When atheists get it wrong

One of my favorite bloggers, Ebonmuse of Daylight Atheism, occasionally writes on topics outside the typical atheist fare, such as morality or poetry, but also the subject of capitalism.

Having a better-than-average knowledge of capitalism, I cringe when such blogs appear, because they often deviate from Ebonmuse’s usual high standard of critical thought.  Too frequently, they contain long-discredited capitalist canards which only find currency among the hard left.  These are the “springboards” for Ebonmuse’s larger points he wishes to make about capitalism.  One is tempted to give Ebonmuse the benefit of the doubt and suggest that he is merely responding to one school of capitalism. But alas, its supporters (aka, free-marketeers) are far more in agreement on capitalist economics, than, say, members of a particular religion.  At the least, Ebonmuse should augment his assertions with relevant quotes or examples, but this is rarely, if ever, done.

What follows is my critique of a recent Ebonmuse blog entitled “Spread the Wealth: Further Thoughts on Capitalism“.  Allow me to reiterate that I agree with much of what Ebonmuse writes and greatly appreciate his contributions to free-thought, but I believe that some of his views on capitalism are simply wrong.

Ebonmuse starts with a fair summary of the vast benefits capitalism has wrought, but he goes badly off-track with the following:

Some people, especially libertarians, seem not to grasp this. They act as if competition itself was the end, as if inequality was the end – and this is absurd.

Competition and inequality are ends?! No, no, no! A thousand times, no! The absurdity here is ascribing such a view to people like libertarians.  Free-marketeers (a circle of individuals far wider than libertarians, by the way) would fully agree with Ebonmuse’s view that competition is merely a means to better ends.  When free-market economists like the late Milton Friedman argue for competition in the provision of public education, for example, they justify it not on the basis that competition is the good we will achieve, but what good competition will bring: more choice, better quality, higher standards, etc.  Tsk, tsk.  A few minutes reading Adam Smith, Friedrich Hayek, Ludwig von Mises, or Friedman himself would have quickly dispelled this ridiculous notion.

Ebonmuse continues:

The purpose of the economy is, or at least should be, to produce happiness, not to produce winners and losers. Competition is merely the means; the end is producing greater wealth and greater opportunity, and with them, greater well-being for all members of society.

Happiness is certainly a desired end, but it is most definitely not the economy’s purpose to produce it; only individuals can do that for themselves.  This is more economic illiteracy.  The purpose of the economy–any economy–is to exploit limited resources to produce and distribute goods and services demanded by consumers in as efficient manner as possible.  Winners and losers are the inevitable by-product of a host of factors, many of which lie outside the control of us humans (at least for now), and appear in any economic system.  How does Ebonmuse propose to know when maximal happiness, and thus a fully purposed economy, has been achieved?  He does not say.  At least, he demonstrates a true understanding of competition’s role, though one wonders where he obtained it.  From Karl Marx?  It certainly could not have come from a free-marketeer…

We now come to Ebonmuse’s central point:

This is why progressive, redistributive taxation is a vital part of any civilized state’s economic policy. Those libertarian philosophies which would allow individuals to accumulate unlimited wealth without interference have lost sight of why an economy and a state exist in the first place. By allowing some people to acquire unlimited wealth, they have implicitly decided that their goal is happiness not for everyone, but only for a privileged few. By any reasonable standard of morality, this is wrong. By aiming at a suboptimal standard, they would construct a state that enjoys less prosperity and less happiness in general, and such nations will inevitably be outcompeted by those that ensure a fair distribution of basic resources.

Ebonmuse has committed a sleight-of-hand.  It is now the economy’s and state’s purpose to produce happiness, presumably achieved by the “vital” policy of progressive, redistributive taxation. But economies don’t tax; governments perform that function.  Does Ebonmuse believe it’s actually the state’s, not the economy’s, purpose to produce happiness?

It doesn’t much matter.  As well, a debate on the role of government is beyond our scope.  The question under contention is whether such taxation as Ebonmuse proposes will do as he intends.  Without any evidence or support, Ebonmuse asserts that predation of income translates into an increased level of happiness overall.  If some individuals possess “unlimited income,” this means, ipso facto, that others are sub-optimally happy.  Why is that?  Ebonmuse does not explain, but he does state that such a state of affairs is desired by libertarians.  What’s more, without any evidence or support, Ebonmuse declares that this state will produce less prosperity, less happiness, and relative competitive stagnation compared to countries which follow his prescription.  For someone who claims allegiance to reason, evidence, and logic, his assertions are remarkably lacking these qualities.

“That which can be asserted without evidence can be dismissed without evidence,” as an infamous contemporary atheist puts it, so, normally, we could dismiss Ebonmuse’s views on that basis alone.  However, since Ebonmuse is widely and rightly regarded as a studios blogger, I think more is needed to undermine his case.  So, in counterpoint, allow me to present the example of Hong Kong.

Hong Kong is a city governed by China since 1989, but one who’s traditional free-market, low-tax policies have largely been allowed to remain unchanged.  Its tax rate for individuals and corporations around 17%, as well tax revenue as a percentage of GDP of 12.7%, are among the lowest in the world, yet its GDP per capita is one of the highest.  According to Ebonmuse, the citizens of Hong Kong should be downright miserable, what with all that unredistributed income floating around, yet surveys place its citizens above the median among international comparisons, exactly equal to the French.  If Ebonmuse wishes to make his case, he needs to explain away examples like Hong Kong and offer up those which support his claims.

At root of Ebonmuse’s errors, is the view–so common among critics of capitalism–that there is a fixed amount of wealth; if some people have more, it must mean that others have less.  The view is a fallacy.  There is no fixed amount of wealth. Rather than redistribute the pie, government policymakers need to focus on expanding it.  This is what motivates free-marketeers to champion capitalism and low, unbiased taxes.

Another error concerns the assumption that behavior will remain unchanged in light of new economic circumstances.  If we raise the tax rate to X, the treasury will obtain Y income.  True, but only in the short run.  Experience has shown time and time again that taxpayers respond to changes in tax rates.  Exactly how is not always predictable, but for the most part, high marginal tax rates actually produce a drop in revenues.  This is why many countries have actually lowered top marginal tax rates since the ’80s.

I encourage Ebonmuse to direct his considerable intellect toward garnering a better understanding of capitalism and economics.  It’s a bit of a shame to see such an important atheist blog somewhat discredited by a few flawed views.

8 thoughts on “When atheists get it wrong

  1. I will respond here with my intended response to Ebonmuse’s post before I read what you described his ‘slight of hand:’

    Bravo!

    I think you did a very good job of being concise while addressing all the relevant issues. I appreciate you taking the time to write this educational piece.

  2. 1. Happiness shouldn’t be the end, because there are no ends. Finalistic systems are just wrong. Is happiness achievable? If so, what do men do THEN, AFTER they find happiness? Something other, perhaps: but then it appears happiness is not a general aim in life. (And if it’s not achievable, how can we know where we’re going?)

    Man doesn’t want “happiness”, at most they want MORE happiness. But because it still sounds finalistic, it is better to focus at that MORE and say: men want POWER. And here we reach the Nietzschean view that the will to power, to affirm oneself etc. is behind everything. (How could you define power? Perhaps physically: energy in time. You can increase power either by increasing your own work in a time unit, or by having more people serving you: the latter is like adding batteries.)

    2. Free-market, like every big power (and everything passes by…), is being destroyed by nothing else than itself alone. Unless the market has some external direction (like in export economies), we can say that there is a conflict between producer- and consumer type. This is actually no economics, but rather psychology. It is about what capitalism does with people. What do we want from consumers? Are we gonna make them smarter than we are? Are we gonna act on their instincts, expand their whole subconsciousness, are we gonna make them more egalitarian, more social, flat-minded, finally, are we gonna play on “universal values”, which are nothing more than human weaknesses? I.e. laziness, the will to comfort, “open mind” (which results in lack of self-thinking), etc.?

    Of course, capitalistic evolution continues to find individuals who are talented and promote them. But there is still the problem of masses: what happens to them? If they lose too many virtues (either as a result of being a successful producer who has tons of money and doesn’t need to work, or as a result of being a consumer, corrupted by the products) — if they degrade too much, then people start asking for more from the government (instead of working, i.e. corrupting others even more). Capitalism almost causes socialism, social requests. You see, all corruption that you can find somewhere in the society (perhaps from one generation to the next) can be tracked to the “invisible hand of the [unbiased] market”… because it is the highest power…

    Keep in mind that there are more and more people. In such circumstances, if this is not stopped, it will be harder and harder to offer anything valuable to people, therefore they will have to be made more and more idiotic. That’s why I’m against “progress” in demographics.

    The “evolution” from agriculture to industry, from industry to services (i.e. to things less and less needed for life) is a degradation. Having your all needs served, removing any tention and will is certainly not the way to empower people. People don’t get “happier”, neither.

    Of course, here I am an optimist, because I think capitalism will last and DEMOCRACY will fall; a typical man soon will be so powerless, so tyrannised that they will work even harder and make no claims… And the rulers won’t have to help the people, technics and common immorality will help them keep power… So I don’t say capitalism will fall completely, it will transform into some even harder form of tyranny and exploitation over the masses, as the remnants of morality disappear and technics helps.

  3. For example, the trend to open your own business can be tracked to effects of market on mentality: by social-thinking, flat-mindedness and less hierarchism. People now less understand the “rat race”, but that’s because they believe more in social values, and they do so because of corruption (can be traced to sex, to all entertainment companies, communication companies etc.). Generally, people evolve towards instincts and not complicated thinking systems and intensed consciousness… this psychological direction will perhaps have a negative influence on working in big companies: the market will get more flat. That’s unless we stop making them more and more stupid (e.g. by stopping demographics increase and slowing down competition, e.g. by establishing strong monopolies, perhaps not so liberalistic and democratic…). This leads to such view of the future: “don’t have too many children, don’t open your own business, you are here and you HAVE to work for us” (perhaps somewhat like Japan, but slowly evolving towards more exploitation and less freedom; and stricter and stricter birth control).

  4. Hi someone, I was intrigued by your thoughts, though I cannot say I agree with most of them. You say that moving from agriculture to industry, and industry to services is a “degradation.” Would you have us all revert back to an agrarian society?

  5. It is your post that engages in slight of hand, in fact it almost becomes a straw man at the end. For example, ebonmuse specifically says that libertarians act “as if” competition were an end unto itself. He never says that they claim it as an end unto itself. You are attacking a point that was never made.

    It’s worth noting that you say an economy is only a means of exploiting (bad choice of words given the history of debate surrounding capitalism) resources and to distribute then efficiently. It’s worth noting that you said efficiently, not justly but I’ll leave that for another time. Yet ebonmuse is talking about a econo-political ought here and not about definitions of an economy. You don’t address this point except to hand wave it by saying “the individual alone does this” (a highly quesitonable proposition but again off topic) and claiming that this is economic illiteracy. You’ve completely side-stepped the point with rhetoric sure to dazzle the converted or unfamiliar but that fails to address the points of the text.

    Third you failed entirely to deal with, or seemingly even read, ebonmuses point. He’s not arguing that economics is a zero sum game. He’s arguing about the concentration of power (a fine example of how you cannot be anti-state and pro-capitalism) and the ethics of distribution. He specifically says, “y allowing some people to acquire unlimited wealth, they have implicitly decided that their goal is happiness not for everyone, but only for a privileged few”. That is not a statement about economics but one of ethics.

    On a separate note you examples are highly flawed. This combined with your opening horn blowing and further tricks (see above) are evidence that your piece here is rhetorical flair and not a reasoned response to the issues ebonmuse presents.

    Now on to your examples. Hong Kong receives extensive public money from the mainland, local taxes are not it’s only source of government revenue. It has extensive social services and all land, let me repeat that, ALL LAND is owned by the government and leased. There is no private property. This is not a sound example of a triumph of lockean free-markets. And the claim that high marginal tax rates produce a drop in revenues “some how” is a misstatement of the laffer curve(what was that about an “better than average knowledge of capitalism). The laffer curve in short says there is a point at which higher taxes can lower revenues but the exact point has yet to be pinned down.

    You have far from discredited (or even addressed) ebonmuses blog. Perhaps it is you who should put that considerable intellect toward a further understanding of capitalism, ethics, and social justice.

  6. Hi Jimmy_D, thanks for stopping by and presenting a rebuttal. Allow me a reply.

    You wrote,

    ebonmuse specifically says that libertarians act “as if” competition were an end unto itself. He never says that they claim it as an end unto itself. You are attacking a point that was never made.

    Sorry, but that was the point Ebonmuse made. Consider what he states right before:

    But the important point is that competition and meritocracy are a means to an end. They are not the end in themselves.

    Some people, especially libertarians, seem not to grasp this.

    See? He specifically denies that libertarians believe competition and meritocracy are a means to an end. He offers no quotes or examples to support such a view.

    It’s worth noting that you say an economy is only a means of exploiting (bad choice of words given the history of debate surrounding capitalism) resources and to distribute then efficiently.

    I beg to differ it’s a “bad choice of words”. If you read the definition of the word, you’ll see its usage is most apt.

    Yet ebonmuse is talking about a econo-political ought here and not about definitions of an economy.

    In truth, he does both. But Ebonmuse offers no rationale for this “ought”. He merely states it as self-evident.

    He’s arguing about the concentration of power (a fine example of how you cannot be anti-state and pro-capitalism) and the ethics of distribution. He specifically says, “y allowing some people to acquire unlimited wealth, they have implicitly decided that their goal is happiness not for everyone, but only for a privileged few”. That is not a statement about economics but one of ethics.

    No, this is, much like what else he writes, a strawman. Ebonmuse, wrongly, attributes certain “implicit” beliefs to libertarians in an attempt to refute them. He identifies a “problem” and offers the solution he believes fixes it: progressive, redistributive taxation. Not once does he support this claim or any others.

    Now on to your examples. Hong Kong receives extensive public money from the mainland, local taxes are not it’s only source of government revenue. It has extensive social services and all land, let me repeat that, ALL LAND is owned by the government and leased.

    I can find no support for your claim that “Hong Kong receives extensive public money from the mainland.” Indeed, why should it? The budget has typically been in surplus, before and after administrative handover to China.

    And what of the alleged “extensive social services”? It spends about 14% of GDP on social welfare spending, which is on the far low-end of developed countries.

    The fact that “ALL LAND” is owned by the government and leased (which makes up about 1.4% of budget revenues) is not relevant to my argument. Ebonmuse’s claim was that progressive, redistributive taxation is “is a vital part of any civilized state’s economic policy,” which would lead to higher overall happiness and better competitive position against other countries (please note that these are more assertions, not ethical suggestions). The example of Hong Kong, both historically and presently, wholly undermines this claim.

    And the claim that high marginal tax rates produce a drop in revenues “some how” is a misstatement of the laffer curve(what was that about an “better than average knowledge of capitalism).

    If you’re going to try to refute my argument, at least understand it correctly. What I wrote was,

    Experience has shown time and time again that taxpayers respond to changes in tax rates. Exactly how is not always predictable, but for the most part, high marginal tax rates actually produce a drop in revenues.

    I never used the words “some how,” and my statement is completely in accordance with mainstream economic thinking.

    But you don’t address the broader point I make, which is that Ebonmuse’s belief in the efficacy of “progressive, redistributive” taxation is not supported. Indeed, as I pointed out, countries have done the opposite of what Ebonmuse thinks they should do.

    You have far from discredited (or even addressed) ebonmuses blog. Perhaps it is you who should put that considerable intellect toward a further understanding of capitalism, ethics, and social justice.

    I’m sorry you feel this way, but I believe I’ve demonstrated otherwise.

  7. Ed Jones said,
    Robert,
    Thanks for that strange interlude with my letter to Joe Hoffmann.
    It was all actions with no comment.
    Would you yet spare just one word?

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