Capitol Ideas/"Involuntary Capitalism"/Hoffer's Prophecies
Bethell, Tom
CAPITOL IDEAS by Tom Bethell "Involuntary Capitalism" / Hoffer's Prophecies AS has often been pointed out by such magazines as Commentary in recent years, politically free countries (which hold...
...Wanniski mentioned that the theory behind the Laffer Curve-that reduced tax rates encourage people to work harder and so will eventually increase tax revenues-had recently been put to the test in Puerto Rico, a country he discussed with a proprietary air, referring to it (if memory serves) as his "social laboratory...
...The far more serious coercions in the totalitarian states-every one of which is Marxist-are for one reason or another minimized or excused...
...I was interested to hearjude Wanniski's views on this subject recently...
...It will be our Redeemer: Central Economic Planning...
...When Washington's humanitarians gather together and express concern about "human rights," it is really only countries in the second (Brazil) category that they worry about...
...It is, of course, heretical in certain quarters to believe that people are motivated by self-interest, and the New York Times likewise regards this view with about as much enthusiasm as the Committee on the Present Danger regards the Soviet Union...
...In effect, Teng Hsiao-ping has taken China, down the Laffer Curve by reducing taxes...
...No, to my way of thinking the outlook is not good for America: a long, slow, downhill slide, with an increasingly cowed and demoralized citizenry muddling along on welfare payments, food stamps, coupons for this, permits for that, lawyers on every hand, government metastasizing, Joe Cali-fano's troops for the Betterment of Life enforcing compliance with myriad regulations in every walk of life...
...China now has one of the most regressive tax structures in the world," Wanniski said...
...We don't have to look very far to see what it is...
...Faithful Marxists really believe that people are, on the whole, unmoved by the incentive of personal gain...
...Wan-niski said that his book had not yet been mentioned in the New York Times...
...In the case of the worst offender, the Soviet Union, the principal excuse in recent years has been "detente...
...and when I further consider how hard he worked for the Senate candidacy of his friend, the articulate and intelligent Jeffrey Bell, only to see him defeated by Bill Bradley, the liberal basketball player...
...Even sadder to say, my friend also professes atheism...
...He is a strikingly optimistic person...
...The democracies aspire not to historical greatness but to the attainment of a modicum of material prosperity...
...I had the pleasure of having a drink with Mr...
...He believes in anything...
...CAPITOL IDEAS by Tom Bethell "Involuntary Capitalism" / Hoffer's Prophecies AS has often been pointed out by such magazines as Commentary in recent years, politically free countries (which hold elections) always also enjoy economic freedoms, such as the right to own property, to work on one's own behalf rather than the state's, and so on...
...This is because, as Hoffer elsewhere observes, national greatness is no longer considered to be a worthwhile goal among the countries of the West...
...The other day I came across Eric Hoffer's new book, Before The Sabbath, and read it non-stop from cover to cover-I can only say with a sense of relief that some important scraps and particles of bottled-up truth were finally escaping into the atmosphere...
...Abroad, however, things may be better than they seem at present...
...One can point to the evidence, as in Puerto Rico...
...Will this retreat of the free world from greatness make the world ripe for universal Russian dominion...
...It is, of course, a purely empirical matter whether tax cuts lead to increased output...
...Somehow the Laffer Curve once again came up in discussion, "A lot of nonsense," my friend commented...
...I'm ashamed to say I have never come across any of Hoffer's books before...
...Anyway, last year (at the recommendation of Wanniski, Arthur Laffer, and others) the legislature of that nation reduced marginal tax rates by 10 percent...
...Here is a pertinent extract: A nation is on its way out when it devotes much of its wealth and energies to the care and welfare of the least endowed segment of its population and puts a.low ceiling on the rewards of those who ceaselessly strive and achieve...
...I am reminded here of G.K...
...The realistic Wanniski says simply that we don't know the future...
...His reflections-about Communism, capitalism, America, Russia, intellectuals, "misplaced men of action," in some instances, who out of frustration turn into '' revolutionary wreckers''-are of exceptional weight and importance, often containing an element of prophecy...
...A third group of nations, including the Soviet Union, Cuba, North Korea, and Vietnam, deny both political and economic rights...
...On China, Wanniski and I were in agreement...
...At present a deliberate reaching out for national greatness is not found outside Russia and China," he writes...
...It is, of course, an attractive trait in anyone, and a gloomy pessimist such as myself must always defer to someone who looks on the bright side of things...
...Economics...
...Unable to believe in a future life, they believe in a Future Man...
...Thus, for example, the great American wealth of the past century is attributed not to a system that encouraged hard work, but to "abundant natural resources...
...Wanniski later sent me a newsletter he had written on this topic for H.C...
...This interesting news was reported in an Associated Press story in December 1978- a story that was not considered fit to print, however, by the New York Times...
...In these countries citizens live in a state of relative economic freedom but cannot vote...
...My admiration for Wanniski's optimism is all the greater when I consider those excellent, lucid, and utterly correct energy editorials he wrote for the Wall Street Journal, culminating, alas, in the birth of the Department of Energy...
...I can tell you exactly...
...They even manage to discern some small progress toward that glorious goal, 1917 having been a significant landmark...
...Unlike the Soviet Union, communal production is not subject to progressive duties...
...True enough Then I told him I came to America in 1962...
...It is true, I feel sure, that beyond the first flush of youth when many a giddy idea is briefly and excusably entertained, all Marxists are atheists...
...Covertly, they are dismayed at the absence of Politburos, and, specifically, at the inevitable economic boom that takes place when Politburos are missing...
...What does that mean...
...Instead, high output is rewarded through regressive taxation...
...As in the Soviet Union," Wanniski wrote, "Chinese peasants are permitted private plots to work, the fruits of which are not subject to tax...
...Not that the Kremlin would bother to soft-pedal them if the opportunity arose, as the avid Pravda reporting of the "Wilmington 10" and alleged CIA "abuses" shows...
...A couple of weeks later I had lunch with a good friend who works for a well-known foreign weekly magazine with a considerable (perhaps inflated) reputation...
...But no doubt in every instance a devout Marxist, could "explain" the outcome by reference to some special local condition...
...But the reverse is not necessarily true, as the examples of Brazil, South Korea, and Taiwan show...
...Since life is so much worse in the totalitarian states than in those that are authoritarian but economically free, and since the lion's share of international criticism is nevertheless directed at the latter, we may conclude, therefore, that the humanitarians who profess to be concerned about human rights are in reality concerned about something else...
...Overtly, they are dismayed at the absence of elections...
...One thing above all is needed to ensure the arrival of Future Man...
...The citizens of South Korea, Taiwan, etcetera, are subjected to what one might call "involuntary capitalism.'' That is what the human-rights humanitarians object to...
...This is mainly how the Soviets have benefitted from detente, which in this sense truly is a "one-way street," because the Soviet Union does not have comparable opportunities to "soft-pedal" American human-rights violations...
...Wanniski after he spoke at an American Conservative Union conference in Washington...
...Chesterton's most famous aphorism: that when a man ceases to believe in God, he does not believe in nothing...
...No," he said...
...The team could double production against the base year and keep or sell all the surplus...
...Sad to say, my friend is vaguely Marxist in belief...
...He worries that his grandchildren will one day argue among themselves as to whether he really wrote it, and one of them will decide to settle the dispute by referring to the New York Times, decisively refuting the notion that grandfather had been an author...
...To the outside world, the Chinese peasants have thus appeared to be 'blue ants,' somehow motivated to work feverishly for the state...
...If we say something that might offend the Kremlin, then detente is endangered...
...Wainright & Co...
...The result was a 7 percent increase in tax revenues...
...China continues to intrigue-as a country that now is surely moving out of the Communist orbit...
...In reality, they are organized entrepreneurially to maximize individual benefits, the teams being small enough to link efforts and rewards...
...Such economic booms become more and more embarrassing, because it becomes harder and harder to explain why they never occur in the Marxist states...
...Ignoring, the reality of the "curve" itself, Tasked my friend if he believed that people will work harder and produce more if they are so encouraged by lower taxes...
...Contemporary liberal intellectuals would not agree with that observation, but even if they did they would remain unmoved by it...
...Regressive" is good, by the way, the nomenclature for tax policies having undoubtedly been devised by a socialist...
...Well," he said, "you had three good years...
Vol. 12 • April 1979 • No. 4
