Back in December 1777, the eminent Scottish economist Adam Smith received news of General Burgoyne’s defeat at Saratoga. His correspondent expressed concern that this might spell ruin for Smith’s British nation.
Smith’s reply was succinct: “There is a lot of ruin in the nation.”
This quote has since proven both reassuring and somewhat misleading. It’s comforting to see that some people always predict doom, yet, at times, those predictions don’t come true. Adam Smith’s country, for instance, managed to endure despite the setback at Saratoga.
On the flip side, these quotes can certainly mislead. A nation can’t sustain an endless amount of ruin. Eventually, cities and states will suffer.
Many politicians in our country seem to believe that American cities can weather almost anything.
Take California Governor Gavin Newsom, for example. Recently, he’s made a splash on the internet, apparently aiming to be the Chief Troll online after falling short in his actual governance role. Some Democratic experts are reveling in the attention, likening his antics to those of President Trump.
If Newsom were being more serious, perhaps it would be even more entertaining.
Right now, however, California is in dire straits. This year alone, the state has faced disastrous wildfires, causing billions in damages. Rebuilding areas of Los Angeles? Well, good luck to anyone trying to secure home insurance.
And let’s not forget the riots—reinforced by Democratic politicians—who seem to think it’s a given right for illegal immigrants to protest against law enforcement.
This predicament arises because California is still reeling from the effects of Newsom’s COVID-19 lockdown policies. For him, it seems, those repercussions hardly apply.
Perhaps he and his supporters can regain the 2.1 million registered Democrats who left the party between 2020 and 2024.
But the truth is that from taxation to homelessness and public safety, Newsom’s approach has led to an exodus of valuable residents. California has even lost more affluent millennials than New York in recent years, with about 10,000 households making over $200,000 a year departing the state. This number nearly doubles New York’s similar demographic loss during that time.
Part of the reason for this trend is the design of the federal system, which makes interstate moves relatively simple.
People in Britain, burdened by high taxes and crime, can’t simply pack up and relocate within the same country; it’s largely the same everywhere.
However, if either California or New York continues to impose burdensome taxes while failing to provide a decent quality of life, states like Florida or Texas suddenly seem a lot more appealing.
This is something both California and New York Democrats ought to keep front and center.
Despite New York’s high taxes and the looming possibility of electing a radical socialist mayor, some do not take the prospect of a mass departure seriously. It’s curious that they once thought the Golden State was perpetually inviting, even amid crisis.
These same folks seem to believe that New York can handle whatever comes its way without significant repercussions, which obliviously neglects past experiences like the 1970s urban recession.
Once upon a time, Detroit was viewed as a beacon of progress. St. Louis, too, had its heyday. Such memories should serve as reminders that what seems eternal can, as we’ve seen, crumble right before our eyes.
Bringing up Adam Smith’s country, there are certainly lessons pertinent to today’s context.
Last year, the UK’s left-leaning Labour government took power, promising to tax the wealthy to address budget deficits. Surprisingly, it hasn’t worked, as many wealthy individuals are leaving the country instead.
This year alone, the UK is projected to lose around 16,500 billionaires, a stark increase from previous numbers. It’s astonishing how such tax policies can drive wealth away, even under a government that won’t openly identify as socialist.
What figures like Zohran Mamdani and others are doing to their city is far more detrimental than the Labour government’s actions in the UK. Yet, it’s clear that valuable lessons are still to be learned. The situation in Britain showcases how punitive policies can expedite the flight of affluent residents, necessitating government officials to invite them back.
They’re realizing that maintaining a vibrant economy is far simpler than rebuilding one. It’s truly easier to push people away than to foster the long-term confidence required to keep them invested.
Returning to Adam Smith, while it’s true that a nation can endure quite a bit, it doesn’t have endless resilience. Fewer cities will remain intact if these trends continue. Let’s hope New Yorkers remember this when November rolls around.
