(I’ve never understood this line of reasoning. But again, a lot of people here take that argument seriously, which probably means I’m making some mistake here. I had never been able to get what it could be, so if someone can explain where is the issue with my reasoning, I’ll be glad.)
tl;dr We should taboo “money redistribution” and instead only talk about “consumption redistribution” and “power redistribution”, which are two almost-separate things. I argue that in light of none of them, it’s a good idea to take billionares’ wealth.
Ok, so, what matters is consumption. A billionare does not buy a million cars, or sausages for BBQ, and generally there’s not much difference in consumption between Warren Buffett and “just” very rich Beyoncé. [citation needed]. Redistribution of wealth, even if it was very liquid, does not cause additional economic output to appear. It might happen in a short term, when everyone is getting this $10,000 and spending it, boosting the economy, but it’s the same effect as increasing money supply by a central bank. In the long term, any effect that can be caused by such intervention (of wealth transfer) can also be caused by Fed policy. The only way we could really make a change would be to set an extremely high tax on consumption. And most of the consumption that we would redistribute is done by the middle class.
If the billionares money does not go to consuption, where does it go? It’s invested. So maybe the reason to redistribute is not to generate output, but to limit the power of the rich. But the free market is specifically set up in this way to transfer the power to manage money from the incompetent to competent—and that would be exactly reversing this trend! If Joe The Plumber gets a voting share in some company, he will most probably make worse decisions than Warren Buffett. Personal freedom is of course dependent on economic freedom, but it’s a far-reaching link—if Joe controlled a voting share in the company he personally works, he could make a decision to switch from plumbing to gardening, or laying and watching TV, which would free him from the power Warren Buffett currently has over him, forcing him to do plumbing instead, but this is not because Warren is—it is because it’s an optimal market decision, and he, coincidentally, is just an executor of this will (again, because the market granted him this power through Darwinian process of wealth redistribution to people most competent in generating/holding into it).
(I’ve never understood this line of reasoning. But again, a lot of people here take that argument seriously, which probably means I’m making some mistake here. I had never been able to get what it could be, so if someone can explain where is the issue with my reasoning, I’ll be glad.)
tl;dr We should taboo “money redistribution” and instead only talk about “consumption redistribution” and “power redistribution”, which are two almost-separate things. I argue that in light of none of them, it’s a good idea to take billionares’ wealth.
Ok, so, what matters is consumption. A billionare does not buy a million cars, or sausages for BBQ, and generally there’s not much difference in consumption between Warren Buffett and “just” very rich Beyoncé. [citation needed]. Redistribution of wealth, even if it was very liquid, does not cause additional economic output to appear. It might happen in a short term, when everyone is getting this $10,000 and spending it, boosting the economy, but it’s the same effect as increasing money supply by a central bank. In the long term, any effect that can be caused by such intervention (of wealth transfer) can also be caused by Fed policy. The only way we could really make a change would be to set an extremely high tax on consumption. And most of the consumption that we would redistribute is done by the middle class.
If the billionares money does not go to consuption, where does it go? It’s invested. So maybe the reason to redistribute is not to generate output, but to limit the power of the rich. But the free market is specifically set up in this way to transfer the power to manage money from the incompetent to competent—and that would be exactly reversing this trend! If Joe The Plumber gets a voting share in some company, he will most probably make worse decisions than Warren Buffett. Personal freedom is of course dependent on economic freedom, but it’s a far-reaching link—if Joe controlled a voting share in the company he personally works, he could make a decision to switch from plumbing to gardening, or laying and watching TV, which would free him from the power Warren Buffett currently has over him, forcing him to do plumbing instead, but this is not because Warren is—it is because it’s an optimal market decision, and he, coincidentally, is just an executor of this will (again, because the market granted him this power through Darwinian process of wealth redistribution to people most competent in generating/holding into it).