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Category: Liberty

Inheritance tax as a litmus test to distinguish socialists from liberals

I’ve written on inheritance tax earlier, but the topic came up again. My comments:

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The only justification for any inheritance tax is based on the concept of equality. Only socialists worry about equality. Liberals worry only about poverty. It doesn’t matter how unequal a society is so long as there is absence of poverty and there is equal opportunity.

I won’t go into too much details regarding this ultra-socialist idea of appropriation, but note:

a) Inheritance tax is a tax on already taxed income. Except in the rarest of cases, such a tax is fundamentally untenable.

b) We live through our children, and while we may not work only for their sake, we have in mind the continuity of life that our children represent. Our children are us. Why would anyone labour if they can’t pass on the fruits of their labour to their children? This amounts to the destruction of the entire system of nature, and imposing values that are totally inconsistent with the way nature has progressed to date. If parents can’t look after their children and therefore ensure that their genes are passed on successfully into the future, then we are essentially saying that we disagree with life itself.

c) This idea is inequitous, because different people consume/save differently, and the incidence of this tax will fall on those the more prudent; and families that tend to die at an average age of 50 would be taxed more heavily than those that die at age 90.

Inheritance tax is a very good test of liberalism. I’d now classify your worldview as social liberal, willing to let people produce through the market but thereafter keen to confiscate their wealth at the earliest opportunity. This is actually a form of socialism, not liberalism.The liberal doesn’t ever talk about equality for that is none of his business. He also talks about tax only to the extent that it is required to fund government; not as a means to “equalise”/ “redistribute”. Any redistribution is anathema to the liberal.

I guess the general principle of the liberal is that he works with human nature, not against it (for that’s guaranteed to fail – and cause some severely perverse consequences). What is the most prominent thing we observe throughout history? That republics have repeatedly degenerated into kingdoms (based on the principle of inheritance), that a non-heritable varna system degenerated into a heritable caste system (with rationalisations of the sort given in the Upanishads), that there is vast and disproportionate effect of family on the prospects of someone in politics (one such family has continued unbroken since independence – 70 years! in an alleged “democracy”).

Any attempt to violate the laws of nature will be met with failure. This raw truth is something socialists dislike and will often (like Piketty) cook up bogus “facts” to excite us to support their continued attempts to violate our biology. As a species, we are very easy to excite, and particularly susceptible to envy. But envy can’t be the driving force for any mature public policy.

And once again I remind people about this short video in which Milton Friedman raises some serious issues with inheritance tax. It will, as Friedman says, destroy society itself.

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Separation of the state and church – what do we mean by it?

In DOF I’ve shown how it was Romans who worked out the need for the state to be separate from the church. Till Constantine went crazy and made Christianity the state religion, all religions were largely tolerated in Rome.  I say “largely”, since different Roman rulers took slightly different approaches. This was not a well established principle.

It was John Locke, through “A letter Concerning Toleration” who first advocated a secular state and the separation of religious and governmental institutions.

He pointed to the “Necess(ity) above all to distinguish between the business of civil government and that of religion”

He noted that: “the whole power of civil government is concerned only with men’s civil goods”

and “Civil government is confined to the care of things in this world, and has nothing to do with the world to come”.

Therefore, according to him: “Civil power ought not to prescribe articles of faith…by Civil law”.

Now, it is clear that not all these views have percolated into the Western world.

However, Jefferson clearly referred to the separation of the state and church while recommending the First Amendment to the US Constitution which prohibits the making of any religious laws. “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof”.

Now, this did not carry through in intent and even in the USA there remains a bit of a mix up between the state and religion. However, it is far less than the mix up found in India. India has actual religious laws, e.g. Hindu Act, etc.  – a blatant intervention of the state in matters of religion. These types of laws would be deemed unconstitutional in the USA.

I believe the Supreme Court has made a somewhat belated attempt to recognise this principle (see this blog post). I think it needs to do a lot more.

ADDENDUM

I recorded this on 11 January 2017 during my lunch walk.


ADDENDUM

Here is a preliminary note by Sarita Rani

 

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Open borders – some notes

I never get time to write properly on most issues of interest. This is one of them. I wrote something here on this blog in 2013. Then there was a debate in 2014. Since then I never got time to sit down and review – so I could further elaborate. I’m now going to start these ‘half-baked’ blog posts which contain preliminary thoughts – so I can keep moving.

My FB post of 20 March 2014

HAYEK DID NOT PROMOTE OPEN BORDERS.

I totally oppose open borders since the people who pay taxes for running a particular nation are entitled to decide how these should be used, not those who haven’t paid for them. For a theory of freedom kindly read DOF (http://discovery.sabhlokcity.com/). There is NO freedom without a strong state.

Economic migration always moves from a place of lower public infrastructure to higher. There are no rights to millions of people who have chosen to create unfree and poor societies to get access to higher quality public infrastructure, justice system or security. The more free societies can, however, CHOOSE whom they want. At a minimum the entrants should be both personally capable and committed to liberty.

I was informed that Hayek supported open borders. I wasn’t aware of this. I have found, now, that he OPPOSED open borders, as well:

“in a letter to the London Times on February 11, 1978, Professor Friedrich A. Hayek—himself an immigrant several times in his life—praised the British Conservative leader Margaret Thatcher for her call for stringent immigration controls. “While I look forward, as an ultimate ideal, to a state of affairs in which national boundaries have ceased to be obstacles to the free movement of men,” Hayek declared, “I believe that within any period with which we can now be concerned, any attempt to realize it would lead to a revival of strong nationalist sentiments.” [Source: http://www.amatecon.com/etext/cftoi/cftoi-ch17.html].

Once nations have ALL adopted 100 per cent freedom, THEN open borders can make sense, under certain circumstances. Not in the present primitive state where 1/3rd of the world is FANATICALLY opposed to liberty.

Shika Dalmia Sood’s response:

Pardon me, Sanjeev, I admire your positions on many issues, but you are flat out wrong in identifying this as classical liberalism. If the best you could do is pluck out a single quote by Hayek from a piece that is arguing the opposite, then that’s just tendentious. That quote is noteworthy only because it comes from a guy whose full views would lead one to believe otherwise. If Malthus had said it, it would be hardly reportable. I have zero desire to argue with you given your starting point in all of this, but by your logic Bal Thackeray, who advocated even stronger nationalism and restrictionism within his own country in the name of Maharashtran pride, would be an even bigger classical liberal. If Modi used the strong arm of the state to throw Muslims out of India because they are anti-freedom, that would be completely defensible in your version of classical liberalism. Classical liberals also never use the vocabulary of “strong” state. They use limited government which is something vastly different. That you don’t appreciate the difference says something and is at the heart of your misunderstanding. To suggest that Muslims by virtue of living in Muslim countries are not entitled tofreedom of movement and earn a decent livelihood, is both sad and not classical liberal. Also, if the fact that people from less free countries shound’t be allowed to move to more free countries, then I’m not sure how an Indian like yourself is entitled to move to Australia, but not a Pakistani. The government can restrict entry of people if it can prove that they pose a security threat. Not otherwise. But the burden of proof must be on the government. To recommend, as you do, blanket bans on some people is closer to Modi-style fascism. Please reconsider your misguided crusade to label such views as classical liberal. You are not doing anyone any favors. There are plenty of other thinkers you can legitimately enlist on your side. Leave these guys alone. If you are genuinely interested in what they thought on this issue, there is plenty of material on the site I shared and Cato Institute archives. (von Mises’ opus Liberalism had plenty to say on this as did Hayek in places too numerous to mention with the exception of this one. And here too he mentions it as an exception to his full views

MY RESPONSE

Shikha, the classical liberal school of thought is based on strong foundations of the state. It is NOT an anarchist school, as I’ve repeatedly explained. What you are suggesting is a version of anarchy, where people can randomly move from country to country without any check. Labour mobility is important and I’ve written about it. But it is not the same as open borders.

Clearly you’ve not bothered to read the book reference I gave you, for it elaborates how liberty begins and is supported. The territory is the key.

Kindly don’t mix my views randomly with those of bigots and fanatics. If you had cared to read and understand, you’d never even remotely suggest such a thing.

I have already said a LOT on this and may say some more on this. However, the view you are advocating is best described as libertarian. I’m NOT a libertarian. My liberalism is rooted in Hobbes and Locke, and Burke. These are NOT libertarians.

I do write about the ultimate dissolution of the state, as well. But that stage is far, very far away. Till there is 100 per cent equal freedom in all nations, we MUST have borders

Shikha’s response:

I AM NOT SUGGESTING ANARCHY. I am suggesting limited government which a state that is empowered to impose freedom litmus tests is not. Gotta run.

My response:

Open border is a form of anarchy. There is basically no state, for anyone can come and go. MILLIONS of beggars from all over the world will land up and one can’t thrown them out. No preference is given to those who have paid taxes and worked hard to make a state a state.

Israel would be overwhelmed by foreign migrations, and the massive efforts of its citizens to achieve a free prosperous society totally nullified.

I disagree with such anarchy. Your denial of this as anarchy doesn’t mean it is not so. It has all the key signs of anarchy under the present circumstances

My FB comment April 2014

SECOND CLASS CITIZENS? THAT’S THE BEST AN OPEN-BORDER DEBATE PROMOTES? The whole idea is fundamentally flawed, and time permitting I’ll one day write about it.
“We don’t have to give foreigners welfare or let them vote.” – see: Bryan Caplans post here.

ADDENDUM 3 JANUARY 2017

Open borders comment by Cameron K Murray here:

It allows supporters to pretend that the borders of private property within a nation are moral, yet the borders between nations are not. Somehow if I am denied, through accident of birth, to make a living from my share of the land in my own country, this is a radically different thing to Alex Tabarrok’s view,where he asks “How can it be moral that through the mere accident of birth some people are imprisoned in countries where their political or geographic institutions prevent them from making a living?”

As I have said before, even the wildest proponents of open borders agree that

“…open borders could not on its own eliminate poverty and that international migration could only help the relatively better off among the global poor”

Then what is it really for?

ADDENDUM 3 JANUARY 2017

My summary position: The cost of protecting private property precludes having open borders.

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Arvind Virmani’s justification of journalist killings in India

Someone said Arvind Virmani is a good economist. I followed him for a while on Twitter – some random comments of his came by my way.

Today I came across this (below), and that’s it – I’ve now concluded that Virmani is an illiberal socialist. Someone who can justify the killing of 5 journalists in India (and the oppression and silencing of thousands more) is no liberal. No economist.

Gone. No longer worth listening to.

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