In Jim Cook's Archive


I have these two acquaintances who are big believers in high taxes and heavy government regulation.  One is a lawyer who did OK in his career but never made a lot of money.  The other was in real estate and after years of disappointing results retired with modest means.  They are both envious of people who made a lot of money.  Envy is what makes them liberals.

Scratch a leftist and you’ll find a person who’s worried about someone else making a profit or high income.  Why is that?  Envy explains these sentiments.  Author Helmut Schoek writes, “Envy is a drive which lies at the core of man’s life as a social being. . .”  In America the politics of envy can get you elected to the highest office in the land.

Under Capitalism, everyone has the opportunity to become an entrepreneur or attain a profession or position that pays off handsomely.  However, this system allows no excuses for personal shortcomings or failures.  Many self-made people started from the same place as others who failed or who did not forge ahead.  The sight of people who have given proof of greater ability bothers some people.  To console themselves they rationalize that their skills have gone unrecognized.  They blame capitalism, which they claim does not reward the meritorious but gives the prize to dishonest businesses, and other exploiters.  They were too honest to swindle people, and they chose virtue over riches.

In a society where everyone is the founder of his or her own fortune, it is particularly galling to the teacher, the politician, the artist or the bureaucrat to see the large income disparity between themselves and successful entrepreneurs.  Their envy turns them to socialism, which promises to level incomes and allows the state to control economic outcomes.

The Austrian economist Ludwig von Mises put it this way, “Envy is a widespread frailty.  It is certain that many intellectuals envy the higher income of prosperous businessmen and that these feelings drive them toward socialism.  They believe that the authorities of a socialist commonwealth would pay them higher salaries than those that they earn under capitalism.”

Mises further argued, “What pushes the masses into the camp of socialism is even more than the illusion that socialism will make them richer, the expectation that it will curb all those who are better than they themselves are . . .”

Even among some conservatives there exists an unhealthy level of envy toward the wealthy.  They join with professors and politicians to suggest that the worst exploitation and greed comes from big business.  They fail to realize that large corporations got that way because they did a superior job of meeting the product needs of the people in the best, most economical way.

The hallmark of big business is mass production for the benefit of the masses.  In fact, big business standardizes the people’s ways of consumption and enjoyment, and every citizen shares in most of these material blessings.

As for Wall Street, the current fiasco exemplifies pigging out at the government banquet table.  When the government grants subsidies or provides cheap loans abuses are inevitable. When the government guarantees financial assets and removes risk, excesses are bound to occur.  When the government keeps interest rates artificially low and money and credit loose speculators and risk takers push the envelope.  When the regulators fail as they usually do, abuses occur and tremendous losses are inflicted on gullible investors who think that regulation protects them.  When the government incentivizes social goals such as low income housing by throwing out the rule book plenty of people will jump on the bandwagon.  People are always going to take the most for themselves if it’s available.  Furthermore, the excesses of Wall Street hardly personify the vast number of businesses that are truly representative of capitalism.

Nobody goes without in the market economy because someone got rich.  The same process that makes people rich satisfies people’s wants and needs.  The most millionaires are found in countries with the highest living standards.  The entrepreneurs and the capitalists prosper only to the extent that they succeed in supplying and satisfying the consumer.

The glaring misunderstanding of capitalism and how it works in our society originates more from envy than intellect.  This mix of envy and ignorance explains everything from the inroads of Lenin to the socialists who have led us down the path to fewer freedoms and more government.  The liberals in our government promote a detrimental socialist philosophy.  While Asia moves towards capitalism and prosperity, we are stuck with more big government.  To paraphrase George Bernard Shaw, “You have to choose (as a voter) between trusting to the natural stability of silver and the natural stability and intelligence of the members of the government.  And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for silver.”

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