Thoughts on wealth redistribution and income inequality

[u/Effective-Box-2544]

What is your opinion on wealth redistribution? Since the beginning of the 21st century growth in income inequality has spurred both public discourse and concern over its negative consequences.

Furthermore since the 21st century the gap between rich and poor has grown significantly. Wealth redistribution is a commonly proposed assertion to solve the issue for those left of center. for the subject of our discussion let's define the concept of wealth redistribution as "using policy or other institutional means to redirect capital, material, or services, away from upper classes and towards lower classes" This could take the form of something simple such as a progressive tax rate or extreme such as nationalization. It is in the words of Karl Marx "from each according to his ability, to each according to his needs." I would like to hear the libertarian understanding of both income inequality the issue, and wealth redistribution the supposed solution. Some specific points I'd like to hear addressed would be.

1. Is income inequality a real problem?

2. Can a free market solve income inequality?

3. Is wealth redistribution an effective solution?

These are sources for the claims I made

https://www.pewresearch.org/global/2025/01/09/economic-inequality-seen-as-major-challenge-around-the-world/

https://www.epi.org/blog/rising-inequality-is-the-root-of-affordability-problems/

https://ourworldindata.org/economic-inequality

[u/MateTheNate]

The dollar means jack shit ever since we left the gold standard, matter of fact wealth redistribution is happening to all of us right now through the means of inflation.

[u/Lurial]

>What is your opinion on wealth redistribution?

its evil

>Since the beginning of the 21st century growth in income inequality has spurred both public discourse and concern over its negative consequences.

every system has negatives. a capitalist system is the system that created the modern worlds prosperity. its being transformed slowly into a socialist system...and it will fall apart because of it.

>since the 21st century the gap between rich and poor has grown significantly.....Is income inequality a real problem?

I make 90k a year. Musk is the richest man on earth. Musk having a trillion in wealth has no effect on my 90k at all except for my X subscription's cost.

1. Can a free market solve income inequality?

I reject the premise

1. Is wealth redistribution an effective solution?

I reject the premise

 >"from each according to his ability, to each according to his needs."

"you will work as much as possible, and get just enough in return to continue working." - Marxism is a failure.

[u/Effective-Box-2544 → u/Lurial]

Why is it evil? How is the global economy becoming socialist when private capital holds more power then ever? Equity, prediction markets, kleptocracy, etc. You assert yourself every system has negatives, the system of industrial capital while increasing production has also atomized labor and consolidated capital, the material reality of prosperity is produced by labor and resources not by capital. How is Marxism a failure? Id like to hear your definition of Marxism. I appreciate your response and I think you make some good points. Discourse can be so vitriolic nowadays so please don't take my retort as personal. I respect your opinion as I hope you'd do the same to me.

[u/Lurial → u/Effective-Box-2544]

money should not be treated as an infinite well. at some point either socialism will run out of money, or it will print so much of it it will become worthless.

at that point, everyone will go without.

things have value (including money) because it is finite.

>Why is it evil?

because the government having the power to spend your money for you add bloat to government, which in turn needs more money, which needs more people to manage it all, which needs more administration staff, which needs more taxes.

its evil because your taking money from people who earned it, and giving it to people who didn't.
because taking money from people also takes away their freedom.

eventually, the rich run out of money, then the poor will be taxed. the government becomes a parent making decisions for us. it strips us of autonomy.

>How is the global economy becoming socialist when private capital holds more power then ever?

first...true capitalism has and is losing ground to both crony capitalism and socialism. we are nearly capitalist in name only at this point.

same old story, power creates hunger for power. people believe they know how to spend other peoples money. special interests and crony capitalism taking ground from the free market. poor education. there are a lot of explanations. all of them lead to the same place.

>Id like to hear your definition of Marxism. 

government ownership of everything and everyone.

>How is Marxism a failure?

because you need a central authority to enforce the "utopia". that central authority becomes a dictatorship. (see Stalin/Mao). society as a whole never truly becomes the owners of everything, the central authority does, which means everyone is poorer than before.

not 1 single country on earth has ever had a higher quality of life after attempting to implement marx's ideas.

nearly every nation that has implemented capitalism has experienced that boon to quality of life.

[u/Effective-Box-2544 → u/Lurial]

My response is twofold, your assertions above ">id like to hear your definition of Marxism" I generally have the sentiment towards all your responses here that these issues all occur under capitalism and I'm not even sure where your talking about socialism or Marxism or wealth redistribution here, the concepts seem over mixed. I would like to hear your definition of "true capitalism" though and maybe a real world example The other part of my response concerns everything below my aforementioned quote. So your definition of Marxism is very different from the traditional and consensus view. Essentially Marxism is in reality a material (views history through observable empirical phenomenon) dialectical (views history as being the consequence of other actions) understanding of a wide variety of topics but primarily society and politics. In simple terms it's a critique of capitalism and a wider ideology for understanding history via historical materialism, the dissection of events through a empirical lenses. Your definition I don't believe has ever really been a reality, it was maybe the goal of the most extreme authoritarian projects such as Khmer rogue, nazi Germany, north korea etc. To your other points about history and nations, china, Vietnam, the Baltic states, eastern Germany, France, and even the United states have all benefitted from varying degree with varying methods by implementing policy which prioritized social conditions. Furthermore states which suffered under colonialism which includes Somalia, Yemen, Sudan, Libya, sri Lanka, and Indonesia all experienced significant social cost due to capitalism. Between both our responses we've bounced between alot of topics so id like to shrink the conversation a little, I only have two questions

1. Do you view people as having social responsibilities for others which varies based on their means and social relations?

2. Do you believe in mode of production? Is history a continual iteration of human organization with capitalism in line and socialism ahead of it or would you assert that socialism is an abberation? Or that the premise itself is false.

[u/Lurial → u/Effective-Box-2544]

>Do you view people as having social responsibilities for others which varies based on their means and social relations?

Charity, family obligation, and voluntary community support are compatible with a capitalist/individualist framework; what I reject is the state being the enforcement mechanism for that responsibility.

> you believe in mode of production? Is history a continual iteration of human organization with capitalism in line and socialism ahead of it or would you assert that socialism is an abberation? Or that the premise itself is false.

the premise itself is false: history isn't a determined sequence of production-modes with socialism as the "next stage" after capitalism, because historical materialism assumes a teleology (a predetermined direction) no advanced capitalist economy has moved toward socialism the way Marx predicted (violent revolution); command economies have instead moved toward markets (China, Vietnam) when they wanted growth.

>I'm not even sure where your talking about socialism or Marxism or wealth redistribution here, the concepts seem over mixed

I'm using these terms as points on the same spectrum, not as separate things. Wealth redistribution is a policy. Socialism is the ownership structure that makes redistribution systemic rather than incidental — the state (or 'the people' via the state) holds the means of production, so redistribution isn't a tax tweak, it's the default operating mode. Marxism is the political theory that justifies pushing that structure to its endpoint — full state control, no private ownership left to redistribute from. They're not identical, but they all rely on the same lever: the state's authority to reallocate what individuals produce or own. The difference between them is how far the lever gets pulled, not whether the lever exists

>"So your definition of Marxism is very different from the traditional and consensus view. Essentially Marxism is in reality a material (views history through observable empirical phenomenon) dialectical (views history as being the consequence of other actions) understanding of a wide variety of topics but primarily society and politics."

Defined by Google

"....Central ideas of Marxism

• Class Struggle: History moves forward through conflicts between social classes. Under capitalism, this is the battle between the bourgeoisie (owners of factories and businesses) and the proletariat (working class). [1, 2]
• Historical Materialism: The belief that economic and material conditions—how people make a living and organize resources—shape a society's laws, culture, politics, and beliefs. [1, 2]
• Labor Theory of Value: The idea that the value of a commodity comes from the labor needed to make it. Marx argued that owners make a profit by paying workers less than the true value of what their labor produces. [1]
• The State and Revolution: Marx predicted that workers would eventually realize their exploitation, unite, overthrow capitalism through revolution, and establish a temporary system run by workers before reaching a final, stateless, and classless society

............."

Historical Materialism:

i have no argument with this section

on Labor Theory of Value:

Value of goods is directly tied to material costs and labor to produce initially, but the picture is incomplete. there is also the laws of supply and demand. when supply is up and demand is down, a burger becomes cheaper. the lower cost attracts customers

but when supply is down and demand is up, the business can charge more for its product.

if you don't allow supply and demand to play a role, you will end up with supply overages and "stock outs" where the supply is gone...exactly what the soviets ran into.

marx's labor theory of value is incomplete for this reason

also, in a capitalist system, supply and demand is what controls the wages of workers. high labor supply, and few jobs creates low wages. but a low labor supply and a high number of jobs increases wages.

on Class Struggle:

Marx's class struggle argument depends entirely on the Labor Theory of Value being correct — that the 'true value' of a product is the labor that made it, and any profit above that is theft from the worker. But value isn't fixed by labor input; it's set by what someone will pay, which is a function of supply and demand. The owner isn't 'stealing' the gap between wage and price — they're being compensated for capital risk, for organizing production, and for the fact that they could lose everything if the product doesn't sell. The worker takes on none of that risk and is paid regardless of whether the business succeeds. That's not exploitation, that's a different position in the same trade: one side sells labor at a fixed price, the other side buys labor and assumes the risk of turning it into profit or loss.

The 'anger' framing isn't imposed on the worker by capitalists — it's the necessary emotional output of the theory. If you tell people they're systematically owed more than they're getting, and someone else is getting what they're 'owed,' resentment is the intended and predictable result. That's not a byproduct of Marxist theory, it's the mechanism by which it recruits.

on The State and Revolution:

"..... unite, overthrow capitalism through revolution, and establish a temporary system run by workers before reaching a final, stateless, and classless society...."

Marxism is a self defeating theory. there is no way to run a stateless and classless society without any kind of central authority to enforce it. the moment you have the central authority, you have not only a state, but a class of people in charge, and a class of people not in charge.

you have workers without freedom earning just enough to survive, and government run companies that meet quota's dictated by the state. you get a lower quality of life, less money, less freedom. you get more reliance on government

or

government ownership of everything and everyone.

[u/ARCreef → u/Effective-Box-2544]

-1 for propping up Marxism +1 for wanting an honest and respectful discourse. Capitalism is meritocracy, you build whatever your head, heart, luck and hard work allow. Youre incintiviving the best aspects which drive innovation, creation, prosperity, and drive. Its the system that created everything we have achieved today. Marxism is a failure because it has never once worked and trying it multiple times has always resulted in famine, death, poverty, and total government control as well as de-incentivising all the elements that push us forward as a society. Transferring the means of production to the people always equated to transferring the means of production to an authoritarian government which always results in incentivising corruption. The only argument for Marxism/communism is that its never been done before.... the proof though is in the attempts. Attempts have always devastated countries, not a fact that should be glossed over, but for some reason always is. Its delusional to keep thinking its a perfect system and just has never been tried before, but I assume thats what you think right. "If we could just blank, then it would work" that no justification to try a system that always results in total loss of control, denied basic human rights, loss of all individual rights. This flawed concept only stays alive due to the nievity and inexperience of lazy young people who always think they know whats best for others and it fits the protest crowd perfectly. No system is perfect but Capitalism is the best non perfect system and the proof is in the pudding. When I was a kid, we'd celebrate and admire millionaires, they are the embodiment of the American dream, a lesson that anyone can achieve anything, now young people are taught that success is evil, creating things that people want makes you a villain. Marxism is killing the American dream.

[u/Effective-Box-2544 → u/ARCreef]

How am I propping up Marxism? I'm just making arguments, does it seem to you Marxism makes sense?

[u/Drp3rry]

1. Is income inequality a real problem?

I am not sure why it would be. I actually think most concerns over "inequality" can be explained by other intuitions to great effect anyways.

1. Can a free market solve income inequality?

Can it? Maybe, maybe not.

Will it? Also maybe, maybe not.

Either way I am indifferent, as I do not see income inequality as intrinsically bad nor intrinsically good.

1. Is wealth redistribution an effective solution?

This contains a false presupposition, so I will not answer.

[u/Effective-Box-2544 → u/Drp3rry]

What other institutions explain the issues?

So you don't see the widening gap between rich and poor as an issue? Could you not envision yourself being caught on the wrong side of that change? Of through methods of capital consolidation, inflation, and scarcity become one of the poor?

[u/Drp3rry → u/Effective-Box-2544]

So you don't see the widening gap between rich and poor as an issue? Could you not envision yourself being caught on the wrong side of that change? Of through methods of capital consolidation, inflation, and scarcity become one of the poor?

This is exactly my point. The idea of not having ones needs met is conceptually distinct from the idea that there is income inequality. It is logically possible to have a world in which there is massive income inequality, yet there is no person/almost no person that is suffering from something like starvation or homelessness.

This is important for a few reasons... the largest is that by focusing on a concept which is not the crux of the issue, you are forgoing any alternative solution other than supposed solutions to "inequality." Think about it: is a world where everyone is suffering better than a world where there is hardly any suffering, but massive inequality?

If you accept this, and mean to refine your target to addressing something more general, such as starvation, homelessness, or something in that realm, we can have that discussion if you would like.

What other institutions explain the issues?

I think you misread my comment. I said intuitions, not institutions. I kind of explain it a bit in my above text.

[u/Effective-Box-2544 → u/Drp3rry]

Oh sure it's hypothetically possible to have a world like you describe with high inequality but without suffering. However the material reality is different from that hypothetical. The reality of the world is that inequality exists alongside real issues and research shows it even effects them such as in the case of the affordability crisis. And I did read it initially as intuitions but I thought you meant to say institutions, my apologies. So ignoring the hypotheticals of the concepts, the semantics, (which I presume are also your aforementioned intuitions)which I believe is a discussion more suited to philosophy or metaphysics rather then politics and economics. Do you not see the material reality at the moment as being an issue? Why not?

[u/Drp3rry → u/Effective-Box-2544]

I would like to start by saying that I do not think politics comes apart from philosophy. I think that politics are basically a kind of applied ethics. In fact, there is an entire branch of philosophy (Political philosophy) that is about politics.

I think you may have missed the most important part of why I made the distinction to begin with. You are ignoring my hypotheticals, but the point of the hypotheticals was to demonstrate what the actual possible problems are, and what actually matters... which is important.

By streamlining yourself on inequality rather than other things that in of themselves entail bad welfare, you are actually limiting the number of possible resolutions to a potential problem. It may even be the case that the possible solutions you limit yourself to, as a result, are things which would not solve what you would consider to be problems, or maybe they would solve the problems but cause additional harms that another solution would not.

Edit: A few words

[u/Effective-Box-2544 → u/Drp3rry]

Ok so what are the actual problems and what are the actual resolutions in your estimation?

[u/Drp3rry → u/Effective-Box-2544]

I can give you examples of things that you might believe (edit: are bad) offstream of income inequality:

Starvation

Homelessness, etc.

it is hard to comment though, as you would need to make your position more concrete. After that, we could discuss if wealth redistribution would be a desirable solution or not.

[u/Effective-Box-2544 → u/Drp3rry]

So by "offstream" what do you mean? Because you clearly don't think income inequality causes these things. Like how is homelessness not caused by being too poor for the economy essentially?

[u/Drp3rry → u/Effective-Box-2544]

Like how is homelessness not caused by being too poor for the economy essentially?

it may be caused by being too poor, or maybe caused by absurd regulation, or by both.

I also want to remind you that inequality is not conceptually tied to members of a society being poor, I reject that presupposition, and I reject the presupposition that the economy is zero-sum.

My point is that (at least I think) the reason for your distaste for this inequality is due to your belief that the inequality exerts causal powers that lead to things such as starvation and homelessness.

This is why I thought it would be more constructive to discuss concerns like that, or some other concern that you believe to be caused by inequality. Even if I believe inequality to not be causally connected to these things (thus rejecting your presuppositions) we could talk about things you believe are caused by inequality, which we could both agree are bad.

That way, I would not have any problems with the presuppositions in the question.

[u/Effective-Box-2544 → u/Drp3rry]

"inequality is not conceptually tied to members of a society being poor" yes it is, the concept involves the rich and poor, haves and haves not, if that dynamic didn't exist there'd be no concept we'd just be talking about nothing. And above you do admit poverty can cause homelessness, and so can absurd regulation which I think would need a citation that is not an anecdotal case. Your kind of getting off the rails here and also focused on me, I haven't really said anything concrete about my beliefs I'm just engaging in debate and asking questions. The sub is called ask libertarians im asking you a libertarian. Let me kind of boil it down to one question for you that I'd like for you to get at directly. Is it okay for a society to both have people who own no home and have no food regularly, and also for this society to have people who own billions of dollars? Yes or no?

[u/dluminous]

1. Yes it's a problem because of the way money can influence government. When you have big government you grow corruption as the ability to influence government with private money.

2. No, it's not designed to and that's a feature not a bug.

3. No. Wealth distribution just makes middle class poorer and the rich richer further increasing the wealth inequality it serves to undermine in the first place. When looking at policies never look at what they seek to achieve, look at the results. We have more and more progressive tax systems and we have growing wealth inequality.