After reading (or watching) several comments from prominent progressives over the past couple days, I’ve been asking myself if they have any idea where wealth comes from. Notice I didn’t say “money” because, really, anything that can has value and can be traded is wealth though not all of it is money (for instance, you could make furniture and trade what you make for food or a car or what have you). Nancy Pelosi got the ball running with the ridiculous statement that the unemployment benefit program “creates jobs faster than almost any other initiative you can name”. Now, here’s Hillary Clinton musing on where we get economics wrong.
It’s important, too, that we look at how to promote broadly-based prosperity. One of the problems in societies around the world today is that too much of the productivity of the economies are going to too few. Too few people, the political and economic elite, are realizing the vast majority of benefits from economic activity.
Now, those of us who get the origin of wealth understand that prosperity only happens when people own the fruits of their labor. The principle that what you produce belongs to you and you have the absolute right to dispose of it as you wish is the cornerstone of all the wealth and wonders created in America for well over 230 years. If you noodle it through, you can easily figure out why this has so. Economic freedom is the first, and most important freedom we have. From it stems all the others (including the freedom of speech, which runs a very close second).
The reason the economic “elite” get the vast majority of benefits is because they produce the largest amount of the wealth. In other words, the man who works hard and builds a business building furniture, who has countless hours of time invested in that business, will realize a greater benefit from his investment than the man he hires to deliver the furniture to customers. That’s the way it is supposed to be. The business owner is withdrawing from the vast account of effort he has built up over the years. Why shouldn’t he benefit from his efforts more than someone who has not invested as much as he?
For most of our country’s history this has been a guiding principle of taxation and government spending. Legislators remembered that when they took your money, they were taking your time and your labor, and they considered each rise in tax and spending carefully. However, in the last 60 years or so the countervailing belief has taken over the Democratic Party and is taking hold in the Republican party as well. Here is that belief in a nutshell:
What you produce is not yours but rather goes into a vast pool of resources that must be apportioned out evenly by a handful of concerned experts, each of whom is compensated lavishly.
Do you see how egregious this belief really is? Do you see the eventual end of such a belief (hint: it ends with benign slavery)? Do you see how the well being of everyone in this country is threatened by such a belief?
Wealth does not simply appear from the thin air. It has to be created by human beings who act out of their own self-interest and have the freedom to create as much as they desire. That’s the only way it works. Without that freedom, wealth dries up and we end up like Zimbabwe.
(Cross-posted at The Greenroom)
Category: The Economy and Your Money