Persuading the People: Patronage or Profits

How do you grow the economy?  That's the one-and-only question before the voters this November.  President Obama says that the private sector is "doing fine" and the solution is in government investment.

According to the president in his Ohio speech, reports to Daniel Henninger, the difference is between the Romney plan that wants to grow the economy "from the top down" and the president's plan, "an economy that's built not from the top down, but from a growing middle class."  Oh really, writes Henninger:

There is no theory anywhere in non-Marxist economics that says growth's primary engine is a social class. A middle class is the result of growth, not its cause. Barack Obama not only believes in class-based growth but has built his whole growth strategy around it.

Mitt Romney is running around talking about the "liberating power of the free enterprise economy" but who knows what that means, worries Henninger.  It still provides President Obama with a chance to confuse. "Team Romney should not underestimate the appeal of Mr. Obama's confused economic ideas if drilled daily into the electorate's soft clay."

But it is not the job of a politician to persuade the voters that profit or the free enterprise economy is good.  People have been trying to do that for decades with indifferent results.  Here is Robert Tracinski with a good college try:

A profit is simply the net creation of wealth. It means that the economic value you created from a business—the goods and services you were able to sell—have greater economic value than the resources you put into running the business and paying its workers. It is your profit, the extra money left over after you pay your expenses, that allows you to expand your business, prosper and yes, hire more people.

Seems pretty straightforward.  But it relies on a world-view that believes in Adam Smith's Invisible Hand.  There is another world-view, and it says that profit comes from exploitation, that this is a dog-eat-dog world and the only way to scratch a living is to attach yourself to a powerful patron and gather up the scraps from his table.

Mitt Romney is selling the Invisible Hand world-view and President Obama is selling the patronage world-view.

You may say that the science is in on this.  Profits create prosperity wherever they are allowed, and patronage creates poverty wherever it is tried, just like it did for the 50,000 years of the agricultural age.  But the fact is that lots of people believe the patronage line.  When people migrate from the country to the city they usually believe in the patronage world-view because that the the way the world works in the countryside.

People that believe in exploitation and patronage join unions and vote for politicians that promise to extract something from the greedy rich.  People that believe in the Invisible Hand vote for politicians that promise to lower taxes and government spending.

This is no time to persuade people that believe in the patronage world-view; it is a time to rally the people that believe in the Invisible Hand.

But what do you do about the folks like my single-mom hairdresser who is mostly worried about high gas prices?  She's never heard of "fracking," so she knows nothing about the revolution in oil/gas exploration that will bring gas prices down if only the Obami regulators would get out of the way.

For those confused folks in the middle, you just say that "Obama Isn't Working."  What a surprise; that is just what the Romney campaign is doing.