Watching GWB for 10 minutes was enough to convince me he was a dummy.
Politics is about what people like. Most people would not “like” the kind of people we need to run a society with this level of technology. Things can only get more screwy in the future.
Dal Timgar
Quite so. But it is also to increase the total output of the business.
I think we may be talking at cross pruposes to some degree. I am not trying to say that we must compare employees to the owner in all cases. What I am trying to get to is the benifit derived by the owner versus the benifit derived by an individual worker. If the government builds a road and the worker does no extra work then he gets no extra wages. If a business owner delivers more goods (or the same goos for less investmen, of course), then he earns more profits. That is, in both cases more input is required to earn more money. Or at least different input is required to earn more money.
I’m still not sure I follow your argument that the owner can derive orders of magnitude more benifit from the government infrastructure.
I’m once again confused. If individual workers produce more value for the business they will have a certain leverage to ask for more wages. If he buys bigger trailers, he needs drivers qualified to drive larger rigs to move them. He needs to work his loaders harder to move the same number of trucks in and out of the loading dock. He may need larger trucks to pull them with corespondingly more skilled workers to maintain them. And even if a particular worker does not benifit at all, doesn’t he benifit to some degree by the fact that he works for a larger company? Assuming he keeps his seniority through the expansion, wouldn’t his opportunities be better afterwards than before such an expansion?
I’m not entirely sure you can ignore the employee group. What we are looking at is the case where a particular business gains from some governmentally built infrastructure. The workers are able to drive more, faster, and safer. The owner is able to expand his business as a result. If the owner benifits more, it seems that this is merely a function of the fact the he has built a business.
If we think of the business as a lever, and the infrastructure as the pivot point, then we might see the person with the larger lever benifiting more from a better pivot. I’m not sure that the difference would be orders of magnitude, however, unless the levers were already different by orders of magnitude. I guess I am trying to discern the difference between government infrastructure imporvements vs. capital expenditures.
I hope I am not sounding snide in these questions. I am really trying to understand your point. If I mischaracterize your argument it is entirely through my own ignorance, in an attempt to portray my understanding of it.
Huh? No they won’t. If the extra value is purely a result of capital expenditure, they won’t have any more leverage at all. The leverage a worker has isn’t based on how much the owner will lose if the worker’s job isn’t done, but rather on how difficult the worker would be to replace. Now, you provide examples of where capital expenditure in conjunction with extra work/higher qualifications on the part of workers increases profit, and in these cases the worker will gain leverage. But that isn’t the case erislover hypothesized.
“A certain leverage” to ask for “more” wages is hardly the same thing as the increase in DW’s ability to accumulate wealth. In any event, I am certainly not trying to deny roads benefit everyone to some degree. It is, in fact, the distribution of benefits that is the concern, not that one person gets none.
I don’t believe this is necessarily the case, CDLs can go pretty far, but again, the point isn’t whether employees receive any benefit. Of course they will benefit some, we’d never get the roads built if people didn’t benefit. The question is to what extent will any individual benefit. The amount of work a worker can get done in combination with capital has not, to my knowledge, been a significant point in wage increases, unless that capital requires some special skill to use.
Yes, of course it is a function of that. But if he benefits more, shouldn’t he have paid more, proportionally speaking?
Well, there are two things that could be done here. One is increasing the length of the arm, the other is shifting the pivot point. From this, there are a number of conditions any particular change could make. The arm could only be increased in one direction, both directions, or the other direction; the pivot could move in either of the two directions or stand still. So, for one example, the side of the lever that represents the employee could increase as much as it increases for the wealthy man, but the pivot could move closer to the employee. Everyone’s leverage increases, but the wealthy man’s increases more. The length of the arm in total could represent the action of increasing the amount of wealth available, while the shifting of the pivot represents the balance of power. First, we would expect the wealthy to have a longer arm, relative to the pivot. But we would not expect government activity to shift the pivot, if it is to be fair relative to taxation, it should increase the length of all arms. It is far from clear to me that most government services do this.
Here is an excel spreadsheet describing government expenditures (all documents available here). I urge you to take a look at government spending and consider which group–the wealthy or the rest–are net beneficiaries of each category in terms of individuals. Disregarding Medicare since it hardly represents working individuals, and adding in things like housing benefits, education, and community programs, we still don’t even touch military spending alone. At any rate, take a peek and see what you think.
As ever, pevert, you are far from sounding snide.
Well, he is using them to ship all of his products around and they are vital for all of his employees to get to work. He’d be billions of dollars poorer if he couldn’t do this.
Now, I won’t try to claim that his use of the roads is out of proportion with his wealth…i.e., I don’t think it is easy to use this argument to claim that taxes ought to be progressive (which, as erl points out, they are not very much anyway once you take the entire tax burden into account) … It is just too damn hard to separate out who derives what amount of benefit from what.
Well, yes, we all sure the same road system but Bill makes much more use of it in deriving his wealth than we do. It is definitely worth more to him.
Yes, but in our highly-interactive society, these people are also using lots of collective resources. And, the question still remains how those resources will be paid for.
I guess you seem to credit Gates with having some brilliant insights or taking some monumental risks that noone else was willing or able to. I personally question that is the case. If Bill Gates had never existed, I think someone else…or some combination of other people…would have filled in just fine. And, maybe even provided us with software and operating systems we didn’t hate quite so much (although I know a certain amount of this dislike is inevitable).
Well, I am glad to see you not just falling for this piece of conservative mythology about the 80s…Indeed, federal revenues did double in the 80s. However, this overlooks 3 important issues (one of which you allude to):
(1) Reagan hiked payroll taxes in his second term in order to keep the trust fund solvent further out into the future. And, indeed, the doubling in revenues was due to a somewhat more than doubling of revenues from the payroll tax and somewhat less than doubling from the personal income tax.
(2) This number is not corrected for inflation. [Remember that because of compounding, a moderate 7% inflation rate will produce a doubling of the cost-of-living in 10 years.] Once corrected to look at only revenues from the personal income tax and correcting for inflation, revenues increased by ~20% (as I recall, a bit more than 20% if you consider 1980 to 1990 and a bit less if you look at the years to, say, 1981 to 1991).
(3) Once you compare this to other 10-year performances, you see that it is very anemic. In fact, in the 1990s, the real increase in revenues was about 75%. I think in the 1970s it was somewhere in between (like 50%?)
Here is a site that does some more detailed analysis.
Well, no, I meant the infrastructural resources, as well as these other programs. Of course, one of the benefits the rich person gets from these programs is a stable society. I also consider capitalism to be a sort of Faustian bargain. I.e., I think that in setting up a society, in return for getting corporate law and all this stuff that it is argued (probably correctly) can lead to great wealth creation but also leads to great wealth inequalities, one can argue that we need to have a way of tempering those inequalities a bit. The wealth distribution that occurs in our society is a result of the rules, laws, and structures of our society. The money that you earn is not earned in a vacuum…It is the money that you earned within the highly-interactive society and society has the right to make claims on it as “society” through the democratic process sees fit. And, any way you look at it, those who are wealthy in our society are getting a hell of a good deal out of society as a whole. Only the Wall Street Journal editorial page writers and a few others seem to believe that the “lucky duckies” who pay little or no federal income tax are getting a fantastic deal.
Why? Can you name 3 or 4 other services which you pay more for simply because you get more for them than someone else does? The exact same good? I understand the argument that you would want the good more than me. So I understand that you would be willing to pay more, or that you would be able to pay more. But that you “should” pay more? I’m not sure I understand.
Actually, there are some other things. You are still thinking statically (note that you sort of assumed the load was static). The government could provide a comunal pivot and each of us use it with our own private lever. If the government builds a more substantial lever, puts it in a more advantageous place relative to the load, or makes it easier to use by, say, rounding the top to facilitate pivoting, then all of us will benifit. Those with better levers may benifit more, but all of us will benifit to the degree that we benifited from the previous pivot.
Actually, it would be more useful for you to come up with an example or two where you think rich people are getting far more benifit. I can’t seem to see one. Although I admit I haven’t crunched the numbers much.
I was using torque as the measure of comparison for the lever example since I couldn’t think of any other quality that would fit. I’m not sure what you mean by “looking at things statically.” I was just considering how much torque could be applied as an analogy for advantage/benefit. But really I think we only go astray with this.
Can you name a good or service that is allocated like the ones under consideration here?
I thought I already had. We were just discussing one of the two examples. Also, I think you stretch my point. I am not necessarily discussing an order of magnitude–a factor of ten–only a disproportionate amount, relative to their income.
But they are not (on an individual basis) using those resources more than any other citizen is able to. And your right. The question remains. I believe that you and erislover are trying to make the point that an individual’s wealth is not that individual’s wealth.
No no no no. Once again, I am not able to express myself clearly. I am not granting Gates with any mesianic qualities. Merely acknowledging that his achievements are his.
This is my point exactly. If Mr. Gates had not built Microsoft, someone else would have. Or some group would have built a similar set of corporations. The point being that what was created was a private concern. Built by privatly owned money and private citizens working together privately. And not some sort of public pile of wealth that we now need to divide up.
<hijack> Probably necessary also. They had to work with a specific set of hardware, and did not have the luxury of abandoning the older hardware until late in the nineties when it was much harder to do for reasons of tradition.
I’m not sure I understand you here. Inflation was much higher in the seventies (averaging 11.43%) and only slightly lower in the nineties (averaging 2.24%) compared to the eighties (averaging 4.82%). Meanwhile revenues doubled during all 3 decades. Can you site the numbers on this one?
One can, yes. But not without missing the whole point. I have still not seen a good solid reason why inequalities should be a problem
And here is the majority rules argument. I’m surprised you state it so explicitly. It amounts to the argument that a majority controls the aperatus of the state and therefore can do whatever it likes. It is very little different from the Fuedal argument that might makes right. 
I’m not so sure. I still think you have to assume a zero sum game in some way to come to this conclusion in the way you mean. Wealthy people in this country by and large provide a pretty good service for the reward they recieve. Namely our economy. I don’t know what you would be willing to pay those who create the wealth that we all partake of. I also don’t know how much less wealth you would be willing to divide up just so it could be equal. But to my mind the current arrangement seems pretty good.
Well, again, you have to assume a zero sum game to come to this conclusion. If we assume that there is a certain amount of wealth out there, rich people have more of it, but poor people don’t pay tax, then you’d be right that the rich people are getting a better deal. But once you grant that the activities of those rich people is what creates the wealth in the first place, the analysis might change.
Finally, I’m not sure this is the right thread to rehash our philosophical debate. I am very interested in the numbers vis a vie inflation though.
Ok, I may have misread an earlier post. If you are arguing that rich people get proportionally more advantage from infrastructure than poor people, then I can agree tenatively with that.
I was looking at work. The idea being that the comunal resources (the pivot) provides a context within which the citizens can apply their own resources (levers) to whatever load they need to lift.
Armies and Courts could be thought of as providing a similar sort of context. A space free of initated force, as it were. Roads and Sewers provide another sort of context.
The point being that the economy operates within this context rather than using it like a service, good or other sort of resource.
Well, sewers seem pretty similar to roads. As does electricity or telephone service. I don’t have any numbers, but the gasoline tax was supposed to provide a similar pay for service basis for road construction.
As I said, I’m not sure armies and courts are as directly analogous to a service. It seems more appropriate to think of them as a context or space within which economic activity takes place. The people who live in that space should certainly pay for such things. Perhaps even disporportionally. But I don’t think you can make the case that people’s money does not belong to them because it was made within such a space.
As always, however, I’m willing to be proven wrong.
Here’s my bite for this side road…
Simple answer, the wealthy do recieve a lot more benefits from a stable society. If the shit really hits the fan the rich have the most to lose in the most painful possible ways. Just look at France in the late 18th century. It is in the best interests of the rich to keep the peace.
This may be a form of economic blackmail, I don’t know. Any sword may have more than one edge.
Well, it very obviously isn’t completely his because if it was, everyone could keep all of it and then all the things we share communally like the military, the roads, the police, … could not be paid for.
They are only his within the context of the society in which he has achieved them. They are not his alone. He couldn’t have done it without us.
Look, the idea of private ownership of wealth in a capitalistic system with the corporate and intellectual property law written the way it is, etc., etc. was not handed down by God on High (although that does seem to be the general belief these days). It is a construction within our society. Private ownership of wealth has been deemed useful because it gives people incentives to work hard, etc. And, I am all in favor of it. But, the problem with libertarians is they take it to be some fundamental right and you run into all sorts of bizarre contradictions if you assume that because every freakin’ law you make as a society has wealth-distribution consequences. I could just as easily say that Paragraph 52, Section 123, Subsection 1.03, Subclause A of the corporate law code is stealing from me as you could say taxation is.
Well, revenues did not precisely double in each decade. Also note that the difference between 2.24% inflation and 4.82% inflation over ten years is the difference between a 25% increase in the cost-of-living and a 60% one. Anyway, the place to go for the data is the historical tables of the U.S. Federal Budget (warning: 2Meg PDF file). Table 1.3 has a column giving total receipts in constant FY 2000 dollars. Unfortunately, there doesn’t seem to be a table that has receipts from individual income tax in constant dollars, but Table 2.1 does give it in current dollars and using the “composite deflator” in Table 1.3, you can convert back to constant dollars. If you do that you find that in constant dollars, the individual income tax receipts went up by these percentages in these yearly periods:
1970-1980: +28%
1971-1981: +52%
1980-1990: +22.5%
1981-1991: +11%
1990-2000: +69%
1991-2001: +70.5%
[As you can see, it can sometimes be quite sensitive to exactly which years you choose…which is probably why the source I cited above made a whole graph of this sort of thing…except using 8 year instead of 10 year intervals.]
Well, I believe that rich people create this wealth within a society that gives them the means to do so. You tend to put a much higher estimation on their own individual contribution to this wealth creation than I do, particularly in the sense of how much wealth contribution we would miss in their absence. (And, this gets back to the whole “winner take all” factor that seems to pervade more and more markets…) Wealthy people will, of course, often tend to overestimate their own importance, although refreshingly there are those like Warren Buffett who actually seem to understand this quite well.
Probably true.
Now you’ve confused me again. Just because my money is mine, does not preclude me from using it to pay for things that I use. In fact, that is sort of the point. How does making the earnings of each individual belong to that individual prevent them from paying for things that they use communally?
Or do you mean that it removes the moral justification for taxes?
Again, you are too specifica and then too general. While it is true that Bill Gates could not have earned 50 billion dollars without the rest of humanity participating in an economy, it is not true that the rest of us would have had the exact same economy without him (or someone very much like him). In fact, I would argue that if we keep the same roads, sewers, armies and court system but give up the business men, it would be us who would be far worse off.
Lastly:
Yes, but a construction to acknowledge certain truths. Specifically, that all men are created equal and endowed with the right of life liberty and the pursuit of hapiness. The right of liberty implies freedom of action. Such a freedom implies a certain soverinety over the results of that action. That is, individuals are (or should be) free to act, interact, and own the proceeds resulting from it.
I doubt that very much. 
OK, you can have the last word in this thread if you want it.
zooI would submit that this may no longer be true. If the “shit hit the fan” millions upon millions of people would not longer have enough food to eat. Certainly such starving mobs would devour any of the rich people they came upon. But how much more likely is it that a rich person could flee such a situation than a poor person? I guess I am trying to say that it is in the best interests of everyone to “keep the peace”.
Well, I am absolutely inclined to believe that since those things count as infrastructure. In fact, pretty much every public or near-public good should be on that list. We could add common-property goods in there, too. I’d even be inclined to add some definitionally private goods like electricity there, too.
To the extent that some money only exists because of the context, I think that’s exactly the point.
Yes. It is the point that you and jshore keep trying to make. But you seem to keep ignoring the other side of that equation. You have to have activity and context for a given amount of wealth. That is, the wealth does not exist “only” because of the context. The context may effect the range or applicability of the proceeds from some activity, but it does not create the wealth.
You can have the last word too. If you want.
Reading your responses here, one would almost believe that erl and I were advocating for some sort of completely confiscatory or nearly completely confiscatory tax system. Actually, what we are arguing for is a modestly progressive one (although we may soon just be hoping for one that is not regressive.–I think that with the dividend and capital gains tax cuts, you are going to be seeing some very rich people paying taxes at a lower rate overall than middle class folks!).
We are not arguing that the wealth exists only because of context. If we were, there would be little justification for having anything short of a completely confiscatory tax beyond some amount, which neither of us has advocated.
Well, I can see how a sense of freedom of action and sovereignty and all could imply a system whereby one has private ownership of wealth…But, it seems by no means absolute to me.
Libertarian ideas are always presented within the context of what in solid state physics would analogously be called the “free electron approximation.” Such an approximation completely fails to explain phenomena in highly-interacting many-electron systems (phenomena such as superconductivity and the fractional quantum hall effect). Even in less highly interactive systems, the “electron-like objects” often behave quite differently from their an isolated electron, having a very different effective “mass” because they are no longer “bare” electrons but have some properties inheritted from the system as a whole. With all the caveats about making analogies between the hard sciences and human interactions, I do like this analogy for people in a highly-interactive society.
And, speaking of created equal, how does that work with the idea of ridding us of the estate tax completely? All are created equal but some are born into incredible amounts of money?!? The non-confiscatory estate tax was essentially already compromising heavily on equality of opportunity with the justification, as I see it, for giving people incentives to produce (by allowing them to pass on money and all its advantages to their heirs). Now, we’ve gone completely 100% in the direction of this, with equality of opportunity be damned!
I think this bears particular stessing.
Everybody knows what hard work is – it is the opposite of accepting untranslated wealth. Private ownership by definition is untranslated wealth. This ethic derives purpose ONLY from accepting the fruits of uncertainty. This directly contradicts your purpose for accepting it. You want to try and falsify your purpose? Try giving out cyanide capsules to all of your employees and agree to take one if any of them request it. Try doing some ACTUAL work, and then come back when you learn what it means to be an intentional being that does labor.
Well, you are starting to get close here. Here is an article in The Nation that gives you a good start at understanding how the government works for the wealthy, i.e., those who, among other things, have the means to fund the campaigns of our elected officials. One choice quote: