Sunday, May 04, 2014

Modern Lefties and their Incentives Problem.

Lefties care. They care very, very much. They're always telling us so. (As well as telling us that "the far right", "neo-liberals" or whoever simply don't care.)

Thinking about a piece of Tim's over on Forbes, I realised that, if you are a sufficiently intelligent lefty to abhor state (as opposed to common or collective, actual state) ownership, which has proven to work so well in the USSR, East Germany and even China, and is still ruining the economies of Cuba and Venezuela (I'm not sure that the DPRK actually counts as having an 'economy' as such), then you have a serious problem.

1. Making poor people better off is, by and large (and not necessarily in cash terms) what you are trying to do.

2. All the good ways we have seen of making really poor people directly better off actually make rich people even better off faster (that would be the capitalist globalism of the post-WW2 era.)

3. Redistribution only works up to a point (Laffer.) And doesn't really affect the seriously rich, especially as long as we have such complex tax laws.

4. Wealth taxes trash long and even medium term economic development. While Piketty thinks this is insufficient to denounce wealth taxes, he, as a well-salaried French public servant, "would say that, wouldn't he."


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