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All You Need to Know About Inequality In Just a Couple of Paragraphs
An email from a very wise friend:
Published in GeneralIt seems to me that inequality is a problem, unjust, wrong only when distribution is undertaken by an agent who should not be favoring one over another—e.g. the parent who favors one child over another. When inequality is the result of an impersonal process, I don’t see the argument. Isn’t justice a matter of getting what one deserves or is owed? How can one deserve anything or be owed anything by an impersonal process? Is it unjust that California has a better climate than New Hampshire? Is it unjust that Magic Johnson earns more from basketball than a fan in the stands?
The enthusiasm for making inequality the great economic issue of the day seems to be, rather, no more than a transparent demagogic appeal to envy—itself a mortal sin.
In contrast, the use of government coercion to redistribute income—now there is an obvious evil.
Like.
My own view is even simpler. If you believe that all voluntary transactions are utility maximizing for both parties (which is the philosophical essence of capitalism), then people get wealth by making other people’s lives better.
When I see a really rich man, I see the millions of lives made better by his product, even if his product is album or a role in a hit movie. Threaten to take away his wealth, you not only make his life worse, but you make the lives of everyone that benefited from transacting with him worse off too.
Punishing wealth accumulation is very destructive to overall utility of any society. But that is precisely why the left pursues that strategy. To paraphrase Mencken, the modern left lives in the the haunting fear that someone, somewhere, may be happy.
“Either ‘social justice’ has the same meaning as ‘justice’ – or not. If so – why use the additional word ‘social?’ We lose time, we destroy trees to obtain paper necessary to print this word. If not, if ‘social justice’ means something different from ‘justice’ – then ‘something different from justice’ is by definition ‘injustice.'” — Janusz Korwin-Mikke
Exactly! We should look at dollars has certificates of appreciation. People give them to you because they appreciate what you have done for them. If you have a lot, that means you have done a lot for people.
20-Somethings all over Ricoland are saying “That’s great, but who is Magic Johnson?”
It is worthy of note that coveting is the only “feeling” in the 10 Commandments. You are not commanded to love your parents – only honor them.
The constant drumbeat of “unequality” is nothing more than pandering from those on the left to covet. I have argued til I am blue in the face that taking away the wealth of some will not increase the wealth of others. They even acknowledge that truth.
They are doing very well financially – the fact that others are doing better is simply unacceptable and the government should be used to right that wrong.
My mother had the same attitude about healthcare. Her own healthcare was outstanding. But she had a sneaking suspicion that someone out there was getting even better healthcare and she saw Obamacare as a way to right that wrong.
All one has to do to counter the argument is to stop using the left’s handpicked language. The problem is not one of income distribution, it is one of unequal effort, bad decisions and sometimes, just bad luck. (Life sucks. Come to terms with that first.)
And if the leftist says it’s privilege and connections, agree with them. Tell them too many Democrats like the Clintons, the Reids, the Obamas, go into politics with modest means and come out filthy rich. The system they champion, of regulatory practices designed to reward those with the proper political views, are anathema to equal opportunity.
Because I don’t wish to distract from the subject, I won’t identify the influential speaker of this isolated quote in the news today:
This seems to be a critique of the “trickle down” theory. The critique obviously fails. Wealthy capitalist nations measure poverty much more generously than non-capitalist nations. In one case, poverty means struggling to pay bills. In the latter, it means impending death. I see no logical support for the argument that a growing capitalist economy does not uplift its lowest members.
In advanced capitalist societies, the poor suffer more from crime, family decay and ignorance than from want of jobs or resources.
That said, I would again caution against idealizing the effects of capitalism. In a capitalist society, some people get rich while producing wealth and value for others, while others get rich by destructive means or unsavory products. People are commonly misled, manipulated, abused, cheated, etc. We cannot effectively advocate capitalism while ignoring its abuses.
Capitalism is simply freedom in the marketplace. Freedom is good, but its consequences are not always so. The mixed fruits of capitalism reflect the mixed fruits of human nature.
I should add that sometimes our challenges involved in uplifting the poor are circular. For jobs, you need businesses. Who wants to open a business in a high crime area? But how much harder is it to coax kids away from crime when the local jobs offer little opportunity for advancement or skill development?
Always and everywhere, it is more difficult to rise from the bottom than to fall from the top. Always and everywhere, proactivity and perseverance are the keys to success. Respect for others and interest in their needs don’t hurt either.
I like this casting.
People on our side of the ideological spectrum should keep focused on the moral case for capitalism, rather than the utilitarian case.
When I was a kid my father told me to think of dollar bills as “work receipts.” Not everything he tried to teach me sunk in, but that one did.
Very well said
The faux concern over “income inequality” is blather rooted in emotionalism and not critical thinking. It is rooted in the propensity of the Left towards totalitarianism. A man making a million bucks a year and a man making a billion a year are demonstrably unequal relative to one another, but neither is poor. Annefy is correct that this attitude is rooted in covetousness. The questions to be asked are: are peoples basic needs met, are they getting an honest wage for honest work, are they given equal opportunity to better themselves? If so, then who cares whether someone makes more than another? Judging on outcomes in isolation from how those outcomes arose is disingenuous.
Peter, the point is well-put and well-taken, but just to play devil’s advocate:
Our legal system, in theory, is supposed to be a fairly impersonal process, and people are not entirely wrong to expect it to owe them “justice”, whatever it is that justice means in a strictly legal context.
EJ nails it right here.
The terms “income inequality” and “wealth inequality” were strategically chosen and promoted to misappropriate the concept of “equality under the law” for redistributive purposes.
And they’re good at it; the words don’t even make sense together, yet this has become the accepted terminology.
Sigh… Simply using the phrase “income inequality” is halfway to losing any argument. We need to promote better and more accurate terminology. “Income diversity”, perhaps?
Oddly enough, I started reading Ricochet’s own Richard Epstein’s broadside book “Why Progressive Institutions are Unsustainable“. It is very good on this topic.
When I read books, I usually highlight sentences or paragraphs that are particularly memorable but for this book it might be less work to highlight the sentences or paragraphs that are not particularly memorable.
I haven’t finished it yet, but based on what I’ve read so far, I HIGHLY recommend it.
No. That’s not the primary question. You should look at someone and ask, “Why is this person’s basic needs not met?” If you ask this question of 100 people you should get 100 different answers and none of them will fit on a bumper sticker, in a 15-second sound bite or a single piece of legislation.
The next question is this, “Do they have a job?” If not, why? Is it a physical or mental boundary? Let’s provide almost unlimited help. Is it a string of extremely poor decisions or just bad luck? Let’s provide an individually designed solution with an expiration date. Is it because the Welfare State is a disincentive? Cut it off. In the words of Dennis Miller, help the helpless, not the clueless.
I am a child of the Welfare State. I lost my dad to cancer when I was 16. Social Security, VA and Pell Grants came my way. But there was a limit. Aid ended after the semester that I turned 22. No ifs, ands, buts or Executive Order extensions.
Sorry to cut the rest, but the word limit is what it is. What I’m getting at is the perceived problem starts with people not being able to meet their basic needs which leads to the why of income inequality. Before we address income inequality, we need to question the evaluation that they are unable to meet their own basic needs (which includes defining basic needs). I’m not willing to concede that basic needs aren’t being met without making sure the Left isn’t arbitrarily making that determination based on people having multiple cars, phones for everyone, cable TV, and other things that while nice to have are not basic needs for living. When I was a child, my family lived on disability for a time after my father was electrocuted so I, too, know the welfare state firsthand.
Covetousness is still a sin, but one that’s been turned on its head. Now the fault lies with the person coveted not the person doing the coveting.
I have always advocated using the term EARNINGS INEQUALITY rather than income inequality. See the different spin? “Income” is passive, “earnings” is active. Put the responsibility where it belongs.
A loving God would not regard as a mortal sin the envy felt by a young black kid growing up in the dystopian hell that is East Cleveland, and a loving conservative should look hard for policies to put him on a more equal footing with the luckier kids in the burbs.
(Which is not to say we should embrace liberal policy, of course: East Cleveland IS liberal policy.)
Exactly. Income isn’t distributed it is earned. The left has to talk about distribution or their argument falls apart. No one believes in earnings equality.
From a liberal perspective, there are essentially two positions on this subject. First, the grass roots liberal actually believes in income inequality as the result of a system that favors one group of people over another. This person sees the system as that parent favoring one child. They do not believe that hard work will make anyone successful, because they believe the deck is stacked against many folks. If we are going to have this debate, we ought to understand the mindset. It’s not the result of totalitarian nor covetous thinking on the part of the grass roots liberal.
Then there is the liberal politician. Regardless of what this person believes about “income inequality”, they know it sells. So they will say anything to perpetuate the myth.
In the end, however, it is not necessary to convince either of these people of anything. Nor is it possible. It is that 15% in the middle you have to convince.
We are witnessing the reason the founders did NOT want a democracy. The majority could vote to steal property from property owners and use the proceeds to buy votes for themselves…in order to do more of the same.
Big improvement, but the word “inequality” suggests a need for equalizing. How about “earnings difference?”
While I agree with your basic argument, it’s important to emphasize that the negative “effects of capitalism” that you mention are not in the least limited to capitalism itself, but are, as you suggest in the end, the fruits of human nature.
The destructive means, unsavory products, misleading, manipulation, and cheating you mention (and I’ll throw in corruption and pollution) are in fact more common and more egregious in statist systems. Capitalism is the system most likely to curb such abuses. No system is capable of eliminating them.
That said, fighting to eliminate the abuses is crucial to the success of the capitalist project. Capitalism’s defenders should not be defending corporate misdeeds.
I, too believe the deck is stacked, but it doesn’t then follow that hard work won’t make people successful. Nothing guarantees success – nothing. But hard work is the one tool most of us have the most control over, and it’s perhaps the most reliable means of achieving at least a moderate amount of success, especially for those who were born with the deck stacked against them.