Redistribution Of Wealth is Impossible
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This is a quick post to point out that the concept of "Redistribution of wealth" is complete and utter nonsense. I do not blame those who still buy into the notion that it is possible, for it was only until recently that I came to fully understand why it is impossible.
This article is written only as a means to help make you understand why this notion is impractical in a hasty fashion. If you enjoy the argument, check out the books I have linked through Amazon.com - for they are the shining beacons of reason that have led to me to my own understanding of Economics. If you don't want to spend the money, but still want to learn, there are great websites out there (the learning will be harder through this method, but you can do it): mises.org, Lewrockwell.com, and my other "Evan's Easy Economics" articles on this site.
Redistribution of Wealth is Impossible, Impractical, Irrational, and just simply Stupid.
Those who argue for the redistribution of wealth in any direction simply
fail to understand the difference between "Consumer goods" and "Capital
goods".
Let's go on a journey of the mind.
In 2001, the
top 1% of Americans owned 38% of the wealth. No joke. Of that 1% there
was a guy named Bill Gates who owned at least 1 "computer factory". This
" computer factory" is/was considered a Capital Good -- it exists to make
consumer goods (computers) that are then sold to people who aren't the owner of the factory. Sure, Bill Gates OWNS the Factory, and it might consist of (say) .5% of that
38%, but it only exists to create consumer goods for other people! It would be ludicrous to think that Bill Gates bought that "computer factory" for the purpose of hammering out computers that only he would be allowed to enjoy! This would be a horrible business model.
Now,
let's say that we want to remedy this "evil" institution of "Bill Gates
owning too much"... after all, lord knows he didn't "earn" his
money!!...
... cough...
... anyway... let's
say the government said "we shall liberate the wealth from the top 1%
and then dish it out to the rest! Death to the Bourgeoisie, and may wealth forever reign upon the working class!!" ... how would they do that to a
factory? Divide it up atom by atom and dish them out to the 300 million Americans living today? Create 300 million stocks and then expect everyone to treat it like their own investment? They simply can't redistribute the factory to the masses -- no matter what Marx or Keynes would say. It would be impossible.
But that isn't the only problem generated. On top of
the idiocy of the actual hacking the factory up into chunks (or whatever), the factory wouldn't be owned by anyone who actually wants to keep
the factory running and producing computers -- imagine that EVEN IF
there were SOME way to ACTUALLY distribute the ownership rights of that
factory to EVERYONE in the US, there would be 300 MILLION PEOPLE trying
to decide how that factory would be run!!!!
Imagine 300 MILLION CEOS!!! that would be impossible!!!
Plus,
on top of all of this, if you wanted to start a business and run a
factory... would you want to risk doing it in a country that might just
one day up and "liberate" your wealth from you? Of course not.
Investment would plummet in your country, and thus future wealth would not be created (of course, it would be impossible to measure how much wealth wouldn't be generated: that's the fun part. Read "Economics in One Lesson" to more fully understand this concept of 'invisible wealth destruction').
Translation: Socialism doesn't work. Communism doesn't work. Redistribution of wealth is NONSENSE. UTTER NONSENSE.
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Oh, i was just using it as an example. Isn't he, like, the richest person ever?
I dunno what he does exactly - I don't need to know - I'm just pointing out that the entire idea of redistribution of wealth has some very very serious flaws that need to be dealt with before it can hope to be taken seriously.
Evan, I'm with you, but I think the facts do matter. For instance, contrary to popular belief, most factories are not actually owned by the people who run them. They are usually owned by a corporation, and the corporation issues shares, and so the nominal owners are a scattered group of stockholders. Quite often, the majority of the stock is owned by people who know nothing about running the company, and these people elect the people who actually run the factory. So the CEO of the corporation might be someone who doesn't own a single share of its stock. That's not so different from the scenario that you described as impossible.
These are facts that you need to consider when constructing a sound argument against redistribution.
These facts that you are pointing out had nothing to do with your first point, except that Gates might not own 51% of the company he created.
But, either way, the owners of the factory are owned by people who risked their own investment into the factory: i.e., they are still privately owned. Redistribution of wealth would destroy this. If you redistribute the wealth, you'd have 330 million (or so) people trying to tell one factory how to operate, all of whom did not risk anything to gain such ownership rights, versus the current system of, perhaps a few thousand, who each risked their own wealth to be allowed to vote on how to run the operation.
Also your arguments are ignoring the more important point: sure, even if the factory were owned by one single monocle-wearing, boardwalk-owning monopolist, he would still be selling that which the factory produced to people who wanted to buy it.
Evan, I'm not sure exactly what percentage of Microsoft Gates owns, but yes, that is what my second comment has to do with the first one.
Software isn't really produced in factories piecemeal fashion on an assembly line, and that was the other point in the first comment. So it's not clear why the people who write the software couldn't continue to do so without their employer. Gates helps to market the software, and quite possibly he writes some of it himself, but it's not as if he owns something without which software couldn't be written, like a giant software manufacturing machine. (The means of production, a la Marx.)
I agree with you that property shouldn't be redistributed. I'm just not sure that our common conclusion follows from the argument you were making.
Oh, and about the owners of the corporation risking their investment -- it's limited liability. So they don't take the same risk as the owner of a sole proprietorship.
Redistribution of wealth happens all the time, and everywhere, from the kids' pocket money, to the paying of wages, to inheritance, to taxation, even to theft. Some people think there should be an element of control applied, e.g. to prevent monopolies and cartels exercising too much power. Some still think everything should be left to the 'free' market, even though that has been shown to be problematic.
I think there's no escaping the fact that extreme positions on these matters, from either end of the spectrum, are inevitably simplistic and flawed, and the only sensible approach is a pragmatic one, trying to ease the pain where it is greatest.
Evan, your on the right page when the libs want to make you feel stupid over an example! Welcome to the conservative party! You left out unions who are authorized by the Democrats and will destroy and take over your company, ..........kinda like Government Motors!
Redistribution of wealth means something different to various people. As I see it, when put into practice, it gets 'redistributed' to the ruling party.
Sheila B., I agree.
I don't think that common sense redistribution of wealth uses the tactics you write about. And clearly, redistribution by the lying, thieving banksters has been by using the law to steal. They control the law and they are gaining wealth to the top by deceit. I think that wealth absolutely needs to be redistributed!
"They control the law..."
So you agree that the law is not the way to solve the problem, but then you say:
"I think that wealth absolutely needs to be redistributed!"
I'm a bit confused!
The capital is indeed owned by the shareholders. They risk their money in hopes of making money. If Bill gates is rich it is because he owned shares that went up in value. The example is perfectly valid. If we take the profit from the shareholders and from Bill Gates then we take away the 'capital' used to make computers and we reduce our society to communist rubble. If we took all the money from all the rich people in the world it would only last a matter of months before it was spent on consumables. But capital production would cease and soon all would starve as they do so certainly under purely communist societies. For those who think that there is a compromise between pure socialism and capitalism I ask: Is their a compromise between being non diabetic and being diabetic? No so don't eat too much sugar and watch out for the greedy people. (The ones who didn't manage to create capital but who want to take it)
holy moly, someone else agreeing with me?! And making strong Austrian Economic arguments?!
I'm in love!
Nonsense - you would not distribute the wealth of the company to everyone else in America or the world. Your argument that dividing it up that way would leave no-one to run the business. "On that note You are correct - Dividing it up your way would never work."
Re-distribution of wealth does not have to be hand outs as you pre-supposed. In simple terms - all that would need to be in place to Govern greed and power tripping is a simple law that no ONE person can be worth more than 100 Million. At the time they reach a net worth of 100 Million they would be required by law to divide future earnings and shares of company/assets among the employees.
The founder/owner ( in your example Bill Gates) could choose to work with his team or retire.... but no additional net worth would be necessary. Lets face it - once you have a net worth of 100 Million - another 5 Million wont change your life style one bit.
I am a center Right Thinker/Voter. I believe in Free Enterprise and the right to achieve through work and toil. Socialism is NOT communism. Socialism is the balancing point to make sure that Capitalism does not become Communism through Wealth Control.
The problem with too much wealth today in the hands of too few people is creating a form of communism through wealth control. The economic tides are controlled by just a handful of Billionaires. Wealth control is no doubt a form of communism.
10%+/- of the globes population owns close to 80% of the globes wealth...... which means in one way or another we are working for them or forced to buy from them (insurance and energy as example)..... not much different than in communism where the state owns all.
Capitalism Un-Governed is destined to become a form of communism simply by way of wealth control. And we are well on the way!
I don't agree with your simplified answer as to the problem. It showed a lack of creativity to the problem solving!
If you made it so that "no one person could be worth more than 100 million", then why would Bill gates bother to invest his own money and time and effort into making a company that produces billions of dollars of benefits to the world? (Trillions?)
And to go even further, who would make the decision as to how much money someone can make?
Your retort shows a lack of understanding as to how a price is generated. Here's an audio that might clear things up http://mises.org/media/1728
Why? He does not do it alone mate. His team are just as important as Bill is. Respect them and don't glorify one man as if he was responsible alone for the success of Micro Soft.
Who would make the decision? That is where Government steps in to Govern. Power Tripping individuals need to be Governed no less than schoolyard bullies. And that would not effect the production at MS.
I'm more than knowledgeable re: Supply and demand. I'm also very cognizant of how greed effects prices when monopolies take charge. Look at the pharmaceutical industry as example. Profit margins are near 1000% on many drugs. They "claim" it is due to the money spent on R and D. Hogwash - there are so many fund raising events supporting R&D it is crazy.
Power Corrupts. Absolute Power Corrupts absolutely.
Power needs to be Governed, plain and simple!
Capitalism is the greatest system ever devised, but it needs a pressure valve. Power Tripping needs to be stopped.
As I said - I am definitely a Right Side thinker/voter, but I am not so naive and blind to see that Capitalism is not perfect. Power Corrupts. Absolute Power Corrupts absolutely..... thus the need for a pressure valve is needed.
How is Gates NOT responsible for the success of Microsoft? He started the company!!! He took the risk to create the company, and he surely pays those who keep his company afloat very well!! (after all, they could very easily quit and start their own company, or, quit and work at Apple!). The people who work for Gates are not slaves, they work there because they fell it in their best interests, and I'm sure that Gates realizes this by paying them enough so they won't leave.
No one in our system has more power than Obama or Bernanke, yet you're asking them to have more power!! You are demanding that we take powers away from countless entrepreneurs (Gates, Ford, Jobs, and countless others -- just name a CEO or a manager) and give the power to a few elected officials!! It's ludicrous to even make the claim that we need to strip people of power and give it to a few select others and try to still hold on to the ideal of "minimizing power to avoid corruption"!!
========
Your quote: "Power Corrupts. Absolute Power Corrupts absolutely"
Your quote: "Who would make the decision? That is where Government steps in to Govern"
My point: the number of CEOs and Managers VASTLY outnumber the number of government legislators.
Presidents are not more powerful than business leaders. Get real! They are elected officials..... the people are supposed to have the power. Presidents are not dictators!
Those vast numbers of CEO's all have a vote!
You appear to claim the Billionaires don't cause problems via wealth control? When five N.American billionaires go to China to invest in an automotive company and have a documentary done on Television showing their investigative trip....... TONS of followers will invest with them. They move the money earned off the backs of people in N.America out of America....... that is like biting the hands that fed them and made them rich. That is Wealth Control! They have a TV show showing what they are doing, to prop up their own investment - that is power tripping wealth control! (I am referring to a recent documentary showing Buffet and Gates and three other Billionaires going to China.... blatant wealth control and manipulation))
Socialism is NOT communism. Socialism is the necessary balance to Capitalism to stop corruption.
In the world today we have two problems. The Left Extremists have too much power and have gotten out of hand. The Right Extremists have too much wealth in the hands of too few and their B.S. is no less a problem than the Left Extremists lobbying.
Simply put - there has to be a balance. The crazy noise the Extremists on both sides make is similar to childish temper tantrums.
Balance is Key!
You're telling me that you don't think that when FDR made owning gold illegal and then confiscated all the gold owned by Americans by executive order, he wasn't more powerful than a CEO?
Get real. Obama could do the same thing any day now. In fact, he probably will (or one of his predecessors).
Anyway, A lot of what you say assumes the fallacy that "one mains gain is another's loss". This is inaccurate. When gates builds a computer, he doesn't whip his subservients into production; he OFFERS them a paycheck for their work. If they refuse, they don't do the work and don't get the paycheck. If they agree, then they get what they agree to.
That's it. There's no (your quote) billionaire who earns his paycheck "off the backs of people in N.America out of America." There are only billionaires who have to compete with other billionaires for a working force to build the products that us consumers want.
Last time I got a paycheck at work, I didn't think "THOSE BASTARDS OWE ME THEIR COMPANY!!!" (which is what Socialism and your comments seem to claim), I thought "man, I agreed to work for this money, and they upheld their end of the bargain".
Your rebuttal assumes I am a left extremist. I'm more right than left. I'll re state "I am a center Right Thinker/Voter. I believe in Free Enterprise and the right to achieve through work and toil. Socialism is NOT communism. Socialism is the balancing point to make sure that Capitalism does not become Communism through Wealth Control."
Don't you see, "Capitalism IS the best system" but it is not perfect!"
When too much wealth ends up in very few hands, power tripping and corruption is the result. There needs to be a slight modification to Capitalism as it is or it will continue to be extremists fighting extremists. A creative solution HAS to be considered. Closer to the middle..... (and a bit more to the right would be the most workable... in my opinion)
Can you be creative and come up with a better way to stop the disappearing working middle class. If you can - please share it. Unfortunately, socialism must be part of a capitalistic society or e will end up pure communism via wealth control. The disappearing working middle class is proof!
Extremists both left and right assume it is black and white. They both stand on their extreme position that in their mind is as clear as black and white. Grey in the middle somewhere is the solution.
All my comments are geared to only help you see the unbalanced situation is not healthy. My suggested solution may not be workable - but there has to be something that is.
Capitalism un-governed will become communism via wealth control. All you have to do is look at the dwindling working middle class to see it happening now. That is evidence to a problem that needs addressing.
Standing close minded as an extreme left or right will not produce the necessary change. But change is in fact necessary!
You can be as far the right as you want, socialism doesn't work because it entitles your hard work to someone else simply because someone feels bad.
I'll make my last arguments against this "black vs white arguments always end up poorly. we need a shade of gray" type of argument. I simply can't accept this. What if the bounds were Mercantilism and Communism? -- would we still need to decide on a shade of gray? Or what if we were discussing intelligent design vs evolution? -- is a shade of gray still necessary, or even satisfactory to everyone?
Of course not. Compromise isn't always a good thing.
Also, if you think that our current system is Capitalism, then you clearly haven't looked at your paycheck recently: almost 50% of our wealth is taken by our government, and trillions of dollars have been created out of thin air by a government-granted monopoly called the Federal Reserve.
Aside from these, we seem to just be re-hashing the same arguments. I'll just end this with a "thank you for commenting".
Federal Reserve is a privately held corporation and the creation of wealth through debt is another totally different topic.
I'm with you on the need for Government reform. As I stated - the left extremists are way out of line. If you were an extreme left thinker I would be arguing against your position the same as I am your extreme right.
"As I see it Government should be able to do all it needs to do with a tax of 20% max. That should give us education, health care, roads, policing, military and even space exploration."
The Governments of today are way too top heavy, way to full of rules and regulations that do no-one any good. Frankly I hate the governments of today's world. They need a shake up. Seems every useless known cause man can dream up gets government funding and that is stupid to say the least. I'm with you far more than you understand.
Do you know how much a Billion is? Here is an illustration for you to ponder. Bill Gates is estimated to be worth 53 Billion. If he was to count his money one dollar at a time at one dollar per second - it would take him 1680 years to count it up. That's non- stop counting! No-one should have that much power. Period.
As I see your stand - you will compromise your freedom by allowing wealth to be controlled by a handful of people to uphold your vision as to how perfect and non greedy all entrepreneurs must be.
Sorry Evan - "Life is more than consumer goods!" and ""Power Corrupts. Absolute Power Corrupts absolutely""
It has been fun chatting!
I would agree with you if socialism or communism for that matter worked in that manner. This why the government must get involved. The concept is not based on dividing up Mr. Gates factory or th hard asset holdings of Warren Buffet. It is based on following the money...at least where we are in America today. Roughly the top 2% of income earners in this country account for around 40% of the taxes paid. Those in the middle class income levels account for less than 3% at this point. This, in and of itself is a redistribution of wealth through taxation. The taxes are taken from those who produce the most in the greatest proportion then redistributed throughout society at the discretion of the government through social services programs, assistance programs, and earmark spending. As it is, the government is probably taking far too much money from the citizens now than what is needed to operate the infrastructure of the government...especially in light of the fact that we don't even have a budget. I heard a senator state just the other day that earmarking would probably continue because after the president provided for the basic necessities of government function and then applied for appropriations for funding "his programs" there would be far too much money left over which the President would not want to burden himself with deciding how it is spent. That tells me that Congress basically has a large slush fund drawn from the taxpayers and primarily the richer ones to toss about as they please. Under capitalistic principles economies function because there is a reward for productivity. The reason Bill Gates owns a computer plant is because it is productive. Socialism and Communism theorize that everything should be enjoyed equally by the masses although in principle they still have an uppercrust class who have more. In those societies, it does not take long for Bill Gates to decide that the productivity of his computer factory is doing him little good and there is no reason to attempt make it more productive or more profitable because the money for the most part goes into the government pot and they decide who benefits by it. Soon Bill Gates has given up and his computer factory slow erodes to the point that production is at all time record lows. Now Bill is poor and the government has lost its golden goose because they taxed it to death. Bill is poor for two reason...first, the government took a larger and larger portion of the money that he produced. Secondly, the actions of the government and those standing with their hands out in society not producing anything eventually demoralizes Mr. Gates to the point that he sees no point in continuing his effort unless it is done at gunpoint. There has certainly been a redistribution of wealth in this scenario. What we can't see is where the wealth went because so much of it gets skimmed off in its trip through the government coffers and takes an indirect route into some slippery politicians pocket or that of his cronies. If you indeed subscribe to a capitalist philsophy, I implore you to fear redistribution of wealth because it is quite real and quite possible. Thanks for sharing a hub that makes ya think! WB
Wayne - To argue your point I have a question - just where do the wealthy get the money to pay your proposed 40% of taxes paid? Corporations add taxes to the cost of goods so the people buying are paying the taxes.
A fair tax may be value added tax. Everyone should keep 100% of their wages and only pay taxes on goods and services purchased.
The working middle class carry the load today from both left and right extremists beliefs.
yay! Well said and well supported. So many people have no basic understanding of the US Constitution these days... the federal government is not charged with trying to smooth out inequalities between social classes. The job of Washington is to stay out of the way and let people pursue their own happiness.
Thank you.
Holy crap. Greetings fellow Ohioan.
With all due respect, you're using a straw man in your argument. Nobody with any knowledge of business is arguing for redistribution of wealth like you proposed.
Another argument I continually see is the, "if people can't get filthy-f'n-rich they won't have an incentive to do anything" argument. That's also BS. Do you think Bill Gates and friends created Microsoft did and do what they do solely to make more money? A quick look at Bill's bio would suggest otherwise. Do you think Bill primarily spends most of his time and money (half his wealth!) working hard on the Gates Foundation because he wants to make money? Did you study Japanese to become rich beyond your wildest dreams? Did Bach, Newton, Godel, Mozart, Einstein (who was a socialist by the way), Da Vinci, Aristotle, etc... made their massive contributions to society because they wanted to make money? Money is only the primary concern of people who 1) enjoy the game (the economic system we have created), or 2) have very little money, and need more to survive (due to the economic system we've created).
The Austrian school of thought is just a bunch of BS. It's all based on unfounded assumptions, and lacks mathematical/scientific/empirical rigor. The freshwater school of thought is much more advanced. And you're actually in the right area to study that.
actually, the Gates foundation exists because the government was threatening to tear his company apart through monopoly legislation.
Bill Gates likely didn't revolutionize the computer industry because he wanted money, but I'm sure that he stayed in the business because he wanted money. I'm sure that his being rewarded for his efforts let him know that what he was doing was worth it, and the money further encouraged him to try harder.
Each person you listed likely didn't do what they did because they wanted money, but the fact that they got rewarded by doing so surely kept them going.
I simply disagree with your assessment of the Austrian School - they predicted just about every major economic event in the 20th century years in advance.
Also, if you think that "redistribution of wealth like [I] proposed" isn't happening... then what do you call an almost 50% tax rate in the States? 30+ federal income tax, ~8% state income, ~7% sales, monetary inflation, and the countless other taxes in existence?
That's Redistribution of wealth.
Hmm. You'd have to be in a very high income bracket to pay 30% federal and 8% state income tax. These people have the most money to spare, so it only makes sense, IMO. The cost of living is the same across all income brackets, so progressive taxes make sense.
Some inflation is a sign of a healthy economy. Current inflation rates are much too low to be worry about. Deflation is absolutely debilitating to a capitalist economy (See Great Depression, and most of 2009).
I'm not arguing that taxes aren't, in a sense, redistribution of wealth (even though both the wealthy and poor share the benefits from taxes). I'm arguing that the case you outlined in your article is a straw man argument. Nobody is talking about redistributing wealth in that manner.
I'm also pretty sure Bill didn't start the Gates Foundation because of competition law (please tell me you don't think monopolies are a good thing). I fail to see how starting a charity would help. The Gates Foundation is a charity organization (possibly the largest one in the world?). A while back, Bill and Warren Buffet were on a campaign to convince all billionaires to give half their wealth to charity. Redistributing their wealth :)
Inflation is a sign of Fiat Money, not of a healthy economy. And current inflation rates are NOT low - the money supply has quadrupled in under 10 years.
Deflation is NOT bad for the economy: "my money is worth more than it used to be!"... why is this bad? In fact, we're having massive deflation in one of the US's top sectors of the economy: computers. Each year I can buy a better computer for less money, yet the industry is thriving.
You've obviously fallen for Keynesian Economics, we won't reach an agreement.
Keynes was a fool.
Evan - have you read about Gary Kildall and the early operating systems for computers called CP/M ? If you read about it and learned how Gates scooped the deal between Kildall and IBM you would not be so pumped on Mr Gates.
Truth is Kildall had an operating system that already was capable of doing multi-tasking when Gates scooped the deal with IBM (the first home computer giant). That deal was in process of being made with Kildall and IBM.
Kildall was a friend of Gates. Gates bought rights another operating system and sold it IBM while Kildall was on holidays... screwing his friend who had a better operating system and in truth slowed the computer industry down.... How did he slow the industry down? Gates was 10 more years coming up with multi tasking when Kildall already had it.
http://inventors.about.com/library/weekly/aa033099
http://www.freeenterpriseland.com/BOOK/KILDALL.htm
I respect Gates as a shrewd business man - but I give him no glory for making the computer industry what it is.
All is fair in Love and War .. AND Capitalism!
So you're saying that he's been running a milti-billion dollar company successfully for decades....
... and that's a bad thing?
I respect Gates as a shrewd business man - but I give him no glory for making the computer industry what it is.
Have you read John Perkins "Confessions of an economic hit man"?
I have read it. Perkins talks about the "evils" of capitalism...
... but every single evil deed is carried out by government. The strategy: companies come in and ask for government hand outs; if they decline, they woo and seduce the leader; if they still decline, they try to have the *CIA* (government) assassinate the leader; if that fails, *WAR* (government) is likely to break out. Notice how the companies use enticements to get what they want, while the government uses brute force and threats. There's a reason for this contrast.
No where in that recipe is the free-market at fault. Only the government is. Throughout my own copy of the book (I have another of Perkins' books, I have yet to read), I have numerous underlined passages and comments regarding how he's attacking capitalism, but only showing how evil the government is.
His book further cemented my belief in capitalism and further increased my hate of government.
Stick to your guns then LOL
:-)
So somebody can read Perkin's "Economic Hit Man" and still not see what is happening to us right now. Must have skipped a few pages. They print more money and hand it to the Banksters. The Banksters stop lending anyway, and use the money to bid up commodity prices. Your wealth has just been transferred. The Banksters took it. Now get out there and mow my lawn if you want something to eat!
Most people think of taxes as the method wealth is redistributed and countries that lean towards "socialism" such as some European ones use this method. I find the article very misleading in a number of other ways since it doesn't even mention that the taxes we pay are, for the most part, based on "net" figures. If I owned 100 factories and they made no money last year, I would pay no money. If I was GE and made $12 billion, I would expect to pay a lot more in taxes than an owner who made nothing, for instance. This type of thinking is based on a concept of "fairness" that is needed for countries to thrive economically and socially. When a people feel that they are being exploited by the rich, we tend not to think of these countries as democratic. Democracies in large part were a response to clear inequalities.
As for individual tax rates, there are few who seem to know about such things recommend the same tax rate for someone making a net of $100,000 and $100 million. Again, if an individual has a bad year and only makes $50 million rather than a hundred million, he or she will pay less taxes. The wealth of business owners is often invested in their means of production and little of this "wealth" is taxed directly, the taxes are paid when there are profits. Thus in the bad year that I only make 50 rather than $100,000, the money I have tied up in my factories, etc., remains mine and is not taken away as part of a socialist plot.
It seems that the above is just one fundamental part of both the argument and economics that is not properly taken into account.
Having read a few comments here and many other articles and comments on similar topics, it seems that there is good reason to make economics mandatory in the schools since it seems that people should have some basic understanding of the topic to understand the strange economic positions advocated by both political parties as well as many individuals.
Our economic ignorance allows both Democrats and Republicans to avoid making many necessary economic decisions, and they can continue to kick these unpleasant realities further down the road for future tax payers. Worryingly, more and more I suspect that the majority of those who govern have as poor an understanding of economics as those of us who elect them.
Most redistribution of wealth happens as a result of massive inequity in the first place. Society attempts to re-adjust itself, in order to preserve order and lives.
Take for example, in South Africa. One of the common mottos is 'Burn the Farmer'; and the people who espouse this often follow suite. Why?
The figures are something like 80% of the arable land is owned by 5% of the population, being white farmers.
No man is an island. No man is self-made. Sure, you may not have colonized or enslaved anyone, but that doesn't mean you don't benefit from such acts in previous generations.
Your anti-war stance is also absurd. This planet is conflict. You grew up in a very passive part of America, and married an Asian woman. You live in your bubble, and know nothing of the struggle of 7/10 of the world.
The more I learn of of the 'Objectivist' ideal, the more I hate it. You essentially condone the creation of a ruling class, because 'there must be a reason why they are there'.
Victorian Era Royalists might be called Libertarians by today's standards. Many argued that social evolution had put specific Kings in charge for a specific reason, even while movements were underway to depose them.
The second that a movement starts that aims to depose you, you can no longer hide behind that 'there must be a reason' type of thinking. If the status quo was acceptable, then no one would care how many billions of dollars Bill Gates had.
Let me address this invisible privilege argument:
Those who gained wealth by stealing from others should give their wealth back.
Those who gained wealth from their relatives who gained said wealth by theft should give the wealth back (but it must be proved).
Those who benefit from their relatives who did not steal wealth have no need to return any wealth to anyone.
To Evan G Rogers: Another great article. I totally concur with you again! There are people who are envious of the more successful and affluent in this society. There is a cult of anti-achievement which glorifies the poor and underachieving while it derides those who are affluent and overachieving. This does not make sense at all.
I have noticed this in discussions and in many books, the poor is "exploited" and "downtrodden" while the rich is "greedy"-something has to give here. This is true in only an extreme minority of cases. Many poor people have a poverty consciousness mindset of passivity, victimology, and fatalism which I shall not go into here. Rich and affluent people, au contraire, believe in being proactive and strategize what they want out of life. Again, excellent hub as usual! I want to end with: Nobody owes anyone a living or an income-it is up to the individual himself/herself to achieve. If the person elects not to achieve, then let him/her sleep in the bed he/she made!
Great Hub. Thanks. In my former country (Soviet Block) redistribution of wealth came to the hands of gangsters. My dad had savings as a carpenter for old age, weddings or education of children. He lost all overnight and we became very poor.
Aya Katz Level 4 Commenter 18 months ago
Does Gates actually own Microsoft? Is Microsoft a computer factory? Don't they just write software? I'm confused.