You cannot redistribute wealth without removing the incentive for generating wealth.

I was listening to the radio on the way to work today and I heard this line.  It struck a chord with me.  I’ve always known that this is the case, but I’ve never seen it put so succinctly.  Why is it that so many conservatives are opposed to the redistribution of wealth?  Is it because, as liberals often tote, conservatives are selfish and don’t care about others.  There is probably some truth to this, but I’d argue that the person who is selfishly clinging to what he has is no greedier than the person who is selfishly asking for something that belongs to someone else.  However, I believe that a bigger part is that conservatives and liberals believe in two different kinds of justice and fairness.

 

Let me explain.  When a liberal sees a difference in wealth between two people, they immediately assume that both people are victims of their circumstance and could do nothing to change it.  A rich person was born to wealth, power, and influence and nothing that they (or anyone else) could do can change that.  On the other hand, a poor person is born to those circumstances that will keep them poor and there is nothing that they (or anyone else) can do to change it.  So it makes sense to them to attempt to fix this situation by taking the wealth from the first who, like a cow that keeps producing milk from nothing, will keep producing more wealth from nothing and his situation will not be changed.  Then give that wealth to the poor man – and they conveniently gloss over the fact that in this model the poor person will continue to remain poor and so nothing has changed.  But if you ignore the axiom you set up, this model works.

 

Or you could change the axioms, and claim that if the poor person just got a small jump start, a small infusion of money and opportunity, they could use that to forever better their circumstances and raise up out of their condition – glossing over the fact that if they now believe that a person’s circumstances can change that now they have to address that the rich person’s circumstance can also change and he is no longer the infinitely producing cow and can eventually run out of money.

 

Either belief when fully adhered to (that circumstances are unchangeable or that they are mutable) leads to unfairness.  In the first case, it doesn’t matter because they cannot change anything and you are just stealing for no purpose.  In the second because you are arbitrarily choosing who is rich and who is poor, which is also unfair.  The only way to reconcile this is to believe a hypocrisy – that one person’s circumstance is immutable while the other’s is malleable.

 

But more importantly, is the fundamental difference in belief about accountability.  While liberals seem to believe that people are victims of the choices of someone else (parents, God, society, fate, whatever), conservatives believe in the principles that gave this country the nick-name “Land of Opportunity”.  The idea that we are all responsible for our own success and failure and that the only fair laws are those that allow people to reap the consequences of their actions (not the actions of others).  To the industrious, the thrifty, the hard working, and the risk takers there should be a reward equal to the amount of effort and risk incurred in the endeavor.

 

Every action in nature has an equal and opposite reaction in nature and should in society as well.  A person who works 20 hours a week should make half as much as a person doing the same work for 40 hours a week.  Conservatives look at that situation and say “If Person A works twice as much, then Person A should have twice as much money.  They put in dis-proportionate effort and received reward equal to that effort.  This is fair.”  Liberals look at that situation and say “Person A has twice as much money, so money should be removed from Person A and give to Person B so they have the same.  This is fair.”

 

I don’t believe that either side is correct 100% of the time.  Life is complicated.  Perhaps in the above situation maybe the truth is closer to the liberal point of view – the reason Person B can’t work 40 hours a week is due to having a child that needs care, or having a physical or mental illness that prevents them from working long hours, or some other circumstance beyond Person B’s control is preventing them from doing what they would like to do in regards to work.  Or perhaps in the above situation maybe the truth is closer to the conservative point of view – that Person B has learned that if he works less, that social safety-net programs will give him money for food, housing, etc without him having to put forth effort and this is appealing.  There is very rarely enough information to fully understand either situation without fully understanding a person’s full life and circumstance, something difficult for a nationwide organization to do.  But let’s play out each situation and see where it gets us.

 

Person B has some disability, beyond their control, that prevents them from working as much as they would like.  The liberal point of view is to take from one who can provide for themselves and give to one who cannot.  To help illustrate the point, I’ll assign some arbitrary values.  Person B is capable of putting forth 50 WorkUnits of work each day, and does so.  Person A is capable of putting forth 100 WorkUnits of work each day and does so.  They each get paid 1 MoneyUnits for each WorkUnit they perform, so Person A gets 50 MoneyUnits each day and Person B gets 100 MoneyUnits.  Living requires 75 MoneyUnits each day.

 

The liberals look at this situation and say “Well, that’s easy to solve.  Take 15 MoneyUnits from Pesron A and give it to Person B each day and everyone wins.”  However, what does this do in the long term?  Person B starts to get a distorted view of reality.  He begins to believe that his 50 WorkUnits of work is actually worth 75 MoneyUnits.  Consequently 25 WorkUnits would then be worth 50 MoneyUnits and 0 WorkUnits would then be worth 25 MoneyUnits.  In his mind now, he is entitled to some amount of MoneyUnits for doing nothing at all.  And the same should work in reverse.  If he suddenly found a higher paying job that would pay him double his current salary the reality would be he should be making 100 MoneyUnits for his 50 WorkUnits.  However, due to his distorted reality, he believes his WorkUnits are more valuable so his 50 WorkUnits should actually be paying him 150 MoneyUnits (double his original 75) and believes that his raise is not fair.  This “unfairness” gets even worse when the liberal ideology kicks in and he needs to now start paying for some other unfortunate circumstance.  Instead of his 50 WorkUnits giving him the 150 MoneyUnits he believes he deserves, they are actually only paying him 75 MoneyUnits (the 100 that he is earning minus the 25 to help someone else).  So in actuality, the raise that “doubles” this man’s salary does not result in any change in take home pay.  What incentive does this man have to better his situation, to expand his skill-set, to even ask for a raise.  In reality, all it would mean is more work, more effort, more responsibility for the same pay he is getting now.

 

Let’s also look at this from Person A’s perspective.  He is currently getting paid 75 MoneyUnits for 100 WorkUnits.  In his head, his work is worth LESS than it actually is.  He starts to get tired and unfulfilled in his job.  From putting forth a dis-proportionate amount of work to his reward.  He looks for a way out.  Perhaps he could improve his skillset, earn a raise, put forth more effort and work.  But that answer doesn’t feel right.  If he puts forth 150 WorkUnits, he’ll still only get paid 125 MoneyUnits.  If he puts forth 200 WorkUnits, he’ll still only get paid 125 MoneyUnits (progressive tax code).  So if he cannot solve his problem by doing more or better WorkUnits, maybe the solution is to do less WorkUnits until it matches his MoneyUnits.  If he gets paid 75 MoneyUnits why should he put forth more than 75 WorkUnits.  Especially when he sees his co-worker, Person B, getting paid 75 MoneyUnits for only 50 WorkUnits.  Suddenly the solution seems clear.  Why work 100 WorkUnits and get underpaid 75 MoneyUnits when you could work 50 WorkUnits and get overpaid 75 MoneyUnits.  The only way to get a better work to money ratio, is to work less.  He cuts his hours in half.

 

But now there is a problem.  Neither Person A nor Person B are working more than 50 WorkUnits, but both are expecting 75 MoneyUnits for their labor.  Who now makes up the extra 50 MoneyUnits to pay both these men?  Person C?  They are in now a worse position that Person A was.  The business?  The business is now expected to pay more MoneyUnits to it employees with less WorkUnits to make that money with.  The company either goes out of business or fires the employees that are taking more MoneyUnits than they are producing WorkUnits.  Both Person A and Person B are out of a job.  Or Person B gets let go (due to his inability to produce profitable WorkUnits for the company) and Person A is asked to resume his full time work, at full time pay since he no longer has to give some money to Person B from each paycheck.  Either way, Person B, the one liberals are always trying to save, loses his job.

 

In the liberal world, no one is incentivized to work, earn, and better themselves.  It’s impossible to redistribute wealth and still leave any incentive to earn wealth.

 

So let’s examine the same situation from a conservative, or free market standpoint.  Again Person A works 100 WorkUnits and gets paid 100 MoneyUnits, Person B works 50 WorkUnits and gets paid 50 MoneyUnits.  For a while it’s difficult for Person B to make ends meet together because it requires 75 MoneyUnits to live.  However, he works hard, improves his skillset and (same as in the example above) finds a job that doubles his current salary.  He is now making 100 MoneyUnits for his 50 WorkUnits and everything is fine.  Person A also wants to make more money and decides to increase his hours worked from 100 to 150 WorkUnits (same as in the example above).  As such, his pay increases to 150 MoneyUnits.  He now has the reward he was expecting for his increased workload.  Everything is fine.

 

In a free market world, everyone is constantly incentivized to work better, earn better, and improve themselves.

 

TLDR: If you reward people for doing less, people will do less.  If you reward people for doing more, people will do more.  You cannot punish people for doing more and expect any kind of improvement.  If you remove the incentive for doing well, people will stop doing well.

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