Taxing talent, taxing height, taxing beauty

I'm pretty talented and reasonably tall. However, I'm not beautiful. Now that the debate over taxing good fortune is being broadened out hopefully my biases should start to be smoothed over.

Chris Dillow posted recently on a beauty tax, asking whether it was any more ridiculous than a tax on the rich. He supports a tax on the rich, in part, because of moral luck. Because you are lucky to be born talented or hard-working. Exactly the same logic can be applied to a tax on beauty, height, or much anything else.

Greg Mankiw applied (PDF) the logic of optimal taxation to height and found that it would imply significantly higher taxes for the tall. I think that the conclusion he takes from being able to draw this inference also applies to the argument Dillow makes:

The Times also quotes a critic:

Peter Diamond, an economist at M.I.T., says the paper’s basic mistake is the notion “that if you can draw a silly inference from an approach, then that discredits a model.” He comments: “I think there is probably no model that passes that test."

I wonder what Peter's alternative approach is. If economic theorists are allowed to embrace inferences from a model that they like and reject those that they consider "silly," what is the point of theory? That discretion gives the theorist the freedom to always confirm his priors. The economist ends up using theory like a drunk uses a light post--for support rather than illumination.

My Philosophy

First, let's clear up terms. When I say my philosophy I mean that spectrum of beliefs that constitute my vision of the good life rather than my political beliefs about the ordering of society, although there is almost certainly some interaction between the two. Political philosophy is important but I'll use the generic 'philosophy' for more internal thought for now. It'll make things easier.

I rarely write about my philosophy and only discuss it in earnest occasionally. By contrast, it is both my job, which I love, and my hobby to expound my political beliefs. I think this might partly be because my political views are well within the conservative mainstream whereas my philosophy is, as far as I know, absolutely unique. I follow Chris Dillow's advice and hold my most radical beliefs most lightly. There's more to it than that though. I think that if more people held my political beliefs the world would be a better place. I'm not so sure about my philosophy. What do you think?

God

I'd rather not know. I don't see much evidence for a God but I also don't see much evidence that there is no God. Dawkins' spaghetti monster analogy is misleading. In the absence of evidence to settle a question - whether it is the question of the existence of a spaghetti monster or a God - we resort to Occam's Razor and atheism is the result of Dawkins' answer to the question "what is the simplest explanation of the world around us". However, it is far from the only plausible answer. I don't feel the existence of a deity so don't consider myself to believe in God but I wouldn't rule it out as an atheist should.

However, I'm not quite an agnostic. I don't just not know whether there is a God. I don't want to know. In my present state of ignorance I can see two possibilities:

1) There is a God, but he wants me to think for myself. If God really wanted me to follow received wisdom then I really think he would have left a more thorough guide than a single - now rather opaque - book and a lot of often deeply flawed preachers. The Bible is an impressive work of literature but if you compare the work He has clearly put into that with the real marvel - the human brain and mind - it pales.

The human brain is the most complex arrangement of matter in the known universe and the mind an unparalled inspiration. As such, I think that if there is a God he hasn't given me my own moral judgement as some kind of afterthought or as a challenge to be overcome in order to follow true, received wisdom. I think God would want me to think for myself rather than follow a proscribed set of Commandments. I cannot imagine a God who was truly great, worth following who wanted me to do the right thing for fear of Hell or in the hope of being rewarded with Heaven.

If I knew that He existed I might be tempted to do the right or wrong thing in order to please him. Now, suppose he is wrong? Should I do the right thing because I'm afraid of Hell? Cowardice. Should I do the right thing in order to get into Heaven? I'm not opposed to the profit motive but I'm not going to trade my fundamental beliefs.

I think I'm best off not knowing.

2) There isn't a God. I'm left with the same question. How should I construct my moral code? The question of God's existence doesn't seem morally important.

How should I construct my moral code?

In this situation the important question is whether you wish to believe in nothing and either try to construct a rational belief system - unfortunately these can too often be a house of cards - give up on meaning, seek comfort and risk the sad fate of the last man or choose, for yourself, your beliefs without the crutch of deity or logic. I think the final one of those three options is the best. Rationality requires premises to work from and a life without meaning is a sad one.

"If we have our own why in life, we shall get along with almost any how"

- Friedrich Nietzsche, Twilight of the Idols

I need to work out what I value, my why.

What do I value?

The human mind. Mine and others'. Its creativity, ability to question, learn and relate. The mind is truly amazing. Exploring such potential, and creating a space for others to do the same, is great and requires no external justification.

If I have lived a life where I have seen where my mind can take me; had a full experience of the minds of others - high creativity from afar or good conversation up close; and defended a society in which the free expression and development of the product of the mind is not just permitted but encouraged that seems eminently worthwhile. I don't need more meaning than that.

The Stoics

"You desire to LIVE "according to Nature"? Oh, you noble Stoics, what fraud of words! Imagine to yourselves a being like Nature, boundlessly extravagant, boundlessly indifferent, without purpose or consideration, without pity or justice, at once fruitful and barren and uncertain: imagine to yourselves INDIFFERENCE as a power--how COULD you live in accordance with such indifference? To live--is not that just endeavouring to be otherwise than this Nature? Is not living valuing, preferring, being unjust, being limited, endeavouring to be different?"

- Friedrich Nietzsche, Beyond Good and Evil

Nietzsche wasn't terribly enamoured of the Stoics. For good reason: His philosophy is all purpose and drive; will. Theirs is a reconciling to nature, indifference. However, just as in political philosophy where liberalism and conservatism's alliance on the Right allows both to escape their weaknesses I see a similar, necessary, combination that makes both Stoicism and Nietzsche's philosophy functional.

I take from Nietzsche the essential challenge of the good life - to compose and live by a system of values that are my own and I can reconcile myself to (eternal recurrence is one test). However, how one lives up to that challenge is a question left largely unanswered by Nietzsche. How can a person resist the temptations of an easy, rather than good, life? How can you fight off the temptation to obsess about the qualities or opinions of others?

I can’t think of better guides than the Stoics. Here are a few samples, all from one – quite short – book:

"At dawn, when you are having trouble getting out of bed, tell yourself: "I have to go to work - as a human being. What do I have to complain of, if I'm going to do what I was born for - the things I was brought into the world to do? Or is this what I was created for? To huddle under the blankets and stay warm?

- But it's nicer here...

So you were born to feel "nice"? Instead of doing things and experiencing them?"

“When you run up against someone else’s shamelessness, ask yourself this: Is a world without shamelessness possible?

No. Then don’t ask the impossible. There have to be shameless people in the world. This is one of them.

The same for someone vicious or untrustworthy, or with any other defect. Remembering that the whole class has to exist will make you more tolerant of its members.”

“Remember: you shouldn’t be surprised when a fig tree produces figs, nor the world what it produces. A good doctor isn’t surprised when his patients have fevers, or a helmsman when the wind blows against him.”

“Remember that to change your mind and to accept correction are free acts too. The action is yours, based on your own will, your own decision – and your own mind.”

"If you do the job in a principled way, with diligence, energy and patience, if you keep yourself free of distractions, and keep the spirit inside you undamaged, as if you might have to give it back at any moment -

If you can embrace this without fear or expectation - can find fulfilment in what you're doing now, as Nature intended, and in superhuman truthfulness (every word, every utterance) - then your life will be happy.

No one can prevent that."

– Marcus Aurelius, Meditations

In my own way I have come to Nietzsche’s challenge – to build my own system of values from premises I am aware of and happy with. The teachings of the Stoics have not taught me indifference in general but, rather, indifference to those aspects of life that are – in the end – trivial but are always easy to obsess over.

Of course, all this is a vision – life is imperfect and I am no saint – but it matters nonetheless.

His Dark Materials

I haven't read Pullman's "His Dark Materials". This, brilliant, article makes me rather disinclined to change the situation, or go and see the new film:

"You see, the problem with the message method of storytelling is that you have to stop the story to preach the message. The STORY here required that God be an evil Tyrant, as evil (at least) as Sauron the Great, as cunning as Fu Manchu, as mad as Emperor Nero. The story required an all-powerful Goliath to be fought and overthrown by the bravery of a boy with a knife. The MESSAGE required that the Christian God be depicted, not merely as a tyrant, but as a false and shallow and idiotic creature: the Wizard of Oz, nothing more than a puppet-head and a loud voice controlled by a scared little carnival man behind the curtain.

So the story required that the god-killer be at least as impressive as Milton's Lucifer, who, no matter his flaws, certainly has the dramatic stature and the majesty to attempt deicide. Jack the Giant-killer is an impressive character precisely because Giants are big and impressive. But the message requires that God be not merely unimpressive, but despicable: he cannot be an honorable foe, or even a strong one.

Mr. Pullman started with a story, a Paradise Lost version where Lucifer was the good guy facing impossible odds by defying an unconquerable god; but he ended with a message, where there are no odds because there is no god, merely a drooling idiot. So all plot logic flies out the window: the drooling idiot cannot be and could not be responsible for Original Sin or the Flood of Noah, or the Spanish Inquisition, or whatever crimes God should have been accused of, because he cannot do anything, any more than the puppet head of the Wizard of Oz.

The story required that Asrael be guilty of terrible experiments on children, but that his crimes be necessary in order to discover the secret of the dust and undo the evils done by the Christian God, which have to be much greater than any merely human crime. But the message required that the human condition be merely materialistic, and that there could be no God, and therefore no crimes.

A good story would have shown all the innocent people from Ethiopia, Australia and China tormented in the fires of hell, merely for the whimsical violation of the Christian rule that they are sons of Adam not baptized by a messiah of whom they never could have heard. The writer would only need to show us one ghost, dead of sudden disease as a child one hour before his baptism, being crushed forever between the red-hot plates of a coffin of heated iron spikes, while crying for his mommy, in order to arouse the proper indignation. The crimes of God have to be, for such a story, cosmic crimes. Jehovah has to be shown as a being powerful enough to stop the wheel of reincarnation, which otherwise would have eventually saved all living spirits through many lives of learning and growing, in order to establish an arbitrary paradise and an arbitrary hell. The story of that crime ends when Christianity is overthrown, and the reincarnation cycle which will one day save all people from all suffering is reinstated. (Not to spoil the surprise ending, but this is not so far from the idea that Ursula K. LeGuin handled with such artistic adroitness in THE OTHER WIND, a sequel to her "Earthsea" trilogy.)

But the message cannot be Taoist or Buddhist or even New Age Spiritualism. Mr. Pullman's message is atheist. He cannot have a reincarnation be shown as a better alternative to hellfire, because he does not believe in reincarnation any more than he believes in hellfire. In order for his message to prosper, materialism has to be the order of the day. All the ghosts of the lordly dead, the honored ancestors to whom the pagan shrines are adorned, also have to be false. The ghosts in a Pullman fantasy world have to be bored, and dissolving back into matter has to be the only ecologically sound proposition. It is a boring and undramatic resolution, unconvincing to the point of idiocy, but it is the only one his message would allow.

The message did not allow Mr. Pullman even to list crimes of which the Christian God was accused. If there was a scene where this was done, I missed it. If Jehovah in the story had killed a child or kicked a bunny, I as the reader would have relished the scene of an overdue vengeance being visited on him: the Vengeance of Prometheus for the injustices of Heaven!"

Compare this to the picture of Tolkien's work built up here by Spengler in a superb review of Children of Hurin. I don't agree with the philosophy Tolkein is advancing - I actually think the West is missing pagan heroism and I'm not a Christian - but it has none of the narrow mindedness of the simplistic "there's no God, stupid!" atheism that Pullman appears to be advocating. Tolkein's work has far more depth to it which makes the fact that Pullman "once dismissed the Lord of the Rings trilogy as an "infantile work" primarily concerned with "maps and plans and languages and codes" rather pathetic.

Google Reader

I set up Google Reader last night and am finding it pretty useful. I now have both my favourites in the wider 'sphere and all of Blogpower feeding to it. Should broaden my reading quite nicely as I now give at least a quick read to everything posted.

"I love thee like optical zoom, all others are mere digital"

At 23 I'm still pretty young. However, I already find the modern world's soullessness alarming at times.

The Coase Theorem and Green Taxes

The Coase Theorem explains - in terms that seem ridiculous until you really understand it, but painfully simple afterwards - why externalities don't inherently require state action to ensure an optimal supply. It explains why there is no inherent need to subsidise every public good, tax every negative externality. Too many nasty looking bikers? Pay them to leave. Trains setting your field on fire? Pay them to reroute somewhere else or stop running. Your child is going to have an abortion and you - as parent - don't like it? Bribe them, perhaps with offers of money for university. That final example is actually used in an academic discussion of the theorem, behind the academic firewall I'm afraid.

Of course, this only really works in the fictional land, populated by the imaginations of economists, where there are no transaction costs. In reality it would be a deeply unpleasant experience to negotiate over a pregnancy. All clubbing together and paying our 0.0000001 pence to a factory owner to attach a sulphur dioxide scrubber to his chimney just isn't practicable. We'd need to pay too much for it to be economical just to post him our tiny, fictional coins.

Coase wasn't ignoring this. However, if the problem is not an inherent market failure but, instead, a product of transaction costs making it impossible for society to come to a settlement through the market then negative externalities pose a fundamentally different challenge to the policy maker. After all, while transaction costs might make a market solution inefficient they are just as likely to make a mess of solutions relying upon state power. The case for Pigovian taxation is fundamentally weak.

Jim Manzi does a brilliant job of explaining how this relates to carbon taxes. Transaction costs make the obvious private sector solution to an alledged oversupply of carbon dioxide emissions, pay emitters to stop, impractical. However, there are also massive transaction costs to carbon taxes. He points to three important sources of transaction costs associated with a carbon tax. I'll paraphrase:

1. State intervention into major industries is extremely vulnerable to interest group lobbying. Oil and electricity generation companies have done quite well out of green politics so far. That isn't a freak accident. It's the result of the Logic of Collective Action: highly motivated minorities can exploit the use of state power even in a well-constructed democracy. This diversion of corporate talent to unproductive rent-seeking is wasteful in many ways.

2. We just don't have the necessary information to make an informed intervention in the market. We need to know what level to set the carbon tax. That should be the social cost but unfortunately estimates of social cost vary widely. If we get it wrong our policies will be too draconian or too lax.

3. Politicians don't use Pigovian taxes to correct for externalities but to raise revenue. They'll keep doing this and we'll wind up with higher taxes and the problems often associated with a high-tax economy.

Read Manzi's original post for a more scholarly explanation of each point.

I like to think that my report The Case Against Further Green Taxes is a part of the Coasean case against them. While Manzi can illustrate in theory the transaction costs associated with green policies you can see those problems in practice in Britain today. Corporate subsidy and green non-jobs wasting taxpayers' money, carbon taxes set too high and imposing an unpleasant, not to mention regressive, burden on ordinary taxpayers wanting to do socially useful things like get to work or move goods. The proper comparison to a free-market economy which emits too much carbon thanks to missing markets isn't an angelic, perfect government intervention but one with its own, often even more pernicious, flaws.

A practical example of the Coase Theorem

The Coase Theorem is the idea that a legal system would be unnecessary for the regulation of externalities in a world without transaction costs. A classic example is a train line that produces sparks that set off fires and destroy farmers' crops. If the damage to the farmer is worth more than the economic benefits to the train company the farmers will pay the train company not to run their trains. A rather odd example, from the very early days of this blog, is my consumption of Subway sandwiches.

Sweden has provided another example, via The Croydonian:

"A municipality in eastern Sweden paid a biker gang 200,000 kronor to move away from the region."

The national government could have intervened and used state power to get rid of the biker gang but it wasn't necessary. The socially optimal (presuming that the municipalities leaders are properly representing their constituents) solution won out without outside legal intervention. The bikers didn't want to stay more than the locals wanted them gone. The locals made it worth their while to leave.

The MCB and Holocaust Memorial Day

What's strange about Inayat Bunglawala's article supporting the decision of the Muslim Council of Britain to ends its boycott of Holocaust Memorial Day is that it reads like a case for the boycott:

"I have to admit that I have never been overly convinced as to the usefulness of such memorial events. The very first HMD event in the UK in 2001 was inaugurated by the then prime minister, Tony Blair. He looked typically sombre and determined during the televised occasion. "Never again," the world had said after the Nazi holocaust. But our Tony went on just two years later to give his active support to the criminal invasion of Iraq in which the dead now number in their hundreds of thousands. Never again, eh?"

Equating the Holocaust and the War in Iraq, eh?

This is almost too absurd for words. Anyone to whom the difference between a non-genocidal war fought against a brutal dictator which goes wrong and leads to substantial civilian casualties and an attempt to exterminate a race which leads to radically more deaths (regardless of whether you buy the Lancet's estimate of deaths in Iraq) isn't immediately apparent has no moral bearings at all.

"The British Muslim community was divided right from the outset over the issue of attending HMD. Some argued that the HMD would be misused by Zionists to try and garner support for the policies of the Israeli state."

Paranoia about 'Zionists' leading you to see a conspiracy in a memorial to an unparalleled historical tragedy? That's right - you're a crackpot.

"Others said that if there was to be a memorial day then it should be a more inclusive genocide memorial day. After all, had we not recently witnessed genocide in Rwanda and also of Bosnian Muslims in Srebrenica?"

This is ludicrous. It's a memorial to the Holocaust. It makes no claim to represent all genocides. There are 364 other days in the year on which one could hold a Srebrenica or Rwanda memorial day. Those tragedies have nothing to do with whether the Holocaust deserves a memorial of its own.

"During the Satanic Verses affair, the UK Muslim philosopher Shabbir Akhtar had warned that the next time we saw gas chambers again in Europe, it would be European Muslims that would be inside them."

a) What does this have to do with the matter at hand?

b) During the Satanic Verses affair? When Muslims were breaking the law calling for the death of someone who did no more than write a controverial book? When they weren't even punished for that crime, let alone persecuted in any way?

"Some others said that the reasons for non-attendance would not be properly understood and that it would cause unnecessary hurt to many in the UK Jewish community."

Yeah, they might think that it is putting petty political point scoring over a dignified remembrance of the victims of genocide. Or, they might think that those reasons are just a thin veil for community leaders seeking to appeal to anti-semitism.

"The MCB, with its several hundred affiliates, reflected those divisions. The only national poll that was carried out on this issue - it was commissioned last year by the Jewish Chronicle - found that 52% of British Muslims supported the MCB's hitherto position of non-attendance."

That's what worries me. That it isn't just a nasty minority and 52 per cent of British Muslims are willing take such an ugly stance. I really hope that they can be brought to see reason.

"So, this weekend's decision to attend will certainly have its detractors among British Muslims. Vikram Dodd in today's edition of the Guardian notes that some of the MCB's affiliates may even leave over this issue. On the whole, however, I believe the MCB made the right decision and it sends a welcome and positive signal about its commitment to a shared future in a multi-faith Europe."

This is the conclusion I'd have hoped for. It seems sad, though, that the only argument supporting it is that the boycott was a PR disaster. Bunglawala hasn't repudiated any of the logic that led the MCB to its rightly discrediting position.