There are many popular slogans and sentiments of both the "left" and the "right" that remain in vogue despite all reason and evidence. There ideas often sound good at first, and encourage a sense of indignant rage, but they are built on appeals to emotion, bad evidence, and faulty reasoning. I will begin by poking some fun at the Left, but don't get too smug if you lean to the Right. When inspiration strikes, you'll get yours, too.
Elizabeth Warren made an impassioned speech over five years ago, which included a portion that has become a perennial meme trotted out whenever discussions of taxation come up. It was immediately thoroughly debunked by people who actually understand economics, but it will not die.
This sounds good, doesn't it? We all need to pull together, and those greedy bastards are getting rich at your expense! You are owed your fair share! And it's obvious that many people are using political connections to gain wealth through cronyism! But hold on a second. Let's take a deeper look.
"There is nobody in this country who got rich on his own. Nobody."
Correct. Economic production through the division of labor and the process of exchange for mutual benefit is the engine of wealth production. There is nothing fundamentally wrong with this opening sentence. But let's look a bit deeper. There are some individuals who did not gain wealth through the aforementioned productive process. These individuals instead used political plunder to gain wealth, stifle competition, and trespass against the rights of others. However, penalizing and plundering those who work in the productive economy exacerbates rather than rectifies this problem.
"You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for."
Oh boy. Here's where the serious problems begin, and there are a lot of problems packed into this statement.
First, businesses that use highway transportation buy taxed fuel and operate licensed/registered vehicles. They help pay for the roads already, and probably at a higher rate than most.
Second, businesses pay lots of taxes on property, profits, wages, and more, which goes in part to these government programs Warren cites. Meanwhile, is it not the student who benefits from the education spending? In theory, education is what the student is given in order to be worthy of his wages as a productive member of the economy. Why is there the assertion that a company which offers a job (with market wages) to that student also owes extra to the government on top of everything else? If anyone, it is the student who needs to "pay it forward," is it not?
Third, how do we know that any of these government-monopolized, tax-funded services such as education, police, and fire protection actually serve the community satisfactorily? Mandatory purchase of a monopolized good or service cannot be rationally evaluated by the consumer to determine whether they get a good value. The businesses Warren criticizes can only stay in business if they serve their customers in an efficient and effective manner, providing goods and services at a high-enough quality and low-enough price to retain a voluntary clientele. Government is under no such constraint to pursue efficiency and efficacy, so how can any of us know they are doing a good job? This is known in economics as the economic calculation problem.
"You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did."
This relates to the third point above. Many companies also need to hire private security anyway despite paying a disproportionate sum for government police because those government police still don't offer protection from independent marauders. Further, police are a marauding band that threatens to seize everything at factories and homes within their territories. Police enforce many laws that are objectively bad, and demonstrably harm everyone in the community by institutionalizing violations of their rights to life, liberty, property, exchange, and travel. Police are the enforcement arm of the political class, and punish any who resist being plundered.
"Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."
Where is this alleged social contract? As Robert Higgs so eloquently said, "In regard to the so-called social contract, I have often had occasion to protest that I haven't even seen the contract, much less been asked to consent to it. A valid contract requires voluntary offer, acceptance, and consideration. I've never received an offer from my rulers, so I certainly have not accepted one; and rather than consideration, I have received nothing but contempt from the rulers, who, notwithstanding the absence of any agreement, have indubitably threatened me with grave harm in the event that I fail to comply with their edicts."
What right does any third party have to the factory owner's production? Why does Warren believe she is being magnanimous in allowing producers to keep a portion of what they produce? Where does her right to this wealth come from? Warren is also a member of the class of political plunderers. Everything she is paid as a Senator is first taken from the productive economy. There is no consent, only a unilateral demand backed by a threat of violence for noncompliance. Government is a massive mafia, and she is making excuses for racketeering.
Populism is the use of fallacy to sway gullible masses into supporting those who threaten them the most. Don't be gullible. The better it sounds when a politician or pundit says something, the more likely it is you're being sold a bill of goods.
Again, don't get too smug if you favor Republican rhetoric. Your turn is coming. I am open to suggestions if readers have a favorite "Conservative" sentiment that needs to be deconstructed.