Patriotism and Clientelism

This article is in response to a Spanish blog post by the site, El Republicano. The article in question is “PATRIOTIC MILLIONAIRES ‘: THE RESPONSIBILITY OF HAVING MORE.”

“Patriotic Millionaires” (supposedly) is a political pact of millionaires and billionaires who show their sincerity to the American people by paying more in taxes. The reasoning is that, as the majority of the people depend on public services and social programs, it is the responsibility of the wealthiest of society to contribute more in taxes to sustain these internal policies.

These liberal elites (in the American sense) have a hostility against inequality. I’m not going to get too involved with this point because it’s not something the author focuses on. So, I’ll just say that they commit a fallacy in economics known as the fixed pie fallacy. In addition, the inequality if it has grown enough but the portion of the population part of the upper class (salaries of 100 thousand or more) is at its highest rate.

A central claim of the author is that, in this world, and the United States specifically, we have a selfish attitude:

“The expression ‘is not my problem’ is the mantra of our day. Everyone watches only for their interests, thinking that their actions are theirs alone and forgetting that everything we do living in society affects one way or another in it. Some of the richest and most powerful men and women of the United States, however, have realized this reality, and in front of the tax cuts to the highest fringes of the new fiscal reform promoted by the Trump administration, they have demanded that the tributes be raised. ”

Results for 2016 “CAF World Giving Index”, an organization that analyzes global trends in charity, indicates another conclusion. Americans are the second most generous country in the world, only second to Myanmar. Further:

At a global level, donating money is up this year 

Almost one third (31.5%) gave money to a charity in the previous month of the interview, an increase of 3.2 percent points since 2013. Almost a third (31.5%) gave money to a charity in the month prior to interview – a rise of 3.2 percentage
points since 2013

The trend is greater generosity in all aspects:

Legend: Green is helping a stranger, blue is donating money, and brown is volunteering time; all are a 5-year average

The truth is that it is a myth that the saying of this modern world is “others are not my problem.” On the contrary, generosity was always a crucial aspect of many societies, even in very individualistic and capitalist cultures such as the United States.

And on the other hand, your contributions to the state has nothing to do with your kindness, much less your love for your nation. These millionaires can improve the lives of the poorest through charities or their own foundation like Bill Gates. But there isn’t much sense in thinking that the government is a better option to help, remember that a lot of money is lost in the bureaucracy or in other budget departments like defense.

Nor can we say that raising tax rates means something for “the social and collective nature of the human being.” These contributions say nothing good if forced upon.

It also gives another myth that the rich have an obligation to give more to the state because the state was the one who made their investments and possible wealth. He quotes journalist Alana Samuels saying that “”Every successful person has depended in one way or another on public investment (education, health, infrastructure, etc …) to make their mark.”

This myth comes from the Italian-American economist, Mariana Mazzucato for her free “The State Entrepreneur.” The argument is that the state is the driving force of basic research and innovation. But this is begging the question. The Spanish institute, Juan de Mariana, gives a great criticism:

After decades in which the State has been appropriating half of the wealth that the capitalist economies generate and regulating the other half, it is impossible not to find some vestige of technological entrepreneurship originated by the state action. It would be more than the State, after investing huge amounts of money in its pharaonic research programs, would not have helped to take anything valuable away.

Mazzucato’s thesis is fundamentally wrong, from a historical, theoretical and empirical level. Society is capable of innovating in the absence of an extensive entrepreneurial state.

It is empirically false that, in the absence of the State, society was unable to innovate at rates as fast as today and that the State has accelerated the pace of the innovative process. Even today, most of the technical advances continue to come from the private sector.

In conclusion, the difference between me and the author is philosophical. I believe in voluntary action and organization by private interests. It is not to say that these interests are selfish (or that the public interest is altruistic). Nor is it to say that a society of private interests is totally individualistic. On the contrary, I believe as Edmund Burke and Spencer MacCallum that we are social beings. But what we should cultivate is positive relationships with other members of the community through free association, not by compulsion and legalism.

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