Traditional peasant societies believe in only a limited amount of good. The more your neighbor earns, the less someone else gets. Profits are seen as a sort of theft; they must be either hidden or redistributed. Envy, rather than admiration of success, reigns.
In contrast, Western civilization began with a very different, ancient Greek idea of an autonomous citizen, not an indentured serf or subsistence peasant. The small, independent landowner — if he was left to his own talents, and if his success was protected by, and from, government — would create new sources of wealth for everyone. The resulting greater bounty for the poor soon trumped their old jealousy of the better-off.
Citizens of ancient Greece and Italy soon proved more prosperous and free than either the tribal folk to the north and west or the imperial subjects to the south and east. The success of later Western civilization in general, and America in particular, is a testament to this legacy of the freedom of the individual in the widest political and economic sense.
We seem to be forgetting that lately — though Mao Zedong’s redistributive failures in China, or present-day bankrupt Greece, should warn us about what happens when government tries to enforce an equality of result rather than equality of opportunity.
Even after the failure of statism at the end of the Cold War, the disasters of socialism in Venezuela and Cuba, and the recent financial meltdowns in the European Union, America is returning to a peasant mentality of a limited good that redistributes wealth rather than creates it. Candidate Obama’s “spread the wealth” slip to Joe the Plumber simply was upgraded to President Obama’s “I do think at a certain point you’ve made enough money.”
The more his administration castigates insurers, businesses, and doctors; raises taxes on the upper income brackets; and imposes additional regulations, the more those who create wealth are deciding to sit out, neither hiring nor lending. The result is that traditional self-interested profit-makers are locking up trillions of dollars in unspent cash rather than using it to take risks, since they will likely either lose money due to new red tape or see much of their profit confiscated through higher taxes.
No wonder that in such a climate of fear and suspicion, unemployment remains near 10 percent. Deficits chronically exceed $1 trillion per annum. And now the poverty rate has hit a historic high. We are all getting poorer in hopes that a few won’t get richer.
The public is seldom told that 1 percent of taxpayers already pay 40 percent of the income taxes collected, while 40 percent of income earners are exempt from federal income tax — or that present entitlements like Medicare and Social Security are financially unsustainable. Instead, they hear more often that those who manage to make above $250,000 per year have obligations to the rest of us to give back about 60 percent of what they earn in higher health-care and income taxes — together with payroll and rising state income taxes, and along with increased capital-gains and inheritance taxes.
That limited-good mindset expects that businesses will agree that they now make enough money and so have no need to pursue any more profits at the expense of others. Therefore, they will gladly still hire the unemployed and buy new equipment — as they pay higher health-care or income taxes to a government that knows far better how to redistribute their income to the more needy or deserving.
This peasant approach to commerce also assumes that businesses either cannot understand administration signals or can do nothing about them. So who cares that in the Chrysler bankruptcy settlement, the government quite arbitrarily put the unions in front of the legally entitled lenders?
Health insurers should not mind that Health and Human Services secretary Kathleen Sebelius just warned them to keep their profits down and their mouths shut — or face exclusion from health-care markets.
I suppose that no corporation should worry that the government arbitrarily announced — without benefit of a law or court ruling — that it wanted BP to put up $20 billion in cleanup costs for the Gulf spill.
What optimistic Americans used to call a rising tide that lifts all boats is now once again derided as trickle-down economics. In other words, a newly peasant-minded America is willing to become collectively poorer so that some will not become wealthier.
The present economy suggests that it is surely getting its wish.
— Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and the author, most recently, of The Father of Us All: War and History, Ancient and Modern. © 2010 Tribune Media Services, Inc.