Tuesday, October 17, 2006

Note from my Daughter

My daughter's been saying for some time that she wants to comment here, but I've heard nary a word from her up to now.

But tonight after a nice visit with her over a salad, I received this message via e-mail, rather than through the comments section.

All things work for the best as I am delighted to publish her on my "front page" rather than the comments section anyway. She is a wonderful, thoughtful writer, more self-contained and serious than her often frivolous mom...

So, without further ado, here's Webudaughter, the product of a union between two parents now about as far apart on the political spectrum as two humans can get! Thank you for taking the time to share this, daughter-o-mine: So dear readers, after seeing this, how would you repond?

Congratulations Mom on starting your new blog! I enjoy reading what you have to say even though I do disagree from time to time. It is great to have a venue where you can express your ideas and have others respond.

So I guess I will get started by responding to your recent post of John Tamney’s article: In the article, he sets out to make an argument for the abolition of the estate or “death” tax. He begins by proclaiming capitalism to be a system that rewards entrepreneurs via profits. These profits, he goes on to say, are a direct result of the degree of problems that have been solved and are a direct reflection on the improvement of our overall quality of life from the eradication of any particular problem.

The death tax, he claims, has been an erroneous way for these profiteers to be forced to give back to society, when in fact they have more than paid their debt to society by solving a particular problem. Therefore, case closed ... no estate tax.

My remarks won't be addressing the validity or non-validity of the estate tax. Instead, they will be focusing on his central premise that “absent the profit signal, there’s no way of knowing who among entrepreneurs is doing the most to improve how we live. Profits are a way of keeping score, and the greater the profits, the more problems that have been solved.”

Let me start by saying that I am not against profits or capitalism, but I find Mr. Tamney’s argument flimsy. In his article he outlines YouTube’s unbelievable growth and sale to Google for 1.65 billion dollars as his benchmark for the rationality of capitalism. He goes on to glowingly depict the founders of You Tube as real problem solvers that have added value to society and been rewarded appropriately. He mocks those who would “decry their windfall.”

You say that they deserve this windfall because they have solved a problem that has benefitted society. And I say, hold on a minute and let’s look a little deeper into the issue. For starters, ”a problem is defined in the dictionary as a “doubtful or difficult matter requiring a solution – kind of like getting people successfully out of a burning building, or dealing with the threat of Islamic fundamentalists, or helping children in Africa who are orphaned and starving at an early age because both of their parents have died of AIDS, or slowing the spread of Type II diabetes which is now the fastest growing disease in the world, or finding ways to curb the rising tide of – shall I even say it — Global Warming.

These and many, many more maladies are just some of the real problems that we face today. There is a spectrum of problems, from minor inconveniences to life and death situations. And not being able to successfully send over the internet a video of a dog in a tutu standing on it’s hind legs or a decrepit old woman firing a shot gun in a wheel chair is not my idea of a genuine or serious problem.

It is more in line with trying to figure out what to wear for a Saturday night party. What these young men have done is essentially provide one more avenue of entertainment on the Internet. And I would argue that it hasn’t really made the world a better place. Instead, it has made the world a more comfortable place as well as a more entertained place – but that isn’t necessarily better ...

And let’s face it, the price tag that accompanied the sale of YouTube has nothing to do with any real value that it provides to our society. And it has everything to do with the potential marketing arena that will be captured by the traffic generated on the Website. Therefore, Google is betting on the advertising revenues as herds of people trample to the site to watch mostly frivolous videos. At times – many more times than not – profits have nothing to do with value added to our society and more to do with rewarding the depravity of our society.

Case and point – Howard Stern’s $500 million contract over five years with Sirius satellite radio. Howard Stern is an entrepreneur. And a mighty good one I might add. Is the value that he adds to society worth $500 million? Is he improving our lives? Have you ever listened to one of his broadcasts or seen it aired on cable TV? I wouldn’t give you a nickel for his opinion. As a society we pay a high premium for entertainment, from gambling to pornography to Howard Stern, professional sports, Hollywood movies, and now YouTube. Are the recipients of these profits worthy of them?

There are countless people working as teachers, plumbers, scientists, researchers, doctors, lawyers, accountants, firefighters, diplomats, politicians, actors, directors, etc. to solve both minor and major problems on a personal and nationwide scale daily.

But they never reap the huge benefits and rewards of their creativity and hard work as some others. And that is because life isn’t fair, capitalism isn’t fair. Some people get rewarded more than others. Profits aren’t always a rational thing. And a lot of it has nothing to do with the value or virtue of someone’s work or product, but instead reflects the human need to seek comfort and gratification at any price. So when Mr. Tamney says, “Profits are a way of keeping score, and the greater the profits, the more problems that have been solved,” I don’t agree.

Profits are profits. They can be the result of value added and they can also be the result of base human desires that don’t really elevate the status of society as a whole.

Yes, capitalism can and does solve problems. And it creates other problems, too. It is a human system - complete with virtues and flaws and complexities. I refuse to just glibly defend it’s value without taking a more critical look at it’s realities. Nothing is just peaches and cream in a fallen world, and I for one will not make a false idol out of capitalism although I am grateful to live in a country that operates with it.

Your Daughter

With a comment like that, I would expect you to be starting your own political/economic blog any minute! Thank you so much for taking the time to write this thoughtful piece. Meanwhile, come again soon and often. Makes for lively debate and fun!


kid said...
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Anonymous said...

Well, in many ways I think you're right. Most YouTube videos are frivolous if not downright disgusting. I grant you we live in a fallen world with misplaced priorities everywhere.


If not the marketplace, depraved as it may often be, then who or what?

A centralized government? Powerful dictator? The UN Security Council? The New York Times? Barbra Streisand and the Hollywood elites? and the list goes on.

As imperfect and wretched as free markets are, do you have a better suggestion as to the arbiter of a good verses bad solution?

That, my dear, is my question to you? Please let me know when you come up with an answer.

Anonymous said...

So you too watch silly YouTube videos. And you didn't like my tutu?


Anonymous said...

Nice comments; remember Google said Youtube was worth $1.65B by agreeing to pay that amount; that amount could be absurdly high or low, but reflects what they think it is worth

Truth-Seeker said...

Capitalism is the best friend any consumer will ever have due to competition between providers of goods and services. Our freedom to choose requires our allowing others to also be free to choose. One person deciding what another person must value is the antithis of both capitalism and of freedom.

John Tamny said...

As the writer of the estate tax piece, I figured I should comment. I think we're mostly in agreement here.

Problems such as illness naturally mean more than my ability to watch videos online. Still, the argument applies. Another Forbes 400 member (Patrick Soon-Shiong) has developed a drug for his company (American Pharmaceutical Partners) that will fight cancer in a new, and innovative way. Essentially Abraxane will be inserted into cancerous cells, but will carry with it a "Trojan Horse" of sorts. The cancerous cells will move to the drug, but within it is a cancer killer that will kill the cells.

Importantly, it is access to capital that makes these life improvements available to us. To advocate for the estate tax is to ask for something that will shrink the amount of capital available to the Howard Sterns and YouTube founders of the world, but also the Patrick Soon-Shiongs.

Successful people are that way because they give people what they want. This is something to embrace.