One of the favorite pastimes of leftists/progressives/liberals is lamenting the fact that some people have more while others have less. They say that life is just unfair in this respect. They want the government to “level the playing field” by using taxation to take money from those who have more and giving it to those who have less. Their ideal is a “level playing field” in which everyone has the same amount of wealth.
Even though they would never admit it openly, this leftist/progressive/liberal concept is rooted in envy and covetousness. They just cannot stand the fact that some people have more than they do. They won’t be happy until everyone who has more than they do has been “equalized” down to their level.
Leftists claim that in a genuine free market, the rich would only get richer and the poor would only get poorer. Their statuses, leftists say, are permanent. The rich will never be poor and the poor will never be rich, they claim. We need government to equalize everyone, they assert.
Yesterday, the New York Times reported that Hudson’s Bay, the company that owns Lord & Taylor, is selling its 676,000 square-foot store in New York City that has stood for more than a century. The property is being sold to a start-up named WeWork that caters to millennials by providing variable office space. WeWork was founded in 2010 and now has 160 locations in 52 cities.
The shift is part of an economic revolution in the retail business, which has been brought about by the Internet. Another example is Macy’s, one of the country’s largest department stores, which has closed dozens of its stores nationwide.
But wait a minute! How is this possible? Don’t leftists say that the rich only get richer? That their status is secure and permanent? That we need government to seize their wealth and give it to the poor? That coercion is needed to “equalize” everyone?
What is happening to Lord & Taylor, Macy’s, and other retail establishments demonstrates the ridiculous nature of this particular economic dogma of the left. The fact is that the free market is a great redistributor of wealth and a great equalizer. It brings many of the wealthy down and lifts the fortune of many who are not wealthy. And it’s all done voluntarily and peacefully — that is, without taxation or other government coercion.
According to an article by Mark J. Perry on the website of the American Enterprise Institute,
Comparing the Fortune 500 companies in 1955 to the Fortune 500 in 2014, there are only 61 companies in 1955 that appear in both lists. In other words, only 12.2% of the Fortune 500 companies in 1955 were still on the list 59 years later in 2014, and almost 80 percent of the companies from 1955 have either gone bankrupt, merged, or still exist but have fallen from the top Fortune 500 companies (ranked by revenue).
But according to leftist economic doctrine, that simply isn’t possible. Remember: They say that the rich only get richer and the poor only get poorer. You need government to “level the playing field,” they claim.
What is it about the free market that proves leftists wrong? Consumers. In a free market, they, not the government, do the equalizing and leveling, and, unlike the government, they do it peacefully and voluntarily. It is consumers who decide who is going to prosper and who isn’t. They, not the government, is sovereign in a free market.
How do consumers redistribute and equalize wealth? Through their decisions on what to buy and not to buy. By making those decisions, they decide who is going to be rich, poor, or middle class.
That’s why many big sports athletes, many of whom come from dirt-poor families, now make tens of millions of dollars and why many college professors who came from wealthy families make only tens of thousands of dollars. Consumers are willing to spend more on attending baseball games than on taking college courses.
Consumers are a ruthless bunch. No matter how long they have done business with a particular company, if someone comes along and offers them something better at a lower price, most of them will not hesitate to shift their loyalties, even if it means that their old company goes broke and has to lay off workers.
In a free market there is only one way that a well-established, wealthy company can retain its position in the market. It must continue to satisfy the consumer by providing him with goods and services that he is willing to pay for. Remember: A private company is not like the government — it cannot force its customers to patronize it or forcibly take money from people to subsidize its operations. It must serve people by providing them with goods and services that they are voluntarily willing to pay for.
Leftists are wrong. We don’t need government to destroy freedom and private property by coercively confiscating and redistributing wealth. The free market does a fine job redistributing wealth all by itself, and entirely voluntarily.