In the ancient world, invading armies were mostly men who, if they won, stayed and took over the top status slots in the new society. After a few generations, the locals would almost completely submit, and see invader descendants as the highest status elite members of “us”.
It is not reasonable IMO to describe conspicuous consumption that people indulge in to enhance their self regard as a "tax".
Yes, it's dead weight, caused by vanity. But a tax is something imposed by one group (usually the leadership) upon another (often the masses).
But you also said "These elites would of course charge a price for their support, and such prices would add up to an elite tax on the society." (My emphasis.)
This, it seems to me is an explicit statement of the presence of a tax in the normal sense of the term in that the elite is said to be imposing ("charging") a tax. This is quite different from the dead weight caused by wannabes trying to keep up with the Joneses.
Do patent trolls meet your definition of an elite extracting tax from the Internet industry? Measuring their take may not be terribly hard, at least in terms of fees (cost of lost opportunities is much harder). Or are you thinking more of VCs, IPO discounts, and the like?
I think he means tax not in the sense of money flowing to the state to be spent of e.g. war. I think he means it more as waste percentage or a kind of deadweight loss for the society.
"When war was important, for example, societies that defined status in terms of military accomplishment had in essence a lower tax, and thus a competitive advantage over rivals.
I don't see any way in which a lower tax would provide a competitive advantage over rival societies! Could you clarify why you think this should be true? Thus, I dispute the use of your word "thus". ;-)
It seems to me that the size of the tax is irrelevant. What is more important is what use the available riches of the society are put to.
For example, suppose the elite collect a large tax, but they spend a large portion of their excess wealth to raise and arm armies to fight a war in order to keep themselves in power. That seems to me much more likely to provide a competitive advantage over a rival than a lower tax.
Even if the tax collected is not used by the elite for this purpose, the remaining wealth of the society would likely be available to fight a war. And if that available wealth should exceed that of its rival, that would seem to me to provide a competitive advantage, no matter how high the tax was.
In the second world war, the US went on a major bond-selling campaign to fund the war. This could easily be seen as such an elite tax, which went directly to the "military-industrial complex". But the total funds spent to support the war effort certainly provided the US with a competitive advantage that helped win the war.
I found your usage of the word “tax” to mean “waste” very confusing, which I did not understand until reading the comments.
A tax is often seen as zero-sum where one party benefits at the expense of another, however societal waste is just a negative loss.
Apart from that, I am very much enjoying reading your articles about status.
Disclaimer: older geeky engineer type!
It is not reasonable IMO to describe conspicuous consumption that people indulge in to enhance their self regard as a "tax".
Yes, it's dead weight, caused by vanity. But a tax is something imposed by one group (usually the leadership) upon another (often the masses).
But you also said "These elites would of course charge a price for their support, and such prices would add up to an elite tax on the society." (My emphasis.)
This, it seems to me is an explicit statement of the presence of a tax in the normal sense of the term in that the elite is said to be imposing ("charging") a tax. This is quite different from the dead weight caused by wannabes trying to keep up with the Joneses.
Do patent trolls meet your definition of an elite extracting tax from the Internet industry? Measuring their take may not be terribly hard, at least in terms of fees (cost of lost opportunities is much harder). Or are you thinking more of VCs, IPO discounts, and the like?
> How High Our Elite Tax?I think you dropped an Is
Yes; fixed.
Yes, Gunnar is right.
I think he means tax not in the sense of money flowing to the state to be spent of e.g. war. I think he means it more as waste percentage or a kind of deadweight loss for the society.
"When war was important, for example, societies that defined status in terms of military accomplishment had in essence a lower tax, and thus a competitive advantage over rivals.
I don't see any way in which a lower tax would provide a competitive advantage over rival societies! Could you clarify why you think this should be true? Thus, I dispute the use of your word "thus". ;-)
It seems to me that the size of the tax is irrelevant. What is more important is what use the available riches of the society are put to.
For example, suppose the elite collect a large tax, but they spend a large portion of their excess wealth to raise and arm armies to fight a war in order to keep themselves in power. That seems to me much more likely to provide a competitive advantage over a rival than a lower tax.
Even if the tax collected is not used by the elite for this purpose, the remaining wealth of the society would likely be available to fight a war. And if that available wealth should exceed that of its rival, that would seem to me to provide a competitive advantage, no matter how high the tax was.
In the second world war, the US went on a major bond-selling campaign to fund the war. This could easily be seen as such an elite tax, which went directly to the "military-industrial complex". But the total funds spent to support the war effort certainly provided the US with a competitive advantage that helped win the war.
tech used to be needlyI assume you meant to write "nerdy".