Is Laissez-faire Capitalism Utopic?

I too like David Opdden’s ( :stuck_out_tongue: ) Purpose Clause, but I wonder how this would interact with other tools of statutory interpretation. Any ideas David Opdden?

(Fixed minor typo of member’s name - sNerd)

Parius, you’re killing me here. Now no one will get my joke.

[Edit: :slight_smile: :lol: :lol: Wouldn’t it be “Pdarius”?]

I too like David Opdden’s ( :slight_smile: ) Purpose Clause, but I wonder how this would interact with other tools of statutory interpretation. Any ideas David Opdden?

As the paramount principle of the (new) US Constitution, it would prevail over all other considerations. I don’t have a clear sense that we would need a lot of rules of construction if laws are restricted to protection from initiation of force (IOF). If a statute is intended to specify a particular prohibition of IOF but could interpreted (because of the wording) as applying to Jones’ non-IOF act, the Purpose Clause functions as an interpretive principle to say whether Jones’ act was criminal. Within the mix there ought to be a nod in Fuller’s direction that citizens ought to be able to figure out what the law requires, but clumsy wording should not be a license to kill. I welcome challenging cases. The examples that I’ve seen which are supposed to constitute challenges for plain-meaning interpretation would be unconstitutional laws given the Purpose Clause; maybe someone can come up with a clear example of how it would be good to retain some of the interpretive baggage.

I don’t know if this is correct, but I read it on this forum somewhere, but wasn’t income tax once illegal in the United States? Why do you have it now?

Groovenstein Today, 03:41 PM Post #17

Yes, there was a time when at least the federal government could not levy taxes on income. Why do we have it now? Because some people in the early 1900s availed themselves of the legal procedures for amending the Constitution. As far as I know, there was no usurpation, no bribery. The correct process was used. They just made a big philosophical mistake.

The income tax has always been Constitutional (legal) since the Founding Fathers set it up. The 16th amendment to the Constitution (whether actually ratified or not, I don’t believe it was) according to the Supreme Court did not afford any new taxing powers, but was to clarify things. Not that it did. The problem actually lies in the fact that people (the ones that actually try to find out) are not reading the tax laws properly because they are purposely being obscured. Most just go with the flow out of ignorance and /or apathy. Believe it or not, not every American worker or business is a federal taxpayer, but it is up to each individual to study thoroughly and find out. I have a link that will help each person with finding out what the LAW says http://www.losthorizons.com

Sorry for that diversion off the topic. :slight_smile:

It just seems to me that , like communism, this could turn out like a nice sounding idea that ends up horribly when put to practice because it’s wrong.

The difference as I see it is that communism is fundamentally flawed, whereas laissez is not. I don’t think an argument that laissez is utopic will hold… at least on this forum :slight_smile:

OTOH some people do make outrageous/misleading claims and represent them as facts (i.e. everyone will be “better off” under laissez faire, laissez faire will definitely result in a decrease in crime.) Such claims could be considered utopic, but they aren’t a part of actual laissez theory.

Yes, there was a time when at least the federal government could not levy taxes on income.

Where was this legally prohibited? You’re certainly more knowledgeable in this arena than me, but I was under the impression that Article 1, Section 8, Clause 1 of the constitution allowed an income tax. Well, it doesn’t specify an income tax specifically, it just says “taxation.” Was an income tax specifically outlawed somewhere else? I’ll admit that I haven’t the faintest idea what Section 9, Clause 4 even means, other than that it deals with taxation. Is that it?

OTOH some people do make outrageous/misleading claims and represent them as facts (i.e. everyone will be “better off” under laissez faire, laissez faire will definitely result in a decrease in crime.) Such claims could be considered utopic, but they aren’t a part of actual laissez theory.

Since when? Care to back that up?

Believe it or not, not every American worker or business is a federal taxpayer, but it is up to each individual to study thoroughly and find out. I have a link that will help each person with finding out what the LAW says http://www.losthorizons.com

I suggest a great deal of caution when trying to get out of paying taxes, ladies and gents. Talk to a professional, like a lawyer or something. Even if the law doesn’t make sense and you think you’ve found a way out, get a pro to make sure. The IRS can slam you. As I said in a post some time ago:

“By the way all, the IRS has some legal discussion with case law on anti-tax evasion schemes on this page. . . . Odds are, what you’re thinking has been tried before.”

Regarding my post about the federal government not laying taxes on income, that was a horrible editing job on my part. I meant that to refer to the Articles of Confederation, which as I recall left the taxing power solely in the hands of the States. I meant to leave that part out and address only amendment procedure. Sorry.

There have been threads before about how one can avoid taxes. The people I’ve seen selling such “services” and books are scammers much like the guys who play on people’s ideological views to try selling them $500/ounce gold at $600/ounce!

As for income tax, my understanding is that the (pre- XVI amendment) restriction was not about income tax as such. It was about “fairness” across the states. It did not have the intent of stopping an income-tax; however, it did have the effect of making a federal income-tax difficult and perhaps pointless. The pre-amendment objection to income tax was that if one viewed such a tax on a state by state basis, then some states would be taxed more (on a per capita basis) than others. This is what the amendment sought to change, thus enabling the Feds (in effect) to get more taxes from states where the citizens were richer.

Where was this legally prohibited? You’re certainly more knowledgeable in this arena than me, but I was under the impression that Article 1, Section 8, Clause 1 of the constitution allowed an income tax. Well, it doesn’t specify an income tax specifically, it just says “taxation.” Was an income tax specifically outlawed somewhere else? I’ll admit that I haven’t the faintest idea what Section 9, Clause 4 even means, other than that it deals with taxation. Is that it?

Clause 4 says “No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken”. The Uniformity Clause (Art. 1 Sect. 8 Clause 1) says, emphasis added “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States”. The controlling case here is Pollock v. Farmers’ Loan & Trust Company where a tax on income deriving from real estate was held unconstitutional, as being a direct tax. The tax is not in proportion to the census or representation (i.e. a few people in Rhode Island could be subject to much more of the tax than a vast number of people in Illinois, if more people in Rhode Island derive income from rent than do in Illinois). Such a tax also violates the requirement of uniformity. A senator from Nebaska, now dead (the senator, not Nebraska), proposed to remedy this leading to the 16th amendment which gave us our beloved IRS.

Since when? Care to back that up?

Which part?

IMO saying that everyone will be “better off” under laissez faire would generally be considered a utopic statement, if for no other reason than that an Objectivist’s definition of “better off” might be far different from a non-Objectivist’s.

Likewise, claims that laissez faire will result in, say, a decrease in crime or greater charity would also be utopic. Not saying that these claims wouldn’t be empirically true, just that they don’t automatically follow from laissez faire theory.

Nor IMO do they need to. I don’t think there is anything utopic in saying that laissez-faire provides the most freedom/opportunity of any governmental system. With this maximal opportunity/freedom comes greater chances for utopic (and some distopic) scenarios.

But these utopic predictions aren’t a necessary part of laissez theory (though the maximal opportunity/freedom likely is) AFAIK. If I’m wrong, feel free to correct me :smiley:

Which part?

Um… the part I highlighted in bold.

IMO saying that everyone will be “better off” under laissez faire would generally be considered a utopic statement,

What is a “utopic statement?” From context, it seems to mean “a statement which projects an idealized fantasy, rather than an accurate model of what the resulting reality would be.” Is that right?

if for no other reason than that an Objectivist’s definition of “better off” might be far different from a non-Objectivist’s.

In this context, a political/economic one, the Objectivist definition of “better off” is “more able to function and live as a man qua man.” Anyone with a different definition of “better off” would be attempting to live as a man qua something else.

My point? The Objectivist definition of “better off” is correct and other definitions are incorrect. Thus, other definitions of “better off” don’t merit consideration unless they can be objectively proven to be superior to man’s survival qua man.

Likewise, claims that laissez faire will result in, say, a decrease in crime or greater charity would also be utopic. Not saying that these claims wouldn’t be empirically true, just that they don’t automatically follow from laissez faire theory.

I don’t understand what the distinction you’re drawing is. The fact that crime will decrease and that people will have more money to spend on charity and less psychological factors which discourage them from spending on charity are most certainly part of Objectivist Laissez-Faire theory. (maybe you haven’t read these parts?)

But these utopic predictions aren’t a necessary part of laissez theory (though the maximal opportunity/freedom likely is) AFAIK. If I’m wrong, feel free to correct me :smiley:

That depends on what you mean by “included in the theory.” If you mean, will there automatically be less crime and more charity? No, of course not. It is by no means automatic. Marxists, for example, believe that economics are primary in driving human behavior. Objectivism certainly does not take this position.

Rather, it acknowledges that a non-laissez-faire society does provide incentives for crime and disincentives for charity and that removing these will tend to result in less crime and more charity. That’s not “utopic,” that’s a fact.

My point? The Objectivist definition of “better off” is correct and other definitions are incorrect. Thus, other definitions of “better off” don’t merit consideration unless they can be objectively proven to be superior to man’s survival qua man.

Granted, but my point remains that using such terms as “better off” is, if not utopic, pointless and proned to misinterpretation while two parties are using different definitions. *enter Need to establish LF on proper philosophical basis*

I don’t understand what the distinction you’re drawing is. The fact that crime will decrease and that people will have more money to spend on charity and less psychological factors which discourage them from spending on charity are most certainly part of Objectivist Laissez-Faire theory. (maybe you haven’t read these parts?)

The distinction I’m drawing is

1) that such statements are not fundamental to laissez-faire theory i.e. if all subsequent laissez-faire societies had more crime, or less charity, it would not affect either the value or the theory of laissez faire

2) that it would be utopic to say that any or all laissez-faire societies will have less crime, more charity, more wealth, etc. Utopic and unnecessary, as LF doesn’t need such empirical statistics to validate itself.

Rather, it acknowledges that a non-laissez-faire society does provide incentives for crime and disincentives for charity and that removing these will tend to result in less crime and more charity. That’s not “utopic,” that’s a fact.

Well, duh :smiley: There is obviously a difference in saying “LF has incentives for people to do X” and “LF will result in more X.” The first type could indeed be a fact and potentially a part of the theory. The second would not be a fact, but a utopic idea, and not a (significant?) part of the theory.

Granted, but my point remains that using such terms as “better off” is, if not utopic, pointless and proned to misinterpretation while two parties are using different definitions. *enter Need to establish LF on proper philosophical basis*

What are you saying? It is always important when talking to anyone to establish that your definitions and theirs match up. This is what makes communication possible. To say that someone else may have a flawed idea is not a justification for saying that I should not advocate my correct idea. Thus, I don’t agree with you that those things shouldn’t be a part of LFC theory, simply because some people might not value that which is objectively of value to man.

In other words, don’t pen your theories around wankers.

Now, as to the rest:

But it is accurate to say that, all other things being equal, a LFC society will have less crime and more charity than any other society. That is, if the only variable changed is LFC vs statism of whatever variety, then the LFC society will have less crime and more charity because it removes the incentives/disincentives for those things.

This is not to say that there aren’t other, more potent things which will change the level of crime or charity. The big one being the IDEAS of a society. :smiley:

And what do you mean by “utopic?” What is the definition of that term?

Also, to make a point about crime and social systems:

Take Communism, for instance. It outlaws many vital and necessary economic activities. It makes the necessities of life crimes. This encourages the development of a mafia or black market so that these activities can take place. The existence of a black market or mafia will in turn increase actual, initiation-of-force, crimes. This is just one of the many ways in which Communism encourages crime. (there are many, many other ways, I assure you)

Thus, by comparison, a LFC society will have less crime. Thus, the idea that LFC has less crime is in fact a viable part of LFC theory.

Does anyone else think a proper definition of Utopian or Utopic should have been included around the begining of the thread?

No problem. :smiley: Here’s mine: an idea is utopic, if it has two basic characteristics:

  1. It sounds good at first sight.

  2. When you think about it, you understand that it can’t be realized in an ideal manner, that means that problems arise that you didn’t think of in the beginning.

Hope that helps.

I think it was pretty clear what you meant by ‘Utopian’: moral but impractical (a.k.a. sounds cool, but it won’t work).

Could you concretize this? Could you give a couple of hypothetical examples of the types of corruption that can creep into a Capitalist system. For each example, I would suggest the following material:

  1. The example
  2. Your thoughts on why this crept in. (i.e. what are the incentives to the actors)
  3. Your thoughts on why this type of corruption is less likely in a mixed-economy or socialist system

I’m not sure what the point of the thread is. Are you suggesting that, since a LFC society is likely to become corrupt eventually, we should simply skip the middle-man and work for a corrupt society to begin with?

Given that corruption springs from the ability to use pull in order to achieve one’s ends and that a LFC society, is the one in which pull is least likely to achieve results, it seems that a LFC society is the one least likely to become corrupt as has been repeated above.

@softwareNerd:

I wondered whether it is possible for LFC to persist.

My example was that a rich fellow buys one or more government officials to be granted special rights. They then change the legal system so that LFC is dead. The government official does this because he gets money. The rich fellow because he wants to protect his profits with non-market ways. (For example a railway company in the face of emerging airway travel)

@colin:

This is less likely in LFC, sure. But is it unlikely enough? That is my question. It has to be tried, sure. But I am not so sure whether this is going to persist.

Say we had the glorious day when laissez-faire capitalism was established. Now, about 10 years later we see that the system once envisioned as granting everyone the same rights now offers special rights to certain companies due to corruption. That’s the problem I see. That the legal system will be corrupted and bought and we end up having real exploitation.

Sounds like you’re recounting the history of the United States at the beginning of the twentieth century.

What many Objectivists still do not understand is that “America’s persecuted minority, big business,” actually led the charge of the progressive movement, a movement which was profoundly conservative. (See Gabriel Kolko’s groundbreaking work, “The Triumph of Conservatism”.) The laissez-faire philosophy of noninterventionism and free markets is a product of the (classical) liberal tradition. Laissez-faire liberalism is still rejected out of hand and aggressively opposed by the interventionist right, i.e., conservatives and socialists.

In a laissez-faire society, the aim of government regulation would be the opposite of its aim today, viz., instead of shielding the established monopoly interests of large corporations from the “destructive” market forces of free competition, government regulation would shield free competition from the destructive monopoly interests of large corporations.

The “have’s” do not have any more reason to support the institution of private ownership of the means of production than do the “have-not’s.” The notion that, if only capitalism is preserved, the propertied classes could remain forever in possession of their wealth stems from a misunderstanding of the nature of the capitalist economy, in which property is continually being shifted from the less efficient to the more efficient businessman. In a capitalist society one can hold on to one’s fortune only if one perpetually acquires it anew by investing it wisely. The rich, who are already in possession of wealth, have no special reason to desire the preservation of a system of unhampered competition open to all; particularly if they did not themselves earn their fortune, but inherited it, they have more to fear than to hope from competition. They do have a special interest in interventionism, which always has a tendency to preserve the existing division of wealth among those in possession of it.

~ Ludwig von Mises, Liberalism

Thanks for the link to the book. And thanks for explaining my point better than I did. :smiley: