Distributists Vote Democratic

The Democratic Party is the party of the minimum wage  as well as the party of higher marginal tax rates.  Raising the minimum wage reduces the labor participation rate, squeezing marginal workers out of the cash economy.  Higher marginal tax rates encourage skilled workers to work less at their profession.  Both of these effects create more opportunities for value added activities at home.

Higher tax rates also decrease economic efficiency.  A mechanic friend of mine says “You can’t beat a man at his trade.”  He means that even though his hourly rate is very high, you are better off having a professional do it than trying to muddle along yourself.  This is a terrible challenge to the do-it-yourself ethic. 

Luckily this challenge can be resolved by adding taxes and more taxes to the economic transaction between the tradesman and the would-be distributist.   Eventually the tax burden on the transaction is large enough, that it becomes economic to do it yourself.

Finally high taxes stimulate the underground economy, which by its nature is local and small-scale.

This pro-distributist tax policy is balanced somewhat by the Democratic desire to legalize marijuana.  This action would undermine the distributist economy of small time growers and retailers.

Such are the compromises of the democratic process.

-C

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4 responses to “Distributists Vote Democratic

  1. MR:

    I don’t know if that’s what “C” intended, but that certainly is the state of things today. Just my opinion, I suppose, but I find it all but impossible to maintain a reasonable life in the face of so much constant opposition. How much time, money, and energy we (collectively) spend trying to figure out how to “game” the system.

    Whether it’s trying to figure out how to just make a living (let alone operate a business), feed ourselves, or – as you point to – build a home on property that we “own”, the state has it’s fingers in it. Not much remains untouched. So, don’t you dare color outside of the lines. Bad dog, no biscuit.

    HT

  2. I thought of an area in which more regulation and higher taxes hurts the do-it-yourselfer. House building.

    The building code makes house-building more difficult for everyone, but especially for those trying to build their own homes. Learning the code, and more importantly, learning how to deal with the building department, takes a considerable investment of time and money.

    If you build houses for a living, this investment eventually pays off. If you only want to build one house, for yourself, the expense is a lot harder to justify. The tougher the building regulations, the less economical it is to do-it-yourself – unless you do it illegally, which means you risk losing it all if you get caught.

    Another note: your mechanic friend may be right in saying that it is never economical to do-it-yourself when you can pay a professional to do it for you, better and faster. But your friend is speaking in terms of dollars. If you’ve got no dollars to spend, but you’ve got a little time and a brain, fixing your own radiator is a very economical thing to do.

    Best,

    M. Ragazzo

  3. Dear C,

    I think I like you better than Harry White. But I am confused.

    First, Harry White said that more regulation hurts the small time operators, the illegal raw milk dealer, for instance. Now, you say that the small time operators would have no market but for high taxes and oppressive regulations. Boy am I confuzzed.

    I want local raw milk to exist, but I also don’t want to go to jail for buying it. Are you saying that I can’t have both?

    Sincerely

    M. Ragazzo

    *

  4. C:

    There’s little question that taxes, like all policies, will lead to a range of consequences, maybe intended, mostly unintended. I concur that more far-reaching regulatory regimes inevitably boost the viability of the black market, that being almost rule #1 of the libertarian case, especially in regards to the inevitable downside effects such as violence attending “criminal” behavior.

    What this post inspires in me is, again, the notion that the “means” (or policy) matters as much as, if not more than, the “intent”. To the extent that I will generally favor policies that are relatively benign – meaning, I think, that they have little in the way of any consequences – doesn’t mean that I believe that none would actually occur. Any economist worth his/her salt, I think, learns first to anticipate and search out such consequences.

    Still, in keeping with the prior Thomas Sowell quote I offered, we generally find that political practice typically cares more about the perceived intent than in the actual outcome. He reiterates that theme in the context of current events here:
    http://www.realclearpolitics.com/articles/2008/07/are_facts_obsolete.html

    In regards to the unintended consequences that you accurately, I think, suggest above, I would again favor more benign approaches to seeing laudible social goal achieved, principally as unavoidable and incidental outcomes. To the extent that any government at all will cost us something, for instance, I tend to favor this water being carried on the back of sales taxes, rather than income taxes.

    (By the way, I’ve thought to find Alan Keyes discourse on this subject and believe this might be the one I recall: http://www.freerepublic.com/focus/fr/666593/posts)

    I’ll reserve further comment on this particular subject for another day, but will close with this thought: However we might be attracted to a stated policy, whether it be on the basis of the perceived, if not actual, intent, it’s actual efficacy, or it’s incidental unintended consequences, I might hope that we might actually maintain some reasonable recollection of the true meanings of such words “liberty”, “justice”, “pursuit of happiness”, “lawful”, “rights” and the like. We tend to bandy such terms about as if they might be bent to any cause, but, at the end of the day, these are the likeliest casualties of most policies.

    Harry Tuttle

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