Dinesh D'Souza - America: Imagine a World without Her (28 page)

Another reason centralized government is so inefficient is that it just does not have access to the kind of information to make good decisions that people typically have at the local level. This is an argument made famous by economist Friedrich Hayek, and it has never been refuted. Consider this question: What’s happening right now in New York at Lexington and Fifty-Fourth Street? Obama has no idea, and neither do his bureaucrats in Washington. But the guy who lives across the street, or the fellow selling hot dogs at that intersection, or the company that is considering opening a store there—these people have a much more detailed familiarity with what’s going on. Consequently, they are able to make more informed decisions. Even if bureaucrats could be just as motivated as private sector actors to make wise and cost-effective decisions, they simply don’t have adequate information to do so. The point here is that we need rules and decisions—in that sense, we need to be governed—but we are best governed by a decentralized network of private and state institutions.
Centralized government is simply ill-equipped to make the innumerable decisions that are best left to local people, local businesses, local civic institutions, and local government.

A second critique of government—one that I have previously made in the context of Obamacare—is that it purports to be fostering moral action among citizens while in reality its policies have nothing to do with morality.

My Obamacare argument will illustrate the point. During a recent debate I was asked why, as a Christian, I didn’t support a program that was a fulfillment of our moral duty to be charitable to our neighbors. I responded with an example. Let’s say that you and I are walking along the riverbank and I am eating a sandwich. You tell me you’re hungry, and you demand half my sandwich. I give it to you. Now—I argued—that is a moral transaction all around. I have done a good deed, and can feel good about it. You are grateful, and perhaps someday if you have a sandwich you’d be inclined to share. But let’s now consider a second case. The situation is just the same as before, but this time I refuse to share my sandwich. At this point, Obama himself shows up on a white horse. He dismounts, puts a gun to my head, and says, “Give that guy half your sandwich.” And so I do.

The result—I pointed out—is identical to that in the previous case. In both situations, each of us has half a sandwich. But in the second one, the moral picture is completely different. I have no claim to virtue, because I didn’t part with my sandwich voluntarily; I was forced to do it. You, the recipient, don’t feel grateful; on the contrary, you feel entitled. Perhaps you are thinking, “How come I get only half a sandwich? That greedy selfish guy should have given me the whole sandwich.” Obama’s actions, which seem admirable when performed by the government, would, if he performed them as a private citizen, get him convicted of assault, extortion, and theft. My
example was offered to illustrate how coercive government policies strip the virtue out of every transaction.

None of this is to suggest, of course, that government has no role to play in helping the disadvantaged. There is agreement across the political spectrum that it does. Here the problem with progressivism has to do with its utter inability to identify who the good guys are. Think of society as a bandwagon, with working Americans pulling the bandwagon. A wealthy society can afford to have some of its citizens—presumably those who are unable to pull—sit in the bandwagon. Historically that number was small, but in recent decades it has been growing. The more people who sit in the bandwagon, the harder it is for the rest to pull. Now one might expect a president to praise the people pulling the bandwagon, and thank them for what they are doing for their fellow citizens. Not Obama. He praises the folks sitting in the bandwagon, assuring them that they are the most morally wonderful people in America. Then he castigates the people pulling the bandwagon, accusing them of being greedy, selfish, and materialistic. Through their policies, Obama and the progressives create more incentives to sit in the bandwagon and fewer incentives to keep pulling. Naturally some of the people pulling the bandwagon are going to think, “Gee, maybe I should get in the wagon. It’s so much better than pulling.” So the bandwagon slows down, and at some point it could grind to a halt.

These critiques of government, while telling, have nevertheless not gotten very far. Why not? Because progressives have convinced people that they are fighting theft. If a greedy capitalist has looted your possessions, you would want the government to do something about it. An essential function of government is to bring thieves to justice and to restore stolen possessions to their rightful owners. If the progressive critique is valid, then it doesn’t matter if government does it inefficiently, since there is no one else to do the job: inefficient
justice is better than no justice. Moreover, when we ask the police to go after bad guys and repossess their stolen goods, we aren’t concerned with whether we foster virtue among the “giver” and gratitude in the “receiver.” That’s because the giver isn’t really giving; he’s merely giving back, and the receiver has no cause for gratitude since he (or she) is merely being made whole. In this scenario, Americans who are sitting in the bandwagon have earned that right, and the people pulling are the thieves who deserve to be penalized and castigated. This is why I’ve devoted the bulk of this book to refuting the theft critique. If I’ve succeeded, then the whole progressive argument collapses and our federal government, far from being an instrument of justice, now becomes an instrument of plunder. This term may seem unduly harsh; in the rest of this chapter I intend to show that it is duly harsh.

Let’s consider first the issue of plunder. How does progressive government plunder its citizens? It does so by illicitly transferring wealth from one body of the citizens to another. The mechanisms for doing this are confiscatory taxation, and also regulation and mandates. Taxation is quite obviously a form of “taking” but it’s not so clear how regulation and mandates constitute theft. Imagine if the Obama administration were to say to an American family, “You must rent that extra bedroom in your house for $100 a month.” The market value of that rental is $500 a month. By forcing you to rent for $100 a month, the government is stealing $400 of your money. Similarly when the Obama administration orders businesses to provide this or that benefit, it is basically stealing from the stockholders who have invested in that business.

Illicit taxation is also a form of theft. We are so used to being taxed in this way that we typically don’t recognize this rip-off. So let’s begin with some historical perspective. The core principle of slavery, according to Abraham Lincoln, is “you work, I’ll eat.” In his
Chicago speech of July 10, 1858, Lincoln called it “the same old serpent that says you work and I eat, you toil and I will enjoy the fruits of it.” This, Lincoln said, is not only the essence of slavery; it is the essence of tyranny. It is the same argument “that kings have made for enslaving the people in all the ages of the world.”
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For centuries in Europe, people understood that the very freedom of the serf—the main thing that distinguished serfs from slaves—is that serfs got to keep some of the fruits of their labor. Karl Marx points out that “the peasant serf … worked three days for himself on his own field or the field allotted to him, and the three subsequent days he performed compulsory and gratuitous labor on the estate of his lord.” Marx appreciated the clarity of the system: “here the paid and unpaid part of labor were sensibly separated.”
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So at least the serf could recognize the degree to which he was being ripped off. And the thieves were the lords and aristocrats, who lived off the labor of the serfs. The serfs worked, and they ate.

America’s tax rates, we may recall with some surprise, impose basically the same terms on successful citizens as those imposed on the medieval serf. The top federal tax rate is nearly 40 percent, and when other taxes are piled on, the top rate easily reaches 50 percent. What that means is that half of the labor of these citizens is confiscated up front; another way to look at it is that the first half of the year they work for the government, and only the second half they work for themselves and their families.

Obama and many progressives consider these tax rates unfairly low—they would like to raise them. Obama, with Alinskyite caution, never says how much. But progressive scholars are more specific. Former Treasury Secretary Robert Reich proposes a top marginal tax rate of 55 percent. Economist Richard Wolff nostalgically invokes the period immediately following World War II when the top marginal tax rate was over 90 percent. Wolff says that the rich, in paying
a mere 40 percent currently, have enjoyed a massive “tax cut.” He’d like to see the rates go back up toward 90 percent.
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What this means is that successful people would get to keep 10 percent—10 cents of every dollar they earn. What’s remarkable about this is that if you took away that 10 percent, they’d essentially be reduced to slavery. Slavery is a system based on a 100 percent tax rate.

Now obviously some of this money goes toward providing the necessary and appropriate services of government. These services include defense, the police, the highways, product safety, environmental protection, and basic research. Notice, however, that these are benefits that accrue to all citizens. Everyone benefits from the common defense. The highways are there for everyone to use, even if some choose not to use them. So these activities fall under what the Constitution terms the “general welfare.” Contrast this with government transfer payments from one group of Americans to another. How does this promote the general welfare? Clearly it does not. It constitutes a forcible extortion from one group and an unearned benefit to another.

I acknowledge that we have moral obligations to our fellow citizens that go beyond equal treatment under the laws. Consider Bill Gates, who has a net worth of around $65 billion. Surely Gates can’t spend the bulk of that money, and since there is such a huge surplus, doesn’t he have an ethical duty to the needy people of America and perhaps also the world? Undoubtedly Gates’s billions can help with what government has been doing: fund schools, build roads, bail out banks, send money to Egypt and Israel, and give more people monthly checks. Yes, Gates has an ethical duty, but I believe that he—not the government—should discharge that duty. First, it’s his money and therefore he, not Obama or the U.S. Congress, should decide how much he wants to give away and who that money should go to. Gates may choose to buy mosquito nets for
Africans or sponsor health research, and this is his prerogative. Second, since Gates earned the money he is much more likely to disburse it wisely. It seems that the Gates Foundation has done more good for society than we could entrust Obama to do with comparable resources.

Why is it theft for governments to engage in large-scale wealth redistribution? Recall why people come together to form governments in the first place. According to the early modern philosophers, people enter into a hypothetical “social contract.” They leave the state of nature and enter into society because they want protection from foreign and domestic thugs. This is the primary purpose of government. Yet it is not the only purpose. People together may also assign to government functions that promote the common good. The key feature of the common good, however, is that it benefits all citizens. It does not promote the common good for the state to require the people of the North to pay the mortgage bills of the people in the South. It does not promote the common good for the state to insist that successful people pay other people’s medical bills. We see here why Obamacare is so outrageous. It would be one thing for Obama to urge government subsidies to provide insurance for poor people who can’t afford it. Arguably that benefits the common good because we all benefit from a society with a safety net, a society that provides a minimal floor below which no citizen can fall. Obamacare, however, is not a safety net. Obama’s healthcare law forces all Americans to buy insurance—even people who don’t want it—and it imposes the additional cost of the premiums on Americans who already have insurance and are already paying for their own healthcare. Obamacare is a form of theft.

Progressive taxation is also theft. Of course, it is based on the claim that an earlier theft is being rectified. Absent the earlier theft, there is no legitimate rationale for the government to impose higher
levels of confiscation on some citizens. Indeed, the only truly just form of taxation is proportional taxation. Proportional taxation means that everyone who is eligible to pay income taxes pays at the same rate. Of course the rich pay more, but they pay proportionately more. So above a certain floor, everyone pays a 10 or 15 or 25 percent federal income tax. Not only is proportional taxation consistent with the constitutional purpose of government—to promote the general, and not particular, welfare—but it also establishes a rule of fairness. It doesn’t matter what level of taxation democratic majorities choose, through their elected representatives, as long as that level is imposed on everyone. Right now we have a system where people can happily vote to raise taxes on others while keeping their own taxes the same or even lowering them. The current system is a progressive delight because it encourages envy and promotes state-sponsored theft.

Consider this startling fact. While the top 1 percent of Americans pays more than one-third of all federal income taxes, and the next 9 percent pays another third, the bottom 50 percent of Americans pays no federal income taxes at all. This is grossly unfair. Obama is right about the unfairness of the system. In reality it is unfair to the successful! It is also unfair that so many Americans who are earning money and are not poor nevertheless pay no federal income tax at all. The American Revolution was fought, in part, to advance the principle of “no taxation without representation.” Well, evidently half of the country currently has representation without taxation. This would seem to be a very troubling feature of our democracy, because we want citizens to have a stake in the system. Democracy is about self-government, not about making laws that affect only other people. Yet people who pay nothing into the federal income tax coffer are asked to make judgments about what constitutes a “fair share” for others and for themselves. No wonder that Obama’s
demagoguery falls on so many receptive ears. He is telling people that it is just and proper that they, who contribute nothing into the system, should get more out of it, while others, who contribute a lot, should pay even more. Here’s the formula for Obama’s success: “They work, and you eat.”