Greenspan and the Morality of Taxation

[Steve Gagne]

Globalization is one of the most powerful forces for liberty. That is why free trade, sound money and free immigration are the most important political issues for Objectivists to champion. In such a climate, those countries with poor tax policy and fiscal policy will be disciplined economically.

Jim

No, globalism is not "one of the most powerful forces for liberty", it is the process of indebting every nation in the world, every man, woman, and child, to the IMF, World Bank, and other international banking organizations so they can suck the lifeblood, every drop of wealth, out of every human being on the face of the planet.

Once we are all on that treadmill, the debts are structured so that repayment schedules are always greater than the resources available to repay them, so that they can never be repaid: perpetual debt, perpetual servitude. This is a recipe for disaster, and its end result is first, chaos, next, war, and then, tyranny.

I suggest that this is the opposite of what you wish to accomplish.

[Aggrad02]

Globalization is one of the most powerful forces for liberty. That is why free trade, sound money and free immigration are the most important political issues for Objectivists to champion. In such a climate, those countries with poor tax policy and fiscal policy will be disciplined economically.

Jim

No, globalism is not "one of the most powerful forces for liberty", it is the process of indebting every nation in the world, every man, woman, and child, to the IMF, World Bank, and other international banking organizations so they can suck the lifeblood, every drop of wealth, out of every human being on the face of the planet.

Once we are all on that treadmill, the debts are structured so that repayment schedules are always greater than the resources available to repay them, so that they can never be repaid: perpetual debt, perpetual servitude. This is a recipe for disaster, and its end result is first, chaos, next, war, and then, tyranny.

I suggest that this is the opposite of what you wish to accomplish.

Thanks Steve, I was trying to move to point this out. But I first wanted to know why he thought globalism was a powerful force for liberty.

Also remember that not only will there be Global banking institutions, but expanded global government (UN, EU, NAU), which are not going to be democratic or representative, which are going to strip countries of their sovereignty.

--Dustan

[Aggrad02]

I care I guess you are representing the truly 'laissez-faire' view here? Personally, I think it's a naive view to imagine that we can have an economy with NO government intervention. I believe the government should be providing educated leadership to the public. Humans are a symbolic class of life and so whomever controls the symbols controls us.

Educated Leadership?

First Education: What values? what contents? Who decides? Does the public decide by democratic vote? Or is it decided by a power elite?

Leadership: As in the Fuehrer Prinzip? In a free society we have Leaders? Or do we have people exercising authority within the the laws and customs?

In a free society the last thing I would want are Leaders. I am a one man parade. I don't need no steeenking leaders. Maybe in a war, but not in peacetime.

Ba'al Chatzaf

Bob well we finally agree on something.

Someone has to be in charge of our government operations, but I want them to have as little authority as possible.

-_Dustan

[Aggrad02]

I guess you are representing the truly 'laissez-faire' view here? Personally, I think it's a naive view to imagine that we can have an economy with NO government intervention.

Pretty much. The only role for govt. in regards to businesses is that it should protect the rights of people and other businesses.

For example, if one business contracts with another business, and one or the other default on the contract, then the govt. should come in and enforce compliance through our court system.

or

Another example, if a business is polluting the water source, then private citizens should be able to sue that company to have it pay damages and fix the problems.

I in general have some problems with the legal entities of corporations in the first place. I think that an entity that has no liability for its actions is dangerous.

--Dustan

[Steve Gagne]

Which, in a roundabout way, brings us back to Bill's point.

Moreover, taxation isn't wrong simply because it violates rights (although it does that), nor is it wrong simply because it contradicts the purpose for which the taxes are being levied (although it does that). It is wrong for a far more serious and fundamental reason. It is wrong because it betrays the very purpose for the government's existence in the first place! In that respect, it is even worse than the theft from which it claims to offer us protection.

Quoting Thomas Jefferson in The Declaration of Independence: "We hold these truths to be self-evident: that all men are created equal; that they are endowed, by their Creator, with certain unalienable rights, that among these rights are life, liberty, and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed . . ." (Emphasis added)

Governments are instituted to secure these rights, not to violate them! There might be some excuse for endorsing taxation if one had never been introduced to these ideas in the first place. There is none for a man of Greenspan’s knowledge and sophistication.

Now we're probably going to have to split this into several seperate discussions:

1) Morality in an imperfect world, and

2) How to make the imperfect world more perfect, and

3) Errors in our own understandings.

The first point concerns the the compromises we all make (including Greenspan) in order to work in a world full of immoral people, institutions, and expectations.

The second concerns the methodology we might use to obviate those aspects of living in our current mixed economy that occasion us to make those compromises -- definitely a seperate topic.

The third concerns our own misunderstandings concerning principles and applicability. I think I should start with the last one first.

There are a number of implicit expectations on our internal wish-lists that we have hung on various statements by others, concerning rights, responsibilities, role of government, etc. But there are some points are made explicit elsewhere that contradict our understandings in this discussion.

Firstly, the Declaration of Independence, as worded and approved by the Founders, explicitly abandoned Paine's "life, liberty, and property" for "life, liberty, and the pursuit of happiness", stating that rights exist only in a state of action, not in regard to an object itself. Thus the commonsense definition of private property ownership is NOT part of the this nation's foundation document. That doesn't mean we cannot make it part of the future, but it definitely is not out of our national past. Because of this crucial difference in understanding regarding property, the national impetus held that, whereas you could not tax a man's person, nor his freedoms, you could, on the other hand tax agricultural products, which increased, not solely by man's efforts, but grew by the "Grace of God", and was thus not man's property but God's. And the common religious tradition at that time was that the wayfarer, the widowed, the orphaned, the homeless, the halt, the lamed, all had a claim on any excess created in this manner, i.e., by the "Hand of God." Furthermore, manufactured goods were made of the agricultural products and natural resources discovered in the land. These products were seen as subject to not only the claims made on agricultural products, but also to a societal claim on "privileged activities", activities that would not have existed but for the producer's relation to society -- this claim being called "the excise". This is the basis of recognizing taxation in the past. If you wish to dispose of the myth, you must at least postulate a principle of similar mythic impact, or be left with an inherently self-contradictory principle of government smack dab in the middle of your philosophy.

Secondly, in her discussion of the relation between the right of self-defense and government, AR emphasized a point that is being soft-pedaled here. The state is a corporate entity to whom we surrender our right to initiate retaliation WITHIN A SPECIFIC LIMITED GEOGRAPHIC AREA. Note that this must needs be a unitary enterprise (see her discussion re: "competing governments"), and does not constitute surrendering our right of self defense. Because of this necessity (of the government being a unitary entity), it must regard actions against itself as a "threat", thus assuming its own institutional sense of self defense, a right-in-action, of initiating action against perceived threats. There is nothing in Objectivist theory that provides any guarantee that the state, resting within its powers, will restrain itself in exercising this; 100% taxation ("tribute" or serfdom) could quickly become the order of the day. But it is because the state can do this, with none to oppose, that the powers of government must be strictly limited by the rule of law, under the control of civil authority. Thus civil authority is there, not to "validate" or "enforce" taxation (institutionalized theft), but to sharply limit it. "The price of liberty is eternal vigilance."

So our theoretical spin has got to change if we want to get this right.

(oops wife says I gots to go.)

As far as Morality in an imperfect world, remember that "I owe no debt of morality to those who would treat me immorally." If I am facing an essentially irrational situation, do not expect my actions to make sense according to your standards.

As far as making it a more perfect world, O'ism has a long way to go, adequately answering questions of "how" in human society, before it will be mature enough to guide society cleanly. (Telling people that they are irrelevant isn't very productive.) It will have to recognize and embrace the cultic and mythic aspect of human belief systems, to answer societal man's needs, without closing off growth. (A la David Kelley "T&T" rather than "I am AR's spiritual heir" LP.) Good manners wouldn't hurt, either.

steve

Edited September 27, 2007 by Steve Gagne

[James Heaps-Nelson]

Globalization is one of the most powerful forces for liberty. That is why free trade, sound money and free immigration are the most important political issues for Objectivists to champion. In such a climate, those countries with poor tax policy and fiscal policy will be disciplined economically.

Jim

No, globalism is not "one of the most powerful forces for liberty", it is the process of indebting every nation in the world, every man, woman, and child, to the IMF, World Bank, and other international banking organizations so they can suck the lifeblood, every drop of wealth, out of every human being on the face of the planet.

Once we are all on that treadmill, the debts are structured so that repayment schedules are always greater than the resources available to repay them, so that they can never be repaid: perpetual debt, perpetual servitude. This is a recipe for disaster, and its end result is first, chaos, next, war, and then, tyranny.

I suggest that this is the opposite of what you wish to accomplish.

Until the 1990's, political leadership could simply coddle domestic businesses with protectionism now capital and people flow to countries that are more free. I think we can argue things like the abolition of the IMF and the UN without throwing the globalization baby out with the bathwater.

Jim

Jim

[Michael Stuart Kelly]

Actually, globalization has two sides and very little middle in terms of practical results. This is just a partial list off the top of my head.

The good side:

1. Trade barriers are reduced or abandoned altogether between countries. The lower taxes and new markets for local companies are reflected in prices everywhere, so everything is much more available and affordable all over the world.

2. The risk of default on payments due to a country's weak currency is diminished by strengthening the country's currency through mechanisms like the Basel capital accord (this is very technical and takes a bit of knowledge about the role of central banks and BIS, but it is critical to globalization for the time being).

3. A country with strong financial ties to other countries is less likely to go to war than a country with weak financial ties. The more countries a single country is tied to strengthens this result. The USA, being the big guy on the block, is an obvious exception and so are fanatical regimes. But even with these two, the financial ties versus war principle is a factor.

The bad side:

1. The name of the game for interaction between first world and third world countries is raw materials and dirt cheap labor. The cards are stacked (through local government protection) so that most all of the benefits flow to the first world and very few stay behind, except for enormous benefits in the bank accounts of some politicians and their business cronies. (I have seen this up close.)

2. How local government protection for this is assured is that the IMF and World Bank often contribute by working in parallel with first world governments and companies to develop infrastructure projects for third world countries that are designed to run at a huge loss or not even be completed. Thus, the debt from loans for these infrastructure projects never gets paid off. That's an ugly truth, but it is too widespread to deny or ignore. In blunt terms, there is junk from this policy lying around all over the world and it is shameful.

3. Third world countries are controlled politically because of such debts. This is not so bad when these countries start courting our enemies, but it is horrible when local dictators are reinforced by our side and these dictators go on killing sprees against their own citizens.

I will not include the international market for weapons of mass destruction or even normal ordnance as I consider the whole field to be mainly the activity of governments and not really subject to normal market considerations. The main principle with this material is that it usually must go boom or rust before it is replaced. So insiders try to make it go boom because this is much faster than rusting for processing new orders (their source of income).

These are some of the broad results. The best thing obviously is to try to keep the good things and get rid of the bad things.

Michael

[James Heaps-Nelson]

Actually, globalization has two sides and very little middle in terms of practical results. This is just a partial list off the top of my head.

The good side:

1. Trade barriers are reduced or abandoned altogether between countries. The lower taxes and new markets for local companies are reflected in prices everywhere, so everything is much more available and affordable all over the world.

2. The risk of default on payments due to a country's weak currency is diminished by strengthening the country's currency through mechanisms like the Basel capital accord (this is very technical and takes a bit of knowledge about the role of central banks and BIS, but it is critical to globalization for the time being).

3. A country with strong financial ties to other countries is less likely to go to war than a country with weak financial ties. The more countries a single country is tied to strengthens this result. The USA, being the big guy on the block, is an obvious exception and so are fanatical regimes. But even with these two, the financial ties versus war principle is a factor.

The bad side:

1. The name of the game for interaction between first world and third world countries is raw materials and dirt cheap labor. The cards are stacked (through local government protection) so that most all of the benefits flow to the first world and very few stay behind, except for enormous benefits in the bank accounts of some politicians and their business cronies. (I have seen this up close.)

2. How local government protection for this is assured is that the IMF and World Bank often contribute by working in parallel with first world governments and companies to develop infrastructure projects for third world countries that are designed to run at a huge loss or not even be completed. Thus, the debt from loans for these infrastructure projects never gets paid off. That's an ugly truth, but it is too widespread to deny or ignore. In blunt terms, there is junk from this policy lying around all over the world and it is shameful.

3. Third world countries are controlled politically because of such debts. This is not so bad when these countries start courting our enemies, but it is horrible when local dictators are reinforced by our side and these dictators go on killing sprees against their own citizens.

I will not include the international market for weapons of mass destruction or even normal ordnance as I consider the whole field to be mainly the activity of governments and not really subject to normal market considerations. The main principle with this material is that it usually must go boom or rust before it is replaced. So insiders try to make it go boom because this is much faster than rusting for processing new orders (their source of income).

These are some of the broad results. The best thing obviously is to try to keep the good things and get rid of the bad things.

Michael

Michael,

You provide a good summary of the good and the bad. I would say that the amount of good is increasing and the amount of bad is decreasing. After the end of the cold war the amount of proxy-government arrangements have decreased on both sides of the old Cold War divide. Commodity prices are on an upswing due to demand in China and India allowing third world countries to reap more benefits. The global GDP growth has averaged 4.8% from 2001-2007. Supply chains are being shrunk due to technology and comparative advantage. Things are looking pretty good.

Jim

[John Dailey]

~ Baal said "There will always be leaders..." Actually, only for followers looking for such. Prob is, there's no dearth of those, in which case, there's no dearth of bosses, er, 'leader'-wannabees.

~ Relating to this and global institutions, the 'leaders' (ahem) in electing countries are voted in probably on bases no dif from when Hitler was running. Too many voters want a moralistic-sounding 'feel-good' boss (of others) who'll most convincingly promise (that's all that's needed, no?) to put a chicken (or more) in each of their pots. Such makes for corrupt 'officials' at whatever level. Think 'pork'-orientation spread globally.

~ Corrupt officials are the obviously easy ones to buy for any big conglomerates, 'global institutions' or international buisnesses, no?

~ We're getting what we've asked for in our last century's voting habits about our officials, from county to Feds.

LLAP

J:D

[Brant Gaede]

Ba'al didn't say that. You are paraphrasing me.

--Brant

[tjohnson]

~ Baal said "There will always be leaders..." Actually, only for followers looking for such. Prob is, there's no dearth of those, in which case, there's no dearth of bosses, er, 'leader'-wannabees.

~ Relating to this and global institutions, the 'leaders' (ahem) in electing countries are voted in probably on bases no dif from when Hitler was running. Too many voters want a moralistic-sounding 'feel-good' boss (of others) who'll most convincingly promise (that's all that's needed, no?) to put a chicken (or more) in each of their pots. Such makes for corrupt 'officials' at whatever level. Think 'pork'-orientation spread globally.

~ Corrupt officials are the obviously easy ones to buy for any big conglomerates, 'global institutions' or international buisnesses, no?

~ We're getting what we've asked for in our last century's voting habits about our officials, from county to Feds.

LLAP

J:D

Yes, we will always have "leaders" in a symbolic class of life - it's inescapable. The problem is how do we get REAL leaders and not "leaders", with scare quotes? I see this as a educational, political reform issue. I don't know what the answer is though I have a few ideas.

[BaalChatzaf]

Yes, we will always have "leaders" in a symbolic class of life - it's inescapable. The problem is how do we get REAL leaders and not "leaders", with scare quotes? I see this as a educational, political reform issue. I don't know what the answer is though I have a few ideas.

Except in war, we don't need no steeenking Leaders. The sheep need shepherds. Free men don't need Leaders. We need persons with administrative responsibility the manage governments, and then only for limited periods of time. No one should be a Public Boss beyond mere necessity.

Ba'al Chatzaf

[Aggrad02]

Bob,

I thought you might like this:

http://www.theatlasphere.com/columns/04102...nnett-which.php

It was sometime during middle school when I actually began to think about the posters. Every one of my classrooms seemed naturally endowed with those laminated squares, patched up along the wall like a quilt of inspiring messages.

Some posters became classics, such as the kitten grasping a rope above a sentence that read “Hang in there!” or the long rambling message, each word a different color, beginning: “In twenty years it won’t matter what kind of car you drove or what type of shoes you wore...” and ending in “...but what will matter is the education you received.”

Of all these posters, one bothered me most of all. I have seen this same message in many forms, but the one in my seventh grade homeroom class read: “There are followers and then there are leaders. Which one are you?”

Long before I read the works of Ayn Rand, this message seemed misleading in some deeply important manner that I could not conceptualize. I simply thought to myself: is that truly all the world is made up of? I am neither a leader nor a follower. Where do I belong?

In school, I hated doing group projects. It is not that I disliked my fellow students; I simply enjoyed doing things my way. Only I knew what I really wanted, and only I could meet my own expectations. Group work invariably included subtle character manipulations, a shake-down of sorts to settle everyone into their appropriate slots.

Finding myself as the group leader, I could never convince the other members to do exactly what I wanted. As a follower, I was forced to let my ideas slip away for the better good. Reading that same poster again and again, the confused thoughts of my younger self echoed in my mind: I am neither a leader nor a follower. Where do I belong?

The truth is, of course, that there is a third category. I personify it as a silent man standing in the shadows thinking thoughts that no one can ascertain. In the stadium of the world, the cheerleaders jump, the crowd cheers, and the silent man walks away. Why does this man get left out in a two-fold world? It’s simple: leaders make themselves seen, and followers are so vast in numbers that they cannot help but be noticed. The man in shadows requires nothing, follows no one.

That same poster adorned the wall in my freshman math class. “There are followers and then there are leaders. Which one are you?” Sitting in my uncomfortable desk, rereading the words over and over again, I began to hate that poster and the message it conveyed to the class. “The world is not so foolishly simple!” I wanted to cry to the hand that inked such a message, to the bored kid sitting behind me, to the teacher that blissfully plastered up posters without thinking about their contents.

What most people do not realize is that both the follower and the leader are mutually dependent upon each other in order to maintain their positions. A leader cannot lead if there is no one willing to follow. A follower cannot bow before an empty throne. The relationship is symbiotic and binding. There is another way to live; a way that is neither as a leader nor a follower. It is the way of the individual.

Ayn Rand understood this dilemma. Whereas I wanted to tear that poster from the wall, Rand created characters who refused to acknowledge the meaning of its message. Such a message could not function in their world. Howard Roark would shrug and walk on, Hank Rearden might scowl, and Dagny Taggart would laugh.

The leader-follower scenario does not play out among Rand’s heroes. Certainly, they may seem like leaders, but unlike the traditional definition, they are never dependent upon those who look up to them. Roark, Rearden, and Dagny never asked for followers. They simply lived the way they wanted to live and controlled their worlds with earned skills and riveted intensity. They were the individuals who played on no teams, who accepted no compromise, and who most definitely did not care about what posters said.

In my sophomore year of high school, I picked up a copy of The Fountainhead. Occasionally, when I looked up to catch my breath, those same words haunted me from above the blackboard. “Which one are you?” it taunted. But no tides of implacable anger rose inside me this time. Now I knew. Taking a deep breath, I plunged back into the text and let the world around me evaporate.

Jessica Bennett attends school at Truman State University where she is studying for a BA in communications. She has loved writing all her life, and hopes to incorporate her passion into a full-time writing career.

[bmacwilliam]

As far as government and defense. A person cannot give up his right to self defense, it is an inalienable right. I think Ayn's word choice of "delegate" was very bad. It may or may not be what exactly she meant.

A better idea would be the idea that we "entrust" our government to protect us, while preserving our own right to defend our self. That way if the government oversteps its authority we can revoke that trust. Or if you don't trust the government you can prepare accordingly. This was the idea of the founding fathers and the reason for the 2nd amendment. The 2nd amendment was designed to ensure that the individual right of self defense was no infringed and to protect the populace from government gone astray. The tax to support such a military should either come from voluntary taxes or indirect taxes such as sales tax.

--Dustan

I think there's much wrong with these ideas.

First of all, there is no possible way one can retain the right to revoke the trust on an individual basis if that's what you're saying. You can't choose to respect authority when and only when it suits you. Authority loses all meaning if this happens. On the larger scale, collectively we revoke trust everytime an incumbant politician fails at reelection.

Secondly, although the post above did not mention this issue, I think it's a blatant contradiction to endorse as a proper role for government to protect us against outside threats to our lives (military protection) while at the same time vehemently protesting against the mere suggestion of a collective protection of our supposed highest value - life - in the form of socialized medicine. Somehow military protectection against evil foreigners is fine and dandy but collective disease prevention and treatment is evil.... Hmmm...

Of course I'll admit that taxation can and does get out of hand, but the concept of taxation is not a contradiction as mentioned in a previous post. The purpose of taxation I believe is twofold. It is not solely to protect our rights, but also to structurally prevent cheating. Taxation ensures income to the government (to protect our rights) AND that contributions are fair and nobody cheats. Of course fairness can be debated. However, fundamentally taxation has BOTH purposes (legitimate in my opinion) and therefore no contradiction exists at all. It only supposedly violates our rights if we're cheating.

THis is a result of my view of partial, inherent altruism being the true nature (and most productive) form of man and society. Forced taxation, practically, and philosophically is perfectly legit and precludes the portion of individuals who may seek to cheat. Of course this only makes sense if you believe that an individual has an obligation to give away at least a portion of his wealth to the collective. Rand would of course disagree with this, but evolutionary psychology, population biology, genetics, and various other branches of science are in agreement. In other words, reality and Rand part ways on this.

EDIT: It has been rather obvious to me that you don't give up freedom, productive work, and living for you own sake and immediately become a slave as soon as you're required to contribute part of your income to the collective. Quite the contrary, the contributions directlly or indirectly help to maximise prosperity, at least until taxes become too heavy a burden and government spending is out of control.

Bob

Edited September 26, 2007 by Bob_Mac