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Claims that intelligent left-wing bloggers couldn't possibly agree with
We don't take steps to redress inequalities of looks, friends, or sex life. We don't grab a kidney from you to save someone's life, even though that health difference was unfair brute luck. Redistribution of wealth has some role in maintaining a stable democracy and preventing starvation. But the power of wealth redistribution to produce net value is quite limited. The power of wealth creation to produce net value is extraordinary. Most of America's poor are already among the best-off of all humans in world history. We should be putting our resources, including our advocacy and our intellectual resources, into wealth creation as much as we can.
That's me, quoting me; I pulled the material from the inner guts of Typepad software.
Posted by Tyler Cowen on June 21, 2007 at 07:05 AM in Philosophy | Permalink
Comments
Agreed! And the question now is -- how best to create wealth? And I suspect you believe it is something like sticking to, or amplifying the kind of property relations/ordering of economic sphere we have now. But here's the problem with that -- today, we utilize a tiny percentage of the human race's mind power for wealth. Most people have unthinking jobs. And I don't think that will change if we stick we the way things are. It seems like next quantum leap in the capacity to produce would be be created by a change in the ordering of the economic sphere that would free the bulk of humanity from the unneeded pursuit of survival -- a guaranteed basic income, a citizen's grant...Then we can talk about wealth creation!
Posted by: Prom.Theus at Jun 21, 2007 7:49:03 AM
Let's see....
"Most of America's libertarians are already among the best-off in after tax income of all humans in world history. We should be putting our resources, including our advocacy and our intellectual resources, into wealth creation as much as we can."
Posted by: Robb Lutton at Jun 21, 2007 7:50:26 AM
I may not be intelligent, but I am a left-wing blogger on occasion. And you are right I can't agree with these claims.
Even intelligent right-wing bloggers seem to believe in some strange two-phase world. Phase one is wealth creation, and takes place in the market: the wealth I end up with is apparently "my" wealth, created by me out of whole cloth from my own efforts. Phase two is wealth redistribution, and is carried out by government ("we") to reallocate that wealth generated in phase one.
This world, in which the state is the weapon of the envious poor, is not the one I see. Sure, the state may be the only mechanism the poor have to pursue self-protection, but it's not "ours": Robin Hood is the folk hero of wealth redistribution, and he was as non-state an actor as they come.
One other gripe: "The power of wealth creation to produce net value is extraordinary" is a tautology. Wealth creation is a social act, not an individual one. Societies create wealth, people don't.
That's a bit confused I'm sure, but it's the best I can do while eating breakfast.
Posted by: tom s. at Jun 21, 2007 8:04:44 AM
Societies create wealth, people don't.
Really? If you were on a desert island by yourself, you wouldn't build yourself shelter? Wouldn't grow crops? Wouldn't make fishing nets? Wouldn't improve these over time?
If you were doing these things, then even without society, your net worth would be increasing.
Posted by: Jody at Jun 21, 2007 8:19:42 AM
my idea is that wealth redistribution is not good (generally speaking).
but it is good to give everybody the same chances, expecially looking to the stuff that does not depend on merit and/or responsability.
let us say: basic education (and, why not, university education) and health care should be equalized for parity of chances and not for wealth redistribution (may be there is a way to equalize without growing a leviathan state or build up monstruous public structures like in Europe)
retiring system, instead, is based heavily on merit and responsability of the individual and should not be managed by public or state systems (except emergency and so on...).
so, even if I am not an intelligent left-wing blogger, I can agree with your statement.
but I am not sure that in US there is parity of opportunity for everybody.
neither in Europe, of course.
Posted by: Kerub at Jun 21, 2007 8:20:20 AM
"But the power of wealth redistribution to produce net value is quite limited."
http://select.nytimes.com/2007/06/19/opinion/19herbert.html?n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists%2fBob%20Herbert
Just to be clear, do you think providing health care to nine million american children is of limited value (especially considering the life-long health conditions and concomitant costs that would be avoided)? Or do you agree that the health care of nine million american children is of significant value, but instead have a more complex, economic argument about how putting money elsewhere would create even MORE value?
When you get away from the academic Rawlsian types and talk to real left-wingers in society I think you'll see that they are not very concerned with equality in the abstract and much more concerned with preventing a poor child from developing life-long diabetes and the resulting suffering and other costs.
Posted by: npopp at Jun 21, 2007 8:33:05 AM
"Really? If you were on a desert island by yourself, you wouldn't build yourself shelter? Wouldn't grow crops? Wouldn't make fishing nets? Wouldn't improve these over time?
If you were doing these things, then even without society, your net worth would be increasing."
Of course you would, but these things will only take you so far. The vast amount of "wealth creation" has been realized post agricultural societies. This was the basic starting point of the "growth revolution" in economics; why did incomes and wealth suddenly being to rise at unprecedented levels when they basically remained flat for thousands of years?
There is a limit to your wealth creation on this deserted island. It is not until you start populating the island, extracting raw materials, trading with neighboring islands, and getting the positive feedback from knowledge creation and technological advance that you will see a significant increase in your "wealth". I think that is the point the poster to which you posed the question was making.
Posted by: Matt at Jun 21, 2007 8:33:49 AM
But the power of wealth redistribution to produce net value is quite limited.
What does "value" mean in this sentence?
Posted by: alkali at Jun 21, 2007 8:34:04 AM
I am a moderate non-blogger (lapsed blogger, comment creature), but as it happens I was re-reading this, this morning:
Only 10 percent of big ocean fish remain
I understand that with "left-wing" and "wealth" discussions you are focusing in on particular policy contests ... but, to me the fishes thing is the best answer to "we should be putting our resources [...] into wealth creation"
The left-right contest is played with competing concepts of wealth. Certainly dollar-wealth isn't going to help us buy sushi when the fish are gone.
Posted by: odograph at Jun 21, 2007 8:45:52 AM
Shorter: wealth, like happiness, is too often redefined to win arguments.
Posted by: odograph at Jun 21, 2007 8:49:33 AM
It would seem to me that the common ground for 'wealth creation' and 'inequality reduction' lies in human capital and infrastructure - both demand increased investment. Better educated and healthier poor population would improve both. The question becomes how do you further these ends, but deviating answers don't necessarily reflect the right/left split on wealth creation/inequality, but rather the ability of the market/government to act effectively toward these goals.
I agree that the poor are doing great in absolute terms, but they are unappreciated assets, many with artificially low value due to neglect. Bottom line, a lot of people who could power wealth creation are falling into the cracks at the margins. Both morally and economically, it makes sense to sift through all of our human assets to locate drivers of wealth creation.
Posted by: Christopher at Jun 21, 2007 9:00:13 AM
odograph,
There is no shortage of cows. I wonder why.
Tom and Jody,
It's arbitrary and semantic to argue whether societies or individuals create wealth. Obviously individuals can create wealth on their own but benefit from network externalities in wealth creation of being involved in a large orderly society. I doubt anybody would disagree with that claim.
Posted by: josh at Jun 21, 2007 9:12:56 AM
"Robin Hood is the folk hero of wealth redistribution . . ."
Robin Hood was not redistributing wealth; he was returning wealth that had been stolen through unjust, oppressive taxes.
Posted by: Ragnar Danneskjold at Jun 21, 2007 9:18:12 AM
I like the Robin Hood analogy. He stole from the government and gave people their taxes back. Just like the Sheriff, the government has lots of land it keeps us from hunting on, extracting resources from (including at sea), and to top it off takes a huge sum of money in taxes, approaching 40%. It is a vast empire of wealth destruction.
Posted by: 8 at Jun 21, 2007 9:20:15 AM
I think the above is generally true but... It is completely wrong. The reason being is I think that the utility provided to an individual by a marginal unit of wealth decreases at a different rate than you assume. And of that utility a significant portion comes from a feeling of status that is confered by having "more" than others. So for the rich each additional unity of wealth provides relatively little utility and much of that utility comes from feeling successful/ having more relative to others, so that portion would not actually be dimminished by the government leveling taxes symetrically against the rich.
The same amount of wealth could be used by the less the well off to purchase things that offer comparitively great gains to utility. Like nutirtious meals, superior child care, hell even air conditioning and nintendo wii's.
Now of course redistributing does create disincentives to work which is inefficient, and many people do resent surrendering their autonomy over how their money is used, so there are some big down sides. Still, the fact that money is much better at buying happiness when you don't have much of it and bad at buying happiness when you have a lot of it makes it difficult for me to come down strongly against significant levels of flat out wealth distribution.
Posted by: Michael Foody at Jun 21, 2007 9:20:26 AM
Actually I think Mr. Hood stole quite a lot from the church. If my memory is right, he wasn't particularly discerning where the money came from.
"Steal from the rich, give to the poor, Dennis More, Dennis More."
Posted by: tom s. at Jun 21, 2007 9:29:18 AM
I felt a little bit bad about injecting fish into this, but I think Josh's sad comment tells me I was right to do so.
You know, as we close on 2008, the less intelligent right-wing blogs are going to commence the same dance about "environmental leftists." They well say, I'm sure that those "leftists" are out to stop our "wealth creation."
I can feel it in my conservative roots that wealth creation is good, but darn it, my wealth is _not_ in dollars alone, and the ocean is _not_ a freakin' feedlot.
Posted by: odograph at Jun 21, 2007 9:36:37 AM
As an aside, "idiocracy" was a cruel movie, but the image of a guy sitting in a trashed apartment, in front of a big screen TV, struck me as "Josh style" (right-wing blogger) success. If the TV's big enough, and the big gulps keep on coming ... then that "wealth creation" has worked, right?
Posted by: odograph at Jun 21, 2007 9:39:43 AM
If the TV's big enough, and the big gulps keep on coming ... then that "wealth creation" has worked, right?
What would you rather the guy on the couch do? Pick cotton all day in the hot sun?
Nobody has the authority to tell other individuals what to do with the leisure time that our unprecedented American wealth given us. (Oh, look at that guy just whacking at a small ball for hours--how pointless! Look at that girl playing the piano all afternoon--what a waste of time!)
Posted by: Ilsa Lund at Jun 21, 2007 10:06:54 AM
What would the effect of more government wealth distribution do to private wealth distribution (charities and such)? I recall reading somewhere that the US had a higher percentage of charitable contributions than other countries but have no reference for it and may have a faulty memory. Are there any studies on what could be crowding out of private charitable contributions? And would the government wealth redistriubtion program be any better than the current set of charitable organizations? More questions than comments ...
Although, after establishing a baseline standard of living (which may seem a bit extravagant to most people) I can see very wealthy people deriving a higher marginal utility from giving away an additional dollar (voluntarily, not through taxes - nobody wants to admit they "gave away" more money through taxes because then they look incompetent for not being able to hide the money better) than keeping it. Bill Gates to Warren Buffett - I gave away $X last year - what's that, you gave away $X-$1? Ha, ha Warren, looks like I need the money less than you. You must not be so rich. (Note: The above exchange is completely fictional and any resemblance to actual individuals is purely coincidental.) However, we do need a theoretical model of this behavior though so we know it could exist in equilibrium :) Anyone know if one exists?
Posted by: AZ at Jun 21, 2007 10:19:24 AM
Really? If you were on a desert island by yourself, you wouldn't build yourself shelter? Wouldn't grow crops? Wouldn't make fishing nets? Wouldn't improve these over time?
Really? How did you know how to do all these things? Did you educate yourself into this state in some unspoilt wilderness that was devoid of anyone and anything else?
Posted by: Chris Stiles at Jun 21, 2007 10:30:23 AM
Odograph,
The depletion of ocean fisheries (a very serious problem) has little to do with Mr. Cowen’s belief that the benefits of economic growth outweigh the benefits of wealth redistribution. It seems you incorrectly assume Mr. Cowen’s emphasis on growth somehow precludes him from supporting responsible action to protect fisheries (through tradable permits for example). I respectfully submit you are likely mistaken.
Posted by: Whit Stevens at Jun 21, 2007 10:46:04 AM
I felt a little bit bad about injecting fish into this, but I think Josh's sad comment tells me I was right to do so.
You know, as we close on 2008, the less intelligent right-wing blogs are going to commence the same dance about "environmental leftists." They well say, I'm sure that those "leftists" are out to stop our "wealth creation."
I can feel it in my conservative roots that wealth creation is good, but darn it, my wealth is _not_ in dollars alone, and the ocean is _not_ a freakin' feedlot.
odograph, you misunderstood Josh's point. Domesticated cows are not endangered because they are protected by private property rights; ocean fish are endangered because they are not.
And the proper regulatory regime for dealing with the latter market failure, while debatable, couldn't really be classified as "redistribution."
Posted by: Jim Copland at Jun 21, 2007 10:55:55 AM
I haven't seen any leftie yet try to explain why redistribution of (physical/monetary) wealth is justifiable
while redistribution of looks, charm, friends, or sex life, is not.
I'd appreciate it, cause that was kinda the point.
Posted by: Person at Jun 21, 2007 11:10:40 AM
There are an interesting span of comments there, but I am going go continue by comment-punditry by calling most of them "blithe dismissals."
People who respond with rote answers about property rights or fish farms don't know how well they've worked (not very well, really) in practice. They just saw a headline recently, that they can repeat, without reading past paragraph two.
I challenge you: have any of you taken action to protect those fishes, or to you just wave theoreticals in blog comments when the question comes up?
(FWIW, the best solution, in practice, is the ocean reserve, and I credit Mr. Bush for helping to create (so far) the biggest.)
Posted by: odograph at Jun 21, 2007 11:17:26 AM
