Greed Is Good?

The debate over raising the federal minimum wage has elicited weeping and gnashing of teeth on both sides, but the policy itself is less important than what the wailing on the Right has revealed.

“Simply put, the minimum wage stops labor markets from operating effectively,” the editors of National Review write. We must, they insist, heed the “basic economic principles” conservatism has declared universally valid.

The religion of the dollar established by conservatism holds that tax cuts and deregulation are the proper means by which wages can and should increase. Slash those, and incomes will rise as sure as the sun. But a new study from the London School of Economics shows that a half-century of praying at the free-market altar has benefitted very few.

From 1965 to 2015, the incomes of the rich grew much faster in countries where tax rates were lowered. Wealth, it turns out, doesn’t trickle down. “We find that major tax cuts for the rich push up income inequality, as measured by the top 1% share of pre-tax national income,” the authors wrote. “The size of the effect is substantial: on average, each major tax cut results in a rise of 0.8 percentage points in top 1% share of pre-tax national income.” The study concludes that “economic performance, as measured by real GDP per capita and the unemployment rate, is not significantly affected by major tax cuts for the rich.” 

This trend continued under former President Donald Trump, whose tax cut and deregulation regime accelerated the offshoring of jobs, resulted in billionaires paying less in taxes than middle-income Americans for the first time in our history, and stock-buybacks to soar to the tune of trillions of dollars. Under Trump, gains for the middle remained anemic while incomes for the lowest earners received significant boosts thanks to state minimum wage increases. It is telling that the champagne conservatives who otherwise despise Trump praise his economic legacy. 

Put simply, wages and benefits do not rise for anyone but those the economic power structure is designed to serve. The market is not “free” at all; it only offers the illusion of freedom until it is time to slam shut the gate—and conservatives know this, as the GameStop stock short-squeeze scandal showed. 

When Robinhood Financial engaged in overt market manipulation by halting trading, National Review’s Daniel Tenreiro assured us that it “feels wrong, but in a certain sense, it’s the market working. In efficient markets, counterparties are supposed to correct bubbles.” The system is rigged, but only the professionals are allowed to do the rigging, for our own good and theirs. 

The Daily Wire’s Ben Shapiro added, “undermining confidence in the pricing mechanism of the market to make some quick cash and screw those guys”—that is, Wall Street short-sellers—“isn’t virtue.” In other words, the market isn’t free, but those of us it is not designed to benefit must pretend it is so that it may continue operating effectively.

There are valid counterpoints to be made about raising the minimum wage—whether an increase is too much, too fast, or poorly timed, and how it may affect small businesses. But these are now secondary questions in a broader battle of competing national visions. Is America an economy with a country, or a country with an economy? 

Contemporary conservatism has, in fact, facilitated the corporate consolidation of the economy by entities that are actively hostile to the small businesses they hold up as props. If it stood for anything other than avarice, it would champion private-sector unionization as a mechanism for raising wages through bargaining and promote penalties for globalization, which is harmful both to the mom-and-pop shops and to workers. 

Instead, conservatism attacks labor, celebrates globalization, and demands Americans live by the lie that the system is anything but stacked against them. 

Conservatism has conserved nothing because it ultimately stands for nothing other than greed.


About Pedro Gonzalez

Pedro Gonzalez is associate editor of Chronicles: A Magazine of American Culture and an adjunct fellow of the Center for American Greatness. He publishes the weekly Contra newsletter. Follow him on Twitter @emeriticus.

Photo: iStock/Getty Images

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