Discover Your Economic Worldview with a Single Question

Much of a person’s economic worldview can be understood by answering a simple question:

Do you believe that all men, regardless of actions, behavior or character, are entitled to housing, three meals a day, health care, and retirement security?

You need to answer that question for yourself.  It is important to know the foundations to which your economic philosophy are moored.

As for me?  My answer is a resounding no.  I don’t.  Once a person reaches adulthood (say 18 years old):

  • I believe that if a man is able to work, and chooses not to out of laziness, he should starve to death.
  • I believe if a man is able to learn new skills so he could retrain for a career that pays well, yet he doesn’t (always listing a litany of excuses as to why it is unreasonable to expect him to do so), he should exist on poverty wages.
  • I believe that it is my own – and mine alone – responsibility to save for retirement, study investments and determine the safest and most attractive places to put my money.  If I lose money on a stock or business, it is my fault because I am the one who signed on the dotted line and was ultimately responsible for watching out for my own self interest.
  • I think it is evil to punish productivity and work.  The current regressive nature of the income tax and payroll tax systems are abominations that must be destroyed.  It is much preferable to go to a flat tax that treats everyone fairly and is capped so Congress cannot increase it beyond a certain percentage.  A rebate can be issued to individual families earning less than $35,000 per year or something comparable so it isn’t regressive, effectively transforming it into a cousin of a universal basic income.  Alternatively, we could instead forbid taxation of clothing, food and medical services.  That would achieve much of the same end.

The goal of a free society should be to remove as many obstacles as practically possible in the journey for upward mobility.  For example, I wholeheartedly believe if someone serves in a war on behalf of the nation, their entire college education should be covered and they should be able to qualify for low-rate mortgages to afford their first home.  This allows our military to attract a higher caliber recruit and benefits society in the long-run by providing a better educated work force.

Likewise, I believe that a good, comprehensive K-12 education is a fundamental human right and, even if it weren’t, it would be one of the best economic investments would could make because a better educated workforce is going to give companies higher quality employees to fill the ranks, will lead to a better political system because people will have skills necessary to understand the agenda of both parties better, and makes us more ruthless competitors in the global economy.

But a free society cannot tolerate the belief that everyone is entitled to have a house, a car, a college education and a full stomach regardless of whether or not they earned it.  These things should only belong to those who are willing to work and attain them for myself.  As my dad said a few days ago:

No one has a right to a house or a right to eat.  We have a right to try and attain those things through our own, honest effort by providing goods and services to other people.

After all, the Declaration of Independence does not guarantee happiness.  It guarantees the pursuit of happiness.

The Real Reason I Oppose Such an Economic Worldview

The reason I so vehemently reject the question is the only way we can provide all of the things in the question (housing, etc.) for those who don’t earn it on their own is to take it from more productive members of society.

An engineer shouldn’t be punished for earning more money given the years of schooling he put in to learn his skill.  A doctor shouldn’t be penalized for his high paycheck when he sacrificed a decade of his life to learn how to operate on people’s hearts to save lives.  To take money out of their pocket to give to a 43-year-old guy living in a run down town who has been unemployed for two years and complains about the “lack of jobs” strikes me as deplorable bordering on evil.  It is a perversion of the human incentive system.

I believe that a man should be able to succeed, or fail, on his own.  If I woke up tomorrow and did something stupid, like putting all of my net worth in risky derivatives, and lost everything as a result, went bankrupt, and ended up homeless, it would not be society’s fault, it would not be my parents’ fault, it would not be your fault, and it would not be the fault of the media.  It would be my fault.  Mine and mine alone.  I bear the responsibility of it because I chose, without being prompted or compelled, to engage in a course of action that led to my own destruction.

  • I do agree with your point from a theoretical standpoint: nothing should be given, everything should be earned. However, I don’t always think it translates to real life: the son of a millionaire could make a hundred mistakes in his life and just through the sheer power of money be able to afford more chances, while a poor boy living in the slums of an inner city may make just one mistake and have the rest of his or her life taken away, be in through drugs, prison, or actual death.

    It’s just not a black-and-white issue, which was my main problem with Rand’s Atlas Shrugged. We aren’t all born on an even playing field and have the same opportunities. Someone might work incredibly hard to make a living but never become a rich man, while his neighbor may be able to afford a world-class education and doesn’t necessarily work “hard” but becomes a millionaire.

    From a personal standpoint, I can say that I’m a very lucky person. I was born to a single, alcoholic mother. I could have very easily ended up living a lower-class, poverty-stricken life. But her parents (my grandparents) were willing to take me in and raise me with all the opportunities available to a middle-class child. This has absolutely nothing to do with anything I did. It was all luck, or at the very least, circumstances beyond my control. Of course, I still have to play the cards I was dealt, so to speak, but my point is that I was dealt cards to begin with. Some people are not. (I hope this metaphor makes sense).

    • Joe,

      You are right, the world isn’t black and white. But it isn’t just limited to money. Money is an advantage no different or better than other random probability playing field sets. That is, some people are born with good looks they can leverage to find a modeling job or a sugar daddy. Others are born with high intellects that can let them escape the ghetto and have the trust fund baby work for them. Others can sing so well that people pay them millions to perform. In that sense, it is true someone may work hard and have a fraction of the net worth of someone else who was lazy but inherited a chain of Holiday Inn franchises. But the guy who works hard may be better looking and have a better romantic life.

      One of the major problems with American culture is there tends to be a habit to equate personal self-worth with the size of your bank balance. In my case, if I decided to teach finance at a local community college tomorrow and give away everything I earned, I would still be just as talented and smart as I am right now but a lot of people would consider me less successful than if I had made $100 million and never given anything back to the next generation. It is completely asinine, especially when you consider that it doesn’t follow a linear relationship – that is, a plumber may make $70,000 owning his own business but parents would be prouder, in my cases, if their child went to college instead and made $40,000. It is insane. It is social pressure that I think has to do with breeding patterns (I ordered a book that argues a lot of what people do is really unwittingly an attempt to communicate reproduction fitness, which is why folks come into their own in their 40’s and 50’s once that pressure has subsided).

      Peter Lynch is just as good of an investor as Warren Buffett but he only has $350 million compared to Buffett’s $65 billion. Lynch wanted different things out of life. He wanted to read, and travel, and stop answering to investors. Buffett just wanted to keep painting his picture at Berkshire. It is insane to consider Buffett more successful than Lynch when they can both do anything they want and have total control over their time. It speaks to a certain neurosis in the American psyche.

      So, yes, you and I were very lucky. I was born into a family that loved me, supported me, and told me I could do anything I wanted in my life and they would still adore me, even if it meant selling crepes on the side of the road in France (literally, that was the example they used). They measured my success by how happy I was, not how much money I made. So you are right – cards were dealt and some people who are in prison right now might have been on the Forbes list in other circumstances – but since we can’t control the deck, all we can control is how we respond to the deck. That may make certain things easier or harder. I think what upsets me so much is that so many people in life, recognizing that the cards aren’t even, spend all their time complaining about that fact – which they cannot change – instead of doing something with the cards they were dealt. Hell, look at William Hung! The man had more air time a few years ago than Brad Pitt! He played his hand beautifully and got what he wanted in life.

  • calegp

    When it comes to socialistic views, I seek my favorite quote on the subject in my head.

    “Socialism works great until you run out of other people’s money.”

    • That’s a great quote. It really comes down to the concept called the “tragedy of the commons”. One of my older relatives was complaining about the national deficit but, in the same conversation, upset that Congress wouldn’t increase social security benefits. People don’t understand the connection. I’m working on an article about it.

  • Donna Bayley Lovett

    My answer is also an emphatic NO! No Way! Your last paragraph is awesome, I wish everyone could and would take responsibility for their own actions, instead of blaming others.