A kindred spirit

Here’s Miles Kimball:

In calling myself a liberal, I am saying that in addition to an attachment to the liberty, limited government, constitutionalism, and rule of law emphasized by Classical Liberalism,  I hold to a view based on both classic Utilitarianism and contested elements of modern economic theory that, generally speaking, a dollar is much more valuable to a poor person than to a rich person, and that therefore, there is a serious benefit to redistribution that must be weighed against the serious distortions caused by the usual methods of redistribution.

It’s very unusual to come across someone with almost identical political views.  How rare?  Kimball continues:

Perhaps because of cognitive dissonance, it is common for people to either believe (a) that tax distortions are serious and redistribution of questionable value OR (b) redistribution is valuable and the distortions induced by taxes are small. My belief is that (c) tax distortions are serious AND redistribution is valuable.  That makes me a supply-side liberal.

I also agree with this:

Tax distortions are governed in important measure by the the consumption-constant elasticity of labor supply. The consumption-constant elasticity of labor supply measures how much less workers want to work when what they earn is taxed, but the tax revenue is recycled back to them in one form or another of government benefit they can get regardless of how little they work.  Matthew Shapiro and I argue in our paper “Labor Supply: Are the Income and Substitution Effects Both Large or Both Small?” that the consumption-constant elasticity of labor supply is large.

Karl Smith doesn’t seem to buy the consumption-constant elasticity assumption.  But it seems the most reasonable baseline to me.  In public finance the big debate is over the long run effect of expanding both taxes and expenditures.  Are higher taxes justified?  If they are recycled back to the public in some form of benefit, they might be.  But only if they overcome the efficiency cost of lower output.  It’s true that measured GDP might not fall if the money is wasted (as poorer people tend to work harder.)  But that’s not much of an argument for big government.  In addition, in recent decades the growth in government seems to be coming more in the form of social welfare expenditure, not programs like defense and space exploration.  I’d expect that trend to continue.

Put simply, there is a choice between the European model of high taxes and low work effort, the US/Japanese model of medium taxes and medium work effort, and the Singapore model of low taxes and high work effort.

Now if only he were a NGDPLT proponent . . .

HT:  Dilip


Tags:

 
 
 

43 Responses to “A kindred spirit”

  1. Gravatar of Morgan Warstler Morgan Warstler
    31. May 2012 at 12:34

    Again we see my Guaranteed Income plan ruins Karl’s day and he isn’t man enough to answer it.

    1. No need for new taxes.
    2. Workers must work to get societies benefits.

    Miles as a supply side liberal surely agrees… he already wants to he wants to issue credit cards.

    His email response like Karl’s was evasive.

    MY PLAN has the benefit of not handing money to people who don’t work, it surely is superior on that piece alone.

    All roads lead to Rome boys, Auction the Unemployed and everyone who needs it will receive their subsidy.

    Why drag your feet?

    Why does Karl hide?

  2. Gravatar of Kevin Dick Kevin Dick
    31. May 2012 at 12:35

    My problem is I have trouble seeing how anyone could think differently about this:

    (1) Would it be legitimate to stop 10,000 people from starving to death by taxing each of 100 people making $1M/yr, 1% of their income when the current marginal tax rate is zero.

    (2) Is it unfair to take 99% of someone’s income and give it to other people?

    I can’t imagine someone honestly answering no to either of these questions.

    So as they say, “We’ve established what kind of woman you are, now we’re just haggling over price.”

  3. Gravatar of Jason Jason
    31. May 2012 at 13:08

    The paper is fundamentally flawed. Here is the question they ask:

    “Suppose you won a sweepstakes that will pay you [and your (husband/wife/partner)] an amount equal to your current family income every year for as long as you [or your (husband/wife/partner)] live. We’d like to know what effect the sweepstakes money would have on your life. Would you quit work entirely” … {end quote} or reduce hours and then by how much?

    1) This is not the same question for people with different incomes (getting minimum wage vs $100k/year).
    2) This is not the same question for people of different marital status/ethnic background (don’t forget the signalling/social aspects of work … e.g. African Americans given the chance to escape racism/perceived racism in the workplace, a single guy changing his job to rock musician, a married couple getting/having to spend more time together — could go either way).
    3) This is not the same question for people who work in different jobs (do you like your job?).
    4) This is not the same question for people who work with flexible hours (do you have to come in on Saturday … and then go ahead and come in on Sunday as well?).

    The authors break the results out by some of these various groups — BUT THEN none of the results are statistically significant!!!

    A basic mathematics quibble I have here is that labor elasticities are “analytically continued” (first order coefficients in a Taylor expansion) from the current level of work/income (e.g. dollars/hour at job). This survey purports to analytically continue from infinity dollars per hour (at no job!). There is absolutely no good reason to think this is will even converge on the current level of work as one extrapolates from infinity to zero (e.g. “hysteresis”, memory effect). It’s like expanding from a 100% taxes point in the Laffer curve. A black market has formed, revenue collection is zero and the government has collapsed. You can’t slowly reduce the tax rate and expect the US government to reform — you might get Somalia or Singapore.

  4. Gravatar of ssumner ssumner
    31. May 2012 at 13:53

    Kevin, I agree.

    Jason, I haven’t read the paper so I won’t comment–you may be right. But I do like the way he thinks about the issue.

  5. Gravatar of Major_Freedom Major_Freedom
    31. May 2012 at 14:01

    I hold to a view based on both classic Utilitarianism and contested elements of modern economic theory that, generally speaking, a dollar is much more valuable to a poor person than to a rich person, and that therefore, there is a serious benefit to redistribution that must be weighed against the serious distortions caused by the usual methods of redistribution.

    This fallacy is borne out of, especially among early 20th century socialists from which the argument gained popularity, a misunderstanding of the law of diminishing marginal utility.

    The thinking goes that $10,000 has a higher marginal utility to a man who has $100,000 than it does to a man who has $1 million. It follows that if $10,000 is taken from the man with $1 million and given to the man with $100,000 an increase in “total” marginal utility will result.

    In this conception of the law of marginal utility, the belief arises that some sort of gain can be achieved so long as anyone has more than someone else and his wealth can be transferred to those who have less, such that the marginal utility gained by the person who has less “outweighs” the marginal utility lost by the person who has more. Perfect equality becomes the inevitable gold standard of maximizing utility – in a city, state, country, or the world (hint: don’t say “world” in a developed country, because then the advocates of equality will balk).

    People who believe in this not only have no regard for rights, but rather needs and desires, but also, and more relevant to the above, they are attempting to divorce the concept of marginal utility away from where it actually resides, namely the individual, and they try to put it onto some universal abstract collective blob, where individual humans are mere cells of pleasure and pain of this “greater” blob. That is the only way that one individual’s loss and another individual’s gain can be viewed as some sort of overall net gain or loss.

    This collective blob thing allegedly feels pleasure and pain. It allegedly feels a great loss when a poor man loses $10,000 and a small loss when a wealthy man loses $10,000. Notice how the person who accept this, is actually viewing themselves in a rather distorted way, of thinking something like “If I lost $10,000, it would hurt me less if I were wealthy and more if I was poor. Since I am the “messenger” of the collective blob, I can say that the blob feels more pain when a poor man loses than when a rich man loses, and by the same token, the collective blob feels more pleasure when a poor man gains $10,000 at the expense of a rich man, compared to a poor man going without an additional $10,000 and the rich man keeping it.

    Socialist violence is so pernicious, because it feeds off reified philosophical concepts like this. It obliterates the individual, and so cannot but help view each individual as nothing but a cell in the greater Human organism where valuations reside, where gains and losses are made.

    Of course in reality, each individual person is a separate organism. It is each individual that serves as a separate base and standard for ascertaining utility. It is ONLY to the individual that there can be utility, marginal utility, or any other kind of value. That’s where utility arises and where it stays. Kimball is telling us what HE as an individual values. HE as an individual values seeing wealthy people getting robbed and poor people getting the loot. He is merely deluding himself by believing his own valuation is in line with some greater Human organism’s values, and that the only thing other individuals can be are cells.

    Yes, it is true that to one and the same person, $10,000 would be of higher marginal utility if they had $100,000 than if they had $1 million. But it is false to imply that the marginal utility of $10,000 to this individual is increased if, when he has $1 million $10,000 is taken away and given to someone else, who has only $100,000.

    It is ridiculous to believe that the 11th $10,000 in the hands of someone else is of greater marginal utility to a person than the 100th $10,000 in his own hands. And if it is not the marginal utility to this person, the man who has the $1 million, that is increased, then there is no basis for the belief that marginal utility could be increased by redistribution.

    It is no satisfaction to someone whose car has been stolen that now it is in the possession of someone who looks at it more often and with greater pleasure than he, the owner, would. The most intense pleasure of a thief is of no account to the owner.

    It’s the same reification fallacy making yet another appearance, covered in a veneer of feel-good emotions, defended by a false morality, and treated as some mystical insight into the inner nature of Humanity, in just another dress.

    A thousand years ago people like Kimball would have just carried their crosses and called for the King’s swords to plunder certain individuals in the name of God. Today, they depend on depraved philosophers and drape themselves in the flag and call for the state’s SWAT teams to plunder certain individuals in the name of Society.

    It’s not surprising that Scott Communist Money Economist Sumner, would find “kindredness” in a fellow worshiper. “Oh, you too believe there is something greater than individual humans that feels pleasure and pain? Let’s pray together and dig deeper.”

    Speaking of cognitive dissonance, Kimball admitted has was causes it. He admitted he has individual based beliefs, but he also admitted he has collectivist based beliefs. This confliction of ideas within himself has caused his own cognitive dissonance. And just as expected of those who reify collectivist concepts, he has transferred this dissonance into the collective blob, and he tries to accuse those who disagree with him about redistribution as having cognitive dissonance. He’s wrestling with his own dissonance, just like Sumner does when he advocates for NGDP while at the same time saying he is in favor of a free market in money.

    Two philosophically collectivist, cognitively dissonant, misguided souls wandering a foresaken planet, lost, without direction, without a map, hoping that the ultimate truth can be found by improving the collective blob and observing the result in the cells.

  6. Gravatar of Tommy Dorsett Tommy Dorsett
    31. May 2012 at 14:09

    Scott — What about a QE3 in which the Fed set a NGDPLT and said the current base was permanent until or unless we hit the target. Would that boost NGDP by boosting V without the advent of more asset purchases/base growth?

  7. Gravatar of Bonnie Bonnie
    31. May 2012 at 15:04

    Taking things from others based on some fluid definition of common good is a huge hazard. It starts off small and then the definition of common good keeps being redefined to encompass everything from whether we should be force fed broccoli, to some folks just don’t deserve to live.

    I see the value in social spending in a market economy where the government has a monopoly on money. If it’s going to break the system with tight money and cause a humanitarian disaster, it should have the means to ensure people don’t starve to death because of it. But for the rest of the stuff, it is probably better to just leave people to take care of themselves and others on a voluntary basis because individuals and markets provide the best support for needs at prices they can pay than government ever can. Nothing is ever more expensive than when its free.

  8. Gravatar of Major_Freedom Major_Freedom
    31. May 2012 at 15:11

    Bonnie:

    I see the value in social spending in a market economy where the government has a monopoly on money. If it’s going to break the system with tight money and cause a humanitarian disaster, it should have the means to ensure people don’t starve to death because of it.

    Tight money just means less parasitism through inflation. If that causes a crisis for the parasites, that is good for humanity.

  9. Gravatar of Major_Freedom Major_Freedom
    31. May 2012 at 15:12

    Taking things from others based on some fluid definition of common good is a huge hazard. It starts off small and then the definition of common good keeps being redefined to encompass everything from whether we should be force fed broccoli, to some folks just don’t deserve to live.

    Excellent argument against inflation.

  10. Gravatar of Negation of Ideology Negation of Ideology
    31. May 2012 at 15:16

    “In addition, in recent decades the growth in government seems to be coming more in the form of social welfare expenditure, not programs like defense and space exploration. I’d expect that trend to continue.”

    Exactly. I’d expect that trend to continue also. As disparity of income and wealth increase, social welfare spending increases in a democracy. The only way out is to find ways to increase the income and wealth of the poor and middle class. The best way to do that is to have policies that encourage saving and investment, and discourage consumer credit. If we made 401k’s universal and taxed consumer credit we’d see a gradual reduction in the need for social welfare spending. Then we could devote more of the budget to national infrastructure and basic research.

    Of course, fixing our monetary policy so we’re not arbitrarily throwing people out of work, taking their homes, and closing productive businesses would help too.

  11. Gravatar of Jim Jim
    31. May 2012 at 16:28

    Major Freedom, if you gave a concise, serious objection to arguments, people might listen to you. Instead you call people communists and ramble on.

  12. Gravatar of dwb dwb
    31. May 2012 at 16:38

    Major Freedom, if you gave a concise, serious objection to arguments, people might listen to you. Instead you call people communists and ramble on.

    o boy. here we go again. cue the 1400 words of frothing of the mouth austrian “no YOUR rambling on”

  13. Gravatar of Mike Sax Mike Sax
    31. May 2012 at 16:49

    dwb the classic Major Freedom move is to no matter what you say to him he comes back with NO! You are! So if you say geez Major why do you say X he comes back with I’m not saying X, you’re saying X!

    Major let me take on one point in your long disseration-a real disseration would be child’s play for you at lease based on length. I know your going to come back with “I don’t write long dissertations you write long dissertations.”

    This was something that Mao was about too-he called it “tit for tat.” You are a master of that at least.

    Regarding your diminishing marginal utility candard, it is an overhyped trope.

  14. Gravatar of Ron Ron
    31. May 2012 at 16:55

    It seems intuitively likely that taking $10000 from a rich man and giving it to a poor man would increase the utility of the poor man more than it would reduce the utility of the rich man but I see the following problems:
    1) as MF says the change in utility would be unmeasurable
    2) it is not necessarily true that the relative effects would be as predicted – what if the $10000 was the difference between the rich man affording some life-saving medical treatment and dying because he could not get treated ?
    3) It would seem to lead to the conclusion that absolute equality should be the social goal.

    I would guess that the amount of redistribution in a society has more to do with the balance of political power than with the notion of “social justice”

  15. Gravatar of Ron Ronson Ron Ronson
    31. May 2012 at 16:55

    It seems intuitively likely that taking $10000 from a rich man and giving it to a poor man would increase the utility of the poor man more than it would reduce the utility of the rich man but I see the following problems:
    1) as MF says the change in utility would be unmeasurable
    2) it is not necessarily true that the relative effects would be as predicted – what if the $10000 was the difference between the rich man affording some life-saving medical treatment and dying because he could not get treated ?
    3) It would seem to lead to the conclusion that absolute equality should be the social goal.

    I would guess that the amount of redistribution in a society has more to do with the balance of political power than with the notion of “social justice”

  16. Gravatar of dwb dwb
    31. May 2012 at 17:22

    I thought this was interesting (from a link on J Taylors blog).

    I made a few edits here and there.

    http://online.wsj.com/article/SB10001424052970204880404577225870253766212.html?mod=WSJ_Opinion_LEADTop


    A steady and moderate rate of monetary growth is an essential requirement both to control inflation and to provide a healthy environment for economic growth. We have not had such a policy.

    The Federal Reserve is an independent agency. However, independence should not mean lack of accountability for what it does. In practice, independence has not meant that the Federal Reserve is immune to Presidential and Congressional influence. The problem is how to assume accountability while preserving independence. We suggest that you:

    • Request the Fed to state targets for monetary nominal income growth year by year for the next five years that in its opinion will end inflationcyclical unemployment. Influential members of relevant committees of Congress have already urged the Fed to specify such long-term targets.

    • Assure the Fed that you will propose and fight for fiscal and other policies compatible with the elimination of inflationstructural unemployment.

    • Improve the procedures for coordinating Federal Reserve monetary policy with the economic policies of the Administration and the Congress and support Congressional efforts to monitor the Fed’s performance and to recommend changes in the procedures that could improve performance.

  17. Gravatar of Morgan Warstler Morgan Warstler
    31. May 2012 at 17:23

    I bring the pleasing middle ground between MF and Karl…

    You still get to talk about giving poor people stuff, but only if their labor is auctioned to the private market.

    —–

    Karl’s intellectual fraud is on full display here.

    NO ONE steps up and wants to argue with, “beggars cannot be choosers.”

    I’m fully comfy with MF’s worldview, but I (and the mass of the tax paying private sector) am willing to PURCHASE the moral high ground of making sure no one (who works for a bossy boss) goes hungry, cold, etc.

    After all I get to buy that labor cheap, and make profits where right now profits are not possible.

    For all moaning about a future full of ZMP workers, mine and mine alone is the only credible politically palatable policy that solves for this.

  18. Gravatar of Mike Sax Mike Sax
    31. May 2012 at 17:32

    Morgan I think a big part of what you need for success is the Major. Everyone needs the Right wing and Left wing extreme to contrast himself with.

    After being locked in an elevator with Freedom all night anything seems like a haven.
    .
    What I see is even some MMTers are kind of noticing your GI. Don’t get me wrong I’m suspicious. I got a hard time trusting any Righty to truly do anything to help the poor or the lower middle class for that matter

    Still it’s interesting. There could be a post about you in Diary of a Republican Hater soon. It will probably even god help me mention the Major-again to give you a running head start.

    What I still don’t really get is how the GI is differnt form the MMT JG.

    The extreme positions are what? Major says do away with UI and the minimum wage and leave nothing itn their place. For those who cant find a decent job that’s their problem.

    You say get rid of UI and MW but substitute the GI.

    Then there;s the JG-not necessarily always government jobs but where ever they can put the unemployed. Some JG jobs will be government some nonprofit, some will actually be private sector.

    There you are Morgan give me an answer to work with so I have a chance to even consider buying in.

  19. Gravatar of Mike Sax Mike Sax
    31. May 2012 at 17:39

    “Perhaps because of cognitive dissonance, it is common for people to either believe (a) that tax distortions are serious and redistribution of questionable value OR (b) redistribution is valuable and the distortions induced by taxes are small. My belief is that (c) tax distortions are serious AND redistribution is valuable. That makes me a supply-side liberal.”

    Supply side liberal… Interesting concept Scott. See because of what he says-most either are a or b, c is very rare I tend to mistrust talk about tax distortions reading them as mainly just a rationale for not doing a.

    How though does someone who subscribes to c-supply side liberalism manage to come up with policies that satisfy both conerns?

    If push comes to shove which concern has to give way?
    .

  20. Gravatar of Morgan Warstler Morgan Warstler
    31. May 2012 at 18:18

    “There you are Morgan give me an answer to work with so I have a chance to even consider buying in.”

    1. Govt. workers are lazy. It is a fact.
    2. We will not pass a plan that grows public employees. Right support is required and only my plan gets right support.
    3. Govt. shouldn’t direct “excess capacity” – knowledge problem
    4. It harms the unemployed to not have a bossy boss.
    5. The taxpayers are ALREADY now paying to cover the nut of the ZMP, and paying for the govt. taxes…. they shouldn’t have to bid against the govt. for the labor.
    6. Because the unemployed are concentrated in certain areas, it gives advantages to local entrepreneurs.
    7. It reduces illegal immigration, that won’t happen with public employment.

    Radical example: Imagine a smart drug dealer who runs a project in Detroit… suddenly he has the unique ability to buy up ALL the workers in his project for $40 per week, to roust them up out of bed every morning, to LEGALLY threaten the truly lazy (if they fail enough they can get their GI suspended), and to imagine up any LEGAL business he can dream up to rent them out for.

    Clean up ghetto, public parks, paint houses cheap, etc. etc. wherein selling them drugs is not only less profitable, and more risky, he has an incentive for them not to get high.

    So he also has an incentive to narc out a competitor who is using the labor for illegal purposes, etc. He plays fair.

    And his business relies on something that doesn’t scale for outsiders, motivating the unmotivated. He has barriers to entry.

    But now hew’s legal, and subject to real legal considerations like accept that he has to pay more for better workers, or risk being tossed out of the best opportunity of his life.

    My point is not to be 100% accurate with the radical example, is to show that the universe of realistic creative destruction expands when you turn excess capacity into $100 bills laying on the ground, and stop trying to manage it all top down.

    The unimaginable gets imagined.

  21. Gravatar of Mike Sax Mike Sax
    31. May 2012 at 19:46

    “it is not necessarily true that the relative effects would be as predicted – what if the $10000 was the difference between the rich man affording some life-saving medical treatment and dying because he could not get treated ?”

    Ron if a single $10,000 is a matter of life or death I don’t think the person is rich.

  22. Gravatar of Krzys Krzys
    31. May 2012 at 20:23

    The mixing of Libertarianism and Utilitarianism in this way is somehow confused. The reigning principle of Liberal (tarian) order is the maximization of freedom. That, among others, means that private transactions among individuals should be encroached upon as little as possible: only inasmuch as justified by common needs (i know, quite a broad characterization). The larger point here is that playing with somebody else’s money for the social “optimization” purposes is an outrage against freedom. That view does not preclude taxes as such or even progressive rates, given the higher level of infrastructure utilization by the well-off. However, it does preclude the callous playing around with private wealth by the social engineers keen on deciding who should have how much. In simple terms, my money is none of your business.

    You cannot be both Libertarian and Utilitarian. You are just the latter, since you have little respect for freedom.

    Note, this has nothing to do with just-desserts thinking.

  23. Gravatar of Samuel Samuel
    31. May 2012 at 20:38

    Krzys: “You cannot be both Libertarian and Utilitarian. You are just the latter, since you have little respect for freedom.”

    1- What if the spread of Libertarianism as a noble lie just happens to lead to the most utilitarian world?
    2- Preference Utilitarianism and Libertarianism (once you flesh how who’s preferences matter and the impossibility of mind reading) lead to very similar prescriptions.

  24. Gravatar of Krzys Krzys
    31. May 2012 at 20:53

    Samuel:

    1. It might, so?
    2. No, they do not. If nothing else, one thing they do stop is optimization exercises on how high personal taxes can go. You go from the required services to the required taxes, not vice versa.

  25. Gravatar of Major_Freedom Major_Freedom
    31. May 2012 at 20:58

    Jim:

    Major Freedom, if you gave a concise, serious objection to arguments, people might listen to you. Instead you call people communists and ramble on.

    I didn’t call anyone a communist. I called someone a communist of money production. You do realize the difference, right?

    Communism is government ownership and control of the means of production. Well, for every means of production that exist, it is either owned and controlled by the state or it isn’t. Some means like money production are owned and controlled by the government, other means like rubber factories are not.

    Anyone who supports, fights for, advises, protects, every “positive” word you want to use to denote acceptance at any level, any instance of government ownership of a means of production, that person is a communist in that particular extent.

    Yes, this means MANY people hold communist ideals. But not everyone does, and so it’s not off-base for a non-communist in money production to call a communist of money production, a communist of money production. It’s accurate, it’s factual, and it’s not a straw man.

    Sometimes the truth hurts.

    dwb:

    o boy. here we go again. cue the 1400 words of frothing of the mouth austrian “no YOUR rambling on”

    It’s spelled “you’re”.

    Sorry to disappoint you, but unlike you, Jim didn’t accuse me of doing something he habitually does himself, so there was no reason for me to say that. You are a hypocrite in that sense, so I tend to send your garbage right back to you.

    Mike Sax:

    the classic Major Freedom move is to no matter what you say to him he comes back with NO! You are! So if you say geez Major why do you say X he comes back with I’m not saying X, you’re saying X!

    Like I said to dwb, you’re a hypocrite too, so that’s why I send your garbage back to you.

    Not everyone on this board is a hypocrite, but for some reason there is quite a number of you, so it only appears that I am doing what I do to you, to everyone else too.

    Major let me take on one point in your long disseration-a real disseration would be child’s play for you at lease based on length.

    I think at this point there is no reason to keep mentioning the lengths of my post.

    I know by now that you’re massively misinformed not only about economics in general, but that which you choose to criticize, but you don’t see me saying it every time. I have come to expect that from you now.

    So the lengths of my posts is something you’re just going to have to deal with. I type like a speed demon, almost 100 words a minute, so if we spend equal amounts of time typing, I end up typing more. If that upsets you, read faster. Complaining over lengths of passages is what a friggin child does when he is told to do his homework.

    I know your going to come back with “I don’t write long dissertations you write long dissertations.”

    Sorry to disappoint you yet again.

    This was something that Mao was about too-he called it “tit for tat.” You are a master of that at least.

    Boy you sure know how to ramble on about nothing substantive.

    You seem to have a penchant for spoiling the well with me. You keep name dropping various communists and putting them in your analysis of what I say, as if the mere unjustified juxtaposition somehow serves as a rebuttal to what I am saying.

    Regarding your diminishing marginal utility candard, it is an overhyped trope.

    What a puerile response. What’s the problem? You don’t have the intellectual wherewithal to make an educated argument? That’s it? “Trope”? Your trope is trope. See? You do exactly what you pejoratively accuse me of doing, so I send your garbage right back at you.

    So all that nonsense, and not a single economics argument to make. You’re weak.

  26. Gravatar of cthorm cthorm
    31. May 2012 at 21:14

    An Odd vice to have, this redistributionist bent. Milton Friedman had loads of criticism for the incentive destroying effects of welfare. Now, like Milton I’d support a concept like EITC/Wage subsidy because it’s an improvement of the existing method of redistribution, not because I agree with it in principle. In fact I think the notion of increasing value of a $ for the poor misses the point; the welfare effects of employment/entrepreneurship are not fully measured by dollar wages and thus insufficient weight is given to the incentive destroying effects of redistribution. There are signaling reasons to work (even if the wage is low), skill development, socialization benefits, attitudenal benefits, and creativity enhancement benefits. Working at Taco Bell can teach someone about process optimization, and who know what they’ll apply it to later. Remember Bastiat: there is what is seen and what is unseen.

  27. Gravatar of Edward Edward
    31. May 2012 at 21:53

    I can’t believe I’m doing this, but I’m actually going to have to agree with Major Freedom/Pete on this one. And cthorm.

    I think the error in your line of thinking scott, and of kimballs, and all progressives who use marginalism to justify redistribution, is forgetting the LIMITATIONS of D.M.U.. DMU, like D.R. (Diminishing returns) only applies when onse set of inputs is fixed and the other increases. For example, to be a little crass, imagine a factory with a fixed stock of machinery. There comes a point where addding more workers wont do any more good.

    Now back to the examples of rich man vs poor man. If dollars were like scoops of ice cream, and the amount of wealth was fixed forever like that factory example, than the argument would be true. But dollars are valued primarily for what they can buy, and the amount of potential wealth in the economy is infinite in the long run, limited only be desire and imagination. Its wrong to use DMU in the way progressives do, in a case that instead showcases INCREASING RETURNS.

  28. Gravatar of Major_Freedom Major_Freedom
    31. May 2012 at 22:34

    Edward:

    I can’t believe I’m doing this, but I’m actually going to have to agree with Major Freedom/Pete on this one.

    Get ready for the crapstorm, Ed. I can see it now, all my intellectual antagonists having red faces and steam whistling out of their ears, as one of their own does something other than mock and ridicule Major_Freedom.

    To quote Sumner, welcome to “la la land”, Ed.

  29. Gravatar of J.V. Dubois J.V. Dubois
    31. May 2012 at 23:33

    Very interesting topic. thanks for the links. However I agree with Karl. Reading the Kimball-Shapiro paper it seems to me that they put too much faith in the questionaire they devised.

    1) They put too much faith in people imagining hypothetical situations instead of studying real situations.

    2) Their results stem from majority of people choosing to quit to work if they have the same income as they have now in the survey. However this is not the same thing as to cease to work completely: only laying in their beds for the rest of their lives. Given sufficient income people may either switch their job, thay may fulfill their dreams like starting their own business, studying on the university, doing art or taking care of the children.

    If you look at it more closely it does not make sense. At the start of the study they write that labor supply did not react to rise in real wage across time, that consumption boom after WWII that from multiplying real wages changed the working hours only very modestly. And then they ask a person if they would quit working if they would receive their current monthly income from now on till they die for free. If the first assumption is true than the response to the question should be “no, it would not change the total labor supply that much”.

  30. Gravatar of Adam Adam
    1. June 2012 at 00:00

    As someone who has been casually reading Sumner’s blog recently, then seeing Major_Freedom misunderstand everything, it’s actually his post that bludgeons philosophy that I have to respond to, seeing as no one has done this yet, and seeing as he really has a child’s understanding of these philosophical concepts (including economic ones). Also, debating is fun!

    MF:
    “they are attempting to divorce the concept of marginal utility away from where it actually resides, namely the individual, and they try to put it onto some universal abstract collective blob”

    First, I really don’t think this type of “separateness or persons” type argument succeeds. I’ll let Princeton professor Richard Chappel respond:
    http://www.philosophyetc.net/2012/02/separateness-of-persons.html
    “….the famed “separateness of persons” objection to consequentialism rests on the confused assumption that commensurable values (ones that can be compared and traded off against each other) are thereby fungible values (such that a loss to one is not merely outweighed, but actually cancelled, by a greater gain to another). …[As an example of the objection] Connie has just enough anti-venom to save one of the two poison victims before her. … [R]ealizing it makes no difference to the total welfare, Connie finds herself totally uninterested in the question of who to save. It strikes her as no more normatively significant than the choice between a $20 bill or two tens. To many…such indifference seems inappropriate. We think that which person survives is a matter of normative significance, so that Connie is making a kind of moral mistake. …Critics are assuming, in effect, that consequentialists must follow Connie in treating the welfare of distinct persons as a mere number, … But … the fitting consequentialist agent would desire each good (separately) … The problem with Connie is that she doesn’t appreciate that each individual’s welfare is a distinct intrinsic good. She, in effect, only sees … — the aggregate welfare — whereas a more plausible consequentialist view holds that the aggregate is merely an abstraction from a great plurality of distinct intrinsic goods. … In this way, the consequentialist can fully appreciate the separateness of persons. They make tradeoffs between lives, seeing that a greater benefit to one outweighs a lesser cost to another, but that does not entail the benefit to one … cancel[ing] the loss to another, which is instead seen as a unique and irreplaceable source of regret. But it is not as regrettable as it would have been to forsake the greater benefit to another.”

    Second, let’s try to unpack this statement for what it means for value to “reside” in only the individual.

    A: This may be attempting to say that outcomes can only be good or bad for particular people, rather than being impartially bad, as in there is no sense in which we can describe an impartially bad outcome. I’ll let Derek Parfit, professor at Oxford respond:
    OWM, V.1., pg 372
    “we can explain such a sense [in which actions can be impartially bad]. When…we claim that some outcome would be impersonally best in the impartial-reason-implying sense, we mean that this is the outcome that, from an impartial point of view, everyone would have most reason to want,… . When we consider possible events that would involve and affect only strangers, our actual point of view is impartial. But we also have impartial reasons when our point of view is not impartial, as is true, for example, when we could relieve either our own or someone else’s pain.”

    B: You may be attempting to say that only the individual “experiences” pleasure. But this is not really true: I can “feel” your pain by empathizing or sympathizing with you, or by investing myself in how your life goes about. This type of experience can best be seen in parents caring for their children. It would be really hard to explain how parents ought not care for the marginal utility of their children, or to explain how her utility function at least isn’t related to their children.

    However, if the parent’s utility function is related to the child’s outcome, you have conceded consequentialism because one individual can have reason to promote the well-being of another.

    Moreover, this argument seems to confuse natural facts and normative facts, a type of is-ought fallacy. The natural fact is that an individual undergoes suffering. But this is not the normative fact that gives an agent a reason to relive the suffering. The reason that the suffering ought to be alleviated is because the individual is a sentient being who dislikes the state of being in pain. This other fact is the reason that the individual should be alleviated from suffering. Further, this other fact is agent neutral, in that it does not contain any reference to the specifics of the individual. It is perfectly consistent to weigh between multiple agent-neutral facts, which is what redistribution attempts to do.

    C: You may be making Nozick’s claim that “there is no social entity that undergoes sacrifice for others” or something along those lines. But anyone who understands consequentialism will realize that consequentialists do not claim the existence of this “collective blob” or this “social entity”. Consequentialists are making a completely different type of statement about what we have most reason to do. They believe we have most reason to maximize good consequences, defined as aggregate utility, rather than the existence of some concrete entity.

    MF:
    “It is no satisfaction to someone whose car has been stolen that now it is in the possession of someone who looks at it more often and with greater pleasure than he, the owner, would. The most intense pleasure of a thief is of no account to the owner.”

    First, I don’t think this case tracks any moral analysis. The problem is that you are using the term “stolen”, a term that carries a lot of normative baggage. When we use the word “theft”, we seem to presume that the “thief” has acted morally wrong. I think all consequentialists could agree that “stealing” in the sense of “unfairly taking someone’s possessions” is a moral wrong, while simultaneously agreeing that “redistribution” as in “fairly taking someone’s possessions for a greater moral purpose” is morally right.

    Second, your point seems to be “taxes are theft, thus all redistribution is theft”. However, the case with charity poses an interesting dilemma to this issue. If giving to others is morally required [please say you agree with this], then the problem with the rich man not being satisfied when his taxes are taken and given to the poor is a problem with the rich man’s moral psychology as opposed to the practice of redistribution.

    Other general MF (+ others) points / args.

    “This leads to socialism!”
    Not really. It is perfectly consistent to believe A) we should maximize aggregate utility and B) the free market with some redistribution, especially compared to socialism, is best at maximizing aggregate utility. SS and Milton’s view is sound. I think you would agree that socialism is comparatively worse at maximizing aggregate utility.

    “Absolute equality is bad!”
    I don’t think believing in redistribution equates to the belief that absolute equality is good. A good test case is the following:
    Imagine two worlds
    World A: Disparity in wealth; overall utility = 10
    World B: Equality in wealth; overall utility = 5
    I think everyone who agrees with the standard case of redistribution would also agree that world A is preferable to world B. The natural conclusion of the standard redistribution case is actually some form of “prioritarianism”, as first espoused by Derek Parfit. We can thus comfortably reject most of the socialist tenets. Regardless, the point still stands the Sumner’s and Kimball’s view is sound.

    “Libertarianism is about freedom!”
    Okay. You caught us. We can’t be act consequentialists. But we can still be rule consequentialists where the rule of “maximizing freedom” produces better overall consequences compared to a rule of “be socialist!”.

    “The change in utility is un-measurable because we are measuring different people!! (spooky ghost-face)”
    Seriously? You believe in Taurek? You aren’t economists? For a substantive answer, read Gregory F. Kavka’s paper called “The Numbers Should Count”. He completely demolishes this view. I don’t want to copy the paper to this blog, seeing as this post is already long enough.

  31. Gravatar of Mike Sax Mike Sax
    1. June 2012 at 02:35

    Major you’ve got it wrong

    “So the lengths of my posts is something you’re just going to have to deal with. I type like a speed demon, almost 100 words a minute, so if we spend equal amounts of time typing, I end up typing more. If that upsets you, read faster. Complaining over lengths of passages is what a friggin child does when he is told to do his homework”

    It doesn’t upset me as nothing you could say or do ever would. Consdiering the source 99.9% of what you say only amuses me.

    Your claim that somehow I’m a hypocirte-you must use a differnt vocaculary and linguistic system where hypocirte doesn’t mean what it means for normal people rhatther than Austrains who got hit by lightneing-so you come back with tit for tat “I know you are but what am I arguments” makes about as little sense as anything else you say.

    You yourself often usse “poinson the well” arugments so you might even say to your hypocrisy charge in classic MF form “I know you are but what am I!”

    That short post of mine was mostly levity-it made one economic argument which of course you didn’t asnwer was that your wrong about what you say about diminsishing marginal utility.

    So actually your long rambling post didn’t even have any economic arugments just the ususal “I know you are but what am I?” routine.

    “Sorry to disappoint you yet again”

    No Major you never disappoint me. I know in your mind human behavoir can never be predicted but you are in fact very predictable.

    “It is no satisfaction to someone whose car has been stolen that now it is in the possession of someone who looks at it more often and with greater pleasure than he, the owner, would. The most intense pleasure of a thief is of no account to the owner”

    That’s a poor example as if some rich fat cat has his car stolen his insurance will reompensate him. In your usual overwrought example you’d actually say that in a way there is a net gain assuming the theif isn’t caught and is actually able to keep the car and register it in his own name.

    Because our rich person is no worse off as he has insuranc and the thief in theory could be better off we’ve just had what you say never happens-a net gain. Of course the thief likely will either get caught or if he doesn’t, wont get too much use and enjoyment out of the car anyway if it isn’t registered-after all he’ll be a constant target of attntion for the police.

    ““If I lost $10,000, it would hurt me less if I were wealthy and more if I was poor. Since I am the “messenger” of the collective blob, I can say that the blob feels more pain when a poor man loses than when a rich man loses, and by the same token, the collective blob feels more pleasure when a poor man gains $10,000 at the expense of a rich man, compared to a poor man going without an additional $10,000 and the rich man keeping it.”

    Major nobody has to think anything so overwrought to understand marginal utility and few do who aren’t named Major Freedom. For someone who is so proud of his imaginary high powered intellect it’s amazing you have such a hard time grapsing such simple math.

    If I’m a millionare, a loss of ten thousand won’t hurt me as much as if this were my only ten thousand. Because you’re so obtuse you can’t get it doesn’t make this less obviously so. You apparently have never heard of proportion. If I have $20,000 and lose 10,000 that’s half my income-50%.

    If I have $2 million then $10,000 is .5% of my income. So in that case even in a literal sense it’s only worth one hudreth to me than the fellow with $20,000. If even this is over your head then your density is almost pathological.

  32. Gravatar of Morgan Warstler Morgan Warstler
    1. June 2012 at 03:31

    Adam!!!!

    I LOVE you, finally we get bit deeper… you are wrong in many ways, but I do like to see the endgame.

    “You may be attempting to say that only the individual “experiences” pleasure.”

    yes

    “But this is not really true: I can “feel” your pain by empathizing or sympathizing with you, or by investing myself in how your life goes about.”

    Ah, the reality is I can specialize in making you emp / symp whether you like to or not. You can arm yourself against my specialization, but at minimum it is an arms race.

    “This type of experience can best be seen in parents caring for their children. It would be really hard to explain how parents ought not care for the marginal utility of their children, or to explain how her utility function at least isn’t related to their children.

    However, if the parent’s utility function is related to the child’s outcome, you have conceded consequentialism because one individual can have reason to promote the well-being of another.”

    Here we see what great mistake made by all liberal discussion around inheritance, finally admitted to openly.

    Children with $150M homes as a demonstration has NOTHING to do what is fair. The child is but a luxury good bought and attained by the parent. The luxury, like all luxuries, is the REASON the parent strives, outperforms, wins at delivering value to us all.

    Nothing annoys me more than when liberals want to talk about the lottery of birth, as if the frame is meaningful. IT MEANS NOTHING.

    There are big giant stuffed animals at the skee-ball prize counter, your child having whatever they convince you of is in their interest, is your rational decision, (see above), but your child’s far easier life IS the giant stuffed animal for “most” people.

    We structure the entire economy around this paradox:

    1. Win and your progeny can have it easy. (Conservatives get their way on tax policy).

    2. Rich poodles should be freely eaten by Rottweilers (Consolation prize to liberals is a truly free market makes passing on wealth for generations very hard).

    PLEASE DON’T ruin your consolation prize by trying to fight over #1.

    If you ever find yourself thinking about what is fair for rich kids to get advantages of, you are fighting with the skee ball prize of human progress, BUT you can win less rent-seeking in the law, that makes it easier to see the rich child fail on their own economic bets.

    “Consequentialists are making a completely different type of statement about what we have most reason to do. They believe we have most reason to maximize good consequences, defined as aggregate utility, rather than the existence of some concrete entity.”

    Connie should save whomever it pleases her more to save.

    Connie has a emotive defense system of X (this is a wild variable).

    She can prefer redheads, because deep in her early neural network (0-12 months), she never heard the word NO, or was outright denied by a redheaded nanny that she doesn’t even remember. Without that effect, before she was ever actually a sentient being (Singer), she formed an unknowable not even measurable decision making shader that will trump whatever calculation she makes in a debatable example.

    Will she save a mouth foaming knife wielding redhead? Probably not. After that all rational decision making bets are off.

    It is much like the nature / nurture debate about being gay – surely prisons show us that after some extended length of human experience anything can be made sexy, but getting back into the billions of small “path of least resistance” decisions that a brain went thru ever night during REM cycles to help its consciousness “learn” or “navigate” made you as a side effect gay or straight is far more complicated than mapping a genome.

    In this way, we see the impossibility of thinking about the “consequentialist view”

    Because deep down we no more sure of “why” we are who we are in our own self than the measurable centralized decision outcome of Obamacare.

    Psychology is simply another form of power Adam. Conservatives, whether you like it or not, know this. As such, your argument fails.

  33. Gravatar of Major_Freedom Major_Freedom
    1. June 2012 at 04:07

    Adam:

    As someone who has been casually reading Sumner’s blog recently, then seeing Major_Freedom misunderstand everything, it’s actually his post that bludgeons philosophy that I have to respond to, seeing as no one has done this yet, and seeing as he really has a child’s understanding of these philosophical concepts (including economic ones). Also, debating is fun!

    Well, with a pompous introduction like that, this will only be even more gratifying that otherwise…

    “they are attempting to divorce the concept of marginal utility away from where it actually resides, namely the individual, and they try to put it onto some universal abstract collective blob”

    I really don’t think this type of “separateness or persons” type argument succeeds. I’ll let Princeton professor Richard Chappel respond

    http://www.philosophyetc.net/2012/02/separateness-of-persons.html

    Right off the bat Chappel shows he does not comprehend the problem. It has nothing to do with conflating commensurability with fungibility. It is rooted in recognizing the existence of minds other than your own, and concomitantly, the existence of humans other than you.

    Apparently you seem to have not moved beyond the mental maturity of a 4 year old. Psychologists have found that on average, it is around the age of 6 or 7 that children have developed a clear understanding of the difference between what they themselves know, and what others know. Those around 4 years old and younger assumed that what they know, everyone else knows, showing evidence of an inability to distinguish their minds from other minds.

    Did you just Google “separateness of persons”, and then cut and paste what you thought was a critique of what I said? Please tell me no.

    Second, let’s try to unpack this statement for what it means for value to “reside” in only the individual.

    To be accurate, value is not inherent in things. Individuals value by way of their actions. Valuation is a process of choosing among alternative ends. When I say reside only in the individual, it is a sloppy way of distinguishing between collectives and individuals.

    A: This may be attempting to say that outcomes can only be good or bad for particular people, rather than being impartially bad, as in there is no sense in which we can describe an impartially bad outcome.

    That “may be attempting” should read NOT attempting, because it does not presuppose ONLY good or bad outcomes. In actual fact, it’s that whatever outcomes happen to be, they will only ever be X to individuals, where X is good, bad, neutral, impartial, indifferent, etc.

    I’ll let Derek Parfit, professor at Oxford respond

    Do you honestly believe that off topic quoting of professors, and the universities they work at, constitute in any way a response to my arguments, let alone a challenge? You’re “letting” others speak for you. Really, if I wanted to know what these people thought, I’d send them an email, or read their literature. What do YOU have to offer besides red herrings and posturing?

    “we can explain such a sense [in which actions can be impartially bad]. When…we claim that some outcome would be impersonally best in the impartial-reason-implying sense, we mean that this is the outcome that, from an impartial point of view, everyone would have most reason to want,… . When we consider possible events that would involve and affect only strangers, our actual point of view is impartial. But we also have impartial reasons when our point of view is not impartial, as is true, for example, when we could relieve either our own or someone else’s pain.”

    This also has nothing to do with anything I said. This is just neoRawlsian claptrap regarding the decidedly unhuman, robot automaton conception of a being without any pre-existing ethics or morals or wealth, and then deciding upon ethical norms based on some outcome criteria.

    What the heck does ethics have to do with ontology? Normative with descriptive? Are you actually taking a dump on Hume and saying discussions of IS, entitles you to make statements of OUGHT, or infer that I am making a statement of ought?

    You may be attempting to say that only the individual “experiences” pleasure. But this is not really true: I can “feel” your pain by empathizing or sympathizing with you, or by investing myself in how your life goes about. This type of experience can best be seen in parents caring for their children. It would be really hard to explain how parents ought not care for the marginal utility of their children, or to explain how her utility function at least isn’t related to their children.

    This isn’t about oughts!

    That quote is also not a refutation of the notion that only individuals experience pleasure and pain. The idea that one can “feel” the pain of another – and please note the quotes around “feel”, which is strong evidence that the author thinks it is inappropriate to use the real word feel – is completely contingent on the individual’s values. If one’s values is such that they are NOT empathetic towards another individual, then they won’t “feel” their pain. The pain they feel is not some collective blob pain, it is their individual pain. For example, you almost certainly don’t “feel” any pain from the people who are being tortured right now. Why not? Because A. You’re not thinking of them (well, now you are), and B. You have shown your values to consist in posturing with me, and not feeling any pain of people dying right now as we speak.

    And if you did learn that another is in pain, you still won’t “feel” their pain UNLESS you have already decided to VALUE that person being healthy. It is not certain however. Call people sociopathic if they don’t have this supposedly “natural” connection all you want, you won’t be proving what you think you’re proving.

    However, if the parent’s utility function is related to the child’s outcome, you have conceded consequentialism because one individual can have reason to promote the well-being of another.

    On the contrary, there is nothing to stand in the way of the argument that the parent’s utility function is such that they derive self-interested happiness by seeing to it that their child is healthy. Plus, there is the counter-example of parents who completely abandon their children to promote their own happiness, or worse, even kill them. You have no ontological grounding. You’re responding with an ethical argument, to my epistemological and ontological argument.

    You don’t see a problem there? I sure do.

    Moreover, and more importantly, separateness of persons does not in any way PRECLUDE empathy, care-giving, or camaraderie. You do know of “methodological individualism” don’t you? It’s not a philosophy that says individuals are atoms totally isolated from society who hate others, or are indifferent to others. It only means that everything related to humans: thought, action, pleasure, pain, happiness, outcomes, gains, losses, and so on, are only valid with regard to real world referents, namely individual humans. Any discussion of the above concepts, the methodological individualist will understand them all to be the result, the effect, the attributes, of individuals. It does NOT necessarily mean “screw you, I got mine.” It COULD mean it, but it doesn’t necessarily. The same way that a philosophical collectivist COULD commit genocide in the name of society or whatever other abstract universal to which individuals are to serve, to sacrifice themselves to. But it doesn’t mean they necessarily do.

    Moreover, this argument seems to confuse natural facts and normative facts, a type of is-ought fallacy.

    I…I don’t even…really? Here I am talking about only “is” arguments, and you introduce ought arguments, and you tell ME I am confusing is and ought? That takes some gusto let me tell you.

    The natural fact is that an individual undergoes suffering. But this is not the normative fact that gives an agent a reason to relive the suffering. The reason that the suffering ought to be alleviated is because the individual is a sentient being who dislikes the state of being in pain. This other fact is the reason that the individual should be alleviated from suffering. Further, this other fact is agent neutral, in that it does not contain any reference to the specifics of the individual. It is perfectly consistent to weigh between multiple agent-neutral facts, which is what redistribution attempts to do.

    And? So far my argument stands. What is the relevant of all this? Do you know how to integrate quotes and arguments into your own discussions? Or do you just post quotes, and expect me to fawn and cowtow?

    C: You may be making Nozick’s claim that “there is no social entity that undergoes sacrifice for others” or something along those lines. But anyone who understands consequentialism will realize that consequentialists do not claim the existence of this “collective blob” or this “social entity”.

    They don’t have to explicitly claim it. It is IMPLIED in the arguments.

    Consequentialists are making a completely different type of statement about what we have most reason to do. They believe we have most reason to maximize good consequences, defined as aggregate utility, rather than the existence of some concrete entity.

    Aggregate utility implies utility of a collective concept, different from real world individuals.

    The very concept of aggregate utility is incoherent without individual utility. It suggests utility can be added and subtracted among individuals. Speaking of commensurability fallacies…

    “It is no satisfaction to someone whose car has been stolen that now it is in the possession of someone who looks at it more often and with greater pleasure than he, the owner, would. The most intense pleasure of a thief is of no account to the owner.”

    First, I don’t think this case tracks any moral analysis.

    Very good. It’s not supposed to.

    The problem is that you are using the term “stolen”, a term that carries a lot of normative baggage.

    OK, use any word you want, to describe an individual’s perceived legitimate claim to being the sole controller over that object. Regardless of the word you use, the individual still VALUES possessing it, or else he would not possess it. Another who takes possession of that object against the initial person’s consent/wish/desire/etc, it is of no satisfaction to him that the taker derives pleasure in possessing it. He will still experience/feel/perceive a LOSS.

    When we use the word “theft”, we seem to presume that the “thief” has acted morally wrong. I think all consequentialists could agree that “stealing” in the sense of “unfairly taking someone’s possessions” is a moral wrong, while simultaneously agreeing that “redistribution” as in “fairly taking someone’s possessions for a greater moral purpose” is morally right.

    You’re getting sidetracked on an inconsequential point. The point is about value, of what individuals value.

    Second, your point seems to be “taxes are theft, thus all redistribution is theft”. However, the case with charity poses an interesting dilemma to this issue.

    Charity implies property. You’re telling me it’s unwise or suspect to use the word “stolen”, because if its ethical implications, but you are using the word charity, which ALSO has ethical implications.

    At any rate, if you don’t like to think that using force to take someone else’s property is theft, or immoral, then you don’t even have to accept that the car is the rightful property of the person in question. You don’t even have to believe in property at all. That individual car owner/possessor/etc still values owning/possessing/etc the car more than not owning/possessing/etc the car, because it is implied in their actions of owning/possessing/etc the car! If they didn’t so value it in this way, they wouldn’t think to keep owning/possessing/etc it in the first place.

    If giving to others is morally required [please say you agree with this]

    I don’t agree with that, because it leads to death and the extinction of the human race, including myself. If it’s morally required to give to others, then everyone is morally forbidden to take from others. If one ACTS on that morality, then they would never be able to live and enjoy their life, because humans require resources to live and enjoy life as a matter of their biology and their desires.

    then the problem with the rich man not being satisfied when his taxes are taken and given to the poor is a problem with the rich man’s moral psychology as opposed to the practice of redistribution.

    No, the problem is with the thief who uses force to take what he did not earn. The problem is the psychology of social parasites, which you seem to adhere to. The practice of redistribution can be legitimately claimed as immoral if it is based on violence, and/or threats of violence.

    “This leads to socialism!”

    Where in the world did I say that? Oh that’s right, I didn’t.

    Ergo this:

    Not really. It is perfectly consistent to believe A) we should maximize aggregate utility and B) the free market with some redistribution, especially compared to socialism, is best at maximizing aggregate utility. SS and Milton’s view is sound. I think you would agree that socialism is comparatively worse at maximizing aggregate utility.

    I skipped over without even reading.

    “Absolute equality is bad!”

    Yet another claim I did not make. Ergo this:

    I don’t think believing in redistribution equates to the belief that absolute equality is good. A good test case is the following

    Is also something I skipped over without reading.

    Imagine two worlds

    World A: Disparity in wealth; overall utility = 10

    There is not such thing as aggregate utility. You’re telling me to imagine a world that I hold is impossible. You might as well tell a socialist to imagine the morality of capitalism.

    World B: Equality in wealth; overall utility = 5

    See above.

    I think everyone who agrees with the standard case of redistribution would also agree that world A is preferable to world B. The natural conclusion of the standard redistribution case is actually some form of “prioritarianism”, as first espoused by Derek Parfit. We can thus comfortably reject most of the socialist tenets.

    Regardless, the point still stands the Sumner’s and Kimball’s view is sound.

    Woah that came out of nowhere. You haven’t at all shown this to be the case. Sumner’s and Kimball’s view is not sound, because it violates established praxeological truths.

    “Libertarianism is about freedom!”

    Hey cool, another quote I didn’t say. Third time’s a charm, huh? As before, this:

    Okay. You caught us. We can’t be act consequentialists. But we can still be rule consequentialists where the rule of “maximizing freedom” produces better overall consequences compared to a rule of “be socialist!”.

    I didn’t read.

    “The change in utility is un-measurable because we are measuring different people!! (spooky ghost-face)”

    What kind of puerile nonsense is this? Spooky face? Is that how you conceive of philosophical arguments that differ from your own? As ghouls and scary people who are trying to scare you? Maybe that’s your subconscious that you’re scared of.

    Seriously? You believe in Taurek? You aren’t economists? For a substantive answer, read Gregory F. Kavka’s paper called “The Numbers Should Count”. He completely demolishes this view. I don’t want to copy the paper to this blog, seeing as this post is already long enough.

    Kavfa? Who?

    If he says numbers SHOULD count, that is just another moral claim. I am not making a moral claim. How in the world can Kavka’s morality “demolish” my arguments? A morality can only stand up against another morality. A morality cannot stand up against a descriptive argument.

    ….is that it? You quote three philosophers, and that’s it? That might work with your lazy tenured profs who don’t give a rat’s ass about the quality of the students they pass, but your method won’t fly with me. You’ll have to do much better than that. I smell BS a mile away.

  34. Gravatar of Major_Freedom Major_Freedom
    1. June 2012 at 04:11

    Morgan:

    Austrians need you Morgan. You seem to have what it takes philosophically. Leave the dark side and become a dogmatic, narrow minded, petulant, but informed, dilettante like me.

    You won’t win anything if the world becomes NGDP land. If it happens, it won’t matter if you were a supporter or not. You will however be on the record as supporting the latest in a long string of failures.

    Why do you need to feel like you’re on the winning team? If you’re not a central banker, you’re in the same boat as me.

  35. Gravatar of Morgan Warstler Morgan Warstler
    1. June 2012 at 04:53

    Becuase NGDPLT pisses on central bankers.

    MF, look there is a way to have the market, NGDP futures, determine which retail investor gets the newly printed money.

    The Central Banker and the Politician CAN cease to have any power with a fiat money system.

    At minimum, it is better than what we have now.

    And since it is more achievable, wanting it is rational.

    MF, my annoyance with my libertarian brothers is their unwillingness to fight dirty. If taxes are theft, then spending all the money before it goes to Dem voters is like Switzerland’s Civil Defense system.

    Blow up your own bridges, communications, etc. so the invading hordes see no upside.

    You can’t keep the second raters from trying to incite a mob, but you can starve the mob in iterative game play.

    Teaching individuals the mob can’t pay off…. is no different than teaching soldiers the king has no gold.

    I can see anarcho-capitalism a little better from NGDPLT, and she’s pretty and I like to sit as close to her as possible.

  36. Gravatar of Major_Freedom Major_Freedom
    1. June 2012 at 05:20

    Morgan:

    Becuase NGDPLT pisses on central bankers.

    How’s that? It hasn’t pissed on them with de facto NGDP targeting over the decades.

    MF, look there is a way to have the market, NGDP futures, determine which retail investor gets the newly printed money.

    Not everyone will be in a position of being able to buy NGDP futures. Wealth redistribution is inevitable.

    The Central Banker and the Politician CAN cease to have any power with a fiat money system.

    With NGDPLT?

    At minimum, it is better than what we have now.

    10 rapes a week are better than 20. Does that mean we should fight tooth and nail to get 10 rapes, or 0 rapes?

    And since it is more achievable, wanting it is rational.

    Abolishing central banking is just as achievable. All it takes is ideas and actions to change.

    MF, my annoyance with my libertarian brothers is their unwillingness to fight dirty. If taxes are theft, then spending all the money before it goes to Dem voters is like Switzerland’s Civil Defense system.

    NGDPLT doesn’t achieve that. Government can spend more and more out of NGDP, just like they have been doing since WW2.

    Capped money spending is insufficient.

    Blow up your own bridges, communications, etc. so the invading hordes see no upside.

    They’re already doing that.

    The thing that annoys me about beltway libertarians is that they believe fighting dirty can have a clean outcome.

  37. Gravatar of Morgan Warstler Morgan Warstler
    1. June 2012 at 06:15

    “Not everyone will be in a position of being able to buy NGDP futures. Wealth redistribution is inevitable.”

    Why?

    I say they have to sell them from ice cream carts at the mall, if Scott wants his plan to go through.

    So it happens.

    MF, the decider is always the 35% of America that pay the taxes – the producers, the Tea Party, whatever…

    The 1% as a bit player when it comes time to make decisions.

    And eventaully the way to SELL NGSPLT to them is that the new printed money goes to whoever buys the futures at the ice cream carts.

    It’s a the Vegas book baby.

    —-

    If you start from a pessimistic GS will still make the market mindset, you are carrying too much baggage.

  38. Gravatar of Jeff Jeff
    1. June 2012 at 07:53

    @Adam

    However, the case with charity poses an interesting dilemma to this issue. If giving to others is morally required [please say you agree with this], then the problem with the rich man not being satisfied when his taxes are taken and given to the poor is a problem with the rich man’s moral psychology as opposed to the practice of redistribution.

    In Christian theology, you give to the poor not because they need the money, but because doing so is virtuous. It’s a way of showing God your gratitude, one that Christ himself commanded. If you don’t like ethics based on religion, you can just say that giving to those less fortunate than yourself is a virtue.

    But actions can only be virtuous if they are voluntary. There is no morality without choice. There’s no virtue in doing something you are forced to do. Voluntary charity is virtuous, paying taxes that you are legally required to is not.

    And finally, mandating that someone else pay taxes so that you can redistribute them is just theft. For once I find myself in agreement with Major Freedom. Sure it’s legal, but that doesn’t make it right.

  39. Gravatar of Mike Sax Mike Sax
    1. June 2012 at 10:03

    “10 rapes a week are better than 20. Does that mean we should fight tooth and nail to get 10 rapes, or 0 rapes?”

    No what we should do is give up such useless analogies as taxes are theft or rape.

    In reality of course though that is the choice. No matter how hard you as a law enforcement officer may work there will never be zero rapes or murders.

    Gulliani here in NY broght the crime rate way down. However even he didn’t achieve 0 crime.

  40. Gravatar of Mike Sax Mike Sax
    1. June 2012 at 11:58

    Major your long winded answer to Adam was another great laugh. No it did not “upset” me I laughed heartily throughout.

    See I’m not uncharitable like you Major, I can admit that you are highly amusing like the perfect court jester.

    Just a few notes:

    You mentioned that you didn’t read a few passages of Adam’s quotes which is ironic. I mean the world’s most longwinded man skipped over someone else’s argument.

    ““This leads to socialism!”

    “Where in the world did I say that? Oh that’s right, I didn’t.”

    In case you haven’t heard of it sometimes it’s permissble to paraphrase. However here is that place in the world where you said it:

    “Socialist violence is so pernicious, because it feeds off reified philosophical concepts like this. It obliterates the individual, and so cannot but help view each individual as nothing but a cell in the greater Human organism where valuations reside, where gains and losses are made.”

    While I know you are the king of all the quibblers and you may try again to deny that you equated socialism with redstribution clearly you here equate redistribution not only with socialism but “socialist violence.”

    So you did say it despite your pious protestations otherwise. Don’t get me wrong you have most of us at a disadvantage. If you were skipping over Adam how easy do you think it is for others to shift through your deep well of baloney? Still for the heck of it I waded through a little.

    You also make a big to do over the distinction between IS and Ought arguments-that is ethics vs. ontology.

    You piously declare you make only ontological arguments. Obviosuly nohting is further from the truth. Your whole economic philosphy is suffused with the idea that it’s immoral to redistribute wealth or allow the government to distrot the market. This is seen clearly by your overwrought language here:

    “the problem is with the thief who uses force to take what he did not earn. The problem is the psychology of social parasites, which you seem to adhere to. The practice of redistribution can be legitimately claimed as immoral if it is based on violence, and/or threats of violence.”

    Clearly a moral arugment par excellence.

    “Sumner’s and Kimball’s view is not sound, because it violates established praxeological truths.”

    Well whether their view is sound or not sound we surely won’t figure out by referring to “praxelogical truths” as they themselves are unsound.

    “Moreover, and more importantly, separateness of persons does not in any way PRECLUDE empathy, care-giving, or camaraderie. You do know of “methodological individualism” don’t you? It’s not a philosophy that says individuals are atoms totally isolated from society who hate others, or are indifferent to others. It only means that everything related to humans: thought, action, pleasure, pain, happiness, outcomes, gains, losses, and so on, are only valid with regard to real world referents, namely individual humans.”

    Here Major you contradict your whole argument. This whole thing started because you tried to deny that “society” exists. However you actually are doing what you like to accuse me and others of doing-being “hypocritical.” Yet by using the word here clearly it was just such a hypocritical argument.

    “What kind of puerile nonsense is this? Spooky face? Is that how you conceive of philosophical arguments that differ from your own? As ghouls and scary people who are trying to scare you? Maybe that’s your subconscious that you’re scared of.”

    It’s not the normal way to approach “philosophical arugments that differ from your own” I can agree with that. But there’s nothing normal about your arguments. You are a pretty spooky guy it’s true. So maybe Adam can be forgiven.

  41. Gravatar of ssumner ssumner
    1. June 2012 at 18:52

    Tommy, The higher the NGDPLT target, the more likely they’d have to cut the base.

    Negation, I agree.

    Ron, It depends on which “society.”

    dwb, Thanks, I’ll take a look.

    Mike Sax, You said;

    “See because of what he says-most either are a or b, c is very rare I tend to mistrust talk about tax distortions reading them as mainly just a rationale for not doing a.”

    I appreciate your honesty. Most people aren’t willing to admit that their political biases distorts their view of reality.

    Krzys, You said;

    “You cannot be both Libertarian and Utilitarian. You are just the latter, since you have little respect for freedom.”

    I can’t be a dogmatic libertarian, I can be a pragmatic libertarian.

    Cthorn, You said;

    “An Odd vice to have, this redistributionist bent. Milton Friedman had loads of criticism for the incentive destroying effects of welfare.”

    Friedman favored giving welfare to people who choose not to work. I don’t. So all your criticism of policies that encourage people not to work actually apply to Friedman, not to me.

    Edward, I don’t follow your comment.

    JV, Can’t comment, haven’t read the paper.

    Adam, Thanks, I’ve given up on MF.

  42. Gravatar of Major_Freedom Major_Freedom
    1. June 2012 at 20:59

    Mike Sax:

    Major your long winded answer to Adam was another great laugh. No it did not “upset” me I laughed heartily throughout.

    Laughter is the best medicine for the pain, isn’t it?

    See I’m not uncharitable like you Major, I can admit that you are highly amusing like the perfect court jester.

    Sorry that you’re so upset that you have to tell me two times in a row that you are laughing to kill the pain.

    You mentioned that you didn’t read a few passages of Adam’s quotes which is ironic. I mean the world’s most longwinded man skipped over someone else’s argument.

    What was in quotes is not what I said, or even implied anywhere. Thus analyses of those quotes don’t concern me.

    ““This leads to socialism!”

    “Where in the world did I say that? Oh that’s right, I didn’t.”

    In case you haven’t heard of it sometimes it’s permissble to paraphrase. However here is that place in the world where you said it:

    “Socialist violence is so pernicious, because it feeds off reified philosophical concepts like this. It obliterates the individual, and so cannot but help view each individual as nothing but a cell in the greater Human organism where valuations reside, where gains and losses are made.”

    No, that is not me saying it. That is different. Saying that socialist violence feeds off reified philosophical concepts doesn’t mean it necessarily leads to socialism, any more than saying plaque feeds off sugar doesn’t mean sugar necessarily leads to plaque.

    While I know you are the king of all the quibblers and you may try again to deny that you equated socialism with redstribution clearly you here equate redistribution not only with socialism but “socialist violence.”

    If I’m the King of quibblers, you’re the Grand Dragon Master.

    I didn’t “equate” redistribution with socialism. For it is entirely possible for a petty thief to redistribute wealth, but that doesn’t mean socialism is taking place, or even that the thief is a socialist.

    You’re straw manning me.

    So you did say it despite your pious protestations otherwise.

    No, I didn’t, despite your dogmatic lucubration otherwise.

    Don’t get me wrong you have most of us at a disadvantage. If you were skipping over Adam how easy do you think it is for others to shift through your deep well of baloney?

    You haven’t shown how anything I said is “baloney.”

    And I will have no problems with you skipping over any analysis I write concerning a quote you never made.

    I wasn’t skipping over Adam’s entire post. Just the parts that concerned quotes I never made.

    Still for the heck of it I waded through a little.

    Don’t care.

    You also make a big to do over the distinction between IS and Ought arguments-that is ethics vs. ontology.

    Adam introduced it. He made a big to do over it by accusing me of committing a conflation of the two, despite the fact that it was he who conflated the two and it was me who pointed that out to him.

    You piously declare you make only ontological arguments. Obviosuly nohting is further from the truth.

    Obviously you’re wrong. And what’s with the constant use of the word “pious”? Do you even know what word connotes? I am an atheist. It is hardly an apt characterization.

    Your whole economic philosphy is suffused with the idea that it’s immoral to redistribute wealth or allow the government to distrot the market.

    Not even close. My argument is that forced redistribution does not create gains for the victims, and therefore any claim that forced redistribution somehow benefits “society” is wrong.

    As for morality, yes, it is immoral to initiate violence to take someone’s earnings away from them, on the silly basis that someone else wants it. It is beating back the redistributionists far enough and long enough that has enabled capital accumulation to finally take place on a wide enough basis to raise the productivity of labor so that the poor can be raised out of poverty and into prosperity.

    This is seen clearly by your overwrought language here:

    I don’t need to have what I wrote quoted back to me, unless you have an argument to make about it.

    “the problem is with the thief who uses force to take what he did not earn. The problem is the psychology of social parasites, which you seem to adhere to. The practice of redistribution can be legitimately claimed as immoral if it is based on violence, and/or threats of violence.”

    Clearly a moral arugment par excellence.

    It is not a moral argument. It presumes a morality for sure, but then so does your support for social parasitism. You support redistributionism on the basis that wealthy people “ought” to give, and if they don’t give, then they should be forced to give.

    “Sumner’s and Kimball’s view is not sound, because it violates established praxeological truths.”

    Well whether their view is sound or not sound we surely won’t figure out by referring to “praxelogical truths” as they themselves are unsound.

    You haven’t shown how they are “unsound.” Empty claims seem to be your only ability when the arguments move beyond superficialities such as your “I want, therefore I can take using force.”

    “Moreover, and more importantly, separateness of persons does not in any way PRECLUDE empathy, care-giving, or camaraderie. You do know of “methodological individualism” don’t you? It’s not a philosophy that says individuals are atoms totally isolated from society who hate others, or are indifferent to others. It only means that everything related to humans: thought, action, pleasure, pain, happiness, outcomes, gains, losses, and so on, are only valid with regard to real world referents, namely individual humans.”

    Here Major you contradict your whole argument. This whole thing started because you tried to deny that “society” exists.

    I didn’t deny society exists. I said society has no independent existence apart from individual humans, so when I say society exists, I mean individual humans making exchanges exist. Apart from that, society does not exist.

    However you actually are doing what you like to accuse me and others of doing-being “hypocritical.”

    Where? Where did I contradict myself and where am I a hypocrite?

    Yet by using the word here clearly it was just such a hypocritical argument.

    Oh I get it. You just made it up. Why am I not surprised.

    “What kind of puerile nonsense is this? Spooky face? Is that how you conceive of philosophical arguments that differ from your own? As ghouls and scary people who are trying to scare you? Maybe that’s your subconscious that you’re scared of.”

    It’s not the normal way to approach “philosophical arugments that differ from your own” I can agree with that. But there’s nothing normal about your arguments.

    Being right in a sea of wrong implies non-normality.

    You are a pretty spooky guy it’s true. So maybe Adam can be forgiven.

    Unlike you, at least I’m not advocating that guns be pointed at innocent people. So if I’m spooky, you’re even more spookier.

    Mike you know what I noticed? You’re more concerned with me than you are with economics and philosophy. Why?

    ssumner:

    Adam, Thanks, I’ve given up on MF.

    I’ve long ago given up hope that you will be right about money.

    I’m very glad that someone who is wrong has given up trying to brainwash me. Saves time and effort. Your population of potential victims is one fewer person than otherwise.

  43. Gravatar of The Costs of Taxation « azmytheconomics The Costs of Taxation « azmytheconomics
    5. June 2012 at 12:22

    [...] Kimball, Karl Smith, and Scott Sumner have been discussing the impact of taxation lately, and I wanted to comment a bit. Taxation is a [...]

Leave a Reply