Those Evil Saboteurs And Wreckers

I generally have substantial faith in the wisdom of the people.  Certainly, as voters they have done a fairly good job over the years in this country of (mostly) rejecting extremist candidates and overly emotional pleas (although they have been too generous in allowing the growth of the incompetent administrative state).  But there is one variety of demagoguery that large numbers of people regularly fall for, and that is the line that all of our problems are caused by some evil cabal of people who are not like us.

I trace the appeal of this kind of demagoguery to the zero sum vision of the world that I think is fundamentally wrong.  As with most issues in the political arena, there are two basic visions of how things work that inform the divide.  In one vision, wealth springs into existence magically, through no one's effort or work, and if wealth is inequitably distributed, then the wealthy must have gotten it corruptly, through theft or political influence.  Life is just a zero sum game in which political power and influence, if not outright stealing, determine who gets what from the finite pie.  In the other vision, the pie can grow and wealth can be created through a mix of work and effort with risk taking and some luck; a system of voluntary transactions gives outsize rewards to those who make the greatest contributions to growing the pie. 

Anyway, it doesn't take too much looking to find lots of examples of the zero-sum vision of the world, and the associated accusations that those doing well must be some evil cabal acting improperly.

For Hitler, of course, it was the Jews.  Many have speculated over the years as to where Hitler may have gotten the idea that this small group could have been responsible for all of Germany's woes at the time.  (In the 1930s, Jews constituted less than 1% of the population of Germany, about 500,000 people out of over 60 million.)  This article has the theory that the source of Hitler's Jew hatred was what he called the "Dolchstosslegende," or "stab in the back" by a group of Jews that supposedly cost Germany the victory in World War I.  Maybe.  Even more remarkable is that millions of people bought into Hitler's theory.

For Stalin it was the "wreckers and saboteurs."  He started using that term in the context of his first five-year plan (1928-32), whenever anything didn't go according to the plan -- which things regularly did not.  By the time the third such plan got underway in 1937-38, there were so many "wreckers and saboteurs" that some 2 million people were summarily executed.  Somehow, it never made the Soviet economy work very well.  Of course, Stalin never had to win a popular election.

In today's Chavista/Maduroista Venezuela, the term in favor is "hoarders and speculators."  As more and more of the economy has been nationalized by expropriation, food and basic consumer goods have disappeared, and the people have gradually been reduced toward starvation.  Clearly, this cannot be caused by the government's own incompetence and pursuit of socialist policies of nationalization, price controls and redistribution.  Plenty of the alleged "hoarders and speculators" have been arrested, and the linked article reports on a new law last year imposing criminal sentences of up to 10 years for black market activities.  No word though on mass executions -- yet.

We don't have anything like this in the United States -- do we?  For the left wing of today's Democratic Party (which increasingly is the Democratic Party) the official demons are the evil bankers.  The narrative, via Elizabeth Warren and Bernie Sanders, is that "greed" and "corruption" on the part of bankers caused the recent financial crisis, and more generally that the bankers' taking all the money for themselves is what keeps the middle class down.  (By the way, there's a heavy predominance of Jews among the top ranks of successful investment bankers and related financial professionals like private equity and hedge fund executives.  Nobody in the left-wing press seems to mention this fact when they talk about "code words" for racism.)  Anyway, wasn't the 2000 page 2010 Dodd-Frank law supposed to fix the unfair transfer of wealth to the evil bankers by putting in place every new regulation that every Democratic Party operative could even think of?  No, we've now moved past that.  Bankers are still getting rich -- obviously we must need another one of these multi-thousand page behemoths.  But could it be that bankers become wealthy not because they steal the money, but because they add wealth to the economy's pie by, for example, creating a somewhat liquid market in whole companies which did not previously exist, or by forcing big efficiency gains on stodgy corporate managements through activist private equity investments?  Don't look to a Warren or a Sanders to even understand what I am talking about.

And where is Hillary on this?  Without doubt, the bankers of Goldman Sachs, et al., think that they have paid her sufficient protection money that she will not go after them when she takes power.  Good luck with that guys.  The baying wolves are out.  Under attack from Bernie Sanders for being a tool of the big bankers, Hillary at a debate in April said that she was the one who had "called out the bankers" for their bad conduct.   Does anyone think that a Sanders or a Warren, or at least some of their acolytes, will not get significant positions in a Clinton administration?

We hope to look to the Republican Party to offer the vision of a growing-pie economy where high income is a proper reward for adding to wealth creation.  Unfortunately, Donald Trump is not the man for this.  He too appears to have a vision of a zero sum economy where bogeymen are stealing all the money.  In this case, the chosen bogeymen are the even more unlikely suspects of China and Mexico.  He rails against NAFTA and against the admission of China to the WTO as "bad trade deals" as if the U.S. government by these actions somehow set the terms of trade between and among the U.S., China and Mexico.  In fact, of course, trade between the U.S. and China, and between the U.S. and Mexico, takes place on terms that are voluntarily negotiated by private parties.

Well, at least Trump's demonization is of foreigners, and therefore doesn't suggest a future where domestic bad guys are vilified, persecuted and even executed.