Friday, August 19, 2011

Quote of the Day, Jr.


"Conservatives view taxation as a species of theft—and to raise taxes, on anyone for any reason, is simply to steal more. Conservatives also believe that people become rich by creating value for others. Once rich, they cannot help but create more value by investing their wealth and spawning new jobs in the process. We should not punish our best and brightest for their success, and stealing their money is a form of punishment. Of course, this is just an economic cartoon. We don’t have perfectly efficient markets, and many wealthy people don’t create much in the way of value for others. In fact, as our recent financial crisis has shown, it is possible for a few people to become extraordinarily rich by wrecking the global economy."

-- Sam Harris, author of The End of Faith, in a thoughtful piece called "How Rich Is Too Rich?"

7 comments:

Grayson: Atlanta, GA said...

Trying hard to think of a rich person I know who's created *value.* I'll have to get back to you on this.

Michael said...

To play the devils advocate here Grayson: Atlanta, GA Look at Bill & Melinda Gates foundation. They have given away VAST sums of wealth. Just because you did not personally get to dip in at the cash buffet does not mean they have not created any value.

Although we should tax the shit out of the uber rich.

Anonymous said...

However, the quote states that people get rich *by* creating value. Bill Gates, while definitely deserving props for turning to philanthropy, did not become rich through his foundation.

Anonymous said...

I believe it was George Carlin who said “Everyone believes two things: 1) they have a great sense of humor and 2) they are a good driver.”
I would like to add a third and fourth: 3) they work hard and 4) they earn every dollar they make. Much of the argument against “wealth redistribution” is based on those who work hard are wealthy; those who do not are poor. The fact is that a “few million” put into a low interest savings account yields in interest (even at today’s rates) an income twice the national average for personal income. Imagine what happens when the money goes into more aggressive investments. Either way, once a person reaches a certain level of wealth, they can grow their fortunes significantly with little effort.
Take Harris’s example of Steve Jobs and Apple. He didn’t create much value the first go around at Apple. I’d like to see the final tally of venture capital he blew creating produces no one wanted. We could argue whether the eventual success of the IPod was more luck, persistence, or hard work. The simple fact is, not all success is the result of intentional directed effort and neither is all failure. I know many people working 60 hours a week for $20,000 a year and people who work 35 hours a week for $80,000.
What exactly is this “value” that is created? Is it really just a consumer good or service that people tend to like right now? That is one heck of “pro-prostitution” argument. I’d like to think a road crew fixing a pot holed street creates value to all who drive. They certainly are creating value for Walmart who’s just in time supply chain needs good infrastructure to work. What about the efforts of teachers, nurses, police officer’s, etc. etc? Do their efforts create no value? Conversely, I don’t know what kind of value is created with $30,000 dollar a night hotel rooms in Las Vegas, building another golf course, or subdividing a 100 acres to build new second homes in a gated community. If the spending of the wealthy is what creates value and jobs, are defense contractors are allowed to start wars to grow their business?
I think we really need to examine our view about wealthy, its origins, and who is really a “value generator” before we make arguments pro- or anti- tax to the upper percentile of America.

Eric said...

@anonymous 8:52 a.m.

Actually, I agree with Harris' example: Jobs created value at Apple initially by (along with Steve Wozniack) turning a (literally) garage-based computer kit company into the home PC business, a development that took IBM and HP by surprise and had them and other hardware vendors scrambling to enter two markets (home computing and primary education) which they hadn't really even believed existed before the Apple II arrived. Jobs also can be credited (if somewhat ironically) for seeing the consumer applications of the PARC labs' work--the graphic user interface, the mouse, LAN networking, WYSIWYG interfaces, et al.--that PARC's parent, Xerox, couldn't see practical applications for (which is why Xerox showed them to people like Steve Jobs instead of cornering the market on modern personal computing). When Jobs was booted from Apple, his projects included Pixar and, perhaps more importantly, NeXT, the latter of which he brought back to Apple when he returned, where it became the basis for OSX; Jobs isn't a programmer and NeXT/OSX aren't necessarily innovative OSes, but that's not really what Jobs has ever done, even going back to that garage with Woz (who built and programmed those old Apple kits back in the day before the day): Jobs' brilliance is in putting other people's ideas together and bringing them to the public in ways that make them seem inevitable even when the actual creators thought they were niche products or novelties (c.f. there are two major *NIX-based operating systems in wide use: OSX and Linux; which one of those is a hip, easy popular fashion statement and which one is a nerdy fringe product?).

Even so, it is morally right that Jobs ought to pay higher taxes. Sure, he's earned his money; but this is something he was able to do because he received the benefits that go along with living in a stable, functioning republic in which there are good roads, an educated and mostly healthy public, and little chance of a revolution or invasion. He has benefited more than most people from the civilization he inhabits, and he had more to lose than most people and he has more to lose if it all goes to hell. So I do agree with your larger point, Anonymous; it's just that I'm also a really huge nerd.

Anonymous said...

I recently had an interesting conversation with my older sister. She has a PhD in music, classically trained on a variety of instruments. She can create the most breathtaking music on the oboe. But much to her annoyance, I make more money as an intern with the Department of the Army, while working on my undergraduate for mechanical engineering than she ever has touring with an orchestra. In her mind, its utterly insane that talented musicians and artists for the most part make pennies for what takes years and years to perfect where as engineers, chemists, doctors, and the like will make much better.

But at the same time, how her car works is an utter mystery to her. She has no clue why water comes out of her tap or where her waste goes once she flushes a toilet. To her, the mere cycle of life that is modern plumbing is utterly mundane...ignoring the simple fact that plumbing is responsible for pretty much every successful society on the history of the planet.

I run into this a lot with a lot of the kids I hang out with at school as I tend to dislike hanging out with engineers. Most of them think its utterly unfair that their political science, English, or history degrees are pretty much worthless unless they go to graduate school and even then, its still a crap shoot on whether or not they will ever end up in a field they spent massive amounts of money on.

There are a slew of issues facing America today, primarily in the fact that the US tax code is written in such a convoluted way that only those who can afford corporate attorneys manage to make headway. I think it is insane that my father, who owns his own business which has turn out pretty successful in the last few years, pays a much smaller percentage of his income in taxes than I do, as a student. But to hear him speak, he gets robbed every year. I guess I don't have the answers but to hear the notion that people will just pay more to the US government out of the goodness of their heart is insanely hilarious.

Anonymous said...

I get a bit miffed when people bring up Bill Gates and his charity work. You know, it's great that he gives back to various charities, but it's not like the guy came from humble beginnings. Dude had wealthy parents who were able to get him into private schools where he was able to use a computer. He, along with his buddies, hacked various programs so they could spend more time on the available computer, gaining access which, at the time, was not widely available. So, wealthy youth? Check. Illegal activity for personal advancement? Check. If a quarter of the world's population had the advantages that Gates had, we'd have genius philanthropists all over the place. So pardon me when I don't fawn all over Gates. He SHOULD give his wealth back to charities.

Now if only the other rich assholes would admit their luck in the genetic lottery and give some of their wealth to support charities there would be a lot less bitter people in the world.