Special Report

The Immorality of Progressive Economics

It’s wrong of Republicans not to make that case.

By 3.21.14

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Most of today’s discussions about “income inequality” focus on the economic and political impacts of Democratic tax and labor policies such as more sharply “progressive” income tax rates, raising the minimum wage, or increasing eligibility for overtime pay.

On the left, Paul Krugman, President Obama, media economorons (such as MSNBC’s Mika Brzezinski, poster-child for economic illiteracy), labor leaders, leftist think-tanks, and Democrats everywhere argue that redistributing income is either good for the economy or good for their political prospects or both.

Every once in a while, an honest leftist — which does not mean a correct one — makes an ethical argument such as Senator Elizabeth Warren’s (D-MA) comments (regarding Social Security, but she uses similar language to discuss most economic policy) that “this is a conversation about our values. It is a conversation about who we are as a country and who we are as a people.”

Putting aside Warren’s hyperbole that Republican tax policy is analogous to “deciding who among our most vulnerable will be left to starve,” at least she attempts to make a moral argument. (She’s roughly parroting the words of the single most reprehensible member of the House of Representatives, Alan Grayson (D-FL), who said in 2009 that the Republican health care plan was “if you get sick, die quickly.”)

Before proceeding, I offer one immediate concession: In a country which since at least FDR has been more interested in claimed good intentions and “fairness” than in positive outcomes, which for the last generation has seen politicians of both parties unabashedly unafraid to bankrupt the nation’s future in order to buy votes today, and which for the last half-dozen years has seen American voters, especially our young adults, taken in by a snake oil salesman of no accomplishment who nevertheless rose to become president and proceed to demonstrate why he had never accomplished anything else of note, it is not easy to sell moral arguments, especially regarding economic policy.

Even the best moral argument must be combined with practical, even selfish, discussion of why “liberal” economics cause bad things to happen to real people. In short: beyond morality, supporters of low taxes and minimal government interference into what should be private contracts need also to explain how Democrats keep poor people poor — intentionally, in many cases. But for now I’ll leave those arguments to the many capable economists and scholars on the center-right. (Examples here, here, here, and here.)

Yet even an excellent economic argument is much stronger with a solid moral foundation, particularly one which can be easily explained to self-absorbed Millennials with shorter attention spans than my puppy has.

Part of the reason that people like Elizabeth Warren don’t often win major elections outside of the most truly socialist bastions of American society — the Northeast, parts of California, Illinois (more corrupt than ideological), inner cities, and the People’s Republic of Boulder — is that even if people don’t exactly understand why, “spread the wealth around” arguments create a certain discomfort.

They don’t do this by making Americans think that we live in an unjust society, nor by making us believe in the “you didn’t build that” mentality, but with a nagging suspicion that what the left wants to do is, if you’ll pardon the pun, just not right.

And that gut feeling is correct.

Because if theft is immoral (let’s just say “wrong” since youth today are allergic to conversations about “morality”), then almost every Democratic economic and labor policy proposal is equally wrong.

As Yaron Brook, president of the Ayn Rand Institute, likes to ask: What if a neighbor (with modest income and no real savings) has a sick child who needs $50,000 for surgery, and the neighbor knows that I have cash in my safe at home? Would it be OK for him to rob me at gunpoint, taking my money because it’s to save a child?

Obviously not.

But what if the neighbor takes a vote of the people living on the block and 51% of them say that I have to give him the money? Would it then be acceptable, moral, or anything other than criminal, for the neighbor to come to my house and demand that I hand over the cash?

What if 95 percent of my neighbors say so?

If not, then why is it OK for those very same people to elect a politician to do the very same thing? Is theft more palatable with a middle-man?

If not, then why is it OK for a United States Senator to take my earnings and give them to someone who “needs” the money more than she believes I do, with a similar threat of violence or prison against me if I refuse to comply?

In short, if theft is wrong then why do we elect Democrats?

Because Republicans and conservatives don’t make a compelling moral case when it comes to economics, causing independents and moderates to give less credence to the overall economic message of capitalism and freedom. (Libertarians tend not to make this mistake in messaging; they just make other ones.)

Just because a majority, even a large majority, might vote — out of a combination of ignorance and jealousy and perhaps even good intentions — to “soak the rich” does not make it morally right, even separate from the fact that it cannot possibly succeed as an economic policy.

Most American voters (and far too many federal judges) understand little and care less about the principles and intent of our Founders. Still, a short historical story is in order:

James Madison, author of the Constitution, while serving in Congress in 1794 faced the question of the government spending $15,000 in assistance of Haitian refugees (though it wasn’t called Haiti at the time). The Annals of Congress reported:

Mr. Madison wished to relieve the sufferers, but was afraid of establishing a dangerous precedent, which might hereafter be perverted to the countenance of purposes very different from those of charity. He acknowledged, for his own part, that he could not undertake to lay his finger on that article in the Federal Constitution which granted a right of Congress of expending, on objects of benevolence, the money of their constituents. And if once they broke the line laid down before them, for the direction of their conduct, it was impossible to say to what lengths they might go, or to what extremities this practice might be carried.

While Madison’s presaging of today’s federal government was sadly accurate and while 220-year-old quotes may seem to some as stale and irrelevant, the fundamental point is not a technical one about constitutionally permissible spending but a moral one about the relationship between a government and its people.

Two main points: First, if the government, which is to say a bare majority of senators and a bare majority of congressmen, any one of which might have been elected by a bare majority of his district or state, can spend money on anything they wish, what can’t they do? There is a reason that two Supreme Court Justices (Antonin Scalia and the back-stabbing John Roberts) asked during oral arguments in the primary lawsuit against Obamacare whether the federal government can force people to buy broccoli.

This is a question people understand. And while it may seem trivial, a 2012 poll of this very question found that “87 percent of Americans believe it is unconstitutional for Congress to mandate that you buy broccoli.”

(The intellectual validity of an argument is barely more important than whether an audience will comprehend and remember it. Those who oppose Leviathan government must make arguments that people can understand before we have any chance of getting agreement. Also note my use of “they” when talking about what government does; we need to emphasize that these are decisions made by people, not descended from heaven.)

Second, the government does not have money of its own (putting aside the question of simply printing more money, which does not actually increase the total value of dollars in circulation). What it spends comes from the people, either now or later, either in the form of taxes or devalued currency.

Far too many Americans behave as if government spending is “free money,” as if there is a free lunch if it’s paid for by Uncle Sam. But few things are more effective arguments with younger and slightly liberal voters than “You and your kids are going to pay for all this. They are bankrupting your future, and your children’s future. Isn’t that wrong no matter how they try to justify it?”

Again, this isn’t a technical point; it’s a moral one: It is simply wrong to burden our children and their children with opportunity-destroying debt incurred in pursuit of buying votes, or even of buying “equality” or “free” birth control.

If your parents created debt that was somehow passed down to you, even if it originated with a good intention of theirs (but not one to benefit your family), how would you feel about it, especially when paying off the debt meant you couldn’t buy a house or couldn’t put your own children through college?

It’s not just unfair or rude; it’s wrong. And it is exactly what every “liberal” economic policy is doing to YOUR future and your children’s future.

THIS is the argument that Republicans and conservatives fail to make in a convincing and repeated way. (Repetition is as important as the argument itself because people almost never take to heart a message they hear only a few times.)

Progressive tax rates to fund redistribution are simply the transfer of one person’s property to another, something that in any other circumstance would result in jail time. Similarly, raising the minimum wage and making it easier to qualify for government-mandated overtime pay are little different from a mugger who says that taking your wallet at knifepoint is OK because he’s going to give half of the money to charity. (Unfortunately, business owners are more despised than muggers by today’s Democrats.)

Although it is understandable when conservatives engage in the debate over the economic merits of what Frédéric Bastiat called “legal plunder,” doing so without a more fundamental moral dismantling of the Progressive vision concedes the premises of the discussion to the left, giving it a substantial political advantage and dooming my children and yours to a lifetime of debt, devaluation, and degraded opportunities. And that’s just wrong.

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About the Author
Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver's NewsRadio 850 KOA on Saturday mornings from 6 AM to 9 AM. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.