When Uncle Sam Really IS Your Uncle Sam


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.