You can resent and vilify the opulence of the Oligarchs all you want – but public policy decisions should not target the elite wealthy. Attacking them is impractical and wrong. Economists that believe the middle class is declining because the rich are getting richer are cramming together politics and economics, as practiced in1700s European mercantilism (which caused a lot of wars back then). It’s the ‘us versus them’, zero sum view of wealth. The only way we gain is to take from them. In reality, free markets are positive sum. People become wealthy in return for economically benefiting others.
It’s putting politics first to believe that economics is a zero sum game, where wealth benefits some at the expense of others. The more you mix politics into your political economy, the more belligerently coercive it becomes. Wealth redistribution is a coercive transfer of money from some people to others – and it has enormous unintended negative consequences. Those with significant assets will not just sit still and let government confiscate their wealth.
Not only is wealth redistribution impractical, it’s also immoral. Those strongly advocating for pure wealth distribution have a lowbrow morality. They smugly feel they’re on the moral high ground because they’re trying to help the poor and middle class – that’s an intellectually vapid world view. Taking money from one person just to give it to someone else is robbery. Robbing Peter to pay Paul is wrong. Stealing from someone who has earned a lot of money and then giving it to the poor, doesn’t make a robber a moral person; it makes him a thief! Asking government to rob Peter on Paul’s behalf doesn’t magically make the situation moral.
This is the final in our Plutocrats and Oligarchs blog series. A practical mindset for the moderately wealthy: 1) Plutocracy is the reality – accept it; 2) It’s not wrong to oppose an egalitarian ideal –Left wing ideological propaganda be damned; and 3) It is misguided and wrong to pursue blatant wealth re-distribution (not only because it makes things worse but also because it’s immoral).
Stiglitz and Krugman would disagree. How can Nobel Prize winning economists be so wrong? The answer is that they are not in the real economic world – we are. And it’s your hard earned money that’s at stake – not theirs. View wealth in America the way it is, not the way some economists think it should be. Your Estate Planning War Chest has no room in it for big statist, wealth redistribution thinking. Keep those thoughts elsewhere, but only after you’ve accumulated enough wealth to secure your family’s well-being.