Beyonce and Jay-Z are proud new parents. And like any prosperous couple, they found it hard to resist the urge to pamper their beautiful little Blue Ivy. So they bought her a Jean-Paul Gaultier “burp dress” for $285. Plus diamond earrings, a $15,000 high chair, and the piece de resistance: a solid gold rocking horse, which set them back a cool $600,000. All in all, about $1.5 million in diamond-studded gifts for a three-week old baby. And to make sure Blue Ivy doesn’t get lonely, they have engaged a platoon of six nannies.
It’s revolting. Repugnant. Grotesque. It most assuredly smacks of bad parenting. I think of Christina Onassis, who was as rich as Croesus but never happy.
But it’s also a glorious argument for the free market.
There are plenty of reasons for clucks of disapproval, but I’m betting our progressive friends would take it further – or would, if these over-generous parents were Greenwich hedge fund managers instead of Hollywood glitterati. “They clearly have too much money!” they would mutter. “That rocking horse alone would buy health care for ten families. This is why the rich should pay higher taxes.”
Ah, yes, if only the rich would let the government decide where their money goes we would all be better off. Who could possibly justify a $600,000 solid gold rocking horse for one spoiled little girl when there is such need out there?
Well, let’s just follow some of that money, shall we, and see where it goes. Then tell me it would be better for the government to take it to buy health care.
To start with, think of the retailers they bought from, the kind that sell high-end jewelry for the super-smart set. A reasonable markup on luxury items is 50%, so let’s figure they cleared $750,000 on the sale. That probably netted a few lucky salespeople $25,000 bonuses, which they will probably use to save for their daughters’ education, after taking a nice little vacation to Hawaii. This will help the daughter become a more productive member of society when she grows up, and the folks who work at resorts and restaurants in Kawai will have more money for their own needs.
Meanwhile, the retailers themselves have an extra $600,000 that goes straight to the bottom line as (this is the word that makes progressives shudder) profits. This in turn will be used for one or more of the following: paying the staff a bit more; investing in more high-margin products to sell to the wealthy; expansion and more jobs; paying a higher dividend to shareholders; paying off corporate debt, improving the company’s solvency; and of course, about $200,000 of that goes to Washington as taxes. All but the last will improve the stock price, also benefiting shareholders. And many of these shareholders are pension plans, so this improves the ability of those plans to pay the elderly the benefits they are due.
And so it goes. The craftsmen who created these wonders were paid handsomely, so they spread their windfall around. The raw material companies, the transport companies, every link of this extravagant chain was well paid and used that money to pay their workers, to improve their businesses, to create prosperity.
You get the idea. This rap-royalty couple are a highly productive jobs machine. This is the kind of “spread the wealth” that really works in our economy, unlike President Obama’s notion of taxing the prosperous to pay the less-industrious.
But the question remains: which is better, that these shamelessly self-indulgent nouveaux riches get to slake their greed, or that society provides health care for Frogs Hollow, Tennessee?
There is no question that the more charitable thing would be to take the money and buy some indigent people some health insurance. This is what President Obama means when he says, as he did so recently, that his faith is expressed through his policy preferences.
But it’s a funny thing about charity. I’m no Biblical scholar, but to my knowledge, the Great Book never says that it’s the role of government to perform charitable acts. Rather, it’s the responsibility of the individual. Indeed, for government to be the provider of charity runs counter to fundamental Biblical teachings. For one thing, it absolves the individual of the responsibility to be charitable in his or her own life. Sure enough, we find that those who strongly favor government’s compassionate role (that would be liberals) tend to be less generous in their own right than those whose charity starts closer to home.
Moreover, there is a decidedly un-Christian element of coercion in the notion that some people should be deprived of the fruits of their industry – however over-generous those fruits might be – to be used for purposes somebody else deems more worthy. What makes those purposes more worthy than those preferred by the people who earned the money in the first place?
The notion obviously requires somebody to be placed in a position of judgment (in our governmental system, that’s several hundred thousand somebodies) over how best to spend money that’s been earned by someone else and taken from them. And because people are human, those decisions, however well-intentioned they may have been at the start, ultimately decay into a form of corruption, where the money goes not to the most needy but to the most well-connected. Or where programs, once set up, become perpetual because the people administering them become as dependent upon them as the recipients. After trillions of dollars spent on support programs since Lyndon Johnson’s day, poverty in America persists. That money utterly failed even to put a dent in poverty.
On the other hand, the dignity of providing a service or product that is valued by somebody else, such that they will voluntarily part with their hard-earned money to acquire it, is a celebration of freedom, of the individual, of the boundless energy that has made this country great. Even something as scandalously frivolous as a crystal-studded high chair generates worth and value for the people who create it in a way no government hand-out can. And it is an article of faith among conservatives that the aggregate of millions of micro-decisions made by free people buying and selling is the best way to provide jobs, prosperity, and economic growth both here and abroad.
One might justifiably sniff at the crass materialism of Beyonce and Jay-Z. But bad taste should not be a taxable event.