Asymmetrical Information

what about status? If there is negative status associated with begging and positive status associated with being the one people are begging from, people will still have an incentive to be productive. Economic factors are not the only factors that influence human or economic behavior.

Slavery could be one answer. Lee Harris has a good article in Tech Central Station about the creation of warrior elites.

(www.techcentralstation.com/090805D.html)

While the warrior elites would have to share their booty and other wealth with each other they would not have to share their wealth with their slaves who would increase the amount of wealth in that society by their labor without the high "marginal tax rates" implied in Caplan's article on the envy tax.

But wouldn't the slavery example be contradicted by the fact that like poverty, is a default state: you're owned by the tribe, but not part of the tribe? It would, however, have the effect of clearly lowering the number of "beggars" at the table. It could be then that slavery is part and parcel of the tribal mindset.

Now, of course, I don't know where that leads the discussion.

Another reason for the envy tax might be a high level of randomness in getting necessities. If the odds are that you'll need meat from someone else to get you through the hard spells, you have an incentive to share what you've caught when you get lucky. (I'm assuming that skill matters, but not enough.)

While sharing (equally?) has a cost, so does keeping track in detail of who's entitled to what.

A possibility is something like that a general availibilty of the power to increase wealth means that its more effective to try and make your own stuff than to try and beg it off someone else. The idea I have in mind is like the arrival of a group in an uninhabited area with abundunt natural resource. If some guy fences off a big area of land and grows a lot of food, it doesnt really make sense to mooch off of him if you can just go and fence off your own area yourself.

If however the situation is effectively zero sum (meaning a low enough possibility for growth) than attempting to flatten the distribution becomes a better choice than attempting to raise the general level.

Of course this idea is predicated on growing your own resources and mooching someone else being exclusive activities ( the more you do of own the less of other)

"Why doesn't this equilibrium emerge every single time?"

Competing tribes.

This occurs in the 1st world too - it's called socialism and it has the same effect.

Two possible causes of our (relatively) non-envious, non-100%-tax society come to mind.

A negative cause: the growth of specialized warrior classes, with the ability and willingness to lop off the heads of whiney people.

A positive side: the development of moral codes with commandments like "thou shalt not envy thy neighbor's wife, ox, or ass".

I think part of the problem is that we're talking about two different levels of economic development. At the hunter/gatherer level it makes sense to share. It's more insurance against bad days than a tax. It makes sense for the best hunter to engage in this as even the best hunters can have a run of bad luck and you really wouldn't want your best hunter(s) to die of starvation.

It's when rudimentary agriculture and food preservation techniques starts to form that this system doesn't make sense from a purely economic point of view. Although as Bryan points out it makes a lot of sociological sense. I took the question as how did we get from the rudimentary agricultural level of economic development to higher ones.

i think the phenomenon has always been around and always will.... as some people pointed out, there are also 'slave' and 'warrior' classes in the primitive societies. as george orwell pointed out, there'll always be three general classes of society.
in our society there are still poor slums with nothing but poor people for miles. the successful people from these communities go to college and get good jobs and 'leave the tribe and find another one with a lower envy tax' to live in middle class america. similarly there's an entirely different class of extremely wealthy in this society that is distinct from the middle class.
a good measure of a society, imho, is the fractional size and absolute wealth/income of that middle class.

RE not happening every time--

Mobility seems to be a key. If you're stuck in one valley for a lifetime, you better come to terms with the people there, even if they're begging. Move away from the valley, and you've got a chance at finding other people who left their valleys for the same reason.

The prereqs:
- A big enough, populated enough region/nation for there to be different social groups (pretty easy)
- Transportation which allows reasonably cheap movement (not so easy)
- Enough economic success that some significant portion of movers can prosper on their own. If everybody heads to the city and lands in no-job shantytowns, there's new cause to beg'N'shame your new neighbors. (really not so easy)

AFAIK these conditions couldn't be met for a general population until well into the industrial revolution. Without factory work, the breakdown of feudal law, and the wave of service/support jobs creating by swelling cities, how much of the population could survive moving?

In addition to the perceptive comments above, another factor is that different marriage and kinship customs (obvious example: polygamy vs. monogamy) will result in societies with differing levels of tribal affiliation. So if tribal affiliation is weak, it's easier to ignore and/or leave your tribe.

I believe that Avner Greif and others in the New Institutional Economics have been pondering this problem at a fairly deep and sometimes technical level for some time. His forthcoming book may be of interest for its discussion of societal arrangements that are statically efficient but do not adapt over time vs those based on anonymous exchange which are often difficult to start up but do well in a competitive and dynamically changing environment.

One thought: the use of money (rather than bartered goods) makes it easier to hide your wealth and thus avoid the envy tax.

Talking economic theory as their throats are cut.

The frontier gave people the chance to be what they wanted to be instead of what others want them to be. Or, from a slightly different perspective, conquest of new land creates opportunities for the conquerors (e.g., the Hellenes and Romans). My guess is that the cargo system will slowly take hold in the United States now that the frontier is closed and as population increases. The alternative would be some form of internal conquest - perhaps a reemergence of serfdom.

Competition among polities is a counter-influence, but I would suspect that a more important one is a reachable frontier. Frontiers offer the possibility of evading any tax, whether mandatory or customary. Note that now that there are no more land frontiers, the envy tax is rising more or less monotonically all over the world.

Well if you are expected to share with your friends you can choose friends who are as successful as you are. However I am not really convinced of the premise here. If primitive societies tolerate unproductive members, what's with all the stories about putting grandma on an ice floe when she becomes a burden?

There is evidence that there were quite extensive trade networks even back in Cro-Magnon times. And many ancient cities were based upon their proximity to natural trade routes. I suspect that the confluence of people from different tribes helped break such traditions. If most of your neighbors are people from different tribes, you tend to deal with them in an "arm's length" sort of fashion. And living in an urban environment does help break down the influence of tribalism.

But then again, what the hell do I know? I may be old, but I'm not that old.

IMO what Caplan describes is just one of many possible situations that can arise among a tribe, and is sustainable only in a pseudo-family structure. The larger the 'family' becomes, the more difficult redistribution becomes, and the greater the probability that a native or external influence (human or otherwise) will buck the established order.

Moreover, broad redistribution isn't always a disincentive to work more efficiently -- social status and governmental power in the tribe can also substitute as an incentive. But as a poster on the source thread noted, redistribution does tend to stifle capital accumulation. If you come back to a ten-family tribe with five pheasants and each bird is dividied into halves, which family is going to set up shop selling feather necklace bands?

Thus, as for "how we managed to break it" (i.e., the equilibrium of envy tax), I'm not sure we did. Societies where individual initiative and creativity are considered at least somewhat virtuous (even if social redistribution takes place concomitantly) will naturally advanced along market economy lines. And societies where there is heavy-handed enforcement of equality will stay pretty much where they are indefinitely, or until internal or external influences change perceptions, or until a disaster too large to be overcome by the tribe wipes out the entire society (thus, removing them from the History of the Present).

Why are you always picking on Canada?

This seems relevant:

Folk Economics, by Paul H Rubin

ABSTRACT: Folk economics is the intuitive economics of untrained persons. It is concerned with distribution, and does not allow for or understand incentives. Folk economic notions evolved in our ancestors in circumstances where there was little in the way of specialization, division of labor, capital investment, or economic growth. It can explain the beliefs of naive individuals regarding matters such as international trade, labor economics, law and economics, and industrial organization. It is important that voters understand economic principles. Economists would do a better job of persuading others and of teaching if we paid explicit attention to folk economics. Because untrained individuals do not fully understand gains from trade, training in economics is likely to improve welfare by increasing the number of trading opportunities. There is evidence that this is in fact true.

I've actually just gotten back from some time spent living in a small village in Mali. What was interesting to me there was that people openly acknowledged the "envy tax", and there was an active discussion going on among the more succesful villagers regarding how to avoid it. Many people, for example, were careful, upon receiving a windfall, to immediately convert it into some not-easily-shared item, such as a motorcycle or a cow (someone isn't going to ask you to loan them your cow's leg). This isn't the world's greatest strategy. It lead, for one thing, to a lot of people in my village owning motorcycles when what they really needed was nutritious food. But, there's nothing more shareable than food... From what I saw, though, the "pariah" threat, the "penalty" for not paying the envy tax, was more bark than bite; and it could often be satisfied by a very low rate of payment, if the person was willing to put up with a certain amount of grumbling. Shrugging the envy tax off might not a winning strategy, but low-balling it certainly can be. The most economically succesful villagers were notoriously stingy, and may have been unpopular for that. However, they still gave out a very small amount of money. So if the choice is: ostracize Mr. X and get no envy tax for him, or grumble about yet accept Mr. X and get a small tax, people seemed to choose the latter... The most succesful position in my village seemed to be what it is everywhere: be a charming hard-ass.

Have a read of Hernando de Soto's book "The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else" and you will find what I think the real key is, Private Property and Property Law that backs up those rights. This is why we are so rich, because we can leverage off capital of many different sources and in a multitude of ways, and turn that capital into something more productive than just a roof over our heads. The private property laws also allow you or me to invest in England, Australia, the US for example and know that our investments will be protected by recognised law.

I'm sure many of you (seeing as thought it is the "Jane Galt" web site) are familiar with the characters Midas Mulligan, or Hank Reardon from Atlas Shrugged, they made their lasting wealth from their intelligence and moral and ethical standards, but what was the infrastructure that enabled them to achieve this? Capital, but more importantly the widely recognised and observed laws that define our private property.

Granny cannot wield a battleax. In a primitive society only adult males count, because there is no general enforcement of the rules by an independant agency.

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