The Freeman 1972 - The Ludwig von Mises Institute

108 THE FREEMAN Februarystructure now seizes for currentgovernment expenditures are preciselythose that would have goneprincipally into investment - i. e.,into improved machines and newplants to provide the increased percapita productivity which is theonly permanent and continuousmeans of increasing wages andtotal national wealth and income.In the long run, the high rates ofpersonal and corporate incometaxes hurt the poor more than therich.Equality, Once for AllA socialist proposal that usedto be aired frequently a generationor two ago, but is not muchheard now (when the emphasis ison trying to legislate permanentequalization of incomes), is thatthe wealth of the country oughtto be distributed equally "once forall," so as to give everybody aneven start. But Irving Fisherpointed out in answer that thisequality could not long endure. 6It is not merely that everybodywould continue to earn differentincomes as the result of differencesin ability, industry, and6 Elementary Principles of Economics(New York: Macmillan, 1921), pp. 478­483.luck, but differences in thrift alonewould soon re-establish inequality.Society would still be divided into"spenders" and "savers." One manwould quickly go into debt tospend his money on luxuries andimmediate pleasures; anotherwould save and invest present incomefor the sake of future income."It requires only a verysmall degree of saving or spendingto lead to comparative wealthor poverty, even in one generation."Even communists have nowlearned that wealth and incomecannot be created merely by alluringslogans and utopian dreams.As no less a figure than Leonid I.Brezhnev, First Secretary of theSoviet Communist party, recentlyput it at a party congress in Moscow:"One can only distribute andconsume what has been produced,this is an elementary truth."7What the communists· have stillto learn, however, is that the institutionof capitalism, of privateproperty and free markets, tendsto maximize production, while economicdictatorship and forced redistributiononly discourage, reduceand disrupt it. ~7 The New York Times, May 29, 1971.