Bully for Bush. The president has achieved another milestone in his mission to bridge the philosophical gap between conservatism and left-liberalism. “The Decider” recently endorsed the socialist concept of a wealth gap, and promised to do his level best to level the playing field through the familiar distribution schemes: “helping people afford health insurance and providing more money for education, including increased Pell grants for college,” to quote the Wall Street Journal.
Some people are richer than others. Others don’t like it. It’s called envy. Aggregate individual differences in the ability to accrue wealth are not the best measure of the country’s economic well-being. The demand to reduce these differences, or soak the rich, is, however, a good measure of envy. Substitute wealth with another individual difference: beauty, for example. Is it fair that some are more beautiful than others? Since it’s impossible to lay claim to their physical assets, perhaps government ought to compel the beautiful to subsidize plastic surgery for the congenitally ugly?
A more meaningful measure of economic health is the ability to afford basic necessities: food, housing, clothing, hygiene, health care, telephone and transportation, to use the Fraser Institute’s gauge. More crucially, the freer a society, the less likely government is to placate the envious by taking from those they envy. In unfree societies, that’s precisely what governments do: pacify the multitudes by mulcting the few.
Since he has already adopted the language of “class struggle” and inequality under the law, Bush is unlikely to point out anytime soon that the much-maligned rich also pay most of the nation’s taxes. Before he utters one of those unthinking commonplaces about the rich earning most of “the nation’s income”—”the top percent of households claiming 50.4 percent of all the income,” to quote the WSJ again—let me offer another correction for defecting conservatives like the president. There is no such thing as the “nation’s income”—a preexisting income pie from which the greedy appropriate an unfair share is a pie-in-the-sky.
Wealth doesn’t exist outside the individuals who create it; it is a return for desirable services and resources they render to others. Labor productivity is the main determinant of wages. The Marxist-Leninist zero-sum analysis, whereby wealth is seen as having been attained at someone’s expense—that’s false. False and dangerous. This envy based notion has propelled the persecution of “ethnic minorities …which have achieved prosperity from poverty—Jews in Europe, Levantines and Indians in Africa, Chinese in south-east Asia,” in the words of the late economist P.T. Bauer.
Government job creation schemes are predicated on government taxing, borrowing or inflating the money supply—activities that reduce capital available to the private sector. Such programs are politically popular because they are visible. However, for every job “created” by government, an unidentifiable job will be destroyed in the private sector. Fox News, keen to hype good-news stories from Iraq, may broadcast images of earnest Iraqi men and women put to work by Nuri Kamal al-Maliki (read the American taxpayer). Invisible will be those thrown out of work (in the US and Iraq) because private economic activity has been crowded out by government borrowing or expanding the money supply to finance these job programs. And because of bombs.
Creating sustainable, long-lasting employment lies in producing goods or services for which there is a legitimate consumer demand. A rise in consumer demand for a product, reflected in relatively higher prices, galvanizes business to hire more workers and produce more of the commodity. Hence jobs in the private sector are real jobs because they are sustained by consumer preferences. Unsustainable government make-work schemes merely usurp the wishes and needs of consumers, and substitute them with the fancies of bureaucrats, beholden to their political masters.
Sustainable jobs in Iraq can only be created by the private sector. For that, ordinary Iraqis require peace and the rule of law. The preconditions for prosperity in Iraq remain remote due to the chaos and carnage of a civil war conceived by Bush’s most ambitious central plan to date.