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Thursday, May 26, 2005

The Fairness of Government Intervention

The most efficient way to eliminate the income gap between the highest and lowest earners is to put everybody in prison, where everybody has exactly the same clothing, food, and shelter, and everybody has a guaranteed job.

David Wessel, one of the Wall Street Journal’s writers contending for the title of house socialist, has another installment in the series lamenting the lack of equality of incomes in the United States.  If you are a subscriber to the Journal Online, you can get it here.

In today’s column, “How Parents, Genes and Success Intersect,” he wonders whether the government shouldn’t intervene to diminish the advantages conferred upon some people by their genetic inheritance and their family upbringing.  Intervention, planned by intellectuals and implemented by bureaucrats, is what characterizes collectivized, socialistic societies.

Since socialism has always produced tyranny or a lagging economy, the real question is why are we even considering collectivist intervention to compel income equality?  In the words of a popular song of some years ago, “When will they ever learn?”

Socialistic intervention taken to its logical conclusion gives us the totalitarianism of the Soviet Union and National Socialist Germany.

When socialism is milder, what American liberals call liberal democracy and Europeans call social democracy, we get a Western Europe, dead in the economic water. See Latest Report: Tune in for Socialism in Action on Home Court.

Mr. Wessel repeats analysts’ conclusion that American youth will have a better chance to get ahead in Europe than here.  He doesn’t present the specific numbers leading to that conclusion, but my suspicion is that the numbers show something different. 

It’s because Western Europe’s socialist governments exact so heavy a tax toll on their highest earners that the range from top to bottom on the income scale is very narrow.  The same sort of “analysis” would conclude that it’s better to be a baseball player in the minor leagues, because the gap in playing ability between amateurs and minor leaguers is less than between amateurs and major league players.

Under a regime of extensive government intervention to equalize incomes, everybody has an equal chance at stagnation. The most consistent result of socialist collectivism, whether under totalitarianism or liberal democracy, is that everybody becomes equally poor, and poorer each year compared to non-collectivized countries.

Germany’s unemployment is higher than during the Depression, and economic growth is only a fraction of our economy’s growth rate.  France has attempted to even out incomes by making it illegal for people to work more than 35 hours a week. 

Sweden, that poster-child of benevolent socialism, is falling behind the productivity growth rate of the United States at an increasing rate each year.  The reason is fairly obvious.  To equalize incomes with its cradle-to-grave welfare system, Sweden has enacted some of the highest income tax rates in the world.  More than 50 percent of the entire Gross Domestic Product is collected as taxes by the government, a figure 43 percent higher than in the welfare-state economy of the United States. 

If Mr. Wessel and his fellow travelers on the New York Times are truly serious about income equality, why don’t they advocate the ancient Spartan system?  To eliminate differences in ability conferred by nature, any child who exhibited physical shortcomings was killed by the state.  All children were taken from their parents at about age five and educated collectively.  Males were trained to be warriors, and Spartan women were said to be so fierce that they would kill any male who showed cowardice in battle.  Battle plunder was shared more or less equally.  And, of course, they all ate the same meals in communal halls.  Needless to say, there was no problem with an income gap.

Why should it be a matter of concern to the political state if the very top levels of workers in a highly technological society earn more than others?  Especially when income levels for everyone are rising decade upon decade?  When even people on welfare have more luxury goods than the average worker in Western Europe?

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Posted by Thomas E. Brewton on 05/26 at 09:46 PM
Economics • (0) Comments
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