“An imbalance between rich and poor is the oldest and most fatal ailment of all republics.”

—Plutarch

Of this, there is no doubt.  There are two schools of thought on how to rectify this societal problem.  One side believes in the Robin Hood fairly tale: Take from the rich, give to the poor.  The rich, in these tales, are always corrupt, so the taking is just and good.  And the thief is a hero.

Entire nations have been built on this simplistic premise.  Communist Russia began under this principle in the late 19th century.  It became militarily powerful in the 20th century.  Its economy was crushed under central control in the 21st century.  This concept lives on in China.  A modified version, socialism, thrives throughout the world.

Communism takes the means of production (corporations, factories, farms) and the output from production (products, service) to its central government, to be distributed “fairly and equally.”  The modified version of communism is socialism; both tax the private citizen and regulate private industry.  The end result is always the same: A powerful entity controls all.  Both are the opposite of individual freedom. 

Communism, socialism, and fascism start as the religion of envy and morphs into the religion of greed.  Unthinkingly, many decent citizens believe in all-powerful central control, the government.  They have faith in their brand of religion — that a man-made entity, a government, will take care of them and protect them, deliver them from evil.

In order to comprehend this error, one must have historical vision over centuries, and millennia, not the short span of a human life.  This ignorance of history is the only reason so many citizens try the abject failure of central control.

Ergo, we have one school of thought that wants to rectify inequality through a central controlling entity — a government, a dictator, or a monarch.  This method takes everything from its citizens to create misery for all.  Every dollar our government spends is taken from a person who worked for that dollar, who earned it. 

We are blessed with another philosophy that takes the opposite approach: that certain rights accrue only to the individual, and individual liberty is the objective.  A government is a necessary evil that must be controlled, lest it gain too much power and revert to tyranny.  This idea created a Constitution whose sole purpose is to define and confine the powers granted that government by the people.

The first way to solve inequality is to tear down the rich, productive, and successful, to steal from the rich to give to the poor.  The second way is to build up the poor so they can improve, by their own efforts, and keep the property they earned.  This economic philosophy is capitalism.

In the first instance, the recipient of others money did not earn it.  Someone else did.  In the second instance, the way of the individual, the poor earned a fair wage and earned that wage through work.  This is the moral order.  Capitalism has helped more people than any government entity.

The grand experiment of our founding has been in existence for only 249 years, and already we face the demise of our Republic.  Some say this is a failure of capitalism.  I’d say we have not had a capitalist economy for well over 100 years.  We have an economy distorted by the very entity the socialists want to rely on: the government.

Dr. Brian Wesbury, chief economist of First Trust, sums it up perfectly: “Governments (fed, state and local) plus the cost of regulation take 51% of our GDP.  If we only get to take home 49% of what we produce, no wonder living standards are declining.”

When our government takes 51% of our income through taxes, fees, and confiscation, that government has grown too powerful.

If we believe in building up the poor so they reach some equitable distribution of resources, we have the greatest map charting our way: a Republic whose government is controlled by the Constitution.

After all, the one differentiating factor between success and failure is individual liberty, or how controlled the governing entity is.  The question to ask is, how do we establish a government to protect the rights of the individual without allowing that very government to overpower the individual?

Let’s say it a different way.  If we believe that the poorest should be given the opportunity to succeed, then what can we do to help?  Enforcing another government-based rule, law, or program is the antithesis of individual freedom. 

We must promote a free society (free of government excess) built on ethics and the rule of law.  As Jefferson reveals in the Declaration, the keystone of our Constitution, the individual is endowed by the Creator with life, liberty, and ownership.  And no central-controlling entity should be allowed to take from its citizens.

We hold these truths to be self-evident, that all men are created equal, and are endowed by their Creator, with certain inalienable rights: Life, Liberty and Ownership of Property.

We must go back to capitalism, which our nation hasn’t enjoyed for over 100 years.  Capitalism is defined by the term “fair value” (trade): a willing buyer, a willing seller, agreeing on a transaction and a price, free of outside coercion.  This last phrase is critical.  It means that the two individuals in a transaction are free to choose.  They set the market, not some regulatory agency.

Capitalism allows the poorest to work ethically and retain what they earn so they can determine fair value and own property at their own discretion.  Individual rights cannot exist in the presence of an entity that takes life, liberty, and property on a whim through taxes, regulation, debt, and spending.

Therefore, our own government must be held accountable to the rule of law, the Constitution.  This will be painful for the people who depend on the government for employment and welfare.  It will be liberating for the rest of us.  More importantly, capitalism and individual freedom from tyranny will liberate our children for generations to come.

Do we take successful people down or build good people up through freedom?  I vote for the latter. 

Jay Davidson is the founder and CEO of a commercial bank, a student of the Austrian School of Economics and a dedicated capitalist.  There is a direct connection joining individual right and responsibility, our Constitution, capitalism, and the intent of our Creator.

Image: Pashi via Pixabay, Pixabay License.