Wealth Redistribution: A Pro-Capitalist Critique, Unique to 2020.

when i talk about problems that involve
a fair degree of abstract reasoning you may notice that i like to start the video with a very palpable very pragmatic real world example you are living in the united states canada or australia have you ever asked yourself the question of why when the government has made its attempts to alleviate the poverty of the native people of the indigenous people why they did not redistribute ownership of land of properties of apartments of condominiums of office buildings within the downtown core of the biggest cities why is it that the government's strategy has been to grant land ownership to the most obscure most remote most poorly connected most worthless pieces of land in the country now if you think through a few stages of analysis here you can imagine how everything would have changed for the indigenous people very rapidly within say the 20th century if the strategy had been the opposite or even if you had a combined strategy with both both features so let's say the indigenous people of the northern united states of america were given this relatively worthless and remote land but then also were given floors of different apartment buildings different condominium buildings in major centers of commerce and industry if they were given homes near factories in detroit back when detroit's economy was booming in the middle of the 20th century what if uh back when there was the industrial boom in uh oakland california and this sort of thing what if native people had also indigenous people also been brought in and involved in that period of prosperity by being given houses and apartments right there and even now you could ask well there were new condominium towers being built in big cities like vancouver and toronto what if these remote tribal peoples not as a substitute for the land they already own but as a as a supplement as not what if they were also being given apartments and condominiums in these new towers being built in a city like toronto and vancouver now not everyone will want to move from those remote rural locations to the downtown center of a of a major city not everyone will want to move near the factories to have access to employment to have access to education to have access to opportunity right to have access to health care all the benefits being not everyone will but even if some of those indigenous people choose to keep living on the land maybe they want to be farmers or they want to be hunters they want to continue that traditional lifestyle suddenly they have a source of income like today you can rent out the property through a website like airbnb you can just rent rent as a conventional landlord have someone paying rent to you as a landlord then you can take that money and invest it in your business or your life even if you're just a hunter or a farmer that's revenue that could then go back to that life you have a remote uh piece of land way out there right it's gonna involve you positively in the prosperity of the big city in a way that these other forms of redistribution never can and never will now so let me just ask you why did the government in canada or australia never do this my answer is because it would work because they knew it would work i think it's really quite intentional the extent to which our indigenous people were forcibly excluded from the economy of manufacturing mining everything worth having everything worth being a part of in the 20th century and i'm saying the 20th century intentionally and once you get back to the 19th century the 18th century you're in the much more overtly genocidal period now brief aside this is not going too far off the beaten track this video all my life i heard these kind of false allegations against the government of japan that they had committed genocide in much the same way or worse against the indigenous people of the far north of japan all right so the ainu are the only group anyone knows the name of in english but the anu are not the only indigenous group up there there are several different ethnic groups different languages different but suffice to say there are indigenous people there who are not japanese and i was shocked when i did the research and this is not the whole history of the whole of japan these are these people in north japan that what the japanese government in fact did for example when they relocated the indigenous people who have been kicked out of sackland so sackland's the far far north of japan sacklin and the other islands nearby when those people had to be settled on the japanese mainland so to speak there is no mainland they're just bigger and smaller islands when they had to be resettled what they did was take row houses good old 20th century row houses near industrial estates near booming thriving industries like just like detroit had its period of expanding heavy industry japan also at a period of expansion there was employment for anyone even if you were completely illiterate you could have good employment in the factories at that time and many of these people were illiterate they gave them homes adjacent to booming factories and rapidly growing cities and those homes became valuable and the jobs those people were able to get involved them in the economy positively and they didn't lead a ghettoized life the way our indigenous people did they became a positive productive part of japanese society they shared in you know sort of the shall we say the boom of of 20th century industrialization in japan in a way that our native people in canada the united people they would have st first been illiterate and at a low level of education when they were brought in to work in the factories obviously there would have been pressure on them within a generation or two to compete in terms of their level of education and participate in you know learning the the language of japanese society and everything else and again that's very different from the kind of uh segregation and isolation the indigenous people of of canada the united states struggled against on the one hand they were forced to assimilate through religious education and the united states unlike canada there was also a big significant military organization very few people know about that history basically the military setting up assimilation as training camps by the way this this whole history is closely parallel also what the soviet union did to their native people out in uh siberia people like the cats out in eastern siberia another story but sadly when you do the research very much the same story forced assimilation isolation exclusion from all the advantages in the year 2020 people are once again asking about redistribution of wealth on a massive scale and that question is important and it's also really important for us to understand the ways in which the posing of the question almost inevitably leads to the wrong answers okay you may have heard me say some sympathetic things about the concept of redistribution of wealth but i'm also its harshest critic i wasn't born yesterday i'm going to talk you through this real quickly land is just one form of wealth if you believe that the purpose of redistributing wealth is to achieve equality talking through this example quickly will let you see that no redistribution of land is a great example where redistribution of wealth if it's defined in this way if this is how we conceive of it will actually just produce a new aristocracy and unbelievable inequality inequality worse than what we have now now why why would we sympathize with redistribution of land because i i sympathize i just see the problems with it i see the shortcomings okay south korea was conquered by japan at the end of world war ii pretty much everyone who had money and who owned land they were people who had worked with the japanese regime or they were some kind of hated and resented japanese imperial overlord so when they had their liberty they became an independent nation state they had a situation of intolerable unjustifiable inequality where it's like well there were the japanese people and the pro-japanese people and then there were the korean people and south africa at the end of apartheid right so you have a situation where everyone who's rich either they were the hated white people who led this white supremacist regime or in some cases they were non-white people but who worked with this hated white supremacist regime and at the end of apartheid south africa had a sort of kind of sort of revolution right so you say okay well this is unjust we have to redistribute wealth there is a claim being made in the united states in the year 2020 that you have a society still that echoes the fundamental inequality of having a society built on slavery and genocide that the people who have money the people who have a status almost like aristocrats in the society they are the descendants of the slave owners and people who benefited from that segregated racially and equal society and of course i mean you can you can measure this although that's not a hundred percent true there's plenty of truth to it um how much of the wealth distribution united states uh today you know not you don't have to go as far back as slavery you can look at the period of redlining soft segregation you can look at decade by decade the ways in which the wealth inequality united states of america today is the result of past systemic racism there is some truth to that and of course there are limits to that analysis you cannot make the claim that one hundred percent of wealth inequality united states of america is for for these historical reasons um [Music] so there is a moral or ethical argument here in favor of redistribution that's fundamentally built on the perception of the evils of the society you currently have now again south africa at the end of apartheid more extreme south korea after being liberated from japanese occupation more extreme very easy how about the nazi regime at the end of world war ii once you turn down the nazis right there are all kinds of situations like this where there's a moral imperative there's an ethical imperative for redistribution but that can blind you to the questions of what redistribution actually is and how it works the map of british columbia i'm just going to ask you to imagine a little square cut out of the map of british columbia and this is such a simple description of geography this applies to most of planet earth you'll see why in just a moment your your situation in australia or wherever you live will not be so different from what i'm going to say okay so we take this square of the map and uh we take a ruler and we draw lines horizontally and vertically we say hey great we divided the map into a bunch of perfectly equal squares now we're going to roll the dice and we're going to distribute the land on this map to everyone equally arbitrarily and at random now if you have the delusion this is going to create equality you're wrong if your delusion is that the current distribution of land ownership is so fundamentally evil like it's the product of the nazi regime or the japanese conquering your country or apartheids if your if your perception is that the current distribution is so evil that any redistribution is preferable that's a different perspective by the end of this video i think i'm going to try to convince you that that's not a reasonable perspective so this map this square cut out of the province of british columbia some of the land has a view of the ocean some of the land is adjacent to a major road and the vast majority of the land has no view of the ocean it has no road access no electricity no sewage no no prospect of opening a shop no prospect of opening a gas station no prospect of employment nothing you can farm it's rocky wasteland right and and some of it even if it could be farmed would require an enormous investment to make it profitable or even break even to to develop that land into agricultural land right so what have you actually done in redistributing the land equally the people who were given land with a view of the ocean they will be incredibly wealthy their descendants will be incredibly wealthy for the next seven generations you've created a new aristocracy the people who happen to be given land right on the highway let's say there's one major highway going north south and one going east-west for huge parts of canada you're lucky if there's even that huge parts of this country no votes to speak of there's a lot logging trail you know nothing else there's lots of i mean again this relates to the fate of our indigenous people and these remote and inaccessible places they're places that are only accessible by bush plane and places that are only accessible in winter when the road is frozen it's we have a real problem with transportation this kind of okay the people who happen to get land next to a road they have prospects maybe not quite as good as the people with view of the ocean but they could open a gas station they could open a shop they could build a house or an apartment or something they could rent it out that building could have value right you have actually created a new and extreme disparity between the rich and the poor and some of you might say oh well the squares on the map don't have to be the same size uh a square with a view of the ocean is worth much more so we'll make it smaller uh square with access to the road is more valuable so we'll make it smaller and the the rocky barren wilderness that has nothing we could make those are and you roll the dice and you redistribute the land and you have the same fundamental problem the value of land the value of a house the value of an apartment building or even the value of an office building right is only relative to the productive potential of that piece of land of that location allow me to say okay detroit is full of empty and abandoned houses even empty and abandoned apartment buildings condominium towers empty and abandoned factories too these things are related right today if you give the native people if you give poor people who are living in the middle of the desert an abandoned house in the middle of detroit what are you really giving them are you giving them a blessing or a curse right the value of that house was created and sustained by having access to employment now on a smaller scale these things are easy to visualize like you have a town where all the houses are worth a certain amount of money in the apartment buildings the apartments are worth a certain amount of money and the economy is all pinned to one mine the mine runs out of copper the mine closes down suddenly all the buildings are worthless right and the shops close down in office suddenly offices are worthless too maybe a few businesses stay in the office but a lot of them are empty a lot of them close down and leave i did a video about a year ago about universities closing in the united states market there are university towns where the main business is a university if that university shuts down and disappears well all of the apartments and houses directly and indirectly were linked to the employment or have providing housing for students right so suddenly all of that is worthless because of that adjacency because of that opportunity right this is relatively easy to visualize when you're talking about land ownership we talk about physical buildings and it's harder to visualize for the rest of the economy but the value of most of the things you can own right it's not something static and inert it has to do with productive capacity it has to do with output right now this is very unlikely to happen as dramatically as everything closing down in detroit everything closing down and when university closes right but um the value of owning a piece of paper that says you have shares in apple computer right that's based on the future productive output of apple computer so if there's some scandal and everybody stops buying apple computer right you know the value of this people piece of paper goes down or declines if if there's some new scientific discovery that makes their computers totally obsolete and nobody wants to buy them everything again this is not actually going to happen but examples like this have happened um and look let's let's not digest things but what's hard to perceive is the value of this piece of land or this house here or now is it's not it's not something stored up it's not something latent or inherent in that land right it's because the location that land gives you access to employment gives you access to opportunity lets you participate in production lets you participate in economic output okay now most of the arguments against wealth redistribution are very insincere most of the people who will point out the disadvantages of wealth distribution are doing so just because they want to suggest to you that the inequalities we already have are optimal so you shouldn't question who's rich who's poor who owns land and who doesn't because you couldn't possibly improve on it that's ridiculous right now on the other side i've already suggested if you just assume the wealth the wealth distribution you have is completely evil like this is so terrible that any redistribution was better that can also be misleading um the problem with the right wing and conservative critique of wealth redistribution is that it never really bothers to explain in a pragmatic way what will work and what won't with redistribution what you need to do is shift from a mentality of redistributing static wealth wealth thought of as something static to a redistribution of opportunity okay that is fundamentally why giving indigenous people apartments in apartment buildings in downtown toronto in downtown vancouver back when detroit was a booming industrial town in downtown detroit getting them access to jobs in factories in the most densely populated cities that's why that would have worked all right it's not the value of the apartment on paper that matters it's not the value of the condominium in the condominium tower that matters it's precisely that they would have access to education access to jobs access to opportunity and now again depending how far back we're going in this hypothetical example it might even be especially important to emphasize access to jobs that don't require a high school diploma access to jobs that don't require university education during the 20th century all these countries canada united states australia they were actively importing immigrant labor to do job immigrant laborers who didn't speak english and who didn't have high school diplomas or didn't have a high school diploma in english to do jobs in factories they were those opportunities existed the government was reaching out and giving them to new immigrants they were not giving them to our own indigenous people which would have taken some work that wouldn't have been easy to do maybe right but if you're talking about 100 years ago or something and these are people who didn't have access to the same education as as white people it would have been especially something like access to factory jobs uh in detroit and this kind of thing where you could have in a really positive way drawing these people out of out of poverty but why somebody who's looking at this in a static sense would say oh well that's obvious the reason why is that an apartment downtown is worth more money than a huge plot of land in the middle of the the barren wilderness now there was a very simplified discussion of what makes land valuable and not before in laos in cambodia and all these places have had to deal with this issue if you're redistributing wealth in order to achieve equality some land has gold and some doesn't something land has oil and some doesn't some land can grow an orchard effortlessly and some land would take an unbelievable level of human labor and investment to get an orchard going and then once you do it's still not as productive of as and it doesn't produce as high quality fruit as the other orchard on the other land right like the inequality of the the soil the inequality of farming conditions different it's mind-blowing i remember in southern laos i read technical scientific studies on this it was just mind-blowing oh yeah well over here it had to do with um the formation of the valley in prehistoric times by a volcano that was no longer visible it was now a volcano the remains of which were below the top soil because there was a volcano over here you can grow coffee and grapes and they turn out great and just over here it's the soil is hopeless you know getting into the technical reasons that okay the land itself is not equal even in its productive capacity this way so you talk about empty land what's valuable what has it may not be obvious to the naked eye it may not be obvious when you're glancing in a map you can get into you know national uh geological surveys national uh agricultural service surveys that are color coding land and drawing and trying to make it visible where the land is valuable and not for example these these kinds of reasons but again you're not creating equality you're creating aristocracy because somebody gets the land that grows in amazing amazing quality grapes that grows coffee that's really valuable and somebody gets land that's rocky and worthless and somebody gets land that can literally have a gold mine on it and they become wealthy and their descendants become wealthy and that's it right so the arbitrary inequality is only being reinforced through this kind of of redistribution right what works is not redistribution of wealth per se it is redistribution of opportunity right that is in many ways the puzzle we're dealing with in the 21st century and i would hope i would hope that all of the stupidity all of the extremism all of the anguish of the year 2020 will lead to a renewed investigation of what redistribution of opportunity really means um the united states of america is a country where people are expected to go more than a hundred thousand dollars into debt to get a university degree at the end of that process it remains really debatable whether or not that university degree is worth anything whether or not it actually does open up any opportunity to you uh i looked at a study of what university degrees do the poorest native americans enroll in in trying to get out of poverty and it was no surprise they follow exactly the same pattern as immigrants from the philippines they're taking courses in nursing when they don't have the money to become a full nurse they get these lower level credentials and work in an old folks home taking care of the elderly and save up their money and then go back and get more credentials to become a nurse who can you know operate an x-ray machine or whatever you get get these other nursing credentials that's one of the most common you know the steps being taken for people who are not just born in the united states of america but whose ancestors have been born there for thousands of years they're still struggling from this remote position on the periphery to come into the city and have access to those opportunities have access to that education and if anything they're still at a disadvantage relative to new immigrants who've just arrived from europe or just arrived from asia or whatever this this is seen if you go if you walk around los angeles today you see 40 000 chinese people you see tens of thousands of chinese japanese filipino koreans right who've been able to make those traditions some of them by becoming nurses or what have you right and there's this this terrible struggle going on in the on the outer cusp of american civilization which is where you put where you sequestered where you isolated you know your native people so you know the complaint that the distribution of wealth you have now is fundamentally bad and evil and wrong is valid it's valid it's important it's meaningful it's real but you can't let that lead you into a meaningless and ultimately self-destructive pursuit of the readers the redistribution of wealth with the assumption that any new distribution you could arrive at will be better than the one that you already have if you try to reproduce what the free market already has accomplished in changing the prices and the value of land if you try to take that map it's okay we're not going to divide them into equal squares we're going to try to make the size and the price reflect what can really be done with the land step by step what you're trying to do is from the position of central planning and the government reproduce what only the free market can accomplish and what you need to learn to appreciate it's very hard for left-wing people is that there is this mysterious quality to the mechanisms of the free market because it's judging the value of land day after day after day again and again and again that it has already assigned values to these land in a way that no central planner ever could and now we have to take a step back and say okay we've got almost infinite money collected from taxpayers and we've got a mandate to do something the free market never could and and that is that we have to try to provide opportunity to people who have none that's something the free market will never do right the free market only provides you with an opportunity when you can afford to pay when you can pay enough to incentivize those people are giving you that opportunity so the role of government here is not really to demolish or abolish what the free market does but to understand a sophisticated way those opportunities that the poor and the disadvantage are cut off from and undo the fundamental evil of isolating black people who were liberated slaves and making them into sharecroppers right isolating indigenous people and putting them on reservations right the 21st century the challenge we have is precisely to reach out to those people who either conceptually or literally were out on the periphery of society and bring them in to share in the opportunities that are at the center