It's Not Fair

Economic Ignorance and Moral Turpitude

In his book, Fairness and Freedom, David Fischer makes some observations which represent a touchstone for truth and error in economics.  Fischer has written a historical comparison of New Zealand and the United States.  The latter nation has focused over time upon political and social freedom (from government rules, regulations, and controls) whilst New Zealand has been shaped by notions of fairness (which implies egalitarian distribution at least of opportunity, if not actual goods). 

We will endeavour to critique Fischer's book in a future post, but for the moment consider this partly insightful, yet misguided quotation:

Where [economic] growth is positive, and material limits are less constraining, it seems reasonable to believe that one person can become rich and prosperous without impoverishing another.  On that assumption, American ideas of liberty and freedom, especially freedom of opportunity, became plausible ways of achieving fairness and natural justice.  Not all Americans share that way of thinking, but many do so--especially those who have been successful in their own lives. 

The great majority of Americans strongly oppose policies of wealth distribution.  When the Democratic Party nominated Senator George McGovern for president in 1972, he campaigned in part for the redistribution of wealth in the United States.  Most Americans--white collar and blue collar, rich and poor--rejected the idea out of hand.  Even people of very modest means condemned it as unjust to hard workers. . . . Americans don't dream of equality.  They dream of wealth.  They don't want to get even; they want to get ahead.  And they deeply believe that in this dynamic society one person can become a millionaire without beggaring another. 

In New Zealand, attitudes are very different.  The land was taken long ago.  Within two generations of settlement, a growing nation began to run up against its physical limits.  In such a setting, most ideals of social justice could not be realised simply by freedom of opportunity.  They required intervention, planning, and even the redistribution of limited resources and material possession such as land.  New Zealanders began to act on this assumption as early as 1890.  [David Fischer, Fairness and Freedom: A History of Two Open Societies, New Zealand and the United States (New York: Oxford University Press, 2012), p. 149f.]

Fischer's description of New Zealand physical limitations is laughable.  What on earth does he mean when he says, "the land was taken long ago" and that "within two generations of settlement, a growing nation began to run up against its physical limits"?  New Zealand is a small geographical landmass to be sure.  Yet its population is only four and a half million people today.  Agricultural pasture comprises just 40 percent of the land area; urban areas comprise less than 1 percent!  If New Zealand were to have the population density of Java, it would support over eighty million people.   [Ministry for the Environment Report]  What Fischer ought to have said is that by 1860 New Zealand reached its physical limits, given the economic paradigm of the time--a very different, but more accurate and meaningful proposition.Yet we also suspect that Fischer is right on the nose insofar as people in New Zealand thought back then they had reached the physical limits of resources, as they do to this day.  Malthus was alive and well back then, as he is today.  But this is a very different proposition to what Fischer is espousing.

In New Zealand it is actually widely believed that one can only get ahead economically by beggaring one's neighbour.  In the United States it is still believed (though not now by the majority of the population, one ventures to suggest) that one can get wealthy and benefit one's neighbour at the same time.   Further, the even more insightful have pointed out that in a free society one most likely becomes wealthy because of the benefit provided to one's neighbour.  Why would people purchase or desire what we manufacture or provide?  Only if we put their interests above our own and serve them by offering them what they consider to be appropriate, desirable, and needed goods and services at affordable prices. 

Secondly, a suppressed premise of the physical limits theory of economic development is actually false.  We now know that all created material existence is actually nothing more than tiny swirling balls of energy in empty space. (Recall that an atom--and thus, all material reality--consists of 99.999 percent empty space).  All of it.  Energy, not matter, is the staff of material existence and to all practical matters without limit.  It is in practice infinite, although not in absolute reality.  Thus, the economic future and growth of New Zealand is not limited because we are a small country at the bottom of the world.  The economic future is wide open, as the potentialities of limitless energy are discovered and harnessed and exploited.  There are no final limits to economic growth and development. 

New Zealand's penchant for socialism without doctrines, for restrictions upon economic growth, for government intervention and planning, and the systemic forced redistribution of  property is built on a fallacy--a mistake.  But, worse, it is built upon ethical evils and immoral foundations.  Covetousness and theft--the twin motivations of "fairness" when seen as economic and material equalisation--are as evil as murder and rape.  That's why they both appear in the Ten Commandments. 

But why is it that New Zealand rightly perceives murder and child abuse as grossly evil, whilst shrugging shoulders at institutionalised, legally sanctioned, covetousness and theft?  Because of the prevailing Malthusian falsehoods that the economic pie is fixed, finite, and limited and that when one eats at the pie, others go hungry.  That's why most New Zealanders think that forced redistribution of property is justifiable.  It is a small evil to combat a bigger evil.  That's why the country is besotted with who is eating what from the pie, rather than upon the ethical ways to make the pie bigger. 

The geographic smallness of the country provides an illusory corroboration to the myth of a small, limited pie.  Fundamental ignorance of the nature of material existence is another.  But the root cause lies in the rejection of God and His holy law.  If we were a nation that predominantly lived in the fear of God, covetousness and institutionalised theft would be as odious to us as the grossest crimes.   Instead, we view it as a crowning glory.  We give it euphemistic names, like fairness.