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"It does not help much to take wealth in terms of equity paper money away from people who know how to invest it efficiently and distribute it." This assumes wh

"It does not help much to take wealth in terms of equity paper money away from people who know how to invest it efficiently and distribute it." This assumes what needs to be proven. Namely, the degree to which the wealth of billionaries under the status quo regulatory, financial, and tax regime reflects their outsized contributions to welfare. If we make a number of assumptions (e.g. perfect information, perfect competition, equal initial endowments, etc.) it's tautologically true that great wealth would reflect outsized contribution to preference satisfaction. But these assumptions are wildly unrealistic, and conflict with both everyday experience and historical reflection. More to the point, we all want our economic system to do more than merely satisfy preferences. Opioid manufacturers cultivated and satisfied preferences to the tune of billions of dollars. The impacts on well-being of users and their communities were, to put it lightly, mixed.

yayr 5y ago
agreed. However, what alternatives to preference satisfaction do we have to steer an economy? Is the issue here not the miseducation and misculturization of harmful preferences?
simonh 5y ago
>This assumes what needs to be proven. I think it has been, dramatically, over the last 120 years. Plenty of countries have tried radical appropriation and redistribution, and it failed spectacularly every time. Meanwhile a prominent Marxist country, China, turned to capitalism and within a generation has raised hundreds of millions of people out of poverty and into urban middle class lives. Meanwhile Cuba, Venezuela and North Korea. Of course Capitalism has failure modes, because people are imperfect. All the flaws levelled at Capitalism are also found in spades in alternate economic systems because they are flaws in us. That's where accountability through liberal democracy and a decent system of laws come in. Yes that's always a work in progress and no it's not perfect, but it does work.
- pwinnski 5y ago
  This is a radical oversimplification of what has happened and is happening in China, conflating several things into one. China is still very much a communist country, and the raising of many people out of poverty is in large part a result of the government distributing the gains that have come from "special economic zones" into rural areas on a scale that would make a "tax on billionaires" seem like a quaint half-step. Allowing people to own and control private enterprises is a big step for China, but the gains from those private enterprises are still very much under the control of the Chinese government.
  - simonh 5y ago
    The vast majority of the cash flowing into rural areas is actually remittances from sons and daughters that went to work in the special economic zones, or the main urban centres to mainly work for private enterprises. Anyway the hundreds of millions of people I'm taking about are the urban middle class. Their wealth almost entirely flows from the capitalist sector, in fact the majority of the wealth in the state sector comes from the capitalist sector one way or another. Source, my wife is Chinese and we have extensive family connections over there. China is a single party state with a command economy, but is in no way shape or form Communist or even Marxist. It's social security system is barely existant; it's public health care is radically fee based to a degree that even makes the US system look socialist; many tens of millions of urban residents get zero public support or even schooling for their children because their families come from the countryside.
- hellisothers 5y ago
  It’s not like the only alternative is Communism, seems like several Northern European countries are redistributive and don’t have 5 Year Everybody Must Die plans. Also I take the OP’s comments more as an indictment against trickle down economics which has been proven to not to have the claimed impact https://en.wikipedia.org/wiki/Trickle-down_economics https://en.wikipedia.org/wiki/Trickle-down_economics
- throw0101a 5y ago
  > I think it has been, dramatically, over the last 120 years. Plenty of countries have tried radical appropriation and redistribution, and it failed spectacularly every time. How about non-radical redistribution? In Capital in the Twenty-First Century, Piketty puts forward the idea of a (net) wealth tax on the order of something like: * 0-10M net worth: 0% * 10-100M: 0.1% * 100M-1000M: 1% * >1000M: 2% This would allow two things: first the documentation of people's assets (and liabilities) to find their net worth for the tax regime, and second the skimming off the top of a not ridiculous amount of the assets of those that have a lot. So if you have a $1B portfolio, and manage to grow it 8% in a year, then you end up with "only" 6% growth. This still allows for incentives for people to acquire wealth, but tamps down on some of the compounding that the largest estates end up getting (there's often only so much that can be spend, so a lot of the previous year's gains just end up sitting and accumulating). The key would be for the US to get onside: by some measures it is one of the largest tax havens out there. * https://fsi.taxjustice.net/en/introduction/fsi-results https://fsi.taxjustice.net/en/introduction/fsi-results * https://en.wikipedia.org/wiki/Financial_Secrecy_Index https://en.wikipedia.org/wiki/Financial_Secrecy_Index It has global reach which would probably change a lot of international behaviour. Just look at FACTA: * https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...
  - _greim_ 5y ago
    > How about non-radical redistribution? We arguably already have a weak form of this in capital gains. Invested wealth remains untaxed, since it's already working. Good. Liquidated investments are taxed on gains. Good. But I'd also support stronger forms of redistribution such as yearly re-taxation on uninvested wealth above a threshold, non-gains percentage tax on all liquidated investments above a threshold, a land value tax, and closing of tax loopholes. Just let invested wealth do its job!
  - simonh 5y ago
    Sure, it’s radical but not excessively. The US had a %90 tax bracket in the post war decades (not that I’m suggesting bringing it back) and the country and economy somehow managed to survive. There are countries in Europe that have wealth taxes. I don’t think taxing more is an effective way of solving social and economic problems though and doing so doesn’t have to be cripplingly expensive. For example the US spends twice as much, per person, on health care than other OECD countries. You spend as much on health per person through the government, funded by your taxes, as Europe does just funding Medicare, Medicaid, CHIPS, etc, and then spend the same again through private health insurance. Why? Because the health insurance system drives costs across the board up through the roof. All you people with company plans you contribute thousands to, you already paid enough for a full first world health system in your taxes and got nothing for it, so you have to pay again for yourselves. Why that isn’t issue number 1 for every American tax payer is beyond understanding. So don’t take my up thread comment to mean I’m some libertarian extremist, or this comment to mean I’m a radical socialist. It’s just a matter of looking at what works.

yayr 5y ago

agreed. However, what alternatives to preference satisfaction do we have to steer an economy? Is the issue here not the miseducation and misculturization of harmful preferences?

simonh 5y ago

>This assumes what needs to be proven. I think it has been, dramatically, over the last 120 years. Plenty of countries have tried radical appropriation and redistribution, and it failed spectacularly every time. Meanwhile a prominent Marxist country, China, turned to capitalism and within a generation has raised hundreds of millions of people out of poverty and into urban middle class lives. Meanwhile Cuba, Venezuela and North Korea. Of course Capitalism has failure modes, because people are imperfect. All the flaws levelled at Capitalism are also found in spades in alternate economic systems because they are flaws in us. That's where accountability through liberal democracy and a decent system of laws come in. Yes that's always a work in progress and no it's not perfect, but it does work.

pwinnski 5y ago
This is a radical oversimplification of what has happened and is happening in China, conflating several things into one. China is still very much a communist country, and the raising of many people out of poverty is in large part a result of the government distributing the gains that have come from "special economic zones" into rural areas on a scale that would make a "tax on billionaires" seem like a quaint half-step. Allowing people to own and control private enterprises is a big step for China, but the gains from those private enterprises are still very much under the control of the Chinese government.
- simonh 5y ago
  The vast majority of the cash flowing into rural areas is actually remittances from sons and daughters that went to work in the special economic zones, or the main urban centres to mainly work for private enterprises. Anyway the hundreds of millions of people I'm taking about are the urban middle class. Their wealth almost entirely flows from the capitalist sector, in fact the majority of the wealth in the state sector comes from the capitalist sector one way or another. Source, my wife is Chinese and we have extensive family connections over there. China is a single party state with a command economy, but is in no way shape or form Communist or even Marxist. It's social security system is barely existant; it's public health care is radically fee based to a degree that even makes the US system look socialist; many tens of millions of urban residents get zero public support or even schooling for their children because their families come from the countryside.
hellisothers 5y ago
It’s not like the only alternative is Communism, seems like several Northern European countries are redistributive and don’t have 5 Year Everybody Must Die plans. Also I take the OP’s comments more as an indictment against trickle down economics which has been proven to not to have the claimed impact https://en.wikipedia.org/wiki/Trickle-down_economics https://en.wikipedia.org/wiki/Trickle-down_economics
throw0101a 5y ago
> I think it has been, dramatically, over the last 120 years. Plenty of countries have tried radical appropriation and redistribution, and it failed spectacularly every time. How about non-radical redistribution? In Capital in the Twenty-First Century, Piketty puts forward the idea of a (net) wealth tax on the order of something like: * 0-10M net worth: 0% * 10-100M: 0.1% * 100M-1000M: 1% * >1000M: 2% This would allow two things: first the documentation of people's assets (and liabilities) to find their net worth for the tax regime, and second the skimming off the top of a not ridiculous amount of the assets of those that have a lot. So if you have a $1B portfolio, and manage to grow it 8% in a year, then you end up with "only" 6% growth. This still allows for incentives for people to acquire wealth, but tamps down on some of the compounding that the largest estates end up getting (there's often only so much that can be spend, so a lot of the previous year's gains just end up sitting and accumulating). The key would be for the US to get onside: by some measures it is one of the largest tax havens out there. * https://fsi.taxjustice.net/en/introduction/fsi-results https://fsi.taxjustice.net/en/introduction/fsi-results * https://en.wikipedia.org/wiki/Financial_Secrecy_Index https://en.wikipedia.org/wiki/Financial_Secrecy_Index It has global reach which would probably change a lot of international behaviour. Just look at FACTA: * https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...
- _greim_ 5y ago
  > How about non-radical redistribution? We arguably already have a weak form of this in capital gains. Invested wealth remains untaxed, since it's already working. Good. Liquidated investments are taxed on gains. Good. But I'd also support stronger forms of redistribution such as yearly re-taxation on uninvested wealth above a threshold, non-gains percentage tax on all liquidated investments above a threshold, a land value tax, and closing of tax loopholes. Just let invested wealth do its job!
- simonh 5y ago
  Sure, it’s radical but not excessively. The US had a %90 tax bracket in the post war decades (not that I’m suggesting bringing it back) and the country and economy somehow managed to survive. There are countries in Europe that have wealth taxes. I don’t think taxing more is an effective way of solving social and economic problems though and doing so doesn’t have to be cripplingly expensive. For example the US spends twice as much, per person, on health care than other OECD countries. You spend as much on health per person through the government, funded by your taxes, as Europe does just funding Medicare, Medicaid, CHIPS, etc, and then spend the same again through private health insurance. Why? Because the health insurance system drives costs across the board up through the roof. All you people with company plans you contribute thousands to, you already paid enough for a full first world health system in your taxes and got nothing for it, so you have to pay again for yourselves. Why that isn’t issue number 1 for every American tax payer is beyond understanding. So don’t take my up thread comment to mean I’m some libertarian extremist, or this comment to mean I’m a radical socialist. It’s just a matter of looking at what works.