There he was at the top of the column on “innovation” in The Washington Post — every dimwit’s idea of the ultimate innovator: Steve Jobs holding up an iPhone. I don’t really understand why it is that people always think that flashy products like smart phones are the true signs of innovation when it is actually more mundane things like container ships and washing machines that have had the biggest effects on our lives. But I know this much is true: when people talk about innovation, they are usually spouting nonsense. Talk of innovation is usually some form of apologetics for aspects of the economy that don’t work right.
The specific column I’m referring to is George Will’s Wednesday outing, How Income Inequality Benefits Everybody. He started the article by discussing how sweatshop labor in China gives Americans a raise because of all that cheap “apparel, appliances and other stuff.” That’s true as far as it goes, as I recently discussed in, Middle Class Is Dying Because of US Policy. But the really expensive and important stuff is not available via Chinese sweatshop labor. Of course, Will isn’t interested in how globalization is making us all wealthy (perhaps because it isn’t). He wants to argue that income inequality here at home is really to all our benefit.
Will is a shockingly boring writer. Here is his list of billionaires: Mark Zuckerberg, Michael Dell, Bill Gates, Jeff Bezos and Steve Jobs. Interestingly, I have a low opinion of each one of these guys. From the non-innovation of Facebook, which is not worth nearly what it is valued at, to the tax evasion that drives Amazon, to the legal bullying that makes Apple a profitable company, these are not guys who have changed the world. Will then referred to “iPod, iPhone, and iPad” as “unique products.” That’s like calling a cool new brand of jeans a unique products. And finally, he wrote that the price of the iPhone has come down. It has not. It’s submental.
The rest of the article is an introduction to John Tamny’s upcoming book, Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You about Economics. But you don’t need to read the book — or George Will’s column — because it is just what you heard month after month during Mitt Romney’s presidential campaign. These wonderful innovators are only there to help us: “when the wealth gap widens, the lifestyle gap shrinks.” And monopolies decrease prices. And the Rolling Stones moved to France because their taxes were 83%. The implication, I guess, is that this means we must lower the top marginal tax rate to 15%. Also: cheery picked numbers rock and opportunity costs don’t exist. Also: the Rolling Stones never would have recorded Let It Bleed if they hadn’t known there were hundreds of millions of dollars to be made.
There are a couple of things that I find fascinating about these excursions into income inequality apologetics. The first is that the arguments are meant to imply conservative policy. But they don’t. People like Will and Tamny seem to be arguing with communists in the 1920s. No one is calling for a 90% top marginal tax rate. But somehow, for these people, if dropping the top tax rate from 90% to 50% is a good idea, dropping it to 15% is a better idea. It just makes no sense, but then it isn’t based about rationality; it is based upon a desire to further enrich their class. Everything flows from that.
The other interesting thing is how conservatives claimed for so long that income inequality wasn’t a thing. Sure, the rich were getting richer, but so were the poor. But now that this myth has been completely destroyed, the conservatives just come up with another argument for why we shouldn’t worry about income inequality. Now they argue that income inequality rocks! We should love it because we can buy five dollar t-shirts at Walmart. We may die from an abscessed tooth, but that’s a small price to pay for all the cheap junk we have access to.
Conservatives will always argue that we do nothing about economic inequality — or that we make it worse. The reasons for this will change. Two centuries ago, they would have argued that God wants it that way. Today they argue it is good for the poor. But the main thing is that the conclusions never change. That’s the nature of apologetics. Let’s just not mistake it for economic or political analysis.