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This is Pretty Cool...:

A while back, I liked to collect esoteric libertarian books; in the days before the internet and Amazon.com, there was something cool about finding an obscure book from the early days of the modern libertarian movement.

Unpacking today, I found a 1960 hardcover edition of "This Bread is Mine," by Robert Lefevre, one of early libertarianism's influential and colorful characters. As an added bonus, inside the book is a copy of the Winter 1973 (vol.1, no.1) edition of Lefevre's Journal. As an extra added bonus, an address label inside the book indicates that it once belonged to Howard Buffet of Omaha, Nebraska, Warren's son (also the name of Warren's father, but it turns out there is a note in the book from the bookseller that the book previously belonged to Warren's son).

Little Loca (mail):
The problem is, the bread is only his because of the structure and system that preexisted him and made his attainment of it possible. And voila, the fallacy of libertarianism: that we all start with the same opportunities.
7.28.2007 10:02am
OrinKerr:
Little Loca,

I'm curious: What libertarian thinks we all start with the same opportunities? I don't recall coming across that claim, so I'd be very interested in the source you have in mind.
7.28.2007 10:05am
cirby (mail):
It's funny - yesterday, I was talking to a younger gentleman about inequality, and his whole argument was based on equality of outcome, not equality of opportunity. When I pointed this out, he just sorta handwaved it and said, "well that's not important... opportunity doesn't matter."
7.28.2007 11:52am
Little Loca (mail):
Orin Kerr:

Allow me to clarify, though I think this point is rather obvious and might not advance the discussion very much.

Libertarians (for the most part) believe that we have the fundmental right to be free of interference with our life, liberty, and property. This sounds nice in theory, but in order to arrive at this place you need to take a step back--a step back that libertarians are not willing to take. Whence comes our property? Tracing it back, it inevitably comes from another source, i.e., someone else whose property was interfered with. That is, we are not born with property; we are born with life and that is it (liberty is debatable).

So, while libertarians will admit that we all start with different opportunities in life (inherited from our parents, let's say), they fail to recognize that if we trace those opportunities back far enough, at some point, in order to get that opportunity, a libertarian principle must have been violated. When your entire theory of how things should work is premised on something that violates your own theory, it suggests that your theory is flawed. Indeed, our "libertarian" forefathers had quite a different understanding of "property" and "freedom" when they were subjugating black slaves and taking land from native peoples.

There is SO much more to say, but let me just start there...
7.28.2007 1:21pm
cirby (mail):
Little Loca:

That "step back" thing is, I'm afraid, very silly.

You don't abandon a principle (or a good idea) just because, some time in the past, someone else broke it, or because you got some good out of it. I have no obligation to give up what I've gained through hard work (and, yes, luck and generous family support) just to give equal results to some schmo whose parents drank away their lives, and I don't deserve extra consideration because some rich kid started out with a giant pile of money.

I didn't personally do any of the things you accuse our forefathers of, so why should I have to do extra work or give anything up just to assuage your personal sense of politically correct fairness? Most of my ancestors, now that you mention it, were on the lower end of the power curve when it came to money and influence, so who do I jack up to get the extra resources that I "deserve" in your universe?
7.28.2007 1:48pm
Truth Seeker:
Little Loca, your flaw is you assume that all wealthy people inherited their money. In actuality, most millionaires are people who accumulated their money over a lifetime or made it quickly in some successful business venture. It is our (limited) freedom that allows this.

Intelligence, a strong work ethic, willingness to spend an extra decade in school, working evenings instead of watching TV all contribute to wealth, and none of these were taken away from someone else. These are not zero sum assets. People who drop out of school, take government handouts, cheat whenever they have the chance, waste time on TV and money on cigarettes are in no way taken advantage of by those who don't.

There aren't that many inherited fortunes. Much goes to foundations, as families expand it is broken down, many children of wealthy family squander their wealth.
7.28.2007 1:51pm
Truth Seeker:
To be more on topic, DB did you ever pick up Ayn Rand first editions?

It's interesting what ebay has done to the collectibles markets. While it gives you more potential buyers for your goods, it also has more competing sellers. So the rarest items are going up in price (more buyers, no other sellers) while the common items are going down in price (potential buyers see how many people have the same thing for sale).
7.28.2007 2:09pm
Little Loca (mail):
Truth Seeker and cirby:

The fundamental flaw with your premises is one we see echoed time after time after time in libertarian rantings. It portrays the poor as freeloaders that don't work hard and the rich as hard-workers sacrificing and saving to achieve the American Dream. Your extremes are the exception on both ends, not the majority.

Take, for example, the average white student at Harvard Law School. When he graduates, he will be able to work at a firm starting at $160K. Now, let's trace this average students background back a bit. In most cases, you will find something besides drive and dedication that brought this person where they are. Usually, it is on the backs of a minority: a woman, a black person, etc. who was turned down a job that he got (maybe not even knowing). Indeed, under your formulation Sandra Day didn't "work hard" enough and this is why, even graduating 3rd in her class at Stanford, she couldn't find a job. Who took those jobs? My money says a somewhat lesser qualified white man.

Cirby, you say you didn't personally do the things I "accuse" our forefathers of doing (it's interesting that you frame it as an accusation and not a historical fact, but I digress). If someone robs a bank and gives me the money that I know is from a robbed bank, am I morally inculpable?

Anyway, it doesn't matter because your postulate suggests racial superiority because it is well known that whites, on average, do better than blacks. If it is not because of the circumstances that have been thrust upon them by whites, then it must be that whites are somehow superior? This is incredibly interesting.

Lastly, I would agree that you don't abandon a good idea just because someone, sometime in the past benefited from violating it. But, alas, this is a gross oversimplification. It wasn't an isolated incident, but rather a systematic colonization and plundering of land and resources, which has led to the current distribution of property as well as the white privilege that allows a white man to get a job over an equally qualified woman or black man more often than not. That's the reality. Until you can disprove that, I think we're done here.
7.28.2007 2:48pm
Little Loca (mail):
I understand that it's easier for most of you to sit where you are and believe that you earned it all. I know that; that's why you chose to accept these fallacious premises. But, look at law professors, what are their origins? Supreme Court and other appellate clerkships...how many of those EVEN TODAY are really based on pure merit and not whose aunt is friends with which judge's wife. Where does that friendship stem from? From a hierarchy that has been put in place long before us and was put in place to exclude minorities and the poor.

And when you say that you were "on the lower end of the power curve," I have my doubts. Oftentimes one man's lower is another man's high up.

Lastly, I notice lots of support for Israel on this. Without taking a position on Israel-Palestine, let's not forget that in order for Israel to exist other countries had to band together and give (hand out?) Jewish peoples land in the form of reparations. Doing so, I would think, violates all libertarian tenets. Indeed, where are the reparations for blacks, for Armenians, for countless others. Of course, I am not downplaying genocide (that would be silly), I am just pointing out that Israeli state is the product of land-returning that I would think many of you pro-Israelis would certainly NOT support for native peoples.

I am not a fan of slamming the privilege door on the faces of everyone else once I squeeze my own butt in.
7.28.2007 2:56pm
Tony Tutins (mail):
Once, I argued the desirability of tax supported early childhood education with a rabid libertarian. He thought parents should provide for their children's education; that society was not responsible for training its future citizens. When I pointed out that, back in the day, he had received an excellent Berkeley engineering education at the taxpayers' expense, he saw no irony in claiming that the taxpayers got a good return on their investment in him. Then he drove off in his Porsche.
7.28.2007 3:00pm
e:
Loca,

Your view of racial divides ignores the historical divisions within races. More whites through history were poor than rich. Non-whites have taken part in their share of power mongering and enslavement of their own "race." You are correct that even poor whites in 1900 and 1960 had much greater opportunity in the US than others, but don't make the mistake of imputing a static view of society to 2007.

You talk of historical imbalances of opportunity as if we haven't gotten past many of them. Yes some are recent, but in contemporary North America, at least, businesses which would favor white male applicants won't succeed.

You seem to be of the mind that taking and redistributing property would be a big part of some solution. But this ignores the fact that most current wealth is not inherited and is the result of a society that allows great social mobility. Even if there were an instant equalization of resources in America, it would take less than a generation for disparities to reappear. Presumably then someone thinking like you will make another call to redistribute. Lovely incentive for people to work hard. Remember too that the opportunity to succeed also means that trust fund babies have the opportunity to fail, and often do an amazing job of losing that property to the next set of entrepreneurs.

You imply that wealth must have resulted from some historical violation of liberty. This ignores the trend away from land ownership as a major portion of wealth. The rich of this generation mostly got that way by providing a service desired and consumed by many. The more people served, the better idea. Even for real estate tycoons, your view ignores the use of credit as seed for smart moguls with modest or no inheritance.
7.28.2007 3:19pm
Truth Seeker:
then it must be that whites are somehow superior

Or maybe their culture emphasises eduction and hard work more than other cultures which emphasize getting a handout and getting by with as little work as possible?

But, look at law professors, what are their origins?

I believe that many on this site came from Russia and even Instapundit came from a broken middle class home. Could one of the professors here give us an estimate of what percentiage of professors are from wealthy families?

And how many qualified whites didn't get into Harvard or Yale because of affirmative action?
7.28.2007 4:05pm
Little Loca (mail):
Truth Seeker:

Riiiiiiight. That's it. African slaves didn't work hard at all picking tobacco and cotton to make white people rich. And Mexican immigrants don't work 12-16 hour days picking strawberries and working construction to provide for their families. Oh, and people that sit in cubicles all day staring at computers work a lot harder than people that work in physical capacities.

As for "culture," I have the following to say: don't forget that the majority of our "handout" monies go to whites, not minorities. Moreover, it is almost contradictory to say that one culture "emphasises eduction [sic] and hard work;" those individuals that get to participate in "higher education" rarely (if ever) know the meaning of "hard work." I don't think having everything done for you so you can study really qualifies as hard work.

Also, to call something cultural when there are people alive today (not 200 years ago, TODAY) who were denied education and equality even when they wanted it, is not only offensive, it's absurd. Was that a cultural choice they made?

As for the number of "qualified" whites that didn't get into Harvard or Yale because of affirmative action, I can't be sure. But, I can be sure that it's a lot less than unqualified ones that got in based on legacy. Moreover, as private insitutions, these schools (based on the laissez-faire model) should be able to admit whomever they want, right? So, what's your gripe?
7.28.2007 5:46pm
bellisaurius (mail):
Wow. Cool find, Dave. I especially like older books with inscriptions that give them a bit more history, too. Some of them really almost feel like museum pieces.
7.28.2007 6:44pm
cirby (mail):
Loca:

As a matter of fact, most of my ancestors WERE on the bottom end of things. I'm two generations out of people who picked cotton for a living, or who delivered ice for iceboxes. My father was an oil field worker who worked his way up to selling oil equipment. I've run into quite a few blacks during my lifetime who have the same (Norwegian) last name as I do, because when their families were freed, they took the names of the white families who lived next door and did the same sort of work - or married into each other's families, for that matter.

So your assumptions about my particular background are false. And offensive.

As you point out, most of the "handouts" go to whites. Because there are more poor whites than poor minorities. Gee, who'd have thought that math mattered?

And since you're whining about how libertarianism won't fix the previous inequalities from 100 years back, how do you propose fixing them? Take from the rich and give to the poor? Doesn't work, as pretty much the whole 20th century shows.

Do you want to prevent well-off whites from having a shot at financial freedom, to balance your sense of fair play? Also doesn't work.

What does work is letting people have the freedom to make their own way in life, without the government interfering. You might note that the biggest problems you cite (slavery, et cetera) were government-created issues... and that the minority citizens in the US who have "made it big" did so DESPITE government "help" - and the ones who are still at the bottom are the ones who took the most government handouts.

How do you get freedom and opportunity? Get the government the hell out of the way...
7.28.2007 6:48pm
Smokey:
Based on her/his pro-communist argument, Loca should go after Al Gore, the classic hypocrite poster boy [at least until John Edwards came along].

Anyway, I have a book titled The Incredible Bread Machine. It's a libertarian classic that absolutely deconstruct nanny state arguments. Written in 1974. I doubt if it's still available.
7.28.2007 8:30pm
Truth Seeker:
Smokey, is it the one by Brown. Keating et al or the one by R W Grant?
7.28.2007 11:24pm
Smokey:
Truth Seeker-

The authors are Brown, Keating, Mellinger, Post, Smith and Tudor. Based on a book by the same title by Grant.
7.29.2007 12:11am
American Psikhushka (mail) (www):
Little Loca-

Libertarians (for the most part) believe that we have the fundmental right to be free of interference with our life, liberty, and property. This sounds nice in theory, but in order to arrive at this place you need to take a step back--a step back that libertarians are not willing to take. Whence comes our property? Tracing it back, it inevitably comes from another source, i.e., someone else whose property was interfered with. That is, we are not born with property; we are born with life and that is it (liberty is debatable).

Finding the "original owners" of land would be problematic. Who was first? The first person over the Bering Strait land bridge? Do their ancestors hold title to all of the Americas? Some tribal groups in the Americas acquired their lands through warfare or pushing other tribal groups off it - who should be the owners in those cases? Go back far enough and we are dealing with the incomplete archaeological and fossil record, what then?

Most libertarians realize that the world wasn't a perfect place throughout history. They support a system of property rights that treats everyone as fairly as possible. And they certainly don't defend property theft, which is wrong. (At least people who are actual libertarians don't.)

The opposite of liberty is oppression or slavery, which for most people isn't "debatable". On the other hand you sound like a totalitarian socialist, so maybe in some twisted way you do find it debatable. Most people, certainly most libertarians, agree with you.

So, while libertarians will admit that we all start with different opportunities in life (inherited from our parents, let's say), they fail to recognize that if we trace those opportunities back far enough, at some point, in order to get that opportunity, a libertarian principle must have been violated. When your entire theory of how things should work is premised on something that violates your own theory, it suggests that your theory is flawed. Indeed, our "libertarian" forefathers had quite a different understanding of "property" and "freedom" when they were subjugating black slaves and taking land from native peoples.

This is problematic because you are calling for people to be accountable for the deeds of long-dead ancestors. This is problematic for all kinds of reasons. And it doesn't violate libertarian theory if you had ancestors that weren't libertarian. By your own logic you probably had ancestors that violate your particular political and economic views.

And claiming that all, or even most, opportunities are inherited from our parents is very problematic. There are lots of people that have opportunities that screw them up. And many people succeed despite their families or family background rather than because of them.

Take, for example, the average white student at Harvard Law School. When he graduates, he will be able to work at a firm starting at $160K. Now, let's trace this average students background back a bit. In most cases, you will find something besides drive and dedication that brought this person where they are. Usually, it is on the backs of a minority: a woman, a black person, etc. who was turned down a job that he got (maybe not even knowing). Indeed, under your formulation Sandra Day didn't "work hard" enough and this is why, even graduating 3rd in her class at Stanford, she couldn't find a job. Who took those jobs? My money says a somewhat lesser qualified white man.

And often it was a less qualified white male taking a spot from another white male in school or a job. Do those people have a grievance, or is it only minorities and women?

Cirby, you say you didn't personally do the things I "accuse" our forefathers of doing (it's interesting that you frame it as an accusation and not a historical fact, but I digress). If someone robs a bank and gives me the money that I know is from a robbed bank, am I morally inculpable?

Your examples are quite different. In the robbery case it is obvious that the benefit resulted from an illegal taking. When you are talking about ancestors your case crumbles. For the most part the benefits, if any, are very indirect. Inherited wealth may be different, but even then the ancestors might have created great value to earn that wealth.

It wasn't an isolated incident, but rather a systematic colonization and plundering of land and resources, which has led to the current distribution of property as well as the white privilege that allows a white man to get a job over an equally qualified woman or black man more often than not. That's the reality. Until you can disprove that, I think we're done here.

To an extent this occurred throughout history all over the world. And you know a lot of the deaths of Native Americans was unintentional, right? Whenever there was contact between Europeans and Native Americans there was a mortality rate of 80%+ among the Native Americans from disease. (Later some disease exposure was intentional, but the majority of it was not.)

And it ceraintly isn't the reality now that women or blacks automatically get passed over. Diversity is a goal of many organizations - now more often than not it is the white male getting passed over, often when they are more qualified. So that isn't the reality, but if you want to spew fallacies and say "we're done" feel free to, but you're wrong.

I understand that it's easier for most of you to sit where you are and believe that you earned it all. I know that; that's why you chose to accept these fallacious premises. But, look at law professors, what are their origins? Supreme Court and other appellate clerkships...how many of those EVEN TODAY are really based on pure merit and not whose aunt is friends with which judge's wife. Where does that friendship stem from? From a hierarchy that has been put in place long before us and was put in place to exclude minorities and the poor.

I don't doubt that there are some networks like this. But just as often they excluded other white males. You admitted yourself that there are more poor white people. Many libertarians don't support this.

And when you say that you were "on the lower end of the power curve," I have my doubts. Oftentimes one man's lower is another man's high up.

Doesn't matter. You have no more right trying to keep others from moving from lower middle "class" to upper middle or upper "class" than trying to keep someone else from moving from poor to middle "class". In both cases you're trying to immorally meddle with someone's life and liberty and violate their property rights. I sense that a lot of this is driven by envy and prejudice.

I am not a fan of slamming the privilege door on the faces of everyone else once I squeeze my own butt in.

Actually you are espousing policies that would make everyone poor. You seem to advocate weakening property rights. The result would be this - any time someone achieved success it would be taken from them by someone poorer than them or by the government. So eventually everyone but the government elite would be poor - which is exactly what happens in communist and socialist countries.

Riiiiiiight. That's it. African slaves didn't work hard at all picking tobacco and cotton to make white people rich. And Mexican immigrants don't work 12-16 hour days picking strawberries and working construction to provide for their families. Oh, and people that sit in cubicles all day staring at computers work a lot harder than people that work in physical capacities.

Don't know what you're getting at here. You may be making some claim about the labor theory of value, which is false. The market decides value. No one doubts that some forms of labor are more physically demanding than others.
7.29.2007 12:56am
Little Loca (mail):
If I have to hear one more complaint about a qualified white male losing his spot in a job or school setting, so help me...

The way you think affirmative action works is appalling and divorced from any factual basis. Count up the black people at Yale or Gibson Dunn and Crutcher and then get back to me about white kids losing their spots. Talk about victim complexes.
7.29.2007 1:48am
J. Kindley (mail) (www):
Little Loca is right insofar as libertarianism as it is commonly understood today is in need of serious correction. That correction is found in what is known as geolibertarianism (and its ancestor Georgism) and "left libertarianism." There is extensive information about these related political philosophies on the web.

Perhaps the best summary of geolibertarianism is Thomas Paine's assertion (in his essay Agrarian Justice)that "Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."

Hence comes the idea of the "single-tax" on the unimproved value of land, with the idea that it is to compensate the vast majority of humankind for the deprivation (since all the land has been deeded off to others before they were ever born) of their natural birthright to joint proprietorship in the earth, have been deprived of their access to this natural capital.

"Left libertarianism" similarly suggests the shakiness of the premises on which the traditional right to inheritance (and even the right to receive gifts) is based.

Libertarians would due well to remember that their individualist anarchist forbears, like Benjamin Tucker and Lysander Spooner, were no shills for capitalism, and recognized many of the problems Little Loca points out. They believed, however, that the state was the major and original source of most of these problems. On the other hand, as we hopefully move towards a more libertarian or even better a more anarchist society, steps can and must be taken in accord with natural justice that lead us towards a more egalitarian society (and certainly natural justice demands, not economic equality, but a far more equal society than the one we have now). Replacing income and consumption taxes with land value taxes, inheritance taxes, and gift taxes would surely move us far in this direction. And if we can't eliminate the income tax all at once, we should certainly start by eliminating income taxes on all the fruits of one's labor that are necessary to establish and maintain a reasonably decent and secure standard of living (say, on income up to the U.S. household mean).
7.29.2007 2:03am
American Psikhushka (mail) (www):
Little Loca-

If I have to hear one more complaint about a qualified white male losing his spot in a job or school setting, so help me...

You yourself admitted there are more poor white people, so by the numbers this does occur. And the example I used was white male losing a spot to less qualified white male.

The way you think affirmative action works is appalling and divorced from any factual basis. Count up the black people at Yale or Gibson Dunn and Crutcher and then get back to me about white kids losing their spots. Talk about victim complexes.

Whateverz. ;)

The example I used was white on white. And its interesting how with all the points I criticized you seized on one.
7.29.2007 4:45am
American Psikhushka (mail) (www):
J. Kindley-

Little Loca is right insofar as libertarianism as it is commonly understood today is in need of serious correction. That correction is found in what is known as geolibertarianism (and its ancestor Georgism) and "left libertarianism." There is extensive information about these related political philosophies on the web.....Perhaps the best summary of geolibertarianism is Thomas Paine's assertion (in his essay Agrarian Justice)that "Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."

I am somewhat familiar with these schemes and regard them as pretty anti-libertarian - basically collectivist and socialist. Man may not have made land but if one acquires land through his labors and value creation I really don't think he owes rent to the entire body of humankind. I don't think huge mankind-encompassing governments are going to be an improvement on the already-bad smaller ones.

Hence comes the idea of the "single-tax" on the unimproved value of land, with the idea that it is to compensate the vast majority of humankind for the deprivation (since all the land has been deeded off to others before they were ever born) of their natural birthright to joint proprietorship in the earth, have been deprived of their access to this natural capital.

This is quite socialist. So any landowner is going to have to pay for all of mankind's sins and mistakes? You know that socialism and corruption are the causes of a lot of the poverty anyway, and that creating more bureaucracy and payments are just going to keep the same people in power fleecing their people, right? I don't think that proposition is very thought out, even if it were managed by some international body it would likely be used as a stick and carrot to impose its opinions on recipient countries.

"Left libertarianism" similarly suggests the shakiness of the premises on which the traditional right to inheritance (and even the right to receive gifts) is based.

Many libertarians don't view inheritence as a problem, as long as the people in question acquired their money honestly - without force or fraud. These people created great value, they have a right to do with that what they wish as long as they aren't violating anyone's rights. This includes giving it to whomever they wish, including their family. What's shaky about that premise?

Libertarians would due well to remember that their individualist anarchist forbears, like Benjamin Tucker and Lysander Spooner, were no shills for capitalism, and recognized many of the problems Little Loca points out. They believed, however, that the state was the major and original source of most of these problems. On the other hand, as we hopefully move towards a more libertarian or even better a more anarchist society, steps can and must be taken in accord with natural justice that lead us towards a more egalitarian society (and certainly natural justice demands, not economic equality, but a far more equal society than the one we have now). Replacing income and consumption taxes with land value taxes, inheritance taxes, and gift taxes would surely move us far in this direction. And if we can't eliminate the income tax all at once, we should certainly start by eliminating income taxes on all the fruits of one's labor that are necessary to establish and maintain a reasonably decent and secure standard of living (say, on income up to the U.S. household mean).

In my opinion schemes that don't support free market capitalism and well protected property rights really can't be called "libertarian". That doesn't meant I support crony capitalism or corruption, which are clearly anti-libertarian. But I deem laissez faire market capitalism as essential for a scheme to be called libertarian.

While any tax above a relatively low baseline level tends to harm the private economy and therefore everyone except those that receive high direct payments, I'm curious about your choices for favored taxation schemes. Why do away with consumption taxes? Land and wealth taxes seem to be bitterly and enviously anti-wealth, and rooted in nonsensical class warfare arguments. I don't think you build a strong private economy that creates jobs, increases societal wealth, and raises the standard of living for everyone by strangling the goose that lays the golden eggs, or forcing it to leave.

I think that often when people look at the wealthy all they see is there own envy. They don't realize how crucial they are to the economy. There's some very wealthy people in North Korea, but only a handful, most of the people are pretty poor. There's a lot of wealthy people in the US, and the average person is much better off.

More rich people=Stronger economy and more societal wealth.
7.29.2007 5:31am
J. Kindley (mail) (www):
American P.:

I don't think your right libertarianism is particularly well thought out either, especially when you resort to ad hominem insinuations that class envy is really what is at the root of the types of things I've advocated. Right libertarianism and its knee-jerk prejudices are easily picked up by reading the most famous of libertarian texts and the pages of Reason magazine, while the corrective thought of geolibertarianism and left libertarianism takes just a little more thinking about justice and a little more digging (even if initially just by means of a Google search).

Milton Friedman has said, "In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago."

More rich people (i.e. relative to other people in the society) does not equal stronger economy. More middle class people does. Numbers of middle class people can still combine their wealth to finance the vast enterprises that appear to many to be driving the economy. Instead of just one or a few owners profiting from such enterprises, a multitude would.
7.29.2007 2:16pm
Duncan Frissell (mail):
Hardly an obscure book. We all had copies back in 1970.

But I guess not everyone was an early adopter.

I gather that some of the commenters here have never read "The Little Red Hen".
7.29.2007 2:37pm
Smokey:
Excellent posts, American Psikhushka. Well done.
7.29.2007 4:14pm
J. Kindley (mail) (www):
"Why do away with consumption taxes?"

Consumption taxes theoretically would be better than income taxes (though still worse than land value taxes, inheritance taxes and gift taxes) if they could be administered as a true luxury tax (as discussed by, inter alia, Adam Smith in the Wealth of Nations). Since poorer people must spend and consume a greater percentage of their income (i.e. on the necessities of life) than wealthier people, consumption taxes are inherently regressive. That's why any serious proposal for consumption taxes to replace the income tax must address its unfair regressiveness; e.g. the FairTax proposal includes government rebates to compensate lower income earners for all the taxes they paid in purchasing the basic necessities of life. Adam Smith, btw, rightly takes a more liberal view (e.g. than the view implied by the current paltry standard income tax deduction) of what constitutes the necessities of life -- it's not bare subsistence, but rather what constitutes a decent living in the society in which one lives. Hence, my conviction that whether you insist on a consumption tax or an income tax, no one (rich or poor, just to keep things equitable) should pay any taxes on those fruits of their labor that are necessary to establish and maintain a decent and reasonably secure standard of living (roughly, on income up to the U.S. household mean).

In addition to Thomas Paine's Agrarian Justice and Dan Sullivan's essay "Are You a Real Libertarian, or a Royal Libertarian?," I'd also recommend Andrew Carnegie's The Gospel of Wealth for just one example of a very rich man who recognizes that his vast wealth was not solely due to his own genius and invention but was in large measure due to the contribution of society as a whole.
7.29.2007 7:57pm
Little Loca (mail):
The problem with American Psikhushka and the other libertarians is that they take the disingenuous (and, indeed, tenuous) view that their predecessors "accidentally" violated the laws of libertarianism. Had their ancestors had it to do over again, they would not have seized land from native peoples or built their nation on slave labor.

Put another way, there is something just a tad bit fishy about enslaving people to amass wealth and taking land by force, and then, once you have the land and the wealth adopting a "theory" that one's property, liberty, and life should be protected against all others.

To put it in parable form...Boy sees basket of oranges, steals half of the basket and then says: "new rule, new rule...no one steal anyone's oranges for the good of society, our oranges are our property from now ON!," with orange juice dripping off of his smug lips.
7.29.2007 7:58pm
DavidBernstein (mail):
I don't know if anyone is still reading this, but I wonder (1) if we agreed to sell off and redisribute sufficient federal assets to equalize wealth in whatever manner Loca deems sufficient, whether he/she would then think libertarianism is okay; (2) why Loca things a statist system will necessarily be fairer to the "have-nots" than a libertarian system; it's not like the "haves" don't use the "system" to preserve their status.
7.29.2007 10:50pm
American Psikhushka (mail) (www):
Little Loca-

I'm going to answer you first because you were quite insulting and very wrong.

The problem with American Psikhushka and the other libertarians is that they take the disingenuous (and, indeed, tenuous) view that their redecessors "accidentally" violated the laws of libertarianism. Had their ancestors had it to do over again, they would not have seized land from native peoples or built their nation on slave labor.

Again, you're resting your arguments on claiming that all white people are descended from slaveholders and that all white people are responsible for stealing all the land.

First, many cultures practiced slavery at one point in history, including probably yours. Go back far enough and there are probably some ancestors that practiced slavery. That doesn't make it right, of course. It is outlawed everywhere today - rightfully - and anyone practicing it today is a criminal, among other things.

To my knowledge none of my ancestors have practiced slavery since coming to this country. Not that this means much, since as I stated above many cultures have practiced slavery at some point so nearly everyone, if not everyone, has an ancestor that practiced slavery at some point.

Again you raise the point of original ownership. Who rightfully owns the land? The first person over the Bering Strait land bridge? Whichever Native American tribe had taken the land by force when the Europeans came? You never answered these points because they illustrate some major problems with your argument. My guess is you won't answer them this time either, you'll just claim all of my ancestors are thieves and slaveowners with more arm-waiving, even though your ancestors likely were too.

Put another way, there is something just a tad bit fishy about enslaving people to amass wealth and taking land by force, and then, once you have the land and the wealth adopting a "theory" that one's property, liberty, and life should be protected against all others.

What about the Native American groups that amassed their land by force and enslavement? Do they own the land or are the people they stold it from the rightful owners? Or does it all belong to the "First Over the Bering Strait" family? As I said, it would be impossible to redress all injustices from the past. Libertarians support a system that protects property rights as much as possible now, in the recent past, and going forward.

To put it in parable form...Boy sees basket of oranges, steals half of the basket and then says: "new rule, new rule...no one steal anyone's oranges for the good of society, our oranges are our property from now ON!," with orange juice dripping off of his smug lips.

No, that parable is wrong for several reasons, see above.

Are you a Native American, Little Loca? You know there are extensive aid programs, the gaming licenses, etc. I know they got a raw deal but there have been attempts to address that. None of what they went through justifies them stealing from private citizens now - their dispute is with the government. And if some advocate targetting people for theft ethnically they are racists and ethno-supremicists.
7.30.2007 1:11am
American Psikhushka (mail) (www):
Smokey-

Thank you. There are no doubt people who could argue more effectively and eloquently than I do. I suspect they are busy.
7.30.2007 1:14am
American Psikhushka (mail) (www):
J. Kindley-

I don't think your right libertarianism is particularly well thought out either, especially when you resort to ad hominem insinuations that class envy is really what is at the root of the types of things I've advocated.

I was making that argument generally but you are correct, I didn't make this more clear and it was worded strongly, so it could be interpreted as an ad hominem attack. I apologize.

Milton Friedman has said, "In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago."

I disagree. And in this world where a lot of value is created in the digital world of information rather than the more physical world of property there is a good chance he could be wrong. Should we really tax farmers barely above sustenance levels but not successful software vendors with little real property?

More rich people (i.e. relative to other people in the society) does not equal stronger economy. More middle class people does. Numbers of middle class people can still combine their wealth to finance the vast enterprises that appear to many to be driving the economy. Instead of just one or a few owners profiting from such enterprises, a multitude would.

Actually its the combination of capital stock in society from both rich and middle class people. I was sloppy, but the point still stands - market economies create more of both rich and middle class people. But your focus is still on limiting people, which is socialist. The focus of the socialist and communist regimes has always been that - one huge middle class. But because they destroy the incentives by limiting people, trying to control the economy, and corruption they always seem to wind up with a wealthy political elite and a relatively poor populace. One poorer than most of the poor in capilalist countries due in large part to standard of living differentials.
7.30.2007 1:34am
American Psikhushka (mail) (www):
J. Kindley-

Consumption taxes theoretically would be better than income taxes (though still worse than land value taxes, inheritance taxes and gift taxes) if they could be administered as a true luxury tax (as discussed by, inter alia, Adam Smith in the Wealth of Nations). Since poorer people must spend and consume a greater percentage of their income (i.e. on the necessities of life) than wealthier people, consumption taxes are inherently regressive. That's why any serious proposal for consumption taxes to replace the income tax must address its unfair regressiveness; e.g. the FairTax proposal includes government rebates to compensate lower income earners for all the taxes they paid in purchasing the basic necessities of life. Adam Smith, btw, rightly takes a more liberal view (e.g. than the view implied by the current paltry standard income tax deduction) of what constitutes the necessities of life -- it's not bare subsistence, but rather what constitutes a decent living in the society in which one lives. Hence, my conviction that whether you insist on a consumption tax or an income tax, no one (rich or poor, just to keep things equitable) should pay any taxes on those fruits of their labor that are necessary to establish and maintain a decent and reasonably secure standard of living (roughly, on income up to the U.S. household mean).

Yes, I realize that if you're going to tax consumption you have to do it above a certain baseline level to focus on luxury consumption. I should have stressed this but as a libertarian it sort of sickens me to have to talk about taxes to begin with.

In addition to Thomas Paine's Agrarian Justice and Dan Sullivan's essay "Are You a Real Libertarian, or a Royal Libertarian?," I'd also recommend Andrew Carnegie's The Gospel of Wealth for just one example of a very rich man who recognizes that his vast wealth was not solely due to his own genius and invention but was in large measure due to the contribution of society as a whole.

I'll note them but to be honest I don't have the time to read them now.

Regarding the Carnegie book, I tend to think that is wealth guilt. Society is supposed to protect everyone's rights, including property rights. I don't know much biographically about Carnegie, so I don't know how "self-made" he was or how much it was due to other factors. But assuming he was largely self-made, it was mainly due to his genius, talent, discipline, persistence, etc. - whatever you want to call it. There were millions of other people with the same societal support that he had that didn't achieve what he did for whatever reason. Granted, there is some chance and randomness in all fields, but if he was self-made one has to conclude that it was largley due to his own talents.

I think that some people who achieve great wealth tend to become thoughtful and get to feel guilty about it. I invite them to switch places with someone who is having their property rights trampled on, they'll realize that "society" sometimes doesn't do squat for people. Sometimes "society" actually viciously destroys people rather than helps them. If they're truly self-made they'll realize that it was nearly all them. It might cause them to appreciate the property rights that made them what they are, and encourage them to honor and protect the property rights of others. Assuming they aren't hypocrites, which might be a big assumption.
7.30.2007 1:56am
David M. Nieporent (www):
Since poorer people must spend and consume a greater percentage of their income (i.e. on the necessities of life) than wealthier people, consumption taxes are inherently regressive. That's why any serious proposal for consumption taxes to replace the income tax must address its unfair regressiveness;
Of course, the rich consume a lot more than the poor, which means they pay a lot higher taxes than the poor. Some use the term "regressive" for this because they calculate taxes paid as a percentage of income, even when the tax isn't laid on income. But whether this is a good definition or not, it's just a label. It's hardly self-evident that this is "unfair"; that's a conclusion that has to be justified.

Little Loca:
Put another way, there is something just a tad bit fishy about enslaving people to amass wealth and taking land by force, and then, once you have the land and the wealth adopting a "theory" that one's property, liberty, and life should be protected against all others.
Well, hard to disagree with that. But it's hard to agree with applying it to a situation where the enslaving and theft happened centuries or millennia ago, and everyone alive today is likely the descendant of both perpetrators and victims, and the person who is rich may have been most recently directly descended from the slaves and the person who is poor may have been most recently directly descended from the slaveowner.


To put it in parable form... Boy sees basket of oranges, steals half of the basket, and then dies penniless a few weeks later after being beaten over the head by the basket owner. Two centuries later, Little Loca tries to take property from some random person and give to some other random person, on the theory that since we know a theft of oranges occurred two centuries ago, all property ownership is suspect and we can just redistribute at will.
7.30.2007 2:54am
Little Loca (mail):
Listen, Loca never advocated taking your precious land from you, so go ahead and put your rifle down, people. All I'm saying is that your theory has serious flaws in it that need to be addressed. There is so much to say, but I am afriad I don't have much time right now, but I will say this:

(1) It's unfair to cite to native american reparations (licenses, etc.) as a solution to the problem when your theory (libertarianism) would not allow for it. Stop taking credit for things that you are against.

(2) Centuries or millennia are exagarations my friend. Not only that, but we don't have to go that far back if you don't want. Give me five minutes and I will find you a stadium full of 50-something year old black people that weren't allowed to go to school with their white "peers" or even drink from the same fountains. How's that for "liberty"? Based on the well-known statistic that parents who are uneducated are unlikely to raise children who get educations, that explains a lot, doesn't it?
7.30.2007 10:34am
Tim Fowler (www):
Little Loca

Re: 1 - Its not unfair to cite native American benefits and reparations as compensation for past injustices. Libertarians aren't taking credit for such programs. They are pointing out that they exist, and have existed. If such programs really are morally just and a proper response to past injustices (which is an idea that can be reasonably disputed) the fact that libertarians generally don't support them, doesn't mean that in your response to libertarians you should act as if they don't exist.

Re: 2 - Centuries or millennia aren't exaggerations for many of the injustices that where mentioned. Talking about the very severe injustices from such a relatively distant time, doesn't mean you are asserting that there are no more recent injustices or examples of unfair treatment or discrimination. But you fail to make an effective argument (or much of an argument at all) for the idea that because someone went to a segregated school, and wasn't allowed to use certain water fountains, that libertarianism is a bad idea, is immoral, or doesn't work.

People where discriminated against. OK, that's accepted as truth. So how does that one negative action justify further negative action? I didn't force anyone in to a segregated school. I didn't cause or support the discrimination and injustice you complain about. Why should action be taken against me because of this past injustice?

Most of the injustice was performed by people who are long dead, against other people who are long dead. Less extreme injustice was performed by currently living people against currently living people, you might try to make some sort of argument that the still living people should face some sort of justice, but even if this idea is accepted (and its very problematic, as most of the injustice we are talking about was legal, and in any case trying to figure it all out, and compensate for it or punish it now would be a major mess in a practical sense), that doesn't provide any justification for going against people who where uninvolved in the injustice, and it doesn't amount to an effective argument against libertarian thought.
7.30.2007 2:02pm
Steve2:

It's funny - yesterday, I was talking to a younger gentleman about inequality, and his whole argument was based on equality of outcome, not equality of opportunity. When I pointed this out, he just sorta handwaved it and said, "well that's not important... opportunity doesn't matter."


Cirby, have you considered the possibility that he's aware of the difference between equal opportunity and equal outcome, but considers equal outcome more just or otherwise more desirable?
7.30.2007 2:11pm
Little Loca (mail):
Re: opportunity. It is so incredibly startling to see a group of people get on this board and talk about "equality of opportunity," arrogantly patting themselves on the back for their "accomplishments."

Let's put it this way: Let's rewind time, tell your parents they can't work at certain jobs, can't go certain places, and can't go to school. Let's treat them (and YOU today) as second class citizens. And then let's start you off like that and then let's hear you talk about equality of opportunity.

Also, I think it's perfectly reasonable to disallow someone to argue that their system (libertarianism) works by relying on benefits that exist IN SPITE of their system and that directly contradict their system. Actually, I don't think there's any other reasonable way to treat that information.

Last, I'd point out that it doesn't matter that you didn't force anyone into a segregated school or live off slave labor, your ancestors, nay, your parents did. Your parents went to school everyday knowing that no black people were allowed in their precious white-only school. They were complicit. All the fruits from your parents being middle-class (or higher in most cases) are fruits from a poisonous tree. Plain and simple.

It's very easy to support a theory that allows all your precious property to be uninterfered with when you HAVE PROPERTY. But, I dare say you'd be singing quite a different tune if you were propertyless.

The problem with libertarianism is that it assumes an equality of opportunity that simply does not exist. Not only does it not exist, it probably can't ever exist, because as much as you deny it people are getting rich off of the impingement of other people's property and liberty. Corporations outsource work to poorer countries, but why are those countries poor, they were colonized and oppressed by (whom?) the very people who exploit them now.

This is futile. The rich will always find ways to justify keeping and preserving their unearned wealth. This is no different.
7.30.2007 2:30pm
John Kindley (mail) (www):
"I don't know much biographically about Carnegie, so I don't know how "self-made" he was or how much it was due to other factors. But assuming he was largely self-made, it was mainly due to his genius, talent, discipline, persistence, etc. - whatever you want to call it."

He was indeed a self-made man. His point in the Gospel of Wealth was that the very scale of modern industry rewards the managers and financers of such industry to an extent that is out of proportion with their genius, talent, etc. Surely it takes a lot of talent to make profitable large enterprises and those who are able to do it are justly rewarded handsomely by the economy, but his point again was that the size of the rewards are excessive and are due to scale rather than genius, and that this very scale is made possible by the infrastructure and the contribution of society as a whole. Bill Gates, Sr. and Warren Buffett have made similar observations.
7.30.2007 4:22pm
John Kindley (mail) (www):
"But your focus is still on limiting people, which is socialist."

You've read me wrong. My focus is just the opposite. In the natural free society, an eighteen year old man embarking on the world would be able to find a plot of ground and plant a field and build a house on it. (According to the Lockean Proviso, this only becomes a problem when the appropriator hasn't left enough and as good land for others, which is indeed the case in modern society.) He wouldn't have to buy it from somebody else and take out a mortage and pay interest, starting his life from less than zero and in hock. As Thomas Paine pointed out in Agrarian Justice, the cultivation of the earth and fencing off of the majority of the land thus cultivated was good for society as a whole, making it more productive, but it didn't change the fact that this system of landed rights dispossessed and excluded and "limited" many from their natural right to joint proprietorship in the earth. Compensation is therefore owed.

You're right that modern society is not nearly as dependent on the capital value of land as were more agrarian societies. Two points however: First, the "value . . . created in the digital world of information" is indeed value created out of the products of one's own work and ownership of self, which is quite different than the value of natural resources such as land. Second, a system of land value taxation on the unimproved value of land would not burden farmers relative to other industries nearly as much as you think it does. E.g. the land value tax on a prime piece of real estate in Silicone Valley would be much higher than on many more acres of farmland in rural Ohio.
7.30.2007 4:54pm
David M. Nieporent (www):
Let's put it this way: Let's rewind time, tell your parents they can't work at certain jobs, can't go certain places, and can't go to school. Let's treat them (and YOU today) as second class citizens. And then let's start you off like that and then let's hear you talk about equality of opportunity.
Uh, my parents were told that. Did you really think black Americans were the only people in history who were discriminated against?

Last, I'd point out that it doesn't matter that you didn't force anyone into a segregated school or live off slave labor, your ancestors, nay, your parents did.
Uh, no, they didn't.
Your parents went to school everyday knowing that no black people were allowed in their precious white-only school.
My parents didn't go to a white-only school.
They were complicit. All the fruits from your parents being middle-class (or higher in most cases) are fruits from a poisonous tree. Plain and simple.
Simple-minded, anyway. Even IF your stereotyped view of world history were accurate, how exactly is the success of a white person who dropped out of high school and bummed around for years doing odd jobs before getting himself together, starting up a business, and becoming successful, fruit of the poisonous tree? It's not enough to show a bad thing happened to person X to demonstrate that person Y's success is a result; you have to show a causal relationship between the bad thing and the success.

Individual behavior far outstrips history in terms of one's opportunities. Bill Gates had a very comfortable upbringing, and that certainly contributed to his success. But the idea that his comfortable upbringing somehow is the primary cause of his wealth is loony. There are millions of Americans who grew up as well off as Bill Gates. What separates them is Bill Gates' actions.

Corporations outsource work to poorer countries, but why are those countries poor, they were colonized and oppressed by (whom?) the very people who exploit them now.
False. They're poor because they pursue bad economic policies. All you have to do is look at Latin America, or East Asia, or Southern Europe, or Ireland, to see that. Or the former Soviet-dominated Eastern European countries. Good economic policies lead to economic growth; bad ones don't.
7.30.2007 6:16pm
John Kindley (mail) (www):
I just re-read Carnegie's The Gospel of Wealth and he doesn't say precisely what I had remembered him saying. He does say that the ultra-wealthy man holds his excess wealth in trust and should administer it during his lifetime for the benefit of society, and that the man who dies rich dies disgraced. He does say that the giant scale of modern industry inevitably means that the captains of such industry will accumulate giant wealth, but he doesn't explicitly say that the size of such rewards are disproportionate to their merit and are due in significant part to the infrastructure and contributions of society as a whole. Rather, that latter idea has been explicitly expressed by, among others, Bill Gates Sr. and Warren Buffet.

In any event, I didn't mean to suggest that I wholly or even largely endorse Carnegie's The Gospel of Wealth, e.g. his notion that a philanthropical captain of industry will make a better and more beneficial use of a particular sum of money than his workers would make of the same sum if it had been dispersed among them in the form of higher wages or profit-sharing.
7.30.2007 7:45pm
American Psikhushka (mail) (www):
Little Loca-

(1) It's unfair to cite to native american reparations (licenses, etc.) as a solution to the problem when your theory (libertarianism) would not allow for it. Stop taking credit for things that you are against.

False assumption. Libertarians are against force or fraud and have no problems with contracts being re-negotiated. So to the extent that these programs were the result of contract negotiations or re-negotiations, reparations, damages, and the like for legal claims, and similar mechanisms there is nothing that is essentially anti-libertarian about it.

(2) Centuries or millennia are exagarations my friend. Not only that, but we don't have to go that far back if you don't want. Give me five minutes and I will find you a stadium full of 50-something year old black people that weren't allowed to go to school with their white "peers" or even drink from the same fountains. How's that for "liberty"? Based on the well-known statistic that parents who are uneducated are unlikely to raise children who get educations, that explains a lot, doesn't it?

First of all, that wouldn't have happened in the first place under libertarian principles, so if you're linking it to libertarian principles somehow you are wrong.

The school segregation issues have been dealt with legislatively. There are a number of private charities that help with scholarships. And again there are government programs to set-up to address the inequities from earlier times.
7.30.2007 7:48pm
American Psikhushka (mail) (www):
Little Loca-

Let's put it this way: Let's rewind time, tell your parents they can't work at certain jobs, can't go certain places, and can't go to school. Let's treat them (and YOU today) as second class citizens. And then let's start you off like that and then let's hear you talk about equality of opportunity.

I'VE been told that and had some of those things done to me. My situation is somewhat unique and its going to be redressed, but some of that did happen to me.

And listen - I know there are social networks and the like that make "equality of opportunity" a joke - and I'm white. But many libertarians don't support this or at least recognize it is somewhat unfair, although some libertarians that are part of those networks might not.

Also, I think it's perfectly reasonable to disallow someone to argue that their system (libertarianism) works by relying on benefits that exist IN SPITE of their system and that directly contradict their system. Actually, I don't think there's any other reasonable way to treat that information.

False. As I noted above, the problems those benefits address wouldn't have occured in the first place if libertarian policies had been followed.

Last, I'd point out that it doesn't matter that you didn't force anyone into a segregated school or live off slave labor, your ancestors, nay, your parents did. Your parents went to school everyday knowing that no black people were allowed in their precious white-only school. They were complicit. All the fruits from your parents being middle-class (or higher in most cases) are fruits from a poisonous tree. Plain and simple.

This is nonsense, my parents weren't complicit in anything. They came from a rural area and were not well off - there were no black people around. Not by choice or anything, there just weren't. They were the first generations in their families to make it to college. There's nothing poisonous about what they achieved.

It's very easy to support a theory that allows all your precious property to be uninterfered with when you HAVE PROPERTY. But, I dare say you'd be singing quite a different tune if you were propertyless.

I don't have much and if I was singing that tune I would be very wrong. Anyone that wants to weaken property rights isn't thinking very clearly. If you weaken property rights then even you can't succeed - if you succeed someone poorer or the government is just going to claim that they need to take what you have and give it to someone poorer. And this eventually degenerates into what you have in communist countries - everyone but a small political elite is basically poor.

The problem with libertarianism is that it assumes an equality of opportunity that simply does not exist. Not only does it not exist, it probably can't ever exist, because as much as you deny it people are getting rich off of the impingement of other people's property and liberty. Corporations outsource work to poorer countries, but why are those countries poor, they were colonized and oppressed by (whom?) the very people who exploit them now.

Lots of problems here. Libertarianism doesn't assume equality of opportunity, it tries to foster it as much as possible. Libertarianism does not involve getting rich off of other people's property and liberty, that notion is false.

Many of those countries are poor because of corruption and the deeply flawed economic policies that you yourself advocate. You want to make a country poor? Weaken property rights and start practicing socialism and similar policies.

This is futile. The rich will always find ways to justify keeping and preserving their unearned wealth. This is no different.

And if they acquired their money honestly - not using force or fraud - their wealth is not "unearned" and they are right to want to keep it. And they are providing a valuable service to society by providing capital stock.

You seem to have a misunderstanding of what libertarianism is and what it means. Maybe we would get somewhere if we started with that.
7.30.2007 8:22pm
American Psikhushka (mail) (www):
John Kindley-

Answering Loca took some time and I didn't get a chance to respond to your points last night.

He was indeed a self-made man.

Well there are different levels of being self-made. As mentioned elsewhere in the thread there are certain networks that can make this much easier.

His point in the Gospel of Wealth was that the very scale of modern industry rewards the managers and financers of such industry to an extent that is out of proportion with their genius, talent, etc. Surely it takes a lot of talent to make profitable large enterprises and those who are able to do it are justly rewarded handsomely by the economy, but his point again was that the size of the rewards are excessive and are due to scale rather than genius, and that this very scale is made possible by the infrastructure and the contribution of society as a whole. Bill Gates, Sr. and Warren Buffett have made similar observations.

You may be combining several factors here that in my opinion should not be. It's no secret that creating value for large numbers of people will make you very wealthy. For example Ray Kroc didn't make a great tasting hamburger, he made a good tasting hamburger that was still good tasting when it was cheaply and uniformly mass produced. There might be a successful hamburger shack in your city that makes the best tasting hamburgers on earth, but they won't create immense wealth unless that value can be mass-produced or reproduced on a larger scale.

So when you are talking about the creator or founder of an enterprise that has created great value for large numbers of people I don't have a problem with them being richly rewarded. Large Amount of Value Creation = Large Reward.

Now when we get past the original founders to the executives and managers that manage these enterprises the pictures changes, but only a little. They have to manage the brand, if their market is highly competitive they have to keep an eye on the competition, they have to oversee marketing, advertising, and research and development, etc. There is a lot of responsibility here, these are huge, valuable enterprises that employ a lot of people. And these enterprises still create a lot of value, so those managing them are responsible for a significant part of that. So we are still at something like: Managing the Creation of Great Value = Great Rewards. Althought arguments can be made that they should be compensated less than the founders, and this is usually the case anyway - the founders usually are large stockholders that have more wealth than the newer executives.

Now as far as executive compensation goes, I do believe the average CEO of medium to large size corportations is probably overcompensated, at least in the US. As for why this is, there is an ongoing debate about that. I don't think there is an efficient free market for executive talent - there are thousands upon thousands of people that could do those jobs, and many of the people that do those jobs don't perform very well. I believe the diffuse ownership of stock through index and mutual funds has vastly reduced the number of activist shareholders involved supervising the management of these companies. The shareholders, through the board of directors, are supposed to be the people reigning these managements in and keeping an eye on their spending, including the spending on their own salaries. That function has largely been hampered by the way most stock is held. Also there is the practice of employing compensation consultants, which has the effect of ratcheting executive compensation ever higher. There are also the social networks mentioned elsewhere in the thread.

So to summarize, I don't think creating value on a large scale means that you are cheating or taking advantage of anything. If you weren't creating value your product wouldn't be popular on a large scale. But as a sidenote I do agree that many CEOs are overcompensated due to a number of variables. So no, I don't think that "society" is responsible for a lot of success, in many cases wealthy individuals succeed despite society. Property rights and their protection are very important, but these are paid for many times over through the taxes paid by successful ventures.(Although I do admit there are gross inequities in the tax system.)
7.31.2007 11:14am
American Psikhushka (mail) (www):
John Kindley-

You've read me wrong. My focus is just the opposite. In the natural free society, an eighteen year old man embarking on the world would be able to find a plot of ground and plant a field and build a house on it. (According to the Lockean Proviso, this only becomes a problem when the appropriator hasn't left enough and as good land for others, which is indeed the case in modern society.) He wouldn't have to buy it from somebody else and take out a mortage and pay interest, starting his life from less than zero and in hock. As Thomas Paine pointed out in Agrarian Justice, the cultivation of the earth and fencing off of the majority of the land thus cultivated was good for society as a whole, making it more productive, but it didn't change the fact that this system of landed rights dispossessed and excluded and "limited" many from their natural right to joint proprietorship in the earth. Compensation is therefore owed.

But with the division of labor and efficiency of agricultural practices in modern capitalist economies these concerns do not really apply. The prices of agricultural products are so low that a young person wouldn't be able to live much above mere sustenance on a small plot of land. Individuals still have to rely on their labor, talents, etc., which they would have to as well if they had their own plot of land.

You're right that modern society is not nearly as dependent on the capital value of land as were more agrarian societies. Two points however: First, the "value . . . created in the digital world of information" is indeed value created out of the products of one's own work and ownership of self, which is quite different than the value of natural resources such as land. Second, a system of land value taxation on the unimproved value of land would not burden farmers relative to other industries nearly as much as you think it does. E.g. the land value tax on a prime piece of real estate in Silicone Valley would be much higher than on many more acres of farmland in rural Ohio.

I still don't think you would be left with a remotely equitable taxation system. You could have a software business that didn't own any of its own space - that relied primarily on people working at their homes and meeting in the boss's basement twice a week. You might argue that eventually land values would equalize to reflect this, but I don't know if that would necessarilly follow.
7.31.2007 11:36am
American Psikhushka (mail) (www):
John Kindley-

I just re-read Carnegie's The Gospel of Wealth and he doesn't say precisely what I had remembered him saying. He does say that the ultra-wealthy man holds his excess wealth in trust and should administer it during his lifetime for the benefit of society, and that the man who dies rich dies disgraced. He does say that the giant scale of modern industry inevitably means that the captains of such industry will accumulate giant wealth, but he doesn't explicitly say that the size of such rewards are disproportionate to their merit and are due in significant part to the infrastructure and contributions of society as a whole. Rather, that latter idea has been explicitly expressed by, among others, Bill Gates Sr. and Warren Buffet.

Well as I stated above I disagree that the wealthy hold their wealth "in trust" from society. Provided they did not acquire it through force or fraud but rather by value creation, anything they have has been earned and is rightfully theirs. I also disagreed with the notion that wealth achieved by creating value on a large scale is somehow less meritorious than creating value on a small scale. And the same with the notion that the creation of value is due mainly to the merits of society and not individual merit. If that were the case then nearly every individual would be wealthy, since we all live with the same societal backing. Clearly this reasoning is at least a little erroneous.

Private charity does a lot of good, and it is quite commendable if people are voluntarily giving their own money to it. (Taking money involuntarily from someone else and giving it to charity is obviously a crime, not charity.) And I understand that many wealthy people feel very grateful to those they feel enabled their success and have a desire to "give back" and this is also commendable. But claiming that anyone's success is wholly, or even mainly, due to "society" is quite an exaggeration in my opinion. Those kinds of statements are often the foundation used for collectivist theories and initiatives. Which is quite strange coming from people who could not have succeeded in a collectivist model - except maybe if they were in the political or politically-connected elite.
7.31.2007 12:02pm
John Kindley (mail) (www):
"The prices of agricultural products are so low that a young person wouldn't be able to live much above mere sustenance on a small plot of land."

But at least he wouldn't be forced to pay out a large percentage of his income in the form of rent to some landlord just to have a place to live, as is the case today.

"But claiming that anyone's success is wholly, or even mainly, due to "society" is quite an exaggeration in my opinion."

I didn't put it quite that strongly. Warren Buffet put it like this: if he had been born in a third world country without the societal and economic infrastructure of the U.S., despite all his talents he would have stayed pretty much as poor as everyone else in the country for the duration of his life. He is still responsible for his success, but part of his success is due to the contribution of society as a whole. Hence my belief that IF we're going to retain income or consumption taxes (instead of supplanting them entirely with land value, inheritance and gift taxes), it would be consistent with justice to not tax anyone on their income or consumption up to the U.S. household mean, even if that means that the entire income tax burden would fall on those making more than the U.S. household mean income. Keep in mind that like a good libertarian I think overall government taxing and spending should be drastically reduced.
7.31.2007 1:53pm