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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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Thou Shalt Not Covet

by

American statists are now claiming that Americas economic woes are rooted in income inequality. They’re suggesting that the reason people are struggling economically is because there are millionaires and billionaires in American society. If only the government would take more money from the rich and redistribute it to the poor, the statists say, everyone would be living comfortably, happily, and harmoniously.

Really? Well, then how do they explain Cuba? Prior to Fidel Castro’s taking power in 1959, there was a large number of millionaire and middle-class Cubans in the country. Castro took power, and being of a socialist mindset, he proceeded to confiscate the businesses, industries, and homes of the rich and redistribute them to the poor or simply had the government own and operate the businesses on behalf of the people.

After several years of socialism, Castro achieved income equality among the Cuban citizenry. Everyone was now equal. The problem was (and is) that everyone was also desperately poor, verging on starvation.

The problem is that all too many liberals are so consumed with envy and covetousness that they’re happier when there is income equality than when there is income inequality, even when it means that everyone, including those at the bottom of the economic ladder, are worse off than they would otherwise be.

Consider the following hypothetical. Suppose we have a society in which people are free to engage in any economic enterprise without government interference or regulation, in which people are free to accumulate unlimited amounts of wealth, and in which people are free to do what they want with their own money.

Suppose that society produces the following levels of annual income: The top 5 percent receive $10,000,000. The middle 90 percent receive $100,000. The bottom 5 percent receive $20,000.

Now, lets say that statists gain control over the levers of power (as they did in Cuba), and impose a socialist system, one in which the government proceeds to equalize income by taking from the rich and either giving to the poor or running businesses and industries on behalf of the people.

Suppose that socialist society produces the following level of annual income: 100 percent receive $5,000.

Given a choice, many American liberals would choose the second scenario. They would be ecstatic that there were no longer any more rich people in society. Even though the people they purport to love the poor are worse off under socialism, that would be of secondary importance to such liberals. What would matter to them is that there are no longer enormously wealthy people in society.

That’s what envy and covetousness do to people and to societies. Such traits eat away at peoples souls, like an acid. Envy and covetousness ultimately cause people to start thinking of stealing from those who have more, either personally or through government programs.

That’s not to suggest, of course, that Cuba had anything akin to a free-market society prior to Castro’s taking power. Cuba under U.S.-approved strongman Fulgencio Batista was similar to the economic systems that have long characterized Latin America a combination of socialism, fascism, mercantilism, and crony capitalism that nonetheless permitted honest and industrious businessmen and entrepreneurs (along with crony capitalists) to succeed and prosper in the marketplace.

Its also not to suggest that the U.S. embargo hasn’t played an important role in squeezing the lifeblood out of the Cuban people. But even without the embargo, there is no doubt that Castro’s socialist system has impoverished the Cuban people.

Whats the solution to income inequality? Forget about it. Instead, focus on the real causes of Americas economic woes.

That entails, first of all, a recognition that our nations economic woes are rooted not in economic inequality but rather in the type of economic system that America has embraced in modern times one that consists of a combination of socialist programs, government planning, government-business partnerships, crony capitalism (including Wall Street bailouts), monetary central planning (the Federal Reserve), and a vast warfare empire (including invasions and occupations).

Then, second, a recognition that the solution to Americans economic woes entails a total separation of economy and the state and a restoration of limited-government, constitutional republic to our land. That is, a society based on the principles of economic liberty: no more income tax, no more regulation, no more central planning, no more socialist programs, no more government-business partnerships, no more military empire a society in which people are free to engage in any enterprise free of government interference or regulation (i.e., free enterprise), to accumulate unlimited amounts of wealth, to travel and trade with people anywhere in the world, and to decide for themselves what to do with their own money.

Contrary to what statists claim, there is a natural harmony that exists between the rich, the middle class, and the poor in an economic system based on the principles of economic liberty. The rich and the middle class (and oftentimes the poor) build the businesses and industries that employ the middle class and the poor. The rich and the middle class also provide the savings and capital that raises productivity, real wage rates, and rising standard of living, especially for those at the bottom of the economic ladder. And the rich oftentimes bring into existence the consumer luxuries that become standard items for the middle class and the poor in the future.

All this is to say that God has created a consistent universe. The solution to Americas economic problems lies not in envy, covetousness, and political stealing. Those things will only make everyone worse off. The solution to Americas economic woes lies in the full embrace of the God-given right of economic liberty, a way of life that not only keeps everyone free but also makes everyone better off.

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.