The standard narrative in this country is that lefty theories of Big Government serve the poor, and that opponents of Big Government are out to help the rich.
This narrative has it exactly backwards. Big Government protects Big Business while the free market improves the lot of the poor.
Tom Woods recently wrote a wide-ranging response to a speech by a lefty Catholic cardinal. The cardinal had droned on about inequality and Piketty and such nonsense. Woods provides one killer argument after another showing how the free market improves society and helps the poor. Here is one of my favorite passages from Woods’s piece:
The vast majority of the progress that has been made against poverty in the world occurred without violence. The statistics are there for everyone to see: as economic liberalization spread throughout the world, poverty declined. In 1820, 85 percent of the world’s population was living in “extreme poverty.” That had fallen to 50 percent by 1950, 33 percent by the early 1980s, and 18 percent by the beginning of the twenty-first century. As I have explained in The Church and the Market and elsewhere, this is the natural outcome of the extension of the market economy and the division of labor. Shake your fist at reality all you like, but the only way to increase the overall standard of living is to leave the private sector alone to increase the amount of capital per worker.
In the United States, poverty had been falling consistently until the federal government’s war on poverty took shape. But over the past 50 years, that progress has come to a halt: the poverty rate has fallen so negligibly as to be statistically insignificant.
In the United States, the purchasing power of the lowest quintile of income earners increased by 15 to 20 times over the course of the twentieth century. When we look at the figures from 2011, the American poor—not the American public in general, but the American poor—97.8 percent had refrigerators, 96.6 percent had gas or electric stoves, 96.1 percent had televisions, 93.2 percent had microwave ovens, 83 percent had DVR capability, 80.9 percent had cell phones in addition to land lines, and 58.2 percent had computers.
People living in poverty today live better than the kings and queens of several hundred years ago. This did not come about because of government. It happened because of the free market. Government did not invent the light bulb, or give poor people in harsh areas access to climate control. Government did not invent the car, the plane, or the communications devices that spread ideas throughout the globe. The free market did that.
The free market has made it possible for people to do more with less. The free market is why people in the United States do not starve. The free market brought us all the wonders mentioned by Woods, and more.
Meanwhile, Big Business runs to Big Government every time someone comes up with a new innovation, and lobbies government to pass new laws and regulations to protect the existing businesses. Why do you think businesses hire lobbyists? To do away with regulations? In some cases, yes — but in many cases, business actually asks government to enact new regulations that make it hard for newcomers to enter the market.
Again: the standard narrative has this backwards. To some extent, the battle over the size of government is indeed a battle between the 47% and the 1%. But the truth is, the 1% run to government for help, while the free market improves the lot of the 47%.
Proponents of liberty and the free market need to stop acting defensive about their ideas. Liberty and the free market benefit everybody — but they especially benefit the poor.