Tag: envy

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free trade & free markets

Meritocracy a Myth?

meritocracy, work, effort, justice

COVID and the pandemic panic have not been kind to small businesses, but some entrepreneurs have skyrocketed their wealth. Months ago, CNBC’s Gary Cohn waxed enthusiastic for “the banner year for newly minted American billionaires,” citing among reasons to celebrate “the possibility that it can happen to other people.…”

Reporting on three new billionaires from Doordash and “the winner of the week, Brian Chesky, AirBNB CEO,” CNBC’s Robert Frank said the recent uptick was “really inspirational no matter what your point of view.”

Wrong, says Kyle Kulinksi, a thoroughly unimpressed progressive podcaster, dissing the segment as “everything that’s terrible about CNBC in one clip.”

Now, I can imagine worrying about the context of celebrating a few folks’ success while so many others have been hit hard by bad policy and a virus, all the while big business (especially banks) have been subsidized with “stimulus.” But, Mr. Kulinski explains, “the main problem” is that CNBC’s encomiasts “clearly believe in the myth of meritocracy.”

Kulinski then yammers on about hard-​working folks who got nowhere in life working three jobs. “The idea that the reason why these people are getting wealthy is because they’ve just worked harder than anybody else — that’s provably not true.” 

And then proceeds not to prove it.

Kulinski errs in focusing on “working hard” in sheer physical and time-​suck terms. But to the extent we have a meritorious meritocracy, the merit rests on what CNBC’s Cohn called “work hard and have a great idea.” Emphasize the “and” — remembering that “great ideas” are those that extend value to others via trade. 

Value isn’t measured in BTU’s and time-​clock ticks. 

Kulinski should have noticed the big truth about these gig economy billionaires: they have allowed normal people to take their investments in household production — their homes and their cars — and turn them into capital goods for services on the open market.

They created new markets … wherein all participants gain.

That is progress.

But not, apparently, “progressive.”

This is Common Sense. I’m Paul Jacob. 

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free trade & free markets ideological culture

Downs and Ups

We hear more about inequality when times get tough than when the economy is booming.

This suggests most people are satisfied with positive growth, but that, when the opposite occurs, some fall back to covetousness and envy. When dissatisfied, we look around for someone to blame.

So what’s roadblocking the long-​run upward trend?

There’s the recent bust in the ol’ boom-​and-​bust. But there’s a deeper problem here. Maybe.

Sheldon Richman, editor of The Freeman, notes that America’s upward mobility is stymied by a whole heckuva lot of government intervention … and that a New York Times story about how Americans “enjoy less economic mobility than their peers in Canada and much of Western Europe” should surprise no one, for America isn’t “the land of the free” and Europe isn’t exactly  “socialist” — it’s more a case that the “economies of America, Canada, and Europe are all variations of corporatism, in which government power primarily benefits the well-​connected and well-to-do.”

America differs from Europe in the particulars of its interventionism, not in kind.

Still, things could be worse. Veronique de Rugy, writing in the February Reason (not yet online), shows that downward mobility was in evidence pre-​Bailouts. Of 1999’s 675,000 millionaires, only 38,000 remained millionaires in 2007.

That, surely, is enough 1 percenter income decline to satisfy your worst schadenfreude.

On a brighter note, de Rugy insists there’s still dynamism in the American economy, and that the lowest income earners had, during the same pre-​bust period, made substantial gains.

This is Common Sense. I’m Paul Jacob.