Where the Rawlsian Rubber meets the Randian Road.

These people are insane. I’ve kept my income below $250,000 all my life, without thereby becoming a Randian. Tell them that they’re falling into the Sandwichman’s fiendish trap.

They seem to believe that working hard is altruistic and for others, and that they can hurt others by hanging out and chilling. Wow.

I understand that “Dr. Helen” was at C-PAC, putting forward a strong case for ‘going Galt’ on a farm till the nasty Democrats go away. Wasn’t clear whether the world would be denied the intellectual fruits of the Instapundit as part of a package deal or not.

I was really terrified by the thought that Tennessee might have one less law professor and one less forensic psychologist (= “expert witness”.) The people of Tennessee has already suffered so much, what with their poverty, stupidity, and meanness, and now this.

Something about this title, containing both ‘rubber’ and ‘randy/’randian’ brings to mind some very peculiar images and raises some, um, interesting questions. I’d prefer not to read any comments on what this says about the particular mind. Questions include:

What is a Rawlsian Rubber? One size fits all?

Is the Randian Road the one that the Beatles referred to on The White Album?

Why does the Rawlsian Rubber meet the Randian Road, and is that painful or pleasurable?

I’ve kept my income below $250,000 all my life, without thereby becoming a Randian.

John, you never fail me. This had me laughing so hard I nearly fell out of my chair.

If I had a lot more time and energy I’d go poke someone with a stick about the sense in which it is “going Galt” to draw on Medicare. But life is short and I’d get a better return on investment for trying to bite my toenails the way I sometimes bite my fingernails.

Please don’t blame the state of Tennessee in its entirety, Emerson. It’s just the UT system that deserves to be castigated.

Please tell me that everyone here who has read THE BOOK did so before they turned 20 and achieved the age of reason. Subtract points if you actually read the entire 80+ pages of JG’s rant. Trust me, if you read the first 5 or 6 and the last 2 or 3 you didn’t miss anything. On the other hand, I have occasionally, lo these many years, been tempted to reread The Fountainhead. If only for its wonderful take on what capable women really want.

The US Government taxes based on citizenship, not residency, so moving abroad accomplishes nothing.

If you give up your US citizenship to avoid taxes there it is against federal law (passed in 1996) to ever set foot in the United States again.

9 million Americans live abroad but only about ~500 give up their citizenship in a given year.

If you give up your US citizenship

That can be difficult:

Those who imagine that exile will be easily won would do well to consider the travails of Kenneth Nichols O’Keefe. An ex-Marine who was discharged, according to his website, under “other than honorable conditions,” O’Keefe has tried officially to renounce his citizenship twice without success, first in Vancouver and then in the Netherlands. His initial bid was rejected after the State Department concluded that he would return to the United States—a credible inference, as O’Keefe in fact had returned immediately. After his second attempt, O’Keefe waited seven months with no response before he tried a more sensational approach. He went back to the consulate at The Hague, retrieved his passport, walked outside, and lit it on fire. Seventeen days later, he received a letter from the State Department informing him that he was still an American, because he had not obtained the right to reside elsewhere. He had succeeded only in breaking the law, since mutilating a passport is illegal. It says so right on the passport.

Kenny Easwaran: If these people stop working as many hours, that seems to mean that there will be more work for other people to do…

Right — because every0ne knows there’s a fixed-sized ‘lump of work’ and so perhaps these people were not only taking more than their share of the fixed lump of national income but were achieving this result by selfishly grabbing an oversized share of the of the fixed amount of available work (and thereby depriving others of their fair shares of work). By that reasoning, if they cut back, it’ll be a win-win situation…

…if the culture of our country shifted to recognize that if you make a ton of money, you probably do it by screwing a bunch of people (here’s looking at your princes of Wall Street) I think the net effect on our economy and society would be quite salutary.

If, by ‘a ton of money’, you mean simply enough to be rich by Obama’s definition (e.g. > $250K/yr), then ‘princes of Wall Street’ account for a tiny fraction of these people. But thinking of ‘the rich’ as if they’re generally parasitic robber-barons does seem to be an experiment in cultural change that we’re getting ready to run.

Also anybody crying about how they’re not valued by their community as much anymore because they’re being asked to do more to help out the society…

Eh, no — they’re not feeling undervalued because they’re being asked to do more. They’re feeling that way because of beliefs such as you’ve expressed — namely, that if you’ve become well off, ‘you probably did it by screwing a bunch of people’. From this perspective, then, these are not virtuous, productive people being asked to do more because they’re needed and because they’re strong enough to carry a greater load for a while, but rather these are guilty, greedy rich people being punished for sins of economic exploitation they’ve committed (even if — regrettably — such exploitation didn’t rise to the level of a criminal offenses).

…the society that has given them such tremendous opportunities

Subtext — their businesses are not things that they have created through years of hard work, risk-taking, worry, and persistence through lean times when they weren’t sure they were going to make it — no, their achievements were mostly attributable to opportunities given to them by society. Consequently they deserve little credit and have only weak claims on any profits. Can you see the incentive problem?

Slocum, your narrative pretty much requires the existence of a large class of people who, by working really hard, have built small businesses for themselves netting 250K+/year. If you believe that is really the best way to describe the bulk of people in that income group, then I could see how you would be really worried about discouraging additional work. I think that is really quite a stretch, though.

Additionally, the idea that we are punitively taxing the 250-500K group doesn’t really fly at all, does it? I am very much in favor of the idea that we need to eliminate the modern gospel of wealth that currently surrounds the wealthiest members of our society. It is a gospel that has people defending exhorbitant expenses on corporate jets for companies receiving government assistance on the basis that if those CEOs are paid that much, then their time is really worth it (but why were they actually paid that much to begin with?). I think we have a lot of pushback to do on this kind of thinking before we are in danger of erring on the other side of things. And that’s not really the message that allowing a 3% tax cut on the upper income bracket to expire is sending at all, anyhow. What it’s saying is that when we can no longer afford the luxury, the people who have clearly benefited the most greatly from membership in our society should also be the ones who are asked to contribute when that society is faltering.

If you are a dentist making 300K/year and you feel like a tax increase of 1500/year amounts to an indictment of your way of life, that’s just as stupid as describing the situation as confiscation.

Whenever aid to the poor and needy is cut, we’re always told by some official voices about how the recipients didn’t really need that largesse and weren’t using it well. Well, the same is true of the top 5% and the top income tax bracket. We’ve seen that as a class, the very wealthiest simply can’t be trusted with that much discretionary income. When they’re taxed more heavily, they use the portion that’s theirs in relatively constructive ways, but when they’re given more, they blow it on complicated financial instruments until they end up making the whole economy collapse.

Nor are their moral crimes victimless ones. Their greed and negligence have led to jobs being taken away from others, including those who (all the official voices agree) ought to be working rather than on the dole. And since the offenders show no interest, as a group, in policing themselves or dealing with the consequences of their bad behavior, it’s as necessary for the state to step in and separate them from their instruments of vice as it is for the state to step in and separate children from undeserving poor parents engaged in substance abuse. In fact it is substance abuse, it’s just that here the substance is a financial instrument rather than crack or meth.

As a society, we cut off the benefits of poor people who blow their aid on addictive, harmful vices. I argue that it would be grossly insulting to hold the rich to any less standard – I think anyone arguing against holding the rich accountable as we do the poor is indulging in the fantastic, shameful belief that the rich are simply not capable of being as moral as the poor. I condemn that. I think that the principles many of the rich themselves endorse in dealing with poor people doing bad things should and can apply precisely as well to the rich.

harry b: Now, of course, some of those over $250k are there because they screwed people over, some because they just have the luck of having developed very rare skill sets that happen to be rewarded highly in our society, and others because they do something incredibly socially useful that (again they are lucky that) our society rewards highly.

So there are at least three distinct levels of undeservedness then?

mpowell: Slocum, your narrative pretty much requires the existence of a large class of people who, by working really hard, have built small businesses for themselves netting 250K+/year.

Define ‘large class’ — obviously we’re talking about ~2% of the population, but of those, I suspect you’d be surprised to discover just how many fit that description:

Who is the prototypical American millionaire? What would he tell you about himself?

* About one in five of us is retired. About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.

http://www.nytimes.com/books/first/s/stanley-millionaire.html

This strikes me as a part of the economy that is all but invisible to academics.

If you are a dentist making 300K/year and you feel like a tax increase of 1500/year amounts to an indictment of your way of life, that’s just as stupid as describing the situation as confiscation.

Indeed. But many people are look at the avalanche of spending rather than the announced tax plans and reaching the same conclusion Paul Krugman has — namely, that there’s no conceivable way to pay for all this while limiting tax increases to the top 2%. It’s a pretty reasonable guess that increases are going to fall on more people than that. If I own dental practice, do I buy new equipment, bring on junior partners, open a satellite office? Or do I cut back to myself and a hygienist and play more golf? And it’s not just the money — it’s the zeitgeist. If business people start impressing each other with ‘conspicuous consumption’ of leisure and early retirement plans rather than plans to build and expand their businesses, that would be a significant change. And keep in mind that higher income people now work significantly longer hours than lower-income people. That wasn’t always the case (and may not be the case in the near future either).

Bruce Baugh: Well, the same is true of the top 5% and the top income tax bracket. We’ve seen that as a class, the very wealthiest simply can’t be trusted with that much discretionary income. When they’re taxed more heavily, they use the portion that’s theirs in relatively constructive ways, but when they’re given more, they blow it on complicated financial instruments until they end up making the whole economy collapse.

The top 5% encompasses about 15 million Americans. Just how many of those fifteen million do you think were involved in the ‘complicated financial instruments’ business? And by contrast, what fraction of those who were implicated in those disasters were bureaucrats working for government agencies who took their eyes off of the ball? How many were Washington insiders shuffling very profitably between government, the financial industry, and lobbying firms? How many were pension fund managers? Rather a lot, I’d say. In contrast, I believe I can say with confidence that exactly none of them were dentists or owners of pest control businesses.

33: Yes, I was going to mention this. Wealth and income have a squirrely relationship. There are more people in the 150K-250K range then in the 250K+ range, and all those folks should be millionaires by the time they’re in their 50s. Of course mileage will vary, but the limitation is due to fiscal management, not income.

I don’t have a lot of information on the demographics of this class because it’s hard to know how much small business owners make. But most of the jobs I know of that will make that much are banking, law and medicine. And only of those 3 is consistently contributing something in my opinion.

The bottom 5% of the population is 15 million too, and has been hectored from time immemorial about its moral failings and how it can’t be trusted with things. And no chunk of that bottom 5% ever did anything like this amount of damage to the society around them. I have zero pity of any kind – this is nearly universally accepted operating procedure when it comes to groups some of whose members have messed up, and I don’t see any reason to exempt the rich just because you idolize them, Slocum.

Now if the top 5% want to admit that they can’t actually bear anything like the scrutiny or criticism they’ve dished out for the last thirty years, then we could see about starting their instruction in self-control, moral competence, and the like. I’ve been proceeding on the basis that there isn’t actually anything morally incapacitating about great wealth, but if they and their defenders want to say there is, I’m willing to see what might help just as I would with any other mental disability or incapacitation.

Bruce Baugh — well, I’m with Jesus on this one. If you think there’s nothing morally incapacitating about great wealth you a) have a strange reading of the empirical world or b) a deeply unchristian reading of moral requirement. Great poverty, by the way, is the also morally debilitating, not that there aren’t exceptions in both cases, and these two fact combine to make a case for a much more equal distribution of income and wealth, a case that is, in my opinion, overdetermined.

That said, no-one is making the case for a substantially more equal distribution of income and wealth, and absent substantially egalitarian reforms I am entirely open (empirically) to the idea that the least advantaged might benefit from extra increments of inequality (which is what slocum is, I think, most concerned about, and rightly so) and that on those grounds, but only those, various things the administration is doing might possibly be problematic. But the (putative) behaviour of the (putative) John Galts is not made morally innocent by that fact. (Of course, if Ann Coulter shut her gob everyone would be immediately better off, because her personal mission is to poison public discourse, something she excels at — her particular highly-paid talent is immensely socially destructive).

In theory the Difference principle is thoroughly egalitarian, even socialistic, and those who pair up Rawls with the likes of Divine Ayn have done him wrong (peruse a few objectivist-like sites [if you can stomach it] and one notes Rawls ranked among the “collectivists”). Rawls, however, did acknowledge historical and political conditions (and injust distribution), which prevent the original position and difference principle from being consistently applied; given existing conditions, the DiffPrin. can be applied via maximin: any proposed political or economic policy should benefit the least off as well as it does the wealthy , unless some inequalities could benefit all (say in terms of division of labor—-that’s what troubles the apparatchiks, I believe) .

TOJ is a massive and somewhat bureaucratic system, perhaps slightly utopian, but attacking it as insufficiently egalitarian seems a rather odd tactic . Rawls’ critics ( ie. Baron Von Nozick) usually attacked it as overly egalitarian. A more effective critique of TOJ, or Cohen might proceed along somewhat Malthusian lines: Rawlsville will not likely hold together during unstable or extreme conditions, whether famine, drought, war, riots, or if petroleum reserves or H20 were to dry up. (The marxistas have other objections: “Rawls, petit-booj-wah liberal jackal” variety.)

Just as well all those people earning 250k plus didn’t benefit from being born wealthy, while all those people in the bottom income bracket didn’t suffer from being born poor. Or this tax might seem like just a way of distributing bad luck.

But as slocum can tell us, everyone in that 250k bracket worked to get there, while everyone in that bottom bracket was rich until they just stopped working and taking risks (which, you know, haven’t had any bad effect on the economy recently, those risk thingamies).

Why, if you were to go and talk to anyone in a council house in England living on the dole, you’d find an ex-250k-a-year banker, whose work ethic slipped (watch out Daniel!). They don’t deserve redistribution, kids. And rich people never ever ever get rich by paying those bottom-income sludge-dwellers tax-free below-living-wage salaries under the table. Or selling them 125% mortgages and taking their bonus and running before the fallout wipes out a real economy which employs people.

No sirree. Just listen to slocum, that’s the recipe for a really just society.

Dan:

Actually, I find it odd and even a bit offensive that you would equate the rich, a group who, by their disproportionate control of the wealth of this country, have a correspondingly disproportionate amount of power in society and government, with Jews or blacks, both of whom are socially and culturally disadvantaged, usually by those same rich.

The condition of wealth is not equivalent to the condition of race, which is inborn. A Jew can’t become more Jewish by exploiting the labor of the poor. A black can’t become more black by convincing the government to bail out an entire malfunctioning industry. The rich can, and do.

Furthermore, being extremely black or extremely Jewish is considered a negative in modern society. These are conditions that generally go along with a lack of agency. You cannot say that about being extremely wealthy. Being rich is considered a good thing!

The reason that Bruce can–and that we as a nation should–hold the rich to a higher standard is because the rich, by gathering into themselves both money and power, have claimed the higher standard for themselves.

They have the power, they can damn well be saddled with the responsibility. If they don’t want the one, they can give up the other.

threatening to stop working as hard

Who is threatening this?

Martin Bento,

There are a few possible responses to make here; Firstly, I’d probably be inclined to say that utilitarianism is actually meaningless, because there is no such thing as ‘utility’ that can be compared between people. It’s not just that determining the various levels of utility of different people causes epistemic difficulty, it’s that there is no underlying phenomenon there to be measured in the first place; Secondly, I might agree for the sake of argument that utilitarianism is in fact a meaningful doctrine, but a false one.

But most convincingly (because non-question beggingly) I might concede that utilitarianism is meaningful, and true, and that wealth really does have a DMU, and that everyone’s utility function is pretty similar, and that redistribution is costless, and that there are no incentive problems with redistribution whatsoever. The problem then is that it still doesn’t follow from utilitarianism that an equal distribution is justified. Basically, that reasoning just isn’t valid in a dynamic world with production as well as consumption. For the argument in full I’d recommend David Schmidtz’s excellent paper “Diminishing Marginal Utility and Egalitarian Redistribution” (Journal of Value Inquiry, volume 34 I think).

Righteous Bubba,

Forgive me, but I’ve never actually read a book by Rand in my life. Isn’t threatening to withhold their labour what (putative) John Galts do?

Where is this fantasy land they’re all moving to anyway?

“The rich aren’t rich because of luck…”

Are people not allowed to inherit anything in the US?

arethese people serious ???

anybody who truely believes in “going galt” is operating with half a brain. and these idiot who think they’re “going galt” without any real understanding of the concept are even less intelligent

by all means, please deprive us of the labor of the LEAST INTELLIGENT part of the population

given the performance of Wall Street in the past 10 years, hopefully some highly paid corporate executive are in the batch of morons who are ready to deprive us of the benifits of their incompetence

Martin James,
One thing you seem to be forgetting is the free market. If a profession is in high demand, and because taxes are raised, they cut back their hours because it isn’t worth it, the market will respond by raising their wages.

I think you are being obtuse, Dan, either deliberately, or ignorantly, its hard to tell. I have been pretty clear about the role that the invocation of luck played in my argument, which is to block the kind of “I deserve it because I’ve worked hard” complaint which slocum was implying on behalf of the up-against-the-wall rich. I have heard this complaint in social situations many times from people who are in the richest 0.5% of humanity and it is simply silly. There’s no smuggling in of equality here. In fact, and again I was very explicit about this, if its really true that the putative lower efforts of the rich in response to very small changes in marginal tax rates we are talking about will harm the disadvantaged then they, the disadvantaged (but not the rich) have grounds for complaint. In the end, I think some version of the difference principle is right, and has priority both over equality and over equality of opportunity. But, and this is Cohen’s point, it is not the case that there is nothing wrong from the point of view of justice when people who could work harder to benefit the least advantaged refuse to.
Finally, in the context of a discussion of Cohen’s critique of Rawls, which is how daniel frames this, there is nothing intellectually about assuming a baseline of equality, since that is something both of them agree about.

Maybe pitch your Rawlsian dreams to the Black Caucus, or perhaps governments of Saudi Arabia, or Sudan, or your local mosque for that matter. I suspect there’s some apparatchik behind most academic Rawls discussion: TOJ sort of the intellectual equivalent of surrendering ( even marxistas and nietzscheans might agree to that).

You actually have no problem with people having stuff as a matter of luck

I’ve no idea what you’re talking about. Certainly I’ve got a problem with some people having stuff and others not as a result of luck. I can also tell the difference between “individual beneficiary of luck” and “individual beneficiary of collective policy”.

“people concern” > I meant to say “public concern”, though perhaps I should have said “political concern”

The going Galt meme is overblown, but higher taxes do matter even for people without the resources stop working. I realize that not everybody can shift their income/hours worked easily, but it does matter for some. There are only so many hours in the day and pretty much every extra hour I’m at work means something else that has to be paid for (since I’m not willing to cut down sleep or leisure or family time anymore). If I do overtime, I won’t have the time to clean the gutters myself or we’ll eat more expensive prepared food because there is no time to cook. And, when making those calculations, the marginal tax rate is what matters.

Harry, I’m not in that boat as far as income goes. My point was that people who pay much lower rates of taxes still make those types of calculations.

Maybe a Rawlsian approach to organized crime, or Rawlsian Nevada brothels……….All the girls got a raht to a john now…… We’re gonna divide ’em up fair n square…. fuggetabout it

As MQ points out, the tax increase we’re talking about just isn’t that substantial: 35% to 39.5% on income over $250K. This is tiny compared with the payroll tax increases for the non-rich that the first round (Reagan’s) of tax cuts for the rich resulted in.

No doubt it’s reasonable at least to ask whether even this small tax increase would make entrepreneurs less productive. But doesn’t this question obscure the fact that, by an overwhelming margin, the wealth and income we should be targeting originates in the non-productive — ie, the financial — sector? The financial sector’s share of both profits and total output soared in the last few decades, without creating anything like corresponding social wealth. Perhaps the fairest and most efficient tax policy would be to leave all non-financial workers and entrepreneurs alone and instead confiscate all income (including capital gains) over $250,000/yr. earned in the financial sector over the last twenty years.