Deregulation vs. Redistribution
How can we 'cure' poverty? That is the question addressed in this article by Thomas Sowell. He seizes on the sucess of the Chinese economy to allegedly lift "a million people a month out of poverty." The success of the Chinese economy he attributes to "wealth creation," which I interpret as the promotion of free (or less regulated) markets. The other alternative is "income redistribution," which is never defined in the article but is proudly attributed to "the left."
In the article, these two alternatives - wealth creation and income redistribution - are the only means to curing poverty. Furthermore, these two solutions are treated by Sowell as mutually exclusive. The primary purpose of the article, as I read it, is to create an argument. This is too bad. Sowell's point re: deregulation is a valid one, but is diminished by too much finger pointing. Excerpt:
In the article, these two alternatives - wealth creation and income redistribution - are the only means to curing poverty. Furthermore, these two solutions are treated by Sowell as mutually exclusive. The primary purpose of the article, as I read it, is to create an argument. This is too bad. Sowell's point re: deregulation is a valid one, but is diminished by too much finger pointing. Excerpt:
When it comes to lifting people out of poverty, redistribution of income and wealth has a much poorer and more spotty track record than the creation of wealth. In some places, such as Zimbabwe today, attempts at a redistribution of wealth have turned out to be a redistribution of poverty.Link
While the creation of wealth may be more effective for enabling millions of people to rise out of poverty, it provides no special role for the political left, no puffed up importance, no moral superiority, no power for them to wield over others. Redistribution is clearly better for the left.
Leftist emphasis on 'the poor' proceeds as if the poor were some separate group. But, in most Western countries, at least, millions of people who are 'poor' at one period of their lives are 'rich' at another period of their lives -- as these terms are conventionally defined.
How can that be? People tend to become more productive -- create more wealth -- over time, with more experience and an accumulation of skills and training.
That is reflected in incomes that are two or three times higher in later years than at the beginning of a career. But that too is of little or no interest to the political left.
posted by david burnstein at 10:03 AM
3 Comments:
Zimbabwe!! An authoritarian, terroriszing regime with a corrupt, meglomanical leadership is presented as THE example of redistribution?! Shit, why not Iraq under Saddam? Or Mao's China during the cultural revolution? Hitler may have redistributed the wealth of Jews he sent to Auschwitz -- certainly a lot of good Germans benefitted with new buisnesses, houses, apartments, cars, and whatever else the elite didn't have use for. Better yet, it would be a feat of economic magic well worth seeing if for sake of consisitency, i.e., low brow vilification of the left, he were to offer this as another insightful example of 'leftist' policies. Of course he won't, 'though given his logic it could serve his intellectually dishonest purpose as well as Zimbabwe.
What would his conclusioen have been if he'd chosen the New Deal or the post-WWII labor governments in UK?
Dave,
Why can't my comments say "Euge"?
I don't know the answer to you final question, but wrt the definition of redistribution, I don't think your gripe matters one way or the other. That is, I think Sowell is interpreting "redistribution" in its sincere form, eg, a scheme that takes from rich and gives to poor, but your different definition does not change Sowell's conclusion. Regulations that interfere with the market, be they to take from rich and give to poor or visa versa, impede economic growth and hence do less to alleviate poverty than reforms that reduce regulations.
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