Kurt, as you well know, no one's economic arguments are based completely on 'empirical evidence,' since economics combines science with values.

Which is why it used to be call 'political economy' in the old days.

Now that's no reason to ignore the spreadsheets. As a small businessman myself, I'd be quickly unemployed if I did. I'm a rather orthodox Marxist in this respect, that I take the numbers seriously, along with the values.

But I learned long ago economics wasn't a science in the usual sense of physics or chemistry. For instance, take any company's books and show us where the value of its accumulated knowledge is. You won't find it, since it's not considered a tangible asset. One of my old bosses told me, when selling a business, that's why they tossed in a fudge factor called 'good will' and took a guess at what it should be. It's to cover the values that fall outside their categories.

That's what 'externalities,' like pollution, do on the negative costs to society. The firm gets to dump them on everyone else and walk away. That's why I press for 'true cost' structural reforms within the context of the market. No more hidden 'free riders' who want to deny a 'free ride' of assistance to everyone else.

Interesting the you raise the 'flat tax.' When Forbes first put it forward, I actually argued for it with some of my buddies on the left, not because it was inherently progressive, but because it was more progressive, in terms of who would really pay most, since supposedly there would be no loopholes, than our present 'progressive' setup, rendered into its opposite by all the loopholes. (There's another anti-bureaucracy measure for you. Just imagine the mass unemployment of corporate tax lawyers if we had a true 'no loopholes' flat tax!)

But Forbes's tax, if I understand it properly, is actually more 'liberal' than my 'social wage.' In his proposal, when combined with Friedman's, means everyone under 40K a year gets a negative tax subsidy, whether they work or not, create value or not, or do anything at all or not. In mine, you have to do something positive to get it.

I've always been curious why libertarians are so bent on doing away with inheritance taxes. Doesn't it seem that their values would mean their kids should 'work their way up' in the world?

I'd go for letting people make as much as they can, then pass on, say, up to one million bucks per kid, then the rest goes to fund, say, public schools for the disadvantaged. What's libertarian about one kid starting off in life with a billion dollar trust fund, while many others start with little or nothing but their own 'sweat equity?' That's why I said there are plenty of markets, laced with successes and failures, but no such thing as a completely 'free' market nor a completely planned economy.

I don't know whether it's my Buddhism or my Marxism or both, but what I want to pass on to my kids was that I was a worker and seeker for peace and justice, more so than a big bank account.