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Thread: Hazlitt - Public works mean taxes

  1. #1

    Default Hazlitt - Public works mean taxes

    I am currently reading Hazlitt's Economics in one lesson. I say reading but what I really mean to do is analyse his arguments. I want to do it chapter by chapter here on the forum.

    The broken window fallacy chapter is pretty self evident so I would like to start with chapter three instead.

    Fore note:
    "A certain amount of public spending is necessary to perform essential government functions. [But] I am here concerned with public works considered as a means of “providing employment” or of "adding wealth" to the community that it would not otherwise have had." - Henry Hazlitt

    The question: Do public work projects like a bridge, provide employment at the expense of employment in the private sector?

    Hazlitt's Answer: It is true that a particular group of bridge workers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000,000. They will have that much taken away from them which they would otherwise have spent on the things they needed most. Therefore for every public job created by the bridge project a private job has been destroyed somewhere else.All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, radio technicians, clothing workers, farmers.
    Last edited by mohassan; 11-13-2012 at 09:42 AM.



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  3. #2

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    The advocates of these public projects, seem to imply that the private sector is not capable of providing them. I must admit, I find it difficult to imagine a private built bridge, but then again, who knows what the private sector would do had they not been sacked.

    Also Hazlitt points out a grave concept,

    When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only where bridges must be built, the government spenders begin to ask themselves where bridges can be built.

  4. #3

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    Quote Originally Posted by mohassan View Post
    The advocates of these public projects, seem to imply that the private sector is not capable of providing them. I must admit, I find it difficult to imagine a private built bridge, but then again, who knows what the private sector would do had they not been sacked.
    The recent television miniseries "The Men Who Built America" was very interesting on this point. As I understood it, Andrew Carnegie built the first steel bridge across the Mississippi at St. Louis - the Eads or Keystone bridge - via private funding mostly.

    The series goes on to say elsewhere that JP Morgan actually loaned money to the Federal Gov't at times. Imagine that - private capitalists being worth more than the federal government. Those were the days.
    "Freedom is Popular!" - Ron Paul
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    Quote Originally Posted by supermario21 View Post
    Raul Labrador just threw the hammer down..."said we need to stop acting like moderates and talking like conservatives" and start "talking like moderates and acting like conservatives".
    looking for a second major political party

  5. #4

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    Quote Originally Posted by mohassan View Post
    The advocates of these public projects, seem to imply that the private sector is not capable of providing them. I must admit, I find it difficult to imagine a private built bridge, but then again, who knows what the private sector would do had they not been sacked.
    Why not just allow taxpayers to choose which government organizations they give their taxes to? Tax choice...and/or pragmatarianism...would create a market for public goods and allow taxpayers to shop for themselves in the public sector.

    Also, the liberal economist John Quiggin is writing the sequel to Hazlitt's book.

  6. #5

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    Quote Originally Posted by Xerographica View Post
    Why not just allow taxpayers to choose which government organizations they give their taxes to? Tax choice...and/or pragmatarianism...would create a market for public goods and allow taxpayers to shop for themselves in the public sector.

    Also, the liberal economist John Quiggin is writing the sequel to Hazlitt's book.
    I believe taxation is theft if done so by force. But I think Hazlitt is not too concerned with the idea of taxation in terms of violating property right, but rather its economic effect. This book is not a philosophical book. But yeah taxation by force is wrong, period.

  7. #6

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    Quote Originally Posted by mohassan View Post
    I believe taxation is theft if done so by force. But I think Hazlitt is not too concerned with the idea of taxation in terms of violating property right, but rather its economic effect. This book is not a philosophical book. But yeah taxation by force is wrong, period.
    Sigh. Here I was looking forward to a nice economic discussion...but unfortunately...you would prefer to talk about religion. If you're more interested in religion then why are you reading Hazlitt's book? If you're more interested in religion then what are you doing in the economics category? There's a specific category for people who believe that their moral views are superior to other people's moral views...Political Philosophy.

    The short version...

    I generally prefer consequentialist arguments. I think I understand economics better than I understand moral philosophy, and possibly better than anyone understands moral philosophy. - David Friedman
    The long version...

    I guess the first thing is that it offers arguments which don't require that people already share your religion...using the term "religion" broadly. That as far as I can tell, nobody, whether deontological libertarians or communists or anyone else really has a really convincing argument to show that their moral views are right. Many people believe that they do but I don't think that they do. Ayn Rand, at least, presented an argument. Ayn Rand claimed in effect to have defeated David Hume's is ought problem. Hume argued that you couldn't derive on ought from an is. I have a discussion up on my webpage of the holes in Rand's arguments. As far as I can tell she simply didn't do it. I don't think it can be done as far as I know. So in order to persuade people by a natural rights argument there has to be some reason why they believe in natural rights to start with because you don't have any good arguments to show that they ought to believe it. Whereas my argument...it claims to show...it hopefully shows...that my system would be better in terms of the value that almost everybody already has. So I'm really saying if you regard natural rights to be really important...well look...in my system rights will rarely be violated. If you regard people being happy and being healthy and living long lives...look in my society people will be in effect wealthier than in societies with governments, therefore you should like the results of those things...and so forth and so on. So I think that I have an argument which does depend on convincing people that economics is relevant to human behavior but doesn't depend on convincing them of your particular right and wrong beliefs. - David Friedman
    An older version...

    That which has no existence cannot be destroyed — that which cannot be destroyed cannot require anything to preserve it from destruction. Natural rights is simple nonsense: natural and imprescriptible rights, rhetorical nonsense — nonsense upon stilts. - Jeremy Bentham

  8. #7

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    I only pointed out that any form of taxation is wrong, because you brought up "tax choice". You want to see people choose the public programs they want to support. I am sorry, but taxation by force is objectively wrong, simply because it violates the non-aggression principle. Nothing to do with religion.

    What I hoped to discuss in this thread is whether public programs like building bridges, create employment at the expense of employment that might have been created had there been no taxation.
    Last edited by mohassan; 11-13-2012 at 07:53 PM.

  9. #8

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    Quote Originally Posted by mohassan View Post
    I am currently reading Hazlitt's Economics in one lesson. I say reading but what I really mean to do is analyse his arguments. I want to do it chapter by chapter here on the forum.
    Awesome idea and a great book. I read it this summer. +rep
    "We do have some differences and our approaches will be different, but that makes him his own person. I mean why should he [Rand] be a clone and do everything and think just exactly as I have. I think it's an opportunity to be independent minded. We are about 99% [the same on issues]." Ron Paul

  10. #9

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    Quote Originally Posted by mohassan View Post
    The question: Do public work projects like a bridge, provide employment at the expense of employment in the private sector?

    Hazlitt's Answer: It is true that a particular group of bridge workers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $1,000,000 the taxpayers will lose $1,000,000. They will have that much taken away from them which they would otherwise have spent on the things they needed most. Therefore for every public job created by the bridge project a private job has been destroyed somewhere else.All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, radio technicians, clothing workers, farmers.

    Effects of taxation and public works originate from a combination of:

    a) money that would have been channeled and circulated elsewhere, and
    b) money that would have been saved, not circulated

    Simplistically speaking, a) money that would have circulated and been channeled elsewhere, answers the original question in the affirmative.

    Following the money:

    Public sector employees are also subject to payment of taxes, and make economic choices, including saving, as well as spending decisions that are going to differ from those who originally paid the taxes that paid their salaries and wages. So while much of that money will remain in the "private sector", that private sector is not an homogenous blob. The private sector is like so many arteries and veins that reach out in all directions, and you can feed one while starving the other.

    Example: Public sector employees are given a discount opportunity not enjoyed by the private sector (e.g., military commissary, or a store located closest to the bridge itself). Now you've not only channeled funds into the public sector, you've continued to re-channel much of that same money out of the local economy. Even if tax funds are re-channeled within the private sector in a way that provides employment--it will be at the expense of employment in other areas of that same private sector.

    Another effect of private sector siphoning through taxation is localized price inflation within certain areas of the private sector. The taxpayer that buys food does not necessarily buy more or less food as a result of a tax. Absent a local work project, the ratio of demand to supply for certain commonly used goods and services (e.g., BREAD) would be smaller (fewer dollars chasing n specific goods). This dynamic is changed by the addition of more buyers of like goods and services that might not otherwise have existed had a local make-work project not existed. So while the increased demand is seen as a windfall for the local grocer or baker, the population overall will suffer a shortfall, as the local price of goods and services are bid upward through greater artificial demand.

    In other words, you're not just paying people to work on a bridge--you are also giving them the means to bid against you for like goods in the market.
    Last edited by Steven Douglas; 11-13-2012 at 08:50 PM.

  11. #10

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    Quote Originally Posted by mohassan View Post
    I only pointed out that any form of taxation is wrong, because you brought up "tax choice". You want to see people choose the public programs they want to support. I am sorry, but taxation by force is objectively wrong, simply because it violates the non-aggression principle. Nothing to do with religion.
    Did you not read the passages I shared...or did you just not understand them?

    Quote Originally Posted by mohassan View Post
    What I hoped to discuss in this thread is whether public programs like building bridges, create employment at the expense of employment that might have been created had there been no taxation.
    In other words...you wanted to discuss scarcity. Yet, when I brought up the idea of allowing taxpayers to consider the alternative uses of their limited funds...you wanted to discuss morality.

    The obstacle we're up against has absolutely nothing to do with people lacking morality. For example...you are obviously morally superior but you fail to understand the economic consequences of allowing taxpayers to shop for themselves in the public sector. Therefore, the obstacle we're up against is economic ignorance.

    Consider this passage by Bastiat...

    If we now turn to consider the immediate self-interest of the consumer, we shall find that it is in perfect harmony with the general interest, i.e., with what the well-being of mankind requires. When the buyer goes to the market, he wants to find it abundantly supplied. He wants the seasons to be propitious for all the crops; more and more wonderful inventions to bring a greater number of products and satisfactions within his reach; time and labor to be saved; distances to be wiped out; the spirit of peace and justice to permit lessening the burden of taxes; and tariff walls of every sort to fall. In all these respects, the immediate self-interest of the consumer follows a line parallel to that of the public interest. He may extend his secret wishes to fantastic or absurd lengths; yet they will not cease to be in conformity with the interests of his fellow man. He may wish that food and shelter, roof and hearth, education and morality, security and peace, strength and health, all be his without effort, without toil, and without limit, like the dust of the roads, the water of the stream, the air that surrounds us, and the sunlight that bathes us; and yet the realization of these wishes would in no way conflict with the good of society. - Bastiat, Abundance and Scarcity
    Do you want two artichokes for the price of one? Do you want to save the life of two starving African children for the price of saving one? Do you want more public healthcare for less taxes?

    Everybody wants more for less...which is why we give our money to the organizations that do more with less. This is the key to abundance.

    Do taxpayers want more public goods for less taxes? Yes. Will they give their taxes to the government organizations that offer more public goods for less taxes? Yes. Will the outcome be an abundance of a wide variety of public goods that people value? Yes.

    There's no need to debate morality or debate whether the private sector can supply something more efficiently than the public sector can. Everybody wants more healthcare for less money. Let's allow taxpayers to decide for themselves whether government organizations or private organizations offer people more healthcare for less money.

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    Quote Originally Posted by Xerographica View Post
    There's no need to debate morality or debate whether the private sector can supply something more efficiently than the public sector can. Everybody wants more healthcare for less money. Let's allow taxpayers to decide for themselves whether government organizations or private organizations offer people more healthcare for less money.
    That choice is not available for the taxpayer. If the government decides to provide healthcare then the taxpayer has to pay for that even if he felt a private organisation to be the better choice. I really don't understand what you mean by taxpayers "to choose" alternatives? You talk as if taxation is voluntary.
    Last edited by mohassan; 11-13-2012 at 09:25 PM.

  13. #12

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    Quote Originally Posted by Xerographica View Post
    In other words...you wanted to discuss scarcity. Yet, when I brought up the idea of allowing taxpayers to consider the alternative uses of their limited funds...you wanted to discuss morality.
    I can't believe I had to double check to see who started this thread. You are incredibly rude, and completely off point.

    The OP wanted to discuss whatever it was he said he wanted to discuss from the outset, which has XERO, XIP, NADA to do with your attempted hijack of his thread with your favorite COMPLETELY OFF-POINT meme. If you want a discussion to center around your pet paradigm of a "public sector shopping mall", and all that is wonderful about that in your mind, there is no need to hijack a thread that has NOTHING TO DO WITH THAT. YOU CAN START YET ANOTHER THREAD ON THAT PARTICULAR SUBJECT.

  14. #13

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    Quote Originally Posted by Steven Douglas View Post
    This dynamic is changed by the addition of more buyers of like goods and services that might not otherwise have existed had a local make-work project not existed. So while the increased demand is seen as a windfall for the local grocer or baker, the population overall will suffer a shortfall, as the local price of goods and services are bid upward through greater artificial demand.

    In other words, you're not just paying people to work on a bridge--you are also giving them the means to bid against you for like goods in the market.
    Did I understand you here correctly.

    Because the private sector might not have built the bridge, less people would be working, therefore less people buying both in the construction sector (materials for the bridge) and workers who could spend their wages to buy food, petrol etc?

    But because the government decides to build a bridge, money is spent back into the private sector, creating this "artificial demand" that perhaps might not have existed had people not been taxed?

    Do you mean artificial demand because public programs were not perhaps the choice of the consumers?

    Sorry if I didnt understand you.

  15. #14

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    Quote Originally Posted by Steven Douglas View Post
    I can't believe I had to double check to see who started this thread. You are incredibly rude, and completely off point.

    The OP wanted to discuss whatever it was he said he wanted to discuss from the outset, which has XERO, XIP, NADA to do with your attempted hijack of his thread with your favorite COMPLETELY OFF-POINT meme. If you want a discussion to center around your pet paradigm of a "public sector shopping mall", and all that is wonderful about that in your mind, there is no need to hijack a thread that has NOTHING TO DO WITH THAT. YOU CAN START YET ANOTHER THREAD ON THAT PARTICULAR SUBJECT.
    He wanted to critique Hazlitt...so I shared tax choice with him...which is the economically sound compromise between Hazlitt's approach and his own. Whether or not he wants to discuss the basic relationship between scarcity and choice is up to him. If he chooses to then then so be it.

    And if you don't like my posts...awwwww...that's really too bad. Here...let me offer a few *sniffles* *sniffles* for you. If it will help you're welcome to take your anger out on my reputation...LOL

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    Either the free market, left alone, would also have invested in this selfsame enterprise, or it would not. If it would have, then the economy suffers, at the very least, from the “take” going to the intermediary bureaucracy. If not, and this is almost certain, then it follows immediately that the expenditure on E is a distortion of private utility on the market—that some other expenditure would have brought greater monetary returns. - Murray Rothbard

    What, then, is the productive contribution of government? Since the value of government is not gauged on the market, and the payments to the government are not voluntary, it is impossible to estimate. It is impossible to know how much would be paid in to the government were it purely voluntary, or indeed, whether one central government in each geographical area would exist at all. Since, then, the only thing we do know is that the tax-and-spend process diverts income and resources from what they would have been doing in the “private sector,” we must conclude that the government’s productive contribution to the economy is precisely zero. Furthermore, even if it be objected that governmental services are worth something, it would have to be noted that we are again suffering from the error pointed out by Bastiat: a sole emphasis on what is seen, to the neglect of what is not seen. We may see the government’s hydroelectric dam in operation; we do not see the things that private individuals would have done with the money—whether buying consumers’ goods or investing in producers’ goods—but which they were compelled to forgo. In fact, since private consumers would have done something else, something more desired, and therefore from their point of view more productive, with the money, we can be sure that the loss in productivity incurred by the government’s tax and spending is greater than whatever productivity it has contributed. In short, strictly, the government’s productivity is not simply zero, but negative, for it has imposed a loss in productivity upon society. - Murray Rothbard

  17. #16
    Contributing Member Henry Rogue's Avatar
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    http://host.madison.com/business/epi...a4bcf887a.htmlThis Woman payed for a couple of bridges ramps and roads on a freeway to access her campus.
    "When goods do not cross borders, soldiers will." Frederic Bastiat


    Peace.

  18. #17

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    Quote Originally Posted by mohassan View Post
    That choice is not available for the taxpayer. If the government decides to provide healthcare then the taxpayer has to pay for that even if he felt a private organisation to be the better choice. I really don't understand what you mean by taxpayers "to choose" alternatives? You talk as if taxation is voluntary.
    You're describing the current system while I was describing a tax choice system. In the current system taxpayers purchase a generic bundle of public goods. They end up paying for public goods which they do not want, need or value. In a tax choice system taxpayers would be able to choose which government organizations they gave their taxes to.

    Therefore, paying taxes would not be voluntary...but people would be able to choose which public goods they wanted to help fund.

    The trick here is to imagine what the consequences would be. What would be the consequences of creating a market for public goods? Well...what have the consequences been when planned economies have transitioned to market economies? The variety of available products/services have gone up and prices have gone down. In other words...the consequences have always been abundance. Why wouldn't the same thing happen in the public sector?

  19. #18

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    Quote Originally Posted by Xerographica View Post

    Therefore, paying taxes would not be voluntary...but
    You could have wrote anything after the "but", and I would still have to disagree. Your tax choice system assumes that the taxpayers would be interested in any one of the available public projects. But even with your tax choice system, Hazlitt's answer stands, that taxation for a public program means that, that much capital is taken from private hands, that could have just as well been used to stimulate the economy if not more efficiently.
    Last edited by mohassan; 11-13-2012 at 10:16 PM.

  20. #19

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    Furthermore, even if it be objected that governmental services are worth something, it would have to be noted that we are again suffering from the error pointed out by Bastiat: a sole emphasis on what is seen, to the neglect of what is not seen. We may see the government’s hydroelectric dam in operation; we do not see the things that private individuals would have done with the money—whether buying consumers’ goods or investing in producers’ goods—but which they were compelled to forgo. - Murray Rothbard
    This really hits the nail on the head. People obviously DO argue that governmental services are worth something. Yet, the error pointed out by Bastiat...in his essay on The Seen vs the Unseen...is fundamentally important for people to understand.

    Unfortunately, Rothbard never considered...or at least he didn't mention...the idea of allowing taxpayers to choose which government organizations they gave their taxes to. Therefore...he went around arguing that we should just throw the baby out with the bath water. Well...that's how his argument sounds to the large majority of people.

    That's why tax choice is so important. It can help us get our foot in the door. We're not making the argument that we should get rid of the government services that the large majority of people value...we're arguing that they should have the freedom to use their taxes to support whichever government organizations they value most.

  21. #20

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    Quote Originally Posted by mohassan View Post
    You could have wrote anything after the "but", and I would still have to disagree. Your tax choice system assumes that the taxpayers would be interested in any one of the available public projects. But even with your tax choice system, Hazlitt's answer stands, that taxation for a public program means that, that much capital is taken from private hands, that could have just as well been used to stimulate the economy if not more efficiently.
    You're not telling me anything that I don't already know. I've written more about Bastiat's Seen vs the Unseen than anybody else on this forum. If you don't believe me you're welcome to visit my blog...pragmatarianism...and check out my tag cloud. You'll clearly see that the opportunity cost concept is the subject that I've written the most about.

    It's because I understand the opportunity cost concept so well that I understand the value of tax choice.

    Now, I didn't have much success explaining to you what the outcome would be of implementing tax choice. So please go right on ahead and explain exactly what would happen if taxpayers could consider the opportunity costs of their tax allocation decisions. Would the consequences be positive, negative or neutral?

  22. #21

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    Quote Originally Posted by mohassan View Post
    Did I understand you here correctly.

    Because the private sector might not have built the bridge, less people would be working, therefore less people buying both in the construction sector (materials for the bridge) and workers who could spend their wages to buy food, petrol etc?

    But because the government decides to build a bridge, money is spent back into the private sector, creating this "artificial demand" that perhaps might not have existed had people not been taxed?

    Do you mean artificial demand because public programs were not perhaps the choice of the consumers?
    Yes, that last sentence, choice being the operative word. Anything funded by forced extraction (mandatory taxes) is a fundamental shift of one thing at the expense of another (even if private capital formation alone), and therefore an artificial market distortion.

    It doesn't matter if there was some choice in allocation so long as "ZERO ALLOCATION TO ANYTHING" is not offered as a choice, and likewise, whether or not the fruits of a forced extraction are deemed valuable by anyone at all is wholly irrelevant to the fact that a fundamental SHIFT has occurred, and by force within the economy (as one thing is artificially mandated at the expense of others). This shift would not have otherwise occurred in the absence of that force.

    If the private sector builds a bridge, similar dynamics could occur, but only with 100% willing participants on the finance/demand side, so no artificial distortion. All of that occurs in a free market that is fair game to any and all willing participants, supply and demand side.

    Also, no assumptions are made with regard to the number of people working, or even where they came from. If I own a large private firm, and set up shop and put locals to work, I might also end up bringing new locals into the local economy. I might import all the labor, and put no locals to work. Whatever the case, my objective is only to offer goods or services at a profit, not to provide employment to anyone, which is wholly incidental. I may well cause competition to suffer, and I might even cause commonly used goods and services to be bid up before it is corrected with more competition for the supply of those goods and services. None of that matters, because as long as I am responsible for all the funding, all of the risks and rewards are mine, and the effects on various people's economies, beneficial or adverse, are mine to bestow or inflict, as the case may be, as a matter of right.

    In the case of a work project, like a bridge, the element of choice (from whatever portion of the market would have made different choices, had the option to abstain been present) is DESTROYED--at the expense of something else that will not exist as capital in some other form.
    Last edited by Steven Douglas; 11-13-2012 at 11:11 PM.

  23. #22

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    Quote Originally Posted by Xerographica View Post
    Now, I didn't have much success explaining to you what the outcome would be of implementing tax choice. So please go right on ahead and do my job for me instead, as you explain exactly what would happen if taxpayers could consider the opportunity costs of their tax allocation decisions.
    There, I fixed it for you.

    Your proposal will be meaningless without the inclusion of "None of the above" as an option. Even if you had the option, "Government must save this money, which many NOT be spent, but will be allocated by me at some later date," then there would still be a market distortion, as funding that is EXTRACTED BY FORCE may no longer go to what is unseen. However, if there was a portion that could theoretically be accrued indefinitely, never allocated to anything at all, then you might be onto something, as the public sector would then more resemble what actually happens in the private sector, since SAVING WITHOUT SPENDING is a VERY IMPORTANT OPTION.
    Last edited by Steven Douglas; 11-13-2012 at 11:26 PM.

  24. #23
    Contributing Member Henry Rogue's Avatar
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    Compared to the current tax system, positive. Can't wait till we get to "Thr Curse of Machinery". By the way mohassan you have started some great threads in the short time you've been here.
    "When goods do not cross borders, soldiers will." Frederic Bastiat


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  25. #24

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    Quote Originally Posted by Steven Douglas View Post
    There, I fixed it for you.

    Your proposal will be meaningless without the inclusion of "None of the above" as an option. Even if you had the option, "Government must save this money, which many NOT be spent, but will be allocated by me at some later date," then there would still be a market distortion, as funding that is EXTRACTED BY FORCE may no longer go to what is unseen. However, if there was a portion that could theoretically be accrued indefinitely, never allocated to anything at all, then you might be onto something, as the public sector would then more resemble what actually happens in the private sector, since SAVING WITHOUT SPENDING is a VERY IMPORTANT OPTION.
    There is no "unseen" for each individual taxpayer...you can't spend your money on something that you aren't aware of. If somebody chooses to save their money it's simply because their future spending is a more urgent priority than their present spending is. In other words...you save up for a rainy day...unless it's raining today.

    In a pragmatarian system...taxpayers will have far more spending opportunities in the private sector than they will in the public sector. As you love to point out...they won't have the option to save their tax money. But neither will they have the option to spend their taxes on booze, hookers, or whatever inputs they need to eliminate bottlenecks from their businesses.

    Does the fact that a baker can't save his taxes or spend his taxes on a new oven or more baker racks or a new employee diminish the positive impact of tax choice? Not even in the least bit. Because we really really really really really want Mr. Baker to understand what he is being forced to sacrifice. The point of pragmatarianism is to open taxpayers' eyes.

    In the first place, justice always suffers from it somewhat. Since James Goodfellow has sweated to earn his hundred-sou piece with some satisfaction in view, he is irritated, to say the least, that the tax intervenes to take this satisfaction away from him and give it to someone else. Now, certainly it is up to those who levy the tax to give some good reasons for it. We have seen that the state gives a detestable reason when it says: "With these hundred sous I am going to put some men to work," for James Goodfellow (as soon as he has seen the light) will not fail to respond: "Good Lord! With a hundred sous I could have put them to work myself." - Bastiat

  26. #25

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    Quote Originally Posted by Xerographica View Post
    There is no "unseen" for each individual taxpayer...you can't spend your money on something that you aren't aware of.
    Well, since you obviously lack even the most rudimentary understanding of Bastiat's Broken Window parable, let me take this opportunity to share it with you. Pay attention to the part I put in bold, and special attention to the part I put in red.

    Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son has happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

    Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

    Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

    But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."

    It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.
    Note that at the end of Bastiat's broken window fallacy parable, there is no more than a speculative attempt to describe what the shopkeeper would/could have spent his money on had it not gone toward fixing the broken window. As an individual shopkeeper, he is very much analogous to an individual taxpayer, who does indeed have the "unseen" element of a six francs taken from him, which would have gone to something else--something which not even the shopkeeper need be aware of.

    For EVERY individual taxpayer there is something "unseen", which does not even have to be identified, nor does the individual have to a specific awareness for that "unseen" (EVEN TO HIM) to exist. It does not matter where the money would have been spent, or even IF IT WOULD HAVE BEEN SPENT. It is "unseen" precisely because it can no longer happen using that particular money that went for something else.

    In a pragmatarian system...taxpayers will have far more spending opportunities in the private sector than they will in the public sector.
    RUBBISH. False on its face. Far less money for spending in the private sector automatically equates to far less spending opportunities in that same sector.

    As you love to point out...they won't have the option to save their tax money.
    And as you are loathe to point out, not even the option to make the choice for government to save.

    But neither will they have the option to spend their taxes on booze, hookers, or whatever inputs they need to eliminate bottlenecks from their businesses.
    Oh, how "it's-for-their-own-good" of you. So you're saving people from themselves, eh?

    "See folks, taxing you eliminates bottlenecks from your businesses!"

    Well, why didn't you say so before?! That should resonate nicely with libertarians, who, as we all know, are just clamoring for a government to save them from themselves.

    Does the fact that a baker can't save his taxes or spend his taxes on a new oven or more baker racks or a new employee diminish the positive impact of tax choice?
    Compound question fallacy. If you get to choose between would-be thieves, does the fact that you were stolen from, and can no longer spend that money as you see fitting, diminish whatever positive impact there might be of being able to choose which thief your money goes to? Which of course, is an attempt to slippery-ooze past the fact that there would be a far more positive impact had no theft occurred in the first place.

    That's like telling me that a mafia don who promises to protect me from other thieves is preferable to a thug on the street. How about we throw that stinking false choice into the sewer where it belongs, and all thieves--good/bad/value-returning/non-value-returning--can all go fuck themselves?

    The point of pragmatarianism is to open taxpayers' eyes.
    You misspelled purses, wallets and bank accounts. The entire proposed system is BLIND to those taxpayers whose eyes are indeed opened--to the fact that NOTHING that they would ever freely choose even exists.

    Like I said, if the option for individuals to save (not be forced to pay anything or make any false choice at gunpoint) does not exist, but the option to force government to save did, the very existence of a NO CONFIDENCE TO ANY GOVERNMENT AGENCY vote would be at least a beginning of the effect you're looking for, but would would not exist in the regime you propose. There is ABSOLUTELY NOTHING FREE MARKET about a "Favorites Take All" Idiocy regime, wherein the absolute lunacy of a constant flood of revenue that is absolutely guaranteed in the aggregate, the only question being who the lucky pandering favorites are going to be. That's not pragmatic, and it's not a free market. It's absolute rubbish.
    Last edited by Steven Douglas; 11-14-2012 at 12:58 AM.

  27. #26

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    Quote Originally Posted by Steven Douglas View Post
    Well, since you obviously lack even the most rudimentary understanding of Bastiat's Broken Window parable, let me take this opportunity to share it with you. Pay attention to the part I put in bold, and special attention to the part I put in red.
    Yeah, you completely misread my post. Let me try again. Mr. Baker depends on numerous inputs for the successful operation of his bakery...flour, salt, sugar, butter, ovens, baker racks, employees and so on. As all liberals and libertarians will argue...he also depends on inputs from the public sector as well. As a side note...for the sake of facilitating communication...I don't lump anarcho-capitalists under the libertarian umbrella.

    Here's what Ms. Congresslady had to say about the importance of public sector inputs...

    I hear all this, you know, “Well, this is class warfare, this is whatever.”—No! There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along. - Elizabeth Warren
    As a pragmatarian my argument has two parts...1. Mr. Baker knows far better than Ms. Congresslady which public sector inputs he needs and 2. he has a far greater incentive than she does to eliminate public sector bottlenecks. Why? Because his bottom line depends on it.

    The fact of the matter is...there's absolutely no need for me to try and dissuade people of their belief that Mr. Baker depends on public sector inputs. Can Mr. Baker utilize private roads to transport his goods? Yes? Great...he won't see any need to give his taxes to public roads. Can Mr. Baker teach new employees all the skills they need to work for him? Yes? Great...he won't see any need to give his taxes to public education. Can Mr. Baker hire private security people to prevent theft and fight fires? Yes? Great...he won't see any need to give his taxes to police and firemen.

    This is why there's absolutely no need for anarcho-capitalism...or even libertarianism or liberalism. There's simply people who understand how and why markets work...aka pragmatarians...and then there's everybody else.

  28. #27

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    Quote Originally Posted by Xerographica View Post
    Yeah, you completely misread my post. Let me try again.
    I know, as attacks on the very legitimacy and premise of your question have distracted you from the meat of the "pragmatarian" sales pitch you'd like to get on with.

    Mr. Baker depends on numerous inputs for the successful operation of his bakery...flour, salt, sugar, butter, ovens, baker racks, employees and so on. As all liberals and libertarians will argue...he also depends on inputs from the public sector as well.
    "inputs" - what a convenient choice of words, and how very appealing to all fact-obfuscating, reality-jumbling, aggregate-thinking collectivists everywhere.

    FedEx to China is one of the "inputs" to my business, just as a fire and police departments are also "inputs" to my business? Great...now that we've jumbled everything up nicely, and are firmly prepped for the leftist "YOU DIDN'T MAKE THAT ALONE! YOU DEPENDED ON HELP!" slippery slope, let's allow Ms. Congresslady to blow smoke up our collective asses as we go down that ride:

    Here's what Ms. Congresslady had to say about the importance of public sector inputs...

    You moved your goods to market on the roads the rest of us paid for.
    You hired workers the rest of us paid to educate.
    You were safe in your factory because of police forces and fire forces that the rest of us paid for.
    You didn’t have to worry [about blah blah blah] because of the work the rest of us did.

    - Blithering Fallacious Collectivist Excerpts from Elizabeth Warren
    News Flashes to Elizabeth (and Zero):

    1) There is no You VS. The Rest of Us - that is a fiction. You cannot separate a single "You" from "The Rest of Us", as if one was taking benefit from what "The Rest of Us" paid for.
    2) Equal opportunity does not equate to equal benefits or entitlements. Opportunities to access to common goods and services DOES NOT, NOR SHOULD IT EVER, equate to equal benefits derived. If the state provides a common exercise facility - with track, gym, weights, showers you name it (common road, common police, common utilities, common defense, or anything at all) with equal access OPPORTUNITY to EVERYONE, and someone uses that facility to gain extra health, or run a mile in under four minutes, while another only sits back, but is still forced to pay for the track but NEVER uses it -- TOUGH SHIT. S/he is owed NOTHING. To point to another athlete and say, "I HELPED YOU WITH YOUR HEALTH!" does not entitle you to any of their health. Only vampires and blood-sucking parasites even think with that mindset.
    3) Common Goods and Services ARE NOT FOR STATE PROFIT. Stop putting the government into a CORPORATE framework as though we were all shareholders in a FOR PROFIT firm. WE ARE NOT COMMUNISTS OR FASCISTS, and THE STATE IS NOT A FIRM.
    4) IF we are stupid enough to view the state as a firm, then let the state operate in a STRICTLY PERFECTLY COMPETITIVE FREE MARKET. That means ZERO SUBSIDIES, ZERO REVENUE GUARANTEES, ZERO BAILOUTS. If you can't hang with your competition -- YOU CAN DIE. You want to talk pragmatic? There it is. Take the protectionist diaper off of the public sector. There is no guaranteed PIE that is gathered in by force for them to all compete for, but is guaranteed to exist. Let each part of them sink or swim, and if none of them can hang, let them all die a well-deserved death.

    As a pragmatarian my argument has two parts...
    1. Mr. Baker knows far better than Ms. Congresslady which public sector inputs he needs and

    Bullshit, and all because you did not acknowledge the most pragmatic fact of all and that is that Mr. Baker "knows far better than Ms. Congresslady" (or you) that he may indeed have EXTREMELY LIMITED needs for anything at all from the public sector.

    2. he has a far greater incentive than she does to eliminate public sector bottlenecks. Why? Because his bottom line depends on it.
    Bottlenecks FOR WHAT, exactly? If your entire public sector shopping mall menu sucks complete ass, and offers NOTHING desirable, that information is Very Important. Why would I want to reward the lesser of many Sucks Total Ass Evils, and turn that into some creepy behemoth? If I go to a beauty pageant, and it is full of nothing but beasties, the fact that one was crowned at the end is MEANINGLESS.


    The fact of the matter is...there's absolutely no need for me to try and dissuade people of their belief that Mr. Baker depends on public sector inputs.
    Why would you try to dissuade anyone of that belief, since it is your belief--the very premise from which you are arguing--which goes hand in hand with your treatment of the state as if it was a firm.

    Can Mr. Baker utilize private roads to transport his goods? Yes? Great...he won't see any need to give his taxes to public roads. Can Mr. Baker teach new employees all the skills they need to work for him? Yes? Great...he won't see any need to give his taxes to public education. Can Mr. Baker hire private security people to prevent theft and fight fires? Yes? Great...he won't see any need to give his taxes to police and firemen.
    Great...now add to that:

    Can Mr. Baker, upon looking at all the public sector menu items, see no need to give ANY taxes to anything at all? Great...because now "his taxes" remain truly his, and nobody knows better than Mr. Baker how to allocate those more efficiently than does Mr. Baker himself. No need for any kind of forced false choice, and all of the MISINFORMATION that entails.
    Last edited by Steven Douglas; 11-14-2012 at 02:56 AM.

  29. #28
    Contributing Member Henry Rogue's Avatar
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    Quote Originally Posted by Xerographica View Post
    As all liberals and libertarians will argue......I don't lump anarcho-capitalists under the libertarian umbrella.
    Probably shouldn't lump liberals under the libertarian umbrella either since they're commu-fascist socialist, unless you mean Classical Liberalism.
    "When goods do not cross borders, soldiers will." Frederic Bastiat


    Peace.

  30. #29

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    Quote Originally Posted by Xerographica View Post
    tax choice
    what an interesting, and completely ridiculous phrase given the context in which you use it.

    choice implies the ability to make ones own decision. you are not promoting a true 'choice', as your options are very fixed and very limited. choice would imply i could pay the taxes, not pay the taxes, pay only a portion, pay the full amount with reservations, or any other number of things of my own volition.

    what you're really promoting is some sort of 'tax preference' in which YOU decided my options ahead of time, and I am forced to agree with one of them.

  31. #30

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    Quote Originally Posted by Steven Douglas View Post
    Can Mr. Baker, upon looking at all the public sector menu items, see no need to give ANY taxes to anything at all? Great...because now "his taxes" remain truly his, and nobody knows better than Mr. Baker how to allocate those more efficiently than does Mr. Baker himself. No need for any kind of forced false choice, and all of the MISINFORMATION that entails.
    If Mr. Baker is not happy with the return on his tax investment...and Mr. Baker is not alone...then what happens? You haven't even thought it through that far. Can you? Give it a try. If taxpayers are allowed to shop for themselves in the public sector...and they all feel like they are getting ripped off...then what happens?

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