Commentary Magazine


The Ever-So-Convenient Myth

In an interesting article on the real reason behind ObamaCare — wealth redistribution — in today’s Washington Examiner, Byron York quotes Senator Max Baucus.

Health reform is “an income shift,” Democratic Sen. Max Baucus said on March 25. “It is a shift, a leveling, to help lower income, middle income Americans.”

In his halting, jumbled style, Baucus explained that in recent years “the mal-distribution of income in America has gone up way too much, the wealthy are getting way, way too wealthy, and the middle income class is left behind.” The new health-care legislation, Baucus promised, “will have the effect of addressing that mal-distribution of income in America.”

York quotes several others, including Howard Dean, to the same effect. This opinion, nearly universal on the Left, is implicitly based on one of the oldest, biggest, and dumbest fallacies in economics: that an economy is a zero-sum game, that for someone to get richer, some — or many — have to get poorer. Poker is a zero-sum game. So is robbery, which is why it’s illegal. And Honoré de Balzac is widely but incorrectly supposed to have said that “Behind every great fortune is a great crime.” Well, Paul McCartney was born into a poor family in rundown Liverpool and is now one of the richest men in England. Whom, exactly, did he rob?

The rich have certainly been getting richer in the last thirty years. In 1982 it took a measly $80 million or so to make it onto the Forbes 400 List. Today it takes over a billion. But this is an artifact not of crime but of the technological revolution the world is undergoing, thanks to the microprocessor. Every major technological development has produced an inflorescence of fortune making. The Industrial Revolution produced so many new rich that Benjamin Disraeli had to coin the word millionaire in 1827 to describe them. Railroads, steel, oil, automobiles, the movies, television, all produced prodigious new fortunes.

But the people who rode the railroads and automobiles, watched the movies and television didn’t get poorer by doing so. Just like the millions who so willingly bought Paul McCartney’s music, they got richer too. They had quicker, cheaper transportation, and better and cheaper entertainment. No one forced them to buy the product, which is a good deal more than can be said for ObamaCare.

As the rich got richer, of course, their tax bills got bigger, a lot bigger, and both the federal tax revenues and the percentage of those revenues paid by the top ten percent and, especially, the top one percent, have been growing swiftly. But as long as the Left clings to the ever-so-convenient myth of the zero-sum economy, that isn’t enough.