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Year 1–2: Victims Caught UnawaresIf you’re lucky, the first year or two, you will catch some of the most productive people unawares, and it will be the only time that something like the outcome you want to happen will happen.Your gang will be able to steal their “excess” for your preferred “charities”.The top managers will do the best they can to not waste the product of their labors on your worst charities, and then they’ll quickly alter their behavior and compensation to prevent you from stealing from them again.Year 2–5: Anti-Theft AdvisorsFor a bunch of years thereafter, your policy will create a whole new crop of anti-theft planners, who will devise various schemes to keep the thieves at bay. Companies will migrate compensation to perks, annuities, chalets, jets, “office space in Paris”, meetings on Phuket Island where comfort women give full body massages, etc, such that enticement to work for them is not accounted for as “compensation”.This will distort the economy, as companies will have to pay for a bunch of glitz and finery that no one really prioritizes, but which they must do in order to attract the top talent to their company, given that your prohibitions forbid them from paying the talent directly.Your gang of course will be outraged by these schemes that deny them plunder and will launch investigations costing millions of dollars to uncover such “theft shelters”, and they’ll pass a whole new slew of laws and regulations, hiring a new cadre of bureaucratic investigators, unleashed to uncover such “fraud”.Of course, the companies and the managers will not be sitting idly by. They will be rigging elections, putting their people up for office, or corrupting powerful legislators to offer loopholes. And they’ll be capturing the investigators and bureaucrats — hiring in-laws and doing favors and offering “consultancies” after retirement.Year 4–8: Expanded TargetsThe total money your gang will be stealing will quickly go down. Your gang will beat the drum of envy and “unfairness” and “selfishness”.Politicians seeking even more “campaign contributions” and bureaucrats seeking even more power and perks, will tell tales of “robber barons” who earned $9.999M, and thus unfairly kept money from the deserving “charities”.Your gang will lower the level deemed “excessive” from $10M to $2M, which in turn will expand the anti-theft advising business, and increase the size of government bureaucracies who are attacking otherwise peaceful people.A few top managers — ones not as clever, or as connected, or who have the integrity to not play the government graft game — will be loudly prosecuted and fined, and a few jailed with righteous government apologists applauding the great job the gang is doing protecting the common people from those who would create wealth.The distortions in the economy will increase as top managers spend more of their time, not increasing wealth, but trying to stay out of jail and yet receive compensation commensurate with their value.Top financial advisors will focus on anti-theft shelters, rather than developing instruments to increase productivity. And a bunch of bright do-gooders will waste their lives going into government to attack managers for simply wanting to be paid for creating a lot of wealth.A New Normal?Most likely, a new normal will settle where the cleverest managers use the cleverest advisors to hide as much compensation as they earned before by corrupting government bureaucrats and buying off corrupt politicians.The most corrupt companies find ways to capture and use the investigative bureaucracies to cripple their competition by prosecuting the competitors’ managers.The overall wealth will decrease by multiple times the amount that is wasted by these new distortions.Year 5–8: You win?But let’s assume the unlikely — that your populism pirates are somehow successful in thwarting the inevitable corruption that arises from your attempt to use violence to unjustly steal that which is not yours.Your Party Faithful ferret out the alternative compensation schemes, expose the purchased politicians, and demote the captured regulators. And you put the most productive people in the world behind bars for trying to keep for themselves what their labor is truly worth.The obvious cost is that these people will no longer be producing wealth — yes, you can be satisfied that they are not producing wealth for themselves, which seems to be the only thing that the envious are concerned about here. But the rest of us should be concerned that they also will not doing what they uniquely can do — producing enormous wealth for the rest of us.Worse managers will take over from them, who are not as efficient or as innovative, and the economy stalls relative to what it would have been without your theft.But no one will be able to accuse you of what you are destroying, because with a Steve Jobs in jail, you will never hear of an iPhone.Year 5–10: Charity CompetitionCompetition amongst the charities that your gang designates as worthy of the plunder will heat up. They will battle one another to attract the “contributions” of the “excess”.They will name buildings, hold honorary dinners, pay Springsteen to sing at private. They'll hand out Directorships to family members, and hold junkets where politicians and bureaucrats and managers rub shoulders together, nominally talking about how to help the charity do more “good work”, but of course conspiring to use government power to do more evil.The more connected charities will lobby to reduce the number of charities by soft money support for their own politicians and by capturing their own bureaucrats. And your gang will steer more plunder towards these successful lobbyists, while other charities get less.More and more of their budgets will be dedicated to entertainment, brown-nosing, lobbying, influencing, and favoring, and less of their budgets will serve their nominal clients. Lots of charities, which can’t compete in this new political gamesmanship, will disappear, along with their good works. And a “crisis of charity” will develop that your plunder pirates will come up with even more distorting policies to “fix”.Year 8–12: Waste of Top ManagersThe ultimate price — if you guys successfully fleece just compensation — will be that those companies that would be able to produce much more wealth were they able to attract the top talent, will not be able to attract the top talent they need.The top talent, instead of going where they can produce the most wealth in the world, will instead go to where it is easiest and not as much trouble. They will take their $2M capped salary from the lesser company, put in their nominal time doing an okay job, and spend the rest of their time golfing, not using their unique gifts to create the most wealth they can for the world.The lack of creation of new products, new industries, lower prices, more jobs, etc. can not be noticed. Instead more and more government bureaucratic economists will worry that “the ‘economy’ is not producing enough” wealth and jobs and products for the number of people being born. Salaries will go down, average wealth after inflation will go down, discontentment will rise.Luckily, your band of thieves can get the media to claim that the problem rests entirely with these robber barons who are selfishly not doing their job. You will rally the populace to give your government gang even more power to control and manage companies, “to produce the wealth that we all need” — as only government bureaucrats can produce.Year 10–14: Economic growth in a Few NationsEventually, we’ll see companies moving and forming overseas, in a couple of countries that prioritize growth to demagoguery. These countries will become a “capitalist havens”, where top people will live in wealthy enclaves and get paid again something close to what they are really worth.Your gang will be outraged! that your victims are fleeing. Where is their national pride? Where is their civic responsibility?! Well, you don’t need them anyway!Nonetheless, you’ll institute new rules to penalize anyone who dares to move overseas, making clear the slave relationship you have with your victims. Your populist campaigners will urge higher tariffs on the products from the unfair competition of these foreign countries, and you will tax your subjugants to subsidize the diminished corporations that remain in your country and are floundering under inferior management.Your people will suffer as they get worse products at higher prices, and are taxed through your various schemes to subsidize your new crop of corporate cronies, who of course loudly support your goals of “reasonable salaries”.Bottom LineGovernment mechanisms, because they force people through violence to do things that do not align with wealth creation, will not have the long term consequences that your limited brain (relative to the infinite possible future universe) imagine they will.The people you try to victimize will react to protect themselves — and you will react to their reaction by yet another turn of the government ratchet of violence, creating yet more distortions and wealth destruction.Some of the brightest people in your country will be diverted from creating wealth and abundance to instead participate in your cat-and-mouse game of hide-and-theft. Charities will also be distorted and undermined.But government will expand, as it always does, and become more corrupt, as it always does, throwing ever more wrenches in the machinery of wealth generation.As it always does.In the end, if there are a few people who in fact do know better than anyone else how to create enormous wealth, they will either be disincented, or wasted in suboptimal jobs, or they will flee to places where their value can be correctly compensated.Your parasitic government, having lost the host you had expected to dine on, will be left to grind down the common folk with additional taxes, that must be paid from the reduced wealth that your policies produced.See Related:0938: How would taking money hoarded by the ultra rich affect the world?0884: Why do some people believe that the redistribution of wealth is wrong?0989: Why do some people believe that the wealthy steal their wealth rather than creating economic value?0869: Why do some people get paid thousands of times more than other people?0819: Do the wealthy deserve more wealth than the rest of us?0830: Why do libertarians assume progressives envy the wealthy?0311: Is unequal — or unjust — wealth the problem?0784: Does capitalism ensure the least amount of corruption in any political system?0950: Is full equality possible in a society with private property?0327: Parable: Do people control markets or do markets control people?0441: What would business owners do if we didn’t take as much of their money as taxes?0421: Shouldn’t the rich be taxed more given that they value an additionally saved dollar less than the poor?0558: Parable: How can a free country compete with another nation’s subsidies?0812: Why don't conservatives vote to help the poor, like Christ and progressives demand?→ More essays on <Entrepreneurship and Business Management> by Dennis→ Return to the <Table of Contents> for Dennis’ Libertarian Essays<, Wealth, RunBusiness, Socialism, Cronyism, GovFail,>