Thursday, January 31, 2013

My Scholarly Contributions

I was asked, "I am interested in your perspective on what you feel may be the greatest scholarly contribution you have made in the area of online learning, particularly your recent contributions on OER?  I also noted from your website that the focus of your research interests has shifted during your career and I am curious to know what prompted the change in research interest?  Was it an evolution of the use of technology as technology matured?  The interest of government and other funding sources?  A personal interest that was sparked by insights or events?  I would also like to know if there is any advice that you could give me as I attempt to make a meaningful contribution as an academic and perhaps even have some influence on the quality and availability of education around the world?"

I don't really sort my contributions into linear order, and hence would hesitate to identify a 'greatest' contribution. Among the major work I have done:
- defining a community-based sustainability model for OERs
- designing content syndication mechanisms for learning resources
- learning networks (ie., both using networks to learn, and learners as networks that learn), aka connectivism
- massive open online learning, which is a combination of the three things above
- the groups vs networks distinction, characterized by autonomy, openness, etc
- the induction model of learning (ie, learning is not content transfer)
(I may have left some out; I really don't keep score)
- critical literacies and speaking in lolcats 

Key events changing or modifying my interests:
- I began life interested in the sciences, social sciences and media
- I took up computer science in 1979 at the advice of my father, who worked in communications technology
- I started studying philosophy in 1981 because all the English courses I needed fo my physics major were full
- I began my focus on access to education writing with the student newspaper because I was denied access for so long
- I was offered a job as a tutor at Athabasca University in 1987, which began my interest in distance education
- Jeff McLaughlin and Istevan Berkeley introduced me to online games, MUDs, in 1992 or so
- I discovered Connectionism in the early 1990s, saw Francesco Varela at UA Hospital, attended the Connectionism conference at SFU

Government and funding agencies have never been interested in my work. My PhD committee at the U of A absolutely refused to consider my dissertation proposal on connective models of learning, inference and discovery (see here). My employers have generally opposed my development of an academic and research career (even now I am under a full travel ban, which I am defying by speaking at conferences on vacation time and at my own expense).

Advice? Only this: find what you consider to be right and true, and pursue that. Not that this is not the path to material well-being or a successful career, though sometimes good things happen anyways. Do what you need to do to stay employed, but as the old sea-faring slogan goes for riggers working on the mast, use one hand for the ship, but keep one hand for yourself. But in all that, focus your work on serving others, not enriching yourself, because your work will have no value to you otherwise. Write from the heart; don't be a slave to academic form, but don't ignore it. Back up your reasoning with evidence, and reason soundly from what you know and what you have experienced, not what you have been told. Understand that argument rarely convinces anyone of anything, that an understanding of principles of reasoning is to protect yourself from error, not to correct other people in theirs, that time spent explaining what you are doing and why will often pay off, but not everyone will support you, and often nobody will, but if you are true to these principles, that won't matter. And, at the end of life, the only thing that will matter to you will be what you gave to the world, not what you took from it. Share.

Wednesday, January 30, 2013

Where's Our Corporate Tax Referendum?

The big news today is that New Brunswick Premier David Alward is willing to consider a referendum on the HST. CBC News reports, "the provincial government could hold a referendum on an increase in the harmonized sales tax before the 2014 provincial election."

Alternatively, the proposed HST increase could simply become an issue in the next provincial election, as the local newspaper suggsts today, with Alward running against it. No doubt the newspaper would enjoy that; it would be like the toll highway debate.

As David W. Campbell observes, "if Al Hogan turns lock stock and barrel against you – you end up with 11 straight days with the front page story on the evils of toll highways. By election day poor old Camille Theriault had little horns coming out the sides of his head."

The last thing we need is to have our electoral politics decided by our sad and biased little local newspaper.

So I say - by all means, hold the referendum. But while we're holding the referendum, let's put some of the other taxes to the vote, too. In particular, why don't we find out what the electorate thinks about the corporate tax rate.

After all - as was widely reported outside the traditional media today - it's Corporate Tax Freedom Day today - the day corporations finish paying their 'share' to the government of Canada, and begin paying themselves.

(I listened to some whiny shill from the Canadian Taxpayer's Federation today on News 91.9 try to undercut the premise; he argued that corporations pay thirty-three percent of their net profits in tax, and that the corporate hoard of unused cash was created by their borrowing it - among other whoppers).

We know how little corporations pay by looking how much rescinding the last corporate tax cut would raise. According to figures widely cited today, while raising the HST two percentage points would raise $270 million, and while rescinding the most recent income tax cut would raise 320 million, rescinding the previous corporate tax cut (which sent sent the lower rate down to 4.5 percent and the higher rate to 10 percent) would raise only $25 million.

Of course, that just tell us how little tax corporations are paying. To put things in a little perspective here, let's keep in mind that the combined wealth of Arthur, James and John Irving is $8.07 billion. $25 million? They lose that in their couch cushions!

So where are we in the world of corporate tax rates, anyways? The province is shrinking, there's almost no corporate investment coming in, and business is in the pits. So it must be the effect of high corporate taxes, right?

No. In fact, the opposite - New Brunswick is rated as the lowest corporate tax province in the country. "The lowest METRs (Marginal Effective Tax Rates)  are in New Brunswick due to its relatively low corporate income tax rate of 10 percent, as well as the Atlantic Investment Tax Credit, which benefits the manufacturing and forestry industries."

What does our government do in the face of a persistent deficit crisis? It lowers corporate property taxes - benefiting those starving industries like Costco and Walmart. "NB Power will save $1.5 million alone on its property tax bill once the policy is fully implemented, followed by J.D. Irving Ltd. ($800,000) and the Potash Corp. of Saskatchewan ($600,000)."

Do you think that this is a tax measure that would be supported by the people in a tax referendum? It wasn't even supported by the province's Business Council, which is in fact recommending the government return corporate taxes to the 13 percent level (personally, I don't see why corporations which have billions of dollars can't pay taxes at the same rate I do, but that's another story).

If pushing the corporate tax rate lower and lower would actually help the economy in this province, then I'd be in favour of at least thinking about it. But the evidence says otherwise. Corporate tax cuts are not some sort of magic cure for the economy. They do not create more jobs.

Here's Rana Foroohar, in Time not too long ago: "Fundamentally, lower taxes aren’t the reason that businesses choose to invest, or not, in a certain country. As Warren Buffett told me when I interviewed him late last year, “The idea that American business is at a big disadvantage against the rest of the world because of corporate taxes is baloney in my view. In the 50s and 60s, corporate taxes were 52%, and we were making all kinds of [job] gains.”

"True enough. In fact, you can see more and more evidence for the fact that business doesn’t locate in a particular country just because it’s cheaper to do so. Consider the recently released Harvard Business School study looking at insourcing and outsourcing decisions among 10,000 alumnae who are running American businesses.

"The key reason for outsourcing wasn’t labor cost, but a combination of cost, proximity to market, and (most importantly) better worker skill sets abroad. In order for America to create jobs at home, we need to do the heavy lifting to reform education and develop workers who can do the sort of jobs businesses need them to do."

But that's exactly the opposite of what our provincial government is doing. It's putting the squeeze on education and skills development. Remember just last fall, when education minister Jody Carr informed schools they'd only be getting 70 percent of their allocated funding?

We have the money, apparently, to give tax breaks to Wal-Mart, but not to fund our children's education. Not because of any well-founded economic strategy, but because, um, well, ... why? We don't know.

So, again, by all means, let's hold tax referenda. Let's get the issue out there. Let's have some kind of open debate on the matter (a real debate, not some Al; Hogan parody of a debate). How much is fair? How much should corporations pay to support the roads their tucks drive on, the trees they harvest, the skills of the people they employ, the health of the people who work for them?

Let's have a referendum on corporate taxes. Let's have a referendum on how much the wealthy should pay in taxes. Let's also vote on the tax credits they get, the forgivable loans they get, and the other incentives they get. And then - and only then - should we have a referendum on the HST.

Monday, January 21, 2013

Progressive Taxation and Prosperity

Responding to Justin Fox, editorial director of the Harvard Business Review Group, How big should a government be? in the Harvard Business Review blogs.

Interesting discussion overall, and it would have been nice to see the actual data presented in the paper linked by the Washington Post article (instead of 'data table goes here' notices). It would be interesting to examine whether U.S. tax rates really are more progressive (and whether tax rates are really relevant at all to people without an income) but that would be t miss the main point.

Which is this: while granting that government really should be bigger, Fox argues, "as his research also shows, it really can't be done just by raising income tax rates on the wealthy. The U.S. already has about the most progressive income tax system around. European social democracies tend to have flatter income taxes, plus value-added taxes that hit all consumers. They tax capital gains and dividends at lower rates than regular income, just as the U.S. does, but they also all have lower corporate tax rates than the U.S."

But this doesn't follow. The proposition that the U.S. has a more progressive system than Europe does not entail that the U.S. system cannot be made even *more* progressive. Nor does it follow (from this assertion, at least) that making it more progressive would be a bad thing. Indeed, the difficulty with which tghe 'less progressive' tax regimes in Europe have had coping with the economic crisis suggests that having the means to tax windfall profits makes it easier for nations to cope with economic turmoil.

This argument is pernicious because it infers that progressive taxation hurts growth - drawing from Peter Lindert the Washington Post article argues "European countries needed tax systems that could raise a lot of money without hurting growth, and only regressive consumption taxes fit the bill."

The primary argument against progressive taxation, iterated in the Prasad and Deng paper (p. 27) is that income taxes penalize work effort in a way that regressive consumption taxes do not. Fox restates this point: "The economic logic behind all this is that progressive tax systems and means-tested social programs can carry with them big disincentives to work." An additional argument is that income taxes make the cost of government programs more apparent, prompting taxpayer backlashes. But none of this follows from the study either; it is speculation, at best advanced as putative explanation for the data, but not inherent in the data.

More to the point, even if we accept the proposition that the U.S. has a more progressive system (and again, this is far from beyond dispute) nothing in the data supports any of the conclusions advanced in this article. For example, we find Switzerland, Canada and Australia all around the 28 percent income redistribution range, yet at opposite ends of the 'progressiveness' scale, with Switzerland not very progressive and Australia near the 'progressive' status of the U.S. On the other axis, we find Canada, Germany and Belgium all around 0.1 in the 'progressiveness' scale, but varying from 28 to almost 50 on redistribution, the opposite ends of the scale. So it seems very difficult to assert a correlation between progressiveness and redistribution without introducing a large number of caveats and qualifications.

In fact, it is regressive taxation that is most obvious to the mass of people and which is most likely to create a voter backlash. Canada's Conservative government of the 1990s, after it introduced the Goods and Services Tax (GST), was reduced from a strong majority government to a 2-member rump. In Britain the Value Added Tax (VAT), introduced by the Conservatives in 1973, was followed by a Labour victory in 1974 and an even more extreme anti-tax government under Margaret Thatcher starting in 1979.

The basis for economic success following the introduction of consumption tax is therefore not related to voter satisfaction with taxation levels. Rather, consumption taxes conferred on Europe, and later on Canada, an export advantage. These taxes replaced existing sales, corporate and manufacturing taxes. They were levied at the point of final consumption only; business-to-business transactions were exempt from the taxes. They thus represented a considerable state subsidy for export industry, financed by consumers, that created prosperity in increasingly competitive international markets, and especially against the United States.

Europeans (and Canadians) have used this prosperity to support a range of social programs; these programs have in turn insulated the population from the worst effects of the economic downturn in those nations that could afford them. Would a GST or VAT help the United States? It may raise more revenue, but with corporate taxes already at historic lows, it will not generate an export advantage, and will not stimulate growth; indeed, the drop in consumption would create a recession, as it did in Britain in the 1970s and Canada in the 1990s, but on which, with no export upside, would be longer-lasting and more severe.

In the face of recession, particularly a recession in which incomes have been hit hard and consumer spending is quite low, the best mechanism for recovery is to put more money into the hands of those most likely to spend it, which is as always the poor. This is what Stephen Harper did in Canada, reducing the GST by two percent. Because economic growth is hampered not by the disincentive to earn, but rather by the inability to spend. Indeed, the suggestion that higher taxation makes rich people work less hard is spurious and inaccurate; the wealth the rich earn year after year has little to do with their effort, and far more to do with the advantage derived from their existing wealth.

To tell us, as this post does, that there is no point to taxing the rich is to build a fallacy onto a fabrication, to perpetuate the foolish presumption that it is the rich who generate wealth in an economy, and therefore only the poor who should pay for social programs. It is, frankly, an outrageous lie. Society requires not just the labour of its people to generate wealth, but also their active participation in the marketplace. When money flows disproportionately to the wealthy, they hoard it, or spend it frivolously.

Thursday, January 17, 2013

What Makes a MOOC Massive?

Responding to a LinkedIn Discussion.

When people ask me what makes a MOOC 'massive' I respond in terms of the *capacity* of the MOOC rather than any absolute numbers.

In particular, my focus is on the development of a network structure, as opposed to a group structure, to manage the course. In a network structure there isn't any central focus, for example, a central discussion. Different people discuss different topics in different places (Twitter, Google Groups, Facebook, whatever) as they wish.

Additionally, my understanding is that for the course to be a *course* it has to be more than just a broadcast. Otherwise, 'Adventure Planet' is a MOOC. Or National Geographic Magazine is a MOOC. A course actually requires these interactive and skills development activities, rather than simply consumption of content.

So what is essential to a course being a *massive* open online course, therefore, is that it is not based in a particular environment, isn't characterized by its use of a single platform, but rather by the capacity of the technology supporting the course to enable and engage conversations and activities across multiple platforms.

In the first connectivist MOOC, for example, we have 170 individual blogs created by course participants (in Change11 we had 306 feeds). What made the course a MOOC is that these contributions were comprehended as a *part* of the course, and were all accessible to course participants, either directly, through the newsletter, or through alternative syndication using an OPML list.

Similarly, there wasn't just a Twitter conversation, or Second Life event, that happened coincidentally with the course, but rather, these events outside the 'main platform' were construed as part of the course, and comprehended in the course description, relevant links, newsletters, etc.

The big danger, to my mind, in a large online course is that through strong group-formation activities, it can become a small online course. This happens when a central clique or insider group is formed, or where you have inner circles and outer circles. The inner circle, for example, might expect and demand preferential access to and individual attention from the course facilitators.

When this happens the dynamics of the course change - for example (and not these are my observations and opinions, not hard established fact) the primary value becomes cohesion and agreement, rather than diversity and distinct perspectives.

When the course functions as a small group, there is an expectation that everyone will agree on the course content, objectives, and domain of discussion. But, in fact, to be a massive course, it must needs respect a wide variety of individual objectives, perspectives on course materials, and opinions about relevant topics of discussion (not to mention technological platform and language of 'instruction').

Consequently, when I have been asked in the past what number a course needs to attain in order to be considered 'massive', after providing the caveat just given above, I provide the figure of 150, Dunbar's Number, as the cut-off line.

Now to be clear, this would refer to *active* participants, and not merely the number of people who signed up. Thus for example the course that has 170 active blogs *does* qualify, while CFHE, which had 83 blogs, is on the cusp (it would need another 70 people active on other platforms, such as Twitter or Google Groups).

Why Dunbar's number? The reason is that it represents the maximum (theoretical) number of people a person can reasonably interact with. How many blogs can a person read, follow and respond to? Maybe around 150, if Dunbar is correct. Which means that if we have 170 blogs, then the blogs don't constitute a 'core' - people begin to be selective about which blogs they're reading, and different (and interacting) subcommunities can form.

I sketch the difference between 'groups and networks' in this diagram - http://www.flickr.com/photos/stephen_downes/252157734/

Wednesday, January 09, 2013

Income Support

Responding, again, to David W. Campbell, on  EI and local labour market distortions

First. A statement that something "has a distorting effect on local labour markets" suggests that there is some natural 'non-distorted' state of those markets. One wonders what that state would be - does it include the 'distorting' effects of gender equity, the 'distorting' effects of minimum wage, the 'distorting' effects of government employment in the region? Or - more logically - should we not just conclude that use of the phrase 'distorting effects' is shorthand for "I have no argument here but I want to make the case anyway."

Second. When you use the phrase "an income support program for seasonal workers" you suggest (as is typical in the media) that the primary beneficiaries are the employees. However, this "income support" mostly supports the industries that have been depending on governments to subsidize their operations, allowing them to hire people part time without vacation leave or other benefits. This is the sort of support large corporations and friends of the government routinely receive to subsidize their operations, but under a different guise.

Without reasonable access to EI, people are not going to stay in the region unless they absolutely have to. If you want to develop a region economically, the first thing you have to do is ensure that the workforce has income security. Without that - under whatever name you call it - you have nothing at all. Conversely, the removal of income support is a very clear statement that the government is not interested in economic development. Which raises the question, what *is* it interested in?

Friday, January 04, 2013

The Times & Transcript Comes Out Swinging

Our local newspaper in Moncton, the Times & Transcript, came out swinging today with an article attacking citizen journalism authored by new columnist Steve Malloy. The title sets the tone: "Even amateur news hounds should take responsibility."

The article is of particular interest to me because, as a long-time blogger, newsletter author and sometime amateur journalist his criticisms are aimed squarely in my direction. One can only speculate whether the column is in response to the Moncton Free Press or has some other media in mind, but it still bears refuting.

Malloy takes as his starting point the sad incident where a photographer captured an image of a man just seconds before he was killed by a subway in New York. Journalistic integrity didn't even cross his mind before he snapped the photo, writes Malloy. Maybe not, though the discussion continues.

Although these photos were published in the New York Post, and not on some amateur journalist's website, Malloy writes that it's typical of a "disconcerting trend that has taken hold of our area."

"Folks armed with cell phones, digital cameras and police scanners have dubbed themselves 'citizen journalists,' of a sort, and have made it their mission to share every single bit of 'news' that happens in our area."

This particular description fits Moncton's own NewsChaser, Ray Richard (profiled here), and Fredericton blogger Charles Leblanc. There may be others with news scanners who chase down news, but I am not aware of them. But there are numerous others writing and reporting on local news and any of them might feel they are the subject of Malloy's remarks.

Certainly, some of the Facebook groups covering local issues such as the high school and fracking might see themselves being described here: "if a crime or incident of great public interest occurs, a kangaroo court is instantly established in these groups with waves of information being discussed regardless of their validity."

The people in these groups, or taking pictures at accident scenes, or reporting on "every single bit of 'news'" are not qualified to make these judgments, argues Malloy. "Journalists don't just wake up one morning and decide they're reporters. It takes years of study and honing their craft to earn the right to be called a newsperson."

Moreover, "they are bound to a strict code of ethics and do their jobs with impartiality,  accountability, and with strict analysis and consideration of all fact before bringing their story to the public at large."

Malloy likens the scrutiny of citizen journalists as being akin to being watched by Big Brother, but instead of being run by government, "it's 100 per cent powered by the folks you share a community with." Perhaps their time and effort would be better spent elsewhere, writes Malloy.

Malloy admits that he's not a journalist, "just some guy with a lot to say who has been generously given a place to say it." In this he has unwittingly pointed to the major problem with journalism in Moncton.

It would be nice if the journalists in our local newspaper were qualified to make ethical decisions, had benefited from years of training, and were bound by a strict code of ethics. There is no evidence, however, that they are. Indeed, the bulk of what is offered up by the Times & Transcript is the opposite of that.

I've probably had more training in journalism than most of them: five years at a student newsletter, a dozen years running an online news site, and the last year with Moncton Free Press. And certainly Graham Decarie, one of the paper's most vocal critics, who has taught media ethics at university, has more background and experience.

And while we in our efforts do not cover "every single bit of 'news'" that happens in our region, we have become painfully aware of just how much actual real and genuinely important news is simply overlooked by the local newspaper as irrelevant.

Here's what Decarie says of the coverage such as that offered in the Times & Transcript: "The news media, far from having standards of any sort, are awash in prejudice, lying, manipulation, half-truths, ignorance. They are also whores for the owners. There is a whole library of books on this. I would give Mr. Malloy a list of the books - but anyone who can write for the TandT and not know what it is would not be able to understand a book."

Through the last year I have been monitoring not just the newspaper and Facebook groups but also the city and region's alternative publications and news sources. There are dozens of them. This not only tells me exactly what the newspaper has been ignoring (which is most of it, especially from non-business groups) but also what press releases the newspaper has been copying word for word, without attribution, and publishing under the byline "Times & Transcript Staff".

But most of all, what I have found is that the Times & Transcript is the least reliable source of media in the city, by a wide margin. Compared to local and regional coverage offered by CTV News, CBC news, News 91.9 and other media, it is generally last and least accurate. And there is the constant bias, not only in story selection, but in presentation and description as well.

Malloy's own column is in fact just the most recent example of that. Is there any evidence that citizen media has been acting as he describes? Have we been covering the news irresponsibly, shocking people with accident photos of their beloved or reportage of bathroom spills? Have we been misrepresenting the truth, distorting facts, and behaving like Big Brother? No - there is no evidence of this. Malloy's characterization is a complete fabrication. It's based - like so much of our local newspaper's coverage - on what he thinks must be the case, instead of actual journalism.

It makes me yearn for a way to be able to present all of that to people in the city, in a professional and convenient format, and that is what the Moncton Free press has been designed to do, and eventually, will do.

Don't take my word for it. Review Decarie's columns, offered daily for the last year, for reams of coverage of the city's most yellow journalism.

Of course, two wrongs don't make a right. The poor coverage offered by the professional media in this city does not excuse excesses by the city's citizen journalists. That's why there is such a need for as expertly developed and deployed citizen publication as possible. We still have a ways to go with the Moncton Free Press - we need more coverage, and better coverage.

And yes, if someone were to ever become trapped in the Subway, we should put down our cameras and help.

But at least we're trying to produce a professional product.

And Malloy is actually right about one thing. We actually do have better things to do with our lives. We may have day jobs, or other interests, and don't have the time to do the work we'd like to do. What would be most ideal would be were it not necessary to develop and run citizen media in this city.

But alternative media springs up, Facebook groups spring up and blogger websites spring up when the people of the community are denied a full and legitimate voice in their own media. When the publications that should serve the public good are co-opted to serve private and corporate interests. When the journalists who should be non-partisan not only take sides, but very transparently and deliberately resort to fabrication and manipulation to promote their (owners') point of view.

We who are engaged in citizen journalism, not just in Moncton but around the world, have concluded that there is no alternative way to support and ensure a free and objective media. We have given up trying to convince these publications to do right, and have instead concluded that they can't.

Thursday, January 03, 2013

Income Inequality and the Wealth Tax

Responding to Branko Milanovic, Lead Economist in the World Bank research group and a visiting professor at the University of Maryland School of Public Policy, Why Income Inequality Is Here to Stay, in the Harvard Business Review blog.

This article does not establish that "income inequality is here to stay" and beyond the discussion of two political philosophers does not address either the cause of income inequality nor the desirability of ending it.

Income inequality is the result of a structural defect that allows those with more to continue to accumulate more, while at the same time limiting the gains or even forcing losses on those with less. It is the consequence of what might be called a 'scale-free economy', similar to a scale-free network, which disproportionately rewards prior advantage.

Scale-free economics apply not just in the domains of financial wealth, but in other distribution systems as well. For example, web-sites on a given topic created earlier will accumulate more links, all else being equal, than those created later (all else is of course rarely equal). The principle applies independently of the cause of the increased wealth, which is why focusing on specific mechanisms (such as inheritance tax or free education) does not address the inequality.

In nature, inequalities in networks are addressed by physical constraints. A tree trunk can only be so much larger than the branches before it collapses under its own weight. A major airport can only be so much larger that a small airport before being overwhelmed by too many flights. In economics, too, the best and only way to restrain income inequality is the imposition of physical constraints.

In professional sports, franchise owners have learned that income inequality reaches unsustainable proportions unless some form on income or salary cap is imposed; even though the number of qualified athletes is almost limitless, competitive franchise owners will, unless restrained, spend more and more on even the smallest of an advantage.

The same approach would be appropriate in wider society. Rather than address causes, the accumulation of wealth itself should be addressed by policy. Some measures that have come close to this are progressive income taxes and property taxes (the equivalent of baseball's 'luxury tax') but as we have seen, the wealthy are uniquely positioned to find ways around these constraints (thus, for example, Ilya Kovalchuk's17-year contract) as these penalize transfers of wealth rather than actual accumulation of it.

To address income inequality, it should become structurally more and more difficult to maintain large qualities of wealth, either by individuals or by corporations. Accumulations of wealth, such as the trillions of dollars currently being hoarded unused in overseas accounts should be taxed directly. Nations that do not participate in a wealth tax should be penalized financially or excluded altogether from the financial system.

Milanovic's only argument against such measures is the vague and unsupported assertion that "For all but the tamest of these proposals, any popular support is lacking." This is based on his assertion that "Citizens seem to wish for things that are mutually inconsistent: lower inequality, greater equality of opportunity (so that inherited advantages matter less), and a continuation of current low-tax policies." However, these policies are not mutually inconsistent if it is wealth, not income, that is taxed.

Most citizens would be untouched by a wealth tax, for the simple reason that they have none. Upper-middle class and moderately wealthy people would be touched by a tax similar to one they would face today. As wealth rises, the tax would become more significant, and the return from increased accumulations of wealth would become less and less. At a certain point, a maximum sustainable income is reached, at which point, one's personal comfort being assured, people can begin to strive for other objectives.

The concept of a wealth tax, despite being overlooked by Milanovic, is neither new nor untried. European nations such as Switzerland, Germany and France have instituted wealth taxes. It has been discussed by writers such as Edward N. Wolff in Boston Review (1996) and Barry L. Isaacs in U. Miami Law Review (1977). Donald Trump once even proposed a massive one-time wealth tax on the rich, in 1999.

The primary argument against a wealth tax is based on capital flight to tax havens. This is partially addressed by the proposed Tobin Tax on international financial transactions. It is also why a wealth tax requires global cooperation, with penalties applied to non-compliant nations. Recent reports have counted about $21 trillion hoarded, unused, overseas. Taxing this wealth would eliminate the U.S. debt overnight, or if applied globally, would virtually eliminate the crushing impacts of third-world debt while relieving the obligations faced by nations such as Greece and Italy, while still cutting the U.S. debt substantially.

Were the question put to the populations of democracies around the world, in free and fair referenda, support for such a measure would be overwhelming. Indeed, it is hard to imagine how the campaign opposing the measure would be conducted. The more serious issue facing the actual implementation of a wealth tax is the already existing hegemony of the wealthy. It may be too late to recover the trillions of dollars siphoned from the economy. If so, it may be too late not only for the economy but for democracy as well.

I would urge the readers of Harvard Business Review consider ways of alleviating income inequality, and of redistributing the hoarded wealth. This would be far more supportive of business and enterprise than advancing facile and frankly flimsy arguments in support of a structural defect that is pushing the global economy over a cliff.