Thursday, January 2, 2014

Poverty, socialism and communism

As Irving Fisher observed: “If all prices and incomes rose equally, no harm would be done to anyone. But the rise is not equal. Many lose and some gain”.

Throughout history poverty existed. I fully agree with David Hume who opined that, “Every person, if possible, ought to enjoy the fruits of his labour, in a full possession of all necessaries, and many of the conveniences of life. Such an equality is most suitable to human nature, and diminishes much less from the happiness of the rich, than it adds to that of the poor.

Socialism and communism were horrible failures; redistribution through taxes and subsidies have also largely been unsuccessful at eradicating poverty; the redistribution of wealth through revolutions were always a complete disaster; and creating wealth for every person through money printing, which creates inflation of some consumer prices or assets has had the exactly opposite result.