Redistribution of Wealth: Why Rich Get Richer
While arguing with a complete stranger about the validity of “Redistribution of Wealth” I wrote this brief:
We live in a society that is more free then in days past, yet remnants of the old Feudalism system still remain today. A very small percent of the population still owns a disproportionate amount of both wealth and power, and their children inherit a disproportionate amount of that wealth and power.
The facts of the matter are this: poor people become poorer over time, because the cost of their lifestyle is greater then their value, or the potential of their earnings. In other words, this Feudalism derived system makes it hard for poor people to create wealth because they are constantly in debt to their own survival. These are the class of people who must first WORK TO SURVIVE and who have little or nothing left over to invest afterward. It’s not just the poor, most middle class in this country are victims to this trap as well, they don’t realize it but generation after generation they are becoming poorer.
The problem is not that some have more then others. The problem is the de-stabilizing effect of an ever increasing debt of existence.
What happens when poor people suffer a hardship, like being fired? They struggle to get back into the position they were in before (all work until death, no gain in wealth) or are forced to go without food, clothing, shelter and access to medical care; as a result, their value in society only remains stagnant or goes down (hungry/injured/tired workers are less productive) until the debt/survival ratio becomes un-sustainable. At which point, any number of bad things tends happens, both to the individual and to the rest of society.
What happens when rich people suffer a similar hardship? Very very few will drop down a rung in society; most will stimulate the economy with increased consumption of expensive luxuries to get over it, OR they make relationships with other rich people as part of the recovery process and get access to even more opportunities. This stimulates the economy in the short term, and effectively amounts to no net loss of personal wealth and sometimes acts as a catalyst for net gain of personal wealth.
Do you see the difference wealth creates? Wealth is a buffer, a stabilizer, that affords greater wealth.
100% access to little things, like electricity, housing, food, clothing, and medicine, is what allows rich people the time to make investments in themselves, and thus become richer. Poor people struggle to meet these basic necessities, and where they fall short they loose access to opportunity and thus can never become rich as long as they are vulnerable to the very things rich people are immune.
The point of “redistribution” is to create opportunities for the majority that are otherwise only available to the rich; feudal lords kept their peasants poor and ignorant, much as the rich of today keep the middle and lower classes in ignorance of even their own value in the jobs they work and the economy as a whole.
The truth is, there is enough wealth in this country that everyone can be rich, no one needs to be in poverty. Poverty serves no purpose in society, neither for the rich nor for the majority.
When all the basic needs of survival are met only then can individuals evolve, and by doing so they naturally tend to create wealth for themselves; they educate themselves, start businesses, invest in retirement plans. By virtue of creating opportunity through wealth redistribution, a significantly larger portion of the population can lift themselves out of serfdom (lower/middle class) by creating wealth for themselves as individuals. This has a profoundly positive effect on the economy not only because of reduced crime and more individuals have access to more wealth and thus spend more, but because whole industries can be created practically over night as more valued workers enter the market place.
The point is not to pay for poor peoples existence outright generation after generation, the point is to extend the same leverage of existence the rich have so poor people can rise out of serfdom. No one benefits by allowing poor people to continue to fall victim to helplessness, addiction and crime, the same as it’s been for thousands of years. However, even the already rich can benefit from a flood of educated workers, workers who can afford to invest in themselves by making themselves more valuable rather then be criticized for failing to meet the basic needs of survival.
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