The conflict
that exists in our society today and is at the heart of our current
economic crisis is one of economic efficiency vs. economic equity.

Economic efficiency
is the owning of private property and one doing with that private
property what he or she sees fit within the moral standards set
forth by society. Standard economic thought says that one will engage
their private property in such a way as to make their lot in life
at least no worse off and hopefully better off.

This is probably
more readily known to the general populous as "Capitalism."

The wonderful
thing about capitalism is that it provides opportunity. It provides
the opportunities for individuals, communities, social organizations
and the like to improve themselves, their communities or their organization
in one way or another. It provides them with the incentive to use
their resources efficiently. It provides them with alternatives.
It provides them with choices. It provides them with freedom!

Capitalistic
behavior can be found everywhere around us from the student who
has chosen to improve his human capital by attending university;
the working professional who has chosen to add to his financial
capital by going to work everyday; the community organization that
has chosen to improve the community's social capital by building
houses for the poor.

Capitalistic
behavior is innate in every one of us. We can't escape it. And it
is good. It's what has driven us to excel, to explore, to innovate
and invent, to think creatively and "outside the box."
It's what drove the first human beings to invent tools. It's what
drove Europe out of the middle ages and into the enlightenment of
the renaissance. It's what drove pioneering American's to build
this country.

It is in fact
human nature and our constitution was written so as not to preclude
capitalistic behavior in what was to be a great experiment.

Enter the federal
government. "Hail the Conquering Heroes." The politicians
running the government have different objectives. They need votes!
They need to convince voters that they care about them so they'll
vote for them. Never met ’em, don't want to meet ’em, ain't got
time to met ’em but they care about ’em.

They need to
convince voters that they understand that it isn't "fair"
that Bob Jones, who chose to go to university for 6 years to obtain
a bachelors and a master's degree in engineering, has a good-paying
job and they don't. They need to convince voters that they understand
it isn't fair that Bob Jones can afford gas and they can't. It isn't
fair that Bob Jones has health insurance and they don't. It isn't
fair that Bob Jones gets to go to Disney World on summer holiday
and they don't.

Gosh darnit,
the government cares about voters and they're going to work as hard
as they can to make things equitable even if it means getting Bob
Jones to pay for it.

Oh it doesn't
matter that while Bob Jones was sacrificing for 6 years in school,
those complaining chose to do other things with their lives that
didn't improve their human capital. It doesn't matter that those
complaining sat right next to Bob in high school and had all the
same opportunities that Bob had but chose not to take advantage
of them.

The government
couldn’t care less about these things because it needs votes. And
they'll try to buy their votes from the voters by using their unconstitutional
power to enact legislation that forces Bob to give, without compensation,
a part of his hard-earned financial capital to those who don't have
as much as him. This is fairer. This makes our society more equitable.
And why shouldn't Bob? After all, we're all Americans and we have
to take care of our own, right?

Unemployed
or low-income people no longer have to worry about income or health
care or gas because now Bob, at threat of imprisonment, will pay
for it. We can't wait for Bob and his cohort's to voluntarily help
out. We need to force them to pony up now and big.

This has a
profound effect on our society: no longer are we driven to excel,
to explore, to innovate and invent, to think creatively and "outside
the box." It would be irrational to incur the costs of education
and hard work when I know the government will give me everything
I need compliments of suckers like Bob. A smart man would now spend
his time lobbying the government for more entitlements rather than
sitting in a classroom or in a productive social role.

Effectively
the federal government is indirectly trying to illegally homogenize
a capitalistic society. This is an effective political tool in a
capitalistic society. A political tool that has been used before
in other countries with disastrous effects.

It was called
communism. Communism drains a society of human capital, financial
capital and social capital. There is no incentive to excel because
everyone gets the same income anyway. No incentive to explore because
the state owns all the resources. No incentive to innovate or invent
because the state owns your ideas. But it is economically equitable!

Of course due
to the lack of invention, people live at lower levels of existence.
They have sub-modern health care, sub-modern education, sub-modern
infrastructures. Compared with other countries they don't produce
artists, writers, musicians, doctors, scientists, inventers or the
like. But thank goodness it's equitable!

January
9, 2009

Don Cooper
[send him mail] is an economist
living and working in Atlanta, Georgia.