Last year, the Boston branch of the Federal Reserve
put out a working paper which contained detailed data
on the declining
trend of economic mobility in the United States.
According to the paper, the percentage of Americans who reside in the lowest
income quintile and move up either to the middle quintile or higher has been in
decline over the past three decades. This statistic should be alarming as
it is indicative of stagnation within an economy that supposedly fosters the
entrepreneurial spirit. Without the
opportunity to create and deliver things which enhance the lives of others,
society as a whole ends up being denied the work of the most constructive
members. To some, it has meant that government at all levels is
doing an inadequate job in addressing what appears to be a growing divide
between the haves and have-nots. Calls for higher taxes to pay for
programs and schemes of redistribution which would enable the less-fortunate in
following their ambitions usually follow.
It
is standard fare for pro-government advocates to defend the notion that the
state exists to create opportunities for the people. In first presidential
debate between U.S. President Barack Obama and challenger Mitt Romney, Obama articulated his belief that the federal government should “create
ladders of opportunity” as well as “create frameworks where the American people
can succeed.” The president is not alone as economist and leading voice
of progressivism Paul Krugman expressed his dismay in his New York
Times column over Washington’s failure to create “equal
opportunity.”
Conventional
examples of government-created opportunities include cheap college loans,
public education, small business loans, land grants for universities, housing
for those on low-income, and an array of infrastructure projects meant to
facilitate transportation. Proponents of these measures see them as a
necessary springboard for social mobility; that without these resources, the
downtrodden would forever remain in a state of destitution.
The
problem with this assertion is that the ability to lift one’s self up by their
proverbial bootstraps is only ever hampered by the state. The various efforts to
create “opportunity” by lawmakers necessarily mean less opportunity created in
the non-government sector. Nothing government has a hand in ever comes
for free. Unlike the private sector which relies on voluntary payment or
donation, the state obtains its resources through force and fraud. This
impairs the ability of political spenders to engage in efficient economic
calculation and gives rise to cronyism. The
opportunities created by politicians are for their favored interests; hardly
ever for the benefit of all.
In
a free society there would be ample opportunities to meet the desires of
others. As long as the rights of others are respected
and protected, people can pursue their own happiness without fear of violent
retaliation.
Life,
in a sense, is opportunity. It is a chance to live and prosper or fall
and whither away. This is a reality that no ruling institution,
governmental or spiritual, can alleviate. Man entered this world with
only the natural world at his fingertips. The modern age is no
different. All of the conveniences enjoyed today still come from the
Earth. The difference is that as that mankind’s population has grown,
trade has expanded across the world, and the division of labor has deepened,
goods and services have improved the human life well beyond than what any
individual thought possible just a few decades ago. When left to its own devices, the market economy will tend to
bring that which was once considered luxury into the hands of even the poorest
in society. As
long as man’s desire remains limitless, the progress made will only continue.
Government
is not an enabler of this kind of opportunity but a barrier to
enterprise. Certainly the multitude of
bureaucracies at every level of government can provide a career to anyone
interested. But this employment comes at the expense of the non-coercive,
private sector. The ruling class makes it its job to regulate and control.
This means interference in the free dealings of people.
The
classic example is that of minimum wage laws. In the name of lifting the lower class out
of poverty, lawmakers establish price floors enforced through the threat of
fines or imprisonment. This dictate has the opposite effect of pricing
out those whose added marginal productivity does not exceed the level deemed
politically appropriate. A chance to work at a lower wage and gain
applicable experience is all but cut off. Instead of helping the poor,
minimum wage legislation is extremely detrimental to the low-skilled. For smaller business, the mandating of higher wages makes it more
difficult to compete with larger, more profitable competitors who are in better financial shape to
meet the new requirement. The result is less opportunity for both
prospective workers and self-starter companies.
When
a member of the political establishment speaks of “creating opportunity,” it is
almost always a sign of a coming boondoggle where a close affiliate’s pockets are
lined with taxpayer money. The state erects
obstacles to prosperity; never pathways. In a world of scarcity,
opportunity for a better life is an ever-present reality. In the
marketplace, success is achieved by making others better off. Achievement
for the state means trampling on the rights of others. One embodies the
elements of peace and cooperation which give way to fostering incalculable
opportunities to thrive. The other results in a perpetual state of
conflict between what 19th century American political theorist John C. Calhoun
labeled as “two great classes.” The first class consists of those who
“pay the taxes” while the other is “those who are the recipients of their
proceeds.” The state creates opportunity for latter and decimates it for
the former. The only way
to set free the innovative minds who build wealth and opportunity is to scale
back this exploitive state of affairs.
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