The Libertarian superstition
Libertarianism is a superstition. It rests on ignorance and illogic, and the very vague perception that there is a power at work, without any understanding of how and why it works. One formulation I heard was that "Social Democrats don't understand that the quality of life is incrased through growth of capital and not redistribution." Now, where do I begin?
For a start, in my experience, any question that begins with “Why do x not understand” is stark evidence that the person concerned is too thick or too ignorant to understand something himself. It is an indirect statement that you are incapable to understand the other person or group. And in this case, it is utterly wrong in point of fact, and implies a contradiction that simply is not there. There is no contradiction between producing wealth and redistributing it. Do the shareholders in a company “produce” wealth? Hell no. It is the workers, the admins, and, if you are lucky, the CEO. Yet the shareholders receive part of the wealth produced by the company (dividend). You will say that the shareholders have placed their capital in the company for use. Yes, but it still not the capital that produces wealth: it is the intelligence, hard work, promotion, and planning done by the company employees, from the CEO to the last shelf-stacker. Capital by itself does not grow.
This leads us to the second point. "Growth of capital" is not the issue. Capital itself is dead. It only works if it serves to buy goods and services. And those are only desirable if they serve to extend and improve the average person's life. If they don't, and even worse if only a minority of the people are advantaged while the rest have to slave for their gain, then the creation of capital is worse than useless, it is damaging.
Besides, no economic activity of any kind could take place without a framework of law designed to protect honest endeavour and to punish thieving and swindling. And no such framework is going to be worth a damn without the required (and inevitably expensive) apparatus to punish thieving and swindling. Indeed, even that is less fundamental and less desperately important than the equally important (but somehow never noticed by libertarians and Ayn Randians) apparatus to certify and notarize transactions so that all parties know what is expected of them. Anarcho-capitalists seem to imagine that anyone, except perhaps a small minority of evil people, will just naturally recognize the right of property and leave it untouched, to be used and traded as the owner likes. A child, unaffected by propaganda and bad education, could tell you why that is wrong, why it is absurd. Nobody has a claim to anything unless that claim is recorded in permanent form and recognized as law by everyone around the owner, friend or enemy.
Neither the certification of property, nor its protection, nor the pursuit and prosecution of those who violate or wrongly claim it, can be separated from the public sphere. It may or may not take a village to raise a child, but it takes a whole goddamn society, with an elaborate code of written law and the public power to enforce it, to transact as much commerce as buying a stick of chewing gum. The seller who sells the stick, and the kid who buys it, both implicitly rely on the money printed by the public power to have the value required to pay for the stick, and on the cop down the road to come around and deal with things if the kid tries to take the stick without paying or the shopowner tries to keep the money and give nothing in exchange.
All these things cost money. Taxation is not something that the state imposes on noble wealth creators after they have created all the wonderful wealth; it is the precondition for any wealth existing at all. Without the constant background presence of public institutions, nobody could work, and certainly nobody could trade. The public power is by nature a part in any productive work and especially in any act of trade andin the products of any kind of peaceful work and of legitimate trade. Without neo-lib propaganda, any sane person should understand without being told,that the public power is the premise of any property and of any trade whatsoever.
The stake of the state in all business is a larger case of the stake of the shareholder in an individual company. The shareholder makes the company possible, and gets dividends from it. The state makes all trading and profitable labour possible, and gets a share of the proceeds in taxation. So much for the supposed contradiction between wealth creation and redistribution; redistribution (taxation, dividends) is not only not opposed to wealth creation, it is a necessary and inevitable part of it.
Now let us talk about other things that the sentence implies,t77yyy that is, that the public in general would be better off if “wealth creation” were allowed to go on as it pleased, the state serving at best as a policeman. That is contradicted by plain evidence. In the nineteenth century, Britain was the richest country in the world, at the peak of a cycle of capital accumulation and wealth growth that had lasted for centuries. Read some Dickens and find out how little the wealth that had accumulated at the top and middle of society percolated to the bottom. The lower orders of society lived in conditions that would horrify slum dwellers in Sao Paulo or Nairobi today. Wealth kept on accumulating, but it never “trickled down”. And the result was bad for all of society, because you cannot isolate yourself from your fellow citizens. “ There is not a drop of [the slums]'s corrupted blood but propagates infection and contagion somewhere. It shall pollute, this very night, the choice stream (in which chemists on analysis would find the genuine nobility) of a Norman house, and his Grace shall not be able to say nay to the infamous alliance. There is not an atom of Tom's slime, not a cubic inch of any pestilential gas in which he lives, not one obscenity or degradation about him, not an ignorance, not a wickedness, not a brutality of his committing, but shall work its retribution through every order of society up to the proudest of the proud and to the highest of the high. Verily, what with tainting, plundering, and spoiling, Tom has his revenge.” (Charles Dickens, Bleak House, ch.46)
Housing estates, health reforms, eventually the National Health System, were not enacted with public money because those terrible socialists have a sick desire to spend “your” money. They were enacted, with the basic support of all the country, because they were in everyone’s interest. You cannot have a part of your country festering and just live as if it wasn’t happening. The dwellers of gated communities in America are trying the experiment again. It failed in England 150 years ago, and it will fail again.