04/17/2012 12:42 pm ET | Updated Jun 17, 2012

The Laws of Wealth

In 1860 Ralph Waldo Emerson published a collection of essays entitled The Conduct of Life. One of those essays was entitled "Wealth," and in it he spelled out the basic laws of wealth in a free economy. Here is a passage from that essay:

"Wealth brings with it its own checks and balances. The basis of political economy is non-interference. The only safe rule is found in the self-adjusting meter of demand and supply. Do not legislate. Meddle, and you snap the sinews with your sumptuary laws. Give no bounties: make equal laws: secure life and property, and you need not give alms. Open the doors of opportunity to talent and virtue, and they will do themselves justice, and property will not be in bad hands. In a free and just commonwealth, property rushes from the idle and imbecile, to the industrious, brave, and persevering."

Pieces of this prescription will please economic conservatives while others will please social liberals. And it is exactly this polarization that has paralyzed America today. On the one hand Emerson decries regulation of the economy, those laws which inhibit economic growth and development. On the other hand he demands that governments open the doors to opportunity for every citizen to develop his or her talents and ambitions.

For example, how do we project minors from being exploited in the marketplace while at the same time giving them an opportunity to learn how to work? New regulations being proposed for farmers would forbid minors from operating basic tools on the farm, like using a wheelbarrow or power tools. Such draconian measures inhibit the proper functioning of a farm in the name of child safety.

How do we not interfere while protecting consumers from fraud? How do we protect the nation's supply of clean water while not forbidding the development of natural gas? The answers to these questions need real debate and thoughtful solutions and not ideological stalemate.

When Emerson says that we must be careful not to make "sumptuary laws," he enters into difficult terrain. A sumptuary law, by definition, means a law intended to regulate personal habits on moral or religious grounds. In America today, sumptuary laws are not passed so much at the Federal level but rather by those states in which moral and religious beliefs dictate public policy. The most common examples are laws limiting abortions and marriage. That these laws inhibit wealth is a more tenuous connection. An example might be that a woman might seek an abortion in order to keep her job or continue to be the bread-winner if her husband is unemployed.

Finally, Emerson appears cruel in his conclusion that wealth (here cited as property) flows away from "the idle and imbecile" to the "industrious, brave and persevering." To be politically correct, we would substitute incapable or challenged for imbecile, but the point is that we cannot legislate against differences in ability without completely denying the facts of nature. When Emerson says, as he does often, that America is Opportunity, he does not mean America is Guarantee.

Money is the blood of the economic body and all its members need a life-giving supply. If the head hoards too much the limbs shrivel and the heart eventually stops. It is, then, that each human being is a sign of the health of the whole economy. In a 15 trillion dollar economy such as ours, there is enough blood to support the entire body, but only if it flows freely.