All that said, you’re mostly right, but don’t kid
yourself about how limitless the possibilities are
for opting out.

All that said, you’re mostly right, but don’t kid
yourself about how limitless the possibilities are
for opting out.

I don’t think conspicuous consumption of the uber-wealthy is really the point. For that to be true there would have to be inter-”class” competition for status. Will, and others, as well as basic common sense has shown this not to be true: the guy making 100k doesn’t compete for status with Bill Gates, hence he doesn’t care what Bill “conspicuously consumes”. In addition I am not convinced that there are no positive externalities to the consumption habits of the wealthy, even ones that seem based on status seeking. Almost all art, music, design, and so on seem to have their origins in the need for wealthy people separate themselves from each other. A good case for this could also be made for a lot of tech innovations and “useless” scholarly research.

……

I really wonder how much Ezra and others really buy into this hooey. It seems, to me, a case of conformation bias. He already believes in a highly progressive tax schedule and would like to increase it, a new study/argument come along that supports his belief, so he defends it even though its obviously stupid. He is too smart for that.

It reminds me of extreme supply-siders who put an excessive amount of weight on the “increased revenues” part of the theory. Not only is this not provable (if anything its actually false) but its also the weakest reason to support tax cuts. It seems to me to be superfluous and defeating to defend such weak arguments. Just let them go.

Anyway, the main problem with governing the status seeking habits of individuals is that there is no end in sight. And it also seems to me that non-monetary status races are the most brutal. Winding up with the lesser house or car is pretty easy to get over, but coming in second when your chasing women or prestigious tenured position, well that just sucks. But, of course, that’s probably just my preference order.

I don’t think conspicuous consumption of the uber-wealthy is really the point. For that to be true there would have to be inter-”class” competition for status. Will, and others, as well as basic common sense has shown this not to be true: the guy making 100k doesn’t compete for status with Bill Gates, hence he doesn’t care what Bill “conspicuously consumes”. In addition I am not convinced that there are no positive externalities to the consumption habits of the wealthy, even ones that seem based on status seeking. Almost all art, music, design, and so on seem to have their origins in the need for wealthy people separate themselves from each other. A good case for this could also be made for a lot of tech innovations and “useless” scholarly research.

……

I really wonder how much Ezra and others really buy into this hooey. It seems, to me, a case of conformation bias. He already believes in a highly progressive tax schedule and would like to increase it, a new study/argument come along that supports his belief, so he defends it even though its obviously stupid. He is too smart for that.

It reminds me of extreme supply-siders who put an excessive amount of weight on the “increased revenues” part of the theory. Not only is this not provable (if anything its actually false) but its also the weakest reason to support tax cuts. It seems to me to be superfluous and defeating to defend such weak arguments. Just let them go.

Anyway, the main problem with governing the status seeking habits of individuals is that there is no end in sight. And it also seems to me that non-monetary status races are the most brutal. Winding up with the lesser house or car is pretty easy to get over, but coming in second when your chasing women or prestigious tenured position, well that just sucks. But, of course, that’s probably just my preference order.

Taxes on luxury consumption might potentially do good. The idea isn’t to flatten the wealth-based status hierarchy. Rather, such a tax would reduce the amount of money spent in the zero-sum game of consumptive status seeking, and spend it on something more useful, such as subsidies for healthcare, education, or science. This benefits society by encouraging people to become doctors, teachers, or scientists rather than handbag designers.

Or, that’s the idea, anyway. Using the tax code for social engineering can be a messy business. I’m also not sure whether it is even theoretically possible to do such a thing without providing disincentives for working and earning high incomes.

Taxes on luxury consumption might potentially do good. The idea isn’t to flatten the wealth-based status hierarchy. Rather, such a tax would reduce the amount of money spent in the zero-sum game of consumptive status seeking, and spend it on something more useful, such as subsidies for healthcare, education, or science. This benefits society by encouraging people to become doctors, teachers, or scientists rather than handbag designers.

Or, that’s the idea, anyway. Using the tax code for social engineering can be a messy business. I’m also not sure whether it is even theoretically possible to do such a thing without providing disincentives for working and earning high incomes.

…and when they worry about income as a marker of status, it’s because that connection has tangible impacts on their lives and livelihoods.

He’s saying money affects well-being, which we all agree with. Status is explicitly a third wheel in his argument.

You are right that we can choose our path in life. That path of course is constrained by what’s possible. I don’t have the “choice” of whether to flap my arms and fly to the moon. I also don’t have the “choice” of whether to buy 5 Hummers or 6 today. So the realm of possible choices is partly determined by our wealth, and partly by other things (our innate capabilities, our current surroundings, etc.).

I can’t buy 6 Hummers now, but I can buy them later if I go to grad school and learn finance, then get a job and make big money. OK, why can I go to grad school? Well, I can pay for it, I am smart enough, I have the right educational background. OK, why do I have the right educational background? I was able to pay for college, I had enough aptitude, got good enough grades, etc.

So of course many things factor into our choices, including how much money we have now (or had in the past). A person “A” who has a strictly smaller realm of choices than person “B” is in a strictly less-good position. Do you agree with that?

Policy-wise, we could practice income redistribution, which strictly shrinks the realms of options of rich people, and strictly expands the realms of options of poor people. Do you agree that that is one of the effects?

Taking 50K from a person earning a million dollars and giving 1K apiece to 50 poor people, will take away the the rich person’s option of doing something with the 50K, and give the poor people the option to do things with the 1K.

Now, the decision to redistribute or not depends on your criteria. Mine is, roughly, “maximize aggregate happiness.” You could also say “maximize aggregate freedom,” where I am explicitly defining “freedom” as “the ability to do things.” (If you could zap someone and make them smarter, you’d increase their freedom). If you disagree with the definition, just ignore the word “freedom.” (And yeah, research does suggest that “happiness” may not always increase with “choices.” I’m just ignoring that and saying choices are always good.)

I assume that, since poor people are in a more exigent situation (and thus have significantly smaller realms of possibility), expanding their realms of options has a greater effect on aggregate happiness than preserving rich people’s realms of options. Do you disagree?

And since aggregate happiness is roughly the goal, we should redistribute.

I know I didn’t mention status at all, but I don’t think Ezra is really talking about that anyway, like I said.

…and when they worry about income as a marker of status, it’s because that connection has tangible impacts on their lives and livelihoods.

He’s saying money affects well-being, which we all agree with. Status is explicitly a third wheel in his argument.

You are right that we can choose our path in life. That path of course is constrained by what’s possible. I don’t have the “choice” of whether to flap my arms and fly to the moon. I also don’t have the “choice” of whether to buy 5 Hummers or 6 today. So the realm of possible choices is partly determined by our wealth, and partly by other things (our innate capabilities, our current surroundings, etc.).

I can’t buy 6 Hummers now, but I can buy them later if I go to grad school and learn finance, then get a job and make big money. OK, why can I go to grad school? Well, I can pay for it, I am smart enough, I have the right educational background. OK, why do I have the right educational background? I was able to pay for college, I had enough aptitude, got good enough grades, etc.

So of course many things factor into our choices, including how much money we have now (or had in the past). A person “A” who has a strictly smaller realm of choices than person “B” is in a strictly less-good position. Do you agree with that?

Policy-wise, we could practice income redistribution, which strictly shrinks the realms of options of rich people, and strictly expands the realms of options of poor people. Do you agree that that is one of the effects?

Taking 50K from a person earning a million dollars and giving 1K apiece to 50 poor people, will take away the the rich person’s option of doing something with the 50K, and give the poor people the option to do things with the 1K.

Now, the decision to redistribute or not depends on your criteria. Mine is, roughly, “maximize aggregate happiness.” You could also say “maximize aggregate freedom,” where I am explicitly defining “freedom” as “the ability to do things.” (If you could zap someone and make them smarter, you’d increase their freedom). If you disagree with the definition, just ignore the word “freedom.” (And yeah, research does suggest that “happiness” may not always increase with “choices.” I’m just ignoring that and saying choices are always good.)

I assume that, since poor people are in a more exigent situation (and thus have significantly smaller realms of possibility), expanding their realms of options has a greater effect on aggregate happiness than preserving rich people’s realms of options. Do you disagree?

And since aggregate happiness is roughly the goal, we should redistribute.

I know I didn’t mention status at all, but I don’t think Ezra is really talking about that anyway, like I said.