Recently I had a nice discussion with an uber driver, and upon learning that I was an economic professor he asked me why I enjoyed teaching economics. I suggested that exploding economic fallacies is perhaps the most fun part of my job, since as Ronald Reagan used to quote (I think from Mark Twain originally): “The problem is not what people don’t know, but what they know that ain’t so.” He then asked me what the greatest economic fallacy was. Now that was tough–there are so many, and so many of them are interrelated.

I was tempted to say the broken window fallacy. There is no doubt that much of our public policy discussion is riddled with this fallacy–basically the idea that government spending adds to economic activity rather than transferring it from the private sector to the public sector. Yet intimately related is a variant of this fallacy with even worse reasoning: that there is a free lunch to be had. The idea of a government provided free lunch is the fallacious thinking of the modern progressive movement. Modern progressives aren’t typically even arguing in the broken window manner of suggesting that the economy will be better with government spending–they are simply saying that it is a basic human right to have free good X, Y or Z. Since it is a right, it is therefore a duty of the government to ensure the provision of such a right–regardless of the cost to the economy.

Now I’m not saying that populist pandering politicians don’t make allusions to how this won’t be much of a cost (or at least argue that the cost avoidance of the status quo will more than offset any costs of such a program), and those arguments are deeply embedded with broken window fallacy problems. But I’m thinking about the nature of some of the general public discussion which basically doesn’t consider costs at all–I just want it. Some politicians go there too, like progressive mayor Bill DeBlasio’s recent comment in his state of the city:

“Here’s the truth, brothers and sisters, there’s plenty of money in the world. Plenty of money in this city,” the mayor said, flanked by screens with graphs of productivity outpacing compensation. “It’s just in the wrong hands!”

There are intellectual and moral reasons to critique this way of thinking, and we should. The intellectual argument begins with yet another closely related fallacy, that of seeing the economy in zero sum terms: money in the hands of the rich is money that is not in the hands of the poor. Now at one level, that’s obviously true–if I have a physical good, you can’t have that same good. But at the more important level, there is nothing inherent in any current wealth distribution which precludes any person from producing yet more wealth. So the key to prosperity is not to take from one group to give to another, it is to produce more goods.

But the bigger problem is really moral: the complete collapse of public morality that believes that when we forcibly take property from others for our benefit that it is ok, provided we hire the government to do it as our henchmen. What is immoral if we do it privately becomes moral simply by transferring it to the public arena. Free education? I want you to pay for it. I’d like better health care also–you ought to pay for that as well. When did the eighth commandment become “Thou shalt not steal except by majority vote”? The necessary flip side of this perverse moral philosophy is the increase of envy, even while trying to cover it by suggesting the theft is really just giving what is owed, as DeBlasio explains:

“This country has spent decades taking from working people and giving to the 1 percent,” he said. “This city has spent the last five years doing it the other way around. We give back to working people the prosperity they have earned.”

A tranquil heart gives life to the flesh, but envy makes the bones rot.