The Road to Freedom (25 page)

19
Richard V. Burkhauser, Douglas Holtz-Eakin, and Stephen E. Rhody, “Labor Earnings Mobility in the United States and Germany During the Growth Years of the 1980s,” mimeo, Syracuse University, 1996.

20
Charles Murray,
Losing Ground
(Basic Books, 1984).

21
Jeffrey Stonecash, “Inequality and the American Public,” Campbell Public Affairs Institute, Maxwell Poll on Civic Engagement and Inequality, Syracuse University, Maxwell School of Citizenship and Public Affairs, 2005.

22
James Allan Davis, Tom W. Smith, and Peter V. Marsden, “Cumulative Codebook,”
General Social Survey (1972–2008)
(National Opinion Research Center, 2008).

23
The World Values Survey asked respondents to answer these questions on a 1–10 scale, where a response of 1 signified “in the long run, hard work usually brings a better life,” while 10 meant, “hard work doesn´t generally bring success—it's more a matter of luck and connections.” Americans were more than twice as likely to give an answer of 1 or 2 than the French were. World Values Surveys Databank, “Hard Work Brings Success,” World Values Survey, United States, 2006.

24
Mark Baisley, “Towards More South Park Conservatives,”
townhall.com
, July 17, 2011,
http://finance.townhall.com/columnists/markbaisley/2011/07/17/towards_more_south_park_conservatives/page/full/

25
If a liberal and a conservative are exactly identical in income, education, sex, family situation, and race, the liberal will still be 20 percentage points less likely than the conservative to say that hard work leads to success among the disadvantaged. Campbell Public Affairs Institute, Maxwell Poll on Civic Engagement and Inequality [dataset], 2005, Syracuse University, Maxwell School of Citizenship and Public Affairs. These results are based on a probit model in which the beliefs about the importance of hard work are regressed on political views, as well as a vector of demographics. The marginal coefficients are estimated at the mean values of the regressors.

26
Joyce Bryant, “Immigration in the United States,” Yale-New Haven Teachers Institute, 2001,
http://www.yale.edu/ynhti/curriculum/units/1999/3/99.03.01.x.html

27
Abraham Lincoln, “Speech at New Haven, Connecticut,” March 6, 1860,
The Collected Works of Abraham Lincoln
, vol. 4, ed. Roy P. Basler (Abraham Lincoln Association, 1953), 24. Further, Lincoln believed, “The hired laborer of yesterday, labors on his own account to-day; and will hire others to labor for him tomorrow.” See Abraham Lincoln, “Fragment on Free Labor,” September 17, 1859,
The Collected Works of Abraham Lincoln
, vol. 3, ed. Roy P. Basler (Abraham Lincoln Association, 1953), 462.

28
“Subjective Class Identification,” General Social Survey, Dataset: General Social Survey, 1972–2006,
http://www.norc.uchicago.edu/GSS+Website/Browse+GSS+Variables/Mnemonic+Index/

29
The increase inequality referenced here is based on Gini coefficients. The Gini coefficient for the United States grew from 0.401 in 1972 to 0.462 in 2002. “Income, Poverty, and Health Insurance Coverage in the United States: 2009,” U.S. Census Bureau, September 2010,
http://www.census.gov/prod/2010pubs/p60-238.pdf

30
“Subjective Class Identification,” General Social Survey, Dataset: General Social Survey, 1972–2006,
http://www.norc.uchicago.edu/GSS+Website/Browse+GSS+Variables/Mnemonic+Index/

31
Karlyn Bowman, “What Do Americans Think About Taxes?” Tax Notes, April 6, 2009, pp. 99–105.

32
Mads Meier Jæger, “‘A Thing of Beauty Is a Joy Forever'?: Returns to Physical Attractiveness over the Life Course,”
Social Forces
89, no. 3 (March 2011): 983–1003.

33
Alberto Alesina and George-Marios Angeletos, “Fairness and Redistribution,”
American Economic Review
95, no. 4 (2005): 960–980.

34
James Pethokoukis, “5 reasons why income inequality is a myth—and Occupy Wall Street is wrong,” The Enterprise blog, October 18, 2011,
http://blog.american.com/2011/10/5-reasons-why-income-inequality-is-a-myth-and-occupy-wall-street-is-wrong/
; Robert J. Gordon, “Misperceptions about the Magnitude and Timing of Changes in American Income Inequality,” NBER working paper 15351, September 2009,
http://www.nber.org/papers/w15351.pdf?new_window=1
. Federal Reserve Bank of Minneapolis economists found that when controlling for key factors, the median household income for almost all household types increased between 44 percent and 62 percent from 1976 to 2006. They observed that the studies that showed much smaller increases in median household income got those results because they didn't control for key factors such as household size or demographic changes over time. Terry J. Fitzgerald, “Where Has All the Income Gone?”
The Region
, September 2008,
http://www.minneapolisfed.org/pubs/region/08-09/income.pdf

35
Richard Burkhauser, “Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data,”
Review of Economics and Statistics
, forthcoming.

36
Congressional Budget Office, “Trends in the Distribution of Income Between 1979 and 2007,” October 2011,
http://www.cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf
. The data extend only until 2007. We do not have evidence to suggest that the pattern has changed since that time.

37
Arthur M. Okun,
Equality and Efficiency
(Brookings Institution, 1975), 47.

38
Kipling, Rudyard (1919). “The Gods of the Copybook Headings” (poem).
http://www.kipling.org.uk/poems_copybook.htm

CHAPTER FOUR

1
Luke 10: 29–37.

2
Dan Gilgoff, “New budget campaign asks ‘What would Jesus cut?'”
CNN.com
Belief Blog, February 28, 2011,
http://religion.blogs.cnn.com/2011/02/28/new-budget-campaign-asks-what-would-jesus-cut/

3
Marco Rubio, address on the proper role of government, Ronald Reagan Presidential Library, August 23, 2011,
http://rubio.senate.gov//files/19/25/68/f192568/public/index.cfm/2011/8/icymi-senator-rubio-at-the-reagan-library

4
Gregory Clark,
A Farewell to Alms: A Brief Economic History of the World
(Princeton University Press, 2007), chapter 1.

5
M. Dorothy George,
London Life in the Eighteenth Century
(Academy Chicago Publishers, 1985), 42; see also Mabe C. Buer,
Health, Wealth, and Population in the Early Days of the Industrial Revolution, 1760–1815
(George Routledge and Sons, 1926), 30.

6
George,
London Life in the Eighteenth Century
, 42.

7
Michael Novak,
Three in One: Essays on Democratic Capitalism 1976–2000
, ed. Edward W. Younkins (Rowman and Littlefield Publishers, 2001), 57.

8
U.S. Census Bureau, Income data historical tables, “Table P-1. Total CPS Population and Per Capita Income,”
http://www.census.gov/hhes/www/income/data/historical/people

9
Angus Maddison, “Statistics on World Population and Per Capita GDP, 1-2008 AD,”
http://www.ggdc.net/MADDISON/oriindex.htm
. Material progress is tied to technological advances in society, and technological progress has skyrocketed over the last two centuries. The average annual rate of such progress before 1800 was less than 0.05 percent. The rate today is thirty times higher. See Clark,
A Farewell to Alms
.

10
Maddison, “Statistics on World Population and Per Capita GDP, 1-2008 AD.”

11
World Bank World Development Indicators, “Life Expectancy at Birth, total (years),”
http://data.worldbank.org/indicator/SP.DYN.LE00.IN

12
U.S. Census Bureau. “Series H 664-668. Percent Illiterate in the Population, by Race and Nativity: 1870 to 1969.” Bicentennial Edition: Historical Statistics of the United States, Colonial Times to 1970,”
http://www.census.gov/prod/www/abs/statab.html

13
Steckel, “A History of the Standard of Living in the United States.”
EH.net
Encyclopedia, edited by Robert Whaples, July 21, 2002,
http://eh.net/encyclopedia/article/steckel.standard.living.us

14
“Massachusetts Acts to Save Country's First Public High School,”
New York Times
, April 28, 2007,
http://www.nytimes.com/2007/04/28/education/28boston.html
; Kern Alexander and David M. Alexander,
American Public School Law
, 6th ed. (Thomson West, 2005).

15
In Gregory Clark's words, “[T]he biggest beneficiary of the Industrial Revolution so far has been the unskilled. There have been benefits aplenty for the typically wealthy owners of land or capital, and for the educated. But industrialized economies saved their best gifts for the poorest.” Clark,
A Farewell to Alms: A Brief Economic History of the World
, Chapter 1.

16
Maxim Pinkovskiy and Xavier Sala-i-Martin, “Parametric Estimations of the world distribution of income,” NBER Working Paper 15433,
http://www.nber.org/papers/w15433.pdf

17
Michael Novak,
The Spirit of Democratic Capitalism
(Simon & Schuster, 1982).

18
World Bank, “Country Brief: China,”
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/CHINAEXTN/0,menuPK:318960~pagePK:141132~piPK:141107~theSitePK:318950,00.html
; Arthur C. Brooks, “Don't Live Simply,” AEI Articles and Commentary, September 15, 2008,
http://www.aei.org/article/28626

19
World Bank, “Dramatic Decline in Global Poverty, but Progress Uneven,” April 23, 2004,
http://go.worldbank.org/84RMEOWD20

20
World Bank World Development Indicators and Global Development Finance, “GNI Per Capita, Atlas Method (current US$),”
http://www.databank.worldbank.org/ddp/home.do

21
Ibid.

22
Hernando de Soto,
The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else
(Basic Books, 2000).

23
Dambisa Moyo,
Dead Aid: Why Aid Is Not Working and How There is a Better Way for Africa
(Farrar, Straus and Giroux, 2009).

24
George Ayittey, a professor of economics at American University and a native of Ghana, has described the continent's challenges: “The problem that happened after independence was that our leaders rejected the market system as a Western institution and tried to destroy it and they also rejected democracy. This is why the continent started its road to ruination.” Renee Montagne and George Ayittey, “Expert: Africa Needs More than Foreign Aid,” National Public Radio, July 6, 2005,
http://npr.org/templates/story/story.php?storyID=4731168

25
William R. Easterly, “Why Bill Gates Hates My Book,”
Wall Street Journal
, February 7, 2008.

26
“Worst of the Worst 2011: The World's Most Repressive Societies,” Freedom House Special Report.
http://www.freedomhouse.org/uploads/special_report/101.pdf

27
In 2010 GDP terms. See
https://www.cia.gov/library/publications/the-world-factbook/geos/ks.html; in GDP per capita terms, it is forty-fifth
.

28
North Korea's GDP per capita in 2010 is estimated at $1,800, while South Korea's is $30,000 at Purchasing Power Parity.

29
James Gwartney, Joshua Hall, and Robert Lawson,
Economic Freedom of the World 2010 Annual Report
, Fraser Institute,
http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications /economic-freedom-of-the-world-2010.pdf

30
Economists Hugo Faria and Hugo Montesinos test the causal link between the Economic Freedom of the World (EFW) Index and economic growth. They use instrumental variables to isolate the exogenous sources of variation in the relationship. They report the existence of a strong, positive, statistically significant and economically consequential impact of EFW on growth and average income. Hugo Faria and Hugo Montesinos, “Does economic freedom cause prosperity? An IV approach,”
Public Choice
141, no.1/2 (2009): 103–127.

31
U.S. Census Bureau income data,
http://www.census.gov/hhes/www/income/data/historical/inequality/index.html
.

32
W. Michael Cox and Richard Alm, “You Are What You Spend,”
New York Times
, February 10, 2008.

33
Robert Rector and Rachel Sheffield, “Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?”
Backgrounder
, no. 2575, July 18, 2011,
http://www.heritage.org/Research/Reports/2011/07/What-is-Poverty

34
Andy Warhol,
The Philosophy of Andy Warhol (From A to B & Back Again)
(Harcourt Brace Jovanovich, 1975).

35
Whole Foods CEO John Mackey eloquently links economic enrichment and altruism: “Resting everything on self-interest is relying on a very incomplete theory of human nature. . . . People do things for lots of reasons. A false dichotomy is often set up between self-interest, or selfishness, and altruism. To me it is a false dichotomy, because we're obviously both. We are self-interested, but we're not just self-interested. We also care about other people. We usually care a great deal about the well being of our families. We usually care about our communities and the larger society that we live in. We can also care about the well being of animals and our larger environment. We have ideals that motivate us to try to make the world a better place. By a strict definition, they would seem to contradict self-interest, unless you get back into the circular argument that everything you care about and want to do is self-interest.” John Mackey, “Defending the Morality of Capitalism,” June 24, 2011,
http://www2.wholefoodsmarket.com/blogs/jmackey/category/conscious-capitalism/