LVTFan's Blog

See the Radical

Having taken 4 years to get through high school Latin, without regret, I've always liked the word "radical." It suggests going to the root of things.  To quote Thoreau, 

 

There are a thousand hacking at the branches of evil to one who is striking at the root, and it may be that he who bestows the largest amount of time and money on the needy is doing the most by his mode of life to produce that misery which he strives in vain to relieve. It is the pious slave-breeder devoting the proceeds of every tenth slave to buy a Sunday's liberty for the rest. Some show their kindness to the poor by employing them in their kitchens. Would they not be kinder if they employed themselves there? You boast of spending a tenth part of your income in charity; maybe you should spend the nine tenths so, and done with it. Society recovers only a tenth part of the property then. Is this owing to the generosity of him in whose possession it is found, or to the remissness of the officers of justice?

 

 

See the Radical.
By Ellis O. Jones

See the Radical!

What, O Sage, do you mean to tell me that intelligent and earnest looking fellow is a Radical?

Exactly so.

Then I have been misinformed. The editor of my paper always speaks of a Radical in the most contemptuous of terms, as if a Radical were the most reckless and the most ignorant of men.

The trouble is, my son, that your editor is careless in the use of terms. When he uses the word “radical” that is not what he means.

What does he mean, O Sage?

When he uses the word "radical” he means rabid.

But aren't those—synonymous terms? I always thought so.

Many people think the same way, but it is not so. A Radical is a man who is not content to be superficial, a man who goes to the bottom, to the root, of things. It takes a profound and earnest and careful man to be a Radical.

And one who is rabid?

Is one who flies off the handle because he is superficial. A rabid man would rather be angry than be studious.

Then tell me, O Sage, who would you consider the greatest Radical of the day and who the most rabid?

No, my son, in discussions of this sort it is not safe to be too personal.

Better Insurance Against Inequality - NYTimes.com

Better Insurance Against Inequality - NYTimes.com

Better Insurance Against Inequality 

APRIL 12, 2014 

Economic View By ROBERT J. SHILLER 

Paying taxes is rarely pleasant, but as April 15 approaches it’s worth remembering that our tax system is a progressive one and serves a little-noticed but crucial purpose: It mitigates some of the worst consequences of income inequality. 

If any of us, as individuals, are unfortunate enough to have income drop significantly, the tax on that income will plummet as well — and a direct payment, or negative tax, might even be received from the government, thanks to the earned-income tax credit. In this way, the tax system can be viewed as a colossal insurance system, guarding against extreme income inequality. There are similar provisions in other countries.

But it’s also clear that while income inequality would be much worse without our current tax system, what we have isn’t nearly enough. It’s time — past time, actually — to tweak the system so that it can respond effectively if income inequality becomes more extreme.

"Respond effectively if"???

How about policies that would prevent a large portion of our current income inequality by either pre-collecting, for public purposes, the economic rent which rent-seekers love to capture as long as we let it hang out there, or putting a market price on privileges of various kinds -- the right to collect tolls, the right to use the airwaves, the right to string wires of various kinds along public rights-of-way, to occupy other parts of the commons and charge others to use what one puts on it.  One could call it "natural public revenue."

Bob Schiller knows some of the ways people grow wealthy in their sleep, without lifting a finger.  He knows about boom-bust cycles, and the economic agony they cause to ordinary human beings in our society.  He chronicles, he measures, he profits from the selling of those measurements.  

Probably once or twice it has passed through his mind that by some simple alterations to public policy, we could make our economy more stable, our society more just.

Perhaps he has played the game Monopoly, and maybe he knows that it was not created in the 1930s, but has its roots in The Landlord's Game, created by late 1902, to teach the ideas of Henry George, who, it is likely, was at least mentioned in his Eco 101 textbooks, though perhaps glossed over by a busy and unaware instructor.

Does he seek to reduce the income inequality by preventing it, or only collecting some piece of the privilege-payments after the fact without tweaking the system that permits them even a tiny bit?

Milton Friedman, another economic eminence, maintained that land value tax was the "least bad" tax, but never lifted his voice to promote it further than that acknowledgment (in 1968 and 2006 and perhaps in between).  He likely had other kinds of interests top of mind.

Let's not just "mitigate the worst effects."  Let's acquaint ourselves with the structures that create those worst effects, and destroy them!  Go to the root!  Be radical!  Eradicate those structures!  

It was Henry David Thoreau who said, 

 

"There are a thousand hacking at the branches of evil to one who is striking at the root."

 

Dare Professor Schiller strike at the root?  Dare he point to the root?  Has he sought the root?  Or is he content with hacking -- nibbling -- at branches, which doesn't help the victims a tenth as much as striking at the root?

Ironically, Professor Schiller is the "Sterling Professor of Economics" at Yale. That seat was endowed by Jack Sterling (1844-1915), co-founder of the law firm Shearman & Sterling with Thomas G. Shearman (1834-1900)*, upon his death in 1918.  Shearman knew where the root was, and devoted himself to seeking its eradication. (Explore the NYT archives for references.)  It is ironic that nearly 100 years later, the occupant of that seat (and many other things at Yale) is content with nibbling.  But maybe it isn't surprising.  Lots of alumni would not be happy to have those roots identified, and even a tenured professor could be uncomfortable being the one to call attention.   They might be the ones who endow the next set of professorships, from the gains they've made based on the unjust and unwise structures their respected -- and aspiring -- professors have failed to publicly question.

 

*See:

• "The Coming Billionaire" (1891)
• The Menace of Plutocracy (1889)
• The Distribution of Wealth (1887) - in 3 parts -- Part 1, Part 2, Part 3
• The Owners of the United States (1889)
• Natural Taxation -- see this and this

 

Let's not "insure against inequality." (Who gets to collect that insurance, and how does it compare to their losses?)  Let's find ways to create a level playing field on which all can prosper.   Sustainable and just to all.

 

And let's see about making it okay for tenured professors to share those ideas with their readers and students.  And more profitable than promoting structures that need to be "insured against."

The Charitable-Industrial Complex

Here are the final paragraphs in an interesting and perceptive NYT Op-Ed by Peter Buffett.  He comes up with an interesting phrase: "Philanthropic Colonialism"

The Charitable-Industrial Complex - NYTimes.com.

What we have is a crisis of imagination. Albert Einstein said that you cannot solve a problem with the same mind-set that created it. Foundation dollars should be the best “risk capital” out there. 

There are people working hard at showing examples of other ways to live in a functioning society that truly creates greater prosperity for all (and I don’t mean more people getting to have more stuff).  

Money should be spent trying out concepts that shatter current structures and systems that have turned much of the world into one vast market. Is progress really Wi-Fi on every street corner? No. It’s when no 13-year-old girl on the planet gets sold for sex. But as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine. 

It’s an old story; we really need a new one.

But perhaps Buffett's most important observation is this one:

"Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left." 

To which I can only insert ... "and are benefiting from."

He also points out,

As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.” It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.

But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over. Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life.

I hope Mr. Buffett will take the time to read Henry George's "Progress and Poverty."   He might be better able to identify the particular structures that create and maintain poverty and the concentrations of wealth, income and power.  And, based on that last sentence, I think Buffett would appreciate the final section of P&P.  (Bob Drake's 2006 abridgment is a fine starting place, but the unabridged is a pleasure of its own.)

The Earth-for-All Calendar: November 24 -- Martineau

I suppose the result must be . . . the establishment of society under a wholly new idea. . . The leading features of any such radical change must be a deep modification of the institution of property — certainly in regard to land, and probably in regard to much else.

— HARRIET MARTINEAU (1853), Autobiography, Vol. II., Sec. 10, p. 119.

The Earth-for-All Calendar: April 13 -- Jefferson

Wherever there is in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on.

— THOMAS JEFFERSON (1785), Ford's Writings of Jefferson, Vol. VII., 36.

The Superficial Reformer

If you've just arrived at this page, this is the first (last) of perhaps 10 items I've picked up from reading a year's worth of an 1895-6 weekly called The San Jose Letter. I'm amazed how topical they are 115 years later!

From The San Jose Letter, of November 28, 1896:

THE SUPERFICIAL REFORMER.

A great fault of the human family today, when starting out on reform measures, is to battle with effects and neglect the primary causes of the evil. What man, be he the most uneducated tiller of the soil, would start out to eradicate weeds by cutting them off at the surface of the ground? Would he not dig down and remove the roots? And yet all the great reform parties, temperance people and labor organizations, are fighting effects, all claiming to be right, while the "ignis fatuus" is luring them on to their own destruction.

What, then, is the primary cause of the evil that is today filling our jails and insane asylums, making prostitutes of women and placing a premium upon drunkenness and suicide, while the products of industry are taxed to their utmost to keep up this damnable retrograde movement of our civilization? Are these the results of man's development in freedom, or are they the results of present conditions over which he has, or thinks he has, no control? Cannot this entire brood of evils be laid at the door of poverty and want, the result of bad laws? Anything, therefore, that will better man's condition will certainly lesson crime. Such a state of affairs is what the single tax will bring about. It has already been shown that taxing a thing has a tendency to discourage it, hence we are going to stop taxing industry and production, because these are the mainstays of existence, and to discourage them is to say that we have no right to that which nature decreed should be ours, but our entire revenue for community purposes, we propose to take from land values created by reason of the presence of the community.

—George W. Loehr in National Single Taxer.

If we don't go to the root of the problem, we and our descendants are going to be spending centuries trimming the weeds.

"Radical" has an honorable root: Radix, radicis --the root!  Radish, radius, eradicate, radical ...

The current conversation about "tax reform" seems to mostly consist of arguing about federal income tax brackets.  It doesn't go to the root of the problem.  Most of those carrying on the conversation wouldn't know the root if they stumbled across it.