Given the drive by influential political action group MoveOn.org to help “every American” see this quote by Senate hopeful Elizabeth Warren, it isn’t surprising that I’ve seen it cropping up on Facebook and Twitter quite a bit lately. In case you haven’t already seen it, here it is (source):
It’s easy to see why this quote has become so popular among political progressives. For those inclined to favor higher tax rates for higher wage earners, this line of reasoning sounds like the ultimate “gotcha” for their economically conservative foes.
Much of what she says here is true, after all. Our economy does rely on interdependence. No one does get rich totally on their own. We are blessed to live in a country with access to good roads, and without danger from “marauding bands”.
But there are also some major flaws in her logic; some of them are subtle, while others ought to be blatantly obvious, even to those who are predisposed to agree with her conclusions. Let’s start with the easy ones.
Yes, we all pay for roads, as well as police and fire departments. Yes, those who “built a factory out there” require these roads to move their products to market, and benefit from the protection of “police forces and fire forces”.
Here’s the thing, though. Every citizen of this country has, by virtue of citizenship, equal access to these services. The guy who didn’t build a factory has the same access as the guy who did… but only one of them actually built the factory. What is it about the existence of public services that entitles the guy who hasn’t capitalized on the access to those services to a share of the profits from the guy who has?
It would be one thing if everyone had paid an equal share of the cost of public services, but that’s not the case. Under nearly every type of tax code imaginable — including the progressive income tax favored by Ms. Warren, and the “fair tax” advocated by many conservatives — the guy with the factory is paying a much larger share of the cost of those services. If anything, it seems that those of us who reap the benefits of public services while paying very little for them ought to be thankful for the successful folks who provide them for us!
Just think of the outrage that would be provoked if those who pay the bulk of the cost of our roads and emergency services began demanding that access to those services be proportional to what one has paid for them! But they don’t do that. In fact, most very successful businesses do employ their own private security forces (though Warren says they “didn’t have to”) because the protection they receive from public police forces is often not sufficient.
Warren includes education alongside roads and emergency services as something which entitles the public to a larger share of the proceeds from private ventures, but are those things all truly equal? Unlike fire and police forces and public services, not everyone partakes of government education (though we all have to pay for it). The work force includes those educated privately, as well as those educated in foreign countries. The guy with the factory can (for now) hire whoever he wants (though he can’t pay them whatever he wants). Now, if public education produces the very best workers available for the best jobs, then those educated with tax dollars will earn their “fair share” on the merits of their desirability in the work force. If that’s not happening, then maybe we aren’t getting what we’re paying for with our education tax dollars…
I find it a bit ironic that Ms. Warren uses the lack of marauding bands as a reason the factory owner ought to pay even more taxes than he already does. What is her description of a “marauding band”, I wonder? From her usage, it would seem that such a group would consist of a number of people who hadn’t worked in the factory showing up at the factory and telling the factory owner that he had no choice but to give them what he had worked for.
Does it make a difference if that group is called the Internal Revenue “Service”?
The Great Unspoken
Now we come to the largest problem in Ms. Warren’s statement. Her whole argument seems to hinge on “the underlying social contract”. But what is this contract? She doesn’t say.
Of course, it is possible that she is referring to Social Contract Theory, which does, to an extent, underlie much of the writing in our nation’s founding documents; most notably John Locke’s thoughts on Natural Law influencing the Declaration of Independence. But I think she would be hard-pressed to show that Locke (or America’s Founding Fathers) had in mind anything close to the level of government interference and taxation that Warren envisions when contemplating this theory.
If Warren’s “underlying social contract” means — as it seems to — that all citizens are entitled to a share of the benefits of others’ labor, then she is guilty of circular reasoning. She assumes the point she is trying to prove.
For all her talk of clarity, she has really said nothing. We are back where we started. Those who share her prior assumptions about politics and economics are certain she’s said something impressive, but there is nothing at all constructive in this “must-see” quote. To pass it around the Internet as if it will suddenly convince “every American” of the validity of the progressive income tax is simply naïve.
But what else should we expect from the folks at MoveOn?