informationliberation
The news you're not supposed to know...




An Introduction to Austrian Economics: Understand Economics, Understand Everything
The Century of the Self: The Untold History of Controlling the Masses Through the Manipulation of Unconscious Desires
The Disappearing Male: From Virility to Sterility

The Obama Deception: The Mask Comes Off
Operation Gladio: The Hidden History of U.S. Sponsored False Flag Terrorism in EuropeThe New American Century: The Untold History of The Project for the New American Century
(more)
Article posted Jan 08 2013, 3:17 AM Category: Economy Source: Dušan Petrovski Print

On the Economic Calculation of "Fair Share"

by Dušan Petrovski

When one speaks of a concept it is important that it is properly qualified so as to be correctly understood. Failure to accomplish that makes impossible for either the problem to be identified or a desired solution to be found. Perhaps this is why politicians have a tendency to speak of ill-defined and oft muddled concepts, like "social justice," "a living wage" or "fair share." These concepts are impossible to define in a way consistent with how they are represented, since their proponents represent them as definite, rather than abstract matters. In our time the demand for "the rich" to pay their "fair share" trough higher taxes has become a standard war cry broadcast from every public and crony source of media. Yet, there is no objective means of defining either what constitutes "the rich" or "fair share." Politicians and demagogues alike may debate these issues for as long or as short as they may desire, but whatever level they agree on is sure to be arbitrary, save for the only objective conclusion that such concepts are impossible to qualify.

Given a communistic ownership of schools, roads, streets, parks, healthcare institutions, libraries, schools and universities, how is one to be able to calculate each person's use--"fair share"--of each? What share of a road belongs to a particular taxpayer? What usage is "fair share"? How many books in any given library belong to a specific person and which specific books? Who owns the walls and who owns the library's carpets? Does the person paying more in taxes own more of the roads, libraries or schools than the person who pays less? What of the person who pays no tax at all? What of the person who desires to use his claim on a gymnasium, and of nothing else? Does the state university graduate owe a particular service to the taxpayer that subsidized or paid for the operation of the university? A typical example of who "fair share" proponents see the world is given to us by US Sen. Elizabeth Warren:
There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for.
As communistic concepts go, the idea of the "fair share" is simply a reiteration of the "from each according to his abilities, to each according to his needs" idea. The first question that poses itself is who is "the rest of us," and how much did each of "the rest of us" contribute to the end of providing the goods and services Warren talks about? Furthermore, how are we to know that "the rest of us" get a market return on their investment in the public roads, schools, police and firefighting forces? In presenting the issue like that, we discover that we are unable to perform the critical task of economic calculation.

We will not even try to right everything that is wrong with Mrs. Warren's statement and reasoning, just some of it. (Here we will ignore that fact that the majority of taxes in the US and Canada are paid by a very small percentage of the population.) According to Warren's logic, a shovel making entrepreneur who never attended a university, and built up his business through his own work, acumen and sacrifice, saving and wise investment, still reaps the benefits of the university he never attended, by virtue of the fact that someone who did can now be employed by the shovel maker as an accountant. While true that the shovel maker reaps the benefits of the accountant's services, if he is hiring the accountant, it must follow that the entrepreneur is paying for those services. Once the shovel maker puts the university graduate under his employ, the first pays the second for the services he performs for him.

Despite their outward dissimilarity in how they accumulated their abilities, the university graduate is no different from the shovel maker who learned his trade outside the educational system. The university graduate went to school for four years and accumulated knowledge. The shovel maker paid for his training either through the process of apprenticeship or through trial and error, or perhaps even attended a shovel making school. Either way, the shovel maker gave up some of his own savings or earnings in order to find more efficient ways of producing a more marketable product.

If the graduate was paid to be educated by virtue of taxpayer subsidies, and then paid to dispense his knowledge, he is investing nothing and gaining everything. Who owes what to whom here? Is the shovel maker--a taxpayer--part of "the rest of us" or is it the tax consuming university graduate? If the goods and services listed by Warren are paid for by taxes, then contributing to the tax revenues of a jurisdiction makes one a member of "the rest of us"--the body of people that paid for the goods and services in question. Yet, still we cannot calculate to what extent the shovel maker's taxes paid for the accountant's education, and what portion of the shovel maker's taxes contributed to road construction.

What is the "fair share" that the university graduate owes to the shovel maker? Here we need to extend the scope, and ask "What is the ‘fair share’ that the shovel maker owes to the baker for the construction of the roads?"; “Why not have shovel maker pay the baker for the use of the road?”; “What is the ‘fair share’ that an obese alcoholic owes to a health-nut?” and so on. While it is possible to calculate the university graduate's marginal value product in his function as an accountant employed by the shovel maker, it is not possible to calculate how much this shovel maker contributed to the training and education of this particular university graduate. The same principle can be applied to roads, libraries, police and fire departments and any other "public" good or service. It follows that the "fair share" doctrine is an indefinable political tool intended to be used as needed, when needed, by office seekers. It is not a policy to be sought in order to bring equality under the law or economic prosperity, as it is a concept that runs against the principle of private property.
_
Born in the Socialist Federal Republic of Yugoslavia and exiled from Macedonia with his family in 2000, Dušan manages his family’s wooden pallet recycling company and resides in St. Catharines, Ontario. Send him mail at dusanjordanpetrovski@gmail.com or “friend” him on Facebook.





Latest Economy
- Who's Afraid of the Workers' Revolution?
- Sports Stadiums: Temples to Crony Capitalism
- Obamacare Architect Says Society Would Be Better Off If People Only Lived To Age 75
- Elizabeth Warren Says US Has "No Future" If Free-Market Embraced
- Cost of Renouncing US Citizenship Goes From Free In 2010 to 450$, And Now It's Been Jacked to $2,350
- Colorado's Illegal Pot Market Thrives
- Neighborhood Bully - America Recklessly Throws its Weight Around
- Doug Casey on the Phil Donahue Show (1980/1981)









No Comments Posted Add Comment


Add Comment
Name
Comment

* No HTML


Verification *
Please Enter the Verification Code Seen Below
 


PLEASE NOTE
Please see our About Page, our Disclaimer, and our Comments Policy.


FAIR USE NOTICE
This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the DMCA and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.

About Us - Disclaimer - Privacy Policy



Advanced Search
Username:

Password:

Remember Me
Forgot Password?
Register

Video: Cop Arrests Subway Performer For Singing, Despite Cop Reading Aloud Rule Saying It's Permitted - 10/20Video Shows Officer Coaxing Friendly Pets Closer With Kissing Noises Before Opening Fire - 10/20ISIS Cited as Michigan Village's Police Push for Secrecy - 10/20County Justifies Warrantless Raids Because Cannabis Plants Are An 'Immediate Danger' - 10/20Reading the Road Map to a Police State - 10/20FBI Director Demands Law to Give Cops Backdoor Access to Everyone's Private Data - 10/20New Zealand Police Raid Home Of Reporter Who Embarrassed Gov't Officials & Was Working On Snowden Documents - 10/20Chicago Cops Loot Taxpayers For Settlement After Beating Woman During Raid; Video 'May Inflame Jury' - 10/21

Rialto, CA Police Made to Wear Cameras, Use of Force Drops by Over Two-ThirdsCop Who Karate Chopped NY Judge In Throat Gets Off Scot-FreeFlorida Cop Smashes Compliant Woman's Face Into Car -- "Maybe Now You Can Understand Simple Instructions"VIDEO: Lapel Cam Reveals A Day In The Life Of A U.S. Police Officer (Tasing, Beating, Breaking & Entering, Stomping On Heads... and Laughing About It)Caught On Tape: Officer Sucker Punches Inmate In Face, Files Report Claiming 'Self Defense'Insult Person On Twitter, Go To JailSWAT Team Brings TV Crew To Film Raid Against Threatening Internet Critic -- Raids Innocent Grandma InsteadCop Karate Chops NY Judge In The Throat
(more)

 
Top