What's Fair?

by Russ Roberts on August 22, 2008

in Inequality

I’m struggling to get the best comments from the recent contest up in a new post. Shooting for Monday. Sorry for the delay. Meanwhile, check out this very interesting set of pictures from Macroblog that our contest inspired.

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{ 50 comments }

piperTom August 22, 2008 at 8:49 pm

I'm too late to enter, but I do hope someone noticed that the class of people we call "bottom 90%" is continually becoming better off, but they're supposed to be calling "unfair" because someone else has more*.

*that used be called envy before it became cool.

Mesa Econoguy August 22, 2008 at 11:50 pm

Given my past exam grades, I’d say a whole freakin week is a little slow, Professor Roberts.

C’mon. Do it or get off the pot, as they say…

SteveO August 23, 2008 at 12:48 am

I don't remember what the prize was?

Wasn't it a fully funded PhD track at GMU?

LowcountryJoe August 23, 2008 at 8:16 am

Looking at the charts on MacroBlog, I can't help but wonder if the tax rates are accurate. Does it include paying FICA, I wonder?

And then re-examining muirgeo's CCBP chart-find, it dawned on me the one truism of what drives wages/compensation…productivity. In the earlier period, the bottom 90% had productivity gains that outpaced the relative gains of the top 1%. In the second period, that trend had reversed.

Before muirgeo chimes in on what the meaning of productivity should be, he needs to think about the specific defination used by economists…think value of the productivity, muirgeo, before you write something that only makes sense to you and your democratic kind.

Martin Brock August 23, 2008 at 9:42 am

What is the definition of "productivity" used by economists and how do they measure it? I suppose "productivity" tracks "income" practically by definition, so if the CEO of Exxon Mobil gets half billion dollar bonus, then he's definitively "productive" to this extent. Is that not true?

muirgeo August 23, 2008 at 11:47 am

"I suppose "productivity" tracks "income" practically by definition,…"
Martin Brock

You would like to
think so.

They should IMO. And the biggest point of the charts is NOT the inequality. Its the difference in productivity of the two periods. But of course evidence suggest inequality decreases productivity.

This whole discussion just amazes me. When some one questions the need for $50 million dollars salaries they are said to be stifling freedom, liberty and the economy. They are called socialist and communist. When some one suggest the middle class may have more value or may be producing more than they are receiving and asks for a little more for them they are shouted down as ungrateful, called whiners and reminded they live better then kings of yore! (who incidentally had no flush toilets)

LowcountryJoe August 23, 2008 at 11:57 am

What is the definition of "productivity" used by economists and how do they measure it?

This will provide a solid explanation.

I suppose "productivity" tracks "income" practically by definition, so if the CEO of Exxon Mobil gets half billion dollar bonus, then he's definitively "productive" to this extent. Is that not true?

Really? A half of a billion? I wasn't aware of that. Perhaps the board of directors and/or the company's shareholders felt that his decision-making abilities led to at least a half a billion in net profits posssibly even a half of a billion more than the next availible and qualified applicant. Can you prove that this is not true?

LowcountryJoe August 23, 2008 at 12:03 pm

When some one questions the need for $50 million dollars salaries they are said to be stifling freedom, liberty and the economy.

No, when someone threatens to use government to prevent these types of salaries, they are barriers to freedom and liberty.

If Tom Hanks make a picture and gets paid $25 million to do so, is it excessive? What if by his acting skills and name-draw, Hanks brings that many more viewers that result in more than $25 million to the production company? Then is his pay excessive? I say no…it was guessed and forecasted that his name and skills would make a film that much better…he was paid for his expected productivity. If all works out, he delivers and then some. Those that took the risk on forecasting made gains as well. Either of you two (muirgeo or martin) have issues with that?

BoscoH August 23, 2008 at 12:07 pm

George, If you're going to bemoan $50 million salaries, then you've got to tell us what you plan to do about them. Let's consider a guy who starts a company, and 30 odd years later is worth $50 billion give or take and has created thousands of millionaires among his direct employees, tens of thousands of millionaires in his industry, and enabled hundreds of thousands of very high paying jobs. Oh, and he gives to all the cool Democratic groups and is spending his fortune saving Africa. What would you like to do about him George?

muirgeo August 23, 2008 at 12:19 pm

No, when someone threatens to use government to prevent these types of salaries, they are barriers to freedom and liberty.

Posted by: LowcountryJoe

And likewise when they use government to create them. 2 way street LCJ.

Oil Shock August 23, 2008 at 12:28 pm

No, when someone threatens to use government to prevent these types of salaries, they are barriers to freedom and liberty.

Posted by: LowcountryJoe

And likewise when they use government to create them. 2 way street LCJ.

Posted by: muirgeo

WHat did I tell ya? There is obviously an inability to think critically. The source of the problem is very clear from the above two statements, from two people of entirely different political views. Now one of them will always suggest that the solution is to make the problem bigger.

LowcountryJoe August 23, 2008 at 12:36 pm

And likewise when they use government to create them. 2 way street LCJ.

Tell me where I have ever been a champion of business using government to curry favors or limit their competition. Yes, George, I am well aware that you think that what you champion actually increases liberty. it is the only reason why I do not come to your defense when others call you an idiot. Just because they and I share a fondness for liberty doesn't mean that I don't cringe at times when they name-call you. However, much more often than not, I do believe it is warranted.

Time to actually get on that two-way street that you talk about, muirgeo, because your one-track mind is causeing major congestion on the roadway.

muirgeo August 23, 2008 at 12:37 pm

I have no problem with athletes salaries (except to the degree stadiums and the leagues are often subsidized by tax payers). I simply do not contribute as I never go to the games or watch them on TV . Not worth my money. I have no problems with Tom Hanks salary as the industry is well unionized and I am not forced to subsidize it or it's externalizes. I pay for Tom Hanks movies because they ARE worth it to me but I also try to watch mostly independent films because they are often better.

I have lots of problems with multi-million dollar salaries going to CEO's in industries that have monopolies, are subsidized by me via my government and also have massive unaccounted externalizes that are passed off their balance sheets and onto me and society.

Now, I have to be honest. Like the Founding Fathers I fear even legally gotten massive accumulations of wealth. I struggle with this but my guess is even when the means to wealth is set on an even playing field we might all, at the start of the game have to agree that those of us through luck and hard work fortunate enough to prosper disproportionately will have to pay back disproportionately to the system that allowed us to succeed. Likely it doesn't have to be a massively progressive tax structure but I'm pretty sure it can't be done with out some progressively.

muirgeo August 23, 2008 at 12:44 pm

Tell me where I have ever been a champion of business using government to curry favors or limit their competition.

Posted by: LowcountryJoe

Well in as much as I'm arguing that the current wealth inequality is a result of governmental favors to the wealthy and you seem to be denying so or at least denying the data.

You guys are so stubborn that when I ask you to choose between two economies as represented in the data you actually choose the one with greater inequality even though it is less productive because you assume the inequality is some measure of liberty….. I'm sorry that's bizarre. I'm not sure that was you but one person did so.

So I'll ask YOU again for clarification. If you were allowed to choose between the two economic results in the chart which would you prefer?

muirgeo August 23, 2008 at 12:48 pm

Oil Shock,

I think you mis-understood my point. To clarify, I don't support people using the government to get wealthy. Do you support them doing so?

Oil Shock August 23, 2008 at 1:02 pm

So I'll ask YOU again for clarification. If you were allowed to choose between the two economic results in the chart which would you prefer?

I don't choose system of governments based on those charts or any charts for that matter. I choose liberty every time, regardless of economic performance, but it just happens that a free society will bring more prosperity than an unfree one. I will agree with you that part of the reason why some people make "large" sums of money is due to governmental favors. The solution should be obvious – to remove the power to do favors from the government.

LowcountryJoe August 23, 2008 at 2:00 pm

I do not give a fig about the data or the chart, George. The bottom line is that we would not be having this converstaion over the Internet in 1976. And, even as 7-year old [strike that] even if I was the same age as I was now (back in '76), I likely would have not been exposed to the libertarian way of thinking and would have been on track to enslaving myself with collective thoughts. I would have been a detriment to mankind (my fellow man) without my aqcuired focus on liberty. We have gotten where we are today — our standard of living — inspite of our collectivism.

I choose the latter period…warts and all. What do you really wish to choose? Because I'd really like to see a limited government coupled with even even more dramtic standard of living increase into the future. I happen to really believe that if the scope and size of government get smaller, the standard of living will be greater.

Does this answer you narrow-minded question, George?

Rudy August 23, 2008 at 2:19 pm

Lowcountry,
Very well stated!! I hope George will be able to get the gist of it.

Sam Grove August 23, 2008 at 2:43 pm

To clarify, I don't support people using the government to get wealthy. Do you support them doing so?

You're half way there.
The problem is, your progressive government will inevitably produce scenarios you don't like.

Why?

Why do flies hang around picnics?

muirgeo August 23, 2008 at 3:25 pm

The solution should be obvious – to remove the power to do favors from the government.

Posted by: Oil Shock

OK let's work through this.

I think I'll be able to show my solution more practical while showing yours unfeasible.

First I would basically make lobbying illegal. Or at the very least make every interaction between a public official and an outside agent except in cases of national security observable and recorded by the public. Complete freedom of information.

Second I would get rid of the electoral college and Gerrymandering ( make it much harder for incumbents to get re-elected). I would probably considered publicly funded elections and would institute instant run off voting to help 3rd parties out.

That's a starter and I'm sure there's lots of criticism to follow. But when you propose weakening the government you'll have to explain how the defense of the country is made without interference from lobbying and special interest. How would a weakened government settle and issue like downstream pollution or drugs tainted with poison.

Are you going to suggest that private agencies could do the screening of drugs to test their safety. Then tell me about how well that has worked out for private company credit and accounting agencies. NOT TOO WELL.

muirgeo August 23, 2008 at 3:44 pm

Lowcountry,
Very well stated!! I hope George will be able to get the gist of it.

Posted by: Rudy

No it's not well stated. I'll go through it point by point.

FIRRST;

LCJ first says , "I do not give a fig about the data or the chart, George." then in the second paragraph he says, "I choose the latter period…warts and all. What do you really wish to choose?"

First he doesn't choose but then he does. And he chooses an economy that has lower productivity and large accumulations of wealth and power amongst a small minority and assumes he is choosing a system of greater liberty.

LCJ, " The bottom line is that we would not be having this converstaion over the Internet in 1976."

Totally irrelvant. As if modernity is and technological advancement is a sign of increased liberty. Who had more liberty an American in the year 1800 or the modern day Chinese person living with a TV under communism?

Further, the microprocessor AND the internet were developed directly from government funding and research NOT private enterprise.

LCJ, "And, even as 7-year old [strike that] even if I was the same age as I was now (back in '76), I likely would have not been exposed to the libertarian way of thinking and would have been on track to enslaving myself with collective thoughts. I would have been a detriment to mankind (my fellow man) without my aqcuired focus on liberty. We have gotten where we are today — our standard of living — inspite of our collectivism."

Absence of libertarianism and the presence of a collective in our successful society is an argument FOR libertarianism and against collectivism… Hmmm interesting.

lcj, "Because I'd really like to see a limited government coupled with even even more dramtic standard of living increase into the future. I happen to really believe that if the scope and size of government get smaller, the standard of living will be greater."

I happen to believe you are wrong AND I backed my position with data while you did not. You actually had to choose an economy with decreased productivity and massive concentration of power and claimed it maximized liberty…. that is bizarre…illogical

LCJ, "Does this answer you narrow-minded question, George?"

Sure you answered the questions. But your answers where self-contradictory, illogical and not based in factual evidence.

We are thus led to accept majority rule in one form or another as expedient and we must acknowledge the need for government arises because absolute freedom is impossible.

Oil Shock August 23, 2008 at 3:54 pm

First I would

…..

Second I would

……

I would probably

…..

No you wouldn't….The government would….The bureacrats would….The politicians would….An elite few would….Mob rules are impractical….

Our prisons are full of people who did things that are "illegal". And for every crook in prison, arguably, there is one or more roaming the streets, hospitals, schools, bureaucracies, political circles, corporate board rooms, they are all doing illegal….

How many times have you violated "traffic law" and didn't get caught?

Your system is feasible and it will produce what it has always produced…Corruption, nepotism, poverty and stagnation.

Where as a radically smaller government has practically existed in the U.S for 140 years. It created a middle class for the first time in the history of humanity. It expanded 13 small colonies in the eastern sea board of the continent of North America into a thriving, wealthy nation that spreads from coast to coast. It made United States the wealthiest nation on the planet. We are already there and that position is ours to lose.

Methinks August 23, 2008 at 4:19 pm

Very well stated!! I hope George will be able to get the gist of it.

LOL. That'll be the day.

George, If you're going to bemoan $50 million salaries, then you've got to tell us what you plan to do about them. Let's consider a guy who starts a company, and 30 odd years later is worth $50 billion give or take..

No small point, a guy who starts a company is not salaried. The only way to stop him being worth $50 Billion is to provide enough disincentives to stop him from starting the company. Never starting the company means that the middle class, which depends on this guy for job creation, doesn't have those jobs available. They are the salaried employees. Fewer jobs means less demand for labour, which means less lower salaries. Everybody is poorer. It's amazing that after so many countries have tested this failed strategy (including the U.S.), we still have Americans longing for it.

Sam Grove August 23, 2008 at 4:21 pm

How many times do I have to explain it to you?

The bigger the government, and the more it does, the greater the division among 'the people'.

A divided people results in a government managed by the oligarchy of those who stand to benefit most by investing in 'influence'.

You have proposed nothing that has not been proposed for many decades.

You are not the dictator and you never will be. That's as it should be.

Your imagining that you could do all those things if empowered is the first step on the road to corruption.

Nothing will stand in the way of a dictator who knows he's doing what's best for the rest of us.

maximus August 23, 2008 at 4:22 pm

"Further, the microprocessor AND the internet were developed directly from government funding and research NOT private enterprise."

This is total BS. Revising history again to fit your template. The DoD created a single use system that had no practical use for the population at large. It was private industry that turned it into the major innovation we recognize today. In case you didn't notice Steve Jobs, Bill Gates, etal, weren't Gov't employees nor funded by the Gov't. Otherwise they coulda built themselves a new garage.

LowcountryJoe August 23, 2008 at 4:42 pm

George, you asked me to choose between the two economic results. That's very broad. I took that to mean, "which economy would I prefer to participate in". I took that to mean what I thought it meant: big picture economic results.

However, this is not what you meant; you meant the result of income gains distributed accross brackets of people. If that's what you meant, then, yes, I would choose the first period because, all things considered, there are less hard feelings and more cohesiveness when growth and standards of living rise at the same rate but the gains are distributed evenly. But if we did consider all things, would gains/standars-of-living really be greater if policy [asshat induced central-planning] were geared/tailored specifically for this end result? I have my doubts, George. I really have my doubts.

Further, the microprocessor AND the internet were developed directly from government funding and research NOT private enterprise.

Microprocessors? Really? I didn't know that. Okay, then, assuming that this is correct, when did true progress in Internet innovatations/usage and in the minaturization, cost, and calculating power of microprossors get realized…in the domain of government or when these things were privatized?

Methinks August 23, 2008 at 4:53 pm

How many times do I have to explain it to you?/i>

Until the day he dies. By then, you will lose count. Muirpid just wants to see how many times you can repeat 2+2 equals 4, not 5, before you go insane.

vidyohs August 23, 2008 at 4:55 pm

muirduck,

"Second I would get rid of the electoral college and Gerrymandering ( make it much harder for incumbents to get re-elected). I would probably considered publicly funded elections and would institute instant run off voting to help 3rd parties out."

Why?

Do you even have an idea of how the constitutions says it is to work?

The Electoral college if applied and performed by the letter of the constitution would exactly reflect the popular vote.

Your problem is the government not the constitution.

It is bureaucratic misapplication of the electoral college that allows the types of conflict we saw in 2000.

Methinks August 23, 2008 at 4:59 pm

close tag

muirgeo August 23, 2008 at 5:30 pm

"In case you didn't notice Steve Jobs, Bill Gates, etal, weren't Gov't employees…"

And which one of them developed the microprocessor… the internet? I know they developed software operating systems using previously created microprocessors.

incidentally, several of the people who could claim to have "invented" the Internet, or key pieces of its protocols — in particular, Vinton Cerf and Robert Kahn — are out there on the Net today defending Gore, asserting that he was the politician in Washington who took the "initiative" to support the Net in its early days.

Crusader August 23, 2008 at 5:49 pm

So Don asked us to give muirduck another chance to redeem himself and he royally stepped into the biggest shitpile ever. We're supposed to just overlook that endlessly Don?

Sam Grove August 23, 2008 at 5:56 pm

Typically, technology that is developed under the auspices of government is purposed toward more effective killing of people.

The transistor, the basis of modern electronics, was developed by Bell Labs.

Oil Shock August 23, 2008 at 6:03 pm

Al Gore invented the wheel.

johnny August 23, 2008 at 6:50 pm

Muirgeo: First I would basically make lobbying illegal.

You're going to have to repeal the first amendment to do that.

Congress shall make no law … abridging … the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Martin Brock August 23, 2008 at 7:03 pm

Really? A half of a billion? I wasn't aware of that.

I wasn't being literal. It's just a number I picked out of the air. I vaguely remember talk of a huge windfall on this order for some CEO of an oil company, probably related to options rather than a bonus.

Perhaps the board of directors and/or the company's shareholders felt that his decision-making abilities led to at least a half a billion in net profits posssibly even a half of a billion more than the next availible and qualified applicant. Can you prove that this is not true?

I can't prove that Queen Elizabeth hasn't earned Buckingham Palace somehow, and I also can't prove, in any absolute sense, that the palace isn't rightfully yours instead. I'm a mathematician by training. Proof is a very high standard. Can you prove that any CEO's "productivity" is equivalent to his earnings? You can if you simply define "productivity" this way.

"Entitlement" seems a far more descriptive label than "productivity" in this context, but if you want to define "productivity" so that Saddam Hussein's golden toilet seats reflect his "productivity" definitively, you can do that.

Your source isn't very helpful, because it essentially discusses the measurement of average productivity. If an organization's raw material and other non-labor-related cost is X dollars and if the organization earns Y dollars in a year and if the organization has N employees, then we might agree that the productivity of the employees, measured in dollars, is (Y – X)/N on the average; however, if the organization's CEO receives half of (Y – X) in a given year, even if all of the other employees quit the following year, calling this quantity the CEO's "productivity" seems a stretch. It seems a stretch even if the other employees don't quit, particularly if they're bound to the organization by long-term pension benefits and the like or a scarcity of similar opportunity.

Why do you assign the burden of proof as you do?

SteveO August 23, 2008 at 8:13 pm

Muirgeo has made only one good point here, and I agree with him. It's one of the points he makes consistently, and I'm surprised at so many libertarians throwing the baby out with the bath water.

Yes, there are rent-seeking corporations, and some companies enjoy competitive advantages that they wouldn't have without government support.

Because you let him pin this to you everytime, he can't understand the difference between pro-market libertarians, and pro-business Republicans.

Muirgeo: To you directly, can you please post less. You account for 9 out of 35 posts so far. That's more than 25% of this thread. Do you have a job? Or hobbies, or things to do around the house? Can I have your wife's phone number so I can tell her what you're doing with all your time?

I suggested this recently in another thread, EVERYONE- can you please consider posting *your thoughts* maybe twice a day? The current behavior is simply to add more straw to the pile, making it harder to find the quality needles. Please stop blaming Muirgeo, he doesn't have enough power to make you respond. You only show a stunning lack of self-discipline when you respond to him.

I know some of the people here have great input, and I'd love to hear it. But instead you get distracted and controlled by someone you despise. I'd like to hear your ideas, not insistent rebuttals, but this guy is making you look like fools.

How about those who really feel a sense of belonging and ownership here practice a little discipline and make this forum what would be valuable for us.

Sam Grove August 23, 2008 at 8:54 pm

Yes, there are rent-seeking corporations, and some companies enjoy competitive advantages that they wouldn't have without government support.

We all know this and do oppose it, occasionally making note.
Unfortunately, muirgeo does not take note of our assertions that no one should benefit from government this way and that if the government weren't so powerful, then there would be few rents to seek.

How often to we have to add the qualifier?
Everytime?

If he ever got a clue from our stated positions in this regard, then he might not try to pin it on us.

In fact, a number of times I have pointed out that rent seeking is an inevitable consequence of progressive government and that his desire to eliminate rent seeking, while the equivalent of our, is not feasible given his remedy, which is to further increase the power of government over economic behaviors.

Yes, we deplore rent seeking. It is our (libertarian) position that human nature makes such behavior inevitable when there is political management of, well, just about anything, but most especially economic behavior.

Muirgeo want to essentially regulate natural human behavior because he insists upon a system where it expresses in ways which we agree are undesirable.

Muirgeo thinks the system can be tinkered to remove systemic problems.

muirgeo August 23, 2008 at 9:08 pm

SteveO,

1… there are a lot more of you then me so I have more replies to respond to

2… Good debate doesn't occur over one or two post. You need to follow the arguments through. It would be nice if there were discussion forums on given issues as sometimes the debate dies only because the topic rolls off the front page.

3…. I've been on many blogs including this one where excessive posts from people with little to say are imply passed by… I don't read them. Is there a problem with your scroll down button?

4… Sorry SteveO, I'm a reductionist and like to follow arguments and ideas through to some conclusion… that takes multiple post. But I would agree if some one is not really interested in discussing something in detail or really just wants to flame me don't bother.

The Albatross August 23, 2008 at 9:24 pm

I too deplore rent seeking, but, seriously, can we really blame folk for rent seeking? Sure they may be terrible people (I would never rent seek—at least now as someone who has no access to it), but it is hard to say that you could not talk yourself into it. I am reminded of Don’s post about the people who asked him to support their request for more federal money. The way to eliminate rent seeking (and those seeking the rent) is to eliminate the rent. I can guarantee you that whether they be Democrat, Republican, or Libertarian, a politician (myself included in that role) would succumb to rent seek. We would talk ourselves into it somehow, which is why the “bailouts” will happen no matter who is in charge.

Oil Shock August 23, 2008 at 9:54 pm

SteveO,

I don't know if you know this or not, but your posts have an extremely condescending. Other than lecturing and dropping hints, what else do you do on this blog? I think it will be much productive for you to post your "superior" thoughts than lecturing others on their "short comings" – everybody would benefit.

That said, I agree with you that there are plenty of rent-seeking corporations. I agreed with Muirgeo on multiple occassions. Two of us disagree on the solutions.

Side note: I have come to notice that blogs that identify or sympathize with monetarist schools, tend to sound more like apologists for big corporations. Where as if you go to blogs that sympathize with the Austrian School, they tend to be more openly critical of corporatism. Another observation, if the bloggers are more republican than libertarian, they are likely to turn a blind eye to corporatist tendencies. May be I am reading it all wrong, but unless somebody else proves otherwise, I have no reason to change my mind.

LowcountryJoe August 23, 2008 at 9:59 pm

I happen to believe you are wrong AND I backed my position with data while you did not. You actually had to choose an economy with decreased productivity and massive concentration of power and claimed it maximized liberty…. that is bizarre…illogical

First: you don't even know how to properly present the very data that you provided. You have, from day one, claimed stuff about this data that the authors never intended.

Second: you asked me to choose an economy (or as you put it, economic results [even though earlier in that post you asked me to choose an economy]). I choose to live in the latter economy and stand by that decision. Would you choose to go back to a period somewhere within '46 and '76? It's your question, DUCKtor; you answer it now.

Third: show me, DUCKtor, where I claimed that liberty was maximized in either period. I release that you may like to have things put in your mouth, muirgeo, but leave your words out of mine, thank you very much.

brotio August 24, 2008 at 3:37 am

"To clarify, I don't support people using the government to get wealthy. Do you support them doing so?" – Muirduck (via Sam Grove)

Before Muirduck gave us a temporary reprieve from his muirpidity, he admitted favoring subsidies to GE and Archer Daniels Midland because they make producks <- :p His Holiness, The Divine Prophet Algore I has deemed environmentally-correct.

LowcountryJoe August 24, 2008 at 7:13 am

I remember something to that effect now that you bring it up, brotio. That's it, that's the last straw with this guy. I am finally ready to take and practice the advice Russell Nelson has been giving us all along…no longer will I allow myself to be lured by this clown.

muirgeo August 24, 2008 at 8:31 am

Where as if you go to blogs that sympathize with the Austrian School, they tend to be more openly critical of corporatism. Another observation, if the bloggers are more republican than libertarian, they are likely to turn a blind eye to corporatist tendencies. May be I am reading it all wrong, but unless somebody else proves otherwise, I have no reason to change my mind.

Posted by: Oil Shock

I've noticed this as well. I actually find lots of issues I agree with at the Mises site. They are particularly concerned with corporate welfare and also monetary issues that create unfairness.

At your recommendation I'm reading more there and they have regular free podcast.

For what it is worth there is a free podcast called Demandside by Alan Harvey that makes IMO very good arguments for Demand side economics. The August 22 podcast is very good.

He makes a good argument that at least with regards to Republicans and Democrats the Democrats now having accepted the success of competitive markets have better policies for them.

muirgeo August 24, 2008 at 8:40 am

"Would you choose to go back to a period somewhere within '46 and '76? It's your question, DUCKtor; you answer it now"

From an economic stand point hell yeah I'd want us to go back to that time. The economy grew far greater during that period and the middle class expanded and became wealthier. A single working father could raise a family, buy a house and pay for health care and college. A society that sees value in every person and helps them to prosper will be far more successful then one that simply caters to the rich.

But if you're asking me if I want a black and white TV rather then my 55" LCD then you're simply asking a dumb question.

Crusader August 24, 2008 at 3:00 pm

Muirduck wants the best things in life and wants the taxpayer to subsidize him instead of working hard for it like the rest of us.

Martin Brock August 25, 2008 at 6:50 am

The way to eliminate rent seeking (and those seeking the rent) is to eliminate the rent.

Duh. How do you propose to do that? Please don't say "vote Republican". That's not even funny anymore.

LowcountryJoe August 25, 2008 at 12:57 pm

Duh. How do you propose to do that? Please don't say "vote Republican". That's not even funny anymore.

It would take the legislative body making a full committement to the principle of federalism and then implementing a tax scheme built on that principle — where the states would have to tax their residents with the federal government billing the individual states for federal services.

The final result would have to look something like governmental power being divested and returned back to the states…as if an amendment were to read: "Remember the ninth and tenth amendments? Yeah, well this time we're gonna really mean it!"

So, if the Progressives really want mandatory health insurance where premiums have nothing to do with insurance risk and everything to do with ability to pay the premium, get your STATE legislators to go along with that and leave everyone else out of it: watching the economics play out.

DevinMacGregor August 27, 2008 at 2:38 am

Al Gore may not have single handedly engineered routers, switches, and the software necessary to run them but to imply that the INTERNETwork was purely a private innovation is like saying the M1 Abrams is a private innovation and happened independent of the US Govt. Both were funded by the federal govt for necessity. The Federal Govt does not build a thing. It hires private contractors, actually US Universities in this case. The Federal Govt had a necessity and sought private companies to fill that … http://en.wikipedia.org/wiki/Internet

The US Govt does use Bell Labs. Bell Labs developed for the army missiles that could hit aircraft. This necessity of govt was brought about by the invention of the jet aircraft which was also a necessity of govt.

The History Channel used to have a show that would show technology developed for the military to include the space program that later found its way into the civilian sector but be reminded that there was no demand nor necessity for these things by the civilian sector in the first place.

Aviation greatly advanced due to government necessity not the civilian sector. The US military had intercontinental aircraft in service before the civilians did. It was the technology gained by doing necessity work for the US Govt that those civilian owned aviation companies used to put in their civilian fleet.

The term computer referred to a job title of a person. http://en.wikipedia.org/wiki/Computer

Without the US Govt necessity would IBM had ever become as big as it did since the US Govt had a need and IBM filled it.

We can assume that something else would have come along but we do not have the luxury of a time machine to play out our fantasies.

What I find funny are the comments about someone making 50 million and then saying that HE created all these other people as if he singlehandedly Al Gored the internet. Does anyone get the irony in that? That man did not create any millionaires. They created themselves. And the man who makes 50 million should learn humility and be more humble that he would not be able to make that 50 million without the blood sweat and tears of those below that actually make the company function.

I used to hear that lame analogy when in the US Army to where Officers would take great credit for things and are blinded and think gee that General won the battle, if it were not for the General's decision if not for his decision blah blah blah. Well it may had been that general's decision to move around the left but it was the soldiers who actually made this left who made it possible who further made decisions based on situational awareness as they arose that the General could never had made sitting back in his limousine. They deserve the lion share of the credit because if it had failed just like Corporate America they would have been blamed. That General would have skipped off to some other duty post. In the case of Corporate America casualties are not measured in deaths but measured in layoffs while that CEO either remains with the same salary or jumps ship to another company with equal or higher pay and huge retirement packages.

We have heard this before with some saying Bill Gates made all these millionaires, as if he personally did all the work and just hired people and said here is a million dollars, in other words he Al Gored Microsoft. Billy was a co founder and could not afford to pay his workers so he paid them in shares. Those workers did not just sit on their butts they actually programmed and did the lion share of all the programming. It is their hard work that turned those stock certificates into millions. Bill Gates by proxy of company title simply raked in the dough since he as well paid himself a higher amount of shares. Those btw were his initial programmers because Billy is also known for cheating out his other programmers by making promises he never kept and paying them dick wages as programmers. He was eventually was sued by them and lost to which he appealed, rinse repeat. It as well changed how Temps were classified. They became called Contractors but this did not stop the abuse of what a contractor is. IT is now foolishly outsourcing a lot of talent.

Maybe the stockholders will one day wake up and realize that giving one man 50 million dollars only means that one man can buy one TV but putting more money into the hands of the workers who actually do the work buys a hell of a lot more TVs and churns the economy a hell of a lot faster. It as well puts the money right back into their hands which allows them to create jobs etc. Putting all the money into the hands of a few is no guarantee that money will be churned but sit in massive bank accounts. Sure some of it will eventually create jobs but the vast amount of it collects in massive bank accounts.

Having been now in the private sector for 20 years I see as much if not more red tape in the private realms, waaaaay too many chiefs and not enough Indians. We need to take some military principles such as leadership and stop this old school corporate structure as well as put more decision making into the hands of those who actually do the work not those who push pencils and make up terms that never do the work themselves. I am not a line item expense. I save the company face all the time due to upper management poor decision making and two corporate giants duking it out. Btw my first job out of the military I worked my way up in 2 years to management. It was a low paying dead end job with stupid management.

In a bizarro world it would be funny as hell if stockholders started to outsource management to all these other cultures who are eager and will work for less and have a huge supply of advanced degree holders. We do have video and audio conferencing capabilities.

Commence with the name calling. This is my one and only post.

John Hudock August 27, 2008 at 8:29 am

I didn't read every comment from the contest, but I scanned through most of them. While there were many good points about examining like cohorts, movements between quintiles, immigration, etc…, there is a far simpler explanation for increasing income disparity that I saw no one mention (I may have missed it), and that is simple compounding. I person A starts with a million dollars/yr income and person B starts with 10000 dollars/yr income
and A's income grows by 5% per year and B's income grows by 30% per year, their starting income disparity of $990,000 per year will have grown to $1,567,069 in 15 years. Eventually B will catch up if the growth disparity continues long enough, but there will be a growing (albeit slowing) income disparity for quite a long time (Think China and the U.S., I haven't heard many complaints about the growing income disparity between the U.S. and China over the past 20 years. In 1988 Chinese GDP was about $200B and US GDP was about $5.2T a difference of $5T. Now Chinese GDP is about $3.4T and US GDP is $14.2T a difference of 10.8T. Income disparity has more than doubled!

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