The Trust Fund Illusion

One assertion of collective-oriented commenters is that individuals "should" share equally, or nearly so, in the fruits of the society's economy. Underlying this assertion is the presumption that the economy and its srock of goods and services are a product of the collective that exist independently of the people and therefore belong to all. Those that would permit unequal distributions insist that government decide who is more deserving and who is not. It is analogous to maintaining a legacy trust fund, of which everyone is supposed to be a beneficiary, with the government acting as trustee.

This way of thinking is false, but gets some support from the apparent permanence of much that surrounds us. Landmark buildings, street maps of cities, bridges, and tunnels, and much else persist decade after decade. Some cathedrals date back many hundreds of years. Even something so evanescent as a daily newspaper is often published by a business enterprise that is generations old - The New York Times, to cite just one highly visible example, has been published by the same family in substantially similar form for the whole of the 20th Century and on into the 21st. Such things certainly seem permanent and created virtually independently of current population.

But such permanence amounts to, at best, to borrow a Shakespearean expression, only a hemi-demi-semi truth. In fact, such material goods are the product of human endeavor, and their continued existence is also the product of continuing human endeavor ensuring that they be preserved.

Consider a house, that cultural symbol of permanence, one built long ago by people no longer living. Imagine it abandoned and left untended and unrepaired. If it is well made, at first little will change. But over time, weather will affect it. Insects and rodents will find their way in.  Perhaps ground water will seep into the foundation. Wood rot is a risk. The roof will erode, as all things exposed to weathering do, and eventually leak. If lightning strikes and sparks a fire, the end can come very quickly. Even without that, eventually the house will become uninhabitable, and finally reduced to ruin of interest only to future archeologists, or disappear altogether.

Those things that are valuable and most nearly permanent legacies are intangibles, things like a common language, transmitted values, knowledge and technology most noticeably. These can be seen as like a trust fund, and they can and should be distributed or at least made available equally to all. To a great extent they are, at least in developed countries: That process is called education. But even they owe their continued existence to the efforts of living people to maintain and disseminate them.

Obviously, such efforts need to be compensated if they are going to be continued for long, and since some efforts are more highly valued than others, and are done by some people and not other people, clearly that compensation will and should be variable from person to person. Equally obviously, such compensation must coexist in a world with other, non-permanent goods and services that require compensation, like preparing meals and prescribing medications. All of these are the results of individual human endeavor, usually voluntary, usually acting in concert with others, but individual nevertheless. It is not that abstraction Society that made the car you drive, or supplies the gasoline it uses, or keeps it in good repair; it is individuals. The existence, or the continued existence, of these goods, legacy or nonlegacy, cannot be reasonably counted as independent of the people who provide them.

So the question really is, how shall such compensation be determined, which therefore largely determines how goods will be produced, preserved and distributed, and by whom? The best answer, in nearly every case, is that they be worked out freely among the people directly involved, because it is they who are best informed about the value they place on what good or service is sold or bought and on the labor and resources required, and what prices they are willing to pay or accept, and whether they can come freely to an agreement. Anything else consists of using power to determine distribution. That places a priority on getting and holding power, meaning the ability to coerce people to act differently from what they would do if left to act freely, or on influencing those who have it, rather than on producing value. It should be self-evident that is a poor priority to have as the main driver of who gets what portion of the wealth created. It drives people to expend time, effort and resources on getting and holding power, or on getting the favor of or nfluencing powerholders, instead of on producing goods and services of value.

The trust-fund illusion is not only wrong, it is harmful.