While dark pools flood the world’s markets and let speculators frolic…the actual, real-world experience of the average American is getting more and more grim. The latest figures show him driving more – even though oil has climbed back over $65 and gasoline is at record prices. Nor does he show much hesitation to borrow and spend – even though the latest polls show him losing confidence. And get this: The state of Florida reports declining tax revenues for the first time in 32 years!
We opined the other day that it is not absolute wealth that the average man cares about, but relative wealth. A man in an Indian village doesn’t envy the American with air-conditioning and two cars in his garage. He envies the man down the street with a half-acre more of garden space.
An American may be perfectly content to vote Republican when Ronald Reagan is in the White House and he thinks everyone is getting rich. But when the slump comes, he looks around and sees things differently. He begins to look for a New Deal. Not since the ’20s, in America, have so many people had so little while so few others have had so much. The many, pressing their noses to their television screens and gaping at their rich neighbours like the mob facing Marie Antoinette…are likely to want a change.
Then, the scoundrels and scalawags will have their day at last. The old politics of envy will make a comeback. “Soak the rich,” they will say. “Hang the profiteers”… “Power to the people…”
Envy does not permit a free society. People say they value liberty, but they can’t stand what it produces. They can’t stand the fact that – left to their own devices – some people will have more than they do and some will struggle to survive. Redistribute income, tax, control, regulate – they will support almost any measure that promises to make the outcome more to their liking. They will ask (and in some cases demand) that their leaders control everything – income levels, interest rates, health care, parking, handicapped access, what the schools teach, what language people speak, who can marry whom, what goes into the sausages – even the weather!
The rascals in every major political party all share the same basic opportunistic creed. They differ in style, not in substance; one clown wears patrician blue…the other a plebian red. One favors a plan whereby government pays all medical expenses. Another offers reimbursements. Still another offers subsidies and tax incentives to various favored projects. Every one of them believes in taking something from one citizen and giving it to another.
But envy is not the only reason for the triumph of collectivism. We are, by nature, collective animals – like our monkey relatives. We may no longer live in trees, but we still live in groups. And we look to our neighbours – not to ourselves alone – for food, shelter, comfort, companionship, direction, religion, opinions, and much more.
Yes, in theory, all of these relationships could be managed in a free, consensual, collegial and civilized way – in which persuasion and honest trade are used instead of violence and force. Most of our private lives are run that way. We do not threaten the baker for a loaf of bread. Nor, for the most part, do we take our wives like Sabine women; we are taken by them…seduced, not stolen.
But public life is different. Without the iron hand of the state behind him, mass man feels a little lost…vulnerable…and lonesome. How will he eat, unless his neighbours are forced to give him bread? Who will look out for him in his retirement, unless the younger generation is forced to pay into Social Security? Who will protect him from terrorists, if his armed forces are not properly locked and loaded? A little bit of humble reflection might show him that he would be better off by relying on his own wits…but not one man in ten is prepared to do it.
The world might be a better place if people were free…but it would not be the place it is.
Markets and Money