Introduction

clint eastwood
“Deserve’s got nothing to do with it.”
William Munny, Unforgiven

Moralists, especially authoritarian types, tend to go on a lot about what people deserve. Criminals deserve punishment, only some poor people deserve help, the hard working deserve a reward, etc. However, in an empirically based system, deserve’s got nothing to do with it.

Taxes are a constant argument, particularly with glibertarians and other right-wing ‘economic conservatives.’ They will insist that taxation in general constitutes theft by force, and that the particular practice of assessing a progressive income tax is the height of unfairness, as the rich ‘deserve’ to keep their money, for which they allegedly worked very hard. The first complaint is absurd on the face of it. Taxation is necessary to pay for infrastructure, including a system of property laws and the courts to enforce same. It is an intrinsic part of any human society larger than a hunter-gatherer band, the only real questions being a) how much infrastructure is provided and b) how the taxes are collected. The amount of infrastructure possible varies with a society’s level of technology (without electricity you can’t install high speed data connections), but within those limitations, it can actually be calculated how much and what types of infrastructure should be built.

The second complaint looks superficially valid from a fairness standpoint, although the pragmatic reasons mentioned below would still override it even if so, but even on that level the argument falls flat. The more wealth you have, the more you stand to lose, and the more reliant you are on society’s infrastructure to guard and keep it. Thus, you owe more to the upkeep of that infrastructure than someone not obtaining such benefit from it. Further, it would not have been possible to attain that level of wealth at all unless that infrastructure were in place to begin with. Even the moderately wealthy in the first world today are in absolute terms richer than any king in the middle ages, while the likes of Bill Gates, Warren Buffett and the Koch and Walton families control more wealth than even contemporary absolute rulers of poorer nations.

In even more pragmatic terms, economies work better the higher the velocity of the money that passes through them. The wealthier a person is, the less of their income they spend directly, and the more of it is tied up in savings, stocks, and bonds, which do little to nothing to circulate the money they contain. Conversely, the poor tend to spend money rapidly, which results in a need for goods and services, and the people providing them to get paid, and thus the money circulates. If the government is going to move money around to spend paying people to create and maintain infrastructure, it is better to take it from a place where it isn’t moving and put it in motion than to slow it down by taking it out of the hands of someone who would spend it immediately. Furthermore, the wealthy person suffers less negative effect from the loss of that money; 25% of a million dollars a year leaves one with $750,000, which is enough still for quite an extravagant lifestyle, while taking 25% from someone making $26,000 (roughly the median income), leaves them with only $19,500, putting them now below the poverty line. Finally, it is simply more efficient to collect $250000 once from one person than to chase after the 39 median income people you’d have to get $6500 apiece out of.

Welfare operates on similar principles; a person who is not receiving wages is essentially removed from the economy both as a producer and as a stimulator of production. Forcing people in this situation to burn through all of their capital and putting them in positions that impair their ability to find paid work of some kind prolongs the period during which they will not be producing as much wealth as they might, and further reduces the amount by which they stimulate productivity, which further reduces the demand for labour in a vicious cycle. Providing financial support to them ensures that they remain stimulators of production, and reduces the likelihood that they will incur untenable emergency costs as well as the likelihood that they will begin committing criminal activity and causing further harm. Whether someone ‘deserves’ to have money according to some arbitrary standard is irrelevant; everyone benefits from ensuring that no one starves.

Hard work is another bugaboo of the moralist. They will insist that hard work inherently pays off, and everyone who is wealthy got that way through hard work, and that only people who work hard deserve any type of material property whatsoever. Leaving aside that both of these precepts are patently untrue (if necessary, I will devote another post to why this is the case), they are once again irrelevant. One alleged corollary of these precepts is that unions are evil, because they shelter lazy workers and prevent good workers from receiving higher pay than the aforementioned lazy individuals. The problem is that in the real world, in a corporate environment, individuals have effectively no power to negotiate their wages, and these wages will only be based on productivity in any way if the company calculates that they can pay less that way, and will constantly increase the amount of productivity needed to get the same pay. On the other side, if employees can be let go very easily, they can be let go easily for any reason at all, and will be. These facts played out constantly through the 18th and 19th centuries, which is what led to the formation of unions in the first place. Ensuring relatively high wages, which is empirically something which follows from a unionized workforce, is a good thing for the same reasons mentioned above: velocity of money makes the economy go round.

That’s all for now

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