High Taxes Send Companies Away

[Black Dog]

That's one of the things people miss in any discussion of taxes. What do we get for our taxes? Scandanavian countries are among the highest taxed in the world, yet also enjoy the highest quality of life anywhere. The United States, with its pro-business attitudes, ranks poorly on many fronts when compared with other industrialized nations. Canada's shame is that it can't make up its mind which way it wants to go, so we get the worst of both worlds.

[I miss Reagan]

That's one of the things people miss in any discussion of taxes. What do we get for our taxes? Scandanavian countries are among the highest taxed in the world, yet also enjoy the highest quality of life anywhere. The United States, with its pro-business attitudes, ranks poorly on many fronts when compared with other industrialized nations. Canada's shame is that it can't make up its mind which way it wants to go, so we get the worst of both worlds.

You make a good point Black Dog but that shifts the debate to the ideology of which is better. More or less government. I think Canada wants to move in the direction of the Scandanavian countries but realizes that do so greatly reduces our competitiveness with the US. Which brings us back to the original topic of incentives to keep business and talent in Canada rather than moving offshore.

[Hugo]

Scandanavian countries are among the highest taxed in the world, yet also enjoy the highest quality of life anywhere.

Pardon me, but that's controversial at best.

The Swedish Institute of Trade found that, from 1980 to 1999, the average Swedish household was considerably poorer than the average black American household (and blacks are the poorest group in America). They also found that in 1999, the median Swedish income was $26,800, compared to $39,400 for U.S. households, and this trend was reflected all the way back to the earliest data they looked at (1980).

In the 1990s, 70% of Swedish households owned a washing machine, compared to 92% of Americans. 31% owned a dishwasher, to 53% of Americans. 37% ownership of microwaves to 86%, 18% ownership of tumbledryers to 82%, 48% of VCRs to 83%, 29% of computers to 40%.

The Swedish suicide rate is 14.7 per 100,000, compared to 11.8 in the USA. Pace of Life is measured at 7 in Sweden and 16 in the USA (with 1 being fastest). Sweden boasts 2.6 R&D scientists and engineers per 1000 workers, compared to 7.6 in the USA. 13.8% of Swedish workers are employed in high-tech industry, compared to 21% of American workers. Per-capita financial wealth is $9,258 in Sweden, $64,402 in the USA. American women earn 13% more now than they did in 1980. Swedish women have gained nothing. (From a study by Cox & Alm).

I wouldn't say, from this data, that Swedish quality of life is higher than anywhere. In fact, most Western countries can beat it, including the USA, Canada, the UK, France, Germany, etc. We already thrashed out a fairly long thread on the subject here.

[I miss Reagan]

I hear a lot about Sweden as I have Swedish relatives. My brother-in-law's sister was actually visiting here from Sweden this weekend and was mentioning how Swedes have to have a $400/ year permit to own a Television. Not my idea of a high quality of life.

[The Terrible Sweal]

But IMR had never said a word about pre-secondary education. You fabricated his alleged stance agains pre-secondary education out of thin air.

Look at these two statements:

1) People have a right to healthcare.

2) White people have a right to healthcare.

Faulty analogy.

[The Terrible Sweal]

The Swedish Institute of Trade found that, ...

Link?

[Hugo]

Faulty analogy.

Why is that?

Link?

Here. The author cites a Reuters report on the Institute whose original report is, presumably, in Swedish.

Swedes have to have a $400/ year permit to own a Television.

That's ridiculous. $400 can buy you a pretty nice television. But I can beat that, though. In Denmark, you pay 205% tax on a car.

[The Terrible Sweal]

Who or what is The Swedish Institute of Trade and what was their methodology.

[Hugo]

This is.

Methodology: IMF data, official US and Swedish government data on incomes and GDP, private consumption and retail spending per capita since 1980. They used fixed prices and purchasing power parity to compare across currencies, and compared median incomes.

[The Terrible Sweal]

The Swedish Institute of Trade found that, from 1980 to 1999, the average Swedish household was considerably poorer than the average black American household ...

This is not quite an accurate reflection of what the study found. As Hugo's Mises Institute source states:

The Swedes ... enjoy free medical care, generous welfare benefits, time off from work, ... When one counters that Swedes pay enormously high taxes, the standard reply is, "That is true, but look at what they receive for their payments."

...however, ...  Relative to household in the United States, Swedish family income is considerably less. ... median household income in Sweden at the end of the 1990s was the equivalent of $26,800, compared with a median of $39,400 for U.S. households

So, in fact, the Swedish household is not "poorer", it simply has more fixed costs for which it receives defined benefits. In fact, the Mises writer admits as much...

... simple comparisons of income can be deceiving. ...  even the poorest sections of Stockholm and other Swedish cities are more livable and attractive than what one finds in many U.S. cities.

Unfortunately, no data about the incomes of American blacks is provided to assess that part of the claim.

BTW, it is never really safe to rely on the Mises Institute for economic analysis. They are more a lobby-group than a economic think-tank, and it shows up in a lack of rigour in their positions.

Consider:

As Ludwig von Mises and Murray Rothbard have pointed out, in a private-market society, individuals cannot gain wealth unless they produce goods that are demanded by large numbers of people. For example, it was Henry Ford who became rich producing cars, not the producers of early luxury automobiles ... Wal-Mart, which is another example, became the largest corporation in this country--and one of the most successful ... Therefore, it seems that if producers are becoming wealthier, it can only occur if consumers are purchasing on a large scale what the the producers are producing.

Now, of course, this the fallacy of Hasty Generalization -- when one forms a general rule by examining only a few specific cases which are not representative of all possible cases.

Tell Tiffanies, Louis Vuitton, and Mercedes that you have to go down-market to make money and they'll laugh in your face.

[The Terrible Sweal]

This is.

Ah. Sweden's version of the Fraser Institute.

[Hugo]

So, in fact, the Swedish household is not "poorer", it simply has more fixed costs for which it receives defined benefits.

That's not entirely true. It's not that their costs for consumer goods are fixed (for example), they just don't have as many of them. And whatever Americans pay for healthcare that Swedes don't, it evidently isn't enough to stop them buying a lot more computers, microwaves and tumbledryers than the Swedes do.

I think the consumer goods spending is quite a good indicator of the wealth and standard of living of a society. People will spend on consumer goods after they have taken care of the essentials (unless they're idiots, but idiots tend not to have much money to begin with. Unless it's Paris Hilton).

Swedes may have their essentials taken care of by the government a lot more than Americans, however, after those essentials are paid for, they evidently have a lot less left over than Americans do.

Tell Tiffanies, Louis Vuitton, and Mercedes that you have to go down-market to make money and they'll laugh in your face.

If you actually read von Mises, you'll know this is not the case. Austrian-school economists know that you can make money selling to a niche market. However, they also know that you can make an awful lot more selling to the masses. Ford makes far more profit than Ferrari. Wal-Mart makes far more pofit than Tiffany.

In this case, the author has indeed committed a hasty generalization. However, he is mistaken by attributing this generalization to Mises and Rothbard - the fallacy is entirely his own.

Sweden's version of the Fraser Institute.

If you like. I expect you have a competing study to bring forward.

[The Terrible Sweal]

It's not that their costs for consumer goods are fixed, they just don't have as many of them.

FOUL.

Strawman and/or Red Herring and/or Diversion.

Focussing on "consumer goods" changes the ground of the discussion.

The point is that Swedish households get value for their tax dollars. Focusing on disposable income ignores this extremely relevant value received.

Swedes may have their essentials taken care of by the government a lot more than Americans, however, after those essentials are paid for, they evidently have a lot less left over than Americans do.

Before you make that conclusion you have to determine that Americans are first somehow obtaining those values that Swedes receive from their social system.

Austrian-school economists know that you can make money selling to a niche market. However, they also know that you can make an awful lot more selling to the masses.

That is a different contention than what the author made. And again, it has sufficient counter examples to make it suspect.

Ford makes far more profit than Ferrari.

In terms of what? A large low-margin enterprise may make more in absolute terms than a small high-margin enterprise, but which one would you want investment exposure in?

[Hugo]

The point is that Swedish households get value for their tax dollars. Focusing on disposable income ignores this extremely relevant value received.

Oh, I'm sure they get something for their tax dollars. My point is that Americans seem to get a lot of the same benefits but have more left over, too.

Before you make that conclusion you have to determine that Americans are first somehow obtaining those values that Swedes receive from their social system.

Well, American life expectancy is about 2 years less than the Swedish, so obviously their nutrition and healthcare aren't all that different. A 2 year difference isn't much. In a 78-year lifespan it's about 2.5%. Swedes also say that their pace of life is more stressful and commit suicide more than Americans as well, which doesn't say anything good about these Swedish values.

As to welfare, pensions and all that, again, there doesn't seem to be a problem with American poverty. As I remarked in another thread, 94% of "poor" Americans aren't overcrowded, 75% of "poor" households have a car, most have more living space than the average Parisian or Londoner, 97% have a colour TV, and the average poor American child will grow up to be an inch taller and 10 pounds heavier than the average American soldier in WWII.

So I don't see that America is woefully behind Sweden in all these social aspects. If they are even slightly behind I would say that that is more than offset by their far greater disposable incomes, wealth and consumer goods. I think, putting those two together, the conclusion is that Americans are better off.

The point of social programmes like unemployment insurance, pensions, welfare and so on is the abrogation of poverty caused by low income or no income. To see how successful these measures are in a society, we should look not at how many of these measures they are or how extensive they are, but what poverty is like. I certainly don't think that the USA has any problems with poverty that are not at least equally shared by Sweden.

That is a different contention than what the author made. And again, it has sufficient counter examples to make it suspect.

Yes, it is a different contention. That's the author's fault. I think he probably knows it, but made an error of over-generalisation. However, I know from having read Mises' Human Action that he never says that you can't make money from a niche market or from selling to the rich. Quite the opposite. He just says that it's a lot more likely to become rich through selling to the masses, which is true, I'm sure you'll agree.

In terms of what? A large low-margin enterprise may make more in absolute terms than a small high-margin enterprise, but which one would you want investment exposure in?

Well, that's not really the same question. I don't think it is up for debate, though, that as a rule large mass-marketing enterprises make a lot more money than niche industries.

[Guest eureka]

Population  9.0m (2003)

Nominal GDP  US$303bn

US$243.5bn (at PPP)

GDP per head  US$33,770

US$27,140 (at PPP)

Average wage  US$3,247/month

Corporate tax  28%

VAT  25%

Currency  Krona

The above is from the Economist Intelligence Unit - hardly a left wing, pinko body.

Not quite the poor report of the "Trade Institute."

[Hugo]

I don't see how this data can even be compared with the HUI study. They aren't measuring the same things.

[Slavik44]

Slavic, I'm not sure what source you get your numbers from but it looks like data manipulation to me.

Not at all IMR, you are actually confusing tax brackets and what is paid in taxes....like fairly soon you should be filing for a tax refund...correct? The data I have looks at those numbers as a percentage...as A country could have a 90% income tax but that is irrelavant if a person recieves 90% of what they paid in taxes back. So if you want the data source I used here is the link..... it would do you good to read that because it repeats almost word for word what you said about my manipulation of data when it talked about factors it took into account.

[Montgomery Burns]

I saw that too, I Miss Reagan.

But you left one paragraph out of the article that I found very interesting:

Canada Steamship Lines, formerly owned by Prime Minister Paul Martin, who has now transferred ownership to his sons, has registered ships offshore.

Even Paulie knows that there is too much taxation in Canada. I guess that is why he is offering "tax relief" of $16 next year. That'll surely give the economy a boost.

[The Terrible Sweal]

My point is that Americans seem to get a lot of the same benefits but have more left over, too.

And my reply is that before you make that conclusion you have to determine that Americans are first somehow obtaining those values that Swedes receive from their social system. You say they seem to, but the opposite seems true to me.

American life expectancy is about 2 years less than the Swedish, so obviously their nutrition and healthcare aren't all that different. A 2 year difference isn't much.

I suggest that a 2 year difference is substantial, both as individuals experience life, and as society values its members. Remember, life expectancy figures serve as a rough measure for lifelong wellness.

As to welfare, pensions and all that, again, there doesn't seem to be a problem with American poverty.

I disagree.

As I remarked in another thread, 94% of "poor" Americans aren't overcrowded, 75% of "poor" households have a car, most have more living space than the average Parisian or Londoner, 97% have a colour TV, and the average poor American child will grow up to be an inch taller and 10 pounds heavier than the average American soldier in WWII.

Fascinating, but not convincing. Who do you mean by the poor? What good is a cheapass color TV when you can't afford fresh fruit?

The point of social programmes like unemployment insurance, pensions, welfare and so on is the abrogation of poverty caused by low income or no income.

To digress briefy, folding these three social programs in one lump is probably not a sound analytical approach. Unemploment Insurance is a risk-sharing program, and pensions are payments for value received.

I certainly don't think that the USA has any problems with poverty that are not at least equally shared by Sweden.

I cannot imagine what conception of poverty could possibly lead you to such a conclusion. I have been to both countries and I can assure you that evidence of poverty is much more pervasive in the U.S.

However, I know from having read Mises' Human Action that he never says that you can't make money from a niche market or from selling to the rich. Quite the opposite. He just says that it's a lot more likely to become rich through selling to the masses, which is true, I'm sure you'll agree.

No, as I said, I'm skeptical of that as a general principle. As I said, a large low-margin enterprise may make more in absolute terms than a small high-margin enterprise. But the proper measure for wealth creation is relative to the input.

[Hugo]

I suggest that a 2 year difference is substantial, both as individuals experience life, and as society values its members. Remember, life expectancy figures serve as a rough measure for lifelong wellness.

Life expectancy in Hong Kong is 81.5 years. That's higher than both the USA and Sweden by no small margin. Hong Kong, however, up until very recently had very little in social safety nets. There was no state pension scheme, for instance. It would make the USA look like a cradle-to-grave nanny state.

I disagree.

Based upon what? Where is your data?

Fascinating, but not convincing. Who do you mean by the poor?

"The poor" in the USA is defined by the US Census Bureau as households whose income falls below a certain level. For instance, in 2002, a family of four was deemed poor if its annual income fell below $18,556; a family of three was deemed poor if annual income was below $14,702.

What good is a cheapass color TV when you can't afford fresh fruit?

The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and, in most cases, is well above recommended norms. Poor children actually consume more meat than do higher-income children and have average protein intakes 100 percent above recommended levels.

-- US Census Bureau, Poverty in the United States: 2002

To digress briefy, folding these three social programs in one lump is probably not a sound analytical approach. Unemploment Insurance is a risk-sharing program, and pensions are payments for value received.

Well, actually pensions are a wealth redistribution scheme. You support pensioners now. When you are a pensioner, your grandchildren and their peers will support you.

But regardless, the goal of all these social programmes is, I'm sure you will agree, the abrogation of poverty. We don't provide unemployment insurance because we like to give people money, we provide it because not having a job tends to lead to poverty.

I have been to both countries

I'm not inclined to hear your anecdotal evidence. The fact is that you could visit virtually any country in the world and get a very distorted picture of how they live. There are slums and there are mansions in every nation. It depends upon where you spend your time.

As I said, a large low-margin enterprise may make more in absolute terms than a small high-margin enterprise. But the proper measure for wealth creation is relative to the input.

No, I don't think so. When you speak of how wealthy somebody is, you tend to speak of their net assets, not how disproportionate their returns were. Andy Bechtolsheim invested $200,000 in Google in 1998, now, that same stake is worth $300m. That's a huge return on investment, but I don't think anyone would consider him wealthier than William Clay Ford.

[The Terrible Sweal]

Life expectancy in Hong Kong is 81.5 years. ...

Without a substantial analysis of factual similarities and differences, I don't think bringing any third state into a comparison of Sweden and the US is particularly likely to be useful.

"The poor" in the USA is defined by the US Census Bureau as households whose income falls below a certain level.

That definition means that your argument ends up simply going in a circle. A point still at issue here is the utility of an income-based comparison of poverty at all. You say the poor in America are better off than the poor in Sweden based on the quantum of income, but I say quantum is not meaningful without an assessment of value.

What good is a cheapass color TV when you can't afford fresh fruit?

The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and, in most cases,

You're shifting ground again. You've inserted 'children' out of nowhere, and you're switched my example of fresh fruit to some generic staples calculation. So, this reply is a non sequitur.

To digress briefy, folding these three social programs in one lump is probably not a sound analytical approach. Unemploment Insurance is a risk-sharing program, and pensions are payments for value received.

Well, actually pensions are a wealth redistribution scheme. You support pensioners now.

Ah. See, here is the danger of using sloppy terminology. By pensions, you mean welfare schemes targetted at the elderly or disabled poor. True, they are often labelled 'pensions', but that's an imprecission we should try to avoid for clarity's sake.

But regardless, the goal of all these social programmes is, I'm sure you will agree, the abrogation of poverty.

We don't provide unemployment insurance because we like to give people money, we provide it because not having a job tends to lead to poverty.

The goal of unemployment insurance is not the abrogation of poverty. The short term unemployed don't often fall into actual poverty. UI is a risk-sharing program. And, "we" don't "provide" it. It is paid for (ie. provided) by employers and employees. It's macro benefit is stability, efficiency and flexibility in the labor market.

Pensions (of the 'real' kind where payments go in and a benefit comes out eventually) are not for the abrogation of poverty, unless you also agree that that's what salaries are for.

Welfare-type programs have as an immediate purpose the abrogation of poverty, but that purpose is selected because it will (theoretically) capture other important values in so doing.

I have been to both countries

I'm not inclined to hear your anecdotal evidence.

You should be.

The fact is that you could visit virtually any country in the world and get a very distorted picture of how they live.

"Could". But didn't.

As I said, a large low-margin enterprise may make more in absolute terms than a small high-margin enterprise. But the proper measure for wealth creation is relative to the input.

No, I don't think so.

YOU don't think so? Well, my dear interlocutor, please take that up with the disciplines of Finance and Economics. They both have a lot in them you might find informative.

When you speak of how wealthy somebody is, you tend to speak of their net assets, not how disproportionate their returns were.

But that is NOT what we are speaking of. We are speaking of Mises (alleged) position that " it's a lot more likely to become rich through selling to the masses". So, our concern is with production of wealth, and so obviously the rate of return is the central concern.

[Hugo]

Without a substantial analysis of factual similarities and differences, I don't think bringing any third state into a comparison of Sweden and the US is particularly likely to be useful.

The original point was:

Scandanavian countries... enjoy the highest quality of life anywhere.

Therefore, I think a comparison of Hong Kong to Sweden is just as useful as a comparison of the USA to Sweden, and you had no problem with the latter.

You say the poor in America are better off than the poor in Sweden based on the quantum of income, but I say quantum is not meaningful without an assessment of value.

The OECD finds that Swedish goods cost, on average, 105% of American prices. Bearing in mind that the cost of goods is roughly in parity (or slightly in favour of the Americans) I think that income is quite a good measure of prosperity. I agree that it wouldn't be if prices were wildly different, but that isn't the case here. Furthermore, the PPP data compiled by the HUI does take into account the differences in prices and cost of living, and their report is even more damning of the notion of superior Swedish prosperity.

You're shifting ground again. You've inserted 'children' out of nowhere, and you're switched my example of fresh fruit to some generic staples calculation.

I have no data to hand on adult food consumption or fruit consumption in America according to income strata. Do you have some to provide?

See, here is the danger of using sloppy terminology. By pensions, you mean welfare schemes targetted at the elderly or disabled poor. True, they are often labelled 'pensions', but that's an imprecission we should try to avoid for clarity's sake.

Hah. Tell that to George W. Bush and Paul Martin. They insist on calling their redistributive schemes "pensions". By your standard, Hong Kong (without a state pension plan) has a true pension, since people there do actually invest and save for their own retirement, rather than paying for the retirement of others in the expectation of having others pay for theirs.

The goal of unemployment insurance is not the abrogation of poverty. The short term unemployed don't often fall into actual poverty.

Well, if not "poverty" then certainly the goal is to avoid material hardship. If regulating the labor market was the concern, then a scheme to pay companies to keep employees in jobs or retrain them such as is practiced in Japan would be better.

Pensions (of the 'real' kind where payments go in and a benefit comes out eventually) are not for the abrogation of poverty, unless you also agree that that's what salaries are for.

That is what salaries are for, primarily to avoid poverty, secondarily to try and become wealthy. The overwhelming majority of people don't work because they love it, they work because they want material wealth and comforts.

We are speaking of Mises (alleged) position that " it's a lot more likely to become rich through selling to the masses". So, our concern is with production of wealth, and so obviously the rate of return is the central concern.

No, "wealth" is an absolute, measured in material assets. Rate of return is a different concept, hence it has a different name.

[The Terrible Sweal]

The original point was:

Scandanavian countries... enjoy the highest quality of life anywhere.

Therefore, I think a comparison of Hong Kong to Sweden is just as useful as a comparison of the USA to Sweden, and you had no problem with the latter.

The original point compared Sweden to 'anywhere'. You then chose to compare Sweden to the USA. That is the discussion we are having now: Sweden/USA.

Bearing in mind that the cost of goods is roughly in parity (or slightly in favour of the Americans) I think that income is quite a good measure of prosperity.

Yes, I know that's what you think. I'm saying that's incomplete, because it ignores the fact that substantial value is obtained by Swedes independent of the quantum of their income.

See, here is the danger of using sloppy terminology. By pensions, you mean welfare schemes targetted at the elderly or disabled poor. True, they are often labelled 'pensions', but that's an imprecission we should try to avoid for clarity's sake.

Hah. Tell that to George W. Bush and Paul Martin. They insist on calling their redistributive schemes "pensions".

To be fair, let me be clear: you did not originate the imprecise use of the word pension. Nevertheless, using one term to describe two much different things is confusing and should be avoided.

Well, if not "poverty" then certainly the goal [of UI] is to avoid material hardship.

That is the most immediate incentive for employees to participate, yes.

If regulating the labor market was the concern,

Regulating? I certainly didn't say regulating.

Pensions (of the 'real' kind where payments go in and a benefit comes out eventually) are not for the abrogation of poverty, unless you also agree that that's what salaries are for.

That is what salaries are for, primarily to avoid poverty, ...

!??! Sorry, no. Salaries are like remuneration of any kind -- incentivising sought-after activity.

We are speaking of Mises (alleged) position that " it's a lot more likely to become rich through selling to the masses". So, our concern is with production of wealth, and so obviously the rate of return is the central concern.

No, "wealth" is an absolute, measured in material assets.

Please pay attention.

It says, if you'd bother to look: "BECOME rich".

Note the semantic element indicating change from one condition to another. BECOME rich. Generate wealth.

[Hugo]

The original point compared Sweden to 'anywhere'. You then chose to compare Sweden to the USA. That is the discussion we are having now: Sweden/USA.

As far as I'm concerned we are still discussing Scandinavia compared to "anywhere". Therefore, any other country is a fair comparison to any Scandinavian country. Otherwise the original point wouldn't be true.

The point I'm making with Hong Kong is that it can't be the case that Sweden's socialist measures alone have given her better life expectancy, because Hong Kong has even less socialist measures than the USA and yet has a higher life expectancy than either. Even if Swedish socialism has been partly responsible for the increase, it can't be a major part because the near-total absence of such measures in Hong Kong didn't stop them exceeding Swedish life expectancy by a greater margin than the Swedes exceed Americans by.

I'm saying that's incomplete, because it ignores the fact that substantial value is obtained by Swedes independent of the quantum of their income.

And what is that?

Nevertheless, using one term to describe two much different things is confusing and should be avoided.

Agreed. Unfortunately, the whole "pension" scheme in Canada and the USA (which we can henceforth refer to as "aged wealth redistribution" or something similar, if you prefer) hinges on this Big Lie. Hence George W.'s plan to partially privatize the scheme, which might work if "pensions" were like savings as politicians claim, but definitely won't work in the real world because that isn't how "pensions" in the USA work at all.

But that's another story.

Regulating? I certainly didn't say regulating.

Sorry. You said "It's macro benefit is stability, efficiency and flexibility in the labor market." In that vein, I would think that the Japanese scheme of job retention and retraining would work better than the scheme to let people lose their jobs and then redistribute wealth from the currently-employed to them.

Salaries are like remuneration of any kind -- incentivising sought-after activity.

Salaries aren't an incentive because they aren't what people want. What people want is to satisfy material want-needs. Salaries get material goods and jobs get salaries. The point of work is not work, it's not even a salary, the point of work is the satisfaction of material want-needs.

This is the point of work and salaries, and wealth redistribution: to satisfy material want-needs. They all have the same goal.

Note the semantic element indicating change from one condition to another. BECOME rich. Generate wealth.

But Mises' point is that, all else being equal, a product that has a potential market of 100 will almost certainly make less profit (and a lesser return on investment too) than one that has a potential market of 1,000,000.

Think of it this way, too: with mass marketing, initial one-time costs like R&D are spread out more. Thus the profits are higher per unit as well as in net.

I think the difficulty is that we are comparing different products with different capital requirements and different costs. If you levelled those factors, then selling en masse would bring greater returns both in total and as compared to initial investment. Economies of scale and all that.

[Guest eureka]

One statement says that the poor and the middle classes in the US consume the same amounts of basics. Another says that the poor consume 100% more protein. Which is it?

I suspect the latter and that the protein is from cheap ground meat since the poor in the USA cannot afford a better diet.

The "poor" in the US are worse off than in any other Western state. You continually avoid the reality that the bottom 20% in the US have lower incomes and wealth than in any other advanced nation.

The living area is a convenient crutch to lean on but it does not wash at all. It is, in fact, part of the problem of poverty in that in Europe, the denser occupancies lead to superior social arrangements and to mobility that the poor in the US (and Canada) do not have.

One huge advantage Sweden has over the US is in healthcare. Healthcare costs in the US reduce millions to poverty but none in Sweden. For 6% or so of GDP, Swedws have a first class health system while, for 14%, the US has the worst Wetern system for half of its people - the lower half of course.

Pensions are not a "wealth redistribution" no matter what your Austrian school says. They are something that all have paid into and are getting the return on their investment. If the funds are inadequate, it is because they were not properly vested.

The difference between life expectancy in Hong Kong and Sweden is not an economic calculation only. It is genetic and lifestyle. The lack of pensions in Hong Kong is a deception. Hong Konk did not have the economic drags on the individual that we have suffered from in the past. That is changing and Chinese from Hong Kong quickly lose their advantage when transferred to a Western lifestyle.

People also work because they must work. It is something inherent in human nature and humans have never merely lain on the cave floor until their stomachs began to rumble. The need is not merely material