Economic Pandas and Earned Success

"Earned Success" is a term Arthur Brooks, president of the American Enterprise Institute (AEI), author of the new book "The Battle" and recent guest of The Daily Show, uses to promote the benefits of the free market, and I must say, I love the concept. His theory is that people are not made happy by their income level (money doesn't buy happiness), but rather by their level of earned success. This idea is ancient wisdom and is intuitive to the point of being obvious, but is still meaningful and thanks to Mr. Brooks is well backed by data. A quick example is that a person who's just won a million dollars in the lottery will be less happy and feel less successful than somebody who has built a company from the ground up and earned their first million dollars. Simple, yay, go free market!

The ultimate point of the theory is that by giving away money (welfare/entitlement), we are stripping citizens of their right and incentive to earn their own success, and thus their equal right to pursue happiness. Furthermore, the best system is one which gives the most incentive for earned success, which is almost by definition the free market. Very interesting idea.

A Lengthy Aside to Present Some Background Junk: The free market is survival of the fittest for economics. It's a ruthless trial by fire, and even in nature we no longer play by those rules. We provide a safety net and rules to ensure fairness, particularly in cases such as invasive species and over hunting, where we're the primary cause of a species's failure. When goats started eating all the grass in the Galapagos, destroying the food source and population of the tortoises, we killed every last goat on the islands to rescue the species. When the very aggressive snakehead fish were introduced to America we poisoned entire ponds in an effort to kill them. Right now we're doing everything we can to eradicate the tamarisk tree from the shores of the Colorado River as it absorbs as much as 30% of the river's water, water we need to survive. We also take measures to reverse the rules of natural selection in some naturally occurring cases (*cough* PANDAS!).

The whole of economics is a human invention, so it's harder to point to the unnatural culprits. For the sake of argument, I might say the invasive species of economics are corporations who outsource to countries where labor is cheap and working conditions are unregulated (or a few generations ago, the slave traders), or those who hire illegal immigrants. The commercial fisher equivalent would be companies commanding fleets of employees and are so large that they affect the rules by which we all play (monopolies, major corporations particularly before unions, special interest groups). And the poachers are any company that takes advantage of the unwitting (sub-prime lending, ponzi schemes, pyramid schemes). Then there are those who are the pandas of society who are just incapable of surviving, which leads us back to the topic at hand...

The Topic at Hand: Luckily, Mr. Brooks has saved me a lot of arguing and filled me with much faith by saying, "The free enterprise system needs rule of law, and it needs a smart government with good regulation. That's a fact, anyone who says that you either have to have pure socialism or pure free enterprise isn't living in the world." Excellent, he's not Rand Paul, and supports a view of the free market that I can find a lot of common ground with. On to "Economic Pandas." Who are they and what to do with them?

Welfare and government assistance programs are appropriate for people who are either disabled, or have the drive to succeed and may or may not have the skills to succeed (the economic equivalent of the sick, injured, and young. "SIYs" for short). Aid can help those who are legitimately unable to provide for themselves, or may give others in this group the push they need to succeed. They are not the pandas. Then there are the people who could succeed but prefer to mooch off the system (ie: I know a guy who was in Iraq who is now perfectly healthy but continues to claim post traumatic stress so he can smoke weed and play video games all day). These are the parasites, the fix is simple but not easy: identify them and STOP giving them money! Problem solved. Then there are those perpetually in need of assistance because they have neither the skills nor the drive to succeed, and/or have god awful money management that is perpetuated by this economic safety net. These are the economic pandas, and are the hardest to help.

The liberal solution has been to throw money at the whole lot of them, because it is very hard to differentiate between pandas, the parasites and the SIY group. This is apparently not that effective, as it has been the solution for decades and poverty persists in large numbers. The conservative solution appears to be "earned success." Fantastic... how do we do that? How do you motivate a panda to stop being a panda? Sounds a lot like the "give a man a fish, feed him once, teach a man to fish, feed him for life" theory. How do you force underachievers to achieve? Set up non-profit career training and development centers? Already being done, minimally effective, but perhaps their ineffectiveness is due to the fact that the pandas already receive funds, cutting their motivation to participate. Then put a time limit on the funds. Already being done, but only in certain applications, could be spread across the board. Hmm, maybe starting to get somewhere.

I obviously do not have the answer to this problem, but does there exist any real proposed alternative to welfare beyond "cut them off"? I hear a lot about giving them the incentive, but what about the means? And to what extent should this be available? If it's too easy to take advantage of, people may opt for these programs over some state schools. Crime may also be a more attractive option, so I would suggest making prisons even less appealing. In my head, there could be court ordered enrollment, a forced repayment schedule after completion of the program, and reduced spending on living standards in prisons (ie: if they consume 2000cal/day make it 1500cal/day, and cut progressively by security level. Requires research obviously).

I have been unable to find any real proposals relating to promoting earned success. Send me a link if you know of one. Has anybody read "The Battle," and is there a proposal in there? Anyway, the idea sounds compelling, let me know what's out there. Thanks

~Yasu