Paul Krugman is at it again. In today’s New York Times, in his official capacity as a professional bleeding heart “liberal,” he once again revels in his role of flagellating the pursuit of happiness with the whip of human misery. Specifically, he denounces the prospect of the impending Senate vote to abolish the estate tax, on the grounds that the government’s loss of revenue “will cause 65,000 people, mainly children, to lose health insurance, and lead many people who retain insurance to skip needed medical care because they can’t afford increased co-payments.”True to form, Krugman makes no mention of the fact that in each case the money paid as estate taxes was rightfully the property of the bequestor, who earned it and who had a right to determine to whom his property would go: namely, to his chosen heirs and not to anyone selected by Krugman or government officials, in defiance of his wishes. With Krugman and his ilk, the rights of bequestors and of taxpayers in general count for nothing. They are overridden by the needs of others.
His message is the endlessly repeated one of “stop, don’t use your wealth for your own enjoyment (present or future), because others are suffering and need it more than you do.” His message is that everyone’s life is mortgaged to the needs of others and that no one can breathe free and live for his own happiness and pleasure so long as anyone else, anywhere on earth is suffering and in misery.
Here is a news flash for Mr. Krugman and all others who share his beliefs: The individual owns his life free and clear. His own happiness is full and sufficient justification for his actions, irrespective of the needs, misery, and suffering of others. He did not cause their suffering and his self-sacrifice would not cure it.
An individual may be a multimillionaire (nowadays, he probably needs to be a billionaire) and desire a yacht or personal jet. He values his yacht and/or jet more than feeding the possibly thousands or tens of thousands of starving people around the world for whom the price of his luxuries might buy food. His valuation is not arbitrary or capricious. It is based on the fact that his yacht or plane will make a greater actual contribution to his life and the lives of his loved ones than will the feeding of a mass of people with whom he has no personal connection and who make no actual contribution to his life or well being.
Ironically, Krugman and virtually all the other bleeding heart “liberals” behave in essentially the same way in their own lives as does the billionaire. They too value their luxuries above the necessities of strangers. If they did not, they would live as monks under vows of poverty, in small cells, sleeping on a straw mat, and subsisting on bread and water, so that they could provide for those needier than themselves to the greatest possible extent.
Krugman closes his column with the remark, “Congress has already declared that the budget deficit is serious enough to warrant depriving children of health care; how can it now say that it’s worth enlarging the deficit to give Paris Hilton a tax break?” The answer is that while Paris Hilton may not be one of the most inspiring representatives of humankind, the fact remains that like everyone else she too has the right to the pursuit of her own happiness. And neither Krugman nor anyone else is entitled to deprive her of anything that is rightfully hers because they believe that her wealth should be used differently than she would wish to use it. Paris Hilton deserves the tax break because the money is hers in the first place. Krugman’s Medicaid children do not deserve that money because it is not theirs and has been given them only by means of stealing it—i.e., taking it against the will of its owners at the point of a gun wielded by tax collectors.
Cutting Medicaid and all other government programs while reducing and eliminating taxes is precisely the policy that is needed to restore the founding principle of the United States, which is the individual’s right to the pursuit of his own happiness. This principle, not cutting the government’s budget deficit, is the primary. Implementing it means cutting government spending precisely for the purpose of cutting taxes. If there is a deficit, it means cutting government spending still more. It means cutting government spending for the very neediest to make possible the pursuit of happiness by the very wealthiest. If the pursuit of happiness is the principle, it means this above all, because only this will secure the principle.
The philosophy I have expressed above is most closely identified with Ayn Rand and her philosophy of Objectivism. And in truth, she is its most consistent advocate. Nevertheless, I would like to quote a passage from another advocate of the same philosophy, namely, Ludwig von Mises, which has the special virtue of pointing out the close connection between the ethics of egoism and the teachings of economics on the subject of the harmony of self-interests. It is the single passage in all of Mises’s writings that I value most highly and which served to make me a “Misesian” for life, when I first read it over fifty years ago. It summarizes the essence of Mises’s economic theories.
Nothing is gained when the teacher of morals constructs an absolute ethic without reference to the nature of man and his life. The declamations of philosophers cannot alter the fact that life strives to live itself out, that the living being seeks pleasure and avoids pain. All one’s scruples against acknowledging this as the basic law of human actions fall away as soon as the fundamental principle of social co-operation is recognized. That everyone lives and wishes to live primarily for himself does not disturb social life but promotes it, for the higher fulfillment of the individual’s life is possible only in and through society. This is the true meaning of the doctrine that egoism is the basic law of society.—Ludwig von Mises, Socialism An Economic and Sociological Analysis. New Haven: Yale University Press, 1951, p. 402.
Among the most important things that Mises showed is that the pursuit of self-interest is the foundation of the saving and investment and continuous innovation and improvement of products and methods of production that serves to raise the standard of living of all. In a country governed by the principle of the individual’s pursuit of his own happiness, the standard of living of the very poorest comes to surpass the standard of living of the very richest of a few generations back.
In such a country, great business fortunes are accumulated on the basis of the earning of a high rate of profit over a long period of time and the continuous saving and reinvestment of most of that profit. To earn the high rate of profit, repeated innovations are required, as competition serves to eliminate the premium profits on earlier innovations. In their origin and disposition, the great fortunes serve to increase the supply of products and reduce their prices, while raising the demand for labor and its wages, this last being one of the effects of the greater accumulation of capital.
In his ignorance, it is precisely such fortunes that Krugman is out to undermine through his advocacy of the continuation of the estate tax. He thinks the estate tax has no negative consequences for the average person because it “is overwhelmingly a tax on the very, very wealthy; only about one estate in 200,” he says, “pays any tax at all.”
If the estates consisted of mere heaps of personal consumers’ goods, in the manner, say, of the jewels of an Indian maharajah, Krugman might have a point. He has no point when the estates consist of the means of production that serve the general buying public in providing it with goods and services and that underlie most of the demand for labor in the economic system. Estate taxes are at the expense of the supply of consumers’ goods for all and at the expense of the demand for the labor of all. They are urged in opposition to the general standard of living and the well being of all.
Krugman and the other advocates of looting and plundering the wealth of the rich for the alleged sake of the poor contemptuously dismiss these absolutely correct economic doctrines pertaining to the role of innovation and saving as “the trickle-down theory.” In doing so, they serve only to perpetuate the poverty of which they pretend to complain.
Krugman and his ilk actually care nothing whatever for the welfare of the poor. For them the suffering of the poor is merely a weapon with which to beat down the aspirations and success of the rich, which alone can elevate the poor.
This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site www.capitalism.net is included. (Email notification is requested.)All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.
{ 15 comments }
I am waiting for Warren Buffett to announce his conflict of interest since he continues to advocate for an estate tax while he profits by buying out family business’s unable to pay this onerous tax. Not to mention his insurance company that also profits from this oppressive taxation.
Dear Prof. Reisman:
In your June 2 post, “The Sorry State of Our Union”, in which you concluded that “government today [is] a train wreck, a thousand train wrecks, just waiting to happen. Comparisons to train wrecks hardly do justice to what’s at stake. It’s the wreckage of our country that is waiting to happen, and has been happening. And it’s been happening and will continue to happen for the very simple reason that the government of the United States is out of control in the most literal sense.”
I noted my complete agreement, except that I commented that this train wreck, which is already occurring, is more akin to a massive train robbery, with Republicans in both houses of Congress and the White House conducting the hold up:
“This started with voter fraud in the 2000 elections, was evidenced in the early days of the administration with all of its closed door meetings with the energy industry friends that bankrolled it, and accelerated with 9/11.
There truly is an orgy of rent-seeking underway, and the sheer volume of legislation and regulation make it impossible for legislators literally to know what is going on. That lack of information, and the fact that Republicans are in control over both Houses, makes the abuse of legislation even more inevitable.
The situation is compounded by the fact that we have a Republican administration, so Congressmen are not serious about checking flagrant abuses of power by the President, and the President is not serious about keeping Congressional spending in check. The fact that Democrats have been hobbled by gerrymandering – on which the courts have yet to impose any meaningful restrictions – means that there is no effective partisan check on irresponsible exercises of legislative and executive power.
Rent-seekers, mainly large corporations, are having a field day at the expense of the Treasury and future taxpayers.”
Allow me to express my puzzlement at this screed against Krugman, which at first blush seems akin to one of the passengers on the train, while in the midst of the robbery, raising an alarm about an old Indian on a crippled pony off in the distance outside who is aiming his bow at the train. The whole country is being robbed and fleeced by Republicans, who have both Houses of Congress and the Presidency, and you are complaining about DEMOCRATS???
This reminds me of a comment that someone else recently made on another post (David K. Meller on Crunchy Conned): “Defence of the free market and its institutional underpinnings is extremely important, and we should never pass up opportunties to defend it, but we must also make SURE that we are indeed defending the free market, private property, and the primacy of contract, not an oppressive and corrupt status quo.”
Surely you are not a defender of the Republican party or its ongoing role in the Great Train Robbery? Here’s hope that you will raise your voice against the villains who matter most – not those enfeebled and out of power.
I take the liberty of quoting from John Baden, who is fonder of PERC, Chairman of FREE and a member of the Mont Pèlerin Society (founded by F.A. Hayek):
It’s curious to contrast your defense of the elimination of the estate tax with your silence on the ruinous, plundering policies of the Republicans. Could it be a partial explanation to note that the Great Train Robbers and the principal beneficiaries of the elimination of the estate tax are one and the same (or share a great commonality of interest)?
Regards,
Tom
Apologies to all for the lenght of the comment. Please note that blockqoute did not work propoerly – the quote of John Baden ends with “sordid” in the penultimate paragraph. Here is a link to his opinion piece: Republican Party Reptiles
TT,
You keep going on and on about how the ‘poor’ Democrats are “enfeebled and ‘out of power’”, thus giving them pass for their, many, sins.
The (D)’s are willing participants in the looting that you lay, solely, at the feet of the (R)’s.
Tell me that they, the (D)’s, have made Any attempt to derail the “Great Train Robbery” to which you, properly, allude (?)
You, in your wholesale diatribe against the (R)’s, sketch the false illusion that the other side, of the Same Coin, represents a true and viable alternative.
Reisman is right, again, in laying bare the duplicitous ethos at the heart of the Left/Socialist/Statist side that seeks to entrain us by the “needs” of “others”.
Are the Right/Fascist/Statists any better?
It doesn’t matter: Our choice is not binary. There are other coins, maybe long uncirculated, or still, circulating in bits, though, from which we can nominate a different denominator.
That the current State, (R)&(D), keeps, literally, the Declaration of Independence in an airless sarcophagus is, both, a poetic irony too rich for words, and a message to be heeded.
TT, that you expend copious energy, contra to your environmental roots, defending a Party, (D), also contra to your environmental roots, leaves you in the position of furthering the Hobson’s choice that is the current majority of Today’s political discussion.
TT, You’re a good dude. Do better. Do different.
I took several classes in estate planning. Financial planners, lawyers and those heavily invested in certain financial firms have a vested interest in estate plunder. Further, many estate planning vehicles are designed to allow bureaucrats a say in how that capital is used. Krugman is, as usual, spraying moral perfume on an immoral system. I don’t know if this is just an attempt to assuage his own guilt or blind his readers to it.
MEH:
Don’t misunderstand me; I come from the Republicans and am not defending the Dems. It’s just that with divided government slipping away (in the absence of having aniother party in control of either house or the presidency) and Congress turning solely to looting the Treasury for corporate benefactors and to maintain partisan advantage, I grow tired of irrelevant attacks on Dems.
Reisman knows perfectly well that it is the very wealthy and big corporations and their Republican lackeys who are conducting the Great Train Robbery. That the Dems might not be much better is a fair point (but at least they were kept partially in check by Reps), but that doesn’t excuse us from failing to aim at the right target.
Likewise, I am tired of the FEAR OF campaign that the Republicans continue to use to camoflage the continuing Robbery and the lack of any positive agenda for wealth: fear of Islamofascists, fear of gays, fear of enviros, fear of back-stabbers, fear of labor unions, you name it.
And just wear does good ol’ Dr. Reisman stand in the midst of all this? He has excellent points, but he gives aid and comfort to the Robbers currently bleeding us dry by directing his pot shots away from them.
If we want to stanche the bleeding, we need to pay attention to who is actually causing it and to hold them responsible, thus hopefully improving the situation by restoring divided government.
Or are do you think that a Jeffersonian solution of a popular rebellion is really the best approach, and take a Straussian view that we should encourage the fleecing until Americans decide to rise up against it?
Regards,
Tom
TT,
You may appreciate this book:
http://www.amazon.com/gp/product/0195157028/ref=pd_sim_b_4/102-1893771-2922529?%5Fencoding=UTF8&v=glance&n=283155
The history of fear-mongering in Politics is a long and classic epic.
To remind you, we enjoyed it during the Clinton-era as well, and, obviously, previously.
Your posit, that “a divided government” will put the usage of Fear to bed, is, kindly, a fairy tale.
That the American polity, writ large, even understood that Jefferson inveighed: “the Tree of Liberty is nourished by the Blood of Tyrants.”– would be a great yanking upward of the drowning body that is being devoured by the profesional parasites of the Potomac.
Strauss, in my view, is, yet, another one of them( PP of the P ).
edit for clarification, of above.
from: “would be a great yanking upward of the drowning body that is being devoured by the profesional parasites of the Potomac.”
to: “would be a great yanking upward of that drowning body(Politic) being devoured by the professional parasites of the Potomac.”
This: “Shadia Drury of the University of Regina, author of 1999′s Leo Strauss and the American Right, says “Perpetual deception of the citizens by those in power is critical (in Strauss’s view) because they need to be led, and they need strong rulers to tell them what’s good for them.”
from Wikipedia, in regard to Strauss’ viewpoint, should be telling.
Every time Professor Reisman posts an article on a topic along comes Tokyo Tom to criticise and denigrate. It does not matter what subject the Professor writes about, TT turns up to attack. Every time.
TT’s contributions to this blog appear to be motivated by a dislike of the Professor. One suspects the intellectual thrashing he received a few months back left his ego bruised and resentment simmering. TT was wrong then just as he is wrong now. No surprise really as collectivists such as TT have nothing of value to provide.
In the meantime should people including the likes of TT be serious about finding out about Professor Reisman’s position I recommend they get a copy of his work, “Capitalism” and read it. It’s all explicitly laid out there.
The interesting thing is that I doubt TT could stand to see his beloved collectivism (including enviro-collectivism nonsense) analysed and completely refuted. So he’ll evade that challenge for sure.
Talofa!
Sione
MEH: Thanks for the reference to what sounds like an interesting book. But it seems puzzling that, as noted in the first review, the author makes the glaring omission, despite claiming that the book was partially inspired by 9/11 and subsequent events, of “the current conservative administration’s use of fear, especially of terrorist attacks, to drum up support not just for war but their own policies and political plans.”
I agree with you that Americans largely seem unaware of how we are being manipulated, and share your view of Strauss. However, your comment is long on perspective but light on recommendations.
I certainly don’t think that divided government with put the use of fear to bed; rather, I just recognize that if only one set of pigs have a lock on power, the draining of the American treasury by rent-seekers is that much more efficient and unhindered. We need to have Dems back in control of at least one house merely so we have some meaningful checks and blanaces. If the pigs are fighting amongtst each other, they can’t spend as much time eating.
That’s just a basic first step. We should also be working to reduced the size of government, and hence the level of mischief that it and rent-seekers can do.
Regards,
Tom
Sione:
Is there an argument you wish to make, or one of mine that you wish criticize, along with the aspersions, strawmen and ad hominens? If not, why bother?
Yes, you’ve noticed that I dislike what I consider imbalanced arguments about environmentalism generally here at Mises (certainly not Prof. Reisman in particular), and yes, when I think I have something to add to a post by Prof. Reisman – usually on an issue of balance – I feel free to make the observation. Perhaps these comments seem unbalanced, but I do not see that I can provide much of any value to any readers simply by praising that with which I agree. But it is demonstrably false that I attack Prof. Reisman every time he posts, and further it is incorrect to label all of my comments as attacks. Did you actually read my comments on Prof. Reisman’s June 2 post, “The Sorry State of Our Union”?
When I do attack Prof. Reisman, it is a disagreement with his arguments or meta-positins, and is entirely fair. I admire that you care to respond for Prof. Reisman when he does not deign to, but it is curious indeed that you, like him, decline to address the arguments I make. I might be too dense to follow what you have to say, but no doubt others would be pleased by the spectacle and find it somewhat more satisfying than your indirect, third person criticism of that slippery, evasive “enviro-collectivist” known as TokyoTom. As for now, isn’t it rather clear who’s being evasive?
Care to spare the psychobabble about my bruised ego, and actually address comments with which you disagree? Let’s have more of that intellectual thrashing!
Respectfully,
Tom
P.S. Thanks for the reference to Prof. Reisman’s book, “Capitalism”. Of course readers should not overlook the wealth of resources that Prof. Reisman has generoulsy made available without charge here on Mises: http://mises.org/literature.aspx?action=author&Id=143
TT, Reisman didn’t say anything remotely partisan. Search this page for repubican or democrat, and you’ll only find your own post.
Talk about strawmen :-\
As for beliving that electing democrats will create a check of some sort–what are you smoking?! A check as to what direction the ever-encroaching state will take? All we know for sure is they will raise taxes, yay.
anarkhos, thanks for your comment, although I would encourage you to do a little closer reading. Prof. Reisman’s post is a stirring denuciation of Krugman “as a professional bleeding heart ‘liberal’” and his “ilk” (which means other yucky people Reisman doesn’t like). Do you really need me to demonstrate for you that by “bleeding heart ‘liberals’” Prof. Reisman meant to refer to Democrats?
You’re absolutely right that Prof. Reisman did not specifically refer to either Democrats or Republicans, but given his harping on bleeding heart liberals and his conspicuous absence of any criticism of the right (especially given his other recent post about how Congress is out of control, which also fails to refer to Republican rsponsibility), I think it entirely appropriate to raise the question.
This is like the curious Sherlock Holmes case of the dog that didn’t bark. Prof. Reisman sees that “the government of the United States is out of control in the most literal sense. It is out of the control of the American people and their elected representatives. That control must be reestablished.” But he fails to even mention, while saying that our government is out of control, that actually both houses of Congress and the Administration ARE in control – in control of the Republicans. I find this indeed rather curious, and think it is perfectly appropriate to ask Prof. Reisman for clarification.
As for checks and balances, maybe you should go read Madison and Jay in The Federalist. One extremely important reason why the government is out of control is because the blance usually provided by competition between the two parties, and the Presidency and the Congress, has been largely eliminated or dampened. Having the Dems in power in one house would have put a significant damper in all of the pork, and would also have served to check rising Presidential power.
As for taxes, if there is once again a Dem president or house, would you consider them more responsible or less responsible if they carried through on an oath not to raise taxes, but simply roll-over all shortfalls and accumulated debt to the next administration, as this one has done?
Rgeards,
Tom
TT,
Try this one, as an example of what awaits for the American Polity: “At a recent gathering for Democrats, Congressman Jim Moran
promised to bring home more bacon if the Democrats re-capture the House and he gets re-elected. And he isn’t shy about admitting it. Here’s what Moran said according to a report in the Arlington Sun-Gazette:
“When I become chairman [of a House appropriations subcommittee], I’m going to earmark the s—t out of it,” Moran buoyantly told a crowd of 450 attending the event.”
Arlington, as in Virginia, just outside of D.C.
MEH: Yeh, I saw that. Did I say I like Democrats or big government? I know that pork barrel has always been with us, and it is fair to point a finger at Dems as well. But let’s not forget which party is robbing us blind right now and selling out its expressed principles to special interest, at the cost of future generations. We need to pare back government, pork barrel and the influence of corporate interests; for that we need to have another party in control of part of the Congress or in the WH. With the parties fighting over pork, there will likely be less of it, and corporations will have less assurance that their bribes will actually produce results.
Regards,
Tom
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