Wednesday, 30 January 2019

A Rich Challenge For You

Envy of the rich is one of the most dastardly things lefties do. Chief Executives get lambasted for earning too much; millionaire innovators are the scourge of society, and the top few dozen richest people on the planet are thorns in the flesh of the dim-witted social justice warriors holding placards in central London bemoaning the 'injustice' of the wealth gap, and the 'greed' of the rich.

To see why the leftist antipathy is misjudged, you only need to consider the question of what you personally would need to do to be rich. Think for a few moments. If you don't have the skills and experience required to earn a big salary, you are going to need to come up with something that society wants on a large scale. Have a think ....

Did you manage to think of a way of making yourself rich yet? I suspected not. It is not very easy to produce a good or service that masses of people value more than it would cost you to produce, especially as your venture would involve large start up costs and initial risk and foresight.

The reality is, very few people possess the creative nous to become millionaires, let alone billionaires. That is why, when lefties whinge about rich people, I suspect the subtext is that they are really bemoaning their own lack of entrepreneurial talent - it's an underhanded lament at what others can do better than them.

I'm not rich, but I greatly value the contributions of the likes of Jeff Bezos, Bill Gates, Mark Zuckerberg and countless others. Lefties value them too; they just forget that they do. Because, you see, that is what is great about the market. Jeff Bezos has got rich from being an Amazon shareholder, but the combined riches of the Amazon customers have become even richer once you aggregate the lower prices and consumer surpluses they've enjoyed.

The more competition there is in the market, the more benefits go to the consumer. Rich people like Jeff Bezos and Bill Gates don't just make themselves wealthier; they increase the wealth of the average person in society too. Think how fortunate you are (as am I) to live in a society in which you are made so well off despite not having the entrepreneurial prowess to make large sums of money. I'm typing this on a laptop, sharing it on the Internet, surrounded by luxuries that my grandparents would have found astonishing - and for a lot of these luxuries, it is rich, creative, innovative risk-takers I have to thank. On top of that, we should all be thanking each other too - after all, no single person does anything, even make a pencil, without the help of everyone else.

Finally, some lefties think that typical workers are being exploited by the rich executives that run their companies. A basic understanding of economics would tell them that this is untrue: for as long as there is enough freedom in a marketplace to allow competition to operate, every worker is paid their marginal product - which is to say, they are paid what their labour is worth to the firm.

The upshot to all this is that the Corbynites have got their whole political mandate wrong. No country, or group of citizens, has ever risen to its material feet by bringing richer people down. Poorer people, whether that's someone on the dole in Newcastle, or someone at the subsistence level in Nigeria, only rise to increased prosperity by creating something they can trade - an invention, a service or their labour.

No injection of material prosperity or economic growth is created through redistributing wealth from top to bottom. Yes, of course, redistributive measures are fine as a safety net to help society's most vulnerable, and for public goods like defence and the rule of law - but those who see the transfer of capital through confiscation as an envy-driven vehicle for levelling society are both uninformed and misguided.