Musk is just the latest target of envy-driven wealth redistribution
Envy is in constant search of the next villain to use to justify terrible public policy.
Last week, the envious were delivered their latest target when Elon Musk became a trillionaire by virtue of his company, SpaceX, going public. Musk’s trillionaire status is not because he has a trillion dollars stashed in his bank account or stuffed under his mattresses but because of his ownership stake in his companies.
Nevertheless, left-wing politicians and pundits publicly fantasized about what could supposedly be accomplished by seizing part of Musk’s wealth.
For instance, California Democratic Congressman Ro Khanna took to X (which, ironically, is owned by Musk) to provide one such “what if” scenario:
The point here is not to double-check Khanna’s math but rather to address the ramifications of large-scale, envy-driven government redistribution schemes.
Let’s use a thought experiment. Say folks like Khanna and Bernie Sanders got their way. A law was passed today empowering the government to seize all the wealth of Musk and every billionaire in America. This wealth would then be distributed in a manner so that everyone in the country was in possession of the same amount of wealth.
Full wealth equality achieved. After all, if wealth inequality is “the moral failure of our time,” it would be immoral to allow any differences in wealth, right?
But what would happen next?
Immediately, differences in wealth will begin to reappear. Trade and exchange will occur on a grand scale, and those more skilled at entrepreneurial endeavors and providing goods or services at a price consumers are willing to pay will soon acquire more wealth than others.
Take one simple example. Say LeBron James plays a basketball game in front of 20,000 fans who willingly spent $50 per ticket. No exploitation or coercion was involved, but James will be $1 million wealthier and those fans will be $50 poorer — at least on paper.
People like Sanders and Khanna will be outraged. Look at the inequality!
But what really just happened? People willingly exchanged $50 for a basketball ticket because they valued the enjoyment they expected to receive from the game more than they valued that $50. Nobody was made worse off, yet major wealth differences emerged.
Now consider such exchanges taking place economy-wide, with millions of consumers willingly buying goods and services from a much smaller number of entrepreneurs willing and able to provide them at a price consumers are willing to pay. Immediately, new patterns of wealth differences would emerge, likely very closely resembling the patterns that had been established before Khanna and Sanders’ wish was granted.
What to do now?
If equality of wealth were to be maintained, then the government would once again have to step in and forcibly take wealth from those with more and redistribute it so that everyone once again had the same amount.
How could this be sustainable? Once the entrepreneurs recognized they would have their wealth confiscated and end up with the same amount as everyone else, more and more would stop expending time, risk, and effort to provide the goods and services we rely on.
The result would be empty shelves, productive tools and machinery not being replaced as they wear out, and little to no innovation in technology or medical care, just to name a few consequences. Society would be impoverished, as the amount of wealth to be distributed would fall below subsistence levels for many.
Achieving equality of wealth necessarily involves constant punishment of and confiscation from those most capable of creating wealth that benefits all of society.
As 19th century Irish historian and politician William Lecky wrote in his book “Democracy and Liberty,”: “Equality is the idol of democracy, but, with the infinitely various capacities and energies of man, this can only be attained by a constant, systematic, stringent repression of their natural development.”
Here critics may object that Khanna and Sanders don’t want to confiscate all the billionaires’ wealth, but just a small percentage of it.
We of course know that they wouldn’t stop at 5%. The amount raised by a relatively small wealth tax would not be enough to satisfy the insatiable appetite politicians have for other people’s money.
Besides, if wealth inequality were as immoral as they say, how could any amount be acceptable in their eyes? Have you ever heard Bernie Sanders or anyone of his ilk specify how much inequality would be OK?
The attempt to achieve equality of income or wealth would need to involve a complete government takeover of the economy and all of its resources, including complete control of its people.
Envy should not be an organizing principle of society, and government efforts to enforce wealth equality are a mortal threat to a free society.
“Musk is just the latest target of envy-driven wealth redistribution” was originally published on www.carolinajournal.com.
