“When Thomas Jefferson wrote in the Declaration of Independence that ‘all men are created equal, that they are endowed by their Creator with certain unalienable Rights,’ he laid the cornerstone of equality before the law in the foundation of American government, planted the seed that would end slavery in America, and ignited a worldwide liberty revolution that rages to this day.” (The Myth of American Inequality, page 165)

“The dawn of the Enlightenment brought a fundamental change in the wellspring of wealth creation. The Enlightenment affirmed labor and capital as private property, not communal property to be shared with the crown, church, guild, and village. The concept of labor and capital as private property, protected from leeching by communal ‘stakeholders,’ was the fundamental economic contribution of the Enlightenment upon which the modern world was built. The Industrial Revolution grew out of the Enlightenment, and it powered the rapid ascent of all people, especially workers. The plethora of goods and services grew beyond imagination, and the zero-sum world came to an end. . .  This fundamental change, conveniently neglected by various collectivists of various stripes throughout the ages, created a world where wealth can be created instead of redistributed.” (The Myth of American Inequality, pages 166 and 167, italics added)

 

Truth in the Public Square

 

All American political analysts are saying today that the presidential and related federal elections in 2024 will be momentous. The country is deeply divided, and the dominant political parties are saying that America, as we know it—the democratic republic itself—will likely end if they lose. There are even hints of the presidential election of 1860 in the air. The average American person is probably ignoring this exaggeration, but, nonetheless, the November Election is certainly a big one!

As an educational non-profit, Praxis Circle does not endorse political candidates. Our mission’s focus is on the concept of worldview. We want to help you understand what worldview is as a technical academic concept (it’s kind of a combination of philosophy, theology, and pragmatism—encompassing everything in life that’s meaningful), how it can help you, what your worldview(s) is/are, and how consciously to build such a view that you like. If you decide to take such a journey with us, we promise it will help you to be a better and happier person. (It is our worldview that the two go together.)

On the other hand, not only does your worldview affect your politics, it influences your political views and actions in every moment of every day. In that sense we agree with many postmodernists that the personal is political. Therefore, while we do not endorse political candidates, it’s impossible to discuss worldview and implement worldview without political implications. Consequently, in this important American political year 2024, we are going to make a deliberate effort to tackle worldview issues that might add substantially to the quality of our political debate, as American citizens.

When we endorse something as truthful or not, we will be taking political sides, whether we want to or not. The difference between us and them—let’s pick on postmodernists, again—is we believe in truth and are willing to change our views based on our perceived subjective and objective truth based on common goals. We believe every person lives in reality as if truth is objective, both physical and conceptual truth. They are just as “hard” to us. As a result, we admit openly and without shame that we want to emphasize “truth in the public square” beginning today and all year long.

Our worldview argument in 2024 for those who share either our own Classical Judeo-Christian (CJC) or related Classical Human Secularist worldview, which we believe serves as the foundation for the West and America in particular, is that it is high time we got rid of polemic arguments that cite themselves or others as Democrat, Republican, Capitalist, Socialist, Communist, Fascist, Left, Right, etc., and just start talking truth and it’s antithesis, falsehood.

Our worldview is that we have been given truth to build on, and we are in a search for more to make our lives on earth a much better experience. Furthermore, America is indeed doing that today, even though most everyone feels either angry or totally lost in unfamiliar woods.

Now, on to our Book of the Month: The Myth of American Inequality: How Government Biases Policy Debate by Phil Gramm, Robert Ekelund, and John Early, 2022, 183 pages). Actually, we also here offer more brief comments on books authored by two other exceptional economists that we regard as close companions to The Myth of American Inequality: Social Justices Fallacies by Thomas Sowell, 2023, 130 pages) and Marxism Unmasked: From Delusion to Destruction by Ludwig Von Moses, 1952, 2006, and 2019, 112 pages).

Each of these books describe social, political, and economic truths that have been known for between at least 100 to 3,500 years, depending on which truths one is referring to. But the economic truths proven in The Myth of American Inequality have been clear for at least 100 years, as the Von Mises book indicates, which I will explain here in the end.

 

Nature’s Inequality

 

The Myth of American Inequality (The Myth) does not claim that income in America is equal or that income and wealth levels across society are not a very serious issue to discuss in this election year. In fact, we should not want pure wealth equality in America to be implemented because the kind of wealth creation the West has produced since approximately 1800 would cease instantly, due to the disappearance of the necessary social and economic incentives to create and even maximize wealth. Everything in nature is particularly and inherently unequal, and man knows it is not good to fight Mother Nature beyond a certain point, where it matters the most.

What Gramm, Ekelund, and Early do prove, I believe conclusively, is that official government statistics dramatically overstate inequality and poverty, and that the government’s intent after years of misleading presentation must be to create the impression that American income inequality is a serious threat to all without more government control. (Surprise, surprise: The government is just as self-interested as you and me and every other person/human organization in the world.)

What The Myth shows is that the American Dream is still alive and well. America could strengthen human flourishing for its citizens by removing government interference in the economy, recreating welfare incentives that we know can work, and by strengthening our economy with legislation supporting CJC’s moral foundations, particularly related to the family. As financial people started saying in the 1980s, these changes should be “no brainers” and are often found today in other European countries that are more redistributionist that we are.

The Myth is one of the most amazing statistical achievements I have ever seen. It was assembled with efficiency and clarity that only experienced, seasoned, and gifted economists intimately familiar with federal, state, and local laws and statistics and America’s GDP at every level could assemble. The book accumulates relevant income, private and public sector benefits (welfare), and taxes, among many other important and relevant statistics, from all available federal, state, local, and private sector sources to present all-in, net after tax income for all American reporting units (individuals and households). The study ranks all American households by 20% units or quintiles over the fifty-year period between 1967 and 2017.

No doubt this took immense focus and resources and explains the five-year time difference between 2017 and the book’s published date, 2022. As a result of the last year in the study, The Myth does not address the boom Trump years (high growth, low unemployment and inflation) and the Biden bust years (low growth, increased unemployment and inflation). The authors provide a very readable, technical presentation, though those who do not like the social sciences might find it tough-sledding. I hope the authors continue their analysis with every succeeding year. We need such work to make good judgments about policy.

What the book does so well is place the reader in a position to make one’s own judgements about how Americans and the American economy have performed during the entire working lifetime of the Boomers, who are retiring now in increasing numbers, through all of the booms and busts of many difficult economic cycles, after terrific and harmful business outsourcing, and after constructing a much more globalized economy.

My summary: America’s economy produced one of the most successful economic runs the world has ever seen that’s benefited literally everyone is very substantial ways. I have lived my life in America during a Golden Age of Mankind based on wealth levels. “In short, by virtually any physical definition of economic well being, working Americans across all income levels, racial classifications, educational levels, and other commonly used statistical classifications are substantially better off,” (page 85), even after adjusting for inflation.

In fact, it’s not even close. The average household in the bottom 20% earned $49,613 after taxes and the average in the top 20% earned $197,034. The bottom-to-top quintile averages are: $49,613, $53,924, $65,631, $88,132, and $197,034. Households in our bottom quintile would be regarded as rich in most countries across the world, and that may be the factor most influencing the surge of illegal immigrants across our southern border.

Yes, the middle quintiles have flattened—and that is a very serious issue now—but it is more due to formerly lower, mid-tier households going up the income ladder and the lowest tier, while much better off on the basis of net income due to welfare, has been caught in the welfare trap of disincentives. Indeed, poverty has arguably been eliminated with the poverty rate (a somewhat arbitrary measure) adjusted for welfare, etc., being lowered from 12.5% to 2.5%. While the rich have gotten much richer, individuals do not stay in the top 1% for long, generally do not live off of the wealth over time, and almost always fall down into the lower tiers over generations. You will not believe this, but all but 6.2% in 2017 were living in what would have been 1967’s top quintile based on price indices and adjusting for the nature of improved products and services we all use (page 146).

The Myth has a wealth of analysis on the lower quartile, the upper quartile, and the top 1%. Anyone who prides her- or himself on being in the know on political policy should review its data, findings, and recommendations.

But The Myth is far from being all about good news. It appears our Welfare State, while almost eliminating material poverty on a statistical basis, has vastly increased spiritual poverty and is removing incentives for those in the bottom 2-3 quintiles to work at all. Moreover, it is easy to see where the populism that surfaced in 2016, taking most political analysts totally by surprise, came from and why the centrist political elements in America dislike “the Swamp” and so many politicians inside the D.C. beltway.

Of course, how each American does in the workforce to support his or her household is most dependent on each individual’s character and ability (merit demonstrated over time), and there is far too much variation there in many millions of taxpayers to isolate each factor. However, in demonstrating that racial and gender pay gaps have been eliminated and that “privilege,” as defined, is not a meaningful predictor, The Myth of Inequality does explain approximately two thirds of success, beyond marriage and family stability, in five factors: (1) education quantity, (2) occupation selected, (3) age of worker, (4) amount of work, and (5) geography.

The Myth of Inequality offers policy recommendations in its last chapter that should get much attention in this election year. The statistics clearly show that throwing money at our issues solve nothing and destroys incentives. In my opinion, the three biggest economic issues we face are: (1) overhauling the Welfare System to improve incentives to work and controlling the borders, so as to not over-stress the system, (2) bringing more supply, manufacturing, and services back to America’s shores, and (3) balancing the federal budget.

 

Social Justice is Not Justice

 

Whether you agree or disagree with Thomas Sowell, a Senior Fellow at the Hoover Institution, he is generally regarded as one of the greatest American economists in our history. His newest book, Social Justice Fallacies, and another gem in a long line of Thomas Sowell classics It supports the findings in The Myth of American Equality, in part, by demonstrating that racism is no longer a significant influence producing injustice in America. Moreover, “social justice” itself in America today is more often than not an oxymoron, a contradiction-in-terms. Some nations mistreat persons grouped as a class, but not the U.S.

Dr. Sowell explains early in the book that we cannot expect outcomes in nature to exactly reflect statistical population samples in race, sex, religion, nationality, or culture. That is an unreal fantasy not good for anyone. Equality of opportunity and under the law is another matter; these are foundational to America.

The book focuses on several fallacies to make these points: Equal Chances Fallacies (impossible in nature), (2) Racial Fallacies (not true now or not a good indicator for justice), (3) Chess Pieces Fallacies (humans, life, and nature do not operate well like a chess board, where elites can move us move around and win), and (4) Knowledge Fallacies (no government or group of elites have enough knowledge to maximize flourishing and happiness for the greatest number), and (5) Words, Deeds and Dangers (America is inundated with obviously false narratives, like Marxism and identity politics, that pollute our minds).

 

Marxism is a Lie

 

While Social Justice is a gem, Marxism Unmasked by Ludwig Von Mises (1881 – 1973) is truly a hidden royal jewell! It’s a collection of nine lecture that Austrian economist Von Mises gave in San Francisco in 1952 that more or less summarize much of his life’s work. Had it not been for his dedicated assistant who transcribed her notes after each lecture, they might have been lost to history. He actually believed human beings are not lab rats, as do many modern economists then and today (not to insult lab rats).

The Marxism Unmasked lectures clearly show that well before World War II economists knew that Marxism was false, produced underperforming-to-evil political economies, and promised the impossible. Communist and socialist (minimal-to-no private sector) utopias are pure fantasy. Von Mises goes into extensive political and economic history in comparing socialist economies to capitalist economies, also relying, like Thomas Sowell, on a realistic anthropology and epistemology.

If you don’t want a strong private sector and a reasonably limited government, you really do not care about increasing wealth, feeding the poor, or increasing human happiness.

 

Stayed Tuned in 2024 for More Truth

 

We do not feel we have all the answers, and we do not believe the authors here have all the answers. We deliberately chose the short podcast (12:48) at the top here over several other, longer, more “beautiful” YouTube presentations because it raises more sharp-elbowed issues that come out of The Myth of American Equality. Our main purpose in this post is to get the discussion going in an important political year. Please, let us know what you are interested in or where you would expand or change the arguments or issues presented here.

In any case, we do believe self-sufficiency within a healthy, supportive, CJC family-based community is the cornerstone of prosperity and freedom. Only by fishing better and teaching everyone how to fish can we build strong and healthy families, charities, limited government, and security (law enforcement and military), the sum total being a strong and prosperous America. It is just as true today as in 1776.