[lr4444lr]

Yes, but the goods it can buy on the next round of division still don't come from the spendthrift vagabond, and if his way of life is incentivized while the producers' is disincentivized by this redistribution, then that circulation won't continue so innocuously.

[audi100quattro]

...and if you incentivized the producers (which is also redistribution) while disincentivized the spendthrift you will not be left with much of a population to keep redistributing from. Ultimately this is bad for the producers, I am not sure why they don't realize it. Short-term thinking and greed, maybe?

Increasing inequality does in fact encourage deflation. Redistribution in forms of common services and education (for um.. jobs) is very necessary.

[lr4444lr]

I wouldn't disagree with you, but I think you're reading something into the quote which isn't there. The moral is that redistribution won't bring prosperity - not that it's good in some cases and bad in others. At the risk of adding more complexity to the parable than its pithiness merits for the sake of explanation (as I understand it): the spendthrift wholly consumes whatever he produces, and wants more. The producer generates a surplus. He may well consume an overall greater amount than the spendthrift, but he's still net positive. The "division" however, will only benefit the spendthrift, because producing is chosen for the sake of consumption, but consumption for its own sake.

I know it's still a gross oversimplification, but I think the general truth encoded in the parable should be appreciated for its own sake in general terms.

[marcosdumay]

> The moral is that redistribution won't bring prosperity

Except that it does - up to a certain point.

That's one of the few repeatable, tested, and validated economical principle from the XX century. Counter intuitive as it is, there's just no point denying it.

[StephenConnell]

If prosperity is "having wealth", then redistributing wealth does bring prosperity. But then you could also say that stealing brings prosperity. Could you not?

[Retra]

You could, but you should be aware that "stealing" is not an act per se, but a moral qualification of some other act. Namely, the redistribution of goods.

The only difference between theft and charity is your personal moral inflection.

[StephenConnell]

A couple more definitions from Google. Charity: voluntary giving of help, typically in the form of money, to those in need. Stealing: to take without permission

I am an advocate for charity. But redistribution through taxation feels like stealing to me.

[chc]

AFAIK places with high rates of crime don't tend to be very prosperous on average. The same is not true for places with systems that help the poor.

[anaolykarpov]

Like north Korea, venezuela and Vietnam?

[marcosdumay]

So, let me clarify.

Redistribution increases the total wealth, and it is not a small effect at all.

But only up to a certain point. Complete communism still completely sucks.

[iQuercus]

Source?

[marcosdumay]

Well, the first theory is by Keynes, it's on his book.

It's been revised and remodeled several hundreds of times, if you want to search Google Schoolar or something like that, look for "demand side" theories, or crisis of "aggregated demand". Also, if you search for NGDP, the biggest share of the papers will be about this.

There are many other terms that will lead to less results. It's a really widespread concept.

[tarikjn]

Mainstream yes, as in the majority believe so. But not without controversy. The Austrian School of economics is an opposing view which has brought just as many results of being the correct philosophy, and one may argue, is a simpler and more elegant approach of economics. And as one may say, clear ideas are easily expressed.

[hluska]

The IMF makes the same argument.

https://www.imf.org/external/pubs/ft/sdn/2015/sdn1513.pdf

[pessimizer]

You assume that the rich man was a producer. He actually just plays video games most days, and takes a trip to skydive in Bali twice a year.

[edanm]

As most rich men do? Quite a statement if so.

[naasking]

> and if his way of life is incentivized while the producers' is disincentivized by this redistribution

The idea that producers are only incentivized monetarily is false.

[jjoonathan]

> spendthrift vagabond

An obtuse mischaracterization of the poor; a more typical "sin" would be failure to hop over the ever-rising bar that denotes the ability to secure money by threatening to withhold labor.

Circulation goes both ways and it isn't the ability of producers to secure profits that seems to be most endangered at the moment.

[icebraining]

An obtuse mischaracterization of the poor

Why do you think it's a characterization of the poor at all?

Circulation goes both ways and it isn't the ability of producers to secure profits that seems to be most endangered at the moment.

The working poor are themselves producers.

[jjoonathan]

> Why do you think it's a characterization of the poor at all?

Because they're the ones who the type of policy we are discussing would actually be intended to benefit. Voicing that side of the argument through a "spendthrift vagabond" is disingenuous at best.

> The working poor are themselves producers.

I was using the term with my tongue firmly planted in my cheek, I thought it would be clear enough from context that I was referring to capital-holders.

[kamaal]

>>Because they're the ones who the type of policy we are discussing would actually be intended to benefit.

No. To be a spendthrift is a symptom of many problems. One of which means lack of respect for money or the effort required to earn it. Other wise one wouldn't be throwing it away.