Hmm...The conversation has moved on a tad since I last posted here. The idea of dividing up the US strikes me as a bit of a red herring here. As well as being pretty unworkable- the US has a highly integrated economy, and its geographical and economic diversity is surely one of its great strengths. Historically, this diversity has allowed Americans to cope with localized economic busts and booms by moving- from the dust bowl to California in the 30s; from the South to the industrial Midwest during WW2; from the then 'rustbelt' Midwest to California, Texas and Florida in the 70s and early 80s. It seems to me that a break-up would do far more harm than good.
The objection that socialism is somehow 'immoral' and that libertarian capitalism is a more moral order is one that I've heard before, and it needs answering. The fundamental conceptual error here is this: individual efforts are being viewed outside of their social context; and yet it is only within the context of society that those efforts have any meaning. Money, for example is a social fact, not a brute fact of nature like a mountain or a disease. Money only exists because people collectively agree that it exists. When people stop agreeing that something counts as money (think: Germany in the early 20s; present-day Zimbabwe), then the money-token ceases to have value. And gold is no better by the way- it also only has value because people collectively attribute value to it. Gold is a token too.
Making money is only possible because society agrees to view some sort of token as 'money', and instantiates institutions (banks, stock exchanges, deeds of ownership etc) that allow money to be made. The set of economic institutions that any society has is a product of its history and culture. There is nothing inevitable or 'natural' about any particular set of such institutions- they are all historically contingent, and they only continue to exist because society as a whole continues to accept them. For a lone man on a desert island there is no money and no money-making.
So what of the entrepeneur, the guy who has his own business and employs other people? He plays a useful social role- without him there would be a few more unemployed, and his products wouldn't be available to consumers. He deserves our respect, and he deserves a good standard of living- I wouldn't say otherwise. Without the prospect of respect and renumeration, its unlikely that he'd have put in all of those hours, or risked his savings to start up the business. Incentives are important, and societies that don't have them are liable to stagnate.
Nevertheless...the fact remains that our entrepeneur only has money because the rest of society recognizes those 1s and 0s on his bank's computer as being something significant. He only owns his business, his house and his car because the rest of society has recognized the deeds of ownership that he has as being meaningful. He can only do business at all because of the laws that society has enacted, and the other economic institutions that society has created. Without the rest of humanity, the entrepeneur has precisely nothing. The idea that his wealth was somehow created solely by him is, I'm afraid, pure fiction. His wealth is a social creation, just like the laws and institutions on which it depends.
So, is it really moral for the entrepeneur to keep everything? Surely not. Surely the moral and just course of action is to recognise reality as what it is, and say that he owes society some of that money back. He depends completely on the efforts of others, and it is only right and proper that this should be repaid. And the more he makes, the more he owes- a wealth tax and/ or graduated income tax seems like a sensible way forward here. How much of his money should go to the rest of society is a practical issue rather than a matter of philosophical principle. Myself, I'd say that the important question is this: What kind of society do you want to live in? And I would prefer to live in a society in which people receive decent health care, the streets are reasonably safe, the gap between wealth and poverty isn't a chasm, there is a high degree of social mobility, and everyone has a stake in the social order. All of which describes Sweden rather well, but not (alas) the United States.
Incidentally, I think that Loke went way too far in describing Americans as 'slaves'. Plainly this isn't true. The US has largely free and fair elections. It also has reasonable civil rights- they used to be better before the Bush security state was enacted post-9/11, but its still a mainly free country. However, its also a country which for whatever reason is governed mainly in the interests of the wealthy, the result of which is a staggering huge gap between the rich and poor. And as well as being very unequal, its also (contrary to the popular mythology) a place with very poor social mobility. If someone is born poor in America, then its statistically very unlikely that s/he will be able to escape from poverty. If s/he is born rich, then rich s/he will remain. Even the UK, home of the legendary British class system, apparently has more social mobility than the USA. For a modern industrial state with a divisive and increasingly ossified class system don't look at Europe- look at the USA.
So I guess the question is this: why do Americans tolerate this situation? Internet access is the norm, so all of the facts that we've been discussing are available to the vast majority of US citizens. And Americans are an educated bunch- their school system functions a lot better than their health care, and their universities are rightly held in high regard the world over. The religious right is part of the answer, the tradition of individualism is another part, and perhaps a political system that requires large amounts of money for elections is important too. All the same...it doesn't make a great deal of sense to me. Whats especially bizarre is that the most important popular movement right now is the tea party, which seeks changes that would make the whole situation worse rather than better. But perhaps things will change. I live in hope.