I will argue that redistribution of wealth is ineffective and a moribund theory that has failed to solve global poverty and needs to be replaced by a new and effective principle. Mostly the theory has been attacked but attackers have failed to give a solution to the problem in question. I am going to introduce a principle that can replace effectively the theory of wealth redistribution that “states that there is unlimited (NOT INFINITE) amount of wealth that can be created using scarce resources in a given time as long as one factor of production is met.”
For the new theory to be true there are assumptions that needs to be made:
1. That wealth redistribution can be successful if and only if the world has reached a plateau of wealth creation hence poor people can only rely on the wealthy to improve their life standards.
2. There is scarce resources that can support worlds population by producing unlimited amount of wealth.
3. Historically, human being (source of labour) which contributes to ⅓ of factors of production has been inventing and innovating new technology to support the worlds population and will forever be repeating the same.
4. There is no limit or maximum amount of wealth that can be produced over a given time
The desirability of wealth redistribution has been debated for so long on bases of ethics and economic grounds. The debates however have failed to give an hypothesis and the new theory I am building is going to give a rationale, objective, means and policy effectiveness on reaching a tentative solution to the global poverty.
Based on Christian morals as its ground of effectiveness, my theory goes above all the hurdles of ethics that has been tied to wealth redistribution such as dishonesty, corruption, deception, dirty politics exeterra, and focuses on both individual person as well as global economic ways that can put poverty to a halt. In case of any external attacks from non theistic worldview holders, the idea is resting upon ethical and moral standards which are accepted across all disciplines and in all worldviews. There is no given time and way that any of the above listed vices can be applauded unless our faculties have been corrupted.
“We may define wealth of a nation as the total amount of economically relevant public and private assets including physical (natural), financial, human, and social capital.” In this definition, all the three factors of production are listed and that is what the new theory puts into consideration when it talks of wealth redistribution. Factors of Production.
“Creation of wealth include the production of public and private assets which indicate important but limited role of the market and price mechanism. ” “Wealth creation includes both spiritual and material side, and goes beyond a mere acquisition of accumulation of wealth.” And that is where faith and hope comes in to create positive change in lives of the people. Wealth redistribution in this stage should also be supported by morals and economic ethics but the attempt if any has been futile.
In 1848, Karl Marx wrote, “From each according to his ability, To each according to his need.” This can be said to be the foundation of wealth redistribution. In any new economic idea, it must be given at least ten years to see its fruits. From 1848 to date means that wealth redistribution has stayed with us for almost 165 years. If it was an effective and productive principle then equality in terms of wealth redistribution could have been achieved. There is nothing beneficial in this theory apart from appealing to authority of its founder Karl Marx. It is until we do an overhaul of this theory and replace it with a more accepted by all principle that poverty in the world can be addressed. However it is better to first look at some of the reasons why wealth redistribution was started.
““Income redistribution.” reviews the argument that voters support the use of government as the principal support agent of income and wealth redistribution in order to internalize free riding externalities that impact adversely on the effectiveness of private charity.” This means that politicians hold the mandate to share and distribute equally income from the wealthy to the poor. The poor in return have all their hopes in government that their dream of ending poverty will one day come true.
““Helping the poor.” calls attention to the handicapped faced by most poor individuals in the marketplace for income transfers.” This is brought about by lack of what it takes to elevate oneself to higher economic ranks and that is why the theory was formed to help them climb the ladder of wealth from their poverty.
All the above reasons are for a greater good of improving life standards and drawing equality though people in power have embraced it to appeal to peoples emotions yet there are no fruits that has been seen ever since the idea was started 165 years ago. This therefore begs the question and shifts the burden of proof to leaders who embrace the idea but change nothing with it.
It is unfortunate that economics and politics work together even though in my opinion both should work independently. The fact that they work together has raised ethical and moral questions as one party uses the others platform to elevate themselves, a fact that can be said to usurp the ethics of the other. These two can be beneficial to all if they work in line trying to figure out what suits the people and what needs to be addressed first and all the hypotheses implemented.
It can therefore be stated that due to lack of this ethical standards of operations, leaders who suggest this idea benefit more using the idea of wealth redistribution than the final people on the grassroots who need help the most. People’s needs are directly proportional to leaders benefiting out of the idea of wealth redistribution. The higher the peoples needs, the greater the chances that a leader will use wealth redistribution to campaign and the higher the chances of them benefiting out of it than it needs to benefit the poor.
What we need to understand is that there is a dichotomy in expectation under wealth redistribution policy. One party is enthusiastically waiting for a change lets call this party “the voters interests” while the other party be “power interest.” This is also where deception comes in as the power interested team deceive voters of a better future that they know they cannot implement. Once voted and in power, the leader tends to implement less of their blue prints making voters be the victims of deception.
“In the real world, voters frequently are much more interested in one issue than the other: housing, taxation, freedom, overseas aid, etc.” Due to this, politicians always move to consider minority and satisfy their needs instead of a greater mass due to complexity of the challenges and demands of the public.
In the power interets party, every step taken is either in hesitation of the future expectations or total delay of implementations of the manifesto for a longer term in office. “This analysis of the politicians tactics indicates simply that he is attempting to be re-elected to office, not that he is attempting to maximize the public interest.” To paraphrase from Martin Luther King, “justice delayed is justice denied,” the poor or the have-nots are being denied their rights and justice because at first wealth redistribution is not their idea. To fail to deliver a promise is to act immorally and unethically especially if lives can be claimed because of poverty yet nobody is willing to act faithfully as agreed.
Poverty cannot just leave but it must be fought to the end. It is logical to say that wealth redistribution has failed to satisfy its needs or reasons why it was started therefore a better proactive theory needs to replace it or else poverty will continue to live with us forever. To fight poverty, new entrepreneurial ideas must be put in place and sustainability must be put in the forefront in combating poverty. It therefore follows to me that the wealth redistribution has failed the ethics tests and cannot be used in ethical decision making towards ending poverty.
NEW THEORY
From this point onward, I am going to give strictly my views on how to fight poverty using the assumptions that I came up with which are practical and I expect majority if not all to agree with them. “there is unlimited amount of wealth that can be created using scarce resources as long as one factor of production is met.”With this, we do not need wealth redistribution since everybody will be empowered to create their own wealth.
Wealth redistribution can be successful if and only if the world has reached a plateau of wealth creation hence poor people can only rely on the wealthy to improve their life standards. We can all agree that the world has not reach its maximum or stagnation point of wealth creation. This is due to new resource fountains that are being discovered day by day. In this case we can include mineral mining and precious stones lying under the worlds bedrocks both discovered and undiscovered.
To generally classify all minerals as raw materials for production, we can easily say that the available raw material in every sector is enough to create employment to current population of the world that is estimated to be “6.9737 Billion people.” If we include other activities such as fishing farming and rendered services that are paying then we do not have any right to talk of poverty.
Every docket listed above can generate unlimited amount of both public and private wealth to cater for the world population without hitting a total plateau. Therefore to talk of wealth redistribution, we need to first hit the plateau where no wealth can be produced whatsoever and the only way to acquire wealth is if the rich or haves share equally what they have with the have-nots. So long as the have-nots can be empowered to generate their own wealth publicly or privately then the new principle of wealth generation can be applauded.
There is scarce resources that can support worlds population by producing unlimited amount of wealth. Economic wise, it is wise to always talk of resources as scarce which I fully agree with in this new theory being developed. Given the scarcity of these resources then, it is advisable to maximize the utility of every single resource at our disposal. To gain the full utility per resource, we can always think of ways to recycle every single by product that we get from it and form a chain of production of different products from the original raw material. If done in more than one stage we can be assured of producing unlimited amount of wealth both public and privately owned.
If we look at all the resources that are put into daily use, recycle all the wastes and out of all that, we get at least a half of its byproduct that can be processed to make something totally new, we can double the total amount of wealth produced daily if we get more than currently employed people to work and if we also do recycling of products that can make unlimited amount of wealth. Some people may argue that this will increase the overhead cost but to look at it literally; World bank defines extreme poverty as “ living on less than US$1.25 (PPP) per day,” If people are empowered to work in a day, either in their own businesses or farms, they can make more than a dollar a day and if they are hired by companies and other businesses they can earn more than that. Canadian minimum wage is roughly C $1 and other countries might have it lower than that. Relatively speaking therefore, with all the available resources that are their on earth, nobody should be living on less than a dollar a day.
Just as other resources are scarce, human labour also needs to be treated equally and fairly as a valued resource therefore nobody should be exploited. The minimum wage rule must be maintained to give people on the lower parts of economic pyramid a chance to grow. Even though minimum wage varies from one country to the other, it is something that has been economically tested that it can support a living and alleviate poverty.
Historically, human being (source of labour) which contributes to 1/4 of factors of production has been inventing and innovating new technology to support the worlds population and will forever be repeating the same. If human labour has and will remain developing in terms of skills, competency, accuracy and efficiency, human beings can produce unlimited amount of wealth with the scarce resources.
Since there are only four factors of production, that is land, capital, labour and entrepreneurship, a healthy human being contributes already to 1/4 of the factor of production which can also be used as a scale to measure wealth. With a 1/4 of wealth at hand, if these people are empowered, they can easily get capital and be wealth creators which automatically shifts their position from poor to wealthy. Human labour of all sorts contributes as a 1/4 of factors of production either skilled or unskilled so long as their effort counts towards the amount of capital put for an entrepreneurship. Under this, we can conclude that all are wealthy with existence of any human being who is spiritually, physically and mentally stable, since all they need to do is to recreate or multiply the wealth they already have.
Incase one is wondering why spirituality is counted as a key factor to getting wealthy, it is because we all have worldviews. None of these worldviews can tolerate poverty and that is why alms and charities are given by all. In my view as a Christian, it is useless to create wealth only to squander it on things that are of no value.
There is no limit or maximum amount of wealth that can be produced over a given time. This premise that support my new theory is based on infinite wealth creation at a given time. Even though goals can be set on how much or how many things to produce or have or attain, this is not a limit that cannot be crossed. An example is a company that raises its sales target yearly and some sells men go beyond the target. If the so called poor people know about this, then they can work and create more wealth. Since this new theory of wealth generation is guided by moral and work ethics, it respects and obeys rights of all employees therefore does not give chances of exploitation of human labour.
Governments do not create wealth, wealth is created by private sector and corporate businesses, therefore if governments talk of wealth redistribution then they should elaborate further how wealth redistribution is effective but as far as I know, nobody wealthy is willing to get his wealth redistributed by government unwillingly to the power. Can governments then teach the public on better and efficient ways of wealth creation?
By Josh Okello
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