In 1914, Henry Ford paid his factory workers $5 a day, twice the going rate, with the aim of creating a broad middle class able to buy the cars they were building. Today, that project isn’t faring so well: The Economist reports that in the U.S. “the gap between rich and poor is bigger than in any other advanced country.” And it’s growing. According to the Congressional Budget Office, from 1979 to 2001, the after-tax income of the top 1 percent of U.S. households soared 139 percent, while the income of the middle fifth rose only 17 percent and the income of the poorest fifth climbed just 9 percent. Last year American CEOs earned 262 times the average wage of their workers—up tenfold from 1970. ....... Of course, U.S. agricultural and manufacturing businesses want to hire illegal immigrants, too. However, the really animated core of the political lobby that supports illegal immigration—its mass base, so to speak—is composed of rich homeowners, who desperately want someone to do their dirty work and to do it cheaply. Although they are the largest beneficiaries of the American way of life, including the rule of law, when it comes to the issue of illegal immigration, the rich do everything they can to undermine the American way for the vast majority of other Americans. There is nothing conservative about these actions by the rich; rather, the true conservatives are the less well-off who oppose illegal immigration and who are trying to preserve (and conserve) what was once an established and respected order.
But immigration policy is only one example of the most serious problem with increasing economic inequality: the holders of great wealth—especially if they are organized into a political lobby of similar holders of great wealth—can buy not only more goods, more capital, and more people. They can also buy (through the vehicle of campaign contributions) more important people: politicians and other public officials and therefore public policies. [The Rich Get Richer, September 25, 2006 ]
I think the incentive structure here is a bit more insidious than Kurth realizes. Mass immigration can have a tremendous effect on property values.
Even property owners that make no use of the labor of illegal aliens can amass significant wealth if they just happen to own property in an area where immigration is tolerated. Many prominent economists—including Nobel Prize winners Vickery of Columbia and Simon of Carnegie Mellon felt that increases in property values should be taxed preferentially compared to earnings—particularly those earning of people of modest means. Even tax-hating Milton Friedman admits that a tax on land is the "least bad" of the available range of taxes.
I personally feel that Conservatism is doomed as a political ideology-in part because so many prominent conservatives went all out pushing measures like Prop 13 and wound up with a tax structure that defends and entrenches some very substantial concentrations of wealth—and in the process largely forgot about how many Americans have little or no opportunity to accumulate any substantial property.
I've tried addressing this issue in some of my other articles. Kurth's article gives me hope that something constructive might happen in the way of producing a workable political consensus.