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Politics : View from the Center and Left

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To: TigerPaw who wrote (11029)	2/6/2006 8:03:30 PM
From: TimF	Read Replies (1) of 541778

An investment can continue to produce wealth indefinitely. A business is started with investment capital, and assuming the company does well you get a stream of income that can be reinvested. The income for the company can go on forever so why shouldn't the income from the investment? You seem to be arguing that it would all be good if only everyone could get this continuing reward from a single contribution, but in reality that would just mean nobody has an incentive to continue contributing. A lot of investors are not wealthy people who can sit on their hands for the rest of their lives. Even wealthy people often have an incentive to continue to work or invest. They may not have to work but they often want to and often benefit from it. The investment capital continues to be at work whatever the initial investor does. Even when the investor dies the company can live on and continue to produce wealth. The distortions to the economy of which I write come about because some are receiving an unending stream of benefit from a one-time act, and so have no incentive to keep contributing. I've been trying to reduce the repetitive part of my responses as this conversation comes to a close, but I'll repeat my answer here. Its not a distortion. Even if it is a bad thing (and I don't think it is), it is a natural consequence of the fact that the initial investment continues to produce wealth. If I own land and dig an oil well I can keep getting wealth from the oil well until it runs dry. A stock investment can keep producing wealth indefinitely. You might feel that the "oil well" should be taken from me (with compensation) if it continues to produce for too long. I disagree, but even if I did agree, the fact that an investment can have a return for an indefinite period of time isn't a distortion. I know that the gravy train seems like a nice policy to the one with a gravy train, but it's bad public policy. I don't think most aspects of private property should be a matter of public policy. It can and IMO should be public policy to prevent theft of property and to settle disputes when the real owner is unknown. Maybe to regulate in such a way as to reduce the possibility of fraud but other than that its not "the public's" business to have a policy about it. Tim

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