In his book The Character of Nations, Angelo Codevilla asks an interesting question: exactly what is "prosperity"? And, once it is defined properly, how can nations achieve and maintain prosperity?
Macro-economists and some politicians favour quantitative answers to the question. Prosperity is a matter of Gross Domestic Product or some other quantitative measure of production. Other politicians favour answers related to the quality of life and (these days) an egalitarian twist: wealth--and the quality of life which it enables--cannot be disparate. There must be little or no gap between the wealthy and the poor. To such folk, prosperity exists when everyone's socio-economic circumstances are pretty much the same.
Prosperity, then, largely is a matter of what lies between our two ears. That is, prosperity is a matter of what people consider valuable, or of value. John Kenneth Galbraith--the famous Harvard economist--considered the Soviet Union a truly prosperous society. With his elitist set of values, Galbraith had walked the streets of Soviet cities and found there a vibrant, prosperous society. Why? Soviet towns were festooned with images, sculptures, and grand buildings--you know, the kind of things which impress those who think such things are of great value.
Galbraith, remember, had long chastised American society for "public squalor amidst private wealth". Galbraith called American life squalid because he did not think that the things that Americans do with their time and energy are particularly worthy. On the other hand, because he had higher esteem for the things that the Soviet regime directed its citizens to do with their time and energy, he deemed their undeniable relative privations as a kind of uncomplicated virtue. [Angelo Codevilla, The Character of Nations: How Politics Makes and Breaks Prosperity, Family and Civility, (New York: Basic Books, 1997), p. 105.]In other words, Galbraith looked at the Soviet Union and because of his world-view and value prism, he deemed that country to be prosperous. But as he looked at his own (the United States) he deemed it to be a squalid, impoverished nation.
Prosperity, argues Codevilla, is neither money nor things. If it were, Saudi Arabia, Kuwait, Bahrain, and Brunei would be the world's most prosperous and rich peoples. Yet while there are extravagantly wealthy elites in these countries, grinding poverty is the order of the day for the bulk of the population. The notion that such countries are prosperous and wealthy is a nonsense. "Thus, when we speak of prosperity, it behooves us to remember there are many ways of being rich and different distributions of wealth." [Ibid., p. 104.]
So the question remains, what is prosperity? Codevilla suggests that the details of economic policy and the disparity between rich and poor are diversions that can deceive. A prosperous society, in his view, will have, firstly, a population that is "habituated to property rights and the rule of law."
First, laws about property must be stable, transparent, and equally enforced. People will work harder and more efficiently, so goes the argument, to the extent that they are not deprived of the fruits of their labors by gangsters, arbitrary officials, or high taxes. Second, there must be a currency whose value is constant or, at any rate, predictable. Third, there must be equal access to the market--meaning that tariffs on imported goods must be both law and equal among products, that the government will not otherwise interfere with prices and wages, and that it will not play favorites among people and businesses. [Codevilla, p. 103f.]The implication is that if a nation or society has these characteristics and attributes it is (and will increasingly become) prosperous. But--and here is the big qualification: Codevilla points out that these characteristics cannot be established and maintained by some executive fiat or some law of parliament. "They are themselves a fragile set of beliefs and habits." [Ibid., p.104]
We have just witnessed Donald Trump being elected to the Presidency of the United States. His campaign slogan was (and remains) that he would make America great again. One hazards a guess that what he really means is that he would make America prosperous again.
But, we would say, were we a flea in his ear: to be prosperous your country must extol and defend the disciplines, beliefs and characteristics that make nations prosperous. Giving special deals to this company or that--such as Carrier--are inimical to, and destructive of, true prosperity. They are as wide of the mark as the arrogant elitism of John Kenneth Galbraith.
Be warned Mr President-elect.