It’s funny how the staunchest defenders of the free-market economy often seem to understand very little about that economy. If they understood it well, you wouldn’t keep hearing this refrain in the logic of people who oppose tax cuts for the superrich—the chorus of “don’t soak the rich, they’re the people who create jobs.”
Years ago Cal Thomas wrote the same thing in a syndicated column. Thomas had never gotten a job, he wrote, except from someone richer than himself. Hence it was self-evident that the rich were the source of jobs, and it was in the interest of the rest of us working stiffs to protect them.
Years later—as enough people buy that line that we may see the country driven deeper into deficit by a refusal to eliminate tax cuts for the very richest—it’s time to refute Cal Thomas.
When I got work at the Valley Advocate in the 1970s, I was getting it from people who had less money than I had—less, that is to say, than my family income. The Advocate was established in 1973 by two fellows in their 20s who started it up on $3,000. And that’s not atypical; small businesses, often started on a shoestring or partly on credit or with a loan from somebody’s grandpa or aunt, are known to be the U.S.’s “engines of job creation.” Even many of the large companies we know weren’t large to begin with.
In past ages it was often true that anyone who wanted to be something besides a farm laborer had to curry favor with the nearest wealthy patron. But even by the time our forebears reached the Massachusetts coast, trade guilds, joint stock companies and other harbingers of a rising middle class had begun to erode the old dependence on the upper echelons. The industrial age and the growth of American-style capitalism gave birth to a dynamic marketplace in which sources of capital and/or commodities needed to start a business were almost unlimited except by the imaginations of would-be entrepreneurs.
If it’s one thing most of us have known since we were old enough to buy our first bubble gum, bicycle or baseball trading cards, it’s that people with all levels of capitalization start businesses here. Didn’t Cal get the memo?
Yet as recently as last month, we were treated to a new version of the “I’d better love the rich because it’s their hands that feed me” idea by newly elected U.S. Senator Ron Paul.
“I would say that [Democrats] must be in favor of a second American depression, because if you raise taxes to that consequence, that’s what will happen in this country,” Paul said to Wolf Blitzer on CNN. When Blitzer asked if that would happen even if taxes were only raised on the extremely wealthy, Paul went further. “There are no rich. There are no middle class. There are no poor,” he said, with staggering disregard for Americans who have lost their homes and been unable to find work for a year or more. “We all either work for rich people or we sell stuff to rich people.”
Pundits on the right have a way of talking as though they are the owners of American history when in fact their view of history is often a tissue of misconceptions. During the World War II they glorify, the very rich were taxed between 70 and 94 percent. The free market they constantly invoke, in contrast to what they decry as “socialism,” long ago made dependence on the very wealthy obsolete; that was one of the most socially beneficial things it accomplished. That was how, as they never tire of pointing out, it became the economic doppelganger of what in the political realm we call democracy.
Do these people really believe in that free market, or don’t they?
