Luck and Pluck? or Divine Right?

Should people earn their own way?

The American electorate today is split nearly evenly between red states and blue states.  Many keystrokes have been expended documenting the differences between the red and blue outlooks, but one question turns out to be pivotal:

Are wealth, prosperity, and high living standards a matter of luck and pluck - that is to say, due mostly the individual effort put in by the person involved - or is a comfortable life style something that magically happens to the fortunate few, whereas the hard-working many will never get anywhere no matter what they do because the uncontrollable stars never align in their favor?

This question really divides the red states from the blue states.

Red staters generally feel that economic success should (and does) come mostly from luck and pluck whereas blue staters seem to feel that comfort is an entitlement which should be given to everyone whether they work or not.  Red staters believe that welfare mostly goes to those who do not deserve it, blue staters are convinced that heartless red staters want children to starve in the streets.

Red staters believe that all men are entitled to the pursuit of happiness, not necessarily to happiness itself.  Success is a matter of luck and pluck to red staters; blue staters want to hand out economic success to everyone as a matter of divine right.

Luck and Pluck

Luck and Pluck is one of about 135 dime novels written by Horatio Alger.  His stories exemplified the "rags to riches" ethos which is built deep into the American dream.

Written in 1869, Luck and Pluck was the first of a series of stories about young men who, having been cheated of their inheritance or otherwise cast adrift, had to make their way through their own efforts.  The series included Sink or Swim (1870), Strong and Steady (1871), Strive and Succeed (1872), you get the idea.

In selling an estimated 20,000,000 copies in the United States alone, Mr. Alger's stories served the same purpose for boys that Harlequin romances serve for today's women.  Boys read Alger to learn how to succeed somewhat as women read Harlequins to learn how to get married, or nowadays, how a romance ought to be.

Most people know what "luck" is and understand how it contributes to success, but many Americans have forgotten the role of "pluck."  The dictionary defines pluck as "courage or resolution in the face of difficulties."

As Louis L'Amour had one of his characters say, "It's awful hard to stop a man who knows he's right and just won't quit."  We sometimes call it, "hangin' in there."  As Casey Stengel put it, "80% of life is just showing up."

Bill Gates of Microsoft fame exemplifies the felicitous combination of luck and pluck.  He was lucky that his mother was on the board of IBM and was able to tell him that IBM wanted to buy an operating system for small computers; he was lucky that he knew where he could buy an operating system to sell them.  He also demonstrated world-class pluck in that he worked extremely hard and didn't give up even when the US Government attacked his brain-child.

The idea of success through pluck is not unique to America.  In an article "Ruling finds Japanese man died from overwork", CNN :

A Japanese labor bureau has ruled that one of Toyota's top car engineers died from working too many hours, the latest in a string of such findings in a nation where extraordinarily long hours for some employees has long been the norm. [emphasis added]

Hard-working Japanese are not a recent phenomenon.  When I was developing software for a Japanese firm back in the early 1970's, I'd go to Japan to install the software, Al Gore having yet to invent the Internet.

My customer's programmers worked at rows of desks jammed tightly together.  Each desk was about two feet wide and eighteen inches deep.  Behind each row of desks was an aisle about eighteen inches wide, and behind the aisle was a bookcase as high as the desks.  This arrangement was repeated, row after row after row, filling a building the size of an aircraft hangar.  People stay at their desks because it causes so much trouble for other workers when they use the aisle.

I arrived at 7:30 every morning just like everybody else because my hotel was nearby and I had little else to do.  I was awed to find that most of the desks were still occupied at eight, nine, even ten o'clock at night.

One evening about 7 P.M., there were only a few hundred scattered bodies toiling away.  Why were there so few people working?  Was there a plague?  No, management feels it's unhealthy for people to work twelve hours per day six days of the week, so they have a rule that everybody has to go home by 6:30 on Thursday evenings.

What about all those guys still beavering away?  Well, if their project is urgent, they can get permission to stay, but that can be granted only twice a month.  Sure enough, there was a uniformed guard checking passes to make sure all those workaholics had permission to stay.

A few years later, a Japanese bicycle salesman died in the Peruvian Andes.  His car got stuck in the snow, but he kept going.  He froze to death in a snowdrift, headed toward the customer with his sample case over his shoulder.  He gave his life to complete the sales call.

Ink flowed in Japan.  The general tenor of the editorials was, "Well, folks, that's what we mean by a real Japanese.  Nothing remarkable - we expect that each and every one of you would do your duty if it became necessary."  That might seem funny until you realize they don't think it is funny.  Those of us who compete with the Japanese know that a lot of them would.

CNN gave a bit more detail about just how hard the Japanese engineer worked:

In the two months up to his death, the man averaged more than 80 hours of overtime per month, according to Mizuno [the lawyer representing his widow].

The Japanese understand something very fundamental - no matter what you think people ought to have or would like to have, nobody can have anything if the goods aren't produced.  Even the Japanese bureaucrats who work for the taxation and environmental agencies understand that if business doesn't get done, there won't be any taxes paid to the government.  Japanese employees understand that if the business gets in trouble, there won't be any more payroll.

Back before the first oil crisis, Mazda sold a sporty rotary-engine car that got about 10 miles to the gallon. When the oil shock came, Mazda sales went through the floor. The conventional wisdom wrote Mazda off, but the employees saved the company.

The employees went to management and said, "You turkeys!  You bet the farm on low-cost oil, and now our kids will starve."  Management said, "We're sorry! Should we resign?"  The response was, "No. We're all going to take a pay cut and you are going to bust your tails to get a new model out so we can eat again."

The bank took a deep breath and said, "If everybody takes a real pay cut and works hard, we'll find the money to carry Mazda through a redesign."  And they did - Mazda survived.

The initiative to save the company came from workers who excoriated management for not safeguarding their incomes.  The workers led in sacrificing short-term income for tomorrow's meals; they didn't ask for government help.  Japanese workers understand that income and life style come from luck and pluck, they don't believe that success is a divine right.

Contrast their volunteering to take pay cuts with what's going on at GM, Ford, and Chrysler.  The United Auto Workers union seems to feel that pensions and medical care are theirs by divine right no matter how badly the business may be doing.

Note that the Mazda employees criticized management sorely for not planning for the possibility that gasoline prices might go up.  How long have we known that the Chinese and Indians were buying more cars and that they would want gasoline to run them?

Detroit management made the same mistake of betting on low oil prices that Mazda management made two decades ago; their comfortable living is slipping away.  Whether they had bad luck or didn't put in enough pluck is debatable, but it's clear that they're in trouble.  Are they and their workers entitled to government support at taxpayer expense?

Divine Right

Prosperity by Divine Right would have been thought ridiculous during the Horatio Alger era.  Up until the mid 1960's, people were expected to work for a living; very few people believed that society owed anybody anything.  Public assistance was available, but taking welfare was regarded as shameful; people who were on welfare kept quiet about it.

This began to change with the proliferation of organizations dedicated to the idea that welfare was a "right."  If you google "National Welfare Rights," you get about 25,000 hits.  Wikipedia says that the National Welfare Rights Organization (NWRO) "fought for the rights of people, especially women and children, reliant upon government welfare," and says that the group "emphasized women's right to adequate income, regardless of whether they work in a factory or at home raising children." [emphasis added]

Before the welfare rights movement got going, "income" meant a reward that came through hard work.  If you were lucky, you'd get a lot of income, if you weren't lucky, you'd not earn as much, but pluck was an essential requirement for receiving income.  The NWRO and other groups labored mightily to change the public perception of income from a reward to a right.

To a large extent, they succeeded in changing attitudes towards "entitlements," at least among the political classes.  In their 40th anniversary article on Lyndon Johnson's "war on poverty", the National Public Radio web site said:

The programs initiated under Johnson brought about real results, reducing rates of poverty and improved living standards for America's poor.

But the poverty rate has remained steady since the 1970s and today, Americans have allowed poverty to fall off the national agenda, says Sheldon Danziger, a professor of public policy at the University of Michigan.

Note that NPR chose to quote a professor at a public university in an extremely union-oriented blue state; it's no surprise that Prof. Danziger would claim that the taxpayers should be doing more to fight poverty.

Like many red-staters, Scragged believes that the war on poverty has been wonBy world standards, there simply aren't any poor people in America.  A Boston Globe op-ed argues that the welfare system traps people in poverty and that President Clinton's welfare reforms helped many poor people:

... it is clear that welfare reform has been a shining success. The Republican Congress that passed it and the Democratic president who signed it turned out to be truer champions of the poor than those who inveighed against it so hysterically. [emphasis added]

When a welfare mother was forced to go to work, it wasn't long before she earned more money than welfare paid.  Her children were lifted out of poverty by welfare reform, not by welfare.

Blue staters beg to differ.  The National Welfare Rights Union (NWRU) argues:

Across the country, thousands of poor and low-income people are suffering from the effects of reform legislation. The implementation of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act ended the entitlement to welfare that had in been in place for over 65 years. Residents of the U.S. are no longer guaranteed the right to feed, to clothe, or to house themselves and their children in this, the richest country in the world.

Mr. Clinton's law emphasized personal responsibility and work; by making it harder to collect welfare, his reform forced many welfare recipients to find jobs and they soon found themselves earning more money than welfare paid.  The NWRU argues that the reforms should be abolished so welfare will be easier to get.

Earlier groups who agitated for welfare "rights" didn't call themselves "Union."  Unions often go on strike to ask for more money.  Do welfare recipients plan to go on strike until they're offered more money?  It's not clear exactly how that might work since welfare recipients are already not working, but still...

Here's the real issue with respect to welfare for this election cycle.  When Mr. Obama says, "Yes we can!" does he mean that Americans can take responsibility for themselves and support themselves; or does he mean that yes, we taxpayers can spend more money on more government programs?  Should Americans derive their income and life style from luck and pluck or is income a divine right? 

How Will America Maintain Its Lifestyle?

This question matters a great deal now that the Indian and Chinese governments have decided that their citizens should be permitted to complete in the overall world economy.  Back when these countries had walled themselves off from the world, nobody had to worry about competition from Chinese or Indians who were willing to work for less money than would tempt most Americans.

Although our economy expands over time, the economy produces a fixed number of dollars in any given year.   Regardless of your political philosophy, you have to recognize that a dollar spend painting lines on streets is a dollar which is not spent on education; a dollar spent keeping people in jail is a dollar which is not spent manufacturing cars, and so on.

Jailing unproductive citizens runs into a lot of money.  The Wall Street Journal published "Communities Pay Price Of High Prison Rate" on page A1 of their July 10 issue.  The article pointed out that the South Mountain district of Phoenix, Arizona has 6.1 people in jail per hundred adults compared to the national average of 1.09.

Most inmates leave children who end up being taken care of by the welfare system.  Prison costs for one nine-block area amount to $11 million annually, and the state spends approximately $6.5 million more taking care of the inmates' dependents.  Supporting this one 11-block area costs the taxpayers $17 million per year.

The question of our enormous prison population is not really one of economics, but it has inescapable economic consequences.  As Americans increasingly lose the habit of self-control and can be made to refrain from violence only by incarceration, crime and punishment add to the unproductive burden on the economy as a whole, just as surely as welfare supports unproductive people by placing the burden on those who work.

Taking care of people who should be able to take care of themselves imposes major costs on the US economy whether it's because they refuse to work, or because they'd rather work at crime, or for any other reason.  We have the most productive economy in the world, but there's a limit to the amount of overhead that even we can handle.

Goods and services have to be produced before people can consume them.  Economically speaking, it doesn't matter why a given individual doesn't produce anything, what matters is how many workers there are to support all the people who don't work.  If there aren't enough worker bees to support the drones, any hive eventually runs out of money.

Lessons From History

This is not a new issue.  Let's look at some principles which were articulated long ago:

  • You cannot help the poor by destroying the rich.
  • You cannot strengthen the weak by weakening the strong.
  • You cannot bring about prosperity by discouraging thrift.
  • You cannot lift the wage earner up by pulling the wage payer down.
  • You cannot further the brotherhood of man by inciting class hatred.
  • You cannot build character and courage by taking away men's initiative and independence.
  • You cannot help men permanently by doing for them what they could and should do for themselves.

- William J. H. Boetcker

Two millennia ago, St. Paul advised the Thessalonians that "If any would not work, neither should he eat."  400 years ago, the Pilgrims wrote that same ruling into the Mayflower Compact.  Modern liberals would be aghast at even hearing such a sentiment.

During the era of the National Welfare Rights Organization, many clergymen argued strongly for increased welfare benefits, pointing out quite correctly that Jesus had expressed concern for the poor.  These ecclesiastics were not willing to explore the subtleties of Paul's pronouncement about charity.  He did not say not to feed people, "if any can not work," he said "if any would not work" [emphasis added].

Paul was well aware of the human tendency to take advantage of other people's charitable impulses; he drew a clear distinction between helping people who were unable to work and helping people who could work but who choose not to work.  We've commented on the increasing tendency of liberal politicians to want to support anyone whether they could work or not.

We've discussed a group of young ladies who blatantly decided to have fatherless babies which will make them eligible for welfare.  Does a woman have a right to expect the taxpayers to support her just because she has a baby?  The Economist reports that New York City offers financial counseling to poor people to help them manage their money better.

The Boston Globe opined that giving welfare recipients strong incentives to seek jobs reduced welfare costs and made the former welfare recipients better off.  Having a job also did a lot for their dignity as human beings.  Do we want young people to perceive going on welfare as a viable career choice?  Nobody wants to talk about the corrosive effect on the human spirit of being a useless person who's supported by the government, but it's very real.

Blue staters won't admit it, but for years and years before the welfare system was put in, nobody starved; cities, towns, neighborhoods, and families took care of their own.  In line with Paul's admonition, however, earlier charities came with strings attached.

Starting in 1652 in England and a bit later in America, "work houses" were set up where people could always get a meal and shelter, no questions asked.  They were called "work houses," however, because claimants had to do some work in order to get the meal and shelter.  One work house was famous for having a claimant move a pile of wood.  The first guy moved the wood up on the porch, the next guy threw it down and so on. 

Work was generally more productive than that, of course, but the main idea of requiring work was to discourage those who didn't really need charity.  Work houses closed when the welfare system came in, of course; very few people would work when welfare offered benefits for nothing.

The welfare system turned income from a matter of "luck and pluck" into a divine right.  Merely to exist was to have an open-ended right to claim goods and services which were paid for by other people's efforts.  Mr. Clinton's welfare reforms swung the pendulum back toward luck and pluck.  Mr. Obama seems to favor welfare reforms, albeit tepidly, but his associates argue that he ought to reverse Mr. Clinton's reforms and make it easier to collect welfare should he become President.

Many liberals are scandalized at the very idea of asking capable people to work in return for welfare.  Does this reaction reflect well on us... or poorly?  We may find out in coming decades.

Will Offensicht is a staff writer for Scragged.com and an internationally published author by a different name.  Read other Scragged.com articles by Will Offensicht or other articles on Economics.
Reader Comments
The answer is - both are right.

Liberals say that that wealth is about luck because they got theirs by inheritance. They are removed from the EFFORT of getting wealth. They don't care about welfare because increasing taxes will NEVER get high enough to pratically affect their fortunes.

Conservatives say that wealth is about hard work because that is how they got theirs. They hate tax increases because a lot of conservative wealth lies with small business which is GREATLY affected by regulation and taxes.
July 21, 2008 11:05 AM
I would love to see a good study sometime on the percentage of small business owners that are liberal/conservative. I would bet that less than 30% are liberal. Knowing what small business is like, I can't imagine - after being in that role for enough time - how anyone supports welfare, medicare, zoning bureaucracies or stupid phrases like "the rich don't pay their fair share".
July 21, 2008 11:09 AM
Regarding the stupidity of "the rich don't pay their fair share", Rush had some amazing stats from the IRS today which showed:

- the top 1% of earners paid 40% of the total tax take, the highest in 40 years

- the top 10% of earners paid 71% of the total

- the top 50% paid 97.1%

http://www.ncpa.org/sub/dpd/index.php?Article_ID=16810

So the rich are paying tremendously more, and the poor are paying next to nothing. More lies from the left...
July 21, 2008 3:58 PM
Before the welfare reform my brother (he was married with two kids at the time) lost his job and so did the rational thing and found a new job. It was only part time and couldn't pay all the bills. So he went to the government and was told by on agency that he made too much money and by the next that he made too little. Their suggestion to him, quit his job. Obviously that is not the proper message to hear from the government.

The Mormon welfare system, as I understand it, is a very good model. They do not give people money, they pay their bills. They do not give them money for food, they give them food that they have to cook themselves. They give you a couple months to find a new job and if you haven't then they leave you to your own devices or have you work in one of their farms, factories, stores, or help transporting the elderly and with other things around the Ward.

Not only do they expect you to work but they leave you with nothing but time (since they won't give you money to go to the movies or other activities). Either you get a job or leave with nothing but a roof over your head and food on your table.

(NOTE: My understanding of the Mormon welfare system is second hand and may not be perfectly accurate.)
July 21, 2008 7:57 PM
Once, while in a very bad place, I looked into AFDC. I was working at a job that paid $25/hour, but I was working less than 20 hours/week.

My income level qualified me for cash aid. But I didn't work "enough hours", so they wanted me to abandon my job and take classes on how to fill out job applications and go to interviews.

They also told me that my goals were unrealistic when I said I was looking for a job in the IT sector paying around $30,000.year.

I told them where to stick it and struggled through on my own.

Five years later - well, let's just say that I'm well past that "unrealistic" goal.

Looking back, I'm glad it was such a pain.
July 22, 2008 11:26 AM
Tony pulled through on the content of his CHARACTER. He made it through pluck, as Scragged would put it. The people who've commented have illustrated just how BAD our existing government programs are for people who want to work but are going through a bad patch. If Tony or Jonyfries' brother had succumbed to the siren song of government support, they'd probably still be on welfare.
July 26, 2008 9:50 AM
What a fantastic piece! Thanks for your words of wisdom. I am handing out copies to several people that I know.
September 20, 2008 12:05 PM

It is true, and only fair, that the able bodied should work for a living, but somehow, there must be a reasonable way to help those that are truly unable to take care of themselves. It is a noble society that makes a decision to collectively undertake this task. The difficulty lies in how to do this without creating ineffective government overhead. We certainly haven't figured out how to do it.

February 14, 2015 8:24 PM

The Bible says that if any will not work, neither should he eat. In the old days, charity was an individual responsibility. People did take care of each other.

Now, with the government having taken over, people don't reach out to each other as in the past. This has let to several generations of fatherless kids. This is known not to work - fatherless kids burned down Detroit.

We've not only created ineffective government overhead, we're creating people who have no idea of working and feel entitled to anything they want.

February 15, 2015 2:18 PM
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