This reads like a figurative kick in the face to those who argue against free education and social programmes "because the market will solve it and those that work hard enough will make it, so it's fair". The world is deeply unjust economically and the vast majority loses from that, and those, that manage the inquality by using the cheap larbor and forced constraints of the disadvantaged to serve the more fortunate ones, win. Even the fortunate ones win from rich neighbours, so there should be a big consensus for universal conditionless free education, social security and health insurance backed by the government.
I know this might be interpreted as a flamebait and I see the common "but the government is incompetent/corrupt/inefficient" answers already, but those don't negate what I just wrote in any way upon closer inspection. However, this is genuinely how I feel and I feel stupidified when I see how these programmes aren't yet serious international standards.
> there should be a big consensus for universal conditionless free education, social security and health insurance backed by the government.
You allude to the best argument for these things, something like: "people are born into the world with a set of advantages and disadvantages they neither earned nor deserve, so we should do our best to even the playing field".
But you missed the mark in terms of identifying the best argument from the other side. "Because the market will solve it and those that work hard enough will make it, so it's fair" is not the argument. That's a just world hypothesis. The good argument is: high taxes and large social programs distort economic incentives; if you "tax the rich at 70%," people will behave differently, and your society will be less wealthy as a result. Which would you rather have? A wealthy society with inequality or a poor society without inequality? Anyway, the fundamental point here is that all human progress is agonistic, and "evening the playing field" will result in less progress, not more.
We're trying to walk the line between these two perspectives. We have "free" social programs but wealth still buys all kinds of advantages. I think we're doing a fairly good job, but it's imperative that we take both sides of this argument seriously. There's no reason to think we can have our cake and eat it.
> Which would you rather have? A wealthy society with inequality or a poor society without inequality?
This is a good as in goodwill and honest point here. However, I think it isn't a dichotomy based on evidence. For example, most of northern Europe has these programmes and they are not poor, and there exist many poor countries without these programmes. If I thought these programmes would leave the people less wealthy, healthy, happy, I would be against them.
If the programmes create negative incentives in people as to not be productive and successful to a degree that offsets the advantages in reduced crime, more tax because of higher educated people and thus salary and countless other and not easily measured advantages like progress on science, culture, and art, then I would be against those programmes. This is however not what we are seeing. It is a scary shadow on the wall while we can see the cute bunny in the foreground with our eyes directly.
That’s a falsifiable argument. US has averaged faster economic growth with high marginal tax rates than low ones. The reality is rich people have no choice but to invest their wealth or inflation eats it up. The only real change from 15% to 70% marginal tax rates is the amount of effort put into tax avoidance. The reason for this is maximizing income occurs before taxes are calculated, so you can get nearly identical behavior independent of tax rates.
Further, equality of opportunity is surprisingly cheap over time. You end up with more capable workforce which pays for the cost of maintaining it.
PS: Now targeted deductions are another story, those can cause real economic harm.
I don't think you've falsified the argument. Maybe you would have if economic growth and marginal tax rates are the only variables.
I think it's pretty clear that progressive taxes create negative incentives, particularly when it comes to encouraging people to get rich in the first place (which usually means starting a business).
> Further, equality of opportunity is surprisingly cheap over time. You end up with more capable workforce which pays for the cost of training it.
Yeah, the question is where to draw the line. Public education seems like something we definitely want. But if we truly want equality of opportunity, I don't think we can have communities like this:
> Schull is a very small community, couple of thousand max but there's been a lot of 'alternative' type immigration there from other first world countries, artists etc from places like England (eg Jeremy irons), Netherlands so its secondary school is pretty progressive afaik. They have a slipway to the bay right next to the school so the school does sailing classes etc. The planetarium in question is a stone's throw from the school. County Cork has a youth orchestra. Overall not the worst place in the world to grow up.
Everyone can't have sailing lessons and a planetarium.
Plenty of evidence for the same thing exist in other countries. Which is my point, if that’s your line of argument you need to verify it not just assume it to be true.
Anyway, few people are going to turn down becoming rich because they end up with only 100 million instead of 300 million dollars. Opportunity however plays an important role and again you can measure relative importance via social mobility. Comparing different counties at different time periods and once again Opportunity ends up far more important than high but not punitive tax rates.
We are never going to have absolutely identical opportunity for everyone in society. But, these are not platonic ideals rather measurable and testable pragmatic choices.
> Which would you rather have? A wealthy society with inequality or a poor society without inequality?
Is a powerful false dichotomy argued by the rich. It is NOT a poor society, but people fear they would be less rich, when 99% of them won't be if you add in the societal benefits.
Just having good education is going to make your country wealthier in a generation.
That's ok as far as it goes, but it's not very far. To be convincing, the argument about negative incentives resulting in lower growth needs to be expanded on more than it usually is. (Or is reasonable to do in casual conversation.)
A few years ago, we were considering relocating to Toronto. We went to a school and had a meeting with the principal of the local school. This principal said to us in no uncertain terms that if we can afford private school, to not send our children to public school in Toronto. Now, could this be a selfish reason on his part? Sure, but I doubt it. He walked us through why.
Toronto is huge.
What you see with the teenager in question is a small town with decent enough resources. And that is the decision we took ultimately: to move to a small town with rich residents.
I grew up on the other side of that coin—a small town without enough resources. It wasn’t the worst of them, but when school boards were amalgamated it sparked internal politics as to where funding was allocated. I was a kid, so I wasn’t directly involved, but looking back on it—it was sad. Rural regions basically battling each other to keep textbooks up to date. And even in that state there were kids winning nation-wide scholarships. The problem was the others who weren’t so gifted had opportunities stripped from them by some man they’d never know. I could go on an anger-filled rant about it but I won’t. (Haha?)
I prefer to say anything I’ve done or accomplished was in spite of that situation (and because of good teachers) rather than because of those stringent circumstances.
But yes, in Ontario the best schools are probably just outside of the big city centres rather than in them. Upper Canada College for one. The world that places like that exist in is so far removed from the Canada I grew up with that I still think I’d have to see it in person to believe it exists. I’m only partly exaggerating.
I hope we can do better than that in the future I’m realizing that we’re all better off if every child has the opportunity to learn and experience from the widest array—rather than limiting those opportunities to children who had the good fortune of good circumstance. It’s not exactly in their control, and it seems like a hell of a good investment to me.
Sounds good but it's that kind of thinking that leads to the current situation (I mean this literally) . School is basically glorified babysitting at this point.
As an aside, I do not trust the Fraser Institute to be unbiased on the matter of any kind of public spending. Public spending is a essentially against their core values.
> What you see with the teenager in question is a small town with decent enough resources
Everything bar the geo-specific things (sailing,planeterium) come from the same money pot for every school in Ireland (ROI) and are pretty much the same for most schools countrywide. The more disadvantaged an area your school is in, the more resources(a la funding/support) it gets.
This extends outside school to community. The most disadvantaged/crime-ridden communities get the most government funding(local sports/after-school activities/local community centers etc.)
""but the government is incompetent/corrupt/inefficient""
There's always some kind of overhead. Open markets and open societies require infrastruture.
Rules, government, lawyers, accountants, judges, cops and so forth are cheaper (for society) than anarchy (laissez faire).
I'd take the Freedom Markets™ advocates a bit more seriously if they offered any kind of alternative. Something a bit more constructive than "taxes are theft!".
Person's A child won't be held back tangibly if instead of a living on a 100+ million family fortune, that instead it's a fraction of that due to equalization of education efforts. Man cannot be born as equals when one child could buy their entire university, while another cannot even afford basic living.
And what happens to society as a whole when we abandon a person's right to own the products of their labor? What happens when highly productive people decide they have better things to do than go to work and get taxed at 70%?
A lot of people like a carbon tax because it will lower carbon emissions, if you tax productivity it has the same effect. A lot of people like clean energy subsidies because it makes clean energy more common, unfortunately subsidizing poverty often has the same effect.
I'm not saying you're wrong to care, I'm saying it's not a simple problem.
> And what happens to society as a whole when we abandon a person's right to own the products of their labor?
You don't acquire a $100 million fortune by performing 1000x the labor of a person with $100k, you get it by skimming the fruits of a lot of other people's labor.
No, you add value to their labor and in return get to keep some of it.
Or you can solve some previously unsolved problems which allow you to produce better products for lower costs than your competitors. This is how Carnegie, Rockefeller, Walton, Bernard Kroger, Aaron Montgomery Ward, Richard Warren Sears, etc. all made their fortunes. Even modern tycoons like Jeff Bezos, Elon Musk, Bill Gates, etc.
Can they get too much market power and start stealing from society? Absolutely, that's why we have anti-trust laws. But to see a fortune and assume a theft is to fundamentally misunderstand economics.
> No, you add value to their labor and in return get to keep some of it.
How much value? Who determines how much you get to keep of it? These are highly charged political questions that have driven a lot of economic history!
> But to see a fortune and assume a theft...
I never said theft. I responded directly to the idea that people vast wealth is merely "the fruits of one's labor." And I stand by this statement: it is not, it is the fruit of many people's labor.
>A lot of people like a carbon tax because it will lower carbon emissions, if you tax productivity it has the same effect.
It's not the same situation, so there's no reason to think it'd have the same effect.
A carbon tax's effect would come from opportunity cost. A company stops a behavior because of a carbon tax when they've found something more profitable. The tax just shifts the line of "more profitable."
But what's somebody going to do if you tax their wealth more? They only "other opportunities" are leaving the country or having more free time. The first is definitely a risk to consider, but the second seems unlikely for the class whose income comes from just investing their wealth. Why not invest, even if the profits are smaller?
Taxing something makes it less common. Doesn't matter if it's carbon, cigarettes, sugar, productivity, or investing.
Tax investing and that shifts the line just like a carbon tax, except in this case the people investing are more likely to start buying politicians or sending their money overseas. Those things don't benefit society like having them fund the research and diligence necessary to find and invest in the next Google, the next Target, or the next energy revolution.
I know this might be interpreted as a flamebait and I see the common "but the government is incompetent/corrupt/inefficient" answers already, but those don't negate what I just wrote in any way upon closer inspection. However, this is genuinely how I feel and I feel stupidified when I see how these programmes aren't yet serious international standards.