Chris Dillow on our "narcisstocracy":
Irving Berlin on taxes: The New York Times reports on how some of the US's richest men are dodging taxes. Compare this to the response of Irving Berlin when his lawyer offered him a tax shelter:
I want to pay taxes. I love this country.
He even wrote a song expressing this sentiment. He said: “I owe all my success to my adopted country.” ...
He embodied -- knowingly so -- a point made by Herbert Simon, that we westerners owe our fortunes not so much to our own efforts but to the good luck of living in societies which enable us to prosper - which have peace, the rule of law and material and intellectual resources ...
Now, songwriting is pretty much as individualistic an activity as one can find; But even songwriters require a conducive environment such as musical traditions on which to draw and a marketplace for their work. Berlin knew this: 1930s Siberia had no equivalent of Tin Pan Alley or Hollywood.
If even songwriters owe their wealth to social capital, how much more true is this of hedge fund managers. They would be nothing without wealthy investors or large liquid financial markets: how many billionaire fund managers are there in Burkina Faso?
Which poses the question: why, then, don't hedge fund managers have the same attitude to paying tax as Irving Berlin? It could be that they are more motivated ... by personal greed. But there might be another reason..., they believe their wealth is the product of their own "talent" and so they are entitled to it... Others of us prefer to call it an example of one of the disfiguring diseases of our time - narcissism.
Perhaps there's another explanation, though. Maybe hedge fund billionaires are greater geniuses than Irving Berlin who have contributed more to human happiness. But how likely is this?
yrs,
rubato