Maggie's Farm

I linked to a CNN 'fact check' whose intent was to clarify Obama's comments so they seem more coherent and logical.  Even so, there remain massive problems with the position.  While we all here at Maggie's probably feel this is old news, Professor Don Boudreaux at Cafe Hayek has attacked the issue from the Progressive perspective, showing just how wrong the concept is based on Progressivism's own internal contradictions.

The beginning premise, that a company owner or entrepreneur 'doesn't get there on their own, they owe a debt to the public' goes without saying.  Except the premise is flawed because it doesn't properly define its terms.  Any successful businessperson recognizes all the inputs it took to become successful, including (however unnecessary or tangential) government-provided inputs.  Their payment back to society is their very success and the great things they provide to improve life (cellphones, cars, planes, etc.).  No additional payments should be necessary.  Even if Warren and Obama think there should be more, their claims fall flat.

To begin with, nobody says government-provided inputs are absolutely necessary.  Almost all of these were, at one time, privately provided until government took them over.  Yet it is possible to say you were educated privately and never took a dime of taxpayer money or used publicly-provided park land.  Ultimately, the only thing you could potentially limit yourself to, if you were trying to prove Obama and Warren wrong, is using publicly subsidized roads.  Private roads are very successful and better maintained, but few and far between.

Let's just say, from the outset, the claim is and should be (if we were to remove government from most of the affairs it shouldn't be involved in) specious, even in context.

Secondly, if we move to the text of Warren's speech, the internal logic is still flawed.  Even if you make the assumption that I got there with the help of others and/or the government, there is an implicit understanding that I did things, or provided payment and services, in return for that help.  I must have paid some fees, taxes, or bartered something for these benefits I received.  Very few things in life are truly free.  Perhaps these benefits were subsidized, let's call that a 'gift' from the government.  Even so, what then allows the government to make further claims on me once I've become successful?  As Professor Boudreaux points out, Amazon's success is almost entirely reliant on the infrastructure of FedEx.  Even if FedEx provided discounts and subsidies to Amazon early on to help them become successful, out of the goodness of their heart, unless a contract exists that stipulates further remuneration would occur upon this 'success' of Amazon, the relationship is based on a pecuniary exchange for goods and services, not a promise to pay more later.

Warren and Obama's issue with this is, most likely, that the 'social contract' demands this future payment.  Warren more or less demands it, saying that successful people should 'pay it forward'.  But who is she to say this?  Who is anyone?  All successful people 'pay it forward' in a variety of ways.  Their productivity and success helps many people by providing whatever goods they create at a desirable price, providing jobs, spawning other businesses which feed into or spin off of theirs, and we're not even talking about the philanthropy these people may engage in or the taxes they already pay - both corporate and personal.

Obama and Warren would have us believe this just isn't enough.  Maggie's has linked many times to articles which more than prove this assertion incorrect. 

The essential talking point here, of course, ties back to a suddenly popular point.  Inequality.  Thanks to Thomas Piketty's work, people are starting to believe there are actually ways to fix inequality, while believing the cause is capitalism.  Somehow, there is a belief that it's possible to just tax the wealthy even more and expect good things to happen to all of us.

This is a crazy concept.  While driving with my son last night, he told me a story.  A teacher wanted all the students to tell him their ideas for reducing inequality.  My son's turn arrived and replied "Nothing, this is a stupid idea."  The class started yelling at him.  He replied, "you all have these ideas that you can take things from people who earned their income and give it to others and distribute it equally.  But if someone gets their fair share and wastes it, they are suddenly unequal again.  Now what?  You have to constantly calibrate the system to manage the equality and make sure not a single penny is ever wasted, lost or mismanaged.  How is that even possible?  More importantly, why would you even want it?" 

The teacher asked, "Well, how would you deal with your own perceived inequality, then?"

My son replied, "There are only two ways.  One is to work harder and get what you need and want.  The other is to give up and accept that life is unfair and become a crack addict.  With either choice, you shouldn't complain because both choices are yours and up to you."

Apparently this sent the class into an uproar, but I told him I was proud of his response.  If his teacher or classmates didn't see the inherent logic in his point, that's their problem (though it could be ours, too, when they vote to tax us more to fix 'inequality'). 

It remains a truth, as Hayek pointed out, that you can treat all people equally.  But it is something else entirely to try and make them equal.  Warren and Obama are on the wrong side of history but are so convinced of their moral superiority they are incapable of seeing the truth, because the only truth they see is their own power and how they can use it to force people to do what they believe is 'just'.