Thursday, December 1, 2011

Who should own money?

Arthur Blaustein, professor of social policy and community development at UC Berkeley was our guest on our radio talk show “The Fairness Doctrine.” After bemoaning a lack of economic education in America, the progressive professor laid out his economic theory. Intoning age-old clichés, the good professor spoke of the “vast income disparity” between the “top 1%” and the rest of America. He held the “millionaires and billionaires” responsible for high unemployment and poverty. He earnestly spoke of the need for “income redistribution” and called for a fair division of “the pie.”

Yet, with respect, it is Professor Blaustein who needs an economic education. His reference to the “pie” was revealing. Viewing money as a pie is viewing money as a finite commodity and money is neither. Money is not finite but is infinite, as infinite as the human imagination. Money is not a commodity but is an abstract expression of human creativity. Money is evidence of advancement and accomplishment. Money is an abstract storage of value, a means of exchange, and a means of measuring time.

For example, the late CEO of Apple Computer, Steve Jobs, who was one of America’s most successful “billionaires,” was responsible for creating vast sums of money out of nothing. Due to his creativity and his business acumen Jobs created opportunities that resulted in many “millionaires and billionaires” and well as employment for people at all levels. From the high-level executive, those to whom Blaustein snidely criticized as flying in Lear jets, to the store clerk and the line worker, Steve Jobs made things that people wanted and in the process he created wealth and good jobs. Steve Jobs, and other “millionaires and billionaires” are indeed the true American heroes. 

Yet, in Blaustein’s inverted view, Steve Jobs and his fellow creators and controllers of wealth have, due to their success, taken money away from others and are therefore responsible for creating poverty. This is because Blaustein erroneously views money as a finite commodity. In order for Jobs to make billions of dollars, according to this view, money would have to have been taken away from someone else. Brought to its logical conclusion, Jobs would have, according to this approach, stolen the money from others. Therefore, as this logic would have it, those who did nothing to earn this money are entitled to a share of it just by virtue of their relative need. 

Putting aside the appeal to the basest of human emotions, greed and envy, the believer in this economic theory, that money is a finite commodity, feels entitled to a piece of the more successful neighbor’s property just because he doesn’t have it and because he wants it. This has always been the main marketing appeal of those who advocate this particular economic theory. 

Blaustein believes that handing a billion dollars of Steve Job’s money over to the Federal Government would somehow help the poor. He spoke of this in the reverent and rather syrupy tones of a highly moralistic and self-righteous true believer. Does anyone really believe that giving Steve Jobs billions to the Feds would help anyone but the Feds? And who is really served by the stirring up of class hatreds and the scapegoating of successful people? 

Of course regulation is needed to curtail the excesses and corruption of capital and corporations. For example Steve Jobs wrongfully employed cheap labor in “progressive” Communist China. Indeed there is no such thing as unfettered capitalism as a sovereign nation has an obligation to regulate capital in the national interest and in a manner that upholds moral standards. Abuses by multi-national corporations could be addressed, for example, by economic nationalist policies such as tariffs on imports and exports. The US Constitution authorizes Congress to regulate trade for this reason. A self-interested moral society protects workers and the environment. 

Blaustein concluded his discussion on “The Fairness Doctrine” with the assertion that America should be ashamed over the increase in recent decades of the numbers of millionaires and billionaires especially as compared to other nations which he viewed in a more favorable light. I countered by asserting that such a development was a virtue and that President John F. Kennedy had it exactly right when he stated that “a rising tide raises all boats.” Blaustein employs the big lie, one that goes back to antiquity, which is that government control of capital will help people. America itself, the land of private ownership of the means of production, is a contradiction of this lie.  

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