Sunday, October 19, 2008

Private property

“If you want to grapple with something that bothers me about political conservatism in the economic sphere, it is what seems to me to be a commitment to the trickle-down thesis. The idea is that lowering the tax burden on the higher economic levels will stimulate the economy in general, create jobs, and benefit the people down the scale. I think this is the heart of what the Republicans are using Joe the Plumber to illustrate.”

i) It’s true that conservatives often justify deregulation and lower corporate tax rates on the grounds that this will benefit more people in the long run.

Since that’s a pragmatic argument, it’s fair to judge the argument on pragmatic grounds.

Mind you, even at a pragmatic level, we need to distinguish between equality of opportunity and equality of outcome. The argument is not that you should be a beneficiary of corporate prosperity regardless of what you do.

Microsoft is an engine of job-creation, both in terms of direct employment and support services. This doesn’t mean that if you choose to be a sluggard, you should still prosper from the prosperity of Microsoft.

ii) However, Reppert misses a deeper issue. This was nicely captured by a book which Liam Murphy and Thomas Nagel coauthored, bearing the provocative title: The Myth of Ownership.

By contrast, conservative economics is based on the right of private property. Whether or not your wealth benefits anyone else, as a rule, what you earn belongs to you.

Now, that's not a moral absolute. There’s a sense in which natural resources are the common property of the human race. No one owns all the drinking water or oxygen. People can also agree to pool their resources, although that's voluntary.

From a Christian standpoint, God is the landlord, while we are his tenants.

Likewise, if you’re enriching yourself by impoverishing others, then that is unjust.

Finally, a certain amount of gov’t is necessary to secure the right of private property. But that’s quite different from the welfare state.

All things being equal, no one else has a claim on your wages. There’s a word for that: theft.


  1. Maybe Victor will find this helpful?

    Criticism of the term "trickle down"

    In his book Basic Economics: A Citizen's Guide to the Economy, economist Thomas Sowell fleshes out his criticism that the term "trickle down" is a mischaracterization of conservative economic views:

    "There have been many economic theories over the centuries, accompanied by contraversies among different schools of economists. But one of the most politically prominent economic theories today is one that has never existed among economists - the "trickle down" theory.

    "People who are politically committed to policies of redistributing income and who tend to emphasize the conflicts between business and labor, rather than their mutual interdependence, often accuse those opposed to them of believing that benefits must be given to the wealthy in general or to business in particular, in order that these benefits will eventually "trickle down" to the masses of ordinary people. But no recognized economist of any school of thought has ever had any such theory or made any such proposal. It is a straw man. It cannot be found in even the most voluminous and learned histories of economic theories.

    "Proposals to reduce taxes on capital gains, for example, are often opposed politically by saying that those who make such proposals believe in a "trickle down" theory of economics. In reality, economic processes work in the directly opposite way from that depicted by those who imagine that profits first benefit business owners and that benefits only belatedly trickle down to workers.

    "When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens. Even when one person decides to operate a store or hamburger stand without employees, that person must first pay somebody to deliver the goods that are going to be sold. Money goes out first to pay expenses and then comes back as profits later - if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back. "Even with successful and well-established businesses, years may elapse between the initial investment and the return of earnings. From the time when an oil company begins spending money to explore for petroleum to the time when the first gasoline resulting from that exploration comes out of a pump at a filling station, a decade may have passed. In the meantime, all sorts of employees have been paid - geologists, engineers, refinery workers, truck drivers. It is only afterwrads that profits begin coming in. [...]

    "In short, the sequence of payments is directly the opposite of what is assumed by those who talk about a "trickle-down" theory. The workers must be paid first and then the profits flow upward later - if at all." (Basic Economics, pp. 388-389)

  2. I was going to quote some of the same material. Beat me to it, Mark Pendray.

  3. Let us also remember that when the "Christian" socialist says that they want more government programs to help the "poor," they are actually asking us to outsource our righteousness to another party, usually unbelieving humanists who will tell the poor that they are victims of "their environment," "white society," "the rich," etc. instead of telling them that (in most cases) it has been their sins or (more generally) their unwise decisions that have kept them down.