Skip to comments.There's No Iniquity In Income Inequality
Posted on 06/15/2011 3:22:41 AM PDT by billflax
Demagogues in Washington are thrilled to ply their vote-buying wiles promising to punish greedy rich villains, but the wealthy are not the evil caricatures of popular imagination. Riches are not generated by depriving others. Some actions grow the proverbial pie. Others shrink it. Those prospering society through work, innovation or investing their capital deserve to be rewarded accordingly.
Greed has been prominently blamed for the current downturn and it certainly contributed, but not entirely in the manner depicted by the intelligentsia. In the Marxist conception of economics as a zero sum game, one's profits must correspond to another's losses. Businesses earning healthy returns are seen as immoral and limited government cited as the tool by which those on top exploit the masses. Society is comprised of victims and villains, with those helpless souls trapped at the bottom being pinned under those climbing their backs to the top. It is therefore government's just role to redistribute power and wealth to the downtrodden.
Those who bought too much house weren't greedy; that moniker only suits the banks which lost dearly on the unpaid mortgages. Companies losing money should be defibrillated back to health with transfers from those still creating the wealth sustaining us. The unemployed should be financed by those still getting up each morning. The villains are those creating the wealth that improves all of our lives and the victims are those who don't work or honor their financial obligations.
But all this demagoguery is nonsense. It attracts votes, but a culture built on covetousness is unsustainable.
(Excerpt) Read more at realclearmarkets.com ...
Why the excerpt?
Every time a Democrat (Marxist) uses the word "rich", as in "more taxes on the rich", we should say, "oh, you mean our economy's engine, our employers and investors?"
“When socialist-leaning reporters, teachers, social-workers, community activists, etc. bemoan how the rich attained their wealth only through robbing or exploiting others, (the classic class warfare agitprop) - the message is clear: HARD WORK IS FUTILE.”
Clearly, this is where the real damage to our society is done.
A drastic overstatement.
Riches (for a given individual) are often indeed generated by depriving others. Robbery, con games, in fact all types of property crimes. Look at all the 3rd world dictators who have become wealthy by depriving their people. Entitlements and transfer payments in this country and other welfare states generate income, if not usually wealth, by depriving others of their property. Crony capitalism deprives others, even if the exact people from whom the wealth is stolen are hard to identify.
Historically, depriving others was the most common and reliable way to get rich. Invade a neighbor, steal all their stuff and sell the survivors into slavery. Through most of history this was not only common, it was considered highly honorable behavior.
What the author is trying to say, of course, is that a wealthy person does not inherently gain that wealth by depriving others, that wealthy people often create new wealth. Historically, this has been much more common since the Industrial Revolution.
But becoming wealthy by generating wealth rather than by taking wealth away from others is by no means always the case, unfortunately.
Of course that is only the message until things fall apart. Afterwards, the message is "Arbeit macht frei."
Very good points. Thanks
Another thought crossed my mind.
Through most of human history and still throughout most of the world, there was a strong correlation between political power and wealth. To a very large extent wealth was a result or byproduct of the acquisition of political power. If anyone managed to become wealthy without either having political power himself or strong political allies, he was usually looted of his wealth in pretty short order.
For some reason, this appears to seem normal and expected to people. We may be genetically programmed to accept that those with power over us will also have more stuff.
Only in western nations since the development of rule of law has there been a real disconnect. It became possible to acquire great wealth and even hold onto it generation after generation without holding equivalent political power.
This seems to disturb many people. Possibly it explains to some extent the greater animosity by leftists towards the businessman of great wealth than the aristocrat of equivalent wealth but with some political rationale for holding it.
Totalitarian systems of all shades, which essentially give control over, if not necessarily legal title to, all property in the nation to the political leaders seem to be an attempt to get back to a more “normal” system, where control of resources is directly tied to political power.
I’d be very interested in opinions on this subject, as I’m still trying to work through my own thoughts.
Some of that was covered in The Courage to do Nothing. Marxism was a reversion back to feudalism, albeit an atheistic version. Here is an excerpt -
Decline in Character; Increase in Government
Americans became soft due to our plentiful affluence. When our fortunes slipped, we clamored for government help. In the infantry we had a saying, Hardships dont hurt a marine. Hardships make a marine. Or, as basketball coach Rick Majerus explained, modern parents want to take all the pain, all the heartache and all the sadness out of their kids lives. All the things that make you a better person . . . all the things that are so much the fabric of life. Failure provides an excellent education. Problems are opportunities to fix the future. Parents try to eliminate all the pain from their childrens lives and then want government to take all the pain from theirs. Most of the consequences of welfare and the nanny state are not economic, but the loss of our rugged individualism and frontier spirit cost our economy dearly.
As historian Theodore Roosevelt Malloch wrote of our financial crisis:
Moral crisis cannot be dictated by governmental power or throwing money at problems. One of the paradoxes of the progressive movement is that it has spawned public policies that have as their collective consequence an end totally opposite to the one intended. Instead of offering temporary help to a needy few, we have expanded the ranks of those perpetually in need. Where communism failed to create new socialist man behind the former Iron Curtain we are succeeding in America. Instead of creating a society of free and responsible individuals, we have created the entitlement generation(s). Ever since we proclaimed that we should be free from fear, we have been afraid to be free.
Society wants the government to play the knight in shining armor riding in for the rescue. We have traveled down Hayeks Road to Serfdom, i.e. feudalism, with its social contract that serfs work for the land and the knight defends the land. Feudal societys reliance on the serfs coerced labor to create food in exchange for the umbrella of his lords protection retarded economic development. It offered security, but as Nobel laureate James Buchanan notes, As individuals become increasingly dependent on the market they become correspondingly less dependent on any identifiable person or group. In political action, by contrast, increasing dependence necessarily becomes increasing subjection to the authority of others. The market can be scary, but as we trade liberty for security, we also trade away prosperity. Theres a reason the Dark Ages were dark and it wasnt economic progress.
According to Washington Post economist Robert Samuelson, We are relearning an old lesson: The business cycle isnt dead. Prosperitys pleasures breed complacency and inspire mistakes that, in time, boomerang on financial markets, job creation and production. The seeds of the recession were sown in the boom and the seeds of another false boom are being sown now. Government needs not intervene, yet government acts because many Americans want it to act. We asked Washington to ease our pain because we turned into a nation of wimps. Government gladly responds because politics attracts power hungry people.
We cant even have a headache without reaching for aspirin. We are the most over-medicated society in history. Rather than let the business cycle run its painful course to clear out the inefficient, the wasteful and irresponsible so we can rebuild around the strong core, we are preventing its curative medicine. Artificially inflated home prices must be allowed to gravitate back to their real value. Disequilibria must find equilibrium. Instead, were expanding the heroin dosage because the withdrawal is hard. The brainwashed masses knowing nothing of history or economics and unwilling to endure hardship clamored for a new FDR convinced by socialist history teachers he saved America. We thought we traded freedom for security, but in effect we traded prosperity for tyranny.
Government gives the economic addict a still greater hit rather than endure any pain. Power hungry politicians justify stealing from private citizens so they can redistribute to their supportive constituents under the guise of Keynesian stimuli. The same politicians meanwhile burden their unsupportive constituents with painstaking regulatory nonsense. Obama wants to ramp up the disclosures by banks regarding 401-k fees even as he lessens the disclosures unions must make regarding their use of members dues. Politicians pick winners to suit their ends. We all see the make-work jobs created in the spending sprees. Less obvious are the productive jobs lost as an inefficient government confiscates taxes from efficient profitable producers. We need Frederic Bastiat to teach us about what is seen versus what is unseen. The crisis wont kill us. The stimuli might.
Hayek warning about serfdom understood something lost on Americans with no appreciation for history or our cultural heritage. Doctrinaire Marxists were surprised that the only nations where Communism came indigenously were agrarian, but we should not be surprised. Russia, China, Korea, Vietnam and other Third World countries were still essentially feudal prior to their revolutions. Marx predicted the proletariat or working class would overthrow their exploitive industrial masters, but Communism in practice became just the opposite. It was in essence a return to feudalism, albeit a centralized feudalism. Unlike slaves who belonged to human masters, a feudal serf belonged to the land. The lord may change, but the serf could not. In Communism, the worker is a serf belonging to the state. In feudalism, the lord derived his authority from heredity. In Stalins Russia, the commissar derived power from party affiliation, but the benefits and hierarchy were similar even if the titles differed.
The strongest opposition to Bolshevism was not the nobility or industrialists, but the kulaks, the newly freed, land-owning peasants. Neither was the Marxist intelligentsia derived from the exploited working class. Marx, Mao, Lenin, Fidel, etc. all came from the middleclass. Frederick Engels and Che Guevera were sired from wealth. Theirs were not ideologies of justice for the poor, but jealousy against the aristocracy. The guilt that comes with inherited, easy wealth playing on the covetousness of the middleclass united to whip the listless urban poor into frenzy. As they came to power, they copied the nobilitys failings even as they lacked the honor and chivalry that accrued to aristocrats defense. Noblesse Oblige gave way to bloodthirsty oppression. Atheism wrought horror. Socialism has never been about justice nor has it ever brought equality. It is a politics of jealousy and guilt and frequently turns brutal in practice.
Plato evinced a similar warning in The Republic, Wealth is the parent of luxury and indolence, and poverty of meanness and viciousness, and both of discontent. The rich fueled by guilt and the idle poor by jealous rage. Obama knew how to play the crowd better than any socialist since Hitler. He stirred the crowd with, Yes we can, like at a high school pep rally. Bored, upper-class whites feeling guilty that their lives are too easy and blacks fed bitter resentment against the oppressive system thought his Change act offered something new. It didnt and the results have never been good. Now that Obama is president, the only change evident is who pays and who benefits, but freedom has been grossly eroded.
In blatant cultural Marxist fashion, Obama evokes class warfare as if we reside in a feudal society where the rich do take from the poor, The problems of poverty and racism, the uninsured and the unemployed are rooted in the desire among those at the top of the social ladder to maintain their wealth and status whatever the cost. Yet for these exaggerated problems he calls for the cure sure to exacerbate them, Solving these problems will require changes in government policy.
The founder of Fabian Socialism, Thomas Davidson cuts through the facade: Feudalism was socialism. That is often forgotten. As we usher in socialism we revert back to feudalism without any of its historical and moral constraints. Herman Hoppe compared godless socialism to Americas version of feudalism in the antebellum South:
While it occasionally happened that a private slave owner killed his slave . . . socialist slavery in Eastern Europe resulted in the murder of millions of civilians. Under private slave ownership the health and life expectancy of slaves generally increased. In the Soviet Empire healthcare standards steadily deteriorated and life expectancies actually declined in recent decades. The level of practical training and education of private slaves generally rose. That of socialist slaves fell. The rate of reproduction among privately owned slaves was positive. Among the slave populations of Eastern Europe it was generally negative.
We elected a demagogue as president confined by a constitution, but he thinks hes king and his ambition is insufficiently restrained by law. Describing what humbled him during his first 100 days, Obama admits, I cant just press a button and suddenly have the bankers do exactly what I want. That doesnt sound like humility and offers a fearsome prospect regarding his intentions.
Sorry too busy to write something fresh.