I have great respect for the humility displayed by Pope Francis, but in his latest call for the “legitimate” redistribution of wealth, he has it backward. Instead of taking more money from those who have earned it, he should advocate for creating new wealth.
If the money I have earned, saved, invested and spent responsibly to care for myself and my family is confiscated by the state (and goodness knows the state already takes a lot of it), who is going to care for us should I retire or become incapacitated? I can’t live on Social Security alone. What will happen to the charities to which I now contribute? Will the government give them an equivalent amount? Where will that money come from?
Time magazine reports that, according to the best guess of bankers, Vatican wealth is $10 billion to $15 billion. If Pope Francis is serious about redistribution, he should lead by example and sell all Vatican property, including its valuable artwork, empty its bank and give the money to the Italian government, or to the United Nations.
Charity and philanthropy are better than wealth redistribution because they create a bond between the giver and the receiver, unlike an anonymous government check. These donations also establish an expectation that the receiver has a moral responsibility to use the money or services wisely and be accountable to the giver.
What happens when the giver runs out of money? Will the receiver invest the money he has already been given to build wealth for himself, or will he squander it and eventually end up back where he started? And if the previously poor receiver becomes wealthy, should he then be expected to give his money to the state and resume his previous condition of poverty?
Redistribution, or whatever name you give the practice, is socialism. Socialism often leads to mutually shared poverty.
The United States has tried redistribution in Franklin Roosevelt’s New Deal and Lyndon Johnson’s war on poverty. It doesn’t work. In fact, according to a 2014 report by the Council of Economic Advisers, the percentage of the population in poverty declined just 16 percent between 1967 and 2012, and in 2012 “there were 49.7 million Americans grappling with the economic and social hardships of living below the poverty line, including 13.4 million children.”
Redistributing America’s poor children from their failing public schools to better ones would improve their long-term prospects, but liberal politicians won’t let them escape for fear of losing political contributions from teachers’ unions.
George Gilder, author of the best seller “Wealth and Poverty,” has observed: “As Marxist despots and tribal socialists from Cuba to Greece have discovered to their huge disappointment, governments can neither create wealth nor effectively redistribute it, they can only expropriate it and watch it dissipate. Under capitalism, wealth is less a stock of goods than a flow of ideas and information, the defining characteristic of which is surprise.”
In a speech to the heads of major United Nations agencies meeting in Rome last week, Pope Francis also said about wealth distribution: “Specifically, this involves challenging all forms of injustices and resisting the economy of exclusion, the throwaway culture and the culture of death which nowadays sadly risk becoming passively accepted.”
He’s right about that, but removing barriers to the creation of wealth is a better path to elevating the poor than penalizing the wealthy through asset confiscation.