By Maxford Nelsen
When most people think of Robin Hood, they probably think of an archery expert clad in green tights with a penchant for good-natured thievery. Now the medieval ally of the 99 percent has become the symbol of the latest iteration of the Occupy movement. The Robin Hood Tax, a one-half percent tax on financial transactions like stock and bond trades, is aimed at countering the greed of the financial elite.
However, by condemning greed on Wall Street, supporters of the Robin Hood Tax reveal the flip side of greed, envy, among themselves. What is worse, the envy of the Robin Hoods is actually more economically unsound than the greed of the wealthy.
According to John Tierney of the New York Times, researchers in Texas concluded that there are two ways to respond to envy. First, you could “pay attention to superiors in order to emulate them, so as to raise your own standing”; you could also call this “greed” or “self-interest.” The second possibility is when you “pay attention to superiors to find weaknesses that will lower them toward your level.” The researchers call this “malicious envy.”
One of these responses is constructive, and the other is destructive.
According to robinhoodtax.org, “the big idea behind the Robin Hood Tax is to generate hundreds of billions of dollars” that would be used to pay for everything from AIDS treatment to urban gardens and stopping climate change. The money would not mean much to the wealthy of Wall Street, of course, and it would not affect “ordinary Americans.” To put it in supporters’ words, “it’s not a tax on the people, but a tax for the people.”
Put aside for the moment the fact that any tax is a tax on people. Also put aside the fact that 54 percent of Americans owned stock last year (a historic low), according to Dennis Jacobe, chief economist for Gallup. What the Robin Hood Tax really does is reveal the true genius of a free-market economic system: It takes human greed and turns it into productivity.
That humans desire to better themselves is a given. Call it greed, self-interest, the invisible hand, or whatever else you wish. The fact remains that the only way to excel in a free market is to offer people goods and services they want. If someone else offers better or cheaper goods or services, the only way to maintain profits is to beat their price or quality or service. In this way, human self-interest is harnessed to productive ends, driving businesses, entrepreneurs and innovators to continually offer better and cheaper products to consumers. Benign envy fits naturally within this framework.
A redistributive system based on envy does just the opposite. Instead of promoting productivity, it leads to stagnation. In this case, the envious look at the success of the wealthy and claim they should be legally forced to give their wealth to those less well-off. This kind of thinking, however, destroys the incentives for productivity. On one hand, those who work hard or innovate are penalized for doing so. On the other hand, those who are less successful have no incentive to improve because they know the government will simply redistribute (steal) wealth on their behalf. Unlike the free-market system, malicious envy is the driving force behind redistributive systems.
Of course, the Robin Hood Tax is pitched as a matter of justice and fairness. The 1 percent has all the candy? Uncle Sam should make them give us some, too. Besides, it is necessary to lift people up and empower them.
Unfortunately, by indulging human envy, a redistributive system necessarily functions by tearing successful people down. Winston Churchill famously describes the very fair, but terribly unjust, result as “an equal sharing of misery.”
Greed and envy (or benign and malicious envy) are just two sides of the same coin. A free-market system based on the first can be successful, though not perfect, but a redistributive system based on the second cannot hope to be.
The Occupiers, and now Robin Hoods, of the world claim that greed is everywhere. They may be more correct than they realize. It’s enough to make one question even Robin Hood’s motives.
Max Nelsen is a senior political science student at Whitworth University, where he writes weekly op-eds for the campus newspaper.