Over the past decade, especially, the advocates of “the market system” have pushed and pressed that free markets are the best and most efficient way of allocating resources and determining social and political priorities. Their rhetoric is true, yet extraordinarily misleading at the same time. Market systems, even malfunctioning ones, do allocate resources far more effectively than any “command and control” system, as the failure and/or transformation of virtually every dictatorial or government-directed system has demonstrated.

Unfortunately, this “efficiency” is only comparatively better than other systems and certainly not nearly as efficient as its advocates claim. Winston Churchill once commented to the effect that democracy was the worst system of government, except for everything else that had been tried. So, too, is the so-called “free market” system one of the worst ways of allocating resources — except for all the alternatives.

So-called “free market” systems have a number of severe systemic problems. Some have become very obvious over the past year or so. One defect is that prices are determined on the margin at the moment. This means, in real terms, that unregulated prices can spike or crash literally in minutes, and that the effects on society can be devastating. Another is that the balance of supply and demand, if not mitigated by society, can result in millions without jobs or incomes, and a high concentration of wealth in the hands of a few.

A third, and largely overlooked, and, I believe, even greater flaw in so-called market pricing is that such pricing is highly inaccurate in assessing the costs of goods and services. This inaccuracy comes from the fact that the prices of goods and services do not reflect the so-called externalities, or as I would term them, more accurately, the hidden costs. The examples of such costs are numerous. Until the creation of environmental laws, factories were allowed to degrade and pollute the environment without restriction, and millions of people either died or had their health permanently injured. Without employment safety laws, employers could, and did, keep costs down by using the cheapest and often the most dangerous equipment and practices and did not have to shoulder any significant fraction of the costs of workplace injuries. These types of externalities have been known now for decades and are commonly recognized, even if the means by which they have been addressed are often deplored by the more conservative advocates of “free markets.”

The problem of hidden costs, however, is far from being completely solved, or even addressed in many cases. In some areas, this is recognized, as on the environmental front, where advocates of the “free markets” continue to oppose measures to deal with global warming and air pollution. In other areas, there’s little or no awareness of such costs.

Take the issue of influenza or swine flu. The causes are known. The means of preventing its spread are also relatively well-known as well, but health authorities are becoming more and more concerned about the danger of pandemics. Why should this be a problem? If sick people just stayed home or in the hospital until the diseases would run their course, how could they infect others? Except all too many people can’t do that. They don’t have health insurance. They won’t get paid if they don’t work. In this time or downsizing and ever greater worker efficiency, there’s often literally no one else to do the work. Take a very simple example. A project/report of some sort is due. Because of downsizing, there’s exactly one expert/analyst left who can do it. If the report isn’t done, all sorts of negative events occur… violations of law, penalty costs, loss of revenue-bearing contracts. The key person has a mild case of the flu, comes to work, works through the illness and gets the job done. In the process, he or she infects three or four other people, one of whom infects an asthmatic colleague or friend who dies. Does that death, or all the other 13,000 flu deaths reported this year so far, ever show up as a negative cost on the business’s or agency’s balance sheet?

How many salmonella deaths have resulted from unsafe food industry practices directly attributable to “cost-minimization”? How many heart-attacks from work pressures caused by too few people doing too much work? There have been scores of lawsuits over the past three decades, in which major corporations were found guilty of manufacturing products that led to user deaths or guilty of practices that created deaths or ill health for thousands of people — and yet the same “free market” cost-minimization pressures persist and the same kinds of practices continue.

So… yes, the so-called free market is better than the alternatives so far tried, but let’s not have any more rhetoric about how wonderful it is and how much better it would be if the government just got out of the regulation business. We’ve already been there, and millions of innocents paid the price… and to some degree, millions still are. There’s definitely room for improvement, because, so far, markets don’t capture all the hidden costs of production and operation, and until they do, so-called free markets won’t be nearly so accurate as adherents claim they are in balancing prices and costs.

I’m convinced that, with regard to innovation, most human beings tend to fall into three groups — those who are fascinated and intrigued with the newest gadget or technology, those who want nothing to do with it, and those who will employ it if it’s not too much bother to learn to use. All too often, though, especially in the United States, each new tool, gadget, or methodology is over-hyped by its proponents to the point that, initially, it tends to get either adopted willy-nilly or rejected out of hand.

As for my own personal preferences, I admit I’m a tool-user. If the new gadget doesn’t take too long to learn and will accomplish something I need done better and faster, I’ll consider it. If it takes a lot of learning for marginal improvement, chances are I won’t adopt it until there’s something better around… or until I’m forced to do so. One reason for my attitude is simply that almost all new technology doesn’t just do the “old stuff” better and faster [and sometimes it doesn’t even do that], it also incorporates all sorts of other capabilities, and those, in effect, require the individual to do more and more, often faster and faster, and usually for less compensation.

Take the internet and high-speed connections. These days, it’s expected that an author will have a website and a blog and answer at least some email [if only from editors and agents]. By its nature, email almost demands a quick response, and if you don’t respond quickly, you get more email. Having email access, even with the best spam filters, means spending some time deleting spam, if only to allow you to continue receiving the emails you need to receive.

Once an author commits to a website and presence, he or she commits to more time spent on something other than writing for actual income, and that time has to come from somewhere, either from previously personal time, from the full-time job, or from writing. From what I’ve seen, while there is some financial return [one hopes] from exposure to new readers, there’s also the “tar-baby” syndrome. That is, you’re stuck with it, because if you retreat from that presence, you’re ungrateful, or you’ve become isolated or all-too-egocentric, or fame has gone to your head, or…

The electronic forum doesn’t replace all the other aspects of writing. An author still has to produce, edit, and revise. If the author attended conventions, he or she still has to, because the tar-baby effect applies there as well. The electronic world just adds another dimension and another requirement for effort and professionalism — and this is true across most professions requiring paperwork and communications.

So why is it that everyone is so enthusiastic about so many devices and innovations that gnaw away at that most precious of personal resources — time?

In today’s world, everyone predicts the future. We don’t think of it in that way, of course, but we do. If you go grocery shopping for special pasta to entertain friends on the coming weekend, you’re essentially predicting the future — that you and they will be there and healthy and will enjoy a pasta dinner. Businesses that plan next year’s product line are making predictions about the future. Making contributions to a retirement plan is another form of prediction. In a way, so even is voting for a political candidate. Science fiction writers try to make a living by predicting the future in a fashion that is, hopefully, both intriguing and enjoyable. Economists make their living by trying to predict economic trends.

Most of this kind of prediction is based on extrapolation, on taking existing knowledge and trends and merely extending these trends into the future. Such past-based extrapolation can at times be not only inaccurate, but extremely dangerous, as has been the case with the business and economic types who predicted that good economic times, ever-rising housing and stock prices, and enormous personal deficit financing could continue indefinitely.

Extrapolation can be very effective, if used cautiously, because technology and semi-basic human social patterns normally do not change that quickly, and it’s usually years, if not decades, before “new” technology is fully deployed and adopted throughout society. In addition, most changes are either incremental or cosmetic. For example, most western men wear trousers of some sort most of the time, and it’s been almost two centuries since trousers replaced breaches and stockings. In industrialized nations, the internal combustion engine powers most surface ground transport and has for almost a century. And in most of the world, women remain largely subject to male control and oversight, and in the rest of it, most men — and some women — are resisting further changes in the balance of power between the genders. For all the claims about human adventurism, on balance, we’re a conservative species, and that makes biological sense… until or unless or environment changes radically.

The problem with this mental conservatism is that, when the future cannot be accurately predicted on the basis of extrapolation from past experience, most people, including experts, tend to get it wrong. Conservatism and experience have combined in most people so that for years, the majority tended to be skeptical of global warming and the possible speed of climate change. Many still are, even though the latest measurements of arctic ice and glacier melting in Greenland and Antarctica indicate that the “radical” estimates of the effects on the oceans were far too conservative. The same thing happened with last year’s financial melt-down. But attempts to predict massive and radical change can be equally wrong. Forty years ago, most “experts” were convinced that space travel would be commonplace — and yet, it’s been something like 37 years since any human being even stood on the Moon. And for all the predictions of an “information singularity” or “spike,” it still hasn’t occurred.

As both a writer and as an economist, I’d love to be able to predict accurately beyond the extrapolated future, and so would many, many others, but few ever have, successfully, and perhaps, in some ways, that’s for the best. Cassandra could prophesy beyond the expected, according to Greek myth and the playwright Aeschylus, but her curse was that no one ever believed her, especially when she warned the Trojans against bringing the wooden horse into Troy.

Perhaps I’m a minority of one, but after almost forty years as a professional writer, I’ve noticed a distinct change in the attitudes expressed by readers… and in the way those attitudes are expressed. On the one hand, the rise of the internet and emails, not to mention instant-messaging, allow readers a far greater range of ways to express their views about books they like and dislike, and those choices have definitely led, at least in my experience, to greater contact with and interaction with readers. I have to say that, for me, the overwhelming majority of such direct contacts have been positive.

On the other hand, the comparative anonymity of the internet, the proliferation of “review” sites, both professional, semi-professional, and non-professional, and the growth of “reader reviews” on the bookseller sites, particularly Amazon and Barnes & Noble, have resulted in what I can only call “the enshrining of the validity of each individual’s opinion.” We all have opinions, and some are more valid than others, usually depending on the expertise of the one proffering the opinion. But this “enshrining” has led to the growth of a sub-class [sub in more ways than one] of opinion-givers who often express their opinions of a book as extremely negative opinions of the author and who express themselves rather vociferously if the book doesn’t meet their expectations… or even if an author doesn’t write the next book quickly enough to suit his or her fans. At times, such as when a book has received glowing reviews from all sorts of standard literary authorities and when the vast majority of readers rate it as good or superior, it’s fairly clear that the reviewer is angry because the book didn’t meet his or her very personal expectations. Ten years ago, as I’ve noted previously, there were precious view of these violently negative opinions. Now, very few popular authors escape them, especially authors who write a range of work that doesn’t fall within a narrowly defined sub-genre.

What concerns me is not that readers don’t enjoy certain books by certain authors, but the anger expressed when an author fails to meet a reader’s expectations, especially when it’s clear that most readers do in fact like, or don’t actively dislike, the book in question. It’s almost as though those violently negative reader-reviewers take it as a personal slight that the author didn’t meet their individual wishes. They don’t seem to want to understand that with thousands or even millions of readers, not every book that an author writes will please everyone, and not even, in all probability, everyone who liked the previous book. In my own case, I know this to be true, because regardless of appearances and readers’ perceptions, I do some things differently in every book. That upsets some readers, and others get upset because they don’t see enough radical difference between the approaches in books.

For an author, that comes with the territory. What comes increasingly with the territory, and shouldn’t, is the growing amount of abusiveness written and directed at authors personally… even if much of it is somewhat subterranean in forums only visited by their faithful. If a reader doesn’t like a book… that happens. If the reader wants to say why, that’s also fine. If the reader doesn’t want to read any more books by that author, that’s also a personal choice. But targeting authors personally and abusively in reviews and forums because they don’t meet expectations… or deadlines — that’s not only bad manners and uncivil, but reveals an incredible degree of anti-social self-centeredness that bodes ill for our society.

Contemporaneous with this type of self-centeredness is another kind — the posting of downloads of e-books on a wholesale scale by individuals. Now… there are all sorts of arguments about whether legal downloads — or even the free-distribution of e-books by some publishers — affect book sales positively or negatively. I suspect that depends largely upon the author, but so far studies are inconclusive. If publishers wish to do that, they do so in the hopes of encouraging other sales, and with the full knowledge of the author. They also seldom release many books by a given author at one time. If a publisher or an author chooses to offer free downloads to encourage sales, that’s their determination and choice. But it’s clearly both unethical and illegal for someone else to make that choice for the author or publisher. What not only bothers me about such “wholesale” postings by individuals is not only the contempt for the author that such download postings represent, but the fact that none of these “downloaders” even seem to recognize that their actions are contemptible as well as illegal. Almost all the authors I know — and after all the years I know a great number — work demanding, sometimes grueling, schedules. Many still hold down full-time jobs in other fields. Contrary to popular belief, most published authors do not make millions. In fact, most can’t support themselves on writing alone. Among those of us who can, only a few handfuls make the “millions” [and, no, while I’m comfortable and not hurting, I’m not even close to being in that class]. So… posting or using such downloads declares in effect that the person who reads them doesn’t value the writer’s work enough to pay for it. Some them claim that they do so because books and e-books are overpriced. That’s a cop-out, not to mention inaccurate. If books are so overpriced and publishing so profitable, why are almost all publishers laying off staff and closing imprints? No… for these downloaders, it’s all about “me.” Yet most of them would be highly offended and more than a little unhappy if their employers suggested that they should work for free, which is effectively what unauthorized downloads are imposing on authors and publishers.

As I said in the beginning, almost all readers are generous, open, and, even when they don’t like what I or other authors write, polite. But I can’t say that the growth and increasing visibility of a self-centered and often verbally/textually vicious and comptemptuous sub-class isn’t disturbing, particularly in these times.

April 15th has come and gone, but the arguments and bitterness remain, even well after the last “tea parties” have disappeared… for this year. We’ve all heard the arguments. The “rich” pay too little in taxes; the rich pay far more than their fair share; the middle class carries the heaviest tax burden; taxes are too heavy for working families… The arguments, points, and counterpoints seem almost endless, and more than a few Americans have asked year after year why Congress can’t come up with a taxation system that is simple and fair.

There are essentially three reasons why that seemingly simple task is in fact impossible. First, the U.S. government spends an incredible amount of money. That requires hefty taxation, and raising large amounts of revenue mitigates against fairness. While everyone thinks spending should be lower, there’s no majority agreement on what particular programs should be cut. Oh… there’s a general agreement that waste should be cut and that perhaps defense spending should be lower, but, as the saying goes, the devil is in the details. One person’s definition of waste, as I’ve discussed earlier, is another’s vital program. And, as for defense cuts… There should be fewer military bases, but don’t eliminate the ones in my state. Fewer troops in uniform? But we don’t want longer tours for those in service, and we don’t want the return of a draft. Less fancy weapons? But that increases casualties.

Similar issues arise in other programs. What about Social Security and healthcare? As it is, millions of Americans have trouble making ends meet in their older years… and you want to cut their benefits? Multiply these kinds of questions by the thousands of programs, and there’s precious little consensus on the details of any major spending reform.

Second, because so many Americans’ income, expense, employment, and life situation differ, a simple system capable of raising adequate revenue will inevitably have very different impacts on different taxpayers, and those differences will be perceived as unfair.

But the biggest reason why a “fair” tax system is impossible is because, as a nation, we cannot agree on what constitutes fairness. It sounds simple, and it’s anything but.

Begin with the reason for taxes. They’re officially levied to pay for services that individuals cannot provide for themselves, matters such as national defense, court systems, interstate and local highways, food safety and environmental standards — the list is long, and while many people complain that it is far too long, every one of those functions or rules was legislated into being because the so-called private sector proved unable or unwilling to deal with such issues. In general, at least in theory, each American has an equal claim to those services. Sam doesn’t get more national defense or environmental protection than Georgette, or less use of the highways or the courts.

So… one “fairness” argument asks why citizens who earn more than others and create jobs, either through the businesses they build or through their spending on goods and services, should pay higher taxes, either in absolute or percentage terms, than other taxpayers, when both receive the same government services. In fact, in percentage terms, many of those with the lowest incomes receive such services without contributing at all, except to Social Security and Medicare, and sometimes, not even to those programs.

A second fairness argument is based on equating fairness to percentage taxation, i.e., the fairest income tax is one that taxes all incomes at the same percentage. Under such a tax, often proposed at around 20%, a family that earned $45,000 [approximately the U.S. average family income] would pay $9,000, while a family that earned $135,000 would pay $27,000. The problem with this, many claim, is that $9,000 represents a far greater burden on the average family than does $27,000 on the better-off family, and this makes a flat tax unfair. On the other hand, does the better-off family receive three times as many benefits as the poorer family? Is that fair?

A third level of fairness argument is advanced by those advocating a “progressive” income tax systems [which, in various varieties, are what most nations actually have in one form or another, again, at least in theory]. This version of fairness states that those who have and earn more should pay a higher rate, often a far higher rate, than those who have less. There are a number of rationales for this, but the one most advocated is that those who are blessed with being successful have a greater obligation to pay back society with by paying higher taxes. Put slightly more cynically, that tends to equate to “it’s your civic obligation, and we need the money, and there aren’t enough of you to stop us from doing it.” I, at least, find it hard to argue that the wealthiest citizens, at least those who do pay taxes, and almost all of them do these days, thanks to the Alternative Minimum Tax, receive substantially more in government benefits than do other citizens, other than perhaps the benefit of the government not enacting even higher taxes. Do they have a moral obligation to pay higher taxes? On what grounds? Is it fair to insist that they do? Opponents of progressive taxation raise the question of why it’s considered fair for the most productive citizens to subsidize the needs of the least productive. Or why people with more children pay less in taxes than those with fewer children, when those with more children require more services?

These certainly aren’t all the arguments about “fairness” in taxation, and there well may be better ones than I’ve mentioned, but, whatever anyone’s position on these questions of “fairness” may be, it is quite clear that among Americans, and probably all populations everywhere, individuals have very different definitions of what constitutes fairness. And that, I submit, is one of the basic reasons why there will never be a tax system considered fair by those across all income levels of a society.

And, then, is it fair for a majority, because those who make less are always the majority in any society, to decide what is fair? Yet… would it be any fairer for one minority or another to decide?