Conquer Club

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?

nietzsche wrote: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

BigBallinStalin wrote:

nietzsche wrote: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 wrote:

BigBallinStalin wrote:

nietzsche wrote: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 wrote:

notyou2 wrote:

BigBallinStalin wrote:

nietzsche wrote: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.

Dukasaur wrote:

notyou2 wrote:

BigBallinStalin wrote:

nietzsche wrote: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.

thegreekdog wrote:

Dukasaur wrote:

notyou2 wrote:

BigBallinStalin wrote:

nietzsche wrote: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 wrote: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.

thegreekdog wrote: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.

Metsfanmax wrote:

BigBallinStalin wrote: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.

Metsfanmax wrote:

BigBallinStalin wrote: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.

DoomYoshi wrote:

Metsfanmax wrote:

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

BigBallinStalin wrote:

DoomYoshi wrote:

Metsfanmax wrote:

BigBallinStalin wrote: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!

Metsfanmax wrote:

BigBallinStalin wrote:

DoomYoshi wrote:

Metsfanmax wrote:

BigBallinStalin wrote: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 wrote:

thegreekdog wrote: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 wrote: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.

Metsfanmax wrote:

BigBallinStalin wrote: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.

thegreekdog wrote:

Metsfanmax wrote:

BigBallinStalin wrote: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.