02 Economics – Gary North

Envy and Poverty

by Gary North

http://www.lewrockwell.com/north/north548.html           

In 1966, the German sociologist Helmut Schoeck wrote a classic book, Envy: A Theory of Social Behavior. He argued that envy is the root cause of socialism and other forms of compulsory wealth redistribution.

Most people think the cause is jealousy. The jealous person says: “You’ve got something I want. I’m going to take it away from you.” Schoeck said this explanation misses the more intransigent underlying outlook: envy. “You’ve got something I want. I can never possess it. So, I’m going to destroy what you have. I don’t want anyone to have it until everyone can have it.”

Schoeck said that a jealous person can be bought off. He is willing to settle for a piece of the other person’s action. The envious person can’t be bought off. The fact that someone else is in a position to buy him off enrages him. His sin therefore is self-reinforcing.

Envy undergirds socialism, he argued. He therefore concluded that it is impossible to buy off hard-core socialists by offering to share a larger percentage of national wealth with them. They will not go away. They will demand all: complete equality. Will this undermine economic production? They don’t care. They are not jealous. They are envious.

Schoeck recognized that envy was one of the medieval church’s seven deadly sins. He believed that generations of preaching against envy was one of the pillars of Western economic growth — one that has not been widely recognized.

The New Testament’s position is that every sin is deadly. “For whosoever shall keep the whole law, and yet offend in one point, he is guilty of all” (James 2:10). “For the wages of sin is death; but the gift of God is eternal life through Jesus Christ our Lord” (Romans 6:23). But envy is surely a sin to be avoided.

There is a common phrase in English: “I really envy you.” It is harmless. It is actually a kind of compliment. A person has done well. The other person acknowledges this.

Yet in some cultures, the phrase would be considered a threat. In such societies, envy is never mentioned except as something totally evil. There is a widespread fear of it and its effects. People believe that either the gods or practitioners of “the evil eye” are ready to bring negative sanctions against anyone who gets too high in society, other than agents of the gods. People who are successful therefore hide visible signs of their success. They accumulate wealth in forms that are not easily detected.

One result is that people with wealth hesitate to cooperate with those who do not have wealth. They separate themselves, out of fear of being envied. They do not want the stigma of visible wealth. So, they do whatever they can to avoid contact with people who might become envious. This reduces the division of labor. People who could learn about what it takes to become productive are not given the opportunity.

For well over a thousand years, the church preached against the sin of envy. This preaching had a positive effect wherever it took hold in people’s thinking. Listeners were hesitant to indulge in the sin of envy. They had been warned of coming judgment against the envious.

The story, more than any other, which served as the vehicle for sermons against envy was the story of Cain and Abel.

THE SIN OF CAIN

Both men brought a sacrifice to God. Cain’s was agricultural. Abel’s was a dead animal: shed blood. “And Abel, he also brought of the firstlings of his flock and of the fat thereof. And the LORD had respect unto Abel and to his offering: But unto Cain and to his offering he had not respect. And Cain was very wroth, and his countenance fell” (Genesis 4:4—5). His fallen countenance was visible to God. God warned him: “If thou doest well, shalt thou not be accepted? and if thou doest not well, sin lieth at the door. And unto thee shall be his desire, and thou shalt rule over him” (Genesis 4:7). Cain’s problem was internal. Sin lay at the door, ready to devour him.

Here was his situation. He could not get praise from God directly. He could trade his agricultural output with his brother. He could buy an animal to sacrifice. But he was unwilling to do this. He was not willing to admit that he had a less desirable sacrifice to offer. God was being unjust. But, since he could not get even with God, he got even with his brother.

An acceptable solution was free trade, but he preferred violence. Even though his act of murder would increase his guilt, thereby making his agricultural sacrifice even more useless, he did not care. He killed his brother.

By slaying his brother, he made his situation worse. He was deeper in the clutches of sin. Sin was now well inside the door. He owed God more, for his sin was greater. He would pay a heavy price. This text was familiar to Western audiences for over a thousand years.

And now art thou cursed from the earth, which hath opened her mouth to receive thy brother’s blood from thy hand; When thou tillest the ground, it shall not henceforth yield unto thee her strength; a fugitive and a vagabond shalt thou be in the earth. And Cain said unto the LORD, My punishment is greater than I can bear. Behold, thou hast driven me out this day from the face of the earth; and from thy face shall I be hid; and I shall be a fugitive and a vagabond in the earth; and it shall come to pass, that every one that findeth me shall slay me (Genesis 4:11—14).

Cain’s overt sin was murder, but his act of murder was grounded on the sin of envy. He wanted to tear down his brother, despite the fact that he himself would be made much worse off. This did not stop him. In his view, it was better to kill his brother because of God’s slight to his honor, rather than to offer to exchange a part of his output in exchange for part of his brother’s output. He preferred violence to exchange.

He offered Abel no way out. For a man consumed by envy, the target of his envy has no way out.

ABRAHAM’S WELLS

Less familiar is the story of Abraham’s wells. When his son Isaac returned to the land of Philistia, these wells were filled with dirt. “For all the wells which his father’s servants had digged in the days of Abraham his father, the Philistines had stopped them, and filled them with earth” (Genesis 26:15).

What had been the point of filling up the wells? A well was a source of wealth in the desert. When Abraham left the region, the Philistines could simply have commandeered the wells, “in the name of the People.” But they didn’t. That would have meant acknowledging that Abraham had created wealth through his efforts and capital, when they had not been able to. Even though the stolen water would have made them better off, they preferred to fill in the wells. They resented the wells as symbols of Abraham’s advantage over them. Surely, they did not offer to buy or rent his wells.

This destructive mentality may seem crazy to modern men, yet a similar attitude toward other people’s advantages exists in today’s society. The constant cry against inequality of all kinds has escalated for almost two centuries.

Among those who demand equality, there are few who pursue it personally. The demand for equality today come from politicians who live in luxury or professors in elite universities, who are paid huge salaries for doing little work and who are protected for life by tenure contracts that prevent them from being fired.

As envy has increased, government intervention into the economy has followed in its wake. Yet economic inequality remains. The thousands of programs that were legislated because they would produce more equality have all failed to do so. These programs hamper production by substituting bureaucratic control (negative sanctions) for free market profitability (positive sanctions). They substitute fear for optimism. So, they lead to a smaller pie. Meanwhile, inequality remains or even increases, as it did in the Soviet Union. Yet the defenders of equality demand more of the same.

There is nothing like someone else’s well filled with water to upset the defenders of equality. They will do whatever they can to remove it from their presence.

A SELF-TEST FOR ENVY

Let us say that two politicians come before you, seeking your vote. Each offers a different scenario.

  1. A world in which American economic growth will remain at 2% per year, but with China growing at 5% per year. At some point, the Chinese will be richer than Americans. “Vote for me. I’ll do nothing about China.”
  2. A world in which America’s economy grows at 1% per year, but China’s also grows at 1% per year. America will retain its supremacy in per capita income. “Vote for me. I’ll stick it to China, good and hard.”

If you choose scenario #1, you do not suffer from envy. You understand that 2% a year is better than 1% a year. More is better than less. What China does is a concern for China.

There is something else to consider. Would you rather buy the nicest home in a lower-income neighborhood or the smallest house in a rich neighborhood, if you could buy either one for the same amount of money? Real estate investors recommend the latter. The better your neighborhood, the more likely you will find a rich buyer for your house if you ever decide to sell. Meanwhile, you may get invited to parties where you can meet new contacts — contacts with a lot of money.

If China can keep growing at 5% a year — it is said to grow at 8% — year in and year out, then residents of the United States will eventually have to content themselves to keeping up with the Joneses. The Wongs will be way out of reach.

How do the Wongs make their money? By increasing their output. They invent new gadgets, find ways to cut costs, and generally increase the amount of goods that are available to buy.

If, five decades from now, rich people in China will be able to afford to buy the equivalent of Star Trek’s hologram decks, while most Americans will have to content themselves with Chinese-made, wall-size, 3-D video screens, so what? If you like video, 3-D screens are better than what we have today.

A person consumed by envy compares what he has with what those in a different postal zip code have, and he curses the universe because he has not done as well. Not being able to do anything about the universe, he contents himself with voting for policies that will take away the advantage that residents in the other zip code possess.

Meanwhile, people living in lower-income zip codes organize politically to get legislation passed that would cut residents of the better zip codes down to size. And so it goes, zip code by zip code. “We’ll get even with you!”

It should not matter to anyone how well the residents of other zip codes are doing. What should matter is whether he can avoid having to move into a lower-income zip code, due to circumstances beyond his control, or whether he can afford to move up, due to circumstances within his control. What should matter most of all is whether there is sufficient economic growth to let people in his zip code do better, year after year. How well the other zip codes are doing ought to concern him only in his capacity as a charitable donor or in his capacity as a marketer.

INEQUALITY: AN INESCAPABLE CONCEPT

It is never a question of inequality vs. equality. It is always a question of which kind of equality, enforced by whom.

Politicians cannot safely say this. They must pretend to promote this or that program that is guaranteed to increase equality. (Note: there is no money-back guarantee.) The best we can hope for is that the program confiscates half the water in someone’s well. This will lead to a reduced number of future wells.

Of course, the debate isn’t over water wells these days. It’s over oil wells.

When this debate escalates, it moves from sharing wells to bombing wells. Or maybe the debate doesn’t escalate at all. After all, Cain did not escalate his debate with Abel. Instead, he launched a pre-emptive strike.

If only there were a political party that would come out foursquare in favor of inequality — an inequality based on the decision of each consumer to buy from one person and not all the others offering things for sale. Its slogan would be taken from Mel Brooks’ script for The Producers. “If you’ve got it, flaunt it!” That’s a lot better than the operational slogan of the envious society: “If you’ve got it, hide it!”

We are not created equal. Rather, we are created responsible. This has been preached by churches for two millennia. A social order should pursue personal responsibility. It should enforce this rigorously in its courts. But when people of varying talents pursue their ends responsibly, without resorting to fraud or violence, the result is inequality. Why? Because people have different skills, capital, experiences, possessions, and opportunities. They face different consumers. F. A. Hayek put this choice clearly in his book, The Constitution of Liberty (1960). The courts must either treat people the same legally and therefore allow inequality, or else treat them differently in a futile attempt to create material equality.

From the fact that people are very different it follows that, if we treat them equally, the result must be inequality in their actual position, and that the only way to place them in an equal position would be to treat them differently. Equality before the law and material equality are therefore not only different but are in conflict with each other; and we can achieve either the one or the other, but not both at the same time. The equality before the law which freedom requires leads to material inequality.

CONCLUSION

We find ourselves in a political world whose representatives assure the voters that the government is pursuing equality as a moral principle. Then these agents use the government to confiscate wealth in order to expand the operations of the state and benefit special-interest groups. They do this in the name of the People.

The age of envy is with us still. So, until this changes, I leave you with this advice: “If you’ve got it, hide it.”

July 18, 2007

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 19-volume series, An Economic Commentary on the Bible.

Copyright © 2007 LewRockwell.com

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