Many people agree that something must be done, and
done now, about the growing wealth
and income gap. When you add other
problems, such as the mounting debt crises (government, student, and consumer),
the alleged “recovery” from the “Great Recession/Depression,” spreading
political instability, and a host of others, you end up with a seemingly
hopeless situation.
In response, many people and organizations
advocate a basic change in human nature, and distribution of the world’s goods
on the basis of need (pseudo charity), rather than on the relative value of
inputs to production (distributive justice).
This puts charity and justice into conflict, which is the last thing we
need.
In our opinion, there is no real problem per se with programs advocating
redistribution to address extreme material needs. We can agree with what is demanded, or (at
least) the spirit behind it. The problem
as we see it — and it is a serious one — is in the belief that redistribution
is somehow a solution to what appear
to be overwhelming problems, not allowed expedients to address a dire emergency
as a stopgap on the way to developing and implementing a solution.
As we see it, the world today is plagued with some
fundamental differences on basic concepts, especially the rights of life,
liberty, and property, the nature of the common good as institutional (not an
aggregate of individual goods), humanity’s nature as what Aristotle called “a
political animal,” the principles of economic justice, and social justice. We can where people are trying to go with the
demand for increased redistribution, and appreciate what they’re trying to do. The problem is
they’ve locked themselves into a labor-centric and past savings view of the
world, and somehow don’t see the importance of widespread capital ownership.
This is key, because Say’s Law of Markets is a
statement of the application of justice in the market. This “law” gives the fundamental principle of
participation in the economy: you can’t consume what is not produced.
There are, therefore, only two ways to consume as
a participant in the market (not as the object of charity, which is a separate
issue). Either you produce for your own
consumption, or you produce to trade with others to obtain what they produced
for your consumption. Again, this is the
functioning of the moral virtue of justice and an application of humanity’s
natural right to liberty (freedom of association/contract).
In our opinion, all the talk about “the logic of
gift” and “restoring the missing element to economics” by eliminating exchange
and distributing everything on the basis of need (“from each according to his
ability, to each according to his needs,” as Karl Marx put it in his Critique of the Gotha Program, 1875), are
efforts to restore the functioning of Say’s Law without taking into consideration the fact that both labor and
capital are productive.
The “gift” approach also implicitly rejects Say's Law based on justice. It ignores the fact that
the only way for Say’s Law to operate justly for the benefit of everyone is to
ensure that everyone has an equal opportunity and means to own and produce with
both labor and capital, not the equal opportunity to stand in line with your hand out.
Relying on charity or "gift" to run an economy and ignoring or rejecting justice is like trying to power your automobile by
hitching a horse to it, and ignoring the fact that an automobile was designed
to be powered by gasoline. Yes, it will
work for a while, perhaps even a long while, but it will never operate to your
or anyone else’s optimal advantage, or as efficiently as it was designed to
operate if you insist on using genuine horsepower in front of, instead of under
the hood.
It passes by most commentators on Say’s Law, but Jean-Baptiste
Say implied that if you want an economy to be in equilibrium, you must ensure
that whoever wants to consume must also produce “by means of their labor,
capital, and land.” We combine land and
other capital as “capital,” that is, the non-human factors of production, but
that’s not the point here.
This point is Say assumed that for his “law” to
function, everyone has to own, and own directly, what is productive. As technology (capital) advances and becomes
hyper-productive relative to human labor, it becomes essential that everyone own enough capital to produce a
sufficiency for consumption, either directly, or to exchange for what others
produce.
Viewing redistribution as the solution to the
world’s growing problems attempts to bypass fundamental principles of justice
and implement results directly. This
contradicts the laws and characteristics of social justice, the goal of which
is to reform our institutions to provide the environment within which people
can obtain desired results by their own efforts, not as an imposition from
above. The demand for redistribution as
the solution confuses what is allowed as an expedient in an emergency
(redistribution in many forms), with the solution: restructuring the social
order so that every child, woman, and man can become productive and meet his or
her own needs by his or her own efforts.
