Saturday, March 30, 2013

Thinking Again About Greed

For years, perhaps centuries, there has been a huge gap between rich and poor. Usually it is the very poor that complain. There are strong reasons to reduce this gap. Indeed, it sounds like the right thing to do. 

On closer inspection we find that a government that attempts to do this by imposing is will - shoots itself in the foot.  Governments must be very cautious in this area. Social engineering of the economic structure of a society comes with undesireable penalties, and the government that tries to reduce the gap between rich and poor reduces or eliminates the aggressive, competitive, and risk taking so necessary in a modern society. 

It's just not a good idea to take from the rich and reward non-productive people for not being productive. The free-market concept is not perfect.  There are flaws, but the competition of a free-market is somewhat self limiting - and produces growth of an economy, which then provides more rewards for both rich and poor. 

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