There are two competing views of the world that can explain most of the political opinions in the United States. The statist view is that the government is responsible for directing the whole society towards the good so it has to enact and enforce rules to direct the society. The libertarian view, on the other hand, is that the individuals should be left free to live their lives and use their property to meet their own goals provided that they don’t commit aggression towards other people.
The statists define the good in an egalitarian fashion to mean the state of affairs that provide similar outcomes for all. They ignore the fact that outcomes are defined mostly by the inputs and efforts used to achieve them and that people have different abilities and resources so they cannot reach similar outcomes. For example, statists decry income variations as unfair and advocate policies and rules to redistribute income from people who made more to people who made less. Some of the statist policies to achieve what they see as fairer income distribution are the welfare state, progressive income tax, and affirmative action. In spite of over 100 years of progressive income taxes, over 50 years of the welfare state, and over 40 years of affirmative action no fundamental change happened. People who have more human capital such as education and skills make much more money than people who no or less human capital, people on welfare remain on welfare and rarely move out of government dole, and people who have stable families and belong to cultures that believe in hard work and driving for results achieve better education outcome. The main reason that statists fail to achieve any of their goals is that equality is not the natural state of the world, people have different skills, cultures and resources and that cause different outcomes and nothing can change that. You can place anyone in a high-quality university but unless that person developed the right skills he or she cannot graduate with the same grades and education as someone who did. You can use force to take money from a successful person and give it to someone who doesn’t have the work skills and doesn’t want to change and that person will remain on welfare forever.
The libertarians don’t believe that any outcomes should be forced on the society and that the individuals are free as long as they don’t commit aggression against anyone else. They don’t see inequality as a problem as long as it didn’t result from the use force. In that worldview, people are liable for the consequences of their actions and the role of the law and the courts is to stop anyone who uses force against someone’s person or property. People will get the reward the market allocates to them based on the value they provide and people who cannot contribute because of disability will be helped by family, friends, and charity.
The statist worldview depends on the arrogant assumption that government bureaucrats can manage people lives, care for their well being and provide for their children better than they can do for themselves. This world view ignores the fact that these bureaucrats are also people who have their own biases and prejudices and do what they do for their own benefit. The failures of statist solutions are numerous and well documented in the United States such as the new deal, the great society, and Obamacare but these failed programs never get canceled because they serve the needs of politicians to maintain a voter base of government dependent people.
The next time you hear a politician claim that he or she wants to help the people by creating a government-run solution know that he or she wants to help himself or herself get elected.
Recently I read this news story on Reuters: U.S. Supreme Court rejects Michigan straight-ticket voting appeal. Straight-ticket voting is having the option on the top of the ticket to vote for all candidates from one party instead of casting an individual vote for each office on the ticket. A Judge suspended the law pending litigation and the state tried to appeal this injunction to both the appeals court and the supreme court and both rejected it. Opponents of the law claim that the law aims to reduce minorities turn out which hurt the democratic party.
This story is one of many recent stories about voting rights where a certain measure aiming to regulate voting is rejected or blocked by courts because it may reduce the minorities turn out.
These stories show how little these people who claim to defend minorities actually think of minorities. If you believe what these people claim about minorities you will think that minority people are victims who cannot obtain driver licenses, cannot read the ballot and make decisions about candidates and cannot show up on election day to vote so we need to let them vote from home and give them weeks in advance to cast their ballots.
Racism in the United States started as an excuse for slavery. Slavery proponents who wanted to make slavery look legitimate created a lot of literature to say black people are inferior to whites and cannot live independently without a white master to take care of them and explained slavery based on that as an institution to help black people. Unfortunately, the modern black and minorities defendants use the same logic of slavery proponents to explain their policies that aim to make minorities dependent on the government. It is sad to see a majority of the black population in the United States fall victims to these racist ideas that aim to keep them as loyal subjects of the Democratic party machine, the same party that supported slavery, created Jim Crew laws and instituted segregation.
Many white people as well believe that they have a moral obligation to support these racist ideas as a payback for the sin of slavery. But it’s important to realize that slavery didn’t start with blacks. European used to enslave other Europeans, Asians used to take other Asians as slaves and Africans used to take other Africans as slaves. The Europeans taking Africans as slaves is a late development of the 17th and 18th century and African slaves were sold to Europeans by African and Arab slave traders in exchange for European goods such as Guns. People who were slaves and people who enslaved them died generations ago so no one living now is directly affected by slavery. Many immigrants from the Carribean, latin America, and Asia arrived in the United States in the twentieth century with little education and skills and major language barrier but succeeded over a couple of generations to achieve high social and economic status without help from anyone.
Enacting discriminatory policies such as affirmative action and racial quotas is not needed. These policies usually have reverse effect because people will view the success of any minority person as an outcome of such policies instead of merit based success. These policies only serve the needs of opportunist politicians who want to keep the minority population as loyal subjects and guaranteed votes.
- Thomas Sowell’s Black Rednecks & White Liberals provides an interesting study about race in the United States.
- George F. Will: The slow decline of America since LBJ launched the Great Society
People start businesses to provide products or services to their customers in exchange for set prices. The price for any product or service is selected by the business owners to provide good value for their customers while providing the owners with enough profit to compensate them for the effort of running that business. Price should be higher than the cost of production but lower than the value customers get from using the product or the service.
Business tax is a cost and when any of the costs of production rises the business has to adjust to the rising cost by either cutting other costs, raising prices or accepting lower profits. Lower profits may drive businesses to close especially newer businesses that still have loans to pay and accordingly too sensitive to any profit loss. Raising prices may cause businesses to lose market share and lose profit when their customers move to cheaper alternatives. So, in reality, the only option that businesses have is to cut their costs to stay profitable and competitive.
A business can cut costs by reducing the costs of labor through relocating some or all of its operations to a foreign nation with lower labor and regulatory costs. It can also cut costs by using different suppliers who produce their products overseas with lower costs and offer lower prices accordingly. Another way to cut costs is to invest capital to automate more processes which reduces production costs.
So the real victims of high business taxes are workers who cannot move to different countries to keep their jobs and end up unemployed. As the Tax Foundation explains in a recent post, labor is the least mobile factor in production so it gets harmed the most by higher taxes.
Regulation is also a type of tax and over the last 30 years, taxes and regulations took a major toll on the American manufacturing jobs. The following diagram shows the growth of manufacturing industrial production in the United States over the past 30 years vs. the drop in manufacturing jobs. The graph uses 1986 as a reference year with value 100:
The diagram shows that the manufacturing output has almost doubled over the last 30 years while the number of manufacturing jobs is about 70% of the level at 1986. What happened over the past 30 years is a combination of all the cost reduction factors outlined earlier. Manufacturing of products such as clothes and small electronics moved overseas to use cheaper labor while the production of higher value products such as cars and industrial equipments became more automated.
Business taxes don’t redistribute the wealth or create a better society, they punish workers and kill their jobs. So when a politician claims that business taxes and regulations are good for the economy, remember all the manufacturing jobs lost in the United States and vote against him or her.