Obama, Inequality and “the American Idea”

GIOVANNI BIRINDELLI, 9.8.2013

(Original publication: Movimento Libertario, L’Indipendenza)

At a recent political rally, President Barack Obama made yet another propaganda speech in favour of socialism and interventionism, arguing more or less explicitly:

1. that inequalities of material position (and therefore of opportunity as well) are morally wrong,
2. that those who defend these inequalities betray the “American idea”,
3. that inequalities are at the origin of the cyclical economic crises and the consequent impoverishment of the middle class,
4. that he (Obama) will do everything in his power to reduce inequalities.

The fact that Obama, or anyone else, can more or less explicitly assert the nonsense expressed in the first three points is not a problem. The problem lies in the fact that he can do exactly what he announced in the fourth point: that is, exercise pressure at various levels for the adoption of (additional) redistributive measures.

It is generally believed that these measures benefit the position and the economic prospects of those in whose favour redistribution is carried out. Although this perception is extremely widespread and even plausible to those who have never approached the science of economics from the perspective of human action, it is completely false. In the long run, these measures, like any other form of intervention that distorts the spontaneous market process, necessarily produce further crises and impoverishment, in particular for the ‘middle class’ and those who are economically more vulnerable. The theoretical argument for this thesis and the more general claim that ‘bubbles’ and the ensuing cyclical crises are produced not by the legitimate market process but, on the contrary, by the economic interventionism of the state, is beyond the scope of this article [2] in which I will focus on the first two points cited above. In any case, this thesis finds ample empirical corroboration in the current economic and financial crisis, which is only an appetizer for what is to come and which is visually well portrayed in this article by Mark Steyn. It is curious, however, that Obama, when speaking of income redistribution, mentions only the “middle class” and not the ‘poor’: could it be because the former still constitutes the most numerous category of elector and that those (of whatever persuasion) who aspire to effectively unlimited political power need their votes if they are to obtain it?

There are a variety of objective reasons why the thesis expressed in the first point is nonsense. Perhaps  to obscure the force of these reasons, in line with the dictum of Hitler’s propaganda minister, Goebbels (“If you tell a lie big enough and keep repeating it, people will eventually come to believe it”), this claim is constantly repeated (who knows how many times a day) by those holding political power in general and by President Obama in particular. The need to obsessively repeat (often in different lexical forms) that “inequalities are immoral”  – tirelessly, for decades and without a shred of argument– may be the most obvious outward sign that the holders of political power are aware of the logical unsustainabilty of this assertion.

First of all, only an action can be immoral and, if it is, then it is so everywhere, to whomever, by whoever and whenever it is performed. The action of theft, for example, is immoral in every part of the world (and the universe), whoever it injures, independently of who carries it out or when they do so. Viceversa, a particular situation, whatever it is (for example, a situation of inequality in the material position of two people, like a disparity in the natural supply of oil or water in two different areas of the planet), can never be immoral per se. And it is Obama himself, with his actions (or non-actions), who confirms this fact and therefore contradicts himself, also and especially at a personal level.

In fact, he receives 400,000 dollars a year plus a further 150,000 dollars for general expenses, 100,000 dollars for travel expenses (tax free), and 19,000 dollars for entertainment. I will not go into the fact that this money is the result of violent and coercive action by the State and not of a voluntary and legitimate act of exchange, and that receiving it is therefore immoral per se. However, it is an objective fact, even considering for the time being only the United States, that there are people in that country who earn less than the sum Obama receives (and does not earn) – far less in the vast majority of cases. So if inequalities are immoral, as the U.S. President claims, in order to extricate himself from an immoral situation he should have already voluntarily distributed his income (and should continue to voluntarily distribute it) among the population of the United States until the part remaining at his disposal did not exceed the income of the poorest person in the United States. Indeed, if Obama really did consider  inequalities to be immoral, he should have distributed his income among the population of the entire world until the part of that income remaining at his disposal did not exceed the income of the poorest person on the planet. Indeed, if the immorality of theft, for example, remains intact across any geographical boundaries, why should the alleged ‘immorality’ of an inequality not remain so? Moreover, assuming that Obama would never commit an act he considers immoral in a country in which it was permitted (violence against women, for example), given that this situation of material inequality has been permitted up till now in the country in which he lives, why has he maintained (and continues to maintain) it if he considers it immoral?

Thus his actions (or rather non-actions) tell us with absolute certainty that, contrary to what he claims, President Obama does not believe in the least that inequalities of material situation are immoral (nor, therefore, any “growing” inequalities of material situation, including as a consequence inequalities of opportunity): if he thought they were, he would behave no differently from the way he behaves in relation to other practices he considers immoral, precisely such as theft and violence against women.

This conclusion applies not only to Obama but in general: all those who, not being voluntarily in the material situation of the poorest person on the planet, claim that inequality of material position is immoral (or even only that ‘excessive’ inequality of material position is immoral: on the plane of principle, the terms of the problem would not change one iota),  are wrong according to their own standards. In other words, they say something that their actions (or rather non-actions) demonstrate they do not actually think and therefore deserve no intellectual respect. To give just one example, those who blather on about the ‘social justice’ or ‘morality’ of progressive taxation when they have cell phones in their pockets, a roof over their heads or are simply able to eat two meals a day do not deserve the slightest intellectual respect.

This does not in any way mean that a person who found herself voluntarily in the material situation of the poorest person on the planet would be justified in arguing that “inequalities are immoral”: this person would be wrong anyway, even though in this case her behaviour would be consistent with her (mistaken) convictions. As we have seen, only an action can be immoral (a material situation never can be) and moreover coercive action by the State which eliminated or (more realistically) reduced inequalities in people’s material circumstances would be necessarily immoral since it would violate – in addition to the property rights of those it plunders (and hence the Law intended as a general and abstract principle) –  equality before the Law.

Indeed, even though attempts are continually made to confuse them with one another, equality of material situation and equality before the Law are incompatible with each other and antithetical: from the fact that every person has characteristics, situations, capabilities, inclinations, weaknesses, strengths, affections, a background and an infinity of other differing individual factors, it necessarily follows that if people are treated in the same way, they will end up in different material positions. The only way to have equality of material position (or in fact, more realistically, a greater equality of material position and therefore also of opportunity), is to treat people differently, namely:

1. fix an arbitrary criterion (e.g. level of income), then
2. group people into categories formed equally arbitrarily on the basis of this criterion (those who earn more than x, those who earn less), and finally
3. treat them differently if they belong to different categories, but in the same way if they belong to the same category (higher taxation for those earning more than x and lower taxation  for those who earn less than x).

This idea of ‘equality before the law’ is called legal inequality and it is the same idea of ‘equality before the law’ applied to Jews by the Nazis and fascists, to South African blacks by the apartheid State and to black slaves in America. The fact that it is Obama who is invoking this idea of ‘equality before the law’ is not ironical, it is tragic.

And it is precisely these considerations on the abstract idea of equality before the law that help us recognise that Obama’s second thesis is also inexcusable nonsense. Perhaps there is no other phrase that more clearly expresses the American idea than that which Thomas Jefferson wrote in the Declaration of Independence (1776): “all men are created equal”. This phrase reminds us of an idea of equality before the Law (equal treatment for all based on the same abstract principles) which is the opposite of legal inequality, that is, of the idea of ‘equality before the law’ used by  the State to ‘reduce inequalities’ of material position (and therefore of opportunities as well) and, more generally, to grant certain privileges to particular individuals or groups. To use the title of Murray Rothbard’s historical masterpiece, the United States of America were Conceived in Liberty. The culture of privilege began attacking the body politic almost immediately after its birth and gradually and increasingly expanded its range of action (one need only consider, for example, the history of the United States’ monetary and banking system [3]), but the body politic had been conceived on the basis of an ideal of equality before the Law which rendered criminal all privilege and consequently redistributive policies as well. As Rothbard writes, “Americans were not always pragmatic and nonideological. On the contrary, historians now realize that the American Revolution itself was not only ideological but also the result of a devotion to the creed and institutions of libertarianism. The American revolutionaries were steeped in the creed of libertarianism, an ideology which led them to resist with their lives, their fortunes and their sacred honour the invasions of their rights and liberties committed by the imperial British government. … The revolutionaries saw no conflict between moral and political rights on the one hand and economic freedom on the other”[4].

In conclusion, it is Obama, among others and more than many others, who, acting as President on the assumption that ‘inequalities in material position are morally wrong’, has betrayed and continues increasingly to betray the American idea.  Moreover, as implicitly argued by Andrew P. Napoletano in a recent and excellent article, he has betrayed and continues to betray this idea in other, not strictly economic, fields as well (the Snowden- Datagate case or that of Bradley Manning). Who knows whether one day the American ‘middle class’ which voted for him will realize this. Perhaps the inevitable economic collapse produced by interventionism may offer them some assistance. Or perhaps, in other ways, the history of modern heroes such as those I have quoted may do so. None of this can ever be of help to us Europeans, unfortunately, because Europe was not conceived in liberty. We Europeans do not have this liberty in our DNA. Or rather, nearly all Europeans do not have it.

Notes

² For an excellent, synthetic and easy-to-read treatment of these arguments, see  Carbone F., Huerta de Soto J., 2012, A Scuola di Economia, [Learning Economics] (USEMLAB, Massa). For a complete treatment, see Mises L., 2007, Human Action (Liberty Fund, Indianapolis) and Rothbard M. N., 2001, Man, Economy, and State (Mises Institute, Auburn AL).

³ See Rothbard M. N., 2008, The Mystery of Banking (Ludwig von Mises Institute, Auburn AL).

⁴ Rothbard M. N., 2006, For a New Liberty (Ludwig von Mises Institute, Auburn AL), p. 2.

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