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Conservatives love to quote Adam Smith, the Father of Capitalism . But I doubt that many of them have actually read his works. Adam smith extolled the free market in his seminal work, An Inquiry Into the Nature and Causes of The Wealth Of Nations. But he also talked about other contributors to national success then surely they agree with his views on other related subjects, like how government should be funded.

"The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state."

If it wasn't for all that government, and ultimately, the rest of the nation, the wealthy would not have been able to amass their riches. They should give back to the community.

"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich . . . . It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

"It must always be remembered, however, that it is the luxuries, and not the necessary expense of the inferior ranks of people, that ought ever to be taxed."

It is morally right to tax the wealthy more than the working class. How does that sound to the 'taxation is theft' crowd?

But this is not to say he favored all taxes. But he did think there were some taxes that were actually good. One was the aforementioned luxury tax. Another was a tax on land.

The ordinary rent of land is, in many cases, owing partly, at least, to the attention and good management of the landlord. A very heavy tax might discourage, too much, this attention and good management. Ground-rents, so far as they exceed the ordinary rent of land, are altogether owing to the good government of the sovereign, which, by protecting the industry either of the whole people or of the inhabitants of some particular place, enables them to pay so much more than its real value for the ground which they build their houses upon; or to make to its owner so much more than compensation for the loss which he might sustain by this use of it. Nothing can be more reasonable, than that a fund, which owes its existence to the good government of the state, should be taxed peculiarly, or should contribute something more than the greater part of other funds, towards the support of that government.

When he uses "rent" in this context, it is the  value that land contains. (derived, for the most part, from location, location, location). Most property taxes in the US are based on the total value of the property, composed of land and "improvements," improvements being structures, plants and other things.

There is a certain amount of rent (ie property value) that comes from the work of the owner: construction, maintenance, services. Smith believed that they were entitled to the fruits of their labor.

However, they are not entitled for that for which they did not create: it was created by others. Land in a major metopolitan area is not worth more than some rural backwater because someone is  a brilliant investor, it is worth more because of the things that exist in that are. Access to markets, labor, public transit or roads are all paid for by the people as a whole. Why should one person take the fruits of the community's labor?

Secondly, land is a subject which cannot be removed; whereas stock [capital] easily may. The proprietor of land is necessarily a citizen of the particular country in which his estate lies. The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country."

This is another important point. Capital flight is a problem in developing countries, and some people claim that it is a problem for high tax states in the US, such as California (although I do not believe there is empirical evidence supporting that). Regardless, that problem is solved by this tax.

"As it has no tendency to diminish the quantity, it can have none to raise the price of that produce. It does not obstruct the industry of the people ..."

"a tax upon the rent of land cannot raise rents, because the neat produce which remains, after replacing the stock of the farmer, together with his reasonable profit, cannot be greater after the tax than before it..."

The supply of land is inelastic (unchangeable), so the price is set solely by demand. Any tax would not reduce the supply, raise the price or create any deadweight loss.

A tax upon ground-rents would not raise the rent of houses; it would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. . . . In every country, the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground-rent.

Again, the price of land would not increase. The owner is currently charging as much as the market will bear for his land, either through the sale price or charging rent. He will not be able to charge anymore than that because the price is dependent on demand, not on supply.

In other words, a theoretical 100% tax on land would end up making the sale cost of land zero. The value of the land, which will still exist and is derived from the community, goes back to the community.

Of course in practice, the supply of land is not necessarily fixed. Different zoning laws change the maximum output possible on the land, and thus the value. But I have not heard any economist claim that this tax is worse than any other tax.

Most homeowners would not pay a large amount, because a larger proportion of the value of their property comes from the improvements on it compared to commercial real estate, whose value is substantially larger.

"For example, 10% of land owners (all corporations) in Baltimore, Maryland own 58% of the taxable land value"  

As an aside, there was even more stuff that has been ignored about Smith regarding government expenditures. I am not as knowledgeable about this aspect of Smith so I will leave it to this site:

For a very small expence the public can facilitate, can encourage, and can even impose upon almost the whole body of the people the necessity of acquiring those most essential parts of education."

19th century economist Henry George is the most famous proponent of this type of reform, which he called the single tax.

There is a lot more information on him here: The Progress Report

Originally posted to bay of arizona on Wed Oct 21, 2009 at 11:33 AM PDT.

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Comment Preferences

  •  Tip Jar (26+ / 0-)

    "Only vigilance and resistance to this baby dictator, Barack Hussein Obama, can prevent the Khmer Rouge from appearing in this country." Michael Savage

    by bay of arizona on Wed Oct 21, 2009 at 11:33:32 AM PDT

  •  Paine also favored inheritance taxes (6+ / 0-)

    "You can never guarantee victory, but you can guarantee defeat."--Hall of Fame baseball writer Leonard Koppett.

    by Dump Terry McAuliffe on Wed Oct 21, 2009 at 11:34:10 AM PDT

  •  He was very wary of the damage that monopolies (4+ / 0-)
    Recommended by:
    deben, freelunch, AdamR, Dar Nirron

    could do to the econommic system.

  •  OMG (10+ / 0-)

    The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities;

    Adam Smith was a communist!!!!!11111

    "The work goes on, the cause endures, the hope still lives, and the dream shall never die." - Ted Kennedy

    by Lazar on Wed Oct 21, 2009 at 11:40:41 AM PDT

  •  As with the Bible (9+ / 0-)

    so many of those who claim to believe in Adam Smith have never read the man.

    In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

    by blue aardvark on Wed Oct 21, 2009 at 11:41:09 AM PDT

  •  Wingnuttia blatantly ignorant of Smith's work (8+ / 0-)

    I wish we could exhume Smith and play out a scene much like that in Annie Hall where some blowhard is talking about Marshall McCluhan and Woody Allen produces McCluhan who tells said blowhard, you know nothing of my work, you are a complete ass." If only life could be so simple.

    •  Ignorant of the whole history of liberalism IMHO (1+ / 0-)
      Recommended by:
      DBunn

      After having tried to moderate some of the editing at wikipedia for a few weeks, I realized the debates weren't in good faith but about portraying this or that important figure as being a wingnut libertarian.

      A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. -Emerson

      by fitzov rules on Wed Oct 21, 2009 at 01:58:14 PM PDT

      [ Parent ]

    •  They also fail to understand Jesus or any history (0+ / 0-)

      Philosophical ignorance:
      Its clear to everyone outside Wingnuttia that the inhabitants of the aforementioned domain have either never really read the sayings of Jesus of Nazareth, or equally failed to comprehend what he was actually saying.

      Further historical ignorance:
      If you've seen FOX news with its "rogues" gallery of "Czars", accompanied by the stirring SOVIET anthem, you'll understand how bereft of history and common sense these people really are.

      A simple proposition:
      If only you had to answer a few simple questions before being allowed to vote - a kind of reality check.

    •  I agree (1+ / 0-)
      Recommended by:
      DBunn

      but I'm equally surprised by how little liberalism promotes and defends Adam Smith.  Having read "The Wealth of Nations", it is clear that Smith is not exactly a progressive's dream, but his work actually gives much better support to progressive stands than to conservative positions.  In spite of this, Smith is generally thought to be a scion of the right and is certainly ignored by the left.  Strange times.

    •  Hey I'd pay good money to see that. (1+ / 0-)
      Recommended by:
      DBunn

      Or even an actor playing Smith and reading from his work.

      I think also that Smith did not favor the movement of jobs and money between national borders. I guess this wasn't very possible anyway in the 18th century. But modern righties just overlay this "globalization is great" attitude onto Smith without knowing his true attitude.

      'Fair and balanced.' The Republicans take a lie and balance it with a truth, and sometimes they leave out the truth. -MinistryOfTruth

      by Late Boomer on Wed Oct 21, 2009 at 08:38:57 PM PDT

      [ Parent ]

  •  However... (2+ / 0-)
    Recommended by:
    freelunch, Dirk McQuigley

    The ignorant mouth breathers who follow Beck and his ilk won't believe it and won't even crack the book open anyway...

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White

    by zenbassoon on Wed Oct 21, 2009 at 11:41:48 AM PDT

  •  This Adam Smith fellow sounds like a socialist... (4+ / 0-)
    Recommended by:
    freelunch, ybruti, Praxxus, jfromga

    given the new definition of socialist is anyone with more compassion than someone with narcissistic-paranoid disorder.  And might I point out that Adam Smith was not born in America!  This whole free market idea is starting to look like some sort of socialist plot if you ask me.

  •  taxation is theft? (19+ / 0-)

    It is morally right to tax the wealthy more than the working class. How does that sound to the 'taxation is theft' crowd?

    To say that taxation is theft requires a particular view of the government and its spending program, which I don't think that this argument addresses.

    Smith seems to be assuming that taxes are used to provide public goods--which in turn provide more opportunities for the wealthy to earn money or enjoy life.

    A person who says that "taxation is theft" denies that taxes are funding public goods. If he uses this as an argument against progressive taxation, he probably thinks that tax revenues are just being turned into handouts for the poor -- apparently a response to the massive political clout of welfare moms.

    Others may say that taxation is theft, but not consider this relevant to the issue of progressive taxation because the main thieves are the super-rich who dominate the government and find plenty of ways to steal from everyone else even without relying on taxes.

    "Avoid extremes; forbear resenting injuries so much as you think they deserve." -Benjamin Franklin

    by AdamR on Wed Oct 21, 2009 at 11:54:54 AM PDT

    •  excellent comment (8+ / 0-)

      I especially like the one about the clout of welfare moms.   They don't have clout, never did, still don't now.

      And Smith is right about taxation being used for public good, especially education, as those who operate businesses benefit most from the educated pool of workers, who are purchasers and the stability of the populace that is employable, employed and feel secure in their lives, because they are then proponents of the status quo.

  •  your point (0+ / 0-)

    the top 1% pay 36.9% of federal tax (wealth 32.7%), the top 5% pay 57.1% (wealth 57.2%), top 10% pay 68% (wealth 69.8%), and the bottom 50% pay 3.3% (wealth 2.8%)

    and you point is???

    •  the point being (2+ / 0-)
      Recommended by:
      deben, SkylarkingTomFoolery

      the rich used to pay more and wealth distribution was more favorable though hardly confiscatory/redistributive overall.

      •  If to much taxes (0+ / 0-)

        are levied against the wealthy they will either leave the country (seeking citizenship in countries that would appreciate their entrepreneurialism) or the will just stop making money and live off of what they have.  It will be the middle class that will suffer.  Is the elimination of the bourgeoisie class part of the plan?

        •  That is a total farce... (1+ / 0-)
          Recommended by:
          Praxxus

          The upper marginal rates used to be 91%... was there a mass exodus???  No...  the idea that the insanely rich will take there ball and go home is really pathetic.

          This notion that they will just stop making money is very unimaginative.  They live for acquiring wealth.  It is what they do (like some people play softball or go fishing).  They play the market, invest, sell, etc.  That is not going away.  What is going away is the rules by which they play their favorite past-time.

          And even if they did just "stop"... you may be aware that someone else would fill in right behind them to make things happen.  The idea that we are just so lucky as a country to have the wealthy being all "entrepeneurail" for us, is just silly.  This nation does not rise on the whims of the wealthy... but it most certainly falls by them (see the S&L crisis of the 80s, the recession of 2008, the debacle of Supply-Side economics, the market crash of '29, and the Great Depression).

          And you presume being born into a wealthy situation, or making shrewd investments, or putting your money into tax havens somehow makes you an entrepeneur.  It s bogus.

          "If Bill-O collapsed into his own sphincter, like an imploding dark star, and disappeared forever...would we care?..." - Liberal AND Proud, Crooks and Liars

          by Rich Santoro on Wed Oct 21, 2009 at 01:17:20 PM PDT

          [ Parent ]

          •  They are in the UK (0+ / 0-)

            "The upper marginal rates used to be 91%"  Yea, I would work hard so I could pay a huge tax rate when others get paid to do nothing...NOT.  What you are saying is contrary to simple economic theory, think about it!  

            You should read up on the communities that are developing in the South Pacific and smaller countries in South America.  Why do you think that Obama is so set on closing offshore banking?  If I had money I would be out of here.  However, you need to have substantial money to get citizenship in these places.

            •  the reality is (0+ / 0-)

              there was no mass migration out of the US when the top marginal rates were at 91%.  Historical experience suggests it doesn't happen.  Past performance is a strong predictor though its not a guarantee.

              If all you care about is pocketing the most money that you can, that you will go wherever you get to keep the most of your income, why are you at this blog?   Did you get lost somewhere and mistake your left for your right?

            •  rich people would pay the same as their peers (0+ / 0-)

              Yea, I would work hard so I could pay a huge tax rate when others get paid to do nothing...NOT.

              Rich people would be paying the same tax rate as their peers (who they compete with for status), and most rich people don't even notice us poor slobs in the lower tax brackets.

              "Avoid extremes; forbear resenting injuries so much as you think they deserve." -Benjamin Franklin

              by AdamR on Wed Oct 21, 2009 at 05:40:22 PM PDT

              [ Parent ]

              •  who gets paid to do nothing? (0+ / 0-)

                Nobody gets paid for doing nothing--except those who live off of interest.

                "Avoid extremes; forbear resenting injuries so much as you think they deserve." -Benjamin Franklin

                by AdamR on Wed Oct 21, 2009 at 05:41:46 PM PDT

                [ Parent ]

            •  Theory??? (0+ / 0-)

              You may be aware that "In theory, there is no difference between theory and practice. But, in practice, there is."

              Meaning your texts books are nice and all, but the real world is quite a different animal.

              And you make my point entirely with this little nugget:  "If I had money I would be out of here.  However, you need to have substantial money to get citizenship in these places."

              So do you not have the money to do so, because you are lazy???

              No... it is because the rules of the game enable those with resources to apply them in ways to gain more, and protect the resources they have...  Those without, can eat cake while they struggle to break even.  You need to grow up...  Maybe after you get out of school you will have some sense.

              Now good day to you sir...

              "If Bill-O collapsed into his own sphincter, like an imploding dark star, and disappeared forever...would we care?..." - Liberal AND Proud, Crooks and Liars

              by Rich Santoro on Fri Oct 23, 2009 at 09:47:55 AM PDT

              [ Parent ]

        •  Oh please... (1+ / 0-)
          Recommended by:
          jfromga

          If they pack up their entrepreneurial ball and go somewhere else, someone else will step in to offer the service they have removed.

          Likewise if they "stop working" and live off of their wealth.  

          If they just sit on their wealth, it is doing very little for the greater good, which is what Smith seems to be all about anyway.  So they and their hoarded wealth can take a hike.

          Next question!

          Well shit, Obama won! Now I need to think of a new sig line.

          by Praxxus on Wed Oct 21, 2009 at 01:19:08 PM PDT

          [ Parent ]

          •  That’s quit an answer! (0+ / 0-)

            What you need to remember about economic theory is that it is based on simple economic models.  In reality the economic models has so many variables that most analysis prove to be wrong.  This is why so many economists can explain the past  (basically they’re Historians), but can't predict the economic future (a true Economist).  When you cite the "greater good" you are citing a simple economic model that leave leaving as a non-option.  That is not a realistic variable!

            •  Speaking of simple.... (1+ / 0-)
              Recommended by:
              AdamR

              I refuse to let someone who not too long ago put forth the ridiculous "poor = lazy, rich = hard working" argument criticize me or anyone else about grossly oversimplifying anything, let alone economics.

              Yeesh!

              Well shit, Obama won! Now I need to think of a new sig line.

              by Praxxus on Wed Oct 21, 2009 at 03:00:16 PM PDT

              [ Parent ]

            •  So what have you right-wingers predicted? (0+ / 0-)

              The collapse of 1929 under your rule?
              The subsequent half-century of prosperity under the New Deal consensus?
              The conversion of America into an outsourcing, union-busting, debt-driven rentier state by Ronald Reagan?
              The collapse of 2008 under your rule?

              Yes, SOAL, the rich can leave for other countries that cut taxes or treat their poor like dirt.  Ireland and much of southern and eastern Europe, under the influence of neoliberalism, tried those tax schemes, but ended up with rich idiots building up real estate and stock bubbles which collapsed along with our last year.  The rich refuse to move to the 3rd World countries where they sent our jobs, because those are horrible and dangerous places to live for the hated rich.  Even the jobs didn't stay in Mexico, and Latin America's poor are voting in socialists because of neoliberal failures.  The 3rd World countries that are scooping up all the jobs are the ones that spend money on education and public infrastructure: China and southeast Asia. Tax rates will not be going down in those countries, because there's nowhere else for the capitalists to flee to.

              So which right-wingers predicted that Communist China was going to become the engine of the global economy?

              •  Embrace big government! (0+ / 0-)

                The concept of "taking" is almost the definition of liberalism.  This is why you all embrace big government.  If you are rich – take your money,  if you are a bad parent take your kids, if you don’t pay your tax take your land, break the law – take years of your life!  Your shortsightedness is feeding the Government that will lead to your demise.  You fear big business and religion but are unable to give notable accounts of ultimate human exploitation made by these entities.  Yet, governments continue to take lives even today.  Big Governments are evil plain and simple.  Here are a few numbers people you might consider when you feel the need to give your Government more power.

                Mao Ze-Dong (China, 1958-61 and 1966-69, Tibet 1949-50) - 49,000,000

                Jozef Stalin (USSR, 1932-39) - 23,000,000 (the purges plus Ukraine's famine)

                Adolf Hitler (Germany, 1939-1945) - 12,000,000 (concentration camps and civilians WWII)

                Pol Pot (Cambodia, 1975-79) - 1,700,000

                Kim Il Sung (North Korea, 1948-94) - 1.6 million (purges and concentration camps)

                Menghistu (Ethiopia, 1975-78) - 1,500,000

                Jean Kambanda (Rwanda, 1994) – 800,000

                Tito (Yugoslavia, 1945-1987) - 570,000

                You can say "oh, not here!  We have a good Government." In reality your debt addicted government is setting us for economic collapse that may lead to...who knows what?

        •  why are the rich different than anyone else? (0+ / 0-)

          The issue here is how taxes are apportioned--if they aren't loaded onto the rich then they will be loaded on someone else and provide the same disincentives towards (legal) work.

          If the tax revenue is being spent wisely, then the rich will get their money's worth. If it is being wasted, then THAT is the problem, not who pays taxes.

          "Avoid extremes; forbear resenting injuries so much as you think they deserve." -Benjamin Franklin

          by AdamR on Wed Oct 21, 2009 at 05:37:36 PM PDT

          [ Parent ]

    •  The point is... (1+ / 0-)
      Recommended by:
      scotths

      50% pay 3.3% (wealth 2.8%)

      Do you see that???  The bottom 50% of the U.S. population only hold 2.8% of the wealth.  It was twice that before Reagan.  And that situation is trending down...  

      Moreover, the bottom half of that 50% (the bottom 25%) have no wealth at all.  They literally have no way out.  Relegated to life a poverty without bootstraps.  Born into a destitute environment with no where to go.  This has all been on a slide since 1984 (ironic???)

      The impoverished only have a 17% of making it up to being poor... and a 7% chance of becoming middle class someday.

      "If Bill-O collapsed into his own sphincter, like an imploding dark star, and disappeared forever...would we care?..." - Liberal AND Proud, Crooks and Liars

      by Rich Santoro on Wed Oct 21, 2009 at 01:06:11 PM PDT

      [ Parent ]

      •  Short-sided view! (0+ / 0-)

        Your insular perspective limits your view of reality.  You base your entire standards system on the concept of money.  That is not the case in reality.  Consider this:

        Would you agree that time is money and money is time?  If we are in agreement here this what I like you to consider:

        Lazy folks enjoy their time. They more time that they have the happier they are. In the worst case scenarios charities try to help them but they much more enjoy hanging-out, chatting and drinking. It is their "life choice" and that's OK. They don’t want/need people like you telling them how to spend their time. They are obviously happy with the life they have pursued.  

        Rich folks spend much of their life enduring nasty financial peak and valleys. Wealth is not won like a lottery, it is earned. These folks tend to neglect their families, their health and focus on their dreams of "making big". Some do, some don’t either way it take it toll on their livelihood.  However the vision makes them happy. These people tend to be very focused and have little time for anything but work. It is their life choice and that is OK. They don’t want/need people like you telling them how them how to spend their money that they have devoted so much time earning. They too, are happy with the life they freely pursued.

        Remember time is money. The wealthy have no time and the lazy have no money. It only seems like a natural answer that the wealthy gives the lazy money, hence, the lazy should give wealthy time.   Here is that answer: Make the lazy work and the wealthy will give them money!

        •  The hell planet are you from? (0+ / 0-)

          First of all, time = money is not a mathematical theorem.  Time is a measuring device used to indicate distance between events, as opposed to objects that we use spacial relations in describing.  Money, on the other hand, is a measuring device for the accumulation of services or products or resources to be delivered upon, and only has use within a define context in society.  While it is arguable that either may have no definition without someone to observe them, this single similarity is not enough to declare the two equal.

          More specifically, the phrase you use refers to the ability of one to spend his or her time in actions that allow them to accumulate money, but the two are again not directly correlated.  Moreover, generally, the more money one has already stockpiled the more money one can get out of their time.  This does not work at low levels- persons without a large cash supply will often see little return on invested time; persons with an already large held supply will see often a massive return with little time invested.  Moreover, since money is only available in a limited quantity, any amount taken in by one will decrease the amount available to others until that amount is spent- money flow works like a bloodstream, which we refer to as the 'economy.'

          Those who are considered working poor are rarely as lazy as you apparently stereotype them as.  Indeed many of invest a proportionately massive section of their time trying to obtain money to cover living expenses or other societal needs such as education or transportation.  However, these persons often are locked into low earning lifestyles due to other environmental concerns- lack of adequate education, difficulty of transportation, regional insularism, emergency expenses, simple lack of local resources, price gouging, and even repeated insistence on low expectations each take their toll, multiplying the effect of the other.

          In a similar vein, those who already command ample resources seek to retain those resources, specifically so they do not have to contend with the difficulties I have previously mentioned.  Moreover, the idea that all persons commanding these hordes of wealth have worked hard for them is laughable.  While a great deal of the wealthy did just that, many to most of the families at the top of the earnings bracket are there specifically because they expended their considerable resources amongst themselves- granting their friends and family access to higher education, lower living costs, and engaging in various other activities that allowed them to retain their resources or to use those resources in such a way as to prevent them from being diminished.  At the same time, in pursuing money, they are again depriving the rest of society of that same resource- of which, by definition, they already have more than they need.  You claim that wealth is not won like a lottery, when in many cases that is precisely what occurs to those fortunate enough to be born into families or societies that are able to allow or provide these things to an individual.

          Its okay, these are large, complex concepts and require a lot of thought and a good deal of practice and experience to begin to grasp.  I myself didn't really reflect on this until the middle of high school, and certainly didn't realize the full implications of such a system until I started working for a living after graduating.  From your comments, you seem certainly able to reach or refine these conclusions more to your experience- you seem to have moved on from the 'extremely simple' understanding stage.  I have never been working poor or distinctly wealthy, so I don't even entertain the idea that my understanding is yet complete.  As you get older and see more of the world, however, I'm sure your opinion will change.

          No thanks, been to the Moon.

          by Tm3 on Wed Oct 21, 2009 at 02:31:55 PM PDT

          [ Parent ]

          •  Planet Reality! (0+ / 0-)

            Thank you for the back ground on the ‘time is money’ analogy.  I’ll take it that you are in disagreement with the ‘time is money’ basis of my argument.  I don’t believe that you can pick and choose this simple application so I assume you wholly disagree.  Time and money are the fundamental principals of almost all economic theory.  Again, from you reply (reread it), you focus almost entirely on the monetary side of the argument.  With you inability to consider the "time" side of the argument I perceive you wouldn’t have the capacity to further the discussion.  I will admit that my simple analogy is somewhat absurd, but no more absurd that attempting to eliminate classism the though legislation.  People can be legislated to prosperity.  An example of this lies in you statement:

            ‘...on the Moreover, generally, the more money one has already stockpiled the more money one can get out of their time.  This does not work at low levels- persons without a large cash supply will often see little return on invested time; persons with an already large held supply will see often a massive return with little time invested.’

            Another perspective of this passage is (Note: I don’t consider "family money" as you do):  The more money one has already stockpiled, the more money one can get out of their time (sic).  Countless poor people have been given large sums of money only to invariably lose it.  Countless rich people have lost their fortunes in bankruptcy only to earn it back.  How is this possible?  One group spends the money on recreation times (time being the key word here) where as the rich (formally) spends their money/time  on making more money.  It is a mindset.  It is a discipline.  It is a drive. A work ethic. It is not a predisposed trait.

            I understand that your statement is a generalization, as is mine, but you must understand my generalization considers time.  Hence, my generalization is far more comprehensive.

            •  So then if Germany has high taxes (1+ / 0-)
              Recommended by:
              Late Boomer

              And yet it continues to have a strong manufacturing economy and a broadly hard-working citizenry, what does that mean?

              Maybe they have a work ethic so strong that they will pay their taxes and keep on working, not look for a 3rd World hellhole as a tax shelter.

              By the way, capitalist-apologist magazine The Economist has run an article admitting that economic mobility in America has declined in recent decades; the rich are staying rich, and the poor are staying poor.  Socialistic Western Europe has more mobility, and it also has been shown that many parts of it rely more on small businesses than the US, the supposed Vatican of "entrepreneurship".

              Is Europe in your reality?

              •  Germany, bad example (0+ / 0-)

                Thank you for your reply.  The tax structure here must be fair enough to allow businesses to pursue profit opportunities.  If we start dictating taxation form the other "end" (i.e.: the poor are staying poor so tax more) we can’t possibly evaluate tax levies correctly.  This may lead to starving our business and stifling economic growth.  This is when people will leave.  

                As for Germany; it is unique state in the EU (and the world for that matter).  They supply a huge portion engineering through out the world, they are basically carrying they the rest W. Euro Counties, they opened an undeveloped East Germany just 19 years ago, they have openly developed in many E Euro countries and their Government is not as addicted to debt. (as they have cap on public spending).  Hell, they have tried to take over the world twice!  If you want to evaluate socialist W Euro Counties try France, Portugal, Spain, or Greece.  All of these counties have deep, deep economic problems and their people are trying to immigrate to Germany (leaving).  I have read that there are concerns with Portugal and Spain debasing the Euro.

                Thanks for the heads up on The Economist.  Do you remember which issue?

            •  Not at all. (0+ / 0-)

              The examples you have given are flawed in that they do not account for the resources allotted.  Bankruptcty of a wealthy individual does not deprive him or her of contacts, a social network, or the education to manage growing wealth.  The sudden increase in wealth that you indicate, such as through the lottery or inheritance, does not provide the growing pains and therefore further education in wealth management that can only by earned, as you imply, over time.  Most of those who have gradually managed their overall resource allocation have these skills to a degree.  Ethics have little to do with it- both the rich and poor want more for themselves, one simply has better resources by which to force that to occur, better alliances and better experience in bringing this into realization while the other has much less motivation due to the lack of gain, and less suitable experience and networking structure for doing so.

              No thanks, been to the Moon.

              by Tm3 on Wed Oct 21, 2009 at 05:51:54 PM PDT

              [ Parent ]

              •  exactly! (0+ / 0-)

                As you noted in you post:  'one simply has better resources ... while the other has much less motivation...'. Exactly right, one enjoys the resources of working (giving up time) while the other, less motivated, enjoys (using time).  It is a life preference and it is OK!  Neither wants to be told how to allocate their time (or money).

                •  You are deliberately confusing the two. (1+ / 0-)
                  Recommended by:
                  Rich Santoro

                  What I said was that "the other has much less motivation due to the lack of gain."  That is not a lifestyle choice or life preference by any means, but a product of environment.  There is no point in performing labor or sinking money into an attempt to gain resources or money if there is no chance of return.  You seem to have the idea that somehow those living in slums or rural areas removed from what many consider 'normal' regions- such as the suburbs or residential city plots- have the same set of opportunities as anyone else, when that is clearly not the case.  You seem to believe that inhabiting these areas is a life preference, when it is decidedly not so.  Most of the people in these areas are in fact trapped by economic concerns- as I mentioned before, things like price inflation due to theft or simple gouging run rampant.  Moreover, largely because of these conditions, their income is far too unstable for them to get decent credit- which they would otherwise need to escape this cycle.  They can't afford to move into areas that may afford them better possibilities.  Your contention that the poor have less money because they refuse to spend their time working is reversed- work that allows them to earn appreciable resources (time, land, whatever) is scarce.

                  No thanks, been to the Moon.

                  by Tm3 on Fri Oct 23, 2009 at 09:03:26 AM PDT

                  [ Parent ]

                •  No one is telling anyone... (0+ / 0-)

                  ... how to live.  That is a total non-sequitur.

                  The discussion is about those who want to use their time to succeed, but have no doors to open, much less the key to open them.  You ignore this concept and seem to think that Paris Hilton somehow worked so hard to accumulate her wealth...  

                  "If Bill-O collapsed into his own sphincter, like an imploding dark star, and disappeared forever...would we care?..." - Liberal AND Proud, Crooks and Liars

                  by Rich Santoro on Fri Oct 23, 2009 at 09:32:28 AM PDT

                  [ Parent ]

        •  Sounds good to me! (1+ / 0-)
          Recommended by:
          AdamR

          Remember time is money. The wealthy have no time and the lazy have no money. It only seems like a natural answer that the wealthy gives the lazy money, hence, the lazy should give wealthy time.   Here is that answer: Make the lazy work and the wealthy will give them money!

          Let's tax the wealthy and create jobs for everyone else! Also, you make an interesting point about money vs. time.. A tax that represents few hours of a wealthy persons money represents many times more (sometimes hundreds!) of a workers salary.

          •  Interesting point... (0+ / 0-)

            If the relation of time and money were linear... as SOAL suggests... then 1 unit of time = 1 unit of money in all cases.  Thus, the wealthy have much more time on there hands than the poor do.

            The poor have virtually no time at all.  No opportunity to to succeed.  Nothing to invest... no way to gain...  There life is but a moment (with the time = money concept) of subsistence.  The wealthy have a virtual eternity to make things happen.

            So SOAL's time = money equation either turns his whole arguement on its head (because the poor have no money, hence no time to even try and succeed)... or he is just plain clueless.

            "If Bill-O collapsed into his own sphincter, like an imploding dark star, and disappeared forever...would we care?..." - Liberal AND Proud, Crooks and Liars

            by Rich Santoro on Fri Oct 23, 2009 at 09:38:09 AM PDT

            [ Parent ]

        •  "Wealth is not won like a lottery" (1+ / 0-)
          Recommended by:
          scotths

          Wealth is not won like a lottery

          ...except when it IS won in a lottery.

          I suppose this statement is enough to prove your complete ignorance of economic reality--so I won't even get into the fact that randomness is a factor in all models of physical reality.

          Apparently, you believe that all humans are omniscient (and born into the same conditions) and therefore we have all decided to experience life exactly as it has played out.

          "Avoid extremes; forbear resenting injuries so much as you think they deserve." -Benjamin Franklin

          by AdamR on Wed Oct 21, 2009 at 05:47:39 PM PDT

          [ Parent ]

        •  Your insular perspective... (0+ / 0-)

          ... limits your view of reality.  You base your entire standards system on the concept of fantasy-land land.  That is not the case in reality.  

          I am talking about real wealth (homes, cars, stocks, pensions, etc).  The bottom 25% have none.  They work their asses off to try and get by.  There are indeed low-income and middle income people (even impoverished people) that are idle, as you suggest.  They are content to kick-back and let the world pass by.  I have no doubts about that.  But the notion that it is somehow the standard, is just wrong.

          But you still have your nose in the books, so I don't expect you to understand how the world really works.  Maybe someday...

          "If Bill-O collapsed into his own sphincter, like an imploding dark star, and disappeared forever...would we care?..." - Liberal AND Proud, Crooks and Liars

          by Rich Santoro on Fri Oct 23, 2009 at 09:28:22 AM PDT

          [ Parent ]

  •  You wonder why we can't use these people (1+ / 0-)
    Recommended by:
    deben

    Every now and then someone writes a diary about how a major philosophical figure for the Right - especially Jesus - actually thought the exact opposite of what conservatives say he thought on a particular issue, and sometimes on a wide variety of issues.

    The implication is clear: hoist conservatives on their own petard and use their own heroes and their professed beliefs to advance the cause of humanity instead of the cause of capital and those who control it.

    Yet it never happens.

    Progressive is not the opposite of aggressive.

    by Visceral on Wed Oct 21, 2009 at 12:17:12 PM PDT

  •  Excellent Post (0+ / 0-)

    I couldn't agree with you more.  And I'd also point out that there is a great deal more in Smith's "Wealth of Nations" that should be read and understood by progressives and liberals.  I decided to read Smith's work last year and was astounded by how little it supported the modern conservative position and how much it supported modern liberalism.  For example, the end of Book I, he discusses the various segments of the economy, in particular noting those whose interests corresponded to the increase in the general welfare of society and those whose interests were opposed to the general welfare of society.  His conclusion was that the interest of those whose income depended upon the rent of land or wages for labor matched the general welfare of society and the prosperity of the nation, while those whose income depended upon the profits from stock ran in the opposite direction of those of the nation.  Hardly a position that the modern Republican party would embrace.

    I also think the issue of taxation is even more striking today than it was in Smith's day.  A great deal of the income of the wealthy depends directly upon services provided by the government.  Broadcast networks need the government to guarantee sole use of a frequency of the airwaves, businesses need to share risk with the community through incorporation, large segments of the economy require trademark and copyright protection and the financial sector most definitely needs the FBI white collar crime unit to keep their employees from mismanaging money.  Smith talks of taxation to fund the general needs of security, but there are now numerous services for which it would be perfectly fine to charge fees.

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