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Quote 603

Wealth is created through voluntary cooperation and exchange. A voluntary exchange is not a zero sum game in which gains are balanced by losses. Its a positive sum game which leads to the creation of additional value that is shared by the participants.(involuntary transactions are often negative sum games, for in such cases the losses to losers are far greater than the gains for in such cases the losses to losers are far greater than the gains to winners.)

Where does wealth come from?

Much depends on how the rich man obtained his wealth; if he devised and developed a product, invested his savings and time bringing it to market, employed people to make, distribute it and sell it, and takes on all competitors ruthlessly but legally and on a level playing field he is a wealth creator.

If he started in the same way and then persuaded his government to create regulatory hurdles preventing competitors from entering the market he will be richer, but he will be the leech (he will also be the sort of businessman the left prefers and encourages of course).

What redistribution means

Quote 614

Every act of production is itself an act of distribution. IF opportunities , understood as freedoms to engage in voluntary activities to create wealth, are unequally distributed , it is likely that that will entail an unequal distribution of wealth, not because a sum "socially created" wealth has been divided unfairly, but because opportunities to produce wealth have been withheld for some

Redistribution, means taking from one and giving to another. It is a soft word for theft.
Its architects, like to focus on where the money is going as a justification for the action of theft.

But the truth is the money has to be taken from somewhere in order to alleviate the symptoms(not causes) of poverty.

In order to mitigate the truth that the act of redistribution is theft, the architects say, how is it justice, that someone has excess and another does not have enough. They then term redistribution as fairness.

There is a big difference between saying that a rich man should, morally speaking, give to the beggar, and saying the beggar has a right to demand money from the rich man.

Do you have a right to someone elses wealth?

George ought to help

Redistribution is not fair and does not help poverty.

Take two people, both have incomes of 10,000, one saves 1/2 of that each year for retirement, and the other spends all their income. The Government decree's that 10% of someone's wealth saved in a year must go to people with no wealth to help the gap between rich and poor.

Different taxes for same income
Both the saver and spender have earned 100,000 over 10 years, but because the spender doesn't save, he is considered poor. In total the spender has received 105,000 and the saver only has 45,000 in savings instead of 50,000.
This cannot be fair, as the saver is punished for saving, but it is being justified as fair! The saver has less to spend than the spender, but has to give the spender some money.

Also the saver, must finance the 'poor' person because of their choices, although responsible for the poor persons choices, the saver has no control over them in return.

This example is simplified and not 100% accurate as you usually do not get taxed on your savings. But if you are a saver, your income tax comes out first, before it becomes savings, and you are taxed on interest from savings.

Redistribution is bad for economy if you are protecting one part from the elsewhere, it makes that part flabby and inefficient and the population end up paying more.


Thinking more cleverly about redistribution of wealth

It can be done privately, 
  • Parents to kids, 
  • To charity’s
  • via jobs
Everyone should remember their daily bread does not come from government . It comes from companies and in a recession we depend on business to employ us so we can pay taxes and help those who genuinely need it . The best system of wealth redistribution is the job market, not income support, tax credits etc.
Government crowds out the chance of giving, as it already gives to those that would be given to,  and money taken off those that would give.

We would prefer to redistribute our way, in the way that we think it should be done. Not in the governments interests and methods.

Morality of redistribution

Quote by Ayn Rand from “The Dead End,”

"If a man proposes to redistribute wealth, he means explicitly and necessarily that the wealth is his to distribute. If he proposes it in the name of the government, then the wealth belongs to the government; if in the name of society, then it belongs to society. No one, to my knowledge, did or could define a difference between that proposal and the basic principle of communism."

We need to remove all programs where the government forcibly took property from one citizen and gave to another.

Progressiveness - saying anything that makes the poorest better off relative to the rich must be “a good thing” this is is morally dubious. Under this moral framework, one should celebrate a Budget which sees the incomes of the poorest 20 per cent fall by 5 per cent so long as all other groups are made worse off by 6 per cent.

Sense of redistribution

We can equate entitlement of money for work with entitlement of grades for study. Would you give everyone equal grades?

The organisation of redistribution

There is no answer to what everybody should have. - single world answer MORE
Leads unstable policy's. 

  • Any particular pattern of distribution will require enormously intrusive government administrative mechanisms.
  • Some subset of a society will need to be given special powers to collect the information of everyone’s wealth, income, or both.
  • This is not some accidental occurrence that can somehow be avoided; it is absolutely necessary to know from whom to take the wealth and to whom to give it according to the approved pattern of social justice. 
  • Collecting this information will necessarily be privacy invasive, and the existence of a database with such information can lead to the intimidation of dissidents. 
  • Whatever level of redistribution is adopted will require the continual use of force to achieve and maintain over time. 
  • The natural outcome of liberty will inevitably destroy whatever pattern of holdings is adopted as the socially “just” one.
  •  In addition to collecting the relevant information to discover how actual holdings differ from this pattern, some subset of persons will need to be empowered to use force to continually adjust holdings so they conform.

"Any solution to inequality means a huge and intrusive organisation of government" Randy Barnett (LLF13)
This organisation will be enormously dangerous and could eventually lead to a gross miscarriage of justice.

Whatever level of redistribution Government force will be required to stop liberty from unbalancing the social justice.

Redistribution on basis of "what one deserves"

The idea of rewarding desert is impracticable.
Quote 818

Referring to retribution as the “Siamese twin” of distributive justice theories based on desert, Walter Kaufmann argues that “desert is incalculable. Not only is it impossible to measure desert with the sort of precision on which many believers in retributive justice staked their case, but the whole concept of a man’s desert is confused and untenable. This claim is as fatal for distributive justice as it is for retributive justice.
It is quite impossible to say how much income surgeons, lawyers, executives, or miners deserve; or what kind of housing each deserves, or how much free time per day, per week, or per year. It makes no sense to call any particular distribution of such goods among them “just".”

   --  Randy Barnett

"Income" cycle

There is not a fixed group called “the poor” and another called “the rich”. 
Over our lifetimes there is mobility in incomes, people have children, move from full-time to part-time work and back again, and live in various housing tenures. 

Policy changes which might look “regressive” actually can be far less so when you examine their effects across whole lifetimes. VAT affects poor more than rich. But at a given point in time, poor could be people between jobs or students. Across a full working life, VAT tends to affect income groups proportionately.

Inequality generally is much lower than if you look at the population at one point in time. In other words, much of what is held up as “worrying inequality” is actually a reflection of people being at different stages of their life-cycle.