Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
More battles at the political fringes
Published on September 25, 2007 By Draginol In World Trade Issues

Over at a fringe left-wing site, a discussion on economics recently came up. It was very interesting to see some of the viewpoints on how wealth is created and used and so forth.

Here are some of the highlights:

Income has nothing to do with it really. Income is only a derivative, the real culprit is WEALTH. Income comes in two ways, (1) from work i.e., being paid for your labor or (2) from WEALTH applied over time, whether you call it rent, interest, capital gains, property appreciation, or whatever. Those whose only income comes from work will never become wealthy.

On the other hand, the wealthy have gotten away for far too long, saying "who, me??" when it is time to cough up money for the common good. They all nod in agreement that wealth will trickle down, then they install an impermeable barrier to reduce that trickle to mere molecules.

I would propose something along the lines of Jonathan Swift's comments on children as to how the wealthy should be treated -- we should eat them! Every time I see a picture of Carlos Slim, I think that he's not slim at all, nice amount of marbling on that meat, he would be great barbecued. Maybe a little adobada marinade and then just plop him on the asadero --yum! The only drawback I can see is at first there would be a lot like Sumner Redstone and Kirk Kirkorian; way past their prime and tough and stringy. You would have to stew them a long time to make them palatable. But once all the old goats have been consumed, there would be better pickings among the ones left.

There is a certain logic in having them give back to humanity while they are alive, er make that shortly after they are alive, as it would just be a waste to let them be cremated way past the point of well done. If they wanted, they could even be memorialized with a plaque on the barbecue.

Next time you go to WalMart and see all those barbecues out front, think how nice it would be if one of Sam's kids was there, slow cooking with a spicy rub. Nothing like jerked rich jerk to whet the appetite.

Here you see someone who doesn't understand how the wealthy got wealthy and thinks that the wealthy don't give back to the "common good". This person is apparently unaware the the wealthy are the ones who pay most of the taxes. The top 1% pay over a third of the taxes. Moreover, the wealthy are the ones who overwhelmingly contribute the most to charity (ironically, statistically the very rich and the working poor are the two groups that give the most, even accounting as a % of income).

Another person has made an argument for having a cap on how much someone can make and then "force them out of the system":

I've always been partial to a "career cap" instead of an annual cap, upon which point one is kicked out of the system so that that accumulated mega-wealth then can't be used to further undermine the common good or manipulate the system further via lobbying, deregulation campaigns, anti-environmental propoganda, stockholder/board influence, RW thinktanks, accumulated interest, kickbacks to regulators/investigators, etc.

When I argued that a cap on income would create disincentives for people to work the response was:

Most inventors invent for the same reason musicians make music -- because it's what they do. Saying they couldn't become more than multi-millionaires probably wouldn't stop them.

The obscenely wealthy Walton family has done nothing of value for the country or the world -- once Sam died. The Walton children are now just parasites who make money by treating other people as shit.

Most people who have made valuable contributions to society made those contributions long before they would have hit any income cap.

Most of the people in the financial industry make money by gambling with other people's money -- not by producing anything of value to the country.

Most of the CEOs who run the giant corporations aren't necessarily any better than other people. They just belong to a very exclusive club that rewards failure. Fuck up one company and you'll be hired by another within a month. Look at George Bush -- screwed up every business he every touched, and was bailed out repeatedly, until he got his hands on the big enchilada and he's flushing that down the toilet, using both hands.

The idea that an income cap would stifle creativity and inventiveness is just corporatist crap. It's actually the other way around. A lot of inventiveness is stifled because the corporatists have made the cost of entry so high.

So the idea here is that the rich are hogging the wealth.  Wealth is produced by the people and the rich are people who are stealing this wealth. If we could kick these people out of the system, then other people would have their turn.

Or as one person wrote:

Make the income tax progressive again with no limit on the top marginal rate. Let it rise above 100%. It would be a polite way of asking the biggest pigs to step away from the trough and let the others have a chance.

In their reality, the Bill Gates or the Henry Fords of the world are easily replaced. Everyone can do what they did if they just got a chance instead of being held down by these "pigs".

Another person, arguing against my position that caps on income would remove the incentive for the most productive to keep working wrote:

You're assuming money is the reason extraordinary people do extraordinary things. I doubt that. Take away the money and extraordinary people would still do extraordinary things. Maybe more so.

Sociologists have known for a long time that in a "gift society" the motivation for greatness is still there - just different. The incentives are tribal status, self-fulfillment and altruism.

Obsessive money lust is pervasive nowadays, but societies without it have functioned fine.

The issue I take here is that what exactly is a "gift society".  Our society certainly doesn't match that.  Motivated people tend to be competitive whether that be in sports, business, or elsewhere.  Competitive people want recognition for their achievements. In athletics, we give trophies, medals, ribbons and other marks of success.  Our soldiers win medals and ribbons for bravey, tours of duty, etc.  And yes, successful businessmen buy things that demonstrate their success.  Perhaps if successful businessmen weren't so profoundly villainized in the media and in society in general but instead rewarded them with accolades, medals, etc. then the incentive for successful businessmen to purchase their own rewards would be lessened.

I argued that no one is 100% altruistic. There are limits.  I may enjoy writing software but there comes a time where it's not fun or I have to sacrifice something in order to achieve my objective. To do things that aren't fun, people have to be compensated. That's why I wrote the article "Robots of Capitalism" to illustrate this point.

But the response was that by my logic, garbage men should make a lot more money than CEOs because a garbage man's job is a lot less fun than that of a CEO.

To which I wrote:

A garbage man doesn't make as much as a professor (usually anyway) because the number of people who can be a garbage man are far more than the number of people who can be a professor.

As I mentioned elsewhere, the reason why CEOs and pro basketball players make so much is because only a tiny percentage of the population can do what they do at their level.

So what makes people mega rich? Again, it boils down to supply and demand: In a capitalistic system, how much we make is tied to how much wealth we produce combined with the competition for people who can produce that wealth.

The value of what we produce is determined by other people (which is what makes capitalism work in the first place). Bill Gates doesn't get to decide he's rich. Society does by valuing what he does enough to pay him for the products and services he provides.

The responses I got to this included:

If only the selfish personal motive is what you recognize that drives people because your mindset is authoritarian or 'free market' disciple, rather than elevating the common good out of common concern, you're not really equipped to be living in, or contributing to, a democratic society with the collective wellbeing in mind. A rising tide should lift all boats, not just the fanciest 5 ships in the marina; -especially if the rising tide or productivity is generated by those being cut out of their corresponding contribution.

To which I say: Yea, I don't like to do things I don't want to do. So sue me. If I'm doing things I find unpleasant, then I expect to get something out of it. But the nice thing in a capitalistic system is that by being rewarded for doing things that I don't enjoy, I might choose to produce things that I'm better at doing than other people rather than spending my time playing frisbee or something. And if the things I'm good at producing are valued by society, society does in fact benefit.

Human nature is pretty straight forward on this point: We want to do the things we want to do and we don't want to do the things we don't want to do.  Capitalism works reasonably well as a way to motivate people to do what they're good at rather than doing just what they want to do.

 


Comments (Page 1)
on Sep 25, 2007
Simple answer: to liberals yes, Rich people are greedy pigs;  to conservatives the answer is no, Rich people are to be admired for raising their wealth and investing their money in ways that lead to more opportunity for everyone.
on Sep 25, 2007
Yes, rich people are greedy pigs, but then so are we po' folks.
on Sep 26, 2007
I think you're a brave man for tackling this subject, regardless. I can't agree with the 'greedy pigs' statement as I know a few pigs and, for the most part, they're good, kind animals.

But seriously, I think those who have are indeed generous but aren't going to wave flags and send out press releases when doing their charitable work, which is why common folk are incredibly envious of the rich. Most of the world's rich have made incredible sacrifices and have worked longer and harder to get where they are.

I say good for them. If you're envious, then get up off your butt and make a go yourself or stop bitching because someone else is doing better than you.
on Sep 26, 2007
I think the prime mistake being made in the logic here is that the characteristic "greed" is limited to the wealthy. Can it not be said that the ones wishing to put caps on income so that they can have a closer look at the trough are greedy? Sounds like greed AND envy to me.
on Sep 26, 2007
there was a man in las vegas who won 10 million. one year later he was living on the streets. sorry i forgot to tell you that he started out on the street
on Sep 26, 2007
what i mean is that if you took all of dreginols money and gave it these idiots on the left they would be broke in a year or so. and they would not have done anything with it.


and if dregnol would be rich in a year or so.
on Sep 26, 2007

If it's only "the rich" who are greedy, why are there so many "poor" people spending so much on the lottery and in the casinos?  If "the rich" only care about the accumulation of wealth, why are there so many high end products and services out there? 

From where I sit, the only difference between a class warrior and a bigot is, the class warrior's blind hatred is acceptable by society.

on Sep 26, 2007

Here I sit at 0515 in the morning, been up since 0300.  My kitchen window faces a beautiful gated community with homes starting at half a million dollars and going up from there.

Know what I noticed while reading this article and sitting by my kitchen window?  Starting at 0445 there is a constant stream of headlights coming out of that community while my middle America subdivision still sleeps.  I am not implying middle America is lazy....but just from my little unscientific observation, there seems to be a direct link between wealth and work.

Could people in my subdivision get up and out by 0500?  Maybe work two jobs even.  Sure.  Why don't they?  Because they don't want too.

I think people who "hate" on the rich are just jealous. 

 

on Sep 26, 2007
Heh, I'm not jealous. I don't want $$. I want time.
on Sep 26, 2007
One thing is readily apparent in that exchange.  None of those people will ever succeed or be successful.  They have no clue on what it means or how to get there.
on Sep 26, 2007
One thing is readily apparent in that exchange. None of those people will ever succeed or be successful. They have no clue on what it means or how to get there.


Nope, because they are waiting for success to be handed to them, like they think it was handed to "the rich".
on Sep 26, 2007
Just think, if the government took the wealth of the wealthy, they would have enough to fight another war! And rebuild another country! And that's probably what they would do. Why do you want to give more to a government you think isn't doing a good job?
on Sep 26, 2007
One thing is readily apparent in that exchange. None of those people will ever succeed or be successful. They have no clue on what it means or how to get there.


i know how to get there i just don't want to
on Sep 26, 2007
They think they could be rich if there were no rich people. Well, they're right. If everyone had the same amount of money, everyone would be the richest person on earth. I do think, however, that the people who can build wealth would do so, again. And the others would then start complaining about how it wasn't fair that the rich were rich. Well, if you could do what they can do, you'd be rich too.

I like to think I'd be middle class.
on Sep 26, 2007
Without demand from spending there is no wealth creation. The lower the income the more of that income is spent and thus creates more demand and profits. The idea that cutting taxes to the wealthy will increase investment is true only if there is the demand to buy what that new investment produces. In addition, today much of that new investment has taken place in other countries which has not helped American workers earn the added wages with which they can buy more goods and services.

The supply side economics that was tried in 1981 resulted in a $3 Trillion Dollar increase in the debt and added to the interest American tax payers must pay on that increased Debt. We made the same error in 2001 when we did the same thing as in 1981 and it produced an increase of $4 Trillion in the debt and added even more interest.

We need to balance the Budget and pay down the over $9 Trillion of debt to REDUCE the interest the taxpayers must pay. To do that will require three actions:

Reduce non essential spending


Increase enforcement and increase tax collections.

Restore the tax rates on the top 10% to add to the tax revenue.

We should keep the lower tax rates for Middle income taxpayers so they continue to spend. The wealthy will not cut their spending by the return to the tax rates prior to Bush.

The reason it is so important to reduce the interest is that with the retirement of the Boomers, we will need the money we currently pay in interest, 40% of which is paid to foreign debt holders, to keep the promises we have made for Social Security and Medicare. What we are faced with is the need to add funding to Social Security and Medicare as more of the Boomers retire while at the same time we are faced with the increases interest caused by the Staggering debt. If we must pay both the increased interest and fund the shortfall in Social Security and Medicare the tax increases that will be needed will be punishing.


If we had kept the debt at the 1981 levels, we would have $400 Billion EVERY YEAR to deal with the needs of Social Security and Medicare.

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