Explaining Why Low Tax Rates are Correlated with Slower Economic Growth, Once Again
by Mike Kimel
Explaining Why Low Tax Rates are Correlated with Slower Economic Growth, Once Again
One of the regular mysteries facing economists is why the US economy fails to display evidence of a relationship that everyone seems to accept implicitly, namely that lower taxes lead to (or even are correlated with) faster economic growth. Sure, the argument is sometimes made by academics using rather heroic assumptions. The paper everyone seems to cite these days uses the assumptions made by politicians before a change in the tax rate as the “effect” that actually occurred after the change in the tax rate. Non-academics rely on other heroic assumptions. My favorite is attributing the rapid growth during the three years of the Kennedy administration to a cut in tax rates that occurred the year after he died. (Actually, even Alan Greenspan made this one well before he made the transition from Maestro to goat.)
I’ve taken a crack at explaining that puzzle, most recently here:
people will want to minimize their tax burden at any given time subject provided it doesn’t decrease their lifetime consumption of stuff plus holdings of wealth. Put another way – all else being equal, peoples’ incentive to avoid/evade taxes is higher when tax rates are higher, and that incentive decreases when tax rates go down. Additionally, most people’s behavior, frankly, is not affected by “normal” changes to tax rates; raise or lower the tax rates of someone getting a W-2 and they can’t exactly change the amount of work they do as a result. However, there are some people, most of whom have high actual or potential incomes and/or a relatively large amount of wealth, for whom things are different. For these people, some not insignificant amount of their income in any year comes from “investments” or from the sort of activities for which paychecks can be dialed up or down relatively easily. (I assume none of this is controversial.)
Now, consider the plight of a person who makes a not insignificant amount of their income in any year comes from “investments” or from the sort of activities for which paychecks can be dialed up or down relatively easily, and who wants to reduce their tax burden this year in a way that won’t reduce their total more or less smoothed lifetime consumption of stuff and holdings of wealth. How do they do that? Well, a good accountant can come up with a myriad of ways, but in the end, there’s really one method that reigns supreme, and that is reinvesting the proceeds of one’s income-generating activities back into those income-generating activities. (i.e., reinvest in the business.) But ceteris paribus, reinvesting in the business… generates more income in the future, which is to say, it leads to faster economic growth. To restate, higher tax rates increase in the incentives to reduce one’s taxable income by investing more in future growth.
Restating again: when the tax rate is 75%, a business owner has a strong incentive to reinvest all his/her profits in the business rather than take those profits out and consume them. This is because reinvesting in the business means the profits aren’t pulled out and thus aren’t recognized as income by the IRS. Reinvesting in the business also increases the business’ chances to do well in future years, which generates growth for the economy. On the other hand, when the tax rate is 15%, there is more of an incentive to take out profits and engage in consumption of the type that does not generate much growth.
David Glasner has another (albeit complementary) suggestion:
The connection it seems to me is that doing the kind of research necessary to come up with information that traders can put to profitable use requires very high cognitive and analytical skills, skills associated with success in mathematics, engineering, applied and pure scientific research. In addition, I am also positing that, at equal levels of remuneration, most students would choose a career in one of the latter fields over a career in finance. Indeed, I would suggest that most students about to embark on a career would choose a career in the sciences, technology, or engineering over a career in finance even if it meant a sacrifice in income.
If for someone with the mental abilities necessary to pursue a successful career in science or technology, requires what are called compensating differences in remuneration, then the higher the marginal tax rate, the greater the compensating difference in pre-tax income necessary to induce prospective job candidates to choose a career in finance. So reductions in marginal tax rates in the 1980s enabled the financial sector to bid away talented young people from other occupations and sectors who would otherwise have pursued careers in science and technology. The infusion of brain power helped the financial sector improve the profitability of its trading operations, profits that came at the expense of less sophisticated financial firms and unprofessional traders, encouraging a further proliferation of products to trade and of strategies for trading them.
Comments?
I suppose the obvious objection is why invest back in the business if you’re never going to want to help yourself to the returns to that investment because it’d be highly taxed – yours would be a hard argument to make in an intertemporal optimizing sort of model, for sure. But I suppose you could appeal to an argument (something like) people just like to build stuff, so when not tempted by the ability to withdraw cash from the business, owners and managers will turn to investment just because it’s a more rewarding activity for other (non-monetary) reasons.
[n.b. what’s wrong with the argument that low-taxes are associated with low growth because they are also associated with low investment in public infrastructure and other government funded goodies? I guess the existance of debt-funded govt expenditure might be what’s wrong with that argument]
Higher pay for nerds!
Luis Enrique,
You raise good points. Let me address them one by one.
1. Even when the top rate was at 90% plus during WW2, one presumes the people who were affected by it still spent money. But while 1941, 1942, and 1943 are the three years with the fastest real economic growth in the US since data has been kept (see: http://www.bea.gov/national/xls/gdpchg.xls) and 1944 was no slouch either, it wasn’t an era of conspicuous consumption.
Let’s simplify greatly, and think of the decision of the business owner as this… I can remove either X% or Y% of my profit each year for consumption. (Call those options 1 and 2 respectively) If I remove X% a year, my business will grow at a% a year. If I remove Y% a year, my business will grow at b% a year.
If X% > Y%, and a% < b%, you can easily end up with a situation where after some years, even taking the reinvesting route, you find your net lifetime consumption far option 2 far exceeds your net lifetime consumption for option 1, even though it entails taking out a smaller percentage of yearly income for consumption. I would go further... I'd say that scenario increases in likelihood if eveyrone else is behaving the same way, as that will cause the whole economy to grow more quickly. (Of course, there are limites... at some point tax rates get too high, but we're nowhere close to needing to worry about that right now.) I would also state this… a big part of wealth is having securit for oneselff and one’s family. And that financial security doesn’t increase with consumption. 2. the appeal to building stuff… I imagine most people get bored if they have nothing to do. Even Paris Hilton needs some reason to get out of bed in the morning, I imagine. And I imagine it isn’t money that’s motivating her. 3. investment in public infrastructure…. nothing wrong with that argument, but as you say, there is deficit spending. Also, my observation doesn’t rely on gov’t being efficient spending money. It relies only on people’s own direct and easy to observe self-interest. It is incontrovertible that nobody wants to pay taxes and people do what they what they can to minimize the income they declear to the IRS as a result. That people reinvest their gains to avoid declaring them as taxable income is also incontrovertible.
To follow-up further…. consider the peridos where we’ve had conspicuous consumption in the US in the last 100 years. Make it the stereotypical situation in which a group of stockbrokers order a meal at a grlamorous restaurant, ordering expensive drinks, such that the bill comes to a substantial percentage of the median income of the average American. Throw in someone lighting their cigar with $50 bill.
Think of that stereotype, and when it is likely to apply…. the 1920s, the 1980s, and, well, 2004-2008 or so. What do those periods have in common? Three things. The first is low tax rates. The second is that economic growth was lukewarm. (The best case of the three were the 1980s… two good years bordered by lukewarm and crummy years for the entire decade. The 1920s was an era where not a single expansion lasted as much as 30 months, and the Bush years were just mediocre.) The third, of course, is that all three ended badly. (Again, the Reagan years ended the least badly, but there’s a reason partisans credit Reagan with growth during the Clinton years while pretending the GHW Bush era never happened.)
I don’t want to speak for him, but I think Glasner’s point is different. I think he feels we’d have a lot more nerds if only the tax rate encouraged people to nerds rather than financiers.
“Restating again: when the tax rate is 75%, a business owner has a strong incentive to reinvest all his/her profits in the business rather than take those profits out and consume them. This is because reinvesting in the business means the profits aren’t pulled out and thus aren’t recognized as income by the IRS.”
That’s sure a strange tax system you are modelling there. For example, in a corporation, all profits are taxed, whether they are paid as dividends or reinvested into the business.
Higher tax rates assure that the means to make ever greater income is to put the money to work. The opposite is why put the money to work when I can have equivalent via lower taxes.
I think the other confounding issue regarding higher or lower tax rates is that at the time we were cutting tax rates we moved the economy from earning due to labor input (physical or cognitive) to earning money from money. This is true even in the teen’s and 20’s of the last century. Mass consumer credit first appeared in the 20’s. That is credit to by something other than real estate. Say a refrigirator or washing machine.
Tim
I hope you are not making a living as a tax adviser. Or maybe you are, but have never run a real business.
Tim Worstall,
Perhaps I’m using the wrong terms. Let me try it this way. My wife has a few rental properties. After all expenses are paid (e.g., mortgage, insurance, property taxes, repairs, etc.) she has X dollars left over. Call that what you want, I call it profit.
Now, she has a decision to make – how much of X to reinvest. If she uses X to buy another property or spruce up the existing properties or whatnot, for income tax purposes it is not considered profit. It is, instead, another expense. Income taxes paid = zero.
On the other hand, if she deides were in desperate need for a vacation and pulls the profits out instead of reinvesting in the properties, the IRS says: “Hey, she made an income of X.” Income taxes on X are paid at our marginal rate.
The latter scenario leads to lower future incomes. The latter scenario is also more likely when marginal tax rates are low for reasons that I believe are self-evident. (Are you more likely to try to postpone taxes into the distant future, all else being equal, if the current marginal tax rate is 15% or if the current marginal tax rate is 75%?)
Option 1. Take
Tim Worstall,
Perhaps I’m using the wrong terms. Let me try it this way. My wife has a few rental properties. After all expenses are paid (e.g., mortgage, insurance, property taxes, repairs, etc.) she has X dollars left over. Call that what you want, I call it profit.
Now, she has a decision to make – how much of X to reinvest. If she uses X to buy another property or spruce up the existing properties or whatnot, for income tax purposes it is not considered profit. It is, instead, another expense. Income taxes paid = zero.
On the other hand, if she deides were in desperate need for a vacation and pulls the profits out instead of reinvesting in the properties, the IRS says: “Hey, she made an income of X.” Income taxes on X are paid at our marginal rate.
The latter scenario leads to lower future incomes. The latter scenario is also more likely when marginal tax rates are low for reasons that I believe are self-evident. (Are you more likely to try to postpone taxes into the distant future, all else being equal, if the current marginal tax rate is 15% or if the current marginal tax rate is 75%?)
Let me add one more comment… perhaps I wasn’t entirely clear… there are two kinds of profit… there is profit of the business, and there is profit of the business as far as the IRS is concerned. If the business makes money, and it gets used to expand the business, the IRS doesn’t view you as having made any income.
A lot of things are different depending on whether you are looking from the IRS’ perspective. For instance, if f you have two hundred million bucks in municipal bonds paying 5% a year and no other assets and don’t do any work, you have income of $10 million a year. As far as the IRS is concerned, however, you have no income whatsoever.
Mike
I assume your data is correct. And I have no real problem with your argument. But I have a couple of quibbles.
First, it doesn’t matter that Kennedy was dead by the time “his” tax cuts came into effect. Now I suppose you know that, so you must mean something else when you make the point. But I suspect a lot of people think you are saying something wrong-headed here.
Second, have you considered that “low taxes” are correlated with governments that do not spend on infrastructure, or welfare, and may also encourage tight money policies?
As far as I can tell from the outside, economics education changes with the wind and no one now remembers what was obviously true in the seventies and eighties, for example, when Galbraith, and Greider, among others, wrote about this stuff and thought they understood the causes of “growth,” and that seemed to have something to do with easier money and increased spending.. including Federal. Taxes were considered to work against the increased Federal spending effect, but not critically so.
So, I’ll be glad to have you reinvesting in your business to avoid taxes. Me, I reinvest in order to build up to a level where it will support my kids. But in the meanwhile I am glad to take deductions for the expenses i incur reinvesting in my business, contrary to the advice of Worstall and company, tax advisers.
I don’t borrow money, but I am told that people do, and the big determiner of whether people borrow a lot of money for business expansion (growth) is first the prospect of business (customers have money) and second, the interest rate with respect to expected inflation or expected profits.
Oh, and leave us not fool ourselves. People don’t drop careers in Physics because careers in Economics pay better. If they drop the one for the other at all, it is because Physics is hard, while in Economics it never matters if you are right or wrong. And if you can repeat the party line with a straight face, you are golden.
oh come on – obv if you increase your costs (by upping investment) you reduce your profits in the same year.
coberly,
“First, it doesn’t matter that Kennedy was dead by the time “his” tax cuts came into effect. Now I suppose you know that, so you must mean something else when you make the point. “
My point is that people who make that argument typically obfuscate one of the following two details:
1. Rapid real economic growth got started in 1961
2. The “Kennedy tax cuts” occurred in 1964.
I simply cannot see a way to square any model that involves tax cuts boosting growth rates three years before the tax cuts occurred.
“I don’t borrow money, but I am told that people do, and the big determiner of whether people borrow a lot of money for business expansion (growth) is first the prospect of business (customers have money) and second, the interest rate with respect to expected inflation or expected profits.”
Agreed. However, that would indicate, at best, no correlation between tax rates and economic growth. I think a guy like Hubbard could live with that, and simply attribute the lack of confirmation for what he is seeing to “too much noise.” But when Romer and Romer have to use what politicians expect the results to be as the actual results of changes in the tax codes, then it is clear we’ve moved beyond “no correlation” to a “its seems pretty obvious that growth rates tend to suck when tax rates are low and that most crtainly will not do.”
“People don’t drop careers in Physics because careers in Economics pay better. “
Yes and no. There are an awful lot of people with Ph.D.s in physics on Wall Street these days.
mike
having a ph.d. is not evidence of actual competence to do physics. but yes, i suppose, a second rate physicists might find more “job satisfaction” in being an economist.
two… i understand your explanation about Kennedy. I think you should put the argument that way in the first place.
three… as for correlation between tax rates and economic growth, see question about correlation between tax rates and money policies. i don’t claim to know the answer. and while your explanation may turn out to be “the” explanation, i remain more inclined it has something to do with fiscal policies that put money in the hands of people who will spend it, as opposed to fiscal and money policies that keep money in the hands of people who already have money.
“Restating again: when the tax rate is 75%, a business owner has a strong incentive to reinvest all his/her profits in the business rather than take those profits out and consume them. This is because reinvesting in the business means the profits aren’t pulled out and thus aren’t recognized as income by the IRS.”
Speaking as a CPA and sometimes tax professor: HUH?
STR,
See my response to Tim Worstall above. As we’ve discussed before, you’re assuming that profits are IRS profits. As I’ve pointed out before, Revenues less Costs are profits. But if you take that sum and buy stuff for the business, the IRS considers that as an increase in the cost basis. From their perspective, you made no money, and pay no taxes. On the other hand, if you don’t buy stuff for the business, but take the money out to buy a yacht or whatever, you pay taxes on Revenues less Costs.
I would hypothesize an alternative explanation. We are talking about highest bracket marginal tax rates. To be making a lot of money, you have to have a combination of one of the following: 1) Genuine innovation 2) very high leverage and a successful “bet” 3) fraud 4) monopoly. #3 and #4 should be disencouraged as they obviously decrease growth. I would argue #2 as well, although some might argue there’s no net gain or a small net gain. #1 is the only one that matters, but true innovation will either be patented protected and have a short duration or the profits competed away. High tax rates take away the incentive for #2, #3 and #4 and don’t really effect #1 as it shouldn’t exist for long without #4 and nobody changes there behavior based on the tax rate of the last dollar in the event they are a smashing success.
Luis, in case you haven’t noticed business owners get a lot of perks out of their businesses without taking it as income. A simple example is how many nice cars businesses own that are used by the owners (and the business takes care of the insurance, the gas, etcl)
The A-1 example of this was Malcolm Forbes and his son Steve, which is why they really really like the idea of a simple tax with no deductions, they don’t need them, they have expenses.
You have a smart wife, she organizes a business trip to Hawaii to look at purchasing rental properties and takes you along as her secretary.
Actually there are no jobs in physics and the quants need people who can add. Accounting firms are well known for hiring chemistry, math and physics BAs
Chad,
As noted in the post, I suspect there is more than one reason. I like mine, as I can see it apply in my wife’s decisions (see upthread in the response to Tim Worstall), and we are nowhere close to the top marginal bracket. In fact, I’m looking for a full time job right now.
That said, I think there is something to David Glasner’s explanation, and I like yours as well as it also makes sense given the available data. I would also note that (as per Luis Enrique’s comment upthread) one also has to take into account paying for government – at least up until a certain point, government spending does improve the economy. (Leave out the police, or the FAA, or even the CDC, and the costs to the private sector will be enormous.)
I know of a couple english majors that were hired too.
It hasn’t escaped my attention that the local Chamber of Commerce often organizes trips to exotic locations. I have to imagine that those aren’t necesarilly the placs where there are the best business opportunities. This year they’re going to Cuba – for the most part you can’t do business with Cuba. I’d love to take that trip if I thought I’d have the time.
Hi, Mike.
You hit the nail on the head with this post. I first saw this explanation several years ago by Larry Beinhart, in “Why the economy grows like crazy amid high taxes”, and it seems to me that the historical record supports this idea, and for the reasons you stated.
I started a business 25 years ago, and while I like schools and roads and most government regulations (pure food, don’t shoot your neighbor, etc.), I hate paying taxes. I found that government rules allow the investment of “profits” (really, unspent income) back into the business, and when this happens, they are not taxed. The result has been that the business has grown many times faster than my stock market investments, and it is clear to me that high tax rates are the real “job creators”. In fact, the higher the tax rate, the better, because people will have more incentive to direct income into investment that would otherwise have gone into consumption.
I should add that high tax rates should only apply to people who have more income than they need for basic support. Since the actual dollar amount of that level is open to debate, it is best to have rates that rise progressivley with income, so people can gradually figure out how to invest.
Wade you put your finger on what some people seem to misunderstand about Mike’s argument, which makes much sense to me. What Mike calls “investing profits” is different from IRS definitions. It’s what business owners understand: they can spend receipts beyond what is needed to maintain the business, to grow or improve the business. A high marginal income tax rate discourages the alternative, which is to pass those receipts from the business to the owners so they can consume more/better “stuff” and invest elsewhere (including in real estate, works of art, foreign enterprises, whatever).
alk it up to the amazing rhetorical power of free money.
I find arguments such as these irritating. The most important thing that is always left out is that the income and profits earned are MINE! Who the hell are you to determine how much of MY earnings I get to keep?
If you want to fund your grandiose plans, use your own money or other monies voluntarily contributed by others rather than legislatively stolen from me against my will.
Hi, Bryan.
Certainly, no one likes to be coerced into giving money to someone else, even if (and maybe, especially if) that someone else is the government. I certainly don’t.
However, consider the alternative. Let’s say we all stop paying taxes and kill the government. I hope you’re a good shot, because the country will descend into that state of affairs called Somalia. Humans are easily the most dangerous creatures the planet has ever seen, both to animals and to othr humans. Politics and government are a solution to this problem. They are not the problem. It is esy to forget that the law of the Old Testament, “An eye for an eye”, was considered an improvement over tribal vendettas which killed the offender’s entire family. The New Testament improved morality by introducing the idea that any retaliation whatsoever diminishes the human family, and we’re still working on implementing that, but in practical terms, it is hard to do. So governments can help by monopolizing violence, and democracies are best because they make lawmakers beholden to the greatest number of people who, usually, can be counted on to behave responsibly.
But more to the point, I have a hard time following your argument that the money you earned is entirely yours, and that you owe nothing to anyone. Taxes bought the roads you drive to work on, taxes paid to educate your fellow workers so they can understand the value of your work, taxes pay for police so you can keep more of your money than you would otherwise.
People who don’t pay taxes are freeloading off the rest of society, and I think you agree that that’s wrong. I minimize my taxes, but I happily pay what I owe. I’ve been to Argentina when people were disappearing, to South Africa during Apartheid, to China where there is no law, and I’m happy to pay the taxes I owe if it keeps us from those conditions.
The US government has given its citizens a wonderful opportunity to invest in businesses (even their own) as they see fit, recognizing that millions of investors will probably do better in small projects (not roads, the internet or general education, though) than government-directed investments could do, and I take advantage of those laws. I think it’s a great program and should be extended to make America stronger. So, I say: For a Stronger America, (and eventually, higher pay for everyone) Let’s Have Higher Taxes Rates for the Rich!
We could use the resulting investment.
Bryan,
Consider again my wife’s rental properties. I can consider a few scenarios that would affect their worth:
1. someone walks in off the street and expels her tenants at gunpoint, and then moves himself in. What prevents that is the police and the court system.
2. a rampant epidemic wipes out part of the local population. Fortunately, we have the CDC to look into such matters.
3. Bloodthirsty Canadian hordes descend en masse from their frozen lair and lay waste to our carefully constructed infrastructure. Fortunately, we have a military which keeps the Northern aggressors at bay.
4. The above-mentioned carefully constructed and maintained infrastructure falls apart, making it hard for anyone who lives in the properties to make it to work or shop, causing everyone to move. Fortunately, we have a government that cares about infrastructure.
I can go on, but perhaps you understand why, as much as it pains my wife to pay taxes, she is willing to pay what she owes each year. She does, however, seek to minimize that amount to some extent by reinvesting in her business… but that causes growth, benefiting us, and not incientally, leading her to pay more taxes in the long run. Now perhaps you live in a world where the legal system, the military, disease prevention, and infrastructure are either un-necessary or are generated naturally out of thin air. But to my wife, what she pays in taxes are a bargain relative to the costs of providing those necessary services herself.
Your reasoning is flawed. You assume that if the government doesn’t do it, then it won’t get done.
As is the case with the previous poster, your reasoning is flawed. You assume that if the government doesn’t do it, then it won’t be done at all. Maybe you are unfamiliar with spontaneous order.
Congratulations on your travels. I’ve been a few places myself – Cuba, Venezuela, Bolivia, Peru, Argentina, Chile, Panama, to name a few, but it never occurred to me throw out that info in order to support a post hoc ergo propter hoc fallacy.
Have you ever heard of Bastiat’s The Law? It’s only about 80 or so pages, and it’s a free download on the internet. If you read it, you might actually liberate your mind and critical thinking skills from a lot of fallacious leftist drivel masquerading as “reason.”
Bryan,
In some cases, yes, in some cases no.
I can believe that someone will provide some roads and other infrastructure if there is no government in place. I can believe in private police and fire service. What I cannot believe is that someone will be out there doing something to avoid the next Influenza of 1918. The risks of such a thing are small in any given year, but the costs when these things happen are huge but its very, very hard to make money from preventing such an outbreak.
Here’s another example. What prevents someone from building a poorly shielded, first generation nuclear power plant five or ten miles down the road from my wife’s properties? I can guarantee that if someone does build such a plant (and I bet one can make the numbers work since much of the risk is simply being exported onto third parties), the minute something goes wrong at that plant the value ofbu my wife’s entire business, not to mention the business of everyone else in town, is worth zero.
Again, logical fallacies. Just because you don’t believe or can’t imagine something doesn’t mean that it isn’t possible. But it gets even better, you are willing to limit MY liberty and MY personal freedoms because of your lack of belief or imagination. Oh lucky me! lol
Of course, even if somebody does propose a solution, I’m sure you’ll be more than happy to subjectively analyze the solution in order to determine whether or not it should be “allowed.” heh
Bryan
i am not as nice as Mike. You are an idiot (literally, a greek word for “a man alone”) if you think your money is “MINE!”. You live in and benefit from a very complex economy that only works because of government and taxes. You have the same opportunity the rest of us have to determine how much taxes and where it is spent. But just thinking “MINE!” is stupid.
“You live in and benefit from a very complex economy that only works because of government and taxes.”
You, sir, are an economic illiterate. Individuals entering into voluntary, mutually beneficial relationships and transactions is a natural expression of spontaneous order, while government is an external construct that uses force to coerce a population to prescribe to the whims of those in control.
Each and every individual has a right to their life, liberty, and property (the results of one’s time and labor applied to property included). If I have a piece of land, or an island of my own where I am able to construct my own housing, raise my own food, and take care of myself and my family without your meddling, who are you to come and take by force from me that which is not yours?
“You have the same opportunity the rest of us have to determine how much taxes and where it is spent.”
Really? Sure, I have the same amount of say in the decisions made regarding my own property, income, and opportunities as do politicians, unelected bureaucrats, lobbyists, and various other crony capitalists who regulate and legislate the market to their advantage. You believe this, and have the nerve to call me an idiot? LOL
It is because of ignorant people like you that the US is in the shape it’s in. Do yourself a favor (and me too) and pick up an introductory economics book and read it, so if you decide to comment on something in the future, you won’t look like such an idiot.
Tis better to be thought a fool than to open one’s mouth and remove all doubt.
If you read it, you might actually liberate your mind and critical thinking skills from a lot of fallacious leftist drivel masquerading as “reason.”
Wow. I almost hesitate to enter a debate with an intellect such as yours, especially with the spector of ad hominem lurking so threateningly over my right shoulder.
But, what the hell, I assume that you assume that-
1) if the government doesn’t do it, then it will be done.
2) private enterprise can do it better and cheaper than government
3) therefore society will be better off.
There are probably some functions for which these assumptions are correct. Clearly there are some for which it is not – the military, and most of infrastructure, frex. I’m also not willing to go as far as Mike and say that private police and fire protection might be OK. It’s pretty easy to imagine a slum lord cutting costs by not buying fire protection, leading to a lot of carnage when the tenement burns down. I’ll also posit that, frex, privately owned prison systems intoduce a sub-optimal distortion on the legal system. The latter, come to think of it, it becoming increasingly – well, if not exactly privately owned, then certainly privatey influenced.
I also assume You put a lot of faith in spontaneous order. Sure – look at evolution. That’s only takes a few billion years. In a more specifically human societal context spontaneous order frequently takes the form of tribalism. You can see that in current artificially-bordered countries like Afghanistan, Pakistan, and Iraq. War lords rise up to fill the power vacuum left by the absence for government. I don’t think the rule of law is especially robust in those places.
Consider Europe, post the fall of the Roman Empire, and the rise of feudalism – just tribes with a layered hierarchy. This period of history is known informally as “the thousand years without a bath.” See how well your entrepreneurial spirit will flourish in that kind of an environment.
The great thrust of human history has been the imposition of the will of a small privileged elite on the vast majority of the population. A government can either aid and abet that process, or do something to try to attenuate it.
What we got with the latter was the New Deal and the post WW II era we think of as the golden age. High taxation and high regulation were integral to that success. Since Reagan, much of this has been undone. The result is the transfer of wealth and power from we-the-people to a small and uber-weathy elite.
I have some ideas about where this is heading. I guess that’s how my leftist drivel masquerads as “reason.”
Cheers!
JzB
Bryan
first, get that island of your own.
and get someone to help you read the hard parts in that econ book.
Jazz,
Thanks for the reply. I admit that sometimes my replies can be sarcastic, but my libertarian leanings are not something that I am imposing on another. Do you not find liberty and freedom a bit difficult to impose upon others? Unfortunately, too many people these days are completely ignorant of Bastiat’s what is seen and what is unseen, but they are happy to place restrictions on my life and liberty without a second thought. While you might think that my response to those who support such policies out of ignorance rather than motive should be a bit more tempered, I tend to be a more curt and short with them because their ignorance is a stumbling block over which I can rarely overcome. As MLK, Jr once said,
“Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.”
Back to your assumptions about me:
1) if the government doesn’t do it, then it will be done. [If it doesn’t get done absent government intervention, why is there an assumption that SHOULD be done or is WANTED?
2) private enterprise can do it better and cheaper than government [I believe free markets are more EFFICIENT than government]
3) therefore society will be better off. [When one focuses on the collective (society) the rights of the individuals are inevitably trampled upon. Would you support forced euthenasia if it could be proven that society would be better off?]
Regarding spontaneous order, I am referring to it in the Hayekian sense. I hope that you have some idea as to what I am talking about here. This forum is not the place to go into such subjects in detail, and if you aren’t familiar with it, then it would be difficult to take the discussion much futher.
Rather than follow the myriad of rabbit trails you mentioned in your post, I prefer to focus on the crux of the issue:
Who are you, or anybody else for that matter, that you can morally place a claim upon my life, liberty, and property without my consent?
I eagerly await your answer.
Cheers!
Jazz,
Thanks for the reply. I admit that sometimes my replies can be sarcastic, but my libertarian leanings are not something that I am imposing on another. Do you not find liberty and freedom a bit difficult to impose upon others? Unfortunately, too many people these days are completely ignorant of Bastiat’s what is seen and what is unseen, but they are happy to place restrictions on my life and liberty without a second thought. While you might think that my response to those who support such policies out of ignorance rather than motive should be a bit more tempered, I tend to be a bit more curt and short with them because their ignorance is a stumbling block over which I can rarely overcome. As MLK, Jr once said,
“Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.”
Back to your assumptions about me:
1) if the government doesn’t do it, then it will be done. [If it doesn’t get done absent government intervention, why is there an assumption that it SHOULD be done or is WANTED?]
2) private enterprise can do it better and cheaper than government [I believe free markets are more EFFICIENT than government]
3) therefore society will be better off. [When one focuses on the collective (society) the rights of the individuals are inevitably trampled upon. Would you support forced euthenasia if it could be proven that society would be better off?]
Regarding spontaneous order, I am referring to it in the Hayekian sense. I hope that you have some idea as to what I am talking about here. This forum is not the place to go into such subjects in detail, and if you aren’t familiar with it, then it would be difficult to take the discussion much futher.
Rather than follow the myriad of rabbit trails you mentioned in your post, I prefer to focus on the crux of the issue:
Who are you, or anybody else for that matter, that you can morally place a claim upon my life, liberty, and property without my consent?
I eagerly await your answer.
Cheers!
LOL, thanks coberly. Your reply does not disappoint.
LOL, thanks coberly. Your reply does not disappoint!
Also, I already have my own place on an island. 😀
Cheers!
Bryan,
History provides literally an infinite number of examples of people choosing to cut corners in ways that can provide them with a significant amount of profit if things go well, but which will cost other people dearly if things go poorly. History also provides plenty of examples of people committing fraud, theft, etc. Yes, the existence of the government doesn’t eliminate all of thes e cases, but it does put a dent in them.
Think of it this way… what prevents some junior level programmer at your bank from writing a program that will make your funds disappear? Perhaps the person is honest, and all is well. But what if he is, by nature, dishonest. In that case, before he decides to abscond with your money, he weighs in the consequences. What you will do to him is not a consequence – you can’t do much to some nameless person you never heard of, particularly if he’s taken all your assets. The bank likewise has limited resources to chase him down. Realistically, the only deterrant is fear of spending time in jail.
Or, back to the nuclear power plant. You tell me because I cannot imagine the mechanism doesn’t mean it doesn’t exist. So describe the mechanism that would prevent someone setting up a nuclear power plant from cutting corners that increase the risks of a catastrophic meltdown from, say, 0.0001% to 5%. Assume that cutting corners increases profits 5 fold. Throw in one more assumption: in your libertarian paradise, there is no guarantee anyone even knows who owns the plant.
Now, please describe the mechanism that makes the plant safe.
Mike,
I’m not quite sure what your point is regarding the comments about history. Do you think that I don’t understand or agree that force is the only negative deterrent that protects the rights of individuals, communities, states, nations, etc…?
Government = Force. That is exactly why government doesn’t educate, feed, clothe, house… well. Force is a NEGATIVE deterrent. That’s why it is inefficient and wasteful to use it in a positive sense.
Rather than go down a rabbit trail with your nuclear power plant example, please, explain to me exactly
Who you are, or anybody else for that matter, that you can morally place a claim upon my life, liberty, and property without my consent?
If you can’t answer this question, then my answer to yours doesn’t matter because like all authoritarians, you will dismiss my objections to the contrary and do what you want anyway.
And please don’t give me the intellectually lazy and fallacious reason that the majority rules.
I eagerly await the answer to your source of moral authority over me.
Bryan
i really don’t want to hurt your feelings… in spite of your asking for it.
you are probably no more of a fool than most people, but you have been fooled by some very bad people. if they can fool enough of the people, just long enough, you will find out what real slavery is.
take that island… assume you own the whole thing. now, how are you going to live on it without interacting with neighbors, or defend it from pirates?
the thing to note is that once you make agreements with neighbors, that agreement is “government”. and if you ARE the government of your own special island, well to everybody else you are the government and they may not feel so good about doing everything your way. and that title that you think you have the land is only as good as your power to keep it.
you have so much to learn. and so little evidence that you will.
Bryan
you really are an offensive twit.
the “authority” to make the rules comes from where it as always come from: force. but there is a countervailing force… it’s called government. we agree to work together to defend ourselves from the force of a foreign army, from the force of criminals, and from the force of men of wealth who would harm us. we also need to work wisely to prevent that government from becoming a force that will be used to harm us.
your libertarianism ignores all this and imagines a fairy tale world where somehow force is replaced by free contract. it has never happened and never will.
shorter Bryan
“if i can’t think of it, it doesn’t exist.”
one more try Bryan
that guy coming down the road doesn’t give a damn about “morally”. he will rob and kill you and rape your daughters. unless you stop him… frankly, by force. it will be a lot easier for you to defend your self and your home if you agree to help defend your neighbors if they help defend you. that agreement is called government. and yes, it spreads from there. because the people defending you may want more out of the deal than the right to stand in employment lines in the hope of getting a subsistence wage job.
worse and worser, i have never heard of a government, or society, that would not kill you if you made yourself obnoxious enough to it. i am very sorry about that. but i have met too many of the kind of people who make it seem necessary. and back in the day when governments were smaller, or even invisible, someone like you would be considered a shirker and a parasite and asked to leave the tribe.. or, yes, killed outright.
coberly,
Let’s don’t be so coy shall we? What you are really referring to is protection money. In the world that you outline, I am going to be at the mercy of others unless I pay for protection. Now who shall I choose to pay? The Mafia? Somali Pirates? The beneficent US government that will only charge me what it really needs to provide adequate safeguards and no more? lol
As entertaining as it might be, I’m going to take a pass on a longer, more detailed, and funnier reply. Suffice it to say, that I reject your premise that what you have put forth are the only options.
While no system is perfect, The Articles of Confederation, and even the early US Constitution (while the enumerated federal powers were still strictly confined to their constitutional boundries) outlined and protected a climate of liberty and freedom that was the first of its kind in human history.
It is you who has much to learn because your views reveal a lack of basic understanding of the founding documents of our country, and as Benjamin Franklin said so presciently,
“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”
Do not be fooled, the power granted to and confiscated by the federal government over the last 200 years has so severely curtailed our liberty that we live under the illusion that we are free because we have freedom to choose. Unfortunately, most people never think beyond the bureacratically approved options, and wonder how free they really are if they are not free to choose “none of the above.”
LOL, now that’s a good little lefty statist. Yeah, you are so persuasive. I can’t wait to submit myself and my family to an authority in which people of your ideology are in control. Let’s take a stroll down history lane shall we? Mao, Stalin, Hitler, Pol Pot… hmmm, that’s at least 100 million dead. That should be a large enough sample size to make a self-evident point.
If you can’t figure out what that point is, ask around. Somebody should be able to help you.
By the way, you never bothered to answer the question that I posed earlier either.
Who are you to have the right to morally make a claim on my life, liberty, and property?
Like a typical lefty, you deflect and talk about a pending crisis, my imminent death and destruction if I don’t go along. Just like good ol David Axelrod, “Never let a good crisis go to waste.”
And people on the left wonder why there are a whole bunch of us who refuse to give up our 2nd amendment rights. A bunch of brainiacs you people are.
Bryan,
I don’t claim a source of moral authority over you. I do, however, claim one bit of authority – that you should not be allowed to engage in behavior that is deleterious too me or other people without the consent of the parties who your behavior will affect.
If you and I are neighbors, it isn’t enough to say: “my property rights allow me to do whatever I want on my property” and then go out and do things that have a reasonable probability of inflicting harm on me. I have no problems with you storing toxic waste on your property, provided there is a reasonable guarantee that none of that toxic waste will cross the borders of your property. And unfortunately, many people who insist on the sanctity of their own property rights seem unwilling to ensure that their behavior will not cause an effect on someone else’s property rights.
Producing loud music on your property is your right. Allowing that loud music to cross onto my property is a violation of my rights. If you insist on generating loud noise but refuse to engage in the steps that prevent that loud noise from crossing into someone else’s property, then you are the one insisting you have a moral right to mess with other people’s property.
LOL, now that’s a good little lefty statist. Yeah, you are so persuasive. I can’t wait to submit myself and my family to an authority in which people of your ideology are in control. Let’s take a stroll down history lane shall we? Mao, Stalin, Hitler, Pol Pot… hmmm, that’s at least 100 million dead. That should be a large enough sample size to make a self-evident point.
If you can’t figure out what that point is, ask around. Somebody should be able to help you.
By the way, you never bothered to answer the question that I posed earlier either.
Who are you to have the right to morally make a claim on my life, liberty, and property?
Like a typical lefty, you deflect and talk about a pending crisis, my imminent death and destruction if I don’t go along. Just like good ol Rahm Emmanuel, “Never let a good crisis go to waste.”
And people on the left wonder why there are a whole bunch of us who refuse to give up our 2nd amendment rights. A bunch of brainiacs you people are.
Who are you, or anybody else for that matter, that you can morally place a claim upon my life, liberty, and property without my consent?
Who are you to morally place a sole claim upon life liberty and property that is communial owned, produced and nutured?
Your concept of liberty breaks down at the point of entering into the contract that our Consitition is. You have liberty from me, as I have liberty from you but, as a citizen your liberty is from that which is governance not derived from We the People.
Insiting that our government structure and it’s resulting governance is something to consider as outside your’s and mine existance is an error.
The issue is not whether “spontaneous order” exists or will happen. The issue is how will that spontaneous order be harnessed.
That government not doing something means something will happen in it’s place does not mean we are not to attempt to move it toward a consensous derived better outcome. It is why our Constitution was written.
Your liberty stop at the point it effects mine not just at the point that mine effects yours.
Mike,
I understand completely. I absolutely agree that as an individual you have rights, especially MUCH STRONGER property rights (than exist as they do now) as well as penalties and damages owed for violation and/or destruction of your property. We have no quibble there. I’m quite sure that we could find quite a bit of furtile and productive ground in this area, but that is another discussion for another time.
Now back to your admission that you do not have any moral authority over my life, liberty, and property. In light of this admission, I hope you can begin to examine the current climate in the US and see how rife it is with tyrannical abuses and mandates which daily rob the people of their lives, liberty, and property.
Only once the proper boundries of government have been identified can the the power and scope of government be curtailed and reined back inside the confines of the constitution.
Unfortunately, these days few people are familiar with logic and philosophy, and fewer still are inclined to familiarize themselves with the premises of so many positions that impact our daily lives.
If you have not yet heard or read Bastiat’s The Law, I heartily commend the book to you. Even if you reject its contents outright, you will have a much better understanding of at least one of the more sound philosophical postitions that rejects central planning. Be warned though, it might not turn out to be the only thing from Bastiat that you ever read.
Cheers!
Mike,
I understand completely. I absolutely agree that as an individual you have rights, especially MUCH STRONGER property rights (than exist as they do now) as well as penalties and damages owed for violation and/or destruction of your property. We have no quibble there. I’m quite sure that we could find quite a bit of fertile and productive ground in this area, but that is another discussion for another time.
Now back to your admission that you do not have any moral authority over my life, liberty, and property. In light of this admission, I hope you can begin to examine the current climate in the US and see how rife it is with tyrannical abuses and mandates which daily rob the people of their lives, liberty, and property.
Only once the proper boundries of government have been identified can the the power and scope of government be curtailed and reined back inside the confines of the constitution.
Unfortunately, these days few people are familiar with logic and philosophy, and fewer still are inclined to familiarize themselves with the premises of so many positions that impact our daily lives.
If you have not yet heard or read Bastiat’s The Law, I heartily commend the book to you. Even if you reject its contents outright, you will have a much better understanding of at least one of the more sound philosophical postitions that rejects central planning. Be warned though, it might not turn out to be the only thing from Bastiat that you ever read.
Cheers!
Mike,
I understand completely. I absolutely agree that as an individual you have rights, especially MUCH STRONGER property rights (than exist as they do now) as well as penalties and damages owed for violation and/or destruction of your property. We have no quibble there. I’m quite sure that we could find quite a bit of fertile and productive ground in this area, but that is another discussion for another time.
Now back to your admission that you do not have any moral authority over my life, liberty, and property without my consent. In light of this admission, I hope you can begin to examine the current climate in the US and see how rife it is with tyrannical abuses and mandates which daily rob the people of their lives, liberty, and property.
Only once the proper boundries of government have been identified can the the power and scope of government be curtailed and reined back inside the confines of the constitution.
Unfortunately, these days few people are familiar with logic and philosophy, and fewer still are inclined to familiarize themselves with the premises of so many positions that impact our daily lives.
If you have not yet heard or read Bastiat’s The Law, I heartily commend the book to you. Even if you reject its contents outright, you will have a much better understanding of at least one of the more sound philosophical postitions that rejects central planning. Be warned though, it might not turn out to be the only thing from Bastiat that you ever read.
“Who are you to morally place a sole claim upon life liberty and property that is communial owned, produced and nutured?”
If it was originally communal in nature, I have none. If it was confiscated from an individual(s) then you are talking about stolen property, and that is immoral, if not specifically illegal due to a perversion of the law.
“Your concept of liberty breaks down at the point of entering into the contract that our Consitition is. You have liberty from me, as I have liberty from you but, as a citizen your liberty is from that which is governance not derived from We the People.”
This doesn’t make any sense to me. Please restate or clarify. I assume that you agree with the Declaration of Independence that we are all endowed by our Creator with the right to life, liberty and the pursuit of happiness.
“The issue is not whether “spontaneous order” exists or will happen. The issue is how will that spontaneous order be harnessed.”
Who are you to demand it be harnessed, and who are you to be the one who decides what to do with it after it is harnessed? Let me guess, for the good of the collective, err society. No thanks. Mind your own business and keep your hands off what is not yours.
I’m not quite sure what to make of your final comments. My guess from your grammar and sentence structure is that English is not your primary language. I’m not saying this to be snarky. Please clarify.
Bryan,
Its been a long time since I read any Bastiat so this comment is based on my somewhat feeble recollection. As I recall, he had a lot of good things to say about protectionism and subsidies, with a good commentary that predated the literature on the capture theory of regulation. I like the whole bit about keeping the gov’t from deciding what is moral and what isn’t. Frankly, there are lot of behaviors that I have no interest in engaging in, but which aren’t my business and therefore I have no idea why they’d be anyone else’s business (provided there are no externalities). All good stuff there.
But… based on my feeble recollection, here are my problems with Bastiat (and The Law in particular):
1. As I recall, there was some major papering over of externalities. That, incidentally, is a topic I have yet to see a libertarian even attempt to cover in a way that accounts for reality in any way. I am symnpathetic to the libertarian perspective in some ways, but the failure to tackle externalities is a fatal flaw of the libertarian movement as far as I’m concerned.
2. Bastiat was somewhat unrealistic in his discussion about socialism/communism etc. The whole bit about… well, the gov’t should stay out of this or that (education, health) seems to come down to either a) there are no poor people or b) the heck with poor people.
3. In fact, it shows a complete failure to understand that in any society, those with the resources are more free than those without. Its easy to talk about freedom, but freedom is a meaningless term to a child with no food in his belly.
Mike,
Have you really ever read The Law? None of the 3 points you mentioned is even remotely addressed in it. The subject is the same as the title – The Law.
Externalities? Libertarian attempt to paper over? That sure is out of left field. I apologize if I’m nitpicking, but why would you expect a POLITICAL Libertarian account of an ECONOMIC topic?
“Confiscated” How can the word “confiscate” be properly used at it relates to government activity in a democratic governance system such as our?
I did not “demand” harnessing of the spontaneous order. I said, clearly it is a matter of how that order will be harnessed. This option would include not harnessing anything. However, that people are “spontaneously” creating an order via their inherent personal character, that spontaneous action you are asking for is not so lacking in cognitive input and thus not so unharnessed. We have formed a governance system that is based on collective agreement. That alone means there is nothing “spontaneous” about the order you currently live in or think you could live in.
With that, the Declaration is not binding on We the People. It is a public presentation of what the thoughts were of the people who wrote, signed and were represented by such. The liberty referenced in the Declaration is liberty of self governance. The Constitution is the materialization of such liberty: self rule by We the People. It is not complete and on cumbered individual self rule.
The Constitution exists as a functioning document only because We the People agree to it. That is all. There is no actual force other than the People’s agreement. This is why the “nuclear option” during the days of Bush regarding the filibuster was so dangerous. The only reason we have a functioning Constitution is because there are 100 people in the Senate who agree to abide by the rules they created. The moment there is a break of that agreement, our governance system no longer has power and thus no longer functions and thus no longer exists.
If you choose not to agree to the Constitution, which with your use of words such as “confiscatory” I have to assume you are leaning as such, then that is fine. However, at that moment, you have denounced your citizenship to the USA as you no longer agree to the document and it’s bindings of your relationship to all other citizens which is the written description of the existence of the USA.
However, if this is to complicated for you, then: You are the government just as I am the government and we are the government together. When you speak of the government and it’s governance in terms of “confiscatory”, you are accusing yourself of confiscating liberty from yourself.
Mike,
Have you really ever read The Law? None of the 3 points you mentioned is even remotely addressed in it. The subject is the same as the title – The Law.
Externalities? Libertarian attempt to paper over? That sure is out of left field. I apologize if I’m nitpicking, but why would you expect a POLITICAL Libertarian account of an ECONOMIC idea?
Were you possibly thinking of Murray Rothbard? Here is a bit of Rothbard on “negative externalities:”
“One difficulty often raised against a free society of individual property rights is that it ignores the problem of “external diseconomies” or “external costs.” But cases of “external diseconomy” all turn out to be instances of failure of government—the enforcing agency—adequately to enforce individual property rights. The “blame,” therefore, rests not on the institution of private property, but on the failure of the government to enforce this property right against various subtle forms of invasion—the failure, e.g., to maintain a free society.”
Seems rather reasonable to me, and it definitely would account for how to handle the issues with noise and other property rights violations that you brought up in an earlier post.
Mr. Rothbard is referred to as “Mr. Libertarian” by many. Does his commentary and insight on externalities not count, or does it just not pass muster with you? Just curious.
Okay, this needn’t be so technical:
Each individual has the lawful right to life, liberty, and property, and as such has the lawful right to defend his life, liberty, and property. What is the manner of this lawful defense? Force.
Under our Constitution, the government derives its just powers from the consent of the governed. As such, our government is the collective substitution of each individual’s right to defend life, liberty, and property. Again, this is done via force; therefore, government = force.
Individuals cannot grant lawfully a power to the governement that they do not possess as individuals. I cannot as an individual go next door to my neighbor and with threat of force obtain money from my neighbor to give to a homeless person living in the street. If it is not lawful for me to do it, it is not lawful for the government to do it. That doesn’t mean that the government doesn’t do it. It does mean that the government that the government is operating beyond it’s powers granted via the consent of the governed.
I don’t know what you call an act which takes something from an individual under threat of force, but I call it CONFISCATION. THEFT is another good word for it.
Dress it up in all of the feel good emotionalism you want. Theft is theft. It’s just a lot easier to get away with it under the guise of the law.
Okay, this needn’t be so technical:
Each individual has the lawful right to life, liberty, and property, and as such has the lawful right to defend his life, liberty, and property. What is the manner of this lawful defense? Force.
Under our Constitution, the government derives its just powers from the consent of the governed. As such, our government is the collective substitution of each individual’s right to defend life, liberty, and property. Again, this is done via force; therefore, government = force.
Individuals cannot grant lawfully a power to the governement that they do not possess as individuals. I cannot as an individual go next door to my neighbor and with threat of force obtain money from my neighbor to give to a homeless person living in the street. If it is not lawful for me to do it, it is not lawful for the government to do it. That doesn’t mean that the government doesn’t do it. It does mean that the government is operating beyond it’s powers granted via the consent of the governed.
I don’t know what you call an act which takes something from an individual under threat of force, but I call it CONFISCATION. THEFT is another good word for it.
Dress it up in all of the feel good emotionalism you want. Theft is theft. It’s just a lot easier to get away with it under the guise of the law.
Okay, this needn’t be so technical:
Each individual has the lawful right to life, liberty, and property, and as such has the lawful right to defend his life, liberty, and property. What is the manner of this lawful defense? Force.
Under our Constitution, the government derives its just powers from the consent of the governed. As such, our government is the collective substitution of each individual’s right to defend life, liberty, and property. Again, this is done via force; therefore, government = force.
Individuals cannot grant lawfully a power to the governement that they do not possess as individuals. I cannot as an individual go next door to my neighbor and with threat of force obtain money from my neighbor to give to a homeless person living in the street. If it is not lawful for me to do it, it is not lawful for the government to do it. That doesn’t mean that the government doesn’t do it. It does mean that the government is operating beyond it’s powers granted via the consent of the governed.
I don’t know what you call an act which takes something from an individual under threat of force, but I call it CONFISCATION. THEFT is another good word for it.
Dress it up in all of the feel good emotionalism you want. Theft is theft. It’s just a lot easier to get away with it under the guise of the law.
“If a law is unjust, a man is not only right to disobey it, he is obligated to do so. “
Thomas Jefferson
Bryan until this posting I had thought you were rather consistent in rejecting the words of Declaration of Independence in favor of the “life, liberty and property” formulation, which seems to drive your positions. Jefferson and other founding fathers rejected that formulation, for good reasons. They also understood that happiness is more than personal pleasure or an individual attribute. I find these thinkers more persuasive than economists who glorify property ownership when addressing political and social philosophy.
Property ownership is established and maintained by the rules that we choose. We, the people. These rules are neither immutable nor handed down from above. If they aren’t working the way we want or expected, we can change them. We often tweak them and occasionally we make a mistake that isn’t obvious for a while–maybe even three or four decades, as Mike Kimel has shown.
PJR,
The main reason that I stuck with the “life, liberty, and property” over “life, liberty, and the pursuit of happiness” is because it makes it infinitely easier to follow a logical argument, rather than what some might consider a nebulous term like “pursuit of happiness.” How different is “pursuit of happiness” from “liberty?” If you are not permitted to pursue happiness in your life as you see fit, would it not be due to a limitation or restriction of your personal liberty?
You do realize that the reason “pursuit of happiness” was used in the wording rather than “property” was due to the slavery issue, don’t you? Absent slavery, I believe the wording would have been “life, liberty, and property.”
You seem to speak of “property” almost derogatorily, as if it’s arbitrary, and it’s assignment subjective. What of the fruits of one’s labor? I do not ascribe to a view that anybody other than myself has a right to the fruits of the application of my labor to my resources.
I don’t mean to open up another line of discourse regarding my use of “life, liberty and property” and hope this clarifies it. In no way do I reject the wording of the Declaration of Independence.
PJR,
The main reason that I stuck with the “life, liberty, and property” over “life, liberty, and the pursuit of happiness” is because it makes it significantly easier to follow a logical argument, rather than what some might consider a nebulous term like “pursuit of happiness.”
You do realize that the reason “pursuit of happiness” was used in the wording rather than “property” was partly due to the slavery issue, don’t you?
Here’s a link to a good article that contains an explanation of “pursuit of happiness” as well as the inherent inclusion of property rights in the language of “life, liberty, and the pursuit of happiness.”
http://www.lonang.com/curriculum/2/s21b.htm
I don’t mean to open up another line of discourse regarding my use of “life, liberty and property” and hope this clarifies it. In no way do I reject the wording of the Declaration of Independence.
good old Massa Tom.
as it happens, however, i agree with what he said. only two problems. one is that you will most likely go to jail, so it takes some courage. second is that there is a good chance you will be wrong about its being “unjust.”
nice thing about America, at least in principle, we can change an unjust law by something called elections. better than shooting each other.
you do a fine job of singing the freedom song. but you still haven’t told us how you are going to create this paradise on earth.
Individuals have all the power. Individually, certainly one can not grant a power to the government. Collectively power is granted. The collective granting of power of which it’s origin is the poeple is the liberty you experience via the Constitution. It is the opportunity to participate in a collective self governance.
As an individual you do not have the right to apply force upon another because that is an infringment upon everyone else’s Constitutionally constructed liberty of self governance. If you were to act to take money from your neighbor or to force another to take money from your neighbor to give to a homeless person, you would be acting within the model of governance where power, authority and will are derived from the one. You would be a king or dictator.
Thus as I stated: Your liberty stops at the point it effects mine not just at the point that mine effects yours.
Lastly, the threat of force is in the eye of the beholder in a system of governance such as ours. You disagreeing with what the majority as chosen to apply to all can not by definition of self governance be consider an action of force such that your liberty has been infringed upon. It was and is instead the promised experience of liberty that our Constitution defines.
If We the people choose to require people to pay money collectively to be given to the indigent population, then that is an expression of the liberty of self governance. That you do not like it, does not mean you have been “forced” to do it. It only means you have chosen to remain a citizen of the USA. There is no force preventing you to exercise your personal liberty and renounce your citizenship for citizenship in another area of the world where the governance system is of your liking. Also, there is no force that is preventing you from working to turn the USA and our system of governance into a version of your liking. That is you have the same equal access to the elective and political system.
This is the true liberty you have.
Well, no actually, the slavery issue was not the only reason. Many thinkers (like Ben Franklin) understood that property is a means to an end and that philosophers since Socrates emphasized the importance of happiness, which is a broader and more social concept than you seem to have in mind. They chose happiness, and rejected property, for the Declaration. (Note that the slavery issue didn’t stop them from using the words “all men” and “liberty” and didn’t stop both free and slave states from using the word “property.”)
I agree, this is no place to argue about happiness. I simply want to point out that the elevation of property to the highest value (with liberty and life) served by government is far from universally accepted. It’s even been rejected by some respectable people. Your arguments rely on this elevation but reasonable people may believe that the importance of property ownership can, indeed, be trumped.
From my previous post:
“You do realize that the reason “pursuit of happiness” was used in the wording rather than “property” was partly due to the slavery issue, don’t you?”
The following should help to clarify what appears to be to be a misunderstanding of property;
http://www.lonang.com/curriculum/2/s21b.htm
“You disagreeing with what the majority as chosen to apply to all can not by definition of self governance be consider an action of force such that your liberty has been infringed upon.”
You could not be any more wrong. The Constitution outlines a representative republican form of government, NOT a democracy. The majority or mob rule has no place. The powers granted to the federal government by We The People are purposefully limited and specifically enumerated.
“If We the people choose to require people to pay money collectively to be given to the indigent population, then that is an expression of the liberty of self governance. That you do not like it, does not mean you have been “forced” to do it.”
When the federal government’s actions are in excess of the powers granted to it via the consent of the governed in the Constitution, they becomes tyrannical. Just because enough people vote for it, does not make it Constitutional. It may be “lawful” in a perverse sense, but it is most certainly NOT Constitutional; and as such, taking money from me WITHOUT my consent is confiscation or theft. Make no mistake about it. The only reason the government can do this and get away with it is the by threat of force.
“You disagreeing with what the majority as chosen to apply to all can not by definition of self governance be consider an action of force such that your liberty has been infringed upon.”
You could not be any more wrong. The Constitution outlines a representative republican form of government, NOT a democracy. The majority or mob rule has no place. The powers granted to the federal government by We The People are purposefully limited and specifically enumerated.
“If We the people choose to require people to pay money collectively to be given to the indigent population, then that is an expression of the liberty of self governance. That you do not like it, does not mean you have been “forced” to do it.”
When the federal government’s actions are in excess of the powers granted to it via the consent of the governed in the Constitution, they becomes tyrannical. Just because enough people vote for it, does not make it Constitutional. It may be “lawful” in a perverse sense, but it is most certainly NOT Constitutional; and as such, taking money from me WITHOUT my consent is confiscation or theft. Make no mistake about it. The only reason the government can do this and get away with it is the threat of force.
“You disagreeing with what the majority as chosen to apply to all can not by definition of self governance be consider an action of force such that your liberty has been infringed upon.”
You could not be any more wrong. The Constitution outlines a representative republican form of government, NOT a democracy. The majority or mob rule has no place. The powers granted to the federal government by We The People are purposefully limited and specifically enumerated.
“If We the people choose to require people to pay money collectively to be given to the indigent population, then that is an expression of the liberty of self governance. That you do not like it, does not mean you have been “forced” to do it.”
When the federal government’s actions are in excess of the powers granted to it via the consent of the governed in the Constitution, they becomes tyrannical. Just because enough people vote for it, does not make it Constitutional. It may be “lawful” in a perverse sense, but it is most certainly NOT Constitutional; and as such, taking money from me WITHOUT my consent (as outlined in the Constitution) is confiscation or theft. Make no mistake about it. The only reason the government can do this and get away with it is the threat of force.
Bryan,
You got me curious and I looked up The Law. The complete pamphlet can be found here (http://bastiat.org/en/the_law.html) and (http://mises.org/books/thelaw.pdf).
Here’s what he says on education… which fits reasonably well with what I wrote above:
“But the law is not, in itself, a torch of learning which shines its light abroad. The law extends over a society where some persons have knowledge and others do not; where some citizens need to learn, and others can teach. In this matter of education, the law has only two alternatives: It can permit this transaction of teaching-and-learning to operate freely and without the use of force, or it can force human wills in this matter by taking from some of them enough to pay the teachers who are appointed by government to instruct others, without charge. But in this second case, the law commits legal plunder by violating liberty and property.”
Also… an example of what I meant by who is free and who isn’t, and Bastiat’s failure to really think through the implications of poverty to lack of liberty… go down to the section about “The Indirect Approach to Despotism” and read it. Now think about a company town and how it fits perfectly. If we follow what Bastiat suggested, we will end up with a bunch of company towns. Those who live there have no freedom.
I admit to not having Rothbard except in passing. But the quote you provide is precisely one that most libertarians would reject. Find me a group of libertarians who espouse, say, pollution control (complete with a realistic method for achieving it) based on the notion that when pollution is created on the property of X, it disperses and eventually makes its way onto the property of many other people. Without having that view, complete with a mechanism for achieving it, it seems to me that the Libertarian philosophy is self-contradicting.
Ah… a follow-up about the money and freedom thing. Think of a scandal that isn’t being reported much here in the US… he various incidences of e-mail hacking that were perpetrated by members of the Murdoch empire in Britain. (It’s a big deal if it has already affected Murdoch’s son.)
In a situation where the “liberty” is strong in the way that Bastiat defined it, who does something about a very powerful organization trampling on the legal rights of those who don’t have power? Not in theory, but in practice?
So, you declare yourself completely and totally sovereign within a constitution that starts with We the People?
We are not a pure republican from of government. You do not have liberty in the form of totally sovereignty.
But, if you believe yourself to be so sovereign, then we are back to We the people decideing to take back that share of your income that was not earned completely and totally, without the contribution of anyone else (remember you are sovereign). Certainly you are not claiming a right to money earned that is not of your own doing?
Mike
add to poor Mr Bastiat’s “analysis” the fact that most communities regard education as a positive good FOR THE COMMUNITY and “voluntarily” tax themselves to pay for it, because taxing is the most efficient way to provide the needed money.
What Bastiat and Bryan fail to understand is that taxes are a result of a voluntary agreement among people to pay for things they need… as a community… and they tax all members of the community regardless of that members particular agreement about each particular use of the money. There are always going to be freeloaders and ignoramuses who want the benefits of community without paying for them. lt the Libertarians could find a way to leave the community and actually build their no-tax paradise, I’d be glad to hold the door for them.
Mike,
Here is what you previously wrote regarding education:
“…well, the gov’t should stay out of this or that (education, health) seems to come down to either a) there are no poor people or b) the heck with poor people.”
Then you say:
“Here’s what he says on education… which fits reasonably well with what I wrote above:
“But the law is not, in itself, a torch of learning which shines its light abroad. The law extends over a society where some persons have knowledge and others do not; where some citizens need to learn, and others can teach. In this matter of education, the law has only two alternatives: It can permit this transaction of teaching-and-learning to operate freely and without the use of force, or it can force human wills in this matter by taking from some of them enough to pay the teachers who are appointed by government to instruct others, without charge. But in this second case, the law commits legal plunder by violating liberty and property.”
Really? You expect me to believe that “fits reasonably well” with what you wrote previously? I’ll just leave it at that.
“I admit to not having Rothbard except in passing. But the quote you provide is precisely one that most libertarians would reject.”
You have a PhD in economics, but you are only familiar with Rothbard in passing? Wow.
I had no idea that discussing The Law would be so challenging. I’ll venture a guess that you’ve never read Man, Economy, and State by Rothbard either.
Well, as often happens, we have drifted afar from the main thrust of my original post. As you have already admitted, you do not have the moral authority to take from me that which is mine without my consent. Though the Constitution does not lawfully grant power to the federal government to do a majority of the things it does, that has provided scant protection from the overreaches and abuses of the progressives and statists, whether R or D, in the last 100 years. I just wanted to point that out since you have thrown your lot in with them.
Mike,
Here is what you previously wrote regarding education:
“…well, the gov’t should stay out of this or that (education, health) seems to come down to either a) there are no poor people or b) the heck with poor people.”
Then you say:
“Here’s what he says on education… which fits reasonably well with what I wrote above:
“But the law is not, in itself, a torch of learning which shines its light abroad. The law extends over a society where some persons have knowledge and others do not; where some citizens need to learn, and others can teach. In this matter of education, the law has only two alternatives: It can permit this transaction of teaching-and-learning to operate freely and without the use of force, or it can force human wills in this matter by taking from some of them enough to pay the teachers who are appointed by government to instruct others, without charge. But in this second case, the law commits legal plunder by violating liberty and property.”
Really? You expect me to believe that “fits reasonably well” with what you wrote previously? I’ll just leave it at that.
“I admit to not having Rothbard except in passing. But the quote you provide is precisely one that most libertarians would reject.”
You have a PhD in economics, but you are only familiar with Rothbard in passing? Wow.
I had no idea that discussing The Law would be so challenging. I’ll venture a guess that you’ve never read Man, Economy, and State by Rothbard either.
Well, as often happens, we have drifted afar from the main thrust of my original post. As you have already admitted, you do not have the moral authority to take from me that which is mine without my consent. Though the Constitution does not lawfully grant power to the federal government to do a majority of the things it does, that has provided scant protection from the overreaches and abuses of the progressives and statists, whether R or D, in the last 100 years. I just wanted to point that out since you have thrown your lot in with them.
Mike,
Here is what you previously wrote regarding education:
“…well, the gov’t should stay out of this or that (education, health) seems to come down to either a) there are no poor people or b) the heck with poor people.”
Then you say:
“Here’s what he says on education… which fits reasonably well with what I wrote above:
“But the law is not, in itself, a torch of learning which shines its light abroad. The law extends over a society where some persons have knowledge and others do not; where some citizens need to learn, and others can teach. In this matter of education, the law has only two alternatives: It can permit this transaction of teaching-and-learning to operate freely and without the use of force, or it can force human wills in this matter by taking from some of them enough to pay the teachers who are appointed by government to instruct others, without charge. But in this second case, the law commits legal plunder by violating liberty and property.”
Really? You expect me to believe that “fits reasonably well” with what you wrote previously? I’ll just leave it at that.
“I admit to not having Rothbard except in passing. But the quote you provide is precisely one that most libertarians would reject.”
You have a PhD in economics, but you are only familiar with Rothbard in passing? Wow.
I had no idea that discussing The Law would be so challenging. I’ll venture a guess that you’ve never read Man, Economy, and State by Rothbard either.
Well, as often happens, we have drifted afar from the main thrust of my original post. As you have already admitted, you do not have the moral authority to take from me that which is mine without my consent. Though the Constitution does not lawfully grant power to the federal government to do a majority of the things it does, that has provided scant protection from the overreaches and abuses of the progressives and statists, whether R or D, in the last 100 years. I just wanted to point that out since you have thrown your lot in with them.
Daniel
you are beating your head against a stone wall. not that it’s not educational for the rest of us, but you won’t get anywhere with Bryan. He reads the Constitution to mean what he wants it to mean. Ignoring the power to tax, and the Constitutional amendment that extends that power to an “income” tax.. which was not an new burden on the people, but a technical clarification about the way a tax could be imposed vis a vis the states. Though perhaps Bryan finds a state income tax less offensive than a federal income tax.
nor, apparently, does Bryan consider, even slightly, where the “right” of the Constitution to be binding on “the law” comes from… hint for him: it was voted on, the same way as your local school tax.
also, since he mentioned it, The Articles of Confederation were tried, and found to be unworkable.
And he great cause of “state’s rights” and pfreedom and pproppity turned out to mean the right of some people to enslave others, not to say lynch them from time to time.
But poor Bryan, when he was two, his mother forced him to “share” his toys with another child, and he has never gotten over it.
But let me say
that i share, to some extent, Bryans fear that “the government” is very likely to overreach in matters affecting what i regard as my freedom if it is not carefully watched.
and this is from both the left and the right.
but the people shouting most about pfreedom
these days are people who use the rhetoric exactly to fool the masses into selling themselves into slavery to the malefactors of great wealth.
There are reasons to fear what our government is doing these days, but none of those reason are because our government is an entity that exists outside or beyond our existance. We still have the vote. And, people are recognizing that.
Bryan
hint for you: kimel was not agreeing with Bastiat. he is quoting him to show how he disagreed with him.
Daniel
yes.
but sadly most people vote their emotions according to what lies they have heard that they believe.
and even more sadly, there are people on the left, even, who if they get back into power will be careless about using that power to harm others in ways that are more real than just taxing their money a few more percent.
right now the right is more dangerous… to the extent that the “leftist” President we elected turns out to be a rightist in a blue suit.
Isn’t part of the growth resulting from higher taxes due to government investment in infrastructure? I’m thinking of the highway system constructed during the high tax era of Eisenhower.
That’s an interesting essay but does not seem to recognize that Jefferson reached back to Greek and Roman philosophy and, when stating that he was offering nothing truly new, he wasn’t referring to just the past couple of hundred years in England. Also, despite what this article implies, Jefferson rejected Locke’s inclusion of property as a basic right. That’s why he didn’t include it in the Declaration. See Gary Wills’s book Inventing America for a thorough analysis.
PJR,
Thanks for the recommendation. After doing a bit of research and reading some reviews, I’ve put Inventing America on my reading list and look forward to reading it.
PJR,
Thanks for the recommendation. After doing a bit of research and reading some reviews, I’ve put Inventing America on my reading list and look forward to reading it.
Also, here’s one that you might find interesting:
Liberty, State, and Union: The Political Theory of Thomas Jefferson by Luigi Basani