Tuesday, December 19, 2006

Heresy From J. A. Hobson

"Among the business and professional classes and their economic supporters the conviction holds that any property or income legally acquired represents the productive services rendered by its recipient, either in the way of skilled brain or hand work, thrift, risks, or enterprise, or as inheritance from one who has thus earned it. The notion that any such property or income can contain any payment which is excessive, or the product of superior bargaining power, never enters their minds. Writers to The Times, protesting against a rise in the Income Tax always speak of their 'right' to the income they have 'made', and regard any tax as a grudging concession to the needs of an outsider, the State.

So long as this belief prevails all serious attempts by a democracy to set the production and distribution of income upon an equitable footing will continue to be met by the organized resistance of the owning classes, which, if they lose control of the political machinery, will not hesitate to turn to other methods of protecting their 'rights'." -- J. A. Hobson, Confessions of an Economic Heretic, as quoted in C. E. Ayres's The Divine Right of Capital (Houghton Mifflin, 1946)

1 comment:

adi said...

Hobson's critique is of course true, but many economists know that there exists many activities directed to increase one's wealth by the use of coercive methods. Merchantilist era is now considered to be kind of model example of economics of rent seeking.

Violence and use of government's power to redistribute wealth are certain facts of economic history and life but it would be interesting to see more studies about these issues.

At least we Austrians use much time and effort to show how rent seeking is done and what are it's effects to production structure and society.