Sunday “sermon” time…..
Adam Smith argued that a market economy serves the common good by allowing individuals to operate on the basis of self-interest. I agree. The problem is, too many of our contemporary “Captains of Industry” don’t understand where their own self-interest ultimately lies.
The worst thing about avarice is how shortsighted and ultimately unproductive it is, even for those whose pursuit of ever-fatter bottom lines is all-consuming.
That’s because a more equal society is in the long-term best interests of even those people who don’t feel any obligation to feed hungry children or find jobs for ex-offenders or make health care accessible to poor people. First, there’s the fact that– in order to remain competitive in a constantly changing global economy– America needs to use everyone’s talents. Social injustices that prevent people from reaching their potential are a drag on that competitiveness.
Second, it is cheaper to deal with problems at the front end than at the back. When we cut programs that help poor folks, we may save a few dollars in taxes, but (as substantial research confirms) we end up paying far more, in costs ranging from lost productivity to prisons.
But it’s the third argument that ought to make us stop and think. As I have argued before,democracies require stability in order to survive.
In countries where there are great gaps between the rich and poor, in countries where some groups of people go through their lives being marginalized or despised while others enjoy privileges and respect, in countries where some people are exploited in order that others might benefit—that stability is hard to come by. A wealthy friend of mine once put it this way: “I’d rather pay more in taxes than spend my days worrying about angry mobs rioting in the streets or desperate people kidnapping my children.”
Most of us understand that—as Elizabeth Warren has pointed out–no one succeeds solely by his own efforts. There is a social and physical infrastructure required to support and enable entrepreneurship and wealth creation, and we taxpayers have built and maintained that infrastructure. And that’s fine. Adam Smith was correct that we all benefit when someone builds a better mousetrap, or improves on another guy’s widget. But when someone profits from his better mousetrap, the people who paid for and maintained that infrastructure–the people who invested in his business via the support systems that enabled him– have a right to a return on that investment in the form of taxes.
A genuine devotion to one’s own self-interest requires us to recognize the degree to which we depend on social stability and an adequate infrastructure–both social and physical.
The contemporary Oligarchs–with their greed and contempt for the common good–are undermining the very system that has allowed them to succeed. What they fail to recognize is that when the system fails, they will fail with it.