Tag: Taxes

On a Universal Wage Cap – an essay I wrote 10 years ago

Social Darwinism and The Wage Cap

Many people refer to capitalism as a kind of “social Darwinism” — which it is in a sense, but in accordance to their intentions.  Capitalism isn’t social Darwinism in the sense that it does not select for the survival of the most successful; in fact, the poorest of society are the ones who statistically bear the most children.  Perhaps it could be argued that the homeless are less likely to survive (and hence to reproduce), but the plain truth remains that calling it “social Darwinism” isn’t anything more than employing a label to free oneself from the burden of compassion.  Natural selection, while maybe seeming cruel, is a necessity and a boon in the natural world.  Capitalism, on the other hand, is a completely artificial environment.  If Darwinism is a necessary evil in the natural world, in capitalism it’s just an evil.  Apparently, we revere strength while abhorring and treading on weakness (or what we call weakness) in our society, which defeats itself, as strength without heart and compassion is like a stalk without leaves (or, better, roots).

Contrary to popular belief, homelessness is not simply a consequence of being weak, nor even the repercussions for being “lazy.”  The job market, like any other mob force, adapts primarily to the normative and has a habit of leaving the rest out to dry, hence the need for regulations for providing access for disabled people, just to give an example.  As it is a blind force, all dimensions of normativity apply, including, but not limited to, the willingness to be subservient, which is a very unnatural state for a human to be in.  As Jiddu Krishnamurti said, “it is not a sign of good health to be well adjusted to a sick society.”  So I give to the bums and don’t ask questions, because everyone has a reason.  Being homeless, dirty, hungry, toothless and uninsured, as well as spending most of your life begging for money from others, is an awfully big sacrifice to make just for the luxury of “being ­lazy”… don’t ya’ think?

The kind of “social Darwinism” that actually happens in capitalism is not about survival or reproduction, but purely one of what kind of person rises to positions of the most power.  If you think about it, having a conscience is only a disadvantage in this regard, as conscience serves only to restrict what you can do (and still “have a clear conscience”).  Not to say that conscience is a bad thing by any means, but that in the “Darwinism” of capitalism the most successful are, as a rule, the least ethical.  Money is power in this world, and hence the ones with the least scruples are the ones with the most power and influence over us and the world, whether it be through media, political influence, the conditions of employment, assassinations, perpetual debt, advertising, pollution, deforestation or mass animal cruelty.  That’s not to say that we aren’t all responsible in a sense, but that “social Darwinism” is not quite something to sing praise about.

It’s well-known, and somehow accepted without question, that the only thing important to a company is, by design, the bottom dollar.  If a company is publicly owned, it can even get sued for making a decision in the interest of anything other than profit, like say… the good of all humanity.  The amazing thing is that this is all taken for granted — that the entities with the most power in the world are excused for being, and expected to be, sociopaths.  Companies are, after all, made up of and run by people, despite their behavior and classification as conscienceless machines that grow tumorously and devour everything around them.

The advertisers, working for companies that are selling things, are necessarily most effective at their jobs when they’re busy at gearing the minds of the populace toward general consumerism.  So they help us get lost in a priority system of material gains, thinking that they will afford us happiness as a substitute for any real spiritual fulfillment.  Not that I’m saying they’re the only reason it is the way it is — just that advertising doesn’t help.  They’ll use any vice whatsoever in the way of psychological manipulation that’s available to them, and collectively they’ve had many years to develop those techniques, all the while gradually transcending their predecessors’ innocence in marketing — i.e., all it takes is for one person to invent a truly depraved technique, and everyone else to copy it without any particular sensibility.

At the beginning of the process of consumption is depletion, pollution and labor, and at the end of it is waste.  Not only that, but the waste is aggravated per the fact that products are designed to fail.  When deciding what brand to buy, or whether to buy it or not, how long a product will last is not something that “jumps out at you” when you see it in the store, or on TV.  That information is normally not even listed.  But what does jump out is the price.  So if there is an optimal balance Bt between price and longevity (as far as the consumer’s best interest or lack of wastefulness goes), in the interest of competition the actual construction of the product will be way cheaper than that­.  This also benefits the company on a second front: the more quickly the product fails, the sooner you have to come back to buy a new one.

Another thing that majorly suffers is our health.  Or do you believe that the free market can only be a win-win situation, because one wouldn’t pay for something unless it benefited them?  In that case, let’s take the issue of selling crack for example.  It’s made illegal because of the damage it causes, despite the fact that people buy it of their own accord.  Most products on the market aren’t as bad as crack, and hence aren’t made illegal, but that principle is not limited to what’s illegal; it may apply across the board, just to different degrees.  Take, for example, something that tastes seductively good, whose ingredients are harmful­ but aren’t illegal, because either their negative effects aren’t bad enough, or they’re subtle or long-term rather than acute and short-term, ­and voila! you have a wonderfully selling product.  Or take an existing product and replace a healthy (or less unhealthy) ingredient with a much more unhealthy one, because it tastes sort-of the same and is cheaper and/or more convenient to use, and voila! you have high-fructose corn syrup or partially hydrogenated oil.  Or say, make a product that’s a veritable neurotoxin, withhold evidence and additionally bribe key members of the FDA with high-paying jobs at your company in order to get it certified, and voila! you have aspartame.  So as with the issue of crack, just because you’re ostensibly giving the person “what they want” doesn’t necessarily mean you’re not taking advantage of them.  And if there’s one thing companies are good at, it’s taking an advantage.  And in the end, due to these myriad compromises of our health, we get sick, and then to whom do we go?  The pharmaceutical companies, who are all too happy to extend their cold, grisly welcome.

“All that is necessary for the triumph of evil is that good men do nothing.” — the WWW (1989 – ????)

But what can we do?  All of the legislation in the world won’t substitute for genuine morality.  There are always more subtle vices to be found, legal loopholes, and opportunities for just plain breaking the law.  So, what then?  Communism?  Socialism?  Communism apparently fails more often than not, and socialism is something we’ve been thoroughly programmed to believe is evil.  The answer, then, is something different..something you won’t want to accept, primarily ­due to your attachment to the American Dream.

An Analytic Argument Against Excessive Affluence

The conventional wisdom goes that, if one’s worked hard enough (or one is “good enough” or whatever) to make it rich, then one should be allowed to enjoy the full spoils of their deeds.  That’s nice and idealistic, but utilitarianly it just doesn’t work well.  Utilitarianism is the philosophy that what’s best overall is what creates the most benefit for the greatest number of people.  For example, it’s better for 90 people to each have 10, let’s say, “happy points” than for 20 people to each have 30 “happy points”, because 9010 > 2030.  To a certain degree, we can’t help but think utilitarianly.  For example, take a choice between spending an exorbitant amount of money (say 100’s of millions of dollars) to save one person’s life (someone you don’t know), and spending that same money on cleft lip surgery for thousands of infants in a third-world country.  Which would you choose?  Now instead of thinking only in terms of what’s “fair” for the individual (as if life has ever been even remotely fair), let’s start thinking about some things utilitarianly.  Let’s assume that there are two variables in society: 1) overall labor executed (we’ll call it Lt), and 2) the total amount of happiness derived from the fruits of this labor (we’ll call that Ht).  In theory, Lt and Ht would be more-or-less in direct proportion, right?  Because the more people work, the more people can benefit from the results of that work.  (Actually, there are extra factors that could make it non-linear, such as technological growth and the development of infrastructure, but that’s beside the point I’m making.)  Now enter the law of diminishing returns.  In economics, diminishing returns is what happens when the ratio between input and output is not linear, in that each additional unit of input yields less and less output.  This term technically applies to cost-effectiveness, but instead we’ll apply it to wealth vs. happiness: personal wealth as input, happiness as output.  So, why would the law of diminishing returns apply?  Having a place to live in is one thing..it keeps your head out of the rain.  Having a 32-room mansion is another.  You can’t use all of those rooms anyway; it’s more of a status symbol than anything else.  And what with all that extra space, I guess there’s nothing like feeling like a guest in your own home.  Having a can opener is one thing..it keeps you from having to tear your cans open with an ice pick.  Having a person open your cans for you instead (this is just a hypothetical) would provide only marginal benefits over having that initial can opener.  Having a car is pretty darned convenient, but having a BMW serves ­only to make others think, “damn, I so wish that guy weren’t better than I­!”  And so on and so forth.  This is what I mean about the principle of diminishing returns.  And all these novelties will probably wear off pretty quickly anyway.. True happiness comes from right livelihood (though in a society where money is required just to be able to live, a little bit of financial leverage helps also).

So because of diminishing returns, instead of Ht≈Lt, we now have Hi=Log Li, where “i” stands for the individual.  Our new totals are therefore:

math1, and math2

where I is the set of all individuals, W signifies monetary wealth, and Wt≈Lt (as a gross simplification for this specific discussion).  In this equation, Ht is maximal when fewest people have disproportionate amounts of wealth.  Or simply speaking, happiness is greatest when the principle of diminishing returns is least effected.  To put it in more practical terms: whatever the rich man uses, has to be built by someone.  Yeah, the conventional wisdom goes that he “earned” the right to purchase that labor, but let’s consider the following: which of these produces more ultimate benefit: $30,000,000 worth of man-hours (including materials mining, parts manufacturing, distribution, assemblage, coating and painting, and so on) going into a luxurious yacht, or that same or comparable number of man-hours going into, say, rehabilitating the unemployed?   Or how about that labor just going into making a million chairs, so that a million people have a place to sit, to pick a more typical example?  And that’s all to say nothing of the people currently living in third-world countries.  I believe the aphorism goes, “live simply so that others may simply live.”  But how would we effectuate this..?

The Wage Cap

Without attempting to microlegislate morality to unlimited detail (as is our current approach to the problem), we can practically annihilate the whole phenomenon of, and thereby all the deleterious effects of, profiteering, in one fell swoop, and without resorting to communism or socialism, so that we may retain the essential benefits afforded to us by a free-market economy.  The answer is to effect a universal wage cap on all earnings for everyone.  This means that, no matter who you are, anything you make or receive above say, $300,000 per year, is taxed.  (The number 300K has been chosen arbitrarily.  My friend says it’s too generous; I would personally leave it to a congressional vote.)  By that means, a healthy drive to support yourself — a healthy drive do what you love and do it well — is retained, while the corruption of excessive greed becomes moot, or at least becomes moot over and above the returns of $300K, which is enough to make ­a very “comfortable” living, and yet pales in comparison to what the most powerful men or women in a society make.  But you don’t much like this idea, I presume, and it’s probably due to the American Dream..  You want to live with the comfort of knowing that you, too, might someday “make it big”, and you’ll be damned if the government’s gonna stop you.

The American Dream

Studies have shown that as an economy becomes more wealthy — even up to 10 times more wealthy — the average happiness level of its citizens doesn’t increase; it doesn’t even budge.  Some studies even point to rising levels of depression, suicide, and myriad other indicators of unhappiness, even while the world is getting richer.  On a more individual scale, wealth does tend to correlate with happiness statistically, but the important thing to remember here is that correlation is not causation.  A couple of other attributes that are supposed to correlate with high wealth and happiness are dynamicism­ and individualism.  In order to account for the difference between 1) correspondence between national happiness levels and economic progress, and 2) correspondence between individuals’ happiness levels and their personal wealth, one might predictably speculate that it’s because people tend to evaluate their wealth and well-being by comparing themselves with others.  That’s a weak speculation though, because it implies that fulfillment derives from the perceived inferiority of others, or in other words, from the lack of success and happiness of those around one.  And that’s ridiculous.  Furthermore, the same people who have supported this concept also apparently believe that the reason wealth correlates with happiness is that higher affluence facilitates the things that people claim matter more than money, such as love and health; but that completely contradicts the other belief, unless one were to subscribe to the even more ridiculous notion that love is only joyous if you love more than your neighbor loves, and that personal health is only auspicious when your neighbors’ health is relatively poor.

Instead, it seems that what’s really going on here is that the lack of correlation in the economy-scale cases proves that the positive correlation in the individual-scale cases is not causative, on account of the fact that other possible influences that would affect both wealth levels and happiness levels would vary from individual to individual, but would likely not change just because the economy gets richer.  Said factors would likely include — wait for it —­ dynamicism and individualism.  Ding Ding Ding!

And anyway, the American Dream amounts to little more than American materialism (what else could it be?), to say nothing of selfism, as there is only so much wealth to go around, and any excess wealth is much more wisely spent on, say, sheltering the homeless or feeding the hungry anyway.

I liken chasing happiness through material gains with chasing the pot of gold at the end of a rainbow..

All money eventually ends up going to some good or service, somewhere.  Other than doing that it only changes hands.  So contrary to what some people may think, the bottom line to controlling money auspiciously is not the opposite of how much of it “goes to the government.”  As I’ve attempted to show, it’s how much of it is not spent on luxuries.

And besides, it was never totally your money anyway.  It’s exclusively per the infrastructure that is provided by the American government, and the American people, that you were able to make any money at all.  So instead of being worrying over about how much you’re taxed, I recommend being grateful for how much you’re not taxed.  “Ask not what your country can do for you; ask what you can do for your country.” — JFK (1917 – 1963)

The reason they call it the American Dream is because you have to be asleep to believe it.” — George Carlin (1937 – 2008)

“The day hunger disappears, the world will see the greatest spiritual explosion humanity has ever seen.” — Federico Garcia Lorca (1898 – 1936)

*** 2018 update ***

Earlier in this essay I took a study that ostensibly says shows that, on an individual scale, happiness corresponds to wealth, and picked it apart analytically. Since then I’ve seen better studies that show directly that wealth doesn’t imply happiness beyond a certain level of income—just enough that one doesn’t have to stress over money. One such study can be found here, at Time Magazine, which shows that wealth doesn’t increase day-to-day emotional happiness beyond an average income of merely $75,000, well below the $300K limit I proposed above.

Another thing I didn’t mention in this essay, which would fit into it nicely, is that with all the extra revenue garnered by taxing all income above $300K/year we might easily afford the Universal Wage Cap’s symmetrical sister, the Universal Basic Income. It’s abhorrent and the sign of a primitive society that we let hundreds of thousands of people wander the streets without a home begging for money to eat, while the rest of us live in our comfortable little bubbles.

Homelessness can strike anyone, not just those who are too lazy to work and not even just those whose psychological issues or physical disabilities prevent them from working, and having a safety net against this situation would put everyone at ease and make being a cog in the workforce and the whole issue of having enough money to pay the bills much less stressful for tens of millions of people. “A nation’s greatness is measured by how it treats its weakest members.” –not Mahatma Gandhi

Obviously, the amount of basic income should be high enough for a person to live in a home and have food, clothing, health care, heat, water, electricity, etc., but low enough that there’s still incentive for people to work, because if nobody works then nobody can pay for the Universal Basic Income to be realized.