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The 2008 Economic Crisis spawned two, very different reactions in our ideologically-bifurcated nation. The first was the birth of the Tea Party following Rick Santelli’s impassioned speech from the floor of the Chicago Mercantile Exchange. Santelli’s disgust at those who irresponsibly took out loans they couldn’t repay — and the banks and government that underwrote such moral hazards — sparked a wildfire that drove the Democrats from control of the House in 2010 and proved decisive in wresting control of the Senate from Harry Reid in 2014.
The other reaction was the later birth of the Occupy Wall Street Movement which was organized along the opposite lines. The primary thrust of OWS was a complaint about the unequal distribution of income and wealth and, to some extent, an inchoate grouse about the immorality of being expected to repay loans that were irresponsibly taken out.
Both movements have splintered and stalled. In the case of the Tea Party, crass commercialization and other attempts to monetize the energy of the movement have severely blunted its message (and is worthy of its own post). OWS has largely gone underground, its myriad professional protesters still occasionally showing up to wave signs and shout down speakers they disagree with, or to populate the ranks of the Black Lives Matter movement.
But though largely invisible, both movements can still be detected, much like particles in a cloud chamber can be observed indirectly via the wakes that they leave. I want to focus on the latter: The echo OWS left in the form of Bernie Sanders.
If “immigration” is the raison d’etre of Donald Trump’s candidacy, “income inequality” is the central plank of Bernie Sanders’ appeal. At its heart, the issue is based upon a misapprehension of market economics.
Imagine that there is a society made up of Person A through Person ZZ where everybody has a job that earns approximately the same. Person A is a bit of a rebel and spends his weekends tinkering with electronics. When the tinkering results in a creation he dubs the “aPhone,” he decides that this should be his full-time job. He then approaches a group of investors with a plan to mass-produce and sell the aPhone.
Person A subsequently sells aPhones to Persons C through ZZ, and he and his investors become justifiably rich. Moreover, Persons C-ZZ have gained the utility of the aPhone and may do away with existing, less-efficient alternatives, freeing-up their previously burdened capital. So, Person A took a risk in developing the aPhone by forming capital from willing investors and enduring the opportunity cost of not engaging in work with a guaranteed return. Consequently, all of society — but Person A in particular — have ended up better off.
But what about Person B? Person B has neither obtained an aPhone nor participated in its manufacture or development. Has Person B been harmed in some way by Person A’s success? Has Person B had anything taken from him due to A’s invention of the aPhone?
The answer to both questions is obviously “no.” However the fiction upon which an entire political movement — which has culminated in the Sanders surge — has been constructed is that it is not benign for Persona A to make more than Person B, but that it is inherently harmful to B for A to have done so. The reasons for this are never explained by Sanders’ supporters except in terms of broad moral outrage. The best explanation that typically comes forth is a sort of soft Marxian appeal of from each according to their abilities to each according to their needs.
Once you begin to apprehend the basics of these concepts, the notion of “income inequality” begins to sound more and more like a natural consequence of a market economy, with the counterbalance to the accumulation of wealth and capital of the few being the benefits that society as a whole enjoys due to the progress that naturally derives from entrepreneurship.
It should come as no surprise that as the teaching of such basics has declined that we have seen the consequent rise of the alternative narrative. To be fair to Sanders’ supporters, there is frequently a tinge of how “rigged” the game is in favor of certain interest groups, and you don’t have to look very hard to find evidence to support that notion. However, you’ll find very quickly that — rather than un-rig the game — their preferred solution is to re-rig it in a bigger, better way that leads to outcomes these economic naifs deem preferable.
In this sense, I fear that Sanders is nothing more than a forerunner, a premonition of our impending doom. Hillary Clinton will inevitably grind down the Sanders campaign as a glacier turns boulders into pebbles. But when the glacier recedes, the material that formed the boulders is littered across the landscape. In that not-too-distant future, even a tiny pebble from that glacier’s terminal moraine could be enough to start a landslide.Published in