When Liberals say that we should ‘divide the pie’ they are (purposely?) misleading the public into thinking that wealth is something that is just out there and can be physically divided. Even worse, the idea that wealth is a like a pie gives the false impression that the economy is a zero sum game. That is, if I am wealthy (have a large slice) someone else will necessarily be poor (have a smaller slice).
The fact is that wealth is not static. It is a continuous cycle, constantly being generated every single day. Our world would not last a month if everybody simply stopped turning the wheels. Most importantly, liberals don’t seem to understand that nowadays wealth is a lot different than what it used to be. Before the industrial revolution wealth was land. Countries went to war for it, farms (and our existence) depended totally on it. After the Industrial revolution, the equation started to change. You had small factories producing more wealth than large plots of land. Energy and information became the bottleneck. Now in the information age, people are wealth. If someone broke into my company’s office, there wouldn’t be a lot to be stolen. A few computers you can find at your local store, some desks and cheap paper. Hardly worth the trouble. My employer makes money purely on brains. Software is the closest we ever got to translating pure thought into products. There is no way to steal or redistribute that.
Therefore, what makes companies powerful nowadays is how they deploy their resources into ‘harvesting brains’. That is by the way why recessions are so powerful: it is not the direct losses from bubbles that cause the damage but the fact that companies across the board will decrease their investments in the economy (which in turn decreases jobs, which in turn decreases consumption, which in turn lowers tax collection). By the way, this is the main point in Ayn Rand’s Atlas Shrugged: the fact that the world’s producers (i.e., the 1%) are the motive power behind our society.
So when Liberals go about the need to tax more, or the evils of inequality, they should ask themselves if that is really an evil in the first place. As long as they keep looking for pies to be divided, they will be missing the point. You need to teach people how to build ovens.