A subject which brings us to this post at Don Luskin's blog:
BRAD DELONG'S CONCEPTION OF PROPERTY RIGHTS From a column by Jabba the Economist in the Miami Herald:On this matter I would like to present both moral and practical aspects. An post in the Market Center Blog states this:Bill Gates, Paul Allen, Steve Ballmer and the other millionaires and billionaires of Microsoft are brilliant, hardworking, entrepreneurial and justly wealthy. But only the first 5 percent of their wealth can be justified as an economic incentive to encourage entrepreneurship and enterprise. The next 95 percent would create much more happiness and opportunity if it were divided evenly among U.S. citizens or others than if they were to consume any portion of it.So the entitlement that hard-working Americans can claim to the fruits of their labors requires being "justified" on the grounds of incentives? How about "justifying" it on the grounds of freedom? What possible argument in favor of stripping away property rights can come from Brad DeLong's opinion, or anyone else's, that some fraction of those fruits would make other people happier than it makes its creators? I am most assuredly not concerned with the happiness it gives Brad DeLong to appoint himself the arbiter of everyone else's happiness, and to imagine the thrill of the power that would come with deciding how everything should be distributed to maximize that happiness. Let DeLong create something of value for once in his life, and let him be in charge of distributing that.
Thanks to reader Mike Mitchell for the link.
Update... a reader who asks for anonymity thinks the headline for this post should have been "Brad DeLong's Conception of Calorie Rights," and he suggests the following rewrite:Brad DeLong and other overweight economists earn good money from public institutions and are big eaters and obese. But only the first 50 percent of their calories can be justified as a dietary requirement for healthy living. The other 50 percent would create much more happiness and opportunity if it were provided to starving U.S. citizens or others than if they were to consume any portion of it.Update 2 [2/2/2007]... Reader Forbes Tuttle makes a good observation:In taking up the subject of the Microsoft Millionaires, but especially the billions of Gates, Allen, and Ballmer, whose wealth is a result of the appreciation of Microsoft's market capitalization, DeLong is proposing the policy of a 95% tax on capital (wealth). As class warfare, this may get some juices flowing, but as economic policy, this puts DeLong's party--the Democrats--in league with Karl Marx, who preferred 100% of the capital to be in the hands of the state. As regards the consequences of such a policy, I'd suggest DeLong's 95% tax on wealth is a distinction without a difference, when compared to Marx's 100% state control.
First, the socialist candidate for the French presidency accuses Switzerland of "looting" its neighbor. But this implies that individuals belong to the government and that they do not have the individual freedom and sovereignty to choose where they want to live. Second, the European Union's Ambassador to Switzerland argues that low tax rates are a subsidy. This argument implies that income belongs to government and it creates a moral equivalence between an interest group that seeks to seize other people's wealth through the political process and taxpayers who merely want to keep more of their own money.
Along a similar vein Perry Eidelbus includes this at his blog:
As Walter Williams has said, "No matter how worthy the cause, it is robbery, theft, and injustice to confiscate the property of one person and give it to another to whom it does not belong." This thinking originated in Bastiat's The Law, in which he declared, "When a portion of wealth is transferred from the person who owns it—without his consent and without compensation, and whether by force or by fraud—to anyone who does not own it, then I say that property is violated; that an act of plunder is committed."
Make a practice of taking away outsized gains, under any justification you wish, and see how much risk taking and progress remains... bright energetic people will focus on taking existing wealth rather than creating new wealth. They might team up with ruthless types to help them hold on to what they can or they will just leave the country.
Also, would you rather see private and social entreprenuers tackle tough problems with their wealth or place it in the hands of politicians and bureaucrats?