One of the greatest holes many liberals have in their understanding of economics is the assumption that wealth is a fixed pie – that one can only get wealthier by making somebody else poorer.
It’s hard to understand how that kind of logic could ever make any sense. If there’s a fixed amount of wealth, wouldn’t that mean we’d all get poorer as the population increases and wealth is accumulated by a growing number of citizens? And by the same logic, you’d have to believe we’re no wealthier today than we were 100 years ago.
Obviously wealth is not a fixed pie. As the economy grows, so does the pie.
You’d think our politicians would at least be smart enough to understand such a basic concept, but the class warfare of Bernie Sanders relies exclusively on that basic misunderstanding of economics.
If you tax something, you get less of it, and if you subsidize something, you get more of it. So what does Bernie think will happen if you tax work and subsidize non-work? Here’s what will happen, explained by pizza:As Milton Friedman famously put it, you can’t redistribute wealth without destroying the incentives to create wealth.
[Note: This piece was authored by Matt Palumbo. Follow him on Twitter @MattPalumbo12]