Monday, November 17, 2014

Undermining Private Property

Permit yourself a bit of intellectual freedom.

And when I say "intellectual freedom," I mean for once just let your mature, logical, intellectually honest adult mind enjoy some thought without

1.  Worrying about how leftists would respond
2.  Worrying about how you'd defend this against leftists
3.  Pulling up arguments tendered by the left that I would have to address should I wish to waste another second of my finite life doing so.

Just, for once, enjoy a true intellectual experience in economics where you are allowed to dedicate 100% of your thoughts towards the topic at hand, allowing us to have an adult conversation uninhibited or impaired with the childish and regressive brains of socialists.

Got rid of those concerns?

Good, here we go.

Private property, without a doubt, is one of, if not "the" most important thing when it comes to having economic growth and success.  The reason is very simple - in order to incent people to work hard and thus produce economic growth they need to be allowed to keep the vast majority of the fruits of their labor.  If they aren't they have no incentive to forfeit their finite and precious time in the form of labor because, frankly, it's nothing more than slavery.

We can see this not only in something as obvious as slavery, but even in communist or near-communist states.  If I am taxed at 100% then what incentive do I have to work?  And even if I'm taxed at 0%, but can't buy property or own anything, then I might as well have no income.  This simple 5th grade logic is not only understood by...well...5th graders, but it has also played out empirically in the history of the world with the handful of communist regimes coming into existence...putting their populations into decades-worth of misery...before collapsing...but not without first killing more people in peacetime than any war ever could.

Because of this private property presents the greatest economic threat and greatest economic potential to the world's free societies.  Do you protect it, enshrine it, defend it and advocate it as much as possible?  Or do you punish it, destroy it, confiscate it, criminalize it, excoriate it and tax it as much as possible?  The difference is the unrivaled economic success of the west and, well, the rest of the world.

To those of us capable of long term planning, delayed gratification, post-stage-one thinking, morality, or who just give a damn about the future of society (not to mention, know a little history), we are obviously huge champions of private property.  But for those incapable of delayed gratification, post-stage-one thinking, morality or long term planning, the temptation of merely confiscating other people's property for their own personal advancement is just too tempting.  And thus the problem facing democratic countries today - there's just too many of the later with the right to vote.

This has resulted in an interesting phenomenon where there's a tug of war between what I like to call the "producers" and the "parasites" because that's what they truly are.  The "left" votes for more of other people's money, while the "right" merely votes to keep what's theirs.  And thusly taxation levels ebb and flow in the western world from between 33% on the low end to 60% on the high end.

But before you celebrate paying "only" 36% of your property here in the US, it's important to clear the gunk from our eyes and take a fresh look at precisely what is "private property" and precisely how it is being undermined here in the US and elsewhere.

First, to any self-respecting individual, forking over nearly 40% of your life, wealth and labor to a state where 70% of it merely goes to bribe the parasites into voting for more of it is enraging.  Emotional and intellectually dishonest arguments from the left aside, you don't owe 14 years of your 50 year career being a literal slave to other people too lazy to work.  So right off the bat, the fact 36% of your life is being confiscated is enough to show you property private is being undermined.

Second, the sheer amount of effort that goes into obfuscating just how much of your property is being taken.  When people think "property taxes" they usually think real estate.  And usually this is such a finite example most people understand the fact you don't technically own your property because you perpetually rent it from the state (worse still, even the presumedly conservative North Dakotans went full-sheeple and refused permit themselves to TRULY own their own homes).  But the truth of the matter is people do not understand precisely what property is.  For it is not your house or your land or even the assets within your home.

Property in it's purest form is your time.

I've addressed this before, but there really is no such thing as your house or your XBox or your car.  These are things merely composed and purchased with human time.  You exchange your time in the form of labor for some "money."  This "money" is nothing more than a tool, a claim on other people's time.  You then pay various people to build you a home, a car or an XBox One.  In short there would be no property, there would be no assets, if there was no human time.  Ergo, "property" IS your time and what you do with it.  Typically "what you do with it" is either generate income or purchase assets.  Therefore the cash in your bank account, the stocks in your brokerage account, the food in your fridge, and the house the fridge is sitting, EVERYTHING you've earned, made or saved by forfeiting your time is property.

What this means is that ALL taxation is on property.  The divisions between "capital gains tax," "income tax," "sales tax," "dividend tax," and "estate tax" are merely semantics, obscuring and obfuscating the truth - that all taxes are taxes on your finite and limited time on this planet.  All taxes are on your life via the tangible property you converted that life into.  However, because people rarely think of property as they way they should, they remain clueless as to just how much their private property is undermined (much like normal people are clueless how withholding taxes work).

Finally, even if you did own your property outright, and there were no taxes on its creation, ownership, purchase or sale, the state further undermines private property in one huge regard - regulation.

Tell property owners who were willing to sell "their" to the Keystone pipeline they own it.
Tell Duluth Metals they owned the $100 billion mine in Ely, Minnesota when the regulators constantly denied permits to drill.
And tell any home owner in the "republicanny" suburbs that they can build their own home without having some bored, tyrannical soccer mom or trophy wife city council member force a million unnecessary codes down their throats.

Even if you could theoretically and economically "own" your property good luck being able to use it as you see fit with a state that ultimately deems it "theirs."

The consequences of all this undermining and destruction of private property are what most of my readers can guess.  There is slower economic growth.  Less domestic investment.  More capital flightLower labor force participation.  And a general stagnation in standards of living.  But it is important to know precisely, economically why, especially in the most simplified of terms - taxation in all of its forms is ultimately a tax on your ultimate private property - your finite life.  And when people's lives are taxed, especially when used to pay for other people's lives, the deterrence to economic production is great and the economy suffers as it should.


Aaron Clarey is an evil, mean-spirited jerk who doesn't guard his words or care about people's feelings when writing or speaking.  He's especially mean because he uses statistics, data, facts and empiricism, which causes many micro-aggressions and trigger warnings among social justice warriors and other parasites of society.  He also has a hate-filled podcast, a hate-filled You Tube channel, and has lots of books specializing in White Male CIS Gendered Hate.  When he's not oppressing minorities, he's running buses of nuns and pre-schoolers off the road with his large carbon-emitting SUV.


sth_txs said...

That's why I tell people to get the highest paying government job with the least amount of work.

Keep in mind though that there are many 'private' sector jobs heavily dependent upon government with the military industrial or the social welfare area.

Even many Republicans or 'conservatards' as I like to call them to stupid in some ways when it comes to liberty. They are still stuck on the religious view of voting where a bunch of fools can vote to take my property.

sanelity said...

Well stated, as usual. The question that comes to my mind, in light of the socialist and regulatory trajectory we're on, is this: how long can we last?

The tax code is complex enough to subtract billions from GDP just in compliance costs. As you pointed out in "Enjoy the Decline", the election of 2012 was a turning point. The recent GOP wave (temporary I'm sure), won't even be a speed bump in the decline.

I'm with sth_txs on this one - stop pulling the cart and ride in it instead.

Edwin Amirsaleh said...


I'm sorry but you're wrong on one issue here: property rights over land is decidedly un-free-market. It's a holdover from the Feudal ages, and fundamentally philosophically doesn't make sense. At best, "homesteading" rights in the form of absolute land rights should last only long enough to recoup investment costs plus some profit, similar to patents. There's nothing free-market about someone owning (without remunerating everyone else) in perpetuity what they didn't create, and which is the one truly finite resource, and that which everyone NEEDS by virtue of being alive (you have to BE on SOME piece of land).

Omega Man said...

Owning land is decidely free market. A farmer works the land so as to harvest a crop. An industrialist builds a factory on land he bought and paid for. He employs hundreds if not thousands and produces a product which people want. A homeowner owns or should own the house in which he lives.

The ownership of property is the original and the foundational principle upon which Cappy's thesis rests. If we accept Mr. Edwin's argument then we might as well throw the rest of it out as well and live our lives in the squalor of socialism

Anonymous said...

Ownership of property I don't know enough about to have a claim,

But it is completely rational to state that if a person takes their time and effort to produce value, they ought to keep that value. This is the basis of human effort.

There are 3 motivations to work:

1) To make money
2) To be a good soviet comrade
3) To For the Glory of God

While 2 and 3 can both be used to do great things, 1 will always be with us, and motivates everyone.

Anonymous said...

Agree..but would should the real Federal Tax look like if we took out all the fat and giveaways to maintain a Military and Federal Highway system and so forth?

Anonymous said...

Good piece. Multiple thumbs-up.

Edwin said...

"Owning land is decidely free market. "

Nope, not when its in perpetuity. One of basic issues/elements of societies in general and the free market in particular is good at is incenting activity people engage in. Property in general does this. Ownership-type rights in land do this, but ownership rights FOREVER based on one initial investment go the other way artound and produce artificial scarcity, and with it artificial power. Again, look at patents. They help monetize the design and evelopment process, which costs money. But no one in their right mind thinks it would benefit society to keep the artificial scarcity forever; patents expire.

"An industrialist builds ... product which people want"

Except when landowners don't, and just let land sit fallow for no good reason. On my old block (just moved) next door there was a sign for an apartment for rent for more than a year. It's an old apartment building, surely every last bit of mortgage/construction cost has been paid off AND then profit, too. Why does the owner get to keep the unit away from everyone forever just because he wants a high price? In the same vein I've seen countless empty properties stay empty in bustling town centers because of greedy owners.How many derelict old factories are out there?

Sure, some of the problem is land use laws, and EPA laws, but landownership itself is a big part of the problem.

" If we accept Mr. Edwin's argument then we might as well throw the rest of it out as well and live our lives in the squalor of socialism"

No, not really. That's a really silly, stupid, and childish thing to say. Like I said, there's plenty of middle ground between no one has no land rights ever and the current feudal system we have. Again, I specifically mentioned rights with time limits, like patents. All of these ideas are rife in free-market writings, just because the ones YOU'VE heard of never mention them doesn't mean they're not there. For example, I once bought the book "Who owns the world?", and the author is an economist and wrote the book mentioning specifically these free-market ideas.

You should read up on it before you act like its socialist in nature and not free-market. There's a hell of a lot more since the original Georgism