Thought Experiment from Tea Party Speech

[Peter Trippett]

I had prepared a written speech before the Tea Party, not knowing how much time would be allocated to each speaker, how receptive the audience would be, etc. Because my speech was near the end of the day, I didn't want to keep everyone longer, so I shortened it.

However, I had an interesting (I hope) thought experiment to make the point about Redistribution vs. Free Market. This was part of the speech I left out. I present it here, in case anyone is interested...

-Peter


The Seventh Principle:

"I work hard for what I have and I will share it with who I want to. Government cannot force me to be charitable."

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Thought Experiment
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Imagine a distant and ancient country, populated by two people. One person, Mr. Farmer, is a master at food production. The other, Mr. Brown, knows nothing about food production. In this country, there is no currency, except food. Food storage technology hasn't been invented yet.

Imagine, further, that you are the government. The government has no ability to produce food on its own. It's main power, if you choose to exercise it, is to redistribute food. The government in this thought experiment has no need of food itself.

So, what do you do? What sort of government do you create? You have the power to redistribute wealth, but that does not mean you must use that power. Do you believe in the free market? Or, do you believe the best result is achieved by taking food from the rich (Mr. Farmer), and distributing it to the poor (Mr. Brown).

Let's say for a moment that you choose to redistribute the food. You take food from Mr. Farmer, and give it to Mr. Brown. The amount of food you transfer probably depends on how much you believe in Redistribution, and probably varies anywhere from “subsistence level” (just enough food for Mr. Brown to live) up to half of Mr. Farmer's production.

Mr. Farmer is now forced to work some percentage of his time, producing food for Mr. Brown. From his point of view, he is now effectively a slave to Mr. Brown. This makes him less free! Depending on the level of taxes, he may choose to tolerate it, or he may choose to leave your country, and move to one that values Free Markets. If he tries to leave, you, the government, might be forced to erect a barrier to prevent him from leaving. Sound familiar?

But, for sake of argument, let's assume he stays. A few years go by. Mr. Brown is happy, as his needs are being provided for, and Mr. Farmer has learned to live with the taxes. But, suddenly there is an unexpected drought. Mr. Farmer can produce enough food to sustain only one person. Now your government is in the unenviable position of having to either remove the tax, thus allowing Mr. Brown to starve, or continuing the tax, thus starving your entire population!

Starting over – now let's say you decide to not exercise your governmental power to redistribute wealth. You choose to let the free market operate.

Mr. Brown, realizing that he must fend for himself, approaches Mr. Farmer, and asks for food. Mr. Farmer states that he will not give Mr. Brown food, but instead invites Mr. Brown to work for him. If Mr. Brown can take over even the simplest of duties, it will free up time that Mr. Farmer can use to produce more food, which he uses to "pay" Mr. Brown.

A few years go by. Mr. Brown has learned, while working for Mr. Farmer, how to produce some food for himself. Now, when the drought comes, the two of them together are able to produce enough food to survive.

Those who would choose Redistribution might claim that my little thought experiment is unfair. They might say, “You didn't tell me that there would be a drought.”

True – but that points out the major flaw in the redistribution philosophy – it seems to assume that if there are sufficient resources to pay for government programs now, then there will always be sufficient resources.

They might also claim, “You said that Mr. Brown can't produce food. You didn't tell me that Mr. Brown could learn to produce his own food!”

That demonstrates another basic assumption of those who believe in redistribution – that the needy are victims, unable to learn to fend for themselves. In reality, by giving them things without any obligation to work for them, you are often imprisoning them in poverty.

You might ask, “Well what if Mr. Farmer is greedy, and, in the Free Market scenario, decides to keep all the food for himself, rather than pay Mr. Brown to work for him?”

First, that demonstrates another basic assumption of the Redistribution mentality: that rich people are inherently bad. In reality, it is unlikely that one person would knowingly allow another to starve. Every form of government has its downside. I would still bet on the Free Market, with the possible but unlikely outcome that Mr. Farmer would allow Mr. Brown to starve, than Redistribution, with the certainty that someone will not survive a drought.

Second, the country that chooses Free Markets as a founding principle is likely to draw those other farmers, who choose to leave neighboring countries that tax and redistribute their wealth, in order to avoid those taxes (sound familiar?). So, it is possible that Mr. Brown may have other employment opportunities before he starves!

Finally, you might say, “Well just because I give Mr. Brown some food to guarantee his survival, doesn't mean he won't go work for Mr. Farmer, and learn from him.”

True, but the more food you give to Mr. Brown, the less likely he is to want to work. And, the more you take from Mr. Farmer, the less likely he is to want to employ Mr. Brown. The possibility of starvation is the most powerful motivation for Mr. Brown to work, and the lowest tax burden yields the highest probability that Mr. Farmer will hire him.

In the end, the Free Market produces the best result!