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“Social Justice” and the “Two Americas”
Social justice is one of those politically-charged phrases that is seldom, if ever, used honestly by the people who utter it. Used almost entirely by leftist liberals, the term is a euphemism for a variety of schemes all involving the use of force (i.e., some law or governmental program) to redistribute wealth. One of “Mayer’s rules of thumb,” as I tell it to my students, is that whenever anyone talks about “social justice,” you should reach for your wallet or your purse. That’s because, inevitably, what they really mean is socialist injustice – that is, they want to use the coercive power of government to take property from those who produced it and to redistribute it to those whom they claim deserve it, simply because they “need” it. “From each according to his ability, to each according to his needs” – Karl Marx’s explicit slogan in The Communist Manifesto and one of the most evil dogmas human beings have ever invented – is, implicitly (because, as noted above, it’s hardly ever honestly admitted), the goal of all the redistributionist schemes advocated by the self-proclaimed purveyors of “social justice.” Such redistributionist schemes, unfortunately, have been pervasive since the rise of the regulatory/welfare state in the early 20th century. Examples include such well-known and popular government programs or policies as Social Security, Medicare and Medicaid, workers’ compensation and unemployment benefits, protective tariffs and subsidies to all types of businesses (including agriculture), minimum-wage laws, and government-guaranteed student loan programs. They also include “free” public education in government schools – which is, of course, not really “free” but rather funded by taxpayers – as well as all sorts of schemes for “universal” (that is, government-controlled) health care now being proposed by today’s “social doctors.” Such “social justice” schemes are, quite literally, socialist injustice. They’re socialist because they involve government control over capital. (Some political scientists might quibble that, so long as “the means of production” remain in private hands, it’s not truly socialism but still capitalism. But this quibble overlooks the essence of property, which is the right to control that which one owns – the freedom to use it as one wishes, not as some politician or government bureaucrat decrees. A “mixed economy” like that of the United States today is not truly capitalist; it’s socialist to the extent that government controls abridge the freedom of markets.) And such schemes are not in any way “just.” Indeed, they necessarily involve the perversion of justice – the violation of individuals’ rights and the institutionalization of what is, in fact, injustice. To understand why, we need to do understand what justice really means, in a free, capitalist society – the kind of society that the United States of America used to be and which (one may hope) still aspires to be.
Justice in a Capitalist Society
Justice, properly speaking, is a matter of rendering to each person what he or she is due – what he or she deserves. Ayn Rand nicely described the virtue of justice in her novel Atlas Shrugged: “Justice is the recognition of the fact that you cannot fake the character of men as you cannot fake the character of nature, that you must judge all men as conscientiously as you judge inanimate objects, with the same respect for truth, with the same incorruptible vision, by as pure and as rational a process of identification – that every man must be judged for what he is and treated accordingly, that just as you do not pay a higher price for a rusty chunk of scrap than for a piece of shining metal, so you do not value a rotter above a hero.”
Rand added that the greatest perversion of justice – the worst act of “moral bankruptcy” – would be “to punish men for their virtues and to reward them for their vices.” (Rand, Atlas Shrugged (1957), pp. 1019-20.) Philosopher Tara Smith illustrates the meaning of justice by giving some simple examples of injustice: “Consider racial discrimination in hiring (when race is irrelevant to a person’s ability to perform the work in question), or jurors determining a defendant’s guilt by personal biases rather than evidence, testimony, and logic, or favoritism in a teacher’s grading or in a police officer’s ignoring a traffic violation, or framing an innocent person to take the punishment for others’ wrongdoing, or stuffing ballot boxes to fix election results.”
In all these cases, Professor Smith observes, “what distinguishes the victims of injustice is that they are not treated as they deserve”: “The person treated unjustly is not awarded the job he is best qualified for, the evaluation of his case that he is entitled to, the grade or the penalty that his actions have earned, the absence of punishment that his innocence demands, the office that voters have elected him to.”
(Tara Smith, Ayn Rand’s Normative Ethics: The Virtuous Egoist (New York: Cambridge University Press, 2006), p. 136.) What, then, is the meaning of justice with respect to the distribution of wealth in society? The answer, essentially, is the antithesis of the communist maxim, “From each according to his ability, to each according to his needs”: it is, simply, “To each what he has earned.” This principle takes into consideration the realities of human nature and of the production of wealth. Two fundamental facts about reality must be acknowledged. First, wealth – including not only material goods but all things, tangible and intangible, that are of value to human beings (including such things as music, poetry, and art) – must be produced; it does not appear magically but rather must be created by human beings. Milestone events in human economic history – including the invention of money in ancient times, the rise of capitalism (supplanting medieval feudalism) in the early modern period, and, perhaps most importantly, the Industrial Revolution of the 18th and 19th centuries – have made it possible for human beings to increase multifold the amount of wealth they individually produce, by trading their achievements with others. The division of labor (the critically important principle discussed by Adam Smith in his classic work The Wealth of Nations (1776)), investment of capital, and the invention of new technologies, systems, and procedures – all these developments made possible by the rise of capitalism and the Industrial Revolution have made it possible for individuals in free (that is, capitalist) modern societies to create significant amounts of wealth and thus to be not only self-sufficient economically but also to live quite well, if they choose to do so. That last qualifying phrase relates to the second fundamental fact about reality: that human beings, although producers by nature, are first and foremost, by their nature, creatures of free will. Unlike other living organisms – honeybees, for example – human beings have the ability to choose, not only what they produce but also whether or not to produce at all. Their lives and what they make of them are entirely their own, a result of the choices (good or bad) that they make. Individual freedom and responsibility (which are, after all, complementary sides of the same coin, recognizing the inherent individuality of human beings) make both wealth and poverty possible – and, more than that, in fact, inevitable – in human society. Why is freedom so important? As philosopher David Kelley explains, “The primary measure of a good society is the scope it affords achievement – the freedom society allows the able, the ambitious, and the productive to create wealth – value of any kind, from the production of material wealth, to the discovery of scientific knowledge, to the creation of art. It is from such achievements that all benefits flow, both to the creators and to others.”
(Kelley, A Life of One’s Own: Individual Rights and the Welfare State (Washington, D.C.: Cato Institute, 1998), p. 95.) In a free, capitalist society, economically successful individuals earn their own wealth. They earn it, through their own hard labor (mentally as well as physically), their creativity or imagination, their ambition, their prudence, and their wise choices – not only their choice of careers but also, if they run their own businesses, their wise management decisions, their investments and other future plans. In other words, they earn the wealth they produce, according to their own virtues. Great business entrepreneurs – people like John D. Rockefeller or Andrew Carnegie, the industrial giants of a century ago, as well as people like Steve Jobs, Bill Gates, Oprah Winfrey, or J.K. Rowling, the famous entrepreneurs of today – amass great personal fortunes because they create huge amounts of wealth, enriching not only themselves but all who enter into contractual relationships with them, including not only the employees of their business enterprises but also all those from whom they buy or to whom they sell goods or services, and, ultimately, the consumers of their products. (Consider, for example, not only the profits earned from the popular Harry Potter book series by J.K. Rowlings’ publishing companies, both in the U.K. and the United States, plus the book stores that sell them, as well as the profits earned by the movie companies that created the Harry Potter films, and all the companies that are engaged in manufacturing licensed toys and other goods involving the Harry Potter characters – plus all the people employed by these companies, as well as the millions of people who’ve bought these products and have derived hours of enjoyment from them. All this was possible by Ms. Rowlings’ original work of achievement, in creating the Harry Potter stories – one of the most inspiring modern examples of a woman who lifted herself out of poverty, in a spectacular way, by her own virtues.) There are exceptions, unfortunately, in America today – examples of individuals who’ve amassed fortunes not through their own virtues and efforts but through sheer luck (lottery winners, for example) – or through their manipulation of political “connections.” Consider, for example, a businessman who makes his fortune not by exercising the virtues discussed above – in short, not by successful legitimate efforts at competition, offering superior goods or services at better prices than his competitors – but through the “help” given his business by government, in the form of, say, subsidies (direct or indirect, such as protective tariffs, which raise the prices of the goods of his foreign competitors) or legal barriers to entry (such as licensing laws, franchises – or government-granted monopolies, or manipulation of the antitrust laws to punish his competitors for their success. These sort of “successful” individuals are, in a sense, today’s “robber barons” – for like their counterparts in medieval, aristocratic society, they do not earn their wealth in free markets but rather expropriate it from others, through the political power – the coercive power of the law – exercised by their “friends” in government. Ayn Rand called such persons by the apt name, “the aristocracy of pull,” in her novel Altas Shrugged (1957). (An example of one of these “aristocrats,” one of villains in the novel, is her character Orren Boyle, the president of Associated Steel, who Rand describes as having “started out with a hundred thousand dollars of his own and a two-hundred-million-dollar loan from the government”; he headed “an enormous concern which had swallowed many smaller companies” (p. 45). Rather than earning profits for his company by producing steel at competitive prices – in other words, earning profits through free and fair competition – Boyle trades favors with other “pull-peddlars,” such as the villainous James Taggart, who use their influence with Washington bureaucrats to get government to pass laws forcibly restraining their competitors.) “Aristocrats of pull” ought not to exist in a free, capitalist society like the United States of America. They do exist, however, because our society isn’t truly free-market capitalism. It has been the semi-socialistic “mixed economy,” which has arose over the past century or so (as the regulatory power of government over business has expanded, along with the industrialization of America) that makes possible these modern “robber barons.” Historian Burton Folsom, in his book The Myth of the Robber Barons, defends genuine entrepreneurs – the industrial giants mentioned above, such as Rockefeller and Carnegie – from the spurious claim that they’re “robber barons.” (Unfortunately, many historians and other scholars – sharing with popular opinion an unfortunate distrust or even hatred of “big business” – have tended to brand, unfairly, all economically successful people as “robber barons” or “the privileged.”) Folsom divides American businessmen into two categories: "market entrepreneurs,” who earned their fortunes by personal ability, by free trade on a free market, and “political entrepreneurs,” who like Rand’s “aristocrats of pull,” made their fortunes by means of special privileges granted them by the government. (Burton W. Folsom, Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America, 4th ed. (Herndon, Va.: Young America’s Foundation, 2003).) Again, “political entrepreneurs,” or “aristocrats of pull,” ought not to exist in the United States today, for the laws that make them possible violate our constitutional ideals of limited government and equality of rights under law. They are possible because of unjust laws – and, ironically, the same sort of unjust laws that make these pseudo-successful businessmen possible also help trap into poverty millions of other “unprivileged” persons, in today’s “mixed economy.” In a free, capitalist society, not only do economically successful people earn their own wealth, but also (the necessary corollary principle) economically unsuccessful people also earn (or deserve) their own poverty. It’s not “politically correct” to say so today, because many modern “intellectuals” maintain that poverty is not the result of individual failure but is a “social” problem. (Indeed, the change in popular attitudes about poverty – from the prevalent 19th-century view, which saw poverty as the result of individual moral failure, to the prevalent 20th-century view, seeing poverty as a “social problem” – is one of the factors that has made possible the rise of the modern “welfare state,” with its assumption that government programs can help alleviate poverty.) But the reality is that, in a free, capitalist society (despite all the laws that interfere with free markets in today’s “mixed economy”), anyone who is chronically poor, is poor because of his or her own moral failings. (By saying chronically poor, I’m referring to people who are poor for long periods of time, people who are so-called “trapped” in poverty, not to responsible persons who are temporarily in financial straits because they have health problems, or have been victims of crime or natural disasters, or have otherwise been harmed by ill-fortune.) Just as responsible persons produce wealth through their achievements – that is, through their own hard work, their creativity or imagination, their ambition, their prudence, and their wise choices (as discussed above) – so too do irresponsible people earn, or “produce,” in a sense, their own poverty, through their own lack of achievements. People who are chronically poor are in exactly the condition in which they deserve to be, because of their own moral failings – their own laziness, their lack of creativity or imagination, their lack of ambition, their imprudence, and their folly. Many people who are chronically poor try to excuse, or to rationalize, their poverty by whining that they are “victims” of various forms of “social injustice”: for example, women may blame their failures on “sexism” or members of minority racial groups may blame their failures on “racism”; members of certain religious groups may blame their failures on the religious prejudices of others, or on an immoral society, or perhaps even on “God’s wrath”; people with families to support blame the situation – or perhaps their employers, for not paying sufficient wages or providing enough employee benefits, or even society itself, for not caring enough about “the children” – without acknowledging their own personal responsibility for bringing children into the world without the financial ability to properly care for them. The latter group of irresponsible people are perhaps the worst. The late-18th-century English thinker Thomas Malthus, in his famous work An Essay on the Principle of Population (1798), identified as the chief cause of poverty the failure of men and women to abstain from marriage and starting a family until they were in the financial condition to support a family. In other words, he saw everyone as being under a moral obligation not to bring a child into this world until he’s able to support it. “Every man must feel the strongest conviction of such an obligation. If he cannot support his children, they must starve; and if he marry in the face of a fair probability that he shall not be able to support his children, he is guilty of all the evils which he thus brings upon himself, his wife, and his offspring.” Malthus was right. To bring his principle into conformity with the realities of modern society – and to apply it equally to both sexes – the truth of his view is this: Any one, man or woman, who brings a child into this world has the responsibility of caring for the child, which means providing the child with the necessities of life, which today means not only food, clothing, shelter, and health care, but also a decent education (including perhaps a college education). Of course, today – in our free society, including the sexual freedom we have (and ought to have) in society – that doesn’t mean that heterosexuals ought to abstain from sex until marriage and until they’re able to afford children, as Malthus instructed. The wide availability of birth control in modern society means that heterosexual couples can engage in sex for purposes other than procreation (for their own individual pleasure, for example) – but if they do so, they must be willing to bear the costs of the risks they are taking, namely, the risk of failure of whatever form of birth control they use and, with it, the responsibility for caring for the child who’s the biological product of their sexual activity. (Incidentally, the necessity of teaching young people to behave responsibly, if they choose to become sexually active, is the reason why complete sex education courses – not just the ridiculously unrealistic “abstinence only” courses that many conservatives advocate – ought to be part of the curriculum of all schools.) Today, in our modern “welfare state” with all its government “entitlement” programs supplanting the charitable organizations that provided relief for poor families in earlier generations of Americans, most people are loathe to say, as Malthus did, that the children of irresponsible poor persons simply “must starve.” But our modern welfare laws, just like the old English “poor laws” that Malthus was criticizing, do not help the situation – indeed, they make it far worse, depressing even further the condition of poor families – by, in effect, rewarding poor people for their own irresponsible behavior, by paying them more benefits simply because they “need” it, because they compound their irresponsibility by bringing even more children into the world without the resources to care for them themselves. Every time a politician asks for more government “welfare” programs, or increased funding of existing government programs (for example, the so-called “S-CHIP” program, with federal funds being used to pay for state government-administered health insurance for children below the poverty line (the program that Democrats in Congress late last year tried to expand to middle-class families) -- and the politician says it’s “For the children” -- what he or she is really advocating is alleviating irresponsible people from their obligation to pay for the consequences of their bad choices. Justice, in a free, capitalist society, means this: individuals who live their lives responsibly should reap the rewards they’ve earned from the exercise of their virtues (including, first and foremost, their productiveness) and from the wise choices they’ve made; similarly, individuals who live their lives irresponsibly should pay the price for – or, in other words, suffer the consequences of – their immoral behavior and their bad choices. Put even more simply, a just society is one in which everyone is allowed the freedom to live their own lives, which also means a society in which everyone takes responsibility for the consequences resulting from their actions and choices, whether good or bad. As David Kelley observes, “Individuals must bear the responsibility for acting to produce what they need, and the freedoms they need to do so should be protected” under law. Kelley identifies several economic freedoms that are critically important in modern society: · “the freedom to work for employers willing to hire them, on mutually-agreeable terms, without subjection to minimum-wage and other coercive restrictions on employment;” · “the freedom to start a business without licensing and other coercive restrictions on enterprise;” · “the freedom to keep what they’ve earned, without having to pay through the tax system for social insurance and other public `goods’ they do not want”; and · “the freedom to purchase housing, medical care, and other goods from willing suppliers without price controls and other coercive restrictions on commerce.” (Kelley, A Life of One’s Own, p. 89). Unfortunately, each of these freedoms is abridged by misguided laws enacted since the rise of the regulatory/welfare state of the 20th century. Minimum-wage laws and other labor laws prevent young, inexperienced workers from entering the labor market. Licensing laws and a myriad of business regulations prevent entrepreneurs from starting new business enterprises. Income and Social Security taxes prevent people who do work from keeping the wealth they’ve earned and wisely investing it (for their retirement, children’s education, and other future needs). And other “welfare state” programs, including rent control laws, Medicare and Medicaid, have driven up the costs of housing and health care while simultaneously providing a rationale for government price controls that have made it difficult for responsible people to buy in a free market the goods and services they want or need. Ironically, the very sort of “welfare state” government programs that purportedly were designed to help alleviate poverty have trapped poor people into a demoralizing dependence on government, depriving them of the economic freedom they need to take themselves out of poverty. And, simultaneously, the welfare state also has confiscated more and more of the wealth produced by responsible people – interfering with the economic freedom they need to produce wealth not only for themselves but also for the confiscatory taxes government uses to fund these redistributive schemes.
Are the United States Really Divided into “Two Americas”?
Demagogue – oops! I mean, Democrat -- presidential candidate John Edwards has campaigned on the issue of what he calls the “two Americas,” one rich and the other poor. (The “two Americas” theme was central to his 2004 presidential campaign but more subdued in the 2008 campaign, notwithstanding Edwards’ continued attempts to use class-warfare rhetoric to exploit popular envy and resentment against achievement. Even the left-liberal editors at USA Today, in their January 31, 2008 editorial cheering Edwards’ withdrawal from the Democratic primary race, noted that his “divisive message” has fallen flat.) As Gary Jason summarizes Edwards in a recent issue of Liberty magazine, “He is of course an immensely wealthy trial attorney, but he feels for the poor, as he emotionally assures us. His cure is to jack up taxes on `rich’ people, who he even more emotionally assures us aren’t paying their `fair’ share.” (“Class war,” Liberty, September 2007, p. 18.) Jason cites Treasury Department figures for income tax receipts for the year 2004, in showing the fallacy behind Edwards’ notion of “two Americas”: “The figures are surprising. The upper 1% of all income earners earned 19% of all income, but paid 39.6% of all federal income taxes. The upper 5% earned 33.4% of all income, but paid 57.1% of all federal income taxes. The upper 10% paid 70.8% of such taxes. Finally, the top 40% of all income earners paid 99.1% of all federal income taxes.
“That means that the bottom 60% of wage earners – people at $43,000 a year or less – paid essentially none of the income taxes. None of the income taxes the federal government uses for national defense. None of the income taxes the federal government uses for welfare. None of the income taxes the federal government uses for the million other things it so busily does. So 60% of the population has absolutely no financial reason to keep the growth of government in check, much less to reduce it.
“This explains why the promise of tax cuts gets less and less voter support: the majority now pays no taxes, so doesn’t care. And despite the howls of protest from leftists who claim the Bush tax cuts favored the rich, the percentage of federal taxes paid by the rich has gone up under Bush.”
(Incidentally, the figures for 2005 – released jointly by the Congressional Budget Office and the IRS – show substantially the same picture for that year, as well. As the Wall Street Journal reported in a recent editorial (“Taxes and Income,” December 17, 2007), “the richest 1% paid about 39% of all income taxes that year. The richest 5% paid a tad less than 60%, and the richest 10% paid 70%.” As the Journal editors also added, not only are the rich getting richer, but “so of course they’re paying more taxes”: “the share of taxes paid by the top 1% has kept climbing this decade – to 39.4% in 2005, from 37.4% in 2000. The share paid by the top 5% has increased even more rapidly. In other words, despite the tax reductions of 2001 and 2003, the rich saw their share of taxes paid rise at a faster rate than their share of income.”) Gary Jason also notes the “huge split among the citizenry,” with regard to who benefits from government. He cites a recent Christian Science Monitor report in which economist Gary Shilling estimates that 52.6% of Americans now derive a substantial portion of their income from the government: “Shilling’s estimate breaks down as follows: about 20% work directly for government or for companies tied to it; another 20% or so receive Social Security or a government pension; and the remaining 13% or so are receiving education grants, subsidized housing, food stamps, or all of the above. (Note that I haven’t even mentioned Medicare, Medicaid, or the Earned Income Tax Credit.) Back in 1950 the figure that is now 52.6% was only 28.3%. By 2040 it will be 60% -- a substantial majority living off government.”
Jason concludes, “So yes, Mr. Edwards, there are two Americas: the tax payers and the tax takers. The first America is the `upper’ 40% of wage earners, who pay all the income taxes. The other America is the majority of Americans, who now live off the first. The second America is growing rapidly, and will grow even more rapidly if Mr. Edwards gets his new spending programs enacted.” (Now that Edwards is out of the presidential race, one can instead say, “if the Democrats get their new spending programs enacted,” because both Mrs. Clinton and Mr. Obama are advocating expansions of government that differ only in minor details from the kind of schemes Mr. Edwards has advocated.) Like Mr. Jason, I agree that there are “two Americas” in the United States today, but that they are not the two identified by class-warfare politicians like John Edwards (whose demagoguery, not surprisingly, is designed to appeal to the masses, that is, to the majority of Americans who benefit from the wealth government confiscates from the minority who’ve produced it). Jason is right in identifying the essential division as not between “the rich” and “the poor,” but rather “the tax payers” and “the tax takers.” If anything, his analysis underplays the real injustice behind the modern American regulatory/welfare state, by focusing only on federal taxation and spending programs. The real “two Americas” today – the real division that exists between the peoples of the United States -- can be best identified as “the producers” versus “the looters.” The producers are those whose work creates wealth, as described in the previous section. The “looters” (to use the apt term employed by Ayn Rand in her novel Atlas Shrugged) are those who do not produce wealth, the chronically poor persons described in the previous section, who then attempt to use political power – the coercive power of government – to expropriate the wealth that has been produced by others. Another way of thinking of these two classes of people is that the producers are also the responsible individuals and the looters are the irresponsible individuals: the former are the people who use their freedom responsibly, by making wise choices (and hence, the people who are morally good, self-sufficient individuals), who’ve earned what they have; the latter are the people who act irresponsibly, who make bad choices, but who then demand that government use its power to redistribute to them wealth they have not earned. Producers, or responsible individuals, ask only that government allow them to keep what they’ve earned – in short, they ask only that government do what it is supposed to do, to protect their rights (including their economic freedoms, discussed above). With regard to their fellow citizens, they ask only the freedom to trade their achievements, by voluntary agreements entered into with other responsible individuals, for their mutual benefit. They “mind their own business”; they neither seek nor desire to be responsible for others (unless they’re family or friends for whom they willingly take responsibility). On the other hand, looters attempt to evade the consequences of their own irresponsibility. They ask that government violate the rights of their fellow citizens – rights that government ought to protect – by limiting their freedom and expropriating the wealth that others have produced, and redistributing it to them solely because of their “need.” They demand that government force the virtuous and able individuals to sacrifice a portion of the wealth they’ve earned, through their own productive achievements, in order to compensate for their own moral failings. They abdicate responsibility over their own lives, demanding instead that the “nanny state” give them “security,” by forcing the producers, the self-responsible individuals in society, to take care of everyone, both the responsible and irresponsible. Looters, in short, demand to be made legally privileged: they demand that the coercive power of government be used to help them evade the consequences of their own irresponsibility and moral failings, to help them evade the reality of life that wealth is something that must be produced by someone. Actually, the looters themselves fall into two classes, or types: first, the parasites, those irresponsible persons who demand that the able, productive persons sacrifice a part of the wealth they’re earned in order to pay for the parasites’ own “needs,” which is to say, the consequences of their irresponsibility; and second, the politicians – both “Demopublicans” and “Replicrats” (for, unfortunately, welfare statists predominate in both major parties today), who advocate the laws and other government programs that make the looting possible. The first type of looters are the recipients of the productive persons’ self-sacrifice that is demanded by the second type of looters. And of the two types, it’s the demanders of sacrifice – the politicians who pander to the worst emotions of people (fear, envy, and resentment – resentment against the achievement of others), in order to obtain the votes of the irresponsible mass of people in America today – who are by far the more evil. Recall Ayn Rand’s comment, quoted above, that the greatest perversion of justice – the worst act of “moral bankruptcy” – would be “to punish men for their virtues and to reward them for their vices.” Isn’t that precisely what the U.S. tax code and “welfare state” policies do today, all in the name of “social justice”?
| Link to this Entry | Posted Thursday, January 31, 2008 | Copyright © David N. Mayer |
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