Opinion: The fallacy of redistribution


By Thomas Sowell

The recently discovered tape on which Barack Obama said back in 1998 that he believes in redistribution is not really news. He said the same thing to Joe the Plumber four years ago. But the surfacing of this tape may serve a useful purpose if it gets people to thinking about what the consequences of redistribution are.

Those who talk glibly about redistribution often act as if people are just inert objects that can be placed here and there, like pieces on a chess board, to carry out some grand design. But if human beings have their own responses to government policies, then we cannot blithely assume that government policies will have the effect intended.

Thomas Sowell

The history of the 20th century is full of examples of countries that set out to redistribute wealth and ended up redistributing poverty.

The communist nations were a classic example, but by no means the only example. In theory, confiscating the wealth of the more successful people ought to make the rest of the society more prosperous. But when the Soviet Union confiscated the wealth of successful farmers, food became scarce. As many people died of starvation under Stalin in the 1930s as died in Hitler’s Holocaust in the 1940s.

How can that be? It is not complicated. You can only confiscate the wealth that exists at a given moment. You cannot confiscate future wealth — and that future wealth is less likely to be produced when people see that it is going to be confiscated. Farmers in the Soviet Union cut back on how much time and effort they invested in growing their crops, when they realized that the government was going to take a big part of the harvest. They slaughtered and ate young farm animals that they would normally keep tending and feeding while raising them to maturity.

People in industry are not inert objects either. Moreover, unlike farmers, industrialists are not tied to the land in a particular country. Russian aviation pioneer Igor Sikorsky could take his expertise to America and produce his planes and helicopters thousands of miles away from his native land. Financiers are even less tied down, especially today, when vast sums of money can be dispatched electronically to any part of the world.

If confiscatory policies can produce counterproductive repercussions in a dictatorship, they are even harder to carry out in a democracy. A dictatorship can suddenly swoop down and grab whatever it wants. But a democracy must first have public discussions and debates. Those who are targeted for confiscation can see the handwriting on the wall, and act accordingly.

Among the most valuable assets in any nation are the knowledge, skills and productive experience that economists call “human capital.” When successful people with much human capital leave the country, either voluntarily or because of hostile governments or hostile mobs whipped up by demagogues exploiting envy, lasting damage can be done to the economy they leave behind.

Fidel Castro’s confiscatory policies drove successful Cubans to flee to Florida, often leaving much of their physical wealth behind. But poverty-stricken refugees rose to prosperity again in Florida, while the wealth they left behind in Cuba did not prevent the people there from being poverty stricken under Castro. The lasting wealth the refugees took with them was their human capital.

We have all heard the old saying that giving a man a fish feeds him only for a day, while teaching him to fish feeds him for a lifetime. Redistributionists give him a fish and leave him dependent on the government for more fish in the future. If the redistributionists were serious, what they would want to distribute is the ability to fish, or to be productive in other ways. Knowledge is one of the few things that can be distributed to people without reducing the amount held by others.

That would better serve the interests of the poor, but it would not serve the interests of politicians who want to exercise power, and to get the votes of people who are dependent on them. Barack Obama can endlessly proclaim his slogan of “Forward,” but what he is proposing is going backwards to policies that have failed repeatedly in countries around the world.

Yet, to many people who cannot be bothered to stop and think, redistribution sounds good.

Thomas Sowell a senior fellow at the Hoover Institute and author of “The Housing Boom and Bust”.


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Comments (31)
  1. Horse tail says - Posted: September 30, 2012

    And the majority of the population want this guy back in office for 4 more years????

    Get your heads out of the sand!!!!!

  2. TeaTotal says - Posted: September 30, 2012

    Uncle Tom S. continues his decades old record of being wrong about everything with more nonsense from the well wingnut funded Hoover propaganda mill.

  3. Honkylonk says - Posted: September 30, 2012

    Tea Total,

    As usual, it is YOU who is wrong about eveything. And you just can’t resist playing your pathetic little race card in referring to Dr. Thomas Sowell as “Uncle Tom”. You are not intellectually powered enough to take out Dr. Sowell’s trash.

    As Dr. Sowell has so clearly illuminated, redistributionists like our current President have never succeeded in propagating anything but misery any and everywhere they have managed to sieze the reins of power. Whenever possible, people will flee economic oppression for lands of freedom and opportunity, as is witnessed in California daily (see article below). Perhaps the greatest laboratory example of this would be North vs South Korea. (Think “the wall test”.) Same people and background/heritage, same environment geographically. Which side has prospered? Which has utterly and completely failed?

    Please, Tea Total, point to the example (just one) which proves that redistrubtion actually works.

  4. dumbfounded says - Posted: September 30, 2012

    The fallacy is that “redistribution” as mentioned in this fantasy piece, ignores corporate welfare, which is far more expensive than individual welfare. Apparently, taking tax dollars from the middle-class and giving it to millionaires is fine with Uncle Tom.

  5. TeaTotal says - Posted: September 30, 2012

    Thomas Sowell’s list of “greatest hits”=his unabashed love for: trickle down economics, wars of any kind, anywhere, all things GW Bush, any and all corporate privatization of the commons and his disdain for the economic progress of anyone other than the 1%ers. And please don’t lecture me about the “race card” after all your hysterical Islamaphobic diatribes. Epic fail on all counts.

  6. Local Yokle says - Posted: September 30, 2012

    To all:

    Any tax is a redistribution of wealth… Corporate Tax, Income Tax, Sales Tax, ANY Tax.

    Unless you are for no taxes you are in fact in favor of redistribution of wealth.

    As for the Christian references are we to forget the Good Samaritan? Love thy Neighbor is a Christian Value, Hate and Stereotyping aren’t.

    Here is a reference for those you need such things:

    My two Cents
    -Local Yokle

  7. Pete says - Posted: September 30, 2012

    It’s interesting that Sowell uses a false analogy argument to illustrate what he calls a fallacy. Our society and economic system is nothing at all like the Soviet Union under Stalin or Cuba under Castro (or North Korea, @Honkylonk).
    Obama isn’t trying to collectivize agriculture or purge the bourgeoisie – He is simply asking the people who have benefited the most from our system to pay back into it.

  8. 4-mer-usmc says - Posted: September 30, 2012


    Perfectly stated.

  9. Tahoeadvocate says - Posted: September 30, 2012

    Taxes, fees, etc. are not necessarily redistribution of wealth as long as the funds are collected from all and used to pay for those things which are the basic role of the government. Things like the protection of your country which you can’t do yourself. Things like infrastructure which enables you to do things cheaper than you could do them yourself and supports your ability to earn a living through your trade. When it becomes redistribution is when the government becomes a force which decides that it knows how to spend your money better than you do on things which are personal and moral responsibilies. Then they are taking money and giving it to others you might not have done yourself and they are spending more to do so.

  10. thing fish says - Posted: September 30, 2012

    So, who is behind of the redistribution of wealth evident in it being increasingly concentrated to a smaller group of people, shrinking middle class and increased poverty?
    Cut subsidies for farms and fossil fuels, make banks and insurance companies play by the rules, then you might have a point.

  11. Honkylonk says - Posted: September 30, 2012

    As was already well said by “Tahoe Advocate”, taxes are required to fund the common defense, infrastructure and other larger public efforts. Reagrdless of the fact that the weight falls unevenly on the poulation, with 47% paying no federal income tax, that is not redistribution of wealth (although with the EITC an argument could be made for it.)

    This is the real problem:

    Oh, and Tea Total… Just FYI Islam is a cult, not a race. There are black muslims, arab muslims, asian muslims and yes, even caucasian muslims (See Bosnia, Croats, Serbs, Chechnya, etc.)
    It’s about the violent ideology, not the race… get it?

    Still waiting for your (just one)shining example of reditributionist success.

  12. ljames says - Posted: September 30, 2012

    Pete abovewrites:

    It’s interesting that Sowell uses a false analogy argument to illustrate what he calls a fallacy. Our society and economic system is nothing at all like the Soviet Union under Stalin or Cuba under Castro (or North Korea).
    Obama isn’t trying to collectivize agriculture or purge the bourgeoisie – He is simply asking the people who have benefited the most from our system to pay back into it.

    has hit the nail the head – rather succienctly I might add! The anti-socialist straw-man rhetoric against Obama would be funny if it wasnt that some folks might think it’s a serious critique. It’s turned our ability to have serious political discourse into a joke!

  13. Dick Fox says - Posted: September 30, 2012

    Honky is just afraid that the Dems might raise the minimum wage and continue to fund governmental agencies like the local Health Dept., which would redistribute some of His personal $ to the hard working poor who are not paid enough to owe income taxes. They do, however, pay all sorts of other taxes. Some things never change as this quote from the FDR era( a good example of successful wealth shift) by J.K. Galbraith : “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; the search for a superior moral justification for selfishness.”

  14. Honkylonk says - Posted: September 30, 2012

    I’ll be happy to compare tax returns and then we can find out who really cares about the downtrodden by virtue of the percentage of income donated to charity, huh? Liberals love to talk about doing their “good works”, except they always do it with somebody else’s money. When it some to coughing up their own money, uh,…not so much.

    How’s a $1000.00 bet payable to the winner’s charity of choice sound?

    By the way, Dick, there’s a blood drive tomorrow, will I see you there?

    (Sorry, this may post twice, I had a typo in my screenname)

  15. Biggerpicture says - Posted: September 30, 2012

    Honkylonk. I would like to see the stat for dems/repubs volunteering TIME to charities as opposed to money.

  16. Honkylonk says - Posted: September 30, 2012

    Bigger Picture,

    OK. Here you go, but you won’t like it. Read “Who Really Cares” by Arthur C. Brooks. He documents the issue quite thoroughly. Conservatives donate more money, time, and even blood than do liberals. Shocking, huh? (and if your still in the mood to destroy all your liberal preconceptions, read “Makers and Takers” by Peter Schweizer.)

    “We all know we should give to charity, but who really does? In his controversial study of America’s giving habits, Arthur C. Brooks shatters stereotypes about charity in America-including the myth that the political Left is more compassionate than the Right. Brooks, a preeminent public policy expert, spent years researching giving trends in America, and even he was surprised by what he found. In Who Really Cares, he identifies the forces behind American charity: strong families, church attendance, earning one’s own income (as opposed to receiving welfare), and the belief that individuals-not government-offer the best solution to social ills. But beyond just showing us who the givers and non-givers in America really are today, Brooks shows that giving is crucial to our economic prosperity, as well as to our happiness, health, and our ability to govern ourselves as a free people.”

    As for my wife and myself, we mentor two terrific young ladies, sisters who lost their mother to breast cancer when they were just 4 & 5 years old. They are now 12 and 13 and although we are very busy, we enjoy spending time with them frequently. My wife never had a daughter so she really enjoys the “Princess Training” part. Over the last eight years we have enjoyed our many, many hours spent with them.

  17. Biggerpicture says - Posted: September 30, 2012

    Honkylonk, thanks for the info. Wasn’t insinuating anything, just curious.

  18. Dick Fox says - Posted: September 30, 2012

    Arthur C. Brooks is the head of AEI, a Right wing/screw the middle class worker stink tank. “Makers and Takers” is Peter Schweizer, another well paid shill at the Hoover Inst. whose job is basically fulfilling the Galbraith quote. Thanks but no thanks for the “info” from these organ-grinder monkeys. Please don’t hurt your arm and shoulder patting yourself on the back, I think everybody in town and all that Have to do biz with you already know what a wonderful human being you are.

  19. Honkylonk says - Posted: September 30, 2012


    Gee,I’d love to say something nice about you but I don’t even know you. I’m pretty sure you don’t know me, either, but don’t let that stop you from commenting about me personally.

    Shall I assume you’re not interested in taking my offer on the $1000.00 bet?

  20. Parker says - Posted: September 30, 2012

    The more government controls, or tries to influence our economy, or any economy, the less growth and prosperity you will have for ALL income classes! That’s just a simple fact!

    To those that say, “Oh, do you want to go back to the George W. Bush years?” No, remember W. was trying to be a ‘Compassionate’ Conservative. Under him, govt. spending and regulation increased. Not as much as with the current Pres., but it still increased.

    And to those that point out corporate welfare, yes, we should end that! Govt. should not be in the business of picking winners & losers!

  21. thing fish says - Posted: September 30, 2012

    How about wealth being redistributed through the war on drugs, prison-industrial complex and military-industrial complex?

  22. localgirl says - Posted: September 30, 2012

    So Islam is a cult rather than a religion? Does that make Christianity a cult also?
    And what charities to conservatives give to? Their white churches? Their own private schools and arts organizations. Their political causes? Or to organizations that help others unselfishly?
    The main reason white conservatives don’t want to re-elect Obama is because he’s black. It’s the usual racist hate and white supremacism.

  23. Parker says - Posted: September 30, 2012

    localgirl, now c’mon! So the only reason one can be opposed to Obama is if your racist? Be for Obama if you so choose. Be opposed to Republicans if you so choose. That’s your right as an American!

    But it’s the right of other Americans to be opposed to him! Because Obama is half-black every American has to blindly follow him? It’s not racist to be opposed to Obamacare, Solyndra and Trillion-dollar plus deficits! At the very least, it’s part of a healthy debate in our American Democracy!

  24. John says - Posted: September 30, 2012

    Localgirl, that is way off base. I support Obamacare (yes its a half measure, yes the uninsured should pay REAL penalties) so I am going to vote for him, but it has nothing to do with race.

  25. localgirl says - Posted: September 30, 2012

    Then why the birther controversy? And why are so many people led to believe Obama is Moslem when he has never been?
    The campaign against him is not based on honesty and real issues. It’s based on lies and racism.

  26. Parker says - Posted: September 30, 2012

    Many think Obama is Muslim because a big supporter, Madonna, went on some rant saying he was. Just as that was a silly, stupid comment on her part, others had some obsession where he was born.

    You know many, often a majority, have opposed Democrats in the past when their nominee was white! So it’s not a big deal if many oppose the Demcratic nominee if he’s half-black.

    Personally, while believing Obama was born in the US, don’t care as it’s stupid part of our Constitution. While Obama went to a whacked- out minister for many years, I believe his Christian faith. (Not that I really care.) But I, and others, have a real problem with his big expansion of govt., and the financial peril it puts us in. It is not racist to have that opinion!

  27. localgirl says - Posted: September 30, 2012

    The belief that he is Moslem predates Madonna’s comment by at least 4 years. It is a lie started by his opponents. The lies about whether he is American have not been experienced by white candidates.

  28. Parker says - Posted: September 30, 2012

    My point was Madonna made a stupid comment. (But she believes as an Obama supporter, I don’t, but she believes he’s not honest about his faith.) So what if a few others have made the same comments?

    I have black & Hispanic friends who are big Obama supporters. They’re not racist for supporting him and I’m not racist for opposing him. And Thomas Sowell is not an Uncle Tom for opposing Obama’s policies and people should cease their stupid comments about Mitt Romney’s (which is also Harry Reid’s) faith!

    In other words, people need to stop changing the subject at hand!

  29. thing fish says - Posted: September 30, 2012

    “Under him, govt. spending and regulation increased. Not as much as with the current Pres., but it still increased.”

    Bush tax cuts, unfunded wars, bail outs, PATRIOT Act, NSA, TSA.
    Obama’s fault.

    Why do you think the previous administration wasn’t a part of the GOP convention?
    They want you to forget who they work for.
    Corporate profits are doing pretty well right now. I believe records have been set. All blame, no credit. Neither blame nor credit is really logical, anyone who attempts either is full of it.

  30. thing fish says - Posted: October 1, 2012

    Here is some BS by Sowell:

    Summary: Makes excuses for GW and the chicken-hawks. 2000 dead US soldiers now.

    More BS, on same sex marriage.

    He’s for smaller government, except for those people.

    Just another quick search, on climate change, same right wing BS. All spin, no substance.
    Why help him publish this rubbish, is LTN just trying to increase controversy on their webpage and get more hits?

  31. Parker says - Posted: October 1, 2012

    Exactly thing fish! Under George W. spending & regulation increased and you sight some examples. His 200-300B deficits sort of legitimized the current $Trillion plus deficits and thus why he wasn’t part of GOP Convention!