Entrepreneurs can save us.

• Author: Williams, Walter E.
• Position: Economics

LET'S START OFF talking about the entrepreneur with a brief discussion of the sources of income. Some of the rhetoric one hears gives the impression that income somehow is distributed--that there is a dealer of dollars. Thus, one might think that the reason some Americans have more income than others is that the dollar dealer is a racist, a sexist, or a multi-nationalist who deals out dollars unfairly. Alternatively, some suggest that the reason that some Americans are richer than others is because they got to the pile of money first and took an unfair share. In either case, justice requires that government take the ill-gotten gains of the few and restore them to their rightful owners--in other words, redistribute income. While no one actually describes the sources of income this way, the logic of their arguments for redistribution implies such a vision.

In truth, in a free society, income is earned through pleasing and serving one's fellow man. I mow your lawn, repair your roof, or teach your kid economics. In turn you give me dollars. We can think of dollars as certificates of performance. With these certificates of performance in hand, I go to my grocer and ask him to give me a pound of steak and a six-pack of beer that my fellow man produced. In effect, the grocer says, "You're making a claim on something your fellow man produced. You're asking him to serve you--but did you serve him?" I say, "Yes I did." The grocer responds, "Prove it!" That is when I show him my certificates of performance--namely, the money my fellow man paid me to mow his lawn.

Contrast the morality of having to serve one's fellow man as a condition of being served by him with the alternative. Government can say to me, "Williams, you don't have to serve your fellow man in order to have a claim on what he produces. As long as you're loyal to us, we will take what your fellow man produces and give it to you."

Obviously, some people are more effective at serving and pleasing their fellow man than others. They earn a greater number of certificates of performance (i.e., higher income) and hence have greater claims on what their fellow man produces. Take pop star Katy Perry, for instance. Why is her income much higher than mine? It is because of discriminating people like you, who will plunk down $75 to hear her sing in an arena concert--but how much would you be willing to pay to hear me do the same? Those who would call Perry's income unfair and would have government take part of it to give to others are essentially saying, "We disagree with the decisions of millions upon millions of people acting voluntarily that resulted in Perry's higher income. We are going to use the coercive powers of government to cancel out the full effect of those decisions through income redistribution." I might add that income redistribution simply is a legal version of what a thief does--namely, take the rightful property of one person for the benefit of another. The primary distinction between his behavior and that of Congress is legality.

For the most part, in a free society, people who are wealthy have become so through effectively serving...