Envy, Asians, and Tariffs
Tea Party Economist
by Gary North: Your
Kids Will Have It Better Than You Do
I have written about envy and its effects for almost 40 years. I
was first alerted to the problem in an article written by Murray
Rothbard: "Freedom, Inequality,
Primitivism, and the Division of Labor." He summarized the findings
of the book written by a sociologist whose name I knew well, Helmut
Schoeck. Schoeck had co-edited a series of books I owned, published
by the William Volker fund in the early 1960s. I bought the book,
and it had a profound effect on my thinking.
thesis is this: envy is different from jealousy, and it is even
more destructive. Jealousy is where someone says: "You have what
I want. I cannot get it on my own. So, I am going to take yours
away from you by force, preferably through politics."
Envy is different.
Envy is where someone does not say anything, but he thinks the following:
"You have what I want. I know that I can never get it. I am going
to destroy what you have, so that you will not be able to enjoy
it." It is the politics of arson.
an observation: you can negotiate with somebody who is jealous.
Maybe you can figure out a way that you could share some of what
you have, and he will be bought off. This is surely what goes on
in modern politics.
made another point: you cannot negotiate with somebody who is envious.
The fact that you are in a strong enough position to offer him something
of value further enrages him. He resents the fact that you have
so much that you might be willing to give up a little of it in order
to placate him. It is your position of strength that angers him.
He wants to strip you of any sign of superiority over him. He does
not want to become beholden to you. If he gained anything as a result
of a negotiation, he would still feel as though you were in a stronger
position than he is. He would far rather see you devoid of whatever
it is that you have than gain anything from you.
In other words,
you can deal with the jealous person; you cannot deal with the envious
person. Envy is therefore a sin that it is almost impossible to
deal with in somebody else.
is, it is very difficult to deal with in ourselves.
The Bible offers
a few cases of outright envy, but the story of Satan that English-speaking
people are most familiar with is the story of envy. It is summarized
in the one line from Milton's Paradise Lost that educated
people remember. Satan makes this claim: "I would rather rule in
hell than serve in heaven." This is the essence of envy. The devil
had a good deal going for him in heaven. But he chose to rebel.
It was better to be thrown out of heaven and cast into hell, in
his thinking, than it was to remain in heaven. Heaven offered a
great lifestyle, but not for someone driven by envy.
The point that
Rothbard made over 40 years ago was this: socialism is driven by
envy, not jealousy. He wrote: "Helmut Schoeck's Envy makes
a powerful case for the view that the modern egalitarian drive for
socialism and similar doctrines is a pandering to envy of the different
and the unequal, but the socialist attempt to eliminate envy through
egalitarianism can never hope to succeed" (p. 287). To the extent
that socialism is based on envy, this assessment is correct. Therefore,
it does no good to attempt to get a settlement with envy-driven
people who are promoting socialism. You cannot persuade them by
showing that socialism is less efficient than capitalism. They do
not care that they would be richer under capitalism than under socialism.
They realize that socialism is a system for tearing down people
who are more successful. Therefore, you cannot placate a socialist
who is driven by envy.
I am convinced
that most people regard certain forms of economic intervention as
a benefit to them. Most people who promote larger government are
jealous people, but not envious. They think that others have gotten
rich at their expense, and all they are really after, they insist,
is a way to settle the score. They will settle for getting more
of what somebody else possesses. They see politics as a way to negotiate
a better deal for themselves at the expense of the minority of rich
there is a hard-core of academic and intellectual leadership within
the socialist movement that really is driven by envy. They really
are not convinced by the fact, which they have believed since 1991,
that capitalism is more efficient than socialism. They still are
outraged by inequality, and they would rather destroy the capitalist
system than negotiate with it. They would rather live in hell than
live in heaven, because heaven is a place of inequality.
I do not think
most socialists believe this. This is why we do not find many socialists
any more. Ever since the collapse of the Soviet Union, it has been
clear to socialists around the world that socialism leads to economic
poverty. It took the collapse of the Soviet Union to convince a
majority of socialists of this position. So, most of them really
are more driven by jealousy than envy. They are out to steal from
the rich rather than destroy them.
I find that
the problem with envy afflicts conservatives as much as it afflicts
socialists. In fact, I am of the opinion that it afflicts them even
worse than today's socialists. Let me explain.
I hear endless
warnings about the fact that Asians are getting rich. This bothers
millions of conservatives. They are ready to impose tariffs and
other restrictions on imports from Asia. They are ready to accept
a high national sales tax on goods manufactured in China, despite
the fact that they say that they are opposed to tax increases. They
always make the exception for tariffs: sales taxes on imported goods.
This has been going on for over 300 years. This was the heart of
the old mercantilist system, which was based on a defense of Empire.
It was a mixed tension of the idea of envy.
Why do I say
this? Because people know that they will suffer more by paying higher
taxes for imported goods. Nevertheless, they think it is a great
idea to reduce imports from abroad. Why do they think this? Because,
as voters, they think in terms of their position as employees, not
as consumers. They are convinced that, because a product imported
from Asia may reduce demand for the product which they manufacture,
they will be better off if there are sales taxes on imported goods.
This is jealousy.
But there are
some hard-core conservatives, meaning envy-driven conservatives,
who really believe that an economy works better in a high-tariff
environment. They understand that they will have to pay more as
consumers, but they do not care. They hate the idea of Asians getting
ahead. They hate the idea of the comparative advantage of anybody.
is this: all trade is based on comparative advantage. Somebody
else does something better than you do, so you trade with him in
order to better your position. People understand this with respect
to the efforts of somebody who lives across the street or around
the block. But they do not believe it, and they argue against it,
when somebody lives across a particular invisible line called the
border. Before the Constitution was ratified, the border was a state
border. Ever since the Constitution was ratified, resistance to
imported goods from other states has disappeared. Everybody accepts
this within the United States. But, with respect to imported goods,
most Americans prefer tariffs.
prefer them because they understand that free trade will advance
foreigners who have comparative advantages in certain forms of manufacturing,
and they resent the idea that foreigners will ever enjoy an advantage
in anything. This is envy, pure and simple. It is the desire to
tear the other guy down just for the joy of seeing him torn down.
of any kind, whether with someone across the street or around the
world, benefits the other person. In some way, he will do better
after the voluntary exchange, or at least he thinks he will. Free
trade advances everybody's wealth. A specific case of free trade
can lead to a loss of income by somebody who is not efficient in
a particular field in the economy. But, if we are talking about
the effects of the system on the lives of all customers, free trade
is universally beneficial. There are enough people across a particular
border who are willing to sell something cheaper, or improve its
quality, so that customers on the other side of the border will
There is no
question that Asians are getting richer, faster, and more widely
than Americans are. Why is this? Because they were so far down.
When you begin to expand the growth of anything, it grows more rapidly
when it is smaller than when it gets larger. Example: some investor
can do very well at the beginning of a successful investment strategy,
but, at some point, the rate of return slows down, because he becomes
a larger player in the particular field. He cannot buy low and sell
high, because he is the biggest guy buying low and trying to sell
in China are, for the most part, poverty-stricken. Most people living
in China live in rural areas that are incredibly poor. But we do
not see them, and we do not hear about them. We hear stories about
a handful of entrepreneurs who were born in poor rural areas, moved
to a city closer to the coast, found a way to become productive
in the export business, and got rich. As a percentage of the population,
there are very few of these people in any society, but because there
are so many people in China, we hear more of these stories.
hearing these stories, which are promoted by people who have no
comprehension of economic theory. Mercantilism is the default
setting of most people most of the time. They want a monopoly
for themselves from government, such as licensing, and they adopt
the philosophy of voluntary exchange that is in fact involuntary
exchange. Adam Smith argued against these arguments in 1776, but
we still find that the average guy is a mercantilist in his thinking.
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North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible.
2012 Gary North
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