Note to the reader: This is the continuation of An Overview of Democratic Socialism, but that does not need to be read to understand this article.
The Land of the Free
The United States of America is the greatest country in the world. One of the most prominent reasons why is that the United States holds the greatest economic opportunity in the world for all of its citizens.
Leftists disagree; they often point to income inequality as the source of their disagreement.
What is implied is that what is gained by some must be lost by others; this is the zero-sum fallacy. The United States houses 614 billionaires — more than any country in the world. The entire continent of Africa has 23. However, according to World Bank economists, 85 percent of Africans live on less than $5.50 a day. Juxtaposed to the United States, which, according to the Organisation for Economic Co-operation and Development (OECD), is ranked second in the world for household net wealth at $632,100 and first for household net disposable income at $45,284.
If wealth really was the corollary of exploitation, American citizens should be the poorest in the world, and Africans, on average, should be the richest.
Some individuals on the Left may point to the exploitation of third-world countries for an explanation for the gap between various nations. However, the gap between the richest and poorest nations consistently varies and does not necessarily increase. For example, a report from an Indian economist at The University of California analyzed the wealth of different nations and found the following: the ratio between the twenty richest and twenty poorest countries in 1960 was 23:1 and in 2006 was 36:1. However, different countries comprised both the top and bottom twenty at the end of the study. If the same countries are analyzed, the ratio of those countries used in 1960 dropped to 10:1.
“The key insight of Adam Smith’s Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”
― Milton Friedman
The United States emphasizes equality of opportunity for those who wish to put forth productive work. Ultimately, those who are better in their pursuit to utilize this opportunity are rewarded, and this is a reward only subject to the use of those who earn it. You make what you earn and you keep what you make. This is in contrast to collectivist countries which strive towards equality of outcome; forcing the same outcome for those who did not put forth the same level of productive work. Clearly, the former rewards virtue and penalizes vices, while the latter does the opposite. After all, Census data suggests that the poverty rate for year-round workers fluctuates around 2.5 percent. This is 75 percent lower than the national average.
Your ability and choices must determine your success, not the level of arbitrary intervention from some third-party with good intentions.
“A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.” — Milton Friedman
An excellent example of the opportunity provided by the system in the United States is a study from The University of Michigan. The study followed tens of thousands of Americans from 1975 to 1991 and reported remarkable results: of the Americans at the bottom 20 percent of earners at the beginning of the time period, 26 percent finished in the top 20 percent of earners by the end of the study. Further, a total of 95 percent of those who started in the bottom 20 percent had finished outside of that bracket.
This is not just true for individuals moving up in terms of earnings, but also down. An analysis from the U.S. Treasury from 1996 to 2005 found that more than half of those in the top 1 percent at the beginning of the analysis were no longer there by the end. Moreover, three-quarters of those who were in the top one-hundredth of the 1 percent in 1996 were no longer there in 2005. The same analysis found similar results regarding the “poor” at The University of Michigan study: those in the bottom 20 percent saw their income rise 91 percent over the analysis period; this doubling of income moved many individuals up and out of their previous income bracket.
These statistics deconstruct the typical composition fallacy that New Yorkers will appreciate.
Consider the following: someone tells his friend that some guy is hit by a car in New York once every 2 minutes. The friend responds “The guy must get tired of getting hit.” Instinctively, most readers will realize it is not the same person. This instinct manifests when hearing this, but the same instinct seems to shrivel when it comes to basic economics.
Moreover, another example of opportunity in the United States is the rising wages in the country over the past few decades. Real income (adjusted for inflation), shows drastic changes over the 40 year period from 1967 to 2007. As of 2007, over half (50.3 percent) of all American households had incomes of $50,000 or more. In 1967, only a third (33.7 percent) had incomes with the same purchasing power. Of this third, most of that third (20.6 percent) had incomes equivalent to $50,000 to $74,999; in 2007, more people concentrated at the top of this range than the bottom. Moreover, those whose incomes were above $100,000 had become more numerous than those whose incomes were in the $50,000 to $74,999. This is impressive, but there’s more: in 2007, 13.2 percent of people had income equivalent to less than $15,000 where 18.3 percent (38 percent more) had the same income in 1967. The “rich” had gotten richer and the “poor” had gotten richer.
The leftist will also point to inherited wealth as another source of inequality. So-called “unearned” success for the ultra-rich; this belief is merely another symptom of political dogma propagated by Democrats.
A report from The Economist shows that of the 400 Americans with the most amount of wealth as reported by Forbes, more are becoming increasingly “self-made.” In 1982 — when the list first came out — 21 percent of the 400 had inherited their wealth. By 2006, less than 2 percent of the list had inherited that wealth.
This can occur because the United States is built on capitalism. The greatest social and economic system ever created — and also the system that leftists love to hate. Ronald Reagan — whom leftists also hate — implemented many capitalist policies during his tenure in the Oval Office under what is now called “supply-side economics.”
“Underlying most arguments against the free market is a lack of belief in freedom itself.” — Milton Friedman
Part of supply-side economics is to reduce taxes and regulation; these policies are often criticized for benefiting the “rich” and harming the “poor.” Ironically, the top 1 percent pay nearly half of income taxes already, but this is not enough for the Democrats. Moreover, it has become inherent to the leftist doctrine to believe that higher tax rates mean more revenue. This belief is baffling; does a store increase profits just by increasing prices? Like a store when it raises prices, the government will not always get higher revenue with increased rates. This follows the basic Law of Supply and Demand.
One example of the nation receiving less from raising taxes is the tax-equivalent yield which will shift with higher taxes. For example, a potential investor may take a risk on certain investments like a junk bond for the high return instead of a lower-risk/lower-reward investment like a U.S. Treasury bond. However, the latter is tax-exempt from many levels of income taxes; with high tax rates, any potential return on “risky” investments may become lower than securities that are tax-exempt and supposed to carry less reward. This is just one example of money being taken from productive businesses and being put into tax-exempt securities. Understanding this, why would anyone invest in other securities? Specifically, why invest in non-government securities (taxable) when government ones (tax-exempt) offer a higher return?
Once these questions are asked, the results that we have become easier to conceive.
Christina Romer — the Chairman of President Obama’s Council of Economic Advisors — and David Romer, conducted a study at the University of California, Berkeley, and found that the optimal tax rate to be around 33 percent.
Historically, we see the increase in government revenue from lower taxes has been seen numerous times.
While the political dogma that is regurgitated by Democrats may suggest otherwise, we’ve known about the significant impact of lower regulation and tax rates for quite a while. Some of the earliest data that my research yielded, points to tremendous benefits during the 1920s from Presidents Coolidge and Harding.
During the 1920s, the tax rate on those Americans with the highest income was reduced from 73 percent to 24 percent, and the tax revenue received — especially income from those top-earning Americans — increased dramatically. Moreover, in 1920, when the highest tax rate on the highest incomes was 73 percent, individuals with incomes equal to or greater than $100,000 paid 30 percent of all tax revenue. After the tax cuts, individuals in the same bracket paid 65 percent in 1929.
Using this same data, the extremes of both sides of the economic spectrum can be analyzed.
In 1920, those who made $1,000,000 a year or more paid less than 5 percent of income taxes while those making $5,000 a year or less paid 15 percent. In 1929, after the tax cuts, those who made $1,000,000 a year or more paid 19 percent of income taxes while those making $5,000 a year or less paid less than 0.5 percent.
The Cato Institute reported on the 1920s tax cuts and found:
The rising tide of strong economic growth lifted all boats. At the top end, total income grew as a result of many more people becoming prosperous, rather than a fixed number of high earners getting greatly richer. For example, between 1922 and 1928, the average income reported on tax returns of those earning more than $100,000 increased 15 percent, but the number of taxpayers in that group almost quadrupled. During the same period, the number of taxpayers earning between $10,000 and $100,000 increased 84 percent, while the number reporting income of less than $10,000 fell.
As tax rates were cut in the mid‐1920s, total tax revenues initially fell. But as the economy responded and began growing quickly, revenues soared as incomes rose. By 1928, revenues had surpassed the 1920 level even though tax rates had been dramatically cut.
“I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.” — Milton Friedman
Republican states like Utah, Idaho, and Texas have enacted some of these policies and seen incredible growth over the past few years. Texas, specifically, has seen an influx of business coming from companies like Tesla, Oracle, Hewlett Packard, and various other companies trying to escape California’s nonsense. 13,000 businesses have been estimated to leave California between 2009 and 2016. Thousands more are still expected to follow. Erica Douglas — a young tech entrepreneur — moved from San Diego to Austin last year. She writes:
I’m leaving you. I’ve struggled with a government that is notoriously business-unfriendly — with everything from high taxes on earning to badgering businesses to work more to comply with bureaucracy. I paid enough in California income tax in one year alone to hire another worker for my business. And you charge me $800 annually as a corporation fee, when most states charge just a few dollars.
Other Californian policies that have continued to hurt businesses include their minimum wage policies; these policies are consistently harmful where they’re applied. Restaurants in San Francisco were analyzed by the Harvard Business Review, and the conclusions found state that the likelihood of closure for an average restaurant increases 14% with every $1 increase in the minimum wage.
Californian policies are not unique to California. Seattle attempted similar policies regarding their minimum wage and got similar results. According to a study from The University of Washington, low-wage workers made an average of $125 less per month under these new policies. However, this does not take into account businesses that simply shut down — which happened to many restaurants because of the toll on their already low margins.
The aversion towards asperity from Democrats and leftists has made them susceptible to the platitudes of their candidates, along with the corresponding bromidal policies.
Gender and Opportunity
There have been many objections to equality of opportunity from many groups that claim oppression. One of them, unfortunately, are women. The common example, of course, is the so-called gender pay gap.
There is indeed a difference in the median earnings between men and women. I am not disputing that. What I am disputing are claims like the ones made by the American Association of University Women (AAUW):
Over half a century after pay discrimination became illegal in the United States, a persistent pay gap between men and women continues to hurt our nation’s workers and our national economy.
Women working full time in the U.S. are paid 82 cents to every dollar earned by men — but it doesn’t stop there. The consequences of this gap affect women throughout their lives. Though women now outpace men in higher education, women also hold nearly two-thirds of the outstanding student debt in the United States. And because of the gender pay gap, women have a harder time repaying loans. The pay gap even follows women into retirement: As a result of lower lifetime earnings, they receive less in Social Security and pensions. In terms of overall retirement income, women have only 70% of what men do.
These claims are what must be disputed; specifically, the claim of the pay-gap as proposed by the AAUW.
The pay-gap disappears when the relevant factors towards an individual's career are measured: age, hours worked, profession, and education are some of these factors. The assertion that women get paid less for the same work is a myth.
Then why does a pay-gap exist? If discrimination is indeed a negligible factor in the economic outcomes between men and women, how could such a difference exist in the median earnings between the two genders?
There are many reasons, but they are not nefarious. These reasons are the consequence of choice, instead of an overbearing patriarchal structure meant to oppress half of the population.
One example of this choice is the difference in the type of work undertaken.
Since the beginning of the twenty-first century, as the choice for both genders has solidified, men and women have had remarkable differences in certain fields. According to the U.S. Bureau of the Census, women have been 74 percent of what the Bureau classifies as “clerical and kindred workers,” but they have been less than 5 percent of “transport equipment operatives.” Women are also less than 4 percent of the workers in “construction, extraction, and maintenance.” They are less than 3 percent of construction workers or loggers, less than 2 percent of roofers or masons, and less than one percent of the mechanics and technicians who service heavy vehicles and mobile equipment.
Further, a study from The Association for Psychological Science found that as enforced gender equality increased — as in Scandinavian countries — the disparity between representation in STEM fields grew. This is even though women performed just as well or better than their male counterparts. Over time, as gender equality was enforced, men to women in engineering grew to 20:1 and decreased to 1:20 in nursing from previously much more equal levels.
Women in the study chose to go into lower-paying roles. Not because they were less able, but because they were less motivated to go into those specific fields.
Many readers will then ask: Does society force women into these lower-paying, but necessary roles?
First, women are actually happier at work than men. Is society — supposedly controlled by men — forcing women into roles they’re happy in while forcing men into the opposite? Doesn’t seem to make much sense. Further, even though men make up 54 percent of the labor force, they are 92 percent of job-related deaths. This means that men die 10X more frequently than women do at work.
If society is forcing anyone into anything, wouldn’t it be more plausible to conclude men are being forced into roles they’re dying from?
In either case (for men and women), it is important to remember the post hoc fallacy and realize that the disparities between the demographics of men and women — favorable and not — are the consequence of choice — not the corollary of oppression.
Another reason the pay-gap exists is because of the different views on marriage (and children) between men and women.
A study from 1997 to 2012, by the Pew Research Centre, found that the percentage of women aged 18 to 34 who said that marriage is one of the most important things in life rose from 28 to 37 percent. In contrast, the number of young men who said the same thing declined from 35 to 29 percent. The Pew Research Centre also found that among never-married adults who were aged 30 to 59, men are three times as likely as women to say they do not ever want to marry (27% vs 8%).
One study, titled The Inequality Taboo, found that mothers as a group tend to fall furthest behind in income, as competing domestic responsibilities reduce the ability of women with infants and small children to be able to maintain continuous, full-time employment in the workforce. This factor is especially important when it comes to high levels of achievement in the most demanding professions:
In the arts and sciences, forty is the mean age at which peak accomplishment occurs, preceded by years of intense effort mastering the discipline in question. These are precisely the years during which most women must bear children if they are to bear them at all.
A study from Princeton details the impact on married women’s wages and concluded that marriage either does not impact a women’s wages or does so negatively — seldom does marriage lead to an increase in wages for women.
Once again, it may be claimed that society attempts to force women into these undesirable roles, and once again, this does not stand up to scrutiny.
If there is societal oppression that forces women into these outcomes, could the same not be said for men? Men are dying from suicide at rates 3.5–4X higher than women, and comprise 70 percent of the homeless population. Is society forcing men into these outcomes as well? This claim, just as with women, does not stand up to the available evidence.
The final reason I will offer is the difference in time spent at work.
A report from the Harvard Business Review among those people whose earnings were in the top 6 percent, showed that 62 percent worked more than 50 hours a week and 35 percent worked more than 60 hours a week. Among those who held “extreme” jobs — in terms of hours and stress — less than 20 percent were women. Moreover, among those individuals who held such extreme jobs, women were only half as likely as men to say that they wanted to still be working like that five years later.
Further, an article from The New York Times reports that “only 56 percent of the women still worked compared with 90 percent of men” among Yale alumni in their forties.
Another economic report states that the hourly pay of women who work part-time has been found to be 20 percent lower than the hourly pay of women who work full-time, even when comparing women with the same levels of education and the same family circumstances such as being married, divorced, or with dependent(s).
If you work less, you cannot expect to make more.
There is equality of opportunity for women in the United States. Sexism does not run rampant across the country oppressing women. The amount you make has everything to do with what you can offer and, as evident with the offered statistics, practically nothing to do with any tract of intersectionality an individual may vary upon.
Capitalism works, for women.
Race and Opportunity
The idea that capitalism is “oppressive” and “discriminatory” against black and brown people in the U.S. is a complete misnomer. I suppose this misnomer began with slavery, and the idea that slavery benefited the U.S economy; but, in reality, slavery hindered economic growth in the United States.
Further, it is hard to believe that the system through which immigrants and racial minorities thrive is somehow racist.
For example, Asian Americans have a college graduation rate of 74 percent, while white Americans have a college graduation rate of around 64 percent. In high school, Asians spend nearly two hours a day on homework compared to less than one hour a day for whites, Hispanics, and blacks. These traits, habits, and skills appear to build-up for a more successful future.
According to Statista, the median household earnings for Asian Americans is $98,174. The median household earnings for white Americans, in contrast, is $76,057. (Perhaps one of the reasons Asians have lower denial rates than whites for mortgages.)
The story among black immigrants paints a similar picture. The households for black immigrants vs U.S.-born blacks show that the former lives in a married-couple household 50 percent of the time while the latter only lives in a married-couple household only 36 percent of the time. Both of these groups are lower than the entire population which sits at 60 percent. Further, the percentage of black immigrants over 25 that have obtained a college degree is 26 percent compared to U.S.-born blacks at 19 percent. The entire population sits at 30 percent. For African immigrants, specifically, the rate sits at 35 percent. Moreover, household income for black immigrants is $43,800 but is $33,500 for native-born blacks. The household income for South American immigrants specifically, is $55,000. The entire U.S. population has a median household income of $52,000.
Ironically, in a country that is supposed to be systemically racist, Asians have a college graduation rate higher than the “oppressive” whites, much higher earnings, and greater mortgage acceptance rates. Further, black immigrants do remarkably well; African immigrants receive college degrees at a rate higher than the national average, and black South American immigrants have a national median income above the national average. These demographics are doing better than their “oppressor.”
Of course, correlation does not equate to causation, but it does seem as if making thoughtful decisions (i.e. studying in high school, getting a college degree, living in the nuclear family structure, etc.) leads to better overall outcomes. This holds even for those who are not born in a first-world country and must start with relatively little.
Importantly, economic opportunity is not the only issue that must be addressed when talking about race in the United States.
Another is the police.
Statista shows that 432 white Americans were shot to death where 226 black Americans were shot to death in 2020. Nearly double the white deaths compared to the black deaths. For unarmed shootings in 2020, according to The Washington Post, 23 unarmed white Americans were shot to death by police. Using the same criteria, it can be found that 18 unarmed black Americans were shot to death by police.
Using this data, there is a claim blacks are 2–3X more likely than whites to be killed by police. This, however, is extremely misleading. Blacks are 2–3X as frequently shot by police, but that is because of the circumstances blacks are more likely to be in. Black Americans compose ~13 percent of the population but commit 50 percent of the homicides and 60 percent of the armed robberies. In New York, black residents are 74 percent of shooting victims, but only 24 percent of the population.
The reality is that police interact with black Americans more frequently and under different circumstances because of the high rates of crime committed by black individuals.
The NBA presents a similar situation: the percentage of NBA players that are black is 74 percent. This means that the referees will interact with black players at rates far higher than other racial groups — this also means the number of fouls called on black players will be much higher than whites, Asians, Hispanics, etc. This does not mean that the referees are racist.
Unfortunately, this allegation is being made against the police and it is affecting their ability to keep Americans safe.
The former mayor of Chicago stated:
“We have allowed our police department to get fetal, and it is having a direct consequence,” Mayor Emanuel said last week. “They have pulled back from the ability to interdict . . . they don’t want to be a news story themselves, they don’t want their career ended early, and it’s having an impact.”
One officer said, explicitly, “When I’m driving by, I have to think about whether I want to be on the news, and what it means to my career.”
Additionally, it was found recently that the “defund the police” movement led by Black Lives Matter has resulted in a 2000% rise in homicides in Portland.
The police are being slandered, defamed, and attacked for something that they aren’t doing. This “guilty before proven innocent” mentality is a motif that seems to be ingrained in leftist ideology.
Societal dogma would suggest that all officers are racist, but these allegations don’t hold up against the evidence.
In fact, the opposite appears to be true when analyzing police encounters between white and black suspects; a recent study reported on by The Washington Post states that police officers are more likely to shoot white suspects:
Now to the shooting scenarios. With all other variables constant, “officers took significantly longer to shoot armed black suspects than armed white suspects,” an average of 0.23 seconds slower, James wrote. When looking at shooting errors, where an unarmed suspect is wrongly shot, “officers were significantly less likely to shoot unarmed black suspects than unarmed white suspects.” Of the wrongful shootings, white people were shot 54 times and black people were shot twice. Adjusting for the fact there were fewer black scenarios, “we found that officers were slightly more than three times less likely to shoot unarmed black suspects than unarmed white suspects.”
Another study from Harvard by Professor Roland G. Fryer (a black professor) shows that there is “no difference” between the use of lethal force among black and white suspects. However, this same study notes that black suspects are more likely (50%) to experience non-lethal force. This is often brought up by leftists in an attempt to detract from the fact that black suspects are more likely to initiate lethal force, and this act of non-lethal force may be done in an attempt to stop this from happening.
This is still concerning, but it is a far cry from the allegations of the Left. Certainly not the narrative that has ravaged phone screens, televisions, and media outlets this past year.
Racial minorities have more of a chance to succeed in the U.S. than any other country in the world; this is in direct contrast to leftist messaging that suggests racial minorities are persecuted on a regular basis and not given the chance to thrive.
Capitalism works, for all races.
Don’t tread on me
The meaning of life, as I have come to define it, is to orient yourself towards the greatest good through which you can perceive, without sacrificing yourself to others, nor demanding they sacrifice themselves for you. This definition shapes the way that I write, speak, think, and ultimately, live. The consequences of holding such a doctrine will be my own to confront — the good and bad.
From everything I have read and experienced, it seems that there are three main tenets of an individual’s hierarchy of values that allow them to function as a virtuous person: loyalty, courage, and honesty. Loyalty to your values, courage to stand up for those values, and honesty about what those values are and if you need to change them. Without such a foundation, an individual becomes trapped in nihilism and cynicism as their hierarchy of values denigrates with the suffering embedded in the human experience.
And why be virtuous?
Because tragedy and suffering are inevitable, but they can be dealt with in a way that does not require your life to be consumed by the chaos you are constantly threatened with.
What does this have to do with capitalism?
Capitalism is the political, social, and economic implementation of a system that believes in individual rights and free will; specifically, the right to think and act for yourself. This implementation is absolutely critical for individuals to define their own moral code — and then to act through it.
You must take responsibility for your own life and your own success. There is no one else to blame. This is not untrue for capitalism; if anything, this is made even more true by this system.
Unfortunately, it has become evermore popular to play the martyr for inequality; individuals flee responsibility and its burdensome path to find a more expedient pleasure in martyrdom and victimhood.
Combinations of the zero-sum, compositional, and post hoc fallacies (along with many others) have aided the confirmation bias so many individuals use to portray themselves as a victim.
While I cannot prove a negative, hopefully, the evidence provided will allow readers to challenge this narrative of the Left that they are bombarded with.
You are not a victim, stop acting like it. Use the opportunity that is in front of you and stop blaming others.