As is no doubt obvious my economic education merely covered the basics at the undergraduate level. However I start with the basic premise that economic activity is not an end in and for itself but has the ulimate goal of improving the lot of people everywhere.
In my view that have to be serious shortcomings in a system that provides an incentive for businesses to shift work from a place where that work provides an adequate living for the worker to a place where the same work allows the worker to live in squalor. And this being done so the relatively affluent you and I can buy shirts for a few dollars less.
Call me an impractical dreamer but I get very annoyed when the sole answer to what I see as a serious drawback is answered by the chant, “Trust the free market, it will solve everything if you just give it enough time.”
The free market has had a couple of hundred years and has not yet “solved” the problem of wildly unequal distribution of its supposed benefits and nobody’s personal experience with another system is going to convince me that a better job can’t be done.
There are many things wrong with this paragraph. First, you make the flat-out claim that people do not consider the cost of gasoline over the life of their vehicle, and yet you provide no evidence that this is the case. And it’s clearly wrong. People DO consider that, or else auto makers would not bother making cars that were any more fuel efficient than the CAFE standard.
One of the most popular vehicles in Canada is the Toyota Echo. I can guarantee you that the only thing that makes this ugly box popular is that it gets fantastic gas mileage.
Or think of it this way - if an auto manufacturer offered two vehicles that were identical in every way, save that one got better mileage than the other, which one do you think people would buy?
People DO consider the cost of gas, except for those who place more emphasis on other things. So the market provides both Echos and Dodge Vipers. And that’s the way it should be, and it’s a wonderful thing. A government-imposed ‘solution’ is to place the government’s idea of what people need against what the people themselves decide they need. A one-size-fits-all solution. But the problem is, people’s needs and desires are wildly divergent, and any mandated solution is going to stomp on the desires of someone.
Second, your use of the term ‘market failure’ is wrong. A market failure is a structural flaw which prevents the price system from adequately reflecting the supply/demand relationship for a product. What you’re saying is that you don’t LIKE the choices people are making, so you think that’s a failure of the market. It’s not. Just as having your favorite politician lose an election is not a failure of democracy.
You assert the belief that gas prices will be much higher in 5-10 years as fact. This is simply not the case. Gas prices may be higher, or they may be lower. In the 1970’s, everyone was predicting constant increases in gas prices forever. It was accepted as a given. But in real dollars the price of gas dropped steadily for the next two decades. So we don’t know.
But let’s say I’m a rational consumer who wants to factor the future price of gas into my purchase decision. What do I know as of today? I know that gas will *probably be more expensive, but it might not be. But I also know it’s not likely to be wildly more expensive. It might go up a buck a gallon, but it’s not going to go up to $20/gallon. If I’ve already decided that the price of gas is a trivial factor in my purchase decision, then when considering the long-term value of my investment I’m simply going to pay more attention to things like depreciation. The difference in annual depreciation on a vehicle can be more than 5-10%. That’s a difference of thousands of dollars.
And speaking of which - how do you know that the market hasn’t factored the future cost of gasoline into the depreciation level of the vehicle? Or think of it this way - if someone with a magic crystal ball told the world that in two years gas will be $20/gallon, what do you think that would do to the perceived depreciation of, say, a Lincoln Navigator? Consumers will know that their investment will drop like a rock in value in two years, so they will choose a more efficient vehicle even if the price of gas were to remain the same for those two years.
The real problem here not that the market has failed, but that not everyone is happy with the overall direction of the market. Just like about 50% of the population will be unhappy with the results of the election in two months. But not liking the choices others make does not constitute market failure.
David Simmons said:
Capitalism is about the efficient allocation of scarce resources. That’s it. In a market economy, economic transactions take place whenever people decide that it is in their interests to trade one of their assets for another. Since individuals are the best judge of the relative values of the things they own and want, they are the best people to be making those decisions for themselves. The free market maximizes the efficiency of economic activity.
And to poor people, buying shirts for ‘a few dollars less’ is a BIG deal. There is nothing wrong with a system that produces the goods we need in an optimally efficient way.
The alternative is to have something like the british coal workers, who wanted to continue mining coal even when it cost more to mine than it was worth, because their jobs were their right. But forcing people to pay more for a commodity than they should have to so that you can maintain your job is nothing more than welfare for the able-bodied.
In short, I see everything wrong with a system that guarantees jobs at the expense of economic efficiency. Because all you’re engaging in when you do that is welfare writ large. If the government sets up tariffs to protect those jobs, all they are doing is taxing the people and giving the money to a favored group. This is a bad thing. And it doesn’t even save jobs, because in the end a less efficient economy creates fewer new jobs. All it does is protect the jobs of the politically powerful or the most vocal, at the expense of the common person. In fact, the people hurt the most by trade tariffs and other means of protecting jobs are the poor and lower class who spend disproportionate amounts of their income on the kinds of commodities we are talking about.
Call me an impractical dreamer, but I get annoyed when the sole answer to what I see as serious flaws in the government allocation of resources is “we’ll do it smarter than all those people who failed in the past”.
The market isn’t perfect. But government control makes things worse.
Nor will it. The market bears only a secondary relationship to what we consider socially just. The market guarantees that capital will move to those who are best able to use it efficiently. Since not everyone has an equal ability or desire to use capital efficiently, there will always be rich and poor. Just like in any group of students there will be ‘A’ students and people who flunk out. It’s the nature of life.
But this is indeed the tradeoff. Social justice is not optimized by the market. So government steps in to provide welfare, emergency medical care, etc. Just be aware that you can’t have your cake and eat it too. If you mess with the efficiency of the market for the purposes of a more ‘just’ society, accept that you’re going to lower the aggregate wealth and economic growth of the country.
To the extent this is true, it may be that such a trade-off will mean a slightly lower aggregate wealth but with 95% of the population better off than under the alternative scenario. That is the sort of tradeoff many of us think may be worthwhile.
However, there are some debates about whether there really even always is this tradeoff when inequality gets particularly pronounced. Look at the book “The Winner-Take-All Society” for example.
As for your general arguments about the market being able to decide better than government which technologies are best, I have a fair bit of sympathy for that point of view which is why I prefer to have things like taxes or CAFE standards to push the market to better reflect externalized costs but not to dictate the technology that the market should adapt. Unfortunately though, both parties but particularly the political party in the U.S. which is more associated with the free market seem to prefer the other approach because the business folks that they are catering to prefer to get subsidies rather than to have costs imposed upon them even if those costs are well-justified by market theory.
So why should anybody care if resources are efficiently allocated it the lives of the great majority of, if not all, people are not thereby improved?
Efficient allocation of resources is one of those academic phrases that is meaninless unless the reason why it is a good thing is for some purpose other than efficiency itself.
No there isn’t anything wrong with such a system unless we lose sight of the fact that the reason for efficiency is to ensure that resources will cover the need and will last so that posterity can have some too. And efficiency shouldn’t end with production but in my view should include distribution in such a way as to promote the general welfare, not just increase the share of those who already have a lot.
And the present admininstration’s concentration on the market side of the economy seems almost calculated to insure thatthe poor will always be with us.
Citing of past failures in particular cases doesn’t mean that we can say that nothing but a pure market system, which doesn’t exist, is viable.
Here again you seem to be making economic efficiency the ultimate goal. Efficiency for its own sake. Again, why should be worry about efficiency?
You mean that attempts to modify the market system hasn’t suited you so far. I don’t think you can say that therefore all future modifications will be bad.
And that is my main objection to a pure market economy. If we aren’t interested in promoting social justice by any means possible then why bother with any government at all? We can just live by tooth and talon like God’s creatures in the wild.
Social Darwinism in fancy language.
What an astounding revelation! I must go off and ponder on that.
Look, Dave, I respect your opinion and your point of view. I think it is most admirable to care about your fellow humans, and many people share that concern, Sam and John included (in spite of hard nosed debating tactics ).
I just wanted to point out that when people say things like “Let the market solve it” they don’t mean “Trust to big corporations to solve everything” so much as they mean “Trust individuals to make the decisions that are best for themselves”.
One thing to consider is that counting on people’s altruism is far less reliable then counting on their self interest.
As economist Adam Smith pointed out:
In other words, when we help ourselves, we inadvertently help others. (note that this applies to legitimate economic activity, and not criminal activity such as theft)
I mention Soviet Russia because, IMO, they failed to rely on that very thing. For the average Russian, there was little incentive to actually work, and all the incentive in the world to put your feet up and do the bare minimum. You couldn’t lose your job! You always would have a place to live! It was the law! No matter how hard you worked, you would almost never significantly improve your situation. Enough people put up their feet and productivity goes way down. And this is key. It is not the pay an individual receives that determines their standard of living nearly as much as it is the productivity of the overall economy in which they live.
In Russia’s case, I saw long lines for really basic goods like, oh I don’t know, bread. In this economy, the rule was “If you see a line, get in it!” You would get in a line and ask the person in front of you “What’s this line for?” and they would shrug. It was always a big surprise to find out that the line you were standing in was for a street vendor selling the Russian version of Pigs-in-a-Blanket (which, incidentally were very yummy). Sure everyone had a house, but every house was a small apartment that made our government housing projects look decadent by comparison. Want a car? Better have an uncle high up in the Party. If you were a Doctor you got preferential treatment; you could put your name on an 8 year waiting list for a car. All of these things stemmed directly from low productivity. When there is not enough bread to go around, it hardly matters that everyone is payed an equal wage.
Productivity is key. There are other ways to improve living conditions for your fellow human beings, but none will be as effective or as reliable as increasing the overall productivity of the economy. Even the poorest workers here in America, a place with a pretty productive economy, enjoy a standard of living which is orders of magnitude better than poor in many other countries.
It’s hard to make the productivity argument without sounding like a frothing-at-the-mouth, cut-throat, greedy capitalist. But arguing for increased productivity means taking such unpopular positions position as “American companies using cheap offshore labor is actually a good thing”. That’s not a debate I am getting into, and I do hope to improve the lot of those much pitied foreign sweat-shop workers, as well as any out of work americans that they replaced. When companies send work offshore, indeed out of self interest or greed, this allows those offshore workers to be more productive than they were before, and increases the potential productivity at home. The overall system, the world economy, gains productivity, and it is a small step to improving the lot of people everywhere (even though there are very undesirable small-scale consequences).
On preview, I see that Sam Stone argued better than I am able, if a little less diplomatically.
Is the free-market system the absolute best and greatest system there could ever possible be? Probably not. Is the free-market system better and more effective than anything other system we know about? Yes.
The point that Sam and I are trying to make, and I’ve made the same point in the minimum wage thread, is that we want the market to be efficient so that it produces the most wealth. While we obviously don’t want to blow ourselves up in the process, as long as no harm is being done to anyone, the market should be left on its own. To the extent that we need to provide a social safety net, then tax people appropriately, and ensure that the truly disadvantaged are taken care of. But, if you try to do that indirectly by tinkering with the market, then there is less wealth for everyone. Sure, this system will produce winners and losers, but there is no system that doesn’t.
You can either allow the “winners” to be the ones who most effeiciently and effectively make products, or the ones who have the most political pull. We are not arguing for the government to be on the side of business, just to be neutral. I don’t want special tax advantages for businesses or rich people. I don’t want to the government granting favors. I just want it to get out of the way as long as no one is hurting anyone else.
If we, as a society, decide that cars are creating too much pollution, then pass laws designed to minimimze the otuput of polluting gases. But gas comsumption, in and of itself, is not something that harms anyone. A 20 mpg car today puts out considerably less pollutants than a similar car of 30 years ago.
Oh, I forgot. After making the plea for the government to be neutral, I was supposed to cue **jshore ** to come in and tell us how neutrality actually favors big business.
On a more serious note, I’m not fully satisfied leaving the efficiency argument as I did (and as Sam did). While it’s certainly valid, it’s only one part of the equation, and maybe not even the more important part.
Economic freedom should be no less worthy of protection than political freedom. So long as no one is actually being harmed, we should be free to make our own economic choices just as we are free to make our own political choices. In these discussions, I think it is extremely important to delineate between governmental actions that serve no other purpose than to limit freedom, and those which actually are intended to prevent harm from being caused by one person to another.
Per the discussion about pollution and gas comsumption:
Pollution is harmful, and is rightly in the realm of government regulation.
Gas consumption, in and of itself, is of no harm to anyone, and is rightly left entirely up to the consumer.
To say that “we, as a society, have better uses for petroleum than to burn it as gasloline, therefore we should limit petroleum’s use for gasoline” makes as much sense as saying “we, as a society, have better choices for our votes than to give them to candidate X, therefore we should limit candidate X’s access to the political process.”
Adam Smith, as I understand him, envisaged a lot of relatively small producers, manufacturers and distributors. I’m not sure he ever considered a single entity that captures 60-70% of a market.
And he also stated something to effect that there has never been an association of producers that didn’t work to the detriment of the consumer.
I’m not and never have recommended a government directed economy so this business about total government control of the economy being bad is a straw man. I will add however that during WWII the US economy was controlled by the government and there was a rapid economic recovery. As far as the economy is concerned it made no difference whether the material was chewed up in battle or was dropped in the ocean 2 miles outside the golden gate. However, there was a strong political consensus in favor of that government control and I don’t think that is sustainable or even desirable over the long haul.
I don’t see how it can be argued that productivity is the key when the constant history of the economic system has been a wretchedly out-of-balance distribution of the benefits. Sam Stone appears to think that such an unbalance is right and proper as a reward for having been born with advantages in certain activities as opposed to the abilities of others.
The argument that the free-market is the best for the efficient allocation of resources. Based on the record that allocation appears to be for the purpose of greatly rewarding a few while everyone else gets the equivalent of crumbs from the table. I can’t really believe it is efficient to engage in a headlong rush to use as much of the world’s resources for current consumptin as possible in order to earn a big bonus for managers as year end. That isn’t the case with all companies in the natural resource end of things but it seems to be the aim of many of them.
And if a system that allows such widely different rewards for two individuals both working hard is the best we can think of and we don’t even try to think of any other way then the much heralded human intellgence is, in my opinion, a farce.
Obviously we want different things from the economy and I see little common ground for agreement.
I’m going to go ahead and respond to this, even though I know you’ve stopped replying to my posts. I’ll leave it up to the readers of this thread to decide which of us is evading the issues.
Did he? Do you have a cite? And, btw, just how many companies are there that control even 50% of a given market? You can’t just make up numbers to back up an argument.
Again, some considerable exageration. “Crumbs from the table” are what you got in the command economies of the Soviet Block, and you still get in the 3rd World, banana-republic type countries out there (I don’t even know how you’d classify the economic system they use). The vast majority of people in the US lead very, very comfortable lives.
It’s not how hard you work that determines that work’s value-- it’s how much other people value the fruits of your labor. A person who works real hard at something of little value to anyone else SHOULDN’T get, nor should he expect to get, much of a “reward”.
You seem to be saying that just because government interference in markets has not worked before does not mean that it cannot work. Ok. That’s logical, sort of. But you have to then explain how the controls you want will be different. The primary reason that government controls of an economy (or even parts of it) do not work is that a central body cannot hope to make the sorts of decisions that are made every minute of every day by the millions upon millions of market participants. And this is assuming that such a central body could aquire the same sorts of information that all of those millions upon millions of people process in making such decisions.
How will the government regulations, controls, subsidies, or other programs you support overcome this difficulty?
Do we? Are we so different that we can find no common ground? Can we agree that we would like to see as many people as possible in a position of prosperity? Can we agree that we loathe to see people in poverty and squalor? Can we agree that we should take care of the one inhabitable planet (that we know of) as it is somewhat irreplaceable? Can we agree that all human beings should be free to make choices in their own interest, so long as those choices don’t directly hurt anyone else? No common ground?
I think most of our differences lie in the methods we believe will accomplish those goals most successfully. We have different paradigms, and are trying to argue across them. Of course, maybe you would rather not find common ground and are just looking for a good argument, and that’s fine too.
No one economist or philosopher is omniscient. Although Adam Smith was insightful, the dude was around in, what, 1776? When america was born, there were no Huge Corporations. I study Smith and others to gain insights into their theories (which appear to have proven themselves well over time), not to deify them.
Yes, market collusion is bad! That’s why it’s against the law. Yes, monopolistic companies are bad! That is why we have anti-trust legislation. Monopolies should be, and usually are, broken up.
Is this the Adam Smith quote you were refering to?
If so, any interested readers may find the quote in its entirety here.
Soviet Russia was, again, only used to illustrate a point. And the point wasn’t “government control of markets is bad”. It’s that productivity of workers makes all the difference. Russia, arguably, was the only country in the 20th century in a position to go toe-to-toe with the USA economically. Large amounts of resources, comparable population size, and so on. My argument is that the most direct factor in the both countries relative economic prosperity, and therefore their standards of living, was each country’s overall productivity. If the soviets had kept productivity high, I argue they might very well still be in a position of world power.
Again, my point was not to say that anyone was arguing for government control. My point is “if not productivity, than what?”
During WWII, the government did have a lot to with directing the economy, but the workers were motivated. Productivity did not suffer, and was high in both the USA and Russia. Out of the two systems, the one which kept productivity high was the one that relied on its workers self interest to do so, and was the one which prospered economically to the benefit of all its citizens.
On the other hand, what countries did go toe-to-toe with America after WWII? Germany and Japan come to mind. One guess as to the productivity and efficiency levels of their workers. How else could these two conquered countries bounced back so quickly especially compared to Russia? How open and free are their markets relative to each other?
Or in other words, there is the bourgeois class, the “haves”, who by some miracle, and by no merit of their own receive most of the advantages and own all the means of production, while the proletariat, the “have-nots”, create the actual wealth of a society but enjoy few of the benefits of that wealth?
I hope this is not what you mean by a “wretchedly out-of-balance” distribution of benefits.
John Mace already addressed this, but I have to ask, compared to what? What system allocates resources more efficiently or even more fairly than a free market? Despotism? Socialism? Communism? Capitalism-Lite? Name a system and we can discuss their relative benefits.
Not all work is of equal value. Not all workers are created equal. Say person A works hard, while person B works exactly as hard but also works smarter than person A (and performing more profitable work as a result). Who deserves more compensation? Both people work equally hard, right? How do you decide? How do you measure? You already know my method of measuring who deserves more compensation (hint, it begins with “p”), but lets discuss your answer.
Finally (and I mention this so as to reconnect with the original debate question), I disagree that there is a headlong rush to consume the worlds resources (although I think that there are many things worth protecting, and deserve better protection, environmentally speaking). For oil, there is high demand which will last as long as there is enough supply to keep oil relatively affordable. But the real demand is not for oil but for energy. The secret of energy is this: we’ve got oodles. I look forward to the day that a cleaner form of energy will eclipse the use of fossil fuels, and I believe I will live to see that day. There are some really cool technologies being developed and if even only a fraction of them ever come to market, the have enormous potential. If high oil prices bring this day closer, hey, power to high oil prices! If scientific advances make the competing technology cheaper to the point of economic viability, hey, power to the scientists! What makes me so confident that an environmentally sound energy source will be developed and actively marketed by industry once it becomes economical? It’s in their self-interest. It’s in the bag.
No, I don’t want endless argument. However, when the statement that there is something wrong when to some $100 million is walkin’ around money while others who also work struggle to make ends meet and then have their job moved overseas is always met with the response that sooner or later the free-market will take care of it it would seem we are in a loop. That way lies madness.
Economists who are trained in the free-market economics are like most professionals (and I was in a professional carreer before retirement so this applies to me also] who see things from inside a pretty rigid box.
Well, I don’t know what you mean by “early hybrids” but I believe the Prius was the first to be introduced in the U.S. in the 2001 model year and my impression is that battery life is expected to be considerably longer than 5 years. (And, I believe there are some of these Prius’s out there which have already racked up over 100,000 miles.) The 2004 Prius comes with an 8 year / 100,000 mile warranty on all of the hybrid-related components including the battery. They also say “hybrid vehicle battery expected life is 150,000 miles based on laboratory bench testing”.
One of the reasons the battery can last so long is that it doesn’t tend to go through deep discharge cycles. In fact, I haven’t seen mine go below half-charged and it spends most of its time at about 3/4 charge.
True, it is unfortunate that there is such a gap between rich and poor.
But what would be the best way to redistribute that money? Should we directly seize the wealth from the hands of the wealthy? How can we do so (in the USA) without going counter to the freedoms the country was founded on? How would this solve more problems than it created?
Should we encourage rich folks to contribute to charity? Many do already, and that is indeed admirable. Just look at any organization with the name “the _______ foundation”. These are usually named after a significant benefactor. But, to me, their sense of altruism is, at best, unreliable. Encourage charity, sure, but don’t count on it.
Should we encourage those with wealth to invest, and create new businesses, which would create jobs, create innovation, create competition and other good things? Now we’re getting somewhere. This is already happening.
How do I know? If the rich just hoarded their money, the money would dwindle. Inflation would make these fortunes worth less and less. So if the rich are smart, they will seek to keep ahead of inflation by using their money to earn money. Money doesn’t just multiply itself, so they must seek some sort of opportunity to generate more. Opportunities like new business ventures, investing in startup firms, even purchasing government bonds. All of these things have the unintended benefit of helping others, whether by creating jobs or by funding the operation of our government.
Not quite so warm and fuzzy as charity, but more reliable for sure. And the wealthy only benefit if their investments actually do some good. If the new business startup fails, it hurts both the employees and the investors.
However, there are situations where the system can be abused. Outright theft or deceptive business practices, market manipulation, insider trading and the like are harmful to the economy and illegal (rightly so).
Yes, it sucks to be at the bottom of the economic scale, I know, I’ve been there. That’s why I help build houses for Habitat for Humanity. That’s why my wife volunteered at the food bank. I believe in helping people. I believe in putting my charitable inclinations to some concrete result.
Incidentally, I am a Chemistry major, but among my many interrests (art, charity, the environment) is economics.
I meant early development models. When I was following electric/hybrid development, battery life was a big problem. But battery technology has advanced dramatically in the past ten years.
Which is why I said I think the Prius currently has a battery life of close to ten years. We aren’t disagreeing here. But my point was that we still don’t really know what the long-term cost of operating a hybrid is, simply because there aren’t enough of them around, and they haven’t been around long enough for us to rack up a good collection of data points. There are a lot of unique components to a hybrid - regenerative braking hardware and electronics, power inverters, generators, electric motors, batteries… How will these stand up over, say, 20 years, which is probably close to the average lifespan of a car these days?
I’m not saying that it WILL be bad. But not knowing exactly means you need to factor in some sort of risk premium to the cost of the vehicle. Perhaps not much.
Don’t get me wrong - I’m a BIG fan of hybrid technology. I think it’s the wave of the future. And it doesn’t have to just go in small econo-cars. The hybrid Escape is supposedly quite a nice vehicle. There are also radical hybrids like the Mitsubishi Eclipse hybrid, which had something like a 270HP gas engine and another 180HP in electric power, giving it supercar performance while still getting 25-30 mpg. Great stuff.
But increasingly the jobs created are not US jobs. The census report on such matters that is just out states that average US income declined by $1500 and 1.5 million more families slipped out of the middle economic class. Whenever the administration is criticised on economics back comes the answer “1.5 million jobs created.” What we need is the income change, plus or minus, that resulted from jobs created vs. jobs lost. The $1500 decline is a clue but one that is easily obfuscated as to why there was a decline.
And as far as “funding the operations of our government,” according to the Congressional Budget Office the Bush tax program has shifted more of the tax burden from the top 20% on the economic scale to the middle 60%.
I understand that tinkering with an economic system that sort of works is chancy. However when the history is that it works very poorly for a lot of people and the theories have so many exceptions that they can hardly be called theories it seems to me that some rethinking by those who semi-understand the system is called for. Economics is a lot more complex that Physics but by analogy, when a physical theory is contradicted by even a small fact there is sure to be someone poking around trying to find out what is really going on. Economists seem to just add another exception to the rule and charge on down the same old road.
And it is true that not all work is of equal value. However, I believe that anyone that works full time ought to be able to live and raise a family on the pay. For example, doctors are highly valued but it seems to me that those who collect the garbage and run the sewer system make at least as great a contribution to the general public health. Not that a plumber for the sanitation dept. should make as much as a highly skilled doctor but the disparity seems to me to be a little much considering that the sewer worker can affect the health of thousands while the doctor affects public heath on a retail basis.
I think I’ve had my say, and since this really is a hijack of the thread I’ll just quit now.
NPC:True, it is unfortunate that there is such a gap between rich and poor.
But what would be the best way to redistribute that money? […]
Should we encourage those with wealth to invest, and create new businesses, which would create jobs, create innovation, create competition and other good things? Now we’re getting somewhere. This is already happening.
Yes, but the trouble is that it isn’t working. That is, income and wealth disparities are continuing to grow, not just because the rich are getting richer (which in itself doesn’t bother me) but because the non-rich are getting poorer. Look at the recently released census data about the declining median income, for example.
If you are really serious about decreasing the gap between rich and poor, you have to face up to the fact that your “trickle-down” solution is not actually having the desired effect. Instead, the gap between rich and poor goes on getting wider.
I guess that fact doesn’t bother me so much. If a job is created in India, good for India! I like Indians! Are we citizens merely of the US or citizens of Humanity? What’s wrong with non-US jobs being created? Is a US life somehow worth more than an Indian life? Or, more acurately, is one life in the US worth four lives in India? I just don’t see anything inherently wrong about creating jobs overseas. (As for actual working conditions, different issue.)
My trickle-down solution? I invented it? No, no, MY solution, as I said before was to* “…help build houses for Habitat for Humanity… …my wife volunteered at the food bank. I believe in helping people. I believe in putting my charitable inclinations to some concrete result.”* That’s MY solution. I PERSONALLY help people in need when in the position to do so. That is what I do.
But how can I expect anyone else to do the same? I can’t force anyone to help… free country and all that.
If somebody’s serous about closing the gap (according to your post) they need to face up to those facts? Wow, it’s that easy, huh? Just face up to facts and its solved. Shit, howdy, you might be on to something! :rolleyes:
Seriously though, face facts, and then…? What is your better solution? Forcable redistribution of wealth?
Better yet, what would you do if you had millions? Give to charity? Lots of rich folks do. Use every last dime to “close the gap”? I doubt it. I would imagine that first and foremost you would look to your own welfare. How, then, can you expect anyone else to do differently?
NPC:If somebody’s serous about closing the gap (according to your post) they need to face up to those facts? Wow, it’s that easy, huh? Just face up to facts and its solved. […] Seriously though, face facts, and then…?
I see. I thought you were suggesting that “encourag[ing] those with wealth to invest, and create new businesses, which would create jobs, create innovation, create competition and other good things” actually would result in “closing the gap between rich and poor.” If that were your stance, you would indeed need to face up to the fact that increasing the emphasis on such “trickle-down” benefits in our antipoverty strategy isn’t actually achieving the desired result.
What I now think you’re claiming is that “trickle-down” may not work but nothing else would work better. I disagree.
What is your better solution? [Forcible] redistribution of wealth?
I don’t use “forcible” to describe the operation of constitutionally enacted tax legislation in a democratic society whose members are perfectly free to leave it.
To answer your question, I think a better solution is a mix of market activity, personal commitment to charity in the private sector such as you’re advocating, and legislated redistribution of wealth in the form of progessive taxation and tax-funded social benefits. Since our current mix of those ingredients isn’t narrowing the gap between rich and poor, but rather widening it, I think we need to throw in more of ingredients (2) and (3).
Better yet, what would you do if you had millions? […] I would imagine that first and foremost you would look to your own welfare. How, then, can you expect anyone else to do differently?
People with millions have plenty of money to “look to their own welfare” even after taxes are taken out in a moderately progressive tax system. Nobody is suggesting that they should be required, or even encouraged, to “use every last dime” to reduce income inequality. (Well, I guess Jesus Christ suggested something of the sort, but no legislator, even those who advertise their Christianity loudest, would dream of proposing that any such policy should be enacted in tax law today.)
What, by the way, does any of this have to do with the topic of this thread, which is oil prices and the future of cheap energy?
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