Left2Right

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Posted by: LPFabulous

This is good. I'm always amazed by the way you are capable of arguing for liberal principles in ways that make sense to conservatives. But that's because I'm still not sure whether your soul is a conservative Democrat or a liberal Republican.

Posted by: LPFabulous | Jan 26, 2005 5:53:13 PM

Posted by: tcobb

I really doubt that there are many people who would object to providing government aid to the destitute so as to prevent them from starving, freezing to death, or dying from some infectious disease. The devil, as always, is in the details. Just what level of "poverty" is sufficient to trigger the aid, and what obligations can or should be laid upon the recipients of such aid? And how should it be financed? These are the real questions over which the left and right disagree. The poor will always be with us, especially if we define them as those whose income falls within the bottom X percentage.

I think one of the big divides between the left and the right is that many on the left seem to view poverty in relative terms whereas the right tends to view it in purely objective terms, that being that if your basic biological needs for survival are being met then no, you are not entitled to a subsidy from the government.

Posted by: tcobb | Jan 26, 2005 6:58:56 PM

Posted by: Tommaso Sciortino

Oh come now, LPFabulous. This stuff is all in the dead center of mainstream Liberal thought, indeed, it motivates it. Sure, not every rank and file Democrat is an expert in this kind of political philsophy, but I'm sure the same thing is true of Republicans.

Posted by: Tommaso Sciortino | Jan 26, 2005 7:25:51 PM

Posted by: Paul Deignan

This line of argument begs the question of what the relationship should be between the governed and government in a democratic society by assuming that the legitimacy of taxation for social insurance is unique to authoritarian governments.

We might all agree that taxes are appropriate and necessary for the maintenance of a democratic society. This does not imply that the relationship envisioned here is justified. For example, the argument against natural law assumed a fatally flawed definition of possible natural law rationales. It is perfectly possible to justify social insurance on ideas rooted in natural law. The fact that the object of an individual's free will desire may be frustrated on occassion does not imply that this type of interaction is not a basis for the functioning of the wider society. The very fact that we seek a reasonable solution to egalitarian societal needs is a demonstration that "natural law" ideas are at play. Why would one want to discredit reason and free will?

So beware, the issue at hand here is not taxes, it is individual freedom and liberty.

Posted by: Paul Deignan | Jan 26, 2005 9:03:46 PM

Posted by: Rob Kar

Tommaso--What is distinctive--and, yes, distinctively amazing, in my view--about what Liz Anderson is doing is the following:

She seems to be developing a way of reorganizing and reframing the principle presuppositions of capitalist economies in ways that might (a) allow capitalist economies to better flourish without (b) pitting so-called 'leftist' egalitarian/fairness concerns against so-called 'right-wing' economic values. She is not--as far as I can tell--just drawing on an arcane body expertise in political philosophy to say things we all know, perhaps with added technical precision. Rather, she seems to be developing an important and unarticulated political possibility for us, one that may even be capable of garnering broad-based political support, healing a number of unfortunate political tensions in our culture, and helping our system to flourish in one fell swoop. If cashed out in the right way, the position might even attain a degree of stability and widespread moral support that our present system has not yet been able to attain.

The position is, I agree, rooted in a number of classic texts and thought. But--at least as far as I can tell--Anderson's particular combination and development of these ideas is both distinctive and exciting. (Here I am lumping this post in with her earlier ones.)

In any event, I genuinely look forward to seeing the next steps as this position develops!

Posted by: Rob Kar | Jan 26, 2005 9:13:44 PM

Posted by: tcobb

The very fact that we seek a reasonable solution to egalitarian societal needs is a demonstration that "natural law" ideas are at play.

I would submit to you that capitalism and egalitarianism don't mix. That is one of the fundamental problems that the left faces. Economies which are not based upon a capitalistic model have been shown to be disasters, and enforced egalitarianism (and there is no other kind) strangles the dynamics which makes capitalism work. Perhaps there is an undiscovered economic system that can rival the productivity of the capitalist model and somehow, at the same time, be consistent with egalitarian principles, but I won't be holding my breath waiting for it to arrive.

Posted by: tcobb | Jan 26, 2005 10:08:40 PM

Posted by: rtr

If “the claim "I deserve my pretax income" is not generally true”, it necessarily follows that “someone else deserves my pretax income” is also not generally true. Nonetheless, the quibbles with this post are at first glance seemingly minor in comparison to what I regarded as major flaws in the last post, probably because deserve has nothing to do with it. Something is one’s property or it is not. But, for one thing, income is in some way different than property generally. Old ladies living alone cannot be kicked out and have their paid for homes auctioned to pay property taxes when only income is being taxed. And lets not forget that capital gains taxes and taxes on interest are double taxation on income that was previously taxed. Taxation is out of control at all levels of government. It has been abused to the maximum it can be abused which is why there is no money in the social security trust fund (if tax rates were set at zero tomorrow all the money that was previously allegedly paid into the trust fund is negative), as taxes allegedly raised for the purpose of that program have been used to pay for other programs.

It’s good that the left recognizes that 90% income tax rates would destroy capitalism and make serfs of the citizens. Nobody is going to take them seriously unless they begin by stating that a 100% tax rate is theft, whether a democratic majority votes for it or a dictator declares it. Still, no explicit limits have been put on taxation, whether it is maintained as theft of not (which by definition it most certainly is unless as I pointed out in the last post one was to similarly maintain that forcing another to have sex against their will is not rape), and until there are inviolable in stone limits placed (which could in fact be zero), there is nothing preventing a majority from imposing 100% tax rates which is pure theft, plain and simple.

“Social insurance” may be a noble goal but unfortunately it is just as arbitrary a purpose as “cause we feel like it”. Not to mention it is not insurance either. It can’t be escaped that taxation is compelling involuntary action. As such, at a minimum it needs to be minimized and explicitly minimized or tyranny is inevitable. It’s obvious that the left believes 40% theft rates aren’t past the minimum. Universal health care could put them towards 50-60%, pretty much guaranteeing relative stagnation if not relative economic destruction (especially with fake monolpoly money fiat currencies). It grants similar justification for a “rich” minority to steal from a “poor” majority, by any forceful means whatsoever. “Liberal” leftists who now seek to co-opt the word “libertarian” to describe themselves are living in a socialist dream world if they think 100% tax rates wouldn’t be regarded as pure warfare which would lead to the destruction of society.

At present we are far beyond any reasonable minimum measures of taxation. Corruption and waste is rampant throughout. One only needs look at the 70% "administrative" cut of public school funds. Theft is theft and taxation only occurs with the use of violent force to collect. It criminalizes behavior which has caused no harm to society.

The left needs to take their heads out of the sand. The middle class is overtaxed. There is not enough money from taxing the rich nor is it just to treat them unequally under the law in order to bring about universal health care. The government’s accounting standards are massively fraudulent and attempting to hide potential forthcoming disaster brought about by exorbitant taxation.

The use of the word “MY” in the phrase “my pretax income” is a *lie* when stated by the left. If there is a possessive such as my, your’s, his, or hers, in front of something than it is by definition owned property by the referenced possessor. The left doesn’t have the guts, as it would be political suicide, to tell voters that their income is not their income but the “State’s” or someone else’s income. Taking it by any means against one’s will is irrefutably by definition theft. Of course, theft in every instance makes the thieves and the beneficiaries of thieves better off, or less poor, in the short term *at the expense* of those who have been robbed. It is in every instance not trade, whereby both parties to the exchange are by definition increasing their subjective wealth. As such calling it not theft or social insurance is a clear misrepresentation at best.

Those who wish to pay higher amounts of taxes can do so without forcing others to similarly be subject to theft. They are free to voluntarily contribute their own property and income to the extent they wish. As they wish to impose their socialist “insurance” communes on society at large they are nothing but totalitarians who pay no heed to the violent lessons of the twentieth century and all of history. How much further can taxation go before society breaks down? There are no shortcuts to voluntary real insurance or voluntary real charity.

Posted by: rtr | Jan 26, 2005 10:53:27 PM

Posted by: John Turri

Elizabeth,

1. I have a minor question about this claim:

Claims of desert are essentially backward-looking. They aim to reward people for virtuous conduct that they undertook in the past.

I would have thought that at least some claims of desert are based solely on one's nature. For instance, you deserve to be treated respectfully simply in virtue of the fact that you are a person. This has nothing to do with past performance (virtuous though it may be!).

That said, this doesn't appear to affect the crucial claim that the market does not effectively track claims of moral desert. All it shows, I think, is that your characterization of moral desert isn't essential for your argument.

2. You concede that the claim "I deserve my income" would, if true, be "a powerful moral claim against taxation for redistributive purposes."

Suppose we grant your claim, which seems right to me, that the market does not effectively track moral desert. From that it does not follow that any given person does not actually deserve his or her income. In any given case, the person may have been awarded just what they deserve.

Aren't they just lucky to have gotten what they deserve? Yes. Yet they still deserve what they got, even if they were lucky to have gotten what they deserve.

Question: would it be unjust to tax such a person's income for redistributive purposes? It seems to me that you're committed to answering "yes." But perhaps I'm overlooking something.

Posted by: John Turri | Jan 27, 2005 12:33:57 AM

Posted by: Acton

Reading Ms. Anderson's post, I was finally rewarded in waiting for the Archimedian point. At the end of this post, she seemed to offer up her bedrock views on (1) where the burden of proof lies vis a vis justifying taxation, and (2) the proper social goals of the State. This is where I ran into problems.

As to the burden of proof, EA writes:

"And so far, no argument that people have a moral claim to their pretax incomes, sufficient to preclude taxing it for insurance purposes, has survived critical scrutiny. Certainly, "I deserve it" doesn't."

Since claims about "desert" of pretax income aren't helpful (one doesn't properly deserve or not deserve this income, the additional claim that there is an "urgent need" for social insurance against the vissitudes of capitalism means that the burden of proof regarding justifying taxation is on the taxed, rather than the State.

On the other hand, one can agree with the need for insurance against the volitility of capitalism on prudential grounds, and still argue that this need is irrelevant to the quetsion of justifying taxation. To connect the two, one needs another premise, which Ms. Anderson helpfully provides:

"My goal is not to ensure that people get what they morally deserve. It's to avoid gratuitous suffering, and to ensure that everyone has effective access, over their whole lifespan, to the means needed for a decent life."

I hope Ms. Anderson forgives me for this, (it ins't meant as an ad hominem) but in an otherwise careful and intersting post, these are weasel words. Not because the sentiment is flawed (who would disagree with avoiding *gratuitous* suffering?) but because it is the the least transparent part of her argument. Indeed, it is hard to interpret the above as anything other than a far-reaching and extravagant welfare right generated out of thin air. The most charitable interpretation I can generate is that Ms. Anderson is interested in the equal opportunity of all to participate in market exchanges as they may, in which case her point is a rhetorically fancy way of saying something uncontroversial for classical liberals such as myself.

On the other hand, if one follows the thread of Hayek's arguments regarding the informational funciton of capitalism, and adds in the prudential need for insurance against volatility, the result is optional private insurance. Optional, because the risk assessment and the lexical value of prudence depends on individual value assessments of risk, and local knowledge. Private, because the type of insurance and the risk assessment required for such insurance is local. Spontaneous cooperation (to diversify risk) is possible, permissible and perhaps advisable on prudential grounds, but it isn't clear that it is obligatory. And it is a thin reed to balance the burden of proof of taxation upon.

OTW, it is a *pleasure* to read a scholar who treats Hayek so respectfully, even to respectfully disagree. Thanks, EA!

Acton

Posted by: Acton | Jan 27, 2005 7:38:37 AM

Posted by: Paul Deignan

I would submit to you that capitalism and egalitarianism don't mix.

I disagree and I believe our history of capitalism here in this country bears me out. Pure capitalism requires regularization in order to maximize wealth. Wealth is created, ultimately, by people who must be motivate to work and innovate. It is human nature that need and the likelihood of satisfying that need drive productivity.

For instance, why should I invent and develop some new creation for market if there is no compensation to be had for the tedious work that is invariably necessary? Why should those that own vast wealth care that their projects stimulate others not related to create and compete? The optimal mixture of incentives is not concentrated in the few nor spread too thin. Pure capitalism leads to concentration, pure egalitarianism to lack of incentives and ultimately to depletion. Both are necessary for the optimal mix.

The problem with this post is not that social insurance is not desirable; it is that the method proposed of obtaining that insurance is to destroy the information-responsibility linkage between the individual and the insurer. This is counterproductive. The minimization of societal risk requires that the individual have a determinative role in the distribution and generation of the insurance fund. His stake in the economic game must be respected.

Posted by: Paul Deignan | Jan 27, 2005 8:18:28 AM

Posted by: oliver

Conservatives complain about the windfall (or incentiveless) aspect of tax-subsidized welfare distributions. How about instead of the windfalls, we tax the lucky and the unlucky alike according to a progressive scale that goes to negative tax rates at the unlucky end? The IRS takes nothing from the unlucky but gives them an "unluck" bonus calculated as a percentage of their earned income. So the IRS processes more or less the same kind and amount of paperwork as ever, but mails out bonuses instead of refunds and passes a comparable amount of revenue to the legislature except for the welfare component which the IRS will already have distributed. I'm assuming some progressive tax rate with a negative end could be concocted which still leaves an incentive to work. We don't want people to "opt" to work part time flipping burgers knowing they'll make as much after taxes as the full time meat packers.

Posted by: oliver | Jan 27, 2005 8:56:00 AM

Posted by: D.A. Ridgely

If no one has a per se entitlement to his accumulated wealth or current earnings, then it would appear to follow on the same grounds that no one else has such a claim on it, either. If no one else has such a claim, it would appear to follow that no collection of others (e.g., a democratic majority) would have such a claim. They can, of course, exercise power to take such wealth or earnings and they can rationalize their acts with utilitarian arguments, but in the sense of moral justification which utilitarian arguments necessarily fail, they have established no moral right to do so. If Ms Anderson wishes to make that argument, I agree.

Hayek (like Locke) aside, it is one thing to say that people do not absolutely deserve the rewards or risks they experience, quite another to say they do not in general deserve them at least as superior claims over others’ claims.

Markets are dynamic but not necessarily or even generally as “volatile” as that term connotes. Ms Anderson suggests by her choice of words that market prices are constantly rising and falling wildly. Not so. Some markets have high Betas, some are quite stable. Business cycles continue to exist, and there are irrational influences that temporarily affect both individual markets and the market in general. In fact, however, there is no reason to believe that the overall growth of wealth in market economies over time is itself accidental, and in that sense the market definitely does reward past good behavior in the form of prudent long-term investing (even, e.g., by prudently taking advantage of business cycles by dollar cost averaging, etc.).

Even accepting that “sheer dumb luck” is an inevitable factor in our lots in life, it remains probabilistically true that prudence and diligence, etc. do pay off for the vast majority of people the vast majority of the time. Even if such virtues are merely instrumental virtues and even if our contingent universe admits of no guarantees, it would be imprudent to reduce incentives promoting prudence and diligence or to increase incentives to those who may choose to accept the “effective access, over their whole lifespan, to the means needed for a decent life” without need of such instrumental virtues. (How many would-be philosophers might there be in a society that guaranteed a “decent life” to anyone who chose to forego a materially richer life for the life of the mind? How many of them would feel the need even to take their studies seriously or to be, even by the standards of the academy, “productive?” )

As others have already pointed out, “gratuitous suffering” is question begging. If we take Ms Anderson’s concerns about the magnitude to which “sheer dumb luck” determines our lot in life, what sort of suffering would not be gratuitous?

Prudent people who can afford to do so already buy insurance sufficient to their believed needs. Insofar as they or the natural objects of their affection are also the beneficiaries of such insurance, they do not need the state to meet this need. This leaves those who cannot afford such insurance (especially including children) and those who can but choose not to do so. Since by her own argument none of us deserve the minimum decent life Ms Anderson would have us provide, it follows that at least the third category have no moral claim to be so provided and the only argument she can offer is that there would be enough such people living in sufficiently dire circumstances without any hope of a better future that they would threaten the entire society. If that is her position, she should say so cleanly.

Finally, I rather strongly suspect that Ms Anderson wants to wring a universal health care right out of all of this. If so, and even if her desire is to establish some mix of private and public care, how would she mitigate against the extent to which government intrusion in an otherwise private market would significantly skew prices as information?

Posted by: D.A. Ridgely | Jan 27, 2005 9:06:10 AM

Posted by: enzo rossi

In a hurry: EA's arguments hold if we maintain that the sort of desert in "I deserve my pre-tax income" is moral desert. But who said that? Couldn't it be the sort of desert involved in playing games? Specifically, the sort of games where luck plays a considerable role. That, after all, is what capitalism is. It's not a way of enforcing a moral code, but a system of rules (just like a game) designed to regulate the ways in which we become entitled to certain goods.

Posted by: enzo rossi | Jan 27, 2005 9:31:54 AM

Posted by: oliver

I think the riskiness of capitalism is underappreciated, because there are so many real rags-to-riches stories and because so many rich investors just get richer. But of course many people are just born rich, and then even the rich who become rich only on a string of investment bets have at least some form of insurance (e.g. a credit line) to help them borrow their way out of unlucky swings that would otherwise end their streak and lifestyle and socio-economic status. Even Nobel economist-advised hedge funds like LTCM and entire governments like Mexico's, despite all the talent they bring to bear, suffer bad luck and survive only through bail-out loans. I guess most of the evidence of the riskiness of capitalism gets displaced from everyday personal experience to rare and abstract headlines, and so we credit wealth too much to smarts and not enough to the combination of luck and social responsibility.

Posted by: oliver | Jan 27, 2005 10:51:30 AM

Posted by: baa

Perhaps some people who speak of natural property or of deserving their income mean to assert thoroughgoing philsophical views of right and desert. The majority, I suspect, simply express the common-sense view that a there should be a strong presumption in favor of rights to property acquired through consensual, market transactions. Don't we all believe this?

Someone else above has analogized external property to the body. If we explore this anlogy, we find that a conception of self-ownership as "natural" or as "deserved" doesn't rule out Government conscription in times of war. Yet, we often feel that the right a person has to their own body and time creates a substantial burden of proof. If the government (or anyone) wants to make demands on our body, the case must be compelling.

If we apply this kind of reasoning to property, we would replace the claim "I [morally] deserve my pre-tax income" (generally untrue), with "I have better claim to dispose of my pre-tax income than does someone else." Would we agree that the latter is generally true? If so, does it not have implications for taxation?

Posted by: baa | Jan 27, 2005 11:33:21 AM

Posted by: Martin James

I think Elizabeth Anderson's reasoning at heart always gets back to unspoken moral principles that she assumes are noncontroversial.

I am always amazed at the lack of respect for luck. If there one thing that people certainly deserve it is their luck. Is anyone unlucky at love that doesn't deserve it?

I have yet to see a winner of a raffle or prize or gamble that didn't feel as entitled to that money as money made with sweat. Usually they think they deserve it more. After all, anyone can make money through work, but it is a person's destiny to be lucky or unlucky.

More importantly, I think her assumptions about what I can only refer to as the "inevitableness" of a state overstate the contingency and maleablility of states.

States are a state of mind. They are a social fiction of habit and history. Anderson shifts back and forth between saying we should prefer states because they make us secure and wealthy and we must have certain types of states because they are moral.

I just wish she was more direct about where the morals come from.

Take the following case. Let's say that there are 90% of "A" people and 10% "B" people. One state that treats A and B equally has 2% real growth. A person comes along and shows that if we exile the B people we can earn 3% real growth.

I think there are people that think it is moral to exile the B people and people that think it is not and that there is no noncontroversial way to decide the matter.

Andersons' posts seem to get caught up in lots of detail that could best be summarized as "It is my opinion that a decent life for everyone would be a good thing" and left at that.

I think that all of our moral theories, liberal and conservative alike, are inadequate to the understanding of the role of violence in the world. As we can see in Iraq, the Balkans, Russia, China, Rwanda, California, etc. states are still made with iron and blood. And the primary actors in these struggles are frequently irrational by the lights of the other actors.

One can see this inadequacy most clearly by replacing every use of the word state in Ms. Anderson's posts with respectively "world-state" or "neighborhood". While society seems necessary, whether that society is a world-state or a neighborhood is problematic in the extreme.

How does one choose sides in a civil war?

Unless one puts this question at the top, understanding everything else about society is neither rational as theory nor explanatory of reality.

Our situation and our destiny is how to create a society or a social contract when we recognize that it is conflict and violence all the way down.

Posted by: Martin James | Jan 27, 2005 11:55:37 AM

Posted by: BC

You've still only gotten us to something like Milton Friedman libertarianism (w/ negative income tax), not to Rawlsian social democracy, which, I take it, is what the Left wants.

Posted by: BC | Jan 27, 2005 11:56:47 AM

Posted by: miab

rtr writes: "Something is one’s property or it is not. "

Pithy, but false.

Ownership interests consist of the proverbial "bundle of rights," and only rarely, if ever, does someone have every possible right in that bundle.

Some of these limitations on my ownership interests are consensually contractually created, such as a stockholder's agreement limiting my rights to sell or a mortgage putting oodles of limits on what I can do with my house.

But most of these limitations are not consensual contractual limitations--

Some are contracts of adhesion -- such as the prohibitions on copying and on charging people to view, that limit my property interest in the Disney videotape I "own".

Some reflect what we think is a pragmatic incentive structure to keep the economy moving, such as the "use it or lose it" risk of adverse possession that limits the "usage" part of my bundle of real estate property rights by excluding long term non-usage from the bundle, or the rule against absolute restraints on alienation of corporate stock, that excludes from that bundle part of my transfer rights -- namely, my right to issue/sell stock of my company subject to the specific conditions I want to put on it, or the expiration periods on intellectual property, that limit that bundle of property rights to a specific period of time.

Some are customary, such as my very temporary possessory interest in a parking spot on the street -- where I hold so few of the pieces of the bundle-of-rights that we don't usually think of this as ownership. The law would enforce that possessory interest if someone tried to tow my car out of the way so he could park there, but pretty much every other stick is absent from my bundle.

Some are part of the way our current laws reflect current moral views of what I "ought" to be allowed to do, such as limitations on my right to sell my body, or my right to use my land to grow pot.

Some, such as environmental limitations on my use of my land reflect the feeling (for some, drawn from the bible), that we are stewards of the land, and that the land is not transitory, while any given owner of it is, and that therefore it should not be permanently maimed.

Some, like tax liens on my house, or taxes withheld from my paycheck in order to pay for social welfare programs, reflect both a moral notion of taking a bit of the cruel edge off of pure capitalism, and a pragmatic notion that it minimizes the risk of an uprising of the peasants to overthrow the rich.

There's not much, if anything, that you do actually own 100% of the rights to. Any one of these limitations might be right or wrong, a good idea or a bad idea. But why is society's judgment, acting through the state, that taxation for social welfare is a pragmatically and morally sound reason to put a limitation on our bundle of property rights, *categorically* different from the various pragmatic and moral justifications for other exclusions from that bundle?

Posted by: miab | Jan 27, 2005 12:00:13 PM

Posted by: oliver

Huh. Thanks BC for Friedman's name and key words "negative income tax." Apparantly the Johnson administration seriously considered it. Here's a link
http://www.econlib.org/library/Enc/NegativeIncomeTax.html

Posted by: oliver | Jan 27, 2005 12:05:35 PM

Posted by: Achillea

I'm assuming some progressive tax rate with a negative end could be concocted which still leaves an incentive to work.

This strikes me as a rather large assumption. Please correct me if I'm wrong, but I translate 'progressive tax rate with a negative end' to mean 'the more money you earn, the higher the percentage of it taken in taxes ... but the government will pay you to earn very little.'

Posted by: Achillea | Jan 27, 2005 12:37:30 PM

Posted by: John Turri

D.A. Ridgely,

there is no reason to believe that the overall growth of wealth in market economies over time is itself accidental, and in that sense the market definitely does reward past good behavior in the form of prudent long-term investing.

The overall growth of wealth in market economies over time might not be accidental, but how does that relate to whether individuals deserve their income? The "overall" perspective might be in terms of decades or even centuries, with lots of unpredictable cycles in between. So it's unclear, to me at least, whether such "overall predictability" implies anything at all when it comes to an individual's long-term planning.

e.g., by prudently taking advantage of business cycles by dollar cost averaging, etc.

What?

it remains probabilistically true that prudence and diligence, etc. do pay off for the vast majority of people the vast majority of the time.

Could you please reveal your evidence for this rather striking claim?

Posted by: John Turri | Jan 27, 2005 12:50:22 PM

Posted by: oliver

"it remains probabilistically true that prudence and diligence, etc. do pay off for the vast majority of people the vast majority of the time"

until the market crashes and most people suffer terribly. What frequency of sacrificial generations are we willing to accept in return for the prosperity of generations in between? Catastrophes happen, and thus was invented insurance, which paved the road for capitalism.

Posted by: oliver | Jan 27, 2005 1:01:21 PM

Posted by: Nick

Dollar Cost Averaging - DCA

The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares when prices are high.

Investopedia Says: Eventually the average cost per share of the security will become smaller and smaller. Dollar cost averaging lessens the risk of investing a large amount in a single investment at the wrong time.

Posted by: Nick | Jan 27, 2005 1:10:41 PM

Posted by: John T

EA seems addicted to straw men arguments. In arguing against natural rights theory she ignores the fact that the Framers also ignored it,note I say the framers and not the men,some of whom were also Framers who wrote and fought for independence. She uses Locke as a battering ram,albeit a well edited battering ram,but then says she disagees with him. I am doing this from memory as I don't wish to wade thru the Serbonian bog of her arguments a second time. What she does to Locke she also does,in my readings,to Hayek. By the way EA thanks for linking us to Amazon,do you work on commision? In quickly reviewing some of the same complaints crop up. It is generally granted that soe sort of social insurance should be provided,leaving aside moral considerations for a moment,if only to keep the peace and as Bennett Cerf is reputed to have said to prevent the needy from killing us. The question is,and wearily remains so,how much. There is much to dispute in EA's long winded saga[is it over,if not put me out of my misery], a couple of examples to follow,but remember the Serbonian bog. Somewhere in one of her epic postings she mentions bankruptcy courts and implies or states that this is in fact a surrender or loss of rights. If I may pull together my shatterd mind for a moment just the opposite is true. Although it was great fun on the part of the lender/seller to have a debtor flung into a feces filled and rat infested hole and watch him slowly rot it occured to someone that it was better to salvage a portion due him. Which goal the debtor could not assist him in if he was squatting somewhere covered in shit. Hence the genesis of bankruptcy courts,which by the way also protects the debtor,aka the sacred little guy. As to Hayek,suffice to say that EA scants his position on progessive taxation which must have or should have a bearing on her argument. Perhaps she would care to elaborate on that. It's reassuring of EA to throw capitalism a bone,unfortunately it's a bone with a string on it. Let the strong continue,let the weak drop out. Today I'm weak.

Posted by: John T | Jan 27, 2005 1:11:50 PM

Posted by: oliver

If national and/or global market collapse weren't a real and persistent threat, the United States wouldn't spend so much as it has bailing out the creditors of (other) debtor nations like South Korea, and wouldn't care nearly so much about who controls oil in the Middle East.

Posted by: oliver | Jan 27, 2005 1:12:40 PM

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