Do Turkeys Vote for Xmas? ／2017-12-31／Nick Sallnow-Smith

I thought that over the holiday season I would write on a topical subject. Of course the classic phrasing of my title would be “turkeys don’t vote for Xmas”. The implication is that even as stupid a bird as a turkey (I don’t know whether turkeys are stupid by the way, and I sincerely mean no disrespect to that species if it turns out they are bright birds!) would have the common sense not to vote for his or her demise. Now setting aside the point that if turkeys were not eaten for Xmas most of them would never be born in the first place, let’s examine the validity of this piece of folk wisdom, as an analogue of human behaviour in modern societies.

Its basic premise is that even the dumbest voters generally make wise choices. Excuses are sometimes made that they have been misled by crafty would-be leaders whose propaganda is false (this is typical excuse for the Brexit vote from the remainers). Or perhaps it is argued that the choices are hard because of their complexity; hence the decision should be left to elected representatives, not decided in a referendum. This presupposes that the elected representatives, in their omniscience, will themselves make wise choices.

I want to suggest however, that any process of electing a group of representatives, who are thereby given a mandate to interfere in the daily lives of citizens, will inevitably culminate in the turkeys “voting for Xmas”.

The turkey analogy is most apposite for my purpose here. Christmas is a time where everyone receives “presents”; free stuff that they have not themselves worked or paid for. A better analogy for the modern welfare state could hardly be imagined. It is a world in which free stuff is handed out by benevolent leaders. This is assumed by all to be a sustainable enterprise, without examining where the resources to provide these “presents” are to be found. The lack of basic analysis of the source of these gifts can be seen shortly after Christmas, when the new year’s pay rises are announced. It is typically assumed that these increases should be more than the rate of price inflation and hence represent a real terms increase in income. Such increases are expected regardless of whether those receiving them are any more productive than they were in the prior year. (Promotions to more demanding jobs are separate from this process.) Increases are expected for doing the same job in the same way as last year. Yet in pre-industrial times, no farmer would expect more income if he worked the same fields, in the same way, and experienced the same harvest. He would only expect more income if he managed to increase his crop by innovation, harder work, or better weather. Yet today, if those doing the same job in the same way are not offered a real increase there is an outcry. The “free stuff” of that pay increase should somehow be assured, whatever the external context. This represents the same mentality as Christmas presents: something for nothing, as of right. Now of course no-one would turn down a free gift. So everyone accepts them. But why is this “free gift society” rarely questioned?

My take on this is that for most of human history the economy has been a zero sum game. Farming production was a function of climate, manpower and soil quality. Innovations were rare (the wheel and the plough and not much more) so human beings became used to the zero sum economy over many thousands of years. What the kings took was indeed a direct loss for the public. But the advent of capitalism in the 18th century changed everything. Accumulating and reinvesting (rather than simply storing) surpluses; innovation in the way in which goods were produced; the willingness to forgo instant consumption to create capital goods; created an economy where new wealth was created. The game was no longer zero sum. This was a momentous change and led to a stupendous increase in living standards everywhere. The sad irony today is that this is not taught and largely not believed. The deep seated assumption remains that the pie does not grow as the result of investors and entrepreneurs constantly finding new and more valuable ways of creating goods and services. Rather growth is something which just happens, if Government set interest rates, tax levels and public spending in the right way. So even if the pie grows, it must be shared out equally because no one deserves more than others.The antagonism against the 1% is not simply envy (though I am sure there is a lot of that), it the millennia old feeling that if someone else has something more, it must mean I have less.

Yet acting on this false assumption when voting leads us to the meaning of our analogy. The demise of the turkeys.

As societies continue to vote for more and more “free lunches”; as fury at the rich, the “bosses” and corporations grows, because of the false “zero sum” assumption, the drivers of wealth that capitalism depends upon are eroded by the public policies that so many voters crave. Motivations to take responsibility for your own needs are weakened. Expectations that others will, and indeed should, provide for you, grow. Measures to penalise wealth, and the wealthy, grow in popularity. Inevitably the very wealth creation that people desire is weakened; investment fades, growth falls.

Leaders perversely conclude that this is because capitalism has “failed” and that the state can rescue its popularity only by itself promising a better life, independently of the efforts of the citizens. To do otherwise risks defeat and ineffectiveness. The process becomes self-feeding. The more these promises are not delivered, the more the next rank of representatives promise more, and the more the voters conclude the fault is not theirs, it lies in their leaders, and the more resentful the voters become of their leaders failures. Today it is frequently commented that middle class wages in the US have not risen in recent years, by contrast to prior decades. Yet elsewhere on the business pages it will be explained that productivity growth has stalled in the “West” and that working hours have fallen, and fewer people are entering the workforce, as regulation tightens its grip. In such circumstances, how can it be expected that wages will rise in real terms? Yet so ingrained are these expectations that the politics being to get ugly if they are disappointed. No prospective leader explains this. Rather they claim that if only they were in charge, everything would be better.

And so the wheel turns. With each turn, national leverage increases, incentives reduce further (Universal Basic Income anyone?), unfounded expectations rise, and the noose tightens on the turkey’s neck. But does the turkey cry “enough, I am being strangled, please loosen the state’s grip on my throat”? No, the cry from the turkeys themselves is for more free stuff, more regulation, more constraints on wealth creation, more taxation of success, after which, miraculously, all will be well at last.

Our human turkeys all over the world are begging for the wheel to turn one more time to take them to paradise. They are indeed voting for Xmas.

Happy New Year friends!

Nick Sallnow-Smith

Chairman
The Lion Rock Institute