It was a QUOTE from Sowellian economics
@ Bortrun
I agree with all you have said. And it also mostly in accord with what Steve have said, to approach each thing in terms of what is the best known practice, what could be the best specific solution, without the rhetoric of “isms”. But I also am interested in understanding all this isms, at least because all people and especially politicians always use them.
I am also in accord with your:
“Inequality is necessary to reward people for doing more difficult or more dangerous jobs, or simply for working hard or for having better ideas or abilities than other people. But it has to be within reason, or I don’t think society can function well.”
If only there were a way to define what “within reason” means.
Is this quote: “Responsible academics now realize that progressive policies that promoted legalized thievery through “progressive taxation” 100 years ago and the advent of the welfare state of the 1930s with FDR’s “New Deal” and LBJ’s “Great Society” of the 1960s have done such diabolical mischief to my people that sociologists have made the observation that the black family during the horrors of slavery was a stronger more cohesive unit than the contemporary black family, particularly since the 1960s.”
A joke?
Commasplice, to find out if something is a joke, you could take the approach of reading more about it. In the case of Liberty and Tyranny, you told people not to read it. Can you remind us of your reason for discouraging people from reading that book?
Ilya, by reading, you too can find out more about what Sowell is actually saying, (and you can read the proof he offers) rather than ridiculing a position taken by someone who writes about why, as a black man, he finds Sowell’s writing compelling.
@knowitsome I’m a very busy person and I simply don’t have the time to investigate the quote right now. I only wanted to know if the quote was satirical or if the author meant what he said.
My reasons for not recommending Liberty and Tyranny are, I thought, clear. Books by the likes of Levin, Olbermann, Carville, Hannity, Franken, Coulter, etc are basically political propaganda. As such, they have limited to no value for the reader except, perhaps, reaffirming the reader’s political view. Moreover, when the author allows an endorsement of the book from the likes of Rush Limbaugh the reader should be doubly suspicious. They should be suspicious because Limbaugh is a disingenuous political hack with no integrity and no self-respecting author would willingly associate with him.
Instead, I would recommend that people would be better spent reading other authors who seek to persuade in a honest and straightforward way . . . or simply read a book that adopts a neutral point of view and serves to educate.
I think what you are saying, commasplice, is that you never even considered the idea of reading Liberty and Tyranny, but were willing to slam it sight unseen, mostly because you have a beef against one of the men who endorsed the book.
How many hours did you spend listening to Rush Limbaugh before you decided that you would not like to read any book he has recommended?
@knowitsome I’ve listened to Limbaugh more than I care to. Where I used to work it used to be played over the sound system every day. I have also listened to him occasionally in the past when visiting my father as my father will sometimes listen to Limbaugh.
So I don’t know what your point is or the reason for your apparent animus towards me. Are you some big Levin fan or something?
@Ilya,
Yes, defining “within reason” is a problem. I think that’s something societies have to work out for themselves, and different societies will have different answers. But we are developing a lot of statistical measures to help us, like the Gini coefficient.
I favor things like a Universal Basic Income in order to set a floor under everyone and ensure that everyone has the basic necessities (when combined with publicly funded health care and education). Some people may think this is impractical or overly idealistic, but I don’t agree.
http://bostonreview.net/BR25.5/vanparijs.html
I also think it’s important to have more of a stakeholder, rather than a shareholder, structure to corporations. I don’t think boards should represent only shareholders, but also workers, as well as possibly the government that incorporated the business in the first place. And the communities in which those corporations operate need to have a say as well. For example, I don’t think America’s industrial base would have been hollowed out if workers had board representation like they do in Germany. I grew up in Canada, but near the border with Detroit, so I saw what happened there, as well as in places like Flint. For corporations that do move their operations oversees, I think we should require them by law to pay their workers a living wage, even if the host government is not willing to require that.
I would add that I’m a bit of an internationalist, so I am in favor of wealthy countries providing a basic income for citizens in poor countries, adjusted for where they live, of course. And yes, the logistics of this would be difficult in some countries. But, considering that 10,000 children under 5 die every day from preventable causes (including simple lack of calories), I don’t think we have any ethical choice. For countries that don’t want to, or can’t, participate, I think we should just give all of their poor citizens enough money to pay for food, shelter, clothing, and basic medical care and education. Even if doing so requires us to give up some of our excesses.
Some will argue about a welfare trap, but welfare is only a trap if you have to choose between welfare and work. This isn’t welfare, it’s a guarantee that all citizens will have the means necessary to stay alive without having to beg or steal. It seems to me that this is something a reasonable society can provide. Others will use the scarcity argument, and claim that there simply aren’t enough resources in the world to provide everyone with a reasonable standard of living. I simply don’t agree that that is the case. I think a more honest argument would be that there aren’t enough resources to provide those in power with all the indulgences they want and also provide a minimum standard of living for everyone. That argument may be true. Even as average citizens of wealthy countries we need to think about this, because on the global scale, the average Canadian is extremely wealthy.
I think that over time we will develop better statistical measure and a more concrete definition of what constitutes a reasonable minimum standard of living, and what constitutes a reasonable level of inequality.
commasplice, my point is that the best time to make a comment such as "I highly recommend you steer clear of Liberty and Tyranny. I don’t understand why you’re reading polemics like that. " would be after one has actually read the book.
@KnowItSome, surely you don’t have to read every article and listen to every speech by a person before advising someone that they don’t need to bother with him/her. You can be familiar with a person’s output and generalize to the parts that one hasn’t personally read/listened to.
@Borton,
Yes, I agree with you, that one can form an impression of a person’s thinking by listening to that person, and can then generalize thoughts about whether to read more from that person. However, in this case, we have a person saying not to bother to read a particular book, because the book probably is a polemic. He assumes that the book is a polemic because the book was recommended by someone he believes to be devoid of integrity.
I am just glad that the person slamming the book had the integrity to point out that he had never read the book he does not wish for others to read.
@Bortrun,
Sorry for misspelling your name above.
This is interesting, what you say about a reasonable level of inequality. There are those who earn tremendous amounts of money in the sports and entertainment industries, as well as those who are able to sell books about their lives in politics, or give speeches about the same, thereby raking in what seem like ridiculously large amounts of money.
What would be the ways of limiting this kind of excess? I am not clear on how it would work.
Johnnie Depp reportedly was paid some 61 million dollars for appearing the fourth Pirates of the Caribbean movie. James Cameron seems to have netted at least a couple of hundred million on the making of Avatar. Al Gore was recently accused by the Daily Mail of pocketing some £3,300 per minute just to give a speech.
What would be the suggested ways of reigning in the excesses of those in the entertainment, sports, and politics industries?
I see your point about the book. I thought maybe the poster had read other books/essays by this person. Still, if the author is well known for being a polemicist, and the book is recommended by a famous polemicist, then it might not be unreasonable to suggest giving the book a miss to someone who doesn’t want a polemical book. It was a while back in the thread, but I thought that the poster recommended some other book instead. I think that as long as someone acknowledges they haven’t read the book, it’s cool. You get a lot of people, especially on the internet, passing judgment on things they obviously have not read.
On a side note, I’m not really sure what’s wrong with a polemical book. Most advocacy books are - people have a point of view after all. As long as people don’t play fast and loose with the facts, or the actual positions of their opponents.
Well, celebrities (sports stars, movie stars, pop stars, etc.) are a special case. They do not constitute a majority of the wealthy, and they are not the people primarily responsible for the concentration of wealth. Most of them just end up blowing their money anyway, so you don’t end up with a lot of concentration of wealth problems 
And the examples you give are not typical even for celebrities. James Cameron is the most financially successful filmmaker on the planet. Johnny Depp is one of the most famous movie stars appearing in a very popular franchise.
The way to limit ridiculous executive compensation is to have workers either control, or have a significant voice in, the corporations they work in. You’ll notice that no western country has anywhere near the executive compensation you have in the United States, and I don’t think any other country embraces only-the-shareholders-matter capitalism like the US has.
I mean, the US had a fairly typical (for a western country)_level of inequality in the 50s through the 70s as I understand it. It was largely the Reagan and post-Reagan period that has created the current situation.
The United States is a huge market, and American entertainment is global, so I think it’s inevitable that globally famous movie and pop stars from the States will become very wealthy. That’s not really a problem.
There do seem to be a lot of people who think that wealth in the hands of entertainers is perfectly fine, but wealth in the hands of others is greed. It is funny, because entertainers, most of the time, can enrich our lives in rather small ways, not large ways. I might see a movie and it might move me emotionally . It might. And once or twice a decade I will see a movie or a show which shakes me up in a profound way, but that is terribly rare. Mostly movies or sports games are only useful to me as momentary entertainment. YET… the wealth those people accumulate is accepted, honored, revered, overlooked by regulators and the taxman, not considered a problem.
But let someone make a dialysis machine which would save my mother’s life, or let someone invent software and hardware which will allow me to communicate with others all over the world, or let someone make an airplane which allows me to travel affordably to see my family, and all those people and the companies they head up are considered greedy, and very often even evil. Those are the people who enrich my life and make our world dynamic, and who provide opportunities and freedoms for me and for everyone else. Given that those who run companies help me in many ways, and entertainers do very little to enrich my life, I don’t like to see so much punishment meted out to just the one group.
As for what we can do, I would suggest having a much more progressive tax system. It’s fairly well known that with all the loopholes in the tax system, very wealthy people actually pay a relatively low percentage of their incomes in tax. Warren Buffet is famous for saying that he pays a lower percentage of his income in tax than his secretary does.
I would have a strong inheritance tax. I would not tax a person’s estate, but I would put a very high tax on inheritance above a certain level. So, if you have a billion dollars, you’d better find quite a lot of people to leave your money to or most of it will be taxed back. If you don’t do that, you end up getting a new aristocracy (which I believe was the reasoning behind inheritance taxes in the US in the first place.)
So, that is how I would limit inequality. A progressive income tax system with very high rates on high levels of personal income, inheritance taxes, a universal basic income which everyone receives and to which everyone contributes, public health insurance to which everyone contributes, public funding of education to which everyone contributes. I would not tax business very heavily. I would probably not have a wealth tax as it just seems to difficult to administer (see the situation in France).
Executives and large shareholders would not be able to make the money they do if workers had a strong say in how their companies were run. I think the figure now is that in the US, the average executive makes more than 400 times the salary of the average worker. In many countries, it’s just 30 times. Even in the UK, I think it’s just 80 times.
I also think the quality of a country’s democracy is important. I think that Parliament or Congress should have proportional representation and that politics should be largely publicly financed I think that more than two parties should be active in a country, so that a variety of positions can be advocated in the public arena.
It’s not that hard to limit inequality. Pretty much every other developed western country does at least a decent job of it. Just look at a list of countries by Gini coefficient.
I see. You think that people bash executives but let entertainers off the hook. I don’t think entertainers get special treatment, but there it is. If you think you can have a sustainable society when executives make 400 times the salary of their workers, then that’s what you think. I don’t think you can have a functional society that way.
My point was that, outside of having a progressive tax system, you can’t stop celebrities making lots of money simply because that’s the nature of being globally famous. If you make a movie, and hundreds of millions of people pay to watch it, of course you’re going to make a lot of money. Similarly the head of a major global corporation is going to make lots of money.
If you really wanted to stop that “celebrity” factor, you’d have to have tax rates of 75% or higher on very high levels of income, for example 75% on personal income above 1 million. I’m actually fine with that, but I don’t know how broadly popular it would be.
Similarly, nobody wants to stop the inventor of a useful medical device from making a lot of money. Nobody wants to stop the founder of a successful corporation from making a lot of money. Stopping people from becoming wealthy is not the point. I don’t think people consider the inventors of dialysis machines to be greedy.
But, if the design for that dialysis machine is bought by a company, and it is manufactured in a 3rd world country where people are paid less than a living wage and are fired if they ever get sick or injured, and the company provides its home country workers with as little compensation as possible, even less than a living wage, and the executives and shareholders pay themselves hundreds of millions of dollars and live in gated communities so they don’t have to deal with the world they’re creating, yes, people might call that greedy.
Personally, I think it’s just a logical consequence of the system that is in place. I think the reason inequality is much lower in Europe is because political representation is usually proportional, publicly funded, and multi-party, and because the position of workers is much stronger and they have much more control over the corporations they work for.
knowitsome,
Thank you for your latest and thought provoking comment.
bortrun, I would like to see the source of information that says that the average executive earns 400 times the salary of a worker. If an average worker earns $5,000 a month that would mean that the average salary of an executive in the US is $2 million per month. I don’t think so.
The bulk of taxes are paid by the people with the highest incomes, Buffet notwithstanding.
The problem is largely what the government does with the taxes it collects.
Inequality in the US is largely a function of unequal education. The reasons for that are many, but family break down is a big part of it. Note the 350% increase in after inflation cost of K-12 public education and the 700% increase in the incarceration rater since 1970. I do not trust government to use our money wisely. I expect government’s to waste “other people’s” money. It is just human nature.
Education is the key to achieving equality and government in the US is messing up badly. Nor is there any relationship between the number of political parties and the education level of a population.
Steve, I should have said average CEO versus average worker. Those figures are pretty widely available and are widely quoted.
I trust corporations, over which the public has no control, much less than I trust the government, over which we have no control.
I am not anti-business or anti-money, but I am opposed to a system where corporations are responsible to no one but their shareholders.
I do not think the problem in the US is only education. You can’t have an economy where everyone has a high-paying knowledge job. You have to have regular jobs that pay a decent wage.
And yes, the bulk of the taxes are paid by the wealthy - they earn all the money. From what I’ve seen of the stats in the US, the bottom 50% owns no wealth and earns something like 4% of the country’s income. How much tax could they pay? The richest 1% earns between 30 and 40 percent of the country’s income. 85% of stocks are owned by the wealthiest 10%. Who else has money to pay taxes?
the inequality index in the US is 45, while the EU average is 31 or 32. That has consequences. Some people obviously don’t have a problem with this sort of thing, and that’s fine. Nobody knows what the optimal level of inequality is.
While you don’t trust the government, presumably you trust it to enforce health and safety standards in the workplaces and so on. I think we’ve come a long way since the days of the Dickensian workhouse and I think that’s mostly due to the labor movement and to changes in government policy and regulation. The workhouses never really went away though, they were just moved overseas.