Edge of the Cave

Marx lived in abject poverty with his wife and children while writing his economic and political treatises. He believed that Communism would naturally prevail in modern civilized nations and that Capitalism necessarily fails because of its innate flaws. The economic power in Free Enterprise Capitalism would naturally gravitate to center points, leaving the majority to work uninspiring jobs for the fortunate few that accumulated most of the wealth. He felt that labor was the essence of man and that without creative and inspiring work man could not be fulfilled. Capitalism would force the masses to go through the motions of work that would be external to themselves and not a part of their fulfillment. Revolution would be inevitable.

Marx argued that society's economy should receive from each according to their ability and give according to their need. What he did not take into account was that Communism by its nature would take away an even more vital need of man's spirit-freedom. Who is to decide what work one will do? Who is to decide how much work is necessary and what needs are enough? In a free enterprise system one man can decide a one room house is enough and work toward that vision of shelter yet another has the freedom to work for a larger, more comfortable abode. One can decide to work at a job not necessarily attractive to others because the reward for an hour's work will be more. Not everyone will choose to live by the sea because of the additional cost. These decisions are made naturally and freely without the meddling politics of a Communistic bureaucracy.

Communism died with the fall of the Berlin Wall. Most Americans felt vindicated as the cold war dissolved with the failure of the Communistic experiment. The lingering question is whether Marx's prediction of the inevitable failure of Capitalism falling under its own weight might still come to pass. The answer to that query is that pure Free Enterprise Capitalism will surely fall because it is statistically certain that eventually too much wealth will fall in the hands of too few and the downtrodden masses will revolt.

The good news is that our society has been wise enough to avoid some of the pitfalls of Free Enterprise. Scholarships and loans are available for college. We can send our children to free public school. Society shares in public works such as roads and highways. Our government, armed with antitrust laws, reviews corporate consolidations to avoid monopolistic threats to competition. All of these efforts help lift more Americans into a position in which there is a realistic chance for them to compete in a meaningful way.

Yet even with these adjustments to free enterprise the playing field in our economy is certainly not a level one. A tiny group of individuals own most of the assets and income available in our economy. This monopoly of ownership is toxic to the fundamental need for a Free Enterprise economy to work. There must be a ready ingress and egress into the market for those who chose to work and compete. The following graph is a dramatic demonstration of this problem.

Share of national wealth by percentage of population. - Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000 (Original graph by Devesh Kumar)

Bill Gates, the richest of the American entrepreneurs recognizes this as a problem. He has put back into the economy billions of his dollars in projects such as education that will help level the playing field. Interestingly he did not inherit his money or luck into it when oil was found on the family farm and he, along with others such as Warren Buffet do not believe huge fortunes should be left for those who didn't earn them. He is leaving his daughter ten million dollars-a lot of money by most standards but a small percentage of the billions he could leave.

Putting assets from huge accumulations of wealth back into the economy is not only the right thing to do but is necessary for the survival of our system of economics and for the continued enjoyment of those most in position to take advantage of it. It isn't just an issue of morality or ethics but of common sense and self-interest.

This brings me to my point. I think it ill advised for George W. Bush to cut the taxes of the most rich or to fight an inheritance tax that would help promote fairer competition among those of the next generation. Those who can most avail themselves of the advantages of our economy will still be able to do so. They will still have much of their fortunes and contacts from Yale's Skull and Crossbones Society. More importantly they will avoid the redemption of Karl Marx from his grave as the weight of inequity crumbles under the feet of the privileged.