BBS

[nietzsche]

Can you go through this text I wrote:

In other words, people should be morally obligated to donate some amount of their goods to very poor people since this increases the net utility of the world.

Let's address the situation where donating can conflict with the means of creating wealth for the very poor.

To be clear, a donation is a transfer of wealth. In terms of wealth alone, this is zero-sum. In terms of utility, this is positive-sum (given that the donation is voluntary, of course). An exchange is a creation of wealth because in an exchange ex-ante each party values the other party's good more so than their own good. After the exchange, each party has increased their value (i.e. wealth). In terms of either wealth or utility, they are both positive-sum. We're assuming that utility is an increasing function in wealth and donations.

Now, suppose you pay $10 for a T-shirt that's been imported from an Indonesian 'sweat-shop'. Your $10 becomes distributed among the chain of suppliers--from the retailer, shipper, sweat-shopper, and the suppliers of labor within each market. Consequently, your exchange increases the net wealth of the world, and net utility has increased since additional wealth causes utility to increase. Net wealth: >$10--in terms of total value. Net utility: +something + wealth (i.e. the value created from exchange).

If you were instead to donate $10 to one of the many workers in the sweat-shop, then you forego the opportunity to increase the wealth and utility of all the other very poor workers in that sweat-shop as well as everyone (of varying wealth) in the production process. In other words, donating has a cost (the opportunity cost), and an exchange has an opportunity cost (from whatever else you could've done with $10). In this example, net wealth: $0. Net utility: +something + 0(wealth).


In short, since we live in a world of scarcity every action of ours incurs a cost. In the trade-off between donating and trading in terms of maximizing utility, trading increases utility on average more so than donation. So, why not opt for 100% trade and 0% donation*?

*tangent: and for that matter, why not advocate for the abolishment of international trade restrictions?

and explain, possibly edit the post to better explain, how government taxing affects this whole wealth creating (or not creating) chain?

thanks

[mrswdk]

inb4 BBS wakes up and this thread was all just a dream (and now he has to change his sheets).

[oVo]

Foreign aid could be another subject of discussion.

Most Americans think all government financial aid given abroad is their hard earned tax dollars. It partially is and probably more corporate dollars, since government subsidies and incentives often lessen industry tax burdens. Simply put US corporations have made BILLIONS of dollars from the natural resources of the world's poorest countries with the government returning millions in different forms of aid.

Corrupt governments have been tolerated for more than a century just to sustain industrial growth and the gravy train, while most of those regions don't even possess the basic infrastructure --clean water & electricity-- and other "modern conveniences" that most of us take for granted.

[notyou2]

tl;dr

[BigBallinStalin]

Can you go through this text I wrote:

and explain, possibly edit the post to better explain, how government taxing affects this whole wealth creating (or not creating) chain?

thanks

http://en.wikipedia.org/wiki/Parable_of ... ken_window

I like ya nietz, but not enough to spend more time editing that post. Just read the broken window story, and if ya still don't get it, I'll happily answer any questions.

[notyou2]

Can you go through this text I wrote:

and explain, possibly edit the post to better explain, how government taxing affects this whole wealth creating (or not creating) chain?

thanks

http://en.wikipedia.org/wiki/Parable_of ... ken_window

I like ya nietz, but not enough to spend more time editing that post. Just read the broken window story, and if ya still don't get it, I'll happily answer any questions.

Cop out!!!!

[Dukasaur]

Can you go through this text I wrote:

and explain, possibly edit the post to better explain, how government taxing affects this whole wealth creating (or not creating) chain?

thanks

http://en.wikipedia.org/wiki/Parable_of ... ken_window

I like ya nietz, but not enough to spend more time editing that post. Just read the broken window story, and if ya still don't get it, I'll happily answer any questions.

Cop out!!!!

read the link, understand it, and then you will be qualified to comment.

[AndyDufresne]

Can you go through this text I wrote:

and explain, possibly edit the post to better explain, how government taxing affects this whole wealth creating (or not creating) chain?

thanks

http://en.wikipedia.org/wiki/Parable_of ... ken_window

I like ya nietz, but not enough to spend more time editing that post. Just read the broken window story, and if ya still don't get it, I'll happily answer any questions.

Cop out!!!!

read the link, understand it, and then you will be qualified to comment.

Any wikipedia page that also links to the following, count me out of reading.


Disaster capitalism
Spending multiplier
Tax choice
Uneconomic growth


--Andy

[thegreekdog]

Can you go through this text I wrote:

and explain, possibly edit the post to better explain, how government taxing affects this whole wealth creating (or not creating) chain?

thanks

http://en.wikipedia.org/wiki/Parable_of ... ken_window

I like ya nietz, but not enough to spend more time editing that post. Just read the broken window story, and if ya still don't get it, I'll happily answer any questions.

Cop out!!!!

read the link, understand it, and then you will be qualified to comment.

I'm not sure the parable of the broken window applies to the scenario Niezsche has posed. But whadda I know?!?!?!

[BigBallinStalin]

Can you go through this text I wrote:

and explain, possibly edit the post to better explain, how government taxing affects this whole wealth creating (or not creating) chain?

thanks

http://en.wikipedia.org/wiki/Parable_of ... ken_window

I like ya nietz, but not enough to spend more time editing that post. Just read the broken window story, and if ya still don't get it, I'll happily answer any questions.

Cop out!!!!

read the link, understand it, and then you will be qualified to comment.

I'm not sure the parable of the broken window applies to the scenario Niezsche has posed. But whadda I know?!?!?!

Taxes are like breaking windows, thus 'improve' the economy. Donations are similar--on a strictly wealth basis. No wealth is created; it's transferred (minus the administrative costs from government), so taxes are negative-sum.

Taxes create deadweight costs. The deadweight cost can be understood by asking, "what exchanges would've occurred had there been no tax Y"? Taxes create a wedge between consumer and producer surplus. I recall you saying something like, "producers push the burden of taxes onto consumers, so only consumers buy less," but this is an incomplete picture. Had there been no tax, then the price would be less, thus the suppliers could have sold more (but they can't because of the tax).

[thegreekdog]

I would personally not apply the breaking window parable to taxes, mostly because taxes impose an added burden of bureaucracy (and associated costs). Breaking a window imposes a "I could have purchased something else" burden, but does not impose a bureaucracy burden. Taxes do.

And all producers are consumers, so your point about my point is largely irrelevant.

[Lootifer]

Better to be taxed than hand out subsidies imo.

[Metsfanmax]

Taxes are like breaking windows, thus 'improve' the economy. Donations are similar--on a strictly wealth basis. No wealth is created; it's transferred (minus the administrative costs from government), so taxes are negative-sum.

It must be nice to live in a fantasy world where the amount of money one has does not affect one's ability to create wealth.

[BigBallinStalin]

I would personally not apply the breaking window parable to taxes, mostly because taxes impose an added burden of bureaucracy (and associated costs). Breaking a window imposes a "I could have purchased something else" burden, but does not impose a bureaucracy burden. Taxes do.

And all producers are consumers, so your point about my point is largely irrelevant.

Sure, about taxes, but the story's headed in the right direction.


Suppose there was a tax on beer. Who experiences the deadweight loss? Consumers, producers, or both?

[BigBallinStalin]

Taxes are like breaking windows, thus 'improve' the economy. Donations are similar--on a strictly wealth basis. No wealth is created; it's transferred (minus the administrative costs from government), so taxes are negative-sum.

It must be nice to live in a fantasy world where the amount of money one has does not affect one's ability to create wealth.

That's a nice strawman. I'll give it a 3/10.

[DoomYoshi]

Taxes are like breaking windows, thus 'improve' the economy. Donations are similar--on a strictly wealth basis. No wealth is created; it's transferred (minus the administrative costs from government), so taxes are negative-sum.

It must be nice to live in a fantasy world where the amount of money one has does not affect one's ability to create wealth.

It must be nice to live in a fantasy world where wealth is redistributable.

In the real world, I am the only commodity. Whoever owns me (me) has all the wealth.



So, the split begins Yoshi.

[BigBallinStalin]

Taxes are like breaking windows, thus 'improve' the economy. Donations are similar--on a strictly wealth basis. No wealth is created; it's transferred (minus the administrative costs from government), so taxes are negative-sum.

It must be nice to live in a fantasy world where the amount of money one has does not affect one's ability to create wealth.

It must be nice to live in a fantasy world where wealth is redistributable.

In the real world, I am the only commodity. Whoever owns me (me) has all the wealth.



So, the split begins Yoshi.

If we take Mets seriously, we should divide your labor between 10 people on OT. They'll tell you what to do, and they'll reap the profits. I think you get about 5% of your autonomy, which will yield you more than someone making $2 per day. Shut up and bask in the warmth of knowing that you're increasing net utility!

[AndyDufresne]

Shut up and bask in the warmth of knowing that you're increasing net utility!

New BBS 2016 slogan.


--Andy

[Metsfanmax]

Taxes are like breaking windows, thus 'improve' the economy. Donations are similar--on a strictly wealth basis. No wealth is created; it's transferred (minus the administrative costs from government), so taxes are negative-sum.

It must be nice to live in a fantasy world where the amount of money one has does not affect one's ability to create wealth.

It must be nice to live in a fantasy world where wealth is redistributable.

In the real world, I am the only commodity. Whoever owns me (me) has all the wealth.



So, the split begins Yoshi.

If we take Mets seriously, we should divide your labor between 10 people on OT. They'll tell you what to do, and they'll reap the profits. I think you get about 5% of your autonomy, which will yield you more than someone making $2 per day. Shut up and bask in the warmth of knowing that you're increasing net utility!

Talk about a straw man! I object to the proposition that a donation can never be wealth-creating, and suddenly I'm a dictator.

[BigBallinStalin]

Taxes are like breaking windows, thus 'improve' the economy. Donations are similar--on a strictly wealth basis. No wealth is created; it's transferred (minus the administrative costs from government), so taxes are negative-sum.

It must be nice to live in a fantasy world where the amount of money one has does not affect one's ability to create wealth.

It must be nice to live in a fantasy world where wealth is redistributable.

In the real world, I am the only commodity. Whoever owns me (me) has all the wealth.



So, the split begins Yoshi.

If we take Mets seriously, we should divide your labor between 10 people on OT. They'll tell you what to do, and they'll reap the profits. I think you get about 5% of your autonomy, which will yield you more than someone making $2 per day. Shut up and bask in the warmth of knowing that you're increasing net utility!

Talk about a straw man! I object to the proposition that a donation can never be wealth-creating, and suddenly I'm a dictator.

I'm just having a lil fun, but that's one implication of redistribution for the sake of maximizing net utility. There's a small gap between making moral obligations and then having the state impose them on others. Democrats, Republicans, Green Party, and other sorts of self-proclaimed 'liberals' cross that gap frequently.

I've already said that a donation can 'create' wealth--in a similar sense to taxation, but if you don't think about the opportunity cost, you'll fail to consider the net creation of wealth. There's a difference between "zero-sum" and "positive-sum." I'm not sure why you can't grasp that distinction and the distinction between exchange and taxation/donation.

[mrswdk]

Taxation is an exchange.

[thegreekdog]

I would personally not apply the breaking window parable to taxes, mostly because taxes impose an added burden of bureaucracy (and associated costs). Breaking a window imposes a "I could have purchased something else" burden, but does not impose a bureaucracy burden. Taxes do.

And all producers are consumers, so your point about my point is largely irrelevant.

Sure, about taxes, but the story's headed in the right direction.


Suppose there was a tax on beer. Who experiences the deadweight loss? Consumers, producers, or both?

Story does head in the right direction.

Both. I make that point to make it real for people who mostly consider themselves consumers (or at least they consume different kinds of products compared to what they produce). So when Person X says "INCREASE TAXES ON GASOLINE" I like to note that those taxes will ultimately by paid by Person X, not by the oil company, so that Person X keeps that in mind when making that argument.

[Metsfanmax]

I'm just having a lil fun, but that's one implication of redistribution for the sake of maximizing net utility. There's a small gap between making moral obligations and then having the state impose them on others. Democrats, Republicans, Green Party, and other sorts of self-proclaimed 'liberals' cross that gap frequently.

I've already said that a donation can 'create' wealth--in a similar sense to taxation, but if you don't think about the opportunity cost, you'll fail to consider the net creation of wealth. There's a difference between "zero-sum" and "positive-sum." I'm not sure why you can't grasp that distinction and the distinction between exchange and taxation/donation.

I'm not sure why you still haven't understood that I'm arguing that donations to the poor are positive-sum. The marginal increase in productivity for every dollar is greater for the poor than for the wealthy. In other words, at the risk of getting pummeled for a simplistic graphic,

[thegreekdog]

I'm just having a lil fun, but that's one implication of redistribution for the sake of maximizing net utility. There's a small gap between making moral obligations and then having the state impose them on others. Democrats, Republicans, Green Party, and other sorts of self-proclaimed 'liberals' cross that gap frequently.

I've already said that a donation can 'create' wealth--in a similar sense to taxation, but if you don't think about the opportunity cost, you'll fail to consider the net creation of wealth. There's a difference between "zero-sum" and "positive-sum." I'm not sure why you can't grasp that distinction and the distinction between exchange and taxation/donation.

I'm not sure why you still haven't understood that I'm arguing that donations to the poor are positive-sum. The marginal increase in productivity for every dollar is greater for the poor than for the wealthy.

I would normally agree with you Mets except that I wonder about the productivity of a dollar to a poor person compared to a rich person when it is more likely that the rich person can use that dollar to create productivity where the poor person would spend it.

[Metsfanmax]

I'm just having a lil fun, but that's one implication of redistribution for the sake of maximizing net utility. There's a small gap between making moral obligations and then having the state impose them on others. Democrats, Republicans, Green Party, and other sorts of self-proclaimed 'liberals' cross that gap frequently.

I've already said that a donation can 'create' wealth--in a similar sense to taxation, but if you don't think about the opportunity cost, you'll fail to consider the net creation of wealth. There's a difference between "zero-sum" and "positive-sum." I'm not sure why you can't grasp that distinction and the distinction between exchange and taxation/donation.

I'm not sure why you still haven't understood that I'm arguing that donations to the poor are positive-sum. The marginal increase in productivity for every dollar is greater for the poor than for the wealthy.

I would normally agree with you Mets except that I wonder about the productivity of a dollar to a poor person compared to a rich person when it is more likely that the rich person can use that dollar to create productivity where the poor person would spend it.

OK, that's fair. Recall that this discussion is overflowing from the other thread, and I haven't been arguing that rich people should donate all their wealth to the poor, but only a significant fraction of the income that is disposable -- that they would not otherwise have been using directly on productivity.