A small hommage – Richard Pipes

The news came out on the Foundation for Economic Education (FEE) website, which is listed in the liberal media as center-right view. (Economically right, ideologically in binary terms, left). A great Polish Jewish (and naturalized American) thinker died. During the 20th century, he spoke about the need to protect private property. He also advised President Reagan about the Soviet Union and Eastern Europe.

He was also known to be in dispute with another great man and thinker of the past century, Alexander Solzhenitsyn. The latter was the author of the book ‘Archipelago Gulag’ and the famous novel ‘One day in the life of Ivan Denisovich’. They argued over the relationship between the Russian politics and the nature of the Soviet regime. (Source: Catholic Report). The novel about Denisovich is something to be read, where every reasonable person can know what is wrong with such inhuman and militant-ungodly system as communism.

Similar horrors can be found in the work of another Jew of Croatian descent, Karlo Štajner. He was a hard-line revolutionary who has come to know how the revolution eats their children, in the book ‘7,000 days in Siberia’.

As published on the pages of the publishing house and bookstore Ljevak, Pipes has published about twenty books. Most notable among them were The Russian Revolution (1990), Property and Freedom (1999) and Communism (2001).

Does redistribution have a negative effect on virtues?

In a review written by Walter Olson of the Cato Institute, this philosophical detail came to my mind. Here Olson quotes Pipes, who argues with David Hume on redistribution:

Quote: ‘Render men’s possessions ever so equal, men’s different degrees of art, care and industry will immediately break that equality. Or if you check those virtues, you reduce society to the most extreme indigence; and, instead of preventing want and beggary in a few, render it unavoidable to the whole community’.

This Pipes’ quote has provoked me thinking of virtues. Namely, the question of virtue, which is more archaic than the question of human perfection and merit, is something that should be brought back to attention. So, how to do good work (how to do it), how to be successful, professional and honest. Moreover, how to fight the culture of despair of how nothing is good enough, how to offer hope. Finally, how to learn and enhance your professional reputation.

Olson claims that the late Harvard historian dealt with the question of Russia and the evil of communism, apparently because of a life trauma. Pipes claimed there was a strong link between freedom and private property. He also said that even hunters-gatherers could value ‘intellectual property’ as hunting and gathering techniques.

Income differences, progressive taxation and economic growth

I would link this news with the one published in Večernji list (Croatian daily). They mention the study of the most prominent European economic institutions that refuse the conclusions of the IMF and OECD study how income differences make economic growth difficult and slow. Last year’s EconPol Europe survey, made up of ‘leading think tanks from several major European countries (Ifo Institute, CEPS, CEPII, IHS, Tolouse School of Economics, Oxford University Business School, University of Trent, VATT and ZEW)’ states that ‘big differences in incomes do not block economic growth but encourage it (!) and when the differences in disposable income of people are bigger, the growth rate is also higher!’

Večernji list continues with the claim that EconPol’s claims could have huge ideological and political repercussions in Croatia. Namely, ‘if inequality encourages growth, large wealthy people are becoming desirable, strong progressiveness in taxation is wrong, and, like in Italy, flat tax could come back in the game’. I’m not a tax reform expert, but a colleague of mine drew attention to me to this work by Ivica Urban. (A scientist from the local Institute of Public Finance). I must say that I am fond of the idea of ​​flat tax. Mostly because of its​​ simplicity, which comes as a counterbalance to the bureaucratic nature of the Croatian economic system in general.

IMF recommendations: private property under the guillotine

The same IMF continues to make recommendations to Croatia that further tax cuts are welcome. Apparently, in the absence of reforms, GDP growth will fall by now at a slender 2.8% to 2%. Fiscal progress is, they claim, important in an effort to reduce public debt. But still, before the announced VAT reduction, a modern property tax should be introduced.

Not residing in Croatia, the IMF apparently does not know that a petition against property tax was already signed here. 146,100 signatures were collected (i.e. there are about 4 million inhabitants with 3.7m registered voters). Over 140,000 of them were online signatures. The speed and breadth of various ideological worldviews that have backed this petition were even more amazing than the number of supporters. IMF’s pressure to introduce this tax will not succeed easily because Croatians are sensitive to their property rights.

Should private property be taxed for the sake of equality?

As Mr Pipes points out, the egalitarianism in the sense of (property) possession will increase poverty instead of reducing it. It will also instead increase negative desires and badly directed passions for possession instead of reducing them. Communism, and its close friend, socialism, have this egalitarian sin in their bones, of doing or making everything (things and people) equal in the outcome. Their background is envy, which is a grave or, theologically speaking, a mortal sin. Envy makes people worse than beasts. Here, look at the gullies, whose victims do not lack. Perhaps the gulag is a distant term for Croats, but the Goli otok. (Name of the island in Northern Adriatic, where an infamous prison for political convicts during socialist Yugoslavia time was placed).

One should beware of aspirations to have private property and income taxed more than it is for the sake of equality. Perhaps there is a good wish behind it, but the way to this is almost certainly the way to hell. I already mentioned this here. If Croatia does not want a demographic breakdown, it does not need grand strategies. It is necessary only to break the bonds that harm entrepreneurial initiatives, reduce the burden and offer hope, and stop continually spreading despair. Current broadly-accepted initiatives (i.e. see what is going on with anti-establishment voices in Croatia to study this more) have this deep desire in themselves to stop widespread injustice. It is the engine of the deep corruption in the current elites. They continually (and intentionally) refuse to change but cement old positions instead.