24 July 2011

The State, Its Revenue, and Its Enemies

Let me think this through in simple terms, fitting for a simple guy like me.

I have a credit card that has a $6,000 credit limit. I go along happily spending for awhile until one day I find that I've hit the limit, and stores/bars/vending machines are spitting my card back out at me.

So I scrape together $1,000, pay it, and now I'm below the limit again. I can go back to using my plastic and (bonus), the credit card company, happy to have received the $1,000 payment, increases my limit to $10,000.

Something like that has been the history of the US legislatively imposed Treasury debt limit, and various increases thereof.

What do I do for a living? I sell widgets, let us suppose.  I work on commission, so the more widgets I sell, the more money I get. [Okay, this part doesn't seem at first blush to fit the analogy, but it will in time. Work with me here.] The problem is, how to raise that $1,000 quick so I can (a) render my card limit immediately irrelevant and (b) likely get it raised into the bargain?

Along comes someone named Lancelot Giggler who tells me that I could sell a lot more widgets if I charged less as a commission.   Perhaps I could offer some portion of my commission as a rebate to buyers.   Enough new buyers will mean a higher total income, means I pay the credit card company.

Now, let's imagine that there are a variety of different opinions about the social value of Faille and the widgets he sells. There is a faction who believes that if I died, or (let's be less bloodthirsty here) if I lost a lot of weight because of a starvation diet, and wasn't able to sell widgets any more, then the world would be better off, because the social net value of widget salesmen, or of chubby ones anyway, is negative.

So we have Lancelot Giggler on the one hand and we have the Faille Starvers on the other.

This is where I get confused. Aren't Giggler and the Starvers taking up quite contrary positions? If Giggler is telling the truth about the effects of commissions cuts on my sales, then he is describing a way in which I can make more sales and remain chubby and prosperous. If the Starvers believe him, they'll want to dissuade or prevent me from doing that.


1 comment:

Blogger said...

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Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.