What a fantastic little piece from The League of Ordinary Gentlemen.
As long as he was just a billionaire, Michael Bloomberg couldn’t stop synagogues from delivering bagels to homeless shelters. As mayor, he can. A billionaire can urge you to quit smoking, but a politician can ban it. And a billionaire can buy goods in the market, but a politician can confiscate them in broad daylight, with the full blessing of the law.
Politicians who complain about economic inequality tend to achieve two things: First, they extend political inequality. And second, they make it harder for market forces to raise the living standards of the least well-off. (Why is eflornithine expensive? It might be a difficult chemical synthesis, but it’s probably patent law or regulatory compliance. If so, then the government is a real-world Dives, and it deserves a lot more odium than the fictional one.)
Politicians do these things not because good remedies don’t exist, but because politicians don’t like good remedies. The political elite isn’t stupid. They want what everyone else wants — power. Unlike most of us, they already have a power base to build on. That’s also why they need to be stopped. Concentrations of power are dangerous, particularly when they can’t be punished by customers walking away.
When asked how much the rich should pay in taxes, we are primed to think of figures like Dives, and the answer is always more. Why? Because Dives is an asshole. Really. Our answer — “more” — arrives no matter how much the rich already pay, and whether or not they actually are assholes. I’m fairly sure that the answer will always be more; this alone should raise suspicion.
This very nicely points out fundamental flaws in Leftist/Collectivist thinking, as well as highlights the commonly polled response “higher taxes are great, as long as they are only higher for people richer than me”.*
I would suggest the reason eflornithine has a high price is supply and demand, not the cost of regulation. The cost of regulation affects supply – if the cost is higher than the expected price, the drug is not produced, or it is only produced in quantities where a very high price offsets the costs; thus is only one part of the price equation. It’s semantics and nitpicky, but I can get that way.
(Via @radleybalko on Twitter)
* “A CBS News/New York Times Poll conducted in 1985 found 69 percent felt that “people who have more money than you” were paying too little in taxes – while they themselves were paying their fair share (51 percent) or even too much (45 percent).”
June 13th, 2012 at 3:16 pm
Thanks for the link. But I can’t say I agree with this:
While there’s a bit of an Economics mistake (the reason eflornithine has a high price is supply and demand, not the cost of regulation.
Do you mean to argue that regulatory compliance costs don’t or can’t get passed along to consumers? They can, and they do. Although the higher costs may result in fewer consumers purchasing the product, that doesn’t mean the cost can’t rise.
June 13th, 2012 at 3:23 pm
It’s semantics – I should have left it out. Consumers pay regulatory costs all the time, but they aren’t the primary reason for pricing. They play far more in to the supply side of the equation (if the regulatory cost is too high for me to make a profit at the expected price, I don’t make any).
I added the word “necessarily” and adjusted the wording – I shouldn’t have been negative at all when your essay is so spot on.
Thanks for the comment!