Thomas Frank, the Wall Street Journal‘s house liberal columnist and famously the author of What’s the Matter with Kansas?, has a humorless piece today trying to score hits on the so-called Blue Dog Democrats, who have been reluctant to lose their House seats by voting for a health-care bill the public seems to hate. Can’t have Democrats listening to the people after the liberal elite have issued their marching orders, now, can we?
Capitalism is said to be in terrible trouble these days, with the profit motive suffering rampant badmouthing. Entrepreneurs are facing criticism, damnable criticism. And this criticism must stop.
[. . .]
So far have things gone that the editors of the Washington Post, ever vigilant against deteriorating public morals, apparently decided last week that Americans required a strong dose of instruction in the basic principles of their old-time economic religion. Stephen L. Carter, the famous law professor from Yale University, took the pulpit. And from the heights of the Post’s op-ed page, he instructed us to cheer whenever we discovered that someone was making money.
“High profits are excellent news,” he intoned. “The only way a firm can make money is to sell people what they want at a price they are willing to pay.”
Since that’s the one and only way a firm can make a profit — fraud isn’t a problem, I guess, nor are subsidies or cherry-picking or price-fixing or conflicts of interest — profit is a foolproof sign of civic uprightness.
I will give Mr. Frank enough respect to regard this as a work of intellectual dishonesty rather than economic ignorance.
Fraud is not profit. It is theft, no different really than sticking a gun in someone’s stomach and saying, “Your money or your life!” No wealth is created, merely transferred through a process that is illegal. Likewise, price-fixing is not profit either; it is an illegal conspiracy to force people to pay above the market price.
Do corporations and entrepreneurs do these things from time to time? Sure. Welcome to the human race. But guess what: We are all miserable sinners here on planet Earth, including liberals who so disdain money-making (usually while sitting on the porches of their Nantucket summer homes). If a company were to take employee contributions to its pension fund, substitute corporate bonds printed up for the occasion, then call the money that was taken “income,” to improve the apparent profits, that would be fraud. But Lyndon Johnson did exactly that with the Social Security surplus — as has every administration since. What would Mr. Frank call that if not fraud?
Getting together with one’s competitors to decide what price to sell some commodity for is called price-fixing, and people go to jail for it. When a government sets the minimum price of unskilled labor above the market price, however, or the maximum price at which a landlord can rent an apartment below the market price, that too is price-fixing, and no less economically pernicious. But we call it public policy, and I’m sure Mr. Frank approves because politicians and not—ugh!—businessmen do it.
About entrepreneurs, Mr. Frank writes snidely, “If we don’t watch what we say, some warn, the supermen who shoulder the world will soon grow tired of our taunting, will shrug off their burden and walk righteously away, leaving us lesser mortals to stew in our resentment and envy.” Let’s do a thought experiment and suppose that happened: businessmen and entrepreneurs all said the hell with it, let’s go fishing. Suddenly there would be no profits and thus no new wealth created. Exactly where would Mr. Frank and his liberal buddies find the money to carry out their programs? Perhaps from the tort lawyers, who are the second biggest source of funds for the Left in American politics after labor unions. Well, they certainly have plenty of money. Of course, tort lawyers don’t create wealth either. They just exploit a deeply corrupt legal system that is ferociously protected from reform by the Left and use it to transfer wealth from one party to another, taking a large bite out of the proceeds in the process.
I wonder if Mr. Frank would be interested to know that three of the biggest-name tort lawyers in the country, multimillionares all, are now in federal jail for . . . fraud.