All Commentary
Friday, June 11, 2010

From Abilities to Poverty

We have all heard the socialist phrase “From each according to his abilities, to each according to his needs.” Sadly, however, few people actually think through what it truly would mean in practice. In 1953, Leonard E. Read, in his “Victims of Social Leveling,” correctly showed it would mean suppressing creativity by coercion, resulting in negative consequences for everyone involved in the long run.

In order to provide for those in need the government must take from the productive within society. In the long run this is an unstable process, which will result in society becoming more equal but a lot poorer. The reasoning for this is simple: people respond to incentives. Both the person with the need and the person with the ability don’t stand to gain much from working for themselves; as one’s needs will be provided and working hard will only be someone else’s gain.

Most people in this country, it can be assumed, respect private property. Few would condone the theft of ones private property or creative abilities. But this is only on the individual level. What Read, in this article, calls the double stand of morality is still alive and well. When it comes to the use of state power few have a problem taking from others for redistribution. We may not live in a pure socialist society but many of the ideas still run rampant. On many issues, such as health care (just to name one), people have no problem taking from some for the needs of others. Economist Bryan Caplan has even shown that liberty is more popular at the abstract level than it is for specific policies and that policies are more libertarian than what the public actually wants!

What the public fails to realize is that there is no difference between the belief in the authoritarianism of the majority and that of Stalin. Redistribution, even for those in need, requires constant coercion and will produce a type of social cooperation where few, if anyone, benefits in the long run. Capitalism may result in inequality but it also results in more wealth and prosperity for all because it is a system that allows individuals to act creatively unrestrained and uninhibited. Under this system an individual can only enrich themselves by making others better off.

Download Leonard E. Read’s “Victims of Social Leveling” here.

  • Nicholas Snow is a Visiting Assistant Professor at Kenyon College in the Department of Economics, and previously a Senior Lecturer at The Ohio State University Economics Department. His research focuses on the political economy of prohibition.