Redistributing the Wealth

cross posted from

One only has to look around to see that some people have a great deal of wealth and some people are desperately poor. Is this fair? After all, the wealthy have more money than they can ever use so why not take some of their excess money and give it to the poor who need it so much? Since the wealthy clearly do not give enough to charity, why not harness the power of the federal government to force a more equitable distribution of the wealth? Before we can answer that question we need to determine why some people have more money than other people in the first place. In order to justify seizing this "excess" wealth which Obama thinks should be making more than $250,000 a year, we need to determine that the wealthy came by their wealth unjustly. We need to determine that they stole it directly or indirectly by taking unfair advantage of other people.

Most of all we need to determine that everyone is equally talented at making money as everyone else. If the explanation is that for the most part, the wealthy simply are better at managing money than poor people then even if we take their excess money and give it to the poor, in a relatively short period of time, the more talented people at making money will soon be the wealthy people again and the poor people will revert to being poor once they have spent the money the government gave them and be no better off than they were before. This in turn forces us to look at the uneven distribution of talent in general among our population.

Some people are more athletically talented than others and make the big leagues. Others are better singers, dancers, mathematicians, etc. Unlike money, we cannot force an even redistribution of those kinds of talents. You are either good at something or you are not. Granted you can practice and become better at most things but some people just seem to be more gifted than others at just about anything you care to name. The only way to adjust for this uneven distribution is to deliberately handicap the more talented by playing favorites with the less talented. We see this in things like little leagues and even admission to colleges where everyone gets a chance to play regardless of their talent. The technical name for this attempt to force an even distribution of talent is egalitarianism. The uneven distribution of talent we see in the real world must be compensated for in the name of simple fairness or justice. Everyone should be just as good as everyone else at everything.

The question then is how this well this tendency towards egalitarianism works in the real world. A simple example will suffice to determine this. Some people are more talented at doing schoolwork than others. It may be that they are smarter or work harder or are driven just to be good at everything. Other people may be lazy or simply just not motivated enough to be good at schoolwork in addition to perhaps being less talented at doing it in the first place. Still this is manifestly unfair so let's see how we can adjust for this in practice. A new teacher comes into the classroom who is determined to right this manifest wrong. Since everyone should be equal to everyone else, he gives a "C" grade to everyone regardless of how good or how poorly a student performs.

It does not take a doctorate in psychology to figure out what the effects of such a policy will have. The good students think to themselves that they busted their butts to get a good grade and all they got was a "C" so what is the point of continuing to put in the extra effort? They promptly stop trying to make an extra effort. The poor students see that they got a "C" when inside their heads they know they did not deserve it. Since they know they will get a "C" anyway, why bother to try at all? It will come as no surprise to any student of human behavior, when standardized tests are given to this class of students; they will score abysmally compared to classes with teachers who are not committed to the doctrine of egalitarianism. All that happens under egalitarianism is that everybody is much worse off than before. There simply is no workable way to use some system to "force" a correction for the uneven distribution of talent.

This simple fact of life is why capitalism always wins out over communism, socialism, etc. because it employs a system of rewards and punishment to provide incentives for outstanding achievement. Communism and socialism do not provide such incentives so everyone is encouraged to "goof off" since there is no incentive to do more than just enough to get by. This can be made even worse by introducing a system where no one can be fired for poor work performance. In such a system, productivity goes out the window. This then brings us back to the question of whether money making ability is a talent that is also unequally distributed or not. There seems no reason to assume that it is any different from any other talent and that some people have a "knack" for making money and others do not.

That being the case how will taxing the rich to force them to give to the poor work out any better than giving everybody a "C" in a classroom? Why should the rich bother to bust their butts to start up new businesses or expand their old ones using the capital they have accumulated when the government is going to confiscate everything over a certain amount of money per person? Their incentive to put their money to work to make still more money is destroyed. All that happens is that everyone is worse off or poorer than they were before. Are you better off now than you were a few years ago? Most of us are not. Could it be that Obama's policies have discouraged the wealthy from creating more wealth for everyone and that is why everyone but the rich are worse off than ever?

Capitalism works best when the government is no more than a referee to insure that reasonable rules for fair play are enforced. Whenever it gets into the business of meddling with the mechanics of the economy in the interests of enforcing equality, it just makes a mess out of everything. Government then is in the business of picking winners and losers. Not surprisingly, the winners always turn out to be those individuals and entities that support whoever is running the government. All that happens is that crony capitalism runs wild as businesses figure out that there is money to be made by playing the game that those in power want to play by any means necessary. This distortion of the free marketplace causes a recovery from an economic downturn to be very anemic at best or even drives it back into another recession.

Government always screws up everything it touches. It simply is the nature of the beast. Government is an evil. It may be a necessary evil but it is still an evil. It will always pick winners and losers because it is run by humans who want to harness the power of government to reward their friends and punish their enemies. Unlike capitalism that rewards achievers, all government does is reward ass kissers and such people are seldom wealth producers for anyone but themselves. When capitalism works freely, it spreads wealth around to everyone, It does not spread it evenly because it rewards risk takers and producers and not just somebody who has a buddy in the government.

The other problem with government micromanaging everything is that it makes our decisions for us with a one size fits all mentality. All this does besides making us poorer is that we become less free as well. We are no longer in charge of our own lives because government elitists who think they are smarter than everyone else but themselves are making all of our decisions for us in the belief that we are too stupid to make them for ourselves. The fact that their policies are attempting to right "supposed" wrongs that cannot be fixed in the real world, this will not turn out well except for them. The rest of us will just get screwed, blued and tattooed and that we submit is exactly what is happening.

Comments :

daniel noe said...

I couldn't have said it better myself.