Promoting Innovation in the Twenty-First Century

In my last post, I discussed how the nature of innovation in our time raises questions for Thomas Piketty’s forecast of increasing inequality in his new book, Capital in the Twenty-First Century. In this post, I argue that his policy proposals also leave out consideration of innovation and thus risk great social harm.

Piketty does not recognize how crucial extraordinary individuals are to innovation and distribution. As Robert Solow notes in his review. Piketty seems skeptical that today’s highly paid “supermanagers” add much value for their very high salaries.  Solow endorses this skepticism, agreeing that agency costs are responsible for these high salaries. On this theory, boards of public companies are cozy with these managers who often appoint them to their positions and the result is sky high compensation. But if agency costs were the cause, we should observe closely held companies paying supermanagers less, but as Greg Mankiw points out, they do not.

A much better explanation is that innovations in the structure of corporations– faster telecommunications and the availability of data that represent the details of companies’ operations—have enabled managers at the very top to make a huge difference throughout their organization. A business today is the shadow of one or a few individuals who can take the key decisions. As a result, there is a naturally high  return to superstar executives.

The importance of the modern executive to productivity and innovation raises question about Piketty’s proposal of high wealth taxes. Assuming that today’s supermanargers are in part motivated by making a better life for their children and grandchildren—a a pretty safe assumption—high wealth taxes would deter them from the often extraordinary efforts they make. The result would be fewer innovations and perhaps more importantly less rapid distribution of innovations. If, as I have suggested, innovations in the twenty-first century, being essentially ideas about how to arrange our material universe, redound rapidly to the betterment of all, the long term result will be less equality of experience between the rich and everyone else.

My recommendations for increasing equality would be to spur innovation. Permit more immigration of engineers and scientists into the United States where they can collaborate easily with other great engineers and scientists. Reduce regulation to make it easier for new companies to challenge incumbents. As commentators to my previous post correctly observed , we need a more open access society that prevents insiders from taking advantage of government to keep outsiders out, even if outsiders have better ideas than the insiders.  Improve education through increased competition and so create more human capital for more innovation. Everyone will gain in the long run from the resulting boom in applied human ingenuity.

John O. McGinnis is the George C. Dix Professor in Constitutional Law at Northwestern University. His recent book, Accelerating Democracy was published by Princeton University Press in 2012. McGinnis is also the co-author with Mike Rappaport of Originalism and the Good Constitution published by Harvard University Press in 2013 . He is a graduate of Harvard College, Balliol College, Oxford, and Harvard Law School. He has published in leading law reviews, including the Harvard, Chicago, and Stanford Law Reviews and the Yale Law Journal, and in journals of opinion, including National Affairs and National Review.

About the Author

Comments

  1. R Richard Schweitzer says

    NBER Working Paper 12795 by North, Wallis & Weingast (December 2006) offers insights into “Open Access” and the impacts of its existence in the development of social orders, together with comparisons of social orders lacking, or constricting, Open Access.

    That conceptual framework is carried forward in the same authors’ “Violence and Social Orders” (2013).

  2. nobody.really says

    First, let me acknowledge the merits of McGinnis’s main thesis: The typical person might benefit both from wealth redistribution AND the economic growth of society (including growth driven by innovation). If there is a trade-off between these two factors, policy makers should be mindful to make that trade-off optimally.

    That said — is there a labor economist in the house?

    A much better explanation is that innovations in the structure of corporations – faster telecommunications and the availability of data that represent the details of companies’ operations—have enabled managers at the very top to make a huge difference throughout their organization. A business today is the shadow of one or a few individuals who can take the key decisions. As a result, there is a naturally high return to superstar executives.

    Almost. To rationalize high returns to superstar executives, we need to postulate 1) that they actually produce enough to justify their compensation, and 2) they are sufficient scarce that they can keep the firm from appropriating the profits of their labor. After all, today’s average US worker is vastly more productive than yesterday’s – yet she extracts a much smaller share of her productivity in compensation, because today’s firms can produce more with less labor, and because labor unions no longer serve to artificially constrict the labor supply in order to reallocate the benefits of productivity to labor. Relative to yesterday, labor just isn’t very scarce.

    Assuming that today’s supermanargers are in part motivated by making a better life for their children and grandchildren—a pretty safe assumption—high wealth taxes would deter them from the often extraordinary efforts they make.

    Fair enough, it might. The same could be said of all workers and all marginal taxes. After all, people have no incentive to pay Kobe Bryant even one cent more than necessary in order to induce him to work for them – ergo it follows that if we raise taxes on him by even one cent on his $61.9 million earnings, he’d quit. To draw any other conclusion would be to impugn the efficiency of the market, right?

    Alternatively, we could go back to Micro 101: The price mechanism serves as an incentive to spur production – and also as a mechanism for allocating resources. Where resources are scarce, the allocation function can outstrip the production function. Thus, Bryant’s $61.9 million compensation isn’t required to get him to produce; it’s required to determine for WHOM he will produce. Bryant is scarce, and the price mechanism determines how his talents get allocated.
    And the neat thing about this dual role of the price mechanism: Where elasticity of supply is small, suppliers simply earn rents. Thus, you can tax suppliers without deadweight social losses. Think about is: How many people with the potential to do what Kobe Bryant is doing are instead sitting on their hands because the compensation package just isn’t sufficient to motivate them? I suspect none. And what share of Bryant’s compensation could be taxed away before he’d quit? Don’t know – but I suspect quite a bit.

    I suspect the same is true of our supermanagers: They command high salaries not because they’d quit producing otherwise, but merely as an artifact of the competition for their services. Thus we could tax them quite a bit before they’d quit.

    Yes, supermanagers work hard – but so what? “Hard work” is just a fable we tell ourselves to rationalize our wealth. As an explanatory variable for high compensation, “hard work” explains 1500% of the data; if hard work were the driver, farm laborers and new moms would be gajillionaires.

    That said, there’s one proviso – but it cuts both directions: The backward-bending labor supply curve. If you Google “backward-bending,” you will find a lot of graphic images – but mostly of actual graphs, plus a lot of fully clothed, not-very-nubile economists discussing the labor supply. Pity.

    See, labor has a curious feature of being both a consumer and a producer. As laborers grow richer, they consume more of all normal goods – including leisure. Thus, at some parts of the labor supply curve we observe the normal dynamics of supply curves: the higher the price, the greater the supply. But beyond a certain point you get the OPPOSITE effect: the more you pay, the LESS people work. At some point, Bryant will realize that he’s a gajillionaire and the time he spends hauling his ass up and down the court is cutting into the time he has for sitting on his yacht drinking liquid gold. And he’ll quit.

    Thus, McGinnis may yet be right about the consequence of a wealth tax: Supermanagers, having enjoyed years of high compensation, may be on the verge of increasing their consumption of leisure. A tax increase might trigger a one-time loss of productivity as they quit or cut back.

    But the flip side of the argument arguably holds with greater force: If you want to induce people to keep working, you need to tax away the wealth that might otherwise prompt them to consume more leisure. So the one-time loss of productivity at the top may be offset by an ongoing productivity gain from all the other people – including all future generations of supermanagers — who would have retired to their yachts but didn’t because they couldn’t yet afford yachts. That’s the lesson of the backward-bending labor supply curve!

    • R Richard Schweitzer says

      I wonder if you would agree that taxation is the tool to provide revenues for the functions of governments. In fact, it may be the *only* tool for that purpose; but we need not debate that now.

      If we attempt to adapt the use of a tool that is fitting (sometimes with great effort) for a specific purpose to some other purpose is there not danger of damage or malformation to either the tool or the subject of its use, or both?

      One would not attempt to repair a watch or other fine mechanism with an adjustable hex wrench (no matter how small the adaptation). Nor would one use the finely adjusted edge of the watchmaker’s screwset to pry heavy pieces apart.

      It has become one of the great perversions of political economy to look upon taxation as a multipurpose tool for all sorts of social objectives; for most of which that tool is not only inappropriate, but damaging both to itself, and often to the purpose for which it is misapplied, as well as for its uses in its intended purpose.

      • nobody.really says

        Piketty argues for progressive taxation to reallocate the profits of modernity down the income scale. I am not aware that Piketty argues to use the tax to alter behavior – other than reducing the ability of the rich to manipulate the political system, I guess.

        It is McGinnis, not Piketty, who introduced the idea of taxes influencing behavior. Specifically, McGinnis suggests that Piketty is overlooking the fact that the tax might discourage productive behavior.

        I, in turn, identify arguments showing how taxation might both discourage and encourage productive behavior.

        None of this, however, addresses Schweitzer’s teleological question: Should government tax people for the purpose of influencing their behavior?

        1. My first reaction is to step back from the question: The question of whether taxation influences behavior is distinct from whether we might like it to; whether government should act with knowledge about how to wrongfully control people; or whether it’s better for government to adopt policies that influence people, but to remain innocent of and ignorant about the consequences of those policies.

        Suffice it to say that whenever someone argues that taxation might influence behavior inadvertently, that opens the door to consideration of all the ways we might influence behavior via taxation.

        2. I like equal protection of the laws; I regard it as necessary (if not sufficient) to the defense of liberty within a democracy. And arguably the tax system I’ve suggested looks a lot like unequal protection of the laws: To really make it work, we’d need to engage in well-tailored perfect discrimination. And this kinda creeps me out.

        3. That said, I’m comfortable with lots of taxes that get pretty close to perfect discrimination without triggering my gag reflex.

        For example, I strongly favor Pigovian taxes to control market failures by internalizing the cost of externalities. However, I regard it as crucial that these taxes be designed to recover the cost of externalities and nothing more. If cigarettes impose a cost on society, I don’t object to imposing a tax on them to recover those costs. But I do object to the Legislature repeatedly raising that tax without any relationship to social cost; now we’re just engaging in regressive taxation of an unpopular minority.

        If we live with socialized costs, arguably it makes sense to try to influence people’s behavior in ways that save society money. But this gets dicey. Consider smoking again. If I smoke at home, it hurts me; arguably it’s none of your business if I do. If government voluntarily socializes health care costs, does it now become everyone’s business that I smoke? Can government tax cigarettes and tobacco companies to recover these costs? By analogy, if government voluntarily offers all-expense-paid scholarships to the college of your choice, can government then sue colleges to recover the costs they’ve imposed on government?

        I think HHS may well be justified in establishing the Obamacare contraceptive mandate. If health care costs are socialized, then government is justified in encouraging people to make low-cost choices (e.g., socializing the cost of birth control as a cheaper substitute for socializing the cost of unwanted pregnancies and child birth.) Employers who don’t comply should be subject to a fee/tax equal to an estimate of the cost that their recalcitrance imposes on society — but should not be subject to any additional tax/fee. To impose an additional tax/fee would be to punish Free Exercise of Religion. That crosses the line from managing externalities to controlling behavior.

        • gabe says

          Geez, Nobody:

          You are such a kind and considerate fellow and obivously in possession of sufficient wisdom and facts to be able to make these determinations as to what the costs of “externalities” are as well as the incidental costs of tobacco use.
          I just wish i knew as much as do you and your ilk.
          Yet, as most who argue as you do, you forget that our current constituent law (otherwise known as the US Constitution) specifically proscribes such prescriptions as you proffer.

          Of course, i suspect that you are a dedicated positivist who believes that the “guvmnt” or a sufficiently deluded majority may determine that contrary to what our “watered-down” constitution otherwise guarantees, you will determine that conscience should now be subordinate to “cost-benefit ratios.
          I don’t suppose that you would be one supporting GM (that is Government Motors for the un-initiated) when it makes a similar cost-benefit analysis.

          The good thing is that my monitor is apparently working again as opposed to when I made the post below.

          Ultimately, if health or any other costs are “socialized” as you advocate (or are you simply acting as a purposive foil here), then there is no limit to the mischief that may be employed by the taxing authority.
          Nobody really believes that this is proper, yes?
          You are not, perhaps, writing from a faculty lounge, are you?????

          Hey, foil me once, shame on you; foil me twice shame on me!!!

          What say you, nobuddy!!!!!

        • R Richard Schweitzer says

          NR,

          You will note in the above:

          “. . . taxation as a multipurpose tool for all sorts of social objectives;”

          That includes the whole structure of taxation, levies, exemptions, deductions, classifications, etc.

          Your comment:

          “Piketty argues for progressive taxation to **reallocate the profits** of modernity down the income scale.” (Emphasis added)

          The questions put in reply to your post did not mention any specific non-revenue use of the tool of taxation (e.g., behavior).
          Pig0u and Tobin are great examples. The EU Commission has still more (but of course they want the revenues as much as they want the power of management – at least for now).

          On externalities, the Coase observations seem to provide better guidance than do blackboard economics. Pressed slightly, perhaps even Baumol might yield a bit on this point.

        • R Richard Schweitzer says

          NR,
          “Should government tax people for the purpose of influencing their behavior?”

          That was **not** the question.

          The question went to the effects on the “tool” of taxation itself, and of its use on the “objective” (purpose) or activity to which applied.

          • nobody.really says

            I wonder if you would agree that taxation is the tool to provide revenues for the functions of governments. In fact, it may be the *only* tool for that purpose….

            I agree that taxation is *a* tool to provide revenues for the functions of governments. I don’t preclude government raising revenues in other methods, e.g., fee for optional service (selling museum tickets), selling surplus property, auctioning use of the transmission spectrum, etc.

            It has become one of the great perversions of political economy to look upon taxation as a multipurpose tool for all sorts of social objectives; for most of which that tool is not only inappropriate, but damaging both to itself, and often to the purpose for which it is misapplied, as well as for its uses in its intended purpose.

            Perhaps an example would help illustrate your point.

            *My* point was this: We may adopt taxes for the purposes or raising revenues for government, and we may swing a hammer for the purpose of driving a nail. But purposes are not the same as consequences. If I’m floating in space when I swing that hammer, the rest of my body is going to move as the hammer moves. I can protest that it is not my purpose to move my body when I swing the hammer, but my body will move nonetheless. Similarly, I may assess taxes for purposes of raising revenues. Yet those taxes may alter people’s behavior. I can protest that it is not my purpose to alter people’s behavior when I assess taxes, but people will change their behavior nonetheless.

            So, let’s set aside questions about what the purpose of a given tool is, and instead focus on the consequences of its application. If I swing a massive object in space, my body will move in an equal and opposite reaction. This observation may prompt me to take special measures when attempting to hammer in space. But it may also prompt me to explore how I might exploit the use of massive objects such as hammers for the purpose of moving my body in space. Newton’s laws govern me even when they impede my goals; but what is the point of denying myself the use of these laws when doing so would promote may goals?

            Analogously, people will tend to avoid X if you increase the tax on X. We must endure this fact even when it impedes our goals (e.g., for income taxes); but what is the point of denying ourselves use of this fact when it would promote our goals (e.g., for excise taxes)?

            On externalities, the Coase observations seem to provide better guidance than do blackboard economics.

            Care to elaborate?

          • nobody.really says

            Let’s try this again:

            I wonder if you would agree that taxation is the tool to provide revenues for the functions of governments. In fact, it may be the *only* tool for that purpose….

            I agree that taxation is *a* tool to provide revenues for the functions of governments. I don’t preclude government raising revenues in other methods, e.g., fee for optional service (selling museum tickets), selling surplus property, auctioning use of the transmission spectrum, etc.

            It has become one of the great perversions of political economy to look upon taxation as a multipurpose tool for all sorts of social objectives; for most of which that tool is not only inappropriate, but damaging both to itself, and often to the purpose for which it is misapplied, as well as for its uses in its intended purpose.

            Perhaps an example would help illustrate your point.

            *My* point was this: We may adopt taxes for the purposes or raising revenues for government, and we may swing a hammer for the purpose of driving a nail. But purposes are not the same as consequences. If I’m floating in space when I swing that hammer, the rest of my body is going to move as the hammer moves. I can protest that it is not my purpose to move my body when I swing the hammer, but my body will move nonetheless. Similarly, I may assess taxes for purposes of raising revenues. Yet those taxes may alter people’s behavior. I can protest that it is not my purpose to alter people’s behavior when I assess taxes, but people will change their behavior nonetheless.

            So, let’s set aside questions about what the purpose of a given tool is, and instead focus on the consequences of its application. If I swing a massive object in space, my body will move in an equal and opposite reaction. This observation may prompt me to take special measures when attempting to hammer in space. But it may also prompt me to explore how I might exploit the use of massive objects such as hammers for the purpose of moving my body in space. Newton’s laws govern me even when they impede my goals; but what is the point of denying myself the use of these laws when doing so would promote may goals?

            Analogously, people will tend to avoid X if you increase the tax on X. We must endure this fact even when it impedes our goals (e.g., for income taxes); but what is the point of denying ourselves use of this fact when it would promote our goals (e.g., for excise taxes)?

            On externalities, the Coase observations seem to provide better guidance than do blackboard economics.

            Care to elaborate?

  3. gabe says

    Nobody:

    My dang monitor is “flickering” again.
    I pretty much agree with what you have written.
    I would, however, be a little more skeptical concerning whether “supermanagers” actually produce sufficient wealth or benefit to justify their high salaries. Having had exposure to a few of them, I would be hard pressed to identify any salient difference between them and their underlings. No, it is in many ways similar to a Kobe Bryant or Earl Thomas (recent $40 mm deal). To their mind it is about respect. All well and good – I however am not obligated to “respect” that.

    My only other issue is this: while you are again encouraging higher taxation on these folks (I’ll avoid the usual arguments re: productivity, rising / sinking boats, etc), in a “perfect” scenario (and at root, yours is, to some extent, a moral argument regarding income inequality) my preference would be to simply not pay the buggers as much but rather re-invest it in the business. Truth is, there are sufficient numbers of skilled executives to fill ALL such “supermanager” positions; again, we are not talking about a Gates or Jobs entrepeneur/visionary type – but rather someone to manage the company.
    Boy, I could tell you stories about some former super-managers many of whom were as personable, intelligent and as ephemeral as a bag of hair – put a littler flame to them and it can get pretty smelly “rite quick” as my old Drill Sargeant used to tell me.

    Seeya buddy- I’ve got to work on this monitor!!

    gabe

  4. R Richard Schweitzer says

    N.R,
    Easy things first:

    Coase: Read his Nobel acceptance – or check the Coase Archive
    and his specific views on externalities (and the use of the term).
    Ah Luvs Coase!

    In summary reply (hopefully response) to the balance of yours of 5/02/2014 (@05:41 -gad! what time zone?):

    The point exactly is the **damage** (a consequence) from using the wrong tool, or using it in a wrong fashion.
    Every problem is not a nail or a piece of metal to be shaped. Even the shaping of metal may require more than just a hammer. Having worked on a forge floor, the injunction, “don’t beat cold iron” seems apt.

    Suggested example of damage to both revenue and the subject of applied taxation: the luxury tax applied to leisure vessels.
    It not only destroyed the efficacy of that tax, but lost the revenues from taxes on incomes and transactions related to the creation of the leisure vessels. The other destructive impacts have been detailed in the past. But there is a specific example of damage to the tool and to the elements upon which it was deployed.

    Good enough?

    • gabe says

      Richard:
      A favor if you would. Briefly Looked up Coase. Like the “custom of the orchard” explanation.
      Is there some short work of his that you could recommend. My reading list is long and do not wish to get something too involved / long.
      Would appreciate your recommendation.

      thx
      take care
      gabe

      • R Richard Schweitzer says

        Coase was not a terribly prolific writer.

        Guessing from your own writing, try:

        “The Problem of Social Cost” – Journal of Law and Economics, Volume 3, pp 1-44 (1960)

        Coase came to the University of Virginia in 1958, during my last year in Charlottesville. He wrote this piece during his stay there. I did not know him, but knew of him. He was of a different generation some 14 years older than I.

        You can access that article on JSTOR, where it can be viewed online at no charge. The easiest access is to Google Ronald Coase, , scroll down to his listed writings and click on the link to that law review article. I have not checked out that particular format, but my guess is that you can increase the font size.

        There is also a good bit of Coase material on the Liberty Fund site, over at EconLib.

        The other thing you might prefer is is Nobel laureate address, which you can find at the Nobel site.

    • nobody.really says

      On Coase, here’s an excerpt from The Firm, The Market, and the Law at 24-26:

      “[E]xternalities” will be ubiquitous. The fact that governmental intervention also has its costs makes it very likely that most “externalities” should be allowed to continue if the value of production is to be maximized. This conclusion is strengthened if we assume that the government is not like Pigou’s ideal but is more like his normal public authority–ignorant, subject to pressure, and corrupt. Whether there is a presumption, when we observe an “externality,” that governmental intervention is desirable, depends on the cost conditions in the economy concerned. We can imagine cost conditions in which this presumption would be correct and also those in which it would not. It is wrong to claim that economic theory establishes such a presumption. What we are dealing with is a factual question.

      I share this view — though I would phrase it differently: We should design public policy to have people bear the consequences of their decisions except where the cost of doing so exceeds the benefits. And given the ubiquity of externalities, this will be most of the time.

      Yet even if we never try to eliminate a single externality, it is crucial to acknowledge the existence and ubiquity of externalities – because they reveal the faulty nature of the worship of autonomy. There are real advantages to the lessons of Economics 101, to striving to maximize circumstances under which individuals can make choices for themselves provided that they bear the consequences of those choices. But it’s crucial to acknowledge, as Coase does, that “externalities will be ubiquitous.” Thus, people who constantly bray about how government is impinging upon their autonomy seem to be ignorant of their own externalities, of how people are impinging upon others all the time. Impingement is not the exception, it’s the rule. It is the expectation to be free of impingement that is the exception. It’s a fine aspiration; it’s an unworkable expectation.

      As a final note: Coase correctly observes that government is imperfect and corrupt. I share this view, but can draw no conclusions from it. Government imperfections may cause it to regulate externalities too stringently, or in favor of some political group at the expense of another. But given the challenges of legislating and governing, it’s far more likely that government imperfection will cause government to fail to regulation externalities, or to refrain from taking corrective actions that would harm the interest of a politically favored group. I understand that members of the ruling class have a bias for inaction: they benefit from the status quo. But for everyone else, it is far from clear that inaction is our friend.

      • gabe says

        Let me begin by saying that after a rather brief exposure to Coase, I have gained a fuller appreciation of your positions. (Of course, it does not mean that i will not continue to “josh around” with you). Also, there is a degree of subtlety to some of your positions that is now apparent to me.

        That being said, I continue to have strong reservations about the “interventions” which you often suggest and the strong implication that government, far too often, fails to intervene. Were we corresponding during the Slaughterhouse error, I would grudgingly concede the need for a somewhat higher level of intervention.
        However, we today are confronted with an entirely different set of conditions; conditions under which vast swaths of the economy AND personal (yes, atomisitic) choices and behaviors are seen as fair game for government action. Thus, I argue that government ought not to presume to know, or arrogate to itself the right, exclusive or otherwise, to correct many of the naturally occuring externalities that are simply the result of the exigencies of living. Yes, you claim that there are calculations to be made – a cost benefit analysis in the end – but upon what rock of knowledge,from what Delphic oracle, does this presumed wisdom stem?
        History is replete with the failed Utopian adventures of the planners and social regulators. I continue to believe, and i resort to history as evidence, that there is far more wisdom to be found in the marketplace of both ideas and goods and services than will ever be found in the depths of a government agency – especially one tasked with determining what is the true cost of an externality and / or what are the benefits to be derived from these interventions.
        As to the ruling class seeking to avoid government intervention, you are, perhaps, a half century late. Currently, ruling factions INSIST upon intervention and have helped create the modern American version of corporatism. Look closely at so much of the recent interventions in healthcare, energy, and, heck, even friggin’ lightbulbs as an example – GE pushed for this.

        Madison commented that were men but angels…. – I would add; if government were but Delphian we would have no need of silly individual choice and behavior.

        take care as always
        gabe

    • nobody.really says

      The point exactly is the **damage** (a consequence) from using the wrong tool, or using it in a wrong fashion….

      Suggested example of damage to both revenue and the subject of applied taxation: the luxury tax applied to leisure vessels.

      True enough, at one time the US imposed a “luxury tax” on various things, including the sale of yachts. This caused people to buy their yachts outside the US jurisdiction and simply sail them here. The tax raised little money and harmed US yacht vendors (but helped foreign yacht vendors), and was repealed within two years.

      Moral: Taxation is a tool for raising revenues, not for promoting behavior change; in designing taxes, we should focus only on the goal of raising revenues, not on behavior change.WRONG. The luxury tax was not intended to modify behavior; it was intended to raise revenues – yet it failed anyway.

      The moral is quite the opposite: We must focus on how policies will influence behavior if we are going to achieve the goals of the policy. The problem with the luxury tax was not overly-ambitious motives; it was the easy supply of untaxed substitutes. In contrast, excise taxes on cigarettes actually work! They raise revenues and they change behavior away from smoking. The cap-and-trade system of regulating sulfur dioxide actually works! It raises some revenues and it has reduced acid rain. The problem is not with ambitious goals; the problem is with designing policies without considering the foreseeable ways that people will respond to the policy. We need more focus on behavior consequences, not less.

      • R Richard Schweitzer says

        There has been no assertion that the tax on laser vessels was for the purpose of “changing behavior.”

        No argument has been made against the assertion that taxation can (and does) affect the behavior. In fact, that is what “dynamic scoring” is all about; and, which, legislators (actually the Joint Committee) prefer to ignore.

        “We need more focus on behavior consequences, not less.” That reads like dynamic scoring advocacy.

        We also need to carefully focus on who determines the behavior (and consequences); and why; to what ends; and by what means. That is the concern of broad libertarianism. The concern of normative libertarianism is with the uses of the mechanisms of governments (especially, but not limited to, the coercion of taxation) to control or influence behavior, which involves limitations on human freedom and how individuals interact with one another and with their surroundings.

        Elvis has left the building!

      • gabe says

        And thank you for being the ONE who knows what behavior ought to be changed. goodness, how did we ever get along without folks like you.
        Bad enough you wish to tax me, but you also seek to change me.
        This is not economics – it is life – and we do have choices – admittedly some better than others – but you deprive one of a virtuous life when you compel him to act properly ( as you define it) and deny volitional outputs.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>