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By: Libertymike Thu, 12 Mar 2015 21:20:00 +0000 Preferably not a method that has a politically appointed commissar – called your honor- who has the power to redistribute wealth and income for a lifetime and who does not know Caplan from Krugman..

By: Sean II Thu, 12 Mar 2015 15:44:00 +0000 I realize this is a bit childish, but I’ve never gotten over the sound of Feynman’s voice.

He speaks with the accent and pattern of every comic foil Noo Yawk buffoon you ever saw on ’50s TV show.

All the while he’s talking, you expect some carping wife or ne’er do well neighbor to burst in on him and trigger the applause sign.

Makes for an amusing contrast with the content of his speech: “Oh, ah, ho…Alice I told ya’ let N = 4!”

By: TracyW Thu, 12 Mar 2015 13:38:00 +0000 Thank you for the conversation. I am glad that you now recognise that free trade, less government regulation and lower marginal tax rates are ideas that are opposed to the immediate interests of the monied and thus their mainstream nature has to be explained somehow.

By: Frank Hecker Thu, 12 Mar 2015 11:50:00 +0000 “I kinda doubt that people are inherently *that* allergic to formalised status signals.” It’s interesting to speculate why this might be so, but I’ve got to get back to my own blogging. Maybe I’ll post on this at some point. I don’t have much to add to the rest of your comments. See you next time!

By: TracyW Thu, 12 Mar 2015 10:13:00 +0000 That’s my understanding of sumptuary laws. I don’t know of any evidence about their effectiveness in actual implementation.

By: TracyW Thu, 12 Mar 2015 09:40:00 +0000 On the status issue, yeah, I don’t really see that happening either. And, while I didn’t discuss this earlier as I wanted to focus the debate, I kinda doubt that people are inherently *that* allergic to formalised status signals. Eg, the future Charles II managed to escape capture by the Roundheads at the end of the English Civil War with the help of a range of ordinary commoners, despite a large sum of money on his head. More broadly, Britain had all sorts of formal status signals and yet people managed to cooperate across class lines on both sides of the English Civil War, the Restoration of the Monarchy, and the Industrial Revolution.

First it’s that the wealthy are promoting non-mainstream ideas, then it’s that the ideas are mainstream, but wouldn’t have been without wealthy people funding their promotion. As I see it there have always been political parties aligned with monied interests of one sort or another, so i find the idea that their pet policy ideas wouldn’t be promoted one way or the other somewhat odd.

My apologies, I have too much history in my head. I was thinking of Adam Smith’s The Wealth of Nations and the mercantalist ideas. Generally, monied interests support regulations that aim at increasing their own revenues at the expense of the general consumer. (See particularly book 1 chapter 8 and all of Book IV for numerous examples.) That’s very different to supporting free trade and lesser government regulation.

Obviously, free trade and less government regulation benefits everyone in our roles as consumers, but that’s a diffuse interest, while any particular government regulation that aims to raise prices particularly benefits the interests of whomever is selling it. Eg, if a government regulation raises the price of flour by 5 cents a kilo, and one hundred million kilos are sold a year, then that’s a trivial amount in most individuals’ budget, but $25 million in extra revenue to the sellers of flour. The differential incentives for lobbying are obvious. But, overall, if everyone lobbies for higher prices for whatever they’re selling, we’re all going to be worse off overall, as what we gain as producers we lose as consumers.

So, given that free trade and less government regulation generally is only in the general interest, not the particular, why is it supported at all? Why is it even remotely a mainstream idea?

And similarly for lower marginal tax rates. Obviously nearly everyone wants to pay less in taxes, without giving up government services, but the obvious way of lobbying for that is for a tax deduction for a particular interest group. If I manage to persuade the government to give every one called “Tracy” a tax deduction, then individually I’d get more money for the same amount of total tax revenue loss than if I manage to persuade the government to generally lower tax rates for a much larger group. Obviously, if everyone lobbies for tax deductions and gets them then total rates have to be raised (holding government spending constant), and overall not only do we all have to pay the same level of taxes, but we have to waste a lot of resources working out all the tax deductions and arguing over them. Now, lower marginal tax rates are bit more controversial than free trade and less government regulation, but all the arguments I’ve ever heard of them are for the general interest, not for any particular interest. This is not something I’d expect to be remotely a mainstream idea if the only source of mainstream ideas was people lobbying for the public interest.

A similar argument applies for people arguing for a generally preferential tax treatment of capital income versus wages (as opposed to special tax treatment for various interests that happens to take the form of preferential tax treatment).

I don’t see how you can explain the popularity of free trade, government deregulation in general and lower marginal tax rates without postulating some disinterested behaviour by rich people.

(Note, I’m not here debating really the merit of the policies themselves, just pointing out that any particular monied interest would be immediately better off lobbying for a much more specific policy.)

Did some wealthy folks just have a change of heart and decide to fund promotion of free trade at a time when it was decidedly not a mainstream idea?

Well not necessarily a change, they might have grown up favouring the idea. But The Economist was founded to support free trade and to lobby for repeal of the Corn Laws specifically by James Wilson, a successful businessman. To switch from free trade to the abolition of slavery, William Wilberforce had family wealth behind him for his political career which rather explains why he could stand up to the various monied interests behind the slave trade. In the USA, Benjamin Lundy and Arthur and Lewis Tappan are examples of successful businessmen who were early supporters of abolition in the USA. Could Corn Law repeal and abolitionism have succeeded without this disinterested support? Maybe, but I speculate it would have taken longer.

Yes. This is why as a non-libertarian I regularly venture into the lion’s den that is the BHL comments section 🙂

I hope I am giving you only a mild mauling, and I hope I am avoiding mischaracterising your arguments. If I have committed any strawmen, please let me know.