Is it good to have wealthy businessmen in a country?

[Sparko]

all of you shut up or I will nuke you!

[Psychic Missile]

I didn't give a definition of taxation. What I said only relied on the fact that taxation is involuntary. (As opposed to, say, a gift to the government.) If taxation were voluntary, there would be no need to enforce tax laws.

That's actually more of a practicality. It would make no sense to send out bulletins and start a new donation drive every time a city needed to fix up a road. A voluntary taxation would work well in a small community.

No, that is an assumption on your part. It is quite likely that it harms the country as a whole.

Then add in the words "in theory" if you want.

That's true (and the state and politicians and bureaucrats do benefit from it), but I care nothing for the government's interests. I care about the rights of human beings.

Then donate to a charity. Welfare isn't a charity.

Yes!
But that conclusion holds only if you are talking about voluntary exchange. If it's not voluntary then you cannot assume that both parties view it as gain. In fact, it would be safe to assume the opposite: that the coerced party views it as a loss. Otherwise why did he need to be forced? If both parties stand to gain, then you can put down the guns (of the police) and use persuasion and peaceful/voluntary human interaction.

There's just too many people involved. The process has become impersonal, and so people wouldn't be interested. It's like poor people voting Republican, they'd be chopping off their own limbs.

Taxation is manifestly not part of a voluntary exchange.

I think it is by virtue of living in a country. I don't want to go down that road again. This topic isn't based on whether taxation is theft.

[quote]That works out differently. See the example of the "11 units of a good." Switching that to the case of employee discounts would not produce the same result.[/quote[

Actually it's the same principle. The idea of a discount changes spending habits contributing to more money changing hands.

If so, that's not an economic stimulus. Production is the creation of wealth. Consumption is the destruction of wealth. Savings is what causes economic growth. Consumption causes the opposite of economic growth. That is, you can grow only by consuming less than is produced. You need a surplus. Shifting wealth out of savings to consumption makes the economy smaller than otherwise.

And as I showed in the "11 units of a good" explanation, this spending you are talking about is not at all a stimulus to businessmen. It is accounted by the businessmen as an economic loss--as increased costs--which impels them to reduce production (thus reduce wages and increase prices of goods).

It's a stimulus in that it's money given to people by the government in the hopes that they'll spend it immediately in order to create more economic activity.

What are you saying here? that deficit spending is an economic stimulus? Not true. It just means that the government first took money out of the economy (by borrowing) before spending it in the economy. A government deficit is not the magical creation of wealth. (On the contrary, because of overhead, it will be a net loss. And because it shifts savings into consumption it will be a net loss to the economy.)

I just meant that the government getting its money back isn't necessarily part of the equation.

You do know many people do not mind getting less money if they do not have to work for it, right?

Of course. It would just be hard to support a lifestyle of buying the newest gadgets while on such a budget.

Again, it sounds as though you are ignorant of what really goes on. Ever worked in retail where you find somebody buying toys with their money and food with their food stamps? I have seen it for myself, sounds like you haven't.

I'm not denying those things happen. There are most certainly many abusers of the system, and there are plenty of problems that need to be fixed. That doesn't mean the whole system should be scrapped or that everyone using welfare is abusing it.

What is is suppose to be about and what is actually going on is two different things. Plus giving money to people is a 'Christian calling'? No, helping those who are in need is a Christian calling and guess what, I do that. I just do not believe that giving lots of people money for nothing is going to help them.

I meant letting poor people live in your home is something Jesus would like. I was just making a joke, don't take it too seriously.

Since I did not say 'all' you are attacking a strawmen. Nice, but again, you seem to have never actually seen what goes on for yourself and living in a fantasy world. There ARE some that DO treat it like a hand out and stay on welfare for years and years at a time or those who collect disabilities who really are not as disabled as they claim. Those that actually need help, should be helped. It is too bad that the system is so abused and many times those that really do need the help can not get it.

I really do think we're on the same page mostly. It's just you seem to think that because people abuse welfare, it shouldn't exist, which is unfair to people not abusing it. It's like back in gradeschool when some kids did something wrong and the teacher punished the whole class. That's treating the kids who didn't do anything like troublemakers. I think you're doing the same sort of thing.

Demand and why do they expand because of demand? Because their is more money to be made? Besides, you seem to again be blissfully unaware of what taxes do, they add in extra cost so a company has to spend MORE money to expand or hire less people to take care of the cost. Do you think money magically appears out of thin air and a company does not have an expense? Taxes are an expense so if you got to spend X amount on taxes, you got to make it up somewhere, so you raise your prices, cut employees, curve expansion, or do something else to make up the cost. After all, would you spend MORE money to make less and do you try not to cut your cost too?

Then an analysis has to be made of whether a tax makes up for its cost with what it's going to be spent on.

And I read it and I think you're trying to make it say more then it says. You are aware that The Economist is rather conservative in outlook in most of its articles, right?

It said plainly that food stamps are one of the better forms of stimulus. That's all I'm saying in that regard. I don't have a problem with The Economist being conservative.

So it is ok for congress or the president to buy votes, but it is not ok for a company to buy the government? Double standards much?

I wish politicians couldn't buy votes, but if it's not through money it's through pandering, and I don't think that's ever going to go out of style.

[lilpixieofterror]

Of course. It would just be hard to support a lifestyle of buying the newest gadgets while on such a budget.

And yet, many of them do it. You really do not know anything about people, do you?

I'm not denying those things happen. There are most certainly many abusers of the system, and there are plenty of problems that need to be fixed. That doesn't mean the whole system should be scrapped or that everyone using welfare is abusing it.

So what is the solution?

I meant letting poor people live in your home is something Jesus would like. I was just making a joke, don't take it too seriously.

It was? Funny, I don't recall Jesus having a home for people or Jesus being a huge fan of taking care of people all of their lives. He tended to help them and then tell them to 'sin no more'. In other words, he was more of a doctor, who took care of people when they needed it and left them to their own devices when they didn't need it. That is what welfare should be all about, it should be about helping those that need help. I know, crazy concept, isn't it?

I really do think we're on the same page mostly. It's just you seem to think that because people abuse welfare, it shouldn't exist, which is unfair to people not abusing it. It's like back in gradeschool when some kids did something wrong and the teacher punished the whole class. That's treating the kids who didn't do anything like troublemakers. I think you're doing the same sort of thing.

Nah, my solution is quite different then yours. My solution would be to go back to what welfare was originally about. Did you know that welfare was originally about putting people back to work and teaching them new skills? I'm a big fan of teaching those that lost their jobs or no longer can do their jobs, to do new jobs they can do or to teach them new skills for the ever changing work place. I find that to be far more effective then simply making them dependent on the government for all of their needs.

Then an analysis has to be made of whether a tax makes up for its cost with what it's going to be spent on.

Would you spend more money to make less money? Yes or no? I always find it amazing that the government seems to go off the assumption that people will not change their behavior based on laws they pass and taxes they impose.

It said plainly that food stamps are one of the better forms of stimulus. That's all I'm saying in that regard. I don't have a problem with The Economist being conservative.

Which thus far, is an assertion. I would say that actually teaching people to work would be the best form of a stimulus.

I wish politicians couldn't buy votes, but if it's not through money it's through pandering, and I don't think that's ever going to go out of style.

Would you vote for a person that would take away your benefits or make it harder for you to get them? That is buying votes my friend, so what is the solution to not buying votes?

[joel]

That's actually more of a practicality. It would make no sense to send out bulletins and start a new donation drive every time a city needed to fix up a road. A voluntary taxation would work well in a small community.

If it was voluntary, it wouldn't be taxation at all. If you give voluntarily to the red cross, or the government, or anyone, then it's a gift. (or exchange, like when you buy bonds)

How well voluntary funding works (vs coercive) is irrelevant to the question of whether taxation is coercive.

That being said, the proper functions of government could be funded by voluntary means (without taxation). The government should not be producing roads; that would be more economically produced in the voluntary sector (e.g., for-profit). But that is perhaps a discussion for another time.

The process has become impersonal, and so people wouldn't be interested.

Yet another downside of big-government intervention.

Taxation is manifestly not part of a voluntary exchange.

I think it is by virtue of living in a country. I don't want to go down that road again. This topic isn't based on whether taxation is theft.

Whether or not it is theft, it is undeniably not voluntary. That is the essence of taxation.

The threat of "Your money, your home, or your life" makes it not voluntary.

That works out differently. See the example of the "11 units of a good." Switching that to the case of employee discounts would not produce the same result.

Actually it's the same principle. The idea of a discount changes spending habits contributing to more money changing hands.

No, it's not the same thing.

Scenario 1: Store owner has 1 good, and 1*p money.
His money is taken and used to buy the good.
He is left with 1*p money (and no units of the good). He is clearly 1 good poorer, no different than if the good had simply been stolen and no money changed hands.

Scenario 2: Store owner has 1 good, and 1*p money.
He offers the good at a discount, some fraction f of p.
Someone (perhaps an employee) agrees to the exchange.
Store owner is left with (1+f)*p.
Unlike scenario 1, this is not a loss, but a gain. The owner would not have offered/agreed to the exchange if he didn't value the f*p more than he valued the good.

(Or perhaps other considerations. The discount could be selling at a loss, which would considered part of the employee's compensation (like other benefits), in exchange for lower wages. But still, the exchanges as a whole would be a gain, otherwise the parties wouldn't agree to the voluntary exchanges.)

More money changing hands is not the concern. A business might have money passing through it at a higher rate, but with lower rate of return, than others, thus perhaps making smaller profits.

Scenario 1 is a loss, 2 is a gain.
(1) will cause business/production to contract. (2) will not.

It's a stimulus in that it's money given to people by the government in the hopes that they'll spend it immediately in order to create more economic activity.

No, it's not a stimulus at all, but a loss to producers, as I've explained clearly already.

And it's not new wealth magically created; the money the government gives was first taken out of the economy (plus overhead losses). And trying to stimulate consumption at the expense of production will only be an economic depressant.

A flurry of consuming the seed corn may in the short term have the appearance of "increased economic activity", but it actually means increased poverty in the future.

I just meant that the government getting its money back isn't necessarily part of the equation.

I still don't know what you are saying. Deficit spending is the case where the government does need to 'get it back,' to repay its debt.

[Psychic Missile]

And yet, many of them do it. You really do not know anything about people, do you?

Why do you think that?

So what is the solution?

Rethinking how the system works. Lots of little changes to close loopholes. That sort of thing.

It was? Funny, I don't recall Jesus having a home for people or Jesus being a huge fan of taking care of people all of their lives. He tended to help them and then tell them to 'sin no more'. In other words, he was more of a doctor, who took care of people when they needed it and left them to their own devices when they didn't need it. That is what welfare should be all about, it should be about helping those that need help. I know, crazy concept, isn't it?

That's what charity is about. Welfare is about a country's self-interest.

Nah, my solution is quite different then yours. My solution would be to go back to what welfare was originally about. Did you know that welfare was originally about putting people back to work and teaching them new skills? I'm a big fan of teaching those that lost their jobs or no longer can do their jobs, to do new jobs they can do or to teach them new skills for the ever changing work place. I find that to be far more effective then simply making them dependent on the government for all of their needs.

Wouldn't that be even more expensive than the current system?

Would you spend more money to make less money? Yes or no? I always find it amazing that the government seems to go off the assumption that people will not change their behavior based on laws they pass and taxes they impose.

It doesn't need to be about the government's budget. It can also be about a more active economy or curing the societal ills many lower-income people face that end up hurting our country in other ways.

Which thus far, is an assertion. I would say that actually teaching people to work would be the best form of a stimulus.

Are you talking scholarships?

Would you vote for a person that would take away your benefits or make it harder for you to get them? That is buying votes my friend, so what is the solution to not buying votes?

A dictatorship?

If it was voluntary, it wouldn't be taxation at all. If you give voluntarily to the red cross, or the government, or anyone, then it's a gift. (or exchange, like when you buy bonds)

How well voluntary funding works (vs coercive) is irrelevant to the question of whether taxation is coercive.

That being said, the proper functions of government could be funded by voluntary means (without taxation). The government should not be producing roads; that would be more economically produced in the voluntary sector (e.g., for-profit). But that is perhaps a discussion for another time.

I meant it as taxation in that it would be identical otherwise. The government collects it and spends it to support its people and therefore itself.

If this was a different government, meaning we scrapped a bunch of programs and privatized a lot of what it does, then I agree that voluntary taxation might work in regards to that system. Whether that would result in a better society...

Yet another downside of big-government intervention.

I consider it the consequence of industrialization.

Whether or not it is theft, it is undeniably not voluntary. That is the essence of taxation.

The threat of "Your money, your home, or your life" makes it not voluntary.

That's part of participation in a larger system. If you want to move out into a commune or a home in the wilderness you don't have to deal with taxes.

No, it's not the same thing.

Scenario 1: Store owner has 1 good, and 1*p money.
His money is taken and used to buy the good.
He is left with 1*p money (and no units of the good). He is clearly 1 good poorer, no different than if the good had simply been stolen and no money changed hands.

Scenario 2: Store owner has 1 good, and 1*p money.
He offers the good at a discount, some fraction f of p.
Someone (perhaps an employee) agrees to the exchange.
Store owner is left with (1+f)*p.
Unlike scenario 1, this is not a loss, but a gain. The owner would not have offered/agreed to the exchange if he didn't value the f*p more than he valued the good.

(Or perhaps other considerations. The discount could be selling at a loss, which would considered part of the employee's compensation (like other benefits), in exchange for lower wages. But still, the exchanges as a whole would be a gain, otherwise the parties wouldn't agree to the voluntary exchanges.)

More money changing hands is not the concern. A business might have money passing through it at a higher rate, but with lower rate of return, than others, thus perhaps making smaller profits.

Scenario 1 is a loss, 2 is a gain.
(1) will cause business/production to contract. (2) will not.

When the government gives someone food stamps as opposed to straight money, they spend more money period than they would have otherwise and they give it to grocers and the agricultural industry, and that goes on to benefits the country in other ways. Similarly, an employee discount encourages employees to spend money at the store, so while it seems like an initial loss in potential profits, it results in more purchases that wouldn't have been made otherwise, creating greater net profit.

No, it's not a stimulus at all, but a loss to producers, as I've explained clearly already.

And it's not new wealth magically created; the money the government gives was first taken out of the economy (plus overhead losses). And trying to stimulate consumption at the expense of production will only be an economic depressant.

A flurry of consuming the seed corn may in the short term have the appearance of "increased economic activity", but it actually means increased poverty in the future.

Food stamps encourage production in the agricultural and manufacturing industries because of greater demand.

I still don't know what you are saying. Deficit spending is the case where the government does need to 'get it back,' to repay its debt.

What I meant was basically along those lines, just regarding purpose, like in a depression.

[lilpixieofterror]

Why do you think that?

Because I have seen it for myself.

Rethinking how the system works. Lots of little changes to close loopholes. That sort of thing.

And as you can see, I have rethought how it should work too.

That's what charity is about. Welfare is about a country's self-interest.

So giving people money for nothing is about a countries self interest?

Wouldn't that be even more expensive than the current system?

Not at all, for you have people working it means what for the government? It means you are getting more taxes because these people are producing as opposed to taking. That is what welfare was all about and if you don't believe me, you can go check out the history of welfare for yourself. Much of its history dates back to programs put into act by the great depression in which the government hired out of work people to work on public works projects as workers. Meaning that instead of just sitting around and collecting a check, these people had to go on and earn they money they were given. Likewise, it has the added bonus of producing people that are able to do things on their own as opposed to those dependent on the government for their needs meaning that you have less of a chance of politicians buying votes and it takes these poor people and gives them an education as well as a means to support themselves meaning that ok, you might spend more over the year or so for their trade school, but that is one year of support as opposed to what... 10 or more years of support? What would you rather see, a person dependent on the government for a short time or one dependent on the government for the long term?

It doesn't need to be about the government's budget. It can also be about a more active economy or curing the societal ills many lower-income people face that end up hurting our country in other ways.

So teaching them skilled labor jobs in which people can go out and earn their own money is worse then giving them food stamps?

Are you talking scholarships?

That is one way, it is too bad so many go unused (both public and private) ever year. Go back and look at your history though, ever year of job corp? Know when that started?

A dictatorship?

Or making sure a group of people are not dependent on the government for their needs for long periods of time. Also, have you ever heard of generation welfare? Where the children of those on welfare also collect welfare when they get older? You can give the poor money all you want, but they will still be poor. If you teach them to get and earn their own money, you'll see something different in action. Give a man a dollar, he will be coming back to you tomorrow to get another dollar from you the next day and the day after that and the day after that. Teach that man how to earn his own money, you will not see him back again.

[joel]

I meant it as taxation in that it would be identical otherwise. The government collects it and spends it to support its people and therefore itself.

Sure, but the relevant difference, that distinguishes government from voluntary organizations and individuals, is that the government does it by force. At it is that difference that invalidates the theory that the government works on the same principle as voluntary exchanges.

I consider it the consequence of industrialization.

It's not.
For example, President Grover Cleveland commented in 1887 (well after industrialization) that, "The friendliness and charity of our countrymen can always be relied upon to relieve their fellow citizens in misfortune. This has been repeatedly and quite lately demonstrated."

The impulse to charity was still personal. It was the growing government intervention would replace the "If I don't do it nobody will" attitude with "If I don't do it, the government will."
In fact, Grover Cleveland predicted this as he continued: "Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood."
[Veto of Texas Seed Bill, Feb 16, 1887 http://mises.org/daily/3627 ]

The threat of "Your money, your home, or your life" makes it not voluntary.

That's part of participation in a larger system. If you want to move out into a commune or a home in the wilderness you don't have to deal with taxes.

It is not inherent to a large system. One can participate in a vast voluntary market (and other large and widely-networked voluntary organizations) without it being coercive, without threatening people's homes or person or other property. In fact, as a rule, the "spontaneous order" of voluntary markets is complex and and far more functional and economical/productive than the results of government action.

But the point I was making here is just that the above threat makes it not voluntary. Even your suggested alternative doesn't work because property taxes will still be extracted. But even apart from that, it would still be coercion via the same threat: "Your money, your home, or your life." I'd be going to the wilderness only because of the coercion.

And, again, it is the coercive/voluntary distinction that is relevant.

When the government gives someone food stamps as opposed to straight money, they spend more money period than they would have otherwise and they give it to grocers and the agricultural industry, and that goes on to benefits the country in other ways.

No, it doesn't.

Firstly, you still have this mistaken idea that spending money stimulates the economy. It doesn't. What grows an economy is consuming less than is produced (equivalently "producing more than is consumed"). Whereas money could be spent in a flurry of "consuming the seed corn" (consuming more than is produced). But that leads to impoverishment, not stimulus (only the false appearance of temporary stimulus). Thus it is production, not a flurry of spending, that enriches.

And as I've explained, this food stamp scenario impoverishes producers. It overall increases their costs, inducing them to contract production--having the same effect as shoplifters.


(One clarification. I'm talking about the economy as a whole. Yes, it is conceivable that the program would enrich/stimulate agricultural industry at the expense of other industries, because all the producers are taxed for the food stamps but only one industry receives the increased demand. But the loss to the other producers is necessarily greater than the benefit to agricultural producers, resulting in a net loss to production as a whole.)

Similarly, an employee discount encourages employees to spend money at the store, so while it seems like an initial loss in potential profits, it results in more purchases that wouldn't have been made otherwise, creating greater net profit.

More sales at a loss is worse than fewer sales at a loss.
The employee discount is set at a level that yields a profit. The case of food stamps cannot possibly do that. (As explained above. It necessarily leaves the producers poorer by at least one unit of the good for each good purchased. Thus it is necessarily a loss. The more such purchases, the greater the loss. If you think you can provide a numerical example resulting in a net profit, please do.)

Food stamps encourage production in the agricultural and manufacturing industries because of greater demand.

No, because it increases costs more than the increase of the demand.

Demand/revenue alone does not encourage production. Two things are involved: It is always the (marginal) revenue minus the (marginal) cost.

If demand increases, but costs increase by more than the increase in revenue, then that results in the producer contracting production. And likewise when demand falls but costs fall by even more, then the result is an encouragement to expand production. You can't look at demand alone or costs alone. It is only the difference between costs and the selling price that can encourage production.

For each unit purchased with food stamps, yes revenue increases by 1*p, but the increase in outlays is (1*p + 1 unit of the good). Thus it is a net loss, causing a contraction in production.

What I meant was basically along those lines, just regarding purpose, like in a depression.

In a depression too, the government has to first take the money out of the economy (by borrowing) before it can spend it into the economy. (And then later it has to take it out of the economy a second time in order to repay the debt.)
And a depression is the worst possible time to stimulate consumption at the expense of saving.

[Cow Poke]

Yes.