A Philosopher's Blog

Disparity

Posted in Business, Ethics, Law, Philosophy, Politics by Michael LaBossiere on May 30, 2012
Image representing Mark Zuckerberg as depicted...

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While the economic meltdown did considerable damage, two interesting side-effects were that it led to serious consideration of economic issues and gave rise to a loose movement critical of business as usual. Not surprisingly, one core point of political and moral concern is the income inequality in the United States. While such inequality has always been present, what has made this an ever greater concern is that fact the disparity has significantly increased.

While income has been increasing in the United States, it has been especially great for the top 1%. Their after-tax income increased 275% from 1979 to 2007. This is in sharp contrast with the increase enjoyed by the other economic classes. The next economic class, the top 20% (excluding the top 1%) had a 65% increase in earnings. Those in the bottom 20% also saw an increase, but this was only 18%.

Given that all the classes saw an increase in after-tax income, it could be wondered why there might be any ground for concern. After all, if everyone is making more, then things would seem to be good.

The obvious reply is, of course, that while everyone is (on average) getting more, some people (the 1%) are getting very much more. In terms of income share, the lower 80% saw a decline of 2-3 percentage points while the folks in the top 20% enjoyed an increase of 10 percentage points (thanks mostly to the gains of the 1%).  This does seem to provide some grounds for concern.

To use an obvious analogy, imagine a business. Suppose that everyone got raises, but Sally(already the highest paid) got 275%, Bob 65%, and Sam 18%. While getting a raise is good (actually, being employed at all is good these days), Sam might have some concerns about why Bob and Sally got so much more. Bob would also probably be somewhat concerned about the fact that while he got more than Sam, he got far less than Sally. After all, such disparity does provide at least some grounds for worrying that something is not right. Perhaps, for example, Sally’s raise was the result of her connections and some (or much) of her increase was taken from what was actually generated by Bob and Sam.

However, Sam and Bob’s concerns could be unfounded. After all, each person might have received exactly the deserved raise. Perhaps, for example, while Sam was somewhat more productive, Sally was vastly more productive. Or perhaps Sally invented something that the company patented and was properly rewarded. As long as Sally exceeded Sam and Bob based on a legitimate standard or standards (such as productivity or inventing things), then the disparity could be reasonably  justified on the basis that it was earned fairly. This also assumes, of course, that Sally, Sam and Bob were working under comparable conditions. If, for example, Sally was given an abundance of assistance and support while Sam was required to do without, then this would be a relevant factor.

Turning back to the general income disparity, perhaps the 1% earned their 275% increase by simply outdoing the lower classes in ways that would legitimately justify the disparity. As might be imagined, there is considerable dispute over what justifies income. Fortunately, this is a relative situation in terms of comparing the classes. As such, whatever standards (such as productivity or inventiveness) that are used to justify an increase could be applied to all the classes (with some likely exceptions). As such, if the 1% did proportionally better than the 99% in terms of these standards, then the disparity could be justified. Provided, of course, that the conditions were comparable.

One common way to justify the disparity is to point to the massively profitable start up technology companies. These companies, such as Google, have created quite a few millionaires (and some billionaires). So, for example, it could be argued that someone like Mark Zuckerberg earned his billions through his efforts. In contrast,  it could be contended that the young people of Zuckerberg’s age who died in service to their country legitimately  earned considerably less (even taking into account the “free” funeral). After all, they could have created Facebook and become billionaires instead of going off to die in foreign lands. The same underlying principle would, of course apply across the board. For example, while Mitt Romney makes vastly more than most Americans, it could thus be asserted that he justly earned his large income. Those who elected to be firefighters, police, teachers, nurses, professors, electricians and so on also earn their money, but they justly earn considerably less. As such, the disparity is justified.

Of course, one might suspect that this sort of stock justification is circular. Those who make more income are justified in making more because they make more.  Likewise, the 1% are justified in their 275% increase because they made 275% more income. This seems to boil down to saying that they earn more because they earn more. This is like is like questioning a person who has taken a huge slice of cake and being told that her slice is big because it is a big slice. This sort of circularity fails to satisfy. What is needed is not just an appeal to the obvious fact that people who make more do make more, but rather some justification for the disparity.

One way to counter this is to argue that I have it wrong. The correct view, at least when it comes to earned income, is that people like Mark Zuckerberg generate vast amounts of money and hence are entitled to a significant cut of that money because of the value they generate. This is not, it could be argued, circular. It is like a cook who makes a bigger cake-his slice would thus be bigger. Those who do not create as much profit, such as Captain Jesse Ozbat (killed on May 20, 2012 at the age of 28) justly earn less. Sticking with the cake analogy, those who bake small cakes get smaller slices.

While this might seem to justify the disparity, it actually seems to simply reveal the foundation of the disparity. To be specific, the broader disparity exists (in part) because of the disparity in value placed on specific jobs. So, for example, Zuckerberg became a billionaire because of the way he was rewarded for what he does. Likewise for the millionaires Mitt Romney and Barrack Obama. Those who are mere teachers, professors, soldiers, electricians, plumbers, roofers, farmers and so on are rewarded to a vastly smaller degree because of the far lesser value placed on what they do. This disparity at the individual level obviously enough provides the foundation for the disparity that exists when considering the various economic classes in the United States. It is, I think, not unreasonable to inquire whether or not the value system that governs income is just or not. It might, of course, be quite just-but this is not something that can simply be assumed.

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75 Responses

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  1. magus71 said, on May 30, 2012 at 9:05 am

    Mike,

    It is not only the value of a job performed, but how easily the service is presented to high numbers of people. Movie stars don’t make a lot of money because they are important to society, but because their movie can be shown simultaneously to thousands upon thousands of people. Which is why you boosted your income significantly with your philosophy books, not because your books contain information that isn’t in your classes, but because it is easier for many people to access books.

    I’ll err on the side of liberty when it comes to income inequality. The only time I would have a big problem with it is if I simply couldn’t make ends meet. Money accounts for only about 25% of my job satisfaction. Which is why the Army couldn’t pay me enough to re-enlist. Too much BS. Creativity and a sense of accomplishment and camaraderie are more important.

    Also, don’t forget that the highest paid people have the easiest time moving around. Thus, any attempt at redistributing their wealth may result in them simply picking up and leaving the country, going to a country that doesn’t so such a thing.

    Lastly, globalization is the biggest reason for the growing income of the 1%. There is a bigger pool of people which they can sell their product. It’s the difference between your books at a local book store and selling them on Amazon.

    • Michael LaBossiere said, on May 30, 2012 at 12:30 pm

      That does explain some of the income increase and disparity. After all, if someone can sell digital products to the whole world, they can make a lot of money-even if the products really add little of value to the world (like the Twilight books). However, this does not explain all the disparity. After all, not all the rich folks are authors or creators of products that are sold on a global scale.

      True-the rich could simply pack it up and leave the United States while the poorer folks would have a harder time simply abandoning their country and citizenship in favor of being able to keep more money. Of course, it might be wondered why we should pander to people whose loyalty is to their own wealth and not to, for example, their country or a higher set of ideals.

      • magus71 said, on May 30, 2012 at 12:45 pm

        Free market capitalism isn’t about pandering or loyalty to anyone. It’s about using human nature to benefit a maximum number of people. I think some of the people t probably move away probably think that America has become something other than what it was intended. It was created as the most libertarian nation in history, and has become something else.

        • dhammett said, on May 30, 2012 at 2:07 pm

          To put that question in different form: Which country (or countries), specifically, would you, an Amercian (oops!)I mean American ,citizen be willing to flee to? Which country is more like the country you think we were “intended” to be than we are, even in our current libertarian-disappointing, tea-party-maddening, fringe-driven, so-called socialist state?

          • magus71 said, on May 30, 2012 at 5:15 pm

            Well, if I were rich, and wanted to flee what I believed was excessive taxation, I’d go where taxes are lower.

            http://finance.yahoo.com/news/facebook-co-founder-saverin-gives-up-u-s–citizenship-before-ipo.html

            • dhammett said, on May 30, 2012 at 10:13 pm

              Are you saying Singapore is more like the country you think we were “intended” to be than America is?

            • Michael LaBossiere said, on May 31, 2012 at 2:41 pm

              But should (morally) people flee to other countries and abandon their citizenship in order to pay less taxes? While this is not on par with taking up arms against one’s own country, this would seem to raise some moral concerns.

            • magus71 said, on May 31, 2012 at 3:42 pm

              I’m not saying they should but they do.

          • T. J. Babson said, on May 31, 2012 at 3:17 pm

            People “flee” to the U.S. all the time for economic opportunity–what’s the difference?

            • Michael LaBossiere said, on June 1, 2012 at 9:44 am

              That is a reasonable question.

              If someone is fleeing another country and coming here solely to avoid paying taxes, then the cases would be analogous.
              If someone who is already very well off flees another country for the sole purpose of getting somewhat more, then the cases would be a close analogy.

              To use an analogy, these cases would be like a person who is in a very good marriage deciding to dump his/her spouse just to get something a bit better. This seems morally problematic, provided that some value is placed on loyalty, devotion and so on. However, for someone who is an ethical egoist or otherwise solely focused on personal gain, it would be the right thing to do.

              However, the analogy begins to weaken when you consider people who leave a country because they are living in poverty and coming to the US enables them to make enough to survive on and perhaps support their family back home. In this case, they would be acting from a clear need. Using the relationship analogy, it would be like someone in a horrid marriage leaving that marriage for a better person. That seems rather understandable.

              I do consider being a citizen of the United States to be more than a relationship of economic convenience. My remaining a citizen is not simply a matter of economic calculation and I would not renounce my citizenship just to save money on taxes or for a similar gain. This is both a matter of ethics and honor.

        • Anonymous said, on May 31, 2012 at 11:21 am

          “Free market capitalism isn’t about pandering or loyalty to anyone. It’s about using human nature to benefit a maximum number of people”

          Free market capitalism doesn’t have ANYTHING to do with using human nature to benefit a maximum number of people. It has to do with maximizing what you can get for yourself.

          • magus71 said, on May 31, 2012 at 11:55 am

            Why is the standard of living in capitalist society’s better than in other places? What other system do you propose?

            “It has to do with maximizing what you can get for yourself.”

            It is a big-picture plan that allows people to do anything they want with their money once they earn it. In fact, they can even give it to charity, and Americans do so more than anyone else.

            Gaudiani, the author of The Greater Good, observed that “More Americans make a donation every year than vote, by a long shot; than watch the Super Bowl, and even than eat a fast food meal.”

            Gaudiani was commenting on a report released by Indiana University that day that showed Americans gave $295 billion to charity in 2006.”

            http://archive.mrc.org/cmi/cmi/articles/2007/ABC_Only_Network_to_Share_Good_News_on_Giving_.html

            Just as Tolstoy said: Everyone wants to change the world, but no one wants to change themselves.

            • magus71 said, on May 31, 2012 at 11:56 am

              *societies

            • ajmacdonaldjr said, on May 31, 2012 at 12:34 pm

              It’s very simple. All we need ask is: “Is the money I earn mine? or is it the government’s?” If it’s mine I can do with it as I please. If it’s the government’s then the government can do with it as it pleases. And to think any political system can create generosity and good will (or charity) at the point of a gun or threat of prison is simply ridiculous. Charity toward all and liberty above all else.

            • dhammett said, on May 31, 2012 at 2:09 pm

              $295 billion. I wonder what that averages out to per working individual in 2006? If we had 150 million in the over sixteen workforce in 2006 that would average out to a bit under $2000 per person. A good 10% tither would give that much . . .if he were making a mere $20k. I’d be more interested in an income level breakdown. Surely Gaudiani had them.

              But I won’t spend time reading the article. What you offer from it is full of statements that are, simply put, a bit fuzzy. That sentence “More Americans make a donation every year than vote, by a long shot; than watch the Super Bowl, and even than eat a fast food meal.” is intriguing. Does he mean that more Americans make a donation every year than vote in all elections (local, state, national, library board, boards of education, Rotary meetings, etc, etc., combined? That’s a lot of individual votes, and I’m not so certain there are enough Americans to make that many donations . Super Bowl viewers: He may be right there. Only about 115 million viewers there. But fast food meals? Who, if I might be so inquisitive, was checking the numbers? For some people, a meal is a burger and a drink. Some order a take-out of fries. Does that count? And the lunch room monitor for all this? And who has made the final decision on what “fast food” is? I’ve been in sit-down restaurants where I wait for a meal, eat, and tip, and the food quality is—well you know the word. And I’ve been in some so-called fast-food restaurants where I haven’t had to tip and the food

              The phrase “a donation” doesn’t tell us what one American gave or to which charities. What was the average donation per American?What kinds of charities? Leona Helmsley (is she still alive?) may be contributing large amounts to pet charities and raising the ‘average’ amount for all Americans–plenty of whom are stingy pricks. Did you know that both PETA and the NRA are charities? Yeah! They both get the same rating! Three stars on
              charitynavigator.org

              Frankly I doubt that the religious concept of “giving” or tithing–meaningful giving–should include either of those organizations. It should involve fellow human beings in need. If they don’t come first—far ahead of the pack—then all the mouthing about the value of human life is just words.

        • dhammett said, on May 31, 2012 at 4:00 pm

          “I’m not saying they should but they do.”
          The obvious question: So what?
          Here’s a question that has gone unanswered:
          You wrote “I think some of the people probably move away [because they think] America has become something other than what it was intended.”
          I followed with these question: “Which country is more like the country you think we were “intended” to be than we are”?
          Still a good question. Still unanswered.

          • dhammett said, on May 31, 2012 at 4:11 pm

            “with this question”

  2. T. J. Babson said, on May 30, 2012 at 9:09 am

    Mike, are you arguing that it is worth making everybody poorer if we can reduce economic inequality somewhat? Because that is the tradeoff, right?

    • Michael LaBossiere said, on May 30, 2012 at 12:37 pm

      Why would addressing certain aspects of disparity make everyone poorer? I would counter by saying that having a system that corrects specific disparities (such as subsidies to certain industries, laws that favor the big players, and so on) would create a market that is freer than the current system in which most markets are controlled by the big players.

      Addressing the damaging aspects of disparity would result in some decrease in the wealth of some of the extremely wealthy, but would result in an overall increase in wealth and distribution more in line with merit.

      It is also worth considering the consequences of allowing wealth and income to continue to hyper-concentrate. A look back at history shows the usual result-revolution. Preventing that by addressing disparity is cheaper than fighting real class warfare.

      • T. J. Babson said, on May 30, 2012 at 1:22 pm

        All right, say you snap your fingers and everyone now living in the U.S. with a net worth more than $20M has moved to Australia. How has that improved things?

        • dhammett said, on May 30, 2012 at 2:31 pm

          Let’em go. If they place their hands over their hearts when they pledge allegiance and stand for the playing of our National Anthem , they’ll still be fine, upstanding, patriotic citizens . Right? It’s their choice, by dingy dongy. We should offer them free transportation (sorry, cheap accommodations). Didn’t Britain do that for its criminals back in the 18th century?

          Sorry, but I doubt that everyone with a net worth of $20M would choose Australia. I doubt that everyone would just leave for anywhere if MIke snapped his fingers. Sorry, Mike. I doubt that all as much as I doubt the feasibility of simply rounding up and deporting 11000000 Mexicans, back across the border.

          • magus71 said, on May 30, 2012 at 5:20 pm

            dhammett,

            You avoided the question. How would that improve things?

            • dhammett said, on May 30, 2012 at 10:24 pm

              magus
              At 5/30/12 5:15 you avoided my question (unless you actually meant you think Singapore is more like the country our country was intended to be than we are now) .

              My intention was to poke fun at the foolish premise upon which TJ’s question is based: all those millionaires going to Australia at the snap of Mike’s fingers. Why not Singapore (see the link in your 5:15)?Get past that, and the question may have some value. But first we’ll ‘ have to deal with the vagueness of the question itself. “Improved things” for WHOM? For the Australians? For the US? For self-serving millionaires? For patriotic millionaires?

        • Michael LaBossiere said, on May 30, 2012 at 3:41 pm

          Trump is gone. I win.

          • Michael LaBossiere said, on May 30, 2012 at 3:43 pm

            But, more seriously, my view is not that we need to get rid of wealthy people. Rather, my concern is with the disparity in income and wealth. If this disparity is morally justified, then I would have no problem with it-just as I have no problem with the best runners consistently taking home the trophies. If the disparity is morally unjust, then it should (morally) be corrected.

            • dhammett said, on May 30, 2012 at 3:53 pm

              Apparently TJ thought you were serious. I was just pointing out some holes in his cloud of fears.

            • magus71 said, on May 30, 2012 at 5:21 pm

              Are they stealing the money?

          • dhammett said, on May 30, 2012 at 3:48 pm

            He just left his head (brain and hair) behind. You lose.

      • ajmacdonaldjr said, on June 1, 2012 at 9:37 am

        Well said professor. If only we could do so. I’m afraid the violent revolution you speak of is a foregone conclusion at this point. Future generations should do as you say: address this disparity before it’s too late, as it is/was for us. This document addresses this and many other social issues at the philosophical level and I think if you can carve out a little time to read it you may discover that the Church has a very balanced approach to social issues by asking the question: “Which is the most just solution for all peoples”, rather than as we tend to see these issues: “Which is the Democrat solution (just or not) and which is the Republican solution (just or not). People today, because they haven’t read this, are busy trying to figure out solutions to our myriad social problems that were addressed by the Church 50 years ago: PACEM IN TERRIS (1963) http://www.vatican.va/holy_father/john_xxiii/encyclicals/documents/hf_j-xxiii_enc_11041963_pacem_en.html

        • Michael LaBossiere said, on June 1, 2012 at 10:22 am

          The Catholic church does have a good record in regards to social justice. While I do have some issues with the church’s stance on some matters, I do agree with the consistent commitment to helping the needy and fighting for justice. One nice thing about a healthy democracy is that people who disagree on some matters can still work together on what they agree on-something that many folks in power seem to not understand.

  3. ajmacdonaldjr said, on May 30, 2012 at 9:10 am

    “It is, I think, not unreasonable to inquire whether or not the value system that governs income is just or not. It might, of course, be quite just-but this is not something that can simply be assumed.”

    Pius XII, in commenting upon Rerum Novarum, said: “The goods created by God for all peoples must be made available to all in an equitable manner, according to the principles of justice and charity. The economic wealth of a people does not consist of abundance of goods, but rather in a fair distribution of goods.”

    Before God we are to consider ourselves not as owner, but only as managers of our goods. “Or what have you that you have not received?” asks the apostle Paul. (1 Cor. 4:7). The absolute master of everything is God, who grants usthe use of some of his goods. Of this use we must render him a strict account: “Give an account of your stewardship” (see: Luke. 16:1-8)

    “Furthermore, he wants us to give what is superfluous to the poor. Christ tell us: “he that has two coats, let him give to him that has none; and he that has meat, let him do in like manner.” (Luke. 3:11). The divine Redeemer is even more absolute with this precept of his: “Give that which remains as alms” (Luke. 11:41); in other words, that which is not necessary for the support of one’s self and one’s family, according to each one’s social condition. When necessity and convenience have been satisfied, it is our duty to give what is left over to the poor. God has blessed us with goods so that we may do good.”

    • dhammett said, on May 30, 2012 at 4:26 pm

      Does this giving take place before or after I give money for building new churches, church upkeep, etc?

      Who decides what is superfluous for me or my family? God has already made some basic decisions for us.
      “. . .he grants us the use of some of his goods. ” Part of the problem seems to be that God grants some more than others. We come into the world naked but we’re some are supplied with much better hardware than others.

      The phrase “according to one’s social condition” seems to make deciding what is “superfluous” easy. . . The richer you are, the more you get to keep. In fact, you can keep as much as satisfies your “social condition”. If you’re poor as church mice, you can’t give much, but you can be happy as church mice. Eventually, you’ll find that ,because all human beings are perfect, much will come to you from above. It’s called, I believe, the “trickle down” theory. You and other boats will be raised, and at some point you’ll have to start making decisions about your new “social condition”. Perhaps your position is worth a reassessment! Is it possible that you really should/could be more worthy than you thought? If so, you want to maintain that state. You might actually want to move up a bit. At this point those above you might decide to reassess their giving habits.

      Pius XII likely did not say “There are no easy solutions.” Even offering aid to a stranger is difficult.

      “It is easy enough to be friendly to one’s friends. But to befriend the one who regards himself as your enemy is the quintessence of true religion. The other is mere business.”
      Mahatma Gandhi

  4. magus71 said, on May 30, 2012 at 12:19 pm

    Stossel again hits it on the head:

    “Unions “protect” workers all the way to the unemployment line.”

    http://www.realclearpolitics.com/articles/2012/05/30/improving_life_for_workers_114310.html

    • Michael LaBossiere said, on May 30, 2012 at 12:41 pm

      Well, my union has done well by me. After the state broke our contract, the union started legal action and won. For some reason, the judge decided that the state just can’t break its contracts when the legislature feels like it. Something about contracts being legally binding or something like that.

      While unions can be bad, the union is just as sensible as any other collective organization-be it a corporation or a club. After all, if organizing a business into a corporation is a good idea, then it would seem that the workers organizing into a union is also a good idea. Sure, there are bad corporations and bad unions-but this does not show that they are bad because they are collective organizations.

      • magus71 said, on May 30, 2012 at 12:52 pm

        Stossel simply says that it shouldnt be law that people have to join unions. Also, that unions are overrated by some. The US Army is an example of great benefits and ample pay (in my opinion) without a union. The Army must give both in order to retain and recruit, since it cannot, now. conscript. When it could conscript, pay was deplorable.

        • dhammett said, on May 30, 2012 at 2:56 pm

          The government (the US taxpayer) paid you well to do a dirty, dangerous job for “great benefits and ample pay”. Yet, as you pointed out in our first post, “the Army couldn’t pay me enough to re-enlist. Too much BS. Creativity and a sense of accomplishment and camaraderie are more important.”
          A union wasn’t needed to get the benefits and pay necessary to get you to enlist. You simply volunteered for a job that you admit was, by definition dirty and dangerous and , if I interpret your words correctly, completely dull and unsatisfying.

    • Michael LaBossiere said, on May 30, 2012 at 12:46 pm

      I’m divided on the mandatory union thing. On the one hand, people should have the right to chose. At my university, we do not have to join the union, which seems fair. On the other hand, the non-union people become free-riders on the people who are union members. After all, those who do not pay get the benefits of the union’s collective bargaining and so on. It is rather like not paying for stock in corporation, yet getting dividends paid out for free. If you ran a business and people came around demanding free stock, what would you do? I would assume most conservatives would be against people free-riding on others and refusing to help pay the costs for what unions do (after all, all employees benefit).

      • magus71 said, on May 30, 2012 at 12:55 pm

        Non-union memebers only benefitted so much from the union at my PD. For instance, a non-union member would not be afforded a union-bought lawyer should he need one in a civil lawsuit against himself. But yes, whatever wage he made was bargained for by the union.

        • Michael LaBossiere said, on May 30, 2012 at 3:33 pm

          Which does show that a union can be a good thing. After all, they give us collective power that helps when dealing with other collectives. But, I do agree that unions are subject to the same sorts of corruption, mismanagement and other ills faced by all collective bodies (from clubs to corporations). These, however, are not ills unique to unions.

          • dhammett said, on May 30, 2012 at 3:44 pm

            It can be noted that, when points can be made from the “other side’s” “corruption, mismanagement” , etc. the home team happily overlooks its own problems. If unions can benefit from pointing out corporate corruption, they’ll do so. If corporations can profit from destroying unions, they won’t hesitate to bash unions.
            All things being equal (if indeed they are equal) that is.

  5. magus71 said, on May 30, 2012 at 12:24 pm

    Stossel again:

    “Our close relatives the chimpanzees freak out when one chimp gets more than his fair share, so zookeepers are careful about food portions. Chimps are hardwired to get angry when they think they’ve been cheated — and so are we.”

    “I once opened a dinky business called “The Stossel Store” in Delaware, hawking hats, books and other goodies on the street. It was hard to open this store. I chose Delaware because it’s supposedly the state that makes that easiest — but “easiest” didn’t mean “easy.” I still required help from Fox’s lawyers to get the permits, and the process took more than a week. In my hometown, New York City, it would have taken much longer.

    By contrast, in Hong Kong, I started a business in one day. Hong Kong’s limited government makes it easy for people to try things, and that has allowed poor people to prosper. Regular people benefit most from economic freedom.”

    http://www.realclearpolitics.com/articles/2012/05/16/making_life_fair_114166.html

  6. magus71 said, on May 30, 2012 at 5:22 pm

    It’s clear to me from this discussion that the people who classically say money is unimportant (liberals) really find it to be more important than most.

    • dhammett said, on May 30, 2012 at 10:48 pm

      Hmm. . .In your link at 5:15 above you mentioned that you’d do something like Saverin did (renounce his citizenship and move to Singapore–why Singapore, I’ll never know) to avoid excessive taxation.
      http://mashable.com/2012/05/17/saverin-denies-leaving-tax/
      He says that’s not the reason he left at all. Liar,liar, pants on fire, right? Otherwise, why would he deny it?

      http://top-federal-tax-rates.findthedata.org/
      In those years where top tax rates and top rates on capital gains exceeded present rates, how many patriots left the country? Are we truly at risk of losing many now? And how many should we really care about? The ones who wear flag lapel pins? Ones with their flags on their sleeves? Oh, please come back! We done ya wrong!

    • Michael LaBossiere said, on May 31, 2012 at 2:44 pm

      Most people are aware that money is important. I notice that every time I go to the grocery store and when I pay bills. However, there is some question about whether it is the most important thing or not. I would not, for example, give up my United States citizenship just to avoid paying as much in taxes. My ancestors helped build the country and, most importantly, I have a moral commitment to the core values of the United States. I’m not a fair weather patriot who would just pack it up for some extra money in my bank accounts.

      • T. J. Babson said, on May 31, 2012 at 8:55 pm

        “I’m not a fair weather patriot who would just pack it up for some extra money in my bank accounts.”

        And yet that is the reason that many, if not most, immigrants come to the U.S.

        • dhammett said, on May 31, 2012 at 9:31 pm

          Hmm. I always thought that freedom and democracy were the main reasons “most immigrants come to the US”.

          Questions: Perhaps you’ll be more willing to answer this than magus is. Where will the tax protesters— those who are willing to leave for money alone, go? And will they find freedom, democracy, and opportunity there?

          • T. J. Babson said, on May 31, 2012 at 10:24 pm

            Canada, Australia, New Zealand?

          • magus71 said, on June 1, 2012 at 5:57 am

            “I always thought that freedom and democracy were the main reasons “most immigrants come to the US”.

            You can’t possibly be that naive. Mexico is a democracy and relatively free.

            • dhammett said, on June 1, 2012 at 9:20 am

              Why, exactly, did the Puritans come to these shores?
              Is Mexico the kind of democracy you’d want to emigrate to?

              http://island-memories.tripod.com/id1.html

            • Michael LaBossiere said, on June 1, 2012 at 10:09 am

              But aren’t we being attacked by terrorists because they hate our freedom? Presumably that is our big thing that also attracts people to come here. It surely cannot be a matter of economics and policies?

            • magus71 said, on June 1, 2012 at 7:12 pm

              I know GW Bush said that. But primarily we’re being attacked because we are powerful. If al-Qaeda wanted to score big, they had to hit America. Now theyre reduced to targets of opportunity.

            • Michael LaBossiere said, on June 2, 2012 at 10:05 am

              Attacking the powerful because they are powerful seems like an odd motivation. After all, do little dogs charge at huge dogs because they are powerful? Do kids go after the biggest, toughest kid? Surely they have other reasons to go after us.

            • magus71 said, on June 2, 2012 at 10:38 am

              Yes they have other reasons. Few things have a singular cause. But an NFL team doesn’t get much of a boost in confidence when it beats the team at the bottom of the division. The most scorn is heaped upon the good teams from opposing teams’ fans. It’s the same thing when it comes to a clash of cultures.

              Our power is of more concern to islamists than our freedom. There are far more free nations than powerful nations.

              The sports analogy is the best I can come up with. Red Sox fans, no matter how bad their team, will resist admitting the Yankees are a better team. Most Red Sox fans hate the Yankees, even if the Yankees happen to be the best team in baseball in a given year.

              I don’t think the Vandals sacked Rome because Romans possessed freedom. Of course, certain cultures are more prone to wanting to do some sacking.

        • Michael LaBossiere said, on June 1, 2012 at 10:05 am

          If that is true, then they are fair weather patriots as well. This assumes, of course, that they are not fleeing oppressive states and so on.

  7. ajmacdonaldjr said, on May 31, 2012 at 11:27 am

    And the current inequality of wealth distribution is unjust why? Because people cannot earn sufficient wages to sustain their lives beyond bare subsistence? A minimum wage of $7.25 an hour is an insult, today. How is a man supposed to house and feed his family on that? The government is the only entity large and powerful enough to reign-in businesses that exploit workers unjustly.

    • Michael LaBossiere said, on May 31, 2012 at 2:46 pm

      True. A person who is willing to work should have a fair shot at least earning enough to live on.

      • ajmacdonaldjr said, on May 31, 2012 at 7:23 pm

        I agree, and I see this as a major defect in both Ron Paul’s libertarianism and the mainstream GOP. I can understand their point of not having a minimum wage to begin with, economically, but, to me, justice is more important than economics. All things being equal I think that so long as business pays and treats people justly the government should be hands off. But if and when the government begins to treat and pay people unjustly the government must step in to correct the error. There should be a constant back-and-forth correction occurring all the time, we shouldn’t freeze the minimum wage or remove it. Another example is Big Oil. In a perfect world, or a just nation, Big Oil should be privately owned. But if and when Big Oil runs roughshod over everyone while making money hand over fist all the while, it’s time to seize the oil companies and make them state-owned so that the government can use those resources and that revenue for the common – rather than for private – good.

        • Michael LaBossiere said, on June 1, 2012 at 9:56 am

          I agree. The main purpose of the state is to keep people from doing unwarranted harm to each other. When people are acting justly, the state has no reason to impose. So, if companies would always pay people fairly without the need for law, then we would not need a minimum wage. Likewise, if people did not steal, then we would need no laws against theft.

  8. magus71 said, on May 31, 2012 at 12:04 pm

    Mike,

    You’ve done nothing to show that the 1%’s increase is due to evil deeds.

    If you’re the CEO of a company for the last five years, and suddenly reports are showing a spike in profit, do you begin sending your workers home early so they don’t make you such a profit? Do you shut your factories down? Really not sure what your point is.

    There is evidence there’s many jobs that simply cannot be filled but people don’t have the skills to fill them.

    • Michael LaBossiere said, on May 31, 2012 at 2:55 pm

      That is a core moral question. Based on my own experience in sports, writing, working and academics I know for a fact that some people are not just better at certain things than other people, they are many times better. For example, I’ve run a decent marathon (2:45), good 10Ks (33 minutes) and good 5Ks (16 minutes) but there are folks who are vastly faster than I am (2 hour marathons, for example). As such, I justly earn a trophy or gift certificate now and then while the super fast folks justly earn the big prizes (which are still tiny compared to what other pro athletes make-but few people pay a lot to see running). As another example, I’ve written a lot of stuff professionally, but it doesn’t sell like Twilight or the Hunger Games. As such, those authors make piles of cash while I get a modest check each month. Presumably if I was as good a writer as those authors, then I would be sitting on a pile of cash. Or a throne of skulls.

      However, the mere fact that some folks earn what they get does not entail that they all do and that there is no significant or pervasive wrongdoing in our economic system. For example, consider how lobbying works. As another example, consider the deeds that brought the world economy into ruin. While it all seemed to have been legal, much of it was morally dubious (as was much of the taxpayer bailout).

  9. magus71 said, on May 31, 2012 at 3:40 pm

    “We have recently been hearing much maudlin sympathy expressed for the “down-trodden denizens of the sweatshop” and the “homeless wanderer searching for honest employment,” and with it all often go many hard words for the men in power.

    Nothing is said about the employer who grows old before his time in a vain attempt to get frowsy ne’er-do-wells to do intelligent work; and his long, patient striving after “help” that does nothing but loaf when his back is turned. In every store and factory there is a constant weeding-out process going on. The employer is constantly sending away “help” that have shown their incapacity to further the interests of the business, and others are being taken on. No matter how good times are, this sorting continues: only, if times are hard and work is scarce, this sorting is done finer—but out and forever out the incompetent and unworthy go. It is the survival of the fittest. Self-interest prompts every employer to keep the best—those who can carry a message to Garcia.

    I know one man of really brilliant parts who has not the ability to manage a business of his own, and yet who is absolutely worthless to anyone else, because he carries with him constantly the insane suspicion that his employer is oppressing, or intending to oppress him. He can not give orders, and he will not receive them. Should a message be given him to take to Garcia, his answer would probably be, “Take it yourself!”

    Tonight this man walks the streets looking for work, the wind whistling through his threadbare coat. No one who knows him dare employ him, for he is a regular firebrand of discontent. He is impervious to reason, and the only thing that can impress him is the toe of a thick-soled Number Nine boot.

    Of course, I know that one so morally deformed is no less to be pitied than a physical cripple; but in our pitying let us drop a tear, too, for the men who are striving to carry on a great enterprise, whose working hours are not limited by the whistle, and whose hair is fast turning white through the struggle to hold the line in dowdy indifference, slipshod imbecility, and the heartless ingratitude which, but for their enterprise, would be both hungry and homeless.

    Have I put the matter too strongly? Possibly I have; but when all the world has gone a-slumming I wish to speak a word of sympathy for the man who succeeds—the man who, against great odds, has directed the efforts of others, and having succeeded, finds there’s nothing in it nothing but bare board and clothes. I have carried a dinner-pail and worked for a day’s wages, and I have also been an employer of labor, and I know there is something to be said on both sides. There is no excellence, per se, in poverty; rags are no recommendation; and all employers are not rapacious and high-handed, any more than all poor men are virtuous.”

    Elbert Hubbard–A Message to Garcia

    http://www.foundationsmag.com/garcia.html

    • dhammett said, on May 31, 2012 at 4:44 pm

      In your business world, Elby—may I call you Elby?— there was such diligent oversight of production that every hair on every worthwhile head was counted (and praised) and every useless hair was shorn. All was just and correct. There was no mention of nepotism. No mention of criminal practices . Why, if it weren’t for
      government, Men of Power couldn’t have become criminals—there would have been no rules. But. . .”Men in power” have weaknesses, too. Some spent too much time on seeking flaws in the dregs you seem to concentrate on here, and too little on their closest associates. Some got caught with their pants down. Yes, even in your time, EH.

      You should have taken time out, Elby, to include the other side of each two-sided coin in your observations. I know you knew “one man” who illustrated the negative side of the working class. I’ll bet you knew other men who were not abject failures. Those without whom the perfect leader would have been left floundering, searching for followers. Perhaps you could have whispered their praises.

      Nice composition, Elby. Even for the 19th century. If you wanted to reinforce the idea that this is a black-and-white world, you took a big step. From a particularly negative angle, this little piece was very forward looking. . . .

      • magus71 said, on May 31, 2012 at 4:53 pm

        “Have I put the matter too strongly? Possibly I have…I have carried a dinner-pail and worked for a day’s wages, and I have also been an employer of labor, and I know there is something to be said on both sides. There is no excellence, per se, in poverty; rags are no recommendation; and all employers are not rapacious and high-handed, any more than all poor men are virtuous.”~Elby

        • WTP said, on May 31, 2012 at 5:20 pm

          He is impervious to reason, and the only thing that can impress him is the toe of a thick-soled Number Nine boot.

        • Michael LaBossiere said, on June 1, 2012 at 9:53 am

          True. I’ve never claimed that all employers are bad nor have I claimed that all poor people are virtuous. There is no inherent evil in wealth nor inherent virtue in poverty-just look through the classic virtue theorists for rather good examinations of wealth and virtue. However, there is legitimate concern with why and how a person is wealthy or poor. Ideally, each person would receive his or her due based on talent and effort within a system of fair competition tempered by compassion and decency.

          “In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.”
          -Confucius.

    • Michael LaBossiere said, on June 1, 2012 at 9:48 am

      There are certainly bad employers and bad employees.However, what does this story prove? What is its impact on the issues at hand?

      • magus71 said, on June 2, 2012 at 9:04 am

        Here’s my answer and synopsis. Actually it’s William Boetcker’s from almost 100 years ago. But I agree.

        You cannot bring about prosperity by discouraging thrift.
        You cannot strengthen the weak by weakening the strong.
        You cannot help little men by tearing down big men.
        You cannot lift the wage earner by pulling down the wage payer.
        You cannot help the poor by destroying the rich.
        You cannot establish sound security on borrowed money.
        You cannot further the brotherhood of man by inciting class hatred.
        You cannot keep out of trouble by spending more than you earn.
        You cannot build character and courage by destroying men’s initiative and independence.
        And you cannot help men permanently by doing for them what they can and should do for themselves.-Rev. William Boetcker (1916)

  10. dhammett said, on May 31, 2012 at 6:48 pm

    “all employers are not rapacious and high-handed, any more than all poor men are virtuous.”
    May I change that to “not all employers are bright shafts of hope in a world of darkness, any more than all poor men are sluggards.” ? Balance, please. Balance.
    My version of the statement would be worth more than all of Elby’s “Message to Garcia” (3:40 pm) Too bad someone had to question the body of the work to get at the weaknesses in the message.

    One problem with a sliced and dried view such as Elby’s:

    “Someone said to the President, ‘There is a fellow by the name of Rowan will find Garcia for you, if anybody can.’
    “Rowan was sent for and given a letter to be delivered to Garcia. How ”the fellow by name of Rowan’ took the letter, sealed it up in an oil-skin pouch, strapped it over his heart, in four days landed by night off the coast of Cuba from an open boat, disappeared into the jungle, and in three weeks came out on the other side of the Island, having traversed a hostile country on foot, and having delivered his letter to Garcia—are things I have no special desire now to tell in detail.
    “The point I wish to make is this: McKinley gave Rowan a letter to be delivered to Garcia; Rowan took the letter and did not ask, ‘Where is he at?'”

    There’s the problem. Deep down I have this pesky feeling, and maybe you do, too, that Adolph would have been simply thrilled to find a few good men like Garcia.
    Oh, wait. He did. Even a good Garcia in the hands of a bad president can be a terrible thing.

  11. magus71 said, on May 31, 2012 at 8:50 pm

    Mike and dhammett will be happy to know things are looking up. The rich took a huge hit last year in the US. The country had 129,000 fewer of the baddies than it did the year prior.

    http://www.cnbc.com/id/47631154

    I’m feeling better already. Hopefully I can find a street bum willing to hire me to shine his bench.

    • Michael LaBossiere said, on June 1, 2012 at 10:04 am

      My position has never been that the wealthy are by nature bad or that wealth is inherently evil. Going with my usual analogy, I’m fine with there being some runners who are vastly better than everyone else. After all, they have earned their success in open and fair competition. Likewise, I have no problem with people who have great success that is earned via merit. I do take issue with wealth garnered through immoral means , unfair systems, and other such things.

      In fact, I’m a true free-competitive market person: I think that the market should be like a marathon-everyone competes fairly under the same basic conditions. No sneaky lobbying, no special subsidies, no impeding and unnecessary laws aimed at maintaining the status quo and so on. Just people competing fairly to the best of their ability (or not) and success based on merit. Of course, no one is left to die in the street and everyone who shows up and puts in effort gets those bagels, oranges and bananas.

  12. dhammett said, on May 31, 2012 at 9:23 pm

    I’m saddened, actually.

    “Households in North America with investible assets of more than $100 million saw their wealth decline 2.4 percent. Their population declined slightly to 2,928 from 2,989.”

    The horror! At $2.4 million, each of these fellas lost the equivalent of the average investible assets of 11+ average Americans. But they have $98 million in investible assets remaining. I wonder—can they survive with that? Think they’ll have enough to invest in business expansion and hiring, if and when the population–the ones who earn, on an average $45-50k begin buying again? Think that $2.4 million loss is a legitimate excuse to close ye ‘ol pocketbook , renounce one’s citizenship, and move to Singapore?

  13. magus71 said, on June 12, 2012 at 4:09 pm

    http://puntocracy.blogspot.com/

    There seems to be a whole group of people who view wealth not as an abstraction or even in terms of tangible goods, but solely in terms of “currency” with a sub-text regarding the inequities of wealth distribution. It is this idea that wealth should be shared and that all wealth has been gained at the expense of others, that seems to be the foundation of the “Occupy Wall Street” movement as well the anti-capitalism forces found in academia today. Even the academics and social philosophers admit that wealth can be created and destroyed so they restrict their arguments to currency – usually in dollars and Euros but the argument can be applied to any form of fiat currency. But perhaps the best illustration of this view of wealth is to use art as an example. For example many of Van Gogh’s paintings initially sold for tens of dollars and that same painting today is worth millions, but was wealth created? The value increased but not because of any tangible change, only the demand increased and even that value is not realized until the painting is resold at its greater value. This illustration can be applied to stocks, bonds, or virtually any form of investment. Certainly there was no creation of wealth only a change in demand and the value of the investment as a result of the demand. The point is that when a country prints more currency it is not creating more wealth until that currency is exchanged for some tangible gain or goods, but the law of supply and demand remains. So no wealth is created by increasing the supply of currency but that doesn’t mean that the sum of wealth is finite, it just means the supply may exceed the demand at that specific point in time. For some inexplicable reason some argue that wealth – in terms of currency – is zero sum because printing more money doesn’t create more wealth. Taken at face value that is probably true but only if the law of supply and demand is suspended or held static. That means the value of some tangible asset will be increased because the supply of currency has exceeded the demand – momentarily. Those that subscribe to this fallacious argument then claim the economic policies of a country allow for some to become very rich while some become poverty stricken. Of course this is the very foundation of capitalism because as an economic philosophy it allows for the unequal distribution of wealth. The unasked question of course is how did the rich become rich and how did the poor become poor. Furthermore, how is rich defined and how is poor defined. The reality is that some have taken advantage of the opportunities presented by capitalism while others have expected to be taken care of – by the government, which is the very foundation of socialism and communism. The argument then shifts to the belief – not fact – that the wealth being created in a capitalist society by entrepreneurs, employers, and individuals is not shared or returned to society as a whole. This is a fallacious argument because those individuals with the greatest wealth pay the most in taxes while those with the least wealth pay little or even no taxes at all. It is the taxes of the wealthiest that pay for defense, for roads, for environmental control, energy, and all of the services provided by the government. Does capitalism permit inequality in wealth? Certainly it does, but it also provides equal opportunity for the individual to become wealthy while those who choose not to take advantage of those opportunities remain at a lower income level. I submit that wealth is NOT zero sum and that wealth can be and is being created daily, but that wealth creation is not the result of an increased supply of currency. To equate global wealth in term of currency is a specious argument because the demand for currency is elastic. This means that the total global wealth will wax and wane determined by the law of supply and demand. Therefore, those arguments regarding the inequality of wealth distribution have nothing whatsoever to do with wealth being finite. They are simply a philosophy that believes that wealth should be shared through governmental force, even though this philosophy has failed in every instance that it has been tried. The result has universally been universal poverty for the masses and even greater privileges and wealth for the elites.


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