Wednesday, December 15, 2010

Class Warfare and the Social Yard-Stick

Class warfare is becoming a full-blown storm on Capitol Hill. It is not really anything new – a time-tested strategy frequently relied upon by the left, but also used by the right. President Obama’s latest deployment was during his announcement of the bipartisan tax deal with Republicans.

Presumably, such a cross-aisle deal is a time to rejoice at actually finding middle ground in the exceedingly divisive Congress. Instead, the “class card” was thrown about. Obama likened the deal to one made with hostage-takers [Can a deal really be enforceable if made under duress?!]. He stated, “I’ve said before that I felt that the middle-class tax cuts were being held hostage to the high-end tax cuts. I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed.”

Now, the merits of Republican tactics aside, the interesting issue is the continued desire of American politicians, particularly on the left, to sow the seeds of class warfare. The storyline is familiar – greedy fat cat CEOs, those over $250k not “paying their fair share,” and “tax-cuts for the rich.” Republicans feed right into this game, defending the economics of high salaries and bonuses (needed to incentivize performance), arguing for low tax rates (high rates stifle economic growth), claiming that some “rich” just really are not all that rich, and pointing to all the good that some wealthy do for the community.

All of this is probably true and these arguments need to be made. However, they miss the fundamental point and allow the political game to be dictated on far-left terms. The left loves class warfare. It plays into a multitude of arguments defending wealth redistribution and increased government involvement in the lives of private citizens. But it rests on a fundamental misunderstanding of what income’s purpose is.

The left looks at income as a sort of social yard-stick, a tool to measure one’s value to society. By this logic the more one makes, the more good they should bring. However the argument goes, there is quite a bit of injustice in the system! Greedy CEOs do not help the country and yet they get rich, while struggling laborers barely make ends meet! The natural solution? Take from those who undeservingly make a lot of money and give to those who deserve it, but do not get it.

Implicit in this argument are at least two assumptions. The first is the particular standard regarding who deserves what. The left has come up with some arbitrary criteria of what is “deserving” and thus how wealth needs to be redistributed. Enter the Republicans – who try to challenge the left’s definition of “deserving.” This is where the class warfare is generally fought. Republicans, for instance, argue that CEOs, for better or worse, do deserve at least some of their recompense.

However, by playing the game of “what social value do [insert: CEOs, top 5% of income earners, those who make over $250k, etc] have,” Republicans are tacitly acknowledging the deeper assumption in this leftist [daresay socialist] argument – that there is even a relationship between social value and income.

The fact of the matter is that income is a measure of one’s services in a given line of work. It is the market’s determination of what value an individual provides for a certain occupation. Income, like the price of nearly every other good, is motivated by a host of factors, including, of course, supply and demand.

However, it is not – and should never be – a measure of one’s value to society. This is too arbitrary of a claim. Society – government in particular – has no right to pass judgment on an individual’s value or their associated income. [Beyond the issue of right – government simply has no, non-arbitrary means to determine value outside of the market-mechanism.] The rich are no more or less deserving of their wealth, than the poor are of their dearth. “Deserving” just simply is not a concept that the government is fit to act upon.

It is time to cut the class warfare. It is far too divisive and harmful for our country. Not only does it lead to strife between individuals and groups, but it creates an environment where the government feels even more compelled to meddle in the private affairs of citizens. One may not like that someone else makes more than him, but that never justifies arbitrarily taking it from him. Why should it be any different for the government?


  1. Rabble rousing makes a perfect smoke screen for ignoring what the people asked for in this last last election. I would not expect anyone in the political arena to give up any rhetorical tool that is effective with the thoughtless "deserving".

    These people (both parties) would not recognize a positive feedback loop if it bit them in the ass. Where are the proposals for self-correcting behavior from the Republican Party?

  2. Jim,

    Hope you're not right - but I fear you might be. However, one of the things I do give the Tea Party credit for was to begin to influence Washington. Maybe the answer is for this to expand and mature into new directions.

    Thanks for posting.


  3. The top 5% of income earners pay almost 60% of the total amount collected through the federal income tax. Lower income earners should pay their "fair share" so that they can better feel the impact of government doling out free stuff.

    Without certain income tiers feeling the impact of taxes, they will inevitably ask for more free stuff.

  4. Publius~

    Very interesting point. I imagine you're right to some degree - the more people had to pay the more they would demand that extraneous programs be cut. It'd be interesting to see what correlation there is between paying in to the system and calls for reduction. The complexity of the system cuts some of the ties between the two. Look at social security for instance, which is supported by almost all, even though many do not benefit. The likely reason (for many) is that the benefits are detached from the payments. Even the wealthy get SS checks and don't necessarily link these checks to money that was paid years ago. However, often they have paid far more than they take out.

    I think you're on to something though. People need a way of seeing what their taxes are paying for.



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