DISTRIBUTION of WEALTH

© MMXXI V.1.0.0
by Morley Evans 

Socialists want to take away some of what "Capital" has and give it to "Labour" because it has less. "It isn't fair that some should have more," they whine. The government is used to do this through taxation. Bureaucrats keep some for themselves. Some funds are spent on such things as "public works" such as roads and sewers. Municipal workers are famously inefficient. For example, holes are dug by one worker with a shovel while four workers, leaning on shovels, watch. They may sometimes trade places, of course. That would be fair in the opinion of the one shovelling. Some taxes go to people who do nothing at all. Little, if anything, goes for the original purpose, i.e., giving more to "Labour". 

Taxation is stolen money. It matters not why it was stolen. Taxation is money that has been removed from economic calculus. How tax money is spent will distort the economy, as will legislation that affects production.

Typically, a business owner has invested capital in a plant designed to make products he hopes can be sold at a profit. Profit is something that will remain after all the bills are paid. The owner ("Capital") offers wages to someone who will operate the machinery. "Labour" accepts the offer after considering it against its options.  Wealth has already been distributed at that point. The owner hopes he has planned successfully. He is a gambler. The worker will have been paid whether or not anyone wants to buy the product. The owner will suffer 100% of the loss if he is wrong.