The Compassionate Science

I’ve said this before and will say it again: Part of the reason I love economics is that economics is the compassionate science. It’s the discipline that requires us to think hard and to care about how policies affect everyone, not just the people who happen to be standing in front of us.

The response to the government shutdown has been as good an example of this as any. Nothing but a garguntuan failure of empathy can explain the chorus of voices insisting that the shutdown is a bad thing because government employees might lose their paychecks. It takes a mighty powerful set of moral blinders to care so much about the recipients of those checks and so little about the taxpayers who fund them.

It gets even uglier when that same chorus of voices responds “But the government employees are poor and the taxpayers are rich!”. Put aside the question of whether that’s true. If your goal is to transfer money to the poor, and if the poorest people you can think of are government employees, then the well of your compassion is truly dry.

Argue if you must for transferring income from the rich to the poor. But to turn that into an argument for transferring income from the taxpayers to the employees of the government, there are a couple of billion poor people you’ve got to willfully ignore.

When I blogged about this issue earlier this week, we had one commenter — a personal friend, actually, and someone I’ve been surprised and delighted to see showing up in our comments section from time to time — who broke my heart by pointing to the pain of Capitol Hill coffee shop owners who are losing business, apparently oblivious to the fact that taxpayers also visit coffee shops, and that for every dime not being spent by a DC bureaucrat, there’s an extra dime available to be spent by a Nebraska farmer or a New York cab driver. Our commenter apparently remembered to care about the guys selling coffee in DC but forgot to care about the guys selling coffee in Nebraska.

Which brings me back to what I like about economics. I don’t care what your views are on the shutdown, I don’t care what your views are on income redistribution, I don’t care where you are on the ideological spectrum, but if you’ve ever absorbed any economics at all, you’re immune from the mistake my friend made this week. The single biggest lesson that economists have to teach is that it’s important to care about everyone, not just about the people who happen to cross your path. That’s a really good lesson, and this week has been a good reminder that we have to keep on hammering away at it.

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73 Responses to “The Compassionate Science”


  1. 1 1 Advo

    I suppose the argument can be made that dollar-for-dollar, the wage of the government employee has a higher utility than the lower tax for the taxpayer?
    The taxpayer’s marginal dollar provides less utility than the government employee’s wage, does it not?

    Alternatively, you can argue that this is about disappointed expectations.

  2. 2 2 Bill

    @Advo, what would be the basis for your interpersonal utility comparison conclusion?

  3. 3 3 Advo

    Simple – the diminishing marginal value.
    The first dollar you earn has the highest utility.
    And then of course an expected dollar that you don’t get is, on average means a higher utility loss than if you get a dollar that you don’t expect.

  4. 4 4 Daniel

    @Bill,

    I guess he could base it on diminishing marginal returns. As in the first dollar earned is not as valuable as the last dollar earned, but this is no substitute for empirical evidence.

  5. 5 5 Bob Thompson

    Landsburg:

    I appreciate your argument and accept it as valid. But substantive compassion must go one step beyond the transfer of the taxpayers’ dollars to government bureaucrats and acknowledge the enormous damage the people of the US are suffering at the hands of an out of control bureaucracy engaged in what is effectively a legislative function resulting from the abdication of the Congress.

  6. 6 6 Lucas

    I thought about disappointed expectations as well and agree with @Advo on both points he makes, but my main problem with the post is the apparent assumption that paying government employees is merely transferring money. If somebody is paying these people the assumption should be that they earn it through their work, and right now they are either working without getting paid, which seems unfair, or not working at all, which means lost productivity.

    Maybe government employees are not particularly productive, or not productive at all. Argue if you must for firing unproductive employees and closing unnecessary departments. But keeping them employed and not paying them doesn’t make sense.

  7. 7 7 Advo

    I think we should have compassion for both taxpayers and government employees. The government employees because they’re idled without pay and the taxpayers because they don’t get the valuable services provided by the government employees.

  8. 8 8 Alan Wexelblat

    Separately, I would point out that your notion of “compassionate” requires a special definition. It ought not surprise you that people would look askance at a ‘science’ that requires people to treat everyone as faceless interchangeable units.

  9. 9 9 Daniel

    @Advo,

    Right that’s what’s so ridiculous about Steve’s argument. nobody.really mentioned this in a previous instance of the post, that our options aren’t between paying and not paying the employees, since congress already voted unanimously to pay the government employees that are furloughed. The options right now are between paying them later for not working or paying them now to work.

    My question to Landsburg is, do you believe the government workers work is worth less than the interest accrued while not paying them? Although even that is biased since I’m not taking into account the financial stress to the employees that have been furloughed, since their vendors (credit card companies, LL’s) will not accept delayed payment without penalty.

  10. 10 10 nobody.really

    If your goal is to transfer money to the poor, and if the poorest people you can think of are government employees, then the well of your compassion is truly dry.

    Or you’re a Libertarian Christian. You understand real poverty to be manifest not in a lack of material goods – that may be just a transitory state – but in sin, the separation from God. The appropriate response to sin is compassion for those who lacks the capacity to avoid its clutches, either because they have no alternative or, worse, because they have no conscience.

    Recall — to whom did our Lord extend His compassion? The prostitute. The leaper. And the TAX COLLECTOR – that is, to government employees. Think of it — 800,000 of our brothers and sisters ensnared in this degrading lifestyle!

    Didn’t you see the video of a Representative berating a national park official for turning people away from the WWII memorial? “You should be ashamed!” he intoned. And she responded that she was NOT ashamed of her work. She was absolutely brazen. Has no one witnessed to her about the Good News of Supply-Side Jesus? In all the world, is there any lamb more lost than she?

    How could a good Christian Libertarian witness such things and not be moved to pity?

  11. 11 11 James From Pittsburgh

    I agree with Steve’s point above, but at this point isn’t the shutdown predominantly harming taxpayers? The taxpayers are still be taxed, getting nothing useful in return, and we’ve already promised to pay the government employees once this ends? (Of course this is assuming that the government’s activities are, on average, value-adding to the taxpayers…)

  12. 12 12 Jack

    “The single biggest lesson that economists have to teach is that it’s important to care about everyone, not just about the people who happen to cross your path.”

    When you say “care about everyone,” do you essentially mean treat everyone the same regardless of certain parameters eg income, national origin, etc. or at least don’t penalize people based on these parameters?

  13. 13 13 Bill

    @Advo and Daniel, DMU is an assertion that applies to the INDIVIDUAL. Such an assertion isn’t the basis for making interpersonal comparisons of utility.

  14. 14 14 Mark H

    “Nothing but a garguntuan failure of empathy can explain the chorus of voices insisting that the shutdown is a bad thing because government employees might lose their paychecks.”

    This is among the most brazen comments I’ve heard from an economist, and that is saying something.

    How about strong risk aversion (so the chance of a dime going to several Nebraskan farmers is not worth the risk of losing one’s job overnight)? Or a model where an unanticipated government shutdown reduces RGDP, so that the income loss to government employees is NOT fully compensated elsewhere? Argue that these aren’t good models all you want. But alleging that somebody who believes that government workers are made worse off by the shutdown to a greater degree than everybody else is made better off can ONLY be explained by a lack of empathy is absurd on its face.

  15. 15 15 nobody.really

    1. I agree with Landburg’s main premise: It’s hard to justify our current system of civil service purely on the grounds of compassion for the poor. News stories about the hardship that the shutdown will visit upon public employees fail to discuss the larger context: Yes, recipients of transfers will feel a loss. But providers of the transfers — taxpayers — have, in aggregate, been feeling this loss since the dawn of taxpaying. What has changed is not loss, but only the people who are feeling it. In short, journalists purport to provide news stories about loss, but are actually just providing human interest stories about frustrated expectations. These stories convey an unstated privilege for the status quo. In the interest of balance, shouldn’t we also have human interest stories about people struggling to pay their taxes?

    2. The fact that Congress now agrees to grant back-pay for public servants kinda muddies this narrative. For purpose of this discussion, I propose we ignore it.

    3. So let’s look at some larger contexts.

    A. Public services underlie pretty much all autonomy rights, including property rights. Landburg argues that a focus on the hardship of people who long longer receive the benefit of taxes should trigger a comparable focus on the hardship of taxpayers. I argue that a focus on a taxpayer’s concept of property rights should also trigger a focus on the people who provide all the services that permit him to exercise property rights. In short, taxes are not an abridgement of property rights; taxes are the mechanism that makes the illusion of property rights possible.

    B. Many autonomy rights are bestowed arbitrarily. You do nothing to earn your genetic makeup or the circumstances of your birth, etc. Much government spending is designed to mitigate the vagaries of this arbitrary distribution of benefits and burdens. Arguably, any critique of redistribution should be understood within the larger context of a critique of the initial distribution.

    Related to this notion, some people regard government as a giant mutual aid society among citizens. Under this concept, government’s duty to promote the welfare of its citizens may have a higher priority than its duty to promote the welfare of non-citizens. In other words, this type of compassion is an exercise in constrained optimization.

    C. Even if compassion for the poor would not necessarily cause you to create our current system of wealth transfers to civil servants, this compassion might well form part of a rationale for expressing compassion for laid-off civil servants.

    D. Why do journalists do stories about frustrated expectations? I mean, we all know the future is uncertain, so what makes frustrated expectations newsworthy?

    Precisely because the future is uncertain, people do extraordinary things to try to predict and control it. Indeed, the very concept of property arguably derives from people’s desire to achieve a degree of control about their future. They build expectations and plans about the future in part based on their beliefs about what they can control.

    Consider: We feel compassion for people born with disabilities, and for their parents. But what is a disability, other than a failure to conform to some arbitrary expectation? C.S. Lewis argued that no right to expect life at all, let along any specific variety of life, so what grounds do we have for feeling bad that a given life does not measure up to some expectation of ours? Fair enough, we lack any “property right” to be born with an able body – yet we harbor those expectations all the same.

    I suspect most employees – and public employees in particular — regard their incomes as akin to a property right. They build expectations and plans around them. And they regard deprivation of this income as they would regard deprivation of property rights generally. Much like the expectation of being able-bodied, you would be hard-pressed to find a legal foundation for this expectation. But we have it nonetheless.

  16. 16 16 Ken B

    “I suspect most employees – and public employees in particular — regard their incomes as akin to a property right.”
    The tag on this thread is bad reasoning!

  17. 17 17 prior probability

    What about our veterans?

    Sorry, I forgot … they’re “non-essential”

  18. 18 18 Pete S

    @Jack: I think “caring about everyone” means you need to care about the people who get a small, obscure benefit, not just the people getting a large, visible cost. Or vice-versa (large visible gain vs small, obscure cost), which tends to be more common.

  19. 19 19 Bob Murphy

    … a personal friend, actually, and someone I’ve been surprised and delighted to see showing up in our comments section…

    But Steve, every time your friend shows up and comments here, it means there are other bloggers who are that much lonelier. Take off your moral blinders, man!

  20. 20 20 Harry

    I see your point, in particular about the person selling coffee in Nebraska, maybe in Valentine, NB; but that’s passionate, not compassionate.

    Indeed economics done right yields the most truthful results dispassionately fair to all. That is a tough order to put into practice, especially being in the soothsayer business. Seeing the less obvious is difficult, as is not assuming one is right in comfortable old unchallenged thinking. Except for me and my daily axiomatic utterances.

  21. 21 21 Seth

    @Advo – I suppose an argument can be made for me to only take your dollars and give them to people who I think has more utility for them.

  22. 22 22 Advo

    @Seth:

    I like my dispossession to be legitimized by some kind of democratic process.

  23. 23 23 Bill

    If Seth takes from A to give to B, it’s wrong. Taking from A to give to B becomes “legitimate” if Seth can get enough people to agree it’s the thing to do?

  24. 24 24 Daniel

    @Bill,

    I’d say that only if the rules apply equally to everyone and it’s not specifically targeting a single person. This is why it’s not constitutional to create a law that targets individuals, but it is legal to set laws under which under certain circumstances someone might fall under the law and not others.

    In your example, it’s not legal for the majority to specifically say that we should take from Warren Buffet and give to Joe, but we do say that if any person makes over “x” dollars they’ll be charged at y% marginal rate, and that if any person makes under “x” dollars and meets a number of other conditions, we’ll take from that pool of (x*y%) and give part of that to the person that meets those conditions. See how it’s different than the majority specifically targeting an individual?

  25. 25 25 Bill

    So, if Seth takes from the pool made up of those earning over $X and gives his takings to those earning less than $X, that would be wrong (stealing). But if Seth can get enough people to agree that it’s the thing to do, that makes it “legitimate”?

    “Democracy and majority rule give an aura of legitimacy and decency to acts that would otherwise be deemed tyranny.” ~ Walter Williams

    http://www.creators.com/opinion/walter-williams/democracy-and-majority-rule-12-11-21.html

  26. 26 26 nobody.really

    What Bill said. And more:

    “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor….” ~ Adam Smith

    Ergo it’s wrongful to compel people who don’t own property to contribute to paying for civil government, no matter what democracy and majority rule say.

  27. 27 27 Daniel

    @Bill,

    Yes if Seth takes from the pool made up of those earning over $X and gives his taking to those making less than $X that would be consider stealing. I can see where you’re coming from but it’s made legitimate under the bounds of our constitution.

    I’m just not understanding what you would have as an alternative? Describe your perfect system of governance.

  28. 28 28 Daniel

    The other options I can think of for governance are anarchy, autocracy, oligarchy, theocracy, strict democracy, sortition, or some alternate form of republic.

    Do you prefer any of these or to you have another idea?

  29. 29 29 Daniel

    I prefer our system because it weighs the wants of the majority against protections for the individual. If you can think of a better way, I’d like to here it.

  30. 30 30 RJ

    What Bill said. And more:

    “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor….” ~ Adam Smith

    Ergo it’s wrongful to compel people who don’t own property to contribute to paying for civil government, no matter what democracy and majority rule say.

    Bah ha ha! Nice.

  31. 31 31 RJ

    If Seth takes from A to give to B, it’s wrong. Taking from A to give to B becomes “legitimate” if Seth can get enough people to agree it’s the thing to do?

    Perhaps you’d find it more justifiable if you got something back for your money?

    To abate the spread of poverty and give the poor and middle class enough capital to invest is good for society as a whole, that includes A. A poorer society, one with high unequal distributions of wealth and lack of class mobility, is bad in the long-run. It also, true to Adam Smith’s quote, ends up taking the ‘tyranny’ out of the majority and putting it into the few. (Though I find the former to be an exaggeration over the latter.)

    There’s other arguments of course…

  32. 32 32 Daniel

    @Bill,

    Another distinction between stealing and taxation, ff someone steals from me, I have no choice in the matter. I can get out of taxes by reliqunishing my citizenship.

  33. 33 33 Bill

    “In 1794, when Congress appropriated $15,000 for relief of French refugees who fled from insurrection in San Domingo to Baltimore and Philadelphia. James Madison wrote disapprovingly, ‘I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.’ Today, at least two-thirds of a $2.5 trillion federal budget is spent on the “objects of benevolence.” That includes Medicare, Medicaid, Social Security, aid to higher education, farm and business subsidies, welfare, ad nauseam.”

    http://econfaculty.gmu.edu/wew/articles/fee/constitution.html

    Regarding the Seth and Advo proposal to take from A to give to B, I suppose voluntary assistance – rather than forcefully taking from A – would be out of the question? And if it involves a group of potential transfer recipients, what stands in the way of your
    organizing a collection of individuals who share your desire to demonstrate benevolence? You could pool your resources to assist the group at your own combined expense.

  34. 34 34 Daniel

    @Bill,

    If those programs are unconstitutional why do you suppose no one has mounted a successful supreme court challenge to them?

  35. 35 35 Bill

    Good question. Maybe everyone feels the Supreme Court is in the bag regarding “General Welfare.”

  36. 36 36 RJ

    Bill,

    That quote you gave was concerning French refugees and spending constituents money on ‘objects of benevolence’ is basically spending taxpayer money on foreign aid. Spending constituents money on Americans is justified via Article I Section 8 of the Constitution.

    Quoting certain Founding Fathers’ opinions on certain matters in order to augment your point is pointless (pun unintended) because I can just as easily find another who many a quote of a contrary opinion.

  37. 37 37 Bill

    Since Madison is credited with writing a significant part of the Constitution, I was willing to defer to his interpretation of its intent. Regarding your Article 1, Section 8 reference, I assume you have in mind the “General Welfare” wording in Clause 1. On this point, we have Madison writing, “With respect to the two words ‘general welfare’, I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” … “If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions.” Madison laid out what he saw as constitutional limits on federal power in Federalist 41 and 45: http://www.cato.org/blog/ron-paul-general-welfare-clause

    Re your “foreign aid” suggestion, is providing financial assistance to foreign nationals residing in the U.S. (the French refugees case) considered foreign aid?

  38. 38 38 RJ

    So what? He’s not the be all end all interpreter of the Constitution, he merely helped draft it. So did Alexander Hamilton who wrote…

    The terms “general Welfare” were doubtless intended to signify more than was expressed or imported in those which Preceded; otherwise numerous exigencies incident to the affairs of a Nation would have been left without a provision.

    Re your “foreign aid” suggestion, is providing financial assistance to foreign nationals residing in the U.S. (the French refugees case) considered foreign aid?

    Yes, I is.

  39. 39 39 GabbyD

    why compare tax payers and govt employees here? tax payers have already paid, and employees will get their income late.

    why is this not inefficient and welfare inferior?

  40. 40 40 Craig Green

    Good article promoting Henry Hazlitt’s idea in ECONOMICS IN ONE LESSON: the effect of a public policy should be considered for its effect on ALL people, not just a few. This can be understood by a child, but not most professional economists. But, comparing one dime of coffee shop spending to a dime spent by government is too generous. It takes TWO dimes from the private sector to produce ONE dime of government spending – the balance consumed by bureaucrats. This is why the Founding Fathers tried to limit government, which today is no longer limited.

  41. 41 41 David Wallin

    I was in the gym the other day and saw (couldn’t here) that Fox News was doing a story that Grand Canyon business are losing $X millions in the government shutdown. I couldn’t help think of those cases where Steve has taken a newspaper article and rewrote it from a different perspective. I’m thinking of how much better off the Denver economy will be when John cancels his trip to the Grand Canyon.

  42. 42 42 David Wallin

    BTW, I contend that a great victory for the country could be had if the deal to end the shutdown (or raise the debt ceiling) included a constitutional amendment to balance the budget. Now, to make this work, I think you’d have to have a long date for implementation. So, for example, the federal government must balance the budget by 2025. Most of the current members know their feet won’t be held to the fire. I like the balanced-budget version that limits fiscal year 20xx’s expenditures to the collection in 20xx-1.

  43. 43 43 iceman

    Daniel 32 – with regard to the “you can always leave” justification…just a heads-up that if you’re alluding to the notion that residency = implied consent (for laws, taxes etc.), you’re headed down a cul de sac (this effectively ascribes to the govt the power to make you leave, which is the type of power in question in the first place).

  44. 44 44 Floccina

    “Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connexion with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befal himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own.” Adam Smith

  45. 45 45 Daniel

    “(this effectively ascribes to the govt the power to make you leave, which is the type of power in question in the first place).”

    No you have choice, you can pay taxes or leave. There’s nothing making you leave. I was only using it as a distinction between stealing and taxing. If someone steals from you, there’s no choice in the matter. The robber doesn’t give you another option. Taxation at least expands your choice set beyond this.

  46. 46 46 iceman

    “Your money or your citizenship” isn’t a very principled response to Bill. Whether you choose to pay or go live somewhere you’d rather not, either way they’ve taken something from you.
    And supposing there’s nowhere to go that wouldn’t steal even more from you, this “choice” argument kinda goes away?

  47. 47 47 Daniel

    @ Iceman,

    I just said there was more choice than if someone is stealing from you. Do you really disagree with that, or are you just being argumentative?

    “And supposing there’s nowhere to go that wouldn’t steal even more from you, this “choice” argument kinda goes away?”

    Why do you suppose there’s nowhere else to go? You could live at sea.

  48. 48 48 Daniel

    @Iceman,

    Bill was basically saying that taxation was like stealing but it was considered okay because the masses have agreed to it. I was just pointing out at least one other distinction. Do you disagree that there is the distinction I noted?

  49. 49 49 iceman

    “argumentative” = just having a little fun. But I think it’s a weak distinction – Bill would still say you’re stealing something, you’re just telling him “give me your watch or your wallet, it’s your choice”. And again the value of this “choice” depends on what other countries are doing, so it could be more like “give me your watch or jump in a vat of boiling oil, it’s totally up to you”. (You’re not really being serious about living at sea.) Even a mugger gives you an implicit choice: “give me your wallet, or you can always try to run and take your chances.” Of course the thief doesn’t really pretend this is a concession based on some principle like residency = implied consent, which in that sense makes him more honest about the transaction.

  50. 50 50 Daniel

    @Iceman,
    I still maintain that this is not an arbitrary distinction. If you were in a club that required a fee to belong to, and the fee was decided by vote, could you say “man this is stealing, either way I have to give up my club membership or my money.” Also what kind of thief provides services to you? A thief can also steal from you unbeknownst to you, and thus you’d have no choice in the matter.

    So I’ll ask again, what other system would you have? Bill never answered that because there is no other answer that makes sense. We have taxation with representation through a representative republic. What system of governance would you prefer? If taxation is somehow equivalent to stealing, what system would you have that disallowed this practice? Should we not have a representative democracy?

  51. 51 51 Bill

    “I respect ordinary thieves much more than I respect politicians. Ordinary thieves take my money without pretense. Unlike typical politicians, these thieves don’t bore me with silly explanations of why their thievery is for the greater good. Nor do ordinary thieves insult my intelligence by proclaiming that they’ll use the money that they steal from me to make my life better than I would have made my life had my money not been swiped from me.”

    ~ Walter Williams

  52. 52 52 iceman

    Clearly some amount of ‘taking’ without consent is necessary to fund essential govt functions, even defense (at least in the particulars). The point is a healthy perspective on the general nature of these ‘transactions’ should make us circumspect about the scope of such. For particular laws to have ‘legitimacy’ / respectability, the process at least has to be viewed as just.

    Club example is flawed – maybe after you join if you feel they raised fees in a way that flouted the process outlined in the by-laws

    ‘Stealing’ would refer to a net transfer of $ in excess of value of services received (you know, progressive taxation)

  53. 53 53 nobody.really

    ‘Stealing’ would refer to a net transfer of $ in excess of value of services received (you know, progressive taxation)

    But this goes to the heart of the matter: What services do you receive?

    What services do I receive from insurance companies? Imagine I call my insurance agent and demand repayment of all my premiums for policies under which I have received “no benefit,” and accuse him of stealing when he refuses payment.

    Much of government services are a kind of insurance policy. Slate had an article entitled, Why Aren’t You Dead Yet?, discussing the myriad ways that people used to die in droves, but now don’t. Most of the policies that protect us from these risks are invisible to us.

    For you or John Galt to say, “I should only have to pay government for the services I receive” presupposes you are in a position to think those thoughts and to make such demands. It presupposes, for example, that you haven’t died in infancy. It presupposes you aren’t currently in a coma. It presupposes you don’t suffer from certain cognitive impairments. What percentage of the US budget do you propose we raise from people who died in infancy, or are in comas, or suffer from debilitating cognitive impairments? A policy that says, “People should pay for all the services they receive” would lead to instant governmental default due to the large number of people who receive government services but cannot afford to pay for them.

    In short, the people who say, “I should have to pay government only for the services I receive” are people for were ensured by the same social safety net that protects us all – but now, having been covered by the insurance but not having incurred any insurable risk, want to welsh on paying the premiums.

    In any event, what is the market value of US citizenship? It’s well worth evaluating. Consider the stories of people who pay vast sums to smugglers, often selling themselves into servitude, for the opportunity to live only a fraction of their lives enjoying a fraction of the benefits of US citizenship. They surrender not only money, but their old identity, their old credentials, their old language and culture, connection with their old family – all for a pale imitation of the benefits we feel free to snort at.

    I don’t say that people who disapprove of taxes should leave. But I ask why they don’t. There are plenty of places in the world without functioning governments: Somalia, rural Afghanistan, rural Pakistan, the malaria-plagued heart of the Amazon rain forest, etc. If you accept the real world as a basis of comparison, rather than some libertarian fantasy world, you may arrive at a different assessment of the value of the services government provides you.

  54. 54 54 Daniel

    @nobody.really,

    Thanks, I was going to have a similar yet not so eloquent response but you’ve saved me the time.

  55. 55 55 iceman

    Good stuff. I wasn’t trying to get too deep, just making what seemed an obvious response to “what kind of thief provides you services?” Within the paradigm of “stealing” (which is obviously a bit inflammatory by design), if a mugger shines my shoes first and then demands $100, I would still feel I’d been robbed.
    As I’ve said before, if all we were really talking about was the types of things you mention (assisting people with cognitive impairments or in comas or ensuring clean drinking water etc.), no one would ever be arguing. But often we’re still required to decide where to draw marginal lines, and there are other areas that are simply redistributive. (Insurance premiums typically aren’t means tested.) However you want to characterize it, at the end of the day you are taking from people the fruits of their labor, and in my view it’s helpful to consider it from that perspective.

  56. 56 56 Daniel

    @ iceman,

    nobody.really’s point was that you even making to the point of being able to enjoy “the fruits of your labor” is partly a consequence of our redistributive system. The “fruit’s of your labor” occurred within a complex system and can not always be attributed to just your efforts. That’s why it seems reasonable for society to demand part of the “fruit’s of your labor” in return for keeping our system viable for the “fruit’s of your labor” to exist.

  57. 57 57 nobody.really

    [I]f all we were really talking about was the types of things you mention (assisting people with cognitive impairments or in comas or ensuring clean drinking water etc.), no one would ever be arguing. But often we’re still required to decide where to draw marginal lines, and there are other areas that are simply redistributive.

    What are you thinking about policies regarding people in comas that are NOT redistributive?

    However you want to characterize it, at the end of the day you are taking from people the fruits of their labor, and in my view it’s helpful to consider it from that perspective.

    Great. Here’s how I want to characterize it, and in my view it’s more helpful to consider it from this perspective: The “fruits of your labor” are not merely the fruits (results) of your labor. They are the results of a LOT of stuff. So if we were to create a function predicting your earnings, what percentage of the outcome would be driven by factors over which you exercise no control whatsoever?

    To trot out my favorite example, compare the lifetime earnings of J.S. Bach and Justin Bieber: Bieber has earned more. How can we explain this? Some hypotheses: 1) Bieber is more talented. 2) Bach, the composer of more than a thousand works, including some of the greatest in the Western cannon, has been out-worked by the hard-charging 19-yr-old Bieber. 3) Talent and hard work are merely two components of earnings, and the vastly larger components have to do with factors over which people exercise little control. Pick whichever hypothesis seems more plausible to you.

    But wait – there’s more! To what extent do you influence the existence of talent? This is a hotly debated topic. Some people argue that genius merely reflects hard work: Mozart and Michael Jordan each spent bizarre hours perfecting their crafts. But this argument has obvious limits. Did Michael Jordon achieve his physical height through hard work? Moreover, what factors drove Mozart and Jordon to practice so long at their respective crafts? Did they perhaps derive greater satisfaction from their efforts than did other, similarly-situated people?

    (This thought is pressing on me these days. I have two academically accomplished daughters, each taking the most rigorous classes in their schools. One daughter loves discovery and the intellectual challenge; the other … doesn’t. “Look how you can use different tools – trig, geometry, algebra – to arrive at the same answer; it’s that COOL???!?” I ask. These problems set off little firecrackers of satisfaction for me; for her … nothing. In short, one daughter seems to have been born with an intrinsic reward mechanism that the other one lacks. We’ll see how far each of them goes academically, but the signs are already there.)

    Landsburg has suggested one way that you CAN influence the existence of talent: Have more kids! In Fair Play, Chap. 13, pp. 143-60, Landsburg acknowledges that productivity is not evenly distributed throughout the population. Rather, a few geniuses provoke a disproportionate amount of growth. And the best way to achieve geniuses is – ta da! – have more people.

    This argument demonstrates that genius is not a function of INDIVIDUAL initiative and hard work; it’s a function of a POPULATION. If genius occurs once in every billion people, then the world has to produce, on average, a billion people to generate one genius. Now, out of the one billion people required to produce that genius, what are the odds that the genius also happens to be the one who takes the most initiative is works the hardest? (I’ll wait while you do the math.)

    Bottom line: Geniuses do not create themselves. They are created by others – arguably, by vast societies.

    So what conclusions can we draw about the argument that a person’s income is purely the fruit of his own labor? It’s a pretty common argument; indeed, you’re hear it from more than one person out of a billion. In contrast, I wonder – would Bach have embraced this argument? Somehow I kinda doubt it.

  58. 58 58 iceman

    I know, “you didn’t build that”. Except of course some people really do work harder, make better use of their natural abilities and take more risk. The fact that a road runs by a factory doesn’t negate all that — in fact if we invest in such “public goods” precisely because we believe we benefit from them in aggregate already, how does that justify a further ex post ‘clawback’ again? Certainly as an argument we suddenly need to increase top tax rates it seems almost ridiculously irrelevant (but that’s a bit of a tangent).

    Guess I struck a nerve here, but again true “public goods” aren’t the issue and yes nothing is *purely* the result of ones own efforts. Rather at this point I’m wondering how you two would derive *any* principled limitations on using the “fruits of others’ labor” to fund any bureaucrat’s “good idea”? Sure everything is *partly* a consequence of other things – in the economic sphere, notably including those essential govt functions like enforcing contracts and property rights (anyone disagree these are key characteristics of a ‘market’ economy’s ability to produce greater growth?). This is another respect in which “you didn’t build that because our *system* allowed you to thrive” (literally paraphrasing the president here) seems like a non-starter: “because your success is due to the fact that we didn’t interfere more, we have the right to interfere more” (a more expansive paraphrase). Seems about as circular as the “residency = implied consent” line.

    You can (and do) argue that social insurance is a public good in a probabilistic sense (as opposed to directly benefiting everyone on net), and that’s fine – to a point. Almost everyone agrees on some level of safety net (while some fear the bureaucratic incentive is to tip this into dependency). By “purely redistributive” I meant there’s plenty we do that seems to go well beyond the “subsistence” issues you link to this notion of insurance, but represents more basic transfers (aka vote-buying). A recent post raised whole departments like Commerce and Agriculture for consideration in this regard – anyone really want to argue that much or even most of what they do truly constitutes this notion of insurance – at least in practice?

    Regarding how genius is distributed, I’d just add that an outcome can seem unfair but not be unjust. Like if my neighbor wins the lottery instead of me. You two clearly want to go “behind the veil” here (e.g. talking about even the distribution of the ‘qualities’ or ‘factors’ that cause some people to work harder at developing their innate abilities?). IMO Nozick gutted that line of argument in many ways, the most basic being that it requires one to arbitrarily assume away process principles and focus exclusively on end-state principles of distributive justice.
    I also don’t see how the ‘have more kids’ argument implies anything about the relevance of individual effort just because there are more individuals involved.

    P.S. on the really crucial Bieber vs. Bach debate – I presume the answer is many many teenage girls find Bieber to be much cuter, and apparently have parents who allow them to reward that quality with their $. Of course in Bach’s day most of them probably wouldn’t have had the discretionary income to squander in that manner. But I doubt anyone will remember “Baby Baby Please” 400 years from now so Bach has that going for him.

  59. 59 59 nobody.really

    Guess I struck a nerve here….

    Eh. This is a favorite topic, and I’m procrastinating on the project I’m (supposed to be) working on.

    I’m wondering how you two would derive *any* principled limitations on using the “fruits of others’ labor” to fund any bureaucrat’s “good idea”?

    Yeah, the interests of the individual are always in tension with the interests of the group; I struggle with how to resolve the tension. In the US, the bureaucrat is limited by the democratic process, certain protected categories of autonomy rights, and the equal protection clause. That may not be sufficient, but it might be the best we can do.

    “[Y]ou didn’t build that because our *system* allowed you to thrive” (literally paraphrasing the president here) seems like a non-starter: “because your success is due to the fact that we didn’t interfere more, we have the right to interfere more” (a more expansive paraphrase).

    Remind me again, how’s your case of bubonic plague? Your malaria? All those other infectious diseases that have wiped out more people than all the world’s wars combined?

    Oh, that’s right – you don’t have them. Because of that mean, meddlesome government deprived you of them.

    Libertarians live with the idea that the US government is the biggest threat to their autonomy – and they’re often right. They’re right precisely because the US government has, at great expense, eliminated damn near all the other threats to their autonomy. So libertarians then take that achievement as an exogenous “state of nature,” and regard any further governmental action as a hindrance.

    But plenty of people live in a context that seems to inoculate them from these delusions. People who grew up surrounded by dangerous infectious diseases. Or suffering from hunger, thirst, or lack of education. Or suffering from natural or man-made disasters. Or drowning within sight of a Navy ship or a park lifeguard. Or experienced oppression by worse governments, or by gangs, or by abusive family members. Or ethnic and religious minorities. Or women. Tell these people that the biggest threat to their autonomy is government. Some may believe you. Many won’t. Perhaps their backgrounds have distorted their perspective. Perhaps their backgrounds have informed them.

    Again, I invite you to consider all the places in the world in which you might live that lack a functioning government. You could go to these places and be largely free of US governmental interference. (At least in theory. In practice, the US would read your mail and send drone strikes, but leave that aside….) True, you’d be subject to infectious diseases and roving bands of hoodlums enforcing social norms you oppose – but what did you expect? A virgin wilderness in which you could build your idyllic fantasies?

    [T]here’s plenty we do that seems to go well beyond the “subsistence” issues you link to this notion of insurance, but represents more basic transfers (aka vote-buying).

    Why don’t subsistence-level transfers constitute “vote-buying”? Heck, I’d think that would be very motivating to starving voters.

    Moreover, why wouldn’t the refusal to provide transfers, regardless of the merits, constitute “vote-buying” from the people who would have to finance the transfers?

    Moral: Government actions can be motivated by corrupt factors. So can government inaction. There’s no reason to suspect that action is more likely to be wrongfully motivated than that inaction is; to the contrary, it’s generally easier to provoke inaction than to provoke action.

    A recent post raised whole departments like Commerce and Agriculture for consideration in this regard – anyone really want to argue that much or even most of what they do truly constitutes this notion of insurance – at least in practice?

    I really want to argue it. The Dept. of Agriculture runs the food stamp (SNAP) program – a program that subsidizes food for people raising kids who lack sufficient income. Seems insurance-y to me.

    (Then again, perhaps this example is out-of-date. The latest version of the farm bill to pass out of the Republican House increased subsidies for corporate farms, but completely eliminated food stamps. If that’s the way this is going to go, I’d support eliminating the farm bill – and perhaps the entire Department. )

    Regarding how genius is distributed, I’d just add that an outcome can seem unfair but not be unjust. Like if my neighbor wins the lottery instead of me. You two clearly want to go “behind the veil” here (e.g. talking about even the distribution of the ‘qualities’ or ‘factors’ that cause some people to work harder at developing their innate abilities?). IMO Nozick gutted that line of argument in many ways, the most basic being that it requires one to arbitrarily assume away process principles and focus exclusively on end-state principles of distributive justice.

    Precisely the opposite. Libertarianism is unsustainable because it ignores adverse selection. It assumes that people own all kinds of benefits they did not create, and gives no attention to the factors that permit those benefits to come into existence. To the contrary, I have focused on the factors that permit benefits to come into existence, and argue that whatever social policy we adopt, it should maintain the system that has enabled the benefits to come into existence.

    John Galt says, in effect, “In the great bell curve of society’s productivity, I’m on the extreme high end. I’m going to use my productivity exclusively for my own benefits and contribute nothing for the maintenance of the society that created me – a society that must, as a matter of simple probability, include many people who are less productive than I.” If everyone adopted this attitude, then only people left in society would be those who lacked sufficient productivity to maintain society. Society would collapse.

    I also don’t see how the ‘have more kids’ argument implies anything about the relevance of individual effort just because there are more individuals involved.

    It doesn’t. The idea is that, while effort has value, genius also has value – and is distributed more or less randomly. The only way you increase the odds of being in a society with a genius is to increase the number of people in that society. But the challenge for society is that when the genius is born, he may grow up to become John Galt – claiming exclusive rights to benefit from the very rare talent he has received.

    P.S. on the really crucial Bieber vs. Bach debate – I presume the answer is many many teenage girls find Bieber to be much cuter, and apparently have parents who allow them to reward that quality with their $. Of course in Bach’s day most of them probably wouldn’t have had the discretionary income to squander in that manner.

    I assume you’re being facetious. If you prefer, substitute Chopin for Bach. Chopin was the touring rock star of his day, and women swooned. Yet Bieber has still managed to out-earn Chopin’s wealth. Why? Because Bieber was born into a more favorable technological environment – an environment Bieber did shit-all to create.

    So, yes, hard work is great. And to some extent, it makes sense that we praise hard word because the praise might actually motivate individuals to change their behavior in useful ways; praising technological advances that are beyond the power of any individual to control is less useful. But this strategic consideration about which attributes are “praiseworthy” does not determine which factors are most relevant for public policy purposes.

  60. 60 60 iceman

    Enjoying it. Again this is not about things like infectious disease or starvation. Nobody that I know has any issue with paying for a CDC or the concept of providing food to the needy. Neither is it about anarchy: job #1 for govt is protecting us from oppression internal and external, because it has a natural monopoly on doing so. The danger of course (backed by plenty of examples that warrant some concern over the issue) is that with this power govt becomes the oppressor. Hence the notion of somehow getting govt to limit itself to essential functions. We tried writing a document codifying that, and it has worked pretty well when we don’t choose to ignore it. I do fear year by year the frog pot is starting to boil.

    What this is about is the point that we *already* benefit from the existence of the “Galts” of the world, before any progressive redistribution. When someone creates “wealth” – i.e. producing ideas or things that make our lives better — that *is* the payoff for having designed a system that allows them to flourish. That’s where to me it seems a non-starter to come back and say “because we did something that was in our interest that also happened to work out well for you, we get to assert a greater ex post interest in your success.” Do it if you will and take the consequences of the ensuing “shrug”, but don’t pretend to justify it out of some sacrifice in the first instance. What Galt, Reardon et al really said was “I enjoy my achievements for their own sake and I am also happy that they can benefit society, all I ask is that you don’t condemn me for it. And if you try to appropriate it I’ll just opt out; you can’t in fact ‘order me to think’”. (Sorry now I guess you’ve struck a nerve.) So I would say in that sense liberalism *ensures* adverse selection.

    Have to say on “why wouldn’t the refusal to provide transfers…constitute “vote-buying” from the people who would have to finance the transfers” – sure but the electoral math works much better to take from the few and give to the many.

  61. 61 61 nobody.really

    [T]he electoral math works much better to take from the few and give to the many.

    Tell that to K Street; lobbyists generally earn their bread by taking from the many to give to the few (and generally the wealthy). Case in point: the latest farm bill.

    Some policies that help the majority are championed by an elite that will benefit from them. (That’s why food stamps is administered by the Dept. of Ag rather than HHS: The bill was drafted by Big Agriculture, which wanted to expand the market for food.) But “helping the majority” is only window-dressing for the promotion of a narrow, private interest. Hey, that’s how politics works. It generally requires extraordinary circumstances (the Great Depression; the Great Recession) to empower populism to overcome the control by the elite, resulting in programs designed to help the majority at the expense of the elite.

    True, populism is a threat to the general welfare. For most people, however, it is far from the greatest threat. But the lucky few who confront no other threats to their welfare have the leisure to obsess about how vulnerable they are to populism, and how demonized they are by those ungrateful “You didn’t build that!” Democrats.

    Ironically, it is the Republicans that have unleashed the electoral power of populism in the form of the Moral Majority voters, and now the Tea Party. (Substantial overlap in membership here.) Trying to ride the tiger, they are now being devoured by it.

    [T]his is not about things like infectious disease or starvation. Nobody that I know has any issue with paying for a CDC or the concept of providing food to the needy. Neither is it about anarchy: job #1 for govt is protecting us from oppression internal and external….

    Ok, let’s start here. Gov’t spends money to fend off disease and starvation, and to repel oppression by others. Gov’t spends money on boondoggles and corruption. And government runs a deficit. Who should bear the burden of the deficit?

    John Galt says, “I disapprove of paying for boondoggles and corruption, so I withdraw my contributions to this wasteful, corrupt government. I’ll leave society – or, at least, I’ll elect people who will reduce the taxes I’m required to pay for society.” That’s fine for Galt; what does that do for the poor, sick, and oppressed when government collapses under debt? As between two innocent groups – 1) the rich, or 2) the poor, sick, and oppressed – which of them is in the best position to bear the cost of waste and corruption? Which is in the best position to FIGHT waste and corruption?

    “Oh, but I could withdraw all/some of my financial support and government could continue to provide essential services by simply eliminating waste and corruption.” Great; how, exactly, will the poor, sick, and oppressed do that, if the John Galts of the world can’t?

    What do we observe when people complain about too much government spending?
    1. We get the sequester. This has reduced spending on special education, education on Indian reservations, subsidies for foster parents, legal aid for the poor, housing vouchers, etc. These policies reduced investments in public goods such as research, infrastructure developments, environmental clean-ups and enforcements, food inspections and triggered the release of certain incarcerated people. They also slowed criminal prosecutions (burdening presumptively innocent parties) and triggered the release of some convicted people, including at least ten Level 1 Offenders held by Homeland Security. Plus the sequester impaired various programs that trigger economic development.

    2. We get the shutdown. This reduced subsidies for day care and Head Start, hurting working-class parents and their kids.

    3. We get the farm bill (still pending). This would eliminate food stamps.

    What makes this an appropriate means to fight waste and corruption?

    In short, if you believe that everyone has a duty to support a basic safety net, then your options are 1) accept that some level of waste and corruption is an inevitable part of a safety net, 2) engage in the democratic process to fight waste and corruption, or 3) build a substitute safety net. But simply withdrawing is NOT a legitimate option; it’s just shirking a duty.

    When someone creates “wealth” – i.e. producing ideas or things that make our lives better — that *is* the payoff for having designed a system that allows them to flourish. That’s where to me it seems a non-starter to come back and say “because we did something that was in our interest that also happened to work out well for you, we get to assert a greater ex post interest in your success.”

    Two arguments about the legitimacy of progressive taxation.

    1. Imagine a society of three people: X earns 10 and requires 1 to survive. Y earns 2 and requires 2. Z earns 0 and requires 5. Devise a taxation system that provides a social safety net for all but doesn’t rely on progressive taxation.

    Once you concede that people owe some duty to support a social safety net, you pretty much concede the need for progressive taxation.

    2. As I’ve stated before, I’m not persuaded that Bieber is really responsible for much of the wealth he creates. I think most of the wealth is a function of the society into which he was born. Consequently I’m not opposed to redistributing much of that wealth.

    True, I don’t favor taxing people simply because they’re unpopular. A tax targeted simply on Jews is a no-no. Taking away the tax-exempt status of Bob Jones University, simply because the school advocated unpopular things such as segregation, was a no-no (although the Supreme Court thought otherwise). And, while I have no objection to calculating the cost that smokers impose on society and assessing a tax on that, I get suspicious when the legislature keeps going back to raise the tax on cigarettes in the absence of any new info about the social harm of cigarettes.

    But I don’t think we tax wealth/income simply because affluent people are unpopular. I think we tax it because it’s expedient and does less harm than most other forms of public finance. And yes, I suspect that people experience diminishing marginal returns for all things, including disposable income.

    Do it if you will and take the consequences of the ensuing “shrug”, but don’t pretend to justify it out of some sacrifice in the first instance. What Galt, Reardon et al really said was “I enjoy my achievements for their own sake and I am also happy that they can benefit society, all I ask is that you don’t condemn me for it. And if you try to appropriate it I’ll just opt out; you can’t in fact ‘order me to think.’”

    An argument about the practicality of progressive taxation:

    At some point Bieber might find that the amount of after-tax compensation no longer is sufficient to keep him producing. This is a practical consideration to bear in mind when setting tax rates.

    But here we encounter price theory and monopoly rents. Price serves two functions: It tells producers what things to produce. And it allocates goods/services among consumers. But sometimes people receive economic rents – that is, compensation above what is required to signal production; compensation that is derives solely from the need to allocate goods/services. LeBron James gets a salary of $60 million, plus bonuses of up to $18 million. This is the result of the bidding war for his services. But how much of that compensation could be taxed away before LeBron would say, “Screw it; I’m going to pursue my second-choice career as a [taxi driver? fashion model? Whatever.]”? I’d guess we could tax quite a bit before he’s quit. Most of his salary is economic rent.

    Now add to this the theory of backward-bending labor curves. As people get richer, they tend to consume more of every (superior) good – including leisure. At some point, LeBron will say, “I’m a multi-millionaire; why am I still busting my butt on this court?” and hang up his shoes. But if we taxed away LeBron’s wealth, it might well have the opposite effect as you had suggested: it might induce him to play a few more seasons, because he’d still be hungry.

    In sum, taxation tends to discourage the thing taxed. But I suspect we overstate the consequences – especially if we focus on the conduct of specific individuals rather than of societies. When Bieber decides to retire, do you thing popular music will suddenly experience a hole? Or do you think there will be dozens of other people ready and willing to perform, and dozens of other publicity machines ready to promote them?

    Moreover, labor economist Hershel Kasper argues that extrinsic rewards play a smaller role in the productivity of creative people than many economists might believe. Consider the apocryphal composer scribbling furiously as he sits in line outside the gas chambers, or the very real musicians performing as the Titanic subsides. If you had told these people that you’re going to double the taxes on their output, how much difference do you think it would have made to them? Arguably taxation plays a stronger role in influencing the behavior of people who invest in the creativity of others.

    Ok, I’ve REALLY got to get back to work now….

  62. 62 62 iceman

    OK still there?

    ‘populist’ isn’t just ‘popular’, but specifically advocating taking from the minority and ‘spreading it around’. Just a wild guess that groups that say “we’re the 99%” fall a bit more clearly under this banner.

    K Street = strong argument for limited govt. So is waste, abuse and corruption which I agree are inherent in & proportional to govt programs. However I’m not so quick to simply lump in “boondoggles” – i.e. entire projects that are wasteful, often ridiculous and usually publicly identifiable.

    Your position seems to be there’s good and bad spending but because we simply can’t cut the bad spending anyone who wants smaller govt is hurting the poor? 1) seems like a terribly unfair and defeatist argument – dare I say ‘hostage taking’? 2) the big hidden premise is that a) everything the govt does is directed at helping the poor and b) the only way to do that is through govt programs. You do mention a “substitute safety net” which is the opposite of shirking or withdrawing from the moral duty. Also note Galt doesn’t actually say “lower my taxes”, he says “I choose to work less”, and you can call that a bluff but not an illegitimate option.

    The other big line of demarcation is whether the Galts *create* wealth – in which case we’re already better off — or take it from someone (the populists’ dark hidden forces keeping us down…note Rand hated the idle privileged elitist like James Taggart as much as any plain ol’ collectivist). You want to answer maybe they created it but only with the benefit of “public investments” or “our system” so they owe extra. 1) But again if ex ante we invest in things *because* we believe they are true public goods (this applies to a utility-based justification for property rights as well), how does that justify a further ex post clawback on certain individuals in hindsight? That’s like saying we create a bingo night because we all want to play but when someone wins we say “hey you couldn’t have won if we hadn’t put this together so you have to kick back in”; 2) this esp. seems like a non-starter if the very reason our “system” produces greater growth is because we do less to interfere (other than rule of law); 3) you really think people like Steve Jobs wouldn’t do great things in any event? This is where it has to be more than “well we built that road by your house” as a blanket claim.

    Look, you can argue for progressive taxes for practical reasons (“that’s where the $ is”) – although in your example why does Z require more to survive? – and to serve compassionate ends, but I think the honest utilitarian agrees that fairness has little to do with it (“sorry but this is what my social function spit out”). Particularly based on double-dipping to fund public goods. Note ‘diminishing marginal returns’= “I’ve decided you don’t really *need* that”…where angels fear to tread.

    A lot of this seems to be about the fact that you think Justin Bieber is an ungrateful punk. Get over it. Again winning a lottery might seem unfair but it’s not unjust.

  63. 63 63 nobody.really

    Your position seems to be there’s good and bad spending but because we simply can’t cut the bad spending anyone who wants smaller govt is hurting the poor? 1) seems like a terribly unfair and defeatist argument – dare I say ‘hostage taking’? 2) the big hidden premise is that a) everything the govt does is directed at helping the poor and b) the only way to do that is through govt programs. You do mention a “substitute safety net” which is the opposite of shirking or withdrawing from the moral duty.

    Precisely. If you acknowledge a duty to provide a social safety net, then the fact that government is wasteful or corrupt does not negate that duty. If you find that the optimal way to promote the welfare of the poor is through setting up a substitute safety net, maybe that proves to be a viable way to fulfill your duty. For most of us, though, the most viable way to meet the duty is by striving to make government better.

    And it is far from clear to me that “cutting spending” in the abstract makes government better. Cutting specific aspects of government may well be warranted. But indiscriminate cuts? Not so much.

    I’ll grant you, this is hard – and “hostage-taking” is a dynamic, as we’ve seen. If I make a commitment to vote for every social program, then every loopy legislator can know that my vote can be bought if they just toss in a trivial amount of social spending. No, life is full of trade-offs. At some point I’d support cutting programs I favor if it also involved cutting enough spending I hate; indeed, some people characterize the sequester this way.

    But in any event, simple withdrawal is NOT a viable option; it’s just shirking a duty.

    Also note Galt doesn’t actually say “lower my taxes”, he says “I choose to work less”, and you can call that a bluff but not an illegitimate option.

    If you acknowledge a duty to provide a social safety net, but instead of doing your share you “choose to work less,” why is this not an illegitimate option?

    Note ‘diminishing marginal returns’= “I’ve decided you don’t really *need* that”….

    I’ll concede that, if you’ll concede ‘rejecting diminishing marginal returns’ = ‘I’ve got what I need, and I’m indifferent to whether anyone else does.’

    True, the arguments for interpersonal comparisons of utility are not airtight. I have no authority to show that pain caused by WWII was greater than the joy Hitler derived from causing it. So I’ll assert it without authority.

    And if YOU need an authority for this proposition — feel free to cite me!

    The other big line of demarcation is whether the Galts *create* wealth – in which case we’re already better off — or take it from someone…. You want to answer maybe they created it but only with the benefit of “public investments” or “our system” so they owe extra. 1) But again if ex ante we invest in things *because* we believe they are true public goods (this applies to a utility-based justification for property rights as well), how does that justify a further ex post clawback on certain individuals in hindsight? That’s like saying we create a bingo night because we all want to play but when someone wins we say “hey you couldn’t have won if we hadn’t put this together so you have to kick back in….”

    A lot of this seems to be about the fact that you think Justin Bieber is an ungrateful punk. Get over it. Again winning a lottery might seem unfair but it’s not unjust.

    Hmmm. Pretty much every bingo game I’ve ever seen since leaving grade school has been based on the premise that the winners don’t keep all the money; the people who create the bingo night keep a share of the proceeds.

    Several arguments favor redistribution:

    1. Restitution. To the extent that someone has done something wrongful that transfers wealth away from X and to himself, there is an argument for transferring wealth away from him and back to X.

    2. Unjust enrichment. If Y, though blameless, profited at X’s expense, it may be desirable to transfer some of that profit from Y to X.

    3. Social goal of creating social safety net. The desire to provide for those who lack typically entails taking from those who have (in abundance).

    4. Kant’s categorical imperative (“Adopt no policy that could not, in principle, be made universal.”): Society requires resources for maintenance. People vary in their productivity. Some people produce less than they consume; some people produce more than they consume at the margin, but less than the average per capita cost of maintaining society. If society is to continue, others must contribute more than the average per capita cost of maintaining society.

    Note that this last argument is not personal. It has nothing to do with animus. It has nothing to do with “you took that” or “you deprived someone of that” or “you didn’t make that” or “you’re an ungrateful punk.” Kant’s categorical imperative is an ends-oriented argument, as all ethical arguments are. People are free to reject it, and often do – but they signal their indifference to maintaining the society from which they came. In essence, they signal that they care more about winning a given hand than about the preservation of the game that makes winning possible.

    Look, you can argue for progressive taxes for practical reasons (“that’s where the $ is”) … and to serve compassionate ends, but I think the honest utilitarian agrees that fairness has little to do with it.

    I have difficulty judging fairness abstracted from any larger context. If you’d like to discuss the fairness of any given system of redistribution, please bring me an explanation of the fairness of our current distribution. Until then, I fear I lack a context in which to understand the discussion.

    Tomorrow morning a woman will rise early and walk miles with a jar on her head. She will stoop by a river to fill the jar with contaminated water, and then walk miles to return to her home – all to provide her family with some water for the day. Tomorrow morning another woman will turn on the tap and enjoy an almost limitless supply of clean water – but be compelled to pay taxes to support of this water supply. Some will say that the burdens on one of these women are unfair; some will say the burdens on the other are unfair. These statements will reveal little about the women. They will reveal much about the speaker.

    [I]n your example why does Z require more [resources than X or Y requires] to survive?

    He has Lou Gehrig’s Disease. He’s in the witness protection program. He’s the president of the United States and society has decided to provide him with a large staff so that he may execute his duties on behalf of the public. Whatever.

    The point is, people differ in their needs. Ayn Rand’s literature seems devoid of heroes who have needs; they tend to be physically fit young people with no dependents. And libertarianism may work great for people in this category. But societies have to deal with people who HAVE needs, and sometimes great needs.

    If you acknowledge that 1) some people will need more than they can provide for themselves, and 2) we have a duty to provide some minimum living standard for all, then progressive taxation seems like a pretty likely conclusion. It’s been around since the ancient Greeks at least – and if they couldn’t figure a way out of it, I gotta suspect it’s here to stay.

  64. 64 64 iceman

    “…an ends-oriented argument, as all ethical arguments are.”

    Unless I misunderstand, this strikes me as a lollapalooza of a premise — there are also *process* principles which can very much shape our notions of the justness of an end-state distribution. Unquestionably the founders believed this.

    We agree on a practical necessity to fund a public safety net at some level with taxes that are progressive to some degree. I think nearly everyone recognizes a *personal* moral duty, although I note moral legal and people will have personal views on how to fulfill this so the public function is appropriately confined to what’s ‘necessary and proper’ to ensure subsistence. We’re unanimous on clean drinking water; incentivizing illegitimacy and general breakdown of family structure, not so much.

    I am also questioning some of the rationalizations for this. Recall someone objected to someone calling taxation stealing. But lacking a basis grounded in rights or fairness, that characterization does at least seem like a useful (if hyperbolic) reminder that we should think very carefully about what’s ‘necessary and proper’. It seems in this thread we’ve successfully moved beyond rights (“you didn’t build that”) or vague notions of fairness. To wit, in my example the bingo game is self-organized (as our govt was), and while they might take a cut from each card purchased to cover their costs, I’m interested in the argument for charging more for the winning card after the fact.

    On the ‘illegitimate option’, I was simply noting that you’re really going to get into telling people they are obliged to produce, i.e. assert a positive right to their labor and creativity? Again good luck with “I order you to think”. I feel like you’re still sidestepping the question of whether someone who creates wealth (product, service, process, entertainment) has already given us something irrespective of taxes. I.e. this is ‘categorically’ different from your #1 and #2 (which is “you didn’t build that”). I’m glad you feel #4 is not about “you didn’t build that”, and above I suggested #3 isn’t either.

  65. 65 65 nobody.really

    “…an ends-oriented argument, as all ethical arguments are.”

    Unless I misunderstand, this strikes me as a lollapalooza of a premise — there are also *process* principles which can very much shape our notions of the justness of an end-state distribution.

    Agreed. My purpose is not to disparage process principles (entirely), but to distinguish them from arguments grounded in ethics. I think of ethics as guiding us to do things that may harms our immediate self-interest, because these actions help maintain a system, and maintenance of the system is in our longer-term self-interest.

    Thus, we might look at a collection of “process principles” and find no fault with any of them in the abstract. But if we learn that those principles, when combined in unexpected ways, destroy the very system that facilitates implementation of those principles, that might suggest that there *is* a fault in the principles – even if we have overlooked it. Under that circumstance, it might become unethical to pursue the process principles – at least, to pursue them without regard to consequence.

    “The proof is in the pudding” is an ends-oriented philosophy. It’s also the foundation of empiricism.

    On the ‘illegitimate option’, I was simply noting that you’re really going to get into telling people they are obliged to produce, i.e. assert a positive right to their labor and creativity? Again good luck with “I order you to think”.

    Saying a person has a duty differs from prescribing a remedy. There may be no remedy – but that doesn’t mean there is no duty.

    I am also questioning some of the rationalizations for this. Recall someone objected to someone calling taxation stealing. But lacking a basis grounded in rights or fairness, that characterization does at least seem like a useful (if hyperbolic) reminder that we should think very carefully about what’s ‘necessary and proper’.

    Here we confront the conflict between individualism and socialism – not as governing philosophies as such, but as intellectual frameworks.

    Whatever the merits of individualism as a rallying cry, it has weaknesses as an analytical tool. Sure, our society valorizes solo initiative and achievement. Why not? It’s a cheap way to encourage socially productive behavior. But that does not render individualism useful for many analytical purposes.

    For many purposes I find social context more instructive that individualism.

    What relationship does the individual bear to his society? In brief, “from those to whom much is given, much is expected.” Society needs a certain amount of resources to perpetuate itself. The ability to generate those resources is distributed unevenly, and mostly randomly, among society’s members. Each of us, even though we did nothing to call ourselves into being, has been bestowed with certain assets (and certain liabilities). Not every member of society has received the same lot in life. As a society, we have the opportunity to use the assets of society to provide for society – but this will inevitably entail acquiring different resources from different members of society.

    True, individual custodians of talents may strive to hoard the benefits of the talents they hold to promote solely their own benefit; indeed, I expect that we all do this to some extent. As an extreme example, a person might choose to refrain from doing anything productive with his time and talents. These people will say, “Hey, I’m not hurting anybody.” And within an individualist given context, this may be true. Within a social context, not so much.

    I believe Landsburg was getting at some of these ideas in Fair Play when he talked about taxing TALENTS rather than the fruits of talents. Family court judges get at this idea when they calculate child support payments not based on a parent’s current income, but on the judge’s estimation of the parent’s potential income. Each of these arguments gets at the idea that a person should be free to use the talents under his control as he sees fit – but society should be able to exert the same claim on him, regardless.

    I feel like you’re still sidestepping the question of whether someone who creates wealth (product, service, process, entertainment) has already given us something irrespective of taxes.

    Forgive me. Short answer: I acknowledge that 1) things get produced through people, and 2) this productivity may well benefit people beyond those participating directly in the production, even beyond the taxes paid. I acknowledge that taxation is NOT the full measure of the social worth of any activity (nor do fines necessarily represent the full social cost of any activity).

    That said, the phrase “creates wealth” presumes a kind of moral responsibility or agency for an outcome. Imagine that there’s someone identical to Justin Bieber (or J.S. Bach) living in a traditional society in the heart of the Amazon jungle. He might engage in precisely the same activities that Bieber does – but because of his social context, his activities are unlikely to produce as much social benefit. Under this hypothetical, is it more useful to say the Beiber “creates wealth,” or the Beiber participates in a society that creates wealth? Each statement may be appropriate to a given context; the one does not negate the other.

    In sum, I don’t deny productivity. And I don’t concede arguments regarding which party may claim credit (or blame) regarding the productivity.

  66. 66 66 iceman

    I see a categorical difference in a case of someone who has taken an action (having kids) that gives rise to direct responsibilities or duties.

    But I think we’ve reached a juncture of sorts: even if I agreed that we can assert a theoretical claim on others’ reaching their productive potential (I don’t see how I can get there*), it seems to me the only way to actually pursue that is to allow them the freedom to do it – beginning with figuring out what that is — i.e. leading us back toward a minimalist state (consistent with a public subsistence-level safety net).

    *For example I don’t see what part of the principle would allow you at some point to say “ok you’ve done your part, now you can go climb Mt. Everest”, e.g. how does the duty allow for self-actualization and other important components of personhood?

  67. 67 67 nobody.really

    I don’t see what part of the principle would allow you at some point to say “ok you’ve done your part, now you can go climb Mt. Everest”, e.g. how does the duty allow for self-actualization and other important components of personhood?

    I concede the point.
    Here are the general frameworks I’ve encountered:
    1. Anarchy.
    2. Libertarianism: Government guards against fraud/coercion, but not much else.
    3. Libertarianism + safety net.
    4. Democratic socialism + enumerated autonomy rights.
    5. Democratic socialism w/o enumerated autonomy rights.
    5. Communism.

    I sense you’re at 3; I’m at 4. These two frameworks may not look so different in practice, but appear on opposite shores of a great divide: Does the state bear the burden of demonstrating that it is justified in using assets held in private hands, or does the individual bear the burden that the state’s actions intrude upon one of her enumerated autonomy rights?

    In practice, I suggest that the US is at 4. For example, during emergencies the state can commandeer my assets. And I lack the ability to seek redress in court for the state’s wrongful actions – except to the extent that the state grants me that opportunity.

    The Constitution and other laws grant me/acknowledge that I have certain autonomy rights; moreover, the 5th and 14th Amendments grant me equal protection of the laws. And, as a practical matter, my greatest safeguards against the state arguably come from Equal Protection + compassion; that is, voters tend to recognize that government poses similar threats to them as it does to me. To the extent that voters identify with me, they will be disinclined to put burdens on me that they are unwilling to bear themselves.

    Thus, we’re unlikely to get communism any time soon – not for theoretical reasons, but practical ones.

    First, voters value autonomy. True, few voters regard government as the sole threat to autonomy; most voters seem perfectly willing to regard disease, natural disaster, pollution, monopolists, prejudice, poor education, etc., as threats to autonomy, too, and are willing to grant government the power to combat these threats on their behalf. Thus, I’m not sure that I could ever draw a line saying, “My sphere of autonomy begins here and government may not proceed further, yea, though the sky falls.” Rather than a line, we have a constantly-negotiated trade-off.

    Second, voters value a good economy, and the perception/illusion of strong property rights generally help make the economy stronger. Thus, especially during periods of relative calm, people will be inclined to emphasize the power of autonomy. How much of that emphasis will remain operative during emergencies may be doubtful, but so what? People make most of their sunk investments during the calm periods, and it’s too late to pull out later, even if government changes the rules.

    This is a long way of saying that I’m not persuaded that I could articulate a theoretical level beyond which government could commandeer the assets in your possession. But as a practical level, government will be unlikely to commandeer more than the voters would approve of. And voters like the illusion of a vast sphere of autonomy, and the freedom to pursue dreams. Voters will want you to be able to go to Everest, because voters like to imagine that they might go to Everest themselves one day, and because voters want the tourism industry to flourish and make jobs.

    When I initially developed this outlook, I shuddered at its fluidity. If we lack a firm footing on property rights, why – we’re at sea! Now I’ve kind of embraced it — and I’m learning to sail.

  68. 68 68 nobody.really

    A lot of this seems to be about the fact that you think Justin Bieber is an ungrateful punk. Get over it. Again winning a lottery might seem unfair but it’s not unjust.

    Your statement suggests that you have a mental model designed to fit some kind of archetypical person. The Justin Beibers of the world are some kind of unanticipated freak event, a pure windfall, and society has no business designing itself to anticipate their existence. They are exogenous events, so rare as not to warrant a place within your model. Only spite and envy could drive anyone to focus on them.

    But what about people in comas? They’re the result of freak circumstances, too. Should society be designed to anticipate their existence?

    In contrast to your model, the existence of the highly productive and the highly unproductive are both endogenous to my model. They both have their place in the great bell curve of life, and it’s entirely fitting that society should be built in anticipation of both extremes.

  69. 69 69 iceman

    If “The Bieber” lives alone in a jungle, or chooses to only sing in the shower, he makes himself happy but neither adds to nor subtracts from anyone else’s well-being. To the extent he decides to sing where others can choose to hear and enjoy, he adds to the sum of happiness via voluntary mutual exchange, period, even if not taxed a dime. This is not confined to The Exogenous Bieb; we’re all somewhere on the spectrum in terms of our potential contributions; it’s not a model, it’s just life. But “warranting a place” in your model and “building society in anticipation of” the potentially productive is code for asserting a positive claim on their potential output, i.e. on a portion of their life. How can we not “credit” the singer for what is sung? Because we enjoy it we get to say “we built that too”? The “wealth” that is created here is the sum measure of our enjoyment from hearing it. If The Bieb amasses $ in the process it is purely a reflection of our willingness to share some of the surplus he gave us with him. How can this give us any further claim? As I suggested above, to me at best you are in fact lamenting a duty for which there is no remedy, to which I say “interesting” and move on.

    I will try to take comfort in your optimism regarding the enduring cultural value of the “American spirit”. However without the intended safeguards, your model recalls the famous (unattributed?) quote “democracy…can only exist until the majority discovers it can vote itself largess out of the public treasury.”

  70. 70 70 nobody.really

    If “The Bieber” lives alone in a jungle, or chooses to only sing in the shower, he makes himself happy but neither adds to nor subtracts from anyone else’s well-being. To the extent he decides to sing where others can choose to hear and enjoy, he adds to the sum of happiness via voluntary mutual exchange, period, even if not taxed a dime…. How can we not “credit” the singer for what is sung? Because we enjoy it we get to say “we built that too”?

    I fear I haven’t made myself clear. Let me try it this way:

    How much of the Beib’s productivity should we credit to the Beib, and how much to society? Conceptually, we could simply extract the Bieb from society and have him sing in a jungle. Let’s say that this represents his productivity, unaided by society. (This is, of course, a huge exaggeration. The Bieb didn’t invent singing, or Western harmonies and rhythm structures, or the English language, or…. He didn’t produce the food he has eaten. He didn’t create the public health structures that have brought him into the world and shielded him from disease until now. He didn’t invent the police and military that have protected him until now. Etc. But put all that aside.)

    How productive do you imagine a really talented, hard-working guy singing in a jungle, disconnected from the rest of society, is? What do you imagine his income would be?

    So, now let’s compare the productivity of the Bieb IN society to the productivity of the Bieb OUT of society. That should be a clue to how much of the Bieb’s productivity we should credit to him, and how much to society. Hard as it seems for you to accept it, the lion’s share of the Beib’s productivity is due to factors beyond the Bieb. Quite literally, he did not build that; we (society) did.

    But “warranting a place” in your model and “building society in anticipation of” the potentially productive is code for asserting a positive claim on their potential output, i.e. on a portion of their life.

    Ok, let’s eliminate any positive claim on output. How, exactly, would you pay for a social safety net? Why, exactly, should the Bieb (or anyone else) contribute?

    If you want to be absolutist about “no positive claim on someone else’s output,” then you pretty much have to abandon the safety net. If you want a safety net, you have to abandon the objection to making a claim out someone else’s output. I’m not seeing another path. The “libertarian + safety net” theory has not caught on much among libertarians because, well, it kinda lacks a rationale.

    In contrast, if you adopt the view that we are all stewards of circumstances we did not create, that some of those circumstances make us particularly needy, and that other circumstances make us particularly productive, you will understand societies need provide resources to those at the low end, and societies need to extract those resources from those at the high end. They’re just two sides of the same coin.

  71. 71 71 iceman

    Sorry been traveling – quick take – ironically in the example you’ve chosen, in order to amass $ The Bieb can live almost anywhere and all he requires is people anywhere in the world with Internet access. So who do we credit for that “social structure”? Oh yeah Al Gore. Perhaps that’s what Bach was lacking, but all it means is one can reach more ears. Of course Bieb didn’t do that, but to say we don’t credit the singer with the song at the end of the day just seems ludicrous to me – that is, if one views the wealth as resulting from voluntary transfers = a measure of how much enjoyment he has brought to others (I.e. given to not taken from so no residual claim).

    Personally I could justify a libertarian + public safety net combo on practical grounds, to make sure people don’t fall thru the cracks of private charity.

  72. 72 72 nobody.really

    [I]n order to amass $ The Bieb can live almost anywhere and all he requires is people anywhere in the world with Internet access. So who do we credit for that “social structure”?

    Who cares? Just so long as it isn’t the Beib, you have to acknowledge that the Beib isn’t the sole source of his own wealth. That’s the point.

    Perhaps that’s what Bach was lacking, but all it means is one can reach more ears.

    Well, no, that’s NOT all it means. The Bieb’s wealth also derives from a huge social infrastructure involving intellectual property rights, marketing, banking, etc.

    But the ability to reach more ears is pretty central to the equation. Bach never stood any chance to amass the kind of wealth the Bieb has – for reasons that are wholly unrelated to the talent and hard work of either man.

    [T]o say we don’t credit the singer with the song at the end of the day just seems ludicrous to me….

    Then say it; no one’s stopping you.

    [I]f one views the wealth as resulting from voluntary transfers = a measure of how much enjoyment he has brought to others (I.e. given to not taken from so no residual claim).

    And this is the fundamental blindness of libertarians: the inability to ascribe value to anything that doesn’t command a market price, and the assumption that things that command no price are the rightful entitlement of every person, even the people who contributed nothing to creating them.

    So, imagine you’ve got the Bieb in a jungle, singing his songs all alone: No income results.

    Now, imagine you’ve got him sitting in the jungle singing his songs with an internet connection. But also imagine that DARPA, instead of giving away the internet for free, charged people for using it. Thus, content providers would pay money to the feds in proportion to the amount of people downloading their stuff.

    Yes, this would be economically inefficient, because it would impose an incremental cost exceeding marginal cost. But would this arrangement cure your blindness and permit you to acknowledge that some share of the wealth generated by the Bieb could then rightfully flow to the feds?

    If so, how does the fact that the feds have instead decided to do the economically efficient thing – that is, NOT impose incremental charges on the use of the internet — cause this service to suddenly become worthless in your estimation?

    And if you can acknowledge the value of the internet to the Bieb, can you then see your way to acknowledging the value of other human creations such as intellectual property rights? Banking? The English language? Western music theory? Yes, it’s true that through the vagaries of circumstance, we pay no incremental cost to benefit from these things. Does that therefore render them valueless?

    Personally I could justify a libertarian + public safety net combo on practical grounds, to make sure people don’t fall thru the cracks of private charity.

    Good; now go the next step: Why should I care if people fall through the cracks? What leads you to the conclusion that compassion for the less fortunate is more than just a personal preference of yours, and that it justifies taking resources that are in the possession of others?

  73. 73 73 iceman

    Still having fun? Looks like we’re about to get archived…

    1) Now who’s being dogmatic, the person who’s comfortable being “out at sea” vis-à-vis property rights? For my part I’m comfortable presuming everyone wants to ensure that everyone else at least has access to the basic means of subsistence. Even if charity is a generally preferable route, I don’t have to be puritanical about it; I can say it’s not imprudent to have a backup plan in case of any gaps.

    2) Now you’re painting a caricature of libertarianism. What’s
    next, ‘economists only care about money?’
    I said price is A measure – namely of a portion of the value people get from those exchanges that happen to take the form of actual transactions. Its main virtue is being objective and comparable, but clearly there is much it does not capture. That challenge is fully shared by utilitarians as well.

    I understand your construct for Jungle Bieb, my point is you’re taking a 1-sided view of the transaction. By the same measure, those ‘undeserved’ $ also show that in one set of circumstances more people get more enjoyment from his “art”. So by what principle are *they* not the ones who collectively owe more by virtue of benefiting from what none of them “built”?

    I still think you haven’t addressed the notion that we invest in public goods because they benefit everyone *ex ante*, e.g. my bingo game. Is recognizing intellectual property rights a ‘gift’ from the state? Arguably this is just an extension of its first function. Similarly since you seem to be arguing that not taxing internet usage is actually the better policy, why then would particular persons be doubly indebted ex post to the state for doing the efficient thing? I would think it more likely some are obliged to provide compensation if they benefit from a policy that is suboptimal for the many.

    Note it is possible to construct an argument for funding certain public goods like defense progressively based on benefits received – e.g. the more assets one has the more one benefits from precautions against having them taken away. Your examples have involved not protecting things but how they’re initially derived.

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