Thursday, March 29, 2012

My Money and Success (Ch. 8 and 9)

Frank states that Libertarians believe in the Lockean right to our efforts (i.e., I worked for it, so it's mine) and that taxes are equated with theft. I do like Bastiat's quote, "But how is legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong." His (Frank's) criticism of this logic) is that the wealth I was able to make was only possible because of the infracture and institutions of the country where I live, and those institutions and infrastructure was made possible by taxes.

I concede that some taxes are necessary (defense, courts, institutions protecting property rights...I don't think it's government's responsibility to provide public education). And I agree with his statement, "Taxes on useful activities, such as those on savings or job creation, make the economic pie smaller." I also was happy to see that he concedes that CEO or pay for private college presidents is based on their scarce talent (granted he believes that is not the sole explanation). My point is simple: I don't care what PRIVATE firms pay their executives. It's their money, not mine! If a private firm is stupid enough to pay a person a high salary that is unmerited, they will suffer. The bottom line is that the money the firm is paying to their executives isn't mine! I don't understand the moral outrage. Yes, I understand the liberal argument that it is unfair for the top-level management to make so much more than the line-level worker. But to me that is arrogance. It is not a right to work for a firm! So, if a worker voluntarily chooses to work for his or her particular wage, obviously it's a benefit to them--their revealed preference proves that. Of course, I am opposed to government subsidies to private firms or "bailouts."

I also want to point out his Bill Gates example. He proudly writes that Bill and Melinda Gates have donated over $30 billion for their foundation. That is great but I will be blunt and say they did not owe anybody else their money. So, if they get utility for doing that, then fine. But I would not consider them evil if they did not. Bill Gates has helped far more people by providing them jobs and providing products that allow others to make income and make them more productive. And as for Bill's father being for the estate tax, that smells of some type of "rich guilt." Well, Mr. Gates, as a teacher who does not live in luxury I absolve you of your guilt. Your son helped make the pie bigger. It's not as if there is a fixed pie and when Bill got a larger piece, I got a smaller piece!

In conclusion, taxes are forced redistribution. We can argue that some taxes are legitimate and necessary. Where we get into trouble is when we decide that it is "fair" for those with a lot to have to give up their income to those who have less. Is that the role of government or of private charities? Some in politics believe it is the Christian thing to give to those who are less fortunate. I can support that if it is I who is doing the giving, not Washington giving on my behalf. ze
n at the expense of another by doing what the citizen himself cannot do without  commiting a crime.


  1. I totally agree. I don't follow the argument that capitalism concentrates wealth into just a few hands such that everyone else suffers. When actions are based in voluntary exchange, any wealth creation is a boon to everyone else in the long run. Any forced redistribution is really a concentration of wealth. Corporatism, as opposed to capitalism, concentrates wealth at the detriment of many individuals. Yet simply because corporatism involves some voluntary capitalistic action it becomes a strawman for capitalism. For some reason some people can't see the forrest for the trees and sort out the difference between forced redistribution and wealth creation.

  2. Taxes are not forced, they are an incentive structure. People make the decision that paying taxes is worth living in the united states as a citizen, and that they must pay if they want to do so. You only get what you pay for , and like any business, the government has measures to ensure people pay. Even still many today still do not pay their taxes, if people have the ability to not pay taxes then it is not forced . . .

  3. I don't have to go to a night club, but if i want to enjoy the benefits it entails, i pay the price. If not they have bouncers to ensure i either pay or leave.

  4. And adam , how did you get to the conclusion that voluntary exchange benefits everyone in the long run? Also corporatism is painted as capitalism because the people who employ it call it capitalism