Saturday, April 19, 2014

Metzler on Redistribution

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From the article

What has worked in the United States for several centuries has worked well for many other countries in the past fifty years. Once China adopted capitalist methods, it moved millions out of low productivity agriculture, taught them new skills, and raised their wages. Korea sends its young to learn new skills in the United States. That enabled it to move successfully from a low wage provider of unskilled labor to a technically advanced country with a skilled labor force. And it increased freedom along with wealth. Other examples are Hong Kong, Singapore, and Taiwan—free, capitalist democracies. Add Chile, Peru, and Mexico among others.

France is at the opposite pole. Mired in its hatred of capitalism and demands for redistribution, it has maintained its low share of income going to the top 1 percent. But the cost is high. The young and innovative leave France for the UK and other shores. The French get massive redistribution and unemployment for many who remain behind.

Source: Allan H. Meltzer, "The United States of Envy," Defining Ideas (Hoover Institution), April 17, 2014

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