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.”