Writing in the prestigious business publication, Forbes
Magazine, George Leef makes it clear he does not like the way that the
conservative critics of Thomas Piketty's book have argued their case against
his theory; one that favors raising more taxes on the rich.
Before elaborating, Leef made his point succinctly with this
one sentence: “Rather than going after Piketty's numbers, we need to go after
his philosophy.” All this comes in the article he wrote under the title:
“Piketty's Book – Just another Excuse For Legal Plunder and Expanding The
State,” published on May 21, 2014.
In going after Piketty's philosophy of raising more taxes on
the rich, Leef begins the presentation by telling the readers that “Piketty's
countryman Frederic Bastiat coined the perfect term for that more than 150
years ago, [he] called it 'legal plunder.'” This done, he starts his own
argument by agreeing with Bastiat. He then goes further and attributes the
motive of envy and resentment to the people who wish “to see the successful
pulled down and their wealth redistributed to themselves.”
This is where you stop for a moment to reflect on what
Frederic Bastiat meant when he pronounced himself in the manner that he did
more that 150 years ago. Well, there was no central bank then, and there was no
printing of fiat money to represent the wealth of the nation. Also, the income
that someone received was measured by the amount of goods and the pieces of
silver or gold that was given to them in exchange for their services. As to the
wealth that the family had accumulated, it was largely made of real estate and
goods such as the number of live animals, artifacts and pieces of precious
metals that the family had to its name.
Given that no one could be wealthier than the amount of real
estate and tangible goods in the entire jurisdiction, there was a natural limit
as to how much wealth someone could accumulate over a lifetime. More
importantly, there was no mechanism by which the earnings or the wealth of the
people who toiled in the fields, the mines and the factories could be spirited
away from them and given to those who did little or noting to earn it. This
kind of mechanism was created with the establishment of the central bank and
with the printing of money. It could happen now because every dollar that the
central bank printed and gave to someone enriched that someone by diminishing
the value in the hands of everyone else. It is a mechanism we now know will
create inflation if and when it is abused.
As the way we live has changed from being essentially rural
to essentially urban, and as industry began to make products that were never
dreamed of during previous generations, the creation of wealth was now measured
by more than the people needed to have in order to buy the bare necessities of
life such as food, clothing and lodging. Wealth now extended to the kind of
leisure and entertainment that people bought and enjoyed. Thus, the amount of
printed money that someone was paid, and the amount of wealth they had
accumulated took on a significance not known in the days of Frederic Bastiat.
Printing money and handing it to some people amounted to
transferring the wealth from those who made it by producing the underlying
goods and services to those who handled the money but did little or nothing to
create it. And the taxation that may have looked like legal plunder to Bastiat
more than a 150 years ago, now looks like a legitimate way to attenuate the
immoral transfer of wealth from those who make it by toiling in the fields, the
mines and the factories to those who enjoy it by consuming the kind of leisure
and entertainment not known even to the idle nobility in Bastiat's times.
Another thing that George Leef ignores in his article is
that the money which gets into the hands of those who do not create the
underlying wealth gets in those hands because of the inventions and the
innovations that were dreamed up by the people who left it for the benefit of
all mankind. Thus, the people who get wealthy because automated machines make
more products than ever before, because airplanes can fly them to exotic places
around the globe, and because the leisure and entertainment products they make
are duplicated and sold to millions of people – must understand that paying
taxes comes down to paying royalty for the modern way of life which they
exploit, a way that is the property of the entire human race and not theirs
alone.