Why the Founders’ math doesn’t add up

Posted on February 7, 2012 by

I’d like to take a minute to respond to a criticism of my economic views, specifically that the gross economic inequality in America is… well… gross, and that the mentality underlying the public acceptance of this inequality is a direct result of the conquistador system upon which the country was built — all the way back to the Pilgrims.

There have always been large income disparities here, with the post-WWII era a statistical anomaly brought about by the shortage of male workers after the war, which temporarily inflated their wages. The level we see now is historically normative, just as it was in Western European countries with their feudal systems.

The US was originally a sort of penal colony for England, similar to the later situation in Australia. Although we have a native aristocracy, once you add together the slaves, indentured servants, transported criminals, and half-starved immigrants, you can imagine what this country was actually like. This never lead to nationwide discontent or class warfare here (until now, at least) because America was such a big place that they kept opening up new land and new industries, and people would move to that new place and “make their own fortune”.

This lead to the myth of the American Dream, or the idea that pretty much anybody could “make it” if they just worked hard and pulled themselves up by their own bootstraps. Most other countries — specifically the Western and Central European ones I am familiar with — are simply too crowded to be able to buy the poor off in this manner anymore (although the histories suggest that they did the same back when Europe was more sparsely populated — such as with the settling of Eastern Germany in the Middle Ages), so they created the welfare state. Because Europeans aren’t raised on the same myth they have less faith in their bootstraps, despite the fact that their countries have higher social mobility than America does.

Shorter bars imply higher social mobility.

Economic mobility is increased by economic equality because sometimes you need to hand people bootstraps to pull themselves up on. This is called a “welfare state”. America (and Britain) got away with a relatively small welfare state because they were so successful for so long in stealing bootstraps from other people to hand out to their own citizens. Nice work if you can get it.

Without the welfare state there would have been war or the establishment of communism. People who think the welfare state is communism don’t actually know any real communists. America didn’t begin to adopt the welfare state during the Great Depression because they were turning into communists, but because they’d run out of land to give away and the economy was slowing down, and they simply couldn’t think of anything else to keep the poor from rioting in the street (until they flattened their economic competition in WWII, of course).

They began to dismantle that same welfare state when the economy picked back up again at a roaring pace in the 1990s (through the debt-financing and creative accounting of the Fed) and unproductive workers could be afforded. At that point America shifted to a system that is mostly workfare (you work for a pittance and the government tops up your wages to a living wage). The majority of Americans are now part of that system, usually through income redistribution disguised in the tax system.

One common American refrain is that the people who use the welfare system (i.e. the majority of Americans) are “entitled”, and that if we could all just get back to our Founding Principles people would regain their “work ethic” and everything would be swell again, but this is an attempt to rewrite political and economic history. The founders stole an entire continent! What is more entitled than thinking you can just march onto someone else’s property, shoot them, and take their stuff? Tell me another story. One that doesn’t involve divvying up the spoils of colonization to pacify your underlings.

You aren’t going to hear me wax lyrical about how the Nazis were really great people who gave us the Autobahn. The Nazis were awful. They did what they did because they figured (correctly) that their impoverished citizens could increase their wealth by stealing their neighbors’ stuff. The Founders were awful too, and they tried the same path to prosperity. But — unlike with the Germans — the Founders won the war and succeeded in their attempt, so their descendants got to write the history books. In Germany, the descendants had to apologize. Tough break. (Yes, I just compared the sainted Founders to Nazis and the comparison is entirely apt. Get over it.)

Founders Math doesn’t add up. Everybody doing for themselves only works in a rapidly and constantly expanding territory. It’s incredibly inefficient and consumptive, which is why the US burns through enormous amounts of resources to sustain its proportionally small population. The US expanded so rapidly that it had to import people just to fill the land that it had conquered, otherwise the land just lay fallow and risked being reclaimed by the previous inhabitants. They stole land faster than they could hand it out. Think about that for a minute, and what it says about the Founders’ moral corruption. Those people were not especially evil, but they were also not the minor deities some Americans claim them to be. Their economic ideas were not revolutionary — they were colonial.

America is a colony that broke off from its mother empire, and then turned around and became an empire itself. This was  very predictable. This is how people behave since the Fall, and Christians generally don’t seem any more immune to the habit than anyone else. The problem (other than the moral argument, as that doesn’t really sway anyone) is that this doesn’t work very well now. Colonization is no longer what it once was because the Earth is simply running out of places to plunder and is increasingly populated by people who can shoot back. With nuclear weapons, if need be. The system was always awful, but now it’s broken as well.

We need new ideas now. We need techniques that help us to live well on less and ensure basic provision for all, while protecting property rights and allowing for innovation and improvement. We need frugality, wisdom, morality, community, and faith, not simply a return to the colonial economic policies of constant expansion and violent plunder hidden behind a pious exterior of individualism.

The Founders Movement is a type of libertarian romanticism founded upon economic illiteracy and patriotic propaganda. Yes, the Bible says that those who are too lazy to work shouldn’t eat. But the corollary stands: those who work or who are unable to work should eat. The poor will always be with us. We can argue about whether those who struggle to feed themselves should be fed through public or private means, and the efficiency and morality of the various systems, but the fact stands that they must be fed and that the Founder’s system is the wrong way to feed them. It was always the wrong way to feed them.

It was always wrong.