Mike Hosking: Why redistributing wealth will never work

Author
Mike Hosking,
Publish Date
Thu, 23 Jan 2020, 5:23PM

Mike Hosking: Why redistributing wealth will never work

Author
Mike Hosking,
Publish Date
Thu, 23 Jan 2020, 5:23PM

Oxfam have done an excellent PR job at Davos reminding the world  how woefully unfair life is  and how we need a massive programme of wealth distribution.

They’re helped in their cause by an increasing number of billionaires who have such a large amount of money they literally don’t know what to do with it other than give it away.

There are 2153 billionaires in the world, and they have more wealth between them than 4.6 billion of the rest of us.

And here’s the clever bit: if everyone sat on their wealth piled up in $100 bills, most of the world would be sitting on the floor.

The middle class in a rich country would be sitting at the height of a chair, while the world’s two richest men would be sitting in space.

Puts it in a nice context, doesn’t it? But that’s about where the fun ends.

The reason these sort of socialists can make the sort of claims they do, is because the world is a very unfair place. In fact, there is another report worth reading, also out at Davos, that perhaps not surprisingly tells us a lot of your lot in life depends on where you were born.

If you are born here, you are lucky and you are lucky because you have opportunity, you have the chance to work hard to educate yourself and to succeed. If you’re born in Angola, you don’t.

And you don’t because you might like to read yet another story about a woman called Isabel dos Santos who is the centre of a lot of people’s attention given she’s Africa’s richest woman and got that wealth it is suggested by nefarious deals many of which are being investigated

In other words, if you’re born in large swathes of Africa or places like it, you’re stuffed because the place is run by crooks, and no amount of redistribution is going to fix that.

So once you taken out the numbers of people who have no hope through no fault of their own, you return to the Oxfam argument of redistribution.

Why? And to what extent?

Most people who have the serious money, one, earned it, and two, are only rich to an extent in theory.

The world is wash with debt, and a lot of wealth in companies is based on nothing more than faith. The companies may not make money, may never make money, but as long as other people with money, borrowed or otherwise, believe it’s possible it will make money, they keep you wealthy.

The last time the world had second thoughts about all this was the Global Financial Crisis of 2008, and don’t rule out something similar happening again soon. 

The premise of redistribution is based in part on laziness. Its free money, it’s a decision by whoever’s running a place, like a government, that at a certain level of wealth is to be decided by them, not you.

That your success and personal circumstances are their domain not yours . That of course happens at all levels of taxation.

But if we accept the wealthy are successful are productive and diligent and inventive and useful to society, then punishing them by making wealth a bad thing is a social experiment that will dent the will of those the planet needs the most - given they’re the ones that create the jobs and pay the bills.