And they\’re lying about the wealth distribution again

Committing Worstall\’s Fallacy even:

Take a look at the astonishing chart of property wealth published by the New Economics Foundation and you get an inkling of why attempts to challenge the concentration of private property are denounced as fascism. The graph, using government statistics, suggests that the average property wealth of the top 1% of households is £15m. \”The 1% are worth more than the bottom 99% put together.\” By focusing on income rather than property we have gravely underestimated the extent of inequality.

That\’s Monbiot, who links to this from NEF. Which is based upon this from ONS.

And I\’m afraid it\’s wrong. Simply, just wrong.

In 2008/10, aggregate total wealth (including private pension wealth but excluding state pension
wealth) of all private households in Great Britain was £10.3 trillion.

For what this is is a measure of wealth before we do all the things that change the distribution of wealth. For example, the state pension pays out £5k a year or so. This is an inflation proofed annuity. As such it has a capital value of around £100k (pay £100k for an annuity you\’ll get about £5k a year inflation proofed).

Thus every OAP at age 65 (umm, 66 now?) has wealth of £100k.

Similarly, a social housing tenancy is a form of property wealth. You get to inhabit a building, for life (some are even inheritable) at below market prices. Yes, this is a form of wealth.

We can go further: by dint of being no more than a citizen you get free health care, free education for the kiddies, you\’ve the whole welfare state backing you up as well. This is wealth. This is why we do these things: we think that they make both individuals and society richer. You know, wealthier.

Absent mental or drug problems (and even then, that\’s falling through the cracks, not by design) it\’s impossible for you to have a standard of living below some £10k* a year as a UK citizen. Which makes you fucking wealthy.

Thus committing the sin of Worstall\’s Fallacy. Measuring something without looking at the things we already do to change what is being measured.

*We can argue about whether it\’s £5k, £12k, but it most certainly ain\’t £0k.

53 comments on “And they\’re lying about the wealth distribution again

  1. Problem with the Leftards Tim is that there are more of them, and they yak and yak and yak endlessly to each other, mostly inaccurately, mostly based on shallow emotional reasoning, and mostly with no sense whatsoever. Facts don’t matter to them when the facts don’t fit their evil equality agenda.

  2. Mr W… I reckon that you’re being a bit pessimistic with your pension “fund” valuation. Buying an inflation-proofed (at RPI anyway) annuitiy for 100,000 quid yields about 3,500 pa according to Hargreaves Lansdowne*s “best buy” table this morning.

    Thus, a 5K inflation-proofed (maybe, this is in the hands of the government after all) pension is “worth” notionally some 142K.

    We’re all rich I tell you, rich!!

  3. FF: ideologues of all hues, including some rightist commentators on this forum, decide what they believe in first and look for factoids to support their views second.

    You, for example, see some inherent evil in the very notion of equality. Whereas a fact-based economist sees equality of wealth as intrinsically desirable for the efficient allocation of resources, albeit while wanting to balance that against possible adverse consequences of attempting to achieve equality.

  4. PaulB: “a fact-based economist sees equality of wealth as intrinsically desirable for the efficient allocation of resources”

    I hope I’d qualify for the label of “fact-based (amateur) economist”, but I’m not sure I agree with that.

    Say were were, somehow, able to agree a way of equitably dividing all the wealth of the Earth. There are some activities (possibly speculative and/or risky, but with the possibility of fantastic gains for all), however, that would require more than – maybe even *much* more than – one person’s share. How would we, as a society, organise such that that activity was affordable? The obvious democratic ways (voluntary markets, consensus ) may be inadequate or too slow. Maybe some kinds of valuable activity do require immensely *concentrated* amounts of wealth, all under the control of a single individual? (I’m thinking of things like semiconductor factories, nuclear power stations, genome sequencing and the like)

  5. I’m not sure that equality of wealth is intrinsically desirable for efficient allocation of resources. In a limited period model with heterogenous but random abilities this would be desirable. In a continuous time model with heterogenous abilities and some heritability of ability, a reset to equality of wealth might be sub-optimal, although some redistribution would be desirable to ensure efficiency.

    For the non-economists, the point is that giving poor people wealth so that they can get a decent education, start businesses, get healthcare is optimal since they contribute more as a result. The reason why there are problems is that by redsitrbuting wealth it reduces incentives for people to work (both the poor/rich and able/less able) and thus efficiency.

    Do we redistribute enough? Difficult to say. Do we redistribute a lot more than the leftards claim. Yes.

  6. Alex B,

    the market solution for semiconductor factories etc is the limited liability corporation. Many little investors chip in a bit of money.

    Where things have public good elements – then we have the State.

    The issue with redistributing wealth is that say people build the semiconductor factory – and become rich. How much of that should be redistributed in the next period? Some, all, none?

  7. Can someone help me out here? My guess is that a substantial part of the imbalance in wealth is age-related. You wouldn’t really expect anyone under, say, 30, to have any significant net wealth at all, what with mortgages, student debt etc.

    Is there any way to strip that effect out? I don’t think you can just take out the young, as a very few will have inherited, and they’re the kind of people Monbiot would be complaining about.

  8. A very nice try by TW to obscure the fact that he agrees with George Monbiot that we should have a Land Value Tax to stop too much money going into landed property.He finesses the point that people pay taxes for health and education systems to be run by the state (because they are cheaper that way : housing, run by the private sector is an absolute, unmitigated disaster).Similarly the State pension.Whereas ever rising house prices are a form of private income (thats how it used to be taxed under Schedule A pre 1963 when we had flat house prices) where the value is created from increasing land values drummed up by the generality of the public which Monbiot argues correctly and which TW tactfully glosses over.It must be very difficult being a land taxer and a staunch supporter of the modern ASI which ignores Adam Smith being a founder of the land tax movement.( Trades Description Act?)

  9. Luke

    Yes, I always complain about these wealth distribution charts failing to take account of age. As a rough rule of thumb the typical UK person doesn’t begin to have any net wealth until mid 30s (student loans, credit card loans, negative equity).

    I also question the actual chart of housing wealth itself. It too is skewed by the fact that a relatively small number of very rich foreigners own stupidly expensive properties (which they sell to each other).

    It’s certainly debatable whether the likes of Roman Abramovitch owning a £150m London house is really representative of wealth inequality within UK citizens.

  10. PaulB, it’s not the case that *anyone* thinks there is any “inherent evil in the very notion of equality”.

    What a lot of people do think is that equality is desirable but impossible, and that a lot of the policies written to produce equality end up having adverse, and often diametrically opposite, effects (while the people who write the policy suffer nothing as a result).

    Personally, I’m all in favour of equality of outcome, if it could ever be achieved, but we’d need to find a way of achieving equality of input first.

    This is the arrogance of the left – both to think that they own the concept of concern, which they do not, and that they alone know the way to fix things, which is by extracting money from other people to spend as they see fit.

    Given that very few of them have ever actually run anything which did not rely on that forced extraction of money from other people, it’s slightly breathtaking.

    There’s a left-wing guy I know, a grown man, with his own Twitter feed, in which he informs the world of his opinions.

    Under his description is the legend ‘Despises inequality’.

    So – what inequality?

    He doesn’t despise the inequality which allows him to live in a beautiful village in an AONB.

    He doesn’t despise the inequality of having an index-linked public sector pension which allowed him to retire at 50-odd, when the people paying the taxes that guarantee the pension often have very little.

    He just likes to fire off little tweets about news stories that have caught his eye, while ladling the rich sauce of self-satisfaction all over himself.

    It’s just more of the collossal moral grandstanding which we see all the time from the liars and hypocrites of the left, and intelligent people like you need to wise up quickly, and start actually thinking if the way things are drifting in the UK is the way you want them to drift for you and your family, because people like Richard Murphy are getting serious and possibly unstoppable traction, and for the first time in a very long time the soil is getting made ready for some very ugly fruit indeed.

  11. I think it is possible that the NEF have got the numbers wrong. They say the top 1% of households (250,000?) have each on average

  12. I think it is possible that the NEF have got the numbers wrong. They say the top 1% of households (250,000?) have each on average

  13. Don’t use a GBP sign, Pete – comments won’t allow it.

    Also, nice to hear NEF (introduced without any ‘left-leaning think tank’ qualifier by Humphrys) as the only interviewee apart from some chap from Iceland on the Today prog today.

  14. OK – try again. NEF say 1% of households (250,000?) have assets of 15 millions pounds each on average with a total of 1.3 trillion pounds. Divide 1.3 trillion pounds by 250,000 and the answer is 5.2 million. Knight Frank say in their latest report that there are about 190,000 HNWI worldwide with assets worth over 30 million dollars. It seems very unlikely that most of them live in the UK. Just a thought.

  15. ” This is an inflation proofed annuity.”


    Only until the State moves the goalposts again.

    But that couldn’t possibly happen, could it – they wouldn’t be so unprincipled.

  16. ‘He finesses the point that people pay taxes for health and education systems to be run by the state (because they are cheaper that way : housing, run by the private sector is an absolute, unmitigated disaster).’

    Every single thing the state does can be provided by the market at a lower price, higher quality, and with greater supply and variety.

    There are no exceptions, the economics and incentives aren’t suddenly reversed depending on your personal bugbears.

  17. Interested: Thanks for the advice. I don’t pretend to know what everyone thinks, but when the commentator I was replying to wrote of an “evil equality agenda” I took him at his word.

    There are two economic realities which both left and right should acknowledge. One is that the production of desirable goods is promoted by allowing people to make money by producing stuff other people want. Many on the left make the mistake of ignoring this. The other is that we can do more for human happiness by increasing the wealth of poor people than by increasing the wealth of rich people, because diminishing returns reduce the value to themselves of additional consumption by rich people. Many on the right overlook this, or even somehow persuade themselves that inequality of wealth is desirable as an end in itself.

  18. Okun’s equality and efficiency –

    Yet much of the redistribution fails – usually because of producer capture. The English state education system is a shambles, primarily made so by the left and the numpties of the teaching unions. We find rich lefties like Baroness Uddin living in social housing, while owning a flat in Maidstone and a mansion in bangladesh.

    The right wouldnt be so upset if the redistribution achieved more equality rather than enriching those meant to be doing the redistribution. (Of course the left wouldnt be so upset if it werent for the bankers who destroy their institutions walking off with bonuses intact…)

    The State is overmighty and we would be better off with vouchers for education and no social housing. I’m in favour of redistribution – a fair slice of equity, and more efficiency. More efficiency would mean no more mad left wing teaching unions, no more money going to civil service unions to be recycled to Labour. I’d be in favour of equity that saw great landed (or rich monied) estates being reduced dramatically in five generations – assuming no value is added. (Say a flat 15% tax).

  19. @ Pete,
    NEF are simply lying: they link to a ONS publication which shows that the top 1% have 11.5% of property wealth (and 31% living in rented property have no property wealth) and claim that it has 50% of property wealth.

  20. PaulB, you’re welcome. I’m here to school you any day of the week – just ask.

    I construe Frank Fisher’s remark to mean that he believes that it is the *agenda* which is ‘evil’, not the equality.

    If this is what he meant, then your comment was (I think you would accept) unfair.

    I think it is the most sensible construction, and if I’m right then I agree with him, although ‘evil’ might be a bit strong; evil requires bad intentions, I suppose, whereas the agenda of the left is usually strewn with good intentions, albet if a little mass murder sometimes has to be employed in pursuit of the greater good.

    I agree with your description of the left, but not of the right (generally speaking).

    Most people I know want poor people to become richer much more than they want the rich to become richer. In fact, I don’t know *anyone* who does not. Do you? Seriously?

    Sometimes this is admittedly out of self-interest – the chap who runs our village pub and the woman who runs the stores, both robustly right wing, won’t make any more money if the man who owns the biggest house in the village (a Labour peer, as it happens) gets any richer, but more disposable income in the pockets of the farm workers, game keepers, tree surgeons and builders will help their bottom line enormously. As a user of both the pub and the shop, I want them to stay open, so, on this very low but entirely representative level, I want the poor to get richer too.

    You know, you don’t have to be a bleeding heart socialist to weep at the sight of kids without shoes, or unemployed fathers (who want to work), or old people who are scared to turn on their heating: you just have to be a socialist to believe that the way to ameliorate these things is by controlling almost everything, top-down, from an office in Whitehall.

  21. Just to clarify, yes, I really do think that making ‘equality’ a goal is evil.It is, because all previous experience indicates that doing this will result in untold damage. Millions of deaths, destroyed economies, enslaved peoples. Equality is simply not part of the human condition. We are not ants. I do consider this agenda evil because even a moment’s thought, or an afternoon’s reading, will show, beyond doubt, that pursuing this goal is hugely destructive AND is unattainable.

    Now, supporting equality of opportunity, yes, I’d go for that – it’s why I support grammar schools. And yet the Left oppose them?

  22. Frank,

    Actually attempts to increase equality (especially of opportunity) has not resulted in untold damage, destroyed economies, or untold damage. It is kind of amusing, since your rather uncompromising view of history has significant Marxist overtones – the inevitability element of it at least.

    In fact redistribution via social democracy has worked reasonably well in the Western world. Yes, it does have its flaws and sometimes the leftard vested interests tend to extract too much rent, but it has brought us peace and stability. Attempts to force equality of outcome via violence (the Soviet/Maoist/Khmer route) have ended poorly, but the idea of redistributing wealth so that poor people can become healthier, better educated, more entrepreneurial is one that is generally seen as a good thing.

    Actually the problem of grammar schools is simple – the tendency for them to be overfunded relative to secondary moderns. The hideous lefty experiments in comprehensive education have not exactly covered themselves in glory either.

    A truly equal opportunity society would see sufficient resources devoted to education, which would be delivered in the most efficient way possible – preferably without state control.

    Failing that, I rather like the dirigiste Singaporean model.

  23. @A
    So the market provides housing at “a lower price higher quality and greater supply and variety”.We never have housing bubbles ?Crashes?Chancellors do not have to intervene massively in the market to guarantee mortgages ?Demand never exceeds supply? And Prof Oswald has got it wrong by saying in The Economist “Most analysts accept that, at heart,it was the housing market -obsessive pursuit of homes, the engendered mortgage lending and the familiar house price crash -that did for the Western world”(?)

  24. @DBC
    If it was allowed to then of course it would, it’s what markets do. But when your masters tell you where you can build, what you can build, how to build, and have control over the money supply and interest rates, trying to blame the market is laughable.

    “As a rule, capitalism is blamed for the undesired effects of a policy directed at its elimination.” Ludwig Von Mises.

  25. PaulB – “ideologues of all hues, including some rightist commentators on this forum, decide what they believe in first and look for factoids to support their views second.”

    Not just on the Right, hey Paul?

    “You, for example, see some inherent evil in the very notion of equality.”

    As we can see.

    “Whereas a fact-based economist sees equality of wealth as intrinsically desirable for the efficient allocation of resources, albeit while wanting to balance that against possible adverse consequences of attempting to achieve equality.”

    Sorry but no. There is no “fact-based” economist I know of who would make that stupid claim. Suppose that doctors were paid the same as bricklayers. Human resources are scarse – it is hard to find people with the talents needed for some jobs. If you pay doctors the same as brick layers you are guaranteed not to have an efficient distribution of human resources. Equality of wealth guarantees an inefficient distribution of resources.

    PaulB – “I don-t pretend to know what everyone thinks”

    But you felt free to comment anyway. No surprises there.

    “but when the commentator I was replying to wrote of an “evil equality agenda” I took him at his word.”

    No you did not. You made sh!t up. Because an objection to the equality agenda is not the same as an objection to equality. Pol Pot had an agenda to make everyone in Cambodia equal. It did not turn out that way. I assume even you condemn his agenda.

    “One is that the production of desirable goods is promoted by allowing people to make money by producing stuff other people want.”

    So unemployment benefits are inherently wrong and the unemployed should be encouraged to undertake some sort of work-for-the-dole scheme?

    “The other is that we can do more for human happiness by increasing the wealth of poor people than by increasing the wealth of rich people, because diminishing returns reduce the value to themselves of additional consumption by rich people.”

    In the short term. Let us agree that if there had been a radical redistribution of wealth in the Late Victorian period, the poor would have been made happier. But on the other hand Britain would look like Bangladesh. Only worse. In the long run, economic and scientific development requires inequality. In turn they make people even happier.

    “Many on the right overlook this, or even somehow persuade themselves that inequality of wealth is desirable as an end in itself.”

    Inequality is a desirable goal in itself. Because humans are inherently not created equal. Some are talented. Some are hard working. Some are feckless. Everyone should, as a moral right, rise or fall to their appropriate level. Anything else is insane, counter-productive and morally wrong. Although not all at the same time.

  26. @A
    You are now saying that the commercial banks don’t create the money in the system and that the government does.Read Murray Rothbard on Fractional Reserve Banking.However it would be a shame to destroy your state of almost complete innocence .

  27. He made some interesting points and asked you some perfectly sensible questions, Paul. That you cannot address them and resort to insult is a shame.

  28. I find Tim’s approach on this troubling. I think when people use the term “wealth” they’re referring to personal capital. Tim is ascribing large amounts of wealth to people by declaring “equivalent of” capital.

    A man with

  29. …GPP100k in the bank has wealth of GBP100k. A person on a benefit that would be worth 100k if the market were providing it, which it isn’t, doesn’t have a wealth of 100k; the most obvious test is that they can’t take their “virtual wealth” and spend it on something else. It isn’t wealth at all. We must also note that this “wealth”doesn’t exist anywhere in the country’s national accounts, as often pointed out by people criticising the future liabilities of the State (as regards pensions, etc). There is no stock of wealth from which pensions and other benefits are paid. They are simple transfers. The money isn’t there.

    Another more arithmetical approach would be to compare the marginal utility of 1 pound to a man with 100k in the bank, compared to that of a man on the state pension/benefits (with no other income or money in the bank). They are very different. The two people are clearly not in the same wealth boat.

    The logical conclusion of Tim’s approach would have us ascribing wealth to prison inmates, based on how much their gated community’s food, accomodation, security guards etc would cost on the free market. It’s a bit silly.

  30. DBC:
    Murray Rothbard’s writing on fractional reserve banking make it clear it is a product of the state, not of the market.

    Naive I may well be, but a bullshit artist I am not.

  31. Charlie:
    Very well then, I’ll answer. SMFS makes four points:
    1) That I lied when I said that FF sees equality as evil.
    2) Something about economists he knows, in which he fails to understand that I was talking about the allocation of resources for consumption. Which rather makes my point that some on the right, like some on the left, see only one side of the issue.
    3) Pol Pot
    4) Inequality is desirable and equality is (some of) insane, counter-productive and morally wrong.

    Regarding (1), FF has spoken for himself. But (4) makes clear that SMFS himself sees equality as morally wrong. So I don’t know what he’s complaining about.

    Regarding (3), I call on Godwin’s law, mutatis mutandis.

  32. Paul-

    1) So far as I can see, Frank Fisher sees “making equality a goal” as evil, not equality itself. In the same way as country line dancing isn’t evil, but forcing everyone to country line dance would be evil.

    I mean, that’s not a good example because country line dancing actually is evil, but you get my point I hope.

  33. Ian B (and others): ye-es. But how can attempting to increase X automatically be evil unless X is evil in itself? I’d think it pretty stupid to put line-dancing classes on the national curriculum, but I wouldn’t describe it as evil unless, as you say, line dancing is evil in itself.

  34. PaulB
    But maybe equality is evil in itself.
    Various societies have achieved equality. Not saying it’s ever lasted very long. France after the revolution was profoundly equal. Look where that went. North Korea is a truly equal society all bar it’s herditary democratic rulers’ tastes for extra amounts of personal equality. Big success story.

  35. @ Ian B
    An entitlement to a private pension is no more and no less wealth than an entitlement to a state pension. One cannot, under English Law sell one’s pension.
    However the ONS table shows “private” pensions to comprise 47% of total net wealth and 57% of that for the top decile. Meanwhile it excludes the value of the basic state pension and SERPS. This grossly distorts the picture of the distribution of wealth, but much less so that of savings (the inclusion of contracted-out but not contracted-in pensions is a significant but much smaller distortion).
    BUT before nit-picking Tim’s argument, why don’t you check up as I did and find the whole NEF/Guardian argument is based on a LIE .
    ONS tells us that in 2008/10 the top 10% owned 34.5% of net property assets. NEF pretend that they are using this data to claim that the top 1% owns over 50%. I do not need to be Einstein to see that this is impossible.

  36. Well Paul, it depends if you’re talking about aspiration or action. It is not evil to desire that every atheist convert to Christianity. It is evil to force them to. If you believe that force is evil (evil is a strong word of course, so we may prefer “bad” or “harmful” but let’s stick with evil).

    So, the Wilt Chamberlain Problem. You may aspire to everyone being economically equal, but to take action to make everyone equal requires the use of force, to either stop baseball fans freely paying Wilt more than the stadium cleaner, or to take away Wilt’s freely earned income and give it to the cleaner.

    Forcing people to line dance would be some degree of evil for the same reason; because many people do not want to line dance. Some may feel humiliated or degraded by it. Or, it is not evil for a girl to show her tits. It would be rather evil to force every girl to, though. (And would remain evil even if it created a greater degree of happiness in the other half of the population, which is why we cannot use a Benthamite calculus in these matters).

  37. John77-

    I’m not nitpicking. I’m saying that trying to imply “wealth” i.e. capital from benefits income is totally barking fruitbat insane. I decided to turn to the Good Book for guidance, and found a Worstall Edition had been released-

    33 But a Samaritan, as he traveled, came where the man was; and when he saw him, he took pity on him.

    34 He went to him and bandaged his wounds, pouring on oil and wine. Then he put the man on his own donkey, brought him to an inn and took care of him.

    35 The next day he took out two denarii[c] and gave them to the innkeeper. ‘Look after him,’ he said, ‘and when I return, I will reimburse you for any extra expense you may have.’

    35a And then Tim came along and said, yea, Thy wealth is now increased by the value of oil, and wine, and a donkey, and an inderterminate tenancy at an inn, and at least two denarii.

    35b And then Vince Cable came along and taxed him on it.

  38. @ #40 PaulB, SMFS, bis
    There are two approaches to reducing inequality: I consider Mao’s and Pol Pot’s approaches as evil. On the other hand I support some charities and am in favour of the NHS (apart from its management), government support for the disabled and unemployed. Every government in my lifetime EXCEPT New Labour, reduced wealth inequality in the UK without starving to death or simply murdering millions.
    Incidentally, France after the revolution was not equal; North Korea is *not* equal. No totalitarian state in history for which data is available has been equal; what data on income distribution in Communist Russia finally became available it could be seen that it was far more unequal than in Thatcherite Britain.

  39. @ #44 Ian B
    ” I’m saying that trying to imply “wealth” i.e. capital from benefits income is totally barking fruitbat insane.”
    That is a matter of opinion.
    Secondly, I and Tim (mostly in his case) are not talking about benefits income: we are talking about legal entitlement to a state pension. It cannot be right to include the imputed value of “private” pensions, a very large part of which is comprised of public sector occupational pensions paid by the state, and exclude old age pensions paid by the state.
    Thirdly the equity remaining in houses with “equity release” where old people are living rent-free in houses they have effectively sold is included in the ONS data or “shared equity” where the residents own half the house and pay rent on the other half but not the equity in the houses where public sector tenants like Bob Crowe can live the rest of their lives paying half the market rent and pass on the tenancy to their children.
    Fruitbats are not insane. But by your definition everyone who buys War Loan or Consols or a Building Society PIB or an equity share for its income, let alone an annuity, is insane. Each of these attributes a capital value to a stream of future income.

  40. You may aspire to everyone being economically equal

    I don’t. I say that the optimum level of inequality is a trade-off between increasing supply of goods, and increasing the utility of consumption of goods.

    to take action to make everyone equal requires the use of force

    Ye-es, taxation requires the use of force. But then, the property rights everyone here seems to want require the use of force to protect them. They also require taxation to fund the police to exert that force. Not using force is not an option.

    The Wilt Chamberlain problem isn’t really relevant to what I’m saying – I’m making a utilitarian argument, not one about justice.

  41. Well there’s your problem Paul, because the fundamental issue here is whether utilitarian ethics are just. As summed up by the Jimmy Carr joke-

    “What do nine out of ten people prefer? Gang rape.”

  42. John77-

    Monbiot’s article itself is an (unusually) quite interesting discussion of property rights and subisidies. The NEF data is quite clearly and irrefutably a measure of wealth defined as capital (in particular, property values).

    As I said before, somebody getting an income stream from the State (all of which, including the JSA etc that everyone complains about, are as much “entitlements” as the pension) has not got any capital and thus no wealth by that definition.

  43. Ian B: What the Wilt Chamberlain argument establishes is that there is nothing unjust about the disposition of wealth after people have paid to watch WC play. Nozick was answering Rawls’ argument that redistributive taxation is necessary to achieve a just distribution of wealth.

    If you want to argue that a utilitarian distribution of wealth is unjust, then go ahead. But the Wilt Chamberlain argument doesn’t help you.

    My view is that the pre-tax distribution of wealth results from an essentially arbitrary set of laws on property rights, including intellectual property rights. Perhaps those laws are optimal to maximize production of desirable goods (well, they’re not, but at least in principle laws might be devised to that end). But I cannot see why anyone would think that the set of property rights best suited to production should also produce the best distribution of wealth (according to whatever definition of what is best). Redistributive taxation gives us the chance to achieve both.

  44. Paul, the WC argument isn’t about justice so much as practicality; it demonstrates that inequality is inevitable, if people are allowed to act freely. To use a personal example, I am an artist, but I am not as good an artist as Adam Hughes (i blame it on my crayons :), so therefore people exercising free will will pay me less for a picture than they will Adam Hughes.

    It is therefore a practical inevitability that there will be inequality between myself and Hughes, and the only way to fix this would be to in some way cripple Hughes by either preventing him working or redistributing the fruits of his labour to me. One hour of his work is worth more than one hour of mine to other people.

    This is nothing to do with “property rights” being “arbitrary”. So long as Adam and I both at least have the right to trade the fruits of our labour, there will be inequality; an entirely just inequality.

    So this answers your question. “The set of property rights best suited to production” inherently is also inherently those which “produce the best distribution of wealth”- so long as you accept the premise that each person should enjoy the fruits of their own labours. If you don’t, you are left with the impossible argument that the “best distribution of wealth” is that which rewards my crude crayonings equally with Adam Hughes’s hugely admired works. Which would not just be unjust, it would be just ridiculous.

    The “best distribution of wealth”- wealth is a bad word, let’s shift to income-”the best distribution of income” is that in which the price system matches the values of market goods. There isn’t any other “best” to be had.

    You see, here-

    “(according to whatever definition of what is best)”

    -you just handwave away the hard problem of defining “best”. That’s no use, is it?

  45. Your argument is that the only two possible distributions are the “market” outcome and equality. That’s wrong.

    I explained previously what I think the principles are by which the best distribution should be established.

  46. @A
    Rothbard does not say FRB was the product of the state not the market .He says “hence the drive by the bankers themselves to cartelize their industry by means of a central bank.” Fairly clear I would have thought.And please moderate the bad language .It not big and its not clever as I am sure you must have been told. Mr Rothbard does not deserve to be called a bullshitter! Even though he suggests that banks are part of the State.This is a very advanced idea and may need approaching carefully in stages to avoid disillusion .

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