Leftism Fails At Basic Economic Incentives

The US government is currently subsidizing solar and wind energy companies. Do you think this is a good idea? Yes. Why? Because you think wind and solar will be valuable.

The US government is also currently heavily taxing products like tobacco and alcohol under the so called “sin tax”. Is this a good idea? Sure. Why? To generally slow down society’s use of these things.

Analysis

Now here’s another example of why I say leftism is a religion of half equations. So far, everything we’ve looked at seems to make sense, but let’s analyze it one level deeper. What is the hidden assumption in both of these examples. We’ve said that subsidizing solar is good because solar is good. But who said that subsidizing something will encourage more of it? Similarly, who said that taxing something will make people do less of it? It turns out, economically speaking, both of these statements are true. This is borne out both by the economics and the experimental studies.

Ok, so far so good. Subsidizing something encourages its use and taxing something discourages its use. We all know that, what’s your point?

The Punchline

My point is that people on the left know this to be true, but they are unable to apply it consistently. The current leftist political platform fights, every year, for more benefits for low income or no income people, and more taxes for high income people.

Let me let that sink in. Is it becoming clear? This approach subsidizes lack of work, and taxes productive work. What are the clear consequences? Every year these policies are in effect, you are decreasing the amount of productive work performed, and increasing the amount of people not working. This is simple economics.

The Send Out

The above is an excerpt from my upcoming book The Great Unlocking: A path to economic, political, and spiritual enlightenment. Sign up below to be notified when the book is released.