[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.

[Retra]

Redistribution through taxation feels like charity to me. Here's to kicker: why should anybody care about your feelings if they are wrong? Or if they only serve yourself?

If there's a good reason to think that redistributing wealth will improve people's ability to mitigate risk and make good decisions, then your feeling would really be irrational and should be ignored.

[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?

[sanoli]

I counter your three with Denmark, Sweden and Norway. Now for the next round you hit me with three countries that have better standards of living than mine and that don't help the poor. 5 bucks a round?

[sgt101]

I suppose you are pointing out that these are socialist countries and that poor people in them suffer a lot. Please correct me if I am wrong.

I think that they aren't really socialist countries, I would point to places like Sweden and France as closer to actual socialism than North Korea, which is really a Fascist dictatorship explicitly modelled on pre-second world war Japan.

Vietnam is an odd one out here because having suffered a total catastrophe in the years running up to 1975 (as in the complete physical destruction of the state, mechanisms of production and the labour force via being killed in large numbers) the Vietnamese state has made huge progress to become relatively prosperous. There is a lot to be admired in terms of economic gain, although not much to be admired about freedom and safety for those with contrary views.

[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