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Entrepreneurship vs Redistribution

Xerographica

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Xero: [usual argument]

Liberal: Your problem is that you don't understand the crucial importance of redistribution of wealth.

Xero: Is every bakery going to be a success? Obviously not...right? If that were the case then poverty would be eliminated because everybody who lacked money would be guaranteed money simply by starting a bakery. No need for redistribution.

So what factors determine whether a bakery will be successful or not? Maybe it simply boils down to luck? That can't be right. The fact of the matter is that it's a given that some bakers are going to make less mistakes than other bakers. As a result, some bakeries are going to be more successful than others.

It boils down to insight and foresight. A successful baker sees more accurately than an unsuccessful baker. And it's up to consumers to determine which baker sees more accurately.

You want to redistribute wealth from a wealthy baker to a poor baker? You want to give more influence to people who see less accurately? You want to take flour from a successful baker and give it to an unsuccessful baker?

Your intentions are good, but unfortunately, because you're failing to think things through you're simply increasing the severity of the problem you're trying to solve.

If you truly want the poor to have better options in life...then you have to think things through. Better options depend on people doing better things with society's limited resources. Consumers determine who exactly are the people who are doing better things with society's limited resources. The people they give their positive feedback (money) to are the people with the most insight/foresight. Therefore, we all will greatly benefit by allowing taxpayers to choose where their taxes go.
 

ttwtt78640

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You ignore what congress critters consider success - getting campaign cash and votes for (re)election. There are now fewer successful bakers than folks that want gov't help. By keeping taxation lower than spending, even the successful baker sees benefit from income redistribution, as they don't really care where their customers get their money to buy bread, so long as their are customers and they continue to make a profit sufficient for their needs.
 

ChunkySalsa

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Maybe it simply boils down to luck? That can't be right.
It certainly isn't ALL luck, but in completely denying the existence of luck, you are falling straight into the Fundamental Attribution Error.

Humans are not perfect and theoretical models based on that assumption are flawed. Nobody is omniscient about market conditions and many agents intentionally muddle and obfuscate knowledge to maximize their own gains. Also, expecting everyone (or even a strong minority of people) to expend every last cognitive resource maximizing their economic output is unrealistic.

Designing an economic system around those that live to work runs roughshod over those that only work to live. The former should certainly be remunerated for their dedication, but they are driven more by their need to be productive than the possibility of endless accumulation. Establishing diminishing returns on their accumulation will not thwart their impetus, but it will prevent their accumulation from causing the economy to sputter and stall out.

I definitely agree that the latter should be discouraged from burdening society with their lack of productivity. But my view is that wealth pooling at the top and stagnating the velocity of money is a much larger problem than the freeloaders.

(I have AdBlock filtering out all Youtube videos, so sorry for not even mentioning its content)
 

Joe Steel

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Liberal: Your problem is that you don't understand the crucial importance of redistribution of wealth.

...

If you truly want the poor to have better options in life...then you have to think things through. Better options depend on people doing better things with society's limited resources. Consumers determine who exactly are the people who are doing better things with society's limited resources. The people they give their positive feedback (money) to are the people with the most insight/foresight. Therefore, we all will greatly benefit by allowing taxpayers to choose where their taxes go.
Do you think redistribution of wealth is a big problem?

Would you tolerate any redistribution or are you opposed to all redistribution in any form?
 

Joe Steel

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... Establishing diminishing returns on their accumulation will not thwart their impetus, but it will prevent their accumulation from causing the economy to sputter and stall out ...
After accumulating a certain level of wealth accumulating more is just keeping score. The accumulator is doing it more because of his competitive instinct that to serve the needs of the community. Taking some of his wealth won't diminish his efforts because it's just part of the game.
 

Fisher

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Society's resources are not that limited. We have more than enough flour and capacity to have more flour to have room for a successful baker and a less successful baker to have flour. The success or failure of a bakery isn't about their product in a vacuum unless their product is really horrible. All of these threads seem to have a communist planned state undertone to them.
 

DaveFagan

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Society's resources are not that limited. We have more than enough flour and capacity to have more flour to have room for a successful baker and a less successful baker to have flour. The success or failure of a bakery isn't about their product in a vacuum unless their product is really horrible. All of these threads seem to have a communist planned state undertone to them.
When large Corporations enter a particular market, they encourage and welcome excessive gov't regulation because it will force the small entrepreneur out of that business. Just like the local bread maker/baker must compete against a Corporation that wants shelves for cookies, cupcakes, bread, potato chips, crackers and demands whole areas of a store and forces out the small baker. Goes on every day. The game is gamed by Corporate Politics and Corporatism. The baker is just one small example. Check any entreprenueral endeavor in marketing.
 

Fisher

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When large Corporations enter a particular market, they encourage and welcome excessive gov't regulation because it will force the small entrepreneur out of that business. Just like the local bread maker/baker must compete against a Corporation that wants shelves for cookies, cupcakes, bread, potato chips, crackers and demands whole areas of a store and forces out the small baker. Goes on every day. The game is gamed by Corporate Politics and Corporatism. The baker is just one small example. Check any entreprenueral endeavor in marketing.
Retailers want whatever will give them profits by sales. If a baker cannot compete with a big corporation for shelf space in a supermarket, it is because of they lack the economy of scale moreso than because of excessive government regulation. That said, a baker shouldn't be trying to compete for shelf space if that is beyond their means to begin with. They need to find another way to insert themselves in the market--owning the shelves on which only their products will appear is a good start.
 

ttwtt78640

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After accumulating a certain level of wealth accumulating more is just keeping score. The accumulator is doing it more because of his competitive instinct that to serve the needs of the community. Taking some of his wealth won't diminish his efforts because it's just part of the game.
It certainly diminishes the efforts of those given "help" in the form of income redistribution. If you require $X, in order to live comfortably, does it then really matter what portion of $X is earned by your own efforts verses simply handed to you because you are deemed to "need" or "deserve" it?
 

Joe Steel

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It certainly diminishes the efforts of those given "help" in the form of income redistribution. If you require $X, in order to live comfortably, does it then really matter what portion of $X is earned by your own efforts verses simply handed to you because you are deemed to "need" or "deserve" it?
I was speaking of wealth rather than income.

The effect I mentioned occurs at much higher levels than those achieved by welfare recipients.
 

ttwtt78640

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I was speaking of wealth rather than income.

The effect I mentioned occurs at much higher levels than those achieved by welfare recipients.
Are you implying that wealth may be obtained other than through income?
 

Joe Steel

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Are you implying that wealth may be obtained other than through income?
I wasn't implying anything. I was stating what I thought was clarifying fact.

However, wealth can be inherited.

I saw a program on TV last night which ties into this thread. In Who Do You Think You Are?, Trisha Yearwood, the singer, traced her family back to 18th century England. Her 5 times great grandfather, Samuel Winslett, was condemned to death by hanging for stealing some deer from a rich landholder. He was given a reprieve and sent to Georgia as an indentured criminal in 1766. For some reason, in 1770, he was granted 100 acres of land by George III. That land was a redistribution of wealth from native Americans to Winslett. Presumably, the family retained the wealth in some form and each member inherited some of it.

Don't you think, as a matter of justice, redistributing it back to native Americans would be fair?
 

Joe Steel

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It certainly diminishes the efforts of those given "help" in the form of income redistribution. If you require $X, in order to live comfortably, does it then really matter what portion of $X is earned by your own efforts verses simply handed to you because you are deemed to "need" or "deserve" it?
You're probably right about the disincentive in relief payments. If a beneficiary has enough then he might not want more.
 

Aunt Spiker

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It certainly isn't ALL luck, but in completely denying the existence of luck, you are falling straight into the Fundamental Attribution Error.

Humans are not perfect and theoretical models based on that assumption are flawed. Nobody is omniscient about market conditions and many agents intentionally muddle and obfuscate knowledge to maximize their own gains. Also, expecting everyone (or even a strong minority of people) to expend every last cognitive resource maximizing their economic output is unrealistic.

Designing an economic system around those that live to work runs roughshod over those that only work to live. The former should certainly be remunerated for their dedication, but they are driven more by their need to be productive than the possibility of endless accumulation. Establishing diminishing returns on their accumulation will not thwart their impetus, but it will prevent their accumulation from causing the economy to sputter and stall out.

I definitely agree that the latter should be discouraged from burdening society with their lack of productivity. But my view is that wealth pooling at the top and stagnating the velocity of money is a much larger problem than the freeloaders.

(I have AdBlock filtering out all Youtube videos, so sorry for not even mentioning its content)
Luck is how you are affected by events out of your control. Events beyond your control affect you positively = people call that good luck. If these events affect you negatively = people call that bad luck.

If you apply is original suggestion, and analyze what these events might be, then you can better avoid them, prevent them, or cope with them when they do happen.

List out the reasons why a business fails, and only some elements will be "outside events and how they affected the business negatively."
 

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I wasn't implying anything. I was stating what I thought was clarifying fact.

However, wealth can be inherited.

I saw a program on TV last night which ties into this thread. In Who Do You Think You Are?, Trisha Yearwood, the singer, traced her family back to 18th century England. Her 5 times great grandfather, Samuel Winslett, was condemned to death by hanging for stealing some deer from a rich landholder. He was given a reprieve and sent to Georgia as an indentured criminal in 1766. For some reason, in 1770, he was granted 100 acres of land by George III. That land was a redistribution of wealth from native Americans to Winslett. Presumably, the family retained the wealth in some form and each member inherited some of it.

Don't you think, as a matter of justice, redistributing it back to native Americans would be fair?
People being held responsible, or in this case, having real goods taken from them, for what was done under 'proceeds of war' would open a Pandora's box of unimaginable proportions. We're not talking one or two generations here.
 

ttwtt78640

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I wasn't implying anything. I was stating what I thought was clarifying fact.

However, wealth can be inherited.

I saw a program on TV last night which ties into this thread. In Who Do You Think You Are?, Trisha Yearwood, the singer, traced her family back to 18th century England. Her 5 times great grandfather, Samuel Winslett, was condemned to death by hanging for stealing some deer from a rich landholder. He was given a reprieve and sent to Georgia as an indentured criminal in 1766. For some reason, in 1770, he was granted 100 acres of land by George III. That land was a redistribution of wealth from native Americans to Winslett. Presumably, the family retained the wealth in some form and each member inherited some of it.

Don't you think, as a matter of justice, redistributing it back to native Americans would be fair?
Two separate issues are addresed here. Inheritance taxation law and land title disputes incurred before the U.S. was even formed. I tend to agree that the rich manage to escape much estate taxation through the use of lobbying to create "loopholes" and the use of tax/estate lawyers to use them to great advantage. Many bizarre factors come into play with the "valuation" of estates, e.g. 1000 acres of land and the improvemnts upon it may be "worth" vastly different amounts simply due to inflation and current zoning/use.

I do not agree that a U.S. court should address land title claims made "legal" by a long dead king of England. England may have "stolen" the land but the U.S. then took that land from England. Would you advocate refunding the taxes paid on that land and awarding the current land holder compensation for any improvements made to that land over the last 300+ years?

Estate Tax
 

Xerographica

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Humans are not perfect and theoretical models based on that assumption are flawed. Nobody is omniscient about market conditions and many agents intentionally muddle and obfuscate knowledge to maximize their own gains.
Our current system is based on the assumption that congresspeople are omniscient. (True/False)

Establishing diminishing returns on their accumulation will not thwart their impetus, but it will prevent their accumulation from causing the economy to sputter and stall out.
How does having the resources in the best hands cause the economy to sputter and stall out?

Taxes upon transfer, besides the mischief of pressing upon capital, are a clog to the circulation of property. But, has the public any interest in its free circulation? So long as the object is in existence, is it not as well placed in one hand as in another? Certainly not. The public has a perpetual interest in the utmost possible freedom of its circulation; because by that means it is most likely to get into the hands of those, that can make the most of it. Why does one man sell his land? But because he thinks he can lay out the value to more advantage in some channel of productive industry. And why does another buy it? But because he wishes to invest a capital, that is lying idle, or less productively vested; or because he thinks it capable of improvement. The transfer tends to augment the national income, because it tends to augment the income of the two contracting parties. If they be deterred by the expenses of the transfer, those expenses will have prevented this probable increase of the national income. - J.B. Say, A Treatise on Political Economy
(I have AdBlock filtering out all Youtube videos, so sorry for not even mentioning its content)
No worries...here's the written version... How Markets Work: Disequilibrium, Entrepreneurship and Discovery
 

Xerographica

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Do you think redistribution of wealth is a big problem?
I can't think of a bigger problem. Is cancer a bigger problem? No, because it would be a bigger problem to redistribute what people have distributed to cancer research. Is war a bigger problem? No, because it would be a bigger problem to redistribute to war what people have distributed to education, healthcare and environmental protection.

Would you tolerate any redistribution or are you opposed to all redistribution in any form?
I'm a pragmatarian, so clearly I'm not opposed to all redistribution, given that I don't strongly oppose redistributing a percentage of people's money to the public sector.

We mark half of people's dollars as "private" and the other half as "public". They are free to spend their private dollars as they see fit in the private sector and they are free to spend their public dollars as they see fit in the public sector. If people aren't happy with the tax rate then they'll be free to not distribute any of their tax dollars to congress.

We have to be free to determine exactly how much positive feedback (money) we give to all organizations. Without this feedback it's impossible to accurately determine how much benefit society is deriving from that particular good/service. Therefore, without that feedback, it's inevitable that either too much, or too little, of that particular good/service will be supplied. In other words, without that feedback, it's a given that society's limited resources will be inefficiently allocated. In other words, without that feedback, it's a given that we will not derive the maximum value from society's limited resources.
 

ChunkySalsa

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How does having the resources in the best hands cause the economy to sputter and stall out?
First of all, "best hands" is a false premise.

Secondly, monopolies are the classic example of how too many resources in one hand works for the advantage of the owner to the detriment of society.

Third, the economy gets throttled and sputters out when too much money is in too few hands. For example, take one billionaire versus ten thousand people with $100,000. One billionaire is only going to consume so many cars, houses, clothes and other goods. Ten thousand people are going to consume thousands of times more goods. With just one billionaire, pidling demand will drive out of business people that make houses, cars and clothes. With 10,000 people making $100,000, there's going to be huge demand and those businesses will thrive.
 

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Xero: [usual argument]

Liberal: Your problem is that you don't understand the crucial importance of redistribution of wealth.

Xero: Is every bakery going to be a success? Obviously not...right? If that were the case then poverty would be eliminated because everybody who lacked money would be guaranteed money simply by starting a bakery. No need for redistribution.

So what factors determine whether a bakery will be successful or not? Maybe it simply boils down to luck? That can't be right. The fact of the matter is that it's a given that some bakers are going to make less mistakes than other bakers. As a result, some bakeries are going to be more successful than others.

It boils down to insight and foresight. A successful baker sees more accurately than an unsuccessful baker. And it's up to consumers to determine which baker sees more accurately.

You want to redistribute wealth from a wealthy baker to a poor baker? You want to give more influence to people who see less accurately? You want to take flour from a successful baker and give it to an unsuccessful baker?

Your intentions are good, but unfortunately, because you're failing to think things through you're simply increasing the severity of the problem you're trying to solve.

If you truly want the poor to have better options in life...then you have to think things through. Better options depend on people doing better things with society's limited resources. Consumers determine who exactly are the people who are doing better things with society's limited resources. The people they give their positive feedback (money) to are the people with the most insight/foresight. Therefore, we all will greatly benefit by allowing taxpayers to choose where their taxes go.
This is literally a strawman ... who has EVER said "Your problem is that you don't understand the crucial importance of redistribution of wealth."

No one ...

Its a false dictomy, the debate has never been entrepreneurship vrs redistribution ... EVER, apples and oranges.
 

Xerographica

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First of all, "best hands" is a false premise.
How is it a false premise? How could it not be the most obvious thing that some people are better at using society's limited resources than other people? Are you so full of yourself that you think that your hands are as good as any?

Secondly, monopolies are the classic example of how too many resources in one hand works for the advantage of the owner to the detriment of society.
What nonsense. Monopolies occur because there are barriers to entry...not because there are "too many" resources in one hand.

Third, the economy gets throttled and sputters out when too much money is in too few hands. For example, take one billionaire versus ten thousand people with $100,000. One billionaire is only going to consume so many cars, houses, clothes and other goods. Ten thousand people are going to consume thousands of times more goods. With just one billionaire, pidling demand will drive out of business people that make houses, cars and clothes. With 10,000 people making $100,000, there's going to be huge demand and those businesses will thrive.
If you told the story from the beginning then you'd realize how nonsensical your argument truly is.

We start with an entrepreneur with an idea. He risks everything and offers a product that he's hoping that people will value more than the alternatives. If he guesses correctly, then people will choose to give him their money in exchange for his product. This means that they derive more value from his product than they do from the competing products. He has made consumers better off so they in turn make him better off. It's a mutually beneficial relationship. As long as consumers are free to exit from the relationship...then how in the world could he end up as a billionaire without everybody being better off? How could we redistribute his wealth without countless consumers being made worse off? It's impossible. It's nonsensical. You're simply failing to think things through.

But even the dunce Michael Moore understands this simple concept...

I'm a millionaire, I'm a multi-millionaire. I'm filthy rich. You know why I'm a multi-millionaire? 'Cause multi-millions like what I do. That's pretty good, isn't it? - Michael Moore
They don't just "like" what he does...they "value" what he does. They value how he is using society's limited resources so they give him their positive feedback (money). The more people that value how he is using society's limited resources...the more money he'll earn. The amount of money he earns is a reflection of how much value he is creating for others.

And here you are describing a scenario where value is somehow being destroyed because a billionaire is using society's limited resources for society's great benefit. You got to think things through. If not, then you're simply going to screw the people that you're trying to help.
 

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Look, there is nothing wrong with wealth. The argument against wealth is not about targetting people who make millions of dollars, or even hundres of millions of dollars. It's about wealth sequestration. The top 1% of this country pay next to no taxes, and are not redistributing their money but are instead using it to pull political strings and create a global economic hegemony whose strings they control. Sorry to quote a socialist but it's unavoiable: Marx was correct when he said that the state of the economy determines social well-being, not the other way around. Our democracy will continue to degenerate as long as its economic power continues to hemorrhage into the globalist structures, and the plurality of our currency falls out of the People's control. Americans are gradually becoming second class citizens in their own country because the structures that supported prosperity are being dismantled one by one.

This has nothing to do with supply and demand or consumer choice. It's not even about socialism vs. capitalism. Public services have declined greatly in the past 15 years despite the current Democratic office. The richest are destroying the middle class through their globalization agenda and their desire to centralize economic power back into the hands of the aristocracy, as it was prior to industrialization. Relative wealth equality is no longer required in America because the labor force is now in places like China, so America is rapidly being returned to a dual-class economy: rich and poor. We might have some lingering middle class to provide services, but the preponderance of the population will have a lower income bracket than they did prior the "recession" a.k.a economic restructuring.

People are arguing over the wealthy vs. the poor, capitalism vs. socialism, democrat vs. GOP, but it's all smoke and mirrors. The more you listen to what the media puppets have to say, the less you'll see the man behind the curtain taking away this nation's prosperous economic structures.
 

Xerographica

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This has nothing to do with supply and demand or consumer choice. It's not even about socialism vs. capitalism.
Our country's stagnation/decline has everything to do with your failure to understand that prosperity has everything to do with how well our society's limited resources are being used.

Answer this question...is the preference revelation problem a real problem?
 

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Our country's stagnation/decline has everything to do with your failure to understand that prosperity has everything to do with how well our society's limited resources are being used.
This statement is so vague that it's practically meaningless.

Every economic problem in history has to do with a failure to understand flaws in resource allocation. We learn from the flaw and then implement a fix.

Unfortunately, this time around the fixes are obvious but are not being implemented due to nepotism, cronyism, and corruption.
 

Xerographica

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This statement is so vague that it's practically meaningless.

Every economic problem in history has to do with a failure to understand flaws in resource allocation. We learn from the flaw and then implement a fix.

Unfortunately, this time around the fixes are obvious but are not being implemented due to nepotism, cronyism, and corruption.
I asked a simple question and you failed to answer it. Let me try again with another question...

Our current system is based on the assumption that congresspeople are omniscient. (True/False)
 
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