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2/20/11

I'd like to hear some responses before i share my opinion, so I think the title says it all.

Please discuss.

Comments (291)

2/20/11

You mean you want us to do your homework.

2/20/11

The main problem of shifting towards a more capitalist society is that inequality increases but freedom and living standards increase for everyone.

2/20/11
2/20/11

Also, keep in mind some of the reasons that the (measured) income inequality in the US has increased:

1. We take a tremendous amount of immigrants that start off at the bottom of the income ladder. They make much more than they did in their home country, but they're still poor by our standards. As a thought experiment, imagine what would happen to inequality in a country of 1M if you added 100K people who had incomes in the (previous) bottom quintile. Obviously, measured inequality would go up, but when you look behind the data you realize no one was getting rich at the expense of anyone else.

2. Women used to be "barefoot and pregnant." They didn't get college degrees and they didn't work. These days, that's no longer the case. Since, "birds of a feather flock together," men and women with similar education backgrounds and incomes (or expected incomes when young) often marry one another. That is, highly educated and productive people tend to marry one another, further increasing the gap between rich and poor.

Below are some other random thoughts on the topic:

1. Inequality says nothing about mobility. Maybe there's a certain gap between rich and poor, but people move along quintiles a lot. And maybe there is a relationship (positive or negative) between inequality and mobility. In other words, even if measured income inequality has increased, you actually can't draw the conclusion that "the rich are getting richer." Check the Economics Group income inequality post, I put up a video that explains this point. (Statistical groups are not flesh and blood human beings that remain fixed/constant over time, and should not be treated as such.)

2. Sometimes the studies look at household income inequality, without controlling for household size and the fact that family size among various groups has changed over time. So, maybe in 1950 the bottom quintile and top quintile both had the same average number of children. And maybe today, the bottom quintile has a lower number of people on average. Maybe it turns out that "rich families" are rich because they are often comprised of two working parents. And poor families are more likely to be comprised of single, recent college grads, or households with only one working parent due to divorce.

3. Is "correcting" income inequality (even to a modest degree) achievable? And if so, what sorts of unintended consequences will result?

What's my point? You can't just look at some statistical artifact and draw a lot of conclusions that people try to draw. Data and the studies that analyze them are complicated, sometimes confusing, and often leave a lot to be desired.

2/20/11
econ:

Also, keep in mind some of the reasons that the (measured) income inequality in the US has increased:

1. We take a tremendous amount of immigrants that start off at the bottom of the income ladder. They make much more than they did in their home country, but they're still poor by our standards. As a thought experiment, imagine what would happen to inequality in a country of 1M if you added 100K people who had incomes in the (previous) bottom quintile. Obviously, measured inequality would go up, but when you look behind the data you realize no one was getting rich at the expense of anyone else.

2. Women used to be "barefoot and pregnant." They didn't get college degrees and they didn't work. These days, that's no longer the case. Since, "birds of a feather flock together," men and women with similar education backgrounds and incomes (or expected incomes when young) often marry one another. That is, highly educated and productive people tend to marry one another, further increasing the gap between rich and poor.

Below are some other random thoughts on the topic:

1. Inequality says nothing about mobility. Maybe there's a certain gap between rich and poor, but people move along quintiles a lot. And maybe there is a relationship (positive or negative) between inequality and mobility. In other words, even if measured income inequality has increased, you actually can't draw the conclusion that "the rich are getting richer." Check the Economics Group income inequality post, I put up a video that explains this point. (Statistical groups are not flesh and blood human beings that remain fixed/constant over time, and should not be treated as such.)

2. Sometimes the studies look at household income inequality, without controlling for household size and the fact that family size among various groups has changed over time. So, maybe in 1950 the bottom quintile and top quintile both had the same average number of children. And maybe today, the bottom quintile has a lower number of people on average. Maybe it turns out that "rich families" are rich because they are often comprised of two working parents. And poor families are more likely to be comprised of single, recent college grads, or households with only one working parent due to divorce.

3. Is "correcting" income inequality (even to a modest degree) achievable? And if so, what sorts of unintended consequences will result?

What's my point? You can't just look at some statistical artifact and draw a lot of conclusions that people try to draw. Data and the studies that analyze them are complicated, sometimes confusing, and often leave a lot to be desired.

I agree that we need to look beyond the raw statistics. Nevertheless, I've seen in various places that the top 400 earners in the U.S. together earned more than the bottom 50% combined. You don't need to look too much into those numbers to come up with some hard conclusions. Obviously this is happening for a reason, but we should not dismiss it out of hand like so many libertarians and conservatives do.

2/20/11
prinmemo:

I agree that we need to look beyond the raw statistics. Nevertheless, I've seen in various places that the top 400 earners in the U.S. together earned more than the bottom 50% combined. You don't need to look too much into those numbers to come up with some hard conclusions. Obviously this is happening for a reason, but we should not dismiss it out of hand like so many libertarians and conservatives do.

So, why does it matter if the top 400 earners are wealthier than the bottom 50% combined? Also, that wouldn't even necessarily mean income inequality has increased, since that's just some small percentage of the population.

2/20/11
econ:
prinmemo:

I agree that we need to look beyond the raw statistics. Nevertheless, I've seen in various places that the top 400 earners in the U.S. together earned more than the bottom 50% combined. You don't need to look too much into those numbers to come up with some hard conclusions. Obviously this is happening for a reason, but we should not dismiss it out of hand like so many libertarians and conservatives do.

So, why does it matter if the top 400 earners are wealthier than the bottom 50% combined? Also, that wouldn't even necessarily mean income inequality has increased, since that's just some small percentage of the population.

I think we take different views on how to analyze this issue. It seems that you really don't care about the causes and/or consequences of this inequality from an economics and/or political perspective. If one guy owns 99% of all wealth in a country you really have zero problem with that. Am I understanding you correctly?

All I am saying is that we need to look deep into the numbers and figure out whether we are seeing this large income disparity because those at the top are just killing it or because those at the bottom are falling seriously behind. If those at the top are killing it then I really have no issues with it. If it's because those at the bottom are falling seriously behind then we need to figure out why that is. Is it because our public schools are severely underperforming and not giving kids a fair shot at making it? Or is it because we have other severe social problems that are making an aggregate impact on some kinds of people?

From my perspective, it is worth looking into this. From your perspective, it doesn't matter.

I will tell you that I am originally from a country that doesn't care about this stuff and income inequality there is belligerently high (higher than the U.S.). The result is strong political polarization, high crime, and really a lack of a merit based system, since only those with money can ever really afford a good enough education to get the good jobs, produce, etc. Now, I am not comparing the U.S. to my native country, but I would hate to see this country move in that direction.

2/20/11
prinmemo:
econ:
prinmemo:

I agree that we need to look beyond the raw statistics. Nevertheless, I've seen in various places that the top 400 earners in the U.S. together earned more than the bottom 50% combined. You don't need to look too much into those numbers to come up with some hard conclusions. Obviously this is happening for a reason, but we should not dismiss it out of hand like so many libertarians and conservatives do.

So, why does it matter if the top 400 earners are wealthier than the bottom 50% combined? Also, that wouldn't even necessarily mean income inequality has increased, since that's just some small percentage of the population.

I think we take different views on how to analyze this issue. It seems that you really don't care about the causes and/or consequences of this inequality from an economics and/or political perspective. If one guy owns 99% of all wealth in a country you really have zero problem with that. Am I understanding you correctly?

You are not understanding me correctly. You assume I don't care about the causes, when in fact, I do. Unless he is allowed to use coercion, I realize that one guy can only get 99% of the wealth in a country if he provides a tremendous amount of benefit to everyone else. That's how wealth happens under voluntary exchange. Econ 101 logic implies that an exchange was mutually beneficial (assuming the exchange was voluntary) because otherwise it would not have taken place.

Furthermore, even if we could all agree that a certain level of income inequality is undesirable, does that mean we should use coercion to rearrange the income distribution produced by voluntary decisions/actions? If I earn $X voluntarily, why should you and other voters be allowed to coercively take it away? Is that consistent with individual liberty and property rights? Lastly, you might not even be able to get the levels of equality you hope for, even after decreasing the levels of freedom and production. As Thomas Sowell explains in the debate portion of the "Free to Choose" episode on inequality:

SOWELL: I think we're talking at cross purposes. On the one hand we're talking about results that we're hoping for. On the other hand we're talking about processes that we're setting in motion. You're saying, should we hope for certain kinds of lessening of inequality and so on. The real question, the political question is: shall we set in motion certain processes because we hope for that and do those processes enhance or reduce freedom? And I think the argument that Milton is making and certainly the argument that I would make is that the attempt at doing these things __ and it doesn't really matter, it's a complete strawman to talk about absolute inequality if you're __

JAY: This is the strawman.

SOWELL: __ no, no not at all.

JAY: Yes it is. Absolutely throughout the film this is the strawman he brings up in order to say how ridiculous to have absolute equality. And then he goes on to say __

SOWELL: No.

JAY: __ how ridiculous to have __

SOWELL: My whole point is __ as a result, you see, that you set up processes and the end result may not be any more or less inequality that exists now, but the question of it is, those processes may indeed reduce freedom greatly. I would go beyond the question of equality and put it more generally that any process to ascribe any status to any group of people, equality, inferiority, superiority, must necessarily reduce freedom because whatever the government wishes to ascribe to any group, whatever place, to use the phrase that was very common in the south that blacks should have their place, whatever place the government is going to assign to people. That place will not coincide __ wait __ that place will not coincide either with what all those people are doing or with how others perceive all those people because there's too much diversity among human beings to maintain any system of ascribed status from the top is going to mean reducing people's freedom across the spectrum. That's the point.

2/20/11

dude do your own homework

2/20/11

Dude, take a chill pill. If you read what I wrote closely you'd realize I admitted that the reasons for this disparity could be legit. The issue I take is not that the rich make so much money but that the bottom half struggle so much to keep up. It's not about taking aim at the rich, but rather addressing what ails those at the bottom.

Also, are you saying I am jelous? Are you saying that if I think this isn't ideal it means I am jelous?

Again, chill. And don't assume so much.

2/20/11

Smitty, why do you always insult people if they disagree with you? I don't think inequality is necessarily a bad thing, and I don't think most liberals do, either. As long as everyone is better off I am okay with it.

2/20/11

You keep on harping on coercion. I haven't advocated higher taxes anywhere. Rather, I prefer to increase investments designed to make those at the bottom more competitive if that is the cause of higher inequality. To pay for this, I advocate lower spending elsewhere, such as the military. If higher inequality is a result of the top doing better and not because those in the bottom half are doing poorly, I have zero problem with inequality.

2/20/11
prinmemo:

You keep on harping on coercion. I haven't advocated higher taxes anywhere. Rather, I prefer to increase investments designed to make those at the bottom more competitive if that is the cause of higher inequality. To pay for this, I advocate lower spending elsewhere, such as the military. If higher inequality is a result of the top doing better and not because those in the bottom half are doing poorly, I have zero problem with inequality.

First, even if you're just redirecting government funds, the principle still holds -- should we be allowed to use governmental funds (which is always taken coercively) to aim for certain levels of equality. The issues of freedom, liberty, and coercion don't disappear just because we're talking about money that has already been taken coercively and is currently being spent elsewhere.

Second, what kind of investments are you talking about specifically? And are those investment decisions being made voluntarily (either via markets, charity, or non-profits) or are those decisions being made politically (which is necessarily coercive)?

Third, I think it's ridiculous to think you could actually figure out whether the inequality comes from the bottom half "doing poorly" or not. It's a very subjective question and even if you could try and come up with some more objective question, it'd still be hard to measure. If you see that over time, the top 10% earn more and the bottom 10% earn less, it's far from clear "the rich" have benefited at the expense of "the poor." And, if it comes about through voluntary actions, why should anyone stop it?

2/20/11
econ:
prinmemo:

You keep on harping on coercion. I haven't advocated higher taxes anywhere. Rather, I prefer to increase investments designed to make those at the bottom more competitive if that is the cause of higher inequality. To pay for this, I advocate lower spending elsewhere, such as the military. If higher inequality is a result of the top doing better and not because those in the bottom half are doing poorly, I have zero problem with inequality.

First, even if you're just redirecting government funds, the principle still holds -- should we be allowed to use governmental funds (which is always taken coercively) to aim for certain levels of equality. The issues of freedom, liberty, and coercion don't disappear just because we're talking about money that has already been taken coercively and is currently being spent elsewhere.

Second, what kind of investments are you talking about specifically? And are those investment decisions being made voluntarily (either via markets, charity, or non-profits) or are those decisions being made politically (which is necessarily coercive)?

Third, I think it's ridiculous to think you could actually figure out whether the inequality comes from the bottom half "doing poorly" or not. It's a very subjective question and even if you could try and come up with some more objective question, it'd still be hard to measure. If you see that over time, the top 10% earn more and the bottom 10% earn less, it's far from clear "the rich" have benefited at the expense of "the poor." And, if it comes about through voluntary actions, why should anyone stop it?

You want to have a society where no one pays any taxes and we have no government. Anything the government does to you is coercive (which is true, as Mr. Leviathan says hello, creates order, and makes sure some neanderthal doesn't just walk into your house, kills you and your children, and takes your wife and gets away with it). Let's get back to the real world and discuss things that can actually occur. Robert Nozick's Anarchy, State, and Utopia is a nice read and I agree with many things in there, but it will never be reality in a modern country. Milton Friedman's Capitalism and Freedom is also incredible, but some of the stuff in there is just impractical. Theory is nice and all, but it's not reality.

I bet you are against any and all kinds of taxes. Puts you at the extreme. Even Milton Friedman was okay with certain taxes, such as the carbon tax.

2/20/11
prinmemo:

You want to have a society where no one pays any taxes and we have no government. Anything the government does to you is coercive (which is true, as Mr. Leviathan says hello, creates order, and makes sure some neanderthal doesn't just walk into your house, kills you and your children, and takes your wife and gets away with it). Let's get back to the real world and discuss things that can actually occur. Robert Nozick's Anarchy, State, and Utopia is a nice read and I agree with many things in there, but it will never be reality in a modern country. Milton Friedman's Capitalism and Freedom is also incredible, but some of the stuff in there is just impractical. Theory is nice and all, but it's not reality.

I bet you are against any and all kinds of taxes. Puts you at the extreme. Even Milton Friedman was okay with certain taxes, such as the carbon tax.

I never said I want zero taxes. What I'm saying, and what I believe, is that all forms of taxation are coercive. Maybe it's a necessary evil, so we should keep it at bay and allow the government to do a limited number of functions. Friedman lays out his view on what they should be at the beginning of Capitalism and Freedom and I wouldn't call that an impractical list, at all. You could also take it in another direction, such as that laid out by Frederic Bastiat in "The Law." Basically, Bastiat says that human beings are born with certain inalienable rights and have the right to protect those rights via force. Furthermore, since people have the right to use force to protect certain rights, they can also allow the government to protect those rights. Another distinction that is often made, is that of negative vs. positive rights. I imagine you're already aware of this distinction, but I'll state it briefly, in case you aren't. There's a fundamental difference between saying that nobody has the right to take someone else's life, and saying that some people have the right to take the money/property of others because they're significantly wealthier.

2/20/11
econ:
prinmemo:

You want to have a society where no one pays any taxes and we have no government. Anything the government does to you is coercive (which is true, as Mr. Leviathan says hello, creates order, and makes sure some neanderthal doesn't just walk into your house, kills you and your children, and takes your wife and gets away with it). Let's get back to the real world and discuss things that can actually occur. Robert Nozick's Anarchy, State, and Utopia is a nice read and I agree with many things in there, but it will never be reality in a modern country. Milton Friedman's Capitalism and Freedom is also incredible, but some of the stuff in there is just impractical. Theory is nice and all, but it's not reality.

I bet you are against any and all kinds of taxes. Puts you at the extreme. Even Milton Friedman was okay with certain taxes, such as the carbon tax.

I never said I want zero taxes. What I'm saying, and what I believe, is that all forms of taxation are coercive. Maybe it's a necessary evil, so we should keep it at bay and allow the government to do a limited number of functions. Friedman lays out his view on what they should be at the beginning of Capitalism and Freedom and I wouldn't call that an impractical list, at all. You could also take it in another direction, such as that laid out by Frederic Bastiat in "The Law." Basically, Bastiat says that human beings are born with certain inalienable rights and have the right to protect those rights via force. Furthermore, since people have the right to use force to protect certain rights, they can also allow the government to protect those rights. Another distinction that is often made, is that of negative vs. positive rights. I imagine you're already aware of this distinction, but I'll state it briefly, in case you aren't. There's a fundamental difference between saying that nobody has the right to take someone else's life, and saying that some people have the right to take the money/property of others because they're significantly wealthier.

Yes, all forms of taxation are coercive. Monopolies that control the cost of primary goods and corporations that collectively bargain against a disorganized labor force are also coercive.

I really don't care if I get fucked by the government or fucked by an aristocrat, it's still a pain in the ass. Pass the lube.

2/20/11
monkeysama:

Monopolies that control the cost of primary goods and corporations that collectively bargain against a disorganized labor force are also coercive.

Not really, since they are interacting with one another in a voluntary way. Keep the proper dichotomy in mind, voluntary action versus coercion...

Not to mention, monopolies are often the result of special privileges granted by government, but I digress...

2/21/11
econ:
monkeysama:

Monopolies that control the cost of primary goods and corporations that collectively bargain against a disorganized labor force are also coercive.

Not really, since they are interacting with one another in a voluntary way. Keep the proper dichotomy in mind, voluntary action versus coercion...

Not to mention, monopolies are often the result of special privileges granted by government, but I digress...

You have an interesting definition of voluntary. Voluntarily accepting lower wages so you can eat and voluntarily being crushed into debt by rising prices doesn't seem so voluntary to me when that's your only option.

Please try and keep the proper dichotomy in mind.

2/21/11
monkeysama:

You have an interesting definition of voluntary. Voluntarily accepting lower wages so you can eat and voluntarily being crushed into debt by rising prices doesn't seem so voluntary to me when that's your only option.

Please try and keep the proper dichotomy in mind.

Nope, you missed the whole point, once again... voluntary in the sense that you do not have the right to coercively take my property because you feel you have "too low a wage," "not enough food," or "too much debt." You can persuade me to pay you a higher wage, give you some money, give you some food, or help relieve your debt, either through charity or through offering to trade something in return, but you can not just have whatever you want. Sure, you might not want your current wage, but if nobody wants to pay you any more than that, it means you can't come up with some sort of voluntary exchange. Notice that voluntary exchanges only take place when both parties stand to benefit, in other words it's a positive-sum situation. When you use coercion, one person benefits at the expense of someone else, which is usually a negative-sum situation (under the best case scenario, it's zero-sum).

Even if you only have one option, what gives you the right to use force to create more options, and therefore reducing the choices (and liberty) of others? (And, I'm even putting aside the fact that there are seldom cases in which you really only have a single option.)

2/21/11
econ:
monkeysama:

You have an interesting definition of voluntary. Voluntarily accepting lower wages so you can eat and voluntarily being crushed into debt by rising prices doesn't seem so voluntary to me when that's your only option.

Please try and keep the proper dichotomy in mind.

Nope, you missed the whole point, once again... voluntary in the sense that you do not have the right to coercively take my property because you feel you have "too low a wage," "not enough food," or "too much debt." You can persuade me to pay you a higher wage, give you some money, give you some food, or help relieve your debt, either through charity or through offering to trade something in return, but you can not just have whatever you want. Sure, you might not want your current wage. But, if nobody wants to pay you any more than that, you can't come up with some sort of voluntary exchange. Notice that voluntary exchanges only take place when both parties stand to benefit, in other words it's a positive-sum situation. When you use coercion, one person benefits at the expense of someone else which is often a negative-sum situation (under the best case scenario, it's zero-sum).

Even if you only have one option, what gives you the right to use force to create more options, and therefore reducing the choices (and liberty) of others?

And you've entirely missed mine. If a man is dying of thirst in the desert he'll do anything for a sip of water. Such is the condition of many of today's working class - it has nothing to do with a "voluntary" transaction.

Rights have got nothing to do with it. If enough people are starving then they'll rise up and take your food from you. Sure you might not want your property stripped from you as people ransack your home or kidnap your children (as they do in countries with very high income inequality, countries that the US is currently trying to emulate). But I guess that's just too bad isn't it?

I take it my far subtler point wasn't made in my last point, but using lots of words with italics in them doesn't help to make your point, but it sure does prove how much of a pedantic jackass you are.

2/21/11
monkeysama:

And you've entirely missed mine. If a man is dying of thirst in the desert he'll do anything for a sip of water. Such is the condition of many of today's working class - it has nothing to do with a "voluntary" transaction.

Rights have got nothing to do with it. If enough people are starving then they'll rise up and take your food from you. Sure you might not want your property stripped from you as people ransack your home or kidnap your children (as they do in countries with very high income inequality, countries that the US is currently trying to emulate). But I guess that's just too bad isn't it?

I take it my far subtler point wasn't made in my last point, but using lots of words with italics in them doesn't help to make your point, but it sure does prove how much of a pedantic jackass you are.

Inequality has nothing do to with dying of thirst. The poor in the US are far from dying of hunger and thirst. The poor in the US are among the richest people in the world. You should keep in mind the difference between inequality and poverty. Even in your statement of "countries the US is trying to emulate" you should realize that you might not be controlling for wealth, i.e., the fact that people are robbing others for food is more a function of poverty than inequality (or in other cases, a failed legal system which secures the rights I'm referring to). Maybe even more importantly, is how that inequality comes about, whether it's through coercion or voluntary exchange. Richard Epstein discusses this eloquently here: http://www.econtalk.org/archives/2008/11/richard_e...

Lastly, you shouldn't dismiss the rights issue, as few issues are as important. The moment you allow too much coercion and encourage people to benefit themselves at the expense of others, as opposed to appealing to them in a voluntary manner, you will crush a lot of the wealth that was created in the first place -- potentially giving you a great deal of equality, in the form of everyone being pretty poor. Epstein also discusses this issue quite eloquently in the podcast above.

P.S. Yeah, you might as well call me a jackass because you're failing at arguing against any of my points. I guess you might as well reduce yourself to name calling when you can't win via logic and argumentation...

2/21/11
econ:
monkeysama:

And you've entirely missed mine. If a man is dying of thirst in the desert he'll do anything for a sip of water. Such is the condition of many of today's working class - it has nothing to do with a "voluntary" transaction.

Rights have got nothing to do with it. If enough people are starving then they'll rise up and take your food from you. Sure you might not want your property stripped from you as people ransack your home or kidnap your children (as they do in countries with very high income inequality, countries that the US is currently trying to emulate). But I guess that's just too bad isn't it?

I take it my far subtler point wasn't made in my last point, but using lots of words with italics in them doesn't help to make your point, but it sure does prove how much of a pedantic jackass you are.

Inequality has nothing do to with dying of thirst. The poor in the US are far from dying of hunger and thirst. The poor in the US are among the richest people in the world. You should keep in mind the difference between inequality and poverty. Even in your statement of "countries the US is trying to emulate" you should realize that you might not be controlling for wealth, i.e., the fact that people are robbing others for food is more a function of poverty than inequality (or in other cases, a failed legal system which secures the rights I'm referring to). Maybe even more importantly, is how that inequality comes about, whether it's through coercion or voluntary exchange. Richard Epstein discusses this eloquently here: http://www.econtalk.org/archives/2008/11/richard_e...

Lastly, you shouldn't dismiss the rights issue, as few issues are as important. The moment you allow too much coercion and encourage people to benefit themselves at the expense of others, as opposed to appealing to them in a voluntary manner, you will crush a lot of the wealth that was created in the first place -- potentially giving you a great deal of equality, in the form of everyone being pretty poor. Epstein also discusses this issue quite eloquently in the podcast above.

P.S. Yeah, you might as well call me a jackass because you're failing at arguing against any of my points. I guess you might as well reduce yourself to name calling when you can't win via logic and argumentation...

I respond to holier than thou pedagogy with name calling - so sue me.

You keep saying voluntary, but I don't think that you know what the word means. Government sponsored monopolies are not voluntary. Bank bailouts are not voluntary. Cushy defense contracts are not voluntary. A private for profit prison system is not voluntary. The systematic destruction of union bargaining rights is not voluntary. The taxing of capital gains at rates 20 percent below income is not voluntary. The skyrocketing costs of
healthcare and higher education is not voluntary.

Here's Merriam-Webster's take on voluntary.
Definition of VOLUNTARY

1
: proceeding from the will or from one's own choice or consent
2
: unconstrained by interference : self-determining
3
: done by design or intention : intentional
4
: of, relating to, subject to, or regulated by the will
5
: having power of free choice
6
: provided or supported by voluntary action
7
: acting or done of one's own free will without valuable consideration or legal obligation
-- vol*un*tar*i*ly adverb
-- vol*un*tar*i*ness noun
See voluntary defined for English-language learners >>

I don't consent to any of what I have mentioned. I don't freely choose for teachers to be stripped of their contracts while the Koch brother's get a tax write off. It is not my will that the median wage in this country has been stagnant for thirty years while buying power has fallen. It is not my design that jobs are being shipped off to India.

2/21/11
monkeysama:

You keep saying voluntary, but I don't think that you know what the word means. Government sponsored monopolies are not voluntary. Bank bailouts are not voluntary. Cushy defense contracts are not voluntary. A private for profit prison system is not voluntary. The systematic destruction of union bargaining rights is not voluntary. The taxing of capital gains at rates 20 percent below income is not voluntary. The skyrocketing costs of healthcare and higher education is not voluntary.

Sigh... I find it hard to believe you didn't realize I was talking about voluntary exchange and voluntary interaction. That is, if I want a BMW, a $100K salary, or a girlfriend, I have to find someone who is willing to enter into that exchange or relationship with me...

monkeysama:

I don't consent to any of what I have mentioned. I don't freely choose for teachers to be stripped of their contracts while the Koch brother's get a tax write off. It is not my will that the median wage in this country has been stagnant for thirty years while buying power has fallen. It is not my design that jobs are being shipped off to India.

Again, I would argue that you're missing the point.... I don't consent to the fact that I'm currently unemployed, but that doesn't deny that it came out of a process of voluntary exchange/interaction. Furthermore, just because I don't consent, doesn't give me the right to force someone else to accommodate me and my wants/needs. It doesn't matter if you consent or not to Bill Gates salary or the fact that Susie Q doesn't want to blow you, it is voluntary in the sense that the outcome came about through voluntary exchange/interaction.

By the way, your examples in this quote are peculiar because they seem to prove my point. The Kock brothers tax write off, teachers contracts, and median wage buying power should not be decided coercively and centrally... they should be decided via voluntary exchange/interaction...

2/20/11

QE2 allows the rich to benefit at the expense of the poor. 92% of financial wealth in this country is owned by the top 20% of earners. QE2's stated aim is to keep equity prices higher (see Bernanke on 60 minutes or read the Fed's press releases). Meanwhile, CPI (with Food and Energy) will be increasing as this new money finds itself in commodity funds, pushing up prices on gas and food. Thus, in a way, QE2 increases the cost of living for the poor, and increases the value of equity holdings for the rich, making it an enormous transfer of wealth.

The rest of the above topic was discussed at length about a month ago.

looking for that pick-me-up to power through an all-nighter?
2/20/11

QE2 allows the rich to benefit at the expense of the poor. 92% of financial wealth in this country is owned by the top 20% of earners. QE2's stated aim is to keep equity prices higher (see Bernanke on 60 minutes or read the Fed's press releases). Meanwhile, CPI (with Food and Energy) will be increasing as this new money finds itself in commodity funds, pushing up prices on gas and food. Thus, in a way, QE2 increases the cost of living for the poor, and increases the value of equity holdings for the rich, making it an enormous transfer of wealth.

The rest of the above topic was discussed at length about a month ago.

I don't disagree. I would refer to my Sowell quote above, and say that the government shouldn't be trying to ascribe status, wealth, or anything like that to any group.... rich or poor....

2/20/11

Nice, LIBOR. You just drop kicked some fools!

2/20/11

Also econ, I like the talk. Thanks!

2/20/11

im using some of this in my paper ty op

2/21/11

right so poor people just settle for worse universities? great idea.

The UK had oxbridge tuiton fees of 4500 dollars per year(yes this will change now).

The other major european countries mainly have negligible tuition fees(of the order of up to 1500 dollars per year). Yes there are much more expensive private universities in europe, but those are shit for the most part, and on par with state universities in very few cases.

you still seem to be the most expensive anywhere to me :X

2/21/11

As for the educational costs question, at the undergraduate level the best universities provide incredibly good financial aid for students from low income families. At Princeton (and I know at other similar schools) a poor kid basically gets to go for free and doesn't need to get any loans. I know of several examples of this. In fact, I know the university goes out of its way to ensure that no one doesn't choose not to attend on account of money.

The biggest challenge to low income students, IMO, is getting a good enough education at the pre-university level to compete effectively. If they manage to do it and get into a top school, money should never be an issue.

2/21/11

how vital is it to go to private school before college in the states? Is it matter of you essentially being screwed if you dont like in the UK?

Id say another big challenge is the fact that poorer students can't do unpaid summer internships simply becaus they can't afford to.

Also I am not saying college education is prohibitively expensive, I am just saying arguing the US college system is most likely the priciest in the world.

2/21/11

Not to mention you're ignoring a shit ton of stuff. Probably most important would be the effect of positional goods. I bet that the education I can get from Arizona State today is leagues above Harvard in 1910, but it doesn't matter. If you're from a nontarget school then you're chance of getting a high paying job in Big Finance is essentially zero. The size of the pie has increased - how the hell does that help me?

2/21/11

Significantly changed your tune in the last few months Monkeysama

If I had asked people what they wanted, they would have said faster horses - Henry Ford

2/21/11

I'm getting bitter.

2/21/11

Also I can't stand this Randian nonsense - that people can sneer at those who are less fortunate than them and point to how all their gains are through their hard work and personal brilliance is simply astounding given the last 2 years.

99 percent of the people who've made it got lucky. Not saying hard work wasn't involved, but people don't know how easy it is to fall from their pedestal.

2/21/11
monkeysama:

Also I can't stand this Randian nonsense - that people can sneer at those who are less fortunate than them and point to how all their gains are through their hard work and personal brilliance is simply astounding given the last 2 years.

99 percent of the people who've made it got lucky. Not saying hard work wasn't involved, but people don't know how easy it is to fall from their pedestal.

That's irrelevant for the conversation at hand, as far as I'm concerned. We'll never know how much it is luck, skill, or anything else. More importantly, it doesn't matter in my opinion -- even if it is luck, why does that give someone the right to forcefully take someone else's property?

2/21/11
econ:
monkeysama:

Also I can't stand this Randian nonsense - that people can sneer at those who are less fortunate than them and point to how all their gains are through their hard work and personal brilliance is simply astounding given the last 2 years.

99 percent of the people who've made it got lucky. Not saying hard work wasn't involved, but people don't know how easy it is to fall from their pedestal.

That's irrelevant for the conversation at hand, as far as I'm concerned. We'll never know how much it is luck, skill, or anything else. More importantly, it doesn't matter in my opinion -- even if it is luck, why does that give someone the right to forcefully take someone else's property?

And, nobody is sneering at people less fortunate than themselves... I feel sorry for many people and would love to help them out through buying their product/service or giving them money. The question is whether I should be forced to do so. I say, no. I should be allowed to help people in the way and to the degree that I choose.

2/21/11

Oh man, the voluntary discussion. Time for me to revive this old thread.

looking for that pick-me-up to power through an all-nighter?
2/21/11

There is no difference between being forced to play in a rigged labor market and "involuntary". Bribing the government with money and lobbyists to change the rules of the market is only different from a military state by degree but not by kind.

2/21/11
monkeysama:

There is no difference between being forced to play in a rigged labor market and force. Bribing the government with money and lobbyists to change the rules of the market is only different from a military state by degree but not by kind.

Why do you keep assuming I am for bribing the government with money/lobbyists? I've said a million times in this thread that I don't agree with that use of force/government, neither for corporations, nor for anyone else. Nice attempt at a strawman though...

2/21/11
econ:
monkeysama:

There is no difference between being forced to play in a rigged labor market and force. Bribing the government with money and lobbyists to change the rules of the market is only different from a military state by degree but not by kind.

Why do you keep assuming I am for bribing the government with money/lobbyists? I've said a million times in this thread that I don't agree with that use of force/government, neither for corporations, nor for anyone else. Nice attempt at a strawman though...

Not a strawman. The natural endpoint of libertarian idealism is that wealth is concentrated in the hands of the few. Moneyed interests will seek to keep and enlarge their power and so buy legislation and representatives that will give them monopoly rights, tax writeoffs, environmental permits for pollution, anti-union bills et cetera.

I'm not attacking a position you have not made. I'm attacking the end result of your philosophical stance as untenable to basic human decency and using that as an example of why you are wrong.

2/21/11
monkeysama:

The natural endpoint of libertarian idealism is that wealth is concentrated in the hands of the few.

I completely disagree, but let's not go there...

2/21/11

It's not helping them if the game is already set up so they can't help but lose. It's evening the odds.

2/21/11
monkeysama:

It's not helping them if the game is already set up so they can't help but lose. It's evening the odds.

How is the game already set up so that "they" lose? Also, who is the "they" you're referring to here?

And, why don't we just stop letting "them" rig the game, instead of trying to allow other people to rig it too?

2/21/11
econ:
monkeysama:

It's not helping them if the game is already set up so they can't help but lose. It's evening the odds.

How is the game already set up so that "they" lose? Also, who is the "they" you're referring to here?

And, why don't we just stop letting "them" rig the game, instead of trying to allow other people to rig it too?

Don't play stupid. It's beneath you. The "they" in this case are the less fortunate and the "them" in this case are moneyed interests, which is clear if you review the thread. If you want hard numbers how about we take the "they" to be anyone who is making less than 99 percent of the population and the "them" as the richest 1 percent.

2/21/11
monkeysama:

Don't play stupid. It's beneath you. The "they" in this case are the less fortunate and the "them" in this case are moneyed interests, which is clear if you review the thread. If you want hard numbers how about we take the "they" to be anyone who is making less than 99 percent of the population and the "them" as the richest 1 percent.

I'm not playing stupid. You were being incredibly vague, so I didn't want to argue with such a vague statement, since I could wind up misinterpreting you.

Do the 99% at the bottom and the 1% at the top remain fixed? Isn't something like 1/3 or 1/2 of the Forbes richest people self-made? In other words, you're treating "them" and "they" as fixed groups, when in fact they're not. This might help you think a little clearer: http://www.youtube.com/watch?v=0S-O6WDalug

Not to mention, even if it isn't the case, you still haven't explained to me why I should be allowed to forcefully take their property.

2/21/11
econ:
monkeysama:

Don't play stupid. It's beneath you. The "they" in this case are the less fortunate and the "them" in this case are moneyed interests, which is clear if you review the thread. If you want hard numbers how about we take the "they" to be anyone who is making less than 99 percent of the population and the "them" as the richest 1 percent.

I'm not playing stupid. You were being incredibly vague, so I didn't want to argue with such a vague statement, since I could wind up misinterpreting you.

Do the 99% at the bottom and the 1% at the top remain fixed? Isn't something like 1/3 or 1/2 of the Forbes richest people self-made? In other words, you're treating "them" and "they" as fixed groups, when in fact they're not. This might help you think a little clearer: http://www.youtube.com/watch?v=0S-O6WDalug

Not to mention, even if it isn't the case, you still haven't explained to me why I should be allowed to forcefully take their property.

I don't give a shit if people come in and out of poverty. That's great! But the taxation of the top 1 percent (and top 5 for that matter) needs to be much more progressive to help out those on the bottom of the scale.

In a truly equitable society we should be able to pass this test:
http://en.wikipedia.org/wiki/Veil_of_ignorance

We are far far from that.

2/21/11
monkeysama:

I don't give a shit if people come in and out of poverty. That's great! But the taxation of the top 1 percent (and top 5 for that matter) needs to be much more progressive to help out those on the bottom of the scale.

Alright, I guess we should just quit arguing, as we obviously have fundamental differences of opinion. You don't like the distribution of wealth, so you think it's okay to use force and redistribute it in a way that's more desirable as you see it.

2/21/11
econ:
monkeysama:

I don't give a shit if people come in and out of poverty. That's great! But the taxation of the top 1 percent (and top 5 for that matter) needs to be much more progressive to help out those on the bottom of the scale.

Alright, I guess we should just quit arguing, as we obviously have fundamental differences of opinion. You don't like the distribution of wealth, so you think it's okay to use force and redistribute it in a way that's more desirable as you see it.

I don't think that force and redistribution of wealth should be allowed either, but politicians and their corporate overlords seem to think otherwise.

2/21/11
monkeysama:

I don't think that force and redistribution of wealth should be allowed either, but politicians and their corporate overlords seem to think otherwise.

So you agree that we should rely more on voluntary exchange/interaction?

2/21/11
econ:
monkeysama:

I don't think that force and redistribution of wealth should be allowed either, but politicians and their corporate overlords seem to think otherwise.

So you agree that we should rely more on voluntary exchange/interaction?

Voluntary exchange is a myth. It's more the exception than the rule, especially in the labor market.

2/21/11
monkeysama:
econ:
monkeysama:

I don't think that force and redistribution of wealth should be allowed either, but politicians and their corporate overlords seem to think otherwise.

So you agree that we should rely more on voluntary exchange/interaction?

Voluntary exchange is a myth. It's more the exception than the rule, especially in the labor market.

How is it a myth? You have a choice to exchange... In what way are you forced to exchanged(forced would make it not voluntary)

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

2/21/11
monkeysama:

Voluntary exchange is a myth. It's more the exception than the rule, especially in the labor market.

LOL! If two people are interacting in the labor market, didn't they both chose to enter into the contract?

2/21/11
econ:
monkeysama:

Voluntary exchange is a myth. It's more the exception than the rule, especially in the labor market.

LOL! If two people are interacting in the labor market, didn't they both chose to enter into the contract?

LOL! If a gigantic corporation that controls the political process and a single individual praying for a chance at a middle class income are interacting in the marketplace, didn't they both choose to enter into the contract?

Isn't it wonderful what framing a hypothetical can do?

2/21/11
monkeysama:

LOL! If a gigantic corporation that controls the political process and a single individual praying for a chance at a middle class income are interacting in the marketplace, didn't they both choose to enter into the contract?

Isn't it wonderful what framing a hypothetical can do?

LOL! I love you -- you're so ridiculous.

2/21/11
econ:
monkeysama:

LOL! If a gigantic corporation that controls the political process and a single individual praying for a chance at a middle class income are interacting in the marketplace, didn't they both choose to enter into the contract?

Isn't it wonderful what framing a hypothetical can do?

LOL! I love you -- you're so ridiculous.

Why is that ridiculous?

2/21/11

econ:
monkeysama:
I don't give a shit if people come in and out of poverty. That's great! But the taxation of the top 1 percent (and top 5 for that matter) needs to be much more progressive to help out those on the bottom of the scale.

Alright, I guess we should just quit arguing, as we obviously have fundamental differences of opinion. You don't like the distribution of wealth, so you think it's okay to use force and redistribute it in a way that's more desirable as you see it.

Econ,

My response is that if (and this is just a hypothetical if, though it could definitely be argued for) the rich gain an unfair advantage because they have a greater influence over certain policy decisions, or for any other advantage that having wealth gives them, should re-distributive policies be used to tilt the playing field back in the direction of the disadvantaged?

looking for that pick-me-up to power through an all-nighter?
2/21/11
econ:
monkeysama:

I don't give a shit if people come in and out of poverty. That's great! But the taxation of the top 1 percent (and top 5 for that matter) needs to be much more progressive to help out those on the bottom of the scale.

Alright, I guess we should just quit arguing, as we obviously have fundamental differences of opinion. You don't like the distribution of wealth, so you think it's okay to use force and redistribute it in a way that's more desirable as you see it.

Econ,

My response is that if (and this is just a hypothetical if, though it could definitely be argued for) the rich gain an unfair advantage because they have a greater influence over certain policy decisions, or for any other advantage that having wealth gives them, should re-distributive policies be used to tilt the playing field back in the direction of the disadvantaged?

See LIBOR gets it. This is the natural outcome of an oligarchic democracy - control by the moneyed class.

2/21/11

Econ,

My response is that if (and this is just a hypothetical if, though it could definitely be argued for) the rich gain an unfair advantage because they have a greater influence over certain policy decisions, or for any other advantage that having wealth gives them, should re-distributive policies be used to tilt the playing field back in the direction of the disadvantaged?

That's a very good question. I'd much rather address the root cause than try to tinker with the symptoms. We shouldn't allow anyone to use the political process to benefit at the expense of others.

2/21/11
econ:

Econ,

My response is that if (and this is just a hypothetical if, though it could definitely be argued for) the rich gain an unfair advantage because they have a greater influence over certain policy decisions, or for any other advantage that having wealth gives them, should re-distributive policies be used to tilt the playing field back in the direction of the disadvantaged?

That's a very good question. I'd much rather address the root cause than try to tinker with the symptoms. We shouldn't allow anyone to use the political process to benefit at the expense of others.

With all due respect, in your dreams. This will never happen. Those that have power will do everything they can to ensure what you propose never happens.

2/21/11
prinmemo:

With all due respect, in your dreams. This will never happen. Those that have power will do everything they can to ensure what you propose never happens.

It might never happen, but I thought we were discussing political philosophy and principles. The problem is, we allow way too many people to use the political process to benefit at the expense of others. If you can put a lot of restrictions on that, people have to accomplish their goals by persuasion as opposed to coercion. I agree with you that people will always be trying to benefit at the expense of others, whether it's the poor taking money from the rich, the steel industry calling for restrictions on imports, or large corporations restricting entry into their market. You want to have the sort of restrictions on government that make it much more difficult for people to do that. I'm not saying that's politically feasible today, but you never know what'll happen in the future.

2/21/11
econ:

Econ,

My response is that if (and this is just a hypothetical if, though it could definitely be argued for) the rich gain an unfair advantage because they have a greater influence over certain policy decisions, or for any other advantage that having wealth gives them, should re-distributive policies be used to tilt the playing field back in the direction of the disadvantaged?

That's a very good question. I'd much rather address the root cause than try to tinker with the symptoms. We shouldn't allow anyone to use the political process to benefit at the expense of others.

Yes, how do you plan on disallowing money to influence the political process? I would very much be interested in your plan.

And the only ridiculous I am is is ridiculously awesome.

2/21/11

My main concern with your argument is that you assume that coercion can only be accomplished directly or indirectly through government. That is an assumption I do not accept. Furthermore, your definition of voluntary is too theoretical.

2/21/11
prinmemo:

My main concern with your argument is that you assume that coercion can only be accomplished directly or indirectly through government. That is an assumption I do not accept. Furthermore, your definition of voluntary is too theoretical.

I do not assume that coercion can only be accomplished through government. People are raped, robbed, and killed by individuals daily. We should not allow people to do this to one another, and we should not allow the government to do it either.

I could easily get more practical, but we're still debating the elementary points, so it's not an issue yet.

2/21/11

If I had asked people what they wanted, they would have said faster horses - Henry Ford

2/21/11
2/21/11

I was referring to non violent coercion. Those would be some obvious examples, so I did not feel the need to mention them.

2/21/11
prinmemo:

I was referring to non violent coercion. Those would be some obvious examples, so I did not feel the need to mention them.

It'd be clearer for me if you did mention some examples.

2/21/11

Also, should the government protect us against coercion?

2/21/11
prinmemo:

Also, should the government protect us against coercion?

This is the very point of government. We surrender the ability to coerce others (Through force, or more broadly, through non-rational means) and grant the government a monopoly on coercion. The libertarian argument is that the government's sole purpose is to RESPOND to irrational coercion engaged in by its citizens.

Thus, if you and me engage in a transaction voluntarily, the government should have no business telling us we can or cannot do it. However, if you dupe me by lying, then its the government's job to establish a court system and police force to respond to your irrational coercion. The libertarian would argue that the government should not engage in any preliminary acts of violence (for instance, the government cannot pass a law requiring everyone who wishes to engage in transactions to take a polygraph test before doing so).

looking for that pick-me-up to power through an all-nighter?
2/21/11
prinmemo:

Also, should the government protect us against coercion?

This is the very point of government. We surrender the ability to coerce others (Through force, or more broadly, through non-rational means) and grant the government a monopoly on coercion. The libertarian argument is that the government's sole purpose is to RESPOND to irrational coercion engaged in by its citizens.

Thus, if you and me engage in a transaction voluntarily, the government should have no business telling us we can or cannot do it. However, if you dupe me by lying, then its the government's job to establish a court system and police force to respond to your irrational coercion. The libertarian would argue that the government should not engage in any preliminary acts of violence (for instance, the government cannot pass a law requiring everyone who wishes to engage in transactions to take a polygraph test before doing so).

Well put. I'd like to change some of those statements slightly though.

Libertarians don't often think the government has a monopoly on force, in the sense that you can defend yourself from force via force.

There are cases in which libertarians think there is some role for government to interfere in voluntary decision making. For example, pollution can come from voluntary exchange, where 3rd parties are being harmed.

2/21/11

monkeysama, what your saying is basically level the playing field...give everyone a chance to get a hit?

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

2/21/11

This is where I think your definition of "coercion" and "voluntary" is too theoretical and simplistic.

I'll just give you a very basic example of what most people would consider to be non-violent coercion: fraud. There are varying definitions of fraud (depends on the state, the type of action (securities versus other things, etc.) and other factors that courts consider, but a basic straightforward definition is:

1. A misrepresentation or omission of a material fact
2. Known by the perpetrator to be untrue or omit a material fact
3. Intended to induce the victim to act upon that misrepresentation or omission
4. The victim reasonably relies upon that misrepresentation or omission and makes some sort of decision on it (financial or otherwise)
5. The victim suffers some sort of economic damage

A very basic example would be when corporations cook their books. Many investors rely on the information in the audited financial statements to make their investment decisions. Basically like Enron and WorldCom.

Now, this is what I was referring to earlier when I said your definition of coercion is rather vague. From what I've gathered, it seems like you think the government ought not get in the way of voluntary exchanges. Well, this fraud example fits within your definition of "voluntary". The investors in Enron weren't COERCED into buying shares of Enron. No one MADE them do it. It was all VOLUNTARY.

So the question to you is whether we should have laws making fraud illegal? A strict reading of your position requires we not have any laws against this.

2/21/11
prinmemo:

This is where I think your definition of "coercion" and "voluntary" is too theoretical and simplistic.

I'll just give you a very basic example of what most people would consider to be non-violent coercion: fraud. There are varying definitions of fraud (depends on the state, the type of action (securities versus other things, etc.) and other factors that courts consider, but a basic straightforward definition is:

1. A misrepresentation or omission of a material fact
2. Known by the perpetrator to be untrue or omit a material fact
3. Intended to induce the victim to act upon that misrepresentation or omission
4. The victim reasonably relies upon that misrepresentation or omission and makes some sort of decision on it (financial or otherwise)
5. The victim suffers some sort of economic damage

A very basic example would be when corporations cook their books. Many investors rely on the information in the audited financial statements to make their investment decisions. Basically like Enron and WorldCom.

Now, this is what I was referring to earlier when I said your definition of coercion is rather vague. From what I've gathered, it seems like you think the government ought not get in the way of voluntary exchanges. Well, this fraud example fits within your definition of "voluntary". The investors in Enron weren't COERCED into buying shares of Enron. No one MADE them do it. It was all VOLUNTARY.

So the question to you is whether we should have laws making fraud illegal? A strict reading of your position requires we not have any laws against this.

We should definitely have courts of law that address fraud.

2/21/11
econ:
prinmemo:

This is where I think your definition of "coercion" and "voluntary" is too theoretical and simplistic.

I'll just give you a very basic example of what most people would consider to be non-violent coercion: fraud. There are varying definitions of fraud (depends on the state, the type of action (securities versus other things, etc.) and other factors that courts consider, but a basic straightforward definition is:

1. A misrepresentation or omission of a material fact
2. Known by the perpetrator to be untrue or omit a material fact
3. Intended to induce the victim to act upon that misrepresentation or omission
4. The victim reasonably relies upon that misrepresentation or omission and makes some sort of decision on it (financial or otherwise)
5. The victim suffers some sort of economic damage

A very basic example would be when corporations cook their books. Many investors rely on the information in the audited financial statements to make their investment decisions. Basically like Enron and WorldCom.

Now, this is what I was referring to earlier when I said your definition of coercion is rather vague. From what I've gathered, it seems like you think the government ought not get in the way of voluntary exchanges. Well, this fraud example fits within your definition of "voluntary". The investors in Enron weren't COERCED into buying shares of Enron. No one MADE them do it. It was all VOLUNTARY.

So the question to you is whether we should have laws making fraud illegal? A strict reading of your position requires we not have any laws against this.

We should definitely have courts of law that address fraud.

Well, duh! Who wouldn't agree with that? You haven't addressed the fact that fraud occurs through voluntary exchange in the marketplace. You are all about protecting people's right to voluntary exchange. I gave you an example of a voluntary exchange that in the eyes of everyone is a crime and you essentially say you think it should be illegal. How is that consistent with your position re: voluntary exchange? It's not!

2/21/11
prinmemo:

Well, duh! Who wouldn't agree with that? You haven't addressed the fact that fraud occurs through voluntary exchange in the marketplace. You are all about protecting people's right to voluntary exchange. I gave you an example of a voluntary exchange that in the eyes of everyone is a crime and you essentially say you think it should be illegal. How is that consistent with your position re: voluntary exchange? It's not!

A lot of libertarians will tell you that fraud is coercion, but I was hoping to avoid that discussion, at least for now.

2/21/11
econ:
prinmemo:

Well, duh! Who wouldn't agree with that? You haven't addressed the fact that fraud occurs through voluntary exchange in the marketplace. You are all about protecting people's right to voluntary exchange. I gave you an example of a voluntary exchange that in the eyes of everyone is a crime and you essentially say you think it should be illegal. How is that consistent with your position re: voluntary exchange? It's not!

A lot of libertarians will tell you that fraud is coercion, but I was hoping to avoid that discussion, at least for now.

So then there can be coercion even when an exchange is voluntary?

2/21/11
prinmemo:
econ:
prinmemo:

Well, duh! Who wouldn't agree with that? You haven't addressed the fact that fraud occurs through voluntary exchange in the marketplace. You are all about protecting people's right to voluntary exchange. I gave you an example of a voluntary exchange that in the eyes of everyone is a crime and you essentially say you think it should be illegal. How is that consistent with your position re: voluntary exchange? It's not!

A lot of libertarians will tell you that fraud is coercion, but I was hoping to avoid that discussion, at least for now.

So then there can be coercion even when an exchange is voluntary?

There's an important subtly here though, the original exchange was based on false pretenses. So, it wasn't voluntary in the sense that one party thought they were entering into an exchange that they actually weren't. If I say, I'll give you X for Y, you give me Y and I don't give you X, then you agreed to an exchange that didn't actually take place.

2/21/11
econ:
prinmemo:
econ:
prinmemo:

Well, duh! Who wouldn't agree with that? You haven't addressed the fact that fraud occurs through voluntary exchange in the marketplace. You are all about protecting people's right to voluntary exchange. I gave you an example of a voluntary exchange that in the eyes of everyone is a crime and you essentially say you think it should be illegal. How is that consistent with your position re: voluntary exchange? It's not!

A lot of libertarians will tell you that fraud is coercion, but I was hoping to avoid that discussion, at least for now.

So then there can be coercion even when an exchange is voluntary?

There's an important subtly here though, the original exchange was based on false pretenses. So, it wasn't voluntary in the sense that one party thought they were entering into an exchange that they actually weren't. If I say, I'll give you X for Y, you give me Y and I don't give you X, then you agreed to an exchange that didn't actually take place.

Ok, so we have our first exception to your argument that anything that is entered into voluntarily is not coercion: exchange based on false pretenses. Are there any others?

2/21/11
prinmemo:

Ok, so we have our first exception to your argument that anything that is entered into voluntarily is not coercion: exchange based on false pretenses. Are there any others?

Look, I feel like we're arguing about semantics. One could argue that it wasn't a voluntary exchange because the exchange that was agreed upon didn't actually take place.

2/21/11
econ:
prinmemo:

Ok, so we have our first exception to your argument that anything that is entered into voluntarily is not coercion: exchange based on false pretenses. Are there any others?

Look, I feel like we're arguing about semantics. One could argue that it wasn't a voluntary exchange because the exchange that was agreed upon didn't actually take place.

Like I said, your definition of voluntary is rather vague. You have essentially argued that coercion occurs when one party makes another party do something by force (not voluntarily). In a fraud, no one is making anyone do anything. The literal definition of voluntary is: "done, made, brought about, undertaken, etc., of one's own accord or by free choice." The victim in a fraud did not involuntarily enter into an agreement. It was not forced.

This distinction is important. If you think fraud involves coercion, then by definition you are open to a range of (non-violent) actions undertaken by private actors which would involve coercion. This, of course, would require government intervention of some sort.

I will give you another example. Say you are a big consumer products company and you own like an 80 share in that space. You approach a less than powerful but relatively large retailer and say the following: We have an 80% share in your store. Your customers love our products and will go elsewhere to buy our products. We will stop selling our goods in your store unless you decide to not carry the products of our competitors." Further assume that the retailer may face financial difficulty if the big consumer products company really did decide to take its products out, so it decides to not carry the goods of the big consumer products company's competitors.

Is that coercion?

2/21/11
prinmemo:

Like I said, your definition of voluntary is rather vague. You have essentially argued that coercion occurs when one party makes another party do something by force (not voluntarily). In a fraud, no one is making anyone do anything. The literal definition of voluntary is: "done, made, brought about, undertaken, etc., of one's own accord or by free choice." The victim in a fraud did not involuntarily enter into an agreement. It was not forced.

Some libertarians will define coercion in a way that includes fraud. Put differently, fraud is one specific type of coercion.

prinmemo:

This distinction is important. If you think fraud involves coercion, then by definition you are open to a range of (non-violent) actions undertaken by private actors which would involve coercion. This, of course, would require government intervention of some sort.

Yes, the government should be involved in fraud -- probably via courts of law. If I feel you acted fraudulently, I should be able to take you to court.

prinmemo:

I will give you another example. Say you are a big consumer products company and you own like an 80 share in that space. You approach a less than powerful but relatively large retailer and say the following: We have an 80% share in your store. Your customers love our products and will go elsewhere to buy our products. We will stop selling our goods in your store unless you decide to not carry the products of our competitors." Further assume that the retailer may face financial difficulty if the big consumer products company really did decide to take its products out, so it decides to not carry the goods of the big consumer products company's competitors.

Is that coercion?

I don't think the government has a role in this situation. This is not coercion, in my opinion.

2/21/11
econ:
prinmemo:

I will give you another example. Say you are a big consumer products company and you own like an 80 share in that space. You approach a less than powerful but relatively large retailer and say the following: We have an 80% share in your store. Your customers love our products and will go elsewhere to buy our products. We will stop selling our goods in your store unless you decide to not carry the products of our competitors." Further assume that the retailer may face financial difficulty if the big consumer products company really did decide to take its products out, so it decides to not carry the goods of the big consumer products company's competitors.

Is that coercion?

I don't think the government has a role in this situation. This is not coercion, in my opinion.

This is where your argument breaks down. When is arguing from a position of extreme strength not coercive even if it is a voluntary transaction between the two parties?

2/21/11
monkeysama:
econ:
prinmemo:

I will give you another example. Say you are a big consumer products company and you own like an 80 share in that space. You approach a less than powerful but relatively large retailer and say the following: We have an 80% share in your store. Your customers love our products and will go elsewhere to buy our products. We will stop selling our goods in your store unless you decide to not carry the products of our competitors." Further assume that the retailer may face financial difficulty if the big consumer products company really did decide to take its products out, so it decides to not carry the goods of the big consumer products company's competitors.

Is that coercion?

I don't think the government has a role in this situation. This is not coercion, in my opinion.

This is where your argument breaks down. When is arguing from a position of extreme strength not coercive even if it is a voluntary transaction between the two parties?

I make a distinction between strength and coercion. You don't seem to. I think this gets confusing because we're talking about economics, so let's make it a little more personal. Suppose a Victoria Secret underwear model asks you on a date. Would you agree that she has a position of extreme strength in this dating situation? If so, would you call it coercive?

2/21/11
econ:
monkeysama:
econ:
prinmemo:

I will give you another example. Say you are a big consumer products company and you own like an 80 share in that space. You approach a less than powerful but relatively large retailer and say the following: We have an 80% share in your store. Your customers love our products and will go elsewhere to buy our products. We will stop selling our goods in your store unless you decide to not carry the products of our competitors." Further assume that the retailer may face financial difficulty if the big consumer products company really did decide to take its products out, so it decides to not carry the goods of the big consumer products company's competitors.

Is that coercion?

I don't think the government has a role in this situation. This is not coercion, in my opinion.

This is where your argument breaks down. When is arguing from a position of extreme strength not coercive even if it is a voluntary transaction between the two parties?

I make a distinction between strength and coercion. You don't seem to. I think this gets confusing because we're talking about economics, so let's make it a little more personal. Suppose a Victoria Secret underwear model asks you on a date. Would you agree that she has a position of extreme strength in this dating situation? If so, would you call it coercive?

Completely nonrelevant analogy. Whether I fuck the broad or not has no standing on me materially (ie whether I get to eat or not). Sexual pair bonding with no monetary constraints may be one of the few bastions of truly voluntary exchange yet.

Let's put it another way. Suppose I'm the Victoria Secret model and a VS CEO says that I can either date this poor unemployed monkeysama schlob or be blackballed from the industry and get thrown out on my ass and have to make rent payments by shaking my ass at the local truckstop titty bar. I would think in that situation we would have a coercive voluntary exchange.

After all she can always say no, right?

2/21/11
econ:
prinmemo:

Like I said, your definition of voluntary is rather vague. You have essentially argued that coercion occurs when one party makes another party do something by force (not voluntarily). In a fraud, no one is making anyone do anything. The literal definition of voluntary is: "done, made, brought about, undertaken, etc., of one's own accord or by free choice." The victim in a fraud did not involuntarily enter into an agreement. It was not forced.

Some libertarians will define coercion in a way that includes fraud. Put differently, fraud is one specific type of coercion.

prinmemo:

This distinction is important. If you think fraud involves coercion, then by definition you are open to a range of (non-violent) actions undertaken by private actors which would involve coercion. This, of course, would require government intervention of some sort.

Yes, the government should be involved in fraud -- probably via courts of law. If I feel you acted fraudulently, I should be able to take you to court.

prinmemo:

I will give you another example. Say you are a big consumer products company and you own like an 80 share in that space. You approach a less than powerful but relatively large retailer and say the following: We have an 80% share in your store. Your customers love our products and will go elsewhere to buy our products. We will stop selling our goods in your store unless you decide to not carry the products of our competitors." Further assume that the retailer may face financial difficulty if the big consumer products company really did decide to take its products out, so it decides to not carry the goods of the big consumer products company's competitors.

Is that coercion?

I don't think the government has a role in this situation. This is not coercion, in my opinion.

Your responses are too dismissive. Probably because your definitions aren't clear even to you. I still don't know what you consider to be coercive and why with any degree of specificity beyond "non voluntary" or "by force".

2/21/11
prinmemo:

Your responses are too dismissive. Probably because your definitions aren't clear even to you. I still don't know what you consider to be coercive and why with any degree of specificity beyond "non voluntary" or "by force".

Sorry, it's a complicated discussion and the world doesn't often fit into neat boxes that are easily definable. I guess coercion is like pornography, I know it when I see it.

2/21/11
econ:
prinmemo:

Your responses are too dismissive. Probably because your definitions aren't clear even to you. I still don't know what you consider to be coercive and why with any degree of specificity beyond "non voluntary" or "by force".

Sorry, it's a complicated discussion and the world doesn't often fit into neat boxes that are easily definable.

Nice response. How are we to judge what is coercive and what is not based on what you've argued? This is what I mean - your arguments are nice in a theoretical world, but aren't useful in any practical sense.

2/21/11
prinmemo:
econ:
prinmemo:

Your responses are too dismissive. Probably because your definitions aren't clear even to you. I still don't know what you consider to be coercive and why with any degree of specificity beyond "non voluntary" or "by force".

Sorry, it's a complicated discussion and the world doesn't often fit into neat boxes that are easily definable.

Nice response. How are we to judge what is coercive and what is not based on what you've argued? This is what I mean - your arguments are nice in a theoretical world, but aren't useful in any practical sense.

It's funny you say that because it seems you have a good idea of what I consider coercive and what I do not. You just want to take knife-edge cases, solely for the sake of argument, at least that's how it seems.

prinmemo:
econ:
prinmemo:

Your responses are too dismissive. Probably because your definitions aren't clear even to you. I still don't know what you consider to be coercive and why with any degree of specificity beyond "non voluntary" or "by force".

Sorry, it's a complicated discussion and the world doesn't often fit into neat boxes that are easily definable. I guess coercion is like pornography, I know it when I see it.

LOL. And of course you are the arbiter!! Nice!

Nope, I don't want to be the arbiter. It should be obvious by now that I think we should have less arbiters in general. We don't need nearly as many people in positions of political authority deciding things for third parties.

2/21/11
econ:
prinmemo:

Your responses are too dismissive. Probably because your definitions aren't clear even to you. I still don't know what you consider to be coercive and why with any degree of specificity beyond "non voluntary" or "by force".

Sorry, it's a complicated discussion and the world doesn't often fit into neat boxes that are easily definable. I guess coercion is like pornography, I know it when I see it.

LOL. And of course you are the arbiter!! Nice!

2/21/11

Politics and policy are real, so I assumed we were talking about real life, especially since you seem so opposed to some specific policies.

Politics is the art of the possible, but with a dose of reality. I don't get much reality from the principles you mention, though they're fun to discuss.

2/21/11
prinmemo:

Politics and policy are real, so I assumed we were talking about real life, especially since you seem so opposed to some specific policies.

Politics is the art of the possible, but with a dose of reality. I don't get much reality from the principles you mention, though they're fun to discuss.

All I'm arguing is that, in reality, we should not be so accepting of the use of force (or fraud) to allow individuals to gain at the expense of others.

2/21/11

Fraud is non-violent coercion. One party acts irrationally (by lying or engaging in fraudulent behavior), whereas the other acts rationally, but with a false set of facts. Once fraud is recognized, the two will fight it out in court. A system of laws isn't even needed; I personally believe an underlying universal ethical principal (such as Kant's categorical imperative) is all that is needed in a court of law: both sides argue rationally why they are in the right. The fraudulent party cannot do so, since he is of course acting irrationally.

This is all theory, of course, and has no pragmatic or practical application. That is why I agree with econ in theory, but in practice, redistribution might be necessary since we don't live in a society free from irrational coercion.

looking for that pick-me-up to power through an all-nighter?
2/21/11

This is all theory, of course, and has no pragmatic or practical application. That is why I agree with econ in theory, but in practice, redistribution might be necessary since we don't live in a society free from irrational coercion.

Why does it have to be impractical?

2/21/11

Yeah, I agree with Econ - fraud doesn't count as a voluntary exchange as the exchange is based on a false premise.

However, I also agree that money and politics will never be separated.

2/21/11
monkeysama:

However, I also agree that money and politics will never be separated.

Neither will racism and politics, populism and politics, etc. That's my point. Let's limit the number of political/centralized decisions and rely much more on voluntary/decentralized decisions.

2/21/11

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

2/21/11
monkeysama:

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

good post.

2/21/11
awm55:
monkeysama:

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

good post.

Thanks! On another point these are great companies to invest in. For example, Spectra Gas has a monopoly on He-3 contracts with the US DOD. He-3 is necessary for neutron detection (which is used for bomb sniffing at US borders) and imaging for lung X-rays, and it's been in short supply because the only way to get it is to wait 12 years for a pound of tritium to decay. That doesn't happen if we aren't building H-bombs and so He-3 has been getting expensive crazy fast.

Oh, and oil companies. There's a reason Exxon is number one on the F500 and it isn't their charity outreach program.

2/21/11
awm55:
monkeysama:

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

good post.

Agreed - very good post.

2/21/11
monkeysama:

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

We can't measure consumer surplus, so we'll never have an empirical estimation of what you're talking about. Also, some people argue it goes in the opposite direction. The founders of Google are incredibly wealthy, but it's very possible that they only captured a small chunk of the surplus.

Even if you're right, what are we supposed to do about it? Allow people to use the political process to forcefully split up the consumer surplus how they see fit?

And, aren't producers people too? So, should we force consumers to pay higher prices in markets where it's the consumers who capture most of the producer surplus?

2/21/11
econ:
monkeysama:

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

We can't measure consumer surplus, so we'll never have an empirical estimation of what you're talking about. Also, some people argue it goes in the opposite direction. The founders of Google are incredibly wealthy, but it's very possible that they only captured a small chunk of the surplus.

Even if you're right, what are we supposed to do about it? Allow people to use the political process to forcefully split up the consumer surplus how they see fit?

And, aren't producers people too? So, should we force consumers to pay higher prices in markets where it's the consumers who capture most of the producer surplus?

Producers are not people, they're companies.

2/21/11
prinmemo:
econ:
monkeysama:

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

We can't measure consumer surplus, so we'll never have an empirical estimation of what you're talking about. Also, some people argue it goes in the opposite direction. The founders of Google are incredibly wealthy, but it's very possible that they only captured a small chunk of the surplus.

Even if you're right, what are we supposed to do about it? Allow people to use the political process to forcefully split up the consumer surplus how they see fit?

And, aren't producers people too? So, should we force consumers to pay higher prices in markets where it's the consumers who capture most of the producer surplus?

Producers are not people, they're companies.

And those companies are owned by....? Who's the residual claimant?

2/21/11
econ:
monkeysama:

Let's call any voluntary exchange in which the bargaining power is so lopsided as to allow one side to capture all the consumer/supplier surplus - we can call it inequitable voluntary exchange. Let's call any voluntary exchange where a suitable substitutable good does not exist (for example I MUST buy gasoline) a non-substitutable voluntary exchange.

I would posit that the vast majority of all marketplace transactions (in dollar terms) are either inequitable or non-substitutable. If you want to call them "voluntary" then I guess that's your prerogative.

We can't measure consumer surplus, so we'll never have an empirical estimation of what you're talking about. Also, some people argue it goes in the opposite direction. The founders of Google are incredibly wealthy, but it's very possible that they only captured a small chunk of the surplus.

Even if you're right, what are we supposed to do about it? Allow people to use the political process to forcefully split up the consumer surplus how they see fit?

And, aren't producers people too? So, should we force consumers to pay higher prices in markets where it's the consumers who capture most of the producer surplus?

Of course you can measure consumer/producer surplus. The price doesn't stay stationary for any good, it fluctuates. Take my example of oil - the demand will fluctuate with the season (goes higher in the summer) and with the state of the economy. However, oil companies (and OPEC) will as a group if not always individually curtail supply to raise prices and maximize P*Q. The amount of monopoly power can be measured by finding out how much gas would cost if the market was perfectly competitive. You can also do other things, like comparing the balance sheets of known monopolies of non-substitutable companies compared to ones with substitutable goods (companies of equal size or perhaps market share) and find out how much employees are paid, how much dividends to investors are, et cetera.

For inequitable voluntary exchange, we go from the producer side holding much of the power (oil companies as an example) to the buyer holding much of the power (corporations in the labor market). If my thesis is correct then there is an amount of labor corporations need (depending on segment) and are extracting a surplus by using large amounts of negotiating power to set prices in an area. Such price fixing can also be measured and has been done to justify the breaking up of monopolies such as Bell Labs (back in the good old days when you had to rent your landline).

Politically my ideal should be that consumer and producer surpluses should reside with the highest number of people possible. That means that if there is a potential surplus of a 1000 dollars in a sale of ketchup in a super market one day I would rather 1000 people got a 1 dollar surplus than the CEO of the ketchup company get a 1000 dollar surplus (silly example as Ketchup is a substitutable good, but I digress).

Throwing up your hands and saying such things are unanswerable and we should give up is cowardly and intellectually dishonest. You're the reason the country is falling apart.

2/21/11
monkeysama:

Of course you can measure consumer/producer surplus. The price doesn't stay stationary for any good, it fluctuates. Take my example of oil - the demand will fluctuate with the season (goes higher in the summer) and with the state of the economy. However, oil companies (and OPEC) will as a group if not always individually curtail supply to raise prices and maximize P*Q. The amount of monopoly power can be measured by finding out how much gas would cost if the market was perfectly competitive. You can also do other things, like comparing the balance sheets of known monopolies of non-substitutable companies compared to ones with substitutable goods (companies of equal size or perhaps market share) and find out how much employees are paid, how much dividends to investors are, et cetera.

You couldn't be more wrong. Now you're the one who's being impractical. You cannot measure consumer demand, consumer surplus, the perfectly competitive level of price and quantity. Before you make statements like that, you should read the literature. Plenty of noble prize winning economists have explained why these things are non-operational in practice, such as James Bucannan, Ronald Coase, and FA Hayek. This paper explains it pretty well: http://www.peterleeson.com/Battle_for_the_Soul.pdf

2/21/11
econ:
monkeysama:

Of course you can measure consumer/producer surplus. The price doesn't stay stationary for any good, it fluctuates. Take my example of oil - the demand will fluctuate with the season (goes higher in the summer) and with the state of the economy. However, oil companies (and OPEC) will as a group if not always individually curtail supply to raise prices and maximize P*Q. The amount of monopoly power can be measured by finding out how much gas would cost if the market was perfectly competitive. You can also do other things, like comparing the balance sheets of known monopolies of non-substitutable companies compared to ones with substitutable goods (companies of equal size or perhaps market share) and find out how much employees are paid, how much dividends to investors are, et cetera.

You couldn't be more wrong. Now you're the one who's being impractical. You cannot measure consumer demand, consumer surplus, the perfectly competitive level of price and quantity. Before you make statements like that, you should read the literature. Plenty of noble prize winning economists have explained why these things are non-operational in practice, such as James Bucannan, Ronald Coase, and FA Hayek. This paper explains it pretty well: http://www.peterleeson.com/Battle_for_the_Soul.pdf

Neo-classical rightwing patter. I skimmed it and then found that surplus was not mentioned once. If you have something else to contribute that is more relevant that might be better.

2/21/11
monkeysama:

Neo-classical rightwing patter. I skimmed it and then found that surplus was not mentioned once. If you have something else to contribute that is more relevant that might be better.

Way to attempt dismissing a lot of brilliant economists. I say attempt because if you knew much about the economists who wrote it and are cited in it, you'd realize that many of them are not neo-classicists and many of them are not even right-wingers. Nice try though. Read the part on Pigouvian taxation and cost-benefit analysis, and you'll realize why we can't actually measure consumer surplus.

2/21/11
econ:
monkeysama:

Neo-classical rightwing patter. I skimmed it and then found that surplus was not mentioned once. If you have something else to contribute that is more relevant that might be better.

Way to attempt dismissing a lot of brilliant economists. I say attempt because if you knew much about the economists who wrote it and are cited in it, you'd realize that many of them are not neo-classicists and many of them are not even right-wingers. Nice try though. Read the part on Pigouvian taxation and cost-benefit analysis, and you'll realize why we can't actually measure consumer surplus.

Here you go: http://www.jstor.org/pss/1806699

Robert D. Willig of Princeton disagrees with you. Paper cited 1180 times. So 1180 other people thought he was at least worth a mention.

5 seconds on google. Learn to research.

2/21/11
monkeysama:
econ:
monkeysama:

Neo-classical rightwing patter. I skimmed it and then found that surplus was not mentioned once. If you have something else to contribute that is more relevant that might be better.

Way to attempt dismissing a lot of brilliant economists. I say attempt because if you knew much about the economists who wrote it and are cited in it, you'd realize that many of them are not neo-classicists and many of them are not even right-wingers. Nice try though. Read the part on Pigouvian taxation and cost-benefit analysis, and you'll realize why we can't actually measure consumer surplus.

Here you go: http://www.jstor.org/pss/1806699

Robert D. Willig of Princeton disagrees with you. Paper cited 1180 times. So 1180 other people thought he was at least worth a mention.

5 seconds on google. Learn to research.

Am I mis-reading this or does the first page say you can actually estimate consumer's surplus?

2/21/11
prinmemo:
monkeysama:
econ:
monkeysama:

Neo-classical rightwing patter. I skimmed it and then found that surplus was not mentioned once. If you have something else to contribute that is more relevant that might be better.

Way to attempt dismissing a lot of brilliant economists. I say attempt because if you knew much about the economists who wrote it and are cited in it, you'd realize that many of them are not neo-classicists and many of them are not even right-wingers. Nice try though. Read the part on Pigouvian taxation and cost-benefit analysis, and you'll realize why we can't actually measure consumer surplus.

Here you go: http://www.jstor.org/pss/1806699

Robert D. Willig of Princeton disagrees with you. Paper cited 1180 times. So 1180 other people thought he was at least worth a mention.

5 seconds on google. Learn to research.

Am I mis-reading this or does the first page say you can actually estimate consumer's surplus?

Yes the first page.

Honestly all consumer surplus is is the amount that someone would be willing to pay above the price of the product. If you wanted to, you could have some behaviorists go out and sell a product at a store and just mark up the price by 10 cents every day and find out how inelastic consumers were to the price. If between 1 dollar and 10 dollars everyone buys it and at 11 dollars there's a huge drop off then if market price is 5 dollars, gee maybe surplus is 5 dollars.

Saying these things can't be measured is just a cop out for those afraid of the results.

2/21/11
monkeysama:

Honestly all consumer surplus is is the amount that someone would be willing to pay above the price of the product. If you wanted to, you could have some behaviorists go out and sell a product at a store and just mark up the price by 10 cents every day and find out how inelastic consumers were to the price. If between 1 dollar and 10 dollars everyone buys it and at 11 dollars there's a huge drop off then if market price is 5 dollars, gee maybe surplus is 5 dollars.

Saying these things can't be measured is just a cop out for those afraid of the results.

Can you create a new thread for this, it really deserves it's own? Basically, demand functions cannot be measured, in practice. Even if you have various data points like you're describing, there'd be infinite functional forms that would include them.

2/21/11
monkeysama:
econ:
monkeysama:

Neo-classical rightwing patter. I skimmed it and then found that surplus was not mentioned once. If you have something else to contribute that is more relevant that might be better.

Way to attempt dismissing a lot of brilliant economists. I say attempt because if you knew much about the economists who wrote it and are cited in it, you'd realize that many of them are not neo-classicists and many of them are not even right-wingers. Nice try though. Read the part on Pigouvian taxation and cost-benefit analysis, and you'll realize why we can't actually measure consumer surplus.

Here you go: http://www.jstor.org/pss/1806699

Robert D. Willig of Princeton disagrees with you. Paper cited 1180 times. So 1180 other people thought he was at least worth a mention.

5 seconds on google. Learn to research.

I know that a lot of economists try to do it. That's why you should read the paper I gave you because it'll show you why they're mistaken. Often you need untestable assumptions and data that is not available. We should move this specific part of the discussion to the econ group. I have much more to say about it, but don't want to discuss it here.

2/21/11
monkeysama:

Politically my ideal should be that consumer and producer surpluses should reside with the highest number of people possible. That means that if there is a potential surplus of a 1000 dollars in a sale of ketchup in a super market one day I would rather 1000 people got a 1 dollar surplus than the CEO of the ketchup company get a 1000 dollar surplus (silly example as Ketchup is a substitutable good, but I digress).

You think you might f*ck up a lot of markets? You don't think that these incentives are important for production?

2/21/11
econ:
monkeysama:

Politically my ideal should be that consumer and producer surpluses should reside with the highest number of people possible. That means that if there is a potential surplus of a 1000 dollars in a sale of ketchup in a super market one day I would rather 1000 people got a 1 dollar surplus than the CEO of the ketchup company get a 1000 dollar surplus (silly example as Ketchup is a substitutable good, but I digress).

You think you might f*ck up a lot of markets? You don't think that these incentives are important for production?

Also, suppose you could totally measure demand and surplus. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

2/21/11
econ:
econ:
monkeysama:

Politically my ideal should be that consumer and producer surpluses should reside with the highest number of people possible. That means that if there is a potential surplus of a 1000 dollars in a sale of ketchup in a super market one day I would rather 1000 people got a 1 dollar surplus than the CEO of the ketchup company get a 1000 dollar surplus (silly example as Ketchup is a substitutable good, but I digress).

You think you might f*ck up a lot of markets? You don't think that these incentives are important for production?

Also, suppose you could totally measure demand and surplus. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

Also, suppose you could totally measure the consumer price index. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

See how silly you look?

2/21/11
monkeysama:
econ:
econ:
monkeysama:

Politically my ideal should be that consumer and producer surpluses should reside with the highest number of people possible. That means that if there is a potential surplus of a 1000 dollars in a sale of ketchup in a super market one day I would rather 1000 people got a 1 dollar surplus than the CEO of the ketchup company get a 1000 dollar surplus (silly example as Ketchup is a substitutable good, but I digress).

You think you might f*ck up a lot of markets? You don't think that these incentives are important for production?

Also, suppose you could totally measure demand and surplus. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

Also, suppose you could totally measure the consumer price index. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

See how silly you look?

LOL! What's silly is a guy who says I'm being too theoretical and not applied enough, and then starts talking about measuring consumer surplus and actually making policies based on those measurements. By the way, you're right that that argument applies to a lot of things outside of just consumer surplus. That's exactly why economics is not a science. We can't measure fundamental things accurately.

2/21/11
econ:
monkeysama:
econ:
econ:
monkeysama:

Politically my ideal should be that consumer and producer surpluses should reside with the highest number of people possible. That means that if there is a potential surplus of a 1000 dollars in a sale of ketchup in a super market one day I would rather 1000 people got a 1 dollar surplus than the CEO of the ketchup company get a 1000 dollar surplus (silly example as Ketchup is a substitutable good, but I digress).

You think you might f*ck up a lot of markets? You don't think that these incentives are important for production?

Also, suppose you could totally measure demand and surplus. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

Also, suppose you could totally measure the consumer price index. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

See how silly you look?

LOL! What's silly is a guy who says I'm being too theoretical and not applied enough, and then starts talking about measuring consumer surplus and actually making policies based on those measurements. By the way, you're right that that argument applies to a lot of things outside of just consumer surplus. That's exactly why economics is not a science. We can't measure fundamental things accurately.

Be reasonable. We're not string theory physicists.

2/22/11
monkeysama:
econ:
monkeysama:
econ:
econ:
monkeysama:

Politically my ideal should be that consumer and producer surpluses should reside with the highest number of people possible. That means that if there is a potential surplus of a 1000 dollars in a sale of ketchup in a super market one day I would rather 1000 people got a 1 dollar surplus than the CEO of the ketchup company get a 1000 dollar surplus (silly example as Ketchup is a substitutable good, but I digress).

You think you might f*ck up a lot of markets? You don't think that these incentives are important for production?

Also, suppose you could totally measure demand and surplus. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

Also, suppose you could totally measure the consumer price index. Should we think that those measurements are constant over time? Or do they probably change? Policies based on these measurements would be inherently backward looking. They might even do more harm then good, especially if you take Hayek seriously and realize that prices are important informational signals.

See how silly you look?

LOL! What's silly is a guy who says I'm being too theoretical and not applied enough, and then starts talking about measuring consumer surplus and actually making policies based on those measurements. By the way, you're right that that argument applies to a lot of things outside of just consumer surplus. That's exactly why economics is not a science. We can't measure fundamental things accurately.

Be reasonable. We're not string theory physicists.

I don't even know what this is supposed to mean, in this context. Also, just so I'm clear, are you arguing that we can in fact measure consumer surplus and that many economists believe that? It's not nearly enough to show how many times that paper has been cited, especially considering that a huge number of those could have been criticisms. I spent last year taking PhD courses in economics and you wouldn't believe how many things look precise, rigorous, and scientific, but stand on pretty weak grounds. That's actually one reason I like Hayek so much, because he often writes about economic methodology and the "scientism," but I digress...

Just out of curiosity, did you even read the paper you posted, or just the first (free) page? On the first page he says that the errors of estimating consumer surplus will be overshadowed by the errors of estimating demand. My whole point was that economists struggle to estimate demand in practice, so anything else that relies on those estimations are shaky. Also, notice that his paper is from 1976 and it seems his approach hasn't really caught on, since most economists do welfare economics without even attempting to estimate consumer surplus.

Suppose, solely for the sake of argument, that we can measure consumer demand accurately. And suppose, also solely for the sake of argument, that these values are constant over time. (Two strong assumptions, by the way.) In practice, don't you think changing prices or imposing taxes to try and distribute consumer surplus how you see fit will mess up a lot of markets and production? Isn't it probably much better to leave it alone, instead of attempting a level of economic social engineering we haven't seen since the socialist calculation debate?

2/21/11

.

2/21/11

Anyone else skim that whole thing looking for the OP to "share [his] opinion"? Probably too busy editing his paper..

2/21/11

I think I know how you stand on the obvious cases. The subtle ones I am not sure of, if I can only go by strict interpretations of your arguments. Governing involves making choices in gray areas and "knife-edge cases". In your world governing is easy.

2/21/11
prinmemo:

I think I know how you stand on the obvious cases. The subtle ones I am not sure of, if I can only go by strict interpretations of your arguments. Governing involves making choices in gray areas and "knife-edge cases". In your world governing is easy.

Governing is not easy. In my opinion, we don't even need to waste time discussing the knife-edge cases yet, because there's so much low hanging fruit to go after with the obvious cases.

2/21/11
prinmemo:

I think I know how you stand on the obvious cases. The subtle ones I am not sure of, if I can only go by strict interpretations of your arguments. Governing involves making choices in gray areas and "knife-edge cases". In your world governing is easy.

A very unfair argument to make. It is assumed that there are outliers to everything. You are asking econ to account for every possible outlier that could possibly come up and how those might be defined. These semantics games detract from the heart of the issue, and if everybody were to debate like this then we would never be saying anything ever. We can do this all day and pick apart words on both sides, but, generally, in 99% of cases I think we can all agree on what the definitions are (as you have just admitted.)

In the case of outliers you cross those bridges when you come to them, or, rather, settle them one by one once you've determined a principle to go by in the vast majority of cases. You cannot use the idea of outliers to disqualify the reasoning used by econ in what was an excellent example of logical argument. Let's agree on a larger principle, and then we can deal with any extreme cases that jump out at you.

2/21/11
rebelcross:
prinmemo:

I think I know how you stand on the obvious cases. The subtle ones I am not sure of, if I can only go by strict interpretations of your arguments. Governing involves making choices in gray areas and "knife-edge cases". In your world governing is easy.

A very unfair argument to make. It is assumed that there are outliers to everything. You are asking econ to account for every possible outlier that could possibly come up and how those might be defined. These semantics games detract from the heart of the issue, and if everybody were to debate like this then we would never be saying anything ever. We can do this all day and pick apart words on both sides, but, generally, in 99% of cases I think we can all agree on what the definitions are (as you have just admitted.)

In the case of outliers you cross those bridges when you come to them, or, rather, settle them one by one once you've determined a principle to go by in the vast majority of cases. You cannot use the idea of outliers to disqualify the reasoning used by econ in what was an excellent example of logical argument. Let's agree on a larger principle, and then we can deal with any extreme cases that jump out at you.

Disagree. The hard part is deciding what to do in the gray areas. 95% of contentious issues lie in this gray area. They are not outliers. Otherwise why is there any disagreement.

2/21/11
prinmemo:
rebelcross:
prinmemo:

I think I know how you stand on the obvious cases. The subtle ones I am not sure of, if I can only go by strict interpretations of your arguments. Governing involves making choices in gray areas and "knife-edge cases". In your world governing is easy.

A very unfair argument to make. It is assumed that there are outliers to everything. You are asking econ to account for every possible outlier that could possibly come up and how those might be defined. These semantics games detract from the heart of the issue, and if everybody were to debate like this then we would never be saying anything ever. We can do this all day and pick apart words on both sides, but, generally, in 99% of cases I think we can all agree on what the definitions are (as you have just admitted.)

In the case of outliers you cross those bridges when you come to them, or, rather, settle them one by one once you've determined a principle to go by in the vast majority of cases. You cannot use the idea of outliers to disqualify the reasoning used by econ in what was an excellent example of logical argument. Let's agree on a larger principle, and then we can deal with any extreme cases that jump out at you.

Disagree. The hard part is deciding what to do in the gray areas. 95% of contentious issues lie in this gray area. They are not outliers. Otherwise why is there any disagreement.

OK, so you are suggesting you agree to what Econ has said for the majority 99% of cases?

2/21/11

Oh and it also has the word "surplus" in the title. Which was the topic under discussion and which your paper failed to have at all in its entirety.

I mean really.

2/21/11
monkeysama:

Oh and it also has the word "surplus" in the title. Which was the topic under discussion and which your paper failed to have at all in its entirety.

I mean really.

The paper I gave you is more general, it shows you why surplus and many other things can't be measured. Surplus is just one subset of their argument.

2/21/11

Agreed. lol

2/21/11

Thanks rebelcross. I'm exhausted from getting tag-teamed lol.

2/21/11

Does it really matter? Like your bickering on this message thread will do anything about it. The problem with this is while yes the gap between the haves and have nots is growing. But people state this as if it is the rich get richer while the poor get poorer. This is not entirely true, just because the rich get richer at a faster pace than the poor doesnt mean the poor are infact getting poorer. There are a whole host of problems that associate to this, however changing any one factor doesnt change the outcome. Say for example if ever person in America were to get a college degree, how would that change the outcome? It can't and it won't the problem of scarcity remains. There is only so much wage power to go around, with out the creation of new wage earning jobs that increase the overall wage pool it doesnt matter if the entire american population holds phds in varing subjects.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

2/21/11

Or we can just play semantics games all day and never really say anything ever.

2/21/11

What should we do to decrease inequality? Nothing. It will likely correct itself.

We are living in the final decade of The Knowledge Economy. The wage premium that educated professionals currently enjoy is about to disappear permanently. With IBM's Watson, the handwriting should be clear to everyone now.

Take the legal profession. First, it will be clerical staff to go. Natural Language Programming will get rid of those jobs quite easily--2016, at the latest. This will keep overheads low. A Fed Chairman may report how AI is reducing inflationary pressures in the labor market, ala Greenspan on Mexicans. The technology will continue to improve. By 2018 or so, legal research and strategy-formulation will be mostly automated, gutting the "billable hours" model entirely. The herd will be thinned.

The same will happen with finance and virtually any other profession that works with data. Consultants. Actuaries. Accountants. They're destined for the chopping block in the 2020's. The computer progresses exponentially. People don't.

American society--along with the rest of the world--will be squeezed into a highly competitive,fabulously wealthy middle class, with little variance in income.

We're all destined to be hedonists with advanced degrees from online universities, who deliver pizzas in cars that drive themselves.

If every technological trend didn't point to that, it would be funny.

2/21/11
Short Bus All-Star:

What should we do to decrease inequality? Nothing. It will likely correct itself.

We are living in the final decade of The Knowledge Economy. The wage premium that educated professionals currently enjoy is about to disappear permanently. With IBM's Watson, the handwriting should be clear to everyone now.

Take the legal profession. First, it will be clerical staff to go. Natural Language Programming will get rid of those jobs quite easily--2016, at the latest. This will keep overheads low. A Fed Chairman may report how AI is reducing inflationary pressures in the labor market, ala Greenspan on Mexicans. The technology will continue to improve. By 2018 or so, legal research and strategy-formulation will be mostly automated, gutting the "billable hours" model entirely. The herd will be thinned.

The same will happen with finance and virtually any other profession that works with data. Consultants. Actuaries. Accountants. They're destined for the chopping block in the 2020's. The computer progresses exponentially. People don't.

American society--along with the rest of the world--will be squeezed into a highly competitive,fabulously wealthy middle class, with little variance in income.

We're all destined to be hedonists with advanced degrees from online universities, who deliver pizzas in cars that drive themselves.

If every technological trend didn't point to that, it would be funny.

While I agree with what you saying I disagree with the time frame.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

2/21/11
Short Bus All-Star:

What should we do to decrease inequality? Nothing. It will likely correct itself.

We are living in the final decade of The Knowledge Economy. The wage premium that educated professionals currently enjoy is about to disappear permanently. With IBM's Watson, the handwriting should be clear to everyone now.

Take the legal profession. First, it will be clerical staff to go. Natural Language Programming will get rid of those jobs quite easily--2016, at the latest. This will keep overheads low. A Fed Chairman may report how AI is reducing inflationary pressures in the labor market, ala Greenspan on Mexicans. The technology will continue to improve. By 2018 or so, legal research and strategy-formulation will be mostly automated, gutting the "billable hours" model entirely. The herd will be thinned.

The same will happen with finance and virtually any other profession that works with data. Consultants. Actuaries. Accountants. They're destined for the chopping block in the 2020's. The computer progresses exponentially. People don't.

American society--along with the rest of the world--will be squeezed into a highly competitive,fabulously wealthy middle class, with little variance in income.

We're all destined to be hedonists with advanced degrees from online universities, who deliver pizzas in cars that drive themselves.

If every technological trend didn't point to that, it would be funny.

This is America. People do whatever the fuck they feel like doing, you got a problem with that? Because they have a right to. And because they have guns and no one can fucking stop them. As a result, this country has one of the worst economies in the world. When it gets down to it - talking trade balances here - once we've brain-drained all our technologies to other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and sell them here - once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel - once the Invisible Hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider prosperity y'know what? There's only four things we do better than anyone else

music
movies
microcode (software)
high-speed pizza delivery

2/21/11

lol

2/21/11

Haha ANT you're a stitch.

First, the debate does NOT end at what point wealthy people will leave. I could give a flying fig if a few billionaires went to live in Singapore cause of no taxes. It's cost benefit. If we could guarantee an expansion of the middle class by 20 percent and a rise in median income by 10 percent I would willingly shave off 0.25 percent of long term GDP growth per annum.

Second, you do realize that the quote "let them eat cake!" was quickly followed by a one way trip to a guillotine?

You're a walking caricature of yourself my rabid right winger.

2/21/11
monkeysama:

Haha ANT you're a stitch.

First, the debate does NOT end at what point wealthy people will leave. I could give a flying fig if a few billionaires went to live in Singapore cause of no taxes. It's cost benefit. If we could guarantee an expansion of the middle class by 20 percent and a rise in median income by 10 percent I would willingly shave off 0.25 percent of long term GDP growth per annum.

Second, you do realize that the quote "let them eat cake!" was quickly followed by a one way trip to a guillotine?

You're a walking caricature of yourself my rabid right winger.

Good luck getting through to him man, you are going to need it.

2/21/11
awm55:
monkeysama:

Haha ANT you're a stitch.

First, the debate does NOT end at what point wealthy people will leave. I could give a flying fig if a few billionaires went to live in Singapore cause of no taxes. It's cost benefit. If we could guarantee an expansion of the middle class by 20 percent and a rise in median income by 10 percent I would willingly shave off 0.25 percent of long term GDP growth per annum.

Second, you do realize that the quote "let them eat cake!" was quickly followed by a one way trip to a guillotine?

You're a walking caricature of yourself my rabid right winger.

Good luck getting through to him man, you are going to need it.

Pissing up brick walls is a hobby of mine.

2/21/11

Go see my guns post on how I think we could help the black community. Many of my statements are in line with what you are saying.

My ultimate point is this. The government pisses away so much money, that if it became even a little more efficient, we could cut taxes and help more people.

I have no problem paying taxes. But it is still my money being taken. Is it too much to expect that money to be spent efficiently and effectively?

Thats my issue. Increasing taxes without addressing the monumental amount of government waste is like throwing money away. Considering that I and everyone else works hard for this money, until the government can get its act together, I am against giving it more money.

Its like a kid on drugs. They keep asking for money, but you know they will only buy crack. You want to help, but not until they get better.

2/21/11

ANT is not really a conservative or a libertarian. He wants to cut taxes to the bone and let the high rolling financiers keep everything they earn, but at the same time he supports bailing out the banks when shit hits the fan. In other words, he really supports privatizing profit and socializing losses. What a nice life. Heads the rich win win, tails we lose.

2/21/11
prinmemo:

ANT is not really a conservative or a libertarian. He wants to cut taxes to the bone and let the high rolling financiers keep everything they earn, but at the same time he supports bailing out the banks when shit hits the fan. In other words, he really supports privatizing profit and socializing losses. What a nice life. Heads the rich win win, tails we lose.

This is what I call a neo-neo-classist. Sort of the new compassionate conservatism. I've said it before and I'll say it again, voluntary exchange or no voluntary exchange the only rule is the oldest rule: money speaks and the people are forced to listen.

2/21/11

AWM, you need to read more dude. We are talking about a simple money in the pocket situation. Cig tax hits the poor the most. If you look at a socio economic breakdown of habits you will see more poor smoking than well off. Same goes for the lottery. If you want to increase the money a lower income person has to spend, reduce taxes on things they spend a lot on.

And here you come in, trying to regulate what free people do. Your the right wing nut job. Trying to control people all the time.

Prin - I felt like being a dick, oh well. Feel free to no longer associate with me either.

My opinions on population are all over this site. With close to 7 Billion people, I think a ROI is worth it. Sorry to break it to you, but we are not all special snow flakes, myself included. We devour everything around us and ultimately will destroy what gives us life.

By pure definition, human beings are parasites.

2/21/11
ANT:

By pure definition, human beings are parasites.

I think you're confusing money with the end rather than a means to an end, which is always the betterment of humanity.

2/21/11
ANT:

AWM, you need to read more dude. We are talking about a simple money in the pocket situation. Cig tax hits the poor the most. If you look at a socio economic breakdown of habits you will see more poor smoking than well off. Same goes for the lottery. If you want to increase the money a lower income person has to spend, reduce taxes on things they spend a lot on.

And here you come in, trying to regulate what free people do. Your the right wing nut job. Trying to control people all the time.

Prin - I felt like being a dick, oh well. Feel free to no longer associate with me either.

My opinions on population are all over this site. With close to 7 Billion people, I think a ROI is worth it. Sorry to break it to you, but we are not all special snow flakes, myself included. We devour everything around us and ultimately will destroy what gives us life.

By pure definition, human beings are parasites.

I get what you are trying to say. More money in their pocket, I get it. Its not complicated.

But now you are not answering my questions. Cigarettes are taxed because of their negative health consequences. Making cigarettes cheaper allows more poor people to smoke, thus putting additional strain onto medicaid (funded by your tax dollars).

2/21/11

Here's a neat article by the economist:

Government of the rich, by the rich, for the rich
http://www.economist.com/blogs/freeexchange/2011/0...

2/22/11

Monkeysama,

I think I posted the same article earlier in this thread. Then again, this thread is pretty long and its pretty easy for a post to get lost in the mess.

You also bring up a good point about a world with a declining/neutral population growth rate. Assuming a steady state in capital growth rate, the only growth in world GDP would come from technological growth. (You mentioned these above). I think this type of environment would allow for the most efficient allocation of capital, since money would flow to the new technological advancements which will add the most value (as judged by the amount people would be willing to pay for them), instead of chasing outsized returns in inefficient markets.

ANT,

Only problem with your logic on moving is "Where are you going to go?" US gov will still charge you tax money wherever you go unless you revoke your citizenship. At the end of the day, is that something you'd really be willing to do?

looking for that pick-me-up to power through an all-nighter?
2/22/11

At 40% you'll be a right wing nut because you don't want to give up 50%, and there's so much good that government can do, and society is in shambles, etc.
At 50% you'll be a right wing nut because you don't want to give up 60%, and there's so much good that government can do, and society is in shambles, etc.
At 60%...and to infinitum

2/22/11
rebelcross:

At 40% you'll be a right wing nut because you don't want to give up 50%, and there's so much good that government can do, and society is in shambles, etc.
At 50% you'll be a right wing nut because you don't want to give up 60%, and there's so much good that government can do, and society is in shambles, etc.
At 60%...and to infinitum

This is just historically untrue. Taxes now are at some of their lowest rates in a century. No country has ever had a tax system that progresses steadily upward over any extended length of time, it is political suicide.

This is what I am talking about, this completely unfounded fear that the socialists are coming to get you.

2/22/11

I think Dr. Thomas Sowell makes some good points regarding income inequality and mobility:
http://www.jewishworldreview.com/cols/sowell020700...

http://www.nationalreview.com/articles/222950/top-...

An absolute majority of the people who were in the bottom 20 percent in 1975 have also been in the top 20 percent at some time since then. Most Americans don't stay put in any income bracket. At different times, they are both "rich" and "poor" -- as these terms are recklessly thrown around in the media. Most of those who are called "the rich" are just middle-class people whose taxes the politicians avoid cutting by giving them that name.

There are of course some people who remain permanently in the bottom 20 percent. But such people constitute less than one percent of the American population, according to data published by the Federal Reserve Bank of Dallas in its 1995 annual report. Perhaps the intelligentsia and the politicians have been too busy waxing indignant to be bothered by anything so mundane as facts.

Households do not contain the same numbers of people, even at a given time.

The bottom 20 percent of households contains 39 million people, while the top 20 percent contains 64 million. Comparing households is comparing apples and oranges.

If you are serious about considering the well-being of flesh and blood human beings, then you can talk about their real income per capita. But alarmists avoid that like the plague, because it would expose their little game for the fraud that it is.

Real income per capita has risen 50 percent over the same span of time when household income has remained virtually unchanged. How is this possible?

Because households are getting smaller. The very fact that there are higher incomes enables more people to afford to go out and set up their own independent households.

2/22/11

http://www.coordinationproblem.org/2010/06/some-ne...

--Of those taxpayer households in the lowest quintile of income in 1999, 57.5% had moved up at least one quintile by 2007 and over 30% jumped two quintiles or more.
--Of those taxpayer households in the highest quintile in 1999, 37.7% fell at least one quintile, with 14.4% falling two quintiles or more.
--Of those in the top 1% in 1999, only 44.6% were still there in 2007.

Despite the increase in "static inequality" shown by the increased percentage of income earned by the top earners over the last decade, there appears to be no effect on income mobility.

Carroll uses a nice analogy from Schumpeter that I'd never heard before: the distribution of income is like a hotel with some really fancy rooms on the top floors and some very basic ones on the bottom. All the rooms are always full, but who occupies which rooms changes from year to year.

If one wants to stretch the analogy a bit more, it's also the case that each year brings a new upgrade to every room. What constitutes a "basic" room gets slightly more luxurious each year as standards of living rise, and the same is true on other floors. It might be the case that the upgrades to the top floor rooms are proportionally greater than those to the basic and middle floor rooms, but given that the occupants of the rooms switch around from year to year, those greater improvements at the top are still consistent with improvements in the absolute standard of living for many.

And to take the analogy even further: if we account for immigration and other new entrants to the labor force, it's as if the hotel keeps adding rooms/floors on each year at the lower/basic level, enabling everyone else to potentially keep moving up (assuming that some occupants die or leave the country!).

The underlying market processes appear to be doing well at enabling a majority of those who start out poor to move up the income ladder within a decade or less. And when one combines Carroll's research with the "Good Old Days are Now" work on the dramatic declines in the real cost of most goods, the increased ability of those in the lower quintile to have them in their homes and the ongoing increase in quality of most goods, it is clear that despite a government that is way too big, the standard of living and the opportunities for poor Americans continue to improve.

2/22/11

Solution: 100% tax on inheritance over 20m. Extra assets are sold by dutch auction. Proceeds fund the government. Flat tax for anything else. It will of course not going to happen.

Valor is of no service, chance rules all, and the bravest often fall by the hands of cowards. - Tacitus

Dr. Nick Riviera: Hey, don't worry. You don't have to make up stories here. Save that for court!

2/22/11
El_Mono:

Solution: 100% tax on inheritance over 20m. Extra assets are sold by dutch auction. Proceeds fund the government. Flat tax for anything else. It will of course not going to happen.

Dr. Thomas Sowell likes to say, "The essence of economics, is asking 'And then what?' "

When we apply Dr. Sowell's question to your policy, we have reason to believe that rich people will just spend frivolously before dying or spend a bunch of money on their kids before they die. Do you really think Bill Gates would just throw up his hands and say, "I guess I can only leave my kids $20M."? My guess is, he would go out there right now, buy them all a bunch of sick mansion, give them billions to put into hedge funds, etc.

2/22/11
econ:
El_Mono:

Solution: 100% tax on inheritance over 20m. Extra assets are sold by dutch auction. Proceeds fund the government. Flat tax for anything else. It will of course not going to happen.

Dr. Thomas Sowell likes to say, "The essence of economics, is asking 'And then what?' "

When we apply Dr. Sowell's question to your policy, we have reason to believe that rich people will just spend frivolously before dying or spend a bunch of money on their kids before they die. Do you really think Bill Gates would just throw up his hands and say, "I guess I can only leave my kids $20M."? My guess is, he would go out there right now, buy them all a bunch of sick mansion, give them billions to put into hedge funds, etc.

That is exactly the idea, consumption, investment in human capital, in their children potential environment, etc. It would be optimal if it could be enforced. It is less a matter of how to enforce it and more whether there would be any will for enforcement. Anywhay, this just wont happen.

Valor is of no service, chance rules all, and the bravest often fall by the hands of cowards. - Tacitus

Dr. Nick Riviera: Hey, don't worry. You don't have to make up stories here. Save that for court!

2/22/11

100% tax on inheritance is a good way to get yourself killed around here.

If I had asked people what they wanted, they would have said faster horses - Henry Ford

2/22/11
happypantsmcgee:

100% tax on inheritance is a good way to get yourself killed around here.

And not only here XD. The thing is 100% over some amount deemed sufficient to do something but not low enough as to do nothing (following Mr. B's idea). Then very low or no taxes on income. It is the perfect mix of encouraging effort today and not disencouraging it tomorrow. Also it would improve the market's capability of allocating capital. I of course dont expect to happen, but still would solve the "dont tax me!", the "how we fund this?" discourses and at the same time increase mobility while reducing sub-optimal inequality.

Valor is of no service, chance rules all, and the bravest often fall by the hands of cowards. - Tacitus

Dr. Nick Riviera: Hey, don't worry. You don't have to make up stories here. Save that for court!

2/22/11

about marginal supply + opt cost

2/22/11

How about people stop saying raise taxes and start talking about making government spending much more efficient i would have no problem paying 50% tax if I could actually see what my money was being spent on. Oh wait.. they wouldn't need 50% tax if money was spent efficiently

But what do I know...

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

2/22/11

There is no question the government could be more efficient. So could just about every corporation in the world.

There are certain counties in the U.S. with very high tax rates where the government is efficient and the quality of life is high. Howard County Maryland comes to mind.

I will admit that I have a preference for lower taxes all things being equal, but I don't think it's the end of the world if the highest marginal tax rate goes from 36 to 38 percent.

2/22/11
prinmemo:

There is no question the government could be more efficient. So could just about every corporation in the world.

There are certain counties in the U.S. with very high tax rates where the government is efficient and the quality of life is high. Howard County Maryland comes to mind.

I will admit that I have a preference for lower taxes all things being equal, but I don't think it's the end of the world if the highest marginal tax rate goes from 36 to 38 percent.

Wait so the quality of life is good in Howard County, Maryland because of the government there?

2/22/11
rebelcross:
prinmemo:

There is no question the government could be more efficient. So could just about every corporation in the world.

There are certain counties in the U.S. with very high tax rates where the government is efficient and the quality of life is high. Howard County Maryland comes to mind.

I will admit that I have a preference for lower taxes all things being equal, but I don't think it's the end of the world if the highest marginal tax rate goes from 36 to 38 percent.

Wait so the quality of life is good in Howard County, Maryland because of the government there?

I see, so if taxes are high and the quality of life is high, it has nothing to do with government, but if taxes are low and the quality of life is high, it's because government is limited?

2/22/11
prinmemo:
rebelcross:
prinmemo:

There is no question the government could be more efficient. So could just about every corporation in the world.

There are certain counties in the U.S. with very high tax rates where the government is efficient and the quality of life is high. Howard County Maryland comes to mind.

I will admit that I have a preference for lower taxes all things being equal, but I don't think it's the end of the world if the highest marginal tax rate goes from 36 to 38 percent.

Wait so the quality of life is good in Howard County, Maryland because of the government there?

I see, so if taxes are high and the quality of life is high, it has nothing to do with government, but if taxes are low and the quality of life is high, it's because government is limited?

No, if taxes are high and the quality of life is high, it's usually because of certain socio-economic factors such as maybe in layman's terms...a whole lot of rich people with stable families live there.

If taxes are low and the quality of life is high, it's usually because of certain socio-economic factors such as...a whole lot of rich people with stable families live there.

If taxes are high and the quality of life is low, it's usually because of certain socio-economic factors....(see any inner city in America)

If taxes are low and the quality of life is low...etc. (see something along the lines of Lawrence County, TN)

2/22/11
rebelcross:
prinmemo:
rebelcross:
prinmemo:

There is no question the government could be more efficient. So could just about every corporation in the world.

There are certain counties in the U.S. with very high tax rates where the government is efficient and the quality of life is high. Howard County Maryland comes to mind.

I will admit that I have a preference for lower taxes all things being equal, but I don't think it's the end of the world if the highest marginal tax rate goes from 36 to 38 percent.

Wait so the quality of life is good in Howard County, Maryland because of the government there?

I see, so if taxes are high and the quality of life is high, it has nothing to do with government, but if taxes are low and the quality of life is high, it's because government is limited?

No, if taxes are high and the quality of life is high, it's usually because of certain socio-economic factors such as maybe in layman's terms...a whole lot of rich people with stable families live there.

If taxes are low and the quality of life is high, it's usually because of certain socio-economic factors such as...a whole lot of rich people with stable families live there.

If taxes are high and the quality of life is low, it's usually because of certain socio-economic factors....(see any inner city in America)

If taxes are low and the quality of life is low...etc. (see something along the lines of Lawrence County, TN)

I agree with you. I just wanted clarification.

2/22/11
prinmemo:
rebelcross:
prinmemo:

There is no question the government could be more efficient. So could just about every corporation in the world.

There are certain counties in the U.S. with very high tax rates where the government is efficient and the quality of life is high. Howard County Maryland comes to mind.

I will admit that I have a preference for lower taxes all things being equal, but I don't think it's the end of the world if the highest marginal tax rate goes from 36 to 38 percent.

Wait so the quality of life is good in Howard County, Maryland because of the government there?

I see, so if taxes are high and the quality of life is high, it has nothing to do with government, but if taxes are low and the quality of life is high, it's because government is limited?

Haha!

2/22/11

My ideal tax system is the following:

Every year the federal government sets an amount of money that is the absolute budget for that year. If they go over everyone is fired (ie kicked out of office) with a runoff election held in a month and where no incumbent candidate can run.

Now the taxes work the following way. You take the amount of money needed to run the government for that year and you tax everyone according to how what percentile wealth they have according to the Gini coefficient. So if you're in the top 10 percent of wealth holders in the country you get charged 10 percent of the needed tax to keep the country running. That way every person will pay a marginal tax rate that accurately reflects how much they are able to.

So there you go. No budget deficits and the congress has a dual mandate to lower everyones taxes without causing an overrun in the budget so the budget will accurately reflect how much government costs. It's sort of like a free market solution to government! And th only discretion that Congress will have will be where the money is spent - that's what people will campaign on.

Of course my Utopian dreamworld will never happen because it would charge billionaires their fair share and it would prevent old people from billing me for their retirement. It would mean cushy defense contracts would have to actually be paid for in current dollars. And hell, it might also mean we stop fucking over latinos! We certainly can't have any of that nonsense.

2/22/11

^ ^ ^ ^ the reason I dont agree with this view is that it doesnt reward effort, nor gives the best a tangent benefit, it means the market will not allocate resouces efficiently.

Valor is of no service, chance rules all, and the bravest often fall by the hands of cowards. - Tacitus

Dr. Nick Riviera: Hey, don't worry. You don't have to make up stories here. Save that for court!

2/22/11

Hey monkeysama, I might be missing something, but couldn't you just have a flat tax if you want everyone to pay a proportional share like you mentioned? Another nice thing about flat taxes is that they're not as costly to administer and make it harder to cater to special interest groups by using the tax system.

2/22/11
econ:

Hey monkeysama, I might be missing something, but couldn't you just have a flat tax if you want everyone to pay a proportional share like you mentioned? Another nice thing about flat taxes is that they're not as costly to administer and make it harder to cater to special interest groups by using the tax system.

No. Absolutely not. Flat taxes are terribly regressive. If I'm making 20k a year most of my money will be spent on food, clothing, and shelter and all will be taxed with a flat tax. If I make 5 mil a year I can live off 1 mil quite comfortably and then just sock the other 4 mil, tax free mind you, in emerging asia for a 10 percent annualized return.

Just another lie the rich tell the poor to get them to campaign against their own interests.

2/22/11
monkeysama:

No. Absolutely not. Flat taxes are terribly regressive. If I'm making 20k a year most of my money will be spent on food, clothing, and shelter and all will be taxed with a flat tax. If I make 5 mil a year I can live off 1 mil quite comfortably and then just sock the other 4 mil, tax free mind you, in emerging asia for a 10 percent annualized return.

Just another lie the rich tell the poor to get them to campaign against their own interests.

You could be right, but let me try to play devil's advocate anyway and allow you the chance to persuade me.

If the flat tax was low (like 10%) then I think even people at the $20K level could afford to pay it without it cramping their lifestyle very much. Furthermore, if you allow the benefits of taxes to be shared by people equally (or maybe even skewed in favor of helping poorer people), then it doesn't seem that bad to me. So, the $20K family pays $2K in taxes and the $5M family pays $500K, but the benefits are spread equally (or potentially even in favor of the poor).

2/22/11
econ:
monkeysama:

No. Absolutely not. Flat taxes are terribly regressive. If I'm making 20k a year most of my money will be spent on food, clothing, and shelter and all will be taxed with a flat tax. If I make 5 mil a year I can live off 1 mil quite comfortably and then just sock the other 4 mil, tax free mind you, in emerging asia for a 10 percent annualized return.

Just another lie the rich tell the poor to get them to campaign against their own interests.

You could be right, but let me try to play devil's advocate anyway and allow you the chance to persuade me.

If the flat tax was low (like 10%) then I think even people at the $20K level could afford to pay it without it cramping their lifestyle very much. Furthermore, if you allow the benefits of taxes to be shared by people equally (or maybe even skewed in favor of helping poorer people), then it doesn't seem that bad to me. So, the $20K family pays $2K in taxes and the $5M family pays $500K, but the benefits are spread equally (or potentially even in favor of the poor).

A family making $20K per year doesn't have a "lifestyle". They live. Period.

2/22/11
prinmemo:
econ:
monkeysama:

No. Absolutely not. Flat taxes are terribly regressive. If I'm making 20k a year most of my money will be spent on food, clothing, and shelter and all will be taxed with a flat tax. If I make 5 mil a year I can live off 1 mil quite comfortably and then just sock the other 4 mil, tax free mind you, in emerging asia for a 10 percent annualized return.

Just another lie the rich tell the poor to get them to campaign against their own interests.

You could be right, but let me try to play devil's advocate anyway and allow you the chance to persuade me.

If the flat tax was low (like 10%) then I think even people at the $20K level could afford to pay it without it cramping their lifestyle very much. Furthermore, if you allow the benefits of taxes to be shared by people equally (or maybe even skewed in favor of helping poorer people), then it doesn't seem that bad to me. So, the $20K family pays $2K in taxes and the $5M family pays $500K, but the benefits are spread equally (or potentially even in favor of the poor).

A family making $20K per year doesn't have a "lifestyle". They live. Period.

I should of said "household." Their lifestyle depends on their size. I've lived off less than $20K/year for the last 8 years. In fact, this year, me and my girlfriend are living together and we're living off $20K combined. Surprisingly, we have a better lifestyle then you'd probably imagine. But, I get your point, a family of 4 living on $20K is pretty rough. With lower taxes, I suspect many more people would be willing to contribute to charities, voluntarily, in order to help them out. Or, we could have some governmental programs to help them out.

2/22/11
econ:
monkeysama:

No. Absolutely not. Flat taxes are terribly regressive. If I'm making 20k a year most of my money will be spent on food, clothing, and shelter and all will be taxed with a flat tax. If I make 5 mil a year I can live off 1 mil quite comfortably and then just sock the other 4 mil, tax free mind you, in emerging asia for a 10 percent annualized return.

Just another lie the rich tell the poor to get them to campaign against their own interests.

You could be right, but let me try to play devil's advocate anyway and allow you the chance to persuade me.

If the flat tax was low (like 10%) then I think even people at the $20K level could afford to pay it without it cramping their lifestyle very much. Furthermore, if you allow the benefits of taxes to be shared by people equally (or maybe even skewed in favor of helping poorer people), then it doesn't seem that bad to me. So, the $20K family pays $2K in taxes and the $5M family pays $500K, but the benefits are spread equally (or potentially even in favor of the poor).

Ah...I thought you were assuming a flat sales tax. Well if it's a flat tax on income it's still a problem, although admittedly less so. There is an essential difference in the need for that 10 percent on a "not starving and being slightly comfortable" basis between 20k and 5mil that I don't think you would be able to understand unless you've lived on both. In language you might understand there is a severe decrease in the marginal utility of money at the millionaire level.

What I propose is essentially a progressive tax on wealth keyed to how much you are able to pay and how much of society's wealth you control. So the 20k person might pay 100 dollars and the millionaire might pay a million, but it would depend on their accumulated wealth, not just their income. So more likely the millionaire might pay 2 mil and the 20k guy would pay nothing as he's not wealthy enough to afford to save.

2/22/11
monkeysama:

Ah...I thought you were assuming a flat sales tax. Well if it's a flat tax on income it's still a problem, although admittedly less so. There is an essential difference in the need for that 10 percent on a "not starving and being slightly comfortable" basis between 20k and 5mil that I don't think you would be able to understand unless you've lived on both. In language you might understand there is a severe decrease in the marginal utility of money at the millionaire level.

What I propose is essentially a progressive tax on wealth keyed to how much you are able to pay and how much of society's wealth you control. So the 20k person might pay 100 dollars and the millionaire might pay a million, but it would depend on their accumulated wealth, not just their income. So more likely the millionaire might pay 2 mil and the 20k guy would pay nothing as he's not wealthy enough to afford to save.

Yeah, I was talking about an income tax. I actually wish we didn't have sales taxes, for the regressive reasons you already mentioned.

Could I get any traction with my idea, if we use those tax revenues to alleviate some of the poverty of those at the bottom?

I just don't like anybody having to pay "really high tax rates." For on thing, I view it as unethical to take so much of someone's hard earned money just because they earn more than other people. I understand you're not sympathetic to that particular point, but I'm also worried about really high tax rates for two other reasons. First, I worry about the losses in production/output. Second, I worry that it increases populism and creates a political climate where people towards the bottom and middle feel they shouldn't be paying much in taxes and think "the rich" should be heavily taxed. I guess that's why I feel it'd be best to not force anyone to pay more than 10% of taxes. I'd even be all for a heavily progressive tax, so long as no one had to pay more than 10 (or maybe even 20) percent of their income in the form of taxes.

2/22/11
econ:
monkeysama:

Ah...I thought you were assuming a flat sales tax. Well if it's a flat tax on income it's still a problem, although admittedly less so. There is an essential difference in the need for that 10 percent on a "not starving and being slightly comfortable" basis between 20k and 5mil that I don't think you would be able to understand unless you've lived on both. In language you might understand there is a severe decrease in the marginal utility of money at the millionaire level.

What I propose is essentially a progressive tax on wealth keyed to how much you are able to pay and how much of society's wealth you control. So the 20k person might pay 100 dollars and the millionaire might pay a million, but it would depend on their accumulated wealth, not just their income. So more likely the millionaire might pay 2 mil and the 20k guy would pay nothing as he's not wealthy enough to afford to save.

Yeah, I was talking about an income tax. I actually wish we didn't have sales taxes, for the regressive reasons you already mentioned.

Could I get any traction with my idea, if we use those tax revenues to alleviate some of the poverty of those at the bottom?

I just don't like anybody having to pay "really high tax rates." For on thing, I view it as unethical to take so much of someone's hard earned money just because they earn more than other people. I understand you're not sympathetic to that particular point, but I'm also worried about really high tax rates for two other reasons. First, I worry about the losses in production/output. Second, I worry that it increases populism and creates a political climate where people towards the bottom and middle feel they shouldn't be paying much in taxes and think "the rich" should be heavily taxed. I guess that's why I feel it'd be best to not force anyone to pay more than 10% of taxes. I'd even be all for a heavily progressive tax, so long as no one had to pay more than 10 (or maybe even 20) percent of their income in the form of taxes.

The problem with a flat income tax is that in order to alleviate it you have to give some money back to the poor. Ok so anyone who makes <40k gets 2k back say. Then you get what's called a notch, if you make 40k you bay 4k in taxes and if you make 39k you pay 1.9k in taxes. This makes it so people will work less so they don't go over the limit. In order to avoid notches you have to go to a completely progressive tax - giving a subsidy to the poor and then eliminating that subsidy such that every extra dollar earned causes less than a dollar in the marginal tax rate increase.

If you have a non-progressive tax on income after the subsidy (ie a completely flat marginal tax rate) you won't be able to pay for the subsidy on the poor. Remember this would be an alternative to what we have now, so a flat tax would eliminate the gains in taxes from the very rich in a marginal tax system. You could fix this by raising the flat tax to say, 30 percent of income (as opposed to 39 percent highest marginal tax rate), but this would tax the middle class more heavily in order to subsidize the loss in tax revenue from the rich.

There's really no way for this system to work without hurting the poor and middle class or causing a tremendous tax shortfall. It's a giveaway to moneyed interests at the expense of the federal treasury.

2/22/11
monkeysama:

The problem with a flat income tax is that in order to alleviate it you have to give some money back to the poor. Ok so anyone who makes <40k gets 2k back say. Then you get what's called a notch, if you make 40k you bay 4k in taxes and if you make 39k you pay 1.9k in taxes. This makes it so people will work less so they don't go over the limit. In order to avoid notches you have to go to a completely progressive tax - giving a subsidy to the poor and then eliminating that subsidy such that every extra dollar earned causes less than a dollar in the marginal tax rate increase.

If you have a non-progressive tax on income after the subsidy (ie a completely flat marginal tax rate) you won't be able to pay for the subsidy on the poor. Remember this would be an alternative to what we have now, so a flat tax would eliminate the gains in taxes from the very rich in a marginal tax system. You could fix this by raising the flat tax to say, 30 percent of income (as opposed to 39 percent highest marginal tax rate), but this would tax the middle class more heavily in order to subsidize the loss in tax revenue from the rich.

There's really no way for this system to work without hurting the poor and middle class or causing a tremendous tax shortfall. It's a giveaway to moneyed interests at the expense of the federal treasury.

I totally agree with your first paragraph, that's why I (originally) mentioned a negative income tax at the lower levels. That's also why I'd be okay with some sort of progressive tax system where it's capped at the high end. Like bottom 10% pay 1%, bottom 20% pay 2%,... top 10% pay 10% (you could even make it more continuous/smooth if you want).

I also agree with your other two paragraphs, but if it was a "good" alternative, we could go there in steps (as opposed to one fell swoop). In other words, public sector spending would be reduced over time.

2/22/11
econ:

Could I get any traction with my idea, if we use those tax revenues to alleviate some of the poverty of those at the bottom?

This would mean government would be running efficiently using tax revenue we already have to fund programs that are already in place... at a price that we can afford to run them at.

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

2/22/11

^ ^ ^ ^ This world is funny my friend XD, this just remembers me of a say:

"The optimist proclaims that we live in the best of all possible worlds; and the pessimist fears this is true."

count me as a pessimist.

Valor is of no service, chance rules all, and the bravest often fall by the hands of cowards. - Tacitus

Dr. Nick Riviera: Hey, don't worry. You don't have to make up stories here. Save that for court!

2/22/11

You don't oppose those governmental programs?

2/22/11
prinmemo:

You don't oppose those governmental programs?

I do, but I would much rather have it be the case that nobody pays very high taxes and the poor are disproportionally helped by governmental programs, as opposed to the current situation. In such a world, I think even a lot of rich people would vote for governmental programs that disproportionally help the poor.

2/22/11

You're an angry person. Please tell me what percentage of GDP (or the entire federal budget) goes towards programs to help the poor. It is a minuscule amount.

I've had it with your insults. I can say whatever the fuck I feel like saying. And you don't know a god damn thing about what it's like to be in real socialist country. I would shut the fuck up if I were you since it is clear you don't know shit.

2/22/11

Hey ANT, would agree though that education for poor people is a joke? I'd argue it's because the government is so involved, but I digress...

2/22/11
econ:

Hey ANT, would agree though that education for poor people is a joke? I'd argue it's because the government is so involved, but I digress...

Education for poor people what do you mean by that?

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee

WSO is not your personal search function.

2/22/11
blackfinancier:
econ:

Hey ANT, would agree though that education for poor people is a joke? I'd argue it's because the government is so involved, but I digress...

Education for poor people what do you mean by that?

I mean that the governmental monopoly called K-12 education consistently fails the kids who need it the most. Check out the econ group for some videos...

2/22/11

1.6 Trillion Expansion of the Fed's Balance sheetsince 2008. Do the poor benefit from increasing prices for food and energy as a result of QE or QE2? Do the poor benefit as home prices fall (again, a result of QE). 700 Billion in loans to the banks and auto companies.

I'm not trying to say that the poor have done no wrong, or that they don't deserve to be where they are. My point is that the rich benefit tremendously from government policies which are unfair to the poor and middle class, and that you should direct some of the attention of your rants at the rich who gain an unfair advantage as well as the poor.

I'm not trying to say t

looking for that pick-me-up to power through an all-nighter?
2/22/11

1.6 Trillion Expansion of the Fed's Balance sheetsince 2008. Do the poor benefit from increasing prices for food and energy as a result of QE or QE2? Do the poor benefit as home prices fall (again, a result of QE). 700 Billion in loans to the banks and auto companies.

I'm not trying to say that the poor have done no wrong, or that they don't deserve to be where they are. My point is that the rich benefit tremendously from government policies which are unfair to the poor and middle class, and that you should direct some of the attention of your rants at the rich who gain an unfair advantage as well as the poor.

I'm not trying to say t

It's quite possible that most people are losing from governmental policies, except policymakers, lobbyists, public sector consultants, etc... It's some sort of race to the bottom or tragedy of the commons....

2/22/11

Hahaha....nice LIBOR you took the words right out of my mouth.

ANT would be hard pressed to prove that subsidies to the poor are greater than subsidies to the rich in terms of getting bailouts, destruction of union buying power, the ability to take advantage of inflationary monetary policy, government contracts, regulation that allows outright theft fraud and abuse.

I think we need new regulation on the books that only allows a bank to get a bailout if its CEO does mandatory drug testing - maybe he should be paid in food stamps. We don't need more people on welfare spending America's hard earned money on illegal drugs and unhealthy snacks!

2/22/11

Let's get something straight: I am not in favor of just handing out money to people. I want means-tested programs to ensure that those receiving aid actually do something to get themselves out of poverty. I agree with many of your suggestions on ensuring that people are behaving properly and trying to improve themselves.

Let's get something else straight: the numbers. Total spending on welfare (for poor people) in 2009 was about $800B. This is state and federal spending, since states typically match federal spending. This spending is "means tested", which means that you can only get it if you're poor.

Gross GDP is about $15 trillion. That's roughly 5.3% of GDP going to "the poor". The federal budget was about 3.3 trillion. That's roughly 24% of the federal budget (although some of the 800B in spending is actually state spending) going to the "poor". Considering the poor make up about 15% of the entire population, it's not as radical as you make it to be.

Further, it has been shown that these means-tested programs are pretty good at getting people out of poverty. Aren't you the one (or perhaps someone else says this) that always says that we have social mobility, so that poor people aren't poor forever and thus move up in the social ladder and those at the top also move down the ladder? Which is it, is there social mobility in this country or are most poor people living off the dole for their entire lives?

2/22/11

Yeah, I was wondering, too, why nobody's addressed the coercion argument. Here everybody is talking about the best way to split up everybody's else's money while nobody's really gotten over the hump (that econ so carefully laid out earlier) as to why it is etihically legitimate or even "legal" to take more of that money than necessary for government through coercion.

2/22/11
rebelcross:

Yeah, I was wondering, too, why nobody's addressed the coercion argument. Here everybody is talking about the best way to split up everybody's else's money while nobody's really gotten over the hump (that econ so carefully laid out earlier) as to why it is etihically legitimate or even "legal" to take more of that money than necessary for government through coercion.

Um...I have. Multiple times. Go read through the thread again.