I don’t know what specific insights or truths Salk had in mind, but my nomination for a vitally important truth that we seem to be forgetting is the answer to the crucial question: How did our society become so affluent? Where did all this wealth come from?
At present, millions of Americans struggling with inflation may not feel all that wealthy, but compared to Americans who lived in, say, 1900, the economic differences are enormous. Many American homes during that time still didn’t have indoor plumbing or electricity. In fact, millions of people didn’t have those conveniences until many decades later, and a relative few still don’t have them today, although some of those are by choice, such as my old-order Amish friends. Private automobiles, air travel, mass communications, refrigeration, central air and heating, computers, cell phones—even most Americans who are statistically poor have most of those modern amenities.
It’s easy to take the ready availability of all these creature comforts for granted. After all, most of us alive today have never known life without them. Being practically ubiquitous, the wide array of modern conveniences may seem as natural and permanent a part of the American landscape as the Rocky Mountains or the Mississippi River, but they aren’t. The wealthiest and most advanced civilizations of earlier eras often decayed, collapsed, and even disappeared. Human societies retrogressed. An inability to build on affluence and the resulting poverty displaced comfort as once-prosperous societies disintegrated and wealth diminished or even vanished. It behooves us then to understand what produced America’s wealth so that we can guard and preserve the proverbial goose that laid the golden eggs.
Some will say that the United States is unusually wealthy because we were blessed with abundant natural resources. But if bounteous natural resources are the key to national prosperity, then Russia would be wealthy and resource-poor lands such as Japan, South Korea, and Singapore would be poor. Clearly, being richly endowed by nature doesn’t determine the prevailing economic standards of living in any given country.
There are voices on the left asserting that our country’s great wealth is traceable to slavery. There are at least two major flaws to that argument. One is that the evil of slavery was practiced in many countries that remained relatively poor; slavery per se was no guarantor of national or regional prosperity. The other weakness in the slavery argument is that economic growth in the United States accelerated after slavery was abolished—a function of the fact that mechanization produces wealth at rates far more rapid than human labor, whether free or slave.
A third theory is that mechanization and other technological advances were what propelled the U.S. economy to unprecedented affluence. The proper answer to this explanation is, “True, but ...” Without a doubt, technological developments contributed significantly to our affluence. But, as with slavery, the United States didn’t have a monopoly on new technologies. It certainly wasn’t the case that only the United States had people smart and clever enough to invent and improve various technologies.
The main reason the United States prospered to a greater extent and at a faster rate than other countries was that our political system provided the optimal framework within which economic growth could flourish. First and foremost, property rights were secure in this country. Abundant foreign capital flowed into the United States because investors were confident that they could earn a handsome return on their investments without having to worry about corrupt politicians seizing their capital or venal courts refusing to enforce contracts. There was no predatory political authority nor any entrenched, privileged elite that could prevent industrious entrepreneurs from operating new enterprises and becoming the “nouveaux riches” through excellence in creating value for others.
Government officials didn’t have “master plans” for the economy (looking at you, Green New Deal). They didn’t have a legion of parasitic bureaucrats leeching off of wealth producers. Nor did American governments pick winners and losers through special subsidies, discriminatory taxes, and regulations—or schemes, such as Environmental, Social, and Governance investing. Instead, the various layers of government in America (local, county, state, federal) confined themselves to acting as impartial referees whose function was to enforce the rule of law and let the best enterprises rise to the top.
Was the journey from widespread poverty to widespread prosperity in the United States smooth and pain-free? Not by a long shot. Economic growth has always been accompanied by growing pains. Just think of the jarring transition experienced by the millions of American farmers (85 percent of our population were farmers when George Washington was president) who were forced to give up farming because productivity gains enabled fewer than 2 percent of our population to feed us (and many people abroad, too) in recent decades. But short-term pain led to long-term gains.
George Orwell is reported to have said, “The most effective way to destroy people is to deny and obliterate their own understanding of their history.”
Let’s remember that while there never has been and never will be a perfect economic system, nothing has exceeded the free enterprise system (bizarrely dubbed “capitalism” by Marx and his acolytes) in bringing prosperity to the masses. Free enterprise is the goose that laid the golden economic egg for Americans. We forget that at our peril.
