"We seldom get into trouble when we speak softly. It is only when we raise our voices that the sparks fly and tiny molehills become great mountains of contention."
Economics
is the study of how scarce resources are allocated in an economy.
Let’s take a stroll down economic history to see how those
resources have been allocated in the past.
Ancient
Egypt had the Pharaoh and other ruling families that lived lavish
life styles. They were able to live that way because of the work
done by the poor and slaves that were part of the Egypt economic
system.
There
were a very small fraction of rich, a small fraction of craftsmen and
then all the rest. The chance that the poor or a slave could move up
the economic ladder was almost zero.
What
about Greece? The cradle of democracy (in Athens). In Greece, you
had rich families who lived lavish life styles and had estates they
owned. The poor and slaves worked the land so the rich did not have
to work and were able to live the good life.
The
Greeks would be absolutely perplexed by the work ethic that exists
currently in the world. The chance that the poor or a slave could
move up the economic ladder was almost zero.
Moving
on to the Roman Empire. The Roman ruling families had more wealth
than any other people had accumulated at any other time in history up
to that point. They had living accommodations in Rome of course, but
also had an estate out in the country. The land was worked by the
poor and slaves (is there a pattern) so the rich were able to just
enjoy life.
The
chance that the poor or a slave could move up the economic ladder was
actually better than in Egypt or Greece. Probably still less than
one percent but closer to one percent instead of zero.
The
middle ages were much the same. The aristocracy lived lavish life
styles, a few craftsmen were marginally better off than the poor and
slaves and the poor and slaves worked the land.
So
what does this teach us?
First,
there is always an elite or aristocracy that feel like it is there
right to live in style and those beneath them have been created by
God(s) to make their life good. The rich live off the work of others
and the ability to move from poor to rich has been almost impossible.
Also,
there has always been the 1% at the top. In the past, however, all
the other 99% lived in poverty and endured physically and emotionally
grinding lives.
Lastly,
part of the make-up of the natural man is our desire to be superior
to other people. This desire is most often is played out in the
economic arena but we must not forget the Rameumptom.
This
feeling of superiority leads people to become indifferent to the
plight of the poor. Of all the educated people in antiquity, none
came to the conclusion that slavery was bad. We are better than them
and slavery is the correct station in life for them. Period.
As
a country, have we moved past these historical norms?
We
do have some families that like to think of themselves as
aristocracy, but in reality there are many families that were rich
that have become poor, and families that are poor become rich.
People can move up and down the economic ladder for the first time in
history.
We
still have the 1% on the top, but the rest of us actually can live
good, happy lives. Anyone that suggest the current 99% in any way
equates to the 99% throughout all the rest of history is either
ignorant of the facts or a deceiver. So I think that norm has been
mostly corrected.
The
last norm of people wanting to feel superior is interesting because
it is part of who we are as humans, so overcoming this norm requires
a personal commitment from individuals, and I think for this one norm
in particular, we are not moving towards a good outcome but actually
further away.
For
most of U.S. history, this feeling of superiority was due to race.
The white race is superior to blacks, browns, Asians (take your pick)
so the oppressed should be happy with their station in life and most
Americans did not care about the living conditions of the poor.
Finally,
about 60 years ago, this started to change, and as a country we began
to change our thinking so we judged people by their character and not
by the color of their skin. This was progress.
But
the progress would not last. This desire for superiority is very
strong.
The
current feeling of superiority is through causes. These can be
political, environmental, or other causes. And just as it has been
throughout history, those that feel superior put the deleterious
effects of their causes on the backs of the poor. And just as in the
past, there is no feeling for the poor.
The
easiest example of this is the global warming or climate change
cause. Those that espouse this cause are better and more
“enlightened” than the stupid masses.
What
do we know about climate change? The theory goes as follows —
carbon dioxide is a greenhouse gas, and since humans are putting so
much more carbon dioxide into the atmosphere through the burning of
fossil fuels, then humans are going to cause the planet to burn up.
So what are the facts?
Carbon
dioxide is a greenhouse gas. Everything else staying the same, it
will make the planet hotter.
It
is also true that the effects of carbon dioxide (CO2) are at a
decreasing rate. The next CO2 gas released into the atmosphere will
have less impact than the previous CO2.
The
fact of number 1 is why 97% of scientists agree that CO2 is a
greenhouse gas. It is like getting scientist to agree that 2+2=4.
The
fact of number 2 is why everyone is yelling at each other. Consider
the following graph.
Line
1 is what would happen if fact 2 was at an increasing rate, not a
decreasing rate. Line 2 is if fact 2 was linear. Lines 3 and 4 BOTH
fit fact 2. Look at the difference in temperature over time from the
two lines that fit fact 2. This difference is where the hostility
comes from.
Those
that espouse line 3 are the “informed” and “enlightened.”
They are superior to others that do not see things their way even
though there is not any evidence that their way is right. All of
their recommendations to decrease the amount of CO2 increase the cost
of energy.
For
the rich, the increase cost is an annoyance. To the poor, it is and
will be devastating. Again, this is an instance of someone wanting
to feel superior on the backs of the poor.
The
examples of this are everywhere.
Public
education is the only fair way to make sure everyone gets a good
education. The “enlightened” on education care not that
their superior ways and unwillingness to try anything different
dooms many poor kids to horrible schools and a hopeless life.
Fighting
against free trade makes people feel like they are smart and helping
the poor. Instead, restricting free trade increases the cost of
goods that hurt the poor.
What
about that fight to save the spotted owl? If you were “enlightened,”
you knew that the fowl had to be saved at all costs. Even the cost
of thousands of loggers losing their jobs that lived very middle
class lives. Those people that caused the loss of jobs slept well
knowing the loss of jobs was a sacrifice that had to happen.
So
the last norm of the need to feel superior has not been corrected by
our society. Only those at universities and in government now know
what is best. Resting the cost of the superior class on the backs of
the poor has a long and very undignified history.
Adam Smith is obviously not the actual name of the author of this column. The real author has
worked for two Fortune 500 companies, one privately held company, and a public accounting
firm. His undergraduate degree was in accounting, and he earned an MBA for his graduate
degree. He also has completed coursework for a PhD. in finance. He continues to be employed
by one of the Fortune 500 companies.
The author grew up in the Washington D.C. area but also lived for several years in Arizona. He
currently resides with his family on the East Coast.
The author has held various callings in The Church of Jesus Christ of Latter-day Saints.