Freedom is more Valuable than Money

I wrote this post several years ago. My father was alive at the time, and, I think, I was more under the influence of my antichrist issues at the time, too. Anyway, I think it is still worth reading although I’m not sure I agree with everything in it – well, I think I do, just maybe not as strongly. Anyway, read on…

This post is about the Capitalism vs. Socialism debate. Back when I was in college, one of my roommates was a Democratic Socialist (DS). He was a nice guy, who sincerely believed in the cause. I wasn’t really into politics or economic systems at the time (still am not) but we were good friends through college and he left me with a positive outlook on DS. The older I get, though, the more alarmed I get by DS. Count me in the Capitalist camp (CC).

Why?

Because Freedom is far, far more valuable than money. DS strives to redistribute wealth in the name of “fairness.” But suppose one man wants (or even needs) a boat, and another wants (or needs) a car. The best way to fulfill these wants and needs is to let the two respective men make their own choices and buy their own boat or car. The government should not be in the business of picking and choosing goods for its people. Okay, so maybe the government should just supply each man with the money he needs and let him make whatever choice he wants. Okay, but why can’t one man have two boats, if he wants, and leave the other with but one car? Because that would mean they would have disparate wealth. But if the first man was willing to put in twelve hours a day, instead of eight, or find a more efficient way to make money, or maybe even build his own boat … why can’t he keep it? He should be allowed to pursue the acquisition of whatever goods he desires to whatever extent he wants. The second man might not be too into material things. He might be perfectly content with his one car. Maybe that permits him to get by on a thirty-hour work week, half of what the first man works. He finds time to be more valuable than any boat. Why can’t we just let each pursue their own goods without interference from the government? I certainly feel that I am more capable of determining what my material needs are than the government. Forcing someone to purchase a product against their will (cough, Obamacare) is anti-freedom. As for just giving money to this person and that person, that gives the government undue control over each person, because sooner or later, the government will cut off the spigot for whomever displeases it. Then, where are you? Someone must divide the money. Are you suggesting that the division be perfectly equal? Then the guy who wants to work 12 hours a day to get a boat is treated the same as the guy who just wants to work 6. I’m not judging either man, I’m just pointing out that wealth distribution is not something readily amenable to simplistic rules.

Generally speaking, massive centralized governments are a bad idea. They are clumsy, inflexible, and unwieldy. They are also weighed down with inertia. It is true in the private economy that it is the small new businesses that can most readily adapt to and respond effectively to new developments in the market. I see no reason why government wouldn’t follow the same pattern.

For those that want to use government to care for the poor via socialist policies, that too is a bad idea. Dollar for dollar private charities are far more effective. The last time I checked, for every dollar given to government to help the poor, about $0.35 actually reaches the poor person. The rest of the money is consumed by the bureaucracy. That number is likely to get worse as the bureaucracy grows. As I recall, charities average around $0.70 for every dollar. The really good ones get $0.90 or $0.95. Still, I’m kind of up in the air about whether or not government should have any social welfare programs at all (I benefit from two, personally – actually, three, now). Sometimes having a great size has advantages. But I just see the danger of them becoming huge money-sinks that will consume wealth with a rapacious appetite. With that in mind, I think, if we are going to have them, they should rely on voluntary contributions.

Speaking of bureaucracy, the more dealings I have with the U.S. Government, the more I dislike it. Just one example to consider, I recently got medication for my elderly father. Obtaining the medication was delayed because the hospital ER failed to provide a Diagnosis Code. I mean, really? I’m not going to blame the ER for a trivial paperwork error when God-knows how much paperwork they have to deal with. No, this problem came straight from Medicare. You don’t delay medication so you can cross a “t” properly. That’s just stupid.

Speaking of paperwork, let’s talk about its source: the multiplication of Laws. We have more Laws, thanks to the bloated bureaucracy, than we know what to do with. I mean, the Tax Code, is tens-of-thousands of pages long. And Obamacare was like 4000 pages or something stupid like that. I’m a pretty smart guy but I know I can’t keep track of that many laws with my poor mortal brain. When are we going to learn to give the people closest to a situation some leeway based on their own best judgement? I say we get rid of most of the legal code, except the really critical Laws like those against murder, rape, and child molestation. Yes, the antichrist is against excessive laws. Wasn’t I referred to by St. Paul as the Lawless One?

In considering Capitalism and Socialism, my instincts tell me this (like I say my “instincts,” I’m not sure how these would fare under scientific analysis) that Capitalism will “lift all boats”, but perhaps some at different rates. Socialism might lift all boats but far, far more slowly although I am more inclined to think it will sink them in the long run. Last I heard, the United States, the beacon of Capitalism, is responsible for something like 50% of the innovation on the planet. And yet, it has only 5% of the population. From my own experience, in 2009 I traveled to another small city to get access to an MRI machine. About 8 years later, I had three MRI machines as options in my own city. The technology had become more common and more readily accessible, thanks to, I think, Capitalism. I’m inclined to think that in Capitalism, the cutting edge technology is first available to the rich, who, in some ways offer themselves up as guinea pigs to use it. Then, 5 years out, the middle class get access to it. Then, 10 years out, even the poor get access to it. In a socialist system, the cutting edge technology likely advances more slowly and more often than not, is accessible only to those in power. That means, 10 years out only the rich can access the latest technology from 10 years prior; 20 years out, the same. 50 years out, maybe it will reach the poor, but I doubt it. And if this is the situation, which I am inclined to think it roughly is, count me with the Capitalists.

Also, a problem with socialized medicine is that it makes my lifestyle everyone’s business. Can I eat Doritos? Sane people would say it is up to me. But with socialized medicine, everyone else is paying my medical bills and they have a vested interest in keeping me from eating junk food like Doritos. Bite me. I want my friggin’ Doritos when I want them. If they kill me, fine. Blame it on  me.

For my final warning (and Christians won’t like this) against centralized government I will point to Jesus. He was offered control of the planet by Satan, and He turned it down, because He knew it would destroy Him. Power corrupts. Absolute power corrupts absolutely.

Progressive Taxes versus the Flat Tax

Satan is a Liar. And Jesus Christ is the Lord. Repent and be saved. Yeah, I know you’ve heard it before. But have you ever heard it from the antichrist before?

Okay, switching to something completely political … well, governmental anyway, I figured I would talk about the flat tax and the progressive tax. The U.S. has a progressive Tax System. I support a Flat System. I will use this post to explain why.

Interested? Probably not, unless you are a taxpayer … which should be about half the country.

What is the Difference Between a Flat Tax System and a Progressive Tax System

The difference between a flat tax and a progressive tax is easy to understand.

If you use a flat tax, all taxpayers pay the same percentage as a tax. So, if you have a flat income tax of say 10%, all income taxpayers pay 10% on their income tax every year. So, if you make 100,000 dollars, you pay $10,000 in income tax. If you make 1,000,000 dollars, you pay $100,000 in income tax. Easy, right?

If you use a progressive tax, the taxpayers pay a different percentage based on the amount of money being taxed. The greater the amount of money, the greater the percentage of tax.

So, if you have a progressive income tax of 10%, 20%, 30% for incomes of 100,000 dollars, 1,000,000 dollars, and 10,000,000 dollars, a person that makes $100,000 would pay 10% in income tax, or $10,000; a person that makes $1,000,000 would pay 20% in income tax, or $200,000; and a person who makes $10,000,000 would pay 30% in income tax, or $3,000,000.

Is that fair? Is that wise? Let’s see.

Why Does the U.S. Have a Progressive Tax System?

The answer to this question is complicated, and there is probably not a single answer. The current tax code is a compilation of numerous rewrites and add-ons stemming from years and years of arguments and compromises between the Republicans and Democrats. Still…

The usual reason given to justify a progressive tax system is that the rich can afford to pay more because they have more money at their disposal. Also, the poor shouldn’t pay at the same rate as the rich because it “hurts more.” That is, if you take 10% of a poor man’s money, he will feel that loss more sharply than a rich man would if you took 10% of his money.

Seems reasonable, right?

I, at least, understand the reasoning behind such, but I still disagree with the progressive tax system. And I will tell you why.

My Incentive as a Worker Faces Diminishing Returns

I am not a wealthy man. I have worked low-income jobs (I still do). In particular, I remember working as a dishwasher in a Nursing Home part-time. I usually worked three days a week, sometimes four. It was hard, grueling work. And one of the things I hated was the fact that when I worked four days instead of three, I was taxed more. Not by much, but enough.

I would much prefer a system where, if I worked 4 days instead of 3 in a week, I would be paid 133 1/3 % of the pay I would make for a 3 day week, not some smaller value, like only 125%. Those diminishing returns absolutely killed my incentive to “go above and beyond” and really dig into my job. And I think I have a reasonably decent work ethic.

So, I’m inclined to think many people would have a similar reaction.

The Government is Incentivized to Give as Much Money as Possible to the Rich

Okay, I have never studied economics, so it is possible that I am missing some subtle economic law or relationship here, but it seems to me a progressive tax incentivizes the government to move as much money into the hands of the rich as they possibly can.

Why? Because the rich pay a higher tax rate, and therefore, when it is taxed, the government winds up with more money than if that money was dispersed among multitudes of lower tax paying individuals.

That might not be clear.

Suppose for clarity, the entire taxable amount of money is $100. And there are only 11 people in existence: 10 poor people who pay 10% tax, and 1 rich person who pays 20% tax. Okay, now suppose the 10 poor people have, taken together, $50, and the rich guy by himself has $50.

For the sake of simplicity, if you divide it up equally, the poor people each have $5. So, at 10%, they each pay $0.50 or $5 in total. The rich guy pays 20% of $50 or $10. Great! The rich guy paid $10 and the poor people paid less. How much does the government take in? $15 dollars total.

Okay, what if the rich guy has $60 and the poor guys have $40 between them? The poor guys pay a total of $4, and the rich guy pays a total of $12. The government rakes in $16. And if the rich guy has $80 while the poor guys have $20? The poor guys pay a total of $2 and the rich guy pays $16. The government takes in $18.

Do you see what is happening? The government takes in more money the more money the rich guy makes at the expense of the poor guy making less. In other words, the government is incentivized to see that the rich guy makes more money and the poor guy make less.

And so the poor are squeezed ever harder even though the original intent of the progressive tax system was meant to help them.

The Rich Man Can Be Incentivized to Pay More in Taxes Because He’ll Keep More Money

Now, let’s look at the situation from the Rich Man’s perspective. Same situation: 11 people with $100 of taxable income. At 50/50, the poor men pay $0.50 apiece in tax and keep $4.50 each. The rich man pays $10 in tax and keeps $40.

Now, suppose the government approaches the Rich Man and tells him, “We will use our influence to increase your share of the monetary pie provided you agree to pay 25% in tax.” The rich man agrees.

Now, suppose government, using the influence of the law, sets things up so he takes in $60 and the poor men split the remaining $40. Once again, the poor men suffer a shrinking piece of the pie: the poor men pay $0.40 in tax, but only keep $3.60 for income. The rich man pays $15 in tax and keeps $45.

So, by working with the government and agreeing to “pay more in taxes” the rich man keeps $45 instead of $40, and in fact becomes richer.

How does the government make out? The government gets $15 in taxes in the first scenario where the rich man paid 20%, and it gets $19 in taxes in the second scenario where the rich man 25%. So, both the government and the rich man benefit, and the poor man’s income decreases. The squeeze is on.

You might be able to finagle the mathematics a bit to get things to work out better for the poor man (I’m not sure), but the point is that the government and the rich man are incentivized to act as I have described above. And that just leads to a relentless squeezing of the poor man in a manner similar to the above.

Given my experience of poverty, I think something like that is happening as a result of the progressive tax.

What About the Flat Tax?

Okay, at 50/50 with a 10% tax, the poor men make $5 and pay $0.50 in tax. The rich man makes $50 and pays $5 in tax. The government takes in $10.

At 40/60, the poor man makes $4 and pays $0.40 in tax. The rich man makes $60 and pays $6 in tax. The government takes in $10.

At 20/80, the poor man makes $2 and pays $0.20 in tax. The rich man makes $80 and pays $8 in tax. The government takes in $10.

The poor man performs pretty much the same regardless of a flat tax or a progressive tax in this comparison. The rich man does better under the flat tax than he does under the progressive tax. The government does the same regardless.

The point is that under the flat tax, the government is NOT incentivized to augment the rich man’s wealth AT THE EXPENSE of the poor man.

Under the progressive system the government IS incentivized to perversely punish the poor by concentrating money in the rich man’s hands because the government will get a larger share of that wealth. So, I guess you have to ask yourself: Can the government influence the economy in such a way as to benefit the rich at the expense of the poor? And does it do so?

What does your experience in this economy suggest the answer to that question is? Do things seem to be getting worse for the poor? Or not?

Conclusion

I could go on about the flat tax. If you set it at 10% for everybody, it’s simple to compute and that is a massive labor-saving device. Similarly, it preserves the incentive of the poor man to work hard. It doesn’t incentivize the government to do harm. And the rich guy is always incentivized by money. I’m sure there is more.

However, as I said, I am not an economist. I might be missing something important here. Feel free to comment should you see something I have missed.

Satan is a Liar. And Jesus Christ is the Lord. Repent and be saved. Yeah, I know you’ve heard it before. But have you ever heard it from the antichrist before?

Socialism vs. Capitalism: Questions and Comments

Satan is a Liar. And Jesus Christ is the Lord. Repent and be saved. Yeah, I know you’ve heard it before. But have you ever heard it from the antichrist before?

Okay, this post is going to be a little bit different. I’m interested in the Capitalism vs. Socialism debate. However, I’m not going to write a well-structured essay on the topic. I’m just going to list a number of relevant questions, and observations/comments and list which side that supports.

If Paul works 12 hours a day, 6 days a week for 30 years, should he earn more than Sam who works only 8 hours a day, 5 days a week for 30 years?–point to the Capitalist

Paul, the CEO, of the massive corporation CommiesRUs with 200,000 employees, cannot run the corporation by himself no matter how hard he tries or how fast he works.–point to the Socialist.

If Paul has worked at the same company for 30 years, and Sam has only worked there for 1 year, should he earn more than Sam?–point to the Capitalist.

Invisible theft–If Paul is the CEO of CommiesRUs and he uses his power in a draconian manner to “squeeze” his labor force to produce more while at the same time reducing their pay, is he not “stealing” their labor and the fruits thereof from them?–point to the Socialist.

If Paul just makes smarter economic decisions than Sam, shouldn’t he naturally earn more money than Sam?–point to the Capitalist

For that matter, if Paul has developed the ability to make decisions and Sam has not, shouldn’t he be rewarded for such?–point to the Capitalist

Shouldn’t the use of different skills earn different rewards? If 5000 people have one skill and make their living from it, but only 5 have another skill; shouldn’t the 5 be making more money?–point to the Capitalist

How do you account for things that don’t equate to labor stuff like: jewelry, real estate, I’m sure there are others.–point to the Capitalist.

Should a teenager just starting out be paid as much as a forty-year-old with a serious skill set and resume.–point to the Capitalist

Satan is a Liar. And Jesus Christ is the Lord. Repent and be saved. Yeah, I know you’ve heard it before. But have you ever heard it from the antichrist before?

Hoping for the Rapture, but Preparing for the Apocalypse

Satan is a Liar. And Jesus Christ is the Lord. Repent and be saved. Yeah, I know you’ve heard it before. But have you ever heard it from the antichrist before?

I think the title sums up the appropriate attitude we should have here. Maybe we’ve passed the worst of the coronavirus. Maybe not. Regardless, the next likely difficulty facing our planet will be, at the very least, some form of economic stress, if not collapse. I live in a suburb in the United States so I really can’t comment on what to do in other countries whose economics are such that I wouldn’t recognize what constitutes an adequate standard of living. Similarly, I don’t know what someone living in a city should do.

Depending on how severe the economic downturn is going to be, the first priority is food. If you have room, start a garden, please. You may have plenty of spare time to do so these days and the weather is starting to get warmer. I think the ideal for the suburb is every home becoming self-sufficient. I have no idea how to achieve that, but that thought occupies my mind a lot. Feel free to offer suggestions in the comment section below. After food, the next priority should probably be heat. We have a wood stove and a nice supply of wood for an emergency. Next comes electrical power, and this is where my concern for simplified technology becomes most pronounced. Most modern technology is linked to computers. This is both good and bad. The good is obvious, the bad needs to be pointed out. And it can be summed up in one word: complexity. Any technology you get, you need to ask the question: can I fix it, if something goes wrong? If the answer is no, you can’t; you need some specialist to fix it for you; then you are not self-reliant. Cars, for example, are now so complicated they need to be attached to a computer in order to be fixed. Investing in a bicycle as a back-up is probably a good idea. Everything is becoming more and more complicated these days and as a result that makes our economy highly specialized, very productive and powerful (at least it was before coronavirus), yet at the same time extremely fragile. For that reason, I suggest that any technology you bring into your home be as simple as possible, or, if it is not, make sure you can do without it in a pinch. For example, you can substitute a large bucket for a washing machine and a clothesline for a dryer, in a pinch.

All of this, of course, falls under the heading “Preparing for the Apocalypse” above. I’d much rather experience the Rapture, but I suspect the reality of the coming months will probably be something in between.

Satan is a Liar. And Jesus Christ is the Lord. Repent and be saved. Yeah, I know you’ve heard it before. But have you ever heard it from the antichrist before?

Capitalism, Socialism, and Freedom

Time to ruminate on capitalism and socialism again. To be honest, I’m probably not the best person to talk about this: I’ve never studied economics. But I’ve been living in a capitalist country for nearly fifty years now and like to think I’m good at thinking things through (and yet, I think I’m the antichrist).

Anyway, on too my discussion. I had a socialist friend in college—a good guy and a good friend. He was always railing against capitalism. One day he mentioned the “labor theory of value” and I finally understood why he was angry. Basically, in a capitalistic corporation headed by a CEO, etc… the low level workers are the ones primarily responsible for producing the product, and yet they are the ones who reap the least benefit. I think that’s basically true. And, I agree it is an injustice. I just don’t trust the government to fix it.

But let’s return to the problem. There is more to monetary value, though, than labor. Smart decisions, for example: responding to markets, making wise investments, and a plethora of other things I don’t understand. To be fair, though, I think there is an injustice when a factory worker for a corporation pulls down 30k a year, while the CEO pulls down 30 million—and it is those at the top who decide how much each individual earns. The corporation would cease to exist if all the workers vanished (unless replaced with automation—which is coming). Likewise, I’m sure a poorly-skilled CEO will quickly lead the corporation to destruction.

I remember one of my philosophy professors many years ago saying that he didn’t like working in committees because nothing gets done. They go back and forth, back and forth, and take forever to agree on a course of action. Committees (or other groups of people) are democratic in nature; individuals are more capable of efficiently making decisions. We should keep this in mind in terms of the capitalism/socialism debate.

A moment’s reflection will show that this is a critical distinction between the two systems—in theory. A capitalist system incorporating a well-defined hierarchy will be more efficient at making decisions and seeing them through. A socialist system purports to be more democratic (in real-life socialist countries, I don’t think this actually bears out: socialist leaders invariably benefit more from a country’s wealth than capitalist one’s—until the capitalist ones leave office. I’m inclined to think our leaders, whether democratic or socialist, will, in general, over benefit some). So the conflict between capitalism and socialism can be seen as a struggle between decision and democracy. So, a capitalistic company with a hierarchical structure likely is probably more efficient in terms of decisions. Those at the top will likely have a disproportionate amount of power and resultant money from business. A socialist company could have a level structure, but if they are set up to be democratic decision-making efficiency will be lost. All of that is “in theory.” Like I said, socialist leaders usually have an inordinate amount of wealth while their people very little.

What is missing, though, in this discussion, is the notion of FREEDOM. Which system nurtures the greater degree of freedom? To date, I think that victory belongs to the capitalist, but this is stretching my knowledge base now. Sure, in a capitalist society you may be able to chart your own course, but how “free” are you if you lack the money to buy even a cup of coffee? Socialism promises (but rarely delivers) a greater share of the wealth to all. And, so they say (or should say), wealth is used to cultivate your freedom. However, if we are interested in freedom, must we choose between capitalism and socialism? Is it not possible to have a company based on capitalist principles with a hierarchical structure, etc… and a company based on more socialist principles operating side by side in the same economy? I think it should be. Both should be allowed in a FREE society. And if the socialist company can’t compete with the capitalist one, that’s not the capitalist one’s problem. Or vice versa. So, I’m inclined to think that the more important feature of an economy is not socialism or capitalism, but FREEDOM.

Capitalism is usually equated with freedom, but perhaps it is possible for a socialist system to incorporate more freedom and make itself more attractive. If I retain control of determining what products I purchase, what jobs I pursue, where I live, etc… in a socialist system, it might be worth looking at.

Lastly, I like Doritos and I don’t expect the capitalists will ever try to take them away from me. I am not so sure of the socialists.

Money Is Technology

I want share an insight I had a number of years ago. It’s not a particularly profound insight, it was just a curiosity I noticed. Basically, I realized that money is a form of technology. Very, very old technology. Perhaps I would be able to convince you more easily if I had a clear definition of technology. But I don’t. These days, I usually conjure up images of electrical gadgets and doohickeys when I think of technology. Money, of course, is nothing like that. It’s little more than a substitute for other things of value be it food, labor, or pieces of the other aforementioned technologies.

Long ago, man kept what he killed and that was about the end of it. Then he (and she) advanced a step and began bartering back and forth so as to allow for greater distribution of goods. But the barter system was inefficient. So some genius somewhere invented money. Basically, we took something of value and allowed it to represent something else and we traded it in exchange for goods. Originally, we used gold and silver and similar such stuff. Somewhere along the way we traded the gold in for something almost without value: paper. Now we are transitioning to something truly devoid of value: electrons flowing in circuits. Electronic money is the wave of the future much to my personal chagrin.

Anyway, what is clear is that money is tied to us in a very deep, intricate way. It is like the technology on which all other technologies rely. It is the technology upon which all other technologies are built.

Wow. I was expecting to write maybe one paragraph on this topic and I squeezed out three. Chalk one up on my innate ability to ramble.

What Do I Need With A Forklift?

What do I need with a fork lift? Perhaps that is a silly question, but I think it is an important one and it is one the Left doesn’t understand. Or maybe I don’t understand it. Business and economics were never a strong suit of mine on account of the fact that I was never interested in them very much so I never took any courses in them when I went to college. I read one or two books on the subjects in my later years because that’s generally a good idea. In a capitalist society, some basic knowledge of economics and business should be, if not mandatory, at least highly recommended.

Anyway, back to my point.

The Left always goes on about how unfair it is that less than 1% of the population controls 35% or some other huge number of the wealth in the United States. I don’t want to get into a detailed discussion of income inequality because, like I said, my economic credentials are somewhat lacking. However, I do want to make one point. From my understanding, wealth entails not just money, but other assets and holdings as well. How do these kinds of discussions take into account corporate holdings such as assets (like a fork lift) and what have you? Are corporations simply ignored in the calculation? That is, does the discussion revolve simply around monetary income of the individual people? By their very nature, corporations own stuff … lots of stuff … lots of expensive stuff. Like forklifts, trucks, land, and everything else imaginable. Most of those things I have absolutely no interest in owning. I might find a use for a truck, but probably not one of those big eighteen-wheelers, and certainly not a fork lift. I can make use of land, in a reasonable amount, but not something like a computerized cash register. My point is that these things are assets and therefore constitute corporate wealth. Naturally, the people at the top of the corporation control what is done with them, but only to a limited degree. Their everyday use is determined more by the natural structure and inner-workings of the corporation than by the whims of the corporate leaders. For example, although it is within the power of the corporate leader to take the main computer out of the company store and beat on it with a baseball bat, they probably won’t do that because it doesn’t help the overall business. Imagine that.

If you recognize the above point, you should also recognize that you cannot take away corporate assets without provoking catastrophe. A corporation without the assets it needs to perform all its work will not run properly. The same can be said for corporate money. Money is the lifeblood of a corporation. Without it, it collapses. And when the corporations collapse … we will starve.

Anyway, I just want to point out that I have absolutely no use for a fork lift in my home. The corporations can keep them. As well as the oodles of cash in which they swim … because I realize they need that cash to bring the products I need to me.