Thursday, September 20, 2012

Quotation of the Day: The Fallacy of Redistribution

From Thomas Sowell's column today (emphasis mine):
The history of the 20th century is full of examples of countries that set out to redistribute wealth and ended up redistributing poverty. The communist nations were a classic example, but by no means the only example.

In theory, confiscating the wealth of the more successful people ought to make the rest of the society more prosperous. But when the Soviet Union confiscated the wealth of successful farmers, food became scarce. As many people died of starvation under Stalin in the 1930s as died in Hitler's Holocaust in the 1940s.

How can that be? It is not complicated. You can only confiscate the wealth that exists at a given moment. You cannot confiscate future wealth -- and that future wealth is less likely to be produced when people see that it is going to be confiscated. Farmers in the Soviet Union cut back on how much time and effort they invested in growing their crops, when they realized that the government was going to take a big part of the harvest. They slaughtered and ate young farm animals that they would normally keep tending and feeding while raising them to maturity.

We have all heard the old saying that giving a man a fish feeds him only for a day, while teaching him to fish feeds him for a lifetime. Redistributionists give him a fish and leave him dependent on the government for more fish in the future.

If the redistributionists were serious, what they would want to distribute is the ability to fish, or to be productive in other ways. Knowledge is one of the few things that can be distributed to people without reducing the amount held by others.  That would better serve the interests of the poor, but it would not serve the interests of politicians who want to exercise power, and to get the votes of people who are dependent on them.

373 Comments:

At 9/20/2012 8:50 AM, Blogger Methinks said...

I would go further. I think I could argue that you can't even confiscate existing wealth. At least not the amount people think they can.

For example, Bill Gates's wealth is in the form of Microsoft stock and microsoft stock is the present value of (mostly) the future cash flows of Microsoft. You cannot, as Sowell points out, confiscate future wealth. Thus, the only wealth that can be confiscated is the relatively tiny amount of the value of Microsoft in the form of buildings and copiers, fax machines etc. To monetize that loot, you have to sell it to someone else or re-employ it in some other enterprise. By definition, it will be less profitably employed (or else it would have been employed in those pursuits in the first place).

So, redistributing current wealth is redistributing a tiny fraction of what people think of when they think of the wealth of "the rich" and redistribution is really just wealth destruction.

 
At 9/20/2012 9:26 AM, Blogger Storm'n Norm'n said...

This comment has been removed by the author.

 
At 9/20/2012 9:30 AM, Blogger Methinks said...

I dunno, Norm'n. Regardless of what happens to the value of the dollar, what Microsoft produces is real wealth. So, we can express it in terms of something else instead of dollars - chickens, Swiss Francs, automobiles, gold, etc. - and Bill Gates's net worth would still be positive.

 
At 9/20/2012 9:33 AM, Blogger PeakTrader said...

The Occupy Wall Street crowd should be blaming government for driving-up costs of health care, education, energy, and many other goods, along with raising taxes, fees, fines, fares, tolls, etc.

Moreover, government created the conditions for Wall Street to take greater risks with the knowledge it would eventually be bailed-out by government.

 
At 9/20/2012 9:36 AM, Blogger Che is dead said...

"If the redistributionists were serious, what they would want to distribute is the ability to fish, or to be productive in other ways." -- Thomas Sowell

They're only seriuos about their claim to power. The posture of concern for the well being of others is only a stratagem.

 
At 9/20/2012 9:39 AM, Blogger PeakTrader said...

So, we find ourselves in a situation where the U.S. economy is being propped-up by $1 trillion a year budget deficits, along with endless quantitative easings, which are unsustainable.

 
At 9/20/2012 9:42 AM, Blogger Che is dead said...

Let's see if we can make this easy for the "redistributionists" out there.

 
At 9/20/2012 9:43 AM, Blogger Storm'n Norm'n said...

I think the only reason this country is still somewhat afloat is that its the people's faith (and only hope) in the dollar...the dollar is actually worthless...so much so, that it could replace the defintion of a negative number (worth < 0). Now what if the people lost all faith and hope in the dollar how much would Bill Gates be worth? negative 0 perhaps? (LOL)

Sorry 'bout that (the deleted comment), I wasn't sure people would see the negative sign (-)

 
At 9/20/2012 9:49 AM, Blogger marmico said...

What a crock of bull.

Wealth (income) in the U.S. has been distributed upward to the 1% for the last 30+ years.

As a percent of the population aged 25+, college degree attainment has risen from 16% to 30% in the same time frame.

 
At 9/20/2012 9:50 AM, Blogger Che is dead said...

If they will not take Thomas Sowells word for it ...

"... Christina Romer, the first chair of Obama’s Council of Economic Advisers. In 2010, she published a study in the American Economic Review that said, “Tax increases appear to have a very large, sustained, and highly significant negative impact on output.” Romer found that, on average, every tax increase of one percent of GDP is linked to a three percent drop in real GDP over the next 10 quarters." -- Politico

They know, they just don't care. They have only one political strategy - confiscate the wealth of one group of Americans in order to buy the political loyalty and support of another.

 
At 9/20/2012 9:51 AM, Blogger Scott Drum said...

If you were a drug dealer would you fund a rehab center for your clients? Of course not. You want them to be dependent on what you are selling and come back for more. Politicians are in the business of selling palliatives that enhance their control over their constituents.

 
At 9/20/2012 9:56 AM, Blogger Moe said...

You cannot confiscate future wealth -- and that future wealth is less likely to be produced when people see that it is going to be confiscated

When Uncle Ben cranks up the printing presses, for which we are all on the hook - doesn't that confiscate future weath? Money that could be allocated elsewhere instead pays down the debt?

 
At 9/20/2012 9:59 AM, Blogger PeakTrader said...

Marmico, so, when the 1% gain more wealth, many more Americans obtain college degrees.

 
At 9/20/2012 10:13 AM, Blogger Buddy R Pacifico said...

"As many people died of starvation under Stalin in the 1930s as died in Hitler's Holocaust in the 1940s.

In 1930 the view for many idealists of Russia was giddy about state planning....

From the Virginia Quarterly Review, Summer 1930, Russia and the Five-Year Plan by Eugene Kayden:

"All theories aside, there is something striking in the spectacle of a great nation like Russia mobilized for construction and economic betterment on a scale so audacious as the Five-Year Plan. There is contagion in the very situation that for the first time in human history a nation is setting out on a program of economic and cultural advancement and the spirit of the people is aroused for the conquest of poverty, and ignorance. The challenge lies in the meaning of this effort of vast, integrated communal planning, by processes created by human intelligence and will, and inspired by the belief that in economic affairs the social welfare shall not be a precarious by-product of competition for private gain."

and...

"The new movement of planned economy constitutes an attempt to attach to the idealistic temper the pragmatic habit, to translate the democratic doctrine of the obligation of mutual service into concrete programs of emancipation and cooperation."


 
At 9/20/2012 10:15 AM, Blogger PeakTrader said...

I bet, the 30% of Americans who obtained college degrees earn a much higher income than those who didn't obtain degrees.

 
At 9/20/2012 10:19 AM, Blogger IowaBill said...

"Redistributionists give him a fish and leave him dependent on the government for more fish in the future."
Or, "Redistributionists give him a fish and insist that he pass his pole to the next guy because everyone deserves a turn."

 
At 9/20/2012 10:20 AM, Blogger morganovich said...

marmico-

your position is so untenable, it's not even wrong, just absurd.

you are assuming 2 processes are equal.

the wealth being "distributed up" claim can only be achieved one way: by offering people things they value. bill gates got rich by selling software that people valued more than its price. he got rich by making others better off. it's a positive sum transaction.

redistribution is negative sum.

you take from those good at making others better off and producing things of value and give to those who are not. this results in poor capital allocation, less output, and waste in the friction of government.

trying to treat creating goods and services of value and selling them to willing buyers who feel they are worth more than the price to the forcible taking and redistributing of wealth as the same thing in opposite directions is a completely false assumption.

the former makes the society better off, the latter makes it worse off.

our poor are no poorer than those in europe. by many metrics, our poor are as well off as their middle class.

http://www.coyoteblog.com/photos/uncategorized/2007/08/30/study2.gif

http://coyote-blog.com/wordpress/wp-content/uploads/2010/01/EUUSAHOUSEHOLDS.jpg

http://mjperry.blogspot.com/2010/01/eu-vs-usa-part-iv.html

this is precisely BECAUSE redistribution is a net neagative for an economy.

in any but the shortest timeframe it does not help the poor, it only harms the rich.

 
At 9/20/2012 10:32 AM, Blogger Krishnan said...

Thomas Sowell's logic is impeccable - impossible to refute - and yet the regressives will.

"Well, the farmers in the Soviet union stole from the poor people"

"The rich people in the US stole from poor people and got rich" (this does not explain how many people keep getting rich and per capita income keeps improving and life keeps getting better)

Sowell is right in that the primary aim of regressives is to make the rich poorer (i.e. redistribute some misery) - it has less to do with expropriating existing wealth.

Next to the Master himself (i.e. Milton Friedman), Thomas Sowell can explain profound ideas using simple language powerfully. Amazing.

 
At 9/20/2012 10:41 AM, Anonymous Anonymous said...

In theory, confiscating the wealth of the more successful people ought to make the rest of the society more prosperous.

Has anyone explained how redistribution makes the rest of society more prosperous "in theory"? As far as I've seen it explained, this is simply taken on faith and never proved, even theoretically.

The better statement would be:

"By assumption, confiscating the wealth of the more successful people ought to make the rest of the society more prosperous."

But then the idea that redistribution makes others more prosperous becomes mere tautology as that's the way you've defined it.

 
At 9/20/2012 10:50 AM, Blogger Larry G said...

re: " our poor are no poorer than those in europe. by many metrics, our poor are as well off as their middle class."

perhaps, except those in Europe do have universal healthcare and when someone has guaranteed health care.

Those who have guaranteed health care are much more free to pursue work in a wide variety of ways without having to shoot for only employers that provide health care or just not have it and essentially rely on EMTALA or MedicAid.

In fact, you can consider EMTALA as one of the biggest re distributive schemes in the world.

the other thing people should notice is who is getting redistribution because it's not primarily the stereotypical "welfare queens".

A good portion of the redistribution is the earned income and child tax credits that essentially give back income tax withholding to those with kids who earn less than 42K.

MedicAid, another redistribution scheme mostly pays for women with kids and the elderly poor who cannot afford MediCare premiums or nursing homes (which is not covered by Medicare).

It's EASY to huff and puff the Libertarian "no stinking redistribution" mantra.

It's not as easy making the cuts that would, at least in some folks minds, turn us into a 3rd world country - as there are no countries in the world that do not have redistribution schemes unless they are 3rd or developing world countries.

In other words, the ideal model for Libertarians for their "best" economic system, simply, does not exist. It's a deeply held - but equally deep myth.

If the Libertarian model that is being espoused really existed somewhere in the world, it would indeed be a powerful argument but the fact is that the countries that are most Libertarian are all 3rd world.

Even Singapore and Hong Kong have stiff payroll taxes and re-distributive (subsidized for low income) universal health care, right?

So perhaps, instead of saying "The Fallacy of Redistribution", we should say: "The Fallacy of not Redistribution" because all the world's modern and powerful industrial economies do, in fact, re-distribute.

right?

 
At 9/20/2012 11:04 AM, Blogger PeakTrader said...

Larry, why do you assume government universal health care is better than private health care with a government safety net?

We've seen what too much government has done to Europe and many other countries.

 
At 9/20/2012 11:05 AM, Blogger Methinks said...

our poor are no poorer than those in europe. by many metrics, our poor are as well off as their middle class.

You're being too conservative, Morganovich. Our poor are about as well off materially as the middle class in the vast majority of Europe.

The American middle class is much better off materially than the European middle class.

This is in part due to redistributive schemes but also because more and stricter regulation characteristic of European countries erects very large barriers to entry. You can't step to the right or the left. No wiggle room at all. And that stifles innovations and the risk taking necessary to create wealth (which will be confiscated anyway).

They can chase redistribution all they want in this country. They'll soon find little to redistribute and although that might sting the already rich and politically connected a tiny amount, it'll devastate the less rich and less well connected. As it has in most of Europe.

 
At 9/20/2012 11:06 AM, Blogger morganovich said...

larry-

that wealth measure is at PPP. free healthcare and other state services are already included in that

 
At 9/20/2012 11:08 AM, Blogger Methinks said...

perhaps, except those in Europe do have universal healthcare and when someone has guaranteed health care.

Yet, private health insurance is common to avoid wait lists - which is all they are really entitled to with "free" health care. And the rate of unemployment is higher. So you are free to a fruitless pursuit.

 
At 9/20/2012 11:10 AM, Blogger Larry G said...

" why do you assume government universal health care is better than private health care with a government safety net? "

well, I'm not assuming it - I'm looking at the realities.

do you have a country that does not have it that you'd hold up as a better way?

 
At 9/20/2012 11:12 AM, Blogger Larry G said...

" Yet, private health insurance is common to avoid wait lists "

Indeed. There is no rule that says you cannot pay more to get more but the basement is the UHC.

You get some basic level of HC. If you want more, then most countries allow you to pursue more/better if that is your desire.

 
At 9/20/2012 11:15 AM, Blogger PeakTrader said...

Larry, what "realities" are you looking at?

 
At 9/20/2012 11:20 AM, Blogger Larry G said...

@Peak, re: realities:

"do you have a country that does not have it (UHC) that you'd hold up as a better way?"

which countries in the world would you point to as better off economically than the countries that redistribute income and have UHC?

You have 200+ countries in the world.

what is the reality in terms of countries that do not redistribute income and have UHC (which is redistribution)?

what's are the realities?

 
At 9/20/2012 11:20 AM, Blogger Jet Beagle said...

Larry,

The U.S. has redistributed health care funds for decades. Nearly every state has long had some form of charity hospital or non-profit hospital which received taxpayer funds for providing charity care. Medicare has been redistributing funds for healthcare since 1966. Why are you offering Europe as a counter example to the U.S.?

 
At 9/20/2012 11:22 AM, Blogger Larry G said...

" Why are you offering Europe as a counter example to the U.S.? "

Well, because Europe, much of Asia, Australia, New Zealand and major industrialized countries in South America

ALL offer MEDICARE FOR ALL (rather than just seniors).

right?

 
At 9/20/2012 11:23 AM, Blogger Methinks said...

Indeed. There is no rule that says you cannot pay more to get more but the basement is the UHC.

Okay, do you understand that they're paying to sit on a wait list? That is, they pay for health care they are not getting. So, they are paying for something they are not getting. To get less than what you get here, they have to pay EVEN MORE than you do.

 
At 9/20/2012 11:25 AM, Blogger Buddy R Pacifico said...

Larry states:

"So perhaps, instead of saying "The Fallacy of Redistribution", we should say: "The Fallacy of not Redistribution" because all the world's modern and powerful industrial economies do, in fact, re-distribute.

right?"


Larry,

What assets, such as pension cash flow and real estate holdings, have you distributed to those needing distribution? Who are the recipients of these distributions?

 
At 9/20/2012 11:28 AM, Blogger PeakTrader said...

Larry, you need income before you can redistribute it.

Europe proved you can't keep borrowing forever.

 
At 9/20/2012 11:29 AM, Blogger morganovich said...

larry-

"
If the Libertarian model that is being espoused really existed somewhere in the world, it would indeed be a powerful argument but the fact is that the countries that are most Libertarian are all 3rd world."

this is yet another appeal to practice fallacy. this is not a valid argument. why are you so totally incapable of understanding that?

also: it did exist. the us was like that until the 30's. during that time, we went from being a colony to being the most powerful and successful nation on earth by promoting the rights of the individual and unleashing his creativity and productivity.

periods of big government (30's, 70's, recently) have been bad times. periods where it was being pared back (80's etc) boomed.

if you don't view that as compelling evidence, then nothing will convince you.

you are being deliberately obtuse here. if libertarian is 1 and communism is 10, and you move from 4 to 3 and gain or from 3 to 4 and lose, that tells you a great deal.

Columbia goes free market and right based and booms. Venezuela goes to socialism and big government and fails.

sweden and china and mongolia open up and boom. greece fails due to too big a state.

you keep tryign to claim that because there is no perfect example, the effects are not real.

there is no absolutely perfect diamond either. but the closer you come, the more value goes up.

you are also totally wrong about the 3rd world. those are not libertarian. they are failed states. libertarian government protects rights and provides fair and impartial adjudication of contracts and rule of law. haiti is not libertarian.

this has been explained to you over and over. i'm not sure why i bother doing it again except that this is so simple that literally anyone ought to be able to grasp it and deep down, i cannot believe that even you cannot.

repeat after me lar- no government is NOT the same as libertarian government.


 
At 9/20/2012 11:29 AM, Blogger Larry G said...

" Okay, do you understand that they're paying to sit on a wait list? That is, they pay for health care they are not getting. So, they are paying for something they are not getting. To get less than what you get here, they have to pay EVEN MORE than you do. "

wait list? you mean the folks without HC in the US don't have a wait list?

who knew?

seriously - if everyone gets a floor level of care and is free to buy "up", why is that bad?

Isn't that what some Canadians do?

they have basic care. If they want more/better, they come to the US.

right?

If you ask most Canadians if they'd give up their basic care - waiting lists and all, they are virtually all opposed to that idea.

 
At 9/20/2012 11:30 AM, Blogger Larry G said...

" What assets, such as pension cash flow and real estate holdings, have you distributed to those needing distribution? Who are the recipients of these distributions?"

did I say that?

 
At 9/20/2012 11:31 AM, Blogger Methinks said...

Lar,

I'll put it another way. I'm very mobile. Give me a computer, the internet and a brokerage account and I can make money anywhere in the world.

I have been taxed to pay for some level of really crappy healthcare for old people and the less wealthy (who have been cut out of the private health care market largely by the very government taxing me to pay for them). So far, I've voluntarily submitted to this servitude. Do you really think you'll be able to get me to pay for health care and housing and food and education and whatever else someone foolishly declares is their "right"?

You do not have a right to the product of my labour. That's a form of slavery. So, unless you plan to set up Gulags you're never going to be able to get enough wealth to redistribute to fulfill all of the promises. Sadly, the Gulags won't help either. They proved to be so inefficient, the USSR phased them out.

 
At 9/20/2012 11:31 AM, Blogger Larry G said...

re: " Larry, you need income before you can redistribute it.

Europe proved you can't keep borrowing forever. "

How about, Japan, Australia, Sweden, Finland, etc.

Are you saying JUST Europe or ALL the countries in the world that offer UHC?

be clear.

 
At 9/20/2012 11:33 AM, Blogger NormanB said...

Before Obama goes about the redistribution of wealth and income he should first have to produce it.

 
At 9/20/2012 11:33 AM, Blogger PeakTrader said...

Larry, government spending and borrowing every $2 for $1 of health care isn't worth it.

 
At 9/20/2012 11:33 AM, Blogger Larry G said...

re: " you keep tryign to claim that because there is no perfect example, the effects are not real"

nope.

I'm asking for the BEST examples...not the perfect ones.

and the answer keeps coming back.. that there are none but there used to be.

right?

 
At 9/20/2012 11:33 AM, Blogger NormanB said...

Before Obama goes about the redistribution of wealth and income he should first have to produce it.

 
At 9/20/2012 11:37 AM, Blogger Buddy R Pacifico said...

"" What assets, such as pension cash flow and real estate holdings, have you distributed to those needing distribution? Who are the recipients of these distributions?"

did I say that?"


No. You are promoting redistribution, so what are you personally doing with your assets to further this?

 
At 9/20/2012 11:38 AM, Blogger Larry G said...

" I'm very mobile"

so where would you go where they would not enslave you to pay for UHC and other redsitribution?

and why would you stay in a country that seeks to enslave you to start with if you had better alternatives?

I'm actually ON BOARD with many of the ideas behind Libertarian principles but I just do not see any good examples in the world and that sorta makes me wonder why - and so I ask you folks who seem to be so committed to the idea to name those places that are more libertarian-like that you admire and respect more than the countries you obviously do not.

Morg says asking for that level of confirmation is a logical fallacy.

But surely there must be at least some places in the world that better accomplish the desired goals of Libertarianism.

why is asking for that list such a tortured exercise?

 
At 9/20/2012 11:39 AM, Blogger PeakTrader said...

Larry, you need to look at the microeconomics level for best examples, not the macroeconomics level, because government has become too big in rich countries.

 
At 9/20/2012 11:40 AM, Blogger Larry G said...

re: " No. You are promoting redistribution,"

well,actually, no.

I'm asking for examples of countries where it is not done whose have more powerful economies because they are more libertarian.

I do not promote it but I do wonder why there is such a strong correlation between the best economies in the world and the fact that most, if not all of them do, in fact, redistribute income.

 
At 9/20/2012 11:40 AM, Blogger Methinks said...

Isn't that what some Canadians do?

How can you be this ignorant? No, that's not what Canadians do.

My aunt had blood in her urine. After spending all day in the ER, she was finally seen by a doctor and told it was either kidney stones or kidney cancer. They need an MRI. The hospital had a machine, but they weren't sure when the operator would be in. The doctor suggested she make her own MRI arrangements. The wait list within two hours of Toronto was no shorter than two months. They finally found one almost four hours away that had a three week wait list.

The MRI was performed, but the guy who read it traveled between MRI centers so it was read two weeks after the MRI was done.

Are you keeping track, Larry? That's about five weeks to discover whether or not you have renal cancer. In Toronto. Meanwhile, my aunt is on such heavy pain meds she can't drive a car. No loss to productivity from that, eh?

It wasn't cancer. After a three week wait (relatively short for Canada. My uncle is on a five year and counting wait to see a doctor about a pinched nerve that prevents him from walking normally), she finally gets in to see a specialist. Still on the pain meds. The surgeon operates about a month later. Finally.

This aunt's daughter lives in California. Her friend had the same problem. The hospital did an MRI that day (a Saturday), the results were sent up to a urologist by Sunday. His appointment was on Monday. Surgery was scheduled for Wednesday morning. A week later he was back at work.

Canadians pay way more for way less. And private medicine is against the law in Canada. You can't set up a private MRI clinic or a private surgery.

 
At 9/20/2012 11:43 AM, Blogger Larry G said...

" government has become too big in rich countries."

and so.. one would think.. that at least some countries with a lot less govt would simply start to outcompete the big govt countries....

right?

re: Methinks and Canada

Hey.. you got all these politics ADs that say people in Canada come to the US to get medical care that they could not get in Canada.

true. right?

so they can't buy better care in Canada, but they can slip across the border to get it - for a price.

doesn't that mean they can buy "up"?

 
At 9/20/2012 11:44 AM, Blogger Methinks said...

But surely there must be at least some places in the world that better accomplish the desired goals of Libertarianism.

why is asking for that list such a tortured exercise?


Because we don't owe you an answer and we're not willing to share our plans with the general public because there's only downside for us in doing that.

All you need to know is we have ways.

But, I'll tell you what....go ahead and try to rob us and you'll find out. Of course, once you do find out, you'll never be able to take it back. We won't trust you enough to return.

 
At 9/20/2012 11:46 AM, Blogger Larry G said...

" Because we don't owe you an answer and we're not willing to share our plans with the general public because there's only downside for us in doing that."

VERY UNLIKE Methinks...

hmmm... okay...

 
At 9/20/2012 11:51 AM, Blogger PeakTrader said...

Larry, poor countries may outcompete rich countries in a way.

Some people in poor countries may afford $50 for $50 worth of health care, while people in rich countries may afford twenty times more for ten times more health care, because of government.

 
At 9/20/2012 11:53 AM, Blogger Methinks said...

Oh, and btw, Lar, you can set up barriers to leaving - point the guns inward, like the USSR.

However, that won't help you. We won't work for you. You can't (not even with a Gulag) really force us to produce anything. So, there will be nothing to redistribute.

You can seize all the physical assets and all that has already been produced and redistribute it.

Once.

It will never be produced to be redistributed again (read Thomas Sowell above).

You can successfully steal a little bit from the productive so long as it it's not enough to stop them from producing.

If you get too greedy, you kill the golden goose.

Where's the line?

Sadly, if you cross it once, you often don't get a chance to cross back. Depends on how the cross happens, of course.

 
At 9/20/2012 11:59 AM, Blogger Larry G said...

" Larry, poor countries may outcompete rich countries in a way."

well not according to the those who are opposed to redistribution which would certainly include UHC.

right?

The argument is that there there is a "Fallacy of Redistribution" and that economies are more prosperous and everyone benefits more if there is not redistribution.

tell me if I screwed up the claim here.

my view is that there surely are some examples of better economies since less than one half of the world actually redistributes income and has UHC.

It just seems that virtually all if not, in fact, all, of the most prosperous countries in the world -all of them redistribute income and have some form of UHC.

If the theory about redistribution were actually correct, there are to be some great examples of it in action since we know there are probably about 100 countries that do not redistribute income.



 
At 9/20/2012 12:01 PM, Blogger Larry G said...

" Where's the line?"

the line would be when the folks who are productive and oppose redistribution would leave and emigrate to countries that do not redistribute.

so that goes back to my original question.

which ones are the prime candidates?

 
At 9/20/2012 12:02 PM, Blogger PeakTrader said...

Larry, you need income before you can redistribute it.

However, that doesn't mean the income is allocated efficiently.

 
At 9/20/2012 12:04 PM, Blogger Methinks said...

Here's something else you should keep in mind about providing productive people with strong disincentive to produce:

It is human beings, not inanimate objects, that produce wealth. Oil is only valuable because human beings can put it to use to improve their lives, for instance. Land doesn't get farmed on its own. Innovation does not come from cockroaches.

A country's greatest asset is its people (there's a pretty good pro-immigration argument in there). Scare off everyone but the leeches and you have problems.

 
At 9/20/2012 12:04 PM, Blogger PeakTrader said...

It seems, the more income government gets, the more it can squander.

 
At 9/20/2012 12:04 PM, Blogger marmico said...

your position is so untenable, it's not even wrong, just absurd.

Sowell's claim is that redistribution (the earned income tax credit, for example) is handing out a fish. That claim fails because less fish have been handed per capita out since 1980.

Sowell's further claim is that education operates as a net for less redistribution of fish. That claim fails as more working age Americans (the 25-54 year old cohort) have college degrees in 2012 than in 1980.

Trickle-down (supply side, whatever moniker) is actually trickle-up, irrespective of education. That's capitalism in its laissez-faire manifestation. Income and wealth become concentrated.

In any event, the federal income tax burden is progressive (the Obama redistribution thingie by raising marginal income tax rates on the 1% is a rounding error) but the total tax burden is flatter.

 
At 9/20/2012 12:11 PM, Blogger Methinks said...

Marmico,

An "education" is not a guarantee the person receiving that education will do something productive. Education is not rewarded, the production of something valued by others is.

The only system under which wealth (and an ever decreasing amount) become concentrated in the hands of a permanent few is in socialism, fascism and Corporatism. All basically the same in essence.

In free market capitalism, all producers are at the mercy of fickle consumers and under constant attack by competitors. Those who produced what is most valued will be the richest and they will by definition be a minority. But, to get there they had to do something to improve the lives of someone else.

You can beat down the few who produce what the many of us find so invaluable, but only at the expense of robbing us of what we find so valuable that we rewarded them so richly for it. And the reward they get for doing that is only a small fraction of how much better they made all of our lives.

 
At 9/20/2012 12:13 PM, Anonymous Anonymous said...

Larry,

which countries in the world would you point to as better off economically than the countries that redistribute income and have UHC?

Are you really claiming that redistribution and UHC cause people to be better off? If so, how do you explain 1800-1950?

The reality is many wealth countries, as in all countries, contain people who are envious and covetous, desiring other people's wealth. Due to free markets, and the change in Western culture, many Westerners created enormous amounts of wealth. Wealth others feel entitled to, so vote in politicians willing to steal for them.

Additionally, the US does not have UHC, but has better outcomes than all other countries by pretty much whatever metric you want to use.

 
At 9/20/2012 12:20 PM, Blogger Moe said...

This comment has been removed by the author.

 
At 9/20/2012 12:22 PM, Blogger Larry G said...

re: " Are you really claiming that redistribution and UHC cause people to be better off?"

No. I'm asking for some evidence that they are better off without it.

got any?

any countries that don't redistribute income and don't have UHC that have better economies than the ones that do?

 
At 9/20/2012 12:25 PM, Blogger morganovich said...

marmico-

us federal taxes are the most progressive in the oecd.

the amount of wealth being redistributed has increased enormously, not decreased.

taxes are paid by far fewer people.

the burden is more progressive.

but you are still missing the key issue:

wealth redistribution is a negative sum activity from a societal wealth standpoint.

wealth accumulation by selling goods and services that others value more than the price are a positive sum activity.

there is no way to replace a positive sum activity with a negative sum one and get social benefit.



 
At 9/20/2012 12:26 PM, Blogger morganovich said...

"Oh, and btw, Lar, you can set up barriers to leaving - point the guns inward, like the USSR. "

or, for example, make giving up your citizenship a heavily taxable event to grab as many assets as you can if people should choose to leave. (as the us does)

 
At 9/20/2012 12:31 PM, Blogger morganovich said...

marmico-

increasing capital gains taxes by 2/3 is NOT a rounding error.

it will stifle investment, slow the economy, and likely reduce overall taxes over time.

when clinton raised income taxes, nothing happened. the economy struggled, but tax revs did not go up.. they remained mired at the lowest % of dgp in decades.

when cap gains were cut, the economy took off. productivity, investment and personal income all went up. so did tax receipts both as a % of gdp AND even more so nominally as we got more growth too.

now we get the biggest cap gains tax hike ever next year. to expect that to have little effect or to raise revenue in any durable way is pure economic illiteracy. less growth is not the path to more revenue.

 
At 9/20/2012 12:36 PM, Blogger efimpp said...


Methinks
>You can't (not even with a Gulag) really force us to produce anything.
Oh, how brave of you! Let us keep you for two month on a small paika (food ration) in a cold barrack and you crawl to ask for trees to fell in exchange for food

 
At 9/20/2012 12:38 PM, Anonymous Anonymous said...

any countries that don't redistribute income and don't have UHC that have better economies than the ones that do?

Did you not read my comment? The US does not have redistributive income and UHC. It redistributes income, but does not have UHC. And by pretty much every metric, the US has better economic AND health outcomes than all other countries.

 
At 9/20/2012 12:39 PM, Blogger Methinks said...

or, for example, make giving up your citizenship a heavily taxable event to grab as many assets as you can if people should choose to leave. (as the us does)

um....there are ways....:)

Still, nobody is dumb enough to tax existing wealth (okay, there aren't enough of them) so, you may remain but just spend what you've already produced. And if you are very capable of making a lot of money, then it's still worth getting the hell out even with the 20% exit tax on estimated cap gains above $600,000. Assuming you show any cap gains.......

 
At 9/20/2012 12:42 PM, Blogger Methinks said...

Oh, how brave of you! Let us keep you for two month on a small paika (food ration) in a cold barrack and you crawl to ask for trees to fell in exchange for food

wonderful display of what is really at the heart of every socialist. Not the desire to increase human welfare but the bloodthirsty passion for human misery.

You are all sadists.

 
At 9/20/2012 12:43 PM, Blogger morganovich said...

"
I'm asking for the BEST examples...not the perfect ones.

and the answer keeps coming back.. that there are none but there used to be.

right?"

no larry.

there are lots of examples.

you are just too stupid to understand them when they are given to you.

you have to look at it as a continum.

the us did better than europe. that's because we were freeer. but in periods (like now) when we get far more government, we slow.

singapore did better than indonesia. it had rule of law and protected rights.

hong kong did better than china.

japan got too big a government and ate itself.

columbia went to rights based market freedoms and boomed. venezeula abandoned them and failed.

eastern europe got free from communism. the nations that adopted the most free market policies did best.

the big socialist states like spain and greece are bankrupt.

this has been explained to you over and over.

yet you act as though there are not examples.

then you lie and twist what you said.

you were saying "there is no example" not give me the best one.

your whole argument is just one extended logical fallacy (appeal to practice)

what you ignore is that states that have a more libertarian bent do better. singaopre has an incredibly free economy apart from mandated healthcare savings, but even healthcare spending there is mostly market driven. people pay cash. that's why it works.

singapore taxes are VERY low compared to ours.

http://www.guidemesingapore.com/taxation/topics/singapore-tax-rates

you try to trot them out like they are statist, but that is nothing like true. you are just ignorant and deliberately misrepresenting them. their top corp tax rate is not even half of ours.

they do not tax foreign income, cap gains, or dividends at all.

their top income tax rate is 20%.

their federal spending is less that 10% of gdp.

get your facts straight lar, you are just making stuff up.

 
At 9/20/2012 12:44 PM, Blogger Larry G said...

re: " he US does not have redistributive income and UHC. It redistributes income, but does not have UHC."

I would challenge you Ken on the UHC.

EMTALA
MEDICARE
MEDICAID
TRICARE
VA

we have UHC "lite" in terms of coverage and "heavy" in terms of costs.

In an effort to avoid having UHC, we have constructed a byzantine patchwork of government and private systems that in the end cost twice as much per capita as any other country with UHC.

but what I asked was that IF you believe as Sowell and others do that the US DOES redistribute income AND they do it with quite a bit of health care (but not 100%), I was asking for some evidence of countries with better economies that don't redistribute income or have any form of UHC.

I think my point still stands.

If the US and countries like it that do re-distribute income to include some form of health care are said to have damaged economies as a result of doing that - then how about some examples of countries that are better off because they follow what Sowell advocates...????

 
At 9/20/2012 12:46 PM, Blogger Methinks said...

Even all that, Morganovich, is too narrow a view. The options are even broader than that.

For instance, the U.K. taxes non-citizen residents only on consumption so long as they have no U.K. derived income.

 
At 9/20/2012 12:54 PM, Blogger morganovich said...

mehtinks-

"Still, nobody is dumb enough to tax existing wealth (okay, there aren't enough of them)"

oh, you mean like inheritance tax? that one really gets me. dying is taxable to the tune of 55%. what's the rationale? you clearly are not going to use any more state services. it's based on the notion that wealth is the state's and you can only borrow it. that is deeply disturbing.

"so, you may remain but just spend what you've already produced. And if you are very capable of making a lot of money, then it's still worth getting the hell out even with the 20% exit tax on estimated cap gains above $600,000. Assuming you show any cap gains......."

in any other country, that would work much better. you put your money offshore and pay no tax on the gains.

the one time hit to get out may well be worth it. i really hate the idea of giving up us citizenship, but, like many things, it has a price.

i suspect most people would be willing to live in another country for a price.

what it is might vary, but at $100k a year, i think you could get most americans to go. at $1 million, nearly all.

i do the math all the time and try to figure out just how much tax savings it would take to get me to move. it's a really tough decision, especially as you really are leaving your life behind. the us can get nasty about visas for those who renounce.

it's a very difficult decision to make, but there's a point where you just get tired of being a milchcow.

i am giving serious thought to living on a boat.

 
At 9/20/2012 12:56 PM, Blogger Larry G said...

re: Singapore taxes

Did they tell you about this:

Public financing of healthcare:

Medisave is a subset of the mandatory Government pension scheme (the Central Provident Fund or CPF) to which a total of 33 per cent of wages is contributed (comprising 13 per cent employer contributions and 20 per cent employee contributions)

http://www.watsonwyatt.com/europe/pubs/healthcare/render2.asp?ID=13850

 
At 9/20/2012 12:57 PM, Blogger morganovich said...

"
If the US and countries like it that do re-distribute income to include some form of health care are said to have damaged economies as a result of doing that - then how about some examples of countries that are better off because they follow what Sowell advocates...????"

all the great nations have kings. if countries were really better off without monarchies, then give me an example of some countries that do not have them and are doing well.

-larry's ancestor circa 1300.

larry, i'm really serious here. how can you possibly not see that your argument is a logical fallacy? you just keep repeating it. you do realize that repetition does not make false things true, right?

 
At 9/20/2012 1:00 PM, Blogger Larry G said...

" logical fallacy"

vs

the reality in front of you

Morg - aren't you advocating something that does not currently exist?

how "logical" is that guy?

 
At 9/20/2012 1:05 PM, Blogger Methinks said...

I'm sorry, I keep forgetting about inheritance tax because there is a.) a costly way to get around it and b.) I don't have heirs except for c.) the charities I'm leaving most of my wealth to.

It is insanely disturbing that, in reality, the state views you as its slave. It owns you body and soul. That...that shit that the guy posted about starving people into submission upthread...that's the reality of the state.

Smaller governments are less able to abuse people. We have no disagreeement there.

My point is essentially Sowell's. You're not going to get any more out of us. There's no incentive to produce.

The decision to leave gets easier every day. Distant shores are not so distant with those lovely air machines. The internet connects us. Access to goods is not so dependent on geography anymore.

Certainly there are costs to all moves. As for me, I have no family in the U.S. anymore - certainly none that isn't connected to family in Canada. I feel too separated from my family in Europe and Africa. There are many immigrants who have started businesses here and for whom the cost of leaving is even lower.

 
At 9/20/2012 1:07 PM, Blogger morganovich said...

larry-

so? it's still their money. it's a savings account, not a government program.

thus, it's mostly free market.

i'm not arguing in favor of forced savings. i think they would do better without it.

but the market aspect keeps costs VERY low. they spend 4% of gdp on healthcare.

their economy as a whole is very friendly to business and investment. as a result, they get lots of it.

would they be better off without mandated healthcare? yes. but the rest of the system is enough to offset it.

you seem incapable of thinking in more than one dimension.

you also ducked the actual argument. singapore was freer than indonesia and protected rights and markets better. so they got rich despite having almost no natural resources.

that's enough to overcome some bad decisions.

if you bud a big enough fire int he fireplace and crank up the furnace, you can get a warm room even with the window open on a 20 degree day.

your argument is that because the window was open at the same time the room warmed that the open window made the room warm.

that is another logical fallacy. (confusing coincidence with causality)

you might as well argue that opening umbrellas causes it to rain.

i'm not sure i have ever met anyone so impervious to logic as you are lar. you seem unable to even use basic logical thought. literally every argument you make is a fallacy.

 
At 9/20/2012 1:10 PM, Blogger Larry G said...

re: " i'm not arguing in favor of forced savings. i think they would do better without it.

but the market aspect keeps costs VERY low. they spend 4% of gdp on healthcare."

very low in part because everyone has to pay at the start - right?

what's Sowell say about forced savings vs redistribution?

what do you say? Sounds like you could live with forced savings for HC and pension although I distinctly remember you earlier saying you opposed that also.

forced savings leads to less redistribution...

right?

 
At 9/20/2012 1:10 PM, Blogger Larry G said...

re: " i'm not arguing in favor of forced savings. i think they would do better without it.

but the market aspect keeps costs VERY low. they spend 4% of gdp on healthcare."

very low in part because everyone has to pay at the start - right?

what's Sowell say about forced savings vs redistribution?

what do you say? Sounds like you could live with forced savings for HC and pension although I distinctly remember you earlier saying you opposed that also.

forced savings leads to less redistribution...

right?

 
At 9/20/2012 1:10 PM, Blogger efimpp said...

>there are lots of examples.

>you are just too stupid to understand them when they are given to you.
no, it seems that someone is too stupid for a meaningful discussion.
your examples clearly prove that too much redistribution especially without stable rules is bad
they somewhat prove that, say, USA is closer to optimum then Europe or Japan (US had a lot of advantages after WWII and income in dollar figures is not all that people have in their lives).
But you extrapolate that zero redistribution is the best - don't you?
any example to prove that - at least halfway between US and ideal that clearly does better then US?


 
At 9/20/2012 1:11 PM, Blogger Jon Murphy said...

81 posts and not a single thing said...

 
At 9/20/2012 1:12 PM, Blogger morganovich said...

larry-

"
Morg - aren't you advocating something that does not currently exist?

how "logical" is that guy?"

wow. that may be the stupidest thing i have ever heard you say. so advocating anything new is illogical?

so, democratic government was illogical before we had any?

abolishing slavery was illogical before anyone tried it?

establishing a government based on the rights of the individual was illogical because we all had kinds?

stop and actually think about what you just wrote.

it's maybe the wrongest thing i have ever seen on CD.

if you think that advocating somehting new (or a return to something old) is illogical because it does not currently exist, then is is not wonder you are unable to think in even basic logic.

wow. just wow.

 
At 9/20/2012 1:12 PM, Blogger Jon Murphy said...

82, if you count mine. 83 if you include this one.

 
At 9/20/2012 1:13 PM, Blogger juandos said...

pt says: "The Occupy Wall Street crowd should be blaming government for driving-up costs of health care, education, energy, and many other goods, along with raising taxes, fees, fines, fares, tolls, etc."...

Yep!

From 'Washington Secrets' section of the Washinton Examiner: Current federal regulations plus those coming under Obamacare will cost American taxpayers and businesses $1.8 trillion annually, more than twenty times the $88 billion the administration estimates, according to a new roundup provided to Secrets from the libertarian Competitive Enterprise Institute....

From CEI: TIP OF THE COSTBERG - On the Invalidity of All Cost of Regulation Estimates& the Need to Compile Them Anyway...

 
At 9/20/2012 1:13 PM, Blogger Larry G said...

re: " you also ducked the actual argument. singapore was freer than indonesia and protected rights and markets better. so they got rich despite having almost no natural resources."

no. actually I very much want to see a short list of "better" countries and I would not disagree that Singapore MIGHT be one because it does have low taxes on business but it does have payroll taxes about twice what we have - and that, in turn, leads to lower overall health care costs.

I've actually argued before that taxing business at all makes no sense because they just pass it on to the buyers....

 
At 9/20/2012 1:15 PM, Blogger morganovich said...

"
very low in part because everyone has to pay at the start - right?

what's Sowell say about forced savings vs redistributio"

no, you do not get this AT ALL.

it is not low because everyone pays in. it is low because everyone is spending their own money and therefore shops by price and makes rational decision about cost/benefit.

savings is not redistribution.

if you put money in your ira and then later spend it, that's not redistribution. it's just you using your own money. your whole premise is invalid.

you seem to believe that taking away choice and forcing savings for health (as opposed to say, investing in a business or buying a car or home) improves economic performance.

how could that possibly be true?

by what mechanism could that possibly occur?

how does less choice lead to more prosperity?

 
At 9/20/2012 1:18 PM, Blogger morganovich said...

"no. actually I very much want to see a short list of "better" countries and I would not disagree that Singapore MIGHT be one because it does have low taxes on business but it does have payroll taxes about twice what we have - and that, in turn, leads to lower overall health care costs."

this is just your same logical fallacy all over again.

even if the us were the BEST compared to others, that says nothing about whether we could be better.

how is it you cannot see this.

you can be the best point guard in the nba. but you can still get better, right?

your arguments are so totally bereft of logic there is not way to even address them.

name a nation made better off by limiting non rights violating choice.

bet you can't.

 
At 9/20/2012 1:18 PM, Blogger morganovich said...

"no. actually I very much want to see a short list of "better" countries and I would not disagree that Singapore MIGHT be one because it does have low taxes on business but it does have payroll taxes about twice what we have - and that, in turn, leads to lower overall health care costs."

this is just your same logical fallacy all over again.

even if the us were the BEST compared to others, that says nothing about whether we could be better.

how is it you cannot see this.

you can be the best point guard in the nba. but you can still get better, right?

your arguments are so totally bereft of logic there is not way to even address them.

name a nation made better off by limiting non rights violating choice.

bet you can't.

 
At 9/20/2012 1:28 PM, Blogger Larry G said...

re: redistribution vs forced savings

no connection at all?

I guess I would have thought that forced savings would essentially pay all health care costs - from the pockets of those who benefited as opposed to not having forced savings for health care and having some folks pay higher insurance premiums to fund EMTALA and higher taxes to pay for MedicAid.

In other words, isn't some redistribution to pay for health care for people who did not save enough of their own money to pay for it to start with?

that's why I asked what Sowells opinion was with respect to forced savings.

It appears to me that virtually every country in the world with UHC does it with forced savings including Singapore.

right?

when we say redistribute income - do we know what it is spent on?

I think a major part of it is health care and education (done at the local level).

 
At 9/20/2012 1:32 PM, Blogger morganovich said...

ef-

"But you extrapolate that zero redistribution is the best - don't you?
any example to prove that - at least halfway between US and ideal that clearly does better then US?"

you are missing the basic point.

wealth accumulation by selling a good or service that others freely buy because they value it at more than the price results in a net gain in societal wealth and well being. it's a positive sum activity.

do you agree with that?

taking such wealth as accumulated by successful providers of goods and services is a net loss of wealth. it is negative sum. even if you value and will use the money given to you just as highly and as well as the person from whom it was taken, there is still a loss. redistribution has friction. it costs money to levy and collect taxes and hand out wealth. that is non productive activity. no new goods or services are created.

thus, even under the best possible scenario, it is negative sum.

and that best scenario is never possible.

taking money away from those good at using it to create value and giving it to those less good is also a cost. you get less growth and less investment and production.

an evenly sliced pie winds up smaller.

that is the basis for opposing redistribution.

it diminished positive sum activity and replaces it with negative sum activity.

examples here are always tricky. there are too many moving parts and differences. the saudis are relatively rich, but it's not their system, just a happenstance of geography. it's impossible to really compare like to like.

but the basic first principles theory for avoiding redistribution is sound. we can see this is many test cases.

the us became far more redistributionist in the 30's.. we got a depression. this abated post war and we got a boom. more government in the 70's wiped us out again, in the 80's, we pared it back and did better. recently, we have jacked it way up. as a result, we get the weakest recovery since the 30's.

nations like colombia move away fro such practices and thrive. nations like venzeula and cuba embrace it and deteriorate.

your argument that there is not a lot of evidence around the lower bound seem poorly thought out. why would the effects suddenly change?

we had essentially no public wealth redistribution in the us pre 1930. under coolidge, us federal spending was 2% of gdp.

the us thrived during that period. where it got mired and could not recover was when hoover and then fdr rammed through a massive redistributionist program.

the theory is clear and such evidence as we have supports it.



 
At 9/20/2012 1:37 PM, Blogger morganovich said...

larry-

putting your own money into your own account that only you use is not wealth redistribution.

others do not get to tap into that.

there is some very small (3% of gdp) spending on healthcare in signapore that could be called redistributionist. so what?

you are getting mired int e weeds here and missing the main argument.

until you can answer the question about how limiting choice can create growth or how shifting assets from a positive sum activity to a negative sum one, you have no argument at all.

 
At 9/20/2012 1:39 PM, Blogger Larry G said...

re: " putting your own money into your own account that only you use is not wealth redistribution."

no. no. no.

If I said that I mucked it up.

If I said something you interpreted that way...let me be clear.

forced savings pays for health care - with people's own money.

but without forced savings for healthcare - who pays?

If the person receiving the health care does not pay and someone else does (such as with EMTALA and MedicAid)...

isn't that ....redistribution?

 
At 9/20/2012 1:42 PM, Blogger Methinks said...


re: Methinks and Canada

Hey.. you got all these politics ADs that say people in Canada come to the US to get medical care that they could not get in Canada.

true. right?

so they can't buy better care in Canada, but they can slip across the border to get it - for a price.

doesn't that mean they can buy "up"?


Why is that when I read the crap you write the thought that goesn through my head that goes through my head is "Stiiiiiimpy, you iiiiidiiiiiot!"?

Do ya' not get that they are paying for something they aren't getting? No, of course you don't.

 
At 9/20/2012 1:45 PM, Blogger Methinks said...

See, lar, if they weren't forced to pay for that crack care they aren't getting, they would be richer.

You get that if I come over and take your money promising services you never get that you're worse off. Yes?

If I force you to pay $10 for something worth $0.50, you're worse off.

 
At 9/20/2012 1:52 PM, Blogger juandos said...

Well larry g is still pushing his silly Singapore narrative...

Well here's something about Singapore that make liberals happy, Singapore's wealth gap...:-)

 
At 9/20/2012 1:52 PM, Blogger morganovich said...

ef-

actually, i cab give you a great concrete example with an enormous amount of very detailed and footnoted evidence, but it will require some reading on your part.

pick up murray's excellent book "losing ground".

it details the trajectory of black wealth and income pre and post the great society programs that johnson put into place.

the results are striking. pre redistribution blacks were gaining ground. wealth gaps were closing and they were becoming wealthier.

the redistributionsit programs not only stopped that but actually reversed it.

it's very detailed and meticulously sourced and footnoted.

the results are both striking and irrefutable.

it's an excellent test case for the theory that sowell is putting forth and supports it pretty definitively.

 
At 9/20/2012 1:55 PM, Blogger morganovich said...

"
but without forced savings for healthcare - who pays?

If the person receiving the health care does not pay and someone else does (such as with EMTALA and MedicAid)...

isn't that ....redistribution?"

yes.

it's also harmful and expensive. that was the whole point.

but without forced savings, individuals pay. no one forces you to save for food. if no one forced you to pay social security tax, you'd save more on your own and get much better results.

you seem to have this notion that if the state does not compel somehting, it does not happen.

 
At 9/20/2012 1:56 PM, Blogger efimpp said...

>you are missing the basic point.
this is the theory and it makes a lot of sense
But Karl Marx had a theory which looked decent at the time too.

Also, it's not obvious for me that middle class in US was better off in 1910eth then in 1950eth.

So, federal spending were 2% of GDP. Was there any redistribution on state or local level?
Who will pay for education for children whose parents can't do it (you aren't going to sterilize lazy people, are you?) What should happen if someone doesn't have health insurance, any wealth to speak about and becomes seriously ill?




 
At 9/20/2012 2:03 PM, Blogger Methinks said...

But Karl Marx had a theory which looked decent at the time too.

Not to anyone with an actual brain and the ability to think beyond step one (to paraphrase Sowell)

Also, it's not obvious for me that middle class in US was better off in 1910eth then in 1950eth.

Of course that's true. Because in the 10's fewer of them had cars, washing machines, telephones and none had televisions. I see the argument for being better off without all that stuff. Phooey on material possessions. Let's go back to the caves or to Karl Marx's beloved serfdom, eh? And of course there were no charities that took care of the poor in in the 1910's. People just rolled around in the gutter and nobody cared until the benevolent government, giver of all life, stepped in.

 
At 9/20/2012 2:03 PM, Blogger efimpp said...

>actually, i cab give you a great concrete example

I just pointing that you extrapolate to the limit, and in this case you may find yourself in the game with totally different rules.
In current situation more redistribution most likely will be harmful, but considering the situation - redistribution happens anyway, some particular tax or rule which redistributes the redistribution may be productive.

 
At 9/20/2012 2:06 PM, Blogger Methinks said...

"Some redistribution" is not the problem.

The problem is that it never stays at some small amount of redistribution to prevent people from literally dying in the streets.

 
At 9/20/2012 2:08 PM, Blogger Larry G said...

" you seem to have this notion that if the state does not compel somehting, it does not happen"

well no, not necessarily but it does seem that all the countries that have UHC do so with forced savings.

and the countries that don't have forced savings (save for the US) seem to be among the worst of the world's economies.

there just seems to be a strong correlation between countries that have forced savings for pensions/healthcare and strong,powerful economies...

which is counter to what Sowell is espousing.... (assuming he is opposed to forced savings).

 
At 9/20/2012 2:09 PM, Blogger juandos said...

Well larry g is still pushing his silly Singapore narrative...

Well here's something about Singapore that make liberals happy, Singapore's wealth gap...:-)

 
At 9/20/2012 2:10 PM, Blogger Ron H. said...

Krishnan

""The rich people in the US stole from poor people and got rich" (this does not explain how many people keep getting rich and per capita income keeps improving and life keeps getting better)"

And it's never explained how anything is "stolen" from people who go out of their way to walk into a store, put money in the counter, and ask a cashier to give them a product in exchange that they want more than they want the money.

 
At 9/20/2012 2:10 PM, Blogger Larry G said...

" The problem is that it never stays at some small amount of redistribution to prevent people from literally dying in the streets."

we agree, with one friendly amendment...

we don't seem to know what a "right amount" is....

but I essentially agree with your point.

we do have "too much".

see... we agree!

:-)

 
At 9/20/2012 2:13 PM, Blogger morganovich said...

ef-

"But Karl Marx had a theory which looked decent at the time too. "

you do realize that that is a logical fallacy right?

newton's motion was a theory. phlogiston was a theory. phlogiston was wrong, therefore so was newton.

that is not an actual argument.

marx's theory never looked good. it was obviously counter to basic economics from the word go.

it's failure provides support for sowell, not refutation.

"Also, it's not obvious for me that middle class in US was better off in 1910eth then in 1950eth."

this is also a false argument.

we invent things, increase productivity, and gain standard of living.

the question is not "are they better in 1950?" it's "how much better would then have been absent the new deal etc. the question is how much more quickly could we have recovered from 1929 or 2008 without so much interference and disruption of asset allocation?

there was very little state activity under coolidge either.

the us had very limited government at that point.

you then go against the whole argument that sowell was making. did you even read the piece? he explicitly says (and i agree) that knowledge IS somehting you can get gains from redistributing.

they way we do it is inefficient and poorly conceived, but the notion works.

and you really go off the deep end with this strange question/accusation about sterilizing lazy people. what does that have to do with anyhting? that's just emotional grandstanding.

the real question is "why should i be asked to pay for the choices of others?"

if i have a child that i cannot afford, why should you pay?

before the federal programs for welfare and healthcare, there were charities.

they ran shelters, kitchens, and hospitals.

people made choices. that is not the same as compulsion.

you seem to be implying that there is some right to shelter or healthcare.

such a right is impossible without slavery.

such a right requires that i, even if against my will, must pay or provide a service for you. this goes against the more basic rights to liberty, property, and self determination.

you cannot have a right that forces others to do things for you. such things are not nor can ever be rights.

if you cannot have it alone on a desert island, it is not a right.

 
At 9/20/2012 2:14 PM, Blogger efimpp said...

>to Karl Marx's beloved serfdom
OMG
KM was considered a decent economist then
and he always stated that capitalism is the best thing so far
he just thought that development leads to more centralization and class struggle can't be resolved without giving means of production to workers
it all made sense then
life proved it didn't work
now you want to remove forced redistribution and rely on charity
good luck
maybe you end up with great prosperity
but there is a reasonable chance you find yourself in 3rd world-like society - with a few very reach people having not just wealth, but all real power, and some poor indebted to them to such extent that they are not different from serfs.

 
At 9/20/2012 2:18 PM, Blogger Larry G said...

" if i have a child that i cannot afford, why should you pay?"

you just said a mouthful.

you can trace the vast majority of redistribution in this country to programs for kids.

it's the awful truth.

 
At 9/20/2012 2:23 PM, Blogger Ron H. said...

"Isn't that what some Canadians do?

they have basic care. If they want more/better, they come to the US.
"

Hold on! Do you mean that if Canadians want more/better health care they come to a country without UHC?

 
At 9/20/2012 2:29 PM, Blogger morganovich said...

ef-

wow.

um, no. karl marx was NOT considered a solid economist. he was a political philosopher. his notions were widely rejected by anyone with a modicum of economic background.

that's just pure revisionism.

he was a philosopher that took the notion of hegelian dialectics and loaded a number of false assumptions into his thesis and antithesis and came up with an completely false premise that a number of dictatorial regimes used to snow unsuspecting populations until they had enough force to compel them.

you make it sound like opposing the use of coercion on allegedly free citizens make me the bully.

it it the one using force that is the bully.

demanding that my natural rights be violated because you want it it the coercive act.

you make it sound like personal responsibility and self reliance are somehow evil ideas and that the use of force to take from some and give to others is somehow the kind route.

your notions about ending up as a third world society are absurd. protect rights and enforce contracts and you get a thriving economy.

the third world is the third world because it does not do this.

the us rose from a colony to become the greatest power on earth using precisely what i am describing.

the redistrubution of europe has not made their poor any better off than ours. they are largely worse off. it has just made their rich poorer and their societies as well.

nearly every country in the EU would be the poorest state in the us.

your outlandish claims of "serfdom" are just nonsense.

if you want to make serfs, impose redstribution and create government dependency.

read murray's book. you could not be more wrong about how to create a permanent underclass.

 
At 9/20/2012 2:29 PM, Blogger Methinks said...

KM was considered a decent economist then

By whom?

He had fans who found an intellectual to legitimize their envy and sadism. He was never a good economist and he was never considered a good economist. Don't confuse Krugman and Karl.

Marx was writing capitalism would create monopolies and wealth consolidated in the hands of a few and wages are falling as wages were actually increasing. The idiot missed that which was right in front of him as he was writing the opposite.

He missed entirely the fact that innovation would continue. Far from wealth consolidating in the hands of a few, it would be newly created - and this from someone who what? Couldn't see the industrial revolution?

He thought that labour provided all of the value of a good. He misunderstood not only how the value of a good is calculated but also that without capital, the worker wouldn't be able to create anything at all.

He predicted a revolution after Capitalism had run its course - meaning there is a limit to human innovation. Despite plenty of evidence that humans are innovative.

The man was a buffoon. Have ever read any of his drivel?



 
At 9/20/2012 2:30 PM, Blogger efimpp said...


>such a right requires that i, even if against my will, must pay or provide a service for you. this goes against the more basic rights to liberty, property, and self determination.

very logical, can't argue. and knew it before you said it.

real society never worked on principles of total liberty, property, and self determination .. yet. (during your beloved years there still was such thing as draft to the army). BTW, how do you come to the idea that property is a natural right? It only exists for max like 10,000 years out of 100,000.

Again, try your experiment in modern world on some moderate scale first. As they said about communists - too bad you didn't experimented on cats first.




 
At 9/20/2012 2:31 PM, Blogger Larry G said...

re: " Hold on! Do you mean that if Canadians want more/better health care they come to a country without UHC? "

I'm saying that anyone who has basic government style health care that feels they are not getting what they want - can go where they can pay more to get more.

Methinks seems to think that no matter how much you pay, you're entitled to the max and that's not how most health care works even in the good old USA with private healthcare.

You get a certain amount for what you pay and then if you want more, you have to pay more - even with private health care.

right?

The Canadians get the same deal as those in the US with private insurance get - limits.

The difference is that everyone in Canada gets the same limit whereas in the US - those without insurance get zero while those who do have insurance get limits.


 
At 9/20/2012 2:31 PM, Blogger morganovich said...

"
you can trace the vast majority of redistribution in this country to programs for kids.

it's the awful truth."

worse, you can trace big spikes in birthrate to redistribution programs.

these things feed on each other.

as mark is fond of saying: "when you subsidize something, you get more of it".

 
At 9/20/2012 2:33 PM, Blogger Larry G said...

" as mark is fond of saying: "when you subsidize something, you get more of it"."

not quite...

if that were totally true, we'd have a shitload more people to pay for retired folks SS and Medicare, eh?

:-)

 
At 9/20/2012 2:34 PM, Blogger morganovich said...

"The Canadians get the same deal as those in the US with private insurance get - limits."

no, they get a very different deal. they are forced to pay in a one size fits all system that cannot deal with anyhting complex.

they are forced to pay for access to a system they may or may not wish to participate in.

worse, unlike places like the UK where you can still pay to get better care, they are forbidden to do so without actually leaving the country.

you cannot equate compulsion with choice.

 
At 9/20/2012 2:34 PM, Blogger Methinks said...

Morgan,

David Ricardo was a stock, not an economist either. He wrote about economics as well. And I believe Keynes was a statistician by training.

There are plenty of people with advanced degrees in economics who don't seem to grasp certain basic laws of economics. We have one one this blog who thinks demand curves in the labour market are upward sloping.

I'm fine calling Marx a shit economist.

 
At 9/20/2012 2:35 PM, Blogger morganovich said...

"
not quite...

if that were totally true, we'd have a shitload more people to pay for retired folks SS and Medicare, eh?"

um, no. in fact, exactly the opposite.

we are taxing people who pay. when you tax somehting, you get less of it.

we are subsidizing those who get. and we are getting piles more of them.

 
At 9/20/2012 2:38 PM, Blogger Methinks said...

Methinks seems to think that no matter how much you pay, you're entitled to the max and that's not how most health care works even in the good old USA with private healthcare.

Uh...no. That's not what Methinks thinks. It's just that Larry can't understand what Methinks says no matter how plain the English in Methinks's comments.

 
At 9/20/2012 2:39 PM, Blogger morganovich said...

methinks-

we can argue semantics about whether or not marx was an economist, but i would argue that he was not.

economists base theories on data. they test them and see if they work.

marx had no data. it was pure philosophy.

perhaps we could call him an economic philosopher.

but, in the end, i think we agree that the theory was garbage and not taken seriously by most economists.

his theories were attractive to totalitarians that wished to apply a patina of populism to their seizures of power, but never to any serious economic theorist.

 
At 9/20/2012 2:40 PM, Blogger Larry G said...

re: " no, they get a very different deal. they are forced to pay in a one size fits all system that cannot deal with anyhting complex."

which is the same deal you get in ANY country with UHC including the UK - and even the US.

"they are forced to pay for access to a system they may or may not wish to participate in."

yup. in every country that provides UHC, you gotta pay.

You don't have to use. You can get more/better other ways if that is your wish but if you flip pizzas for a living and you get sick - you're covered - instead of using the ER or getting govt "charity" care.

"worse, unlike places like the UK where you can still pay to get better care, they are forbidden to do so without actually leaving the country."

some countries yes but others you are free to buy "up".

"you cannot equate compulsion with choice."

yup.. now we're jumping back on the Libertarian "slavery" wagon again...

Virtually all, if not in fact, ALL the countries in the world with the best economic systems seem to compel savings ... coincidence?

All the terrible economic systems in the world ...do not compel savings...

coincidence?

 
At 9/20/2012 2:40 PM, Blogger Methinks said...

no, they get a very different deal. they are forced to pay in a one size fits all system that cannot deal with anyhting complex.

Um...it can't deal with anything SIMPLE either. An MRI. You can't even pay out of pocket to get &%$! MRI!!!! You are on a five year waiting list for a *^%#$ pinched nerve! And I don't mean treatment, I mean for an appointment to see a specialist.

simple shit.

 
At 9/20/2012 2:42 PM, Blogger Larry G said...

re: earned income and child tax credits


...so do they ENCOURAGE having kids or not?

if we tax something we get less of it but if we give tax credits...????

do we get more of it?

 
At 9/20/2012 2:43 PM, Blogger Methinks said...

Morgan,

I'm happy to call Marx an economist because I still call Krugman an economist even though he is an economist of pure fallacy anymore.

Call him whatever you want. He produced volumes (literally) of manure. And that's the salient point. He was never a respected economist by anyone outside of political movements and certain forgettable academics.

 
At 9/20/2012 2:45 PM, Blogger Methinks said...

Oh, and Ricardo was not a stock but a stock broker, of course.

 
At 9/20/2012 2:48 PM, Blogger Ron H. said...

"so they can't buy better care in Canada, but they can slip across the border to get it - for a price.

doesn't that mean they can buy "up"?
"

That means their UHC is inadequate, and they must travel to a country without it to get the services they need. Do you see no irony there?

The UHC they have, instead of giving them BETTER healthcare prevents them from getting the treatment they need.

Bbesides, you've gone off the rails here without explaining why income redistribution is a good thing. Remember your statement:

"So perhaps, instead of saying "The Fallacy of Redistribution", we should say: "The Fallacy of not Redistribution" because all the world's modern and powerful industrial economies do, in fact, re-distribute.."

 
At 9/20/2012 2:52 PM, Blogger morganovich said...

"real society never worked on principles of total liberty, property, and self determination .. yet. (during your beloved years there still was such thing as draft to the army)."

this is not any kind of valid argument. it's just a pile of logical fallacies masquerading as one. you start with appeal to practice and say "well it was never perfect". so what? it was closer. that's the point. you are now arguing that the perfect is the enemy of the good.

pointing out that a good idea was not perfectly instituted says nothing about it being a good idea.

"BTW, how do you come to the idea that property is a natural right? It only exists for max like 10,000 years out of 100,000."

you are trying to claim that no one had property more than 10,000 years ago? i suspect many who build homes or lived in caves would disagree. i suspect anyone who viewed the pointy stick in his or her hand as "their" pointy stick or reed basket or sharp edged rock would disagree.

property is a right because you are entitled to the fruits of your labor. a world with such rights has more, not less liberty. if i need spend every moment fearing you will steal my pointy stick, i am less free. i give up the freedom to steal yours so that you may not steal mine just as i give up my freedom not to kill you so that you may not kill me.

they are natural rights because they enhance out liberty and well being.

if there is no right to property, why make anyhting? you leave your house and i take it or i just move in and start sleeping in your spare room. how could any productive society exist and flourish without the right to keep that which you make?

"Again, try your experiment in modern world on some moderate scale first. As they said about communists - too bad you didn't experimented on cats first."

we have tried it. it worked. it got us the US. was it perfect, no? but it was a pretty good try.

i say we aim for better and see if we can avoid some of the flaws from the past. hey, we got rid of the draft. we extended suffrage and rights to all adults. those are good steps. why hamstring them with such violations of rights as compelled labor and payment?

your yourself admit that you cannot argue with rights not being based upon forcing others to do things.

if you agree to that, how can you support coercion based redistribution?

your whole argument seems to be based on "there were other rights violations so this one is OK".

that, again, is a pure logical fallacy.

he stole my hat so i can steal yours is not a valid ethical construction.

one bad act does not justify another.

 
At 9/20/2012 2:53 PM, Blogger juandos said...

methinks says: "An MRI. You can't even pay out of pocket to get &%$! MRI!!!! You are on a five year waiting list for a *^%#$ pinched nerve!"...

Not if you're the family pet...:-)

 
At 9/20/2012 3:00 PM, Blogger Larry G said...

" That means their UHC is inadequate, and they must travel to a country without it to get the services they need. Do you see no irony there?"

do you think any/all private insurance no matter the price is "inadequate" in the US?

Do you think you can buy an pay-for-everything-no-matter what policy for the same price as a "pay only for some things til a very low max amount" policy?

What you get from the govt is somewhere in between.

somehow some of you believe that govt healthcare is supposed to be gold plated health care that pays for everything and it's not .

 
At 9/20/2012 3:01 PM, Blogger Ron H. said...

"The argument is that there there is a "Fallacy of Redistribution" and that economies are more prosperous and everyone benefits more if there is not redistribution."

That's correct.

 
At 9/20/2012 3:05 PM, Blogger Ron H. said...

Peak: "Larry, what "realities" are you looking at?"

Larry: "@Peak, re: realities:

"do you have a country that does not have it (UHC) that you'd hold up as a better way
"

That's not a response, that's an evasion. Why won't you answer the question?

 
At 9/20/2012 3:05 PM, Blogger Methinks said...

"BTW, how do you come to the idea that property is a natural right? It only exists for max like 10,000 years out of 100,000."

If property right were not a natural right, we would not consider theft immoral.

In fact, it seems to be understood as a natural right in most of the animal kingdom. Animals understand when they are stealing from each other. They may do it, but their body language indicates an understanding that they are taking something to which they don't have a right and the owners will defend their loot.


 
At 9/20/2012 3:07 PM, Blogger Methinks said...

That's not a response, that's an evasion. Why won't you answer the question?

Oh, Ron. Why do you ask questions to which you already know the answer?

 
At 9/20/2012 3:10 PM, Blogger Ron H. said...

marmico

"Sowell's claim is that redistribution (the earned income tax credit, for example) is handing out a fish. That claim fails because less fish have been handed per capita out since 1980."

What the...?

Please try harder to make sense.

 
At 9/20/2012 3:13 PM, Blogger Ron H. said...

"re: " No. You are promoting redistribution,"

well,actually, no.
"

Well actually, yes. Remember this?

"So perhaps, instead of saying "The Fallacy of Redistribution", we should say: "The Fallacy of not Redistribution" because all the world's modern and powerful industrial economies do, in fact, re-distribute."

 
At 9/20/2012 3:16 PM, Blogger efimpp said...

>logical fallacy
sorry, i don't see it. you say US were closer to ideal back than. We lived worse "than". "Now" we live better. How can you possibly use pure logic to prove then "than" was better then "now"?

>It gave us US.
Prussia did quite well too than, on different principles. Not that I like their principles better :-)

also you define some principles (which I may or may not agree on) and prove me that "than" was closer then "now". And derive from them that coercive redistribution is wrong. OK, I agree, it's against the principles.
But life is more complex then principles. Somehow all developed countries are moved to bigger state. It is wasteful - I totally agree. But maybe, just maybe consequences of not doing it (in currently existing world) are worse?


> we extended suffrage and rights to all adults.
Hey, some strongly believe that it what brought us nanny state!


property - I'm not an anthropologist. But I strongly believe that your understanding of individual property is quite different from any stone age society (some still leave on Earth even now - so it can be checked).

 
At 9/20/2012 3:23 PM, Blogger Larry G said...

re: " "So perhaps, instead of saying "The Fallacy of Redistribution", we should say: "The Fallacy of not Redistribution" because all the world's modern and powerful industrial economies do, in fact, re-distribute."

well no.

I'm pointing out that there are no existing real examples of what Sowell is advocating other than 3rd world countries.

I'm not necessarily advocating redistribution - that would be an additional assertion to the first ....

but what I am asserting is that all the best world's economies - distribute income.

and that the only ones that don't seem to be 3rd world countries.

 
At 9/20/2012 3:25 PM, Blogger Ron H. said...

"i suspect most people would be willing to live in another country for a price.

what it is might vary, but at $100k a year, i think you could get most americans to go. at $1 million, nearly all.
"

If that's an offer I'll send you my phone number and address, and begin packing today. :)

 
At 9/20/2012 3:38 PM, Blogger Ron H. said...

morganovich: "all the great nations have kings. if countries were really better off without monarchies, then give me an example of some countries that do not have them and are doing well.

-larry's ancestor circa 1300.
"

Larry: "Morg - aren't you advocating something that does not currently exist?

how "logical" is that guy?
"

LOL


Zing!!

 
At 9/20/2012 4:12 PM, Blogger morganovich said...

"logical fallacy
sorry, i don't see it. you say US were closer to ideal back than. We lived worse "than". "Now" we live better. How can you possibly use pure logic to prove then "than" was better then "now"? "

you totally missed this.

your fallacy was the claim that one violation of rights justified another.

"But life is more complex then principles. Somehow all developed countries are moved to bigger state. It is wasteful - I totally agree. But maybe, just maybe consequences of not doing it (in currently existing world) are worse? "

and this is another logical fallacy that you keep repeating.

you appeal to practice. you say "they do it, there must be a reason and it may be a good one"

that is not a valid construction.

democracy is largely antithetical to rights.

what has happened is not an optimization, it's nations losing their way. once you subjugate rights to democracy, you no longer have inalienable rights.

democracy is just a particularly pernicious form of tyranny. unleavened by rights, you can vote others into slavery.

the issue is that democracy is winning over rights. this is the victory of tryanny (of the majority) over liberty. if you pay no tax, of course you vote for government programs. it's free stuff for you.

now we have a massively levered system that's going to fail. debt is stratospheric. social promises cannot be met. there is no way to meet the health and retirement promises that democracies have promised.

people who paid in will not be able to get what was promised. how is that not a moral outrage? how is that not a failed system?

nations that do not practice redistribution do not wind up in such deep debt. the us was a creditor nation before fdr. now we are mired in ever swelling debt.

we have $16 trillion in debt and 10 times that in unfunded liabilities. we are saddling our kids with a ruinous balance sheet.

so are the other countries doing this. so where is the ethics in that?

where are the ethics of making promises upon which oldsters and retirees have relied that will not and cannot be kept?

for all your posturing about the morality of taking care of people, you seem to be avoiding that vast elephant in the room.

"
property - I'm not an anthropologist. But I strongly believe that your understanding of individual property is quite different from any stone age society (some still leave on Earth even now - so it can be checked). "

and this is just nonsense.

so, you and i are strolling through the woods 30,000 years ago. you see a bush with berries and pick them. whose are they if not yours? are you seriously trying to argue that if i grabbed them against you will you would not feel like i stole from you or that our distant ancestors had no such concept? that's absurd.

further, it's irrelevant. there is a gaping hole in your argument: you need not understand a natural law for it to work upon you.

alley oop the cave man did not understand the law of gravity either. he could not write it out. f = g(m1*m2/r^2) would not be discovered and enshrined in the knowledge of humanity until much later. but it still worked.

natural law as laid out by locke and mill etc was not set down and elucidated until much later, but the forces they describe were still real. societies that eschewed killing and theft prospered from the creativity and productivity that such liberty unlocked. those that did not remained mired in stagnation.

the recognition of the natural right to property leads to progress, wealth, productivity, and advancement.

this is a fact. that's why they call it natural law, not natural suggestions.



 
At 9/20/2012 4:15 PM, Blogger Paul said...

Larry the Liberal,

"but what I am asserting is that all the best world's economies - distribute income."

As usual, stupid point. So, what? That's like asserting water is wet. The undeniable fact is "the best world's economies" are more free than the worst world economies. It's no coincidence the worst recovery since the Great Depression has coincided with decline in competitiveness thanks to the Redistributionist-in-Chief's ruinous policies. We're never going to reach the ideal, but we can roll back your hero Obama's leviathan and repair the wreckage.

 
At 9/20/2012 4:46 PM, Blogger Ron H. said...

"re: redistribution vs forced savings

no connection at all?
"

Yes. The use of force is common to both. Otherwise there's no connection.

 
At 9/20/2012 4:52 PM, Blogger morganovich said...

"
> we extended suffrage and rights to all adults.
Hey, some strongly believe that it what brought us nanny state!"

actually, the modern welfare state was first created by otto von bismark.

he did it to both buy off the population and to make them dependent upon the state so that he could conscript their sons for his wars of empire and not encounter resistance.

"blood and iron".

 
At 9/20/2012 4:59 PM, Blogger Larry G said...

actually the US was first:

http://en.wikipedia.org/wiki/An_Act_for_the_relief_of_sick_and_disabled_seamen

 
At 9/20/2012 5:03 PM, Blogger efimpp said...

This comment has been removed by the author.

 
At 9/20/2012 5:07 PM, Blogger efimpp said...

>your fallacy was the claim that one violation of rights justified another.
never said this. I said that society isn't really built on principles. Which may or may not be correct - but has nothing to do with logic.

>you appeal to practice. you say "they do it, there must be a reason and it may be a good one"
that is not a valid construction.

no, it is not. but it isn't exactly my construction - you don't get it. My construction is - evolution of the societies brought us to current point where all redistribute. If non-redistribution had a huge evolutionary advantage it might win in some state which by now could be a world's leader. But this didn't happen. Maybe, just maybe, a model in which this advantage is sooo obvious is too simplistic one?



>about berries
but presently someone will say that whole forest is her, and all the berries in it, no matter who picked them. and this would not be accepted 30,000 years ago.




Yeah, US seems to be failing.
But democrats say it's because of W's tax cuts and wars. Because of too little redistribution. Both explanation are logically possible. to discuss specific policies one should come to Earth and see consequences. Just saying "redistribution is against the principles, so stop it" doesn't help much.


>the recognition of the natural right to property leads to progress, wealth, productivity, and advancement.this is a fact.

And who is illogical now? Was there an experiment in which all the variables were the same except recognition of natural property right? No? Then it's not the fact, it's post hoc, ergo propter hoc.

 
At 9/20/2012 5:09 PM, Blogger Ron H. said...

efimpp:

>to Karl Marx's beloved serfdom
OMG
KM was considered a decent economist then
and he always stated that capitalism is the best thing so far
he just thought that development leads to more centralization and class struggle can't be resolved without giving means of production to workers
it all made sense then
life proved it didn't work

Are you related to Larry G? You write nonsense almost as well as he does.


You might find more sympathetic listeners at this blog.

 
At 9/20/2012 5:12 PM, Blogger Larry G said...

no me, but a good man!

;-)

 
At 9/20/2012 5:19 PM, Blogger Ron H. said...

"It only exists for max like 10,000 years out of 100,000."

??

Of course you have a reference for that absurd claim, don't you? It seems you need to learn the deffinition of property.

How would you know what people considered their natural rights more than 10k yeare ago?

Don't you think people gathered food that they considered theirs? Do you think they made tools that they considered their property?

Get a clue.

 
At 9/20/2012 5:24 PM, Blogger Ron H. said...

"Methinks seems to think that no matter how much you pay, you're entitled to the max and that's not how most health care works even in the good old USA with private healthcare."

In the US you can have as much healthcare as you want just as you can have as much food, shelter, clothing, or anything else you want.

Yes, you have to pay for what you get, but you are not forced to leave the country for any of them as you are in UHC Canada.

 
At 9/20/2012 5:31 PM, Blogger Hydra said...

Nonsense.


This suggests that no matter how skewed the distribution becomes, society, and most individuals, will still be better off, than if hoarding is meddled with.

Clearly, there is some level of skewness at which those at the top will find it harder and harder to accumulate anything from consumers, who have little to work with, and even less incentive than those at the top to contribute.

The example of the russian farmers who ate the young animals applies. This had to make it harder for the wealthy to get their veal cutlets. It makes no difference in the end if the wealth is expropriated by the government or by the wealthy of by corporarate oligoplolies: when poor people are trapped ina cycle of continuous expropriation, they will produce less.

Consider the pilots at American Airlines: relations with management have been a wreck for decades, culminating in a thirteen percent concession by pilots while corporate managers took millions in bonuses. Today, management cannot even entice the pilots with an offer of a 13% stake in the company.

It is not useful to suggest or rather proselytize that there is no limit to the amount of skewness that makes sense, because it is so obviously ridiculous.

Indeed, the amount of skewness society can tolerate before bad results happen may be quite high, but it is not infinite. A better post would be one qhich inquires how we might discover the proper limits, before bad things happen.

 
At 9/20/2012 5:34 PM, Blogger Ron H. said...

no, it is not. but it isn't exactly my construction - you don't get it. My construction is - "evolution of the societies brought us to current point where all redistribute. If non-redistribution had a huge evolutionary advantage it might win in some state which by now could be a world's leader. But this didn't happen. Maybe, just maybe, a model in which this advantage is sooo obvious is too simplistic one?"

Did Larry write this for you?

 
At 9/20/2012 5:39 PM, Blogger Larry G said...

re: " Did Larry write this for you?"

I have to say, the man did a FINE job of it!

:-)

 
At 9/20/2012 5:39 PM, Blogger Hydra said...

"Well, the farmers in the Soviet union stole from the poor people"

===================================

The farmers were the poor people. The rich people owned the farms the poor people worked on. The societs did not confiscate teh farms from the poor people they confiscated them from the rich.

The model they put in place was a falure, but the one it replaced was not making the serfs better off.

Which had something to do with a revolution occurring.



 
At 9/20/2012 6:07 PM, Blogger Hydra said...

what has happened is not an optimization, it's nations losing their way. once you subjugate rights to democracy, you no longer have inalienable rights.

--------------------------------

If you have one person on an island or a planet and he controls all the resources then he has inalienable rights.

As soon as a second person aappears, that person has inalienable rights, including the right to life.

The first person, having ownership and control of all the resources could deny the second any prospect of life, in which case the right of ownership would supercede the inalienable right to life.

The first person could agree to an exchange of a tiny portion of the resources in exchange for labor which would be applied in making the remaining resources more valuable. The wealth of the two of them would increase, but there is nothing in this scenario that guarantees the second person will ever be any better off than required to allow him the absolute minimum inalienable right to life. The second person would essentially be a slave.

But if some unseen third power steps in and says, "Nah, you got to share the resources", then both parties have an incentive to make their share worth more. The combined efforts of the two will make the pair of them better off as a whole, than if one works with no hope of improvement and the other watches. Even though the wealth of the first on the scene has been redistributed.

If it is not some unseen or omnipotent power such as government or God that enforces the redistrbution, then eventually there will be a third hman involved and two will (democratically or otherwise) enforce some kind of redistribution on the third.



Once you subjugate rights to democracy, you no longer have inalienable rights, and if you do not subjugate rights to democracy,m then only the dictator will have inalienable rights.

It is a nice idea in theory, but rights are not and never have been inalienable. More properly, rights are property which we trade one against another: you have the right to peace and quiet and I have the right to own a stereo, so we reach an accomodation in which some of each right is traded for others.

Those claiming inalienable rights are merely demanding an exhorbitant price, placing the value of their property above all others, refusing to participate in a free and fair market. This exposes their position as selfish despots, petty dictators who wish their one right to be the one that is inalienable, at the expense of all others.









 
At 9/20/2012 6:52 PM, Blogger Methinks said...

The farmers were the poor people. The rich people owned the farms the poor people worked on. The societs did not confiscate teh farms from the poor people they confiscated them from the rich.

Nope. I see your grasp of Russian history is on par with Larry's grasp of current events.

 
At 9/20/2012 7:01 PM, Blogger efimpp said...

>The societs did not confiscate teh farms from the poor people they confiscated them from the rich.

technically it's sort of true
land was declared property of the state (confiscated from all, but mostly reach)
and given to farmers to use
10 years after it was confiscated from "wrong" farmers (mostly, ones who were a bit reacher then others, but by no means really reach) and all farmers forced to create o "coop" - in fact state's farm

 
At 9/20/2012 7:04 PM, Blogger Larry G said...

I think the American Indians had a similar kerfuffle.

 
At 9/20/2012 7:37 PM, Blogger juandos said...

"I think the American Indians had a similar kerfuffle"...

No doofus, they lost...

They were hardly first ones in that sad position...

 
At 9/20/2012 7:39 PM, Blogger juandos said...

ron h says: "Did Larry write this for you?"...

Heh!

I could hear the sound of that smack all the way out here...:-)

 
At 9/20/2012 7:40 PM, Blogger Larry G said...

re: " No doofus, they lost"

yeah but they got a whole bunch of reservations, free education and health care, food, housing and casinos.

 
At 9/20/2012 7:47 PM, Blogger Methinks said...

okay, first of all, it's "rich" not "reach". "reach" means something else entirely.

Second, everything was confiscated from everybody. Not "mostly" from the rich. The Kulaks were targeted for execution because they resisted. The Kulaks were the more industrious and successful peasants.

No peasant was happy about the confiscation of land.

and it wasn't "given to the peasants to farm". The land and the peasants became the property of the state. The product of the peasants' labour belonged to the government and when the peasants rebelled, the Soviets slaughtered them like animals. When the peasant resisted being herded onto the Kolhoz, the Soviets slaughtered them like animals.

Where the hell do you people get your history?

 
At 9/20/2012 7:47 PM, Blogger Ron H. said...

"I'm pointing out that there are no existing real examples of what Sowell is advocating other than 3rd world countries"

LOL

You are now arguing against your own statement. If not redistributing is wrong, then you must be arguing for redistribution. You don't even understand your own statements!

You're funny. Thanks for the laughs.

 
At 9/20/2012 7:53 PM, Blogger Ron H. said...

"Nonsense.

This suggests that no matter how skewed the distribution becomes, society, and most individuals, will still be better off, than if hoarding is meddled with.
"

You are correct. That's nonsense. Hoarding hasn't been discussed yet.

Learn some economics.

 
At 9/20/2012 7:55 PM, Blogger Ron H. said...

"do you think any/all private insurance no matter the price is "inadequate" in the US?"

You didn't answer the question. You can't answer with another question that has no bearing on the topic.

That only works in Larryworld where logic and reason don't exist.

 
At 9/20/2012 7:59 PM, Blogger Ron H. said...

"Indeed, the amount of skewness society can tolerate before bad results happen may be quite high, but it is not infinite. A better post would be one qhich inquires how we might discover the proper limits, before bad things happen."

I'm looking forward to reading such nonsense on YOUR blog. be sure to let us know when you create it.

 
At 9/20/2012 8:01 PM, Blogger Ron H. said...

"I'm saying that anyone who has basic government style health care that feels they are not getting what they want - can go where they can pay more to get more."

Why should people be forced to pay for something they don't get, and then go somewhere else to pay again for what they need?

 
At 9/20/2012 8:06 PM, Blogger Ron H. said...

"The model they put in place was a falure, but the one it replaced was not making the serfs better off."

At least 20-30 million of them didn't starve due to government policy.

 
At 9/20/2012 8:09 PM, Blogger juandos said...

"yeah but they got a whole bunch of reservations, free education and health care, food, housing and casinos"...

larry g you would not want to live on a reservation anymore than you would want to move to Singapore...

Regarding the casions, well God love 'em, its nice to see something break their way...

 
At 9/20/2012 8:23 PM, Blogger Ron H. said...

"If you have one person on an island or a planet and he controls all the resources then he has inalienable rights.

As soon as a second person aappears, that person has inalienable rights, including the right to life.
"

Blah Blah Blah

More nonsense

Blah Blah Blah


"Those claiming inalienable rights are merely demanding an exhorbitant price, placing the value of their property above all others, refusing to participate in a free and fair market. This exposes their position as selfish despots, petty dictators who wish their one right to be the one that is inalienable, at the expense of all others."

It's clear you have no understanding of the word "inalienable", and you are having trouble with the concept of "property.

Rights are negative. No one has a "right" to claim ridiculous amounts of land as Columbus did in claiming the entire Western Hemisphere for the King and Queen of Spain.

 
At 9/20/2012 8:28 PM, Blogger Ron H. said...

"I could hear the sound of that smack all the way out here...:-)"

It's easy to imagine. The similarities are striking! :)

 
At 9/20/2012 8:30 PM, Blogger Hydra said...

Actually plenty of serfs starved. Serfdom was abolished around 1860. As the tsar noted, better to release them from above thsn have them revolt from below.

That said, their freedom was highly proscribed. The revolution that eventually happened was partly the result of being trapped with little or no chance of advancement.

 
At 9/20/2012 8:30 PM, Blogger Ron H. said...

"yeah but they got a whole bunch of reservations, free education and health care, food, housing and casinos."

In your world that free education and healthcare are way more valuable than self determination and free choice. Don't sell it short.

 
At 9/20/2012 8:32 PM, Blogger Hydra said...

Are you saying they were better off as slaves under the previous government policy?

 
At 9/20/2012 8:32 PM, Blogger Ron H. said...

"Where the hell do you people get your history?"

It's mostly made up on the fly as needed to suit the current narrative.

 
At 9/20/2012 8:35 PM, Blogger Hydra said...

An invitation to leave is the highest kind of compliment. Let me know when you have something to say.

 
At 9/20/2012 8:38 PM, Blogger Hydra said...

What is hoarding if it is not unlimited acquisition absent any form of redistribution? Lean some english..

 
At 9/20/2012 8:39 PM, Blogger Ron H. said...

"Regarding the casions, well God love 'em, its nice to see something break their way."

The trouble with many Native American casinos, in my experience, is that most of the customers are also Native Americans. Probably not what they intended.

 
At 9/20/2012 8:43 PM, Blogger Ron H. said...

"What is hoarding if it is not unlimited acquisition absent any form of redistribution? Lean some english"

Not sure if this is a lack of understanding on your part of the meaning of the word "hoarding", or just the same old lack of economic understanding you keep showing off.

 
At 9/20/2012 8:45 PM, Blogger Hydra said...

I did not know that LOL was a country wiith unlimited acquisition. If unlimited acquisition leads to more wealth for everyone, then that in itsrlf is one form of redistribution. Redistribution, per se is neither bad or good. What you are really arguing about is who gets to make the rules for redistribution.

You prefer rules for redistribution that allow a few people to get most of the redistribution.

 
At 9/20/2012 8:57 PM, Blogger Hydra said...

Sorry about the spelling. I get my history from history books, not economic philosophies. As late as 1860 30% of serfs lived on estates that owned 500 or more serfs.

Before the soviet era serfs were sllotted small plots of land for their own use, after working the masters land. And they paid rent for their subsistence plots.

The situation they lived in was sufficiently desperate that tje lies and ideas of the revolutionary government looked good.

It turned out not to be so, but that doesnt make the previous system of unlimited acquisition any better than the failure it proved to be.

 
At 9/20/2012 9:06 PM, Blogger Hydra said...

Hey. Ron. When i made the argument that gatherers had ownership of what they gathered you jumped all over my case.

 
At 9/20/2012 9:12 PM, Blogger Hydra said...

Another invitation to leave? Scoring points i would give this round to efimpp. His logic is more straitforward and correct than yours.

And he is correct that you mis stated his position, as you usually do.

 
At 9/20/2012 9:18 PM, Blogger Ron H. said...

"I did not know that LOL was a country wiith unlimited acquisition. If unlimited acquisition leads to more wealth for everyone, then that in itsrlf is one form of redistribution. Redistribution, per se is neither bad or good. What you are really arguing about is who gets to make the rules for redistribution.

You prefer rules for redistribution that allow a few people to get most of the redistribution.
"

As you probably know but are pretending not to, the prefix "re-" means "again". To redistribute something is to take it from where it is and put it somewhere else. In the context of this thread, that means taking income or wealth from those that have earned it, and giving it to those who haven't. That creates a
negative sum outcome in every case.

 
At 9/20/2012 9:27 PM, Blogger Ron H. said...

"Hey. Ron. When i made the argument that gatherers had ownership of what they gathered you jumped all over my case."

If that's a reference to owning and controlling all the resources then you failed to make a point about gatherers and ownership.

 
At 9/20/2012 9:30 PM, Blogger Ron H. said...

"Another invitation to leave? Scoring points i would give this round to efimpp. His logic is more straitforward and correct than yours."

I doubt that whoever you're talking to cares very much about your scoring of points or your judgement of logic.

 
At 9/20/2012 9:54 PM, Blogger Hydra said...

Has anyone explained how redistribution makes the rest of society more prosperous "in theory"? As far as I've seen it explained, this is simply taken on faith and never proved, even theoretically.

==============================

See my example of one man on an island. He has ownership of all of the resources and his inalieanble right to live.

Suddenly another man shows up. The inalienable right of the first and undisputed ownership is reduced by the inalienable right of the second.

They can either have a master slave relationship in which the inalienable right of the second is reduced toa minimum so as to nterfere with th rights of the first a minimum amount. In this case the two of them are barely better off than the one was before.

However, with some kind of redistribution, both my work profitably to increase their wealth and the entires society, all two of them is better off than the one was previously, or than the two of them with one in a state of slavery and the other in a state of affluent indolence. With both having resources to work with both are better off even is one is in a state of working slavery and the other is working diligently with the resto f the resources and keeping them too himself.



 
At 9/20/2012 10:27 PM, Blogger efimpp said...

>Where the hell do you people get your history?
and you?
what you say is mostly correct, what I said mostly doesn't contradict it -it's just different aspects of the same issue.

Poor, lazy farmers did not resist, they were happy to redistribute. They didn't know they will become slaves.

Farmers became property of state not in 1917, in late 20-th - early 30-th
In 1917 land became the property of state, and was give to people who work on it for free. In theory.
http://en.wikipedia.org/wiki/Decree_on_Land

 
At 9/20/2012 10:27 PM, Blogger Hydra said...

If property right were not a natural right, we would not consider theft immoral.

In fact, it seems to be understood as a natural right in most of the animal kingdom. Animals understand when they are stealing from each other. They may do it, but their body language indicates an understanding that they are taking something to which they don't have a right and the owners will defend their loot.

==================================

How does defending ones loot translate into making theft universally considered immoral?

We invented the concept of theft as an immoral act. It is a way to reduce the labor involved in defending our loot. Consider it a mutual trade compact in which we each agree to use peer pressure and survaillance to reduce theft.

Each of us enjoys fredom from theft proportional to how much we are willing to help prevent it for others. As part of the bargain we give up some of our ability to steal, since the peer pressure and survaillance applies equally against us as for us.

Freedom from theft is the first rule that gets written in favor of fair trade: one of the first inalienavbble rights which we expect enforced. But we can equally consider freedom from theft to be a form of property as we can an inalienable right. It is property that we freely recognize and trade for: we pay more for homes in safe neighborhoods.

But what we have here is a situation in which some people do not want to trade fairly. They want others to respect their "natural" right to freedom from theft, while they collect as much loot as possible. The end result is unequal protection from theft and unequal "natural" or "inalienable" rights.

Outright theft is considered to be immoral, but other more subtle theft is considered fair game, with the winner being the one with the most loot: protected by the vigilance of others.

I think it is a better, more consistent, and more realistic view to consider rights as property to be fairly traded, like any other property. As soon qas you set one right up to be inalienable, you set up a gold standard situation in which everything and everone else is subject. As in subject to the dictatorship of whoever claims the primary first right. Sooner or later the inalienable right collides with the undeniable need.

 
At 9/20/2012 10:35 PM, Blogger Hydra said...

they were happy to redistribute. They didn't know they will become slaves.

==================================

They were real slaves before. They thought they were getting out. They got sold a bill of goods, a bill that was widely in popular currency at the time, as described in the news quote from the day.

The Chinese changed from the old style commune to a new style of state supported capitalism. It remains to be seen which style of redistribution will work best, but every country has one.



 
At 9/20/2012 10:47 PM, Blogger Hydra said...

There is no shortage of kidneys. nearly everyone gets born with two of them. Yet there is a chronic shortage of kidneys both in time and in utility.

Those who have been waiting longest are first in line to get one, and by the time they get it, both they and the kidney recieved may be old and decrepit.

Or, they may get a young and vigorous kidney when they themselves are failing for other reasons. A younger person may get an older kidney, which later fails and the yong person may have to get in line again.

Maybe you can make an argument taht the kidneys can go to whoever will pay the most for them, but that does nothing to reslove the misuse of resources to to maldistribution in time and maldistribution in quality.

No one is suggesting, yet, that we harvest kidneys by force and redistribute them according to a state formula to reduce the maldistribution in time and utility.

Some people suggest that kidneysa re property and should be available for sale to the highest bidders, but it isn;t clear to me that this is a case in which money alone will guarantee the best re-distribution of resources.

 
At 9/20/2012 10:47 PM, Blogger efimpp said...

>They were real slaves before
not for 65 years
but they still didn't own any land at all personally up to 1906 (land belonged to commune)
BTW - so mach for universal and natural property rights - most farmers considered communal property as natural even in 1900!

 
At 9/20/2012 10:50 PM, Blogger Hydra said...

If that's a reference to owning and controlling all the resources

====================================
I could be wrong. I sometimes am.

As i recall it had something to do with the relstive timing of the development of the concept of ownership, the invention of capitalism, and the development of government to police these new "rights".

 
At 9/20/2012 10:52 PM, Blogger hancke said...

However, with some kind of redistribution, both my work profitably to increase their wealth and the entires society, all two of them is better off than the one was previously, or than the two of them with one in a state of slavery and the other in a state of affluent indolence. With both having resources to work with both are better off even is one is in a state of working slavery and the other is working diligently with the resto f the resources and keeping them too himself.

You are incorrectly assuming that both will put out equal effort towards a common good. Therein lies the difference between confiscating existing wealth and future wealth.

 
At 9/20/2012 10:57 PM, Blogger Hydra said...

>They were real slaves before
not for 65 years

===================================

They were emancipated on paper, but like the colored in america they were subject to so many rules as to make freedom mostly a bad joke.

In both cases abolishing slavery was for different from establshing freedom. That had to be fought for and paid for and defended, like any other property.


 
At 9/20/2012 11:15 PM, Blogger Hydra said...

You are incorrectly assuming that both will put out equal effort towards a common good.

================================

Nope. I ssume that after redistribution both will work for their own benefit.

The difference is that in the prior distribution, the previous owner has little or no incentive to redistribute. He can continue to own nearly everything and have his narly his full inalieanable right to life and everything in it.

Recognizing the other (new) persons inalielable right to life, he may not snuff it out by denying all resources, but as owner he must give up only the minimum to sustain life for the other: effectively keeping him as a slave.

With little to work with and zero chance of gain, that second person is unlikely to work very hard. As a result the first person is little better off.

However, with a little enlightenment, the first perso will realize thet he could be better off if he gives the second person more to work with and more to work for. It is possible for the second person to become a customer, willing to buy more (surplus) goods and services (rights) from the first.

Provided the first person still has enough to work wiith, he is no worse off, and he is better off to the extent that he can sell previously unused goods and privileges (rights). This is the Henry Ford epiphany.

It is not required that either of them work for a COMMON good. Each may work for their own good.

But the distribution of resources (partly) determines how much individula good (and therefore how much combined good) may be produced.

Notice that combined good is not exactly the same as the common good, althought the common godd is PROBABLY BUT NOT ALWAYS better when the combined good is better.



 
At 9/20/2012 11:25 PM, Blogger Methinks said...

and you?

I can tell you where I don't get my history. I don't get it from wikipedia.

Look, what you're saying is...um...wrong.

But, having read a lot of your comments today, I've come to realize that English is not only not your native language, but you're not that proficient in it. I don't say this to insult you at all, it's just that when you're writing, it's hard enough to make your point, but a lack of proficiency is just going to lead to misunderstandings.

 
At 9/20/2012 11:29 PM, Blogger Hydra said...

What if one of the men is stonger and can therfore produce more than the other? Would this change the optimum distribution of resources?

Of course it would.

You would not divide he resources equally if one can use them twice as productively as he other. He would then use the surplus goods produces to sell to the other.

Pretty soon, he will have so much (self generated ) wealth that he can afford to sell it at a lower price then the other person can make the same goods for. When he has a big surplus, he may be willng to practically give it away.

That is a form of redistribution.

But the other person can get goods cheaper the he can make them, so he cuts back on his work. at which point the wealthy industrialist accuses the other half of the population of being shiftless ne'er do wells, unwilling to work.

Where have we seen that story?





 
At 9/20/2012 11:34 PM, Blogger Hydra said...

Now, we have not said which ONE of the two turned out to be the better, more productive worker.

What if it is the immigrant?

Should he be entitled to a better distribution, in order to increase the commmon (combined individual) wealth?

We cannot assume that the best distribution of resources depends on who owned it first.

 

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