Economics, Historically, History, Politics

Makers vs. Takers

James Madison warned that as our country grew in population, that those who were considered self-sufficient (or as we’ll discuss later, the makers) would be in the minority.  The risk would be that the majority would seek redistribution of wealth through the political process.  James Madison,

In all civilized Countries the people fall into different classes having a real or supposed difference of interests… There will be particularly the distinction of rich & poor… An increase of population will of necessity increase the proportion of those who will labour under all the hardships of life, & secretly sigh for a more equal distribution of its blessings. These may in time outnumber those who are placed above the feelings of indigence. According to the equal laws of suffrage, the power will slide into the hands of the former. No agrarian attempts have yet been made in in this Country, but symtoms, of a leveling spirit, as we have understood, have sufficiently appeared in a certain quarters to give notice of the future danger.

Madison was correct in his warnings of the future danger.  In a free society, some people will be more successful than others.  Some will acquire more wealth than others.  Madison spoke more on the risks:

The latent causes of faction are thus sown in the nature of man… divided mankind into parties, inflamed them with mutual animosity…  the most common and durable source of factions has been the various and unequal distribution of property.

As more and more people (47%) find themselves with no federal tax liability, the danger is real.  Soon, a majority in this country will be paying no federal taxes.  We are developing a culture where we punish success and have disdain for those who are successful.  We provide so many long term safety nets for individual failure that we incentivize failure.  We create a culture where people are encouraged to simply take money from those who make money.

Economist Chris Coyne is correct in his observations regarding the takers in our society.

More and more of our citizens are encouraged to vote for more Corruptocrats so that they can receive more government handouts.  The thinking at the individual level is, “Banks get bailed out, why not me?”  That is precisely what Coyne hits upon in his comments on Takers versus Makers.  People see the inequalities of wealth on a large scale being subsidized by the government.  They feel that it is through the government that they can receive their financial justice.  The dangerous turn of the Occupy Movements is the focus on the failures of capitalism.  The problem is not a failure in capitalism, but the continued failures of socialism in the guise of capitalism.  Fellow blogger Daniel Fee uses the term “faux capitalism” which is aptly named.

Economist Jeff Miron speaks on the top three current myths about capitalism.  One of which is the misconception that being pro-capitalism is pro-business.  This could not be further from the truth.  Being pro-capitalism is about being pro-consumer.

I will remind readers now of what Alexander Hamilton reminded us of at the founding of our country.  Hamilton,

It was certainly true that nothing like an equality of property existed: that an inequality would exist as long as liberty existed, and that it would unavoidably result from that very liberty itself.

Our country was founded on everyone being created equal under the law.  But, with our continued progression of legislating punishments on some segments of society to the benefits of others, such as a progressive tax system or subsidizing some businesses and industries over others, we create greater inequalities under the law.  You can not reach an equality of property or wealth without losing the equality of us all under the law.  We will sacrifice our liberty in our chasing of the equality-carrot.  We will lose our liberty, our wealth, and our republic.



7 thoughts on “Makers vs. Takers

  1. 1. All employed people pay the payroll tax, whether or not they pay federal income tax; there is a difference.

    2. 1% of the world’s population controls 39% of world’s wealth.

    3. “As Mankind becomes more liberal, they will be more apt to allow that all those who conduct themselves as worthy members of the community are equally entitled to the protections of civil government. I hope ever to see America among the foremost nations of justice and liberality.”
    ~George Washington

    4. “To impose taxes when the public exigencies require them is an obligation of the most sacred character, especially with a free people.”
    ~James Monroe

    5. “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
    ~Abraham Lincoln

    6. “The supreme duty of the Nation is the conservation of human resources through an enlightened measure of social and industrial justice. We pledge ourselves to work unceasingly in State and Nation for … the protection of home life against the hazards of sickness, irregular employment and old age through the adoption of a system of social insurance adapted to American use.”
    ~Theodore Roosevelt

    7. “It is essential that there should be organization of labor. This is an era of organization. Capital organizes and therefore labor must organize.”
    ~Theodore Roosevelt

    8. “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.”
    ~Franklin D. Roosevelt

    9. “If capitalism is fair then unionism must be. If men have a right to capitalize their ideas and the resources of their country, then that implies the right of men to capitalize their labor.”
    ~ Frank Lloyd Wright

    10. “America was established not to create wealth but to realize a vision, to realize an ideal – to discover and maintain liberty among men.”
    ~Woodrow Wilson

    11. “Taxes, after all, are dues that we pay for the privileges of membership in an organized society.”
    ~Franklin D. Roosevelt

    12.) “Where free unions and collective bargaining are forbidden, freedom is lost.”
    ~Ronald Reagan

    13.) “Only a fool would try to deprive working men and working women of their right to join the union of their choice.”
    ~Dwight D. Eisenhower

    14. “If a free society cannot help the many who are poor, it cannot save the few who are rich.”
    ~John F. Kennedy

    15. “We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.” ~Supreme Court Justice Louis Brandeis

    16. “I believe that, as long as there is plenty, poverty is evil.”
    ~Robert Kennedy

    17. “I like to pay taxes. With them, I buy civilization.”
    ~Oliver Wendell Holmes

    18. “Mark my word, if and when these preachers get control of the [Republican] party, and they’re sure trying to do so, it’s going to be a terrible damn problem. Frankly, these people frighten me. Politics and governing demand compromise. But these Christians believe they are acting in the name of God, so they can’t and won’t compromise. I know, I’ve tried to deal with them.”
    ~Barry Goldwater

    19. “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”
    ~Franklin D. Roosevelt

    20. “Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes that you can do these things. Among them are a few Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid.”
    ~Dwight Eisenhower

    Just food for thought. It is interesting to note that neither Teddy Roosevelt, nor Dwight Eisenhower, nor Richard Nixon, Gerald Ford, or even Ronald Reagan could pass the Republican “purity test” today.

    Posted by Minister of Information | December 29, 2011, 6:36 pm
    • Thanks for stopping by. Now your education has truly begun.

      1. Yes, I know.
      2. What is your greater point? The answer to this is not to divide the existing wealth, but to create more wealth.
      3. America is among the foremost nations in justice and liberality. Good quote from a great man.
      4. Don’t be shy. Give the whole context of the Monroe quote, “To impose taxes when the public exigencies require them is an obligation of the most sacred character, especially with a free people. The faithful fulfillment of it is among the highest proofs of their value and capacity for self-government. To dispense with taxes when it may be done with perfect safety is equally the duty of their representatives. In this instance we have the satisfaction to know that they were imposed when the demand was imperious, and have been sustained with exemplary fidelity. I have to add that however gratifying it may be to me regarding the prosperous and happy condition of our country to recommend the repeal of these taxes at this time, I shall nevertheless be attentive to events, and, should any future emergency occur, be not less prompt to suggest such measures and burdens as may then be requisite and proper.” He said that at a time when he was repealing taxes.
      5. A quote from a Republican hero, Abraham Lincolns 1861 State of the Union. He went on just a tad later to add some clarification, lest someone try to use his words out of context. Lincoln, “Again, as has already been said, there is not of necessity any such thing as the free hired laborer being fixed to that condition for life. Many independent men everywhere in these States a few years back in their lives were hired laborers. The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself, then labors on his own account another while, and at length hires another new beginner to help him. This is the just and generous and prosperous system which opens the way to all, gives hope to all, and consequent energy and progress and improvement of condition to all. No men living are more worthy to be trusted than those who toil up from poverty; none less inclined to take or touch aught which they have not honestly earned. Let them beware of surrendering a political power which they already possess, and which if surrendered will surely be used to close the door of advancement against such as they and to fix new disabilities and burdens upon them till all of liberty shall be lost.” Abraham Lincoln’s leadership is sorely needed today.
      6 & 8. Teddy Roosevelt of the Progressive Party meant well. I think everyone wants to help those in need. The difference is in how we go about helping them. Liberals wish to keep them as victims in a specific social class. Conservatives wish to empower them into self-sufficient individuals.
      7 & 9 & 12 & 13. I think people should have the right to be in a union. And they should have a right not to be in a union. Unions are a force. Like any force, they can be a force for good, or for bad.
      10. Good quote. Wealth is a by-product of liberty. Without our liberty, we’ll lose our wealth. I should have used that quote in my article.
      11. Duh.
      14 & 15 & 16 & 19. See 6 & 8
      17. Who said there should be zero taxes?
      18. Barry Goldwater was a pretty smart guy.
      20. Eisenhower was a strong believer in Social Security, but I’m sure he was smart enough that if he were alive today to know it needs tweaked from it’s current format. However, that quote is from a letter he wrote his brother where he is responding to his brother’s criticisms. However, Eisenhower also expressed his concerns that the Federal Government had grown too large due to the New Deal legislation passed by FDR. Since so many people then (and now) rely on the Feds to provide so many functions from them, it was going to be very difficult to scale it back.

      Posted by G | December 29, 2011, 8:25 pm
  2. I’m sorry, I wasn’t clear. I wasn’t trying to refute (or engage) this particular post; but I did want to share those quotes with you. You did me the courtesy of stopping by, so I thought I’d return the favor. I have no interest in debating your points, as I have done in the past. I can only repeat what I wrote at my blog: you are arguing for a policy called “Neo-Liberalism,” which has already failed twice. Doesn’t make sense to me.

    Posted by Minister of Information | December 30, 2011, 11:42 am
  3. I sincerely appreciate you stopping by. I hope you read the blog article and watched the videos.

    I apologize if I was defensive about your comments, but was glad I had the opportunity to clarify a bit on a few of the quotes you shared. You’re incorrect that classical liberalism has failed twice. Although no system will ever be entirely perfect, lightly bridled capitalism provides the most for the most. Socialism and communism have never succeeded anywhere at anytime.

    Posted by G | December 30, 2011, 7:43 pm
  4. Yup, failed twice. That’s fairly obvious. But here’s an article I know you will love:

    Happy New Year.

    Posted by Minister of Information | December 31, 2011, 12:28 pm
  5. I sincerely wish you a happy new year too.

    The editorial you linked is full of misinformation, but not surprising, considering it is an opinion piece in the NY TImes. It basically comes down to whether one wants to continue big government corruption or place more liberty and responsibility back to the people.

    I’ll choose the people.

    Posted by G | January 1, 2012, 11:04 am
  6. For a quarter of a cernuty, from 1980 to 2004, while U.S. gross domestic product per person rose by almost two-thirds, the wages of the average worker fell after adjusting for inflation. Over the three decades from 1972 to 2001, the wages and salaries of even those Americans at the 90th percentile (those doing better than 90 percent of their fellow citizens) experienced income gains of only 1 percent a year on average.

    Posted by Henrique | January 29, 2013, 7:38 am

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