Believe those who are seeking the truth. Doubt those who find it. Andre Gide

Wednesday, January 19, 2011

Holier than thou

Took a bit of a break from blogging lately. (I do have a day job, after all.) Unfortunately, I peeked into the blogosphere. Couldn't help it. Big mistake!

Exhausted by economic analysis, Paul Krugman has decided to stump from another pulpit these days. See here: A Tale of Two Moralities (via interfluidity).

Ah, the moral high intoxicating!  The conscience of a liberal...I am reminded of Gordon Liddy's gem:
A liberal is someone who feels a great debt to his fellow man, a debt which he proposes to pay off with your money.
According to Krugman, there is a "great divide" in America today. What defines this boundary?
One side of American politics considers the modern welfare state — a private-enterprise economy, but one in which society’s winners are taxed to pay for a social safety net — morally superior to the capitalism red in tooth and claw we had before the New Deal. It’s only right, this side believes, for the affluent to help the less fortunate.
The other side believes that people have a right to keep what they earn, and that taxing them to support others, no matter how needy, amounts to theft. That’s what lies behind the modern right’s fondness for violent rhetoric: many activists on the right really do see taxes and regulation as tyrannical impositions on their liberty.
There’s no middle ground between these views.  
Is this really an accurate characterization? To me, the divide seems to be defined more over the issue of who (or what body of institutions) should be trusted with the job of redistributing wealth. On the left, we have those who believe that a central authority is best suited for this job. On the right, we have those who believe that local governments, or private philanthropic institutions, are better suited for this job.

I do not believe that those with a libertarian streak (like myself) appreciate being demonized for, say, opposing a tax hike by the central government. I might oppose such a tax and at the same time favor a tax hike at the state or local level (if I thought the funds are to be put to good use). I might be against a tax hike altogether, and be in favor of redistributing existing government expenditures away from the military and to the disadvantaged. Or, I might just want to keep more of my money so that I have greater control over how to disburse it among competing charities. The "liberal" attempt to construe any of these positions as "immoral" along some dimension is, well, simply shameful, I think.


  1. In my view, part of the reason we end up having these discussions is that we needlessly believe that all federal spending needs to be offset by doesnt, at the state levels yes but not fed. There is no operational reason for this so the only reason becomes political. Why dont we just decide how much money a senior citizen that worked 30 yrs at 40,000 a year average should get in guaranteed security payment and leave it at that. Adjust for inflation maybe but we need to stop having fights every few years about whether we can "afford" social security (we can) or whether we can "afford" UE . The immorality, if you will, lies in a govt that fails to provide a certain level of public assistance especially when they hide behind the "we cant afford it " line. Individuals can accurately claim such, the federal govt can not.

    I really dont care if the affluent help the less fortunate or not, but when they use their political to power to lie to people about the solvency of our govt ( we can never be insolvent) and its programs, then they are being mendacious

  2. Greg:

    Not sure that I fully understand what you are saying.

    First, I think it is a matter of arithmetic (not theory) that federal spending needs to be offset by taxation, broadly defined. That is, the feds can tax directly today, postpone taxation (by issuing debt), or inflation tax by printing money.

    Evidently, you do not believe in the concept of a government budget constraint (i.e., your statement that the federal government can never be insolvent). I suppose what you mean is that the government is always free to increase its appropriations (again, either directly or via printing money). In the extreme, one might imagine a government appropriating all private property. But the historical evidence, indeed, even in Venezuela today, shows that there are limits to how much a government can deliver relative to its promises. Conclusion: yes, it is most certainly possible for a government to become insolvent in this sense.

    If I have missed your point, please clarify.

  3. I think PK's post implicitly makes the same argument you suggest...

    One side believes the Government (the Federal government, to be specific) to be the best institution to help the less fortunate while the other side side believes taxation is theft (i.e. the individual can decide best).

    Perhaps 'poverty alleviation' is a public good.

    Also, the whims of the rich may not be congruent with soceity's ideas of how to best help the less fortunate.

    A couple of thoughts come to mind:
    1. German millionaires' response to Gates' giving pledge -,1518,710972,00.html

    2. Leona Helmsley's will.

  4. I have question about your post. You suggest that there is a debate about decentralized systems v.s centralized systems being more effecient. You mention that one may be willing to support a tax cut at federal level, but support tax decrease at local level.

    Wouldn't a decentralized system of taxation lead to higher level of inefficiency? As having different levels of taxes across states. This seems like it would be extension of Barro's tax smoothing model etc.

    As someone whose grown up in the south. Did university elsewhere, I am convinced that the nationwide education gap is constituted in part of decentralized education.

  5. No David you havent missed my point you just dont agree with my premise.

    There is no reason we cannot run a budget deficit every year to perpetuity. This does not mean we can run a trillion dollar deficit every year but there is no reason the budget ever has to be balanced, thats a pure political decision. We have had very few years in the history of our country where we balanced the budget, so obviously its not necessary (and every tie through history that we made efforts to run surpluses, recessions followed very quickly, the last time during Clintons term)

    Knowing this, its clear that we can get past the "dont take my money to pay for something I dont like" argument. We (govt) wont take "your" money, we'll simply spend on what the electorate agrees is in line with their view of public purpose. We (govt) dont need everyones permission, just a majority.

    Adopting reasonable tax policy and reasonable spending policy should be our goal, NOT making sure that the amount of tax we are able to cajole out of people is equal to the amount of federal spending. Its this nonsensical view of the federal budget that drives the insanity AND inanity that we are seeing

  6. Anon (2),

    There's more to decentralization than just taxation. There's a host of benefits, from a Public Choice point of view, of having competitive government. Many view the county as being the optimal size of the bulk of governance-based decision-making, and not the country. The main reason is that it's easier for people to change counties than to change countries.

  7. Anon @ 9:26PM

    No, PK is not making the same argument. The word "moral" in his post makes it clear that he believes that there is a moral divide. I am suggesting that there is no moral divide; simply disagreement on how to implement a particular outcome. And thanks for the link. Kind of feel like those German millionaires should mind their own business.

    Anon at 10:29PM In economic models, centralized solutions are always the best. Of course, this assumes an all-knowing and benevolent dictator. Or it assumes an incredible amount of cooperation in large and diverse societies. One potential problem with localized tax rates is that it can promote a "race to the bottom." But these types of costs have to be weighed against the benefits of decentralized systems. Personally, I do not trust a distant federal authority to know what's best for my locality. And as Lord Acton said: "power corrupts...absolute power corrupts absolutely." The continual redirection of power and authority to a central government will eventually come back to bite a society on the ass. The founding fathers knew this. This is what history teaches us.

    Greg: Ah, yes. I remember discussing something along this lines with you before.

    OK, I agree that a government can run a budget deficit forever (in principle). Theoretically, however, there are limits placed on how large this deficit can be and how fast it can grow (it cannot, for example, grow faster than the economy over long periods of time).

    So, let us both agree on this point. The question now is whether the command over resources yielded by this method of finance is sufficient to meet a stated public goal. Not likely.

    So then, as you say, the question is (or should be) about adopting a reasonable taxation and spending policy (without too much concern for strict budget balance, in your view). Well, sure...I am going to agree with you! But only because what one means by "reasonable" is open to debate. :)

  8. "I do not believe that those with a libertarian streak (like myself) appreciate being demonized for, say, opposing a tax hike by the central government. I might oppose such a tax and at the same time favor a tax hike at the state or local level (if I thought the funds are to be put to good use)."

    Mobility may also be a factor. People could move to whichever locale has their preferred tax scheme. That said, people moving around could then game the system by moving to say a low tax locale during their working years and into a higher tax (and assumed higher social benefits) locale in their twilight years. From that simplified perspective a centralized tax scheme may be better.

  9. Pani Pani: Yes, that's right. This is related to my comment to Anon above about different localities competing in a "race to the bottom." One solution for the problem you have identified is to make entitlements conditional on tax contributions. So if I earn a lot of money in a low tax state, consume it all, then move to a high tax (benefit) state, I cannot freeride. The high benefit state may in this case just provide a level of benefit consistent with the state of origination. It gets complicated...

  10. David

    "OK, I agree that a government can run a budget deficit forever (in principle). Theoretically, however, there are limits placed on how large this deficit can be and how fast it can grow (it cannot, for example, grow faster than the economy over long periods of time)."

    Its not just "in principle" that the govt can run a budget deficit, its in actuality. We ACTUALLY have run a budget deficit over 90% of the time we have been in existence as a country. So where are the theoretical limits? Of course it cant grow faster than the economy because in fact in absence of any private activity (never happened) the deficit spending WOULD BE the economy (not a desirable state mind you)

    Please dont make it sound as if I'm advocating (or anyone is for that matter) that ALL financing be done via govt deficit spending. Ive never advocated such and never will. However it is clear to me that those making the argument that we cant "afford" social security are making it on pure finance grounds, when they should be making it on the grounds that 2,000 dollars is too much to pay a 70 year old person who made 60,000 a year and demonstrate that our production is incapable of meeting the amount of resources that $2000 is likely to command. If they cant make it on the latter grounds, they have no case. If they cant look each SS recipient in the eyes and say , "You are consuming too much of our valuable resources, we need more for our younger people" then they have no moral standing. Simply saying "we dont have the money" is a cop out and a lie.

    So, are our SS recipients taking too much of our resources? Are we in danger of running out of all the things they are demanding with their monthly checks?

  11. Greg: OK, you have made your point crystal clear now. And I can't say that I disagree with it.

  12. Since you say the difference is purely a technical one regarding efficiency, and not a moral one, I assume you also support funding our military through charity?

  13. Josh:

    One could make such a case. Hard core libertarians do not trust high concentrations of power and may welcome a military (or local militias) financed by local taxes and/or voluntary contributions. (I consider myself a little more pragmatic than this, however!)

  14. Josh,

    Many libertarians, myself included, don't have a problem with national defense, per se. We do, however, have a problem with expeditionary military forces.

    There is the journal of libertarian studies where stuff like this gets discussed in a more scholarly environment - even though David's blog is about as scholarly as they come. But still, we do have stricter space limitations here!

  15. You write: "Or, I might just want to keep more of my money so that I have greater control over how to disburse it among competing charities. The "liberal" attempt to construe any of these positions as "immoral" along some dimension is, well, simply shameful, I think."

    It's not your money. Read some more Hegel and you'll learn where 'you' come from (a conglomerate of institutions much older than the 'you' you seem to suggest is sacrosanct). Whatever good fortune you've had that's allowed you a larger than average portion of the earth's bounty doesn't justify you claiming some kind of inviolable ownership of it. And btw: to suggest that any human action can be promoted and or carried out divorced from its moral component just goes to show once again that libertarianism is synonymous with sociopathy.

  16. DBH,

    So, you don't think people own themselves?

  17. Prof J: That gets to the heart of the issue. We can only 'own' ourselves legally. And, as with all ownership, the rights that follow from it are negotiable within a polity. But let me try to briefly clarify. That old bumper sticker, "If you can read this, thank a teacher," is way too narrow. If we analyze any of our successes, we will see that there is a myriad of people and institutions to thank. To think that we can lay claim to anything we achieve above mere animal existence is tending toward solipsism. Hence, the invention of charity... and another chestnut: "There but for the grace of ...."

  18. DBH:

    And btw: to suggest that any human action can be promoted and or carried out divorced from its moral component just goes to show once again that libertarianism is synonymous with sociopathy.

    What do you mean by "it's" moral component? Do you mean the moral component as defined by your own personal preferences? Of course I can divorce analysis from what you view as moral.

    I do think you are correct, however, in pointing out the good fortune bestowed upon many of us. Of course, good fortune is a matter of perspective. I would venture to say that everyone living in the USA today is incredibly fortunate relative to most people who have ever lived in history. It's really too bad that people cannot appreciate the opportunities laid out before them. Instead, they are taught at a very young age to be jealous of others' material possessions.

    In any case, there is substantial government redistribution in the US (though not as much as I'm sure your own preferences would dictate) and a substantial amount of private philanthropy--much of it driven by compassion for the less fortunate. The question is not whether I believe I have property rights defined over income I generate, but rather, whether I should agree to have more of it appropriated from myself and my fellow citizens and, should I feel not obliged to do so, whether I should be labeled "immoral" by "holier than thou" types.

  19. The question really comes down to "Is there an objective morality"?

    Sam Harris addresses this in a new book "Moral Landscape" and does a fine job I think. He argues that we will have a "science of morality" in the near future. I agree.

    To him and to me the central moral question will likely be related somehow to how it improves human life and not just an "individual" life. Something cannot be moral if it makes us worse off. Now there are grey areas in "worse off" but depending on how the question is asked there are also large areas of agreement about worse off as well.

    The main area of contention being addressed in this post,as I see it, is where does the individual end and the group begin? How much should an individual be expected to surrender in deference to group betterment and what metrics are important in analyzing group betterment?

    I do think we must, in most instances, divorce the term immoral from evil, and moral from holier. I prefer more secular moral thinking that doesnt appeal to some sort of higher being standing in judgement or a force which sends agents who have certain actions into an abyss after death. I think that type of moralizing leads to holier than thou type reactions and often results in extremely ugly (and violent) actions in defense of ones moral view.

  20. David,
    You say, "The question is not whether I believe I have property rights defined over income I generate, but rather, whether I should agree to have more of it appropriated from myself and my fellow citizens and, should I feel not obliged to do so, whether I should be labeled "immoral" by "holier than thou" types."

    really? is that it? someone offended your preferred philosophy? i didnt know you were so sensitive.

    2) lets follow the libertarian logic for a bit. central authority is bad, so lets decentralize. ok, states are prefered to the feds, but municipalities are preferred to states. but what if i dont like my municipality telling me what to do with my money? ok, lets decentralise to neighbourhoods? oh wait, i disagree with my neighbourhood, so lets decentralize to streets. oh crap, now i dont like the guy at the end of the street telling me what to do, so we have to decentralize to households and while we are at it, lets go right down to individuals.

    you mentioned you were more pragmatic than some libertarians, so at what level does the pragmatic person stop?

    3) this leads to my third point. lets take an example. if you or anyone else cares about putting a minimum floor under the living standards of people, as you say, it can be done in two ways: private charity or the state.

    unless you can provide me with evidence to the contrary, private charity is unlikely to cut it. that leaves the state and the most efficient way to put a floor under people's living standards is to adequately fund public education.
    more examples are easy to come up with, but the common thread between them is that government is attempting to correct a market failure. it is a simple efficiency argument.

    so if the question is about finding the pragmatic level of government from which to attempt to correct market failures, a libertarian philosophy is of no use. not only is it of no use, but it is immoral. by opposing the only mechanism that can get society to the efficient solution, you are explicitly imposing costs on the rest of us. and isnt imposing costs on others something libertarians find immoral?

  21. Greg:

    I'm not sure I understand the question, possibly because I'm not sure how morality is being defined.

    My immediate reaction was: of course there is an objective morality. But existence is not the issue; there are many "objective" moralities. How do we choose among them? Is our choice in these matters ultimately governed by our personal preferences? And why should my personal preferences be judged superior to yours, or any others?

    I guess that I'll have to pick up Sam Harris' book some time....

  22. Greg says it best.
    As for the matter of preferences, one has to first acknowledge which community or communities one is seeking to better by one's actions. (If we can't agree with this premise, then we really have no more to discuss and we're left to our alienated existence.) After deciding that, then one determines the standards for justification of moral propositions within that community. Then one propounds propositions and negotiates 'truth' with other members of that community. None of this has anything to do with preferences. We are born into a network of communities whose influences move us into additional communities. We can 'prefer' to be perverse and ignore community altogether but then we're consigned to Dostoevsky's underground.

  23. Anonymous:

    I am accused of excessive sensitivity by one who wishes to spar with me behind a cloak of anonymity. Thanks for my morning chuckle... :)

    I haven't had time to digest the points you are making, but will try to get back to them as time permits.

  24. Hi David,

    sorry about the Anonymous name. i tried inserting a name, but for whatever reason, it didnt go through. so i said to heck with it and put anonymous. oh well. (i suppose i need a blogspot account to post a comment with a name??)

    but you actually know me. I was a former first year econ phd at sfu who failed the comps. the name is mike gavin (tall with red hair, entered the same year as steve, ben, pierre, georgi, etc).

    i enjoy your blog and read it from time to time. but i have to say, i disagree with the general libertarian view, as i'm sure my comment made clear (and yes, the sensitive comment was meant in jest). but its mostly becaues i disagree with using any particular philosophy as a starting point for figuring out how to go about doing something. you will be happy to know that since i am in political science and half the people there think marx is the greatest thing since sliced bread, i have some good dust ups with them too. but i would appreciate your thoughts on my arguments.

  25. Mike:

    Glad to hear that you're still kicking around. Sorry for not replying sooner, but I have a coauthor in town and he is keeping my nose to the grindstone.

    OK, let's forget about your point [1].

    On point [2], I don't think that the libertarian view is that central authority is bad. The view is whether people should be free to choose which coalition they wish to belong to. If a person wants to belong to a grand collective with a delegated dictator, I don't think any libertarian would object.

    On your point [3], I'm not sure I understand it fully. Your premise seems to suggest the existence of "market failures" but no "government failures." If that is your view, then the solution is obvious: let the government solve all of our problems.

    This would be much more fun to discuss over a few beers the way we used to! Sorry for the terse reply.

  26. anonymous mike here again,

    take as long as you wish to reply. and yes, discussing these issues over beer is preferable.

    as for your reply, its a standard argument, but i think you chosing a standard reply actually bolsters my central argument.

    my central point is that using any philosophy as a guide for looking at the world will ultimately be unhelpful. your reply highlights this because you didnt actually argue against my points, but instead repeated the standard arguments for favouring individual choice over other values.

    philosophy is reduced to picking one value/issue and going for the jugular. marx does this with class. taylor does this with the division of labour. religious people do it with bibles or korans. libertarians do it with individual choice. choosing between these is to some extent arbitrary. but the main point is that in a society any larger than a village, trade-offs between these values will need to be made so following any one philosophy will just be distracting.

    none of this implies the non-existence of government failures. i am currently a coop student with the federal government right now and i do almost nothing, get praised for it by my manager, and receive a high wage. total government failure. 100%.

    alas, i arrive in the middle. for me, a libertarian view is simply pie in the sky because it is simply not feasible in any world i live in. this means living with the current system, but trying to improve it from within.

    this is getting long, so i will stop here. much easier discussing this over beers.

  27. Well, you must admire the flexibility of some North American liberals. Many support ethnic cleansing which is about as zero-sum as it gets.

    Me? I'm a Classical Liberal. I favour freer trade, secure property rights, and peace.