The Achilles Heel of Wealth Redistribution
As I discussed in a previous article entitled ‘The Advent of Plutonomy’, there is a need to rediscover the concept of wealth redistribution, in light of the widening gap between the haves and the have nots.
However, there is a reason why wealth redistribution has fallen out of favour in the first place in our society.
After WWII there was a fairly broad consensus that, due to the tremendous suffering caused by the boom and bust cycles of our economic management style between 1880-1945, especially the chaos caused by the Great Depression and the two World Wars, that we should adopt the economic management model of John Maynard Keynes.
Lord Keynes basically legitimized the idea that governments could and should intervene in the economy in hard times to regulate the situation, and even incur deficits and debt. This would stimulate the economy and create jobs, which could then be taxed, which would then bring money back into the treasury and pay off the debt.
Fairly simple enough in theory. However, governments ended up spending their way into a deficit position, which contributed to recessions. Then governments would spend their way out of the recession into a recovery, only to spend their way into another recession, with the debt piling up all the time. This did not do wonders for investor confidence in the economy, nor in governments, both Liberal and Conservative.
So once the Communists were beaten in Russia, and there was no longer any threat of Left wing ideology on our doorstep, the financial community immediately put pressure on governments to stop spending so much money on programs which were oriented towards redistribution of wealth.
After all, it was their wealth from the international financial markets which was being borrowed by our governments, which was then being redistributed, with no real guarantee that it would be repaid.
What we need to do then is to be able to create wealth like capitalists, so that we can then redistribute it like Socialists, like an Israeli politician that I saw on TV once said.
The need is ever greater, if not to simply pay off the already accumulated debt from the 1960s to the1990s. As well, we must address the growing problem of income disparity between the top 20% and the bottom 20% of the income scale. This may sound like a broken record, but every generation has the responsibility to do this, because the free market economy is naturally oriented towards the concentration of wealth.
We must therefore, as people who believe in Democracy and Justice, make an extra special effort within our departments of Economics at our universities and colleges, and our workplaces, to make room for the concept of wealth redistribution. Otherwise we get caught in the age old trap of saying that ‘’twas ever thus. The poor have always been poor, etc…’ This shouldn’t stop us from making the effort at attenuating the most egregious excesses of capitalism so as to achieve some sort of Elemental Justice within our society.
What goes around comes around. Wealth redistribution may be temporarily out of fashion now, but I feel that, as the situation in the world worsens for the people at the bottom of the income ladder, the cries for justice will be heard. Especially important will be the threat of working class violence in our world. History has taught us that when the elite’s economic and personal security becomes threatened by the possibility of working class violence, then timely reforms are undertaken.
Let’s hope it doesn’t take another Great Depression and World War to improve the lot of the average person on this planet. I’m not sure Mother Nature will stand for it. She may intervene herself before you know it.
In any case, Lord Keynes is dead and gone, but his spirit still haunts the halls of the Economics Departments of our universities, as well as, I hope, our collective conscience.