Last Updated:July 23 @ 07:24 am

Sowell: The Fallacy of Redistribution

By Thomas Sowell

The recently discovered tape on which Barack Obama said back in 1998 that he believes in redistribution is not really news. He said the same thing to Joe the Plumber four years ago. But the surfacing of this tape may serve a useful purpose if it gets people to thinking about what the consequences of redistribution are.

Those who talk glibly about redistribution often act as if people are just inert objects that can be placed here and there, like pieces on a chess board, to carry out some grand design. But if human beings have their own responses to government policies, then we cannot blithely assume that government policies will have the effect intended.

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.

People in industry are not inert objects either. Moreover, unlike farmers, industrialists are not tied to the land in a particular country.

Russian aviation pioneer Igor Sikorsky could take his expertise to America and produce his planes and helicopters thousands of miles away from his native land. Financiers are even less tied down, especially today, when vast sums of money can be dispatched electronically to any part of the world.

If confiscatory policies can produce counterproductive repercussions in a dictatorship, they are even harder to carry out in a democracy. A dictatorship can suddenly swoop down and grab whatever it wants. But a democracy must first have public discussions and debates. Those who are targeted for confiscation can see the handwriting on the wall, and act accordingly.

Among the most valuable assets in any nation are the knowledge, skills and productive experience that economists call "human capital." When successful people with much human capital leave the country, either voluntarily or because of hostile governments or hostile mobs whipped up by demagogues exploiting envy, lasting damage can be done to the economy they leave behind.

Fidel Castro's confiscatory policies drove successful Cubans to flee to Florida, often leaving much of their physical wealth behind. But poverty-stricken refugees rose to prosperity again in Florida, while the wealth they left behind in Cuba did not prevent the people there from being poverty stricken under Castro. The lasting wealth the refugees took with them was their human capital.

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.

Barack Obama can endlessly proclaim his slogan of "Forward," but what he is proposing is going backwards to policies that have failed repeatedly in countries around the world.

Yet, to many people who cannot be bothered to stop and think, redistribution sounds good.

Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His website is www.tsowell.com. To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2012 CREATORS.COM

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19 Comments

  1. nickster99Comment by nickster99
    September 20, 2012 @ 9:47 am

    Mr. Sowell again another commentary hitting the nail on the head. I do believe it is about power and the ability to force their will on the people. Too bad a lot of the people are like lemmings ready for jumping off the cliff of obummers choice.

    We need men and women with your intellect in leadership in this country. Where are they?

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    • inluminatuoComment by inluminatuo
      September 20, 2012 @ 10:55 am

      Founder James Madison:

      “Theoretic politicians, who have patronized this species of government, have erroneously supposed that by reducing mankind to a perfect equality in their political rights, they would, at the same time, be perfectly equalized and assimilated in their possessions, their opinions, and their passions.”

      “I believe this is one of the most profound arguments to be made in teaching the general public that government can only do one thing flawlessly … that is to “consolidate power”.

      “The government cannot be benevolent and should never be
      trusted to be so. Any benevolent behavior will always result in ”consolidation of power.”

      Anybody but a blind Sheik could see that the consolidation of power to the federal government under socialist oppression by first attacking your rights to personal property, is Obama’s game plan number 1. This is so totally against the Founding principles of American individual liberty as to be traitorous. The founders gave us a remedy, the voting booth. Remember in November and take back the power that only YOU “THE PEOPLE” were intended to wield.

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    • varkdrvrComment by varkdrvr
      September 20, 2012 @ 11:06 am

      Dr. Sowell always clarifies the discussion. Why aren’t there people like him in government? Because, right or left, conservative or liberal, those in power have to be politicians to get there. Unlike Groucho Marx comment, “I wouldn’t want join a club that would let me be a member.”, politicians are desperate to be members of a club that requires insincerity, conniving, and general opportunism. Not all politicians are self-serving liars, but most people who aren’t have absolutely no desire or reason to go through the hell involved in trying to get elected. The result is the people who would best serve as leaders are the least likely to run for office.

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    • inluminatuoComment by inluminatuo
      September 20, 2012 @ 11:16 am

      What is it about Romney’s truths that Liberal queens of denial cannot abide? Yes 47% pay NO FEDERAL TAXES, yet we borrow 42 cents of every dollar to keep the socialist allusion of prosperity alive for our children to have to pay off in future economic slavery. Hope and change for a future that when it arrives the promises never arrive with it and the change is ALWAYS for the worse. If it were not for the main stream liberal media propaganda arm of the Democrat party coloring the facts into emotional pabulum for your masses, Obama would have acquired his well earned defeat months ago. So much for the redistribution of tax responsibility on a basis of equality where responsibility is the only thing that never gets dished out equally for the Democrats to acquire THEIR fair share, and you CAN discrimiate against people based on personal success via hard work and American exeptional responsible behavior, not to mention personal income.

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    • GHUComment by GHU
      September 21, 2012 @ 12:10 am

      “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”
      ― Alexis de Tocqueville

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  2. noveldogComment by noveldog
    September 20, 2012 @ 10:35 am

    Once they drop the blade your worries will be over. They did not buy and store thousands of guillotines in government buildings for nothing. Get worried….or prepare to die.

    We got a fight on our hands whether we want one or not. That fight is to survive. The Muslims want to dominate the world. They will kill you if you don’t give in to them. They want a One World Government and our News Media is complicit in the effort.

    Check on those guillotines and see for yourself, then you will know my warning is true.

    Vote Republican, or prepare to become a slave to the Muslims.

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  3. inluminatuoComment by inluminatuo
    September 20, 2012 @ 10:47 am

    It’s not,,,”It’s the economy stupid” it’s the dishonesty and stupidity of reallocating finite precious American resources from responsible caretaking hands of investment into the hands of mobs of self-indulgence and passionate pursuit of the immediate gratification at all costs to everybody but themselves. Case closed, you have seen what this ideology brings you in the end, just more socialist collectives of ever enlarging failure, poverty and squandered opportunity to make things right again.
    Millionaire W. Clement stone once said that if all the wealth of America were equally distributed at noon, by 12:01 somebody would have more than everyone else. You cannot fight the laws of mother nature or human nature. Socialism defies the working laws of nature at every turn and only created an artificial reality that always comes crashing down upon those who embrace it. What a boring world indeed it would be if we all looked the same, believed the same and owned the same things. This is not a human condition, nor is Obama’s ideology of redistribution of honest wealth to the dishonest dependents. Men were created to live independent and self-sustaining dignity. This is not what the democrats offer, only collective poverty in ideology which is always followed b poverty in fact.

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  4. jethroComment by jethro
    September 20, 2012 @ 11:14 am

    Given what human nature is all about, I think redistribution could work perfectly well if we were all given a pre-frontal lobotomy. There is a flaw in that theory, however! Who performs the procedure on the last man standing??? That person effectively becomes the DICTATOR! So we come full circle on this. Redistribution grants someone the power to lord it over us all, with some being willing and others not.

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    • inluminatuoComment by inluminatuo
      September 20, 2012 @ 11:17 am

      Groucho also said he would rather have a bottle in from of me than a (Liberal) frontal lobotomy

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  5. inluminatuoComment by inluminatuo
    September 20, 2012 @ 11:32 am

    What patriotic American would not pay taxes to INVEST and grow America? What fool would put money into the hands of inexperienced children in adult bodies who consume the money they were entrusted to invest. Obama, Obama, give us back our wasted stimulus $billions so we can place it into the hands of those intelligent enough to invest it and return it back to us with a profit! Your performance has proven you unfit to trust with our money or our nation for another 4 years.

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  6. joelinpdxComment by joelinpdx
    September 20, 2012 @ 11:53 am

    The Dimbulbs don’t give a hang about history. There’s plenty of it out there to prove how wrong their Utopian dream is but why let the facts get in the way of a good government handout.

    This recording proves that Obozo has been a committed socialist since 1998 and probably long before that. Remember, he was raised by card carrying Communists.

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  7. powertothepeopleComment by powertothepeople
    September 20, 2012 @ 12:06 pm

    Once again, another good copy on the failures of the collective society that so impassioned Obummer as a young man finding his way through all the socialist/Marxist friends he made.

    What happens when you penalize success? The successful find ways to evade the penalty or they pick up and relocate. The Demorats believe then that the government must put in place ways to track us…or track us down in other countries..to get their pie. Do not put all your faith in the Republitards, they too have been part of the destruction of our economy and country. Our two party rule has sold us all a bill of goods and the price soon will be our right to choose how we live…period! Not a good prospect.

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  8. librabobComment by librabob
    September 20, 2012 @ 12:19 pm

    I would love to hear a debate between President Obama and Dr. Sowell regarding the Pros & Cons of wealth redistribution in America. Now that would be interesting!

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  9. oldwestmanComment by oldwestman
    September 20, 2012 @ 12:27 pm

    Remember a government that is powerfull enough to give you all you want is powerfull enough to take all you have

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  10. wizardgComment by wizardg
    September 20, 2012 @ 12:34 pm

    As strange as it seems. Nothing is as it seems! Obama is not the “good” person he is portrayed as, and his political blather is filled with lies for the gullible. The “elite” placed him in this “surrogate” position for their benefit! The general population is unaware of just what is really going on in “American politics”, and how the game is played on everyone rich or poor, educated or dumb. The truth of the matter is that it doesn’t matter who is sitting in the white house, because that person is not the holder of true power in this country, and because of this fact, there will be no wealth redistribution to the poor! There will only be wealth distribution to the ‘wealthy powermongers’ as you have already witnessed! So, no need to worry if you’re wealthy, but beware if you’re struggling, poor, or just plain unlucky, because life will only get worse for you!

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  11. middlegroundComment by middleground
    September 20, 2012 @ 1:09 pm

    Academic theories are just that, theories and we have squandered about 6 trillion dollars in the last 4 years proving that what some call Keynesian Economics and others call Marxist Socialism doesn’t work. However, what we;ve been doing has no relation to any economic theory. It is simply corruption on a grand scale where you punish your non-supporters and reward your supporters and we Americans were dumb enough to put people in charge of the nation’s financial well being who were going to squander money on unproductive activities to buy votes. It has been “Ward-Boss” politics on a massive scale.

    We spent money to bail out promises made by private industry to monopolistic unions rather than finding the most efficient way to build our roads and bridges, modernize our factories and increase our industrial production. So now 6 trillion dollars later we have nothing to show for our efforts, but debt and debt doesn’t buy you anything.

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  12. centslessComment by centsless
    September 20, 2012 @ 6:29 pm

    Dr. Sowell makes his point so well someone with half a brain can understand. Trouble is too many people don’t qualify.

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    • MustLiveFreeComment by MustLiveFree
      September 21, 2012 @ 11:37 am

      So true. The 47 percent cannot even pronounce, let alone understand, most of the words in Dr. Sowell’s column.

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  13. freedomfighterComment by freedomfighter
    September 20, 2012 @ 9:14 pm

    Although I am a strong opponent of out sourcing, I can see the advantages to doing so for many Businesses, considering that our Taker-N-Chief wants to take from them, and give to the ones who are lifers on the doll system, and should not be there, except with rare exceptions.
    As he begins to punish the wealthy, and Businesses which furnish goods to America and abroad, he also looses all the loyalty of these factions, who get tired of giving considerably more than their share.
    Be honest with yourself, and answer this. If you were to hit the lottery for say 10 Million dollars, and feel great that now you can have a better life, and even be able to help many needy, Family, and Friends, how would you feel if when you went to collect your winnings, you found that you were only going to get $1,000,000?. You are infuriated, and ask what happened to the other 9 million dollars.
    Your answer is that the Government needed more money to give to the people who are supported by the them, so they took your money, which they say you did not deserve to have. Now you walk outside, and see NObama handing your winnings out to his Business friends/contributors, and multitudes of people who stand with their hands outstretched to receive YOUR MONEY. You strongly protest, but your Proxydent tells you that you do not have the right to have so much, while so many others are in need of Government subsidies, and just to go on home and live with it.
    This is exactly what is going on, and which will get worse as time goes by and the Government continues to cap what people are allowed to have, make, or retain of their labors, and or good fortune.
    You begin to think that maybe if you relocated to a different Country which would not strip you of your money, you would be considerably better off.

    This is why many Businesses, and the Wealthy are beginning to relocate not only themselves, but their Businesses to a place where they are not taken for a huge, glutinous, percentage of what they make. Maybe a Country which has the ability to understand that this Business which has been brought to their Country is a asset to them, as they will receive a fair share from that Company/Business, in a fair tax environment. Both the Business, and that Country are now happy with the new arrangement. More and more Businesses/Companies, see the advantages of their move, and decide that in their own best interest, they too need to make this change. It boils down to simple robbery by our Government, and many have, decided to make this strategy part of their own Business plans.

    If the tax system were slightly altered, and tax was removed on a simple percentage basis, everyone would be happy.
    If the IRS would run a straight 10% across the board, for all persons, Business, Corporations, ETC, all would be well.
    I would be totally happy to have them take only 10 percent of what I make. If all tax loopholes were closed, and they were to do away with any deductions, or allowances, and take 10% right off the top of the gross, the plan would work, and would work very well.
    All would be equal in the amount they have to pay in taxes, and the income from Businesses, Corporations, Millionaires, and Billionaires would amount to a staggering amount, which could be used to reduce and eventually pay off, our debt.
    Now, with the Government taking 10% of your winnings, your net lottery earnings would be 9 million, with the Government receiving only 1 million of your winnings. I believe this could even go as low as 8% and still work out well, although 10% would go a very long way towards reducing our debt, if used properly.

    TAKE OUT THE TRASH IN NOVEMBER

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  14. Pingback: The Fallacy of Redistribution « Taking Back America

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