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In your original response, you gave the impression that there were two possibilities. Either the government avoids wealth redistribution, or it will take all the wealth it can without causing economic collapse. Do you know any countries that took the first option? It might technically be better to take the first option, but if it's not possible, that's not what we should be worrying about.






You are right, it is a largely academic question. In the long term, the choice of whether to redistribute wealth or not depends not on the government but on the people who appoint it or, more fundamentally, on the balance of forces in society.

In societies where the top dominates (e.g., kings and aristocracy in Medieval Europe or President and the government functionaries in the modern North Korea), the redistribution of income will go from the bottom to the top. In societies where the middle class dominates (e.g., most western countries until the WWI) there will be little or no redistribution. In societies where low classes dominate redistribution goes from top to bottom.

Once a society fully transitions from stage two to stage three, the real question for the government is not whether to redistribute or not, but how to do it most effectively. After some experiments, most Western governments found out that taxing the rich at above the 90% rate is not the best way to maximize revenue.
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melian
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