7 ms·

""How can you dismiss socialism so casually?" "I've thought a lot about this, actually; it was not a casual remark. I think the fundamental question is not whe

""How can you dismiss socialism so casually?" "I've thought a lot about this, actually; it was not a casual remark. I think the fundamental question is not whether the government pays for schools or medicine, but whether you allow people to get rich. In England in the 1970s, the top income tax rate was 98%. That's what the Beatles' song "Tax Man" is referring to when they say "one for you, nineteen for me." Any country that makes this choice ends up losing net, because new technology tends to be developed by people trying to make their fortunes. It's too much work for anyone to do for ordinary wages. Smart people might work on sexy projects like fighter planes and space rockets for ordinary wages, but semiconductors or light bulbs or the plumbing of e-commerce probably have to be developed by entrepreneurs. Life in the Soviet Union would have been even poorer if they hadn't had American technologies to copy. Finland is sometimes given as an example of a prosperous socialist country, but apparently the combined top tax rate is 55%, only 5% higher than in California. So if they seem that much more socialist than the US, it is probably simply because they don't spend so much on their military." http://paulgraham.com/resay.html http://paulgraham.com/resay.html (I know that in the US anything even vaguely leftist gets called "socialism", but Thomas Piketty, the author, is a genuine strong supporter of the French Socialist Party, and the focus of the book is explicitly on government action to prevent anyone from getting 'too' rich. I think it's a fair criticism.) EDIT: To those not familiar with British history, things got really bad during the 1970s. Inflation peaked at 27%. The government went bankrupt and had to go "cap-in-hand" to the IMF for a bailout. Garbage piled up in the streets because the sanitation workers were on strike. Bodies piled up because the gravediggers were on strike... (http://en.wikipedia.org/wiki/Winter_of_Discontent http://en.wikipedia.org/wiki/Winter_of_Discontent). I don't want to get into an argument about Thatcher, but everyone at all familiar with the history agrees that the country was in a mess.

lmm 13y ago
And yet England did well; the golden years of British innovation are the '50s and '60s when this policy was in effect. Whereas come Thatcher and the '80s and the lowering of taxes you see the destruction of British industry, ruination of national infrastructure (the railways are still recovering from that era's underinvestment), and even what felt like a cultural collapse.
- spindritf 13y ago
  the golden years of British innovation are the '50s and '60s The golden years of British innovation where in the 50s and 60s all right but 1850s and 1860s, maybe even earlier. By the end of the WWII Britain was a shade of its former self completely eclipsed by the US. Although to be fair, tax policy probably wasn't the decisive factor.
- HistoryInAction 13y ago
  Not quite so. The trends in the industrial north were already strikingly negative by '79, and the fears of the coal miners in that pre-Thatcher era were important factors in the fall of the Heath and Wilson ministries.
collyw 13y ago
Thats nonsense. England / the UK is a mess at the moment. They are heavily in debt. They keep on cutting benefits to the poor and allowing the rich to pay even less tax. According to your argument everything should be getting better because of this, but I assure you it is not.
- voicereasonish 13y ago
  You obviously don't remember the 70s. Do we have rubbish piling up on the streets, dead people piling up not being buried? Do we have rolling power cuts due to strikes? Are we all on a 3 day week? Massive inflation and interest rates? The UK is turning the corner after the disastrous spend spend spend! Socialism of the last decade.
  - josephlord 13y ago
    The disastrous spending of recent decades has been private spending funded by borrowing not public spending (although arguably the government should have tried to be more counter-cyclical than it was). The recovery happening at the moment is due to borrowing restarting and accelerating and is also the first steps towards the next crisis.
    - mseebach 13y ago
      > (although arguably the government should have tried to be more counter-cyclical than it was) That's a very polite way of acknowledging that the UK government ran a massive deficit-funded spending campaign throughout one of the fattest and longest boom cycle in history.
      - josephlord 13y ago
        Public borrowing was small compared to private borrowing, it would have been better to take action to limit bank lending to cool the housing market than to drastically cut public spending. And I don't think many political leaders would have borrowed much less, under the Tories I think both spending and taxes would have been lower which wouldn't have produced better results.
why-el 13y ago
"new technology tends to be developed by people trying to make their fortunes" How about the internet? The web? Nuclear energy? All of this has been payed for by taxpayers. EDIT: I am getting a couple of down votes, so I am assuming people are asking for some sources. Most of the research, for internet at least, was actually funded by the department of defense [1] [1] http://www.internetsociety.org/internet/what-internet/history-internet/brief-history-internet http://www.internetsociety.org/internet/what-internet/histor...
- mseebach 13y ago
  No, some/most of the research underpinning the first iteration of these cherry picked technologies was paid for by the government, but the development of them into the ubiquitous form in which you and I are benefiting from them on a daily basis was purely private capitalist endeavour. Surely there's a role for government in all this, but it doesn't follow that socialism (never mind all the random crazy ideas people call socialism) is a good idea. It's funny how the idea the fact that government provided some early foundations for the Internet somehow awards them full credit for it, doesn't apply to the private inventions such as electricity and the telephone without which the government couldn't have invented the Internet.
  - why-el 13y ago
    > Surely there's a role for government in all this, but it doesn't follow that socialism (never mind all the random crazy ideas people call socialism) is a good idea. Who said this? I was merely pointing out that "new" technology, as appeared in the quote I responded to, it actually usually kickstarted by taxpayer money. I am not interested in where it went from there.
    - mseebach 13y ago
      > Who said this? Said what exactly? The comment you were responding to is titled "How can you dismiss socialism so casually?" > I am not interested in where it went from there. Well, that's awfully convenient, isn't it? If we only consider technology that's developed by the government it's much easier to reach the desired conclusion.
drieddust 13y ago
"new technology tends to be developed by people trying to make their fortunes." Please don't buy into the propaganda. I think you are confusing invention with smart packaging and marketing what was already developed. None of the technology we see today were bootstrapped by individuals or private investors. As a counter argument I will direct you to this talk. http://www.ted.com/talks/mariana_mazzucato_government_investor_risk_taker_innovator http://www.ted.com/talks/mariana_mazzucato_government_invest...
hooande 13y ago
This is a false equivalency. There would still be entrepreneurs if our top tax rate was twice as a high as it is now, or more. Everyone wants to get rich, and everyone believes that they need eleventy billion dollars in order to be happy. But most entrepreneurs and inventors make things because they like to make things. Most successful ventures start with a question, "Is X possible?" or "Wouldn't it be cool if...?". Some of the people who ask these questions also put a lot of focus on money because it's a convenient measuring stick for success in our society. This doesn't mean that paying slightly more in taxes would cause them to stop wondering and experimenting, though it might seem that way. I find it hard to believe that there would be no facebook if Mark Zukcerberg was worth $15B instead of $30B, or no Apple if Steve Jobs had paid a few billion more in taxes. If money is the ultimate goal, then why are so many billionaires joining Bill Gates in giving their fortunes away? During Eisenhower's time the top tax rate in the US was over 90%. We didn't become the Soviet Union, gravediggers didn't strike and innovation continued. I don't know if a 90% tax rate is necessarily socialist, but it wasn't the end of capitalism either. The idea that higher taxes stifle innovation is unproven and unproductive. If the super rich were willing to pay just 10% more, perhaps the super poor would have the opportunity to hold up their end of the deal as well. This real estate issue and the other symptoms of income inequality could become manageable problems instead of simmering conflicts.
- tracker1 13y ago
  I think I would probably draw the line at 50% ... if more than half of what you bring in is taken away, I just feel that's too much... That said, I would probably tax everyone at 50%, nuke corporate taxes, and ensure laws that ensure disbursements from companies to shareholders (that is then taxed, without exception)... from that, I would reduce military spending, cut most social services, and cut everyone a check for the same amount each month based on the revenues/spending. Corporate person-hood, and corporate taxes don't really make so much sense.. I'd be in favor of limiting corporations, and pushing for disbursements to the owners... Limiting corporations from holding onto unutilized and under-utilized assets and capitol. Make it work, or give it back to the shareholders/owners. I think that these things could really simplify legal/tax structures, and reduce a lot of government bureaucracy... Some people just wouldn't work.. more power to them. Some people will want more, and there will be competition in the workforce... I'd also be in favor of either open trade, or trade sanctions with countries that don't have similar environmental protection requirements to our own. Yes, that means that smart phones may double in price, but I think actions like that would help a lot more than simply putting up military bases all over the world.
pjmorris 13y ago
"but semiconductors or light bulbs or the plumbing of e-commerce probably have to be developed by entrepreneurs." Steve Blank's "Secret History of Silicon Valley" [1] reveals just how heavily the Silicon and other semiconductors in Silicon Valley depended on DoD funding, and SV likely wouldn't be where it is without that funding. Parenthetically, 'Secret History' is also just plain fun and fascinating to watch. The plumbing of the internet exists because of DoD's ARPA (now DARPA) project to connect and share expensive computing resources. Entrepreneurs may be part of the equation, but ignoring the significant government role in the technology we have seems likely to lead to wrong conclusions. [1] http://steveblank.com/secret-history/ http://steveblank.com/secret-history/ [2] "Where Wizards Stay Up Late: The Origins Of The Internet ", Katie Hafner
- refurb 13y ago
  This reminds me of the claim that the NIH discovers most drugs in the US. It is true that the NIH conducts basic research that often identifies biologic targets, but there is a huge difference between discovering a lead compound and actually bringing it to market. That difference is about $1B. That money has to come from somewhere and the free market is a great place to get it.
lingoberry 13y ago
Just moved back to Sweden from the US and was surprised to see my income tax go down by 4-5%. I feared I had to take a pay cut by 25-30%, but with the lower income tax and 25% pension, I'm actually slightly better off now. The levelling difference is the 25% sales tax on pretty much everything except food and books.
blumbo 13y ago
What if the technology sector was exempt, but rent seeking was taxed 99%
- QuantumChaos 13y ago
  That would be a boon to the honorable profession of having rent seeking ventures reclassified as technology.
mahyarm 13y ago
It's not the military! America is extremely inefficient/bureaucratic in various mainline institutions. Military is %5 of GDP, health care is %17/%18 of GDP. A typical socialized medicine country like finland or canada pays about %11 of GDP for healthcare. If the USA brought health care to match socialized medicine costs, it would pay for the military plus more. Pretty much the majority of the USA's federal budget goes towards social security, medicare and medicaid. Even though the USA pays the most in the world for it's military, I was surprised how little of the GDP it actually was.
mason240 13y ago
>Finland is sometimes given as an example of a prosperous socialist country It's poor example considering that Finland is not a socialist country, they have the same capitalistic economy and democratic government that US and most of Europe have.

lmm 13y ago

And yet England did well; the golden years of British innovation are the '50s and '60s when this policy was in effect. Whereas come Thatcher and the '80s and the lowering of taxes you see the destruction of British industry, ruination of national infrastructure (the railways are still recovering from that era's underinvestment), and even what felt like a cultural collapse.

spindritf 13y ago
the golden years of British innovation are the '50s and '60s The golden years of British innovation where in the 50s and 60s all right but 1850s and 1860s, maybe even earlier. By the end of the WWII Britain was a shade of its former self completely eclipsed by the US. Although to be fair, tax policy probably wasn't the decisive factor.
HistoryInAction 13y ago
Not quite so. The trends in the industrial north were already strikingly negative by '79, and the fears of the coal miners in that pre-Thatcher era were important factors in the fall of the Heath and Wilson ministries.

collyw 13y ago

Thats nonsense. England / the UK is a mess at the moment. They are heavily in debt. They keep on cutting benefits to the poor and allowing the rich to pay even less tax. According to your argument everything should be getting better because of this, but I assure you it is not.

voicereasonish 13y ago
You obviously don't remember the 70s. Do we have rubbish piling up on the streets, dead people piling up not being buried? Do we have rolling power cuts due to strikes? Are we all on a 3 day week? Massive inflation and interest rates? The UK is turning the corner after the disastrous spend spend spend! Socialism of the last decade.
- josephlord 13y ago
  The disastrous spending of recent decades has been private spending funded by borrowing not public spending (although arguably the government should have tried to be more counter-cyclical than it was). The recovery happening at the moment is due to borrowing restarting and accelerating and is also the first steps towards the next crisis.
  - mseebach 13y ago
    > (although arguably the government should have tried to be more counter-cyclical than it was) That's a very polite way of acknowledging that the UK government ran a massive deficit-funded spending campaign throughout one of the fattest and longest boom cycle in history.
    - josephlord 13y ago
      Public borrowing was small compared to private borrowing, it would have been better to take action to limit bank lending to cool the housing market than to drastically cut public spending. And I don't think many political leaders would have borrowed much less, under the Tories I think both spending and taxes would have been lower which wouldn't have produced better results.

why-el 13y ago

"new technology tends to be developed by people trying to make their fortunes" How about the internet? The web? Nuclear energy? All of this has been payed for by taxpayers. EDIT: I am getting a couple of down votes, so I am assuming people are asking for some sources. Most of the research, for internet at least, was actually funded by the department of defense [1] [1] http://www.internetsociety.org/internet/what-internet/history-internet/brief-history-internet http://www.internetsociety.org/internet/what-internet/histor...

mseebach 13y ago
No, some/most of the research underpinning the first iteration of these cherry picked technologies was paid for by the government, but the development of them into the ubiquitous form in which you and I are benefiting from them on a daily basis was purely private capitalist endeavour. Surely there's a role for government in all this, but it doesn't follow that socialism (never mind all the random crazy ideas people call socialism) is a good idea. It's funny how the idea the fact that government provided some early foundations for the Internet somehow awards them full credit for it, doesn't apply to the private inventions such as electricity and the telephone without which the government couldn't have invented the Internet.
- why-el 13y ago
  > Surely there's a role for government in all this, but it doesn't follow that socialism (never mind all the random crazy ideas people call socialism) is a good idea. Who said this? I was merely pointing out that "new" technology, as appeared in the quote I responded to, it actually usually kickstarted by taxpayer money. I am not interested in where it went from there.
  - mseebach 13y ago
    > Who said this? Said what exactly? The comment you were responding to is titled "How can you dismiss socialism so casually?" > I am not interested in where it went from there. Well, that's awfully convenient, isn't it? If we only consider technology that's developed by the government it's much easier to reach the desired conclusion.

drieddust 13y ago

"new technology tends to be developed by people trying to make their fortunes." Please don't buy into the propaganda. I think you are confusing invention with smart packaging and marketing what was already developed. None of the technology we see today were bootstrapped by individuals or private investors. As a counter argument I will direct you to this talk. http://www.ted.com/talks/mariana_mazzucato_government_investor_risk_taker_innovator http://www.ted.com/talks/mariana_mazzucato_government_invest...

hooande 13y ago

This is a false equivalency. There would still be entrepreneurs if our top tax rate was twice as a high as it is now, or more. Everyone wants to get rich, and everyone believes that they need eleventy billion dollars in order to be happy. But most entrepreneurs and inventors make things because they like to make things. Most successful ventures start with a question, "Is X possible?" or "Wouldn't it be cool if...?". Some of the people who ask these questions also put a lot of focus on money because it's a convenient measuring stick for success in our society. This doesn't mean that paying slightly more in taxes would cause them to stop wondering and experimenting, though it might seem that way. I find it hard to believe that there would be no facebook if Mark Zukcerberg was worth $15B instead of $30B, or no Apple if Steve Jobs had paid a few billion more in taxes. If money is the ultimate goal, then why are so many billionaires joining Bill Gates in giving their fortunes away? During Eisenhower's time the top tax rate in the US was over 90%. We didn't become the Soviet Union, gravediggers didn't strike and innovation continued. I don't know if a 90% tax rate is necessarily socialist, but it wasn't the end of capitalism either. The idea that higher taxes stifle innovation is unproven and unproductive. If the super rich were willing to pay just 10% more, perhaps the super poor would have the opportunity to hold up their end of the deal as well. This real estate issue and the other symptoms of income inequality could become manageable problems instead of simmering conflicts.

tracker1 13y ago
I think I would probably draw the line at 50% ... if more than half of what you bring in is taken away, I just feel that's too much... That said, I would probably tax everyone at 50%, nuke corporate taxes, and ensure laws that ensure disbursements from companies to shareholders (that is then taxed, without exception)... from that, I would reduce military spending, cut most social services, and cut everyone a check for the same amount each month based on the revenues/spending. Corporate person-hood, and corporate taxes don't really make so much sense.. I'd be in favor of limiting corporations, and pushing for disbursements to the owners... Limiting corporations from holding onto unutilized and under-utilized assets and capitol. Make it work, or give it back to the shareholders/owners. I think that these things could really simplify legal/tax structures, and reduce a lot of government bureaucracy... Some people just wouldn't work.. more power to them. Some people will want more, and there will be competition in the workforce... I'd also be in favor of either open trade, or trade sanctions with countries that don't have similar environmental protection requirements to our own. Yes, that means that smart phones may double in price, but I think actions like that would help a lot more than simply putting up military bases all over the world.

pjmorris 13y ago

"but semiconductors or light bulbs or the plumbing of e-commerce probably have to be developed by entrepreneurs." Steve Blank's "Secret History of Silicon Valley" [1] reveals just how heavily the Silicon and other semiconductors in Silicon Valley depended on DoD funding, and SV likely wouldn't be where it is without that funding. Parenthetically, 'Secret History' is also just plain fun and fascinating to watch. The plumbing of the internet exists because of DoD's ARPA (now DARPA) project to connect and share expensive computing resources. Entrepreneurs may be part of the equation, but ignoring the significant government role in the technology we have seems likely to lead to wrong conclusions. [1] http://steveblank.com/secret-history/ http://steveblank.com/secret-history/ [2] "Where Wizards Stay Up Late: The Origins Of The Internet ", Katie Hafner

refurb 13y ago
This reminds me of the claim that the NIH discovers most drugs in the US. It is true that the NIH conducts basic research that often identifies biologic targets, but there is a huge difference between discovering a lead compound and actually bringing it to market. That difference is about $1B. That money has to come from somewhere and the free market is a great place to get it.

lingoberry 13y ago

Just moved back to Sweden from the US and was surprised to see my income tax go down by 4-5%. I feared I had to take a pay cut by 25-30%, but with the lower income tax and 25% pension, I'm actually slightly better off now. The levelling difference is the 25% sales tax on pretty much everything except food and books.

blumbo 13y ago

What if the technology sector was exempt, but rent seeking was taxed 99%

QuantumChaos 13y ago
That would be a boon to the honorable profession of having rent seeking ventures reclassified as technology.

mahyarm 13y ago

It's not the military! America is extremely inefficient/bureaucratic in various mainline institutions. Military is %5 of GDP, health care is %17/%18 of GDP. A typical socialized medicine country like finland or canada pays about %11 of GDP for healthcare. If the USA brought health care to match socialized medicine costs, it would pay for the military plus more. Pretty much the majority of the USA's federal budget goes towards social security, medicare and medicaid. Even though the USA pays the most in the world for it's military, I was surprised how little of the GDP it actually was.

mason240 13y ago

>Finland is sometimes given as an example of a prosperous socialist country It's poor example considering that Finland is not a socialist country, they have the same capitalistic economy and democratic government that US and most of Europe have.