A Nation of Peasants?

Victor Davis Hanson

Traditional peasant societies believe in only a limited good. The more your neighbor earns, the less someone else gets. Profits are seen as a sort of theft. They must be either hidden or redistributed. Envy rather than admiration of success reigns. In contrast, Western civilization began with a very different ancient Greek idea of an autonomous citizen, not an indentured serf or subsistence peasant. The small, independent landowner -- if left to his own talents and if his success was protected by, and from, government -- would create new sources of wealth for everyone. The resulting greater bounty for the poor soon trumped their old jealousy of the better off.

Citizens of ancient Greece and Italy soon proved more prosperous and free than either the tribal folk to the north and west, or the imperial subjects to the south and east. The success of later Western civilization in general, and America in particular, is testament to this legacy of the freedom of the individual in the widest political and economic sense

We seem to be forgetting that lately -- though Mao Zedong's redistributive failures in China, or present-day bankrupt Greece, should warn us about what happens when government tries to enforce an equality of result rather than of opportunity.

Even after the failure of statism at the end of the Cold War, the disasters of socialism in Venezuela and Cuba, and the recent financial meltdowns in the European Union, for some reason America is returning to a peasant mentality of a limited good that redistributes wealth rather than creates it. Candidate Obama's "spread the wealth" slip to Joe the Plumber simply was upgraded to President Obama's "I do think at a certain point you've made enough money."

The more his administration castigates insurers, businesses and doctors; raises taxes on the upper income brackets; and creates more regulations, the more those who create wealth are sitting out, neither hiring nor lending. The result is that traditional self-interested profit-makers are locking up trillions of dollars in unspent cash rather than using it to take risks and either lose money due to new red tape or see much of their profit largely confiscated through higher taxes.

No wonder that in such a climate of fear and suspicion, unemployment remains near 10 percent. Deficits chronically exceed $1 trillion per annum. And now the poverty rate has hit a historic high. We are all getting poorer in hopes that a few don't get richer.

The public is seldom told that 1 percent of taxpayers already pay 40 percent of the income taxes collected, while 40 percent of income earners are exempt from federal income tax -- or that present entitlements like Medicare and Social Security are financially unsustainable. Instead, they hear more often that those who managed to scheme to make above $250,000 per year have obligations to the rest of us to give back about 60 percent of what they earn in higher health care and income taxes -- together with payroll and rising state income taxes, and along with increased capital gains and inheritance taxes.

That limited-good mind-set expects that businesses will agree that they now make enough money and so have no need to pursue any more profits at the expense of others. Therefore, they will gladly still hire the unemployed and buy new equipment -- as they pay higher health care or income taxes to a government that knows far better how to redistribute their income to the more needy or deserving.

This peasant approach to commerce also assumes that businesses either cannot understand administration signals or can do nothing about them. So who cares that in the Chrysler bankruptcy settlement, quite arbitrarily the government put the unions in front of the legally entitled lenders?

Health insurers should not mind that Health and Human Services Secretary Kathleen Sebelius just warned them to keep their profits down and their mouths shut -- or face exclusion from health care markets.

I suppose that no corporation should worry that the government arbitrarily announced -- without benefit a law or court ruling -- that it wanted BP to put up $20 billion in cleanup costs for the Gulf spill.

What optimistic Americans used to call a rising tide that lifts all boats is now once again derided as trickle-down economics. In other words, a newly peasant-minded America is willing to become collectively poorer so that some will not become wealthier.

The present economy suggests that it is surely getting its wish.