Steinbeck vs. Sirico

In honor of the big debate we might have this fall, if we can get past the “put ya’ all back in chains” and “legitimate rape” comments, I just finished reading John Steinbeck’s The Grapes of Wrath and Robert Sirico’s new Defending the Free Market.

Steinbeck’s classic tale is a powerfully moving story about migrant families who are bull dozed off their Oklahoma farms by faceless corporations. They scrape together their pennies and stagger to California, where they find that large corporations there would rather let good fruit rot in the field (and so raise the price) than let them eat it. The corporations collude with other corporations to lower wages and raise prices and then kill the migrants who dare to organize against them. The migrants only find refuge in government run camps, where the people kindly look after each other and are free from intimidation of the local police and townsfolk.

Steinbeck’s book will fill anyone with compassion for the suffering poor (and should be required reading for pastors), but the message of his book seems to be that capitalism traps workers in vicious cycles of poverty that can only be ameliorated with government help. Robert Sirico said that he had similar views in his younger days (he was even friends with Jane Fonda), but then he grew up. He notes that if we redistribute wealth, as he used to think, then no one would have jobs, for the wealthy employers would not have enough money to stay in business (p. 102).

Sirico argues that capitalism civilizes our vices, for the most efficient way to get ahead in a free market is to create something that serves others (p. 95). He says that it is actually socialism which breeds corruption, for “collective ownership turns out to be no ownership at all, or else—and this is what inevitably happens, in practice—ownership by the privileged political class, that is, people with the most power” (p. 35). If anyone doubts this, they should look at one of those night photographs of the earth, and ask why it’s pitch black in North Korea but lit up in the South (p. 1). The difference is the free market.

Sirico opposes the sort of corruption described in The Grapes of Wrath. He notes that in a free market “the politically unconnected are allowed to trade in the market just as freely as the politically well-connected are” (p. 38). This would have gone a long way toward helping the Okies survive in Steinbeck’s California. Sirico also asserts that our present fiscal crisis comes not from capitalism but from too much debt (and government interference, which encouraged home buyers to take on debt). Capitalism requires savings and investment in capital, and this is impossible to do when we buy more than we can afford (p. 4).

Sirico’s arguments make a lot of sense, and I heartily recommend the book as a wise, realistic, and conservatively Christian view on today’s political and economic crisis. But occasionally I wanted more. For instance, Sirico describes how Ben & Jerry’s made a rule that no one in their company could earn more than 7 times what the lowest person made. This well-intentioned rule made it impossible to hire a CEO, for any applicants were used to a very high pay grade (p. 103-4). I understand the point, but this skirts the issue of whether CEO’s are worth what they currently make. Sirico would probably say many of their salaries are the unjust products of collusion with crony boards, and I wish he had.

Reading both of these books together makes me think the truth may be a little to the left of most Republican talking points (and a bit further to the right of the Democrats). Free enterprise is the engine which has lifted much of the world out of severe poverty, and we must do whatever we can to protect it. But Steinbeck and the Democrats have a point—something is amiss when investment bankers earn hundreds of millions of dollars without producing much if anything of real value (see the 2008 economic meltdown), and then lobby the government to reduce their taxes to 13.6%, far below what normal families pay. We don’t want the redistribution of wealth, but we do expect everyone, especially our potential leaders, to pay their fair share. I’m pretty sure Mitt Romney would agree, or he would have released his tax returns already.

2 Comments

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  1. “Sirico argues that capitalism civilizes our vices, for the most efficient way to get ahead in a free market is to create something that serves others (p. 95). He says that it is actually socialism which breeds corruption…”

    I agree socialism breeds corruption for the reasons mentioned but, more broadly speaking, it is unchecked power which breeds corruption. Since capital often equates to power, unchecked capitalism can lead to unchecked power, hence corruption. For that reason, I think government can play a role, not in wealth redistribution per se, but in approriate regulatory laws that can protect individuals against collusion, corruption, etc. I definately lean right in my politics but sometimes those on the right see zero constructive role of government. I think just laws (including economic) justly applied are one of the constructive roles government can play.

  2. This past June the Grand Rapids Press carried an article by Thomas Sowell, the eminent economist and scholar in residence at the Hoover Institution, Stanford University. Entitled “A Useful Political Glossary,” Sowell stated, “One of the most versatile terms in the political vocabulary is ‘fairness.’ It has been used over a vast range of issues, from ‘fair trade’ laws to the Fair Labor Standards Act. And recently–we have heard that the rich don’t pay their ‘fair share’ of taxes.”

    Further, he said, “Some of us may want to see a definition of what is ‘fair.’ But a concrete definition would destroy the versatility of the word, which is what makes it so useful politically.
    If you said, for example, that 46.7 per cent of their income—or any other number—is the ‘fair share’ of their income that the rich should have to pay in taxes, then once they paid that amount, there would be no basis for politicians to come back to them for more—and more is what ‘fair share’ means in practice.

    Life in general has never been even close to fair, so the pretense that the government can make it fair is a valuable and inexhaustible asset to politicians who want to expand government.”

    So how much do Top Wage Earners pay in Federal Taxes to the U.S.?
    Top 1.0%—pay 38.02% of all Federal Taxes
    Top 5.0%—pay 58.72% of all Federal Taxes
    Top 10.0%—pay 69.90% of all Federal Taxes
    Bottom 50%—pay 2.7% of all Federal Taxes
    47% to 51% of U.S. citizens don’t pay ANY Federal taxes.
    (Source: IRS 2008)

    So what’s a ‘fair share” for taxes?

    Is it “fair” when the Top 10% of Wage-Earners pay nearly 70% of Federal taxes and the Bottom 50% Wage-Earners pay almost 0% of Federal taxes?

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