Take from the rich?

Will taking from the rich and giving to the ‘middle class’ produce ‘social justice?’ You don’t have to study economics to know that ‘there are no free lunches.’ No matter how it is done it is going to hurt somebody somewhere.

By Moshe Arens, HAARETZ

For a moment you might have thought that Robin Hood of Sherwood Forest was stalking Rothschild Boulevard – he who robbed from the rich and gave to the poor. Except that unlike Robin Hood, the campers in their tents on Rothschild Boulevard and other places in Israel want to take from the rich and give to the “middle class.” “The people want social justice” they cry in unison, coached by whoever is on the platform.

Will taking from the rich and giving to the “middle class” produce “social justice?” Or maybe there is an easier way, by taking from the ultra-Orthodox, or from the settlers in Judea and Samaria, and giving to the “middle class”? Or maybe “social justice” can be obtained painlessly by simply making the whole government bureaucracy more efficient, and having the “middle class” enjoy the benefits of this efficiency drive? Or cut the defense budget? But you don’t have to study economics to know that “there are no free lunches.” No matter how it is done it is going to hurt somebody somewhere.

on Economics, Eco 101, have to say about social justice? I am willing to bet that in most of them the phrase “social justice” does not even appear. We have heard it from Karl Marx and Vladimir Lenin, and we have watched the Communist experiment in the Soviet Union, admired by millions around the world for many years, until the Soviet structure collapsed of its own weight. The cost of the experiment is still being tallied up to this day. Now it has been replaced in Russia by the rule of the oligarchs. No “social justice” there.

So what does economics, the dismal science as Thomas Carlyle called it, have to contribute in this matter? Every year economists receive Nobel prizes for their contributions. Two Israelis, Daniel Kahneman and Robert Aumann, have been so distinguished. Most Israelis feel that Stanley Fischer, the governor of the Bank of Israel, is deserving of this prize for steering Israel through the stormy waters of the world’s financial crisis these past years. Were they among the 300,000 calling for “social justice” on Kaplan Street in Tel Aviv the other night? Or maybe the organizers of these demonstrations know something that even illustrious economists do not understand.

It is true that economics is not an exact science, like physics, chemistry or biology. Nevertheless, over the years a body of knowledge, some encased in “laws” has evolved. Certain conclusions have been empirically established.

Communism does not work and market economics works. Even the Chinese “communist” leaders have reached that conclusion. It is true that the recent economic crises that have hit the “capitalist” world have again raised voices that maybe “capitalism” is not the answer. And “swinish capitalism” is creeping into the lexicon of some Israelis. But who wants to return to Socialism?

Some Israelis are beginning to wax nostalgic over the years when the Histadrut Labor Federation ran and owned most of the country, and “everybody was poor.” Now that was “social justice!” But those with a good memory remember that then everyone was poor, except for those with the right party connections. And the running joke before the Six-Day War was that the last one to leave the country should turn out the lights at Ben-Gurion Airport. The period was far from idyllic and we have come a long way since then, primarily due to the adoption of market economics.

So what’s wrong? Maybe the middle class really is being “ripped off?” Because of a lack of regulation of the market where it is needed. Because of an overconcentration of capital and power in the hands of a few. Because of the existence of cartels that fix prices and bank charges. Because of an overeager treasury bureaucracy that thinks it knows how to drain money from the middle class that is defenseless when it comes to bearing the burden of taxes, direct and indirect. A bureaucracy that believes that Israel cannot afford a proper public transportation system. All these seem to have overloaded the middle class. Maybe that is what they have in mind when they call for “social justice.”

August 9, 2011 | 22 Comments »

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22 Comments / 22 Comments

  1. OK, I know everyone was told about the story of Robin Hood. What if we have it all wrong?

    What is the story… if you look closely at the Robin Hood story.

    Robin Hood was stealing from the Sheriff not from the rich. There is a difference. The Sheriff was taking the money/funds in the story. The Sheriff is the government in this story. Furthermore, the Sheriff works for the government in the first place.

    So why don’t we say that government was taking everything they could get their hands on!

    Government wants more and more and more, etc… Robin Hood was taking back from government because the government was using force to get what they wanted.

  3. @ Shy Guy:

    Tell us how much better things are in Dimona today than described in this 10 year old article.

    I think the soup kitchens are out of business.

  4. yamit82 Said:

    “I did not find the world desolate when I entered it. As my ancestors planted for me before I was born, so do I plant for those who will come after me.” – The Talmud

    Those last 20 seconds!

  10. @ Shy Guy:
    Shy Guy Said:

    If someone would finally get rid of the useless paper pushers, we could have a flat tax of 20%-25% and possibly a zero corporate tax, which would attract Jews with capital to this country like never before and move businesses here, providing employment in all sectors of competitive economic life.

    Solution—Move to Dimona 4% income tax on the first 10K of salary and 20% on the next 10K. Housing lower than most places in Israel as well.

    Beersheba only 20min drive for services of big city (for Israel). Clean air, cool evenings and if you seek quiet, it’s deafening. Negatives, services that exist are below par compared to three big urban centers, Bedouin, danger of radioactive leaks from the reactor, not many good job oportunities. little pollution but lots of fine dust, I gave up daily dusting years ago.

    but taxes are lower than any other place except Mitzpe Ramon.

    We have the largest ex pat American community in Israel! Instead of the Safari zoo in Ramat Gan come to our ZOO and see these Americans.

  11. I’m not Israeli, so you can tell me to mind my own business. But from the outside looking in, you need to get rid of the proportional voting system of government. It encourages fringe, one policy parties, who need to be bought off. It has never worked anywhere. You need a constituency based voting system. It reduces pork barreling.

  12. Ted, what’s gonna be with your absurd auto-moderation system? I know of no other blog which suffers from such a level of annoyance in allowing known members to comment. This really sucks!

  16. NormanF Said:

    Israel is a country where the government regulates the wrong things, doesn’t regulate the right things, in which taxes are far too high and in which a competitive free market is distorted by government-protected cartels and monopolies.

    Reforming it would make Israel an attractive place to live and invest. The protesters have a point, insofar as they go. Let’s hope the government makes the necessary changes.

    Here’s a copy/paste of a comment I posted a few days ago:

    Both the leftist, socialist, Marxist, communist organizers of this protest, along with the government of Israel itself, are all tiptoeing around the the cause of and the solution to many of the problems being protested about: Israel’s absurd taxation rates to feed it ever-fattening government bureaucracy.

    Forget about the defense budget. Every ministry is bloated beyond reality. The Knesset itself feeds from the ever overflowing trough of taxpayer money to pamper its ministers (with and without portfolios) and their office staffers and perks galore.

    Taking the budget knife to our precious bureaucratic beast would mean tossing myriads of redundant workers into the streets and eliminating corruption and bureaucratic laws and regulation which hinder every aspect of personal and economic life in Israel. If someone would finally get rid of the useless paper pushers, we could have a flat tax of 20%-25% and possibly a zero corporate tax, which would attract Jews with capital to this country like never before and move businesses here, providing employment in all sectors of competitive economic life.

    So why is no one mentioning this – not the government nor the protesters? Because they all know it means the spigot of seemingly endless money to fund their unions, parent’s/aunt’s/sibling’s/spouse’s useless public clerk jobs, and special causes will all come to an end. No pain, no gain.

    Look at this chart and spot the relevant anomaly:

    Government Spending as a % of GDP

    It’s been that way for a long time. It’s the reason why Tax Freedom Day comes so late for the average Israeli:

    Israelis celebrate Tax Freedom Day on June 29th this year: 7 days later than in 2010

    How does it feel, fellow Israelis, to pocket only 6 out of 12 months of your salary? Even that statistic is underestimated, when you calculate in the VAT and numerous other government and municipal taxes we fork over every day of every week for the most essential of items.

    Who’s protesting about any of this? Ask yourself why not.

  18. Israel is a country where the government regulates the wrong things, doesn’t regulate the right things, in which taxes are far too high and in which a competitive free market is distorted by government-protected cartels and monopolies.

    Reforming it would make Israel an attractive place to live and invest. The protesters have a point, insofar as they go. Let’s hope the government makes the necessary changes.

  22. There is no social justice, other than having the opportunity to live, work and sustain a family in a commonwealth dedicated to personal and corporate liberty, and then abiding by the opportunities thereby presented to live a productive and useful life and to improve your lot in life accordingly. That, and the unique and perhaps divine gift of a personality untainted by the poisons of envy directed at others whose wealth is greater than yours.

    Lacking all and perhaps any of the above, you are doomed to live a life of hatred, envy, spite, a sense of endless indignation, and find yourself enslaved to the broken promises and social engineering of the world’s altruists and of the dictators who inevitably grab power in such societies — all in the name of equality without merit.

    Arnold Harris
    Mount Horeb WI