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The Rich (And Everyone Else) Get Richer

The zeitgeist of the week, if we are to countenance viral memes, is this:

“The Rich Get Richer, The Lazy Live for Free, and the Middle Class Pays for it All!”

It’s catchy—no doubt in part because it isn’t overtly partisan. It’s also a modern take on an old and familiar refrain and therefore seems to strike a chord with the millions who glibly pass it along as a sort of common-sense observation that most people can identify with. But how true is it, really?

Percy Bysshe Shelley (whose wife Mary famously penned Frankenstein) is credited with first coining the aphorism “the rich get richer, the poor get poorer,” which was itself a riff on the Biblical parable of the talents in Matthew 25:29 which made much the same point. Leading a tumultuous life plagued by debts to many of his close ties within the English gentry, Shelley’s jaundiced view may say more about him than the situation at large in Georgian England. Indeed, by the mid-1800s, England was well on its way toward the phenomenal increases in wealth brought about by the Industrial Revolution and trade liberalization.

Economic historian R. M. Hartwell writes that, based on a number of factors, not only was average per capita income on the rise but that “the real wages of the majority of English workers were rising in the years 1800-1850.” The rich, in other words, were certainly getting richer, but so indeed were the poor. The widely held perception, however—a perception that helped popularize Shelley’s quip—was not so neatly aligned with facts. Large numbers of the working poor felt themselves shabbily treated in the unequal distribution of gains, and early socialists leapt to condemn what ought have to been more soberly recognized as a collective win.

While Shelley’s aphorism implies a zero-sum fleecing of the poor by the rich, today’s meme makes a subtly different claim. Rather than decry wholesale class-based theft by avaricious fat cats, it instead criticizes the role of wealth redistribution and its effects on a social work ethic: The “lazy,” it implies, get to live off the largesse generated by the hardworking middle class which is simultaneously doing the heavy work of increasing the investment portfolios of the idle rich.

It’s an old lament, to be sure, but being perennial doesn’t necessarily make it so. Take, for example, the fact that only about 6% of the US population lives rent-free, often under in-kind exchange arrangements like housesitting. Since housing typically represents the single largest personal expense item, it’s difficult to see where the “lazy” are getting their free ride. Perhaps, then, is it in the number of welfare recipients who get housing assistance or food subsidies?

Possibly, except that only around 10 million Americans, or about 3% of the population, receive some form of housing assistance. Not exactly a crisis of epic proportions, though recent years have shown a marked uptick (primarily as a result of Covid-19 emergency policies). According to the Peterson Foundation, “federal spending on housing assistance sharply increased largely due to the Emergency Rental Assistance program established in response to Covid-19.” Up until 2020, federal housing assistance hovered around $50 billion annually. In 2021, that number ballooned to $90 billion.

It is in the realm of government interventions that we begin to see the evidence for the meme’s narrative power. When it comes to food subsidies, for instance, SNAP (Food Stamps) are distributed to around 12.5% of Americans who receive federal entitlements. While most are required to work at least 30 hours per week to remain eligible (making the “lazy” label seem a little harsh), recent years have also seen a notable increase in government expenditures over that baseline. Spending on food stamps doubled during the 2008 debt crisis, then nearly doubled again in the runup to Covid. The State was effectively adopting whole swathes of society, offering “assistance” that transparently came from other taxpayers.

It would seem, then, that the meme is channeling a certain truth without really nailing the truth: the number of “lazy” folks who are living for “free” is in fact negligible—they are not necessarily the parasites the meme implies. The government-sponsored trend, however, is clearly shifting in an ominous direction, toward an ever more bloated provisionary-state model of free handouts.

The rich really are getting richer especially during massive, misguided spending programs by government administrations keen to appear to be “managing” one crisis or another.

Anecdotally, I’ve seen the “lazy live for free” scenario unfold in real-time in our own community. A landlord I know has a small rental home, shared by two radically different roommates. One gets government disability assistance for rent and the other does not, though there is no discernible functional difference between the two. It does not take a Sherlock to deduce which one sits at home smoking weed and which one puts in 16-hour days hustling to make ends meet. So while the larger facts may point to the (currently) minimal nature of the “lazy” phenomenon, firsthand familiarity holds outsized psychic effects—effects which ripple and redound within the electorate, creating its own truth along the way.

What about the rich getting richer? According to Marketplace, “In the United States, billionaires are a third richer now than they were before the pandemic. It’s no secret that it’s a lot easier to make money when you already have money.” And indeed, according to Pew, this is not a figment of our collective imaginations. The share of middle-income families to upper-income families has moved from 62% to 29% respectively in 1970, to 43% and 48% in 2018. Upper incomes have roughly doubled (in adjusted dollars) over the last four decades. The good news is that both the lowest-income brackets and middle-income brackets have seen a measurable improvement—it’s just that they are so comparatively slight compared to the strides made at the highest-income levels. It is Shelley’s era all over again.

The rich really are getting richer—especially during massive, misguided spending programs by government administrations keen to appear to be “managing” one crisis or another. As the Cato Institute points out, while everyone may be getting richer, there remains a keen sensitivity to relative over absolute gains. Government interventions, in attempting to artificially allocate resources, actually help fuel this inequality.

It seems fair to assume that the kinds of gains economies experience at large are being disproportionately laid at the feet of the very very rich and influential. Perhaps, then, since we are now in the business of twisting old aphorisms, a more accurate update is called for. It used to be cynically said that the “Golden Rule” was that those with the gold made the rules. As the track record of heavy-handed interventionist policies makes clear, that’s backward—in fact, it is he who makes the rules that get the gold. Or at least a lion’s share of it.

To that extent, then, today’s viral meme is essentially correct while being technically incorrect on the details. Missing important contextual truths, it nevertheless correctly condenses the basic perception that heavily directorial systems are fundamentally rigged to the benefit of those at the very top. While the “lazy” may not be actually living for free, and it’s debatable whether the middle class is “paying for it all,” it is clear that the more centralized regulations become, the more disproportionately the benefits will accrue.