When Uncle Sam Really IS Your Uncle Sam

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Tyler Cowen at Marginal Revolution has an interesting post on some nongovernmental forms of "taxation," in particular "the ancient employment system of the East….sometimes known as 'living off Abdul's job."" The idea is that anyone who's got a decent job soon finds himself surrounded by extended family and other miscellaneous hangers on who seem signally interested in finding gainful employment of their own. Strictly speaking, maybe "taxation" isn't quite the right word, insofar as the worker is legally–if not as a matter of social custom–free to tell the moochers to bugger off. But a distinction that's morally important to libertarians may end up not making a huge difference in terms of the practical effect on social outcomes, which is Cowen's point: We like to think getting rid of formal regulations or taxes will unleash growth–and generally it will–but culture can reproduce some of the growth-dampening effects of government intervention. An interesting question to research might be whether, in societies where culture is in part locked in by gatekeepers, you find some of the same public choice problems that account for so much government inefficiency: Almost everyone would benefit if Norm A were replaced by Norm B, but some smaller class of influentials (clerics, intellectuals, whatever) has a vested interest in keeping Norm A in effect. Though I imagine more often it's just a familiar sort of first-mover/collective-action problem, where most people would be better off under Norm B, but given that Norm A is the equilibrium, it's too costly for any individual to be the first to defect.

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  1. I recall something similar in Thomas Sowell’s trilogy on Race, Conquest, and (I forget which) and Culture series. Two kids both born blocks apart in Brooklyn, one a Guido and the other an Hassidic jew, will have many of their choices limited by their respective cultures, down to spousal choice, car to drive, how much cologne or gold to wear. While one can always choose to abandon culture, culture does help to limit decision making choices.

  2. Almost everyone would benefit if Norm A were replaced by Norm B, but some smaller class of influentials (clerics, intellectuals, whatever) has a vested interest in keeping Norm A in effect.

    My accountant says this is why we’ll never see a flat tax. At any given point, the people who make the laws themselves are benefiting from some current tax break (for instance, having kids in Harvard), and they don’t want it to change until it won’t affect them (kid graduates).

  3. I think that’s absolutely true, linguist. Add that to the enormous vested interests of the IRS, accountants, and tax lawyers, and going to a flat tax seems almost impossible. Significant changes in taxes or in government spending are looking unlikely, barring revolutionary change. We’re no longer likely to fix things with a simple change in the law.

  4. It is called tribalism and it is the reason why capitalism has failed in many parts of the world. In many societies the individual’s obligations to family and community override his obligations to himself. It sounds great in theory; some sort of Hillary Clinton I Takes a Village kind of Utopia. In reality it turns into a tribalistic hell. If I start a business, I cannot hire the most qualified person, I have to hire my cousins and extended family. If I get an important government job it is expected that I use that position to help my family and fellow tribe members. If I don’t do these things I am ostricized from my community.

    All of this makes having a functioning economy and government nearly impossible. This is why countries in Africa fail so miserably, yet their immigrants do quite well in the West. Once they get away from the tribal structure where they are allowed to act in their own self interest, they flourish just like any other intelligent hard working person. Societies based on tribalism never succeed. Something to think about the next time some well healed liberal is telling you how America doesn’t value family and community enough and we need to put the community over the individual. No thanks.

  5. This is exactly why we broke down and got ourselves some lobbyists.

  6. Something to think about the next time some well healed liberal is telling you how America doesn’t value family and community enough…

    Or some well heeled conservative talks about how the individual self interest liberals and libertarians espouse are destroying America.

  7. haven’t you guys ever seen the show “Entourage”? An extended example of this phenomenon.

  8. Xin chao, Minh den tu HL, minh mong muon duoc lam quen voi tat ca cac ban. Thanks you

  9. Xin chao, Minh den tu HL, minh mong muon duoc lam quen voi tat ca cac ban. Thanks you

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