On Free-Riders and Tax Cheats

A recent article in the NYTimes introduces the free-rider problem as follows:

“You can watch PBS without making a donation; you can enjoy clean air even if you drive a car that pollutes. Such goods, however, give rise to the so-called free-rider problem: acting selfishly makes sense for each individual (why sacrifice if you don’t have to?) but as more and more people choose to act selfishly, the good disappears and everyone loses.”

The article struck a chord with me because I had just met an accountant who stated proudly that he knew how rich people could manage their money in ways that allowed their heirs never to pay any taxes. I was taken aback and remarked, “But will they use the roads built with other people’s taxes?”, to which he answered, gleefully, “Well, the roads will not be built with their taxes!” And when I pointed out that we were currently watching a whole country, Greece, going down the tubes because, among other things, cheating on taxes is endemic there, he replied that everything he would suggest would be legal.

In other words, I had encountered a form of the free-rider problem before I even knew that it had a name. Now, I find it perfectly legitimate to try not to pay more taxes than necessary, and that’s why we employ our own tax planner. But I do consider attempts to avoid paying any taxes while fully using the goods and services created by the taxes paid by others (roads, police protection, food safety supervision, to name a few) a form of sociopathology.

I knew that “cheating the government” was an attitude prevalent in the underground economy of tradespeople, which I deal with frequently. My conversation with the accountant showed me, however, that the attitude goes all the way up to people with the highest income. This is very different in the country I come from, where people are willing to pay taxes as long as they see them used in beneficial ways. In fact, conversations with friends and what I read in online magazines suggest to me that plans of the current German government for tax relief are meeting a less than enthusiastic response. People know that as a result, the public debt would have to increase or some social services be cut, and that’s considered worse by many than having 200 Euros or so more in their pockets.

Euro 2012 (no, not that Euro!)

Today was the drawing to determine the initial 4 groups of four teams to start competition in next year's European Championship tournament in Poland and the Ukraine. These are the groups that were drawn:

A: Poland, Greece, Russia, Czech Republic (31.5)
B: Netherlands, Denmark, Germany, Portugal (5.75)
C: Spain, Italy, Ireland, Croatia (9.75)
D: Ukraine, Sweden, France, England. (23.25)

The numbers in brackets indicate the average team ranking for each group according to the current FIFA rankings (overall, not restricted to Europe, which exaggerates the differences somewhat). The extraordinary spread results from the fact that Poland and the Ukraine, the two lowest-ranked teams in the competition, qualified as host nations and were seated ahead of powerhouses such as Germany and England. Result: We have the mother of all groups of death in group B, where the lowest-ranked team is ranked higher than the highest-ranked team in group A.

Some implications in my comment...

Word of the Month: Kadavergehorsam

Word of the Month: Index

A Kadaver is a cadaver or corpse, and Gehorsam means "obedience." Kadavergehorsam refers to an unquestioning, blind obedience or a total abandonment of one's free will to a higher authority. The term entered German via the constitution of the Jesuit order as written by its founder, St. Ignace of Loyola. It demands from every member that he obey his superiors "as if he were a cadaver that lets itself be carried anywhere and treated in any which way." The term was used in Germany in the 19th century first as an anti-Jesuit catchphrase and later also in polemics against the Prussian military. It serves nowadays as a general reference to a blind obedience that's no longer desired, not in the army, not in civilian life, not anywhere. [My source]

According to the Wikipedia article I referenced, the comparison that St. Ignace uses goes back to a formulation by St. Francis of Assissi, who wrote several centuries earlier and, in turn, relied on an even earlier scholastic tradition. But it's the Germans who distilled the underlying image into the compound noun that's our current Word of the Month. This illustrates again how easy it is in German to succinctly express shaded meanings by hitching seemingly unrelated words together. I must also confess that until I did research for this month's word, I thought Kadavergehorsam simply meant obedience till you're dead. The history of the term that I discovered, though, shows that it has a much more interesting pedigree.

'Bout them Germans...

Posted by reader Heika:

Hi Ulrich, I just finished reading a review of Michael Lewis's book "Boomerang," which discusses the current financial crisis country to country. The reviewer made this comment, which for me rang very true, admittedly based on my very short stay of two years in the country:

“There was no credit boom in Germany,” an official told Lewis. “Real estate prices were completely flat. There was no borrowing for consumption. Because this behavior is totally unacceptable in Germany.”

I don't know if you can address the prices of real estate to verify the unnamed official's accuracy, but what do you think about the claim that "borrowing for consumption" is totally "unacceptable." My personal experience is that Lewis got this right, and this is one very good reason the Germans continue to do well while all around them are in despair.

Loved your latest drawing. Heika

Words of the Month: Hausdrachen, Pantoffelheld

So far, I have resisted posting WoMs that could be viewed as sexist—I briefly alluded to this when, in a discussion about maulfaul, I was asked about an antonym, i.e. a word referring to someone who can't shut up, and I had to answer that these words do exist, but tend to be clearly aimed at women and therefore could be considered sexist. I do not intend to feature such words, but today, I'm making an exception. It was simply too tempting to illustrate the word in question, sexist as it may be. But in order to be an equal-opportunity sexist, I paired it, upon the suggestion of Laraine, with a word that's sexist w.r.t. the opposite gender.

So, here goes: Haus means "house" or "home", and a Drachen is a dragon. A Hausdrachen is a woman who tyrannizes her family, especially her husband—she's a shrew. A Pantoffel is a bedroom slipper, and a Held is a hero (as in Heldentenor). A Pantoffelheld is a guy who talks tough, but takes to his heels at the first sign of danger—he's a hero only in the safety of his own home, unless, of course, he meets a Hausdrachen there. One could say that a Hausdrachen and a Pantoffelheld are a perfectly matched pair, in more than one respect.

[Source: Wild Things in the German Language: Kindle version | iBook version]

We dodged a bullet

Snowfall on Friday caused more damage to our trees than hurricane Irene did in August—it also left us without electricity for 75 hrs, which meant no water from the well, which meant the toilets stopped working once the water in the tank was used up. But things could have been worse: A white oak behind our house split and one half fell on our roof, but didn't damage the roof itself as far as we can see without the tree being removed.

Why am I reporting all of this? Because the word of the month will be delayed by a few days—I'm too busy dealing with the aftermath of all of the above.

Word of the month: Lebenslüge

Word of the Month: Index

Here's another addition to Leben ("life") that creates a special meaning: A Lüge is a lie, and a Lebenslüge is a lie people tell themselves in order to be able to live with a clear conscience in spite of the fact that some actions in the past should give them anything but a clear conscience. It appears to be a particular manifestation of cognitive dissonance, which we talked about a while ago. According to the Wikipedia article I consulted, the term goes back to Henrik Ibsen's "The Wild Duck", which means there has to be an initial coinage in Norwegian—I wonder what that would be.

It is interesting to note that in German political discourse, the term has been applied to nations or countries; for example, to countries that go to great lengths to suppress the memory of and references to atrocities that have been committed in the past in the name of the country or were sanctioned by its leaders, or to countries whose self-image or policies are based on false assumptions about events that happened in the past.