Thursday, December 08, 2005

Is “Free Enterprise” Fair? Part 2.

There appears to be some people with the position that “Free Enterprise” is unfair. One or those in particular is a blogger known as “Stalin the Shark”.

We got in this discussion by me implying that transfer payments were the same as “legal theft.” Well, since that phrase is an oxymoron I agreed that it may be legal and therefore it can only be immoral, and not really stealing per se.

But, taking from one group or class of citizens based upon income, and transferring that to another group or class of citizens may not be theft, but it is without a doubt immoral or unjust because it is unjust discrimination.

He cannot say that discrimination based upon income is somehow moral. He will not be able to go there. Liberals love to say that discrimination is unjust and unfair, so his brain will not let him admit that fact because it will make him inconsistent.

Now, back to his position that owners “steal” from their employees.

The fallacy goes like this…”The workers in a company produce all of the value, but they only get paid a part of that value, therefore it is unfair or the owner(s) are really stealing from the workers.”

The fallacy lies in the first part of the statement that “assumes” that only those who actually do the production produce “all”, or the “only” value.

Let’s examine the silliness of that position.

Leave the workers completely alone without any tools and without any capital what so ever and see if they can truly produce what they were producing by themselves.

Help Mr. Owner, I need some supplies. Well, go buy them. Help, Mr. Owner, I need a new spray gun, the one I was using broke. Well, go by one. Help Mr. Owner, we don’t have any customers to sell this product to. Well, go advertise. Help Mr. Owner, we need to pay ourselves and we lost money on the last job, so we don’t have enough to pay ourselves. Well, go borrow some money. Help, Mr. Owner, we keep loosing money on all of our jobs, we need to have someone who can figure out what we are doing wrong. Well, hire someone who manages full time to do the sales and the figuring out why you are always loosing money.

You see, the problem with the thought that a business can operate at all with only producers is incredible shallow thinking and says to all business owners, they should fire all of the managers and support help that are needed to make a business run. Also what if the owner is doing most of the management and support help? Does he deserve some of the value for his contribution? How about his capital contribution? How about value for his risk for even starting a company that 90% of the time fails in the first year?

So, the fact is the following: “The company produces more value that just what the non-owners produce.” That appears to me to be indisputable.

I really think sts knows that as he seems intelligent and he just likes to be challenging.

Where the real battle is between Freedom and Force, and he has admitted, and I have admitted, that this is were the real battle is, so since there are 16 different definitions of “Force” in my dictionary based upon it’s use, I will correctly define Force and Freedom where they apply to our discussion.

Freedom in a government setting should be defined as…”The unrestricted ability to make choices so long as those choices don’t affect others ability to do the same.”

Force in a government setting is therefore the opposite and should be defined as…”The coercion by someone or some group to restrict choices that would otherwise NOT harm someone else or society.”

Now, having said that let me make sure that we understand that having consequences for our actions is not using force by others. If someone robs a store they are choosing prison. They are making a choice that results in consequences so “they” are limiting their ability to make future choices by their own actions.

Workers can choose to start their own business or to find another job if they think the job offered is unfair, they still have the same choices as before, whereas transfer payments are not part of individual choice.

In the case of welfare, we choose to have our government protect us from unjust taxation, meaning we as a country don’t like socialism, where the government gets to enrich one class of citizen and punish another class of citizen in doing so.

When the majority vote to have “socialism” programs, they are restricting the choices by way of majority rule, i.e., might makes right. And everyone knows that might does not always make right.

Transfer payments may be legal, but there is no doubt that they are discriminatory and therefore unjust.

So, whenever you vote, make sure you are asking the question, “Am I supporting an action that is “forcing” the will of the majority unjustly.”

Am I favoring Freedom or Force? Socialism by its very discriminatory nature is Force.

Am I in favor of eliminating all forms of subsidies or transfer payments? Yes, corporate welfare is just as bad. Am I in favor of someone being able to do other stupid things like smoke weed? Yes, as long as those choices don’t limit the choices of others, then they should be allowed and they should be a States Rights question not a Federal Question or decision.

21 Comments:

At 11:26 PM, Blogger Intellectual Insurgent said...

FAR -

You wrote: "In the case of welfare, we choose to have our government protect us from unjust taxation, meaning we as a country don’t like socialism, where the government gets to enrich one class of citizen and punish another class of citizen in doing so."

How is this so? How are we choosing to have our government protect us from unjust taxation? I agree with most of your post, but I don't get this point. Are you suggesting that the principle of no taxation without representation means America can't be socialist? If that is your argument, I want to understand how you reached that conclusion. What constitutes unjust taxation? Who defines what is just or unjust?

If a transfer payment is necessarily unjust, which I am inclined to agree with, then much of the tax code is unjust. Why should people get tax credits for having kids? If I am single, I don't get the same tax benefits as someone who has kids. Thus, I am indirectly subsidizing their private choices. We don't need to talk about the unfairness of welfare, which is a very small part of the ponzi scheme our government operates, when the tax code forces society to subsidize married people, people with kids, people who own property, people who flip property every 2 years, non-profit corporations, etc.

Answering these questions necessarily begs the question of whether any tax is fair. If your answer is yes, then by what standard do you say yes, because, if taxes are involuntary, then they are always a transfer of property (money) from one who earns it to one who does not.

 
At 11:33 PM, Blogger Mahndisa S. Rigmaiden said...

12 08 05

Good point II, and FAR I sort of feel the same way, although I wasn't thinking as deeply as II was. I tend to agree with you about STS's commie stuff. He personally insulted me on his blog, where all he does is hurl insults and use bad language. If I were you, I wouldn't waste time responding to him. But you did take the time and that is good. I basically think everything you said makes sense, but wonder about the philosophical underpinnings of II's question. Really ALL taxation is unfair isn't it? But in an attempt to provide for the greater good, we get taxed and it helps to build roads and pay for people who sit on their arses!!! Flat tax is the best. A government cannot exist without revenue streams and if we adopted a flat tax structure, it would be the "fairest" of all imho, because everyone would be getting equally screwed! And by flat, I mean a flat income percentage! Very interesting post FAR:) Have a good day tomorrow:)

 
At 11:31 AM, Blogger Stalin the Shark said...

Mahndisa, your ad piscem attacks really are uncalled for. I didn't personally insult you, I pointed out that your reasoning is flawed. You're the one who called me a hateful sock puppet.

Now, to the substance of this post. My argument - which is deliberately constructed to mirror FAR's argument on immoral taxation - is this: capitalism inevitably demands that employers pay workers less than the value which they produce. Under FAR's criteria, not mine, property is absolute, and the taking thereof is stealing. Hence, I arrive at the position that the practice of capitalism is stealing.

The problem with these arguments - immoral taxation and stealing from workers - is exactly the same: that the moral foundation they rest on is inadequate to describe the world as it necessarily exists, and leaves out the moral calculus of the greater good.

My argument is, then, that if you're willing to take into account the greater good of the enterprise to justify stealing, with the enterprise defining said greater good by self-selected criteria, it makes no sense to not apply the same criteria to the state.

Here again, your criteria of business investments justifying not paying out the full value produced mirrors your argument for the state; but all of us who have ever worked or run their own business know that not all business spending contributes to the bottom line, in much the same way that not all government spending satisfies your self-selected criteria for what is 'moral' and what is not.

Now, if only your brain could wrap itself around that, we might be in for a breakthrough of epic proportions.

:-), StS, hateful sockpuppet

 
At 12:12 PM, Blogger Mahndisa S. Rigmaiden said...

12 09 05

Um STS you first of all attacked me by saying I should get a refund from law school, which I don't attend. Then you called me filled with animus towards gays, then you INSULTED MY RACE YOU STUPID, LAME SHILL COMMUNAZI, By saying how behind the times we are in accepting homosexuality. Do you honestly think I would NOT be insulted by your comments? No, I called you hateful after you addressed me in those terms. It is quite clear that you are hateful and get your jollies off by putting others down. Look at your posts all you do is demean others. How utterly pitiful. In terms of your weak arguments, FAR won and II supplemented her logic. Jump in a lake, and you know, I am a reasonable person, but invoking my race and saying we are "behind" is insulting at best so bye bye and I will not respond to your petty blitherings anymore!

 
At 12:13 PM, Blogger Mahndisa S. Rigmaiden said...

12 09 05

FAR: Sorry for ranting, but intolerance and race card playing is uncalled for. Now I know why PD hates shills and why Patrick hates commies. Look at how petty they are!

 
At 12:54 PM, Blogger Stalin the Shark said...

Mahndisa,

I've had a black Congressman tell me exactly what I referenced in my post re: the black community and gays. I fail to see how that's insulting to you or your ethnicity, frankly.

As to playing the race card, you're saying that I may not make an accurate observation that you believe reflects badly on blacks.

And while I may indeed be lame, I'm neither stupid nor a "communazi", a term I find interesting more for what it says about you than for any other reason.

I see from your blog, though, that you get insulted easily, so I'm not taking your reaction too hard. Sorry to disappoint.

Warmest regards,

StS

 
At 2:42 PM, Blogger Mahndisa S. Rigmaiden said...

12 09 05

FAR: Do you see how these moonbat jerks try to justify what they say? Oh a Black guy said it was so, therefore it is true for all Blacks. STS you are a stupid and misguided fool and I hope you rot in hell!

 
At 3:32 PM, Blogger Stalin the Shark said...

Sorry about all the commotion, FAR, but Mahndisa has apparently decided to start a blog war with me.

:-), StS, hellbound hatefilled sockpuppet

 
At 11:32 AM, Blogger Free Agency Rules said...

first to sts,

I am not using the greater good in my response to the "employers steal" assertion.

I am demonstration that the "gretter good" doesn't apply to the owner working in the business and therefore deserving some of the value.

They are not analogus.

:)

FAR.

 
At 11:35 AM, Blogger Free Agency Rules said...

ii,

You have some really good points as usual, and I will address them shortly.

:)

FAR.

 
At 2:37 PM, Blogger Free Agency Rules said...

ii,

You ask such great questions!

I am serious, one of the things that I really like about you is that instead of just saying "Your Wrong!" like others do, you actually ask questions and respond to my questions "Directly!"

"America can't be socialist? If that is your argument, I want to understand how you reached that conclusion."

If one understands that the government gets its just powers from the governed, and that the principal purpose of government is to stop injustice and to protect our life, liberty and property, then if one also understands that it is fair and just to pay for the government for this protection, then we have a starting point.

Being Socialist means enriching one group of citizens by taking taxes that is supposed to be used for protecting our property, and using that very taxation power to give our property to another class of citizen.

Now, as far as the proper way of taxing for that purpose goes, it was clear until the 16th Amendment that the founders were afraid of the enormous power that a “Federal” government has with direct taxes so they said that taxes were to only be levied through census. Meaning that each State was to pay based upon the number of people in its state.

That is fair taxation because it doesn’t cost any more or less to protect a rich person, as it does to protect a poor person.

As far as fair State Taxes, I feel that “use” taxes are the fairest tax of all. “Toll Roads” for an example of how to pay for roads, etc. Those who use it should pay for it.

A good example of my problem with unjust taxation is the current situation with the Sacramento Kings. The Kings owners would love for Corporate Welfare by having a tax on one thing or another that has nothing to do with the people going to Kings games.

If they want a new stadium, then have them charge enough for tickets, parking, concessions, etc., to pay for a new building, don’t ask for people who will never attend a Kings game to give money to some rich people. This is the same problem that I am fighting but in reverse. The taxes are being taken from poor people, (one Class), and are given to rich people, (another class), and I am sure that in this same example only in reverse that sts is against it in this example for the same exact reasons that I am against it in BOTH examples. Transfer payments are not a “just” use of the charter we give to the people who are supposed to protect us from injustice.

I am with you on the unjust tax credit “when the tax code forces society to subsidize married people, people with kids, people who own property, people who flip property every 2 years, non-profit corporations, etc.”

I couldn’t agree more. We need a “Flat tax” or the so-called “Fair Tax.” A tax that doesn’t discriminate based upon any criteria, let along income, number of children, ownership of property, etc.

So, to answer your questions:

“begs the question of whether any tax is fair.”

Yes, any tax that is not discriminatory as I stated above.

If your answer is yes, then by what standard do you say yes,”

Answered above.

“if taxes are involuntary, then they are always a transfer of property (money) from one who earns it to one who does not.”

Taxes for the proper functions of government is part of the social contract we imply with our government when we ask them to protect us and to prevent injustice. “With the consent of the governed”, we agree to taxes for the purposes outlined in Article 1, Section 8, where it starts out with saying the things they can tax…”The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises….” And then it names the only things we should be justly taxed for because the Constitution is all about restricting the government to the things outlined in the Constitution, as “all other things not outlined are retained by the people and the States.”


:)


FAR.

 
At 4:31 PM, Blogger Free Agency Rules said...

This is how taxation should work in my view based upon the Census requirement in the Constitution.

THe Federal Governent lays out it's budget and then divides up the amount by the several states based upon thir population.

Next the State governments canvas the Local Governments for their portion based upon census.

Now in this scenerio we the people have taxation with representation because we can talk "directly" to the local reps and demand to know, (just as in a school bond), what taxes go where.

Then we can demand that our local reps, talk to the state reps, who in turn talk to the Fed and tell them why spending 5 million dollars to study the mating habits of the turtle is a waste of money and just "pork" for some donor.


:)

FAR.

 
At 11:02 PM, Blogger Roseville Conservative said...

FAR,

I am afriad to Comment after II went off on me.

But, I will say that our Government is Socialist. I despise all of the spending programs and the strings attached.

I deal with this idiocy every day, as I have to Issue Insurance Certificates to Insane bureaucracies alomst every day.

 
At 11:42 PM, Blogger Intellectual Insurgent said...

FAR -

I am with you on most of the logic. You said "Taxes for the proper functions of government is part of the social contract we imply with our government when we ask them to protect us and to prevent injustice."

Standards such as these can take you on a merry-go-round, however. What constitutes protection and prevention of injustice? FEMA gets my tax money but then disclaims responsibility for my protection.

I like the idea of a use tax, but here's what I struggle with. Should we have only private schools? If so, what happens to all the poor kids running around with nothing to do because their parents can't afford to send them to school? How about healthcare? Doesn't it protect me when people receive free inoculations against diseases?

RC - you are a rotten, phony hypocrite. You have nothing to say to me or about me you moron!

 
At 12:51 AM, Blogger Free Agency Rules said...

ii,

Said: "Should we have only private schools? If so, what happens to all the poor kids running around with nothing to do because their parents can't afford to send them to school?"

- Vouchers would handle that problem, although the real solution would be for each city to handle the poor without taxes, it's just a matter of belief that it could be done.

Negative waves and defeatists will say it can not be done with only the private sector, but then the private sector sends billions to New Orleans.

"How about healthcare? Doesn't it protect me when people receive free inoculations against diseases?"

- Yes, you are protected by "free" inoculations, but does the end justtify the means? Again could the private sector handle this as well? We may never get the chance to find out because not enough people have a positive "can do" attitude and believe that only government can solve problems of society.

Only the enlightened in D.C. have any wisdom.

"What constitutes protection and prevention of injustice?"

Bastiat says it very well in "The Law."

:)

FAR.

 
At 12:53 AM, Blogger Free Agency Rules said...

P.S.

Bastiat had a Libertarian View and I have known lots of Libertiarians who quoted him extensively. Ask some of your friends at LewRockwell.

:)

FAR.

 
At 10:59 AM, Blogger Reign of Reason said...

“But, taking from one group or class of citizens based upon income, and transferring that to another group or class of citizens may not be theft, but it is without a doubt immoral or unjust because it is unjust discrimination.”

Huh?

Is trying to level the economic playing field then ‘immoral’?

Look at the statistics for income: the VAST majority of those with incomes in the top 5th percentile have that income because they were BORN into it:

Economist Thomas Hertz has found that children whose parents are in the bottom fifth of the income distribution have only a 7.3 percent chance of making it into the top fifth. In contrast, children born in the top fifth have a 42.3 percent chance of remaining there. Contrary to popular impressions, socioeconomic mobility is now lower in the United Stated than in most other industrialized countries.

How does that wash with the theory of capitalism that you expouse? Isn’t capitalism based on the concept that markets reward innovation and hard work?

Statistics and ‘real life’ are not on your side… If you want to defend theory, great – but the implementation of ‘pure’ economic theory does not result in a ‘moral’ society.

 
At 8:43 PM, Blogger Free Agency Rules said...

ROR,

Maybe you like Discrimination based upon income, but I don't.

There is a reason why it is called "Free" Enterprise. I value freedom more than using the police power of the state to "Force" a level playing field by way of Majority Rule.

What about the people who through their own hard work become upward mobile?

Once they are in the upper income bracket, then government punishes them by discriminating against their class so as to benefit another class. You can't get around the fact that that is just flat wrong!

According to you then a President of a Company should get the same wage as a janitor. And vice versa.

You really can't defend that position if you understand that people work their way up by upgrading their skills.

Sure some people will leave money to their children, wouldn't you like to, or would you prefer they start from scratch?

A fair person doesn't change his stance on the situation when he is in the others shoes.

Said: " but the implementation of ‘pure’ economic theory does not result in a ‘moral’ society."

Yes it does, when it is allowed. The reason you don't see it is because of the unfair taxation of people trying to level the playing field by taking money from the middle and upper class and trying to give it to the lower class.

If your the government and you take money out of one persons pocket just because they have more, (and you don't really care if they worked hard for it or not, since you are an equal opportunity "taker"), and then you give it to someone who has less, then you will get the results that you see today. Unfair punishment of one class to benefit another class. Socialism is Discrimination based upon Income or Class. It promotes Class Warfare to try to make everyone the same instead of celabrating individualism and freedom.

Free Enterprise in it's proper form would not have any "transfer" payments and would operate to provide the proper upword mobility.

Your statement... "Economist Thomas Hertz has found that children whose parents are in the bottom fifth of the income distribution have only a 7.3 percent chance of making it into the top fifth. In contrast, children born in the top fifth have a 42.3 percent chance of remaining there."

Maybe those stats are because people in the upper income bracket are not coddled by the government to believe in an entitlement mentality as if the "world owes them a living."

Whereas my wife's mother made it plain to me that the reason she had no real drive to try to succeed was because by staying on welfare all of her life, she could make enough for beer and cigaretts and a weekend on the town, and that was just fine with her and her friends who were also on welfare their whole lives.

Given the opportunity to live off the hard work of others, many people will take that security blanket everytime. To those with a moral compass, it will bother them that they are getting a handout that was not from an individual's heart, but by government decree.

By taking handouts from the government people get "dependent" upon them.

People who are told by their upper income families that if you want to get ahead in life, you must work for it, will get ahead in life. That is why people who have succeded pass that work ethic on to their children. Pretty Simple.

Occam's Razor. Or "Pluralitas non est ponenda sine necessitate" Which means..."Given two equally predictive theories, choose the simpler."

Socialism is morally wrong and no amount of "the end justifies the means propaganda" will change that fact.


:)


FAR.

 
At 11:07 PM, Blogger Free Agency Rules said...

ROR,

said: "Look at the statistics for income: the VAST majority of those with incomes in the top 5th percentile have that income because they were BORN into it"

That statement is very misleading.

There are a few thousand of the "Family Trust" children who don't work and go around trying to make the world socialist because they feel guilty about their situation.

Then there are several million in the top 5% wage earning braket because they own small businesses or they work on Wall Street, or they did like Paul Allen or Bill Gates of Microsoft, or the fouders of Intel. They all started out with an average income and made somthing of themselves by hard work and/or hard study at College and they got ahead.

To imply that the VAST majority of top income 'Earners' are only that way because they were born into a "high Paying Job" is very misleading.

:)

FAR.

 
At 3:31 PM, Blogger Reign of Reason said...

FAR,

You use the “Free Enterprise” and “Police Power” to draw a simile with a free people or a people subjected to the whim of a dictator.

Sounds good, but the analogy is invalid.

Again, what was the result when we experimented with “Free Markets” during the Gilded Age? Widespread abuse – child labor – abhorent working conditions... All to empower a small class of Robber Barons.

You simply cannot long for that “free market”.

So we agree, on some level, that government regulation of the free market is essential.

“You can't get around the fact that that is just flat wrong!” -- Why is it wrong to ask more from those who have benefited most from our economic system? Isn’t “to whom much is given, much is expected” an axiom of your faith?

Please don’t tell me we should leave it to personal philanthropy: again – we have seen where that went in the 19th century.

No: the president of a Co. shouldn’t get the same as a janitor, but by the same token, the CEO’s labor isn’t worth 500 times that of a janitor:

“For more than 25 years, Business Week has conducted an annual survey of the earnings of chief executive officers of the largest U.S. corporations. In 1980, those executives earned 42 times as much as the average American worker, a ratio larger than the corresponding ratios for such countries as Japan and Germany even today. By 2000, however, American CEOs were earning 531 times the average worker's salary. The gains have been even larger for those above CEOs on the income ladder.”

If this trend continues we will have a serious SOCIAL problem on our hands – that is not in the best interest of society... It will result in violent revolution... as such disparity ALWAYS does.

“You really can't defend that position if you understand that people work their way up by upgrading their skills.”

You’re kidding me right? I own and operate an Aerospace Engineering company that employees about 40+ people... I have been part of board of director associations... CEO “paternity groups”, etc. If you honestly think that BIG BUSINESS leaders in entrenched companies make it on their laurels you don’t read the news.

How come Ford, GM, etc. etc. LOOSE MONEY quarter after quarter wile upper management still earn HUGE bonuses? How do you reconcile that fact with your argument?

Yes – for the small to medium sized business owner his performance and “smarts” have a lot to do with the success of the business... but for BIG BUSINESS – that group that has the most influence on government – it’s more about connections and scratching each other’s back: that is exactly the type of “market place” the government should be protecting the citizenry against.

As for the rest of your ‘argument’ -- different people have different aspirations: some are happy with a life on welfare... so be it.... But you have to recognize that others will strive for their billions even in the face of government regulation and what you consider “unfair taxes”

 
At 11:04 AM, Blogger Free Agency Rules said...

ROR,

Your points "seem" revelant on the surface, but need to be looked at with additional information.

said: "Again, what was the result when we experimented with “Free Markets” during the Gilded Age? Widespread abuse – child labor – abhorent working conditions... All to empower a small class of Robber Barons."

When I took Econ 101, the book pointed out that these abuses "only" occured because the government interfered by granting monolopies such as the railroad monolopy. Congressmen granted their "rich" buddies some favors. The Robber Barnos were the result of government favors.

said: "Why is it wrong to ask more from those who have benefited most from our economic system? Isn’t “to whom much is given, much is expected” an axiom of your faith?"

Because we should ask more of ourselves and not have to be "forced" to do it. Do you like to have your neighbor "tell you what to do or else?" I don't like to be forced to do good, you must.

Now for the part that we agree with.

I don't like Big Business in general either, but why do the stock holders continue to elect people who don't perform?

said: "Yes – for the small to medium sized business owner his performance and “smarts” have a lot to do with the success of the business... "

99% of all business are small businesses which is my point.

I contend the "free market" has "never" been able to function properly "because" of interference, while you think it will work wonderfully only with "more government" interference.

That is our difference.

Again your points are well intentioned and logical, it is just like they say, "there are always two sides to a story" and there are always two opposing views that both "seem" valid to the one who holds them, and usually neither party is dumb.

That is why I respect peoples views as I am willing to listen with the possibility I might learn something and that I don't know it all. In other words, I see your side and I see why you would think that way.

Ususally we investigate positions based upon trying to find information that will back up our worldview, and that is why we are biased, both you and I.

With that said, I tend to start from a Libertarian view, and not an Athoritarian view. I don't like force, and I value freedom. You like to have the government "force" people to behave in a "philanthropic" way. I think that is less desirable than the alternative. The end does not always justify the means.

Isn't life wonderful?

:)

FAR.

 

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