I must say I adhere to this definition of liberal.

Great Debates
141

pervert

Whoa, why would you even suspect this at all? I find it really, really, really implausable to think that some kid at McDonalds isn’t working as hard as Paris Hilton, for example. Money isn’t representative of anything other than what immediate assets you have at your disposal. It’s a black box. Who knows how you got it. For the purposes of debate I think we can assume it was obtained legally, but more than that I think is highly distortive.

Of course they do. This is true before taxation.

Can you construct this scenario differently, please? Are they purchasing stocks (and only paying taxes on the dividends or profits)? Are they creating a company? Are they sitting at a roulette table? Are they putting it in a mutual fund? Do you suppose the answer to this question requires a more thorough investigation into just what is meant by “investing”? Is it likely that any fiscally active government is going to encourage certain types of investing through a tax policy? :slight_smile:

142

Because it is. Remember when we talked about wealth being created with trade? The kid at McDs has less to trade (value is determined by free choice of the participants) than Paris Hilton. If he wants to make more, he has to do or produce something else. Do you have in mind some sort of economic activity which is legal, does not involve theft or fraud, only involves the free choice of the participants, and which is still in some way unfair?

To say that money is a black box takes us once again to the communist vision of reality. That wealth is a static zero sum game and the only thing we can do is try to share it differently. The fact of the matter is that this is simply not true. The money you have is a direct measure of the value of the work that you did to get it. No some absolute measure like the force of gravity. But a measure of the value that your work held for those who bought it. If you remove (or reduce to absurdly low levels) theft as the source of the money, then you are left with the “old fashion way” for a person to have it. They earned it.

There is no need to reconstruct the scenario. All I am saying is that the choice is not between earning 1,000,000 or earning 400,000. The choice is never like that. The choice is always between spending X amount or not. The possiblity of a reward (how likely and how much) are methods of evaluating the expense. When you impose a tax structure designed to keep people from earning money comenserate with the value they produce, you effectively impose an artificial limit to the risks people will take. You cut off the most inovative solutions to whatever problems come about.

143

It isn’t a matter of fairness, but a matter of objective measure. Money isn’t an objective measure of work. I could have gotten rich hugely by playing the lottery, for the effort of one dollar + going to the store, which I probably was going to do anyway. You could bust your ass for thirty years and live incredibly frugally to save up one million dollars. Someone else could have taken his 10,000 and made wise stock purchases which, when combined with a little luck, the grace of god, and a long-handled spoon, netted him one million dollars.

Did we all put forth the same effort?

144

It is not a measure of effort. The point is it is a measure of value. In each of the cases you sited the participants put their efforts into things which were valued differently than the others. That they did not all sweat the same amount has even less to do with it than any concept of fairness.

Have you ever heard the phrase “work smarter not harder”?

145

When I say it is not a measure of effort, I mean that it is a measure of the value of particular kinds of effort.

Just we don’t have to go over the apperent contradiction to my last post. :wink:

146

If you qualify that to be “potential likely future effort” I might agree with little reservation. As an indication of past effort (regardless of subjective value) it is a black box.

147

Well, no, it is not. If you assume that people steal their money, then what they spend it on and how much they spend may not correlate to the value they place on those things. However, if you assume that most transactions involve money that each party earned, then the amounts (that asked for and that paid) will correlate very nicely to a comprimise over what the item is worth. Ideally, of course, the price paid is less than the value to the purchaser and more than the value to the seller. They BOTH get richer.

I suppose it depends on what kinds of trade you think most people engage in.

148

I can’t assume anything, that’s the point. A guy hands me ten bucks in exchange for goods, I have no idea where he got the money. Legal, illegal, moral, immoral, luck, effort, or combinations thereof. I don’t know if he made his opportunities or fell ass backwards into them. I don’t know if his parents were wealthy or poor, politicians or bankers. There are many more ways to come into money than just working. There is no inference possible.

Ideally, yes. Ideally, no one would need welfare because nothing bad happens and there’s enough jobs for everyone, which—you might note—was the case before and after taxation as a mechanism for redistribution.

It only depends on noticing that there are many ways to accumulate wealth, only some of which involve a series of hard-won labor negotiations based on estimated skill at various tasks.

149

I mean it was the case that bad things happened and there weren’t enough jobs before and after taxation as a mechanism blah blah blah.

150

I’m sorry, I don’t want to sound snippy, but this is ignorant. We are talking about money, not mana from heaven. Yes there are many reasons why a person might have some (you might have forgotten forgery and alien intervention, BTW), but it is the height of sillyness to assume that means that all these reasons are equally likely. Or even that they are close to equally likely. Remember what I said about free choice. If a person has money and did not steal it, then he earned it. Yes, it is possible that he stole it, but in our society it is quite unlikely. Again, I’m sorry, but your assumption that all possiblities have to be taken into account is, in fact, an assumption.

I want to invoke the principle of innocent until proven guilty, but don’t want to take a tangent just now.

Just so we are clear, I want to address this sentence directly. No, there are not. You can either get money from someone voluntarily or by force. All of the “ways” you mentioned can be placed in one of these catagories. So, your refusal to assume innocence, amounts to an assumption of guilt.

I certainly don’t want to destroy the civil tone of our dicsussion, but I had a very strong reaction to this point. It took me several minutes to stop jumping up and down and screaming at the screen. :wink:

151

Boy, I go away for a couple of hours and there are like 8 posts up.

I think I’d want to think of the market not as a system for getting things to people who deserve them, but rather as a decentralized method of information discovery.

Take movies as an example. Lots of movies get put out every year. Some cost a lot to make and some don’t. Some make a lot of money and some don’t. Presumably, all the investors in the movies, all the directors, and all the actors thought they were making something that didn’t suck. Presumably they all worked relatively hard.

But value isn’t about how much money or effort you put in. (That’d be a kind of labor theory of value or capital theory of value) It’s about how consumers want it. Throwing your product (or labor) into the great maelstrom of the market is the way to discover how much value it has. (at the margin)

Taxes drive a wedge between the price consumers are willing to pay and the price producer perceive. Not only does this make both consumers and supplier worse off by making the price higher (for consumers)/lower (for suppliers), it causes less of the taxed good (or labor) to be supplied. This inefficiency is known as deadweight loss. A rule of thumb from Public Finance economics is that the deadweight loss is proportional to the square of the marginal tax rate. Thus taxing someone at a 20% marginal tax rate creates 4 times as much inefficient deadweight loss as taxing someone at the 10% marginal rate. (400/100=4)

If I’m not reading pervert and erislover right, you want to argue that the market is/is not meritocratic. The market only determines value after the fact, after the product has hit the market.

The market is a decentralized institution that produces value-signals. It is not under the control of any one person or even any small group of persons. The values it churns out are an aggregation of a startling array of information–more than anyone can master. Witness the tragicomic results of central planning.

Expecting the market to produce justice or to hand out rewards to the meritorious like some kindergarten teacher is an inappropriate and atavistic anthropomorphism.

Using the democratic process to decide to modify the market to try to hand out rewards in proportion to people’s merits is a Herculean task. It’s also a pretty scary and near totalitarian vision. The State is given the central role of judging merit, and sole power to determine someone’s material well-being?

I believe the Taliban had a Ministry for the Propagation of Virtue and Suppression of Vice. You might ask them for assisting in devising a scheme to align material incentives with moral merit.

152

Well, I think you said some things I was trying to say, only you said them much more intelligently.

I may not be understanding you guys correctly. I was not trying to argue only that the creator of wealth “deserves” it, that the market is a meritocracy. I was simply trying to say that individuals mostly earn their money given that they voluntarily trade values for it. IOW, a persons money is a measure of the value place on that persons labor or goods by others with money.

So, unless you believe that more people have stolen money than not, you must accept that voluntary trades are in fact choices made by individuals to dispose of their own lives. And digressing from a position of private property implies that they do not have a right to do so.

I’m not trying to say, necessarily, that the free market imparts moral validity on people with money. The moral validity was there without the market. That is, a person has a moral right to dispose of his own life. And everyone else has a moral right to trade parts of their life with each other if they so choose.

So, if a person decides he wants to spend his life covering himself in feces and selling tickets, he has a right to do so. If no one wants to buy tickets to such a display, that is their right.

I’m not trying to make a utilitarian argument.

153

pervert

I’m not assuming anything. There is no inference possible. We don’t get around it by statistics. Furthermore, I don’t care where the money came from during a financial transaction.

They don’t all have to be taken into account. There is no need to take any of them into account, and there is no justification for taking just one into account. I take none into account. I make no assumptions about the source of money from any particular individual.

I would replace “force” with “coercion”—we don’t often have protection rackets and enforcers anymore, you see—and then agree, but we were talking about where money came from. You brought up valued human effort of the person with the money, and I indicated this is just not the case necessarily. If you want to switch contexts at arbitrary intervals I’m fine with that. You’re right. Voluntary exchange and coercion are two general qualifications we can use for the way people get wealth. Now all that’s left is to indicate when an exchange is actually voluntary and not caused by coercion and we’re set.

My refusal to do what? Assume something I cannot demonstrate and isn’t necessarily true and wouldn’t affect the analysis anyway? Yeah, boy, I’m shifty like that.

154

Actually, I’m not especially concerned with value. In a context of non-necessity value is subjective. But I don’t believe the market is strictly meritocritous, no—at least, not in the sense that we may deduce things about poor and wealthy people from their economic status. I do believe that subjective valuation and free trade tend to align resources efficiently by ensuring those that can, can do.

This is impossible under certain conditions. If we assume that the market can handle all possible preferences, that the market will promote that which everyone wants, and that if aggregate preferences do not change then neither will aggregate valuations, there will always be a control group who can affect their desires (even if it is only one person). This is simply Arrow’s Impossibility Theorem applied to trade rather than voting.

And as far as I know would cost more than it would correct.

Agreed, because it trumps subjective value.

Well, honestly, they already had this. It is just a matter of trying to minimize this reach as best as possible.

155

What I mean by meritocracy is that we have a deductive biconditional where we can say: if you are valuable, you will be rewarded; and, if you have wealth, you were valuable. That is, from seeing a hard worker we can say “He will accumulate wealth” and that from seeing a wealthy person we can say “he was a hard worker.”

What I do think is the case: there is a trend to reward hard work, but it is ambiguous and highly contextual; I believe aggregate perspectives of this are overrated. So while we might be able to get away with saying that hard work has a chance to increase your wealth (see my current thread for perspectives on this), we cannot say that if a person has wealth they must have worked hard. The relationship, such that it is, is at best implicational, not biconditional.

156

This is very similar to what I was trying to say. We can’t say that he worked hard, or that his work has value to us, nor that it was particularly useful. However, in general we can say that the transaction was voluntary. And therefore the unknown third party valued that work to a degree comensurate with the amount of money in question. And of course, that the party under examination valued the money more or as much as the work he put into it.

You see, it is not necessary to imply hard work to accept the morality of wealth accumulation. It is only necessary to understand the primacy of freedom. That is, as long as the transaction was not coerced*, it was not immoral. Certainly it was not immoral to a degree that requires forceful correction.

*coerced: to persuade someone forcefully to do something which they are unwilling to do. I consider fraud a form of forceful taking of property. However, great need on one persons part does not impose a causal responsibility on anothers. So, if you take a job you hate because you would starve otherwise, this does not mean the your employer coerced you. (unless of course he caused you to be close to starvation (by force) in the first place)

157

Well here we go with responsibility and causation again. I don’t think we’re any more likely to advance the topic in this context (coercion versus voluntarism) than we were when we were discussing it in terms of fiscal responsibility.

158

Perhaps not.
I must have missed a context switch. Were we not talking about the nature of wealth and the need / desire / validity of reapportioning it?

159

Well in a rather roundabout way. We diverged for a bit on whether being wealthy meant anything other than that the person was wealthy.

It seems clear to me that money should only be transferred, in your opinion, by voluntary actions, and that fiscal responsibility should always fall, without fail, on the person whose needs are to be addresed, yet mysteriously don’t think that needs can eliminate voluntary choice. Where else is there to go? I don’t feel we will convince each other of either of our points about what constitutes voluntary actions / coercion, or why market failures occur that require redistribution to correct. Or, in fact, why we should even correct market failures. Perhaps market failures don’t even exist to you.

I just see nowhere else to go.

160

erislover writes

I’m perplexed by that statement. So, in the context of necessity (please explain what the context of necessity is) value is objective?
I would claim that value is always subjective.

When you respond to my comments about a State that judges merit and hands out economic resources in proportion to it, you say

I’m also confused by this. Do you mean simply that that the State engages in an usurpation, overruling individual subjective value with State-dictated subjective value? Or do you mean something different?

I can’t speak for pervert but I myself would definately concede there are market failures. Public goods and externalities being the most amenable to state intervention. Imperfect competition and asymmetric information are also market failures, but less amenable to state intervention, IMHO.

My Hymn to the Market was not intended as a theoretical one to apply to all economies and their sub-markets at all times, but rather to apply most of the time to the macro-economy of something larger than a city-state in an industrial/post-industrial setting.

A one-factory mill town isolated deep in the Appallachians or a single financial market probably can be dominated by one firm or a small group of individuals. The exception, rather than the rule, I would claim. Especially given any reasonable anti-trust policy.

I’m not quite sure what you mean by these two conditions. Please expand?