A final point here is that up until now, I’ve been acting as if government can foresee the ultimate consequences of its actions. We usually don’t have enough data to forecast the impacts of complex economic regulations on different groups of people. Is raising the minimum wage worthwhile given the number of jobs that will never be created? Who exactly gets hardest hit by prohibiting Uber and making taxis more expensive? You could tell different stories, but the advantage of direct redistribution is that it requires a lot fewer assumptions. Find out who is rich, find out who is poor, and you’re basically done. That’s not a completely trivial task, but it’s a lot easier and simpler to do than making complex predictions about how millions of people will behave in response to any particular intervention in the economy.
History backs up the idea that redistribution is better than trying to micromanage millions of individual decisions. The Nordic social democracies are wealthy, while countries like Venezuela, Argentina, and those in the former Eastern bloc have sought to more directly manage the economy. Sweden, Norway, Finland, and Denmark actually do quite well in indexes of economic freedom because even though they tax and spend a lot, they to a large extent otherwise leave the economy alone. I tend to think it’s pretty absurd to put these countries ahead of the US in terms of economic freedom, as these rankings often do, and I’ll get to that in the next essay, but it’s unquestionably true that Nordic countries today don’t have many of the kinds of leftist economic policies we often see in the third world. If you look at the worst performing countries since the 1950s, it’s basically a list of nations that have had civil wars plus Argentina and Venezuela.
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more on Act 10.
