It would be nice if there were some way to "ensure that working people earn enough to make a decent living". If you define "decent" in terms of US lifestyles, I don't know how to do this. Do you have any ideas?
I guessed that NW-Bound would define "decent" as somewhere around half the US median wage. (I'll let NW-bound tell us if I missed the mark.) If so, I don't think your approach meets that standard. That is, I think there are people in the US who are willing to work full time but won't earn that much. Basically, international competition, low living standards in other countries, and our willingness to import unskilled workers, will pull some US-born workers down below the "US-decent" income level.
Yup... it's called socialism....
I'd be interesting in hearing NW-Bound's reply.
What you say may well be true, that those businesses would not create enough demand to provide a wage base that many see as 'enough'. I don't see it as my place to define that 'standard', the economy needs to do it. But to me, the relevant question is - if that is the goal, what is the 'solution'? And is that 'solution' better than what the free market would offer?
One constant that I have seen - when you create/force an artificial (non-market) value on something, it creates unintended consequences. Often, those consequences are counter to the original intent, they do more harm than good.
I don't know how to define that level either. To me, it simply does not seem right for the weaker members of society to be neglected while the rest prospers.
I used to have political discussions with my friends who are self-proclaimed libertarians. I often agreed with them enough that they said that I too was a libertarian but did not want to admit it. I then said half-jokingly that, sure I was a libertarian, but a "kinder, gentler" one (to borrow from Bush Sr.). By the way, do you know that Ayn Rand hated libertarians?
Morality or charity asides, for my own "self-interests" I know that too great an economic inequality would lead to political instabilities. That does not work out to anybody's advantage. We have brought up the French and Russian Revolutions in previous threads on this subject.
On the other hand, what we all have seen is that if the assistance is made too readily available, people tend to give up trying and become dependent on the help that the state provides. People who have raised children know this all too well.
Recently, I read an article on a charity organization that provided money to dig a well in a third-world village in abject poverty, where people have to walk for a couple of miles to a water source far from home. After the well was dug, they made a follow-up survey and found that some villagers still weren't happy. They said that it was not fair that some residents were fortunate to be living right near the new well, and others had to walk a few hundred feet to get water. They asked that new money be sent to provide plumbing into each house!
The above story took me aback, but then such is the human nature about greed and envy. I am not saying that unfortunate people should not be helped, just that any charity would be limited yet people's desire is bottomless. At some point, somebody will always be left unsatisfied.
Capital gains tax rates currently appear lower than tax rates on earned income. I'd like to see them be equal. Does this seem excessive to you?
Yes, it seems punitive to me if there is no inflation-indexing provision for long term gains. If there were a realistic way to index capital gains to inflation and there was no double taxation of dividends, I'd believe all this income should be taxed at the same rate.
But as it is, long-term cap gains are mauled badly by inflation and a dollar paid out in dividends is taxed twice, so I believe these forms of income should receive different treatment.
I raised the question about taxes on capital gains as a rhetorical question. I would think most forum members, myself included, who have or aspire to retire early, expect to live off our investment either through capital gains or stock dividends. That does not keep me from asking why these income sources deserve a special tax break compared to wages. And if luck is brought up as a contributing factor to high wages, surely it would be more so for stocks "bought low and sold high".
Anyway, I would think treating all incomes - cap gains, dividends, interests, and wages - the same would be an equitable policy. But then how does one compensate for inflationary effects on capital gains, and double taxation on dividends, etc...? It is truly a complex problem.
I know to ask questions. I do not claim to know the answers at all.
The first two paragraphs of the Rand quote are generally accepted in the US -- hence the Constitutional provision for patents. The third paragraph seem way over the top. That might be a literary device on Rand's part just to fit the character, or she might have actually believed it. I don't.
You can't leverage the laborer's efforts to free up the intellectual to do great things and then claim that the laborer's only contribution is the physical material he produced directly. What he also produced was the opportunity for the intellectual to do great things.
I myself do not look down on laborers. I myself like to do dirty work for a physical exercise. I do not want to do that for a living, simply because it does not pay as much. People are all different, and what would this world be if we were all doctors and scientists? We are all dependent on each other, and have our own place. The compensation system works out more or less according to a free-market system, which rewards according to supply and demand. There are more laborers than researchers who can devise a swine-flu vaccine. Ayn Rand's point is that such researchers are worth more than their weight in gold. Very true, and much much more so than an engineer like me who designs some electronic devices. From a pragmatic point of view, such medical researchers are pretty rare and need to be pampered.
Anyway, back to the opening post about thanking one's lucky stars...
If I feel a need to thank my lucky stars, I would express my gratitude for living in this country, where even the poor people are greatly better off than those in third-world countries, this country where colleges are open to all aspiring citizens and not just children of an elite class, and where there is no caste system. And this is a country where the main medical problem facing the poor people is obesity and not starvation.
You have seen me mentioning Communism often. If you have not read Aleksandr Solzhenitsyn, I highly recommend "One day in the life of Ivan Denisovitch" and "The First Circle". I am thankful for being in a society that is closer to a meritocracy than most other developed countries, and for not growing up in Communism where equalitarian ideas were taken to absurd levels.
I would like to tell a story I heard from a Vietnamese refugee who escaped after the Communist take-over in 1975. When Communist cadres took over a hospital in Saigon, they interviewed all the workers there to know their job functions. Upon hearing that a janitor stating that she had been working there a couple of decades, they exclaimed "And the capitalists have not promoted you to be a doctor yet!".
And finally, I like to thank everybody for an enlightening discussion. I have learned a lot from everybody and enjoy the conversation. Last but not least, I also like to thank the moderators for not closing this thread, though we have not discussed ER much.
