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The Fallacy of Redistribution

Comment

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



Comments

41 Comments | Post Comment
Excellent point of view. Thanks very much.
Comment: #1
Posted by: Robert Odell
Thu Sep 20, 2012 6:11 PM
I don't know why a President of the United States of America is talking about redistribution in 2012.... Who would believe it....?
Comment: #2
Posted by: Priscilla Williams
Thu Sep 20, 2012 6:13 PM
I really enjoy all of your articles. They are so right on. Wish everyone could read your articles. Look forward to all your writings. Thanks for telling it like it really is.

Dr. Larry Shaver
Comment: #3
Posted by: Larry Shaver
Thu Sep 20, 2012 6:17 PM
"For here we are not afraid to follow the truth wherever it may lead" (Thomas Jefferson) and the truth will set you free!
Amen, Amen I say to you. Thank you for truthfulness and integrity.
Comment: #4
Posted by: M Wheel
Thu Sep 20, 2012 6:17 PM
If only most Americans would read and heed this warning. We are on the brink of disaster and people will only continue to ask for more that is free. Again Romney is right when he says he might be defeated by the close to majority of those on the public dole. I feel it's not Obama but the Congress as a whole. All they seem to think is important is more time off, a good haircut., higher wages, a better pension, and a better health plan. The rest of us must put up with these prima-donas. They are rotten to the core and WE elected them. Alas and alack!!
Comment: #5
Posted by: c cornelssen
Thu Sep 20, 2012 6:19 PM
great point of view i hope mitt reads it and uses it
Comment: #6
Posted by: michael caniglia
Thu Sep 20, 2012 6:22 PM
Excellent article. I've enjoyed listening top you a number of TV shows.

Posted by Norm Vlcek
Thu Sept 20. 2012 8:29pm
Comment: #7
Posted by: Norman Vlcek
Thu Sep 20, 2012 6:31 PM
I really believe that 4 more years for Obama will take us into socialism forever
Comment: #8
Posted by: andrew lee
Thu Sep 20, 2012 7:00 PM
very well said
Comment: #9
Posted by: JOANIE LARSON
Thu Sep 20, 2012 7:08 PM
Most people don't know communism like I do . In fact the communists killed my grandfather. In the 1940's my grandparents were the so-called bourgeoisie in Vietnam. In 1945 Japan occupied Vietnam, forced the North Vietnamese to grow jutes, a type of textile instead of rice. It was a nasty year of drought. Two millions North Vietnamese died. My dad's parents were landowner and owned thousands acres of prime farm land, and had rice in their barn, so they fed ten's thousands of people for two years. When the commies took over, my dad fled North VN and went to South VN. My grandparents disowned him. You see while my dad was in high school he had a taste of communism, because he was incarcerated by them for 6 months and endured daily torture by them. My grandparents thought that governments came and went and they could bribe any of them. Big mistake. Along came the Cultural Revolution in 1954. They were put in a kangaroo court. My grandfather was tried in absentia and convicted. He went into hiding and died of starvation. The commies broke my grandma's arm banned her into a mud hut and forbid her to have a fire for 3 years. They did not give a damn on how she was to live. But the people whom she fed, turned around threw food over the fence and fed her for 3 years.
So the 1st thing the commies did was to divide up my grandparents' prime farming land. Every peasant got a nice parcel. Previously my grandparents rented them out and based on trust asked for 15 to 20% of their harvest. Now the peasants were so excited as they're now the owner of their land. At the end of the season, the commie official came by and asked these peasants about their harvest. 1956 was a great year, the harvest was great. And everyone was expecting the same deal from their socialist government, meaning to keep 80% of their harvest. NOT. What do you mean? Well, straight out of Marx's handbook: We'll give you according to your need. You only got 5 mouths to feed. You don't really need the other 100 bushels of rice. We'll keep them for you. Here are 4 bushels and have a good day! After couple of seasons like that, pretty soon, no one was working. Why should they work to feed the other guy? After 3 years, the whole country was poorer than they'd ever been.
That is my family's history with socialism and communism . Don't forget it as you go to vote in November. The POTUS clearly stated that he believes in wealth distribution.
Comment: #10
Posted by: Duc Vu
Thu Sep 20, 2012 7:09 PM
Many Americans were so enamored with Obama's charismatic vision of "hope and change" in 2008 that they gave him the benefit of doubt concerning the vile claims made by his opponent in regards to his Socialist Agenda implanted during his formative years by his mentors and teachers. Even when he made statements about his belief in redistribution and other Socialist ideas they had none of his history to examine for confirmation one way or the other. They chose to believe that this incredible personality thought like they did. Now that he has a four year record illustrating his agenda, those that hold our Founding Principles dear should have all doubt removed as they re-view this tape that beforehand they believed held no credibility. It's just really sad and could be so damaging to America that many good Americans may still give him their blind allegiance because they find it so hard to admit their mistake even to themselves. But then again, Obama refuses to take any personal responsibility for any of his actions, so why should they.
Comment: #11
Posted by: Steve Bigelow
Thu Sep 20, 2012 7:18 PM
I always read and learn from your knowledgeable writing, Dr. Sowell. I read your article about small private colleges in the mid-1990's and followed up on one of your recommendations, College of the Southwest, in Hobbs, NM. All three of my children worked hard for their classic education at that College. All are educated, not indoctrinated, and at a reasonable cost. I never had a chance to thank you until now.
Comment: #12
Posted by: Pres Lee Presley
Thu Sep 20, 2012 8:28 PM
Thank you for sharing your insight and convictions about governmental attempts at redistributing wealth. It was hard for me to believe that the citizens of my America had been so mesmerized by the words of Barack Obama that they seemed to become utterly blind to his actions. He is able to say exactly what people want to hear and hypnotize people to the point that they are paying no attention to the results of what he has done or is currently doing. And now we, the people,seem to be to the point that even when he espouses "redistribution" as his driving principle, we cannot see the socialistic forest for the altruistic trees of Comte. I sometimes feel that I can easily identify with the Germans who stood aghast as their fellow Germans handed the reins of power to Hitler. I am convinced that those who don't know or understand history are doomed to repeat it. Hopefully voices like yours and others will rise loud enough to be heard and understood by those who have ears to hear. As a Christian, I certainly believe in helping those in need for as long as they are not ABLE to help themselves. But the logic behind taking the hard-earned income of those who, for whatever reason, are motivated to work 80 hours a week and risk that fortune year after year by being in a business that may or may NOT succeed , and then the government taking that fruit, for which those individuals risked and toiled, and then "redistributing" it "fairly" to others who in many cases have CHOSEN to NOT work as hard or risk as much for whatever reason, perhaps because they simply aren't that motivated to accumulate wealth; that logic escapes me. If Obama would take his hand off the throat of American business, American wealth would naturally redistribute itself and the middle class would reemerge on it's own. The best thing Obama can do for America is play MORE golf. At least he is out of the way of business while he has a golf club in his hand. FORE!
Comment: #13
Posted by: Frank Tuckwiller
Thu Sep 20, 2012 9:07 PM
Finally someone with courage to write a great and truthful column. Thank you. Reading your column in the New York Post was a breathe of fresh air. Millions of people have come to our shores because of "communism". Maybe they haven't taught enough about the government taking over lives in school, so this generation is not aware of it. We brought our relatives here from Poland in 1971. They love it in America and know what life was under communism. They left their young children and husbands behind to find freedom here. They had to give their food to the Russians. Hide an extra pig if they knew there was a wedding or holiday. This is not what we want for the next generation. Thank you and God bless you and God bless America, I can still say that but communism forbids religion and God. We better watch out. Young people should watch the movie Dr. Zhivago, remember when he comes home from the war and 30 people are living in his home.Helen Ras, Elmont, NY
Comment: #14
Posted by: Helen Ras
Thu Sep 20, 2012 9:11 PM
I was watching O'Reily tonight and he suggested I read your column, and I am glad I did. Obama is the worst thing to happen to this country in my lifetime. I am praying that Rommney takes the gloves off and tells everyone that not only is he the best choice, he can prove it. I pray that Obama does not get reelected. It has been said that those that dismiss Isreal or throw Isreal under the beus will have to answer to god.
Comment: #15
Posted by: Arnold Goldstein
Thu Sep 20, 2012 9:41 PM
So many good things have already been said. Thank you, BILL O'REILLY for giving us the info to read this article when you aired from THE FACTOR tonight.
I saw through Obama during his run in 2008. Oh yes, he is a master at public speaking and getting the crowd going. He says just what everyone wants to hear...back then. Since he's been in office, because of his likability, he has so many people that are dependent on HIM. They don't think of it as the government, they think of it as HIM. They relate to him because they think he relates to them. Michelle being friendly on Twitter. Both of them going on talk shows together and individually. I must give it to them....they know what they are doing and how to do it. The American people do not really like Gov. Romney. His wife was a 'stay at home' mom, which women do not relate to today because women are not about that anymore. We are 'liberated' now. To them it's going backwards. Why can't American people look at this for what it is? We put a likable president in, and look where we are and where we are going, because make no mistake, we are going SOCIALISTIC, and see there is someone out there ready and capable of bringing our economy back and bringing our status back to the world where we should be. The extremists may still not like us, but we will earn respect again. Mixed msgs now from THE WHITE HOUSE. Is that anything new?
Redistribution....yes, the beginning of COMMUNISM! Pres. Obama is leading us right there and folks are so brainswashed and feel so beholdent to him that we are likely to get there!
A Sparks
Comment: #16
Posted by: Alice Sparks
Thu Sep 20, 2012 9:46 PM
From your article and Duc Vu's comment, I have a dreadful feeling that I have not felt since I read "We The Living" more than two decades ago. I hope that we can learn from our mistakes, but I fear we will not. We had Wilson, but still elected FDR. We had FDR, but still elected Carter. And we had Carter, but still elected Obama. Each Generation learns to elect itself money from the public trough--filled by our successful neighbors' tax payments. This time we come close to Weimar Republic political and central bank policies that could well destroy US, if we have not gone too far already.
Please spread the word and get your families registered and out to vote. If you already do this, then get yourself a poll watcher's badge, and help fight voting fraud in your county. We must remain vigilant, or liberty will be lost.
Comment: #17
Posted by: Mark Sander
Thu Sep 20, 2012 9:55 PM
Always enjoy Mr. Sowell's comments.
Truly baffling to me that so many Americans are in such a fog. Hopefully the fog will disperse.
Thank you O'reilly for the tip.
Comment: #18
Posted by: clif franklin
Fri Sep 21, 2012 2:22 AM
Always enjoy Mr. Sowell's comments.
Truly baffling to me that so many Americans are in such a fog. Hopefully the fog will disperse.
Thank you O'reilly for the tip.
Comment: #19
Posted by: clif franklin
Fri Sep 21, 2012 2:24 AM
I enjoyed reading these accounts of what socialism has done in the past to ruin some nations... it reenforces what I have noticed about many liberals and intellects over the years they profess to know it all and have the answers to everything but they fail to recognize danger until it smacks them in the face! The one biggest thing hurting our country for years is the lack of accountability.. and integrity in big business and politics...
Comment: #20
Posted by: Joe Belardi
Fri Sep 21, 2012 2:38 AM
I don't think you listened to the entire tape. Mr Obama went on to talk about the importance of the free market. Don't be led astray by politics.
Comment: #21
Posted by: perry smith
Fri Sep 21, 2012 5:06 AM
Re: Priscilla Williams

It was said in 1998. However, you ned to listen to the who tape and not just snippets.
Comment: #22
Posted by: perry smith
Fri Sep 21, 2012 5:08 AM
Always enjoy Dr. Sowell's articles. He is one of the very best.
Comment: #23
Posted by: roy scott
Fri Sep 21, 2012 5:20 AM
Yes, BHO needs the free market to survive, but only under his rules...........then. He can redistribute the spoils of few to the mouths of many. That is his doctrine.
Comment: #24
Posted by: Byrdbuster
Fri Sep 21, 2012 6:21 AM
Re: perry smith
No need to listen to the entire tape. Words about the free market in this case are masks for the real message, 'I believe in redistribution'. THAT IS the message . Part of Obama's 'mastery' of the spoken word (via teleprompter) is to have the listener believe there is merit in other forms, like the free market. But make no mistake (and Obama will not - unless off teleprompter).... THE MESSAGE IS REDISTRIBUTION.
Comment: #25
Posted by: David Wojtowicz
Fri Sep 21, 2012 6:33 AM
Even people who don't want to be bothered to think can surely grasp the basic premise of socialism and communism which is that you have no right to a life of your own. You exist to serve someone else or the State. Take Obama's comment, "you didn't build that" a step further. If you didn't build it, then you don't really own it. And if you don't own it then it's easy for the government to take it away from you. Since all rights stem from property rights we're back to the premise that you have no right to a life of your own.
Comment: #26
Posted by: Sherrilynn Finley
Fri Sep 21, 2012 8:38 AM
The blind Irony....Obamas base and followers who voted the first "African American" into office felt they were liberated in 2008. And now they will find out that they're freedoms are slowly being stripped away and now they are enslaved to the Government rule.
Comment: #27
Posted by: Fightforfreedom
Fri Sep 21, 2012 10:00 AM
Dear Dr. Sowell,
Thanks to Bill O'Reilly for recommending you to us. Your thoughts are so right on, as others have already commented. We will keep praying that Mitt will assimilate your overall message and get it through to the American public. We think that only prayer will make this happen...so everybody, let's lift our prayers to God to save our country! God bless you all!
Dick Coupe, Show Low, AZ
Comment: #28
Posted by: Dick Coupe
Fri Sep 21, 2012 10:09 AM
Dr. Sowell, I am so glad I discovered how to get to your article on redistribution; see I am not that well versed on computer technlogy. As you so well explained, I understand all the ramifications and problems that redistribution would create (it has been proven). But what makes me wonder most, is why poeple who are so intelligent cannot learned from history. Many of them have gone to some of the most prestigious schools in the Nation. Unbelievable! Also, why don't simple people like me, a retired Air Force sergeant, take the initiative to investigate, research, and go out and check out the ideas they hear from different politicians rather than take them at face value. I do like Pres. Obama, but simply speaking, in my sergeantly opinion, he was never, ever, qualified to be the president of this great Nation. Someone quoted a previous president as saying, "President Obama is an amateour." Perhaps amateour is too harsh a title, I don't know, but my feelings are that our Republic deserves better.
Comment: #29
Posted by: R G VEGA
Fri Sep 21, 2012 12:12 PM
I also want to thank Bill O'Reilly for alerting people to this great article by Dr. Sowell. I knew it would be an intelligent, thoughtful, honest article. It is so well written that even Obama supporters should be able to understand what it's all about. Let's pray that the people who voted for Obama in 2008 have gotten over the trivial reasons for wanting him as a president. Our only hope for this beautiful country of America is to elect Mitt Romney this November!
Comment: #30
Posted by: C. Bourdeau
Fri Sep 21, 2012 4:29 PM
I ONLY HOPE DR. SOWELLS ARTICAL IS READ BY ALL WHO THINK MR. OBAMA WILL SAVE OUR COUNTRY'
Comment: #31
Posted by: anthony oddo
Fri Sep 21, 2012 5:52 PM
Bill O'Reilly suggested that your article on "Redistribution" be read by all. Excellent article. After reading your article, I thought about the Winston Churchill quote which was posted on Rush Limbaugh.com on 9-20-12. Mr. Churchill stated
"Socialism is a philosophy of failure, the creed of ignorance , and the gospel of envy, it's inherent virtue is the equal
sharing of misery.". That's it in a nutshell. Liberalism is spreading misery, EQUALLY!
Comment: #32
Posted by: Tanis wolf
Fri Sep 21, 2012 8:22 PM
Great to see so many new names commenting. Thanks to Mr. O'Reilly. For me, just one more of hundreds of fine pieces I've read by Dr. Sowell. Hoping this valuable resource of wisdom gains ever more audience. An aside... if you haven't yet seen '2016 Obama's America' do yourself a favor and go now.
Comment: #33
Posted by: LF
Fri Sep 21, 2012 11:14 PM
I rarely see the discussion of economic control in regards to cost of living. To simplify: Those with means hold an advantage in the sense that they can and usually do recover from their increase in taxes by increasing prices, not only to recover cost but a profit added to it. Those not affected by increased taxes usually find increased costs and by and large actually pay for all add ons. I hope I've simplified this enough for all to understand, if you cheer for the idiotic "fair share" mantra it will end up being you paying the "fair share".
Comment: #34
Posted by: Joseph Catanzarite
Sat Sep 22, 2012 7:58 PM
Dear Dr. Sowell
I have enjoyed your writings and the simple approach to the very complex issues of economics for the past 30 yrs.
It has been as entertaining as it is insightful and informative. As well as a quick easy read.
Comment: #35
Posted by: Joseph Catanzarite
Sat Sep 22, 2012 8:32 PM
Was reading Passionate Sage by Joseph Ellis tonight where he tries to describe John Adams political philosophy. Adams was most certainly not for democracy and thought all attempts to prevent an aristocracy foolish because it was inevitable. Statement like these often caused Adams to run afoul of many in his day who labeled elitist and pro monarchy. He most certainly believed in evolutionary change not revolutionary and was old school Conservative in that sense. He was also very classical in a day when modern philosophy had taken root in America with Jeffersonian Democracy and the belief in unlimited human potential. But he most definitely did not trust banks and believed it a major mistake to deny the Aristocracy that had grown up in America because it would be replaced by finance Aristocrats who would manipulate the system toward their ends. Very prophetic indeed and the excesses of Jeffersonian Democracy have allowed this to happen. Wealth that is gained through manipulating interest rates is not wealth earned. That is the great redistribution going on and it has been that way since 1913.
Comment: #36
Posted by: Joe Winpisinger
Sat Sep 22, 2012 11:17 PM
Mentioning President Obama in the same paragraphs as Hitler, Stalin, and finally Castro, is a ridiculous stretch of your overly predisposed imagination. Redistribution has been practiced in the USA since 1913 when the Revenue Act was adopted. ( Our tax system.) It isn't a confiscation from the wealthy, to be redistributed to the poor, it's a levy that is supposed to be imposed on the income of all Americans, in order to keep the Country's lights on, while enjoying some of the social responsibilities espoused by virtually every President in the past century.
What President Obama would like to do is to simply remove some cuts that were erroneously - in retrospect - voted in, as a ruse, to pay for a war that actually, didn't really get funded, thereby starting a massive growth in our Country's deficit, which has only recently - finally - been put in check, thanks to President Obama's policies, in the face of incredible opposition from the obstructionists of the Republican Party, in our Congress. For the rich, it is quite simply a return to tax rates imposed during President Clinton's incredibly successful administration.
It might be prudent for you to study, then write an article projecting the potential implementation of Mr. Ryan's budget, because every opinion I've seen, from people who seem just as bright as yourself, seem to suggest that IT would indeed be a disaster.
Comment: #37
Posted by: Bob Phillips
Sun Sep 23, 2012 4:08 AM
Mr. Sowell,

Thanks for your insight and the true. I wish I knew if the folks in government that supposedly want to help people truly have that in their hearts and don't realize that the policies that they are enacting are actually enslaving and doing a disservice to the same people that think they are helping. Or is it really their intent to keep people dependant on the government to allow them to stay in power and enjoy their control and benefits they enjoy, but the vast majority of americans do not.
Comment: #38
Posted by: Bill Fredericks
Sun Sep 23, 2012 8:47 AM
Re: Joe Winpisinger & Bob Phillips,
Great to read your comments, well said. Too bad the other posters, like Sowell, can't own up to the truth.
The other comments posted confirm everything I've read about those who watch FOX.
I wonder if they know that Rupert Murdoch, the owner of FOX, does not agree with O'Reilly or Hannity or any of the FOX stooges. That he finds it amusing that so many actually believe the lies and spin coming from his broadcasting staff.
Do they know Murdoch agrees with Global Warming, while his spin staff are paid to deny global warning in order to allow big oil and big polluters to continue to pollute our air, water, and food?
Probably not. And Sowell wouldn't be the one to tell anyone the truth. I and others have caught him out in lies every single column. But then, who's counting? Sowell and Williams are two of the biggest, blackest stooges of the Republican party. I guess they know on which side their white bread is buttered.


Comment: #39
Posted by: morgan
Sun Sep 23, 2012 12:50 PM
I agree with everything that you say. Problem is that the republicans redistribute wealth too - but in the reverse direction. For instance, quantitative easing transfers the debts of the wealthy to the tax payer. So their wealth redistribution if from the non-rich to the rich.
Comment: #40
Posted by: Steven in Dallas
Mon Sep 24, 2012 8:48 AM
Only trust the words when they support the actions. Obama's actions are clearly anti-free market. Please tell me you can see that.
Comment: #41
Posted by: Tom McGuire
Mon Sep 24, 2012 9:49 AM
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