There is a buzz in India nowadays regarding wealth redistribution. When we thought that with communists redistributing wealth in countless countries and the countries ending bankrupt, in total disaster, during last hundred years; the fraud called wealth redistribution has been finally given up, even by the communists, it has come back as the solution of current problems of poverty and inequality.
And so, in India also, this fraud has been brought up again, both as the panacea to solve India’s poverty problem, and a sure shot plank to win elections. But as we shall see in the following paragraphs, wealth redistribution will do to India exactly what it has done to each of the countries where it has been tried: it will utterly destroy Indian economy, perhaps irreparably. Not only the rich will become poor, the poor will end up utterly poor, much poorer than they are now. Unemployment will skyrocket, and the infrastructure and other services like hospitals, public transportation and schools will deteriorate into nothingness as there will be no money with the governments to maintain them, with their tax earnings collapsing.
The concept of wealth redistribution originates from the miscomprehension of the nature of wealth by Marx, and by every leftist after him. Marx thought that wealth consists in land, buildings and machineries in the factory. Therefore, to rearrange wealth in the society and make everybody equal all that is needed is seizing of these things and redistributing them “equally”.
But in reality, there is no wealth in the world. Not even land. Entrepreneurs rearrange the natural matter to better fulfil the needs of men, and while they are at it, they employ men who in turn purchase the matter so rearranged making the entrepreneurs “rich”. Even the land in nature is not farming land, men make it so by working on it. If even the already cultivated land is seized and given to those who have no farming skills, the land goes back to being fallow, for example, in South Africa and Zimbabwe. The land in India was “redistributed” when zamindari was abolished but was not actually redistributed. It was already with those who were cultivating it for many thousands of years. With successive waves of invaders, only the “ownership” of land was notionally changing with cultivators remaining same all through. So when zamindari was abolished in India, the cultivators went from being contract farmers to owner-cultivators. Whereas in South Africa and Zimbabwe the land of the White settlers was seized and given to not the cultivators (there weren’t any, as farms there were big mechanized enterprises) but to the cronies of the rulers, and they have destroyed farming in these countries.
But it is even more complicated in case of every other means of production: mines, factories, and trade. These assets have recently appeared, after industrialization. Those who work them have to learn those skills anew with every generation. Entrepreneur not only arranges these means of production, he also trains the “workers” he hires to operate them. And things are not simple even after that. The workers producing the goods by working on the means of production does not mean the products will actually earn profit. The factory may actually incur loss and all the goods produced by the workers may turn to junk. Therefore, the factory being seized and turned over to the workers may actually push the workers to unemployment and ruination. And it so happens actually. Whenever factories have been seized from the industrialists, they have always died, and workers have been ruined utterly. Because the factories are never the machinery and workers but the skills of the entrepreneurs. As the factory and entrepreneur are separated, the factory dies.
What about the “wealth”, of the rich, one may ask? All those billions of Ambani and Adani? Actually, even that wealth doesn’t exist. The billions of Ambani and Adani, and of every rich you hear about, are actually just the valuation of their assets by the masses. The sum of the prices of shares of their companies arrived at by the investors. As the investors realize that Ambani and Adani are going to lose their ventures to the government for redistribution, the share prices crash and become zero. The wealth just disappears, and the government is left with worthless papers and the factories they can’t run. Without Ambani, even his famous residence, Antilla, will not only be worthless, but a huge cost. Those poor who will be housed in it won’t be able to afford even its electricity bill, what to say of other maintenance costs.
From the above, it should be clear to the reader that the “wealth redistribution” is a delusional fraud. The poor not only do not get any wealth, they also lose their jobs and demands for their produce and skills. The economy is destroyed and hunger comes back. The middle class goes to poverty, the rich flee to other countries, taking with them their entrepreneurial skills. The despair that spreads in the society soon turns into violence, making even path back to recovery very difficult.
Both the wealth redistributors and the masses who fall for their claims do not comprehend that the only wealth in the world is man’s mind, and it cannot be redistributed. However, if man is left free to use his mind, and his safety and safety of his products and liberty to trade them with his fellow men are assured, we all become richer and richer with time.
Things for India are looking up after a thousand years of darkness. If voters fall for the chimera of wealth redistribution, India will sink again, this time perhaps forever.