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Potomac Crossings
--By George Mason
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Social Inequity
Washington is ruled, they say, by the Iron Triangle. The power of the iron triangle is brought into play anytime
there is a serious attempt to cut or eliminate an existing government program. It consists of the members of Congress
who originally wrote and passed the legislation and now retain oversight, the bureaucrats whose jobs and budgets
depend on properly administering the program, and the organized constituents who benefit from the program. Vouchers
anyone? Not likely, until all the old programs are "fully" funded.
If we want to know what's coming next, however, we have to look at the Pewter Triangle. It is made up of members
of the chattering class who are intent on designing the next iron yoke for the citizens. Its members are the activist
academics, entertainers and media pundits who labor mightily to advocate new public sector programs to benefit
us all. The entertainers can highlight issues, demonize and satirize opposition. The academics can produce alarming
trends complete with recommended cures in their subsidized studies and the pundits can report as news the work
of the first two groups as well as fail to adequately cover opposing views. Are insurance losses in flood plains
due to global warming or to the fact that lots of folks have recently been building expensive homes on flood plains?
How would the average citizen know?
Just as the homeless have been re-discovered in time for the 2000 races, social inequity will again become a cause
for much handwringing and tut-tutting. The first shot? The New York Times has concluded that poor people who have
subsistence jobs behave in much the same way as poor people on subsistence welfare payments. They suggest this
means that, in spite of a dramatic decline in tax expenditures, the work to welfare movement, just two years old,
has been a failure.
Luddites multiply in times of technological upheaval. The next century's advances in biology will furnish the ripest
of targets. Cloned tomatoes will be thrown hither and yon. The left, having demonstrably lost its economic arguments,
hides its anti-capitalist motives in the environmental movement. Punish an SUV owner, anyone? If we can't stop
"wrong behavior", let's at least tax it. Or sue. Or both.
The bigger shot, this coming electoral season, however, will be aimed at the dot.com millionaires. The charge?
Rampant greed. The cure? New taxes. New laws. All in the name of the needy.
Here is the old economic success model. Get a skill. Sell it to a large organization for a lifetime. Save your
money over decades until your net worth will support you in retirement. Take your pension and enjoy a few healthy
later years. There is a lifelong premium to be earned for subordinating yourself to the goals of a large, economically
powerful and stable organization.
Here is the new model. Ingenuity, intelligence and innovation are the properties of free individuals. A single
person can invent an enterprise, receiving not just a salary but a personal share of the value created. Get your
education. Work like crazy for the few years it takes to create a company. Have your IPO. Multiply your stock options
by the IPO price. Having provided a lifetime and beyond of security for yourself and your family at a young age,
you become free to define what is good in life without economic distortion.
Not having one of their own, the Pewter Triangle has been thinking about your IPO. They have discovered that, for
the first time in history, the fastest-growing segment of millionaires is not those over 60 but those 35-54. Writing
in USA TODAY, Alan Webber notes that the United Way of Santa Clara, California, in the heart of Silicon Valley,
has run out of money because of the lack of donations.
A 1998 study by the Community Foundation, he reports, found that 45% of the highest net worth households in Silicon
Valley gave less than $2,000 annually to charity. Does this mean that the newly rich do not like to donate to ineffective
and unsuccessful charities? No, not to the Pewter Triangle. The social compact is in jeopardy!
It must mean that democracy in the economy has veered into greed. It must mean that allowing individual opportunity
has created social inequity. Capitalism must be creating personal greed as well as fresh wealth.
Or, might it mean that there is no end to the greed of government? As Johnny Carson astutely observed, "Of
course, Robin Hood took from the rich. The poor have no money!" The politician as Robin Hood is not a new
myth but an ancient one. Take a lot from the rich, give some to the poor, keep the rest, has been a formula to
power for more than one millennia. New wealth equals fresh opportunity.
Social inequity, as defined by the deep talkers, means that wealth is not sufficiently spread around. They frame
their case by assuming a moral argument. Something is wrong when some do better than others. Something is clearly
wrong when the folks they favor don't have the money. The ordinary worker is not getting a piece of the action.
The needy are not being protected. We must avoid creating a deep and permanent economic and class division both
within the United States and between the United States and the world. We advocate equal results from unequal effort.
Society needs mechanisms to attach satellites to the productive.
The classic utilitarian argument for spreading wealth around, is that few are wealthy and many are poor, therefore
the well-off should share so that the poor not rise up and revolt, taking away all wealth. The various Latin American
bouts with communism demonstrated that one could, in fact, create social equality by destroying the wealth creators.
When all are poor, all are equal. The dominate elite, however, always seems to find a way to reward itself for
its services.
So, there is a serious dot.com dilemma. Share the wealth or share the knowledge of how to create wealth? The election
of 1800 (which decided who would succeed Washington) had one central theme: To what extent should the nation be
governed for the benefit of the people and to what extent should it be governed for the benefit of the elite? It
will be the same issue in 2000. The difference being that the advancing electronic age allows for the creation
of an elite of one.
In the next decade, can new wealth solve the central dilemma of capitalism? Its great virtue is that capitalism
is efficient. Its great drawback is that capitalism is efficient. What should be done with people who have only
a little economic contribution to make? Or the ones who are not economically viable at all?
Can the dot.com companies be sure that all their workers, the new, the old and the loyal, receive a portion of
the IPO benefit? Can a bit of the start-up shares be reserved for worthy causes? What the dot.com millionaires
fail to decide for themselves will be decided for them. Just ask the folks who make up the Pewter Triangle.
| George Mason, 1725-92, was known as the Sage of Gunston Hall.
His Virginia declaration of rights, written in 1776, was the model for the first section of the Declaration of
Independence. A friend of Patrick Henry and Thomas Jefferson, Mason was an original drafter of the Constitution
and the first ten amendments to the Bill of Rights. He refused, however, to sign the final version of the Constitution
because he thought it did too little for individuals and, without the Bill of Rights, gave too much power to the
government.This column honors his memory. |
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