I’m always amazed that society learns the major lessons from almost every academic discipline: we know the earth is a sphere, that leeches aren’t the best medical treatment, and that nature and nurture both play a part in who we are. But, luckily for my job security, people easily forget or willingly reject the lessons economics teaches.
I was reminded of this last Thursday doing the Office of Readings; St. Paul says to the Philippians (3:1, using RSV-CE):
Finally, my brethren, rejoice in the Lord. To write the same things to you is not irksome to me, and is safe for you.
I’m certainly no St. Paul (though I’m getting the hair thing down), but I can dimly relate to the experience of relaying the same helpful message numerous times. When you wonder why people don’t listen to St. Paul, at least you can fall back on concupiscence. But why don’t people listen to or believe what economists have to say?
Case in point: The Anchoress uncovers a story about a Swedish lunch lady who made her food a little too tasty. “The municipality has ordered Eriksson to bring it down a notch since other schools do not receive the same calibre of food – and that is ‘unfair.’” The lunch lady in question said “It has been claimed that we have been spoiled and that it’s about time we do as everyone else.”
The Anchoress concludes:
Agreed; socialism seeks to pull in both tails of the bell curve and, in so doing, usually also succeeds in reducing the mean. The reasoning is simple; if income, wealth, or whatever is going to be redistributed from rich to poor, it reduces the incentive to be productive and creative for both rich and poor. Lest you think I’m being purely materialistic and overlooking the spiritual dimension, I’ll point you to the parable of the talents.; does not God want us to use our, well, God-given talents to manifest his glory and generosity? Do I do so sitting on the public dole, or refusing to work in order to avoid high marginal tax rates?
With socialism, excellence is always set aside for shared mediocrity. The idea appears to be that since it’s hard to achieve excellence for everyone, it simply should not be attempted; everyone should be satisfied with something lesser.
The ideas that people respond to incentives and that socialism leads to lower standards of living have been around the world of economics for a few hundred years, so you’d think most people would have learned the lesson by now. They were well-enough known that even a Polish priest in the middle of the twentieth century understood them.
But anyone watching Presidential campaigning knows the lesson hasn’t been spread widely enough. Besides, isn’t the result of socialism a good thing? After all, we’re told that the income gap in the US, bastion of capitalism, is horrible. The distance between rich and poor keeps widening, they say, causing all sorts of social ills. The prevalence of so many “millionaires and billionaires” alongside so many “working poor” is a scandal. (Incidentally, if this keeps happening, the inflation that will result won’t make it very difficult to be a millionaire or billionaire. That graph alone should be enough to sway the election, at least for voters who care about the bill their kids are getting stuck with.)
So there are policies and proposals to help the middle class, to spread prosperity to everyone, to reduce income inequality. As with most political proposals dealing with economics, a good look at data is necessary before we fashion fancy programs to achieve utopian ends:
Yes, the earth is a sphere. Yes, it takes more than phlogiston to make something burn. And yes, even though “the rich get richer and the poor get poorer” makes a nice bumper sticker, the reality is more nuanced and more optimistic for people at all income levels.
But, like St. Paul, I’m prepared to tell everyone this again during the Congressional elections two years down the road.