[ExI] Friedman and negative income tax

Dan dan_ust at yahoo.com
Mon May 4 13:40:24 UTC 2009

--- On Sun, 5/3/09, Damien Broderick <thespike at satx.rr.com> wrote:
> I haven't read much Rothbard in recent decades, so I find
> myself wondering: does he--and other libertarians who
> maintain this view--argue equally for the confiscation of
> inherited wealth?

No.  One can find something morally repugnant and argue for people to voluntarily stop it while not calling for the use of force.  The big problem in our world today as many accept initiating force.  Often this is under the guise of morality/ethics, where people judge something wrong and then decide this means force should be used to stop it.  (I believe this partly accounts for the usual polical divide between the species of fascists in America -- dubbed "liberals" (a misnomer, since the term original meant something very close to libertarian) and "conservatives."  Both seem to accept that it's right to use force to impose morality or virtue via force -- whereas the only virtue that should be directly involved with force is justice.  They just disagree over which morality should be enforced.  Also, there is another distinction between those who hold the same, but then argue against morality as such: they accept that morality should be imposed, but just
 believe there is no morality or, at least, no objective morality.  This leads to the view if there just were some true or objective morality, it could be beaten into people, but, sadly, there is none, so we must let everyone alone.  Some libertarians seem to hold this view.)

> (Confiscation by whom? I realize this is a
> problem in even forming the question, since it seems so
> ineluctably... statist. Still.) After all, the offspring or
> other parasitical beneficaries of the dead wealthy are
> liable to immediate, continuing and soul-ablating ruin of
> the kind, as we have learned from Rothbard, that destroys
> the "the virtues of self-reliance and independence" in
> welfare recipients.
> This is a serious question. The usual responses, in my
> experience, ignore that issue and fiercely defend the
> "right" of all wealthy humans to dispose of their
> (lawfully-acquired) legacies in whatever way they choose.
> But do we want to see wealthy wastrels wrecking their own
> lives and squandering wealth that might have been invested
> wisely by those instilled with the virtues of self-reliance
> and independence? (Or is this loafing subset of society--the
> ParisHiltonariat--too small to bother worrying about?)

Actually, it's not a right, according to libertarianism, of "all wealthy humans to dispose of their (lawfully-acquired) legacies in whatever way they choose," but a right of all individuals (wealthy or no) to dispose of their just property (some of which might be illegally acquired) as they choose (provided, of course, it violates no one else's rights*).

Also, given the context of your statement, the difference between a GI, negative income tax, and other such public wealth transfers and all forms of private ones is that the former must violate property rights -- someone is forced to pay.  In both cases, yes, free-loaders or dead beats might be created -- in the sense of people who might have otherwise been productive choosing instead to layabout** -- but in the former people are forced to pay others for this.  This also leads to another point: when it's done publicly, it seems the natural limits on this problem are much higher.  A wealthy person's fortune is soon gobbled up by her lazy family members; when the public coffers are empty from wealth transfers, all that need be done is increase the tax load, increase the public debt, or inflate (or some combination of all three***).  Yes, there are limits even on this, but they are much more loose -- the difference between a tightly coupled and loosely
 coupled system of incentives.

Finally, as an aside, I think a problem is that having forced wealth transfers will eventually have a cultural impact -- as some people will work (often with the best of intentions) to legitamize them and people who benefit directly or indirectly from them will work to make them seem less like force wealth transfers and more like "charity" or "entitlements."  This is, in fact, just how American culture changed over the 20th century.  As this happens, the scope of forced wealth transfers will widen -- because, as it becomes socially acceptable, ever more people will seek out such wealth.  (And, naturally, those who are already wealthy tend to be very good at doing this; thus we have spectacle of the upper and upper middle classes having wealth transfers in their favor from the working poor and lower middle class.  Think, e.g., of public colleges.  The working poor's children are unlikely to go to college, but their taxes pay so that middle class kids can
 attend them -- training the next generation of the middle level elite who will lord over the working poor and, likewise, demand more wealth transfers, e.g., for things like light rails and playgrounds for their kids.)


Dan, aspiring free loader

*  You can't, e.g., dispose of your garbage on someone else's lawn without her consent.

**  By the way, if anyone wants to test this with me, please please please support me and my lifestyle.  I will spend my day surfing the web, studying Latin poetry, watching DVDs, and the like.  Again, please please please let's test this out.  :)

***  Notably, there are fads in this.  At times, higher taxes are all the rage -- usually offered up as the need to keep debt down and balance the [government] budget.  At others, taxes are anathema and borrowing or inflation become more popular.  (Debt and inflation tend to be popular more often than taxes because the payments is put off to the future and it's harder to tell who will actually be left with the bill.  With debt (assuming no inflation), e.g., taxes will have to be raised at some future time, but no one can divine who those taxes will be levied on.  With an inflationary system, there's an indirect tax as the value of all inflated money declines, but that's hard to trace, so, even worse than debt, who pays becomes ever harder to know -- save for generalities such as big debtors will benifit first and at the expense of all others and people on fixed incomes will likely suffer more.))


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