This column originally appeared in the Barnes County Independent.
The holiday season is upon us, and one of the things I like best about this time of year is the focus on charity. Whatever your religion or belief system, there is something wonderful about a time of year when our entire nation tries to focus on being thankful for what we have and helping those around us.
There is something irksome in the way we talk about charity this time of year, though. We are inundated with a lot of messages telling us to “give back.” Pitch after pitch for charity tells us to “give something back this holiday season.”
Give something, sure, but why is it that we’re giving something back?
I detest that phrase not because I’m at all opposed to charity – I believe in it wholeheartedly and aspire to live a charitable sort of life – but rather because it supposes that what we have to give came at the expense of somebody else. If I’m to give back then what I’m giving back must have been something I’ve first taken from someone else, right?
I don’t think those who use the phrase do so out of malice. It’s just something that has become ingrained in our lexicon. But the premise behind the phrase is one born of economic illiteracy, and it is important that we not cave to such ignorance, even unwittingly.
There are a lot of people who believe that economics is a zero sum game. They believe that there is only so much wealth to be had, and if one group of people gets more wealthy that means there is less wealth available for others. Thus, they believe that all wealth comes at the expense of others. From this flows a preference for equal economic outcomes achieved through the policies wealth redistribution.
But that’s now how it actually works. Wealth isn’t static. Wealth is created.
Let me give you an example. Suppose I have $100,000 and I want to build a new home. I take that $100,000 and spend in on contractors and supplies and all the other things it takes to build a home. At the end of the building the $100,000 is gone, but I now have a new asset in the form of a brand new home that is worth (assuming I did it right) more than the $100,000 I invested.
That’s a net gain for me, but it doesn’t stop there. The $100,000 I put into building the home went into the pockets of the contractors and suppliers who helped me build the home. They all benefited from this transaction too, selling their skills and labor and supplies to me at a profit.
In the process of building a new home, I not only enriched myself but I enriched a wide group of people around me. The same goes for somebody who builds a business. They supply goods and/or services to the public at large and turn a profit for themselves, but along the way by necessity they create jobs and commerce for other people and businesses.
We often talk about profit, and wealth accumulation, as though these were selfish motives. But I’d posit that it is impossible to turn a profit, or become wealthy, without also creating wealth and prosperity for others. That is the wonderful thing about the free market. Even if you act purely in your own self interest, even if your only goal is profit for yourself, it is impossible to turn that profit without creating jobs, commerce and wealth for others.
The greatest force in the world fighting against poverty isn’t charity but rather the free market system in which free people are allowed to make free decisions in pursuit of their own self interest.
Which brings me back to this whole “give back” thing and the presumption that, by prospering, I’ve somehow taken from society at large and must balance the ledger. That is wrong-headed.
Please, ask me to give. We should all be happy to help our neighbors, not for profit but rather for the simple pleasure that comes with helping someone else. Just don’t ask me to give back.