There is nobody in this country who got rich on his own — nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.
So quoth Elizabeth Warren, attorney, Harvard professor of law, US Senate candidate, communist, and erstwhile Methodist Sunday School teacher, recently appointed Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau.
Ari Armstrong at PajamaMedia argues cogently against her assertions:
To hear Massachusetts Senate candidate Elizabeth Warren tell it, successful business owners get rich off the efforts of taxpayers and contribute nothing in return until they pay a hefty tax bill themselves. Warren gets the story exactly backwards.
Productive business leaders create the wealth that enables us to thrive, seek employment, and on the side pay for governmental services. Such producers typically work long hours, often for years with little pay, risking their own time and money to bring their vision to life. They turn metals, gases, plants, and other natural resources into valuable commodities, and they direct others’ labor to more prosperous ends, expanding our quality of life.
Some say business leaders should “give something back.” But those operating on a free market never took anything from anybody, except in voluntary and mutually beneficial trade. Instead, they produce the goods and services — the computers and cell phones, the health care, the books and movies, the automobiles, the plumbing pipes — than enrich and extend our lives. …
Great producers deserve our gratitude and respect, not the ugly, envious sneers so often directed at them by today’s political left. Above all these business leaders deserve a government that protects their rights, including their right to produce wealth and use the resulting profits as they judge best.
Warren invokes the “social contract,” but if that means anything sensible it is to protect individuals from the violence, fraud, and plunder of others. In seeking to peacefully pursue our own lives and interact with others on a voluntary basis, we agree to respect the equal rights of others. We institute government to protect those rights for everyone.
Warren argues that business owners use the roads and education system, the “police forces and fire forces that the rest of us paid for.” Warren ignores the fact that the most productive already pay the lion’s share of the tax burden. … The 10 percent of households with the highest incomes pay more than half of all federal taxes. They pay more than 70 percent of federal income taxes … The wealthy also pay more in state and local income, sales, and property taxes (where applicable). In other words, the wealthy pay for most of the governmental services that others use.
Business leaders succeed by intelligently working hard to provide the things their customers want. They succeed despite the onerous taxes and controls of government, not because of them.
Notably, the core governmental services that protect people from harm — the military, police, and the courts — constitute a sliver of the budget of federal and state governments. Most political spending goes toward entitlements at the federal level and welfare or union-dominated education at the state level.
Moreover, businesses directly pay for many of the services that Warren mentions. Businesses pay for their road use through gasoline taxes. Any given business faces a miniscule risk of a large fire breaking out, because businesses provide their own sprinkler systems, alarms, and other fire-prevention infrastructure. Private firms hire more security guards than the total number of police officers in the country. Regarding education, not only do many business leaders finance schools and scholarships, but businesses spend large sums training and educating their employees. …
Warren presumes that politicians and bureaucrats in Washington can spend the wealth created by business leaders better than they can manage themselves. … Warren contends “there is nobody in this country who got rich on his own.” In a sense she’s right: people get rich by providing enormously valuable goods and services to others who willingly pay for them. Warren and other politicians should not be able to dictate what “hunk” of the earnings of others they forcibly seize. Any social contract consistent with justice recognizes that legitimate government does not loot “the rich” (or anyone else) but instead protects people’s rights, including their rights to their earnings.
In Pictures of the Socialistic Future, a prophetic novel written by Eugene Richter in 1893* about a state turning socialist and so ruining the people, there is this passage (Chapter XXX):
Socialism … never contemplated giving to each labourer in his special field the full reward of his work in that particular sphere of labour. It promised the nation as a whole the full reward of the labours effected by the whole people. Whatever these mechanics might turn out of their shops and mills, it was quite clear that the things turned out were not the result purely and simply of hand labour. Expensive machines and tools were equally necessary to their production. In a no less degree were large buildings and considerable means indispensable. All these accessories had not been produced by the workmen actually engaged at the time being. Seeing then that the Community finds all these buildings, plans, and means, it was assuredly only just that the Community should appropriate whatever remained after paying a certain wage calculated at one uniform rate for all persons in the country.
In the story, the hungry, angry mechanics refuse to swallow this absurd argument, and they rise in rebellion against the socialist state that has brought the country to poverty and despair.
The novel was written more than twenty years before any country in Europe tried the experiment of socialism/communism. If the Russian, German, and Hungarian revolutionary leaders, the communist ideologues who brought disaster on their nations with their long-lived or short-lived revolutions after the First World War, had read it, might they have hesitated to do what they did?
It is interesting to play the game of “what if?” with history, because in human affairs nothing – to contradict Karl Marx – is inevitable.
* To be found at the website of our reader and commenter Don L, to whom thanks for bringing the book to our attention.