole *family* of "national income" metrics, and a large amount of macro research has been written on the "correct" way to measure national income.
What you seem to be calling for is the economic equivalent of accrual accounting rather than cash accounting. And again, I think you would find that many economists would *agree* with you.
Here is a prominent economist who agrees in theory, but thinks the distinction is not terribly relevant in practice: http://gregmankiw.bl... (see also the many insightful comments in the comment thread)
This same economist, however, has very publicly and repeatedly advocated higher gas taxes (http://gregmankiw.bl... ). Perhaps you should direct your ire at the politicians who don't listen to him, rather than at the economists who I suspect largely agree with him?
The oil depletion allowance still exists.
You can't have it both ways. You are right that taking oil out of the ground *is* a cost because it draws down a form of capital. But *because* it's a cost, when an oil company extracts oil from a well that they own, they, too, are taking a cost on an accrual basis. To fail to account for this would be to overstate the profits of oil companies, and to force them to pay taxes on those (nonexistent, from an economic point of view) profits would be discriminatory against them compared to other businesses.
This isn't fundamentally different from the many other depreciation provisions in the tax code. Maybe there are tweaks that need to be made to the details, but the basic concept of an oil depletion allowance is actually quite sound.
The recently passed energy bill gives tax breaks and eliminates royalty payments for new off shore oil exploration. If economists know better they are not communicating their findings to the policy makers.
Actually, they *are* communicating their findings. I recall quite a few articles written by conservative economists bashing the recent energy bill as corporate welfare.
Here are a bunch of conservatives and libertarians trashing the energy bill:
look at the progress on producing more efficient automobiles. The technology has been in place for decades and would improve more rapidly if encouraged, but instead fuel efficiency has gone down in the US over the past decade. Why? A) The power of the big three auto makers. B) The power of the oil companies. C) The unwillingness/disinterest/corruption of politicians.
You are looking for a conspiracy where none exists.
The reality is that US consumers, until recently, did not particularly *demand* higher fuel efficiency -- they bought larger cars and cars with bigger, more powerful engines instead once oil prices collapsed in the 80s. This trend is now reversing itself with higher oil prices; consumers are now demanding smaller, more fuel-efficient cars again, and carmakers are once again paying more attention to increasing miles per gallon. High oil prices are the best conservation program ever devised.
The cars *have* still gotten significantly efficient from an engineering point of view. Compare today's 30mpg car against the 30mpg car of a decade or two ago and you'll see quite a difference. Compare the amount of interior space you get. Compare the acceleration and the horsepower. Compare the safety features (which add a significant amount of weight and reduce fuel efficiency). Automakers have made great strides in the last 20 years.
Of course cars could still be *more* efficient. No one disputes that. But scientists who point to technologies that we have working in labs, and then ask "why can't I buy a car with this technology?" fail to take into account the huge gap between a lab prototype and something that has to go into millions of cars that will be driven hundreds of thousands of miles each over their lifetime. There are cost issues. There are weight issues (a part that is too heavy may *hurt* efficiency). There are supply chain issues. There are reliability issues. There are safety issues.
Carmakers *are* rolling out new, more efficient technologies every year, like continuously variable transmissions, or improved versions of cruise control that automatically maintain a safe following distance. But, as anyone in the engineering profession knows, it is a long, hard slog going from a technology prototype in the lab to millions of units sold every year in the real world.
It is easy to stand on the sidelines and criticize the car companies. I'd like to see you do better.
Suppose determinism is true. Then the determinist didn't choose to accept determinism, and his opponents didn't choose to reject determinism; they were forced to do so by powers beyond their control.
The determinist, or his opponent, might have made an error when coming to their views. To know that determinism is true, we would have to know that the determinist didn't make an error, and that his opponent did.
Yet man is fallible -- man makes mistakes. Surely the determinist is not himself infallible. Indeed, if determinism is true, man's errors are *inevitable* -- they cannot be prevented.
By what standard can the determinist claim that he *knows* that determinism is true, if he does not also claim infallibility? Because he is unable to prevent himself from making errors, how can he righly claim that he hasn't made an error in concluding that determinism is true?
If we cannot choose between truth and falsehood, but instead we are forced by powers beyond our control to pick one or the other, then either we must be infallible (always choose the truth), or we must not only believe falsehoods from time to time but be completely powerless to prevent ourselves from doing so. And so -- no matter what we think we "know" -- how could we know that we haven't erred along the way?
Indeed, to accept determinism would require us to accept also a radical form of skepticism as well: errors are inevitable, and therefore knowledge is impossible.
Yet "knowledge is impossible", as I already explained, is itself self-refuting. If knowledge is impossible, then we cannot know that knowledge is impossible. And we certainly cannot know that determinism is true!
To be able to rightly claim knowledge without being infallible, we must be able to *choose* between truth and falsehood -- to *choose* between reasoning correctly or making an error. Then our errors are not forced -- we are still *capable* of making errors (we are fallible), and yet we are also capable of *not* making errors, indeed, perhaps even *never* making errors, so long as we always make the right choices. That doesn't make us infallible; it merely makes knowledge possible, as opposed to impossible.
I wrote a long tirade on the various mistakes and vagueness of much of your argument here, but I noticed that it comes down to basically two main problems, so I will post them now and if you wish me to post the longer version detailing how I get here, let me know.
The main problem I see in your argument here is that infallible and inevitable are not the same term. You rely too much on interdependence without showing that inevitability necessitates infallibility. I don't buy it.
Another problem I have is that determinism is a psychological and material issue, not an epistemological one. In other words, it may (or may not exist) whether we can successfully argue (know) it or not. The only thing I might qualify here is determinism may exist whether one knows it to be true or not. If it is a physical law (or theory) of psychology, then whether someone argues it successfully or not does not matter. Take gravity for example, it still existed before Newton. We still do not know much about it, but none of us are flying off this Earth as a result of our ignorance. This analogy is appropriate because many determinists argue that it is a natural consequence of the mechanical nature of the universe. Since we are a product of this fairly predictable universe (at least at the Newtonian level--there are problems with this idea at the quantum level, but not so much at the Newtonian and relativity level), we too have consequential behaviors.
Surprisingly this is the abbreviated version. If you wish, I will tidy up the other version, but I think this tangent has gone far enough. If you do wish to continue this discussion, I have two stipulations. First off, I never claimed that determinism is true. I stated that I was unsure of the situation. I believe at this point that determinism plays a large part in human behavior/decisions/actions, but I do not know to what degree. It seems as if you are saying the same from your previous post: “Of course *some*, even *many* things have causes.†The second is, I will play the person in favor of a determinist argument for the sake of argument and to perhaps self-reflecting on my own thought on the matter, but I think we perhaps should send this argument to the philosophy thread.
Comments :
What I think it is missing...
I believe the comparison is missing out on what government benefits the people are getting. That is to say your total real "income" isn't just a function of how much you make and keep but also what value of service you get from your taxes. Most scandinavian countries tend to be big on government services (universal health care, welfare, etc) from what I've read.
What this graph then is showing is that not only do Sweden's poor get to keep as much of their money as the US poor but they get a ream of benefits on top of that.
I came. I saw. I posted.
Veni, Vidi, Bitchy.
Avoiding a caste society
Redistribution of wealth isn't a goal in itself, instead the desire is to avoid the situation where poverty is a point of stable equilibrium. There are a lot of little things that make it substantially MORE expensive to be poor than otherwise. Insurance is harder to come by which means one major illness can knock down all progress. Loans, even small ones are much more expensive, you need to prepay for everything etc.
An infrastructure that makes it easier for people who have had bad luck or even made a lot of bad choices in the past to be mired in poverty or have their children at a major disadvantage is the intent. Not sure it is "redistribution" to have the wealthy pay more taxes that go into national infrastructure, including education, basic insurance etc.
Also, a strong middle class has been very good for our economy and that middle class is more likely to develop with the combination of a strong infrastructure yet not too burdensome taxes on those at or below the middle class... which means some higher taxes for the very wealthy.
Thank You for this thougtful post.
Assuming that there will always be a percentage of people that are stuck in poverty and will stay there, no matter what country they live in. So I am stating that there will always be poverty and that it will never be eliminated. The goal in a civil society would be to keep these people from revolt, social unrest or wildly criminal activities.
If anyone has ever been "stuck" in the poor zone, where one never seems to get out of debt but has the desire to improve one's circumstances, the Earned Income Tax Credit is a safety net that keeps wheels on cars, and pays for necessities like new shoes that might not otherwise be affordable. It is the difference between sinking and swimming. A sense of dignity or hopelessness.
The best opportunity for self improvement financially speaking comes from education and the conditions that cause education to thrive.
And at some point there is always the possibility that the number of poor and dissastisfied could harm the rich through social revolt.
One creative solution has been offered by Muhammad Yumus, who gives out small loans on the basis of need and trust. Essentially not asking for assurances on a loan, not giving loans to the already rich, but giving out loans to the very poor as an opportunity for them to improve themselves.
Microfranchising
is an extremely exciting and creative solution to helping people out of poverty, and a solution that counts on PEOPLE, and their personal motivation. I think it is a fabulous idea.
I'm only half stupid
Democracy
The biggest problem with extreme wealth disparity is the effect it has on democracy. In our society money equals political power. This can be seen in a variety of ways. Some examples are political contributions, "think tanks" funded by wealthy backers, and promises of future employment to government officials.
So instead of one man one vote we get one dollar one vote. The results of this have been that our national priorities have been distorted to favor the interests of the wealthy. Postulating a cost free example where there is no impact on anyone else when the rich gets richer is pointless, there is no such society. Instead we get a semi-secret, decade-long effort by 18 super wealthy families to abolish the estate tax. This is something that only affects them and members of their class. The lost revenue to the government will result in either reduced services, higher taxes for everyone else, or a higher deficit (or a combination). Only their extreme wealth permitted this program to go forward. They set up think tanks, promoted their interests in media companies that they own and bribed politicians. They even managed to persuade the libertarians that this is a "good thing".
A more equitable society is a more democratic one. I lay out the moral, economic and other reasons in this short essay:
Wealth Distribution
--- Policies not Politics
Raw income is a misleading indicator.
There are costs of living in the US that the families in most of those other countries don’t have to cover. It's not how much money you make - it's how much you can keep after you pay all the dues. I wonder what the graph would look like once you factor in local property taxes, private schools, healthcare, college tuition and upkeep of multiple cars, to name a few.
Sic semper tyrannis
It *isn't* raw income
PPP means the cost of living is supposed to be taken into account. For example, as was remarked in the comment thread I linked to, food is cheaper in the US, while health care is more expensive. Housing is also cheap in the US if you measure in terms of per square foot (interior) or per acre (land).
The supposed "errors" in PPP, by design, are *supposed* to cancel out. PPP weights the cost of various goods and services in various countries according to how much of them a typical consumer buys per year.
It ain't perfect, but as I said: it's easy to criticize, and surprisingly hard to come up with something better.
Definition of redistribution
If these items were paid for with user fees, then it wouldn't be redistribution. But to pay with them from general tax revenues from, say, the income tax is *definitely* redistribution.
Roads are paid for mostly with gas taxes today. To a first-order approximation, that's not redistributive -- you pay *roughly* in proportion to how much you drive times how big your car is (fuel efficiency and vehicle weight are correlated, and vehicle weight determines the damage to the roads). And yes, there are secondary factors like the negative externality of traffic, but this could be solved if we moved from a gas tax to a high-tech system that tracked your driving and sent you a bill every month taking into account whether you drove at peak hours or off-peak hours.
If, instead, we were to pay for roads with income taxes, then we *would* have redistribution. Since income taxes in America are now negative up to about $25000 in income (source: http://www.taxfounda...
), people earning less than $25K/year would be paying *nothing* for roads, while people earning $75K/year or more would pay a disproportionately large amount.
A progressive income tax is a very inefficient way to fund infrastructure, indeed, a very inefficient way to fund *any* part of government. The most efficient way to fund infrastructure would be through user fees (the gas tax is a good example). A VAT would also be very efficient. A sales tax, somewhat less so. An income tax, less so again. And a progressive income tax, least efficient of all.
High marginal tax rates, especially taxes on capital income, discourage investment, because they decrease the after-tax rate of return on investment. (In general, income taxes, unlike sales taxes or VATs, favor consumption over investment.) Since economic growth depends in large part on an increase in the nation's stock of capital, and capital increases every year by investment minus depreciation, taxes that discourage investment will have a negative impact on economic growth.
so, er, how do I...
...recommend a diary?
I came. I saw. I posted.
Veni, Vidi, Bitchy.
I guess you can't really
recommend this one because it's on the front page to begin with. But all the diaries that appear on the right side in the recent diaries section would have a button "Recommend Diary" under the search box.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
Impossible
on front-page diaries. On user-posted diaries, there is a button on the right side of the screen that says recommend.
We are all mediators, translators. - Derrida
http://signicide.blogspot.com/
Quick on the draw! n/t
We are all mediators, translators. - Derrida
http://signicide.blogspot.com/
hehe you know it :) n/t
"To discuss evil in a manner implying neutrality, is to sanction it." AR
My bad
It all depends on what they include in the basket.
International comparisons; How does the United States stack up? p. 5.
These are big ticket items that most families *will* include in their shopping baskets at one point or another.
Sic semper tyrannis
"efficient" yet not viable
I completely disagree (Surprise!)
So, you have a use tax for those in poverty to access fire fighters and police officers? Likewise, we are all 'using' military defense at the same rate. You are moving towards what is effectively a flat tax. Not a flat RATE tax but an actual flat AMOUNT that would absolutely destroy most poor families. A family with 2 children would be paying over $10,000 a year in education when we as a society certainly benefit from having a well educated population.
Definition wise it isn't redistribution when distribution isn't occuring, it is investment. I don't own 0.0000001% of the roads, I get to use the roads that belong to the country so the tax money, while I have gained a benefit, has not been distributed to me.
I love this kind of research
presented in that graph. We also often hear about superior standard of living in various scandinavian countries including their average income which obviously doesn't take taxes or cost of living into account.
Oh but those factors are of course unimportant.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
Agree, this gets fuzzy
There is no perfect way to do these measurements. I mean, I haven't even touched (in this post) on whether you should be measuring wealth, income, or consumption.
I think there is some additional value to be had in looking at objective standard-of-living metrics, along the lines of "what percentage of people have air conditioning in their home?" "What percentage of people have a dishwasher?" "What percentage of people have cell phone service?" Etc.
You could probably come up with a list of 100 or more objective questions like this to measure someone's standard of living. Comparisons are still not going to be perfect (Minnesotans need heating and Texans don't; Texans need air conditioning and Minnesotans don't; and here in California you can get by without either one), but nothing's ever going to be perfect.
If anyone knows of any detailed research on this, I'd be interested to see it.
Keep things orthogonal
Let's consider the simplified case of a government that does exactly three things: national defense, roads, and redistribution of wealth. In order to do these three things, it also needs to levy taxes to pay for them.
What is the most effective way to run this government? Let's look at each item independently.
In economic jargon, national defense is a "nonexcludable public good." If we spend money on it, it affects everyone in the country, whether they like it or not. It is not meaningful to talk about "user fees" for national defense, because *everyone* "uses" national defense. The same is true of police and fire protection, because the police are protecting me from criminals at any given point in time whether I like it or not, and the fire department will come to my house to put out the fire and save me whether I like it or not.
Aside from maybe fining people who set off a fire alarm when there's no fire, putting a user fee on these things would just be silly.
Roads, on the other hand, are a little different. We *can* have people pay for the roads in proportion to how much they drive and the weight of their car -- people who drive more or who drive a larger care are causing more wear and tear on the roads. If we don't charge people different amounts depending on how much they drive, we will have the "tragedy of the commons" -- people will abuse the roads and drive *too much*, because it's easy to shrug off the cost of building and maintaining the roads as Someone Else's Problem. But it's *not* someone else's problem! It's *everyone's* problem if the roads are covered with potholes and clogged with traffic. If done right, putting a user fee on the roads benefits everyone, because people now have to pay for the costs they are imposing on everyone else who uses the roads.
For redistribution of wealth, why make things complex? Let's keep it as simple as possible. I linked to Murray's new book in the other thread -- let's just use his proposal as the baseline. Every month, everyone gets a direct-deposit check for one-twelfth of $10K. Do whatever you want with it. $10K too little or too much? Fine -- come up with your favorite number. The plan is flexible and we can debate how big or small the "safety net" should be. We could also expand on Murray's proposal by giving people an additional check for each child under the age of 21. Maybe you get $10K a year for yourself, $10K a year for your spouse, and $5K a year for each kid. Again, feel free to tweak the numbers however you see fit.
Finally, we need taxes to pay for all this stuff. A VAT is generally believed to be the most efficient way for the government to collect a given amount of revenue, i.e., it has the smallest negative effect on the economy. So we set the VAT at whatever rate it takes to pay for defense plus the welfare system. (The roads are already paid for through user fees or gas taxes.)
Isn't this the best of all worlds? We provide national defense, and pay for it through a VAT. We provide roads, and pay for them through user fees. And finally, we provide a welfare system that redistributes wealth, and pay for it using the VAT.
All that's left is for people to argue about the numbers. You can provide more generous welfare benefits -- you just have to increase the rate on the VAT to pay for it. If benefits are stingy, maybe we'd have a 10% VAT. If they're generous, maybe we'd have a 30% VAT.
What's there to complain about? How could you improve on this general framework without making everyone worse off?
If the complaint is that the user fees on roads hurt the poor, I'm not seeing it. Suppose the average person ends up paying $500 a year to the government in road user fees. Then just set everyone's welfare check to $10500 rather than $10000 a year. No matter what the user fees come out to, you can offset them by setting the size of the welfare checks appropriately.
Zero-sum thinking
This is zero-sum thinking: the belief that you can't make someone better off without making someone else correspondingly worse off.
But we don't live in a zero-sum world. Every day, I and the other 300 million people in this country make countless economic transactions with other people. By and large, these transactions make both parties better off than they would have been had the transaction not occurred.
When I go to the grocery store and buy, say, a package of steaks for $10, the grocery store benefits: they may have bought the meat from their supplier for only, say, $5, and they make a profit. And the steaks are worth more than $10 to me, as a simple thought experiment will prove: how much would they have to cost before I'd stop buying them? My guess is maybe $20, at which point it's too expensive for the taste and I'd buy the lamb or the king crab legs instead.
I get $20 worth of value and only have to pay $10 for it. The store gets $10 for a product that only cost them $5. I win, the store wins, and no one loses (well, except for the hapless cow who had to give his life for the cause of my tastebuds).
Yes, this is a simplistic scenario, but the analysis I've provided here can be applied to a surprisingly wide range of economic transactions. And the analysis shows that it is actually surprisingly easy for the government to put policies in place that harm everyone and benefit no one, or that have costs that vastly exceed their corresponding benefits.
An obvious example of such a policy in the US today is farm subsidies: the cost they impose on consumers of food is many times larger than the benefit to farmers.
The Concept
The concept is that all wealth is a creation of society, not individuals, because individuals are worthless without society. Put a baby on a desert island to raise himself, and you'll see my point proven quickly.
Thus, the reason behind one's economic status has more to do with society than with the actions of that individual -- whether rich or poor. Donald Trump would have likely become a crack tycoon if he'd grown up in the projects. None of us are responsible for our circumstances of birth, which are the most determinate factor of our lives.
Therefore, income distribution should be handled democratically, not plutocratically. A millionaire should have no more influence on the process than a gutter junkie, because both are results of the machinations of society. There is nothing one does that is not done as part of society, so we are all beholden to each other and responsible for each other, so any talk of the "theft" of taxes is simply laughable.
It is only through society that we succeed, and it is only through this that we can express our true individuality and freedom.
Swedes
From what I understand it's just Sweden people are referring to. High taxes, great social services, and a quickly-growing economy because of it.
I don't know much about economics
But by using a VAT to pay for national defense/welfare, aren't you basically regressively taxing the poor (consumers) and then giving them money?
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Sort of
Not regressive -- a flat rate. Yes, a VAT is a consumption-based tax, but it is a classic economic fallacy to say that "the poor consume more as a percentage of their income than the rich" (an extraordinary claim that requires extraordinary evidence). This view rests in part on a statistical fallacy, because your income often varies far more per year than your consumption. In the long run, for any person, income and consumption should match up -- this is called the Permanent Income Hypothesis. There is some experimental evidence either way on the Permanent Income Hypothesis, and overall, it seems to hold up in many but not all cases (real people don't always behave rationally).
Anyway, even if it was "regressive", so what? We could make up for that by setting the size of the welfare checks appropriately. Tax evasion is difficult with a VAT, and both the VAT and the welfare program I've proposed have low administrative overheads regardless of how you set the numbers.
isn't it common sense?
That doesn't seem particularly extraordinary at all. Assuming that the poor spend basically the entirety of their income (which with negative savings rates is actually an underestimate) and that the rich do not (by virtue of having both savings and investments) then it is automatically required that the poor consume more as a percentage of their income than the rich.
I came. I saw. I posted.
Veni, Vidi, Bitchy.
I am pretty sure
it's also Norway (even more so than Sweden) but I am very doubtful about their "quickly-growing economy".
I've spent over a year and a half in Iceland (which is somewhat similar to those two countries) and though their salaries were comparable to US (slightly lower) their cost of living was twice as expensive as ours.
I hear it is very similar to Norway and Sweden. So in reality people have half the money available to spend which sucks even if you take all the "great social services" into account.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
Money
Standard of living includes what happens when you have no money, not just how well you live when you do have some.
In a laisse-faire system, you would have private unemployment insurance, medical insurance, theft insurance, war insurance, etc., and having paid the premiums for all these policies, surely you would count their value toward your overall comfort in life. Knowing you have fire insurance makes owning a fireplace more enjoyable.
As for the "quickly growing economy" of Sweden, it's like Olbermann's "quickly growing ratings", i.e., growing fast, but still smaller than the big fish (the U.S. and FOX News, respectively). They are growing fast, but still have a lot of catching up to do with the rest of the Western world economically. Their growth, natch, is due to liberalism; one more indicator that the American left is the one group on the correct path, and those to our left and right improve their policy positions only in imitation of our ideals.
first of all
Sweden's economy is not growing any faster than US (and even slower
)
Norway is up and down
.
Now both of them have been "liberal" in your sense of the word for a long time so technically they should've been well beyond us due to their liberalism. It's not like it is a new phenomenon in those countries. So your logic does not hold.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
Are rich people stupid?
If, over my lifetime, every year, I earn more money than I spend, I die rich. What's the point? Either I should have spent more money while I was alive, or I should have spent less time working.
Giving the money to my heirs doesn't solve the dilemma, because now they too are rich, and they too now either need to spend the money or *also* die rich.
In the long run, income and consumption have to balance out. If my consumption exceeds my income for too long, I go into debt, and eventually the banks will wise up and stop lending to me. And if my income exceeds my consumption for too long, I'm stupid because I die rich.
The reality is that rich people *do*, in most cases, spend down their savings at some point in their life -- even if only by giving it away in their will.
http://en.wikipedia....
Difficult for me to respond without anger
I consider the suggestion that all of the hard work I've put in over my life -- all of the delayed gratification, all of the 70- and 80-hour weeks, all the all-nighters, all the extra homework and after-school sessions to take more advanced classes, all the times when I gave it my all rather than just putting in the bare minimum effort to get by -- that all this was just the "machination of society"... well... quite insulting and demeaning, to put it kindly.
I've worked my ass off to get to where I am in life today, thank you very much. I've never taken so much as a dime from the government or committed a crime more serious than speeding. I am a responsible, law-abiding citizen. And when the government tells me that my "reward" for all this hard work is to pay it more than 40% of what I earn, all so that I can drive on pothole-covered roads that needed to be resurfaced 5 years ago, that makes me angry.
I most emphatically disagree with this statement. The idea that I gain "individuality and freedom" by subjugating myself to "society" is *extremely* horrifying. I believe the accurate term for any ideology wherein the "society" is believed to trump the individual is "totalitarian."
In the words of Margaret Thatcher: "There's no such thing as society. There are individual men and women and there are families."
"Society" is nothing more than the billions of daily interactions between individuals.
amen
really well said.
"To discuss evil in a manner implying neutrality, is to sanction it." AR
Ditto the second paragraph
While initial inequalities and societal biases may have an affect, it really still is hard work that matters. Effort counts. Attitude counts. It's not easy or fun to make your own way in the world. But that is what is expected of an adult.
Why these facts are imponderable to most of my 20-ish relations is baffling. I guess they expect society to give them what they want or think they need, just like their parents did.
"The human race divides politically into those who want people to be controlled and those who have no such desire." --R. Heinlein
Externalities
Your example is classical economics, which has become obsolete. Economics is based upon ignoring externalities. The two most common being the depletion of raw materials and the ecological burden of pollution.
There is only one permanent input source to the world - solar energy. Everything we consume ultimately derives from this (nuclear power is a small exception). Fossil fuels are stored solar energy. Food is transformed solar energy. Right now we are using up a reserve that has been built up over a period of millions of years. We will probably exhaust it within the next two centuries. So what took millions of years to accumulate will be depleted in 300 years.
Now we can chose to ignore this for the next few decades and those at the top of the economic ladder can rationalize their unsustainable behavior using various self-serving economic models, but as the conflicts in the middle east show, discord happens way before the actual shortages start.
So the idea that extracting raw materials from the earth and converting them into another form of our design generates wealth or a profit is based upon an incomplete model. The hidden costs are just being pushed into the future when the full value of the nonrenewable resource will be imposed.
So to use an example similar to yours: A worker in Nigeria gets $2 a day to extract oil. Nigeria gets royalties on the exports. The Shell Oil Co. makes a profit refining and selling the fuel. Everyone comes out ahead. However that oil in the ground can never be replaced. Where does that cost show up? In the future. Sorry it's a zero sum game, it just that some of the players haven't been born yet.
This fits in with the libertarian mindset. Reagan said "posterity doesn't vote".
--- Policies not Politics
Philosophy
Your philosophy is the standard one in the west these days, but is of fairly recent vintage.
The idea that one should work to get ahead arose with the industrial revolution. Before this one was born into one's station in life and expected to stay in it. This is still the norm in much of the world.
As the need for factory workers increased a social structure was needed to justify the change in expectations. The most influential being the philosophy of Calvin (redemption through good works). This is all explained quite well in the classic work of Max Weber: "The Protestant Ethic and the Spirit of Capitalism" (Wikipedia has a good article).
Work without reward is slavery, so along with the justification for work beyond what one needed to survive arose the idea of material wealth. So one's excess production is split between the capitalist and the worker. The worker gets enough extra of his labor to be able to purchase consumer items. The balance between how much the worker gets and how much the capitalist has been a source of conflict for several centuries.
One of the side effects of the capitalist system has been a shift away from communal thinking to individualism. This has gotten to the point in the US where many now resent any attempts to maintain any communal societal structures. This is best shown in the attitudes of Libertarians but also spills over into various types of social conservatives.
The result has been an attack on programs like Social Security, welfare, food stamps and health services for the indigent. Some object because their taxes are too high, some because of Calvinism (in its modern forms), and some are hypocrites who are basically just greedy.
In point of fact, the US is wealthy enough that everyone could be provided for, even the slackers. It simply requires a change in the way wealth is created and taxed and a shift towards more social service and less militarism. A society that degenerates into "everyman for himself" is little better than a pack of hungry dogs.
--- Policies not Politics
I can't for the life of me see how this relates...
...at all.
the question was a simple one of whether the poor consume more of their income. They do, that's pretty much a given. When you are poor you don't have money to spend on the other things like savings and investments. When you are rich you do.
For the poor
Income =< expenses
For the rich
Income > expenses
or they aren't rich for very long. Mathematically there is no way that the ratio of Expenses/Income for the rich can be equal to or greater than that for the poor. Esoteric philosophies about "permanent income" are nice but not really the point.
I came. I saw. I posted.
Veni, Vidi, Bitchy.
Liberalism
Um, liberalism means opening up to free markets, not instituting socialism. There are no socialists among American liberals, in case you haven't noticed.
Who?
Who made you such a hard worker? Your parents, i.e., society.
Sure, once we've reached our teen years you're pretty much on rour own, but you owe your birth and social programming to anyone but yourself.
I realize that paying taxes is considered subjugating oneself in your eyes, but this is just silly.
An ideology that puts the needs of society ahead of the individual isn't called totalitarian, it's called "natural law". Humans are by their nature social animals; we cannot survive without a society to make us who we are.
As for your bizarre idea of what "society" is . . . if there are only individual men and women, and families, who invented English? Who developed our nation's laws? These things were done collectively, as were all great things that benefit us as individuals.
There is nothing inside your head that didn't come from somewhere else, that wasn't put there by someone else. There is a cause for every effect, and to claim that you exists as you are because of some kind of self-imposed Will, i.e., "just because", is to claim that a thing can happen without a cause. If you are a hard worker, it's because someone made you that. You very easily could have been made into something else, will or no will.
Law 101
"The idea that I gain "individuality and freedom" by subjugating myself to "society" is *extremely* horrifying."
Upon reflection this is an absurd statement. So, subjugating myself to society's taboo on, say, armed robbery is "horrifying"? Why should I not be free to do as I please? Why should others' need for safety take away my right to act freely?
No, taking away people's rights to act freely gives us more liberty. When the right to murder, surely one of nature's most universal rights, is withdrawn by society, each of us becomes more free. This philosophy is the basis for all law, in any nation on the planet. So sufficed to say, you are somewhat out of touch on this one.
Nope... not that simple
Income = expenses, that would make sense. But in the long run, i.e., over your lifetime, not just a single year, how can income be less than expenses? The only way you can spend more than you earn is by drawing down savings (which would have meant income > expenses in a previous year), or by taking a loan.
Banks aren't stupid. Banks have extensive credit scoring systems to predict whether someone is likely to have the financial capacity to pay back a loan. Banks know your income and your level of debt when you apply for a loan, or even a credit card. If you earn $20K a year and spend $25K a year, this won't last long. The banks *will* cut you off from further credit at some point. You can declare bankruptcy, but then good luck getting credit ever again.
If poor people *on average* spent more than they make every year, and this wasn't just a temporary thing until they got a raise or two and could pay back the loans, banks would never lend to people below a certain income. Or, maybe a stupid bank would, but probably not for very long.
I think you're mixing up the usage of the word "rich" to mean both wealth and income.
The Permanent Income Hypothesis *DOES* predict that you will find that low-income people *appear* to spend more than they make, and that high-income people *appear* to make more than they spend. But it also claims that this is a statistical anomaly that is caused by changes in your income over your lifetime, and that the real marginal propensity to consume is 1 for all income groups: every $1 of extra income over your lifetime means $1 of extra consumption over your lifetime.
Real empirical research shows mixed results: people do not always behave as the PIH would predict, for a variety of reasons (such as unpredictability of future income). But we don't need anything nearly as strong as the PIH to refute the claim that marginal propensity to consume varies by income. All you really need to do is look at peoples' habits during their school years, working years, and retirement years. For example, people go into debt in their school years, pay it off and even build up some savings in their working years, and then live off the savings in retirement and eventually draw down most of them. In total, you probably make and spend about the same amount over your entire lifetime.
I think I've said enough on this topic... quite beaten to death already.
Economists study these things all the time
Huh...? My introductory micro textbook had a whole chapter on externalities. (So does every other textbook.) Micro *beyond* econ 101, in fact, is basically all about those other factors that make things "more complicated" than the basic models everyone learns in micro 101, whether we're talking about externalities, asymmetric information, monopolies/monopsonies, monopolistic competition, agency problems, moral hazard, game theory, behavioral economics, etc. If it wasn't for these things, the science of economics would be quite boring indeed.
There is *extensive* economic research on depletion of raw materials and long-term price trends in commodities, as well as on optimal strategies for best making use of limited resources over time.
Yes, of *course* there's a cost when you extract limited resources from the earth. No economist, regardless of their political views, would dispute that.
But does it automatically follow that we should take the oil reserves of the planet, divide by the number of years it took for those reserves to form, and then use no more than that much oil per year? No, it doesn't. In fact, this would be a very foolish way to do things -- it would benefit neither us nor our descendants -- because then the oil that *is* there just sits in the ground unused!
A clearly better strategy, for example, would be to have a rule that we will extract precisely 0.5% of the remaining oil each year. Each year we would extract a little bit less oil than we did the previous year. Eventually, after a long time, we would reach an equilibrium where we consume the same amount that naturally accumulates per year.
If we did this, then it would be highly predictable each year how much oil we will have available. The price of oil would increase each year to reflect the slightly smaller supply. The incentive to use it efficiently also increases each year as the price goes up.
Is this the optimal strategy? No, it *also* might not be optimal, for various reasons. But it's clearly superior to not depleting the oil at all.
I'm just scratching the surface here. Again, I think you might be rather surprised how much a lot of very smart economists have already written about this exact topic.
Movement from communalism to individualism is called "progress"
True, although that's not the only cause in this shift in thinking. I would also credit the shift from a pre-Enlightenment worldview -- man exists to serve God, man exists to serve the king or tribal leader -- to an Enlightenment worldview -- man exists for his own sake, man's calling in life is the pursuit of knowledge, truth, beauty, and his own happiness.
To call this an "Enlightenment" viewpoint is not strictly accurate, because at least some of the ancient Greek philosophers also had similar views, but I'm using the labels to represent classes of viewpoints, not periods of time in history.
The shift from pre-Enlightenment views ("communalism") to Enlightenment views ("individualism") is, at the risk of painting with a very broad brush, the progress of man from "slavery" to "freedom".
Quite the opposite. I have very little to gain and risk losing everything if I kill or steal. If I work harder at my job, on the other hand, not only do I gain material rewards for myself, but *everyone else* wins also, because my employer is able to sell better products at lower prices.
If I were to quit my job and devote my life to helping and serving the poor, I would actually *harm* the poor (and everyone else on the planet) by doing so. That would be an exceedingly ineffective use of my talents.
The beauty of the capitalist system is that it *aligns* people's interests. When I pursue my self-interest, they win. When they pursue their self-interest, I win. It's, again, the difference between a zero-sum and a non-zero-sum view of society. Every day at work I create wealth for myself *and* for everyone else on the planet. That wealth doesn't get subtracted from someone else's tally somewhere -- it is created out of nothing.
In the words of Adam Smith: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love."
Determinism
From numerous remarks in your post, you seem to be presenting a position of philosophical determinism (as opposed to free will).
Let's suppose determinism were true. If so, forget politics -- even ethics becomes meaningless, because ethics attempts to answer the question "What should I do?" or "What is the best/right/proper way to live?". But this question presupposes choice, i.e., the idea that there is more than one way for me to live, and that I must choose between the two.
But wait! We can go one step further. Epistemology falls apart also, for epistemology asks "What should I believe?" And this, too, presupposes choice, i.e., the idea that there is more than one point of view that I can believe, and that I need to choose which one I ought to believe (which one is correct or incorrect).
To accept philosophical determinism is an act of choice. Thus, philosophical determinism is self-refuting.
Actually, yes, as a matter of metaphysics, I *do* claim that at least some things must happen without causes, i.e., Aristotle's "Uncaused Cause."
This, too, seems a rather shocking claim -- is this not a complete denial of the existence of creativity and the possibility of independent thought?
Provably false -- humans can and do live in complete or nearly complete solitude at times. It isn't usually a *desirable* way to live, for *many* reasons, but it has happened.
No, that's *not* what I claim. What I oppose is the claim that I "owe something back to society." What I find insulting is the claim that my success is attributable to the actions of others and not to my own.
"Society" doesn't have "needs." Only individual people have "needs." And if someone else's "needs" can take precedence over my rights, apparently my "rights" don't mean very much.
If by "collectively" you mean "by large numbers of individuals", then yes.
But to claim that "all great things" are developed "by large numbers of individuals" is disrespectful to the many individuals who, through their personal actions, have made outstanding contributions -- far above and beyond the norm -- to this world. For that matter, it is disrespectful to the smaller but still significant accomplishments made on a day-to-day basis by the billions of *normal* people who work each day to make it better than the last.
This, indeed, is one of the crucial defining choices we make in life: either we move forward and act to create a better tomorrow, or we sit on our laurels and do nothing and resign ourselves to inevitable decline.
More briefly: you can be part of the solution, or you can be part of the problem.
If you can legitimately take them away, they're not rights
There is no "right to murder." And it's not because there is a "need for safety" that takes precedence over the "right to murder" the "right to steal" -- it's because there *is* a "right to life" and a "right to property" that there is no such thing as a "right to murder" or a "right to steal" in the first place, and cannot be.
Rights, by their nature, cannot conflict. Society does not take away my "right to murder"; I never had it in the first place. All I really ever had was a right to self-defense, which is a subset of my right to life.
Circular Logic
I admit that I am not formally educated in economics, but I can gather that in regards to philosophy, neither are you. Although I have not yet settled the debate between determinism and free-will in my mind, it is not as simple as you are making it.
So? That is an after-effect and does not disprove determinism. Just because the consequences are bad does not mean something is false philosophically. Your argument has been used by religious people against atheists for years, but that doesn't mean God all of a sudden exists.
Also, determinism doesn't mean we just stop living, it just means your actions are dictated by forces beyond your control (even though you think you are in control of those actions through choices).
No. That is circular logic. It is the same as using the bible to settle whether or not God exists. Saying that determinism is a choice presupposes we are not determined so it is also begging the question.
Thus, you are wrong about determinism being self-refuting.
Most philosophers at least accept soft-determinism which refutes many of the libertarian arguments of pulling one's self up by the bootstraps. An example of this is no 3' tall guy in the U.S. could be a fighter pilot in the U.S. Air Force no matter how hard he tried. Why? Because society has dictated that he can't by making cockpits too big for him. Likewise, it is probably determined that no matter how hard that guy tries, he will never make it in the NBA. Of course this is an extreme example, but it can be carried to other areas as well.
Also, most behavioral sciences (sociologists, historians, psychologists, and bioligists) believe that we are a product of our genes and our upbringing--nature and nurture. Both of those influence the way we think and how we perceive things. These are forms of determinism too. You will have a very hard time saying that we are entirely free-will actors without any determinism whatsoever.
We are all mediators, translators. - Derrida
http://signicide.blogspot.com/
Proof
You make several statements but provide no supporting data. For example:
Well I don't know what economists believe, I guess that since they have coined the word "externalities" they understand the concept. However, notice that neither the depletion of resources nor the impact to the environment of pollution is factored in any of the standard measures of economic activity such as the GDP or the GNP.
Notice also that politicians keep creating policies which promote the exploitation of Nature's Bounty
.
The oil depletion allowance still exists. This rewards the firms for using up a non-renewable resource. The recently passed energy bill gives tax breaks and eliminates royalty payments for new off shore oil exploration. If economists know better they are not communicating their findings to the policy makers.
Your interest in discussing theoretical economic and social schemes makes for heated academic debates, but isn't reflected in the world as it is or as it is likely to be. Those of us who would like to see the planet saved from catastrophes get weary of such discussions. Trying to come up with practical ideas, that can also be implemented in the face of the resistance to change from those in power is much more difficult.
Just a simple example: look at the progress on producing more efficient automobiles. The technology has been in place for decades and would improve more rapidly if encouraged, but instead fuel efficiency has gone down in the US over the past decade. Why? A) The power of the big three auto makers. B) The power of the oil companies. C) The unwillingness/disinterest/corruption of politicians.
So where are your examples of externalities affecting actual social policies. The discussions of carbon trading are the first such and it is widely believed to be ineffectual.
--- Policies not Politics
"Soft determinism" isn't determinism
Of course *some*, even *many* things have causes. But that's a far weaker statement than saying that *all* things have causes (which leaves no room for free will). I merely claim that *some* things are uncaused. And this has no bearing on God or otherwise -- I don't consider the "uncaused cause" argument a valid argument for the existence of God, for example.
I don't claim that "the consequences [of determinism] are bad." A truth is not good or bad -- it is merely true. No, I claim that determinism is incoherent and self-contradictory and therefore *false*.
It's similar to a philosophical skeptic claiming that "knowledge is impossible." This statement itself *is* a claim to knowledge, the knowledge that knowledge is impossible. But this is absurd, and therefore the claim cannot be true. Philosophical skepticism is self-refuting. If there are no justifiable beliefs, then the belief that there are no justifiable beliefs is itself not justifiable.
So what? I don't have a degree in economics, either. I *have* taken courses in both economics and philosophy, but I've also studied both independently on my own outside of school.
My boss has a degree in mechanical engineering, but he's been doing computer stuff instead for 10 years now. Does that make him unqualified to speak on the subject of computers? Of course not.
The value of a person's opinions is not a function of what degree they have, or whether they have the letters "PhD" after their name.
The value of a person's opinions is a function of whether they are *true*.
There is no conspiracy...
Remember what the "G" stands for in GDP/GNP: Gross. There is also an NDP/NNP (N for "Net"), which subtracts depreciation on capital goods. In fact there is a whole *family* of "national income" metrics, and a large amount of macro research has been written on the "correct" way to measure national income.
What you seem to be calling for is the economic equivalent of accrual accounting rather than cash accounting. And again, I think you would find that many economists would *agree* with you.
In fact, here is a prominent economist who *does* agree with you: http://money.cnn.com...
Here is a prominent economist who agrees in theory, but thinks the distinction is not terribly relevant in practice: http://gregmankiw.bl...
(see also the many insightful comments in the comment thread)
This same economist, however, has very publicly and repeatedly advocated higher gas taxes (http://gregmankiw.bl...
). Perhaps you should direct your ire at the politicians who don't listen to him, rather than at the economists who I suspect largely agree with him?
You can't have it both ways. You are right that taking oil out of the ground *is* a cost because it draws down a form of capital. But *because* it's a cost, when an oil company extracts oil from a well that they own, they, too, are taking a cost on an accrual basis. To fail to account for this would be to overstate the profits of oil companies, and to force them to pay taxes on those (nonexistent, from an economic point of view) profits would be discriminatory against them compared to other businesses.
This isn't fundamentally different from the many other depreciation provisions in the tax code. Maybe there are tweaks that need to be made to the details, but the basic concept of an oil depletion allowance is actually quite sound.
Actually, they *are* communicating their findings. I recall quite a few articles written by conservative economists bashing the recent energy bill as corporate welfare.
Here are a bunch of conservatives and libertarians trashing the energy bill:
http://www.opinionjo...
http://www.cato.org/...
http://www.heritage....
http://www.heritage....
You are looking for a conspiracy where none exists.
The reality is that US consumers, until recently, did not particularly *demand* higher fuel efficiency -- they bought larger cars and cars with bigger, more powerful engines instead once oil prices collapsed in the 80s. This trend is now reversing itself with higher oil prices; consumers are now demanding smaller, more fuel-efficient cars again, and carmakers are once again paying more attention to increasing miles per gallon. High oil prices are the best conservation program ever devised.
The cars *have* still gotten significantly efficient from an engineering point of view. Compare today's 30mpg car against the 30mpg car of a decade or two ago and you'll see quite a difference. Compare the amount of interior space you get. Compare the acceleration and the horsepower. Compare the safety features (which add a significant amount of weight and reduce fuel efficiency). Automakers have made great strides in the last 20 years.
Of course cars could still be *more* efficient. No one disputes that. But scientists who point to technologies that we have working in labs, and then ask "why can't I buy a car with this technology?" fail to take into account the huge gap between a lab prototype and something that has to go into millions of cars that will be driven hundreds of thousands of miles each over their lifetime. There are cost issues. There are weight issues (a part that is too heavy may *hurt* efficiency). There are supply chain issues. There are reliability issues. There are safety issues.
Carmakers *are* rolling out new, more efficient technologies every year, like continuously variable transmissions, or improved versions of cruise control that automatically maintain a safe following distance. But, as anyone in the engineering profession knows, it is a long, hard slog going from a technology prototype in the lab to millions of units sold every year in the real world.
It is easy to stand on the sidelines and criticize the car companies. I'd like to see you do better.
And I refuted your claim
that it is self-refuting and thus false. You never showed this in either of your arguments.
We are all mediators, translators. - Derrida
http://signicide.blogspot.com/
No...
Perhaps I should expand on myself.
Suppose determinism is true. Then the determinist didn't choose to accept determinism, and his opponents didn't choose to reject determinism; they were forced to do so by powers beyond their control.
The determinist, or his opponent, might have made an error when coming to their views. To know that determinism is true, we would have to know that the determinist didn't make an error, and that his opponent did.
Yet man is fallible -- man makes mistakes. Surely the determinist is not himself infallible. Indeed, if determinism is true, man's errors are *inevitable* -- they cannot be prevented.
By what standard can the determinist claim that he *knows* that determinism is true, if he does not also claim infallibility? Because he is unable to prevent himself from making errors, how can he righly claim that he hasn't made an error in concluding that determinism is true?
If we cannot choose between truth and falsehood, but instead we are forced by powers beyond our control to pick one or the other, then either we must be infallible (always choose the truth), or we must not only believe falsehoods from time to time but be completely powerless to prevent ourselves from doing so. And so -- no matter what we think we "know" -- how could we know that we haven't erred along the way?
Indeed, to accept determinism would require us to accept also a radical form of skepticism as well: errors are inevitable, and therefore knowledge is impossible.
Yet "knowledge is impossible", as I already explained, is itself self-refuting. If knowledge is impossible, then we cannot know that knowledge is impossible. And we certainly cannot know that determinism is true!
To be able to rightly claim knowledge without being infallible, we must be able to *choose* between truth and falsehood -- to *choose* between reasoning correctly or making an error. Then our errors are not forced -- we are still *capable* of making errors (we are fallible), and yet we are also capable of *not* making errors, indeed, perhaps even *never* making errors, so long as we always make the right choices. That doesn't make us infallible; it merely makes knowledge possible, as opposed to impossible.
Sort of busy right now
but I will get back to you in a bit.
We are all mediators, translators. - Derrida
http://signicide.blogspot.com/
Cliff's notes version of my answer
I wrote a long tirade on the various mistakes and vagueness of much of your argument here, but I noticed that it comes down to basically two main problems, so I will post them now and if you wish me to post the longer version detailing how I get here, let me know.
The main problem I see in your argument here is that infallible and inevitable are not the same term. You rely too much on interdependence without showing that inevitability necessitates infallibility. I don't buy it.
Another problem I have is that determinism is a psychological and material issue, not an epistemological one. In other words, it may (or may not exist) whether we can successfully argue (know) it or not. The only thing I might qualify here is determinism may exist whether one knows it to be true or not. If it is a physical law (or theory) of psychology, then whether someone argues it successfully or not does not matter. Take gravity for example, it still existed before Newton. We still do not know much about it, but none of us are flying off this Earth as a result of our ignorance. This analogy is appropriate because many determinists argue that it is a natural consequence of the mechanical nature of the universe. Since we are a product of this fairly predictable universe (at least at the Newtonian level--there are problems with this idea at the quantum level, but not so much at the Newtonian and relativity level), we too have consequential behaviors.
Surprisingly this is the abbreviated version. If you wish, I will tidy up the other version, but I think this tangent has gone far enough. If you do wish to continue this discussion, I have two stipulations. First off, I never claimed that determinism is true. I stated that I was unsure of the situation. I believe at this point that determinism plays a large part in human behavior/decisions/actions, but I do not know to what degree. It seems as if you are saying the same from your previous post: “Of course *some*, even *many* things have causes.†The second is, I will play the person in favor of a determinist argument for the sake of argument and to perhaps self-reflecting on my own thought on the matter, but I think we perhaps should send this argument to the philosophy thread.
We are all mediators, translators. - Derrida
http://signicide.blogspot.com/