Tuesday, September 4, 2012

The 5 Best Sentences? Um, no.

So, not long ago the following facebook meme crossed my newsfeed (not sure of the original source):


The 5 best sentences I'll ever read?

I think not.

The best sentences I've ever read probably include "Do unto others as you would have them do unto you" and "But I tell you, love your enemies and pray for those who persecute you, that you may be children of your Father in heaven." I think this one is pretty challenging: "Jesus answered, 'If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven.'" I like this one from Aristotle: "Now virtue is a mean between two vices, that which depends on excess and that which depends on deficiency." And I like this one from Mahatma Gandhi: "Democracy disciplined and enlightened is the finest thing in the world. A democracy prejudiced, ignorant, superstitious will land itself in chaos and may be self-destroying." (Okay, so technically that's two sentences.)

But these five? They'd hardly be worth my attention, except that yesterday was Labor Day, and taking the time to explain why I don't find these sentences...impressive...actually gives me the chance to say some things about labor. So here goes:

Number 1: "You cannot legislate the poor into prosperity, by legislating the wealth out of prosperity."


Although that's all the response this sentence really deserves, let me generously expound a bit: The claim here seems to be that you can't make the life prospects of the poor better through legislation that taxes the wealthy (although I could be wrong about that...who the #$%@! really knows what this sentence is saying?).

But let's assume my translation is on track. If that's what's being said here, then, to put the point as plainly as I can: Bull.

Here's the thing. There are people who have found ways to leverage small advantages in our economy into progressively large ones by exploiting the power they gain over others. Doing so takes work--I'm not talking about lazy bums here. I'm talking about hard-working opportunists who are ruthless about maximizing their own wealth, even if it undermines the life prospects of others.

How does this work? The answer isn't simple, but here is one way: In any large business, the profits made are the result of collective effort. But the distribution of those profits is often in the hands of a few decision-makers. And those decision-makers have an incentive to reward themselves more highly. Some will act on this incentive. Some won't. Some will act on it to an extent. And some will be ruthless about it--perhaps by exploiting the desperate circumstances of the poorest in  society, leveraging their desperation into labor agreements which basically have them contributing far more to the collective entrerprise than they're getting out of it. And the decision-makers pocket the difference.

The more widespread such opportunistic practices are, the greater the poverty. Social, political, and economic realities can influence how widespread these practices are. One way to fight such practices is through labor unions. Collective bargaining can help prevent exploitation, since workers who are united are harder to exploit--but only if there isn't a sufficiently large pool of laborers outside the unions (perhaps waiting in Bangladesh) that can be turned to without much trouble.

A lot has been accomplished over the years by the efforts of workers' unions. Lives have improved. More people in the developed world have more hope of making a decent living by working hard. But beyond what laborers can do for themselves, there are things governments can do. Minimum wage laws, for example.

And taxes.

That's right. Taxes. To put it simply, if those inclined to exploit desperate workers for personal gain would have the gains of exploitation taken away in taxes, they'd lose the incentive to exploit. Why circumvent the labor unions in the US and build a factory in Bangladesh if the tax penalty is so high it will take decades to recover the moving and building costs? Why, for the sake of lining your own pocket, would you be grossly unfair in the distribution of wages in your company if, beyond a certain very healthy income of the sort you'd have to work hard to achieve, the taxes become so high that you'd just be handing money to the government that could better be spent making your workers happier with their jobs and with you?

This is part of what a progressive tax structure can do--not by itself of course, but as part of an overall government strategy aimed at erasing the incentives which lead to opportunistic exploitation and the poverty it can produce.

Taxation used in this way isn't about taking money from the rich people who earned it and giving it to the lazy bums who didn't. Rather, it's a piece of an overall plan for discouraging the inequitable distribution of wealth within a business, when that wealth was made through collective effort but decision-makers are inclined to disproportionately reward themselves.

Number 2: "What one person receives without working for, another person works for without receiving."

Well, in many cases I suppose this is true. My children receive food without working for it. I worked for it. I didn't receive it, since it went in my kids' bellies.

This, of course, is as it should be.

And I suppose that if you have hunter-gatherers living in an area of bountiful natural resources, they're "working" for what they receive in the minimal sense of reaching out and pulling the fruit from the trees. But then you compare them with another tribe of hunter-gatherers who live in a desert working far more than the first tribe has ever dreamed of working...and for their labors end up with far less. When you make that comparison, it begins to look like the first tribe has received something neither they nor anyone else worked for. And it looks like the second tribe is working hard without receiving much--but not because some other tribe is living off their labors.

Sometimes, one person receives something by good luck rather than anyone's work. Sometimes, another person's work has nothing to show for it because of bad luck, not because someone else ended up receiving the benefits.

So, what is this sentence getting at? I have a job. I get paid. The rickshaw puller in Calcutta has a job and gets paid. I work hard, but the rickshaw puller works orders of magnitude harder than I have ever dreamed of working. And the rickshaw puller gets a fraction of a fraction of what I make. There are probably investment bankers who spend as many hours at work, raising their blood pressure and shortening their life expentancy, as the rickshaw puller spends at work hauling more privileged people from one part of Calcutta to another. But the rickshaw puller, for that same amount of labor, is making a million times less.

The difference is a matter of luck, an accident of birth. Some people can't pull themselves up by their bootstraps, no matter how hard they struggle, because they have no boots. Others have closets full of boots they don't know what to do with--bought with their own money, to be sure, money they earned by working; but their work was rewarded 100,000 times more highly than the poor rickshaw puller's work. Do they deserve all those boots in a way that the rickshaw puller doesn't?

So: Who is working without receiving, and who is receiving without working? If two are working just as hard but one is getting a lot more, is the excess enjoyed by the one something that he or she is receiving without working for? Is the point that we should always receive an income in proportion to how hard we work? I suppose we could pull that off by having a world government taking income from those in the richest countries and giving it to the struggling poor laborers in the impoverished regions of the world...but I doubt that's what the fans of this sentence have in mind.

So what do they have in mind? Unless I miss my guess, it's supposed to be about government programs aimed at providing a social safety net for the poorest among us. You know, the programs that make sure the children of the unemployed single mother don't go to bed too hungry. True enough, that food those kids eat wasn't food they grew themselves. Their mother didn't grow it, either. Farmers did that.

Of course, most of the profits didn't go to the farmers--or to the poor kids. It went to Monsanto stockholders. And maybe to the lawyers Monsanto hires to sue the pants off farmers who inadvertently grew some genetically modified Monsanto crops because seeds drifted over from a neighboring farm.

Those making the big profits here probably worked hard, too--maybe as hard or harder than the farmers. Who knows? And I suspect that the mother of the hungry kids might be willing to work hard, too--assuming she could find a job, and assuming the cost of child care didn't all but erase her income ( maybe a job that earned her 3% of what that Monsanto lawyer makes in a year), and assuming she got to keep the job after the second time she missed work to tend to a sick child.

One single mother might be able to pull it off because she has an aunt or mother in town who can watch the kids so she can work three jobs to pay for rent and put food on the table for the children she never gets to see. But another single mother might be in a city far from relatives--because she ran away from the home in which she was being sexually molested and beaten, and became a prostitute to survive, and got pregnant. And now she has next to nothing and a baby to boot, and doesn't want to go back to prostitution on account of the child, but has no skills, no support network. No bootstraps.

We live in a world where opportunity and talent are not fairly distributed, where effort does not always translate into prosperity, and where there are no simple solutions. Some people are handed opportunity on a plate, and with a little bit of effort can turn it into a cornucopia. Others are handed a turd.

In such a world sentence 2 is staggeringly naive.

Number 3: "The government cannot give to anybody anything that the government does not first take from somebody else."

First of all, I should point out that we left the gold standard for currency a few years ago--by which I mean in the 19th Century--and the economic realities of today aren't adequately represented by a statement as naive as #3 (for more details on the complexities of the issues in play, see here).

Second, the government is able to provide goods through organized collective action that a bunch of individuals, acting on their own, couldn't provide for themselves. The members of society benefit from the fruits of such collective action: national security, domestic peace, transportation and energy infrastructure, a basic social safety net (to help make sure that, even when catastrophic illnesses or natural disasters or financially devastating layoffs occur, we'll still have bootstraps we can pull ourselves up by).

I enjoy a relatively secure daily life in part because of a criminal justice system provided me by the government. I get to work driving on roads and over bridges built by the government. My children are being educated by the public schools. I help pay for these things through taxes. Others help pay for them too. But since we'd all be poorer without the opportunities these public goods provide, should I think of the taxes I pay as the government taking something away from me? Or is it better to think of it as being part of a society that, through collective effort, is providing me and those around me with someting none of us could have produced acting on our own?

My paying taxes, in that case, is the difference between me actually being a part of that collective action and me being a freeloader.

Number 4: "You cannot multiply wealth by dividing it."


Number 5: "When half of the people get the idea that they do not have to work because the other half is going to take care of them; and when the other half gets the idea that it does no good to work, because somebody else is going to get what they work for, that is the beginning of the end of any nation."

Yeah, and if half the people in a nation fly to the moon in order to get away from the other half, and the other half fly to the moon to get away from the first half, then everyone in the nation will asphyxiate together on the moon.

Here's the thing: This statement is true enough, but so what? The statement matters--is something we should care about--if it's about something that's in danger of really happening.

I think those who find this sentence to be one of the best ones they've heard think of it as a warning about what will happen if we allow too much "socialism" into our society. But if so it's based on an Ayn Rand-inspired dystopian fantasy, not on any kind of socialism that has even the remotest chance of being vaguely approximated by the American government, regardless of which political party is in power.

I don't mean to say that there aren't serious problems with how we deal with poverty in America. While it is clearly false that half of Americans do not think they need to work because the other half is going to take care of them (and false that any policy proposals on the horizon would move us towards such a situation), it is true that there are some Americans who do not think that they have much hope of crawling out of poverty by working hard. They see living on welfare as the fairly miserable existence that it is, but don't believe that their effort and struggle will lead them to anything better. What results isn't laziness but hopelessness--not the optimistic idea that others will take care of them if they kick back, but the pessimistic idea that the social system won't reward them if they work hard.

If you want to change that, you have to change the way wealth is distributed. Somehow a higher proportion of the wealth generated by labor has to get into the pockets of the lowest level laborers, which in turn will likely mean that someone who is currently raking in the big bucks will have to see a smaller share of that wealth than they do now. There may be different ways to achieve this result, but one thing is clear: We can't rely on business decision-makers to fix the problem, since they tend to be beneficiaries of the current system. Chances are, if it's left to them, the problems will remain or only get worse.

Policies in Norway--a socialist country--have helped to ensure that the unemployment rate is among the lowest in the world--this despite having an ample social safety net. What's happened here? How dare the Norwegians be gainfully employed, in defiance of the Ayn-Randian narrative that socialism leads to a nation of people waiting for handouts? Maybe the answer is this: What encourages people to get to work is the presence of job options that promise a decent life, not the absence of a basic social safety net.

Is it foolish for a government to say, "If you don't bother to work we'll take care of you, and if you do bother to work we'll take your earnings away to take care of those who don't"? Absolutely. Has any presidential contender for either major political party in the US States ever seriously proposed such blasted idiocy? No. Have some people caricatured and distorted more left-leaning American politicians as if they were saying such a fool thing? Yes. Is a sentence that gestures to such a caricature one of the "best sentences I'll ever read"?



  1. Thanks Eric

    An excellent response to a powerfully stupid, and stupidly powerful, meme.


  2. OK, Eric, I'm not a Christian, but for this post I will gladly say ...


  3. Hi Eric,
    I've been reading your blog for the past year or more and I quite enjoy it (although I must say I do disagree with you sometimes).
    I think there are some important things that you miss in this article that prevent you from making a true analysis of the subject.
    I have two articles that I recommend you to read. Both are written by Paul Graham and I think they get to the point of the issue.
    And the second one

  4. Hi David

    Thanks for those links, which were interesting to read. Here's one point perhaps worth making, Graham's central case is at least approximately testable. If we take the data for industrialised economies, then his case would seem to suggest that low levels of economic inequality are a drain on investment, innovation and growth (low rewards leads to lower levels of risk taking). Yet, this isn't the relationship that we find. Rather, countries like Japan had forty years of uninterrupted growth with a much tighter income band than the US, Scandanavian countries have managed a degree of income equality without, it seems, sacrificing growth, Germany's record again sets it outside the expected pattern, in my own country, New Zealand, our most prosperous years coincided with the narrowest income spreads. Singapore stands out as another interesting example, I don't think South Korea's emergence has been on the back of US-like levels of top end reward, but would need to check this. So, if we use the data alone, there's something not quite right with what appears at first blush to be a plausible argument.

    Some research in this field points to one possible error. It seems that relative, rather than absolute wealth, might be a stronger motivator of economic behaviour. So, even if we compress top end incomes, so long as one has a chance of reaching the top, the motivation remains as strong. There's more to it than that, but the straight reward/risk taking trade-off appears to be a naive reading of human behaviour in this case.


    1. Hi Bernard,

      Thank you for your thoughtful response. I will say without a second thought that if it turns out that there is no correlation between increased taxation (and other forms of prevention for acquiring wealth) and a drain on investment, innovation and growth, than there remain very few reasons why we shouldn't do that (prevent people from getting rich).

      My intuition and the knowledge that I have so far on this matter tend to suggest to me that there is a correlation. But I'm interested in the research you were talking about, the one with relative vs. absolute wealth as a motivator for economic behavior (if you have a link please post it). Thank you!


    2. Hi David

      A guy who's done a lot of work on economic decision making is Daniel Kahneman (he got a Nobel prize for the work) and his book, Thinking, Fast and Slow, covers aspects of risk and utility decisions, along with a whole range of other fascinating behavioural stuff. The Spirit Level, by Richard Wilkinson and Kate Pickett, is a good place to find international stats on income distribution (the developed nations with with the highest level of income equality, in order, are Japan, Finland, Norway, Sweden, Denmark, Belgium, Austria and Germany, not a line-up you'd immediately associate with underinvestment in technology and innovation). It also looks at correlation between inequality and various social indicators and the analysis is fairly sobering.


  5. David,

    Thanks for these links.

    A couple of things. First, I think it is important to avoid false dilemmas. The first of the articles you link to addresses investment. The idea is that if the payoff of a risky investment isn't high enough, the risk won't be taken. Starting a business is risky. Hence, unless the promised payoff of success is sufficiently high, people won't start up businesses.

    Now how does this relate to my post? A main concern in my post above was to point out how, in effect, unregulated free market economies can produce opportunists who exploit the desperation of the poor in order to get them to contribute far more to the collective efforts of business than they get out of it. This path to riches comes from basically taking the worth of others' labor for yourself and giving back to laborers *far* less than their labor is worth. When such exploitation is allowed to occur in a society without any government constraint, poverty grows, and the hope and motivation of the poor evaporates.

    Now I suppose that one way that the risk of starting up a business might lead to a high payoff is that those who start businesses can, if successful, position themselves such that they will be able to exploit workers in this way. But here is the question: Would the risks of starting a business still be worth it if successful business owners were, through the tax structure, denied the opportunity to SO exploit workers that they deprive the working class of the hope that their labor will translate into a decent life?

    In other words, is the risk of entrepeneurship worth it ONLY if the payoff is free reign to stomp all over the hopes of other human beings? Or can we design a system which puts limits on how MUCH successful business owners can take for themselves of the collective efforts that go into a successful business WITHOUT thereby reducing the rewards of success so much that it's no longer worth the risk?

    It seems to me that only the most cynical would say that starting a business is worth the risk only if it promises the opportunity to exploit workers out of a living wage. While some might be discouraged unless the payoff is such exploitative power and the promise of the obscene opulence (in the midst of devastating poverty) that it makes possible, I'm not convinced that discouraging THEM is necessarily a bad thing.

    Part of the problem here is that things are so frequently thought of in all-or-nothing terms. Either we have an unregulated system in which the gap between rich and poor is able grow without theoretic bound, or we put such a low cap on the maximum income someone can make that the rewards of risky endeavors are erased. I'm not recommending the latter--and my anecdotal evidence of my enterprising business- and investment-oriented relatives in Norway suggests to me that the kinds of rewards available in a much MORE egalitarian society than the US (but in which the richest can still wind up hundreds of times more wealthy than the poorest) is more than enough to motivate the kind of enterprising risk-taking that's good for society (not all risk-taking is actually good for society or for those who take the risks, and so the fact that not all risks will be encouraged isn't NECESSARILY a bad thing).

  6. A related point that needs to be factored into our thinking: There are numerous studies out there which show that increases in personal wealth lead to diminishing returns in terms of a range of measures of life quality. As your wealth shoots up from dire poverty, your quality of life shoots up as well. But eventually the returns (in terms of happiness) for more wealth become basically nonexistent.
    (At an AAAS conference awhile back, I saw reports of these findings laid out using a range of measures of life quality, with the same diminishing returns curve generated again and again. This link offers at least summary of the general idea, along with a review of some lesson one might draw).

    If this is true, then after a certain point, increasing the financial payoff of a risky invenstment doesn't actually increase the HUMAN payoff. Now people may subjectively misjudge how a further increase in wealth will affect their quality of life, and so may continue to be motivated to pursue wealth beyond what increases happiness. And for risk assessment, the perceived payoff is what will motivate behavior, as opposed to the actual payoff. But unless we suppose that people have no concept of the realities of what will bring them life satisfaction and joy, the basic principle remains: There is a ceiling of financial reward beyond which increasing the reward won't lead most people to take greater risks than they would have for the sake of the lower (but still substantial) reward. This doesn't mean they won't PURSUE more wealth anyway, even if they would have taken the risk for less--since various factors can lead you to acquire what is available for the taking (when it's no longer a matter of taking big risks for it).

    In other words, if you have a tax system that corresponds with the diminishing returns of greater wealth in some meaningful way, you may not actually decrease the risks people are willing to take. What you will decrease is the tendency of people to keep on habitually accumulating just because they can, even when it's doing them no good and taking away what would otherwise be available for those who would really benefit from it.

  7. Two more points:

    1. For some investments, the payoff comes, not from the capacity to exploit laborers that you acquire if your investment succeeds, but from the new resource that is produced (e.g., a cure for cancer, or cold fusion, or a great work of literature to be enjoyed for generations to come). It seems that it is such productive investments that are good for society and should be encouraged. And it seems that we should be able to distinquish, in our tax system, between such productive investments and investment in the chance to exploit. It seems that the former sort of investment makes everyone richer, inculding the poorest. The latter sort makes some richer at the expense of others. A tax system can certainly be designed to encourage productive investments and discourage exploitative ones.

    2. Even if it is true that some risky investments might not be pursued if the payoffs aren't sufficiently high, in considering whether this is a cost we should or shouldn't bear we need to weigh it against the costs of allowing such high payoffs. If allowing such high payoffs entails that more people will be thrust into such deep poverty that they are left without any hope of making a decent life for themselves no matter how hard they work, then it is not at all clear that allowing such high payoffs is a good bet for society as a whole--not in terms of its effects on motivating the whole labor force to be as productive as it can be, and not in terms of its effects on overall quality of life.

  8. Bernard,

    Thank you for the resources, I will check them out.
    I don't think there is anything comparable with Silicon Valley in any of the countries listed by you, but that might not have much to do with income inequality anyway.

  9. Eric

    Let's start with what we agree on.
    1. We both agree I think that poverty is bad and that the more people we have that are poor, the worse it is.
    2. There isn't a fixed amount of total wealth in the world (it's not a zero sum game), but new wealth is created (or destroyed every day)

    What I think the best way to reduce poverty is, is by creating wealth. Start-ups are the most successful wealth creators (better than large corporations or governments). So having a system that allows start-ups to thrive is the best win-win scenario that we can create right now.
    And start-ups are much less likely to abuse their employees than huge corporations.
    The problem is that many measures that people propose and that are aimed to decrease the "evil" done by large corporations actually have larger bad unintended consequences on start-ups. Would you agree?

    1. You're basically correct on our points of agreement--although I'd qualify #2 by noting that there are geo-ecological limits to economic growth. As economies grow, they tend to use more natural resources and produce more waste. If the total rate of consumption exceeds the renewal rate of geo-ecological systems, or the total waste production rate exceeds the assimilation capacity of natural systems, then we have an economy that is unsustainably large relative to natural limits and it needs to be streamlined.

      There are some ways of growing the wealth in the economy that work by learning how to use untapped resources, or learning how to make existing resources go farther, and such growth actually expands the limits rather than exceeding them. But there is also quite a lot of growth or "wealth creation" that does the latter.

      I believe that as a society we have to develop ways to pay attention to this difference and find ways to encourage the former while discouraging the latter. If we increase total wealth today at the expense of geo-ecological systems, we are basically increasing current wealth by taking wealth away out our children or grandchildren--and often more wealth is taken away that is made, since when an ecosystem collapses due to overconsumption and waste production, it eventually stabilizes with a far lower "carrying capacity" than it had before the collapse. (Note that sometimes deficit spending is construed as taking away from the future for present gain--but while it can do this, it's a mistake to say it ALWAYS does this, since deficit spending could be directed towards investments in new technologies and infrastructures that help us to do more with less and to sustainably tap into new resources in ways that relieve the burden on strained resources).

      In any event, I think a smart tax system can and should encourage wise investment and discourage wealth creation that really just overextends our reliance on already strained resources. And I think a smart tax system can and should encourage fruitful entrepreneurship while discouraging the use of privileged positioning in the economy to unfairly increase the wealth of the wealthy at the expense of the upward social mobility of the underprivileged. It's a challenge to discern what tax system does this the best, and I certainly agree that not every proposal that INTENDS to achieve this succeeds in doing so.

      But--for the reasons underlying my qualification to 2, I am very leary of the view that the best way to reduce poverty is by creating wealth. I think that there is "real" wealth creation, and that we need to encourage such wealth creation in pursuing a more equitable and just society. But such real wealth creation occurs alongside "artificial" wealth creation--by which I mean magnifying present and/or future poverty in order ot concentrate resources in the hands of a few.

      Since "creating wealth" as it is usually invoked fails to distinguish these things, and since the limits of geo-ecological systems are real enough and close enough to being exceeded on a global scale, I suspect that much or most of the poverty reduction we see today will have to come from a sustained effort to PREVENT what I'm calling artificial wealth creation, as opposed to trusting only in encouraging real wealth creation.

      Can efforts to do the former inadvertently undermine the latter? Yes. Is it always easy to tell when that is happening? No. And I have a strong feeling that even policy wonks have a hard timing figuring it out. But they're far more likely to do so if they keep the sorts of distinctions sketched out here in mind, as opposed to pretending the distinctions don't exist (which strikes me as something that both political parties do to some extend, but Republicans more consistently--which is why I tend to trust their policy proposals less).

    2. Peter Diamandis has a great book on the issue of scarcity (Abundance: The Future Is Better Than You Think) and it responds to many of the issues that you raise about "stealing" the resources from the next generations. If you don't have time to read the book, at least watch his TED Talk which is basically a summary of the book and you can find it here http://www.youtube.com/watch?v=BltRufe5kkI

      Peter is also one of the co-founders of Planetary Resources, you might want to check that out too as I think it's also relevant to our discussion.

    3. Diamandis is part of the Raymond Kurzweil cabal of techno-optimists. I'm familiar with their ideas in general terms--and generally unimpressed for reasons I discuss here. But I haven't read Diamandis' book in particular.

      Reviews like this one, however, make me sketpical that Diamandis has escaped the recurring problems of those in his cabal--namely, an underappreciation of the work of environmental and social scientists who expose the nature and scope of the problems we face, and a seemingly unwavering faith in the power of technology. Together, these problems lead this cabal to mistake speculation for prediction, confusing the possible with the probable.

      The review of Diamandis cited above, however, also reviews a different book--one that, in a different way than Kurzweil and his cabal do, makes the case for optimism about the future expansion of resources and real wealth. The book is Philip Auerswald's THE COMING PROSPERITY, and his case seems to be rooted in considerations that may play well into the line of argument you have been pushing here (the emergence of conditions for widespread entrepreneurship). Were I to devote time to one of these two books, I have more hope that the latter won't be a waste of that time. But I may take the time for Diamandis's TED Talk, probably after the conference I've been organizing is finished.

    4. This review from the New York Times is better--indicating that while the book has the problems I worry about from the techno-optimist crowd, it also has much worth reflecting on. And the content of the review reiterates, I think, the importance of the distinction between real wealth creation (innovations and achievements that expand our limits) and artificial wealth creation (which concentrates wealth by exploiting the vulnerabilities of poor laborers). What we need to encourage, to give ourselves as much hope as possible in the face of the grim social and environmental problems we face, is the former. But at the same time we need to actively discourage the latter, since inequity magnifies the harms of growing environmental problems by temporarily insulating the privileged decision-makers from feeling (and so being motivated to respond to) the reality of the problems, and by magnifying the harms produced them by leaving large sections of humanity without any of the insulation. The latter, by the way, can lead to the sort of social unrest and upheaval that is in danger of undermining the stability in which innovation thrives.

  10. Hi Eric: I am not so sure we *should* expect high taxes to be much of a drain on investment. Suppose the marginal tax rate is 50% and suppose you are considering investing some dollars. Compared to no taxes at all, a 50% tax rate reduces your expected payoff by half. On the other hand, since half of those dollars you are considering investing will end up in the hands of the tax man, you are really only *risking* half as much as you would be if there were no taxes at all. Taken together it seems to me it might just be a wash.

  11. Is this topic connected with your professional field or is it more about your hobbies and ways to spend your leisure time?

    1. This post is more professional. Philosophy--my profession--is a discipline that encourages critical thinking about ideas over a wide range of topics. It teaches students not to be swept in by a clever turn of phrase but to consider what the phrase really means and whether it stands up to critical scrutiny. As a philosophy teacher who regularly teaches business ethics and issues in social and political philosophy, I'm interested in encouraging deeper critical reflection about things that are said in more popular discourse on these topics.

      Another things philosophers do as part of their profession is make a case for a particular view and put it out there in a way that encourages critical engagement with their arguments. This post is not TOO different, in some respects, from what I might do at a philosophy conference--except that I am responding to a popular meme instead of the work of another philosopher, and I try to avoid technical jargon, as well as the more rigorously detailed dialectic (considering rebuttals to replies to objections) that makes professional philosophy so difficult, sometimes, for the uninitiated to follow.