From: Tom Zerucha <root@deimos.ceddec.com>
Date: Tue, 26 Nov 1996 08:47:39 -0800 (PST)
To: cypherpunks@toad.com
Subject: Re: wealth and property rights
In-Reply-To: <MAPI.Id.0016.006f6e67616c74203030303730303037@MAPI.to.RFC822>
Message-ID: <Pine.LNX.3.95.961126110818.4290A-100000@deimos.ceddec.com>
MIME-Version: 1.0
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Some basic points on the thread

1. For wealth to be "handed down", it must be earned or confiscated first.
Mao's widow lived quite well during Mao's life and for a while after his
death.  Also, if there was no direct way to pass wealth on to offspring,
it would be consumed or destroyed by the generation which created it.  You
may not agree with the choice of the original Kennedys and Rockefellers,
but limiting that choice is not without consequence - the wealth will
still not end up where you want it, and a great amount will be left
uncreated.

2. In a socialist society wealth is confiscated at gunpoint.  In a
capitalist society, I have to provide something that you want more than
your wealth in order to obtain it.  Bill Gates has lots of money because
people buy Windows.  They can have Linux for the price of a download or
cheap CD.  Are the people who choose to give $100 to Bill Gates evil?  Why
doesn't Bill Gates give me a copy of Windows 95 if I give $100 to Mother
Theresa?  Is Bill Gates evil?  If Bill Gates received nothing for Windows,
how would he pay his employees and manufacturers who develop and package
it, or should they be content to be charitable slaves and starve as long
as Mother Theresa gets the $100?  Linux is "better" and free.  Maybe we
should dissolve Microsoft and take all it's wealth and give it to the
poor and tell everyone to use Linux and stop wasting their wealth.  Of
course people might object, so we need to bring in the guns and tanks,
just like Stalin needed to do to the uncharitable Ukranians.

3. If wealth isn't being transferred, it is most likely because Government
has created a monopoly or oligopoly.  If I have a better idea for a car, I
cannot simply just build one, since any modification to the powertrain has
to be certified by the EPA.  So if I could get 2 Miles/gallon better
mileage without a change in emissions for a $50 modification, I still have
to spend over $1 Million satisfying the bureaucracy and generating no
profit.  The existing auto industries have no incentive to change this
because these are sunk costs, and they can keep their oligopoly.

4. When you say wealth isn't being transferred, it is also generally
untrue.  While someone may be controlling it, their control is usually not
to leave it under a matress (which would make my wealth comparatively more
valuable).  Microsoft has lots of money because the foundations and Nth
generation wealthy are putting the funds into stocks and bonds of
corporations like Microsoft and government debt.  The companies are
renting the wealth of others.  They wouldn't stay wealthy long if all they
engaged in was consumption.  In this case, economies of scale work with
investment - it takes a fixed amount of analysis to guarantee a greater
profit, so $100 will not be invested as efficiently as $100 Million.

5. Government is the least efficient means of resolving the problem.  The
current welfare system is such that simply transferring the budget of all
the programs would make every poor person middle class.  Confiscating the
wealth of the rich would likely be used employ more people generating
endless debates about who to give it to, than actual beneficiaries.  You
can see this with some class action cases (e.g. asbestos) where the
lawyers split up big fees, and the injured plaintiffs get only a token
amount.

6. No one has given any reason why the dollar following the 10-millionth
has less claim of ownership than the first 10-million.  You can dislike
the situation, but I would like to hear a *consistent* theory of property
rights that holds a sliding scale of claim based on volume.  Does the
grocer with 200 tomatoes need to give away 20 because a store down the
street has only 180?  What if the situation is reversed the next day?

tz@execpc.com
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