I am going to illustrate two ways of distributing wealth. Everyone benefits with one method, and everyone loses in the long run with the second. The first, beneficial method, involves basic freedom from government, taxation, and bureaucracy. The first method, allows people to rise with their brains, ability, imagination, personality and desires. It also allows failure. There’s a million human situations, origins, up-bringing, abilities, and brain power. Everyone has different desires, goals, attitudes, and abilities. No government or ’program,’ can possibly cover all, and shouldn’t even try. Under a free system, all facets of the human mind and body are covered, and society will work well, as it did pretty much before FDR introduced the welfare system. The system of freedom doesn’t protect anyone from bad luck, idiocy or foolishness, but it rewards hard work, determination, and ingenuity.
Let’s say we turn back the clock to 1910. I wasn’t around then, l but I have read about those times extensively, and they were pretty neat. The usual small group of men existed who wanted to get rich. They started businesses, invented things, and worked really hard with their brains, imagination, and abilities. Their businesses sometimes failed, sometimes did well, and sometimes exploded with profits. My Great Granddad had a drug store in the 400 block of Pennsylvania Ave N.W. in Washington D.C., four blocks from the US Capitol. My Granddad had a drug store at the corner of 14th and H St.. N.W., next to the old Trans-Lux Theatre. My Dad had a drug store at the corner of Mt. Pleasant and Irving Sts, NW for 36 years, and I grew up in that store. None of them were hilariously successful. All were honest, and all made decent livings. Others sometimes inherited money, saved money, borrowed money, and built department stores, invested in streetcar systems, and if they had no capital, were hired as managers and supervisors of large chains. Millions of jobs, and no federal taxes. Local taxes went to pay for police, and fire protection, and schools.
There was competition, with Sears Roebuck competing with Montgomery Ward, and in D.C. several department stores mightily competed with each other for business. Oil companies competed, as did railroads, and every form of business. A healthy situation, in other words. There were no wars being fought, no public housing, no Medicare, welfare, food stamps, or subsidies from government of any kind. Those who made low wages, lived in smaller homes in lower income areas of cities, and since there were no subsidies, there were no bad neighborhoods. There were poor neighborhoods, middle income neighborhoods, and wealthy neighborhoods. Homes could be financed through savings and loan associations, which were privately owned and operated for profit. People saved their dollars in these, and they loaned money to reliable people to buy homes. It was rare for a home to be financed for more than 80%, meaning that a prospective buyer had to have saved 20% before he could buy a home.
Millions of people bought brand new $2500 row homes, which were usually constructed of brick, with high ceilings, so they were pretty cool in summers. Wages weren’t very high, but neither were prices of things, and there was no inflation at all, so one could be secure in buying a home and saving their dollars for a ’rainy day.’ The cities had no freeways, white flight, abandoned houses and cars, and no racial problems. Negroes lived in their own neighborhoods, had jobs, took care of their property, and were gradually working their way up through society by their own efforts. Being colored had its disadvantages, just as did being an immigrant with poor English, or being fat, cross-eyed, short, a female, stupid, or a host of other things, which could slow one down in achieving what one wanted to achieve. In 1910, one had to overcome whatever one had to deal with, as there were no laws forcing anyone to do anything, accept anyone, socialize or mix with anyone, go to school with anyone, and the only force used was to obey basic laws about murder, robbery, and harming someone else.
Coca-Cola had a bit of cocaine in it, and drugs of all kinds were legal, as was alcohol. The federal government was microscopic, and minded its own business. Cities were healthy, and full of factories which made every single thing a person could ever want or need. Tires, cars, food, clothes, shoes, appliances, lumber, bricks, toys, pipe, wire, furniture, carpet, locomotives, soap, pillows, trolley cars, steel, tractors, and you name it. All were made here by thousands of factories which hired tens of millions of workers. While wages were small, they were adequate, and Mom stayed home to keep house and raise the kids. A family with both parents working was extremely rare, so of course was juvenile delinquency. A recent survey found that a third of working mothers spend less than three hours a day with their kids, which is abysmal. While this seems like an unlikely, rosy picture, of course there were the usual family troubles, bankruptcies, joblessness, and the like, but there were no hand-outs from government at any level. There were thousands of private and church charities to help the poor or out of luck. They usually demanded work for their largess, so the work ethic was very strong.
The smartest, most energetic, or even the luckiest got the richest, which is the usual way, and the laziest or dumbest stayed low on the social ladder, but all were responsible for their own destinies, and there were no destroyed cities, prisons full and overflowing, devalued dollars, graffiti, vandalism, alarms on homes, or credit cards. People, if they wanted to stay alive, worked, begged, got handouts from families or charities, or simply died. If someone got sick, they went to a doctor if they had a couple of dollars, and if they didn’t, they tried home remedies. Nothing was ’free,’ because when you stop to think of it, nothing is ’free’ today. What today is called ’free,’ is paid for by everyone with devalued currency, high taxes, and huge bureaucracy, which are all coming home to roost.
People invented things and improved things, and without government financing. Henry Ford doubled his employees’ wages from $5 a day to $10, which allowed them to buy his cars. He improved mass production and the assembly line so much, that a brand new Ford cost $275, and millions bought them. Everywhere, businessmen improved, competed, expanded, failed, built, hired, and sometimes fired. Huge skyscrapers went up with newly invented elevators, and steel framing was invented. Electricity was becoming common, as were telephones. No government bureaucrats were there to harass, get in the way, tax, regulate, interfere with, subsidize, or slow everyone down. It was virtually total freedom to build, manufacture, invent, develop, advertise, succeed, fail, go bust, get rich, or do as one wanted to do. Movies had been invented, and smart men built nickelodeons to show the flicks for a nickel, and many got rich. So rich, that some expanded and built huge movie palaces with gigantic pipe organs, full stages, orchestra pits, uniformed ushers, and clouds floating effortlessly across huge blue ceilings. Many still exist as concert halls. Railroads, privately owned by stockholders, built fast, luxurious passenger trains, which went from Los Angeles to Chicago in a short 39 hours, or from New York to Chicago in ten hours.
At my age, I can imagine those glorious times, with nothing imported, and everything exported. I can imagine no federal taxes, no freeways, no slums, and no welfare or public housing, with everyone being responsible for themselves, their own incomes, families, neighborhoods, homes, lawns, transportation, and welfare. Toys were made in America, cars were made in America, stoves, furnaces, streetcars, elevators, telephones, clocks, and light bulbs were made in America, and most were exported to those socialist, huge government saddled nations, which hadn’t a clue as to what made us great. All they knew, was that America was the place to go to, visit, or in some way taste, before they died. A land literally flowing with figurative milk and honey.
Wealth was earned, enjoyed, and distributed to the workers, stockholders, and investors. The citizens saved a bit, Mom stayed home, the kids turned out pretty good, and America thrived. Nothing went to an IRS, there was no inflation, no overseas wars, no income taxes, no public housing, and crime was insignificant. What happened to us? That’s the next installment.