Monday, May 20, 2013


One of the things I'm always fascinated by is how the fundamental assumptions we make shape our beliefs, and how those beliefs shape our views of the world and, perhaps most importantly, shape our views of those with different assumptions.  I talked about this sort of thing with respect to crime and punishment in a previous blog post.

A very similar sort of dynamic shows up in the politics of economics.  On the one hand there are people who believe that wealth is money, or the related belief that wealth is a relatively static thing that can be sliced up like a pie and distributed in either a fair or unfair manner.  On the other hand you have people who believe that wealth is a side effect of the movement of money (or that the movement of money is a side effect of the creation of wealth) and that the forcible movement of money not only fails to create wealth, but that it hinders the natural movement of money and the associated wealth thereby generated.  Personally, I clearly fall into the latter category, but this post isn't about right and wrong, it's about how the adherents of those two viewpoints perceive one another.

If you look at economics as an exercise in slicing an immutable pie, then questions on such topics as tax policy are a matter of balance, where harm to the rich is balanced against help for the poor. Or perhaps it's a question of fairness.  Sure, maybe they'll admit that someone who has worked hard and made a bunch of money deserves to end up with a bit more than someone who hasn't, but "How much more is really fair?" they'll ask.

From the other point of view, tax policy is not at all a balancing act.  If the  creation of wealth by the free movement of money is damaged by the non-free movement of money, then taxes aren't a boon to the poor at the expense of the rich, they are instead a harm to all to the benefit of none and the fairest policy is one where they are kept to the minimum possible amount.

What's really interesting to me here is how each side's actions appear to one another. If you believe in equalized redistribution, then the capitalist insistence on minimum taxation appears to be motivated by an insatiable greed.  On the other hand, to a capitalist, the redistributionist's call for fair and balanced taxation make no sense whatsoever in terms of compassion and kindness.  From the perspective that taxation hurts the poor as much or more than it hurts the rich, then an insistence on balance in taxation is not a question of balancing help for the poor against hurt for the rich, but a question of how much hurt to the poor can be tolerated in order to provide hurt to the rich.  Such a thing cannot be explained by compassion, but only makes sense in the context of hatred for the rich.  So say, as an example, that you're looking at a 1% tax increase on someone who makes ten million dollars a year.  From the redistributionist's standpoint, they see resistance as insatiable greed.  "How can you fight against this $100 thousand?  That's merely a drop in the bucket with relation to your income!  You'll barely be inconvenienced by it!  How could you be so greedy as to deny that small amount?  Do you have no human compassion at all?  What kind of vile monster are you?"  While on the other side, the rich capitalist is thinking "That is a fairly small amount, it won't make much difference to the overall quality of my life, perhaps I can afford to let go a groundskeeper or two, I'm sure a slightly disheveled lawn will be a barely noticeable inconvenience to me.  How much coldhearted hatred must these people have for me, that they're willing to sacrifice the entire livelihoods of a few groundskeepers in order to merely mildly inconvenience me?  Do they have no human compassion whatsoever?  What kind of vile monsters are they?"

No comments: