Tag Archives: taxes

Mr. Darcy & American Aristocracy

So apparently Romney pays around 13% a year in taxes on an income of over 20 million dollars.  Paul Ryan paid 20% on $323,000 in 2011.  And many of the most wealthy people in the United States, billionaires even, are paying less than 10% (CNN).

This is because wealthy individuals gain most of their income through return on investments, quite often in the form of capital gains which is taxed at a lower rate.  This is because not all real income is real income.  Some of it cannot be spent on whatever the new owner of fake income wants to buy.  And much of it cannot be deposited in a savings account because it can spontaneously combust.

Lately I have had a strong sense that I live in an immoral society—tt assails me like a stiff wind—not because everything about America is awful, indeed I love my country, but because we are thoroughly corrupt in at least this respect: as a society we have decided to favor, and to create, an upper-class.

Until quite recently, the English aristocracy was alive and well, and dominated English society.  I love Victorian movies and books (I’m still a hardass though!) and recently my curiosity was piqued by the constant discussion of income, “Mr. Darcy has 20,000 pounds a year!”  Do they mean wages, capital gains, or what?

I looked into it, and it turns out that to be an English aristocrat you usually had to make over $3 mil. a year (adjusted for inflation).  They did not acquire this income through business ventures, mercantilism, wages, or through any great talent on their part really.  It came from speculation, investments (most often chosen by others), and rents from large estates and tracts of land — it came from pre-owned wealth.   The Duke of Marlborough, one of the richest aristocrats of the time, pulled in $52.5 mil annually.  To put that in perspective, Warren Buffet pulled in $62 mil. last year, also from pre-owned wealth (admittedly cleverly invested wealth, likely more cleverly I imagine than the Duke of Marlborough).

But Victorians considered the Duke’s income as real income while we pretend it is not, at least not as real as income made from wages.  Indeed, wages, the money received based on time, skill, expertise, and effort, should be taxed heavily.  That stuff simply should not be incentivized.  Don’t these people know they should already have wealth to invest?  Rather, aristocrats sitting on pots of gold and passing it down to their children…that is the stuff civilizational dreams are made of.

So if you love this American economy
Than vote for Mitt Romney
And I won’t forget the men who died
So I could make money,
And I’ll gladly stand up
For freedom
To speculate at low tax rates
Cause their ain’t no doubt I love this land
God bless the USA

(Based on the chorus of Proud to be An American)

Outliers (2008), Guns, Germs and Steel (1999), and Michele Bachmann–Part 2 of 2

Outliers made me realize that lots of people are talented, work hard, and succeed (10,000 hour rule), but the bridge between success and wild success is built exclusively on fortune.  Because of this I cannot help but surmise that much of the wealth of the wildly wealthy belongs, in a way, to all of us.  Guns, Germs, and Steel took this line of thinking further: the “us” is larger than one country.  In other words, much of the wealth of wildly wealthy countries belongs to the world.

By 12,000 years ago, every continent and major area had been settled.  People were everywhere.  In Guns, Germs, and Steel, Jared Diamond asks this question: why did some societies develop faster than others?  In other words, why did the Spanish conquer the Aztecs instead of the Aztecs sailing to Spain and conquering the Spanish.  He notes, quite correctly I think, that if you do not have an explanation for this, it is difficult to uproot racism–even one’s own.  How could a couple hundred Conquistadors conquer millions of Aztecs?  Our minds immediately go to the first distinction: one group is Spanish, the other is Aztec.   To combat this, Diamond explains in detail why societies developed the way they did.  I want to point out just a handful of his observations.

In the long term, enormous benefits come to those who stop being hunter-gatherers and turn to food production.  I’ll mention three.  Because hunter-gatherers support population densities of 10-100 times less per acre than food producers, 1) food producers have more warriors and 2), and this cannot be overstated, high population density breeds diseases and disease-tolerant populations.  3) Also, food production will eventually allow some people to do something besides agriculture.  Food production allows for food supluses which can support an artisan class, a key to starting the process of rapidly ‘making stuff better.‘  Artisanship leads to specialization, expertise, academia, and ultimately to some form of scientific inquiry and space shuttles.

But these benefits are long term.  In the short term, the switch from hunter-gathering to food production can be very unattractive for at least these two reasons.

  1. In general, food producers have to work harder than hunter-gatherers, sometimes even twice as many hours in a day.
  2. The first food producers had, compared to what we had today, pretty shitty crops.   Have you seen a wild tomato?  They are tiny pathetic albeit beautiful things.  It would take a while for those to develop into something big enough to be worthwhile.  Likewise, after controlling the breeding of domesticated animals for thousands of years, we have developed chickens that create lots of eggs and lots of meat.  Sheep have more wool.  Cows have more milk.  All of these gains would be nearly non-existent when they first started.

Of course, hunter-gatherers did not switch to food production because they foresaw its benefits for distant descendants.  Indeed, because making the switch was so unattractive, food production only developed independently in 4 separate places around the globe.  The cultrual, and specifically agricultural, descendants of these areas would come to dominate the others.  For example, it is estimated that Spanish disease wiped out between 85-97% of the Aztecs in first 130 years of exposure to Conquistadors.  This incredible advantage was due directly to population density made possible by the switch to food production.

Switching to food production doesn’t really make sense until you have a package.  A food production package includes a number of different domesticable crops along with animals to eat, to use for muscle and for manure.  Why weren’t all aborigines able to develop a food production package from local flora and fauna?

Jared Daimond tells this story: He was hiking in the jungle of Papua New Guinea with a few aborigines and ran out of food.  They stopped for the night, and one of the men slipped off into the falling light.  He came back with arms full of mushrooms and starts preparing them.  “We can’t eat these,” Jared protests, “people get sick from mushrooms all the time.  Even scientists who study it their whole lives can collect the wrong mushrooms and die.”  The aboriginees turned to him, scolded him like a child, and then commenced to describe, by memory, the 87 different varieties of mushrooms that could be found in that area, how they could be recognized, where they grew, which parts were edible, what sort of sicknesses were caused by ingesting the wrong parts, etc.

It is reasonable to believe that 12,000 years ago everyone would have been just as familiar with the local flora and fauna as the aborignees in Daimond’s story.  Ok, so why did food production develop in some places but not others?  In short, some places, like the fertile crescent, had enormous local benefits.  Others, like Australia, had very little benefits.  What are these benefits?  Edible plants that were the easiest to domesticate, the “low hanging fruit,” were nearly all native to areas in which food production developed independently (e.g., wheat was native to the fertile crescent and was by far the best candidate for domestication).  Even more striking is that worldwide there are only 14 possible domesticable animals.  Of these, 7 were native to the fertile crescent.  None were native to Australia.

What facilitated the spread of food production across Eurasia is another thing that Eurasians cannot take credit for: their continent’s long east/west axis.  Crops and animals had a hard time spreading over North and South America.  The tropical jungle, the Isthmus of the Panama, as well as the vast climate differences associated with different latitudes, made the spread of food-producing crops and livestock very unlikely.  After all, a llama is not suitable to live in the Amazon.  Not until the present age were Llamas raised in North America where, it turns out, there has been appropriate environments for thousands of years.  In contrast, the crops originally developed in the fertile crescent, and the animals domesticated there, could be used everywhere from Spain to east asia (although east asia was blessed with rice varieties and water buffalo, upon which they developed their own agricultural package).  So why wasn’t there domesticable animals in places like North America?

The truth is, and I did not know this before I read Diamond’s book, there was.  Archeological evidence suggests that there were various animals that might have been docile, herd-like, sufficiently safe, etc.–that would have had all the qualities necessary for being a candidates for domestication.  Millions of these creatures covered North and South America, but they had a weakness.

Remember the Dodo bird?  It had developed without humans, and so had no fear of them.  Hungry explorers would literally walk up to them, grab their heads, wring them off, and make supper.  Such an easy food quickly went extinct when they were exposed to humans.  Now, unlike Eurasia and Africa, the flora and fauna of the American continents developed, like the Dodo bird, with no human contact.  But, 20,000 years ago, when humans crossed the Bering Strait, that isolation ended, and animals that might have done nicely as plow-pulling, milk-producing, manure-making, yummy beasts were killed and eaten.  Little did these newly arrived peoples know that they were killing their own descendant’s chances of food production and opening themselves up to Spanish conquest 20,000 odd years down the road.

In two recent Republican presidential debates, this question has been posed to Michelle Bachman: for every dollar that I make, how much do I deserve to keep?  She responded without hesitation: “All of it.  You earned it.  Of course you deserve it.”

Among hunter gatherers, without division of labor, there is in fact a surprising amount of equality, and decisions that the strong-man makes are generally arrived at by consensus.  Combine that with the previously-mentioned intimate knowledge hunter-gatherers had of their environment and this scene comes to mind:

Everyone had noticed: the mighty herds were gone.  A good many of the tribe were thinking that restraint might be necessary.  They were hoping that their strong-man would make a decree.  Others, no doubt, were indignant.  “How dare you tell me how to live my own life!”   This group despised any attempt at others to coerce them, which of course nobody wanted to do.  The tribe had grown large with the easy abundance of food, but now great swaths of land had to be combed over in an attempt to locate these animals, and some large families were already on the verge of starvation.  How could people be expected to limit consumption now?

So I imagine the opportunistic prehistoric politician/priestess, jumping around a fire in garments made of animal fur, preaching earnestly to her people.  “You killed it.  You dragged it back to camp.  You cooked it.  Of course you deserve it.”

“Therefore Joy,” OutliersGuns, Germs and Steel, and my study of economics–and I would even say the Bible too–puts me in a different place.  For every dollar we earn, we probably deserve very little of it, and even less as one becomes more wealthy.  Nearly everything we are able to accomplish we owe to others, some living, most not, and all of us in one way or another owe God/fortune.

However, God and most people, past, present, and future, aren’t idiots; if individuals do not get enough gain from their labor, they will not work.  And so God and society are generally wise to approve of individuals and individual countries keeping a disproportionate amount of their profit.  But we must never think that anyone is entitled to cheap oil or tasty, slow-moving creatures.  Instead, all should be thankful for the gifts and advantages they have been given.

I imagine the global non-temporal society, which we are connected to in a weird and beautiful way,

  • from those who first switched from hunter-gathering to food production
  • to modern day Australian aborigines who never had a viable food-producing package
  • to our children’s children’s children who will live out the consequences of our actions,

…is genuinely thrilled to see us productive and rewarded for our work.  After all, present day production and innovation, though often dependent on the exploitation of natural or human resources, may ultimately do the most good.  But I also imagine this global non-temporal society beseeching us to be thankful and do our best to look out for their interests too.  Jesus might call it “loving your neighbor.”

These days, I might call it being a conservative Democrat.