For long some economists have been propagating a theory invariably supporting over-concentration of wealth at the top.
For those unaware, this theory essentially makes the claim that as people at the top of the prosperity food chain make more money that money trickles down to the lower rungs thus eventually benefiting everyone.
Strictly technically speaking that may be true. In reality it is as true as a farmlord claiming his defecating in the open every morning benefits his neighbour's field with soil health. or his taking a bath in his field helps the farmer whose land the bath water flows into. This is an incidental outcome and not a proactive design benefit.
To relate further with the deliberate choice of example above: this shows the toxic financial excesses of a few incidentally benefiting few at the bottom rung. I am not against money making. But classifying toxic behaviour as a virtue is outright ugly.
Just as two above stated examples there can be hundreds possibly thousands of such examples of people incidntally benefitting from someone else's actions. If this is being touted as one of the achievements the current economic system design over centuries then clearly we have collectively failed. And propagating this theory are even gloating in that failure.
There are clear differences to be understood here. The popular idea of wealth distribution is equally inefficient as wealth works at two main levels:
1. Accumulation
2, Preservation and Growth
Those high on low I.Q idealism limit their imagination to redistribution of accumulated wealth not considering that not all those who accumulate this wealth got from unfair means. And what some of that unfairness may even mean that leads to overcontration of wealth in some geographies and many individuals are mere incidental beneficiaries of a large proportion of that growth / compounding.
Another assumption is that everyone out of the new set of receivers is an active contributing member of the society and deserves the redistribution. With democracies & IT enabled infrastructure creating new efficient ways of government as well as individual & institutional support to areas of inequalities thus far, the onus in many cases may have shifted to these individuals to make an effort to take part in the ever expanding scope of economic activity and change their own fortunes.
And this is followed up by another even more important factor. There are some who are naturally more attuned to the game of money due to variety of factors and even when their funds are reduced they are likely to use their strengths to accumulate the same or even larger sums of money.
In current times they pay as much as 50% of the money made in different forms of direct & indirect taxes in addition to generating employment for many other aiding the tax collection even further. In some cases this may easily at par with the wealth they may have created for themselves. Is this idea of redistribution fair to such an efficient lot of people? Doesn't the shallow yet politically attractive sounding narrative harm overall economy by curtailing the energies of people by disincentivizing them with such ideas?
(Incomplete. To be updated.)
