Topic: Economics
Continuing the discussion about "rich vs poor" For some reason, I cannot answer or even see any further comments on the original "The rich vs poor fallacy" article, hench this attempt at getting around the website's limitiations.by Dale Husband
(liberal)
Wednesday, August 5, 2009
Someone sent me this, and it was supposed to be published as a comment on my original article titled, "The Rich vs Poor Fallacy". But I cannot see it there among the comments where it belongs, nor have I been able to post a reply there, since the comment window was not visible to me like in all my other articles. First, I must link to the original article:
The comment left there, showing up in my e-mail, reads as follows:
{{{Dale,
My wife and I are the people you don't believe exist.
My parents never owned a home, while I lived with them anyway. I was brought up wearing the same jeans to the beginning of the school year that I wore at the end of the last. I hung out with the wrong people. I smoked alot of pot. I did things that I now regret. I never went to college. I joined the Navy and partied all over the world. I was an Ugly American.
When my wife and I met, she had saved a couple thousand dollars, but lacked the intestinal fortitude to risk it. I had no money, but I had the fortitude and skills to pursue a home remodel project. With that we bought a 3 bedroom 1 bath home and turned it into a 6 bedroom 3 bath home while we both worked full time and spent no money on anything else. I would bet you're thinking we built a McMasion..... no. We opened our home to old folks and took care of them for years. It never paid for itself, but we slept well.
Now, we own a number of rental homes, a few bare lots and a humble(actually), home in the woods. My wife still volunteers for local NGO charities and I am a volunteer EMT/Firefighter. I concede that we drive nice cars compared to the average, but if you drove up to our home, you would NEVER suspect we've 'got bank'.
I believe that our Founders set up a government they knew would ultimately fail, but hoped would survive long enough to succeed and broadcast the benefits of freedom into the (hopefully)distant future. They were incredibly intellegent, and more importantly, incredibly wise. They understood the frailty of the human condition and debated in minute detail the pros and cons of nearly every facet of the document they sought build. If you havent, I'd encourage you to read and reread the Federalist Papers. You'll see that even then, the free press was considered a requirement to both the establishment and the preservation of this government. And the Second amendment was specifically included to ensure that the citizens were able to take back their government from the enevitable tyrany that has followed most republics.
Read history... Please.}}}
Now, I will attempt to answer these objections.
My wife and I are the people you don't believe exist.
Where did I say that? In the original article, I wrote:
[[[Most wealthy people grew up in wealthy families and recieved their money from their parents or other older relatives and thus had access to more opportunities from the very beginning, not because of their abilities but because they were lucky enough to be born in the right families.]]]
Most, not all. I always try to be very specific with my words, and expect all of them to be noted.
[[[Meanwhile, those who grew up in poverty, even if they are just as smart, beautiful, and hardworking as the average rich person, tend to remain in poverty because they have less access to the money they would need to invest, to educate themselves, and to afford the latest technologies.]]]
[[[The reason we hear so much about poor people making themselves rich by their own hard work is because such things are extremely unusual and rare and the corporate dominated media tends to focus on the unusual.]]]
I said unusual, not impossible. Assuming an absolute statement I did not actually make is a logical fallacy called a strawman.
Assuming the story above is true, I find no fault with what the man and his wife did. Indeed, it seems highly commendable.
{{{I believe that our Founders set up a government they knew would ultimately fail, but hoped would survive long enough to succeed and broadcast the benefits of freedom into the (hopefully)distant future.}}}
Why can't we have a government and society that might last forever, even while evolving to improve over hundreds or thousands of years? If we assume that we are doomed to fail, that might actually be a self-fulfiling prophecy.
{{{If you havent, I'd encourage you to read and reread the Federalist Papers. You'll see that even then, the free press was considered a requirement to both the establishment and the preservation of this government. And the Second amendment was specifically included to ensure that the citizens were able to take back their government from the enevitable tyrany that has followed most republics.}}}
I don't see what that has to do with economics and the basic unfairness of unrestrained capitalism, but those are indeed good things to learn from and understand.
Now for those who are not familiar with the original article, PLEASE read it and ALL the comments that came before, to avoid repeating the same talking points I dealt with before.
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Unrestrained capitalism? Where is this "free" market that is screwing us over? I look around and can only see one maket that is actually free and that is the black market. Weed and cocaine prices have been flat or falling for decades. This seems to indicate that allowing prices to be set through actual supply and demand can and will result in a favorable outcome for the consumer. Legalize it and tax it and hand out a little "farm bill" pork to major corporate production and see what that does to the price.
Posted By: Walt Thiessen
Date: 2009-08-05 11:36:15
Instead of behaving defensively to what the reader you quoted wrote to you, why not directly address the points she made? Seems to me she made some very good points, most of which you would probably agree with if you thickened your skin a little bit and took the time to read them in a more positive light and address them directly. Instead, you decided to treat the letter as little more than a personal attack. That's just sad.
By the way, the reader comments function of the website works just fine, as evidenced by the fact that roughly 35,000 reader comments have been left successfully on this website in the past year. As I explained to you in private correspondence, the letter writer just didn't use the reader comment form at the end of the article. Don't assume that just because someone doesn't use a reader form that the website has "limitations."
Read both the columns. Unfortunately, it is not based in reality. America has the most movement between socioeconomic classes than other nations for a reason. The system works. Only when government interferes do we have problems.
No one "deserves" to be billionaires? If they earned it, they deserve it.
Most wealth came from their parents? So? The assets of the parents should be forced to go elsewhere? Not in a free society.
I think you have the train of events backwards. The parents chose to have children and thus they were born into wealthy families. The children were not born and then randomly distributed between wealthy and poor families. Luck has nothing to do with it.
Unrestrained capitalism? Where is this "free" market that is screwing us over?
In an absolute sense, there can be no such thing as a "free" market. Totally unrestrained capitalism is economic anarchy, in which there is no deterrent to force or fraud by businesses. I was speaking of relatively free markets compared to socialist or communist economies. But even there, the multi-generational rich (as opposed to the self-made rich) have a natural advantage over the impoverished that seems unfair.
Incidentally, I oppose Communism because it merely replaces the giant corporations as the economic elite with the government itself, which we now realize helps no one but those who are in the government. Karl Marx's idea of a "dictatorship of the proletariat" was sheer nonsense.
Weed and cocaine prices have been flat or falling for decades. This seems to indicate that allowing prices to be set through actual supply and demand can and will result in a favorable outcome for the consumer.
Bad example! What about the social "cost" of addiction, violence, and death caused by illegal drugs?
Legalize it and tax it and hand out a little "farm bill" pork to major corporate production and see what that does to the price.
Got some actual statistics on how alcohol prices were affected by the end of Prohibition?
America has the most movement between socioeconomic classes than other nations for a reason. The system works. Only when government interferes do we have problems.
May we see some actual statistics on America's social mobility compared to other nations? Besides, even if we are better than other nations, there is still room for improvement.
No one "deserves" to be billionaires? If they earned it, they deserve it.
Yeah, but what if they didn't earn it? What if some of their wealth was simply given to them by their parents and then they proceeded to increase it through manipulation of the stock market instead of hard work and creativity?
Most wealth came from their parents? So? The assets of the parents should be forced to go elsewhere? Not in a free society.
I guess Paris Hilton's living an easy and self-centered life, at least until she spent some time in jail, didn't bother you? Yes, I know lots of poor people go to jail too, but at least they have an excuse if they were trying to lift themselves out of poverty through crime. What excuse could a rich person ever have to break the law? Self-entitlement is like a cancer with such people. They might never have that attitude if they were forced to make their own living through work from the ground up like the rest of us.
Instead of behaving defensively to what the reader you quoted wrote to you, why not directly address the points she made? Seems to me she made some very good points, most of which you would probably agree with if you thickened your skin a little bit and took the time to read them in a more positive light and address them directly.
I'll remember that next time. Thank you.
"She"? Since the writer referred to his or her wife, I assumed he was male. How did you know she was a lesbian?
By the way, the reader comments function of the website works just fine, as evidenced by the fact that roughly 35,000 reader comments have been left successfully on this website in the past year.
Well, there WAS a problem with that ONE article I wrote, which I never saw on any other article. I can't explain it, and it bugged the hell out of me.
Posted By: Walt Thiessen
Date: 2009-08-05 17:05:19
Sorry, should have said "he."
One of the big problems with discussing things solely in terms of generalities is just that...they're generalities, with vague and usually poorly defined assumptions behind them. With that caveat in mind, I'll make a couple of points.
"In an absolute sense, there can be no such thing as a 'free' market."
There's a meaningless phrase if I ever saw one. By the definition of "absolute" I infer you to be using, in an "absolute" sense, there's no such thing as communism either. Or fascism. Or any other ism, since isms are not grounded in absolutes but rather in imagination.
In a practical sense, free markets cannot exist without protection of individual rights in every sense of the word. That's true. Inferring that this truth therefore requires a government's existence fails the test, however. Individuals can conceivably protect their own rights via self-defense. We can debate whether such a society is desirable, but saying it's impossible is, again, simply not true.
"Unrestrained capitalism = economic anarchy" is a meaningless phrase too, because anarchy means "no state" while economics is the study of production and exchange of goods and services. Are you saying that production and exchange cannot take place without a government? Get real, please. Of course they can. They did for centuries before any government better organized than "Og bigger than you, so he steals your food" existed. Again, we might debate the desirability of such a state, but saying it's impossible is simply belied by the facts.
"May we see some statistics about social mobility?"
You mean, social mobility cannot be happening unless there are statistics to prove it?
That should be enough to keep you busy for awhile.
Once you're done spinning in your mind over your mental fallacies, I have a suggestion to make. Instead of engaging in wild, poorly defined and ill-founded generalizations, how about talking about reality for awhile instead?
One of the big problems with discussing things solely in terms of generalities is just that...they're generalities, with vague and usually poorly defined assumptions behind them.
That is indeed true. But generalities are exactly what I find in most information sources which define ideologies. There are exceptions to every rule, just as there are wealthy people who do honor their society by not being so damned greedy. I do not attack those and never will. But it's like referring to "Germans" as the enemy during World War II, even while allowing for the possibility that not all Germans were dedicated followers of Hitler during that war. But most were.
In a practical sense, free markets cannot exist without protection of individual rights in every sense of the word. That's true. Inferring that this truth therefore requires a government's existence fails the test, however. Individuals can conceivably protect their own rights via self-defense. We can debate whether such a society is desirable, but saying it's impossible is, again, simply not true.
Individuals may indeed defend themselves with handguns only to find themselves overwhelmed by an organized force of thousands of men with AK-47s, and perhaps tanks, rocket launchers, and other more powerful weapons. And then this force may go on to form a government, assuming it didn't come from the government already existing. Just as nature abhores a vacume in physics, so it must also do so in politics. Even Somalia, which does not have a functioning national government, is divided between many tyrannical warlords, including those who wish to impose Islamic law. So in a state of anarchy, we would have competing factions constantly fighting, all at the expense of the people who simply want to make a living, like what one would expect to be done in a free market economy. So, no, I have no desire to debate whether anarchy is desirable, since I already believe it is only destructive and temporary. The longer it lasts, the worse the situation.
"Unrestrained capitalism = economic anarchy" is a meaningless phrase too, because anarchy means "no state" while economics is the study of production and exchange of goods and services.
Perhaps I was using the wrong term. I meant "economic anarchy" as in "total lack of state regulation of an economy". I made a distinction between economic anarchy and political anarchy, which is indeed "no state". Can you point to a better term for me to use?
Are you saying that production and exchange cannot take place without a government?
No. But wouldn't the leaders of any private business powerful enough to dominate an economy also seek to take the place of a government, assuming one did not exist?
You mean, social mobility cannot be happening unless there are statistics to prove it?
No, of course not. I'm just asking for more details to support a claim. Wouldn't you?
Instead of engaging in wild, poorly defined and ill-founded generalizations, how about talking about reality for awhile instead?
Your suggestion is noted. Which is why I already mentioned Germans during World War II, Somalia in recent years, Paris Hilton, and Karl Marx. Aren't they examples of reality?
[Drew; My wife and I are the people you don't believe exist.]
[Dale; Where did I say that? In the original article, I wrote:
"quoted material ommitted for brevity"
Dale; Most, not all. I always try to be very specific with my words, and expect all of them to be noted.
Dale; I said unusual, not impossible. Assuming an absolute statement I did not actually make is a logical fallacy called a strawman.
Dale; Assuming the story above is true, I find no fault with what the man and his wife did. Indeed, it seems highly commendable.]
Drew; In your response to Eric, you stated,
["And that article of yours insults my intelligence with this claim:
"The wealthy run highly efficient operations both in business and at home. Most live in average neighborhoods, and drive average cars. They’re not interested in keeping up with the Jones’ – because the Jones’ aren’t financially free. It takes lots of energy to consume big mortgages, change homes every few years, buy the most recent model cars, and wear the latest fashions. The wealthy drive typically American made cars! Japanese cars come in 2nd place; half of these are Toyota Camrys. Yes, significant value per dollar is the key here. The Millionaire’s Motto: You aren’t what you drive. The status cars – Lexus, BMW’s, Mercedes? At 6.4% or less per each brand."
Are you really that ignorant as to assume that's true? I don't. If you are a millionaire yourself, and live like that, let me know."]
Drew; I did exactly that and no more.
Drew; The info quoted by Eric is the truth. If you are the way that you state, "I am also willing at times to listen to my opponent and consider his point of view, especially if that person is known by me to be honorable. If we do not listen to others, how can we ever grow in knowledge?", You would bother yourself to get up, research and concede the truth, instead of bashing someone you don't even know.
[Drew; I believe that our Founders set up a government they knew would ultimately fail, but hoped would survive long enough to succeed and broadcast the benefits of freedom into the (hopefully)distant future.]
[Dale; Why can't we have a government and society that might last forever, even while evolving to improve over hundreds or thousands of years? If we assume that we are doomed to fail, that might actually be a self-fulfiling prophecy.]
Drew; Dale, we are human. It has been proven by thousands of years of history that we as a species are incapable of stability for periods of that length. No government in history as been successful in that persuit.
[Drew; If you havent, I'd encourage you to read and reread the Federalist Papers. You'll see that even then, the free press was considered a requirement to both the establishment and the preservation of this government. And the Second amendment was specifically included to ensure that the citizens were able to take back their government from the enevitable tyrany that has followed most republics.]
[Dale; I don't see what that has to do with economics and the basic unfairness of unrestrained capitalism, but those are indeed good things to learn from and understand.]
Drew; Dale, I truely hate to be the one to break it to you, but life is not fair. Now before you flame me, please noodle on this for a moment. If, as you claim in another article, evolution has brought us to this point, is it even reasonable for an intelligent individual to expect the product of a cosmic accident to lead an altruistic exsistence? Really?
You describe yourself as honorable skeptic, but if you reread your responses to the people that taken the time to write to you with their opinions of your work, you'll hopefully see that you don't respond with honor. You jump on good folks sharing their opinions. Not real conducive to peaceful coexsistence.... is it?
Hello, Drew. So you were the one who sent me the comment, eh?
I did exactly that and no more.
So you have. Thank you for returning and revealing yourself to me.
If you are the way that you state, You would bother yourself to get up, research and concede the truth, instead of bashing someone you don't even know.
Did I bash YOU? No, not intentionally. Actually, my whole point in making this new essay was to continue the discussion with the person who gave me such an excellent comment, if only he would show up. If I were so dismissive of you, I wouldn't have bothered to do that in order to answer you properly.
Dale, we are human. It has been proven by thousands of years of history that we as a species are incapable of stability for periods of that length. No government in history as been successful in that persuit. I assumed that those governments in the past failed because they were non-democratic and thus were not responsive enough to the needs of the people. I even wrote about that issue:
[link edited for length]
Dale, I truely hate to be the one to break it to you, but life is not fair.
Indeed, it's not. I am reminded of that fact every time I look at my wife, who was born with a congenital heart condition and is prone to epileptic seizures.
If, as you claim in another article, evolution has brought us to this point, is it even reasonable for an intelligent individual to expect the product of a cosmic accident to lead an altruistic exsistence? Really?
Support for the scientific theory of evolution does not mean one also supports the sick perversion of "Social Darwinism" in which members of a society ruthlessly destroy each other through competition. Altruism can indeed evolve via kin selection, like in social insects such as bees, ants and termites. Even if individuals sacrifice themselves for the good of the colony, they do so because the colony still have copies of their genes, which perpetuate themselves even if some of the individuals die.
Since humans have evolved high intelligence, they have some control over their lives, and thus can work together to make a more just and fair society for all.
You describe yourself as honorable skeptic, but if you reread your responses to the people that taken the time to write to you with their opinions of your work, you'll hopefully see that you don't respond with honor.
That's your opinion. Maybe I am too skeptical and not honorable enough?
You jump on good folks sharing their opinions. Not real conducive to peaceful coexsistence.... is it?
Granted. I get jumped on by conservatives and libertarians often here too. I always thought that was the nature of debate.
Dale, we are human. It has been proven by thousands of years of history that we as a species are incapable of stability for periods of that length. No government in history as been successful in that persuit. I assumed that those governments in the past failed because they were non-democratic and thus were not responsive enough to the needs of the people. I even wrote about that issue:
The Treasury study uses income tax return data between 1979 and 1988, tracking the adjusted gross income of a group of households that paid income taxes in all ten years examined. The study finds that 86 percent of individuals who were in the bottom quintile in 1979 had moved up by 1988. An individual in the bottom quintile in 1979, in fact, was more likely in 1988 to be found in the top quintile than in the bottom one.
The impressive degree of mobility found in the Treasury study has been attributed largely to two factors. First, the restriction of the sample to only those households that paid taxes in all ten years introduced a bias toward the economically successful, as only half of all households met this criteria. 13 Second, the study compared the 1988 incomes of those in the sample to the incomes of the population as a whole in 1988, thereby capturing the natural tendency of earnings to increase as individuals grow older, and identifying this as economic mobility. 14 That is, the average income of the sample would be expected to rise each year simply as a result of the individuals in the sample growing older and gaining more work experience. The average income of the population as a whole, however, would be expected to remain constant. 15 To count this increase in income as a component of "mobility" is to use a significantly different definition of mobility than was employed in the other studies discussed above.16 Because the Treasury study makes no effort to examine change in an individual's relative position within the sample itself, its results cannot be compared to the other studies.
Similarly, Cox and Alm (1996) find significantly higher levels of mobility than in most previous studies. They use the PSID to examine individual incomes between 1975 and 1991 for individuals who were age 16 or over in 1975. 17 They find that only 5.1 percent of individuals in the lowest quintile in 1975 remain in that quintile in 1991, while 29 percent of such individuals are in the highest quintile in 1991.
Thank very much for the civility you've shown. I appreciate that very much. I too love the stuffing out of a good debate, but I tend towards the truth seeking end of things, as opposed to the need to win end, so I try very hard to only engage in "civil" debate.
I'm VERY sorry about your wife's condition. I hope she's doing well.
No, I don't think you bashed me, but you were fairly abrupt. No harm though, friend.
I do wish that we (humans) were a little better at getting along. Governments have fallen for many reasons, but it seems that greed, power and sloth lead the pack. To be honest, I was kind of playing with you about evolution - trying to make a valid point, but playing with the wording. I don't know why, but people can't seem to stick together very long. Hundreds of years is doing pretty good historically, but I'd love to see us last for thousands.
Given your last response, I would like to apologize for questioning your honor. It seems we just have different styles of debate.
Another comment was posted at the "The rich vs poor fallacy" article that I got in my e-mail. I'm reposting it here:
When will you radical libertarians learn from your f****** critics? It's no wonder you have people like Lloyd Kempson, Master C, Jake Hirsschorn and this idiot posting statist garbage when you articulate your own arguments on such poor terms?
I see people hear pushing for greed as a virtue. Dale may be a fool, but he's right here. Greed is NEVER a virtue.
No need to answer that, except to note that statists and liberals (or followers of any political ideology, for that matter) can be greedy, intolerant and foolish.
Yet another comment on the original essay that I will repost here:
I've heard this argument before. It boils down to this: you have an obligation to the society that bred you. Yes, you do! Absolutely. And how does it work in a capitalist system? Through the incentive factor!
Capitalism is unique in that it is the only economic system with the construct called capital. To cap or impair one's ability to accrue it is automatically collectivist, whatever you may say.
In socialist societies, there's a similar system, but it's nowhere near as effective: The workers absorbs all the profits and the wealth is split democratically. Capitalism merely shifts this emphasis to the individual, and you have what Adam Smith called the "invisible hand".
The MINUTE you start regulating, the minute you drop subsidies, cap wages, or add entitlements, that invisible hand is perverted. It of course, will keep functioning by the laws of supply and demand. but- to get to the topic at hand- instead of promoting higher wages and lower profits, we get the super-elite wealthy class that you speak of.
There are other fallacies. It's a known FACT that just about all private institutions and charities are more generous than the government is, and the "super-billionaire bourgeouise" that you love to hate run them. Why is that? Because, going back to the invisible hand, when we meet our own incentives, and we HAVE extra, we're more willing to give it away to those in need. Too often, the government decides however that a certain group of people aren't giving enough and thus reroute all money to these people.
As Gene said earlier, we do this not only with poor people, but with banks. And it's all because of the invisible hand. It never stops working.
Earlier you said:
I currently use Windows XP on my computer. Was there any real need for Microsoft to introduce Window Vista? What was wrong with Windows 95, Windows 98, and Windows ME to make the newer versions necessary so soon? If it ain't broke, why fix it?
This is incredibly stupid. Back in 1943, a man named Thomas Watson Jr. said we would only need 5 computers for the entire planet! Whether he was right or not is more of a Kantian debate than anything else, but the fact remains, he underestimated demand.
Incentive breeds more incentive. As technology changes, companies are forced to keep up. What this analogy demonstrates to me is that not only do you not understand computers, but you don't understand market forces either.
Who decides who is enough? We do! Democratically. Through the market. We will decide when things should stabilize. That's why format wars end and don't continue in perpetuity.
And the winners of these "format wars"? They obliged public demand, so they should be rewarded. Some great industry leaders have gone even further to provide for the needs of their employers, and give to those less fortunate:
Private industry implemented minimum wage, health coverage, etc. BEFORE government.
You could argue about how this was to satiate them and keep them working for slave labor, but your retorts thus far haven't been better. You argue for a classless society, but such a thing cannot and will never exist.
There will always be a class division between those economically well-to-do, even if you destroy the concept of money. We can't all exist with a million dollars. When everyone is equal, no one will be. How does anything get done without the promise of getting something in return, Dale?
I find most of that comment to be strawmen, really. He tries to depict me as a Communist, when in fact I support the capitalist system in moderation, and see the invisible hand as something that needs restraint, but not to be crippled so it can do nothing. He also ignored many of the other points I actually made in the comments of the earlier essay.
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