Green Room

Wealth Does Not Come From the Wealth Faeries

posted at 3:32 pm on July 3, 2010 by

After reading (or watching) several comments from prominent progressives over the past couple days, I’ve been asking myself if they have any idea where wealth comes from. Notice I didn’t say “money” because, really, anything that can has value and can be traded is wealth though not all of it is money (for instance, you could make furniture and trade what you make for food or a car or what have you). Nancy Pelosi got the ball running with the ridiculous statement that the unemployment benefit program “creates jobs faster than almost any other initiative you can name”. Now, here’s Hillary Clinton musing on where we get economics wrong.

It’s important, too, that we look at how to promote broadly-based prosperity. One of the problems in societies around the world today is that too much of the productivity of the economies are going to too few. Too few people, the political and economic elite, are realizing the vast majority of benefits from economic activity.

Now, those of us who get the origin of wealth understand that prosperity only happens when people own the fruits of their labor. The principle that what you produce belongs to you and you have the absolute right to dispose of it as you wish is the cornerstone of all the wealth and wonders created in America for well over 230 years. If you noodle it through, you can easily figure out why this has so. Economic freedom is the first, and most important freedom we have. From it stems all the others (including the freedom of speech, which runs a very close second).

The reason the economic “elite” get the vast majority of benefits is because they produce the largest amount of the wealth. In other words, the man who works hard and builds a business building furniture, who has countless hours of time invested in that business, will realize a greater benefit from his investment than the man he hires to deliver the furniture to customers. That’s the way it is supposed to be. The business owner is withdrawing from the vast account of effort he has built up over the years. Why shouldn’t he benefit from his efforts more than someone who has not invested as much as he?

For most of our country’s history this has been a guiding principle of taxation and government spending. Legislators remembered that when they took your money, they were taking your time and your labor, and they considered each rise in tax and spending carefully. However, in the last 60 years or so the countervailing belief has taken over the Democratic Party and is taking hold in the Republican party as well. Here is that belief in a nutshell:

What you produce is not yours but rather goes into a vast pool of resources that must be apportioned out evenly by a handful of concerned experts, each of whom is compensated lavishly.

Do you see how egregious this belief really is? Do you see the eventual end of such a belief (hint: it ends with benign slavery)? Do you see how the well being of everyone in this country is threatened by such a belief?

Wealth does not simply appear from the thin air. It has to be created by human beings who act out of their own self-interest and have the freedom to create as much as they desire. That’s the only way it works. Without that freedom, wealth dries up and we end up like Zimbabwe.

(Cross-posted at The Sundries Shack)

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Good point, Jimmie. This is why I object to the expression “redistribution of wealth” — because wealth doesn’t “come to people” through “distribution” in the first place. Wealth is only created and earned.

J.E. Dyer on July 3, 2010 at 3:52 PM

Progressives think it’s a zero-sum game. They’re only interested in carving up the existing pie differently and giving bigger slices to favored constituencies instead of growing the pie.

PatMac on July 3, 2010 at 4:03 PM

Zimbabwe’s economic crisis started a lot sooner than 1998.

Skandia Recluse on July 3, 2010 at 4:17 PM

Do you see the eventual end of such a belief (hint: it ends with benign slavery)?

Actually, that’s the second-to-last step.

RINO in Name Only on July 3, 2010 at 8:40 PM

“Too few people, the political and economic elite, are realizing the vast majority of benefits from economic activity.”

Oh, you mean YOU AND YOUR HUSBAND who made over 100 MILLION post presidency?”

SHUT YER PIE HOLE and give it all away to the folks who “aren’t getting any” then!

If you aren’t able to that then STFU!

You want OTHERS to give THEIRS away or else STATISTS like you and this buffoon we call president and his thug friends will confiscate it and “redistribute” it away to his “chosen people”.


Opposite Day on July 4, 2010 at 3:57 AM

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Ed Morrissey on July 5, 2010 at 1:01 PM