Almost exactly one month ago the Wall Street Journal ran a piece by William Easterly. The point of the article was that there is a
link between poverty, and economic and political freedom or (to be precise) the
lack of wealth and income leads to a lack of economic and political freedom. (“Singing About Fighting Poverty, Slightly
Off-Key,” Wall Street Journal,
10/02/14, A13.)
This, of course, is nothing more than Daniel Webster’s
dictum that “power naturally and necessarily follows property.” If you don’t have control over (ownership of)
the means of production, your income depends on those who do; you have no
economic freedom. If you do not have
economic freedom, you are going to use whatever political power you think you
have to secure that income — whether it means increases in government welfare
or raising private sector wages and benefits.
As Seneca the Elder said, “Slavery holds many men fast, but many more
hold fast to slavery.”
Thus we agree with Easterly that there is a link between
poverty, and economic and political freedom.
Nor are the various celebrities and politicians agitating for an end to
poverty incorrect in maintaining that poverty must be eliminated.
Economic and political freedom alone, however, will not end
poverty. On the other hand, simply
mandating an end to poverty by redistributing existing wealth from the haves to
the have-nots may be essential in the short term as an expedient, but
redistribution is not, and could never be a solution.
It’s a question of power. Yes, redistribute what is needed in the short
term to maintain people in some semblance of human dignity, but only an
aggressive program of expanded capital ownership, financed by monetizing future
increases in production, will solve the problem of poverty. Freedom will necessarily follow as people no
longer need to depend on the beneficence of others or the self-interested “generosity”
of politicians in coercing others to do their will to buy votes.
Instead of finding new and innovative ways to deprive
existing owners of their capital, or redistributing income from the productive
to the non-productive, then, governments should concentrate on removing
institutional barriers that inhibit or prevent people from gaining democratic
access to the means of acquiring and possessing capital. They would thereby empower people to take
care of themselves and their dependents through their own efforts via ownership
of both labor and capital.
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