California voters in November may well approve a 5% wealth tax on billionaires. This isn’t just another manifestation of wackiness in the once-Golden State but is part of global movement to impose massive taxes and economic controls on a worldwide basis. Many people in California are looking for scapegoats for an economy in which a handful of individuals do extremely well, while tens of millions are barely making progress in their incomes. Indeed, many households are falling behind.
The fact that the booming stock market helps everyone who has a 401(k), an IRA or are part of a pension plan gets overlooked when monthly bills come in or when would-be homebuyers are blocked because of high mortgage interest rates. Health costs keep rising, as do sticker prices for college.
Of course, experience repeatedly demonstrates that higher taxes destroy investment and lower the standard of living, especially for those with lower incomes. But what this movement in California, and other like drives, is ultimately about is power.
The far-left hates the idea of people doing entrepreneurial things and other activities without its permission. They want to micromanage how you live. This is why socialism everywhere impoverishes people and sucks the soul out of a society. But modern socialists are highly adept at exploiting grievances, manufacturing doomsday scenarios and writing perverted versions of history to discredit the pasts of the U.S. and other Western nations.
The latest manifestation of modern socialism’s assault on free-enterprise capitalism comes from French economist Thomas Picketty, who won global notoriety several years ago with a best-selling book purporting to show that the wealth of the world is being concentrated and will be controlled by a tiny elite. This idea that capitalism’s allegedly flawed internal dynamics will bring about its own implosion goes back to Karl Marx in the 1840s, when he predicted that the system would make workers so miserably poor that they’d rise up and overthrow it, replacing it with a socialist paradise. Since then, the world population has increased sevenfold and world per capita incomes have increased 25–fold. So much for Marx’s immiseration of the toiling masses.
While Picketty’s flawed mathematics and methodology provoked widespread controversy, his Marxian prophecy made him the toast of the left. Since then, there has been a global boom in the number of millionaires and billionaires. Even more people would be immensely better off if governments ceased policies of overtaxation, over regulation and currency instability.
Picketty has now come out with a scheme entitled “Global Justice Report: A Plan for Equality & Prosperity Within Planetary Boundaries.” It would allegedly deal with income inequality while saving the planet from climate change. The idea is that we’re consuming too much of the earth’s limited resources. Under Picketty’s crackpot program, in well-to-do countries per capita GDP would be restricted to $69,000. That’s $25,000 less than the U.S.’ $94,000.
Global GDP growth would be limited to under one-half of one percent; the U.S. one-ninth of one percent. The workweek would reduced to three days. Global consumption would be cut by one-third. Massive taxes on incomes and wealth would be enacted to help poorer countries. There would be a global central bank and global currency under the auspices of the UN, and a vast supranational bureaucracy would be created to oversee all of this.
Skeptics righty point out that countries wouldn’t countenance these particulars.
Picketty’s plan is a formula for communist-like tyrannies. It would impoverish the world, not save it. But Picketty’s premises are still accepted as truths in many quarters and will fuel future California-like nostrums.
Those premises, though, are false.
The earth doesn’t have a limited amount of natural resources that are being depleted. What makes a resource useful is human ingenuity and creativity. Oil, in and of itself, is glop; you can’t eat it or drink it. Human inventiveness turned that glop into an energy resource that has vastly enriched the world.
Thanks to the breakthroughs that emanate from the human mind, the amount of land needed for agriculture to feed the world is declining. If the rest of the world were as productive in agriculture as is the U.S., some 350 million acres of land would be freed up. That’s the equivalent of ten Iowas.
The real resource in the world is the human mind, which has no limits in inventiveness and creativity.