Tuesday, 26 February 2013

“ … to Each According to His Needs”

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The government’s goal is to “narrow the growing gap between the rich and the poor” by way of confiscating “more of the profits” of companies in order “to pay for ambitious welfare programs,” the Wall Street Journal recently reported.

The government would take particular aim at corporations, warning they would have to “shoulder some of the extra cost” to “boost the safety net,” stated the news report.

An official statement from the government delivered the marching orders and the rationale for greater economic leveling and higher levels of central planning: “Narrowing the income gap is essential for ensuring social justice and social harmony. We need to raise income levels of the poor and adjust taxes on the excessively wealthy.”

This official linking of “justice” to “harmony” by the government gave legitimacy to the old “No justice, no peace” slogan that’s been chanted ad infinitum by the more militant segments of the anti-capitalist community.

The targeting of the “excessively wealthy” as the reason for poverty is an enduring falsehood among levelers and redistributionists, the result of a fixed pie perspective in which the poor can only obtain a bigger slice of the pie by reducing the size of the slice being received by the rich. It’s an economic untruth rooted in resentment and kept alive by a lack of knowledge about how the world works.

By 2008, for instance, North Korea’s six decades of anti-capitalism, central controls, and mandated egalitarianism had produced a per capita income of $1,122 per year compared to a per capita income in 2008 of $19,614 in capitalist and unequal South Korea.

Winston Churchill explained it accurately and concisely during World War II: Capitalism is the “unequal sharing of blessings” while socialism is the “equal sharing of misery.”

Of the aforementioned new directive by the government to “narrow the growing gap between the rich and the poor” by way of targeting the “excessively wealthy” and confiscating more of the profits of companies, Nicholas Borst, a researcher at the Peterson Institute, predicted that the “implementation of the program very well might get bogged down by vested interests and the conservative old guard.”

To equalize incomes, a new government directive states that “the personal income tax would be adjusted to capture more of the income from the nation’s well-to-do.” Additionally, new controls would be implemented to go after those who have “been able to amass fortunes that often evade the government’s tax net.” Government mandates would also be enacted in order to produce a “rise in the wages of low-income workers.”

Word for word, policy for policy, this government directive for a mandated redistribution of wealth and income sounds not unlike what’s been coming out of the Oval Office for the past four years.

Instead, all of the aforementioned government edicts aimed at narrowing the “growing gap between the rich and the poor,” increasing taxes on the “excessively wealthy,” and ensuring “justice” and “harmony” are exact quotes from the directives recently issued by The State Council of the People’s Republic of China, namely the Central People’s Government, the highest executive organ of state power and the highest organ of centralized state administration.

The State Council of the People’s Republic of China is responsible for carrying out the policies and principles of the Communist Party of China, including the enforcement of regulations, laws, mandates and tax policy, guided by the straightforward prescription from Karl Marx for a just and fair society: “From each according to his abilities, to each according to his needs.”



Ralph R. Reiland is an associate professor of economics and the B. Kenneth Simon professor of free enterprise at Robert Morris University in Pittsburgh.