[FoRK] Obama: Redistributionist, pro-capitalist, or both?

Russell Turpin russell.turpin at gmail.com
Tue Aug 26 16:05:05 PDT 2008


I'm surprised Jeff didn't post this:

http://www.nytimes.com/2008/08/24/magazine/24Obamanomics-t.html

Where Obama opines, "The market is the best mechanism ever invented
for efficiently allocating resources to maximize production. And I
also think that there is a connection between the freedom of the
marketplace and freedom more generally."

Of course, Obama also waxes in favor of increasing tax rates on the
rich while lowering them for the rest of the population. There is
the argument that if marginal rates on the upper few percent of
income earners went up to the same level as in the 90s, that would
so warp incentive as to bring about an economic catastrophe.

I suspect, though, that most of the real antagonism at that notion
isn't concern with its macroeconomic consequences, or even selfish
concern some might have from paying a little more on income over
$250K, but a deep philosophic opposition to the notion that the tax
code should be used to such purpose. There are, in short, three
notions about capitalism floating around this debate:

1) Capitalism efficiently allocates resources to maximize production.
And not just arbitrary production, but of the sort that consumers
want, and in a way that accelerates technical progress. Of necessity,
this requires demand to operate in labor markets, and entrepreneurial
activity to be rewarded by its success in supplying consumer demand.

2) Capitalism and political freedom are intertwined.

3) Capitalism defines the "right" outcome for individual incomes and
material wellbeing. As much as possible, government policies should
leave this result alone, not just as a practical matter of preserving
the necessary incentives of capitalism, but as a moral or political
principle. In short, it is wrong and offensive that the government
would tax Warren Buffet at a much higher rate than Joe Blow.

Obama assents to the first two, and dissents on the third. That said,
I wish he would spend more effort emphasizing the first two, and
avoid utter silliness like proposing windfall profits tax on oil
companies. Which is not selfishly said, just because I have investments
in such. ;-)


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