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March 15, 2010

Class Conflict in Obama's America

By Steve Bartin
Lately, there's been much talk about the generous compensation of government workers. This is understandable after a long recession in which many private-sector workers got laid off or took cuts in compensation levels. As USA Today reminds us, federal pay has surpassed private-sector wages. Since private-sector workers pay the taxes that fund government workers' wages, conflict exists.

Marxists have long stated that class conflict exists between workers and the owners of capital. Marx and his followers were wrong about that. Class conflict exists between taxpayers and tax-consumers. As the nearly forgotten nineteenth-century politician John C. Calhoun stated:

The necessary result, then, of the unequal fiscal action of the government is, to divide the community into two great classes; one consisting of those who, in reality, pay the taxes, and, of course, bear exclusively the burthen of supporting the government; and the other, of those who are the recipients of their proceeds, through disbursements, and who are, in fact, supported by the government; or, in fewer words, to divide it into taxpayers and tax-consumers.
But the effect of this is to place them in antagonistic relations in reference to the fiscal action of the government and the entire course of policy therewith connected. For the greater the taxes and disbursements, the greater the gain of the one and the loss of the other -- and vice versa. Consequently, the more the policy of the government is calculated to increase taxes and disbursements, the more it will be favored by the one and opposed by the other.

Calhoun's line of thinking is simply ignored by university intellectuals and the liberal mainstream press. Calhoun's libertarian class analysis has survived in the last several decades by libertarian economists Murray Rothbard and Hans-Hermann Hoppe. To libertarians like Rothbard and Hoppe, private-sector workers earn their wages through satisfying consumer wants by means of voluntary cooperation in the marketplace. The public sector earn their compensation through theft by majority-rule democracy, the political means. Theft through majority voting is highly effective when government workers are given the right to vote.

The results have been rather lucrative. Why else would public schoolteachers be so involved in America's political process? But teachers aren't the only rent-seekers. Ten percent of Massachusetts state troopers make more than their governor. Over 3,600 California prison guards make over $100,000 a year. Madison, Wisconsin's highest-paid government worker, is a bus driver making $159,258 a year.

To get the welfare state off the radar in America, an ideology was needed to push on the public. Before 1913, there's wasn't much of a welfare state in America. Without a central bank and an income tax, the ability to finance an activist government was virtually impossible. John Dewey and other intellectuals, in early twentieth-century America, promoted a vision of an increasing public sector based on cooperation and altruism unencumbered by the profit motive. This mindset would have us believe that those who don't work for a institution based on a quarterly profit basis are "public spirited."

Public Choice economists James Buchanan and Gordon Tullock have pointed out that self-interest doesn't disappear in the political process:

[A] significant factor in the popular support for socialism through the centuries has been the underlying faith that the shift of an activity from the realm of private to that of social choice involves the replacement of the motive of private gain by that of social good. Throughout the ages the profit-seeker, the utility-maximizer, has found few friends among the moral and the political philosophers. In the last two centuries the pursuit of private gain has been tolerated begrudgingly in the private sector, with the alleged "exploitation" always carefully mentioned in passing. In the political sphere the pursuit of private gain by the individual participant has been almost universally condemned as "evil" by moral philosophers of many shades. No one seems to have explored carefully the implicit assumption that the individual must somehow shift his psychological and moral gears when he moves between the private and the social aspects of life.

Government workers are reliable voters for politicians that will vote for higher taxes and more government spending. The great nineteenth libertarian thinker Herbert Spencer predicted what socialism and the welfare state would bring:

All socialism involves slavery.


What is essential to the idea of a slave? We primarily think of him as one who is owned by another. To be more than nominal, however, the ownership must be shown by control of the slave's actions-a control which is habitually for the benefit of the controller. That which fundamentally distinguishes the slave is that he labours under coercion to satisfy another's desires. The relation admits of sundry gradations. Remembering that originally the slave is a prisoner whose life is at the mercy of his captor, it suffices here to note that there is a harsh form of slavery in which, treated as an animal, he has to expend his entire effort for his owner's advantage.

In modern-day America, some state governments already exhibit disturbing elements of slavery. The state constitutions of New York and Illinois clearly state that government workers' pensions can't be diminished. Thus, taxpayers are responsible for generous compensation that they will not get but are coerced into paying. Historically, the purpose of a constitution is to enumerate and limit the power of government, not to enshrine special privileges for a special class of individuals.

In the coming years, the war between those who pay taxes and those who receive them will only increase. It could be college students who feel they are entitled to pay tuitions cheaper than grammar school tuitions or government workers who can retire at 42 instead of 65. Taxation without representation has long been a powerful rallying cry in America. In the near future, we may be hearing a derivative of that famous slogan: no representation without taxation. Many are beginning to question whether low taxes are possible with government workers allowed to vote.

Steve Bartin is the editor and publisher of Newsalert, Overpaid Government Worker , Newsfeed Alert, and a contributing editor to New Geography.
on "Class Conflict in Obama's America"