Proposition 47 Case Study
Today I want to talk about Proposition 47, which was passed in California in 2014. It reclassified nonviolent crimes such as drug and property offenses from felonies to misdemeanors. This means that instead of getting a jail sentence for theft/vandalism, you could now walk away with a warning. Officially, this was done to reduce the prison population and save the state money, although the real reason was probably politics. It's no secret that certain groups are disproprtionaly represented among the prison population. A popular narrative nowadays is that these groups are being unfairly targeted by "the system", a narrative that many seem to be falling for.
Proposition 47 has led to a massive increase in petty theft and shoplifting in California. For example, in San Francisco, the number of reported shoplifting incidents has increased by 753% since 2014. In Los Angeles, that number has increased by 400% since 2014. In San Diego, the number of reported shoplifting incidents has increased by 270% over the same time period.
For those who prefer anecdotes to statistics, here is a recent tweet showing what it's like running a store there:
There are numerous other sources talking about this issue. With any theft under $950 no longer being prosecuted, shoplifting is now rampant. But at least we can now collectively feel good about the "equity" we've created. The road to hell is paved with good intentions. 60% of Californians voted in favor of this proposition, genuinely believing they're making the world a better place. The voting map of those who voted in favor vs against looks like this:
The irony here is that majority of the people who voted in favor live in the richest parts of California, oblivious to the world outside their own ivory tower. Passing this proposition was akin to Marie Antoinette saying "Let them eat cake".
California is going through the same phases as Detroit once went through. At its peak, Detroit was the place to be, the Silicon Valley of the 50s. Henry Ford offered 4 times the salary to the average factory worker, and people flocked to Detroit from all over the country. When times got good, the masses voted for more free stuff, until the businesses were overburdened with taxes, regulations and unions. Businesses started leaving. The city was left with a massive debt, raised taxes even more, and drove even more businesses out. Eventually, the city went bankrupt.
There is a pattern that I've noticed while adding the electoral data to Investomation - a pattern that you, no doubt, have noticed as well. Most rural towns are Republican (red). As they grow into cities, they become increasingly Democrat (blue). California went through this phase in the 90s, Texas is going through this phase now. When quality of life improves, more people flock to the area - people with different mentality from those who improved the quality of life in the first place. They think differently, they vote differently. These people eventually upset the delicate balance that prosperity was built on. Hard times create strong men, strong men create good times. Good times create weak men, weak men create hard times.
Don't get me wrong, I'm not advocating for Carnegie-era Capitalism. I'm not defending the Triangle Factory. But we have to understand that to redistribute wealth, we should first actually create it. I was born in Soviet Russia, and the whole "equity vs equality" debate has an eerie resemblance to Communism. I'm sure many of you have seen the following cartoon:
What this naive cartoon doesn't show is that those boxes are full of body parts of people who were cut off at the knees for being taller than everyone else. Regardless of intentions or political ideologies, one-party system leads to abuse of power. Those whose votes aren't heard eventually have no other choice but to vote with their feet. The very businesses that built California are now fleeing. For every business owner there are a dozen employees, who don't understand the challenges of running a business, but insist on having equal say in how to run one.