Economic Ignorance in Politics

Why are political progressives so ignorant of economics? A case in point is given us by Massachusetts U.S. Senate candidate Elizabeth Warren. A sample of her ignorance is demonstrated in the recent well publicized remarks concerning wealth and taxes. Miss Warren remarked to supporters

“There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

She is accurate to say that much of what we individually accomplish is the result in living in our civil society. That social contract enables us to produce. Man is by nature a social animal. But the Senatorial candidate postulates that because of these societal benefits somehow the productive in our culture do not contribute enough. She offers no proof that producers are currently paying too little. Where in our social contract does it say that producers should surrender, by threat of government violence, a hunk of their income? Sheldon Richman writing in The Freeman discusses this idea of paying forward:

“…why aren’t honest production and exchange of valuable goods counted as payment forward? Just as our living standard is the fruit of previous generations’ production, so today’s producers help to raise the living standard of the next generations.”

Political progressives (they are not liberals) have hailed Miss Warren’s comments as testament for higher taxes. However, while starting with a valid premise she ends with an invalid conclusion. I suggest progressives read a more thorough examination of the production concept in Leonard Read’s 1958 essay “I, Pencil”. http://www.econlib.org/library/Essays/rdPncl1.html

Mr. Read states wealth production in terms even today’s political progressives might understand. But then, if such understanding were achieved, talking points based on false conclusions would be lost by the left.