You didn't earn what you have all by yourself

[_Kevin Graham]

It’s Not Your Money
2010 JANUARY 12
by Ian Welsh
You also didn’t earn most of it.

It seems like every time I discuss taxation, some libertarian will waltz in and say “it’s my money and I don’t see why the government should be able to take it.”

So let’s run through why, no, it isn’t your money. We’ll start with two numbers. The income per capita for the US in 2005 was $43,740. The income per capita for Bangladesh was $470.

Now I want you to ask yourself the following question: are Bengalis genetically inferior to Americans? Since not too many FDLers think white sheets look great at a lynching, I’ll assume everyone aswered no.

Right then, being American is worth $43,270 more than being Bengali and it’s not due to Americans being superior human beings. If it isn’t because Americans are superior, then what is it?

The answer is that if it isn’t individual, it must be social. On the individual but still social level, Americans are in fact smarter than Bengalis because as children they are far less likely to suffer from malnutrition. However not suffering from malnutrition when you’re a baby, toddler or young child has nothing to do with you and everything to do with the society you live in and your family–two things you have zero influence over (perhaps you chose your mother, I didn’t.)

Bengalis won’t, on average, get as good an education. They won’t get as much education either, since every child is needed to help earn a living as soon as possible. For most Bengalis there’s no room for having the extended childhood and adolescence westerners are used to, which often stretches into the late twenties or even early thirties, amongst those seeking Ph.D’s or becoming doctors or lawyers.

When a Bengali grows up the jobs available aren’t as good. If he or she starts a business it will earn much less money than the equivalent American business. If he or she speculates in land and is very successful, they will still be much less rich than an American would be.

One could go on and on. I trust the point is obvious — the vast majority of money that an American earns is due to being born an American. Certainly the qualities that make America a good place to live and a good place to make money are things that were created by Americans, but mostly they were created by Americans long dead or they are created by all Americans working together and are not located in the individual.

Now the same is true of the really rich. Forbes keeps track of the world’s billionaires, and almost half of them are in the US. This is because US society and the US government in particular, is very set up to create billionaires. Your odds of being a billionaire take a massive jump if you’re born in the US. Your odds of being a billionaire if you’re born in Bangladesh? Essentially zero. Now one could point out that billionaires are still so rare that the odds are always essentially zero (how many billionaires in your circle of friends?) Nonetheless the US in 2005 had 371. Germany, with the second most, had 55.

Bangladesh, you won’t be surprised to hear, had zero.

If you’re a billionaire in the US, you’re a billionaire in large part because you live in the US.

So, if you’re American, a large chunk of the reason you make a lot of money (relative to the rest of the world) is that you are American. The main cause of your relative wealth is not that you work hard, or that you’re innately smarter than members of other nations (though you may be since you weren’t starved as a child). It’s because you had opportunities given to you that most people will never had, and those opportunities existed due to the pure accident of your birth or because you or your family chose to come to the US. The same is true of most first world nations.

Immigrants understand this very well. There’s a reason why Mexicans, for example, are willing to risk death to cross the border. Their average income is $7,310, compared to the US average income of $43,740. They won’t make up all the difference just by crossing the border, but they’ll make up enough that it’s more than worth it. They haven’t personally changed, they don’t work harder now that they’re across the border. They aren’t smarter and they aren’t stronger. They just changed where they lived and suddenly the opportunities open to them were so much better that their income went up.

So let’s bring this back to our typical Libertarian with his whine that he earned it, and the government shouldn’t take it away. He didn’t earn most of it. Most of it is just because in global terms, he was born on third and thinks he hit a triple. That doesn’t mean he doesn’t have to work for it, but it does mean most of the value of his work has nothing to do with him (and Ayn Rand aside, it’s almost always a him).

Now what a government is, in a democratic society, is the vehicle that the population as a whole chooses to use to organize collective action. Government is, imperfect as it is, the closest approximation to the “will of society” that we’ve got.

Since the majority of the money any American earns is a function of being American, not of their own individual virtues, the government has the moral right to tax. And since those who are rich get more from being American than those who are poor, it also has the moral right to take more money from them.

More importantly than the moral right, it has the pragmatic duty to do so. The roads and bridges that government builds and maintains; the schools that it funds, the police and courts that keep the peace; the investment in R&D that produced the internet; the sewage systems that make real estate speculation possible, and on and on, are a huge chunk of what makes being American worth so much more than being a Bengali. Failure to reinvest in both human and inanimate infrastructure is like killing the golden goose, and America, for decades now, has not been keeping its infrastructure properly maintained, let alone building it up.

And money itself is something that government provides for its people. It’s not your money, it’s America’s money and it’s a damn good thing too. If you don’t believe me, try issuing your own money and see how many people accept it. Some will, because what money is, when an individual issues, is an IOU. I’ve written a few in my life. In every case the person I gave it to was less happy to receive it than he would have been to get some nice crisp dollars. And I rested my IOU’s on dollars — I promised to repay in my country’s currency. If you don’t want to do that you’d have to issue an IOU saying “I will repay you with a bundle of rice” or gold, or a service. And then you come to the question of enforcement (one thing even libertarians admit the government should do) because what if I refuse to meet the conditions of the IOU. Even an IOU is based on the sanction of the government, if it isn’t it’s worth only as much as the good will of the person issuing it or the strong arm of the person holding it.

So no, it isn’t your money, and it’s a good thing it isn’t. And while you may have worked your butt off for it, you also didn’t earn most of it. The value you impute to yourself “I’m worth my 80K salary” is mostly a function of where you live, of where you were born and of who your parents are.

Originally published Feb 9, 2008.

[_EAllusion]

The theme of this article is that if you come to own property through good fortune of living in the country you do, then you don't really own that property and it is morally proper for others to take it away at will for whatever reason. At least, that's the takeaway I get when you apply the lens of a libertarian complaining about property-taking. So I assert that I have rightful ownership of my property and it is wrong to take it without some overarching justification. The response seems to be that luck, rather than my hard work, played a significant role in why I have my property. I don't dispute this, but I wonder why that should matter as far as my property rights are concerned. This comes across as smug and morally dubious.

[_Analytics]

What this article reminds me of is what Reed Durtschi taught in Econ 201 at Utah State back in the day. Apparently, it wasn't that uncommon for students to think that Society was the major impediment to their material success—they thought that if only they could go into the wilderness and be free of society like Grizzly Adams, then they would be happy and materially well-off. Durtschi adamantly said that was B.S.—if you lived by yourself, the very best you could hope for was barely not starving.

Several years later, the movie Castaway illustrated the concept—Tom Hanks’s character was extremely smart, resourceful, and hardworking, but a man who was at the top when surrounded with society could only barely survive by himself on what would seem to be a nice island. The level of wealth he had by himself on the island is what he himself deserved. The difference between that level of wealth and what he enjoyed as a Federal Express executive was due entirely to the synergy of society.

The truth is that the article is right—the rich couldn’t be rich without a rich society supporting them. I have no problem with hard work, resourcefulness, and luck being rewarded. I have even less problem with inequality per se. But the fact of the matter is that society needs tax dollars to function, and it is entirely appropriate and fair for the people who have benefited the most from society to be taxed the most in order to support it.

[_EAllusion]

I'd also add that the article takes libertarians as its target, but it takes such a contrary view of one's moral right to property that it implicates a wide swath of Western liberal societies.

[_EAllusion]

And money itself is something that government provides for its people. It’s not your money, it’s America’s money and it’s a damn good thing too. If you don’t believe me, try issuing your own money and see how many people accept it.

This was a particularly obnoxious part of the article as the government makes it illegal to issue your own money and uses its monopoly on force to give itself a near unassailable competitive advantage outside of niche workarounds. That doesn't mean they're can't be private currency. It's just a unit of account that represents wealth in the system. Very serious people with very serious money would like to take this author up on his challenge if they could.

So the government controls the money supply by force, then the author points out that our money would vanish without the government. That's cute. And if you try to reduce that aspect of his point, then all you have is the government as enforcer of contracts, which basically everyone thinks the government should do outside of anarchists. It doesn't follow automatically that that means the government has a moral right to all your wealth simply because it provides a service.

I remember some poster actually argued this once, which brought down a chorus of laughing. Yet, somehow, it gets posted much more seriously in this context:

http://vine.rottentomatoes.com/vine/sho ... ?t=2279869

[_bcspace]

Whoa! Whoa! Let's get back to basics and demonstrate once again why liberals don't know where wealth comes from or how to create it.

God created you and everything around you. Yet there are no farmers who stand in the middle of the field and say "I want corn!" and corn suddenly starts to grow.

Another prime example is the public school. That fine building and all those materials and that great teacher, all provided to you by the government. And yet each child gets a different grade. The metaphor for the economy of course is where liberals try to give everyone the same grade and that is where the economy tanks.

All this is illustrative of Obama's mind and background. There can be no doubt he is the most liberal president America has ever had. A Marxist even because that is Marxthink spewing from his mouth. This further shows that the media didn't do it's job and vet Obama at all before his first term.

[_ajax18]

To say that wealth comes from the synergy of a society attributes way too much to the so called synergy. Do no poor nations possess this synergy? A big part of who has money and who doesn't is because of military might and the willingness and ability to assert and enforce your rights. Financial success comes from lobbying and being able to manipulate the government to help you assert your rights if you do not possess such military force yourself.

[_Droopy]

God created you and everything around you. Yet there are no farmers who stand in the middle of the field and say "I want corn!" and corn suddenly starts to grow.

Its a rather frightening commentary on the present state of both public education and the state of our colleges and universities that this kind of core insight has to be stated slowly, distinctly, and with large, red subtitles in order that at least some aspect of it might be hoped to have made some impression.

Even E., who has long claimed a libertarian leaning, is comfortable placing ownership of personal property in a free society within the sphere of "luck" with "hard work" taking a distinctly tertiary position.

The article Graham posted is a classic neo-Marxist morality play who's fundamental point is that, following traditional leftist ideological tropes, the only reasons America is an overwhelmingly middle class society, or that there are millionaires or billionaires at all, is structural; it is that America is "set up," to produce middles classness and millionaires.

This is the precursor to the inevitable conclusion of acceptance of this claim, that all poverty is structural, or, that is to say, all inequality of income and wealth distribution is structural inequality. All of it, both wealth and poverty, are inherent in the system, and have little if anything to do with personal decision-making, use of agency, lifestyle choices, or differences in individual talents, abilities, and capacity.

This is the inevitable and historically observed end of accepting socialist theory as a serious model of the human condition. Everything must be leveled to as close to a single human mean as possible because both success and excellence as well as poverty and human debasement are little more than epiphenomena of the economic and social system under which one lives, and that system is all-determining.

It should be obvious here that the real enemy to the author of this piece, as well as to Mr. Graham and those who see explanatory value in it, is freedom. The more freedom there is, and hence, the more chance for a wide variety of disparate outcomes, the greater the hostility to the inherent vicissitudes and dynamic diversity of being human and being a part of the mortal experience there is.

This is what could be called structural determinism, and is inherent in Marx and virtually all other leftist economic and social theories since, and explains much of leftism's inherent authoritarian and totalitarian nature. Americans owe all the property they posses and the temporal prosperity they enjoy to the system, just as those who are poor are now free to cast all blame for their condition outside themselves, on the same system.

[_Droopy]

So no, it isn’t your money, and it’s a good thing it isn’t. And while you may have worked your butt off for it, you also didn’t earn most of it. The value you impute to yourself “I’m worth my 80K salary” is mostly a function of where you live, of where you were born and of who your parents are.

This is a recipe for the utter destruction of the Constitution, the Bill of Rights, the Declaration, and the entire 200 year liberal democratic project.

Call the inevitable outcome of taking these kinds of claims seriously Socialism, Communism, Fascism, National Socialism, or any hybrid of the above (such as multiculturalism), all of them are, in their own related doctrinal way, the price we will have to pay for abandoning our divinely inspired constitution and the core principle of free agency and working for our bread "by the sweat of our brow," which is the fundamental nature of mortality and the basis of the institution of private property, which is the only means by which prosperity and affluence, and the opportunities afforded by economic independence, can be achieved and the substantial majority of humans can escape from a life of subsistence economics.

[_Droopy]

Another prime example is the public school. That fine building and all those materials and that great teacher, all provided to you by the government. And yet each child gets a different grade. The metaphor for the economy of course is where liberals try to give everyone the same grade and that is where the economy tanks.

There's a general handicapping principle for everyone and everything within a socialist framework. Everyone has the same quantity and quality of stuff. Every school child receives the same grade. No one keeps track of points scored in sporting events; no one wins or loses. No culture is better or "higher" than any other culture. No ideas or beliefs are better than any others. All successes and, alternatively, failures, are structurally induced.


Satan laugheth...