Thursday, October 23, 2008

Robin Hood Economics, The Moral Dimension

There's a type of evil that has no name. It's clearly represented by a recent statement by Congressman Barney Frank (D-MA, wouldn't you know):
I think at this point, there needs to be a focus on an immediate increase in spending and I think this is a time when deficit fear has to take a second seat. I do think this is a time for a kind of very important dose of Keynesianism. I believe later on there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money.
At a period in our history when government spending has nearly doubled in just over 10 years (from $1.6T in '96 to a projected $3.1T for 2009), and thereby severely hindered the economy, this is beyond stupid. It's evil. No educated adult — and Frank is a Harvard law grad so whatever else he may be, he is no dummy — can innocently make an error of this enormity.

Huge Federal Government spending is a major evil for a half dozen reasons.
  • All the money taken by taxes is taken by force, an evil large enough to damn the practice from the outset. Raising the money through inflation is worse, since it amounts to fraud.

  • Spending encourages Federal debt, which burdens future taxpayers with unasked-for programs and also has to be repaid with interest, adding further to the burden. That borrowing distorts market interest rates, making it more difficult for productive enterprises to fund operations and advances.

  • Over 40% goes to Social Security and Medicare, two major Robin Hood programs that rob from the rich to give to the 'poor'. Here the term poor is used loosely, since SS in particular steals from everyone up to a point (which rises often) and gives back a portion on retirement (at least until it goes bankrupt 40 years from now). But the original intent has been retained and is one of the prime reasons that reducing or altering it has always been a third rail of politics. No one dares say that there should be no retirement 'safety net' provided by the government.

  • Government spending also funds a thousand other evil programs, enabling the innumerable harms done by the EPA, the Department of Education, et al.
But the worst aspect of all that taxing — and the aspect most clearly brought out by Frank's statement — goes beyond the immediate harm it does to the general economy. It is that such actions are a deliberate attempt to cripple the rich in order to cripple them.

Frank and his ilk use 'the poor' and other politically useful demographic groups to get away with their schemes. But the programs they spend the money on — when they aren't mere sops to ease their conscience — are a way of punishing those who made a lot of money. On the most generous interpretation, one could say he was indifferent to the injustice done to the productive who supply the money — the top 1% pay 60% of the taxes — which might even be worse.

Unlike many defenders of capitalism, I have no romanticized view of rich people in general. Not those in the real world outside literature, at any rate.

Some of them deserve every penny they made and then some. Men like Henry Clay Frick (early president of Carnegie Steel), Henry Ford, and Robert Noyce (founder of Intel, inventor of the integrated circuit) revolutionized entire industries. They also, by most accounts, were men not only of great vision, courage, and independent thought, but stellar human beings in general. They could never be properly repaid for all the good they've done for the rest of us.

Others, too many others, are not the sort of people you would want over to dinner. They represent a significant reason that creeps like Frank can get away with their bash-the-rich rhetoric. When the average person sees, time after time, up close and personal, how big an asshole is the 'rich guy' from the VP of the department on up, it leaves an impression.

But, decent or jerk, so long as they make their money through voluntary exchange with others and commit no fraud, they have a right to every penny. The government has a right to none.

The desire to rob these men — not merely to coercively fund one inefficiently run Federal charity after another, but to bring them down because they rose — this is the evil with no name.

Philosophically, it's a species of egalitarianism. But that evil creed is broader and this is more specific. Advocates of egalitarianism decry any difference in intelligence, ability, wealth, or any other aspect that creates a hierarchy with some on a higher step than others.

The closest description was probably given by Rand when she declared it "the hatred of the good for being good." But that, too, is a little too broad. It applies to all manner of despising, envying, or otherwise being disturbed by a person of virtue, simply in virtue of his being virtuous.

(Yes, it's often difficult for decent individuals to imagine that such people exist. It strikes them as an exaggeration at best. But, being objective, one can't escape seeing that there are many such people, certainly far too many in politics.)

Here, the emphasis of the evil-doers is on removing any financial superiority from anyone possessing it, on the grounds that no one has a right to be rich when others are not, regardless of how they got that way. In all likelihood, vermin like Barney Frank also resent individuals with profound intelligence, stellar engineering creativity, or dozens more forms of superior ability. But asserting that would be going beyond the present evidence and I could never take enough interest in a loathsome politician to verify the bet.

So, this particular form of evil may have to go without a name until someone comes up with something more accurate. In the meantime, it pays to be on the lookout for it, and to shun anyone who exhibits it. Would that the voters of Massachusetts had been so particular the past 30 years. We'll soon see whether the voters this November 4th will make the same mistake vis-à-vis his brother in spirit, Mr. Barack "Spread the Wealth" Obama.


J said...

Hi ! Just saying I really appreciate this blog. Keep shaving the leviathan, until the skin comes off !

Jeff Perren said...


Thank you. That means a lot, sincerely, especially from someone whom (I presume) I don't know.

I'd like to think, though, that I'm not just Shaving Leviathan (my complaint is that there is too much of that) but slashing away at diseased muscle right down to the bone. Delusions of grandeur, perhaps, but "a man's reach should exceed his grasp, or what's a heaven for?"

Thanks for reading.