More equal incomes = socialism = poverty for all?

There's a truth behind the idea in the title. But it's not so much the income distribution, but the incentives provided that make an efficient economy. And, taxes are not the only means to influence the income distribution, regulation can do its bit too.

Let's think of football. Clubs willingly pay very high salaries to star players. Does this enhance economic activity by providing a bigger incentive to work? Methinks, not. Rather, the high salaries for the stars draw resources away from salaries for the people needed to make the game run, and also resources away from other worthwhile activities, such as education or investment in renewable energy. It is even questionable whether the players themselves are truely better off.

Which tells me there should be room to adjust the incentives system here through regulation, ie outlaw football player salaries greater than the salary of say the Dutch prime minister. I choose that comparison for a reason, as for public entities and companies that are majority state owned there is precisely such a regulation in the Netherlands.

There are two ways to argue for such regulation, one is belittled as envy by some, and called a desire for social justice by others. The other is to say that far from there always being a trade-off between more equality and economic success, there are in fact situations, where a regulation can achieve both.

Unlike the tax the rich question, which lends itself to partisan arguments we all know too well, about how the party of the right wants to take from the poor to give to the rich, and the party of the left supposedly is out to destroy the economy, intelligent regulation to affect incentives to work, invest and protect the environment and other public goods, is not easily put into a simple yes/no paradigm.

I'll give a few examples of regulation. For employees whose main role is to provide leadership a government imposed ceiling seems to have few drawbacks to me. Their employers benefit, because they have to pay less, and they do not suffer from their employee being enticed to work for the competition through higher salaries. They therefore have to spend more on other things, and with a sufficiently high ceiling, a few hundred thousand Euros, employees will be motivated a plenty to work hard, both by the money, and by the status leaderships roles provide. Don't forget people who have plenty of money still compete to become US president, a role which provides little monetary benefit compared to their 100 million Euro plus fortune.

For entrepreneurs who put their own money at risk for a risky venture, I think the reward of outsized returns is an important motivating component; so here I'd be more careful about regulation that imposes reward ceilings.

For music and literature, I'd restrict copyright severely, and possibly on top of that impose other restrictions, for example, a maximum entrance fee for visiting a concert.

Israel and the Arab Spring

The Arab Spring is one of the most important developments towards world peace and it has motivated me to think again about the danger posed by the unresolved Israel/Palestine issue.

On the one hand, Israel's Jews have a legitimate fear that they will be treated as second class citizens, if they accept a solution, where they are no longer the majority in their state. And they also have a legitimate fear that they might even be thrown out of the Mid East and forced to migrate to Western countries.

On the other hand, the current situation is also clearly unacceptable. Palestinians are neither citizens of Israel, as they would be with proper annexation of the occupied territories, nor are they allowed to form their own proper state. They are therefore second class citizens, unless they choose to emigrate to Western countries.

For the good of everyone, in Israel, in the wider Middle East and for the world as a whole, much more needs to be done I think to force the parties to come to an equitable deal. In my opinion, this needs to involve more pressure on Israel, especially from Western countries. Arab countries should also emphasise their opposition to violence to resolve the issue and equally importantly, show that Jewish citizens have nothing to fear by enhancing the rights of Jews in the Arab world.

And Israel should offer to withdraw completely to something close to the 1967 borders, make everyone inside the new borders an Israeli citizen, and clearly communicate that the long term aim is freedom of movement and equal rights for all, so that in 50 years it would be perfectly acceptable for Jews no longer to be a majority in Israel.

Defending the science and the left/right political divide

What I want to explore a bit more here is the concept of uncertainty. At the activist/left end of the spectrum much of the focus is either on small probability, high impact climate outcomes, or on the near 100% probability that we need to act.

Why is there often so much partisanness in the discusion? Is the other side evil? Out to cause death and destruction because they love to see people suffer, or because they are greedy and heartless and only argue for their own interest?

Methinks these explanations are attractive because of the way evolution has shaped our nature. But, they are also rather inadequate. Much of the debate is done in people's spare time and with very little direct benefit for the participants. I believe people engage in climate debates out of idealism and secondarily for the entertainment value, so it's a mix of charity work and football supporter. Which does not answer though how people decide which side to support, or why there are two sides in the first place. Aren't the facts clear and supportive only of one course of action? Which is where we can come back to the subject of uncertainty and the limits of knowledge.

How can we predict outcomes? For smoking, apart from models and fundamental insights, we can take two groups and compare and see what harm smoking does. But for the probability of predicting ecosystem collapse or nuclear war? There aren't multiple Earths to do controlled experiments on and neither is the past a very good guide. During the Roman Empire there could be no nuclear war. There were no nuclear weapons. This rather limits extrapolation from the past. We haven't had nuclear war for over half a century, so it's a good bet we won't have one in the next month. But how probable is it in the next 100 years?

So, how does this give an explanation for the existence of two sides in the debate again?

There is no rational way to assess the risks of societal or ecosystem collapse or the benefits of technological developments far out into the future.

I tend towards the non activist camp primarily because I love technology and the promise for the future it holds, and secondarily because I am hopeful the world is moving towards complete peace in analogy with the evolution Europe has experienced over the last 50 years. Many other non activist minded people I think are motivated by what they think the free market does for people, and a distrust of the state limiting people's freedom. Activists I think worry about societal instability, as well, but as a consequence of the greed of corporations. And they worry a lot more about ecosystem vulnerabilities. Some of this is about values, sure, but a large part is about implicit assessments of unknowable probilities.

By now you must be wondering about the title I chose. What I am pleading for here is more awareness of the limits of science in deciding political issues, more awareness also of the danger that partisanness leads us to underestimate the reasonableness of opposing views.