The statists are making a big issue out of income inequality, hoping to convince ordinary Americans that redistribution is their only hope for a better life.
I’ve explained with a pizza analogy that this is horribly misguided because it falsely assumes the economy is a fixed pie.
Simply stated, it doesn’t make sense – or help anybody – if inequality is reduced by policies that hurt everyone, but happen to hurt upper-income people more than lower-income people.
Moreover, redistribution tends to create a “poverty trap” as people get seduced by dependency.
That’s why I’ve argued that economic growth is the best way of helping the less fortunate.
But I have to admit that Margaret Thatcher does a much better job of eviscerating the left’s agenda on this issue.
While it’s inspiring to watch Thatcher in action, it’s also painful to realize that the current crop of GOP presidential candidates seems generally incapable of making similar arguments. Can you imagine, for instance, Mitt Romney making these remarks?
Last but not least, Thatcher’s remarks remind me about Churchill’s famous quote, which is very appropriate for this discussion.
The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.
And if you want real-world examples, look at this chart comparing North Korea and South Korea, or this chart comparing Chile, Argentina, and Venezuela. Now ask yourself a simple question: Which societies have generated more prosperity and higher living standards for ordinary people?
It’s interesting to see how much people liked her, even though they held opposite political and economic positions.
Or as Churchill put it: The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.
The problem is short term vs. long term effects. In the short term redistribution confers some (perhaps immoral) benefits to a significant number of voters. But sooner or later the relentless compounding of resulting slow growth drags nearly everyone down to sub-par prosperity levels.
This is the drama now unfolding in the once most prosperous Western World, with Europe ahead and the US fast following suit. There is no way around it. Productive people — especially productive people of all people — cannot be convinced to produce for others, tricked into producing for others through macroeconomic post-manipulation gimmicks, or ultimately be coerced to produce for the benefit of distant unknowns. Voters should leave them alone to keep their full rewards and thus the public should be content to benefit from the work done by exceptional people. It is the work done by exceptional people that is the main benefit to society, not the taxes that they pay. The progressive solidarity fantasy, whether voluntary through repeated appeals or changes to human DNA or, more traditionally, coerced by the power of the majority, is simply a pipe dream. A pipe dream that keeps been proven wrong. But the dream keeps living on, so western World decline continues.
The destructive effects of statist legislation enacted today (e.g. most notably ObamaCare) have barely begun to have an effect, but will over time compound into an ever deeper and irreversible decline over many years to come. In the short term there is the (partially justified for the simple minded) free lunch palliative illusion.
HopNChange: The road over which Western world lemmings race to their demise… must be comical to observe this predictable western suicide from an Emerging World vantage point.
As growth of the US pizza stagnates while, at the same time, the three billion people of the emerging world start having US sized pizzas, the drowning American Voter lemming will, true to form, drag his rescuer below water, and predictably vote for more and more redistribution.
The Euro-Grecian vicious cycle coming to a voter’s mind near you…
Income disparity is not remedied by higher tax rates, but actually causes income disparity. This can be demonstrated with the Laffer curve, and its reciprocal curve, the size of economy curve. This is the reciprocal curve derived from dividing the revenue amount by the tax rate. This gives a very high curve on the low tax side and diminishes as the tax rate approaches 100%.
This size of the economy curve can be a proxy for the number of jobs available in the economy. Superimpose a size of the work force line horizontally across the chart. Where the size of the work force exceeds the number of jobs, as under high tax rates, available jobs are scarce and the pay is low and the employer benefits because he can pay only a fraction of the value added by that employee. Where the number of jobs in the economy exceed the size of the workforce, jobs are plentiful and wages and salaries are high and constrained only by the value added by the employee.
When wages are high families are financially able to raise children with only one parent working outside the home. This would have a reinforcing effect of further shrinking the participating work force pushing wages still higher. And with employers being forced to pay close to the value created by the job, more capital goes to the workers, making it easier for them to start their own businesses. Income inequality is lowered, by lowering tax rates. Which is pretty much the opposite of what the high tax rate advocates will tell you.
With more people working fewer people are on unemployment compensation or collecting disability checks. Demands on social services are less so taxes needed are less and government is less of a factor in lives.
To recap, increasing tax rates shrinks the economy and the number of jobs available, this allows employers to pay small wages, and make high profits that are taxed at a high rate. Lowering tax rates increases the number of jobs and the size of the economy, this forces employers to pay high wages and their profits suffer, but their net after taxes may not be greatly different or less than under high tax rates.
Your embedded links invariably end up being “jimmyobama” not the links you indicate.
Are you copying and pasting?
Can we please retire the euphemism “redistribution”? It’s theft. It doesn’t matter how much verbiage you construct around it. When you take from productive Peter and give to unproductive Paul, it is theft. Social justice blah blah, paying their fair share, blah blah. Whatever you like your form of; we can take because we’re the State.
It’s theft. It doesn’t end well for societies that codify it into law.
[…] Dan Mitchell has the video: […]
[…] Found the video at Daniel Mitchell’s blog […]
[…] We are highly unlikely to see her like again, on either side of the Atlantic. As Dan Mitchell notes, “…it’s…painful to realize that the current crop of GOP presidential candidates […]
[…] But as is often the case, the left’s answer is completely wrong. Class warfare and redistributionism are terribly misguided, as illustrated by this Walter Williams column and this Margaret Thatcher video. […]
[…] inequality and here’s a debate I did on income mobility. Even better, here’s what Margaret Thatcher said about these topics. Rate this: Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike […]
[…] shared an amazing video last year featuring Margaret Thatcher exposing the left for wanting to keep the poor destitute if that was the price of hurting the […]
[…] shared an amazing video last year featuring Margaret Thatcher exposing the left for wanting to keep the poor destitute if that was the price of hurting the […]
[…] Margaret Thatcher Debunks the Leftist Agenda on Income Equality […]
[…] shared an amazing video last year featuring Margaret Thatcher exposing the left for wanting to keep the poor destitute if that was the price of hurting the […]
[…] shared an amazing video last year featuring Margaret Thatcher exposing the left for wanting to keep the poor destitute if that was the price of hurting the […]
[…] though he belongs to the Conservative Party that produced the great Margaret Thatcher, Cameron seems to be a bit of guilt-ridden statist with his finger always in the air to see which […]
[…] instance, when I watch these Margaret Thatcher speeches about “public money” and “the poor poorer.” Sort of the same feeling I get when I watch the Gipper talking about Washington being a […]
[…] shared an amazing video last year featuring Margaret Thatcher exposing the left for wanting to keep the poor destitute if that was the price of hurting the […]
[…] but I also have a couple of inspiring videos of Thatcher in action, which can be viewed here and here. Rate this:Share this:PrintEmailFacebookTwitterMoredeliciousDiggFarkLinkedInRedditStumbleUponLike […]
[…] cite the famous Churchill quote about “equal sharing of the misery.” And I ask them to show me evidence of one nation […]
[…] I especially like his point about how class-warfare policy hurts the poor. Very similar to what Margaret Thatcher says in this powerful video. […]
[…] P.S. I periodically share two great Reagan videos, which can be seen here and here, but I also have a couple of inspiring videos of Thatcher in action, which can be viewed here and here. […]
[…] Thatcher eviscerated that destructive mentality many years ago in this famous speech, but this is an area where proponents of limited government need to do more […]
[…] if you want even more, here’s something I wrote on income inequality and here’s a debate I did on income mobility. Even better, here’s what Margaret Thatcher said about these topics. […]
[…] here’s her powerful performance in the House of Commons exposing the left for being willing to impoverish the poor if it meant those with higher incomes […]
[…] here’s her powerful performance in the House of Commons exposing the left for being willing to impoverish the poor if it meant those with higher incomes […]
[…] P.S. I periodically share two great Reagan videos, which can be seen here and here, but I also have a couple of inspiring videos of Thatcher in action, which can be viewed here and here. […]
[…] P.S. I periodically share two great Reagan videos, which can be seen here and here, but I also have a couple of inspiring videos of Thatcher in action, which can be viewed here and here. […]
[…] though he belongs to the Conservative Party that produced the great Margaret Thatcher, Cameron seems to be a bit of guilt-ridden statist with his finger always in the air to see which […]
[…] P.P.S. As you might expect, Margaret Thatcher addressed this issue in a brilliant fashion. […]
[…] PPS Como es de esperar, Margaret Thatcher trató este tema de una manera brillante . […]
[…] P.P.S. As you might expect, Margaret Thatcher addressed this issue in a brilliant fashion. […]
[…] If you don’t believe me, watch this marvelous video of Margaret Thatcher debunking the left. […]
[…] If you don’t believe me, watch this marvelous video of Margaret Thatcher debunking the left. […]
[…] you want to know why the left is wrong about income inequality, you need to watch this Margaret Thatcher video. In just a few minutes, the “Iron Lady” explains how some – perhaps most – […]
[…] you want to know why the left is wrong about income inequality, you need to watch this Margaret Thatcher video. In just a few minutes, the “Iron Lady” explains how some – perhaps most – […]
[…] you want to know why the left is wrong about income inequality, you need to watch this Margaret Thatcher video. In just a few minutes, the “Iron Lady” explains how some – perhaps most – statists would […]
[…] you want to know why the left is wrong about income inequality, you need to watch this Margaret Thatcher video. In just a few minutes, the “Iron Lady” explains how some – perhaps most – statists would […]
And yet they got rid of her, those men in dark corridors and grey suits because she was a threat to the EU project. Spineless men who sold their souls for an EU job for life and a gold plated pension.
[…] you want to know why the left is wrong about income inequality, you need to watch this Margaret Thatcher video. In just a few minutes, the “Iron Lady” explains how some – perhaps most – statists would […]
They got rid of her because while her sophist approach to exploit class war hatred, prejudice, garnered electoral wins, she was actually dumb as a box of rocks when it came to running a business.
She wrecked homes, families, whole industries in her cavalier jingoistic wake
[…] usted quiere saber por qué la izquierda se equivoca sobre la desigualdad de ingresos, necesita ver este video de Margaret Thatcher. En sólo unos minutos, la “Dama de Hierro ” explica cómo algunos –tal vez la […]
[…] Margaret Thatcher has the best-ever takedown of the left’s inequality […]
Monty Python, anyone?
You can’t expect people who consider getting a voting ID that they should be working harder instead of looking in their mailbox every day.
[…] Margaret Thatcher famously said, it seems they’re willing to hurt the poor if they can hurt the rich even […]
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Your article ends with a question that asks: “Which societies have generated more prosperity and higher living standards for ordinary people?”
The answer, according to statistics, is countries like Norway, Sweden, Finland, and countries who apply what is known as “the Scandinavian model”. This is a model which relies heavily on an efficient government which (regardless of whether it is right wing or left wing) applies heavy taxes, income redistribution, and countless policies that go into making capitalism work at its best for the most and not just for a few. They are countries which, moreover, have managed to stay afloat better than the others since the recession hit.
I think there are both good examples and bad examples of social capitalism (championed by Keynes and others) and good and bad examples of neo-liberalism (championed by thinkers such as Mises and Hayek). The secret is how well the government does in implementing either model.
[…] I’m disappointed that I couldn’t find a clip of her actually making that statement. But if you want to see the Iron Lady in action, you can click here or here. […]
[…] I’m disappointed that I couldn’t find a clip of her actually making that statement. But if you want to see the Iron Lady in action, you can click here or here. […]