The majority of a neutral tax doesn't fall on the majority of the population
I'm not sure if this is a response to me, but a) no such thing as a neutral tax, and b) wealth is not taxed.
I was responding to Kwezi's claim that much of the burden of higher taxation would fall on people paying the standard rate.
By neutral tax I mean something falling in the wafer-thing line between progressive and regressive.
Wealth is for the most part not taxed - council tax taxes wealth, somewhat regressively - but it should be.
The banding is itself a regressive mechanism. It's deliberately skewed to favour the higher bands - apologies to @Arethosemyfeet , but the rebanding exercise has been put off for three decades because of fears of those in the houses which have increased most in (largely unearned) price will be required to pay more.
Alan Cresswell: As @Doc Tor noted, the right-wing narrative almost always focuses on income tax which is generally the fairest way to tax income (the clue is in the name).
Remember, we were discussing the link between taxation and voting behaviour, which you, yourself, raised. I was pointing out that a significant proportion of the electorate of middling means are attracted to conservative parties because they approve their approach to income tax. The reason why the UK Conservatives focus on income tax is because it's an issue which strongly resonates with the electorate.
Doc Tor: The total tax take is a red herring - it's how that total is divided between wealth bands (and note, deliberately not saying income bands).
...........and possibly between different forms of taxation? I would have thought it the case that left-wing parties are associated with a bias towards graduated income tax for egalitarian reasons, which has placed themselves at an electoral disadvantage. One notes in that context the UK Labour Party finds itself pushed into promising not to increase the standard rate. I also recognise that you seem to prefer a tax system based on wealth, which may well be desirable, but that's not relevant to explaining the issue raised by Alan Cresswell.
Yes, the left are broadly in favour of a graduated income tax, and yes, thanks to the billionaire controlled press and their Tory stooges, people have been gaslit to think this is a bad idea.
Meanwhile, unearned wealth is taxed at either a vastly lower rate, or no rate at all. As I said earlier in the thread - this is not evidence that the system is broken. This is exactly how the system is supposed to be.
Since the tax havens are either Crown Dependencies or British Overseas Territories they are internally self-governing. Technically the U.K. government probably could legislate for the Isle of Man or the Channel Islands. There is a very long-established principle, however, that they don’t do so without consultation with and agreement of the organs of government in the islands.
AIUI there is no such power in relation to the British Overseas Territories where the U.K. government is responsible only for defence and foreign relations.
I’m not saying the U.K. government has no influence, but it can’t just pass laws changing the status of the Territories.
Doc Tor: As I said earlier in the thread - this is not evidence that the system is broken. This is exactly how the system is supposed to be.
I'm more than inclined to agree. You might also have mentioned the maintenance of tax havens in British territories, untouched by Labour Chancellors.
We have far bigger problems with London being the largest money-laundering centre on the planet. But certainly, transparency of ownership and a reasonable tax on turnover for non-domiciled companies would be a start at eroding the power of offshoring wealth.
...........and the UK would be bankrupt, apart from the proceeds of the arms industry!
Pretty certain that neither the banks nor the 'depositors' pay any tax on their ill-gotten gains.
But there's nothing to suggest that companies that find it extraordinarily profitable to trade here without paying tax would stop trading here with a sensible level of taxation. Sure, they'd complain, and hopefully the Treasury would say "ok, so set up a subsidiary UK company and we'll tax the profits that way."
If memory serves, I did once ask a Martian of this Parish, given that it had been suggested that wealthier left-wingers were "champagne socialists" and poor ones were envious, who could argue for a more socially just redistribution of wealth.
The answer was "no-one".
The question "are you a virgin ?" may be relevant from a doctor or a lover, but from your neighbour is impertinent and intrusive and disrespectful.
Similarly, the question "how much wealth do you own ?" may be relevant from a mortgage broker if I'm applying for a loan, or from a financial advisor I'm consulting, but from my neighbour is impertinent and intrusive and disrespectful.
In both cases, the answer is "mind your own effing business".
So who has the standing to ask that question for the purpose of deciding whether how much or how little I have is "fair" ?
If memory serves, I did once ask a Martian of this Parish, given that it had been suggested that wealthier left-wingers were "champagne socialists" and poor ones were envious, who could argue for a more socially just redistribution of wealth.
The answer was "no-one".
The question "are you a virgin ?" may be relevant from a doctor or a lover, but from your neighbour is impertinent and intrusive and disrespectful.
Similarly, the question "how much wealth do you own ?" may be relevant from a mortgage broker if I'm applying for a loan, or from a financial advisor I'm consulting, but from my neighbour is impertinent and intrusive and disrespectful.
In both cases, the answer is "mind your own effing business".
So who has the standing to ask that question for the purpose of deciding whether how much or how little I have is "fair" ?
The answer is "no-one".
I'm not sure whether it's more irritating when you twist what I say or when you completely ignore it and respond to something no-one said.
Obviously, a minarchy or night-watchman state would suit rich right-wing libertarians fine, as it leaves them with their wealth, which they can then use to rule over the rest of us. This isn't a surprise, and seeing that argument here isn't one either. It's a philosophical position that's coherent, even if many of us think it both deluded (many of those arguing for it assume they're going to be the ones in charge, while they're going to be dying in a ditch with the rest of us) and dangerous (I've not seen any experiment, thought- or practical, which doesn't descend into persecution and violence).
While the government have services they deliver, they need to be paid for out of taxation. If the poor aren't to be beggared, then it needs to a generally progressive tax based on the ability to pay. Consequently, the government need to know how much everyone earns or has - I certainly don't need to, because I'm not the one levying the taxes.
That’s a massive jump from Doc Tor’s argument that the government needs to know how much people earn in order to operate an income tax system to pay for the services it provides to Russ’s the government has a right to do whatever it needs to do…
The word ‘So’ at the beginning of Russ’s post suggests that there is an equivalence or direct line of consequence between it and the preceding post - a direct line which is signally lacking.
That’s a massive jump from Doc Tor’s argument that the government needs to know how much people earn in order to operate an income tax system to pay for the services it provides to Russ’s the government has a right to do whatever it needs to do…
The word ‘So’ at the beginning of Russ’s post suggests that there is an equivalence or direct line of consequence between it and the preceding post - a direct line which is signally lacking.
"While it is possible to have capitalism without democracy is it possible to have democracy without capitalism?"
One could argue that the nature of capitalism, to centralise money in a small minority, and remembering that money equates to power to make decisions, makes capitalism and democracy (at least with universal suffrage) strange bedfellows. When a small number of people have the money and significant influence over the processes of government then is that not something that erodes democracy?
Perhaps, but when people have a truly free vote they will generally vote for policies that make them, as individuals, better off.
Sorry to come back to this after the conversation has moved on.
I don't know if people have been watching the rather excellent series by Darren McGarvey on Monday evenings (iPlayer link for Class Wars - sorry that probably won't work outside the UK) but this weeks episode (which I only saw last night because I was doing something else on Monday) had an interesting demonstration of the Dictator Game, in which people are given cash and decide on how to distribute it between themselves and two others. The TV series is looking at how class persists with different attitudes between different people, and gave £100 to working, middle and upper class individuals. The working class lad keeps £40 and gives £30 to each of the others saying (paraphrase from memory) "we're all equal, but I can't split this equally three ways so kept a bit more for myself". The middle class lass makes the same split but reasoned "it's not earned, I was just given it and would want to share it around". The upper class toff kept it all to himself and was the last to explain why and blustered about "well, I wouldn't keep it, I'd give it all away to people I think need it" (to me, it didn't sound convincing rather he was blustering having just been shown to be less altruistic than the others ... those in the UK can watch it and see if they get the same impression). On properly conducted studies using the game (ie not TV stunts like what was shown) only about 1/3 of people actually keep the whole sum - most people are altruistic and share the money out.
Is it likely that if you're in the 'class' whereby your background and upbringing means you're in the third of people who keep the whole lot then you'd find it difficult to believe others would share it out? If, conversely you're in the 'class' where you would share it out will you react with the shock shown by the lassie in that show when it's revealed the upper-class guy would keep it all? Does that then reflect on how you expect people decide on what policies and parties to support? Do those who act altruistically expect others to be altruistic and vote for parties and policies that redistribute wealth, and find it shocking that there are people who vote solely for their interests? Do those who keep it all expect other people to be equally self-centred and find it surprising that some people vote against their personal financial interests?
Russ:. So the government has a right to do whatever it needs to do in order that it does what you want it to do ?
That's the socialist notion of rights ?
Not especially. The international system generally recognises a state as having an absolute right to dictate matters within its own borders. As Hobbes recognised, it is a Leviathan: a mortal god. All the rest, as Arthur Seton would say, is propaganda.
The international system generally recognises a state as having an absolute right to dictate matters within its own borders.
So, by that measure there will be no boycotts or sanctions against governments that enact genocide or abuses of human rights? We would never see nations attack another to enforce a regime change?
The TV series is looking at how class persists with different attitudes between different people, and gave £100 to working, middle and upper class individuals. The working class lad keeps £40 and gives £30 to each of the others saying (paraphrase from memory) "we're all equal, but I can't split this equally three ways so kept a bit more for myself". The middle class lass makes the same split but reasoned "it's not earned, I was just given it and would want to share it around". The upper class toff kept it all to himself and was the last to explain why and blustered about "well, I wouldn't keep it, I'd give it all away to people I think need it" (to me, it didn't sound convincing rather he was blustering having just been shown to be less altruistic than the others ... those in the UK can watch it and see if they get the same impression).
I'd like to know how they selected the individuals concerned - it seems to me like they deliberately picked altruistic working/middle class people and a selfish upper class person in order to come to the conclusion they wanted, namely "rich people bad".
It would also be interesting to see how people acted if their decision could never be known by the others, that is if there were no effects on how others see them. That would more closely equate to what someone chooses to do in the absolute privacy of the voting booth.
There's also a significant difference (alluded to by the middle class person in the show) between money you're just given and money you have earned yourself. It's a lot easier to be altruistic with money that isn't really "yours".
On properly conducted studies using the game (ie not TV stunts like what was shown) only about 1/3 of people actually keep the whole sum - most people are altruistic and share the money out.
1/3 is still a lot of people.
Is it likely that if you're in the 'class' whereby your background and upbringing means you're in the third of people who keep the whole lot then you'd find it difficult to believe others would share it out? If, conversely you're in the 'class' where you would share it out will you react with the shock shown by the lassie in that show when it's revealed the upper-class guy would keep it all? Does that then reflect on how you expect people decide on what policies and parties to support? Do those who act altruistically expect others to be altruistic and vote for parties and policies that redistribute wealth, and find it shocking that there are people who vote solely for their interests? Do those who keep it all expect other people to be equally self-centred and find it surprising that some people vote against their personal financial interests?
I've always found it hard to understand other people, especially when their motivations are completely different from my own.
Alan Cresswell:l So, by that measure there will be no boycotts or sanctions against governments that enact genocide or abuses of human rights? We would never see nations attack another to enforce a regime change?
Well, the international system is essentially a state of nature in which the stronger a power is economically, militarily and so on, the more it is able to enjoy its autonomy and enforce its will on others: China and the United States are particular examples. Regime changes are enforced by stronger powers on weaker ones as their interests dictate.
Individual states are regarded as sovereign both legally and practically, for reasons that are abundantly obvious- you don't mess with me and my allies and I won't mess with you and your allies!
Getting back to the matter under discussion, what I'm pointing out is that the state has a recognised right to act as a mortal God, which includes the right to know how much an individual earns and owns. Indeed, the right of ownership and the nature of ownership is determined by the state, and the state can decide the extent to which things are privately and publicly owned. Similarly, the extent, even the existence of privacy, is established by the state. There is no power that legitimately trumps the state, which is why the political question is not how extensive is its domain but who controls it and on what principles.
I've always found it hard to understand other people, especially when their motivations are completely different from my own.
The thing is, I'm pretty certain that most people's motivations are very similar - including mine.
Most people want a roof over their head, food on the table, meaningful work, a decent environment, access to healthcare and education, and the security of a functioning legal system.
Where we differ is how we approach that. I think the simplest, cheapest and most effective way of delivering my goals to me is to act collaboratively with my community, resulting in everyone getting most of what they want.
You? You seem to act as if everyone is actively working against you to deny you what you want. If you can't have everything (and your demands are frankly ludicrous), then no one can have anything.
It's not about motivation. It's about cooperation.
There is no power that legitimately trumps the state...
If "legitimacy" refers only to the statutes that the state writes, then that's pretty much true by definition but not saying anything much.
But if you mean moral legitimacy, then some of us believe in the ideal of rendering to Caesar only what is due to Caesar. Even if we bend to the power of Caesar in practice...
One of the tenets of democratic socialism seems to be that electing Caesar democratically gives him legitimacy.
The weak form of this - that his acts are more legitimate than if he were unelected - I wouldn't disagree with.
The strong form - that any act by an elected government is thereby legitimate- is something that I guess more people would deny. ("Straw man" they cry - "I didn't say that").
But try to pin people down as to where in between to draw the line - what are the limits of what an elected government can legitimately do - and it's hard to get a clear answer.
I've always found it hard to understand other people, especially when their motivations are completely different from my own.
The thing is, I'm pretty certain that most people's motivations are very similar - including mine.
That's what I thought too.
Most people want a roof over their head, food on the table, meaningful work, a decent environment, access to healthcare and education, and the security of a functioning legal system.
I'd dispute the "work" one. Though that may be because of how you're defining "work" - if you rephrased it as "something interesting or enjoyable to do" that would be different.
Also, you don't seem to think people want any luxuries.
Where we differ is how we approach that. I think the simplest, cheapest and most effective way of delivering my goals to me is to act collaboratively with my community, resulting in everyone getting most of what they want.
Whereas I don't think me having something relies on other people having it as well. Take the first item on your list - a roof over my head. How does the number of homeless people (even in my own city, never mind the other end of the country or the other side of the world) affect whether I can pay my mortgage? Of course, what would affect my ability to pay the mortgage would be having less income because more of it is being taken in tax to pay for those homeless people to have houses of their own.
You? You seem to act as if everyone is actively working against you to deny you what you want.
Maybe not everybody, but it certainly seems that you are.
If you can't have everything (and your demands are frankly ludicrous), then no one can have anything.
If other people having stuff means I can't have stuff, then we're in a them-or-me situation.
Which of my "demands" do you think are particularly ludicrous, anyway?
It's not about motivation. It's about cooperation.
I don't trust most other people enough to cooperate with them. I have to look after myself because no-one else will, at least not any more than they have to in order to keep me at the minimum level of health and fitness to give them what they want from me.
I think it's time we talked about Enlightened Self Interest.
Firstly, and possibly bizarrely, I want to talk about the Laffer Curve.
To remind everyone, the Laffer curve proposes a Bell shape curve for revenue vs tax rates. Essentially, if we marginal put tax rates on the x-axis, then the limits have to be 0% and 100%. On the y-axis we have the total tax-take for the government. The argument goes, that as you increase the marginal tax rate, the take initially increases, but above a certain level it decreases again as people are disincentivised to economic activity by 'punitive' tax rates. This is fairly intuitive as all of us may decide to take an overtime shift or not based on the return. I could work a 12-hour shift at £50/hr for example and my take-home pay depends on my tax-rate. So if it's 20% marginal rate than my take-home is £480 and if it's 80% then it's only £120. Inevitably I will weigh the amount of money I stand to gain against how much I value my time and what else I might be doing on that particular day.
Laffer's main argument is that once you get to certain levels of taxation you are in a lose-lose situation as the disincentive of 'punitive taxation' means less tax-take in the end and less economic activity so overall we are all worse off.
So the argument that is incredibly common is this: "You may feel that the rich should pay more but if we do put up their taxes, they will go elsewhere are thus we all end up worse off" I.e. this is an appeal to enlightened self-interest of the rest of us. Essentially we are asked to accept that the rich will not pay a fair share of taxation because if they do, it will make all of us worse off.
Now, the main issue here is that whilst the logic is correct and it is true that if you really disincentivise economic activity, you really do end up with a lose-lose situation, ultimately the argument is bollocks.
Let's un-pick that a little. Proponents of the Laffer curve will argue for low tax-rates; 20-30% or lower. It is not really true that the Laffer curve has been debunked. Nor do I think it will be, because as a thought experiment, it clearly works. However, if you look for empirical evidence as to what is thus the optimal rate of tax (both in terms of tax take and effects on economic activity) then the answer is either higher or a lot higher than current typical tax rates. Best guess is that it's in the 60-80% rate for marginal tax. I.e. People who argue for lower tax-rates based on the Laffer curve are actually arguing against what the curve shows! Hence the enlightened self-interest argument completely fails. (We aren't actually on the downslope of the curve, we are on the upslope!!)
There are lots of reasons for this; for a start, once you get into the hyper-wealthy category the numbers we are banding around are very different to what you and I live with. More importantly for the uber-wealthy their income is not earned- but unearned-income. Note here, I am using the term in the technical sense here, not as a pejorative term. So will I do an extra shift if my income is so heavily taxed that I will end up with very little take-home pay? Maybe not. Conversely, will I invest in this particular business (which will then create employment and a useful product for society) if the return on the investment is very heavily taxed? Well, the answer here is not so simple. But firstly, this is supposed to be the greatness of capitalism - it allows capital investment which enriches us all. The thing is though, that I have to put my money somewhere. Either it's in a bank account or under the mattress of investing in some project or bonds or businesses or shares etc. So unlike the overtime option, there is not the same trade-off between economic activity and personal cost (in time). Of course, those that invest want to see a return on their investment by if I make a million pounds and it's taxed at 80%, I've still made £200,000. Would I bother to make an investment with that expected return? Well, it depends on how much money I might make by keeping the potential investment pot in savings. Also, keep in mind that capital-gain taxes are typically at a much lower rate than income taxes. (The UK rates are 10% and 20%!).
So in this case the enlightened self-interest argument completely fails. However, if we turn it around, it is much, much stronger. It is in the interest of rich to make society as a whole better off.
This is true for lots of reasons but I will highlight two. Firstly vast inequality is bad for health. There's good data on this but no matter how rich I am, my health will be better if I live in a healthy society. This is obviously true for infectious diseases but also can be seen in other areas too.
Moreover, ultimately a healthy well-educated and prosperous society is good for the wealthy too. Where else will they find customers? And if you have massive wealth divide then you end up with feudalism and huge security costs for the wealthy few. It's an odd fact that Somalia was the last African Country to get a Coca Cola bottling factory - coz the lack of government in the 90s meant it was unsafe. When capitalism meets truly small government!
Joseph Stiglitz is a Nobel-Prize winning economist who has written about the costs of extreme inequality. He notes how as inequality increases, so the economy as a whole becomes more unstable and ultimately the wealth of the wealthy is dependent on society. In the absence of a peaceful world order, maintaining one's wealth becomes quite difficult.
So let's talk about what Capitalism actually means. I don't want to get lost in the semantics here, and if you disagree with my definitions, that's fine but the underlying points still hold even if I need to refine my terminology slightly.
Firstly what most people think it means: It means I am free to choose what I do in the market to earn money and then spend it. The harder and smarter I work, the more I make.
This is a definition with a couple of key positives to it. Firstly, it is rooted in freedom. One of the many horrors of Communism and a planned economy is that lack of freedom. You do the job you are told to do. I am free to decide how much I value my time, to work as much or as little as I want and then decide what I do with the money I earn. I have an expensive hobby (not during lockdown) whereby I fly microlights. I work hard to earn the money I have and choose to spend it this way.
The other key positive is that it incentivises economic activity; i.e. each individual sees a benefit from working. (Of course, it is also true that people are incentivised by things other than money!)
I think you'd struggle to find an economist who doesn't think that's how the free-market should work. Businesses develop, grow and fail. Individuals work for what they want and buy goods and services from each other. That's what we are told freedom looks like.
I am not going to go any further here with the problem that it's not in any way a level playing field but it really isn't. What is freedom for some is nothing short of slavery for others and helluva lot in between. As I have noted elsewhere, the Race of Life has a very staggered start.
The key argument here is that no other economic system brings more good to society as a whole. This is not quite true and is a misunderstanding/misrepresentation of that data but I'll leave that for a moment except to note that Stiglitz has written a lot on the shape of markets. Markets are not a natural phenomenon is the way some right-wingers talk about them. They are shaped by the regulations we choose to put on them. We can choose different ones and shape the markets differently. That is not an argument for a planned economy but an acknowledgement of the simple fact that the current form of capitalism is not inevitable nor fixed. We have shaped it this way; we can shape it differently if we choose to.
Secondly, what Capitalism actually means: Capital has more rights than people
What I am getting at here is a combination of things. Essentially we have very distorted markets and lots of businesses are subsidised indirectly. I want to be clear on this point: If your business is not viable without paying your staff a fair wage, then your business is not viable. As has been mentioned before, housing benefit is a subsidy to business.
Also, since ~1980, capital controls have been reduced and scrapped across the world. The argument that it's good for countries and people as it encourages inward investment is only partially true. It is the primary reason for out-sourcing. If people moved as freely as money, out-sourcing would not exist. Let's explore that point a little with reference to the USA and the EU. Firstly, to clarify, what we are talking about is that historically most countries limited how much money one could take out. The argument goes that no-one will want to invest in your country if you don't let them take the profit out. Hence over the past 4 decades, capital controls have been reduced and eradicated across multiple markets.
The USA is a single market. (I mean, obviously). There are no capital controls between the states. But let's play that game for the moment. Let's imagine that you live and run a factory in New York. You decide to move your business to New Hampshire and pay your staff less money. You can do this because you can still take the profits you make in New Hampshire back to your home in New York. I.e. New Hampshire does not have capital controls that stop you doing this. The thing is, your workers are free to move as well. So if you don't pay your workers in New Hampshire enough, you might struggle to attract them as they can easily move the other way to New York and work for someone else who pays better. Obviously, there are some differences in wage rates around the US, but the ability of people to move (non-work-life-allowing) is a mitigating effect on this and drives a levelling of wages. It's not perfect but it does have this effect. The same is sort of true about the EU. I say sort-of because research shows that cultural and language differences mean that Europeans are much less likely to move for work than Americans within the USA. (It still happens but not to such a large extent). I like to think of it as analogous to osmosis! The flow of water in one direction and the flow of electrolytes in the other until equilibrium is reached.
So what's outsourcing all about? It's about moving the money to a place where people can't move so easily. Why are wages so much lower in Mexico than New York? Partly because it's very hard for the people of Mexico to move to New York for work. If they could do so easily, it would drive up Mexican wages as corporations were forced to compete for workers.
So, as I said, Capital is the key to capitalism. The clue's in the name. I want to finish with lovely irony though. As I'm sure everyone here knows, money isn't real. It is created out of nothing on a continual basis by banks. The central banks control the money supply. Capital is what underpins everything with a system designed to ensure that capital can generate a return. That's just crazy - the point of our economic system is that it's meant to serve the people, not the other way around! But here's the ironic bit; currency belongs to nation states. It is the credibility of the nation state that generates the credibility of the currency. So here's the fact for you: Capitalism means that the Government owns everything...
@Marvin, you could have just said "It's me, not you."
And you'd be right. It is you. Even the Torlets were easier to reason with when they were toddlers, and that was exhausting enough.
I didn't say anything about luxuries, because most people see an occasional takeaway as a luxury, not multiple foreign holidays a year. I'm well aware of your aversion to work, but again, that's just you. If you can't see that the price you paid for your house being directly connected to the supply of houses, the lunacy of 'buy to let', and the number of homeless people, then I can't help you. If your demands are so outrageous that you'd literally leave people destitute rather than go without yourself, then I don't want to negotiate with you.
Your "I don't trust most other people enough to cooperate with them. I have to look after myself because no-one else will, at least not any more than they have to in order to keep me at the minimum level of health and fitness to give them what they want from me" is your problem. It's not your solution.
Interesting stuff, @alienfromzog. Not sure where to start in reply. For now I'll just note a couple of things.
One is that on a thread about what socialism means, you're talking about capitalism. Rather than talking about how socialists think and what they value, I think you're implicitly defining socialism in opposition to capitalism ?
And then you introduce another opposition - between capital and people.
In economics it's usual and meaningful to talk about the interests of land, labour and capital and how these interests can conflict.
But this is on the understanding that people have the ability to labour, and people own land, and people have capital (savings, pension funds), and people consume what is produced by the combination of the three elements. Identifying people with labour is a stunted view of humanity.
I welcome your agreement that people are motivated by more than the purely material. Some socialists can be very materialistic.
I like the phrase "uber-wealthy". But it often seems that socialism is rather too concerned with the uber-wealthy, who are few in number.
I like the phrase "uber-wealthy". But it often seems that socialism is rather too concerned with the uber-wealthy, who are few in number.
Too concerned? Is it not reasonable to be concerned about a tiny minority who are able to leverage their wildly disproportionate wealth to exert power over the majority?
I didn't say anything about luxuries, because most people see an occasional takeaway as a luxury, not multiple foreign holidays a year.
Again with the unsupported "most". And even if the "most" is true, that doesn't mean it's necessarily the 'right' amount of luxuries to have.
I'm well aware of your aversion to work, but again, that's just you.
And yet the lottery remains incredibly popular.
It's even a concept that has appeared in socialist - even Marxist - thought, notably Paul Lafargue.
Your "I don't trust most other people enough to cooperate with them. I have to look after myself because no-one else will, at least not any more than they have to in order to keep me at the minimum level of health and fitness to give them what they want from me" is your problem. It's not your solution.
The world is full of people who just want to use me (and everyone else) for their own ends. Why should I trust them?
Scientific research shows that in times of major crisis people tend to cooperate together. As we have seen, for example, during this pandemic. Seeing everyone else as a rival is not an accurate representation of how most large groups of humans actually function.
The thing is, knowing that the world has (some) people in it who are simply exploiters is usually the drive for labour to organise so that the exploited can stop themselves from being picked on and demand better wages and conditions.
Marvin seems to have not taken this valuable lesson to heart.
Interesting stuff, @alienfromzog. Not sure where to start in reply. For now I'll just note a couple of things.
One is that on a thread about what socialism means, you're talking about capitalism. Rather than talking about how socialists think and what they value, I think you're implicitly defining socialism in opposition to capitalism ?
And then you introduce another opposition - between capital and people.
In economics it's usual and meaningful to talk about the interests of land, labour and capital and how these interests can conflict.
But this is on the understanding that people have the ability to labour, and people own land, and people have capital (savings, pension funds), and people consume what is produced by the combination of the three elements. Identifying people with labour is a stunted view of humanity.
I welcome your agreement that people are motivated by more than the purely material. Some socialists can be very materialistic.
I like the phrase "uber-wealthy". But it often seems that socialism is rather too concerned with the uber-wealthy, who are few in number.
I find it necessary to talk about capitalism here because of the strawman argument against democractic socialism presented here. I.e. the only alternative to Communism is a particularly exploitative form of capitalism.
I define socialism in two ways. And it is for these two reasons that I define myself politically as an old-fashioned Christian Socialist.
1. My political philosophy is born out of an outworking of my faith. (I am not trying to put God in a particular political party here. I simply mean that my principles of fairness, of caring for each other are a simple consequence of my understanding of Jesus' teaching). In summary; These are my Christian principles; therefore this is what I believe my politics should be. As Benn famously said, The UK Labour Party's version of socialism owes far more to Methodism than to Marx.
2. By the strength of our common endeavour we achieve more than we achieve alone.*
AFZ
*I assume most Shipmates will recognise this phrase.
Scientific research shows that in times of major crisis people tend to cooperate together. As we have seen, for example, during this pandemic. Seeing everyone else as a rival is not an accurate representation of how most large groups of humans actually function.
There’s a fundamental difference between cooperating with a group where you all know each other and cooperating with a group the size of most modern countries. Problems start when you extrapolate from the former to the latter.
To me, “you cooperate with your friends, so why not with the whole country/world” is on a par with saying “you have sex with your wife, so why not with the whole country/world”.
Comments
By neutral tax I mean something falling in the wafer-thing line between progressive and regressive.
Wealth is for the most part not taxed - council tax taxes wealth, somewhat regressively - but it should be.
As someone who has previously rented a '70s bungalow mysteriously categorised as band E: no it bloody isn't.
A Land Value Tax, on the other hand, ...
Remember, we were discussing the link between taxation and voting behaviour, which you, yourself, raised. I was pointing out that a significant proportion of the electorate of middling means are attracted to conservative parties because they approve their approach to income tax. The reason why the UK Conservatives focus on income tax is because it's an issue which strongly resonates with the electorate.
...........and possibly between different forms of taxation? I would have thought it the case that left-wing parties are associated with a bias towards graduated income tax for egalitarian reasons, which has placed themselves at an electoral disadvantage. One notes in that context the UK Labour Party finds itself pushed into promising not to increase the standard rate. I also recognise that you seem to prefer a tax system based on wealth, which may well be desirable, but that's not relevant to explaining the issue raised by Alan Cresswell.
Meanwhile, unearned wealth is taxed at either a vastly lower rate, or no rate at all. As I said earlier in the thread - this is not evidence that the system is broken. This is exactly how the system is supposed to be.
I'm more than inclined to agree. You might also have mentioned the maintenance of tax havens in British territories, untouched by Labour Chancellors.
AIUI there is no such power in relation to the British Overseas Territories where the U.K. government is responsible only for defence and foreign relations.
I’m not saying the U.K. government has no influence, but it can’t just pass laws changing the status of the Territories.
We have far bigger problems with London being the largest money-laundering centre on the planet. But certainly, transparency of ownership and a reasonable tax on turnover for non-domiciled companies would be a start at eroding the power of offshoring wealth.
Pretty certain that neither the banks nor the 'depositors' pay any tax on their ill-gotten gains.
But there's nothing to suggest that companies that find it extraordinarily profitable to trade here without paying tax would stop trading here with a sensible level of taxation. Sure, they'd complain, and hopefully the Treasury would say "ok, so set up a subsidiary UK company and we'll tax the profits that way."
The question "are you a virgin ?" may be relevant from a doctor or a lover, but from your neighbour is impertinent and intrusive and disrespectful.
Similarly, the question "how much wealth do you own ?" may be relevant from a mortgage broker if I'm applying for a loan, or from a financial advisor I'm consulting, but from my neighbour is impertinent and intrusive and disrespectful.
In both cases, the answer is "mind your own effing business".
So who has the standing to ask that question for the purpose of deciding whether how much or how little I have is "fair" ?
The answer is "no-one".
I'm not sure whether it's more irritating when you twist what I say or when you completely ignore it and respond to something no-one said.
While the government have services they deliver, they need to be paid for out of taxation. If the poor aren't to be beggared, then it needs to a generally progressive tax based on the ability to pay. Consequently, the government need to know how much everyone earns or has - I certainly don't need to, because I'm not the one levying the taxes.
That's the socialist notion of rights ?
PS: hope that cheers you up, AFZ...
The word ‘So’ at the beginning of Russ’s post suggests that there is an equivalence or direct line of consequence between it and the preceding post - a direct line which is signally lacking.
Been a lot of that from him on this thread.
I don't know if people have been watching the rather excellent series by Darren McGarvey on Monday evenings (iPlayer link for Class Wars - sorry that probably won't work outside the UK) but this weeks episode (which I only saw last night because I was doing something else on Monday) had an interesting demonstration of the Dictator Game, in which people are given cash and decide on how to distribute it between themselves and two others. The TV series is looking at how class persists with different attitudes between different people, and gave £100 to working, middle and upper class individuals. The working class lad keeps £40 and gives £30 to each of the others saying (paraphrase from memory) "we're all equal, but I can't split this equally three ways so kept a bit more for myself". The middle class lass makes the same split but reasoned "it's not earned, I was just given it and would want to share it around". The upper class toff kept it all to himself and was the last to explain why and blustered about "well, I wouldn't keep it, I'd give it all away to people I think need it" (to me, it didn't sound convincing rather he was blustering having just been shown to be less altruistic than the others ... those in the UK can watch it and see if they get the same impression). On properly conducted studies using the game (ie not TV stunts like what was shown) only about 1/3 of people actually keep the whole sum - most people are altruistic and share the money out.
Is it likely that if you're in the 'class' whereby your background and upbringing means you're in the third of people who keep the whole lot then you'd find it difficult to believe others would share it out? If, conversely you're in the 'class' where you would share it out will you react with the shock shown by the lassie in that show when it's revealed the upper-class guy would keep it all? Does that then reflect on how you expect people decide on what policies and parties to support? Do those who act altruistically expect others to be altruistic and vote for parties and policies that redistribute wealth, and find it shocking that there are people who vote solely for their interests? Do those who keep it all expect other people to be equally self-centred and find it surprising that some people vote against their personal financial interests?
Not especially. The international system generally recognises a state as having an absolute right to dictate matters within its own borders. As Hobbes recognised, it is a Leviathan: a mortal god. All the rest, as Arthur Seton would say, is propaganda.
This post should be preserved for posterity for having precisely no merit whatsoever.
No. Just ... no.
The Deano-Thatcheright Memorial Trophy?
I'd like to know how they selected the individuals concerned - it seems to me like they deliberately picked altruistic working/middle class people and a selfish upper class person in order to come to the conclusion they wanted, namely "rich people bad".
It would also be interesting to see how people acted if their decision could never be known by the others, that is if there were no effects on how others see them. That would more closely equate to what someone chooses to do in the absolute privacy of the voting booth.
There's also a significant difference (alluded to by the middle class person in the show) between money you're just given and money you have earned yourself. It's a lot easier to be altruistic with money that isn't really "yours".
1/3 is still a lot of people.
I've always found it hard to understand other people, especially when their motivations are completely different from my own.
Well, the international system is essentially a state of nature in which the stronger a power is economically, militarily and so on, the more it is able to enjoy its autonomy and enforce its will on others: China and the United States are particular examples. Regime changes are enforced by stronger powers on weaker ones as their interests dictate.
Individual states are regarded as sovereign both legally and practically, for reasons that are abundantly obvious- you don't mess with me and my allies and I won't mess with you and your allies!
Getting back to the matter under discussion, what I'm pointing out is that the state has a recognised right to act as a mortal God, which includes the right to know how much an individual earns and owns. Indeed, the right of ownership and the nature of ownership is determined by the state, and the state can decide the extent to which things are privately and publicly owned. Similarly, the extent, even the existence of privacy, is established by the state. There is no power that legitimately trumps the state, which is why the political question is not how extensive is its domain but who controls it and on what principles.
The thing is, I'm pretty certain that most people's motivations are very similar - including mine.
Most people want a roof over their head, food on the table, meaningful work, a decent environment, access to healthcare and education, and the security of a functioning legal system.
Where we differ is how we approach that. I think the simplest, cheapest and most effective way of delivering my goals to me is to act collaboratively with my community, resulting in everyone getting most of what they want.
You? You seem to act as if everyone is actively working against you to deny you what you want. If you can't have everything (and your demands are frankly ludicrous), then no one can have anything.
It's not about motivation. It's about cooperation.
If "legitimacy" refers only to the statutes that the state writes, then that's pretty much true by definition but not saying anything much.
But if you mean moral legitimacy, then some of us believe in the ideal of rendering to Caesar only what is due to Caesar. Even if we bend to the power of Caesar in practice...
One of the tenets of democratic socialism seems to be that electing Caesar democratically gives him legitimacy.
The weak form of this - that his acts are more legitimate than if he were unelected - I wouldn't disagree with.
The strong form - that any act by an elected government is thereby legitimate- is something that I guess more people would deny. ("Straw man" they cry - "I didn't say that").
But try to pin people down as to where in between to draw the line - what are the limits of what an elected government can legitimately do - and it's hard to get a clear answer.
That's what I thought too.
I'd dispute the "work" one. Though that may be because of how you're defining "work" - if you rephrased it as "something interesting or enjoyable to do" that would be different.
Also, you don't seem to think people want any luxuries.
Whereas I don't think me having something relies on other people having it as well. Take the first item on your list - a roof over my head. How does the number of homeless people (even in my own city, never mind the other end of the country or the other side of the world) affect whether I can pay my mortgage? Of course, what would affect my ability to pay the mortgage would be having less income because more of it is being taken in tax to pay for those homeless people to have houses of their own.
Maybe not everybody, but it certainly seems that you are.
If other people having stuff means I can't have stuff, then we're in a them-or-me situation.
Which of my "demands" do you think are particularly ludicrous, anyway?
I don't trust most other people enough to cooperate with them. I have to look after myself because no-one else will, at least not any more than they have to in order to keep me at the minimum level of health and fitness to give them what they want from me.
Firstly, and possibly bizarrely, I want to talk about the Laffer Curve.
To remind everyone, the Laffer curve proposes a Bell shape curve for revenue vs tax rates. Essentially, if we marginal put tax rates on the x-axis, then the limits have to be 0% and 100%. On the y-axis we have the total tax-take for the government. The argument goes, that as you increase the marginal tax rate, the take initially increases, but above a certain level it decreases again as people are disincentivised to economic activity by 'punitive' tax rates. This is fairly intuitive as all of us may decide to take an overtime shift or not based on the return. I could work a 12-hour shift at £50/hr for example and my take-home pay depends on my tax-rate. So if it's 20% marginal rate than my take-home is £480 and if it's 80% then it's only £120. Inevitably I will weigh the amount of money I stand to gain against how much I value my time and what else I might be doing on that particular day.
Laffer's main argument is that once you get to certain levels of taxation you are in a lose-lose situation as the disincentive of 'punitive taxation' means less tax-take in the end and less economic activity so overall we are all worse off.
So the argument that is incredibly common is this: "You may feel that the rich should pay more but if we do put up their taxes, they will go elsewhere are thus we all end up worse off" I.e. this is an appeal to enlightened self-interest of the rest of us. Essentially we are asked to accept that the rich will not pay a fair share of taxation because if they do, it will make all of us worse off.
Now, the main issue here is that whilst the logic is correct and it is true that if you really disincentivise economic activity, you really do end up with a lose-lose situation, ultimately the argument is bollocks.
Let's un-pick that a little. Proponents of the Laffer curve will argue for low tax-rates; 20-30% or lower. It is not really true that the Laffer curve has been debunked. Nor do I think it will be, because as a thought experiment, it clearly works. However, if you look for empirical evidence as to what is thus the optimal rate of tax (both in terms of tax take and effects on economic activity) then the answer is either higher or a lot higher than current typical tax rates. Best guess is that it's in the 60-80% rate for marginal tax. I.e. People who argue for lower tax-rates based on the Laffer curve are actually arguing against what the curve shows! Hence the enlightened self-interest argument completely fails. (We aren't actually on the downslope of the curve, we are on the upslope!!)
There are lots of reasons for this; for a start, once you get into the hyper-wealthy category the numbers we are banding around are very different to what you and I live with. More importantly for the uber-wealthy their income is not earned- but unearned-income. Note here, I am using the term in the technical sense here, not as a pejorative term. So will I do an extra shift if my income is so heavily taxed that I will end up with very little take-home pay? Maybe not. Conversely, will I invest in this particular business (which will then create employment and a useful product for society) if the return on the investment is very heavily taxed? Well, the answer here is not so simple. But firstly, this is supposed to be the greatness of capitalism - it allows capital investment which enriches us all. The thing is though, that I have to put my money somewhere. Either it's in a bank account or under the mattress of investing in some project or bonds or businesses or shares etc. So unlike the overtime option, there is not the same trade-off between economic activity and personal cost (in time). Of course, those that invest want to see a return on their investment by if I make a million pounds and it's taxed at 80%, I've still made £200,000. Would I bother to make an investment with that expected return? Well, it depends on how much money I might make by keeping the potential investment pot in savings. Also, keep in mind that capital-gain taxes are typically at a much lower rate than income taxes. (The UK rates are 10% and 20%!).
So in this case the enlightened self-interest argument completely fails. However, if we turn it around, it is much, much stronger. It is in the interest of rich to make society as a whole better off.
This is true for lots of reasons but I will highlight two. Firstly vast inequality is bad for health. There's good data on this but no matter how rich I am, my health will be better if I live in a healthy society. This is obviously true for infectious diseases but also can be seen in other areas too.
Moreover, ultimately a healthy well-educated and prosperous society is good for the wealthy too. Where else will they find customers? And if you have massive wealth divide then you end up with feudalism and huge security costs for the wealthy few. It's an odd fact that Somalia was the last African Country to get a Coca Cola bottling factory - coz the lack of government in the 90s meant it was unsafe. When capitalism meets truly small government!
Joseph Stiglitz is a Nobel-Prize winning economist who has written about the costs of extreme inequality. He notes how as inequality increases, so the economy as a whole becomes more unstable and ultimately the wealth of the wealthy is dependent on society. In the absence of a peaceful world order, maintaining one's wealth becomes quite difficult.
<continued>
So let's talk about what Capitalism actually means. I don't want to get lost in the semantics here, and if you disagree with my definitions, that's fine but the underlying points still hold even if I need to refine my terminology slightly.
Firstly what most people think it means:
It means I am free to choose what I do in the market to earn money and then spend it. The harder and smarter I work, the more I make.
This is a definition with a couple of key positives to it. Firstly, it is rooted in freedom. One of the many horrors of Communism and a planned economy is that lack of freedom. You do the job you are told to do. I am free to decide how much I value my time, to work as much or as little as I want and then decide what I do with the money I earn. I have an expensive hobby (not during lockdown) whereby I fly microlights. I work hard to earn the money I have and choose to spend it this way.
The other key positive is that it incentivises economic activity; i.e. each individual sees a benefit from working. (Of course, it is also true that people are incentivised by things other than money!)
I think you'd struggle to find an economist who doesn't think that's how the free-market should work. Businesses develop, grow and fail. Individuals work for what they want and buy goods and services from each other. That's what we are told freedom looks like.
I am not going to go any further here with the problem that it's not in any way a level playing field but it really isn't. What is freedom for some is nothing short of slavery for others and helluva lot in between. As I have noted elsewhere, the Race of Life has a very staggered start.
The key argument here is that no other economic system brings more good to society as a whole. This is not quite true and is a misunderstanding/misrepresentation of that data but I'll leave that for a moment except to note that Stiglitz has written a lot on the shape of markets. Markets are not a natural phenomenon is the way some right-wingers talk about them. They are shaped by the regulations we choose to put on them. We can choose different ones and shape the markets differently. That is not an argument for a planned economy but an acknowledgement of the simple fact that the current form of capitalism is not inevitable nor fixed. We have shaped it this way; we can shape it differently if we choose to.
Secondly, what Capitalism actually means:
Capital has more rights than people
What I am getting at here is a combination of things. Essentially we have very distorted markets and lots of businesses are subsidised indirectly. I want to be clear on this point: If your business is not viable without paying your staff a fair wage, then your business is not viable. As has been mentioned before, housing benefit is a subsidy to business.
Also, since ~1980, capital controls have been reduced and scrapped across the world. The argument that it's good for countries and people as it encourages inward investment is only partially true. It is the primary reason for out-sourcing. If people moved as freely as money, out-sourcing would not exist. Let's explore that point a little with reference to the USA and the EU. Firstly, to clarify, what we are talking about is that historically most countries limited how much money one could take out. The argument goes that no-one will want to invest in your country if you don't let them take the profit out. Hence over the past 4 decades, capital controls have been reduced and eradicated across multiple markets.
The USA is a single market. (I mean, obviously). There are no capital controls between the states. But let's play that game for the moment. Let's imagine that you live and run a factory in New York. You decide to move your business to New Hampshire and pay your staff less money. You can do this because you can still take the profits you make in New Hampshire back to your home in New York. I.e. New Hampshire does not have capital controls that stop you doing this. The thing is, your workers are free to move as well. So if you don't pay your workers in New Hampshire enough, you might struggle to attract them as they can easily move the other way to New York and work for someone else who pays better. Obviously, there are some differences in wage rates around the US, but the ability of people to move (non-work-life-allowing) is a mitigating effect on this and drives a levelling of wages. It's not perfect but it does have this effect. The same is sort of true about the EU. I say sort-of because research shows that cultural and language differences mean that Europeans are much less likely to move for work than Americans within the USA. (It still happens but not to such a large extent). I like to think of it as analogous to osmosis! The flow of water in one direction and the flow of electrolytes in the other until equilibrium is reached.
So what's outsourcing all about? It's about moving the money to a place where people can't move so easily. Why are wages so much lower in Mexico than New York? Partly because it's very hard for the people of Mexico to move to New York for work. If they could do so easily, it would drive up Mexican wages as corporations were forced to compete for workers.
So, as I said, Capital is the key to capitalism. The clue's in the name. I want to finish with lovely irony though. As I'm sure everyone here knows, money isn't real. It is created out of nothing on a continual basis by banks. The central banks control the money supply. Capital is what underpins everything with a system designed to ensure that capital can generate a return. That's just crazy - the point of our economic system is that it's meant to serve the people, not the other way around! But here's the ironic bit; currency belongs to nation states. It is the credibility of the nation state that generates the credibility of the currency. So here's the fact for you: Capitalism means that the Government owns everything...
AFZ
And you'd be right. It is you. Even the Torlets were easier to reason with when they were toddlers, and that was exhausting enough.
I didn't say anything about luxuries, because most people see an occasional takeaway as a luxury, not multiple foreign holidays a year. I'm well aware of your aversion to work, but again, that's just you. If you can't see that the price you paid for your house being directly connected to the supply of houses, the lunacy of 'buy to let', and the number of homeless people, then I can't help you. If your demands are so outrageous that you'd literally leave people destitute rather than go without yourself, then I don't want to negotiate with you.
Your "I don't trust most other people enough to cooperate with them. I have to look after myself because no-one else will, at least not any more than they have to in order to keep me at the minimum level of health and fitness to give them what they want from me" is your problem. It's not your solution.
One is that on a thread about what socialism means, you're talking about capitalism. Rather than talking about how socialists think and what they value, I think you're implicitly defining socialism in opposition to capitalism ?
And then you introduce another opposition - between capital and people.
In economics it's usual and meaningful to talk about the interests of land, labour and capital and how these interests can conflict.
But this is on the understanding that people have the ability to labour, and people own land, and people have capital (savings, pension funds), and people consume what is produced by the combination of the three elements. Identifying people with labour is a stunted view of humanity.
I welcome your agreement that people are motivated by more than the purely material. Some socialists can be very materialistic.
I like the phrase "uber-wealthy". But it often seems that socialism is rather too concerned with the uber-wealthy, who are few in number.
Too concerned? Is it not reasonable to be concerned about a tiny minority who are able to leverage their wildly disproportionate wealth to exert power over the majority?
Again with the unsupported "most". And even if the "most" is true, that doesn't mean it's necessarily the 'right' amount of luxuries to have.
And yet the lottery remains incredibly popular.
It's even a concept that has appeared in socialist - even Marxist - thought, notably Paul Lafargue.
The world is full of people who just want to use me (and everyone else) for their own ends. Why should I trust them?
Again, believing this to be true is your problem, not your solution.
I can only show you the path out of this mindset. I can't make you take it.
Even if this were true; your current problems would be caused by those who are rich and powerful, not by those who aren't.
Marvin seems to have not taken this valuable lesson to heart.
I find it necessary to talk about capitalism here because of the strawman argument against democractic socialism presented here. I.e. the only alternative to Communism is a particularly exploitative form of capitalism.
I define socialism in two ways. And it is for these two reasons that I define myself politically as an old-fashioned Christian Socialist.
1. My political philosophy is born out of an outworking of my faith. (I am not trying to put God in a particular political party here. I simply mean that my principles of fairness, of caring for each other are a simple consequence of my understanding of Jesus' teaching). In summary; These are my Christian principles; therefore this is what I believe my politics should be. As Benn famously said, The UK Labour Party's version of socialism owes far more to Methodism than to Marx.
2. By the strength of our common endeavour we achieve more than we achieve alone.*
AFZ
*I assume most Shipmates will recognise this phrase.
The bastardised betrayal that is the current version of Clause IV of the Labour Party constitution?
I recognise it only as another way of saying "Unity is strength".
Which is the argument for totalitarianism. We're more effective when we all march to the beat of the same drum, so shut up and do what you're told....
Wow. That is unbelievably silly.
Like I said before - we need a Not Even Wrong award.
A common endeavour is a shared one, not one imposed.
Is this whole thing going to come down to whether we see human nature as basically good or basically bad?
There’s a fundamental difference between cooperating with a group where you all know each other and cooperating with a group the size of most modern countries. Problems start when you extrapolate from the former to the latter.
To me, “you cooperate with your friends, so why not with the whole country/world” is on a par with saying “you have sex with your wife, so why not with the whole country/world”.
I don’t trust the rich either.