Thomas Sowell on the fallacy of redistribution
AEIdeas
While reviewing some old CD posts from 2012 (including the Milton Friedman lecture below), I came across a post with a great quotation from Thomas Sowell on the “fallacy of redistribution,” which generated nearly 400 comments below the original post (might be a CD record for comments?). So here’s a re-post of Thomas Sowell explaining why redistribution fails (emphasis added):
The history of the 20th century is full of examples of countries that set out to redistribute wealth and ended up redistributing poverty. The communist nations were a classic example, but by no means the only example.
In theory, confiscating the wealth of the more successful people ought to make the rest of the society more prosperous. But when the Soviet Union confiscated the wealth of successful farmers, food became scarce. As many people died of starvation under Stalin in the 1930s as died in Hitler’s Holocaust in the 1940s.
How can that be? It is not complicated. You can only confiscate the wealth that exists at a given moment. You cannot confiscate future wealth — and that future wealth is less likely to be produced when people see that it is going to be confiscated. Farmers in the Soviet Union cut back on how much time and effort they invested in growing their crops, when they realized that the government was going to take a big part of the harvest. They slaughtered and ate young farm animals that they would normally keep tending and feeding while raising them to maturity.
We have all heard the old saying that giving a man a fish feeds him only for a day, while teaching him to fish feeds him for a lifetime. Redistributionists give him a fish and leave him dependent on the government for more fish in the future.
If the redistributionists were serious, what they would want to distribute is the ability to fish, or to be productive in other ways. Knowledge is one of the few things that can be distributed to people without reducing the amount held by others. That would better serve the interests of the poor, but it would not serve the interests of politicians who want to exercise power, and to get the votes of people who are dependent on them.
Hear, hear.
Although there would be unintended consequences of moving to free markets.
Rural areas in the USA would just about evaporate without constant federal subsidies of infrastructure. Everything in rural America is subsidized or cross-subsidized, from airline seats, to phones, to water and power systems, to Internet service, to highways, railroads, crops, soil conservation, you name it.
The VA represents a huge redistribution to former federal employees, who get free health care for life, inside of federally owned hospitals staffed by federal nurses and doctors. Not just socialist redistribution, but communism!
Privatize the VA, and give vets vouchers, en route to phasing the VA out entirely? Pension programs for any public employee group is a time bomb, as we know.
Property zoning is redistribution of value to those groups that can limit supply, usually of housing,
No more property zoning?
I like Thomas Sowell. I agree with him. But bland platitudes are easy.
The rubber hits the road when specific proposals, usually that gore sacred cows, are made.
The reason we build roads in rural areas is so that farmers can deliver food to urban areas. The great highways like I80 go through Iowa and Nebraska more to get goods to New York, Chicago And San Francisco than to benefit Nebraskans and Iowans? How does a New Yorker get a Japanese Car – after a trip over I80 from Los Angeles.
Why is helping merchants deliver goods to customers a legitimate function of the federal government? If, having been taught to fish, I feed myself by fishing off the Atlantic Coast, why do I have to subsidize farmers delivering goods to urban areas or car manufacturers delivering vehicles to their customers? Let them build their own roads.
I never said it was, except a good road artery and ability to get food places used to be necessary for the National defense. Today that re isn’t quite as important.
But then I don’t know, for want of an interstate highway system, would you be happy paying 10x as much for you tomatoes? It is an interesting question, regarding the one thing government has done merely half ass rather than totally messed up. Is there an added benefit to good public roads that exceeds the harm of using government to create them.
There can be uncomfortable consequences to reversing any bad decision (ask a drug addict or an ex-smoker or someone in Chapter 11), but in real life, they should not prevent you from doing so. Unless, of course, you live in a corrupt world where your doctor or lawyer or congressman benefits handsomely from keeping all the harmful habits in place.
Rural areas in the USA would just about evaporate without constant federal subsidies of infrastructure.
Yeah, and? Even were this partly true, only the mom and pop farms would be in peril. Agricorp would continue, and we’d continue to benefit from the lower prices currently resulting from economies of scale and newly lowered prices from those ended subsidies no longer inflating prices. Mom and pop farms have no more inherent right to exist than any other enterprise, mom and pop or allegedly too big to fail.
The VA represents a huge redistribution to former federal employees, who get free health care for life, inside of federally owned hospitals staffed by federal nurses and doctors.
Apparently you’ve missed how lethally dysfunctional the VA has become and how little health is associated with the free “care.” Dissolve it, return all of its employees to the private sector (with all their vast experience, surely they’ll have no trouble gaining private employment), and use the existing VA budget to give vouchers to the veterans.
Military pensions are a valid concern, but I’m willing to make an exception for them. The nation wouldn’t exist without a military and those vets. Neither would public “service” unions or the community police forces.
Property zoning is redistribution of value to those groups that can limit supply, usually of housing, No more property zoning?
I’m down with that. The only folks with a legitimate interest in zoning are the folks in the local community. If there’s to be zoning, that’s as high up the governmental hierarchy as zoning should go. After all, either a man owns his private property, or he does not. Government mandated permissible uses are a serious intrusion into that ownership and a claim by government to a measure of ownership of that same property.
The reason we build roads in rural areas is so that farmers can deliver food to urban areas.
That’s a side effect, although it may be a deliberate one, as well as a political selling point for getting the Interstate Highway system built. But Eisenhower built (most of) the system because of his personal experience with the efficiency of the German autobahn system in WWII. It was a national security question.
Eric Hines
Cool response, however, if you remember records Ben is like a broken one always repeating the same point ad nauseum whether it fits the topic at hand or not.
Everything rural is subsidized is a line from some one living in the hives. They like to believe rural lands are subsidized rather than learning it is the hives that are heavily subsidized.
Our rural county rarely sees federal money. Except for federal highways we locals pay ALL of our rural road expenses. NO subsidies from anywhere!
Many of the items you list as subsidized are not unless you get government aid!
Most rural areas would be better off with out the federal rules that usually cost the rural lands way more than any federal infrastructure money.
When we do get federal money it is normally spent on things that the locals would never fund and much of the money is just wasted. and seldom is it well spent.
Zoning in Calif is the tool the wealthy use to exploit working folks by causing outrageous housing prices.