Redistributing The Wealth; E. A Rossit

REDISTRIBUTING THE WEALTH "LET'S TAKE the money away from the rich and give it to the poor!" With monotonous regularity this state ment, in one form or another, has popped up to plague the imaginative, the talented, the brilliant, the edu cated, and the just plain, hardworking people who have earned and saved some money. From the fictional, glamorized thief, Robin Hood, to the modern, real-life thief, Fidel Castro, the share-the-wealth appeal has fired mobs with enthusiastic and greedy approvaL On the "theoretical" scene, the same old impractical and un workable idea has been kneaded and rekneaded from Marx, through Keynes, to Galbraith, who refers to it today in the ultramodern language of taking from the private sector of the economy to give to the public sector. What's wrong with redistributing the wealth? Actu ally, there's nothing wrong with sharing wealth as long as it is done voluntarily. In a free economy, wealth is redistributed myriads of times daily. It is the forced and compulsive redistribution which is wrong-the element Mr. Rossit does public relations work in Seattle, Washington.

297 298 EDWARD A. ROSSIT of coercion. When tax laws are imposed not to raise revenue but to redistribute wealth, such laws are wrong. Why redistribute wealth anyway? What would be the purpose of such an act? If the purpose were to destroy initiative and incentive to work, that purpose would surely be fulfilled. Under continuous equalization of wealth, there would be no will to work. If anybody cre ated more wealth, it would automatically be taken and redistributed to maintain the state of equality. With no incentive to create-and indeed a penalty in the form of confiscation-the total to be divided among all the peo ple would steadily go down, as would everybody's equal share. As food supplies were eaten and as clothing and tools and machinery wore out, we would soon reduce ourselves to a state of equal poverty. If "justice" were the purpose of sharing wealth, how would this justice be done? Equality of opportunity is not the same as equality of wealth. Surely, those who have worked longer, harder, more brilliantly, or with greater talent deserve more than those who have loafed, idled, labored stupidly and inefficiently, or just doodled.

How long could a state of equal wealth last? One week? One day? One minute? Probably not even that long. Some drunk, enjoying his equal share of liquor, would surely stumble in his kitchen and break his drink ing glass, thus making himself poorer by one glass and a portion of liquor. Another individual, more creative than the others, would sew up a hole in his pants pocket, thus making himself richer than the others by the pos session of a better pair of trousers. Almost immediately REDISTRIBUTING THE WEALTH 299 there would be inequalities, which would have to be re distributed by continuous force. A large number of people would be kept occupied with the ridiculously petty bookkeeping and paperwork needed to keep track of inventories of shared wealth; and an equally large number of people would be needed to spy on people's holdings, to confiscate goods by force, and to deliver to those with less. Since there would be no incentive to create, make, invent, or build, the sum total of wealth would decline as existing wealth, now totally shared, wore out, was eaten, grew stale, or became obsolete. The distributive process could theoretically continue as more and more people shared less and less until finally there would be nothing left to share, everybody sharing equally.

Actually, a total, complete, and absolutely equal shar ing of the wealth is impossible, and few people seriously advocate such a thing. It would be too laughable. How ever, the general idea persists in modified forms. Don't share all the wealth-just some of it-is the feeling. And so, arbitrarily, levels are set above which people should be forced to share. It is interesting that in each case, whoever sets an upper limit on wealth sets it higher than his own level. Naturally, everybody who advocates sharing the wealth expects to gain, rather than be made poorer. How much could we expect to gain initially from a forced redistribution of wealth? Let us say that we were very "fair" and very "just" and only took from the bil lionaires. There aren't many of them around, and we 300 EDWARD A. ROSSIT could all get rich by taking their money. How much would each American get if we took a billion dollars away from someone and gave everybody an equal share?

A billion dollars is an ahnost astronomical amount of money. Would we each get fifty thousand dollars? Not quite that much! How about at least a thousand dol lars apiece? No! It is less yet. Surely each of us would get at least a hundred dollars if we destroyed this bil lionaire and shared his wealth. No, it would still be less. The arithmetic is simple! Divide one billion dollars by 180 million, which is the approximate population of the United States. When we do this, we come up with the answer of a little over five and a half dollars apiece. It is very disappointing. And since there are very few American billionaires, there would be very little of this kind of wealth to share. If we lower our sights to millionaires, we increase the number of people from whom we can steal, but we de crease the size of the share to be gained from each of them. The exact number of millionaires in this country is not certain, but there aren't many of them. Now, how much does each of us get if we divide a million dollars?

The answer, approximately, is $.0055 per person, or 55¢ for every hundred Americans. This is not making us as rich as we thought! If we confiscated one million dollars from each of a thousand millionaires, and divided and shared all this money, our equal shares would come to the staggering sum of $5.50. We could hardly take five and a half dollars and buy cars, yachts, furs, and jewelry. With gasoline taxes as they are, it would take the bigREDISTRIBUTING THE WEALTH 301 gest part of five and a half dollars to fill our own car's gas tank. Well, if we can't get enough money this way, let's lower our sights to people with $100,000. After all, no body "needs" more than a hundred thousand dollars! Since it would be difficult to know just how many peo ple have that much or more, we would have to hire and pay a large staff of snoopers to find out. Even then, the results would be consistently disappointing.

The gross national product in 1960 was valued at ap proximately five hundred billion dollars. This is it! ! Sup posing we just shared everything that everybody produced in the whole year? Share and share alike! Surely that would make us rich! If we divide five hundred billion dollars by 180 million people, we do get more. We get about $2,800 each. More than this is impossible without raising the gross national product itself. You can't have both an equal share and a larger share of the pie unless you get a bigger pie. We would simply have to produce more wealth. But we know that forceful sharing of the wealth would cause the gross national product to decline -not rise. So we know now the most that we could pos sibly get through a redistribution of wealth. We know the most-but do we know the least? If those who have more are to be forced to share with those who have less, we may be in trouble. We are all Americans-citizens of the richest country in the world.

If compulsive sharing is right for some people, it must be right for all. Very roughly, we have almost half of the wealth of 302 EDWARD A. ROSSIT the entire world in the United States. If wealth is to be shared, then we must all share and share alike. The Indian who earns $100 per year, the Chinaman who earns $50 per year, and the African who manages on less than $25 per year will then also be entitled to share in this forced redistribution. And such lack of wealth among such large numbers of people will pull the aver age way, way down. Somewhere along the way, we may discover that this share~the~wealth business, which was supposed to make us all so rich, will really make us quite poor. And no body wants to share wealth, who will end up with less than when he started. Why, then, be fooled by this bromide of taking from the rich to give to the poor? It is morally wrong to do this, and it is economically destructive. It is wrong whether we call it outright theft (Robin Hood), gov~ ernment expropriation (Fidel Castro), or taking from the private sector of the economy to give to the public sector (Professor Gal brai th) .

Let's stop thinking about forcefully redistributing wealth and start thinking about letting people do it freely. Many lazy sons have inherited large sums of money from industrious fathers, and wasted the money, dying penniless. Many other men have started penni~ less, and have built huge fortunes. We can't stop wealth from being redistributed. But the best opportunity for multiplying wealth, so that each may have more, is to let the redistribution be voluntarily managed under freedom.