How To Be Progressive

To be a liberal, a socialist or a progressive is relatively easy.  It requires no investment of time, money or skill.  Just a feeling of goodwill for your fellow humans.  Everyone has those, so there is little new value added.

The key is to insinuate yourself into the middle of a transaction where one person is harmed and another helped.  Once in the middle you can claim credit for the helping and can ignore the harming.

Several years ago a future son-in-law was a rower in the annual Head of the Trent competition.  It was cold and windy and my daughter had not prepared adequately for the weather.  She was cold while she watched.

In my liberal mode, I went to Mom and told her that our daughter was cold and could she spare her jacket.  She willingly gave it up and I went back to daughter and gave it to her to wear.  She thanked me.  Did I deserve thanks?  Had I contributed?  Not really.  There was no cost whatever to me for the transaction.  I was a perfect liberal, applause for providing a benefit and no give up on my part.

So it is with the left leaning groups.  In their case the government takes from some and gives to others.  Everyone is anonymized.  After all, privacy and respect matter.  Does that diminish the value of the gift and the appreciation of the benefit?  I think so.  For most people, taxes are their biggest single budget item.  Far more than whatever is at number two.  Should they not feel some warmth for their gift to others? Should recipients appreciate the value?

Ultimately government sponsored “good” will go away.  Why?  Because people eventually get fed up giving without applause.  They go someplace else, change their method of earning income, or give up.  None is to the advantage of the community as a whole.  If the policy makers used their own resources, there would be far fewer initiatives that could not pay for themselves.

In simple terms socialism and its variants cannot work because socialism has no way to provide the resources needed to carry out the programs.  Every tiny tax reduces the incentive to earn more.  All programs, even private charities, have overhead that in some cases exceeds the value distributed. Eventually the government will hit the fiscal wall and run out of money. Then what?

How do you tell the bear you have no more cookies?

Economist Josef Schumpeter has said that capitalism will die because it is so successful.  It creates economic slack.  People like policy wonks and activists can get along without contributing.  They can use their time to take more from the system.  (In reality, take from the ones who create wealth once you get by the anonymity.)  They can even attack the economic system that, while imperfect, creates wealth better than any other.

Troubling.

Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

Contact: don@moneyfyi.com  

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