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Link Biscuits: 26 April 2010

Submitted by Shawn Fremstad on Mon, 04/26/2010 - 13:25
  • Robert Frank, The Tax that Hides in Your Paycheck: "Economic theory holds that in competitive labor markets, workers are paid the market value of what they produce. In actual markets, pay does rise with productivity, but not by much. The most productive carpenter in a framing crew, for example, might produce twice as much as his least productive colleague, but is rarely paid even 30 percent more. To see the pattern at first hand, consider groups of co-workers who perform similar tasks in your own company. In one case, suppose that your two most productive co-workers leave the job; in the other, suppose that the three least productive leave. Which group’s departure causes a greater loss of value? Most people would answer that losing the top two hurts more. If so, economic theory holds that their combined salaries should be higher than the combined salaries of the bottom three. Yet the typical pattern is the reverse: any three workers in a group performing similar tasks earn substantially more than any other two. In short, the startling fact is that private businesses typically transfer large amounts of income from the most productive to the least productive workers. Because labor contracts are voluntary under United States law, it would be bizarre to object that these transfers violate anyone’s rights. ... in effect, private markets are already applying an implicit progressive tax in the way they pay workers. And, in the process, they serve the interests of everyone in the hierarchy. The alternative would be costly social fragmentation. ... Tax systems that transfer income from rich to poor, thus mimicking the implicit transfers in virtually every private labor contract, reflect the costs and benefits of different rungs on the social ladder. They help make stable, diverse societies possible. Enlightened libertarians believe that the best social institutions mimic the agreements people would have negotiated among themselves, if free exchange had been practical. Private pay patterns suggest that our current tax code meets that test."
  • John Quiggin, After the Dead Horses: "... while I don’t see much, if any, benefit in engaging with actually existing conservatism, that doesn’t mean that we should ignore conservative, and libertarian, ideas. You don’t have to be an unqualified admirer of writers like Burke, Popper or Hayek to concede that they made valid criticisms of the progressive ideas of their day, and to seek a better way forward. Some examples of the kind of thing I have in mind: * Popper’s critique of historicism. After thirty years in which teleological claims of inevitable triumph have been the stock in trade of Fukuyama and his epigones, the left should surely have been cured of such ideas, but their centrality is evident in the very use of terms like “progressive”. It’s important to recognise that beneficial change is not an automatic outcome of “progress”; * Burke and his successors on the need for beneficial reform to be “organic”, in the sense that it reflects the actual historical evolution of particular societies, rather than being based on universal truths that are applicable in all times and places; * Hayek on the impossibility of comprehensive planning. No planner can possess all relevant information or account for all possible contingencies. We need institutions that respond to local information and that are robust enough to cope with unconsidered possibilities. In some circumstances, but certainly not all, markets fit the bill. ... equally, we need to reconsider Marxian and other left socialist critiques of social democracy. The central burden of most such critiques is that the welfare-state and similar interventions offer no possibility of transforming society or substantially mitigating the inequality of wealth and power inherent in capitalism. The last time this kind of debate had any relevance beyond setting out the correct viewpoint from which to deplore the advances of the right was back around the 1970s. At that time, there was a serious belief in the possibility of a revolutionary alternative in relation to which social democratic reforms were at best a distraction, at worst a deliberate obstacle. This belief (I assume) has now completely dissipated. So, the standard Marxian critique of the 1970s now amounts to defeatism: social democracy can’t change capitalism and neither can anything else. But radical movements can make space for lots of of different ideas, particularly in relation to organisation and mobilisation, and local ‘bottom-up’ policy initiatives. At least some of the time currently spent on combating the right ought to be devoted to more engagement with these ideas. .... as I’ve said before, the left has to stand for something more than keeping the existing order afloat with incremental improvements. We need to offer the hope of a better world as an alternative to the angry tribalism that threatens to engulf us."
  • Mike Lux, Progressive Populism and the Business Community: "I think progressives should be very clear about which business sectors we want to align with and which we want to push against. For myself, I am very clear about sectors I want to downsize, break apart, and diminish in power: the biggest banks need to be broken apart and restrained from gambling recklessly; health insurance companies should have their anti-trust exemption revoked, their competition increased, and their rates and practices far more regulated; pharmaceutical companies' power and profits should be reined in; and oil and coal companies should be downsized and phased out as quickly as possible. Other big industries should be better regulated; kept from harassing their workers when they organize, kept from hurting the environment, kept from producing unsafe products, and kept from growing so big they stifle competition. But in general, we want to encourage healthy and growing industrial, technological, green energy, and construction companies. Progressives should ally themselves to these sectors as long as they keep a decent social contract with their workers and communities. Creating these kinds of alliances can encourage better behavior by these kinds of companies, and build the political power we need to take on corrupt industries and political conservatives."
  • J.K. Rowling, The Single Mother's Manifesto: "... I keep having flashbacks to 1997, and not merely because of the most memorable election result in recent times. In January that year, I was a single parent with a four-year-old daughter, teaching part-time but living mainly on benefits, in a rented flat. Eleven months later, I was a published author who had secured a lucrative publishing deal in the US, and bought my first ever property: a three-bedroom house with a garden.... I never, ever, expected to find myself in a position where I could understand, from personal experience, the choices and temptations open to a man as rich as Lord Ashcroft. The fact remains that the first time I ever met my recently retired accountant, he put it to me point-blank: would I organise my money around my life, or my life around my money? If the latter, it was time to relocate to Ireland, Monaco, or possibly Belize. I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up, to have proper roots in a culture as old and magnificent as Britain’s; to be citizens, with everything that implies, of a real country, not free-floating ex-pats, living in the limbo of some tax haven and associating only with the children of similarly greedy tax exiles. A second reason, however, was that I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism. On the available evidence, I suspect that it is Lord Ashcroft’s idea of being a mug."