Will the “Patrician Socialists” Stay and Keep Vermont Green?

by Martin Harris

Frequently recited in these column-inches is the “Vermont Anomaly”, the not-seen-anywhere-else phenomenon of a Montpelier-designed and -enacted high cost-of-stay strategy and policy for citizens and businesses not yet resulting in upper-income flight. To the contrary: while Vermont’s Gentry-Left pols have adroitly managed to encourage middle-income out-migration, thereby reducing the numbers of the one sector most likely to vote against ever-enlarging governance in cost and regulation, they have, until the latest Census report, simultaneously attracted enough of an Upper-Income-Quintiles in-migration to (slightly) outnumber those who fled, thereby raising the State’s Median Household Income somewhat.

Presumably, for the new in-migrants, cost-of-stay is trumped by scenery and ideology. Yes, there’s been business out-migration as well, evidenced in Vermont’s typically-near-bottom standing in rankings of States for “business climate”, but that hasn’t been considered a problem: the out-migration of job-creators has caused the out-migration of middle-class job-seekers, so unemployment percentages are, by national standards, relatively low. The State tax-take is, by national standards, relatively high: Vermont has been ranking in the top two quintiles in recent years, the annual Tax Foundation study reports. But not high enough, as shown by the annual Montpelier (pretend?) anguish over deficit-spending. Demands for more –think any of the usual suspects from public education to health services– always exceed the existing goose-pluck even with hissing (read up on Louis XIV’s Finance Minister Colbert for the precise quote) and so it’s less-than-surprising that in-State G-L’s are scouting for new geese, or, more accurately, more down and feathers from the old ones. Case in point: recent proposals for a “wealth tax”.

Up to now, the concept has been considered unconstitutional but that could change as soon as the necessary “emanations and penumbras” are discerned by the tax-hungry re-distributionists; you can find the “obsolete Founders” language in Section 8 (no crude jokes from military veterans, please) of Article 1. For precedent, the 1913 Sixteenth Amendment easily did away with Constitutional prohibitions against an income tax, unequally levied across the citizenry. A wealth-tax would be even more Progressive, (fairness, to the Left, isn’t the Founders’ goal of equality of opportunity; it’s equality of outcome, which explains why, in modern education, all students can be simultaneous valedictorians) and would enable equalization in ways never before possible. That explains why it’s been proposed (in Vermont only, so far) by the Vermont Workers’ Center, self-described as a “union shop and worker-owned co-operative”. Prior to mobilizing for the wealth-tax, VWC was holding State Street rallies for “free” health care from State government: Other Peoples’ Money, in the now-famous Thatcherian phrase, would be captured by taxation to pay the bills.

It’s predictable that Leftist groups would espouse ever more Leftist doctrine in demographically ever-more Left-leaning Vermont; what wasn’t predictable was that earlier cost-of-stay initiatives (raising it from some to re-distribute it to others) wouldn’t have triggered Upper-Income-Quintile flight, as it has done everywhere else, from California on the Left Coast of the US to England and France on the Left Coast of Europe. Therefore, we don’t know with any certainty how Vermont’s UIQ’s would react to a wealth tax. Two theories: for the stay option, here’s: a. Vermont’s relatively small population and proportionately small numbers of UIQ’s means that those few who value “fairness” ideology above personal wealth, wouldn’t flee a wealth-tax, just as they haven’t fled high cost-of-stay; and b. With highly-skilled legal and accounting services, wealth can be tax-sheltered in the future just as income has been in the past. For the leave option: even Vermont’s UIQ’s, once sufficiently pressed, might well reach a point of action. As both old-style urban gentrification and new-style rural gentrification patterns have shown. the UIQ’s are, statistically, the most-highly-mobile sector of the socio-economic spectrum, the most capable of easily moving, in response to any real or perceived benefit or grievance.

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What’s been lacking, up to now, is any persuasive explanation of the Vermont Anomaly: why the Gentry-Left, not only in Vermont but elsewhere, professes allegiance to a re-distributionist ideology damaging (or maybe not, via tax-avoidance?) to their own pocket-books. In these column-inches, your Humble Scribe has previously posted an F. H. Buckley thesis arguing that G-L’s don’t demand improvement of schools (think Vermont’s dismal NAEP Proficiency scores, with only about a third of students able to function at grade level in Reading and Math) because they can attend to their own kids’ needs with extra tutoring, while all those “other’s” kids are left less competitive and economically threatening to their own. Now in a new book, “The Invisible Hand in Popular Culture”, author Paul Cantor invents the label “Patrician Socialist” specifically for those UIQ folks who (pretend to) embrace re-distributionist ideology even though their own wealth was earlier earned quite capitalistically.

Using a Martin Scorcese film, “The Aviator”, for context, Cantor describes how California new-money entrepreneur Howard Hughes conflicts with New England old-money socialite Cate Blanchette: she and her family are “Left wing and upper class”; he is “a mechanic who has no appreciation for art”, and brings in Prez 32 himself, FDR as the ultimate patrician-socialist, the Hyde Park inheritor-of-great-wealth who created the New Deal and (almost) a more-docile packed Supreme Court. Cantor’s explanation: “…the extreme Left and the extreme Right often meet in their distrust and hatred of the free market. Like socialists with their commitment to central planning, aristocrats believe in a static social order and reject the supposed messiness and chaos of the free market.” He contrasts “old money” to “new money”: “…the representatives of old money are hostile to economic change because they worry that it can only undermine their upper-class status…To preserve its privileged position, old money may favor government intervention in the market that hinders the accumulation of new wealth by the next generation…” and so on. The parallels to the Buckley thesis are striking: just as less-than-Proficiency public ed hampers the upwardly mobile next generation from a successful free-market challenge of the present socio-economic establishment, so government taxation and regulation similarly grand-father the wealth earned by the actual grand-fathers, and inherited by the present generation of grand-children, by reducing the risk of brash new competitors displacing the comfortably-fixed trust-funders. Any Vermont parallels?