The debates about raising the debt ceiling are heating up. For someone of my age and background the whole thing is rather extraordinary. It used to be that the Republicans were reliably the party of finance capital, making sure that Wall Street was well cared for and that creditors were protected. They would complain about profligate Democrats who threatened to upset the bond markets. Responsibility, for Republicans, was all about maintaining market stability, and if tax increases were necessary to do that, then that is what you did (see: Reagan, and Bush I...).
But something happened on the way to the tea party. Republicans are now split between the old defenders of finance capital (who must be going crazy along about now...) and the newly energized petty bourgeoisie, obsessed with self-contradictory anti-government, anti-tax ideology (self-contradictory because so many of them rely on various government programs that they, in theory, detest...). The rhetorical and political momentum within the Republican party seems to have shifted in the direction of the latter, and their intransigence on tax questions has brought us to the brink of default, which would, of course, be disastrous not only for many average citizens but for finance capital. Lots of tension in those Republican caucus meetings...
Now, maybe the big capitalist creditors should absorb the hurt of default, or whatever policy actions will be taken to avoid formal default. But I am thinking that that won't happen. If we really do move past the August 2nd deadline and onward into the financial unknown, I suspect that the little people - many tea partiers, too! - will bear the brunt of the adjustment. That's what power is about...
Whatever the case, the petty bourgeois fanatics in Congress are threatening the livelihoods and prospects of many, many people in order to preserve their ideological purity on tax increases. Given the circumstances, those who can afford to pay more, should pay more; taxes on the wealthiest, who, after all gain the most from the current system, should be raised. Take a little from finance capital in order to save finance capital and keep the system from collapsing - since the effects of collapse will affect many more than just finance capital.
But the Republicans can't seem to do it. They have abandoned their old sense of responsibility. They have become Irrepubilcans...
That, at least, is what Mencius would say (you knew I had to work the ancient Chinese philosophy in here somewhere...). He would see them as irresponsible, since, from his point of view, when economic inequality is growing, the rich should take it upon themselves to help out the poor. Generally speaking, Mencius is a proponent of low taxes - his well field system was the basis for his understanding that tax rates should be one part in nine, or about 11%. But his sense of equality is as important as any particular tax rate. One of the great virtues of the well field system is that it applied an equal standard that could be applied to everyone. So maybe Mencius would be an advocate today for a flat tax....
If, however, we take his concern for countering economic inequality seriously, and I think we should, then it could be that the pursuit of equality would require some adaptations to tax policy. Maintaining something like Medicare and Medicaid would be important for Mencius, since they allow a certain dignity in later life for the elderly. Funding education would also be important for him. Military spending, not so much - he would press for considerable reductions in defense spending. But if policies that alleviated economic inequalities (not eradicate them, but simply ameliorate the worst differences) required more than a 11% tax rate, Mencius would require the rich to pay more. He recognized that taxes can be too high, but also that taxes can be too low. When discussing the "northern barbarians" (i.e. those uncivilized and uncultured, without sufficient governing institutions), he said:
If our rulers levy tax rates below that prescribed by the Way of Yao and Shun [ancient sage kings], they'll be nothing but barbarians great and small. And if our rulers levy tax rates above that prescribed by the Way of Yao and Shun, they'll be nothing but tyrant Chiehs great and small. (227)
In determining appropriate tax rates, especially in a modern, industrial/post-industrial economy, Mencius would be open to debate and compromise. He would not stick doggedly to the 11% rate that made sense for an ancient, agricultural society. He would resist ideological rigidity:
The problem with clinging to a single doctrine is that it plunders the Way: to glorify the one, you cast out a hundred. (245)
Bottom line: the current financial situation threatens the economy and the livelihood of many people, something that would exacerbate already bad economic inequalities. Under such circumstance the responsible, Mencian approach would be to ask the rich to do more. But the Republicans can't see that.... they're Irrepublicans....
I learned a lot from this article, particularly how you referred to Mencius and the word "irrepublican". Thank you!
Posted by: CK Shen | July 25, 2011 at 03:51 PM
But have you considered the rationale for low taxes in Mencius?
Mencius is very pro-merchant and pro-free-market, believing that all under Heaven would immigrate to a country where the tax rate is low.
Furthermore, I feel you've underplayed Mencius's views on low tax rate. For instance, the story about the thief who wouldn't stop stealing...
Posted by: Justice&Mercy | July 30, 2011 at 05:00 AM