The Mystical, Magical “Economy”

by | Feb 11, 2003

Many speak of “the economy” as if it were some mystical god we exist to serve: Tax cuts for the rich won’t help “the economy.” Will that plan boost “the economy?” A nation’s economy is not a cause but an effect: the effect of the productive activities of a multitude of individuals– or their stifling. […]

Many speak of “the economy” as if it were some mystical god we exist to serve: Tax cuts for the rich won’t help “the economy.” Will that plan boost “the economy?”

A nation’s economy is not a cause but an effect: the effect of the productive activities of a multitude of individuals– or their stifling.

If individuals are free to pursue their own interests, then, naturally, the group as a whole is better off. But if they aren’t free– free primarily from interference by an institution that properly exists only to defend them, the government– then the group as a whole suffers. For proof, compare totalitarian North Korea to (relatively) free America.

The main but oft-overlooked precondition for prosperity, then, is freedom.

Notice that America, history’s most prosperous country, is based not on serving a king or state or church or group or “the economy,” but on each individual having the right to life, liberty, and the pursuit of happiness–in other words, on freedom.

That’s why it’s wrong (and fundamentally un-American) to regard “the economy” as something before which individuals must bow. And conservatives are wrong to promote tax cuts on that basis. Tax cuts do, of course, help the economy, but that’s not their justification. And even if a proposed cut doesn’t portend much “economic stimulus,” one should support it anyway. Why? Because people have a moral right to what they earn.

To illustrate, imagine if the police nabbed a local thief and told victims to come reclaim their possessions. When you recoup your diamond bracelet, a pack of neighbors begin howling, “Why does she get more than we do? The rich are getting richer! She shouldn’t receive that unless it helps the economy!”

If you exist to serve “the people,” if you have no right to what’s yours, then those howlers have a point– and so do tax-lovers.

Just as I’m not damaged if police manage to recover my neighbor’s stolen goods but not mine, neither am I damaged when other people get tax cuts. What damages me is the original theft– even if the thief bolsters “the economy” by spending what he stole, or by giving it to the poor, or by using it to start a business or whatever. The ends don’t justify the means.

Moreover, one benefits not only from one’s own freedom and money, of course, but also from other people’s. Businessmen benefit from people being able to buy their goods and services. Those lacking the capital, talent or desire to own a business– or who may even be dirt poor– benefit from risk-taking capitalists being able to buy their labor.

For instance, I personally don’t own any stock in, say, hotels. But it’s to my advantage that there are wealthy people who build and operate them: I can rent a room when needed. Yet I bear none of the stockholders’ risks or executives’ headaches (unless the government uses my tax dollars to bail out a failing company, which violates the free-market principle–as Republicans often do).

Indeed, we all profit by others possessing capital and the liberty to deploy it. But if they are taxed into oblivion, even if the rest of us get a cut of the loot, it hurts us in the long run.

Consider where we would be today if young Henry Ford or Thomas Edison (or their financial backers, had they any) had been obstructed by government taxation. Would the poor have a higher standard of living without electricity and all the inventions stemming from it? Would they be wealthier without cars– or the products of the mass-production methods Ford originated?

It’s time Americans rediscover that while exercising their freedom some individuals may actually make more money than others do, but everyone wins. And it’s time that tax-cut proponents realize that they have both the moral and practical arguments on their side.

Wayne Dunn writes about political and cultural events from an Objectivist perspective.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

Have a comment?

Post your response in our Capitalism Community on X.

Related articles

Are the Democrats betraying Israel?

Are the Democrats betraying Israel?

Both Biden and his predecessor, President Barack Obama, promised that they had Israel’s back, but it now appears that they are painting a target on its back at a time of its greatest vulnerability.

No spam. Unsubscribe anytime.

Pin It on Pinterest