Taxes on Capital- good for our descendants?

This is Steve Landsburg explaining why lowering Capital taxes is the best thing we can do for our descendants- 

'There are only three things you and I can do to make the future world a better place.  First, we can consume less, leaving more resources behind. Second, we can work harder, planting trees, building factories and writing poems that will live on after we’re gone. Third, we can innovate, advancing science and technology so that our children’s children’s children can make better use of the resources they inherit.

'As it happens, there’s one key policy variable that drives all three of these things, and that’s the tax rate on capital income (which includes interest, dividends, corporate income and capital gains). Capital taxes are a disincentive to save, and when people don’t save they consume instead. Capital taxes are a disincentive to work and a disincentive to innovate.

This is not a plea for lowering taxes in general...it’s simply an observation that if your goal is to leave a better world for our descendants, then your best bet is to support lower capital taxes.

Landsburg is making 3 obvious mistakes
1) Lower Capital taxes mean we will Consume less leaving more resources behind for our distant descendants.
This is not true. If Capital formation declines as a result of a tax then the Capital stock will be lower than it would otherwise have been. Thus Income, and therefore ultimately Consumption will be on a much lower growth path ceteris paribus. This would mean that our distant descendants would have more not less non-renewable resources than would otherwise be the case.
2) Disincentives to work may not arise. If Saving are precautionary and/or for care in old age, Capital taxes may increase Work effort. (The Income effect of the tax outweighs the substitution effect). Some types of work Landsburg mentions- e.g. writing poems and planting trees- may increase if there is a disincentive to work. In any case, Capital taxes mean that everybody's 'Permanent Income' has gone down and so they will scale down their expectations and adopt a more frugal life-style.
3) The disincentive to innovate may be a good thing for our distant descendants. It may be that technologies which we have had an incentive to adopt at the moment have potentially catastrophic consequences down the line. 'Gee! The bursar tells me our University has just received a 10 billion dollar windfall. Let's go ahead and steal a march on the Japs by spliting the photon from its long-time boyfriend.' Sure, that's an innovation that wouldn't have happened but for lower taxes on Capital. Shame it blew up the Universe. Still.


One compelling argument for taxes on Capital Gains is that changes in the legal framework over the last 30 years has increased wasteful competition in  a frothy type of 'innovation' or financial engineering. In this case, since the legal framework has vested rents, it makes sense to claw back a portion of those rents so as to maintain that very framework without which those rents would melt into thin air.

What, then, is the best thing we could do for our descendants? Dunno, but it's probably got something to do with contraception.

Bengal famine caused by evil Hindus

'Though the seeds of this great disaster (the Bengal famine)  were laid by the previous government, which because of incompetence and lack of foresight, had not taken the necessary steps to avoid this, the blame for it was put on the Muslim League Government in whose tenure of office the results began to show. Then, and afterwards, the Hindu dominated Press of India, and the Western Press have blamed the Muslim League Ministry for the tragedy which was not of its making. It was merely reaping the whirlwind the previous government had sown, but to this day, whoever writes about this disaster always blames the Muslim League Ministry. It surprises me because some of these writers are men of international repute and yet are content to repeat a canard without taking the trouble to sift the facts for themselves.
Shaheed Bhai (Suhrawardy) was appointed Minister for Civil Supplies; he was also holding the portfolio for Finance. He worked day and night organizing food distribution centres, and gruel kitchens allover the city. He mobilized the students for doing this work. By threatening dire punishment, he did get the rice hoarders and blackmarketeers (mostly Hindus) to disgorge their ill- gotten stocks, and rice did appear in the shops of Calcutta sooner than it would have otherwise. Rice could not be imported from the surrounding countries because they were under enemy occupation. Wheat from north India was of no use because the Bengalis were not used to eating bread, though as a result of the Bengal famine a drastic change did come about in their eating habits and I understand they do eat bread now.
Shaheed Bhai came to New Delhi many times and spent hours with officials in charge of food supplies, arranging to send as much rice as possible to famine-striken Bengal because the agents handling rice import were Ispahani and Company. The Hindu Provinces did not want to send rice. Shaheed Bhai tried to persuade the Ministry to appoint one or two Hindu agents for which he earned the enmity of the Ispahanis. The Hindu writers still blame communal consideration in the handling of rice as one of the causes of famine.

It was mainly due to Shaheed Bhai 's indefatigable energy that the Bengal famine came to an end when it did, but he has received scant thanks for it.'

(fromHuseyn Shaheed Suhrawardy: A Biography by Begum Shaista Suhrawardy Ikramullah, Oxford University Press, 1991)

Amartya Sen- an eye witness to the Bengal famine- wrote,  ''No famine has ever taken place in the history of the world in a functioning democracy,''  in  his book ''Democracy as Freedom'' (Anchor, 1999). This, he explained, is because democratic governments ''have to win elections and face public criticism, and have strong incentive to undertake measures to avert famines and other catastrophes.'' 

Yet, Bengal had an elected Government during the Famine. True, this was on a restricted franchise but the outcome would have been the same under universal adult suffrage.  The Premier of Bengal, at the start of the famine, was A.K Fazl ul Haq, who was a close friend of Sikandar Hyat, the Premier of Punjab, and joined with him in presenting the Lahore Resolution- demanding the creation of Pakistan. Punjab was the sole grain surplus state. Like Bengal, it had a Muslim majority. Its leaders were closely allied with the leaders of Bengal. Yet they refused to send food to the Bengalis until a new Viceroy, Lord Wavell, twisted their arm.

This did not cause the Muslim rulers of Bengal any great inconvenience. They blamed the famine on Hindu merchants- even thought the agents for grain imports were all Muslims. Suhrawardy tried (how hard?) to get a couple of Hindus included but the powerful Ispahani's blocked him. Still, this did not stop the Muslim League Govt. from continuing to denounce the Indian National Congress as 'bania Raj'- rule by the cunning and hypocritical Hindu merchant- and to blame the Famine upon their machinations. Shaheed Suhrawardy made a great show of raiding the premises of supposed hoarders. Later he organized 'Direct Action Day'- mob violence on a massive scale- so as to reinforce the demand for Partition. Neither the Famine nor the terrible Communal violence orchestrated by his Party did him or Fazl ul Haq any harm whatsoever. 

Bengali Hindu intellectuals- like Madshusree Mukherjee- refuse to hold the elected Government of Bengal, at the time of the famine, accountable for its actions. They don't ask why a Muslim Govt. in a grain surplus State refused to send food to their allies and co-religionists in a grain-shortage state even though the profit on the transaction would be made by Muslim merchants, not Hindus. Why? Are these Bengali intellectuals afraid of being labeled 'Hindutva' extremists? I suppose they are right to be afraid of that imputation- it is pretty much the kiss of death, career wise. 
On the other hand, blaming Churchill is always a safe bet. 

A Muslim Government in Punjab refuses to send food to a Muslim Government in Bengal. Whose fault is that? Churchill's.

Clearly, Churchill was a dictator who could force the entire British Empire to do whatever he wanted. The Deputy Prime Minister in the War-time Coalition Government, Clement Atlee, who was a friend of Nehru's, was a complete cypher. This is because, under the British parliamentary system, Coalition partners have no say in anything. Churchill used to beat Atlee unmercifully and use him as a spittoon. After Aneurin Bevan's unsuccessful assassination attempt on him, Churchill conducted a ruthless purge of the Parliamentary Labor Party- hundreds of M.Ps were garroted with piano wire. It was upon his insistence, that Wales was renamed West Churchill-land-on-Sea.

These are historical facts. Churchill and Churchill alone wielded power at every level of the British Empire. In 1944, a crow pecked my Mummy's foot. It was acting on Churchill's orders. 

True, those evil Hindu banias went and stole all the rice and hid it so as to make the Muslim Government look bad. But, they too were only following Churchill's orders. This is the real scandal of the Bengal Famine.

Incidentally, like Hitler and Stalin and the Queen-God-bless-her, Churchill was a crypto-Jew. His real name was Moshe Weinstein and he is alive and well and running a pawn shop off the Uxbridge Road. Bastard refused to advance me any money on my pure gold Rolex  which has been cunningly disguised to look like a cheap plastic digital watch which stopped working in 1983.  I tell you, Bengal famine is the least of his crimes! Who is making all those calls to sex-lines from my office phone? Proper investigation by leading Scientists will show that only Churchill could have carried out this diabolical plot.

'Those who do not learn from History are condemned to Repeat it.' I myself spent three years in the Second Grade only for that reason.

Mind it kindly.

Bengal famine caused by a fungus.

'S.Y. Padmanabhan shows that the Bengal famine of 1943 was caused by a
helminthosporium fungus epidemic on the rice crop (which confirms the view of the
Famine Inquiry Commission, but directly opposes all Sen's explanations). "Nothing as
devastating as the Bengal epiphototic of 1942 has been recorded in plant pathological
literature. The only other instance that bears comparison in loss sustained by a food
crop and the human calamity that followed in its wake is the Irish potato famine of
1845". He gives evidence that the losses for some varieties of rice were 90%. He was
there. This is the only evidence based on what was harvested. The statistics everyone
else uses are based on highly suspect crop forecasts, mostly made before the cyclone
and the fungus epidemic. S.Y. Padmanabhan, "The Great Bengal Famine", Annual
Review of Phytopathology vol II 1973 p11-24. (Professor Mark Tauger found this
paper and recognized its importance. Mark Tauger, Entitlement, Shortage, and
the 1943 Bengal Famine: Another Look, Journal of Peasant Studies, vol. 31, no.
1, Octobor 2003, 45-72.)'
Dr. Peter Bowbrick

Peter Bowbrick vs. Amartya Sen

Back in 1986,  Peter Bowbrick showed that Amartya Sen's work on Famines was mischievous nonsense. Famines occur because there isn't enough food. The Bengal famine wasn't caused by better paid workers in the Cities eating a lot more rice thus driving up its price and causing poor people in the villages to starve. When people get more money, they buy less rice and more fish and vegetables and butter and so on. Nobody can eat six times as much rice as they did before getting a pay rise.

The Bengal famine, like most famines, was caused by a fall in the supply of food. The Muslim League Govt. in Bengal believed, as Sen still does, that famines aren't caused by a shortfall of food. That's why they didn't introduce rationing but simply carried on lining their own pockets. When Wavell became Viceroy, he had to twist the arm of the Govt. of Bengal to stop obstructing famine relief for their own petty political reasons.

Sen issued a sort of obfuscating rejoinder to Bowbrick- at that time without a PhD- but failed to address the issues he had raised. Instead, he mocked Bowbrick for claiming that official figures were subject to a 3000% error! However, what Bowbrick had said was that, in that context, the difference between two unreliable figures gave an error of up to 30 times the quantum stated. That is perfectly reasonable. If I have a 10% error in both Income and Expenditure, my Surplus may be 10,000,000% off the mark. I think I'll have a 1 Paisa surplus but it turns out I'm 10,000 Rupees in the hole.
This is Sen at his sneering, sneaking, best-

Sen has just brought up the 3000% error in a disingenuous way which suggests that Bowbrick is so stupid that he thinks the officials thought supply or demand might be 30 times less or more than the outcome. He then says 'There is no doubt that all such figures are subject to possible errors'- what a humble little humbug it is! but primly adds, like a genteel maiden Aunt whose nieces are arguing about what size of dildo they should order online for her birthday, 'I shall not comment on the possibility of a 3000% error!'
However, the margin of error in the change in the shortfall- which is what affects the change in the price for a good in inelastic demand, like rice in Bengal- could very well be of the order of 30 or a 1000 of what he had calculated. If Sen were really an Economist it would be his duty to comment. But,  he isn't an Economist. Just a pi-jaw merchant, a surfer of availability cascades, a sneering, sneaking, careerist.
 Academia and the deeply corrupt Anti-Povery racket welcomed Sen's work and ignored Bowbrick. After all, if famines are about there not being enough food, then the solution is not far to seek. Get in the scientists and the technocrats to find ways to grow more food and get it distributed properly. Boring stuff fit only for Agronomists and Engineers and the odd bureaucrat who doesn't know his place. Academic careers- which consist of recycling your old dissertation again and again till finally even Death backs off from you under the impression you aint yet brain-dead- can't be made of such stuff . Some Borlaug or Swaminathan might just fix the problem once and for all.

Why is Sen considered a great Economist? Or, to put it another way, wouldn't it be great if Economists were more like Bowbrick?

Ross's paradox & why Ethics Professors are shit

Consider
Ross's Paradox (Ross 1941):
1) It is obligatory that the letter is mailed.
(2) It is obligatory that the letter is mailed or the letter is burned.

From the imperative point of view, (2) adds something to (1), it makes it stronger, more urgent, more memorable. It taps into the essential ambiguity of visceral urges. It adds emotional valency to a choice situation in a manner that de-emphasizes the outcome. 
The problem is that, in the eagerness deontic logics share with alethic logics to find a concrete model, Ethics is too willing to provide 'proofs' for all ad captum vulgi intuitions and to subsume every illogical norm that exists under its own burgeoning idiocy.

The temptation is to 'deduce' more and more bizarre propositions to make your own mark as an Ethical thinker. Solomon Maimon- though a Rabbinical prodigy himself- fled his native Lithuania because he came to equate the 'Golden Liberties' of the riotous Polish aristocracy, which ruined his country, with the license enjoyed by the scholars of Halachah to display their virtuosity by adding more and more burdensome refinements to the Ark of the Law.
Maimon's own ethical degeneration- he became a drunken sponger- sadly can't be correlated with his interaction with, the monster, Kant. But then he wasn't tenured as a Professor of Ethics.

I recall asking an Iranian scholar whether it was really true that Prof.Zaehner had persuaded Teheran University's Professor of Ethics to invite Mossadegh's Security Chief to dinner only to quietly bump him off. Without answering the question, the scholar drew my attention to Nasirudin Tusi, the author of the Akhlaq-e-Nasiri, the most important book on Ethics in Persia, who was a double dyed traitor- betraying his Spiritual Master to the infidel Mongols. In other words, the Spalding Professor of Ethics & Eastern Religion, R.C. Zaehner had sent the Iranian elites a message which was not just witty but erudite.
The puzzling thing is why Ethics Professors display such 'frontal' behavior. After all, it is in their own professional interest to dissimulate their sociopathy or poor impulse control and wear the mask of rectitude.
Perhaps, the answer is that whereas in other fields one needs good (that is critical) students and colleagues to carry forward the Research Program associated with your name, in Ethics the reverse is the case because imperative logic hypertrophies in a bizarre and cancerous manner unless brought firmly under the control of the personality of its Professor. After all, an imperative statement- unlike an alethic statement- gains force entirely by the answer to the question 'who is saying this?'.
In India, though dharma (Eusebia)becomes the central concern, once both Ontology and Epistemology came to be seen as empty, it is interesting to note how any noble character pre-occupied with Ethics- like Lord Rama or King Yuddhishtra- is depicted as ending up breaking all his own rules and inheriting futility and despair.
Krishna, contrary to Matilal, Sen, et al, is actually a dharmic guy because he performs a humble function at the Kurukshetra War. His elder brother, on the other hand, cries fie upon both parties and goes off to get drunk.
Interestingly, the Sufis who spread Islam in the Indian sub=continent, affirm precisely this antinomian 'Malamati' (blame-worthy) theory whereby the price for professing Ethics is an ironic plunge into infamy.

Drunk 'fore dusk

Does Harlot Night unbind her hair?
Drunk 'fore dusk, I'm unaware.
Thou fallen flower of Sabbath tresses
Saqi, the honey bee me distresses

Ithamar Theodore's Gita

Dr. Ithamar Theodore is an ISKCON devotee and a Professor of something or other. In other words, he is bound to misunderstand the Gita. Yet, his book 'Exploring the Gita' isn't particularly egregious but conventional merely.
In his case, I imagine it must be the ultra conservative aspect of Sw. Prabhupada's ideology- itself a recent development in the movement inspired by Chaitanya- which renders the divine Comedy of the Gita obscure and mystagogic to him.
Simply put, Dr. Theodore thinks Arjuna says he won't fight because of of some sort of utilitarian or 'dharmic' calculus he has performed. Krishna then says something which expands Arjuna's information set with the result that he decides to fight. Theodore thinks what Krishna says has to do with ontology- a hierarchy of values and modes of being such that what appears at ground level to be cousins killing cousins over who gets a piece of ground, is actually something very nice and good and necessary for the comfort of higher types of beings or higher types of conceptions of the Good, located at the penthouse level.
The truth is there are a lot of crap stories where something like this does happen. The hero, who is a bit stupid, says he is sick of killing people. The wise Guide then says 'Killing them you are not young grasshopper. Tickling their tummies you are merely. Subtle Truth is. Grasped it is easily not . Princess Leia your sister, yea, verily is. Could you kindly throw away that crusty sports sock of yours now? Beating your meat over her, ashamed of, are you not you big perv?'
Fortunately, Vyasa made sure that the Gita- though appearing to be an episode of this type in a grand sword & sorcery Epic- does not suffer from this defect. How so? Well he made sure Arjuna got the equivocal faery gift of chakshushi vidya- which enables him to visualize anything in the form he wishes- long before the Kurukshetra battle.  Thus, Krishna- serving here as Arjuna's charioteer- is off the hook for the crap social philosophy in the Gita. Arjuna gets to see things the way it suits him to see things. Krishna pays the price. His theophany- being a sort of condign self-praise- is equivalent to suicide as he himself later reveals.
Prabhupada- a former Gandhian as we could easily guess- and his Socially complacent holier than thou organisation, don't have chakshushi vidya but they too have no difficulty seeing the world in the manner most flattering to themselves. Shame they have to drag the Gita into it. But, if they didn't, Krishna's self-sacrifice would be meaningless. It isn't the case that Christ must be re-crucified in every age so that more shite can be talked. But it is the case that that shitheads we will always have with us. Those shitheads will always endorse certain supererogatory crimes on the ground for the sake of the Rulers of the State on the First floor and the Rulers of Religion on the Second even though those supererogatory crimes are internecine only amongst those denizens of supposed upper storeys and generally arise from epistemological differences of the order of  'who smelt it, dealt it' vs. 'who denied it, supplied it' .