The First Law of Politics, and Redistribution

Many libertarian types appear to have an almost religious fervor. You know, as in "sacred" property rights and "evil" government. I have acquired a pragmatic form of libertarianism with regard to wealth, and the redistribution thereof. I use the “law” word very sparingly when it comes to the realms of human behavior, I think it’s generally dangerous to believe you can really understand and predict these things reliably, but occasionally a general principle emerges. My abandonment of redistributive economics comes not from a conviction about its immorality, but from an observation that seems reliably true:

Gainey’s First law of politics: The rich will always get theirs.

As much as my bleeding heart might like to take from the rich and give to the poor, it’s pretty much never happened yet (so far as I know). And I’ve come to believe that this is endemic to the whole redistributive enterprise. That is, in spite of (possibly) good intentions on the part of those who design a redistribution scheme, the implementation inevitably co-opts or corrupts the goal. The result is a lengthy litany of fat cat largesse: agricultural subsidies that accrue to rich folks while punishing consumers and poor farmers in the developing world, flood insurance for million dollar resort homes underwritten by taxpayers (including, say, working class families wiped out by Katrina), and a personal favorite, colossal stadium giveaways to billionaire sports franchisees which never break even on their promised economic benefits. And that’s before we even get to that fabled progressive whipping-boy, corporate welfare. Those who tend call themselves “progressive” or “liberal” seem to always believe that if we just tinker with the implementation enough, we’ll finally get it right. Fiddle and tweak the knobs on the Contrabulous Fabtraption just so, and economic justice will emerge! I’ve come to believe that this is a fundamental, fatal delusion. Part of the problem is indeed classic corruption and greed, but the law of unintended consequences also applies. Each of the abominations I’ve cited above was grounded in a program designed to benefit the common good or some “deserving” group, and yet these monstrosities emerged. Even if the lawmakers somehow worked in pristine isolation from interest group influence, the system will always be gamed by some clever accountant or attorney. (And of course, we’ll never, ever stamp out the greed and corruption either.) Sure, as much as anyone, I’d love to strip Paris Hilton of her inheritance and build thousands of Habitat for Humanity houses with it. But, in general practice, the problem turns out to be intractable to this sort of solution.


Once you start moving the money around, the rich and the well-connected (the two sets are not identical, but they sure do have a large intersection!) will always find a way to get a nice, fat cut. (Gainey’s First Law, restated.) In the end, the net result of government moving money around is NOT a transfer from the rich to the poor, but, generally speaking, a transfer from the politically powerless to the politically connected. The poor will be better off if we keep the government out of it.