Sunday, September 16, 2012

I am Not Equal to Lebron James

Learn Liberty has a contest to do a video response to the following video regarding equality.

Here is my response, following up on the theme that we ordinary people are not equal to millionaire celebrities. My point is that this inequality goes all the way down to the genetic level. Lebron James is making millions more than I will ever make not because he is particularly hard working, but because he was born with a particular set of genetic traits that marked him even from childhood as an ideal basketball player.

Milton Friedman made a similar argument years ago about genetic ability. His point was that there are no clear lines between people born into wealthy families, leading lives of luxury that most people can only dream of, and people born with certain talents, like being able to play the violin, that others will never be able to do.

It is interesting to note that Adam Smith took it as a given that people were fundamentally equal in talent even in intelligence. Thus, if we were to remove aristocratic privileges, we would soon find a society where everyone was about equal in their economic circumstances. The only exception would be lottery winners; literal lottery winners as well as people who succeeded through equal dumb luck in business ventures or in becoming lawyers. The law of averages being what they are, even these distinctions would not hold for long. Smith lived before the industrial revolution and the new economic inequalities it created. He also lived before our celebrity culture, which pays millions to athletes and actors mainly for genetically based abilities. Finally Smith did not live in a world in which high IQ individuals could make millions creating companies like Microsoft, Apple and Facebook.


jblumenkopf said...

We only need to reward genetic excellence in order to encourage people to use their genetic talents. We can safely tax estates without discouraging work because people in general care more about themselves than their children. On an unrelated note, do you not believe in public goods? If you do, then you should realize that charity is one of them, because most people gain (in mental wellbeing) when Warren Buffet is taxed to stop someone from starving, so it is no different from military protection (in reasonable amounts), where most people gain from other's taxes being used to protect everyone.

jblumenkopf said...

The reason why we need to pay people for inherited abilities is to encourage them to use those abilities. People care less about their offspring, so we can safely implement estate taxes. On an unrelated note, do you believe in the concept of public goods, such as defense? If so, then why is charity not a public good, as everyone benefits when the rich are taxed to save someone from starving?

Izgad said...

I do assume that people care about their children and that one of the reasons why they might work hard is so that they can make things better for their children. While this creates a radically unequal system in which some people start in a far better off position, I take it as a better solution than people retiring early or simply buying over the top luxuries for themselves. Most important of all, people have a right to their money that they honestly earn and it is immoral of us to take that money even if we believe that we would make better use of that money.

Izgad said...

I recognize the existence of physical negative externalities as something relevant to law, specifically pollution. The ideal solution would be to privatize all land and strictly enforce property rights. No one is allowed to initiate physical harm against anyone else’s property without their consent. This includes sending over a single molecule of pollution into someone else’s air. In our present government system the best option is for government to enforce some basic environmental regulations. I do not recognize the existence of any public good, in the sense of something that benefits the public, but could not be provided by the free market. I assume even the military could be run as a private company. If conservatives in America or around the world believe that Iran is a threat they could raise the necessary billions of dollars to pay a private company (presumably decommissioned soldiers armed with the decommissioned weapons of the former government army) to invade or nuke Iran. Free riders can be dealt with in much the same manner as people who avoid paying shul memberships. The company can publicize the names of people who refused to pay for the attack on Iran and, to the extent that the attack was popularly supported, those people would lose out socially.