Trade, Tariffs, and some Basic Economics

Why does trade occur? Fundamentally, trade takes place in order to better the lives of those participating in the trade. You trade money for food because you are hungry and money doesn’t taste very good. Each party values what they are trading away less than what they are receiving in return. That is why the trade occurs.

Another way to look at trade is that it increases efficiency. As people (and companies) trade, they move closer toward an optimized equilibrium. There is an economic principle known as marginal utility. The idea is that the more of a thing one consumes, the less valuable each subsequent unit of the thing becomes. If you are hungry, a hamburger may be very valuable to you. You might even be so hungry that a second burger sounds good too. But how about a third or a fourth burger?

If you were willing to pay $10 for the first burger, does that mean that you would also be willing to pay $100 for ten burgers? Of course not. The utility of the tenth burger is far below that of the first. The reason this is relevant to efficiency is because trade allows people who have more of something than they need to transfer it to someone who values it more highly. You were willing to pay $10 for a burger. Presumably so are others. You aren’t willing to pay $100 for ten burgers. What about $50 for ten burgers? It’s a better deal on a per-burger basis, but you still aren’t hungry enough to consume ten (or even five) burgers.

What to do with all those extra burgers? Trade, of course. At $5 per burger, you can now trade them to people who want them enough to pay $10 a burger and make a nice profit in the process. By the time the trading is complete, everyone in the room will have had a burger and everyone will be (presumably) more satisfied than they were before the trades occurred.

Another important economic principle here is the subjectivity of value. Value is not an intrinsic quality of a good. It is an externally ascribed quality that is unique to each individual. A burger is not objectively ‘worth’ $10. It is ‘worth’ only what someone will pay for it. If you are willing to pay $10 for a burger, that means you value that burger at a minimum of $10. Someone else might value a burger at $8. This means they would pay $8 for a burger, but no more.

So what does all of this have to do with tariffs? As we already discussed, trade increases efficiency. It allows people to balance their subjective values and surplus goods as the economy (which really just means all the people in the economy) moves ever closer to that optimized equilibrium. It never reaches 100 percent optimization, of course, because people’s wants and needs are always changing.

Government intervention in the economy reduces efficiency. Every tax (and a tariff is just a tax) and regulation serves to decrease the efficiency of trade. Remember the $5 burger you sold for $10? Now imagine a 10 percent sales tax being added to it. Now you either have to sell the burger for $11 to get the same $5 profit or you can still sell it for $10, but only receive $4.09 in profit. Either way, efficiency is lost because some of what is being traded is removed from the equation. In the next trade, either you or your customer (or both) will have less to spend.

In a free market, the more trades the better because even trades that only increase efficiency slightly are worthwhile. In a market saddled with government intervention, the loss added to every transaction makes some previously beneficial transactions impractical. The more taxes or tariffs that are added to transactions, the fewer transactions occur and the less efficient life becomes.

Some people who advocate tariffs believe in a concept called protectionism. This is the idea that if the inefficiencies of high taxes are added only to some goods (or to certain suppliers) of these goods, it will protect other goods or suppliers. Imagine that the 10 percent tax added to the burgers only applied to beef. Turkey burgers could be sold tax-free. This might seem to benefit sellers of turkey burgers as some consumers would see turkey as an acceptable substitute good for beef.

Why is this a bad idea? There are several reasons. The first is that the burger market with the tax on beef is still less efficient than the burger market with no taxes at all. The second is that the consumers who opt for turkey instead of beef just to avoid the tax are not as satisfied as if they had their first choice. A third reason is that the artificial advantage given to sellers of turkey burgers will discourage them from seeking out greater efficiencies or improving their quality or customer service. They don’t need to make these improvements, as their products are already cheaper thanks to the protectionist tax system.

Prosperity is maximized when efficiency in the market is maximized. Your dollars go further, your trades are more beneficial, and your options are expanded. On the other hand, wellbeing is reduced as government intervention increases. Every obstacle which is erected in the path of trade reduces the efficiency that promotes prosperity.

Regulations are another form of mandated inefficiency that governments may inject into an economy. Imagine a new law which requires that every burger be sold with a bib. Who would want such a thing? The bib industry, of course. They would love this idea. Such a mandate might be justified as “saving thousands of jobs in the bib industry,” but would that actually improve the economy?

At first glance, it might appear so, but what is seen is often dwarfed by what is unseen. All the money spent buying unwanted bibs would be diverted from other uses. Every dollar that is spent requires forgoing other options. These rejected alternatives are the opportunity cost of your decision. A dollar spent buying a useless bib can’t be spent on something else that is more desirable or productive. These lost opportunities make the bib mandate a net negative for the economy, diverting resources that would have otherwise been used more efficiently.

There are more problems with the bib mandate, however. A protected industry has little reason to innovate or seek out greater efficiency. The bib industry protected by our hypothetical mandate would have no reason to improve their unneeded product or to adapt their industry in response to consumer demand. Those employed in it would not learn new skills or make any meaningful contribution to human wellbeing.

What of trade deficits? Advocates of tariffs often cite a supposed trade deficit as a justification for intervention in the economy. In short, a trade deficit is the amount by which a country’s imports (typically from one country) exceed its exports (to that country.) The idea that a trade deficit justifies a tariff is incredibly flawed, however. Think about it like this: You buy gas for your vehicle from a gas station. What does the gas station buy from you? According to the theory of a trade deficit, the total amount you spend at the gas station represents a “trade deficit” because the gas station (in all likelihood) isn’t buying anything from you. If you are like most people, the same is true of the grocery store, movie theater, and most other places you frequent.

Is this a bad thing? Not at all. On the contrary, attempting to balance your trade with every trading partner would lead to massive inefficiencies and impose all manner of hardship as you sought to trade your particular skills directly to suppliers of the goods and services required to keep you alive.

Instead, you trade your skills to those who need them, accept money in return as an intermediary, and then trade that money to sellers of the goods and services you actually desire. In this way, you maximize your earning potential by focusing on what you do best and obtain the things you need from those whose areas of expertise are different from your own. This idea is known as comparative advantage. If you are good at painting houses and not very good at sewing clothing, it makes sense to spend your time painting houses and using the money you receive for your painting to buy clothing from someone who is better at sewing. This is another way in which a free market increases efficiency.

Imagine if you had to make everything you consumed. Imagine trying to grow your own food, sew your own clothing (from cotton you grew yourself), and build your own house (from trees you cut down). Yes, people did that for centuries, but now imagine trying to do everything required for a comfortable life in the modern age. Can you make a car? A computer? A smartphone? Can you build an air conditioner or perform surgery on yourself?

Why is it that you can enjoy all of these things without knowing how to make or perform most or any of them? The answer is simple. Trade makes all of this possible. Thanks to trade, you can focus on the one thing at which you are the most skilled while still enjoying thousands of other goods and services provided by other people acting according to their comparative advantage.

Economics can be a complicated subject and many people don’t really understand why the economy works the way it does. That’s okay, but learning about economics and economic principles can also be very rewarding because it helps to explain so much about our world and about human behavior. Learning about economics also tends to make one recognize the foolishness of government intervention and central planning. Such interference not only does not improve human wellbeing, it quite literally cannot do so. The efficiency of the free market cannot be improved through taxation or regulation. The imposition of tariffs or mandates cannot get humanity closer to the equilibrium which all of our trades are chasing. The free market may not be perfect (which is ultimately a subjective opinion), but I truly believe it is as close as mankind will ever get to perfection.

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Instead of a US Peace Plan for the Middle East, How about a US Peace Plan for the US?

US Secretary of State Mike Pompeo describes the Trump administration’s plan for peace between Israel and Palestinian Arabs as “unexecutable.” President Trump says Pompeo “may be right.”

Good! As addiction counselors say, the first step is admitting you have a problem.  With addiction, the way out is not “if at first you don’t succeed, try, try again.” It’s admitting that the thing you’re addicted to will never solve your problems and giving up that thing.

The United States suffers from a long-term addiction, since at least the end of World War 2, to trying to run the world.

That addiction has cost American taxpayers trillions of dollars.

It’s cost the lives of hundreds of thousands of Americans and millions of citizens of other countries.

It’s empowered evil regimes to suppress human rights both at home and abroad.

And it has never, ever “worked” in the sense of bringing about lasting peace, any more than booze saves marriages or methamphetamine repairs mental anguish.

In fact, just like booze or methamphetamine, the US addiction to world “leadership” wrecks the lives of everyone around the addict too. Which means that if the US gets its act together, everyone else, not just Americans, will be better off.

Here’s a four-step peace plan that addresses the roots of the problem instead of just unsuccessfully trying to treat the symptoms:

First, the US should shut down its military bases on foreign soil and withdraw its troops from the foreign countries they’re currently operating in.

Second, the US should end economic sanctions on, and extend full diplomatic recognition and trade privileges to, all the countries it’s currently bullying.

Third, the US should end all foreign aid, especially military aid.

Fourth and finally, the US should dramatically decrease its so-called “defense” budget to levels consistent with actual defense.

Cold turkey withdrawal may be out of the question, but the US can and should wean itself off the damaging drug of foreign interventionism.

Let the Arabs and Israelis settle their own hash. Quit taking sides between Saudi Arabia and Iran. Stop pretending North Korea is or ever has been a threat to the United States. Step back and let Venezuelans, Syrians, and Libyans decide who’s going to run Venezuela, Syria, and Libya.

It won’t be easy, but it’s not complicated either. The US can continue drinking itself to death on the poison of foreign meddling, or not. Not is better.

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The ADHD Overdiagnosis Epidemic Is a Schooling Problem, Not a Child One

Childhood exuberance is now a liability. Behaviors that were once accepted as normal, even if mildly irritating to adults, are increasingly viewed as unacceptable and cause for medical intervention. High energy, lack of impulse control, inability to sit still and listen, lack of organizational skills, fidgeting, talking incessantly—these typical childhood qualities were widely tolerated until relatively recently. Today, children with these characteristics are being diagnosed with, and often medicated for, Attention-Deficit/Hyperactivity Disorder (ADHD) at an astonishing rate.

Early Schooling Contributes to Increased Diagnoses

While ADHD may be a real and debilitating ailment for some, the startling upsurge in school-age children being labeled with and medicated for this disorder suggests that something else could be to blame. More research points to schooling, particularly early schooling, as a primary culprit in the ADHD diagnosis epidemic.

Over the last several decades, young people are spending more time in school and school-like activities than ever before. They are playing less and expected to do more at very young ages. When many of us were kids, kindergarten was mellow, playful, and short with few academic expectations. The youngest children are the ones most often caught in the ADHD medical dragnet.Now, 80 percent of teachers expect children to learn to read in kindergarten. It’s not the teachers’ fault. They are responding to national curriculum frameworks and standardized testing requirements that over the past two decades have made schooling more oppressive—particularly for young children.

The youngest children are the ones most often caught in the ADHD medical dragnet. Last fall, Harvard researchers found that early school enrollment was linked to significantly higher rates of ADHD diagnosis. In states with a September 1 school enrollment age cutoff, children who entered school after just turning five in August were 30 percent more likely to be diagnosed with ADHD than children born in September who were about to turn six. Immaturity, not pathology, was the real factor.

The ADHD Fallacy

Marilyn Wedge, author of A Disease Called Childhood: Why ADHD Became An American Epidemic, sounds the alarm on ADHD overdiagnosis. In a Time Magazine article called “The ADHD Fallacy,” she writes:

By nature, young children have a lot of energy. They are impulsive, physically active, have trouble sitting still, and don’t pay attention for very long. Their natural curiosity leads them to blurt out questions, oblivious in their excitement to interrupting others. Yet we expect five- and six-year-old children to sit still and pay attention in classrooms and contain their curiosity. If they don’t, we are quick to diagnose them with ADHD.

According to the US Centers for Disease Control and Prevention (CDC), the percent of very young children (ages two to five) who were diagnosed with ADHD increased by over 50 percent between 2007/2008 and 2011/2012. As of 2016, data show that 9.4 percent of all American children, or over six million kids, had been diagnosed with ADHD, and almost two-thirds of current ADHD-diagnosed children were taking medication for it. A March 2019 report on ADHD by Blue Cross and Blue Shield found that among commercially insured children of all ages, ADHD diagnosis rates increased 30 percent in just eight years.

While the symptoms of ADHD may be troublesome, looking first at the environment, rather than the child, may be an important step toward curbing the ADHD diagnosis epidemic. In his book, ADHD Does Not Exist, Dr. Richard Saul, a Chicago behavioral neurologist, explains that individuals diagnosed with ADHD either have external factors that exacerbate normal symptoms or have some other underlying condition that should be identified and treated. In the latter instance, he finds that once the underlying condition is discovered and treated, the ADHD symptoms usually disappear. In the former instance, changing the environment is a key step toward improvement. This is true for both children and adults with an ADHD diagnosis. Dr. Saul writes:

Like many children who act out because they are not challenged enough in the classroom, adults whose jobs or class work are not personally fulfilling or who don’t engage in a meaningful hobby will understandably become bored, depressed and distracted. In addition, today’s rising standards are pressuring children and adults to perform better and longer at school and at work.

An Environmental Mismatch

Addressing an environmental mismatch for ADHD-diagnosed adults could mean switching one’s job or field of study or pursuing a true passion. Maybe you’re an accountant who wants to be a carpenter or a nurse who wants to be an entrepreneur. For ADHD children, changing the environment could mean removing children from restrictive schooling altogether. As Boston College psychology professor Peter Gray writes:

What does it mean to have ADHD? Basically, it means failure to adapt to the conditions of standard schooling. Most diagnoses of ADHD originate with teachers’ observations.

Jennifer Walenski saw firsthand how transformative removing her ADHD-diagnosed child from standard schooling could be. She shares her family’s journey at The Bus Story and told me:

Our kids were actually in public school originally. Our son also was diagnosed with both ADHD and autism while he was in the school system. And they wanted to medicate him. But we said no. Then we took him and his sister out of school and began homeschooling them. Fast forward several years, he has absolutely no need at all for medication. He is just a normal boy who did not belong in that kind of environment. And most of us don’t. Think about it.

Walenski’s experience echoes that of other parents who removed their ADHD-diagnosed children from standard schooling. In an informal survey analysis, Gray discovered that when ADHD-labeled children left school for homeschooling, most of them no longer needed medication for ADHD symptoms. Their ADHD characteristics often remained but were no longer problematic outside of the conventional classroom.

Self-Directed Learning

Gray’s analysis also revealed that the ADHD-labeled young people who fared best outside of standard schooling were those who were able to learn in a more self-directed way. He found that the

few kids in this sample who were still on ADHD medications during homeschooling seemed to be primarily those whose homeschooling was structured by the parent and modeled after the education one would receive in a conventional school.

Replicating school-at-home can also replicate the problematic behaviors found at school, whereas moving toward unschooling, or self-directed education, can give young people the freedom to flourish.

Ending the ADHD overdiagnosis epidemic depends on a societal reality check where we no longer pathologize normal childhood behaviors. Much ADHD-labeling originates from forced schooling environments with learning and behavioral expectations that are developmentally inappropriate for many children. Freeing young people from restrictive schooling and allowing them to learn and grow through their own self-directed curiosity can lead to happier and healthier families and children.

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The Medical Industry Sucks

It doesn’t have to suck. There’s nothing about medicines and treatments and diagnosis and surgery that needs to suck by nature. It’s pretty awesome stuff.

But the quality of the experience is almost always awful.

The majority of doctors don’t do anything at all. They look at a chart that shows the weights and measurements the nurses took and a few notes on what the patient said. They ask you the same questions again. Maybe they shine a light in your eyes. Then they go away for the same amount of time it takes a cop to write you a ticket – somewhere in that twenty-five to forever minutes range – come back and tell you to buy some pills they looked up on their computer. Two or three redundant ones to be “safe”. They don’t mention side effects. They don’t know anything about them. You ask them what’s in the pills and they don’t really know. The waiter at a local restaurant knows more about what’s in the stuff they sell you than doctors know about what they prescribe. None of this is helpful because you already looked up your symptoms and figured out what pills you wanted on your own. But you couldn’t buy them without the doctor’s royal imprimatur.

That’s about it. That’s what most doctors do most of the time and most of them do that badly.

Of course there are some awesome docs. And there are some awesome advanced procedures and research in medicine. But those are rare. Most of the medical industry is a giant school-like cinder block monstrosity filled with unaccountable government protected rule followers.

The solution is simple, and one that existed long before the modern medical establishment. Get government out of medicine altogether. Start with removing government from medical certification and license. The license laws were implemented with the express intent to restrict the number of doctors and make medical care less accessible and more expensive. Medical costs were too low and insurance was too accessible for the tastes of those who had control over government. So they “fixed” it.

Any time you restrict the supply of labor and make government hoops the only legal way to offer services, you get higher prices and lower quality. From taxi medallions to medical licenses, it’s the same principle at work. Those willing to jump through the hoops get an automatic guaranteed customer base because supply has been so restricted. And licensing is sold to the public as a viable quality control, which of course it isn’t. It’s competition control, and competition is the greatest quality control of all. Protecting low quality providers from competition is a danger to the public. Monopolized medical licensing is a danger to the public.

Insurance requirements and restrictions, subsidies, the FDA, and many more egregious government interventions exacerbate the problem. Most were touted as solutions to the problem originally created by government, and all only make it worse.

It’s a terrible, low-quality, sub-human experience most of the time. Barring big crisis interventions and surgeries which can be life-saving, most treatment is a crappy soup of mediocrity and blind paternalism. Nobody knows what the hell is going on and nobody realizes how much better it could and should be.

So what’s the most likely unexpected angle of innovation and competition? Nobody saw ride-share apps coming and upending taxi cartels. What will upend the medical cartels?

Thinking about it gets me excited.

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Arresting Homebirth Midwives Just Reduces Women’s Birth Choices

After being arrested and charged with practicing medicine without a license last fall, a midwife in upstate New York is wondering whether or not she will go to jail for the work she has done for decades.

Elizabeth Catlin is a beloved certified professional midwife (CPM) who has caught hundreds of babies in the tight-knit community of mostly-Mennonite women near her home. According to a recent in-depth article on her ordeal, the state is cracking down on her actions, which they say are illegal.

Another Tale of Occupational Licensing

New York is one of 19 states that does not recognize the national CPM certification, a private, standards-based, intensive training and certification program for midwives across the country. Instead, New York requires midwives to have state-approved midwifery licenses through a Certified Nurse Midwife (CNM) designation, requiring a nursing degree, specific training, and state registration, or a Certified Midwife (CM) certification that requires a master’s degree and other stipulations.

These state licensing requirements have little to do with safety and a lot to do with bureaucratic special interests and job protectionism. Not only do they threaten the freedom and livelihood of women like Catlin, but these regulations also severely limit women’s birth choices by creating midwife shortages and driving up costs. They also make safe birth choices, like a planned homebirth attended by a trained midwife, much less safe as women choose less qualified providers or opt for an unattended homebirth.

Women choose homebirths and other out-of-hospital births (like those at a birth center) for a wide assortment of reasons. Some want more control over the delivery process, a less rushed or sterile atmosphere, and fewer restrictions while in labor. Some find homebirth fees to be lower than what they would need to pay out-of-pocket for a hospital birth. Others choose homebirth for religious or cultural reasons. Like some women, I chose homebirths for my last two children after negative hospital experiences with my first two.

Homebirth Is Fine for Most Women

Most pregnancies are uncomplicated, and many labors and deliveries, when allowed to progress without intervention, proceed as normal life events and not medical procedures. Recognizing this, Britain’s national health service recommended in 2014 that low-risk women give birth at home or in a birth center rather than in a hospital.

As The New York Times reported,

For these low-risk mothers-to-be, giving birth in a traditional maternity ward increased the chances of surgical intervention and therefore infection, the [British] regulator said.

But midwives remain heavily regulated by, and mostly funded through, the British government’s National Health Service (NHS), creating a severe shortage of available midwives and preventing many women who want a homebirth from having one. Moreover, the few midwives operating independently of the NHS face increasing regulatory pressures that threaten their ability to practice.

Hospitals Are Dangerous

In the US, demand for non-hospital births is increasing, prompted in large part by dismal maternal health outcomes. A sweeping 2018 USA Today investigative report found that the “U.S. is the most dangerous place to give birth in the developed world,” with more than 50,000 women “severely injured” during childbirth each year, and approximately 700 annual maternal deaths.

Many of these adverse outcomes can be linked to the rising rate of C-section deliveries that increase maternal risks associated with surgery and infection. In the US, the C-section rate climbed from 23 percent of births in 2000 to 32 percent of births in 2015. By comparison, the World Health Organization (WHO) suggests that a reasonable C-section rate is about 10-15 percent of all births.

If these adverse maternal health outcomes persist, it’s likely that more women will seek alternatives like out-of-hospital births. That is, as long as state regulators, politicians, and special interest groups don’t continue to take steps like those in New York to criminalize independent midwives and actively limit women’s birth choices.

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Killing the American Meritocracy

The American Dream is under attack like never before—not just the ability to fulfill the dream—but its very concept and history. At the core of the American Dream is the idea of meritocracy. There is no royalty in America, no titles of nobility, no entrenched caste system. You could be born anywhere, to anyone, and still achieve success. It was not just a story. Many real-world examples show exactly this trajectory. Poor children, and sometimes even penniless immigrants, grew up to achieve great success. Some even become titans of industry.

Why then is there such an effort underway to denigrate the idea of meritocracy? It is my belief that those who prefer a centrally planned society to one based on freedom, liberty, and personal achievement are intentionally rewriting history so as to make people believe that so-called “privilege” rather than merit has been the primary factor in achieving success throughout American history. This lie is then combined with the fallacies of communism (such as the labor theory of value and the fixed pie fallacy) in order to bolster the argument for central planning and massive government.

In order to understand the nature of the attacks on our meritocracy, we should start by understanding what a meritocracy is—and what it is not. Some definitions of the word smuggle in the concept of central planning: Merriam-Webster defines it as “a system in which the talented are chosen and moved ahead on the basis of their achievement.” Others try to divorce the concepts of wealth from success: The Cambridge Dictionary defines it as “a social system, society, or organization in which people get success or power because of their abilities, not because of their money or social position.” Neither of these definitions fully explains what meritocracy is as it relates to the American Dream, however, so perhaps a new term is required. I propose we call this the American Meritocracy.

Unlike what some of these other definitions imply, no one is necessarily being selected or moved ahead nor are wealth or social position irrelevant to success. In the American Meritocracy, a free market allows individuals to leverage all of their intelligence, talents, knowledge, wealth, connections, and even luck to get ahead. Those who are successful are correctly regarded as having earned their success, while those who are not successful are rightly considered less ambitious… or worse.

One of the most pernicious fallacies in public discourse today is that someone having wealth represents “inequality” in some meaningful manner. This idea ties in directly with the myth of “privilege” which expands the possible sources of “inequality” to include race, sex, religion, education, and any number of other things depending on who is defining it. The purveyors of the “privilege” doctrine conspicuously fail to explain the myriad success stories involving un-privileged members of society, however; it is as if these achievers do not merit their consideration. They will happily prattle on with anecdotes of the single mother working three jobs while accumulating more credit card debt each month, yet fail to mention the single mothers who save money, start businesses, win awards, and send their kids on to college. If confronted with these inconvenient tales of success, they will hand-wave them away as irrelevant outliers, falling back on statistics that prove little more than that people who are successful tend to be exceptional in many ways.

Behind the fallacy of “privilege” are two fundamental communist doctrines. The first is the labor theory of value, which posits a direct correlation between the value of a good or service and the labor required to produce it. The irrationality of this concept is easily seen in comparing two works of art. Both could be the same size, use the same materials, and take the same amount of time to complete, yet one could be worth millions while the other might be worth little or indeed be judged as truly worthless. The only difference between them is the perceived talent of the artist.

I say “perceived talent” because value is not actually an inherent quality of a good or service. Utility and scarcity may be inherent qualities in some cases, but value is always externally ascribed. Both pieces of art may be one-of-a-kind creations, so they would theoretically have equal scarcity, and both would fill an empty wall with equal aplomb, so again, their utility should be equal. Why then is one worth a million dollars and the other unsold? Because their value (like their beauty) is in the eye of the beholder. Be it because of the identity of the artist or certain ineffable qualities in his work, prospective buyers will ascribe far more value to one piece than to another with little or no regard to the quantity of labor involved in its production.

One could labor for a great many hours digging an unwanted ditch and then labor for hours more refilling it without ever having created any value for anyone. Likewise, one can spend their life in a dead-end job asking if folks “want fries with that?” without ever producing $15 worth of value in an hour. Indeed, with the proliferation of self-serve kiosks with flawless knowledge of ingredients and prices combined with perfect memories and increasing speeds, we may soon see a day when the ability to mumble about the availability of supplemental fries has no marketable value at all.

The second fundamental communist canard that underpins the delusion of “privilege” is the fixed-pie fallacy. Economist Milton Friedman summed up this pervasive error well when we said, “Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” We hear this daily rhetoric expressed as concerns about “income inequality” and the supposedly unfair achievements of the “top 1% wealthy” who are nearly universally regarded with suspicion and envy thanks to the prevalence of this particular fallacy.

Skewed statistics suggest that these “Monopoly Man” caricatures have achieved their wealth by plundering the poor, yet these one-sided figures conveniently ignore that “the poor” are richer than ever before, enjoying far more luxuries and longer lives than their historical counterparts. Yes, the “rich” may enjoy a larger percentage of the pie today, but the pie itself is many times larger—and here’s the kicker—it has grown so much larger primarily because of the investments and contributions of those supposedly “evil” rich folks.

Look at it using simple math. If there is a 10-inch pie and you have two slices, how much pie would you have? Now imagine a 10-foot pie of which you have only one slice. To some people, this would be a tragedy, an unconscionable increase in “pie inequality” because you have just one-eighth of a total pie rather than the one-fourth you had before. But is this a reasonable way to measure things? (For the record, if you had 2 of 8 slices of a 10-inch pie, you would have approximately 19.6 square inches of pie. If you had 1 of 8 slices of a 10-foot pie, you would have 1,413.7 square inches of pie, an increase of 721%.)

While it is certainly true that state intervention has made the free market far less free than it could be, the American Meritocracy is still alive and well. Yes, due to taxes, regulations, and occupational licenses, it is more difficult to achieve success than it would be in a fully free market, but there are still virtually limitless opportunities for anyone who is willing to put in the necessary effort and to make the necessary sacrifices.

It is okay to be poor. Some people do not prioritize wealth creation, and that is their right. The problem is when they start blaming their poverty on other people or on “the rich” or “privilege” or some other external force that they claim is keeping them down. If you are poor in America, it is because you have not put in the effort necessary to become wealthy. This may seem harsh and judgmental, but that does not make it untrue. You can achieve success in the American Meritocracy, and if you do not, it is almost certainly your own fault.

Those whose ultimate goal is the eradication of the free market point to the existence of poverty as evidence that the free market has “failed.” They suggest replacing it with “universal” handouts in the form of fully subsidized education, healthcare, family leave, and even income itself. They imagine that these subsidies can be funded indefinitely by plundering the rich—ignoring that even at its current size, the government would blow through the net worth of the rich in a matter of months. In short, they want to kill the American Meritocracy and replace it with a one-size-fits-all communist utopia where the state controls everything and all the little people live in perfect equality.

Quite the fairy tale, is it not? Without “the rich” to keep growing the pie, the pie will naturally begin to shrink and each person’s “equal share” will shrink too. Add in an ever-expanding population, and the predictable economic contractions will guarantee worse outcomes across the board. Instead of some people living in poverty, everyone will live in poverty, and there will be no system in place to facilitate escaping it.

The American Meritocracy is not perfect due to government intervention, but it is still far superior to the abject failure of central planning that is on full display in Venezuela right now. After all, no one is eating zoo animals to stay alive in America.

The American Dream has always been that anyone could achieve success with enough effort and perseverance. This is still true for almost everyone who lives here. The fact that other people may achieve even more success than you does not diminish your success. Despite the fabricated doctrine of “privilege,” there is no ceiling through which you must break or systemic inequality you must overcome. If you can provide quality goods and services to which buyers ascribe value, you too can achieve success in the American Meritocracy. If you fail, you can blame your parents’ wealth (or lack thereof) your race, your sex, your religion, your education, or your astrological sign, and many people will accept your excuses—I will not.

Success in America is not a lottery, it is earned; and if you do not make the effort necessary to earn it, you do not deserve it. I am sure that holding these views makes me a heretic to the church of statism and a disbeliever in the gospel of privilege, but I make no apologies. Your life is of your own making—now go make it better!

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