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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

President Obama says that people are poor because others are rich. What a crock that is. It’s nothing more than a refusal to accept personal responsibility for the failure of the welfare-warfare way of life and the managed-economy way of life that that statists have foisted upon our nation.

What’s even a bigger crock is Obama’s solution for making the poor better off. He says that if the government seizes more money from the wealthy, that will improve the lot of the poor.

Oh? And how is that?

Let’s assume that someone is worth $10 million and that there are thousands of people in society who are worth $1,000. The government decides to seize $3 million from the rich person. Okay, so the government now has $3 million more dollars in its coffers and the rich person is now worth $7 million.

How does that help those poor people except to satisfy their sense of envy and covetousness? So what if those poor people are celebrating that the rich person isn’t as rich as he was before. What does that do for them?

Let’s take it a step further and say that the government distributes the $3 million to all those poor people in equal shares. Sure, they’d all be wealthier, but wouldn’t that be the case if they had simply stolen the money from the rich person, without the forcible intervention of the government? Isn’t a thief always wealthier after the theft?

Where does it stop? Won’t there be people who are worth $2,000 — the new poor — demanding “equality”? Won’t the government have to seize another $3 million from the rich person and give it to that group of people?

And then what about the people who are worth $4,000, who are now on the bottom rung?

The process just keeps going on and on, until there are no more rich people. Everyone is now truly equal. But in the long run, everyone ends up poor, equally poor. The rich no longer have private businesses in which they are employing the poor. That leaves the government as the sole employer in society.

People end up realizing that a tree based on violations of the natural law and God’s law that prohibit covetousness, envy, and stealing will inevitably produce bad fruit, which includes poverty across society.

We have a real-life example of this phenomenon — Cuba. When he took over as president of Cuba, Fidel Castro had the exact same mindset that guides President Obama. Castro believed that the reason there was so much poverty in Cuba was not because of the U.S.-government-supported “crony capitalism” that characterized Cuba but rather because there were so many wealthy people in society. So, Castro, like Obama, began taking money from the rich and redistributing it to the poor, with the aim of equalizing wealth in society.

But with each distribution, more confiscation was necessary in order to equalize the new segment of poor people at the bottom of the economic ladder. Castro decided to take the socialist principle to its logical conclusion. He ended up seizing all the wealth of the rich people, including their money, their industries, and their mansions.

No longer would money be wasted in the form of “profits” because the government would be running all the industries. No longer would people face unemployment because the government would be the sole employer. No longer would there be disparities of wealth because everyone would be working for the government on salary.

The result has been mass impoverishment in which most everyone is on the verge of starvation. Like Obama, Castro refuses to acknowledge that the root cause of the impoverishment is Cuba’s socialist system. He blames Cuba’s poor economic conditions entirely on the U.S. embargo.

The question that Castro and Obama and other statists never ask is: What are the causes of wealth in a society? That’s the critical question. That’s the question that Adam Smith asked in his landmark treatise, An Inquiry into the Nature and Causes of the Wealth of Nations. He wanted to know what it was that made some nations wealthy.

The answer is one that doesn’t please statists. The key to rising standards of living in a society is the following:

1. Prohibit government from waging war on poverty by confiscating and redistributing wealth.

2. Prohibit government from managing the economy and intervening in economic activity.

3. Prohibit government from controlling and regulating economic activity.

4. Prohibit government from engaging in imperialist military adventurism that inevitably contributes to excessive spending, debt, and bankruptcy.

5. Prohibit the government from managing the monetary system, especially with paper money and a central bank (i.e., the Federal Reserve).

In other words, the key to ending poverty in any society is to prohibit the government from using its coercive power to help the poor. Leave everyone, including the poor, free to engage in economic enterprise free of government control, permit, or regulation. Leave people free to accumulate unlimited amounts of wealth. Leave people free to do whatever they want with their own money.

No income tax. No welfare programs, including Social Security, Medicare, and Medicaid. No regulatory programs. No warfare programs. No monetary programs. Just nothing but free enterprise — that is enterprise totally free of government control and intervention.

That’s the key to ending poverty in every society on earth. When people are free to engage in enterprise and to accumulate unlimited amounts of wealth, the poor have the chance to become wealthy. When people are free to accumulate wealth, they inevitably save some of their income. That savings goes into capital, which is then converted into tools and equipment, which make employees more productive. More productivity means higher revenues. Higher revenues mean higher wages. Higher wages mean higher standards of living, especially for the poor.

Thus, contrary to what Obama, Castro, and others of the statist ilk suggest, there is a natural harmony between the wealthy and the poor. The wealthy risk their money to establish businesses. They hire the poor to work there. To succeed, the business must produce goods or services that please consumers. If the business succeeds, the owner wins, the consumers win, and the employees win. Thus, employees have a vested interest in helping the business succeed.

God did not create an inconsistent, contradictory universe, one in which such sins as covetousness, envy, and stealing produce good results. On the contrary, such wrongful actions inevitably bring bad consequences, not only personally but also when they are enshrined within government policy.

The best thing that could ever happen to the poor is the dismantling of America’s immoral and destructive experiment with socialism, interventionism, and imperialism.

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.