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Are the 1% really that different from the 99%?
The culture divide is probably best displayed by the anguish of protesters (in the Tea Party and in the Occupy Wall Street movements). For the most part, the protesters have in mind a single villain, well defined and obviously evil. For the Tea Partiers, the villain is Ellsworth Toohey, the unabashed collectivist and all-around devious person in Ayn Rand’s Fountainhead. For the Occupiers, the villain is Scrooge McDuck, the bitter old miser who wants the worst for anyone other than a few other rich people.
The problem, of course, is that neither one of these villains exist. Most likely the guys these protesters are railing against are good people who care about their families and country. The real enemy is the system, of which all of us play integral roles. Things will only get better when we realize this and begin to figure out ways to fix the system. Building up strawmen in order to make one’s opponents easier to defeat does no good.
Recently, Daniel Hannan, Conservative MEP in England, and all-around brilliant communicator, talked with Occupiers in his country and found some interesting things about who they see as the villain–evidently who they see him as.
Needless to say, they saw him as Scrooge McDuck. Mr. Hannan’s clarification deserves a complete repost:
(Telegraph) Chatting to some Occupy protesters this morning, I was struck by how wide of the mark were the beliefs they attributed to me as a Right-winger. In the interests of deeper understanding, here are ten things which – trust me – most of the Tory scum I hang around with think. Obviously, I don’t expect to turn my Leftie readers in a single post; still, they might get a clearer idea of what we actually believe.
1. Free-marketeers resent the bank bailouts. This might seem obvious: we are, after all, opposed to state subsidies and nationalisations. Yet it often surprises commentators, who mistake our support for open competition and free trade for a belief in plutocracy. There is a world of difference between being pro-market and being pro-business. Sometimes, the two positions happen to coincide; often they don’t.
2. What has happened since 2008 is not capitalism. In a capitalist system, bad banks would have been allowed to fail, their profitable operations bought by more efficient competitors. Shareholders, bondholders and some depositors would have lost money, but taxpayers would not have contributed a penny (see here).
3. If you want the rich to pay more, create a flatter and simpler tax system. This is partly a question of closing loopholes (mansions put in company names to avoid stamp duty, capital gains tax exemption for non-doms etc). Mainly, though, it is a question of bringing the tax rate down to a level where evasion becomes pointless. As Art Laffer keeps telling anyone who’ll listen, it works every time. Between 1980 and 2007, the US cut taxes at all income levels. Result? The top one per cent went from paying 19.5 per cent of all taxes to 40 per cent. In Britain, since the top rate of income tax was lowered to 40 per cent in 1988, the share of income tax collected from the wealthiest percentile has risen from 14 to 27 per cent.
4. Those of us who believe in small government are not motivated by the desire to make the rich richer. We’re really not. We are, in most cases, nowhere near having to pay top rate tax ourselves; our most eloquent champions over the years have been modestly-paid academics. We believe that economic freedom will enrich the country as a whole. Yes, the wealthy might become wealthier still, but we don’t see that as an argument against raising living standards for the majority.
5. We are not against equality. We generally recognise the benefits in Scandinavian-style homogeneity: crime tends to be lower, people are less stressed etc. Our objection is not that egalitarianism is undesirable in itself, but that the policies required to enforce in involve a disproportionate loss of liberty and prosperity.
6. Nor, by the way, does state intervention seem to be an effective way to promote equality. On the most elemental indicators – height, calorie intake, infant mortality, literacy, longevity – Britain has been becoming a steadily more equal society since the calamity of 1066. It’s true that, around half a century ago, this approximation halted and, on some measures, went into reverse. There are competing theories as to why, but one thing is undeniable: the recent widening of the wealth gap has taken place at a time when the state controls a far greater share of national wealth than ever before.
7. Let’s tackle the idea that being on the Left means being on the side of ordinary people, while being on the Right means defending privileged elites. It’s hard to think of a single tax, or a single regulation, that doesn’t end up privileging some vested interest at the expense of the general population. The reason governments keep growing is because of what economists call ‘dispersed costs and concentrated gains’: people are generally more aware the benefits they receive than of the taxes they pay.
8. Capitalism, with all its imperfections, is the fairest scheme yet tried. In a system based on property rights and free contract, people succeed by providing an honest service to others. Bill Gates became rich by enriching hundreds of millions of us: I am typing these words using one of his programmes. He gained from the exchange (adding fractionally to his net worth), and so did I (adding to my convenience). In a state-run system, by contrast, third parties get to hand out the goodies.
9. Talking of fairness, let’s remember that the word doesn’t belong to any faction. How about parity between public and private sector pay? How about being fair to our children, whom we have freighted with a debt unprecedented in peacetime? How about being fair to the boy who leaves school at 16 and starts paying taxes to subsidise the one who goes to university? How about being fair to the unemployed, whom firms cannot afford to hire because of the social protection enjoyed by existing employees?
10. Let’s not forget ethics, either. There is virtue in deciding to do the right thing, but there is no virtue in being compelled. Choosing to give your money to charity is meritorious; paying tax is morally neutral (see here). Evidence suggests that, as taxes rise, and the state squeezes out civic society, people give less to good causes.
Well, there you go, comrades. I don’t expect the tents outside St Paul’s to fold overnight. But perhaps we might at least engage honestly on some of these issues rather than talking past each other. ¡Hasta la victoria siempre!