Sunday, July 02, 2017

Redistribution

Capitalism, and in particular, corporate capitalism, is a system devoted to transferring the wealth created by workers to the owners of what is defined to be property (capital). It is, quite literally, the name of the game. As an economic system, it has a number of potent advantages, both by promoting investment and by efficiently clearing markets. It also has a major disadvantage, because it promotes oligarchy.

Most of the advantages of capitalism come from competition, but as Adam Smith pointed out, there is nothing a capitalist hates like competition. Consequently, as soon as capitalists begin to capture oligarchical power, they use that power to suppress competition and increase profits. One way to do that is by expanding the definition of property and locking down the rights to it. This tends to culminate in the workers themselves becoming property.

Because of capitalism's efficiency at redistributing wealth from the many to the few, some, like myself, advocate using the government to redistribute from the rich to less rich, ideally in ways that minimally suppress people's incentives to work and create more wealth. Several successful ways to do this include government funding of healthcare, retirement income, and education.

Libertarians, at least the US Libertarian/Republicans, hate that.