Economic inequality and the enduring myth of 'easy money'
FRANK MIELE/Daily Inter Lake | Hagadone News Network | UPDATED 13 years, 1 month AGO
Thanks to winter weather and a handful of belatedly plucky mayors around the country, the Occupy Movement has gone into semi-hibernation, but don’t imagine you’ve seen the last of it.
And please don’t be so naive as to think you saw “the first of it” when it was unleashed on the country on Sept. 17 as a supposedly “spontaneous” combustion of anti-capitalist rhetoric and pro-entitlement socialism.
There is absolutely nothing new about class warfare, nor about the inclination of a certain sector of the American public to blame their misfortunes on “income inequality.”
I have no doubt that “income inequality” exists, but how, after all, could it not? Though we are “created equal,” and were all endowed equally with certain “unalienable rights” by our creator, we do not have equal abilities, equal ambitions, or equal luck. That means some people who start with little or nothing accomplish much, and often acquire much, and that some other people who start with a silver spoon in their mouth end up with a tarnished reputation and sink like a lead balloon.
Instead of bewailing the fact of unequal outcomes, however, we should really be celebrating it. This is not just the American way; it is the inevitable result of natural law when mankind is allowed to flourish with freedom instead of endure under the yoke of government mandate.
And yes, unfettered capitalism — the bane of the “Occupy” crowd — is the proof of that. It rewards effort and risk, and allows all of us a chance to excel, though few of us do. The question is why wouldn’t we cheer on the successes of those who make it to the top of our economy just as we cheer on those who prevail in other endeavors?
Remember, there can only be one best student in a class of 100, one best team after the Super Bowl, one winner of the National Spelling Bee, and so too there can only be 1 percent of people who wind up in the top 1 percent of income. And unless you are a socialist, there is no need to fret about that. Income inequality is what makes capitalism possible, and make no mistake, capitalism is the engine that made America great.
Think about it. If all the money were distributed equally between all the people, then it would be impossible for mankind to engage in any enterprise without government management. No one individual would have enough money to open a factory, a farm, a quarry, or even an outhouse, nor would any two individuals be allowed to band together to better themselves as that would leave the poor singletons at a distinct disadvantage.
Yep, it would be government for all, and all for government — and therein lies the rub, for in that endless empowerment of government what mischief may come, must give us pause. All government management is, after all, by definition “government mis-management.” It is also ipso facto a diminishment of each individual’s liberties, and thus can only be rightly applied with “the consent of the governed,” as Thomas Jefferson worded it in the Declaration of Independence.
But although bigger government is antithetical to the America spirit of liberty, it has been propounded as the solution to income inequality at least since the time of Karl Marx in the mid-19th century. And in the United States, there have been proponents of big government solutions to poverty and social inequality at least since the end of the 19th century.
Indeed, the presidential election of 1896 was fought largely over populist themes trumpeted by Democrat William Jennings Bryan as he sought to push “easy money” into the economy to benefit the little folks. He sought to eliminate the gold standard and replace gold with silver as the guarantor of paper money. Indeed, he claimed that 16 silver-backed dollars could be printed for every one dollar backed by gold, and because of the way the U.S. Treasury operated in those days, this would have meant more money in the hands of farmers and others in the “99 percent.”
Bryan, of course, despite his fiery rhetoric about mankind being crucified “upon a cross of gold,” was not elected president, and the class warfare he represented was more or less submerged for many years until the Great Depression in the 1930s.
Not coincidentally, it should be noted, the late 19th century and early 20th century was a period not just of income inequality, but also of tremendous growth in America. Those two things seem to go together, hand in glove. And just as so much of the wealth at the end of the 20th century was created by men and women who opened the high-tech spigot that has changed our way of life, so too the end of the 19th century was a period of unprecedented wealth for those who brought to fruition such modern indispensables as railroads, electric lights, the automobile, the telephone and the airplane.
If Occupy Wall Street is envious of the top “1 percent,” you would have found an even more seething opposition to the wealthy industrialists at the turn of the previous century. Instead of being known as the filthy rich, they were the “robber barons.” Men such as John. D. Rockefeller, Andrew Carnegie, J.P. Morgan, James Buchanan Duke, Edward Henry Harriman and Cornelius Vanderbilt were enormously wealthy as a result of astute investing, and their lifestyle was far beyond what even kings in a previous era would have expected.
This inevitably led to envy and to demands for “redistribution of wealth” from the rich to the poor, but consider three points before you condemn the wealthy.
First, almost all of these men had reached the top 1 percent from humble beginnings. Carnegie’s first job was in a bobbin factory; he later became a messenger boy. Rockefeller was the son of an elixir salesman who supposedly bragged, “I cheat my boys every chance I get. I want to make ’em sharp.” Harriman started out as an errand boy on Wall Street at the age of 14, and by the age of 22 he was a member of the New York Stock Exchange.
Second point: Consider the benefit of these men to society at large. Rockefeller revolutionized the petroleum industry, without which very little of the remarkable lifestyle of the 20th century would have been possible. Carnegie financed innovations in the steel industry that made the miracle metal cheaper at a time when the nation was being crossed with railroads and dotted with skyscrapers. J.P. Morgan was the genius behind such consummately American institutions as General Electric and U.S. Steel. Think of the jobs, the opportunities, and the advancements that were made possible by the “income inequality” that had given these men a platform upon which to launch their great enterprises.
Nor did these men’s legacy get buried with them in the cemetery. John D. Rockefeller is regarded as the richest man in history, but he also developed modern philanthropy, and his foresight and generosity has funded untold numbers of charitable ventures, including as just one instance the University of Chicago. J.P. Morgan helped establish the Metropolitan Museum of Art, an invaluable resource for the preservation of the world’s culture and art. Cornelius Vanderbilt founded Vanderbilt University, and James Buchanan Duke founded Duke University — two of the greatest institutions of higher education in the world. Andrew Carnegie, of course, devoted much of his fortune to the establishment of libraries, universities and charities across the country, many of which still bear his name.
Thank God for income inequality. If we all worked for the government, the world would be a glum gray prison with no way out. Instead, we all have a chance to enrich ourselves and our world by making the most of ourselves that we can and by refusing to be limited by anyone else’s poverty of imagination.
ARTICLES BY FRANK MIELE/DAILY INTER LAKE
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