A Farewell Manifesto

Well, that's it, the political season is over. And while it may not have ended how I would have preferred, rest assured that I will not continue to fight. That's right. Now that the election is over I will most probably post much less frequently on political matters, if you can even consider my very undeft attempts at political analysis to have been worthwhile in the first place. I'm generally much less involved than I should be when it comes to politics, and while I believe it is every citizen's duty to participate when the time comes and maintain a minimum level of knowledgeableness in order to participate intelligently, it really seems that there are so many differing sources of information out there that it would require a person to either devote a substantial portion of their time to wading through all of them, or be especially interested in it, neither of which I am willing to do. One of the incentives for starting a blog for the election cycle was that it would force me to follow my first voting-age presidential race more closely and chronicle my thoughts along the way. It was a learning experience for me, and it was good. But I don't know how much more I have to say on politics, and I'd like to post more about other stuff that interests me. As a kind of closing manifesto though, I'd like to lay out the things I do have strong personal beliefs about politically:

Large concentrations of wealth are bad. I know this is economic, not political, but still our economic policies are set in large part via a political process. I'm sure none of the reasons I can provide in supporting this position are original, since the matter has been argued for centuries by political theorists and intellectuals far more learned than I. But, at the risk of being superfluous, I'll state why I think this is the case.

I actually think it's easier to see why this is bad by starting with the justifications given for why they are good. The first, and probably predominant argument is that distributions of wealth are determined by markets and markets must not be tampered with. Some people with a religious-type adherence to the free market are not likely to have big problems with large differences in wealth, because they see the large differences in wealth as somehow the natural product of the free market. But one need only look to trusts and natural monopolies to see that sometimes intervention in free markets is more efficient than no intervention. Additionally, reverence for a system, however ingenious and perhaps philosophically pleasing, should never supersede honest analysis of all of its consequences, good and bad. Capitalism may be the best economic system ever invented, but that doesn't mean some of its consequences aren't undesirable and would be better if they were corrected.

Of course a necessary premise of capitalism is the profit-incentive or self-interest, which cannot exist without inequalities of wealth. In the real world, inequalities in wealth provide positive incentives for risk-taking, innovation, and entrepreneurship, all of which are essential to a well-functioning economy. Conversely, lack of possibility for inequalities in wealth led to the failure of communism on the massive scale. However, as I understand the argument, as a justification for the existence of larger inequalities of wealth, the profit-incentive argument must assume that there are constant or even increasing returns to greater and greater levels of inequality. This to me seems patently false. Does the typical middle-class person respond with 5 times the risk-taking, or, put another way, do 5 times as many middle-class people decide to take risks when the average income of the top 10% is increased by 5 times? It's true that this doesn't take into account certain macroeconomics multiplying effects that might translate to a greater than 1:1 contribution to the total economy for each unit of additional capital. Still, my argument is that there has to be a certain point where the marginal contribution to positive incentives of an increase in the income disparity is negligible. On a practical level, is a $50,000-earning member of the middle class considerably more motivated to take certain risks if he is able to earn $2,000,000 rather than $1,000,000?

There's an assertion that the rich invest (save) proportionally more money than non-rich citizens. I don't have any data on this, and can't find any on a quick search. Maybe someone who has some knowledge regarding this can leave a comment about it. Take it as true that the rich do re-invest a higher portion of their income than the non-rich. On the one hand, they're reinvesting it, so while it does briefly go through their hands and they receive the interest on the investment, they're really just acting as a proxy to distribute capital wherever it's going to go. On the other hand, they're investing in the most profitable ventures which will probably belong to other rich people who already have the substantial capital needed to cover the considerable overhead cost of a highly productive venture. So it's not clear how much this extra investment would "give back" to the population. Of course my knowledge of economics is pretty elementary and there very well could be a flaw somewhere.

There are obvious reasons why greater equality (not absolute equality) is good including reduced social tension, preservation of upward mobility, and an abundance of philosophical / ethical inquiry defending it as an inherent good that I can't possibly begin to address here. Historically, the existence of classes possessing fixed, differing levels of status has led to conflict and revolution. One of the things that has made America great and probably revolution-free is the lack of a class-system, which, wherever it existed in Europe, was subsequently overthrown in favor of democratic, capitalist systems. While today there is no danger of anything resembling a formal class system re-appearing, policies should be constructed so as to mitigate possibility of the formation of a de facto economic class division. I believe in policies formed with this aim in mind.

There are more things I feel strongly about, but since I'm tired of this post they will have to wait to future posts.

Update: Discussion continued here.

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