More Tibor Machan

by Don Boudreaux on November 19, 2008

in Myths and Fallacies

Here’s a letter, with an important point, appearing a few weeks ago in the New York Times:

To the Editor:

Margaret Atwood is a fine novelist but a poor
moralist. The common good she speaks of cannot be promoted literally
since such a good is impossible to know, if it exists at all other than
as an utterly general idea. The ”we” that one can care about is a
small number of intimates, whom one knows and can effectively benefit.

The
American founders had the best idea of the common good: securing the
rights of all to life, liberty and pursuit of happiness. This is a
common good that avoids meddling in the lives of people one doesn’t
know, leaving them to do the best for themselves, their families and
their friends, instead of aiming for a utopian, impossible and futile
ideal.

Tibor R. Machan
Silverado, Calif., Oct. 22, 2008

The
writer is a professor at the Argyros School of Business and Ethics at
Chapman University and a research fellow at the Hoover Institution.

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{ 49 comments }

Libertarian Thinker November 19, 2008 at 1:03 pm

I didn't write this piece, but it is the best post I have read in a long time. I am sharing it with my readers, I'm passing it along to you. It is pure mind candy. One commenter wrote:

If this were an essay on economics, it would be the best essay on economics I’ve read in a year or more.

If this were an essay on social structures, it would be the best essay on social structures I’ve read on a year or more.

If this were an essay on conservative versus reformer mindsets, it would be the best essay on *that* that I’ve read in a year or more.

In fact, it was all three of those things, and I’m frankly stunned at how excellently you’ve made so many points in such a short space.

Bravo.

http://beetlebabee.wordpress.com/2008/11/16/jane-galt-a-libertarian-view/

dg lesvic November 19, 2008 at 1:09 pm

Tibor Machan misses the point.

The Left believes that it does know what the common good is, and that it can be attained: the reduction of income inequality.

There is no substitute for the logical argument that the Left's means of attaining its goal are counterproductive, that they will not reduce but increase inequality.

T L Holaday November 19, 2008 at 1:51 pm

dg lesvic,

Are there any authors making that logical argument that you'd recommend? I like
Arthur Okun's Godkin Lectures "Equality and Efficiency, the Big Tradeoff" (limited preview) from 1975? I think he does a good job of demonstrating the counterproductivity of (e.g.) antiprofiteering, progressive tax rates, etc. He argues for policies that are a compromise between Rawls and Friedman, and it is hard to be stentorian for a compromise. In 120 pages, he does no namecalling.

VikingVista November 19, 2008 at 1:59 pm

The idea was captured (and pounded into the reader's skull) in a romantic novella called _Anthem_.

dg lesvic November 19, 2008 at 2:06 pm

T L Holaday,

I am not familiar with the work you mentioned.

Here is my argument in a somewhat oversimplified nutshell.

Taking from the rich to give to the poor doesn't just draw money but manpower downward upon the hierarchy of production, and the manpower faster than the money. For manpower doesn't merely follow money but anticipates it. And, with manpower and competition among the poor increasing faster than the redistributed money, they'll be poorer than they would have been without it.

For a more detailed analysis, click on my name below.

And I can tell you that the experts at the Austrian Economists blog tried mightily to refute and defeat it, and that in the end all they could do was banish me from their site.

Sam Grove November 19, 2008 at 3:46 pm

Redistribution rewards rent seeking rather than productivity.

It seems obvious that, in general, rewarding people for being poor insures more of the condition.

Wealth cannot be taken from the wealthy in a meaningful sense as all they really possess is entitlement to consume, individual capacity for consumption is limited.

So accounts are debited and credited and the poor take a share of a fixed or shrinking pie. They are getting funds for goods that are increasingly expensive because, inevitably it seems, the funds they are given are produced by inflationary policies.

Sam Grove November 19, 2008 at 3:48 pm

So many are fooled by numbers, especially when attached to dollars.

dg lesvic November 19, 2008 at 4:52 pm

Sam Grove,

You wrote:

"It seems obvious that, in general, rewarding people for being poor insures more of the condition."

If you were to reward the poor with a million dollars apiece, would that still ensure more of the condition?

If not, why not?

You wrote:

"Wealth cannot be taken from the wealthy in a meaningful sense as all they really possess is entitlement to consume."

What's meaningless about that?

You wrote"

"So…the poor take a share of a fixed or shrinking pie…"

The question remains: would they be better off with a larger share of the smaller pie or smaller share of the larger pie?

My point of departure from Mises and the rest is that they wind up not with a larger but smaller share of the smaller pie.

Am I confusing you with someone else, or haven't we had this discussion before; and didn't you wind up agreeing with me?

Correct me if I'm wrong.

In any case, I appreciate your input, and hope to have more of it.

Sam Grove November 19, 2008 at 6:52 pm

would they be better off with a larger share of the smaller pie or smaller share of the larger pie?

That would depend on the numbers.

Given the dynamics of the system, what they end up with is a share that is smaller than it would be otherwise.

"Wealth cannot be taken from the wealthy in a meaningful sense as all they really possess is entitlement to consume."

Because wealth is produced by productive labor, not by being wealthy. Even if all the 'wealth' possessed by the wealthy is taken from them and distributed to the poor, the fact remains that there is still only so much product available for consumption.

With their available funds, the poor will bid up the price of available product. More product cannot be created because all the capital will be frozen due to the seizure of the "wealth" which would have been used to provide the resources required for production.

If you were to reward the poor with a million dollars apiece, would that still ensure more of the condition?

You betcha, because money is not wealth and does not produce wealth.

Sam Grove November 19, 2008 at 6:54 pm

We have discussed this before.

dg lesvic November 19, 2008 at 8:36 pm

Sam Grove,

Fools rush in where wise men fear to tread.

But not just fools, sometimes real economists, too.

You are one, and I thank you for that.

Now, prepare to pay the price.

You wrote:

"would they be better off with a larger share of the smaller pie or smaller share of the larger pie?

That would depend on the numbers."

In a million years you would not be able to come up with any set of numbers that would make the slightest difference.

You wrote:

"Given the dynamics of the system, what they end up with is a share that is smaller than it would be otherwise."

That's right, as far as it goes. But the question was: smaller in proportional as well as absolute terms?

Then you repeated something you had said before:

"'Wealth cannot be taken from the wealthy in a meaningful sense as all they really possess is entitlement to consume.'

I had responded that there was nothing meaningless about entitlement to consume.

If you really think there is, why not send all your entitlements to me, since they mean nothing to you and a great deal to me.

Then you repeated my question:

"If you were to reward the poor with a million dollars apiece, would that still ensure more of the condition?"

And, your answer:

"You betcha, because money is not wealth and does not produce wealth."

I'll take check or credit card.

T L Holaday November 19, 2008 at 9:14 pm

Sam Grove writes:

Because wealth is produced by productive labor, not by being wealthy.

This appears to be a gross oversimplification.

What was the productive labor of the Pharaoah and the Egyptian priesthood? What is the productive labor of Elizabeth Windsor? What was the productive labor of the Medellin Cartel? What was the productive labor of Moctezuma? What is the productive labor of Kim Jong Il? What was the productive labor of the slaveholders of the American South?

T L Holaday November 19, 2008 at 9:20 pm

Sam Grove,

Please forgive the esprit d'escalier. One more (from today's headlines):

What is the productive labor of the Somali pirates [who have indeed become wealthy through their initiative and a lack of government interference]?

dg lesvic November 19, 2008 at 10:30 pm

Sam Grove,

I still haven't gotten any of that filthy lucre from you.

dg lesvic November 19, 2008 at 10:40 pm

TL Holaday,

Glad to see a little wit here. Where I come from in the Austrian School, that sort of thing was frowned upon.

But pardon my lack of French.

What the hell does spritz de escargot mean?

Sam Grove November 19, 2008 at 11:49 pm

"You betcha, because money is not wealth and does not produce wealth."

I'll take check or credit card.

But we were talking about giving EVERYONE (who is poor) a million dollars.
Sure if I had a million dollars and gave it to you, YOU would suddenly be better off.

BUT, if the government gives a million dollars to everyone who might qualify as poor, then millions of people will have millions of dollars, but the amount of stuff they can buy will remain pretty much the same.

Anonymous November 19, 2008 at 11:52 pm

What was the productive labor of the Pharaoah and the Egyptian priesthood?…

That just means we are better off in a system where just a few people steal than in a system where just about everybody steals.

A body can tolerate a few parasites, but not millions of them.

Anonymous November 19, 2008 at 11:55 pm

If you really think there is, why not send all your entitlements to me, since they mean nothing to you and a great deal to me.

If you keep changing the parameters, then we can't derive a fixed solution. In one case, we are speaking of collective wealth transfers, but in the other, we are speaking of localized transfers that have little impact upon the system.

Yes, as a math problem, it depends on the numbers. As a real world problem, then the options are much more restricted.

RickC November 20, 2008 at 12:07 am

I'm not an economist, not sure I followed Mr. Grove's argument really, but I will play the fool and rush in too. My Dad always said that the worst thing you could do to "poor" people was give them money. He was not an economist either. I've thought a lot about what he meant by that oft repeated statement and I've come to believe that he was on to something.

It seems to me that "wealth" is a state of mind. I know this isn't PC but almost every real person I've known that was poor was because of thought patterns and behaviors that were antithetical to the gaining or keeping of wealth. I'm thinking of Dr. Herman-Hoppe's time preferences as one example. Drugs, alcohol, out of wedlock childbearing, etc. I cannot for the life of me think of one case where this wasn't true (within the U.S). The people I know who, through bad luck or something outside their control, dropped down the ladder into the "poor" status, but maintained those positive aspects like work ethic, ability to delay gratification and so on, rarely remained poor for long.

There have been articles about more than a few people who won millions in the lottery only to end up bankrupt. There was a "poor" family in Atlanta who won an Extreme Home Make Over in '05; $450,000 home, 20 years paid on property taxes, other goodies. They took out a full mortgage and a month or so ago they lost the house. I could go on.

So, yes wealth can be stolen or generated on the backs of forced labor, but those examples don't really add much to the question of the "poor" here, in our economy.

As a thought experiment I would offer this: if you did have the power to gather up all the wealth currently to by had in the U.S. today, and distribute it exactly

RickC November 20, 2008 at 12:14 am

Sorry,

To continue:
. . .and distribute that wealth equally between every family in the country, how long would it take for that wealth to end up in a distribution pattern similar to the one at the beginning of our experiment? I don't think it would take that long.

dg lesvic November 20, 2008 at 2:01 am

Sam Grove,

You wrote:

"Wealth cannot be taken from the wealthy in a meaningful sense as all they really possess is entitlement to consume."

That implies that entitlement to consumption, money, purchasing power, is worthless.

But then you admitted that:

"Sure if I had a million dollars and gave it to you, YOU would suddenly be better off."

OK, so now we agree, money isn't worthless.

Then you say:

"BUT, if the government gives a million dollars to everyone who might qualify as poor, then millions of people will have millions of dollars, but the amount of stuff they can buy will remain pretty much the same."

But the socialists don't agree with that, and I don't either. The socialists say, not pretty much the same but a lot more; and I say, not pretty much the same but a lot less.

Why are they wrong, and I wrong?

Mr Nov 19, if that is your name:

You wrote:

"Yes, as a math problem, it depends on the numbers. As a real world problem, then the options are much more restricted."

Economics is not a mathematical but a logical, or, more precisely, praxeological science. There are no numbers, except as means of illustrating a point. But they don't enter into the analysis itself.

RickC:

Your judgments are sound. But that's just my opinion. Others have a different opinion.

Economics transcends judgment and differences of opinion, and like mathematics and logic, renders conclusions of universal and incontestable validity.

That isn't to say that persons won't deny them. They may deny that two and two is four, but that doesn't change the universal validity of the proposition that it is four.

I think we can all agree on this much:

Taking from the rich to give to the poor reduces society's total net income.

But how does it affect the poors' proportional share of the total. Will they wind up with a larger proportional share, the same proportional share, or a smaller proportional share?

And, whichever your conclusion, it isn't enough merely to state it. In economics, you have to prove it.

My own point of departure from Mises and I believe the rest of the Austrian School is my conclusion that they wind up not with a larger share of a smaller total but a smaller share of the smaller total, and what I offer as proof of that conclusion.

That's my challenge to the Austrian School.

Heretofore, it has been met by expulsion, first from the Mises Institute, then from the Austrian Economists blog.

So far, I think, that's pretty good recommendation.

Sam Grove November 20, 2008 at 3:04 am

but the amount of stuff they can buy will remain pretty much the same.

Let me expand that a bit: INITIALLY, (supposing an instantaneous and unannounced handing over of the millions) the amount of stuff they can buy will be pretty much the same as it was before the handout.

As soon as they all rush out to buy stuff, there will be a decreasing amount of stuff to buy.

"would they be better off with a larger share of the smaller pie or smaller share of the larger pie?

If you can't use numbers, then how do you quantify which is smaller and which is larger?

This question might be answerable as a math problem if numbers can be supplied to fill the equations, otherwise, the question is non sequitur, that is, either option offered in the question suggests an impossible result; a larger pie or a larger share.

If you are going to make it multiple choice, then you must also make the true answer available. You did not.

I think a smaller pie is inevitable, thus a larger share is also impossible under such a condition.

If the pie is smaller and more people line up to be defined as poor, then the individual shares will necessarily be smaller. It doesn't matter how much money you hand over to them.

For some reason, my name did not appear in that one post.

dg lesvic November 20, 2008 at 4:09 am

Sam Grove,

You wrote:

"Let me expand that a bit: INITIALLY, (supposing an instantaneous and unannounced handing over of the millions) the amount of stuff they can buy will be pretty much the same as it was before the handout.

As soon as they all rush out to buy stuff, there will be a decreasing amount of stuff to buy."

Therefore, what?

You wrote:

"If you can't use numbers, then how do you quantify which is smaller and which is larger?"

Actually I erred when I said, "not pretty much the same, but a lot less."

I should simply have said, "less."

For, as you have implied, without quantification, we cannot say how much less, just less.

You wrote:

"This question might be answerable as a math problem if numbers can be supplied to fill the equations."

For one thing, numbers could be supplied, but only arbitrarily, and useful only for purposes of illustration.

For another, there are no equations in economics.

You wrote:

"…otherwise, the question is non sequitur, that is, either option offered in the question suggests an impossible result; a larger pie or a larger share."

I don't get your point. There isn't going to be a larger pie. I trust we have already agreed that the pie will be smaller.

You wrote:

"If you are going to make it multiple choice, then you must also make the true answer available. You did not."

Again, I don't get your point.

I have said that the poor wind up with a smaller proportion of a smaller pie. I have offered proof of that proposition. Where is the error in it?

You wrote:

"I think a smaller pie is inevitable, thus a larger share is also impossible under such a condition."

My point all along has been that the share would not be larger but smaller.

Mises thought otherwise, that it would be larger. I have shown how I would prove otherwise. Where have I erred?

You wrote:

"If the pie is smaller and more people line up to be defined as poor, then the individual shares will necessarily be smaller. It doesn't matter how much money you hand over to them."

Smaller only in absolute terms, or in proportional terms as well? And, again, why?

I have told you why I say they would be smaller in proportional as well as absolute terms.

Which would you say, in absolute terms only, or proportional as well as absolute.

And, again, why?

T L Holaday November 20, 2008 at 8:45 am

Sam Grove,

It is not the number of thieves surely, but how much theft occurs. Kim Jong Il is a thief living in a nation of non-thieves. Is that nation better off than it would be if he had rivals? Do you find support anywhere in Hayek for the claim that a kleptomonarchy is superior to a kleptoligarchy?

In any event, I hope you have abandoned the formula "wealth arises from productive labor" and replaced it with "wealth arises from capitalizing a revenue stream." This formula explains the prosperity of both George Eastman and these nautical exemplars of Libertarianism.

vidyohs November 20, 2008 at 9:26 am

Now here is a real tidbit of fantasyland.

"It is not the number of thieves surely, but how much theft occurs. Kim Jong Il is a thief living in a nation of non-thieves. Posted by: T L Holaday | Nov 20, 2008 8:45:27 AM"

TL, are ytou seriously telling us that you believe that Kim Jong Il is the lone theif in a communist system? Are you so naive to think that he is capable of acting alone in controlling all those millions of people?

Are you so naive as to tell us that should he drop dead today that his successor would not step up with the stealing continued unabated?

What's the difference between a mugger in an alleyway and a socialist evangelical? Only the mugger's honesty.

RickC November 20, 2008 at 10:57 am

dg lesvic,

Yes, I could agree with the proposition that taking from the rich reduces society's total net income. As a non-economist, I would think that the questions you pose about the poor's proportional share of the "pie" could be measured only in relation to how comrehensive the redistribution scheme was, yes? In the U.S., which has a comparatively limited redistributional scheme the poor's portion of the pie would be larger, not because of the redistribution, but because the market has been allowed to continue functioning, however restricted, to increase overall wealth.

I get overwhelmed thinking of all the variables. Wouldn't the proportion also vary in relation to the amount of freedom allowed, even with redistribution, in a given society? How would one measure or compensate for the "black market" portion of the economy for instance?

Sam Grove November 20, 2008 at 11:22 am

I don't get your point. There isn't going to be a larger pie.

Because the question you posed: "would they be better off with a larger share of the smaller pie or smaller share of the larger pie?", gives an A or B choice. Neither choice is a valid result of the scenario.

For any individual, the answer would lie in the numbers that may be applied.

But this is not the scenario being contemplated. We are not speaking of an individual situation, but a collective one; the rich, the poor.

Sam Grove November 20, 2008 at 11:25 am

It is not the number of thieves surely, but how much theft occurs. Kim Jong Il is a thief living in a nation of non-thieves. Is that nation better off than it would be if he had rivals? Do you find support anywhere in Hayek for the claim that a kleptomonarchy is superior to a kleptoligarchy?

All governments are oligarchical.
Kim Jong can personally only consume so much, he also requires his legions of supporters, an army, a police force, etc. He in no way consumes all that is seized in his name.
Monarchs do not claim a right to consume all that is conquered, he claims the right to redistribute what is conquered among his minions.

Sam Grove November 20, 2008 at 11:40 am

or in proportional terms as well?

Proportional to what?
Relative to the wealthy?
Or to their prior situation?
Could there be a curve/crossover?

My point all along has been that the share would not be larger but smaller.

Unless you can shrink the number that would qualify, the share must shrink.
There will be more that manage to qualify.

Let me add here that I have come to the conclusion that true wealth lies in the ability/capacity to produce value.

That is something that cannot be redistributed.

Oil Shock November 20, 2008 at 12:59 pm

What is the productive labor of the Somali pirates [who have indeed become wealthy through their initiative and a lack of government interference]?

To the somali question – their productivity was zero. But the Oil they stole, assuming that is what you are refering to, it didn't come out of thin air, instead, it came out of the productive capacity somewhere.

As for the government interference, the reason why the pirates were able to seize the ship is precisely due to the uninteded consequence of regulations. The operators of the ship were not allowed carry necessary arms and defend their private property.

Sam Grove November 20, 2008 at 1:24 pm

From, uh, else where:

Writes Felix Moreno:

"The piracy case in Somalia is a perfect example of victim disarmament at sea. Most merchant ships are forbidden by their countries' laws from having weapons on board (a ban which is enforced by rigorous inspections), which leaves a 20.000tn ship worth hundreds of million of dollars vulnerable to a pirate dinghy with a crew of five armed with AKs and RPGs worth a few hundred bucks."

dg lesvic November 20, 2008 at 1:59 pm

RickC,

You wrote:

"I would think that the questions you pose about the poor's proportional share of the "pie" could be measured only in relation to how comrehensive the redistribution scheme was, yes?"

No. The principle is the same, regardless of the extent of its application.

And bear in mind too that there is no "measurement" in economics. It is not a mathematical but a "logical" science.

You wrote:

"In the U.S….the poor's portion of the pie would be larger…because the market has been allowed to continue functioning, however restricted, to increase overall wealth."

Whether wealth is increasing overall or not, it will still be less than it otherwise would have been.

How do you know the poor's proportion will be larger?

I have told you why I believe it will be smaller. Where have I erred?

You wrote:

"I get overwhelmed thinking of all the variables. Wouldn't the proportion also vary in relation to the amount of freedom allowed, even with redistribution, in a given society? How would one measure or compensate for the "black market" portion of the economy for instance?"

The specific method of economics is to eliminate variables and analyze one factor of change under the assumption that all other factors remain constant.

Sam Grove:

You wrote:

"the question you posed…gives an A or B choice. Neither choice is a valid result of the scenario."

I don't know what you mean.

You wrote:

"For any individual, the answer would lie in the numbers that may be applied."

There are no numbers. This is economics, not mathematics.

You wrote:

"We are not speaking of an individual situation, but a collective one; the rich, the poor."

That's right. Therefore, what?

You wrote:

"Proportional to what?"

To what the rich are getting.

You wrote:

"Could there be a curve/crossover?"

I don't know what you mean, but I never discuss economics in terms of curves.

They are an affectation and obfuscation.

You wrote:

"Unless you can shrink the number that would qualify, the share must shrink.
There will be more that manage to qualify."

That's what I have been saying.

You wrote:

"Let me add here that I have come to the conclusion that true wealth lies in the ability/capacity to produce value.

That is something that cannot be redistributed."

You had already acknowledged that it could.

Must we go over that ground again?

Anonymous November 20, 2008 at 3:05 pm

You had already acknowledged that it could.

Must we go over that ground again?

Goods and services can be redistributed, the ability to produce them cannot.

Sam Grove November 20, 2008 at 3:18 pm

"the question you posed…gives an A or B choice. Neither choice is a valid result of the scenario."

I don't know what you mean.

Read the question you posed:

"would they be better off with a larger share of the smaller pie or smaller share of the larger pie?

The question is either or. The correct answer is neither.

OTOH, The proper question should be:

"Would they be better off with a larger share of the smaller pie, smaller share of the larger pie, or would they be worse off in either case."

I've always found either/or questions annoying because the are presented as if one or the other choice is correct as though set out as a trick. I suspect many find them annoying. It's as though the questioner is trying to trap the responder.

Why not just offer all the alternatives? Plenty will choose the incorrect answer anyway.

You could just offer it as a multiple choice.

A. one case
B. the other case
C. either case
D. neither case

Tibor R. Machan November 20, 2008 at 4:57 pm

Most of these comments have hardly anything to do with my original points but then, so what? It occurs to me though that when free men and women air their views or post on blogs, they do tend to want to offer their very particular, idiosyncratic and exclusive spin. Quite individualistic but now and then an obstacle to an effective united front!

dg lesvic November 20, 2008 at 5:43 pm

I had just gotten through composing a respone to Sam Grove when it all got aborted through a technical glitch.

But, rather than go through all that again, I must, of course, get right to Prof Machan, whose comments may have been directed especially to me, as I was the one whose criticism of him got all of this going.

So, sorry, Sam, but I will say this much, about your annoyance with economists. You annoy them, too.

Just kiddin', Sam. I really think you're terrific.

Prof. Machan:

You wrote:

"Most of these comments have hardly anything to do with my original points."

I'm glad you said "most" rather than all. For my comment was certainly directed to your original point. Mine was that yours missed the point of those you were criticizing.

Here, again, my comment.

"Tibor Machan misses the point.

The Left believes that it does know what the common good is, and that it can be attained: the reduction of income inequality.

There is no substitute for the logical argument that the Left's means of attaining its goal are counterproductive, that they will not reduce but increase inequality."

You wrote:

"It occurs to me though that when free men and women air their views or post on blogs, they do tend to want to offer their very particular, idiosyncratic and exclusive spin. Quite individualistic but now and then an obstacle to an effective united front!"

But that begs the question.

Did you or did you not miss the point?

Anonymous November 20, 2008 at 5:53 pm

Hmm. I don't see where his point was about the left in particular. He's aiming at the whole mode of addressing society in a collective sense, which is done by the right as well.

Caring for others is something individuals have the capacity for; collectives do not have such capacity.

dg lesvic November 20, 2008 at 6:11 pm

Mr Nov 20, if that is your real name.

With all due respect, I'd like to see Prof. Machan speak for himself, which he's perfectly capable of doing.

Sam Grove November 20, 2008 at 8:24 pm

With all due respect, I'd like to see Prof. Machan speak for himself, which he's perfectly capable of doing.

Well, I hope my posting won't prevent him from making his own response, if he so chooses. I wasn't speaking for him, I was speaking for myself…obviously.

Are you sure the Mises people kicked you out for your assertion on redistribution.

Oil Shock November 20, 2008 at 8:47 pm

I used to see Lesvic's posts on the Austrian Economists blog. I think they were annoyed with Lesvic's obsession with his own theory. I don't know about Mises institute.

However, I must admit that Lesvic has got an interesting theory.

dg lesvic November 20, 2008 at 8:54 pm

Sam Grove,

You wrote:

"Are you sure the Mises people kicked you out for your assertion on redistribution."

It could be that jumping on a table top, mooning everyone, and hurling vile epithets at Prof. Rothbard had something to do with it.

But, for the moment, I really want to stay focused on Prof. Machan's expected and hoped for reply.

dg lesvic November 20, 2008 at 9:01 pm

I must respond to Oil Shock:

You wrote:

"I used to see Lesvic's posts on the Austrian Economists blog. I think they were annoyed with Lesvic's obsession with his own theory."

It was not just my obsession, but that of Mises and Hayek, and our own Prof Boudreaux, who called that issue "the bottom line."

What they were really annoyed with was their inability to win the argument.

Sam Grove November 20, 2008 at 9:35 pm

I don't quarrel at all with the theory. I find no flaw in it and it fits my own understanding of how the world works.

But perhaps the problem lay in the arguing.

Even economists are, at core, emotive beings.

dg lesvic November 20, 2008 at 10:05 pm

Sam Grove,

You wrote:

"I don't quarrel at all with the theory"

Then what the hell were you doing?

Oil Shock,

You people have the quaintest names.

Was your mother frightened by a camel?

You wrote:

"However, I must admit that Lesvic has got an interesting theory."

Thank you.

RickC November 20, 2008 at 11:24 pm

Okay, the true novice in the room is back, and still willing to expose himself.

dg lesvic,

I was not familiar with your theory. From what I've read on this thread I understand what you are saying is that the poor would have a proportionally greater share of the wealth in a completely free market system and an ever decreasing proportion in direct correlation to the size of the redistributional program. Correct?

If so it is an interesting theory. So any attempt at "spreading the wealth" is self-defeating?

Sam Grove November 20, 2008 at 11:31 pm

Then what the hell were you doing?

Taking issue with your presentation, your approach.

Asking a question as a multiple choice is annoying at best when the options do not include the correct answer and the question itself proposes impossibilities.

I'd say you got into a battle of egos. Those were some pretty big egos you were arguing with. Such conflicts usually cease to be about the correct answer, and end up being about winning.

dg lesvic November 21, 2008 at 12:31 am

RickC,

I can't completely follow everything you're saying and your rephrasing of my theory.

Let me state it again, in my own words.

Taking from the rich to give to the poor leaves the poor not with a larger but smaller proportional share of the pie.

What do I mean by proportional?

Suppose, prior to redistribution the poor as a whole had gotten seven pieces out of a ten piece pie, and the rich three. After it, the poor would get something less than the seven and the rich more than the three.

As to spreading the wealth, here's an excerpt from a little piece I wrote about Warren Buffett.

"His left hand does know what his right hand is doing. While the giggling capitalist supports Barack Obama, the Marxist with a smiley face, because he would "spread the wealth around," as a practising capitalist, he is doing just that himself, expanding his markets and spreading the wealth around as best he can.

If the capitalists themselves are doing so, what more could politicians do, but get in the way? We didn't need them to spread automobiles around, just a capitalist named Henry Ford, figuring out how to produce them at a price the masses could afford to pay, and without giggling about it; nor, to spread computers around, just more dour capitalists, cutting the cost from hundreds of thousands to hundreds of dollars apiece…

…Since price goes down as output goes up, and availability up as price goes down…the benefits of investment don't just "trickle" but pour down to the poor."

Sam Grove,

You wrote:

"I'd say you got into a battle of egos. Those were some pretty big egos you were arguing with. Such conflicts usually cease to be about the correct answer, and end up being about winning."

I'd say the same thing.

Sam Grove November 21, 2008 at 12:50 am

After it, the poor would get something less than the seven and the rich more than the three.

And the pie would be smaller as well. Right?

dg lesvic November 21, 2008 at 4:46 am

I composed that thesis about 35 years ago, and, at my age, and that time of night, my recollections of it all were a bit fuzzy.

But, yes, that is right, I believe.

God bless you.

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