09 February 2009

An Inalienable Right to a Trust Fund

Boston Globe “Ideas” section columnist Rebecca Tuhus-Dubrow recently penned an article about one of the innumerable bright ideas coming out of the woodwork in the recent orgy of government intervention:

[A] growing movement argues that every baby should be a trust fund baby: a modest trust fund should be a basic right, like education and adequate nutrition.  By opening a savings account for every American newborn, the thinking goes, the government would give all citizens a foothold in the financial system, as well as access to a nest egg, however small.  [Note 1.]

The first thing that jumps off the page in that quote is that education and adequate nutrition are not “basic rights” at all, so to append trust funds to the long list of these alleged “rights” is unwarranted right from the start.  Of course, parents should not be allowed to put their children in a box, depriving them of life-sustaining nutrition and mental activity, but that sort of abuse would be addressed by a proper set of laws that defends individual rights.  The implication of the article is that it is the province of the federal government to provide education and nutrition for its citizens - and by extension, it ought to provide universal trust funds as well.  With this logic, it is hard to imagine anything perceived as a value not being assigned the status of a “basic right.”

The reason that such values must not be regarded to be “basic rights” is that the enforcement of such “rights” necessarily violates actual rights.  There is only one fundamental right: an individual’s right to freedom of thought and action, admirably expressed by the Founders as the right to life, liberty, and pursuit of happiness.  The government cannot provide education, nutrition, or trust funds - not to mention prescription drugs, food stamps, research grants, bicycle helmets, coupons for new television sets, condoms, etc. - without taking those things by force from somebody who has produced them.

But even if we set aside the immorality of seizing the work of some people to redistribute it to others, the logic of the “universal trust fund” camp is preposterous.  If their goal is truly to “foster a culture of savings,” how is this advanced by removing the responsibility of saving money from individuals and assigning it to the government?  That is like saying that since some children have trouble completing their homework assignments, the state will henceforth do the homework for all children - and this will somehow promote a “culture of doing homework.”  Obviously, the exact opposite is true.  Fewer children will do their own homework when it is done for them.  And for the same reason, fewer people will save their own money when it is done for them.  

If politicians are concerned about Americans’ lack of responsibility in saving their money for the future, they need look no further than the Social Security system that their legislative predecessors created.  This absurd Ponzi scheme, which promises every American great expectations for his retirement, was bound to discourage personal savings.  The deterioration of personal responsibility for retirement planning was manifestly predictable.

Even a cursory understanding of human nature reveals that shielding people from the consequences of their actions (or inactions) does not foster or invigorate an effort to improve.  On the contrary, it discourages improvement.  The people who were not lifting a finger to help themselves before will certainly not start to do so when the government steps in to relieve them of the pain that their apathy would have inflicted.  In fact, in a perverse reversal of apparent intent, many average citizens who would otherwise have cared for themselves will have an incentive to surrender that function to the government.  It will be only the very rare and remarkable individuals who will resist the suffocating intrusion of the government and attend to their own selfish interests.  The appalling injustice is that it will be only those exceptional people who will end up producing anything at all.  They will be the hosts to the parasites, whipped and bled as they toil for the rest.

It is bewildering to me how the bleated demands for a paternalistic government and a welfare state can be sustained in light of its most obvious illogic and its historical failures.  Whatever the modern “liberal” worldview can claim as being true in its fantasy universe, it certainly does not pertain to this world.  It’s puzzling, because there is no shortage of smart people involved.  I do not doubt that the progressive brain trust, the left-leaning intelligensia, has earned its haughty confidence - a confidence not harmed by the habit of attending cocktail parties populated entirely by like-minded comrades.  In constructing their social programs and their five-point plans, they have surely accounted for every psychological, physiological, sociological, and economic Ph.D. thesis written in the last hundred years (excluding only those that did not conform to their preconceptions, of course).  Still, it would have been better if they had simply accounted for actual human beings.

The Globe article manages to sneak in another shopworn idea, the falsehood of which should be plain to all: the notion that “wealth inequality” is a problem.  The author writes that universal trust funds “could help remedy the overlooked problem of wealth inequality, or disparity in assets, which dwarfs even the income gulf between rich and poor.”  The idea that my immediate wealth is made greater or less by my neighbor’s wealth is absurd.   What matters to a man is his own wealth, not the ratio of his wealth to that of rich people.  Many things in the universe may be relative - the motion of my body compared to that of the moon, for instance - but the requirements of a human being to live and flourish are not.  They are absolute.  

When I sit down to eat a meal that I have earned, I am not suddenly impoverished by the fact that someone in the world has produced a value.  My salary did not drop when Alex Rodriguez signed a contract to play baseball for $24 million per year.  The car in my garage was not suddenly worth less when Microsoft released its latest operating system, nor did my television set drop in value when Cypress Semiconductor introduced a new product.  If anything, the fact that people who are unimaginably wealthier than I am exist in the free world signals a great advantage for me, since it indicates a high level of productivity that will permit me to obtain more even with my lesser means. 


The complaint against “wealth inequality” suffers from at least three errors.  First, it is blatantly second-handed to judge one’s own success or failure by comparing oneself to others.  Second, it depends upon the false notion of static wealth - the idea that the world is one fixed pie, and to grab a piece constitutes taking it away from someone else.  Third, and the most immoral of the lot, to demand the equality of wealth distribution is to demand injustice, since it deliberately divorces efforts from rewards.

Finally, I’ll mention one more point in the article: a particularly galling comparison made by Ray Boshara, the director of the “asset building program” at the New America Foundation.  “In support of children’s savings accounts,” states the Globe article, “Boshara compares them to other great American policies such as the 1862 Homestead Act, which gave 160 acres to anyone willing to live on the land and work it for five years.”  This is outrageously disingenuous.  The principles involved in the Homestead Act are diametrically opposed to those of children’s trust funds.  The sentence from the article itself contains the key word that renders it false: work.  The Homestead Act did not grant land to every citizen; it issued deeds only to those that earned it.  The children’s savings program conspicuously eschews the notion of earning by unconditionally granting funds to everyone.  Furthermore, as the agent of the Homestead Act, the government did not first seize land that belonged to others, then redistribute it.  The land was unused and unowned.  In contrast, the children’s savings accounts would be funded by money taken from taxpayers.  In short, the Homestead Act is a model of good government, while the children’s trust fund is a model of nudging tyranny.  To compare the two is shameful.


1.  Rebecca Tuhus-Dubrow, “Cash on Delivery,” http://www.boston.com/bostonglobe/ideas/articles/2009/02/01/cash_on_delivery/.   


C. August said...

Great job. Thanks for tackling this terrible article and idea. I read it last week, but was so angry about it that--though I knew it was chock full of blog-worthiness--I simply couldn't stomach taking the time and care to analyze it and break it down. In fact, I stopped reading it after about the first thousand words. It was just too awful.

You astutely observed the absurdity of the claim that they want to "foster a culture of savings" by removing the responsibility of saving from the individual. When I read those words, the first thing I thought of was how absurd it is that the government has been fostering a culture of debt and inflation for decades, and now it should suddenly start pushing fake savings? How about they just decide that the two things cancel each other out, and they just butt the hell out of our lives altogether?

I know it wouldn't help them enforce my basic right to a ham sandwich, but perhaps it would be the most pragmatic solution. (I know, I know. I have my ticked off, sarcastic hat on right now.)

Stephen Bourque said...

Ha! Well, we laugh now, C. August, but the "basic right" to a ham sandwich might not be that far away!