I understand the premise, but I would argue that such a thing can not exist, since manipulation for gains is a rational approach to any market. When the goal is to maximize profit, a free market system can be seen as an undesirable setup. For any given player, a market that they can influence to their advantage is more profitable than one void of meddling. That is, a 'free market' requires altruism, and the checks and balances intrinsic to a 'free market' can be overcome with collusion. As a result, regulations are proposed, and a healthy balance is typically the goal. I suggest an eventual 100% marginal rate for reasons of political stability. That is, I think a healthy democracy requires that power not become too concentrated, and in many ways, money is political power. The Marginal Rate in the US has varied considerably, and has at times been over 90%. I'm not sure that there is evidence that it suppressed economic activity. Since the government spends that money, it might be a wash. I'm not really vested in the economic argument. I am more convinced by human behavior, and the consequences of a very disparate society. I'm not worried about the health of the extremely wealthy, but do worry about the centralization of power that comes with the concentration of capital. Regardless of its origins, Central Planning (the interests of few governing many) is usually a bad thing.This is a fundamental tenet of the market, which we might call the "free market" to emphasize that people should be allowed to participate without coersion or external meddling.
Why worry about the health of this capitalist? He will be fine.
I would argue that such a thing can not exist, since manipulation for gains is a rational approach to any market.
What kind of manipulation? I might exaggerate the quality of my shoes, or negotiate with the farmer to get an extra bushel of wheat, but we still make a voluntary exchange, each of us judging that we are improved by the trade, or we make no exchange at all.
a 'free market' requires altruism
Why so? I may despise the farmer, and yet crave his wheat. People do business every day with strangers, without caring particularly about their welfare.
the checks and balances intrinsic to a 'free market' can be overcome with collusion
Collusion isn't that reliable. There are substitutes available for the vast majority of privately provided goods and services, and providers must compete on price. Such monopolies as have appeared typically dominated the market by underpricing the competition or enlisting the aid of government to keep the competition down.
I'm not sure that there is evidence that it suppressed economic activity.
Such evidence would be difficult to come by. People would still work up to the point where they don't consider it worthwhile to work more. I find it plausible that a law which changes ownership of large amounts of wealth will affect people's behavior, and to the extent it changes behavior, it will be in the direction of avoiding the change (by taking more leisure, incorporating overseas, using tax dodges, and cheating). There may be subtle unseen effects, as well. A college student, seeing that there is no additional monetary benefit to pursuing a very-highly-paid profession, might decide instead to pursue a less-highly-paid field.
Since the government spends that money, it might be a wash.
It might be a wash, or you might get taken to the cleaners. No sensible people consider donations to the Treasury a realistic act of charity or investment. People spend their own money more carefully than they spend other people's money. And it's not automatically beneficial just because funds are spent -- government often spends money on things taxpayers find objectionable. In particular, government is frequently an enabler of "the centralization of power that comes with the concentration of capital."
IMO my position comes down to this: I don't see a substantive difference between private or governmental players when it comes to the will or ability to cause great harm. I don't think the market forces always work for the good, and don't think a government can be responsive to its constituents without a healthy market. People work to their advantage, and no system is perfect. History is full of examples of abuse of every system imaginable. My main point is that I see high concentration of wealth as a danger to a representative democratic system. Taxation is one way that extreme disparity has been traditionally averted. Other than that, it usually takes a revolution.
In the real world, "no system is perfect" as you say and crime will be a problem to deal with. But consider some of the foulest of history's great harms: • World War II - 40 to 70 million souls lost • World War I - 15 to 65 million • Great Leap Forward - 15 to 55 million • Japanese Conquest - 5 to 30 million • Russian Civil War - 5 to 9 million • Bengal famine - 4 million • Napoleonic Wars - 3.5 to 7 million • Holodomor and Soviet Famine - 2.5 to 8 million • Second Congo War - 2.5 to 5.4 million • Cambodian Genocide - 1 to 3 million These events are a sample of the worst anthropogenic disasters
which were unambiguously prosecuted by government, and therefore legal. There's an argument that some of these, most obviously WWII, were horrific but could have been even worse without government intervention. But most of these were due to adventurism, conquest, and social experimentation in which the death and suffering of others was an accepted part of the plan. Slavery is the only horror I can think of that compares, but even when it was commonly accepted by governments and practiced widely it did not claim anything like the hundred million victims in the above list.My main point is that I see high concentration of wealth as a danger to a representative democratic system.
Fair enough. I'll just try to nudge you on one point.I don't see a substantive difference between private or governmental players when it comes to the will or ability to cause great harm.
In my farmers and cobblers fable, all human interaction is voluntary, based on mutually beneficial exchange. No one gets hurt by other people.
Point taken. However, I am not sure to what extent it is the nature of the government, the scope of the government, or the structure of the government that is the problem. There are conflicting examples across the spectrum. No doubt a government with a large scope, a bad nature, and a rigid structure is the worst. Sometimes the government rules at the will of the people, sometimes at the will of the few, and sometimes at the will of the market. Mostly, it is a mixture of all these. Sometimes the best solution is limiting the power and scope of government, but I think it depends upon the question at hand.