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I think the problem with that argument is that the reasons an individual might be good allocating their own capital are distinct from the reasons they have capital, or what is justified, in the sense of ethical or societally defensible. A successful white-collar criminal can be said to be good at capital allocation, to make an extreme example. My argument is not that wealth means someone is criminal (although I do think criminality has as a goal wealth rather than poverty, which is the inverse but relevant). However I do think there are lots of hidden costs that people advertently or inadvertently manage to get out of paying for, and taxes are meant to recognize that fact. The bailouts of the great recession are good examples of this to me in some sense. The government saved certain businesses, or ameliorated their crash. Whether or not this was the right decision is one thing, but given that they did get bailouts (or outs), suggests that what we should expect is taxes and regulation to support these kinds of things. There are lots of other things like this that conveniently get glossed over, like hidden environmental costs, education and infrastructure, research, etc. I find it incredibly manipulative, for example, for arguments to be made against net neutrality on the grounds that telecom companies somehow bootstrapped their way up from nothing, when the internet itself was a government invention, and much of their infrastructure is made possible by public right-of-way laws or other privileges given by municipalities. I think the fundamental problem with US society today is an extreme form of survivorship or fundamental attribution bias, where we grossly overattribute success to individual characteristics and not other factors. Then we get locked into these strawman debates that pit extreme capitalism against communism, as if there's no moderated grey area, that our only choices are complete equality of wages etc. or winner-takes all gross inequality. What I increasingly see in the US are the haves and the have nots, and I no longer believe that the haves, by in the large, deserve what they have in a way that the have nots do not. Income inequality, to me, is bad not just because of the disparity itself, but because it tends to exaggerate market errors in valuation. We tend to have these conversations and HN and elsewhere where we look at these examples of downward mobility and point to everything someone did wrong, but then do not turn to management, administration, business, etc. and ask "did they really do everything right"? We also tend to act as if, if they really made an error, that is really worth the downward mobility they accrued. |