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Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
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The Envy and Covetousness of Progressives

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Get a load of this op-ed in yesterday’s New York Times: “Give Up on the Estate Tax” by Ray D. Madoff, a professor at Boston College Law School.

Referring to the estate tax, Madoff writes: “This tax, first enacted in 1916, was never intended to be simply a device for raising revenue. Rather, it was meant to address the phenomenon of a small number of Americans controlling large amounts of the country’s wealth — which was considered a national problem.”

Considered a national problem? By whom?

Why, by progressives, of course — certain Americans in the early part of the 20th century who hated the fact that some people have more when others had less. What guided the progressives was envy and covetousness, which led inevitably to their ideology of using state power to take away money from the rich, with the purported aim of “equalizing wealth” within society by giving it away to the poor.

Of course, the amount to be redistributed was always less than the amount taxed because the selfless federal politicians and bureaucrats performing this important service expected to be paid handsome salaries for doing so.

Madoff quotes Supreme Court Justice Louis Brandeis (one of the early progressives): “We can have concentrated wealth in the hands of a few or we can have democracy, but we can’t have both.”

That has got to be one of the most ludicrous statements ever uttered. Democracy is a political process by which people cast their votes in elections. Even if most of the wealth is concentrated in a small group of people in a society, how does that prevent everyone else from going to the ballot box and casting their ballots?

When the socialists — oh, excuse me, the progressives — imported their statism to the United States, their justification was based on the notion that there is an inherent conflict between rich and poor in a totally free market. The rich not only keep getting richer, said the statists, but their wealth actually ensures that the poor stay poor.

That is one ludicrous notion. Actually, in a genuinely free market system, everyone’s interests harmonize. The rich provide the businesses and industries that hire the poor. The profits they make go into capital. The savings of the workers also go into capital. That capital enables businesses and industries to purchase the tools and equipment that make the workers more productive. More production means higher revenues and profits. That means higher wages for the workers.

That’s the system that once characterized the United States. No income tax. No estate tax. No Social Security tax. No Medicare tax. No welfare programs, including Social Security, Medicare, Medicaid, education grants, community grants, bailouts, foreign aid, public housing, food stamps, farm subsidies, etcetera. That was the key to wealth, especially for those at the bottom of the economic ladder. It’s not a coincidence that the poor were flooding American shores every day, leaving the lands of statism to come to the land of free markets and unlimited accumulation of wealth.

Does everyone get wealthy in a genuinely free market? Of course not. Some businesses go out of business. Some people make bad investments. That’s the nature of life. What matters, as far as individual liberty is concerned, is: (1) that everyone have the right to become wealthy by engaging in free enterprise (that is, free of government control) and accumulating unlimited amounts of wealth in the process; and (2) a free market raises the overall standard of living for people living in that society.

The problem is that once the progressives realized that there were people getting rich, including people who had been poor before they became rich, that drove the progressives batty. The great sins of envy and covetousness took control over their minds. Their obsession became to convert America’s system to a welfare state, one by which they could use the state to “equalize” wealth.

By the way, the same mindset characterized the leaders of Cuba, North Korea, the Soviet Union, and China. They simply carried out the equalization principle to its logical conclusion — take everything from the rich and keep it for “society” or give it to the poor. That’s why people in those countries have lived most of their lives in extreme poverty. The only reason that China is prospering today is that the government has let up on the economic controls.

In the late 1800s, the battle was on here in the United States — between the economic libertarians and the progressives. Ultimately, the progressives prevailed, including in the U.S. Supreme Court. The 1937 case of West Coast Hotel v. Parrish established, once and for all, that the Supreme Court would never again declare any socialist law in violation of the Constitution.

Why is the United States besieged by economic crises today? The same reason it’s besieged by foreign-policy crises: Because Americans, following the siren song of the progressives and, for that matter, the interventionists, abandoned the principles of liberty, free markets, and a constitutional republic with their embrace of socialism, interventionism, and military empire. What better time to reverse the statist victory than now?

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.