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“By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest.”―Confucius

Today is a cold one. The United States Post Office is not delivering mail until Friday. I don’t remember the last time the USPS cancelled deliveries of mail. If you are in the Mid-West in the middle of what they are calling a polar vortex, stay inside, unless you just can’t avoid it.

Today’s wisdom is provided by Confucius. I find it fascinating that so many of today’s problems are a result of ignoring what so many have already discovered. Look at socialism, for example. If you look at the USSR, North Korea, Communist China, and Vietnam, it would be easy to see how broken a system of government socialism is, yet it appears our younger generations are seeking just that. Why are so many ignoring the experiences of socialism in the 20th century?

Socialism and communism are attractive sells if you avoid the atrocities these systems caused. In the 20th century, socialism has easily been responsible for over 1,000,000 deaths. Why would anyone want to bring that system back? I think many crave the beauty of utopia, where we are all equal, we all participate, we all contribute, and we all benefit equally. The main issue with this is the primary tenet of Socialism, which is equality of outcomes. How do you achieve an equality of outcomes? You enforce it.

Socialism destroys production. Say you have a productive worker. This worker comes to the job everyday giving everything they have. Over time this worker realizes that other workers don’t put in the same effort they do but still get the same pay. Then it happens. The productive worker falls in line and lowers his production to meet the bare minimum, along with his colleagues. When you live in a system that does not reward innovation, productivity, and efficiency, you destroy these things.

You hear all this talk by many in politics today. Let’s tax the rich. Let’s take their money. They earned it unfairly, they stole it from the poor, they cheated the system. No one should have that much money, they should give it to others. Charity is one thing. No one has a problem giving their money to charitable causes. Taking the money of a productive person and giving it to someone else without their consent is theft. Does this improve society? Does it motivate someone who is not making any money to make more? No. It perpetuates poverty.

Redistributing wealth does nothing but keep people poor. Imagine a universal income, another platitude of politicians today. What do you think a person would do if you paid them say $1000 dollars a month for doing nothing? They would do what you are paying them to do—nothing. It really is that simple. Are we improving outcomes? Are we lifting people out of poverty? No.

Over taxing the rich will also result in rich people leaving the country. Why should they stay when they can keep their money living somewhere else? Then guess what happens? Those tax revenues are pushed down into the lower tax brackets and now you have people being taxed at exorbitant rates that cannot afford them.

The same thing occurs when you overtax companies. They will move their enterprises overseas, taking advantage of lower tax rates and cheaper labor. Along with these strategies, they will push the taxes down to the consumer. Companies must be profitable in order to attract investors. When the government passes legislation that increases taxes or affects their profit margins, these companies push these increases down to the consumer. You and I pay more money for a product because of these taxes and regulations. These regulations and taxes don’t hurt the company–they hurt us.

Let’s keep in mind the quote from above. We have gained wisdom surrounding socialism. We have seen it fail. We have seen the results of these systems repeatedly—stagnated economies, human atrocities, and the elimination of freedom. Let’s not go down that road again.

Until next time…

Dave

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