July 3, 2001

3:56 AM

the arrogance of wealthfrom of all places the notoriously faux-american national post.

"Be nice to business and rich people. They pay the bills."

excuse me, but i don't see any millionaires paying my bills.
posted by will (111 comments total)

Canadians again? ~sigh~ You see - I toldja: if you don't wipe out the whole hive, they just pop up again elsewhere. I wish they'd just apply for statehood, and get it over with.. ~Grin~

I wouldn't consider this faux-American, will; more like unvarnished, Reagan-era Republican. If it was really American, it would have been Much more condecending and patronizing.

The best example of 'New-Millennial American' mindset I can think of can be seen in the little flash presentation at the top of this page: also see the copy on their careers introduction page. I call it the 'It's not just a burger, it's an adventure' philosophy.

"We love to see you smile"... If the deep south had thought to do some 21st Century strategic spinning on servitude, you could pick up an application for slavery at the help desk in the foyer of any plantation today:

"Hey, Hey, Uncle Fud! It's greet to beat your feet in the Mississippi Mud!
Make a difference in your world, your community, and your your neighborhood. Make friends in a happy, industrious, hospitality-based atmosphere. Find unlimited growth potential into our accredited "House N**ger" program.."
posted by Perigee at 5:38 AM on July 3, 2001

This essay is so condesending, it cant' be for the audience it claims to be for: do you really think a poor person's going to read this essay and say 'Gee, now I know how to treat rich people." Its audience is rich people, and it is written so they can feel better about themselves.

"be nice to business and rich people. They pay the bills"

How and when exactly does this occur?
posted by brucec at 6:09 AM on July 3, 2001

Um, taxes?
posted by Steven Den Beste at 6:20 AM on July 3, 2001

What he said.

A Bill Gates pays an extraordinary percent his wealth in taxes, far more than say, me.

I'm not crying for him, don't get me wrong. However, the rich are very heavily taxed, which helps the nation as a whole.
posted by jragon at 6:22 AM on July 3, 2001

> Um, taxes?

You betcha, things run because of the taxes paid by the rich. That means the taxes paid by the non-rich are superfluous and we can do without them.

I'd love to see the country run for a year - just one itty bitty year - on the taxes paid by the rich. If they pay the bills, they pay the bills, right?
posted by jfuller at 6:25 AM on July 3, 2001

the taxes paid by the rich. If they pay the bills, they pay the bills, right?

Don't the top one percent of income earners pay something like 37% of the income taxes? And the top 5% over 50%?

Maybe they don't pay all the bills, but they pay a much larger share than the average joe.

Doesn't mean you have to be nice to them, though.
posted by daveadams at 6:41 AM on July 3, 2001

You're equating McDonald's with slavery? Come on. They employ teenagers and actually provide an avenue for a decent job for those who probably haven't done so great in the traditional educational curriculum...
posted by owillis at 6:41 AM on July 3, 2001

and who keeps the rich, rich? we do! we work for them! we buy their stuff! we want the stuff they have! stuff rocks!

oh yeah, i suppose all the tax breaks that they get because they buy congresspeople pretty things might help keep them rich too.

i would much rather be rich, be taxed heavily, and still be rich than make what i make now, be taxed heavily, and, well, end up with what i end up with after taxes.

not that there's anything wrong with being poor. ;)
posted by bakiwop at 6:41 AM on July 3, 2001

taxes paid by the non-rich are superfluous and we can do without them.

Well, if you make little enough money, then yes, your taxes would be superfluous and we are in fact doing without them.

This argument is missing the bigger problem of the regressive payroll tax, which places a huge burden on the non-rich while placing almost no burden at all on the very-rich.
posted by daveadams at 6:43 AM on July 3, 2001

Not only that, but it's corporations that spend the money on R&D, production, etc, to make the things we care about affordable. I mean, if your minivan were being made by the guy down the street, it would cost a half million bucks and take 2 years to build.

Wait...who said that?
posted by jpoulos at 6:43 AM on July 3, 2001

"the rich" generally drive the economy. They provide the capitol used to start companies, thy pay a staggering percentage of the income tax and they generally create the jobs the rest of the population uses to pay their own bills.

I am continually amused by the idea that you should tax them within an inch of their life.
posted by soulhuntre at 7:14 AM on July 3, 2001

The percentage of wealth owned by the richest one percent in the U.S. has consistently gone up in the '90s. They owned around 17 percent of the income as of 1997, the last numbers available from the I.R.S.

Remind me again why we're supposed to feel sympathy for how tough things are for them under the present system.
posted by rcade at 7:20 AM on July 3, 2001

The top five percent of wage earners pay over 50% of the taxes while they control over 85% of the wealth. Sounds like they're undertaxed to me.
posted by chris0495 at 7:23 AM on July 3, 2001

The percentage of wealth owned by the richest one percent in the U.S. has consistently gone up in the '90s. They owned around 17 percent of the income as of 1997, the last numbers available from the I.R.S.

So what do you propose we "do" about this? I mean really, hating rich people for the sake of it is so...1980. There have always been excessively rich folks. That's just the way the cookie crumbles.

Whining about it and saying they should have to give everyone else more of their money is just annoying.

That wasn't very productive, was it? I'm sorry. Some times the almost homogenous-ness of the passe liberalism on this board makes me want to act Republican, just to stir the pot a little.
posted by glenwood at 7:39 AM on July 3, 2001

Undertax, overtax - why not just a flat tax? Everyone pays 10%. What's the harm in that?
posted by owillis at 7:39 AM on July 3, 2001

What annoys me is that every year some old person trots out at least four of those items on the list verbatim and thinks they're being clever while dodging a deadline.
posted by Sellersburg/Speed at 8:03 AM on July 3, 2001

if you really taxed everyone the same percentage of their income, wouldn't you either end up taking so much away from the poor people that they would be incapable of sustaining themselves, or not taking enough from the moderately and very wealthy people to actually run the country?

I don't know, but it seems like that's what would happen.
posted by rabi at 8:03 AM on July 3, 2001

What if we levied a stiff Horseshit Tax on moronic, smug editorialism? We'd either be out of debt in a hurry or we'd be free of articles like this one. Win-win.
posted by Skot at 8:16 AM on July 3, 2001

owillis--X number of dollars needs to be raised to fund the operations of the US government. The current progressive taxation system collects X dollars. Any proposed flat tax would also need to collect X dollars. This is referred to as funding parity.

Currently, a variety of rates from 15 to 39.6 are applied to income to compute taxes. If a single rate replaces the varied set of rates, then the new single rate must be above 15% and below 39.6% to generate revenue parity (15% across the board would collect less than X dollars, 39.6% would collect more than X dollars).

This means that under a the new single rate, those that had been taxed at 15% now pay more income taxes for no increase in services while those that had been taxed at 39.6% keep getting the previous level of services while paying less income taxes. The poor pay more while the
rich pay less.
posted by NortonDC at 8:28 AM on July 3, 2001

Its more complicated then just income tax. There are really 2 seperate economies.. the one most of us deal with.. taxes and paychecks and buying stuff.. and the global economy like investment banks, currency tradeing, IMF, etc..

Countries give out money and write off debt on the scale of billions of dollars all the time. They play by diffrent rules. Heck.. theres a secretive cabal of men who almost literaly play poker to decide what currencies are worth.. we have no gold standard so the worth of currency is decided by a few secretive men on a handshake. Who are these guys? Every few months they create or destroy trillions in wealth around the world. Its what led to the major collapse of Russia and Indonesia and Brazil and Mexico and why we had to bail some of them out. The "system" is held together by some very artificial arrangements, not the natural capitalism they would have you believe of just working hard to get ahead. Granted we all have to work hard but the people of Indonesia worked hard and have been set back 20 years a generation in 1 day of currency tradeing in the name of protecting the system.. the system is more important then the welfare of the people in it.
posted by stbalbach at 8:44 AM on July 3, 2001

Seems like everybody is missing a point.

The problem with capitalism system is that the capitalist (the one who gives the money he has got, putting it at risk) is OVERPAID because

1) he doesn't do anything but invest money
2) he doesn't "add value" to anything, because anybody and their blonde sister can open the wallet and write a check.
3) basically what he does is being a leech, living on other
people innovation capacity and hard work

Capitalists get almost all returns on investment, while the ones who do the real innovation and work only see a fraction of what they're really worth. See for example a geek who spends 18 hours/day learning how to make stuff work and actually making it work.

Now before capitalism-friendly ones start whining about my babbling, consider that

1) capitalism works nicely to promote innovation because it promises enormous returns for invention exploiters ; greed motivates them to actually make something new. This is good.

2) capitalism DOESN'T encourage the successful exploiter to invest his money again, fueling a new virtuous research work. Monopolism is great for profits, why should one research new products when you're already making insane amounts of money ?

3) That's why some guru understood monopolism isn't good and proposed to split up huge companies in competiting industries.

4) That guru didn't understand that the concept of competition is totally insane for any profit-seeking company. Competition is good between employees but not between companies, it's obvious. The answer to competition is "concentration and mergers" covered by the pathetic excuse national companies must protect themselves from increasing foreign competition.

INCREASING WHERE ?

Asia one could say. China maybe. Why ? Cheap labor. The same cheap labor capitalists are so hungry for in their own country ; but wait a minute , if i can't control cheap labor then cheap labor is evil, it's exploitment !

Are you lost ? Don't you see "the big picture" ? Ohoh I feel bad for you. Really. Sure.

At the end the EVIL in the system is the system allowing inordinate accumulation of money and power in the hands of realitively few persons ; WHAT if some BRIGHT idea doesn't look good to them ? WHY brilliant ideas must succumb the absurd logic of profit ? Profit itself is useless, only ideas make a difference.
posted by elpapacito at 8:48 AM on July 3, 2001

Bold is so much fun

So are italiacs.
posted by dogmatic at 9:06 AM on July 3, 2001

> X number of dollars needs to be raised to fund the
> operations of the US government. The current
> progressive taxation system collects X dollars. Any
> proposed flat tax would also need to collect X dollars.
> This is referred to as funding parity.

Funding parity is not the only choice. The other choice is don't fund the current level of government operations. Make the government get by on whatever it collects using a flat tax system, which OF COURSE will be less that it collects now. Thousands of useless bureaucrats will have to be axed. Everybody in northern Virginia will have to get honest jobs. A lot of aircraft carriers will have to be melted down for belly button rings. Senators make $25000 a year and don't get staffs. No more franked mail for congressmen. No more price support for milk or tobacco. The forest service wants to cut more logging roads through the national forests? NOT FUNDED! That's the idea!
posted by jfuller at 9:14 AM on July 3, 2001

Spoken like a true libertarian, jfuller.

I agree to just about all of it except the no-staff for Senators thing, but that's just because I know what a majority of senate staffers do, and they work their collective asses off.

We could also reduce fedgov operations significantly by simply eliminating fedgov divisions which do not have a direct role in the area that they are charged with. Departments of. . . (dare I say it?) ah heck, you know who you are. I'm looking at you! If there were any sense in this nation your days would be numbered.
posted by Dreama at 9:27 AM on July 3, 2001

Alternately, you could tax wealth and not income. Flat tax of 5% annually on wealth would mean that Bill Gates would pay his fair share. I would pay nothing since I have negative wealth. However, I am not holding my breath for this to happen.
posted by norm at 9:35 AM on July 3, 2001

I somewhat agree with jfuller on this. The government should make do with what we put in, versus the other method of taxing us to reach x amount of dollars. I don't understand how you can say the poor are paying more at 15%, since the rate would remain the same. Everyone puts in the same percentage of what they make - what could be more democratic than that?

Of course the argument would be in what divisions we cut - I'd say Defense, farm subsidies would be first to go, others would probably jump to Education/Welfare....

Alternately, you could tax wealth and not income.
Why should Bill Gates be penalized for the money he's amassed?
posted by owillis at 9:40 AM on July 3, 2001

Wait one second...the rich may pay a lot of taxes and start lots of companies, etc. but they get that money through their interactions with those of us not considered rich.

Nobody's doing anything in a vacuum.
posted by Kikkoman at 9:42 AM on July 3, 2001

norm, that would only encourage people to go into debt and stay there.
posted by wenham at 9:50 AM on July 3, 2001

> Why should Bill Gates be penalized for the money he's
> amassed?

Reporter: "Willie, how come you rob banks?"

Willie Sutton: "'Cause that's there the money is."
posted by jfuller at 9:51 AM on July 3, 2001

Wait one second...the rich may pay a lot of taxes and start lots of companies, etc. but they get that money through their interactions with those of us not considered rich.

Nobody's doing anything in a vacuum.

So what? Those interactions are voluntary, unlike the interaction between govt. and citizen. I can't choose not to pay taxes, but I can choose not to provide Bill Gates with any of my money.
posted by ljromanoff at 9:58 AM on July 3, 2001

that would only encourage people to go into debt and stay there.

Some of us didn't even need encouraging.
posted by Skot at 9:58 AM on July 3, 2001

Norm:

> Alternately, you could tax wealth and not income.

wenham:

> norm, that would only encourage people to go into debt
> and stay there.

Sure a wealth tax would encourage us to have no wealth, but likewise an income tax encourages us to have no income - and yet people go right on working or looking for work. The temperature right now encourages me to take off my clothes and run around naked, but I don't do it because there are other, countervaling pressures at work.
posted by jfuller at 10:02 AM on July 3, 2001

elpapacito: Someone's gotta say it, so it might as well be me: (ahem)...Capitalism is what has created this society that we inhabit, with all of the attending wonders. It has fueled innovation, increased lifespans, raised standards of living (to an astonishing degree), and provided safety & security. If you are so completely against capitalism, perhaps you would enjoy living in a society that does not practice such. Then you wouldn't have to worry about greedy capitalists exploiting the people.

OK, bring it on...start bashing me for telling the truth.
posted by davidmsc at 10:05 AM on July 3, 2001

don't forget about all the failures as well. capitalism might rock, but it also sucks. and if one of you, just one of you asks for examples...pow! bang! zoom!
posted by bakiwop at 10:19 AM on July 3, 2001

don't forget about all the failures as well. capitalism might rock, but it also sucks. and if one of you, just one of you asks for examples...pow! bang! zoom!

Hey, no one promised you a Utopia. Still, stacking up capitalism's successes against its failures would produce a result more lopsided in favor of capitalism than if the L. A. Lakers took on my elementary school basketball team.
posted by ljromanoff at 10:24 AM on July 3, 2001

> Capitalism is what has created this society that we
> inhabit, with all of the attending wonders.

Speaking as someone who is almost certainly over to the right of you, I do not find most of these material wonders worth the cost, either environmental or spiritual. The wonders that do impress me were not provided by either capitalism or any other economic system.
posted by jfuller at 10:26 AM on July 3, 2001

Alternately, you could tax wealth and not income.
Why should Bill Gates be penalized for the money he's amassed?

Because he wouldn't be taxed on his income. The idea is to tax people who aren't in debt. Whether or not this would promote getting in debt is another issue altogether.

Capitalism is what has created this society that we inhabit, with all of the attending wonders.

As with all things, its open to criticisms and can be improved upon. As world economies change its really up to the small voices to point out where a system set up to work reasonably well just a few years ago may now be driving that very same economy into the gutter. Also pointing fingers are 'non-capitalist' societies is practically a straw man. I could point at collapsed capitalist societies and neither of us would have made much of a point in the end.

What's with the sudden flat tax freak out? Flat tax does not equal smaller government. Sorry Libs.
posted by skallas at 11:09 AM on July 3, 2001

Sure a wealth tax would encourage us to have no wealth, but likewise an income tax encourages us to have no income - and yet people go right on working or looking for work. The temperature right now encourages me to take off my clothes and run around naked, but I don't do it because there are other, countervaling pressures at work.

I could survive quite comfortably for an indefinate period while in debt. But not if I don't have an income.
posted by wenham at 11:22 AM on July 3, 2001

davidmsc :

What makes you think communism is the _only_ alternative to capitalism ? And I think you missed
the point again ; my point is about innovation being
the fuel of evolution.

Capitalism WORKS when it comes to encouragin inventors
to experiment and create new goods. Capitalism system
provides what is needed today for SYSTEMATIC research...
a lot of money and more money and even a little more money.

But, when it comes to re-investment of capitals into new reasearch, capitalism doesn't seems to work as well. In fact once one new product is discovered

1) it's evalutated for potential PROFIT it can generate
2) it's actually produced IF AND ONLY IF it can generate profit in a "reasonable" amount of time.

Who has the LAST word on any research project ? The dude who gives the money because he simply has the
power to stop writing checks.

Now what if only an handful of people have this power ? Aren't you SCARED by that ? One day your favourite capitalist may decide research on cancer isn't so profiteable because it's MUCH MORE profiteable to cure with drugs than givin a permanent vaccination as final solution.

COMMUNISM ? No thanks research wasn't really communist countries flagship. But also consider communism as a system was NOT implemented by russia or china or vietnam or whatever..that's just capitalism under another label and with much less entertaining propaganda.

Hope that you'll understand my point : otherwise I'll just phone and have you fired cause you're dumb :DDD

Cya !
posted by elpapacito at 11:52 AM on July 3, 2001

The top five percent of wage earners pay over 50% of the taxes while they control over 85% of the wealth. Sounds like they're undertaxed to me.

Wealth (assets) != income. We're talking about income taxes here. If you want to talk about wealth taxes, that's another argument. I certainly hope you don't think we should tax assets, because I really really disagree with that idea.

Later...

[norm] Alternately, you could tax wealth and not income. Flat tax of 5% annually on wealth would mean that Bill Gates would pay his fair share. I would pay nothing since I have negative wealth.

Ack! COMMUNIST! :) Unless you put in a "wealth deduction" of sorts, taxing wealth would also ensure that no one had any stable assets. Essentially a national property tax, except on all assets... grrr... it makes me too upset to even argue about. Stop it norm! You're just doing this because you hate me, aren't you?

[jfuller] Sure a wealth tax would encourage us to have no wealth, but likewise an income tax encourages us to have no income - and yet people go right on working or looking for work.

The difference is that income is taxed once, whereas wealth would be taxed over and over and over again. A wealth tax is pure evil. PURE EVIL!
posted by daveadams at 11:55 AM on July 3, 2001

[owillis] why not just a flat tax? Everyone pays 10%. What's the harm in that?

[rabi] if you really taxed everyone the same percentage of their income, wouldn't you either end up taking so much away from the poor people that they would be incapable of sustaining themselves, or not taking enough from the moderately and very wealthy people to actually run the country?

Kinda like the current FICA/Medicare system? From the first dollar you make to the 75,000th dollar you make, you are taxed something like 15% to pay for social security and medicare programs. In fact, it's worse than a flat tax, it's a regressive one. Once you make more than 75,000 dollars, you actually get taxed a smaller percentage as your income increases. So the poorest of the poor are paying a 15% income tax (you can call it a payroll tax, but there's no practical difference) to subsidize social security and medicare benefits for everyone, including the rich. Is that fair?
posted by daveadams at 11:55 AM on July 3, 2001

theres a secretive cabal of men who almost literaly play poker to decide what currencies are worth

There is no cabal.™
posted by daveadams at 11:55 AM on July 3, 2001

Now what if only an handful of people have this power ? Aren't you SCARED by that ?

Well, elpap, it's true that capitalism doesn't work well if there are only a few players. Capitalism works best in a diverse market with lots of competition. It encourages much innovation and very low prices. I'm not scared of capitalism in general. I will be scared when we get to this point.

What makes you think communism is the _only_ alternative to capitalism ?

Are you presenting any alternatives at all, or are you just bashing capitalism?
posted by daveadams at 11:59 AM on July 3, 2001

Also pointing fingers are 'non-capitalist' societies is practically a straw man. I could point at collapsed capitalist societies and neither of us would have made much of a point in the end.

Could you please point out ONE reasonably capitalist nation that has failed anywhere nearly as badly as many socialist nations have?
posted by ljromanoff at 12:00 PM on July 3, 2001

jfuller--There are ideas worth discussing in your post, but your main thrust of reducing the size of the government is completely orthogonal to my and owillis's comparisons of flat versus progressive taxation.

owillis--I'll amend the closing statement to clarify:
This means that under a the new single rate, those that had been taxed at 15% now pay more income tax for no increase in services while those that had been taxed at 39.6% keep getting the previous level of services while paying less income tax. The poor pay more than they do now while the rich pay less than they do now.

Additionally, progressive taxation has built-in effeciencies compared to flat taxation in that the more money the government takes away from the poor, the more the government has to replace in welfare services. It is much more effecient to just let the poor keep a greater percentage of their income, and it results in a leaner government apparatus.
posted by NortonDC at 12:01 PM on July 3, 2001

Currently, a variety of rates from 15 to 39.6 are applied to income to compute taxes. If a single rate replaces the varied set of rates, then the new single rate must be above 15% and below 39.6% to generate revenue parity (15% across the board would collect less than X dollars, 39.6% would collect more than X dollars).

I would think, however, that a flat tax would also mean eliminating loopholes, wacky tax laws, and deductions. Everyone just pays x%, no bullshit.

I'm no economist, or even mathematician, but I think it would level out quite well.
posted by glenwood at 12:07 PM on July 3, 2001

glenwood--Loopholes, wacky tax laws and deductions are not the product of progressive taxation, they are the product of using the tax code as a tool of social engineering (and not in the hax0r sense). The government rewards certain behaviors monetarily through the tax code to encourage those behaviors, such as loaning money to the government (tax-free bonds), saving money for retirement (401k's), producing more tax-payers(exemptions for dependents), etc.

The temptation to do this exists whether the government sets the tax baseline via progressive taxation or flat taxation.
posted by NortonDC at 12:29 PM on July 3, 2001

The difference is that income is taxed once, whereas wealth would be taxed over and over and over again. A
wealth tax is pure evil. PURE EVIL!

You are right. and it already exists. Its called the property tax. And in many states (NJ included) that's how we pay for the schools. Very little of it comes from Mr. Bush or even the state, thank you very little. Its paid for by taxes on the only asset most middle class people have -- the house. It hits people who do not work. And it is taxed over again.

I would think, however, that a flat tax would also mean eliminating loopholes, wacky tax laws, and deductions.
Everyone just pays x%, no bullshit.

and that's the reason why a flat tax is attractive but will never pass. Rich people like the loopholes. It allows them to pay very little if they have a good accountant. Also, homeowners would probably object to losing the interest deduction.
posted by brucec at 12:31 PM on July 3, 2001

Capital Gains is one of the fairest taxes: You pay a percentage of the money you gained, not on assests you own. And if you lose, Uncle Sam covers you for the loss -- allowing you to deduct it. The current amounts (20% long-term, 28% short-term) should be raised a few percentage points, with the additonal amounts going to fund education and property - tax relief.
posted by brucec at 12:38 PM on July 3, 2001

daveadams:

Bashing a system is just another way to encourage
it's change. Yes I bash capitalism when it's not efficient
and doesn't produce positive changes, or when negative effects outweight the benefits.

The alternative is another system in which research and innovation come first , and then profit. It currently is a dream-level system, because for some reason people still think monetary profit comes first, and then innovation. I don't think they'll be happy to discover their accumulated wealth is worthless if they can't buy solutions to their problems.

One interesting example of the negative effects of capitalism is the anti-aids drug problem. The problem
wasn't in the Patent System itself (which is largely debatable but servers some purpose) , but in the drug producing companies pricing policy. Why do they need to
charge , for example, $1000 for a drug that costs $100
to produce and distribute ?

Companies will claim they need to charge more to cover research and developement expenses ; then they'll say they need to charge extra to do even more research and developement, which they may as well NOT DO if they think that's not profiteable (but they already milked money from consumers). Meanwhile poor people can die, even if the solution is aviable.

You think this system is an efficient system ?
posted by elpapacito at 12:40 PM on July 3, 2001

Find out where tax money goes. Do some research, the information is out here. See how few or many of the government services we use are funded by income tax. See what other taxes fund what.

I'm not going to venture an opinion other than that, because frankly, I don't have enought information myself yet.
posted by Nothing at 12:55 PM on July 3, 2001

and that's the reason why a flat tax is attractive but will never pass. Rich people like the loopholes.

There are probably a lot of reasons why it won't pass, but this isn't one of them. Rich people, like most people, don't like loopholes, they like paying as little as possible to the government. If a flat tax achieves this for more people than loopholes would, then support would naturally tend toward the flat tax.

The alternative is another system in which research and innovation come first , and then profit. It currently is a dream-level system

I can dream up an even better system than yours, and just as practical: magic fairies solve all of our problems. That would be great.

because for some reason people still think monetary profit comes first, and then innovation

For some reason? Innovation driven by profit motive is extremely efficient, that is why most of the cutting edge medicine and other technologies are developed in the U.S., where their development for profit is encouraged. Sure, it would be great if people could spend the millions on research of new drugs and technologies just for kicks and not for profit, but like I said, it would be great if magic fairies could solve all of our problems, too.

One interesting example of the negative effects of capitalism is the anti-aids drug problem. The problem
wasn't in the Patent System itself (which is largely debatable but servers some purpose) , but in the drug producing companies pricing policy. Why do they need to
charge , for example, $1000 for a drug that costs $100
to produce and distribute ?

Yeah, and why does Adobe charge $600 for Photoshop when I know that burning data onto a CD only costs about $1.50? The answer is that there are more factors in the price than production and distribution. Sure, maybe the 2nd through the 10,000,000th pill only cost $100 each, but to make the first one costs several million. And you also have to factor in the cost of the several other experimental drugs that ultimately were not as effective as the finished product, etc. Only looking at a very small group of cost factors and claiming that price gouging is going on because of it is failing to understand the true nature of the market.
posted by ljromanoff at 1:05 PM on July 3, 2001

ljromanoff

I can dream up an even better system than yours, and just as practical: magic fairies solve all of our problems. That would be great

Even today CPU were wild dreams 20 years ago weren't they ? You would have laughed at Microsoft boys , I saw their picture when their started, what a bunch of geeks.

For some reason? Innovation driven by profit motive is extremely efficient

Read my posts above, I agree with you, I'm not disagreeing capitalism helps research a lot.

Only looking at a very small group of cost factors and claiming that price gouging is going on because of it is failing to understand the true nature of the market

Luckly you understand that not all costs are clearly visibile, not even on a annual income statement. You're among the few ones who do. So you must know that one can inflate costs by simply buying useless things, just to show the company needs more investment to keep on being succesful. That happens when accounting auditing is badly done or when the auditor is payed (directly or indirectly) not to "audit too much".

That's not a conspiracy theory, it's plain business.
posted by elpapacito at 1:40 PM on July 3, 2001

you also don't get to complain about the sub-par quality of the Congressmen you're getting due to the fact that they now make less money

as if the ones we're getting now are high quality. tsk.

on the taxation thing: how many of the wealthy 1% (or 5%) actually worked to get the wealth in comparison to the number who inherited their wealth? (and this is an honest question, not some sort of volley in a class war)
posted by tolkhan at 1:53 PM on July 3, 2001

Could you please point out ONE reasonably capitalist nation that has failed anywhere nearly as badly as many socialist nations have?

How about Germany in the 1920's?
posted by Steven Den Beste at 2:18 PM on July 3, 2001

I think most of the people making false price gouging claims understand the realities of the market quite well, and merely intentionally lie about it in order to further their own selfish desires.

I think it's more in the middle of the road. For example - grousing about oil costs seems to be more a result of people buying fuel guzzling SUVs, whereas the "power crisis" is more a manipulation of the supply by producers.

To fix that? More common sense regulation, allow less consolidation. Take a look at your long distance phone bill for how this could work (ten cents a minute! :).
posted by owillis at 2:36 PM on July 3, 2001

can inflate costs by simply buying useless things, just to show the company needs more investment to keep on being succesful. That happens when accounting auditing is badly done or when the auditor is payed (directly or indirectly) not to "audit too much".

When this happens, it's called fraud - not 'plain business' as you call it. And when shareholders find out about it, the companies that do it usually pay severely. This is hardly standard business procedure as you suggest.

Forgive me for saying so, but it seems everything you claim to know about capitalism you learned from an old issue of Pravda.

Could you please point out ONE reasonably capitalist nation that has failed anywhere nearly as badly as many socialist nations have?

How about Germany in the 1920's?

The German economy was nearly wrecked by inflation in the early 1920s, that is true. However, that is due directly to poor government policy as a repsonse to crippling war repairations. The failure of the Weimar Republic is a failure of international war politics, not of capitalism.

For example - grousing about oil costs seems to be more a result of people buying fuel guzzling SUVs

Gasoline prices are much less onerous than the media suggests when one places them in historical perspective, and that doesn't even take into account the added cost due to high taxes on gas and increased regulation.

whereas the "power crisis" is more a manipulation of the supply by producers.

Sorry, no. This has been debated to death, so I hesitate bringing it up again, but your position makes no sense. If the producers of power deliberately created a shortage, why would the choose to localize it in parts of California? What good would that accomplish for them? The current so-called crisis in California has more to do with state politics there than any sort of manipulation conspiracy by the power producers.

To fix that? More common sense regulation, allow less consolidation. Take a look at your long distance phone bill for how this could work (ten cents a minute! :).

Huh? Long distance rates are low due to less regulation, not more! When long distance was heavily regulated it resulted in every 'long distance' call being an occasion because they cost so much.
posted by ljromanoff at 3:05 PM on July 3, 2001

>> Alternately, you could tax wealth and not income.
> norm, that would only encourage people to go into debt
> and stay there.

Like oh yeah.... that's like, SOOO different from the way things are now.

What do I care what some rich twit pays in taxes? Hey, it's all set up just for him, shouldn't he pay more? The question is: Is he paying his fair share? Well.... is he, boopela?

Damn, where are they selling the Eat the Rich t-shirts when I really, really feel like wearing one?
posted by Twang at 3:10 PM on July 3, 2001

The German economy was nearly wrecked by inflation in the early 1920s, that is true. However, that is due directly to poor government policy as a repsonse to crippling war repairations. The failure of the Weimar Republic is a failure of international war politics, not of capitalism.

And, I assume, you'll blame "international war politics" on the 1929 crash, which wrecked the US, more or less, until Keynsian demand-side economics and the next war saved it? So socialist economies are ruined by their ideology, and capitalist ones by extraneous circumstances? And, say, the cost of the Cold War arms race had nothing to do with the economic decline of the Warsaw Pact nations? And Russia's failing economy, with its privatised utilities and imploded welfare system, is due to something else, like the bankrupt keiretsus of Thailand and South Korea? Gotcha.

why does Adobe charge $600 for Photoshop when I know that burning data onto a CD only costs about $1.50?

Because they know that corporate buyers or freelancers will pay up and claim it as a tax-deductible, and the rest of us will burn a copy from the office CD. Is Photoshop really ten times better than Paint Shop Pro? Or infinite times better than the GIMP? Office software pricing is a happy conspiracy, and everyone knows it.

I'd add that last week's report-friendly quarter-end markups, which basically broke NASDAQ on Friday afternoon, is precisely an example of how fraud, rather than "standard business procedure" is the norm in the bubble equity markets. As Bill Fleckenstein notes at Grant's Investor (no link, as it's subscription-only), that kind of manipulation goes on all the time: analysts offer favourable opinions of companies when their firm underwrites the IPO; massive trades inflate stock prices on expiration days or quarter-ends, to make funds look more successful; auditing firms are compromised by their non-audit business; quarterly figures "make expectations" by Pulitzer Prize-winning accountancy.

If there is some example of Adam Smith-style free markets at work on a macroeconomic level in the real world, please to be illustrating? In the meantime, I can only assume that everything you claim to know about both capitalism and socialism, you learned from an old copy of Atlas Shrugged.
posted by holgate at 4:26 PM on July 3, 2001

Twang, you haven't given me much to work with.

Could you respond instead of react?
posted by wenham at 4:30 PM on July 3, 2001

Just a small point.

Income taxes are not the only taxes on income. If you're an employee, as I am, then you also pay, in effect, an additional 15.3% (your employer pays half, but if he didn't have to pay it, your salary would be higher) on the first $80,400 of your salary. If you're single (or married without a lot of deductions), you're paying 28% federal income tax and state income taxes of up to 10% give or take. State taxes are deductible, so 10% translates into 7.2%, but FICA's not deductible.

If, on the other hand, you make your money on portfolio income, you don't pay any FICA taxes, and your capital gains are taxed at 20% at the federal level.

I understand that we live in a capitalist society, but we punish labor, as well, and that's not necessary.
posted by anapestic at 4:33 PM on July 3, 2001

And, yes, I know that you get a benefit from the FICA taxes, but it's not clear how much longer that benefit will be available, and it's absolutely clear that you'd be better off investing the money for yourself.
posted by anapestic at 4:36 PM on July 3, 2001

Is Photoshop really ten times better than Paint Shop Pro? Or infinite times better than the GIMP?

In the first case, yes. In the second case, hell yes. Paint Shop Pro's CMYK support is rudimentary, according to this review, from which I will quote a salient paragraph.

"At first sight it looks impressive, but in practice Paint Shop Pro’s CMYK support proves inferior to that found in Photoshop. To begin with Photoshop offers finer control so that you can take into account the dot gain of the press you are working to. Far more importantly though, Photoshop actually offers a dedicated CMYK working mode with access to the separate cyan, magenta, yellow and black channels directly through its Channels palette and indirectly through its various colour correction dialogs. In Paint Shop Pro, the only way to work with the CMYK plates is to use the Split to Channels command to create separate grayscale versions of each channel and then to recombine them. In other words, apart from when it saves the file, Paint Shop Pro is always working in RGB mode. This means that Paint Shop Pro can’t show an out of gamut warning or an ongoing CMYK preview. In fact, it’s not even possible to specify colours by their CMYK percentages."

The GIMP, from what I can determine, currently has no support for CMYK, not even to the rudimentary level of Paint Shop Pro.

Thus, neither program is very well suited for professional work. If a score of 10 means "I can use it for serious prepress work," then a score of 1 would be reasonable for Paint Shop Pro, and a score of 0 is inevitable for The GIMP.
posted by kindall at 4:42 PM on July 3, 2001

Is Photoshop really ten times better than Paint Shop Pro? Or infinite times better than the GIMP?

In the first case, yes. In the second case, hell yes. Paint Shop Pro's CMYK support is rudimentary, according to this review, from which I will quote a salient paragraph.

"At first sight it looks impressive, but in practice Paint Shop Pro’s CMYK support proves inferior to that found in Photoshop. To begin with Photoshop offers finer control so that you can take into account the dot gain of the press you are working to. Far more importantly though, Photoshop actually offers a dedicated CMYK working mode with access to the separate cyan, magenta, yellow and black channels directly through its Channels palette and indirectly through its various colour correction dialogs. In Paint Shop Pro, the only way to work with the CMYK plates is to use the Split to Channels command to create separate grayscale versions of each channel and then to recombine them. In other words, apart from when it saves the file, Paint Shop Pro is always working in RGB mode. This means that Paint Shop Pro can’t show an out of gamut warning or an ongoing CMYK preview. In fact, it’s not even possible to specify colours by their CMYK percentages."

The GIMP, from what I can determine, currently has no support for CMYK, not even to the rudimentary level of Paint Shop Pro.

Thus, neither program is very well suited for professional work. If a score of 10 means "I can use it for serious prepress work," then a score of 1 would be reasonable for Paint Shop Pro, and a score of 0 is inevitable for The GIMP.
posted by kindall at 4:42 PM on July 3, 2001

My bad -- not only did I post that twice, but that review is old. Someone who is more familiar with recent versions of Paint Shop Pro than i am will have to decide if the review's critique of v5 still applies in v7.
posted by kindall at 4:52 PM on July 3, 2001

A review of PSP7. Still lacking on CMYK, but recommended for those who aren't working for prepress, and who can't rely upon the office budget. And that was kind of my point: just as Oracle can basically make up a price and stick three zeros on the end when it signs a contract, so Adobe can target professionals, in the knowledge that they can claim back a percentage as a business expense without the taxman saying "couldn't you get PSP instead?"

In a purer free market, that wouldn't happen.
posted by holgate at 5:09 PM on July 3, 2001

Yeah, every professional wants to spend $500 more than they need to spend, so they can get $100 of it back through an income tax deduction. %) That's like buying a bunch of stuff you don't need because it's on sale, and thinking you saved money. Not even professionals are that dumb. The fact is, Photoshop is worth $600 to a professional for a number of reasons. If Adobe is just making up the price, why isn't it $6000 instead of $600?
posted by kindall at 5:26 PM on July 3, 2001

...somewhat tangential, but maybe to make you Americans feel better - over 50K earners here in Australia pay 49.7% income tax!
Canada is not dissimilar in it's high-end tax rates, I think, although one might be able to argue that being the UN's pick for 'Best Standard of Living on the Planet' for a few years running makes it justifiable there.
posted by stavrosthewonderchicken at 7:14 PM on July 3, 2001

Stavros, you may not realize that in addition to paying federal tax, most of us also pay state income tax and in some cases also a city or county income tax. There is also Social Security and Medicare taxes. Someone with a high income in California pays nearly 45% overall now. (I'm not rich but I also have no deductions at all, and in some years I have paid 45%.) In addition, most places have a significan sales tax, where you get nicked again.
posted by Steven Den Beste at 8:36 PM on July 3, 2001

That's a nice rant, holgate, but at the end I was left wondering what sort of economic system you think is the proper one.
posted by aaron at 8:59 PM on July 3, 2001

stavrosthewonderchicken : ...somewhat tangential, but maybe to make you Americans feel better - over 50K earners here in Australia pay 49.7% income tax!

Well, yes, but that's a marginal rate. Also, over 50K earners tend to have accountants that help them avoid a lot of tax through trusts and all that.

What you get, of course, is at least Australia and Canada have at least reasonably adequate public health system. If you get sick in the US and you don't have insurance, you're stuffed, and even if you do, you're at the mercy of greedy doctors overservicing you and all that.

We also used to have a decent education system until Hawke/Keating-era ALP and then the Libs started hacking away at it because they stopped seeing public education as an investment in the future of the nation.
posted by Graham at 11:38 PM on July 3, 2001

Also, over 50K earners tend to have accountants that help them avoid a lot of tax through trusts and all that.

AUS $50K is about US $26K. I don't think people making that little money are hiring accountants.
posted by kindall at 12:14 AM on July 4, 2001

Well, I have an accountant friend...does that count?
kindall : You're absolutely right, but of course the purchasing power of each dollar made here in Oz is commensurately higher as well, although it's doubtful that real prices are half what they are in the states for comparable goods...that said, we now pay 10% GST (goods and services tax, same as Canada's or UK's VAT essentially) on pretty much everything except some basic foodstuffs.

I would link to the Economist's Big Mac index here to prove some vague point about prices and currencies that I half-understand, but I gotta run.
posted by stavrosthewonderchicken at 12:42 AM on July 4, 2001

And, I assume, you'll blame "international war politics" on the 1929 crash, which wrecked the US, more or less until Keynsian demand-side economics and the next war saved it?

As you probably know, there were many factors involved in the 1929 crash, none of which were some internal failing of capitalism. As for Keynsianism, it did nothing but exacerbate the problem. WWII ended the Great Depression.

So socialist economies are ruined by their ideology, and capitalist ones by extraneous circumstances?

Socialist economies have internal failings that capitalist economies do not. Furthermore, I would still like an example of a 'ruined' capitalist economy.

And, say, the cost of the Cold War arms race had nothing to do with the economic decline of the Warsaw Pact nations?

The cost of the arms race affected both sides. Why wasn't the West ruined the way the Warsaw Pact and the USSR were? Why were other socialist nations that had little to nothing to do with the arms race also in such dire straits? Sorry, that excuse doesn't fly.

And Russia's failing economy, with its privatised utilities and imploded welfare system, is due to something else

Russia is not a capitalist country now, it is more of a hangover of socialist failings and gang rule. 70 years of totalitarian socialism can't be washed clean overnight - or even over 10 years.

why does Adobe charge $600 for Photoshop when I know that burning data onto a CD only costs about $1.50?

Because they know that corporate buyers or freelancers will pay up and claim it as a tax-deductible, and the rest of us will burn a copy from the office CD.

You have apparently missed the point. The point is that there are more factors in product pricing than manufacturing cost. Your suggestion that Adobe prices its products with an expectation that they will be widely pirated is just stupid. Why not change $10000? The company still needs the CD, so they'll pay for it anyway, right?

Is Photoshop really ten times better than Paint Shop Pro? Or infinite times better than the GIMP?

Yes.

how fraud, rather than "standard business procedure" is the norm in the bubble equity markets.

It is debatable whether that is the norm in equity markets, let alone the entire economy as a whole.

If there is some example of Adam Smith-style free markets at work on a macroeconomic level in the real world, please to be illustrating?

This question is somewhat dubious. It amazes me that anyone would still make any sort of pro-socialist, anti-capitalist argument when one only need look around and see that the nations of the world that tend toward free markets are vastly better off than those that tend toward socialism - particularly when there are some very obvious examples such as West Germany vs. East Germany and North Korea vs. South Korea.

In the meantime, I can only assume that everything you claim to know about both capitalism and socialism, you learned from an old copy of Atlas Shrugged.

Nice attempt at wit, but of course there is no detailed economic theory in Atlas Shrugged. Better luck next time.
posted by ljromanoff at 6:20 AM on July 4, 2001

Nice attempt at wit, but of course there is no detailed economic theory in Atlas Shrugged. Better luck next time.

Whoosh, that one passed straight over your head.
posted by holgate at 11:44 AM on July 4, 2001

Whoosh, that one passed straight over your head.

No, I get what you were attempting to do. It just wasn't that clever.
posted by ljromanoff at 11:59 AM on July 4, 2001

it only matters that a few are still stuck on welfare.

Better to worry about that, than to concentrate on enriching the wealthy.

No, I get what you were attempting to do. It just wasn't that clever.

Well, you do insist on bringing the debate down to your level.
posted by holgate at 12:58 PM on July 4, 2001

No, I get what you were attempting to do. It just wasn't that clever.

Well, you do insist on bringing the debate down to your level.

Your cheap-shottery continues not to impress.
posted by ljromanoff at 2:22 PM on July 4, 2001

Neither does your inability to improvise from your rather monotonous hymnsheet.
posted by holgate at 3:37 PM on July 4, 2001

wenham
Twang, you haven't given me much to work with.
Could you respond instead of react?
Oh, you came here looking for an ARGUMENT! This is ABUSE!

Seriously though (???), the topic is just too complex for this forum. Perhaps we can exchange cannonballs at another time?
posted by Twang at 5:01 PM on July 4, 2001

Neither does your inability to improvise from your rather monotonous hymnsheet.

Right back at ya, pal.
posted by ljromanoff at 5:19 PM on July 4, 2001

Is it a fundamental tenet in conservative argument that when confronted with real issues regarding capitalism's flaws the conservative must trumpet how "socialist" and futilely utopian your fellow debater are. Yet not ending there either, but also parroting the propaganda of true belief that unhindered capitalism can do no wrong.

Who's calling who utopian?

ljr: You're an unreasonable fanatic.
posted by crasspastor at 6:16 PM on July 4, 2001

I was thinking how bizarre it is for a columnist at the National Post to be talking about "spoiled Canadians", given that the millionaire who pays her bills, Conrad Black, has just renounced his citizenship in a fit of pique, having failed in a legal challenge to a well-established precedent that prevents Canadians from taking British peerages. Instead, he had his full British passport rushed through in precisely four days, proving once more that the rich don't need us to be nice to them. The term "spoilt brat" seems only fitting.

Anyway, since others are throwing around -isms: I'm sceptical of any notion of economic "systems" being proved right or wrong. All economies are mixed, to some degree: many of the more restricted have a flourishing black market; but many of the more highly market-orientated are also those with restrictions on individual freedoms that few "libertarians" would accept, such as Singapore or some of the Gulf states. Many of your capitalist poster children (Germany, South Korea) engage in interventionism, state underwriting, and fund public services to an extent that US conservatives would regard as unacceptable "big gubmint": the Swiss Federal Railways are publically owned, and the best in the world.

I for one would rather that elected governments, rather than the Gates Foundation, funded attempts to improve healthcare in the developing world. I would rather that media tycoons were unable to exploit the world's banking system in order to escape corporate taxation, or switch their nationality to suit their latest grab for power. Rupert Murdoch doesn't pay my bills. Nor does Richard Branson. And we are no longer a plutocracy. (Although sometimes I do wonder whether Microsoft's licensing policy takes its cues from the feudal system.) But to discuss the details of such things with ideologues is like playing chess with a block of concrete.
posted by holgate at 7:39 PM on July 4, 2001

Is it a fundamental tenet in conservative argument that when confronted with real issues regarding capitalism's flaws the conservative must trumpet how "socialist" and futilely utopian your fellow debater are.

No it isn't. I never queried those who are anti-capitalist about where a so-called Utopian, perfect socialist society exists. Yet again and again, this is the debating trick of those who argue against capitalism. You've got it backwards.

Yet not ending there either, but also parroting the propaganda of true belief that unhindered capitalism can do no wrong.

I never said that either. You only apparent skill is attempting to put words in the mouths of those with whom you disagree.

ljr: You're an unreasonable fanatic.

And you are simply unreasonable.

many of the more highly market-orientated are also those with restrictions on individual freedoms that few "libertarians" would accept

Yes they do, much to their discredit. This fact, however, says nothing about the merits of capitalism versus any other economic system however, it only is an expression of the political will of those nations. If a nation willfully chooses a certain path that is less than optimal, that is their own failing. Furthermore, I never denied that all nations have a mixed economy to one degree or another - if you actually read what I wrote you would know that.

public services to an extent that US conservatives would regard as unacceptable "big gubmint"

Ah yes, all American conservatives are stupid and talk funny. How clever of you.

the Swiss Federal Railways are publically owned, and the best in the world.

Those who pay for them but do not use them might disagree with your assessment.

I for one would rather that elected governments, rather than the Gates Foundation, funded attempts to improve healthcare in the developing world.

Elected governments have no income! They can't pay for anything without taking funds from their citizens by the threat of force. The Gates Foundation received every dollar it has through voluntary action. And yet you prefer government. You apparently have a very low opinion of the value of your fellow citizens efforts.

But to discuss the details of such things with ideologues is like playing chess with a block of concrete.

And more cheap shots. How tiresome.
posted by ljromanoff at 8:24 PM on July 4, 2001

ljr: you are not only an ideologue: what's worse, you are dull. You have nothing other than stock answers, regardless of the issues at stake, and you respond to fact with opinionated speculation.

Cheap shots? Well, the market decides what you're worth.
posted by holgate at 3:56 AM on July 5, 2001

Hey, no one promised you a Utopia. Still, stacking up capitalism's successes against its failures would produce a result more lopsided in favor of capitalism than if the L. A. Lakers took on my elementary school basketball team.

Care to explain this?

Yet again and again, this is the debating trick of those who argue against capitalism. You've got it backwards.

That's what I said. Are you suggesting that a socialist engaged in debate prefaces her argument with "Now I know you'll think everything I have to say from here on out is ridiculously Utopian, but. . ."? What exactly are you saying? It's known near and far that the quintessential response to one's socialistic leanings is "Utopia. Now wouldn't that be nice." What exactly do I have backwards?

Elected governments have no income! They can't pay for anything without taking funds from their citizens by the threat of force.

And it's a good thing the libertarians have yet the chance to strip democracy of its essence--i.e. the people are (supposed to be) the very reason of democracy's necessary entourage of the public servicing bureaucracy that the government roleplays. Is supposed to be. . .in a utopian setting of course.

The government in a democracy is patently supposed to be good. Yet somehow, as corporate/capitalistic influence has played an increasingly greater and sinister role in how "democracy" is run, this inexplicably has become just what the libertarian/conservative position touts of capitalism as the palliative that civilization has always been ripe and waiting for. Yet if the capitalists are running that which has been mandated by the US Constitution to be of, by and for the people why then the issue you take that the government only takes what it can by the threat of force? Is this a circuitous route to anarchy? Indeed, an anarchy in which the corporations (who can do no wrong) have been yielded all the control and no longer do the poor or the minority have an equal say with those who are able to purchase larger chunks of an ever shrinking portion of the unstaked portion of the pie? And why should they have any entitlement in that pie when it would seem that the going (timeless) conservative argument for why one would live with severe unsatisfied want would be that they are lazy, uneducated, have poor credit ( a true sign of a worthless citizen) and have no eagerness to jump through capitalistic hoops to attain the greatness that those born into more successful genetic lines and financially successful names can get a pass?
posted by crasspastor at 4:06 AM on July 5, 2001

Granted the link isn't American and those engaged in the debate at hand don't necessarily fall under the protection of the US Constitution. . .but I think my argument still stands. ; )
posted by crasspastor at 4:12 AM on July 5, 2001

ljr: you are not only an ideologue: what's worse, you are dull.

Fine, you find me dull. I find you obnoxious and ignorant. Whatever.
posted by ljromanoff at 5:08 AM on July 5, 2001

Having trouble with someone prepared to question your fundamentalism? Really, insults can't patch up a threadbare argument.

The idea that governments have no income without extortion is simply propaganda. As Alexander Hamilton noted:

Money is, with propriety, considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions. A complete power, therefore, to procure a regular and adequate supply of it, as far as the resources of the community will permit, may be regarded as an indispensable ingredient in every constitution. From a deficiency in this particular, one of two evils must ensue; either the people must be subjected to continual plunder, as a substitute for a more eligible mode of supplying the public wants, or the government must sink into a fatal atrophy, and, in a short course of time, perish.

What's more, a stable and democratic government can be a source of income in itself, because as a common guarantor of property, it can regulate against abuses and, for those instances in which long-term stability is more important than short-term profit, generate income from estates held in trust.

I'm reminded of the Monte del Paschi, the bank of the city-state of Siena and one of the oldest banks in the world, which was guaranteed by income from the city's grazing lands near Groschetto. For the bulk of its existence, it offered loans without profit, because the natural increase of the sheep on public land would compensate, the good years offsetting the bad. It's that kind of thinking, even now, that provides the economic basis for a public-sector pensions (Social Security) system: the consent vested in government for the protection of individual property can be manifested in a way that guarantees that property over time. It's a stewardship, and it's something that most of the developed world finds acceptable.
posted by holgate at 5:22 AM on July 5, 2001

Having trouble with someone prepared to question your fundamentalism? Really, insults can't patch up a threadbare argument.

I agree. Maybe you should stop slinging them.

The idea that governments have no income without extortion is simply propaganda.

Governments can acquire income in numerous ways. It should be the obligation, or at least the goal, of government to do so in a way that minimizes the economic cost of the acquisition of income and does not require the simple confiscation of income under the threat of the loss of liberty. The income tax fails both these tests miserably.

It's that kind of thinking, even now, that provides the economic basis for a public-sector pensions (Social Security) system: the consent vested in government for the protection of individual property can be manifested in a way that guarantees that property over time.

It is naive to believe that public sector pensions provide any guarantee of property over time. Social Security is a fundamentally flawed system in that it masquerades as an investment program (something which you have suggested that it is) when in fact in is merely the redistribution of income on a nationwide scale. While this redistribution may be structurally feasible provided certain demographic situations remain stable, there is no guarantee of that either. Any shift in the worker versus non-worker demographic will cause the system to collapse - which is a situation the U.S. system is growing nearer to with every passing year. The result is catastrophic system failure.

Furthermore, public pension systems return on said investment is far below what a true return on investment would be for the same amount of principal even using the most conservative investment tools.

It's a stewardship, and it's something that most of the developed world finds acceptable.

At one time most of the developed world found the denial of sufferage to women and slavery acceptable. What the developed world finds acceptable is no argument about its actual worth.
posted by ljromanoff at 5:40 AM on July 5, 2001

Furthermore, public pension systems return on said investment is far below what a true return on investment would be for the same amount of principal even using the most conservative investment tools.

Except that the admistration costs of any of the private alternatives under discussion in the US would offset most of the benefit at an increase of risk, while enriching private finance houses. Which is why Paul O'Neill's executive mates are ponying up $20m to promote such schemes, just as Tony Blair's business chums are bankrolling the insane private finance initiatives in the UK.

The "pensions timebomb" itself is another case of manufactured consent, based upon the actuarial claims of those who wish to gain from its privatisation. (After all, "Crisis!" makes a better headline than "No Crisis".) It serves those who already benefit from inflating the costs of health and residential care for the elderly, or who wish to use early retirement as a tacit age discrimination. Others suggest a different state of affairs, based upon the inter-generational transfer of wealth, the tendency of older people to continue work simply because they're healthy and enjoy their jobs, and the emergence of more flexible patterns of employment.

I'd be truly interested to hear of your alternative to income tax, given that one of my deep grouses with British governments over the past 20 years has been their shift towards indirect taxation, which has a greater marginal impact on the poorest.

(And how precisely is it "confiscation"? If you don't consent to a income tax, you're not forced to make yourself liable for it. The global market, surely, should provide more attractive alternatives for those wishing to benefit from competitive personal tax rates?)

At one time most of the developed world found the denial of sufferage to women and slavery acceptable. What the developed world finds acceptable is no argument about its actual worth.

Apples and oranges.

If we're discussing modern political economy, then what is acceptable in practice is precisely an index of its worth: the ballot box will decide as much as the market. (All systems are equally valid while they remain theories.) And it's frankly an insult to the people of western Europe to assume that they're living under some kind of "false consciousness".
posted by holgate at 6:53 AM on July 5, 2001

Why do I have the urge to go into the other threads and shout "Fight Fight Fight" until we all come here and gawp?

I prefered it when Holgate was slinging insults, MeFi God and comedy genius, you married Holgate?
posted by fullerine at 7:04 AM on July 5, 2001

Except that the admistration costs of any of the private alternatives under discussion in the US would offset most of the benefit at an increase of risk

Sorry, that's wrong. Any index fund will have nearly zero administrative expense and will vastly outperform Social Security returns, and have done so for decades. Only the most badly mismanaged fund will underperform Social Security.

The "pensions timebomb" itself is another case of manufactured consent, based upon the actuarial claims of those who wish to gain from its privatisation.

While that might be true in the UK (although I doubt it), it is certainly not true in the U.S. The number of workers versus benefit receivers continues to drop, and will continue to do so. Consequently, Social Security taxes continue to rise in order to show any sort of return at all to Social Security recepients. This problem will only worsen and will likely result in total system failure within 25 years.

I'd be truly interested to hear of your alternative to income tax

Any tax that taxes consumption rather than income or earnings is preferable economically. However, there need not be any replacement at all. Simply eliminate the income tax all together (which only represents 1/3 of U.S. Govt. revenue) and limit spending to reflect Constitutionally mandated functions of the government only.

(And how precisely is it "confiscation"? If you don't consent to a income tax, you're not forced to make yourself liable for it. The global market, surely, should provide more attractive alternatives for those wishing to benefit from competitive personal tax rates?)

That would only be true if most nations had very open borders and very simple requirements for citizenship. We aren't there yet. Furthermore, I find that argument unconvincing anyway as it invites government tyranny. Any opposing view would simply be rebutted with "if you don't like it, leave."

Apples and oranges.

If we're discussing modern political economy, then what is acceptable in practice is precisely an index of its worth.

It's not apples and oranges if you're using the idea of what the developed world finds acceptable as a justification and validation of your viewpoint, which you were. Whether or not a view is well accepted does not alone make it the correct view.
posted by ljromanoff at 12:22 PM on July 5, 2001

what is acceptable in practice is precisely an index of its worth

If tyranny doesn't bother you, I suppose. Where do people's rights enter into this equation? Or are rights also determined by what the majority finds "acceptable"?
posted by mw at 12:56 PM on July 5, 2001

In my tired, drunken, dehydrated post party ramble last night, I neglected to underscore one of my points, which I think bears repeating. It's really a question actually. At risk of it sounding rhetorical I ask (I ask because I do not know the answer--not that it is my wish to lead with it):

If we are to agree that democracy is good (good that it attempts to guarantee the greatest good to the greatest number of people) and that that democracy must be scaffolded with a certain level of administration, what then would be the happy medium where all parties, the rich, the middle and the poor all have a voice with equal volume?

I ask now, perhaps a little more leadingly: If it is said by some of those here that a general capitalistic system provides the greatest good to all people, provided there is a small and fairly innocuous role for government to play, but keeps itself out of the affairs of business; who then protects the rights of those who are not in business--who do not have the wealth to buy counsel when a company for instance might pollute a water supply say?

A company protects its investments and capital with security, insurance, paid specialists and lawyers etc. Small people (yes I said small people) do not have that luxury. Were it not for the EPA in verifiable instances watching out for that greater good, say in Libby Montana, who would have done it? A democracy builds and maintains institutions to protect its capital and "investments" too. Who's right then is it, to come in, speaking on behalf of business and take that away from the stupid little poor people of Libby because it impedes profit? Which if we're to take ljr and aaron's word, nothing bad can come from the pursuit of profit and anything a government does to hinder that process is tyrannical and harmful to the human condition as a whole.

Which one must ask. . .why isn't there much furor from your sides of the fence for corporate tyranny? The kind that runs unchecked and beholden to no one but investors?
posted by crasspastor at 2:20 PM on July 5, 2001

why isn't there much furor from your sides of the fence for corporate tyranny? The kind that runs unchecked and beholden to no one but investors?

My answer is that corporations hold a radically different kind of "power" than governments. Governments operate by force. Don't follow their rules, go to jail (sorry!). Corporations (in a proper, fully free society) have no power but that which we give it by our voluntary transactions with it. As Ayn Rand put it, it is the difference between the dollar and the gun.
posted by mw at 2:58 PM on July 5, 2001

aaron: I expected better of you than Freeper posturing. Ah well. Do come back when you have something useful to contribute, won't you?

And quite how you come up with "pathetic personal insults", I do not know. I have been called "ignorant" and "obnoxious" by someone who has responded to numerous references with personal opinion, and who has consistently turned discussions into opportunities for abuse. I called him an ideologue, which he is, and his arguments dull and monotonous, which they sadly are. That is hardly an insult, but simply an encouragement to come up with something better. (At least you're usually interesting, regardless of whether I disagree with you.)

If you actually want insults, I'm afraid you'll have to pay the market rate.
posted by holgate at 3:30 PM on July 5, 2001

Anyway.

Any index fund will have nearly zero administrative expense and will vastly outperform Social Security returns, and have done so for decades.

Sorry, you're wrong. It doesn't scale. Both proposals currently under consideration by Paul O'Neill's (politically skewed) panel cost a great deal more than the existing system, particularly when you factor in the transitional costs of moving to individuated accounts. And to advocate following the index exposes the actuarial duplicity of such proposals:

Advocates of privatization claim that investing in the stock market will yield an average annual return of 7 percent over the next seventy-five years, which approximates its performance over the past seventy-five years. But that claim cannot ber econciled with the projection by the Social Security Trustees that U.S. economic growth will decline from its average of roughly 3.5 percent during the past seventy-five years to 1.6 percent over the next seventy-five. It was this forecast that led to concerns about a Social Security shortfall in 2032 in the first place. Privatization advocates cannot have it both ways. If the market continues to yield 7 percent returns for the next seventy-five years, the economy will have grown much faster than 1.6 percent annually, and Social Security will be so flush with increased FICA contributions that there will be no need to fix a system that isn'’t broken.

Any tax that taxes consumption rather than income or earnings is preferable economically.

To borrow from AmEx, citizenship has its rewards: the ability to command a wage is a function of the social conditions in which you work. Were you in a less stable country, or one with a different economic regulations, you wouldn't earn as much, nor have as much spending power, even after tax.

Whether or not a view is well accepted does not alone make it the correct view.

Oh, the wonders of selective quotation. You (like mw) are oh-so-typically ignoring my qualifier: "If we're discussing modern political economy". Not slavery, not suffrage.

What do I mean by "modern political economy"? In general terms, the state of affairs in the developed, democratic world: a situation whereby the electorate has the right to choose between competing models of taxation and public expenditure, within properly established national criteria. (For instance, as the Swiss Constitution puts it: "To the extent that the nature of the tax allows it, the principles of universality and equality of tax treatment and of taxation according to economic capacity shall be followed." )

Macroeconomics in the developed world is a praxis: its value rests in how it values, and it is valued by, those it affects. (Or, more simply: "It's the economy, stupid.") In that regard, the assumption that Europeans, with their comparatively high levels of taxation and expenditure, are subject to state tyranny and suffering from some kind of false consciousness is patently not the case. There is no seething opposition to the state funding of the Swiss train system. There is no desire to replace the NHS with personal health insurance. And the political clout of the libertarian fringe is even more insignificant than the self-important squawk of its advocates in the US.

But this is tiresome, and I'm really in no mood to respond to petty insults.

Quoth Cibber to Pope, tho' in Verse you foreclose,
I'll have the last Word, for by G-d I'll write Prose.
Poor Colley, thy Reas'ning is none of the strongest,
For know, the last Word is the Word that lasts longest.

posted by holgate at 3:44 PM on July 5, 2001

ljr, you ROCK.

Thank you. Carry on.

Thank you very much. This almost makes up for being called a cancer last month on MetaTalk.

In my tired, drunken, dehydrated post party ramble last night

Hey, crasspastor, I knew there must be some reason you were even more incoherent than usual!

who then protects the rights of those who are not in business--who do not have the wealth to buy counsel when a company for instance might pollute a water supply say?

One does not have to be 'in business' per se to be in, and benefit from, a capitalist society. In your specific example, the answer comes down to a matter of property rights. Someone owns the water supply, whether it is a private one (perhaps owned by a township district or housing community) or public (as is the usual case.) If a company pollutes the water supply it does not own, it is violating the rights of the property owner, and will pay the consequences under the law, not unlike if someone takes a sledgehammer to my car. They are damaging my property, and I am entitled to some recourse.

Now where this gets tricky are "tragedy of the commons" situations, such as when a company is polluting the air rather than the water. But these situations are generally pretty limited.

Which if we're to take ljr and aaron's word, nothing bad can come from the pursuit of profit and anything a government does to hinder that process is tyrannical and harmful to the human condition as a whole.

Once again you are trying to put words into my (and aaron's) mouth. I never have suggested there is anything perfect or Utopian about corporations or that everything that government does is tyrannical. I am not an anarchist. Corporations acting in their own interest lead to the greater good on the whole, but that does not mean that there are examples of corporations who would gladly subvert the free market and others rights in order to get ahead. This is not necessarily a failing of capitalism but of human nature - of course, in as much as capitalism being an organization of individuals it is subject to the ethics of those individuals, and therefore can be corrupt. But this is true of all economic systems.

Which one must ask. . .why isn't there much furor from your sides of the fence for corporate tyranny? The kind that runs unchecked and beholden to no one but investors?

Corporations are less beholden to their investors than they are to their customers. Being a customer of any corporation is a voluntary action that can be entered into and exited at will. This is the difference between government power and corporate power.
posted by ljromanoff at 3:46 PM on July 5, 2001

aaron: I expected better of you than Freeper posturing. Ah well. Do come back when you have something useful to contribute, won't you?

Hey, who made you principal of the line?

And quite how you come up with "pathetic personal insults", I do not know. I have been called "ignorant" and "obnoxious"

Yes, you were. After you called me dull and suggested that I am unable to think freely. You started with the mudslinging not me. There's no point trying to revise the history of this thread when it's available for anyone to read.

Sorry, you're wrong. It doesn't scale. Both proposals currently under consideration by Paul O'Neill's (politically skewed) panel cost a great deal more than the existing system, particularly when you factor in the transitional costs of moving to individuated accounts.

I find the argument that we must keep Social Security going despite it's impending doom because it would cost even more to abandon it very specious. It assumes that we should somehow continue to make payouts without continuing to collect the tax that pays for them. Why should we do that? Here's my plan: Everyone 50 or younger will get no benefits or have to pay into the system any longer. Everyone else will get benefits paid out from the existing Social Security budget and the general budget until they have left the system through death. While this is the metaphorical equivalent of slamming on the brakes of a speeding car, it is preferable to slamming full speed into a brick wall, which Social Security is doing.

The fact is that had those people who are now at retirement age not had 5 to 15% of their income taken to fund Social Security, they could have privately invested their money in any number of ways with varying risk that would provide them with a much better retirement income than Social Security ever could.

To borrow from AmEx, citizenship has its rewards: the ability to command a wage is a function of the social conditions in which you work. Were you in a less stable country, or one with a different economic regulations, you wouldn't earn as much, nor have as much spending power, even after tax.

You've made this claim before yet failed to back it up with any realistic scenario where the elimination of the income tax would result in a poorer, less stable society. To suggest that I would be poorer if the government WASN'T taking half my income is utterly absurd. First of all, there would be the obvious fact that I would have more of my earnings. Secondly, those earnings could be used for capital investment and debt reduction, resulting in a stronger economy, not a weaker one.

Oh, the wonders of selective quotation. You (like mw) are oh-so-typically ignoring my qualifier: "If we're discussing modern political economy". Not slavery, not suffrage.

The modifier is irrelevant. You are attempting to use the public will as a validation of the correctness of your viewpoint. It can not be one.

But this is tiresome, and I'm really in no mood to respond to petty insults.

Neither am I, which is why I welcome your absence.
posted by ljromanoff at 4:07 PM on July 5, 2001

Hey, crasspastor, I knew there must be some reason you were even more incoherent than usual!

May I be the first to point out that LJR isn't in the sport of pitching an unprovoked insult!

I know that what ever issues I have happened to bring up here have seemed to play second chair. Which is fine. But. . .

Once again you are trying to put words into my (and aaron's) mouth. I never have suggested there is anything perfect or Utopian about corporations or that everything that government does is tyrannical. I am not an anarchist. Corporations acting in their own interest lead to the greater good on the whole, but that does not mean that there are examples of corporations who would gladly subvert the free market and others rights in order to get ahead. This is not necessarily a failing of capitalism but of human nature - of course, in as much as capitalism being an organization of individuals it is subject to the ethics of those individuals, and therefore can be corrupt. But this is true of all economic systems.

. . .is fine too. Yet you don't elucidate what the role of the arbiter of the public good is left to do (this assuming that you believe their should be one). Hardly can they (we) depend on the good graces of the Bill and Melinda Gates foundation to come through on a regular and as needed basis. Both providing and stealing are products, symptoms if you will, examples of human nature. Two of the many constructs of society happen to be government and economy. Where then is the safety switch when corporations fail the public good in this world of rampant capitalism you envision, accountable to no oversight? Who is left to be the objective final word as to how property rights, water rights, and the responsibility of overall (that word again) stewardship is doled out? Name one corporation that works in an interest outside of their supply and demand/innovation/speculation/profit sphere? Which would go into debt insuring that the world will be a better place, by repaying damages (or even avoiding damage) that may or may not come as a side effect of their particular product? We cannot entrust to corporations what just any old capitalist/republican/conservative/fascist/ happens to think are worthless issues. BTW not calling anyone a fascist
posted by crasspastor at 5:00 PM on July 5, 2001

And finally to perhaps shake hands (after all we're here to discuss not hate each other--[easier said than done sometimes]). I must send out the props to AT&T and the millions they blew on the absolutely most amazing fireworks display I've ever seen. 25 minutes of corporate funded ecstasy!
posted by crasspastor at 10:33 PM on July 5, 2001

tsk. Shame, really. I was back here in the lurking-room only section with many of the same questions as crasspastor.

It seems to me that a model such as ljromanoff's results in increased diffusion of wealth and power to those with the most capital.

As an ex-stock broker, I can assure you that it's "you scratch my back I'll scratch yours," where the rich clients are spoiled with preferrable treatment (no news here, I'm sure). The market may be efficient, but by a process which inevitably means payoff to the big players. Efficient doesn't mean fair; one of the first rules I learned was "when the little guy starts buying, start selling."


Also, ljromanoff suggests we go back and read the thread, which I've done, and it appears that the first mud lob was his, to elpapacito: it seems everything you claim to know about capitalism you learned from an old issue of Pravda. (Note that was elpap's last post on this thread.) Such mocking is a tactic that perhaps silences those of us, like myself, who are here not so much to argue, least not to hate, but to actually learn.
posted by spandex at 6:08 AM on July 6, 2001

Why is it that, whenever insults are flying, ljr seems to be part of the thread?

Just asking...
posted by jpoulos at 8:24 PM on July 6, 2001

Hey, crasspastor, I knew there must be some reason you were even more incoherent than usual!

May I be the first to point out that LJR isn't in the sport of pitching an unprovoked insult!

I guess the phrase "unreasonable fanatic" doesn't ring any bells for you?

Name one corporation that works in an interest outside of their supply and demand/innovation/speculation/profit sphere?

There a plently of corporations that have charitable foundations and or contribute huge amounts ot other charities. You already named one.

into debt insuring that the world will be a better place, by repaying damages (or even avoiding damage) that may or may not come as a side effect of their particular product?

Again, if a corporation causes damage to another it is liable for that. This is a rather uncomplicated property rights issue.

We cannot entrust to corporations what just any old capitalist/republican/conservative/fascist/ happens to think are worthless issues.

BTW not calling anyone a fascist

Yeah, sure you're not.

Also, ljromanoff suggests we go back and read the thread, which I've done, and it appears that the first mud lob was his, to elpapacito: it seems everything you claim to know about capitalism you learned from an old issue of Pravda.

That was not meant to be insulting, but an attempt to point out to that fellow that he was falling for the most absurd falsehoods and cliches slung about by the enemies of capitalist thinking. Not just what he was saying, but how he said it was straight out the silliest pro-socialist propaganda.

Why is it that, whenever insults are flying, ljr seems to be part of the thread?

Maybe because, despite the regular claims otherwise, the MeFi orthodoxy really doesn't like their viewpoint challenged? That would be my guess.
posted by ljromanoff at 8:42 PM on July 7, 2001