PJ Media

The Socialist Transfer of Wealth

Many keyboards have been worn down in the churning out of learned commentary, pro and con, regarding the fiscal redistributionist policies of socialist-leaning governments. Those who favor the averaging out of national income and the sharing of global reserves point to the presumably “growing gap” between rich and poor that needs somehow to be closed. Differences need to be “equalized.” This thesis is perhaps most forcefully developed by New York Times columnist Paul Krugman, author of The Conscience of a Liberal, who deplores class inequality, or what he calls “the Great Divergence” between rich and poor, especially after the administration of Ronald Reagan.

Skeptics disagree, arguing that competition is healthy, that the creation of wealth must come before its redistribution (whether transacted via entitlements or tax exemptions), and that the best way to maximize benefits is by promoting a robust industrial and technological base and a vigorous service sector that can be depended on to generate mass employment. Moreover, inequality is by no means synonymous with poverty. As Victor Davis Hanson cogently argues, “Being unequal is not poor. And not having what the ‘rich’ have hardly means having it bad. Sorry, that’s just the way it is.”

Others contend that the apparent gap or “divergence” is largely a media construct transforming a relative ratio into a structural absolute. If someone manages to turn a profit, James Bowman astutely suggests in a recent issue of The New Criterion, someone else is only comparatively poorer. He is not necessarily any worse off than he was before. The irony, however, is that redistributionist policies meant to address a tractarian diagnosis of economic malaise tend in the long run to produce a condition of public dependence and inertia. At the same time, the resources needed to subsidize these programs gradually disappear as productivity declines and jobs grow ever scarcer.

Unfortunately, the redistributionist or socialist ethos is currently trumping the job-creating capitalist enterprise, in Europe as well as the U.S. Which is to say that big government has taken precedence over the free market and an intrusive statism has come to dominate labor, trade, and finance. National Post columnist George Jonas writes, “Most of our contemporaries expect salvation from improved government, not reduced government…we’ve been rubbing our lamps like Aladdin, releasing gigantic genies, aka governments, to grant our wishes.” These genies finish by wreaking havoc and refuse to be stuffed back into their bottles. There is little doubt that the spirit of “equalization” has become pervasive in both the local and international arenas, at least in the West.

It is increasingly obvious, to take a muscular example, that the “Global Warming” (or “Climate Change”) movement is really a design promulgated chiefly by the United Nations for transferring wealth from First World to Third World countries. Consider the UN’s CDM (Clean Development Mechanism), which arranges for governments and companies in the industrialized world to fund unverified “green” projects in the developing world, in exchange for carbon offsets. Carbon traders and the favored class among the developing nations are having a field day. Meanwhile studies have shown, as per Wikileaks, that no emissions have been reduced. This reinforces the conviction that the UN stance on climate change is “less about the environment and more about a wealth-transfer scheme” (National Post, October 4, 2011). Ottmar Edenhofer, former co-chair of the IPCC’s Working Group III, admitted in an interview with Germany’s NZZ Online on November 14, 2010, that “we redistribute de facto the world’s wealth by climate policy.”

On the national scene, the same attitude toward social and economic disparities prevails. High earners are now regarded as disreputable parasites living off the fat of others’ labor; at the same time, the poor — or the “unequal” — are not considered responsible for their comparatively disadvantaged situation in life. It follows from this species of logic that the rich, the so-called 1%, must do their “fair share” — code for punitive taxation measures and a business-strangling regulatory apparatus — while those on the lower rungs of the economic ladder must be boosted upward, even if they happen to be afraid of heights and incapable of climbing.

The results of this invidious policy should have been predictable long ago and are now everywhere to be seen. The U.S. is beset by debt so astronomical only the Hubble telescope can focus it. America’s productive business community is shrinking by the day, entitlement programs are in runaway, and bankruptcy looms on the fiduciary horizon. Nanny-state Europe with its corporative approach to social issues and unsustainable expenditures is also imploding. France and eight other nations have recently had their credit ratings downgraded (as occurred in the U.S. last year), owing to what Standard and Poor’s calls “ongoing systemic stresses in the Eurozone”; many countries are nearing default, and a major banking crisis appears inevitable.

This is the crater that our political rulers and their economic advisors, supported by decadent and flaccid populations accustomed to unearned gratuities, have dug for us all. Admittedly, most people’s lives are circumscribed by immediate interests and desires so that their lack of foresight can to some extent be understood. But one requires more from presumably credentialed and perspectival experts, who have generally turned out to be sore disappointments. We may wonder if Hanlon’s Razor does not apply here: Never attribute to malice what can be adequately explained by stupidity. A strong case can be made that our leaders are possessed of profoundly uneventful minds, pursuing ideas so obsolete they resemble snails in carboniferous stone. And as usual, the nuances and intricacies of complex social structures give way to the political maneuvering and windy bloviations of a morally compromised elect.

Ignorance and self-infatuated stupidity cannot be discounted. But malice in the form of rampant self-interest and unadulterated greed is surely a significant factor as well. What goes generally unremarked is that such destructive wealth transfer schemes as we’ve been discussing, initiated by governments, NGOs, and international organizations like the UN, have less to do with the operation of “social conscience” and the amelioration of people’s lives, which are mere peripherals, than they do with personal aggrandizement and the amassing and ensuring of in-group prerogatives. Nations may flounder, and more and more among the growing sector of the jobless will find their entitlements and welfare payments progressively devalued. But those who have inveighed against the private accumulation of wealth and engineered the catastrophic policies that have only exacerbated the socioeconomic climate are themselves largely untouched by economic hardship. Indeed, whether they are unelected and unaccountable EU bureaucrats junketing in Brussels, UN functionaries enjoying the perquisites of Turtle Bay, or American legislators and government notables intent on preserving a tumescent lifestyle, they will not suffer. Their status, property, and fiscal assets remain secure.

For they are the real legatees of the wealth-transfer ideology. It makes little difference which political system they flourish in; it is easy to smell the fitch in their repertoire of inanities. In his major work The New Class, Milovan Djilas reveals how a cadre of theoretically ameliorist “managers,” supposedly adhering to socialist principles, acquired power, wealth, and privilege at the expense of “the people” whom they ostensibly served and for whose welfare they declared themselves ready to make any sacrifice. The dictatorship of the proletariat was really the dictatorship of a bureaucratic aristocracy. One is reminded of the old joke about Leonid Brezhnev, general secretary of the Communist Party of the Soviet Union, showing off his collection of vintage cars and priceless paintings to his visiting mother. “But my son,” she tremulously asks, “what if the Communists find out?”

Wealth has certainly been transferred, but in the last analysis not to the poor and needy, not to the jobless citizens of the West in a redistributionist fever of inflated currency or to the basket-case Third World nations under the aegis of global warming, but to the managerial class itself. The ultimate beneficiaries are the members of the oligarchic elite who make policy and control the flow of economic exchange. Their Swiss accounts brimmeth over and their investments are bundled together with blue ribbons. This is effectively how that deceptive euphemism, the “transfer of wealth,” works out in practice. And those who are implicated in the scam are the real 1%.