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Guardian reports that state planning makes things worse…

State planning makes things worse? Is this the Guardian I am reading? That bastion of people who worship state action? I can only assume the Rapture is at hand!

Well, no, not really.

43 comments to Guardian reports that state planning makes things worse…

  • Regional

    Some recalcitrant back sliding recidivist trouble maker needs re-education at the Guardian and then taken out and executed for heresy.

  • RAB

    Hmmm. I own just the one house. It has no mortgage on it, I own it outright. It is in a very good neighbourhood and I have no idea what it’s worth, but probably around £400,000, given what houses round here seem to be going for. I have looked and looked in all the nooks and crannies, the cupboard under the stairs even, but can’t seem to find the ATM machine that keeps pumping out money to me as the housing market rises. I have found a slot in one wall though that has this message above it… Keep putting money in here or I will fall down round your ears.

    How the flying fuck am I better off if the market rises? I LIVE here. I like my house, that’s why I chose it. Yes if I wish to sell it and downsize then that will give me a bit extra cash on the sale, but I still have to buy another house don’t I? so the difference will be marginal.

  • Fraser Orr

    Evidently you misunderstood. It is not that government planning failed so much that it obviously wasn’t run by the right people. The problem here is that the planning was all wrong, with too many golf playing toffs taking the rightful land from hard working Guardian readers.

    So it always is with the regular failure of government policy — it isn’t a fundamental problem with government trying to control the vast complexity of the economy with a few Headline oriented levers. It is that the wrong people are doing it.

    Communism didn’t fail in Russia — it is just that they didn’t do it right.

  • Jerry

    RAB
    ‘Hmmm. I own just the one house. It has no mortgage on it, I own it outright.’
    Um, unless thing are radically different where you are, not really ( and if things are different, I REALLY want to know where !! ). Stop paying property taxes and find out who REALLY owns your home. You paid for it and are now simply renting from the gov’t for as long as you are there – I’m in the same situation. School taxes are the largest piece of my tax bill and it is a very sore point. I have no children in the school I am forced to ‘support’ to the tune of THOUSANDS per year !!!!

    When cornered about the consistent failures of Communism, Socialism, et al

    ‘It is that the wrong people are doing it.
    Communism didn’t fail in Russia — it is just that they didn’t do it right.’

    Some variation of this is ALWAYS the the ‘excuse’ !!!!

  • Mr Ed

    Communism didn’t fail in Russia — it is just that they didn’t do it right.

    Yes, the famines in the Ukraine and Kazhakstan (yes there were other famines, but why should we care?) were caused by a sabotage plot by counter-revolutionaries. There wasn’t enough fertiliser for the crops (bonemeal) as the cannibals had eaten too many of the corpses (and killed too many of the living so that they might eat them), and the cannnibals did not die. This led to (i) a lack of fertilizer, which led to crop shortages and (ii) more mouths to feed, and so more famine.

    If only Trotsky had been in charge, there would have been none of this nonsense.

  • RAB

    Yes Jerry, Death and Taxes… No way out of either I’m afraid.

  • Alastair James

    No mortgage! You’re not fulfilling your social duty to maintain aggregate demand. The government hasn’t gone to all this trouble to lower interest rates to record levels for hoarders like you not to maximise your mortgage equity withdrawal. Your equity obviously needs to be subject to a wealth tax.

  • Paul Marks

    RAB you sound like a sane man.

    What are you doing in this insane period of history?

    A person who buys a house to LIVE IN?

    And someone who does not make DEBT a way of life?

    No, sorry Sir, but you do not fit with the modern world.

  • RAB

    What are you doing in this insane period of history?

    Ah dunno Paul. Just sat on the pawch whittlin, tuning ma banjo and spitting baccy juice on ‘ol bonkers dog head. Don’t owe a living thing a dime, never got into debt, pay off all my credit cards at the end of the month, and have a credit rating of absolutely zero. Consequently nobody, if I needed it, would lend me a dime.

    The more you owe, the more you shall be lent. How insane and quasi Biblical is that!?

  • Fred the Fourth

    RAB: re: selling and buying a similar house.
    Here in sunny California I was recently made painfully aware that the longer one lives in a house, the less possible it is to move to an equivalent house down the road. Taxes on my “excess capital gains” from living here so long very nearly forced me to move out of state, instead of the next county. (Cue chorus of reasonable people: You fool! Can’t you take a hint? Get the hell out of CA before you have nothing left at all!)

  • Richard Thomas

    Fred, absolutely. I do like it here in Tennessee. Even the allergies haven’t been too bad so far this year. Might be the honey.

  • Lee Moore

    I disagree with RAB. He’s richer as a result of the increase in his house’s value, because he could sell it, go and live somewhere cheaper, and hire dancing girls with the difference. There are plenty of reasons why he might prefer to stay put, but if he does, the reason he doesn’t feel richer as a result of the value of his house going up, is that his housing costs have gone up at the same rate as his housing wealth. In other words he is hedged, in his current lifestyle. Anyone who has been renting for the last thirty years, who now wants to move in next door to RAB will be under no illusion that housing costs have rocketed over that time.

    This is why it is utterly misleading for the government to exclude house prices from its inflation figures. The fact that home owners don’t notice house prices rises if they stay put doesn’t mean housing costs are constant. They’ve been going up. Lots.

  • David Moore

    It’s clearly the result of the capitalist running dogs hijacking the state to protect there own interests.

  • I disagree with RAB. He’s richer as a result of the increase in his house’s value

    No he isn’t. Unless he realises that hypothetical value by selling it because he wants to sell it, he is not actually ‘richer’, particularly if *he* values living in his house more than the fiat money value of that house if he is forced to sell it and move somewhere else. Indeed he would have suffered a net loss of value in that case regardless of what the crude numbers imply.

  • Lee Moore

    Of course he’s not richer in the sense of his consumption of real goods and services being higher than it was previously – because he chooses to use his increase in exchange value wealth to consume goods that the market now prices more highly than before. In the same way if i get a pay rise of £20,000 pa and I find that my chosen basket of consumables has gone up in price by £20,000 pa then I’m no richer in real consumption either. (Note that this could happen without there being any inflation or wicked fiat money, it could just be that my chosen basket of consumables has gone up in price while everything else has gone down.)

    But in the sense of the exchange value of RAB’s assets having gone up (and the exchange value of my pay having gone up) we’re both richer. We’re only not more lavish in our consumption because our tastes in consumables are pricier relative to other goods than they used to be.

    Yesterday RAB could have moved to Scunthorpe and hired three dancing girls. Today he could move to Scunthorpe and hire twenty dancing girls. If he chooses to stay where he is and eschew dancing girls that is of course his affair. But he is undoubtedly richer in the exchange value of his assets. Whether you’re counting in fiat money, gold or tulips.

  • RAB

    I went to Scunthorpe once, but not twice, a whole brigade of dancing girls would be no compensation. Lee seems to think that my house just sits here on top of the hill accumilating cash at a rate of knots. It doesn’t maintain itself you know, I don’t have a fairy godmother to wave a wand and fix the roof or the damp. The whole of our district is now festooned with scaffolding as the deluge last winter has exposed all the major flaws of houses built in the 1880’s. I have spent the best part of 20 grand in upkeep in the last 2 years and we are no where near finished yet. The money has to come from somewhere so it is mainly our savings, and the rate of interest we are currently getting on those savings is sweet fuck all.

    But I repeat, I like where I live, the ambiance and esthetics of it are why I am prepared to put up with the cost. But if anyone thinks I am just sat here getting richer, then they are sadly mistaken.

  • Mr Ed

    he is undoubtedly richer in the exchange value of his assets

    The ‘exchange value’ of his assets is a meaningless concept in respect of RAB’s situation. No one is offering and no one is buying anything, a value on his house is a mere notion, without any grounding in reality, as if he does not wish to sell at any price, there is no economic exchange possible. He might no more wish to sell his house than his eyesight. He does not have to be a tenth generation landowner clinging on to the ancestral pile not to wish to sell.

    And even if his house is worth more in the event of a sale, he is poorer in terms of utility if he sells, even if he moved to the Ducal Palace in Venice as the new Doge of a renascent Republic as the consideration, if that is not what he wants.

  • Lee Moore

    No, the exchange value of RAB’s assets has a very clear objective meaning – the stuff he could get in exchange for his assets, if he chose to exchange. He’s perfectly welcome to hang on to his existing assets because his subjective valuation of them exceeds the subjective value he puts on the assets he could get in exchange. And it seems that’s what he wants to do, turning down brigades of Scunthorpe dancing girls along the way.

    Say RAB sets a subjective value of 100 utils on his current assets including his house, and his subjective valuation of the assets into which he can exchange has risen from, say, 55 utils to 85 utils. Still not enough to tempt him to move, but up nevertheless. But next door, his neighbour’s subjective valuations may be 92 utils, 66 utils and 141 utils respectively. Enough to persuade him to move. Does it really make sense to say that RAB is no richer than he was before, but his neighbour, with identical assets is richer than before ?

    When we talk of people being richer or poorer it makes little sense to argue on the basis of subjective valuations since, being subjective, only the subject can compare them. If we want to have a discussion involving more than one person, we re limited to using objective valuations, ie exchange values.

  • Mr Ed

    Lee,

    It is economic error of the highest order to say, e.g. RAB’s house is worth three Bentleys. Furthermore, a house is not a fungible asset in any sense of the word. There cannot be an ‘objective meaning’ to ‘if he chooses to exchange’ as it depends on what he chooses. You are seeking to give an objective valuation to a particular thing. Even on your own terms, the ‘objective meaning’ is conditional on a subjective view of RAB. Your argument is based on a mechanistic view of economics rather than consideration of the actions of economic actors and their choices, with all the variations in human behaviour that come with that.

    RAB’s house is outside the scope of economics if it is not up for sale. That is not to say that, as asset prices have risen, RAB Is in a good position to sell his house for more than it would have got, say, 10 years ago, but that is a rough-and-ready application of an aggregate to a particular situation. He might have a sinkhole in his street, were that calamity to occur, his house would then be worthless.

    A more clear-cut example, Is the Queen, as the ‘owner’ of Buckingham Palace, richer if property prices rise? How would she sell Buckingham Palace and where would she go (Clarence House being obvious, but she would not wish to do so). Buckingham Palace is hers, and in all likelihood, hers to sell, but she would not sell it at any price, I venture, so to talk of the value of Buckingham Palace increasing is meaningless.

  • If he chooses to stay where he is and eschew dancing girls that is of course his affair. But he is undoubtedly richer in the exchange value of his assets. Whether you’re counting in fiat money, gold or tulips.

    That completely misunderstands the meaning of the word ‘value’. If, for example, he is compelled by some new tax or simply by a compulsory purchase order, to sell his property and trouser the money, even if it is a ‘fair market value’ (whatever that means) if he cannot purchase something he values equally or more than the house he was forced to sell, with all the highly subjective and often emotional personal value judgements that implies, in no meaningful way is he better off. He had suffered a net loss in value. He has more money, which is the stuff used to keep the crude score for the convenience of third parties, but is he really ‘richer’?

    No. He just has more money, which he was not actually asking for.

  • Lee Moore

    M Ed : “It is economic error of the highest order to say, e.g. RAB’s house is worth three Bentleys.”

    Perhaps so. But that isn’t what I’m saying. I’m saying that RAB’s house can be exchanged for three Bentleys. The subjective value he puts on (a) the house and (b) the three Bentleys is of course his own affair. (We haven’t of course heard his views on Bentley valuation, though we have heard his shockingly dismissive views on Scunthorpe dancing girls.) Moreover, in most cases – though Bentleys with their maintenance and insurance costs may be an exception – almost everybody’s subjective valuation of five Xs exceeds their subjective valuation of 3 Xs. It’s certainly true of pound notes, dollar bills, ounces of gold, acres of Kensington real estate, and shares in Google.
    So if the number of pound notes, or shares in Google, into which RAB could, if he chose, exchange his house goes up then it is very very likely that his subjective view of the exchange value of his house has gone up too.

    Which brings us neatly to the meaningfulness or meaninglessness of the expression “if he chose.”

    ” Furthermore, a house is not a fungible asset in any sense of the word. There cannot be an ‘objective meaning’ to ‘if he chooses to exchange’ as it depends on what he chooses. ”

    This implies that we never compare the subjective values of our assets, and the assets into which we could exchange them, and conclude – nah, I’ll hang onto my stuff. If the question of the exchange value of our assets does not present itself to our mind until we have already chosen to exchange, it would seem that we never employ our consciousness to weigh up these questions. The decision is really made unconsciously. The alternative theory is that our minds, already attuned to “what if” questions of the form “what if i stepped closer to the edge of that cliff ?” and “what if I were to ask Julie for a dance ?’ are well able to turn themselves to questions of the form “what if i were to exchange my house for three Bentleys ? Would I be more cheerful or less cheerful ?” RAB already thinks he knows the answer concerning his move to Scunthorpe (with dancing girls.) Is he deluding himself ? Is the answer unknowable until his unconscious mind suddenly reveals to his conscious, and probably traumatised, mind, that the time has come to move to Scunthorpe ?

  • Richard Thomas

    There are two aspects. First, if RAB wants to move up (as most people do), he will end up paying more. Even if he only wants to move sideways (fairly common), he will end up paying more for the privilege of doing so as many of the costs are typically as a percentage of the selling price.

    Secondly, taxes are typically proportional to house value so higher house value = higher taxes. If we are still in a bubble (which I believe we are), the house price may yet slump again and total taxes paid over the period of time would be higher than if the price had held at a lower, steady level.

    One other aspect which might be worth considering is if it were not his primary residence, there would be capital gains due.

  • Richard Thomas

    Lee, house prices tend (but not as an absolute rule) to rise across the board. Thus price rises only tend to benefit either those who are moving down (rare) or those who find themselves with an excess count of homes (typically those who inherit your goods when you pass on).

  • Mr Ed

    Lee, when it comes to exchange, we may compare the subjective valuation of assets in our own heads, but it is for RAB and RAB alone may decide if his house is worth exchanging for 3 Bentleys, and likewise for the owner(s) of the Bentleys to decide if they have the co-incidence of wants to wish to swap them for RAB’s house. But the question of whether RABs house is worth X really means “Would RAB prefer to trade his house if he got 3 Bentleys in return” as by so doing he would show that he valued the 3 Bentleys more than his house (and vice versa for the cars’ owner(s)) when agreeing to the exchange.

    This situation may or may not occur at some point in RAB’s life and it is not for anyone else to second-guess his preferences.

    I have been to Scunthorpe twice, I would not wish to go there again unless contractually obliged. For our overseas readers, it is an ‘industrial’ town in North East Lincolnshire, which, architecturally, cries out to Heaven for Lincolnshire’s Bomber Command heritage to be recalled by them returning with a 1,000 bomber raid before a fresh start (with owners’ permission and a prior evacuation, naturally).

  • RAB

    I also play golf by the way. How many more sins can I commit eh? Along with sitting defiantly on my Investment asset?

    Anyway to get back on track, this bloke Cheshire from the LSE has produced a study which says that because of Green Belt Laws the great unwashed are being deliberately kept out of the Home Counties, and it is a subsidy to the horsey country set and golfers. He wants to concrete over our green and pleasant to provide “affordable” housing and probably carpet it with windmills too. I hardly think there is a massive boom in golf course building, so this sounds like leftie class war bollocks to me. Besides golf courses are wonderful conservation areas, chock full of wildlife, foxes, badgers, bunny wunnies, birds of prey that swoop down and steal yer ball etc. I thought the Green Belt was all about conservation of a precious asset for the whole nation. He wants to be thought of as a Green, surely?

  • Paul Marks

    Economic value is indeed subjective – and not just in relation to Scunthorpe.

    I suspect that RAB would rank the three locations of Bristol, Bath and Wells in that order – whereas I would rank them Wells, Bath and Bristol (if I was offered a home and income in the three locations).

    I remember RAB (and lady wife) having to hide their amusement at the fat, bald man (me)being so bowled over by Wells (the sort of place I imagined as a boy – many, many years ago).

    I had a similar experience visiting Hawkshead in the Lake District (some years ago)- the desire to walk about (when I am not stuck in a box at work I am chained, by ideological duty, to the internet I detest) and just breathe.

    Different people have different preferences – which means we put different economic values on things.

    Which is why trade exists.

    Aristotle was wrong (as wrong as the goats breathing via their ears)when he assumed that trade was the exchange of equal values – totally untrue.

    When I trade with someone else it means I value what he is offering (money or whatever) MORE than I value what they want from me.

    Ditto for them.

  • Paul Marks

    I should point out that it was the country around Hawkeshead (rather than the town itself)that exited me.

    Climbing over a stile by the church and walking up footpath to a forest overlooking a lake.

  • Mr Ed

    I am chained, by ideological duty, to the internet I detest

    It is a deeply shocking and troubling thing to find that someone is wrong on the Internet.

    I once met a biologist who found bear faeces in a forest.

  • Kevin B

    So what we’re saying is that Schroedinger’s… er Rab’s house is neither alive nor dead until we open the box?

  • Paul Marks

    Mr Ed – you persist in misunderstanding what I say.

    When I say that the ideology that “RT” states blatantly is the ideology that (in more measured language) one finds everywhere else (even in supposedly conservative media) you think I am talking about how many people watch RT.

    And when I talk about the influence of people (such as so called libertarians NOTHING TO DO WITH RT) on young minds – you think that I am talking something else.

    People seek out knowledge and what they find is poison. So the poisoners have to be opposed.

    Not for the sake of the poisoners – they can rot in Hell.

    But for the sake of the young people they are trying to poison.

    Please Sir – no further conversation on this matter.

  • Paul Marks

    Fred the Forth – please do take the hint.

    California is not going to get better (the present “recovery” is an illusion – none of the fundamental problems are been dealt with).

    Get out – get out now.

  • RAB

    Yes Fred leave. They are even enshrining praises for the “Great Leader” into Legislation now…

    http://www.breitbart.com/Breitbart-California/2014/04/27/CA-Assembly-Passes-Bill-Urging-Schools-to-Teach-Racial-Significance-of-Obama-Presidency

    Ok let’s nail this Value thing. The value of something is not what it cost to produce, or the labour that went into it, it is entirely what you are prepared to pay for it. If you are happy with the transaction, that’s it and all about it.

  • Nick (Blame the French!) Gray

    Value is individualistic, but i still suspect that mud pies would have no value to anyone, anywhere. Marx, though, assumed that all things had an objective value, and that the capitalist only charged this price, and gave the workers less, keeping the rest as ‘pr-f-t’ (boo, hiss!).
    Paul, if you value a good more than the price, and the seller values your money more than the good, then the exchange is equal on both sides, surely?

  • Lee Moore

    RAB : “Ok let’s nail this Value thing. The value of something is not what it cost to produce, or the labour that went into it, it is entirely what you are prepared to pay for it. If you are happy with the transaction, that’s it and all about it.”

    I think the official Austrian view is not that value is what you’re prepared to pay for it, but the subjective “mmm” factor you get from having it (or if you’re valuing something you don’t have, the “mmm” factor that you would get if you did have it.) So if you have an X, and you get warp factor 7 mmm from having it, 7 mmm is your “use value.” If the market allows you to exchange it for 3 Ys, which you value at 9 mmm in subjective mmms, then your X has an “exchange value” of 9 mmms. So you would probably make the exchange, getting 9 mmms in return for 7 mmms. But Paul Marks, who has different tastes from you and who is the current owner of the 3 Ys, values his 3 Ys at 11 rrrs but he values your X at 17 rrrs. So he will also be willing to make the exchange. By doing the exchange you’re up 2mmm factors, and he’s up 6 rrr factors. (Note we cannot compare Paul’s subjective satisfaction directly with yours so an mmm is not the same as an rrr.)

    My point – to flog a very dead horse – is that when we use the terms richer and poorer we use them not only of comparisons between different states of the same person, but also for comparison between people. Since mmms and rrrs cannot be compared, being wholly subjective creatures of different minds, we must therefore be speaking of something that is not measured in mmms and rrrs, when we use the terms richer or poorer. And that something is the objective exchange value. ie the quantity of goodies you’ve got measured in whatever counting units are customarily used for such things. Like money, or gold or tulips or whatever. Perry will not like the term value here, and in strict Austrian terms perhaps it would be better to call it “wealth.”

    Wealth in this sense is objectively measurable, and comparable between persons – you could sell all your stuff and get 1,277 ounces of gold. Paul Marks could sell all his stuff and get 1,988 ounces of gold. Paul is richer than you. But that doesn’t mean that Paul is more contented with his pile of stuff that you are with yours, nor that you would be happier with his stuff than you are with yours. Those are all “subjective value” questions. But that you could exchange your stuff for 1,277 ounces of gold is not a subjective matter. That really is the amount of gold that the highest bidder would offer for your stuff.

  • Mr Ed

    If the market allows you to exchange it

    The very essence of a market is not that it allows, in the sense of permitting, as in ‘fishing permit’ but enabling.

    To assign numerical valuations to subjective values is inappropriate, it is an attempt at numerating rankings, I swap money for bread at the bakery, as I prefer the loaf to my £3, the baker prefers £3 to my bread. There is no ‘exchange value’ there is only exchange. I do not go into a shop to exchange 3 £1 coins for 3 other £1 coins, that would be pointless and bizarre, conferring no benefit on either side. I fear Lee, that you may have been exposed to ‘numerical economics’ and not realised the rampant fallacies that abound in it.

    By doing the exchange you’re up 2mmm factors, and he’s up 6 rrr factors

    It is an error to rate any economic actor’s satisfaction in numerical terms, all one can say is e.g. that Mr Ed with his bread is more satisfied than he was with that £3 that he exchanged for it, as was the baker with his £3 for the bread, at the point of exchange. The intrusion of algebra is obvious to anyone applying a scientific approach when you ask for values for ‘mmm’ and ‘rrr’. If there is no value for either factor, then the multiplying factor is simply increasing absurdity.

    The use of numerics may be an attempt to smother the subjective theory of value, the Zombie rebirth of the fallacies that rail against true insights into human behaviour.

  • Lee Moore

    I probably was exposed to numerical economics, but my tutors would undoubtedly have argued that this exposure left no trace. Most of my teachers would have said the same thing, regardless of subject.

    I agree that it would be unwise to claim that 20 rrrs represented twice as much satisfaction as 10 rrrs. The numbers should be thought of as marking relative positions in the satisfaction hierarchy, or ranking. When I say that Paul exchanges 11 rrrs for 17 rrrs, I intend only to leave him space for other valuations intermediate between his valuation of his own 3 Ys (11 rrrs) and his valuation of RAB’s X (17 rrrs.) When presented with my pair of Zs he may like them more than his 3 Ys, but less than RAB’s X. It would be tiresome to have to resort to decimals as soon as a third choice appeared.

    And it would be be inconvenient to record the preference between every pair of possibilities merely as “A is preferred over B. D is preferred over M, E is preferred over A, C is preferred over A” and so on. That’s how they word IQ test questions. It’s more helpful to give a ranking, and assigning a ranking number is a useful way of doing it.

    However, I don’t want to limit my numbers to mere ranking. When we compare A with B, we may have a sense that A is waaaay better than B. Or that it’s very marginal. Or that if you could just tip C into the bargain, we’d have a deal. So while using 11 rrrs and 17 rrrs does not imply a precise 17/11 proportion, using 10 rrrs and 11 rrrs implies the decision is close, while using 11 rrrs and 90 rrrs implies it’s not. You are of course welcome to eschew all numbers and avoid the risk of heresy, as you please.

  • Understanding value is very contextual.

    As a former commodity broker, the things I went long and short of were purely a means for accumulating more government issued fiat money at the end of the day, and these transactions were entirely amenable to simple numeric description. That is all easily understood.

    And then we move to where there is a more fuzzy area of value, such as when someone exchanges money in order to keep their house at a certain temperature. If money is tight, these value judgements can move around a fair bit, but only within certain limits (i.e. approaching the point at which I might freeze to death in a cold winter night has an effect on my demand elasticity, whereas the rest is mere ‘comfort’).

    It is when people buy and sell things that have *much* more complex notions attached to them, and there are quite a few of those (a house sometimes, or some treasured heirloom, all ladened with very subjective values) that it all gets vastly more complex.

    I think the trick is to just not to fall into some sort of ‘Universal Fungibility’ fallacy ;-)

  • Paul Marks

    Nick – do not blame the French (at least not for this), blame the Greeks (and David Ricardo and his taking of a few unwise words by Adam Smith and making a Labour Theory of Value out of them).

    Exchanges are not equal – when I exchange I get something I value MORE (not equally) and so does the person who exchanges with me.

    It I not even true that we both equally benefit – one person is usually more happy with the trade than the other (they are very rarely both equally happy).

    Mr A may get a much smaller benefit (although still a benefit) than Mr B.

  • Mr Ed

    Exchanges are not equal

    Indeed, but none the worse for it. True and harmless equality is only found in mathematics, on either side of an equation – two sides which equate to each other -, and harmless equality is rightly sought before the law, but not elsewhere. Even individual atoms of many elements may be unequal, in their neutron content, or their contributions towards a half-life. A U235 atom may last for almost the rest of time, or it may disintegrate within a second.

  • Lee, the whole point is that the terms ‘rich’ and ‘poor’ are totally subjective. Or at least they should be. They would be, were there not for people who insist on minding business other than their own. Think about it for a second: why would we label someone as ‘rich’ or ‘poor’, other than for the purpose of some sort of redistribution or outright theft?

  • Fraser Orr

    @Mr Ed
    >>Exchanges are not equal
    >Indeed, but none the worse for it.

    That is true, however, there is an emotional component to it, because we are homo sapiens not homo economous.

    If you paid $200,000 for your house, and it is now worth $100,000, then I come along and offer to buy it from you for $120,000, then I am a benefactor to you. However, most people do not see the fact that I am giving you $20,000 more than it is worth, they only see that they are getting $80,000 less than they paid. This is irrational, but it is also common, and it is unfortunately the source of all sorts of bad political policy.

    We who would advocate for liberty must find ways to appeal to someone in that situation to see that they actually benefit from the market, and, in this specific case, point out that the government’s monetary policies are the source of their woes, not some evil speculator.

  • Lee Moore

    Alisa – I don’t agree that the terms “rich” and “poor” are totally subjective. I think they are commonly understood to encompass the ideas of having a lot of stuff and not much stuff, respectively. (Though there remains the perennial argument about whether they refer to absolute or relative notions of a lot of stuff and not much stuff.)

    There can be little doubt that Montgomery Burns is a deeply unhappy man, while Homer Simpson is not. But it still makes sense to say that Mr Burns is rich and Homer is not. Happiness and riches are not the same thing.

    I certainly agree that those who bang on most about the rich and the poor are usually those who are eager to redistribute some of Peter’s stuff to Paul, perhaps taking a commish on the transaction. But i don’t think that that is the only use to which the words can be put.

    However sordid it may be, many people covet larger bank accounts and the things that larger bank accounts can buy. Zertainly ve Austrians can see through the grubby plebs craving for land, money, stocks and washer-dryers, and appreciate that what they really want is utils, or happiness or subjective value. But people understand, or think they understand that, if they had more stuff, they would be happier. So the concepts of rich and poor can be used quite innocently – how could I become as rich as my neighbour ? How many years of study would i need to put in, before I could become a lawyer and have LOTS OF STUFF ! If only I had more STUFF, Marjorie would love me. And so on. Sordid, but definitely part of the human condition.

    And when we see a beggar covered in sores, thin and bedraggled, we tend not to think “I cannot call him poor, for I have no window into his soul, nor into his index of felicity.”

    So if one is forced to make a simple digital rule – should people who use the word ‘rich” or ‘poor” be shot, on the assumption that they must be assumed to be up to no good – then the answer is, reluctantly, yes. But I think we can afford a little more nuance.

  • Lee, you seem to have read my comment to mean that people who use these terms are essentially socialists – but I said or meant no such thing. For example, you and Perry and others here all used these terms when discussing RAB’s situation with his house. That in and of itself does not in any way mean that you are socialists. I myself use these terms all the time. What I was actually trying to say was that the reason we use these terms and assign objective meaning to them, is because The System (i.e. people who are up to no good as you put it) does assign objective meaning to these words, and thus forces us to use them.

    Also, note that I am not saying that in the absence of such coercion the terms would not exist or would not be used – they would, but they would not be held as an objective condition, as they are being held now. Rather, they would be seen as subjective, much like taste or beauty or happiness.