Wednesday, November 23, 2011

There Is No Money Pile To Be Shared Equally

From Walter Williams:

"Class warfare thrives on ignorance about the sources of income. Listening to some of the talk about income differences, one would think that there's a pile of money meant to be shared equally among Americans. Rich people got to the pile first and greedily took an unfair share. Justice requires that they "give back." Or, some people talk about unequal income distribution as if there were a dealer of dollars. The reason some people have millions or billions of dollars while others have very few is the dollar dealer is a racist, sexist, a multinationalist or just plain mean. Economic justice requires a re-dealing of the dollars, income redistribution or spreading the wealth, where the ill-gotten gains of the few are returned to their rightful owners. 

In a free society, for the most part, people with high incomes have demonstrated extraordinary ability to produce valuable services for -- and therefore please -- their fellow man. People voluntarily took money out of their pockets to purchase the products of Gates, Pfizer or IBM. High incomes reflect the democracy of the marketplace. The reason Gates is very wealthy is millions upon millions of people voluntarily reached into their pockets and handed over $300 or $400 for a Microsoft product. Those who think he has too much money are really registering disagreement with decisions made by millions of their fellow men."

750 Comments:

At 11/23/2011 11:03 AM, Blogger morganovich said...

i'd take this a step further and say that these class warriors erroneously feel that gates has made them worse off in some way.

the argument he has impoverished them is patently absurd as he has, in fact, made them better off.

even if they do not use his products or get productivity from them, many they interact with do driving price down and efficiency up.

the most stunning failure of this class war doctrine is its utter hypocrisy.

we (to sate our greed and competitiveness) demand that you give your wealth to us and will call you greedy until you do.

you are greedy for wanting to retain the fruits of your labor, but we are not for seeking to take it from you coercively.

it's an astounding doctrine and perhaps the worst and most inconsistent definition of greed i can think of.

they want the benefits of virtue without possessing virtue.

they take instead of build.

it's the philosophy of a spoiled 4 year old.

 
At 11/23/2011 11:10 AM, Blogger Benjamin said...

I agree with Walter Williams to large extent. He assumes perfect markets etc. but in general he is right.

Compare this to the $3,333 per man, woman and child taken out of your pocket and forked over to the Defense-VA-Homeland Security megaplex. Money taken by confiscation.

$13k per year for an average family of four.

PS

I wonder what Williams wood say about TransCananda not paying what is needed for land rights, but seizing them by eminent domain to lay its pipeline across America?

Could I seize land to open up a hot-dog stand?

Actually, more than that, as we have accumulated huge amounts of debt financing wars and and the boondoggle-parasitcal defense megaplex.

Probably, the typical family of four has to cough up $15k per year--into the black hole of DC's gaggle of grifters and leeches.

 
At 11/23/2011 11:17 AM, Blogger Benjamin said...

If you ever wonder why China is booming while we sink into the mire----

"CHENGDU, China (Reuters) – Chinese Vice-Premier Wang Qishan warned on Monday the global economy is in a grim state and the visiting U.S. commerce secretary said China would spend $1.7 trillion on strategic sectors as Beijing seeks to bolster waning growth.

Wang said an “unbalanced recovery” may be the best option to deal with what he had described on Saturday as a certain chronic global recession, suggesting Beijing would bolster its own economy before it worries about global imbalances at the heart of trade tensions with Washington.

“An unbalanced recovery would be better than a balanced recession,” he said at the annual U.S.-China Joint Commission on Commerce and Trade, or JCCT, in the southwest Chinese city of Chengdu."


Thereal difference is that China will boost its money supply, to finance the outlays.

Here, Bernanke is asphyxiating our economy with tight money. Same for Europe.

You may wish to open up a bar somewhere where Chinese tourists will go. There will be hundreds of millions of Chinese tourists n the future.

We are doing a Japan. Sayonara.

 
At 11/23/2011 11:23 AM, Blogger geoih said...

Quote from Benjamin: "I wonder what Williams wood say about TransCananda not paying what is needed for land rights, but seizing them by eminent domain to lay its pipeline across America?"

I think he'd say that TransCanada isn't seizing anybody's property, the state is seizing it. I would bet that Mr. Williams would say that eminent domain is just an excuse to steal somebody else's property.

 
At 11/23/2011 11:28 AM, Blogger geoih said...

Quote from Benjamin: "Thereal difference is that China will boost its money supply, to finance the outlays."

So where does this "money supply" come from? Is it sitting in a storage room somewhere? Maybe it's growing on some farm and people will go pick it? Perhaps it will fall from the sky like rain and they can collect it in buckets?

 
At 11/23/2011 11:45 AM, Blogger bix1951 said...

traditionally one way to get an advantage over others is to get some kind of monopoly or patent from the government.
the modern version of this is the professional license.
doctor
lawyer
real estate broker
accountant
and what about the riches that flow to legislators that are not bribes but something close?
we still have many priesthoods that are exclusive and which can yield much money
and I see that as inequitable

 
At 11/23/2011 12:10 PM, Blogger morganovich said...

bunny-

what is it that makes you harp on endlessly on off topic military tirades?

that pales behind the massive wealth transfer of social security and health care, which is twice that and growing rapidly.

social spending is up an order of magnitude as % of gdp since the 60's.

milspend is down by almost half.

so why is it you harp on the small problem but ignore the large and rapidly growing one?

also:

your analysis of china could not be more wrong.

their GDP is all driven by investment and not consumption. over investment is massive.

that's why they are now seeing foreign investment actually shrink.

they are upping money supply in the teens, and state lending even more and growth is slipping to 1/3 of that.

this is the nasty part of the overinvestment debt bubble curve for them when even massive inflows drive no growth.

it's a potempkin village and will blow up in the next couple years.

 
At 11/23/2011 12:15 PM, Blogger morganovich said...

bix-

if your argument is that licencure requirements are essentially a guild system, then i agree wholeheartedly.

i have no problem with government accreditation programs. it's the fact that they are not voluntary that's the problem.

it's fine for the state to license a dentist, but we should be able to go to an unlicenced one too if we like. we should be able to make that choice, not the state.

a few of these get a little tricky though.

to use demolitions explosives in an urban setting may be a bit different. others who are not consenting parts of the transaction could be heavily affected by misuse.

i'm not really sure how to handle that one.

it's sort of a classic coasisn discussion, and as the harm (death) could be irreparable, that tends toward regulation.

 
At 11/23/2011 12:39 PM, Blogger MaggotAtBroad&Wall said...

I take a slightly different approach when I explain inequality to the economically challenged.

In a generally free economy, I explain, where economic transactions are voluntary exchanges, the ONLY reason why a buyer chooses to transact is because the good or service offered by the seller holds greater value to the buyer than it does to the seller.

In other words, the hundreds of millions of copies of Microsft product Gates has churned out over the years has virtually no value to him personally until and unless people voluntarily decide to buy.

Very basic stuff, I know, but the Occupiers don't seem to grasp it and charlatans like Krguman intentionally misrepresent reality for ideological reasons.

 
At 11/23/2011 12:45 PM, Blogger Ed R said...

" - - - people with high incomes have demonstrated extraordinary ability to produce valuable services for -- and therefore please -- their fellow man."

People like:

Angelo Mozilo
Dick Fuld
Charles Prince
Joe Cassano
Robert Rubin
Jon Corzine
Joe Jamail
Ken Lay
- - - - - etc.

 
At 11/23/2011 1:00 PM, Blogger Che is dead said...

People like:

Angelo Mozilo
Dick Fuld
Charles Prince
Joe Cassano
Robert Rubin
Jon Corzine
Joe Jamail
Ken Lay
- - - - - etc.

-- Ed R.

All of these men sought to exploit government largess, exploiting the wave of money coercively taken from the American taxpayer and doled out by the political class. But somehow I don't think that your post was meant to warn of the inherent dangers of such a strategy.

 
At 11/23/2011 1:20 PM, Blogger Larry G said...

I would agree that taxing the rich is not going to solve the deficit but I do not think I have ever seen how much of the 1.5 trillion deficit would be eliminated if we DID tax the hell out of the rich.

I think if it were shown how much of the deficit was still left AFTER we (in theory) taxed the hell out of the rich - it would put the onus on those who fervently believe that just taxing the rich is a solution.

I do, however, support a transaction fee on short term trading....

a tiny one.. like .1% or perhaps even smaller.

those who make money trading money... need to pay the piper....too....

IMHO of course.

 
At 11/23/2011 1:25 PM, Blogger Jon said...

In a free society, for the most part, people with high incomes have demonstrated extraordinary ability to produce valuable services for -- and therefore please -- their fellow man.

This is classic right wing thinking. Offer a plausible sounding hypothesis along with zero proof. The fact of the matter is this is a very dubious claim.

CEO's in the US make a lot more than CEO's in other countries, but there's no evidence that American CEO's perform better. So how do they do it?

In a purely free market when Person 1 has concentrated wealth and Person 2 doesn't and these people negotiate on a price for labor (supposing Person 1 is buying Person 2's labor) these people are just no on equal footing. Person 1 bargains from a position of strength. There is a certain amount of revenue generated by the combined capital and labor. Person 1 can in fact funnel more money to himself because of his position of strength.

Some countries though recognize this disparity in bargaining power and so they pass laws to rebalance that a bit. That's what the Wagner Act did. The Reagan administration entered and basically stated openly that they would not enforce the Wagner Act. Companies did what was in their rational interest. They used their position of bargaining strength to negotiate away labor compensation. An increased share went to capital and a lesser share went labor. The expansion in inequality in the US coincided with this shift.

Can the total pie of money grow? Yes. But can some people negotiate a larger share of the pie as the pie grows? Yeah. The pie continues to grow. But almost none of that growth makes it's way into the pockets of the poor. Almost all of it goes to the super rich. This is because as our government has shifted away from balancing the bargaining power from labor to capital all of the gains go to capital. That's what we expected would happen and it's what did happen.

Williams talks about Gates. Let's assume Gates really was creative and didn't make his money by stealing ideas and preventing competition from thriving (which is a dubious claim anyway, but let's assume it). There are a lot of others that make money by tricking people into buying mortgage securities, pretending they are AAA rated when it's all a scam. They get million dollar bonuses. Pension funds are obliterated. That's not bringing value to society. That's just tricking people. This is a lot of what is objected to. OWS doesn't object to someone creating a new product that brings value to society. We object to the fact that some break the law in order to make money, don't bring value, and at the end of the day they aren't prosecuted. The law doesn't apply to them. Why doesn't Williams ever talk about that?

 
At 11/23/2011 1:48 PM, Blogger Hydra said...

The current demonstrations consist of people saying they are no longer pleased with the pay for performance.

 
At 11/23/2011 1:56 PM, Blogger Hydra said...

Land siezed under eminent domain still has to be paid for. Depending on the state, the method of establishing price leaves much to be desired.

Yes, under current law you could diesel land for a hot dog stand. All you have to do is get the previous use declared as blight, and show a " public use" NY demonstrating you will pay more tax than the previous tenant.

 
At 11/23/2011 2:02 PM, Blogger Itchy said...

@Ed R

Some billionaires who didn't "steal" their wealth.

Steve Jobs
Michael Dell
Bill Gates
Sergey Brin
The entire Walton Family
Ralph Lauren
Charles Schawb
Bruce Halle
Phil Knight

Why are you (and others) so quick to throw out the good with the bad. Yes you can find so people with I'll-gotten wealth, but why pretend that every rich person somehow stole it?

 
At 11/23/2011 2:05 PM, Blogger Larry G said...

the fundamental purpose behind any law that allows taking property is that the property is needed for a public purpose.

I realize the fly is in the "public purpose" ointment....

but in the end - it does matter whether the property in question ends up in private hands or not and second if it does end up in private hands.. does it generate revenues ?

I note here that wind turbines pay leases to land owners instead of asking for the state to use eminent domain.

If wind turbine companies have to proceed with a willing selling/willing buyer procedure why should a pipeline not have to use the same approach?

 
At 11/23/2011 2:12 PM, Blogger Jon said...

Itchy, nobody said every rich person got rich in a way that didn't contribute value to society. But a lot of them did. A lot of them got rich not just by not bringing value, but by actually bringing harm. We're not throwing the baby out with the bath water. Bath water only.

 
At 11/23/2011 2:20 PM, Blogger Hydra said...

Some people would argue that the PC as implemented by Gates and incorporated by organizatiinsis one of the biggest timewasters ever, and the productivity gains are far exceeded by the overhead and other waste created.

 
At 11/23/2011 2:21 PM, Blogger VangelV said...

Williams: "Listening to some of the talk about income differences, one would think that there's a pile of money meant to be shared equally among Americans. Rich people got to the pile first and greedily took an unfair share."

morganovich: "i'd take this a step further and say that these class warriors erroneously feel that gates has made them worse off in some way."

I think that there is a point being missed by Williams. Yes, many rich people got rich by virtue of their ability to provide consumer products in a competitive market. That is honest money and no matter how much was earned was clearly deserved.

But there is another group of 'rich' people. This is the group that uses its connections with the government to take advantage of the system. When the Fed prints money these people are first in line and make use of it before others. By being first they get higher prices because the money has yet to circulate and to be devalued. Later on, they repay the loan with assets that are sold at higher nominal prices. The difference is kept.

The protesters who argue that this second group needs to lose its privileges are clearly right. And those of us who believe in justice should be careful to defend the free market and reject the crony capitalism that is being passed off as the free market.

Williams: "In a free society, for the most part, people with high incomes have demonstrated extraordinary ability to produce valuable services for -- and therefore please -- their fellow man."

But the problem is not those who, " have demonstrated extraordinary ability to produce valuable services for...their fellow man," in a free market but those who have used their political influence to get rich by preventing competition in the marketplace. They do us no service. They prey off the productive workers and are little more than parasites.

At the bottom of this the problem is structural. Given the way that the financial system is set up the corrupt will always be attracted to it and will always become parasites who do harm to honest workers, investors, and savers. That has to end and the best way to end it is to let competition against the fiat money that is issued by the central banks.

 
At 11/23/2011 2:33 PM, Blogger Hydra said...

Maggot has a strange idea of what is a truly voluntary transaction.

 
At 11/23/2011 2:42 PM, Blogger Hydra said...

I would only point out that the trend has been for fewer people to get a larger share of the pie, even as the pie has grown.

Clearly that trend cannot continue indefinitely. Therefore, it will change, regardless of any argument made for the status quo.

The only question is how that change will occur. If the job creators create enough honest jobs, then maybe government wont step in, but the history of business being self regulating is not all that good.

 
At 11/23/2011 2:56 PM, Blogger Ron H. said...

Jon: "blah, blah, blah..."

Nothing new here, just the usual socialist ranting we have come to expect - except for this:

"Let's assume Gates really was creative and didn't make his money by stealing ideas and preventing competition from thriving (which is a dubious claim anyway, but let's assume it)."

I don't know about stealing ideas, but preventing your competition from thriving is the nature of a healthy competitive market. That's why it's called competition. If your argument is that competition is bad, you should frame it that way, so your position will be clear.

...and this, which may reach new highs in illogical thinking:

"There are a lot of others that make money by tricking people into buying mortgage securities, pretending they are AAA rated when it's all a scam. They get million dollar bonuses. Pension funds are obliterated. That's not bringing value to society. That's just tricking people."

Tricking people? Who do you think buys MBSs? Poor people?

We might expect those who manage pension funds to know what they are doing, and assess investment risk correctly. That is their job, after all. As to the AAA rating, these securities are guaranteed by taxpayers. What could be more secure than that? You may be having trouble understanding incentives.


"This is a lot of what is objected to. OWS doesn't object to someone creating a new product that brings value to society."

And how do we know something is of value to society? Lots of people willingly spend money on the new product, and make the producer rich in the process. Do you see a problem with that?

"We object to the fact that some break the law in order to make money, don't bring value, and at the end of the day they aren't prosecuted. The law doesn't apply to them. Why doesn't Williams ever talk about that?"

Just like OWS, you are confused. You are blaming crooks for being crooks instead of aiming your outrage at those whose job it is to enforce the law. What could Williams say except: "Hey, we elected you to punish lawbreakers, so do it!" Not a lot of discussion is required.

 
At 11/23/2011 3:16 PM, Blogger Ron H. said...

"Some people would argue that the PC as implemented by Gates and incorporated by organizatiinsis one of the biggest timewasters ever, and the productivity gains are far exceeded by the overhead and other waste created."

And who, besides you, would those people be? Please provide some examples.

Are you arguing that millions of companies, for decades, have been unable to determine that something on which they spend billions of dollars on an ongoing basis, is providing a negative return?

One wonders how so many have stayed in business, being that inept.

 
At 11/23/2011 3:38 PM, Blogger Itchy said...

Jon:
Itchy, nobody said every rich person got rich in a way that didn't contribute value to society. But a lot of them did. A lot of them got rich not just by not bringing value, but by actually bringing harm. We're not throwing the baby out with the bath water. Bath water only.

In 2009 the IRS reported that about 9000 households had income over $10M. How many of them are in the "a lot" that you mention?

I'm sure every OWS person holding the "End Capitalism" signs just forgot to include the "Crony" adjective on the sign.

I think you are being dishonest about what many in OWS actually stand for or at least using some wishful thinking.

 
At 11/23/2011 3:52 PM, Blogger Paul said...

Lookie Jon trying to sanitize why he and his fellow communists and anarchists are so busy defecating in and trashing public parks all over the country.

Loved this:

"We object to the fact that some break the law in order to make money, don't bring value, and at the end of the day they aren't prosecuted. The law doesn't apply to them."

Perhaps that message is being lost in the onslaught of OWS rapes, theft, vandalism, and public masturbation incidents.

 
At 11/23/2011 4:16 PM, Blogger Itchy said...

Hydra:
Some people would argue that the PC as implemented by Gates and incorporated by organizatiinsis one of the biggest timewasters ever, and the productivity gains are far exceeded by the overhead and other waste created.

Yes and some people would argue that we'd be better off without the internal combustion engine, cell phones, electricity ... Of course they are idiots.

The rise of PCs is why someone can crash their can "Grand Theft Auto" style and walk away.
- why people can be productive at all
- why people don't have to own a library for access to information
- why we dont have wait days to correspond with someone

Even the fact that most software conforms to the windows layout and functionality make it easier to use and learn

I could go on

 
At 11/23/2011 4:21 PM, Blogger Paul said...

Morganovich,

"so why is it you harp on the small problem but ignore the large and rapidly growing one?"

Easy: Benji is on the cusp of receiving Medicare and SS, he's never spent a moment of his life in uniform and denigrates those who have. If you follow his argument, it always boils down to: "What's in it for Benji?"

 
At 11/23/2011 5:16 PM, Blogger Artem Boytsov said...

This is completely idiotic and a dishonest straw men. It's not about sharing a pre-existing pile of money, it's about creating a pile of money together and being discontent with how it is shared.

Bill Gates didn't create his products ALONE. Moreover, even 99% of ideas in Microsoft's products are not his. Moreover, even 99% of management efforts in creating those products are not his. But the difference in compensation can be several thousand-fold.

How about startup investors that are compensated hundreds of times more than the engineers and designers that actually CREATE the products? Now you may turn around and claim they're compensated for risk, but it's not true as well. An engineer dedicating several years of 60-hour weeks to create a product on almost non-existing surely takes much more risk than a VC who allocates 0.5% of his capital to the idea.

You may say it wouldn't be possible without the capital. Sure, but it wouldn't be possible without engineering ingenuity as well. Why should one be compensated x100 better than the other?

I'm tired of these idiotic justifications and rationalizations of presumed fairness.

Why don't you guys just say "Yeah, the world is NOT fair, it will never be fair, and any attempts to make it fairer will probably make it worse".

Then I might just agree with you.

 
At 11/23/2011 5:39 PM, Blogger Paul said...

Artem,

Yeah, the world is NOT fair, it will never be fair, and any attempts to make it fairer will probably make it worse.

Besides, who is going to define what is "fair"? Barack Obama? You?

 
At 11/23/2011 5:46 PM, Blogger Paul said...

PJ O'Rourke on fairness:

"Well, I am here to advocate for unfairness. I've got a 10-year-old at home. She's always saying, "That's not fair." When she says this, I say, "Honey, you're cute. That's not fair. Your family is pretty well off. That's not fair. You were born in America. That's not fair. Darling, you had better pray to God that things don't start getting fair for you."

 
At 11/23/2011 7:13 PM, Blogger Hydra said...

The argument that the PC is actually counterproductive is pretty common.

You might have heard. it if the PC wasn't eating your time.

I never
Made that claim, but some people have. I will say I have made a fair amount of money fixing PC problems for others.

 
At 11/23/2011 7:20 PM, Blogger Hydra said...

Since when is interfering with your competitors legal practices a way to promote better products, lower prices, make customer's better off, employ people, and support all that other philanthropic BS that you give business credit for?

The concept of pass interference, illegal blocking, barging, and all the other rules of sportsmanship don't apply to business?

 
At 11/23/2011 7:25 PM, Blogger Hydra said...

fair, and any attempts to make it fairer will probably make it worse. Besides, who is going to define fair........

+++++++++///+?

Well, isn't that a bright sunny outlook?

Isn't the golden rule a pretty good basis for establishing fair?

 
At 11/23/2011 8:13 PM, Blogger Artem Boytsov said...

Paul,

You're funny. :)

The main point of the article I'm arguing against is that the existing capitalist distribution of wealth _IS_ fair, for example:

"In a free society, for the most part, people with high incomes have demonstrated extraordinary ability to produce valuable services for -- and therefore please -- their fellow man. "

My argument is that the article does its job very poorly, and you all right wing guys would be much more better off if you just admitted that it's the best system we've come up with so far, it has nothing to do with fairness and stop trying to rationalize it from a moral standpoint. It doesn't work very well on smart people.

From moral standpoint, the system is absolute crap. From the efficiency standpoint, it's probably the best system in the world. Nobody is arguing that. I'm arguing your need to feel righteous which frankly is very amusing.

Artem.

 
At 11/23/2011 8:32 PM, Blogger Charles said...

Some of the people who say that the PC is counterproductive should start a company not using computers and put the ones using computers out of business. Otherwise, all they are doing is talking while those using computers are succeeding.

 
At 11/23/2011 10:39 PM, Blogger Hydra said...

A skilled person with a pencil can outperform an unskilled person with a computer.

Think of the times a computer has enabled a draft to go through ten revisions: revisions that have more to do with ego than content.

If PCs are so great, how come I spent so much time helping others to use them?

You seriously cannot see any of the ways that computer's have enabled mass waste, inefficiency, and even fraud? None of that is the fault of the PC, of course, but neither is a good result of its use.
Therefore the many bad enablements have to be subtracted from the good ones, and then it does not look so hot.

-------------------------
It is possible for someone to be producing a good and desireable product or service, and still succeed more by doing things unethically.

At least til they get caught or exposed.

 
At 11/23/2011 10:50 PM, Blogger Hydra said...

The sysetem we have is the best ever developed, in some but not every respect. It can be improved. That certain people do not believe it can be improve ed or do not wish it to be improved raises the suspicion that the reason is that they benefit disproprtionately from it.

 
At 11/24/2011 2:10 AM, Blogger Ron H. said...

"The argument that the PC is actually counterproductive is pretty common. "

Then it shouldn't be hard to provide examples.

 
At 11/24/2011 2:20 AM, Blogger Ron H. said...

"Since when is interfering with your competitors legal practices a way to promote better products, lower prices, make customer's better off, employ people, and support all that other philanthropic BS that you give business credit for?"

Do you mean by enlisting government force, or simply stealing market share?

 
At 11/24/2011 2:41 AM, Blogger Ron H. said...

Artem: "The main point of the article I'm arguing against is that the existing capitalist distribution of wealth _IS_ fair, for example:

"In a free society, for the most part, people with high incomes have demonstrated extraordinary ability to produce valuable services for -- and therefore please -- their fellow man. "

My argument is that the article does its job very poorly, and you all right wing guys would be much more better off if you just admitted that it's the best system we've come up with so far, it has nothing to do with fairness and stop trying to rationalize it from a moral standpoint.
"

Your muddled comment doesn't make it clear whether you agree with the quote from Williams or not. What's the point you are trying to make?

"It doesn't work very well on smart people."

And, how would you know that?

Do you see any irony in having a website called "thoughts" at which you haven't posted anything?

 
At 11/24/2011 2:42 AM, Blogger Hydra said...

I don't know. It was your argument

"......... preventing your competition from thriving is the nature of a healthy competitive market. That's why it's called competition. "

 
At 11/24/2011 3:03 AM, Blogger Ron H. said...

"A skilled person with a pencil can outperform an unskilled person with a computer."

One with a Droid, for sure!

"Think of the times a computer has enabled a draft to go through ten revisions: revisions that have more to do with ego than content."

That isn't new, just orders of magnitude faster.

"If PCs are so great, how come I spent so much time helping others to use them?"

It's hard to say. Perhaps you are the most technically savvy horse in the glue factory.

"I don't know. It was your argument

"......... preventing your competition from thriving is the nature of a healthy competitive market. That's why it's called competition.
"

And what didn't you understand?

You'll need to ask an intelligible question about it.

 
At 11/24/2011 6:38 AM, Blogger Itchy said...

A skilled person with a pencil can outperform an unskilled person with a computer.

pencil vs computers

I'll take the computer aided car, feel free to take the pencil and paper one.

I'm sure the engineers wasted some time being unproductive on their computers.

 
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At 11/24/2011 8:07 AM, Blogger VangelV said...

Easy: Benji is on the cusp of receiving Medicare and SS, he's never spent a moment of his life in uniform and denigrates those who have. If you follow his argument, it always boils down to: "What's in it for Benji?"

While I have my problems with Benji his not spending his life in uniform is probably a positive. Trading in your time for money that is extracted from the taxpayer so that you can wear a uniform in no more noble than doing something productive in a competitive market place. There is no nobility in having to obey every order that is given to you no matter how silly, stupid, or evil.

In the US a soldier is either an indentured servant (when there is a draft) or a federal employee who gets money to do a job. End of story.

 
At 11/24/2011 8:47 AM, Blogger VangelV said...

This is completely idiotic and a dishonest straw men. It's not about sharing a pre-existing pile of money, it's about creating a pile of money TOGETHER and being discontent with how it is shared.

This is going to be interesting. Let us see where the argument goes.

Bill Gates didn't create his products ALONE. Moreover, even 99% of ideas in Microsoft's products are not his. Moreover, even 99% of management efforts in creating those products are not his. But the difference in compensation can be several thousand-fold.

Bill Gates PAID people for their time and ideas. They exchanged that time and those ideas for a quantity of money that they believed was sufficient. In fact, it was sufficient because low level employees who were hired early in the game became millionaires.

How about startup investors that are compensated hundreds of times more than the engineers and designers that actually CREATE the products? Now you may turn around and claim they're compensated for risk, but it's not true as well. An engineer dedicating several years of 60-hour weeks to create a product on almost non-existing surely takes much more risk than a VC who allocates 0.5% of his capital to the idea.

It is all about RISK. Engineers trade potential gains from an increase in the value of the company that they invest in for a steady paycheck that is set by the market. In fact, they have a huge advantage because if they understand the company they have more insight than the ordinary investor and have a chance to buy shares very cheaply. Any engineer who started during the early years of Microsoft and used 10% of his salary to buy shares of the company is now worth tens to hundreds of millions of dollars.

Of course, you are being fooled by survivor bias. What about all those engineers and investors in companies that failed? The engineers got their money and made a decent living. When the company went under they simply found another and kept on living as before. But the investors lost everything.

Clearly you lefties need to learn something about the way the markets are supposed to work. And you might want to try and figure out that when people engage in voluntary transactions both sides get what they want. Some people are more comfortable exchanging their skills for money. Others are driven to plan and take risks. The latter group is not compensated on the basis of some contract. It gets compensated by the market and the levels are scalable. The problem is that scalable activities are not utility efficient. You either hit it big and become very rich or you are poor and miserable. Because most people do not enjoy glory and riches as much as they hate failure, poverty, and misery they choose to be engineers, accountants, doctors, lawyers, etc., rather than become entrepreneurs.

 
At 11/24/2011 8:56 AM, Blogger Itchy said...

In the US a soldier is either an indentured servant (when there is a draft) or a federal employee who gets money to do a job. End of story.

Yeah except your IRS auditor is not expected to risk his life to risk his life for your eight to spout off.

Let me preempt the "undeclared foreign wars" or I don't support the wars" argument by pointing out that the politicians use of the military is separate from people who voluntee for service.

 
At 11/24/2011 8:57 AM, Blogger VangelV said...

The concept of pass interference, illegal blocking, barging, and all the other rules of sportsmanship don't apply to business?

None of those 'rules' apply to business. In a competitive market the customers set the rules and the only ones who do very well are those that can provide the customers what they want.

Note that is one of the things that the idiots on OWS miss. Their anti-market bias does not allow them to see that they have a common enemy with those that are very pro-market. The free marketers oppose the Fed and the big Wall Street companies because they meddle in the markets, not because they benefit from competition. What you idiots miss is that they get to write the rules and change the rules when they are losing. They can only do that because fools like you believe that big government and government regulators are the solution when it is clear that they are the problem. Bill Gates is not the problem. People like Lloyd Blankfein, Jamie Dimon and Angelo Mozilo are the problem because unlike Gates they do not have to compete and offer customers what they want to succeed. They use the power of big government, which you fools support, to make themselves rich while they help make you poor.

If you want to provide a solution you need to support a limited government that cannot protect its patrons from competition in the marketplace. If Angelo Mozilo wants to get rich like Gates let him earn it the way that Gates did.

 
At 11/24/2011 9:21 AM, Blogger VangelV said...

The right wing people are just as confused as the left wing.

From moral standpoint, the system is absolute crap. From the efficiency standpoint, it's probably the best system in the world. Nobody is arguing that. I'm arguing your need to feel righteous which frankly is very amusing.

As I said above, I think that you are just as confused as the right wingers.

First, there is nothing immoral about voluntary transactions. As I pointed out above scalable activities are not utility efficient. While you can become very rich more often than not you fail and can wind up poor and miserable. For every Bill Gates there are tens of millions of failed entrepreneurs because consumers did not like the products that they had to sell.

The problem are the people who do not have to compete because they are protected by government regulations that make barriers to entry too difficult for people who are able to give people what they want at a better price. If the left wants to succeed in its efforts for a fairer system that is more efficient it needs to demand that government is stripped of its power to provide handouts and protection to inefficient producers of goods and services. But just the right, the left does not want this. Which is why we are likely to see a major collapse as confidence is lost and the ruled withdraw their consent from their political masters.

 
At 11/24/2011 9:29 AM, Blogger VangelV said...

Yeah except your IRS auditor is not expected to risk his life to risk his life for your eight to spout off.

Like the IRS agent, the soldier trades his time and takes his risks for money. End of story.

Let me preempt the "undeclared foreign wars" or I don't support the wars" argument by pointing out that the politicians use of the military is separate from people who voluntee for service.

I agree. But when you get paid it is not exactly the same as volunteering. Being a soldier is a job. End of story.

 
At 11/24/2011 12:25 PM, Blogger Ron H. said...

V: "This is going to be interesting. Let us see where the argument goes."

But we already knew where it would go.

 
At 11/24/2011 12:54 PM, Blogger Hydra said...

Take a look at the thin shell of earths atmosphere from space, and explain how people who are successful should get to keep most of it for themselves.

 
At 11/24/2011 12:57 PM, Blogger Hydra said...

I see big business as the most demanding of governments protection, and most adept at getting it.

Are the majority shareholders of big business mostly on the left or on the right?

 
At 11/24/2011 1:07 PM, Blogger Hydra said...

VThat isn't new, just orders of magnitude faster.


+++++/+++/
But enabling ten iteration s on a memo is less productive not more, no matter how fast you do it.

 
At 11/24/2011 2:06 PM, Blogger Ron H. said...

"But enabling ten iteration s on a memo is less productive not more, no matter how fast you do it."

That's a really dumb argument, and you know it.

Who should be the judge of what's productive and what isn't? Your authoritarian views are pervasive.

You can't blame a productivity tool for how it is used.

 
At 11/24/2011 2:19 PM, Blogger Ron H. said...

"Take a look at the thin shell of earths atmosphere from space, and explain how people who are successful should get to keep most of it for themselves."

Not sure what your point is, but this might not be the best example. Air is one of the few things in the world that isn't scarce. Everyone gets as much as they can use.

If there's some other point you failed to make, try again.

 
At 11/24/2011 3:29 PM, Blogger VangelV said...

But we already knew where it would go.

I did not know. But I suspected where it would go. Sadly, I was right.

 
At 11/24/2011 3:30 PM, Blogger VangelV said...

Take a look at the thin shell of earths atmosphere from space, and explain how people who are successful should get to keep most of it for themselves.

Am I missing something? Since when does the atmosphere have an owner? And who is 'keeping it for themselves?'

 
At 11/24/2011 3:32 PM, Blogger VangelV said...

I see big business as the most demanding of governments protection, and most adept at getting it.

Which is why you should be arguing for limited government that sticks to its limited power. Why aren't you?

Are the majority shareholders of big business mostly on the left or on the right?

The majority are Keynesian and statists. Which is why most of them don't understand the nature of the problem.

 
At 11/24/2011 3:49 PM, Blogger Hydra said...

What problem? The majority shareholders are the 1%. For them, no problem.

 
At 11/24/2011 4:03 PM, Blogger Hydra said...

Am I missing something? Since when does the atmosphere have an owner? And who is 'keeping it for themselves?'

++++++++++?++++++++++?

Yes I would say you are missing something if you do not see the nature of this problem.

A free market requires everything of value to have some kind of ownership. We have a real failure in establishing and protecting property rights, without which the market cannot work efficiently.

I think it was Ron who said you have no right to pollute my air, to which I might respond, where is your deed or your bill of sale? Or I might respond that he has no right to tell me I cannot use my air for combustion.

It is ludicrous to argue about who earned what, unless we start with a full understanding of who owns what.

 
At 11/24/2011 4:08 PM, Blogger Hydra said...

Air us the one thing that everyone gets as much as they can use.

Not true. Absent government interference thousands died in London, Pittsburgh, Bhopal and other places because someone else ( corporate or not) usurped the air.

 
At 11/24/2011 4:52 PM, Blogger Jon said...

Friedman is right to criticize a 100% inheritance tax, but I don't think this is what OWS is about.

In the second video Friedman recommends the very policies that have been implemented over the last 30 years. The real minimum wage rate has fallen as corrected for inflation since then. Welfare expenditures have been reduced. Meaning aid to the poor, not welfare and Medicare, which have their own dedicated taxes. Of course taxes have become a lot less progressive. Friedman's recommendations have been implemented and this was done on the expectation it would help blacks. Has it? No. The opposite. From the end of the 40's up to the 80's blacks made some gains. Since then they haven't. So the theory sounds plausible but we have to check it against the facts. It's failed in that regard.

He says free market capitalism is what brings people out of poverty. But of course there is no such thing as a free market. You can contrast those that are more free market with those that are less. The US at the end of the 19th century was highly protectionist and interventionist. The most radical redution in poverty since the 50's is in South Korea and that has been highly interventionist. Very aggressive industrial policy. Very protectionist, blocking the importation of superior products in order to build their industrial base. S Korea was the equivalent of Haiti 60 years ago. Today they make Hyundai, Kia, LG, Samsung. A powerhouse. Where's Haiti? Still trying the low tariff, low tax, low regulation methods. And still where they were 50 years ago, if not worse.

And I would add that the real destruction of blacks occurred due to the drug war. It wasn't with the implementation of welfare that the black family disintegrated. When 1 in 3 blacks spend time in prison what do you expect will happen?

In the third video he gives us the trickle down theory. Give rich people more money and they build factories which create jobs. That's great, but there's another factor. If you redistribute and put money in the hands of the poor they spend it. That demand induces wealthy people to build factories. So which factor dominates? The verdict is in. We've tried trickle down. Demand is down and unemployment is up. We are in the worst economic downturn we've had since the great depression. Friedman's theories have failed the test of reality. That's why OWS is out there.

Here's how Will Rogers put it. "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands.”

 
At 11/24/2011 5:05 PM, Blogger Hydra said...

Or as my illiterate Mexican friend bush's put it, what good all that money it no go round and round. Why some got everythting and others nada, not even zapatas?

 
At 11/24/2011 6:45 PM, Blogger Artem Boytsov said...

Ron,

Sorry, I'm not going to sink to your level.

Artem.

 
At 11/24/2011 7:37 PM, Blogger Artem Boytsov said...

VangeIV,

I think you're missing my point. You shouldn't feel so threatened - nobody argues that free market enterprise is the system that produces the best economic development overall. Your problem, from my point of view, is that you make this idea the central point of your thinking and try to rationalize EVERYTHING based on it. This is a problem with a lot of right wing people. I am not a "leftie", whatever that means, but I can identify with some of the ridicule you guys are getting in the media, because some of you seem incapable to maintain a dialogue on a rational level. Instead of agreeing there are moral issues with the system, but proposed alternative solutions are no good, they behave like little children stomping their feet and shouting "No! It's RIGHT! It's the way it's SUPPOSED to be! Everything is PERFECT!".

Listen to Milton Friedman. This man, of great intellectual capacity, had no problem admitting that the system is not perfect. But he argued brilliantly that there's no easy solution to make it better and maybe there's no solution at all to make it better. He would never claim anything is perfect. That's how smart people think.

This is going to be interesting. Let us see where the argument goes.

I doubt it. I've heard it all before.

Bill Gates PAID people for their time and ideas. They exchanged that time and those ideas for a quantity of money that they believed was sufficient.

And? It has nothing to do with my argument. I never said Bill Gates did something illegal. If you choose to define fair as legal, we may finish the conversation right now.

There's a growing discontent that the fruits of collective labor get shared very unequally. The article in question does an extremely poor job to address this discontent by claiming that in fact, it is all fair, because people like Bill Gates created a lot of value to justify such an unequal distribution.

But is is a horrendous misrepresentation. Bill Gates did not himself create this value. It may be all right, perfect, and fair from the system's standpoint, but nobody argues with that. It's as if you would try to explain to people that NBA players get x1,000 compensation of those who didn't make the cut, because they work x1,000 harder. You would be laughed at.

Yes, this is the way it works - you may be 0.5% better at something than the other guy, and get x1,000 compensation than the other guy. This is not fair, it's not even remotely fair, but it MAY be the best way to incentivize people to be the best.

This is a rational response from a person who doesn't try to idolize the system and can actually think and relate to other people sense of fairness.

... continued in the next comment

 
At 11/24/2011 7:37 PM, Blogger Artem Boytsov said...

... continuation

It is all about RISK. Engineers trade potential gains from an increase in the value of the company that they invest in for a steady paycheck that is set by the market.

You are missing another crucial point here. From purely economic and statistical standpoint, it IS all about risk and it makes perfect rational sense.

But from emotional and fairness standpoint, given us through thousands of years of evolution, nobody is fooled. Employees take much more PERSONAL risk than investors, and compensated much less in case of success.

In order to better understand this argument, let's do what Milton Friedman likes to do - look at the extremes. Imagine you have $100 million. You invest them in a healthy mix of government backed bonds and equities, you don't have to work, you drink champagne all day, and you have a steady income of at least a couple of million dollars a year. A person who has to work for a living asks you - why do you think it's fair?

You, as a master rationalizer, say - it's fair because I'm compensated for risk I'm taking by investing my $100 million.

Well, if you think your explanation makes any sense, you definitely deserve the beating that is coming.

What risk??? Your personal risks are virtually zero. In a long run, your portfolio is all but guaranteed to be at least profitable enough so that you don't have to work, you have very little chance to lose any capital, you're not taking ANY work-associated risk, such as a work-related injury. Any person going to work every day takes much more PERSONAL risk than you do.

The rational response to that moral dilemma is not to try to religiously justify it, but simply say: "Yes, this is probably as unfair as you can have it, but this is the best way to incentivize people to save, invest and open businesses, and we're all better off because of it". Milton Friedman had no problem with that kind of answer but you do.

Of course, you are being fooled by survivor bias. What about all those engineers and investors in companies that failed? The engineers got their money and made a decent living. When the company went under they simply found another and kept on living as before. But the investors lost everything.

Of course, I'm not. I was talking about a VC who allocates 0.5% of capital to the idea. They didn't lose everything, they lost 0.5%. In the long run, they will be ahead of any engineer similarly competent in their own field of expertise.

Clearly you lefties need to learn something about the way the markets are supposed to work.

Oh, believe me, I know. I probably know it better than you because I'm not viewing at through a religious dogma glasses, so I probably understand it better.

The problem is that scalable activities are not utility efficient. You either hit it big and become very rich or you are poor and miserable. Because most people do not enjoy glory and riches as much as they hate failure, poverty, and misery they choose to be engineers, accountants, doctors, lawyers, etc., rather than become entrepreneurs.

This is all right and correct, and I wouldn't argue that. Unfortunately it's not so simple in real life. Once you have capital, you have very little chance for misery (certainly much less than a professional that can wind up without a job for some time), but much higher rewards.

You also greatly overestimate the amount of misery you get from a failed business. NeXT failed spectacularly, but Steve Jobs never starved.

You also forget that the source of capital is not necessarily starting a business. It might be simple luck (joining Microsoft early) or being a high-paid CEO or inheritance or a million of other things.

If you were ask me what I would do about it, I would say: "Nothing". But your need to be morally righteous about it is what I find highly objectionable.

Artem.

 
At 11/24/2011 7:43 PM, Blogger VangelV said...

Yes I would say you are missing something if you do not see the nature of this problem.

Your thinking is so muddled that it is hard to imagine what you would consider the nature of the problem to be.

A free market requires everything of value to have some kind of ownership. We have a real failure in establishing and protecting property rights, without which the market cannot work efficiently.

Does the free market require that someone own the atmosphere? Or is it sufficient to say that the atmosphere over my property can't be polluted with whatever you decide to put into it?

I think it was Ron who said you have no right to pollute my air, to which I might respond, where is your deed or your bill of sale? Or I might respond that he has no right to tell me I cannot use my air for combustion.

No. You can use the air on your property as it wish. You can pollute on your property as you wish. Your problem only comes when the pollution crosses the boundary line onto the property of someone else. That should not be hard for you to understand so why pretend that you don't understand?

It is ludicrous to argue about who earned what, unless we start with a full understanding of who owns what.

That is easy. The original owner is the person who took someone that was not owned and made it his/her own. From that starting point ownership is determined by who owns the title. Again, this is not hard to follow. So why do you have so much trouble with it?

 
At 11/24/2011 7:47 PM, Blogger Artem Boytsov said...

VangelV,

There's nothing immoral about voluntarily transactions IN GENERAL (there are exceptions), but it is not the point.

The point is that we are social animals. Our core limbic sense of morality includes sense of justice and helping other people. This is why a lot of us (do you?) feel a bit of shame passing by a homeless person on the street.

This is what capitalism has always struggled to reconcile, and by trying to brainwash people that it's all moral and good, YOU'RE DOING IT WRONG.

Artem.

 
At 11/24/2011 7:56 PM, Blogger VangelV said...

In the second video Friedman recommends the very policies that have been implemented over the last 30 years.

On what planet did that happen?

The real minimum wage rate has fallen as corrected for inflation since then.

The minimum wage should be repealed. It protects unions from competition and creates unemployment among the unskilled workers. Friedman would have abolished the minimum wage.

Welfare expenditures have been reduced.

And when Clinton reduced them millions came off the rolls and started to work.

Meaning aid to the poor, not welfare and Medicare, which have their own dedicated taxes.

What aid to the poor? From what I can tell the poor get lots of goodies handed to them and are very good in their role as tax eaters. In fact, they seem to get so much that one of their biggest health problems is obesity. Aren't the 'poor' supposed to be skinny because the don't get enough to eat? Or did Dickens lie about that?

Of course taxes have become a lot less progressive.

Not true. The top 10% of income earners pay far more of the total income tax than they did 30 years ago. The bottom 50% pays almost nothing.

Friedman's recommendations have been implemented and this was done on the expectation it would help blacks.

Nonsense. Just because you say something it does not mean that it is true.

Has it? No. The opposite. From the end of the 40's up to the 80's blacks made some gains. Since then they haven't. So the theory sounds plausible but we have to check it against the facts. It's failed in that regard.

You got it wrong pal. The black family was destroyed by the Great Society programs that pushed fathers away from their children and took the stigma away from illegitimacy. We already had this discussion before. If the black family is doing worse it is because it does not have two parents at home as it used to before progressives won the day.

 
At 11/24/2011 8:03 PM, Blogger VangelV said...

He says free market capitalism is what brings people out of poverty.

True.

But of course there is no such thing as a free market.

Also true. But there are levels of meddling and the less the government interferes the wealthier the country will be. See the difference between North and South Korea or East and West Germany.

You can contrast those that are more free market with those that are less.

Yes we can. East and West Germany is the perfect case. Same people. Different systems. How did that work out?

The US at the end of the 19th century was highly protectionist and interventionist.

Actually, its government was much smaller than it is today. There was no income tax. There were no government bureaucracies meddling in all kinds of business activities. There was no fiat money system.

The most radical redution in poverty since the 50's is in South Korea and that has been highly interventionist.

Not as interventionist as North Korea. If intervention were the key to success why isn't North Korea a wealthy country?

Very aggressive industrial policy. Very protectionist, blocking the importation of superior products in order to build their industrial base. S Korea was the equivalent of Haiti 60 years ago. Today they make Hyundai, Kia, LG, Samsung. A powerhouse.

It seems that you are arguing for a fascist approach again.

Where's Haiti? Still trying the low tariff, low tax, low regulation methods. And still where they were 50 years ago, if not worse.

Haiti does not protect property rights. Its government steals capital from those that accumulate it. That is why it is poor.

So let me sum up your examples. History shows that small government and less interference is better. It shows that property rights need to be protected. Other than your fascination with National Socialism you might be coming around to seeing things better.

 
At 11/24/2011 8:05 PM, Blogger Larry G said...

" The black family was destroyed by the Great Society programs that pushed fathers away from their children and took the stigma away from illegitimacy."

didn't that happen first under slavery?

when did it change?

 
At 11/24/2011 8:30 PM, Blogger VangelV said...

And I would add that the real destruction of blacks occurred due to the drug war. It wasn't with the implementation of welfare that the black family disintegrated. When 1 in 3 blacks spend time in prison what do you expect will happen?

The drug war certainly did not help. But it also restricts whites, Mexicans, Asians, etc. Why don't they have such a high incarceration rate?

In the third video he gives us the trickle down theory. Give rich people more money and they build factories which create jobs.

My thirteen-year-old is trying to piss off my socialist relatives by arguing that is a free rider problem. The rich invest and take risks and the poor benefit by getting jobs. That means that the poor should be taxed so that some of those benefits could be recovered by the rich. I just think that he does not like the James Buchanan videos that I had him watch and is making fun of the public choice argument.

That's great, but there's another factor. If you redistribute and put money in the hands of the poor they spend it. That demand induces wealthy people to build factories.

Really? You mean Steve Jobs built factories because poor people were demanding i-Pods? There is no demand without supply. Read Say's Law again.

So which factor dominates? The verdict is in. We've tried trickle down.

When? When did the Federal Register get smaller? Yes, deregulation helped create many more jobs in the telecom sector but that is a success. Yes, deregulation helped transportation but that too is a success. Great wealth was created and it did flow down to the employees in those sectors. But that did not happen in the general economy where the tax and regulatory burdens kept growing.

Demand is down and unemployment is up. We are in the worst economic downturn we've had since the great depression. Friedman's theories have failed the test of reality. That's why OWS is out there.

Nice spin. But it was the Keynesian fantasy of stimulus and easy money that failed. And now you are paying for your sins.

 
At 11/24/2011 8:33 PM, Blogger VangelV said...

Or as my illiterate Mexican friend bush's put it, what good all that money it no go round and round. Why some got everythting and others nada, not even zapatas?

Two reasons. First, some earned it in the competitive marketplace by satisfying consumer demand. Those are the good guys who deserve all they earn. Second, some stole it thanks to their pals in the government. These people, and their government enablers, need to stop suckling on the public teat and compete in the free market.

 
At 11/24/2011 8:34 PM, Blogger VangelV said...

Sorry, I'm not going to sink to your level.

Meaning that you can't respond to his criticism.

 
At 11/24/2011 8:52 PM, Blogger VangelV said...

I think you're missing my point. You shouldn't feel so threatened - nobody argues that free market enterprise is the system that produces the best economic development overall. Your problem, from my point of view, is that you make this idea the central point of your thinking and try to rationalize EVERYTHING based on it.

That is not true. The basis for my thinking is that people act, that value is subjective, and that individuals have natural rights. Which one of these points do you think is wrong?

This is a problem with a lot of right wing people.

If you think that I am right wing that you have not paid attention. If you think that I am left wing you have not paid attention. I am an anarchist and even though I will side with the minarchist arguments once in a while I still see them as Jeffersonian Democrats who do not go nearly far enough in favour of liberty.

I am not a "leftie", whatever that means, but I can identify with some of the ridicule you guys are getting in the media, because some of you seem incapable to maintain a dialogue on a rational level.

Who is 'you guys?' I have attacke both the right wing nutcases who don't understand why some people have a legitimate gripe and the anti-capitalist lefties who don't understand that they have some wonderful and logical arguments for a change as they continue to act like clueless idiots.

Instead of agreeing there are moral issues with the system, but proposed alternative solutions are no good, they behave like little children stomping their feet and shouting "No! It's RIGHT! It's the way it's SUPPOSED to be! Everything is PERFECT!".

When have I said that the system is perfect or that there are no serious moral issues? Your problem is that you do not read very well or that you refuse to look at the arguments.

There clearly is a moral issue here. It is clearly wrong to use the power of government to rob people by transferring wealth from taxpayers, consumers, workers, and savers to protected insiders. That is what the people who run the big Wall Street institutions have done. Most of them should have been in jail for fraud and should have lost all of their equity, pensions, and income. The reason is not because capitalism did not work but because they were engaging in anti-market corporatist fraud.

Listen to Milton Friedman. This man, of great intellectual capacity, had no problem admitting that the system is not perfect. But he argued brilliantly that there's no easy solution to make it better and maybe there's no solution at all to make it better. He would never claim anything is perfect. That's how smart people think.

I love most of Friedman's arguments and have my kids watch his videos. My problem with Milton is that at times he is a court economist who offers cover for state activities that are criminal. He and others like him (think the GM people) have done a lot of harm to free market capitalism by trying to justify activities by government that could not be justified.

 
At 11/24/2011 8:57 PM, Blogger Artem Boytsov said...

Meaning that you can't respond to his criticism.

What criticism?

 
At 11/24/2011 9:01 PM, Blogger Artem Boytsov said...

VangeIV,

I have no issue with everything you said in your response to my post.

When have I said that the system is perfect or that there are no serious moral issues?

You may not have, but the article in question which I criticized seeks to put a moral justification on the unequal distribution of wealth. It does the job very poorly as I explained over and over again.

You disagree with my views, I get that, but am still to hear one single argument from you against my main point.

Artem.

 
At 11/24/2011 9:17 PM, Blogger VangelV said...

There's a growing discontent that the fruits of collective labor get shared very unequally.

What collective labour? You have a contract with a company that pays you the market rate. So do the other employees of that company. Some get paid a lot more than others because they are harder to replace. Others get paid even more because they have an equity position. There is nothing unequal about that. If you had the same amount of investment and the same position you would be getting similar compensation.

The article in question does an extremely poor job to address this discontent by claiming that in fact, it is all fair, because people like Bill Gates created a lot of value to justify such an unequal distribution.

It is fair. Bill Gates did not force anyone to work for him. He did not force anyone to buy his products from him. He earned his money in one of the most competitive markets possible and was rewarded by consumers who preferred his products to those offered by others. Of course, consumers also made some other people very rich as well, including entry level employees who started early and saw their stocks increase in value by tens of thousands of percent. Was it 'unfair' that the Microsoft secretary and many of its janitors became millionaires after the IPO? Should we take their money and spread it around as if we were in a commune? Why? Why not?

But is is a horrendous misrepresentation. Bill Gates did not himself create this value.

He created a great deal of the value. It was his planning and his actions that made Microsoft what it was.

It may be all right, perfect, and fair from the system's standpoint, but nobody argues with that. It's as if you would try to explain to people that NBA players get x1,000 compensation of those who didn't make the cut, because they work x1,000 harder. You would be laughed at.

Who would ever be stupid enough to make that argument? You get paid on the basis of how hard and expensive you are to replace. As long as you produce you get the market value. When you no longer make the cut your pay goes way down.

The words above have to be looked at in context. Some jobs that are dependent on time worked have fairly stable compensation. If you are a doctor, a cop, a judge, a hooker, or a hose painter your compensation depends on how much you can charge per hour. In most cases the changes are not dramatic. This means that if you are a dentist or a doctor and are patient you can slowly build up wealth until you are in the top few percent after a while. But there are groups of people where compensation is not based on how many hours and how hard you work. Your NBA player example is one of these. Other examples would be artists, actors, writers, speculators, and entrepreneurs. In these groups there is the potential of huge paydays and quick riches. But the problem is the distribution. In these fields the compensation goes to the few 'best' performers while the vast majority get very little. (Which is why Starbucks has so many documentary film makers working in its cafes while Michael Moore makes millions each year.)

Even if we take a random sample of individuals that does not include someone remotely close to Gates' level we would still see a power law distribution that would allow us to predict that someone like Gates would clearly appear when the sample size is big enough. All societies and all economic systems have such power law distributions. Whether you looked at China under Mao, the USSR, or Socialist Europe you still saw a power law distribution. Any society that tries to change this is not very robust and will have trouble maintaining a sound economic system.

 
At 11/24/2011 9:21 PM, Blogger Artem Boytsov said...

VangelV,

This argument cannot go any further until you provide me with your working definition of fairness.

Artem.

 
At 11/24/2011 9:28 PM, Blogger Artem Boytsov said...

What collective labour?

Please provide me with your definition of collective labour.

It is fair. Bill Gates did not force anyone to work for him. He did not force anyone to buy his products from him.

Please provide me with your definition of fairness and how it is different from legality or conformity to the existing rules, if it is.


Was it 'unfair' that the Microsoft secretary and many of its janitors became millionaires after the IPO?

Of course.

Should we take their money and spread it around as if we were in a commune?

No.

Why? Why not?

Because it would violate the most fundamental principle of the capitalist system, and so far, capitalist system has proved to be the most efficient system to create wealth and prosperity.

He created a great deal of the value. It was his planning and his actions that made Microsoft what it was.

Not early as much to justify x1,000 difference in compensation from the morality standpoint. Not nearly as much.

Who would ever be stupid enough to make that argument?

Seems like you are. Didn't you just try to persuade me that Bill Gates gets paid x1,000 more because he brings x1,000 value?

You get paid on the basis of how hard and expensive you are to replace. As long as you produce you get the market value. When you no longer make the cut your pay goes way down.

Of course. This is life. This is reality. I'm just not stupid enough to claim it's fair.

Even if we take a random sample of individuals that does not include someone remotely close to Gates' level we would still see a power law distribution that would allow us to predict that someone like Gates would clearly appear when the sample size is big enough.

I know. I'm just not stupid enough to claim it's fair.

All societies and all economic systems have such power law distributions. Whether you looked at China under Mao, the USSR, or Socialist Europe you still saw a power law distribution.

I know. I'm just not stupid enough to claim it's fair.

Any society that tries to change this is not very robust and will have trouble maintaining a sound economic system.

I know. That's why I never claimed we should get rid of the capitalist society. Although I do think societies can mitigate this negative effect (power law distribution) to some extend, but PLEASE, PLEASE, let's not get into that, because it is so not the point of my argument.

 
At 11/24/2011 9:40 PM, Blogger VangelV said...

Yes, this is the way it works - you may be 0.5% better at something than the other guy, and get x1,000 compensation than the other guy. This is not fair, it's not even remotely fair, but it MAY be the best way to incentivize people to be the best.

This is a rational response from a person who doesn't try to idolize the system and can actually think and relate to other people sense of fairness.


Actually, I don't idolize the system in the US. I argue that it is very anti-market and unjust because it is anti-market. I have also argued that the crony capitalism that is being sold as free-market capitalism will destroy the economy and possibly the country.

But as I read this it becomes clear that you don't seem to have a clue about what some of us are talking about because you have never been exposed to arguments that do not come from the left or the right. You also have some trouble following some of the statistical arguments being made. On that front I suggest that you take a look at the Mediocristan/Extremistan discussion in The Black Swan: The Impact of the Highly Improbable.

I think that you are clueless because you see the world as Mediocristan where nothing is scalable, everything is constrained by time and boundary conditions, and where Gaussian probability models are perfectly adequate to describe what is going on. (Ironically enough, many of the 'quants,' who created many of the models that were responsible for the financial meltdown made similar assumptions.)

But we do not live in Mediocristan. In our world Gaussian models are inadequate and variation is far less constrained. Here compensation is scalable, random events are common, and Black Swans are very real.

The problem with the left (and the right) is that they try to make the world be what it isn't. They make assumptions that are wrong and then are surprised when events they deem 'unfair' move the needle far from their expectations. Theirs are very inhuman visions of society. Which is why they never have worked.

 
At 11/24/2011 9:44 PM, Blogger Artem Boytsov said...

All societies and all economic systems have such power law distributions. Whether you looked at China under Mao, the USSR, or Socialist Europe you still saw a power law distribution.

Actually, no. I take this one back. There were no power law wealth distribution in the USSR. Power law influence distribution - yes. But the lifestyle of cabinet ministers or manufacturing directors differed from the lifestyle of professors rather modestly. Probably in the same way lifestyles of a medium business owner and his well-paid employees differ. Not even close to how lifestyles of billionaires/celebrities and university professors differ, not even close.

If you want to get a better feel for that difference, look at the US government. Barring their own personal wealth, the lifestyles of the president, senators and other high officials are actually quite good but modest. They are provided with cars, air transportation, security, probably good food as well, some help. But man, oh man, they're far away from Paul Allen's yacht. So this is exactly how it was in USSR.

That is just a factual detail, it has nothing to do with my sympathies or lack thereof for USSR. I still think capitalism is the best system in the world, and that's pretty sad, actually.

 
At 11/24/2011 9:49 PM, Blogger Artem Boytsov said...

VangelV,

I am tired of you. You are an idiot!

I am not clueless, you're just too self-absorbed to listen to what I'm saying!!!!

Nobody is arguing with anything that you're saying. Stop misrepresenting my words.

Yes, the world is not Gaussian, the rewards are highly non-proportional to the efforts, and luck has a lot to do with it all,

and THIS IS NOT FAIR.

Get over it. Stop trying to make it look fair.

Can we make it fair? Probably not. Can we stop people like you from brainwashing everyone that is is, in fact, fair? I certainly hope so.

Artem.

 
At 11/25/2011 2:37 AM, Blogger Ron H. said...

"I think it was Ron who said you have no right to pollute my air, "

Nope, it wasn't Ron.

 
At 11/25/2011 2:45 AM, Blogger Ron H. said...

"Why some got everythting and others nada, not even zapatas?"

Do you mean "zapatos"?

If you are going to portray a mexican, you should learn a little Spanish.

 
At 11/25/2011 3:40 AM, Blogger Ron H. said...

V: "I did not know. But I suspected where it would go. Sadly, I was right."

Where do these people come from?

 
At 11/25/2011 4:11 AM, Blogger Ron H. said...

Artem: "...and THIS IS NOT FAIR."

You are absolutely correct. This isn't fair. Life isn't fair. Didn't your mommy teach you that?

Do you recommend something be done to make "it" fair, or is just making the claim enough for you?

You wrote that you don't disagree with anything VangelV has written, so is there a point you would like to make, or is "it's not fair" the extent of it?

 
At 11/25/2011 4:35 AM, Blogger Ron H. said...

Artem.

Try this little thought experiment:

Let's say that tomorrow morning, everyone has exactly the same amount of wealth. Fairness reigns supreme, or at least equality of wealth does.

Now, let's say an entertainer - I'll pick Neil Young, but you can make any substitution you like - decides to stage a big concert close to where we live.

He makes the arrangements for a venue that will hold 100k people, and advertises tickets for $10/each. I, for one, would not hesitate. One hundred thousand people eagerly trade $10 for a ticket, saying "Please take my money, I value it less than the ticket.

The night of the concert comes, we who have bought tickets enter the stadium, and the concert begins. Neil - or whoever - performs his best concert ever for 3 solid hours. Everyone in attendance is ecstatic, and feels they have gotten one of the the best deals of their lives.

There are no complaints, and every concert goer feels they are much better off, having experienced the concert, than they would have been keeping their $10.

There's a problem, though: Neil - or whoever - now has $1 million more than everyone else.

Is that fair? What, if anything, should be done?

 
At 11/25/2011 5:28 AM, Blogger Artem Boytsov said...

You are absolutely correct. This isn't fair. Life isn't fair. Didn't your mommy teach you that?

Did your mommy teach you how to talk to strangers, Ronny?

Do you recommend something be done to make "it" fair, or is just making the claim enough for you?

At the present moment, the claim is enough. Making it fairer is very complicated, and certainly isn't a discussion I'm prepared to have with religious fanatics. I'd love to discuss that with likes of Milton Friedman, for example. I'm sure she'd have a lot of smart things to say.

You wrote that you don't disagree with anything VangelV has written, so is there a point you would like to make, or is "it's not fair" the extent of it?

I made this point over and over and over and over again (probably 5 times already - go re-read my posts). The article to which we're all happily commenting is making a disgraceful attempt to justify unfair and unequal distribution of wealth from MORAL grounds, claiming that it IS, in fact, very much FAIR, because all of these mega-rich people deserved to be mega-rich (and, by extension of this logic, all of these poor and homeless people deserve to be poor and homeless). It does the job very poorly. Its logic is objectionable. This is a bad and hypocritical position to take. The article is hypocritical in other aspects as well - for example, it misrepresents public's discontent in the manner I already described before.

A much better position to take would be to try to defend it from efficiency (rather than moral) standpoint, admit life's unfairness, but try to persuade people that is is, so far, the best system known to men, with all its ugliness. That would be a position I would at least respect (and it's also very close to my position, though I don't want to discuss it with you here).

But you religious nuts following capitalism like a cult just don't want to hear me, do you? You would rather prefer to manipulate everyone into your point of view than have a reasonable conversation.

Why are you guys so insecure?

Artem.

 
At 11/25/2011 5:37 AM, Blogger Artem Boytsov said...

There's a problem, though: Neil - or whoever - now has $1 million more than everyone else.

Is that fair?


No.

It is not fair and can never be fair that a person can enjoy a million dollars while others don't have food on their tables, a shelter over their roofs or access to good medical care, especially if they are willing to work and get trained and contribute to the society.

It is also not fair to the people that are just a little bit worse or less lucky than Neil. They get nada.

What, if anything, should be done?

Nothing should be done. Life isn't fair. Didn't your mommy teach you that?

Artem.

 
At 11/25/2011 5:43 AM, Blogger Artem Boytsov said...

Ron,

We will understand each other when you understand that your desire to rationalize the system from moral grounds is just exactly that - rationalization and a psychological defense mechanism.

You are probably a good person and you, too, cringe and experience a sense of shame and guilt when you see homeless people on the streets or hungry children.

But precisely because you're a good person, you find it especially hard to reconcile your support for the system (which is probably beneficial to you, or at least, beneficial to the society as you understand on a rational level) and the system's moral ugliness, so you conflict "fair as legal" and "fair as moral" and get completely confused.

Stop rationalizing, accept the system's occasional moral ugliness, but still continue to maintain it's the best system for society (at least known thus far), and I will not have a problem with you.

Artem.

 
At 11/25/2011 8:46 AM, Blogger VangelV said...

But from emotional and fairness standpoint, given us through thousands of years of evolution, nobody is fooled.

When you use the 'emotion' card it is all about being FOOLED. A robust society needs to rely on reason, not emotion because emotion easily gets out of hand.

Employees take much more PERSONAL risk than investors, and compensated much less in case of success.

No they don't. I take an engineering job and get paid. If I lose my job because I am not capable of doing it or the company goes out of business I go to work elsewhere. There is no other loss. If I used my own capital and invested in that company I lose all of that capital as bankruptcy wipes me out and the senior debt holders take over the assets.

The fact that you can't even see this simple fact shows that you do not rely on reason but are trying to get emotional support for a point that is not defensible in fact.

Imagine you have $100 million.

How did I get this $100 million? That certainly matters.

You invest them in a healthy mix of government backed bonds and equities, you don't have to work, you drink champagne all day, and you have a steady income of at least a couple of million dollars a year. A person who has to work for a living asks you - why do you think it's fair?

Because I earned the $100 million or had it given to me by someone who earned it. In a free and rational society it is my $100 million to do with as I please.

You, as a master rationalizer, say - it's fair because I'm compensated for risk I'm taking by investing my $100 million.

No. My argument is simpler than that. It is my money. I can choose to invest it as I please. If I choose well I will be rewarded by the market. If I choose badly I lose. The idea of fair does not even have to enter the discussion.

Well, if you think your explanation makes any sense, you definitely deserve the beating that is coming.

What beating? Why should people not be able to do with their money what they want? Is it 'fair' that people who have earned a lot of money have to give it to those who haven't? Why? And have you considered where that philosophy leads?

 
At 11/25/2011 9:00 AM, Blogger VangelV said...

What risk??? Your personal risks are virtually zero.

First, how does one wind up with $100 million without taking risks? We don't live in your fantasy world where that kind of money grows on trees. Second, once someone earns money isn't it up to him to do with it as he feels appropriate? What gives emotional dweebs who are ignorant of philosophy, ethics, or economics the right to meddle just because their inadequacy is revealed emotionally? Third, it is very easy to use a lot of money even when choosing what you consider a 'safe' strategy. Someone who bought the portfolio mix that you have recommended in 2000 has lost around 50% of his purchasing power. Should we compensate him/her for the loss?

In a long run, your portfolio is all but guaranteed to be at least profitable enough so that you don't have to work, you have very little chance to lose any capital, you're not taking ANY work-associated risk, such as a work-related injury. Any person going to work every day takes much more PERSONAL risk than you do.

But the question is the same. In the real world you need to take risks to accumulate $100 million. This is not your fantasy world where emotion trumps over logic. Here people have to work and take risks to earn $100 million. Once they do they have every right to invest it or dispose of it as they please.

The rational response to that moral dilemma is not to try to religiously justify it, but simply say: "Yes, this is probably as unfair as you can have it, but this is the best way to incentivize people to save, invest and open businesses, and we're all better off because of it". Milton Friedman had no problem with that kind of answer but you do.

No. Friedman understood that people didn't find $100 million on the street. He understood that money is earned. And he did not elevate emotional arguments over logic. Your argument is what I would expect from an emotionally immature high-school student, not a rational adult.

Of course, I'm not. I was talking about a VC who allocates 0.5% of capital to the idea. They didn't lose everything, they lost 0.5%. In the long run, they will be ahead of any engineer similarly competent in their own field of expertise.

If the company fails the loss is 100% of everything that was invested. The employees still get the pay that they earned while the company was kept afloat by the VC injections and are still better off than not having worked in the company in the first place. It is noted that some people choose to work in such companies for less pay because they rely on stocks and stock options. When they do, they are not just employees but investors. And let me note that without venture capital to support a company the products and jobs that the company creates may never be created.

Oh, believe me, I know. I probably know it better than you because I'm not viewing at through a religious dogma glasses, so I probably understand it better.

I have to love the arrogance. A person who starts an argument with assuming that $100 million magically appear without anyone having taken risks and assuming that there is a riskless portfolio that can be created that would have a person set for life talks about knowing more than others. You are simply fooling yourself because you are ignorant of the subject and rely on emotion instead of logic.

 
At 11/25/2011 9:06 AM, Blogger VangelV said...

This is all right and correct, and I wouldn't argue that. Unfortunately it's not so simple in real life.

But it is. That is how human societies work. There are power law distributions and variations are much greater than Gaussian distributions predict. The economically illiterate are trying to fit everything into models that do not work in the real world. When those models fail, instead of ditching those models their argument is that things are not fair.

Once you have capital,...

But how do you earn capital? And once you have earned it why should you not treat that capital as yours and do with it what you want as long as you do not violate the rights of other individuals?

...you have very little chance for misery (certainly much less than a professional that can wind up without a job for some time), but much higher rewards.

This is not how the real world works. In the real world people lose a lot of money if they are complacent, not careful, or just unlucky. As I argued above, your example of a 'safe portfolio' would have lost around 50% of its purchasing power since 2000. I don't know about you but I think that losing $50 million in a decade would certainly make many people quite miserable.

 
At 11/25/2011 9:10 AM, Blogger VangelV said...

You also greatly overestimate the amount of misery you get from a failed business. NeXT failed spectacularly, but Steve Jobs never starved.

I know people who have lost their families because their businesses failed. When you go from being well off to broke you are miserable. And NeXT was not exactly a failure. It was sold for nearly half a billion and generated many patents that have quite a bit of value.

You also forget that the source of capital is not necessarily starting a business. It might be simple luck (joining Microsoft early) or being a high-paid CEO or inheritance or a million of other things.

If you were ask me what I would do about it, I would say: "Nothing". But your need to be morally righteous about it is what I find highly objectionable.

 
At 11/25/2011 9:42 AM, Blogger VangelV said...

There's nothing immoral about voluntarily transactions IN GENERAL (there are exceptions), but it is not the point.

But it is the point. When competent individuals choose to act voluntarily there is nothing immoral about the transaction. Both sides of the transaction give up what they value less and get something that they value more. There is nothing immoral about this and there are no exceptions unless you want to bring up the issue of fraud. But we already have laws against fraud so there is no need to do very much at all other than to enforce those laws.

The point is that we are social animals. Our core limbic sense of morality includes sense of justice and helping other people.

First of all, let us dispense with jargon like, 'core limbic sense of morality,' because it is not necessary to muddy the waters. And nobody on my side of the argument will say that people should not help other people. The point is about justice. Is it moral to steal from some people so that you can transfer what is stolen to others? Is it moral to have bureaucrats whose livelihood depends on the process to determine how much is required and what needs to be funded out of the stolen funds?

This is why a lot of us (do you?) feel a bit of shame passing by a homeless person on the street.

I feel no shame. Sometimes I take that person to a place that sells food and buy him/her something. I do not give money because the last time I did that I saw the person buying cheap wine. But I have no problem with people who choose not to give anything to homeless people because they may have other priorities and needs on how to spend their money.

This is what capitalism has always struggled to reconcile, and by trying to brainwash people that it's all moral and good, YOU'RE DOING IT WRONG.

First of all, you are still talking about capitalism when I think that you mean corporatism. There is something wrong with the system but it has nothing to do with markets or competition. It has to do with the use of government power to erect barriers against competition and to transfer wealth from tax payers to tax eaters.

 
At 11/25/2011 9:47 AM, Blogger VangelV said...

didn't that happen first under slavery?

No. The data shows that the black family was a strong institution during slavery and after slavery was over.

The Black Family in Slavery and Freedom, 1750-1925

when did it change?

The 1960s. This was covered on the other thread.

 
At 11/25/2011 10:04 AM, Blogger VangelV said...

You may not have, but the article in question which I criticized seeks to put a moral justification on the unequal distribution of wealth. It does the job very poorly as I explained over and over again.

I have pointed out that there is a big problem with corporatism. You just did not read my responses carefully enough to figure out what my criticism means.

You disagree with my views, I get that, but am still to hear one single argument from you against my main point.

You have heard many arguments. You are anti-market as most lefties. But the problem is not the market but the crony capitalism that robs consumers, workers, investors, and savers by transferring wealth from them to special interest groups that are protected and rewarded by the power that government wields.

The solution is to remove from government the power that allows the theft that is taking place. But the typical member of the left cannot bring itself to admit that government is responsible because it loves big government. Like the typical conservative, the leftie somehow believes that if the right people get to make the decisions about how society should be run things will be good and just. But the problem is not the people in charge but the structure of corruption that is inherent in the system. We have already seen that Obama is not very different from Bush. We have seen how both bailed out the Wall Street gamblers and how both filled their cabinets with the usual suspects from the usual companies and usual clubs. There is no difference between the two parties because both are for sale and are more interested in power than in justice.

I think that it is time that you woke up and began to look at the reality around you. When I was in school I held views just like the ones that you hold now. But once I was exposed to literature that my teachers and professors conveniently ignored it was easy to abandon the dark side and see things in a clear and logical manner. If you are smart enough and curious you will also find your way to the light side and will reject the statists on the right and left. But you have to be willing to be objective and open to logical rather than emotional arguments. So far you have not shown that you are willing to abandon the emotional arguments and embrace reason. And without that you will not understand the arguments being provided against your position because you will read into them something that the authors did not intend. As I said above, if you think that I agree with the right wing arguments than you have no clue what I am actually saying.

 
At 11/25/2011 10:47 AM, Blogger Zachriel said...

VangelV: No. The data shows that the black family was a strong institution during slavery and after slavery was over...This was covered on the other thread.

Actually, in that thread, you consistently conflated correlation with causation, and ignored the multitude of factors influencing family structure and stability.

 
At 11/25/2011 11:17 AM, Blogger VangelV said...

This argument cannot go any further until you provide me with your working definition of fairness.

There is no scientific or objective definition of fairness. I would argue that the outcome of a voluntary transaction in the absence of fraud is fair. When both sides to a transaction give up what they value less and get what they value more I would say that both sides 'win' and the outcome is fair.

Since we live in a world where volatility is high and random events are frequent we cannot use bad or good luck to muddy the water. Eventually, the effects of luck have a tendency to cancel out for the prudent individual who is aware of the risks posed by that volatility.

Please provide me with your definition of collective labour.

After you. You are the one talking about collective labour, not me.

I do not believe that labour is collective. I believe that the average individual trades his labour for money. There is no collective. There are just other individuals whose job it is to coordinate these activities and yet other individuals whose job is to coordinate their activities. You might want to read the Leonard Reed piece and pay attention.

"Was it 'unfair' that the Microsoft secretary and many of its janitors became millionaires after the IPO?"

Of course.


Why? They took less pay early on when the company was starved for capital and got shares and options as part of their compensation instead. Nobody forced Gates and the other owners to be 'generous' and to reduce their future gains. They used a compensation scheme that would maximize their opportunity to succeed. And that worked out well not only for them but for the lower skilled employees who took less money in exchange for the opportunity to gain when the shares went up in price.

It was a voluntary exchange that benefited both sides. There isn't anything unfair about it.

Not early as much to justify x1,000 difference in compensation from the morality standpoint. Not nearly as much.

There is no morality view about this at all. People take risks and engage in voluntary exchanges. There is no force or fraud involved.

Seems like you are. Didn't you just try to persuade me that Bill Gates gets paid x1,000 more because he brings x1,000 value?

No. I argue that in human society and in free markets compensation is scalable. If you took a sample that did not include Gates you would find a distribution that predicts that people like him would show up when the sample size was increased.

Of course. This is life. This is reality. I'm just not stupid enough to claim it's fair.

But isn't it stupid to use a term like 'fair' without being able to define it properly? You assume that value is objective. You assume a world where Gaussian distributions can explain the observations. And then you define expected outcomes as fair. But you have yet to figure out that your assumptions are wrong in a human society. In which society do you not have a power law distribution when you examine income, power, and wealth distributions? And if you can't find one why do you insist that we live in one?

 
At 11/25/2011 11:25 AM, Blogger VangelV said...

I know. That's why I never claimed we should get rid of the capitalist society.

You are doing something just as bad. You are arguing that we should get rid of the free market.

Although I do think societies can mitigate this negative effect (power law distribution) to some extend, but PLEASE, PLEASE, let's not get into that, because it is so not the point of my argument.

Here is your problem again. It is not a 'negative effect'. That distribution is the driver of progress in society. In a free society where markets are not interfered with the only way to become a Bill Gates is to convince consumers to give you a lot of money. The only way to do that is to produce something that they value greatly and to stay ahead of your competition. There is nothing negative about that because the benefits that accrue to consumers is far greater than what the Gates types get.

And let us note that in a free market society the poor live much better than the middle classes in the heavily regulated societies that the lefties tend to favour. I remember my government showing German strikers rioting as they fought for higher pay. While the political bosses expected us to see the discontent most of us marveled at the fact that mere workers were able to afford houses, nice cars, high quality clothing, etc. If you want to cure yourself of what ails you go and travel in the world. See how real poor people live and why they are poor. Perhaps you will figure out the errors in your belief system and rethink your faith based 'fairness' position.

 
At 11/25/2011 11:25 AM, Blogger Zachriel said...

VangelV: I would argue that the outcome of a voluntary transaction in the absence of fraud is fair.

So if a hungry 12-year-old orphan trades rough sex for food, you consider that "fair." Or borrows money knowing that default means a beating or death. Or someone who sells his kidney to buy his sick mother medicine. Or sells information for thirty pieces of silver.

 
At 11/25/2011 11:28 AM, Blogger Zachriel said...

VangelV: Eventually, the effects of luck have a tendency to cancel out for the prudent individual who is aware of the risks posed by that volatility.

I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.

 
At 11/25/2011 11:46 AM, Blogger VangelV said...

Actually, no. I take this one back. There were no power law wealth distribution in the USSR. Power law influence distribution - yes. But the lifestyle of cabinet ministers or manufacturing directors differed from the lifestyle of professors rather modestly. Probably in the same way lifestyles of a medium business owner and his well-paid employees differ. Not even close to how lifestyles of billionaires/celebrities and university professors differ, not even close.

Actually, the differed significantly. The 'leaders' had control over 'state' assets. They got top notch health care while their people were dying of simple diseases. They had high quality food while the people had to line up to get their share of crap every day. They had drivers for the limousines that they used. They had access to private planes. They had nice dachas on the Black Sea or on remote mountain lakes. They had high end mistresses to provide them with the same type of pleasures that your Senators and governors get into so much trouble for. The same was true for the party members in China and other communist nations.

The USSR failed because the long tail did not provide sufficient wealth to the masses, not because the ruling class lived so much better than the average citizen. When the television sets showed that the lowly Western worker was able to live much better than a Soviet doctor, lawyer, or professor the system collapsed. And those that had access to assets purchased them for little or stole them and the post-collapse FSU wound up with an even steeper distribution.

If you want to get a better feel for that difference, look at the US government. Barring their own personal wealth, the lifestyles of the president, senators and other high officials are actually quite good but modest. They are provided with cars, air transportation, security, probably good food as well, some help. But man, oh man, they're far away from Paul Allen's yacht. So this is exactly how it was in USSR.

It actually isn't how it was in the USSR. There were no wealthy industrialists in the USSR. The power and wealth was concentrated in the hands of politicians. And unlike Paul Allen they were able to openly initiate force against others and easily get away with murder.

As for the US Congress, about half of its members have reported a net worth of a million dollars. While that is not very high it does not include the value of the influence that they get to sell when they lobby the government on behalf of their clients. Gingrich made millions pushing bailouts and aid for corporate clients. That ability to earn because of his membership in the club never showed up when his net worth was being reported.

That is just a factual detail, it has nothing to do with my sympathies or lack thereof for USSR. I still think capitalism is the best system in the world, and that's pretty sad, actually.

But you got your facts wrong. As I said, the power law distribution was not very different in the USSR than it was in the US. And things have not changed much in the post-collapse world.

 
At 11/25/2011 11:53 AM, Blogger VangelV said...

I am not clueless, you're just too self-absorbed to listen to what I'm saying!!!!

I hear you fine. You use terms that can't be defined and depend on emotion to make what should be logical arguments. What I find interesting is the fact that you don't even want to know what you need to know to make a decent argument. As I wrote above, you lefties are just as screwed up and ignorant as the right wingers you claim to oppose.

Nobody is arguing with anything that you're saying. Stop misrepresenting my words.

I am not misrepresenting them. You are anti-market because you think that markets do not come up with 'fair' outcomes without ever being able to define what 'fair' is.

Yes, the world is not Gaussian, the rewards are highly non-proportional to the efforts, and luck has a lot to do with it all,

and THIS IS NOT FAIR.


We live in the real world. It is what it is and your silly idea that it must somehow become what you think is 'fair' is not very good.

Get over it. Stop trying to make it look fair.

I said that all voluntary transactions that take place in the absence of fraud are fair. End of story. You cannot refute that point so you move onto some general argument about fair outcomes in the aggregate. I think that is about as stupid an argument as one can make because it does not deal with reality but with utopian notions that have no place in a rational discussion.

 
At 11/25/2011 11:55 AM, Blogger VangelV said...

Where do these people come from?

That is what the public school system teaches them. Haven't you noticed that the only place where Communism still has strong support is in the English departments of Western Universities? The economics departments are not much better.

 
At 11/25/2011 12:00 PM, Blogger Larry G said...

during slavery family members were often sold... and non-family members put together in slave quarters.

anyone who thinks blacks were better off is living in a self-imposed ignorant world.

there may well have been some things down in the interest of helping that turned out to be not the right thing but to say they were better off as families as slaves is just plain ignorant.

 
At 11/25/2011 12:07 PM, Blogger VangelV said...

Making it fairer is very complicated, and certainly isn't a discussion I'm prepared to have with religious fanatics.

We live in the real world, not some utopian fantasy. Out here you can't satisfy your definition, whatever that may be, because there will always be some people who have a lot more than others.

made this point over and over and over and over again (probably 5 times already - go re-read my posts). The article to which we're all happily commenting is making a disgraceful attempt to justify unfair and unequal distribution of wealth from MORAL grounds, claiming that it IS, in fact, very much FAIR, because all of these mega-rich people deserved to be mega-rich (and, by extension of this logic, all of these poor and homeless people deserve to be poor and homeless). It does the job very poorly. Its logic is objectionable. This is a bad and hypocritical position to take. The article is hypocritical in other aspects as well - for example, it misrepresents public's discontent in the manner I already described before.

You are still missing the point. First, we do not have a free market system. Many people are ripped off because the government protects their supporters whether that is corporate political contributors or groups that trade votes for money and protection from competition. My solution is to get Congress, the Executive, and courts to stick to the powers delegated to them and to let the free markets work.

Instead of supporting the call for ending corporatism, you choose to talk about how unfair it is that some people earn a lot more than others even if they obtained their earnings by engaging in voluntary transactions with satisfied consumers.

A much better position to take would be to try to defend it from efficiency (rather than moral) standpoint, admit life's unfairness, but try to persuade people that is is, so far, the best system known to men, with all its ugliness. That would be a position I would at least respect (and it's also very close to my position, though I don't want to discuss it with you here).

No it isn't. The free market needs to be defended because it is entirely moral. There is no initiation of force and participants are protected from fraud. Trying to argue that voluntary transactions are immoral or evil is a slippery slope and there is no need to go that way.

But you religious nuts following capitalism like a cult just don't want to hear me, do you? You would rather prefer to manipulate everyone into your point of view than have a reasonable conversation.

Let me set you straight about one thing. My arguments (and Ron's) are based on logic. It is you who reject logic in favour of emotion. It is you who use words that you cannot define. It is you who imagine that we can turn the real world into a utopia where human nature will not be permitted to show itself. Frankly, I can't think of a more faith based position than yours.

 
At 11/25/2011 12:14 PM, Blogger VangelV said...


We will understand each other when you understand that your desire to rationalize the system from moral grounds is just exactly that - rationalization and a psychological defense mechanism.


No it isn't. What is immoral about voluntary transactions in which both sides give up something that they value less and get something that they value more?

If you can't answer that point you have no case.

 
At 11/25/2011 12:24 PM, Blogger VangelV said...

It is not fair and can never be fair that a person can enjoy a million dollars while others don't have food on their tables, a shelter over their roofs or access to good medical care, especially if they are willing to work and get trained and contribute to the society.

Here we go. There is your religious position. As long as there are people who make bad decisions, are incompetent, lazy, or just unlucky nobody should be allowed to earn a lot of money. What kind of moronic statement is that?

If we were to adopt such a position why would the marginal individual ever try to work? After all, if s/he were entitled to the earning of the productive individuals why even try? But if that were the case why would the productive work as hard as they do? If we adopt theft as the morality that dominates economic life why would the victims give more than the minimum?

It is also not fair to the people that are just a little bit worse or less lucky than Neil. They get nada.

Let me get this straight. People who are born in a country where the poor suffer from obesity are unlucky? And someone who works at his craft for decades and makes the best out of the skills he was born with is lucky? What about all the other people born with the same skills who never bothered to work as hard?

 
At 11/25/2011 12:25 PM, Blogger VangelV said...

Actually, in that thread, you consistently conflated correlation with causation, and ignored the multitude of factors influencing family structure and stability.

I pointed out that the black family was strong up until the 1960s. I pointed out that the welfare programs made it easier to collect money for kids but only if the fathers were not around. I pointed out that once the funding problems were eliminated the stigma of illegitimacy went away.

 
At 11/25/2011 12:30 PM, Blogger VangelV said...

So if a hungry 12-year-old orphan trades rough sex for food, you consider that "fair." Or borrows money knowing that default means a beating or death. Or someone who sells his kidney to buy his sick mother medicine. Or sells information for thirty pieces of silver.

A hungry 12-year-old orphan is not competent and should not be entering into economic transactions.

But let us say that she were older and competent. In that case the answer would be yes. It is fair because she valued what she got more than what she gave up. If she didn't she would not make the trade.

As for the second part, the initiation of violence is not permitted because it violates the rights of the individual. That would mean that the loan would be perfectly fair but that payment would have to be extracted in some other way.

 
At 11/25/2011 12:38 PM, Blogger VangelV said...

during slavery family members were often sold... and non-family members put together in slave quarters.

anyone who thinks blacks were better off is living in a self-imposed ignorant world.


Here you go again. The straw man shows us that he has no brains.

I simply pointed out that the data, which is what we need to rely on when making arguments, shows that the black family unit was strong during and after slavery. That is why I gave you the Gutman reference many times.

And that is the point that Williams was making.

"Illegitimacy among blacks today is 70 percent. Only 41 percent of black males 15 years and older are married, and only 36 percent of black children live in two-parent families. These and other indicators of family instability and its accompanying socioeconomic factors such as high crime, welfare dependency and poor educational achievement is claimed to be the legacy and vestiges of slavery, for which black Americans are due reparations. Let's look at it.

In 1940, illegitimacy among blacks was 19 percent. From 1890 to 1940, blacks had a marriage rate slightly higher than whites. As of 1950, 64 percent black males 15 years and older were married, compared to today's 41 percent.

In Philadelphia, in 1880, two-parent family structure was: black (75.2 percent), Irish (82.2 percent), German (84.5 percent) and native white Americans (73.1 percent). In other large cities such as Detroit, New York and Cleveland, we find roughly the same numbers.

According to one study of black families (Herbert G. Gutman, "The Black Family in Slavery and Freedom, 1750-1925"), "Five out of six children under the age of 6 lived with both parents."

That study also found that, in Harlem between 1905 and 1925, only 3 percent of all families were headed by a woman under 30 and 85 percent of black children lived in two-parent families.

The question raised by these historical facts is: If what we see today in many black neighborhoods, as claimed by reparation advocates, are the vestiges and legacies of slavery, how come that social pathology wasn't much worse when blacks were just two or three generations out of slavery? Might it be that slavery's legacy and vestiges have a way, like diabetes, of skipping generations? In other words, for example, that devastating 70 percent rate of black illegitimacy simply skipped six generations -- it's a delayed effect of slavery...."

 
At 11/25/2011 12:49 PM, Blogger juandos said...

artem whines: "But you religious nuts following capitalism like a cult just don't want to hear me, do you? You would rather prefer to manipulate everyone into your point of view than have a reasonable conversation.

Why are you guys so insecure?
"...

Well what's painfully obvious here is that artem's understanding of basic capitalism/free markets is less than zero...

Its a real head scratcher artem's attempt to conflate capitalism with religion but then again that makes me wonder if artem's of religion is on par with his understanding capitalism?

You're a strange individual artem...

 
At 11/25/2011 1:31 PM, Blogger Larry G said...

" According to one study of black families (Herbert G. Gutman, "The Black Family in Slavery and Freedom, 1750-1925"), "Five out of six children under the age of 6 lived with both parents."

how would you actually find this out 100 years later when many blacks cannot even trace their own family trees back that far?

I appreciate the links but I'm pretty skeptical that someone could develop enough information about slaves such that they knew what 5 out of 6 did or did not do.

families were fairly routinely broken up in that time and now days, how many black people do you know that say... my great great (or) great grandparents did thus and so.

almost zero.

do I doubt Gutman's work.. yes.

 
At 11/25/2011 1:52 PM, Blogger Zachriel said...

VangelV: A hungry 12-year-old orphan is not competent and should not be entering into economic transactions.

Who decided that? And what is a homeless orphan child to do?

VangelV: As for the second part, the initiation of violence is not permitted because it violates the rights of the individual.

How so, if it is part of a contract openly entered into?

VangelV: shows that the black family unit was strong during and after slavery.

Marriage wasn't legal, and couples often changed during their lifetimes, just as they do now. Not only were large numbers of couples separated by slave sales, but the biological father was frequently the slaveowner.

You consistently ignored all the other pressures on families, including the pace of modern life, the drug war, etc. You simply didn't make your case, and refused to consider the possibility of other factors being involved.

 
At 11/25/2011 2:32 PM, Blogger Jon said...

I posted my comment in the wrong thread, but VangeIV, do you have a source on this claim:

Not true. The top 10% of income earners pay far more of the total income tax than they did 30 years ago. The bottom 50% pays almost nothing.

Could be true because all the income gains have gone into the pockets of the rich. So for instance if the top 10% used to make $100K and now they make $200K and their rate dropped by 25% while the bottom income earners stay at $30K the rich would pay a larger share of the taxes. When you reap all the income gains what do you expect? Are the poor that don't enjoy income gains supposed to pay more?

The other point is that the income tax is the one progressive tax. Other taxes are regressive, like excise taxes and Social Security taxes. So this is a standard misleading right wing claim focusing on only one tax and ignoring the overall tax picture. Taxes in the US overall are very mildly progressive when you include state and local taxes.

 
At 11/25/2011 3:12 PM, Blogger Ron H. said...

Artem: "Did your mommy teach you how to talk to strangers, Ronny?"

My mommy taught me to talk to strangers with the amount of respect they deserve, based on the strength of their arguments on blogs.

"I made this point over and over and over and over again (probably 5 times already - go re-read my posts)."

And you have been ignoring the responses.

If you want others to agree that life isn't fair, then you already have that. If you wish to point out that crony capitalism isn't fair, as it relies on enlisting government force to steal from others, you have that. If you want to say it's unfair that Neil Young now has $1 million more than everyone else because 100k people eagerly gave him the money in exchange for entertainment, you certainly need to provide some arguments beyond your unsupported claim that "it's not fair".

"No.

It is not fair and can never be fair that a person can enjoy a million dollars while others don't have food on their tables, a shelter over their roofs or access to good medical care, especially if they are willing to work and get trained and contribute to the society.
"

Consider that in the thought experiment 100k people freely chose to spend $10 on their own entertainment. There were no others who don't have food on their tables, a shelter over their roofs - whatever that means - or access to good medical care. Everyone had the same access to available goods and services, remember?

Is it self interest you find abhorrent? Should people spend their resources on those less fortunate before spending on themselves?

"At the present moment, the claim is enough. Making it fairer is very complicated, and certainly isn't a discussion I'm prepared to have with religious fanatics."

In other words, you want to make an unsupported claim, refuse to provide any support, and expect others to agree with you. Good luck with that.

"But you religious nuts following capitalism like a cult just don't want to hear me, do you?"

Huh? People are listening if you have something to say beyond "it's not fair".

"You would rather prefer to manipulate everyone into your point of view than have a reasonable conversation.
"

You first - start a reasonable conversation. "It's not fair" has already been covered.

I'm curious: Feeling as you do that income or wealth inequality is unfair, do you seek to correct that inequality by redirecting your own toward those who have less? Do you stop to help the homeless you encounter along the way, or is feeling guilty and mumbling "it's not fair" good enough? In my experience, those who advocate redistribution generally mean other people's income or wealth, not their own. Is that you, Artem?

 
At 11/25/2011 3:37 PM, Blogger Ron H. said...

"how would you actually find this out 100 years later when many blacks cannot even trace their own family trees back that far?"

If you were actually interested, which we know you're not, you would look at the actual study referenced.


"Families were fairly routinely broken up in that time and now days..."

And how do you know that? Through
some study of your own, personal observation, or something you have read?

"...how many black people do you know that say... my great great (or) great grandparents did thus and so."

It's called scholarship. People who study historical public records can do that, as Gutman has done FOR you.

"do I doubt Gutman's work.. yes."

If you wrote that after reading the book, or at least taking a good look at its sources, your doubt might be credible.

 
At 11/25/2011 3:51 PM, Blogger Ron H. said...

"It is also not fair to the people that are just a little bit worse or less lucky than Neil. They get nada."

What nonsense. Individuals pay to hear Niel Young music because they enjoy it more than their next best choice, the opportunity cost. If consumers don't choose to spend on someone else's music, how is it unfair?

More importantly, the question you won't answer, how would you have it different? Would you prefer that all musicians be awarded some portion of a common fund for music, with no regard for consumers' personal choice?

 
At 11/25/2011 4:27 PM, Blogger Itchy said...

I'm curious: Feeling as you do that income or wealth inequality is unfair, do you seek to correct that inequality by redirecting your own toward those who have less? Do you stop to help the homeless you encounter along the way, or is feeling guilty and mumbling "it's not fair" good enough? In my experience, those who advocate redistribution generally mean other people's income or wealth, not their own. Is that you, Artem?

Haha. I have made to offer to many friends who profess that "unfairly" gotten wealth should be forcibly taken and redistributed to those who need it more. No takers ... Ever

 
At 11/25/2011 4:55 PM, Blogger VangelV said...

how would you actually find this out 100 years later when many blacks cannot even trace their own family trees back that far?

We know because Gutman used readily available data. The data included diaries, census data, family records, bills of sale and other local records. Try reading the book if you want to know what the data tells us. Ignore the data and yours becomes a faith based position that cannot be defended.

Who decided that? And what is a homeless orphan child to do?

If a child is not competent than the economic transactions should be carried out by the guardians of the child.

How so, if it is part of a contract openly entered into?

Is there a written contract that says that violence will be used in lieu of payment? Does it define the level of violence? Why would anyone do that when such a contract makes him vulnerable to prosecution?

Marriage wasn't legal, and couples often changed during their lifetimes, just as they do now. Not only were large numbers of couples separated by slave sales, but the biological father was frequently the slaveowner.

You consistently ignored all the other pressures on families, including the pace of modern life, the drug war, etc. You simply didn't make your case, and refused to consider the possibility of other factors being involved.


Your statements are not supported by the data. Not only was marriage legal it was a very strong institution among blacks. Read the book or provide data to counter Gutman's conclusions. Your faith based arguments are very thin.

 
At 11/25/2011 4:56 PM, Blogger Ron H. said...

Z: "Actually, in that thread, you consistently conflated correlation with causation, and ignored the multitude of factors influencing family structure and stability. "

Heh! An accusation of conflating corelation with causation is funny, coming from someone who believes AGW is a serious problem.

"Marriage was illegal."

We can't imagine what justification the state can have for being involved in any way in what must be one of the most important personal choices a person can make, then and now.

 
At 11/25/2011 4:57 PM, Blogger VangelV said...

I posted my comment in the wrong thread, but VangeIV, do you have a source on this claim:

Not true. The top 10% of income earners pay far more of the total income tax than they did 30 years ago. The bottom 50% pays almost nothing.


Yes. The data comes from the US government. I have provided links before but can't get them now because I am taking the kids swimming. I will provide them to you when I get back.

 
At 11/25/2011 5:41 PM, Blogger Ron H. said...

Itchy: "Haha. I have made to offer to many friends who profess that "unfairly" gotten wealth should be forcibly taken and redistributed to those who need it more. No takers ... Ever"

I believe it.

Shortly after the 2008 election, when "spread the wealth" was a common topic of discussion, I had an opportunity to expose such hypocricy.

The waiter who had served our table stated his belief that "spreading the wealth" was a great idea, at which point I told him I was glad he felt that way, as, in the spirit of spreading the wealth, I had already given what would have been his tip, to the homeless person in the parking lot.

I wish I had a picture of the look on his face at that moment.

 
At 11/25/2011 5:42 PM, Blogger Artem Boytsov said...

VangelV,

I read your comments, and it is clear to me that you're not trying to understand what I'm saying. When you speak about corporatism vs. capitalism it's like you're talking to yourself. I never argued against capitalism or corporatism for that matter - I never even brought up this point. You really need to learn how to listen.

I asked you to give me your definition of fairness and you refused saying that it's impossible to scientifically define. And yet, you're using this word yourself arguing that capitalism is very fair. It's dishonest. Although I agree that it is impossible to scientifically define, I would still ask you to explain what you mean by "fair".

This is what you had to say about the whole complicated and huge concept of fairness:

"I would argue that the outcome of a voluntary transaction in the absence of fraud is fair."

This is not a response to my question. It's not a definition of fairness. Here's what it looks like from my side:

1) You: "Y, which is a product of X, is fair!"
2) Me: "No problem, please define fair"
3) You: "I would argue X is fair!"

Logic doesn't work like that. If you claim X is fair, could you please define fair without back-references to X? You're an engineer, so you should understand the problem with this approach.

So, please, explain to me, what is your understanding of "fair as moral". If you choose to define morality as ability to engage in voluntarily transactions, I will quickly find a lot of counter-examples to your point which may be perfectly legal in your ideal world, but still quite disgusting and appalling to everyone but sociopaths. So again, could you please give me your definition of "fair as moral".

Artem.

 
At 11/25/2011 5:45 PM, Blogger Zachriel said...

VangelV: Not only was marriage legal it was a very strong institution among blacks.

You keep insisting that you know something of the subject.

"Slave marriages had neither legal standing nor protection from the abuses and restrictions imposed on them by slaveowners. Slave husbands and wives, without legal recourse, could be separated or sold at their master's will. Couples who resided on different plantations were allowed to visit only with the consent of their owners."

http://www.archives.gov/publications/prologue/2005/spring/freedman-marriage-recs.html

Ron H: Heh! An accusation of conflating corelation with causation is funny, coming from someone who believes AGW is a serious problem.

Climate science is based on the study of mechanisms, not just correlations.

 
At 11/25/2011 5:54 PM, Blogger Zachriel said...

Zachriel: Who decided that?

VangelV: If a child is not competent than the economic transactions should be carried out by the guardians of the child.

Who decided that?

Zachriel: Is there a written contract that says that violence will be used in lieu of payment? Does it define the level of violence? Why would anyone do that when such a contract makes him vulnerable to prosecution?

Um, because they are desperate.

The words expressly are 'a pound of flesh:'
Take then thy bond, take thou thy pound of flesh;

 
At 11/25/2011 5:59 PM, Blogger Artem Boytsov said...

When you use the 'emotion' card it is all about being FOOLED. A robust society needs to rely on reason, not emotion because emotion easily gets out of hand.

Of course. But that doesn't mean people stop experiencing these emotions or the concept of fairness somehow magically disappears.

I don't take issue with you because you're saying we shouldn't follow those emotions. I take issue with you because you're saying those emotions are "wrong", and in fact, it's all perfectly fair.

I mean, you're funny, in a way. On one hand, you agreed and said yourself countless times that "life isn't fair". On another hand, whenever it comes to manifestations of this unfairness in terms of compensation, you claim that it's all perfectly fair.

So, which is it? Are you using two different definitions of fairness here?

Employees take much more PERSONAL risk than investors, and compensated much less in case of success.

No they don't. I take an engineering job and get paid. If I lose my job because I am not capable of doing it or the company goes out of business I go to work elsewhere. There is no other loss. If I used my own capital and invested in that company I lose all of that capital as bankruptcy wipes me out and the senior debt holders take over the assets.


Yes, they do. Small, private investors like yourself that decided to use all their savings to open a business take a much greater risk than employees. Big, diversified investors such as VCs take much less risk than employees.

Imagine you have $100 million.

How did I get this $100 million? That certainly matters.


It does not matter unless you're willing to argue that the initial risk that you or your grand-grand-parents took to accumulate the capital justifies the life of riskless enjoyment for yourself.

Sometimes people just get lucky, like joining Microsoft at a very competitive salary and still ending up with a million dollars. I understand there's nothing illegal about it, but justifications from moral view as to why this engineer "deserves" to be a millionaire and that one doesn't are simply laughable.

Because I earned the $100 million or had it given to me by someone who earned it. In a free and rational society it is my $100 million to do with as I please.

Of course. Just don't try to tell everyone you deserved it, like the article in question does.

You, as a master rationalizer, say - it's fair because I'm compensated for risk I'm taking by investing my $100 million.

No. My argument is simpler than that. It is my money. I can choose to invest it as I please.


Yes, but it has nothing to do with the question at hand. The article tries to justify it from moral standpoint - they all deserved it. You're evading this question here.

Artem.

 
At 11/25/2011 6:04 PM, Blogger Mark J. Perry said...

The words "fair" and "fairness" are two of the most dangerous words in the English language, for the following reasons:

1. People using those words (e.g. "fair trade," "fair wages," "fair distribution of wealth/income") almost always follow with some proposal for government intervention, government regulation, or government force of some kind to correct some perceived "unfairness" and impose their subjective notion of "fairness."

And to paraphrase Thomas Sowell:

2. In most cases, it is hopeless to try to have a rational discussion with those who use the words "fair" and "fairness."

3. "Fair" and "fairness" are two words that can mean virtually anything to anybody.

 
At 11/25/2011 6:17 PM, Blogger Artem Boytsov said...

There's nothing immoral about voluntarily transactions IN GENERAL (there are exceptions), but it is not the point.

But it is the point.


No, it is not. Immoral outcomes are not necessarily such through immoral actions. You have a bleeding person in your room who can't move and begging to dial 911. But you want to finish your breakfast and you have no legal obligations to this person. He dies. You're moral. Everything is voluntary.

There is nothing immoral about this and there are no exceptions unless you want to bring up the issue of fraud.

There's a lot of exceptions to this, but you will only be able to understand them when you switch your framework of legality to a framework of morality. Imagine I'm the only one with a cure for a pandemic decease spreading the planet. For one reason or another, 10 years passes before someone else finds a cure. For one reason or another, I am a very irrational individual, and I like to watch people die and suffer rather than to maximize my profits. Also, I laugh at them while they're at it and enjoy the show. So I let 2 billion people die. I value the entertainment value more than I value the money (because I'm already rich).

According to your sense of morality, I am perfectly moral. I act voluntarily, they act voluntarily, I might be irrational, maybe a little crazy, but still perfectly moral. You wouldn't mind your kids to become such individuals - my morality from your standards is high because I didn't coerce anybody to do anything.

According to my standards, I should be hanged. I would be devastated to find out my children would turn out something like that. I would call such person extremely immoral. And his actions, too.

The point is that we are social animals. Our core limbic sense of morality includes sense of justice and helping other people.

First of all, let us dispense with jargon like, 'core limbic sense of morality,' because it is not necessary to muddy the waters.


Let's not.

And nobody on my side of the argument will say that people should not help other people.

No, you're not saying that. You're saying it's perfectly moral not to.

The point is about justice. Is it moral to steal from some people so that you can transfer what is stolen to others?

It depends. Under normal circumstances, most of the time, no.

Is it moral to have bureaucrats whose livelihood depends on the process to determine how much is required and what needs to be funded out of the stolen funds?

It depends. Under normal circumstances, most of the time, no.

Artem.

 
At 11/25/2011 6:23 PM, Blogger Artem Boytsov said...

You may not have, but the article in question which I criticized seeks to put a moral justification on the unequal distribution of wealth. It does the job very poorly as I explained over and over again.

I have pointed out that there is a big problem with corporatism. You just did not read my responses carefully enough to figure out what my criticism means.

You disagree with my views, I get that, but am still to hear one single argument from you against my main point.

You have heard many arguments. You are anti-market as most lefties. But the problem is not the market but the crony capitalism that robs consumers, workers, investors, and savers by transferring wealth from them to special interest groups that are protected and rewarded by the power that government wields.

The solution is to remove from government the power that allows the theft that is taking place. But the typical member of the left cannot bring itself to admit that government is responsible because it loves big government. Like the typical conservative, the leftie somehow believes that if the right people get to make the decisions about how society should be run things will be good and just. But the problem is not the people in charge but the structure of corruption that is inherent in the system. We have already seen that Obama is not very different from Bush. We have seen how both bailed out the Wall Street gamblers and how both filled their cabinets with the usual suspects from the usual companies and usual clubs. There is no difference between the two parties because both are for sale and are more interested in power than in justice.

I think that it is time that you woke up and began to look at the reality around you. When I was in school I held views just like the ones that you hold now. But once I was exposed to literature that my teachers and professors conveniently ignored it was easy to abandon the dark side and see things in a clear and logical manner. If you are smart enough and curious you will also find your way to the light side and will reject the statists on the right and left. But you have to be willing to be objective and open to logical rather than emotional arguments. So far you have not shown that you are willing to abandon the emotional arguments and embrace reason. And without that you will not understand the arguments being provided against your position because you will read into them something that the authors did not intend. As I said above, if you think that I agree with the right wing arguments than you have no clue what I am actually saying.


What the funk are you even talking about? I mean, really, you're something else... I've just pointed out the moral hypocrisy of the article, in everything else, I pretty much agree with you.

"Lefties" seem to really scare you if you're prepared to see one in everybody who has ANYTHING critical to say about ANYTHING that comes out of your mouth.

 
At 11/25/2011 6:33 PM, Blogger Artem Boytsov said...

I know. That's why I never claimed we should get rid of the capitalist society.

You are doing something just as bad. You are arguing that we should get rid of the free market.


Ha-ha-ha. =)
Poor scared little thing.
No, I am not claiming that. Long live the free market!!! I love the free market!!! (you feeling better now?)

I'm just asking you to stop justifying it from MORAL point of view.

Although I do think societies can mitigate this negative effect (power law distribution) to some extend, but PLEASE, PLEASE, let's not get into that, because it is so not the point of my argument.

Here is your problem again. It is not a 'negative effect'.
...................
a rant about commies skipped
..................


Please, relax. Don't feel threatened. I'm with you.

It is, of course, a negative effect, the question is, is it possible to mitigate it without hurting the efficiency of the system or bringing even more misery. If you think great income inequality BY ITSELF is a DESIRABLE feature of a society, you're clearly nuts.

Artem.

 
At 11/25/2011 6:38 PM, Blogger Artem Boytsov said...

Get over it. Stop trying to make it look fair.

I said that all voluntary transactions that take place in the absence of fraud are fair.


Yes, generally, they are.

End of story.

Unfortunately for you, the story continues. The outcomes of millions of such voluntary transactions can be grossly unfair.

You cannot refute that point so you move onto some general argument about fair outcomes in the aggregate.

Ha-ha-ha-ha! =)
I never even wanted to refute this point. I said to you from the very beginning that with rare exceptions, voluntary transactions are fair. I mean, what's not fair about them?

Artem.

 
At 11/25/2011 6:58 PM, Blogger Artem Boytsov said...

Making it fairer is very complicated, and certainly isn't a discussion I'm prepared to have with religious fanatics.

We live in the real world, not some utopian fantasy. Out here you can't satisfy your definition, whatever that may be, because there will always be some people who have a lot more than others.


Wait, did you just agree it is not fair but you think that making it fairer is impossible? If so, thank you, the argument is over, because you took my side.

made this point over and over and over and over again (probably 5 times already - go re-read my posts). The article to which we're all happily commenting is making a disgraceful attempt to justify unfair and unequal distribution of wealth from MORAL grounds, claiming that it IS, in fact, very much FAIR, because all of these mega-rich people deserved to be mega-rich (and, by extension of this logic, all of these poor and homeless people deserve to be poor and homeless). It does the job very poorly. Its logic is objectionable. This is a bad and hypocritical position to take. The article is hypocritical in other aspects as well - for example, it misrepresents public's discontent in the manner I already described before.

You are still missing the point. First, we do not have a free market system. .......
.. Congress .... ripped-off .... government .....


I love it how you can ask me what my point was, and then say that I am missing the point and start talking about a completely different thing, something that I never had in mind, something that I never even wanted to touch upon.

Once again for those who can get out of their own heads:

ALL I WAS SAYING was that it's dishonest to argue for the free market on the basis of how fair it is to people.

Instead of supporting the call for ending corporatism, you choose to talk about how unfair it is that some people earn a lot more than others even if they obtained their earnings by engaging in voluntary transactions with satisfied consumers.

It wasn't me who chose to talk about it. This is the silent truth. It is the article that chose to bring people attention to the supposed fact that it is, very much, fair. Not that the free market has its excesses but they may be impossible to remove. Not that the life is fundamentally unfair and the free market is just a manifestation of that. No. The article took a position that it is, very much, fair and people get what they deserve.

No it isn't. The free market needs to be defended because it is entirely moral.

Nothing is entirely moral. I thought you'd know that. Some moral dilemmas are unsolvable. If we built a system to minimize pain and suffering in the short run, it would definitely not be capitalism. But you could still argue that capitalism minimizes pain and suffering in the long run, and I would tend to agree with that. It doesn't make it entirely moral, of course, and it doesn't mean that everybody gets what they deserve as the article seem to claim.

Trying to argue that voluntary transactions are immoral or evil is a slippery slope and there is no need to go that way.

Voluntary transactions are evil?.. Who are you arguing with? Definitely not me.

Let me set you straight about one thing. My arguments (and Ron's) are based on logic.

Really? Then stop using the word "fair". Or at least give me a logical definition. Or at least give me any definition.

It is you who use words that you cannot define.

How ironic. :)

It is you who imagine that we can turn the real world into a utopia where human nature will not be permitted to show itself.

Who are you arguing with, again? Do you have a person in real life that holds all these ridiculous views? Hey. I'm not him.

Artem.

 
At 11/25/2011 7:13 PM, Blogger Artem Boytsov said...

No it isn't. What is immoral about voluntary transactions in which both sides give up something that they value less and get something that they value more?

If you can't answer that point you have no case.


But of course I do. Because I'm not arguing that voluntary transactions are immoral, I'm arguing that there are a lot of immoral outcomes in the system.

Now I'll ask you a question, but I urge you to answer this question only, i.e. without thinking about where it leads. Be objective. It doesn't lead to anything. It doesn't threaten your reality.

Here's the question:

Do you think it is moral and right that a reasonably not lazy person willing to work and get training can still end up in inhumane poverty, struggling to feed himself and his children, due to no obvious and punishable negligence of his own, while others, sometimes due to no obvious virtues of their own, use more human labor in an hour than this person needs in a month to feed his family?

Wait!!! Think. Here's a trick: it doesn't lead anywhere, and I gave you no context. Please use all intellectual honesty that you have and give a direct answer to this question.

Of course, if you answer "No, it is immoral, but in the great perspective of things, it would cause less pain and suffering in the long run if we let him suffer (and possibly die) now. It's not that simple", it would be a position worthy of respect and we could have a reasonable debate in which I would probably tend to mostly agree with you.

But so far, you haven't presented yourself as a particularly deep thinker. The answer I expect from you is "Yes! It is perfectly moral! Life is not fair!".

Artem.

 
At 11/25/2011 7:18 PM, Blogger Artem Boytsov said...

It is not fair and can never be fair that a person can enjoy a million dollars while others don't have food on their tables, a shelter over their roofs or access to good medical care, especially if they are willing to work and get trained and contribute to the society.

Here we go. There is your religious position. As long as there are people who make bad decisions, are incompetent, lazy, or just unlucky nobody should be allowed to earn a lot of money. What kind of moronic statement is that?


Absolutely moronic statement. Thank god I never made it, phew... My statement was very different:

As long as people exert comparable efforts, one shouldn't starve while the other live luxuriously.

Now note that SHOULDN'T here is not from a practical standpoint, it's solely from a moral one. How to achieve it from a practical standpoint, I do not know. Socialism, as you know, failed spectacularly.

If we were to adopt such a position why would the marginal individual ever try to work? After all, if s/he were entitled to the earning of the productive individuals why even try? But if that were the case why would the productive work as hard as they do? If we adopt theft as the morality that dominates economic life why would the victims give more than the minimum?

Stop arguing with yourself.

Artem.

 
At 11/25/2011 7:32 PM, Blogger Artem Boytsov said...

My mommy taught me to talk to strangers with the amount of respect they deserve, based on the strength of their arguments on blogs.

Now I see where you're getting your moral compass from.

"I made this point over and over and over and over again (probably 5 times already - go re-read my posts)."

And you have been ignoring the responses.

If you want others to agree that life isn't fair, then you already have that.


I wish. You guys agree that life is not fair but as soon as it comes to compensation you claim that it is somehow now magically fair.

A more consistent position would be to admit life is not fair and compensation in free market societies reflect this unfairness and therefore although fundamentally unfair.

The compensation is "fair" in a sense that it follows life unfairness and probably doesn't add much more unfairness of its own (although one could argue that, but I will grant you that).

But it is still fundamentally unfair because it reflects life's fundamental unfairness.

Please accept that and I will leave you alone.

If you accept that, you will see my point. The article in question doesn't give you context, it doesn't say "life is unfair, compensation is also", it tries to persuade the reader that the compensation is FAIR, because people that do a lot of good are compensated accordingly.

Is it self interest you find abhorrent? Should people spend their resources on those less fortunate before spending on themselves?

It really has nothing to do with my point.

At the present moment, the claim is enough. Making it fairer is very complicated, and certainly isn't a discussion I'm prepared to have with religious fanatics.

In other words, you want to make an unsupported claim, refuse to provide any support, and expect others to agree with you. Good luck with that.


Um... I am taken aback by your logic.

You asked me: "You claim X, do you just want to claim X, or do you propose to do something about it?"
I responded: "I don't propose to do anything about it. I just claim X".

What, again, did you find wrong with this picture? One doesn't have to propose solutions to a problem in order to be able to identify a problem.

But you religious nuts following capitalism like a cult just don't want to hear me, do you?

Huh? People are listening if you have something to say beyond "it's not fair".


I said it over and over and over again.

Please stop brainwashing people into thinking it is fair. You can't really trick mother nature like that.

Life is not fair. Capitalism is not fair. Stop trying to make it look fair.

This is my point. Thoughts?

You would rather prefer to manipulate everyone into your point of view than have a reasonable conversation.

You first - start a reasonable conversation. "It's not fair" has already been covered.


As I said before, I wish.

I'm curious: Feeling as you do that income or wealth inequality is unfair, do you seek to correct that inequality by redirecting your own toward those who have less?

No. I don't seek to correct any inequality at the moment. Why did you think I did? I'm just not stupid enough to accept the article's argument that it's all perfectly fair. I just accept the facts and move on with my life.

Do you stop to help the homeless you encounter along the way, or is feeling guilty and mumbling "it's not fair" good enough?

Good enough.

In my experience, those who advocate redistribution generally mean other people's income or wealth, not their own.

I don't advocate redistribution of wealth.

Is that you, Artem?

Yes, it's me, baby.

 
At 11/25/2011 7:38 PM, Blogger Artem Boytsov said...

It is also not fair to the people that are just a little bit worse or less lucky than Neil. They get nada.

What nonsense. Individuals pay to hear Niel Young music because they enjoy it more than their next best choice, the opportunity cost. If consumers don't choose to spend on someone else's music, how is it unfair?


I didn't mean people who went to hear the concert. I mean other players who are just a bit worse than Niel, and didn't make the cut to popularity. They make x1,000 less money than him being worse, but definitely not that much.

As I said before, life is fundamentally unfair.

More importantly, the question you won't answer, how would you have it different?

I won't answer because I don't have an answer. I'm not arrogant enough to claim there is NO answer. The unfairness is obvious, what is not obvious is how to make it better, and if there is, indeed, a way to make it better. Socialism is obviously not such a way. It probably created much more unfairness and other moral dilemmas than it claimed to eliminate.

But your position is strikingly different. You say, it's fair, it's perfect, there's no way to make it better, we shouldn't even try, I mean, try to do what - it's already perfect!

This just aims to shut up any dialogue, which is what you, it seems like, would like very much. In a sense, it is like religion, it claims that we already know the "Truth", so there's no sense to continue looking for it.

Artem.

 
At 11/25/2011 7:41 PM, Blogger OBloodyHell said...

>>> The reason Gates is very wealthy is millions upon millions of people voluntarily reached into their pockets and handed over $300 or $400 for a Microsoft product.

Not an entirely honest example. Microsoft has gotten rich by having a defacto monopoly over a key central product in the usage of computers, and ruthlessly exercising that control to destroy its competitors, most notably Netscape, who thought the Rodney King approach would work.

The general principle is still true -- that's how Cisco got so powerful, for example... just not M$.

 
At 11/25/2011 7:53 PM, Blogger Artem Boytsov said...

Mark,

I agree. And yet, I cannot find a better word for what the article you quoted tried to achieve. If you could summarize the article's main points, what would it be?

Here's my version:

1) Economics is not a zero-sum game (nobody argues that).
2) Super-rich are super-rich because they're super-pleasing to other people's needs.

Leaving aside the factual correctness of claim #2 (it's at least somewhat arguable), most people will read it as "they deserved it" whether you like it or not. And it seems to me, actually, that the real message of this article is also "they deserved it".

So, basically, it is the article and and not me, who started the dialogue using the concept of "fairness" and "deserve".

If the article wasn't about that, what was it about?

Artem.

 
At 11/25/2011 8:15 PM, Blogger Larry G said...

" 3. "Fair" and "fairness" are two words that can mean virtually anything to anybody. "

one thing to add perspective here is to think about how a teacher in a 1st or 2nd grade deals with the issue of "fairness" and how it gets explained to kids.

Kids usually have an instinctive feel for "fair".. and many clear know what is not.

so it's not like it's a totally subjective concept.

I would also submit that when someone cuts in line ahead of you - you do clearly know what "fair" means.

:-)

 
At 11/25/2011 8:23 PM, Blogger Itchy said...

Not an entirely honest example. Microsoft has gotten rich by having a defacto monopoly over a key central product in the usage of computers, and ruthlessly exercising that control to destroy its competitors, most notably Netscape, who thought the Rodney King approach would work.

Do you remember using Netscape. It sucked. People complain about Windows all the. I certainly do, but it gets the job done. The products are easy to use (relatively) inexpensive, and other products have adopted the MS format and layout.

I'm not willing (yet) to spend 2x's as much on a laptop to get a Mac. MS won because they had a product that sold and "worked" for a lot of people.

 
At 11/25/2011 8:37 PM, Blogger Ron H. said...

Artem:
No, it is not. Immoral outcomes are not necessarily such through immoral actions. You have a bleeding person in your room who can't move and begging to dial 911. But you want to finish your breakfast and you have no legal obligations to this person. He dies. You're moral. Everything is voluntary.
"

You are confused. Rather than respond to the original subject of income or wealth inequality, you have moved into a discussion of ethics.

Do you understand the word "transaction"? VangelV's statement that a voluntary *transaction*, which is an exchange between two parties, is "fair", as they both end up with something they value more in exchange for something they value less. Assuming no fraud, and assuming competent parties, there is no way to apply terms like fair or unfair in any meaningful way.

All the parties mentioned in the Williams column - except Obama - got rich by providing something that made millions of people better off through voluntary transactions. Therefore, they "deserve" their wealth, as much as the counterparties "deserve" to be better off.

If Gates doesn't deserve his wealth, then no one deserves to benefit from the products he has provided.

Wealth is a measure of the value of one's contribution to the improved well being of others.

As has been pointed out, the terms "fair" and "unfair" are subjective, as is my belief that Rocky Road is is the best flavor of ice cream.

 
At 11/25/2011 8:52 PM, Blogger Artem Boytsov said...

No, it is not. Immoral outcomes are not necessarily such through immoral actions. You have a bleeding person in your room who can't move and begging to dial 911. But you want to finish your breakfast and you have no legal obligations to this person. He dies. You're moral. Everything is voluntary."

You are confused. Rather than respond to the original subject of income or wealth inequality, you have moved into a discussion of ethics.


I never moved into a discussion of ethics because it has always been a discussion of ethics. Always. From the very start. It is you who wants to make it an economic discussion and I have been trying to resist you every step of the way.

The article makes an _ethical_ point claiming that because these individuals did so much good for the society, they deserve to be so rich.

It's an ethical point. Do you understand?

You are wrong to dismiss ethics and morality so eagerly. It is exactly them that led to the October Revolution in Russia. It is very hard to debate capitalism from the pure economic efficiency point of view, but the main threat to capitalism comes from ethics and morality point of view. So, it is in our mutual interest to take it seriously. Articles like that do a disservice, in my opinion.

Do you understand the word "transaction"? VangelV's statement that a voluntary *transaction*, which is an exchange between two parties, is "fair", as they both end up with something they value more in exchange for something they value less. Assuming no fraud, and assuming competent parties, there is no way to apply terms like fair or unfair in any meaningful way.

If there's no way to apply these terms in any meaningful way, stop applying them. Stop claiming it's fair. Say it is what it is. Don't give it moral judgment. But you do, don't you?

VangelV repeated any such transaction is fair several times, moreover, he claimed capitalism is an absolutely moral system.

You see, it has always been a discussion of ethics.

All the parties mentioned in the Williams column - except Obama - got rich by providing something that made millions of people better off through voluntary transactions. Therefore, they "deserve" their wealth, as much as the counterparties "deserve" to be better off.

What do you mean exactly by this paragraphs? Do you mean they didn't break the law? Do you mean they played by the rules? Nobody argues that.

Or do you mean, they "deserve" it from moral and ethical standpoint? Sorry, now I am confused, who is trying to make it a discussion of ethics again? :)

Wealth is a measure of the value of one's contribution to the improved well being of others.

I'll grant you that. It is an imperfect measure, and there are a lot of exceptions, but in general, you are correct.

The hypothetical question is: even though I've improved the life of others who were starving, is it ethical for me to be luxurious while they are still starving though a bit less?

The answer to this question is no, but it doesn't mean we should redistribute wealth - it may create more ethical questions than it solves, but more importantly, it might make everyone worse off on average and increase, rather than decrease the amount of misery in the world.

As has been pointed out, the terms "fair" and "unfair" are subjective, as is my belief that Rocky Road is is the best flavor of ice cream.

They're not when you use them, right? ;)

Artem.

 
At 11/25/2011 10:08 PM, Blogger Ron H. said...

"What, again, did you find wrong with this picture? One doesn't have to propose solutions to a problem in order to be able to identify a problem."

You have presented your subjective view that something is a problem, Provided no arguments for it, and asked others who don't share that view to agree with it. What could be more reasonable?

"If you would just change your viewpoint to mine, you would understand my point."

You need to do better than that.

"It depends. Under normal circumstances, most of the time, no."

When is it moral to steal?

"Yes, but it has nothing to do with the question at hand. The article tries to justify it from moral standpoint - they all deserved it. You're evading this question here."

I don't know about evading, he may just be struggling to understand how anyone can try to construct arguments from the muddled thinking you employ.

"You disagree with my views, I get that, but am still to hear one single argument from you against my main point."

But you haven't made a point. You have expressed a view - an opinion if you will, then you ask others to agree with your opinion without providing any reasons to do so.

You have failed to account for the use people with great wealth make of that wealth. Unless it is merely stuffed into a mattress, in which case no one benefits, not even the owner, it is spent and invested in ways that benefit many others who have less.

"Logic doesn't work like that. "

You should be careful about schooling others on how logic works. LOL

"Not early as much to justify x1,000 difference in compensation from the morality standpoint. Not nearly as much. "

And what would be a fair difference in compensation? Who can decide? can you?

It is clear from your responses that you don't read well. You have failed to respond on topic to many comments, and your misreading of the Williams column is pathetic. Perhaps you could reread it, as well as some of the comments, and turn comprehension = on.

 
At 11/25/2011 10:43 PM, Blogger Artem Boytsov said...

What, again, did you find wrong with this picture? One doesn't have to propose solutions to a problem in order to be able to identify a problem.

You have presented your subjective view that something is a problem, Provided no arguments for it, and asked others who don't share that view to agree with it. What could be more reasonable?


Ron, my main argument is that capitalist distribution of wealth is not fair. You disagree with that, I get that, but in order for me to persuade you I am right (i.e. present supporting arguments) I have to know what your working definition of fairness is.

So far, nobody provided me one, but nevertheless you continue to claim that it IS fair. It seems to me that your working definition of fairness is "anything that doesn't break the law". If that is, indeed, your definition, I don't have an argument with you.

I claim it's not fair, you claim it's fair, in order to settle this, we have to agree what fair actually is without back-referencing to the status quo (i.e. everything that is, is fair).

So far it seems like it's you who has an extremely muddled thinking when it comes to ethical or moral issues. You can't even define what fair is.

In every day life, what kind of situations would make you feel about them as unfair? Immoral? Unethical?

Please answer, I provided you with countless examples, you so far provided me with none.

If you would just change your viewpoint to mine, you would understand my point.

You need to do better than that.


No, it is you who needs to do better than that.

It depends. Under normal circumstances, most of the time, no.

When is it moral to steal?


To save other people's lives, for example, when it doesn't jeopardize yet other people's lives.

For example, if it's winter outside and the only chance of survival is breaking and entering, it is moral.

But of course, you have to understand that it's not as simple (try that with your one-dimensional thinking!). A simple act of breaking and entering might be moral, but the consequences of a wide adopted policy that it is might be immoral (but not necessarily).

It's actually quite complicated. I wish I could have that level of dialogue with you instead of you repeating "Stealing's bad, m'kay?".

... continued in the following post

 
At 11/25/2011 10:44 PM, Blogger Artem Boytsov said...

... continuation

Yes, but it has nothing to do with the question at hand. The article tries to justify it from moral standpoint - they all deserved it. You're evading this question here.

I don't know about evading, he may just be struggling to understand how anyone can try to construct arguments from the muddled thinking you employ.


What is so hard to understand here? Is that because you brain doesn't differentiate between legal and ethical?

You accidentally touched a stranger (legal). In response, he shouted at you, called you names, swore at you, tried to humiliate you (legal). Question: is it ethical? (yes/no)

[Hint: no, but making swearing or shouting illegal would probably cause more problems than it would solve].

You and your classmates all work on different ideas in the same field. No idea is obviously better than the other. You're not the smartest and definitely not the hardest working person of the group. But your idea hits it big and theirs do not, and you're a millionaire while the others are struggling to pay their medical bills. Question: is it ethical? (yes/no)

[Hint: no, but "spreading this money around" will probably create more problems than it would solve]

You disagree with my views, I get that, but am still to hear one single argument from you against my main point.

But you haven't made a point. You have expressed a view - an opinion if you will, then you ask others to agree with your opinion without providing any reasons to do so.


No. Since others so obviously disagree with me, I ask others to provide me with their idea of fairness and morality. I was hoping that once you do that, it would be obvious to see the holes in your reasoning, but you've been stubbornly avoiding to give me any idea of what fairness/morality/ethics means to you other than that voluntarily transactions are fair. I actually think it's pretty funny. =)

... continued in the following post

 
At 11/25/2011 10:44 PM, Blogger Artem Boytsov said...

... continuation

You have failed to account for the use people with great wealth make of that wealth. Unless it is merely stuffed into a mattress, in which case no one benefits, not even the owner, it is spent and invested in ways that benefit many others who have less.

No, I understand that completely. Have I ever said _everything_ in capitalism is immoral? No. Such extreme thinking is actually your prerogative - claiming that everything in capitalism/free market is absolutely moral and ethical.

Logic doesn't work like that.

You should be careful about schooling others on how logic works. LOL


If you need schooling, schooling you get.

Not early as much to justify x1,000 difference in compensation from the morality standpoint. Not nearly as much.

And what would be a fair difference in compensation?


It's hard to say, but definitely much less.

Who can decide? can you?

That's the problem. Probably nobody can. This is why capitalism might as well be the only practical system that actually works. But it doesn't mean it's entirely moral and we should stop thinking about how to make it better.

It is clear from your responses that you don't read well.

Coming from you, it's actually funny.

You have failed to respond on topic to many comments,

Look, buddy. I respond on MY topic. If you decide to take the conversation to another topic, it's YOUR problem.

I said countless times that I:

a) don't think redistribution of wealth is necessary
b) don't think that capitalism is a bad system
c) don't think there's a viable alternative to capitalism

all of that was your fantasies.

But it's not enough for you. You want me to admit that capitalism is a perfectly moral system that has no ethical issues. Well, too bad for you. Bring it on. Show me what you got. Enlighten me what you mean by moral and ethical, and we'll take it from there, OK?

and your misreading of the Williams column is pathetic. Perhaps you could reread it, as well as some of the comments, and turn comprehension = on.

Well, if you just told me from the start that you agree with me that capitalism is not perfect in the ethics department, and I misunderstood what Williams was trying to achieve, we'd have a completely different conversation. But you chose to engage me on another terms, so come on. Your definition of fairness, please?

Artem.

 
At 11/25/2011 10:44 PM, Blogger VangelV said...

Could be true because all the income gains have gone into the pockets of the rich. So for instance if the top 10% used to make $100K and now they make $200K and their rate dropped by 25% while the bottom income earners stay at $30K the rich would pay a larger share of the taxes. When you reap all the income gains what do you expect? Are the poor that don't enjoy income gains supposed to pay more?

No. According to the IRS data for 2007, "the top-earning 25 percent of taxpayers (AGI over $62,068) earned 67.5 percent of nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86 percent). The top 1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income (as defined by AGI), yet paid 39.4 percent of all federal income taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns."

The financial collapse did reduce the income of the top 1% and also lowered the percentage of the total income tax that they paid. In 2009, the top 1 percent of tax returns paid 36.7 percent of all federal individual income taxes and earned 16.9 percent of adjusted gross income (AGI), compared to 2008 when those figures were 38.0 percent and 20.0 percent, respectively.

 
At 11/25/2011 10:49 PM, Blogger VangelV said...

The other point is that the income tax is the one progressive tax.

Yes it is. The income tax forces the productive class to carry a heavier burden than the tax eaters that are found in the lower 50% of income earners and pay almost nothing in taxes.

Other taxes are regressive, like excise taxes and Social Security taxes.

Regressive? SS is supposed to be similar to a pension scheme. Since payments are capped so are contributions. That is not regressive, particularly when you see that the higher income individuals have their payments clawed back in taxes.

So this is a standard misleading right wing claim focusing on only one tax and ignoring the overall tax picture.

Not at all. The right wing hates all taxes. (Except those that fund foreign wars of course.)

Taxes in the US overall are very mildly progressive when you include state and local taxes.

Not true. There is a huge class of tax eaters that votes to tax the 'rich' as much as possible. The problem is that the 'rich' can afford tax shelters and good tax lawyers so the major impact is on the middle class.

 
At 11/25/2011 11:00 PM, Blogger Artem Boytsov said...

Jon,

I have to side with VangelV on this one. I don't know where you live, but here in CA, taxes are actually quite visibly progressive. The effective tax rate on $45k earned income would be something like 15-18% (including all taxes), while the similar effective tax-rate on $200k income is 35-40%.

I'm not sure about this numbers, but feel free to do what I did long time ago - go to TurboTax online and play with their free version.

What makes it less progressive is Bush's tax cuts on long-term capital gains, but I don't think VangelV is in favor of that.

I personally think the best possible taxation scheme is progressive consumption tax and no income tax, but I'm not sure what kind of problems a practical implementation of such tax could yield.

Artem.

 
At 11/25/2011 11:08 PM, Blogger VangelV said...

Heh! An accusation of conflating corelation with causation is funny, coming from someone who believes AGW is a serious problem.

I was wondering how long until someone noticed that little problem for our friend.

 
At 11/26/2011 4:25 AM, Blogger Ron H. said...

"The article makes an _ethical_ point claiming that because these individuals did so much good for the society, they deserve to be so rich. "

And what do you find wrong with that?

Here's your problem. You think you are making an ethical argument, but you're making an economic argument. If society deserves to have all the benefit provided by someone's good idea, then that person deserves to have the financial reward society has decided that idea is worth, based on the amount those beneficiaries have paid for it. This is fair, it is moral, and it is deserved.

You are just quibbling about the price. You think someone should provide some level of benefit for a lot less money, but customers, in the market, have determined the price. You aren't competent to set that price, as you have admitted, nor is anyone else.

If you want to suggest definitions for "fair" or "moral" or "deserved", then let's hear them. this is your issue, make it clear what your point is.

"You and your classmates all work on different ideas in the same field. No idea is obviously better than the other. You're not the smartest and definitely not the hardest working person of the group. But your idea hits it big and theirs do not, and you're a millionaire while the others are struggling to pay their medical bills. Question: is it ethical? (yes/no)"

Yes, it's ethical. What's not ethical about it? Unless you believe your judgment is superior to that of actual customers, then my idea is obviously better than the others, as it has "hit it big". It is superior by $1 million. "Hitting it big" means customers have voted for my idea with their dollars.

"Please answer, I provided you with countless examples, you so far provided me with none."

But you haven't *defined* fairness. Isn't that what you're asking for?

 
At 11/26/2011 4:41 AM, Blogger Ron H. said...

you: "Not early as much to justify x1,000 difference in compensation from the morality standpoint. Not nearly as much."

me: "And what would be a fair difference in compensation?"

you: "It's hard to say, but definitely much less."

me: "Who can decide? can you?"

"That's the problem. Probably nobody can."

Then how can you say x1000 is too much unless you know what the number should be? Maybe it's not enough. The market has determined that x1000 is correct, but you know better. You're sure its definitely much less. All those customers paid too much for the benefit they got.

Get a clue. It's impossible to discuss your opinion. Find a position that you can support with logic or evidence.

 
At 11/26/2011 9:56 AM, Blogger VangelV said...

I read your comments, and it is clear to me that you're not trying to understand what I'm saying. When you speak about corporatism vs. capitalism it's like you're talking to yourself. I never argued against capitalism or corporatism for that matter - I never even brought up this point. You really need to learn how to listen.

I have read what you have written. Perhaps you don't understand what your own words mean. You are a statist who is anti-market. That is clear. The fact that you don't understand that the problem is not free market capitalism but corporatism is also clear. The fact that you use terms that you cannot define objectively is also clear. Time to do some self examination my friend.

I asked you to give me your definition of fairness and you refused saying that it's impossible to scientifically define. And yet, you're using this word yourself arguing that capitalism is very fair. It's dishonest. Although I agree that it is impossible to scientifically define, I would still ask you to explain what you mean by "fair".

Not exactly. I said that there is no scientific or objective definition of fairness. If you think I am wrong please provide such a definition and we will discuss it. I also said that I the outcome of a voluntary transaction in the absence of fraud would be considered fair by almost everyone who uses the term because when both sides give up what they value less and get what they value more it is hard to criticize the transaction.

But I note that you keep using the word 'fair' without defining it. Don't you think that voluntary transactions are fair? And if you don't think that people should engage in voluntary transactions why is it 'fair' to interfere with them? And who would interfere with them 'fairly?'

You see your problem? Or is your faith based approach too invested to reconsider its flawed assumptions?

This is what you had to say about the whole complicated and huge concept of fairness:

"I would argue that the outcome of a voluntary transaction in the absence of fraud is fair."

This is not a response to my question. It's not a definition of fairness. Here's what it looks like from my side:

1) You: "Y, which is a product of X, is fair!"
2) Me: "No problem, please define fair"
3) You: "I would argue X is fair!"

Logic doesn't work like that. If you claim X is fair, could you please define fair without back-references to X? You're an engineer, so you should understand the problem with this approach.


You are trying to provide an objective definition for something that is very subjective and has no scientific definition. Note that I have no such problem. I actually understand that value is subjective and have an easy way to define what is fair when it comes to voluntary economic transactions. My argument is clear, just like my thinking. Yours is muddled, just like your thinking.

 
At 11/26/2011 10:01 AM, Blogger VangelV said...

So, please, explain to me, what is your understanding of "fair as moral". If you choose to define morality as ability to engage in voluntarily transactions, I will quickly find a lot of counter-examples to your point which may be perfectly legal in your ideal world, but still quite disgusting and appalling to everyone but sociopaths. So again, could you please give me your definition of "fair as moral".

Feel free to come up with the counterexamples. That is exactly what I want from you.

My argument is very simple and has been provided on this site by Ron and others before. Roughly what we have is the following.

1. People act
2. During any action people choose between various options
3. Those options are ranked by the individuals
4. In a transactions both sides choose to act because they prefer that act to their other options
5. As long as there was no force or fraud involved the transaction is moral and fair.

While not perfect, the points above should be sufficient for our purposes. It's your turn.

 
At 11/26/2011 10:11 AM, Blogger VangelV said...

You keep insisting that you know something of the subject.

No. I insist that the data shows what it shows. Most slave owners encouraged marriage because they believed that married slaves were less likely to run away and abandon their families.

The fact that a white church or that a judge did not sign an official marriage certificate did not mean that marriage was invalid. That is what your reference is about. It deals with how to make slave marriages considered legal in white society.

Try reading more carefully because your reference recognized that slaves were married but that the issue was official recognition.

"Scattered among the aging volumes and paper files of the Freedmen's Bureau at the National Archives in Washington, D.C., are an impressive number of marriage licenses, certificates, registers, and reports documenting the federal government's efforts to aid in the legalization of marriages of former slave couples."

Why are the slave marriage customs considered illegitimate by people like you? Are all marriage customs that you do not understand illegal?

 
At 11/26/2011 10:16 AM, Blogger VangelV said...

Climate science is based on the study of mechanisms, not just correlations.

There is no empirical evidence dumdum. The only thing used to support the claims are models that rely on correlation of 'adjusted' data. In fact, the latest e-mails released showed that the 'climate scientists' had serious problems with many of the papers that they were supporting and could not even figure out how to calculate the temperature anomaly properly or how to deal with persistence and autocorrelation issues.

Climate science is mainly about politics and political goals. And the nice research grants and consulting fees that were 'earned' by the conspirators.

 
At 11/26/2011 10:17 AM, Blogger VangelV said...

Who decided that?

Common law. Try learning something before you comment.

Um, because they are desperate.

No dumdum. Why would the other party create such a contract when it leads straight to jail?

 
At 11/26/2011 11:02 AM, Blogger Zachriel said...

Artem Boytsov: Ron, my main argument is that capitalist distribution of wealth is not fair.

Ron H: Get a clue. It's impossible to discuss your opinion.

Sure it's possible to discuss an opinion. In this case, it would make sense to finds some common ground on the nature of fairness. While a perfect definition probably doesn't exist, one might look at cases to see where that common ground might be found.

Artem Boytsov: It is also not fair to the people that are just a little bit worse or less lucky than Neil. They get nada.

Ron H: What nonsense. Individuals pay to hear Niel Young music because they enjoy it more than their next best choice, the opportunity cost. If consumers don't choose to spend on someone else's music, how is it unfair?

A lot of the great black musicians were forced into cellars or the chitlin' circuit.

 
At 11/26/2011 11:23 AM, Blogger Zachriel said...

VangelV: I actually understand that value is subjective and have an easy way to define what is fair when it comes to voluntary economic transactions.

Should parents be able to sell their children into sexual slavery (at least until the children reach the age of maturity). In any case, you might try some non-economic examples. There is far more to life than money.

VangelV: As long as there was no force or fraud involved the transaction is moral and fair.

So, from the example above, it's moral and fair to leave someone to die while you finish your meal.

VangelV: Most slave owners encouraged marriage because they believed that married slaves were less likely to run away and abandon their families.

Many did. Many did not. And slaves had their own cultural adaptations which included marriage.

VangelV: The fact that a white church or that a judge did not sign an official marriage certificate did not mean that marriage was invalid.

That's not what you said, though.

VangelV: Not only was marriage legal ...

That is simply untrue. Slave marriages existing outside the law.

"to aid in the legalization of marriages of former slave couples."

Yes, former slaves.

VangelV: Why are the slave marriage customs considered illegitimate by people like you?

There was no legal protection for slave marriages. You were simply wrong on this point.

VangelV: There is no empirical evidence dumdum.

Not only do the vast majority of climatologists disagree, but virtually every climatology journal includes new empirical evidence supporting anthropogenic climate change.

VangelV: Common law.

So you think you can force others to live by your "common law?" You and what army?

VangelV: Why would the other party create such a contract when it leads straight to jail?

Why would that lead straight to jail? Is that because democratic governments have decided that you can't use a pound of flesh as collateral? What right do they have to enter into private contracts?

 
At 11/26/2011 11:26 AM, Blogger Zachriel said...

VangelV: Eventually, the effects of luck have a tendency to cancel out for the prudent individual who is aware of the risks posed by that volatility.

I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.

 
At 11/26/2011 2:09 PM, Blogger Ron H. said...

Z: "Sure it's possible to discuss an opinion. In this case, it would make sense to finds some common ground on the nature of fairness. While a perfect definition probably doesn't exist, one might look at cases to see where that common ground might be found. "

The opinion has been discussed ad nauseam, and there doesn't appear to be any common ground in this case.

"A lot of the great black musicians were forced into cellars or the chitlin' circuit."

While that's certainly true, we doubt that any of Neil Young's contemporaries have that problem.

 
At 11/26/2011 2:28 PM, Blogger Zachriel said...

A lot of the great black musicians were forced into cellars or the chitlin' circuit.

Ron H: While that's certainly true, we doubt that any of Neil Young's contemporaries have that problem.

Turns out that some of the people who made great contributions to modern music benefited very little, but later musicians capitalized on their efforts. That seems to indicate that the market system did not properly value their contributions.

 
At 11/26/2011 2:54 PM, Blogger Ron H. said...

"Turns out that some of the people who made great contributions to modern music benefited very little, but later musicians capitalized on their efforts. That seems to indicate that the market system did not properly value their contributions."

Correct once again, but the market didn't force anyone into cellars or the chitlin' circuit.

Those great products were withheld from the market for many years, often until after the musicians were long gone.

 
At 11/26/2011 4:42 PM, Blogger juandos said...

larry g says: "how would you actually find this out 100 years later when many blacks cannot even trace their own family trees back that far?"...

Consider the following larry g so as to give you an idea and or pointers how some of the stats were generated...

SLAVERY for Historical Statistics of the United States Millennial Edition

 
At 11/26/2011 4:50 PM, Blogger Larry G said...

I appreciate the link Juandos.. not sure your exact point.

just for the record here.. I pretty much agree with respect to what the problems are with modern black families that lack a dad and a Mom who is still a teenager.... including the influence of "free" care for the kid.."free" food and shelter...

how we got to this point.. is in question... as welfare assistance is not confined to only black people...so to be convinced.. I'd have to see a similar set of welfare-influence outcomes for non-black recipients of welfare.

 
At 11/26/2011 4:58 PM, Blogger Artem Boytsov said...

VangelV and Ron,

I like the way how you continue to weasel your way out of defining fairness but yet continuing to insist that the capitalist distribution of wealth IS fair.

I have no problem defining fairness as I did in one of my earlier posts but you chose to ignore it. You guys are dangerous demagogues.

Here's the definition of fairness that would satisfy most people with a good moral sense (sociopaths exists, I know):

"Fair is when reward is proportional to [good faith] effort".

This is our internal, emotional, if you wish, definition of fairness that we follow in every day life.

Note that this is just a definition, MY definition, nothing else. It does not imply anything. It does not lead to anything. Please don't be scared. It is an ideal that cannot be fully accomplished. I told you countless times that the world itself is unfair, and there's probably no way to make it fairer, I'm not advocating that. It is not the point of the argument.

The point of the argument is that capitalist distribution of wealth is not fair. I provided you with a definition. Please admit that according to my definition, it is, indeed, not fair.

Now, since you people continue to maintain that it IS fair, I would like to hear your definition of fair, or apologies.

After you give me your definition of fair, I would be delighted to judge the level of your hypocrisy by trying to apply it to your everyday life.

Artem.

 
At 11/26/2011 5:13 PM, Blogger Artem Boytsov said...

"The article makes an _ethical_ point claiming that because these individuals did so much good for the society, they deserve to be so rich. "

And what do you find wrong with that?


I can't tell you until I know what fairness/morality/ethics mean to YOU. If you claim that everything voluntary is necessarily moral, nothing is wrong with that. So, please. I asked you. A lot of times.

Here's your problem. You think you are making an ethical argument, but you're making an economic argument.

No.

If society deserves to have all the benefit provided by someone's good idea, then that person deserves to have the financial reward society has decided that idea is worth, based on the amount those beneficiaries have paid for it. This is fair, it is moral, and it is deserved.

No. Based on your logic, patents should never expire. The world benefitted and is continuing to benefit the idea of electricity so much that everything else pales in comparison. Based on your logic, a handful of people descendants of those who were involved in developing this idea, should control almost most of the wealth on the planet, and that would be fair to everyone.

You are just quibbling about the price.

In a sense, yes.

You think someone should provide some level of benefit for a lot less money, but customers, in the market, have determined the price. You aren't competent to set that price, as you have admitted, nor is anyone else.

Correct. I cannot set the price, but I can see the excesses.

If you want to suggest definitions for "fair" or "moral" or "deserved", then let's hear them. this is your issue, make it clear what your point is.

I did. YOU didn't.

"You and your classmates all work on different ideas in the same field. No idea is obviously better than the other. You're not the smartest and definitely not the hardest working person of the group. But your idea hits it big and theirs do not, and you're a millionaire while the others are struggling to pay their medical bills. Question: is it ethical? (yes/no)"

Yes, it's ethical. What's not ethical about it?


The probability your idea will be successful is low. We NEED hundreds of people working on different ideas in order for us to have just a few of fruitful ones. Yet we compensate only the ones that worked. Luck has a lot to do about it. All of those "unlucky" people are just as essential to the process as the "lucky" one. This is why it's unethical.

Please answer, I provided you with countless examples, you so far provided me with none.

I did. YOU didn't.

Artem.

 
At 11/26/2011 5:17 PM, Blogger Artem Boytsov said...

me: Who can decide? can you?

That's the problem. Probably nobody can.

Then how can you say x1000 is too much unless you know what the number should be?


Whether it's too much or too little from the economic or system efficiency standpoint I do not know. Whether the system would work better or worse if it was x10,000 I do not know. All I'm claiming is that it's too much from the ethical standpoint.

Artem.

 
At 11/26/2011 5:28 PM, Blogger Artem Boytsov said...

I have read what you have written. Perhaps you don't understand what your own words mean. You are a statist who is anti-market. That is clear.

I'm pro-market. I just don't have that cool rationalization module that you seem to have installed in your brain that would allow me to claim it's perfectly moral and ethical.

I asked you to give me your definition of fairness and you refused saying that it's impossible to scientifically define. And yet, you're using this word yourself arguing that capitalism is very fair. It's dishonest. Although I agree that it is impossible to scientifically define, I would still ask you to explain what you mean by "fair".

Not exactly. I said that there is no scientific or objective definition of fairness.


Then take back your claim that free market is perfectly moral and fair, and I won't have a problem with you.

If you think I am wrong please provide such a definition and we will discuss it.

No. We're not going to discuss it.
You will admit that the free market is not fair according to MY definition or debate it.
Then you will give me YOUR definition and I will admit that according to YOUR definition the free market is fair or debate it.

When this is established, the argument is mostly over.

But your definition of fairness will tell me a lot about you, and I would be curious to see if you apply it in real life or you reserve it specifically for discussions of free market capitalism. You can also analyze mine, if you wish. But since, as you say, everyone can hold a different definition and it's not objective, it has nothing to do with the argument.

I also said that I the outcome of a voluntary transaction in the absence of fraud would be considered fair by almost everyone who uses the term because when both sides give up what they value less and get what they value more it is hard to criticize the transaction.

That's why I think you talk to yourself too much. Did I ever debate that?

But I note that you keep using the word 'fair' without defining it.

No. I defined it. But I asked YOU to define it, and so far, nothing came out of you.

Don't you think that voluntary transactions are fair?

You asked me this question already, a demagogue, you. I already told you that for the most part, with rare exceptions, yes.

And if you don't think that people should engage in voluntary transactions why is it 'fair' to interfere with them? And who would interfere with them 'fairly?'

As I said earlier a lot of times, I don't have a practical solution to this problem. Besides, we cannot discuss a solution to this problem before you ADMIT there's a problem. Otherwise we'll have no dialogue. Let's first establish there's a problem, then we can discuss possible solutions of which there might be none.

You see your problem?

No.

You are trying to provide an objective definition for something that is very subjective and has no scientific definition. Note that I have no such problem.

Oh yes, you do. Wasn't that you who told me that free-market capitalism is entirely moral? Please tell me what you mean by moral or refrain from saying such things ever again.

I actually understand that value is subjective and have an easy way to define what is fair when it comes to voluntary economic transactions.

What do you mean by fair in the above statement? Could you please define it?

My argument is clear, just like my thinking.

You're using the words you refuse to define. How could it possible be clear?

Artem.

 
At 11/26/2011 5:41 PM, Blogger Artem Boytsov said...

So, please, explain to me, what is your understanding of "fair as moral". If you choose to define morality as ability to engage in voluntarily transactions, I will quickly find a lot of counter-examples to your point which may be perfectly legal in your ideal world, but still quite disgusting and appalling to everyone but sociopaths. So again, could you please give me your definition of "fair as moral".

Feel free to come up with the counterexamples. That is exactly what I want from you.


I certainly will, once you give me your definition of "fair as moral".

My argument is very simple and has been provided on this site by Ron and others before. Roughly what we have is the following.

1. People act
2. During any action people choose between various options
3. Those options are ranked by the individuals
4. In a transactions both sides choose to act because they prefer that act to their other options
5. As long as there was no force or fraud involved the transaction is moral and fair.

While not perfect, the points above should be sufficient for our purposes. It's your turn.


1) You really have a problem with logic here. When I ask you to define what a square is, you don't point me to some figure and say - this is a square.

You gave me one single example of a thing that would be moral and fair to you (a non-coerced transaction). This is not a definition, unless you want to re-arrange the words a little bit and say something like "Moral is any result of non-coerced, violent-free activity". I could work with that.

2) There are exceptions to your EXAMPLE as well (you didn't provide a definition, just one example). For instance, if I'm dying of dehydration and you owe the only available (unlimited) source of water, it would be immoral for you to sign a contract with me that I owe you $10 million for a cup. But please don't address it before you address 1).

Artem.

 
At 11/26/2011 6:40 PM, Blogger Itchy said...

"Fair is when reward is proportional to [good faith] effort".

By that definition I should have been paid better as an under the table landscaper in my teens than I am as an engeinner.

Effort? So students should be graded on how much time they spend studying?

You definition of fairness is unfair.

This post has been an argument about the subjective definition of fairness since Wednesday.

There are two versions of "The Ants and Grasshopper": the original from Aesop and the modified by Disney. My guess is that different people will find one version fair and the other version unfair. I for one will be reading the original version to my daughter. I think the moral of that one is "you don't have to be nice to or share with assholes"

 
At 11/26/2011 7:21 PM, Blogger Artem Boytsov said...

Itchy,

"Fair is when reward is proportional to [good faith] effort".

By that definition I should have been paid better as an under the table landscaper in my teens than I am as an engeinner.


Speaking purely theoretically, without taking into account what such thing would do to a society, the answer is yes. Society needs landscapers and carpenters and janitors, too. Unless you claim becoming an engineer took so much more effort, the answer is yes.

I am an engineer. I would not want to do physical labor for the same amount of money. I would ask a significant premium if I was offered to take on a hard physical labor job voluntarily. Why? Because I know being an engineer is (generally) easier - it might be more beneficial for society, and it might bring more value, but it is easier.

You have to separate fair and desirable or economically viable. I never claimed that it's desirable for the world to be fair. Sometimes being fair in the short run will bring more unfairness in the long run, I never claimed it was as simple as the other side of the argument does.

Effort? So students should be graded on how much time they spend studying?

Grades are different, but I would certainly argue that the students should be _fed_ based on how much effort they put into studying, and not based on the results of their exams.

Would you feed your children differently based on how well they do at school? What if one of your children was mentally not as well developed?

You definition of fairness is unfair.

Very well might be, but at least I am not hypocritical, I try to apply this definition in real life, and capitalism is certainly not fair by MY definition.

Now let's hear the other side's definition and how they adhere by it in real life.

This post has been an argument about the subjective definition of fairness since Wednesday.

No, this post was about whether capitalism is fair or not fair, and in order to decide that, we have to agree on what fair is, or at least what the difference is between the versions the sides are using.

The other side is yet to present its definition, but I think it will be outcome-based instead of effort-based. It's OK, but it's unfeasible to adhere to that definition in real life, in family life, or even deciding compensation amongst your workers if you own a business.

Artem.

 
At 11/26/2011 7:29 PM, Blogger Ron H. said...

"SLAVERY for Historical Statistics of the United States Millennial
Edition"

Thanks for the link, juandos, great source of information.

 
At 11/26/2011 7:50 PM, Blogger VangelV said...

Of course. But that doesn't mean people stop experiencing these emotions or the concept of fairness somehow magically disappears.

I don't take issue with you because you're saying we shouldn't follow those emotions. I take issue with you because you're saying those emotions are "wrong", and in fact, it's all perfectly fair.


I never said that emotions are 'wrong.' I said that they are what they are. And that they do not belong in an argument where logic is required. You lefties let your faith based ideology get in the way all the time. As I said, the argument against corporatism is sound and very logical. Yet, you blow the opportunity to advance it by arguing against the 'unfairness' of free-market. The evidence shows that the crony-capitalist imitation of the free-market is the cause of the current disaster yet you idiots attack the solution.

I mean, you're funny, in a way. On one hand, you agreed and said yourself countless times that "life isn't fair". On another hand, whenever it comes to manifestations of this unfairness in terms of compensation, you claim that it's all perfectly fair.

I said that the real world, where most of us live, is more volatile than the naive utopians imagine. Here random events are something that us normal human beings have to live and deal with. We get our share of good luck or bad luck. Many would consider that unfair. But that does not mean that our actions have to be 'unfair,' in the way that even the diehards mean.

So, which is it? Are you using two different definitions of fairness here?

No. I think that voluntary transactions produce results that are fair because both sides got what they wanted more and gave up what they wanted less. That does not mean that the passage of time will not reward one side of the transaction more than the other.

 
At 11/26/2011 7:50 PM, Blogger VangelV said...

Yes, they do. Small, private investors like yourself that decided to use all their savings to open a business take a much greater risk than employees. Big, diversified investors such as VCs take much less risk than employees.

No. They risk losing their entire amount. And during lousy periods of economic growth VCs can wind up losing more than half the entire capital in the fund. As I wrote above, the 'safe' portfolio you gave as an example would have lost more than 50% in purchasing power over the past decade.

It does not matter unless you're willing to argue that the initial risk that you or your grand-grand-parents took to accumulate the capital justifies the life of riskless enjoyment for yourself.

First, most people who have $100 million earned it themselves. They did not get it from their grandparents. Second, if you earn money it is yours to do with as you wish, not the governments or some busybody looking to redefine the word 'fair' by justifying theft.

Sometimes people just get lucky, like joining Microsoft at a very competitive salary and still ending up with a million dollars. I understand there's nothing illegal about it, but justifications from moral view as to why this engineer "deserves" to be a millionaire and that one doesn't are simply laughable.

Of course you 'deserve' what you earned. If you choose to work for a start-up at below market rates and took shares or options as part of your compensation you deserve to be rewarded for the risk taken. If the company fails you have to settle for the lower pay that you got. My thirteen year old wants to finish school early so that he can find work at next to no money for a start-up that would help him learn valuable skills but would let him make a lot of money if it succeeds. He expects the competition for low paying jobs to be small because most people want the money now instead of the possible profit in the future. Should he be denied possible gains because other people want more money and won't take the same risks?

Of course. Just don't try to tell everyone you deserved it, like the article in question does.

Of course I deserve it. If I earned the $100 million I clearly deserve it. And if someone who earned it decided that he wanted me to have it I also deserve it.

Yes, but it has nothing to do with the question at hand. The article tries to justify it from moral standpoint - they all deserved it. You're evading this question here.

If you earn your money in voluntary transactions it is moral. End of story.

 
At 11/26/2011 8:09 PM, Blogger Artem Boytsov said...

I don't take issue with you because you're saying we shouldn't follow those emotions. I take issue with you because you're saying those emotions are "wrong", and in fact, it's all perfectly fair.

I never said that emotions are 'wrong.' I said that they are what they are. And that they do not belong in an argument where logic is required.


Did you, or did you not, claim that the free-market capitalism is perfectly fair, moral and ethical? Do you need me to quote you saying that? Isn't that an emotional statement? If not, what exactly did you mean by the words "fair", "moral", "ethical"? Can you define them for me please?


... a rant about corporatism skipped ...


Dude, I don't care about your corporatism vs. capitalism war. Like, at all.

I mean, you're funny, in a way. On one hand, you agreed and said yourself countless times that "life isn't fair". On another hand, whenever it comes to manifestations of this unfairness in terms of compensation, you claim that it's all perfectly fair.

I said that the real world, where most of us live, is more volatile than the naive utopians imagine.


Did you, or did you not, say that the life is unfair? Do you want me to quote you on that?
Did you, or did you not, say that capitalist distribution of wealth is far? Do you want me to quote you on that?

If the answer to both questions is yes, how do you reconcile these two statements? I see only three possibilities, please, correct me if I'm wrong:

a) capitalist distribution of wealth somehow compensates the world's underlying unfairness and makes it all fair
b) life is unfair precisely because it doesn't follow the ideal free-market sufficiently. if it was, it would have been fair.
c) you're operating two different definitions of "fair" here

I think it's c) but I can't make you admit it. I think when you say life is unfair, you mean "fair" as in common sense, everyday emotional way. But when you say capitalist distribution of wealth is fair, you mean "fair" as in "reflects the underlying phenomenon without distortion".

Do you see the problem here?

So, which is it? Are you using two different definitions of fairness here?

No. I think that voluntary transactions produce results that are fair because both sides got what they wanted more and gave up what they wanted less.


If this activity always leads to a fair outcome, how come you agree that life is not fair? Are you claiming here that the only unfairness in life comes from deviating from this ideal?

Artem.

 
At 11/26/2011 8:12 PM, Blogger VangelV said...

What the funk are you even talking about? I mean, really, you're something else... I've just pointed out the moral hypocrisy of the article, in everything else, I pretty much agree with you.

And I pointed out that you are wrong. Like a typical idiot lefty you argue against the free market when the problem is corporatism.

"Lefties" seem to really scare you if you're prepared to see one in everybody who has ANYTHING critical to say about ANYTHING that comes out of your mouth.

Lefties are idiots who are not nearly as smart as they pretend to be. They are hypocrites who do not see reality as it is and are simply motivated by a desire to get even with those that they blame for their inadequacy. (I love the way that they argue against hierarchy even as they create strata within the parks that they occupy. Jon Stewart's take on that was very perceptive.)

The real problem are the National Socialists, who are smarter than you idiots and far more focused and disciplined. That is why I get so pissed off with the lefties for wasting opportunities and good arguments by choosing ones that are illogical and plain stupid.

 
At 11/26/2011 8:15 PM, Blogger VangelV said...

I'm just asking you to stop justifying it from MORAL point of view.

What is immoral about voluntary transactions? Give me examples please. The last time you provided examples where no action was ever taken.

V: I said that all voluntary transactions that take place in the absence of fraud are fair.

A: Yes, generally, they are.


So why exactly are you trying to claim that they are not 'fair.'

 
At 11/26/2011 8:27 PM, Blogger Artem Boytsov said...

No. They risk losing their entire amount. And during lousy periods of economic growth VCs can wind up losing more than half the entire capital in the fund. As I wrote above, the 'safe' portfolio you gave as an example would have lost more than 50% in purchasing power over the past decade.

Sure, but they still take much less PERSONAL risk. If Bill Gates loses 50% of his capital, it doesn't affect his lifestyle, nutrition, medical access or pretty much anything else other than his mood.

I already told you (you chose to ignore, as usual), that I'm not talking about economic risk, I'm talking about personal risk.

First, most people who have $100 million earned it themselves. They did not get it from their grandparents. Second, if you earn money it is yours to do with as you wish, not the governments or some busybody looking to redefine the word 'fair' by justifying theft.

You would do better if you tried to understand what the other side is actually saying, not where it supposedly "leads".

Sometimes people just get lucky, like joining Microsoft at a very competitive salary and still ending up with a million dollars. I understand there's nothing illegal about it, but justifications from moral view as to why this engineer "deserves" to be a millionaire and that one doesn't are simply laughable.

Of course you 'deserve' what you earned.


Define deserve. This time, you first.

If you choose to work for a start-up at below market rates...

No, really, you would do SO MUCH better if you actually read and think.

I wrote: "like joining Microsoft at a very competitive salary and still ending up with a million dollars."

Where did you find "below market rates"? I know a lot of wealthy engineers from Google and Facebook, none of us took a job at a below market rate. In fact, it was often the opposite. A job at an above market rate + stock options + virtually zero risk of company's failure. Interview process can be quite random. Some people who joined later on a similar, or even worse salary, didn't get much, although some of them contributed to the company much more. None of this makes any sense from ethical point of view. But this is life.

Just for one moment, stop trying to find a moral justification to everything that happens in real life.

Should he be denied possible gains because other people want more money and won't take the same risks?

How many times do I have to tell you that I'm not advocating any changes and I don't have a practical solutions to the moral dilemmas I'm pointing out? This is the 12th time. Are you really so thick to keep asking me those questions?

We're arguing because you're intellectually incapable to admit that such moral dilemmas actually exist, not because you disagree with my ways of fixing them of which I have none.

Of course. Just don't try to tell everyone you deserved it, like the article in question does.

Of course I deserve it. If I earned the $100 million I clearly deserve it.


Define deserve. Before you take your chance to prolong and muddle the argument, I'll tell you - this time, you go first.

Artem.

 
At 11/26/2011 8:27 PM, Blogger Artem Boytsov said...

Yes, but it has nothing to do with the question at hand. The article tries to justify it from moral standpoint - they all deserved it. You're evading this question here.

If you earn your money in voluntary transactions it is moral. End of story.


Great. Thank you. I can work with that.

Now read back to one of my earlier posts (which you conveniently ignored) about a person who earns his money in voluntary transactions by refusing to sell his cure to the decease. (Please, really, go and read it, I don't want to fully re-tell the story here). Tell me if it is moral.

How about if I make my money by agreeing to save a life (call 911) or a dying person only if he gives me his house and some more in future debt? The transaction is completely voluntary, so this is completely moral, right?

Artem.

 
At 11/26/2011 8:31 PM, Blogger Artem Boytsov said...

V: I said that all voluntary transactions that take place in the absence of fraud are fair.

A: Yes, generally, they are.

So why exactly are you trying to claim that they are not 'fair.'


But I never did. I mean, sorry, I did, in your imagination fueled on fear. This is what I actually said (quoted from above):

"The outcomes of millions of such voluntary transactions can be grossly unfair."

Also, I already pointed out several exceptions as how even a single voluntarily transaction can be unfair.

But this is all pointless unless you're willing to provide me with your working definition of "fair".

Please.

Artem.

 
At 11/26/2011 8:34 PM, Blogger VangelV said...

Unfortunately for you, the story continues. The outcomes of millions of such voluntary transactions can be grossly unfair.

All we can deal with are the individual voluntary transactions. And they are fair.

The outcome argument has nothing to do with the fact that voluntary transactions provide what all sides prefer more while they give up what they prefer less. I think that it should be obvious to everyone that time can cause many people to have second thoughts about transactions and can create a much bigger benefit for one person than another. But the final outcome is generally the result of better judgment and different time preferences.

You know that there is a broad distribution of time preferences in human society. That causes some people to value the immediate while others to value future outcomes. It is hardly 'moral' to force people to have the same time preference at all points in their lives. And since most people are aware that those that are less impulsive and plan about the long term tend to be more successful the outcome depends on personal discipline and ability. What could be more 'fair.'

 
At 11/26/2011 8:39 PM, Blogger VangelV said...

Wait, did you just agree it is not fair but you think that making it fairer is impossible? If so, thank you, the argument is over, because you took my side.

No. I said that some people have more than others. There is nothing 'unfair' about that. And I am still waiting for your definition of 'fair.'

ALL I WAS SAYING was that it's dishonest to argue for the free market on the basis of how fair it is to people.

I know that is what you are saying. And I said that you have no idea what you are talking about because the free market is nothing more than millions of voluntary transactions, which you admitted were 'fair' and 'moral.'

The article took a position that it is, very much, fair and people get what they deserve.

Of course we get what we deserve. People that can provide to consumers what they want at a price that is acceptable to them deserve everything that they get. Why isn't that 'fair.'

 
At 11/26/2011 8:40 PM, Blogger Artem Boytsov said...

I'm just asking you to stop justifying it from MORAL point of view.

What is immoral about voluntary transactions? Give me examples please. The last time you provided examples where no action was ever taken.


OK, you're dying, I enjoy the show. I'm a bit twisted like that. I value the entertainment value more than the $100 in your pocket you offered me in order for me to call 911. Or maybe I don't value it at all, but I know that you will offer ANYTHING for a chance to be alive. Nobody is around us. I am your only chance. So I make you give me your house and $10 million dollars in future debt. I know I'm playing it rough, because you might die and I would end up with nothing, but I keep my poker face and I make that bet. Yoo-hoo! - you agree. Yes, you will be my financial slave for the rest of your life. You chose that.

Is it moral? Would you like one of your children to take my side of the trade and then brag to you about it? What would you say to them? Good girl, way to go?

Artem.

 
At 11/26/2011 8:44 PM, Blogger Artem Boytsov said...

Unfortunately for you, the story continues. The outcomes of millions of such voluntary transactions can be grossly unfair.

All we can deal with are the individual voluntary transactions. And they are fair.


I'm not sure where this comes from - I mean why are you so convinced nobody can deal with anything on a higher level than voluntary transactions?

The outcome argument has nothing to do with the fact that voluntary transactions provide what all sides prefer more while they give up what they prefer less.

Exactly. I'm not sure why you keep dragging the voluntary transactions into this discussion. The discussion is clearly not about them.

You know that there is a broad distribution of time preferences in human society. That causes some people to value the immediate while others to value future outcomes. It is hardly 'moral' to force people to have the same time preference at all points in their lives.

Nobody wants to force anybody to do anything.

And since most people are aware that those that are less impulsive and plan about the long term tend to be more successful the outcome depends on personal discipline and ability. What could be more 'fair.'

Unless you give me your definition of "fair", I'm not sure how to answer this question.

Artem.

 
At 11/26/2011 8:54 PM, Blogger VangelV said...

Nothing is entirely moral. I thought you'd know that. Some moral dilemmas are unsolvable.

You are talking about subjective morality. But I think that we can avoid that issue because the free market is about voluntary transactions. If no fraud is involved both sides get what they want. Why is that not considered 'moral,' no matter what your personal view of morality happens to be?

Now I have no problem with you arguing that when people act and everyone gets what they wanted is not moral but if you do you better be able to explain it logically. But if you do think that is the case, I would suggest that your beliefs tell us more about you than about society.

And in case I have not been clear let me rephrase something that I have written many times before. Libertarians believe that natural rights and liberty are moral principles. These are fully compatible with the free market but not with markets in which governments intervene between parties in a transaction.

If we built a system to minimize pain and suffering in the short run, it would definitely not be capitalism.

I disagree. It would be free market capitalism because it is the only system that embraces individual liberty and natural rights.

Voluntary transactions are evil?.. Who are you arguing with? Definitely not me.

You just argued that the free market, which is just the aggregate of voluntary transactions is not moral. Didn't you?

Really? Then stop using the word "fair". Or at least give me a logical definition. Or at least give me any definition.

I did give you the definition that I use when talking about market outcomes. I have said that in a voluntary transaction the outcome is 'fair' because both sides gave up what they valued less to get what they valued more.

 
At 11/26/2011 8:56 PM, Blogger Artem Boytsov said...

Wait, did you just agree it is not fair but you think that making it fairer is impossible? If so, thank you, the argument is over, because you took my side.

No. I said that some people have more than others. There is nothing 'unfair' about that. And I am still waiting for your definition of 'fair.'


Wait, what? Are you blind? I just gave you my definition of "fairness", in fact, I repeated it because I gave it before!!! It is you who avoids saying anything on the matter, but yet continues to use the word all the time.

ALL I WAS SAYING was that it's dishonest to argue for the free market on the basis of how fair it is to people.

I know that is what you are saying. And I said that you have no idea what you are talking about because the free market is nothing more than millions of voluntary transactions, which you admitted were 'fair' and 'moral.'


You are right, in a sense. Unless you know anything about dialectics and the law of passage of quantitative changes into qualitative changes.

If you knew, you would understand that you can't really make an argument that if the part has a certain quality, the system comprised of these parts will also have a certain quality.

In other words, one drop of water is not torture. Individuals are smart, but a mob is very stupid. Etc, etc, etc.

Most of voluntary transactions are fair and moral, but the combinations of those can produce very unfair and immoral effects.

I will show it to you as soon as you give me your definition of fairness.

The article took a position that it is, very much, fair and people get what they deserve.

Of course we get what we deserve.


Um... I didn't expect that level of idiocy from you.
Sorry to break it to you, pal, but people do not always get what they deserve.
Unless, of course, you define "deserve" as "what you get", but that would be too silly of you, wouldn't it?

Could you please define "deserve" for me, pretty please?

Could you please stop ignoring the questions I'm asking you, please?

Artem.

 
At 11/26/2011 8:56 PM, Blogger Ron H. said...

"Fair is when reward is proportional to [good faith] effort."

Good start. As you pointed out, it's a completely personal and subjective. As such, it's is not sufficient, by itself, to determine the morality of outcomes in the real world, as the judgments of others, equally valid, can and do differ from yours.

Perhaps an example would help. As you seem fond of the letters X and Y, I'll use those.

Person X opens a business which he calls "Carrot Juice R Us" which specializes in freshly made carrot juice.

X works feverishly making juice 12 hrs/day, and selling it at his juice counter, and makes barely enough to pay the rent and put food on the table.

Y, on the other hand, opens a business called "Y's Pub" at which she works 5 hrs/day pouring beer, without ever breaking a sweat, and is making money hand over fist.

By your definition of proportional [good faith] effort, this isn't fair.

Let's try another:

X and Y are classmates at "Tickle Me Ivories Piano Academy". both are decent players, but X appears to be the more talented of the two, and although Y practices 8 hrs/day, and X practices only one, time after time the judges at competitions award X the prize. This isn't fair, according to you.

Do you see the problem with your definition?

By the way, I like VangelV's definition as regards transactions, that starts with:

1. People act.
...

In case there's any question, I will add that the people involved are competent.

If you agree that that defines a moral and fair transaction, I will expand on it. Otherwise, you may skip the rest of this comment and go directly to the comment form to explain why you disagree.

If that single action is fair, and both actors benefit, then is it not fair after that transaction is repeated 1 million times, so that 1 million people have some benefit they value more than what they exchanged, while the single actor on the other side of the transaction has 1 million of whatever was exchanged?

If not, please explain why not.

You have said that it's unfair for someone to have $1 million whan there are hungry and homeless people, but you haven't explained why.

I don't see how your [good faith] effort definition can be applied here.

As I read it, the Williams column describes people and companies that have accumulated millions of somethings in multiple transactions that left millions of customers better off, in their own judgment. Everybody has won. I don't see what you can claim is not fair about it.

 
At 11/26/2011 9:02 PM, Blogger VangelV said...

Because I'm not arguing that voluntary transactions are immoral, I'm arguing that there are a lot of immoral outcomes in the system.

So what you are saying is that voluntary transactions are moral but when you aggregate them the outcome is immoral? How can that be? Is this an original sin thing? If it is please explain because I never could understand how some of you faith based people tried to reason.

Do you think it is moral and right that a reasonably not lazy person willing to work and get training can still end up in inhumane poverty, struggling to feed himself and his children, due to no obvious and punishable negligence of his own, while others, sometimes due to no obvious virtues of their own, use more human labor in an hour than this person needs in a month to feed his family?

I think that a person should be free to trade his labour for money. If he cannot get enough to support his family then the person does not have the skills necessary to meet his goals and needs to work hard to acquire other marketable skills. I think that the 'people earn a lot of money that they do not deserve' argument is a largely a myth unless you have a government job where there are no standards and no competition. I think that good people can fall on hard times but that if they are rational they would anticipate and be prepared for misfortune that comes their way. If they do not it is mostly their fault, not fate. And yes, in the long run we all get what we deserve because our lives are the sum of the choices that we have made. And that is entirely fair.

 
At 11/26/2011 9:03 PM, Blogger Artem Boytsov said...

Really? Then stop using the word "fair". Or at least give me a logical definition. Or at least give me any definition.

I did give you the definition that I use when talking about market outcomes. I have said that in a voluntary transaction the outcome is 'fair' because both sides gave up what they valued less to get what they valued more.


Do you know a definition of the word "definition"? :)

You gave me an example to what you think is fair. I agree with this example. It's not a definition though.

Could you please try to define what would constitute a "fair situation"? I'll give you some examples of what would make a viable definition (don't worry I'm not going to nitpick too much):

"Every situation arrived at without violence or coercion is fair."

or

"The situation is fair when all people involved get exactly the same amount of value."

or

"Every situation is fair as long as nobody breaks the law."

You know, something along these lines. Something that would allow me to talk about something else than a single example that you provided.

Artem.

 
At 11/26/2011 9:15 PM, Blogger Artem Boytsov said...

Because I'm not arguing that voluntary transactions are immoral, I'm arguing that there are a lot of immoral outcomes in the system.

So what you are saying is that voluntary transactions are moral but when you aggregate them the outcome is immoral?


Yes.

How can that be?

Ha-ha-ha-ha-ha. =)
I mean, I really laughed hard at this one. =)

Easy. Examples abound. Quantitative changes grow into qualitative changes.

Is this an original sin thing? If it is please explain because I never could understand how some of you faith based people tried to reason.

No problem. Have you heard of the man named Hegel?

http://en.wikipedia.org/wiki/Dialectic

Do you know the expression "death by papercuts"? Why can it possibly be if one papercut cannot be deadly? Why? Why? Oh why??

I think that a person should be free to trade his labour for money. If he cannot get enough to support his family then the person does not have the skills necessary to meet his goals and needs to work hard to acquire other marketable skills.

That's cool. I agree. What is he going to eat while he's working hard to acquire other marketable skills? Would you accept the situation when his children are starved to death because he simply didn't have enough time to do it? If not, why not? If yes, do you think it's moral? Or would you claim such situations JUST. CAN'T. HAPPEN.

I think that good people can fall on hard times but that if they are rational they would anticipate and be prepared for misfortune that comes their way.

What if they didn't? Should they die?
What if they did but they had a series of misfortunes in a row? Do they "deserve" to die? Or starve? Or be homeless?

If they do not it is mostly their fault, not fate.

"mostly" is a good word. What if, in this particular example, it is fate? Is it still moral and fair and ethical in your book?

And yes, in the long run we all get what we deserve because our lives are the sum of the choices that we have made. And that is entirely fair.

A lot of outcomes of life is determined by luck, not choices. I think you should have known that by your age. I would be careful to use the word "deserve" if I were you.

What does the word "deserve" mean to you?

Artem.

 
At 11/26/2011 9:19 PM, Blogger VangelV said...

As long as people exert comparable efforts, one shouldn't starve while the other live luxuriously.

OK. Here is my example. I spend 10,000 hours painting a landscape. Nobody wants to buy it and I am forced to depend on charity. Picasso does a two minute sketch that sells for $15K and gets to take two high priced call girls for a night of 'fun.' Is the outcome fair?

If you say no then you think that value is objective and depends on effort. As such people should be forced to buy the products of people that may not have the capacity to make the type of things that interest them at a price that is dependent on the effort put in.

Does that type of argument make any sense to anyone but Marxists who think that value comes from the labour put into the production process?

Why should Tom Brady get paid so much more than Rusty Smith? It isn't as if Tom works that much harder than Rusty. Their efforts are comparable so why does Rusty make $405K while Tom makes more than 25 times as much? Would it be better for NFL fans if Tom made just a bit more than Rusty? Or if journeymen players made about twice to three times less than stars? Why?

Now note that SHOULDN'T here is not from a practical standpoint, it's solely from a moral one. How to achieve it from a practical standpoint, I do not know. Socialism, as you know, failed spectacularly.

It is moral to get paid what you are worth. That is exactly why Brady makes so much more than Smith. What you are worth does not depend on your personality, character, or amount of labour you put in. It only depends on what others are willing to pay you. That is where your entire thesis falls apart. Just like trying to find an objective definition of the word fair you assume that value is objective. But while that may be true in your fantasy world construction it is not true here in the real world.

 
At 11/26/2011 9:22 PM, Blogger VangelV said...

I didn't mean people who went to hear the concert. I mean other players who are just a bit worse than Niel, and didn't make the cut to popularity. They make x1,000 less money than him being worse, but definitely not that much.

What is 'unfair' about the fact that Neil can get more people to give him money willingly? And what is unfair about those same people only willing to give others that they do not find as interesting 1000 times less? In both cases the transactions were voluntary. How is forcing people to pay more for inferior artists or cutting the pay of great artists moral?

 
At 11/26/2011 9:24 PM, Blogger Artem Boytsov said...

Nothing is entirely moral. I thought you'd know that. Some moral dilemmas are unsolvable.

You are talking about subjective morality.


Yes.

But I think that we can avoid that issue because the free market is about voluntary transactions.

I don't agree with you here. We can't avoid the issue because it's at the heart of the question, and a sum of moral actions CAN be immoral one as well as vice-versa.

If no fraud is involved both sides get what they want. Why is that not considered 'moral,' no matter what your personal view of morality happens to be?


It is moral. Generally, it is moral.

And in case I have not been clear let me rephrase something that I have written many times before. Libertarians believe that natural rights and liberty are moral principles. These are fully compatible with the free market but not with markets in which governments intervene between parties in a transaction.

I agree. They are moral, out of context. I want you to see how complicated it is. Your right to freedom is moral, but your right to freedom not to save my life when it costs you one call to 911 is NOT MORAL. It's not black and white.

If we built a system to minimize pain and suffering in the short run, it would definitely not be capitalism.

I disagree. It would be free market capitalism because it is the only system that embraces individual liberty and natural rights.


I respect your disagreement, but since we're talking about the short run, not the long run, I would argue that pain and suffering produced by starvation, homelessness, inadequate medical care etc. would far outweigh the pain and suffering of rich people taxed at 80% or of middle class not being able to exercise some of its freedoms. Now, where it leads to (your favorite question), we all know - socialism, that will produce even more pain and suffering in the long run.

Voluntary transactions are evil?.. Who are you arguing with? Definitely not me.

You just argued that the free market, which is just the aggregate of voluntary transactions is not moral. Didn't you?


Yes. The free market is not entirely moral, it has a lot of excesses. It can be result of entirely moral little transactions.

Artem.

 
At 11/26/2011 9:25 PM, Blogger Ron H. said...

"No. Based on your logic, patents should never expire. The world benefitted and is continuing to benefit the idea of electricity so much that everything else pales in comparison. Based on your logic, a handful of people descendants of those who were involved in developing this idea, should control almost most of the wealth on the planet, and that would be fair to everyone."

You continue to read poorly. Patents have nothing to do with it, and I don't favor patents. Please reread my comment with comprehension = on.

When society, in the form of individual consumers buys a product or service, they are voting with their dollars. When a better or cheaper product or service appears, they change their votes, but the original idea deserves all the votes it has accumulated.

Electricity has been known since ancient times. There have been thousands if not millions of people who have contributed to our beneficial use of electricity. You need a better example.

No, sliced bread doesn't work well either. But in any case, I see patent protection as unwarranted government interferrence in the market. It's the prime example of crony capitalism.

 

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