Stealing from the Poor to Give to the Rich: An Anti-Robin Hood Story

Release Date
January 7, 2014


Poverty & Inequality Rights

Have you ever thought much about property rights? Many believe ownership protections primarily favor the wealthy, but it turns out that the wealthy and politically connected actually benefit more when ownership is vulnerable. Without strong property rights, those with the power are able to take property from those who lack such political connections. In places like Zimbabwe—where the government is able to confiscate profits, merchandise, and even businesses with ease—the lack of property protections has been one cause of the country’s decline. Today, Zimbabwe is the poorest country in the world, and eroded property rights are at least partially to blame. Prof. Dan Russell argues that “doing less to protect ownership turns out to be a really effective way to create poverty.” Perhaps property rights deserve protecting. Except, maybe, among Finnish race car drivers. [article]: Joy Morrison chronicles the controversial topic of land redistribution taking place in Zimbabwe and the struggle over property rights… [article]: Samantha Power explains the economic demise of Zimbabwe under President Robert Mugabe [report]: Data on Zimbabwean prosperity before President Mugabe [study]: Data on Zimbabwean poverty today

Stealing from the Poor to Give to the Rich: An Anti-Robin Hood Story
In Finland automobile racing is a really popular hobby and a lot of people belong to amateur racing leagues. Now these clubs want the winners to be the best drivers. The actual car shouldn’t make all that much difference. The clubs really want the cars to be well junk. So they come up with two very clever rules.
First if any driver goes to another driver and says I want to buy your car then that driver has to sell and second no driver can sell for more than say fifteen hundred dollars. Now there’s a really simple lesson here. Walk up to someone and point to something and say I want that and you can’t stop me and that person can’t create wealth there anymore. Any wealth that they try to create will just be taken.
Now in Finland this practice is just restricted to these racing leagues and it’s supposed to make the races more exciting. But imagine the devastating poverty that would be created by plans like this for people’s homes or their farms or their businesses.
In Zimbabwe for example officials have made it so hard to get a business license that most small business owners operate without
any legal proof that they actually own their business. So corrupt officials are then free to help themselves to merchandise cash the whole store if they want and really there’s nothing the owners can do to tell them no. These people can never create wealth in their businesses and so they stay poor.
Now Zimbabwe didn’t always work like that but within just a few years these sorts of practices have wiped out decades of rising wealth in Zimbabwe and made it today the poorest country on earth. That’s because doing less to protect ownership turns out to be a really effective way of creating poverty. In fact it’s so effective that people can actually use it to design poverty with surgical precision.
It’s easy to think the laws protecting ownership mostly favor the wealthy but the fact is that people who are already rich and powerful and politically connected can get a lot more favors when ownership is vulnerable.